Robert Houston v James Hardie Pipelines

[1995] IRCA 510

C A T C H W O R D S

INDUSTRIAL LAW -  TERMINATION OF EMPLOYMENT - VALID REASON- HARSH, UNJUST OR UNREASONABLE - employee terminated for clocking another employee’s card - whether serious misconduct - whether termination harsh, etc.

INDUSTRIAL RELATIONS ACT 1988, Sections 170DC, 170DE, 170EDA

Gibson v Bosmac Pty Ltd (Industrial Relations Court of Australia, Wilcox CJ,
5 May 1995)

Gregory v Philip Morris Limited (1988) 80 ALR 455

Construction, Forestry, Mining & Energy Union (FEDFA Vic Branch) v Kodak (Australasia) Pty Ltd, (Industrial Relations Court of Australia, Murphy JR,
21 December 1994)

Catalano v City of Armadale (1989) W.A.I.G. 2782

ROBERT HOUSTON -v- JAMES HARDIE PIPELINES - WI 94/533

BEFORE:                 MURPHY JR

PLACE:  PERTH

DATE:  12 JUNE 1995

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )                No. WI 94/533

BETWEEN:  ROBERT HOUSTON
  -       Applicant

AND:  JAMES HARDIE   PIPELINES
  -       Respondent

Before:          Murphy JR
Place:             Perth
Date:              12 June 1995

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1. The application is dismissed.

NOTE:Settlement and entry of Orders dealt with by Order 36 of the Industrial Relations Court

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )                No. WI 94/533

BETWEEN:  ROBERT HOUSTON
  -       Applicant

AND:  JAMES HARDIE   PIPELINES
  -       Respondent

Before:          Murphy JR
Place:             Perth
Date:              12 June 1995

REASONS FOR JUDGMENT
(EX TEMPORE, REVISED FROM TRANSCRIPT)

This is an application under subdivision (C) of Part VIA of the Industrial Relations Act (the Act) whereby the applicant alleges that the termination of his employment by the respondent on 8 November 1994 was in breach of the Act.

Findings on the evidence

The events giving rise to the termination, I find on the evidence, to be as follows.  The applicant works permanent night shift with the respondent as an operator.  At the time his team leader was Mr Berry (Berry). 

At around 12.45 am on 4 November another employee of the respondent, Mr Bailey (Bailey), called to indicate that he would be running late.  At the time the applicant had taken the call,  he clocked Mr Bailey's card and replaced it in the rack next to the time clock.  He was observed doing this by Berry who raised it with him some hours later.  Berry raised the matter of the clocking of his time card with Bailey as soon as he arrived some 35 minutes after the first phone call.

When Berry raised the matter with the applicant he readily admitted it.  He said, however, to Berry that he had observed another supervisor to clock Berry's card.  Berry's reply, I find on the evidence, was, "Yes, okay, Bob."  Berry gave evidence that he did not want to enter into a debate with the applicant Berry at the time being new to his position as team leader. 

The respondent investigates the matter.

The Plant Manager, Mr Leevers (Leevers), was advised of the incident the next morning and raised it with the applicant.  The applicant again readily admitted what he had done but said it was common practice.  Leevers decided to take the matter further and, according to the enterprise agreement operating at the plant the relevant union was notified.  The applicant was suspended on full pay pending an investigation.

The respondent determined to investigate the applicant's claim that it was common practice in the plant by interviewing each of the 43 employees in the relevant section of the plant.  Those interviews were conducted by Leevers; by Mr Anthony Shanahan (Shanahan), the regional Human Resources Manager, and by Janine Woods, the Human Resources Officer.  I accept the evidence of those witnesses that each employee was advised that the interviews were for the purpose of ascertaining whether clocking on for other employees was a common practice within the plant.

The result of the interviews was as follows as detailed in Mr Shanahan's affidavit. 

The interview process indicated that:

(a)the majority of employees knew it was a dismissible offence, mainly due to the notice in the Team Leader's office and custom and practice. 

(b) Most employees were not aware that false clocking happened on site, and had certainly never witnessed it. 

(c)The rest of the employees had only heard rumours (hearsay) and had never had their time card clocked on by someone else. 

(d)Most employees, all but one had never falsely clocked on for another employee nor asked for another employee to clock them on falsely.

