DECISION NO: 180/96 C A T C H W O R D S INDUSTRIAL LAW -TERMINATION OF EMPLOYMENT - complaint of UNLAWFUL TERMINATION - SERIOUS MISCONDUCT - VALID REASON - HARSH, UNJUST OR UNREASONABLE TERMINATION - REMEDY - whether REINSTATEMENT impracticable. Industrial Relations Act 1988 ss.170DE, 170EE. CASES: Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285. Selvachandran v Peteron Plastics Pty Ltd (Northrop J, 7 July 1995, unreported). Drury v BHP Refractories Pty Ltd (Wilcox CJ, 16 June 1995, unreported). SHANE PETER TILL and AUSTRALIAN MARITIME OFFICER'S UNION -v- SWAN HILL PIONEER SETTLEMENT No. VI 5333 of 1995 Before: Judicial Registrar Murphy Place: Melbourne (heard in Mildura) Date: 14 May 1996 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 5333 of 1995 B E T W E E N : SHANE PETER TILL and AUSTRALIAN MARITIME OFFICER'S UNION Applicants AND SWAN HILL PIONEER SETTLEMENT Respondent MINUTES OF ORDERS Judicial Registrar Murphy 14 May 1996 THE COURT ORDERS: 1. That the respondent re-appoint the applicant to the position in which he was employed immediately before the termination of his employment. 2. That the respondent pay the applicant the remuneration lost because of the termination, after taking into account monies already paid and any amounts earned since the termination. 3. That the period since the termination of employment until re-appointment be treated by the respondent as continuous service for all purposes. 4. Liberty to apply. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 5333 of 1995 B E T W E E N : SHANE PETER TILL and AUSTRALIAN MARITIME OFFICERS' UNION Applicants AND SWAN HILL PIONEER SETTLEMENT Respondent Before: Judicial Registrar Murphy Place: Melbourne (heard in Mildura) Date: 14 May 1996 REASONS FOR JUDGMENT The first applicant follows the relatively rare occupation in Australia of riverboat captain. His boat is the PS "Pyap". It is operated by the respondent, a tourist complex in north-western Victoria. In this proceeding he seeks reinstatement to his position following the termination of his employment on 5 October 1995. The issues in the proceeding were whether, following an incident on that day, the respondent had acted disproportionately in dismissing him, and in the event of a breach of the Act being proved, whether reinstatement was impracticable. Background The respondent comes within the umbrella of the Swan Hill Rural City Council ("the City") and has 20 full-time employees and the same number of part-time employees. The applicant's duties involve him conducting two daily river cruises, and attending to maintenance and other duties on the boat and other maritime exhibits. At the time of these events the respondent did not have a chief executive officer. The chief executive officer of the City, Mr Kirby, had in about July 1995 assumed the duties of acting CEO of the respondent. He was assisted in discharging the financial aspects of the duties by the financial controller of the City, Mr David Lenton. The respondent has a workshop that is the work base of Mr Newton Williams, a museum technician. His work involves him in general maintenance duties associated with the numerous exhibits at the respondent's complex. He and his wife, Gillian Williams, also conduct a business, "Riedle's Music Shop" - a 1923 music shop. Gillian Williams is not employed by the respondent, but as part of the respondent's complex operates the shop and demonstrates period musical instruments, as well as selling various musical items. The operations manager of the respondent is Mr Percival Robinson. In the period prior to the events of 5 October he had been in charge of a maintenance crew that was responsible for some major repairs to the rear deck of the PS "Pyap". Those repairs involved the sailing of the boat downstream to Mildura and working on it there. Within the complex the main user of the workshops was Mr Williams. He had however taught the applicant how to use a metal turning lathe in the workshop and the applicant used it and other equipment from time to time. Around lunchtime on 5 October Mr Williams went to the workshop and observed the applicant using the lathe to turn some brass. At the time the applicant's 10 year old son appeared to be working the lathe with his father standing over him. Mr Williams estimated that the eyes of the boy were approximately 300mm from the lathe's moving parts. Neither the applicant nor his son were wearing safety glasses that were provided for use. Mr Williams was concerned at what he saw. First the applicant was in breach of a policy that children were not to be present in work areas during working hours. Secondly, he was concerned for the safety of both the applicant and his son as the lathe has moving parts and its use with brass creates a safety hazard. Mr Williams made no comment to the applicant but proceeded to the lunch room where he advised Mr Robinson. Mr Williams said that the reason why he took the matter up with Mr Robinson rather than with the applicant directly was that he would have been told by the applicant that it was none of his business. He said he "found it easier not to talk to the applicant". After Mr Williams spoke to him, Mr Robinson proceeded to the workshop. There he saw the applicant's son at the lathe. The applicant emerged from the storeroom and Mr Robinson told him that his son should be wearing safety glasses. The applicant then proceeded to abuse Mr Robinson and told him to "f.... off..... you can sack me if you like, get out of here". The applicant claimed in his evidence that there was a more extensive exchange between himself and Mr Robinson with swearing on both sides. Mr Robinson denied this. After the exchange Mr