Suares v Commonwealth Bank of Australia
[1996] IRCA 170
•10 May 1996
DECISION NO: 170/96
C A T C H W O R D S
INDUSTRIAL LAW -TERMINATION OF EMPLOYMENT - complaint of UNFAIR TERMINATION - whether failure to comply with bank policy constituted SERIOUS MISCONDUCT or a VALID REASON - PROCEDURAL FAIRNESS
Industrial Relations Act 1988 ss.170DB, 170DC, 170DE
CASES:Sangwin v Imogen Pty Ltd (trading as Carleton Custom Upholstery) (8 March 1996, von Doussa J, unreported)
Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224
Boland v Maningrida Council Inc. (24 April 1996, Wilcox CJ, unreported).
Wyndham Lodge Nursing Home Inc. v Reader (15 April 1996, Wilcox CJ, Ryan and North JJ, unreported)
VIVIEN SUARES -v- COMMONWEALTH BANK OF AUSTRALIA
No. VI 2437 of 1995
Before: Judicial Registrar Murphy
Place: Melbourne (heard in Moe)
Date: 10 May 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 2437 of 1995
B E T W E E N :
VIVIEN SUARES
Applicant
AND
COMMONWEALTH BANK OF AUSTRALIA
Respondent
MINUTES OF ORDERS
Judicial Registrar Murphy 10 May 1996
THE COURT ORDERS:
The application is dismissed.
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 2437 of 1995
B E T W E E N :
VIVIEN SUARES
Applicant
AND
COMMONWEALTH BANK OF AUSTRALIA
Respondent
Before: Judicial Registrar Murphy
Place: Melbourne (heard in Moe)
Date: 10 May 1996
REASONS FOR JUDGMENT
In these proceedings pursuant to s170EA of the Industrial Relations Act (“the Act”), the applicant seeks reinstatement to her position as a central branch administration officer (“CBAO”), located at the Traralgon branch of the respondent. The proceedings arise out of the dismissal of the applicant on 30 March 1995 for issuing bank cheques for her personal use without providing same day cover.
The applicant’s work environment
In March 1995 the applicant had nearly ten years service with the State Bank of Victoria and from 1991 its successor, the respondent. She had risen through the junior ranks to reach the lowest level of supervisory rank.
At Traralgon the respondent’s banking operations are controlled from a central branch at 65 Franklin Street. The central branch manager (“CBM”) is Mr Allan Jackson. The main retail branch of the bank in the city is a couple of blocks away at 132 Franklin Street. A sub-branch is located at 65 Franklin Street. Tellers for the sub-branch report to work at 132 Franklin Street and attend at 65 Franklin Street shortly prior to bank opening hours.
The central branch office of the respondent consists of Mr Jackson and the applicant. It was first established in March 1994 when the respondent decided to decentralise a number of functions, particularly in the personnel and management areas, from Melbourne. The applicant’s duties were mainly in the personnel area: staffing, leave rosters, training schedules and pay-roll. She was also required to collate statistical information on sales and personnel, and perform other duties as directed by Mr Jackson.
Over the period December 1994 - January 1995 there was a “very severe staff shortage” at the Traralgon branch. One of the main supervisors was on leave and the applicant took it upon herself to perform her duties as well as her own CBAO duties. The applicant’s pattern of work over this period was that she would attend at 65 Franklin Street between 8.00 and 8.30 a.m. There she would deal with staffing issues for branches within the region, then at 9.15 a.m. she would walk to 132 Franklin Street and perform her relieving duties for the remainder of the day. She would usually cross the teller staff reporting for duty at 65 Franklin Street on her way to 132 Franklin Street. She would return to 65 Franklin Street late in the day.
The process for issuing bank cheques for staff
It is a cardinal rule within the respondent that the staff are not allowed to do their own banking. All staff transactions must be independently verified by a teller. The rule applies to staff bank cheques. Bank cheques are printed by a teller terminal in duplicate. The original is the cheque which is received by the customer. Its counterpart is known as a credit or voucher. When a bank cheque is raised, funds must be provided to cover that cheque. It is a rule of the bank that cover is to be provided on the date of issue of the bank cheque. When cover is provided, the voucher is encoded by the teller terminal to verify same. The voucher has provision for it to be initialled and stamped by the issuing teller, and this is done at that stage to verify the transaction. On the voucher there is provision for details of the purchaser of the bank cheque to be recorded. When the original cheque is received back by the bank and paid it is matched with its voucher and the transaction is complete. Staff at the respondent are allowed to prepare bank cheques for their personal use. Before the bank cheque is released from the bank’s custody they are required to provide the voucher to a teller so that the cash or withdrawal providing cover for the cheque can be processed into the bank’s system and the voucher encoded.