Following those interviews on 8 November 1994 a meeting was convened to determine the outcome of the interviews and future action in relation to the matter. At that meeting the results of the investigation were detailed to the applicant and to Mr Thomson (Thomson), the union organiser of the relevant union.  They were then invited to respond and were invited to provide material which would indicate that the results of the investigations were wrong.  On the evidence I find that the applicant and Thomson declined to provide any specific details of individual employees clocking on other employees contrary to the rule against such practice. 

At that point Thomson raised with the representatives of the respondent that lesser alternatives to the termination of the applicant's employment should be considered.  Thomson maintained that he said to the meeting that it was part of the workplace culture and that this would not be addressed by singling out a single employee for termination.

At this point the meeting adjourned for a short time to allow the respondent to consider its position after which time the respondent's representatives determined to terminate the applicant summarily. 

Did the respondent have a valid reason to terminate the applicant's employment pursuant to section 170DE of the Act?

It was the respondent's contention that it had a valid reason to terminate the employment here because the applicant had engaged in an act of gross misconduct. The respondent carries the onus of proof under section 170EDA of the Act to prove that it had a valid reason.

The respondent produced a notice to all employees which was said to have been posted on the production manager's office for some years.  That notice read:

TO:ALL STAFF

FROM:J. ZACCONI: 

ANYONE BEING CAUGHT CLOCKING ON OR OFF OTHER PEOPLE'S TIME-CARDS WILL BE DISMISSED INSTANTLY.

SIGNED:  J. ZACCONI.   (Emphasis in original)

The original of the notice was tendered in evidence.  The applicant gave evidence that he was aware of the rule but maintained that the notice had not been displayed for the last 12 months or so.  He accepted that it was a serious offence, however, and conceded that the company had never said otherwise.  The applicant maintained, however, that there was a culture in the workplace where this action did occur.  He referred to the fact that he had raised with Shanahan in September 1994 the issue of employees being paid overtime when they had not worked and also another employee clocking off another employee.

He had conveyed this issue to Thomson but Thomson gave evidence that he had not taken up the matter with the respondent in the period between September and November 1994.  Shanahan gave evidence that when the matter was raised by the applicant in September he had investigated the allegations and had found that they had not been substantiated.  The matter that the applicant had raised in September 1994 was not raised by him at the meeting on 8 November 1994.

The applicant in his first affidavit referred to another incident involving Mr Kodnik (Kodnik).  Kodnik gave evidence denying the incident.  In fact the Court heard evidence from three team leaders of the respondent, Messrs Brown, Kodnik and Berry.  Messrs Kodnik and Brown said that they had heard rumours or gossip from time to time that the practice of employees clocking off other employees had occurred.  Kodnik also said that he had made his position clear that it was a dismissible offence.

Berry gave evidence that in the period that he had worked at that plant he had not heard rumours to the effect that it occurred.  His affidavit evidence indicates that he had heard such rumours but I accept his evidence given in Court in relation to the matter.  The Court therefore accepts the respondent's evidence that the practice of clocking off of another employee's card was regarded within the workplace as a dismissible offence and was so regarded by the company.  The Court also finds that there was in fact no practice condoned within the respondent that this practice could occur. 

The respondent, faced with an admission that the applicant had committed what it regarded as a serious act of misconduct, investigated the matters of exculpation raised by the applicant.  It found them not substantiated and proceeded to terminate his employment.  I find that on the basis of the evidence the respondent did have a valid reason to terminate his employment.  The respondent has discharged its onus of proof on this issue.

Was the termination in breach of section 170DE(2) of the Act?

The applicant carries the onus of proof under section 170EDA CD(6) that the termination, whilst for a valid reason, was in breach of the Act under section 170DE(2). The essential contest here was that given the applicant's length of service and the fact that there was a culture and practice within the workplace of clocking on of other people's cards, it was harsh to terminate the applicant's employment. It was also said by the representative of the applicant that the procedure of investigating the incident was procedurally harsh.

The representative for the applicant pointed to the fact that the respondent's own witnesses pointed to rumours or gossip of a practice of clocking on other employee's cards.  She attacked the investigation as inadequate and unlikely to turn up the relevant evidence because employees questioned would not be in a position to volunteer truthful information for fear of adverse consequences by the respondent.  The applicant's own evidence was that he did not wish to betray those he represented as the shop steward by providing details of their breaches to the respondent in the meeting on 8 November.

The respondent's evidence in relation to the investigation was, however, that it was made clear to all employees in the course of the interviews that the investigation was not to be used for any other purposes but to consider the matter raised by the applicant. 

