Industrial Relations Commission of New South Wales CITATION : Encanto v Bayview Seafoods Pty Ltd [2001] NSWIRComm 131 PARTIES : Renel Encanto Bayview Seafoods Pty Ltd FILE NUMBER: 6273 of 2000 CORAM: Harrison DP Unfair dismissal - allegations of threats and unruly behaviour at Christmas function - lack of investigation - provocation by management - allegations not supported by evidence CATCHWORDS : Held - Termination harsh, unreasonable and unjust - Reinstatement without loss of earnings LEGISLATION CITED : Industrial Relations Act 1996 CASES CITED : Bi-lo v Hooper (53 IR 224) Electricity Commission of NSW t/as Pacific Power v Nieass ((1995) 81 IR 46) HEARING DATES: 05/09/2001; 05/10/2001 DATE OF JUDGMENT: 06/08/2001 APPLICANT Ms J Mundey Counsel Instructed by Annette Nicholson & Associates LEGAL REPRESENTATIVES: RESPONDENT Ms Tanya Marshall Employers First JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Friday, 8 June 2001 Matter No IRC 6273 of 2000 RENEL ENCANTO & BAYVIEW SEAFOODS PTY LTD Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION 1 Arbitration proceedings in this matter took place at Taree Court House on 9 and 10 May 2001. 2 Ms J Mundey of Counsel, instructed by Annette Nicholson & Associates, appeared on behalf of the applicant, Mr Renel Encanto. Ms T Marshall of Employers First appeared on behalf of Bayview Seafoods Pty Ltd, the respondent employer, with Mr P J Ryan. 3 Ms Mundey brought evidence from the applicant; Mr Matthew Ruprecht, a friend of the applicant; Mrs Elsie Cause, the applicant's mother; Mr Walter Cause, the applicant's stepfather; Ms Susane Murphy, a friend of the applicant and his family, also employed by the respondent; and Senior Constable Stegeman of the NSW Police Force. 4 Ms Marshall brought evidence from Mr Ian Smith, a Director of the respondent; Mr Bruce Martin, employed as Production Supervisor by the respondent; Mr Peter Gunn, employed as Stores Supervisor by the respondent; Mr Craig Underwood, employed as Chief Production Controller Officer by the respondent; Mr Peter Kennewell, employed as Administration Manager and Company Secretary by the respondent; Mr Trevor Shoesmith, employed as Night Foreman of Cleaning Staff by the respondent; Mr Kenneth Heycox, Chief Executive Officer of the respondent; and Mr Rodney Fuller, employed as Plant Manager by the respondent. 5 An ex tempore decision and orders were issued in transcript on 10 May 2001. Reasons in full are now published. THE EVIDENCE 6 Mr Encanto is a Phillipino born Australian resident of 21 years of age. He commenced employment with the respondent in early 1996 following a two month period of placement training by the Commonwealth Rehabilitation Service on completion of his high school education. Mr Encanto has a congenital speech impediment for which he has undertaken various remedial procedures with limited success. 7 The events giving rise to the termination of Mr Encanto's employment occurred at a Christmas party organised by the employer at the Taree Race Course for clients, suppliers, directors, management, employees and guests on 16 December 2000. 8 Mr Encanto invited Mr Ruprecht, a close friend from his school days, to be his guest at the Christmas function. Mr Encanto and Mr Ruprecht arrived some time after the commencement of the function. 9 The evidence of Mr Kennewell is that shortly after the arrival of Mr Encanto and Mr Ruprecht the bar manager (identified as a Mr Russell Allport) put to Mr Kennewell that Mr Encanto and Mr Ruprecht could be trouble and should be watched. 10 Mr Kennewell's evidence is that he did not observe any misconduct by Mr Encanto and Mr Ruprecht up to that point, nor did Mr Allport specify any particular misbehaviour; though Mr Encanto and Mr Ruprecht had been asked to remove their baseball style caps whilst inside the function centre. The evidence is that they complied with this request without compliant. Mr Encanto subsequently went outside for a cigarette and returned with his cap on, forgetting to remove it when re-entering the premises but had taken it off again when requested to do so. 11 The evidence of Mr Kennewell is that Mr Gunn had subsequently informed him that Mr Encanto and Mr Ruprecht had been smashing beer glasses in the men's toilet. The evidence of Mr Gunn is that he had not seen Mr Encanto or Mr Ruprecht break any glasses but had heard glass breaking whilst he was in the toilet and had observed Mr Encanto and Mr Ruprecht leaving the toilet facilities at the same time as himself. The evidence of Mr Gunn is that there was a brief exchange between them, Mr Gunn saying no more than hello to Mr Encanto; and enquiry from Mr Ruprecht as to who Mr Gunn was; and a response from Mr Encanto that "he's okay, he's cool". 12 In cross examination Mr Gunn conceded that he had not observed or heard Mr Encanto and Mr Ruprecht speak or act in any offensive or aggressive manner prior to his report to Mr Kennewell. 