PR939427 PR939427 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170CE application for relief in respect of termination of employment Chellew, Alan Leslie and Australian Railroad Group Employment Pty Ltd (U2003/1277) DEPUTY PRESIDENT MCCARTHY PERTH, 15 OCTOBER 2003 Termination of employment. DECISION Background [1] This matter concerns the consideration pursuant to s.170CH of a remedy following a determination that the employment of Mr Chellew ("the applicant") was harshly, unjustly or unreasonably terminated by the Australian Railroad Group Employment Pty Ltd ("ARG"). [2] Proceedings were conducted on 25 September 2003 for the purpose of considering the provision of a remedy for the termination that I found to be harsh, unjust or unreasonable on 2 September 2003. 1 The parties had been unable to reach agreement between themselves regarding a remedy. Nature of remedy hearing [3] In these proceedings ARG appeared to want to raise issues that were more appropriately considerations for the substantive hearing but were either not raised there or there were findings relating to those issues in the decision issued. [4] If the bases of the determination made by me on 2 September 2003 are wrong then the avenue for reconsideration is not for ARG to now seek to reargue the matters in proceedings for remedy. In particular if there were other reasons for the termination that were not in evidence and consequently were not considered by me in those proceedings then these remedy proceedings are not the vehicle to redress any wrongs in that regard and do not present another opportunity to put new material. [5] The obligation of the Commission to have regard to whether there was a valid reason pursuant to s.170CG(3)(a) has been discharged and the applicant did not have an opportunity to challenge the validity of those other reasons in the substantive hearing and should not be obliged to do so now in s.170CH proceedings. [6] It is clear that ARG was not limited to the reasons it had provided to the applicant in presenting its argument in arbitration that it had a valid reason for the termination: "We think that there are two difficulties in the approach adopted by the Commissioner to the question of whether there was a valid reason for Mr Zammit's termination of employment. First, the Commissioner seems to have confined himself to determining whether the reason given for Mr Zammit's termination was a valid reason. The question in s.170CG(3)(a) is not so limited. Rather the Commission is obliged to consider whether there was a valid reason for the termination - that inquiry is not limited to the reason given by the employer for the termination." 2 [7] Similarly an employer is not limited to only those reasons it was able to substantiate at the time of termination. Any reason that subsequently comes to light may be used to justify a dismissal. As stated by the Full Bench in Australia Meat Holdings Pty Ltd v McLaughlan 3 ("McLaughlan") : "Both of the judgments [McHugh and Gummow JJ] in Byrne cite Lane v Arrowcrest with approval and both support the proposition that facts in existence at the time of the dismissal but which are only revealed later might justify a dismissal which would otherwise be harsh, unjust or unreasonable." 4 [8] In applying clause 11(a) of an award which stated " Termination of employment by an employer shall not be harsh, unjust or unreasonable " the High Court in Byrne v Australian Airlines Ltd 5 indicated that the primary judge's duty was to consider whether the termination had been harsh, unjust or unreasonable based on "the evidence given at the trial" : "This means that the primary judge was bound to consider whether, on the evidence given at the trial , the respondent could resist the allegation of breach of cl 11(a), provided that the evidence concerned circumstances in existence when the decision to terminate employment was made." 6 [9] A circumstance where there may have been an opportunity to put new material is if following the substantive hearing new material or information had come to the attention of ARG that would have a bearing on whether there should be a remedy at all and if so what that remedy should be. [10] However there was no material attempted to be introduced at these remedy proceedings that ARG was not aware of at the substantive proceedings. If ARG now considers it should have availed itself of that material at the substantive proceedings to a greater extent, that does not justify me relying on those matters for the purpose of these proceedings. Determination regarding remedy Effect on ARG's viability [11] I must have regard to the effect of the order on the viability of the employer's undertaking, establishment or service. At the remedy hearing, Mr Heathcote for ARG submitted: "The respondent will make no submission that viability is going to be in any way affected by an order to reinstate or to grant a remedy to Mr Chellew." 