Troy Robert Dunning v Neata Glass Service Pty Ltd
[1995] IRCA 630
•17 October 1995
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - whether criminal conduct out of working hours amounts to SERIOUS MISCONDUCT - whether termination for a VALID REASON - whether termination HARSH UNJUST OR UNREASONABLE - APPRENTICE.
INDUSTRIAL RELATIONS ACT 1988 (Cth) Ss 170DB, 170DB(1)(b), 170DE, 170DE(2), 170EE(1), 170EE(2).
NORTHERN TERRITORY EMPLOYMENT AND TRAINING AUTHORITY ACT 1991
Seymour v Stawell Timber Ind P/L (1985) 9 FCR 249
Hanley v Pease & Partners Ltd [1975] 1 KB 698
Warburton v Taff Vale Railway Co (1902) 18 TLR 42
Browne v Commissioner for Railways (1935) 36 SR (NSW) 21
Marshall v English Electrical Co Ltd [1945] 1 All ER 653
Ismet Hussein v Westpac Banking Corporation No VI 1228/94, March 30 1995, unreported, Staindl JR
Osborne v Woolworths (SA) Ltd (1992) 59 SAIR 600
Re Public Service Association of NSW and the Health Administration (1987) AR(NSW) 352
Nicholson v Heaven and Earth Gallery Pty Ltd (1994) 1 ICRC 199
Gregory v Philip Morris Limited (1988) 80 ALR 455
TROY ROBERT DUNNING V NEATA GLASS SERVICE PTY LTD
Before: Judicial Registrar BLOKLAND
Place: Darwin
Hearing Date: 25 September 1995
Judgment Date: 17 October 1995
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
DARWIN REGISTRY
No DI95/1072
BETWEEN:
TROY ROBERT DUNNING
Applicant
AND
NEATA GLASS PTY LTD
Respondent
MINUTE OF ORDERS
BEFORE: BLOKLAND JR
PLACE: DARWIN
DATE: 17 OCTOBER 1995
THE COURT ORDERS THAT:
The respondent pay to the applicant damages in the sum of $170 being payment in lieu of notice pursuant
s 170DB Industrial Relations Act 1988 (Cth).
Further, the respondent pay to the applicant the sum of $170 being payment due and owing for the week
during which the applicant was suspended.
Further, the respondent pay to the applicant the sum of $1360 in compensation
4. That the respondent be given 21 days to comply with these orders.
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
DARWIN REGISTRY
No DI95/1072
BETWEEN:
TROY ROBERT DUNNING
Applicant
AND
NEATA GLASS PTY LTD
Respondent
BEFORE: BLOKLAND JR
PLACE: DARWIN
DATE: 17 OCTOBER 1995
REASONS FOR JUDGMENT
QUESTIONS
The questions to be resolved in this case are as follows: (a) Did the criminal conduct of an apprentice glazier which involved the unlawful damage of windows outside of work hours and not perpetrated upon the respondent’s property constitute a valid reason for termination of the contract of employment ? (b) Was the applicant given the opportunity to defend himself against the allegations of misconduct forming the basis of the termination? (c) Was the termination harsh, unjust or unreasonable? (d) Was the alleged misconduct of a kind that would exempt the respondent from giving appropriate notice?
THE FACTS
There is little in dispute between the parties concerning the facts. The applicant Troy Dunning commenced a glazing apprenticeship with the respondent Neata Glass Pty Ltd on 15 April 1995. After serving a short probationary period he entered into a contract of employment with the respondent on 19 July 1994.