Issuing the disputed cheques
On Monday 9 January 1995 the applicant was working late and alone at 65 Franklin Street. She had activated a teller terminal to process some personnel related transactions. At 8.45p.m. she printed bank cheque number 024635 for $196.00 payable to the City of Morwell (“the first cheque”). The purchaser was described as “Viv rates instalment”. Cover for the cheque was provided on 10 January. On 12 January the original cheque was returned to the bank and paid. Transaction completed.
At 9.23p.m. on that same night the applicant printed bank cheque number 024636 for $380.00 payable to Ocean Breeze Flats (“the second cheque”). The purchaser was described as “Staff V. Suares”. The cheque was paid by the bank on 16 January 1995. Cover for the cheque was provided on 24 January 1995. Transaction completed.
On 16 January 1995 the applicant printed bank cheque number 024637 for $559.00 payable to Gasmart (“the third cheque”). The purchaser was described as “McKnight (applicant’s maiden name) staff”. Cover for the cheque was provided on 18 January and it was paid by the bank on 19 January. Transaction completed.
The cheques come to the respondent’s attention
“Around” 11 January 1995 Mr Jackson was looking for something that took him to the applicant’s desk. On the desk, sitting “clean, brand new” between the date block and a couple of other things was the credit voucher for the second cheque. It had not been encoded by the teller machine. He “shuddered”. Mr Jackson observed that there was no cash in the vicinity. In searching for whatever he had been looking for, and he had access to the applicant’s various cabinets, he did not locate any cash. The voucher was gone the next day. Mr Jackson copied the voucher and took it to 132 Franklin Street and checked the area of the bank where the voucher would be processed. He found that it had not been processed on the issue day. He later checked for 10 January and at intervals thereafter, and then went on leave around 20 January. At that time there was no record of cover being provided for the second cheque. During this period he also checked with the staff at 132 Franklin Street responsible for bank cheques, Carol Saunders and Jason Lowe. He was advised by them that they were following up regarding the provision of cover on the second cheque. He gave evidence that he observed a note “see (the applicant) regarding these bank cheques.... that cover had not been provided for”.
When Mr Jackson returned from leave in February he undertook a check of all bank cheque vouchers issued by the applicant in January. He then came up with the three bank cheques described above wherein the date of issue did not coincide with the date of the provision of cover. He also found a number of other bank cheques that had been issued by the applicant, in her capacity as CBAO, where there was what he described as an “issue irregularity”, in that the date of issue of the cheque did not coincide with the date that cover had been provided by way of a credit transfer from a bank administration account into the relevant bank cheque account. Mr Jackson said that the irregularities did not “raise any sort of doubts in my mind as the three previous cheques did”.
At no stage did Mr Jackson bring these matters to the attention of the applicant. He did not do so because of instructions that where there is a possible staff defalcation, the matter should be referred to his superior so that a proper investigation can be undertaken. Before taking this action Mr Jackson had to ensure that “he was certain that what I was investigating was what I thought it was”.
On 15 February 1995 Mr Jackson referred the matters that he had found in relation to the three cheques to his superiors at the Network Services Division of the respondent in Melbourne (Exhibit R9).
On 23 February, before the applicant was interviewed, Mr Jackson wrote to the manager of the Personnel Department in Melbourne (Exhibit R13). He referred to the incomplete investigation and praised the applicant. He said:
“I have no idea why she has issued these bank cheques without providing cover and will be most interested in her explanation....
If there is scope for leniency and compassion then I am asking for this to be given. I am totally happy to mark this slip-up down to it being just that - a slip up.
During the period of these cheques being written (Jan 9/16 1995) I know Viv was holding down both her job and (another) position and looking for numerous unlocated GLBE and Tellers’ Discrepancies.
I believe without any investigation data to the contrary, that Viv got herself into an overstretched position workwise, with the Branch and Group’s interests uppermost in her mind. I also believe that she just plain forgot to put the covering entries through, be it four times.
I am totally prepared to counsel Viv, monitor her performance and have her continue as my CBAO if that is at all possible.
I am very disappointed that appropriate care control (sic) was not exercised over Bank Cheque account by the Branch Manager. The slip up would have quickly been detected by him, brought to her attention as a procedural no no, and corrective action taken. She and we would not be in this position if correct procedures were followed.”
