Chapman v Emcorp Distributors [1994] QIRC 5 (1994) 145 QGIG 221

220 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE [28 January, 1994 28 January , 199 4] QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 221 ########################### ## ########### ########## # # QU EE NSLAND IND U STRIAL RELAT IONS COMM ISS IO N Industrial Relatio ns Act 1990 s. 174 - appli cat i on for reinsta temen t Geoffrey Joh n Chapman AND Emcorp Distributors (No . 8565 of 1993) COMMISSION ER FI SHER 1 7 Januar)' 1994 Termination of Em ployment - Summary Dismis sa l - Payment i n Li eu of Not ice - No Summary Di smissa l - Ev idence - Conflict oi Ev idence - Con ti nuity of Serv ice - Counselling re Expenses - Written Warn ing Withdrawn Sto ck Removal No Docu ment at ion - Breach of Company Policy - Ser ious Misconduct - No formal po l icy re stock exchanges - long Serv ice Leave Ent itlemen t Wi thheld - Arbitrated Matt er - Refe rence to Case l aw - Ser io us M iscon duc t Not Fou nd - Ap plication for Re instatement Refused - App lication for Costs - Costs Refused - Pa r ti es lO Con fer re Su perannuation and long Serv ice Lea ve. DECISON Th i s is an application for 1he rei nstaIemen t of Geoffrey Ch ap m an to his former p osi tion of Sales Manager w ith Emcorp D istribuIors. Disagreement exists betwee n the parti es over Mr Chapman's length of employment given his chequer ed employmen t historf through a changi ng Company structure. Mr Ward, w ho appeared for Mr Chapman, cont en ds that the length of se rvice was some eleven ye ars, th ree and one half mon ths. Con trary to this, M r M i ller w ho appear ed for the r es ponden t, challenged the no ti on that Mr Chapman's service was con ti nuous but wa s unable to produ ce direct evidence to counter Mr W ard's cla im . To i llustrate the r easo ns th ese differences emerge, the Com pa ny structure an d Mr Chapman·s employment history w i ll be outlined. M r Ch ap m an commenced empl oy ment on 1 Ju ly 1982 w i th THM Electrical. The Commission under stands th at at t ha t time the Company was owned by GWA Ud w hich also owned other electrical b us in esses , viz, Haym an 's Electrical, TH Mar ti n and Track son ' s. It seems that on or about 1984, THM E!ec tri ca l and ti ayman·s Electri ca l were sold to MM El ec1 rical Merc handising (MM Electri ca l ). T HM Electrical was subsequently renamed, Emcorp Distributors. This is the Company w i th wh ich M r Chapman wa s employed at the time of his di sm i ssa l. There seemed to be no di spute between rhe parti es that a transm ission oi business occurred. M r Chapman 's career has been punctuated by te rm inations of emplo)'m en t and, as a result, disputes over con ti nuity of serv i ce ari se . In or about 1986, M r Chapm an 's services were te rminated by the State Manager however, the General M anager of T HM El ectrical decided to reinstate him. Ap parent ly M r Chapman was di re cted to t ak e eight weeks annual leave and on his return from l eave commenced employment w ith Hayman's Electrical. Mr Ch ap man savs that the Gener al M an ager agreed to reta in hi ~ cont inuity o( serv i ce so that e nt itlemen ts such as long serv i ce !e ave. and superannu at ion were not interrup ted . Towards the en d of 1989, M r Chapman r es igned from Hayrnan's Electri ca l to ass ume a posi ti on w ith the rival breakaw a)' company, Id ea l Electrical. O nce aga in, Mr Chapman was recru ited back to Hayman 's w ith no br eak i n con tinuity of service. In or about 1991, M r Chapm an was appoin ted to th e posi tion of Sales M anager, Q uee nsland w i th Emcorp D istributo rs, a division of MM Electri cal. To f urther support the co nt en tion that se rvice had been conti nuous, ev id en ce was produced in the form of a meda ll ion of live years se rvice given to Mr Ch ap man in 1987 and a ten yea r se rvice award bes towed by MM Electrical. This certifica te, signed by G ordon Cockl ey , Gener al Ma nager of Emcorp Distributer s, reveals that on 1 Ju ly 1992 Mr Chapman completed his te nth year wi th MM Electrica l. In add ition, in mid 1992, Mr Ch ap man sought confi rmation of his cont inuity of serv ice w ith MM Electrical. By memorandum dated 31 July 1992, Mr Chapman was advi sed of hi s co ntinuity of serv ice and that his anniversary date w as 1 July 1982 ior lon g service leave purpo ses . To some exten t witnesses called by the Company attempted to rely on the ci rc um stances i nvo lved i n M r Chapman·s dismi ssal in 1986, his subsequent res ignation and raised a series of allega ti ons concern i ng aspects of Mr Chapman's behaviour over the years of his employmen! to demonstrate di ssa1i sfacti on wi th his se rvi ces. M uch of this was h ea rs ay wh il st other al legations cou ld no t be su bs tan ti ated. In final submissions Mr Mille r however, did no t rely on these episo des to bo