Vicki Ellington v Newlands Coal Pty Ltd
[2011] FWA 2150
•22 JULY 2011
[2011] FWA 2150 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Vicki Ellington
v
Newlands Coal Pty Ltd
(U2010/12652)
COMMISSIONER SIMPSON | BRISBANE, 22 JULY 2011 |
Termination of employment - summary dismissal alleged gross misconduct - reinstatement sought - dismissal unfair - reinstatement inappropriate - compensation appropriate - misconduct contributed to decision to terminate - compensation substantially reduced.
[1] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the FW Act”) by Mrs Vicki Ellington (“the Applicant”) who alleges that the termination of her employment with Newlands Coal Pty Ltd (“the Respondent”) was unfair.
[2] The application was filed on 21 September 2010 and a conciliation conference was conducted on 20 December 2010, which was not successful.
[3] On 12 April 2011 the Respondent made an application for directions regarding medical evidence. A decision was issued on 27 April 2011 dealing with this application. 1
[4] Orders were also issued for the production of documents at the commencement of the substantive hearing which was conducted at the Mackay Court House on the 3rd, 4th and 5th of May 2011. Closing oral submissions were made on 3 June 2011 and the hearing was re-opened on 14 July 2011 to address discrete questions regarding the availability of the Applicant’s former position and income earned since termination.
[5] At the substantive hearing the Applicant was represented by Mr A Slevin, Counsel who was instructed by Mr A Rich of Slater & Gordon Lawyers and the Respondent was represented by Mr J Murdoch, Senior Counsel who was instructed by Ms J Archibald of Blake Dawson.
BACKGROUND
[6] The Applicant was employed continuously at the Newlands Coal Mine from 11 September 1995 until 7 September 2010. The Applicant was first employed as a Supply Clerk. At the time of her termination the Applicant was employed as a Contracts Officer. Prior to the matters that were the subject of her summary dismissal the Applicant was not the subject of any formal or informal disciplinary process.
[7] In her role as Contracts Officer the Applicant was responsible for advertising of tenders, receiving and collating tender documents, preparing a written tender summary for each tender received, attending tender evaluation committee meetings and completing tender evaluation forms, preparing contract documentation for the successful tenderer and having this documentation signed by the relevant parties.
[8] The Applicant was summarily dismissed as a result of what the Respondent determined was gross misconduct in relation to the tender process undertaken for the production labour contract (“Contract”) at Newlands Mine.
[9] The Applicant’s total salary package at the time of dismissal was $136,504.
[10] The contractual value of the tenders which the Applicant was responsible for administering ranged from year to year but for the 2009 year was in the range of $71,000,000.
[11] Following receipt of a written complaint about the tender process undertaken for the Contract from Legra Mining Services Pty Ltd (“Legra”) the Respondent discovered that all original tender documents allegedly submitted by the winning tenderer, Crocksolid Mining and Industrial Labour Hire (“Crocksolid”) were missing.
[12] The Respondent commenced an investigation to locate the Crocksolid tender documents. Throughout its investigation, the Applicant maintained that the Crocksolid tender was submitted on 17 March 2009, which was two days past the closing date of the tender. The Applicant could not recall how the tender was submitted.
[13] The principal of Crocksolid, David Saunders, gave various conflicting accounts to the Respondent of how and when the Crocksolid tender was submitted.
[14] At the time of the tender closing date, Mr Saunders was subject to a post employment restraint of trade restriction with his former employer Legra, which restricted him from tendering for the Contract until on or about May 2009. The letter of complaint from Legra 2 included that they believed the winning company did not exist at the closing date for the tender.
[15] Separate to the investigation to locate the tender documents, the Respondent undertook an investigation into the tender process undertaken by the Applicant to see whether the Respondent’s formal tender procedure had been complied with.
[16] The Respondent’s tender procedure is contained in a document titled “Purchasing – Supply and Contracts Manual” (“Manual”). 3
[17] A meeting was held on 30 July 2010 between Mark Reynolds, Financial Controller, Alan Burgess, Supply and Contract Superintendent, and the Applicant to discuss the tender procedure undertaken by the Applicant.
[18] Following this meeting, it was also agreed that the Respondent would conduct a review of the Applicant’s email account to see whether there were any emails which might confirm how and when the Crocksolid tender was submitted.
[19] The Respondent conducted its review of the Applicant’s email account and on 2 September 2010 discovered an Email Exchange between Mr Saunders and the Applicant during the period 3 June to 16 June 2009 consisting of six emails.
[20] Following discovery of the Email Exchange a disciplinary meeting was held on 7 September 2010 and the findings of the investigation into the location of the tender documents and the tender procedure compliance review were put to the Applicant. The Applicant responded to the findings and those responses were noted in the meeting notes that were taken.
[21] The Email Exchange of 3-16 June 2009 was also presented to the Applicant and the Applicant was asked to explain the emails. The Respondent concluded that the Applicant was unable to provide a satisfactory explanation for the Email Exchange of 3-16 June 2009 and it was decided that on the balance of probabilities the Applicant had improperly assisted Mr Saunders to win the tender.
[22] The reasons given for dismissal included in a termination letter dated 7 September 2010 were as follows,
“............................
On the balance of probability, the evidence presented before me supports the fact that you:
(a) failed to comply with numerous requirements of the XCQ Purchasing and Supply Contracts Manual when considering when the ATC tenders;
(b) breached your duties to work ethically in line with the Xstrata Business Principals dated 2008.
(c) knowingly mislead senior management about details and circumstances of the missing Crocksolid Mining and Industrial Labour Hire tender and tender compliance timings at previous meetings;
(d) knowingly mislead senior management at investigation meetings on 30 July 2010 about the whereabouts of the missing Crocksolid Mining and Industrial Labour Hire tender;
(e) knowingly mislead senior management at investigation meetings on 30 July 2010 about the dates upon which the Crocksolid Mining and Industrial Labour Hire tender was submitted;
(f) have performed actions which could be seen to give rise to a breach of your contractual duty of confidentiality in communicating labour hire rates to Mr David Saunders of Crocksolid Mining and Industrial Labour Hire which may have contributed to this tender being successful; and
(g) have performed actions which could be seen to give rise to a breach of implied contractual duties of fidelity by assisting with the completion of Tender Documents for Mr David Saunders of Crocksolid Mining and Industrial Labour Hire and then conspiring with Mr Saunders about why his tender was submitted late.
I have not reached this decision lightly and have given due consideration to the impact of my decision, your comments in relation to these breaches, your personal circumstances, your employment history with the Company, and consistency of disciplinary outcomes in similar circumstances...”
[23] Pursuant to s. 123(1)(b) of the FW Act the Applicant was not paid notice of termination as she was dismissed for serious misconduct.
[24] With respect to long service leave, the Applicant was advised by email on 22 September 2010 that she needed to return a completed application claiming payment of her long service leave from the Long Service Leave Board. To date, the Applicant has not returned her application.
CONSIDERATION
The Email Exchange in June 2009
[25] Of central importance is the matter of what is be to properly understood from an email exchange between Mrs Ellington and Mr Saunders between 3 June 2009 and 16 June 2009.
[26] Of the seven reasons for dismissal included in the letter of termination, six of those reasons being (b) through to (g) arise from the email exchange between 3 June 2009 and 16 June 2009.
[27] In closing submissions the Respondent argued that the chain of emails 4 is direct evidence of her misconduct, capable of being read and interpreted, being ordinary words given ordinary meanings to be contrasted against Mrs Ellington wanting to give the words and phrases meanings which the Respondent argued strain the ordinary meaning of the words and expressions and at worst put quite artificial meanings on the words.5 The Respondent maintains that the Applicant conspired with Mr Saunders to assist him win a contract.
[28] The Applicant has argued that the emails do not say what the Respondent alleges, that inferences have to drawn in order to reach the conclusion reached by the Respondent which are speculative and in circumstances such as this case where the Applicant has 15 years unblemished service and it is accepted that she had a reputation for honesty and integrity the inferences are not available on the evidence.
[29] The Applicant drew attention to the statement of Mr Reynolds 6 and the cross examination of Mr Reynolds7 that these allegations were based on inferences he drew from the email exchange.
[30] Mr Reynolds’ view of the emails was stated in cross examination, 8 namely, that Mrs Ellington indicated she would prepare a tender document for Mr Saunders, and she then supplies him with a set of rates which were the lowest.
[31] The Applicant contends the evidence tells strongly against the inferences Mr Reynolds reached from the emails. My approach has been to first consider competing arguments put specifically regarding the emails themselves and following that to consider the emails in the broader context of other dispute facts between the parties.
[32] Email 1
Mr Saunders to Mrs Ellington on 3 June 2009 at 10.30am: “Vicki, This is my new email address. Have you had a chance to look over those rates for me Please. All the Best. Crockie.”