In his evidence Mr Jackson stated that when he wrote this his state of mind was that there may have been an innocent or a non-innocent explanation for what had happened. He stated that as a result of the investigation that occurred subsequently, he changed his view from his view at that time.
The applicant is interviewed
On 1 March the applicant was interviewed on tape by two investigators from the Victorian Branch. She received no forewarning as to the interview and was cautioned at the commencement of it. Before the interview she was advised that the interview related to her failure to provide cover for some bank cheques.
In the beginning of the interview the applicant appears confused as she attempted to recount the details of the various cheques. The tone of the interviewers was probing and at times rather sceptical of the responses being provided. While the investigators were unimpressed by her responses, the overall interview could not be impugned as oppressive or prejudicial. At the completion of the interview the applicant was advised that the investigators would be providing a report to the Personnel Department to allow it to make a decision as to the outcome of the matter. The applicant was invited to provide a further oral or written response. The applicant provided a hand-written explanation a couple of hours later which the investigators took back to Melbourne with them.
In the course of the interview the applicant said that the first two cheques were printed late at night while she was working back attending to her bank duties. She gave that as the reason why she was not able to provide cover at the time they were issued. The interview was broken while the investigators produced the teller rolls which confirmed this aspect of her story. There was then some discussion about the times that the applicant signed off from her duties and the applicant indicated that the attendance records would reveal that she signed off at about 6.30p.m. that night, but that she was working back to make up for some time lost while she attended an appointment in the morning. She said that Mr Jackson was aware of this arrangement. Mr Jackson did not give any evidence of such an arrangement.
Explanation for the first cheque
The applicant said that the first cheque was made up late in the evening. She said she did not take the cheque until the next morning, “which was when I paid for it”. She said she may have cashed a cheque or withdrawn money from a credit union account to pay for the cheque. In her written explanation the applicant said that the cheque was paid for by a partial withdrawal from her credit union and the balance from money provided by her. She said she processed it late at night as she had a lot on her mind workwise, and did not think anything of the matter as she was paying for the cheque the next morning.
In Court her explanation was different. She called her husband to say that the cheque was purchased on the day of his grandmother’s funeral. The council rates were overdue and needed to be paid. Mr Suares had attended at 65 Franklin Street on 10 January with $196.00 cash that he had retrieved from his sock drawer where he kept spare cash from his wage packet. The moneys had originally been intended to be used for a holiday later that month. He arrived at the counter. The applicant had been at the other branch. She was summoned by an officer of 65 Franklin Street and attended at 65 Franklin Street. There she took the money from her husband, retrieved the cheque from her desk, handed the cash to a teller, signed the cheque and the two of them left to take the cheque to the City of Morwell offices. The applicant’s evidence was that the couple had later made a withdrawal from a credit union to fund their holiday and to replace the moneys Mr Suares had originally saved for that purpose. The applicant’s different explanation in Court was explained by her as a result of a better recollection following a discussion with her husband.
Explanation for the second cheque
In the interview the applicant could not give any precise details of this cheque. Her initial response was that the credit voucher had fallen behind a teller’s slot. As the interview went on she explained that the cheque was to secure some holiday flats for a friend. She had been paid cash by her friend Cathy Reside, and had sent off the cheque but couldn’t explain why cover had not been made until 24 January. The applicant was pressed and said that she must have put the credit voucher with the cash and said:
“the only thing I can think is I made it out and just got sidetracked doing something else and I don’t know, I’ve just put it somewhere and just forgotten. That’s the only thing I can think I’ve done with that.”
She said she may have “made it out and chucked it in my basket” and just forgotten. She said she could remember being approached about the cheque over the period 16-18 January. She could not explain why she had not provided the cover and said that again she may have been sidetracked. She maintained that she had not spent the cash and that the money remained with the credit. She agreed that once it had been brought to her attention there would have been an urgency about it. She also agreed that what she had done was against bank rules and procedures.
In her written explanation she referred to the fact that she was holding two jobs and had a lot on her mind. She agreed it had been raised with her but had thought to herself “I know the cheque and money is there, I’ll put it through when I can”.
In Court her explanation was that while working back late on 9 January she had opened her bag and noticed the cash. She remembered she needed the cheque and had made it out. She then put the cash into a plastic coin bag with the voucher and put it in one of her (work) baskets. She said she was possibly running three baskets at the time. When she went away that evening she locked the basket in one of the filing cabinets. She did not need access to any of her baskets the next day in the short period she was at work before she went to the family funeral. In the days subsequently, at times when at 132 Franklin Street she had thought about processing the cheque when she got back to 65 Franklin Street, but had never had the opportunity. Her explanation was that even after the matter was brought to her attention by Ms Saunders and Mr Lowe she was diverted to other things. Further, she did not think to carry the cash and voucher from 65 Franklin Street to 132 Franklin Street. She also said she didn’t have the opportunity to travel back to 65 Franklin Street at lunchtime to process the voucher and cash.
