John Paul Reed and Southstate Industrial Supplies Pty Ltd [2001] NSWIRComm 185 (17 August 2001)

Last Updated: 3 September 2001

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : John Paul Reed and Southstate Industrial Supplies Pty Ltd [2001] NSWIRComm 185

FILE NUMBER(S): 6321

HEARING DATE(S): 10/05/2001, 24/05/2001, 07/06/2001, 14/06/2001

DECISION DATE: 17/08/2001

PARTIES:

APPLICANT

Mr John Paul Reed

RESPONDENT

Southstate Industrial Supplies Pty Ltd

JUDGMENT OF: Sams DP

LEGAL REPRESENTATIVES

APPLICANT

Mr W Jones, Solicitor

Austen Brown, Thompson

RESPONDENT

Mrs K Keady, Solicitor

Buckworth Keady Lawyers

CASES CITED: Kent Gorrell v Uwatec Pty Ltd (unreported, Sams DP, IRC1700 of 1999, 5 July 1999)

Maity and Express Publications Pty Ltd (unreported, Sams DP, IRC6216 of 2000, 27 July 2001)

Spanish Club Ltd v Bounouar (94 IR 173)

Byrne and Anor v Australian Airlines (185 CLR 310)

Outboard World v Muir (51 IR 167)

Bankstown City Council v Paris (93 IR 209)

Wang v Crestell Industries Pty Ltd (73 IR 454)

Rapp v Wauchope RSL Club (81 IR 116)

Bigg & Anor v New South Wales Police Service (80 IR 434)

Burke v McGirr (87 IR 54)

Busways v Johnson (55 IR 255)

Antanakopoulos v State Bank of New South Wales (91 IR 385)

Passas v Skouloudis (unreported, Sams DP, IRC2579 of 2000, 1 June 2001)

Copperart v Martin (68 IR 58)

Blagojevch v Australian Industrial Relations Commission (98 IR 32)

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: SAMS, DP

17 August 2001

Matter No. IRC00/6321

JOHN PAUL REED AND SOUTHSTATE INDUSTRIAL SUPPLIES PTY LTD

Application by John Paul Reed re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

DECISION

[2001] NSWIRComm 185

1 This is an application, pursuant to s84 of the Industrial Relations Act, 1996 ("the Act"), filed by John Paul Reed ("the applicant"), seeking relief in respect to his alleged unfair dismissal by Southstate Industrial Supplies Pty Ltd ("the respondent") on 20 October 2000. The application was lodged on 27 December 2000 - forty-seven (47) days out of time - thereby requiring the Commission to exercise its discretion, pursuant to s85(3) of the Act, to allow the application to proceed on its merits. For the reasons I express later in this decision, I have decided to exercise my discretion in the applicant's favour, such as to waive the twenty-one (21) day period for filing the application.

2 Proceedings commenced in Broken Hill on 7 February 2001, with Mr W Jones (Solicitor) appearing for the applicant and Mrs K Keady (Solicitor) for the respondent. After chairing private conferences with the parties, the Commission formed the view, pursuant to s87 of the Act, that the matter could not be settled. The Commission set the arbitration proceedings in Broken Hill on 10 May 2001, and issued directions for the filing and service of evidentiary material. Written submissions were filed subsequently.

Background

3 The applicant is fifty-five (55) years of age and commenced employment with the respondent as a salesman, on 9 February 1998. Prior to this, the applicant had worked in the mines at Broken Hill for thirty-one (31) years. During this time, he had been an apprentice fitter tradesman and supervisor, working both underground and on the surface. He was retrenched in August 1996.

4 His job with the respondent included counter sales, ordering, receiving and dispatching parts and servicing Pasminco's mine with hydraulic fittings and hoses. He said this work involved visiting the mine each Monday to check the stock requirements.

5 The applicant was paid $539.47 for a five (5) day week and $618.42 in weeks where he worked on Saturdays from 8am-12noon (usually one in four). His weekday hours were 8am-5pm.

6 The applicant was dismissed on 20 October 2000, for what the respondent alleged was "unsatisfactory work performance". He obtained short-term work ending on 23 February 2001, with Broken Hill Toyota. He commenced casual employment with Broken Hill Hire as a fitter on 28 March 2001. Both jobs paid less than Southstate.

