C2014/8360, Transcript of Proceedings [2015] FWCTrans 40 (23 January 2015)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 1051291-1

JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
COMMISSIONER CARGILL

C2014/8360

s.604 - Appeal of decisions

JBS Australia Pty Ltd v Challinger
(C2014/8360)





Sydney

2.30PM, TUESDAY, 20 JANUARY 2015

Reserved for Decision

PN1

JUSTICE ROSS: Could I have the submissions please - sorry, the appearances, please?

PN2

MR B. DUGGAN: If it pleases the commission, Duggan for the appellant, initial B, in relation to this matter, and I seek permission to appear.

PN3

JUSTICE ROSS: Thank you.

PN4

MR C. BUCKLEY: If it please the commission, my name is Buckley, initial C, national industrial officer for the Australasian Meat Industry Employees Union. I appear for the respondent, Mr Challenger. I can also indicate that the respondent has no objection to leave being granted to Mr Duggan.

PN5

JUSTICE ROSS: Mr Duggan, we will grant permission on the basis of having regard to the complexity of the matter, it will be dealt with more efficiently if permission is granted. We have had the opportunity to read your outline of submissions and you don't need to take us through them, but can I take you to paragraph 20, and this seems to be the heart of the proposition you're advancing. Am I correct in saying that what you're putting here is that as a matter of general principle, in cases where there's a finding that there was a valid reason for the dismissal and relating to an employee's conduct, and in the absence of contrition then that should lead to a finding that reinstatement is not appropriate and - - -

PN6

MR DUGGAN: JBS does make that submission, your Honour.

PN7

JUSTICE ROSS: So you put that forward as a matter of principle in all cases where there's a valid reason for dismissal relating to employee conduct and there's an absence of contrition, which is the circumstance in this case - - -

PN8

MR DUGGAN: Yes.

PN9

JUSTICE ROSS: - - - then that should result in a finding that reinstatement is not appropriate.

PN10

MR DUGGAN: Yes, we do put forward that submission, your Honour.

PN11

JUSTICE ROSS: All right, and it's really that proposition which you say enlivens the public interest here because it's that proposition that arises for determination in this case, and you say - - -

PN12

MR DUGGAN: We say that - sorry, your Honour.

PN13

JUSTICE ROSS: No, no. Go on.

PN14

MR DUGGAN: Yes, we say that that issue does enliven the public interest. Your Honour, we also say that Hampton C in applying the general principles applicable to reinstatement has also fallen into error.

PN15

JUSTICE ROSS: What's the basis for that proposition?

PN16

MR DUGGAN: Your Honour, that's part of my submissions, so it might be convenient for me to commence.

PN17

JUSTICE ROSS: Certainly. Absolutely.

PN18

MR DUGGAN: Thank you, your Honour. Your Honour, just briefly, the conduct relied upon for Mr Challenger's dismissal occurred on 12 February 2014. The employer, JBS, had two concerns about Mr Challenger's conduct, which were first a failure to wear an arm guard in breach of JBS's safety requirements, and secondly an inappropriate response from Mr Challenger to being asked to put on an arm guard.

PN19

Your Honour, in relation to the evidence before the commission at arbitration, the letter of termination that was provided to the applicant, Mr Challenger, is at page 456 of the appeal book. I don't propose to take the tribunal to that at the moment, but I wanted to take the tribunal to the decision-maker's statement, Mr Schiller's statement, in particular some paragraphs that are found at 432 of the appeal book and, your Honour, briefly by way of background, the paragraphs I'm going to take the tribunal to, they are in the context of discussion as to the decision made by JBS in relation to dismissal.

PN20

So if I can take your Honours firstly to paragraph 42, which is at page 432 of the appeal book. The two issues are discussed in 42 and 43. First there is the allegation in relation to the arm guard, and secondly the response to being asked to put on the arm guard. 44 then provides some further background to the decision, in particular the comment by Mr Challenger that he admitted making to the effect that, "You're too worried about this safety shit," or words to that effect were very concerning as they demonstrated an extremely negative attitude towards safety, including the approved safety culture that JBS was trying to implement at the Bordertown plant.