Aspects of a contract of this type, (hereafter “contract of training”) are governed by the Employment and Training Authority Act (NT) (1991), which in turn is administered by the Northern Territory Employment and Training Authority, (hereafter “the Authority”). On 14 January 1995 the applicant took part in a moderately serious window breaking incident around Darwin. He was in the company of two friends. A number of windows were broken by the group, however the applicant’s particular conduct involved breaking two windows, namely, a telephone box window and a bus stop window. The applicant was interviewed by police on 15 January 1995 and on the following day appeared in the Court of Summary Jurisdiction at Darwin when the matter was mentioned and adjourned. On 10 February 1995 the applicant pleaded guilty and was dealt with for two counts of unlawful damage to property. The offence was charged in its aggravated form as the value of the property was over $500 in each case, namely $600 for the telephone box window and $900 for the bus stop window. The applicant was convicted and ordered to perform a total of eighty hours community service and to pay restitution for the cost of the windows.
THE TERMINATION
Prior to being dealt with by the Court of Summary Jurisdiction, the applicant’s employment was terminated. The precise date of the termination was not immediately apparent. I have taken the view that to be effective, the termination of a contract of this nature requires a formal cancellation by the Authority pursuant to the Northern Territory Employment and Training Authority Act (1991). At the conclusion of the hearing of this matter, I advised the parties that I intended to consider more fully some of the legal issues associated with apprentices in the Northern Territory before giving my decision. My researches reveal that an employer who is party to a contract of training, cannot effect the termination of an employee who is a party to such a contract unless the termination is done in accordance with the Northern Territory Employment and Training Authority Act (1991).
The Northern Territory Employment and Training Authority Act permits the cancellation of a contract of training by mutual consent: (s 48); the cancellation of assigned contracts in certain circumstances: (s 50) and permits the Secretary of the department to cancel a contract of training by notice in writing: (s 51). The scheme of the Northern Territory Employment and Training Authority Act (1991) is to require that notice be given to the Authority or that approval be sought from the Authority before assignment of contracts of training, discipline of apprentices and cancellation of contracts of training be effective. I note that even cancellation of a contract of training by mutual consent requires notice to be given to the Secretary of the department. The interpretation I have adopted is consistent with the commentary provided in CCH, Volume 4, “Labour Law Reporter”, 52-060; 53-205-265. In this matter, the Authority cancelled the contract of training between the applicant and the respondent by way of letter dated 30 March 1995, such cancellation expressed to be effective on 24 January 1995. No specific explanation has been provided to the Court for what appears to be a retrospective cancellation, although there was some evidence of negotiations taking place between the Authority and the parties during the relevant period.
On 16 January 1995, when the criminal proceedings were first mentioned in the Darwin Court of Summary Jurisdiction, the applicant contacted his place of employment and explained that he could not attend work because of the court appearance. On 17 January 1995 the applicant attended work. Mr Neat, the managing director of the respondent company, convened a meeting between himself , the applicant and a representative from the Authority.
Mr Neat ascertained that the substance of the allegations were true. Mr Neat told the applicant that he was suspended for one week without pay. He told the applicant to start looking for alternative work. It was clear from the meeting of 17 January that the respondent intended to terminate the applicant’s employment. In my view however, the outcome of that particular meeting was not clear enough to constitute notice to the applicant. The “suspension” was a mechanism utilised to attempt to have a “cooling off” period and there was some intervening involvement from the Authority. The applicant was formally advised of the cancellation of the contract retrospectively. I find the termination of employment to have occurred on 24 January 1995 being the date on which, according to the operation of the relevant statute, the contract of training was brought to an end. The obligations of both parties did not conclude on 17 January 1995. I note the applicant refused to sign any instrument effecting a cancellation by mutual consent: Northern Territory Employment and Training Act, s 48 . The applicant’s conduct in this regard showed an intention to continue to be bound by the contract of training: (concerning apprentices and the effect of such action; Seymour v Stawell Timber Ind P/L (1985) 9 FCR 249, 265-266). Although the cancellation was effected by the Authority, the termination was still at the “initiative of the employer” within the meaning of the Convention Concerning Termination of Employment at the Initiative of the Employer, (Article 3). The respondent’s action in this context included offering the applicant no work by a purported “stand down”, telling the respondent he should look for other work, activating the mechanisms under the Northern Territory Employment and Training Act, and not accepting the alternatives to termination suggested by a representative of the Authority.
