Industrial Relations Commission of New South Wales CITATION: Carlton and United Beverages Limited v Phillip Brunt [2005] NSWIRComm 338 APPELLANT: Carlton and United Beverages Limited PARTIES: RESPONDENT: Phillip Brunt FILE NUMBER(S): IRC 4689 of 2005 CORAM: Schmidt J CATCHWORDS: Stay of Proceedings - appeal - application for leave to appeal and appeal - stay application - stay sought pending hearing of the appeal - order of re-employment after summarily dismissal for misconduct - appeal raises construction of section 89(2) where order removes 60% of pre-existing duties - questions raised in relation to the order under section 89(3) - onus met by appellant for stay - stay granted LEGISLATION CITED: Industrial Relations Act 1996 HEARING DATES: 09/16/2005 DATE OF JUDGMENT: 09/19/2005 APPELLANT: Mr A Moses of counsel EMPLOYERS FIRST LEGAL REPRESENTATIVES: RESPONDENT: Mr S Prince of counsel SOLICITORS: Szekely & Associates JUDGMENT: - 7 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Schmidt J 19 September 2005 Matter No IRC 4689 of 2005 CARLTON AND UNITED BEVERAGES LIMITED & PHILLIP BRUNT Application by Carlton and United Beverages Limited for leave to appeal and appeal against the Decision of Commissioner Macdonald given on 26.8.2005 in matter no. IRC 175 of 2005 DECISION [2005] NSWIRComm 338 1 On 7 September 2005, Carlton and United Beverages Limited ('Carlton'), filed an appeal against a decision given by Commissioner Macdonald on 26 August 2005, ordering the re-employment of Mr Brunt on and from that date. The orders have not been complied with and Carlton seeks a stay of the Commissioner's decision, pending the hearing of the appeal. 2 The parties were unable to reach an agreement in relation to the stay sought. This judgment deals with the question of stay. 3 The Commissioner ordered Mr Brunt's reinstatement after he had been dismissed summarily for misconduct. There was no issue that Mr Brunt had taken and consumed a bottle of spirits while at work. Carlton took the view that the alcohol had been stolen and applied its policy in respect of unauthorised consumption of alcohol and theft. Those facts were not in issue, but the fairness of the decision was challenged. The Commissioner took the view that in coming to its decision, Carlton had ignored another of its applicable policies - the Employee Assistance policy - in circumstances where, on the evidence, Mr Brunt was stressed by having to perform certain occupational health and safety related duties and by an unsatisfactory relationship with his supervisor, which had led to his drinking problems. The Commissioner concluded that after 18 years' service, the dismissal was harsh. 4 Mr Brunt sought reinstatement or re-employment, but with the removal of his occupational health and safety duties, accepting that such an order would be made subject to a condition that he be given a final warning. The Commissioner concluded: 83 The Commission has before it an application by Mr Philip Brunt to be reinstated into his former employ. Having considered all of the evidence, the Commission has found the summary dismissal of the Applicant to be "harsh". The Commission has then had to consider the practicality of reinstatement. This is an issue because the Applicant seeks a qualified reinstatement that amounts to a re-employment. That is, the Applicant sought re-employment into his former position but without the occupational health and safety component that was part of his role. Mr Moses opposed such a re-employment application. He said that no evidence had been led from witnesses for the Respondent that such a position existed. He also made the point as to the practicality of reinstatement/re-employment by the Applicant who claimed that the stress at work caused his drinking problem. 84 Having considered the submissions, the Commission has decided to order the re-employment of the Applicant into the position he held at the time of his summary dismissal - but without his occupational health and safety duties. The Commission made an adverse finding about Mr Jagger's attitude towards the Applicant in respect of the working relationship between Mr Jagger and the Applicant at the occupational, health and safety meetings - that is, Mr Jagger belittled and denigrated the Applicant at these meetings. It was also held that there was a correlation between the Applicant's drinking problem and stress at work. Witnesses gave evidence of the Applicant's anxiety in the context of the Applicant's occupational, health and safety duties. Given the foregoing, it would be inappropriate (if not a breach of the Occupational Health and Safety Act), to order an employee to resume such duties which caused him stress (not of his own making) and contributed to his drinking problem. 85 The Commission turns to the issue of loss of earnings. It is the Commission's order that the Applicant be re-employed, without loss of earnings , as if there had been no termination of his employment. The Commission has had regard to the evidence of earnings gained by the Applicant, subsequent to dismissal, and certain statutory criteria under s89 of the Act, in coming to the foregoing order. 