Ms Lily Dewhurst v Australian Taxation Office

[2012] FWA 8288

[2012] FWA 8288

The attached document replaces the document previously issued with the above code on 1 October 2012.

The Decision has been refiled to edit paragraph 32 to remove the word ‘not’ so that it now reads “...the loss was in the course of the employee’s employment”.

Melissa Nassios

Associate to Commissioner Roe

Dated 2 October 2012

[2012] FWA 8288

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Ms Lily Dewhurst
v
Australian Taxation Office
(C2012/875)

COMMISSIONER ROE MELBOURNE, 1 OCTOBER 2012

Alleged dispute regarding concerning loss or damage to clothing or personal effects. ATO Enterprise Agreement 2011 Disputes avoidance and settlement procedure Clause 145 and Clause 42 Loss or damage to clothing or personal effects.

[1] On 31 July 2012 the Australian Services Union (ASU) on behalf of Ms Lily Dewhurst an employee of the Australian Taxation Office (ATO) made an application under s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute in accordance with a dispute settlement procedure. The dispute was pursuant to the ATO Enterprise Agreement 2011 (the Agreement).

[2] It is not in dispute and I am satisfied that the dispute falls within the scope of the disputes avoidance and settlement procedure Clause 145 of the Agreement and that the necessary steps of that clause have been followed by the parties so that I am able to deal with the dispute. The parties agree and I am satisfied that the matter was the subject of a conciliation conference on 14 August 2012 before me and that conciliation is exhausted and not likely to lead to a resolution of the matter.

[3] The dispute concerns the application of Clause 42 of the Agreement, loss or damage to clothing or personal effects. The ASU on behalf of Ms Dewhurst claims that the ATO is liable to pay compensation to Ms Dewhurst for loss of personal effects which occurred on or about 20 March 2012. The ATO denies that it is liable to pay such compensation.

[4] The parties agree that I should now arbitrate a resolution to the dispute.

[5] I had the benefit of submissions from the parties.

[6] Clause 42 of the Agreement provides that:

“42. Loss or damage to clothing or personal effects

42.1 An employee will be reimbursed reasonable costs for the loss of, or damage to, clothing or personal effects which occurs in the course of the employee's employment.”

[7] The Applicant gave evidence that:

“On 20 March 2012, I brought these two bags to work. Inside the black shopping bag was my medication and diabetes equipment (as usual), my iPod charger, and also in two separate boxes) two broken necklaces. I brought these necklaces in because a co-worker, Jill Clough (who makes jewellery as a hobby) had offered to fix them for me. One necklace was made of black hematite, and the other was made of pearls. My ex-husband bought me these pieces in the early 1990s. The pearl necklace was bought in Dubai in about 1992. I think it cost around $2,000. I can’t remember where the hematite necklace was purchased, but I think it cost around $7,000. I put the handbag and shopping bag in the cabinet in my office, as usual. I did not take them out again all day. Jill was not at work that day, so I did not have a chance to give the necklaces to her. I did not mention to anyone that I had the jewellery for the fear that it may be stolen.

On the same day (20 March 2012), my husband was on jury duty and finished early. He called me at work approximately 2.45pm stating that he would come meet me at the WTC so we could go home together. I informed my Assistant Director, Joanne Holt, that I was leaving at 2.50pm to meet him. I took both my handbag and recycled bag out of the bottom draw and placed both bags on my “visitor’s chair”, next to my own chair, at my workstation. I turned around to lock the cabinet, as is my practice at night. I then turned back and picked up my handbag. I accidentally forgot to pick up the shopping bag, because I was in a rush. I then went downstairs with a colleague, Maria Evdokimou. The following morning, Wednesday, 21 March 2021, when I arrived to work, my shopping bag was not on the visitor’s chair. One of my co-workers, Jenny Watson, does not work on Wednesdays. I presumed she had seen the bag on Tuesday afternoon, and locked it away somewhere for safekeeping. I decided not to report the bag as stolen until I had checked with Jenny. On Thursday 22 March, 2012, Jenny was at work. I asked her if she had locked my bag away. She replied that she didn’t and had not seen the bag at all. On the same day, I sent an email to all the team leaders on our floor to ask all staff if anyone had seen my bag.

I reported the theft to my senior executive, Robert Charles who advised me to go to the Police (who were also at the WTC) and lodge a report. I did this on 26 March. Robert Charles emailed a ‘Green Communicator’ across the ATO in the WTC reporting that a theft had occurred and to remind staff of the Code of Conduct.

