Ward v Saipem Australia Pty Ltd

[1998] IRCA 8

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - alleged UNLAWFUL TERMINATION - whether PROHIBITED REASON - representative of employees - whether termination for a VALID REASON - whether disobedience of lawful and reasonable direction - whether applicant entitled to notice - whether SERIOUS MISCONDUCT

Industrial Relations Act 1988 (now Workplace Relations Act 1996) - ss 170DB, 170DC, 170DE, 170DF, 170EA, & 170EDA.

North v Television Corp Ltd (1976) 11 ALR 599
Gibson v Bosmac Pty Limited (1995) 60 IR 1.
Bartucciotto v Euro Printing Co Pty Ltd (unreported IRCA No. 72 of 1996, Von Doussa J, 21 February 1996)
Izdes v LG Bennett & Co Pty Ltd (1995) 61 IR 439.
Kumar v Prima Furniture (NSW) Pty Ltd (1997) 73 IR 349.
Cosco Holdings Pty Ltd v Thu Thi Van Do (unreported, Federal Court Judgment No. 1353 of 1997, Northrop, Lindgren and Lehane JJ, 4 December 1997).

RONALD WARD V SAIPEM AUSTRALIA PTY LIMITED
WI 1111 of 1996

R.D. FARRELL JR
PERTH
17 FEBRUARY 1998

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WI 1111 of 1996

COURT:	RD FARRELL JR
DATE OF ORDER:	17 FEBRUARY 1998
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.The application is dismissed.

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

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WI 1111 of 1996

BETWEEN:	RONALD WARD
AND:	SAIPEM AUSTRALIA PTY LIMITED

COURT:	RD FARRELL JR
DATE:	17 FEBRUARY 1998
PLACE:	PERTH

REASONS FOR JUDGMENT

This is an application under Section 170EA of the then Industrial Relations Act 1988 now known as the Workplace Relations Act 1996 (“the Act”) for compensation arising from the alleged unlawful termination of the employment of the applicant, Mr Ronald Ward (“Mr Ward”), by the respondent, Saipem Australia Pty Limited (“Saipem”). Reinstatement is not sought and I am satisfied that it is not practicable.

Contentions

The applicant contends that the respondent dismissed him in breach of section 170DF(1) of the Act. He alleges that his employment was terminated for reasons which included the fact that he had:

·acted in the capacity of a representative of employees (in relation to safety issues) so that the dismissal was contrary to section 170DF(1)(d); and

·filed a complaint and participated in proceedings against the respondent involving alleged violation of (safety) laws and regulations, so that the dismissal was contrary to section 170DF(1)(e).

The respondent disputes that these matters formed any part of the respondent’s reasons for terminating the applicant’s employment. It says the dismissal resulted solely from the applicant’s disobedience of a lawful and reasonable direction to transfer to a different part of the respondent’s operations. Nor does the respondent concede that the matters raised by the applicant formed any part of its reasons for issuing that direction to the applicant.

The respondent contends, for the purpose of Section 170DE of the Act, that the applicant’s disobedience of a lawful and reasonable direction was a valid reason for the termination of the applicant’s employment which was connected with the applicant’s conduct and which was also based on the operational requirements of Saipem’s undertaking, establishment or service.

The applicant disputes that the direction was lawful, contending that the direction exceeded the respondent’s authority under the terms governing Mr Ward’s employment. The applicant also disputes that the direction was reasonable, and contends that the direction was motivated by improper considerations.

Finally, the applicant contends that he should have received at least one week’s notice under Section 170DB of the Act. The respondent replies that the applicant was guilty of serious misconduct such that it would have be unreasonable to require Saipem to continue the employment during the notice period. The respondent contends that it is therefore not required under Section 170DB(1)(b) of the Act to pay compensation in lieu of the notice.

Factual Background

Saipem is in the business of laying gas pipelines. At the relevant time, it was engaged in the Goldfields Gas Transmission Pipeline Project. The area of operation commenced on the North West coast of Western Australia, at Yarraloola, and concluded at Kalgoorlie, approximately 800 kilometres east of Perth. Different sections of the pipeline, referred to as “spreads”, were being constructed by different crews of employees.

Mr Ward was employed by Saipem on 20 October 1995. He was employed as a boom operator. Mr Ward was well qualified for the position, possessing the necessary skills and having had considerable previous experience in similar work.