[33] Mrs Ellington claimed that Mr Saunders’ email was merely following up previous requests made by him in telephone conversations to provide him rates he submitted in a tender in March 2009. It was argued that it was uncontested that the labour hire contract opened on 3 March 2009 and closed 15 March 2009. 9
[34] The Respondent argues a plain reading of Email 1 however indicates that Mrs Ellington had agreed to “Look over those rates”. The Respondent pointed to the fact that it does not say “provide a copy of my rates”, or words to that effect. 10
[35] The Respondent argued that contrary to the Applicants contention that this email was simply a request from Mr Saunders to Mrs Ellington to let him know the rates out of his tender it is actually a request to assist him to prepare rates. 11
[36] Mrs Ellington said she received a call from Mr Saunders on 15 March 2009 asking her if his tender could be late and she told him she would check. Mrs Ellington spoke to Mr Cook the Commercial Manager for Newlands surface operations at the time. 12 This is consistent with Mr Cooks evidence who said he had a conversation with Mrs Ellington at this time about the matter.
[37] Mrs Ellington also informed Mr Cook that Mr Bremner wanted Crocksolid to be invited to tender for the contract and the Crocksolid tender would be late. 13 The fact that these discussions occurred indicates that Crocksolid was invited to tender in March 2009.
[38] The discussions that occurred between Mrs Ellington and Mr Cook in March 2009 were in close proximity to the time Mrs Ellington believed Crocksolid submitted a tender which increases the likelihood that her claim is correct.
[39] Mr Burgess, the Supply and Contract Superintendent at Newlands Coal who Mrs Ellington reported to directly, also recalls Mrs Ellington mentioning at a supply meeting that labour hire tenders had not been opened, however cannot recall which meeting. 14 The Applicant says this indicates that Mrs Ellington was reporting on the status of the tender for the labour hire contract and the fact that they had not been opened, and further is consistent with her evidence.15
[40] Mr Burgess noted in the document titled “Contract Update – 25/03/09 Surface Operations”, 16 prepared by Mrs Ellington, that it says that “Tender evaluations have commenced”. The Respondent argued this showed Mrs Ellington incorrectly referenced when she commenced the tender evaluations.
[41] The Applicant stated that no inconsistency arises from those comments as the document was a status report of 25 March 2009 that records in short hand, various information about the production labour contract. I agree with the Applicant that this point.
[42] The Manual required that tenders be opened within 5 days of a tender offer closing. Mrs Ellington said the reason she did not open the tender documents associated with the Production Labour Tender earlier because the maintenance contracts commenced immediately. She also had two other tenders to deal with at the same time. 17 The Applicant said this is consistent with her practice of opening tenders in accordance with their urgency and the work pressures at the time. The Approval to Contract (“ATC”) shows that the work associated with the Production Labour Tenders that Crocksolid tendered for was to commence in November 2009.
[43] Mrs Ellington said she was asked by Mr Bremner (the Open Cut Mine Manager, and the “owner” of this tender within the Respondent organisation) and Mr McNab to open the Production Labour Tender in June. 18 This explains the reason the tenders were opened when they were and that the timing arose from the request of the contract owners. This is put forward as a logical explanation for why she did not respond earlier to the request from Mr Saunders to provide him his rates as he had requested.
[44] Mrs Ellington said that when Mr Richardson had an informal discussion with Mr Burgess and Mrs Ellington about the date the tender was received after the complaint from Legra he was advised that it was 17 Mar 2009. 19 This indicates Mrs Ellington has been consistent about that claim.
[45] Mrs Ellington made the claim that Mr Saunders was sometimes unprofessional in the way he conducted his business. While Mr Saunders was never called to give evidence I accept that the evidence of the Respondents witnesses with regard to the manner in which Mr Saunders responded to requests for assistance in locating his tender tends to support Mrs Ellington’s claim that he was sometimes unprofessional.
[46] Mrs Ellington also gave evidence that she spoke to Mr Richardson about her concerns and the professionalism of Crocksolid. 20 Mr Richardson does not recall that discussion with the Applicant but does not deny that it occurred.21
[47] In my view this adds to the plausibility of Mrs Ellington’s claim that Mr Saunders was in fact requesting a copy of the rates he had submitted several months earlier because he had not retained his own copy.
[48] The explanation provided by Mrs Ellington, particularly regarding work pressures at the time; Mrs Ellington’s explanation for the delay in opening the tenders; and evidence supportive of a view that Mr Saunders did not conduct his business professionally, make Mrs Ellington’s explanation for the first email plausible.
[49] Email 2
Mrs Ellington to Mr Saunders on 15 June 2009 at 3:11pm: “Righto Need your proper name and abn please and I’ll have some documents – the tender for you to sign tomorrow. Ta, Vicki”
[50] The Respondent argues a clear reading of this email indicates that Mrs Ellington was in the process of preparing the tender document on Crocksolid’s behalf and was close to sending it to Mr Saunders for signing. 22 Mrs Ellington’s explanation is that she was amending the tender document by adding in the company’s proper name and ABN and was then going to send it to Mr Saunders so he could initial those amendments.23
[51] The Respondent argues this explanation is highly unlikely. The email clearly states that Mrs Ellington will have the tender for him to “sign” not “initial”, and that an experienced Contracts Officer would not confuse the words “sign” with “initial” or use them interchangeably. 24
[52] The Applicant in submissions attacks the Respondents approach on this point as “nitpicking”. Mrs Ellington is not legally qualified and this stage of the tender process was early and had a number of stages to progress through after this point which involved further scrutiny. I am inclined to agree with the Applicant that the use of the word ‘sign’ and not ‘initial’ is not significant.
[53] The Applicant states that the tender committee comprising Mr Bremner, Mr McNab and Mrs Ellington, which met at 1pm on 15 June (which was before the second email was sent that day at 3.11pm), agreed upon a tender recommendation based on awarding the contract to Crocksolid. 25 This indicates that the usual tender process was followed and the committee made the decision to recommend a tenderer and not Mrs Ellington doing this alone.
[54] In the Tender Recommendation Summary, dated 15 June 2009, it is noted that the Crocksolid tender was non-conforming due to the time requirements and the business name. 26 This is consistent with the email request made by Mrs Ellington later that day in the second email to Mr Saunders seeking to rectify the problem of the incorrect name.
[55] The Applicant says this is also significant because it is the day before the email which sent the rates to Mr Saunders which I refer to below as email four.
[56] Further, the Applicant says the Tender Analysis & Recommendation document records that Crocksolid submitted rates two days after tender close on 17 March 2009 and records that the Crocksolid tender was non-conforming as a late tender that was accepted. It is further noted on the rates page that the Crocksolid tender was non-conforming because of “a delay of 2 days to submit tender documentation”. 27 These documents again arise from the committee process and were countersigned by a large number of managers, indicating that a written tender was received on 17 March 2009.
[57] The Respondent submits that Mrs Ellington’s evidence 28 that Mr Bremner and Mr McNab reviewed the tender documents at the meeting on 15 June 2009 is untrue. Further that such a claim is inconsistent with the evidence of Mr Richardson.29
[58] The Respondent submits that there is no credible evidence which indicates that any person has seen a tender document submitted by Crocksolid relating to the production labour contract. The Applicant response is to say that there is no evidence that they did not.
[59] The Applicant argues the evidence of Mr Richardson on this point is not probative either for or against Bremner or McNab having seen the tender. In cross examination Mr Richardson admitted that it was possible that Mr Bremner was provided with the tender documents but didn’t look at them. During his brief conversation with Mr Bremner, Mr Richardson did not press him on whether he was provided with the documents. 30
[60] The dispute over this question gives rise to a separate question and dispute between the parties which was the failure of either the Applicant or the Respondent to call Mr Bremner or Mr McNab to give evidence. I will deal with that matter later in the decision however on the question of what can be shown from the evidence regarding the committee process on 15 June and the documents Mrs Ellington prepared for the 15 June meeting, she is the only witness who has given direct evidence. On the evidence available I do not believe a clear finding can be made either way as to whether Mr Bremner or Mr McNab were shown the tender, however it is plausible that Mrs Ellington did take the Crocksolid tender with other tender documentation to the meeting on the 15 June along with the evaluation sheet.
[61] The parties are in dispute about the extent of work Mrs Ellington performed on Friday 12 June 2009 in preparation of the tender documents for the committee meeting on Monday 15 June. Mrs Ellington states that she opened the tenders on Friday, 12 June 2009. 31 This is recorded in Mrs Ellington’s diary note attached to her statement.32 The diary notes state :
“4. Production labour tender opened – rates on spreadsheet for JB”
5. Started Tender Analysis for Prodn Labour and Topsoil General Earthworks”
[62] The Respondent maintains Mrs Ellington was in a position on Friday 12 June 2009 to provide Mr Saunders with his rates if her claim that a tender was submitted were true, but she did not. Mrs Ellington admits that Mr Saunders had been “pestering” her for the rates 33 and that she knew he was anxious to get the rates.34 Notwithstanding this, Mrs Ellington did not provide the rates until 9.29am on 16 June 2009.
[63] The Respondent maintains Mrs Ellington’s diary note of 12 June 2009 indicates that she started the tender analysis for the production labour contract and that she put “rates on spreadsheet for JB” (Justin Bremner).