After it was established that my bag was stolen, I had to buy new medication and diabetes equipment. Until that time, I had been using insulin at home, but I was taking the insulin without being able to monitor my blood sugar levels properly (since the monitor had been stolen). Buying new mediation cost me $53.60. Buying a new monitor cost $70, and new diabetic strips cost $5.

I filled out a claim form for ‘Loss or Damage to Clothing or Personal Effects’ on 23 March 2012. I claimed the expenses above. I also claimed $1,800 for the necklaces. I put this number down because I thought that’s what the necklaces were probably worth, and because I was prepared to accept that amount from the ATO.

My Director, Connie Guglielmino, asked me to make a claim on my home and contents insurance. I rang my insurance company, Ready Plan who advised that I could not lodge a claim as the theft did not happen at home. Ms Guglielmino also asked me if I had any photos of the necklaces to show her. I said I’d look at home. Later, I told her that I had found some photos, however, she never asked to see them.

On about 10 April 2012, Ms Guglielmino rejected my claim.

I made contact with my Union Representative, Jeff Lapidos, and we have gone through the dispute and appeal process.

In the last few days I have gone to a couple of jewellery manufacturers, with a picture of the necklaces, and have asked what they would cost to reproduce. One place told me that the pearl necklace would cost $1,500 to replace. Another place told me the hematite necklace would cost $2,000 to replace.” 1

[8] The evidence is largely uncontested. The ATO do not accept that it is proven that the personal effects were stolen. It is possible that they were accidently thrown out by a cleaner.

[9] Ms Dewhurst accepted in cross examination that she had never worn this jewellery to work or brought the jewellery to work before. She accepted that it was only worn on special occasions given its monetary and sentimental value. However, Ms Dewhurst did on occasion wear a valuable ring to work. Ms Dewhurst accepted that there was a need to take reasonable care of valuable personal items in the workplace particularly given that the office is an open plan office and that it is accessible to cleaners and others at night when there are not many people in the workplace. Ms Dewhurst was conscious of the risks to valuable personal items.

[10] It is not suggested that the arrangement that Ms Dewhurst made with the work colleague Jill Clough, who makes jewellery as a hobby, had anything to do with her employment by the ATO. Of course work colleagues make connections unrelated to their work but the employer cannot be said to authorise or have any responsibility for such connections.

[11] There is no suggestion that Ms Dewhurst was negligent. It is clear that Ms Dewhurst is a careful and responsible person who has been a dedicated employee of the ATO for many years. It is also clear that due to simple and uncharacteristic oversight Ms Dewhurst suffered a significant loss of jewellery which was valuable and of personal significance. There is no suggestion that Ms Dewhurst’s claim was excessive or unreasonable when compared to the value of the items. However, it is clear that Ms Dewhurst did not take reasonable action to secure the items given their value when she left them in an open shopping bag on a chair in the open plan office during the afternoon and overnight.

[12] I have considered the submissions of the parties as to the appropriate approach to the construction of the Clause in the Agreement. The parties referred me to the principles for proper construction of a term of the Agreement and to a number of cases. I have considered each of these matters in arriving at my conclusions.

[13] The Applicant brought evidence that other employees who had lost personal items were reimbursed. There were witness statements from two employees. In one case the ATO paid $100 to replace a wallet and $400 to reimburse lost or stolen cash. In another case a wedding ring was lost in a toilet at work and the ATO reimbursed $350.

[14] In my view there is no ambiguity in the meaning of the words of Clause 42 read in context. It is therefore not necessary to look to the mutual intention of the parties or to evidence of the past practice of the ATO. The past practice of the ATO in this case is not particularly relevant for a number of reasons including that it does not demonstrate an entitlement to reimbursement in such circumstances; the ATO may simply have been acting on a good will basis. The ATO guidelines are also not particularly relevant in that they are not incorporated into the Agreement (see Clause 6 of the Agreement) and it is clear that the Agreement itself takes primacy. The Agreement is expressed to be a comprehensive Agreement (see Clause 150 of the Agreement). It is relevant background information that the ATO guidelines have been in use for a considerable period of time and there is no evidence that they have been challenged by the ASU or that issues with the ATO guidelines or practice has led to any change in the provisions in the current Agreement when compared to the earlier agreements in respect to reimbursement for lost or damaged personal effects. There is no evidence that the guidelines have been the subject of consultation let alone agreement with the ASU or other bargaining representatives for the Agreement. However, it appears that Clause 6 of the Agreement would require the ATO to consult should it seek to change the guidelines. It cannot be assumed that it is the mutual intention of the parties that the guidelines reflect the proper meaning of Clause 42.