Mr Ward was allocated to the lowering-in crew in “Spread 2”. Spread 2 was based at Turee Creek, located approximately 100 kilometre from Paraburdoo.

In late 1995, Mr Ward was elected as health and safety representative for the lowering-in and tie-in crews at Spread 2. He held strong and sincere views about the need for safety in the workplace, having once been badly injured in the course of previous employment.

On or before 13 February 1996, Mr Ward fell ill, and had to be evacuated to Meekatharra Hospital for treatment. It was unclear how long he would be absent. Mr Mott, his supervisor, took steps to have another side boom operator recruited for his crew.

On 13 February 1996, Mr Rod Davis, who was Superintendent of Spread 1, wrote a memorandum to Mr David Mott, the Superintendent of Spread 2, advising that Spread 1 was short of side boom operators for a Special Crossing Crew. The work required to be performed by such crews was more complex than the more routine work performed by the lowering in crews. He requested “a skilled operator” from Spread 2 to assist in installing crossings.

Having heard the evidence of Mr Davis, I am satisfied that this request was genuinely and solely motivated by the logistical requirements of Spread 1’s operations.

Because of Mr Ward’s absence, Spread 2 was also short of side boom operators at that time, so Mr Mott advised Mr Davis that he did not have anyone available to be transferred to Spread 1.

Meanwhile, the crews at Spread 2 elected a new safety representative while Mr Ward was absent during his illness. Mr Ward did not resume the position when he returned to work on 18 February 1996.

On or before 25 February, Mr Davis again asked Mr Mott for a skilled and experienced side-boom operator for transfer to Spread 1. Given that an additional operator had by then been recruited for Spread 2, Mr Mott was able to agree to transfer one of his side-boom operators. Mr Ward was, as far as Mr Mott was aware, the most experienced side-boom operator available. Mr Mott was aware of Mr Ward’s credentials because they had worked together on an earlier project. Mr Mott did not make enquiries to discover whether there were other operators on Spread 2 with as much or more experience. Mr Mott proposed Mr Ward to Mr Davis as the appropriate person to be transferred. Mr Ward was acceptable to Mr Davis.

On the evening of Sunday, 25 February 1996, Mr Ward was asked by Mr Mott to transfer to Paraburdoo to join the Special Crossings Crew at Spread 1. Mr Ward initially agreed.

However, early the next morning, on Monday 26 February 1996, Mr Ward told Mr Mott that he would not go. Mr Mott responded by telling Mr Ward that he would be required to transfer, and referred the matter to Mr Ron Smith, Saipem’s on-site industrial officer.

Later that morning, Mr Ward met with Mr Smith and with the two delegates of Mr Ward’s Union, the Australian Workers’ Union, Mr Max Davis and Mr Michael McGiveron. Mr Ward explained to Mr Smith that he preferred to stay at Spread 2 with his friends. He claimed that other operators were available with greater experience than him. He also protested that he felt that he was being victimised.

Mr Smith suggested that Mr Ward agree to go to Spread 1 “under protest”, while the dispute about the transfer was resolved. Mr Ward would not agree.

Mr Smith left the meeting to report back to Mr Mott. Mr Mott reiterated that Mr Ward was required to comply with the direction.

Mr Smith returned to Mr Ward, Mr Max Davis and Mr McGiveron, and confirmed that the direction would have to be complied with, recommended that Mr Ward do so “under protest”, and warned that refusal to comply with the direction was a very serious matter. The meeting then concluded on the basis that Mr Ward would be given time to consider his options.

Mr Ward recalls that the three options set out for him by Mr Smith at this meeting were that he:

·   transfer to Spread 1;

·   transfer to Spread 1 under protest, and invoke the grievance procedure; which formed part of the terms of his employment; or

·   stay at Spread 2, and “that was the end of it”.

Mr Smith disputes that the option of remaining on Spread 2 was discussed, except in terms of the serious consequences of failure to comply with the direction. However, Mr McGiveron agrees with Mr Ward and says that at the end of the meeting, he too thought that the issue was over and Mr Ward would be permitted to stay. However, Mr McGiveron’s recollection was somewhat confused as to the timing. He wasn’t sure if he was under the misconception that the issue was over for the rest of the day, or only for a matter of hours.

