Industrial Relations Commission of New South Wales CITATION: Gilmour -v- George Weston Foods [2006] NSWIRComm 1081 NOTIFIER Liquor, Hospitality and Miscellaneous Union, New South Wales Branch PARTIES: APPLICANT Ian Gilmour RESPONDENT George Weston Foods Ltd Trading As Tip Top Bakeries FILE NUMBER(S): 5092; 6169 of 2005 CORAM: Cambridge C CATCHWORDS: Industrial dispute - unfair dismissal - demotion - motor vehicle accident - indefinite demotion - good employment record - dismissal held as harsh and unreasonable - reinstatement Ordered. LEGISLATION CITED: Industrial Relations Act 1996 [NSW] CASES CITED: Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Another, Full Court of Supreme Court of South Australia, [Doyle CJ, Bleby and Martin JJ], 90IR, 211. Clark v Pittwater RSL Club Limited, Full Commission of Industrial Relations Commission of NSW, [Wright P, Marks J & McLeay C], 84IR @ 309. HEARING DATES: 07/04/06 DATE OF JUDGMENT: 05/18/2006 NOTIFIER/APPLICANT Mr M Vance LEGAL REPRESENTATIVES: RESPONDENT Mr T Samios DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 18 May 2006 Matter No IRC 5092 of 2005 Notification under section 130 by Liquor, Hospitality and Miscellaneous Union, New South Wales Branch of a dispute with George Weston Foods Ltd Trading As Tip Top Bakeries re alleged unfair demotion of driver - Orange. Matter No IRC 6169 of 2005 Ian Gilmour -v- George Weston Foods Ltd Trading As Tip Top Bakeries Application by Liquor, Hospitality and Miscellaneous Union, New South Wales Branch on behalf of its member Ian Gilmour re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996. DECISION [2006] NSWIRComm 1081 1 This Decision involves two separate matters that relate to the same events concerning the employment of Ian Gilmour, (the applicant), with George Weston Foods Ltd trading as Tip Top Bakeries, (the employer). 2 The first matter (IRC 2005/5092) was commenced on 30 September 2005, when the Liquor Hospitality and Miscellaneous Union, New South Wales Branch (LHMWU), made a notification of industrial dispute pursuant to section 130 of the Industrial Relations Act 1996 [NSW], (the Act). The subject matter of the industrial dispute involved the alleged unfair demotion of the applicant. 3 The Commission unsuccessfully attempted to resolve the industrial dispute issues by way of conciliation. In the absence of any resolution of the industrial dispute issues, the LHMWU subsequently filed an application alleging unfair dismissal (IRC 2005/6169). The unfair dismissal application concerned the alleged unfair demotion of the applicant on or about 9 September 2005. 4 Following the filing of the unfair dismissal claim both matters have proceeded together. The matters were the subject of Arbitration proceedings conducted on 7 April 2006, in Bathurst. BACKGROUND 5 The applicant is a man who was some 52 years of age at the time of his alleged unfair demotion/dismissal. The applicant had worked for the employer for over twenty years. The applicant worked as a Truck Driver based at the employer's Bakery located in Orange. Throughout the entire period of the applicant's employment he worked as a Truck Driver. In September of 2005, he was driving one of the employer's rigid, dual axle, ten tonne trucks. 6 The applicant worked a rostered night shift commencing on the evening of 4 September 2005, and finishing on the following morning, 5 September. At approximately 7.20 am on 5 September, the applicant had completed his truck driving work and returned in the truck to the Orange depot. When the applicant drove up to the allocated parking area for his truck he noticed some green coloured liquid on the ground. He was immediately concerned that the liquid may have been engine coolant that had leaked from his vehicle. He stopped the truck and got out to inspect the liquid on the ground. 7 The applicant satisfied himself that the liquid on the ground was not coolant that had been discharged from his truck and he then closed the driveway gates as was his usual practice. When he walked from the gates back towards his truck he realised that he had switched the truck engine off in his haste to inspect the liquid on the ground. 8 The truck has a turbocharged engine so the applicant usually leaves the engine idling for several minutes after finishing his driving duties to allow the turbocharger to cool down. The applicant then walked to the door of the truck and reached into the cabin to restart the engine to let the turbocharger cool down. (Although it is questionable as to whether any detrimental effect associated with the initial shut down of the "hot" turbocharger would be rectified by an engine restart.) Unfortunately the applicant had left the truck in gear and without the handbrake being applied. Consequently, as the applicant turned the key to restart the engine, the truck moved forward and crashed into an awning attached to a nearby building. The truck also collided with a parked motorbike that was in the pathway of the truck. 9 The truck was extensively damaged, the awning was badly broken, and the motorbike also suffered some damage. The cost of repair of the damaged vehicles and building structures appeared to have amounted to something in the vicinity of $32,000 to $45,000. The applicant was physically unharmed but was shocked and shaken by the accident. 10 Following some investigation into the details of the accident the employer issued the applicant with a document entitled "Final Written Warning re: Gross Negligent action". This document advised that the employer had decided to withdraw any further truck driving duties and instead engage the applicant in alternative work in the Bakery. 11 The applicant was from that point forward, removed from truck driving work and eventually reallocated duties in the Bakery that involved packing, loading and unloading of products including the driving of a fork-lift vehicle on a regular basis. 