Maxwell v Hydromet Operations Darwin [1997] IRCA 287

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - complaint of UNLAWFUL TERMINATION - whether VALID REASON for termination - CONDUCT - consumption of alcohol while working - whether company policy applied fairly and consistently - whether similar circumstances - whether opportunity to defend - whether employer has duty to investigate allegations - nominal COMPENSATION

Industrial Relations Act 1988 (now Workplace Relations Act 1996) - ss 170DC 170DE, 170EA. ROBIN ANTHONY MAXWELL -v- HYDROMET OPERATIONS DARWIN DI 1005 OF 1997 JUDICIAL REGISTRAR: R.D. FARRELL JR PLACE: PERTH (HEARD IN DARWIN) DATE: 31 OCTOBER 1997

LIMITED DISTRIBUTION IN THE industrial relations COURT

OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY dI 1005 of 1997

between: robin anthony maxwell

applicant

and: hydromet operations darwin

respondent

JUDicial r.d. farrell, JR

registrar:

DATE OF ORDER: 31 October 1997

WHERE MADE: perth (heard in darwin)

THE COURT DECLARES THAT: 1. The termination of the applicant's employment by the respondent contravened section 170DC of the Workplace Relations Act 1996. AND THE COURT ORDERS: 2. Within 14 days of the date of making these orders the respondent pay to the applicant the sum of $863.14 compensation pursuant to section 170EE(2) of the Workplace Relations Act 1996, less any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