Robinson returned to the lunch room. As Mr Kirby was to be at the complex later that day for a meeting, he decided to prepare a report for him outlining what had happened. About 10 minutes after this incident with Mr Robinson, the applicant went to look for him within the complex. He did not find him but passed Mrs Gillian Williams near some stairs as she was on her way to the office. He then made a comment to her to the effect "does your husband have a penis? He is a bit of a woman". Mrs Williams replied affirmatively to the question but was most upset by it. She was deeply offended by the comment as she has strong Christian beliefs. She completed what she was doing in the office and then went to find Mr Robinson in the lunch room. She asked to see him in private. Mr Robinson said that she appeared upset and he took her to another room where she explained what had happened. Mr Robinson suggested that she make a written report on the matter to Mr Kirby. After the exchange with Mrs Williams the applicant returned to the boat and took out the afternoon cruise. Later that afternoon Mr Kirby attended a working group meeting at the complex. Mr Robinson had earlier spoken to him and advised what had happened. Mr Kirby has also received the two written reports from Mr Robinson and Mrs Williams. Mr Kirby contacted the applicant after he returned from his cruise and arranged a meeting. Also present at the time was Mr Lenton. Both Mr Kirby and Mr Lenton later reduced their recollections of the meeting to writing. The applicant's response Mr Kirby put each of the allegations to the applicant. The applicant's response to the presence of his son was that it was lunchtime. His response to the allegation about the safety glasses was that no-one else wears safety glasses. His response to his abuse of Mr Robinson was that the matter was a "set-up". It related to a past incident and he claimed that the respondent was going to sack him after the return of the boat from Mildura. Mr Kirby responded that he was only concerned with the events of the day. The applicant admitted the incident with Mrs Williams, regretted it, and offered to apologise. Mr Kirby then advised the applicant that after taking account of his explanations, the matter still constituted serious misconduct and he was to be summarily dismissed. The respondent agreed, however, to pay him two weeks wages. The respondent's reason for the dismissal In his evidence Mr Kirby said that while the first three issues he raised with the applicant were serious, they were not such as to justify his dismissal. Mr Kirby said that the matter of most concern to him was the incident with Mrs Williams. He said that the respondent had a sexual harassment policy that had been circulated to staff. The applicant acknowledged that he had received that policy. Mr Kirby regarded the applicant's actions as an unprovoked and unwarranted attack. He said he was not prepared to take the chance that this would recur. He noted that the respondent expects members of its staff to interact with members of the public within the complex. Although he did not contact Mrs Williams he said he was aware that she was upset from her report and also from his knowledge of her church-going background and personality. He was also familiar enough with her to know that he could rely on what she had written. He did not seek her advice as to what attitude he should take to the matter. He had also been advised by Mr Williams and Mr Robinson that Mrs Williams would not accept an apology. Mr Kirby said he formed the view based on his years of experience in management in local government that the incident, with its impact on Mrs Williams, constituted serious misconduct justifying instant dismissal. Did the respondent have a valid reason to dismiss? The respondent carries the onus of proof that it had a valid reason, in the sense of a "sound, defensible or well-founded" reason, connected with the employee's capacity or conduct or based on its operational requirements, to terminate the applicant's employment (see ss170EDA(1)(a) and 170DE(1) of the Act and Selvachandran v Peteron Plastics Pty Ltd (1 July 1995, Northrop J, unreported). In Selvachandran (above) Northrop J said: "Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed upon them. The provision must "be applied in a practical, commonsense way to ensure that" the employer and the employee are each treated fairly......." Counsel for the applicant argued that the response of the employer here was disproportionate and that the employer should have looked for an outcome other than termination. In evidence there was reference to an incident where Mr Robinson had made an inappropriate comment to a female employee at a social function. This had been dealt with by way of an apology after the intervention of Mr Kirby. Mr Kirby responded that the present circumstances were more serious as the incident happened in the workplace and Mrs Williams was most upset. Also in evidence was a Staff Manual (Exhibit A4), of which Mr Kirby was unaware. It refers to a number of discipline matters and in particular : "FIGHTING, INSUBORDINATION, ABUSE; All of these reasons may or may not be grounds for summary dismissal, Pioneer Settlement will proceed to obtain all the facts. It is recognised that these issues almost invariably involve a large emotional content and unless it can be shown that the act was malicious or calculated, Pioneer Settlement will give a warning and record it rather than summarily dismiss. Each case is a question of fact." The applicant gave evidence that he was upset by the actions of Mr Williams in raising with Mr Robinson what was a trivial matter. He had been on good