Nuttall v Vox Retail Group Ltd

[1997] IRCA 282

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether employer established valid reason - no point of principle

ANDREW NUTTALL v VOX RETAIL GROUP LIMITED
AI 1126R of 1996

MOORE J
SYDNEY    (HEARD IN CANBERRA)
28 OCTOBER 1997

IN THE INDUSTRIAL RELATIONS

COURT OF AUSTRALIA

ACT DISTRICT REGISTRY

AI 1126R of  1997

BETWEEN:	ANDREW NUTTALL APPLICANT
AND:	VOX RETAIL GROUP LIMITED RESPONDENT
JUDGE:	MOORE J
DATE OF ORDER:	28 OCTOBER 1997
WHERE MADE:	SYDNEY (HEARD IN CANBERRA)

THE COURT ORDERS THAT:

1. The application for review is dismissed.

NOTE:SETTLEMENT AND ENTRY OF ORDERS IS DEALT WITH IN ORDER 36 OF THE FEDERAL COURT RULES.

IN THE INDUSTRIAL RELATIONS

COURT OF AUSTRALIA

ACT DISTRICT REGISTRY

 AI 1126R of 1997

BETWEEN:	ANDREW NUTTALL APPLICANT
AND:	VOX RETAIL GROUP LIMITED RESPONDENT

JUDGE:	MOORE J
DATE:	28 OCTOBER 1997
PLACE:	SYDNEY (HEARD IN CANBERRA)

REASONS FOR JUDGMENT

This is a review of a decision of a Judicial Registrar of 28 February 1997 determining an application under s 170EA of the Workplace Relations Act 1996 (“the Act”) by Mr Andrew Nuttall. Nuttall alleged that his employment with Vox Retail Group Limited (“Vox”) was terminated on 19 September 1996 in contravention of provisions of the Act. The review proceeded by way of written submissions with the transcript of the oral evidence led before the Judicial Registrar and documents tendered being the evidence in the review.

Nuttall had been employed as Assistant Manager (Store Development Officer) at Chandlers Tuggeranong, a retail electrical goods store operated by the Vox at the Homeworld shopping centre. He had been employed by Vox since 2 August 1994 and had worked as an Assistant Manager for most of the period of his employment. Vox did not provide Nuttall with written notice of his termination. However the reason given on its “Notice of Employer’s Appearance” lodged with the Australian Industrial Relations Commission (“the Commission”) gave the following summary of reasons for the termination of Nuttall’s employment:

“Company store not secured. The employee had been counselled on 2 prior separate incidents in writing. On the third breach of company procedure the employee was terminated.”

The principal issue in the review was whether Vox had a valid reason for terminating Nuttall’s employment connected with Nuttall’s capacity of conduct or its operational requirements. This, in turn, depended on the resolution of a factual issue, namely did Nuttall adequately lock a roller door at the Tuggeranong store and double-check that it had been locked?

The Evidence

Much of what emerged in the evidence was not controversial. I will discuss the evidence in a narrative that reflects findings I have made. I will discuss in more detail areas of factual controversy.

The roller door functioned in the following way. Much of this description is based on photographs that were in evidence. The store opened onto an arcade within the shopping centre and the opening spanned the entire width of the store. To secure the store at night there were three roller doors made of open mesh which were pulled down from the ceiling to form what was essentially a continuous mesh screen barring entry into the store from the arcade. As each roller door descended it travelled, at either end, in a vertical track. One vertical track was secured to the wall at either end of the opening, providing the outer vertical track for the two outer roller doors. The inner vertical track for each outer roller door and the vertical track for the middle roller door were created by two removable posts which were placed in position when the roller doors were to be pulled down. The vertical posts were positioned a third of the way into the opening from either end and secured into the floor. The roller doors were secured when pulled fully down by a keyed lock. The lock was in the middle of the base of the door. When the key was turned in the lock, horizontal rods at the base of the roller door moved and slid into holes in the tracks on either side of the door. In order to secure the door, the rods had to be aligned with the holes in order to slide into them.

On the afternoon of Sunday 15 September 1996, Nuttall was responsible for locking the store at closing time. Later that evening, two security alarms were activated in the store and a security monitoring company sent a patrolman to the premises. The patrolman, Mr Sandstrom, found one of the store’s roller doors to be insecure.