PN21

There's then a reference in paragraph 45 to concerns about the conduct amounting to personal attacks, abuse and offensive behaviour. 46 raises this issue in relation to remorse or apology in relation to the comments, and 47, which is a matter relied upon in the decision of Hampton C, refers to Mr Challenger's involvement in the incident, including making the above comments, was part of a course of conduct which was designed to create a culture of uncooperative noncompliance and discontent amongst employees of JBS. So, your Honour, with that background, I'm going to now discuss the decision on the merits as well as the decision as to remedy in relation to - - -

PN22

JUSTICE ROSS: There's no appeal in relation to the decision on the merits, is there?

PN23

MR DUGGAN: No, there's not, your Honour.

PN24

JUSTICE ROSS: Right.

PN25

MR DUGGAN: But it's relevant to the background in relation to the approach taken in relation to the decision with respect to remedy. So I'm only going to briefly touch upon the decision as to the merits. As your Honours would be aware, that decision was handed down on 30 September 2014. Hampton C in that decision made findings as to JBS's two concerns about Mr Challenger's conduct which resulted in his dismissal.

PN26

First, a finding was made by Hampton C that he was not satisfied that Mr Challenger was instructed, that is by JBS, that he had to wear an arm guard when undertaking the particular work being performed by him on 12 February 2014. That's at paragraph 53 of his decision, which is at page 14 of the appeal book. Secondly, findings were made by Hampton C about Mr Challenger's response to the request that he wear an arm guard, and that's contained at paragraph 58, which is at page 15 of the appeal book.

PN27

The Commissioner went on to find that the nature of Mr Challenger's response was unwarranted, abusive and personal. That's at paragraph 78, which is contained at page 18 of the appeal book. The Commissioner went on to say that the implications of the comments made by Mr Challenger during 12 February 2014 in the context of certain previous conduct are not appropriate in terms of promoting safety within the workplace more generally. That's at paragraph 79, again at page 18 of the appeal book.

PN28

A finding was made that JBS had a valid reason for its decision to dismiss Mr Challenger. A finding was nevertheless made by Hampton C that JBS's dismissal of Mr Challenger was harsh within the meaning of the Act, and that's at paragraph 99, page 20, of the appeal book. JBS submits that the primary reason why Hampton C appears to have come to that conclusion is the impact of the dismissal upon Mr Challinger which is referred to at page 19 of the appeal book.

PN29

Your Honours, turning now - there was a separate decision in relation to remedy. Turning now to that decision, that decision commences at page 24 of the appeal book. In the decision Hampton C identifies the principles applicable to a consideration of whether reinstatement is appropriate and that's contained at page 34 of the appeal book. Your Honours will note in that that there's further consideration on page 35 and 36 of the appeal books, during the course of which Hampton C refers to a decision such as Australian Meat Holdings, Perkins v Grace Worldwide. Also more recent decisions such as Colson v Barwon Health and Nguyen and Anor v Vietnamese Community in Australia.

PN30

The interpretation by Hampton C of the principles appears to emphasise the rationality of the basis of the employer's concerns and that can be found by reference to paragraph 43 of his reasons which is contained at the top of page 36 of the appeal book. Your Honours will note that in his consideration of this topic that there's no explicit reference to whether or not the commission has found a valid reason to exist in the identification of these principles. The issue was not relevant in decisions such as Australian Meat Holdings and McLauchlan and Perkins v Grace Worldwide as there was no finding in those cases that there was a valid reason for dismissal. In apply the principles applicable to reinstatement, Hampton C considered the rationality of JBS's decision to dismiss Mr Challinger.

