Cochrane v Mayne Group Limited [2003] QIRC 78 (2003) 173 QGIG 351

30 May, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 351 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Paul Cochrane AND Mayne Group Limited (No. 2) (No. B1779 of 2002) COMMISSIONER BLADES 24 April 2003 Suppression order – Section 679 Industrial Relations Act 1999 – Extensive material sought to be suppressed – Trial held in camera and concluded – Decision made and released – Decision withheld by Registrar from publication in Queensland Government Industrial Gazette – Application made for considerable parts of the decision to be suppressed – “Public interest” considerations no longer of the same force and effect in respect of the evidence but relevant to the publication of the decision – Rule 87 Industrial Relations (Tribunals) Rules 2000 – Order made for suppression of Schedule to application, evidence, exhibits and submissions – With minor modifications, decision of Commission in unfair dismissal case to be published in Gazette. DECISION On 24 February 2003, his Honour the President made an order in the matter of Mayne Logistics Armaguard v Paul Cochrane, released 24 February 2003 but not published in the Queensland Government Industrial Gazette, that certain documents in the proceedings not be released, searched or published and that all proceedings be heard in camera. The Order provided that it would expire 28 days after the publication of the decision in the unfair dismissal case. The reasons for that order were released on 25 February 2003 and are now published in (2003) 172 QGIG 1139. His Honour said: “On balance, it seems to me that the only practical course is to grant interim orders in the terms sought and to remit to the Commission the function of determining, after proceedings are complete and a decision in the unfair dismissal matter is issued, which parts of the transcript and which documents should be released from the operation of the order.”. On 17 and 18 March 2003, the application for reinstatement the subject of those proceedings was heard in camera and a decision was released on 20 March 2003. That decision has not been published in the Gazette. The Registrar has refrained from publication pending this application whereby Mayne Group Limited (Mayne) now seek to have suppressed numerous passages in the evidence, statements and documents and much of the decision itself. -- 1 of 5 -- 352 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 30 May, 2003 The applicant, Paul Cochrane, has not taken any part in these proceedings for suppression. There is an application for costs which remains to be determined at some time in the future. Mayne has provided a schedule of the relevant passages it seeks to be the subject of a suppression order. It would not be an exaggeration to state that most of the transcript and statements of evidence and submissions are the subject of the application. In practical terms it would be exceedingly difficult to excise out of those documents the numerous individual passages sought to be suppressed. If an order is to be issued at all, it should encompass the whole of the proceedings. In his decision, his Honour said that the source of the power to order the suppression of evidence was s. 679(8) of the Industrial Relations Act 1999. His Honour also said that the correct approach, consistent with the common law, was that justice should be public but that other sections of the Act required the Commission to: “(a) hear and decide an industrial cause in the way that appears best suited for the purpose; (b) to consider the public interest with regard to the objects of the Act, the likely effects of the decision on the community, local community, economy, industry generally and the particular industry concerned; and (c) if necessary, to pass through the technicalities, legal forms and the rules of evidence undeterred.”. A passage from the decision of his Honour was relied upon by Mayne. His Honour said: “The case will require evidence to be given about equipment in use, systems of work and safety protocols. If orders of the type now sought are not made, information will come to the notice of large numbers of persons who have no apparent interest (other than curiosity) in the information and some of whom may use the information for nefarious purposes, putting at risk the security of the cash, the safety of the appellant’s employees and the safety of members of the public. Indeed, because some of the documents to be discovered and (presumably) tendered make reference to customers and transactions with customers, the safety of employees of those customers and their clients may also be put in jeopardy. There is a compelling case for a limitation of access to some of the evidence proposed to be given and the documents to be relied upon.”