[2010] FWA 9440

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Wayne Stuart Walker
v
Mittagong Sands Pty Limited T/A Cowra Quartz
(U2010/1241)

COMMISSIONER THATCHER

SYDNEY, 8 DECEMBER 2010

Unfair dismissal - arbitration - concurrent evidence of expert witnesses - exclusion of unlawfully obtained evidence - unauthorised search of employee’s property

[1] On 6 August 2010 Wayne Stuart Walker made application to Fair Work Australia (FWA) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy on the basis that his dismissal as Leading Hand, Cowra Quartz Quarry by Mittagong Sands Pty Limited trading as Cowra Quartz (Cowra Quartz) on 26 July 2010 for misconduct was harsh, unjust or unreasonable. Mr Walker seeks compensation in lieu of reinstatement.

[2] After taking into account the wishes of the parties I considered it appropriate to proceed by way of hearing. 1 Before proceeding to hear and determine the application, I was satisfied of the requirements of s.396 (Initial matters to be considered before merits) of the Act.

[3] Mr Walker’s summary dismissal (without notice) was for misconduct on 2 July 2010. As stated in the letter of termination dated 26 July 2010 to his solicitors:

[4] More specifically, Cowra Quartz found that with a 5 litre container, which Mr Walker had on the back of his utility, he had removed diesel engine oil from a 205 litre drum in its workshop shed. Cowra Quartz’ finding followed its obtaining an opinion from its oil supplier (based on the results of an analysis by an analytical laboratory) that a sample of oil that purportedly came from that container ‘without doubt’ came from the batch of oil contained in the drum. Cowra Quartz did not report what it considered to be theft to the police.

[5] Mr Walker has maintained he did not take engine oil from his employer. The contents of his 5 litre container were a mixture of privately purchased oils, including gear oil, which he used to lubricate his chainsaws. After Cowra Quartz made its supplier’s opinion available to Mr Walker, he sought an analysis of oil samples from an alternative analytical laboratory. Whilst he was stood-down Mr Walker was directed to attend formal disciplinary meetings with his manager to discuss the findings of Cowra Quartz’ investigation. Acting on legal advice, Mr Walker attended three disciplinary meetings but refused to respond to the results of the analysis Cowra Quartz had obtained until the further analysis was received. The results of the further analysis, which were received on 29 July 2010 (3 days after he was dismissed), were different to those provided by the supplier.

[6] This case turns on:

RELEVANT LEGISLATION

[7] Section 385 of the Act relevantly provides:

[8] In Byrne v Australian Airlines Limited the High Court explained these grounds as follows:

[9] The criteria for considering whether a dismissal is harsh, unjust or unreasonable is contained in s.387 of the Act which states:

[10] Section 381(2) of the Act provides that an objective of Part 3-2 (Unfair Dismissal) of the Act is that the procedures and remedies referred to in paragraphs 381(1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a ‘fair go all round’ is accorded to both the employer and employee concerned. 4

[11] It is well established that each of the paragraphs in s387 must be considered in determining an application in so far as it has application or is relevant to the circumstances of the case and that a valid reason for the dismissal is only one of the specified matters.

[12] Further, it is accepted that the decision of the Full Bench in King v Freshmore (Vic) Pty Ltd  5 (when considering s.170CG of the Industrial Relations Act 1998) is also applicable to s.387. In that case the Commission indicated its task was not to review the employer’s decision as to what conduct occurred but to determine itself, on the evidence, whether the conduct occurred. It stated:

[13] An allegation of theft by an employee from his or her employer is a serious matter that attracts the operation of the principle in Briginshaw v Briginshaw. 6 The standard of proof remains the balance of probabilities but ‘the nature of the issue necessarily affects the process by which reasonable satisfaction is attained’7 and such satisfaction ‘should not be produced by inexact proofs, indefinite testimony, or indirect inferences’8 or ‘by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion.’9

[14] In Re: R Budd 10 a Full Bench, in considering an unfair dismissal application (under the Workplace Relations Act 1996 in which s.652(3) was the counterpart of s.387 of the Act) indicated that the Briginshaw principle applies to the finding of fact and not to the discretion as to whether a dismissal is harsh, unjust or unreasonable. The Full Bench stated:

FACTS

[15] Evidence was given by:

[16] Mr Brett Jarvis, Group Operations Manager, who was responsible for the investigation of the allegation against Mr Walker, did not give evidence. Mr Jarvis was identified as a person in the hearing room representing the respondent. 11

[17] Cowra Quartz operates a sand and pebble quarry at which 6 persons are employed. Mr Walker worked hours of 6.30am to 4.30pm, Mondays to Fridays and 6.00am to 12 noon on Saturdays, although he did not work on Saturday 3 July 2010.

[18] There is a gravel covered car park outside the workshop shed where employees park their vehicles. Quarry vehicles use the area between the car park and the front of the shed. The workshop in the shed is used as the main area for the maintenance of vehicles used and maintained by Cowra Quartz. 12 There is also an office on site.

[19] On Friday, 2 July 2010 Mr Walker’s utility was in the car park adjacent to at least two vehicles of other employees, approximately 18 metres 13 from the front of the shed. On the open tray of his utility was personal property, namely two old 5 litre red plastic oil bottles (one on its side), a car battery, rope, a rabbit trap and some sand. The oil bottles were towards the driver’s side of the tray.

[20] Mr Walker’s evidence is that one bottle was 7/8ths full and the other empty. 14 Mr Kelly’s evidence is that both were full15 and that when he opened a bottle ‘it just started oozing out it was that full.’16 I will return to this evidence later.