7 [12] I do not consider the issuance of an order will have any effect on the viability of ARG. Length of service [13] I must also have regard to the length of the employee's service with the employer. ARG argued that the employee did not have long service with ARG. It was submitted that he had been employed for just over two years. In these circumstances ARG said it should weigh against a remedy being ordered and against an order for reinstatement. [14] The applicant submitted that the length of service should be considered in the context of some seventeen years' previous service with Westrail. The fact that ARG took over the part of the operations where the applicant had been employed should be a consideration when regarding his length of service. Mr Schapper submitted for the applicant: "He was employed in the very particular circumstances in which the respondent came to take over this aspect of the government's rail operations. And the terms on which his employment was taken on by the respondent were in recognition or recognised in part the substantial service he had with Westrail prior to that. So, as against the assertion, well, he was only there 2 years, we say, firstly, he was there from the very beginning of the respondent's operations in this State and could not have been there for any longer. And, secondly, in any event, he was picked up from Westrail in the particular circumstances that are probably fairly unique and substantial regard ought be had, in my respectful submission, that he had 17 years service with Westrail which counted for particular purposes for the purpose of his employment with ARG. So, to simply brush him off and say, he has only been there 2 years, is to, as Mr Heathcote has systematically done in this case, brushed aside very substantial considerations which go to the contrary of the submission that he makes. My client was only with the respondent for 2 years but he was with the respondent's predecessor for 17. And the respondent was obliged by the terms of the contract that it entered into with him to recognise that prior service." 8 [15] In the circumstances of this matter I do not consider the applicant's length of service is a basis to not provide a remedy or has significant bearing on what the nature of that remedy should be. Lost remuneration [16] I am required, in determining whether to issue an order, to consider the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated. The applicant has lost and unless reinstated is likely to continue to lose remuneration as a result of his termination. The applicant pointed out that the position from which the applicant was terminated is relatively well paid and that the opportunities in Western Australia for similar positions are limited. 9 ARG disputed that there are limited opportunities for locomotive drivers in Western Australia. 10 The applicant has obtained other employment but at a significantly lower level of remuneration. [17] I consider that the circumstances here regarding lost remuneration weigh in favour of an order for remedy issuing. Efforts to mitigate loss [18] I am required to have regard to the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination. [19] The applicant obtained other employment and reasonably soon after his termination and remains in that employment. I do not accept ARG's submission that the applicant's efforts to mitigate his loss were " insufficient or inadequate " 11 . I am satisfied the applicant made sufficient effort in this regard to weigh in favour of a remedy issuing. Other matters [20] I am also required to have regard to any other matter that I consider relevant. There are a number of matters that I consider relevant. Attitude of applicant [21] ARG claimed that there were range of difficulties experienced in managing the applicant. That may well be so but those difficulties were not a reason for termination, or at least they were not put as a reason. If they were not a reason for termination, even if the assertions and evidence ARG presented establishes that the applicant is difficult to manage, it does not make it inappropriate to issue a remedial order. That is particularly so if ARG's concerns with the applicant's attitude were insufficient to warrant termination of his employment or to constitute a reason, amongst others, for the termination. [22] Furthermore I have an obligation in the discharge of my functions to have regard to a fair go all round . I do not consider in the circumstances of this matter it would be a fair go to the applicant if the dismissal was for one reason but he was not provided with a remedy based on other reasons associated with his behaviour or performance. [23] As the difficulty in managing the applicant was not raised as a basis or justification for the termination, I consider I am obliged to infer that it did not impact on the decision to terminate. If it did not impact the termination, whilst it is relevant to my consideration of the remedy, I do not consider it should prevent a remedy from being ordered. Embarrassment [24] ARG claims that a reinstatement of the applicant would lead to an embarrassment for them. ARG referred me to the Industrial Relations Court decision in Nicolson v Heaven & Earth Gallery 12 where Wilcox CJ stated: "If a reinstatement order is likely to impose unacceptable problems or embarrassments, or seriously affect productivity, or harmony within the employer's business, it may be "impracticable" to order reinstatement..." 