NOTICE REQUIREMENT
Pursuant to s 170DB Industrial Relations Act 1988 (Cth), the applicant was entitled to one week’s notice or payment in lieu of one weeks notice. I consider the applicant’s misconduct in relation to whether or not there was a valid reason for dismissal later in these reasons. Although the misconduct is serious, it is not of a type that would justify summary dismissal at common law or its equivalent as set out in s 170 DB(1)(b) Industrial Relations Act 1988 (Cth). In general, such misconduct must be serious and wilful, and must demonstrate the employee’s intention to no longer be bound by the contract . Misconduct outside of the workplace and out of work hours will always have an element of ambiguity surrounding it which leads me to the conclusion that this case is not one which warrants summary dismissal. In any case I doubt whether it is ever valid to summarily dismiss an apprentice: Seymour v Stawell Timber Ind P/L . Here, the “notice” was given retrospectively. I have found that the applicant was not motivated by any thoughts of a vendetta against the respondent. The applicant is entitled to the equivalent of one week’s wages being damages for the failure to give notice.
THE “SUSPENSION”
Although the action to suspend the applicant without pay was taken by the respondent, (as a result of advice given by the Authority), the respondent ‘s witness Graham Clark stated in evidence that he later understood the Authority’s advice to be wrong and it was accepted by him that the respondent had no authority to suspend the applicant without pay. There is no recognition at common law to suspend an employee’s services. The employer must either dismiss the employee or continue to pay the employee until the time that the employee’s services are again required: Hanley v Pease & Partners Ltd [1975] 1 KB 698. The only exceptions are if the contract or relevant statute, award or particular custom of the industry permit the action: Warburton v Taff Vale Railway Co (1902) 18 TLR 42; Browne v Commissioner for Railways (1935) 36 SR (NSW) 21; Marshall v English Electrical Co Ltd [1945] 1 All ER 653. The Northern Territory Employment and Training Authority Act permits suspension of a contract of training where the Secretary is satisfied that the employer or trainee has contravened or failed to comply with the Act, regulations or the contract of training: (s 64 Northern Territory Employment and Training Act) .
The respondent has not sought to justify the suspension under the provisions of the Northern Territory Employment and Training Act . This action was merely suggested by the Authority’s officer Steve Bryan as a “cooling off period”. This advice was acted upon by the respondent. The Court accepts this was an honest mistake on the part of the respondent which was based on the advice of the Authority. The Court will in any case be ordering that the respondent pay to the applicant one week’s wages for the period of the suspension. The Court notes that it has been the respondent’s intention to rectify this mistake by way of payment to the applicant.
MOTIVES OF THE APPLICANT
There is a question concerning the motivation behind the applicant’s actions. The applicant, (who was unrepresented at the hearing), gave evidence that for himself , the workplace had not been a happy environment because he had at times suffered harassment from fellow employees. That harassment comprised threats of an “initiation” which was to involve humiliating acts and teasing of various types. In cross-examination the applicant said his bike had been wrecked and he had been touched although not punched by someone at the work place. He had not brought the harassment to the attention of his superiors although an officer from the Authority, Mr Bryan recalled in evidence that at some point, (he was unsure whether it was before or after the termination), the applicant’s mother mentioned these matters to him. Mr Neat said in his evidence that to his knowledge there had not been “initiations” for some ten to twelve years and he believed the respondent’s work environment to be a good, healthy work environment. It is not necessary to make a finding about those particular aspects of the case. The evidence is fairly scant on the point. The applicant was clear however, that his conduct in breaking the windows was not as a result of any vendetta against the employer, but rather a combination of circumstances including general frustration at not fitting in at work, the recent death of a friend and more immediately the fact that he had met up with friends on the night in question and alcohol was involved. I accept the actions were not a vendetta against the employer. They were not intended to be directed against the employer.
DID THE MISCONDUCT CONSTITUTE A VALID REASON FOR TERMINATION?