PN31

The Commissioner in doing so appears to have focused on whether there were allegations which were not made out by JBS. The first of JBS's concerns relating to the requirement to wear an arm guard for the particular tasks being performed by Mr Challinger on 12 February was not made out on the evidence. Hampton C discussed this first concern in detail in his consideration of whether reinstatement was appropriate. The second of JBS's concerns is briefly referred to in the discussion about the first of JBS's concerns at paragraph 47 which is contained at page 37 of the appeal book. I might just take your Honours to that sentence which discussed that issue. It's the last sentence of paragraph 45 which simply says:

PN32

It was the manner and language associated - - -

PN33

JUSTICE ROSS: 47? Paragraph 47?

PN34

MR DUGGAN: 47, yes, your Honour. It's the last sentence at paragraph 47, your Honour, at page 37 of the appeal book, which says:

PN35

It was the manner and language associated with how he went about that which created the valid reason for dismissal, however, he did not deliberately ignore a safety direction.

PN36

Which is the first of the concerns. However, the second of JBS's concerns which was critical to the finding that there was a valid reason does not appear to have been considered by Hampton C in his consideration as to whether reinstatement was appropriate.

PN37

JUSTICE ROSS: What was that?

PN38

MR DUGGAN: The second of the concerns was the response to the request to put on the arm guard.

PN39

JUSTICE ROSS: Isn't that considered in the last sentence in paragraph 47?

PN40

MR DUGGAN: Your Honours, what we'd say about that is that that is a passing reference to the second of those concerns which is merely discussed in the context of discussing the first concern. It's not a natural consideration of the second concern, being the concern in relation his response to the request to wear an arm guard.

PN41

VICE PRESIDENT HATCHER: Isn't what the Commissioner doing is analyse the evidence of Mr Schiller as to why there should not be reinstatement? In 45 he identifies that evidence was confined to the first basis of dismissal, that is, the purported direction, and then the Commissioner says, "Well, in effect, I don't place too much weight upon that because I found that there was no direction." That's the way he's dealt with it, isn't it?

PN42

MR DUGGAN: Your Honours, I was going to take your Honours to that issue, because that's the second part of my submissions in relation to where Hampton C has fallen into error in relation to the evidence, that that's a significant error such that it enlivens the public interest. But if I can just finish my submissions in relation to this issue that we're on at the moment. JBS's submission is that the Commissioner fell into error in not considering whether there was a valid reason relating to Mr Challinger's conduct in the consideration as to whether it was appropriate to reinstatement, and it's in the public interest to have this error rectified on appeal.

PN43

In relation to the consideration of evidence relied upon by Hampton C, the evidence referred to by Hampton C is that of the plant manager, as your Honour has just identified, Mr Schiller, and that is contained at paragraph 45 on page 36 and also over the page, page 37 of the appeal book. Your Honour, our submission is that this is only an extract of Mr Schiller's evidence which does not accurately reflect the whole of his evidence. The focus is again on the first of JBS's concerns, that being the failure to follow the safety direction rather than a consideration of both of the company's concerns which led to the decision to dismiss Mr Challinger - - -

PN44

JUSTICE ROSS: Okay. Which part of his evidence wasn't covered?

PN45

MR DUGGAN: Your Honour, Mr Schiller's witness statement commences at page 428 of the appeal book. I have already taken your Honours to part of the discussion in relation to the decision, in particular, his rationale behind the decision to dismiss Mr Challinger - - -

PN46

JUSTICE ROSS: Yes, but where's the bit going to the trust and confidence based on the second limb?

PN47

MR DUGGAN: Yes, your Honour. That commences at page 431. That is in relation to the decision. It concludes at 432 and then page 433 of the appeal book deals with the issue of reinstatement. Now, what Mr Schiller says in his written statement at paragraph 54 is that he refers to:

PN48

Not being comfortable about Mr Challinger coming back to work at JBS for the reasons discussed above.

PN49

Your Honour, JBS's submission is that that includes the aspect of his statement regarding the decision which is in the earlier two pages. Your Honour, that deals with the two issues of concern that led to the decision made by JBS, that is, the first concern being whether or not there was a failure to comply with the instruction to wear the arm guard, and secondly the response to that request to wear the arm guard.