lster his client's case. Although this evi dence may have been in the nalure of ·scene setting", it is i rrelevant for the p ur pose oi decidi ng w he1 her M r Chapman 's dism issa l in 1993 was harsh, unI·ust or unreasonabl e. Wh il st it i s clear that Mr Chapman's emp oyment w as in terrupted tw ice - once invol untari ly and the second ti me vo luntarily - ultim ate l y, Mr Chapman conti nued in employment and the evidence show s that neither t hese te rmi nations no r any other aspec ts of his performance were i nclu ded in the Company's de libera tions at the time of the 1993 d i sm i ssa l. The reason given for the dismissal which occ urred on 11 O ctober 1993 was that on 4 October 1993 M r Chapman had stock in his ca r wi tho ut the relevan t paper wor k. The view adopted by the Com pa ny at that time was that Mr Chapman was summari ly dismissed fo r serious misconduct. M r M i ller acknowledged however, tha1 the dismissal cou ld no t be interpreted as su mmary given tha t th e Comp any paid Mr Chapman one mon th's sa lary in lieu of no ti ce. The Comm iss ion concurs wi1h Mr M i ller's pos it ion. Mr M il ler al so sa id that the event w hi ch occurred on 4 Oc tober 1993 wh ich cu lm i nated in the dismi ssal had lO be see n in the co ntext of a se ries of even ts wh ich had occurred in the preceding fifteen months. Whilst the evenl of 4 Oc tober was su fficie nt in i tse ll to warranI th e decision to d,sm i ss, it wo uld be inappropriate to ta ke one even t out of i ts context. The incident leading to th e di sm issa l w i ll be ca nvas sed more fu lly later in this decision. Other matters wh ich had led to discip li nary ac tion aga in st M r Chapman in 199 2/ 1993 in vo lved parti cu lar expense cla ims su bmitt ed by him. The circum stances surrounding th i s ac ti on prov i des part of the context to wh ich M r Mi ll er referred . Mr Cockl ey said that he was so concerned abou t th e lev el of ex penses clai med by M r Ch ap man tha t he asked M r Chris Robson who was then emp loyed as Internal Audi t Ma nager of M M Electrical to conduct an audit of certa in of tho se expenses clai med. The ou tcome of Mr Ro b so n 's review w as co ntained in a report w hich re vea led several i ns tances wh er e, co ntrary to Company po li cy, amounts in ex cess of $ 1o we re not su p ported by receipIs. The other se rio us i ssue identi fied by the report was the possibi lity that M r Chapm an had falsely claimed ex pen ses by su bmitti ng recei pts wh ich did not vouch the expen ses . The Company believed that l vt r Chapm an h ad altered receipts by removing the date and name of the restauran t to match the expendit ure cl ai m ed . After perusing this repo,t M r Cockley wa s of a mi nd to dismiss Mr Chapman for di sh onesty bur w as di ssua ded from this course by the General Manager of MM Electrical. Mr Cockley, w ho is based in Sydney, travel l ed to Brisbane to meet w i th Mr Chapman to di scuss the iin di ngs of Mr Robson's review. Also p resen t at the meeting was the then A dmin istration Ma nager and Mr Chapman's supervi sor. M r Chapman sai d in evidence that he did not muti late rece ipts as clai med by the Company; he was unable to obtain receip ts w hich incl uded the venue and the date . M r Chap ma n, in answer to questions from Mr Ward, al so explained the exp enses claimed in excess of $1O an d provided reasons as to why receipts were not available. -- 1 of 3 -- 222 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE [28 January, 1994 Mr Cockley and Mr Chapman disagreed over whether a copy of Mr Robson's report was produced to Mr Chapman at the meeting. Mr Cockley was clear in his evidence that it was given to Mr Chapman whilst Mr Chapman said the first time he saw it was a few days prior to the commencement of the reinstatement hearing. Mr Chapman and Mr Cockley also disagreed over whether Mr Chapman was warned about his offending behaviour. Mr Cockley said he told Mr Chapman that if there was any repeat of the incidents he would be dismissed. He also said the seriousness of the meeting and the issues discussed should have left Mr Chapman in no doubt that he was being warned. Mr Chapman denied being given a first warning but conceded that Mr Cockley told him not to repeat past behaviour and informed him of the way he wanted expenses documented. A written second warning was issued to Mr Chapman by Kevin Finneran, Queensland State Manager of Emcorp Distributors on 25 May 1993. Two issues were raised in this warning, viz, playing at an electrical golf day in Rockhampton without prior approval and claiming expenses allegedly incurred in Rockhampton with a receipt from a Brisbane restaurant with the name and date removed. After refusing to sign the second warning, Mr Chapman responded in writing disclaiming any knowledge of a first warning and responding to the