Industrial Relations Commission of New South Wales CITATION: Finn -V- Perfection Dairies Pty Ltd [2005] NSWIRComm 1067 APPLICANT Russell Finn PARTIES: RESPONDENT Perfection Dairies Pty Ltd FILE NUMBER(S): 4733 of 2004 CORAM: Cambridge C Unfair dismissal - termination of employment - summary dismissal - evidentiary onus to justify summary dismissal - allegations of gross and wilful misconduct - cigarettes in the workplace contary to employer's policy - onus not properly discharged - absence of substantive basis - procedural errors - employer's policy held to be unreasonable - dismissal held as harsh, unreasonable and unjust - reinstatement Ordered. CATCHWORDS: LEGISLATION CITED: Industrial Relations Act 1996 [NSW] Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No. 3), (1990) Industrial Commission of NSW, Hungerford J, 35IR 70. Wang and Others v Crestell Industries Pty Ltd and Another (1997) Full Commission of Industrial Relations Commission of NSW, [Cahill VP, Hill J & French C], 73IR 454. Bigg v New South Wales Police Service, Full Commission of Industrial Relations Commission of NSW [Bauer Schmidt JJ & Murphy C], 80IR 434. CASES CITED: Jones v Dunkel (1959) 101 CLR 298. IGA Distribution Pty Ltd v Moses (No 2) (2002), Full Commission of Industrial Relations Commission of NSW, [Wright P, Walton VP & Redman C] 114IR @ 307. Perkins v Grace Worldwide (Aust) Pty Ltd, (1977) Industrial Relations Court of Australia, [Wilcox CJ Marshall & North JJ], 72IR @ 186. HEARING DATES: 11/23/2004; 04/07/2005 DATE OF JUDGMENT: 05/10/2005 APPLICANT Mr A Britt, Barrister LEGAL REPRESENTATIVES: RESPONDENT Mr J Law, Agent DECISION: - 11 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 10 May 2005 Matter No IRC 4733 of 2004 Russell Finn -V- Perfection Dairies Pty Ltd Application by Russell Finn pursuant to section 84 of the Industrial Relations Act 1996 re unfair dismissal. DECISION [2005] NSWIRComm 1067 1 Smoking is prohibited in many workplaces. However, usually employers recognise the addictive nature of nicotine and provide for designated places and/or procedures to permit addicted employees to smoke. It is unusual for an employer to extend a no-smoking in the workplace policy to a complete prohibition upon the possession of cigarettes in the workplace. Therefore it was surprising to find that Russell Finn (the applicant), was summarily dismissed for bringing cigarettes onto the worksite. BACKGROUND 2 The applicant, who is thirty six years of age, worked for Perfection Dairies Pty Ltd (the employer), for approximately four years and one month. On 15 July 2004, the employer summarily dismissed the applicant for behaviour that it treated as wilful misconduct. The applicant's misconduct involved bringing a packet of cigarettes onto the worksite. 3 The alleged gross and wilful misconduct of the applicant involving possession of cigarettes at the worksite, was not a matter of contest. The applicant admitted, both at the time of dismissal and subsequently in these proceedings, that he had taken a packet of cigarettes onto the worksite in his bag on 14 July 2004. At approximately 1.00pm on that day the applicant admitted that he removed the cigarettes from his bag and put them into his pocket. He then left the worksite and he did smoke one or more of the cigarettes at a location away from the workplace. 4 The applicant has asserted that his conduct involving the possession of cigarettes at the workplace did not represent gross and wilful misconduct sufficient to justify his summary dismissal. The applicant has claimed that he was unfairly dismissed and he seeks that the Commission Order his reinstatement to his former position. THE PROCEEDINGS 5 On 5 August 2004, solicitors acting on behalf of the applicant filed a claim for unfair dismissal. The claim was made pursuant to section 84 of the Industrial Relations Act 1996 [NSW], (the Act). Following unsuccessful attempts at reaching conciliated settlement of the claim, the matter proceeded to Hearing conducted on 23 November 2004 and 7 April 2005. 6 The Hearing included the taking of evidence from a total of four witnesses. The applicant was the only witness called in support of his claim. There were three witnesses called to provide evidence on behalf of the employer. Although the evidence disclosed various matters of factual conflict, there was a broad consistency in respect to the circumstances that were central to the applicant's alleged misconduct which gave rise to his dismissal. 7 All of the witnesses endeavoured to provide truthful evidence. I record no adverse findings as to the credit of any of the witnesses. The inconsistency or incongruity that can be identified in respect of some of the testimony can be attributed to different, but genuinely held, recollections of the particular events. 8 The most notable feature of the evidence was the absence of the employer's General Manager, Mr Steve Lester. Mr Lester was the decision-maker that instructed the Operations Manager to dismiss the applicant. Mr Lester was also responsible for the unilateral introduction of the employer's policy involving total prohibition upon possession of cigarettes in the workplace. It was therefore very surprising that Mr Lester was not called to provide any evidence. THE CASE FOR THE APPLICANT 9 At the Hearing the applicant was represented by Mr A Britt, a barrister. Mr Britt made extensive and detailed submissions. 10 Mr Britt's submissions commenced with a reference to what was said to be a line of Authority relating to the onus of proof in summary dismissal cases. Mr Britt submitted that the onus was on the employer to prove that the applicant was guilty of serious and wilful misconduct. 11 Mr Britt then made detailed submissions about aspects of the testimony provided by the applicant as compared with that provided by the various witnesses for the employer. Mr Britt then submitted that in the absence of the decision-maker, Mr Lester, the Commission could not properly conclude that the applicant was guilty of serious and wilful misconduct such as to justify his summary dismissal. 