7 Despite his experience and qualifications, he believed it would be difficult to find alternative work in Broken Hill. He has registered with the Broken Hill Skills Centre.

Circumstances of dismissal

8 The catalyst for the dismissal was an incident on 19 October 2000, in which the applicant had generated an invoice for a small order from Pasminco, which cost the employer $2.00 to create for an item valued at $5.00. This problem had its origins in a change of ordering by Pasminco in April 1999 through what is known as the SAP system. The applicant and the respondent's Managing Director, Mr Doyle, both described in evidence how the system worked. The system had a common and recurring problem (about once a day) which still exists to this day, in which orders would come for one item such as a bolt or a nut, rather than a box of one hundred, two hundred etc. Of course such ordering and correction meant extra paperwork and was neither efficient nor cost effective. When it occurred, the practice for the sales team was to ring the company and check the order. Mr Doyle deposed that the applicant would constantly have to be reminded of the errors - two or three times a week.

9 The two versions of the conversations on 19 October 2000, between the applicant and Mr Doyle, differ in the language said to have been used. However, it is plain that Mr Doyle was fed up with the applicant and the applicant had "a gut full of trying to sort out their (Pasminco's) problems".

10 Overnight, Mr Doyle thought about his efforts to counsel the applicant over two years, and a warning given to him in mid 2000 (the warning concerned a threat to dismiss the applicant after he failed to complete work on a hydraulic press while Mr Doyle was on annual leave. At the time he was given a week to "change your attitude"). The next day Mr Doyle verbally dismissed the applicant and said "yesterday was the straw that broke the camel's back - it's like you have your hand in my pocket". Again, although the precise recollection of the conversation differs between the applicant and Mr Doyle, the thrust of it is consistent with both parties' intent and understanding.

The Applicant's Case

11 The applicant claims that he was never advised, or given warnings, that his work performance was unsatisfactory, by either Mr Doyle or anyone else. He claims he never received any complaints about his work from the employer, or his work colleagues, and was never told about complaints allegedly made by customers. On the contrary, his work and attitude had been highly commended by Mr Max Groves, who had been a Southstate customer for fifteen (15) years (Ex "3"). The applicant also provided an affidavit from his subsequent employer, Mr Steven Bate, Service Manager, Broken Hill Toyota, who commended his work ethic and performance (Ex"4").

12 The applicant gave evidence that his skills as a fitter may have been attractive to the employer as Southstate was looking to expand into more fitting work. Although he did do fitting work from time to time, he said he was employed as a salesman, not a fitter. After another fitter, Mr Galpin, left Southstate, he was the only one with fitting experience. The claim that the employer kept the applicant on because of his fitting experience was not supported by Mr Doyle's own evidence. It was not even raised until Mr Doyle's cross-examination.

13 The applicant gave evidence of the incident in mid 2000 involving the hydraulic press owned by Pasminco. He said he had cleaned it, topped it with oil, wired in a three phase circuit and tested it. Mr Doyle had painted it. An electrical contractor worked on it twice. For a time, Pasminco's press was actually used by Southstate, when its own press was found to be too slow.

The applicant did not dispute that he was on a week's trial over this incident. In fact, he went back to Mr Doyle to ask if he had survived the trial, and Mr Doyle said there was a "big improvement" (T. p18). He did not regard this as a warning, believing Mr Doyle had simply lost his temper.

Mr Jones described this incident as trivial and the applicant's dismissal an extreme over reaction.

14 Mr Jones submitted that the applicant's evidence should be preferred to that of the respondent's. He said the applicant denied being constantly reminded about Pasminco invoices; denied constantly making mistakes and denied being rude or avoiding customers. Thus, the applicant's dismissal was "harsh, unreasonable and unjust" because:

1) he had done nothing to justify dismissal;

2) he received no warnings of unsatisfactory performance;

3) he was given no rational reasons for his dismissal and could therefore not explain his actions.

15 Mr Jones relied on supporting evidence from Mr Bate and Mr Groves. Mr Jones highlighted inconsistencies, omissions and exaggerations in the respondent's evidence and alleged collusion of the witnesses. He said that it was inconceivable that someone, said to be as bad as the applicant, would have kept his job for so long. Mr Jones submitted there were no warnings given by the employer. Even if the conversation at Easter 2000, was a warning, it was not cited as the reason for the dismissal 6 months later.

