federal COURT OF AUSTRALIA

INDUSTRIAL LAW - alleged UNLAWFUL TERMINATION - whether applicant was serving a period of PROBATIONARY EMPLOYMENT - whether period of probation reasonable - three months - mining industry

Industrial Relations Act 1988 (now Workplace Relations Act 1996) - ss 170CC, 170EA

Industrial Relations Regulations Reg 30B(1)(c)

A.W.U. Gold (Mining and Processing) Award 1993

Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233

Ryan v Furneys Stockfeeds Limited (unreported IRCA No. 112 of 1996, Beazley J, 28 March 1996)

Potter v Australian Capital Territory (unreported, Federal Court No. 968 of 1997, Wilcox, Marshall and North JJ, 17 September 1997)

BARRY KEITH WOODBURY -v- BARMINCO PTY LTD

WI 1045 OF 1997

JUDICIAL REGISTRAR:    R.D. FARRELL JR

PLACE:                                  PERTH

DATE:                                    22 JANUARY 1998

THE COURT DECLARES THAT:

1.         The applicant is not excluded by Regulation 30B(1)(c) of the Industrial Relations Regulations from the operation of Subdivisions B, C, D, and E of Division 3 of Part VIA of the Workplace Relations Act 1996.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court of Rules.

REASONS FOR JUDGMENT

This is an application under Section 170EA of the then Industrial Relations Act 1988, now known as the Workplace Relations Act 1996 (“the Act”). The application is for reinstatement and compensation arising from the alleged unlawful termination of the employment of the applicant, Mr Barry Keith Woodbury (“Mr Woodbury”) by the respondent, Barminco Pty Ltd (“Barminco”).

It was agreed by the parties that it would be convenient for the Court to determine as a preliminary issue whether Mr Woodbury was an employee serving a period of probation for the purposes of Section 170CC and Regulation 30B(1)(c) of the Industrial Relations Regulations, such that he was excluded from the application of the unlawful dismissal provisions of the Act. The Court therefore heard evidence and submissions on that matter and reserved its decision.

Relevant Principles

Regulation 30B(1)(c), which applies to this application, relevantly provides that:

“an employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case requires:

(i)        is determined in advance; and

(ii)       is reasonable, having regard to the nature and the circumstances of the employment...”

is excluded from the operation of Subdivisions B, C, D, and E of Division 3 of Part VIA of the Act.

It is agreed that, before commencing employment, Mr Woodbury signed a letter of employment on 4 September 1996 with the following term:

“1.       Appointment

Initially your appointment will be for a three month probationary period in which time your suitability for the position will be assessed. If at the end of the three month period, you have performed your duties satisfactorily, the position will be made permanent.”

The sole issue in these proceedings was whether the three month duration of the probation period to be served by Mr Woodbury was reasonable, having regard to the nature and the circumstances of his employment. The onus on this question rests with Mr Woodbury.

In Nicolson v Heaven & Earth Gallery Pty Ltd, (1994) 126 ALR 233; 57 IR 50; 1 IRCR 199, Wilcox CJ discussed the manner in which the Court should determine whether a particular period of probation is reasonable:

“In some cases, evidence might be available concerning the practice in the particular industry. If so, the evidence would be relevant on the issue of reasonableness. It might be helpful, even decisive. But it is not necessary, or desirable, for expert evidence to be called in relation to the reasonableness of a particular stipulation. Whether or not the stipulated period is reasonable, is a matter that has to be determined by the person hearing the case, as an exercise of judgment. The judgment should be based on the proved objective facts, not on someone else’s opinion.

Probably the most important consideration, in determining what is a reasonable period, will be the nature of the job. In the case of a person employed to carry out repetitive duties under close supervision, a reasonable period may not extend beyond a week or two. In the case of a person employed in a marketing or managerial position, working with little or no direct supervision and whose quality of performance cannot be immediately apparent, it may be reasonable for an employer to specify a probationary period measured in months.