In my view, Mr Smith’s recollection of the options is inherently unlikely. Why would Mr Smith bother to raise the first two options if he was content to accept the third? Given the logical absurdity of Mr Ward’s recollection of the options, I consider it most likely that Mr Smith left open the option of Mr Ward staying midway through the meeting, until Mr Smith had checked with Mr Mott whether he was going to persist with the direction. At that point, Mr Ward and Mr McGiveron may have thought, or at least hoped, that the matter would be over. However, when Mr Mott confirmed that the direction stood, I accept  an balance that Mr Smith returned and referred to the serious consequences of a failure to comply with the direction.

Following that meeting, Mr Smith spoke privately with the delegates, asking them to persuade Mr Ward to go “under protest” while the matter was dealt with under the grievance procedure. Mr McGiveron approached Mr Ward privately but failed to persuade him.

Mr Ward otherwise worked as usual on 26 February 1996.

Mr Smith met again with Mr Ward and the delegates early on the morning of 27 February 1996. Mr Ward’s position had not changed. Mr Smith told him that refusal was a “dismissible offence” and again recommended that Mr Ward comply “under protest”.

Mr Max Davis sent a handwritten facsimile transmission to the Perth office of the Union that morning, stating:

“Ron Ward was advised to go to Spread One under protest, but he still refused to go. Even (sic) the matter was going further with Union input.”

That same morning, the Union lodged a notice of a dispute over Mr Ward’s proposed transfer to the Australian Industrial Relations Commission, having advised Mr Smith that it would do so. Mr Ward was told that it would be in the Commission within two days.

Mr Smith reported back on the morning’s discussions to Mr Mott and to Mr Keith Brown, Saipem’s senior industrial officer, who was based in Perth. Mr Smith had been keeping Mr Brown informed of developments. Mr Brown’s superior, Mr Di Stephano, had also been briefly informed about the issue by Mr Brown. Mr Di Stephano had expressed the view that Mr Ward’s conduct was unacceptable, but left the resolution of the problem in Mr Brown’s hands, observing that he was to make sure that the superintendents were not ridiculed. In Mr Smith’s view, Saipem was left with no option; Mr Ward had backed them into a corner. Mr Smith, Mr Mott and Mr Brown took a joint decision to dismiss him.

Later on 27 February 1996, at about 10.30am, Mr Mott again asked Mr Ward to obey the direction. When Mr Ward again refused, Mr Mott handed him a letter of termination. The letter had been composed by Mr Brown, approved by Mr Di Stephano and signed by Mr Mott. The letter is in the following terms:

“Dear Sir,

RE:     Bans, Limitations, Restrictive Work Practices

You have been advised by Site Management that your services were required on the Special Crossings Crew, currently working out of Paraburdoo.

You were chosen for this function for a number of reasons, and were required to prepare immediately to proceed to Paraburdoo in accordance with a Lawful Management direction.

When you were first notified of this requirement you agreed to the direction, but subsequently indicated you wished to stay at your current location with your friends.

Subsequently, you have claimed you are being victimised or prejudiced in your employment, which claim is improper as you would have retained your work classification of Pipeline Worker Level 1.

You were asked to carry out the relocation to Paraburdoo as dozens of other employees have, but you seem to think you can decide when and where you work rather than Management, when all other employees accept without question this necessary and reasonable requirement.

Your refusal is in direct defiance of the Orders recently issued by Deputy President Bryant and as a result of your refusal to carry out the lawful instructions of site management, you have determined your ongoing employment opportunity with our Company and further, are seriously jeopardising the issue of the Industrial Commission decision concerning the early completion scheme.

You were asked by Site Management to carry out the instruction under protest while you refer your allegations to the Union through the Grievance Procedure, but you refused.

You have since been advised that your Union Senior Site Representative has communicated with the State office of the Union, and Mr Bob Ward has advised an application will be filed in the Australian Commission over the matter, but you should carry out the directions of Management pending determination of the issues by the Commission.

You have refused to comply with the Unions directions and understand you are now claiming you will not go because the Company just wants you out of the way so it can practise unsafe acts.

In view of the following:

·   you are in breach of the Orders of the Commission

·   you are and continue to refuse lawful instructions

·   you refuse to process matters through the Grievance Procedure of the Registered Agreement

·   you are in breach of the Agreement

·   you are jeopardising the issue of the pending decision of Commissioner Tolly concerning an early completion scheme for all employees on the Project

We consider your actions and refusal of duty warrant summary dismissal, and you are so dismissed.

