INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NO. NI 638 of 1994 Between: SARGON JOHN Applicant And: DOME ENGINEERING PTY LTD Respondent Before: Judicial Registrar Walker Place: Sydney Hearing Date : 21 December 1994 REASONS FOR JUDGEMENT This matter came before me on the 22 November 1994 for hearing and during the course of the proceedings the parties decided that they should have further discussion concerning settlement. Although this matter had been to a mediation prior to the hearing both the applicant's solicitor and the industrial advocate representing the respondent did not attend and the process had been unsuccessful. The applicant had been employed by the respondent for the last 13 years as a press operator and alleges that on the 5 July 1994 at about 9.00 am he went to the lunch room for his tea break to find that the door was stuck. He then alleges that he pushed it and gave it a kick as it sometimes gets stuck and then realised it was padlocked. He then approached the foreman to unlock the door. He further alleged that he did not damage the door and that it already had holes in it and the latch had screws missing. Later that day his employment was terminated, for serious misconduct in that he wilfully damaged company property. The respondent tendered a photograph of the alleged door, which indicated a small depression in a rather old shabby wooden door. The applicant's affidavit states that on the 16 October 1994 he was contacted by the police and he took part in a record of interview, but the police have not taken any action. The respondent filed six affidavits, two by the general manager Mr Wheeler and one each by four fellow employees of the applicant. These affidavits are remarkably similar as the deponents allege they witnessed Mr John kick the door and that the general manager Mr Wheeler had called a meeting of the staff on the 29 June 1994, a week before the alleged incident and had warned the staff that anyone caught vandalising any property would be instantly dismissed. Having had the opportunity of reading the affidavits filed by both parties and having listened to the evidence given by the applicant I felt that I had a reasonable understanding as to the issues in this case. Mr Salmon, the respondents advocate, indicated he would have six witnesses plus a police Officer. I had read the affidavits of the witnesses and could not see how a police officer who was not an eye witness to the alleged incident could help the respondent's case. During cross examination of the applicant Mr Salmon was attempting to get the applicant to agree that the respondent company had informed its employees a week before the alleged incident, that wilful damage to company property would result in termination of employment. I immediately attempted to test Mr Salmon in light of the similarity between this case and BOSTIK (AUSTRALIA) P/L v GORGEVSKI (1992) 36 FCR 20 and in particular to the statement by Sheppard and Heery JJ that, "Employers can promulgate policies and give directions to employees as they see fit, but they cannot exclude the possibility that instant dismissal of an employee for non-compliance may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable." Mr Salmon then said he was going to distinguish this case on the basis that there was an implied term in the applicants contract of employment not to wilfully destruct company property. The transcript from this point on is reproduced hereunder, MR SALMON: Yes, I intend to refer to Bostik, Mr Registrar, down the track on the basis of distinguishing it from this case. THE J. REGISTRAR: This case has me somewhat worried really. The applicant was employed for 13 years with this firm. MR SALMON: Yes, indeed. THE J. REGISTRAR: 13 years and the allegation is that he kicked in an amenities block door and he was instantly dismissed. MR SALMON: Yes. THE J. REGISTRAR: And this case has not settled. MR SALMON: This case is not settled. There was an attempt to settle through mediation before Tomlinson JR, Mr Registrar, but it was not resolved at that stage. THE J. REGISTRAR: So it has been to mediation? MR SALMON: There has been mediation, yes. MR TAYLOR: Yes, sorry Mr Registrar, I was not at that meeting and I do not think my friend was either and I am not sure exactly what transpired. THE J. REGISTRAR: It just seems to me that this could be a long case and really from looking at the affidavits, prima facie there is a pretty good case against the respondent, I would say. To prove there is a valid termination in these situations is quite difficult. Referring back to the Bostik case, how can you distinguish that case? MR SALMON: If I could perhaps turn to those arguments. THE J. REGISTRAR: I am not interrupting your examination, I