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SCA Hygiene Australasia Pty. Ltd v Vodo [2015] FJHC 1010; ERCA 01.2013 (15 December 2015)

IN THE EMPLOYMENT RELATIONS COURT
AT SUVA
APPELLATE JURISDICTION

CASE NUMBER: ERCA01 of 2013

BETWEEN:

SCA HYGIENE AUSTRALASIA PTY. LTD.
APPELLANT

AND:

PENI VODO
RESPONDENT

Appearances: Ms. Lowfor the Appellant.
Mr. V. Maharaj for the Respondent.
Date/Place of Judgment: Tuesday 14 December 2015 at Suva.
Coram: Hon. Madam Justice A. Wati.

JUDGMENT

Catchwords:
Employment Law – Appeal –unlawful and unfair dismissal – factors to be considered for unlawful dismissal and unfair dismissal – cause and correct procedure must be established by the employer to make the dismissal lawful- the manner of treatment provided to the worker is looked into to assess the fairness of the dismissal-assessing remedies.

Legislation:

1. The Employment Relations Promulgation 2007 ("ERP"): ss.33;34; 230.
   

Cause and Background

1. The appeal arises out of the decision of the Employment Relations Tribunal ("ERT") of 7 December 2012 wherein it was found that the employee Mr. Peni Vodo who was summarily dismissed from his employment on 14 November 2011 was done so unlawfully and unfairly.
   
2. The employee was awarded the remedy of $27,500 to be paid within 28 days as compensation in lieu of lost wages. This sum represented two years wages for the employee.
   
3. Mr. Peni Vodo was employed as an engineer. He commenced his work with Carter Holt Harvey (Fiji) Limited which was taken over by the appellant company. The commencement of his employment was on or around June 2001.
   
4. Mr. Peni Vodo was summarily dismissed on 14 November 2011. The termination letter provided to him sets out the reasons and the cause for which he was terminated. It reads:
   

"Dear Mr. Peni Vodo

Termination of Employment

This letter confirms termination of your employment with SCA Hygiene Australasia with immediate effect.

I refer to our meeting on 1st November 2011 which was attended by your union representative Mr. John V. Mudaliar. During the meeting we discussed on the incident that took place on 9th October 2011.

This meeting was attended by Mr. John V. Mudaliar and we spoke about breach of house rules # 14 on 9th of October 2011.

As discussed during the meeting, your conduct during the incident:

• was willful or deliberate behaviour by you that is inconsistent with the continuation of your employment with us.
  
• was conduct in the course of your employment engaging in intent to commit theft.
  

On 9th October 2011, you were observed to have instructed an employee named Vereniki Nailolo to falsify your timecard. Falsification of timecards is regarded as stealing from the company and in this instance upon preliminary investigation it has been established that you have falsified your timecard.

Having investigated all of the facts and circumstances of this incident and following an interview with you at which time you were given a full opportunity to explain your actions and also taking into account your work history with us we are of the view that your actions constitute serious misconduct warranting summary dismissal.

Such conduct in our view amounts to serious and willful misconduct and your employment has been terminated immediately effective as 0f 14th of November 2011.

All outstanding pay and all entitlements will be forwarded to you/paid into your bank account. You are required to return all keys, data and information to the Maintenance Supervisor. Please ensure the return of all properties of the company that you may still have in your possession to enable us to process any dues that may be owing to you. Please find attached copy of your certificate of employment."

5. Succinctly, the reason for which Mr. Vodo was terminated was that he had instructed one Mr. Nailolo to falsify the timecard on 9th October 2011. That is the only reason that is enunciated in the letter of termination and no other. The employer says that this breaches house rule number 14 which prohibits falsifying of timecards and allowing someone else to punch the timecard.
   
6. On the relevant day the time card of the worker showed the following entries:
   

11 October 9 am 7.26

11 October 9 am 4.23

11 October 9 pm 8.00

11. ctober 9 pm 10.27
    
7. The quantum that was involved due to the falsification of the time sheet involved a monetary amount of $1.32 to $2.34 (as per ERT's calculation).
   
8. The employer says that the time entered by the employee does not match with the time of entry by the security officer Mr. Simione. The security officer had recorded 7.55 am as the time of arrival to work on the day in question when the worker had recorded the time as 7.26am.
   
9. The employee does not deny that he asked a fellow worker to punch in the time for him as he was called by telephone to attend to an emergency breakdown. He says that he was called on the day in question between the hours of 6am to 7am. He was asked to be picked up and he was ready to attend work. The pick-up was late so he asked one of the workers to punch in his time. He says that that had been the practice that he has followed in the past. The time that the worker normally gets paid is the time he is called on the phone. The payment starts from that time so in fact the timecard was not falsified.
   
