Roger William Marke v G. and K. O'Connor Pty Ltd

[1995] IRCA 11

CATCHWORDS

INDUSTRIAL LAW - Termination of employment - failure to follow direction affecting safety of employees -countervailing factors - no valid reason for termination - reinstatement not sought - mitigation of loss - compensation.

Industrial Relations Act 1988, s.170EE

ROGER WILLIAM MARKE -v- G. & K. O’CONNOR PTY LTD

NO. VI 1097 of 1994

Before:     STAINDL JR

Place:       MELBOURNE

Date:       18 JANUARY 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 1097 of 1994

BETWEEN:

ROGER WILLIAM MARKE
Applicant

AND

G. & K. O’CONNOR PTY LTD
Respondent

MINUTES OF ORDER

18 January1995  Judicial Registrar Staindl

THE COURT DECLARES:

1. That the termination of employment of the applicant contravened Division 3 Part VIA of the Industrial Relations Act 1988;

AND THE COURT ORDERS:

1. That the respondent pay to the applicant compensation of $10,560.00.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 1097 of 1994

BETWEEN:

ROGER WILLIAM MARKE
Applicant

AND

G. & K. O’Connor
Respondent

REASONS FOR JUDGMENT

18 January 1995  Judicial Registrar Staindl

G. & K. O’Connor Pty Ltd runs an abattoirs at Pakenham.  The overwhelming majority of its product is exported.  Some of the meat to be exported is frozen and stored in a large freezer.  Thereafter, it is loaded into large containers for export.  It is the operation of these areas, involving the freezing and dispatching of meat, which is critically in issue in these proceedings.

Roger Marke (“the applicant”) commenced working at the abattoirs in 1988.  In about early 1991 he was, promoted to the position of “load out foreman” or “load out manager”.  He had responsibility for ensuring that the meat which had been processed at the plant was frozen or chilled, and was then dispatched correctly.  On any particular day the abattoirs would process between 400 to 750 head of cattle depending to some extent on the season.  More than 300 people were employed in such operations.  The area for which the applicant had responsibility was a very busy area and it was subject to considerable pressure.

It is obvious that frozen meat should not be left out of the freezer for too long.  The meat was stored at -40^oC in the freezer and was packed into cardboard cartons.  After 2-3 hours outside the freezer moisture would condense on these cartons and the meat would have to be repacked.  If meat was left outside the freezer for more lengthy periods it ran the risk of thawing.  It was primarily the applicant’s responsibility to ensure that meat was not left out of the freezer for too long.

Shipping containers were scheduled to be loaded at regular intervals.  It was important that their loading not be delayed unduly because otherwise problems could occur at the wharf due to the late arrival of a container.  The applicant oversaw these operations.

The applicant’s position can be seen as being a very responsible one.  The evidence indicates that he was a most dedicated and responsible employee who performed his duties to a high standard.

On 4 July 1994 the applicant’s employment was terminated by Mr Gary O’Connor, a co-owner of the abattoirs.  Prior to dealing with the circumstances of the termination it is necessary to describe in detail one aspect of the operations in the freezer/load out area.

The freezer at the abattoirs was only installed in about 1987.  From this time on until 29 march 1994 a gas fork lift was used to take the product into and out of the freezer.  The freezer was a somewhat confined area, although estimates of its size varied considerably.  For some time prior to March 1994 there had been concern about the use of a gas fork lift in such a confined area and the possible build up of noxious fumes.  It was for this reason that an electric fork lift was purchased in March 1994.  From then on it was understood that the electric fork lift was to be used primarily inside the freezer.  A further reason for the gas fork lift not being used consistently outside the freezer related to its lack of power.  On some occasions containers were loaded directly by fork lift, but using an attachment known as a “palletiser”  On my understanding of the evidence this attachment allowed a pallet of the cartons of meat to be carried into a container by fork lift:  the pallet could then be removed by the fork lift from underneath the cartons of meat.  This process involved the use of considerable power by the fork lift, and the electric fork lift was incapable of doing this.

There was a further constraint on the use of the electric fork lift.  After being used in the freezer for 2-3 hours its battery would run down and would require recharging.  Although it would usually be recharged during breaks in work, it occurred regularly that a fork lift was required in the freezer whiles the electric fork lift was being recharged.  From 29 March 1994 until 1 July 1994 a gas fork lift would be used in the freezer on these occasions.