[15] I accept the submission of the ASU that in settling a dispute over the application or interpretation of Clause 42 of the Agreement I am not simply required to settle the dispute over the proper interpretation of the Clause but also can resolve the dispute about what should be done to settle the dispute about what is fair and reasonable for the ATO to do consistent with the Agreement.

[16] The provision in the Agreement is a subject matter commonly found in Agreements and Awards. For example Clause 32.2(d) of the Manufacturing and Associated Industries and Occupations Award 2010 states:

“(d) Damage to clothing, spectacles, hearing aids and tools

(i) Compensation must be made by an employer to an employee to the extent of the damage sustained where, in the course of work, clothing, spectacles, hearing aids or tools of trade are damaged or destroyed by fire or molten metal or through the use of corrosive substances. The employer’s liability in respect of tools is limited to the tools of trade which are ordinarily required for the performance of the employee’s duties. Compensation is not payable if an employee is entitled to workers compensation in respect of the damage.

(ii) Where an employee as a result of performing any duty required by the employer, and as a result of negligence of the employer, suffers any damage to or soiling of clothing or other personal equipment, including spectacles and hearing aids, the employer is liable for the replacement, repair or cleaning of such clothing or personal equipment including spectacles and hearing aids.”

Clause 19.2 of the Clerks-Private Sector Award 2010 states:

“19.2 Clothing and footwear

(a) The employer will reimburse employees engaged in work damaging to clothing (for example, the use, maintenance or running repairs of office machines or in the receiving and/or despatch of goods) an amount equal to the cost of uniforms and/or protective clothing, except where uniforms and/or protective clothing are provided free of charge by the employer.

(b) The employer will reimburse employees who are constantly required to work under conditions which are wet and damaging to footwear, (e.g. on surfaces periodically hosed down or in wet or muddy conditions) an amount equal to the cost of appropriate protective footwear, except where appropriate protective footwear is provided free of charge by the employer.

(c) When an employee is required to wear and launder a uniform any cost of the uniform must be reimbursed and the employee must be paid $3.55 for laundry expenses per week.”

[17] It is readily apparent that Clause 42 is much more expansive than the Award provisions. Clause 42 does not include the specific restrictions found in the Awards. There is no reference in Clause 42 to reasonable care or items being ordinarily required in the course of duties or negligence of the employer. This industrial context suggests an expansive reading of the Clause.

[18] The term in this Agreement as in the Modern Awards to which I have referred is in the part of the Agreement which is about “allowances”. This context reinforces the requirement for connection to the employee’s work. Allowances are not generally associated with status as an employee or presence at work rather they are generally associated with particular conditions or types of work or the performance of particular duties or functions.

[19] Having considered the various submissions, I am satisfied that read in context the expression “loss of, or damage to, clothing or personal effects which occurs in the course of the employee's employment” is about situations where there is some connection to the particular employment of the employee. That is, some reason or explanation connected with the employee’s employment. That is, property of an everyday kind one would ordinarily expect to be brought to the workplace or property of a kind directly connected to the employee’s duties. Alternatively the connection may be between the damage and the employee’s duties. That is the property may not be of the type which might ordinarily be brought to work but the damage is directly linked to the nature of the employee’s duties. Some examples might be where an employee:

• Damages their clothing when replacing a toner cartridge in a printer.



• Tears their clothing on protruding furniture.



• Has a personal item damaged because something is dropped on the item by the employee or another employee during the course of their employment.



• Looses their glasses whilst on an inspection off site or whilst staying at a hotel when on Government business.



• Damages personal items which may be reasonably utilised in employment such as a calculator or computer or pen.



• Damages or loses personal items which would commonly be brought to work such as a watch which is worn, jewellery which is worn, lunch, regularly used medication, or a handbag. In such cases the connection to employment could be broken if the employee has not behaved in a manner consistent with employment requirements (e.g. high jinks or other negligent action).

[20] The connection to the employee’s employment is obviously weaker in cases where valuable personal property is not secured and where the property has no obvious relationship to work in that it is not required in employment and where the property is not something regularly or normally brought to work.

[21] What is regarded as reasonable behaviour depends upon the circumstances. It is reasonable that employees should not be required to take particular measures to secure everyday items such as glasses, mobile phone, handbag, and lunch. However, it is reasonable that employees should take measures to secure very valuable personal items not required in the course of employment or not commonly brought to work such as large amounts of cash or valuable jewellery.

[22] However, in my view the words “reasonable care” and or “items which are of a kind one would ordinarily be expected to bring to work” are not to be read into the clause. If by accident or omission an employee falls down and damages their clothing it would not be reasonable for the employer to refuse to reimburse for the damage because the employee failed to take reasonable care. The issue of reasonableness is about the degree of connection with the employee’s employment. That is, it is about a reasonable application of the words “which occurs in the course of the employee’s employment.” That said I do think it is reasonable to read the clause as excluding cases of wilful negligence or fraud.