An airline passage to Perth will be provided today and you are required to evacuate the Camp without delay, and to assist you, transportation to Newman Airport will be provided.

You will be paid your entitlements within 48 hours of your return to Perth.

Yours sincerely,

(signed)

David Mott

Spread 2 Superintendent”

Mr Ward reacted angrily. I accept Mr Smith’s evidence that he began shouting, demanding that the Perth officials of the Union attend on site immediately, threatening to “pull out” the workforce and initially refusing to leave the site.

Eventually Mr Ward was persuaded to return to Perth, as Saipem had arranged. He initiated these proceedings on or about 4 March 1996.

Whether the Respondent Breached Section 170DF

Section 170EDA(2) places the onus on Saipem to prove that Mr Ward’s employment was not terminated for reasons that included:

·the fact that Mr Ward had acted in the capacity of a representative of employees in relation to safety issues; or

·the fact that Mr Ward had filed a complaint and participated in proceedings against the respondent involving alleged violation of safety laws and regulations.

If Saipem does not succeed in meeting that onus, it will be found to have breached 170DF(1) (d) and (e) of the Act.

As I have indicated above, I am satisfied that there was a genuine operational need for an employee of Saipem with suitable qualifications to be transferred to Spread 1. I am also satisfied that Mr Ward was suitably qualified to be selected for that transfer. It does not necessarily follow, however, that the fact that Mr Ward was qualified was the only reason for his selection.

Section 170DF(1) provides that an employer must not terminate an employee’s employment for reasons including any one or more of the reasons prohibited by the Section.

Saipem’s contention that Mr Ward was selected solely on the basis of his qualifications is somewhat weakened by the lack of evidence of any effort on the part of Mr Mott to check the experience of all of his side-boom operators before selecting Mr Ward. I am not suggesting that such a thorough approach would always be necessary or even usual in filling an urgent, ad hoc vacancy of this kind. Nevertheless, had more effort been made to follow up other, potentially more qualified candidates, it would have led me more readily to the conclusion that the operator’s ability was the sole criteria for selection. The fact that Mr Mott did not look further than Mr Ward lends credence to the proposition that the selection of Mr Ward was also attractive for other reasons.

Mr Ward believes that he was selected to be transferred to Spread 1 because of the diligence with which he pursued safety issues when he was the safety representative, and the fact that this diligence did not cease when he no longer held that position.

The court heard evidence concerning numerous incidents which arose in the course of Mr Ward’s employment, upon which Mr Ward’s belief was based.

In January 1996, there was a three week strike involving Saipem’s workforce, including Mr Ward. During the strike, Mr Ward raised and demonstrated particular safety concerns in several forums, including proceedings in the Australian Industrial Relations Commission.

Mr Ward also attended the Department of Minerals and Energy during that period and made a complaint to an officer of the Department, Mr Donald Burgess, chiefly concerning Saipem’s alleged unsafe practice of requiring employees to work under suspended loads.

On or about 8 February 1996, soon after the strike ended, Mr Burgess travelled to the camp at Turee Creek to investigate the complaint. He held a meeting with the employees to discuss safety issues. Mr Ward, together with many other employees, participated in that meeting. Mr Mott was aware of the meeting but did not attend.

Mr Burgess met the next morning for discussions with Mr Mott, Mr Ward, Mr Smith and the Union delegates, and discussed, among other things, appropriate procedures for raising safety issues.

Mr Ward and other witnesses also spoke of a number of incidents where Mr Ward raised safety issues in the course of his work, and where this had resulted in conflict with his foreman, Mr Derek Skilton.

Mr Mott spoke of friction between Mr Ward and Mr Skilton, and disavowed any opinion as to who of them was to blame. He did refer, however, to the need to counsel Mr Ward. He also expressed the view that Mr Skilton was the foreman and had to run the crew, and that Mr Ward was to follow Mr Skilton’s instruction.

Mr Mott explained that he was concerned about Mr Ward’s alleged tendency to stop work on account of a safety issue before raising it with the foreman.

In the course of one of the meetings resulting from a dispute between Mr Skilton and Mr Ward, Mr Skilton expressed the view that Mr Ward was a bad influence on the rest of the crew. At other times, he accused Mr Ward of trying to hold the job up.