Incident Leading To Termination Of Employment

On Friday 1 July 1994 Gary O’Connor heard on the radio that someone in Shepparton had been killed arising out of the use of a non-electric fork lift in a cool store.  He considered that the situation so described was similar to that existing at the abattoirs freezer.  Accordingly he resolved to do something about it immediately.  It is agreed between the parties that a conversation occurred between Gary O’Connor and the applicant over the use of the gas fork lift in the freezer on the morning of 1 July 1994.

There is vigorous dispute about the content of such discussion.  In essence, Gary O’Connor stated that he told the applicant not to use the gas fork lift in the freezer “under any circumstances”.  The applicant stated that he was told not to use the gas fork lift in the freezer “unless absolutely necessary”.  I find that this conversation occurred early on 1 July 1994 shortly after Gary O’Connor arrived at work and that he did in fact forbid the use of the gas fork lift in the freezer without any qualification on the direction.  I am not satisfied that he qualified it by the rider “unless absolutely necessary”.  If this had been his direction it would have been little change to the existing practice.  In light of Gary O’Connor’s concern at the report of the death in Shepparton this is unlikely.  Furthermore Gary O’Connor’s reaction on Monday, 4 July 1994, to the information that a gas fork lift was used in the freezer is consistent with him giving such a direction.  He was very upset and angry at this news and it was the reason for terminating the employment of a valued employee.

However I am not satisfied that Gary O’Connor stated to the applicant that the gas fork lift was not to be used under any circumstances.  In my view the evidence of Peter Allen, who was present when the applicant’s employment was terminated on 4 July 1994 is consistent with Gary O’Connor asking the applicant why he had used the gas fork lift in the freezer.  However, Mr Allen did not say that Gary O’Connor had said to the applicant that the gas fork lift was not to be used in the freezer under any circumstances.  Rather Gary O’Connor had said that he had given a specific instruction to the applicant not to so use the gas fork lift.

AT the time of the discussion between Gary O’Connor and the applicant, Gary O’Connor was unaware that a stock take was being conducted that day.  The stock-take had a great impact on the applicant’s duties.  Some 3 or 4 auditors were present throughout the day to oversee the stock-take.  It involved the counting of stock both inside and outside the freezer as well as in other areas.  Pallets had to be moved from inside the freezer to enable stock to be properly counted.  It was a day of heavy use of the electric fork lift.  Inevitably the battery on the electric fork lift ran down.  The gas fork lift was then used inside the freezer.  Clearly, the applicant knew of the use of the gas fork lift but said it was approved on his understanding of Gary O’Connor’s direction to him.

The applicant and others worked a very long day on 1 July 1994.  They started at about 6:00am and did not finish until about 9:00pm.  Some of this time was spent inside the freezer in very uncomfortable conditions, although the time actually spent inside the freezer on any one occasion was necessarily short.  The applicant gave evidence that he monitored the employees working in the area by asking them how they were feeling.  I do accept that he did this in a general fashion, although perhaps not as often as the circumstances required.

At the hearing of this matter there was indirect evidence that two employees were ill as a result of working that day.  In particular one employee, Adam O’Brien, was said to have sat in his car for 2 hours following the conclusion of work before he felt well enough to drive home.  However, two points need to be made about this evidence.  Firstly, I do not have any evidence that the illness of the two employees was caused by gas fumes and secondly there was evidence that on other occasions people felt ill after they had worked in the freezer.  In relation to this second point, there was no evidence to suggest one way or the other as to whether on those occasions a gas fork lift had been used in the freezer.

On Monday, 4 July 1994 Gary O’Connor learnt that the two employees had felt ill as a result of their work.  He was told that the gas fork lift had been used in the freezer on 1 July 1994.  He agreed that he was very upset about it.  He summoned the applicant to his office and asked whether he had used the gas fork lift in the freezer.  The applicant replied that he had.  When asked for the reason the applicant stated that he was sorry but also said that Kevin O’Connor (Gary O’Connor’s brother and co-owner of the abattoirs) had told him to get the job done.  No further inquiry was made at this time as to whether Kevin O’Connor had in fact made this statement.  The applicant was then dismissed from his employment although only actually received his termination pay on Wednesday 13 July 1994 following his return from a scheduled holiday in Sydney.  He was then paid two weeks pay in lieu of notice.