At first blush it may appear to be drawing a long bow to hold that the misconduct described is “connected with the employee’s capacity or conduct” within the meaning of s 170DE(1) Industrial Relations Act (1988). As mentioned above, the actions of the applicant occurred outside of working hours, (over the weekend) and it was not the respondent’s property which was the subject of the damage. However, the misconduct must be seen in the context of the particular employment environment. As Mr Neat has stated in evidence, the respondent company is one of only two glaziers in Darwin. A good business reputation means everything to the respondent. A substantial proportion of the respondent’s business is derived from insurance companies. The cruel irony of the applicant’s actions in such circumstances was not lost on the respondent. Mr Neat gave evidence that he could not think of a worse form of misconduct for one of his apprentices to be involved in. It is not that Mr Neat appeared in any way to be overly sensitive to misconduct on the part of his employees. He gave evidence that he has had plenty of employees over a twenty year period charged with everything from drug offences, drink driving through to offences of violence. The only times previously he has moved to terminate the employment of a person for criminal conduct is when he dismissed two apprentices for serious assaults which occurred on the respondent’s premises. Another of the respondent’s employees was in the police cells charged with drug offences and unlawful possession of a crocodile head at the very time the applicant was arrested. In comparison with some of the other “out of hours” conduct on the part of other employees, the two counts of unlawful damage appear quite mild. However, Mr Neat was entitled to treat the applicant’s conduct seriously, for reasons other than simply its seriousness in the scale of criminal offences. His view was that if he did not take decisive action, the respondent company was at risk of being damaged significantly.
In Ismet Hussein v Westpac Banking Corporation , (IRCA, No VI 1228 (1994), March
30 1995, unreported), Staindl JR noted that there was surprisingly little case law on such a question as this. In that case, Staindl JR found that there was a relevant connection between criminal deceptions perpetrated on the ANZ bank vis a vis the applicant’s employment with the Westpac bank. Mr Maley, for the respondents relied on this authority. It is clear that there must be a connection between the misconduct and the nature of the employee’s duties. Misconduct which is merely tangential to the employee’s duties will not suffice as a ground: Wallace-Bruce, “Outline of Employment Law” (Butterworths, 1994), 203-204, citing Osborne v Woolworths (SA) LTD (1992) 59 SAIR 600 and Re Public Service Association of NSW and the Health Administration 1987 AR (NSW) 552 . In Osborne v Woolworths (SA) LTD, a baker’s assistant was dismissed for conduct outside of employment. He was convicted of theft from an unattended shopping bag . He was on annual leave at the time. Upon being notified of the theft, the employer dismissed him. The Full Industrial Commission of South Australia rejected the employee’s argument claiming the dismissal to be harsh or unreasonable as the employer was entitled to hold the view that the necessary trust implicit in the employment relationship was absent. In Re Public Service Association of NSW and the Health Administration a clinical psychologist who had sex with a patient over a long weekend was not entitled to reinstatement. McCallum and Pittard in “Australian Labour Law” (Butterworths, 1995), state that the crucial issue is “whether the criminal conduct touches the employment” , and adopt the following passage from Sykes: “a conviction for a sexual offence would seem to be irrelevant to the employment of a factory hand” but “relevant in the case of a school teacher.....a conviction for drunken driving out of the hours of employment would be relevant to the employment of a chauffeur but not to the employment of a cook.”
The respondent took the view that it had to take action over an employee who intentionally breaks windows when a substantial part of its business was concerned with fixing broken windows. Even if the criminal damage were damage perpetrated on some other object, not windows, the relevant connection might not be shown. On these facts the relevant connection is shown. The Court therefore concludes that there was a valid reason for the termination.
