Schaale, B. v Hoechst Australia Ltd
[1993] FCA 165
•29 MARCH 1993
Re: BODO SCHAALE
And: HOECHST AUSTRALIA LIMITED
No. V I87 of 1991
FED No. 165
Number of pages - 12
Industrial Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)
CATCHWORDS
Industrial Law - breach of award - termination of employment - unauthorised entry to plant - whether adequate investigation - whether penalty of termination disproportionate - whether harsh, unuust or unreasonable.
Gregory v Philip Morris Ltd (1988) 80 ALR 455
Wheeler v Philip Morris Ltd (1989) 97 ALR 283
HEARING
MELBOURNE, 25-29 January 1993
#DATE 29:3:1993
Counsel for the applicant: Mr J. Wallace
Solicitor for the applicant: Taylor and Scott by their agents
Ryan Carlisle Needham Thomas
Counsel for the respondent: Mr T. Ginnane
Solicitor for the respondent: Freehill, Hollingdale and Page
ORDER
1. Declare that the termination by the respondent of the employment
of the applicant on 15 August 1991 was harsh, unjust and unreasonable and a breach of cl.6(d)(vi) of the Metal Industry Award 1984 Part 1.
2. Further hearing of the application is adjourned.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
JUDGE1
HEEREY J. On 15 August 1991 the applicant Bodo Schaale (Mr Schaale) was summarily dismissed from his employment by the respondent. He claims that the termination of his employment was harsh, unjust and unreasonable and therefore a breach of cl.6(d)(vi) of the Metal Industry Award 1984 - Part 1 which it is accepted bound the parties.
The respondent operates a chemical factory in Kororit Creek Road, Altona. Mr Schaale is a fitter who had been employed by the respondent for about 10 years. At the time his employment was terminated he was aged 48. In 1990 there had been a serious industrial dispute at the respondent's plant involving a strike which lasted for some weeks and a picket line with violent confrontations which led to litigation in the Supreme Court of Victoria. It would seem that tensions persisted into the following year.
On the evening of Wednesday 14 August 1991 the applicant was due to commence work at 7.00pm as part of the maintenance night shift. During the day a dispute arose concerning an issue over training. Three members of the day shift resolved to protest by having a sit-in in the engineering workshop at the plant.
The respondent's management decided that the night shift maintenance employees should not be admitted as that would only increase the numbers at the sit-in. Added security measures were taken to ensure unauthorised persons did not gain entry to the plant. The main gates were locked at the gatehouse. At the main gates there is a tunnel through which employees pass with clock cards at the side. The gate at the end of this tunnel was locked, a security guard stationed behind it and another security officer positioned in front of the change room. The following is a copy of a sketch plan (not to scale) which will facilitate understanding of the layout at the entrance to the plant.
In addition to the applicant a Mr George Bitzer was rostered to begin work on the maintenance shift that evening. Mr Bitzer arrived at about 6.30pm and was met by management representatives who explained that due to the existing dispute he was not to enter the plant and that he would be paid for his rostered hours of work. An organiser of the Metals and Engineering Workers Union became involved in the discussion. While this conversation was going on Mr Schaale approached. The plant engineering manager Mr Gavin Clarke called out for him to stop but he ignored this request and continued to walk at a very brisk pace towards the change room. Mr Clarke again called out, saying that he could not go into the change room. The security officer at the door to the change room misunderstood a signal from Mr Clarke and allowed Mr Schaale to enter. No attempt was made to follow Mr Schaale as Mr Clarke assumed that he would have to leave through the same door. Mr Clarke understood that all available entrances to the plant were locked and patrolled.
However Mr Schaale did not reappear from the change room. A search of the room failed to reveal him. A short time later the maintenance shift leader on duty in the workshop area advised by radio that Mr Schaale had appeared amongst the employees engaged in the sit-in in the workshop about 170 metres inside the plant from the front gate.