[64] The Respondent also argues that Mrs Ellington’s second statement 2011 35 was inconsistent with her oral evidence36 and that her version of events has been recreated following discovery of the email exchange between her and Mr Saunders of 3 to 16 June 2009.
[65] The Applicant argues the work diaries show she opened the Production Labour tenders on 12 June and 15 June 2009. Those notes show that one of the last of the many tasks performed on 12 June was to open the Production Labour tender with the rates to be put on a spreadsheet. The diary also notes that the Applicant listed at the top of the things to do at the end of the day was work on the production labour tender. It is also noted that the Applicant did a check of the Australian Business Register. The notes for meeting on 15 June 2009 indicate that the Crocksolid tender was preferred and that it was missing information in the tender documents. On 16 June the diary notes the decision from Mr Bremner on the tenders and revised tender analysis for the tender. 37
[66] The Applicant submits there is no inconsistency as Mrs Ellington gave evidence that her diary notes were for her use only, they were not documents of record and that she used the concepts interchangeably.
[67] Further, that Mrs Ellington’s practice was to open tender documents herself and commence the tender evaluation process and fill out the tender recommendation form and if time permitted a summary pricing. 38 This fact explains how the information contained in the ATC documents came to be there and when it was entered.
[68] A meeting would be arranged with the tender evaluation committee to discuss what information was missing and if there were any questions she needed to put to the tenderers. 39 This practice explains why Mrs Ellington emailed Mr Saunders seeking his proper name and ABN.
[69] In have considered the competing arguments regarding the second email including Mrs Ellington’s explanation for the words used, the use of the word ‘sign’ rather than ‘initial’ and the inconsistencies claimed by the Respondent to exist between Mrs Ellington’s diary notes and her evidence. As in the case of the first email I find Mrs Ellington’s explanation regarding email two to be plausible.
[70] Email 3
Mr Saunders to Mrs Ellington on 16 June 2009 at 8:45am: “Vicki, My full name is David Neil Saunders & the Company is Crocksolid Mining & Industrial Labour Hire. ABN Number is 85 982 218 811. Much Appreciate you doing this for me Vicki. I must owe you heaps now. All the Best. Crockie”
[71] The Respondent argues had Mr Saunders been pestering her for the rates he would surely have renewed his request. Had Mr Saunders been so anxious to receive the rates so that he could include them in other tenders, he would have immediately replied to her email requesting that she provide them to him.
[72] Mrs Ellington stated that giving Mr Saunders his own rates was not a priority for her on the 12 June or the 15 June. 40 Given the evidence regarding workload and the timeline of events there is logic to her claim of prioritising her own work on those days over attending to the request of a tenderer.
[73] Mrs Ellington states that she amended the original document by handwriting in the correct business name and ABN in accordance with Mr Saunders’ email three. However, Mrs Ellington did not send an amended document to him despite it being common ground that she intended to as Email 2 indicates. 41 Mrs Ellington provided the following reason for not sending the document to him:
“I wasn’t asking him to sign the actual tender documents; what he was going to do was initial where I had made changes to the tender document, which was to put his correct business name in there.” 42
[74] When asked why she never sent the document back to Mr Saunders she said:
“Because I change them, I knew what the business name was, I had this email.” 43
“because by that stage I am just in the middle of evaluations we are doing and I was more interested in chasing up the budget numbers and how we were working out the tender recommendation summary and the ATC and I was extremely busy. It did not get done.” 44
[75] The Respondent argues it is unlikely Mrs Ellington would have overlooked this step. The Respondent submits that Mrs Ellington did not amend an original tender document and it is more probable that Mrs Ellington never actually prepared the tender document for Crocksolid and instead merely inserted rates for Crocksolid into the spreadsheet attached to the Tender Recommendation Form. 45
[76] It is of concern to me that according to Mrs Ellington’s own evidence she amended the Crocksolid tender bid for a multimillion dollar contract without returning the document to the tenderer for confirmation of those amendments. This was not appropriate. As I understand the process from that point, Mrs Ellington, upon being advised of the preferred tenderer would liaise with the relevant officers within Xstrata required to sign off the Tender Recommendation Form for the contract. Once advised who the successful tenderer was Mrs Ellington would send out a copy of the contract for the signing by the successful tenderer and the Agreement to Contract process commenced.
[77] This process was the means by which Xstrata finalised its approval process before it signed and entered into the contract including the contract owner liaising with the Accounts department over rates. 46
[78] This process explains the role of the ATC documents and the roles of other areas of the business before a contract is entered into. It may well be that due to workload at the time and this being one of a number of steps to get to final contract that Mrs Ellington’s claim that it just did not get done is true. On that basis I do not find her admitted failure to return the document to Mr Saunders is of itself compelling evidence that there was no Crocksolid tender.
[79] Email 4
Mrs Ellington to Mr Saunders on 16 June 2009 at 9:29am: “[Copy of rates included]. These are your rates – any drama? Give me a call. Ta, Vicki”
[80] The Respondent says that on 16 June 2009 at 9:29am Mrs Ellington provided Mr Saunders with rates which undercut the lowest rates from the other tenderers.
[81] The Respondent says that it is clear from the email series that Mrs Ellington was giving Mr Saunders a set of rates that she was proposing to include in his tender and that he was giving her permission to “run with” those rates. The rates were provided to Mr Saunders’ during the middle of the tender evaluation process after Mrs Ellington had opened and analysed all of the other tenderer’s documents.
[82] Mrs Ellington says that she was giving Mr Saunders a set of rates that he already had in his tender and that the rates had come out of his tender document. 47 However, the Respondent says the clear language of emails 3 and 4 is not consistent with this.
[83] It was put for Mrs Ellington that at a meeting with Mr Gilmore of Legra on 28 June 2010, Mr Richardson was told there was a restraint of trade on Mr Saunders from conducting business in the labour hire area and that Mr Gilmore was concerned that Mr Saunders might try to take Legra’s business as he knew Legra’s rates. 48
[84] Email 5
Mr Saunders to Mrs Ellington on 16 June 2009 at 10:16am: “Vicki, Those RATES are Good to run with. All the Best. Crockie.”
[85] The Respondent saw the fifth email as Mr Saunders, having been provided with the rates by Mrs Ellington, giving his approval for those rates to be put forward as his tender.
[86] Mrs Ellington was adamant that the rates came from Mr Saunders’ tender. 49
[87] Email 6
Mrs Ellington to Mr Saunders on 16 June 2009 at 10:58am: “Ps – you submitted your tender on 17th March and were late by two days as you need confirmation of your trading name.”
[88] Mrs Ellington states that Mr Saunders knew that he had got his tender in late. 50 Mrs Ellington also states that he would have known this because he “was needing confirmation” of his trading name.51
[89] Mrs Ellington’s explanation for Email 6 was that after reviewing her email to Mr Saunders that contained his rates (Email 4), she realised that in cutting and pasting his rates from the Evaluation Sheet she made it look as though his tender was a conforming tender. 52
[90] The Respondent says Mrs Ellington’s explanation here is unlikely to be true. Mrs Ellington does not advise Mr Saunders that his tender is “non-conforming”. Had the purpose of the email been to clarify this, Mrs Ellington would have expressly told him this in the email.
[91] The Respondent says that it appears on the face of the emails that Mrs Ellington was not advising Mr Saunders that he had submitted a non-conforming tender but was in fact telling him the story that she would be including in the tender documentation (i.e. the tender evaluation and recommendation documents) in relation to when his tender was supposedly submitted.
[92] Mrs Ellington said in evidence “No, I’m not sure if Mr Saunders would have understood what I was talking about” 53in response to a question as to why she did not say it was a non-conforming tender instead of the language used in email 6.
[93] In relation to email four it is accepted that Mr Saunders was subject to a restraint of trade arrangement with Legra his former employer. Is also clear from Mr Richardson’s evidence that Mr Gilmore was concerned that Mr Saunders might try to take Legra’s business as he had an existing relationship with Legra’s clients and knew Legra’s rates. 54
[94] This evidence persuades me to the view that it is likely that Mr Saunders was reasonably familiar with Legra’s existing rates structure, and therefore would also be likely to have a reasonable idea as to the range of rates within which Legra would be likely to tender.
[95] I can understand that Mr Gilmore would be concerned about that, as Mr Richardson’s evidence said he was. On that basis this evidence lessens the likelihood that Mr Saunders needed to recruit Mrs Ellington to participate in a plot with him to undercut Legra, and for that matter other tenderers, as it is likely he already knew the existing rates in the contract area he was now contesting against his former employer.
[96] If I was more inclined to accept the Respondents understanding of the meaning of the first four emails then it follows that emails five and six would be consistent with a view that Mrs Ellington was participating in a plot with Mr Saunders as alleged.
[97] In the alternative if I am more inclined to accept the explanations provided by Mrs Ellington as plausible for the first four emails then the interpretation placed on the fifth and sixth emails by Respondents becomes less likely. If it is the latter then Mrs Ellington could not be expected to be capable of explaining why Mr Saunders chose the words he did in email five and similarly the wording of email six would make sense when in the context of the whole email chain. It was clearly in error for Mrs Ellington to have placed Crocksolid’s name under the heading ‘Conforming Tenders’ in email four as she did, and this is a plausible explanation for her choice of words in email six.