. By those comments, his Honour clearly left it to the discretion of the Commission to determine which parts of the transcript and which documents should be released after the case had been heard and determined. Other than for the principles espoused above and a reference to a compelling case of suppression for “some of the evidence”, his Honour did not go further and identify that evidence or attempt to fetter the discretion in any way. This unfair dismissal case, except for the application for costs, is now concluded. There is no indication that any person has shown interest in the proceedings or the evidence. The hearing was held in camera. No part of the case has been publicised. The practicalities of making any order prohibiting publication of only parts of the transcript and the statements and exhibits, due to their volume, do not appeal to me. The time and expense involved in considering literally hundreds and hundreds of phrases and passages which may or may not qualify for suppression in my view is now not warranted. The “public interest” notion that justice should be public does not now assume the importance that would otherwise be placed upon it. The proceedings have been concluded in circumstances where no interest has been shown in those proceedings. The beast is dead and buried. What point would now be served by trawling through the record sentence by sentence? Obliterating large passages of transcript and exhibits or in following a suppression order for large tracts of the proceedings might prove to be a logistical nightmare for the Registry and Court Recording section. It seems to me that, bearing in mind those matters identified by his Honour, particularly the possibility of putting at risk the safety of persons or the security of cash that may occur because of the release of some parts of the evidence, it is now at this stage of the proceedings more appropriate to order suppression of the whole of the material. However, I would not take a similar attitude in respect to the decision itself although the general principles would probably be similar. That decision consisted of thirty paragraphs (numbered by Mayne for the purpose of this application). The application seeks to have suppressed fourteen of those paragraphs. Suppression of that number would render the entire decision unintelligible. This employer now has no employees in the security industry, having sold its Armaguard division with settlement on 3 February 2003. The Commission was not told of that upcoming event when this matter was originally argued before it on 30 January 2003, and at a time when the contract of sale must have been in existence. It seems therefore, that the application must have been argued on behalf of the industry at large although Mayne no longer has any interest at all in the cash-in-transit industry. Employees in the industry at large are entitled to know under what circumstances their employer might be held to be liable for an unfair dismissal. They are entitled to be made aware of what recourse they might have under Industrial laws. Employers in the Industry are also entitled to be made aware of their responsibilities. The issues raised in this case are relevant across the whole of the industry as would appear from the actions of Mayne in pursuing the order on behalf of the industry. These are “public interest” matters consistent with the objects of the Act. They assume a “public interest” importance because they form part of the decision of a public body in litigation. Failures by this employer to adequately supervise staff and implement its own policies may prove to be an embarrassment, particularly in regards to its clients and its opposition but that is not enough. In terms of his Honour’s decision, it must be shown that publication would, inter alia, put at risk safety of employees or others or breach security issues. Publication of the policies themselves may not necessarily have such an effect, but mere allegations of non compliance by employees and employers alike with various policies or instructions fall into another category. Moreover, the policies and procedures adopted by Armaguard for the protection of their employees, the public and the security of cash may not have been the same as are adopted throughout the rest of the industry and the specific policies of Armaguard no longer appear to have any relevance. In addressing the application in respect of the fourteen paragraphs of the decision, I make the following comments. The whole of paragraph two of the decision is sought to be suppressed. Paragraph two deals only with the reasons advanced by the employer for the dismissal. It does not deal with any policy or procedure, publication of which might prove to be a security issue. To be consistent with my view on paragraph twenty-two, a small deletion will be made. There is no necessity for anyone to be told how many armed personnel were required to be present. I can then accept that the publication of the whole of paragraph five might provide unnecessary information to someone with a “nefarious purpose” in mind but otherwise is innocuous. Paragraph six contains part of a policy which would appear to me to be nothing more than common sense. Any employer handling large cash transactions would probably have a system of dual control and restricted access in place, and I (and I would think the world at large) would be surprised if they did not. Such a system, I infer, is not restricted to the cash-in-transit industry but is probably in existence in the banking industry, the public service, the gaming casinos, large hotels