Dec 256/97 P Print N9636

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.170EC application for consent arbitration

Dieter Schreier

and

Austal Ships Pty Ltd

(U No. 61602 of 1996 )

COMMISSIONER O'CONNOR PERTH, 19 MARCH 1997

Alleged unlawful termination - consent arbitration

DECISION

This is an application by Mr Dieter Schreier pursuant to 170EA of the Workplace Relations Act 1996 (the Act) alleging unlawful termination by Austal Ships Pty Ltd.

Mr Schreier was terminated on 17 October 1996. The application was lodged on 28 October 1996 and a conciliation conference was held pursuant to section 170EB on 12 December 1996.

The conference was unable to resolve the issues between the parties and they applied for the matter to be dealt with by Consent Arbitration pursuant to section 170EC of the Act.

The parties were in agreement that Mr Schreier commenced with Austal Ships Pty Ltd in 1988 and was dismissed on 17 October 1996.

If was also agreed that Mr Schreier was paid $27 per Hour and his hours totalled 51 hours per week.

Austal Ships, represented by Mr Zilko, submitted that the reasons for termination were:

1. Failure to carry out duties in a satisfactory manner despite not less than four warnings.

2. Failure to comply with a lawful instruction given by the employer.

In evidence Mr Schreier contended that he had not received any written or verbal warnings.

Mr Schreier said he had discussions on two occasions with Mr Stanley, regarding his attitude and moods. He said that these discussions were not in the context of admonishments or threat of termination, but to offer alternative employment. He contended that at no time was any matter raised as to his performance or his ability to carry out his job.

He believed his dismissal arose out of two incidents.

He had gone to Wavemaster, another shipbuilder in the area and listened to an offer from that Company to employ him. After deciding to remain at Austal, he advised Mr Goode, a Production Manager, he had attended the interview.

The other incident he claimed that triggered the dismissal was his refusal to attend a seminar organised by the Company after hours.

He contended that he inquired of Mr Goode of the content and was advised that a lot of writing would be required. He stated he could not write English well. He also claimed that he was told he would not be paid for the time.

Under cross examination by Mr Zilko, he claimed he left home at 5am and returned at 6:30 at night and was not prepared to put in extra time.

Mr Zilko submitted that there was clear and unequivocal evidence as to the number of warnings Mr Schreier was given by both Mr Stanley and Mr Goode and that they were in excess of four.

A study of the evidence of Mr Stanley and Mr Goode does not reveal any clarity was attached to the discussions.

It reveals three people who had a history of friendships going back may years. Mr Stanley and Mr Goode were fond of Mr Schreier. By their own admission, he had carried out good work for the Company in the past and he was with them from the inception, having followed Mr Stanley from another company.

I believe that on the evidence it was open to Mr Schreier to form the view his employment was secure.

The evidence shows that Mr Schreier thought he was working satisfactorily. Mr Goode and Mr Stanley stating this was the view conveyed to them after any discussions.

Most of the discussions were attempts to accommodate Mr Schreier by offering work in other sections of the yard.

In both examination and cross, Mr Stanley and Mr Goode had problems detailing Mr Schreier's failure to perform other than in terms such as a lack of commitment, negative attitude and he was not `the Dieter of old'.

When asked whether Mr Schreier understood the warnings, Mr Stanley replied: "I think I made it clear".

Mr Goode's response: " He should have understood".

If we look at the examination of Mr Stanley in relation to the September meeting:

"...but did you ultimately in September, early September last, have a meeting with Mr Schreier and with Mick Goode in there as well? ---Yes, Mick - Mick came to me and once again he was - he was frustrated as to Dieter's performance. We talked about it for a little while, and I asked him if he wanted me to get involved, which I don't usually do, but because I've known Dieter so long, he - he suggested it mightn't be a bad idea. So basically, we - I called him to my office with Mick, and I said to Dieter straight out, I said, "Look, Mick's frustrated. He basically wants to sack you." I said, "Look, what can we do? What's going wrong?" And from that point, I said, "You're going to have to get your head down and knuckle down to the job, else you're going to have to go. It's as simple as that."

