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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s170LW application for settlement of dispute

MARITIME UNION OF AUSTRALIA

and

AUSTRALIAN PLANT SERVICES PTY LTD

(C2001/472)

Various employees

Maritime industry

   

SENIOR DEPUTY PRESIDENT LACY

MELBOURNE, 3 SEPTEMBER 2001

Settlement of dispute re disciplinary action - certified agreement - powers of private arbitration.

DECISION

Introduction

[1] The Maritime Union of Australia (MUA) has applied to the Commission by Notice under a dispute settling procedure in an agreement, in accordance with the requirements of rule 66 of the Australian Industrial Relations Commission Rules 1998, for the determination of a matter in dispute between it and Australian Plant Services Pty Ltd (APS). According to the MUA's application, notice of which was given on 15 February 2001, the dispute concerns the application of cll 12 and 13 of the Australian Plant Services Pty Ltd Agreement 19991 (the Agreement).

[2] In its application, the MUA was seeking a resolution of the dispute by conciliation, failing which it would ask the Commission for orders directing APS:

[3] In essence, the MUA contends that the disciplinary process in cl 12 of the Agreement has not been applied in accordance with its terms. APS challenges this contention. The central questions which the Commission must decide are whether:

[4] APS also contends that, irrespective of the merits of the MUA application, it is incompetent and beyond the jurisdiction of the Commission because the dispute is about discipline in the workplace, it is of an interstate character and, accordingly, outside the scope of allowable award matters in s 89A of the Workplace Relations Act 1996 (the Act). This is a broad outline of the APS contention which is set out in more comprehensive terms below.

The Proceeding

[5] When the MUA application was listed for hearing on 21 February 2001, Mr Houlihan appeared by leave on behalf of APS and announced that, although APS disputed the Commission's jurisdiction to deal with the MUA application, APS would agree to the Commission endeavouring to settle the matter by conciliation. The jurisdictional ground upon which APS then relied was that the dispute did not relate to an allowable award matter under s 89A of the Act and it was not within the power of the Commission to make the orders that the MUA was seeking. Mr Bandt appeared by leave as Counsel on behalf of the MUA and agreed that the Commission should endeavour to resolve the dispute by conciliation while maintaining that the Commission had jurisdiction to hear and determine the dispute by arbitration if conciliation was unsuccessful.

[6] Attempts to resolve the matter by conciliation on 21 February 2001, and through subsequent discussions between the parties on and after this date, were unsuccessful and the MUA application was listed for arbitration on 13 and 14 March and 11 April 2001. At the commencement of the hearing on 13 March 2001, Mr Houlihan informed the Commission that APS maintained its jurisdictional objection, opposed the application on its merits and agreed to have the jurisdictional matter dealt with as part of the substantive hearing of the application rather than as a preliminary issue.

[7] Mr Bandt called as witnesses for the MUA, Messrs Warren Cartwright, Anthony Borg Terrence Glover and David Cushion. Ms Julie-Anne Lucas and Messrs Anthony Brincat and David Hawkins gave evidence on behalf of APS. The evidence was completed on 14 March 2001. When, on 11 April 2001, the matter resumed, Ms McKinnon appeared with Mr Houlihan to make submissions on behalf of APS. At the conclusion of the submissions on 14 April 2001, I reserved my decision and adjourned the matter to a date to be fixed.

Statutory Provisions

[8] The appropriate starting point for present purposes is s 170LW of the Act. It provides as follows:

"170LW Procedures for preventing and settling disputes

[9] In view of the jurisdictional issues that have been raised by APS, it is appropriate at this point to refer to the provisions of ss 89 and 89A of the Act. Section 89 of the Act relates to the functions of the Commission. Section 89A is concerned with the Commission's powers to prevent and settle disputes. Section 89 provides:

[10] Section 89A of the Act not only confers powers on the Commission for making awards but also imposes certain restrictions on the exercise of those powers. Section 89A(1) of the Act provides:

[11] Section 89A(2) of the Act proceeds to list 20 matters under the general heading of "allowable award matters" and s 89A(3) limits the Commission's power in making awards as minimum rates awards with respect to the allowable matters. Section 89A(6) confers power on the Commission to include in an award matters that are incidental to the allowable award matters and necessary for its effective operation.

Background

[12] Although there are differences in the evidence about the dialogue between, and the demeanour of the personalities involved in the dispute, which will be illustrated in greater detail later in these reasons, the chronology and the fact of the events themselves is largely uncontentious. Accordingly, a summary of the uncontentious facts may be stated as an overview of the fabric underpinning the issues in dispute.

[13] APS is a maintenance service provider to Patrick Stevedores (Patricks) throughout Australia. In Melbourne, APS operates at East Swanson Dock and Webb Dock. The MUA is an organisation of employees whose members include persons engaged as Maintenance Tradepersons and Maintenance Workers in the APS maintenance services for Patricks. Tony Borg and Warren Cartwright are two such persons. APS engaged each of them to work at East Swanson Dock in 1998 when it became the maintenance service provider for Patricks. Prior to 1998 Mr Borg and Mr Cartwright had been employees with Patricks or others of its service providers for 24 years and 13 years respectively. Each had been a long-term member of the MUA and Mr Borg is, and had been for 27 years, a delegate for that organisation.

[14] On 14 December 2000 Mr Cartwright discovered that APS had not paid him for the day on 8 December 2000. Mr Cartwright went to the administration office at about midday on 14 December 2000 to query the pay discrepancy. He went in company with Mr Borg who, at that time, was going to the administration office in his capacity as a union delegate to inquire about proposed changes in sick leave pay and the annual leave agreement between APS and the MUA.

[15] Julie-Anne Lucas is an Administration Assistant with APS. She has payroll responsibilities as part of her role. When, on 14 December 2000, Mr Cartwright asked Ms Lucas about the discrepancy in his pay, Ms Lucas told him that it was because she had not received a signed time sheet authorising payment to Mr Cartwright for 8 December 2000. There followed a verbal altercation between Mr Cartwright and Ms Lucas, which I refer to as "the incident", during which Mr Cartwright insisted several times that he had completed a time sheet for 8 December and Ms Lucas maintained that it had not been provided to her and it was not her role to look for time sheets when she was calculating and paying wages. Ms Lucas was emotionally upset by the incident and subsequently left the office as a result. Mr Cartwright also left the area.

[16] About two hours after the incident, Mr Cartwright, at the invitation of Ms Lucas, returned to the office and arrangements were made for Mr Cartwright to be paid for 8 December 2000.

[17] The following day, namely 15 December 2000, Ms Lucas told David Hawkins, the Engineering Services Manager of APS, of the incident between Ms Lucas and Mr Cartwright. He raised the issue, initially, with Mr Borg and called for his and Mr Cartwright's explanation of the events. In the course of Mr Hawkins' investigation there were some heated exchanges between he and Mr Borg. Mr Hawkins believed that Mr Borg had physically threatened him in the course of their discussions concerning the incident on 14 December. The exchanges between Mr Hawkins and Mr Borg were followed later in the day by a number of meetings between Mr Hawkins, the employees involved in the incident on 14 December, Mr Borg and MUA officials, culminating in Mr Hawkins issuing "first and final" written warnings to Messrs Cartwright and Borg and suspending each of them from work for two weeks without pay.

[18] The terms of the written warnings and suspension are identical for each of Mr Cartwright and Mr Borg save for the description, in the first paragraph, of the incident in respect of which the warnings and suspension were given and applied. The warning addressed to Mr Cartwright, omitting formal parts, reads as follows:

[19] The first paragraph of Mr Borg's written warning is as follows:

[20] Three primary issues of fact arise out of this background which require further consideration. The first is the conduct of Mr Cartwright on 14 December 2000 and how this conduct affected Ms Lucas. The second issue to be considered is Mr Borg's conduct in relation to Mr Hawkins on 15 December 2000. Finally, it is necessary to look at the grievance process that Mr Hawkins undertook on 15 December 2000 and, whether, in deciding that Messrs Cartwright and Borg should be disciplined, the agreed disciplinary process was applied according to its terms.

The Evidence

[21] The Agreement, the application of which is in dispute, was certified in the Commission on 20 December 1999. It was expressed to come into force on 13 December 1999. The nominal expiry date of the Agreement is 1 October 2001. Clause 12 of the Agreement is concerned with matters of employee performance and discipline. It details a process for counselling and disciplining employees in respect of poor performance and/or behaviour. Clause 13 of the Agreement provides for the settlement of disputes and grievances. It is appropriate that the provisions of those two clauses of the Agreement be set out in full.

[22] The evidence regarding the events of 14 and 15 December 2000, was largely contained in witness statements filed before the day of the hearing, supplemented by oral evidence given by each of the witnesses, who were then cross-examined on their witness statements and their oral evidence.