16 The evidence of Mr Doyle was that Mr Pace's phone call from Pasminco was the only time he was aware that Pasminco's orders had been wrong. Mr Jones criticised the failure of the respondent to call evidence from Mr Pace.

17 Mr Jones did not seek the applicant's reinstatement, but compensation for unfair dismissal. He said that the Commission should take account of the applicant's length of service, age, qualifications, location of employment, work record, the conduct of the employer and employee and the applicant's post dismissal employment. He calculated a total monetary loss of $5,472.56 and sought compensation of $10,000 plus costs.

18 As to costs, Mr Jones submitted that the respondent unreasonably failed to agree to a settlement of the claim (s181(2)(c) of the Act). He said an offer of three weeks wages to settle the claim was not reasonable and costs should be awarded against the respondent.

The Respondent's Case

19 Mr Doyle was the person who gave instructions and directions to the applicant and who ultimately decided to dismiss him. He believed that the applicant's performance was unsatisfactory in that he cost the company time and money, and was rude to customers.

20 Mr Doyle described the problems of the Pasminco ordering system and said all staff were instructed as to the procedure. A number of invoices, prepared by the applicant, were tendered. They disclosed mistakes that required corrections in pricing, description and discounting.

21 Mr Doyle gave evidence of the 19 October incident. Mr Pace from Pasminco had called to complain. Mr Doyle told the applicant it was a simple matter of ringing up and amending the order. He had said it made the company look bad. He had to walk away from a conversation with the applicant to "let it settle down." The applicant denied he was told to ring the customer in these circumstances. Mr Doyle said this problem happened two or three times a week with the applicant and maybe once a month or two months with other employees.

22 Mr Doyle acknowledged this was the first time he was aware that Pasminco had rung to complain about a wrong order being supplied.

23 Mr Doyle deposed that the applicant was very knowledgeable and clever and it was very hard to put him off. After thinking about it overnight, he said there was no other option. Mr Doyle said that he had also taken into account complaints he had received from other customers. Ms Janice Stephens gave evidence against the applicant. She said he ignored her and was rude to her. She mentioned one incident in mid 2000 when she mentioned to Mr Bennett that the applicant refused to fill up oil drums for her. The applicant denied refusing to serve Ms Stephens, or any other customer.

24 Mr Doyle gave evidence of his version of the hydraulic press incident. He said it was not in perfect working condition and described in detail the work that needed to be done. When it was fixed, Southstate used it for four or five days. He agreed that when he confronted the applicant, there was a heated discussion and that he may have said things he didn't mean. He agreed he may have "lost it".

25 With 90 percent of the sales going through Pasminco's engineering side, Mr Doyle confirmed that the applicant's skills and knowledge were an asset. Such skills were used at least once a day. He put up with his poor performance for nearly three years despite warning him two or three times a week (The applicant emphatically denied being warned at any time).

26 On the day of dismissal, Mr Doyle accepted that he had said "it is like you have your hand in my pocket" and that the applicant said "it looks like I will see you in the unfair dismissal court".

27 In re-examination Mr Doyle said there were a number of reasons for the applicant's dismissal - poor invoicing, he was slow to act and rude to customers.

28 Ms Sandra Bock, an employee of Southstate, gave affidavit and oral evidence, the thrust of which was to corroborate Mr Doyle's evidence as to the mistakes made by the applicant and his alleged rudeness to customers. She deposed that she had cause to bring mistakes to the applicant's attention - on average once a day.

29 In oral evidence, Ms Bock said the nature of these errors was description of goods, quantity and pricing. When she raised these matters with the applicant he didn't seem to care. The applicant rejected this allegation.

30 Ms Bock gave evidence that she had observed the applicant become agitated, allow the phone to ring when other employees were busy, walk away from a customer and heard him being loud and abrupt with customers. The applicant denied all these matters.

31 Mr Bruce Bennett is a boiler maker/salesman employed by the respondent for the last five (5) years. He gave evidence similar to that of Ms Bock, citing occasions when the applicant was rude to, or walked away from customers, and ignored phone calls. He said the applicant disliked answering phones, serving customers, unpacking deliveries and taking orders. In oral evidence, Mr Bennett said he did not think the applicant was happy at Southstate. The applicant emphatically denied this evidence.