Sandstrom checked the three roller doors by pulling them upwards to confirm that they were secure. Sandstrom found two doors to be secure and gave the following evidence about his inspection of the third door which was an outer door:

“The third one, one end of that, the end closest to the car park came up.

Right. What did you do then? -- I applied pressure again, and the other side of that roller door came up, so the whole thing just came up in my arms.

All right. Once they are released, do they then go up of their volition, or do you have to push them up? -- Well, by and large, you need to push them up.

All right. Okay, what did you do next? -- I pulled the door up at least to waist height, decided to go in and make a check of the premises, given that there was an alarm...”

The import of this evidence was that when the door was pulled upwards the bottom outer side of one of the outer roller doors came up as if the rod had not engaged or not fully engaged in the hole in the outer track. With further upward pressure the other rod disengaged. Sandstrom later returned and pushed the third roller door back to floor level to make it look secure as he had no key to relock it properly.  He contacted the security company and was told that a keyholder was going to secure the store, and that he should not wait but should leave the premises.  Mr Kevin Armstead, Regional Manager of Chandlers, gave evidence that Chandlers was not informed of the break-in on the evening of Sunday 15 December 1996.

The store’s Assistant Manager, Ms Gianquitto, found the third door difficult to open the following morning. She found the door was rolled to about two inches above floor level and was in the locked position, with the horizontal rods extended, indicating that it had been locked with a key. Gianquitto and Nuttall were unable to open the door so they removed a black rubber or plastic strip from its base and dislodged the horizontal bar until the door opened.

Gianquitto called a maintenance person to fix the door who organised a door company or locksmith to come, who altered the lock and “re-bent the bar back in”, but the door was still difficult to lock that evening.

“It was very hard to lock and we checked it a few times and it kept sliding straight out when we pulled it up and we had to give it a fair tug before it would come out, but it did eventually come out so we decided it was a little bit faulty and we locked it as best we could and tried to secure it and it seemed to be locked in the end.”

Nuttall worked as usual at the store on Monday 16 September 1997, and had a day off on Tuesday 17 September 1996. Shortly after arriving at work on Wednesday 18 September 1996, he was asked to attend a meeting with Armstead and Mr Geoff Symonds, a Loss Prevention Manager at Vox. He was offered the opportunity to have a witness present but said that, not anticipating the nature of the conversation and expecting the meeting to relate to an impending promotion, he declined. The question of whether the shop was adequately locked on the Sunday evening was discussed at this meeting and at a further meeting the following morning at which Nuttall’s employment was terminated.

Armstead gave evidence that his decision to terminate Nuttall’s employment was based on the inconsistencies between Nuttall’s claim that he had locked the store on the Sunday afternoon, and the evidence of the security guard and a cleaner (who witnessed the security guard test the door) that the store was not locked later that afternoon. Armstead said:

“My decision was made on the facts that there was overwhelming evidence that the store was not left in a secure state on the Sunday night. It was barely an hour had passed by after it had been locked when the door was opened.”

He said that as Nuttall was unable to provide an adequate explanation as to why the door could have been insecure after it had supposedly been locked, a decision was made to terminate his employment. Armstead agreed that Nuttall had suggested that Mr Noel Harrison may be able to support his description of the events, but said that he had not interviewed Harrison as “[i]n my conversation with Andrew, he made the comment that although Noel was there he wasn’t sure whether Noel saw it or not [and] Noel is a casual in the business, and I didn’t think it was necessary.”

Credit of Nuttall

Vox sought to impugn Nuttall’s credit by suggesting that he had not been frank or honest in response to questions about counselling for misdemeanours on previous occasions.

On 30 April 1996 Nuttall signed an “Employee Counselling Sheet” which indicated “locking up of shop” as the specific area requiring improvement and “more concentration on closing the store” as the action required to rectify the problem. The form also indicated that this issue had been addressed verbally “four times” in the past, however Nuttall gave evidence that this was incorrect, that he had never been verbally counselled for this issue, and that he believed the words “four times” had been added after he had signed the form. Nuttall gave evidence that “I never received any verbal warnings.”

A second counselling sheet, dated 30 May 96, contained the following information:

“1.       What are the specific areas requiring improvement? Store Lock Up Procedures.

2.What are the employee’s reason for why these areas have not been performed satisfactorily?