What did Mr Schreier say to you? Did he accept that, or not accept that? --He seemed - he seemed somewhat surprised, which I couldn't really understand.

Did he challenge the proposition that he was not being accountable? --He said - he said that he was doing his job effectively, which obviously I disagreed with.

One has to ask the question why would Mr Schreier be surprised if he had been given previous warnings?

It would be fair to deduce form the evidence that this was the first definite warning to Mr Schreier that his job was in jeopardy.

I also think it fair to deduce from the reaction of Mr Stanley and Mr Goode to Mr Schreier's approach to Wavemaster that this factor weighed heavily on the tenor of the September discussions as opposed to previous discussions.

I cannot agree with Mr Zilko's submission that a warning along the lines of "Pull your finger out, your job is on the line" is sufficient, nor do the authorities share that view.

In Nicholson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR23 Wilcox C.J in respect of 170DC of the Act stated on page 243:

"The paragraph does not require any particular formality. But this does not mean that it is unimportant or capable of perfunctory satisfaction. Section 170DC carries into Australian labour law a fundamental component of the concept known to lawyers as "natural justice" or, more recently, "procedural fairness". The relevant principle is that a person should not exercise legal power over another, to that person's disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case. The principle is well established in public administrative law. It was accepted in international labour law when Article 7 was inserted in the Termination of Employment Convention. Section 170DC is directly modelled on Article 7. The principle is, I believe well understood in the community. It represents part of what Australians call "a fair go". In the context of section 179DC, it is not be treated lightly. the employee is to be given an opportunity to defend himself or herself "against the allegations made": that is, the particular allegations of misconduct or poor performance that are putting the employee's job at risk Section 170DC(a) is not satisfied by a mere exhortation to improve."

Now if one looks at the accusations against Mr Schreier they talk about attitude, commitment and performance, and since it was obvious by the evidence of Mr Goode and Mr Stanley that Dieter could not accept there was anything wrong with this performance it was incumbent at that point for management to spell out precisely what was required of Mr Schreier to guarantee his continued employment. This should have in this circumstance been conveyed in writing.

In Daile v Australian Broadcasting Corporation, J.R. Patch held:

Section 170CA(1) of the Act is as follows:

"The object of this Division is to give effect, or give further effect, to:

(a) the Termination of Employment Convention; and

(b) the Termination of Employment Recommendation, 1982, which the General Conference of the International Labour Organisation adopted on 22 June 1982 and is also known as Recommendation No.166, and a copy of the English text of which is set out tin Schedule 11."

The title of the Recommendation is "Recommendation Concerning Termination of Employment at the Initiative of the Employer."

Under the heading "Standards of General Application", there is a subheading "Procedure Prior to or at the Time of Termination". Paragraph 8 under that subheading is as follows:

"8. The employment of a worker should not be terminated for unsatisfactory performance, unless the employer has given the worker appropriate instructions and written warning and the worker continues to perform his duties unsatisfactorily after a reasonable period of time for improvement has elapsed."

In Minister of State for Immigration and Ethnic Affairs v Ah Him Teoh (High Court) (unreported 7 April 1995), their Honours, Mason CJ and Deane J said, in discussing the status, in Australian domestic law, of the United Nation Convention the Rights of the Child:

"It is well established that the provisions of an international treaty to which Australia is a party do nor form part of Australian law unless those provisions have been validly incorporated into our municipal law by statute. This principle has its foundation in the proposition that in our constitutional system the making and ratification of treaties fall within the province of the Executive in the exercise of its prerogative power whereas the making and the alteration of the law fall within the province of Parliament, not the Executive. So, a treaty which has not been incorporated into our municipal law cannot operate as a direct source of individual rights and obligations under that law....

But the fact that the Convention has not been incorporated into Australian law does not mean that its ratification holds no significance for Australian law. Where a statute or subordinate legislation is ambiguous, the courts should favour that construction which accords with Australia's obligations under a treaty or international convention to which Australia is a party, at least in those cases in which the legislation is enacted after, or in contemplation of, entry into, or ratification of, the relevant international instrument. That is because Parliament, prima facie, intends to give effect to Australia's obligations under international law.