13 The evidence of Mr Underwood is that he was informed by Mr Martin that he thought that Mr Encanto and Mr Ruprecht had been throwing beer glasses from the balcony of the function centre on to the race track. It is Mr Martin's evidence that he was on the balcony overlooking the race track and looking round he observed Mr Encanto and Mr Ruprecht at the other end of the balcony, they being the only other persons on the balcony at that time so far as he was aware. 14 In cross examination Mr Martin conceded that he did not see Mr Encanto or Mr Ruprecht throw any glasses or act or speak in any offensive manner. 15 Mr Underwood's evidence is that shortly after he received the report from Mr Martin, Mr Kennewell came to him and reported the information he had received from Mr Gunn. Mr Underwood deposed that he and Mr Kennewell considered the matter for a few moments and decided they should ask Mr Encanto and Mr Ruprecht to leave the function. Mr Underwood and Mr Kennewell then approached Mr Encanto and Mr Ruprecht who were sitting at a table in the function centre. Mr Underwood deposed that he asked Mr Encanto if he had been smashing glasses in the toilet and that Mr Encanto had nodded his head in assent. Mr Encanto denies this exchange. Mr Underwood's evidence is that he then asked Mr Encanto to leave the function. Mr Underwood's evidence is that without verbal response Mr Encanto rose from his seat, knocking over a glass of beer, then proceeded to the doors and left. 16 In his affidavit of evidence (ex 9) Mr Underwood deposed that some glasses were knocked over but in cross examination he conceded that this was a mistake and that only one glass was involved. 17 In cross examination Mr Underwood and Mr Kennewell both conceded that they had not observed either Mr Encanto or Mr Ruprecht conduct themselves in an inappropriate manner prior to asking them to leave the function. 18 Mr Underwood's evidence is that Mr Encanto and Mr Ruprecht were accompanied toward the exit by himself, Mr Kennewell and Mr Gunn and were joined at the exit by Mr Smith. Mr Underwood denied that he was mocking Mr Encanto's speech impediment and had simply put to him a couple of times that he "should just go home before you get into trouble". Mr Underwood's evidence is that Mr Encanto was shaping up to fight him and Mr Kennewell and that Mr Ruprecht became abusive. Mr Underwood's evidence is that he, Mr Kennewell and Mr Smith concluded they should call for the security guard and that Mr Encanto, by this time outside the function area, kicked out at a caterer's van, causing some damage to it. Mr Underwood's evidence at page 90 of transcript describes the subsequent events in the following terms: Q: Renel went to leave? A: Renel was, yes, heading towards where we were going because that's the entrance out of the race track and Ian Smith asked him where he was going and he said, "Home." and he said, "No, you're not, we're calling the police. You've just damaged the caterer's car, private property." Q: And Ian Smith prevented him from leaving, in fact? A: He Put his arm around Renel and I was, sort of - I seen him do that and I was a bit in front of them and then I turned around and Renel was on the ground and Ian was kneeling over Renel. Q: Was Renel facing the ground or on his back at that stage? A: Facing the ground. Q: And Mr Smith was preventing him from getting up from the ground? A: He was just - he was just kneeling over him. He wasn't - I wouldn't say he was sitting on him. He was just kneeling over him. Q: Yes, a fair bit bigger than him, isn't he? A: Yes. Q: Now, you say that you saw the security guard? A: No, I - the security guard came down but I'm not sure who went and got the security guard but the security guard did come down and he knelt down next to Ian Smith and held Renel's legs. 19 The evidence of Messrs Underwood, Smith, Kennewell and Heycox is that Mr Encanto was held facedown on the ground for some 15 to 20 minutes until the Police arrived. There was some inconsistency in the evidence as to whether Mr Encanto had his shirt off or pulled up over his head during this time. 20 The evidence of Messrs Underwood, Kennewell , Smith and Heycox is that Mr Encanto was at no time turned over on his back, nor did Mr Smith sit on him. The evidence from these witnesses is that during this period of restraint Mr Encanto continued to abuse and threaten them and that Mr Ruprecht maintained his abusive behaviour. 21 The evidence of Mr Smith is that he was motivated to restrain Mr Encanto due to a threat made by Mr Encanto and Mr Ruprecht that they would come back later in the evening with others to "make them pay". Mr Smith could not recall any specific threat made by Mr Encanto whilst he was being restrained. The evidence of Mr Heycox is that he arrived at the scene after Mr Encanto had been restrained and that he clearly heard Mr Encanto threaten to kill people. 22 The evidence of Mr Encanto and Mr Ruprecht is that shortly after arrival at the function Mr Encanto was subject to teasing and mocking of his speech impediment by some employees who were largely unknown to Mr Encanto. The evidence is that Mr Encanto got on well with those employees on his shift with whom he has regular contact, all of whom are understanding of and sympathetic to his affliction. 