(a) The incident on 14 December 2000

[23] There were three witnesses to the incident in the administration office on 14 December 2000, namely Mr Cartwright, Mr Borg and Ms Lucas. Although Mr Brincat came into the administration office during the incident, he did not observe the exchanges that went on between Ms Lucas and Mr Cartwright. Ms Lucas in her evidence said in effect that Mr Cartwright came into the office and asked why he had been paid one day short. There was then an exchange during which Ms Lucas tried to explain that there was no time sheet submitted for Mr Cartwright in respect of the day for which he was not paid and that Ms Lucas did not have a responsibility to chase up time sheets that were missing. Ms Lucas went on to say that the "conversation began to get heated, and we both raised our tones at one another ... I began to feel threatened by the situation".4 Ms Lucas said "I felt victimised and intimidated by the situation"5. Ms Lucas said that it was not what Mr Cartwright said, but rather "the tone and manner that he was talking to me"6 which made her feel threatened and intimidated.

[24] Mr Borg, who was present during the exchanges between Mr Cartwright and Ms Lucas, did not present any threat to Ms Lucas. Asked in cross-examination whether Ms Lucas felt threatened by Mr Borg, Ms Lucas said "No. I have a good rapport with Tony"7.

[25] Ms Lucas said that when it seemed as though things were getting out of hand with Mr Cartwright she asked him to leave the room and he did so. Ms Lucas then telephoned Mr Carver in Sydney to pursue the inquiry Mr Borg was making about sick leave and annual leave. Ms Lucas said that during the telephone conversation with Mr Carver she was thinking about Mr Cartwright's claims and she began to cry.

[26] Mr Cartwright subsequently returned to the room while Ms Lucas was dealing with Mr Borg's inquiry by telephone with Mr Carver in Sydney. Ms Lucas, while on the phone to Mr Carver, overheard a conversation between Mr Cartwright and Mr Borg while they were waiting in the room for Ms Lucas to get off the phone, in which Mr Cartwright was asking Mr Borg if he thought that Mr Cartwright was being unreasonable in expecting Ms Lucas to make a search for his time sheet when calculating and paying wages. Ms Lucas heard Mr Cartwright say that he thought he was being victimised. Ms Lucas said that at that time "I was still threatened and upset from the previous conversation"8. And when Ms Lucas finished the telephone conversation with Mr Carver she left the room saying "I am going out to get some air, you bastard"9.

[27] Soon after Messrs Cartwright and Borg left. Ms Lucas then had a cup of coffee with Mr Brincat, who helped her to "calm down", and Ms Lucas asked Mr Brincat to get Mr Cartwright to come back so that Ms Lucas could try to help him. Mr Cartwright did return to her office and Ms Lucas arranged for his underpayment to be rectified. Ms Lucas said that she then apologised to Mr Cartwright saying that if he felt victimised in any way "I can assure you that it was not intended"10.

[28] Mr Cartwright's account of the incident on 14 December 2000 does not diverge significantly from the account that Ms Lucas gave of the events. He described Ms Lucas' initial response as "snobbish" in nature.11 However, his evidence generally is to the effect that there was a circular argument between him and Ms Lucas, to the effect that he believed that he had a right to be paid and Ms Lucas' insistence that it was not her responsibility to go looking for his time sheet if it was not delivered to her office by the due date. Mr Cartwright said that, finally, Ms Lucas told him to get out of the office while she dealt with Mr Borg's inquiry. Mr Cartwright then left the office for about 15 minutes.12 When Mr Cartwright returned to the office he engaged in a conversation with Mr Borg while Ms Lucas was on the telephone. In the course of that conversation he said to Mr Borg "I feel like there's a vendetta against me"13. According to Mr Cartwright, Ms Lucas then said that there was no vendetta against Mr Cartwright and, soon after, Ms Lucas began crying and left the room. Mr Cartwright thought that Ms Lucas was referring to him when she used the term "bastard"14 as she was leaving the room.

[29] Mr Cartwright left soon after Ms Lucas walked out of the office. He returned to the office about one hour later when Mr Brincat told him that Ms Lucas wanted to see him. Mr Cartwright said that when he returned to Ms Lucas' office Ms Lucas said to him that she could arrange to have his day's pay deposited into his bank account by the end of the day or the next day15. He said that Ms Lucas then talked to someone on the phone and arranged for that to be done. When she hung up the phone, Ms Lucas explained that his pay would go in and said to him "I'd also like to apologise for the way things got out of hand before."16 Mr Cartwright thanked Ms Lucas and then left her office, thinking that was the end of the matter.

[30] Mr Borg in his written witness statement17 simply adopted what Mr Cartwright had said in his witness statement about the incident on 14 December 2000. He said that on Thursday, 14 December, at about 12.10 pm, he went into Ms Lucas' office with an enquiry regarding the changing of the sick pay and annual leave agreement. He said "Warren Cartwright went to the office with me with a pay enquiry". In cross-examination Mr Borg expanded somewhat on his description of the incident as he saw it. He said the exchange between Ms Lucas and Mr Cartwright was going backwards and forwards and "just getting nowhere". At one stage he told them both to "cut it out."

[31] Mr Brincat in his witness statement18 said that he arrived at the administration office about 12.15 pm. He saw Mr Borg seated and Mr Cartwright standing in the office. He goes on to say that he "looked at Julie-Anne [Lucas] and saw that she was on the telephone shaking and crying".19 He said he then asked what was going on and Mr Cartwright replied "I want to get paid for Friday which was missing from my pay."20 Ms Lucas then left the office using the word "bastard" as she passed the three men. According to Mr Brincat he said to Messrs Cartwright and Borg "you realise this situation will end up going further"21. In cross-examination Mr Brincat said that he had a cup of coffee with Ms Lucas after the incident, but she did not say anything then about feeling physically threatened during the incident22.

(b) Mr Borg's conduct on 15 December 2000

[32] According to Mr Hawkins he arrived at work at about 7.15 am on Friday, 15 December 2000, and Ms Lucas told him of the incident the previous day23, but she did not make a complaint or, it seems, express any grievance about the incident.24 Shortly after he emerged from Ms Lucas' office at about 7.25 am, Messrs Glover, an MUA delegate and Borg came to see him to discuss "some issues". Mr Hawkins told Mr Borg that he was disappointed in him for allowing the situation on 14 December 2000 to get to the stage where Ms Lucas left the office crying. Mr Hawkins said in evidence that at first Mr Borg smiled and he told him to wipe the smile off his face. Mr Borg, according to Mr Hawkins, then began yelling and showing aggression towards him so he asked Messrs Glover and Borg to leave his office.

[33] After Messrs Glover and Borg left his office Mr Hawkins telephoned APS's General Manager, Edouard Atichian, who told him "Under the grievance procedure in the enterprise agreement you are required to get everyone together and sit down and discuss, and if possible, sort out this problem"25.

[34] Mr Hawkins said that at about 8.15 am on 15 December 2000, he, in company with Mr Brincat, met with Messrs Glover and Borg. He asked Mr Borg to arrange for Mr Cartwright to attend the meeting but was told that Mr Cartwright would not be attending the meeting without a union representative being present. Mr Hawkins said that he told Mr Borg that they "are required to follow the grievance procedure in such situations before involving senior union delegates"26. According to Mr Hawkins, Mr Borg "then became aggressive, in both tone and body language, saying to me in words to the effect that "I will make your life hell - I'm going after you mate - I will be a thorn in your side - I was here when you were 15 mate so watch out"27. Mr Hawkins said that the following exchange occurred between him and Mr Borg:

[35] Mr Hawkins said that both he and Mr Borg were raising their voices. He called the meeting to an end and telephoned Mr Atichian and advised him that Mr Borg had threatened him.

[36] Mr Borg's account of the meeting with Mr Hawkins differs more in degree than in substance. Mr Borg said that when he first went to the office on the morning of 15 December 2000, Mr Hawkins "charged at me and said wipe that fucking smile off your face"29. He said that Mr Hawkins was shouting and "carrying on" and asked Mr Borg why he had not stopped the argument the previous day. Mr Borg was not prepared to bring Mr Cartwright to the office unless the union organiser was present. He said he thought Mr Hawkins was planning to discipline Mr Cartwright and, in the circumstances, Mr Cartwright was entitled to have an organiser present.

[37] Speaking about the alleged threat to Mr Hawkins, Mr Borg said that he told Mr Hawkins he "would make it hard for him ... and what I can not fix on the job I will fix outside"30. He denied any suggestion that he was threatening Mr Hawkins with any physical violence.

[38] Mr Glover, who was present during the first two meetings between Mr Hawkins and Mr Borg on the morning of 15 December, said that Mr Hawkins' first words to Mr Borg were "wipe the fucking smile off your face, this is serious, why didn't you stop that argument"31. In his witness statement Mr Glover confirmed that Mr Borg had told Mr Hawkins that he would make it hard for him and that what he could not fix on the job he would fix outside. In cross-examination Mr Glover agreed that during the exchange that occurred between Mr Borg and Mr Hawkins at about 8.15 am on 15 December, Mr Borg, in response to Mr Hawkins, had said that the proposal to fix the matter outside was not a threat but a promise.32

[39] Mr Brincat gave evidence that was consistent with the evidence of Mr Hawkins concerning Mr Borg's alleged threat to Mr Hawkins.33

(c) Grievance and Disciplinary Process

[40] At 10.00 am on 15 December, Mr Hawkins convened a meeting with Messrs Glover, Borg, Cartwright and Brincat, and Ms Lucas. Mr Hawkins in his witness statement says that he began by telling those present that "the reason for this meeting is the serious misconduct allegation arising from Thursdays' meeting - not what actually may have contributed to the cause"34. He then records that each of the protagonists gave a description of the incident on 14 December, which, as recorded in Mr Hawkins' witness statement, essentially reflects the description of events in paragraphs 23 to 31 above. One point of difference is Ms Lucas' elaboration of her use of the word "bastard". According to Mr Hawkins' statement, Ms Lucas said that "it was directed at Tony Brincat as he had allowed this situation with the pay sheets to get to this"35. The meeting concluded. Mr Hawkins said that at this point he "had achieved all the sequence of events from both sides"36.

