Franklins Ltd v Pearson [1997] IRCA 288

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - review of decision of judicial registrar - whether extension of time should be granted - goods of no value belonging to employer taken by employee without permission - employee failed to allow employer to inspect goods - whether employer had a VALID REASON to terminate the employment - whether essential condition of contract of service repudiated

Workplace Relations Act 1996 (Cth), s 170DE, s 170EA

Nelson v Scholle Industries (1995) 64 IR 9, distinguished North v Television Corporation Ltd (1976) 11 ALR 599, applied FRANKLINS LTD v GEOFFREY ROBERT PEARSON NI 2286 of 1995 MADGWICK J SYDNEY 4 NOVEMBER 1997

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NI 2286 of 1995

BETWEEN: Franklins Ltd

Applicant

AND: Geoffrey Robert Pearson

Respondent

JUDGE(S): MADGWICK J

DATE: 4 NOVEMBER 1997

PLACE: SYDNEY

SHORT MINUTES OF ORDER

THE COURT ORDERS THAT: 1. The decision of the judicial registrar be set aside. 2. The original application be dismissed.

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NI 2286 of 1995

BETWEEN: Franklins Ltd

Applicant

AND: Geoffrey Robert Pearson

Respondent

JUDGE(S): MADGWICK J

DATE: 4 november 1997

PLACE: SYDNEY

REASONS FOR JUDGMENT HIS HONOUR: The respondent, Mr Pearson, had been employed by the applicant company as a forklift driver at its Chullora warehouse for 6˝ years. In the early morning of 12 January 1995 an incident which involved Mr Pearson taking some damaged work clothing from the warehouse without permission led to the company terminating Mr Pearson's employment later that day. Mr Pearson lodged an application, out of time, under the Industrial Relations Act 1988 (Cth) (as it was then called) on the ground that his employment had been unlawfully terminated. A judicial registrar found that, in the circumstances, the Court should exercise its discretion to allow the application to proceed out of time. The judicial registrar also found that the company did not have a valid reason to terminate Mr Pearson's employment, and awarded reinstatement and compensation for lost wages. This is a review of that decision under s 377 of the Workplace Relations Act 1996 (Cth) ("the Act"). Background to the Review The relevant facts, which were not in dispute, are as follows. Approximately ten minutes before the end of Mr Pearson's night shift, he was seen by a security officer via surveillance cameras to take two bags from the applicant's warehouse and put them in his car. At the end of his shift, Mr Pearson drove his vehicle to the bundy area of the warehouse to "clock off", and when he returned to his vehicle Mr Eddy, the assistant afternoon shift manager, and Mr Renton, a shift supervisor, were waiting to speak to him about the content of the bags. Mr Pearson was told that he had been observed putting something into the trunk of his car, to which he replied that the bags contained old freezer clothing that had been discarded as rubbish. Mr Eddy asked whether Mr Pearson had obtained a "gate pass", under an established system of authorising the taking of items from the warehouse by employees. The respondent replied that he had not obtained a gate pass, that the bags only contained rubbish and that he had not obtained a gate pass because he could not find a supervisor to issue one. Mr Eddy asked Mr Pearson whether he had spoken to Mr Bowran, one of the supervisors on duty, to which Mr Pearson replied that Mr Bowran didn't give gate passes. Mr Eddy asked Mr Pearson to remove the bags from the car, and indicated that a gate pass would be issued. Mr Pearson agreed, but then got into his vehicle and drove off without showing the contents of the bags to Mr Eddy or to Mr Renton. The next day Mr Pearson was asked to go to the office for a meeting with management about the incident. Expecting some trouble, Mr Pearson had brought the bags back with him to work. At the meeting were Mr Pearson; Messrs Nasr and Scardinale, Mr Pearson's union representatives; Mr Freitas, the shift manager; Mr Kane, the site manager for Chullora; and Mr Eddy. Mr Kane indicated that the issues being investigated were the fact that Mr Pearson had gone to his car before the end of his shift, and that he had ignored a reasonable request by his supervisor to inspect the bags. Mr Pearson stated that he did not believe that he was under any obligation to comply with management requests concerning searches as there had not been a union delegate present at the time. Mr Pearson's employment was then terminated on the grounds that he had taken damaged stock without a gate pass. Extension of time - was it necessary and should it be granted? The limitation period provided in the relevant version of s 170EA(3) required that an application be made (a) within 14 days after the employee receives written notice of the termination; or (b) within such further period as the Court allows on an application made during or after those 14 days. The respondent did not lodge an application for a remedy under the Act until 26 May 1995, some four months after his termination. Mr Pearson's explanation for the delay was that three days after his employment had been terminated, a union representative had a meeting with management to discuss the prospects of Mr Pearson being reinstated. Following this meeting, the union representative advised him that he had little chance of being reinstated. It was not until some time in April that the union advised the respondent to seek legal advice about a possible unlawful termination claim, whereupon Mr Pearson contacted legal aid authorities. Mr Pearson also pointed to the fact that he had not received written notice of his termination, nor did he personally receive a copy of his employment separation certificate which the applicant had provided to the Department of Social Security on 10 February; furthermore, the certificate did not provide any reasons for the termination of employment, the applicant only indicating that Mr Pearson did not cease work voluntarily. The applicant submits that the issuing of the separation certificate on 10 February constituted sufficient notice to comply with the requirements of the Act. In Nelson v Scholle Industries (1995) 64 IR 9, von Doussa J held that the issuing of an employment separation certificate was sufficient to constitute written notice for the purposes of s 170EA(3)(a). However, the facts in Nelson are significantly different from those in this case; in Nelson the separation certificate had been supplied by the employer to the employee within a few days following the termination, and the certificate set out the reasons for the termination. Furthermore, the applicant in Nelson had also received and signed a document produced by the employer which clearly stated that the employment was being terminated and indicated the reason for it. Nothing that could be said to be written notice of termination was provided to Mr Pearson and so, because of s 170EA(3), time did not begin to run against him. Alternatively, having regard to cases such as Hunter Valley Developments v Cohen (1984) 3 FCR 344 at 348-349, this is an appropriate case to grant an extension of time for the lodgement of the application: Mr Pearson has a reasonable explanation, and I can see no particular prejudice to the employer if an extension of time is granted.