PR955902 PR955902 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170CE application for relief re termination of employment Jun Tian and DMG Industries Pty Ltd (U2004/5373) COMMISSIONER LEWIN MELBOURNE, 23 FEBRUARY 2005 Termination of employment. REASONS FOR DECISION [1] This application by Mr Jun Tian (the applicant) for relief in relation to the termination of his employment with DMG Industries Pty Ltd (the Respondent), on 16 July 2004, was the subject of unsuccessful conciliation before a conciliator on 2 September 2004. The applicant elected to proceed to arbitration 1 October 2004. The matter was allocated to me on 2 February 2005 for arbitration and was heard on 7 and 8 February. [2] At the conclusion of the proceedings on 8 February 2005 I issued my decision of the matter, which was accompanied by summary reasons and recorded in transcript. At that time I advised the parties that if either of them wished for the production of extended reasons they should make application under Rule 46 of the Commission's Rules. On 14 February 2005 the respondent's solicitors filed application pursuant to Rule 46. What follows below are those extended reasons. Background [3] The respondent is a tool making company and manufacturer of plastic injection moulded parts which supplies tooling and plastic products, primarily, to the vehicle industry. The applicant worked in the respondent's tool room at Keysborough. [4] The applicant was employed by the respondent to operate an Electronic Discharge Machine (EDM). This machine uses electrical discharge via a copper or graphite electrode to burn away and shape metal in the manufacture of tooling equipment. The applicant reported to his team leaders, whose names were Prem Kumar Sini or Para Masivan Manickam, who reported to the senior tool room leader Carlos Auguita who in turn reported to the tool room manager who, at the time relevant to this application, was Ron Snow. [5] In the course of its international business the company subcontracts certain stages of tool production to a large company in China referred to in these proceedings as Haier. [6] The respondent company has recently been working to develop automobile manufacturing markets for its products in South Africa. In July 2004 a group of business representatives from South Africa were visiting the respondent's operations in Melbourne. This group included representatives from a company known as Ariston and also from General Motors South Africa. They were highly valuable customers to the respondent. It was during this visit that the events occurred which gave rise to the termination of the applicant's employment. [7] It is uncontested that during the early afternoon of Tuesday 13 July 2004 the applicant entered Ron Snow's office while Mr Snow was absent. There followed a verbal interaction between the applicant and a person who was visiting the office and had been on the company's premises, as part of the South African delegation, for a week. The content, sequence and timing of this interaction are all in contest for the purposes of this matter. There is no doubt, however, that the reason for the termination of the applicant's employment was the combination of the conduct of the applicant at that time, and his explanation of it during a subsequent interview, to which I will return. [8] What caused the employer to investigate the events of 13 July 2004 was the advice of the person in Mr Snow's office with whom the interaction occurred, Michael Poulter. Mr Poulter filed a witness statement and gave evidence in this matter. Mr Poulter's evidence is that, clearly unbeknownst to the applicant, he was present in Ron Snow's office because he is an employee of the respondent from South Africa, who had brought with him the business development contacts from the automotive industry in that country. [9] Mr Poulter's evidence is that he was working on his laptop computer at Mr Snow's desk when the applicant approached him and asked him where Ron Snow was. He responded that Ron would be busy for most of the day with visitors. [10] Mr Poulter's evidence is that the applicant then asked him if there were problems with the tools from China, referring to those which had been subcontracted to Haier. His reply was that there were some problems but that they were being addressed. [11] Mr Poulter's evidence goes on to say that the applicant continued to converse with him, stating that, "Haier is too big". Mr Poulter took this to mean that Haier has too many customers in China. Mr Poulter's evidence is that, having said this, the applicant presented him with the business card of another tooling company, Four Star Tooling 1 , which the evidence establishes is a competitor or potential competitor to the respondent, saying that should Mr Poulter require more moulds he should ring the company on the business card as they were friends of his, and they "make good moulds". The applicant then left with no further conversation. [12] Mr Poulter mentioned this matter to Carlos Aguita. The company subsequently began an investigation of the matter and on 15 July 2004 Mr Poulter was contacted in South Africa by the Management of the company, for the purposes of providing information about the events of 13 July 2004. [13] What had happened was that Mr Aguita had informed Ron Snow, who had in turn informed the general manager of the company, Feroz Mussa, of these events. There followed a meeting between the general manager, John Ahern, the company's Human Resources manger and Ron Snow which resolved to pursue the matter. On 16 July there was a meeting between the applicant, Ron Snow and John Ahern. The accounts of that meeting and some details concerning its conduct are also in contest between the applicant and Messers Ahern and Snow. [14] The applicant's evidence is that he informed