Ms Patricia McCoombes v Sigma T/A Sigma/Herron

[2010] FWA 5066

[2010] FWA 5066

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Patricia McCoombes
v
Sigma T/A Sigma/Herron
(U2009/12061)

COMMISSIONER ASBURY BRISBANE, 12 JULY 2010

Termination of employment - arbitration.

Background

[1] This is an application to Fair Work Australia (FWA) by Patricia McCoombes under s. 394 of the Fair Work Act 2009 (the Act), for an unfair dismissal remedy. The respondent is Sigma Herron Pharmaceuticals Pty Ltd (Sigma). Ms McCoombes’ employment history is not in dispute. Ms McCoombes commenced employment at Herron Pharmaceuticals in 2002 as a temporary employee engaged by a labour hire company. With effect from 5 April 2004, Ms McCoombes was employed as a full time employee until her dismissal on 10 September 2009. At the time of her dismissal, Ms McCoombes was a level 6 Production Operator.

[2] As required by s. 396 of the Act, it is necessary to decide a number of initial matters before the merits of an application under Division 4 of Part 3-2 are considered. These matters are also not in dispute. The application was made on 14 September 2009, within the time required in s. 394(2). Ms McCoombes is a person protected from unfair dismissal as defined in s. 382 of the Act. Sigma is not a small business and the question of whether the dismissal was consistent with the Small Business Fair Dismissal Code is not relevant. The dismissal was not a case of redundancy.

[3] A conciliation conference was held on 1 October 2009 and did not result in the matter being resolved by agreement. A Directions Conference was held for the purpose of progressing the matter. It was determined that a hearing would be the most effective and efficient way to resolve the matters in dispute, and directions were issued. A hearing was conducted 1 and 2 March 2010. Ms McCoombes gave evidence on her own behalf. Evidence for Sigma was given by Ms Elizabeth Mould, Supervisor, and Mr William Ferguson, Production Manager.

[4] Sigma contends that Ms McCoombes failed to comply with a Work Instruction (WI 9.020/7), and unreasonably refused to do so, in contravention of a lawful and reasonable instruction. Sigma also contends that Ms McCoombes failure to comply with instructions was deliberate. Essentially this contention relates to an allegation that Ms McCoombes placed a symbol on particular labels used in Sigma’s packaging process, instead of her signature, and refused to change this practice when instructed to do so by a number of supervisors. Further, Sigma contends that in discussions which resulted in her dismissal, Ms McCoombes made it clear that she would not comply with instructions, and believed that she was acting appropriately.

[5] Ms McCoombes concedes that on some occasions she signed labels and on other occasions placed a symbol upon them. However, Ms McCoombes maintained that she did not fail to follow WI 9.020/7, and that the labels upon which she placed a symbol instead of her signature were not required to be signed under that Work Instruction.

Events leading to the dismissal

[6] The business of Sigma is the manufacture, production and sale of pharmacy products. It is not in dispute that Sigma is bound by strict guidelines, and must observe rules and regulations in relation to the manufacture and sale of pharmacy products, overseen by the Therapeutic Goods Administration (TGA). Audits and spot checks are conducted by TGA and Sigma has policies and procedures in place to regulate and control how employees carry out their various tasks. These are detailed in Work Instructions and company procedures, and employees, including Ms McCoombes are trained in all aspects of these.

[7] When a production line is set, the operators are given instructions to pack a particular product. There is a written procedure for each product which includes a code and batch reference for the product to be packed. The batch and supply are matched by the operator with the bulk supply in the store, and to ensure accuracy, labels are removed from the bulk supply and placed on what is known as a “bulk label form”.

[8] At the point Ms McCoombes’ refusal to sign the labels became an issue, there was a work instruction - WI 9.020/7 which dealt with the subject of “Running Tasks (Golden Line). Ms McCoombes was working on the Swiftpack Hopper filling it with bulk product for packing. At page 5, WI 9.020/7 deals with the tasks associated with filling the Swiftpack Hopper with product that is manufactured in-house. Step 1 requires checking of the box number to ensure that it is the next one in numerical order. Step 2 requires checking of a “To Be Packed Label” against a packaging batch document to ensure that it bears the correct batch number, product code and product name. Steps 3 and 4 deal with opening the box and pouring its contents into the Swiftpack Hopper.

[9] Step 5 requires that the “To Be Packed Label” is removed from the box and stuck to a form referred to as a “Bulk Label”form, checking that the number is the next one in numerical sequence. Step 6 states that a “Passed Label” is then stuck to the “Bulk Label Form” and instructs that the box number on the “Passed” and “To Be Packed Labels” must correspond and that the “Passed Label” is to be stuck on the “To Be Packed Label” below the product name, presumably before both labels are stuck to the “Bulk Label Form”. There is a note to the effect that this step does not apply when Gel products are being packed. It is common ground that on the days the issues leading to Ms McCoombes’ dismissal arose, Ms McCoombes was not packing Gel products. Step 7 states:

“7. Sign and date the “To Be Packed” label to validate that it is the correct bulk.

Note: In the case of packing Gel products and there are no ‘To Be Packed’ labels sign and date the ‘Passed’ Labels.”

[10] At page 6 of WI 9.020/7 there is a procedure for filling the Swiftpack Hopper where the product is manufactured externally which refers to Quarantine labels. This procedure is not relevant to the matters in dispute in this case.

