T13032
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Peter Murray Kennedy and AutoRent Pty Ltd
Industrial dispute - entitlement to pro rata long service leave - serious and wilful misconduct - not found - order issued REASONS FOR DECISION [1] On 18 October 2007, Peter Murray Kennedy (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with AutoRent Pty Ltd in respect to a dispute over the entitlement to pro rata long service leave. [2] This matter was listed for hearing on 27 and 28 November 2007. Mr C Green, solicitor, Page Seager, appeared for the applicant. Mr J Zeeman, solicitor, Zeeman and Zeeman, with Ms J Logie, appeared for the respondent. Closing submissions were filed in writing on 7 December 2007. Background [3] Mr Kennedy commenced employment with AutoRent as a mechanic on 16 March 1995. His place of employment was Hobart Airport. Mr Kennedy's employment contract was summarily terminated on 27 September 2007. Therefore he had 12.5 years' service with AutoRent. Mr Kennedy is 64 years of age and planned to retire in September 2009. [4] Mr Kennedy claims an entitlement to pro-rata long service leave. [5] Section 8(2)(b) of the Long Service Leave Act 1976 provides that a pro-rata entitlement arises when the employment of a person, who has completed seven but less than 15 years' service, is terminated in certain defined circumstances. [6] Section 8(3) defines one of those circumstances as:
[7] The evidence in this case concerns the admitted practice of the applicant in completing timesheets stating that he worked 7.00am to 5.00pm when in fact he often commenced after 7.00am and on occasions finished before 5.00pm. The Employment Separation Certificate cites misconduct as the reason for termination and states further: 1
[8] The respondent contends that there was an additional element in that Mr Kennedy was motivated by an earlier industrial dispute, and in coming in late and leaving early, Mr Kennedy was seeking "to recoup what he felt he was owed". [9] The applicant contends that his timekeeping practices were known to and condoned by local management. Further the time lost was more than made up by his practice of working through meal and rest breaks. Mr Kennedy had not been previously warned on any performance related issue. Whilst Mr Kennedy was disappointed as to the outcome of the earlier industrial dispute, he had accepted the result and moved on. He denied that he told his workmates that he changed his hours so that he was paid for hours that he did not work. Evidence [10] Sworn evidence was taken from the following witnesses:
Witness Credit [11] Mr Zeeman submitted that the evidence of Mr Kennedy was "at best, inconsistent", and where there was conflict with the evidence of other witnesses, the evidence of those witnesses should be preferred. [12] There was one occasion when Mr Kennedy said he could not recall the name of a certain individual, even though I am quite satisfied that this was not the case. I daresay Mr Kennedy was motivated by a misguided sense of loyalty and protection towards this individual. Nonetheless it was a particularly disappointing aspect of his evidence. There were other occasions where Mr Kennedy appeared evasive, I suspect because he was anticipating a trick question when none existed. [13] In summary, there were aspects of Mr Kennedy's evidence which were both disappointing and irritating. These shortcomings however, were not of such moment as to necessitate an overall adverse finding as to witness credit. The Initial Dispute Concerning Rosters [14] Upon engagement Mr Kennedy and the other Hobart Airport mechanic, Mr Debnam, worked a roster based on an eight hour day with ordinary hours including every second weekend. After two and a half years management introduced a changed roster which involved working ordinary hours Monday to Friday only. According to Mr Kennedy, this change resulted in approximately $5,000 pa reduction in earnings. [15] The matter was the subject of negotiations over four or five months and ultimately an agreement was registered in the Industrial Commission. Mr Kennedy said:2
[16] Asked whether the roster was still a live issue Mr Kennedy replied, "Not really, no."3 [17] Whether or not the roster remained a "live" issue, it was certainly a matter that was discussed in the workplace. Mr Kennedy said:4
[18] And later:5
[19] In 2004 a further roster change was instituted in consultation with the mechanics. This roster involved providing cover over the weekend, although it would seem that it was a different arrangement to that which was in place during the early years of Mr Kennedy's employment. [20] The relevance of the roster dispute is that the respondent contends that Mr Kennedy's timekeeping practices were in fact his means of clawing back "what he was owed" as a consequence of the roster change. This aspect is discussed later in the decision. Mr Kennedy's Time-keeping Practices [21] Mr Kennedy's rostered hours were Monday to Friday 7.00am to 5.00pm and on weekends 7.30am to 5.00pm. Mr Kennedy was required to complete timesheets which invariably reflected a 7.00/7.30am start and a 5.00pm finish. These time sheets were countersigned by his manager, Mr Verrios. [22] Ms Logie is based in Launceston and visits the Hobart Airport site on a regular basis. On 1 August 2007 she was at the airport, together with Ms Miller. Her evidence was that she observed Mr Kennedy arrive at 7.37am, and confirmed this