[21] That morning, Mr Walker and Mr Arber were to work at the wash plant. After loading a work vehicle with tools, Mr Arber drove to the wash plant and Mr Walker was to travel independently (in a loader). After driving to the wash plant Mr Arber drove back to the workshop to obtain more equipment. As he returned, he saw Mr Walker standing beside the passenger side door of his utility, which he describes as ‘hanging around his ute’.

[22] Mr Walker’s evidence is that on arriving at work that day he went to the office to sign in, have a cup of coffee and talk about the work of the day. In the course of preparing the job safety analysis documentation he went to his vehicle to retrieve his safety ear muffs. As he was walking back to the office with the ear muffs he saw Mr Arber driving the work vehicle.

[23] Under cross-examination Mr Arber had difficulty explaining why he had thought it strange that Mr Walker was ‘hanging around’. He agreed that ear plugs or muffs were required at the wash plant. 17 He could not recall whether or not Mr Walker had earmuffs on his arm,18 and he conceded that Mr Walker may have well forgotten his ear muffs and that: ‘I can’t say I’ve taken much notice of what sort of protection he wears.’19

[24] At some stage Mr Arber saw a trail of oil from a drum of oil in the workshop. In his prepared statement he said that this was when he had returned and seen Mr Walker beside his utility. Under cross-examination he was not sure when he first saw the trail, although it was before smoko at 9.00am. 20

[25] Photographs that were subsequently taken on Mr Kelly’s mobile phone and tendered as evidence 21 show several 205 litre drums next to each other in a closed corner of a shed. The photographs show an oil trail on the concrete floor commencing from underneath the hand pump on one of the drums and in a continuous crooked line for a period of approximately 1½ metres. This is followed by a series of periodic drips roughly in a straight line and then intermittent drips across the floor in a direction that is said to be towards the entrance of the shed. There are no photographs showing any drips continuing outside the workshop across the thoroughfare or to the gravel car park. In view of the progressively diminishing size of the drips and lengthening distance between drips across the concrete floor (refer to photograph 1), for reason that the descriptions are general and imprecise, I have not accepted Mr Kelly’s written evidence that the trail ran ‘out the door and in the direction of the car park’22 or Mr Arber’s written evidence that the trail was ‘heading in the direction of the car park.’23 The close-up of the commencement of the oil trail (photograph 3) does not indicate an initial puddle of oil beneath the hand pump.

[26] Late morning, Mr Kelly noticed the oil trail. When he asked Mr Arber about it, Mr Arber said that whilst he had nothing to do with it, he saw Mr Walker ‘hanging around his ute earlier this morning for no reason.’ 24

[27] At some stage Mr Kelly went to Mr Walker’s utility and noticed the 2 oil containers. At some stage Mr Kelly obtained clean empty plastic lunch boxes from the lunch room. At some stage with Mr Arber as his witness and without speaking to Mr Walker, Mr Kelly took an oil sample from one of the containers on the back of Mr Walker’s utility. Mr Arber took a photograph of the sample being poured into a lunch box using Mr Kelly’s mobile phone.

[28] The evidence of precisely what then happened to the oil samples is not precise. However, samples of oil were put into secure containers. I will return to this later.

[29] At 4.30pm that afternoon, during a brief conversation in the yard and not in the presence of a witness, Mr Kelly asked Mr Walker if he had put oil from drums in the shed into his container. Whilst what was said between them is in dispute, both agree that Mr Walker said that he had not taken oil and that the substance in his container was chain saw oil. Mr Kelly did not disclose that he had taken a sample of oil from Mr Walker’s container.

[30] On 6 July 2010 Mr Kelly orally advised Mr Walker that he had taken oil samples and would be getting them tested. In the meantime Mr Walker was stood down on full pay. 25 This was confirmed in a letter dated 7 July 2010 from Mr Kelly to Mr Walker headed ‘Investigation into the allegation of misappropriation’ which included:

[31] Mr Walker contacted his solicitor and, acting on the solicitor’s advice he secured the top of the bottle in the back of his utility with tape. Mr Walker’s evidence is that nothing had happened to the container since 2 July 2010 and the oil was exactly the same as what was in the container on 2 July 2010. 27

[32] On 7 July 2010 Mr Kelly had a conversation with a director of Cowra Quartz’ oil supplier (the supplier) who advised him to ‘send the samples and we’ll get them tested.’ 28 Two oil samples in secure containers were sent to the director for testing. One was identified as the sample taken from Mr Walker’s container and the other was identified as oil from the workshop drum.

[33] An unsigned letter faxed from the director dated 15 July 2010 on Gulf Western Oil Racing letterhead to Cowra Quartz and Benedict Industries 29 included:

[34] It has not been made clear to FWA whether the director’s notation was meant to be an opinion which he had formed or whether he was relaying another’s opinion. I have not been made aware of the director’s qualifications or expertise.

[35] During the period up to Mr Walker’s dismissal various correspondence was exchanged between Mr Walker’s solicitor and Mr Kelly. During the hearing it became clear that although some of the letters had Mr Kelly’s signature they were, in fact, prepared by Ms Martins. Others had Mr Kelly’s signature block but were actually signed by Ms Martins. Cowra Quartz acknowledges that ‘with the benefit of hindsight, the language used in some of the correspondence from the respondent may appear infelicitous’. 31

[36] Mr Kelly’s letter dated Friday 16 July 2010 to Mr Walker included the following:

[37] After Mr Walker received the letter of Friday 16 July 2010 late in the afternoon, that afternoon he spoke to his solicitor and instructed the solicitor to reply to Cowra Quartz on his behalf. At 8.55am on Monday 19th July 2010 Mr Walker’s solicitor faxed/emailed a letter to Cowra Quartz which included:

[38] On 19 July 2010 Cowra Quartz sent Mr Walker’s solicitors the unsigned letter on Gulf Western Oil Racing letterhead dated 15 July 2010.