and so on. Publication of such a policy may well prove to be a deterrent to would-be thieves, certainly not risking safety or security. As I have said before, publication of breaches and particularly breaches arising from inadequate supervision would prove to be merely an embarrassment. -- 2 of 5 -- 30 May, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 353 Paragraph seven dealing with dual control follows on and the same comments are apt. The release of a policy of dual control of cash would not impugn the safety of anyone. Its non release or the release of a policy involving the absence of dual control might well encourage theft. Evidence of a failure to comply with a dual control policy resulting in the dismissal of someone can only enhance security, accountability and confidence. Paragraph nine deals with Mr Cochrane signing off on an audit and providing false answers. Its contents are innocuous. Except for the number of staff identified in paragraph ten, the paragraph contains allegations which should be only an embarrassment to the employer. Paragraph eleven contains nothing that needs to be suppressed. Paragraph twelve follows on and rebuts the suggestion of the “cutting of corners”. Paragraphs fourteen, fifteen, sixteen, seventeen and eighteen deal with breaches of dual control and falsification of documents. Nothing puts at risk employee or public safety but clearly might prove to be an embarrassment. The identification of the number of persons required to be present is excluded from paragraph eighteen of the decision for the same reasons applicable to paragraph five. I see nothing of concern in paragraph twenty-two other than to maintain consistency with paragraphs two and eighteen. What I propose to do is to annex a copy of my released decision containing words blacked out to provide a guide to the Registrar for publication in accordance with Rule 87 of the Industrial Relations (Tribunals) Rules 2000. I formally order that the decision released on 20 March 2003 is to be modified for publication in the Gazette in accordance with Annexure A. In view of the special circumstances that now exist in regard to the material placed before the Commission at the trial in that there appears no longer to be the “public interest” considerations previously identified and having regard to the expense and time involved in addressing numerous passages of evidence, I would order that Schedule two to the application, the transcript, exhibits and submissions of the parties be withheld from release or search. There was also an application for the return of discovered documents. Mr Cochrane has not appeared in this proceeding and in previous proceedings has taken no objection to orders being made. Mayne has given an undertaking that if any documents are required for the costs application, they will be made available. On that undertaking, I order that the applicant Mr Cochrane, through his Solicitors, return to the respondent, Mayne Group Limited, all documents discovered by the respondent. I would assume that the identification of a time within which compliance is to occur would not be necessary. I would suggest to the Registrar that the publication of this decision in the Gazette and consequently the publication of the decision of 20 March be delayed for a reasonable period of time to allow further action to be instituted. B.J. BLADES, Commissioner. Hearing Details: 2003 22 April Appearances: Mr J. Murdoch, Senior Counsel, instructed by Blake Dawson Waldron, for Mayne Group Limited. Released: 24 April 2003 ANNEXURE A QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Paul Cochrane AND Mayne Group Limited (No. B1779 of 2002) COMMISSIONER BLADES 20 March 2003 Unfair dismissal – Breaches of company policy – Area Manager – Issues of fact – Dismissal found to be harsh, unjust or unreasonable – Business sold since termination – Reinstatement impracticable – Re-employment impracticable – Order for compensation. DECISION Paul Cochrane the applicant, worked for the respondent Armaguard in various capacities for 9 1/2 years. There is some confusion as to the entity which actually employed Mr Cochrane and the reasons for this appear later in this decision. At the time of his dismissal for gross and serious misconduct on 17 October 2002, he held the position of Branch Manager at Bundaberg (from 1999) and Area Manager for Bundaberg and Maroochydore (from 2000). As Area Manager, he was also Branch Manager at Bundaberg but spent little time in that branch. Area Managers have the same responsibilities as Branch Managers except that they have multiple branches. The termination was for: • gross and serious misconduct whereby he falsified company documents; • dereliction of management duty by knowingly allowing employees to breach operational procedures; and by himself also seriously breaching company operational procedures by accessing the cash alone; and • further dereliction of duty through serious security breaches by leaving the branch without any armed personnel on site. On or about 1 October 2002, Mr Cochrane became aware that an employee Marolyn Potter had found a shortage in the moneys in the safe in Bundaberg. She had found a $500 shortage in $50 