LIMITED DISTRIBUTION IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY DI 1005 of 1997 BETWEEN: ROBIN ANTHONY MAXWELL APPLICANT AND: HYDROMET OPERATIONS DARWIN RESPONDENT JUDICIAL REGISTRAR: R.D. FARRELL, JR DATE: 31 OCTOBER 1997 PLACE: PERTH (HEARD IN DARWIN) REASONS FOR DECISION This is an application under Section 170EA of the then Industrial Relations Act 1988, now known as the Workplace Relations Act 1996 ("the Act"). The application is for compensation arising from the alleged unlawful termination of the employment of the applicant, Mr Robin Maxwell ("Mr Maxwell"), by the respondent, Hydromet Operations Limited ("the Company"). Reinstatement was not sought, and it was not contended that it was practicable. The Company conducts a small industrial waste processing business in Darwin. The Darwin business is newly established, having started production in July 1996. Mr Maxwell began his employment with the Company on a casual basis in May 1996 during the waste processing plant's construction phase, and became a permanent employee in early July of that year. He then worked as a process labourer, and was part of a team of employees who were required to operate and monitor the semi-automated plant. As best I can understand it, the process with which Mr Maxwell was involved required the immersion of the raw waste material into a slurry, which would then be passed through a series of mesh filters. From time to time, labourers would assist this process by scraping or "stripping" the filters. The filtered waste product would then be sent through a drier. The end product of the process was tin oxide, which was stored in drums. The work had its potential hazards, and involved working in the proximity of hazardous waste products. There was general recognition that Mr Maxwell was good at his work. Contentions The Company contends that there was a valid reason for the termination of Mr Maxwell's employment connected with his conduct. Specifically, they say the reason for Mr Maxwell's dismissal was his admission that he had been drinking alcohol during working hours while working on the night shift which commenced on 19 November 1996. While Mr Maxwell admits that he had been drinking alcohol during that shift, he contends that it was not a valid reason to dismiss him, because he alleges that: he drank with the permission or at least the acquiescence of his shift supervisor, Mr Theo Hatzitheodosios ("Mr Hatzitheodosios"), so that his conduct was authorised by the relevant representative of the Company; and the Company did not dismiss Mr Hatzitheodosios despite Mr Hatzitheodosios having both "virtually permitted" Mr Maxwell to drink, and also drunk alcohol himself during that shift, so that the Company's failure to treat its employees consistently renders invalid what might otherwise be a valid reason for termination. The Events of the Night Shift Commencing 19 November 1996 The twelve-hour night shift in question began at 6.00pm on the evening of Tuesday, 19 November, 1996. Mr Hatzitheodosios was the production supervisor for the shift, working as part of a three person team alongside the two process labourers - Mr Maxwell and Mr Richard Kare-Kare. Because it was a night-shift, they were the only people on site. The Company had moved from eight-hour days to two twelve-hour shifts some months before, in order to increase production. However, it had recently been decided to establish three eight-hour shifts, and the shift that night was to be the second-last twelve-hour night-shift. Mr Maxwell, who had successfully filled in for Mr Hatzitheodosios when he took leave in October 1996, was to be permanently promoted to production supervisor on one of the new eight-hour shifts. The Court heard evidence about the events during that shift and its aftermath from: Mr Maxwell, Mr Hatzitheodosios, and Mr Kare-Kare, who worked during the night shift; Mr Mathew Brady, a friend of Mr Maxwell's who visited them during the shift; Mr Ronald Dewis, who worked on the next shift and spoke with Mr Hatzitheodosios during the change-over of shifts; and Mr Michael Wakefield, who was General Manager of the Company's Darwin operations. There were numerous differences in the accounts of what happened during the shift, including difficulties relating to the timing of events. Many of the differences concerned matters which were not of obvious significance. It is clear that the following things occurred: Mr Kare-Kare brought some beer to work with him in a cooler, which he usually used to store his lunch. He and Mr Maxwell began drinking the beer at the beginning of the shift. Mr Maxwell, Mr Kare-Kare and Mr Hatzitheodosios agreed to contribute ten dollars each in order to buy a carton of 24 Victoria Bitter stubbies to celebrate the end of the twelve-hour shifts, albeit a day prematurely. Mr Hatzitheodosios did not have ten dollars with him, so it was agreed that he would owe the others his share. I accept that it was Mr Hatzitheodosios' intention merely to have a few drinks at the conclusion of the shift. Mr Kare-Kare left the premises and returned later with the carton of beer. Mr Hatzitheodosios was aware that Mr Maxwell and Mr Kare-Kare were drinking on the job, and did not stop them from doing so. Mr Hatzitheodosios sought in his evidence to suggest that this was because he felt physically threatened by Mr Maxwell. On balance I do not accept that this was so. I note that at other times in his evidence, Mr Hatzitheodosios described Mr Maxwell as a "friend". I also note that he accepted a lift from Mr Maxwell to work the very next day. I am satisfied that any constraints on Mr Hatzitheodosios' behaviour were socially rather than physically imposed. The team were visited by Mr Matt Brady, Mr Phil Carr and Mr Barry Hunt, who were friends of Mr Maxwell. Such visits were apparently not