Phillip Charles Adkins and Gunns Timber and Hardware
[1995] IRCA 454
•08 September 1995
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - Serious Misconduct - Valid Reason - Procedural Fairness - Reinstatement.
Industrial Relations Act 1988, S170DC, S170DE, S170EA, S170EE
CASES:
Schaale v Hoechst Australia Ltd [1933] 47 IR 249 and Wilcox CJ at 243
Nicolson v Heaven and Earth Gallery Pty Ltd [1994] 126 ALR 233
Hooper v Bi-Lo Pty Ltd 34 AILR 283
Johns and Gunns Limited IRCA (unreported) 18 May 1995
PHILLIP CHARLES ADKINS AND GUNNS TIMBER AND HARDWARE
No. TI-1096 of 1995
Before: Ryan JR
Place: Melbourne
Date: 8 September 1995
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY Matter No TI-1096/95
B E T W E E N: PHILLIP CHARLES ADKINS
Applicant
AND:GUNNS TIMBER AND HARDWARE
Respondent
RYAN JR
MINUTES OF ORDER
8 SEPTEMBER 1995
THE COURT ORDERS THAT:
the respondent reappoint Phillip Charles Adkins to the position in which he was employed immediately before his termination on 4 May 1995 so as to maintain the continuity of his employment
the employment of Philip Charles Adkins be deemed to have been continued for all purposes from 4 May 1995 to the date the final order is made in this matter
the matter be adjourned to the sittings commencing in Hobart on 2 October 1995 at a time to be determined by the District Registrar to enable the parties to calculate the amount of remuneration lost by the applicant because of the termination in accordance with the principles set out at pages 32 to 34 of the reasons for judgment in Johns v Gunns Limited IRCA (unreported) 18 May 1995.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY Matter No TI-1096/95
B E T W E E N: PHILLIP CHARLES ADKINS
Applicant
AND: GUNNS TIMBER AND HARDWARE
Respondent
COURT: RYAN JR
PLACE: MELBOURNE
DATE: 8 SEPTEMBER 1995
REASONS FOR JUDGMENT
On 15 May 1995 the applicant lodged an application for reinstatement and a claim of unlawful termination of employment. He claimed that:
he had worked as a truss manufacturer with the respondent for almost 10 years from 24 July 1984 to 4 May 1995
the respondent terminated his employment on 4 May
he was told that he was being terminated because of “removal of company property without due authority”
the separation certificate provided to him later by the respondent stated as the reason for termination
“Mr Adkins removed goods from our company premises without due authority and without adhering to company policy of raising the relative documentation”
Conciliation in the Australian Industrial Relations Commission in June and a mediation conference in the Court in July failed to resolve the matter. It came on for trial in Devonport on 4 September. Mr McKee of the Legal Aid Commission appeared for the applicant and Mr Stanton of Shields Heritage, solicitors, for the respondent.
The applicant contends:
there was no valid reason for termination within the meaning of S170DE(1)
the termination was harsh, unjust and unreasonable pursuant to S170DE(2)
the termination was unlawful as the applicant was not given an opportunity to defend himself within the meaning of S170DC(a)
in the circumstances the applicant is entitled to:
(a) a declaration that termination of his employment contravened the Industrial Relations Act 1988
(b)an order that the applicant be reinstated
The applicant claims:
the respondent failed to provide him with any relative documentation on company policy for the removal of goods
he adhered to accepted practices within the company when he removed goods from the premises
if any part of the respondent’s decision to terminate the employment was related to performance or conduct then the applicant was denied an opportunity to respond to those allegations
the respondent failed to have a clear and concise company policy on the removal of goods from company premises
the respondent failed to enforce any company policy on the remove of goods from company premises in a consistent manner
the respondent failed to provide the applicant with a reasonable opportunity to defend himself against the allegations made against him.
The respondent asserts:
the termination of employment was lawful as it was for
(a) serious misconduct
(b) theft of company property
(c) removal of company property without authority
(d) breach of company policy
the termination was not harsh, unjust or unreasonable because it was for the reasons specified in paragraph 1 above. The company policy on invoicing goods before removal was clear, well known and consistently enforced
the applicant was given an opportunity to defend himself against the allegations and at that time he admitted to removing the goods without having an invoice raised
the applicant is not entitled to the relief he seeks.
