Rogan v T.E.D. Engineering Australia Ltd [1996] IRCA 604

DECISION NO:604/96 CATCHWORDS

INDUSTRIAL LAW - UNLAWFUL TERMINATION - VALID REASON - CONDUCT AND PERFORMANCE - ONUS OF PROOF -OPPORTUNITY TO RESPOND - former apprentice dismissed for unsatisfactory work performance without investigation as to training in that work - REMEDY - COMPENSATION.

Workplace Relations Act 1996 (Cth) ss170DC, 170DE, 170EE

Jones v Dunkel (1959) 101 CLR 298 Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996), Perrin v Des Taylor Pty Limited (1995) 58 IR 254

ROGAN v T.E.D. ENGINEERING AUSTRALIA LTD VI96/2063

Before: MURPHY JR Place: MELBOURNE Dates of Hearing: 4 & 5 DECEMBER 1996 Date of Judgment: 5 DECEMBER 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY

VI96/2063

BETWEEN:

DANIEL ROGAN Applicant

AND

T.E.D. ENGINEERING AUSTRALIA LTD Respondent

BEFORE: MURPHY JR PLACE: MELBOURNE DATE: 5 DECEMBER 1996 MINUTES OF ORDERS

THE COURT ORDERS AND DECLARES THAT: 1. The respondent has breached s170DE(1) of the Act; 2. The respondent pay to the applicant the sum of $4,353.69 pursuant to s170EE(3) of the Act.

Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY

VI96/2063

BETWEEN:

DANIEL ROGAN Applicant

AND

T.E.D. ENGINEERING AUSTRALIA LTD Respondent

BEFORE: MURPHY JR PLACE: MELBOURNE DATE: 5 DECEMBER 1996 REASONS FOR DECISION Delivered ex tempore - revised from the transcript The applicant alleges that his employment as a fitter and turner with the respondent was terminated in breach of sections 170DE and 170DC of the Workplace Relations Act 1996 (Cth) (formerly the Industrial Relations Act 1988 (Cth)) ("the Act"). The two main issues in the proceeding were whether the applicant's performance had been such that the respondent was justified in dismissing him, and whether, prior to doing so, it accorded him an opportunity to respond to the basis for his termination. Background findings. The respondent is a specialised precision engineering enterprise employing about 100 trades people, including at any one time about ten apprentices. The applicant commenced a four year apprenticeship as a fitter and turner in 1992 and successfully completed the apprenticeship in February 1996. His performance in the latter part of his apprenticeship, and in the period immediately after securing his trade qualifications, was the matter the subject of conflicting evidence. Apprentices at the respondent are rotated around the various sections of the plant. The Court heard from Mr Williamson, the Jigs and Fixtures Foreman, that during the applicant's third year he had been in the jig section. Mr Williamson prepared an apprentice assessment form dated 20 September 1994 (Exhibit R2) that gave the applicant only a bare pass. Mr Williamson did not have a lot to do with the applicant after that, although he said that in his dealings with him in 1995 his attitude seemed better. During 1995 Mr Crosling joined the respondent as General Manager. In June 1995 he established a system of rating the performance of the apprentices by way of reports from their foremen. When the ratings were done the applicant was the second lowest. By letter dated 28 June 1995 (Exhibit A2) the applicant was advised that because of his unsatisfactory performance he was not to receive a bonus. Mr Tabone, the Production Manager, said that about six months before the applicant's apprenticeship was due to end he had a discussion with the Managing Director, Mr Fried, and Mr Crosling about the applicant's future. It was agreed that Mr Tabone and Mr Crosling would speak to the applicant about his performance. Mr Fried then had nothing more to do with the applicant's performance until about February this year. In about July 1995 Mr Crosling had a conversation with the applicant about his rating and the fact that he was due to complete his trade training in February 1996. He advised the applicant that his current performance and rating would not justify his retention with the respondent at the end of the apprenticeship. He told the applicant that he had an opportunity to improve himself over the next six months. Mr Crosling's evidence was that the applicant's performance improved after this discussion in about July 1995. This is confirmed by the fact that as a result of the apprenticeship scheme assessment the applicant was awarded a $20.00 a week bonus in October (Exhibit A4). The improvement is also reflected in an apprentice rating form dated 13 September 1995 (Exhibit A3) when the applicant was working in the tool room. In about September 1995 the applicant was moved to a tool cutting and grinding position. Mr Crosling's evidence was that Mr Tabone agreed that as there had been some improvement in the applicant's attitude he should be given an opportunity of experience in a particular area under the supervision of a tradesman for the balance of his apprenticeship. The applicant was told that the respondent would assess his employment future based on his performance in that position. On 20 January 1996 Mr Fulton, who was his direct supervisor and superior as a tool grinder, assessed the applicant's performance at 76 per cent (Exhibit A5). In February 1996 the applicant's apprenticeship training was completed. A decision was taken to continue his employment with the respondent as a trades person. There was some difference in emphasis in the evidence on this point. Mr Fried said that Mr Tabone and Mr Crosling convinced him to give the applicant another opportunity in another area of the factory. It is clear that he must have been mistaken on this because the decision to move the applicant to another area had been taken in about September. Mr Tabone's evidence was that the applicant's performance in February was still not adequate, but that he and Mr Crosling decided to ask Mr Fried to give him another chance. The factors involved were that the applicant's uncle worked in the enterprise, and he was young and should be given another chance. Mr Crosling said that the applicant had shown some attitude improvement, was doing the job sufficiently, and it was decided "we would continue him in that role". A meeting was held with the applicant. Mr Crosling said that the respondent confirmed the applicant's employment and he was told: "He would be monitored in his growing role" as a tradesman. He said: "We said we would continue to watch his performance over the same set of criteria, indefinitely". He said the applicant was told he had to perform as a tradesman and his ongoing employability was to perform at that level. Importantly, Mr Crosling said the meeting was very positive in that the applicant had extricated himself from a position where he was not going to be retained to where he was being retained after finishing his apprenticeship. Mr Tabone confirmed that the applicant had been told he had one last chance "to work and be trained". He said he asked Mr Fulton to keep an eye on him. The applicant, in cross-examination, accepted that he got the impression at that meeting that his continued employment was on the condition that if his work had not improved he would be terminated. He confirmed that in that sense the meeting in January was a continuation of earlier meetings in June and September of 1995. The events after February. Mr Crosling gave evidence that he had no formal process in place, as the respondent had for apprentices, for the performance of tradespersons to be evaluated. He said that in the period until he left in April, he spoke in casual conversation to Mr Fulton about six times about the applicant's performance. He would initiate the discussion and Mr Fulton's comments were "usually positive". Mr Tabone said that Mr Fulton was like the applicant's leading hand. Mr Tabone did not put in place any attempt to monitor the applicant's work. He said over the next three to four months, until Mr Fulton left, he had no concerns raised with him by Mr Fulton about the applicant's work. He said that: "I didn't receive any reports about the applicant before Fulton left". It was after Mr Fulton left that Mr Tabone received a number of complaints. He asked the applicant to sharpen a radius piece. The applicant had replied that he did not know how to do it. Mr Tabone said this particular job was a daily chore for Mr Fulton and the applicant. He said: "I understood he knew how to do it. I couldn't believe he could not do it". The applicant told him he was not trained to do it. The applicant's evidence was that Mr Fulton, at one stage during his apprenticeship, had tried unsuccessfully to teach him to sharpen a radius piece. Mr Fulton had kept promising subsequently to train him properly but had never got around to it as the pair were very busy. Another reason the applicant gave in his evidence why Mr Fulton would not train him was that Mr Fulton saw his particular position as highly skilled and he intended to keep the skills that