Phillip Charles Adkins and Gunns Timber and Hardware [1995] IRCA 454

C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - Serious Misconduct - Valid Reason - Procedural Fairness - Reinstatement. Industrial Relations Act 1988, S170DC, S170DE, S170EA, S170EE CASES: Schaale v Hoechst Australia Ltd [1933] 47 IR 249 and Wilcox CJ at 243

Nicolson v Heaven and Earth Gallery Pty Ltd [1994] 126 ALR 233

Hooper v Bi-Lo Pty Ltd 34 AILR 283

Johns and Gunns Limited IRCA (unreported) 18 May 1995

PHILLIP CHARLES ADKINS AND GUNNS TIMBER AND HARDWARE No. TI-1096 of 1995 Before: Ryan JR Place: Melbourne Date: 8 September 1995

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY Matter No TI-1096/95 B E T W E E N: PHILLIP CHARLES ADKINS Applicant AND: GUNNS TIMBER AND HARDWARE Respondent RYAN JR MINUTES OF ORDER 8 SEPTEMBER 1995 THE COURT ORDERS THAT: 1. the respondent reappoint Phillip Charles Adkins to the position in which he was employed immediately before his termination on 4 May 1995 so as to maintain the continuity of his employment 2. the employment of Philip Charles Adkins be deemed to have been continued for all purposes from 4 May 1995 to the date the final order is made in this matter 3. the matter be adjourned to the sittings commencing in Hobart on 2 October 1995 at a time to be determined by the District Registrar to enable the parties to calculate the amount of remuneration lost by the applicant because of the termination in accordance with the principles set out at pages 32 to 34 of the reasons for judgment in Johns v Gunns Limited IRCA (unreported) 18 May 1995. 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 TASMANIA DISTRICT REGISTRY Matter No TI-1096/95 B E T W E E N: PHILLIP CHARLES ADKINS Applicant AND: GUNNS TIMBER AND HARDWARE Respondent COURT: RYAN JR PLACE: MELBOURNE DATE: 8 SEPTEMBER 1995 REASONS FOR JUDGMENT On 15 May 1995 the applicant lodged an application for reinstatement and a claim of unlawful termination of employment. He claimed that: 1. he had worked as a truss manufacturer with the respondent for almost 10 years from 24 July 1984 to 4 May 1995 2. the respondent terminated his employment on 4 May 3. he was told that he was being terminated because of "removal of company property without due authority" 4. the separation certificate provided to him later by the respondent stated as the reason for termination "Mr Adkins removed goods from our company premises without due authority and without adhering to company policy of raising the relative documentation" Conciliation in the Australian Industrial Relations Commission in June and a mediation conference in the Court in July failed to resolve the matter. It came on for trial in Devonport on 4 September. Mr McKee of the Legal Aid Commission appeared for the applicant and Mr Stanton of Shields Heritage, solicitors, for the respondent. The applicant contends: 1. there was no valid reason for termination within the meaning of S170DE(1) 2. the termination was harsh, unjust and unreasonable pursuant to S170DE(2) 3. the termination was unlawful as the applicant was not given an opportunity to defend himself within the meaning of S170DC(a) 4. in the circumstances the applicant is entitled to: (a) a declaration that termination of his employment contravened the Industrial Relations Act 1988 (b) an order that the applicant be reinstated The applicant claims: 1. the respondent failed to provide him with any relative documentation on company policy for the removal of goods 2. he adhered to accepted practices within the company when he removed goods from the premises 3. if any part of the respondent's decision to terminate the employment was related to performance or conduct then the applicant was denied an opportunity to respond to those allegations 4. the respondent failed to have a clear and concise company policy on the removal of goods from company premises 5. the respondent failed to enforce any company policy on the remove of goods from company premises in a consistent manner 6. the respondent failed to provide the applicant with a reasonable opportunity to defend himself against the allegations made against him. The respondent asserts: 1. the termination of employment was lawful as it was for (a) serious misconduct (b) theft of company property (c) removal of company property without authority (d) breach of company policy 2. the termination was not harsh, unjust or unreasonable because it was for the reasons specified in paragraph 1 above. The company policy on invoicing goods before removal was clear, well known and consistently enforced 3. the applicant was given an opportunity to defend himself against the allegations and at that time he admitted to removing the goods without having an invoice raised 4. the applicant is not entitled to the relief he seeks. CONFLICTS AND INCONSISTENCIES IN THE EVIDENCE The applicant gave evidence. The respondent called four witnesses namely Ian Yarwood, Manager of Gunns Timber and Hardware in Devonport, Dean Breward, Manager of the respondent's Devonport hardware department, Max Boutcher, Timber Truss Manager for the respondent in Devonport and Andrew Charles Campbell, salesman in the Devonport hardware department. There were a number of conflicts and inconsistencies between the evidence of Mr Adkins and that of the four witnesses for the respondent and between the respondent's witnesses themselves. By way of example, Mr Boutcher gave evidence that Mr Breward did speak briefly at the termination meeting on 4 May. Mr Breward states he did not and Mr Yarwood supports him. Mr Boutcher also gave