other incidents raised by Mr Finneran. This led to a meeting between Messrs. Chapman, Finneran and Cockley on 1 July 1993 where Mr Chapman explained he was unaware the golf day was scheduled until his arrival in the town. He attempted to contact Mr Finneran to seek his approval but Mr Finneran was not in the office that day. Mr Chapman decided to play and said he made $15 000 worth of sales as a result. With respect to the disputed receipt, Mr Chapman admitted the receipt did not match the expenditure but defended his action by saying that the actual expenditure exceeded the amount claimed. Additionally, in evidence he claimed that he had committed a genuine error in submitting the wrong receipt. At the conclusion of the meeting Mr Cockley agreed to withdraw the second warning so as to "clear the decks". Mr Cockley said in evidence that his decision to withdraw the warning was conditional upon Mr Chapman "stopping the nonsense", i.e., not submitting claims which could not be supported by the proper receipts. The minutes of the meeting do not reveal the withdrawal of the warning being conditional nor does Mr Cockley's recollection tally with that of Mr Finneran or Mr Chapman. Subsequent to the dismissal a further expense claim submitted by Mr Chapman came to light. Mr Chapman claimed expenses of approximately $121 being for dinner for himself and a Mr Murphy and a Mr Cook of Hayman's whilst in Bundaberg in April 1993. The Company discovered that Mr Chapman did not in fact have dinner with the two gentlemen as claimed although they were dining in the same restaurant. Mr Murphy was hosting an evening for customers and his Branch Manager. Mr Chapman in evidence said that the expense claim related to a meal for himself and several rounds of ports and liqueurs when he and his companion joined the table of Mr Murphy and his guests. This was disputed by Mr Murphy who gave evidence that he had paid for post dinner drinks for the table including Mr Chapman. He tendered his receipt for the evening however, this document only gives the total bill. Mr Miller relied on the notion of after acquired knowledge to further justify the decision to dismiss. Mr Miller contended this episode was further evidence of behaviour by Mr Chapman which was not condoned by the Company and for which he had been specifically warned. Turning now to the events of 4 October 1993 which precipitated the dismissal. In September 1993, Mr Chapman received a telephone call from the Manager of the Bundaberg Hayman's store, Mr Cook, asking for certain goods to be exchanged when Mr Chapman next visited the town. Mr Cook advised Mr Chapman that he had approximately 15 - 20 ceiling fans and a quantity of multimeters to be exchanged for fast moving items. Mr Chapman estimated the value of the goods to be between $2 500 and $3 000. Mr Chapman could not attend to Mr Cook's request immediately as he was proceeding on annual leave. In the week of his return from annual leave Mr Chapman planned to travel to Bundaberg. On the Monday morning Mr Chapman went to the warehouse where he removed a quantity of residual current devices (RCD's} as replacement stock for Mr Cook. Mr Chapman placed these items in his car and then proceeded to undertake his other visits around Brisbane. As he was out and about during the day Mr Chapman said he realised that he had insufficient RCD's as an exchange for the quantity of goods indicated by Mr Cook. On his return to the Company premises, he removed a further quantity of RCD's from the warehouse. He admitted that he had not raised any paperwork in connection with the removal of the goods nor had he advised other Emcorp staff of his actions. The Company's evidence is that Mr Chapman was observed as "acting strangely" that morning, both in his demeanour and activities within the warehouse and the route taken to his car with the stock. This raised suspicion in the minds of a certain staff member who ascertained that paperwork had not been completed to accompany the removal of the RCD's. A report was then made to the second in charge of Emcorp. Word had obviously got around Emcorp about Mr Chapman's "strange" behaviour because on his return in the afternoon he was observed by another employee who reported Mr Chapman's further removal of goods to the same officer. In the absence of the State Manager, Mr Finneran, from the office, the matter was delegated to John France, Sales Manager for Hayman's Electrical by Mr Cockley who had been contacted in Sydney with a report of events by Mr France. With this authority Mr France confronted Mr Chapman in the Emcorp office area. Mr France's evidence is that he told Mr Chapman he thought he had some boxes of RCD's in his car which had not been booked out. Mr France said that Mr Chapman coloured, then said they were for a contractor. On questioning him further, Mr Chapman