12 The applicant asserted that the employer's decision to withdraw his truck driving duties and reassign him to the packing, loading and unloading duties, has represented his unfair dismissal. The applicant has sought that the Commission re-instate his truck driving duties and provide payment of lost wages associated with the loss of the truck driving work. THE EVIDENCE 13 There were very few factual conflicts that arose from the evidence in this case. Generally the evidence about the truck accident of 5 September was undisputed. There were some minor issues of conflict relating to details of the actions surrounding the employer's subsequent investigation of the truck accident. However these were not matters of such significance as being capable of alteration to the primary determination that the Commission has been required to make. 14 The applicant was the only witness called in support of his claim. The applicant presented his evidence in an open, sincere and entirely believable manner. The applicant had clearly been upset by the accident and the consequences which involved his reassignment to the packing, loading and unloading position in the Bakery. 15 The applicant acknowledged that he had made significant errors when he attempted to restart the truck whilst standing next to the driver's door, and without ensuring that the truck was not in gear. The applicant could offer no explanation for these significant errors. Further, the applicant accepted that his actions should be subject to some form of discipline and/or punishment. However the applicant said that he believed that the indefinite demotion was excessive and harsh in relation to his genuine and admitted error. 16 The employer called three witnesses to provide oral testimony in elaboration of sworn statements. The substantial evidentiary material was provided by Mr David Dalgleish, the General Manager for Orange and Canberra operations of the employer. Mr Dalgleish was the relevant Manager who made the decision to remove the applicant from the Truck Driving position. Mr Dalgleish provided sincere and believable evidence about his reaction to the nature of the truck accident of 5 September 2005. Mr Dalgleish initially contemplated the termination of employment of the applicant but upon reflection decided that demotion was more appropriate. 17 Further evidence for the employer was provided by Mr Terrance Fitzgerald, the employer's Supply Chain Manager at Orange. Mr Fitzgerald was a particularly impressive witness who was commendably frank with his testimony. The final witness called for the employer was Mr Bernard Schell, the employer's Safety Co-ordinator. As with all witnesses, the testimony provided by Mr Schell was sincere and believable. THE CASE FOR THE APPLICANT 18 The applicant was represented by Mr M Vance from the LHMWU. Mr Vance made extensive submissions which commenced by reference to various decided cases. Mr Vance referred to various cases that he said provided for the demotion of the applicant to be properly construed as a dismissal for the purposes of Part 6 of Chapter 2 of the Act. 19 Mr Vance submitted that although the applicant continued in an employment relationship with the employer, he steadfastly objected to the terms and conditions of the demoted position. Mr Vance said that because of the applicant's age and his location in a regional area, he had little real option but to accept the alternative demoted position which was on terms that were significantly inferior to his previous employment. Mr Vance submitted that in these circumstances the Commission should be satisfied that the demotion of the applicant represented a dismissal for relevant purposes. 20 Mr Vance continued his submissions by referring to various other cases that involved employees who had been dismissed in circumstances that involved motor vehicle accidents of one form or another. Mr Vance submitted that the various decided cases involving other motor vehicle accidents that led to dismissal, could be compared with the applicant's motor vehicle accident of 5 September 2005. Mr Vance elaborated upon various other recorded motor vehicle incidents that had involved employees of the employer and which did not lead to the punishment that had been provided to the applicant in this instance. 21 Mr Vance made further submissions which criticised the employer's process that was followed in deciding to demote the applicant. In this respect Mr Vance criticised that Mr Dalgleish had made the decision to demote the applicant without providing the applicant with an opportunity to be heard or offer explanation. Mr Vance submitted that it was unreasonable to take the decision to demote the applicant without first providing the applicant with an opportunity to be heard regarding the matter. 22 Mr Vance then submitted that it was the LHMWU view that the Commission now lacked jurisdiction to deal with the section 130 industrial dispute matter as a consequence of recently enacted Federal Legislation (WorkChoices). Mr Vance submitted that the section 130 proceedings were concluded via a lack of jurisdiction. Mr Vance then submitted that the applicant sought Relief via reinstatement pursuant to section 89 of the Act. 23 Mr Vance submitted that the demotion of the applicant represented a dismissal and that dismissal was harsh, unreasonable and unjust. Mr Vance said that the employer had found that the applicant was guilty of gross negligent action. However, according to the submissions made by Mr Vance, the Commission should reject that the applicant was guilty of any such gross negligent action. Mr Vance said that the applicant was clearly in error but that he was not