[11] Mr Ferguson said in his evidence that it is important that the operator signs the labels as they are fixed to a form as this forms a basic check as to the content of a particular package. As part of these procedures, there is a Signature Register upon which the signatures of employees are recorded, so that when employees sign labels and other documents as required, the employee who signed can be identified. A copy of the Signature Register dated 7 March 2008, bearing Ms McCoombes’ signature, was Exhibit 2. Ms McCoombes’ signature is essentially her intials. The symbol in question is a circle with a line through its centre drawn by hand with the following appearance: “ø”.

[12] The issues which lead to Ms McCoombes’ dismissal came to a head on 7 September 2009. On that date, Ms McCoombes was approached by a Shift Supervisor, Mr Phillips, who asked to see Ms McCoombes in his office. Ms McCoombes was loading bottles on to a turntable. According to Ms McCoombes, Mr Phillips said that she was to see him when she had a change. Ms McCoombes went for a break and on her return continued to fill the turntable with bottles. Shortly after returning from her break, Mr Phillips again approached Ms McCoombes and asked her to come into the office. Ms McCoombes went to the office with Mr Phillips. There was a discussion about a “Bulk Label Form” and Ms McCoombes signature, which she had changed. Ms McCoombes said that she had updated the signature record form.

[13] Ms McCoombes said that during that discussion, Mr Phillips referred to a Bulk Label Form upon which a symbol had been placed, and asked Ms McCoombes whether this was her signature. Ms McCoombes replied: “No, did I say that it was?” Ms McCoombes also said that Mr Phillips asked her why she had not signed and dated labels and why the labels did not marry up. Ms McCoombes responded by saying: “They don’t have to be by the work instructions.” Ms McCoombes also said that Ms Mould who was in the office got involved in the conversation and started referring to a batch of fish oil on 10 August 2009, which according to Ms McCoombes had nothing to do with the batch that Mr Phillips had just asked her about. Ms McCoombes told Mr Phillips that she was going back to work and returned to the Golden Line. Ms McCoombes said that she left the office because she felt confused when Ms Mould raised the issue of the batch of fish oil. Ms McCoombes denied the allegation that she ignored Ms Mould when she asked her to return. Ms McCoombes also said that she believed that Ms Mould and Mr Phillips were trying to “set her up”.

[14] Under cross examination, Ms McCoombes said that during the discussion on 7 September 2009, Mr Phillips was referring to two forms – a Bulk Label Form and a Bulk Box form from a batch of product on 4 September 2009. Annexed to Ms McCoombes’ witness statement is a copy of Bulk Label Form dated 4 September 2009. At the top of the Bulk Label Form Ms McCoombes’s signature appears alongside the date, and the symbol used by her on some occasions. There are Bulk Box forms which appear to have been attached to the Bulk Label form. Those Bulk Box Forms have a box headed “RECEIPT OR BATCH NUMBER” which has been marked with the symbol used by Ms McCoombes on some occasions. Ms McCoombes did not dispute that she had marked the labels in question using a symbol rather than her registered signature.

[15] Ms McCoombes also said that Ms Mould brought up the issue of using a symbol on labels half way through the conversation, and said that Ms McCoombes had previously been given permission to use a symbol instead of a signature but that this was not the case any more. Ms McCoombes agreed that Ms Mould and Mr Phillips were asking her to do something, and she was saying that the work instruction did not require her to do this. Ms McCoombes also said that she had symbol signed labels on 4, 7 , 8 and 9 September and when she was asked to sign labels instead of placing a symbol on them, said that she did not have to sign the labels in question.

[16] Ms Mould said in her witness statement that she was in the office when Mr Phillips entered with Ms McCoombes and became involved in the discussion that ensued. That discussion was in relation to Ms McCoombes inappropriately marking “Passed Labels” on the “Bulk Label Form”. According to Ms Mould, Ms McCoombes said that she had adopted that procedure because Ms Mould said that she could do it that way. Ms Mould told Ms McCoombes that a concession allowing Ms McCoombes and a work colleague, Ms Clark, to place a symbol on a label rather than a signature, had been for one particular batch of fish gel. This concession had been made following a discussion between Ms Mould and Ms Clarke on or around 10 August 2009.

[17] Ms Mould said in her oral evidence that she had agreed to a symbol being placed on a label instead of a signature, because a particular batch of fish oil capsules, which was a new product, had been required to be placed in larger bottles, and the line was moving at a faster than usual pace. This had been subject to a requirement that after that particular batch was completed, the operators would have to revert to the previous practice of signing and dating each label. Ms Clarke had reverted back to the previous method of signing labels on all occasions since that time, while Ms McCoombes had reverted to her approved signature on some occasions, and had continued to use a symbol instead of her signature on other occasions. According to Ms Mould, Ms McCoombes was present while the discussion with Ms Clark took place.

[18] Ms Mould also said that the same label was called different names by operators. The terms “In Process Label”, “Process Label”, “Bulk Box Label” and “To Be Packed Label” refer to the same label. That label provides information about what is in a particular box, the code of the product, what number the box is and the weight of the box so that the number of tablets it contains can be ascertained. The contents of boxes are placed into hoppers so that tablets can be put into bottles. Operators are required to open the box, pull out the bag of bulk product, tip it into a hopper, remove the “in process label” and put it on to a bulk label form. There is also a “Passed Label” that goes with the “In Process Label”. The “Passed Label” matches up with the box number and does not need to be signed. The “In Process Label” is required to be signed. There are no “In Process Labels” for soft gel products which are clear gel capsules containing substances such as fish oil or cod liver oil. In the case of those products the “Passed Label” is required to be signed. There is also another type of label which remains on machines, and is also called an “In Process Label”.