Messrs Ahern and Snow that his interaction with Mr Poulter went differently than they would have understood from the information provided by Mr Poulter. It is useful and convenient, due to its brevity, to set out the applicant's witness statement concerning the events of the interaction with Mr Poulter on 13 July 2004 and what followed prior to the termination of the applicant's employment. "3. In June 2004 I went to see the Supervisor Ross Snow, who was not in his office but there was a person from South Africa sitting in Ross' office who introduced himself to me as an agent for the South African company (whose work we had got back from China), he asked me what was the quality problem with Haier in China, as I am Chinese he thought I would know the answers, I gave him a business card of someone I thought may know the answers to his questions. I then left the office and continued back to work. 4. In July after approximately 3 weeks I then was called into the office of the Manager Mr. John Ahern he asked me if I gave the South African Agent a business card approximately 3 weeks ago, I replied "Yes because he was asking me for information I didn't know the answers" and he told me I made a big mistake and he then dismissed me on the spot telling me I would get a redundancy, at this point Mr Ahern called security and I was led from the company site. 5. A week later I checked my pay slip, I wasn't sure what I had been paid for so I rang Mr Ahern and was told that I had only received one weeks pay, plus my last week working pay. I called the company and asked Mr Ahern why didn't I receive as promised a redundancy and Mr. Ahern said he never offered me a redundancy and that I was just sacked." 13 July 2004 [15] The applicant was summarily dismissed from his employment by the respondent because of his conduct on 13 July 2004. It was submitted on behalf of the respondent that his conduct was so disloyal as to justify the summary termination of the employment relationship. The applicant's case, on the other hand, represents the interaction as one in which he was effectively responding to inquiries and requests by a stranger for assistance, in relation to business being conducted with a large Chinese manufacturer, in the course of which he innocently offered a business card for the advantage of his interlocutor, who it turned out was Mr Poulter. [16] It is clear that the resolution of the conflict in the evidence in this matter is central to the cases of both parties. I shall commence with the conflict in the evidence given by the applicant and Mr Poulter. They were alone together in the office on 13 July when the interaction took place. [17] It is convenient to note that the first significant aspect of the interaction between the applicant and Mr Poulter is Mr Poulter's evidence that the applicant inquired after the whereabouts of Ron Snow at the commencement. This does not seem to have been contested by the applicant. [18] The applicant's witness statement is to the effect that he went to the office to see Mr Snow. His viva voce evidence was that he went to the office for the purpose of making a telephone call, although it is nowhere established in the evidence that he did so. [19] Perhaps the whereabouts of Mr Snow was relevant to permission to make the call. If not one must ask what the purpose of the inquiry as to Mr Snow's whereabouts was. The applicant's evidence is that Mr Poulter introduced himself to the applicant. Mr Poulter's evidence is that he was working, using a laptop computer, and that the applicant interrupted him to engage in a questioning conversation about the quality of work being received in the factory from Haier. The applicant maintains that it was Mr Poulter who engaged him in this conversation. Moreover, he says that Mr Poulter introduced himself as an agent of the South African company whose work had been received from Haier. Mr Poulter's evidence is that he at no stage identified his employment or business affiliation to the applicant, nor did the applicant seek to establish it. The applicant's evidence is that the only statement he made was that he did not know the answer to Mr Poulter's questions but that he had a friend who worked at Four Star Tooling and gave Mr Poulter the business card suggesting that he ask his questions of them. [20] In order to resolve these conflicts one may fairly consider the inherent probability of the contending sequences of this evidence. One way of doing so is to ask whether it is more probable than not that an international business executive, working in an office in a large tool making facility, engrossed with work concerning engineering production on a laptop computer, would spontaneously seek to consult with a tool room machine operator, looking for a phone in the office area. Particularly as the inquiry concerned the global business of injection moulding equipment for the automobile industry. It is also apt to consider whether Mr Poulter would expect that, simply because Mr Tian is of Chinese origin, he would be able to answer for the technical and other concerns relevant to Mr Poulter's business development functions in relation to the Chinese production component. If this were the case it was a matter of miraculous convenience that the applicant happened to have with him a business card for a company which also produces the type of products relevant to such inquiries and has connections, according to the applicant, in China. My conclusion is that such coincidences are inherently improbable. [21] In the alternative one might consider the inherent probability, in the circumstances, of a tool machine operator purposely having in his possession the business card of a competitor to the respondent seeking an opportunity to refer a visiting business executive from South Africa who