While it is easy to be critical after the event, I am satisfied that the respondent's investigation was proper and reasonable.  I draw an inference against the applicant that he has in fact called no direct evidence that the alleged practice in fact existed in the workplace or indeed that the employees were intimidated as alleged by him.  As Leevers said in his evidence:

In a workplace there are a lot of rumours but only some have substance.

I am not satisfied that, had the practice occurred as alleged by the applicant, he could not have brought before this Court admissible evidence to support the practice.  I therefore reject the argument that there was any procedural harshness associated with this investigation or that it was unreasonable to require the applicant to bring forward some substantial evidence in support of his assertion that the culture existed.  I also reject the alternative suggested investigation raised by the representative for the applicant which was to use in effect a secret ballot of the employees.  The evidence of the lack of literacy of the work force was such that this was not a realistic option. 

The requirements of both section 170DC and 170DE of the Act must be applied in the context of a workplace and in a practical manner in a commercial and industrial environment. While the requirements that an employee be entitled to answer any allegations and the requirement that an employer undertake a proper investigation before undertaking to dismiss an employee are substantive, there is a degree of latitude allowed to employees in the commercial and industrial environment in which an employer operates.

Here the respondent has complied with section 170DC of the Act by undertaking a proper investigation and giving the applicant and his union representative an opportunity to put matters to the employer before decision. The employer has also undertaken a reasonable investigation and I find that reason section 170DE(2) has not been breached.

In a recent decision Wilcox CJ (Gibson v Bosmak Pty Ltd (Industrial Relations Court of Australia, Wilcox CJ, 5 May 1995)) said that in considering whether a termination was unreasonable it must be looked at from the point of view of both the employer and the employee.  Here the employer took the view that its rule that clocking of another person's time-card justified instant dismissal was an important rule.  This was not an unreasonable attitude for the employer to take.  In the decision of Gregory v Philip Morris Limited (1988) 80 ALR 455, at 457 Jenkinson J was considering the word "unreasonable" and he said it should be understood in the sense -

which it has come to bear in many legal contexts when applied in characterisation of human conduct - that is, found to conform to a course of conduct which a reasonable person would, in the judgment of a tribunal of fact, have adopted in all the circumstances.

He went on to say that the question is ultimately one of fact and:

This question requires a determination by reference to moral values and prudential considerations current in the community of what the tribunal of fact thinks a reasonable employer in the circumstances would have decided to do at the time when the respondent terminated the appellant's employment.

In a decision Construction, Forestry, Mining and Energy Union FEDFA Vic Branch v Kodak (Australasia) Pty Limited, (Industrial Relations Court of Australia, Murphy JR, 21 December 1994) I considered what Jenkinson J had said and said this:

When making a judgment as to whether a termination is harsh, etc, the Court is required to look at the situation from the viewpoint of the reasonable employer in the circumstances.  What the employer has in fact done is a matter which cannot be ignored and may, in my opinion, be given appropriate weight. 

For example, it could be said that a rushed, capricious or unorthodox decision may be more likely to be seen as harsh, etc, than one taken after due investigation and deliberation at a suitable senior level within the employer.

Again it is not inappropriate, in my opinion, to have regard to the employer's "corporate culture".  Each employer will have a different approach to actions taken by its employees.  Some may be more lenient than others;  some may demand of their employees higher standards and may be less inclined to excuse breaches of those standards than others.  Provided that those standards themselves are not, unreasonable, it is not for the Court to ignore them.  There was evidence that the respondent aspired to higher standards.

I have also had regard to the decision of Catalano v City of Armadale (1989) 69 W.A.I.G. 2782, where Commissioner Fielding found that the action of an employee clocking on another employee's card, which was one of four actions relied on by the employer in that case, was of itself a matter of gross misconduct such as to justify instant dismissal. 

Here, having regard to the fact that there was a proper investigation and that neither as a result of that investigation nor subsequently has any evidence been advanced by the applicant that there was a culture within the respondent that a practice of clocking on other employees cards did exist, I am not satisfied that the applicant has discharged his onus of proof that his termination was in breach of the requirements of section 170DE(2) of the Act. I propose to dismiss the application.

The order of the court

The application is dismissed.

I certify that this and the preceding eight pages are a true copy of the Reasons for Judgment of Judicial Registrar Murphy.

Appearances

Date of Hearing:        12 June 1995

Date of Judgment:     12 June 1995