PROCEDURAL FAIRNESS
The essence of procedural fairness pursuant to s 170DC Industrial Relations Act 1988 (Cth) requires:
“ [T]hat a person should not exercise legal power over another to that person’s disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case........ ........ ........ ...The employee is to be given the opportunity to defend himself or herself ‘against the allegations made’; that is, the particular allegations of misconduct or poor performance that are putting the employees job at risk.” : (Nicholson v Heaven & Earth Gallery Pty Ltd (1994) 1 ICRC 199 at 243, Willcox CJ).
As noted above, Mr Neat convened the meeting with the applicant and a representative from the Authority on 17 January 1995. The purpose of the meeting was to ascertain whether or not the substance of the allegations were true. It was perhaps unfortunate that Mr Neat heard about the allegations from a competitor rather than from the applicant himself. Mr Neat stated that he “was the last to know”. The applicant had, unbeknown to Mr Neat, spoken to other representatives of the respondent company on 16 January 1995, (although this message was not passed on to Mr Neat). I cannot help thinking that hearing of the allegations from the only competitor in Darwin added to Mr Neat’s distress over the situation. However, I do not think Mr Neat came to the meeting with his mind made up. It appears that Mr Neat came to the meeting with an open mind. He wanted to ascertain whether or not the applicant agreed with the allegations. The applicant gave evidence that he did not think the meeting was fair as Mr Neat did not take account of the fact that it was “only two windows”.
Evidently the applicant considered that it would make a substantial difference to the outcome of the meeting if Mr Neat understood that the applicant’s part in the window breaking was limited to two windows. It appears on the evidence that Mr Neat was aware of the applicant’s view, however, even accepting that view, Mr Neat thought termination appropriate.
In the face of the clear admission on the part of the applicant, the respondent was entitled to conclude that the substance of the allegations were substantially true. It is true that Mr Neat did not consider alternatives to termination, however, that is an issue which I consider to be more appropriately dealt with in relation to whether or not the termination was harsh unjust or unreasonable. I conclude that the applicant was accorded procedural fairness. In relation to the necessity for warnings, I have come to the conclusion that it is not necessary for an employer to warn in relation to criminal misconduct in the circumstances of a case such as this. In any case, there was evidence given that apprentices employed by the respondent were advised generally of the need to not engage in conduct which would reflect adversely on the respondent.
HARSH UNJUST AND UNREASONABLE
Although I have come to the conclusion that there was a valid reason for termination, the Court must consider whether or not the termination was “harsh, unjust or unreasonable”, within the meaning of s 170DE(2) Industrial Relations Act CW (1988). The onus rests on the applicant to demonstrate that the termination was “harsh, unjust or unreasonable”: s 170EDA(1)(b) Industrial Relations Act CW (1988). The applicant, who was unrepresented at the hearing and presented as a shy and awkward young man, mentioned a number of factors in evidence concerning the termination which gave him a sense of grievance. Those factors which potentially raise the question of “harsh, unjust or unreasonable” are as follows: (1) The respondent did not comprehend that the applicant’s part in the whole episode concerned only two windows; (2) that other employees employed by the respondent, who had experienced brushes with the law had not been disciplined by way of termination of employment (for example the fellow employee in the cells on the night of the window breaking); (3) that the applicant could not find alternative employment or could not find an employer willing to take over the contract of training; and (4) that after the incident, the applicant, whilst expecting to be punished in some other way, did not think that his employment would or should be terminated.
In relation to factors (1), (2) and (3) above, I do not think the termination was harsh unjust or unreasonable. The respondent well understood the point the applicant was trying to make in relation to the extent of the applicant’s misconduct. It was the particularity of the misconduct which led to the respondent taking the view that the misconduct was serious enough to warrant termination. Similarly, this provided a reason to discriminate against the respondent when his misconduct was compared to other employees who had been guilty of other types of illegality. The difficulty of finding alternative employment in Darwin or the rest of the Northern Territory after such an incident is an unfortunate consequence of termination of employment in circumstances such as this but this alone does not permit me to characterise the termination as harsh unjust or unreasonable.