Circumstances will vary from case to case; the size, location and mode of operation of the employer being relevant factors, along with the personal characteristics and circumstances of the employee.

The legislature has not prescribed the maximum extent of a reasonable period. It is not for me to do so. But I suspect that an employer will rarely be able to justify a period exceeding two or three months, in the case of an employee to whom Pt VIA now applies: that is, an award employee or a non-award employee whose wages do not exceed $60,000 per year.”

In Ryan v Furneys Stockfeeds Limited (unreported, IRCA No. 112 of 1996, Beazley J, 28 March 1996), a case concerning an employee performing loading, carting and cleaning duties for a stockfeed firm which Beazley J characterised as “work of a repetitive nature involving little skill”, her Honour considered Nicolson v Heaven & Earth Gallery Pty Ltd, and observed that:

“... Nicolson does not purport to set down any rule of universal application. Each case has to be considered according to its own circumstances. It may be that a period as short as that indicated by the Chief Justice may not be sufficient to assess an employee’s overall suitability for the position.”

That the entire circumstances of the employee’s employment should be considered, and not merely the circumstances of the position the employee held, has been confirmed by the Full Court of the Federal Court of Australia in Potter v Australian Capital Territory (unreported, Federal Court No. 968 of 1997, Wilcox, Marshall and North JJ, 17 September 1997).

Nature of the Employer

Barminco is a mining contractor which supplies a contract workforce to various mines. The owners of these mines are its clients.

Because the supply of labour is an integral part of its business, Barminco contends that the need to ensure the quality of that labour is greater than if it were mining on its own account. Deficiencies in the workforce would, Barminco submits, damage the company’s relationship with its client and its reputation generally. Because Barminco’s revenue is calculated on its workforce’s level of production, the performance of its workforce directly affects its earnings.

Barminco’s practice of placing its new employees on probation is a measure intended to enhance the quality of its long-term workforce.

Industry Practice

Barminco further contend that the imposition of a three month period of probation is an industry standard. Mr Reg Miller, Barminco’s Human Resources Manager, has 35 years experience with large companies in the mining, oil and gas industry. He gave evidence based upon his experience that periods of probationary employment are common throughout the mining industry, with three months generally adopted as a standard period.

He explained that it is the policy of Barminco, consistent with this industry practice, that all employment be offered subject to a standard three month period of probation, irrespective of the new employee’s experience. I am satisfied that this is the company’s intended policy, though the evidence disclosed that the relevant period is sometimes described as “a maximum of three months”.

Mr Woodbury, the only other witness, disputes that periods of probation are common in the mining industry. He had heard of probation before, but does not believe he has ever previously been on probation himself. He asked for the effect of the clause to be explained to him during his induction. He says he has seldom talked to anybody who had undergone probation, and did not believe it was common for experienced operators to be placed on probation.

It may be that probationary periods are more common in larger companies than with the small contractors with whom Mr Woodbury was typically employed. Barminco would fall somewhere between these two categories of employer.

On the basis of this evidence, I am not satisfied that a three month period of probation conformed to an industry standard.

Relevance of Award Provision

Mr Woodbury’s employment was covered by the terms of the A.W.U. Gold (Mining and Processing) Award 1993, a consent award ratified by the Western Australian Industrial Relations Commission.

Clause 5(1)(e) of that Award provides that:

“An employee may be engaged on a probationary basis provided the employee is advised in writing on engagement that employment is on a probationary basis for a defined period, not in excess of three months”.

It would appear that Barminco acted consistently with the award. Barminco contends that the award provision is relevant in determining whether three months is a reasonable probationary period.

In Ryan v Furneys Stockfeeds Limited, Beazley J considered an award provision which provided that:

“All new weekly employees... shall be employed under a probationary period of 3 months commencing from the date of engagement...”

