Industrial Relations Commission of New South Wales CITATION: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch v New South Wales Roads and Traffic Authority [2007] NSWIRComm 309 APPLICANT Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch PARTIES: RESPONDENT New South Wales Roads and Traffic Authority FILE NUMBER(S): 1156 of 2007 CORAM: Sams DP Industrial dispute - allegation of harassment of union delegate - private use of mobile phone - requirement to pay for private calls on mobile phone - RTA policies - whether employee aware of policy - warning letters - fact finding interview - direction to pay full amount owed - intervention of Union - negotiated schedule of payments - no agreement as to repayment schedule - whether direction of employer reasonable. CATCHWORDS: Held; what is reasonable cannot be determined in a vacuum - flexibility and patience of RTA management - employment covered by 'suite' of employment instruments - employee aware of policy and obligation to pay for private phone calls - little evidence of extent of financial circumstances - regular overtime - acceptance of employee's evidence of difficulty in paying higher amount - smaller amount not appropriate - new amount proposed - no orders made - liberty to apply. LEGISLATION CITED: Industrial Relations Act 1996 Antonic and Roads and Traffic Authority [2005] NSWIRComm 344 Australian Telecommunications Commission v Hart (1982) 65 FLR 41 Izdes v LG Bennett & Co Pty Ltd t/a Alba Industries (1995) 61 IR 439 Miller v University of New South Wales (2001) 110 IR 1 CASES CITED: Payne v NSW Roads and Traffic Authority [2007] NSWIRComm 256 Phillips v NSW Roads and Traffic Authority [2007] NSWIRComm 258 R v Darling Island Stevedoring and Lighterage Company Limited; Ex parte Halliday; Ex parte Sullivan (1938) 60 CLR 601 AWARD: Crown Employees (Roads and Traffic Authority of New South Wales - Wages Staff) Award 2005 HEARING DATES: 4 December 2007 DATE OF JUDGMENT: 14 December 2007 APPLICANT Mr A Walkaden Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch LEGAL REPRESENTATIVES: RESPONDENT Mr D Coates New South Wales Roads and Traffic Authority JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 14 December, 2007 Matter No IRC07/1156 Notification under section 130 by Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch of a dispute with Roads and Traffic Authority re discipline procedures DECISION [2007] NSWIRComm 309 BACKGROUND 1 On 16 July 2007, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ('the Union') notified the Commission of an industrial dispute pursuant to s 130 of the Industrial Relations Act 1996 ('the Act'). The dispute is with the Roads and Traffic Authority of New South Wales ('the RTA') and was expressed in the notification as "the incorrect and inappropriate use of discipline procedures". 2 When the dispute was first listed for compulsory conference on 17 July 2007, Mr I Morrison, for the Union, clarified the issue as one which involved an allegation of ongoing harassment by the RTA against the Union's delegate on the Sydney Harbour Bridge, Mr Craig Harper. A similar dispute had been earlier listed before McKenna C following a fact finding interview and a proposed disciplinary interview involving Mr Harper. In the proceedings before me, Mr Morrison said that Mr Harper had declined to attend the disciplinary interview, because he had nothing further to say and believed he had been vindicated in the fact finding interview. It is unnecessary to detail all the specific allegations against Mr Harper as these, for the most part, were dealt with and resolved following the compulsory conference proceedings. One matter remained outstanding. 3 The subject matter of this decision concerns that one outstanding issue. It relates to Mr Harper's alleged improper use of an RTA supplied mobile phone and the consequences flowing therefrom. It is the RTA's policy, (about which Mr Harper said he was unaware), that for each monthly billing period an employee is required to pay for all private calls on an RTA supplied mobile in excess of $10.00 per month. For some two years, Mr Harper accrued a debt to the RTA of $734.26. This total amount was agreed between the parties. 4 On 10 September 2007, when Mr Harper was directed to pay the full amount, the Union intervened on his behalf in an effort to arrange a repayment of the debt by instalments. The RTA proposed a repayment schedule over six months ($56.47 per fortnight), while Mr Harper claimed that this was too onerous and proposed repayments of $20.00 per fortnight, meaning that full repayment would take 17 months. 5 On 27 September 2007, the RTA directed Mr Harper to pay the amount of $56.47 per fortnight and said that a failure to do so may result in further disciplinary action. This prompted the Union to request that the matter be re-listed. Following a further unsuccessful compulsory conference on 9 November 2007, the Commission issued a certificate of attempted conciliation, pursuant to s 135 of the Act, and set the matter for arbitration. 6 The question for determination by the Commission is whether the decision of the RTA to require Mr Harper to repay $56.47 per fortnight constitutes a reasonable direction of the employer. THE EVIDENCE For the Union 7 Most of the relevant factual matters are not in contest. 