Peter North v Sydney Ferries Corporation
[2010] FWA 9182
•30 NOVEMBER 2010
[2010] FWA 9182 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Peter North
v
Sydney Ferries Corporation
(U2009/10111)
VICE PRESIDENT LAWLER | MELBOURNE, 30 NOVEMBER 2010 |
Termination of employment.
[1] This is an application for unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (FW Act) by Mr North.
[2] Mr North’s dismissal has its origins in an incident that occurred on 2 June 2008. On that day Mr North was the master in charge of a Sydney ferry, the Scarborough. The vessel was docked at Circular Quay. A crew member fell into the harbour while attempting to board the vessel. The duty manager, Mr Wood, came on to the wharf. The respondent’s case is that Mr Wood was waiting to be invited aboard by Mr North in order to deal with the incident. Mr North’s case is that he was waiting for Mr Wood to come aboard, that Mr Wood was using his mobile phone and made no effort to come aboard. Mr North checked that the crew member was not injured, arranged a partial change of clothes and confirmed with the crew member that he was right for the ferry to proceed on its short scheduled trip across the harbour. Mr North reversed the ferry to the wharf where passengers board, took on passengers and proceeded on the scheduled trip.
[3] Upon his return to Circular Quay, Mr North went to the office of Mr Wood where there was an altercation. It is uncontested that there were raised voices and that Mr North pushed Mr Wood in the chest. Mr North claims that this was a defensive response to Mr Wood raising a clenched fist.
[4] In light of the way the matter proceeded at hearing, the respondent made a decision not to call Mr Wood as a witness. Accordingly, there is no basis to make any finding of fact contrary to the version of Mr North in relation to matters where the only contradictory evidence was that to have been given by Mr Wood.
[5] On 5 June 2008 Mr North saw his doctor who advised that he should immediately take a two week break. A medical certificate signed by Mr North’s doctor was subsequently produced confirming this advice. At the hearing, the doctor’s notes were tendered without objection. Those notes suggest that the doctor undertook a careful examination of Mr North and concluded that there was a medical necessity for Mr North to have two weeks off work. The doctor was not required to cross-examination. I proceed on the basis that Mr North received a genuine medical advice that he needed to take two weeks off work.
[6] On 6 June 2008 Mr North had a conversation with Mr Keith McIntosh, the manager responsible for administering rosters and leave, albeit that requests for special leave (including reset requests for annual leave at short notice) needed to be approved by the Chief Operating Officer, Mr Mole.
[7] Mr North had more than sufficient accrued annual leave and accrued sick leave to take the two weeks recommended by his doctor as either type of leave. The applicable collective agreement contained provisions designed to reduce usage of sick leave. In particular, overtime worked by other employees to cover an employee on sick leave was paid at single time whereas overtime worked to cover an employee on annual leave was paid at overtime rates. An employee who took sick leave would, to use the jargon in currency in that workplace, “sting” his or her workmates. Mr North sought approval for two weeks of annual leave, notwithstanding that he had more than sufficient sick leave to cover that period, because he did not want to “sting” his workmates. Releasing an employee on annual leave involved greater expense for the respondent than approving an equivalent period of sick leave. It was accepted on behalf of the respondent that if Mr North had applied for two weeks of sick leave this would have been approved.
[8] The main factual contest in the case revolved around the conversation between Mr North and Mr McIntosh in relation to Mr North’s request for annual leave. Mr McIntosh insisted that he informed Mr North that one week of annual leave may be approved but that a second week of annual leave would certainly not be approved and he invited Mr North to submit a leave application form and suggested that he get a letter from his doctor. On Mr North’s version, he informed Mr McIntosh that he had checked with the relevant administrative officer and that relief masters were available to cover him for two weeks of annual leave and asked for that leave. Mr McIntosh replied that Mr North should “put a [leave] form in”. A leave application form signed by Mr North seeking two weeks of annual leave was subsequently found on the desk of Mr Dawes, the leave clerk. Mr Dawes was himself absent on leave for a period including 6 June 2008. Mr North claimed that he had handed the leave form to Mr McIntosh later in the day on 6 June 2008. Mr McIntosh denies that this occurred. The respondent asks me to infer that Mr North, knowing that Mr Dawes was absent, left the leave application form on Mr Dawes’ desk in the expectation that it would render the taking of the two weeks leave as annual leave a fait accompli.
[9] It may be noted that even on Mr North’s version, he had not been told by Mr McIntosh that the leave would be approved and he proceeded on a holiday to Tasmania for two weeks without having been notified of such approval or seeking confirmation that approval had been given.