Her Honour found that Mr Ryan was, by force of the award, serving a period of probation for the purposes of the regulation. When considering whether the three month period was reasonable, she said:

“An employer intending to rely on regulation 30B(1)(c) may be well advised to adduce evidence as to why the period of probation in the employment in question is reasonable. Having said that, there is force in the submission of the respondent’s counsel that regard should be had to the provisions of the award, although its terms are not necessarily determinative. An award could specify a period which was not reasonable having regard to the nature and circumstances of the employment. However, it must be borne in mind that the award was made by a specialist tribunal. That is an important consideration although not a conclusive one. It specifies a period of probation which is not unusual in this country in many forms of employment, including those which do not involve a great deal of skill. In my opinion, the award period of 3 months is reasonable. Accordingly, the applicant is excluded from the operation of Division 3 of Part VIA of the Act.”

There is a significant difference between the award provision considered by Beazley J and that which applies to Mr Woodbury. The latter provides that the period of probation must be “not in excess of three months”.

The industrial parties have therefore endorsed a range of reasonable probation periods, of which the longest, presumably appropriate for those employees with no relevant work experience, is three months.

The Nature of the Job

The position for which Mr Woodbury was engaged was that of truck driver or “diesel operator”. He was to drive trucks at the Daveyhurst mine site, operating expensive vehicles and equipment to cart ore from the underground mine to the above ground dump sites. He was subject to the supervision and direction of a shift supervisor and to the direction of radio controllers. The shift supervisor’s supervision is not constant and the driver would go for long periods each shift without supervision. The supervisor was required to check on employees twice per shift, and employees were required for safety reasons to be checked four times per shift in all.

Mr Woodbury was to be accommodated with about 35 other workers at a nearby work camp, provided by the mine owners. The camp was described by Mr Miller as “fairly rustic and confined”. Misbehaviour by Barminco’s employees at the camp would thus reflect on Barminco’s reputation with its client.

Mr Woodbury was to work on a roster of two weeks on, one week off. Barminco contended that the three month probation period was therefore effectively only two months on the job.

However, each three week cycle involved fourteen shifts each of twelve hours over two weeks, followed by one week of leave. Mr Woodbury would thus work 168 hours over a three week cycle. By comparison, an employee on a 38 hour week would work only 114 hours over the same period. I have taken this into account in assessing whether Mr Woodbury’s period of probation was reasonable.

Barminco contend that a three month probationary period allows it time to properly and fairly assess important aspects of an employee’s performance and personality which do not usually become evident until the employee has settled into and become comfortable with the employment.

It contends it needed time to assess Mr Woodbury’s:

·      work ability and proficiency;

·      reliability and responsibility;

·      ability to get along with supervisors and workmates;

·      attitude to mine safety;

·      attitude and personality - ie whether he would “fit in”, both when working and in the work camp environment.

Mr Woodbury gave evidence that his ability to drive the truck, or lack there of, would have been evident within one shift. Barminco do not seriously take issue with that.

However, Barminco raised in its evidence a number of ways in which an employee might reveal himself or herself to be unsatisfactory in the course of a three month probationary period, where such deficiencies would be less likely to become apparent within a shorter period.

For example, an employee might be a technically proficient truck-driver, but may not be able to perform reliably and responsibly over a period of consecutive shifts, given the repetitive and monotonous nature of the job. Once bored by the routine, a driver unsuited to the position may begin to ignore safe work practices, cut corners, skip pre-shift checks, or disobey speed limits. An unsuitable employee may thus ultimately cause personal injury, expensive damage to equipment and lost production time.

Mr Miller suggests that it may take more than just one or two work cycles after employment before the “honeymoon period” ends and an employee starts to show his or her “true colours”.

As with work performance and safety issues, Mr Miller suggests it sometimes takes more than just one to two work cycles for personality problems and conflicts to arise. This may be particularly so in the context of the camp environment.

Mr Miller also points out that a shorter probationary period may not be fair to the employee, who may need an opportunity to “settle in” before being reviewed.