[98] On consideration of the evidence set out above regarding the email chain I am unable to conclude that the inferences the Respondent seeks to draw are any more than at their highest possibilities. I have also considered evidence regarding Mrs Ellington’s capacity to recall matters between March 2009 and June 2009. She was the only witness called who could to give direct evidence on the email exchange in June 2009. Certain evidence going to her ability to recall events at that time does not change my opinion regarding the emails. Therefore I now turn to consider other disputed facts.
[99] Before doing so however I make the comment that it was inappropriate for Mrs Ellington to have participated in the email exchange that she did with Mr Saunders in the middle of a tender process for a multi-million dollar contract. Crocksolid was one of the competing tenderers and she had within her knowledge the rates of all competing tenders at the time she sent the second, third, fourth, fifth and sixth email. Email four was particularly inappropriate in that she was forwarding the rates of pay to one of the competing tenderers, which would ultimately become the successful rates. She did this at a time that the tender process was still open and before a final decision on the preferred tender had been made.
Other Disputed facts
Saunders Email to Ellington on 9 July
[100] On 9 July 2010, David Saunders, principal of Crocksolid, forwarded the below email exchange to Mrs Ellington’s personal email address.
Email from [email protected] to Crockie Saunders on 7 July 2010 at 3.07pm:
CROCKIE…ANDREW RECKONS WE HAVE NOTHING TO HIDE…AND THAT VICKI ACTUALLY DID THE RIGHT THING BY HER BOSSES AT XSTRATA….SO LYLE CAN GO PLAY WITH HIMSELF…HEE HEE
CHEERS
JC
Email from [email protected] to [email protected] on 7 July 2010 at 3.02pm:
Subj: Crocksolid restraint
John – If Lyle does commence any action we would not be able to act given he first consulted us in relation to Crocky before we referred him to Clayton Utz. That said I spoke with Crocky – He advised that he was a good boy and did nothing during the period of the restraint which finished on 6th May 2009. The Crocksolid business was certainly established after that date. He said that when the business was established he rang a Vicki Ellington who was a mate of his out at Newlands and asked if there was anything going – She advised that a tender had just closed – Crocky asked if he could still submit a tender and she said to him to tell her his rates – He did and Crocksolid was the cheapest and so got awarded the contract – which Crocky says was dated 29 March 2010 (some 8 months after the restraint ended).
I think he was more concerned about his mate Vicki Ellington getting in trouble than himself.
The way I see it Crocksolid lodged a late (probably non-conforming) tender over the phone and was awarded the contract and I cannot see that Crocksolid or Crocky for that reason is likely to be in any strife – Vicki may be in strife if she has breached internal procedure for Xstrata but since we do not know what internal procedures they have it is hard to comment – at the end of the day Vicki awarded the contract to the cheapest tenderer so she has not done anything financially wrong by Xstrata but then Xstrata may have a strict tendering protocol that has to be followed and may not tolerate anyone internal to their company who does not follow the rules. So if all this came out Vicki may be in trouble and I suggested to Crocky that he may have to employ her or find her a job if she loses the one she has.
Andrew Coates
Partner
[101] Prior to sending the email exchange, Mr Saunders phoned Mrs Ellington at work to ask her for her personal email address. 55 Mrs Ellington admits that at the time of this phone call she was aware of the letter of complaint from Legra56 and was aware that an investigation was underway by Mr Richardson to locate the Crocksolid tender document.57
[102] Mrs Ellington had also met with Mr Richardson on three occasions prior to receiving the email to discuss how and when the Crocksolid tender had been received. Also, Mr Richardson had only days earlier asked her to sign a statutory declaration confirming, amongst other things, that the tender was received on 17 March 2009.
[103] Against this background, the Respondent submits that Mrs Ellington compromised herself by giving Mr Saunders her personal email address. If innocent, Mrs Ellington would surely have asked him to send the email to her work email address.
[104] The evidence discloses Mrs Ellington showed Mr Burgess a copy of the email and rang Mr Bannerman in Brisbane to advise him about the email. 58
[105] The Respondent maintains that as Mrs Ellington did not refer to this email exchange in her Application or in her first statement, 59 it suggests a guilty mind.
[106] The Applicant has argued that the email from Mr Saunders on 9 July 2010 was not a key issue in the dismissal. Mrs Ellington provided it to the Respondent at the first opportunity. It was not raised in the meeting on 30 July 2010 only three weeks later about the tender process.
[107] The Applicant states it was not mentioned in the disciplinary meeting on 7 September 2010. 60 It was not a matter considered by Mr Reynolds, Mr Cleaver, Mr Solomon and Mr Richardson when deciding to dismiss Mrs Ellington.61 It was not referred to in the termination letter.62 Further, the content of the email is hearsay and is unreliable as an account of what occurred during the tender process. In any event, the content of the email is inconsistent with the Respondent’s evidence, in particular Mr Cook’s account of a conversation with Mrs Ellington in March 2009 about Crocksolid tendering for the contract.63 It is at best an example of a further conflicting version of events in the various accounts given by Mr Saunders.64
[108] It is my view any evidence about what Mr Saunders’ may have said about how and when the tender was submitted was generally unreliable. The evidence from other witnesses is that he provided various accounts of when and how he submitted the tender including that it was lodged but he would not say when, it was lost in a flood and it was hand delivered on 28 May 2009. He had a clear motive to deny Mrs Ellington’s claim about the date the tender was submitted. I am not prepared to place any weight on the hearsay evidence in the email he forwarded to Mrs Ellington on 9 July 2010. It is quite possible the Solicitor who provided the advice was not told the truth.
[109] The Respondent has interpreted Mrs Ellington’s failure to challenge Mr Saunders’ regarding the content of the email as evidence of her guilt. The truth could just as easily be that she elected to report it directly to the Respondent as she did, instead of challenging Mr Saunders’ directly.
[110] I am also satisfied that the explanation from the Applicant as to why this email was not referred to in her first statement is reasonable.
[111] Further, as the Applicant has argued, the version of what may be understood to have occurred from this email is inconsistent with what the Respondent alleges Mrs Ellington did. 65
[112] I do however agree with the Respondent that it was unwise for the Respondent to provide her personal email address to Mr Saunders at the time, however having received a subsequent communication from Mr Saunders at that email address, she provided it to her employer shortly afterwards.
Telephone conversation with Ross Bannerman on 12 July 2010
[113] Mr Bannerman, is the Group Manager - Legal for Xstrata Coal Queensland and is responsible for all legal and some commercial issues at Newlands Coal Mine. There is a dispute about whether in the course of contacting Mr Bannerman by telephone regarding the email exchange whether Mrs Ellington read the email exchange twice over the phone to Mr Bannerman. This evidence is disputed by Mr Bannerman who states 66 that:
“I cannot recall this telephone conversation. However, I can recall having a telephone conversation with Mrs Ellington about the Crocksolid tender around March 2010. I recall Mrs Ellington saying that David Saunders, principal of Crocksolid, had sent her an email to her personal email address. I cannot recall whether Mrs Ellington told me what the email said...”
[114] Initially Mr Bannerman’s evidence was that he did recall a conversation with Mrs Ellington in March 2010, not July 2010, however on having read Mrs Ellington’s further statement dated 18 April 2011, Mr Bannerman accepted Mrs Ellington’s claim that the conversation occurred in July 2010. However he denied that Mrs Ellington read the contents of the email to him over the phone. 67 Mr Bannerman maintained the conversation was primarily about the restraint of trade issue which he agreed he discussed with Mrs Ellington.
[115] Mr Bannerman claimed he was shocked on reading the email of 9 July 2010 and that had that information been disclosed to him then, as Legal Counsel for Xstrata Coal Queensland, he would have been obliged to take immediate action in response to it.
[116] Mr Bannerman accepted in cross examination he did not have a clear recollection of the phone conversation. 68 He also stated he
“wasn’t all that interested in the phone conversation or the topic of it because it seemed to be regarding the Legra restraint of trade issue and I didn’t think that was particularly important to our affairs at that time.” 69
[117] The Applicant argues that the conflict in the evidence about the conversation with Mr Bannerman on 12 July 2010 is not a key matter. Mrs Ellington relies on her diary notes as to the date of the conversation. Mr Bannerman on seeing those notes accepted that his initial recollection as to the date of the conversation was incorrect. Mr Bannerman accepted that the conversation did occur in July 2010 and that the topics of the email and Mr Saunders’ restraint of trade were discussed.
[118] I agree with the Applicant’s contention that the resolution of this contest in the evidence is not a key matter. In any event Mrs Ellington showed the email to Mr Burgess who subsequently showed it to more senior management. She would not have done this if she was trying to hide its contents.
Concerns raised by Mrs Ellington about Crocksolid tender
[119] Mrs Ellington raised at a supply meeting that she had concerns about Mr Bremner’s and Mr McNab’s involvement in the Production Labour Contract and that she thought they were going to make poor decisions in relation to the awarding of the tender based on their relationship with Mr Saunders. 70
[120] Mrs Ellington complained to Mr Burgess about Mr McNab’s preference for Crocksolid. 71 This indicates Mrs Ellington was not disposed to assist Mr Saunders.