[19] Under cross-examination, Ms Mould said that where her statement referred to Ms McCoombes not signing “Pass Labels”, this reference was a typographical error, and the statement should refer to “In Process Labels”. Ms Mould agreed that the work instruction did not require Ms McCoombes to sign “Pass Labels” unless she was working with soft gel products. Ms Mould maintained that the term “To Be Packed Label” used in WI No 9.020/7 refers to one of the two labels also known as “In Process” or “Bulk Box” Labels. Ms Mould said that these were the same labels with different terms used to describe them. Ms Mould also maintained that regardless of the term used to describe the labels, Ms McCoombes signed and dated them on some occasions and placed a symbol on them on other occasions. Ms Mould also maintained that the requirement that the labels be signed and dated had been made clear to Ms McCoombes.

[20] In response to the proposition that “Bulk Box Labels” are not required to be signed according to the Work Instruction, Ms Mould maintained that page 5 step 7 of the work instruction required that the “To be packed” label be signed and dated, and that these labels are the same as “Bulk Box labels”. While conceding that the reference to “Bulk Box Labels” on page 7 step 3 of the work instruction does not include a requirement that those labels are signed, this requirement was found at page 5 step 7 in reference to the same label, albeit under a different name.

[21] On 7 September 2009 at 4.54 pm an email was forwarded from Birnie Mathers to Mr Ferguson, Mr Phillips and Ms Mould, raising issues with respect to Ms McCoombes including that “In Process Labels” had not been signed and dated. That email was Annexure 21 to Ms McCoombes’ witness statement. According to Ms McCoombes evidence, Mr Phillips again approached her on 8 September 2009, and said that she needed to fill out “Pass Labels” as per the Work Instruction. Ms McCoombes said that she told Mr Phillips that she was following the Work Instruction, and that it did not require that individual “Pass Labels” were signed and dated. Ms McCoombes said that Mr Phillips started to read the Work Instructions aloud to her, but the page he was reading from referred to “Quarantine Labels”. When Ms McCoombes told Mr Phillips this, he put the work instructions away and went back into his office. Ms McCoombes said that at the point this discussion occurred, she had been using the symbol instead of her signature, on and off for months.

[22] On 9 September 2009 at 12.30 pm, Mr Phillips emailed a number of managers of Sigma including Mr Ferguson and Ms Mould, attaching “Bulk Label Forms” said to have been completed by Ms McCoombes, and a copy of the Signature Register bearing Ms McCoombes’ signature. The email and its attachments indicate that:

• On 4 September 2009 Ms McCoombes placed her symbol on six labels attached to the “Bulk Label Form”, and at the top of that form placed her symbol, her signature and the date;



• On 6 September 2009 Ms McCoombes signed and dated each of the thirty-three labels attached to the “Bulk Label Forms”;



• On 8 September 2009 Ms McCoombes signed and dated two labels on the “Bulk Label Form”, and placed her symbol on eight labels attached to the same form.

[23] On Wednesday 9 September 2009, Ms Mould approached Ms Mc Coombes and told her that Mr Ferguson wanted to see her the next day before she went on her break. Ms McCoombes said in her evidence that Ms Mould told her later on that day that she would need a witness for the meeting. Ms McCoombes agreed under cross-examination that she chose not to take a witness to the meeting.

[24] Ms McCoombes attended a meeting with Mr Ferguson on 10 September 2009. The meeting record was Appendix “WF1” to Mr Ferguson’s witness statement 1 and was also appended to Ms McCoombes statement. The record indicates that at the outset, Ms McCoombes was told that the incident to be discussed at the meeting was considered by Sigma to be serious misconduct, in breach of Sigma’s Code of Conduct, and may result in disciplinary action up to and including the termination of Ms McCoombes’ employment. Mr Ferguson put allegations to Ms McCoombes in relation to failure to follow WI 9.020/7. The record of interview indicates that Mr Ferguson put allegations in relation to Ms McCoombes’ conduct on 7 and 8 September to Ms McCoombes as follows:

• On Monday 7 September 2009 it was noted that Ms McCoombes had not signed individual Pass Labels in accordance with WI 9.020/7;



• Ms McCoombes failed to follow Mr Phillips instruction to come to his office to discuss this matter, and came to Mr Phillips’ office after a second instruction to do so;



• When asked why labels had not been signed, Ms McCoombes said that Ms Mould said she could do it this way;



• Upon being told that this was not the case Ms McCoombes walked out the door and said she was going back to work, and refused an instruction to return to complete the discussion, and waved her hand in a “go away gesture” to Mr Phillips;



• On Tuesday 8 September 2009, it was again noted that Ms McCoombes was not following instructions in relation to the Bulk Label Form;



• There was a further discussion between Mr Phillips and Ms McCoombes during which Ms McCoombes maintained that Ms Mould had said she could place a symbol on labels and that she was being treated differently to other employees;



• Ms McCoombes maintained that the work instruction did not require labels to be signed, and Mr Phillips read from a section of the work instruction stating that each label had to be signed and dated;



• Ms McCoombes did not listen to this advice, and later walked away again when Mr Phillips tried to raise the issue of signing labels, during a discussion about a torque testing machine;



• It was put to Ms McCoombes that she had breached work instructions and good manufacturing practice.