[10] Mr Mole issued Mr North with a written final warning in relation to his unauthorised absence during the second of the two weeks (Mr Mole having approved annual leave for the first week).
[11] Mr North raised a dispute in relation to the issuing of that warning. That dispute was referred to the Australian Industrial Relations Commission (AIRC). During conciliation of the dispute on 12 December 2008 Mr North agreed with the respondent that an independent investigation would be conducted by Mr Trevor Ellis, a human resources employee new to the respondent.
[12] Mr Ellis’ report not only found that Mr North had knowingly taken unauthorised leave but also made findings of dishonesty against Mr North. Mr Ellis’ conclusion was as follows:
- lying about the authorisation that was given to him by his manager; and
- leaving a Leave Application Form on Mr Dawes’ desk and obtaining a certificate from Dr Brennan supporting two weeks’ absence, in apparent support of his story.
“Mr North’s Breach of Policies, eg failure to comply fully with the procedures applicable to annual or sick leave, would not of itself be sufficiently serious to warrant dismissal, in the absence of the history of similar breaches. A warning would be sufficient.
Allied to such a breach, however, is a deliberate failure to attend work for two weeks, without advance notice and without authorisation. His absence for one of those weeks was in clear defiance of his manager's wishes.
Allied to this is an intention on Mr North's part to explain his unauthorised absence, if challenged, by:
...
I have reached the view that the dishonest and devious behaviour of Mr North such as would warrant summary termination of his employment, consistent with the Discipline Procedure and general legal principle.”
[13] On 1 July 2009 Mr Mole gave a copy of the Ellis report to Mr North and terminated Mr North’s employment at the same time. The primary reason for the dismissal was Mr Ellis’ findings of dishonesty; Mr Mole taking the not unreasonable view that such dishonesty is incompatible with the level of trust and responsibility reposed in the master of a ferry.
[14] On 6 July 2009 Mr North filed the present application for an unfair dismissal remedy. Mr North alleges victimisation by the respondent and claims that he was dismissed because of his union activities and positions taken against management.
Was Mr North unfairly dismissed?
[15] Whether Mr North was unfairly dismissed within the meaning of s.385 of the FW Act turns on whether the dismissal was “harsh, unjust or unreasonable”. Section 387 of the FW Act specifies criteria that FWA must consider in determining whether a dismissal was harsh, unjust or unreasonable. I turn to consider the criteria in s.387.
(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)
[16] A “valid reason” for a dismissal is a reason that is “sound, sensible and well founded” 1.
[17] I am satisfied that Mr Mole acted on Mr Ellis’ report in good faith. However, when an employer relies upon misconduct as a reason for dismissal, it is necessary for that misconduct to be proved on the balance of probabilities. Mr Ellis was not called to give evidence (no doubt because the respondent recognised that Mr Ellis had no direct knowledge of the underlying events and it was for the respondent to prove those matters by evidence in this tribunal).
[18] I have some difficulty accepting the evidence of Mr McIntosh. Mr McIntosh had since left the employ of the respondent and would appear to have no motive to give false evidence. On the other hand, while the version of events given by Mr McIntosh in his statement is substantially different to the version given by Mr North, in cross-examination Mr McIntosh was taken through Mr North’s version, step-by-step, and admitted almost every element of Mr North’s version. Mr McIntosh claimed a clear recollection of every detail of the events of 6 June 2008 but in cross-examination had difficulty remembering more recent events.
[19] I am inclined to prefer Mr North’s version of the conversation with Mr McIntosh. However, I think it more likely than not that Mr North left his leave application form on the desk of Mr Dawes rather than handing it to Mr McIntosh as he claimed. It is improbable that Mr McIntosh would have left the application form on Mr Dawes desk given that Mr McIntosh certainly knew that Mr Dawes was himself absent at the time.
[20] Mr Ellis’ finding of deliberate dishonesty against Mr North appears to have been based on an unqualified acceptance of the whole of Mr McIntosh’s account of the relevant events and then reasoning that if Mr McIntosh’s account was the fact, then Mr North’s account, being fundamentally inconsistent with Mr McIntosh’s account, must be a lie. Such a process of reasoning, while sometimes justified, will often be invalid. Inconsistency of the sort relied upon by Mr Ellis will often be explained not by dishonesty but, rather, by unreliable memory and/or a subconscious (i.e. innocent) reconstruction of events. It is commonplace for people to have genuine but differing recollections of particular events. An allegation of dishonesty of the sort relied upon by Sydney Ferries is a serious matter that attracts the operation of the principle in Briginshaw v Briginshaw. 2 The standard of proof remains the balance of probabilities but “the nature of the issue necessarily affects the process by which reasonable satisfaction is attained”3 and such satisfaction “should not be produced by inexact proofs, indefinite testimony, or indirect inferences”4or “by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion”5. I do not have a satisfaction of the sort required by Briginshaw that Mr North left the application form on Mr Dawes’ desk and must remember doing so such that his account to Mr Ellis and his evidence before FWA on that topic was consciously dishonest.