[121] Mrs Ellington spoke to Mr Burgess about Mr Bremner talking to Mr Saunders about the tender process which required Mr Burgess to take action to require Mr Saunders to only deal with Mrs Ellington. 72 Again this fact indicates that Mrs Ellington was not disposed to be involved in a plot with Mr Saunders’. .
[122] Mr Burgess accepted that these matters were raised by Mrs Ellington. From the statement of Mr Burgess, 73 Mrs Ellington was in fact raising concerns about the relationship between Mr Bremner, Mr McNab and Mr Saunders both before and after the emails exchanged between 3 June and 16 June.
[123] This evidence is indicative of behaviour which makes it less likely to believe the Respondents view that Mrs Ellington was guilty of conspiring with Mr Saunders.
Compliance with the Respondent’s tender procedure
[124] The disputed facts on this issue go to the first matter listed in the termination letter as follows:
(a) failed to comply with numerous requirements of the XCQ Purchasing and Supply Contracts Manual when considering when the ATC tenders;
[125] The Respondent has said that the tender procedure used at site is partly contained in the Purchasing – Supply and Contracts Manual (“Manual”) and has partly developed informally over time. 74
[126] The Respondent acknowledged that parts of the Manual were not strictly complied. However, the Respondent submits that those instances of non compliance were trivial and did not affect the integrity of the tender procedure. An example includes a failure to keep a tender opening box. 75 Mr Burgess further states that the Contracts Officers were aware of this and it was accepted practice for them to receive the tenders directly.76
[127] The Respondent accepts that the Manual required tenders to be addressed to “Oaky Creek Coal” that the Manual was clearly out of date in this respect however the Contracts Officers were expected to use their commonsense in interpreting the document and the most recent version of the Manual was to be complied with. 77
[128] Further, the Respondent accepted that the Commercial Manager did not always appoint the Tender Committee as required by the Manual and that normally the Contract Administrator, in conjunction with the Contract Owner and the Manager would form and comprise the Tender Committee. 78
[129] The Respondent said that although a Tender Committee was not always appointed by the Commercial Manager, a Tender Committee was always formed.
[130] The Manual requires that tenders be opened within five working days after the closing date. The Respondent accepts that justifiable delays in opening the tenders may occur but that the tenders must be opened as soon as reasonably possible. 79
[131] The Respondent submits that the instances of non compliance by Mrs Ellington which were identified during the investigation were not trivial and went to the heart of the Respondent’s tender process. This includes her practice of opening tenders on her own. 80
[132] It was Mrs Ellington evidence that she always considered that the Manual was a rough guide 81 as there were aspects of the Manual which were incorrect or not followed, however in her further statement Mrs Ellington acknowledges that Mr Burgess did refer from time to time to the Manual.82
[133] It was the evidence of Mr Burgess that he recalled telling Mrs Ellington to use her common sense and on numerous occasions emphasising to the Supply Team that the Manual was to be complied with; emails were sent around advising of amendments to the Manual and of an expectation that the Manual was to be complied with. 83
[134] Further the Respondent said that Mrs Ellington failed to keep a copy of the Invitation to Tender sent to Crocksolid or any evidence confirming that the Invitation to Tender had been sent. This documentation was retained for all other tenderers. Also, all documentation relating to the tender submitted by Crocksolid is missing and there is no record of it ever having been received.
[135] Further, the Respondent submitted that Mrs Ellington did not open the tenders for the production labour contract until approximately three months after the closing date and that a three month delay is unacceptable in the circumstances and an obvious breach of the Respondent’s tender procedure.
[136] The Applicant referred to the heading “Introduction” to Section 2 which bears the title “Contracts Procedure” and describes the Manual as a guide.
[137] This was contrasted to the Introduction to Section 1 which is entitled “Purchasing and Supply Procedures” which states more clearly a requirement to comply with it.
[138] The Applicant drew attention to the evidence of Mr Cook who as Commercial Manager gave evidence that he wasn’t aware of the contents of the Manual and had never been trained in its contents. 84
[139] Further, Mr Bannerman in his evidence 85 confirmed there was no mention of the Manual in training conducted in 2008 and that was the only evidence regarding training in the matter.
[140] Mr Reynolds gave evidence that he was required by Mr Richardson to conduct an investigation into the procedures followed in the tender process for the labour hire contract. 86 The 3 pages of notes of Mr Reynolds’ review were included in the termination documents relied upon for the dismissal and annexed to the termination letter.87
[141] Concerns of Mr Reynolds regarding the tender procedure followed were: (1) no evidence of tender submission; (2) no evidence Crocksolid being invited to tender; (3) no evidence that tender documentation was received; (4) no tender opening record; and (5) a significant delay between the closing date and the opening of the tender. 88
[142] The Applicant claims the first three concerns are baseless on the grounds that there is evidence that the Crocksolid tender exists.
[143] Regarding the fourth allegation that the opening procedure was not complied with, the Applicant says it was not Mr Cooks practice, for example, to form a tender opening committee, whereas this was a requirement for the opening process described in the Manual.
[144] The fifth reason of the 12 week delay was related to workload issues discussed earlier.
[145] It is clear certain practices were allowed to develop within Xstrata outside the guidelines set out in the Manual such as a failure to maintain a tender box and failures to establish a tender committee in accordance with the guidelines. It also appears Mrs Ellington did not receive specific training in the Manual and there was evidence of workload pressures.
[146] The Respondent describes the more general failures to comply with the Manual as trivial compared to the breaches of Mrs Ellington in opening tenders without a witness present, failing to retain a copy of the invitation to tender, all documentation relating to the tender submitted by Crocksolid missing and no record of it ever having been received and finally the failure to open the tenders for 12 weeks after the tender closed.
[147] I agree with the Respondent that Mrs Ellington’s breaches were of a more serious nature. It is apparent from the evidence that it would not have been possible for Mrs Ellington to have got herself into the predicament that she did had she followed the guidelines in the Manual as directed by Mr Burgess.
[148] For an employee to adopt a practice of opening competing tenders for a multi-million dollar contract on their own invites allegations of impropriety. For an employee with the level of autonomy and seniority Mrs Ellington had this practice displayed a lack of commonsense which was later compounded by other actions which I have discussed earlier. The evidence of Mr Burgess was that no other contract officer adopted a practice of opening tenders alone and he was unaware that Mrs Ellington had been.
[149] In regard to the 12 week delay it is open on the evidence that due to workload pressures and the fact that the matter was not controversial at the time her explanation for delay is believable. However if Mrs Ellington’s version of events is correct, had she opened the tenders within 5 days of closing, or even within approximately two months she would have seen the tender submitted by Mr Saunders’ before the date the evidence indicates the restraint of trade period ended. The 12 week delay meant the tenders were not opened until after the restraint of trade period ended.
[150] The fact that there is no evidence of a tender submission, an invitation to tender, or other tender documentation being received or opened is explained by Mrs Ellington by saying that the documentation was contained in folders in her office that went missing.
[151] Mrs Ellington is adamant that the material was contained in folders in her office and despite her best efforts to locate them following the complaint from Legra they could not be found. The evidence also demonstrated the folders were not safety secured in her office and she also relocated offices which leaves open the possibility that the folders could have been taken or lost in the process of her relocating offices.
[152] It is my view that putting aside the question of the allegations concerning the matters alleged in points (b) to (g) in the termination letter and whether or not it should be accepted that a tender was submitted, on the conduct alleged in point (a) regarding a failure to comply with numerous requirements of the XCQ Purchasing and Supply Contracts Manual, Mrs Ellington’s failure to follow certain processes was a serious matter for the Respondent.
[153] The seriousness of the matter is made clear by the tone of the correspondence from Legra 89who were “...extremely unsatisfied with the result, but more so the process of the tender...”.
[154] While there is no evidence of any formal training regarding the contents of the Manual, Mr Burgess’s evidence satisfies me that Mrs Ellington was not following his directions as her supervisor on how the Manual should be followed. Her failures in this regard are in a more serious category than other examples of non-compliance with the Manual occurring more broadly.
[155] When these matters are considered in addition to her preparedness to amend the Crocksolid tender without reverting to Mr Saunders’, participating in the email exchange itself in the middle of the tender process, and providing to Mr Saunders her personal email address, it raises issues about Mrs Ellington’s judgement and suitability for the role, as well as the contribution this conduct made to the Respondents decision to dismiss her.
Timeline prepared by Mrs Ellington
[156] The Respondent has argued that a time line document 90 attached to Mrs Ellington’s statement dated 15 March 2011 regarding the key events in relation to the production labour contract is inconsistent with her diary notes.
[157] The Applicant has said in response to the claim regarding the precision of the language used in the Timeline that the evidence about the purpose of the Timeline, the time it was created and its importance in the investigation shows that it was not a document of great consequence. 91 I agree with the Applicant on this point.
