[2008] AIRCFB 15 |
PR980356
|
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.120 - Appeal against the order [PR978080] issued on 29 August 2007
by Senior Deputy President Hamberger
Appeal by Telstra Corporation Limited
(C2007/3458)
s.643 application for relief in respect of termination of employment
Carlie Streeter
and
Telstra Corporation Limited
(U2007/3324)
SENIOR DEPUTY PRESIDENT ACTON
|
MELBOURNE, 24 JANUARY 2008 |
Appeal – termination of employment.
DECISION OF SENIOR DEPUTY PRESIDENT ACTON AND
SENIOR DEPUTY PRESIDENT CARTWRIGHT
Introduction
[1] This matter concerns an appeal, for which leave is required, by Telstra Corporation Limited (Telstra) against an order 1 made by Senior Deputy President Hamberger on 29 August 2007.
[2] Senior Deputy President Hamberger’s order followed a decision 2 by his Honour on an application by Ms Carlie Streeter to the Commission for relief in respect of the termination of her employment by Telstra. In her application, Ms Streeter alleged the termination of her employment was harsh, unjust or unreasonable.
[3] His Honour’s order provided for Ms Streeter to be reinstated to a Telstra retail store as close to Miranda in New South Wales as practicable. The order also provided for Ms Streeter to be reinstated to a similar position to the one she held immediately prior to the termination of her employment by Telstra and on no less favourable terms. Further, the order provided for Ms Streeter to be paid an amount in respect of the remuneration lost by her because of the termination and for her service with Telstra to be treated as continuous for the purpose of leave accrual.
Circumstances Surrounding the Termination
[4] The circumstances surrounding the termination of Ms Streeter’s employment by Telstra, in summary, are these:
(1) On the evening of 24 February 2007, a function being a combined late Christmas party and a farewell party for the Manager of the Miranda store of Telstra was held.
(2) Telstra contributed $25.00 per head towards the costs of the function.
(3) The function was largely organised by another Miranda store employee of Telstra (hereafter referred to as the “first employee”), a female, not Ms Streeter.
(4) The function was held at a restaurant, at which the cousin of the first employee was the Head Chef.
(5) Prior to the function many of the Miranda store employees went to a hotel (hereinafter referred to as “Hotel A”) for pre-dinner drinks.
(6) The first employee and three other Miranda store employees (hereinafter referred to as the “second employee”, “third employee” and “fourth employee”), but not Ms Streeter, booked a room at another hotel (hereinafter referred to as “Hotel B”). Hotel B was close to Hotel A and the restaurant, and the room was booked for them to stay at on 24-25 February 2007. The second employee and third employee are females. The fourth employee is male.
(7) On 24 February 2007, the first employee checked into Hotel B at around 3.00 p.m. Then she went out to have her cosmetics done. She returned to Hotel B at around 5.00 p.m. By that stage the second employee, third employee and fourth employee, as well as another employee, were all in the room at Hotel B.
(8) Sometime later they all went from Hotel B to Hotel A.
(9) The first employee then left Hotel A early to return to Hotel B and change her clothes. She subsequently went to the restaurant.
(10) At the restaurant, a Telstra employee from another area of Telstra, who had joined the function and who was intoxicated, vomited within the view of other patrons in the restaurant, a considerable amount of alcohol was consumed by other employees, some employees did not eat the food, the first employee ordered two cakes from the restaurant but no one ate them and the first employee and a few others had to make up a shortfall between, on the one hand, the monies those attending the function had paid and the Telstra contribution and, on the other hand, the value of the restaurant bill.
(11) After the function, the first employee returned to Hotel B to go to bed. Some other employees went back to Hotel A.
(12) When the first employee arrived at the room at Hotel B, there was already numerous other employees there. Nonetheless, she went to bed. The other employees subsequently left. Then the second employee and third employee returned to the room at Hotel B and went to sleep.
(13) Subsequently, the fourth employee returned to the room at Hotel B with others, including Ms Streeter.
(14) During the course of the night in the room in Hotel B, Ms Streeter was involved in rowdy behaviour, bathed with both the fourth employee and another employee, stood by in the bathroom with a towel around her naked body while the first employee went to the toilet and then, while the first employee was still there, dropped her towel to get back in to bathe with the fourth employee and the other employee, and had sexual intercourse with the fourth employee within the view and/or earshot of the first employee, second employee and third employee.
(15) On 25 February 2007, the first employee rang the then Acting Manager of Telstra’s Miranda store. She was hysterical. 3 She told him about Ms Streeter’s activities in the room at Hotel B. The Acting Manager subsequently spoke to the second employee. She was very quiet. She told him “it was all messed up”.4 The second employee was scheduled to work at Telstra that day but was not able to do so as she was crying and hyperventilating. He also spoke to the third employee who was equally distressed and disgusted about the activities.5
(16) On 26 or 27 February 2007, employees associated with the events of 24-25 February 2007 were suspended from duty by Telstra.
(17) On 28 February 2007, Telstra interviewed the first employee, second employee, third employee and Ms Streeter.