evidence that Mr Campbell's name was mentioned at the termination meeting as the person with whom Mr Adkins claimed he had negotiated the purchase of the wire mesh and that Mr Yarwood indicated that any discussions or negotiations with Mr Campbell were no excuse for the removal of the wire mesh without payment, notification and documentation. Mr Yarwood states there was no mention of Mr Campbell by name at the termination meeting. If there was no mention of Mr Campbell by name at this meeting this would seem to the Court to be curious, unusual and unexpected. The Court does note that when this was put by the Court to Mr Yarwood he pointed out that Mr Adkins followed the same course of not naming Mr Campbell in his letter of 8 May (Exhibit R6). Furthermore, Mr Yarwood did concede that he was aware of Mr Campbell's involvement from the discussions with Mr Campbell and Mr Breward prior to the termination meeting. Nevertheless the Court has concluded that Mr Campbell was mentioned by name at the termination meeting on 4 May. There are also internal inconsistencies in the evidence of Mr Campbell including the time at which he reported the missing mesh after the end of April 1995 stocktake and as to whether he reported this to Mr Breward before or after a discussion with Mr Adkins. There was also a claim in the statement of 5 May (Exhibit R11) that in late January 1995 there was "some discussion with Mr Yarwood and Mr Breward (about a quantity of damaged wire mesh) ..and....a price of $350 was quoted to Mr Adkins". At no stage in the evidence of Mr Yarwood or Mr Campbell or in the evidence of any other respondent witness or in the evidence of Mr Adkins was there any mention at all of the possibility of a discussion with Mr Yarwood in January 1995 in respect of the price of the wire mesh. The possibility of this discussion was never mentioned by either counsel in the hearing. In fairness, it should be said that the written statements from Messrs Yarwood, Breward and Campbell, while apparently prepared and drawn up soon after the termination meeting on 4 May and dated 4 May in the case of Breward and 5 May in the case of Yarwood and Campbell, were introduced as an exhibit late on the second day of the hearing. It is possible that either or both counsel failed to note the reference by Campbell to a discussion with Mr Yarwood in early January. On the other hand an inference could be drawn that this amounts to another potential inconsistency between the evidence of Messrs Yarwood and Campbell. The Court will not now document the conflicts and inconsistencies between the evidence of Mr Adkins and the four respondent witnesses. The inconsistencies were noted. They were numerous but the Court does not find it necessary to resolve all these inconsistencies. What is necessary is for the Court to find whether there was a valid reason for termination and whether the termination was fair and just and reasonable and, if not, what remedy should be provided for Mr Adkins. However, because of the conflicts and inconsistencies, it is necessary to deal with the evidence of each witness in turn. DEAN RONALD BREWARD Mr Breward gave evidence that in February 1995 Mr Campbell came to him and raised the question of getting rid of damaged wire mesh. He states the Mr Campbell discussed price with him and that he indicated that the mesh should be sold in the vicinity of 50% of market value or "half price". He also claims that he left the final negotiations on price to Mr Campbell. He states that on Tuesday 2 May, after the April stocktake, Mr Campbell advised him that the wire mesh had gone. He asked Mr Campbell to find out what had happened and that Mr Campbell returned and reported that Mr Adkins had taken the mesh. At this stage, Mr Breward gave contradictory evidence. Initially, in response to a question from the Court, he said that he checked that the mesh had not been charged out on Mr Adkins account and then he spoke to Adkins and then directed Campbell to raise an invoice in the name of Adkins for the mesh (i.e. Exhibit A3 and Exhibit R3). In re-examination Breward stated that he did not discuss the mesh with Adkins until the 4 May which, of course, is not consistent with speaking to Adkins before the invoice was raised on 2 May. In re-examination Mr Breward stated that he must have been confused in advising the Court during examination in chief that he saw Mr Adkins before the invoice was raised. The Court accepts that Mr Breward did not tackle Mr Adkins about the missing mesh until 4 May or at the earliest 3 May. Both Breward and Adkins agree that, after initially querying Breward about what he was talking about, Adkins admitted that he had taken the mesh some time earlier. Mr Breward states that he went straight to Mr Yarwood after the discussion with Mr Adkins and reported the matter and that it was between 11:30 am and midday. This timing is not completely consistent with Mr Breward's signed statement of 4 May which reads as follows: "On May 2 I had a discussion with Mr Campbell regarding a missing quantity of wire mesh - Mr Campbell was asked to check with Mr Adkins and on May 3 Mr Adkins admitted he had taken the product in question without any authority from management. I then went to Mr Adkins on May 4 and asked him when the mesh had been removed from our site. At this time he denied knowing anything about the removal of the product. I then pressed him further, and he then admitted removing the mesh from our site several weeks previous, and he had not sought to have the product in question invoiced out. I then reported