Ms Reside gave evidence that on 7 January, the applicant’s birthday, she handed the applicant $380.00 cash from a jam jar where she kept her wages. She said that she had not discussed with the applicant until the month before the trial the detailed reasons for her dismissal. She said that the applicant had never raised the question of the precise reason why the applicant had been dismissed and had only been recently aware that the $380.00 was relevant. Ms Reside was unable to remember the details of a $380.00 withdrawal made from her bank account on 17 January.
Explanation for the third cheque
In the interview the applicant remembered that cover for the cheque came from a bank account in the name of her parents to which she was a signatory. She admitted that she had issued and used the cheque without providing cover. She said that she had a withdrawal form dated 16 January (the date of the cheque), and “just got sidetracked doing something else and I hadn’t put it through”. In the course of the discussions in the interview it was put to her that cover had been provided on 18 January, the same day that the cheque had been paid. In fact, the cheque was paid on 19 January.
In her written explanation the applicant said the cheque credit was not processed as her parents were to receive a deposit into that account from a superannuation fund. She had been checking the account as to whether the deposit had arrived before processing the cheque and rather than cancel it and make out a new one “I held onto the cheque until the withdrawal was available”.
In Court the applicant’s explanation differed from her earlier explanation. She explained how she had checked the balance in her mother’s account to see if the deposit had arrived from another account. It had not done so and she had spoken to her mother and was advised that there was to be no deposit. The conversation occurred after hours. She then said that on the morning of the 18 January she signed the cheque and took the cheque, voucher and withdrawal to a teller to process, then took the cheque. When asked how it was that the actual cheque was deposited with the payee on the morning of 17 January she said that the transaction must have occurred on 17 January. In cross-examination she said that she met her mother in the street on 17 January as she was walking to 132 Franklin Street. She then handed her mother the cheque and later that night left the withdrawal, now dated 18 January, to be processed by the tellers the next day.
The events after the interview
After the interview the investigators tried, without success, to telephone Ms Reside. They decided the next day that it would be not be worth further telephoning her as by then the applicant would have approached her in relation to the provision of the $380.00 cash for the second cheque.
After the interview the investigators also approached Mr Jackson to confirm with him that there was no cash with the second cheque voucher when he saw it on the applicant’s desk. After that Mr Jackson had only cursory discussions with those involved in the decision to dismiss the applicant.
Subsequent events
The investigators prepared a report for the Personnel Department (Exhibit R1). It summarised the responses provided by the applicant in the interview. It referred to the fact that the applicant may have issued bank cheques without cover in her duties as a CBAO and claimed she said that this occurrence would be rare. It then provided details of 45 instances where the cover date was after the issue date. In this respect the report misrepresents what the applicant said. She at no time disputed that she was involved in issue irregularities with administration bank cheques. The report concluded:
“Suares did not impress as being totally credible”.
The interviewers felt that her explanation concerning the $380.00 bank cheque was questionable to say the least. It was also felt she was not forthcoming with many of her answers.”
The report was received by the Personnel Department and a decision was taken to recommend to head office in Sydney that the applicant be dismissed. The report containing the recommendation (Exhibit R14) was written on the instructions of Mr Fletcher who was then Senior Manager, Strategy and Services, Melbourne and who gave evidence. The report indicated that the applicant’s actions may have been excusable if they only involved the issue of work related cheques:
However, in the three instances where cheques were issued for personal use, her action is totally unacceptable. Ms Suares is fully aware that staff are not permitted to process their own banking, yet she has processed three cheques without cover for personal use.”
The report considered her explanation that she was busy but rejected it saying “to issue cover is a procedure that should occur automatically.....” The report went on to suggest that attention should be focused on the second cheque. It said that when the matter was raised by the bank cheque examiners the cheque should have been processed immediately:
“The incident could have been written off as an oversight. However, the absence of the money and her vagueness in this regard suggest dishonesty rather than incompetency should be involved.”
The report noted the applicant’s good performance record and the support for her by Mr Jackson, but concluded :
“Had Ms Suares been frank and forthcoming about the missing $380.00, we may have been placed to adopt a more lenient stance, but in the circumstances, we believe she should be dismissed.”