acting in a grossly negligent manner when he attempted to start the truck which had been left in gear. 24 Further, Mr Vance submitted that the dismissal of the applicant was unreasonable because the employer should not have lost confidence in the applicant's driving ability. Mr Vance said that the applicant had an unblemished employment and driving record and the punishment that had been applied in these circumstances was disproportionate to the gravity of the misconduct that the applicant had admitted to. 25 Mr Vance submitted that the Commission should conclude that, in the circumstances, the applicant's unfair dismissal should be remedied by Orders to provide for the reinstatement of the applicant together with Orders for payment of lost remuneration. THE CASE FOR THE EMPLOYER 26 The employer was represented by Mr T Samios. Mr Samios commenced his submissions by indicating that the employer believed that the applicant had been demoted and that there was not any dismissal. 27 Mr Samios made further submissions about the nature of the incident and the actions of the applicant that caused the truck accident. Mr Samios stressed that the applicant had made two fundamental mistakes that were almost unbelievable. Mr Samios said that the applicant had failed to apply the handbrake to the vehicle and then had attempted to start the vehicle whilst standing adjacent to the driver's side door of the truck. Mr Samios said that these two instances of negligence were appropriately established by the employer as acts of gross negligence that would justify the demotion. Mr Samios submitted that the employer's punishment was suitable for the "crime" that the applicant had committed. 28 Mr Samios made further submissions which recounted a process that he described as co-operation with the Union in dealing with the issue. In this respect Mr Samios mentioned that the employer had engaged an independent authority to review the circumstances of the accident and make appropriate findings about the nature of the incident. Mr Samios submitted that it was without question an incident that was severe, and categorised as high risk. In these circumstances Mr Samios submitted that the employer was entitled and indeed obliged, to take appropriate steps to ensure that there could be no repeat of a high risk incident such as that which had occurred on 5 September 2005. 29 Mr Samios stressed that the employer believed that the punishment that had been decided upon was appropriate and reasonable in the circumstances. Mr Samios submitted that the employer had properly considered the nature of the incident and on balance, had regard for the good employment record of the applicant. Mr Samios urged the Commission to reject the Orders that were sought by the LHMWU on behalf of the applicant, and to reaffirm the employer's decision that the demotion of the applicant should remain in place. CONSIDERATION Demotion as Dismissal 30 The first aspect for consideration in this case involves the question of whether the applicant's demotion could constitute a dismissal for the purposes of Part 6 of Chapter 2 of the Act. This is an interesting aspect of employment law. There is clear Authority that establishes that in the context of a Statute such as section 84(1) of the Act, a non-consensual demotion of an employee may constitute a dismissal. As a question of law, it is established that even if the employment continues, it does not follow that there could not have been a dismissal. 31 Authority for this proposition was established by way of the Judgement of the Full Court of the Supreme Court of South Australia in the case of Advertiser Newspapers P/L -v- IRC of SA and Grivell (Grivell). The reasons for Judgement as provided by his Honour Mr Justice Bleby in this case are worthy of detailed examination and the following extract is particularly relevant: "However, that begs the question as to what "dismissal" means other than that there has been some form of sending away from employment. However, that does not necessarily mean that there must have been no subsequent employment at all. It might merely mean that there has been no employment under the contract of employment from which the employee was dismissed." Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Another , Full Court of Supreme Court of South Australia, [Doyle CJ, Bleby and Martin JJ], 90IR, 211 @ 222. 32 Further important Authority has been established by a Full Bench of this Commission which held that a dismissal may occur in circumstances where an employer unilaterally seeks to vary specific terms of the employment, and permit the employment to continue on such changed terms, rather than to terminate the employment. 33 The consequential issue that requires detailed examination involves the nature of the changes that are made to the employment. In particular it is necessary to examine whether the nature of the changes could be reasonably comprehended as either explicit or implied terms of the contract of employment. 34 In many instances the terms of an Award or Agreement that provides definitions for particular classifications may be sufficiently broad to comprehend a range of different duties and functions. If the terms of the contract of employment, both specified and implied, comprehend the nature of the changed circumstances that were instituted by the employer, it would seem that no dismissal could be established. However, if the changes to the employment were not comprehended by the contract of employment, then a dismissal may be established to have occurred even if the employee remained in employment. 