In recent years the company has made great efforts to improve the standard of occupational health and safety at the abattoirs.  It has received recognition for its efforts in this regard in that it was awarded the Prime Minister’s prize.  Such efforts are commendable.  To be effective health and safety standards must be enforced by an employer.  Any breach by an employee of such standards needs to be dealt with by an employer.  It may be that where an employer has knowledge of a potential health and safety hazard or fails to enforce relevant standards then that employer may face criminal liability under the provision of the Occupational Health and Safety Act (Vic.).  Accordingly I regard the failure by the applicant to follow Gary O’Connor’s directions as a serious matter.  If the respondent’s version were to be fully accepted, then in my view the circumstances would justify summary dismissal.

Countervailing Considerations

However, there are two matters in this case which favour the applicant.  The first is a direction allegedly given to the applicant by Mr Kevin O’Connor and the second is the involvement of Mr Peter Allen, the plant manager, in the stock-take.  I deal with the first of these.

The applicant gave evidence that through the course of the day on 1 July 1994 he was told by Kevin O’Connor to “Get the fucking job done” and that he was “not paying overtime”.  In evidence in chief the applicant named two other persons who were present during this conversation.  One of these was Mr Kerry O’Brien, a person who held a senior administrative position at the abattoirs.  The applicant also gave evidence that just prior to this conversation he had been told that the meat inspectors from the Department of Primary Industry were going on strike on the Monday.  Because of the requirements that an inspector be present when the freezer was open it would have been difficult, if not impossible, for the stock-take to take place on the Monday.

Mr Kevin O’Connor denied this conversation.  However, on balance I find that it did occur, although perhaps not in the exact terms as alleged.  I am satisfied that Kevin O’Connor said words to the effect of “Get the job done” although I am not satisfied that he made reference to paying overtime.  I have this last reservation because it did not appear from the evidence that Kevin O’Connor had a particular concern about the paying of overtime as it was a relatively common occurrence at the abattoirs.  My finding that Kevin O’Connor told the applicant to get the job done is consistent with what occurred on that day and on the following Monday morning.  During the course of the day of the stock-take Kevin O’Connor acknowledged that he had been told that “they were behind” when referring to the progress of the stock-take.  He also had knowledge on that day of the likely industrial action by the meat inspectors.  In these circumstances it is not unlikely that he told the applicant simply to get the job done, although it may not have been a matter to which he attached great importance at the time.

Furthermore, when the applicant was confronted on the Monday morning by Gary O’Connor with the fact that he had used the gas fork lift in the freezer he answered in part that he had been told by Kevin O’Connor to get it done.  In my view it is highly unlikely that the applicant concocted this in the short time between being told by Peter Allen on the Monday morning that Gary O’Connor wanted to see him and this conversation.  I further note the applicant’s evidence that Kerry O’Brien was present during the conversation between the applicant and Kevin O’Connor.  Mr O’Brien was still employed by the respondent at the time of the hearing and there was no apparent difficulty in calling him as a witness.  On the basis of Jones -v- Dunkel 101 CLR 298 it can be said that his evidence would not have helped the respondent’s case.

The second matter which is of relevance to the applicant’s behaviour is the involvement of Peter Allen in the stock-take.  As previously noted Mr Allen was the plant manager and was the applicant’s supervisor.  On 1 July 1994 he visited the freezer/load out area frequently, and through the day spent some hours there.  He gave evidence that he saw the gas fork lift in use in the freezer but knew of no prohibition on such use.  The applicant was criticised for not informing Mr Allen of the direction but said that he thought Mr Allen would have been informed.  In fact Mr Allen gave evidence that he would normally be involved in and informed of any significant changes involving health and safety considerations.  I am of the view that it was reasonable of the applicant to assume that Mr Allen knew of the direction and that his presence whilst the gas fork lift was being used in the freezer amounted to an acceptance by management of this practice in the circumstances existing that day.  The circumstances of this case emphasise the need for thorough and efficient communication between management and those expected to carry out the policies of the employer.

The applicant was placed in an invidious position.  On the one hand he had been told not to use the gas fork lift in the freezer.  On the other hand he was under great pressure on the day of the stock-take.  This pressure was intensified by Kevin O’Connor’s direction to him and by the industrial action on the part of the meat inspectors planned for the following Monday.  As a diligent and responsible employee the applicant was concerned to complete the stock-take that day.  This could not be done without using the gas fork lift in the freezer and this is what he allowed to occur.  Accordingly I find that the respondent had a valid reason for dismissing the applicant, but that in the circumstances of this case the dismissal was harsh.