CONFLICTS AND INCONSISTENCIES IN THE EVIDENCE
The applicant gave evidence. The respondent called four witnesses namely Ian Yarwood, Manager of Gunns Timber and Hardware in Devonport, Dean Breward, Manager of the respondent’s Devonport hardware department, Max Boutcher, Timber Truss Manager for the respondent in Devonport and Andrew Charles Campbell, salesman in the Devonport hardware department.
There were a number of conflicts and inconsistencies between the evidence of Mr Adkins and that of the four witnesses for the respondent and between the respondent’s witnesses themselves.
By way of example, Mr Boutcher gave evidence that Mr Breward did speak briefly at the termination meeting on 4 May. Mr Breward states he did not and Mr Yarwood supports him. Mr Boutcher also gave evidence that Mr Campbell’s name was mentioned at the termination meeting as the person with whom Mr Adkins claimed he had negotiated the purchase of the wire mesh and that Mr Yarwood indicated that any discussions or negotiations with Mr Campbell were no excuse for the removal of the wire mesh without payment, notification and documentation.
Mr Yarwood states there was no mention of Mr Campbell by name at the termination meeting. If there was no mention of Mr Campbell by name at this meeting this would seem to the Court to be curious, unusual and unexpected. The Court does note that when this was put by the Court to Mr Yarwood he pointed out that Mr Adkins followed the same course of not naming Mr Campbell in his letter of 8 May (Exhibit R6). Furthermore, Mr Yarwood did concede that he was aware of Mr Campbell’s involvement from the discussions with Mr Campbell and Mr Breward prior to the termination meeting. Nevertheless the Court has concluded that Mr Campbell was mentioned by name at the termination meeting on 4 May.
There are also internal inconsistencies in the evidence of Mr Campbell including the time at which he reported the missing mesh after the end of April 1995 stocktake and as to whether he reported this to Mr Breward before or after a discussion with Mr Adkins.
There was also a claim in the statement of 5 May (Exhibit R11) that in late January 1995 there was “some discussion with Mr Yarwood and Mr Breward (about a quantity of damaged wire mesh) ..and....a price of $350 was quoted to Mr Adkins”. At no stage in the evidence of Mr Yarwood or Mr Campbell or in the evidence of any other respondent witness or in the evidence of Mr Adkins was there any mention at all of the possibility of a discussion with Mr Yarwood in January 1995 in respect of the price of the wire mesh. The possibility of this discussion was never mentioned by either counsel in the hearing. In fairness, it should be said that the written statements from Messrs Yarwood, Breward and Campbell, while apparently prepared and drawn up soon after the termination meeting on 4 May and dated 4 May in the case of Breward and 5 May in the case of Yarwood and Campbell, were introduced as an exhibit late on the second day of the hearing. It is possible that either or both counsel failed to note the reference by Campbell to a discussion with Mr Yarwood in early January. On the other hand an inference could be drawn that this amounts to another potential inconsistency between the evidence of Messrs Yarwood and Campbell.
The Court will not now document the conflicts and inconsistencies between the evidence of Mr Adkins and the four respondent witnesses. The inconsistencies were noted. They were numerous but the Court does not find it necessary to resolve all these inconsistencies. What is necessary is for the Court to find whether there was a valid reason for termination and whether the termination was fair and just and reasonable and, if not, what remedy should be provided for Mr Adkins.
However, because of the conflicts and inconsistencies, it is necessary to deal with the evidence of each witness in turn.
DEAN RONALD BREWARD
Mr Breward gave evidence that in February 1995 Mr Campbell came to him and raised the question of getting rid of damaged wire mesh. He states the Mr Campbell discussed price with him and that he indicated that the mesh should be sold in the vicinity of 50% of market value or “half price”. He also claims that he left the final negotiations on price to Mr Campbell.
He states that on Tuesday 2 May, after the April stocktake, Mr Campbell advised him that the wire mesh had gone. He asked Mr Campbell to find out what had happened and that Mr Campbell returned and reported that Mr Adkins had taken the mesh. At this stage, Mr Breward gave contradictory evidence. Initially, in response to a question from the Court, he said that he checked that the mesh had not been charged out on Mr Adkins account and then he spoke to Adkins and then directed Campbell to raise an invoice in the name of Adkins for the mesh (i.e. Exhibit A3 and Exhibit R3).