32 Mr Bennett said he observed Mr Doyle and Ms Bock correcting the applicant about mistakes with invoicing. It occurred, he said, on a weekly basis. Mr Bennett was involved with the hydraulic press issue and said the applicant had not completed the work. Despite being spoken to by Mr Doyle, he (Mr Bennett) did not observe any noticeable improvement in the applicant's attitude. The applicant deposed that the work on the machine was completed and it sat in the yard for three months. It had been used by Southgate during this time.

33 Mr Bennett gave oral evidence that he believed the applicant was employed because of his fitting and rigging background. He acknowledged that there wasn't a lot of fitting and the applicant's job did not really require it.

34 In respect to invoicing errors, Mr Bennett said all the staff were continually reminded of it. He accepted that other employees made errors.

35 Mrs Keady submitted that the applicant's termination of employment was supported by a poor work history, indicating he consistently failed to follow directions relating to work performance issues. She pointed to the employer's need for efficient processing of orders and invoices, the timely and efficient attention to fitting jobs and quality customer service. She said the reason there was a scarcity of complaints against the applicant was because the errors he made were addressed by other staff.

36 Mrs Keady said the evidence of Mr Bennett and Ms Bock corroborated Mr Doyle's contentions that all employees knew of the importance of correcting errors, that such errors were frequently pointed out to the applicant and the applicant had a recalcitrant attitude. She said the applicant did not comply with My Doyle's direction to ring and clarify orders from the client.

37 She submitted that the applicant was kept on, despite his poor performance, because of his knowledge and qualifications as a fitter. The applicant had accepted his skills were of value to the employer.

38 Mr Doyle's evidence was of a warning given to the applicant concerning the delay in completing the repair work on the hydraulic press in mid 2000. Mr Doyle had said there was no improvement in the applicant's attitude to work prior to his dismissal.

39 Mrs Keady said the uncontested evidence of Ms Stephens demonstrated a dissatisfaction with the applicant's customer service. Mrs Keady submitted one of the applicant's character witnesses was a social friend and another was an employer who had only observed the applicant on a short term basis.

40 Mrs Keady cited a number of cases which dealt with an employee's poor work performance as a legitimate reason for dismissal. These cases were relevant to the circumstances here where customer service is critical to a business' viability. She said a failure to improve performance would justify dismissal.

41 Mrs Keady addressed the Commission on the provisions of s88 of the Act. She said:

1. The applicant was given a reason for dismissal verbally and in the separation certificate.

2. The reasons for dismissal were entirely justified and had a basis in fact.

3. The applicant was given a clear and unequivocal warning of his performance around Easter 2000.

4. The applicant did not seek reinstatement or reemployment.

5. The respondent did not humiliate or demean the applicant.

6. The applicant found alternative employment within three weeks of dismissal.

42 Accordingly, she said the application for relief from alleged unfair dismissal should fail. In the alternative, Mrs Keady put submissions on compensation, citing a requirement for consistency in the orders for compensation and putting that a claim for twenty six (26) weeks wages, in the circumstances of this case and with the applicant's two and a half years service was not justified. She disputed Mr Jones calculations of proposed compensation. She opposed any costs order based on lack of evidence of the employer unreasonably failing to settle the claim.

CONSIDERATION

Acceptance of Out of Time Application

43 The applicant said the reason for not filing his application within 21 days after dismissal was that he was seeking to have his claim addressed through communications between his solicitor and the respondent's solicitor. He had initially sought an appointment with his own solicitor three days after dismissal on 23 October, but couldn't see him until 16 November. Various exchanges then took place between the two solicitors resulting in the application being filed forty seven (47) days out of time. The applicant claimed he would suffer hardship if he was not allowed to proceed with his claim.

44 Mrs Keady did not take issue with the reason for the delay and acknowledged that the application could be accepted and decided on its merits.

45 While I appreciate Mrs Keady's concession, it is not for the parties themselves to decide that the statutory time limit for filing an unfair dismissal application should be waived. There is a positive onus on the applicant to satisfy the Commission that its discretion should be so exercised. So much so is evident from the express language of the statute:

85(3)

The Commission may accept an application that is made out of time if the Commission considers there is a sufficient reason to do so, having regard in particular to:

(a) the reason for, and the length of, the delay in making the application, and

(b) any hardship that may be caused to the applicant or the employer if the application is or is not rejected, and

(c) the conduct of the employer relating to the dismissal.