Tender Recommendation Summary
[158] The Respondent made submissions regarding language used in the Tender Recommendation Summary to support its case that a tender was not submitted.
[159] I agree with the Applicant in that I do not place any significant weight on the language used by Mrs Ellington in preparing that document.
Emails from Debbie Pedersen
[160] The Respondent has made the argument that Mrs Ellington has an ongoing relationship with Crocksolid. The Respondent submits that Mrs Ellington is being untruthful and is failing to disclose or concede a relationship with Mr Saunders and Crocksolid.
[161] The Respondent made reference to two emails from Debbie Pederson to Mrs Ellington dated 24 September 2010.
[162] The Applicant responded by stating thatthe circumstances of these emails are explained in Mrs Ellington’s first witness statement 92 and it is a further example of the Respondent seeking to establish its case by inference which is not available on the direct evidence. I am satisfied on the basis of the Applicant’s explanation that the contact between Mrs Ellington and Ms Pederson in these emails does not demonstrate an ongoing relationship of any significance in determining this matter.
Disciplinary Procedure and meeting on 7 September 2010
[163] The Applicant received an email at 7.06pm on 6 September 2010 advising her that she was required to attend a disciplinary meeting the next day. It was her evidence that she did not open the email until she arrived for work the next day.
[164] The email stated that the purpose of the meeting was to “discuss your responses to findings of our information gathering into the Tender process review and the missing Tender details for the Crocksolid Labour hire contract.” The email described the meeting as an interview and said that “during the interview, actions likely to be taken if disciplinary action is required will be discussed.” The email attached a Counselling, Discipline and Dismissal Procedure (“Procedure”). 93
[165] Mr Richardson accepted in cross examination that this Procedure was the procedure that applied at the time of Mrs Ellington’s termination, and was the procedure that he expected his managers to follow. 94
[166] The Procedure, among other things, provided for a means of providing employees with the details of alleged misconduct. Section 5.1.1 of the Procedure required that any misconduct be first investigated and then a Poor Performance or Misconduct Initial Investigation Form (form 5.1HRF1) be provided to the employee. The form was required to provide “a description of the instance of the poor performance or misconduct, the evidence or support there is for the allegation, and the effect of the performance or conduct”. Mr Reynolds accepted this did not happen in Mrs Ellington’s case. 95 The Respondent has said it relied on the provisions in Part 5.3 of the Procedure, which states that the procedure may be truncated depending on the circumstances.
[167] During cross examination Mr Reynolds referred to a meeting he had with Mr Cleaver, the Human Resources Superintendent at the mine, on the morning of 7 September 2010 in preparation for the disciplinary meeting. He said that at that meeting he and Mr Cleaver formulated a number of alleged breaches which were typed into Section 3 of the Record of Disciplinary Interview. 96 Mr Reynolds had sent Mrs Ellington a blank Record of Disciplinary Interview in his 6 September email. Mr Reynolds confirmed that that the revised form including the list of breaches was not provided to Mrs Ellington before the meeting.97
[168] The meeting was attended by Mr Cleaver, Mr Burgess, Mrs Ellington, Mr Waerea (Mrs Ellington’s support person) and Mr Reynolds. Mr Reynolds said Mr Cleaver took detailed notes of the meeting and attached to his statement those notes and other documents referred to at the meeting. 98
[169] Mr Reynolds initially read through notes he prepared from the meeting on 30 July 2010 with Mr Burgess and Mrs Ellington 99 which Mrs Ellington disagreed with.100 Mr Reynolds said he noted the conflict between the view of Mrs Ellington that the tender was submitted on 17 March 2009 and Mr Saunders advice to Mr Richardson and himself on 21 July 2010.
[170] Mr Reynolds claimed Mrs Ellington became angry and argumentative and she was in disagreement with some of the compliance requirements.
[171] In the meeting Mrs Ellington was then presented a copy of the email exchange between 3 June and 16 June 2009. Mr Reynolds said Mrs Ellington was shocked when presented with the email exchange, understood how the emails looked but denied she had done anything wrong, stated that Crocksolid was an unprofessional company and that she was only reconfirming to Mr Saunders his own rates. 101
[172] Mr Reynolds says he agreed that Mrs Ellington had an excellent reputation for honesty and integrity and he doubted that she gained any benefit from Mr Saunders, however looking at the entire email exchange it looked as though she had colluded with Mr Saunders. 102
[173] Mr Reynolds said he was looking for a reasonable explanation for the emails. Two adjournments occurred during the meeting in order to give Mrs Ellington time to consider the email exchange but she was unable to. During a third adjournment Mr Reynolds said that Mr Cleaver, Mr Solomon, Site Services Manager went to meet Mr Richardson in his office to discuss the progress of the meeting. 103 During the third adjournment Mr Reynolds said they were recalled to the room by Mrs Ellington who advised that she had been suffering from dementia and for this reason she could not always recall matters.
[174] Mrs Ellington denied she said she had been suffering from dementia. She claimed she said that she struggled at times to recall things when under stress. She claims the words she used were “dementia is a real concern for me”. 104 Mr Cleaver’s contemporaneous notes of the meeting105 at paragraph 51 indicate she said “struggles with dementia”.
[175] Ultimately the Respondent did not rely on this issue as a basis for deciding to terminate the Applicant and the Applicant has not relied upon it as a basis to argue the termination was unfair. Other evidence received makes clear Mrs Ellington does not suffer from dementia and is fit for work. I do not believe this issue assists me greatly in ultimately determining the matter and I have the same view regarding other points Mrs Ellington challenged 106 in Mr Cleavers notes taken at the meeting of 7 September 2010.
[176] The Respondent says it is noteworthy that Mrs Ellington is now able to provide an explanation for each email but could not at the disciplinary meeting on 7 September 2010. Mrs Ellington explanation for not being able to remember on that day was that the emails were from 15 months earlier, but she did recall them the following day. 107
[177] At the end of the meeting on 7 September 2010, Mrs Ellington was dismissed.
Standard Of Proof
[178] The Applicant and Respondent made competing submissions going to the requisite standard of proof to be applied in this case.
[179] I have considered both submissions and it is my intention to adopt the approach as set out in Brinks Australia Pty Ltd v Transport Workers Union of Australia 108 where a Full bench of the AIRC referred to in its decision the joint judgement of Mason CJ, Brennan, Deane and Gaudron JJ in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others.109
CONCLUSION
S.387(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety or welfare of other employees);
[180] The Respondent relies on the interpretation of “misconduct” by Smithers and Evatt JJ in the decision of North v Television Corporation Ltd, 110 where it was stated at 608 that:
It is of assistance to consider the expression “misconduct” by reference to subject matter to which it is related and the context in which it appears. …it is reasonable to interpret the expression “misconduct” as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment.
[181] In the same case, Franki J at 616 further stated that:
It is clear that a single act of disobedience may be sufficient to justify dismissal on the ground of misconduct but it was held in Laws v London Chronicle (Indicator Newspapers) Ltd [1952] 2 All ER 285, that to justify summary dismissal a single act must be such as to show that the employee was repudiating the contract of service or one of its essential conditions.
[182] The Respondent submitted that the Applicant’s conduct was inconsistent with the faithful discharge of the duties for which she was engaged. The role required that the Applicant be scrupulously honest and unbiased when dealing with the tendering process and awarding contracts.
[183] In circumstances where the Applicant failed to follow proper process and improperly aided Crocksolid to secure the Contract, the Respondent submits that the misconduct was of such gravity and importance that it amounted to a repudiation or rejection of her employment contract. The misconduct goes to the heart of her employment as a Contracts Officer and in the circumstances standards of fairness and justice dictate that the Respondent should not be bound to continue the employment.
[184] In Byrne v Australian Airlines 111 the High Court considered the meaning of harsh unjust and unreasonable.
It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided on inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. ....
Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable...
[185] In cases involving misconduct the employer bears the onus of establishing that the misconduct took place. 112Where an employee is dismissed for misconduct the Tribunal must determine for itself whether the conduct occurred.113
[186] The Tribunal must determine the matter on the basis of evidence before it. The test is not whether the employer believed, on reasonable grounds, that the employee engaged in the misconduct which resulted in the termination. Rather it is an objective test based on the evidence. 114
[187] In this case there is no direct evidence that Mrs Ellington was guilty of the misconduct alleged in relation to matters (b) to (g) in the termination letter. The employer acted on inferences. The Full Bench on Smith v Moore Paragon Australia Pty Ltd considered the question of when an inference might be properly drawn and said:
[40] Due regard must be given to issues of importance and gravity in drawing inferences from proved or agreed facts. Where there is an allegation of fraud, an allegation of criminal or moral wrongdoing or an allegation involving serious legal consequences an inference should not be drawn on inexact proofs.
[188] Both parties criticised the other for failing to call Mr Saunders, Mr Bremner or Mr McNab. I do not draw a Jones v Dunkel inference against either party. I also do not agree with the Respondents submission that Mr Saunders’ was in Mrs Ellington’s camp. The Respondents case rests to a large extent on drawing inferences from the email exchange and Saunders, Bremner and McNab appeared to have been the only potential witnesses capable of giving direct evidence besides Mrs Ellington on the matters in dispute regarding the period between 3 June 2009 and 16 June 2009.