[41] Mr Hawkins said that at about 10.30 am on 15 December, he received a telephone call from Mr Cushion and, at Mr Cushion's request, arranged for a meeting at 1.30 pm that afternoon. The meeting, which was attended by Messrs Hawkins and Haringsma of APS, and Messrs Cushion, Cartwright, Borg and Glover from the MUA, began at about 2.00 pm. Mr Hawkins said that he told the meeting that the issues of concern for the meeting were Mr Cartwright's serious misconduct on 14 December, and Mr Borg's serious misconduct on the morning of 15 December. Mr Hawkins said that he summarised his view of events, during which Mr Borg needed to be "verbally restrained from outbursts" by Mr Cushion on two occasions.37 He said that at the end of summary of the incidents he and Mr Haringsma left the room while the union and the employees discussed the events.

[42] Subsequently, Mr Hawkins asked Mr Cushion to attend his office and, after some discussion about extending the Webb Dock program "MUA Elimination of Bullying in the Workplace" to East Swanson Dock, Mr Cushion suggested that counselling Messrs Borg and Cartwright and getting the program underway was a fair way to deal with the incidents on 14 and 15 December. Mr Hawkins' evidence is that he disagreed with Mr Cushion's suggestion and said he wanted both employees dismissed, but he would not dismiss them, instead suspending them from duty without pay for not less than two weeks.38 Mr Hawkins said that he and Mr Cushion then returned to the room occupied by Messrs Borg and Cartwright and informed them that Mr Hawkins had decided to suspend them without pay for two weeks. Each of them objected on the ground that the penalty was too severe.

[43] According to Mr Cartwright he was told at about 10.00 am on 15 December 2000, that Mr Hawkins wanted to see him. He arrived at Mr Hawkins' office at about 10.30 am and, after Mr Hawkins read out Ms Lucas' version of events on 14 December, Mr Cartwright said that he disputed that version. Ms Lucas was then called in and there was a discussion about the events of 14 December. The meeting concluded with Ms Lucas apologising and Mr Cartwright saying that he accepted Ms Lucas' apology and, as far as he was concerned the matter was finished. However, according to Mr Cartwright, Mr Hawkins said that he did not accept that that was the case.39

[44] In his witness statement Mr Cartwright says that he attended a meeting involving Messrs Hawkins and Haringsma of APS, and Messrs Cushion, Borg, and Glover from the MUA at about 1.30 pm on 15 December 2000. He said that in the course of that meeting he was told that he was being suspended for two weeks without pay.40 Elaborating on the statement in his evidence in chief, Mr Cartwright said that Mr Hawkins read out a prepared statement of what had happened the day before, including an allegation that Mr Cartwright had "acted in an intimidative manner" towards Ms Lucas. Mr Hawkins left the room with Mr Cushion 41 to discuss the issues.

[45] Mr Cushion said in his witness statement that he received a message on 14 December 2000 to the effect that Mr Hawkins wanted to speak with Mr Cartwright and he would not allow a union representative to be present during the meeting. Mr Cushion telephoned Mr Hawkins to be told that Mr Hawkins just wanted to have a chat with Mr Cartwright. Mr Hawkins telephoned Mr Cushion later in the day and arranged a meeting for 1.30 pm the next day, 15 December.

[46] According to Mr Cushion, the meeting at 1.30 pm on Friday, 15 December 2000 consisted of Mr Hawkins reading to the group assembled a record of the events of 14 December with Mr Cartwright responding, followed by Mr Hawkins making a statement about Mr Borg's conduct earlier that day and Mr Borg responding. Mr Cushion then met with Mr Hawkins privately during which Mr Borg proposed a joint management and union initiative of education to deal with the issue. Mr Hawkins however, said that he viewed the matter seriously and he intended suspending Messrs Cartwright and Borg for two weeks without pay. Mr Cushion said that he disagreed with Mr Hawkins' decision and proposed taking the matter further. Messrs Cushion and Hawkins then returned to the meeting room and told Messrs Cartwright and Borg of Mr Hawkins' decision.

Jurisdictional Issue

[47] When APS first challenged the jurisdiction of the Commission to deal with this matter under the disputes and grievances provisions in the Agreement, it contended that the powers of the Commission that may be exercised under s 170LW are constrained by the limitations found in s 89A of the Act. The disputed issue in this case, so APS submitted, is a disciplinary matter and, as such, outside the scope of the matters allowable under s 89A of the Act.

[48] At the time of the initial APS jurisdictional objection in this matter the decision of the High Court of Australia in Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission42 (henceforth referred to in these reasons as "the Private Arbitration Case" for ease of reference) was still pending. That decision was published on 15 March 2001. Subsequently, APS expanded the scope of its jurisdictional challenge, contending that the application of the Agreement extended to APS sites in States other than Victoria and, as such, the Agreement was in settlement of an interstate industrial dispute. In terms of the premises, the decision of the High Court in the Private Arbitration Case is distinguishable on the basis that it was confined in its application to matters that are the subject of a local dispute. APS contends that the Commission's power to make an award in settlement of an interstate industrial dispute is and remains subject to the limitations imposed by s 89A of the Act. Discipline in the workplace is not an allowable matter under s 89A of the Act. As the MUA application relates to a disciplinary matter it is incompetent.

[49] Ms McKinnon on behalf of APS submitted that the agreement in this case differed from the agreement under consideration in the Private Arbitration Case. It was Ms McKinnon's submission that the Gordonstone enterprise agreement that was the subject of consideration in the Private Arbitration Case, applied at Gordonstone. It applied at one mine in one State. That meant that it did not have the interstate element that was required for it to fall under the definition of "industrial dispute" as that expression appears in s 4 of the Act. In this case, so the submission goes, the matter before the Commission falls within that definition because, firstly, the dispute is over the application of the agreement and, secondly, the agreement applies at seven sites across Australia. It applies in New South Wales, Victoria, Western Australia and Queensland. That gives it the interstate element that is necessary for the matter to be termed an "industrial dispute" for the purposes of the Act. As an industrial dispute of the kind defined by the Act it fell to be determined by the Commission in the performance of its functions under s 89(a) and not s 89(b) of the Act.

[50] Ms McKinnon submitted that the effect of making the orders that are sought by the dispute notifier in this matter is that the Commission would be exercising the powers of arbitration that it gets from a composite reading of ss 89, 89A and 170LW of the Act.

[51] Ms McKinnon, in expanding her submission, referred to the principal object of the Act as reflected by s 3(h), which is:

[52] The "specified limits" to which s 3(h) refers, Ms McKinnon argued, are established by section 89A of the Act. The Act defines an industrial dispute as one which extends beyond the limits of any one State and one that is about matters pertaining to the relationship between employers and employees. The company and the employees are covered by the Agreement. The Agreement applies across four States and that means that this matter falls within the definition of an "industrial dispute" as defined by s 4 of the Act and, as such, must fall within the ambit of s 89(a) of the Act.

[53] Ms McKinnon drew attention to the similarity between the words in s 89(a)(ii) and those used in the objects as expressed in s 3(h) of the Act. The "specified limits" in the Act are, according to Ms McKinnon's argument, those found in sections 89A(1)(a) and (b) of the Act. These sections of the Act limit the matters over which the powers derived from s 170LW and conferred upon the Commission by the disputes procedure in an agreement can be exercised. The MUA notice of dispute is, so it was submitted, incompetent.

[54] According to the MUA submissions, the Commission's jurisdiction in this matter derives from s 170LW of the Act and the provisions of cl 13 of the Agreement. The matter before the Commission, so it is said, is akin to an interstate dispute founding an agreement and there then arising out of that a local dispute that is solved by the dispute settlement procedures. The dispute relates to the application of the discipline procedures and the grievance procedures by Mr Hawkins and the company against the employees. It is not necessary to be able to characterise a dispute that arises as an interstate industrial dispute within the meaning of the Act to attract the jurisdiction of s 170LW and even if it is something that only arises in one state, the Commission can still exercise powers pursuant to s 170LW. Whether or not it is an industrial dispute is irrelevant to the exercise of jurisdiction under the provisions of the Agreement and s 170LW of the Act.

[55] Section 89(b) of the Act gives the Commission jurisdiction to exercise the functions under cl 13 of the Agreement. Section 89A does not limit the powers which may be exercised by the Commission in discharging those functions. It is clear, Mr Bandt submitted, that if the Commission is exercising powers given to it pursuant to disputes settlement procedure, then s 89(b) of the Act is the source of the Commission's power to make orders and s 89A does not limit the orders that the Commission may make.