just think this is a case that - we could go all day on this and really, the facts are quite straightforward. MR SALMON: Well, Bostik raised the situation of instant dismissal for smoking in a non-smoking area. In our submission, the applicant is party to a contract of employment that contains implied terms. There can be no clearer implied term in a contract of employment than wilful destruction of company property. THE J. REGISTRAR: Kicking in an amenities block door as wilful destruction? MR SALMON: Yes, we have got evidence of the four witnesses, we have got a photo of the damage done. The police of NSW have investigated a criminal complaint against the applicant. If a criminal investigation does not constitute a valid reason. THE J. REGISTRAR: Was this taken to the police because an employee kicked in a door? MR SALMON: The matter was referred to the police and the police have created a file on it and Constable Newton is here to tell the court about the progress in relation to that case. The termination was taken prior to going to the police. The termination was taken on the basis that there is a valid reason, all employees were aware of destruction to company property. They were issued a clear warning at this meeting, we have got four affidavits to contradict what the applicant is saying, that they were all fully aware that if they go on wilfully destructing company property they will be terminated. THE J. REGISTRAR: Why would not the amount of the door be taken out of his wages and he be penalised that way? Surely that would be the way to solve a problem like this. MR SALMON: Well, if it keeps going down that path then effectively, it might be argued that the employer is condoning such action. if employees are allowed to wilfully destruct company property and that does not constitute a valid reason for termination... THE J. REGISTRAR: When someone is employed in a company for 13 years... MR SALMON: Yes, I understand that. THE J. REGISTRAR: And there is doubt with that, whether it actually destroyed the door. You say there is witnesses, we do not know the facts behind - quite often it comes out in these type of cases that there are reasons why people make these accusations against other employees. I see it time and time again. MR SALMON: Well, the onus is on the applicant to draw that. THE J. REGISTRAR: And no doubt that will be the argument that the applicant is going to take. MR SALMON: Would it assist to show you a photo, Registrar? THE J. REGISTRAR: It is a balance of probabilities I have got to look at these cases on. MR SALMON: Absolutely. THE J. REGISTRAR: I will sit here all day and listen to the evidence and when it comes to the end I have got to balance it up on that basis. Now surely, this is a case that cries out for some sort of settlement without wasting everyone's time. MR SALMON: I understand your position in relation to the matter. THE J. REGISTRAR: I do not mind sitting here, do not get me wrong. I do not mind sitting here for two days to hear this case but it is a case that surely should have settled before this stage. MR SALMON: In terms of conciliation, I mean, I have got a responsibility on all respondents to say... THE J. REGISTRAR: I know that, I am not criticising you at all, Mr Salmon. MR SALMON: No, I understand that but what I was about to say, Registrar, was that I would always say if the Registrar or the Industrial Relations Court is going to say, well attempt to further resolve it by conciliation, I have no problems in relation to that. THE J. REGISTRAR: I want to resolve the case today one way or the other but it seems to me that there has been a breakdown in the process somewhere along the line, I am not sure - Mr Taylor has come into this case late, is that the situation? MR TAYLOR: Well no, Mr Registrar, I was in it early, however, after some discussions with the representative of the MTIA and with my client, I took instructions for financial reasons that I would not attend the conciliation conference. THE J. REGISTRAR: Well that may have had a detrimental effect on the settlement of the case possibly. I am not trying to criticise you either. MR TAYLOR: Well, in retrospect that may have been the case as from what I understood may have happened but certainly prior to the conciliation there seemed to be no question at all that the matter could settle. THE J. REGISTRAR: Especially when the police are brought into a case like this. MR SALMON: I can understand blowing it out of proportion and so forth but we have got plenty of evidence to suggest that the applicant wilfully damaged company property and a week prior to that... THE J. REGISTRAR: He kicked his foot through the door of the amenities block, is that the accusation? MR SALMON: Kicked