FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW – PROBATIONARY EMPLOYEE – whether employee a “probationary employee” within the meaning of Reg 30B(1)(c) of the (former) Industrial Relations Regulations and thus excluded from the operation of Division 3 Part VIA Industrial Relations Act 1988 (Cth) – whether period of probation reasonable.

Industrial Relations Act 1988 (Cth), s 170CC

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

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

Ryan v Furneys Stockfeeds Ltd (1996) 66 IR 298 considered

BARRY KEITH WOODBURY v BARMINCO PTY LTD

No WI 1045 of 1997

CARR J

PERTH

25 SEPTEMBER 1998

THE COURT ORDERS AND DECLARES THAT:

1.                  The orders of the Judicial Registrar made on 22 January 1998 be set aside.

2.                  The applicant is 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 Industrial Relations Act 1988.

3.                  The application be dismissed.

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

REASONS FOR JUDGMENT

This is an application by the respondent employer under s 18AC of the Federal Court of Australia Act 1976 (Cth) to review a decision of a Judicial Registrar.  The Judicial Registrar decided, as a preliminary issue in an application under s 170EA of the then Industrial Relations Act 1988 (Cth), that the applicant was not excluded by Regulation 30B(1)(c) of the Industrial Relations Regulations from the operation of the unlawful dismissal provisions of that Act.  The short question is whether, at the time when his employment was terminated, the applicant was serving a period of probation which was reasonable, having regard to the nature and the circumstances of that employment?  The Judicial Registrar, for reasons published on 22 January 1998, held that the duration of the probation (three months) was not reasonable and so declared.  By consent, the matter proceeded before me on the basis of the evidence adduced before the Judicial Registrar.  There were no significant credibility issues.

Factual Background

The respondent, Barminco Pty Ltd (“Barminco”) is a mining contractor which supplies a contract workforce to various mines owned by its customers.  Barminco also makes available its mining plant and equipment, operated by its employees, for the purpose of carrying out such contracts.  On 4 September 1996 the respondent offered the applicant, Mr Barry Keith Woodbury, employment as a dump truck driver at a mine known as “Daveyhurst”.  The offer was contained in a letter of that date which, upon the applicant signing a note of acceptance (endorsed at the foot of the letter), evidenced the terms of such employment.  The first of such terms was as follows:

“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 applicant’s employment was terminated on 10 October 1996, i.e. about five weeks later.

Mr Woodbury’s work involved driving a dump truck down a decline into the mine where the truck was loaded (depending upon the task in hand) either with ore or mallock.  He was then required to drive the dump truck back to the surface and deposit the load at designated places at the mine site.  The distance of the round trip was between eight and ten kilometres.  The applicant was also required, to some extent, to make sure that the dump truck was kept in good order and condition.

The Legislation

Section 170CC of the Industrial Relations Act 1988 provided that, subject to certain conditions not here relevant, the regulations might exclude specified employees from the operation of specified provisions of Division 3 of Part VIA of that Act.  Division 3 is headed “Termination of Employment”.  Regulation 30B(1)(c), relevantly provided 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 …”

was excluded from the operation of Subdivisions B, C, D and E of Division 3 of Part VIA of the Act.  Subdivisions B and C deal respectively with requirements for lawful termination and remedies for wrongful termination of employment.

It was common ground that, by reason of the transitional provisions of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) (“the Amendment Act”), the relevant statutory and regulatory provisions applicable to the termination of the applicant’s employment were those in force prior to the proclamation of the Amendment Act.  This was because the termination occurred before that date.

There was no issue that the three month period of probation had been determined in advance.  The sole issue at this stage of the proceedings is whether that period was reasonable having regard to the nature and the circumstances of the employment.

Applicant’s Contentions

Mr Woodbury’s contentions can be summarised as follows.  First, he pointed to the fact that, at the time when he was engaged by Barminco, he had considerable experience in the mining industry including some eight years experience in underground mining which included work of the type for which he was engaged.  Secondly, it was relevant to the length of the probationary period that the terms of employment required him to work twelve hour shifts, seven days per week for two weeks followed by seven days of leave.  This, so the applicant contended, was the equivalent of four months probation relative to what he described as “ordinary employment”.  The applicant contended that the objective of probation was to assess his suitability for continued employment.  His evidence was to the effect that in the intensified atmosphere of underground mining where work skills, appropriate safety practices, stability and dependability were all required, it became apparent very quickly whether a worker was going to “make the grade”.  Often fellow workers would immediately identify whether a particular person ought to be removed from the underground environment, whether on safety or economic grounds (the performance of each shift team affected the rate of remuneration).  The applicant contended that, although the work required:

·          certain levels of skill;

·          knowledge of the particular operational procedures of the mine (especially in terms of adherence to good safety practice); and