[21] In short, I am not persuaded to the requisite standard that Mr North engaged in the dishonesty found by Mr Ellis and on which Mr Mole relied in deciding to dismiss Mr North.
[22] Of course, even on Mr North’s version of events there was, technically, misconduct in him departing for two weeks of leave in circumstances where he had not been informed that his leave application had not been approved. However, this misconduct must be seen as being at the lowest end of the scale given that Mr North had received genuine medical advice on 5 June 2008 that he should take such a period of leave and, on any view, he would have been granted two weeks of sick leave if he had applied for sick leave. Neither Mr Mole nor Mr Ellis regarded this misconduct as justifying dismissal. In my view it did not constitute a valid reason for the dismissal.
[23] In summary, I am not satisfied that there was a valid reason for Mr North’s dismissal.
(b) whether the person was notified of that reason
[24] Mr North was notified of the reason for his dismissal but only at the time he was dismissed.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[25] Mr North was not given an opportunity to respond to the reason for his dismissal (being a reason that related to conduct) after the decision to dismiss had been made but before the dismissal was effected. This constituted a denial of procedural fairness.
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
[26] Mr North had been allowed to have a support person (his counsel) present when the dispute was before the AIRC, however, for practical purposes, there were no discussions relating to the dismissal before it was effected.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[27] The dismissal did not relate to unsatisfactory performance as distinct from misconduct.
(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
[28] The respondent is a relatively large organisation and could be expected to follow proper procedures in effecting a dismissal. The respondent has dedicated human resource management specialists or expertise.
(h) any other matters that FWA considers relevant
[29] The respondent relied on a number of other matters that may be characterised as misconduct or poor performance but this was more in the context of whether reinstatement is appropriate and I deal with those matters below.
Conclusion on whether the applicant was unfairly dismissed
[30] Having found that there was no valid reason for Mr North’s dismissal and that there was a denial of procedural fairness, I am satisfied that the dismissal was harsh, unjust or unreasonable and, accordingly, that Mr North was unfairly dismissed.
Remedy
[31] The respondent ultimately conducted its case with a focus on remedy and, in particular, whether or not Mr North should be reinstated. This change of focus (including a decision not to call Mr Wood) was no doubt informed by provisional comments made by me during the course of the hearing in an effort to contain what could have proved to be unnecessary costs.
[32] Section 390 of the FW Act provides:
“390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.”
[33] The requirements in s.390(1)(a) and (b) and in s.390(2) have been met. It follows from s.390(3)(a) that I must move to consider whether reinstatement is “appropriate”. It is only if I consider that reinstatement is “inappropriate” that I must then turn to consider whether an order for payment of compensation is appropriate in all the circumstances of the case.
[34] After anxious consideration, I have finally come to the view that the reinstatement of Mr North is inappropriate.
[35] I accept that Mr North loved his job as Master with Sydney Ferries and is well liked by his crew and other non-management employees with whom he works. I also accept that the nature of the industry in which Mr North works is such that he will find it very difficult to secure work in the industry that is as well remunerated as the position of Master with Sydney Ferries and that, in this sense, his dismissal will result in an ongoing loss when compared with the income he would have earned if he had remained employed by the respondent into the indefinite future.
[36] That said, I was generally unimpressed with Mr North as a witness. A number of inconsistencies and other matters that emerged in the evidence reflect badly on him. There is substance in many of the submissions of Sydney Ferries in that regard. 6 One deserves particular comment.
[37] Mr Mole was recruited by the respondent in early 2006 as General Manger Operations. He was promoted to the position of Chief Operating Officer in early 2009. Mr Mole had a career in the Royal Australian Navy of more than 36 years. He was among the ten most senior officers in the Navy at the time of his retirement. He had commanded various ships and submarines and had been Commander of the Submarine Force. He has spent several years on the Submarine Safety Board and between 1997 and 1999 had been the Chairman of the Navy’s Ship Safety Board. I found Mr Mole to be an impressive witness who generally gave careful and considered evidence. Mr Mole holds a Master’s Class 1 certificate which qualified him to command a ship of any size. Mr North, in contrast, holds a Master Class 4 certificate which is a significantly lesser qualification albeit that Mr North was undoubtedly technically very competent as a ferry master. In this context it is important to note that one of the primary reasons why Mr Mole was engaged by the respondent was to improve the respondent’s safety record. I was generally very impressed with the evidence of Mr Mole, a matter on which I commented during the course of the hearing.