said they were for a contractor "up north". Mr France pursued the point by asking which contractor. Mr Chapman then said they were for the Bundaberg branch being "a swap for Cookie" (i.e. Mr Cook, the Manager of the Hayman's store}. Mr France informed Mr Chapman that he should be aware that stock was not removed without paperwork and "this was not the first time it had happened", referring to the earlier instance that morning. Following the exchange with Mr Chapman, Mr France contacted Mr Cook about the goods required and their value. It seems Mr Cook estimated their value as approximately $1 500. Mr France then inspected Mr Chapman's car and concluded that the quantity of RCD's far exceeded the value of goods required to be exchanged by Mr Cook. Mr France believed the matter to be of such seriousness that a record of interview was written by him which was signed by both Mr France and Mr Chapman and witnessed by another employee. The next day, Mr Robson, Mr Finneran and Mr France further interviewed Mr Chapman. Mr Robson accused Mr Chapman of stealing and, according to Mr Finneran, Mr Chapman admitted that he knew his actions contravened Company policy. It was not until this day that the RCD's were taken from Mr Chapman's car. Over the next few days, Mr Cockley and Mr Finneran further investigated the sequence of events which occurred on 4 October 1993. On 11 October Mr Cockley interviewed Mr Chapman and asked him twice if he had removed goods without first completing the required paperwork. Mr Chapman admitted he had done so. Upon receiving this confirmation Mr Cockley informed Mr Chapman he was summarily dismissed for taking goods out of the store without paperwork. From evidence given to the Commission, the investigation undertaken by Mr Cockley and Mr Finneran revealed that during Mr Chapman's absence on annual leave, Mr Cook had submitted paperwork detailing the quantity of goods and their value for exchange. This documentation shows that the value was significantly less than that believed by Mr Chapman at the time of his telephone conversation with Mr Cook in September. Mr Chapman did not check the Company records on his return from annual leave so was unaware of this documentation. The Company called evidence from a Sales Representative to inform the Commission of the Company's procedure in respect of exchanges of goods and the removal of stock from the store. It was said documentation is required to support any removal of stock from the store or, if for some reason this documentation is unable to be completed prior to the removal of the stock, another employee is to be informed of the quantity of stock to be taken and its destination. This evidence, which was also supported by 28 January, 1994] QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 223 Mr Finneran, also revealed that no written procedure exists in relation to exchanges; the procedure is one of custom and practice, however, it appears that exchanges of goods are infrequent. Whilst a written policy exists for stock on loan, a specific policy has not been written for exchanges. This evidence contrasted with evidence called by the applicant from a former employee of Emcorp. This employee attested that it was usual practice to effect the exchange and then to complete the necessary paperwork within a week. This witness had left Emcorp's employ in February 1992. In his evidence Mr Chapman said it was his intention to complete the relevant documentation on his return to Brisbane in accordance with usual practice. The Company however, produced evidence to show that Mr Chapman had not effected any exchanges of goods over the previous 12 months - or at least had not completed documentation to support such exchanges if they had in fact occurred. With respect to removal of goods from stock, a written procedure exists for the Hayman's stores but it does not appear to have been formally adopted by Emcorp. The Company attempted to argue that because the policy existed for Hayman's and Mr Chapman was formally an employee of Hayman's, then Mr Chapman should have known of and adopted that procedure. It was also submitted that a policy of Hayman's was a policy of Emcorp. I do not believe this is a reasonable position to adopt as the evidence clearly indicates that Emcorp and Hayman's at the relevant time were operationally separate. It is apparent Emcorp did not have any documented procedures in place to cover exchanges of goods. The Company also attested in evidence that stock losses were occurring (significantly in RCD's} and employees had been collectively informed by Mr Robson of the importance of raising paperwork or at the very least advising another staff member when goods were to be taken from the store. Additionally, sales representatives cars were routinely checked to ensure that unaccounted stock was not present. Mr