notes. Later that day, Mr Cochrane checked the remaining $50 notes and found $3,000 missing. On 4 October 2002, a further check revealed that the $20 notes in the vault were short to the extent of $80.00. There was a total of $4,080 missing from the cash note pool in the vault. The matter was investigated by Management. In particular on 10 October, Mr Cochrane was interviewed by Mr Ray Rogers, State Security Manager and Mr Paul Hart, Security Investigator. On Friday 11 October, Mr Cochrane was stood down on full pay. On 15 October he was interviewed by Mr Ross Hazlehurst, State Manager – Queensland, and Mr Danny Butt, Head of Armaguard. Mr Cochrane’s services were terminated on 17 October. Armaguard has a number of policies in force. A precise of these is to be found in the statement of Mr Hazlehurst. Firstly, the Standard Operating Procedures provides that it is a requirement that in operational hours a minimum of one person must be armed in every regional branch, such as the Bundaberg branch. -- 3 of 5 -- 354 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 30 May, 2003 Secondly, the Banks Owned Pools Operations Manual provides, inter alia: • access to note pool holdings must be physically restricted and segregated; and • access to note pools must be by dual custody, pools must not be accessed by one person. “Dual control” means that two people with separate keys are required to simultaneously open the pool holding area which must not be accessed by one person and otherwise must be kept locked at all times. There were four locks, each person holding two keys. There is also a system of audits to ensure compliance with the policies. It was the responsibility of each Branch Manager to audit their branch on a weekly basis, that is, to ensure compliance with the policies. Mr Hazlehurst also said that if a Branch Manager or Area Manager finds or becomes aware of a failure in the audit, that is, that one of the requirements has not been met, they must advise the Regional Manager of the failure immediately so that it can be remedied. On 16 August 2002, Mr Cochrane signed off on one of these audits and indicated “compliance” to “Access to Note Pool holdings is physically restricted and segregated”. He also indicated “Compliance” to “No one staff member can/does access Note Pool cash”. The company alleges that the answers were false. There are other allegations relating to the falsification of documents comprising similar audits which seem to have been raised in a peripheral sense in the written material but more directly in the oral evidence of Mr Hazlehurst. Mr Cochrane told the Commission that at the commencement of his role as Area Manager, the “dual control/access” policy was strictly enforced in the Maroochydore branch and he continued to strictly enforce this policy in Maroochydore. However, he had noted that in the Bundaberg branch when he was appointed, the “dual control/access” was not as strictly enforced although it was enforced where at all possible. He believed that this had been the case for a number of years. He says that his superiors did not at any time raise any concern about the practice. He claimed that the “dual control/access” policy was not enforced in Bundaberg due to its small size and that it was impractical to have two people in the safe at any one time, that the three staff all had numerous tasks to perform and that once the money was removed from the safe, staff had sole access to it with relatively little (if any) supervision, thus defeating the intent of the policy. He complained that Ray Rogers had advised him on several occasions that it was inevitable that Managers would be required to “cut corners” in relation to aspects of security in the smaller branches such as Bundaberg due to the impracticability of enforcement. In other words, he complained that the practice was condoned by the employer. He also complains of inconsistent disciplinary conduct. There is a list of dismissible offences in the Managers Manual but access and control of cash was not on the list. The evidence about the cutting of corners was denied by Mr Rogers who said that if there was to be a bending of the rules, approval had to be sought from State Office. I accept this evidence on the probabilities because I find it unlikely that on the one hand, there was a blanket authorisation to generally “cut corners” and on the other, the introduction of weekly audit forms designed to ensure compliance with policy. Whether there was inconsistent disciplinary conduct depends on the facts and circumstances of each particular case. I could find little in this allegation, noting that the two people in Bundaberg who were not subjected to any disciplinary action were both staff under the control of the Manager. It would also seem that “access and control of cash” was not on the list of disciplinary offences. However the list did cover breaches of company policy which includes policy on “access and control of cash”. In regard to the alleged falsification of the company documents, there were new audit procedures introduced from 1 January 2002 where each Manager became responsible for weekly auditing their branch to ensure compliance with company policies. On