the matter to Mr Yarwood as I knew this was a serious breach of company policy." The Court notes that the statement made on the same day as the termination meeting is more likely to contain an accurate recollection of events from Mr Breward and that his evidence in the hearing on 4 September is less likely to be accurate. In his evidence on 4 September Mr Breward indicated that he attended the termination meeting on 4 May at about 2:00 pm and that the meeting took about 20 minutes. He states he did not speak at the meeting and that he cannot recall Mr Boutcher speaking. He states that Mr Yarwood accused Mr Adkins of a serious breach of company policy. He stated in respect of Mr Adkins "he was dismissed basically". He described the attitude displayed by Adkins as light hearted until dismissed and that at that stage Mr Adkins asked whether the matter could be settled and offered to pay for the mesh. Mr Breward states that Mr Yarwood indicated that it was too late and there would be no negotiation and the dismissal stood. Mr Breward stated that there was a clear company policy that goods could not be removed without paperwork but that he was not sure whether it was documented in a procedures manual but that it was a "commonsense policy" and that some time in about January 1995 a man was rostered on the gate of the timber yard to enforce the paperwork policy. Mr Breward conceded that it was possible the first discussion in respect of the wire mesh and the price for it could have taken place at Christmas time. He claims he left it to Mr Campbell to calculate an appropriate price but that it is possible that he also spoke to Mr Adkins about price. MAX BOUTCHER Mr Boutcher was interstate but gave sworn evidence by conference telephone and was subject to cross-examination, re-examination and a question from the Court. Mr Boutcher states that Mr Adkins approached him in late February 1995 seeking a loan of a company truck to take some timber trusses, some oregon planks and a piece of piping to his home. Mr Boutcher classified this material as "no value stock" although he conceded the timber trusses had a value in excess of $50 either as useable timber or even as fire wood. He states he cannot remember whether he agreed a price for the timber trusses but that it would be his usual practice to do that. He cannot recall Mr Adkins mentioning wire mesh or anything else other than the timber trusses, the oregon planks and the piping. He stated that the applicant came to his house by appointment after the termination and asked him to recall the conversation and suggested that he had mentioned the wire mesh. Mr Boutcher repeated that he had no recollection of the wire mesh being mentioned in the conversation which he firmly states took place in February. Mr Boutcher really cannot say whether he asked Mr Adkins to pay for the trusses. When pressed, he conceded he was the responsible person if goods from his area went out without payment and that he would have expected Mr Adkins to pay the agreed price (if there was any agreed price) at the timber shed as he left with the trusses. Mr Boutcher was present at the termination meeting. He states that Mr Campbell was mentioned by name and that Mr Breward spoke at the meeting and referred to Mr Campbell. Other than that he generally confirmed Mr Breward's version of the termination meeting and the substance of his evidence was that the meeting took about 20 minutes and that Mr Yarwood was not prepared to negotiate with Mr Adkins and reaffirmed the dismissal for a breach of company policy namely the removal of company property without payment, authorisation or documentation. ANDREW CHARLES CAMPBELL In January or early February Mr Campbell states he became aware of the damaged wire mesh. His signed statement of 5 May 1995 is as follows: "Late January, I was in the process of removing our stock of wire mesh from the northern end of our yard to a location near the new truss shed. Mr Adkins showed an interest in a quantity of damaged mesh, and after some discussion with Mr Yarwood and Mr Breward, a price of $350 was quoted to Mr Adkins. Mr Adkins stated that he would have to defer any purchase, as his finances wouldn't allow him to buy the goods until he could see his way clear to putting them on his account. During February, I asked Mr Adkins if he was still interested in purchasing the damaged mesh - he stated that he was and would get back to me. Some weeks elapsed and I repeated my earlier question to Mr Adkins as I needed to tidy the yard up. In April, we relocated our stock of mesh in readiness for stocktake, and I noticed a quantity of mesh was missing from our stock. At the time I assumed the mesh had been sold and invoiced as our company has several sales people and any one of these could have auctioned the sale. After our stocktake, I had discussions with my manager, Mr Breward, and it became apparent that the missing quantity of mesh had not been invoiced out - I then left this matter with Mr Breward." In his evidence on 4 September Mr Campbell stated that he became aware of the damaged wire mesh in January or early February and when pressed he indicated that "it might have been about Christmas time". He stated he could not recall whether he approached Adkins or Adkins approached him. This seems curious given the events that followed on 2 and 4 May and Mr Campbell's involvement in them. One would have expected Mr Campbell to be able to recall who initiated the discussion on getting rid of the wire mesh. In examination in chief Mr Campbell states that he put a price to