[39] Acting on legal advice, Mr Walker did not attended the 10.30am meeting. Later that day Mr Kelly sent a further letter to Mr Walker which included the following:

[40] On 20 July 2010 Mr and Mrs Walker took a 205 litre drum of oil from their shed and the taped up 5 litre container to Orange where, after discussion with Western Battery, they purchased 2 Wear Analysis test kits. After pouring samples of oil into the secure sample pots and labelling them they posted the samples to Valvoline’s Wear Analysis program.

[41] At around 9.30 am on 21 July 2010 Mr Walker, accompanied by Mrs Walker, went to Cowra Quartz and met with Mr Jarvis and Mr Kelly. Mr Walker explained that he had taken steps to obtain a report from experts of his choosing and, acting on legal advice, he would discuss the findings of the Cowra Quartz investigation as soon as that report was available. He handed his employer a letter dated 21 July 2010 from his solicitor that replied to Cowra Quartz correspondence and included:

[42] On 21 July 2010, Cowra Quartz replied to Mr Walker’s solicitors. Its letter included the following:

[43] On 22 July 2010 Mr Walker’s solicitors sent a lengthy letter to Cowra Quartz which included:

[44] In a letter dated 22 July 2010 Cowra Quartz replied, stating that it still required Mr Walker to attend the meeting on 23 July 2010. 38

[45] Mr Kelly attended the meeting on 23 July 2010, in the company of Mrs Walker, and continued his position that, acting on legal advice, he would not discuss the findings of the Cowra Quartz investigation until the results of the tests he was obtaining were received. Later that day, Cowra Quartz wrote to Mr Walker’s solicitors in terms that included:

[46] Mr and Mrs Walker attended the meeting on 26 July 2010. After the meeting Cowra Quartz sent Mr Walker’s solicitors a letter of termination (refer to paragraph 3) which included the following:

[47] Both Mr Garnon and Dr Michell gave evidence of their opinion on the findings of the analysis obtained by the supplier and the analysis obtained directly by Mr Walker. In their evidence the respective samples were identified as follows:

[48] At my request arrangements were made for the expert witnesses to give concurrent evidence (commonly referred to as a ‘hot tub’). Hot tubing does not mean that each witness is cross-examined along traditional lines and after Cowra Quartz’ representative proceeded to cross-examine Mr Garnon, I lead the questioning and within a short period any differences in opinion were mostly resolved.

[49] The net result of their evidence is that:

[50] It is clear from the above that A1 (the sample of oil that Mr Kelly purportedly look from the 5 litre container on the back of Mr Walker’s truck) was not the same oil as B2 (the sample of oil that Mr Walker purportedly took from the same container).

[51] There is no dispute between the parties that A2 and B1 are not the same oils.

s.387(a) - WAS THERE A VALID REASON FOR THE DISMISSAL?

[52] There is a general acceptance that the often quoted words of Northrop J in Selvachandran v Peteron Plastics Pty Ltd (Selvachandran) also apply to the existing provision:

[53] I found Mr Walker to be a reliable witness. His evidence was not significantly disturbed under cross examination and reflected a logical process of reasoning. His actions were those of someone who knew he had not taken oil from his employer and was confident that an analysis would prove him innocent. After being accused of stealing and stood down, he consulted a solicitor, following which, out of caution, he taped up his 5 litre container. When the supplier’s opinion did not prove his innocence he suspected that the samples had been tampered with and sought his own analysis. He followed his solicitor’s advice by not discussing the results of what he suspected was a bogus sample with the manager who had made the allegation and taken the sample.

[54] There is an issue that goes to Mr Walker’s credibility in respect of his oral evidence that the mixture of B2 included a ‘splash’ of gear oil. 44 That did not fit well with the experts’ opinion that to achieve the level of dilution necessary to achieve the test results, the splash would have had to be in the order of 25%. Under cross-examination it was put to Mr Walker that 500 mls of gear oil could not be regarded as a splash, that his prepared statement did not say that he added to the mixture from time to time, and that he was recreating events in the light of the expert evidence.

[55] In relation to that issue, I accept Mr Walker’s oral evidence that he was not able to identify the gear oil that he added to his container because as well as having two chainsaws 45 he ‘had various oils for kids’ motorbikes, an old tractor, three trucks and my own work ute’46 and he could have last added to the container in early April 2010.47 I accept the following evidence of Mr Walker:

[56] I accept Mr Walker’s evidence that the amount left in the container determined ‘whether I just add a bit or whatever’ 49 and I find that his method of periodically topping-up the container to be probable. Applying the Briginshaw principle I am not prepared to find that on the balance of probabilities that such method could result in a mixture of diesel engine oil and gear oil that is inconsistent with the evidence of the experts in relation to sample B2.50

[57] I found Mrs Walker to be a truthful witness.