In re-examination Breward stated that he did not discuss the mesh with Adkins until the 4 May which, of course, is not consistent with speaking to Adkins before the invoice was raised on 2 May.
In re-examination Mr Breward stated that he must have been confused in advising the Court during examination in chief that he saw Mr Adkins before the invoice was raised. The Court accepts that Mr Breward did not tackle Mr Adkins about the missing mesh until 4 May or at the earliest 3 May. Both Breward and Adkins agree that, after initially querying Breward about what he was talking about, Adkins admitted that he had taken the mesh some time earlier.
Mr Breward states that he went straight to Mr Yarwood after the discussion with Mr Adkins and reported the matter and that it was between 11:30 am and midday. This timing is not completely consistent with Mr Breward’s signed statement of 4 May which reads as follows:
“On May 2 I had a discussion with Mr Campbell regarding a missing quantity of wire mesh - Mr Campbell was asked to check with Mr Adkins and on May 3 Mr Adkins admitted he had taken the product in question without any authority from management.
I then went to Mr Adkins on May 4 and asked him when the mesh had been removed from our site. At this time he denied knowing anything about the removal of the product. I then pressed him further, and he then admitted removing the mesh from our site several weeks previous, and he had not sought to have the product in question invoiced out.
I then reported the matter to Mr Yarwood as I knew this was a serious breach of company policy.”
The Court notes that the statement made on the same day as the termination meeting is more likely to contain an accurate recollection of events from Mr Breward and that his evidence in the hearing on 4 September is less likely to be accurate.
In his evidence on 4 September Mr Breward indicated that he attended the termination meeting on 4 May at about 2:00 pm and that the meeting took about 20 minutes. He states he did not speak at the meeting and that he cannot recall Mr Boutcher speaking. He states that Mr Yarwood accused Mr Adkins of a serious breach of company policy. He stated in respect of Mr Adkins “he was dismissed basically”.
He described the attitude displayed by Adkins as light hearted until dismissed and that at that stage Mr Adkins asked whether the matter could be settled and offered to pay for the mesh. Mr Breward states that Mr Yarwood indicated that it was too late and there would be no negotiation and the dismissal stood.
Mr Breward stated that there was a clear company policy that goods could not be removed without paperwork but that he was not sure whether it was documented in a procedures manual but that it was a “commonsense policy” and that some time in about January 1995 a man was rostered on the gate of the timber yard to enforce the paperwork policy. Mr Breward conceded that it was possible the first discussion in respect of the wire mesh and the price for it could have taken place at Christmas time. He claims he left it to Mr Campbell to calculate an appropriate price but that it is possible that he also spoke to Mr Adkins about price.
MAX BOUTCHER
Mr Boutcher was interstate but gave sworn evidence by conference telephone and was subject to cross-examination, re-examination and a question from the Court.
Mr Boutcher states that Mr Adkins approached him in late February 1995 seeking a loan of a company truck to take some timber trusses, some oregon planks and a piece of piping to his home. Mr Boutcher classified this material as “no value stock” although he conceded the timber trusses had a value in excess of $50 either as useable timber or even as fire wood. He states he cannot remember whether he agreed a price for the timber trusses but that it would be his usual practice to do that. He cannot recall Mr Adkins mentioning wire mesh or anything else other than the timber trusses, the oregon planks and the piping. He stated that the applicant came to his house by appointment after the termination and asked him to recall the conversation and suggested that he had mentioned the wire mesh. Mr Boutcher repeated that he had no recollection of the wire mesh being mentioned in the conversation which he firmly states took place in February.
Mr Boutcher really cannot say whether he asked Mr Adkins to pay for the trusses. When pressed, he conceded he was the responsible person if goods from his area went out without payment and that he would have expected Mr Adkins to pay the agreed price (if there was any agreed price) at the timber shed as he left with the trusses.
Mr Boutcher was present at the termination meeting. He states that Mr Campbell was mentioned by name and that Mr Breward spoke at the meeting and referred to Mr Campbell. Other than that he generally confirmed Mr Breward’s version of the termination meeting and the substance of his evidence was that the meeting took about 20 minutes and that Mr Yarwood was not prepared to negotiate with Mr Adkins and reaffirmed the dismissal for a breach of company policy namely the removal of company property without payment, authorisation or documentation.