[38] An incident occurred on 10 April 2006 where Mr Mole observed a ferry approaching Circular Quay at a speed that Mr Mole adjudged to be well in excess of the speed limit of four knots imposed on ferries approaching that wharf. Mr Mole had sent a letter to all masters only a few weeks earlier informing them that they needed to slow down when approaching wharves. There was a sound reason for this restriction, namely reducing the risk of a collision in the event of an unexpected failure of control equipment while approaching a wharf. Mr Mole ascertained that Mr North was the master of the ferry and sought him out in the crib room in order to informally counsel him on the need to slow down. Mr Mole gave the following account:
“44. At the time I observed the ferry coming into the Quay I did not know who its Master was. Before I left the office area I asked a Staff Assignment Officer who was captaining the Scarborough and was told it was "Peter North".
45. I went down to the Crew Room and found the individual whom I understood to be Mr North. From where I was standing in the doorway, I could see that Mr North appeared to be making tea or coffee. I never went inside the Crew Room and I could not see anyone else in the room apart from Mr North. I said to him words to the effect of: “Excuse me, Peter. Do you have a minute?” I then signalled for him to join me outside the Crew Room.
46. Mr North and I then walked to a point just outside the doorway to the Crew Room, where I introduced myself and told him that I had just seen him berth his vessel in a manner that was “way too fast”. Mr North looked at me as I said these words, then simply turned on his heels and returned to the Crew Room, where he continued making his tea or coffee.
47. I followed him back to the doorway of the Crew Room and said to him words to the effect of: “Excuse me, Peter. I want to talk to you.” Mr North then put his hand up level with my face and said words to the effect of:
Until you’re qualified to drive these boats, don’t talk to me, talk to the union.
In response to this, I said:
You can be sure that I will be taking this up with the union.
48. In relation to paragraph 101 of the North Affidavit, I deny that I said words to the effect of “Speak to the union, you’re in trouble don’t you worry about that and I will remember you North”.”
[39] Mr North gave a very different account of that encounter. I prefer Mr Mole’s account and find that it occurred as he said.
[40] On 13 April 2006, Mr North wrote to the CEO complaining that Mr Mole had humiliated him in front of his colleagues, intimidated, threatened and bullied him and failed to respect his right to union consultation and privacy. That same day Mr Mole called a meeting with Mr North who was accompanied by the union delegate. Mr Mole’s account of that meeting is as follows:
“I said:
Last Monday I observed you coming in too fast when you were approaching Circular Quay. I went to the Crew Room to have a quick chat with you about it, since it is a very important safety issue, but you refused even to speak with me.
It was my initial intention to deal with the matter informally. It was just going to be a quick chat between the two of us. But because of the way you responded, it has now become formal and we are all here.
I was specifically bought in to the role of General Manager, Operations to do something about Sydney Ferries' safety record. The CEO, the Board of Directors and NSW Maritime all have no doubt about my experience in safety and there is no doubt about my authority to deal with these issues.
The speed at which you approached the wharf was dangerous because you weren’t allowing for the possibility of control system failure. I have no doubt that you are a highly skilled Master. I am not questioning your skills. What we are talking about here are bad habits that have built up over time and these are the things that I have been brought in to address.
North said:
I’m not going to discuss this with you. I’ve lodged an official complaint with the CEO and I’d prefer to leave it in his hands to settle it. I don’t see any point in continuing with this meeting with you.”
[41] It may be that Mr North was within his rights to decline to speak to Mr Mole during his crib break (albeit that this was an insistence on a technical legal right that was bordering on the unreasonable). However, Mr North’s continuing position that Mr Mole had no right to raise this with Mr North directly and was obliged to raise it via the union was wrong and unacceptable. Given Mr Mole’s experience and qualifications, Mr North’s position, maintained in the hearing, that Mr Mole had no adequate qualification to make an assessment of the ferry’s speed and whether it was excessive nor any right to raise such a matter directly with Mr North was, in my view, manifestly wrong and unreasonable. This is a significant matter going to the capacity of Sydney Ferries to manage Mr North in relation to an important issue of safety.
[42] Moreover, and more generally, Mr North demonstrated during the course of his cross-examination that he was unable to recognise that any of his conduct, at any time, was worthy of criticism.