·          concentration;

essentially the work itself was repetitive.  Mr M J Lourey, who appeared for Mr Woodbury, conceded that a three months probation period might be reasonable for someone with very little experience, whether in mining or underground mining.  But, so he submitted, it was not reasonable to adopt the same period for Mr Woodbury when regard was had to his relevant experience.  This experience was sufficient to qualify him, subject to passing examinations, as a shift boss.  Mr Lourey submitted that the termination provisions of the Act were beneficial provisions for employees and that, generally, employees should be entitled to the protections thereby provided.  The purpose of Regulation 30B was to remove the statutory protection of employees where it would be apparent within a relatively short time that continuation of a particular employment was not viable.  The regulation provided an “amnesty” to employers who terminated an employment in “those genuine circumstances”.  The exclusion from the benefit of those provisions should not, so it was put, be extended to the present situation.  Mr Lourey submitted that, on all of the evidence, four months (on his calculations) was an unreasonable period of probation in which to assess the applicant’s suitability for continued employment.  He contended that the objective of probation was not so much as a test to provide an employer with ideal employees but as a device

“… to identify those who, even with appropriate encouragement, should not have been employed at all.” 

The applicant contended that even if it might take longer than three months for anti-social problems to emerge in individuals, it was not a “prime purpose” of probation to detect such tendencies.

The Respondent’s Contentions

The respondent submitted that a “reasonable” period does not have to be a perfect or ideal period.  There would, so it was put, be a degree of uncertainty because the period had to be fixed in advance.  In those circumstances, the respondent argued that there would be a range of periods which fell within the category of being “reasonable”, in the sense of being not excessive or not unreasonable.  The respondent contended that three months was not unreasonable in terms of the time required to make a fair assessment of the applicant as an employee.  The respondent relied on the evidence of Mr Reg (his full first name as officially registered) Alfred Miller.  Mr Miller is the respondent’s Human Resources Manager.  Although he was not so employed at the time when the applicant started work for the respondent, Mr Miller has approximately 36 years experience as a Human Resources Manager in the mining, oil and gas industry.  Mr Miller’s evidence was that periods of probationary employment were common throughout the mining industry and generally a period of three months was adopted as a standard period.  The respondent, so Mr Miller deposed, had a standard three months probationary period for all employees.  He annexed to his affidavit the conditions of employment applicable to two particular employees.  One of those was a Mr David Wilkie who was appointed to the position of Project Manager on 4 March 1997.  The other was Mr J W Penman who was appointed as a Shift Boss.  The evidence shows that Mr Wilkie’s employment was subject to a probationary period of a maximum of three months.  The relevant condition in his contract shows that the respondent might assess his suitability for permanent employment before the expiry of three months.  Mr Penman’s employment was as a Shift Boss and, in my view, more closely approximates (although senior to) the applicant’s position.  It is quite clear that Mr Penman was required to undergo a three months probationary period. 

The respondent referred to the award which applied to the applicant’s employment.  That was the A.W.U. Gold (Mining and Processing) Award 1993.  Clause 5(1)(e) of that award provided 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 period for a defined period, not in excess of three months.”

The respondent contended that, although the award provision was not conclusive as to what was reasonable, it provided a strong indication as to what is considered to be reasonable in the industry.  The respondent argued that by reason of the roster arrangements, in real terms the probationary period was in effect only two working months.  In response to the applicant’s calculations, the respondent pointed out that it was not a matter of assessing a normal employee in a 9 am to 5 pm office job.  The respondent was in a position where it wanted to assess someone who was required to work seven shifts a week on a two week on, one week off roster i.e. in the particular working environment in which the applicant was engaged.  The respondent referred to the fact that the applicant was highly paid (approximately $58,000 to $60,000 per year), was required to work long hours and to use and maintain dump trucks which the evidence showed were worth between $200,000 and $300,000.  Damage to such machinery would also result in further costs by affecting the performance of the respondent’s contracts.  The respondent contended that its “product is its workforce”.  Mr Miller had given evidence that any deficiencies in its workforce reflected badly upon it in terms of its reputation with its clients.  Mr Miller’s evidence was that the applicant had a very unstable work history.  As he put it, the applicant “flits from job to job”.  Mr Retallack, counsel for Barminco, submitted that this was an indicator of difficulties in prior employment which entitled the respondent to a longer period of probation in which to assess the applicant in respect of other matters in addition to his operational proficiency.  These included what the respondent described as “less immediately apparent, but equally important, work characteristics” such as:

·          attitude to mine safety and procedures;

·          reliability and work attitude;

·          ability to work as part of a production team; and

·          attitude to job safety and maintenance of equipment

The respondent also relied on the fact that the Daveyhurst mine was at a remote location.  Its employees were obliged to live in camp accommodation belonging to the mine owner and shared with its employees.  In those circumstances, the behaviour and the conduct of the respondent’s employees whilst off duty but in camp was important to the respondent in terms of its reputation and thereby its ability to maintain existing contracts and win new business.  It submitted that a period of three months probation was fair and reasonable in order to enable the respondent to assess the applicant’s capacity to function in the camp environment and to “fit in” with its other existing staff and the mine owner’s employees.  In terms of reasonableness to the applicant, the respondent submitted that it would not be fair to assess his capabilities at the expiration of a lesser period.  The respondent relied on evidence from the applicant that, if the respondent had been dissatisfied with his performance, he would expect to have been given a chance to improve.  The respondent submitted that a period of three months probation provided an opportunity for that. 