PN50

VICE PRESIDENT HATCHER: Being not comfortable is a long way short of a loss of trust and confidence, isn't it.

PN51

JUSTICE ROSS: The only point he mentions confidence and a loss of confidence is at 55 in relation to whether he would follow directions which is clearly a reference to the first of JBS's concerns.

PN52

MR DUGGAN: Your Honour, that could potentially be broader than that because there's a reference in the important area of safety and there was an earlier memorandum of understanding that was entered into between JBS and the union in relation to future conduct quite a bit earlier, it took place in 2012. So, your Honour, it would be incorrect, in our submission, to confine that to simply the issue of whether or not he was not wearing - - -

PN53

JUSTICE ROSS: No, sure. But it's plainly not directed at the second of the concerns.

PN54

MR DUGGAN: Your Honour, the memorandum of understanding dealt with future conduct at work and, in particular - - -

PN55

JUSTICE ROSS: No. What you're putting is that the Commissioner didn't have regard to evidence put going to the second of JBS's concerns as providing a basis for the loss of trust and confidence which is asserted by Mr Schiller. My point to you is that paragraph 55 does not go to the second of those concerns.

PN56

MR DUGGAN: Your Honour, it may well be that paragraph 55 doesn't, but our submission would be that paragraph 54 does.

PN57

JUSTICE ROSS: All that says is, "I'm not comfortable about him coming back to work."

PN58

MR DUGGAN: "For the reasons discussed above," which is - - -

PN59

JUSTICE ROSS: Okay. But so what? It doesn't say, "I have a loss of confidence in him," or, "I'm not able to work with him," or anything of that nature. "I'm not comfortable."

PN60

MR DUGGAN: I accept that that's what it says, but as I submitted, it also refers to the decision-making process itself which included consideration of the conduct and other issues.

PN61

JUSTICE ROSS: All right. Is there anything else you wish to say?

PN62

MR DUGGAN: Your Honour, only in relation to the need for more specific guidance regarding remedy. The earlier decisions considered by Hampton C are relevant to the general principles regarding reinstatement as a remedy. JBS submits that it's also necessary for there to be more specific principles which apply to the consideration of reinstatement in the particular circumstance where there is a valid reason relating to an employee's conduct for the dismissal by an employer (indistinct) of the establishment - - -

PN63

JUSTICE ROSS: Yes. You say there's a need for more specific guidance and you say the principle that ought to be adopted is the one that you articulate, that is, if there's a valid reason for termination based on conduct and no contrition, then reinstatement should not be ordered.

PN64

MR DUGGAN: Yes, your Honour. No contrition relating to that conduct which is the basis of the finding for a valid reason for termination.

PN65

VICE PRESIDENT HATCHER: Isn't the real issue whether there's going to be a repetition of the conduct if they're reinstated and contrition is just one way in which you might be satisfied that the conduct might not be repeated?

PN66

MR DUGGAN: Well, your Honour, in the absence of contrition it would be JBS's submission that there's not an acknowledgment of any wrongdoing or that the behaviour needs to be different in the future. Your Honour, in relation to this particular topic, there was a recent decision handed down of Ronald Anderson v Thiess Pty Ltd and, your Honours, we would submit that that is a recent example of a case which found both about a reason for dismissal and a lack of contrition which was sound to militate against reinstatement in that particular case. It was - - -

PN67

VICE PRESIDENT HATCHER: I think that is under appeal.

PN68

MR DUGGAN: - - - if I can refer you to paragraph 81 which is contained at page 16 of that decision.

PN69

JUSTICE ROSS: That decision is under appeal at the moment. Are you aware of that?

PN70

MR DUGGAN: Your Honour, I wasn't aware that it's under appeal. I haven't seen an appeal decision.

PN71

JUSTICE ROSS: No, it hasn't been handed down, it was heard last week.