It is accepted that a statute is to be interpreted and applied, as far as its language permits, so that it is in conformity and not in conflict with the established rules of international law. The form in which this principle has been expressed might be thought to lend support to the view that the proposition enunciated in the preceding paragraph should be stated so as to require the courts to favour a construction, as far as the language of the legislation permits, that is in conformity and not in conflict with Australia's international obligations. That indeed is how we would regard the proposition as stated in the preceding paragraph, In this context, there are strong reasons for rejecting a narrow conception of ambiguity, If the language of the legislation is susceptible of construction which is consistent with the terms of the international instrument and the obligation which it imposes on Australian, then that construction and does not import the terms of the treaty or convention into our municipal law as a source of individual rights and obligations."

One of the objects of the Division 3 of Part VIA of the Act is to "give effect,, or give further effect, to" the Recommendation, I must, therefore, have regard to the wording of that Recommendation in determining the meaning of the various sections of Part VIA of Division 3 of the Act, including the obligations imposed on employers as a result of that part of the Act.

The Act does not, in terms, impose an obligation employers to give employees a "written warning" in terms of paragraph 8 of the Recommendation. I accept that, if it were the intention of the Parliament to impose, in all cases, such a requirement, then the Act would specially say so.

Nonetheless, in view of the fact that one of the objects of the Act is to give effect to the Recommendation, and in view of the fact that the Recommendation is incorporated in the Act in the sense that it is a Schedule to the Act, the absence of a written warning (where that could appropriately and practically be given) is a significant factor to be taken into account on the question of whether or not an employer has breached the provision of section 170DC of the Act...."

In light of the foregoing, I find that Austal Ships breached section 170DC of the Act insofar as it relates to the termination of Dieter Schreier.

Refusal of a lawful order.

The Company required Mr Schreier to attend out of hours a management seminar that would run for three hours each fortnight for five weeks. The time so occupied would amount to 15 hours in total.

The Company stated that attendance was necessary for the future of the Company and canvassed the supervisors and managers as to their preferences for weekends or weeknights. None of the options however allowed for the seminars to be held in normal hours.

Mr Schreier testified that originally he worked six days a week, but prior to termination he was working 51 hours over five days. He stated he left home at five in the morning and returned at 6:30pm.

He also stated that he had had a two week holiday in eight years.

In light of the hours that Mr Schreier worked, and the fact that he did not receive paid annual leave and thus had no incentive to take leave, nor was he ordered to do so, it would be most unreasonable to expect him to do any more overtime hours. If was open to the employer to arrange for training during the 51 hours Mr Schreier already attended at his premises each week.

I find that Austal Ships Pty Ltd contravened section 170DE(1) in that there was no valid reason for Mr Schreier's termination.

I also find that in terminating Mr Schreier, Austal Ships Pty Ltd contravened section 170DB in that Mr Schreier was terminated without notice as prescribed.

From the date termination until the date of the Hearing, 16 weeks and 3 days have expired, which would have entitled Mr Schreier to $22 856.20 had he remained at work, based on 51 hours at $27 per hour. For that time Mr Schreier received $1728 in Social Security payments and $7600 in wages, leaving a shortfall of $13 530. An Award will issue of that amount.

BY THE COMMISSION:

COMMISSIONER O'CONNOR

Appearances:

T.R. Crossley for D. Schreier

M.H. Zilko for Austal Ships Pty Ltd

Hearing details:

1997.

Perth;

March 10.

Printed by Authority by the Commonwealth Government Printer

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Termination of employment - unfair dismissal - unlawful termination - - incumbent on employer to spell out precisely what required to guarantee continued employment (see Nicolson v Heaven and Earth Gallery Pty Ltd [(1994) 126 ALR 23); Daile v Australian Broadcasting Corporation - s.170DC breached - demand to perform unpaid overtime most unreasonable given quantum of overtime worked and non-receipt of paid annual leave - no valid reason for termination - s.170DB breach as termination without prescribed notice - compensation ordered