Mr Schaale's account given in evidence is that he arrived at the plant at about 6.40pm and went straight to the change room. He was not aware of any call for him to stop. He found the door of the change room locked and a security guard outside. He asked the security guard to open the door so that he could start work at 7.00pm. The guard agreed and opened the door. He changed into his overalls and went back to the entry door but found it locked. He looked through the glass but the guard was gone. He then went to the door marked 2, which was not locked. He left through that door and tried to get back to the gatehouse through another gate marked 3 but found that locked. He then went around the side of the change room past the canteen to another gate marked 5 which is in a wire fence about two metres high. He said that this gate is normally closed by means of a padlock and chain although in the past he had noticed that it was on occasions open. He found the padlock was not locked and he was able to go through the gate and into the plant. He realised that the gate should have been locked and once through he locked it.
I reject this account. I find that gate 5 was at all times locked and that Mr Schaale gained entry into the plant by climbing on a mobile garbage trolley which was near the fence and clambering over the fence. There was evidence of some slight damage to the wire at the top of the fence and also a foot mark on top of the garbage trolley. A number of security officers gave evidence that they had patrolled the fence during the day and gate 5 had been locked at all times.
The sit-in continued until about 12.30am when all left the site. The police had been called during the course of the evening.
The respondent's chief engineer Mr Ian Gilmore was present on the evening and he took responsibility for investigating the incident. On that evening he inspected the scene and found the damage to the fence and foot print on the garbage trolley. He arranged for statements to be taken from the maintenance supervisors and the following morning at about 11.45am conducted an interview with Mr Schaale, this having been arranged the previous night.
The interview was conducted by the respondent's Human Resources Manager Mr Charles Brass in company with Mr Gilmore. Mr Christopher Cliffe, a MEWU Shop Steward, was also present. The interview commenced with Mr Brass saying:
"Bodo, this is a fairly serious matter we want to talk about. It is for that reason that we have a stenographer here, and it is for that reason that we are going to do this fairly formally, but it is important that formality does not get in the way of getting to the facts of the matter. We want to talk about the events that occurred last night on this site, and particularly your involvement on this site between 6.30 and 7.00pm last night. Can you tell me when you arrived here last night?"
The applicant answered "Twenty to 7 maybe." Mr Brass continued:
"Can you perhaps tell us in your own words what happened? It is that time period that is of interest to us."
Mr Schaale then proceeded to give an account of entry to the plant through an unlocked gate as mentioned above. After the interview had proceeded for some time Mr Cliffe protested that the interview:
"... seems to be turning into more a cross examination type of police enquiry. What I imagined it would be, would be a normal enquiry has not been happening. I mean I know that the assumption being made is that somebody has broken into the plant, and I know Bodo wouldn't do that."
Mr Brass then said:
"There are a number of other people who were here last night who have made statements to the company about what took place. What we are attempting to do is to establish from Bodo ..."
Mr Cliffe then objected:
"I just wouldn't want to see it turn into a cross examination. He has made a fairly clear statement."
After some further discussion Mr Brass said to Mr Schaale that he had been "very forthcoming" but that:
"what I would like to do if it is OK with you I have a few more things I would like to ask. And then perhaps we can get into where there are differences between what you are saying and what other people are saying and see what we can sort out."
Mr Cliffe protested that that was:
"going to be an interrogation".
Mr Cliffe pointed out that the applicant had some health problems. Mr Brass said to the applicant:
"Let me put the position in light of what Chris has said very clearly. Hoechst has reason to believe that you violated the security of the site last night, and if that were proven to be true, we would be asking you to show cause why you should not be instantly dismissed for such a violation. So what we are attempting to do here is to establish your version of what went on so we can establish whether or not a violation occurred involving security to the place last night."
Some time later Mr Brass asked him:
"So you did not jump the fence."
To which Mr Schaale said:
"Of course not - why should I, the gate is open."
When the interview resumed after a short break Mr Brass said:
"Bodo, the evidence from a number of sources does not stack up against the story that you have given us. So what took place last night? It is the belief of Hoechst that you deliberately and consciously breached the Hoechst security last night by jumping the fence to enter the plant. And as all of us in this room acknowledged early this morning, such behaviour is unacceptable and for that reason I am giving you official notification that effective immediately, as a result of that breach of security your appointment with Hoechst Australia is hereby terminated. This is in accordance with cl.6(d)v of your award."
On the same day Mr Schaale was given a letter signed by Mr Brass in the following terms:
"Dear Mr Schaale,
This letter confirms that in accordance with cl.6(d)(v) of the Metal Industry Award your employment with Hoechst Australia Limited was terminated at 12.30pm on Thursday 15 August 1991.