[58] A lot of the evidence of Mr Kelly was vague, inconsistent or improbable. His demeanour did not appear to be that of a truthful witness with a reasonable recollection of events for which he, as the manager of the quarry, was responsible. I consider him to have been an unreliable witness and to the extent that Mr Kelly’s evidence may be inconsistent with my conclusions I prefer the evidence of Mr Walker. Some examples of my concerns with Mr Kelly’s evidence are:

[59] After considering the evidence in the context of the Briginshaw principles, I am far from satisfied that, based on the balance of probabilities, sample A1 was oil that was taken from Mr Walker’s container on the back of his utility. Some of the issues that relate to the integrity of the process followed before sample A1 was sent to the supplier for testing are:

[60] In respect of sample A2, Mr Arber’s statement did not go so far as to state that he witnessed a sample being taken from the workshop drum 76 and he failed to mention anything about this in his oral evidence.77 In response to my question of Mr Kelly whether he had culled the photos that were taken, Mr Kelly stated that: ‘No, that was all I took and what I took I printed off’.78 There was no photograph of a sample of oil being taken from the drum.

[61] For the reasons outlined above, I prefer Mr Walker’s evidence that sample B2 was exactly the same oil as was in the only container with oil that was on the back of Mr Walker’s utility on 2 July 2010. 79

Whether certain evidence should be excluded

[62] In written submissions made after each party had finalised its evidence, it is put on behalf of Mr Walker that the sample of oil from the container was obtained improperly or illegally and that the evidence should be excluded, pursuant to the discretion contained in s.138 of the Evidence Act 1995. 80 Reference was made to the factors to be considered in exercising that discretion in Klein v Bryant,81 a decision of the Supreme Court of the ACT in a personal injury case where video evidence of the plaintiff undertaking farming duties, which was filmed by a person trespassing on the plaintiff’s rural property, was excluded.

[63] Section 591 of the Act provides that FWA is not bound by the rules of evidence in relation to a matter before it. However that does not mean that the rules of evidence are irrelevant. In its decision in Re: Michael King 82the Full Bench agreed with the following observation of the Industrial Commission of New South Wales in Court Session in PDS Rural Products Ltd v Corthorn, which relevantly included:

[64] As they are relevant to my consideration of whether evidence that has been improperly or unlawfully obtained should be taken into account, what do the rules of evidence say about such evidence?

[65] Under both the common law and the Uniform Evidence legislation evidence that has been illegally or improperly obtained may, in effect, be excluded.

[66] The seminal common law authority in which the issue of unlawfully obtained evidence was discussed is Bunning v Cross. 84 The common law was framed in terms of a discretion to exclude85 and ultimately, the decisive factor in deciding whether to exclude otherwise relevant and admissible evidence is the public policy that the court is not seen to condone the illegality or impropriety.86

[67] In Robinson v Woolworths Ltd 87 it was held that the common law discretion to exclude such evidence has been replaced by s.138 of the Evidence Act 1995. That decision included:

[68] Section 138 of the Evidence Act 1998 relevantly prescribes:

[69] Thus, unlike the common law, s.138 involves the exclusion of evidence unlawfully obtained, subject to a discretion to admit such evidence. As stated in Chapter 16 of the Australian Law Reform Commission’s 2006 report, Uniform Evidence Law: 88

[70] Whilst s.138 is of more practical import in criminal cases, it applies in civil cases. 89 As noted by the Full Bench in Hail Creek Coal Pty Ltd v Construction, Forestry, Mining and Energy Union,90 in Employment Advocate v Williamson, Branson J made it clear that s.138 is not limited to evidence obtained by the police or other enforcement organisations.91

[71] The factors set out in items (a) to (h) of s.138(3) that must be taken into account are not exhaustive. Each, if applicable, is to be weighed in favour of exercising the discretion or against it. 92 In R v Throung93 Miles CJ stated:

[72] Turning now to the case before me, I intend to be guided by the provisions of s.138. As a first step I will consider whether the evidence sought to be admitted was in fact unlawfully obtained or in consequence of evidence that was unlawfully obtained. If that is the case, as a second step, I will consider whether, in the circumstances of the case, including appropriate weight to the factors in s.138(3) that are applicable and any other relevant considerations, the desirability of admitting the evidence outweighs the undesirability of admitting such evidence.

[73] In respect of the first step, Cowra Quartz had given Mr Walker license to park his vehicle in its car park. The utility and container were clearly the personal property of Mr Walker. By reaching over to touch the container Mr Kelly technically committed an act of trespass. By opening the bottle and removing some oil he committed an act of larceny (stealing). Simply put, he did not have the authority to search Mr Walker’s property and take the oil and, for the purposes of paragraph 138(1)(a), his actions were unlawful. For the purposes of paragraph 138(1)(b), the evidence obtained in consequence of that unlawful act, includes the custody of the purported sample and the analysis thereof by the analytical laboratory.

[74] In the second step, I will start from a position that such evidence is not to be admitted and that the onus is on the party seeking admission to satisfy FWA that the desirability of admitting the evidence outweighs the undesirability of admitting it.

[75] Cowra Quartz makes no submissions in respect of s.138(3) or the matters included therein. Rather it submits that the applicant’s submission is made ‘at the heel of the hunt’ and after the evidence of Mr Kelly had been tendered without objection and he and Mr Arber had been cross-examined on the taking of the oil sample. There was a time for seeking to exclude the evidence and that time has passed as the case has proceeded on the basis that the evidence is before FWA. One can’t now retroactively or retrospectively exclude that evidence.

[76] The difficulty with Cowra Quartz’ submission is that FWA is not bound by the rules of evidence or procedure. For example, it has not infrequently been my practice to accept evidence in respect of which an objection has been made and subsequently, in my consideration of all of the case, to give such evidence no weight whatsoever, the effect of which is to ignore or exclude the evidence notwithstanding it was originally accepted.