[189] I have arrived at the conclusion that I am not satisfied on the balance of probabilities that Mrs Ellington did conspire with Mr Saunders to assist him to win the contract, as was concluded by the Respondent. The Respondent has fallen short of the standard of proof required in this case to establish allegations (b) to (g) in the termination letter.
[190] I do so based on my views expressed above regarding the emails and the other disputed facts going to those issues. This has led me to the conclusion that while the inferences the Respondent sought to draw from the email chain from 3 June 2009 to 16 June 2009 could be speculated or at their highest be possibilities, after considering all of the relevant evidence the proof is inexact and insufficient to draw the inferences required.
[191] Other factors I have considered include Mrs Ellington having an unblemished record of 15 years service and it being common ground she had a reputation for truthfulness and integrity.
[192] There is no evidence of any motive for Mrs Ellington to have risked her employment for the benefit of Mr Saunders.
[193] Mrs Ellington appeared to me to be a reliable witness. Her evidence did not change significantly under cross examination. If she did not remember something or could not explain something she said so directly. I was left with the impression she was being truthful.
[194] I accept Mrs Ellington’s explanation that she did not disclose the email exchange during the Respondent’s investigation into the location of the tender documents because she did not recall them. She did not have access to them because they had been archived. 115 The investigation commenced over twelve months later and with the volume of work it is believable that she did not recall them.
[195] For these reasons I conclude that the Respondent did not have a valid reason for termination.
[196] In regard to the allegations in connection to matter (a) in the letter of termination letter regarding compliance with the Manual, I do not believe her actions constituted gross misconduct justifying summary dismissal however they raise serious issues about her judgement, suitability and her actions contributing to the Respondent’s decision to dismiss her.
S.387(b) Whether The Person Was Notified Of That Reason;
[197] The evidence indicates Mrs Ellington was not provided with all of the reasons for the dismissal prior to being dismissed.The allegations in the letter of termination were not formulated until after the decision to dismiss had been made which is clear from Mr Reynolds’ evidence during cross examination. 116
[198] No form 5.1HRF1 was ever created or provided to Mrs Ellington setting out the alleged misconduct. 117
[199] It is clear from the evidence of the Respondent that neither the full list of breaches formulated before the meeting nor the list of alleged misconduct in the termination letter were provided to Mrs Ellington.
[200] A proper application of the Respondent’s Counselling, Discipline and Dismissal Procedure at 5.1.1 required that Mrs Ellington be provided with the allegations in writing prior to the dismissal. The Respondent failed to afford procedural fairness by failing to notify the reason for the dismissal.
S.387(c) Whether The Person Was Given An Opportunity To Respond To Any Reason Related To The Capacity Or Conduct Of The Person;
[201] The Applicant contends that as Mrs Ellington was not provided with the full list of allegations she was not provided with a proper opportunity to respond to those allegations before she was dismissed as required by the procedure.
[202] The Applicant states that Mr Reynolds was taken to all of the requirements in the Procedure and confirmed that the only step taken in relation to Mrs Ellington was to get the approval of the General Manager (at 5.2). None of the other steps were taken. 118
[203] On this basis, it is submitted that not only did the Respondent fail to give Mrs Ellington an opportunity to respond to any reason related to the allegation of misconduct; it also failed to apply its own procedure which required it to give Mrs Ellington such an opportunity.
[204] The Respondent maintains that the Applicant was not ambushed in that she was aware the investigation was being undertaken and was given numerous opportunities to respond in the course of the meeting.
[205] The Respondent submits that it relied on the provisions in Part 5.3 of the Procedure which states that the formal disciplinary procedure may be truncated depending on the circumstances. In my view in Mrs Ellington’s case the alleged conduct did not justify truncating the procedure. The alleged events occurred between 18 and 15 months earlier, the allegations were complex, and they had not been explained to her before the commencement of the meeting that day. The Respondent has failed to provide procedural fairness by conducting a thorough investigation.
[206] I agree with the Applicant that the Respondent failed to afford procedural fairness to the Applicant by not allowing her a proper opportunity to respond to all of the reasons for termination and in doing so failed to comply with its own policy.
Section 387(d): “Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal”
[207] The Respondent offered the Applicant the opportunity to bring a representative of her choice to the meeting on 7 September 2010. The Applicant arranged for Mr Gary Waerea to be her support person during the meeting.
Section 387(e): “If the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal”
[208] The Applicant was not dismissed for unsatisfactory performance.
S.387(f): The Degree To Which The Size Of The Employer’s Enterprise Would Be Likely To Impact On The Procedures Followed In Effecting The Dismissal
[209] The Respondent, as a mine owned by Xstrata, had access to significant resources to ensure that it complied with fair procedures in effecting the dismissal. Mr Bannerman in his role as Group Manager Legal for Xstrata was available to provide legal advice. Mr Richardson was the General Manager for Xstrata in the Mackay region. Mr Richardson signed off on the NCA Counselling, Discipline and Dismissal Procedure.
S.387(g): The Degree To Which The Absence Of Dedicated Human Resource Management Specialists Or Expertise In The Enterprise Would Be Likely To Impact On The Procedures Followed In Effecting The Dismissal
[210] Mr Cleaver was a dedicated Human Resources specialist who was involved in the dismissal.
S.387(h) Any Other Matters That Fwa Considers Relevant
[211] Mrs Ellington is acknowledged to have been a good and diligent employee with an excellent employment record across her length of service of 15 years with the Respondent. 119
[212] On the basis of my views expressed above I conclude that the dismissal was harsh, unjust and unreasonable.
REMEDY
[213] Reinstatement remains the primary remedy pursuant to section 390(3) of the FW Act. FWA must consider that reinstatement is inappropriate before ordering the employer to pay compensation to the employee for the unfair dismissal. Further, FWA can only make an order for compensation if it considers that it is appropriate to do so in all the circumstances.
[214] The evidence was that the Applicant was fit to return to work. I accept that evidence and that issue has not been a factor in my determination on the question of appropriate remedy.
[215] Mr Reynolds in his second statement 120 contends that there has been a loss of trust in Mrs Ellington.
[216] The Applicant referred to Perkins v Grace Worldwide (Aust) Pty Ltd, 121where the Full Court of the Industrial Relations Court, dealing with the practicability of reinstatement, said the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based. The Full Court said as follows;
....we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
...........
...........
Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether the standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
[217] Mrs Ellington’s conduct gives rise to serious issues about her judgement and suitability for the work she was employed to perform.
[218] The inappropriate manner in which the Applicant handled the tender process created the circumstances she later found herself in. Contracts Officers as senior roles have a high level of autonomy and receive only limited supervision.
[219] The evidence was the Applicant was responsible for administering contracts for the 2009 year of a value in the range of $71,000,000. The tender processes Mrs Ellington was responsible for require a considerable level of discretion in handling highly confidential material. Mrs Ellington’s actions in the handling of the production labour contract did not meet the requirements of the role. The Respondent has claimed a loss of trust and confidence in the Applicant. I accept that submission to the extent that it would be impracticable to reinstate the Applicant to her formerly held position.
[220] Evidence was provided of the existence of a further position of purchasing officer in the Newlands Northern Underground Operation which has been recently advertised. My understanding from the evidence is that Mrs Ellington has performed the role of a purchasing officer in the past. The Respondent advised that the salary for this position would be at least $21,000 per annum less than Mrs Ellington’s total financial remuneration in 2010 dollars at the time of her dismissal. 122 On the basis of the difference in remuneration and also on my earlier expressed views regarding a loss of trust and confidence I do not believe it is appropriate to require the Respondent to appoint the Applicant to that position.
[221] I have determined that an order for the payment of compensation is appropriate. I have applied the principles in Sprigg. 123 I have taken into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise;
[222] The Respondent is a very large employer in the mining industry. There is no evidence that an order for compensation will affect the viability of the enterprise.
(b) the length of the person’s service with the employer;
[223] Mrs Ellington had 15 years continuous service. It is no basis for further reducing compensation to her.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;
[224] I have considered Mrs Ellington’s length of service, her age and previous employment record and also that she resides in Glenden, located 110km south west of Mackay. Remaining in employment at the Mine was desirable for the Applicant because of the convenience of close proximity to employment on attractive remuneration levels, her husband also worked at the mine, and difficulty in finding alternative employment on remuneration approaching her former position.
[225] I have also taken into account the inappropriate manner in which Mrs Ellington conducted the contracting procedure for the labour hire contract and the strain this would have placed on the relationship between the Applicant and Respondent had she not been terminated. In my view this had a real potential to bring the relationship to a much earlier conclusion than might otherwise be the case. I estimate that had Mrs Ellington not been terminated she would have remained in employment with the Respondent for at least a further six months. The Applicant’s total salary package at the time of dismissal was $136,504. On that basis I calculate remuneration Mrs Ellington would have been likely to receive if not dismissed was $68,252.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;
[226] Mrs Ellington’s efforts to mitigate her loss are set out in her first statement 124 She states that she has looked for work in Glenden but no employment is available that suits her skills, and that she has not looked for work in Mackay as it is too far to travel. She states she has started studying for a Certificate IV in Body Corporate Management in the hope that if she is unable to obtain reinstatement she might be able to undertake Body Corporate Management for units in Mackay and elsewhere whilst continuing to live in Glenden. I make no further deduction on this basis.
