100108148

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES STEPHEN LAROSE

APPELLANT

 -v-

 KIAM CORPORATION LIMITED

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  CHIEF COMMISSIONER W S COLEMAN

  COMMISSIONER P E SCOTT

DELIVERED TUESDAY, 11 DECEMBER 2001

FILE NO/S FBA 47 OF 2001

CITATION NO. 2001 WAIRC 04391

_______________________________________________________________________________

Decision  Appeal dismissed.

Appearances

Appellant   Mr D Gordon (of Counsel) by leave and with him Mr M Morgan

   (of Counsel) by leave

Respondent   Mr J Uphill, as agent

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1                 In appeal No FBA 47 of 2001 the abovenamed appellant, Mr Stephen LaRose, appealed against the decision of the Commission at first instance, pursuant to s.49 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”), such a decision having been made on 13 July 2001 whereby the Commission, constituted by a single Commissioner, dismissed an application made by the appellant pursuant to s.29(1)(b)(i) of the Act.

GROUNDS OF APPEAL

2                 The appeal is made on the following grounds:-

  “1. Pursuant to section 49(2) of the Industrial Relations Act, 1979 ("the Act") the Appellant seeks to appeal the decision of the learned Commissioner.

   2. The learned Commission failed to have regard to the Appellant's rights pursuant to section 29(1)(b)(i) of the Act that his employment with the Respondent was not to be terminated in a harsh, oppressive or unfair manner.

   3. The learned Commissioner failed to give proper consideration to the fact that there were three different reasons proffered by the Respondent as to why the Appellant's employment was terminated namely:

   3.1 on 1 September 2000 the Appellant was informed by the Respondent his employment was terminated as Western Mining did not need him back on site;

   3.2 several days later at another meeting the Appellant was informed by the Respondent his employment was terminated as Mr Andrew Ellison of the Respondent overheard a conversation where it is alleged that the Appellant and another employee, Mr Luke Hudson, were intending to steal a caddy welder from site; and

   3.3 in the Respondent's closing submissions it was submitted by Mr Uphill, agent for the Respondent, the Appellant's employment was terminated for unsatisfactory work performance.

   4. The learned Commissioner should have had regard to the principles of natural justice in determining whether the Appellant's employment was terminated in a harsh, oppressive or unfair manner given that the Appellant was not afforded the opportunity to respond to any of the allegations made against him prior to the termination of his employment,.

   5. The learned Commissioner failed to give proper consideration to the final reason proffered by the Respondent, outlined in 3.3 above, as to why the Applicant's employment was terminated as no evidence was adduced by the Respondent supporting this submission.

   6. The learned Commissioner failed to give proper weight to investigation procedure undertaken by the Respondent as it was never proven that the Appellant had an intention to steal from site.

   7. The learned Commissioner failed to consider what are the proper investigation procedures, detailed in C v Smith Snack Food Company [1997] WAIR Comm 129 (2 July 1997), for investigating allegations of theft against an employee.

   8. The learned Commissioner erred in law by not applying the rule of Jones v Dunkel (1959) 101 CLR 298 which had the effect of him making inappropriate findings.

   9. The learned Commissioner erred in preferring the evidence of Mr Ellison to the Appellant. Exhibits “ABE1” and “ABE2” indicate the written material supporting Mr Ellison’s evidence was of recent construction.

  10. The learned Commissioner should have regard to and given appropriate weight to the evidence of Ms Michelle Greenwell regarding the Respondent's instructions to her to not truthfully inform the Respondent's employees, including the Appellant, as to why their employment was terminated.

  11. The learned Commissioner erred in not finding that the Appellant is entitled to compensation pursuant to section 23A(1)(a) of the Act.  

  12. The above grounds of appeal are matters of public interest in that they are all principles to be applied in unfair dismissal claim and as such are paramount to the work of the Commission.

  13. Relief Claimed

   13.1 The Appellant seeks to have the decision of Commissioner Wood set aside.

   13.2 The Appellant considers reinstatement with the Respondent would not be practical.

   13.3 The Appellant seek six moths (sic) compensation, based on the amount of $8,064.00 per month, for his unfair dismissal as he has not been able to secure full time employment since being terminated by the Respondent and is now on unemployment benefits.

   13.4 Pursuant to section 23A(1)(c) of Act the Appellant seeks an ancillary order for the Respondent to provide the Appellant with a statement of duties.”