8 Mr Craig Harper has been a Team Leader, Boilermaker for five years employed under the Crown Employees (Roads and Traffic Authority of New South Wales - Wages Staff) Award 2005 on the Sydney Harbour Bridge. He has worked for the RTA for 10 years. Mr Harper deposed that he was unaware of any award provision which permitted the RTA to deduct monies from his pay without his consent. 9 Mr Harper was issued with a mobile phone on 4 March 2005. He claimed that he was not provided with the RTA's policy at that time, and was only given a copy of the policy some time after 11 October 2006. 10 Around 11 October 2006, Mr Harper said he received a warning letter from Mr Peter Mann, RTA Asset Manager which stated: It has been brought to my attention that the number of calls you have made from your RTA mobile phone in recent months is excessive compared to the other Team Leaders. Attached is a summary of your phone bills since you received your phone. I also note that you have not paid for private calls in accordance with the RTA Mobile Phone Policy since 10 October 2005. On 12 May 2006 during a Team Leader planning meeting, you were present when I advised all Team Leaders that their mobile phone usage was being monitored, that records kept made it simple to deduce which calls were not work related, and that the Team Leaders were expected to pay for private calls as required in the Policy. Each monthly phone bill also reminds users of the Policy. Since this reminder to Team Leaders, your phone bill remains excessive and you have not come forward to pay for private calls as required in the Policy. SHBA management has deemed that a mobile phone is a necessary communication tool to be utilised properly by the Team Leaders. A further incident of this nature will result in additional disciplinary action being taken. This letter will be placed in a confidential file. Mr Harper maintained that subsequent to receiving this letter he had consistently paid for his personal calls. 11 On 16 April 2007, Mr Harper received a letter from Ms Emilia Cvetkovic, Manager, RTA Workplace Conduct Unit, requiring his attendance at a disciplinary interview on 19 April 2007 in respect to, inter alia, the following allegations: Since September 2006 you have misused your mobile phone by making an excessive amount of calls relative to other Team Leaders and that you have failed to pay for private calls, contrary to the RTA Mobile Phone Policy and in disregard of a lawful instruction given to you on 12 May 2006, 11 October 2006 and, more recently, on 13 December 2006. You received a Warning Letter about this matter on 11 October 2006. A copy of the Warning Letter, the RTA Mobile Phone Policy and call records for the period July 2006 to March 2007 are attached. 12 Mr Harper subsequently attended a fact finding interview on 15 May 2007 which was taped and later transcribed. 13 On 27 September 2007, Mr Harper received a warning letter which said, in part: Your responses were received on 17 September 2007, via Mr Phil Reid, AMWU. While careful consideration was given to the submissions, it has been determined that the most appropriate action is that you are to: 1. Repay all monies owed to the RTA in relation to you (sic) RTA-issued mobile phone within a fortnight of receipt of this letter, failure to do so would be considered a deliberate failure to follow a lawful direction, possibly resulting in the immediate commencement of disciplinary processes (with outcomes including termination of employment). 2. Ensure that all subsequent mobile phone accounts are paid within 10 days of receipt of accounts. Mr Harper claimed that he had never been told how much he was required to repay and it was unreasonable for the RTA to propose disciplinary action over an amount that he was not aware of. 14 Around 17 October 2007, Mr Harper was directed to examine his phone records, identify all personal calls and quantify the amount owed. He calculated the figure at $734.26. 15 Mr Harper deposed that his base income was approximately $60,000.00 per annum, with mortgage repayments of $2,100.00 per month and other financial commitments, he would find it difficult to repay $56.47 per fortnight. In cross-examination, Mr Harper agreed his gross income, including overtime for the following 12 month periods were: 2005 - $76,545.93; 2006 - $94,011.04; 2007 - $74,005.33; and from 1 July - 16 November 2007 - $34,589.58. 16 Mr Harper agreed that since June 2005, he had paid some of the monthly phone bills, but not others. He blamed pressure of work for failing to do so. He accepted that he was aware from July 2005, that he was required to pay for personal calls in excess of $10.00 per month. 17 In further cross-examination, Mr Harper was shown the monthly recovery declaration which states the process to be followed as: 1. Indicate which calls have been made by you that are private. 2. Complete the details at the bottom of the summary. 3. Transfer that information to the table below (including NIL amounts). 4. Make any payment as necessary to the Cashier or Petty Cash officer. 5. Get your direct line manager to note this declaration. 6. Keep a copy of your records. 7. Forward on to your local BSG Administration centre. Mr Harper said he hadn't paid attention to these points. 