23 It is Mr Encanto's evidence that he proceeded to leave the function when asked to do so though he was unaware why he was being ejected and was further disturbed by mocking of his speech during departure. He vented his anger and frustration by kicking out at the caterer's van; an act for which he expressed contrition and has been the subject of charges by the Police resulting in the imposition of a penalty in the Local Court. Mr Encanto is in the process of paying a monetary penalty by instalments. 24 The evidence of Mr Encanto and Mr Ruprecht is that once put on the ground by Mr Smith, Mr Encanto was rolled on to his back at which time Mr Smith sat on him, making it difficult to breathe and that the only utterances by him whilst on the ground were requests to be released and complaints that he was having difficulty breathing. 25 The evidence of Senior Constable Stegeman is that she was concerned at the level of restraint placed upon Mr Encanto. It is her evidence that Mr Ruprecht was behaving in a loud and obnoxious manner which was of no assistance to Mr Encanto. 26 The evidence of Messrs Smith, Heycox, Kennewell and Underwood is that Mr Encanto resisted Police when he was placed in the Police van and continued to shout threats and kick the van whilst inside, resulting in a police officer further reprimanding him. 27 This is denied by Mr Encanto and is not supported by the evidence of Senior Constable Stegeman. 28 The evidence of Mr Shoesmith, Mr Encanto's direct supervisor, is that Mr Encanto was a cooperative and valued employee who got on well with his colleagues though was shy and embarrassed by his speech impediment, kept to himself, was difficult to engage in discussion and did the work required of him in a competent and diligent manner. Mr Shoesmith deposed that he had not attended the Christmas party but was informed that Mr Encanto had "run amok" at the function. Mr Shoesmith deposed that he regarded this as out of character for Mr Encanto and went to Mr Encanto's residence on Sunday, 17 December 2000 to make some enquiries, an act undertaken without authority or approval of management. 29 The evidence of Mr Shoesmith is that he subsequently requested Mr Heycox to convene a meeting of the relevant parties to enquire into Mr Encanto's conduct and the events of the Christmas party. This request was denied on the basis that management's decision had been taken and that in view of the "death threats" made by Mr Encanto no further consideration would be made of the matter. 30 There is unrefuted evidence that Mr Heycox held a meeting of senior management and supervisory staff in the days prior to the Christmas function to convey his requirement that there be no misbehaviour by any staff or employees at the function and that severe disciplinary action would result from any misbehaviour. 31 This concern arose from unacceptable behaviour on previous occasions which Mr Heycox did not want repeated. Some detail of those previous events were provided in evidence. None of the events involved Mr Encanto, nor were any of those concerned dismissed or otherwise subject to prejudice in their employment. The terms of the general warning were not conveyed to Mr Encanto. SUBMISSIONS 32 Ms Mundey described the actions of Mr Smith as heavy handed and extreme, at best. 33 Ms Mundey relied upon the evidence to support her submission that the termination of Mr Encanto's employment was harsh, unreasonable and unjust. Ms Mundey submitted that Mr Encanto had been a model employee in his five years of employment, never subject to criticism or complaint concerning the standard of his work and had never come to the attention of his superiors in an adverse manner. 34 Ms Mundey submitted that the evidence of Mr Smith lacked credibility and that the only real trouble occurring at the function was a result of a complete and unwarranted over reaction on the part of Mr Smith who set upon Mr Encanto and physically restrained him with excessive force at a time when Mr Encanto was departing the function as requested. 35 Ms Mundey submitted that Mr Smith's justification for restraining Mr Encanto, his concern that Mr Encanto posed a real threat to his 7 months pregnant girlfriend at the function and others, was ludicrous. Ms Mundey put that the evidence reveals at worst if Mr Encanto were making threats it was while he was held down by Mr Smith, a person twice his size, and a security officer. Ms Mundey submitted that Mr Encanto was not making threats whilst held down but asking to be released. 