BACKGROUND

3                 The appellant was employed as a mechanical fitter by the respondent company, Kiam Corporation Limited (hereinafter referred to as “Kiam”), at the Leinster Nickel Operation.  There, together with other contracting persons and companies, Kiam was a contractor to the mining company whose operation it is, namely Western Mining Corporation.  The appellant was responsible for the repair and maintenance of equipment.  The appellant alleged that he was unfairly dismissed on 1 September 2000 in that he was dismissed for allegedly discussing with another employee the intended stealing of company property.  The appellant did not seek reinstatement, but sought compensation for lost income, such loss being caused, he claimed, by his unfair dismissal.

4                 The respondent alleged that on 31 August 2000, the General Manager, Mr Andrew Ellison, overheard two employees discussing their intentions to steal a caddy welder from the site, namely the Leinster Nickel Operation.  The respondent conducted an investigation and says that the appellant, Mr LaRose, was identified as one of the participants in the conversation.  After consultation with Western Mining Corporation a decision was taken to “remove the appellant from the site”.  He was then dismissed on 1 September 2000.

5                 Mr LaRose said that he was employed full time by the respondent from March 2000 to 1 September 2000 and that he had a problem having pay matters fixed up, and that, in fact, there was a delay in paying what was due to him.  He also had difficulty obtaining work clothing and a Workplace Agreement and experienced problems on site due to a mobile scaffold falling over.  Because of these problems, at one stage, he spoke to another contractor on the site, Skilled Engineering, regarding the terms of an employment contract which they might offer. 

6                 On Thursday, 31 August 2000, in the afternoon and just prior to leaving the site, Mr LaRose spoke to a person called Rebecca on the telephone regarding his pay.  He says that she did not know what was happening about his pay and he was furious as a result.  He was flying out that day with two other employees, Mr Luke Hudson and Mr Gary Kruger.  Mr Kruger was a Western Mining employee and a Maintenance Team Leader ((ie) a sort of Foreman or Supervisor).  Mr LaRose went and had a couple of beers and got some food and then went to the airport with the other two employees.  He said that they were talking about the scaffold incident and his pay difficulties.  On the plane he sat opposite the aisle from Mr Hudson and had a three way conversation with Mr Hudson and Mr Vernon Reed, a Western Mining Storeman.  Mr Hudson and Mr LaRose were due to fly back to the site on the Monday.

7                 On Friday, 1 September 2000, Ms Michelle Greenwell, the personnel officer for the respondent, telephoned Mr LaRose and advised him that he was not needed back on site by Western Mining.  He asked if he had been sacked and she said “Not at this particular time.  Come in on Monday and we we’ll sort it out”.  He then went to the respondent’s offices in Rockingham with Mr Hudson.  He said they were told there by Ms Greenwell that Western Mining did not require them back on site but that she did not know why.  Mr LaRose said that he did not believe her and that he rang one of his colleagues at the site but could get no further information.  He then spoke to Mr Robbie Ellis, another team leader, who told him that it was alleged that Mr LaRose was intending to steal a power generator.

8                 After that Mr LaRose and Mr Hudson had a second meeting with Ms Greenwell who told them that the reasons why they were sacked was because their conversation was overheard by Mr Ellison on the way home in the aeroplane.  The appellant said that this was the last contact he had with the respondent.  He said that he thought that he was sacked because he was “rocking the apple cart”, and at about the same time he said the respondent’s contract was under threat.

9                 Mr LaRose was cross examined and denied that he and Mr Hudson talked about having approached Skilled Engineering to take over the contract.  He said that all conversation at the airport was with Mr Kruger and Mr Hudson, not just with Mr Hudson.  He said that they were out in front of the airport, not in the terminal because Mr Kruger is a smoker.  He did not deny that on the plane, Mr Hudson and he continued a conversation in which they made remarks critical of the respondent.  He denied that he said that he intended to steal the caddy welder.

10              Mr Hudson gave evidence, but he was not effectively able to be examined by Counsel for the appellant.  He had entered into a confidentiality agreement with the respondent arising from a conciliation conference before the Commission.  He said that he did not wish to violate the agreement and he was not questioned further by Counsel for the appellant or by Mr Uphill for the respondent.