3.        Have the issues been addressed in the past? Yes þ    No o
           If yes, how were the issues addressed?
  Verbal            -4- [“4” crossed out]
  In writing        30/4/96
  (on performance counselling form)

4.        What performance improvements are required to rectify the problem?
           [Unclear] effort in checking all doors twice before leaving the store.

5.        It is expected that improvements will begin immediately.

6.        Consequences of repeat performance or behaviour.
           Instant dismissall [sic]

7.        Review date
           Ongoing”

This form was signed by Nuttall and the Store Manager, Mr Andrew Busch. Busch gave evidence that he filled out the form before speaking to Nuttall about the latter’s failure to lock the back door of the Belconnen Chandlers store on 25 May 1996, and that the “4” on the form had not been crossed out by him. Nuttall gave evidence that he had signed the form, even though he believed its contents to be incorrect: “I don’t believe that I had not locked the store on that occasion. As I said, after my first written warning I did check every time.” He told the court that he had signed the form because he believed he was obliged to do so.  He described the counselling on this occasion in the following way:

“This counselling happened on the Thursday and the time of the counselling where the event was meant to have taken place was on a Sunday, and on the Thursday when I arrived at work, my manager mentioned that when he came into work on the Sunday, he thought that the back door wasn’t locked correctly, and he pulled me aside and said, “Oh can you just sign this ‘cause you hadn’t locked the door.””

Vox submitted that, as Nuttall did not seek to recall any witnesses in the review, the Judicial Registrar’s findings of credit are to be accepted by the court: Reader v Wyndham Lodge Nursing Home Incorporated (1996) 65 IR 253, and that the Judicial Registrar had “by necessary implication or inference” rejected the evidence of Nuttall. The Judicial Registrar made no explicit findings as to the credit of witnesses, although she did say: “The applicant understated the number of incidences [of leaving the store in an insecure state] and tended to play down the significance of his actions on those occasions, and that has to be taken into account in assessing his credit as a witness.” It is reasonably clear that she did not accept Nuttall’s account of these earlier incidents. I see no basis for departing from that finding. However in relation to what Nuttall did on Sunday evening to secure the roller doors, the Judicial Registrar said:

“There is no doubt that he turned the key. There is no doubt that he checked the doors to some extent by what has been described as rattling them. That evidence of the applicant is supported by the evidence of Mr Harrison who heard the applicant rattling the doors.”

This conclusion appears to be based on an acceptance of the evidence of Harrison and the acceptance, or partial acceptance, of the evidence of Nuttall.

Nuttall gave evidence that the third door “was always the hardest of the three doors to lock, but if you persisted long enough and pushed it down and held it down with a bit of weight, it would lock in and click into place.” However he said he had not had difficultly locking that door on the afternoon of Sunday 15 September 1996.

Nuttall said that on that Sunday:

“At approximately 3 pm, I locked the three roller doors with Noel Harrison nearby and at approximately 4pm we closed up for the day and locked the front door... We turned off all the power. I checked the roller doors again and I emptied money from a till and placed it into an administration draw behind the front counter underneath the administration tray where the float was kept, and I armed the alarm, and Noel and I went through the front door, locked the front door, and waited for the alarm to sound and then left the premises and I went straight home.”

Nuttall agreed that it was store policy to double check each door to ensure that it was secured and gave evidence that he double-checked the roller doors by rattling them:

“I want to suggest to you that rattling a roller door is not an effective way of testing whether it is locked. The only effective way of testing whether such a door is locked is to see whether you can pull it up or not? -- Well, that’s correct. That’s what you do when you rattle the door. You’re not standing there just shaking the door, pushing it down. Obviously if you are testing a roller door of that kind, you’ll be lifting it up and it does rattle, it makes a sound as you’re trying to lift it up...

And you say that is what you did. Is that right? -- That’s correct.”

Harrison’s evidence was as follows:

“To the best of your knowledge, did [Nuttall] appear to do the normal procedure for locking the doors? -- Yes. I remember it pretty well... Andrew started from the right, did the right hand door first, I was watching him do it, you know, knelt down, locked the door, click, it’s locked, and we’ve progressed left doing the other two doors.

And what was the next procedure that happened after that? Did you continue work, I am sorry? -- Yes, we just went back to work. And then at about five to four — as the store closes at four o’clock — I went out and started pulling the refrigerators we leave outside while the store is open, and you know just get ready for the closure of the store at four o’clock, and as I was coming back in with the last of the refrigerators, I heard Andrew rattling the doors to presumably check that they were locked.