terms with Mrs Williams and was upset when he made the comment. It is easy to be critical of Mr Kirby's response to the incident, after the event. It must be noted, however, that he was dealing with an employee who had never been formally counselled for any conduct or performance related matters. The applicant, on the evidence, was praised for the way he discharged his duties. He had two and a half years service with the respondent and had been employed by it some ten years before. He could thus be characterised as a valued and satisfactory employee with a good service record. This was conceded by Mr Kirby in cross-examination. This background of good service is important given Mr Kirby's evidence that the reason for the need to dismiss the applicant was to protect those involved in the complex. It is clear from the evidence that the applicant had had prior differences with Mr Robinson. Mr Robinson admitted that he had raised matters about the applicant's attitude to him with the previous CEO and nothing had been done. In evidence, however, was a draft job specification where the reporting relationship of the applicant had been altered so that he did not report to Mr Robinson. Given this background the troubling aspect of Mr Kirby's action was his failure to consider whether there were any underlying reasons why the applicant should have done what he did on that day. The nature of the comment made, of itself, suggested an animosity between the applicant and Mr Williams: why else would Mrs Williams be brought in? The fact that Mr Williams chose to raise his safety concerns not with the applicant directly but with the operations manager Mr Robinson, should have alerted Mr Kirby to underlying tension within the workplace. The abusive response by the applicant to Mr Robinson's calm suggestion in relation to the safety glasses should have alerted Mr Kirby to discord in the workplace. The applicant, in his response to the workshop incident, also referred to past differences between himself and Messrs Williams and Robinson associated with some work done on the boat in Mildura. Mr Robinson's report to Mr Kirby says: "I feel that I have put up with this sort of rot to (sic) long and I do not need this sort of thing in the workplace and to be spoken to like that". There was thus ample material for Mr Kirby, as an experienced manager, to conclude that it was artificial to look at the exchange with Mrs Williams in isolation. It was the final event in an incident that was only a manifestation of underlying unresolved tensions within the respondent. Finally, common human experience suggests that in workplaces, as in all social intercourse, things are said and comments made that are immediately regretted. A frequent approach is the proffering of an apology as an attempt to heal the wound. Here the applicant, when confronted with the comment, offered to apologise to Mrs Williams. Mr Kirby did not accept the offer and said that the matter "had gone further than that". While I accept that his response in proceeding with his decision to terminate the applicant was well intentioned and motivated by a perceived need to ensure that customers of the complex were not exposed to this type of activity again, it was disproportionate and in that sense not defensible. While giving due weight to Mr Kirby's managerial experience, I am of the view that dismissing the applicant on that day was premature and precipitate. Mr Kirby could have let the waters calm, he could have attempted to play an honest broker between the applicant and Mrs Williams. He could have sought further comment from Mr Robinson as to tensions between him and the applicant to ascertain whether the applicant's actions directed against Mrs Williams could properly be characterised as "of a nature which (go) to show (in effect) that the servant is repudiating the contract, or one of its essential terms." (Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285, 289). While the matter is one of fine balance I am not satisfied that it is proper to characterise the applicant's actions here as serious misconduct as that term has been considered in a number of cases. The applicant's actions were not squarely repudiatory of his contractual duties but rather were of a personal character not inconsistent with the continuation of the employment relationship. There are some similarities between what happened here and the facts in Drury v BHP Refractories Pty Ltd (Wilcox CJ, 16 June 1995, unreported). There an employee had been engaged in acts of insubordination and abuse of his supervisor. They had been condoned until he was given a written warning. After that he was dismissed even though he had not done anything contrary to the warning. Wilcox CJ said : "Having said all this, the fact remains that Mr Drury's behaviour was unacceptable. I agree with (counsel for the applicant) that it did not constitute "serious misconduct", warranting instant dismissal. But it was behaviour that went beyond even the "give and take" atmosphere of a modern Australian workplace. It was disruptive behaviour that called into question the authority of the person who was in charge of the project. If continued after a clear warning, it was conduct that constituted a valid reason, connected with the operational requirements of the project, for Mr Drury's termination: see s170DE(1) of the Act. And, if the conduct continued after the written warning of the morning of 29 April, the termination would not have been harsh, unjust or unreasonable; see s170DE(2)." Applying these comments, the fact was that the applicant's differences and insubordination with Mr Robinson had been allowed to persist by the respondent. As a