it in, destroyed the locks on the door that have to be replaced and I have got a photo of the damage done to the door. THE J. REGISTRAR: Can I have a look at the photo of the door? MR SALMON: Certainly. Now, the door flew open, broke the locks on the door and this damage was done to the door. THE J. REGISTRAR: This is in a factory, this door, in an amenities block in a factory? MR SALMON: In a factory, with other incidents of damage going on at the property. THE J. REGISTRAR: I have looked at these things, not from this jurisdictional point of view but from the Supreme Court, I have seen photos of amenity blocks and working places and this would be just average, I would say, of any door that is in an amenities block. Surely, it has been kicked to death, this door, it has got scratches all over it, it has got one particular dent in it that could have been caused by someone's foot but it has got dents all over it caused at various times, obviously, from people. MR SALMON: But surely it is the incident, Registrar, it is the incident that took place that is of primary importance. THE J. REGISTRAR: I am not saying that but for 13 years service to dismiss someone for putting a little ding in the side of a door seems a bit over the top to me. MR SALMON: Well, as I suggested - yes, he has been there for 13 years and an employee of that standing should know better. THE J. REGISTRAR: Well, so he should but, you know, instant dismissal though is a pretty heavy thing, Mr Salmon. MR SALMON: It is, what could be more valid reason for termination. Of course, Registrar, you would know that the onus is on us to show that there is a valid reason and what more valid reason could there be to terminate someone than for wilful destruction of company property? THE J. REGISTRAR: Well, if they took the Managing Director's car and wiped it out or burnt the place down I could understand that. MR SALMON: I agree there are different degrees of incidents, I agree there are different degrees of instances where that might occur but especially in relation to a one week warning prior to this. THE J. REGISTRAR: Yes, but the warning comes back to the Bostik case and as I said before, to instantly dismiss someone on a warning such as that. In the Bostik case it was a warning about smoking in an area where he should not have smoked. MR SALMON: But the court found in Bostik that the terms of non smoking in a smoking place was not an implied term. In our submission there is an implied term in every single contract of employment in Australia, for that matter other countries. And that implied term is that an employee shall not wilfully destruct company property. That is where it can be distinguished from Bostik. THE J. REGISTRAR: There must be a sliding scale upon the amount of damage though, surely. MR SALMON: I agree with you there, Registrar, but I say that that is an implied term that was repudiated deliberately one week after this incident occurred about the warning. THE J. REGISTRAR: Well, the applicant's story indicated that he did not agree that that warning was given anyway. MR SALMON: Well, we have got four, we can call 36 others. THE J REGISTRAR: Well, going back to the Bostik case, this same meeting went on, the applicant in that case did not attend the meeting, from memory, he had a language problem anyway as does our applicant, he has some problem, he does not have a total control of the English language, that could be difficult to distinguish, surely. MR SALMON: I understand what you are saying but I think we can distinguish Bostik on the basis that smoking was argued by the court not to be implied. In our submission wilful damage to company property is an implied term in all contracts of employment. Even if you apply the BP Refinery case that you would be well aware of. THE J. REGISTRAR: Yes, all right but this damage is insignificant though, surely. It does not show the locks here, it just shows a small dent in a rather large green door that has been scratched and damaged previously. MR SALMON: It is a pretty strong door that took a bit of kicking with steel-capped boots. THE J. REGISTRAR: Mr John does not seem to be a rather large man. MR SALMON: No, I agree with that but necessarily if we condone any active wilful - I agree that there are different degrees of scale but if we condone that kind of behaviour... THE J. REGISTRAR: You do not have to condone it. The procedural requirements set out in the Industrial Relations Act, when you look at the recommendation and the convention, set out a procedural requirement that you undertake before you dismiss anybody. MR SALMON: In our view we could not be more in compliance with the Act. The general manager interviewed 4 persons that came forward, then the employee