[77] It is obviously undesirable for parties to seek to alter the evidence that has been admitted when making final submissions. Generally, I would refuse to allow this unless there were sound reasons why in the interests of justice it was absolutely necessary. If circumstances were such that I was persuaded to do so, it would be highly likely that, to ensure natural justice and procedural fairness, I would provide the other party with the opportunity to introduce further evidence in rebuttal of the altered evidence.

[78] In this case it is unfortunate that the submission was not foreshadowed in the applicant’s outline of submissions. However this is not a case where a party is seeking to introduce additional evidence late in the proceedings and the other party is placed at a disadvantage. Further, there is a serious issue to be considered, albeit raised late in the proceedings.

[79] It is difficult to see how the exclusion of the evidence could require Cowra Quartz to call fresh evidence as there is already evidence from Mr Kelly that he did not consider he had obtained evidence illegally 95 and that he took the sample of oil without Mr Walker’s permission or knowledge. Further Cowra Quartz is legally represented and, after becoming aware of the applicant’s submission, the representative did not seek to introduce additional evidence or obtain an adjournment.

[80] The factors that I will take into consideration in deciding whether or not the desirability of admitting the challenged evidence ‘outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained’ are:

[81] Privacy in the workplace is an important issue. In our contemporary society, at the very least, security checks of bags, parcels, lockers and the like (including containers in personal vehicles) should not take place unless the employee concerned is present, or alternatively, that the employee has given permission for such a search to take place in his or her absence. An employee should be able to have a union delegate or another nominated employee of the employee’s choice present during the search. 102

[82] As stated by Macken J of the NSW Industrial Commission in re Security Arrangements in Retail Stores: 103

[83] Whilst the power to admit or exclude the challenged evidence is discretionary, that discretion must be exercised judicially in the interests of justice. The interests of justice are not confined to the interests of the parties but extend to include the broader public interest in the proper administration of justice.

[84] There is a significant public policy consideration. FWA should not be seen to condone the actions of employers who search the property of employees without their consent or knowledge.

[85] The gravity of Cowra Quartz’ actions in authorising or condoning Mr Kelly’s actions in a car park outside a shed of a quarry in an isolated regional location is of a high order. It sufficiently serious for me to feel compelled to exercise my discretion to exclude the evidence of Mr Kelly taking the sample of oil from Mr Walker’s container, Mr Arber’s evidence in respect of that action, and evidence as a consequence of that action. That is, after taking all of the circumstances into consideration, I consider that the undesirability of admitting the evidence outweighs the desirability of admitting the evidence.

Conclusion

[86] In my opinion, the prevailing circumstances were such that no misconduct in the form of theft occurred and there was no valid reason for the dismissal of Mr Walker (within the meaning of Selvachandran).

WHETHER THE PERSON WAS NOTIFIED OF THAT REASON (s.387(b))

[87] Similar to its legislative predecessor, the reference in s.387(b) to ‘that reason’ is a reference to the valid reason for the employee’s dismissal. 105 Also, the reason must be given prior to the decision to terminate.106

[88] Mr Walker attended a meeting with Mr Kelly on 26 July 2010 which was one of several meetings called to discuss the findings of Cowra Quartz’ investigation into the allegation of misappropriation. Later that day, as indicated in paragraph 3, Mr Walker received written advice that his employment was terminated on the basis of theft.

[89] I have found that theft did not occur.

WHETHER THE PERSON WAS GIVEN AN OPPORTUNITY TO RESPOND TO ANY REASON RELATED TO THE CAPACITY OR CONDUCT OF THE PERSON (s.387(c))

[90] Section 387(c) provides that the FWA must have regard to whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee. The opportunity to respond refers to an opportunity that is provided before a decision is taken to terminate the employee’s employment. 107 The ‘any reason’ refers to the valid reason for the employee’s dismissal.108

[91] In cases where an employee’s conduct is involved, this opportunity serves two purposes. Firstly, it gives the employee the opportunity to demonstrate that the allegations have no foundation. Secondly, it gives the employee the opportunity to persuade the employer that, while the allegations are of substance, there are factors that should persuade the employer not to terminate the employment. Those factors may be extenuating personal circumstances or they may involve undertakings about future conduct. 109 The following comments of Moore J (when considering s.170DC of the Industrial Relations Act 1998) are relevant to the second purpose:

[92] In respect of the first purpose, Cowra Quartz’ letter to Mr Walker dated 16 July 2010 did not give him an opportunity to respond to the results of the scientific testing before its investigation was concluded. Rather the letter addressed only the second purpose. It stated that the investigation had been concluded and given the seriousness of the misconduct he was required to attend the formal disciplinary meeting on 19 July 2010. Cowra Quartz would consider Mr Walker’s response at the meeting ‘when making our decision on our course of disciplinary action, which may include the termination of your employment with Mittagong Sands Pty Ltd.”

[93] This shortcoming was not rectified in Cowra Quartz’ letter dated 19 July 2010. However it was remedied in its letter dated 21 July 2010 which stated that: ‘The next stage in our investigation is to ascertain Mr Walker’s responses to the findings of our investigation. We are trying to be as procedurally fair as possible ...’. That approach was continued in Cowra Quartz’ letter dated 22 July 2010.

[94] I am satisfied that Mr Walker was given an opportunity to respond to the conduct that lead to his dismissal. I will give consideration to the adequacy of that opportunity in relation to paragraph 387(h).