riverboat captain he was probably not used to accepting orders from others. The respondent had never placed him on notice in relation to those matters. The whole incident on 5 October was a further manifestation of underlying tension, albeit with the involvement of an innocent third party, Mrs Williams. The applicant should not have involved her, but I am not satisfied that the respondent's operational requirements demanded that his services be terminated because he did. A harsh, unjust or unreasonable dismissal? If I am wrong in my conclusion that the respondent has failed to discharge its onus under s170DE(1) of the Act, then I am of the opinion that in any event the termination infringed s170DE(2) of the Act as it was "harsh, unjust or unreasonable". Although the applicant carries the onus of proof on this ground, I am satisfied that having regard to the considerations discussed above the respondent acted unreasonably in dismissing the applicant on that day when it could easily have explored a lesser alternative. It is significant that only the next week Mrs Williams accepted an apology from the applicant. Further, given the applicant's prior good service and the respondent's previous failure to formally put him on notice in relation to the other matters raised on that day, the response of the respondent is properly characterised as disproportionate and thus unreasonable. Remedy The applicant seeks reinstatement to his position. That remedy is resisted by the respondent on the grounds that it is impracticable. The evidence upon which the respondent relies consisted of evidence of Mr Robinson that if there was an order to re-employ the applicant, he would resign. Further, Mr Williams said that he too would resign and that he and Mrs Williams would leave their business within the complex. Mrs Williams did not refer to that intention. Mr Kirby was more sanguine about the prospects of re-establishing an employment relationship. He said that if the applicant did return to the complex he is not sure that it would be "conducive to good working relationships". He said he would have "some concerns if he were to resume work." The context of that evidence was the fact that the complex operates with a relatively small number of staff and those staff are required to work very closely with tourists. The applicant's position remains open, pending the finalisation of these proceedings. Counsel for the applicant submitted that the nature of the applicant's duties as riverboat captain made him somewhat autonomous and that any difficulties within the workplace could be minimised by proper managerial intervention. He characterised the evidence of Messrs Robinson and Williams as self-serving. He called evidence from Ms Noble, the main assistant who worked with the applicant. She indicated that she was more than prepared to continue to work with him. Given the acceptance of the apology, the relatively autonomous nature of the applicant's position, and Mr Kirby's equivocal evidence on the impracticability of reinstatement, I am not satisfied that the respondent has discharged the evidentiary onus it carries that reinstatement here is impracticable. I am satisfied that with proper managerial intervention and supervision any disruption to work place relationships associated with the applicant's return to his employment will be minimal. It is significant that Mrs Williams has accepted the applicant's apology. It is also significant that Mr Williams appeared unaware until these proceedings that Mrs Williams accepted the applicant's apology for the incident until. The evidence of both Messrs Williams and Robinson on this point lacked conviction. There is no reason why, given proper counselling, all parties cannot put this incident and these proceedings behind them and continue the challenge of making the respondent a viable tourist facility. Counsel for the respondent argued that the amendments to s170EE(1) requiring the Court to consider "all the circumstances of the case" when considering a remedy should lead to the Court to decline any remedy here. I am not satisfied that there are any circumstances here that, given my finding of a breach of s170DE(1) of the Act, should lead me not to make an order re-appointing the applicant to his previous position. The applicant has sought and obtained some alternative employment and has earned a total of $5,255 in the employment. He may have earned additional amounts since the date of the trial. The parties are in the best position to precisely calculate his lost remuneration since 5 October 1995. There will be an order that the respondent pay earnings lost since the termination, taking monies already paid and any amounts earned into account. There will also be an order regarding continuity of service and I will grant liberty to apply. MINUTES OF ORDERS THE COURT ORDERS: 1. That the respondent re-appoint the applicant to the position in which he was employed immediately before the termination of his employment. 2. That the respondent pay the applicant the remuneration lost because of the termination, after taking into account monies already paid and any amounts earned since the termination. 3. That the period since the termination of employment until re-appointment be treated by the respondent as continuous service for all purposes. 4. Liberty to apply. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy. Associate: Dated: 14 May 1996. Solicitors for the Applicants: Holding Redlich Counsel for the Applicant: Mr Mark Champion Solicitors for the Respondent: Gary Katz & Associates Counsel for the Respondent: Mr Gary Katz Date of hearing: 16 April 1996 (heard in Mildura) Date of judgment: 14 May 1996.