unusual, occurring about twice per week. On this occasion, the visitors joined them for drinks, consuming about a stubby each and staying an hour or so. The plant, being semi-automated, was able to continue operating during such visits. Mr Maxwell and Mr Kare-Kare consumed a substantial amount of beer during the shift. Mr Kare-Kare admits to drinking six to eight stubbies in all. Mr Maxwell wasn't sure, saying that they were drinking very slowly, but suggested he had drunk five or six stubbies up to midnight, and two more after that. Mr Kare-Kare says there were five or six stubbies left in the carton at the end of the shift, and that they were warm. Mr Maxwell claims that they nevertheless performed their duties quite competently. Mr Hatzitheodosios was supervising the drier, while Mr Maxwell and Mr Kare-Kare were stripping the filters. Mr Maxwell didn't feel he was endangering himself. He didn't feel as though the beer was having any effect, and says he would have driven the fork-lift at the plant if he had had to, though he had no reason to drive it that night. He says he was not concerned about the possible need to handle chemicals that night, nor the possible need to react to unanticipated safety crises. At about 1.00am, a problem developed with the drier. Mr Hatzitheodosios, whose role it was to supervise the drier, had been checking the pumps and the agitators and did not notice when the flame in the drier went out. Mr Maxwell and Mr Kare-Kare were attending to their own duties. As a result, the wet waste material then blocked up the drier. Mr Hatzitheodosios sought Mr Maxwell's and Mr Kare-Kare's assistance to fix and clean the drier, but they refused that assistance. The reason they give for their refusal was their view that because it was Mr Hatzitheodosios' fault that the drier had become blocked up, it should not be their job to help him fix it. Instead, they withdrew to relax in the nearby shed. It took Mr Hatzitheodosios over an hour and a half to fix the drier. By about 3.00am, Mr Hatzitheodosios got the plant operating again and resumed his usual duties. Mr Maxwell and Mr Kare-Kare returned as if to resume work, but then left again and eventually went to sleep in Mr Maxwell's car. Mr Hatzitheodosios woke them at the end of the shift to tell them it was time to go home. The shift produced only two drums of tin oxide, when the production from a good shift would have been about five or six drums. Mr Hatzitheodosios met with the next team of shift workers and gave them the usual briefing at the shift changeover. He didn't tell them what had happened in the previous shift. Mr Dewis, a member of that team, recalls nothing unusual about Mr Hatzitheodosios' behaviour. He noticed nothing unusual about Mr Hatzitheodosios' manner of speech. Mr Hatzitheodosios did not smell as if he had been drinking. Mr Hatzitheodosios felt angry and upset at the end of the shift, and needed someone to talk to. He rang the maintenance supervisor, Mr Alastaire McGuire, and told him what had happened. Mr Hatzitheodosios denies drinking any beer whatsoever in the course of the shift. Mr Kare-Kare disputes this, saying Mr Hatzitheodosios drank at least two beers, including one from Mr Kare-Kare's cooler at the beginning of the shift and at least one other from the carton later in the shift. Mr Maxwell says Mr Hatzitheodosios was drinking as much as he and Mr Kare-Kare were, but that he wasn't very drunk. Given the weight of the evidence, I find that Mr Hatzitheodosios did join Mr Maxwell and Mr Kare-Kare in drinking, though to a limited extent. I accept Mr Kare-Kare's evidence that Mr Hatzitheodosios drank perhaps two or three beers in all, drunk perhaps during "smoko" and "lunch" breaks. I am satisfied that he was considerably less affected by alcohol than his workmates, having drunk significantly less. Mr Hatzitheodosios alleges that Mr Maxwell and Mr Kare-Kare had drunk on the job during the previous two shifts as well, drinking beer on the first shift and ouzo with Coke on the second. They deny this, though they agree that having a drink at the end of the shift was a regular occurrence. On balance, I accept Mr Hatzitheodosios' evidence on this matter. Mr Maxwell's and Mr Kare-Kare's behaviour on their last shift is easier to understand if it is seen as an extension of their earlier behaviour rather than a sudden aberration. Mr Hatzitheodosios' failure to stop their behaviour on the last shift is also more understandable if he had tolerated what he considered to be less objectionable behaviour of that sort in the past. Having given them an inch, they had taken a mile, as it were. Mr Hatzitheodosios says that the trip to purchase the carton took place at about 9.30pm, and that Mr Maxwell and Mr Kare-Kare had drunk about five beers each already by then from Mr Kare-Kare's cooler. The evidence of the others suggest that the trip was earlier, and that there were fewer beers in the cooler to be drunk. I accept Mr Hatzitheodosios' evidence as to the timing, due to his greater recall of the detailed circumstances of Mr Kare-Kare's trip. I accept that he may have exaggerated the contents of the cooler. The most perplexing inconsistency in the evidence concerns the timing of the visit by Mr Maxwell's friends. Mr Brady recalls that they arrived at about 7.00pm. Mr Maxwell says it was definitely during the earlier part of the shift, that it was well before midnight, and that there was over half a carton of beer left. However, Mr Hatzitheodosios says that Mr Maxwell's friends visited in the early hours of the morning, after the drier had blocked. He clearly recalls Mr Carr coming over to talk to him while he was working on fixing the drier. Mr Carr did not give evidence. Mr Brady says that they would also sometimes call in late at night on their way back home "after a night on the