he had acquired to himself. Among the two, Mr Fulton and the applicant, work was allocated so that the applicant did the basic work and Mr Fulton did the more sophisticated work including the sharpening of radius pieces. The dismissal. Mr Tabone had heard that the applicant was unhappy in his position. The applicant admitted he had asked someone in management about a transfer. After the applicant had been unable to sharpen the radius bit Mr Tabone formed the view that the applicant could not perform his task. He spoke to Mr Fried and it was agreed to dismiss the applicant. The applicant was called up and told he was dismissed. He replied: "I was expecting it". The applicant was paid three weeks wages. The applicant's explanation for his comments was that he sensed something was afoot that day because a new employee had arrived that morning. Was the respondent justified in terminating the applicant's employment? The evidence I have just traversed was essentially common ground. It was the respondent's submission that the events in June were the end of a continuum of an unsatisfactory level of performance that commenced about a year earlier. It was submitted that the applicant knew his continued employment with the respondent was conditional on a level of performance as a tradesman that he was not capable of and, therefore, the respondent was entitled to dismiss him when he could not sharpen the radius piece. The applicant contends that he knew that his employment was dependent on his performance, but his inability to sharpen the piece was not his failure, but that of Mr Fulton who, for his own reasons, had refused to properly train him. Alternatively, Mr Fulton was too busy to train him. Mr Stubbs gave evidence that it would take a couple of days to learn that particular skill. As it emerged in the evidence, there was no-one in the factory who could, in fact, sharpen the radius piece and it had to be sent out of the factory to be done. What is clear from the evidence is that at no stage did the respondent, in any explicit way, indicate what it expected of the applicant. Mr Crosling was a credible witness. He admitted that the applicant was to be monitored. He did monitor the applicant. The applicant had been generously assessed by Mr Fulton in January. There was no evidence of any adverse criticism of the applicant by Mr Fulton subsequent to that. Mr Fulton has not been called. I draw an inference against the respondent for its failure to call him: Jones v Dunkel (1959) 101 CLR 298. Mr Tabone said he understood that the applicant had been trained to sharpen the radius piece. I am satisfied that he had never been properly trained. I am further satisfied that he was never told that it was a requirement of his continual employment that he have that particular skill, or that he have it by a particular time. This is where the failure of the respondent, before it dismissed the applicant, to actually ascertain from the applicant and/or from Mr Fulton the circumstances in which he was unable to perform that task is a critical failure. The respondent reached the conclusion that the applicant could not perform at a satisfactory level in the grinding section. It reached that conclusion as a result of the radius piece matter. Because he had been its apprentice, the respondent had knowledge of what the applicant had been trained in. It did not check with Mr Fulton. It had not put in place anything but informal monitoring of the applicant's performance as a tradesman. The feedback Mr Crosling had was positive. Mr Tabone had had no adverse reports before Mr Fulton left. In reaching the conclusion that the applicant was incompetent as a tradesman, Mr Tabone failed to properly investigate the underlying facts so that he could reach a proper and defensible conclusion that the applicant was, in fact, incompetent. Had he undertaken that investigation, I am satisfied he would have reached the conclusion that the applicant had not been properly taught the skill by Mr Fulton. The respondent, given its own responsibility for training the applicant, could not have dismissed him for that reason alone. I am unable to accept that the respondent is entitled to rely on the unsatisfactory progress of the applicant in his apprenticeship. The evidence of Mr Crosling is to the contrary in any event. The applicant probably had only a narrow skill base as a tradesman because for the eight months prior to his dismissal, he worked with Mr Fulton exclusively. The evidence was that in his capacity as number two to Mr Fulton he had performed satisfactorily. The respondent certainly never told him otherwise. The respondent has not satisfied me that it had a valid reason to dismiss the applicant. In Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996), Lee J said: "By giving effect to the Convention the Act seeks to establish a balance between the right of an employer to duly manage an enterprise in which labour is employed and the right of an employee, and of the community, not to have the asset represented by the capacity of employees who provide such labour, whether skilled or unskilled, depreciated by incompetent or capricious management of labour by an employer." In Perrin v Des Taylor Pty Limited (1995) 58 IR 254 at 256, Moore J discussed s170DC of the Act, which imposes an obligation on an employer to give the employee the opportunity to defend him or herself against the allegations made before employment is terminated. He said: "the purpose (of s170DC) is at least twofold. It is to give the employee the opportunity to demonstrate that the allegations have no foundation in fact or they should not be viewed as reflecting on the employee's capacity.... A second purpose of s170DC is that an employee with whom an allegation has been raised may be able to persuade the employer, that while the allegation is of substance, there are factors that should persuade the employer not to terminate the employment. There may be extenuating personal circumstances or they may involve undertakings about future conduct." The requirements of the Act are not onerous on employers. They require reasoned decision making and the according of a fair go to employees. Unfortunately, those requirements have not been met by the respondent here and the respondent has not discharged its onus of proof that it had a valid reason to terminate the applicant's employment. Remedy. The applicant did not seek reinstatement. It was submitted by counsel for the respondent that the applicant's employment would not have long endured. He was unhappy; Mr Fulton had left. In a sense Mr Fulton may have sheltered him, but the evidence was that the particular unit did require two people. The applicant may have continued. Had he been the subject of proper monitoring as proposed by Mr Crosling, he may have improved to the extent that he would have remained employed. He may not have. I am of the view that two months is a reasonable prognosis for the likely continuation of his employment had the unlawful termination not occurred. The applicant has lost $4,354 in the eight weeks before he obtained other employment as a fitter and turner. I am not satisfied that he is entitled to any compensation, other than the monetary loss I have just referred to, for the circumstances of his termination. The order of the Court will be a declaration that the respondent has breached s170DE(1) of the Act, and that the respondent pay to the applicant, pursuant to s170EE(3) of the Act, the sum of $4,353.69. I certify that this and the preceding eight (8) pages are a true copy of the reasons for decision of Judicial Registrar Murphy as recorded in the transcript and revised by the Judicial Registrar.