Powers of the Commission under s 170LW

[56] Section 170LW is essentially a replication of s 170MH of the Industrial Relations Act 1988 (IR Act) as inserted by the Industrial Relations Act Reform Act 1993. It authorises the Commission to "settle disputes over the application of [an] agreement".43 And, like its IR Act predecessor, it authorises the Commission, under agreed dispute resolution provisions that have been incorporated into a certified agreement, to exercise a power of private arbitration and make decisions as to the legal rights and liabilities of the parties to the agreement.44 There is an important distinction between a power of private arbitration to make decisions as to the legal rights and liabilities of parties to an agreement and judicial power to determine rights and liabilities. In making decisions as to the legal rights and liabilities of the parties, where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. The High Court emphasised this distinction in the Private Arbitration Case in the following way:

[57] An important limitation on the Commission's powers under s 170LW is the kind of disputes that may be subject to resolution by the Commission. Parliament has authorised the Commission to exercise powers under an agreement "to settle disputes over the application of the agreement" and, accordingly, its powers are limited to disputes of that kind. Therefore it is necessary for the Commission, in each case where it is asked to deal with a matter arising under the dispute settling procedure in an agreement, to ascertain the character of the dispute that is before it in order determine whether the matter is a dispute over the application of the agreement.46 And, importantly, the character of the dispute is distinguishable from the orders that may be made in settlement of the dispute.47

[58] In exercising its powers under s 170LW as authorised by an agreement, the Commission is performing a function that is conferred on it by the Act. As such it falls within the functions identified in s 89(b) of the Act and described as "such other functions as are conferred on the Commission by this or any other Act". This is in contrast to the functions of the Commission under s 89(a)(i) and (ii), namely "to prevent and settle industrial disputes ...by conciliation and ... arbitration." The procedures encompassed by s 170LW, in conjunction with appropriate relevant grievance procedures, are designed to ensure that the agreement made in settlement of the dispute is effective and enduring.48 Perhaps s 170LW has an even wider scope when its application is derived from an agreement that has been certified under Division 2 of Part VI of the Act.

[59] I reject the argument on behalf of APS to the effect that Commission must ascertain whether the matter that has been raised under a dispute settlement provision in a certified agreement is an industrial dispute as defined by the Act. The purpose of s 170LW is to give legal effect to agreed procedures for maintaining the settlement of the dispute in respect of which the agreement has been made. If the dispute is one properly characterised as a dispute over the application of the agreement, it matters not that the dispute that is being dealt with under a dispute settlement provision in a certified agreement is a dispute over the application of an agreement that has an interstate character because the agreement was made in settlement of an interstate dispute. Section 89(b) of the Act authorises the Commission to exercise those functions under cl 12 of the Agreement which the Commission derives from s 170LW of the Act.49

[60] In any event, the argument advanced on behalf of APS about the dispute being of an interstate character simply misconceives the true nature of the dispute in this case and of the process by which the High Court concluded that pars (a), (b) and (c) of s 89A could have no application to the dispute under consideration in the Private Arbitration Case. It was readily apparent in the Private Arbitration Case that the dispute was a local dispute because the agreement there under consideration was confined in its application to one site. However the High Court, in making an observation to that effect, did not intend to suggest that a dispute over the application of an agreement can only be a local dispute if the agreement applies to a single site. That suggestion flies in the face of the High Court's decision in Hegarty's Case.50

[61] In the present matter the dispute relates to the conduct of the management under the grievance procedure and disciplinary action taken against two employees at East Swanson dock. The question is whether the agreement was applied according to its terms with respect to those matters. The resolution of the dispute will have no application beyond the narrow scope of the management and employees directly concerned with the incident at East Swanson dock. The resolution of the dispute does not involve any variation of the terms of the agreement so as to affect other sites that are bound by the agreement. The dispute is a local dispute, first over the application of the agreement in respect of two individuals who were involved in an incident at East Swanson Dock on 14 December 2000, and, second, the application of the agreement in respect of the conduct of another individual at the same site on 15 December 2000. The fact that the agreement has application to sites in States other than Victoria does not convert what is essentially a local dispute into an interstate dispute.51

[62] In the view that I take of the facts in this case the APS jurisdictional challenge must fail.

[63] What then of the orders that the Commission may make in the exercise of powers under an agreement in settlement of a dispute over its application. It seems that the scope and nature of the orders that the Commission may make in such circumstances will depend on the agreement of the parties as recorded in their certified agreement, provided only that it is reasonably incidental to the application of the agreement to which the dispute relates.52 The Agreement in this case confers on the Commission the right "to conciliate and, if necessary, arbitrate the matter in dispute."

[64] Essentially, the dispute in this case is over APS implementation and application of the grievance procedure and APS application of the disciplinary measures under the Agreement. Consequently, the Commission is required to determine:

Submissions

[65] Mr Bandt, on behalf of the MUA, submitted that in determining the issues in this case there are two important underlying factors to be borne in mind. He contended that neither the conduct of Mr Cartwright on 14 December 2000, nor that of Mr Borg on 15 December 2000, warranted any disciplinary action under the Agreement. The second seminal factor that Mr Bandt raised was that the disciplinary procedure that APS followed was inconsistent with the terms of the Agreement. In essence, the provisions of cll 12 and 13 of the Agreement were apparently merged in their application to the situation, and simply misapplied, either in a collective way, or individually.

[66] A further contention that Mr Bandt pursued was to the effect that, if, contrary to the primary submission, the procedures that APS followed were consistent with the requirements of cll 12 and 13 of the Agreement, the punishment did not fit the indiscretion. This was particularly so, Mr Bandt submitted, in circumstances where Ms Lucas assumed responsibility, in part at least, for the course of events on 14 December 2000, and identified Mr Brincat as being responsible for the cause or source of the problem in the first place.

[67] Mr Bandt submitted that the Commission ought to find that, as he has contended, APS has wrongly applied the Agreement, and order that APS pay the two weeks wages for each of Mr Cartwright and Mr Borg and remove from the personal file of each of them the first and final warnings that APS has issued The submission continued by suggesting that the scope and terms of the order are a matter of discretion for the Commission and may be formulated with any combination of the primary orders that the MUA seeks in this case.

[68] On the first point raised in his submissions, Mr Bandt argued that Mr Cartwright had a legitimate right to be in the office on 14 December 2000, asking Ms Lucas about the discrepancy in his pay. The initiation of the heated exchanges that occurred was as much the doing of Ms Lucas as it was of Mr Cartwright and at no stage was the conduct of Mr Cartwright intimidating or threatening of Ms Lucas. Furthermore the evidence, according to Mr Bandt, did not support a finding that Ms Lucas in fact felt intimidated or threatened.

[69] Turning to the second point of the MUA contentions, Mr Bandt took me to the provisions of cl 12 of the Agreement and essentially argued that APS had completely ignored the procedural requirements of the clause, moving instead to the unjustified position of final warnings and suspension.

[70] Mr Bandt proceeded to address cl 13 of the Agreement and submitted that it has application in three distinct situations and could not be applied, as it was in this case, to cl 12 discipline situations. The three situations that Mr Bandt identified as falling within the purview of cl 13 are where:

[71] Mr Bandt's submission was then to the effect that Mr Hawkins was intent on disciplining Mr Cartwright from the outset on the morning of 15 December 2000. Yet Mr Hawkins did not make that known to anyone, least of all Mr Cartwright. He was obliged by the provisions of cl 12 to inform Mr Cartwright of his investigation into Mr Cartwright's behaviour as part of the disciplinary process and failed to do so. Ultimately, Mr Hawkins imposed the penalties without any due regard to the provisions of cl 12 or the rights of the two employees who suffered the penalties.

[72] Finally, on the issues of merit, Mr Bandt addressed the appropriateness of the penalties that APS imposed on Messrs Cartwright and Borg. Referring to the employees' records, the nature of the behaviour, the conduct of all of the parties involved, the range of possible penalties that could have been imposed, and the absence of a proper application of the Agreement, the penalties were said to be unfair.

[73] Mr Houlihan, on behalf of APS, submitted that, as far as the merit issue goes, the MUA has three tasks to perform as the notifier in this matter. Namely, they need to establish that the:

[74] Mr Houlihan submitted that the MUA failed to establish any of the above.

[75] Ms Lucas is a mature, competent and professional employee, so the APS submissions continued, and since Ms Lucas started with APS in April of 2000, this is the first issue that has given rise to any conflict between Ms Lucas and any employee. Mr Houlihan argued that it was incontrovertible that this mature, competent, professional woman was reduced to tears by something that happened in her office on 14 December 2000. The reason Ms Lucas broke down in tears, Mr Houlihan contended, was because of the aggressive and intimidatory nature of Mr Cartwright as he demanded payment for a time sheet that Ms Lucas had not received and was sufficiently threatening to cause Ms Lucas to seek to leave the situation as soon as she saw an opportunity to do so.

[76] Mr Houlihan submitted that Mr Borg was, in fact, "foolish enough to threaten his manager." Mr Hawkins felt threatened believing that Mr Borg wanted to "take him out and basically belt him". Mr Hawkins took Mr Borg's words about taking the matter outside to be a threat of physical assault and an immediate threat. What matters in this context, Mr Houlihan submitted, is what the person being threatened believes. The same applies, Mr Houlihan said, in determining whether Ms Lucas was threatened or intimidated.