town", though he doesn't believe that Tuesday 19 November 1996 such a night. There is no reason to expect that any of the witnesses would be dishonest about this issue. Given that the visits were frequent, it may be that some of the witnesses are confusing that evening with a previous evening. Mr Hatzitheodosios' recollection is the more distinctive and seems less likely to have been confused with another occasion. If it were necessary I would, on balance, find in favour of his version for that reason. The Company's Response Mr Wakefield noticed on the morning of Wednesday 20 November 1996 that the night-shift's production had not been up to the usual level. Mr McGuire then advised Mr Wakefield that Mr Hatzitheodosios had told him that Mr Maxwell and Mr Kare-Kare had been drinking on their shift. Mr Wakefield took the view that drinking on the job amounted to serious misconduct. He does not pretend that the plant was a "dry site"; there was much evidence that it was common for workers to have a drink on site after they had finished their day's work. However, he regarded drinking on the job as unsafe and contrary to the Company's policies. After consulting with his Chief Executive Officer, he prepared dismissal papers for all three employees on the shift. When Mr Kare-Kare arrived that evening for his next shift, Mr Wakefield met with him and asked him if he had been drinking the night before. When he admitted doing so, Mr Wakefield advised him that his employment was terminated and handed him his dismissal papers. He says Mr Kare-Kare seemed to accept the decision. After the meeting, Mr Wakefield saw Mr Kare-Kare call somebody on his mobile phone. Mr Maxwell took the call while he and Mr Hatzitheodosios were driving to work in Mr Maxwell's car. Mr Kare-Kare told Mr Maxwell that he had been dismissed, and that he thought Mr Maxwell would be dismissed too. They assumed that Mr Hatzitheodosios had told management about the previous night's events. Mr Maxwell told Mr Hatzitheodosios after the call that Mr Kare-Kare had been sacked. When Mr Hatzitheodosios and Mr Maxwell arrived at work, Mr Wakefield met with Mr Hatzitheodosios first. He asked him why the previous shift had only produced one drum. Mr Hatzitheodosios gave Mr Wakefield his account of what had happened. Mr Wakefield asked him if he had been drinking the night before. Mr Hatzitheodosios denied having done so. Mr Wakefield asked him if he was sure. He confirmed that he was. Mr Hatzitheodosios was not given the dismissal papers that had been prepared for him. According to Mr Wakefield, when Mr Maxwell came in for his meeting, he told Mr Wakefield: "Just give me my dismissal papers and I'm out of here." Mr Wakefield handed the papers to Mr Maxwell with his cheque. The letter of termination gave no reason for the termination. It seemed to Mr Wakefield that Mr Maxwell was aware why he was to be terminated, and that he accepted it. Mr Maxwell recalls Mr Wakefield asking him whether he had been drinking on the shift. He says he admitted he had, but added that Mr Hatzitheodosios had been drinking too, and that he had been drinking under supervision. He says Mr Wakefield just shrugged. I accept that the interview began in the manner Mr Wakefield describes though it is likely that Mr Maxwell later added the recriminations about Mr Hatzitheodosios' role in events. Mr Wakefield agrees that he did not ask any of the three employees how much they had drunk, or whether any of the other employees had been drinking. Whether there was a Valid Reason for the Termination. Mr Maxwell complains that he was never warned about drinking in the workplace. He complains that he was given no chances. He received no counselling. However, he later conceded that everyone knows that drinking at work is the wrong thing to do. I think that is an accurate assessment, especially in a working environment where machinery is used. There was a passing reference in Mr Wakefield's evidence to an induction course which had a safety component, though there was no detailed evidence of its contents. It is obviously desirable for employers to periodically emphasise any such prohibitions, preferably in written form. However, I am satisfied that Mr Maxwell was in fact aware that his drinking on the job was a serious contravention of the standards of behaviour the Company expected of him. There is a widespread misconception in the community that it is always necessary to issue three warnings before dismissing an employee. However, whether warnings are required depends on the circumstances of the particular dismissal. The issuing of a warning has the effect of "drawing a line" and making clear the standards of performance required of an employee. In this case, I am satisfied that Mr Maxwell would have been in no doubt that his standard of behaviour was such that his employer would be entitled to dismiss him. While a particular employer might, in those circumstances, choose not to exercise that entitlement and instead give the employee a second chance, an employer is not required to do so. Mr Maxwell says he wouldn't have worked if he had felt drunk. I am well satisfied that his level of intoxication was such that he should not have been working, in the interests of safety. His failure to work for the latter part of the shift suggests a tacit acceptance of this on his part. Subject to the following contentions, therefore, I am satisfied that there was a valid reason for the termination of Mr Maxwell's employment. Whether the Drinking was Authorised At the beginning of the hearing it was contended that there was no valid reason for termination because Mr Hatzitheodosios authorised the drinking. I think it is fair to say that this contention fell away in the course of the hearing and was not pressed in closing. Leaving aside any differences in the evidence