The respondent also pointed to evidence that its truck drivers were not directly supervised in the performance of their duties on a continuous basis.  Such performance was the individual truck driver’s responsibility, subject to supervision from time to time.  In the absence of direct supervision, the respondent argued that it took some time for it fairly to assess a driver’s attitude and performance.  There was more to being a good truck driver than simply having had experience in driving and operating a truck.  The respondent also relied on its obligations at common law and under Occupational Health and Safety legislation to provide a safe work environment to all employees.  This included assessing and selecting safety-conscious employees.  It was entitled to three months, so it submitted, to allow potential employees to settle in to the employment situation and truly demonstrate their attitude to, and compliance with safety and maintenance issues.  This was particularly relevant in the context of the recent history of public concerns about safety in the mining industry in Western Australia. 

I derived considerable assistance in respect of the approach which I took in deciding this matter from the following observations made by Wilcox J in Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233 at 242:

“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.  See s 170CD of the Act.”

Beazley J referred to the above passage in her reasons for judgment in Ryan v Furneys Stockfeeds Ltd (1996) 66 IR 298.  In that case, Mr Ryan had been employed as a “loader, unloader … carter, cleaner”.  Her Honour (at 303) said:

“Although there was little evidence on the nature of the work performed by the applicant, I am satisfied that it was work of a repetitive nature involving little skill.  However, 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.  . . . [T]here 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 three months is reasonable.”

Mr Woodbury’s evidence was to the effect that in the course of his experience in the mining industry he had not encountered the imposition of a probationary period.  He had queried Clause 1 (see above) when handed the respondent’s letter offering him employment.  However, Mr Woodbury acknowledged that he had heard of probation before, though it was not a common thing (see p 34 of the transcript).  I think that can be reconciled with Mr Miller’s evidence about the practice in the industry, which is summarised above, on the basis that he (Mr Miller) was by virtue of the nature of his work and his far more extensive experience in a better position than Mr Woodbury to give evidence of industry practice.  I accept the evidence of both witnesses and so reconcile that evidence on that basis and also on the basis that Mr Woodbury may not have bothered to pay such particular attention to the matter of probation.  I do not regard industry practice, or any other relevant factor for that matter, as being determinative of whether three months probation is a reasonable period but I consider that it is part of “the circumstances of” the employment to which I may have some regard, and I do so.  The same applies to the relevant clause of the award (set out above).  As Mr Lourey pointed out, I note that the period of three months probation is expressed in the award as a maximum. 

I think that there is some merit in those arguments, advanced on behalf of Mr Woodbury, which focussed on his personal experience in the industry and the likelihood that an assessment of his technical ability to carry out his duties could be done in a very short time.  I accept most of those submissions and take them into account.  On the other hand, in my view, I should also take into account (and I do) the matters which were particular to Barminco by virtue of the very nature of its business.  I refer to the importance to Barminco, vis a vis its customers, of having high quality employees who conduct themselves appropriately both at a mine site and in camp.  I accept Barminco’s submissions to that effect, which I have summarised above.  To the extent that it was submitted on behalf of Mr Woodbury that this was a management problem and not an appropriate factor capable of assisting to justify the probation period as being reasonable, I reject those submissions.  Furthermore, I accept that, given that the probation period has to be fixed in advance, there are some difficulties in calculating what is likely to be a reasonable probation period for a particular employee.  I accept also that:

·          safety factors are of particular importance in the underground mining industry, both in relation to human life and limb and in the potential for substantial economic loss if valuable equipment (in this case the dump truck) is damaged or mining operations are hindered by accidents; and

·          the longer the period of probation the more likely it is that behavioural problems will come to light (this was referred to as “the honeymoon factor”), but a line has to be drawn somewhere to separate a reasonable period from an unreasonable period.

I have considered the respective arguments concerning the significance or otherwise of the two weeks of twelve shifts plus one week leave cycle.  I have set out above the respective calculations ranging from 2 months to 4 months.  I consider that there is some merit in both points of view, but on balance I am inclined to the view that the period in this matter should be regarded as being an elapsed period of three months being three months of what are fairly intensive work cycles.  I make my assessment on that basis. 

My conclusion is that, by adopting a standard three-month probationary period, Barminco was running the risk of that being unreasonable when regard is had to the nature and the circumstances of Mr Woodbury’s employment.  I think that in his case they went close to imposing an unreasonably long period.  However, after weighing the various factors on either side of the question (which I have summarised above), I have come to the conclusion that the probationary period of three months in this matter was reasonable having regard to the nature and the circumstances of Mr Woodbury’s employment.  I think that reasonableness in this context is not a matter of precision.  There will usually be a range in which various periods can fairly held to be reasonable.  I think that the period applied to Mr Woodbury fell within that range – albeit towards the higher end of the range.  There will be an order and declaration accordingly.

Associate:

Dated:              25 September 1998