[25] The Record of the meeting then indicates that Ms McCoombes was asked a series of questions and records her answers. In response to the question as to why she had not fixed paperwork after being instructed to do so, it is recorded that Ms McCoombes responded to this question by stating that: “…they were already signed, not individually but they were already signed”. Ms McCoombes is also recorded as saying that Ms Mould had given permission not to sign the labels and questioning why the matter had not been raised until that date. Further Ms McCoombes claimed to have been signing each label since the matter had been raised with her, and that the labels Mr Phillips looked at were earlier. It is also recorded that Ms McCoombes was asked why she had ignored her supervisor and walked out the door, to which Ms McCoombes responded that it was a lot of “baloney” and Ms Mould had never talked about work instructions until that day. In response to why she had not returned to the office to speak to Mr Phillips, Ms McCoombes is recorded as saying:

“Because of the way he spoke to me. I’m not going to take that from him. The way he was saying it, like a real smart arse. If you are going to do that to me you’ll get it back.”

[26] When asked why she had continued to sign the “In Process Labels” incorrectly after her supervisor asked her not to, Ms McCoombes is recorded as saying that that in the last batch there are labels that are signed correctly. In response to the question as to why she had signed labels correctly on the weekend, Ms McCoombes is recorded as saying that the line was running so there was time to do it properly. Ms McCoombes is also recorded as saying that the labels were being signed and that a symbol was being put on them and that this had been done for two months. Ms McCoombes said that the discussion record contained inconsistent and misleading information, but did not dispute that the discussions set out in the record did occur.

[27] Mr Ferguson said in his evidence to the Tribunal that there is a typographical error in the discussion record in that there is a reference to discussions with Ms McCoombes on 13 and 20 August, and the particulars set out as having occurred on those dates respectively, match the discussions with Ms Mould on 7 September and Mr Ferguson on 10 September 2009. While Mr Ferguson said in his evidence to the Tribunal that the issue he discussed with Ms McCoombes was her refusal to sign her name on “To Be Packed” labels, the record of interview indicates that Mr Ferguson in fact referred to “Pass” labels as having not been signed and dated.

[28] Ms McCoombes said in her evidence in chief that the reason given for her dismissal was that she had not signed “Pass” labels, in accordance with WI 9.020/7. Ms McCoombes maintained that WI 9.020/7 does not require “Pass” labels to be signed and that she had been working with “Pass” labels and “Bulk Box” labels, neither of which are required to be signed and dated, or initialled and dated under the work instruction. Ms McCoombes also maintained that she was not using “In Process” labels, as these are labels that are affixed to the end of a machine. Further Ms Coombes maintained that she was not using “To Be Packed” labels. Ms McCoombes said that she did “symbol sign” some labels, but these labels were not required to be signed at all, and the fact that she had placed a symbol on them did not constitute misconduct. Ms McCoombes denied making a signal with her hand when she walked away from Mr Phillips.

[29] Under cross-examination Ms McCoombes agreed that Sigma maintains a signature record, and that when she changed her signature, that record was updated. Ms McCoombes was shown labels which she had signed and dated. 2 Ms McCoombes was also shown Bulk Box labels marked with a symbol, and agreed that this was the same symbol she had placed on such labels.3 Mr Pratt (counsel for Sigma) then indicated to Ms McCoombes that he had drawn the symbol on those labels, and put the proposition that the use of a symbol did not provide a basis for establishing the identity of the operator who had checked a product. Ms McCoombes agreed that part of the accountability system by which Sigma was accountable to the public for what product was put into packaging, is the system of signing labels, but maintained that the work instruction did not require her to sign “Pass” or “Bulk Box” labels.

Further, Ms McCoombes agreed that WI No. 9.020/7 states at page 5 that “To Be Packed” labels are to be signed and dated to validate that the correct bulk product has been packed. Ms McCoombes also agreed at one point she had approval from Ms Mould to use a symbol instead of signing labels, but said that this was for fish oil 80s as opposed to fish oil 400s. This approval had been communicated to Ms McCoombes by her work colleague Ms Clark, rather than Ms Mould. Ms McCoombes maintained that her interpretation of WI No. 9.020/7 was that she could use a symbol instead of her signature.

Issues in Dispute

[30] The issue in dispute is whether Ms McCoombes has been unfairly dismissed. By virtue of s.385 of the Act, a person has been unfairly dismissed if FWA is satisfied that:

(a) The person has been dismissed;

(b) The dismissal was harsh, unjust or unreasonable;

(c) The dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) The dismissal was not a case of genuine redundancy.

[31] It is not in dispute that Ms McCoombes was dismissed by Sigma. As previously stated, Sigma is not a small business and Ms McCoombes dismissal was not a redundancy. The criteria that FWA must take into account in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, are set out in s. 387 in the following terms:

(a) Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees) and;

(b) Whether the person was notified of that reason; and

(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal; and

(e) If the dismissal related to unsatisfactory performance – whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) The degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) Any other matters FWA considers relevant.