the occasion that the employer alleges the audit was falsified, one being the week of 16 August 2002, the applicant claimed orally, that proper procedure was followed that week and the audit was correct. But his statement uses the phrase “I believe that the (policy) was adhered to for the period”. That belief improved to knowledge in his statement in reply. In cross-examination, he asserted that it was a perfect week. The applicant admitted that the procedures were not followed on 10 to 15% of occasions, that he himself breached the policy and considering that he did nothing about reporting any breaches or correcting any procedures, I have difficulty in having confidence in his evidence that the procedure was followed that particular week. At his interview with Mr Hazlehurst and Mr Butt, he advised them that he could not recall signing an audit confirming dual access controls were in place. That explanation is more likely in my view rather than his evidence that it was a perfect week. However, direct proof that in that particular week there was falsification of the audit would be very difficult and would depend on inference. This comment is also apt in regard to the other allegations of falsification of documents. But whether “falsification” was proved or not, the introduction of the new audit procedures from 1 January operated to reinforce that compliance with the policies was required, policies that the applicant knew were being breached. The breach of these policies led directly to an inability to sheet home responsibility for what was regarded as employee theft of the money. Compliance may not have served to identify the perpetrator of the theft but compliance may have made theft more difficult and may, by a process of elimination, have made identification of the thief easier. The theft was an example of why the policy was good sense. Mr Cochrane knew that the system of dual control was not followed on 10 to 15% of occasions and was not followed on this particular occasion. He also knew that theft is a major threat to the integrity of the Cash-In-Transit business and he knew his employer was endeavouring to tighten up controls. When people from Head Office visited the branch, proper procedures were followed, so that he knew that a failure to follow proper procedures would have drawn an adverse reaction. His reason for not following proper procedures was that it would upset the staff and that he trusted the staff. Such a reason would appear to be inappropriate to excuse the serious dereliction of duty. He had responsibility over and above that of other staff. He had a duty to ensure that proper procedures were followed, that duty was part of his management duty. If the practice had been ongoing as he claimed, upon his appointment as Manager, he had a duty to stop it. Furthermore, that some practice goes on over time does not lessen its severity, unless it was condoned. There is no evidence, other than Mr Cochrane’s, that it was condoned. That evidence was denied and there is an inference that, because of the introduction of new audit procedures on 1 January 2002, it was not. I do not accept that it was condoned. I do not accept the applicant’s evidence that he did not know that dual control was not exercised when he was not there. Such evidence lacks credibility in the light of his other evidence that the practice had been ongoing for years. The applicant also seemed to trivialise the alleged breach of company policy where it was required that at least one armed person be present in the branch at all times. Even if the absence was for only 5 minutes, the danger of a planned and prepared robbery by persons with knowledge was apparent and deterrence is always a factor. The applicant claimed not to have received any formal warnings in the past. However, there would appear to have been three occasions on which he was counselled and I accept Mr Hazlehurst’s evidence in that regard. What is apparent is that the applicant’s employment history was not unblemished. Mr Hazlehurst conceded that the falsification of documents played a large part in the decision to terminate. He also conceded that had he been unaware of any allegation of falsification of documents, he probably would not have terminated the employment. He also conceded under cross-examination that he could not be sure that the document was false. -- 4 of 5 -- 30 May, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 355 The applicant had been employed by the company for a long period of time. He had previously been regarded as a good employee and had been promoted fairly quickly. He was in a position of trust where he was required to exercise control over the staff, to lead and guide them and implement the policies of the employer. He tolerated and engaged in breaches of policy himself that could have had serious effects and probably did result in the loss of some money or at least in an inability to sheet home responsibility. He had been the subject of previous counselling. I am satisfied on the probabilities that the applicant was guilty of a dereliction of duty by knowingly allowing employees to breach operational procedures and by himself also breaching company operational