46 In Kent Gorrell v Uwatec Pty Ltd (unreported, Sams DP, IRC1700 of 1999, 5 July 1999), the Commission as presently constituted, discussed in some detail the principles to be taken into account when considering whether an application should be accepted out of time. I reaffirmed these principles more recently in Maity and Express Publications Pty Ltd (unreported, Sams DP, IRC6216 of 2000, 27 July 2001, at para 11-15), and I do not repeat them. It is apposite only to observe that the key to the Commission's exercise of discretion is whether a "sufficient reason", or reasons, has been made out.

47 In this case, I find in the applicant's favour and pursuant to s85(3), exercise my discretion in allowing his application to be filed outside the twenty one day time limit. The Commission believes the following matters constitute sufficient reasons:

1. The applicant was not derelict in seeking to pursue his claim for unfair dismissal through his solicitor shortly after his dismissal.

2. The applicant made clear to his employer, on the day he was dismissed, that he believed his dismissal was unfair when he said "Looks like I'll see you in the unfair dismissal court".

3. The employer was sent a letter of claim from the applicant's solicitor on 17 November. Thus the employer at all times knew that it was likely to have to meet the claim of alleged unfair dismissal.

4. In view of the applicant's age, and employment prospects in Broken Hill, I am satisfied he would suffer hardship if his claim was not allowed to be determined.

5. The employer did not plead any hardship or inconvenience. On the contrary, it expressly raised no objection to the claim being determined on its merits.

6. It would not serve the course of justice to dismiss the applicant's claim in circumstances where his solicitor had not lodged the application on his behalf, or advise him to do so within the Act's specified time period.

48 In respect to this last matter, I do not wish to appear to be over critical of the applicant's solicitor. There appears to me to be a "Broken Hill way" of dealing with these matters, not by conferences, but by exchanges of solicitors' letters, even when both solicitor's offices are in the same block, in the same street. Invariably, time slips away and the formal claim is not lodged within time. If I might give some general advice - it is all well and good to conduct these matters through exchanges of correspondence, which hopefully will result in a settlement. However, if for no other reason than as insurance against a claim's dismissal on jurisdiction, studious attention must be given to filing documentation within statutory limits or in accordance with the Commission's directions. A failure to do so could have catastrophic consequences (See: Spanish Club Ltd v Bounouar 94 IR 173).

Was the dismissal unfair?

49 The relevant provisions of the statute - Pt6, ch2 of the Act - describe an unfair dismissal by the express words "harsh, unreasonable or unjust". It is now well settled that each of these words has its own discrete meaning and has different implications in an industrial context. The lead authority for this proposition is to be found in Byrne and Anor v Australian Airlines (1995) 185 CLR 310, where the High Court considered the expression "harsh, unreasonable and unjust"; albeit in the context of an Award provision. In their joint judgment, McHugh and Gummow JJ said at p465:

It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequence for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

50 The principle was further discussed in Outboard World v Muir (1993) 51 IR 167, where a Full Commission said:

First we deal with the argument for the appellant that the Commission erred by applying the wrong test in connection with the dismissal: 'unfair' rather than 'harsh, unreasonable or unjust' dismissal. We agree with Mr Reitano's submission in this respect that the reference by the Commissioner to "unfairness" did not represent any misunderstanding of the correct test but was merely the use of a shortened form of expression intended to embrace the three relevant words. Whilst we recognise that there may be a natural tendency (recognised in the use even by the advocate for the Company before the Commissioner of the term 'unfair') to use the shortened form, we consider that it is preferable that a member of the Commission utilise the precise words provided by s246, rather than the catch-all heading, particularly when expressing the basis for a finding that a dismissal is within one or more of the heads provided by the section. We take this view because, even though there may be some circularity in the full phrase 'harsh, unreasonable or unjust', we detect scope for variation of meaning which may be critical to the determination of a particular matter and may be obscured by the use of the substitute term "unfair". Different but not wholly dissimilar words, "unfair", "harsh", and "unconscionable", are used in s275, power of the Industrial Court to Declare Certain Contracts Void, of the 1991 Act. In relation to those words, then appearing in s88F of the 1940 Act, the Commission in Court Session (Perrignon, Cahill and Dey JJ) in A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 at 418 Cahill J (delivering a separate judgment) said:

The duty of the Commission is to reach a conclusion on the issues of whether the subject transaction is 'unfair', or 'harsh' or 'unconscionable'.