(18) At the Telstra interview on 28 February 2007, the first employee explained what had gone on on 24-25 February 2007. In response to a question about whether she had spoken to any of the people who were at Hotel B since she had left it, the first employee said:
“I saw [Ms Streeter] at work. I didn’t really speak to her. [The fourth employee] called and spoke to [Ms Streeter], and then said to her he wanted to speak to me. I told Ms Streeter I don’t want to speak to him [Monday at work], she though [sic] it was humorous. She left at 5 and said goodbye. I just ignored her. I am repulsed by her.” 6
The first employee also said that, while she had to work with Ms Streeter, she did not want to be expected to talk to her.
(19) In her evidence to the Commission, the first employee said:
“55. I have, since the Christmas party, felt very guilty and ashamed about what occurred. I feel that, as the oldest of the three girls who had to watch what occurred, I was the one who should have said something and told Carlie and the others to stop. I didn’t feel at the time that I could. Nevertheless, I feel very guilty that I didn’t try to stop what we saw. Overall, I wish the whole thing never happened, but it did. If only I had been able to overcome my shame and embarrassment and told them to leave when I went to the toilet, maybe those involved would have been able to hold some dignity and we would not have had to endure the filth we did.” 7
(20) At the Telstra interview on 28 February 2007, the second employee said in response to a question about how people presented on the morning of 25 February 2007:
“I was pretty angry, I didn’t say anything because I don’t know them. I felt really disrespected … They seriously think they can do that sort of thing in front of people. I’ve never been exposed to that sort of thing. A quote from [the first employee] ‘if she wanted to watch porn she would have gone to the video store and got it out.’
I do not have one friend that would ever do that to me, even just by me saying can you please be quite [sic] cause I have work tomorrow they respect that I’m trying to do the responsible thing.” 8
(21) At the Telstra interview on 28 February 2007, the third employee said she was “blown out” that Ms Streeter “could have so little dignity in front of other people.” 9
(22) At the Telstra interview on 28 February 2007, Ms Streeter initially denied engaging in sexual activity in the room at Hotel B and then said she could not really remember and that she may have been affected by alcohol to the point she could not remember anything.
(23) On 14 March 2007, Telstra again interviewed Ms Streeter. In response to various questions about her activities on 24-25 February 2007, she either replied “no comment” or that she could not recall. At one point in the interview, Telstra said to Ms Streeter:
“[W]e feel you have been dishonest with us throughout this interview process. In particular, you have lied to us about:
Do you have anything to say about this?” 10
Ms Streeter replied with “No comment.” 11
(24) In her evidence to the Commission, Ms Streeter conceded that on 24-25 February 2007 in the room at Hotel B she bathed with the fourth employee and another employee, was in the bathroom with a towel around herself while the first employee went to the toilet and had sexual intercourse with the fourth employee. She said she had previously denied having had sexual intercourse with the fourth employee because she was embarrassed.
(25) At the interview on 14 March 2007, Telstra put to Ms Streeter that they were considering terminating her employment because of her activities in the room at Hotel B on 24-25 February 2007 and her dishonesty when answering their questions about those activities. Telstra asked Ms Streeter whether she had any response or whether there was any further information she would like to provide to prevent such an outcome. Ms Streeter’s reply was “No”. 12 After a break, Telstra advised Ms Streeter they were terminating her employment.
(26) Telstra had concluded “it would just be really difficult to have these people function in a work environment after what had occurred that night” 13 of 24-25 February 2007. Telstra had also concluded that “given the way respect was breached and the harassment that occurred, there was no way that these people could work together in the store.”14
(27) In his evidence to the Commission, the former Acting Manager of the Telstra Miranda store, now its Assistant Manager, said that “having [Ms Streeter] back at Telstra would be terrible for the Miranda Store. [The third employee, second employee and first employee] all work at the store, and I think they would be extremely upset, and possibly even leave, if they were forced to work with [Ms Streeter] again. [Ms Streeter] really shocked them with what she did.” 15
Senior Deputy President Hamberger’s Decision
[5] In considering whether the termination of Ms Streeter’s employment was harsh, unjust or unreasonable, Senior Deputy President Hamberger said:
“[114] The central issue to be decided in the current case is whether the respondent had a valid reason for the termination of Ms Streeter’s conduct [sic].
[115] Much of the legal argument during the hearings was concerned with whether there [sic] a sufficient nexus between Ms Streeter’s conduct and her employment for that conduct to be considered as a basis for the termination of her employment …
[117] As noted previously, most of Telstra’s concerns about Ms Streeter’s conduct concern her alleged sexual harassment of fellow employees. Section 106 of the SDA concerning vicarious liability provides as follows:
‘Vicarious liability etc.
(1) Subject to subsection (2), where an employee or agent of a person does, in connection with the employment of the employee or with the duties of the agent as an agent:
(a) an act that would, if it were done by the person, be unlawful under Division 1 or 2 of Part II (whether or not the act done by the employee or agent is unlawful under Division 1 or 2 of Part II); or
(b) an act that is unlawful under Division 3 of Part II;
this Act applies in relation to that person as if that person had also done the act.