had been attending the premises for several days, to that company; a place where, on his own evidence, he has a friend. To take the precaution of establishing the whereabouts of the Tool Room Manager would have been prudent. This explanation in my view is inherently more plausible. [22] I accept Mr Poulter's evidence that the applicant initiated the conversation, that the subject of the conversation concerned obtaining suitable products from China or elsewhere including Four Star Tooling. I also think it more probable than not that, having established the absence of the Tool Room Manager, not only was the applicant motivated to commence the conversation but was physically equipped and intended to give it substantial meaning and purpose in the form of a business card which referred this unidentified South African business contact to a potential competitor of the respondent, with which he was, on his own evidence, in some way acquainted [23] Having reached these conclusions, it seems to me a logical extension thereof that Mr Poulter's evidence, to the effect that the applicant was critical of Haier and recommended Four Star Tooling should be accepted. I reject the applicant's evidence that the interaction was initiated by Mr Poulter, I accept Mr Poulter's evidence wherever it is in conflict with the evidence of the applicant. I do so primarily for the reasons set out above. [24] I also am fortified in this by what is clear from the evidence are misconceptions, on the part of the applicant, as to when the relevant series of events concerning the termination occurred, including the interviews which preceded the actual termination of the applicant's employment. Mr Poulter was not in Australia when the applicant would have it that the interaction between himself and Mr Poulter occurred. Moreover, the applicant maintains that several weeks passed between his interaction with Mr Poulter and the termination of his employment. In fact it was a matter of days. 16 July 2004 [25] A meeting took place on 16 July 2004 between the applicant, Mr Ahern and Mr Snow. Both Mr Snow and Mr Ahern filed witness statements and gave evidence in the matter. An email message was provided by Mr Poulter describing the events of 13 July 2004 for the purposes of this meeting, to Messers Ahern and Snow, together with a copy of the Four Star Tooling business card. Mr Ahern has testified that arrangements were made to inform the applicant that he could have a witness present at this meeting and that he declined to do so. The applicant contests this. Mr Ahern, as the Human Resource manager observed the meeting and gave evidence as follows: "12. I commenced the meeting by informing Jun that we were about to have a very serious conversation. I then repeated the offer of a witness, which Jun declined. 13. Ron then proceeded to ask Jun a series of questions about the day in question. First he asked Jun questions about whether he had come up to his office on 13 July and if he had spoken to anyone. When Jun denied that he had spoken to anyone when in Ron's office, I reminded Jun that the questions we were asking were very serious and that he should carefully consider his responses before answering. 14. Ron then asked Jun if he was sure that he hadn't spoken to anyone. Jun then admitted that he did speak to a man. When asked what he had spoken about, Jun said that they had spoken about injection moulds. Ron then asked if Jun had given the man anything. Jun said that he did not. Ron then repeated the question but this time held up a copy of the Four Star Tooling business card. Jun then admitted that he had given the man the business card. Ron then put the allegation to Jun by asking him whether he had suggested to the man that he should go to the company on the business card should he require more moulds. Jun admitted that he had. When asked why, his only response was: "I have friends who work at the company and they need work" 15. Jun, at no time during this meeting, said that he had given Michael Poulter the business card "because he was asking for information I didn't know the answers." 16. Given Jun's clear admission, I interrupted the discussion and informed Jun that DMG viewed this matter very seriously, that his conduct was "absolutely and utterly unacceptable" and that DMG had no choice but to terminate his employment. 17. I thought Jun would try and say something to save his job but he just turned to me and smiled and said, "that's okay, so long as I get the money Toopolad got." By saying this I understood him to mean that he wanted a redundancy payment. A number of employees had recently been made redundant when the night shift had been closed. One of the employees made redundant was an employee by the name of Jagadish Tuppad. In response I said, "No, that was redundancy, you have been dismissed. Fired!" 18. Jun replied, "but I want some money and I will go away and I won't cause trouble for the company". 19. At this stage, I telephoned security to have Jun escorted from the premises. When security arrived, I walked Jun down to the bottom of the stairs from Ron's office." [26] The applicant rejects this account of the meeting and maintains that he simply repeated to Messers Ahern and Snow that Mr Poulter had approached him asking questions about the moulds from China, seeking his assistance, and that he had offered the Four Star Tooling business card merely as a way of referring Mr Poulter to a source of information which might satisfy those inquiries. [27] Moreover, the applicant's evidence was to the effect that there was a verbal interaction concerning what monies he would be paid in relation to the termination of his employment which, properly understood, was to the effect that he would be paid the redundancy severance payments prescribed by the certified agreement