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation;
[227] It is stated by the Applicant and I understand accepted by the Respondent that Mrs Ellington has not earned any remuneration from any source since termination of her employment.
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation;
[228] On the basis that no income has been earned between termination and now I proceed on the basis it is unlikely any income will be earned between the making of an order and the actual compensation.
Misconduct (s 392 (3))
[229] I make a further deduction from the amount of $68,252 gross in compensation that I would otherwise order having regard to the inappropriate conduct of Mrs Ellington in the handling of the production labour tender process. I have made a substantial deduction having regard to the nature of the conduct and its effect. It is clear to me her failure to comply with the Manual as directed was a major factor that led to the employer’s decision to dismiss her. Had she complied with the requirements of the XCQ Purchasing and Supply Contracts Manual none of the subsequent events that led to her dismissal could have occurred. In the circumstances I deduct another 75%.
Compensation cap (s.392 (5))
[230] Since this amount of $17,063 gross is less than the compensation cap in s.392(5) of the FW Act, I make no further reduction for that reason.
[231] I am satisfied that an order for payment of compensation of $17,063 gross, tax according to law, by Newlands Coal Pty Ltd to Mrs Vicki Ellington is appropriate in all of the circumstances of the case. It accords a fair go all round to both parties. An order to this effect will be issued shortly.
[232] I note the Applicant was advised by email on 22 September 2010 that she needed to complete an application in order to claim payment of her long service leave from the Long Service Leave Board.
COMMISSIONER
Appearances:
A Slevin of Counsel with A Rich of Slater & Gordon Lawyers on behalf of the Applicant.
J Murdoch of Senior Counsel with J Archibald of Blake Dawson Lawyers on behalf of the Respondent.
Hearing details:
Brisbane
14 February, 14 April, 28 April, 3 June, 14 July 2011.
Mackay
3 May, 4 May, 5 May 2011.
1 PR508714 [2011] FWA 2480.
2 Exhibit 12, Annexure A.
3 Exhibit 5, Annexure “VME 4”.
4 Exhibit 5, Annexure “VME 16”.
5 Transcript 3 June 2011, PN2470-2471.
6 Exhibit 15, Paragraphs 30-39.
7 Transcript 5 May 2011, PN2193-2256.
8 Transcript 5 May 2011, PN2206; PN2228-2229.
9 Exhibit 15, Annexure E - ‘Tender Analysis & Recommendation’.
10 Exhibit 20, Page 22.
11 Transcript 3 June 2011, PN2489.
12 Exhibit 5, Paragraphs 34-35.
13 Exhibit 10, Paragraphs 5-7.
14 Exhibit 11, Paragraph 25.
15 Exhibit 5, Paragraph 42.
16 Exhibit 5, Annexure “VME 9”.
17 Exhibit 5, Paragraph 43.
18 Exhibit 5, Paragraph 44.
19 Transcript 5 May 2011, PN1664.
20 Eexhibit 5, Paragraph 76.
21 Exhibit 12, Paragraph 22.
22 Exhibit 20, Page 23.
23 Exhibit 5, Paragraph 62; Transcript 4 May 2011, PN648.
24 Exhibit 20, Page 23.
25 Exhibit 15, Annexure E - ‘Tender Analysis & Recommendation’.
26 Exhibit 15, Annexure E - ‘Tender Recommendation Summary’.
27 Exhibit 15, Annexure E - ‘Tender Analysis & Recommendation’.
28 Exhibit 5, Paragraph 50.
29 Exhibit 12, Paragraph 13; Transcript 5 May 2011, PN1725-1739.
30 Transcript 5 May 2011, PN1752-1754.
31 Transcript 4 May 2011, PN603.
32 Exhibit 5. VME 11
33 Transcript 4 May 2011, PN606.
34 Transcript 4 May 2011, PN607.
35 Exhibit 6. Paragraph 21 and 22
36 Transcript 4 May 2011, PN958-967.
37 Exhibit 5, Paragraphs 51-52 and Annexure “VME 11”.
38 Exhibit 5, Paragraphs 13-15.
39 Exhibit 5, Paragraph 17.
40 Transcript 4 May 2011, PN623.
41 Transcript 4 May 2011, PN668.
42 Transcript 4 May 2011, PN644.
43 Transcript 4 May 2011, PN646.
44 Transcript 4 May 2011, PN668.
45 Exhibit 20, Page 23 Paragraph K
46 Exhibit 5, Paragraphs 20-21.
47 Transcript 4 May 2011, PN674.
48 Exhibit 12, Paragraph 5
49 Transcript 4 May 2011, PN675.
50 Transcript 4 May 2011, PN683.
51 Transcript 4 May 2011, PN684.
52 Exhibit 5, Paragraph 68.
53 Transcript 4 May 2011, PN694.
54 Exhibit 12, Paragraph 5
55 Exhibit 6, Paragraph 7; Transcript 4 May 2011, PN485.
56 Transcript 4 May 2011, PN483.
57 Transcript 4 May 2011, PN484.
58 Exhibit 6, Paragraph 8.
59 Exhibit 5.
60 Exhibit 5, Annexure “VME 18” pages 160-167.
61 Exhibit 15, Paragraph 64.
62 Exhibit 5, Annexure “VME 18” page 145.
63 Exhibit 10, Paragraph 5.
64 Exhibit 19, Paragraph 50 (O)
65 Transcript 3 June 2011, PN2631-2632.
66 Exhibit 8.
67 Exhibit 9, Paragraphs 3-7.
68 Transcript 4 May 2011, PN1211.
69 Transcript 4 May 2011, PN1215.
70 Exhibit 11, Paragraph 23.
71 Exhibit 11, Paragraph 26.
72 Exhibit 11, Paragraph 27-31.
73 Exhibit 11, Paragraph 23.
74 Exhibit 11, Paragraph 14.
75 Exhibit 11, Paragraphs 16(a), 20.
76 Transcript 4 May 2011, PN1556.
77 Exhibit 11, Paragraph 20; Transcript 4 May 2011, PN1555.
78 Transcript 4 May 2011, PN1561.
79 Exhibit 15, Paragraph 24(d).
80 Exhibit 6, Paragraph 53.
81 Exhibit 5, Paragraph 25.
82 Exhibit 6, Paragraph 54.
83 Transcript 4 May 2011, PN1530-1536; PN1541; PN1549; PN1565; PN1579.
84 Transcript 4 May 2011, PN1277-1278.
85 Transcript 4 May 2011, PN1226-1228.
86 Exhibit 15, Paragraph 19.
87 Exhibit 5, Annexure “VME 18”.
88 Transcript 5 May 2011, PN2188.
89 Exhibit 12 Annexure A
90 Exhibit 5, Annexure “VME 17”.
91 Exhibit 5, Paragraph 83; Transcript 4 May 2011, PN1040-1050; Transcript 5 May 2011, PN1663-1672.
92 Exhibit 5, Paragraph 13.
93 Exhibit 15, Annexure F.
94 Transcript 5 May 2011, PN1842-1847.
95 Transcript 5 May 2011, PN2110.
96 Exhibit 15, Annexure G.
97 Transcript 5 May 2011, PN2100-2102.
98 Exhibit 15, Annexure G.
99 Exhibit 15, Annexure C.
100 Exhibit 15, Paragraph 54.
101 Exhibit 15, Paragraph 56.
102 Exhibit 15, Paragraph 57.
103 Exhibit 15, Paragraph 61.
104 Exhibit 6, Paragraph 30.
105 Exhibit 15, Annexure G; Exhibit 18, Annexure A.
106 Exhibit 6.
107 Transcript 4 May 2011, PN691-692.
108 PR922612.
109 (1992) 110 ALR 449.
110 (1976) 11 ALR 599.
111 (1995) 185 CLR 410.
112 YEW v ACI Glass Packaging (1996) 71 IR 201; Culpeper v Intercontinental Ship Management (2004) 134 IR 243.
113 Edwards v Giudice and Others [1999] FCA 1836; Hinchey v North Goonyella Coal Mines Pty Ltd [2009] AIRCFB 94.
114 King v Freshmore (Vic) Pty Ltd; Quinlivan v Norske Skog Paper Mills (Aust) Ltd[2010] FWA 883.
115 See Exhibit 6, Paragraph 19.
116 Transcript 5 May 2011, PN2183.
117 Transcript 5 May 2011, PN2110.
118 See Transcript 5 May 2011, PN2109-2166.
119 Exhibit 15, Paragraph 57.
120 Exhibit 16.
121 (1997) 72 IR 186.
122 Transcript 5 May 2011, PN2685.
123 T. Sprigg v Paul’s Licensed Festival Supermarket, Dec 1534/98 S Print R0235.
124 Exhibit 5 Paragraph 118 to 120
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