13 [25] That decision was in the context of the use of the word " impracticable " in s.170EE of the Industrial Relations Act 1988 . The present Act in s.170CH(3), requires an analysis of whether the Commission considers reinstatement to be " appropriate ". [26] In N. Ellawala v Australian Postal Corporation the Full Bench stated: "The current statutory framework requires the Commission to consider whether reinstatement is "appropriate". Under the former s.170EE(2) the Commission was required to consider whether reinstatement was "impracticable". A consideration of the appropriateness of reinstatement involves the assessment of a broader range of factors than impracticability." 14 [27] And in McLauchlan the Full Bench stated: "In considering whether to order reinstatement the Commission is not confined to an assessment of the practicability of such an order but rather must decide whether such an order is appropriate." 15 [28] In G.C. Kerry v Ansett Australia Ltd 16 Duncan DP found: "...it is not inappropriate to order reinstatement. In so finding I do not overlook the fact that there may be a degree of embarrassment for all concerned at the beginning. I do however bring into the balance the impact on Mr Kerry of not ordering reinstatement." [29] I do not accept the argument that ARG's embarrassment should preclude the applicant's reinstatement. The embarrassment to which ARG appears to refer is the embarrassment of management when other employees learn of the applicant's reinstatement. What in effect ARG is saying is that even if it has been found that they did dismiss the applicant harshly, unjustly or unreasonably that the termination should stand because it would be embarrassed. By inference ARG appears to be saying that it is acceptable for the applicant to be embarrassed by its actions in dismissing the applicant but that ARG should not be embarrassed in the rectification of those actions, even if the termination was not justified. Effect on workforce [30] ARG raised the issue that if the applicant were reinstated it would create a significant difficulty in its capacity to manage. This is a valid issue for ARG to raise. [31] If ARG is stating that there would be difficulty in the context of its capacity to manage the organisation and especially a cultural change ARG is trying to bring about, that is a matter of concern. [32] ARG appeared to be saying that by having taken the action to terminate his services if the applicant was reinstated it would send the wrong message to other employees and jeopardise its capacity to make and manage cultural change. In support of this ARG claimed that the applicant was " difficult to manage ", " argumentative " and " quite often less than cooperative in the workplace ". 17 [33] However no matter how difficult ARG now claims the applicant to be, those were not reasons put forward for his dismissal. [34] If the applicant was difficult before the termination and he was not dismissed for reasons associated with that difficulty the only proper consideration for me is whether by reinstating the applicant he would regard it as a justification for behaviours and performance that ARG is no longer prepared to tolerate. I have no evidence that satisfies me that the applicant would approach reinstatement on such a basis. [35] Furthermore, whatever remedy results out of these proceedings should not be regarded as vindication of all of the behaviours that ARG has now identified as being of concern. I did comment in my earlier determination that the applicant did not appear to have any remorse about his dishonesty when challenged about the absences. [36] If ARG was no longer prepared to tolerate the applicant's approach and behaviour then he is now aware of what is expected of him even if only from these proceedings. ARG should nevertheless spell it out to him. If the applicant then proves to be performing unsatisfactorily ARG may well be in its rights to terminate his employment. Absenteeism record and operational repercussions [37] ARG raised this issue in a number of respects during these proceedings. It asserted that the applicant's absences from work had created operational difficulties and inefficiencies. [38] However, the extent of absences was raised in the substantive proceedings and findings were made. In particular, findings were made that ARG had not relied on there