(2) Subsection (1) does not apply in relation to an act of a kind referred to in paragraph (1)(a) or (b) done by an employee or agent of a person if it is established that the person took all reasonable steps to prevent the employee or agent from doing acts of the kind referred to in that paragraph.’
[118] It would be inappropriate for the Commission to find that a reason for termination was invalid on the grounds that there was an insufficient nexus with employment, when that reason was in relation to conduct for which the employer could be held vicariously liable under an Act of Parliament …
[121] Because of the nature of the allegations against Ms Streeter and the potential vicarious liability of her employer, it is not appropriate to conclude that there was no valid reason for the termination of her employment on the grounds that there was an insufficient connection between her conduct and her employment.
[122] I have already made a number of findings about Ms Streeter’s conduct. I now need to characterise her conduct.
[123] Apart from the issue of lying, which I will discuss later, the main allegations used to justify the termination of Ms Streeter’s employment concern sexual harassment.
[124] Sexual harassment is defined in s.28A of the SDA in the following way:
‘Meaning of sexual harassment
(1) For the purposes of this Division, a person sexually harasses another person (the person harassed) if:
(a) the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
(b) engages in other unwelcome conduct of a sexual nature in relation to the person harassed;
in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated that the person harassed would be offended, humiliated or intimidated.
(2) In this section:
‘conduct of a sexual nature’ includes making a statement of a sexual nature to a person, or in the presence of a person, whether the statement is made orally or in writing.’ ” 16
[6] His Honour concluded Ms Streeter’s activities on 24 February 2007 either could not be characterised as sexual harassment or, even if considered sexual harassment, were only of the most indirect kind.
[7] His Honour continued as follows:
“[142] This leaves the issue of Ms Streeter’s lies to her employer during the investigation into the matters that occurred during the night in question.
[143] It is not in dispute that Ms Streeter lied about some of her behaviour during the investigation. Moreover I have not accepted some of the evidence Ms Streeter gave during these proceedings.
[144] In McIndoe and BHP Coal the Full Bench determined that the Commissioner whose decision was being appealed was entitled to take the view that it was not harsh, unjust or unreasonable to terminate the employment of the appellant in circumstances where the latter had knowingly set out to breach company policy and then fabricated an excuse for his behaviour – a subterfuge with which he persisted during the hearing. The Full Bench stated:
‘In cases of this kind whether termination of employment is harsh, or disproportionate to the misconduct, is a matter for the exercise of judgement in all of the circumstances. In this case the Commissioner decided that termination was not a disproportionate response. He concluded that the appellant's attempt to cover up his wrongdoing made it worse and was destructive of the respondent's trust in him. That view was one clearly open to him. Acting in deliberate breach of rules established to protect the employer's property may not justify termination where the breach is trifling or, as here, the value of the goods is nominal. But circumstances alter cases. When the breach is compounded by attempts to cover up the conduct the matter can take on a different complexion [A. McIndoe v BHP Coal Pty Ltd (PR901846, 2 March 2001) Giudice J, Williams SDP, Bacon C]. ’
[145] The circumstances in this case are rather different. The conduct about which Ms Streeter lied was of an inherently personal nature. Lying is never to be condoned. However, given the nature of the conduct about which she has been untruthful, I do not consider that any dishonesty on her part has been such that it should be regarded as likely to destroy the necessary relationship of trust between an employer and employee. In drawing this conclusion I have also had regard to the evidence of [the Assistant Manager of the Telstra Miranda store] who said that he had no reason to believe that Ms Streeter was dishonest when it came to stock or cash (PN2184).
Conclusion
[146] As the Full Bench in McIndoe v BHP Coal noted, these cases are always a matter for the exercise of judgement in all the circumstances. Allegations of sexual harassment must be taken seriously by employers. Indeed they may be held liable for sexual harassment by their employees even where this occurs out of hours and away from the workplace. That is why I have rejected the argument that there was no connection between Ms Streeter’s conduct and her employment. Moreover there is no real issue that at least some of her behaviour during the night in question was inappropriate and inconsiderate to her fellow employees, especially [the second employee, first employee and third employee].
[147] However all the circumstances need to be considered. Was Ms Streeter’s conduct so bad that it constituted a valid reason for the termination of her employment?
[148] The respondent’s submissions greatly exaggerated the seriousness of Ms Streeter’s misconduct, particularly the suggestion that she committed a criminal act of obscenity. Moreover, I have found most of the behaviour complained of either did not constitute sexual harassment as defined by the SDA or only did so in a relatively marginal way.
[149] As the respondent conceded, the less direct the relationship with the workplace the more serious the misconduct would need to be to justify termination of employment. Most of the impugned behaviour occurred well away from the workplace, after rather then [sic] during a work function, in a hotel room that was booked and paid for privately.
[150] In all the circumstances, Ms Streeter’s conduct was not so serious as to constitute a valid reason for the termination of her employment.
[151] Having found that there was no valid reason for the termination of Ms Streeter’s employment (s.652(3)(a)) I do not need to spend much time on subsections (b) to (g). However as it is mandatory for the Commission to have regard to all these subsections I will briefly point out that:
[8] His Honour then went on to consider remedy.