Is that the normal procedure to check that they are locked? -- At the end of the day, yes, that is what we do.”

While the Judicial Registrar doubted the veracity of Nuttall’s evidence in one respect, she appears to have accepted that he did what he described in his evidence as rattling them. That is, lifting up each door which causes it to rattle. It is open to a Court to accept some aspects of the testimony of a witness and reject the other aspects: see Erich v R (1980) 31 ALR 123. It has not been demonstrated to my satisfaction that the Judicial Registrar erred in accepting Nuttall’s evidence about rattling the doors in the way he described. I also accept it for the purposes of this review.

Conclusion - Section 170DE(1)

Vox, as the employer, bears the burden of establishing that there was a valid reason for its termination of Nuttall’s employment: see s 170EDA(1). I am not satisfied that there was a valid reason having regard to the conduct of Nuttall established the evidence.

In his written submissions in the review, counsel for Vox said:

“Given that there is no basis whatsoever for believing that any intruder forced open the roller door from a fully locked position and given that there is also no basis for believing that the guard did so either, then what other explanation exists for the guard’s ability to open the said roller door in the manner described by him (and totally supported by the cleaner) within an hour or so after the applicant supposedly double checked that the roller door was properly locked? The answer is: “absolutely none” and the consequence is that the applicant is not to be accepted when he asserts that he “double checked” the said roller door and confirmed that it was properly locked.”

However this argument pays insufficient regard to the possibility that Nuttall may have locked and double checked the door to a standard that might reasonably be required of an employee.  The starting point in considering the adequacy of what Nuttall had done was the evidence of Gianquitto that on Monday morning the door was in the locked position.  This is consistent with the evidence of Nuttall that he locked the door on the preceding evening.  This evidence suggests that Nuttall took the necessary steps to activate the horizontal bars by turning fully the key in the lock.  The critical question appears to be to be whether Nuttall took steps that might reasonably be expected of him to test whether the horizontal bars engaged in the holes in the track after turning the key in the lock.  It may be accepted that the evidence of Sandstrom indicated that the rods, or at least one of them, had not engaged or fully engaged in the hole in the track.  However it is to be remembered that that was apparent because he pulled in an upwards direction from the outside of the roller door.  It cannot be assumed, as the submission made on behalf of Vox assumed, that the action of pulling the roller door upwards from the inside of the store would, if the rod had not fully engaged, have the same effect as pulling upwards from the outside of the roller door.  It is quite possible that standing back some inches from a closed roller door and pulling upwards would result in a force that was not vertical.  That is, it would result in a force that was principally upwards but nonetheless also directed to the person exerting the force.  It may result in the actual direction of the pulling force being 10, 15 or even 20 degrees from the vertical.  However the difference between a force at that angle directed away from the entry to the shop compared to a force directed in the same but an opposite angle towards the inside of the shop would be material if the rod had partially but not fully engaged in the hole and the rod was not entirely straight, or the hole and its edge was not symmetrical or even.  In my opinion it can not be inferred from the fact that Sandstrom caused one end of the door to move up, that a person undertaking a similar exercise from the inside of the store would achieve the same result.

Moreover the point at which the door was lifted may be important.  If the lifting force was at the lock itself midway between either end of the door, then it may reveal that one end was not secure.  However if the upward pressure was exerted to one side of the lock, then it may not expose or reveal that the rod on the opposite side of the lock had not engaged or engaged fully.  That would be because the principal resistance to the upward pressure was from the end of the door on the side of the lock on which the pressure was exerted fully.  Thus if Nuttall had applied upward pressure to one side of the lock and Sandstrom had applied upward pressure on the opposite side of the lock then the result may have been quite different. 

In a sense the preceding matters involve speculation.  However the case of Vox is that Nuttall failed to do what he was required to do. Given Nuttall’s evidence as to what he did and the Judicial Registrar’s acceptance of it, it is incumbent upon Vox, in my opinion, to eliminate any reasonable hypothesis about why Sandstrom caused one end of the door to move up which is consistent with Nuttall doing what might reasonably be expected of him. In my opinion, Vox has failed to do this and failed to discharge the onus imposed by s 170EDA.  Accordingly I am satisfied that the Judicial Registrar correctly concluded that Vox had not established a valid reason for the termination of Nuttall’s employment.