as to Mr Hatzitheodosios' conduct during the shift in question, Mr Maxwell conceded that he knew that they would all be in trouble if management learned that they had been drinking on the job. In other words, he knew at the time that the Company had a policy against drinking "on the job" and that Mr Hatzitheodosios did not have the authority to authorise a breach of that policy. Whether the Company Applied its Policy Consistently It is clear that Mr Maxwell's belief that the Company did not act fairly or consistently by dismissing him while not dismissing Mr Hatzitheodosios is at the core of his sense of grievance. Indeed, one almost had the sense that Mr Maxwell was more concerned that Mr Hatzitheodosios lose his job than he was with the success of his own claim. The Company's response was two-fold. First, the Company contends that the reason for the termination of Mr Maxwell and Mr Kare-Kare was their admission that they had been drinking on the job. Had Mr Hatzitheodosios made a similar admission, he too would have been dismissed. As it was, however, Mr Hatzitheodosios did not admit to drinking on the job. Faced with that denial, and whatever its suspicions may have been, the Company was entitled to take a prudent course and not dismiss Mr Hatzitheodosios rather than embark on a process of trying to prove otherwise, when the result of that process might itself have been challenged in this Court. I do not accept that the failure to obtain an admission from one of a group of employees with regard to an allegation levelled against all of them relieves the employer from further investigating the allegation against that employee and making a judgment in good faith as to his or her conduct. The Act should not be applied in such a way that honest employees are penalised relative to dishonest employees. I will consider this question further below. Secondly, the Company contends that Mr Maxwell's work history compared unfavourably with that of Mr Hatzitheodosios, so that the imposition of a harsher sanction upon him for similar behaviour could have been justified. File notes were produced of three previous verbal warnings which were allegedly given to Mr Maxwell in the period from August to early November 1996, each concerning a complaint from a supervisor or a fellow employee about the manner in which Mr Maxwell dealt with them. I do not place much weight on this evidence. These file notes were never shown to Mr Maxwell at the time. The notes tendered at the hearing were surprisingly uniform in appearance. The matters complained of indicate a difficulty in Mr Maxwell's manner of dealing with others when they did not meet his standards of performance, either because they were (in his view) incompetent, or late, or not leaving the workplace the way he believed it should be left. Given that the Company had decided it was appropriate to appoint Mr Maxwell as a shift-supervisor, it would appear that the Company placed little weight on Mr Maxwell's perceived shortcomings at the time. Given my findings in this matter, however, there does appear to me to be a basis on which the imposition of a harsher sanction upon Mr Maxwell and Mr Kare-Kare than on Mr Hatzitheodosios could have been justified. I have found on the evidence before me that Mr Hatzitheodosios drank, but that he drank comparatively little. He also worked throughout the night, and it was he who reported the events to management. While one might take the view that, given his relative seniority, he should also have been dismissed, it does not seem to me unreasonable or irrational to take a contrary view. The Court is not in the managerial chair. Accordingly, I accept that the circumstances in Mr Hatzitheodosios' case were sufficiently dissimilar in the respects outlined above that Mr Wakefield's decision not to dismiss him was justifiable. I find, therefore, that there was no failure by the Company to treat its employees consistently, such as might render invalid what would otherwise be a valid reason for termination. Whether Mr Maxwell was Given an Opportunity to Defend Himself. I am satisfied that when he met with Mr Wakefield on the evening of 20 November 1996, Mr Maxwell was not motivated so much by a desire to save his own job as to ensure that Mr Hatzitheodosios lost his. I accept that he raised the allegation of Mr Hatzitheodosios' participation in events. That was a matter that the Company was, in my view, under an obligation to investigate. It potentially affected the Company's assessment of the character of the events during the shift in question, given that the only account Mr Wakefield had of those events was, directly or indirectly, that of Mr Hatzitheodosios. It may have led the Company to exercise its discretion not to dismiss Mr Kare-Kare and Mr Maxwell, notwithstanding its right to do so. It may have been that Mr Hatzitheodosios' behaviour was such that there would have been no grounds for distinguishing between the three employees with regard to the sanctions applied to their behaviour. In failing to investigate Mr Maxwell's allegations concerning Mr Hatzitheodosios' behaviour, I find that the Company was in breach of Section 170DC of the Act, which requires that an employee be given the opportunity to defend himself or herself against allegations made against them. However, I accept that, whatever the outcome for Mr Hatzitheodosios' employment, it is relatively unlikely in the particular circumstances of this case that any such investigation would have affected the Company's decision to terminate Mr Maxwell's employment. Accordingly, I will award only a nominal sum as compensation for the breach of Section 170DC. Conclusion The Court will order that the respondent pay $863.14, being a sum equal to two weeks' wages, as compensation for the breach by the Company of Section 170DC of the Act.