35 Consequently there is a requirement to carefully analyse the terms of the employment so as to establish whether or not the changed terms could be held to have represented a dismissal. In the Full Bench Decision in Clarke -v- Pittwater RSL Club Limited, the following extract examines this analysis: "In determining whether or not there has been a dismissal from employment it is necessary to determine what that employment is. The evidence before the Commissioner was to the effect that the appellant at all times was employed as a receptionist/door person. There is no evidence that he was employed to carry out any other duties, that there was a contractual requirement to carry out any other duties or that any applicable award provision permitted the Club to unilaterally vary the incidents of employment. In these circumstances the employment of the appellant was as a receptionist/doorperson. We distinguish, by way of example, circumstances where the appellant may have been employed by the respondent to perform certain duties or any other duties that the employer might require the employee to carry out from time to time, or where the employer has similar rights pursuant to an award provision. The determination or variation of the "employment" of the appellant in those hypothetical circumstances would require a different consideration and may result in a different answer." Clark v Pittwater RSL Club Limited , Full Commission of Industrial Relations Commission of NSW, [Wright P, Marks J and McLeay C], 84IR, 309 @ 311. 36 In the present circumstances the applicant had always worked as a Truck Driver and his demotion to the packing and loading work represented a significant change to the terms and conditions of the employment. The change not only included a reduction in weekly remuneration of about $129.00, but also involved a different work environment, different duties and different hours of work. These are significant changes which the applicant objected to as providing for any permanent alteration to his employment. 37 Upon careful analysis, the unilateral, contested, variation to the applicant's terms and conditions of employment that were attached to his reassignment into the packing, unloading and loading position, constitute a dismissal for the purposes of section 84(1) of the Act. The Truck Accident 38 There could be little doubt that the applicant's actions in endeavouring to start the truck whilst standing by the cabin door represented negligence. The applicant's undisputed negligence on the morning of 5 September 2005, is unexplained. However these actions were certainly not intentional. As the evidence revealed, the applicant was lucky that he did not injure himself in the process of endeavouring to start the truck whilst standing alongside the open door. 39 The evidence established that the applicant mistakenly believed that he had followed his usual procedure when bringing the truck to a stop. That is, he thought that he had applied the "maxi-brake" and taken the truck out of gear. However for some unknown reason instead of applying the "maxi-brake" he left the truck in gear and switched the engine off. Switching the engine off was an action that was contrary to his usual practice of allowing the motor to idle for some minutes to let the turbocharger cool down. It seemed that the applicant may have switched the engine off, contrary to his usual practice, as reaction to seeing the liquid on the ground. 40 In retrospect, switching off the engine would have little logical benefit if the motor had been running for several hours beforehand with the coolant having been depleted. However, the applicant's departure from his usual routine of allowing the engine to idle for a few minutes started a chain of events that led to the unfortunate accident. 41 If the applicant had followed his usual procedure and allowed the engine to continue to idle, he would have had to ensure that the "maxi-brake" had been applied and he certainly would not have been endeavouring to restart the engine. Consequently the only possible reason for the applicant not following his usual procedure was the concern that he had for the liquid that he said he saw on the ground. Although upon reflection, it does not make sense to turn the engine off because he saw the liquid on the ground, it may have just been an instinctive reaction, perhaps something that was more sub-conscious than a considered response to seeing the liquid on the ground. Punishment Without End 42 As was well explained by Mr Dalgleish, whatever the applicant may have been concerned about could not justify his action in endeavouring to re-start the truck whilst standing on the ground. This is a fundamental error that would give obvious concern to any employer. To his credit the applicant has acknowledged and accepted that he has made a significant error, and that some form of discipline or punishment would be appropriate. However the applicant has in large part, protested at the "open-ended sentence" that the employer has determined as his punishment. 43 In circumstances where an employee has had twenty years of unblemished employment, the applicant has been understandably aggrieved by a punishment that provides no identified prospect of ever finishing. Although the Commission can readily appreciate the concern that the employer would have with the nature of the truck accident incident, a punishment with no perceivable end is, when considered objectively, likely to be harsh. As the evidence from the employer's Manager, Mr Fitzgerald confirmed, there could be little doubt that the penalty must be held to be harsh in these circumstances. Consequently a case has been established to require the intervention of the Commission. 44 The negligent conduct of the applicant was very much out of character. The applicant has a very long and commendable employment driving record. The employer's initial disposition to terminate the employment of the applicant was changed after consideration of the applicant's employment and driving records. Therefore the employer's decision to adopt the alternative of demotion rather than termination could not be criticised except for the endless imposition of the penalty. 