FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - industrial law - claim that contrary to s 298K of the Workplace Relations Act 1996 (Cth) employer terminated employment for a prohibited reason - employer carrying the burden to displace the prohibited reason - employer should call evidence first.

INDUSTRIAL LAW - employment law - termination of employment - alleged unlawful termination for a reason that included a prohibited reason - claim that employee’s membership of industrial association and shop steward activities were a substantial and operative factor - employer alleged employee dismissed for misconduct - whether employer displaced onus on it.

Workplace Relations Act 1996 (Cth) ss 298K, 298L, 298T, 298V

Johns v Gunns Ltd (1995) 60 IR 258

Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371

General Motors-Holden's Pty Ltd v Bowling (1976) 12 ALR 605

Heidt v Chrysler Australia Ltd (1975) 26 FLR 257

Kelly v Construction, Forestry, Mining and Energy Union (No 3) (1995) 63 IR 119

MARTIN HOWARTH v FRIGRITE KINGFISHER PTY LTD

VG 197 of 1998

Judicial Registrar Murphy

Melbourne

29 May 1998

THE COURT ORDERS THAT:

1.    The application is dismissed.

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

EX-TEMPORE REASONS FOR JUDGMENT

INTRODUCTION

This is an application under s 298T of the Workplace Relations Act 1996 (Cth) (“the Act”) wherein the applicant, Mr Martin Howarth, alleges that on 5 May 1998, contrary to s 298K of the Act, his employment was terminated by the respondent for reasons that included reasons prohibited under s 298L.  The prohibited reasons alleged by the applicant were his membership of an industrial association, namely the Australian Manufacturing Workers Union (“the Union”), and his industrial activities as a shop steward for the Union at the respondent's manufacturing plant at Cheltenham.

THE COURSE OF EVIDENCE

Under s 298V of the Act it is presumed, unless the respondent proves otherwise, that the dismissal was for a prohibited reason.  As the respondent thus had an immediate evidentiary onus of proof, the Court ordered it to present its case first: see Johns v Gunns Ltd (1995) 60 IR 258 and Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371.

A judge of the Court ordered that the parties exchange affidavits on which they intended to rely.  The applicant swore three affidavits in the proceeding, and also relied on two affidavits each by Mr Reginald Gregory and Mr Shane Bell, and an affidavit of Mr Stephen Reghenzani.  The deponents were not cross‑examined.

The respondent relied on two affidavits each of Mr Montague Burgess and Mr Ian Gray, and affidavits of Mr Douglas Sinclair, Mr Alexander Twaddell, Mr Michael Knight, Mr Robert Lovick, Mr Hugh Greig and Mr John Carew.  All these deponents were cross-examined.  Mr Timothy Moran, Mr Anthony Ryan, Mr Peter Watts and Ms Lynne O'Brien also swore affidavits but were not cross‑examined.

The affidavit material before the Court is substantial.  It was supplemented to an extent by the cross‑examination of the respondent's witnesses.  On numerous issues raised in the affidavits the evidence remains in conflict.  As a result of tactical decisions taken by counsel for both parties, the competing accounts passed like ships in the night.  What follows are my findings on the evidence necessary to reach a conclusion in the proceeding.

AN ABUSIVE INCIDENT BETWEEN A MANAGER AND TWO SHOP STEWARDS

The events that led to this proceeding commence just after the lunch break on 1 May 1998.  The respondent has a lunch break for its production employees between 12 noon and 12.30 pm.  A siren rings at the break, with a warning siren three minutes prior to the beginning and end of the break.  Employees who leave the site at lunchtime are expected to clock off before doing so.

On 1 May, Mr Howarth was a maintenance fitter with the respondent and he had been employed there since 1992.  Mr Howarth's account is that he stopped work at about 12.10 pm and about 12.20 pm he commenced a meeting with a former employee of the respondent, Mr Underwood.  Also present was another shop steward, Mr Reg Gregory.  The two shop stewards went past the security gate and spoke to the former employee who was in his car parked in Grange Road outside the plant. 

At around 12.35 pm Mr Greig, the Managing Director, was leaving the factory by car and he observed Messrs Howarth, Gregory and Underwood, and another employee he didn't identify, outside the plant. On his mobile phone he rang Mr Gray, the Production Manager, and asked him to investigate why two employees were late returning to work.  Mr Gray then asked Mr Lovick, the Production Manager, to accompany him to the security gate.  He testified that as a matter of course he has a supervisor or manager present when he is discussing issues with people on the shop floor.