[77] Mr Houlihan contended that the actions of Messrs Cartwright and Borg are very serious matters warranting disciplinary action. Mr Cartwright had been guilty of bullying Ms Lucas, and Mr Borg of threatening to assault Mr Hawkins. The conduct by both Messrs Cartwright and Borg, Mr Houlihan argued, was sufficiently serious to warrant the company regarding the conduct as serious misconduct.

[78] While being prepared to concede that the pay discrepancy justified Mr Cartwright going to the pay office to see what the problem was, Mr Houlihan submitted that Mr Cartwright did not have the right to then act the way he did when he got there. According to Mr Houlihan, the main issue is not the fact that Mr Borg exercised his right to have his pay properly fixed, it is rather the manner in which he conducted himself when exercising this right.

[79] The company, Mr Houlihan submitted, followed the disputes procedure throughout the process of investigation on 15 December. However, there is no provision in the Agreement for the types of disciplinary action that can be taken in cases of serious misconduct warranting summary dismissal where dismissal does not result and that on this basis the company was entitled to refer to the Employee Policies, Obligations and Entitlements Handbook53 for an appropriate form of disciplinary action. Mr Houlihan submitted that the MUA has not satisfied either the onus of establishing that APS was not entitled to take the action that it did or the onus of establishing that it failed to carry out the proper procedures as outlined in the Agreement.

[80] Mr Houlihan argued that the requirements of cl 13.1 of the Agreement, requiring initial discussion between the employer and the work group leader, was fulfilled when Mr Brincat said to Mr Cartwright at the time Ms Lucas left the office in tears on 14 December, "You know this will go further"54. Alternatively, the requirement of cl 13.1 was fulfilled by the first discussion on 15 December, between Messrs Cartwright and Hawkins about the matter.

[81] The requirements of cl 13.2 concerning discussions which are to take place between the employee, the union delegate and the site superintendent, were fulfilled also according to Mr Houlihan, by Mr Hawkins speaking to Mr Cartwright on the first occasion on 15 December, with Mr Borg, the union delegate, present. And, he continued, there were subsequent discussions with Mr Glover about the matter as well. Mr Houlihan submitted that all the remaining steps in the grievance procedure were followed to the letter.

[82] Turning to the issue of discipline, Mr Houlihan submitted that there are two distinct paragraphs in cl 12.4 that deal with the right of the employer to suspend or stand down an employee. The first one is for the standing down of an employee with pay pending an investigation. The second one is distinguished from this said Mr Houlihan, because it is suspension without pay for up to two weeks in the case of misconduct which does not warrant summary dismissal. They are two separate actions for two separate circumstances and that is the way that the respondent submits that cl 12.4 should be applied.

Findings

[83] As stated earlier, the dispute over the application of the Agreement arises from actions of APS in dealing with a grievance in the workplace and the imposition of disciplinary measures against two of its employees. The appropriate starting point for the Commission in performing its role under s 170LW, that is, settling a dispute over the application of an agreement, is to determine the meaning of the clauses of the Agreement the application of which is in dispute between the parties. It is convenient to deal first with the grievance provision in cl 13 of the Agreement.

[84] Clause 13 begins with a preamble that:

[85] The first step in the process appears in cl 13.1 of the Agreement. It requires that, when an issue first arises in the workplace, an "employee" discuss the matter with the employee's Group Leader. The word "employee" is defined in cl 6 of the Agreement in the following terms:

[86] Clause 18 of the Agreement is concerned with classifications and defines three levels of maintenance employees: Maintenance Tradesperson Level 2, Maintenance Tradespersons Level 1 and Maintenance Worker. The designation Group Leader, as it appears in cl 13.1, is not defined in the Agreement. In its context it must refer to the leader or supervisor of the working group of which the relevant employee is a member. Thus, cl 13.1 requires that a maintenance tradesperson or worker (the employee) who is involved in an issue in the workplace, must first try to resolve the matter with the leader or supervisor of the group to which the employee belongs.

[87] The requirement in cl 13.1 for the matter to be discussed between the employee and his or her group leader is a substantive one. The dictionary meaning of the verb "discuss" is "to examine by argument; sift the consideration for and against"55. Thus, the requirement of cl 13.1 is that the employee and his or her group leader examine or consider the matter in a constructive way with the object of resolving the issue by weighing the competing considerations.

[88] Clause 13.2 details the next step to be taken in the process if the employee and the employee's Group Leader fail to resolve the matter by discussion. In those circumstances the employee and his or her union delegate must try to resolve the issue in discussions with the Group Leader and, failing resolution, with the "Site Superintendent". The expression "union delegate" is not defined in the Agreement, but "union" is a reference to the MUA56. There is no definition in the Agreement for "Site Superintendent". In The Macquarie Dictionary the word superintendent means "... one who has the oversight or direction of some work, enterprise, ... establishment, institution, house etc...."57. In the context of the Agreement, being as it is a multiple site agreement, and of the dispute Site Superintendent must mean the Manager of the Company's East Swanson Dock operation. For the reasons set out in the preceding paragraph, the requirement for the matter to be discussed is a substantive one.

[89] If the matter remains unresolved after discussions between the employee, his or her union delegate, the Group Leader and Site Superintendent, cl 13.3 requires that the matter be the subject of discussion between the "Project Manager" and a full-time union official or their respective delegates. The Agreement does not define the expression "Project Manager". The word "project" has the meanings of "a plan; a scheme; an undertaking"58. In the context of the Agreement it could mean the APS contractual undertaking to provide services for Patricks at the two sites in Melbourne. Alternatively, it could mean the APS contractual undertaking to provide services for Patricks generally. Consequently, the Project Manager could be the person responsible for management of the contract for Melbourne services or the person responsible for the management of the contract generally. In any event it must be a person having some responsibility greater than the Site Superintendent.

[90] If the process set out in cll 13.1 to 13.3 do not resolve the matter within the space of one week,59 cl 13.5 requires the matter to be discussed by the National Secretary of the MUA and the APS General Manager or their respective representatives, with a view to resolving the matter or, failing a resolution, determining a process leading to a resolution.

[91] Failing resolution of the matter or a process leading to its resolution under cl 13.5, the next step in the process is for the matter to be referred to the Commission under cl 13.6 for conciliation and, if necessary, arbitration. The determination of the matter by the Commission is to be final and binding on the parties.

[92] While cll 13.7 to 13.8 of the Agreement are important it is not necessary for them to be considered in the context of the dispute now before the Commission.

[93] Turning then to the issue of discipline and the construction of cl 12 of the Agreement, it is important to note that cl 12 is concerned equally with issues of performance and conduct or behaviour in the workplace.

[94] Clause 12.1 is a preamble in which the parties to the Agreement mutually acknowledge the value of an employee to the business and the interest that the business has in protecting its investment in employees. There follows in cl 12.2 a statement of the aims of the counselling and discipline procedure, namely providing a mechanism for counselling or corrective action in respect of employee performance and behaviour.

[95] Clause 12.2.1 begins with the sub-heading "Counselling Procedure" and sets out in three paragraphs the obligations of APS and the rights of an employee to representation in counselling and confidentiality in matters of a personal nature. The first paragraph of cl 12.2.1 begins with a sentence imposing on APS an obligation to put counselling procedures in place for its employees. By virtue of the sentence that follows the first sentence, APS must ensure that employees receive counselling where necessary before any warning is given. The first paragraph proceeds to impose upon APS an obligation to assist employees to improve in performance related issues and concludes with the conferral of a right on an employee to request the attendance of a union representative in counselling sessions.

[96] The second paragraph of cl 12.2.1 deals with confidentiality. The third paragraph is concerned with recording the advice given to employees about performance and the actions agreed to improve performance.

[97] The counselling procedure that is to be implemented under cl 12.2.1 of the Agreement, except for the obligations imposed on APS in respect of improvement of performance, has general application to situations of performance and conduct alike. Thus, in conduct cases APS must ensure that an employee involved in misconduct receives counselling before being given any warnings. Furthermore, an employee is entitled to request union representation for any counselling.

[98] Clause 12.2.2 of the Agreement confers a right on APS to dismiss, without notice, an employee for serious misconduct, as that term is described in cl 11.5 of the Agreement. Clause 11.5 is concerned with the right of APS in respect of summary dismissal from employment for serious misconduct and describes "misconduct" in the following way:

[99] Where APS exercises the right to dismiss without notice it must, under cl 12.2.2 of the Agreement, confirm its action in writing to the employee, setting out its reasons for dismissal. The right to dismiss without notice is to be exercised by a senior representative of the company.

[100] Provision is made in cl 12.2.3 of the Agreement for a Warning Procedure. What appears from cl 12.2.3 is that, except in cases of serious misconduct warranting summary dismissal, a warning may only be given where an employee's unsatisfactory conduct or performance continues, or other problems arise, after the employee has been counselled about the unsatisfactory conduct or performance. The manner of issuing warnings is then set out in cl 12.2.3.1 (First Warning) and 12.2.3.2 (Final Warning) and 12.2.3.3 (Dismissal). The provision for dismissal under cl 12.2.3.3 of the Agreement is only applicable where an employee continues to engage in unsatisfactory behaviour after warnings have been given.

[101] Clause 12.3 of the Agreement is a saving clause reserving to the employer the right of dismissal without notice for misconduct.

[102] Suspension from duty is the province of cl 12.4 of the Agreement. There are two limbs of cl 12.4. The first limb is based on a premise that APS has a right to stand employees down with pay, and the provision simply records that nothing shall prevent APS from exercising that right for the purpose of conducting an investigation. The second limb of cl 12.4, relevantly for present purposes, confers a right in APS to "suspend without pay for a period of up to two (2) weeks" an employee involved in misconduct which does not warrant summary dismissal. The right that is conferred under the second limb of cl 12.4 is independent of the pre-existing right to stand down employees upon which the first limb of the clause is based. However, the exercise of the right under the second limb is subject to a prior determination that an employee has engaged in behaviour that constitutes misconduct that is not serious enough to justify summary dismissal. In the context of the requirements of cl 12.2.3 of the Agreement that in all cases of misconduct other than serious misconduct warranting summary dismissal, the right of suspension without pay under the second limb of cl 12.4 must be conditional upon an employee first having been counselled and, perhaps, subjected to a first warning at least. Accordingly, APS may, on the ground of misconduct not warranting summary dismissal from employment, suspend an employee without pay for a period of up to two weeks, but only if the employee concerned has been previously counselled about conduct or performance and, in my view, only after the employee has been given a first warning.

[103] It is appropriate next to deal with the findings of fact in the sequence of:

(a) Mr Cartwright's conduct and its effect on Ms Lucas

[104] APS employees are required to complete time sheets for each day worked. The completed time sheets are left in a designated location for the Maintenance Manager to check and then deliver to the administration office at the end of each accounting period for Ms Lucas to make up the pays. On Thursday, 7 December 2000, Mr Cartwright completed his time sheet for 8 December 2000 and left it for checking and delivery to the administration office, because he was taking a rostered day off on the Friday. This procedure was consistent with company practice.

[105] Mr Cartwright was due to proceed on leave at the end of the day on 15 December 2000. When he received his pay advice on Thursday, 14 December 2000, he found that he had not been paid for the day of 8 December 2000. Mr Cartwright went to the administration office, as was his practice when he had a discrepancy in his pay, and the practice generally within APS, to query the pay discrepancy with Ms Lucas.

[106] Ms Lucas told Mr Cartwright that she did not receive his work sheet for 8 December 2000. Mr Cartwright insisted that he had completed a time sheet and that Ms Lucas ought to have made a search for it or contacted him on the following Monday to confirm whether or not he had worked on 8 December 2000, or otherwise made some inquiry to find out why his time sheet for that date had not been submitted. Each began to raise their voice, with Mr Cartwright repeatedly insisting that Ms Lucas should have followed up to find out where his time sheet was and Ms Lucas repeating her denial of any responsibility in that regard. Mr Borg, who was present throughout, suggested to both of them that the conversation was going nowhere and they should stop. I accept also the evidence of Ms Lucas that Mr Borg said to Mr Cartwright at some stage of the exchange between her and Mr Cartwright, "Go easy".

[107] Ms Lucas became upset. She asked Mr Cartwright to leave her office and to come back when he had calmed down. Mr Cartwright complied with Ms Lucas' request and left the office. After Mr Cartwright left the office Ms Lucas began dealing with Mr Borg's inquiry about sickness pay and annual leave. In order to deal with the inquiry it was necessary for Ms Lucas to telephone Chris Carver, APS Shared Services in Sydney. During her telephone discussion with Mr Carver, Ms Lucas began to cry. Mr Borg, with whom Ms Lucas said she had a good relationship, began to console her.

[108] Mr Cartwright came back into the office while Ms Lucas was on the phone to Mr Carver. He struck up a conversation with Mr Borg, essentially asking if Mr Borg thought that it was unreasonable to expect Ms Lucas to inquire of him on the Monday where his work sheet was and saying that he felt that there was a vendetta against him. Ms Lucas says that she heard Mr Cartwright say that he was being victimised. Nothing turns on the actual words used in this context. More significantly, Ms Lucas understood the remark as an allegation against her and reacted by saying that she often underpaid people because their work sheet was missing, inferring that Mr Cartwright had not been singled out for underpayment. Although Ms Lucas was still on the phone waiting on Mr Carver's response, a further exchange ensued between her and Mr Cartwright about the pay issue. It is clear that the general substance of the exchange was simply a repetition of what had passed between the two earlier.

[109] While Ms Lucas was waiting on the phone for Mr Carver and talking to Mr Cartwright, Tony Brincat, a Maintenance Manager, walked into the office. Some short time later Ms Lucas got up and walked out of the office in tears. Her parting words in the general direction of the group of three men were "I am going out to get some fresh air, you bastard". In response to a comment by Mr Cartwright that he found the remark offensive, Ms Lucas said "I don't necessarily mean you". I have reached the conclusion, for reasons that appear below, that Ms Lucas' remark was directed at Mr Brincat.

[110] When Ms Lucas returned to the office Messrs Cartwright and Borg had left. Ms Lucas had a conversation with Mr Brincat about the exchange with Mr Cartwright. I am satisfied that Ms Lucas complained to Mr Brincat that Mr Cartwright would not let her explain her position about not being able to process payment for an employee unless she had a time sheet showing the hours worked. I am also satisfied that Ms Lucas did not complain to Mr Brincat that she had felt threatened or intimidated by Mr Cartwright. Ms Lucas, after having a cup of coffee with Mr Brincat, asked him to have Mr Cartwright come to the office to see her. She declined Mr Brincat's offer for him to be present while she spoke with Mr Cartwright on his return.

[111] About one and one half hours later Mr Cartwright came back to the office to see Ms Lucas. At that time Ms Lucas asked him if he still wanted to be paid and, after Mr Cartwright confirmed that he did, she telephoned Mr Carver in Sydney and arranged for the payment to be credited to Mr Cartwright's bank account. Ms Lucas then apologised to Mr Cartwright for his feeling, in her words, "victimised in any way". According to Mr Cartwright the apology, as he heard it, was "for the way things got out of hand before." In my view, it is reasonable to infer, on either version of the apology, that Ms Lucas accepted some responsibility for the incident.

[112] Early on the morning of 15 December 2000, Ms Lucas told Mr Hawkins, APS's Engineering Services Manager, of an incident in her office the previous day involving Messrs Borg and Cartwright. According to Mr Hawkins, Ms Lucas told him that "she felt very intimidated by Warren Cartwright's behaviour" and that as a result of Mr Cartwright's behaviour, she had been reduced to tears.

[113] I am satisfied that Ms Lucas was upset by the events of 14 December 2000. However, on the basis of the evidence before me, I do not accept that, on 14 December 2000, Ms Lucas "felt very intimidated". That is a matter to be determined according to objective fact and not, as suggested by Mr Houlihan, according to Ms Lucas' subjective view of the matter the day after the event. Ms Lucas who confided in Mr Brincat on 14 December, did not tell him that she felt intimidated by Mr Cartwright. The things that Ms Lucas said to Mr Brincat indicate a degree of frustration with Mr Cartwright's apparent failure to appreciate the policy constraints on her in making payments without a completed time sheet and his failure to accept that it was not part of Ms Lucas' responsibility to search for a time sheet if it was not delivered to her by those responsible for the delivery.

[114] The circumstances do not reveal an element of "fear" or apprehension on the part of Ms Lucas during the exchange between her and Mr Cartwright or subsequently. Mr Borg was present at all times during the discussions between Ms Lucas and Mr Cartwright. He was a person that Ms Lucas trusted and he did not represent any kind of threat to her. Ms Lucas in her evidence said "I have a good rapport with Tony [Borg]"60. Ms Lucas' willingness to see Mr Cartwright alone a short time after the alleged intimidatory behaviour is not consistent with her feeling intimidated. On balance and taking account of all of the evidence of the events of that day, I find it unlikely that Ms Lucas was intimidated by Mr Cartwright's behaviour.

[115] I am satisfied that, on 14 December 2000, Mr Cartwright was justifiably aggrieved about the discrepancy in his pay. He completed his time sheet in accordance with APS policy and he had a legitimate expectation that it would be processed in order that he would be paid for 8 December 2000 at the end of the relevant accounting period.

[116] It is unclear from the evidence how the time sheet failed to be delivered on time. Ms Lucas finally received it on the following Tuesday. Ms Lucas believed that Mr Brincat or Greg Pepprell, one of the two maintenance managers at the time, might have been responsible for delivering the time sheets61. On 15 December 2000, Ms Lucas, in the course of Mr Hawkins' inquiries into the incident, expressed the view that "Tony Brincat ...allowed this situation with the pay sheets to get to this"62.

[117] Mr Cartwright's grievance concerning his pay discrepancy on 14 December 2000 does not excuse his behaviour in the administration office on that day. In my view his behaviour was unsatisfactory. I am satisfied that if Mr Cartwright had been more conciliatory in his initial approach to Ms Lucas the situation that arose on 14 December 2000 would not have developed. After all, Ms Lucas managed to rectify the pay problem after all parties concerned had calmed down. There is nothing to suggest that the same result could not have been achieved without the emotional friction that occurred if a more conciliatory approach had been taken. Though I note that Ms Lucas was not entirely blameless for the situation as it developed on 14 December 2000.