10. Mr. Vodo says that the termination is baseless, misleading, unfair, unlawful and harsh.
    

ERT's Findings

11. On the question of the employer's allegation on falsifying the time of arrival, The ERT found that in the attendance register someone had initially written 7.50 am then changed it to 7.55am. The Attendance Register appeared to have been corrected by someone.
    
12. The ERT stated that this is very curious because according to the employer's witness the names of the workers are recorded as they pass security and an entry against that name the time of arrival is recorded.
    
13. The ERT found that the Attendance Sheet which was tendered in evidence as exhibit showed that one Lilesh arrived after Mr. Vodo on the day. The entry against his name was 7.50am. If Mr. Vodo who arrived before Lilesh has an entry against his name as 7.55am then that entry is suspicious. The employer's witness Mr. Chandra said that the security guard made a mistake.
    
14. The ERT found that the alteration is highly suspicious and appears to have been done to achieve consistency with the allegation against Mr. Vodo.
    
15. The ERT then made a finding based on the results of the following morning's results of 10 October 2011 and arrived at the conclusion that the daily attendance register and employee timecard appears fraught with errors. The ERT stated that the security's recording of time of 10 October 2011 shows variance between 2 to 7 minutes.
    
16. A finding was then made that the daily attendance register was not a reliable system and it was open to tempering as well.
    
17. Succinctly, the ERT found that the employer could not establish on the balance of probability that the time by Mr. Vodo was falsified as the attendance register was open to tempering and had errors in the recording by an independent person being the security officer.
    
18. On the aspect of Mr. Vodo asking someone to clock in his time, the ERT found that the system would have to be amenable to exception for example if the employee has to attend work at another location then someone else may have to enter the time. This does not mean that the act would be wrong or a compromise to the integrity of the system.
    
19. Even in this case, it was found that exhibit 7 showed that this worker had in that week failed to punch out his time when he was leaving the work place. Some other person had written the time as 12pm. That was not taken as anything wrong. In fact someone else had punched him out.
    
20. The ERT stated that terminating any employee for the reason that someone else punched in the time needs a good deal of attention.
    
21. The worker's timecard was approved by Mr. Sernande which verifies the attendance and time of work.
    
22. If the employee wanted to negate that Mr. Vodo's time keeping was fraudulent, Mr. Sernande could have been called to give evidence. Mr. Vodo was contacted sometime between 6.00 to 7.00am to work. In such a situation, he was on call and to expectingto be paid for being contacted at 6 o'clock on Sunday morning to attend to a work problem is not an unreasonable expectation.
    
23. Even if the allegation had any basis, termination was not the answer. A strong warning and explanation would have been a proportionate recourse to such actions of the employee.
    

Grounds of Appeal

24. The employer raised 12 grounds of appeal. They are that the ERT erred in law and in fact:
    
    1. In holding that the termination of the worker was unfair.
       
    2. In holding that the worker was not accorded the right to a fair hearing and disciplinary proceeding.
       
    3. By evaluating the uncontradicted evidence of punching of time card by another employee and holding that such act of the worker was not a serious misconduct.
       
    4. By considering the conduct of the worker in requiring another employee to punch card as not a gross misconduct on the grounds that the monetary loss to the employer was an insignificant sum.
       
    5. In holdingthat the conduct of the senior worker requiring another worker to punch his attendance card, when he was not at work,as an act which did not constitute gross misconduct.
       
    6. In determining the credibility of the employers witnesses when the material evidence of all the witnesses including the worker were consistent in so far as the misconduct was concerned.
       
    7. By placing an excessive weight upon the unsigned email which was received by the General Manager, when the e-mail was merely a complaint by a worker and not the conclusive finding of any misconduct on the part of the worker or any other employees of the appellant.
       
    8. In holding that the employer's grievance procedure and the committee appointed to evaluate the evidence including the evidence of the worker himself was not fairly constituted.
       
    9. By not holding that the worker being a leading hand, qualified engineer and with substantial experience was reposed trust and confidence and his misconduct tantamounts to betrayal and destruction of the trust and confidence.
       
    10. In awarding compensation in the sum of $27,500.00 which is equivalent to two years wages.
        
    11. In awarding compensation in the sum of $27,500.00 which sum is excessive and unsupported by the evidence before the Tribunal.
        
    12. By awarding costs to the worker.
        

Submissions

25. Ms. Low did not address each grounds of the appeal separately. She addressed the appeal in the form of a closing submission of the employer's case before the tribunal and what ought to have been the findings of the Tribunal. As such she did not make any specific argument in respect of some grounds.
    