ANDREW CHARLES CAMPBELL
In January or early February Mr Campbell states he became aware of the damaged wire mesh.
His signed statement of 5 May 1995 is as follows:
“Late January, I was in the process of removing our stock of wire mesh from the northern end of our yard to a location near the new truss shed. Mr Adkins showed an interest in a quantity of damaged mesh, and after some discussion with Mr Yarwood and Mr Breward, a price of $350 was quoted to Mr Adkins. Mr Adkins stated that he would have to defer any purchase, as his finances wouldn’t allow him to buy the goods until he could see his way clear to putting them on his account.
During February, I asked Mr Adkins if he was still interested in purchasing the damaged mesh - he stated that he was and would get back to me. Some weeks elapsed and I repeated my earlier question to Mr Adkins as I needed to tidy the yard up.
In April, we relocated our stock of mesh in readiness for stocktake, and I noticed a quantity of mesh was missing from our stock. At the time I assumed the mesh had been sold and invoiced as our company has several sales people and any one of these could have auctioned the sale.
After our stocktake, I had discussions with my manager, Mr Breward, and it became apparent that the missing quantity of mesh had not been invoiced out - I then left this matter with Mr Breward.”
In his evidence on 4 September Mr Campbell stated that he became aware of the damaged wire mesh in January or early February and when pressed he indicated that “it might have been about Christmas time”. He stated he could not recall whether he approached Adkins or Adkins approached him. This seems curious given the events that followed on 2 and 4 May and Mr Campbell’s involvement in them. One would have expected Mr Campbell to be able to recall who initiated the discussion on getting rid of the wire mesh.
In examination in chief Mr Campbell states that he put a price to Mr Breward and that Mr Breward thought it was too low and suggested $350 and that Mr Adkins agreed to purchase the mesh at that price. The Court has already noted that neither Mr Breward nor any other witness made any reference in the hearing to a discussion with Mr Yarwood on price. Mr Breward stated in his evidence that the price suggested could have been $400 but that it was unlikely to have been $500 because that was more than the mesh was worth.
Mr Campbell claims:
Mr Adkins asked whether he was to pay cash or charge to his account and that he replied that “putting it on account would be fine”
Mr Adkins stated he could not afford to put on his account at that time and that he (Campbell) did not put the mesh on the applicant’s account at that time because the applicant “asked me not to”. The Court notes that this is consistent with the first paragraph of Mr Campbell’s statement of 5 May (Exhibit R11)
he (Campbell) moved the mesh to the “east end of the yard” and that later (in evidence he was not specific as to when) he asked Adkins whether he was still interested in the mesh as that part of the yard was to be concreted.
The impression the Court gained was that at that stage Mr Campbell wanted to get rid of the mesh. This is consistent with the second paragraph of Mr Campbell’s statement of 5 May 1995 which reads:
“During February, I asked Mr Adkins if he was still interested in purchasing the damaged mesh - he stated that he was and would get back to me. Some weeks elapsed and I repeated my earlier question to Mr Adkins as I needed to tidy the yard up.”
In his evidence at the hearing on 4 September, four months later, Mr Campbell was far less specific and he seems to have a much poorer recollection of what occurred. He stated that after the initial incident with the mesh which he puts at about Christmas time or in January or February, the question of the mesh “may have come up in conversation” but that he had no particular recall of such conversations. He also stated that he noticed the mesh had gone on the day of the April stocktake (Friday 28 April) and he stated in evidence “I assumed someone else had bought it”.
Some aspects of this evidence are consistent with his statement of 5 May. Some are very much inconsistent with that statement. His statement was made when the events should have been somewhat fresher in his mind. It is clear from the statement that, contrary to his claim in his evidence that he did not notice the absence of the mesh until 28 April, he must have noticed the mesh was still in the yard during February when he asked Mr Adkins if he was still interested in purchasing it and presumably also after “some weeks elapsed and I repeated my earlier question to Mr Adkins as I needed to tidy the yard up”. The Court notes that it is possible to reconcile this timing with the removal of the mesh in late February but not with the applicant’s claim late in the hearing that he removed the mesh on 7 January.