The two left the office area and proceeded down an internal roadway towards a security gate.  They met Mr Howarth and Mr Gregory just inside the security gate, adjacent to a bend in the fence line, as the two were returning to the factory floor.  Mr Gray's account is that he approached Mr Howarth and Mr Gregory and by motioning to his watch, asked them whether they knew what time it was.  Mr Gray maintained that he received an aggressive response from both men.  Mr Howarth walked away from him.

Mr Gray asked him not to do so and received a response from Mr Gregory that, "this is intimidation".  Mr Gray sought an explanation as to why the two were late and received a number of replies including "union business" and that Mr Howarth commenced lunch ten minutes late.  Mr Gray felt he was being berated by these responses and asked the men if they had clocked off.  Mr Howarth replied that they didn't need to because they hadn't left the premises.  Mr Gray advised them that their pay would be docked.

At this point Mr Howarth was “chesting” Mr Gray.  Mr Gray then proceeded up the roadway towards the path to the reception area, with the abuse continuing.  At the intersection of the roadway and the path to the reception there was a further incident.  Mr Howarth made a reference to “a puppy dog”, which Mr Gray took as a reference to Mr Lovick.  He turned to Mr Howarth and told Mr Howarth that he would not tolerate any more abuse and that he was on a warning.  At this point Mr Howarth stepped right up to Mr Gray and invited Mr Gray to “have a go” at him.  Mr Lovick intervened to separate the two and Mr Gray proceeded into the reception where he spoke to Mr Burgess. In a statement an eyewitness, Mr Knight, records that he believed that Mr Howarth appeared on the verge of physical violence at this point.  Mr Lovick testified that he thought there would be a head butt.

Mr Howarth and Mr Gregory gave an account totally contrary to that of Mr Gray and the other eyewitnesses.  In particular, Mr Howarth asserted that Mr Gray was aggressively confronting the two men about the timing of their return to work, and refused to accept the explanation they proffered.  Mr Gray is alleged to have spoken in a threatening voice, to have “chested” Mr Howarth, to have screamed at him, and to have attempted to provoke Mr Howarth into hitting him.

In his statement made on 4 May, Mr Howarth said that outside the reception area he "was by then stewed up" and "had obviously been provoked by Mr Gray's previous actions". At para 38(b) of his affidavit sworn 19 May 1998 he deposes that after the first exchange "the situation became more heated with an angry exchange" between the two of them. At para 39 he denies the allegations of "offensive, threatening or intimidating language" made in the statements by the participants and eyewitnesses, Messrs Gray, Lovick, Sinclair, Knight and Burgess. 

Mr Lovick was extensively cross-examined.  He shifted slightly from the statement about the incident that he had prepared on the day.  He conceded that "voices were raised on both sides".  He said that there was "a little bit of anger" and a degree of hostility on both sides.  Mr Lovick maintained that Mr Howarth was more of the aggressor and that Mr Gray was responding to abuse.

The exchanges between Mr Howarth, Mr Gregory, Mr Gray and Mr Lovick were observed by Messrs Sinclair and Knight.  Both independently prepared statements corroborating the accounts of Mr Gray and Mr Lovick.  These accounts remained essentially undamaged by cross‑examination.

SUBSEQUENT EVENTS AND TERMINATION

After the intervention by Mr Lovick at the intersection of the roadway and the pedestrian path, Mr Gray proceeded to the office where he spoke to Mr Burgess, who was the Human Resources Manager.  Mr Burgess emerged and told Mr Howarth that he was on a warning.  At that point Mr Howarth was "flushed, angry and acting very belligerently".  According to Mr Burgess, at that point Mr Gray did nothing other than watch the proceedings.

Ms O'Brien, in her affidavit sworn 22 May, deposes that she was the receptionist inside the building and heard the applicant shouting so loudly that she temporarily blocked incoming calls.

Later that afternoon the applicant was suspended.  He was advised in a letter of that date that he had acted in a grossly offensive manner towards Mr Gray and that this may constitute a gross misconduct.  He was invited to provide an explanation.  The witnesses were asked to prepare statements.

On 4 May the respondent wrote to Mr Howarth enclosing the signed statements and invited him to respond at a meeting the following day.  On 4 May statements made by Mr Howarth and Mr Gregory were sent to the respondent.  On 5 May there was a meeting at the premises.  It was attended by the applicant and two other shop stewards, Messrs Bell and Gregory, and two officials of the Union, Mr John Speight and Mr Dennis Vanderhyde.