applicable to his employment. The evidence of Messers Ahern and Snow is to the effect that the applicant was told that he would be paid in accordance with the agreement not that he would be paid a redundancy or severance payment [28] I accept the evidence of Messrs Ahern and Snow where it is in conflict with that of the applicant. Their evidence is substantially consistent, with one small exception, in Mr Snows' evidence, concerning whether the applicant said that Four Star Tooling made better moulds, which I reject for the purposes of this decision. Moreover, it seems to me inherently improbable that the company managers would see any purpose in fabricating the applicant's denials in the circumstances if, as the applicant says, he readily admitted the conversation with Mr Poulter and the act of presenting him with the business card of Four Star Tooling. I think it more probable than not that the applicant doubted the extent of knowledge about 13 July 2004 available to Messrs Ahern and Snow, because he remained unaware of Mr Poulter's identity. I also consider it highly improbable that the company or any of its officers would resolve, simultaneously, to summarily dismiss an employee for disloyalty in such circumstances and to reward the offender with a substantial severance payment. Valid Reason . [29] I am required by the Act to give consideration to whether or not there was a valid reason for the termination of the applicant's employment. In this particular case I am satisfied that there was a valid reason for the termination of the applicant's employment related to the conduct of the applicant on 13 July 2004. The applicant committed an act of gross disloyalty by seeking to refer the business of the respondent to a potential competitor through an unknown person, who could reasonably have been taken to be a customer or potential customer of the company from South Africa and was probably thought to be by the applicant. Notification [30] I am satisfied that the applicant was notified of that reason on 16 July 2004 by Messers Ahern and Snow. In my view, not only was the nature of the reason made clear but also the gravity of the situation formed part of that notification. Opportunity to respond [31] I am satisfied that the applicant was given an opportunity to respond to the reason for the termination of his employment on 16 July 2004 and accept the evidence of the respondent's witnesses, that an opportunity to have a witness present was provided as part thereof and was declined by the applicant. In my view, Messers Ahern and Snow effectively outlined the details of the interaction with Mr Poulter and, even on the applicant's evidence, gave the applicant a reasonable opportunity to put forward an explanation for his conduct on 13 July 2004 as I have found it. Unsatisfactory performance [32] This is not a relevant consideration in this matter. The size of the employers establishment and its impact on procedures [33] The respondent is, by Australian standards, a large employer operating in a global business with qualified, dedicated and experienced management. In my view, the effect of the employer's size gave rise to an orderly, credible efficient and professional set of procedures which were followed in effecting the termination. Dedicated Human Resource management specialists. [34] There was no absence of dedicated Human Resource Management specialists or expertise in the employer's establishment which impacted on the procedures followed in effecting the termination. Any other matters. [35] Something was made by the applicant of the alleged agreement said to have been formed on 16 July 2004 to the effect that he would be paid as if redundant in accordance with the relevant certified agreement. Had I been satisfied on the evidence before me that such an agreement had been reached as the basis for the termination, subsequent breach or abandonment of the terms of that agreement by the respondent might have given rise to considerations of whether or not, in all the circumstances of the case, and having regard to the principles of industrial justice, referred to as "a fair go all round, " 2 the termination was in the event, harsh, unjust or unreasonable. However, it is not necessary for me to determine this issue. On what is before me, I am not satisfied that any such agreement was reached. That may have been Mr Tian's interpretation, however this of itself is insufficient to create an agreement necessary to attract the Commission's attention. [36] It was also submitted on Mr Tian's behalf that lack of facility in English contributed to a lack of reasonable opportunity to respond. [37] There is nothing before me which satisfies me that a request for an interpreter was made for the meeting of 16 July 2004, which might have given this submission substance. Moreover, whilst the proceedings before me were conducted with the assistance of an Mandarin interpreter they were primarily conducted in English with the assistance of the interpreter as required. On my observation Mr Tian has reasonable everyday English skills. Conclusion [38] For all of these reasons I find that the summary termination of the applicant's employment was not harsh, unjust or unreasonable. In my view, the conduct of the applicant on 13 July 2004 was of sufficient gravity to warrant not only the termination of his employment but also termination without notice. In my view, the conduct strikes at the most fundamental aspect of the required mutuality in an employment relationship without any mitigation, such as concern for public safety, health or welfare, or to avoid criminal activity, it was simply gratuitous disloyalty. Printed by authority of the Commonwealth Government Printer <Price code C> 1 Exhibit R4 2 Loty and Holloway v The Australian Workers' Union ((1971) AR (NSW) 95)