Mr Ward fell ill on or before 13 February 1996. While he was absent due to his illness, a previously arranged training course for safety representatives came due The crews therefore agreed, in Mr Ward’s absence, to elect a new safety representative who would be available to attend the course. By about 18 February 1996, when Mr Ward had recovered sufficiently to return to the camp, he was advised by his workmates of the election of a safety representative to replace him. He agreed that the change was appropriate.

The disputes between Mr Ward and Mr Skilton on safety issues continued after Mr Ward no longer held the safety representative position. The last of them arose on the evening of 26 February, 1996, after Mr Ward had been directed to transfer to Spread 1, but before his dismissal.

It would appear on the evidence that the decision to select Mr Ward for the transfer was taken by Mr Mott.

Without seeking to make a finding on the issue of whether Mr Ward was justified in raising some or all of these various safety incidents, or in the manner in which he raised them, I am satisfied that Mr Mott was frustrated by the continuing disputes between Mr Ward and Mr Skilton. I am also prepared to accept that Mr Mott believed that the manner in which Mr Ward was raising safety issues was causing an unnecessary loss of production. Mr Mott was also mindful of the strained relations between Mr Ward and Mr Skilton.

Given my finding as to Mr Mott’s view on that matter, Saipem has not satisfied me that it is more likely than not that this view was not one of Mr Mott’s reasons for selecting Mr Ward for the transfer to Spread 1, away from Mr Skilton’s team.

Section 170DF(1) nominates as prohibited reasons for termination:

“(d)         ...acting or having acted in the capacity of, a representative of employees”; and

“(e)...the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities”.

Mr Ward had, when he was safety representative, acted as a representative of employees. I am satisfied that this fact alone was not the reason for his dismissal. In my view, it is likely to have been the combination of Mr Ward’s actions in his capacity as a safety representative together with his later actions concerning safety issues as an individual employee which contributed to Mr Mott’s decision to nominate him for transfer to Spread 1.

I accept, in those circumstances, that the reasons for Mr Mott’s decision included the fact that Mr Ward had acted in the capacity of a safety representative.

Mr Ward had, during the industrial action, attended confidential conciliation proceedings in the Australian Industrial Relations Commission. There was little evidence on this issue, and no evidence that Mr Mott was aware of Mr Ward’s participation. I am sufficiently satisfied that the reasons for Mr Mott’s decision did not include Mr Ward’s participation in those proceedings.

Mr Ward also complained to an officer of the Department of Minerals and Energy concerning allegedly unsafe practices prevalent at Saipem’s work site. I am satisfied that this amounted to the filing of a complaint against Saipem involving violation of laws relevant to occupational health and safety. However, Mr Burgess, the officer of the Department of Minerals and Energy called by Mr Ward to give evidence, maintains that Mr Ward’s identity as one of the complainants remained confidential. In those circumstances, I am sufficiently satisfied that the reasons for Mr Mott’s decision did not include Mr Ward’s complaint against Saipem.

I have so far merely referred to “the reasons for Mr Mott’s decision”. The decision to which I refer is Mr Mott’s decision to select Mr Ward for transfer to Spread 1. The subsequent decision to dismiss Mr Ward requires separate consideration.

Mr Ward refused to comply with Mr Mott’s direction to transfer to Spread 1. Faced with this refusal, Saipem ultimately dismissed Mr Ward. The decision to dismiss him was taken jointly by Mr Mott, Mr Smith and Mr Brown.

It might be argued that because:

·the refusal could never have arisen had there been no direction to transfer; and

·the reasons for Mr Mott’s decision to select Mr Ward for transfer included his having acted in the capacity of a safety representative

it follows that Mr Ward was dismissed for reasons which include his acting in the capacity of a safety representative. Such an argument, in my view, draws too long a bow.

The Court must have regard to the reasons of the decision makers at the time the decision was taken to dismiss Mr Ward.

Saipem contend that the defiance by an employee of a direction such as this was a matter it was required to treat very seriously. Mr Mott says he referred the issue to Mr Smith because it had become an “industrial matter”. There was a concern, as Mr Di Stephano put it, that Saipem’s superintendents not be “ridiculed”. While Saipem was prepared to submit the issue to the jurisdiction of the Commission, it was not prepared to accept Mr Ward’s defiance of the direction in the interim.

I am satisfied that the refusal to comply with the direction changed the complexion of the issue, so that Mr Ward’s history as a safety representative was not a factor in the decision to dismiss him. I am also satisfied that he would have been dismissed, for example, whether or not he had had a strained relationship with his foreman.

