Elizabeth Mary Magree v Glaxo Wellcome Australia Pty Ltd [1997] FCA 699 (25 July 1997)

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION -

VALID REASON - whether unauthorised removal of drugs from workplace - whether full and proper investigation - whether applicant given OPPORTUNITY TO RESPOND to allegations of unauthorised removal and consumption of drugs - REMEDY - whether REINSTATEMENT impracticable subsequent to other drug related offences - COMPENSATION - consideration of the time between the date of termination and the pleas of other drug offences - DAMAGES - failure to accord NOTICE of TERMINATION to the applicant -

Workplace Relations Act 1996 ss170DB, 170DC, 170DE, 170EA, 170EE

Bi-Lo v Hooper (1992) 53 IR 224

E v Burwood Resort Management Limited (1996) 70 IR 122

Perkins v Grace Worldwide Aust. Pty Ltd (unreported, IRCA, Moore J, 4 September 1996)

Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370

Sangwin v Imogen Pty Ltd (unreported, IRCA, von Doussa J, 8March 1996)

Wyndham lodge Nursing Home v Reader (No. 2) (1996) 65 IR 253

MAGREE & NUW -V- GLAXO WELLCOME AUSTRALIA PTY LTD

VI 1359 of 1997

PARKINSON JR

MELBOURNE

25 JULY 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) VI 1359 of 1997

)

GENERAL DIVISION )

B E T W E E N: Elizabeth Mary MAGREE

Applicant

AND: NATIONAL UNION OF WORKERS

Applicant

AND: GLAXO WELLCOME AUSTRALIA PTY LTD

Respondent

JUDICIAL REGISTRAR : PARKINSON

PLACE : MELBOURNE

DATED : 25 JULY 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. Pursuant to Section 170EE(3) of the Workplace Relations Act, 1996, the respondent pay to the applicant compensation in the sum of $4,974.00.

2. Pursuant to Section 170EE(5) of the Workplace Relations Act, 1996, the respondent pay to the applicant damages in the sum of $2208.00.

3. The time for compliance with Orders 1 and 2 herein is 14 days.

NOTE: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) VI 1359 of 1997

)

GENERAL DIVISION )

B E T W E E N: Elizabeth Mary MAGREE

Applicant

AND: NATIONAL UNION OF WORKERS

Applicant

AND: GLAXO WELLCOME AUSTRALIA PTY LTD

Respondent

JUDICIAL REGISTRAR : PARKINSON

PLACE : MELBOURNE

DATED : 25 JULY 1997

REASONS FOR JUDGMENT

This is an application made pursuant to Section 170EA of the Workplace Relations Act 1996. (`the Act') The applicant was employed by the respondent at its drug production and packaging facility at Boronia in Victoria. The applicant's employment was terminated by the respondent on 7 December, 1996, as a consequence of allegations that she was involved in the removal of drugs from the respondent's premises and the consumption of those drugs on her domestic premises on one occasion, some time in August to November, 1995. The drugs concerned were known as Kapanol, a morphine based pain relief drug, and Zantac, a drug used for the management of gastric conditions. The respondent was advised of such allegations as a consequence of a telephone call from a person whose identity was not made known to the Court or to the applicant.

The evidence was that on about 8 November, 1996, as a result of information from the respondent, various premises of employees were searched by the Victoria Police. The applicant's premises were searched and no property of the respondent was found upon the premises. On 31 October, 1996, in the course of an interview with police, one of the employees, Ms Currie, advised the police, and subsequently the respondent, that she had been given the prohibited substance at the applicant's house. The evidence of Mr Lansley and Ms Harrison of the respondent was that Ms Currie informed them that the applicant had supplied the drug to her at the applicant's premises.

Ms Currie's evidence in these proceedings was that she had consumed the drug at the applicant's premises. She did not give evidence as to the supply by the applicant. Nor does the police hand up brief identify that Ms Currie made such an allegation against the applicant. The statement made by Ms Currie was that she was supplied with the drugs at the applicant's house, not that the applicant had supplied the drugs, to her, nor that the applicant had removed the drugs from the respondent's premises. Whilst the respondent records that it was advised by the police that Ms Currie had identified the applicant as the person who had supplied the drug, this matter is not alleged elsewhere by any other statement, nor was it the evidence of Ms Currie in these proceedings. The police hand up brief did not contain a record of Ms Currie making such an allegation against the applicant and further the applicant denied any involvement in the removal of the product from the respondent's premises or its supply to other persons. She also denied having observed the consumption of the drugs at her premises. Ms Currie's evidence in these proceedings was not to the effect that she saw the applicant using the drug, nor that the applicant observed any other person using the drug.