Present for the respondent was Mr Carew, the Finance Director, Mr Burgess, the Human Resources Manager, and Mr Twaddell, the Health and Safety and Training Manager.  The minutes record that Mr Burgess told Mr Speight that the respondent had received the statements from Mr Howarth and Mr Gregory.  The minutes record this exchange:

“[MR SPEIGHT]:   Monty, how do you intend to deal with this matter today?

[MR BURGESS]:     We will take this through the disputes procedure.  Martin [Howarth] has been asked to detail the events of Friday 1st May.  In the meantime, considering the serious nature of this Martin has been suspended with pay.

[MR SPEIGHT]:     This company must have considered what the final outcome of this may lead to.

[MR BURGESS]:     Yes, we have considered.

[MR SPEIGHT]:     Is this a summary offence?

[MR BURGESS]:   In the absence of any explanations it is pointing towards that.

[MR SPEIGHT]:     We may seek to take this away to another area.  Martin is not going to prejudice his case here this morning.  In view of the highly serious nature of this we may need to consider where we go.  It may affect the future process.

[MR VANDERHYDE]:   Martin has already given a statement.

[MR BURGESS]:     Are you relying on that?

[MR SPEIGHT]:     Yes, that's right.  This is serious.  If not, the smear on this man's character will stay forever and you will then be dealing with a much bigger problem.  I think you will need to justify your actions.  I am suggesting that there may be a breakdown on both sides.  If we proceed as you are suggesting it will take us into other areas such as our rights under the award.

                                 Do you want to reconsider? 

                                 We will be hunting down the witnesses if any of this proves to be untrue or if they are not sure, any inaccuracies or areas of inconsistency.

[MR BURGESS]:   We will consider and be back in about 30 minutes...”

The meeting adjourned and Messrs Greig, Carew and Burgess considered the matters raised in the various statements.  They reached the unanimous conclusion that Mr Howarth was guilty of an act of serious misconduct and should be summarily dismissed.

Mr Burgess annexed to his affidavit (Exhibit “MB1”) a code of conduct of the respondent which states:

“Personal Conduct

All employees will conduct themselves while on site in a courteous and professional manner at all times.  Shouting, abuse, threats, physical or unruly behaviour will not be tolerated and appropriate disciplinary action will be taken against any person violating acceptable levels of behaviour.”

At 11.00 am the meeting was reconvened.  The applicant was advised of the decision and handed a letter containing his final entitlements. 

THE APPLICANT'S UNION ACTIVITIES

There was a volume of affidavit evidence as to the applicant's activities as a shop steward for the Union.  It was common ground that he was a member of a number of workplace committees and robustly pursued what he saw as being the best interests of the employees and other members of the Union.  It was the applicant's account that in the course of his vigorous pursuit of his shop steward duties he had crossed swords with Mr Gray on a number of occasions, and a number of incidents indicated that both Mr Gray and Mr Burgess were antagonistic towards him.  These incidents included an incident in March 1997 that resulted in a first and final warning to the applicant for swearing at Mr Gray; an incident in March 1998 when Mr Gray had taken a notice from Mr Howarth about a stop-work meeting; an incident in February 1998 regarding the completion of time cards; and a continuing dispute over the use of company and Union noticeboards.

Mr Gray in his affidavits generally disputed Mr Howarth's account of these incidents and maintained that position under cross‑examination.  It is unnecessary at this point to resolve the wide range of evidentiary conflicts over the various incidents.  It is sufficient for present purposes to find that the factory here was not an industrial rose garden.  For example, the applicant would from time to time require Mr Gray to give him an instruction in writing.  Mr Gray admitted that on one occasion he was angry with the applicant and snatched the notice from his hand.

THE COMPETING CONTENTIONS 

After this brief review of the evidence I turn to competing contentions that lie at the heart of the proceeding.  Mr Howarth's contention is that his Union membership and activities were, applying the reasoning in General Motors-Holden's Pty Ltd v Bowling (1976) 12 ALR 605, a “substantial and operative factor” in the decision to dismiss him.  Counsel for the applicant submitted that Mr Gray was the aggressor in the incident and that the whole manner and circumstance of the confrontation was redolent of Mr Howarth's, and to a lesser extent, Mr Gregory's Union activity.

Further, it was submitted that Mr Howarth's response to provocation, if that provocation had its roots in his Union activity, impermissibly coloured the dismissal.  Reference was made to the concession by Mr Burgess in cross‑examination that what he heard in the reception area would not justify summary dismissal.  It was also submitted that the statements made by Mr Gray and the other eyewitnesses fed an untrue position to the executives of the respondent who made the decision to dismiss the applicant. 