I am therefore satisfied that the reasons for Saipem’s decision to dismiss Mr Ward did not include any of the reasons prohibited by Section 170DF of the Act.

Reason for Termination: Disobedience of Direction

Sections 170EDA(1)(a) and 170DE(1) confer the onus on the employer to prove that there was a valid reason for the termination of the employee’s employment connected with the employee’s conduct or based on the operational requirements of the undertaking, establishment or service.

The respondent contends that Mr Ward was dismissed because he disobeyed a lawful and reasonable direction to transfer to Spread 1 to work as a side boom operator on a Special Crossings Crew.

I accept that disobedience of a lawful and reasonable direction would usually amount to misconduct, and would therefore usually constitute a valid reason for termination connected with the employee’s conduct. It is unnecessary for me to decide whether it is also a valid reason based on the operational requirements of Saipem’s undertaking, establishment or service.

Whether the Direction was Lawful and Reasonable

Mr Ward disputes the lawfulness of the direction. He first contends that the terms of his employment were limited to the performance of duties on Spread 2, and that Mr Mott was therefore not entitled to direct him to work other than on Spread 2.

I do not accept this proposition. The only evidence in support of it was the fact that the words “Site: No 2 Spread” were written at the top of his engagement notice. The terms of the Industrial Agreement which was incorporated into his contract of employment make it clear, however, that his employment was not restricted to Spread 2. Nor did the respondent’s practice of transferring employees indicate any such restriction.

Nor do I accept the that proposition that the direction was unreasonable, because it was motivated in part by an improper consideration, namely, Mr Ward’s history of raising safety issues, and the resulting ill-feeling between himself and Mr Skilton.

For the purposes of Section 170DF, I was prepared to accept that the benefits in terms of avoiding the ongoing conflict between Mr Ward and Mr Skilton may have been an additional reason why Mr Mott did not look beyond Mr Ward when selecting an appropriate operator for transfer. However, I accept that Mr Ward was the most experienced side-boom operator of whom Mr Mott was aware. It was not unreasonable for Mr Mott to select Mr Ward on that basis, as a suitable transferee, without undertaking an exhaustive search to ensure he was the most suitable. Any perceived collateral benefit to Mr Ward’s selection does not, in my view, render that selection and the resulting direction unreasonable.

There was also a suggestion that, where the lawfulness of a direction was in dispute, it was not reasonable to require compliance with the direction pending the resolution of that dispute. This proposition derives some support from Izdes v LG Bennett & Co Pty Ltd (1995) 61 IR 439 at 450.

In that case, the employer, a margarine manufacturer, terminated Mr Izdes’ employment as a food technologist because he refused to carry out testing as directed of competitors’ products. One of the products was manufactured by a former employer of Mr Izdes, with whom he had signed a confidentiality agreement. Mr Izdes believed the testing by him of that product could involve him in a breach of confidentiality. He raised his concern with the employer, and requested an indemnity, which was refused. Justice Beazley considered it unreasonable for the employer to insist that the employee test the product whilst the issue remained unresolved.

However, I find that the principles guiding Beazley J have no application in the present case for two reasons.

First, there was no evidence that Mr Ward made it known to Saipem, directly or indirectly, that he challenged the lawfulness of the direction. Mr Ward did not assert at the time that Mr Mott did not have a right to direct him to relocate to Spread 1 to work as a side-boom operator on a Special Crossings Crew. Rather, he complained that the direction amounted to victimisation, and complained that it would remove him from the company of his friends. Mr Ward appeared to be defying the direction because he considered it unfair or unreasonable, rather than because he challenged its lawfulness.

Second, the prejudice to which Mr Ward was exposed in losing the company of his friends was of little legal significance when compared to the civil liability to which Mr Izdes was potentially exposed. Further, Mr Ward was not being directed to comply indefinitely, but only until his complaint was resolved in accordance with a grievance procedure.

I have noted that the terms of employment provided for disputes to be resolved through a grievance procedure, with the Australian Industrial Relations Commission nominated as the ultimate arbiter. That procedure was being followed by Saipem and the Union in relation to this incident, and the Commission had been notified of a dispute.

The procedure specifically provides that “In the event of any dispute or claim arising between an employer and his employees, normal safe work shall continue.”

The grievance procedure gives rise to another argument as to whether Saipem could lawfully require Mr Ward to comply with its direction pending the Commission’s resolution of the dispute.