Mr Woodbury’s Personal Characteristics and Circumstances

Mr Woodbury was an impressive witness. Though he was only twenty eight years of age at the relevant time, he had eight years of underground mining experience, having begun work in the mining industry at the age of sixteen.

Mr Woodbury’s job application set out his employment history. Mr Woodbury had in fact applied twice for employment at Barminco, and the company drew the Court’s attention to differences in the two accounts given by Mr Woodbury of his employment history in his respective applications. I place no significance in those differences. In my view they are much as one would expect where an applicant is relying on their memory of their employment history, without the assistance of records.

Mr Woodbury’s employment history does not show any period of employment of more than 18 months. Mr Miller said this suggested an “unstable” work history, indicating that Mr Woodbury might get bored with mining. However, Mr Miller also acknowledges that employees are often required to move about in the mining industry because long term employment is not always available. This is reflected in Mr Woodbury’s work history.  On other occasions he has had to leave employment due to incidents in his personal life, which are not, in my view, relevant to the likely stability of his future employment. In any event, a three month probationary period would be of little assistance to the employer on this point.

Mr Miller points out that, because of the transitory nature of employment in the mining industry, it is often difficult to verify the work histories and experience of new employees.

Mr Miller says that Barminco had no direct knowledge of Mr Woodbury, and that the only way to assess his suitability was to assess him on the job.

However, Mr Woodbury says that he believes one of Barminco’s supervisors, Mr John Anderson, “put in a good word” for him. Mr Miller confirms that Barminco had a reference from an existing employee. Mr Woodbury had worked with Mr Anderson previously.

Barminco’s site supervisor at Daveyhurst, Mr Gary Mayes, interviewed Mr Woodbury. He noted from Mr Woodbury’s employment history that Mr Woodbury had worked for Mr Chris Bargythe, who had a reputation as a hard-working miner. Mr Mayes told Mr Woodbury that if he held his job with Mr Bargythe, then he would fit in at Barminco.

Mr Woodbury says that the Barminco employee conducting his induction acknowledged that the three month period of probation was less relevant to him, because of his experience, but told him “that was how the contract was worded” and that he shouldn’t worry, because he would pass. I have placed little weight on this evidence.

Turning to matters personal to Mr Woodbury, the union sought to rely on evidence that, once employed, he quickly obtained various certifications of competence from Barminco and was even subsequently promoted.

I accept, however, that the determination of what is a reasonable period of probation should be made on the basis of matters within the knowledge of the parties at the time the period was fixed, or matters which they should reasonably have known. Details of Mr Woodbury’s actual performance are therefore not relevant, in my view.

It would be relevant if Barminco had acted to bring Mr Woodbury’s probationary period to a premature end, but I am not satisfied that Barminco’s dealings with Mr Woodbury can bear that interpretation.

Whether a Three Month Period of Probation Was Reasonable Having Regard to the Nature and the Circumstances of Mr Woodbury’s Employment

Mr Woodbury initially suggested that a reasonable period of probation would be a month. He later revised that to suggest instead “two tours of duty” or six weeks.

Barminco submitted that there are a range of periods which would be reasonable, but that a period of three months was not unreasonable, and so was within that range.

Barminco submitted that it was impractical for a large employer to make an individual assessment of each new employee before determining in advance what period of probation they should serve. Barminco therefore required a uniform period of probation for each of its workers. Three months was, it submitted, a reasonable period to choose for application across its workforce.

However, the regulation does not require that different periods of probation be fixed for each employee; an employer can nominate whatever period it chooses. It will often be more convenient to nominate a uniform period. Similarly, the parties to an award or, where it is arbitrated, an industrial tribunal, may nominate a single period of time for the purposes of an award provision to apply across an industry.

However, regulation 30B(1)(c) will not exclude a dismissal during that period from the operation of the unlawful dismissal provisions of the Act unless the period is reasonable with respect to the individual employee concerned.