Chapman had assisted in rebuking an employee who was found to have unaccounted goods in his car. The Company submitted that against this background, Mr Chapman would have known the importance of paperwork to account for stock movement. The Commission accepts that it is important for a company to be able to account for stock at all times so that stock movement can be traced. Despite Mr Chapman saying it was his intention to complete the documentation on his return from Bundaberg, the Company's concern over the possible loss of stock was understandable. I now turn to the consideration of the fairness of the dismissal. Much was made by Mr Ward of the Company's failure to have in place written procedures and to follow approved procedures in respect of termination of employment. Reference was made by Mr Ward to a memorandum issued by MM Electrical on 4 November 1992 setting out the procedure to be followed in cases of unsatisfactory performance leading to termination. This procedure provides that an initial warning should be given leaving the employee with a clear understanding of the performance level expected and the action needed to be taken to meet the expectations. A review date should be set to monitor progress approximately four weeks after the discussion with both the manager and employee initialling the diary entry. If, at the review date, performance has not reached expectation, then a formal written warning must be issued clearly indicating that dismissal will occur. The warning is to be acknowledged by the employee. In the event of failure to improve, then at the next scheduled review, dismissal should occur. Mr Ward contended that the Company had failed to comply with its own procedure in the following ways:- (i} not issuing a first warning or alternatively not issuing it in a manner clearly understood by Mr Chapman; (ii} not setting a review date; (iii} issuing a second warning and later withdrawing it thereby resulting in a situation where it is questionable whether the employee has even received a first warning. In light of the explanations given by Mr Chapman concerning the matters raised by the Company and the failure of the Company to follow its own procedures, Mr Ward submitted the only conclusion the Commission could reach was that the dismissal was harsh and unfair. The Commission has given attention to the matters raised in evidence and submissions. I accept that the Company had valid concerns about the expenses claimed by Mr Chapman over a period. Despite Mr Ward's assertions that Mr Chapman was able to explain discrepancies and Mr Chapman's statement that the Company paid all claims - even those which were queried - it is apparent that the Company was entitled to the view that, in their words, Mr Chapman was "fiddling" his expenses. Mr Chapman certainly appears to have had an unhappy knack of being unable to obtain receipts with the name of the restaurant and the date identified. From Mr Cockley's evidence it appears the Company followed another procedure in warning employees prior to November 1992. This earlier practice involved issuing two verbal warnings prior to a third written warning being issued but Mr Cockley could not point to any documented Company policy to support this procedure. The Commission notes that the memo setting out the procedure for termination of employment upon which Mr Ward relies, post dated the August 1992 meeting. The Commission is of the view that Mr Chapman was left in no doubt as to what was required of him by the Company. His evidence is clear on this point: no expenses in excess of $10 could be claimed without supporting documentation and all expenses had to be accompanied by the relevant receipt. Further, the Commission believes that the seriousness of the situation would have been impressed upon Mr Chapman by the mere fact that Mr Cockley - the General Manager of the business, domiciled in Sydney - came to Brisbane to discuss Mr Chapman's expenses with him in the presence of two other senior employees. One would not think this would be a routine occurrence. It is apparent that at the August 1992 meeting Mr Cockley did not explicitly use the term "warning" as contemplated by the November 1992 memorandum so that Mr Chapman clearly understood disciplinary procedures were involved. Further, no documentation of any warning being issued exists. The Commission believes however, that at the very least, Mr Cockley "strongly counselled" Mr Chapman about his unsatisfactory behaviour. Yet in the face of a clear understanding of what was required, Mr Chapman, on one further occasion that could be precisely identified by the Company, submitted a receipt from another venue which did not vouch the expense claimed. Whilst Mr Chapman said that his actual expenditure exceeded the amount claimed, his actions in submitting the receipt contravened