The respondent in its own management recommendations stated:

(Exhibit R3)

" the case for dismissing Liz ( the applicant) based upon evidence alone is not as strong as for Kelly and Sue however considering other factors stated earlier it is felt that to have Liz return to work potentially creates a bigger problem in terms of product security."

There is no evidence in these proceedings to support a finding, on balance of probabilities, that the applicant was either involved in the removal of drugs from the respondent's premises or that she supplied the respondent's drugs to any other person. Nor am I satisfied on balance that the applicant observed other persons using the drug at her premises. Having regard to these matters, I am not satisfied that the respondent has, in this respect, established that it had valid reason based upon the misconduct of the applicant for the termination of the applicant's employment.

In so finding I have had regard to the submissions of the respondent's counsel as to the appropriate approach to the establishing of valid reason in a case such as this. In this regard the Court was taken to the decisions in Sangwin v Imogen (unreported, IRCA, von Doussa J, 8 March, 1996) and Perkins v Grace Worldwide Aust Pty Ltd (unreported, IRCA, Moore J, 4 September 1996). These decisions together with a number of other decisions in this Court, as to the operation of s170DE(1), were extensively canvassed in the decision of Ritter JR in E v Burswood Resort Management Limited (1996), 70 IR 122, a decision to which this Court was also referred. I do not intend to recite the various authorities in this area nor to revisit the analysis undertaken in Burswood. It is sufficient to observe that the fundamental difference in the approach taken in these cases is that in the Sangwin approach it is sufficient to found a valid reason for termination of employment, if the respondent has an honest belief, held upon reasonable grounds after sufficient inquiry, that the employee is guilty of the conduct alleged. This approach is an approach similar to that taken in cases such as Bi-Low v Hooper (1992) 53 IR 224, in the interpretation and application of the phrase `harsh, unjust and unreasonable'. In the approach taken in Perkins, it is necessary for the employer to establish, upon balance of probabilities, that the employee is guilty of the conduct alleged. Having regard to the legislative provisions in ss170DE(1) of the Act and the distinction between the term `valid reason' used in that section and the `harsh, unjust or unreasonable' provisions under consideration in cases such as Bi-Low v Hooper, I prefer the approach taken by Moore J in the Perkins Case, and that is the approach I have adopted in determining the question arising pursuant to s170DE(1) in this proceeding. This approach is apparently consistent with recent decisions of the Court since the striking down of ss170DE(2) of the Act. See in this regard Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, in which the Court expressed the view that the approach to be taken in determining the question of whether a valid reason existed for the termination of the employment was an objective test and not a subjective one.

However, whilst I am of the view that it is necessary for the respondent to establish on balance of probabilities that the applicant was guilty of the conduct alleged against her and that it has not so established, it is appropriate to observe that had the other approach been adopted in this case, I would not be satisfied that the respondent had met the criteria required in the Sangwin approach. This is because the respondent in my view did not conduct a full and proper investigation of the alleged facts nor did it establish that it had a reasonable basis for the belief that the applicant was involved in the unauthorised removal and illegal consumption of the drugs concerned. This is because the investigation, which is relied upon by the respondent, is an investigation where the particular allegations being made against the applicant were never put to the applicant. At no time was the applicant informed of the specifics of the allegations being made against her. She was never given any opportunity by the respondent to address the allegations as to her involvement or knowledge of the use of the restricted drugs at her premises. The respondent, in investigating the matters with the applicant on 29 November, 1996, put a number of questions which revealed no detail about any particular incident or allegations. The questions were in the following terms;

" Have you ever removed Kapanol from this site illegally?"

" Have you ever illegally taken Kapanol?"

" Has illegally acquired Kapanol ever changed hands in your house?"

No information was provided to the applicant as to the allegations made by the informant or the other employee. Nor as to the matters about which the respondent had been informed by the police. The applicant, other than responding in the negative as she did, was in no position to fully address any of the allegations made or to provide any explanation to the respondent as to the circumstances surrounding any evening when it was alleged the consumption of the drugs occurred. The particular time, or place, or persons alleged to be present was never put to the applicant by the respondent. None of the explanation heard by the Court, as to the applicant's activities on the evening in question, was heard by the respondent. In part, this is because the applicant was not in a position to provide details of her activities on the particular evening or an explanation of her conduct, because she did not know which evenings, or events, or allegations the respondent was referring to. In proceedings such as this it is not sufficient for the respondent to simply rely upon information received in telephone conversations with the police as to the course of the police investigations, without conducting its own investigation and interviews. At no time did the applicant have any opportunity to reply to the allegations which the respondent believed had been made by Ms Currie against the applicant. For these reasons in my view the respondent would fail even were the approach of Sangwin adopted in these proceedings. It did not conduct a full and sufficient inquiry, in the sense contemplated by Von Doussa J in Sangwin.