Bases for Appeal
[9] Before us Telstra submitted, in effect, that Senior Deputy President Hamberger made errors of the type set out in House v King 18 in concluding Ms Streeter’s dishonesty with Telstra during its investigation into her activities on 24-25 February 2007 in the room at Hotel B did not constitute a valid reason for the termination of Ms Streeter’s employment. We agree.
[10] In House v King, Dixon, Evatt and McTiernan JJ said:
"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.” 19
[11] Following the events of 24-25 February 2007, the first employee presented to Telstra as hysterical. The second employee was not able to work as she was crying and hyperventilating. The third employee was equally distressed and disgusted. Telstra was made aware that Ms Streeter was associated with the condition of these employees.
[12] In the circumstances, we think it was reasonable for Telstra to investigate the matter and it was reasonable for Telstra to suspend the employees and Ms Streeter while it conducted the investigation.
[13] During of the investigation, Telstra was advised by the first employee that she was repulsed by Ms Streeter and did not want to be expected to talk to her. The second employee told Telstra she felt “really disrespected” 20 by the activities in which Ms Streeter was involved in the room at Hotel B on 24-25 February 2007. The third employee told Telstra she was “blown out”21 by Ms Streeter’s lack of dignity.
[14] Ms Streeter was unco-operative and dishonest with Telstra during the investigation. In response to questions asked of her, she denied activities she knew had occurred or stated that she had “no comment”. She also claimed a lack of memory with respect to certain activities. As Senior Deputy President Hamberger points out, Ms Streeter concedes she lied to Telstra during the investigation. 22
[15] Ms Streeter’s dishonesty would have been of little relevance to Telstra if her activities had had no effect at her work and were not likely to have any effect at her work. However, it appeared her activities had caused difficulties at her work and were likely to cause difficulties at her work in the future. In the circumstances, we think Telstra’s questions of Ms Streeter during its investigation were reasonable. Ms Streeter needed to be honest with Telstra about her activities, notwithstanding their inherently personal nature, so that Telstra could determine and take appropriate action to deal with the difficulties.
[16] For example, the first employee, second employee and third employee may have needed to be disciplined because they had fabricated Ms Streeter’s activities or they may have needed to be counselled because they were reacting unreasonably to her activities. Further, the difficulties may have been able to be overcome by some form of facilitated discussions between the first employee, second employee and third employee, on the one hand, and Ms Streeter, on the other hand, or by transferring Ms Streeter to another Telstra store.
[17] Ms Streeter’s dishonesty with Telstra during the investigation, however, meant Telstra could not be confident Ms Streeter would be honest with it in the future. The relationship of trust and confidence between Telstra and Ms Streeter was, thereby, destroyed.
[18] As Telstra put to Senior Deputy President Hamberger in closing submissions:
“That’s our case your Honour. I mean it would be quite different if the applicant had of come in and said look I’m sorry, day one, I’m sorry I made a mistake, too much to drink, I really did the wrong thing I’ll tell you the truth, I’m a bit embarrassed about it, but I’ll tell you the truth this is what happened, I really need my job. … That’s not what the applicant did. The applicant lied to everyone from the beginning to the end. In those circumstances the Commission should find that … there was a valid reason for termination constituted by the lies.” 23
[19] Senior Deputy President Hamberger concluded Ms Streeter’s dishonesty with Telstra during its investigation into her activities on 24-25 February 2007 in the room at Hotel B did not constitute a valid reason for the termination of Ms Streeter’s employment because the dishonesty was about activities of an inherently personal nature and he had no reason to believe Ms Streeter was dishonest when it came to stock or cash.
[20] We think the restricted view his Honour adopted of Ms Streeter’s obligation for honesty in her employment led him into error of the type set out in House v King. 24 Stock or cash are only a part of the matters Ms Streeter needed to be honest about to maintain the necessary relationship of trust and confidence between Telstra and herself. Whether the matters were personal or not, Ms Streeter had an obligation to answer Telstra’s reasonable inquiries honestly. In the circumstances, we do not see that the necessary relationship of trust and confidence can be compartmentalised as his Honour has done.
[21] Accordingly, we grant leave to appeal. We will now determine whether the termination of Ms Streeter’s employment by Telstra was harsh, unjust or unreasonable.
Harsh, Unjust or Unreasonable
[22] Section 652(3) of the Workplace Relations Act 1996 (Cth) (the Act) provides as follows:
“In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
(a) whether there was a valid reason for the termination related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee – whether the employee had been warned about that unsatisfactory performance before the termination; and
(e) the degree to which the size of the employer’s undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(f) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(g) any other matters that the Commission considers relevant.”