(b) Mr Borg's conduct in relation to Mr Hawkins

[118] Within minutes of Mr Hawkins' meeting with Ms Lucas on 15 December 2000, when she told him of the events of 14 December 2000, he encountered Terry Glover, an APS mechanic and MUA delegate, who had come to Mr Hawkins' office to arrange for a union official to come on site for discussions about the issues concerning Mr Cartwright's pay. Mr Borg arrived at the administration office close on the heels of Mr Glover. I accept the evidence of Messrs Glover and Borg to the effect that Mr Hawkins was acting in an agitated manner when he saw them. He told Mr Borg to "wipe that smile off your face" and for him and Mr Glover to come into his office.

[119] Once inside Mr Hawkins' office he told Mr Borg that he was disappointed in him for failing to stop the argument in Ms Lucas' office the previous day. Mr Borg's retort was that he had tried to stop it but in any event he was neither a policeman nor a referee. Mr Hawkins then rebuked Mr Borg and it seems that he and Mr Borg started yelling at each other with Mr Hawkins finally asking Messrs Glover and Borg to leave. The attack on Mr Borg is curious in the circumstances of this case. Ms Lucas in her evidence before me expressed confidence and trust in Mr Borg.

[120] After dismissing Messrs Borg and Glover, Mr Hawkins decided, in consultation with Edouard Atichian, APS General Manager, to invoke the grievance procedure under the Agreement. It was proposed that a discussion involving all parties to the events on 14 December 2000, would be called to a meeting to "sort out this problem"63. A short time later in the morning of 15 December, Mr Hawkins, in a meeting with Messrs Borg, Glover and Brincat, asked Mr Borg to ask Mr Cartwright to come to the meeting. However, Mr Borg, suspecting that the proposed meeting was part of a disciplinary process, was not prepared to have Mr Cartwright at a meeting with Mr Hawkins without the presence of a full-time union official. Mr Hawkins refused to have a full-time union official present saying that under the grievance procedure an attempt had to be made to resolve the matter with the immediate parties before involving the union.

[121] There are four different accounts of what transpired at the meeting. Mr Borg said in his evidence that he told Mr Hawkins that he "would make it hard for him" and words to the effect that what he could not fix on the job he would fix outside. Mr Borg said that his reference to fixing the matter outside was intended to mean that he would take the matter to the Commission. Mr Hawkins says that Mr Borg was aggressive in tone and body language saying words to the effect that he would make Mr Hawkins' life hell - he was going after him - he would be a thorn in his side and Mr Hawkins had better watch out. Shortly after this exchange, the meeting between Messrs Hawkins, Brincat, Glover and Borg broke up.

[122] I am satisfied that, having regard of all of the accounts of the exchange between Messrs Hawkins and Borg, Mr Hawkins' account is more probable than the account given by Mr Borg. I do not accept Mr Borg's suggestion that the proposal to take the matter outside was intended to mean that he would take the matter to the Commission. In my view, the clear intention of Mr Borg was to convey to Mr Hawkins the impression that he and Mr Hawkins could settle the matter in some physical way outside of the office environment. I regard Mr Borg's conduct as unacceptable. However, Mr Hawkins' must share some of the blame for the altercation. He was, after all, initiating discussions as part of the grievance process. Being antagonistic to one of the parties in the initial stages of the process was unlikely to give that party any confidence in the neutrality of the process and was likely to contribute to an environment in which the grievance process would be unproductive or even counter-productive.

(c) The grievance process and disciplinary action

[123] Mr Hawkins convened a meeting in his office at about 10.00 am on 15 December 2000 between himself, Messrs Brincat, Borg, Cartwright and Glover and Ms Lucas. I accept Mr Hawkins' evidence that he opened the meeting by stating "the reason for the meeting is the serious misconduct allegation arising from Thursdays' [sic] meeting - not what actually may have contributed to the cause."64 I am satisfied that the discussion that ensued was inconclusive as far as Mr Hawkins was concerned. However, I am also satisfied that by the end of the meeting at about 10.30 am on 15 December, if not before, Ms Lucas and Mr Cartwright had reconciled any differences that there may have been between them. In fact, I seriously doubt that Ms Lucas ever had any interest in pursuing the matter for the purpose of having Mr Cartwright punished. I simply cannot accept the suggestion of Mr Hawkins that he was pursuing a grievance that Ms Lucas had.

[124] To the extent that Ms Lucas was aggrieved by the incident on 14 December, her interest on 15 December, in my view, was in securing a process that would ensure that there would be no recurrence of the situation. This may be inferred from the fact that Ms Lucas regarded the source of the problem as Mr Brincat's failure, as Ms Lucas saw it, in the administration of delivery of time sheets. Ms Lucas justifiably was aggrieved by a system that could not ensure safe delivery of the time sheets that are used as a basis for preparing employees' pays, and which allowed the person responsible for delivery of the time sheets to escape the ire of the person who was not appropriately paid as a consequence of a failure in the system. But the inquiry undertaken by Mr Hawkins did not have that object in mind. As Mr Hawkins said in opening the discussion on 15 December, the discussion was about the "serious misconduct allegation" and not about "the cause". The discussion was, in consequence, an inquiry or investigation into alleged misconduct.

[125] At about 2.00 pm on 15 December 2000, there was a meeting between Mr Hawkins and Messrs Borg, Cartwright and Glover, with Dave Cushion, Assistant Secretary of the MUA, in attendance. During the meeting Mr Hawkins made it clear that he thought that Mr Cartwright and Mr Borg respectively, was guilty of serious misconduct; the former for aggressive and intimidating behaviour towards Ms Lucas on 14 December, and the latter for threatening him with violence on 15 December 2000. In spite of Mr Cushion's plea for a resolution based on training and counselling for both employees, Mr Hawkins determined that they would be given first and final warnings and suspended from work for two weeks without pay. Suspension without pay commenced at the end of the shift that day and the first and final notices were issued to Mr Cartwright and Mr Borg the following Tuesday, 19 December 2000.

[126] After the events of 15 December 2000, a dispute arose between the MUA and the APS about the application of the Agreement and the penalty that had been imposed on Messrs Cartwright and Borg. The management and union parties met to discuss the issues but failed to resolve the matter. The MUA accordingly decided to bring the matter to the Commission under s 170LW.

Conclusions

[127] I must conclude that the MUA claims concerning the application of the Agreement in respect of the grievance process are well founded. On 15 December 2000 there was a number of grievances or potential grievances that could have been addressed in this matter:

[128] However, in my view, none of the grievances mentioned in the preceding paragraph was pursued according to the procedure prescribed in cl 13 of the Agreement. To the extent that Ms Lucas, on 15 December 2000, was aggrieved by Mr Cartwright's conduct on 14 December, and I am not convinced that she was, that issue was resolved by the end of the meeting at about 10.30 am on 15 December. However, the issue was not resolved for Mr Hawkins because, by 10.30 am on 15 December, he had concluded, rightly in my view, that Mr Cartwright's conduct in respect of Ms Lucas on 14 December 2000 and Mr Borg's conduct on 15 December, in respect of Mr Hawkins himself, warranted disciplinary action.

[129] In response to a question that I asked of Mr Hawkins in giving his evidence, he indicated that he treated Ms Lucas' explanation of the events of 14 December as a grievance.66 I note that Ms Lucas is not a party to the Agreement.67 If Mr Hawkins decided to deal with Ms Lucas' grievance under the Agreement the first step was for him, as Ms Lucas' Work Group Leader, to discuss the matter with Ms Lucas with a view to resolving the issue as soon as possible. The evidence suggests that Mr Hawkins made no endeavour to resolve the matter directly with Ms Lucas before he attempted to involve the other employees. There were no discussions about the issue between Ms Lucas, her union delegate and Mr Hawkins or anyone else as the Project Manager. If the grievance really was that of Ms Lucas then, to the extent that the Agreement had any application, APS did not deal with it in accordance with cl 13 of the Agreement.

[130] If Ms Lucas' explanation of the events of 14 December gave rise to an issue concerning matters in the workplace which require resolution, which it may well have done, then Mr Hawkins did not articulate it in that way when he opened discussions on the issue on 15 December 2000. On 15 December Mr Hawkins set himself on a course of inquiry directed to one end and one end only, namely the conduct of Mr Cartwright in the administration office on 14 December. That inquiry, along with Mr Hawkins' personal experience with the conduct of Mr Borg on 15 December, was, in my view, the initiation of a disciplinary process that culminated in Messrs Cartwright and Borg being suspended from work without pay for two weeks and being given a final warning. The inquiry into Mr Cartwright's conduct concluded at the end of the meeting at about 10.30am on 15 December 2000.68 In my view APS did not apply the grievance procedure in cl 13 of the Agreement. If I am wrong about that then the procedure was not followed correctly.