18 Mr Harper agreed that the issue of mobile phones was discussed at a Team Leaders' meeting on 11 October 2006. However, he couldn't recall if he had been handed a copy of the policy that day, notwithstanding the letter he did receive said the policy was attached. Mr Harper also agreed that the issue of private calls on the mobiles was also discussed in a meeting with Mr Bolger, Alliance Manager, Sydney Harbour Bridge Alliance, on 13 December 2006. For the RTA 19 Mr Bradley David Turner is the Executive Manager, Strategy Infrastructure of the RTA. Mr Turner said it was his clear recollection that when the mobile phones were introduced for Team Leaders, that he had instructed Mr Peter Mann, the then Support Manager to provide clear instruction and copies of the policies to all Team Leaders. He said that initially all Team Leaders, including Mr Harper, complied with the policy. In early 2006, when the issue arose over Mr Harper's excessive use of the mobile, he again instructed the Support Service Supervisor and Manager to reinforce the requirements of the policy. 20 Mr Turner said that on 11 October 2006, he had met Mr Harper and discussed the mobile phone issue and provided him with a copy of the policy. He had told Mr Harper his bills were significantly higher than the other Team Leaders. 21 Mr Turner did not accept that the RTA was required to identify a specific amount to be repaid each month. The policy requires the user to establish the amount which Mr Harper had, in fact, done on a number of occasions. 22 In cross-examination, Mr Turner agreed that when a debt was owed to the RTA, or an overpayment made, there would be consultation and a genuine attempt made to find a reasonable repayment method. Mr Turner accepted that the recovery of the owed amount over 17 months would have a negligible financial impact on the RTA. 23 Mr Jason Paul Bolger provided evidence of the months in 2006 and 2007 when Mr Harper had identified amounts for personal calls, but had not paid the relevant amount. 24 Mr Bolger said that the minutes of the meeting held with Team Leaders on 13 December 2006 disclosed that Mr Harper was reminded of his obligation to pay for personal calls and he (Mr Bolger) had outlined what was required when submitting a recovery declaration form. The minutes record the following agenda items: 2. Current Issues 2.1 Forward program 2.2 Mobile Phones - return signed declarations to supervisor each month noting private calls, even if nil repayment required. 25 Mr Bolger said he had provided Mr Harper with all his outstanding bills from August 2005 to July 2007 and told him to identify his personal calls for each month and deduct $10.00. SUBMISSIONS For the Union 26 Mr A Walkaden conceded that the directive to Mr Harper to pay the amount of $56.47 was a lawful direction. However, it was not a reasonable one. He relied on Australian Telecommunications Commission v Hart (1982) 65 FLR 41 for the test of what is reasonable. 27 Mr Walkaden submitted that there were a number of factors in this case which demonstrated the unreasonableness of the RTA's directive. Firstly, there is no provision in the Award which deals with the recovery of overpayments from an employee. Secondly, no agreement had been reached through a proper consultative process. Thirdly, the principles outlined by the High Court in R v Darling Island Stevedoring and Lighterage Company Limited; Ex parte Halliday; Ex parte Sullivan (1938) 60 CLR 601 should govern this process. 28 Mr Walkaden asserted that a sensible repayment plan should meet the needs of both parties and would be around $20.00 - $25.00 a month in this case. Given the size of the RTA, such a plan would have no impact at all on the RTA, but the alternative would have a negative financial impact on Mr Harper given his personal circumstances. For the RTA 29 Mr D Coates said that this was not a case of overpayment, but rather a debt which Mr Harper is obliged to pay. Mr Harper had acknowledged he had a debt, and had in fact paid some months, but simply chose not to on other occasions. 30 The RTA had been reasonable in proposing a repayment over six months. Mr Coates said that a repayment at $20.00 per month was not reasonable considering Mr Harper's earnings were significantly higher than he had disclosed. Mr Harper had put himself in this position knowing full well what was required of him through the policy. Mr Coates referred to the 'suite' of employment obligations on employees through the Award, relevant legislation and RTA policies: See Antonic and Road and Traffic Authority [2005] NSWIRComm 344; Phillips v NSW Roads and Traffic Authority [2007] NSWIRComm 258 and Payne v NSW Roads and Traffic Authority [2007] NSWIRComm 256. CONSIDERATION What is a reasonable direction? 31 It is now a well settled legal and industrial principle that a direction given to an employee by an employer must be both lawful and reasonable. Mr Walkaden correctly accepted that the RTA's direction to Mr Harper to repay the mobile phone debt was a lawful direction. However, he strongly contested that the direction was reasonable. 