[32] The term harsh, unjust or unreasonable has been extensively considered. In Stewart v University of Melbourne 4Ross VPof the Australian Industrial Relations Commission considered the decision of the High Court in Byrne v Australian Airlines5 and the joint judgement of McHugh and Gummow JJ in relation to the expression "harsh, unjust or unreasonable" finding the following observations, highly persuasive:

"It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.” 6

[33] These observations were distilled by Ross VP into the following considerations for the purpose of s. 170CG(3) of the then WorkplaceRelations Act 1996(Cth):

"a termination of employment may be:

• harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct;

• unjust, because the employee was not guilty of the misconduct on which the employer acted; and/or

• unreasonable, because it was decided on inferences which would not reasonably have been drawn from the material before the employer.".

Case law in relation to when failure to comply with an instruction will constitute a valid reason for dismissal

[34] The reason given by Sigma for Ms McCoombes’ dismissal was what was said to be a failure to comply with a work instruction, and an unreasonable refusal to do so, in contravention of a lawful and reasonable direction. The law in relation to when such conduct will constitute a valid reason for dismissal of an employee was collected in a decision of a Full Bench of the Australian Industrial Relations Commission in Woolworths Limited (t/as Safeway) v Cameron Brown 7. In that case reference was made Potter v Workcover Corporation where a Full Bench of the Australian Industrial Relations Commission said:

“Of course breaching an employer’s policy will not of itself automatically give rise to a valid reason for termination of employment. It depends on the character of the policy and the nature of the breach. The policy in question must be lawful and reasonable.” 8

[35] It is not in issue that the policy constituted by WI 9.020/7 was lawful and reasonable. The work covered by the policy involves packaging of pharmaceuticals and is understandably regulated by legislation which is aimed at ensuring the integrity of the packaging process. It is perfectly reasonable that Sigma would have a work instruction which is aimed at identifying which of its employees made checks necessary to establish the contents of a particular package. It is also reasonable that Sigma would have a policy involving employees signing labels to verify that they undertook the checks. As was apparent during the cross-examination of Ms McCoombes, the symbol used by her on occasions instead of her signature, could be drawn by any other employee and does not provide a means of identifying that it was Ms McCoombes who undertook a particular check.

[36] It is also necessary to consider whether in fact, Ms McCoombes breached the policy. Relevant to this consideration is the related question of whether Ms McCoombes reasonably and honestly contested the policy, so that her refusal to comply with it was not wilful. In Adami v Maison de Luxe Ltd 9 Isaacs ACJ distinguished between disobedience that is wilful and inconsistent with the continuation of the employment relationship, and disobedience in relation to an order that is not clearly implied or expressed as to be free from doubt. In the latter case:

“A refusal to comply with it, if the employee regarded as a reasonable [person] with knowledge of all the circumstances, may reasonably and does honestly contest it, is not, if respectfully communicated, a wilful disobedience of a lawful order, which by reason only of ‘wilfulness’ entitles the employer to penalize the employee. The employee is there, to the knowledge of [the] employer, only acting in defence of [his or her] supposed rights – that is [the employees] only intention and purpose. [The employee] is not wilfully insubordinate. Other grounds may justify a recission, as, for instance, the importance of the refusal apart from wilfulness or its effect on the general condition of the employer’s business…” 10

[37] In Woolworths Limited (t/as Safeway) v Cameron Brown, the Full Bench said that a failure on the part of an employee to comply with a directionfrom the employer, that the employee do or not do something, will not provide a reason for termination of employment where:

(a) the policy, or a direction to comply with the policy is illegal;

(b) the policy does not relate to the subject matter of the employment or matters affecting the work of the employee;

(c) the policy, or a direction to comply with the policy, is unreasonable. 11

[38] The Bench went on to note that even where a breach of a policy (or failure to follow a direction to comply with a policy) provides a valid reason for termination of employment, the termination may nevertheless be harsh, unjust or unreasonable where:

• the employee is ignorant of the policy;



• termination of employment is a disproportionate response to the breach, having regard to the employee’s length of service and prior history;



• there has been prior non-enforcement or inconsistent application;



• the policy is being applied in a discriminatory fashion, or used a pretence to disguise a real reason for the termination that is impermissible. 12

Was there a valid reason for the dismissal related to Ms McCoombes’ capacity or conduct?

[39] The reason given for Ms McCoombes’ dismissal was that she refused to comply with a work instruction in relation to signing labels. This refusal was said to be deliberate and in contravention of a reasonable and lawful direction. There is no doubt that a direction in relation to signing the labels is one that is both reasonable and lawful. Sigma packages pharmaceutical products and the packing of those products is heavily regulated. The labels in question are affixed to boxes containing bulk supplies of pharmaceutical products. I accept that it is both reasonable and lawful for Sigma to have in place a work instruction which requires labels from such boxes to be signed in order to ensure the accuracy of the packing process. Further, it is reasonable that Sigma requires a signature rather than a symbol to be placed on labels. A symbol is not as unique as a signature and different employees could use the same symbol making it difficult for Sigma to identify which employee was responsible for checking a particular batch of product. For this reason, Sigma maintains a Register of the signatures of each employee.

[40] Ms McCoombes’ signature as set out on the Register is essentially her initials. That signature was accepted by Sigma as appropriate for the purpose of identifying Ms McCoombes. I do not accept that it would have taken more time, or been more onerous on Ms McCoombes to have placed her signature on labels instead of the symbol she insisted on continuing to use.