It has been said that those words are a 'tautological trinity' (Davis v General Transport Development Pty Ltd) [1967] AR 371) but we prefer to take the view that there is a perceptible difference between the meaning of the term 'unfair' and that of the terms 'harsh' and 'unconscionable'. What is unfair may not be so unfair as to be 'harsh'. But, whether this view be correct or not, once the transaction is found to be unfair the Commission may proceed to exercise its very wide power.

In much the same way, we consider that, while strict definitions of 'harsh', 'unreasonable' and 'unjust' may produce a degree of circularity of meaning, turning on the notion of 'fairness', it may be in a given case that a dismissal may be viewed as coming within the ambit of one of the three adjectives but not the others. To avoid the possibility of misunderstanding or error, the tribunal, when making that primary finding, should state explicitly the basis on which it is made.

51 A more recent authority for the same proposition is to be found in Bankstown City Council v Paris (1999) 93 IR 209:

The Commissioner found that the dismissal by the Council of Mr Paris was 'harsh, unreasonable or unjust'. This phrase, contained within s84, is an important key to jurisdiction and does require some specificity of finding. As has been observed by the Commission on numerous occasions, a dismissal may be capable of being unreasonable but not harsh, or harsh but not unjust, other permutations may apply. In the present case, however, it seems to us that the dismissal of Mr Paris was capable of meeting not one or the other of those descriptions but each of them. Therefore, nothing turns upon the expression adopted by the Commissioner. We would observe that in a case where the conduct of the employer might satisfy one but not all of those heads, a positive and specific finding should be made.

52 It is trite to observe that no two cases will ever be exactly alike. Hence the Commission is required to give consideration to each of the words in the expression "harsh, unreasonable and unjust" in the context of the particular facts and circumstances of each case.

53 In my view, the dismissal of the applicant on 20 October was both "unreasonable" and "unjust" within the meaning of the words of the statute.

54 In my opinion, Mr Doyle completely over-reacted to a set of circumstances which in no way justified the applicant's dismissal. While I can understand his frustration, it called for a much cooler and rational response. It should not be overlooked that the errors were largely a problem of Pasminco's making, rather than of the applicant's alleged unsatisfactory performance. It appears to me that when Mr Pace of Pasminco called to complain on 19 October 2000, Mr Doyle felt he needed to appear to be pro-actively responding to the complaint. Dismissing the applicant was the convenient answer and easy way out - and he did.

55 I note there is no evidence that Southstate's business with Pasminco (accounting for 90 percent) was adversely affected by this incident, or the alleged frequency of the applicant's errors over many months. There is evidence other employees made similar mistakes and that all employees were continually reminded of the problem. In any event, as I said earlier, the problem was hardly the fault of the applicant, or anyone else at Southstate for that matter.

56 Mr Doyle's evidence was that he was very upset because his biggest customer was complaining. When asked if he said, "what the fuck is this?" and was waving his arms around, he said "I don't think so". In view of his state of mind at the time, I am sure he did. This behaviour is consistent with his own evidence over the hydraulic press incident. He admitted the discussion with the applicant was heated, he may have said things he didn't mean and he may have lost control.

57 Moreover, Mr Doyle's evidence was that, apart from Mr Pace's complaint, he was unaware of any other errors, or complaints made by Pasminco. Was one complaint sufficient to justify Mr Reed's dismissal? I think not. Indeed, it seems inexplicable to me that if the applicant was as bad as he was portrayed by the employer, and for so long, why he would have lasted for two and three quarter (2¾) years.

58 The evidence of Ms Bock and Mr Bennett in this regard is not particularly persuasive. Ms Bock said his errors were on a daily basis; Mr Bennett said once a week. Apart from this conflict, in my opinion, the continual warnings said to have been given to the applicant, are more likely to have been those given on a regular basis to all employees because of Pasminco's imperfect ordering system. These do not constitute, nor could they ever constitute, appropriate warnings of poor performance.