Counsel for the applicant referred to the presumption in s 298V of the Act and submitted that to the extent that the respondent had not sought to challenge the account led on behalf of the applicant, it had failed to discharge the onus on it.  Counsel invited the Court to conclude from all the circumstances that a prohibited reason was a substantial and operative factor and that the respondent had not discharged its onus of proof to negative such a reason.

Senior counsel for the respondent submitted that the respondent had discharged the onus on it.  He invited the Court to accept the respondent's witnesses where there was conflict and to accept the denials of the respondent's witnesses that the applicant's Union activities were a reason for the dismissal.

RELEVANT AUTHORITIES

The proper approach to provisions such as ss 298K and 298V has been considered in a number of authorities on earlier and analogous provisions.  Essentially the respondent must prove a negative, that the prohibited reason was not a substantial and operative factor in its decision.  In Heidt v Chrysler Australia Ltd (1975) 26 FLR 257, at 268 Northrop J said:

“The provisions  of s 5(4) of the Act [a provision analagous to s 298V of the Act] casts an onus of disproving facts, namely, that the reason for the defendant's action was not actuated by the reason alleged in the charge.  It has been held that a defendant need not prove the reason why he dismissed an employee [citation omitted].  The mere proof of a reason for dismissal, other than the reason alleged in the charge, does not necessarily negate the reason alleged in the charge.  A mere denial of the reason alleged in the charge may not be sufficient to satisfy the onus cast upon the defendant.  All the facts and circumstances leading up to the dismissal must be considered, including any reason expressed at the time of the dismissal, as well as any denial of the reason alleged in the charge.”

That decision was applied in Johns v Gunns (above).  In Kelly v Construction, Forestry, Mining and Energy Union (No 3) (1995) 63 IR 119, at 126 Moore J applied these comments of Mason J in Bowling (12 ALR at 617):

“Section 5(4) imposed the onus on the appellant of establishing affirmatively that it was not actuated by the reason alleged in the charge.  The consequence was that the respondent, in order to succeed, was not bound to adduce evidence that the appellant was actuated by that reason, a matter peculiarly within the knowledge of the appellant.  The respondent was entitled to succeed if the evidence was consistent with the hypothesis that the appellant was so actuated and that hypothesis was not displaced by the appellant.”

I intend to follow the approach in these two cases. 

HAS THE RESPONDENT DISCHARGED ITS ONUS? 

It is now necessary to make some findings as to the reason or reasons that led to the dismissal of Mr Howarth.  I commence with the incident on 1 May.  The Court has had the opportunity to hear from the four principal witnesses of the respondent who were present on that day.  Against their evidence are the affidavits of Mr Howarth and Mr Gregory, and the two statements made by them on 4 May.  As I previously indicated, there is a stark contrast in the versions, and the account of the respondent recorded on the day of the incident remained substantially intact after cross‑examination, or, in a number of respects, was not subject to challenge in cross‑examination.

It is the inescapable duty of the Court in the face of this conflict to choose one or other of the versions of events.  In the face of such a conflict the Court closely examines contemporaneous accounts and the motivations of the witnesses.  The written statements of Messrs Gray, Lovick, Knight and Sinclair were prepared on 1 May, are detailed, and do not appear to have been the result of collaboration.  It was suggested only to Mr Gray that he had an animus or antagonism against Mr Howarth that would lead him to be the aggressor in the incident.  Mr Gray denied this and in particular denied that he was motivated “to nail” Mr Howarth and Mr Gregory on that day.

Mr Gray's account, although challenged in cross‑examination, was in a number of respects corroborated by the respondent's other witnesses.  Mr Burgess and Mr Lovick corroborated aspects of Mr Gray's account of his earlier dealings with Mr Howarth.  This consistent and comprehensive support for Mr Gray's account must be weighed against the contrary account of Mr Howarth and Mr Gregory.  Their account is much less detailed and on numerous points directly contradicted by the respondent's witnesses.  One example where the applicant's account is difficult to accept is on the question of abusive language that day.  The applicant denied any such language occurred in the incident on 1 May.  This is contrary to the evidence of all the respondent's witnesses who were present.  I am unable to accept that the respondent's witnesses have fabricated this aspect of their account and it casts grave doubt on the acceptability of the account of Mr Howarth and Mr Gregory.

Having observed the respondent's witnesses, weighed the competing affidavits and considered the inherent likelihood of what occurred, on the competing accounts I accept the version propounded by Mr Gray and Mr Lovick and supported by the other witnesses.  I am satisfied that Mr Howarth acted aggressively and abusively when he was asked by Mr Gray his reason for being late and the incident developed from there.  The five statements that the respondent considered before dismissing the applicant were an accurate account of the incident.  The respondent's acceptance of those statements involved a rejection of the contrary accounts proffered by Mr Howarth and Mr Gregory.  I too reject their accounts in the face of the sheer weight of evidence to the contrary. 