procedures by accessing the cash alone. I am satisfied that there was a further dereliction of duty through serious security breaches by leaving the branch without any armed personnel on site. In view of the concession by Mr Hazlehurst that he could not be satisfied that the applicant falsified company documents, I am reluctant to make a finding against the applicant on that issue. On the whole of the evidence, I do not consider that the conduct constituted “serious and wilful misconduct” as relied upon by the respondent. It was not conduct serious enough to demonstrate an intention not to be bound by the terms of the contract. A final warning may have been appropriate or even perhaps a demotion to a position attracting no responsibility, especially considering the long term nature of the employment. Long term employment should count for something. The respondent has gone to great lengths in this case to protect its reputation and the concern it has shown, because of the theft of money under its control, may have coloured the decision to terminate. If dismissal was the preferred option, it should have been accompanied by appropriate notice and in my view, it was not. I am satisfied that on the whole of the evidence, the dismissal was harsh unjust or unreasonable. As to remedy, there has been great confusion as to the employer of the applicant. It may be that the employer was Mayne Logistics Pty Ltd but the position is complicated by a pay slip upon which is printed “Mayne Group Limited” and by a letter dated 9 July 2001 which is headed “Mayne Logistics Armaguard” and a footer which reads “Mayne Nickless Limited trading as Mayne Logistics Armaguard”. The ABN number coincides with that of Mayne Group Limited but is different to that of Mayne Logistics Pty Ltd. No one from the company was able to say which entity employed the applicant. Resort was finally made to the all encompassing respondent, Mayne Group Limited, being the parent company of numerous other corporations in the corporate structure. Mayne Logistics Pty Ltd operated the Armaguard business and the Armaguard business was sold on 3 February 2003 to Linfox. There are no employees left in the Armaguard business, no matter who they were employed by and no matter who actually employed the applicant if he was in fact not employed by Mayne Logistics Pty Ltd. The Bundaberg business operation and the employees that were employed there have been taken over by Linfox as from 3 February 2003. In terms of s. 78(2) of the Industrial Relations Act 1999 (the Act), I am satisfied that the applicant’s former position does not exist. As to s. 78(3) of the Act and being satisfied of the impracticability of reinstatement, it has been submitted that re-employment should be ordered to another position that the employer has available. It was pointed out that the Mayne Group has a Health division which employs about 20,000 and there must be something available for the applicant. The evidence is that 17,000 to 18,000 of those would be qualified nursing personnel and others would have scientific qualifications. There would be few positions where such qualifications would not be required. The respondent has not identified any position in which the applicant could be re-employed. Section 78(3) authorises the Commission to order the employer to re-employ the employee in another position that the employer has available and that the Commission considers suitable. In this case, the evidence is that there is no other position available. There is certainly no evidence upon which the Commission can formulate a view that any position is suitable. In any event, in my view, the applicant was employed in the Armaguard division by whatever entity (but a separate entity) since July 1993 and it is to Armaguard that there either has to be reinstatement or re-employment. The Armaguard business has been sold. Accordingly, I am satisfied that reinstatement or re-employment is impracticable. As to compensation under the provisions of s. 79, I consider that an award is appropriate. The applicant has been paid one month’s pay upon termination, even though not required in view of the reasons advanced for the dismissal. He had been a long standing employee of senior rank. I am not told whether he has since obtained work although he gave evidence that he could realistically resume work for the respondent, being unaware that the business had been sold. In my view a reasonable period of notice for a managerial employee such as the applicant to obtain further employment would have been in the order of four months. It is appropriate therefore that the employer pay a further 3 months’ pay by way of compensation for this unfair dismissal. I order that the respondent Mayne Group Limited pay to the applicant that sum within 14 days. The applicant foreshadowed a costs application. If that is to be, the application should be lodged within 14 days after the release of this decision. B.J. BLADES, Commissioner. Hearing Details: 2003 17 & 18 March Appearances: Mr J. Murdoch, Senior Counsel, instructed by Blake Dawson Waldron, for Mayne Group Limited. Mr D. O’Gorman, Counsel, instructed by Lees Marshall Warnick, for the Applicant. -- 5 of 5 --