12 Mr Britt made further submissions which indicated that the applicant's employment history was good. Mr Britt said that during the applicant's period of employment he had never received any warnings or cautions regarding work performance or breaches of company policy. Mr Britt said that the incident involving the applicant taking cigarettes from a bag and putting them into his pocket was done openly in front of supervisors and others. Mr Britt said that this action could not be construed as the actions of a person that was deliberately breaching some understood policy about prohibition regarding cigarettes in the workplace. Mr Britt said that the applicant was acting openly and that this supported the applicant's assertion that he was not aware of the employer's stringency regarding prohibition of cigarettes in the workplace. 13 Mr Britt made further submissions which dealt with the alleged breach by the employer of its own stated, discipline policy. In this respect Mr Britt said that the employer had a documented disciplinary policy which mentioned a series of steps and warnings in circumstances where an employee was found to be in breach of a company policy. Mr Britt said that the employer did not follow this established policy but instead went straight to summary dismissal, an action taken in breach of its own disciplinary policy. 14 Mr Britt also made submissions which strongly criticised the employer's policy regarding total prohibition on cigarettes in the workplace. Mr Britt drew the Commission's attention to examples of absurd aspects of potential application of the policy. Mr Britt provided an example whereby if an employee had picked up a discarded cigarette found in the workplace the stringency of the policy would see such an innocent action resulting in summary dismissal. Mr Britt said that the employer's policy was akin to having a policy that said that a person could not enter the premises whilst in possession of a fifty dollar note. Therefore Mr Britt said that the employer's policy was not reasonable. 15 Mr Britt made further submissions which criticised the procedure that the employer had adopted when dealing with the dismissal of the applicant. Mr Britt said that the meeting that was held on the day following the incident of alleged misconduct, was nothing more than a "play act". Mr Britt said the employer's process was a charade that was designed to provide the appearance of an opportunity for the applicant to be heard about the incident concerning possession of cigarettes. Mr Britt said that the employer's mind had been made up before the meeting and therefore there was no practical purpose served in the holding of a meeting when the matter had already been decided. 16 Mr Britt submitted that the Commission should find that the termination of the applicant was harsh, unjust and unfair and that the applicant sought the primary remedy of reinstatement. In this respect Mr Britt submitted that there was no evidence before the Commission that could establish that reinstatement of the applicant was impracticable. THE CASE FOR THE EMPLOYER 17 The employer was represented by Mr J Law, agent. Mr Law commenced his submissions by stating that the employer had adopted the right procedures and had come up with the correct result by way of termination of the applicant's employment. 18 Mr Law said that the applicant had knowingly flouted the stated policy of the employer regarding prohibition of cigarettes in the workplace. Mr Law said the employer had a duty of care to employees and that as a result of a fire that had occurred at the employer's premises, the policy of prohibition of cigarettes in the workplace was a proper and reasonable step taken so as to discharge the responsibility that the employer had to all its employees. 19 Mr Law submitted that the applicant was aware of the employer's policy regarding prohibition of cigarettes in the workplace. Mr Law said that the applicant must have been aware of the policy because of the significant amount of signage at the workplace which mentioned the policy of prohibition of cigarettes. Mr Law said that the applicant had deliberately flouted the reasonable instruction of the employer. 20 Mr Law said the applicant had deliberately contravened the policy regarding cigarettes in the workplace on at least two occasions in that he had taken cigarettes onto site on the morning of 14 July, then taken them off site at lunch time in order to smoke one or more of the cigarettes, and then he returned later that day with cigarettes again. Mr Law said that the actions of the applicant were therefore intolerable and represented misconduct that justified the decision to dismiss. 21 Mr Law made further submissions regarding the question of impracticality regarding reinstatement. Mr Law said that the employment relationship had broken down and that there could be no re-establishment of the employment relationship. Mr Law reiterated his submission that the application should be dismissed as the employer's actions were not unfair. CONSIDERATION 22 The determination of this matter may have been reasonably predictable. Summary dismissal for one incident involving possession of cigarettes in the workplace even if contrary to the stated and understood policy of the employer, would be very unlikely to represent gross and wilful misconduct which could justify summary dismissal. 