In his evidence at the hearing Mr Campbell claims:
on Monday 2 May he asked Mr Breward whether the mesh had been charged out and that Breward asked him to “check it out” and that he went through the daily accounts for April and possibly March and found no reference to the mesh
on Monday 2 May he said to Adkins
“did you get the mesh?”
and Adkins replied, “yes”
he believes he said to Mr Breward that Mr Adkins had the mesh and that Breward said
“do the right thing. Charge it out”
he then raised the invoice of 2 May 1995 (Exhibit A3 and Exhibit R3).
Mr Campbell gave evidence that while he could not recall advising Mr Adkins between February and April that he had not charged the mesh to him at that stage he does believe that Mr Adkins did make mention of “big bills” and that he may have said to Mr Adkins “no worries mate”. He also admits that Adkins may have said words to the effect “I don’t mind if you do not charge it” but that “people say that all the time and you did not take notice of it”.
Quite apart from the inconsistencies in his sworn evidence and his written statement Mr Campbell’s evidence, combined with the statement, suggests the possibility of a rather loose and casual approach to raising documentation for staff purchases (at least by Campbell). There was also the unclear and casual approach of Mr Boutcher to whether Mr Adkins was charged and paid for the timber trusses with a justification of possible non-payment based on some different policy for “non-value” stock.
Of course, there is no suggestion the mesh was “non-value stock” but the Court notes that the possibility of the above discussion or discussions between Adkins and Campbell suggest a loose and casual approach to documentation of staff purchases and certainly is at least suggestive of the possibility that, contrary to his direct evidence, Mr Campbell may well have known that the applicant had taken the mesh. Certainly, it would appear from Mr Campbell’s statement, if this contains a moderately accurate recollection of his negotiations with Mr Adkins, that he discussed the mesh first with Mr Adkins either around Christmas or in January or in early February and that he discussed the matter with him again later during February and “some weeks later” again as he was anxious to “tidy the yard up”.
IAN YARWOOD
Mr Yarwood’s statement of 5 May 1995 reads as follows:
“INTERVIEW HELD MAY 4TH 1995 - 2.30pm
Purpose of interview - to determine if a quantity of wire mesh had been taken from Gunn’s premises by Mr Adkins, with no documentation raised which contravenes company policy.
Those present at interview:
Mr Ian Yarwood - Site manager
Mr Phillip Adkins - Truss Dept. Employee
Mr Dean Breward - Hardware Manager
Mr Max Boutcher - Timber Manager
Mr Adkins admitted taking the mesh and did not make any mention of any previous discussion with any Gunn’s employee that he could remove the product without an invoice being raised. Mr Adkins was of the opinion that removal of the product was “only a technicality” and, as he admitted to the incident, wanted me to reach a compromise and “work something out”. He continued the conversation in an almost light hearted manner, and offered to make a cash payment to “clear the matter up”.
I was left with no alternative but to dismiss Mr Adkins from Gunn’s employment, as I consider this incident to be a very serious breach of company policy.
Mr Adkins was paid out his full entitlement:
i.e. Ordinary pay to date
Annual leave plus loading
9.3 weeks Long Service Leave
Mr Adkins was asked to leave our premises the same day (May 4th) and I consider the matter closed.”
Mr Yarwood gave evidence that Breward informed him about 10:30 am on Monday 4 May that Adkins had taken wire mesh without authorisation and without documentation. He claims that he spoke to Adkins at about 11:00 am and advised him that he wanted to see him at 2:30 pm in relation to the removal of the wire mesh from the site. Adkins states that he was only advised of the meeting at 2:15 pm and that it took place at 3:00 pm and not at 2:30 pm. Irrespective of when Mr Yarwood advised Mr Adkins of the meeting which in fact became the termination meeting, and irrespective of whether that meeting took place at 2:30 pm or 3:00 pm, it is clear that when Mr Yarwood advised Mr Adkins that there would be a meeting he did not, at that stage, indicate that there was a real possibility that the applicant would be facing dismissal at that time.
When the termination meeting began Mr Yarwood ascertained from Mr Adkins that the latter had removed the wire mesh. He seems to have indicated almost immediately that this amounted to very serious misconduct and was a serious breach of company policy because the wire mesh had been removed without any payment or authorisation or supporting documentation.
Yarwood indicated that Adkins asked him whether he was being accused of stealing and that he (Yarwood) simply said that the goods had been removed without documentation and “if you want to call that stealing so be it”.
Yarwood states that Adkins then sought to settle the matter and offered to pay for the wire mesh and that he made this offer after Yarwood had indicated that he was definitely being dismissed.