ANY UNREASONABLE REFUSAL BY THE EMPLOYER TO ALLOW THE PERSON TO HAVE A SUPPORT PERSON PRESENT TO ASSIST AT ANY DISCUSSIONS RELATING TO DISMISSAL (s.387(d))

[95] There was no such unreasonable refusal by Cowra Quartz.

IF THE DISMISSAL RELATED TO UNSATISFACTORY PERFORMANCE BY THE PERSON—WHETHER THE PERSON HAD BEEN WARNED ABOUT THAT UNSATISFACTORY PERFORMANCE BEFORE THE DISMISSAL (s.387(e))

[96] This consideration is not relevant to these proceedings given that Mr Walker’s employment was terminated on the grounds of misconduct, rather than his capacity. 111

THE DEGREE TO WHICH THE SIZE OF THE EMPLOYER’S ENTERPRISE WOULD BE LIKELY TO IMPACT ON THE PROCEDURES FOLLOWED IN EFFECTING THE DISMISSAL (s.387(f))

[97] Cowra Quartz is a relatively small employer, with approximately 18 full time equivalent employees at the time of Mr Walker’s dismissal.

[98] Although Cowra Quartz does not seek to rely upon its size as a justification for any defects in the procedures followed in effecting Mr Walker’s dismissal, I have formed the opinion that this was a relevant factor.

THE DEGREE TO WHICH THE ABSENCE OF DEDICATED HUMAN RESOURCE MANAGEMENT SPECIALISTS OR EXPERTISE IN THE ENTERPRISE WOULD BE LIKELY TO IMPACT ON THE PROCEDURES FOLLOWED IN EFFECTING THE DISMISSAL (s.387(g))

[99] Cowra Quartz does not have a dedicated human resource management specialist. The payroll officer, Ms Martin, assists with human resource issues when they arise.

[100] Ms Martins presented as a conscientious and efficient employee who was not experienced in handling more complex human resource issues. 112 During the course of her coordination of Cowra Quartz’ management of the suspected theft she received instruction and advice from Mr Jarvis and the financial controller. Also, she sought advice from an employer association’s telephone helpline in the mistaken belief it was staffed by lawyers.113 She signed letters on behalf of Mr Kelly because he was out in the field and in order to expedite matters.114

[101] Although Cowra Quartz does not seek to rely upon its lack of a dedicated human resource management specialist as a justification for any defects in the procedures followed in effecting Mr Walker’s dismissal, I have formed the opinion that this was a relevant factor.

ANY OTHER MATTERS THAT FWA CONSIDERS RELEVANT (s.387(h))

[102] I am required to have regard to any other matters I consider relevant.

Termination before results of alternative analysis were received

[103] Unlike criminal investigations, employees who are questioned by their employers about alleged misconduct have no right to silence, although they may consider it prudent not to answer certain questions.

[104] However, the current matter is by no means a case where an employee had been charged with an offence and was refusing to answer questions about alleged criminal conduct in order to avoid giving incriminating evidence that could be used against the employee in pending criminal proceedings.

[105] Cowra Quartz knew that Mr Walker disputed taking company oil. He consistently maintained that position since he was first asked on 2 July 2010.

[106] Mr Walker was in no position to give a reason why the opinion of Cowra Quartz’ supplier (based on the results of a technical analysis of oil samples) had concluded that the oil in his container was ‘without doubt’ the same oil as oil in the drum in the workshop. This was because he disputed that he had taken company oil and was not qualified to question the results from the analytical laboratory or the expressed opinion.

[107] It is difficult to understand what Cowra Quartz expected could be achieved by Mr Walker discussing the results of the technical analysis when he was not suitably qualified and he believed he did not steal the oil.

[108] Without his own analysis Mr Walker would not have been able to demonstrate to Cowra Quartz that sample A1 was not from his container.

[109] After Cowra Quartz provided Mr Walker with the opinion of its supplier and the results from the analytical laboratory, Mr Walker acted promptly to obtain an alternative analysis.

[110] There is no suggestion that there would be an undue delay in obtaining the results from the alternative analytical laboratory. Mr Walker could not predict when the results would become available. In the absence of anything to the contrary it would have been reasonable for Cowra Quartz to assume, based on the timing of the other analysis, that it would take in the order of 8 calendar days for Mr Walker to obtain the results. That would have been around 28 July 2010. (As things turned out the alternative analysis was received on 29 July 2010)

[111] In the circumstances, it was unreasonable for Cowra Quartz, upon being advised on 21 July 2010 that Mr Walker had taken steps to obtain an alternative analysis, to insist that he respond to the opinion and technical analysis it had received at the disciplinary meetings on 21 July 2010, 23 July 2010 and 26 July 2010 and to terminate his employment on 26 July 2010 before his alternative analysis was received. In the circumstances, the timeframe followed by Cowra Quartz was unreasonable because it did not give Mr Walker adequate opportunity to respond to the purportedly incriminating material. This is a factor that goes in favour of a finding that Mr Walker’s dismissal was harsh, unjust or unreasonable.

Other Matters

[112] Mr Walker commenced employment with Mittagong Sands Pty Ltd as a casual in April 2006. In March 2008 he was made a permanent employee. At the time of his dismissal he was performing the role of leading hand.

[113] Mr Walker is aged 43 years. He is married with a family.

[114] Mr Walker commenced alternative employment in a casual capacity on 27 July 2010 on a lesser level of remuneration.

[115] Mr Walker did not commit misconduct, let alone misconduct warranting dismissal without notice.

CONCLUSION

[116] After having regard to each of the matters in paragraphs 387(a) to (h) of the Act in so far as they have application or are relevant to the circumstances of this case, I am satisfied that Mr Walker’s dismissal by Cowra Quartz was harsh, unjust or unreasonable.

