[2010] FWAFB 3258 |
FAIR WORK AUSTRALIA |
DECISION |
Workplace Relations Act 1996
s.120 - Appeal to Full Bench
SENIOR DEPUTY PRESIDENT ACTON |
MELBOURNE, 3 MAY 2010 |
Appeal against decision [2009] AIRC 893 of Commissioner Deegan at Launceston on 16 October 2009 in matter number U2009/3099.
Introduction
[1] This matter concerns an appeal, for which leave is required, by Mr Nick Kolodjashnij against a decision 1 of Commissioner Deegan of 16 October 2009 in which the Commissioner concluded that in the circumstances she could not find the termination of Mr Kolodjashnij’s employment by J Boag and Son Brewing Pty Ltd (Boag) was harsh, unjust or unreasonable.
Background
[2] The background to the termination of the employment of Mr Kolodjashnij by Boag is set out in the decision of the Commissioner as follows:
“[5] On Friday 27 March 2009, in the evening the applicant, who was a process worker in the packaging department at the James Boags Brewery (a division of Lion Nathan Pty Ltd), was charged with driving his vehicle with a blood alcohol content of 0.154.
[6] On his return to work on 30 March 2009 the applicant advised his supervisor of the incident. On the same day, after an initial meeting with representatives of management, the applicant was stood down on full pay. Two further meetings with management, at which the applicant was accompanied by a union representative, were held over the ensuing three days. On 2 April 2009, by letter from the respondent, the applicant’s employment was terminated.”
Commissioner’s decision
[3] In determining whether the termination of Mr Kolodjashnij’s employment by Boag was harsh, unjust or unreasonable the Commissioner considered the matters in s.652(3) of the Workplace Relations Act 1996 (Cth) (the WR Act). Section 652(3) of the WR Act is as follows:
“(3) In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
(a) whether there was a valid reason for the termination related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee — whether the employee had been warned about that unsatisfactory performance before the termination; and
(e) the degree to which the size of the employer’s undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(f) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(g) any other matters that the Commission considers relevant.”
[4] In respect of whether there was a valid reason for the termination, the Commissioner said:
“[49] The question to be determined is whether a breach by the applicant of the employer’s responsible drinking policy constituted a valid reason for the termination of the applicant’s employment.
[50] It was put for the applicant that the policy was unreasonable as it purported to control the applicant’s conduct outside of working hours in circumstances where no harm was caused to the employer by that conduct. The employer’s position was that the policy was adopted to safeguard the employer’s interests in the promotion of “sociable drinking” and to protect the employer’s reputation as a proponent of responsible drinking.
[51] There is no doubt that the applicant was aware of the employer’s responsible drinking policy. The policy was clear that drinking to excess and driving outside of work hours, even on personal business and in a private car, would be a breach of that policy. That the applicant was aware of the full extent of the policy can be deduced from his behaviour in bringing his transgression to the attention of his supervisor. The evidence of Ms Cashion supports a conclusion that the applicant was fully aware of the seriousness attached to any breach of the policy.
[52] An employer is entitled to have policies designed to protect the interests of the business and a legitimate interest in ensuring that such policies are observed by the workforce. There would be little point in having policies that were not enforced. While not every policy adopted by an employer will necessarily be found to be reasonable, particularly in circumstances where that policy purports to constrain the activities of employees outside working hours, some such policies will have the necessary connection to the workplace to be upheld. Where the employer can make out a legitimate interest in the conduct of its employees outside work hours, a policy aimed at regulating that conduct and protecting the employer’s legitimate interests will generally be found to be reasonable. A policy aimed at restraining employees from committing criminal offences outside work hours may not always be seen to be something that is a legitimate interest of the employer. A policy directed at restraining employees from engaging in criminal conduct which could have a deleterious impact on the employer’s legitimate business interests has a sufficient nexus with the employment to be a reasonable imposition on an employee.
[53] A manufacturer of weapons or fireworks would have a legitimate interest in ensuring that its employees did not use its products in a manner which was contrary to law, might bring the product into disrepute or could contribute to the case for greater restriction on sales or even complete prohibition of the product. In my view the same applies to a manufacturer of alcohol.
[54] Not every breach of a policy will provide a valid reason for termination of employment. However in circumstances where the policy is both lawful and reasonable and an employer has stressed the importance of the particular policy to the business and made it clear to employees that any breach is likely to result in termination of employment, then an employee who knowingly breaches that policy will have difficulty making out an argument that there is no valid reason for the termination.