PN72

MR DUGGAN: Thank you. Your Honours, that decision of Anderson is consistent with the submission being made by JBS in relation to the general principle. We can see that the case doesn't go as far as what JBS is submitting but certainly, as your Honours will read that decision, it's quite clear that a significant consideration by the member who dealt with that matter was this issue of there being a valid reason for dismissal in the context of consideration of whether or not reinstatement was appropriate and also the lack of contrition.

PN73

VICE PRESIDENT HATCHER: In that case in that case not only was there a lack of contrition, the applicant for a remedy firmly defended his conduct. Is there anything equivalent of that nature in this case?

PN74

MR DUGGAN: Well, your Honour, in this particular case there wasn't much in dispute in the finish about conduct. JBS would submit in that case that it was open for Mr Challinger to apologise in respect of his conduct either during the disciplinary process which was extensive, or after the termination during the course of the arbitration, but that did not occur. Your Honours, it's submitted by JBS that it is in the public interest for the full bench of the commission to provide guidance on this issue of general application which it is submitted is of importance.

PN75

JUSTICE ROSS: Yes, all right. Thanks, Mr Duggan. Is there anything else?

PN76

MR DUGGAN: No, your Honour.

PN77

JUSTICE ROSS: Right. Mr Buckley.

PN78

MR BUCKLEY: Your Honours, is it more convenient for the commission if I remain seated - - -

PN79

JUSTICE ROSS: Yes, it is. Thank you.

PN80

MR BUCKLEY: - - - while giving my submissions.

PN81

JUSTICE ROSS: Yes, thanks.

PN82

MR BUCKLEY: Thank you. Have your Honours received an outline of submissions that I prepared on behalf of the respondent? They would have been emailed to your chambers only this morning.

PN83

JUSTICE ROSS: Yes, we have.

PN84

MR BUCKLEY: Have your Honours had an opportunity to read that, or not yet?

PN85

JUSTICE ROSS: Yes, we have.

PN86

MR BUCKLEY: Very well. I'll try and avoid simply repeating those, but to address the various grounds that have been raised by the appellant, the first, of course, relates to error into which the Commissioner is said to have fallen in failing to take into account relevant considerations. The relevant considerations seem to be the conduct that Mr Challinger was found to have engaged in when told to put on his arm guard. In the appellant's submission the Commissioner's decision does not contain any such error and, in fact, he expressly - well, perhaps before we go to that, if we turn to the decision in question.

PN87

The relevant passages start at page 34 of the appeal book. That is where the Commissioner begins his consideration of the evidence. He sets out in paragraphs 39 through to 44 the relevant authorities and principles that have been applied in examining the question of reinstatement and, in particular, the relevance of trust or confidence. So the Commissioner was clearly familiar with the importance of the issue and also the appropriateness of considering it in the circumstances of this case.

PN88

In paragraph 45 he states that the only substantive evidence directly touching upon trust and confidence was that given by Mr Schiller. That statement is a correct statement as far as it goes, it was the only evidence - he was the only witness who dealt with the issue of trust and confidence or voiced an opinion as to whether or not Mr Challinger should be reinstated. That has been already referred to by the appellant in their submissions. That, of course, appears at paragraphs 53 to 57 of this statement which are page 433 of the appeal book.

PN89

In paragraph 46 the Commissioner again noticed that there was little evidence from the other managers and supervisors who would more directly need to supervise and manage him is he was reinstated. The next sentence of that paragraph, your Honours, in my submission is significant because the Commissioner then goes on to say:

PN90

This does not mean their evidence and concerns about the conduct of Mr Challinger in the events leading to the decision are irrelevant, or that some reasonable inferences cannot be drawn from the actual conduct itself.

PN91

So in that paragraph the Commissioner acknowledges the relevance of the actual conduct of Mr Challinger as the Commissioner found it to be, that is, as distinct from the conduct that the employer believed him to have committed was relevant to the question of reinstatement and its effect upon trust and confidence. Again, at paragraph 47 he points out, again correctly, that the directive going to loss of trust and confidence was based on an incorrect understanding of Mr Challinger's conduct and again at paragraph 48 the Commissioner lists some considerations and factors that he takes into account in assessing trust and confidence including significantly the absence of apparent contrition on the part of Mr Challinger and indeed his previous work history and prior conduct.

