Coward, Andrew Ronald v Gunns Veneer Pty Ltd [1998] FCA 696

IN THE FEDERAL COURT OF AUSTRALIA

HOBART DISTRICT REGISTRY TG 14 of 1997

BETWEEN: ANDREW RONALD COWARD

Applicant

AND: GUNNS VENEER Proprietary LTD

Respondent

JUDGE: HEEREY J

DATE: 5 JUNE 1998

PLACE: HOBART

THE COURT ORDERS THAT: 1. The application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

HOBART DISTRICT REGISTRY TG 14 of 1997

BETWEEN: ANDREW RONALD COWARD

Applicant

AND: GUNNS VENEER Proprietary LTD

Respondent

JUDGE: HEEREY J

DATE: 5 JUNE 1998

PLACE: HOBART

REASONS FOR JUDGMENT The applicant appeals against a decision of Judicial Registrar Murphy on 13 November 1997 which dismissed his application for reinstatement but ordered that he be paid $1125 less tax, being three weeks' wages, in lieu of notice. The appeal is by way of re-hearing but by agreement with the parties no oral evidence was adduced and the evidence of the proceedings before the Judicial Registrar was treated as evidence on the appeal. The applicant commenced employment with the respondent as a driver/operator in February 1993. His employment was terminated on 23 October 1996 as a sequel to an incident which occurred about three weeks earlier when in company with a fellow employee, a Mr Barker, the applicant stole a radio aerial from a vehicle owned by another employee, Mr Dennis Latimer. On that occasion the applicant finished work at 2.30 pm and left the employer's premises together with Mr Barker in Mr Barker's car. As they drove past Mr Latimer's vehicle, which was parked in a public street about 20 metres from the employer's premises, Mr Barker suggested taking the aerial from Mr Latimer's vehicle "as a joke". The applicant agreed, Mr Barker pulled up near the other vehicle, the applicant unscrewed the aerial and threw it in the back of Mr Barker's vehicle. The two were apparently observed. A few days later Mr Latimer approached both the applicant and Mr Barker but they denied any involvement. The matter was mentioned to Mr Pearce, the production supervisor, but nothing occurred until about three weeks later when the site manager, Mr Vernhan, called a meeting with the applicant and Mr Barker. A union shop steward, Mr Hodgetts, was called. The applicant and Mr Barker were asked about the allegation of theft of the aerial and both repeatedly denied it. Eventually Mr Barker admitted that it was in the boot of his car. The applicant continued his denial but a short time later admitted his involvement. Mr Vernhan, who had earlier advised both men that he took a serious view of stealing from a fellow employee, advised both men that their employment was terminated. Mr Vernhan's evidence was that on going into the meeting he was prepared to give both employees a written warning if they had made full admissions, returned the aerial and apologised. He said that when they "lied and lied" to him he took a serious view of the matter and determined to dismiss them. He noted that there had been a previous incident with the applicant who had removed two cables from the premises without authority. There was evidence that the applicant was otherwise a satisfactory employee. Mr Vernhan did say in evidence, in regard to the fact that the applicant misled him at the interview, that "I don't hold that against him. If I took him back or if he come back again, I certainly wouldn't want him to do it again but I don't condemn anybody for - I mean, the first time he stole, he returned the goods. I didn't hold that against him." That has to be read, however, in the context of the application for reinstatement. The respondent was resisting the application for reinstatement but was not advancing any specific reason why it would be impossible if it were ordered to do so. The applicable statute was the Industrial Relations Act 1988 (Cth). Section 170DE provides: "170DE(1) An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service. 170DE(2) A reason is not valid if, having regard to all of the circumstances of the case, including the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid." Two issues arise: first, was there a relevant connection between the conduct and the employment; secondly, was the reason for termination valid. Relevant employment connection I have no doubt that there was a relevant connection with the employment here. The theft committed by the applicant was in consort with a fellow employee and at the expense of another employee. There is nothing in the point that the theft took place in the applicant's own time in the sense that he had just finished work and that Mr Latimer's vehicle was not parked on the employer's premises. Both Mr Barker and the applicant were on their way home. They knew the victim was a fellow employee. The car was very close to the premises and had been parked there because Mr Latimer was engaged at work. Reference was made to a passage in the judgment of Finn J in McManus v Scott-Charlton (1996) 140 ALR 625 at 636 where his Honour said: "Secondly, once an employee's conduct can be shown to have significant and adverse effects in the workplace, because of its impact on workplace relations, on the productivity of others, or on the effective conduct of the employer's business, that conduct becomes a proper matter of legitimate concern to an employer, and does so because of its consequences." That passage is not to be taken as establishing some kind of mandatory criterion so that an employee must succeed unless the employer can show the conduct had "significant and adverse effects in the workplace"; rather his Honour was discussing the circumstance of the particular case before him. In the present case I do not think any citation of authority is necessary to confirm the commonsense conclusion that stealing from a fellow employee is highly disruptive of good morale in the workplace and is conduct which an employer is entitled to treat very seriously. There is further the element of the applicant's lying, both to his fellow employee Mr Latimer and initially to Mr Vernhan at the interview. The respondent in my view was entitled to take that dishonest conduct by the applicant as compounding the original offence. Plainly it was both the stealing and the lying about it which resulted in the decision to terminate, as is confirmed by the letter which the respondent sent to the applicant. That letter dated 13 November 1996 was said to confirm the discussion "concerning the removal of an aerial from an employee's motor vehicle. You during that meeting consistently denied involvement in the removal of the aerial until subsequently you admitted the theft of same. As I advised at the time the Company regards stealing from a work mate to be an extremely serious issue and as a consequence your employment was terminated at 2.20 pm on that day which action was agreed to by the CFMEU representative present, ie Carlton Hodgetts." Valid Reason This issue is necessarily covered in what I have already said. The respondent when confronted with a theft from a fellow employee followed by an initial untruthful denial had a range of possible actions, one of which was termination. That was an option that was reasonably open to the respondent as an employer. The applicant did not seek reinstatement because he has in the meantime obtained employment elsewhere but in any event for the reasons I have given the application will be dismissed.