with Ms Miller. [23] Ms Logie said that she had "heard rumours" that Mr Kennedy started late and decided to check the position with other staff, including Mr Debnam and Mr McDonald. [24] Mr Debnam worked closely with Mr Kennedy throughout the entirety of Mr Kennedy's employment with AutoRent. Mr Debnam said that initially they got on well, although the relationship deteriorated in more recent years. Following one particular incident they did not speak to each other for at least six months. On any normal week, they worked together for at least three days. [25] Between 9 May and 3 July 2006 Mr Debnam kept a record6 of Mr Kennedy's start and finishing times, on the days they worked together. Mr Kennedy was unaware of this. Of the 22 start times, the earliest was 7.15am and the latest 7.45am. The average of all recorded starts was 7.24am. Of the 12 recorded finish times, the earliest was 3.52pm and the latest 4.45pm. The average was 4.17pm. [26] Mr Debnam said he kept the record as a defence against a possible redundancy situation. His evidence was:7
[27] Mr Debnam showed Mr Verrios the record but would not give it to him. His evidence was:8
[28] After Ms Logie commenced the investigation in August 2007, Mr Debnam provided her with a copy of the 2006 document. He also agreed to a request from Ms Logie to maintain an ongoing record of Mr Kennedy's time-keeping. This record shows four start times during August 2007 of between 7.20am and 7.23am, and one finish time of 4.45pm.9 [29] Mr Debnam said that Mr Kennedy had been commencing later than rostered start time for "many years".10 [30] Mr McDonald's evidence was that although he did not have a precise view of when the mechanics commenced work, his "recollection was that Peter Kennedy would start somewhere between 7.30am and 8.00am on most days".11 [31] Mr Carter said he worked at the Hobart Airport for three days in 2001. He said that to the best of his recollection, Mr Kennedy commenced work later than Mr Debnam on at least two of those days. [32] Ms Miller worked at the Hobart Airport from 27 January to 6 February 2004. She said that she did not have any cause for concern in relation Mr Kennedy's time-keeping during that time. [33] Mr Kennedy agreed that he always marked his timesheet as 7.00am to 5.00pm Monday to Friday and 7.30am to 5.00pm on weekends. He said that other employees, including Mr Debnam, recorded their timesheets in the same manner.12 [34] As to the hours actually worked, Mr Kennedy's evidence was:13
[35] Mr Kennedy said there were occasions when Mr Verrios allowed him to leave early for reasons such as family illness.14 [36] Mr Kennedy said that he quite often worked well past 5.00pm on weekends because he was the only one there, but that would not be recorded on the timesheet.15 [37] Mr Kennedy agreed that he regularly commenced later than Mr Debnam but did not accept that it would be 30 to 40 minutes later. He denied categorically finishing at 2.30pm on weekends.16 [38] Mr Kennedy maintained that because he worked through recognised breaks, AutoRent would be "in front". He said:17
[39] And later:18
[40] Mr Verrios was Mr Kennedy's direct manager. In his sworn statement he said:19
[41] In his evidence, Mr Verrios said:20
[42] And later:21
Was Mr Kennedy Warned About His Time-keeping? [43] In his statement Mr Verrios said:22
[44] Mr Verrios said that at times he felt intimidated by Mr Kennedy. His evidence was:23
[45] Mr Kennedy categorically denied that Mr Verrios had ever expressed concern as to his time-keeping.24 The issue of "Intent" [46] The respondent submitted that the reason for termination was not his failure to correctly complete timesheets. If it were just a matter of Mr Kennedy coming in late, AutoRent would not have terminated Mr Kennedy's employment. Rather, Mr Zeeman submitted, it was Mr Kennedy's underlying intent in doing so, which amounted to serious and wilful misconduct. [47] The evidence of Ms Logie was:25
[48] Mr Debnam maintained that Mr Kennedy carried with him in an old school bag documents relating to the earlier dispute concerning rosters, and this, according to Mr Debnam, included calculations of what the change had cost him in monetary terms. In his statement, Mr Debnam said:26
[49] Mr Kennedy denied the substance of these statements.27 [50] These issues were put to Mr Kennedy by Ms Logie, during the interview which led to his termination. Her statement records the following:28
[51] Mr Kennedy accepted as accurate paragraphs 27 and 28, but denied any incident involving Mr Harlow. [52] Mr Kennedy agreed that he had told Ms Miller that he had been financially disadvantaged. It was following this that the rosters were again changed to include a weekend component. [53] Mr Carter said that he had a discussion with Mr Kennedy in November 2001. In his statement Mr Carter said:29
[54] Mr Carter said that Ms Miller did not respond "specifically" when he passed on Mr Kennedy's comments. [55] Mr McDonald gave the following evidence:30
[56] This evidence was not put to Mr Kennedy. The Termination Interview [57] On 27 September 2007 Ms Logie conducted an interview with Mr Kennedy at which time the allegations were put. After the initial interview, the meeting was adjourned for an hour or so, during which time Ms Logie apparently checked certain aspects with Mr Debnam and Mr Verrios. [58] The substance of the meeting was covered in Ms Logie's statement31 and has been largely canvassed elsewhere in this decision. There are two particular aspects which are worthy of note. [59] Paragraph 64 of the statement reads:
[60] This was pursued under cross-examination. Ms Logie's evidence was:32
[61] The second aspect goes to whether or not Mr Verrios had raised the timekeeping issue with Mr Kennedy. Ms Logie's evidence was:33
Closing Submissions Mr Green, for the Applicant [62] The issue under consideration was the stated reason for termination, i.e "not working hours entered on time sheets". [63] The admitted time-keeping conduct does not amount to serious and wilful misconduct. [64] "Serious misconduct" was considered in AMASCU v Migrant Resource Centre (Southern Tasmania) Inc34 where it was held: "It is well established that behaviour that constitutes serious misconduct must be of such nature so as to strike at the heart of the employment contract." [65] Misconduct that was "wilful" was considered in Law v London Chronicle Indicator Newspapers35. In that case it was held that the conduct must be of such a nature to show in effect that the employee is repudiating the contract of one of its essential conditions. [66] Mr Kennedy's immediate manager (Mr Verrios) took no issue with Mr Kennedy's work performance or productivity. At no stage did Mr Verrios issue a direction to Mr Kennedy in relation to his start and finish times. [67] It is unlikely that Mr Verrios raised the issue of timekeeping in any form. If it was raised it was not in a manner which could be construed as a warning. [68] Whilst Mr Verrios stated he felt at times intimidated by Mr Kennedy, there was no evidence of any threatening behaviour towards Mr Verrios. Even if he did feel intimidated Mr Verrios did not take advantage of other management resources available within the company. [69] Mr Verrios' knowledge is AutoRent's knowledge. The company condoned the behaviour of Mr Kennedy over a long period of time. [70] Mr Kennedy denied that he told his workmates that he would change his hours so that he was paid for hours that he did not work. He was not shaken from that position during extensive cross-examination. [71] In all the circumstances, it is unfair that no warning was provided to Mr Kennedy. Mr Zeeman, for the Respondent [72] Mr Kennedy's employment was not terminated because of the act of incorrectly completing timesheets, but rather his underlying intent in doing so. [73] Based on interviews with Mr Kennedy and other staff, the company had formed the view that Mr Kennedy was attempting to get back what he believed he was owed. [74] There were numerous first-hand witness accounts of Mr Kennedy arriving late and finishing early. There was also a 7.00am "near miss" report when the shift did not commence until 7.30am. Based on these observations, on average Mr Kennedy worked almost one hour less per day than was recorded on his timesheet. [75] There was evidence involving other employees which supports Mr Verrios' contention that he felt intimidated by Mr Kennedy. [76] Despite Mr Kennedy's contention that he had "moved on", there was evidence which suggested he continued to hold a grudge against the company. The matter of the original dispute was regularly raised with other staff by Mr Kennedy, years after the event. Mr Kennedy also carried calculations of the amount of money he had lost as a consequence of the roster change. [77] Even if Mr Kennedy's evidence as to working through breaks is accepted, it does not equate with the amount of time lost through late starts and early finishes. [78] The "wilful" element in Mr Kennedy's conduct is that he intentionally worked less hours in order to recover what he perceived to be his financial loss arising from the settlement of the dispute. [79] The conduct was serious in that it was done with intent to dishonestly obtain a financial advantage. As was set out in Concut Pty Ltd v Worrell:36 "It is, however, only in exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provisions aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee, once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal." [80] In Everard v Central Gippsland Health Services,37 Gay C held that intentionally claiming payment for hours not worked on a timesheet constituted serious misconduct. Findings [81] Whilst I accept that the separation certificate only makes the reference "not working hours entered on timesheet" I am unable to accept Mr Green's submission that this is the only issue to be considered. The matter of "intent" was a significant component of the 27 September interview and Mr Kennedy was clearly aware that this was an issue. I will therefore consider the totality of the evidence. [82] From the evidence certain conclusions clearly emerge. They include: B7 There can be no doubt that the actual hours worked by Mr Kennedy did not coincide with the timesheets. The only issue in contention is the extent of the discrepancy. B7 Similarly there can be no doubt that Mr Kennedy worked through morning and afternoon tea breaks, and at least part of the lunch break. B7 Mr Kennedy clearly was unhappy with the outcome of the original dispute, and he regularly made that known in conversations with other staff. Whether this dissatisfaction translated into a deliberate intention to dishonestly deceive the employer is another matter. B7 Mr Kennedy's timekeeping practices was known to his immediate manager and it is extremely doubtful that anything was done to correct this