59 Mr Doyle said he kept the applicant on because of his skills and experience as a fitter. I cannot see how the applicant's experience was a necessary prerequisite for a job as a salesperson. Mr Bennett's evidence was that it was not really part of the job. It is clear not much fitting work was done anyway. It is noted that since the applicant's dismissal, no one else has been employed at Southstate with fitting experience.

60 The Commission is also of the firm view that this argument was thrown in at the last minute to portray the employer as a patient, but ultimately frustrated victim of the applicant's ongoing and persistent mistakes. With respect, this was nothing more than a "red herring". I instance the fact that Mr Doyle makes no mention in his affidavit of why he kept the applicant on for so long. It is first raised in oral evidence. I find this claim to be utterly unconvincing and designed to bolster an otherwise weak case.

61 The incident of the hydraulic press is another example of the employer "clutching at straws" in order to put flesh on the bones of its case. The evidence remains cloudy as to the reason why the press remained at the premises of Southstate for so long. The applicant said it was in perfect working order and merely required some small rectifications. It remained in the yard for three (3) months. He said the Company's own press was broken down and repairs to it made it too slow. Mr Doyle sought approval from Pasminco to use their press. The evidence was that Southstate used it for a short period of a few days to a week in an emergency. This much is therefore clear. The hydraulic press was at least in good working order for Southstate to want to use it in preference to its own. The applicant was not entirely responsible for the initial repairs to it. Mr Doyle's evidence was that the electrician worked on it at least twice and he and Mr Bennett had also worked on it.

62 This incident was some six months prior to the applicant's dismissal. There was no evidence that it was in any way connected with the dismissal. It was not until after these proceedings commenced that it was raised, by the employer, as grounds for dismissal.

63 I also find the respondent's evidence of the applicant's rudeness to customers to be less than persuasive. I do not doubt that the applicant may have been less than the perfect, ever smiling, always helpful salesperson. On the other hand, there is precious little direct evidence of his alleged surliness and rudeness. Again, if he was as bad as he was portrayed, it beggars belief that Mr Doyle's business would not have suffered and he would be able to produce direct and irrefutable evidence of such damage. It might reasonably be expected, for example, if customer service was such a high priority (which I do not doubt) that a written warning or counselling would have been given. None was. I do not find this complaint against the applicant to have been of such gravity to have justified dismissal - even in combination with the other alleged grounds.

Procedural Fairness

64 I turn then to consider the principles of procedural fairness and whether the applicant has any grounds for claiming he was denied fair and due process. The parties appropriately directed the Commission's attention to s88 of the Act.

s88

In determining the applicant's claim, the Commission may, if appropriate, take into account:

(a) whether a reason for the dismissal was given to the applicant and, if the applicant sought but was refused reinstatement or re-employment with the employer, whether a reason was given for the refusal to reinstate or re-employ, and

(b) if any such reason was given - its nature, whether it had a basis in fact, and whether the applicant was given an opportunity to make out a defence or give an explanation for his or her behaviour or to justify his or her reinstatement or re-employment, and

(c) whether a warning of unsatisfactory performance was given before the dismissal, and

(d) the nature of the duties of the applicant immediately before the dismissal and, if the applicant sought but was refused reinstatement or re-employment, the likely nature of those duties if the applicant were to be reinstated or re-employed, and

(e) whether or not the applicant requested reinstatement or re-employment with the employer, and

(f) such other matters as the Commission considers relevant.

65 Before considering these specific matters and others, I would make these observations based on those principles which are now well and truly settled by relevant case law.

66 The test of procedural fairness is best made by reviewing the totality of the circumstances up to, and after the dismissal, and balancing the interests of justice being afforded to all parties.

67 There is no obligation on an employer to slavishly follow strict guidelines or policy where the grounds for dismissal are overwhelmingly against the employee. Put another way, imperfections in the procedure will not necessarily invalidate the employer's decision to dismiss (See Wang v Crestell Industries Pty Ltd, 73 IR 454; Rapp v Wauchope RSL Club, 81 IR 116; Bigg & Anor v New South Wales Police Service, 80 IR 434; Burke v McGirr 87 IR 54, Busways v Johnson, 55 IR 255; and Antanakopoulos v State Bank of New South Wales 91 IR 385).