36 Ms Mundey put that it was difficult to accept the evidence of Mr Heycox that he could clearly hear the threats made by Mr Encanto. Ms Mundey relied upon the speech difficulties suffered by Mr Encanto, plainly evident during the course of evidence in these proceedings. Ms Mundey put that she could understand Mr Encanto when he was using simple language and simple words, however anything more complex and he became difficult to understand. Ms Mundey made this submission in the context of having spent some time with Mr Encanto prior to these proceedings and having become familiar with his manner of speech. Ms Mundey put that Mr Heycox on his evidence had never had a conversation with Mr Encanto, was unaware of his speech difficulty, and accordingly would not be regarded as familiar with his form of speech. Ms Mundey put a similar submission in respect to Mr Smith who deposed that he had not associated with employees in his position as a company director and certainly had no familiarity with Mr Encanto's work history, character or method of speech. Ms Mundey further submitted that it could not be found that Mr Encanto could be considered threatening in any way by Mr Smith, Mr Heycox and others in the circumstances. Ms Mundey submitted that all of the allegations against Mr Encanto at the function grew in the telling and when subjected to close analysis, none of the witnesses had seen or heard Mr Encanto involved in any misconduct prior to him being asked to leave the function. 37 Ms Marshall put that Mr Encanto should not be believed and that I should prefer the version of events advanced by witnesses for the respondent. 38 Ms Marshall submitted that the request for Mr Encanto and Mr Ruprecht to leave the Christmas function was appropriate and consistent with the earlier communicated instruction by Mr Heycox that misbehaviour at the Christmas function would not be tolerated. 39 Ms Marshall relied upon the decision in Bi-lo v Hooper (53 IR 224 at 229-230) as authority for the proposition: "That the employer will satisfy the evidentiary onus which is cast upon it in respect of a dismissal on the grounds of misconduct if it (a) demonstrates that insofar as it was within its power, before dismissing the employee it conducted a full and extensive investigation into all of the relevant matters surrounding the alleged misconduct and was reasonable in the circumstances". … … "That the employer will satisfy that evidentiary onus if they can show that they gave the employee every reasonable opportunity and reasonable time to answer all the allegations and respond thereto." 40 Ms Marshall submitted that such an investigation took place and that Mr Encanto was given an opportunity to respond by Mr Shoesmith when he visited Mr Encanto at his residence. 41 Ms Marshall also relied upon the judgment of a Full Bench of the Commission in Electricity Commission of New South Wales t/as Pacific Power v Nieass ((1995) 81 IR 46 at 48) in which the Bench said: "In industrial circumstances as in other avenues of life, an employee must be taken to be aware of the natural and probably consequences of their actions. We reject as industrially inappropriate any notion that an adult responsible and senior employee are entitled to a warning that they might be dismissed if they continue to misconduct themselves any more than they need to be told that they should be careful in crossing street. There is an assumption that an employee will realise the consequences of their own actions." 42 Ms Marshall concluded her submissions, putting that Mr Encanto had been the author of his own misfortune and that the application should be dismissed. Ms Marshall put an alternative submission that in the event that the termination is found to be harsh, unreasonable and unjust, reinstatement should not be considered a practical option, noting that Mr Encanto had not directly approached the respondent seeking reinstatement and that compensation should be minimal. 43 Ms Mundey noted that the application sought reinstatement, had been filed in time, and that Mr Encanto had never been given an opportunity to make a direct request for reinstatement and in her submission there were no practical impediments to reinstatement, which she put was the appropriate and just remedy in the circumstances of this matter. CONSIDERATION 44 Shortly after arrival at the Christmas party Mr Encanto and Mr Ruprecht were identified as potential troublemakers for reasons not specified in the evidence of any witness. 45 Allegations of breaking glass in the toilet facilities and throwing glasses onto the race track were made against Mr Encanto and Mr Ruprecht and accepted by management personnel to whom those reports were made. 46 The evidence in these proceedings is that none of those making the allegations observed any of the behaviour alleged and that no investigation was made by management, club staff or security personnel at the function. 47 There was no trouble at the function or direct observation of misconduct by Mr Encanto until he and Mr Ruprecht were asked to leave. Mr Encanto was asked if he had broken glasses in the toilet. It is put in evidence that Mr Encanto did not respond verbally, apparently nodding his head in the affirmative. This is denied by Mr Encanto. This exchange took place in a noisy environment in which the question may not have been heard, or heard incorrectly. 48 Mr Encanto maintains that he was unaware of the reason he was asked to leave. He rose to depart and accidentally knocked over a glass of beer. There is some inconsistency in the evidence as to whether he knocked over more than one glass and whether the glass or glasses were merely tipped over on the table or fell to the floor and broke. 