being a pattern of absences or such a regularity of absences that there was a justification for dismissal, either for that reason alone or in combination with other reasons. ARG did not provide any evidence of its allegations of excessive sick leave and improper use of sick leave beyond the two specific instances discussed in my decision. In those proceedings ARG did not establish that those absences caused ARG's operations to be disrupted or jeopardised. It is therefore not appropriate that I reconsider the extent or timing of absences in these proceedings in the context that they are now raised. [39] The only basis on which I could consider these issues would be if the record of absenteeism had either formed a basis for the termination or at least been a consideration. However there was no such assertion at the substantive hearing. 18 If what was put at the substantive hearing was wrong or inadequate, again that opportunity has passed. I concluded in my decision that there could "be no inference drawn from the applicant's record of absenteeism for the purpose of these proceedings" 19 as no evidence was produced to support any such inference. [40] ARG in support of this assertion adduced evidence that the applicant manipulated his absenteeism to suit his social life. In support of this contention they again led evidence that he had made comments that his "life is only a phone call away" 20 . ARG asserts from this that the applicant blatantly and regularly arranged his social affairs and disregarded any work obligations. However, evidence of the comment does not make conduct inferred from the comment an actuality. [41] The comment was also raised in the context of the trustworthiness of the applicant. This is addressed below. Will be dismissed anyway [42] ARG claimed that organisational change is likely to lead to terminations of employment with the result that the applicant, if re-instated, will be terminated anyway. I fail to see how this will automatically follow unless decisions have already been made about (i) the need for terminations; (ii) which positions will be affected by those terminations; (iii) the number of terminations; (iv) the criteria for selection of individuals to be terminated; and (v) application of that criteria to the applicant. [43] I do not consider this argument put forward by ARG forms a justifiable basis to not issue an order. Trustworthiness [44] ARG provided evidence and submissions that the trust and confidence necessary for the relationship between ARG and the applicant to continue, had been irrecoverably broken. The basis for this position was a limited number of examples where the applicant had lied about an issue. One such dishonesty was where the applicant was allegedly overheard boasting that he had attended a cricket match at Lilac Hill, when he had requested the time off work to attend his son's high school orientation day or similar event. 21 [45] Furthermore ARG produced evidence that the applicant had regularly used the phrase " my life is only a phone call away ". This, ARG claimed, demonstrated a lack of honesty by the applicant especially as he had denied use of such a phrase in the s.170CG proceedings. [46] The evidence of the examples of these dishonesties was not seriously challenged and there was no cross-examination on the incidents. I accept ARG's evidence on these issues. However, I do not consider the trustworthiness necessary for a proper relationship cannot be re-established. For example, in evidence, Mr Blight a Driver/Coordinator for ARG stated: "How do you describe the working relationship?---Our working relationship, it's fine. Could you describe for the Commission what your level trust in Mr Chellew is?---I - I would have to say, I don't trust Alan." 22 [47] Despite alleging that he could not trust the applicant, the witness stated that his working relationship with the applicant is "fine" . To my mind, the working relationships have not been irreparably damaged. Real reason for termination [48] I agree with the observation of Mr Schapper that these remedy proceedings were insightful in that they disclosed that the real reason for the applicant's termination may well have been a view held by ARG that he: · Had a bad attitude. · Manipulated his work to his own advantage without concern for the detriment to ARG's operational requirements. · Had a bad influence on other employees. · Had an unacceptable absenteeism record. · Was difficult to manage. · Resisted change. · Obstructed operational efficiency. [49] The applicant may have displayed all or some of those attributes and those behaviours may or may not be or have been a justification for dismissal, but they were not the reasons put in the s.170CG proceedings. I therefore do not regard them as reasons on which I should put much, if any, weight in my considerations for remedy. [50] However, as Mr Schapper also observed, 23 if these are behaviours of the applicant and ARG properly addresses and manages a change in those behaviours to which the applicant does not properly or sufficiently respond, that may constitute a basis for termination that is not harsh, unjust or unreasonable. For example if the applicant does establish one man driver operations and the applicant refuses to comply with lawful directions in that regard, which he has apparently threatened to, then providing ARG has met all its obligations regarding the lawfulness of such a direction they would be within their rights to terminate the applicant's employment. 