It is necessary to consider whether Mr Ward’s relocation to Spread 1 to work as a side-boom operator on a Special Crossings Crew would have merely been a continuation of “normal work”; there was no suggestion that it was unsafe. Counsel for the respondent submitted in the course of the hearing that it was a continuation of normal work.

“Normal” means “conforming to the standard or common type; regular, usual, natural, or not abnormal”: The Macquarie Dictionary. Rev. ed.

Counsel for the applicant contended that Mr Ward’s regular and usual work was on Spread 2.

This might in some circumstances be a difficult issue to resolve, where the very dispute to be settled by the Commission is the ambit of an employee’s terms of employment.

However, I am satisfied that compliance with the direction to transfer to Spread 1 was consistent with Mr Ward’s normal work for the following reasons:

·   Mr Ward had not, up to that point, challenged the lawfulness of the direction by asserting that it beyond the ambit of his contract - rather he was challenging the reasons for his selection;

·   The transfer by Saipem of employees from one spread to another was common, if not usual; and

·   It is the industrial parties, namely the Union and Saipem, who are empowered under the Grievance Procedure to apply to the Commission to settle the dispute. In this case the Union did so on the basis that Mr Ward should comply with the transfer “under protest” pending the Commission’s decision.

I am therefore satisfied that the direction to transfer to Spread 1 was both lawful and reasonable.

Whether the Disobedience Constituted a “Valid Reason”

Finally, the applicant contends that the circumstances in which Mr Ward refused to comply with the direction were such that Mr Ward’s refusal did not constitute a valid reason as required by the Act.

Counsel for the applicant again cited Izdes v LG Bennett & Co Pty Ltd (1995) 61 IR 439 at 451, where Beazley J stated that:

“In determining whether a refusal to carry out the lawful and reasonable directions of an employer constitutes a valid reason for termination, it is necessary to have regard to all the circumstances, including the nature and degree of the employee’s conduct.”

The authorities cited by Beazley J in support of the statement are merely reaffirmations of the well-settled proposition that summary dismissal will only be justified if the employee’s conduct is such as to indicate that he or she no longer intends to be bound by the contract of employment. In determining whether particular conduct indicates an intention not to be bound by the employment contract, one must certainly have regard to all the circumstances, including the nature and degree of the employee’s conduct.

However, implicit in Justice Beazley’s statement is the suggestion that the nature and degree of conduct which would justify summary dismissal at common law equates with the nature and degree of conduct which would constitute a valid reason for dismissal under Section 170DE of the Act.

Considerable authority has amassed concerning the meaning the term “valid reason” since Beazley J’s decision.

While this application was heard in the Industrial Relations Court of Australia, any review from this decision would be heard by a judge of the Federal Court under the transitional provisions put in place following the removal of the Industrial Relations Court of Australia’s jurisdiction by amendments to the Workplace Relations Act 1996: See Kumar v Prima Furniture (NSW) Pty Ltd (1997) 73 IR 349.

I am therefore bound, under the doctrine of precedent, by a very recent decision of the Full Court of the Federal Court in Cosco Holdings Pty Ltd v Thu Thi Van Do (unreported, Federal Court Judgment No. 1353 of 1997, Northrop, Lindgren and Lehane JJ, 4 December 1997). In that decision, a majority of the Full Court held that:

“...a reason for termination ...may be valid even if the termination ...may be regarded as unfair. In other words, fairness, reasonableness or justice, as regards the employee, is not the realm of discourse with which ‘valid’ is concerned... In the statutory context with which we are concerned, the primary work of ‘valid’ is to exclude the reasons listed in s 170DF(1) [which prohibits various listed reasons, including union membership or non-membership, race, disability, age etc]. If there are other reasons for which an employee may not lawfully dismiss an employee, then equally, no doubt, such a reason would not be a ‘valid’ reason. Additionally, perhaps, the word ‘valid’ may serve to emphasise that the reason must be genuinely connected with the employee’s capacity or conduct or genuinely based on operational requirements. In our view... it has no wider operation.”