[23] We are satisfied there was a valid reason for the termination of Ms Streeter’s employment by Telstra related to her conduct, being her dishonesty with Telstra during the investigation it conducted on 28 February 2007 and 14 March 2007 into her activities in the room at Hotel B on 24-25 February 2007. We think it was reasonable for Telstra to conduct the investigation given it appeared her activities had caused difficulties at her work and were likely to cause difficulties at her work in the future. In the circumstances, we also think the questions Telstra asked Ms Streeter were reasonable. We think Ms Streeter needed to be honest with Telstra during the investigation, notwithstanding the inherently personal nature of her activities, so that Telstra could determine and take appropriate action to deal with the difficulties. Ms Streeter’s dishonesty during the investigation meant Telstra could not be confident Ms Streeter would be honest with it in the future. The relationship of trust and confidence between Telstra and Ms Streeter was, thereby, destroyed.
[24] We are also satisfied Ms Streeter was notified of the valid reason for the termination of her employment and given an opportunity to respond. On 14 March 2007, Telstra made it clear to Ms Streeter that they thought she had been dishonest with them during the investigation. Ms Streeter’s reply was “No comment”. Ms Streeter was then warned by Telstra that her dishonesty was placing her employment in jeopardy. She was asked by Telstra whether there was anything she wished to say or further information she wanted to provide to prevent the termination of her employment. Ms Streeter’s reply was “No”.
[25] We do not believe s.652(3)(d) of the Act is relevant in this case, given the termination of employment related to Ms Streeter’s conduct.
[26] Telstra is a large employer with dedicated human resource management. We think the procedures it followed in effecting the termination of Ms Streeter’s employment were appropriate.
[27] In respect of s.652(3)(g) of the Act, we think it weighs in favour of a conclusion that the termination of Ms Streeter’s employment by Telstra was harsh, unjust or unreasonable that Ms Streeter had worked for Telstra since 2002, that her employment record with Telstra had previously been satisfactory and that her termination was without notice.
[28] We are not persuaded Ms Streeter has suffered any loss of confidence or self esteem as a result of the termination of her employment. We are also not persuaded the potential loss of employment opportunities for Ms Streeter through the Commission finding Ms Streeter was dishonest to Telstra is relevant to whether the termination of her employment was harsh, unjust or unreasonable.
[29] In all the circumstances, however, having regard to our conclusions in respect of the matters in s.652(3)(a) to (g) of the Act, we have decided the termination of Ms Streeter’s employment by Telstra was not harsh, unjust or unreasonable. In our view, in this case, the matters weighing in favour of a finding the termination of Ms Streeter’s employment by Telstra was not harsh, unjust or unreasonable outweigh the matters in favour of a finding to the contrary. In so deciding, we have been conscious of the objects of the relevant Division of the Act and, in particular, our decision has been made in the context of the need to ensure a “fair go all round” is accorded both to Ms Streeter and Telstra.
[30] Accordingly, we uphold the appeal and will quash the decision and order of Senior Deputy President Hamberger. A copy of an order quashing his Honour’s decision and order is attached.
BY THE COMMISSION:
SENIOR DEPUTY PRESIDENT
DECISION OF COMMISSIONER LARKIN
[31] This is an appeal, for which leave is required, by Telstra Corporation Limited (Telstra) against an order [PR978080] made by Senior Deputy President Hamberger on 29 August 2007. The order followed a decision Streeter v Telstra Corporation Ltd [2007] AIRC 679 (10 August 2007) of his Honour on 10 August 2007 in connection with an application made pursuant to s.643 of the Workplace Relations Act 1996 (Cth) (the Act) by Ms. Streeter for a remedy in relation to the termination of her employment by Telstra. His Honour’s order reinstated Ms. Streeter to a retail Telstra store as close to the retail store in which she had been employed prior to the termination of her employment, on terms no less favourable. The order also awarded an amount for remuneration lost and Ms. Streeter’s service to be treated as continuous.
[32] I have had the benefit of reading the majority decision in this matter of their Honours Senior Deputy Presidents Acton and Cartwright. With respect I disagree with that decision. My reasons follow.
[33] The appeal is brought pursuant to s.120(1)(a) of the Act. The Full Bench in Big W Montaro Warehouse/590 Regional Distribution Centre [2007] AIRCFB 1049 at [2] said:
“Appeals are governed by s.120 of the Act. It is not necessary to set that section out. An appeal to the Full Bench lies only by leave of a Full Bench. A Full Bench must grant leave if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted. Otherwise, the grant of leave is governed by the conventional considerations for the grant of leave to appeal by an appellate court which include whether the decision is attended by sufficient doubt to warrant its reconsideration or whether substantial injustice might result if leave is refused. It should also be mentioned that an appeal may only be made against an order of the kind in this case on the grounds that the Commission was in error in deciding to make the order. (s.685(2))”
[34] A decision made pursuant to s.643 is a discretionary one. Section 685(2) makes clear that a decision of this nature can only be challenged by establishing error in the decision-making process. The section states:
“(2) For the avoidance of doubt, an appeal to a Full Bench under section 120 in relation to an order made by the Commission under Subdivision B of Division 4 may be made only on the grounds that the Commission was in error in deciding to make the order.”