[23] If the employee does bring such valuable personal items which have no relationship to their employment then the employer will not generally be liable particularly if reasonable care is not taken. That lack of reasonable care in this case simply reduces the connection to employment because it separates the event from what is reasonably associated with behaviour in the course of the employee’s employment. If the items were stolen from a locked cabinet or if the items were stolen during an attack or a robbery then it might be concluded that reasonable care had been taken and that the circumstances of the loss created sufficient connection to employment.

[24] Where an employee has personal effects, such as glasses, pen or a handbag, stolen at work then a claim for reimbursement may be reasonable depending upon the circumstances.

[25] In my view the terms “reasonable costs” and “in the course of employment” read in context have an interrelationship. That is “reasonable costs” is about the reasonableness of the claim not just about whether the amount claimed bears a proper relationship to the extent of loss or damage. The reasonableness of the claim is about the relationship between the items lost or damaged and their relationship to the work required. Hence if it is an everyday item that is commonly brought to work then the relationship is much stronger than if it is a valuable personal item uncommonly brought to work. Hence if there is some direct link between work performance and the damage or loss (e.g. when changing a toner cartridge, or whilst on duties out of the office) then the relationship is much stronger.

[26] I am satisfied that the terms “reasonable costs” and “in the course of employment” read in context are a matter of degree not absolutes. The clause is designed to protect personal effects and it is not limited to personal effects directly required for work. However, the claim must be reasonable taking into account the relationship to employment. The more distant the relationship to employment the greater the onus on the employee to take responsibility for the security of the item.

[27] The provisions should not be read too narrowly. The expression “in the course of employment” does cover matters which are incidental to employment. However, there does have to be a reasonable connection. If there was no requirement for a connection then any damage or loss which happens to an employee would leave the employer liable. If this was the intention then the words “when at work” or similar would have been utilised by the parties and the link to the “employee’s employment” would have been absent. If this was the intention then if an employee brought a million dollars in cash to work and left it on the desk an employer would be liable and this could not have been the mutual intention of the parties.

[28] In the circumstances of this case I consider that the claim for costs is not reasonable and that the loss was not “in the course of employment” due to the combination of:

• The lack of relationship between the items and work requirements.



• The lack of relationship between the loss of the items and the performance of work.



• The high value of the items which were not required in her employment or normally brought to work and the lack of adequate action by the Applicant to secure the items.

[29] None of these factors in themselves excludes the claim from having application under the Clause. Several of these factors could be present and the claim could still be payable under the Clause. It is the combination of the factors and the particular circumstances of this case which puts the claim outside the scope of the clause and makes the actions of the ATO in refusing the claim reasonable.

[30] I am sure that on occasion the ATO will consider the particular circumstances of an employee and may act compassionately or generously beyond the minimum which is required of them. They should not be penalised for doing so. In this case I have to decide what the ATO is required to do and what it is fair and reasonable in the circumstances for the ATO to do given the terms of the Agreement.

[31] I have decided that the ATO’s refusal of the claim in respect of the loss of the jewellery is reasonable in all of the circumstances and the refusal is not inconsistent with the requirements of the Agreement.

[32] The ATO concede that bringing the medication and diabetes equipment to work was “in the course of the employee’s employment”. The ATO argue that the employee did not take reasonable care and that it was therefore reasonable to refuse to reimburse on that ground. For the reasons outlined earlier I do not regard the words “reasonable care” to be imported into the clause. The degree of care taken can affect the extent to which the loss is connected to the course of the employee’s employment and the reasonableness of the costs claimed. However, given the close connection between the medication and diabetes equipment and the employee’s employment I do not believe that the actions of the Applicant alter the fact that the loss was in the course of the employee’s employment. I consider that reimbursement of this loss is consistent with the requirements of Clause 42 and to be a fair and reasonable resolution to the dispute over the application and implementation of the Agreement. I determine as the resolution to this dispute that the ATO reimburse the Applicant for this loss.

[33] The parties are at liberty to apply for a supplementary decision in the event that they cannot agree upon the “reasonable costs” to be reimbursed.

COMMISSIONER

Appearances:

Mr J Fetter of Counsel and Mr J Lapidos of the ASU for the Applicant.

Mr S Mukerjea for the Respondent.

Hearing details:

2012

Melbourne

September 25

 1   Statement of Lily Dewhurst at paragraphs 4 to 23.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR529573>