behaviour. [83] I deal with these broad conclusions in turn. [84] Mr Kennedy admitted he arrived five to 10 minutes late most days. On the available evidence I suspect this was more like an average of 20-25 minutes late each day. The position in relation to finish times is less clear. Whilst there were no doubt occasions when Mr Kennedy finished before 5.00pm, Mr Verrios said that he did not leave any earlier than anyone else and "specifically, the other mechanic did exactly the same". [85] There is no dispute that Mr Kennedy's timekeeping practices had been in place for many years. [86] There is also no dispute that Mr Kennedy worked through his morning and afternoon tea breaks and at least part of his lunch break. Such work was productive. I am also satisfied that at no stage did Mr Kennedy specifically seek permission to work on this basis. Whether the practice was condoned by the company is dealt with later. In the circumstances an analysis of whether the company or Mr Kennedy was "in front" is not particularly relevant. However if we accept Mr Verrios' evidence above as to finishing times, the ledger is probably not a great distance away from square, one way or the other. [87] Mr Kennedy was unhappy, perhaps even embittered, with the outcome of the original dispute. He openly conveyed this resentment in conversations with other members of staff, particularly Mr Debnam. Despite his claim that he had "moved on" I am satisfied that this unhappiness was never far below the surface, and further, he viewed the integrity of certain company managers in a diminished light. [88] I am also satisfied that Mr Kennedy held "calculations" of lost earnings in his school bag. Whether they were "calculations" or annotated rosters, Mr Kennedy knew with some precision the extent of his lost earnings, and it seems highly likely that such calculation had been documented in some form. Given the corroborative evidence, I am satisfied that Mr Kennedy had such a document in his presence. [89] It is not however a crime to be dissatisfied with an outcome. Mr Kennedy had lost more than $5,000 pa and it is not surprising that he was, and remained unhappy. Similarly it is not a crime to express such sentiments to work colleagues, even at the risk of creating irritation. [90] It is entirely another step to consciously seek to regain what is considered owed through dishonest behaviour, and it is this latter point upon which the respondent relies. [91] To prove serious and wilful misconduct carries a heavy onus. See Migrant Resource Centre; London Chronicle Newspapers and Concut. Mr Kennedy repeatedly denied any intent to recoup what he considered was owed. At worst Mr Kennedy conceded to Ms Logie that he may have once said something "as part of workshop banter". Even then it is not entirely clear whether this concession related to expressing dissatisfaction with the dispute outcome, or going the next step and openly stating that he was recouping what was owed. [92] Throughout the entirety of the evidence there is no single uncontested example whereby Mr Kennedy exhibited the intent relied on by the respondent. [93] It is also of significance that Mr Kennedy was quite open about his timekeeping practices. He made no attempt to hide his arrival times, nor could he. [94] Mr Verrios was fully aware of working arrangements and took no action to change them. He said that the actions of Mr Kennedy had no negative impact on productivity or the running of the workshop. He had never had reason to question Mr Kennedy's work performance. It seems unlikely that Mr Verrios raised timekeeping in any form with Mr Kennedy, and if he did, it certainly could not be construed as a warning. [95] Mr Verrios said he sometimes felt intimidated by Mr Kennedy and he did not wish to create a confrontation. Mr Kennedy presented as a strong-willed individual prone to gesticulating with his hands whilst conversing. To some he might also appear overbearing. There was not, however any suggestion that he had ever threatened his direct manager. Mr Verrios had received appropriate HR training, and, had he felt intimidated, he had the resources of senior and HR management to call on. He chose not to. [96] Similarly in 2001 Mr Carter informed Ms Miller as to Mr Kennedy's "attitude". Apparently no action was taken. [97] I accept Mr Green's submission that Mr Verrios was at all times acting as the servant or agent of AutoRent, and that the latter is bound by the actions of the former. This of course would not apply in, say, a case of a conspiracy to defraud, but such is not the case in the instant matter. If AutoRent as a company had a difficulty with the way Mr Verrios handled the matter, then that is an issue for senior management and Mr Verrios. It would be quite unfair to transfer the blame, in a punitive sense, to Mr Kennedy. [98] I have concluded that AutoRent condoned the work practices of Mr Kennedy over a long period of time. The company could have changed this at any time through an appropriate warning and/or counselling. They chose not to. [99] I find that Mr Kennedy's behaviour did not amount to serious and wilful misconduct. [100] Mr Kennedy has an entitlement to pro-rata long service leave and such entitlement is to be paid forthwith. I so order. [101] Leave is reserved to the parties to apply in the event of a disagreement as to the quantum of the entitlement.
Tim Abey Appearances: Date and place of hearing: 1 Exhibit A5 |