[35] There were six grounds of appeal relied upon by the appellant in this matter. In summary it was contended his Honour:
[36] The principles governing a Full Bench on appeal from a discretionary decision at first instance are well known and applied by this Commission as they were expressed in House v King (1936) 55 CLR 499 at 504-505:
“It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[37] In Norbis v Norbis (1986) 161 CLR 513 at 518-519 per Mason and Deane JJ. it was said:
“The principles enunciated in House v. The King were fashioned with a close eye on the characteristics of a discretionary order in the sense which we have outlined. If the questions involved lend themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions, it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance. In conformity with the dictates of principled decision- making, it would be wrong to determine the parties’ rights by reference to a mere preference for a different result over that favoured by the judge at first instance, in the absence of error on his part. According to our conception of the appellate process, the existence of an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal.”
[38] I will now address each of the grounds relied upon by the appellant to establish error.
[39] Ground 1 of the appeal contended that his Honour failed to perform the task required of him under s.652(3)(a) to consider and make findings on the effect of the conduct on other employees. The proper construction of the terms “(including its effect on the safety and welfare of other employees)” found in s.652(3)(a) was not an argument put to his Honour at first instance but raised on appeal by the appellant. The appellant conceded as much (PN102).
[40] It is correct as the appellant contended, that the Commission must have regard to the matters identified in s.652(3). It is for the Commission to determine whether the conduct occurred and what that conduct involved (Edwards v Justice Guidice [1999] FCA 1836; Michael King v Freshmore (Vic) Pty Ltd M Print S4213, 17 March 2000 (Ross VP, Williams SDP, Hingely C)). This, in my view, his Honour did. Although his Honour does not specifically state that he had regard to the effect of the conduct on the welfare of other employees it is apparent, in my view, from the decision as a whole that this point was not ignored by his Honour in his consideration of s.652(3)(a) of the Act.
[41] It is not appropriate for a Full Bench to grant leave to appeal on the basis of an argument which was not clearly and fully put at first instance and determined by the primary decision maker.
[42] The Full Bench in Big W Montaro Warehouse/590 Regional Distribution Centre [2007] AIRCFB 1049 at [12] to [14], stated:
“On appeal the Commission does not generally entertain merit arguments which had not been advanced at first instance, although different considerations may apply where the matters raised are jurisdictional. Although Mr Manuel SC, who appeared for the appellant, accepted that the argument was not put at first instance, he submitted that the evidence had been before the Commission and Her Honour had an obligation to take it into account.
We disagree. As was observed by the High Court of Australia in Metwally v University of Wollongong (No 2) albeit in a different context:
‘It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.’
Had the argument been put to Her Honour it is possible that the respondent might have sought to lead additional evidence, for example to explain how she apparently obtained additional supplies of the drug in question. Certainly the respondent would have had the opportunity to make submissions as to why her conduct did not constitute serious misconduct.” (Citations omitted)
[43] In my view it would be wrong for a Full Bench on an appeal such as this one to allow the appeal on the basis of an argument not put to his Honour in the proceedings at first instance.
[44] The second ground of appeal contended that his Honour failed to make certain findings of fact.
[45] I am not satisfied that this ground has been made out. On a fair reading of his Honour’s decision he dealt with and made findings on issues relevant to a determination of the matter. His Honour, in my view, was not required to deal with and make specific findings on each point raised by the appellant. It is not necessary that his Honour deal with every matter raised in the proceedings. What is required are findings and reasons for those findings which deal with the substantive issues relevant to a determination of the matter. This, in my view, his Honour did.
[46] At [123] his Honour stated that the “main allegations used to justify the termination…concern sexual harassment”. In his decision, his Honour specifically considered and made findings on the appellant’s reasons for the decision to terminate on the basis of serious misconduct. Those reasons are found at paragraph [3] of the decision as follows:
“The reasons given by the respondent to Ms Streeter for the termination of her employment were that she:
[47] In considering the reasons for the termination and the submissions put at first instance (see AB 1 of 3 at page 036 – 037, Outline of Submissions of the Respondent), his Honour considered the issues and made findings on each, with the exception of one incident raised by the appellant, being the 3rd incident. His Honour’s consideration and findings are found at [41], [128], [129], [132] to [141], [8], [142] to [145], [19] and [126] of his decision. I am satisfied that his Honour’s findings dealt with all the relevant matters before him. As was stated in the Full Bench decision in Britax Rainsfords Pty Ltd PR904285, 24 August 2001 (Munro J, O’Callaghan SDP, Foggo C) at [54]:
“We are not satisfied that any error arises from any failure by the Commission to deal with particular reasons or make specific findings about each of the details relied upon by Britax Rainsfords. The attempt to magnify the significance of the non-disclosure is not well founded.”
[48] The third ground of appeal concerned his Honour’s approach in determining whether the conduct constituted sexual harassment.
[49] I am not persuaded that his Honour took a narrow approach. In the decision, his Honour deals with this point from [123] to [141]. At paragraph [135] of his Honour’s decision he para-phrased what was said in Carter v Linuki in respect to “conduct in relation to”. At [140] of his Honour’s decision he set out the argument put to him by the appellant that the relevant connection was the physical proximity. At [141] his Honour sets out his reason for his findings that he did not consider the conduct to constitute sexual harassment, however, he added that if it were considered to be sexual harassment it was of the most indirect kind. I am not satisfied that his Honour took an unduly narrow approach to the interpretation of the term “in relation to”.