24 However until the threat of refusal is tested it cannot be considered a refusal or for the purposes of this matter as a reasonable basis against issuing a remedial order. Conclusion regarding remedy [51] In applying the obligations of s.170CH I need to have regard to its purpose. The relevant object of the Division in s.170CA(1)(c) is: "to provide for remedies appropriate to a case where, on arbitration, a termination is found to be harsh, unjust or unreasonable;" [52] Section 170CA(2) provides: "The procedures and remedies referred to in paragraphs (1)(a) and (b), and the manner of deciding on and working out such remedies, are intended to ensure that, in the consideration of an application in respect of a termination of employment, a "fair go all round" is accorded to both the employer and employee concerned." [53] A fair go in the circumstances of this matter, I consider should not disadvantage the applicant because issues that may have impacted on ARG arriving at a decision to terminate his services, were not given or canvassed in the s.170CG proceedings. However, that needs to be balanced against a fair go for ARG. I am sure if ARG had the opportunity again, it might do things differently. ARG might be forced to be exposed to a possible risk of inefficiency and a workforce that is less conducive to a change in culture amongst other things because the termination wasn't done properly. [54] Furthermore, as I noted in the s.170CG proceedings, the applicant did not seem to have any real remorse about his dishonesty when approached about one of the absences that caused his dismissal. He did not give evidence in the remedy proceedings so I have no basis to form any strong impressions as to how he would integrate back into the workforce and the attitude and approach he will take should he be reinstated. [55] The fact that the applicant did not give evidence in the remedy proceedings causes me some concern. It would have provided a real opportunity to dispel any doubts about the claims by ARG that he could not be trusted. I am conscious of ARG's concerns in that regard and I consider from the evidence produced, there are reasonable grounds to have those concerns. A further concern I have is the risk that the applicant, or the workforce, might perceive any remedy ordered as a reward for poor conduct or performance. [56] Weighing all of these issues up I consider that a fair go would be for the applicant to be reinstated by being reappointed to his former position. I consider reinstatement appropriate in the circumstances. Should the applicant by performance or conduct not integrate into the workforce or should he frustrate ARG's operations or requirements, ARG may well be justified in terminating his services for such reasons. 25 [57] I also consider that ARG should pay to the applicant the equivalent of the remuneration lost by the applicant because of the termination. I will not specify the amount in this regard but will provide liberty for one month for either party to request an actual amount to be specified in the absence of agreement between them of what amount that should be. [58] However I do not consider it appropriate to maintain the applicant's continuity of employment. [59] An order will issue in the terms outlined. BY THE COMMISSION: DEPUTY PRESIDENT Appearances: D. Schapper of Counsel for the applicant S. Heathcote of Counsel for Australian Railroad Group Employment Pty Ltd Hearing details: 2003. Perth: September 25. Printed by authority of the Commonwealth Government Printer <Price code {D}> 1 [PR937331], 2 September 2003. 2 MM Cables [Print S8106], 17 July 2000 per Ross VP, Drake SDP and Lawson C at [42]. 3 [Print Q1625], 5 June 1998 per Ross VP, Polites SDP and Hoffman C. 4 Ibid. at p.9. 5 131 ALR 422. 6 Ibid at 463-464. 7 Transcript PN906. 8 Transcript PN1257-1258. 9 Transcript PN1290. 10 Transcript PN1348-1349. 11 Transcript PN906. 12 57 IR 50 (20 September 1994). 13 Ibid. at 61. 14 [Print S5109], 17 April 2000, Ross VP, Williams SDP, Gay C at [29]. 15 Op. cit. at p.17. 16 [Print Q6686], 21 September 1998. 17 Transcript PN932. 18 [PR937331], 2 September 2003 at [12]. 19 Ibid. 20 Transcript PN1152. 21 Transcript PN1148. 22 Transcript PN1146-1147. 23 Transcript PN1285-1286. 24 Transcript PN1271-1273. 25 As acknowledged by Mr Schapper: see Transcript PN1285-1286.