Compensation

Nuttall was dismissed by Vox on 19 September 1996 and obtained employment on 10 October 1996. At the time of the trial before the Judicial Registrar, Nuttall’s weekly earnings were $500. The parties agreed that his average weekly earnings at the time of his dismissal were $729.93. The ongoing loss is therefore $229.93 per week. His loss to the date of hearing on 28 February 1997 was $7,188.39.  The Judicial Registrar ordered compensation in the sum of $7,000.  Both parties put in issue this assessment of the appropriate level of compensation.  Vox contending it was too high, Nuttall that it was too low.

Counsel for Nuttall submitted that the Judicial Registrar misconceived the effect of May v Lilyvale Hotel (1995) 68 IR 112. The starting point, it was submitted, was the loss actually suffered. That was the loss of $7,188.39 to the date of trial and an ongoing loss of $229.93 per week which, for 3 months would be a further $2,989.09, for 6 months would be $5,978.18 and for 9 months, $8,967.27. It was submitted that the onus is on Vox to demonstrate that Nuttall’s salary might have improved. Moreover, it was submitted, Nuttall should receive compensation because “the employer failed to make due inquiry of other employees”. If it had done so Nuttall probably would not have been dismissed. Nuttall also sought costs on the basis that the review is either vexatious, or brought without reasonable cause, or is unreasonable within the meaning of section 170EHA. It was submitted that Vox had no real chances of success in the review and “has merely involved the Applicant in unnecessary costs.”

Counsel for Vox submitted that if the court finds that Nuttall was unfairly dismissed, it should “disentitle him to any compensation as he has not been completely candid with the court.”  Furthermore, it was submitted that as Vox was diligent in investigating the incident before dismissing Nuttall it should be treated more leniently if the court finds that dismissal was an inappropriate decision.  Counsel for Vox also submitted Nuttall should be awarded little or no compensation because, first, he gave false evidence, second, he was only out of work for three weeks, third, he may not have held his job with Vox for much longer anyway and, fourth, if significant compensation was awarded it would send an inappropriate message to other staff that it was “unfair for [Vox] to insist on high standards [in relation to store security]”.  Vox resists any costs order.

It is from terms of s 170EE(3) that an important matter in considering the amount of compensation is the remuneration the employee would have received or would have been likely to have received if the employer had not terminated the employment.  No attempt was made in the review to lead further evidence about the ongoing loss of income after 28 February 1997.  However it is probable, in my opinion, that having secured employment at the rate of $500 a week, Nuttall would continue in that employment for a reasonable period.  It is thus probable that there would have been a continuing loss of approximately $229.93 per week for some period after 28 February 1997.  Against this has to be balanced the consideration raised by counsel for Vox that Nuttall’s employment with Vox may not have continued for a lengthy period.  It is comparatively clear from the evidence that, apart from the incident that immediately preceded his termination Nuttall had been less than diligent in his work which had lead to counselling.  It may thus be accepted that his employment with Vox was not entirely secure and may have been lawfully terminated at some point after September 1996.  It appears to me that these are the two material considerations in determining the amount of compensation.  The other matters raised on behalf of Nuttall and Vox appear to me to be, at best, of limited relevance.  I consider the amount of compensation awarded by the Judicial Registrar strikes a reasonable and appropriate balance between the matters to which I have just referred.  Accordingly I do not propose to interfere with the order made by the Judicial Registrar.

As to the question of costs, I am not satisfied that the application for review was made vexatiously or without reasonable cause:  see s 347, or constituted an unreasonable act for the purposes of s 170EHA.  Rarely will an application for review be stigmatised as vexatious:  see Shackley v Australia Croatia Club Ltd (unreported, Industrial Relations Court of Australia, Moore J, 24 April 1997). Nor can it be said, in my opinion, that it was brought without reasonable cause. The evidence led before the Judicial Registrar, when considered with the findings she made, does not evidence a case that was unarguable in a review. For similar reasons the bringing of the application is not an unreasonable act for the purposes of s 170EHA. I make no order as to costs.

I certify that the preceding eleven  (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore

Associate:

Dated:            28 October 1997

Counsel for Nuttall:	Mr A.G. Rogers
Counsel for the Vox:	Mr M. Kimber
Solicitor for the Vox:	Clayton Utz
Date of Hearing:	24 April 1997
Written Submission completed:	27 June 1997
Date of Judgment:	28 October 1997