[117] In arriving at that decision I have been conscious of the objective of Part 3-2 (Unfair Dismissal), including ensuring that both Cowra Quartz and Mr Walker are accorded a ‘fair go all round’.

REMEDY

[118] Section 390 of the Act provides:

[119] I am satisfied that Mr Walker was protected from unfair dismissal and was unfairly dismissed. Mr Walker, understandably enough, does not seek reinstatement and, based on the material before FWA, I am satisfied that reinstatement is not appropriate. I am satisfied that a remedy in the form of compensation is appropriate in all the circumstances of the case.

[120] In determining the amount of compensation I am required to take into account all of the circumstances of the case including, in particular, the matters specified in s.392(2). I turn to consider those matters:

s.392(2)(a): the effect of the order on the viability of the employer’s enterprise

[121] There is no evidence on which I could find that the order I propose will have an adverse effect on the viability of the employer’s enterprise. No such contention was made by Cowra Quartz.

s.392(2)(b): the length of the person’s service with the employer

[122] Mr Walker was employed by Cowra Quartz on a casual basis from April 2006 until 2008. Thereafter he was employed on a permanent basis until 26 July 2010.

s.392(2)(c): the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[123] I am satisfied that if Mr Walker had not been wrongfully accused of thieving oil and unfairly dismissed on the basis of theft he did not commit, he would have continued working at the quarry indefinitely. In making such finding I have taken account of the first written warning that Mr Walker received on 15 June 2010 for exceeding the speed limit of 25kph. 115

s.392(2)(d): the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[124] I am satisfied that Mr Walker made efforts to mitigate his loss by seeking alternative employment.

[125] He commenced casual employment with Consolidated Plant and Quarries from 27 July 2010 and worked off and on until about 13 August. He has worked as a casual for Nelligans Sand and Gravel since 19 August 2010.

s.392(2)(e): the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[126] The parties agreed that Mr Walker had received remuneration from employment during the period between his dismissal and 18 November of $13, 826.94.

[127] Also, the parties agreed that during that period, the wages that Mr Walker could reasonably have expected to receive from Cowra Quartz if he had not been dismissed was $23,445.60.

[128] Thus the shortfall during that period is $9,618.66.

s.392(2)(f): the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation

[129] The rate of remuneration that Mr Walker receives with Nelligans Sand and Gravel is less than the rate of remuneration he was receiving with Cowra Quartz. Since September he has been receiving $865.20 per week, which compares with the average weekly pay with Cowra Quartz of $1,414.83 - a difference of $549.63 per week.

[130] Mr Walker gave evidence that unless there is a strong harvest this year, the likelihood of him being able to obtain regular work in 2011 as a labourer/loader driver would be in doubt. I will not rely on speculation about future weather.

s.392(2)(g): any other matter that FWA considers relevant

[131] In the written submissions of behalf of Mr Walker it was submitted that he is entitled to compensation in the sum of $9,618.66 and a small additional sum to reflect the uncertainty of obtaining regular work in the future. Further, it was foreshadowed that Mr Walker would seek that Cowra Quartz pay his costs.

[132] During the proceedings I sought clarification from Mr Walker’s legal representative on what was being sought. As a result of that discussion I concluded that what was being sought was that I determine the amount in accordance with the provisions of the Act. 116

[133] Mr Walker did not receive payment in lieu of notice of the termination of his employment, as was his entitlement.

[134] I have considered all the circumstances of the case and there are no other matters of particular relevance that I consider warrant mentioning under this heading.

Appropriate compensation

[135] As the Full Bench stated in Re: Industrial Automation Group Pty Ltd T/A Industrial Automation:

[136] Taking all of the circumstances of the case into account, I consider that the appropriate level of compensation is the amount of $9,618.66 plus a weekly amount of $549.63 for the balance of a period of approximately 26 weeks ($5,496.30), rounded off to a total amount of $15,000.00.

[137] I order that an amount of $15,000.00 be paid by Cowra Quartz to Mr Walker in lieu of reinstatement.

COMMISSIONER

Appearances:

Mr G Casey, Solicitor for the Applicant

Mr P Ginters, Barrister for the Respondent

Hearing details:

2010

Grenfell

November 18

Cowra

November 19

Sydney

November 26

 1   In accordance with s.399 (Hearings).

 2   Exhibit G4, Attachment L.

 3   McHugh and Gummow JJ, (1995) 185 CLR 410 at 465.

 4   A Note to the provision states that: “The expression ‘fair go all round’ was used by Sheldon J in Re Loty and Holloway v Australian Workers Union [1971] AR (NSW) 95.’

 5   Print S4213, 17 March 2000, per Ross VP, Williams SDP and Hingley C.

 6   (1938) 60 CLR 336.

 7   Ibid, per Dixon J at p 363.

 8   Ibid, per Dixon J at p 362.

 9   Ibid, per Rich J at p 350.

 10   [2007] AIRCFB 797, 5 October 2007, per Giudice P, Lacy SDP, Cargill C.

 11   PN249 and Written Submissions of the Applicant, para 58.

 12   PN901.

 13   PN898 & PN1516.

 14   PN1001.

 15   Exhibit G3, para 28.

 16   PN2247.

 17   PN1531.

 18   PN1554.

 19   PN1530.

 20   PN1572-PN1573.

 21   Exhibit G2, Attachment A.

 22   Exhibit G3, para 4.

 23   Exhibit G2, para 4.

 24   Exhibit G2, para 5.

 25   Exhibit G3, Attachment B.

 26   Exhibit G3, Attachment C.

 27   PN1006 - PN1008.

 28   Exhibit G3, para 16.

 29   Which describes itself on its website as ‘one of the largest producers and resellers of quarried, recycled and landscape products in NSW.’