[50] The fourth ground of appeal contended a failure to make necessary findings in his Honour’s consideration of the question of re-instatement.
[51] The decision to make an order that provides for a remedy under s.654 is a discretionary decision subject to the Commission’s satisfaction that the remedy ordered is appropriate, having regard to all the circumstances of the case including the factors outlined at paragraphs (a) to (e) of s.654(2). The first consideration, if the Commission decides to make an order, is reinstatement, if the Commission considers it appropriate (s.654(3)).
[52] His Honour had regard to s.654(2) and, as he stated “all the circumstances of the case”. The remedy sought was reinstatement. There was evidence before his Honour going to the difficulty of reinstatement to the Miranda store. While his Honour’s reasons on the issue of remedy are not lengthy, in my view, on a fair reading of the decision as a whole, his reasons to make the order that he did were clear. In his decision he considered and made findings in relation to the issue of dishonesty at paragraphs [4], [8], [143] and [145].
[53] At paragraph [143] of the decision he said:
“It is not in dispute that Ms Streeter lied about some of her behaviour during the investigation. Moreover I have not accepted some of the evidence Ms Streeter gave during these proceedings.”
[54] After considering the Full Bench decision in McIndoe v BHP Coal his Honour said:
“The circumstances in this case are rather different. The conduct about which Ms Streeter lied was of an inherently personal nature. Lying is never to be condoned. However, given the nature of the conduct about which she has been untruthful, I do not consider that any dishonesty on her part has been such that it should be regarded as likely to destroy the necessary relationship of trust between an employer and employee. In drawing this conclusion I have also had regard to the evidence of Mr Forner who said that he had no reason to believe that Ms Streeter was dishonest when it came to stock or cash (PN2184).” [145]
[55] His Honour’s consideration of the evidence given by Mr. Forner is but one part of his overall considerations.
[56] The following submission, found at [68]-[69] of his Honour’s decision, was put on behalf of the applicant:
“The applicant admitted lying in her first interview about having intercourse with Mr Sharma and opening the bathroom door for Ms Hyett. She continued to deny grabbing Mr Forner’s backside and having sexual intercourse with Mr Hatzistergos. While she answered ‘no’ to many of the questions put to her in the second interview, this was in the context of having made a decision not to answer any of the questions unless they were put to her in writing. She did not wish to answer because she felt uncomfortable with a lot of the questions being asked and was concerned not to answer questions requiring her recollection of events where that recollection was hazy.
Mr Durant submitted that to the extent that the applicant could be regarded as having lied, this was in a context of highly personal sexual indiscretions committed in a state of inebriation and did not show that she was not a trustworthy person capable of carrying out with honesty the tasks required of her by the job.”
[57] In the proceedings his Honour sought clarification from Ms. Streeter in relation to the second interview conducted by Telstra.
“SENIOR DEPUTY PRESIDENT: Well, can I ask a question. When you said no and there were a series of these questions in the interview about what happened, you said no, what did you mean when you said no? Were you denying that they occurred or what did you intend by saying no?
I just didn’t feel comfortable with a lot of the questions that they were asking me so I answered no to a lot of their questions because I didn’t feel as though some of their questions were appropriate and so I could have answered no to some of the questions because I didn’t feel comfortable answering them even though those events may have happened so I didn’t want to answer something when…” PN434 of proceedings before his Honour; Appeal Book 1 of 3 at page 167
[58] There were further questions and answers on this point contained within the transcript at first instance, however, I go no further. While minds may differ as to the gravity of Ms. Streeter’s dishonesty his Honour addressed this issue and made findings. His Honour’s findings on the issue of dishonesty were open to him on the material before him. Furthermore, his Honour had the benefit of observing the witnesses in the giving of their evidence before him in the proceedings. I am not satisfied that error in the House v King sense has been made out on this ground of appeal.
[59] The remaining grounds of appeal concern his Honour’s consideration of whether there was a valid reason for the termination.
[60] It was put on appeal that his Honour misconstrued and/or misapplied the test for what constitutes a valid reason for termination. The appellant argued on appeal that his Honour erred in not taking into account a range of considerations. Further, his Honour erred in asking the wrong question, which required the appellant to justify the termination. This it was said was the common law approach to summary dismissal and inconsistent with authority on assessing the question of valid reason for termination. It was argued on appeal that his Honour’s error is found at paragraphs [147] and [150] of the decision in respect to the terms used of “so bad” and “not so serious”. No challenge was made in relation to paragraphs [148] and [149] of the decision. I set out those paragraphs as follows:
“[147] However all the circumstances need to be considered. Was Ms Streeter’s conduct so bad that it constituted a valid reason for the termination of her employment?
[148] The respondent’s submissions greatly exaggerated the seriousness of Ms Streeter’s misconduct, particularly the suggestion that she committed a criminal act of obscenity. Moreover, I have found most of the behaviour complained of either did not constitute sexual harassment as defined by the SDA or only did so in a relatively marginal way.