11              Mr Ellison gave evidence that at the airport on 31 August 2000 he heard two people talking about Kiam.  He said that he went and stood side on from about two feet away from them, and that the two men were talking about a safety incident on the Leinster site.  They said that Western Mining and Kiam were looking to blame people for the incident.  They talked about a discussion one of the men had had with the payroll office in Kalgoorlie and about discussions which they had had with Skilled Engineering.  He heard the men say, he said, that they had asked Skilled Engineering to see if they could take the contract off Kiam and how much they would be paid by Skilled Engineering.  They then discussed whether they could get more money and Mr LaRose said that he was owed money by Kiam and to obtain this he would steal a caddy welding machine from the company for repayment of the money.  After 15 or 20 minutes they were approached by another person, and there was a five minute general discussion of various things to do with Western Mining but nothing of “a derogatory nature” was said.  All three men went outside and Mr Ellison assumed that they had a cigarette before boarding the plane.  He says that he did not know who the two people were at the time because he had not seen them before.  He sat behind the men on the plane and they continued their conversation criticising the respondent, and said they hoped that Skilled Engineering would get the contract.  He said Mr Hudson was directly in front of him and Mr LaRose was on his left on the other side of the aisle.

12              Mr Ellison returned to Perth and contacted his personnel department to confirm which Kiam employees were on the flight and their seat numbers.  He said in evidence that he also checked to see if there was any money owing to those employees.  Once it was confirmed that Mr Hudson and Mr LaRose were the two employees on the plane and it was confirmed by Mr Reece Power in Kalgoorlie that no monies were owing to them, he made a decision to terminate their services.  Before the dismissal occurred he instructed Ms Greenwell to talk to the Kiam site superintendent, Mr Peter Smith, to have him inform Western Mining of the conversation. 

13              In order to save “aggravation” the company took a decision to advise Mr Hudson and Mr LaRose that they were being put off because Western Mining was reducing numbers on site.  He advised Ms Greenwell to effect the termination.  He then instructed Ms Greenwell to talk to them again a couple of days later as they had spoken to Western Mining who had told them that it was a Kiam issue, not a Western Mining issue.

14              Ms Greenwell gave evidence that Mr Ellison called her on 31 August 2000 when he got off the plane.  She said that he asked her to find out who the two employees were on the plane and she telephoned the site supervisor, Mr Smith, who advised her of their names.  They were the only two Kiam employees on the flight.  She was also asked to enquire whether there was any substance in their complaints.  She told Mr Ellison what Mr Smith had said.  Mr Ellison advised her to ring Mr LaRose and Mr Hudson and tell them that they were not required to return to the site.  When they were asked why they were not to return to the site she advised them to come in on Monday and she would discuss it with them.  Her evidence was that she and John Brown told the two men that they would not need to return to the site because the crew was being cut down.  That was her advice also.  She said that they decided to do this to avoid animosity.  One of them subsequently telephoned her indicating that he did not believe the reasons given to him for the termination.  She was told that they had contacted somebody from Western Mining who said that their employment was terminated because of a discussion overheard on the plane.  She advised them to come in again then discuss it and they did so.  They were angry that she had not been “upfront” with them in the first place.  The real reasons for their dismissal was then explained to them.

FINDINGS AT FIRST INSTANCE

15              The Commissioner at first instance found as follows:-

(a) That he had no doubt that the process of the dismissal was flawed by its lack of initial directness and honesty.

(b) There was no suggestion of a threat or other reason which might otherwise be used to explain why Mr LaRose was initially mislead.

(c) He was finally given the correct reason only after his own enquiries had disclosed it.

16              This was a procedural flaw but only one factor to be considered in deciding the question of whether the dismissal was unfair or not.

17              The process of investigation was not flawed. 

18              Mr Ellison caused enquiries to be made as to who were the Kiam employees on the flight and whether they owed monies which might lend legitimacy to their complaints.  Having received an answer to those questions he decided to terminate their services and pay them notice in lieu.

19              Mr LaRose was not summarily dismissed.

20              Kiam has shown that there was sufficient evidence to raise an issue as to the existence or non existence of a factual issue.

21              It was not relevant that Mr LaRose had a previous offence for stealing which occurred some years ago.

22              The evidence of Mr Ellison was preferred to that of Mr LaRose by the Commissioner at first instance.  He preferred the evidence of Mr Ellison which was straightforward and unchanged under cross examination.  Mr Ellison decided that he could not trust the two employees any further and instructed that their services be terminated.