In Sydney the matter was the subject of a further report (Exhibit R6). The report concluded that she had “suppressed bank cheques for her own benefit and accordingly she be dismissed.” It focused on the fact that she gave no explanation as to why the first and second bank cheques were not processed together. It also said that the third cheque should have been cancelled when the applicant decided not to withdraw funds from her parents account at that time. The report concluded with a recommendation that the matter be referred to the police for further investigation. The report was endorsed by two other senior officers. Subsequently on 31 March the applicant was advised that she had been dismissed following the conclusion of the respondent’s inquiry into her actions “in which you issued Bank cheques for your personal use without providing same day cover”.
Business purposes bank cheques
A subject canvassed in the interview and in the trial was the issuing of bank cheques for business purposes by the applicant in her role as CBAO. It was put to her by the interviewers that she had been issuing bank cheques in her role as CBAO without providing same day cover for them. The applicant gave an explanation for this which was that she would pre-prepare the cheques with the vouchers before having them signed the following morning by Mr Jackson or another manager. The applicant was strongly pressed in cross-examination as to whether she saw any difference in the issues involved in whether cover was provided for bank cheques that were to be issued for the bank’s internal purposes, and the bank cheques for the personal use of staff. The applicant maintained that she saw no difference in principle.
Mr Jackson was queried about the fact that numerous bank cheques for the bank’s purposes had been issued by the applicant where the issue date did not coincide with the date cover was provided. He described this as an “issue irregularity”. Mr Fletcher said that the applicant’s involvement in these issue irregularities in her role as CBAO was not considered in the decision to dismiss her.
Other evidence
The respondent led a volume of evidence aimed at satisfying the Court that there was a proper basis for its actions against the applicant. Jason Lowe and Carol Saunders gave evidence corroborating the account given by Mr Jackson as to their actions in bringing the outstanding credit for the second cheque to the applicant’s attention.
The respondent also produced the applicant’s credit union statements to show that her earlier account of a withdrawal to fund the first cheque was erroneous. Ms Reside’s bank account was produced which showed that a withdrawal of $380.00 was made on 17 January, a date corresponding to when the outstanding voucher was first raised with the applicant. Ms Reside could not account for that withdrawal. Ms Reside maintained however that she had handed the $380.00 cash, taken from a jam jar in her kitchen, to the applicant on 7 January.
Also in evidence were records from Gasmart indicating that the third cheque was presented as payment on the morning of 17 January. The respondent also produced transaction and enquiry records for the account from which the third cheque was covered to indicate that no funds had been deposited into it around 17 January and that no enquires were made on a teller terminal as to its balance around that time. The applicant’s evidence was that she may have made an enquiry from other bank records.
Findings on the evidence
The respondent carries the onus of proof that it had a valid reason to dismiss the applicant. In seeking to discharge its onus the respondent faces the difficulty that although an electronic and paper trail had been left by the transactions, many aspects of what happened could only be explained by the applicant. Before distilling the reason and its validity it is necessary to make some findings on the evidence and in particular the three cheques.
I find that it is a cardinal principle of banking that staff do not process their own personal banking. There is a further principle that bank cheques, being equivalent to cash in the market place, are not to be issued into the market place unless cover has been provided. I am satisfied that the applicant, as an experienced bank officer, knew that these principles were to be followed. She admitted as much in the record of interview. I am further satisfied that while the bank may have accepted issue irregularities in relation to bank cheques for its own business purposes, this was not in any way condoned in relation to bank cheques for the personal use of staff.
I accept the applicant’s evidence in relation to the first cheque. The account differs in some detail from that given to the investigators, but it has an internal consistency. I am satisfied that the first cheque did not leave the bank until Mr Suares had provided cash to the applicant, who in turn handed it to a teller on the morning of 10 January 1995. The couple then proceeded to the City of Morwell offices to pay the rates and then to a family funeral. I accept, as did the investigators during the interview, and Mr Fletcher in evidence, that the irregularity of the issue date, 9 January, not corresponding with the cover date, 10 January, is of a technical nature only, given that the cheque did not leave the bank on 9 January.
The applicant’s account of the second cheque was not accepted by the investigators, or by anyone in authority within the respondent’s hierarchy. Its inherent incredibility led directly to the applicant’s dismissal. The applicant, having asserted that she received $380.00 from Ms Reside to purchase the cheque, was unable to provide a convincing explanation why it had taken 15 days from the date of issue of the cheque to when cover was provided. She was unable to explain a delay of 7 days in making cover from the date when the matter was first brought to her attention after the cheque was paid on 16 January. She was unable to explain why Mr Jackson on 11 January had seen the voucher on her desk with no sign of the cash.