 30   Exhibit G3, Attachment D.

 31   Respondent’s Outline of Submissions, para 21.

 32   Exhibit G3, Attachment E.

 33   Exhibit C2, Attachment G.

 34   Exhibit G3, Attachment G.

 35   Exhibit C2, Attachment K.

 36   Exhibit G4, Attachment G.

 37   Exhibit C2, Attachment M.

 38   Exhibit G4, Attachment I.

 39   Exhibit G4, Attachment K.

 40   Exhibit G4, Attachment L.

 41   PN729.

 42   PN798 & PN802.

 43   (1995) 62 IR 371, 373.

 44   PN1004.

 45   PN837.

 46   PN838 and photograph in Exhibit C5, Attachment A (page 5 of exhibit).

 47   PN844 - PN845 & PN1123.

 48   PN846 - PN847.

 49   PN1026 and PN1072.

 50   It was never put directly to Mr Walker that his method of adding gear oil could not have resulted in gear oil of approximately 1.25 litres in his 5 litre container on 2 July 2010, i.e. 25%.

 51   PN1657 & PN1661 - PN1663.

 52   PN1665.

 53   PN1675.

 54   Exhibit G3, Attachment B.

 55   PN1654.

 56   PN1623.

 57   Exhibit G3, para 28.

 58   PN2247.

 59   PN1674 & PN1675. Also PN1703.

 60   PN1622 - PN1623.

 61   Clearly Mr Arber was not a witness to the discussion as although he was close by he wouldn’t have heard anything.

 62   PN1649 - PN1653.

 63   PN1838 - PN1877.

 64   Exhibit G4, para 4.

 65   PN2000 - PN2004.

 66   PN2042 - PN2046.

 67   PN2130.

 68   PN2106 - PN2108.

 69   Exhibit G3, para 19.

 70   PNPN1786 - PN1793.

 71   PN1800 & PN1814.

 72   PN1740.

 73   Exhibit G3, Attachment A.

 74   Exhibit C2, para 16 & PN1707.

 75   PN2171

 76   Exhibit G2, para 6.

 77   PN1587.

 78   PN1684.

 79   Mr Walker was unwavering under cross-examination - PN1109 - PN1115.

 80   Written Submissions of Applicant, paras 134-140.

 81   [1998] ACTSC 89 (4 September 1998).

 82   Print S4213, 17 March 2000, per Ross VP, Williams SDP, Hingley C.

 83   (1987) 19 IR 153 at 155, per Fisher P, Bauer & Glynn JJ.

 84   (1978) 141 CLR 54.

 85   Robinson v Woolworths Ltd, (2005) 227 ALR 353; (2005) NSWLR 612.

 86   R v Swaffield; Pavic v R, 192 CLR 159, paras 69-70, per Toohey, Gaudron and Gummow JJ.

 87   Op cit.

 88   ALRC Report 102, 13 February 2006.

 89   Klein v Brand, op cit, at para 44.

 90   PR948938, 12 July 2004, Ross VP, Duncan SDP, Bacon C, at para 56.

 91   (2001) 111 FCR 20.

 92   Australian Securities & Investment Commission v McDonald (No5), [2008] NSWSC 1169, at para 27.

 93   (1996) 86 A Crim R 188.

 94   At 196.

 95   PN1986-1989.

 96   Exhibit C2, para 10 and PN1133.

 97   Exhibit C2, para 17 - which was not denied in Exhibit G3, para 30.

 98   PN1986 - PN1988.

 99   Compare Exhibit G3, para 7 with PN1651.

 100   Exhibit G3, para 7.

 101   Respondent’s Outline of Submissions, para 15.

 102   Based on the model guidelines recommended by Macken J of the NSW Industrial Commission for major employers in the retail industry in NSW in re Security Arrangements in Retail Stores, [1979] AR 72, at 89.

 103   Ibid.

 104   At 79.

 105   Decision of the Full Bench in P Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897, 11 May 2000, per Ross VP, Acton SDP and Cribb C, at para 64. Endorsed by the Full Bench decision in Ben Clifton Sabeto v Waterloo Car Centre Pty Limited trading as Red Spot Rentals, PR930816, 20 May 2003, per Acton SDP, O'Callaghan SDP and Foggo C, at para 8.

 106   P Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, op cit, at para 73. Also endorsed in Ben Clifton Sabeto v Waterloo Car Centre Pty Limited trading as Red Spot Rentals, op cit, at para 8.

 107   Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, op cit, at para 75.

 108   Tenix Defence Systems Pty Ltd v Fearnley, Print S6238, 22 May 2000, per Ross VP, Polites SDP, Smith C, at para 83.

 109   Ross VP, in Shorten and Others v Australian Meat Holdings Pty Ltd, (1996) 70 IR 360, 361.

 110   Wadey v YMCA Canberra [1996] IRCA 568 (12 November 1996).

 111   Re: P. Annetta, op cit, at para 16.

 112   Ms Marten’s evidence included: ‘I’m a payroll officer. I don’t deal with HR issues very often.’ (PN2468)

 113   PN2403.

 114   PN2289 & PN2899.

 115   Exhibit C2, Attachment D.

 116   PN2905 - PN2923.

 117   [2010] FWAFB 8868, 2 December 2010, per Kaufman SDP, Richards SDP, Hampton C.



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