Yarwood indicated that he was not in a position to negotiate with Adkins. His evidence on this point was quite telling. He said:
“I could not compromise. It was company policy. There was no alternative but to dismiss him there and then. I asked him to be off the site by 3:30 pm. I said I would get back to him within 24 hours in relation to paying him out which I did.”
PHILIP CHARLES ADKINS
It is not necessary to summarise the applicant’s evidence in detail especially as much of the position he maintained at trial was set out in writing by him on the fourth day after the termination in his letter of 8 May which was addressed to Mr Yarwood. The respondent tendered the letter as Exhibit R6. It reads as follows:
“8th May 1995
The Manager
Gunns Timber & Hardware
39 Don Road
Devonport
Dear Ian
Since our meeting last Thursday I have given a great deal of thought to, and am able to recall fairly accurately details surrounding the alleged offence of breach of company policy.
These details I’m sure are sufficient to warrant an overturning of the decision of my dismissal and more so to remove the far reaching and damaging ramifications of this unfortunate incident, which is of paramount importance to me.
I recall at the time of agreeing on the negotiated price for the goods, I asked if cash was necessary, “No on your account will be fine” was the answer. I then advised him to charge the goods but would not be able to remove the same immediately due to other commitments.
A number of weeks later the salesperson prompted me to remove the goods, something to do with cleaning up the area for further development. I did so one Saturday afternoon around late February this year along with some surplus trusses I purchased through Max and some planks which had been discarded on the dump near the sawmill. I delivered them to my property on a Gunns flat tray truck with permission sought from Max.
On approximately three occasions since then during general conversation with the salesperson he commented that he had not yet charged the goods, my response was “No hurry mate, I have a few big bills to deal with at present,” On another occasion I said words similar to “I don’t mind if you don’t charge it”, Meaning not yet for the same reason.
These comments were not intended to be taken seriously and on at least two of the occasions were followed by “Don’t get yourself into trouble, do what is right” or words to that effect.
Most recently on the 21st April it was mentioned to me that Dean showed an interest in the goods not yet being charged and once again I advised the salesperson to “Keep yourself in the clear, do what you have to do and charge it”.
As I negotiated with the appropriate salesperson during the course of the agreement to purchase these goods, I felt that it was not my responsibility to process the invoice concerned and even though I have had some experience on the invoicing system I had not the knowledge on how to code and word this particular sale.
Throughout this time I fully expected the amount to be debited to my account and even pursued my account for that time on three occasions so as to organise my finances. I was advised of a hold up with my account and that it was on its way. The hold up covered more than a full month of the time the goods were to be charged.
The facts show that I did request the appropriate paperwork to be processed, more than twice at least, and that at the time of removing the goods from the site I believed that to be done.
My credit rating is very good as I have never had an unpaid account or bad debt anywhere. I believe I have been treated unfairly and unjustly by the decision to dismiss me and as my input as a labourer to this company has been substantial the treatment I have experienced and the resulting discussion of my dismissal among my fellow work mates and likely others too will bring unfair and unwarranted criticism of me and be a slur on my character and ethics.
There are some questions I have regarding the decision to dismiss me, I would appreciate an opportunity to have them answered in a meeting with you at your earliest convenience.
Yours sincerely
Phillip Adkins”
The Court was not overly impressed with Mr Adkins as a witness. There were definite inaccuracies in his evidence and, in particular, the Court rejects his claim late in the hearing that he removed the mesh on 7 January. The balance of the evidence, including some of the applicant’s own evidence, suggests that he removed the wire mesh at the end of February.
However, there were inconsistencies in the evidence of all five witnesses. There were conflicts, inaccuracies and inconsistencies within the evidence of Adkins, Campbell and Breward. The Court stops short of categorising the evidence of Yarwood and Boutcher as inaccurate but there were inconsistencies in that evidence also.
On the basis of the evidence, with all its defects, and on the balance of probabilities, the Court does not accept the version of events given by Adkins and does not accept the version of events given by Campbell. The other three witnesses were not in a position to give a complete version of the negotiations and agreement between Adkins and Campbell although all three were in a position to give relevant evidence on some aspects.
