McKinnon v Greyhound Pioneer Pty Limited [1996] IRCA 249

DECISION NO: 249/96 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT -UNLAWFUL TERMINATION - CONDUCT - VALID REASON - PROCEDURAL FAIRNESS - DISCIPLINE - REINSTATEMENT Industrial Relations Act 1988, Ss 170 DC EA EE (1) Nicholson v. Heaven and Earth Gallery Pty Limited 126 ALR 233 RONALD ARTHUR McKINNON V. GREYHOUND PIONEER PTY LIMITED (A.C.N 007 723 702) No. VI 6158 of 1995 CORAM: LINKENBAGH JR PLACE: CANBERRA DATE: 31 MAY 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY VI 6158 of 1995 DISTRICT REGISTRY RONALD ARTHUR McKINNON Applicant GREYHOUND PIONEER PTY LIMITED(A.C.N.007 723 702) Respondent Coram: Judicial Registrar Linkenbagh Place: Canberra Date: 31 May 1996 MINUTE OF ORDERS 1. That pursuant to the provisions of section 170EE(1)(a)(i) of the Act, the respondent reappoint the applicant to the position in which the applicant was employed as at 29 November 1995 2. That pursuant to the provisions of section 170EE(1)(b)(i) and (ii) of the Act the respondent do all things necessary to maintain the continuity of the applicant's employment and pay to the applicant the remuneration lost by him because of the termination of his employment on 30 Novbember 1995. Leave granted to either party to re-list the proceedings in the event that there is any further order necessary in relation to implementation of the order pursuant to 170EE(1)(b)(ii). Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY VI 6158 of 1995 DISTRICT REGISTRY RONALD ARTHUR McKINNON Applicant GREYHOUND PIONEER PTY LIMITED (A.C.N 007 723 702) Respondent Coram: Judicial Registrar Linkenbagh Place: Canberra Date: 31 May 1996 REASONS FOR JUDGMENT Delivered ex tempore and revised from the Transcript This is an application pursuant to the provisions of Section 170EA of the Industrial Relations Act 1988 in which the applicant seeks re-instatement to his position as a Coach Captain with the respondent. The applicant was employed in that capacity between 24 March 1995 and 30 November 1995. The circumstances which brought about the termination of his employment are of short compass. The applicant was aware that he was required by the terms of his contract of employment and by the provisions of a manual, which are respectively exhibits C and B before me, to comply with procedures of the company.The documents inform the employee that dismissal may be a consequence of failure to comply with those procedures, and the manual indicates that dismissal will be a consequence of failure to comply with procedures relating to the collection of fares and the writing of tickets. Those procedures of the respondent and the agreement for the contract of employment are, of course, subject to the provisions of the Industrial Relations Act. One of the most important aspects of the procedures applying to the applicant were his obligations in relation to maintaining accurate and complete details of the passengers, their fares and journeys on the manifest, a copy of which, for the relevant day, 27/28 November 1995 is exhibit anther is no doubt, on the evidence of the respondent, that the manifest is a crucial part of its record keeping and is the basis on which it is able to comply with its obligations to various public authorities in relation to being permitted to run a passenger carrying transport service. On 27 November 1995 the applicant was driving his coach on a journey from Euston to Canberra. In the early hours of the morning at South Hay he made a scheduled stop and was approached by a man who informed him that his car had broken down and that he required to be taken to Wagga Wagga. The applicant agreed to transport him on the coach and told him that the fare would be $48, which was the correct fare for the journey. The man paid the fare and boarded the coach. The applicant did not write out a ticket and did not enter any details of the passenger on the manifest. The applicant gave evidence that he intended to write out the ticket and complete the paperwork during a stopover at Griffith, but that he forgot to do so because of other duties and his taking his meal break during the stop in Griffith. The passenger alighted at Wagga Wagga and the coach continued its journey to Canberra. On arrival at Canberra, at about 8.30 am, the applicant completed his duties and went home. The applicant's evidence is that at home on 28 November he wrote out a ticket, which is ticket number 18711 in the book, which is exhibit D. The applicant's evidence is that he put the $50 note in a in a part of his wallet separate to his own money, and that he included with it a small piece of paper to the effect that the money belonged to the company. On the evening of 28 November, the applicant signed on and did a return trip to Albury, returning in the early hours of 29 November. He was thereafter not scheduled to sign on for work until the evening of 30 November. At about 6.20 pm on the evening of the 29th he received a telephone call from his supervisor, Mr Staley, requesting him to attend a meeting at 10.30 the next morning at the Greyhound Office at the Jolimont Transit Centre in Canberra. On the following morning, before he left home for the meeting, the applicant received another telephone call from Mr Staley requesting that he bring his ticket book with him. The applicant went to the meeting, waited at the Centre for about 40 minutes and was then interviewed by Mr Staley and Mr Carver, who was the head of security operations for the respondent. There have been three versions of that conversation put to me in evidence. The applicant's version is more wordy than that of Mr Staley or Mr Carver. One common aspect of the three versions is that the applicant was asked whether he had picked up a passenger at South Hay on 28 November. The applicant gave the version of his transporting of the passenger, which I have outlined above. Another common element of the versions of the interview are that Mr Carver enquired as to the whereabouts of the $48 fare. The applicant's response was that he informed