[55] I do not accept that it is necessary for the respondent to show that the applicant’s conduct caused actual harm to the respondent’s interests. The Full Bench in Farquharson considered the principles concerning out of hours conduct formulated by Ross VP in Rose v Telstra and then stated:
‘First, while summaries of this sort are useful they are no substitute for the statutory test, namely whether there was a “valid reason” in the sense of a reason that is “sound, defensible or well-founded”. Conduct which gives rise to a material risk of damage to an employer’s interests, even if there is no actual damage in the particular case, may nevertheless be conduct that attracts the legitimate concern of the employer and may thus, depending on the circumstances, constitute conduct that provides a “valid reason” for termination of employment. Whether such a termination is nevertheless harsh, unjust or unreasonable, notwithstanding the existence of such a “valid reason”, will remain to be determined in all the circumstances.’”
[5] The Commissioner was satisfied Mr Kolodjashnij was notified of the valid reason for the termination of his employment and given an opportunity to respond. She was also satisfied the termination did not relate to any unsatisfactory performance by Mr Kolodjashnij. She said:
“[58] The applicant’s termination was in no way related to any unsatisfactory performance on his part. It was common ground that the applicant had a good work record. The decision to terminate his employment was based solely on his drink driving conduct”
[6] Further, she was satisfied the size of the employer and the extent of its human resource management specialists or expertise did not detrimentally impact on the procedures followed in effecting the termination.
[7] With respect to other relevant matters, the Commissioner said:
“[60] While matters such as the applicant’s age, skill level and the difficulty of finding alternative employment were put to me as having a bearing on the harshness of the termination of his employment no evidence was called in this regard. The applicant is not yet 50, has a stable employment record and experience in packaging. In the absence of any evidence I am not prepared to accept that the applicant’s personal and economic position rendered the termination of his employment harsh.”
[8] The Commissioner concluded as follows:
“[61] I am satisfied that the respondent’s responsible drinking policy was lawful, reasonable and formulated so as to protect the respondent’s legitimate business interests. The applicant was aware that the policy extended to prohibit employees from drink driving including out of work hours and in non-work vehicles. He was also aware that the respondent would consider any breach of that part of the responsible drinking policy a serious breach which could lead to the termination of his employment. Despite this awareness the applicant proceeded to drive while he had a blood alcohol reading of .154. He was apprehended and charged with an offence. I am satisfied, in all the circumstances, that there was a valid reason for the termination of the applicant’s employment.
[62] When the company was made aware of the breach of the policy the applicant was afforded procedural fairness and given a number of opportunities to put forward matters in mitigation. These factors were given due consideration by the respondent but it was determined that the breach was a serious one which was not sufficiently mitigated by the applicant’s otherwise good employment record over some eight years.
[63] In all these circumstances I do not find that the termination of the applicant’s employment was harsh unjust or unreasonable.”
Grounds of appeal
[9] The ground of appeal advanced by the appellant at the hearing of the appeal was that the Commissioner erred in failing to conclude the termination of Mr Kolodjashnij’s employment by Boag was harsh, unjust or unreasonable in that she failed to consider a matter put to her at first instance which was that the termination was harsh in that it was a disproportionate response by the employer to the circumstances constituting the valid reason for the termination.
[10] In this regard the appellant referred to the Full Bench decision in Selak v Woolworths Limited. 2 In Selak’s case, a Full Bench of the Australian Industrial Relations Commission (the Commission) stated:
“[17] Although proportionality is not expressly identified as a consideration to which the Commission must have regard, the issue will often arise in a consideration of these factors and the overall consideration of whether the termination was ‘harsh’. As stated by McHugh and Gummow JJ of the High Court in Byrne v Australian Airlines Ltd (1995) 185 CLR 410; 61 IR 32, a termination, although founded upon a valid reason, may nevertheless be found to be harsh ‘because it is disproportionate to the gravity of the misconduct in respect of which the employer acted’.
[18] It is well established that s 652 directs the manner in which the Commission is to exercise a discretionary power, and it is imperative that the Commission exercise that power in accordance with those provisions. A conclusion must be drawn after analysis of those provisions to which the Commission must have regard and be considered as matters of significance in the decision making process. As the Act does not specify the relative weight to be given to certain provisions, the weight to be given to factors will generally be at the decision-maker’s discretion. It is not practical for decisions at first instance to be accompanied by a catalogue of the entire range of matters considered, but the reasoning of discretionary evaluation must nevertheless be adequate. A finding that the misconduct occurred is required in cases where it forms a reason for termination.
[19] In our view the conclusion on this ground of appeal depends on whether the Commissioner considered the question of proportionality in the exercise of his discretion. If he did then the ground of appeal must fail. If he did not, then he failed to consider a relevant consideration and the discretion vested in him miscarried. In a case such as the present, the question whether the sanction of termination was a proportionate response to the conduct of the employee is necessarily involved in the consideration of whether the dismissal was harsh. The attribution of weight to a consideration in the exercise of a broad discretion will only amount to error where it is established that the overall decision was unreasonable or plainly unjust. Such an argument is encompassed within the third ground of appeal. It should be noted that here, neither the existence of the discretion, nor the facts upon which it was exercised, was in dispute between the parties. Where conflicts in evidence existed, cautious findings were made including the appellant’s knowledge of the contractual term and the Company’s zero-tolerance policy.