Mr Breward and that Mr Breward thought it was too low and suggested $350 and that Mr Adkins agreed to purchase the mesh at that price. The Court has already noted that neither Mr Breward nor any other witness made any reference in the hearing to a discussion with Mr Yarwood on price. Mr Breward stated in his evidence that the price suggested could have been $400 but that it was unlikely to have been $500 because that was more than the mesh was worth. Mr Campbell claims: 1. Mr Adkins asked whether he was to pay cash or charge to his account and that he replied that "putting it on account would be fine" 2. Mr Adkins stated he could not afford to put on his account at that time and that he (Campbell) did not put the mesh on the applicant's account at that time because the applicant "asked me not to". The Court notes that this is consistent with the first paragraph of Mr Campbell's statement of 5 May (Exhibit R11) 3. he (Campbell) moved the mesh to the "east end of the yard" and that later (in evidence he was not specific as to when) he asked Adkins whether he was still interested in the mesh as that part of the yard was to be concreted. The impression the Court gained was that at that stage Mr Campbell wanted to get rid of the mesh. This is consistent with the second paragraph of Mr Campbell's statement of 5 May 1995 which reads: "During February, I asked Mr Adkins if he was still interested in purchasing the damaged mesh - he stated that he was and would get back to me. Some weeks elapsed and I repeated my earlier question to Mr Adkins as I needed to tidy the yard up." In his evidence at the hearing on 4 September, four months later, Mr Campbell was far less specific and he seems to have a much poorer recollection of what occurred. He stated that after the initial incident with the mesh which he puts at about Christmas time or in January or February, the question of the mesh "may have come up in conversation" but that he had no particular recall of such conversations. He also stated that he noticed the mesh had gone on the day of the April stocktake (Friday 28 April) and he stated in evidence "I assumed someone else had bought it". Some aspects of this evidence are consistent with his statement of 5 May. Some are very much inconsistent with that statement. His statement was made when the events should have been somewhat fresher in his mind. It is clear from the statement that, contrary to his claim in his evidence that he did not notice the absence of the mesh until 28 April, he must have noticed the mesh was still in the yard during February when he asked Mr Adkins if he was still interested in purchasing it and presumably also after "some weeks elapsed and I repeated my earlier question to Mr Adkins as I needed to tidy the yard up". The Court notes that it is possible to reconcile this timing with the removal of the mesh in late February but not with the applicant's claim late in the hearing that he removed the mesh on 7 January. In his evidence at the hearing Mr Campbell claims: 1. on Monday 2 May he asked Mr Breward whether the mesh had been charged out and that Breward asked him to "check it out" and that he went through the daily accounts for April and possibly March and found no reference to the mesh 2. on Monday 2 May he said to Adkins "did you get the mesh?" and Adkins replied, "yes" 3. he believes he said to Mr Breward that Mr Adkins had the mesh and that Breward said "do the right thing. Charge it out" 4. he then raised the invoice of 2 May 1995 (Exhibit A3 and Exhibit R3). Mr Campbell gave evidence that while he could not recall advising Mr Adkins between February and April that he had not charged the mesh to him at that stage he does believe that Mr Adkins did make mention of "big bills" and that he may have said to Mr Adkins "no worries mate". He also admits that Adkins may have said words to the effect "I don't mind if you do not charge it" but that "people say that all the time and you did not take notice of it". Quite apart from the inconsistencies in his sworn evidence and his written statement Mr Campbell's evidence, combined with the statement, suggests the possibility of a rather loose and casual approach to raising documentation for staff purchases (at least by Campbell). There was also the unclear and casual approach of Mr Boutcher to whether Mr Adkins was charged and paid for the timber trusses with a justification of possible non-payment based on some different policy for "non-value" stock. Of course, there is no suggestion the mesh was "non-value stock" but the Court notes that the possibility of the above discussion or discussions between Adkins and Campbell suggest a loose and casual approach to documentation of staff purchases and certainly is at least suggestive of the possibility that, contrary to his direct evidence, Mr Campbell may well have known that the applicant had taken the mesh. Certainly, it would appear from Mr Campbell's statement, if this contains a moderately accurate recollection of his negotiations with Mr Adkins, that he discussed the mesh first with Mr Adkins either around Christmas or in January or in early February and that he discussed the matter with him again later during February and "some weeks later" again as he was anxious to "tidy the yard up". IAN YARWOOD Mr Yarwood's statement of 5 May 1995 reads as follows: "INTERVIEW HELD MAY 4TH 1995 - 2.30pm Purpose of interview - to determine if a quantity of wire mesh had been taken from Gunn's premises by Mr Adkins, with no documentation raised which contravenes company policy. Those present at interview: