T9197 - 8 December
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Construction, Forestry, Mining and Energy Union, and Pasminco Australia Limited
Industrial dispute - termination - procedural unfairness - reconvened for remedy - reinstatement impractical - compensation ordered REASONS FOR FINAL DECISION Reasons for decision re remedy In my decision of 3 November 2000 I found that the summary termination of Mr Storey was unfair. In response to a written supplementary submission from Ms Zeitz the hearing was reconvened on 20 November 2000 for the purpose of hearing further evidence and argument on the question of remedy. By facsimile correspondence dated 16 November 2000 Ms Zeitz foreshadowed an application to re-open the matter. During submissions on the "application to re-open", it became apparent that Ms Zeitz was not seeking in any way to alter my finding of 3 November, but rather, to introduce new evidence of a medical nature which, in the submission of Ms Zeitz, was relevant to the issue of remedy. It was on this basis that I ruled that the hearing would proceed to hear evidence and argument on remedy alone and at that stage no potential witness evidence had been ruled out. Evidence The following witnesses gave evidence: Gene Francis Storey Mr Storey is the applicant. His evidence can be summarised as follows:
Stephen Chambers
Dr Timothy Chester Stewart
Andrew Ray Hill
Reinstatement or Compensation The scheme of Section 31 of the Act makes it clear that where a termination is found to be unfair, then the primary remedy is reinstatement. An order for compensation is only an option when reinstatement is found to be impractical. Mr Harris argued strongly that Mr Storey should be reinstated. His submissions can be summarised as follows:
In opposing reinstatement, Ms Zeitz contended that there had been an irreparable breakdown of trust between the Company and Mr Storey. On the issue of interaction with management, Ms Zeitz said:9
Ms Zeitz submitted that even on the Commission's finding, Mr Storey had misled his employer. Given the evidence of Dr Stewart, the question of Mr Storey's capacity for work continues to be a live issue between the parties. Ms Zeitz contended that the action of Mr Storey was inconsistent with recovery and drew an analogy with the decision of Lehman v Monier.10 It was submitted that two incidents whereby Mr Storey was injured because he was not wearing gloves were an indication that Mr Storey's attitude is inconsistent with that of a responsible and trustworthy employee. Ms Zeitz referred to the fact that he was on a final warning, and that his conduct right through, both in relation to what led to the final warning and the circumstances surrounding his injury, "... are all inconsistent with him returning to work as a responsible and trustworthy employee ..."11 Ms Zeitz referred to a number of authorities including Mason v Electricity Commission of NSW12 and Lane v Arrowcrest Group13. I must say I found these authorities of greater relevance to the issue of fairness rather than remedy. The Commission has before it only limited guidance in terms of authorities on the question of reinstatement versus compensation. Mr Harris referred to the decision of Flinders Medical Centre v Tingay14 whereby Stanley DP said:
Whilst I broadly agree with this view, I do observe that an order for reinstatement which is strongly contested, is not something which should be contemplated lightly. In some respects an order for reinstatement falls not far short of an order that two people either stay married, or in the alternative, re-marry. Ms Zeitz contends that there has been an irreparable breakdown of trust between the Company and Mr Storey. This of course requires something more than a mere statement to this effect, it must in some way be believable on the evidence. This does not in my opinion mean that the Commission or some other person, faced with the same set of facts, must also necessarily conclude that there has been an irreparable breakdown of trust. A breakdown of any relationship is very much in the eye of the beholder. In the absence of any other guidance, I hold the view that in determining whether reinstatement is practical, when one side has said that there has been an irretrievable breakdown, the role of the Commission is to determine whether or not that view is reasonably open to the party which expresses it. This must be distinguished from a view based in caprice or retribution. My decision of 3 November was based on an absence of procedural fairness. It was not a medical conclusion. Subsequently we have the evidence of Dr Stewart which is clearly at odds with the evidence of Dr Stone. This of course has no bearing on my earlier decision. It simply means that two medically qualified people have a different view of the work capacity of, in this case, Mr Storey, a situation which on the evidence of Mr Hill is not uncommon. Presumably the medical issues will be ultimately determined in another Tribunal. Having said that, having regard for the totality of the evidence I am able to conclude with some confidence that the employer holds the following views:
It is unnecessary for me to express a view on any of the above for the reasons previously outlined. I am prepared to find however that it is reasonably open for the employer to hold these views. Indeed this lack of trust as expressed by the Company had previously manifested itself with a period of extensive video surveillance of Mr Storey. It is clear that the employer has had a lack of confidence in Mr Storey for some time, a view that was unquestionably exacerbated by the events of August and September. It is on this basis that I must accept the submission of the employer that there has been an irreparable breakdown in the relationship with Mr Storey and for that reason reinstatement is impractical. This of course in no way changes my view that the termination was unfair. It naturally follows that there is a strong case for an order of compensation. Compensation The parameters set by the parties for an assessment of compensation are broad to say the least. Mr Harris submitted that, based on Mr Storey's Pasminco earnings, including superannuation, a projected working life until age 60, a 3% discount rate and a 30% reduction for contingencies, the appropriate starting point is in the order of $533000. In fairness, Mr Harris did not contend that this should be the amount of compensation, but it was a fair assessment of the potential loss. Mr Harris said that nonetheless an order for compensation should be substantial and that the following were relevant considerations:
Ms Zeitz submitted that if the Commission accepts that the dismissal was reasonably open to the employer, but it was the fact of summary termination which made it unfair, then Mr Storey would be entitled to five weeks' notice as the maximum compensation. I do not accept this submission. Mr Storey was dismissed for alleged misconduct, an action I have found to be unfair. It cannot in my view be made to be fair by the giving of appropriate notice. The issue of notice is more relevant for termination based on performance grounds. In my experience it is not normally a pivotal consideration where alleged misconduct is involved. In this case my finding would have been the same, irrespective of whether notice was given. Ms Zeitz submitted that Mr Storey had a chequered work attendance record over the past 12 months and he continues to claim partial incapacity in relation to his back. As such it was highly unlikely that he would have worked through to age 60. Ms Zeitz said that Mr Storey had an obligation to mitigate his losses and his efforts to date were "hardly enthusiastic". Ms Zeitz also submitted that any compensation order should not "double dip" in the context of workers' compensation payments. In assessing how long Mr Storey would have remained in Pasminco employ, had he not been dismissed, there are a number of competing factors. On the one hand Mr Storey was a long-standing employee and, on the evidence, he clearly wanted his job back. Against that, Mr Storey was on a final warning15 which had been written in unambiguous terms. It is true that this warning was to "expire" on 2 October 2000 but I do not attach a great deal of weight to this aspect. I accept the submission of Ms Zeitz that this would do no more than remove the "one more strike and you're out" element. Mr Storey was clearly under close watch and it is not difficult to foresee that a new "final warning" might have been in place in a relatively short space of time. There is also the issue of the disputed medical evidence. It is clear that the company will pursue this issue vigorously. At this stage of course the outcome can only be a matter of conjecture. In my view the likelihood that Mr Storey's future employment would have been relatively short term is higher than the alternative of ongoing, indefinite duration. Having regard to the totality of the evidence my view is that an appropriate order for compensation is a payment equivalent to 20 weeks' salary. On the basis of the pay slips, this is an amount of $18790. From this should be deducted any workers' compensation payments made up to the time payments ceased as a consequence of the notice to terminate payments served on Mr Storey by the employer. I understand that this would be in the region of $2500, but it is a precise figure known to the parties. I decline to take into consideration what the future might hold in terms of the disputed workers' compensation matter for the following reasons:
ORDER Pursuant to Section 31[1B] of the Act, I hereby order that Pasminco Australia Limited trading as Pasminco Hobart Smelter pay to Gene Francis Storey of 8 Ewans Court, Glenorchy, Tasmania 7010 an amount equal to $18790 less any payments made pursuant to the Workers Rehabilitation and Compensation Act 1988 during the period between 12 September 2000 and 8 December 2000. I further order that such payment be made within 21 days of the date of this decision.
Tim Abey Appearances: Date and Place of Hearing: 1 Exhibit A15 |