[131] I accept that the conduct of Messrs Cartwright and Borg respectively warranted some disciplinary action. Mr Hawkins formed the view by about 10.30 am on 15 December, that summary dismissal was justified in each case.69 The decision to suspend the two employees without pay and issue each with a formal warning was a compromise that Mr Hawkins was prepared to adopt based on Mr Cushion's plea for counselling and training as an appropriate means of disciplining Messrs Cartwright and Borg. While I am prepared to accept the thrust of Mr Houlihan's submission to the effect that APS might waive its right of summary dismissal in favour of a less harsh penalty in some cases, it cannot be done in a way that will compromise the integrity of the Agreement or the rights of the employees who are employed under it. An employee who is summarily dismissed from his or her employment has certain rights under the Act to challenge the dismissal and test the decision to dismiss. By substituting suspension without pay for termination of employment, the employee's rights to challenge the decision about the seriousness of the conduct that is said to justify the dismissal is compromised. This is particularly so where the employee objects to the penalty of suspension without pay. In any event, given the nature of misconduct that justifies summary dismissal it would only be in rare cases that suspension without pay would be an appropriate substitute for it.

[132] The question is whether the conduct of Messrs Cartwright and Borg was serious misconduct warranting summary dismissal. Conduct justifying summary dismissal according to cl 11.5 includes malingering, inefficiency or neglect of duty, serious or repeated breaches of safety rules/regulations, fighting, theft and sabotage. The relevant conduct in this case does not fall within any of the descriptions. However, the definition is an inclusive one and does not preclude other types of conduct that amounts to serious misconduct justifying summary dismissal. In Clouston & Co Ltd v Correy70 the Privy Council observed as follows:

[133] No doubt a single act of an employee may be sufficient to justify summary dismissal for misconduct, but the act would need to be of a nature that showed that the employee was repudiating the contract of employment, or one of its essential terms, and no longer regarded themselves bound by it.72 The conduct must be viewed in the context of all of the circumstances and not just as an isolated event that has occurred independently of the relevant environment and circumstances in which it has occurred.

[134] The conduct of Mr Cartwright was unacceptable behaviour. Accepting, as I do, that he was aggrieved by the discrepancy in his pay the grievance procedure in the Agreement required him to pursue that matter with his Group Leader. His Group Leader was Mr Brincat. There is no evidence that he discussed the matter with Mr Brincat, but rather went direct to Ms Lucas with his complaint/inquiry. However, it appears to be the case that it was common and accepted practice for employees of APS to go direct to the administration office with complaints or inquiries about pay discrepancies.73 That practice was not changed as a result of the events of 14 December 2000.

[135] Once it became apparent to Mr Cartwright that Ms Lucas was subject to a policy constraint in making payments without a time sheet Mr Cartwright ought to have taken the matter back to his Group Leader or to a higher level. He was not justified in subjecting Ms Lucas to his view about how things ought to be done. However, it is relevant to take into account the importance of a person's wage or pay, particularly when that person is about to proceed on leave of absence and, even more particularly, when the period of leave coincides with the Christmas holiday period.

[136] Also relevant to the characterisation of Mr Cartwright's conduct is the conduct of Ms Lucas in the matter. It transpires that Ms Lucas had the capacity to correct the discrepancy in Mr Cartwright's pay. In fact Ms Lucas did rectify the situation when everyone had calmed down. It is not clear whether Ms Lucas was aware of that capacity when Mr Cartwright first raised the issue with her. However, a calmer head in the first instance may have led to the same result without all of the emotion that permeated the situation. Perhaps there were other pressures impacting on Ms Lucas at the time, although there was no suggestion in the evidence that such was the case.

[137] Taking into account all of the evidence before me I consider the circumstances do modify the impression that might otherwise be taken of the conduct of Mr Cartwright. His conduct could not be classed in any reasonable sense as an intention on his part not to be bound by the terms of his contract of employment. He did not show a total disregard of his duty and obligations. In fact when Ms Lucas asked him to leave her office he did so. When he returned to the office he made no deliberate attempt to antagonise Ms Lucas. The further altercation between him and Ms Lucas after his return to the office arose not because of Mr Cartwright attacking Ms Lucas but what, in my view, was Mr Cartwright taking a reality check with Mr Borg about the reasonableness of his conduct in asking that Ms Lucas make some inquiry about the whereabouts of his time sheet if it does not come to the administration office when it should.

[138] Mr Cartwright had no record of any prior disciplinary action. In my view Mr Cartwright's unacceptable conduct warranted disciplinary action but not dismissal. Clause 12 required that, in the circumstances, Mr Cartwright be given counselling about his conduct. APS did not, in respect of the conduct of Mr Cartwright on 14 December 2000, apply cl 13 of the Agreement according to its terms.

[139] The conduct of Mr Borg in offering to settle his matter with Mr Hawkins outside was misconduct. It was insubordinate. But in the scale of misconduct, and taking into account the circumstances, including the demeanour of Mr Hawkins at the time, Mr Borg's position as a union delegate and no actual immediate threat of assault, I do not regard the misconduct, in the scale of insubordination, as serious for the purposes of the Agreement. It seems to me that Mr Borg acknowledged and remained subject to the authority of Mr Hawkins. There is no doubt Mr Borg's conduct warranted disciplinary action, but, in view of Mr Hawkins' personal involvement and his own state of emotion about the issue, he ought to have delegated the task to someone else. In any event, Mr Borg's conduct did not, in my view, warrant dismissal from his employment. Clause 12 required that, in the circumstances, Mr Borg be given counselling about his conduct. APS did not, in respect of the conduct of Mr Borg on 15 December 2000, apply cl 13 of the Agreement according to its terms.

[140] In light of the conclusions that I have reached it is necessary to consider the terms of the orders that I may make to resolve the dispute. The Agreement provides that the Commission, so far as necessary, is to arbitrate the matter in dispute. Arbitration involves an examination of the facts and determination of the issues. Incidental to the determination of the issues in dispute is the making of orders to give effect to that determination. I propose making orders giving effect to my determination of the matters in dispute. However, for the present, I direct that:

The parties have liberty to apply to the Commission to have the matter listed for submissions on the terms that the order should take.

BY THE COMMISSION:

SENIOR DEPUTY PRESIDENT

Appearances:

Mr A Bandt for the Maritime Union of Australia

Mr P Houlihan and Ms S McKinnon for Australian Plant Services Pty Ltd

Hearing Details

2001.

Melbourne.

13 and 14 March

11 April.

Printed by authority of the Commonwealth Government Printer

<Price code G>

1 A3875.

2 Exhibit AB3.

3 Exhibit AB2.

4 Exhibit R2, par 6.

5 Exhibit R2, par 20.

6 Transcript 14 March 2001, PN1525.

7 ibid PN1606.

8 ibid PN1625.

9 Exhibit R2, par 15; cf Transcript 14 March 2001, PN1641.

10 Transcript 14 March 2001, PN1692.

11 Exhibit AB4, par 3.

12 ibid par 3 and 4.

13 ibid par 4.

14 ibid par 5.

15 ibid par 6.

16 ibid par 6.

17 Exhibit AB6.

18 Exhibit R3.

19 ibid par 3.

20 ibid par 3.

21 ibid par 5.

22 Transcript 14 March 2001, PN1851 - PN1855.

23 Exhibit R4.

24 Transcript 14 March 2001, PN2114 - PN 2116.

25 Exhibit R4, par 12.

26 ibid par 15.

27 ibid par 15.

28 ibid par 16.

29 Exhibit AB6, par 8.

30 ibid par 9.

31 Exhibit AB7, par 4.

32 Transcript 13 March 2001, PN1329.

33 Exhibit R3.

34 Exhibit R4, par 21.

35 ibid par 25.

36 Transcript 14 March 2001, PN2263.

37 Exhibit R4, par 29.

38 ibid par 30 and 31.

39 Exhibit AB4, par 11.

40 ibid par 12.

41 Transcript 13 March 2001, PN237-238.

42 [2001] HCA 16 (15 March 2001); (2001) 75 ALJR 670; (2001) 103 IR 473.

43 ibid at par 22.

44 ibid at par 32.

45 ibid, at par 31.

46 Qantas Airways Limited v Australian Municipal, Administrative, Clerical and Services Union, Print T0301, [24].

47 ibid, [25]; see also the Private Arbitration Case at par 36.

48 see R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617, 629; and the Private Arbitration Case, at par 32.

49 cf The Private Arbitration Case, [39].

50 (1981) 147 CLR 617.

51 cf The Queen v Gough; Ex parte Cairns Meat Export Co Pty Ltd (1962) 108 CLR 343, 351.

52 The Private Arbitration Case, [31].

53 Exhibit R1.

54 Exhibit R3, par 5.

55 The Macquarie Dictionary 3rd ed Macquarie University NSW, 1997, at 614.

56 see the Agreement, cll 5 and 6.

57 see The Macquarie Dictionary 3rd ed The Macquarie University NSW, 1997, at 2124.

58 ibid at 1707.

59 The Agreement, cl 13.4.

60 Transcript 14 March 2001, PN1606.

61 Transcript 14 March 2001, PN1761-PN1763.

62 Exhibit R4, par 25.

63 Exhibit R4, par 12.

64 Exhibit R4, par 21

65 Transcript 14 March 2001, PN2183.

66 ibid PN2614.

67 see the Agreement, cl 5.

68 Transcript 14 March 2001, PN2616 (Mr Hawkins in answer to a question from Lacy SDP).

69 ibid PN2620.

70 [1906] AC 122.

71 ibid at 129.

72 see Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285.

73 Transcript 14 March 2001, PN1758 - PN 1760.