86 The Applicant's barrister made a submission that the Applicant be reinstated or re-employed with a final warning, which latter condition was, as the Commission understood it, in recognition of the Applicant's conduct - theft of company product and unauthorised consumption of alcohol. The Commission rejects that submission as being inappropriate under the circumstances. That the conduct took place, there is no dispute. But having considered the evidence as to the cause of the Applicant's drinking problem - the stress at work, the role of Mr Jagger in creating that stress, the failure of the Respondent to apply the EAP Policy, the Applicant's length of service and unblemished employment record - then that "final warning" is not appropriate. O R D E R S 87 The Commission hereby makes the following orders: (1) The Applicant (Mr Philip Brunt) is to be re-employed by CUB Limited into the position he held at the time of his summary dismissal, but without his occupational health and safety duties. (2) That the employment of the Applicant is to be taken not to have been broken by his dismissal. (3) CUB Limited is to pay the Applicant the sum of money (except for overtime) he would have earned, but for the dismissal. (4) That this Order shall take effect on and from 26 August, 2005. 5 The parties were agreed as to the applicable law. What must be considered when a stay is sought are matters such as whether the appellant has discharged the onus which falls upon it to demonstrate the need for the stay; what the balance of convenience requires, given the competing rights of the parties; whether there is a risk that the appeal will prove abortive or nugatory if the stay is not granted; whether, on the basis of a preliminary assessment, the appellant has an arguable case; and whether justice requires that terms be imposed, if the stay is granted. 6 Both parties led evidence. It was common ground that some 60% of Mr Brunt's former duties were the occupational health and safety work which the Commissioner ordered that he no longer be required to perform. The balance of his duties involved security and despatch work. No alteration in pay was ordered. Mr Cunneen gave evidence about some matters pertinent to the reinstatement order which were not led before the Commissioner. I have not taken them into account, given the concession that such evidence could have been brought at first instance. 7 It was also common ground that Mr Brunt obtained other employment in June and remains in that employment, albeit earning less than in his former position at Carlton. 8 Mr Brunt's evidence was that the failure to pay the arrears of remuneration which the Commissioner ordered, from the dismissal in December 2004, until the August judgment, caused him 'great financial strain' in responding to the appeal. There was no other evidence of financial hardship. 9 The case put for Carlton by Mr Moses of counsel was that the issues raised on the appeal went both to questions of fact and law. Carlton complained that the conclusion that the dismissal was harsh was reached by the Commissioner in circumstances where it was not only common ground that Mr Brunt had stolen alcohol and consumed it at work; in cross examination it had come to light that this had occurred on one other occasion. The Commissioner's conclusion that summary dismissal for misconduct in those circumstances, treatment similar to that given to another employee who had stolen alcohol, 'has something of the farce about it', was inexplicable. In coming to that conclusion the Commissioner had misunderstood the Employee Assistance policy - it could not act as a shield for the consequences of theft. 10 While not expressly dealt with by the Commissioner, it was submitted to be implicit in the orders made, that he had concluded that the primary remedy provided in s 89 of the Industrial Relations Act 1996 ('the Act'), reinstatement, was not practicable. No reasons for that conclusion were given. The Commissioner instead ordered re-employment, in circumstances where there was no evidence that the position the subject of the order was suitable or available. The result was that position was one required to be created by the order. The order had the effect of removing from Mr Brunt all of his duties in relation to occupational health and safety, some 60% of his work. There was no power to make such an order under s 89(2) of the Act. 11 The orders made raised the proper construction of s 89(2), in circumstances where the Commissioner had failed to adhere to binding authority. It was accepted that the relevant decisions had not been drawn to the Commissioner's attention, the argument having turned on whether such an order would be made in the absence of any evidence going to the availability and suitability of such a position. 12 The Commissioner had also ordered that Carlton pay Mr Brunt his salary, from the time of dismissal to reinstatement, without paying any regard to what he had earned in other employment in that period, as required by s 89(3). No reasons for that approach had been given. 13 All of these matters went to demonstrate that not only did Carlton have an arguable case on appeal, the balance of convenience favoured granting of the stay. It was accepted that conditions would be imposed as a matter of justice in the circumstances. Carlton suggested an order that it pay Mr Brunt the difference between his salary while in its employ and that being earned in his new employment, from the date of the reinstatement order to the date of the appeal judgment, given that he was ready, willing and able to perform work in the position the Commissioner had ordered be created. It accepted that even if the appeal succeeded, Mr Brunt ought not to be required to repay this sum. As to the order for the payment of moneys, no condition was proposed, but it was accepted that the Commission might order payment of part of the sum, subject to Mr Brunt being obliged to repay the money if the appeal succeeded, or that the moneys be held in an account, or that Carlton be required to pay interest on the sum, if the appeal failed. 