After a thorough investigation we have determined that you wilfully breached company policies and site rules which you are well aware. Such conduct is unacceptable and warrants summary dismissal. Your final payment is enclosed."
Since the termination Mr Schaale has been unemployed. He and his wife receive Social Security payments of $502 per fortnight together with approximately $100 per week by way of subscription from his workmates. His wages during his employment were $840 gross per week. Since his termination he has not received the benefit of payments equivalent to 8.7% of his gross earnings which had been paid on his behalf by the respondent into a superannuation fund and he has not been able to make payments equivalent to 7.5% of his earnings on his own behalf into that fund.
Counsel for the respondent formally reserved the right to challenge the correctness of Gregory v Philip Morris Ltd (1988) 80 ALR 455 at an appellate level. The hearing proceeded on the basis that I would make a finding as to whether a breach of the award had occurred and adjourn questions of penalty and damages for a further hearing. Procedural Issues
It would be harsh, unjust and unreasonable for an employer to dismiss an employee summarily on the ground of serious misconduct without taking reasonable steps to investigate those allegations and give the employee a fair chance of answering them: see Gregory at 471, Wheeler v Philip Morris Ltd (1989) 97 ALR 283 at 306.
In my opinion the respondent's conduct in this regard did not breach the requirements of the award. The allegation against Mr Schaale was a clear and simple one. Did he breach security by climbing over the fence? The award has to operate "in a practical way in a commercial and industrial environment"; Gregory at 471. Employers are not required to have the skills of police investigators or lawyers. By inspecting the site of the alleged entry and taking statements from potential witnesses it seems to me the respondent acted quite reasonably. In the interview on the following morning the allegation was put very clearly to Mr Schaale and he persisted in an account which the respondent was reasonably entitled to reject.
The Truth of the Allegation
27. As I have already said I am quite satisfied that Mr Schaale did in fact enter the site in an unlawful manner by climbing over the fence. Appropriate Penalty
Summary dismissal of an employee, especially one of long standing, will often have a calamitous effect on the individual concerned. That in itself of course is not enough to establish a contravention of the award. In the words of Jenkinson J in Gregory at 462:
"It is in my opinion only a termination which it is harsh of the employer to impose, as well as being harsh in its effect on the employee, that contravenes the sub-clause. And it is only a termination which it is unjust of the employer to impose, as well as working injustice to the employee that effects such a contravention."
In the present case the respondent led evidence which stressed the importance of security for its plant. In particular, there was a real fear of deliberate damage or sabotage by organisations opposed to the kind of business the respondent carries on. The manufacturing operations of the respondent involve potential danger. In the event of an emergency such as fire or explosion it is essential that every person on the premises can be accounted for.
All this may be readily accepted, but the actions of Mr Schaale which led to his termination did not pose any such threats to the respondent. His actions I think are only explicable on the basis that on his arrival at the plant he learned, in some way not explicitly disclosed by the evidence, of the existence of the sit-in and made a spontaneous decision to get into the plant and join it. That being so, his unauthorised entry to the plant and breach of security are part and parcel of his participation in a form of industrial action. That industrial action was, at least in the context of the difficult history of the respondent, a rather low level one. It certainly created inconvenience and disruption, but there is no suggestion of any physical damage to the plant or any significant financial loss.
On the finding I make the applicant persisted in a false explanation of his entry to the plant. That aspect however does not seem to have been explicitly relied upon by the respondent and properly so in my opinion. Mr Schaale's work did not involve the holding of a position of trust. If his objective conduct did not warrant termination then I do not think the fact that he told lies about it alters the position.
In the final analysis I think the termination was harsh, unjust and unreasonable, because Mr Schaale's conduct should not be viewed simply as the isolated act of climbing over the fence but as part of his participation in a comparatively mild form of industrial action which caused no substantial loss or threat of loss to the respondent. Therefore it seems to me the sanction of termination with its grave financial consequences to the applicant was a disproportionate and excessive consequence.
I will therefore make a declaration that the termination by the respondent of the employment of the applicant on 15 August 1991 was harsh, unjust and unreasonable and that the respondent has thereby breached cl 6(d)(vi) of the Metal Industry Award 1984 - Part 1. The further hearing of the application will be adjourned for further directions.
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