a direction from his General Manager which Mr Chapman acknowledged receiving. The Commission has difficulty in accepting Mr Chapman's evidence that the inclusion of the receipt from a Brisbane restaurant to cover an expense incurred in Rockhampton was a genuine error. This evidence is in complete contradiction to his explanation contained in his written response to the second warning. On any construction, Mr Chapman clearly acknowledged that the receipt submitted did not vouch the expense. Moreover, given that the response was written contemporaneously, the Commission believes that it should be preferred to the evidence expressed in the witness box, several months after the event. With respect to Mr Miller's submission that the claim for the Bundaberg dinner which came to light after Mr Chapman's dismissal should be regarded as after acquired knowledge to be relied on to justify dismissal, the Commission has a particular difficulty. Mr Miller indicated that if this matter had come to light during Mr Chapman's employment, then it is likely dismissal would have occurred at that point. Mr Miller's concern is predicated on Mr Chapman's claim to have had dinner with Mr Murphy and Mr Cook yet clearly not having done so. The Company believes Mr Chapman paid for his meal and that of his companion and then sought to claim the expenditure on the grounds that it related to dinner for himself and two clients. Whether this belief is valid is unable to be established on the evidence before the Commission. Certainly there is no doubt that Mr Chapman did not have dinner with Mr Murphy and Mr Cook as originally claimed: this was freely admitted by Mr Chapman in evidence. However, the account tendered by Mr Murphy is inconclusive and the versions submitted by both Mr Murphy and Mr Chapman are equally plausible. -- 2 of 3 -- 224 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE [28 January, 1994 In anv event, the Commission does no t need 10 deci de wh i ch expl ana tion should p re vai I. Mr Chapman's ac tions in claiming expenses io r m ea ls wh ich were not consumed further evidences unsatisfactory behaviour over wh ich Mr Chapman had been speci fical ly counsell ed. My concern over the rel iance on after acquired knowledge is th at the dinner in question took pl ace on 30 April 1993 . The claim was submitted on 4 May 1993. If the matter had come to light during Mr Chapman 's employment then it seems more likely th at it wou ld h ave been encompassed by the second wa rn ing issued on 25 May 1993 whe re the ea rlier epi sode was identifi ed . T he i ss ue surfaced follow ing an audi t of expenses after M r Chapman 's departure. Given that th e Company had such ser ious misgivings about Mr Chapman 's cla ims for expenses, it is surprisi ng that th e Company did not pay close attention to claims submitt ed for approval. W i th the exception of the Brisbane receipt (to wh ich Mr Finneran was alerted by a Hayman 's Manager an d wh ic h w as subsequent ly pa id) all expe nses con ti nued to be pa id w ithout quest ion. It may have been that confronted wi th two instances of questi onable receip ts the Company may have acted to di smiss. This may h ave been understandable but i s pure speculation. An alternative view is t ha t the second warn i ng wo uld have addressed the issue as by this time th e written termination procedure was in pl ace. In any event, th e Bun daberg i ncident occurred p rio r to the second warning al though it only came 10 t he Co mp any's attention after t he di smissa l. No repeat of the offending behaviour regarding expense clai ms was found by t he Company to have happe ned past 25 May 1993 . In an ea rlier case (see 141 QGIG 909) the Commission accepted relian ce on after acqu ired knowl edge by an employer. The Commi ssion does not resi le from that vi ew . However, in the circumstances of this case, the Commi ss ion does no t believe that th e Bun daberg receipt can be rel ied on to further j usti fy th e dismi ssal. The Commission is then confronted with a si tuation whe re the employee was "coun se lled" about his expenses and i ssued wi th a "second warn ing" {s ubsequently w it hd rawn) touching substantially t he same matter, so me 9 m onths later. On the subject of whether the withdrawa l of the second warn ing was conditional, the Commission is of the view that aga in Mr Cockl ey was not expl ic it. Wh ilst it is reaso nable to assume th at 1he rationale for the withd rawal was on the grounds that th e offending behaviour did not reoccur and that M r Chapman wo rk ed in accordance with Company po licy, this was nol speci fical ly sla ted at the time. Th e end res ult was tha t t he "second" warn ing did not re main on Mr Chapman 's record. Agai nst the background oi one counselling for which th ere is no w ri tte n not at ion, t he employee is then d is mi ssed