The Court has concluded that the most likely sequence of events was that Mr Campbell assisted Mr Adkins by delaying the raising of any invoice for the wire mesh and that Mr Adkins was happy for that state of events to continue as long as practicable. The Court will return to this likely sequence of events when dealing with the issue of procedural fairness.
VALID REASON
The Court accepts that the removal of an employer’s property without authorisation can constitute a valid reason for termination within the terms of S170DE(1).
The Court accepts that the removal of an employer’s property without appropriate documentation can constitute a valid reason for termination within the terms of S170DE(1).
The Court accepts that theft of company property can constitute a valid reason for termination within the terms of S170DE(1).
PROCEDURAL FAIRNESS
S170DE(2) provides that a reason is not valid if, having regard to the employee’s capacity and conduct, the termination is harsh, unjust or unreasonable. This sub-section does not limit the cases where a reason may be taken not to be valid.
The Court does not accept the removal of damaged wire mesh by Mr Adkins without the prior payment of an agreed price of $350 and without the prior raising of a document such as an invoice or sale note such as would ensure that the amount of $350 was debited to the employee’s staff account, constituted, in the circumstances, a valid reason within the terms of S170DE(2).
The Court finds curious Mr Yarwood’s direction which led to a credit note designed to cancel out the invoice issued on 2 May. The Court notes that this action (the credit note) was allegedly designed by Mr Yarwood to allow time for the circumstances to be investigated. Firstly, it does not seem necessary to issue the credit note to conduct a further investigation. Secondly further investigation on 4 May seems to be rather late investigation when the termination was effected about 3 pm on that day.
However, while the investigation of the circumstances surrounding the removal of the mesh was far from ideal, the Court stops short of categorising that investigation as inadequate. The Court is mindful of the observations of Heerey J at 253 in Schaale v Hoechst Australia Ltd [1933] 47 IR 249 and Wilcox CJ at 243 in Nicolson v Heaven and Earth Gallery Pty Ltd [1994] 126 ALR 233. The impact of those observations is that an employer is not obliged to apply the skills and resources of a police investigation or an investigation by lawyers in order to act with procedural fairness. The investigation was one where Mr Yarwood relied on Mr Breward and Mr Breward relied on Mr Campbell and of course Mr Campbell was intimately involved in the negotiations and arrangements which led to Mr Adkins removing the mesh without adequate documentation. However, the investigation did establish that no invoice was raised until 2 May 1995.
I draw a distinction here with the circumstances in Bi-Lo Pty Ltd v Hooper; Hooper v Bi-Lo Pty Ltd 34 AILR 283.
In that case the Full Industrial Commission of South Australia held that in a case involving alleged misconduct by an employee the employer was not bound to establish, on the balance of probabilities, that the employee committed the misconduct alleged, in order to escape a finding of a harsh, unjust or unreasonable dismissal.
The employer had conducted as full and extensive investigation into the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances. The Full Commission held that the employer had given the employee every reasonable opportunity and sufficient time to answer all the allegations put and respond. The employer had honestly and genuinely believed - reasonably on the information available - that the employee was guilty of the alleged misconduct. The employee for his part had not informed the employer of other facts which might have exculpated him, despite being given every opportunity to do so. In these circumstances, the dismissal was held not to be harsh, unjust or unreasonable.
In this case, while I have stopped short of classifying the investigation as inadequate, it could not be described as “full and extensive”. However, that does not matter and it is not necessary for an adequate investigation to be “full and extensive”. Of more significance in this case is the lack of “every reasonable opportunity and sufficient time to answer all the allegations”. Furthermore, unlike Hooper in Bi-Lo, Adkins was not given an opportunity on 4 May to “inform the employer of other facts which might have exculpated him”. He attempted to do this after the termination in his letter of 8 May (Exhibit R6) but it was too late then or at least there is no evidence Mr Yarwood ever responded to the last paragraph of that letter in which Mr Adkins stated:
“There are some questions I have regarding the decision to dismiss me, I would appreciate an opportunity to have them answered in a meeting with you at your earliest convenience.”
No written policy specifically relating to the purchase of goods by employees was tendered at the hearing. Many employees, and the applicant was one of them, conducted substantial staff accounts with the respondent. The Court accepts that it was a policy of the respondent, whether documented in writing or not, that employees were not to remove goods unless they had paid for them or unless an invoice or sale note had been raised which ensured that the purchase was debited to the appropriate staff account. However, the Court is not convinced that this policy was strictly policed. Exhibit R8 demonstrates that in November 1994 Mr Yarwood identified 196 (or 70%) of 278 invoices for the first three days of trading in November 1994 as being defective. They were defective in that they contained no signature by the customer acknowledging that the goods supplied remain the property of the respondent until payment is made in full and acknowledging that goods have been received in good order and condition.