[20] A finding that misconduct occurred was made by the Commissioner on the evidence before him in concluding that a valid reason for the termination exists. The significance of this breach was then examined in all the circumstances to determine whether the sanction was ‘harsh’. Regard was had to factors such as the appellant’s seniority, the public position at the Company and the involvement of a subordinate in the breach. These findings preceded his conclusion at [34] that the misconduct was ‘serious’ as it constituted a breach of an express term and lawful direction in the appellant’s written contract. It was this characterisation that the Commissioner essentially relied upon in determining that the sanction was not harsh because it was not disproportionate to the misconduct.
[21] For these reasons it cannot be said that the Commissioner failed to consider whether termination was disproportionate to the seriousness of the misconduct. The first ground of appeal must fail.” (Endnotes omitted)
[11] In opposing the appeal Boag submitted:
“40. The Commissioner in considering whether the termination of the applicant’s employment harsh etc:
(a) recognised and had regard for:
(i) the fact that the applicant had a good work record (Decision [58]);
(ii) the age, employment record and skill levels (his experience in packaging) (Decision [60]);
(b) weighed in the balance:
(i) the lawfulness and reasonableness of the policy formulated to protect the legitimate business interests of the respondent (Decision [61]);
(ii) the applicant’s awareness of the Policy (Decision [61]);
(iii) the applicant’s awareness of the consequences for breaching the Policy (Decision [61]);
(iv) the conduct of the applicant despite the awareness referred to above (Decision [21]);
(c) noted that the mitigating factors raised by the appellant were taken into account by the respondent but the respondent “determined that the breach was a serious one which was not sufficiently mitigated by the applicant’s otherwise good employment record over some eight years.” – and accepted that reasoning and outcome (Decision [62]).
41. The Commissioner therefore considered the question of proportionality in the exercise of her discretion. Having done so, the Commissioner concluded that in all the relevant circumstances the termination of the applicant’s employment was not harsh, unjust or unreasonable.
42. Accordingly, the argument that the Commissioner did not have regard to the issue of whether the dismissal was disproportionate to the misconduct should be rejected.” 3
Consideration
[12] We think it is apparent from the Commissioner’s decision that she was aware of the issue of proportionality. She refers to it in her summary of the submissions of Mr Kolodjashnij and Boag. 4 Further, in our view, a fair reading of the Commissioner’s decision indicates she considered the issue of proportionality when considering the matters in s.652(3) of the WR Act.
[13] For example, in paragraph 61 of her decision the Commissioner refers to the specific high blood alcohol level that Mr Kolodjashnij had while driving out of work hours in a non-work vehicle and to the fact Mr Kolodjashnij was apprehended and charged with an offence in regard to that driving. The Commissioner did not need these facts to establish there was a valid reason for the termination of Mr Kolodjashnij’s employment by Boag. However, they are facts weighing against a conclusion that Boag’s termination of Mr Kolodjashnij’s employment was a disproportionate response to his breach of Boag’s “Responsible Drinking Policy” by driving a non-work car outside of work hours whilst being above the legal blood alcohol limit.
[14] In all the circumstances, however, the Commissioner could not find the termination of Mr Kolodjashnij’s employment by Boag was harsh, unjust or unreasonable.
[15] Accordingly, we do not think it can be said the Commissioner failed to consider the issue of proportionality and, therefore, made an appealable error in concluding she could not find the termination of the employment of Mr Kolodjashnij by Boag was harsh, unjust or unreasonable.
[16] In his notice of appeal, Mr Kolodjashnij also raised as grounds of appeal that the Commissioner failed to pay proper regard to his exemplary past conduct and length of service and to the established principles regarding the extent to which and the circumstances in which an employee’s out of hours conduct may be used to support a termination of employment. These additional grounds were not pressed at the hearing of the appeal and we think properly so. The good work record of Mr Kolodjashnij and his stable employment record were appropriately referred to by the Commissioner when considering the matters in s.652(3) of the WR Act and the Commissioner clearly had regard to and applied the principles in case law regarding out of hours conduct and termination of employment.
[17] We are not persuaded there are any public interest grounds for granting leave to appeal.
Conclusion
[18] In the circumstances, therefore, we refuse leave to appeal and dismiss the appeal.
SENIOR DEPUTY PRESIDENT
Appearances:
Mr J. Nolan, counsel for the Mr Nick Kolodjashnij.
Mr H. Dixon, senior counsel and Mr R. Dalton, counsel for J Boag and Son Brewing Pty Ltd.
Hearing details:
2010.
Melbourne.
February 19.
1 Kolodjashnij v J Boag and Son Brewing Pty Ltd, [2009] AIRC 893.
3 Appeal exhibit R1.
4 Kolodjashnij v J Boag and Son Brewing Pty Ltd, [2009] AIRC 893 at paragraphs 31 and 32.
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