For the reasons set out herein, I am not satisfied that the respondent had valid reason for the termination of the applicant's employment. The respondent's own memorandum, discussed earlier herein, of itself acknowledges that there was a deficiency of evidence against the applicant. This is an accurate representation of the state of the evidence before the respondent and in my view the evidence did not support a finding that the respondent had a reasonable basis for its belief that the applicant was guilty of the misconduct alleged.

The matters referred to above in relation to the inquiry undertaken by the respondent and interview with the applicant are equally relevant to a consideration of the questions arising under s170DC. I am not satisfied that the respondent accorded the applicant an opportunity to be heard in relation to the allegations made against her prior to terminating her employment. This is not a case as described in Wyndham Lodge Nursing Home v Reader (No2) (1996), 65 IR 253 at 272, where the respondent might be excused from particularising the details of the allegations, because the employee knows the allegation being made by having been confronted in the course of the impugned conduct or where it is apparent that the substance of the allegations have been put to the applicant. The evidence before this Court does not establish that the substance of the allegations were put to the applicant in a manner in which she could have been reasonably expected to respond, either by the police, other employees, or by the respondent prior to the termination of the employment. For this reason there has been a contravention of s170DC of the Act.

I turn now to consider the question of remedy. In this proceeding the applicant seeks an order for reinstatement. The respondent opposes such an order. I am satisfied that an order for reinstatement in the circumstances of this case would be impracticable. This is because the applicant was charged and entered a guilty plea, to two drug related offences, as a result of quantities of cannabis found upon her premises on 8 November, 1996. Whilst I am satisfied that this was not a matter which formed a part of the reason for the termination of the employment, and nor was it investigated at the time, this was only because the respondent's focus at the time was upon the issue of the allegations of removal of company property. I am satisfied that the nature of the respondent's manufacturing process is such that the respondent is entitled to be seriously concerned for its reputation and security if a person who entered a guilty plea in respect of both indictable and summary drug offences were to be reinstated. I do not accept that the distinction drawn on behalf of the applicant between those areas of the premises where restricted or Schedule 8 drugs, (Drugs of Addiction), are produced and those areas where they are not, is a practicable solution to the concerns rightly raised by the respondent. Nor am I satisfied that the issue of security posed for the respondent is resolved by reference to the compulsory drug rehabilitation course directed by the Magistrate. The respondent is subject to controls provided for by the licensing authority in relation to the production and processing of Schedule 8 substances and in my view is not unreasonable in expressing its serious concerns, as to its license status, in the event that an order for reinstatement were made. I am satisfied that an order for reinstatement would in this proceeding be impracticable.

I turn now to consider the question of compensation. I have decided that it is appropriate to make an order for compensation. I am of the view that the amount of that compensation is affected by the significant possibility that the employment of the applicant would not have been continued by the respondent, as a consequence of the drug convictions entered in March, 1996. I accept the evidence that once knowledge of such a conviction came to the notice of the respondent, it would as a result of genuine commercial and security interests have taken steps to terminate the employment. In assessing the compensation I have also had regard to the applicant's length of employment with the respondent. I have determined that the applicant is entitled to compensation in the sum of $4,974.00, which includes a consideration of the period between the termination of the employment on 7 December, 1996, and the date of the pleas on the drug offences of 4 April, 1997, less the relevant notice period provided for in a separate order. The applicant was summarily dismissed from the employment. No notice was paid to her upon termination. The applicant is entitled to an order for damages on account of the failure to pay the period of notice provided for by s170DB of the Act. That is damages in the sum of $2,208.00, representing 4 weeks notice.

I certify that this and the preceding seven (7) pages

are a true copy of the Reasons for Judgment of

Judicial Registrar Parkinson.

Associate :

Dated : 25 July 1997

APPEARANCES

Counsel for the Applicants : Mr. A. Thow

Representative for the Applicants : National Union of Workers

Counsel for the Respondent : Mr. B. Lacey

Representatives for the Respondent : Australian Chamber of Manufactures

Dates of hearing : 3,4 & 14 July 1997