[43] Finally, and perhaps most importantly, it became painfully apparent from Mr North’s statement and his cross-examination and, indeed, from the course of the hearing more generally, that Mr North has an intractable hostility and belligerence towards the management of Sydney Ferries, and towards Mr Mole in particular - and not just as a result of the events leading to his dismissal. I wholly reject the contention that these negative attitudes were confined to Mr Mole. Moreover, Mr North’s belligerence and hostility is coupled with a general attitude of non-cooperation with management, as illustrated by several incidents including his refusal to trail a boat as requested for the remainder of his shift on 21 September 2006, his refusal to cover for another Master on 21 September 2006 and his refusal of requests to change from the Northcott to the Suzie O’Neill. 7
[44] I am conscious of the principles laid down by the Full Court of the Industrial Relations Court in Perkins v Grace Worldwide (Aust) Pty Ltd 8 in relation to when a breakdown in trust and confidence may properly form a basis for concluding that reinstatement is impractical or, to use the language of the FW Act, inappropriate. I recognise that ordinarily reinstatement will be appropriate where a valid reason for a dismissal is not established. But this will not invariably be so. In the present case, given the very high level of responsibility reposed in the master of a ferry working on a busy harbour like Sydney harbour, the level of hostility, belligerence and non-cooperation emerging from the evidence creates an impediment to the effective management of Mr North in the interests of the safe and efficient operation of Sydney Ferries such that I cannot in good conscience conclude that reinstatement is appropriate. On the contrary, I am driven to a conclusion that reinstatement is inappropriate.
[45] Given the absence of a valid reason for the dismissal, I consider that an order for payment of compensation is clearly appropriate in all the circumstances of the case.
[46] Section 396(2) specifies criteria that FWA must take into account in determining the amount of compensation that is ordered pursuant to s.396(1) and I now consider those criteria.
(a) the effect of the order on the viability of the employer’s enterprise
[47] An order for compensation will have no effect on the viability of the respondent’s enterprise.
(b) the length of the person’s service with the employer
[48] Mr North had five years service with the respondent. This is not a particularly long period of service for a person of the applicant’s age.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[49] Mr North was earning in excess of $90,000 per annum and would have been likely to continue earning at this rate for some time. In all the circumstances I find that if Mr North had not been dismissed in July 2009 it is more likely than not that events leading to his dismissal would have occurred in the medium term.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[50] I am satisfied that Mr North made some efforts to find alternative employment and thereby mitigate his loss.
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation
[51] The evidence does not allow me to assess the amount of any remuneration earned by Mr North from employment or other work during the period between the dismissal and the making of the order for compensation. It is clear, however, that he spent a significant time without work and that any work he was likely to obtain would be at a rate substantially less than that which he was earning at Sydney Ferries.
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation
[52] I do not have any evidence that allows me to assess the amount of any income reasonably likely to be earned by Mr North during the period between the making of any order for compensation and the actual compensation.
(g) any other matter that FWA considers relevant
[53] On any view, the proper amount of compensation, determined in accordance with the authorities, will exceed the amount of the cap in s.392(5) because, on any view, Mr North will have lost more than six months’ remuneration as a result of the dismissal. It being clear that Mr North was earning less than the high income threshold, there will be an order for compensation in lieu of reinstatement in the amount of the cap specified in s.392(5)(a). The precise amount determined in accordance with s.392(1)(a), while certainly less than half the high income threshold, is unclear on the evidence. The parties are to confer with view to agreeing that amount so that a formal order can issue. In the event that agreement cannot be reached, the matter will be listed for a short hearing by telephone to determine the proper amount.
VICE PRESIDENT
Appearances:
P. Nagle of Counsel and, later, D. Nagle of Counsel, for Mr North.
J. Murphy, of Counsel,for Sydney Ferries Corporation.
Hearing details:
2009.
Sydney:
October 6, 7, 20.
November 9.
December 12, 23.
2010.
Sydney:
March 24.
1 Selvechandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373
2 (1938) 60 CLR 336
3 ibid per Dixon J at p 363
4 ibid per Dixon J at p 362
5 ibid per Rich J at p 354
6 I place no reliance on the submissions relating to a contention that Mr North had a strategy to “set up” Mr McIntosh or that Mr North prevented Mr Wood from boarding the vessel on 2 June 2008.
7 In relation to this last matter I note that Sydney Ferries sought to rely upon two business records that put the lie to Mr North’s claim that he was not current on the relevant class of vessel. I determined that those records should be admitted into evidence on the basis that Mr North had an opportunity to respond. That opportunity was not taken up.
8 (1997) 72 IR 186 at 191-192
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