The respondent was entitled to reject the applicant’s explanation because of her failure to account for Mr Jackson’s observation. When combined with the applicant’s vague account as to why she took no action after the second cheque was brought to her attention, the respondent had adequate material upon which to conclude that the overall explanation was unsatisfactory and that her actions warranted termination.
The Court too remains unsatisfied by the applicant’s explanation of the second cheque. Her credit was placed under sustained pressure in these proceedings. As indicated above her explanations for the first and third cheques in Court shifted significantly from her first account. As Counsel for the respondent correctly submitted, in a number of respects of the applicant’s different explanations were given when confronted with evidence contradicting her earlier account. Three examples support this conclusion. The first relates to the first cheque. The applicant maintained it was substantially funded by a withdrawal, yet no withdrawal was recorded and she explained the matter with her husband’s evidence of payment in cash. The second example relates to the applicant’s account of handing the third cheque to her mother on 17 January when confronted with evidence that the cheque had been negotiated that day, rather than the following day as she first asserted. Finally, the applicant’s quite elaborate account of her daily movements between the 65 and 132 Franklin Street branches was clearly designed to satisfy the Court that she had little opportunity to retrieve the voucher and the $380.00 cash from the basket in the filing cabinet. Her explanation, however, as to why she could not carry the voucher to 132 Franklin Street where she had access to a teller was weak.
Ultimately, even accepting that she received the case from Ms Reside on 7 January, her explanation for her tardiness putting that cash into the system lacked conviction.
The applicant’s initial account of the third cheque almost satisfied the investigators because it was based on the proposition that the cheque did not leave the bank until cover was provided on 18 January. The evidence makes it plain however that the cheque and original withdrawal were dated 16 January. The applicant decided not to process the withdrawal at once and waited. She received information from her mother that no funds were to go into the account and then handed the cheque to her mother on 17 January. The withdrawal to cover the cheque was then redated by the applicant and not processed until 18 January. The third cheque thus moves into the same category as the second cheque in that it was negotiated into the market without same day cover being provided. It was thus clearly in breach of the rules relating to bank cheques.
The validity of the dismissal - s170DE(1)
In a recent decision Sangwin v Imogen Pty Ltd (trading as Carleton Custom Upholstery) (8 March 1996, von Doussa J, unreported) the Court considered the application of s170DE(1) in circumstances where an employer had dismissed an employee for attempted theft. von Doussa J endorsed the following comment in Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224 at 230 :
“Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.”
He then went on to consider a number of examples where an employer, after appropriate inquiry, had formed the view that its operational requirement required the dismissal of an employee, even if subsequently the grounds for that dismissal were not made out. He then said :
“These are extreme examples based on human safety issues. Other examples based on the serious risk of property damage or monetary loss which might arise if employees against whom serious allegations of a breach of safe operating practices or dishonesty had been made were allowed to continue performing their normal employment duties would pose similar rhetorical questions. Although the examples may not be representative of the risk of harm that could arise in many workplace situations, they lead me to the view that s170ED(1) (sic) should not be construed so as to exclude from the notion of a “valid reason” an honest belief held on reasonable grounds by the employer, after inquiry of the type envisaged in Bi-Lo Pty Ltd v Hooper, that a state of fact exists which justifies termination of the employment. In my opinion if the employer honestly believes on reasonable grounds after sufficient inquiry that the employee has been guilty of serious misconduct a valid ground within the meaning of s170ED(1) (sic) exists for terminating the employment of the employee.”
Relying on these comments the respondent’s decision-making process and investigation were criticised by Counsel for the applicant on a number of grounds. The first was the content of the various memoranda (Exhibits R12, R14 and R16) that revealed the decision making process of the respondent. It was suggested that the further the matter proceeded from the locus of employment, the more serious the allegation against the applicant became. It was submitted that from an allegation that the applicant had failed to comply with the bank cheque procedures, the reason for her dismissal had been that she was dishonest. It was said that evidence of this conclusion is, on its face, contained in the reference by the respondent of the file to the police and the reference in Exhibit 14 (above) that “her vagueness... suggest(s) dishonesty rather than incompetency could be involved.”