While I accept that it may sometimes be difficult to check references and work histories in the mining industry, there was no evidence to suggest that any effort was made in Mr Woodbury’s case to check his work history or contact his referees. It seems that the informal reference from an existing Barminco employee was sufficient to secure him the job. It is not reasonable, in my view, for Barminco to seek to lengthen the period during which Mr Woodbury was to be excluded from the application of the unlawful termination provisions of the Act as a substitute for any attempt to perform rudimentary recruitment procedures.

On the face of it, Mr Woodbury was a new employee with considerable experience in underground mining. If the award evinces an acceptance by the industrial parties within the WA gold mining industry of a range of periods of probation up to three months, then it seems difficult to justify the fixing of a probationary period at the top of that range for an employee of Mr Woodbury’s experience.

I accept that Barminco is concerned to maximise the quality of its long term workforce.

I also accept that an employee might reveal himself or herself to be unsatisfactory in the course of a three month probationary period, where such deficiencies would be less likely to become apparent within a shorter period. This argument would remain true whatever the probationary period selected. Deficiencies would become apparent in the course of a six month probationary period, which would be less likely to become apparent within a three month period, and so on.

In “drawing the line”, regard must be had to the mischief toward which regulation 30B(1)(c) and Section 170CC were directed.

The key provisions of the Act dealing with unlawful terminations required simply that the employer be able to show that it had a valid reason to dismiss an employee and, in some cases, that the employee be given an opportunity to defend themselves. The effect of the Act was thus to protect employees from losing their security of employment without justification. The burden placed upon the employer, where the Act was invoked, was to show the Court that the dismissal was justified.

It will sometimes be apparent to an employer within a short period that an employee is unsuitable, and should be dismissed. Regulation 30B(1)(c) recognises that in some such circumstances, where there is less reason for an employee to expect ongoing employment, the employer should not be put to the expense of having to justify the dismissal in proceedings before the Court.

Sometimes relatively intangible questions of “attitude”, “personality”, ability to “get along” or to “fit in” will contribute to an employer’s decision that an employee is unsuitable, though they may be difficult to objectively prove if the matter went to Court. Regulation 30B(1)(c) effectively enables employers greater freedom to take account of such matters when assessing new employees. However, if such problems have not manifested themselves within a short time, it is unlikely that they will would prove to be so intolerable as to justify dismissal. If they do, then the objective manifestations of the problems can be relied upon to establish a valid reason for dismissal.

Other matters raised by Barminco, such as breaching safety and maintenance procedures could also, if persistent, justify a dismissal in any event.

Thus, the application of the unlawful termination provisions of the Act to its employees does not prevent Barminco from continuing to enhance the quality of its workforce. I am satisfied that any deficiencies in Mr Woodbury’s performance and “attitude” which came to light after six weeks could have been adequately dealt with in accordance with the Act. By fixing a probation period of three months for an employee of Mr Woodbury’s apparent experience, Barminco were, in my view, seeking to exclude him from the operation of the Act for longer than was reasonable in all the circumstances.

Conclusion

Accordingly, I find that the duration of the period of probation being served by Mr Woodbury at the time of his dismissal was not reasonable, having regard to the nature and the circumstances of the employment, and will declare that Mr Woodbury is not excluded by Regulation 30B(1)(c) from the operation of Subdivisions B, C, D, and E of Division 3 of Part VIA of the Act.

I certify that this and the preceding twelve (12) pages

are a true copy of the reasons for decision of

Judicial Registrar R.D. Farrell.

Associate:

Dated:              22 January 1998

APPEARANCES

Representative for the applicant:                        Mr M. Lourey

                                                                        The Australian Workers’ Union

                                                                        West Australian Branch

Counsel appearing for the respondent:   Mr T. Retallock                       

Solicitors for the respondent:                             Wilson & Atkinson

Dates of Hearing:                                              6 June and 25 July 1997

Date of Decision:                                              22 January 1998