14 For Mr Brunt, Mr Prince of counsel, complained that the orders had not been complied with before the appeal and application for stay were filed and argued that the notice of appeal disclosed that the appellant was simply disgruntled with the Commissioner's exercise of the discretion. There were no serious errors of law, or principle, raised by the appeal. The balance of convenience favoured the stay being refused. The applicant was entitled to the fruits of his victory. Returning to his employment was important to him, as was the money order, given that he had been out of work for six months and was now in less well paid employment. There was no evidence of real hardship caused to the respondent if reinstatement was ordered. Carlton had vigorously argued before the Commissioner that Mr Brunt would present a security risk if re-employed and this had been rejected comprehensively. 15 Carlton had not sought to expedite the appeal, which was unlikely to be heard this year. Delay would only prejudice Mr Brunt's reintegration into the workforce. Consideration 16 The ordinary starting point for consideration of any stay is that it is for the applicant for the stay to demonstrate why a stay should be granted in the particular circumstances which arise for consideration. I am satisfied that Carlton has met that onus in this case. The case had various unusual features, including the Commissioner's rejection of a condition proffered by Mr Brunt, that any order of reinstatement or re-employment should be subject to a final warning, in the circumstances of his admitted theft and consumption of alcohol at work. 17 An order of re-employment in a case of summary dismissal for misconduct, where theft of alcohol and its consumption at work were admitted, was of course, one available to the Commissioner, as a matter of discretion, even if the applicant revealed in his evidence that this had not occurred on only the one occasion, given the conclusion the Commissioner reached, that the dismissal was harsh in the circumstances. The Commissioner's conclusions rested on the approach adopted by Carlton to another of its policies, in circumstances where Mr Brunt was a very long serving employee. Carlton challenges the Commissioner's understanding of that policy and its application in the circumstances. 18 The appeal, however, raises both the question of whether the order of re-employment made by the Commissioner was within power, given the constraints imposed by s 89(2) and the alleged absence of evidence which could have provided the necessary foundation for the order and if within power, whether it should have been made on the evidence. The making of an order of re-employment which removes more than half of the duties of a position, is, it on its face an unusual order, particularly when it seems no attention was paid to what remuneration might be appropriate for a position with such radically altered duties. 19 The appeal also raises the question of the order made under s 89(3). It must be accepted that there is a paucity of reasons provided as to why in formulating the order, no account was taken of income earned in other employment, during the relevant period, as the section contemplates. 20 It follows that it cannot be concluded, as was argued for Mr Brunt, that the appeal involved nothing more than dissatisfaction with the Commissioner's exercise of discretion. It certainly cannot be concluded that it has no prospects of success. 21 Given the reasons for the summary dismissal, theft and drinking at work, Mr Brunt's evidence that this had occurred more than once, the concession that before the Commissioner there was a vigorous contest as to whether Mr Brunt would present a security risk and that the re-employment order returns him to despatch and security work, I am unable to conclude that the balance of convenience lies with refusing the stay. 22 It is also relevant that Mr Brunt is in other employment, albeit employment where he earns less than at Carlton. If the stay were refused and the appeal later successful, Mr Brunt would be left in the most regrettable position of having neither position. This is a matter which I accept requires consideration in addressing the question of the conditions which might accompany a stay. I accept Carlton's proposal in that respect. It was suggested for Mr Brunt that the difference to be paid should have regard to what Mr Brunt previously earned by way of overtime. Given the order made by the Commissioner - removal of some 60% of Mr Brunt's former work, I cannot accept that suggestion. Why overtime should be required in a job with such reduced duties, is not apparent. 23 As to the lump sum order, I take the view that Carlton should be required to pay Mr Brunt 50% of the sum ordered. If the appeal succeeds, that sum will be repayable. There was no suggestion that Mr Brunt would be unable to make such a repayment. If the appeal is not successful, Carlton will be required to pay the balance, plus interest at Supreme Court rates. 24 I am satisfied that these conditions will ensure justice between the parties, in the all of the circumstances revealed. Orders 25 For all of the reasons given, I order the stay of the Commissioner's decision, pending hearing of the appeal, subject to the following conditions: 1. Carlton is to pay Mr Brunt 50% of the money order made by the Commissioner. If the appeal succeeds, this sum is to be repaid. If the appeal fails, Carlton is to pay Mr Brunt interest on the other 50% of the money order made, at Supreme Court rates. 2. Carlton is to pay Mr Brunt the difference between his ordinary salary while formerly employed by Carlton and the salary Mr Brunt earns in his new employment, pending the determination of the appeal. This amount is not repayable, if the appeal fails. ------------------------ 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.