representative upon which Mr John and the other employees represented were present in the meetings, an allegation was put to Mr John about the matter, Mr John in our evidence showed that he admitted to kicking the door and a reason was asked by management why he did that. He offered one comment which was something to do with a plate burning in an oven. We tried to expand upon that point in the interview but Mr John would not expand on that particular point so procedurally we were fair. THE J. REGISTRAR: He was obviously upset about something or other was he not? MR SALMON: Well, obviously upset; he kicked and barged the canteen door, that is how upset he was, to cause destruction. Now those locks are going to have to be replaced. THE J. REGISTRAR: But surely procedurally you should have looked into why he did it. MR SALMON: Well, they did, they asked him, why did you do this? THE J. REGISTRAR: He did not express the reason though, that is the situation, is it not? MR SALMON: Well, he quasi expressed it, he mentioned something and when he was pressed further for more information he did not deliver that information. THE J. REGISTRAR: But to dismiss someone for that incident after 13 years of service seems - he could have been made an example of in the office, in the factory for example. MR SALMON: This is exactly what it is, Registrar, this is an example. THE J. REGISTRAR: That is the ultimate sanction though, to terminate someone's employment when they have been there for 13 years, he has got long service leave. THE J. REGISTRAR: Is there any chance of Mr John being reinstated by the respondent in this case. MR SALMON: I am under instructions to say no, there is no chance of reinstatement or re-employment. THE J. REGISTRAR: Is Mr John employed at the moment? MR TAYLOR: He is, sir. THE J. REGISTRAR: Does he want to be reinstated? MR TAYLOR: Given the obvious depth of feeling that runs against him in the firm he would be very reluctant to go back there. THE J. REGISTRAR: Has he indicated to you what amount of compensation he requires. MR TAYLOR: Mr Registrar, he was unemployed for a period of 4 months from the date of this dismissal until just the beginning of this month; I think it is almost exactly 4 months a I understand the situation. THE J. REGISTRAR: What is that worth in money terms, Mr Taylor? MR TAYLOR: It is worth about - he was earning about $490.20 per week as a base rate as I understand it and he was earning more with overtime so that would be about $3,500 but, I am sorry, sir, I have not... THE J. REGISTRAR: That is a global figure then, $3,500? MR TAYLOR: No, I think I may have miscalculated that. THE J. REGISTRAR: I am hopeless at mathematics. MR TAYLOR: No, $8,500, I am sorry, sir. THE J. REGISTRAR: $8,000 sounds better, yes. We just settle the matter on the same sort of salary so it would be around $8,000. Have those figures ever been looked at, Mr Salmon? MR SALMON: I believe that there was a quantum talked about in the mediation but I was not present in the mediation, Registrar. I mean I could clarify that. THE J. REGISTRAR: Do you think it would be advisable to put that to your client now and... MR SALMON: I am not sure whether it is advisable. In our submission we have got a clear case of a valid reason for termination but I understand what the Registrar is saying; I will put that to them. THE J. REGISTRAR: You have got a difficult road to hoe I could say in relation to the valid termination, looking at Bostik's case and I think it is Gregory v Philips, Byrne v Frew, they all have this thread through them. MR SALMON: They do. THE J. REGISTRAR: And it is very difficult for you to distinguish those cases I think in the circumstances here. If Mr John had been employed for, say, a month I could understand but someone who has been employed for 13 years and to be instantly dismissed for throwing a tantrum and kicking a small hole in a door... MR SALMON: Given all the facts that surround the case. THE J. REGISTRAR: Well, the only relevant fact is that some weeks beforehand there has been some meeting with the staff... MR SALMON: And other incidents, yes. THE J. REGISTRAR: ...and that statement has been made. MR SALMON: Yes. THE J. REGISTRAR: I am not interested in the other incidents anyway. Do you want me to have short adjournment to see if we can come to some resolution; do you think it is worthwhile otherwise we will just go on. MR SALMON: I will put it to the company, Registrar, in relation to it and I will also get clarification of what was put in mediation. THE J. REGISTRAR: Is there a representative here in court, do we have a representative here? MR SALMON: For the company? THE J. REGISTRAR: He is a witness, is he, the company person? MR SALMON: Yes. Perhaps we