[41] It is clear from the evidence that on 7 September 2009, Mr Phillips attempted to have a discussion with Ms McCoombes about signing labels. Ms McCoombes did not report to Mr Phillips’ office at the first opportunity, as requested, and Mr Phillips was required to make a second request to Ms McCoombes to attend a meeting with him. The discussion with Ms McCoombes on 7 September 2009 was about marking a “Bulk Label Form” with a symbol rather than her signature. I am satisfied that as a result of this discussion, Ms McCoombes was told that she was required to sign and date individual “Bulk Label Forms”, and that a previous concession made in relation to putting a symbol on those forms was for a particular batch of product and no longer applied.

[42] I am also satisfied that instead of accepting this instruction, Ms McCoombes argued with Mr Phillips and Ms Mould and maintained that WI 9.020/7 did not require that “Bulk Label Forms” be signed. Further, I am satisfied that Ms McCoombes left the meeting before it was terminated by Mr Phillips. Whether Ms McCoombes heard an instruction that she return or not, her own evidence makes it clear that she took it upon herself to leave the meeting, before it concluded. Such conduct was not appropriate in a meeting with her supervisor.

[43] Thereafter, Ms McCoombes signed and dated “Bulk Box Labels” on some occasions, and on other occasions continued to place her symbol upon them instead of signing. Ms McCoombes continued to do this despite being told by Mr Phillips on 8 September 2009, to sign the labels rather than placing a symbol upon them. In the interview leading to the termination of her employment, Ms McCoombes continued to insist that the work instruction did not require the labels in question to be signed.

[44] The direction to Ms McCoombes to sign and date “Bulk Box Labels” was in my view reasonable and lawful. A wilful failure on the part of Ms McCoombes to comply with this direction, would constitute a valid reason for the termination of her employment. The case conducted by Ms McCoombes raises the question of whether her conduct did in fact constitute a refusal to follow the work instruction, and if it did, whether the refusal was reasonable and honest. Ms McCoombes maintains that the work instruction she was said to have breached, did not require her to sign the labels she was working with. According to Ms McCoombes, the labels she was working with were “Passed” and “Bulk Box Labels” and these are not required to be signed, under the work instruction.

[45] WI 9.020/7 is badly drafted and leaves much to be desired in terms of clarity. Parts of the work instruction are virtually incomprehensible. For example, the instruction in step 6 on page 5 appears to indicate that “Passed Labels” are stuck to the Bulk Form and then goes on to instruct the operator to stick the Passed Label to the “To Be Packed Label” below the product name. The work instruction does not refer to Bulk Box Labels and in fact states that the labels required to be signed and dated are “To Be Packed Labels”. It is also apparent that the work instruction does not reflect the terminology used by employees to describe labels.

This is reflected in the seeming inability of Sigma managers to accurately refer to or describe the labels in question. In the Record of Interview with Ms McCoombes on 10 September 2009, Mr Ferguson referred to the offending labels as “Pass” Labels. In his written statement of evidence prepared for these proceedings, Mr Ferguson referred to them as “To Be Packed Labels”. Ms Mould in her written statement said that the labels Ms McCoombes refused to sign were “Pass” Labels on the Bulk Label Form. Under cross-examination, Ms Mould said that the labels were “In Process” Labels and that there were two types of labels that were referred to in this way. Ms Mould finally said that the terms “Bulk Box Labels”; “To Be Packed Labels” and “In Process Labels” referred to the same label.

[46] Despite this lack of clarity, it is clear that there are labels which identify the contents of boxes of bulk product. These labels are required to be signed and dated, and there is a box for the signature and date to be inserted. This is consistent with what appear to be the objectives of the work instruction – to ensure that bulk supplies of product are checked, and that the check can be verified by the fact that the person who carried it out, has signed the label to a box of bulk product and then put that label on a form with other labels from bulk supplies of the same product.

[47] While the work instruction is badly drafted, I am of the view that this was not an issue in relation to the dismissal of Ms McCoombes, because of the clear instructions given to her to sign the labels she was working with and which she was placing a symbol upon. While Mr Phillips did not give evidence in this case, it was clear from the evidence of Ms McCoombes and Ms Mould, that Mr Phillips had a discussion with Ms McCoombes on that date about Bulk Box Labels and the fact that Ms McCoombes was placing a symbol on the labels rather than signing them. Ms McCoombes said that when she entered Mr Phillips office, he referred to a Bulk Label Form. On her own evidence, Ms McCoombes was in no doubt that the issue being raised with her on 7 September 2009, by Mr Phillips and Ms Mould, was that she was placing a symbol on Bulk Box Labels, and Mr Phillips was directing her to sign them. It is clear from Ms McCoombes evidence that she clearly understood that she was being directed to stop using a symbol and to sign labels, and that Ms McCoombes refused to comply with this direction.

[48] The simple facts of the matter are that the only labels Ms McCoombes was working with were Bulk Box Labels. Ms McCoombes had adopted a practice of signing the top of each Bulk Label Form and then placing a symbol on Bulk Box Labels which were stuck to that form. That practice had been approved on a limited basis, and approval had been withdrawn. If Ms McCoombes honestly believed that she did not have to sign the labels she was working with at all, then she could have had no reason to place a symbol upon them and would simply have left the labels blank.