[149] As the respondent conceded, the less direct the relationship with the workplace the more serious the misconduct would need to be to justify termination of employment. Most of the impugned behaviour occurred well away from the workplace, after rather then during a work function, in a hotel room that was booked and paid for privately.
[150] In all the circumstances, Ms Streeter’s conduct was not so serious as to constitute a valid reason for the termination of her employment.”
[61] I am not satisfied that his Honour elevated the valid reason test too highly. At paragraph [112] of the decision his Honour set out the legislative requirements which he was required to have regard to. I am not persuaded that his Honour posed the wrong question to be answered in the matter by the use of the terms complained of. His Honour’s reason for decision must be read as a whole and fairly considered. It is inappropriate “to adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth-comb, against the prospect that a verbal slip will be found warranting the inference of an error of law”. Minister For Immigration and Ethnic Affairs v Wu Shang Liang [1996] HCA 6 at 24 per Kirby J; (1996) 185 CLR 259 at 291 per Kirby J.
[62] I have previously in my decision, in considering the second ground of appeal, addressed the contention of error on his Honour’s part in not taking into account a range of considerations. On a fair reading of his Honour’s decision as a whole he dealt with the matters relevant to the determination he was required to make under s.652(3) of the Act. I am not satisfied that error has been established in that his Honour failed to give proper consideration to other matters.
[63] I am not satisfied that there is an arguable case that his Honour’s decision involved an error of the type identified in House v King. I am not satisfied that his Honour acted upon a wrong principle, gave weight to irrelevant matters, failed to give sufficient weight to relevant matters or made a mistake as to the facts or that the decision was plainly unreasonable or unjust in the circumstances of the case before him.
[64] It is of no consequence whether members of the Full Bench may have arrived at a different conclusion or approached the matter in a different manner. Error must be shown and I am not satisfied that the appellant has made out an arguable case of error in his Honour’s decision or order. I cannot discern any public interest considerations in granting leave to appeal in this matter.
[65] I would refuse leave to appeal.
BY THE COMMISSION:
COMMISSIONER
Appearances:
D Mortimer of Senior Counsel with S Wood of Counsel for the appellant
A Hatcher of Counsel with K Durant for the respondent.
Hearing details:
2007.
Sydney:
October 24.
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.120 - Appeal against the order [PR978080] issued on 29 August 2007
by Senior Deputy President Hamberger
Appeal by Telstra Corporation Limited
(C2007/3458)
s.643 application for relief in respect of termination of employment
Carlie Streeter
and
Telstra Corporation Limited
(U2007/3324)
SENIOR DEPUTY PRESIDENT ACTON
|
MELBOURNE, 24 JANUARY 2008 |
Appeal – termination of employment.
ORDER OF
SENIOR DEPUTY PRESIDENT ACTON AND SENIOR DEPUTY PRESIDENT CARTWRIGHT
Further to the decision of Senior Deputy President Acton and Senior Deputy President Cartwright of 24 January 2008 [[2008] AIRCFB 15], the Commission orders that:
1. Leave to appeal in matter C2007/3458 is granted.
2. The appeal is upheld.
3. The termination of the employment of Ms Carlie Streeter by Telstra Corporation Limited on 14 March 2007 was not harsh, unjust or unreasonable.
4. The decision of Senior Deputy President Hamberger made on 10 August 2007 [[2007] AIRC 679] is quashed.
5. The order of Senior Deputy President Hamberger made on 29 August 2007 [PR978080] is quashed.
BY THE COMMISSION:
SENIOR DEPUTY PRESIDENT
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1 Endnotes:
Streeter v Telstra Corporation Limited, PR978080, 29 August 2007 per Hamberger SDP.
2 Streeter v Telstra Corporation Limited, [2007] AIRC 679, 10 August 2007 per Hamberger SDP.
3 Exhibit T8 at paragraph 11
4 Ibid at paragraph 13.
5 Ibid at paragraph 14.
6 Exhibit T6 at Attachment DBH1.
7 Exhibit T6 at paragraph 55.
8 Exhibit T9 at Attachment AA1.
9 Exhibit T7 at Attachment JLB1.
10 Exhibit MK3.
11 Ibid.
12 Ibid.
13 Transcript at PN1006.
14 Exhibit T3 at paragraph 9.
15 Exhibit T8 at paragraph 15.
16 Streeter v Telstra Corporation Limited, [2007] AIRC 679, 10 August 2007 per Hamberger SDP at paragraphs 114-115, 117-118, 121-124.
17 Ibid at paragraphs 142-151.
18 (1936) 55 CLR 499.
19 House v King, (1936) 55 CLR 499 at 504-505
20 Exhibit T9 at Attachment AA1.
21 Exhibit T7 at Attachment JLB1
22 Streeter v Telstra Corporation Limited, [2007] AIRC 679, 10 August 2007 per Hamberger SDP at paragraphs
8 and 143.
23 Transcript at PN2819.
24 (1936) 55 CLR 499 at 505.
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