26. She argued that Mr. Vodo had agreed that he had on the day in question physically arrived at work at about 7.50 am to 7.55am and he had asked an employee Mr. Vereniki Nailolo to punch his timecard. He therefore admitted that he breached house rule number 14 which prohibits falsifying timesheets or clocking another employee's timecard.
    
27. Having admitted the offence, gross misconduct was established. There are many cases which states that falsification of production or attendance records amounts to misconduct and theft to the employer. This view is supported by the common law.
    
28. Ms. Low agreed in the submissions that in a case of breakdown, the workers time resumes from the time the worker receives a telephone call for call - in to work. However she argued that Mr. Vodo, as a leading hand in engineering and senior staff, should not have asked the junior staff to falsify the time card. Due to his dishonesty the employee who punched the time card being Mr. Vereniki Nailolo was also terminated.
    
29. Mr. Peni Vodo had admitted that there was no need to punch the card if he was attending on a call in. He received a call between the hours of 6am and 7am for the breakdown. He was fully aware that he needed to attend work at 7.30am that day so he should not treat the call as a call- in. He attended to the problem at 2.00pm. So there was no emergency.
    
30. The respondent was supposed to be at work on 9 October 2011 at 7.30am. This was preplanned. At 7.26am he rang Mana, a worker in the engineering section under his supervision. He then asked Mana to pass the phone to Vereniko Nailolo to whom he wanted to speak to. He then told Vereniko Nailolo to punch his timecard. If he was to report to work at 7.30, he should not have made the decision to come before that time. He only did so to receive extra wages and he in fact did receive extra monies which he did not pay back. The amount that he defrauded the employer is not the issue. His conduct is one that is questionable based on which he was terminated.
    
31. It was also argued that when the allegations were raised he was given a fair opportunity to respond to the allegations and raise his defences. His responses were considered and some of the allegations in the original complaint was then withdrawn and one survived based on which he was terminated. He was accorded good faith and natural justice so there was nothing unfair about the termination.
    
32. Mr. V. Maharaj argued that the findings of the ERT were largely based on credibility of the witnesses and the appellate court will not very lightly interfere with that finding of fact.
    
33. It was further argued that Mr. Sernande had approved the timecard of the employee and that evidence was undisputed. If Mr. Sernande had verified the timecard, he should have been called to negate the entry made by or on behalf of Mr. Vodo.
    
34. The fact that Mr. Sernande was not called to give evidence is indicative that his evidence would not have favoured the employer.
    
35. The employee did not falsify and timecard. His entries were approved by the supervisor. If he had asked another to punch in the time was because he could not be at work on that time after being called by telephone to come to work. The employee is entitled to be paid from the period he is contacted by phone to attend work.
    
36. The findings of the ERT were correct and the appellate court must not disturb that easily.
    

Law and Analysis

37. I will deal with all the grounds of appeal collectively as it had been argued in that fashion by both the parties.
    
38. The employee was dismissed over an incident arising on 9 October 2011. The only allegations that are leveled against him is that he falsified his time sheet to 7.26am when the security guard clocks him to have arrived at 7.50am or 7.55am and that the employee had asked another to clock in his time.
    
39. There is no allegation in the termination letter that he was not supposed to be at work on 9 October 2011 or that he misused his office or powers to be called in before 7.30am when he was scheduled to start work.
    
40. The undisputed evidence is that he was called between the hours of 6am to 7am and informed about the breakdown. He asked to be picked up. There are no allegations in the termination letter that he cheated the employer by asking to be picked up and so any evidence in that regard is only of help to understand the background of the case and not to assess the lawfulness of the cause.
    
41. The issue is whether he falsified the timesheet. When Mr. Vodo was called between 6am to 7am, he was asked to be picked up. He was ready to be picked up. He sacrificed his personal time waiting to be picked up. The pick-upindisputably was late. The practice had been that the employee would be paid from the time he receives the call.
    
42. When Mr. Vodo notes his time to be 7.26am as arrival, I find it is more than generous on his part. He could have even been paid for even from before 7.26am because he definitely was called in before that time.
    
43. By any standard, the validity or prudency of Peni Vodo's decision to attend work that day before the scheduled time of 7.30 am is immaterial. He decided to come in and so his time should start from the actual time he received the call and that definitely would be before 7.26am.
    
44. The records therefore were not falsified.
    
45. The next issue to handle is asking someone else to clock in the time. Mr. Vodo says that, that has been the practice and I find that the ERT was correct in arriving at the conclusion that there should be an exception on what happens in a situation like this. Someone else definitely has to clock the employee at the time he receives the call because if he has to do it then there will be a large disparity in the workers recordings when compared to the recordings of the security office.
    