Mr Carver that he had the money with him and that he had written out the ticket the previous day. The applicant made the money and the ticket book available to Mr Carver. It is also common ground that at the conclusion of the interview, Mr Carver terminated the applicant's employment, with words to the effect that he had breached company policy. There are two significant areas of difference in the versions of the interview. The first is whether or not Mr Carver indicated towards the end of the conversation that he might call the police. That matter is mentioned in the affidavits of Mr McKinnon and Mr Staley, and they both resisted suggestions in cross-examination that those words had not been said. Those words do not appear in the affidavit of Mr Carver, and Mr Carver emphatically denied that he had mentioned the police in his oral evidence before me. The other significant area of difference is that Mr Carver reports a question and a response as follows: Mr Carver: "Do you recall picking up a passenger at Hay South about 12.15 am, yesterday morning?" Mr McKinnon: "Yes, I have seen him here this morning." Mr McKinnon denied seeing the passenger, whose name was Mr Tucker, at the terminal that morning and Mr Staley confirmed that in his view, Mr McKinnon did not have the opportunity to have observed Mr Tucker at the terminal that morning, although Mr Staley and Mr Carver had engaged in a conversation with Mr Tucker immediately prior to the interview between Mr Staley, Mr Carver and Mr McKinnon. The significance of Mr Tucker is that he was an employee of the company. He was seconded from his duties in Queensland to come to New South Wales and spend a week, travelling on the coaches without revealing the nature of his employment to the drivers of the coaches on which he travelled, and his purpose was to observe whether or not company procedures and practices were being followed. Mr Tucker had reported to Mr Carver his observations made during the journey from South Hay to Wagga Wagga, and it was on the basis of Mr Tucker's report that Mr Carver became involved in the action that was taken in respect of the applicant. I have some reservations as to the desirability of practices by an employer against an employee, such as were undertaken in this instance. Certainly, employees must be trusted to do their job properly. However, doing the job properly has to be seen in the context of the actual workplace and the actual attitudes and practices which an employer permits on a day to day basis. Mr Carver had been employed by the company in October of 1995 because of the company's concerns regarding losses of revenue. Mr Carver gave evidence that the company's accountants, Deloittes, had a view that the company was losing $3 million per annum because of theft of cash fares by coach drivers. Mr Carver revised that opinion, and I am not clear as to the basis of his expertise, but he gave evidence that his view was that between $500,000 and $600,000 per annum was being lost by the respondent in this manner. Those are substantial losses. Mr Carver gave further evidence that following the issue of a memorandum by him, dated 14 November 1995, which is an exhibit to Mr Carver's affidavit, the company's cash revenue increased by about $10,000 per week. That is the background against which the facts in this matter must be seen. If $500,000 per annum was being lost, and if it were being lost at an average rate of $50 per fare, then over the whole of Australia in a year there would be 10,000 separate instances of theft from the respondent by one or another of its employees. Mr Carver gave evidence that there were 400 employees, and averaging those losses out, the effect is that each of the 400 employees was stealing $100 a week or two $50 fares. Mr Carver's evidence of the increase in revenue following 14 November equates to $25 per week for each of the 400 drivers across Australia. One can make figures mean almost anything, but these figures at least mean in this case that the practice of stealing cash moneys from the employer by its employed coach drivers was a very widespread practice. If an employer asserts that an employee has been guilty of theft and if there are sufficient facts that support that view, then it must follow that the employee forfeits his right to continue in employment. If, however, an employer asserts that an employee is guilty of dishonesty and the facts do not reasonably support that assertion, and if the employee has been dismissed from the employment because of that assertion, then it is incumbent on the Court to remedy the situation. The evidence in this matter does not satisfy me, on the balance of probabilities, that the applicant stole, or intended to steal, the $48 fare. The respondent's case wavered between relying on the theft and relying simply on the breaches of company policy to do with not issuing the ticket and not completing the manifest. The termination interview certainly focussed on the fate of the $48 cash fare. The respondent falls back from that to some extent during this hearing and asserts that the breaches of the practices and procedures were of such fundamental importance to the company, that those breaches warranted dismissal regardless of whether or not the $48 was the subject of any intention to steal. I have difficulty with the respondent's case when it is seen against the background of the actual work practices. Turning to the credit of witnesses, Mr Tucker was a witness who was doing his job and in respect of whom there is no challenge to his credit. He acted on Mr Carver's instructions to keep his identity a secret, and he did so. Mr Carver's credit is affected by what I have said as to his report of the interview on 30 November in relation to statements regarding calling the police and Mr McKinnon's having seen Mr Tucker at the terminal that day. I also have difficulty with Mr Carver's evidence as to the point at which the decision to dismiss was made. Mr Staley gave evidence that the decision to dismiss was made before the interview with the