45 The employer's decision to remove the applicant from truck driving duties was appropriate and reasonable in the circumstances. However, it was harsh and unreasonable for the employer to provide no prospect for the applicant to return to truck driving duties. 46 The employer does have genuine and legitimate concerns regarding the applicant's capacity to safely perform truck driving duties. However, it is relevant to note that the alternative demoted position involves the applicant regularly driving a fork-lift vehicle. Although the safety concerns may not be of the same magnitude, there would still be potential for the same safety concerns that exist in respect of the applicant performing truck driving duties to be associated with the driving of the fork-lift vehicle on a regular basis. Therefore there seems to be, to some extent, an inconsistency in the employer's approach to dealing with the perceived safety concerns relating to the applicant. 47 This inconsistency together with the harshness of an endless punishment, provides adequate basis for the Commission to determine that it would be appropriate to return the applicant to truck driving duties albeit under certain conditions involving a process of formal performance review. 48 The return to truck driving duties after a considerable period of absence needs to be carefully managed and should not be construed as permanent such that there could be no contemplation of removal from truck driving duties. The reinstatement of the applicant to his previous truck driving position is to be made conditional upon three and six monthly performance reviews at which time the employer may decide to remove the applicant from the truck driving position if there are identified actual performance and/or conduct deficiencies. 49 If such performance review process leads to the removal of the applicant from the truck driving position, the applicant and the LHMWU on his behalf, will be provided opportunity to have the performance review decision subject to further determination by this Commission. Following the successful completion of the six monthly performance review the ordinary and established processes will apply to the ongoing engagement of the applicant in the truck driving position. CONCLUSIONS 50 These matters have involved the contested demotion of an employee following an unfortunate workplace accident. The actions of the employee regarding the accident were clearly negligent. However these negligent actions were not wilful and the employee has a very long and commendable employment record. In such circumstances the employer's decision to remove the applicant from his truck driving duties was reasonable and appropriate except that it provided for no prospect of return to the truck driving duties. The endless characteristic of the penalty that was provided to the employee was harsh and unreasonable in the circumstances. 51 The alteration to the employment that occurred with the demotion amounted to a dismissal from the truck driving position. The employee therefore has access to the provisions of Part 6 of Chapter 2 of the Act. 52 Following a detailed examination of all of the evidence regarding the workplace accident, and having regard for the alternative position that the employee was directed into together with the employee's long and commendable employment and driving record, proper basis has been established for the intervention of the Commission. 53 The prospect for a successful return of the applicant to the Truck Driver position has been greatly enhanced by the laudable attitude displayed by both the applicant and the relevant managers of the employer including those who gave evidence as well as others involved throughout the proceedings. It was heartening to observe the mutual respect that was displayed between employee and employer in this case. The difficulties that have arisen from the truck accident and the applicant's subsequent demotion, have been dealt with by the Parties in a mature, sensible application of proper process which should be recognised and commended. 54 The Commission has Determined that the applicant should be reinstated into the Truck Driver position that he had occupied for more than twenty years. The reinstatement to the Truck Driver position will be subject to three and six monthly reviews. The Commission decides to refrain from making any Orders in respect of remuneration regarding the intervening period between dismissal and reinstatement. ORDERS In these matters, the Commission has Determined that the dismissal of the applicant was harsh and unreasonable and Orders as follows: 1. The Commission Orders, pursuant to section 89(1) of the Act, that the employer reinstate the applicant to his former position as a Truck Driver. The applicant is to be reinstated as soon as practicable and within fourteen days from the date of this Decision. 2. The reinstatement of the applicant as provided for in Order 1 above, is to be subject to three and six monthly reviews. The employer is required to formally review the truck driving performance of the applicant and identify any performance and/or conduct deficiencies. If the employer identifies performance deficiencies during the review process, and decides, at any time during the six months after reinstatement, to remove the applicant from the truck driving duties, either Party shall have liberty to approach the Commission to have the employer's determination subject to further review by the Commission. oooOOOooo 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.