Claim For Reasonable Notice

The applicant amended his application to include a claim for damages at common law for wrongful dismissal.  He claimed that he was entitled to reasonable notice in order to terminate his contract of employment and that in his circumstances reasonable notice was 6 months.

The respondent submitted that reasonable notice was only one month for the applicant.  It further submitted that the power of a judicial registrar is limited to awarding an amount of no more than $10,000.00 pursuant to s.376 of the Act.  Given the view that I have come to on the question of compensation I find it unnecessary to decide this issue.  In my view the appropriate period of notice for the applicant would have been 3 months.  This would be $11,050.00 less the amount of $1,540.00 already paid to the applicant, thus giving an amount of less than $10,000.00.  However, the award of compensation takes into account the period of notice to which the applicant was entitled.

Remedy

The applicant did not seek reinstatement.  He gave evidence that he had looked for work within his geographic area but that job opportunities were very limited.  Accordingly he decided to try and run his own business, something that he had previously considered.  He replied to a newspaper advertisement for the sale of a mixed business in “the Age” of 23 July 1994.

He signed a contract for the purchase of the business in about early August 1994.  He took it over on 2 September 1994 and has been running it since that time.  However it has not been making any money and he does not expect it to be profitable within the next 12 months.  Although there was some cross-examination directed to showing that the applicant had paid personal expenses out of the business proceeds, in my view the evidence did not establish this.

Given the applicant’s circumstances and attitude towards reinstatement following his dismissal I find that reinstatement is impracticable.  In making such a finding I also take into account the attitude of Gary O’Connor to the applicant since his dismissal and what appeared to me to be an attitude of antipathy towards the applicant.

Mitigation of Loss

The parties approached the question of compensation on the assumption that the applicant had a duty to mitigate his loss. It seems to me that the principles relating to mitigation in the circumstances of this legislation may well be different than the well-known duty to mitigate at common law. At common law orders for reinstatement (or specific performance in the language of the common law) were rare. However under s.170EE of the Industrial Relations Act reinstatement should be regarded as the primary remedy. Accordingly different considerations may well apply when considering any duty to mitigate one’s loss.

In the present case, however, I am prepared to approach this issue on the basis that the applicant had a duty to mitigate his loss in the common law sense.  I approach it in this way because the applicant does not seek reinstatement, although this approach may not be the correct approach in all such cases.

It is clear that the onus of proof on the question of mitigation of loss is on the respondent.  It is up to the respondent to show that the applicant ought reasonably have taken certain mitigating steps.  In this context the standard of reasonableness is not high in view of the fact that the respondent is the admitted wrongdoer.  The following passage of Lord Macmillan in Banco de Portugal -v- Waterlow [1932] A.C. 452, 506 is quoted with approval in McGregor on Damages (14th Ed. Sweet & Maxwell 1980, p.169):

“Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty.  It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well form those who have themselves created the emergency.  The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken.”

On the evidence I am satisfied that the applicant has not failed to mitigate his loss.

Compensation

The applicant’s salary at the time of termination was $770.00 per week with $80.00 per week being contributed to a superannuation fund on his behalf.  This equates to a total amount of $44,200.00 per year.  The Act limits compensation to the amount of remuneration the employee would have received or would have been likely to have received in the 6 month period following the termination.  That amount is $22,100.00 although it needs to be reduced by the two weeks pay in lieu of notice received by the applicant - $1,540.00, giving $20,560.00.

However in my view an allowance must be made for the applicant building up his equity in his mixed business.  The purchase and operation of this business is the reason why the applicant did not seek reinstatement.  The amount of such allowance is necessarily imprecise but in the circumstances of this case I allow $10,000.00.  The balance due to the applicant from the respondent is therefore $10,560.00 and there will be an order to this effect.

I certify that this and the preceding thirteen (13) pages are a true copy of the reasons for judgment of Judicial Registrar Staindl.

Associate:

Dated:               

Solicitors for the applicant: Counsel for the applicant:	Slater & Gordon Mr Bourke
Solicitor for the respondent: Counsel for the respondent:	Wiswoulds Mr Lacy
Dates of hearing:	6 - 9 December 1994
Date of Judgment:	18 January 1995