for not fol lowing correct co mp any procedures for removing stock fr om the store. Th is behaviour wa s viewed by the company as consti tuting se ri o us misconduct. Wh ilst Mr M iller asserte d he was unclea r over wheth er long service le ave was withhe ld because of the Act prov isions regarding serio us mi sconduct or uncertainty over continu ity of serv i ce, the evidence of Mr Cockley is that it was for th e former reaso n. The handwritten termination payout also sta tes that long serv ice leave was not paid "becau se of the re aso n for dismissal". I th us proceed on that bas i s. Concern over Mr Chapman's act ions ste ms from a range of i ssues . These are: a history of si gn ificant losses of RCD's from the sto re; Mr Chapman's alieged "strange" behaviour in the warehouse; an d previ ous concerns abou t Mr Chapman 's hone sty, so me of which have been identifi ed in this dec isi on. Added to these factors is Mr Chapman' s re actio n to Mr France's confronting him and his responses to th e que s1ions asked . I accept the evidence of Mr France w ithout reserva ti on. Against this backd ro p, at least one sen i or emplovee openly acc used Mr Chapman of stealing. But th eft was not the ultimate reason for the dismi ssal; the much le sse r charge of breach of company policy was substituted. If the Company had a cl ea r policy on exchan~es of stock w ith such po licy be ing communi ca ted to statf, then it may be that M r Chapm an could be considered to h ave seriously m isconducted himsel f. As I have alrea dy commented, the su bmission that becau se a po licy applied at Hayman's it automatically appli ed to Emcorp is resisted. Whilst staff may have been verbally advi se d as to the pro cedure to be fol lowed for re moval of stock from the store, I do not beli eve this equates w i th a fo rm al policy clearly communi ca ted to all sta ff. In trying to underst an d the phrase serious misconduct, assistance ca n be ga ined from a dec is ion of th e V ic torian Industria l Appeal s Court in Knott v Carlton and United Breweries Ltd which was ci ted in another decision by that Court in Tucker v Benoit (17 I IB 516). Th is latter decision rela ted to fa il ure to pay acc ru ed long service leave enti tleme nts to an empl oyee summarily dismissed for seeking other employment and taki ng tools from the employer's factory wi th out pe rmission. Th e word "m isconduct" was initi all y con si dered. T he Court in referri ng to t he decision of Knott above, cited the foll ow ing passage in relation to the meaning of the word " mi sconducl":- "The basic word is of course 'm is conduct'. The word is not apt to describe a breach of contract and is more appropr iate to de scri be gen era lly some reprehensible or culpable activity. However, it is quite clear on analysis that the word is use d in the Act so lely in relation to conduct with co nsti tu t es a breach of contract of service. It is cl ear therefo re th at the wo rd is in te nded to describe a particu lar type of breach of contract, namely, one which accordi ng IO the curren t and gen erally accepted moral standards of t he communi ty would be rega rded as reprehens ible and deserving of censure in t he ci rcumstances.". The Court in examining the meanin g of " ser ious" in the context of composite ph ase "se ri ous and wi lful m iscon duct" agai n re fe rred to th e decision in Knott's case an d sai d, "The wo rd ' se ri ou s' is the m ea suring rod for the gravity of the misconduct. Al l the elements of the conduct called into question must be taken into account including t he probable effect of t he conduct upon th e safety and well being of the employer's busi ness, his property and other employees, the fact t ha t the conduct is in b rea ch of a regula tion, an award or determination and al so the sub jective elements such as the k now l ed ge and sk ills wh ich the worker ought reasonably to have possessed an d the moti va tion and general sta te of mi nd of the worker at t he tim e. ". In the ci rcum stances of the c ase now before m e, i t seems that the two elemen ts of d ir ect re levance are t he probable effect of Mr Chapman's cond uct upon the safety and we ll be ing of t he employer's proper ty an d h is general state of mi nd at the time of the inciden t. The Company appeared 10 be concerned about t he potential loss of stock as a resul t of the re being an absence of documentatio n to in di cate its movemen t. Given Mr Chapman's understanding of the exchange as a res u lt of th e con versa tion w ith Mr Cook in Sep tembe r, his having no knowledge of th is sit uation having been altered and the Company's l ac k of action in immediately retrieving th e goods from M r Cha pm an 's car, I am satisfied that t he safety of the RCD's we re not endangered wh i ls t in M r Chapman 's custody. The other aspect i s the mi nd set