23              He found that the conversation between Mr LaRose and Mr Hudson included discussion about their intention to steal company property, and that this discussion led to a breakdown in trust between employer and employees sufficient to warrant dismissal.

24              The Commissioner at first instance then dismissed the application.

ISSUES AND CONCLUSIONS

25              The decision appealed against was a discretionary decision as that is defined in Norbis v Norbis (1986) 161 CLR 513 (see also Coal and Allied Operations Pty Ltd v AIRC (2000) 74 ALJR 1348 (HC)).

26              Further, since the Commissioner’s finding as to the credibility of witnesses was important in these proceedings, and the Commissioner had the advantage of seeing and hearing the witnesses, the well known principle in Devries and Another v Australian National Railways Commission and Another [1992-1993] 177 CLR 472 and explained in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306 (HC) applies.

27              Because the decision at first instance was a discretionary decision, it was for the appellant to establish upon this appeal that the exercise of the discretion had miscarried according to the principles laid down in House v The King [1936] 55 CLR 499 (see also Gromark Packaging v FMWU 73 WAIG 220 (IAC)).  The Full Bench has no warrant to interfere with the exercise of the discretion at first instance, unless it is established that the exercise of the discretion miscarried according to the well known principles laid down in House v The King (op cit) and Gromark Packaging v FMWU (IAC) (op cit).

28              First, the important question in this matter was whether Mr LaRose, in the hearing of Mr Ellison, had said that he was owed money by Kiam, and that to obtain that money he would steal a caddy welding machine from which, it would seem, to realise the amount of the money which he was owed.  (I should add that it was not an issue that he was an employee and not a contractor to Kiam although there was some discussion of that at one stage).

29              The Commissioner at first instance, having heard and seen the witnesses, and there being a direct conflict in the evidence of Mr Ellison and Mr LaRose on this point, preferred the evidence of Mr Ellison.  The Commissioner preferred the evidence of Mr Ellison on that point because his evidence was straightforward and unchanged in cross examination.  On a fair reading of the transcript there was nothing to suggest that that preference was not open to the Commission.  Further, that finding was not seriously challenged in submissions made upon appeal.  Further, the finding based on that preference, namely that Mr Ellison heard Mr LaRose say to Mr Hudson that he intended to steal Kiam’s property and that led to a breakdown in trust between employer and employee, was not challenged on this appeal either.

30              It was submitted that such a statement was made by Mr LaRose as a matter of bravado, that is that he did not seriously say that he intended to steal.  However, Mr LaRose did not say that in evidence and it was not so found, nor was there a basis upon which it might be so found.

31              What the Commissioner at first instance did find, and which he was also entitled to find, on the evidence, was that the process of dismissal was unsatisfactory.  It was unsatisfactory because:-

(a) It was expressed to Mr LaRose to be occurring for a reason which was false.

(b) Mr LaRose was afforded no opportunity to put his side of events.

(c) He was not told the true reason for his dismissal and he was not given an opportunity to put his side of matters until he had made his own enquiries and pressed for the reasons.

(d)          The need to avoid any likely aggravation did not justify, and could not, the course of denying procedural fairness.

(e)          The process of investigation and dismissal was manifestly flawed. 

32              However, the lack of procedural fairness was one factor only to be considered, (see Shire of Esperance v Mouritz 71 WAIG 891 (IAC) per Kennedy J).

33              In this case, given that Mr LaRose was found, and correctly found, to have been expressing a clear intention to steal from his employer for reasons which he expressed, and which were open to be taken seriously, the employer was entitled to lose trust in the honesty and fidelity of Mr LaRose, and entitled to fairly terminate the contract of employment for that reason.

34              The Commissioner at first instance was entitled to find, on the evidence, that the employer was entitled to lose that trust.  In addition, it was not denied that Mr LaRose was canvassing too with Mr Hudson, the question of putting an end to Kiam’s contract with Western Mining, in favour of another contractor.  That was some corroboration of the extent of the animosity of Mr LaRose for Kiam, and the seriousness of his expressed intention to steal the welder.  That in the past there might have been procedural unfairness was patently not relevant to the fact that there was procedural unfairness in this case in the treatment of other employees.