[49] After considering all of the evidence, I am of the view that Ms McCoombes was angry at what she viewed as an unreasonable change to a previously allowed practice whereby she was permitted to place a symbol on labels instead of signing them. Ms McCoombes’ anger about this matter may have been exacerbated by other issues in the workplace, not the least of which appeared to be a dislike for Ms Mould harboured by Ms McCoombes. Ms McCoombes relied on the work instruction to justify her refusal to sign the labels. That reliance was not reasonable in the face of a clear direction to Ms McCoombes to sign the labels. I am also of the view that Ms McCoombes’ reliance on the work instruction was not because Ms McCoombes honestly contested the policy, but to justify her unreasonable behaviour with respect to the direction to sign labels. Ms McCoombes did not comply with the direction given to her by Mr Phillips on 7 September 2008, and repeated on 8 September 2008. This refusal constituted a valid reason for Ms McCoombes’ dismissal.

Was Ms McCoombes notified of the reason for the dismissal?

[50] Ms McCoombes was notified of the reason for her dismissal at the meeting of 10 September 2009. Ms McCoombes was told that the issue to discussed related to her refusal to sign labels. The record of interview makes it clear that Ms McCoombes was told that what was to be discussed at the meeting was considered to be serious misconduct, and that the outcome could be the termination of her employment. Notwithstanding this, Ms McCoombes maintained her refusal to sign the labels.

Was Ms McCoombes given a reasonable opportunity to respond to any reason for the dismissal related to her capacity or conduct?

[51] There is a real issue in this case as to whether the deficiencies in the work instruction lead to a situation where Ms McCoombes was not given a reasonable opportunity to respond to the reason for her dismissal. Technically Ms McCoombes had a point – the work instruction it was alleged she had breached, did not specifically refer to Bulk Box Labels or to a requirement to sign them.

[52] There is no acknowledgement in the Record of interview that Ms McCoombes was asserting, quite correctly, that the work instruction did not refer to or specifically require her to sign “Bulk Box Labels”. In my view, for Ms McCoombes to be provided with a reasonable opportunity to respond to the reason for her dismissal, would have required at least an acknowledgment that what she was asserting about the work instruction was technically correct – it did not refer to Bulk Box Labels or direct that these be signed.

[53] However, on balance, I am satisfied that the reason for Ms McCoombes’ dismissal was clearly put to her as the refusal to sign labels. For the reasons set out above, I am also satisfied that Ms McCoombes well knew that what she was directed to do on 7 and 8 September was sign the Bulk Box Labels she was working with. This was the case notwithstanding that Mr Ferguson may have referred to the labels incorrectly during the discussion on 10 September 2009. This was clearly put to Ms McCoombes during the interview on 10 September 2009, and Ms McCooombes had a reasonable opportunity to respond. It is significant that Ms McCoombes did not state that she was not using “Bulk Box Labels”. Rather Ms McCoombes simply insisted that the work instruction did not require her to do what was being asked of her. In the circumstances where Ms McCoombes must have understood what she was being asked to do, her continued insistence about what the work instruction meant, was unreasonable.

Was there an unreasonable refusal for Ms McCoombes to be allowed to have a support person present to assist at any discussions relating to the dismissal?

[54] The evidence establishes that Ms McCoombes was offered a support person for the meeting on 10 September 2009, and refused to have a support person present. Ms McCoombes was offered a support person the day before the meeting and at the beginning of the meeting and refused those offers. Accordingly there was no refusal, unreasonable or otherwise, for Ms McCoombes to be allowed to have a support person present.

Was Ms McCoombes warned about unsatisfactory work performance before her dismissal?

[55] The evidence about the discussions between Ms McCoombes and Mr Phillips on 7 and 8 September 2009, does not disclose that Ms McCoombes was warned at that point, of the repercussions of her continued refusal to comply with the direction to sign the labels she was working with. However, at the meeting on 10 September 2009, Ms McCoombes was informed at the outset that the matters to be discussed at the meeting were considered to be serious misconduct, in breach of Sigma’s Code of Conduct. Ms McCoombes was also told that the outcome of the meeting may be that her employment would be terminated.

[56] Ms McCoombes was already on notice that her supervisors, Mr Phillips and Ms Mould had issues with the fact that she had been placing a symbol on Bulk Box Labels. This was the case notwithstanding some lack of accuracy on the part of both Mr Phillips with respect to describing the labels. Ms McCoombes must have known that she was placing a symbol on labels she was working with instead of her signature, and that her supervisors took issue with this. At the outset of the meeting on 10 September 2009, Ms McCoombes was told by the Production Manager Mr Ferguson that her conduct in refusing to sign labels she was working with, was considered by Sigma to be misconduct.

[57] Ms McCoombes did not accept the warning and chose in the face of it to continue to argue about the technicalities of the work instruction. Ms McCoombes unreasonable conduct in responding to the warnings does not alter the fact that they were given.

What impact did the size of Sigma’s enterprise have on the procedures followed in effecting the dismissal?

[58] Sigma is a large and significant enterprise and this had impact on the procedures followed in effecting the dismissal only to the extent that it is to be expected that an enterprise of this size would follow proper procedures in effecting a dismissal. While the processes followed by Sigma in effecting the dismissal left something to be desired, this did not cause the procedures to miscarry to the extent that the dismissal was unfair.

What impact did the absence of dedicated human resource management specialists or expertise have on the procedures effecting the dismissal?