46. The security office will only record the time when the employee passes the gate.
    
47. Although the house rule prohibits someone else from clocking in another's time to avoid matters like dishonesty, there was no dishonesty in this case and given that the principal offence of fraud is not established I find that the employer ought to have instead of carrying out the dismissal informed the employee that there were no exceptions to the rule and that even in a case like that he should not have asked another to clock in and made some arrangements to cover for a situation like this.
    
48. I find that the cause for termination being misconduct was not satisfied as there was not any gross misconduct that warranted the termination. S. 33(1) (a) only permits termination for gross misconduct and I will not describe this as gross misconduct especially when the time was not falsified. I would have come to a different finding if the time was falsified because that would amount to theft from the employer which is gross irrespective of the amount involved.
    
49. I do not find that the procedure to dismiss the employee was incorrect. He was given notice in writing of the termination and paid up to date salary. That is the only procedure that the statue prescribes under s. 33 (2) and s. 34 for the ERP. Other procedures therefore cannot be read into the requirement.
    
50. I find that the ERT was correct in arriving at the conclusion that the cause to terminate was not justified under s. 33 of the ERP.
    
51. I now turn to see whether the termination was unfair. In determining this issue, one has to assess whether the employer acted in bad faith or that the manner of treating the employee whilst carrying out the dismissal was offensive, demeaning, humiliating or improper.
    
52. The ERT found that treating an employee with a penalty of dismissal when his conduct was largely sanctioned by the supervisor is unfair. It was also unfair that the investigating process was flawed by allowing one person to be included in the team when he was also accused in the same letter which caused the investigation against the employee. Mr. Vodo had requested to meet with the General Manager which was not afforded to him. This all made the termination unfair.
    
53. I find that incorrect factors were assessed to determine the fairness of the termination. Whether the proper procedure was provided to the employee is something that is looked into to assess the lawfulness of the termination.
    
54. There was no evidence by the employee which indicates bad faith on the part of the employer which makes the termination unfair thus entitling the worker to claim compensation for humiliation, injury to feelings and loss of dignity.
    
55. I now to proceed to the question of the remedies. The ERT stated that this represented the lost earnings and the ongoing expectations arising under the contract. The ERT stated that the sum was equivalent to two years wages. It was said that the worker has to find a new job and that there was no evidence on how difficult it is for the worker to find another job. However the ERT stated that it would be reasonably difficult to find one. This was an assumption in favour of the employee which was not based on the facts
    
56. The ERT stated that the employer had not raised any satisfactory evidence that the employee did not perform well so the employee had expected to stay in the employment for some time.
    
57. Since the termination and until decision, there was an actual period of dismissal for 12 months. During that 12 months the employee had found a job as well although it was casual. It was then important that the ERT extricate from the employee how much he was earning and what was the shortfall in the earning. This shortfall would have been the amount that would have been used to assess the quantum. For the period that the wages should be paid, the ERT stated that it should be paid for two years as the employee would have stayed in the job for that period. I find that this assessment is incorrect on the basis that the employee would not be able to find a job. The employee did not give evidence that he could not find a job and certainly after the verdict he is obliged to look for a job. If it is difficult to find a job; that evidence should have been given. There ought to have been evidence of the employee having mitigated his loss but he gave no such evidence that he tried but could not for circumstances beyond his control.
    
58. The worker is already earning and given that he did not give any evidence that he cannot find a job an appropriate remedy under s. 230 would be the period he has actually lost the wages. For 12 months before the date of judgment he lost the wages but out of that 12 months he had been earning some money. It is therefore reasonable that he be awarded 6 months' salary for the unlawful dismissal.
    
59. He ought to have at least found a suitable employment in that period. It is his duty to mitigate his loss and give a proper reason to the court why he did not if he could not.
    
60. The award of remedies ought to be set aside and substituted with the sum of 6 month's salary to be paid within 21 days.
    

Final Orders

61. In the final analysis, I find that the appeal is only allowed only on the grounds that dismissal was not unfair but unlawful for want of proper cause and that the remedy provided to the employee is exorbitant and not justified on the facts of the case.
    
62. I therefore allow the appeal and order that since the dismissal was only unlawful, the employee should be paid compensation equivalent to 6 months' wages to be paid within 21 days.
    
63. Each party must bear their own costs of the appeal proceedings.
    

Anjala Wati
Judge

15.12.2015
____________________
To:

1. Ms. Low for the Appellant.
2. Mr. V. Maharaj for the Respondent.
3. File: Suva ERCA01 of 2013.