can adjourn for five or so minutes. THE J. REGISTRAR: If it worthwhile otherwise if you do not think so I will continue to hear the case and we can go on but really I think this case should have settled at mediation with the conciliation process. It is pretty sad that these type of cases have got to go to a full hearing. I will adjourn, to, say, ten past and see what we can do. THE J. REGISTRAR: Yes, Mr Salmon? MR SALMON: Yes, thank you, Mr Registrar. Mr Registrar, upon your comments, that the parties have had further discussions and arising from those discussions the parties have agreed to have some further discussions and I put an application for an adjournment and I believe my friend has no problems in relation to that. Obviously, if it is a quick adjournment... THE J. REGISTRAR: I was just thinking maybe I could act as a mediator, if you would like me to do that? MR SALMON: The problem we have got, Registrar, and I have said this to my friend, that in any terms of any settlement we would have to get instructions and it is going to be difficult to get instructions today in relation to any settlement that might take place. What we would prefer to do is to have some further discussions to set down a date for hearing at a convenient time to yourself. THE J. REGISTRAR: I do not like to delay these things. This case is set down for hearing today and we like to dispose of cases on the day they are set down. Is Mr Taylor agreeable to this. MR TAYLOR: I appreciate my friend's problem. As I understand it it has to be a board decision. THE J. REGISTRAR: Quite often that does happen, unfortunately and it creates certain problems. MR TAYLOR: Yes and I appreciate his problem I would very much like to settle it today, but I think in practical terms it just cannot happen. THE J. REGISTRAR: How about I deal with it this way. How about I give you leave to approach me, Mr Taylor. If the negotiations are not successful I will then bring it back before myself at the earliest possible date. I am going to Perth for a week beginning on the 6th I think, but that will probably fold anyway in the first couple of days and I should be back. So, hopefully I could deal with it before the Christmas break. One way or the other I will try and have it done before Christmas. MR TAYLOR: That sounds like a good way of dealing with it, sir. THE J. REGISTRAR: So, the order I will make at this stage. I will stand the matter over generally with liberty to approach me on one day's notice. MR TAYLOR: Thank you, sir. THE J. REGISTRAR: If it does settle, in the meantime, can you let me know or let my associate know so I can deal with it appropriately. Thank you. The matter failed to settle and was brought back before me on the 21 December for further hearing and on that date the respondent made application in Court that I disqualify myself on the basis of apprehended bias. The claim for such bias is based upon statements that I made in the transcript above, the relevant parts of which are underlined. The test in relation to bias has been set out by the High Court in Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-4, "That principle is that a judge should not sit to hear a case if in all the circumstances the parties or the public might apprehend a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it." This test has been considered in a number of cases since then and in Re JRL Ex Parte CJL (1986) 161 CLR 342 Mason J said at 352, "It seems that the acceptance by this Court of the test of reasonable apprehension of bias in such cases as Watson ( 1976) 136 CLR 248 and Livesey (1983) 151 CLR 288 has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involving one of the litigants or on account of conduct during the litigation. It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party." (Emphasis added) During my discussion with the respondents Industrial Advocate, I indicated that my comments were made on a prima facie basis, at page 7 of the transcript I said, "It just seems to me that this could be a long case and really looking at the affidavits, prima facie there is a pretty good case against the respondent, I would say. To prove there is a valid termination in these situations is quite difficult. Referring back to the Bostik case, how can you distinguish that case?" The Bostik case of course was decided prior to the introduction of the Industrial Relations Amendment Act and Section 170 DE of the Act would certainly pose a problem for the respondent where summary dismissal of a employee of 13 years service is concerned, notwithstanding any attempt to distinguish the Bostik case. In addressing me as to the claim of bias Mr Salmon said that my following statements, that; "Well going back to the Bostik case, this same