32 In this regard the judgement of Dixon J in R v The Darling Island Stevedoring and Lighterage Company Limited is apposite. At page 621-622, his Honour said: It is evident that the plan upon which these provisions proceed is to require that work shall go on in accordance with the employers' directions notwithstanding an objection to the quantity or weight placed in a sling and that the objection shall be dealt with by a readily accessible tribunal. But the award could not safely, or, at all events, fairly impose upon the employees an obligation to obey all instructions given by employers with reference to the quantity or weight to be included in a sling whatever their character. Some qualification or restriction was necessary. Naturally enough the award adopted the standard or test by which the common law determines the lawfulness of a command or direction given by a master to a servant. If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable. 33 Dixon J concluded that the determination of what is reasonable cannot be made in a vacuum. At page 622 his Honour said: But what is reasonable is not to be determined, so to speak, in vacuo . The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award, governing the relationship, supply considerations by which the determination of what is reasonable must be controlled. See also Izdes v LG Bennett & Co Pty Ltd t/a Alba Industries (1995) 61 IR 439 and Miller v University of New South Wales (2001) 110 IR 1. 34 I would also wish to add, for my own part, that what constitutes 'reasonableness' can also be viewed against what the ordinary objective bystander might consider to be reasonable in all the circumstances. 35 At the outset, I would observe that, in my opinion, the RTA management demonstrated a willingness to be flexible, was very patient with Mr Harper and responded appropriately when the Union made representations on Mr Harper's behalf. It begs the question, of course, as to why the RTA waited for so long to enforce the policy in the face of clear and ongoing breaches by Mr Harper. It is perhaps unnecessary for me to develop this line of thinking in the absence of a supportive evidentiary base. Be that as it may, had the RTA reacted with more diligence and application, perhaps the problem would not have escalated to its current state. 36 There can be no doubt that Mr Harper's employment is governed by a 'suite' of employment instruments, including relevant legislation, the Award and the RTA policies. As I said in Antonic, an alleged unfair dismissal case involving an employee of the RTA: 99 There can be no argument that the terms and condition of the applicant's employment were (and continue to be) determined by what Mr Meehan described as a " suite " of arrangements involving two Awards, the respondent's policies, and the statutory provisions of the Transport Administration Act 1988. Mr McElroy did not quarrel with this submission. 37 While there was some debate as to whether Mr Harper was aware of the mobile phone policy, that issue does not fall squarely for consideration in this case. This is so because the question of whether Mr Harper is obliged to pay the debt according to the policy is an agreed matter. That being said, I have some difficulty in accepting that Mr Harper did not know of the policy when he had in fact paid the private usage amounts in July, September, and October 2005, and agreed he had been advised of the policy on 12 May, 11 October and 13 December 2006. Moreover, a policy of this kind; namely, a requirement to pay for private use of a company supplied phone, is little more than stating the obvious, or in other words, such a policy makes plain common sense. I am fortified to this view by the fact that Mr Harper is an experienced Union delegate and, in my opinion, would have been under no illusion as to what was required in respect to private use of the mobile phone. 38 Returning then to the issue to be determined, it must be said that the Commission has been left with a paucity of evidence as to the real extent of Mr Harper's financial circumstances, save for a $2,100.00 monthly mortgage. It is plain that Mr Harper has a salary which is considerably higher than the $60,000.00 base award amount. In the last three years he hasn't earned less than $74,000.00 per annum gross, or about $1,000.00 nett per week. In my view, it is immaterial that the higher earnings were attributed to overtime, particularly as it appears that Mr Harper has consistently worked regular overtime. There is no reason to doubt that he will continue to work regular Saturday overtime. Nevertheless, the Commission is faced with Mr Harper's uncontradicted evidence that he would find it difficult to manage a repayment of $56.47 a fortnight. It is with some reluctance that I am prepared to give Mr Harper the benefit of the doubt. That said, I do not consider it would be appropriate for him to repay an amount of $20.00 per fortnight. In arriving at an appropriate repayment figure, I have taken into account that the impact on the RTA will be nil whether the amount is paid over six or 17 months. 39 In addition, I have also taken into account that Mr Harper has been the author of his own predicament. This is not a case where the employer has mistakenly overpaid an employee through no fault of the employee. In my view, this is a situation where Mr Harper has deliberately chosen to ignore his obligations in the face of undoubted knowledge of what was required. 40 In my judgement, an appropriate repayment amount should be $35.00 per fortnight, resulting in the debt being repaid in about 10 months. I do not intend to make orders giving effect to this decision, as I would expect both parties to comply with the outcome. However, should either party require a formal ruling under s 136 of the Act, I will do so upon application. I grant liberty to apply in those circumstances. Peter J Sams, AM Deputy President 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.