of the employee. Mr Chapm an 's reaction to Mr France by apparently attempting to cover up his act io ns arouses a susp icion in the Commission 's m ind. O n balance I am sat isfied that Mr Chapman·s actions were not in blatant disregard of the employer's property rights. For th ese reaso ns I do not accept that Mr Chapman's con du ct cou ld be constr ue d as serious mi sconduct. Th e qu es tion remai ns of wh ether M r Chapman' s actions on 4 October 1993 constitute m isconduct as detined by the Cour t. Applying th e test identifi ed by the Court to the evidence befo re me the Commission harbours res ervations tha t a charge of misconduct could be sustained. Ea rl i er in this decisions, t he Commi ss i on disposed oi the v,ew tha t t he te rm i na tio n of e mp l oy m en t was in the nature of a sum m ary dismi ssal. Th e groun ds of ser ious mi sconduct for the d is mi ssa l have al so been re j ec ted. St ill to be considered i s t he fai rness of t he dismissal. In Re Loty and Holl ow ay (1971) 71 N.S .W .A. R. 95, the approach of an industrial tri bu na l exercising i ts unfair di sm is sa l jur is diction was descri be d as fo llows: "The objective in these cases is always industrial justice and to this end weight must be given in va rying d eg rees according to the re quirements of each case as to the importan ce but not the inviol ab ility of th e right of t he employer to manage his busi ness, the nature and qua li ty of the w ork in question, the circum5tances surrounding the di sm i ssa l and t he likely outcome if an order of reinstatement is made.". (p. 99) 28 January, 1994] QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE In Woo l wo rth (South A ustra l ia) v Schultz (1985) 52 S.A. I .R. 2 81 the approach to the question of fa i rness was described by the South Aust ra li an Indu strial Comm is sion as follows: "In app roa ch ing i ts duty the Commission ... [i s] required to deter mi ne whether the re was a fa ir and reasonable explanati on for th e d ec ision to dismiss which, viewed ob jectivel y, wo uld be rega rded by fa ir-minded per sons as being a tot al ly leg i tim ate rea son for t he action ta ken.. It is not for this Comm iss ion simply to su bs titute i ts own opinions for that of t he employer. It w ill on ly intervene where it is necessa ry to protect an employee against a harsh, unjust or unreasona bl e exerc ise of the employer's right of dismi ssal; that is where the employer ha s ab used his right to di sm i ss an employee.". (p. 287) These principl es h ave also guided this Commission in exercising i ts juri sd iction under s. 175 of the Act and its predecessors. I have considered the matter at lensth and have concluded that the Commi ssion should no t interlere with the empl oyer's decision to dismi ss . A persuasive factor in my deliberati on s was M r Chapman 's initial unsatisfactory explanations of the sit ua tion. Although I ha ve rejected the view that Mr Chapman had dishonest intentions, h is response aroused r easo nable doubt an d suspicion in the mind of the Company. Over the preceding fifteen months, t he Company had confronted Mr Chapman wi th concerns which essentially challenged his integrity and wh ich affect the fu nd amental element of trust in the empl oyer/employee rel ationship. Th us, when viewed in the context of his recen t employment h is tory in relation to his expenses, this Commission does not perceive t he employer's decision as being unfair or as an abuse of power. Accordingly, the Comm is si on ref uses the applicat ion. Having refused the claim, the Commission needs to respond to Mr Mi ll er's submission that t he cla im was fr ivolo us and costs should be awa rded to his cli en t. My fi ndings do not support this conclusion. Altho ugh M r M ill er argued th at the Com mi ss ion h ad no jur isdi ction to order the Com pa ny to pay lo ng service l eave, in my vi ew t he settlement of outstanding claims for long service le ave and superannuation wo uld appear to be open having re jected t he su bmi ssi on that t he dismissal was on the bas i s of se ri ous m isconduc t. Further, un l ess addition al materia l can be produced by the Company, on the evidence before me, I be lieve th at continu it y of se rvice was reta ined d espi te the in te rruptions which occurred. I would formall y recommend that th e parties con fe r over the i ssu es of lo ng service leave and superan nuati on. A conference before a member of the Commission could be sough t if the matte rs remain unresolved. O rder accordi ng l y. G.K. FISH ER, Commissioner Appearances: - M r B. W ard oi Bowdens on behalf of M r G. C ha pman (a ppli ca nt) Mr D . M ill er of Feez Rut hn i ng an d w it h him M r G. Cockl ey on behal f of Emc orp D istri bu tors. Operative Da te: NIA Decision: Rei n sta temen t Rel ea sed: 18 January 1994 22 5 -- 3 of 3 --