The Court certainly agrees with Mr Stanton for the respondent that there is a big difference between inadequate documentation and no documentation. But the loose practices in relation to invoices in November 1994, and the loose practices in respect of staff purchases as outlined by Messrs Boutcher and Campbell, have led the Court to the view that the most likely sequence of events was that Mr Campbell encouraged Mr Adkins to purchase the mesh and assisted him in financial terms by delaying the raising of any invoice for the mesh and that Mr Adkins was happy for that state of events to continue as long as practicable. However the Court is not satisfied that Mr Adkins intended to avoid indefinitely any payment for the mesh.
The Court notes that Mr Adkins ran a substantial account with the respondent and that there is no prior record put to the Court of a failure to pay for goods purchased. In other words the applicant had a good account record.
The applicant was given very little time (3 hours or 45 minutes depending on which version is accepted) to prepare for the termination meeting. He was not told that termination was a matter that would be considered at the meeting and he was given no real opportunity to explain the arrangements between himself and Mr Campbell.
Mr Yarwood refused to consider a payment for the wire mesh when the offer was made by the applicant at the meeting on 4 May. Indeed, Mr Yarwood seems to have been under the impression that he had no alternative but to insist on termination of employment. This might have been a reasonable position to take if policy on removal of goods by staff was clear and was documented and was applied consistently. The respondent failed to produce evidence of a clear policy or of a written policy or of a consistent application of policy, be it written or unwritten.
The Court finds that the termination in this case and in the circumstances prevailing at the date of termination was harsh and unjust and unreasonable within the terms of S170DE(2).
REMEDY
Using the test formulated by the Chief Justice in Nicolson v Heaven and Earth Gallery [1994] 126 ALR 233 at 244 the Court finds reinstatement practicable. The Court has had particular regard to the comments on reinstatement made by Northrop J in Johns and Gunns Limited IRCA (unreported) 18 May 1995 at 27 to 30 and, like Northrop J in Johns at 30, the Court is of the opinion that the fact that the position held by Mr Adkins has been filled by another person does not make reinstatement impracticable.
In all the circumstances of this case the contentions put on behalf of the respondent do not make reinstatement impracticable. In the result orders will be made in conformity with paragraphs 170EE(1)(a)(i) and (ii) and (b)(i) and (ii).
Difficulties may arise in determining the remuneration lost by Mr Adkins because of termination although I do not envisage that the calculation of remuneration lost by Mr Adkins will be as complex as may have been the case in Johns (see pages 30-34 of that decision).
In this case calculation of remuneration lost should follow the principles outlined by Northrop J in Johns at 32 to 34. Orders will be made giving effect to the judgment today. The matter will then be adjourned to enable the parties to see if any amount can be agreed upon. If agreement is reached, a further consent order can be made pursuant to Order 35 Rule 10. If no agreement can be reached, the parties are directed to file submissions setting out the calculations by which the disputed amounts are reached and the Court will determine the amount to be paid.
ORDERS
The Court orders that:
the respondent reappoint Phillip Charles Adkins to the position in which he was employed immediately before his termination on 4 May 1995 so as to maintain the continuity of his employment
the employment of Philip Charles Adkins be deemed to have been continued for all purposes from 4 May 1995 to the date the final order is made in this matter
the matter be adjourned to the sittings commencing in Hobart on 2 October 1995 at a time to be determined by the District Registrar to enable the parties to calculate the amount of remuneration lost by the applicant because of the termination in accordance with the principles set out at pages 32 to 34 of the reasons for judgment in Johns v Gunns Limited IRCA (unreported) 18 May 1995.
I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Judicial Registrar Ryan.
Associate :
Date : 8 September 1995
Appearances:
Counsel for the Applicant : A R McKee
Solicitor for the Applicant : Legal Aid Commission of Tasmania
Counsel for the Respondent : K J Stanton
Solicitor for the Respondent : Shields Heritage
Date of Hearing : 4 and 5 September 1995
Judgment : 8 September 1995
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