I do however find the decision to terminate the employment of the applicant unreasonable within the meaning of the Industrial Relations Act . The applicant has expressed that he thought he may face some form of discipline which was less than termination of employment. As a result of the evidence given by Mr Steve Bryan, I have come to the conclusion that a reasonable employer who had employed an apprentice pursuant to the scheme established in the Northern Territory Employment and Training Act (1991) would have accepted advice from the Authority concerning alternatives to termination.
Mr Bryan gave evidence that he was aware that the respondent wanted the contract of training to be cancelled; that he had sought to have negotiations with the respondent; that he had suggested alternatives to termination. Mr Bryan explained to the Court that he acknowledged that dismissal may have been appropriate and was open in the circumstances but that he (Mr Bryan), had urged alternatives. The respondent was not interested in pursuing those alternatives. Mr Bryan did not pursue the issue further with the respondent as Mr Bryan felt the training the applicant might receive if he returned to the workplace would no longer be satisfactory. Mr Bryan’s evidence was unchallenged.
Both Mr Bryan and counsel for the respondent described the Northern Territory Employment and Training Act (1991) as a “toothless tiger”, meaning, its provisions could not be properly enforced against employers. That may or may not be so, however, the Northern Territory Employment and Training Act (1991) sets up a mechanism for disciplining persons such as the applicant under Part 7 of the Act. Mr Bryan himself suggested alternatives available such as fining or suspending the applicant pursuant to the Northern Territory Employment and Training Act (1991). Mr Neat did not think any other alternative could show how seriously the respondent viewed the misconduct. A reasonable employer would, however, have taken advice from the appropriate regulating authority.
In Gregory v Philip Morris Limited (1988) 80 ALR 455 at 457 Jenkinson J said the word “unreasonable” is ultimately a question 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.”
Surely the values of the community are expressed in legislation such as the Northern Territory Employment and Training Act (1991). It maybe that the Act is a “toothless tiger” as has been suggested to the Court. At the least however, that legislation indicates that persons who are the subject of a contract of training are afforded extra protection by virtue of the Authority. Although the representative of the Authority in this case eventually agreed to cancellation of the contract of training, that was primarily for reasons of failure of negotiation and lack of confidence in a good training outcome for the applicant had he returned to the respondent’s employment. I find therefore that the respondent has breached s 170DE(2) Industrial Relations Act .
REMEDY
Reinstatement is the primary remedy. It is not sought by the applicant and is opposed by the respondent. The Court must still consider whether or not reinstatement is “impracticable”. On the basis of the evidence of Mr Bryan and the other material before me I find that it is impracticable to reinstate the applicant. I have already said that I will order the respondent to pay the applicant one weeks pay in lieu of notice and pay a further weeks pay for the loss of wages due to suspension. In assessing the appropriate compensation, I accept Mr Maley’s submission that given the applicant’s unhappiness at the work place and his evidence that he was considering an assignment of his contract, the employment would not have continued indefinitely. At the same time, the applicant has attempted to gain employment with every glazier in the Northern Territory. At the time of hearing he was still unemployed. He must accept that he will have great difficulty in obtaining employment as an apprentice glazier again and needs to actively seek other types of employment. I assess the appropriate amount of compensation to be the equivalent of eight (8) weeks wages.
THE COURT ORDERS THAT:
The respondent pay to the applicant damages in the sum of $170 being payment in lieu of notice pursuant
s 170DB Industrial Relations Act 1988 (Cth).
Further, the respondent pay to the applicant the sum of $170 being payment due and owing for the week
during which the applicant was suspended.
Further, the respondent pay to the applicant the sum of $1360 compensation
4. That the respondent be given 21 days to comply with these orders.
I certify that this and the preceding eight pages are a true copy of the reasons for judgment of Judicial
Registrar Blokland........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
Date:
The applicant appeared in person
Counsel for the Respondent: Mr P Maley
Solicitors for the Respondent: Withnall and Cavanagh
Date of hearing: 25 September 1995
Date of judgment: 17 October 1995
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