The circumstances leading to the incident are also relevant to determining whether the respondent was or was not motivated in its decision by the applicant's Union activity.  I accept the evidence of Mr Greig that it was not the applicant's status as a shop steward that prompted him to ask Mr Gray to investigate why three employees were outside. Rather, it was the fact that Messrs Howarth, Gregory and another employee were outside the plant five minutes after the end of the lunch break.  Even if it was their shop steward status that excited Mr Greig's interest, which I reject, it is drawing a very long bow to suggest that this then prompted Mr Gray to confront Mr Howarth and Mr Gregory in order to provoke them and maximise the chance of creating a pretext for the dismissal of Mr Howarth.

I find that the more likely scenario is that Mr Gray acted on the request from his Managing Director and, in accordance with the practice he had adopted as a result of his past dealings with Mr Howarth, took Mr Lovick with him to check the matter out.  He then did so in a manner that was not confrontational or aggressive.  He was met with that response.  The response he received was consistent with the aggressive response that he had received in the past when dealing with Mr Howarth.

I turn now to consider the denials of the relevant decision-makers of the respondent that the applicant's Union activities were a factor.  In one sense their affidavits, not the subject of challenge on this point, are self-serving and couched in identical language.  On the other hand, it was not put to either Mr Greig or Mr Carew that the applicant's Union activities had been such a concern to them personally that it must have been a consideration in their decision, such that their denials were not to be accepted by the Court.

Similarly, Mr Burgess was not tested as to his role in the decision-making of the respondent.  The one matter that was raised was the status of a first and final warning issued to the applicant on 4 March 1997.  Mr Burgess denied that this was taken into account.  I accept his denial on this point.  I also accept his evidence that the applicant refused to cooperate in the process associated with that warning. 

In weighing the denials of the respondent's witnesses it is also significant that Mr Gray, the main person who Mr Howarth alleged held an animus against him as a result of his Union activities, was not, on the evidence, a relevant decision‑maker.  An additional factor that I give weight to is that it was not suggested by counsel for the applicant that the material before the respondent's decision‑makers did not, on its face, constitute a basis for the conclusion that the respondent reached.  In other words, the respondent had a more than adequate basis to move against Mr Howarth.  It did so after affording him an opportunity to respond and in the face of an intimation by the Union that industrial consequences would follow.

This is relevant to the cogency of the denial by Mr Greig that the applicant's involvement with the aggrieved former employee, Mr Underwood, was not relevant to his decision to ask Mr Gray to see why the three employees were outside the gate when they should have been at work.  The events on the roadway adjacent to the reception area are of a different character, and remote from both Mr Howarth's involvement with Mr Underwood, and Mr Howarth's timeliness.

Another matter raised on the evidence was the applicant's role in the upcoming enterprise agreement negotiations.  I accept that the applicant had raised various matters with Mr Gray that he intended to raise during negotiations, but the evidence does not support a finding that removing the applicant from the scene at that time, well before the negotiations were due to commence and the agreement due to expire, entered the decision‑making processes of the respondent.  As I stated earlier, Mr Gray was not a decision‑maker in the dismissal and his account on which the actual decision‑makers relied was a fair account of what ensued that day.

CONCLUSION

To resolve this proceeding it is unnecessary to resolve other evidentiary conflicts about the applicant's work history with the respondent and the numerous incidents involving him, Mr Bell, Mr Gregory and the respondent's management.  The respondent must negative the hypothesis that a prohibited reason was a substantial and operative factor in its reason for dismissing the applicant.  I accept the respondent's evidence that it was the misconduct of the applicant on 1 May that was the reason for his dismissal.  That was the reason proffered at the time and that, I am satisfied, was the operative reason for the decision. The events leading to the decision and the incident itself were not prompted or motivated by the applicant's Union activities.  I accept the denials of the respondent's decision‑makers that the applicant's Union activities did not figure in the decision to dismiss him.  The respondent, on the balance of probabilities, has displaced the hypothesis raised by the applicant, namely that the respondent's Union activities were an operative factor. Looking at all the facts and circumstances here, the respondent has discharged its burden of proof that a reason prohibited under s 298L was not a reason for the applicant’s dismissal. I propose to dismiss the application.

ORDER

1.    The application is dismissed.

Associate:

Dated:              29 May 1998