A fair reading of the various memoranda and the evidence of Mr Fletcher does not bear out this submission. Ultimately the reason given for the dismissal of the applicant was her failure, without an acceptable explanation, to comply with the rules relating to personal bank cheques. She was not dismissed because the bank formed the view that she was dishonest. She was dismissed because she failed to give the bank an explanation acceptable to it as to why she had failed to comply with a cardinal rule applicable to all bank employees. Further it was only the three cheques that were taken into account in her dismissal and not her involvement in issue irregularities in her role as CBAO. I do not accept that the fact that the matter was referred to the police leads to the conclusion that a finding of dishonesty was made as a reason for her dismissal.
Another criticism of the respondent’s investigation was its failure to interview Ms Reside. There were some attempts made to interview her on 1 March but the view was quickly formed that contacting her after that date would not have been of assistance as there could have been contact between her and the applicant. Failure to interview Ms Reside in my view did not impugn the investigation. As Counsel for the respondent submitted, Ms Reside was only peripheral to the issue faced by the bank. She was in a position to corroborate the applicant’s account in relation to the $380.00 cash but of no assistance in relation to the applicant’s failure to comply with bank cheque policies. In relation to this issue the investigation of the respondent was adequate because essentially it was the applicant herself who had the key information. Only she could provide information as to when the cheques were issued into the market place and she was not forthcoming in that information. As events unfolded, it was only in the course of the hearing that it was revealed that the applicant had handed the third cheque to her mother on the morning of 17 January.
Following the reasoning in Sangwin (above) I am satisfied that the respondent’s investigation of this matter was reasonable in all the circumstances. Ultimately the applicant held the key to the sequence of events. The other relevant principal players - Mr Jackson, Ms Saunders and Mr Lowe - were interviewed. Mr Jackson had investigated the matter to some extent in order to satisfy himself that a matter involving a trusted employee should be referred up the hierarchy. The respondent did not act unreasonably in failing to pursue any enquires with people other than its employees. In the course of the investigation the applicant was given an opportunity to answer the allegations. She did not dispute that she knew what the respondent’s concerns were.
I am satisfied that the respondent found the applicant’s explanation unsatisfactory. It reached that conclusion after it gave her the opportunity to give her explanation. It also took into account her prior good performance record before dismissing her. Ultimately the bank looked at its own operational requirement that all officers must comply with its bank cheque policy. This was not a finding that the applicant was dishonest. It was a finding that she had not satisfactorily explained why she had not complied with a fundamental operational requirement imposed on all employees. When the matter is considered in this light the respondent, in contrast to the conclusion in Sangwin, had a valid reason connected with its operational requirements or the applicant’s conduct to terminate her employment on 31 March 1995. The respondent has discharged its onus of proof that it had a valid reason to dismiss the applicant.
Was the termination harsh, unjust or unreasonable?
My finding that the respondent has discharged its onus of proof under s170DE(1) throws the onus of proof on the applicant in relation to s170DE(2). In Sangwin (above), von Doussa J said, after the above extract :
“Even where such a belief constitutes a “valid reason”, there may nevertheless still be cases where a dismissal based on that belief may be harsh, unjust or unreasonable within the meaning of s170DE(2). Many considerations of the kind likely in other cases to lead to a finding that a dismissal was harsh, unjust or unreasonable would probably have been excluded in the course of reaching the conclusion that a “valid reason” existed, but there would be other matters as well to be considered. These would include whether dismissal was disproportionate to the gravity of the believed misconduct on which the employer acted and to the risk of harm to the employer and others had the employee not been dismissed; the gravity of the personal and economic consequences of dismissal on the employee; and any mitigating circumstances such as the length, loyalty and quality of the employee’s work record.”
Following these comments it was plain from the evidence that in the course of coming to its decision the respondent had regard to the applicant’s prior performance record. The Personnel Department had Mr Jackson’s letter of 22 February and Exhibit R14 refers to “her good performance record”. Obviously for a person in the applicant’s position the loss of her career will have a major impact on her and her family, but such a consideration cannot be decisive and must be weighed against the reason for the dismissal.
The respondent’s witnesses, Messrs Jackson and Fletcher, were firm in their opinion that unexplained irregularities in the bank cheque account are treated as being in the same category as cash irregularities. Mr Jackson said that “people who play with (the) bank cheque account play with fire”. Mr Fletcher’s evidence was that other cases of which he was aware had resulted in dismissal. He was an impressive witness and one whose evidence on this point was not directly challenged. He was asked what was the bank’s policy concerning the use of personal bank cheques and said :
“The Bank takes a very serious view of staff conduct of their own personal finances in relation to the bank and regardless of amount or time, it responds accordingly.”