68 Nevertheless, there is an obligation on an employer to comply with generally recognised standards of contemporary industrial behaviour in ensuring the process of dismissal is not unfair. In practice, for example, two written warnings are hardly necessary where an employee is found to have engaged in gross misconduct warranting summary dismissal. On the other hand, a dismissal for poor performance will usually be found to be unfair, if the employer fails to warn, or counsel the employee as to improving his/her performance or fails to provide an opportunity for the employee to improve.

69 This last observation is directly relevant to the circumstances of this case. Even if there was some basis for the employer's complaints of poor performance, it did almost nothing to address it's concerns, other than dismiss the applicant without warning. Based on the evidence in this case, I find that the applicant was:

· dismissed without warning on 20 October 2000;

· was not told, at the time, of the reason/s for dismissal;

· was not, therefore given any opportunity to explain his actions or behaviour;

· had not been given appropriate warnings that his performance was said to be unsatisfactory;

· was not given any opportunity to improve his alleged poor performance.

70 Accordingly, I find the applicant was denied procedural fairness such as to warrant a finding of the dismissal being procedurally unfair.

Costs

71 Mr Jones put a short submission arguing that costs should be awarded against the respondent because it "unreasonably failed to settle the claim". After hearing the evidence, he said the Commission could be satisfied that an offer of three (3) weeks wages was not a reasonable attempt to settle the claim. Not surprisingly, Mrs Keady said there was no evidence to support a finding that the respondent had unreasonably failed to settle the claim.

72 The Commission's power to award costs in Pt6 ch2 proceedings is found in the discrete provisions of s181(2)(c) and the general provisions of s181(1). The principles applying to costs applications in unfair dismissal proceedings was carefully and usefully considered in Bankstown City Council v Paris (93 IR 209). I referred to this decision in Passas v Skouloudis (unreported, Sams DP, IRC2579 of 2000, 1 June 2001) at para 15:

Bankstown City Council v Paris identified two bases upon which the Commission might make an affirmative conclusion as to a party unreasonably failing to agree to a settlement:

1. The rejection by a party of a reasonable settlement of the claim.

2. The conduct of a party that could be said to be inconsistent with an intention to settle the proceedings.

73 In view of the fact that costs do not follow the event in Pt6 ch2 proceedings (see Copperart v Martin, 68 IR 58), there needs, in my opinion, to be a more substantive argument put by a party seeking costs, based on properly adduced evidence, rather than merely asserting the other side unreasonably failed to settle the claim.

74 Comparing a token offer of settlement to a significantly higher amount ordered by the Commission may, in particular circumstances, be a factor in the Commission awarding costs against a party. However, it may not, of itself, be sufficient to make such a finding. See Blagojevch v Australian Industrial Relations Commission (98 IR 32 at 42-43), where Marshall and Lehane JJ said:

Certainly there is no reason to give primacy to the result of a mechanical comparison between an amount offered and the amount of compensation ultimately awarded; although, if an applicant offers to settle for a particular amount and the arbitration results in the award of a substantially lesser amount by way of compensation, it would no doubt be only in unusual circumstances that the respondent would be held to have acted unreasonably in rejecting the offer.

75 In the absence of a properly constructed argument and having regard for the evidence in the case, I would take a prima facie view that three weeks' wages was not an unreasonable offer of settlement in the conciliation phase of this case. The application for costs is therefore refused.

Relief Sought

76 The applicant does not seek reinstatement or re-employment. Having regard for the circumstances described herein, reinstatement would be impractical. The Commission therefore proposes to award compensatory relief pursuant to s89(5) of the Act. In doing so I have taken into account the following:

1. The alternative employment secured by the applicant soon after dismissal, but which has now ended.

2. The unlikely prospects of reasonable alternative employment for the applicant at age fifty-five (55) years.

3. The number of existing and future retrenched employees from the mining industry in Broken Hill make it unlikely Mr Reed would find alternative tradesman's work.

ORDERS

77 Pursuant to s89(5) of the Industrial Relations Act, 1996, the Commission orders that:

1. The respondent, Southstate Industrial Supplies, shall pay to the applicant, Mr John Paul Reed, an amount equivalent to 16 weeks pay at $539.47 per week.

2. The amount in Order 1 shall be payable within 21 days of today.

The Commission makes no orders as to costs. Each party shall bear its own costs.

These proceedings are now concluded.

PETER SAMS

DEPUTY PRESIDENT

LAST UPDATED: 17/08/2001