TASMANIAN INDUSTRIAL COMMISSION
Industrial Relations Act 1984
Chubb Protective Services
Termination of employment - no valid reason for termination - reinstatement impractical - order for compensation - hearing to be reconvened to settle minutes of proposed order
REASONS FOR DECISION
At the time of his dismissal on 6 March 1997, Mr Mark McKenzie was employed by Chubb Protective Services (Chubb) as a full-time security guard at the Pasminco-EZ site where his position was that of Team Leader.
By a "Termination Notice" dated 6 March 1997 Mr D C Milling, Chubb Operations Manager, explained the reason for his decision to terminate Mr McKenzie's employment in following manner:
The "memo of 3 January 1997 and Company policy", to which the "Termination Notice" refers, is a document produced by Mr Milling which takes the following form:1
Mr McKenzie does not accept his dismissal, maintaining that it was unfair and unlawful because, he said, he did not and has never improperly removed property belonging to any of Chubb's clients. For that reason he applied to the President on 10 March 1997 for a hearing pursuant to section 29(1A) of the Industrial Relations Act 1984 (the Act) seeking an order of reinstatement or, alternatively, should the Commission find that reinstatement is not practical, an award of compensation.
Following the failure of conciliation proceedings I proceeded to hear and determine the matter by arbitration. During those proceedings and at the hearing Mr J Bronstein appeared by leave of the Commission for Mr McKenzie and Mr S Gates of the Tasmanian Chamber of Commerce and Industry Limited appeared for Chubb.
The parties agreed that I should hear and determine the matter by reference to the Industrial Relations Act 1984 as it was prior to enactment of the Industrial Relations Amendment Act 1997.2
During the course of the hearing I examined six witnesses: the applicant, Mr McKenzie, who gave evidence about his dismissal and related issues; Mr A B Moore, a former and present employer of the applicant, who gave character evidence on Mr McKenzie's behalf; Mr D C Milling, Chubb Operations Manager, who gave evidence about his reasons for dismissing Mr McKenzie and matters relevant thereto; Mr P G Howells, Chubb supervisor at the Pasminco-EZ site, who gave evidence about his actions on the 28 February 1997 and subsequently concerning Mr McKenzie's dismissal; and Ms J McIvor and Mr A Ring, security guards employed by Chubb at the Pasminco-EZ site, who gave evidence about their recollections of the events that occurred on 28 February 1997.
The Facts and Circumstances According to Mr McKenzie
In his oral evidence Mr McKenzie said he started work for Chubb some time in 1995 after an amalgamation between MSS, his then employer, and Chubb. Prior to his period of employment with MSS, Mr McKenzie confirmed that he worked for Moore & Moore Security and for himself, being the proprietor of a security business trading in home and business security alarm installations.
In the course of his employment and self-employment Mr McKenzie said he had never received any complaints about his performance and, apart from minor police and traffic offences in 1987 and 1988 when aged 17, had no problems with police regarding fraud, theft or any crime involving dishonesty. Mr McKenzie affirmed that he saw himself as a person of good character and integrity.
By way of professional qualifications, Mr McKenzie indicated that he is a process server, security agent and licensed inquiry agent, and holds certificates in first aid (levels 2 and 3), breathing apparatus, emergency control organisation, pistol and gun handling, and Pasminco-EZ emergency fires and evacuations procedures.
Mr McKenzie said that during his period of employment at the Pasminco-EZ site he worked a 12 hour shift roster that comprised two day shifts (7:00am-7:00pm), two night shifts (7:00pm-7:00am) and four days off, for an average working week of 42 hours. On the 28 February 1997, when the events occurred that led to his dismissal, Mr McKenzie said he was working night shift and had arrived on site about 6:30pm because the relieving night shift had to perform changeover functions with the retiring day shift. On that occasion the other security guards on night shift duty at the site were Ms J McIvor and Mr A Ring.
After completing the hand-over process, Mr McKenzie said he went on patrol about 7:00pm, accompanied by Ms McIvor, in a Landcruiser patrol vehicle, taking with him a bunch of keys, a torch, a radio for communication when away from the vehicle, a mobile telephone, and a run sheet log book depicting the different places on site that he had to visit. The purpose of the patrol, Mr McKenzie continued, was to make sure that buildings were secure and lights and heaters turned off; to check exit doors, perform general fence patrols, check on Pasminco-EZ employees working in out of the way places on site, and check sprinkler readings to make sure all pumps were up to date. During this patrol period, Mr McKenzie said, the other security guard, Mr Ring, remained in the site control room (also referred to in the evidence as the "fire and watch station").
Mr McKenzie asserted that during the period of the first patrol on the evening of 28 February, he and Ms McIvor were physically in sight of each other for the entire time. He also confirmed that, while there were cleaners on site until about 10:00 or 11:00pm in addition to other Pasminco-EZ workers, e.g. fitters, he had very little contact with them during the course of the patrol.
Responding to a question from Mr Bronstein, Mr McKenzie said he could not say whether he visited a plan or planning room because he could not specifically identify such a room and could not say which buildings he visited without recourse to the run sheet log book. That log book, according to Mr McKenzie's evidence, contained a contemporary record of buildings visited during a particular patrol and any events associated with that visit, e.g. open doors or windows, etc. Customarily, he said, the log book is kept in the patrol vehicle where he recalled using it on 28 February.
Sometime during the course of the first patrol of 28 February, Mr McKenzie said he received a radio call from Mr Ring advising him of the presence in the control room of Mr Howells, the Chubb site supervisor. After securing the area in which they were then located, Mr McKenzie and Ms McIvor returned to the control room. There then followed, so Mr McKenzie's evidence goes, a discussion between he and Mr Howells, which took place in the vicinity of Mr Ring but not Ms McIvor, regarding refresher breathing apparatus courses, the outcome of which, Mr McKenzie conceded, made him angry.
Mr McKenzie's evidence is that he became angry with Mr Howells because "he came in checking on the shifts, so that means he didn't trust me to run my own shift" and "he accused me of something I didn't do",3 i.e. "of going behind one of our boss's back to organise the [refresher breather apparatus courses] when I didn't".4
After becoming angry, Mr McKenzie said, he walked off and talked to a nearby cleaner for three or four minutes. When he returned to the control room he said Mr Howells, who had in his hand some office file dividers that he was waving about, asked him what they were. Mr McKenzie acknowledged in evidence that he gave Mr Howells some "smart comment" such as "what do they bloody look like"5 to which, he said, Mr Howells responded by saying that "he'd got them out of the [patrol] vehicle and that I could be up on stealing charges for it."6
Mr McKenzie, continuing, said he told Mr Howells "that if he thought I had stolen them, get the police in here, get them fingerprinted and I guarantee my fingerprints aren't on them" in reply to which, according to Mr McKenzie's recollection, Mr Howells said "No, no, I'll fix it up, I'll fix it up." Mr McKenzie, who said he had still not calmed down from his earlier conversation with Mr Howells, admitted that he was very upset at this new allegation. As a consequence of those circumstances, he said, his ensuing discussion with Mr Howells was "pretty heated" and "there was probably a bit of swearing and that going on". At the end of the exchange, Mr McKenzie said "I turned around and told him if he's got nothing further I've got my work to do, so basically f-off" and "just went back on duty as normal." 7
Mr McKenzie's evidence discloses that, in returning to normal duties, "we radioed [Ms McIvor] and asked her where she was" and, because she was not far away, he took the Landcruiser, picked her up and, after going off site for a smoke, continued the usual patrol.8 He said he could not recall if, at that time, the run sheet log book was actually in the patrol vehicle, but he did know that Ms McIvor had not taken it with her. After his smoke, Mr McKenzie added, he "then just continued lockup as normal and thought no more of it [the heated exchange with Mr Howells] really."9
The following Tuesday,10 Mr McKenzie went on, Mr Milling, Chubb Operations Manager, contacted him by telephone and asked to see him before the upcoming Thursday. Mr McKenzie said that because Mr Milling would not tell him the purpose of the meeting, he knew there was something wrong. He arranged to see Mr Milling the same day and, upon attending his office, found Mr Milling in the company of a Mr A Smith who was present, Mr Milling told him, in the role of observer.
At the outset, Mr McKenzie said, Mr Milling told him that allegations had been made against him concerning removal of property from Pasminco-EZ. At the same time, Mr McKenzie said, Mr Milling handed him two letters: one from Mr Howells saying that he (McKenzie) had taken some equipment, and one from Pasminco-EZ saying that, because of that allegation, the company no longer wanted him on site. Mr McKenzie said he again got very upset.
After about half an hour of apparently heated discussion Mr Milling, at Mr McKenzie's request, interviewed Ms McIvor and Mr Ring, individually and outside Mr McKenzie's presence. Mr Milling then said he needed some time to go through the matter, whereupon Mr McKenzie said he left the work site. Later the same day, on Mr McKenzie's evidence, Mr Milling apparently told him that "we're going to stand you down" in response to which Mr McKenzie said "I told him I would see him in court".11 Later that night Mr McKenzie said he telephoned Mr Milling and told him that, in the circumstances, he wanted his termination pay and would be in within the hour to pick it up. In the event, however, Mr McKenzie picked up his termination pay and associated papers the following day.
Mr McKenzie's Claim: the Termination was Unjustified
Mr Bronstein, for Mr McKenzie, submitted that because section 31(1A) of the Act requires the Commission to take into account the "standards of general application contained in Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer" (the ILO Convention), it is appropriate to look at decisions of the Industrial Relations Court of Australia for guidance as to the Convention's proper application. In that light, Mr Bronstein contended, a close examination of the reasons given by Chubb for Mr McKenzie's termination and the circumstances of the case cannot lead to a conclusion that the termination was justified.
A case directly in point, Mr Bronstein continued, is Jamie Lowe and AFMEU v ACL Bearing Company (1995)12 in which Mr Lowe and another employee were dismissed by ACL Bearing Company for allegedly removing company property without authorisation. The company's case was based primarily on the evidence of two security guards whose allegations were subsequently found to be unsubstantiated. In reinstating the two employees Ryan JR said:
In Briginshaw, Mr Bronstein said, Dixon J (as he then was) had the following to say (p.361):
Applying His Honour's observations to the facts of the current case, Mr Bronstein submitted that, concerning "the seriousness of an allegation made", it is undisputed that Chubb alleges Mr McKenzie, without authority, removed property from one part of the Pasminco-EZ site. Such an allegation, he said, is as serious as one can get because the whole purpose of a security guard is to protect a client's property.
Concerning the second factor to which His Honour adverted, "the inherent unlikelihood of an occurrence of a given description", the evidence , Mr Bronstein asserted, is that it is unlikely Mr McKenzie would have risked his job for the sake of six office file dividers in circumstances where he had authorised access to stationery of that kind in a room adjacent to the first aid room, both rooms being connected to the control room.13
Finally, concerning the third factor, "the gravity of the consequences flowing from a particular finding", Chubb's summary dismissal of Mr McKenzie is just such a consequence, Mr Bronstein argued, because it put his future in the security industry at risk. The evidence of witness Moore, he continued, suggests that if Chubb's allegation is proven then Moore & Moore Security would probably not employ him because the security industry "relies totally on honesty and trust ... and if that's jeopardised in any way shape or form then it's very hard ... to obtain further work or obtain employment with anybody else".14 Indeed, Mr Bronstein contended, should this matter find its way into the criminal sphere, any charge found proved against Mr McKenzie would put his licence at risk.
Moving on, Mr Bronstein said that in Kerry Lee McLeish v Macs Food Centre Pty Ltd (1995)15 the employee was dismissed, following an investigation of the allegations by an independent person, because of missing funds and discrepancies in certain store procedures. Tomlinson JR, in finding for the former employee, observed that the standard of proof required to prove certain facts "was simply not met" and then went on to say:16
In the present case, Mr Bronstein submitted, the quality of the investigation undertaken by Mr Howells could be put no higher than "amateurish sleuthing", because he took no evidentiary statements from those persons whom he alleged he interviewed and he did not interview Ms McIvor and Mr Ring until after Mr McKenzie had asked for their involvement in the proceedings. In such circumstances, Mr Bronstein contended, Chubb's attempt to establish the veracity or otherwise of the allegations made against Mr McKenzie were insufficient to meet the high standard of proof required in cases of this nature.
As to the general approach an employer should take in cases of this nature, Mr Bronstein went to a decision of the Industrial Commission of New South Wales in Court Session in Shop, Distributive & Allied Employees' Association, NSW Branch v Jewel Food Stores (1987) 22 IR 1 in which the Court said (p. 2):17
and, then, as to character evidence:
Concerning character evidence, Mr Bronstein said that Mr McKenzie's police record18 shows he has no history of crime involving dishonesty,19 and Mr Moore's testimony is that Mr McKenzie is a person of good character who, Mr Bronstein argued, should have the benefit of the doubt in connection with the allegations that led to his dismissal.20
Finally, as to case authority, Mr Bronstein referred to Steven James Perkins v Grace Worldwide (Aust) Pty Ltd (1996)21 in which an employee, who was accused of supplying marijuana was, without investigation, summarily dismissed on the basis of two statutory declarations sworn by fellow employees. In that case Walker JR, finding for the former employee, referred to the observations of the Full Industrial Commission of South Australia in Bi-Lo Pty Ltd v Hooper regarding the employer's onus concerning investigations, of which Mr Bronstein relied on the following extracts (p. 5):
and, later on:
Given the serious nature of the allegations made against Mr McKenzie, Mr Bronstein contended, Chubb's investigation of the alleged misconduct fails the tests set down in the decided cases because the gravity of the offence as charged required more than reliance on the unsubstantiated accusations of witness Howells. Rather than appointing an independent person to conduct the investigation, Mr Bronstein said, Chubb appointed Mr Howells who was, in fact, the accuser. For reasons known only to himself, Mr Bronstein asserted, Mr Howells did not deem it necessary to interview the only two relevant witnesses, Ms McIvor and Mr Ring, before making the report required of him by Chubb.
The evidence of witness McIvor, Mr Bronstein continued, supports Mr McKenzie's position in that: she physically accompanied Mr McKenzie throughout the entire shift on 28 February; she said Mr McKenzie did not open any cupboards or doors or enter any office otherwise than in her view and she did not see him take any property.22 Furthermore, Mr Bronstein said, Ms McIvor did not see any objects that would not normally be in the Landcruiser23 and the run sheet log book "just looked normal".24
Witness Ring, Mr Bronstein went on, said that from his seated position in the control room he could see the Landcruiser because, when Mr McKenzie and Ms McIvor returned from patrol to see Mr Howells, Mr McKenzie left the vehicle parked just outside the window.25 Mr Bronstein said that the evidence of witness Ring is that he did not see Mr Howells go to the Landcruiser. In the circumstances, Mr Bronstein continued, while the evidence does not disclose how Mr Howells came to be in possession of the file dividers, it is clear that there is no corroboration of his allegation that he found them in the Landcruiser.
In all the circumstances, Mr Bronstein submitted, the evidence and decided authorities support the view that Chubb should have given Mr McKenzie the benefit of the doubt regarding the allegations made against him.
Chubb's Reply: the Termination was Justified
Mr Gates contended that while Briginshaw does suggest that, in certain circumstances a higher onus of proof should apply, the test still comes down to, in the end, a balance of probabilities. In that context, Mr Gates continued, the applicant's contentions that the onus of proof is exceptionally high and the Commission must be reasonably satisfied that Mr McKenzie actually took the file dividers without authorisation, are not valid.
In the first place, as to onus of proof, no increased burden falls on Chubb because there is no allegation of theft and no suggestion of criminal proceedings against Mr McKenzie. Rather, Mr Gates continued, Chubb alleges a breach of company policy concerning removal of client property from its place of storage and a breach by Mr McKenzie of an implied common law duty of good faith and fidelity.
Concerning the degree of reasonable satisfaction required by the Commission, Mr Gates submitted that the decided cases show Chubb's responsibility extends only to demonstrating that the company honestly and genuinely believed, on the information it had available at the time, that Mr McKenzie was guilty of misconduct as alleged. In support of that contention Mr Gates relied on the Federal Court case of Byrne and Another v Australian Airlines Limited (1992) 45 IR 178 per Hill J at p. 200; the decision of the Full Commission of the South Australian Industrial Commission in Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224 at p. 224; and the more recent Industrial Relations Court judgment of Von Doussa J in Sangwin v Imogen Pty Ltd (1996)26 and the cases therein considered (especially, in addition to the above, Senathirajah Selvachandran v Peteron Plastics (1995)27 and Romolo Luigi Puccio v Catholic Education Office Endowment Society (Incorporated (1996)28).
Mr Gates submitted that Bi-Lo "is quite an important case" and "the correct principle to apply".29 In that case, he said, the South Australian Full Commission had the following to say concerning the appropriate tests:30
In Sangwin, Mr Gates said, an employee was dismissed for misconduct on the grounds that the employer, after undertaking a reasonable investigation, believed the employee was guilty of attempted stealing. Counsel for the employer in that case, Mr Gates continued, argued that the dismissal did not contravene the federal Industrial Relations Act 198831 because, after investigation, the employer genuinely believed that the employee was guilty of attempted stealing even though, as a matter of fact, that was not the case. After referring to the cases mentioned by Mr Gates, among others, Von Doussa J noted that in Selvachandran and a line of other cases "it has been held that a 'valid' reason exists where the employer had a 'sound, defensible or well founded' reason for termination of the applicant's employment".32 His Honour, Mr Gates observed, then went on to add that "these dictionary definitions for the word 'valid', whilst wide enough to include a reason based on an honest belief held on reasonable grounds, do not assist ..."
What Von Doussa J is saying here, Mr Gates contended, is that where an employer is required to have a valid reason for dismissing an employee it will be enough for the employer to show that its reason was "sound, defensible and well-founded" and one based on "an honest belief held on reasonable grounds".
Mr Gates also referred to Puccio and Kaye Lynette Cohen v Orient Trading Pty Ltd (1996)33 which, although dealing with a type of misconduct different from that alleged in the current proceedings, considered the matter of an employer's operational requirements. In Cohen, after referring to Sangwin and Puccio, Murphy JR went on to say:34
In summary and having regard to the decided cases, Mr Gates submitted, Chubb's investigation in the circumstances was appropriate for a commercial environment and did not require an investigation of "the forensic thoroughness of a policeman or a lawyer or a court". The evidence shows, he continued, a clear admission by Mr McKenzie to Mr Howells on 28 February that, according to Mr Howells, "he'd been given them [the file dividers] by a chap in the plant print room at Pasminco".35 Those were the undisputed facts before Mr Milling, Mr Gates argued, whose only investigatory duty, after receiving Mr Howells' contemporaneous report the following day,36 was to confirm whether such an authorisation actually existed, a responsibility that he appropriately delegated to Mr Howells. The evidence of Mr Howells is, Mr Gates continued, that no such authorisation was given.37
Mr Milling then interviewed Mr McKenzie, Mr Gates said, when he put the company's allegations to Mr McKenzie; he read Mr Howells' report to him; he asked Mr McKenzie if there were any witnesses who could assist his case; he interviewed the witnesses so identified as soon as he could; he told Mr McKenzie a decision would have to be taken on the facts as presented; and he gave Mr McKenzie opportunity to respond. Throughout that entire process, Mr Gates submitted, Mr McKenzie did not ask for the process to be adjourned, he did not request further information and he never disputed any of the evidence obtained from witnesses.
Furthermore, Mr Gates went on, Mr McKenzie was quite unable to support his claim, that he had been "set up", with circumstantial evidence of any kind. For example, he said, Mr McKenzie told no other employee that night of the events that had occurred or claimed the accusations were unfounded; he did not speak to any senior Company officer about the matter; he made no contemporaneous notes; and the evidence before the Commission is that Mr Howells had no motive to set him up.38
Finally, Mr Gates argued, it is irrelevant that Mr Howells undertook part of the investigation because, at the time, there was no dispute about what had occurred or what had been said. In addition, having regard to the decided cases, Mr Gates contended, it is also immaterial and of no prejudice to Chubb's case if the Commission should find that it cannot be satisfied that Mr McKenzie, in fact, actually removed the file dividers in question.
For all these reasons, he concluded, the evidence discloses that Mr Milling acted appropriately in a commercial environment on the basis of a reasonable and honest belief, having regard to the information available to him at the time, that Mr McKenzie was guilty of the misconduct as alleged. In those circumstances, Mr Gates inferred, it would be unreasonable and unfair for the Commission to find, contrary to that clear evidence, that Chubb should be now bound by a subsequent denial on Mr McKenzie's part.
Further to Chubb's primary submission, Mr Gates argued, Mr McKenzie's conduct constituted a breach of his duties of good faith and fidelity, as an employee, towards Chubb. In that context, concerning summary termination, Mr Gates referred to the observations of Lord Evershed MR in Laws v London Chronicle (Indicator Newspapers Pty Ltd)  1 WLR 698, 701 and to Blyth Chemicals v Bushnell (1933) 49 CLR 66, 81 where Dixon and McTiernan JJ said:
Mr Gates submitted that the nature of Chubb's business in the security industry is to provide security and watching services for clients for the purpose of protecting property, plant, equipment and services. In so doing, he said, the company must rely on the trustworthiness of its employees in order to maintain its commercial reputation and integrity. The unauthorised removal of a client's property, Mr Gates contended, especially by an employee who as a team leader was responsible for supervising other employees, is fundamentally inconsistent with the duty that Mr McKenzie owed to Chubb. For that reason alone, having regard to the authorities, Mr Gates submitted the circumstances justified Chubb's actions in terminating Mr McKenzie's employment.
Reasons for Mr McKenzie's Dismissal
I accept that the reasons given for Mr McKenzie's dismissal were, indeed, those set out in the "Termination Notice", i.e. "taking" (the word used in the "Termination Notice") or, in another perhaps more appropriate word, "misuse" (the word used in Chubb's policy statement) of client property contrary to Chubb's policy.
Mr Bronstein did, however, raise the fact that, in the Employment Separation Certificate completed by Chubb, the reason given by Mr Milling for termination of Mr McKenzie's employment was "conflict of interest"39 rather than, as might have been expected, words similar to those used in Chubb's policy statement or in the "Termination Notice". Mr Milling's explanation of his choice of words was that Chubb uses such an expression to describe fact situations like those that surrounded Mr McKenzie. While I agree with Mr Bronstein's inference that, in the circumstances, "conflict of interest" seems to be something of a euphemism, it does not otherwise appear to bear significantly, in any relevant way, on the current proceedings.
Concerning witnesses McIvor, Ring and Milling, my impression is that, in giving their evidence, each did so in an entirely candid manner, without hesitation or qualification. In the circumstances, I am satisfied that there is no reason for me to regard their evidence as otherwise than reliable, so far as their best recollection allows. As to the evidence of witness Moore, Mr Gates submitted that it was irrelevant to the events of 28 February 1997, an assertion with which I generally agree. Mr Gates also inferred that Mr Moore's evidence was unreliable because of bias towards Mr McKenzie. I make nothing of that criticism because, having been essentially presented as a character witness for Mr McKenzie, I would have been astonished had his evidence not possessed such a flavour.
Mr Gates put in issue the credibility of witness McKenzie. Mr McKenzie, Mr Gates said, was selective in his approach to answering questions, resorted to blanket denials and demonstrated animosity and resentment towards witness Howells, whom Chubb preferred over Mr McKenzie for appointment as supervisor.
I believe the answers given by witness McKenzie during the course of examination and cross-examination were generally responsive to the questions put to him. In my view, with one possible exception, he was not evasive and did not seek to avoid explanation when that was required of him. To the extent that he relied from time to time on an unvarnished denial is, I think, more a matter of cross-examination technique than an issue of credibility. He did, however, seem to me to be somewhat reluctant to disclose details of income derived from his small business operations following dismissal from Chubb.
Concerning his relationship with Mr Howells, witness McKenzie's evidence, in part, is that Mr Howells' appointment as supervisor "didn't really worry me".40 The remainder of his evidence on the point, however, appears to disclose a contrary attitude, i.e. Mr Howells "actually got appointed [to the] supervisor's position instead of myself";41 "once he got the supervisory role we ... drifted apart a little bit and every now and then we'd have a heated discussion";42 "once he become supervisor and you tried to get information or experience out of him he ... didn't want to share it";43 on the 28 February 1997 "he come in checking on the shifts, so that means to me he didn't trust me to run my own shift";44 later the same evening he told Mr Howells to "f-off";45 and, at his interview with Mr Milling just prior to his dismissal, he admitted calling Mr Howells a "liar" and an "arsehole", which he believed to be appropriate language in the circumstances.46
The weight of the evidence unambiguously supports a conclusion, which I draw, that Mr McKenzie in fact harboured a great deal of resentment and disrespect towards Mr Howells that, contrary to his express denial, appears to have its origins in Mr Howells' success in winning the supervisory appointment. Mr McKenzie's evidence, where relevant, must be weighed accordingly.
I turn now to witness Howells whose evidence, regarding credibility and contrary to Mr Gates' submission, is not, in my opinion, free of difficulty. In particular, I found him unconvincing in the matter of his relationship with Mr McKenzie.
For example, although Mr Howells described his relationship with Mr McKenzie, before the former's appointment as supervisor, as "quite good"47 and after that event as "quite cordial" and "quite reasonable"48, he never admitted, either in his report to Mr Milling or in his oral evidence before me, that his discussions with Mr McKenzie on 28 February must have been something more than what he called "conversations"49 because they resulted in Mr McKenzie becoming and remaining angry.50 That much, if not more, is quite apparent from the evidence of witness Ring, who was present at the time and whose evidence is that "at one point [voices were] raised. It was quite large and it was Mr Howells who had got angry".51
It also appears from the evidence that, while Mr Howells absolutely denied any discussion with Mr McKenzie concerning the breathing apparatus course,52 witness McIvor recalled that, when she and Mr McKenzie returned to the control room after Mr Howells' arrival, Mr McKenzie, in Ms McIvor's hearing, said to Mr Howells "I need to speak to you about a BA course" or something "more or less" to that effect.53
These inconsistencies suggest to me that the relationship between Mr Howells and Mr McKenzie was less harmonious than Mr Howells was prepared to admit - a conclusion that draws support from Mr Ring's admittedly prompted observation that his impression was that Mr Howells and Mr McKenzie did not get on particularly well with each other.54 In the circumstances I have formed the view that Mr Howells' evidence, to the extent that it relevantly concerns his relationship with Mr McKenzie, may be unreliable.
The Events of 28 February 1997 and Subsequently
I begin my consideration of the events of 28 February and subsequently with Mr Howells' arrival at the Pasminco-EZ site about 8:30 that evening.55 It is appropriate to mention here that, in my opinion, Mr Howells, as "Acting Supervisor - Chubb PSD", had every right, indeed arguably a duty, to attend the site for "the purpose of a normal unannounced visit" to "make sure that the work was being done in accordance with Chubb's rules, regulations and the contract provisions".56 It was wrong of Mr McKenzie, in those circumstances, to interpret Mr Howells' presence as representing a lack of trust in his ability to "run my own shift".
It appears in the evidence that, upon arrival at the site and before going to the control room, Mr Howells noticed that the patrol vehicle "was parked outside the general office",57 a fact that he chose to emphasise in his subsequent report to Mr Milling58 - a point that I will return to later.59 After entering the control room he asked of Mr Ring the whereabouts of Ms McIvor and Mr McKenzie and, having been told they were out on patrol, he sat down to await their return. Mr Howells' evidence is that when he entered the site and, later, the control room, he was not carrying anything. Mr Ring's evidence on the point is that he could not be certain, one way or another, because he was busy with other duties60 and, in any event, the cameras did not provide a sufficiently clear picture.61 There is no reason on the evidence, in the circumstances, for me to doubt Mr Howells on that issue.
When Ms McIvor and Mr McKenzie returned to the control room Mr Howells, after explaining the purpose of his visit, said he "had a conversation with [Mr McKenzie] re his holidays" but, inconsistently with the evidence of Ms McIvor mentioned above, denied that Mr McKenzie had spoken to him about a breathing apparatus (BA) course.62 Mr McKenzie, for his part, said that "the first issue I remember talking to [Mr Howells] about was the BA course" but he could not recollect talking to Mr Howells about annual leave63 or receiving from him any time sheets or an envelope or anything like that.64
These explanations disclose the first of a number of fundamental inconsistencies in the evidence of witnesses McKenzie and Howells as to what actually occurred on the night in question. In weighing the evidence on this particular issue I believe that, on the basis of Ms McIvor's corroboration and contrary to Mr Howells' recollection, there was in fact a discussion between he and Mr McKenzie regarding the breathing apparatus course. As to the failure of Mr McKenzie's recollection concerning a discussion about annual leave it seems to me that, on a high balance of probabilities, such an event did in fact occur because, as Mr McKenzie said, his dismissal happened "two or three weeks before my wedding" and "that's why I wanted to have that time off".65
All the relevant witnesses agree that Ms McIvor left the control room almost immediately after her return following Mr Howells' arrival. The next event in the sequence of those that concern this case, according to the evidence, is that having become angry during his discussion with Mr Howells regarding the breathing apparatus course, Mr McKenzie went off to talk to a nearby cleaner.66 About the same time, the evidence suggests, Mr Howells left the control room and went to the patrol vehicle for the purpose of examining the run sheet log book.67 Upon picking up the log book he noticed it "had more in it than what was normally there"68 and when he opened it he discovered what he later called "four (4) packets of folder dividers".69 Mr Howells, with the packets in hand, then returned to the control room where he asked Mr McKenzie "what were they doing in [the patrol vehicle] and where had they come from".70
According to Mr Howells, Mr McKenzie's response was "that he'd been given them by a chap in the plant print room" whom he did not identify71 and that "he'd taken them for his DMAC folder".72 Mr McKenzie's evidence, on the other hand, is that Mr Howells asked him what they were, to which he (McKenzie) gave a facetious retort, following which Mr Howells told him "he'd got them out of the vehicle and that I could be up on stealing charges for it".
Mr McKenzie admitted that he again got angry with Mr Howells. He said he denied the allegation;73 denied that he had removed any folders from any part of Pasminco-EZ;74 denied that he had the folders in his possession;75 and asked for the police to be called and the folders fingerprinted.76 After that apparent altercation, Mr McKenzie's evidence is that Mr Howells said he would "fix it", whereupon Mr McKenzie, indulging in some invective that he directed towards Mr Howells, returned to his patrol duties.77 Mr Ring, who was present all the while monitoring cameras, said voices were raised and Mr Howells got angry but that, otherwise, he "didn't see it was any of my concern, so I didn't bother to listen to the conversation".
Mr Howells' evidence, in turn, is that having "secured [the folders] in a cupboard in the passage at Pasminco in the security building", he left the site, returned home and reported the incident to Mr Milling, Chubb Operations Manager, at whose request he then prepared a written report.78
In weighing the evidence regarding what, for that purpose, I will call the "file divider episode", I begin with Mr McKenzie's first angry departure from the control room when, he says, he went and spoke to a cleaner. There is no corroboration whatsoever of that event - Mr Howells was out of the room, Mr Ring was keeping an eye on the cameras, and the cleaner was not called to give evidence. On a balance of probabilities I accept that Mr McKenzie was angry with Mr Howells at the time, because it was arguably against his interest to make such an admission in circumstances that did not call for him to do so. I also accept that there was a cleaner nearby, because Mr McKenzie identified her79 and that, most likely, he did speak with her.
There is no doubt that Mr Howells was absent from the control room at or about the same time as Mr McKenzie and that, when he returned, he had the file divider packets in one hand. Mr Howells' evidence is that he found the packets in the log book in the patrol vehicle. Mr Ring's evidence, on the other hand, is that he could see the patrol vehicle from where he was sitting because "it was parked just out[side] the window" and "I didn't see him [Mr Howells] go to the [patrol vehicle]".80 The evidence of Mr Howells on this point, to the contrary, is that "from where Mr Ring was sitting he wouldn't see whether I went out to the [patrol vehicle] or not"; that Mr Ring's evidence is wrong; and that he did not know why Mr Ring would give false evidence.81
In my opinion, regarding this apparent conflict, Mr Ring's evidence is simply that he could see the patrol vehicle and that, as he recalled, he did not see Mr Howells go to it. Mr Ring never said, as I understand his evidence, that Mr Howells did not go to the patrol vehicle; he implied only that, if he did, he (Ring) did not see him. In the circumstances, I believe that, on a balance of probabilities, Mr Howells most likely did go to the patrol vehicle when he said he did for the purpose of examining the run sheet log book. Such an action, I think, is arguably quite consistent with his purpose for visiting the site that night. For those reasons, Mr Howells' opinion as to what Mr Ring might or might not have been able to see from his position in the control room is beside the point.
However, there is absolutely no corroboration of Mr Howells' assertion that he found the file dividers in the log book or, indeed, even in the patrol vehicle itself. Such objective evidence as there is, that of Ms McIvor, is not directly to the point because she could only testify that, paraphrased, she noticed nothing unusual or out of the ordinary in the patrol vehicle82 - an observation not surprisingly shared by Mr McKenzie.83 In the circumstances, while the evidence is inconclusive and bearing in mind that Mr Howells' evidence so far as it concerns Mr McKenzie may be unreliable, I am prepared to assume, without making a finding on the issue and for the purpose of testing the strength of Chubb's case against Mr McKenzie, that Mr Howells found the file dividers where he said he did.
That assumption brings me to the most controversial aspect of the whole case - Mr Howells' statement that Mr McKenzie said he was given the file dividers by "a chap in the plant print room". Mr McKenzie's evidence, which he did not contradict in cross-examination, is that he denied taking the stationery when Mr Howells first made the allegation.84 In re-direct examination Mr Bronstein took Mr McKenzie to Mr Howells' written report,85 which Mr Gates tendered during cross-examination, in which Mr Howells set out what he alleged Mr McKenzie had said at the time. Mr McKenzie's emphatic evidence is that words to that effect were never spoken.86 Mr Howells, on the other hand, averred that his report was truthful and accurate.87
The contradiction that the evidence discloses between the recollections of witnesses Howells and McKenzie as to what was said, by whom, following Mr Howells' allegation is, in the absence of any corroboration, irreconcilable. Such contradictory evidence, especially when viewed in circumstances where the evidence of both participants may be unreliable for reasons of credibility,88 obliges me to entertain a large measure of unresolved doubt and uncertainty about what words actually passed between them at the relevant time.
The above observations bring me to the next of the sequence of events that occurred on 28 February 1997, i.e. Mr Howells' written report (Exhibit G1), which he handed to Mr Milling the following morning.89 In his opening two paragraphs Mr Howells twice emphasised the point that, when he arrived on site, "the patrol vehicle was parked outside the General Office". While Mr Howells was not asked to explain the purpose of his emphasis, there is no doubt in my mind that it points to the uncontested fact that Mr McKenzie, in the performance of his duties, had access to the General Office.90 The relevance of the General Office is that it contained the stationery store from which, on a balance of probabilities, the file dividers had been removed.91
It seems to me in the circumstances, bearing in mind the grave doubt and uncertainty that exists about what witnesses Howells and McKenzie actually said to each other in the control room, that the following inference is available from Mr Howells' report. Because Mr McKenzie, at the time of Mr Howells' arrival, was apparently in the building92 from which the file dividers were taken, he arguably had a relevant opportunity to take them and, since they were later found in the patrol vehicle (an assumption only, on my part), it follows that the dividers could only have been so placed if Mr McKenzie had in fact actually taken them from the storeroom and put them there.
Alternatively (and this, perhaps, is the plain meaning of Mr Howells' report), Mr McKenzie admitted to taking the file dividers because he implied he had done so by allegedly saying that he got them from a "chap in the plant print room". This scenario is the basis of Mr Gates' submission that the words attributed to Mr McKenzie by Mr Howells constitute "a clear admission" by Mr McKenzie "at that point in time" that he had taken the file dividers.93 In my opinion that submission is unsustainable in circumstances where, like the present case, there is a full-blooded and irreconcilable contest as to what was actually said at the time. At best, I think, the evidence discloses an alleged admission which clearly required investigation.
In my view the above two postulates represent the only accusations reasonably available from Mr Howells' report: (1) that by inference and implication Mr McKenzie took the file dividers or (2) that he took them because he allegedly admitted, in effect, to having done so. Because Mr McKenzie's alleged admission is the subject of serious and unresolved controversy, the question for consideration, in my opinion, is whether, on a balance of probabilities, the evidence tends to show that Mr McKenzie most likely took the file dividers in question. In those circumstances, there are some aspects of Ms McIvor's evidence that appear to be significant. It is appropriate to let Ms McIvor speak for herself:94
Ms McIvor then went on to repeat that she did not see Mr McKenzie open any doors or cupboards or take any property of any kind. In addition, the witness said she did not see the relevant file dividers at any stage during her shift with Mr McKenzie.95
Ms McIvor did not retreat from her primary evidence during cross-examination, as the following record shows:96
Later on Mr Gates asked Ms McIvor if she could "recall Mr McKenzie carrying any folders or clip boards, or anything like that" to which Ms McIvor replied "No. Only keys, mobile phone and a torch".97
The recollections of Ms McIvor, whose direct evidence was not shaken by cross-examination and whose credibility as a witness was never questioned, is wholly corroborative of Mr McKenzie's evidence and strongly supports his contention that he did not take the file dividers in question.
In my opinion, Ms McIvor's evidence effectively disposes of both the postulates mentioned above. In the first place, she was with Mr McKenzie the whole of the relevant time period and did not see him take the file dividers. Second, Chubb did not allege Mr McKenzie had taken the file dividers from somewhere else on the Pasminco-EZ site or that he had obtained them at some earlier or later time than that implied by Mr Howells in his report, i.e. when he saw the patrol vehicle parked outside the relevant building. Third, Ms McIvor's evidence suggests it is most unlikely, on the balance of probabilities, that Mr McKenzie would have made the alleged admission attributed to him by Mr Howells. Finally, of course, there is the fact that there is absolutely no corroboration of the alleged admission, but merely the word of one employee against that of another in circumstances where, for reasons of credibility, I regard the evidence of both, on the particular issue, as likely to be unreliable.
In the circumstances, taking into account all the above considerations, I am reasonably satisfied that, on the balance of probabilities, Mr McKenzie did not take the file dividers in question. As to the alleged admission attributed to him by Mr Howells, nothing much can be made of that, one way or another, for reasons that I have discussed above. The evidence of Ms McIvor however, in my opinion, argues for Mr McKenzie to be given the benefit of any doubt because, bearing in mind what she had to say, it is unlikely that Mr McKenzie would have had any reason to make a statement like that attributed to him by Mr Howells.
Mr Milling, in his evidence, confirmed that he had received a telephone call from Mr Howells about mid-evening on Friday, 28 February 1997. After hearing briefly from Mr Howells, Mr Milling instructed him to prepare a written report about the incident and to confirm the following Tuesday98 if someone on the Pasminco-EZ site had authorised Mr McKenzie to take the file dividers.99 Mr Milling said he received Mr Howells' report the next morning, i.e. on 1 March.
It is necessary to make some observations about the content of Mr Howells' report regarding its objectivity. In the first place, while he mentioned the annual leave discussion, he made no reference to the breathing apparatus course question, which witness McIvor recalled was put to him by Mr McKenzie. Second, Mr Howells made no mention of the fact that, in the file divider episode, he got angry with Mr McKenzie - a reaction attested to by witness Ring - although Mr Howells did say that "Andrew Ring was present throughout the above conversation".100
Strictly speaking, of course, neither the annual leave nor the breathing apparatus course issues bear relevantly on the subject-matter of Mr Howells' report, i.e. Mr McKenzie's alleged possession of the file dividers. One is left wondering why Mr Howells chose to include in his report the annual leave matter, but not that concerning the breathing apparatus course or, indeed, why he included even one of those matters.
More importantly, however, is the fact that Mr Howells, in his report, did not inform Mr Milling that he (Howells) and Mr McKenzie had engaged in what was evidently an angry debate about the whole question of the file dividers. By that omission, in my opinion, Mr Howells allowed Mr Milling to assume at that point in time that all he had before him, regarding Mr McKenzie's position in the dispute, was an apparently uncontested admission.
The content of Mr Howells' report, in the circumstances, appears to me to be somewhat selective in the way in which it purported to deal with Mr McKenzie's position. The absence of any disclosure on Mr Howells' part that the relationship between he and Mr McKenzie was less than harmonious was, I think, arguably prejudicial to Mr McKenzie to the extent that all the relevant events of 28 February, so far as it appears Mr Howells knew them, were not put to Mr Milling.
One such area of possible prejudice, it might be argued, arises in connection with Mr Milling's direction to Mr Howells to investigate with Pasminco-EZ the existence of any authority for McKenzie to have the file dividers that Mr Howells alleged were in his possession. Indeed, although on different grounds, Mr Bronstein's submission on this point is, in effect, that Mr Milling's appointment of Mr Howells for that purpose was inappropriate, i.e. "the investigator, for want of a better term, was also the person making the allegation".101 In the circumstances, it is a matter of conjecture whether Mr Milling would have taken that course had he been aware of the true nature of the relationship between Mr Howells and Mr McKenzie.
But the question of possible prejudice to Mr McKenzie, in relation to Mr Howells' investigatory efforts, is not without some basis in fact. It appears that having become aware of the allegations against Mr McKenzie, presumably by reason of Mr Howells' investigation on 4 March, Pasminco-EZ, in a letter dated the same day, informed Mr Milling that, because of the incident, Pasminco-EZ did not want Mr McKenzie to return to the site.102
Mr Milling said that, while he did not call for the letter to be written and did not know who did, he did not rely on it as the basis of his decision to terminate Mr McKenzie's employment.103 There is no reason for me not to accept his evidence. However, it is a remarkable coincidence that a letter of that nature, arguably in circumstances entirely to Mr McKenzie's prejudice, should be sent to Mr Milling before he had formed any view as to Mr McKenzie's culpability. Mr Bronstein, however, did not develop the matter any further.
Mr Howells' involvement in the investigation of Mr McKenzie's circumstances leaves me with some feelings of disquiet. In the circumstances, having regard to the evidence, I accept Mr Bronstein's submission that Mr Milling's appointment of Mr Howells to make inquiries of Pasminco-EZ, rather than giving the task to an independent person, was inappropriate. In my view Mr Milling himself should have made those inquiries.
The evidence shows that on Tuesday, 4 March 1997 Mr Milling received telephone advice from Mr Howells that no person at Pasminco-EZ had either given the file dividers to Mr McKenzie or authorised their disposal in that manner.104 The same day Mr Milling spoke to Mr McKenzie by telephone and arranged to meet him at Chubb's offices the following day, Wednesday 5 March, at about 10:00am. Mr Milling did not, however, speak to Mr Ring that day because, although mentioned in Mr Howells' report, he (Milling) did not at the time believe such action was necessary105 because of Mr McKenzie's alleged admission.106
At the 5 March meeting, which took place in the presence of a Mr Alan Smith, Mr Milling informed Mr McKenzie of Mr Howells' allegations and read them out to him. There then followed some discussion at the conclusion of which, according to Mr Milling, Mr McKenzie denied the truth of the allegations and accused Mr Howells of setting him up.107
At Mr McKenzie's request, Mr Milling then proceeded to interview Mr Ring and Ms McIvor. According to Mr Milling, Mr Ring in effect said he had not heard anything because he had "switched off", since the discussion between Mr Howells and Mr McKenzie was nothing to do with him. When asked by Mr Bronstein if Mr Ring had said anything else Mr Milling's response was that, apart from what he (Ring) had already said, "No, that's pretty well it".108 Mr Ring however, in his evidence, said of his interview with Mr Milling "I went in and said what I knew or could remember of the conversation" and that "I informed Mr Milling and Mr Smith, I think it was at the time ... of what I'd heard and recalled at that time ... and that was on the night in question, I was at my post, there was a heated discussion - there was a discussion between Mr Howells and Mr McKenzie."109
As for Ms McIvor, Mr Milling expressed his recollection in the following terms:110
Ms McIvor, in her evidence, said that in her interview with Mr Milling and Mr Smith the same questions were asked of her as in the current proceedings, to which, she said, her responses were "exactly the same" and that she did not see Mr McKenzie take any property.111
After interviewing Mr Ring and Ms McIvor, Mr Milling's evidence is that he spoke again to Mr McKenzie and told him that "in my opinion they were not able to throw any extra light onto the subject" whereupon Mr McKenzie "became rather upset". Mr Milling closed the meeting by telling Mr McKenzie he would let him know Chubb's decision during the course of the day. Later that day, according to Mr Milling, he told Mr McKenzie that "based on our - on the evidence that I have before me ... you are going to be terminated".112
What was that evidence? In the first place there was Mr Howells' allegation, which Mr Milling said he viewed very seriously.113 Mr Milling said that, notwithstanding Mr McKenzie's denial of wrongdoing and the fact that Mr Howells' allegation was not corroborated in any way, his investigations did not disclose any evidence that might have obliged him to doubt the correctness of that allegation.114
Second, there is the evidence of Mr Ring. While Mr Milling made no mention of being told by Mr Ring of a "heated discussion" between Mr Howells and Mr McKenzie, I think it is highly likely on a balance of probabilities that Mr Milling was told of that fact but, at the time, simply discounted the information as being of no consequence. It is no discredit to Mr Milling, in the circumstances, that he did not recall on this occasion, some four months later, all the details of his conversation with Mr Ring or, for that matter, his conversations with Ms McIvor, Mr McKenzie or Mr Howells. However, that apparent oversight does identify another problem to which Mr Bronstein referred, i.e. that Mr Milling did not prepare written statements of the evidence given by the witnesses whom he actually interviewed.
The presence of such statements, normally to be expected I should think, would have helped to avoid the type of evidentiary conflict that has arisen in this case, where primary witnesses have different recollections, after the passage of time, of what was said at a particular interview at which they were present. That Mr Milling evidently did not produce such contemporary documents, especially in circumstances where Mr McKenzie apparently told him, at the end of the interview of 5 March, that "I'm going to sue him [Howells] and I'll sue Chubbs as well",115 does disclose in my view, as Mr Bronstein suggested, some inexperience on Mr Milling's part in the conduct of investigations of this kind.
Then, third, there is the evidence of Ms McIvor. Generally speaking, as to matters of substance, there is no significant conflict in my view between what Ms McIvor said she told Mr Milling and what he recalled her as having said at interview on 5 March. It is true that Mr Milling, in his evidence, put quite a lot of emphasis on his recollection that Ms McIvor apparently frequently used such words as "I did not notice". However, I do not make too much of that because, as I have already mentioned, there is no essential difference between them as to the substance of what was said and Ms McIvor's evidence is that her responses to Mr Milling and Mr Smith were exactly the same as those given by her in the current proceedings.
Accordingly, in the absence of any contemporary supporting documents that might suggest otherwise, it would be unwise of me to rely on the memory of either witness being so exact, as to actual words used, some four months after the relevant events. In the outcome, I am reasonably satisfied, on a balance of probabilities, that the substance of what Mr Milling had before him by way of Ms McIvor's evidence tended to strongly corroborate Mr McKenzie's denial of wrongdoing.
Finally, as a matter of his own knowledge, Mr Milling (1) was surprised at the allegation made against Mr McKenzie;116 (2) rated Mr McKenzie, as a team leader, "as being up there with ... what I would consider our very best";117 (3) to his knowledge knew of no client complaints against Mr McKenzie;118 and (4) had never needed to take any form of disciplinary action against Mr McKenzie.119
Notwithstanding the hesitation I entertain about Mr Howells' involvement in the investigation and the finding I have made as to its inappropriateness, the evidence obliges me to conclude, contrary to Mr Bronstein's submission, that Mr Milling's investigation into the allegations made against Mr McKenzie was, I think, adequate in all the circumstances. I am forced to this viewpoint because, even if Mr Milling himself had made the relevant inquiries of Pasminco-EZ, there is no certainty in my mind that he would have thereby become possessed of any relevant knowledge that might have alerted him to the difficult relationship that existed between Mr Howells and Mr McKenzie.
The absence of contemporary documentation in the form of witness statements and the like may, of course, impinge upon future proceedings, as it has done in this case; however, I do not believe their absence impeaches the quality of the actual investigation undertaken by Mr Milling.
Both Mr Bronstein and Mr Gates agreed that the test to be applied in determining the current dispute is that of "a balance of probabilities". Mr Bronstein, however, argued for a "very high balance of probabilities test" because of, in terms of Jamie Low and Briginshaw, the involvement of an allegation of unauthorised removal of company property.120
Mr Gates, on the other hand, contended that no increased "balance of probabilities" onus falls upon Chubb because (1) there is no allegation of theft or criminal proceedings and (2) having regard to Bi-Lo and that line of judicial reasoning, the onus is simply one of demonstrating that the company honestly and genuinely believed, on the information available to it at the time, that Mr McKenzie was guilty of the alleged misconduct.121
Bi-Lo, which on Mr Gates' submission is the correct principle to apply, sets down a number of tests that an employer must meet if it is to satisfy the evidentiary onus cast upon it in the case of a dismissal based on alleged misconduct. Briefly, they are that:122
Applying those tests to the facts and circumstances of the present matter, I note my earlier finding that Mr Milling's investigation into the allegations made against Mr McKenzie was adequate in all the circumstances. Although I have not dealt with the matter specifically, it is clear from the evidence of both Mr Milling and Mr McKenzie that Mr Milling at all times gave Mr McKenzie every appropriate opportunity to present his side of the case, to explain his actions, to have his witnesses interviewed and, generally, to contest Mr Howells' allegations.
Mr Milling's evidence, concerning the belief he held at the time he dismissed Mr McKenzie, is that "in my honest opinion, I believe that I terminated Mark McKenzie on the evidence that was presented to me" and that "I feel, at the end of the day, that I did do the right thing".123 On the basis of that evidence, which arose in cross-examination, I find that Mr Milling honestly and genuinely believed Mr McKenzie was guilty of the alleged misconduct.
I have already discussed in some detail the evidence Mr Milling actually had before him at the time. In its essential relevant parts, in brief, he had Mr Howells' allegations, which he knew to be completely unsubstantiated;124 he had Mr Ring's evidence about which, on a balance of probabilities, I accept he was right to conclude did not throw any extra light on Mr McKenzie's circumstances;125 he had Ms McIvor's evidence about which, as to its substance, I find he misled himself by concluding that it did not help Mr McKenzie's case - to the contrary in my view, as I have already noted, her evidence tended to strongly support Mr McKenzie's denial of wrongdoing.
In the circumstances, it is my judgment that the weight of the evidence before Mr Milling, at the time he decided to dismiss Mr McKenzie, was against Mr Howells' unsubstantiated allegations but in support of Mr McKenzie's denial of wrongdoing. Accordingly I find that, at the relevant time, Mr Milling did not have reasonable grounds for honestly and genuinely believing that Mr McKenzie was guilty of the misconduct alleged by Mr Howells - most likely because, on a balance of probabilities, he allowed himself to be so blinded by Mr McKenzie's alleged admission that he failed to see past it to the significance of Ms McIvor's evidence.
Finally, there is the knowledge that Mr Milling possessed of relevant mitigating circumstances such as Mr McKenzie's work record. Mr Milling's evidence is that, paraphrased, Mr McKenzie was good at his job, had not been the focus of any client complaints, and had never been the subject of any disciplinary action. In coming to his decision to dismiss Mr McKenzie, Mr Milling's evidence suggests he gave no weight whatsoever to those arguably mitigating circumstances.
In my opinion the evidence permits me to determine the present application on the basis of the tests particularised in Bi-Lo, the approach for which Mr Gates strongly argued, in addition to the other decided cases to which he also referred. There is, perhaps, a need to mention Sangwin.126 The present case is not one of those in which an honest belief held on reasonable grounds was based on facts subsequently shown to be wrong. In this case, as I have said, the facts persuade me that the reasonable grounds were not present in the first place.
In addition to Bi-Lo there is the "very high balance of probabilities test" contention relied upon by Mr Bronstein. I believe the test has application in the current proceedings even though, as Mr Gates submitted, there are no police offences or proceedings of a criminal nature involved. I take that view because it is implicit in Mr Milling's evidence that Chubb would be unlikely to employ a security guard with a record of that nature, i.e. "we take a very firm stand on the misuse of companies' property unless otherwise authorised" and "we have to be seen being above all [reproach] in all areas within security work". In addition, the evidence of witness Moore, himself the proprietor of a security company and hardly an unbiased witness regarding Mr McKenzie, said he would not employ a security guard against whom had been found proved allegations of unauthorised taking of client property.
In summary, taking into account the facts and circumstances and all the preceding considerations, I am satisfied that whether it be on the "low" balance of probabilities test urged by Mr Gates or the "very high balance of probabilities test" for which Mr Bronstein contended, Mr Milling's honestly and genuinely held belief that Mr McKenzie was guilty of the misconduct as alleged was not based on reasonable grounds, having regard to the evidence that was then before him. Accordingly, I find that Chubb's dismissal of Mr McKenzie was not justified.
There is one further ground upon which Mr Gates relied that, not without some sense of relief, I may deal with quite briefly. In short he argued that, in contravening company policy regarding unauthorised use of client property, Mr McKenzie, as an employee, breached his duty of good faith and fidelity towards his employer, Chubb. Having found that, on a balance of probabilities, Mr McKenzie did not take the file dividers in question,127 it follows that he did not contravene company policy and, hence, was not in breach of any fiduciary type duty to Chubb.
The above findings bring me to the question of what should be done, or what action should be taken, for the purpose of settling the particular industrial dispute pursuant to section 31(1) of the Act. Before making any order, however, section 31(1A) obliges me to "take into account the standards of general application contained in Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer"(the ILO Convention).
Article 4 of the ILO Convention vests in a worker the right not to have his or her employment terminated "unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements" of the employer. In the present case, Chubb did not allege that its dismissal of Mr McKenzie flowed from any want of capacity on his part.
Having regard to the findings I have made above there is no basis, in my opinion, upon which Chubb might assert that its termination of Mr McKenzie's employment was justifiably grounded in his conduct or that, since Chubb's belief that Mr McKenzie was guilty of the alleged misconduct was not based on reasonable grounds, his dismissal was justifiably grounded in the employers' operational requirements. In light of those considerations I find that, within the meaning of Article 4 of the ILO Convention, Chubb did not have a valid reason for its termination of Mr McKenzie's employment.
Reinstatement or Compensation
In circumstances where a termination is found to be unjustified, Article 10 of the ILO Convention provides inter alia that where a tribunal finds it impractical to order reinstatement of an employee whose employment has been unjustifiably terminated, the tribunal may order compensation or such other relief as may be deemed appropriate.
Regarding reinstatement, Mr Bronstein said that, while acknowledging witness Milling's statement that no position is presently available to which Mr McKenzie could be appointed, the General Manager of Chubb in Tasmania, Mr Hunt, was not called to confirm Mr Milling's view. In any event, Mr Bronstein continued, the evidence is that Mr McKenzie and Mr Howells had a good relationship before Mr McKenzie's dismissal and, with some forbearance and goodwill from both of them, a relationship of sorts could be re-established. Mr McKenzie's colourful statements at the time of the termination and during the period leading up to that event, which Mr McKenzie said were not intended for Chubb, should be viewed, Mr Bronstein argued, in light of the circumstances in which he found himself at the time.
In Perkins v Grace Worldwide (1997)128, Mr Bronstein said, the Full Court of the Industrial Relations Court of Australia, on appeal, examined the degree to which loss of trust might arguably render reinstatement impracticable. There the Court said (p.7):129
Reinstatement of Mr McKenzie, Mr Bronstein contended, is a valid option for the Commission.
Mr Gates argued that any order for reinstatement would unfairly penalise the employer. In addition to the substantial delay that the parties themselves incurred in having the matter heard and determined, Mr McKenzie's conduct on 28 February and, again, on 5 March 1997, Mr Gates said, concerning the derogatory remarks he made of his supervisor, Mr Howells, is destructive of the employment relationship and, given also that Chubb cannot now place any significant degree of trust in Mr McKenzie, insufficient to permit re-establishment of the employment relationship. Furthermore, Mr Gates added, any order for reinstatement will result in displacement of the full-time employee subsequently appointed to the position previously held by Mr McKenzie.
Regarding the authorities relied upon by Mr Bronstein in support of Mr McKenzie's claim for reinstatement, the Commission should not look at them very closely, Mr Gates urged, because they arise from application of the federal legislation in which reinstatement appears to have been a high priority. This Commission, Mr Gates submitted, is not bound to that standard; rather, he contended, it should, in looking at the particular facts and circumstances, determine what is reasonable in each case, being generally loath to order specific performance of a contract of employment between parties who no longer realistically want it.
It seems to me that the question of reinstatement is not as straightforward as the submissions of Mr Bronstein might suggest. While I do not subscribe to the notions advanced by Mr Gates that reinstatement is impractical merely because it would displace an employee appointed in Mr McKenzie's stead or that, given the findings I have recorded above, Chubb can no longer trust Mr McKenzie, there are other influences that, in my view, materially affect the practicality of reinstatement. Each case, as was held in Perkins, must be decided on its own merits.
My primary consideration in this regard, to which Mr Gates directed me, is the demonstrably poor relationship between Mr McKenzie and Mr Howells. A review of the evidence discloses the following relevant factors. In the first place, Mr Howells was critical of Mr McKenzie because "he didn't like to accept instructions" by which I interpret Mr Howells to mean that Mr McKenzie did not like to accept instructions from him (Howells). Mr Howells' observation, in my view, is reflective of the fact that, as I have already noted, Mr McKenzie did not respond well to Chubb's preferment of Mr Howells, rather than he, for appointment to a supervisory position.130
Indeed, while it was Mr McKenzie's duty, in the circumstances, to recognise Mr Howells' supervisory authority he, to the contrary, seems to have wanted to reject it - as evidenced by his erroneous assumption that Mr Howells' primary purpose in visiting the Pasminco-EZ site on 28 February 1997 was because he did not trust him (McKenzie) to run his own shift.131
Then, second, there is Mr McKenzie's temperament. When I asked him whether he thought of himself as a person who could be easily provoked he said "no, definitely not easy": yet, immediately before I asked that question, Mr McKenzie admitted that, if he was accused of something that he had not done, he could get very upset.132 In my opinion the evidence discloses that, on balance, Mr McKenzie is a person who is easily provoked, at least in the context of his relationship with Mr Howells. For example, he admitted to having a heated discussion with Mr Howells every now and then;133 he admitted to getting angry with Mr Howells during the breathing apparatus course discussion;134 he admitted to getting angry with Mr Howells and directing abusive language at him when accused of taking the file dividers;135 and, at his interview with Mr Milling on 5 March, he admitted to getting very upset and to using threatening and abusive language towards Mr Howells.136In the circumstances, the evidence satisfies me that the relationship between Mr McKenzie and Mr Howells is so far beyond redemption that, on any reasonable assessment, it would be prejudicial to Chubb's operations to put Mr McKenzie back into a workplace environment where, in the ordinary course of Chubb's business activities, he may once again be required to work under Mr Howells' supervision. For those reasons, contrary to Mr Bronstein's submission, I am satisfied that reinstatement of Mr McKenzie is impractical.
In the event that the Commission should decide against reinstatement, Mr Bronstein argued, an appropriate compensation would be the equivalent of 25 weeks' wages, i.e. 20 weeks' lost wages from 6 March to 30 July 1997 less five weeks' wages paid to Mr McKenzie at time of termination, to which should be added the equivalent of 10 weeks' wages as general compensation for wrongful dismissal. According to Mr McKenzie, his average weekly wage, before his dismissal, was $505 for a 42 hour week.137
The power to award compensation, Mr Gates argued, is entirely discretionary. If, he said, contrary to Chubb's submissions, the Commission should find in favour of Mr McKenzie, it should not award any compensation. The evidence, he continued, shows that Mr McKenzie, who was only employed by Chubb for just over six months, received income following his dismissal at or about the rate of $123 per week. In addition, he went on, Mr McKenzie has benefited from his small business activities (installing security systems) which would not have been available to him had he remained an employee of Chubb.
While I was not referred to any decided authorities in relation to Article 10 of the ILO Convention and the question of compensation, it is clear from the decision of a Full Bench of this Commission in Capital Hill Corporation Pty Ltd v Terence James O'Connor138 that the approach is that suggested in Nicolson v Heaven & Earth Gallery Pty Ltd  126 ALR 233 and the cases therein referred to, i.e. a consideration of what would have been likely to occur had Chubb not unjustifiably terminated Mr McKenzie's employment.
In that regard the evidence of the poor working relationship between Mr McKenzie and Mr Howells, following the latter's supervisory appointment, was such that, on any reasonable assessment in my opinion, it is unlikely that Mr McKenzie would have remained an employee of Chubb in any long term sense. I say that because, admittedly as a matter of conjecture, not only might a further dismissal situation have arisen but Mr McKenzie, of his own volition, might equally have chosen to terminate his contract of employment.
In all the circumstances, including his employment with MSS before its amalgamation with Chubb, I believe Mr McKenzie, despite the difficulties that had arisen between he and Mr Howells, was entitled to expect that his employment with Chubb, had it not been for his dismissal, would have continued for some further period of time. For that reason I reject Mr Gates' submission that I should refrain from awarding any compensation; however, I do accept that, in respect of any compensation order that I might make, there should be a set-off in respect of Mr McKenzie's earnings during the relevant period.
I do not accept Mr Bronstein's implied view that the assessment of adequate compensation is a matter capable of being conveniently compartmentalised into categories of lost wages and general compensation for wrongful dismissal. In my opinion the measure of adequate compensation in this case must be determined by reference to my conclusion that, on the facts and circumstances, it is unlikely Mr McKenzie would have remained an employee of Chubb in any long term sense. In that light I assess adequate compensation as being an amount equivalent to 20 weeks' lost wages.
Against that sum there must be set off the five weeks' pay in lieu of notice paid to Mr McKenzie at the time of his dismissal. The resultant balance of 15 weeks represents what, in my judgment and on the balance of probabilities, comprises the period of time that Mr McKenzie might have expected to remain an employee of Chubb. In coming to this conclusion I have taken into account the fact that my overturning of Mr McKenzie's dismissal, having regard to the evidence, is of considerable benefit to him in that it ensures his continued capacity to offer himself for employment in the security industry - an ability he has already demonstrated by way of his part-time employment with Moore & Moore Security.
According to Mr Bronstein, Mr McKenzie's weekly wage rate at the time of his dismissal was $505 for a 42 hour week. There is no reason on the evidence for me to assume that this amount is incorrect or that Mr McKenzie would not have continued to work a 42 hour week. Against a total maximum amount of $10100 ($505 x 20 weeks) that I might therefore order by way of compensation, there must be allowance made for, in my opinion: (1) the value of the five weeks' pay that Mr McKenzie received at termination; (2) the value of Mr McKenzie's total earnings during the relevant period as an employee of Moore & Moore Security; and (3) such earnings as accrued to him by reason of his small business activities, which would not have been available to him had he remained a Chubb employee.
I am prepared to make an order on the above basis. However, even if I assume that the value of Mr McKenzie's five weeks' pay on termination was $2525 ($505 x 5), I cannot appropriately complete the minutes of any proposed order until such time as I have before me reliable evidence as to the money amounts of items that the order must incorporate by way of set-off. In the circumstances I intend to reconvene the hearing of this matter for the purpose of settling the minutes of my proposed order. My Associate, Mrs J Gillie, will contact the parties for the purpose of arranging a convenient date and time of such hearing.
B R Johnson
Date and Place of Hearing:
1 Exhibit G2.