23 The employer introduced the policy involving total prohibition of cigarettes in the workplace as an over-reaction to a fire that had apparently been started by smouldering cigarettes. The smouldering cigarettes appeared to have been discarded into a electrical wiring chute as a means to hide evidence of smoking, which had presumably occurred in a part of the workplace that was designated as a non-smoking area. The fact that the employees were endeavouring to conceal evidence of the smoking by discarding the cigarettes in this fashion created the probable cause of the fire. This demonstrated that in addition to the addictive characteristics of nicotine, workplace policies requiring behavioural alteration of employees are unlikely to be successful unless established by way of some consultative process. 24 After the fire the more stringent policy regarding total prohibition of cigarettes in the workplace was introduced by decree from the General Manager without any consultation with employees or their representatives. The process of endeavouring to modify workplace behaviour by issue of decree will almost always fail and particularly so in circumstances where addiction to a substance such as nicotine is involved. Any employer who introduces policies, practices or directions by decree and without proper consultation will likely fail to have such measures observed or implemented as desired. 25 Notwithstanding that the prohibition on cigarettes in the workplace policy was unreasonable and introduced without any consultation, it was also not directly conveyed to the applicant. The applicant was absent from work at the time at which the decree regarding the policy was announced and distributed to the employees. Although the applicant would have seen the various signs in the workplace stating things such as; "THIS RULE IS ABSOLUTE" and; "THERE IS NO TOLERANCE"; these words have little meaning unless they are read in conjunction with the memo that was issued by the General Manager. 26 As was demonstrated by various examples raised during the proceedings, the rigidity of this policy was plainly absurd. Even a cursory examination revealed various practical difficulties regarding the apparent observation of the stated policy. There was therefore every justification for the applicant to have assumed that he was not seriously in breach of the policy when he was taking his cigarettes out of his bag, putting them in his pocket, and leaving the worksite to go and have a smoke. The applicant was certainly not conducting himself in a way that would directly attack the employment relationship. 27 The decision to dismiss the applicant was taken by the General Manager without hearing from the applicant. The subordinate managers then followed a process that appeared to provide for some opportunity for the applicant to make out a defence or offer an explanation. As the decision to dismiss had already been taken this process was nothing more than "going through the motions" of procedural fairness. In reality the General Manager, Mr Lester denied the applicant procedural fairness when he made the decision to dismiss before giving the applicant an opportunity to be heard. CONCLUSIONS 28 In this case the summary dismissal of the applicant occurred as a result of behaviour that the employer described as "wilful misconduct which results in immediate dismissal". This alleged misconduct involved bringing cigarettes onto the workplace. The employer had established a policy that attempted to totally prohibit possession of cigarettes in the workplace. This policy was introduced without consultation and without direct advice to the applicant. The policy is plainly impracticable, unrealistic and unreasonable. 29 The applicant admitted to breach of the policy but could not reasonably be held to have misconducted himself in a deliberate and wilful fashion such as to justify his summary dismissal. The applicant was also denied proper procedure when the decision to dismiss was taken before he had been given any opportunity to offer any explanation or make out a defence regarding his alleged misconduct. 30 Therefore the dismissal of the applicant was harsh, unreasonable and unjust. 31 The applicant has sought reinstatement as remedy for his unfair dismissal. There was no evidence to establish any impracticality in respect to reinstatement of the applicant. Therefore the Commission is prepared to provide for reinstatement and appropriate, associated Orders. ORDERS In this matter, for the reasons outlined herein, I have determined that the dismissal of the applicant was harsh, unreasonable and unjust and I hereby make the following Orders: ORDER 1 . The Commission Orders, pursuant to section 89(1) of the Act, that the employer reinstate the applicant to his former position on terms not less favourable to the applicant than those that would have been applicable if the applicant had not been dismissed. The applicant is to be reinstated as soon as practicable, and within 21 days from the date of this Decision. ORDER 2. The Commission Orders, pursuant to section 89(3) of the Act, that the employer pay to the applicant an amount which equates with the remuneration that the applicant would, but for being dismissed, have received in the intervening period between dismissal and reinstatement, less any amounts that the applicant received as payment for remuneration from alternative employment in that period between dismissal and reinstatement. This amount is to be paid to the applicant as soon as practicable, and within 21 days from the date of this Decision, unless dispute arises about the amount that is to be so paid, in which case Settlement of Minutes of Order proceedings will be held upon the written request of either Party, such request having been made within 28 days from the date of this Decision. ORDER 3. The Commission Orders, pursuant to section 89(4) of the Act, that the period of employment of the applicant with the employer shall be taken not to have been broken by the dismissal. The intervening period between dismissal and reinstatement of the applicant shall be counted for all purposes as a period of employment. oooOooo 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.