In relation to the understanding of bank officers of issuing procedures for bank cheques he said:
“I think it is also fair to say that any bank officer with any level of experience would understand the principles of a bank cheque, that a bank cheque is effectively cash, and if you wish to purchase a bank cheque, well its paramount that it is paid for at the time.”
When the importance of the policy of the respondent in relation to personal bank cheques is weighed in the balance against factors personal to the applicant, she carries a very heavy onus to show that a termination based on breaches of the policy is to be characterised as “harsh, unjust or unreasonable”. There are no suggestions that the policy was other than in accordance with usual and longstanding banking practice. There was no suggestion that the rules of the bank relating to bank cheques were not known to the applicant. There was no evidence that the respondent, in relation to personal bank cheques of employees, had ever condoned breaches of its own policy. I am satisfied that the issue of cover for bank cheques issued for the bank’s own purposes is irrelevant here, and was treated as such by the respondent.
The principal exculpatory factor put by the applicant in her written statement and in her evidence, was the volume of work she had over that period in January. Her evidence on this point was not directly challenged. I am not satisfied, however, that the applicant has shown that the volume of work was such as to provide a satisfactory or acceptable explanation as to why the breaches occurred. She could easily have complied with the policy, even with her hectic workload. The second and third bank cheques must have crossed her mind on a number of occasions. She must have been reminded every time she entered her office at 65 Franklin Street that she had an envelope of cash sitting in a very inappropriate place for a bank officer. She had previously worked with the State Bank and there bank cheques could not be issued without immediate payment of the credit voucher because they affected the teller’s balance. Although the respondent’s computer system did not create this imperative, there is no suggestion that there was any culture within the respondent that the policy was not to be complied with.
There are some similarities between this case and Boland v Maningrida Council Inc. (24 April 1996, Wilcox CJ, unreported). There the applicant was dismissed because of his gross neglect of duties that led to the loss of $5,000.00. The respondent took a serious view of the actions of the applicant even though the Court held that it had not been able to make out a direct causal relationship between the neglect and the loss. Further it had not been relied on any dishonesty.
Wilcox CJ held that it had discharged its onus under s170DE(1). Turning to s170DE(2) he said :
“He was dismissed because he neglected to follow simple, commonsense procedures with which he was well familiar. There was nothing harsh, unjust or unreasonable about that.”
Applying these comments, when the policy of the respondent in relation to bank cheques and staff dealings with their personal finances is weighed against the personal circumstances and account given by the applicant, I am not satisfied that the outcome here is disproportionate or unreasonable. The applicant has not discharged her onus of proof under s170DE(2) of the Act.
Was s170DB breached?
It was also argued that the respondent breached s170DB(2) of the Act because it failed to give the applicant an appropriate period of notice. The respondent countered with Mr Fletcher’s evidence that the respondent was entitled to rely on s170DB(1)(a) because the applicant was “guilty of serious misconduct, that is, misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period”. Having regard to the importance that the respondent placed on its policy in relation to bank cheques, I am satisfied that the respondent was entitled to characterise the applicant’s conduct as serious misconduct and thus there has been no breach of s170DB of the Act.
Opportunity to respond - s170DC
Counsel for the applicant further argued that the respondent had failed to give the applicant an adequate opportunity to respond to the allegations against her. In Wyndham Lodge Nursing Home Inc. v Reader (15 April 1996, Wilcox CJ, Ryan and North JJ, unreported) the Court said :
“In a case where an employee knows the allegations being made, it is not necessary for it to be stated. For example, an employee may be caught in an act of apparent wrongdoing. Then it may be sufficient simply to ask for an explanation of what the employee is doing, without expressly stating the allegation. The allegation will be implicit in the circumstances in which the employee is required to give an explanation.”
Here the central allegation against the applicant - her failure to comply with personal bank cheque policies - was squarely put to her in the course of the interview. She was given an opportunity to respond to that allegation. I am not satisfied that in the circumstances the respondent was required to take any further action and thus it has not breached s170DC of the Act.
The applicant has not made out any contravention of the Act. The application must be dismissed.
MINUTES OF ORDERS
THE COURT ORDERS:
That the application is dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding twenty-one (21) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.
Associate:
Dated: 10 May 1996.
Solicitors for the Applicant: Rennicks, Gippsland
Counsel for the Applicant: Mr S Stuckey
Solicitors for the Respondent: I F Purbrick
Counsel for the Respondent: Mr B Dennis
Date of hearing: 4 - 7 March 1996 inclusive
Date of judgment: 9 May 1996.
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