applicant. That evidence of Mr Staley is supported to some extent by Mr Tucker's evidence, although Mr Tucker's evidence on that question became more confusing as his evidence continued. Mr Carver gave oral evidence that he made the decision to dismiss during the interview, after the applicant had admitted that he had failed to follow the correct company procedures. He said that if the applicant had denied that he had not carried out company procedures, that would have made it "grey", to quote Mr Carver, and he might have made a different decision. I have difficulty with that logic and the effect that that difficulty has is to cause me to have a question mark over Mr Carver's credibility in relation to the point at which he made the decision to dismiss. The applicant was subjected to extensive cross-examination. He appears to be a somewhat naive and very trusting person. He did not have any suspicions of Mr Tucker when Mr Tucker boarded the coach at South Hay. His suspicions were not aroused by the request to come to the meeting with Mr Staley, even when he received a second call from Mr Staley requesting that he bring the ticket book to the meeting, and he did not take the opportunity to pay in the cash fare before the meeting. The applicant readily admitted in the interview his shortcomings in relation to the company procedures, and I accept the evidence of the applicant at its face value. He is a man of previously excellent character, which is supported by the evidence of Mr Britten, and more particularly by his work record with the respondent in the few months during which he worked for the respondent in 1995. I find on the balance of the evidence before me that the respondent did not have a valid reason for the termination of this employment. I am conscious of the words of Chief Justice Wilcox in Nicholson v Heaven and Earth Galleries126 ALR 233 that the purposes of this legislation are to afford "a fair go all round." The evidence indicates that in this work situation, against a background of extensive problems which were known to the respondent in relation to the trustworthiness of what must have been a large percentage of its employed coach drivers, the applicant was singled out for attention and dismissal. Had the respondent engaged in other measures to overcome the deficiencies in its collection of cash fares, and had the applicant against that background been found to be in breach, then my decision in this matter may well have been different. But that did not happen, and in the circumstances I have no hesitation in finding that on the facts before me there was no valid reason for the termination. Even if it could be said that the failure to issue the ticket and complete the manifest was a valid reason, I would find for the same reasons that this termination was unreasonable. The applicant's conduct must be seen in the light of work practices which existed and which, on the respondent's own evidence, were well known to it. I also find the respondent in breach of Section 170 DC of the Act. As I have said, I have reservations about the use of Mr Tucker in his role as an undercover agent. The evidence supports a finding that the decision to dismiss was made before the applicant was spoken to on 30 November. The applicant was not afforded any comprehensive opportunity to respond to allegations about his conduct and performance, and the applicant was, in my view, wrongfully perceived by Mr Carver as having the intention to steal the $48, and was dealt with by Mr Carver accordingly and in a very unfair manner. I note also in relation to Section 170 DC, that the procedural matters which Mr Tucker observed related not only to the receipt of the cash, the issue of the ticket and the writing of details on the manifest, but also to failure to count the passengers on the bus, taking a wrong turn, leaving a passenger behind at Griffith temporarily and failing to allocate Mr Tucker a definite seat on the coach. Whilst those matters were observed by Mr Tucker, none of those matters were put to the applicant in the interview on 30 November and yet they are, apparently, relied on at this hearing to justify the dismissal, at least in part. I can only determine proceedings on the evidence before me, and it is on that basis, and that basis alone, which I make the findings and the decision that I make today. As I observed to Mr Carolan during his submissions, the disciplinary process in a modern workplace should be, in my view, perceived as a management tool, not a mechanism for punishment. Certainly there were shortcomings and deficiencies in the conduct of the respondent's employees overall in relation to the collection of cash fares and the respondent was rightly concerned to do something about those practices in its own interests. The action in relation to the applicant was, in my view, ill conceived and premature, given the process which was initiated by Mr Carver with a view to achieving compliance by the workforce as a whole with the procedures in relation to the collection of cash moneys. The orders that I propose to make are these: 1. That pursuant to the provisions of section 170EE(1)(a)(i) of the Act, the respondent reappoint the applicant to the position in which the applicant was employed as at 29 November 1995 2. That pursuant to the provisions of section 170EE(1)(b)(i) and (ii) of the Act the respondent do all things necessary to maintain the continuity of the applicant's employment and pay to the applicant the remuneration lost by him because of the termination of his employment on 30 Novbember 1995. Leave granted to either party to re-list the proceedings in the event that there is any further order necessary in relation to implementation of the order pursuant to 170EE(1)(b)(ii). I certify that this and the preceding 5 pages are a true copy of my Reasons for Judgment Maria Linkenbagh Judicial Registrar Date: 11 June 1996 Representative of the Applicant: Mr Michael Baldwin Transport Workers' Union Solicitor for the Respondent: Mr Grant Carolan Corrs Chambers Westgarth