35              In those circumstances, the dismissal, although procedurally flawed, was not, because of the valid substantive reasons for it, unfair.  It was not a summary dismissal, although a summary dismissal in itself might have been both justified and fair.  To dismiss Mr LaRose for his expressed intention to steal from his employer was in this case not unfair for the reasons which I have mentioned.

36              As to the submission that the rule in Jones v Dunkel and Another [1958-1959] 101 CLR 298 was not applied, there was no substance in that.  There was no scope for its application at all.  There was no summary dismissal requiring the justification of the same by the employer on the evidence; and in any event, the appellant bears the onus of establishing on all of the evidence that the dismissal was unfair, according to the well known principles in Miles and Others t/a Undercliffe Nursing Home v FMWU 65 WAIG 385 (IAC).

37              It is trite to observe that it is for the applicant who alleges that he/she has been unfairly dismissed, to establish his/her case and not to rely on witnesses being called by the respondent, who might or might not establish the applicant’s case, and who are not called to do so, in any event.

38              No ground of appeal was made out.  There was no miscarriage of the exercise of the discretion, at first instance, established.  I would dismiss the appeal.

39       CHIEF COMMISSIONER: I have had the advantage of reading the Honourable President’s draft of his reasons for decision. I agree that the appeal should be dismissed.

40       In dismissing the application for unfair dismissal the Commission at first instance found that the appellant expressed an intention to steal company property. This conclusion was reached after hearing evidence from the respondent’s general manager about a conversation he overheard between the appellant and another employee. The appellant flatly denied that he had stated such an intention (Transcript p. 42).

41       The appeal was pursued on the basis that even if the conversation did occur there was insufficient investigation undertaken by the employer to justify the decision to terminate the appellant’s employment. Furthermore the conversation between the two employees even if it included the intention to steal equipment could not be relied upon to justify the respondents actions in dismissing the appellant when the respondent knew that there were outstanding issues with the appellant about safety and wages. It was submitted that an alleged claim for outstanding wages gave rise to an “honest claim of right”.

42       The fundamental issue is whether or not the appellant expressed an intention to steal from his employer. The finding of fact made in the first instance was based on the credibility of the witness. As the Hon President makes clear there was nothing before the Full Bench to show that the Commissioner had misused his advantage in concluding that the appellant expressed the intention to steal from the respondent (Devries and Another v Australian National Railways Commission and Another [1992 – 93] 177 CLR 472).

43       Faced with the unambiguous threat that the appellant intended to steal equipment it is difficult to comprehend what investigation the employer should then have been obliged to embark upon. The loss of trust engendered by the expressed intention to steal warranted dismissal. Although there were procedural flaws associated with the process by which the termination was effected, these were not fatal to the efficacy of the dismissal. They were but a factor to be considered in the circumstances of the case and were indeed assessed by the Commission in the first instance.

44       The alleged grievances held by the appellant on issues going to safety and wages could not render the intention to steal the employers equipment a reasonable objective in pursuit of an “honest claim of right” when that intention is so fundamentally a breach of the terms of the appellants contract of employment.

45       COMMISSIONER P E SCOTT:  I have had the benefit of reading the reasons for decision of His Honour, the President.  I agree that the grounds of appeal are not made out. 

46       As noted by His Honour, the Commissioner at first instance was entitled to prefer the evidence of Mr Ellison to that of the appellant, and he did so.  The appellant submitted that if he had made a statement about intending to steal, then it ought to have been seen as bravado and not taken seriously.  This was not put to the Commissioner at first instance.  On the contrary, in his evidence before the learned Commissioner, the appellant had simply denied making the statement.  On this basis the learned Commissioner was not obliged to take account of any alleged bravado on the part of the appellant in making the statement which, relying on Mr Ellison’s evidence, he found to have been made. 

47       There was no error in the learned Commissioner finding that there was a justifiable breakdown of trust in the employment relationship because of the appellant’s actions, and that this justified dismissal, a dismissal not being for misconduct. 

48       Although there were flaws in the process of dismissal, as found by the Commissioner at first instance, these flaws do not render the dismissal, otherwise justified, unfair.  Rather the issue of procedural fairness is one factor only to be considered (Shire of Esperance v Mouritz 71 WAIG 891 (IAC) Kennedy J.). 

49       As there has been no identifiable error found, I would dismiss the appeal.

THE PRESIDENT:

50       For those reasons, the appeal is dismissed.

      Order accordingly