[59] Sigma had dedicated human resource management specialists or expertise to properly effect the dismissal. As previously stated, the managers who effected the dismissal should have been clearer in their statements about exactly what Ms McCoombes was being warned for. The inaccuracies in relation to dates in the record of interview are also of concern, and should not have occurred, given the resources that were available to conduct an interview with Ms McCoombes and to record what was said in that interview. The evidence establishes that Mr Ferguson conducted the interview and Ms Helen Woods, the Complaints Manager, took notes. It is reasonable to expect that the notes would be accurate, and they were not. On balance, however, this lack of clarity, and the inaccuracies in the Record of Interview, did not cause the procedures effecting the dismissal to miscarry, to the extent that the dismissal was unfair.

Other relevant matters.

[60] Ms McCoombes made a number of allegations in the present proceedings and prior to her dismissal, about breaches of Sigma’s policies and procedures by managers and supervisors. In particular, Ms McCoombes made an allegation about the lack of availability of a torque tester, and about being compelled to falsify a deviation report. After considering the evidence on this matter, I am satisfied that there was no breach of Sigma’s policies and that Ms McCoombes was not required by Sigma to falsify a deviation report. In this regard I accept the explanation of these matters by the witnesses for Sigma. Essentially the explanation was that there was a deviation report which recorded a problem on the production line, and the steps taken to resolve that problem. The form accurately recorded the problem and when it occurred, but was completed several days after the events that were recorded in the form. Ms McCoombes was asked to sign the form after it had been completed, and to include the date upon which she had signed the form. Ms McCoombes believed that the date on the form should have been the date the problem occurred, rather than the date the form was signed, and alleged fraud on the part of Sigma. There was no basis for Ms McCoombes’ allegations in relation to this matter.

[61] The Record of Interview with Ms McCoombes on 10 September indicates that Ms McCoombes had previously been counselled and warned about her conduct in relation to a number of matters. Ms McCoombes sought to call into question the accuracy of these records and to dispute the substance and accuracy of the matters raised with her. It is not clear whether Sigma relied on those earlier discussions as grounds for Ms McCoombes’ dismissal. In the section of the Record of Interview headed “Discussion Outcome” a box is checked to indicate that termination of employment is the outcome, on the basis that the behaviour is serious enough to warrant summary termination OR performance or behaviour has not improved following previous warning process. It is not clear which of these options was the intended outcome.

[62] In any event, I accept that Ms McCoombes disputed some of those warnings and file notes. However, I am also satisfied that Ms McCoombes had previously been warned about her attitude and conduct with respect to following instructions issued by her supervisors, and her interactions with other work colleagues. These warnings and file notes deal with similar conduct to that admitted to by Ms McCoombes in the present proceedings, including leaving a meeting with her supervisor before the meeting concluded, and arguing technical points about procedures and policies instead of accepting reasonable directions.Sigma did not rely on the matters discussed with Ms McCoombes on 7, 8 and 10 September 2009, to justify summary dismissal. Ms McCoombes was paid five weeks wages in lieu of notice upon her dismissal.

[63] Ms McCoombes placed a letter before the Tribunal dated 3 June 2009, informing her that Sigma planned to commence a staged closure of the site where she was working, over the next two years. That letter indicated that the first reduction in staff numbers would not occur until early 2010, and that interested staff would have an opportunity to apply for suitable vacant roles within Sigma. On the basis of that letter, Ms McCoombes sought a remedy for her alleged unfair dismissal in the form of a redundancy payment.

[64] The impending redundancies would be relevant if it was found that Ms McCoombes was unfairly dismissed, and an assessment was made that the dismissal was unfair, on the basis that Ms McCoombes was not guilty of misconduct, or the decision to dismiss Ms McCoombes was based on inferences which could not reasonably have been drawn from the material available to the employer. If either of these conclusions was reached, it may follow that an assessment could be made that Ms McCoombes would have remained in employment up until the time the site was closed. Even if those findings were made, FWA could not in my view order any compensation payable for the unfair dismissal, to be paid in the form of a redundancy payment.

[65] In any event, the impending redundancies are not relevant in this case, because I am not satisfied that Ms McCoombes was unfairly dismissed.

[66] Ms McCoombes was not in my view, ignorant of the policy. Her refusal to sign the labels and the intransigence displayed in the face of reasonable requests to do so, was such that termination of employment was disproportionate. While Ms McCoombes had been employed for over 5 years, she had a history of similar conduct. There is no evidence of prior inconsistent application of the policy. It was not applied in a discriminatory fashion or used to disguise some ulterior motive for the dismissal.

Conclusions

[67] In all of the circumstances I am not satisfied that the dismissal of Ms McCoombes was unfair, because it was harsh, unjust and unreasonable. The application is dismissed and I Order accordingly.

COMMISSIONER

Appearances:

McCoombes, P on her own behalf

Pratt, D of Counsel on behalf of Respondent

Hearing details:

2010.

Brisbane:

March 1.

 1   Exhibit 1

 2   Exhibit 3

 3   Exhibit 4

 4   (U No 30073 of 1999 Print S2535).

 5 (1995) 185 CLR 410

 6   Ibid at 465-468

 7   (C2005/3430) PR963023 per Lawler VP, Lloyd SDP and Bacon C.

 8 (2004) 133 IR 458 at [67]

 9 (1924) 35 CLR 143

 10 (1924) 35 CLR 143 at 151-153

 11   C2005/3430 PR963023 at [34].

 12 ibid at [36].

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