49 Mr Encanto proceeded to depart as requested. He was angry at being asked to leave for no apparent reason and having been subject to mocking of his speech by some persons prior to being asked to leave. 50 On departure Mr Encanto kicked out at a caterer's van, causing some damage and, on his evidence, shaped up to Mr Underwood who Mr Encanto deposed had mocked him during the course of his departure. Mr Underwood denied mocking Mr Encanto. 51 The damage to the caterer's van was a silly and thoughtless act for which Mr Encanto has been dealt with by law. I accept that this act is out of character for Mr Encanto. It was an act taken by a young man in anger and frustration at his unjustified ejection from the social function and at being mocked and was further assisted, aided and abetted by alcohol. 52 Mr Smith, a Company Director, then restrained Mr Encanto who had indicated that he was leaving the function location as directed. 53 There is some conflict and uncertainty in the evidence of the means and method by which Mr Encanto was held down and whether he made threats to Mr Smith and those assembled. 54 The alleged threats are not substantiated by the evidence. The test to be applied is the civil standard of the balance of probabilities. 55 It is improbable that a person of Mr Encanto's character and work record would make such a threat. It is improbable that any of the witnesses would understand what was being said by Mr Encanto, a small young man with a significant speech impediment, being held face down by two much larger adults. 56 It further defies credibility that Mr Smith, who must be regarded as instituting physical contact, was kneeling over or on Mr Encanto for 15 to 20 minutes, but could not remember specific threats made by Mr Encanto, whilst Mr Heycox deposed that he could hear Mr Encanto clearly. The proposition put by Mr Smith that he could not remember due to effluxion of time and his busy life is incredible. The suggestion that Mr Encanto maintained a tirade of threats and physical resistance to Mr Smith and the security officer. 57 To the extent that threats were made, and I do not accept that that is the case, these utterances were whilst being held down in an emotionally charged scene with no basis for the so-called threats being taken seriously. 58 This is a very simple and straightforward matter that turns upon its facts. The evidence establishes as fact that during the term of his employment Mr Encanto was a cooperative and willing worker who got on well with his fellow employees, though was introspective and embarrassed by a severe speech impediment. 59 The event of the social function and the evidence surrounding that reveal that management overreacted to allegations made against Mr Encanto and Mr Ruprecht which were not substantiated in any way. During the course of that over reaction, Mr Encanto committed a rather foolish and silly act in striking out at a motor vehicle with his foot, causing some damage. I agree with the submissions by Ms Mundey, he has been dealt with by law in respect to that matter. The action was out of character for Mr Encanto, but not necessarily out of character for a young man subject to injustice and mocking of his speech impediment. 60 The trouble did not start until Mr Encanto and his friend were asked to leave. The trouble was escalated by the actions of Mr Smith and I do not find, I cannot find on the evidence, that threats were made by Mr Encanto. If threats were made, it could not be found that those threats were serious. The conduct of Mr Ruprecht at the function and the fracas on departure are questionable and do Mr Encanto no service. 61 So far as the tests set out in Bi-lo v Hooper are concerned, I find that they have not been met by management conduct. It would have been appropriate and proper for a full investigation to be undertaken by interview of Mr Encanto, appropriately represented, during the course of the next day's employment or prior thereto in which he be given, as section 84 of the Act requires, an opportunity to make out a defence for the actions alleged of him. The specific allegations were never put to Mr Encanto by management during the course of any investigation. The efforts of Mr Shoesmith cannot be found to be an investigation for the purposes of section 84 of the Act or for Bi-lo tests. 62 I find in these circumstances that the termination of Mr Encanto's employment was harsh, unjust and unreasonable and issue the following orders pursuant to s89 of the Act. ORDERS 1. Pursuant to section 89(l) of the Act Mr Renel Encanto be reinstated to his employment. 2. Pursuant to section 89(3) of the Act Mr Renel Encanto be compensated for remuneration lost from the time of termination to his reinstatement. 3. Pursuant to section 89(4) of the Act Mr Renel Encanto's employment not be broken for any purposes of continuity. oo0oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.