Northrop J, the other member of the Full Court, gave the term a similarly narrow construction, holding that:

“To be a valid reason, the reason must be lawful in the sense of not being prohibited, and genuinely must be based on those operational requirements [or, presumably, genuinely connected with the employee’s capacity or conduct]. The word ‘valid’ is used as an adjective qualifying the word ‘reason’ and is used in the sense of sound, defensible or well founded with respect to the foundation, namely the operation requirements of the employer [or, again presumably, with respect to the connection with the employee’s capacity or conduct]”

Given the narrow approach taken by the Cosco decision, I do not consider I am able to say that Saipem’s reasons for dismissing Mr Ward were not “genuinely connected” with Mr Ward’s conduct. Nor, on balance, am I able to say it was not “sound, defensible or well founded” with respect to its connection with Mr Ward’s conduct.

I accept therefore that Saipem terminated Mr Ward’s employment for a valid reason connected with his conduct.

Whether Mr Ward Was Entitled to Notice

The applicant contends that Saipem was required to give him notice under Section 170DB(1), which provides that:

“An employer must not terminate an employee’s employment unless:

(a)the employee has been given either the period of notice required by subsection (2) or compensation instead of notice; or

(b)the employee is guilty of serious misconduct, that is, misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period.”

The respondent cited the case of Bartucciotto v Euro Printing Co. Pty Ltd (unreported, IRCA No. 72 of 1996, von Doussa J, 21 February 1996, at page 17-18) where Justice von Doussa held that the reference to “serious misconduct” in section 170DB of the Act was intended to reflect the common law position. The passage from North v Television Corp Ltd (1976) 11 ALR 599 per Smithers and Evatt JJ at 608-9 cited by von Doussa J to encapsulate the common law position can be understood as identifying two strands within the definition of the term ‘misconduct”; ie. that “misconduct” is:

·   conduct which will justify dismissal at common law because it is so seriously in breach of the employment contract that by standards of fairness and justice the employer should not be bound to continue the employment; and

·   conduct such as to show the employee is deliberate flouting and has disregarded the essential conditions of the employment contract and is therefore repudiating the contract, or one of its essential conditions.

The first strand of the definition is framed by reference to what it is reasonable to expect of an employer when faced with specific objective conduct. The second definition is framed by reference to the imputed subjective intention of the employee in engaging in the conduct.

The literal terms of paragraph (b) of Section 170DB(1) reflect only the first strand of the common law concept of “misconduct”. In Bartucciotto v Euro Printing Co. Pty Ltd, Justice von Doussa found that the provision was also intended to reflect the other, subjective strand of the common law position. He went on in that case to find that, though the employee’s negligent conduct amounted to a valid reason for termination, he remained entitled to notice because his conduct lacked the characteristic of deliberate flouting. The question of whether it was reasonable to require the employer to assume the risk of continuing the employment of a negligent employee during the notice period was not directly addressed.

I was referred by counsel for the applicant to the decision of Chief Justice Wilcox in Gibson v Bosmac Pty Limited (1995) 60 IR 1 at 10, where an employee was summarily dismissed because he refused without explanation to work overtime on the weekend. The conduct of this employee would seem to have amounted to a deliberate flouting of his contractual obligations.

It would seem Chief Justice Wilcox’s approach to Section 170DB places more emphasis on the first strand of the common law concept than the subjective strand; it is more concerned with the perspective of the employer than the intention of the employee. The decision in Gibson v Bosmac Pty Limited can only be reconciled with that in Bartucciotto v Euro Printing Co. Pty Ltd if one assumes that the conditions of employment which were flouted by Mr Gibson were not essential conditions of the employment contract.

In any event, I am satisfied that Saipem was not required under Section 170DB(1) to give Mr Ward notice.

It is arguable that Mr Ward’s conduct was not a deliberate flouting of his contractual obligations, given that the ambit of those obligations was ultimately a matter in dispute between the parties.

However, the evidence as to Mr Ward’s reaction following the termination of his employment was such that, in my view, it would have been unreasonable to require Saipem to continue his employment during the notice period, given the extent of his apparent hostility toward the company.

I therefore find that there was no breach of section 170DC.

Conclusion

For these reasons, I will order that the application be dismissed.

I certify that this and the preceding twenty (20) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar RD FARRELL

Associate:

Dated:            17 February 1998

Counsel for the Applicant:	Mr P J Hannan
Solicitor for the Applicant:	Slater & Gordon
Counsel for the Respondent:	Mr H Dixon
Solicitor for the Respondent:	Jackson McDonald
Date of Hearing:	1, 2, 3 & 4 October 1996
Date of Judgment:	17 February 1998