PN92

In my submission, the Commissioner has clearly acknowledged the relevance of the various considerations that the appellant says that the Commissioner failed to consider, the error - in my submission, the Commissioner has not made the error that the appellant contends. In terms of just to be clear about the limits of Mr Schiller's evidence that went to the trust and confidence and his attitude towards Mr Challinger's reinstatement, I have referred to page 433 of the appeal book which are the relevant paragraphs in his witness statement.

PN93

Mr Schiller's evidence-in-chief was brief and it was confined to identifying and tendering his statement and its attachments. His evidence-in-chief is at paragraphs 2133 to 2142 which is in volume 1 of the appeal book, pages 222 and 223. So there's no additional evidence adduced about the issue of trust and confidence. He was cross-examined about the relevant passages in his statement at paragraphs 2374 to 2377 of the transcript and that's at page 243 of the appeal book, but the entirety of that cross-examination is set out in the Commissioner's decision in paragraph 45.

PN94

Mr Schiller was not re-examined on that point at all. Most of the re-examination dealt with the issue of whether Mr Schiller had provided details of various allegations to Mr Challinger about whether or not he had been engaged in a calculated effort to try and undermine employee cooperation at the plant, but there was no re-examination touching on the issue of the reasons he had for opposing Mr Challinger's reinstatement.

PN95

Turning briefly to the question of whether or not there is some broader or general principle at stake, the respondent submits that the decision whether or not an employee should be read the remedy of reinstatement is a discretionary decision. We say the appellant has failed to identify any error in the exercise of that discretion in the sense that that's used in the case of House v the King. The principles applicable to that discretion are well understood and the application of those principles depends very much on the facts of the case.

PN96

In our submission there's nothing particularly special or of general application that arises out of the facts and circumstances of this case. The appellant is really complaining that the Commissioner, in weighing the relevant considerations, arrived at a different conclusion from the one that they urged upon him at the hearing.

PN97

The only other matter I might raise is that in the decision of the Commissioner, at paragraph 50 of the Commissioner's decision in relation to the notion that there should be some general principle, a set formula of circumstances must be present in order for reinstatement to be ordered, in my submission, imposes a rigidity upon the application of the proposed principles that is inconsistent with the prior decisions of the commission in the sense that the power to order reinstatement or not is a broad discretion to which a wide range of factors are relevant and that questions such as the issue of contrition or an employee's apology or his conduct is only one of those matters.

PN98

It was raised with Mr Duggan during his submissions that contrition is indeed only one manner by which future conduct on the part of an employee might be avoided. The Commissioner certainly turned his mind, in my submission, to that issue, and that's at paragraph 50 of his decision which starts at page 37 and continues on page 38 of the appeal book.

PN99

The respondent submitted at the hearing that it would be open to the Commissioner to reinstate Mr Challinger on the basis that it be done so on the condition that he receive a final warning in relation to his conduct. The Commissioner at paragraph 50 was uncertain as to whether or not he had the power to order or make the order conditional in the manner described, but nevertheless he indicated that the employer would be entitled upon Mr Challinger's return to work to issue such a warning and that he would expect in the ordinary course of events that it would occur.

PN100

In my submission, that indicates that the Commissioner both was alert to the significance of Mr Challinger's conduct, the actual conduct that he was found to have committed in relation to the question of reinstatement and he also specifically considered the issue of the need or ways in which Mr Challinger's conduct could be mediated and regulated in the future. Unless the commission has further questions, those are my submissions.

PN101

JUSTICE ROSS: Thanks, Mr Buckley. Mr Duggan, anything in reply?

PN102

MR DUGGAN: No, your Honour.

PN103

JUSTICE ROSS: Thank you very much for your submissions. We'll adjourn and reserve our decision.

<ADJOURNED INDEFINITELY [3.12PM]