meeting went on, the applicant in that case did not attend the meeting, from memory, he had a language problem as does our applicant, he has some problem.../they would be difficult to distinguish, surely,." were conclusive statements and emotive terms and that he had been denied the opportunity of putting his case. In fact Mr Salmon asked for an adjournment for five minutes in order to discuss settlement with his client, I then said, "If you think so otherwise I will continue to hear the case", and near the end, "If negotiations are not successful I will then bring it back before myself at the earliest possible date". How he could make this assertion is amazing My use of the words "prima facie" I would maintain would alert the fictional bystander that what I was saying at this stage of proceedings was not my conclusive view at all but rather that it was just dialogue between Bench and Bar, which their honours Brennan, Deane and Gaudron JJ in ,Vakauta v Kelly (1989) 167 CLR 568 at 571, said, "is so helpful in the identification of real issues and real problems in a particular case......It seems to us that a trial judge who made necessary rulings but otherwise sat completely silent throughout a non-jury trial with the result that his or her views about the issues, problems and technical difficulties involved in the case remained unknown until they emerged as final conclusions in his or her judgment would not represent a model to be emulated." When Mr Salmon returned from the adjournment that he had requested, he stated that the parties had agreed to have further discussions and he requested a further adjournment. I then suggested that if the parties were agreeable I would act as a mediator however Mr Salmon indicated he would have trouble getting instructions as to settlement to-day. I then stood the matter over by consent with leave to approach me for a further date if necessary. At to-days hearing Mr Salmon suggests that my offer to mediate would therefore constitute disqualification, "One may also ask, if the court pleases, how can the respondent, if it was pushed to further conciliate, expect to have unprejudiced discussions or negotiations after the sum total of the before mentioned comments made by the bench during the proceedings." I can make no sense of this reasoning however I would say that if I had acted as a mediator and the case had not resolved then as Mr Salmon is quite aware it is the policy of this court that the judicial officer who acts as a mediator is disqualified from sitting at the hearing. Surely if a reasonable person observing a hearing where the judicial officer dealing with the hearing suggests that the matter may be more suitable for mediation or that the judicial officer for that matter offers to act as mediator then that reasonable person can hardly have an apprehension that the judicial officer is biased. On the contrary, the fact that mediation is suggested should indicate to an observer that the judicial officer is acting in an unbiased manner. The average person to-day understands that by mediation it is the parties who determine the outcome of the proceedings, not the mediator. Of some relevance in this matter is the fact that at no stage did Mr Salmon make any formal objection to the comments he now complains of. Mention was made of this situation in Vakauta v Kelly by Brennan, Deane and Gaudron JJ at 572, "...if clear objection had been taken to the comments at the time when they were made or the judge had then been asked to refrain from further hearing the matter, the judge may have been able to correct the wrong impression of bias..." No objection was made by Mr Salmon to alert me to his concern that what I had said could be construed as bias in this case. The comments made by me in this case can only be described as dialogue between Bench and Bar as referred to in Vakauta and I am satisfied that there could not be a reasonable apprehension that I would be impartial or prejudiced. The respondent may have some apprehension that if I continued to hear the case the outcome may be adverse, but that does not constitute grounds for me to disqualify myself. For these reasons I dismiss the respondents motion and refer the matter to the List Clerk for the allocation of a further date for hearing. _______________________________________________________ I certify this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment of Judicial Registrar Walker. Associate: Jeynelle Moffat ______________ Date: 1 February 1995 Solicitor for the Applicant: SARGON JOHN Watson Stafford Wilmot Klimt Councel: Mr M. Taylor Representative for the Respondent: DOME ENGINEERING PTY LTD MTIA (Australia's Manufacturing, Engineering & Construction Industry Association) Mr A. Salmon