K&S caught out, but vehicle policy still in place

K&S Freighters ordered to reimburse driver sacked for damaging a truck, but court declines to ban the policy

K&S caught out, but vehicle policy still in place
K&S caught out, but vehicle policy remains
By Brad Gardner | November 12, 2010

K&S Freighters has been ordered to reimburse a driver sacked for damaging a truck, but the Federal Court has refused a union request to ban the policy.

Justice Dennis Cowdroy today handed down his judgement in the case of James Lee, who was fired last year for refusing to pay more than $4000 to fix a truck he reversed into a pole at a loading dock.

Lee was dealt with under K&S’ vehicle policy, which holds drivers financially accountable if they are deemed to have negligently damaged a company vehicle.

Cowdroy found that Lee was unfairly dismissed because he was unaware of the policy’s existence, it was not part of his employment agreement and K&S failed to investigate the accident before deciding the driver was negligent.

"Accordingly, it follows that Mr Lee’s termination was invalid, and in breach of his contract of employment with K&S," Cowdroy says, awarding Lee $3,564.53 in compensation.

But Cowdroy decided against a TWU recommendation to extend the ruling to cover all drivers employed under the same enterprise agreement as Lee.

Because agreement does not mention the vehicle policy, Cowdroy ruled that the court could not make a ruling on it.

If accepted, Cowdroy says the TWU’s recommendation would have stopped K&S from recouping costs from negligent drivers and terminating those who refused to pay.

"Clearly, the declarations sought are of a more general nature than the specific circumstances pertaining to Mr Lee," Cowdroy says.

During proceedings in June this year, K&S barrister Chris O’Grady warned of the consequences of a blanket ban by saying the operator would be powerless to act even in a blatant case of negligence.

"My client would not have the right to terminate the employment of the employee," he said at the time.

The TWU sought damages of more than $40,000 – adjusted to $86,180.19 based on today’s values – for future economic loss.

In his lengthy judgement Cowdroy highlights inconsistencies in K&S vehicle policy, which exists as a document and as a summary in the handbook given to drivers during induction training.

The handbook states that damages "will be costed to the employee", whereas the separate document states drivers "may be required to meet part or all of the cost of repairing any damage caused to a Company vehicle".

Neither states that drivers must agree to minimum $100 weekly deductions or face the sack. The conditions were issued by K&S Managing Director Legh Winser in an email to managers.

"In circumstances where a policy is inconsistent with its apparent summary, the Court finds that the parties are only bound by the terms of the policy itself," Cowdroy says.

He dismissed the phrase "costed to the employee" as being contractually binding and says the policy makes no provisions to determine employee negligence.

"It is clearly insufficient to give rise to a contractual term, such that a breach thereof could lead to summary dismissal, as K&S claims," Cowdroy says.

K&S was also criticised over its approach to informing drivers of the policy. Winser’s email decreeing deductions or dismissal was issued on February 11, 2009 – within an hour of Lee’s accident.

Managers only distributed the policy in writing to drivers on February 13, prompting Cowdroy to say it could not have been a condition of Lee’s employment when the accident occurred.

"If K&S was to rely on the Vehicle Policy to justify the enforcement of the new driver negligence policy on Mr Lee it was required to take appropriate action before 11 February 2009…," Cowdroy writes in his judgement.

He adds that the company needed to ensure employees were aware of the policy and how K&S proposed to act.

Since it failed to do so, Cowdroy says "K&S had no contractual basis" to dismiss Lee.

"Mr Lee was entitled to refuse to agree to the deduction," he says.

During the hearing earlier this year, Lee rejected claims he acted negligently because the pole was in a blind spot and the afternoon sun affected his vision.

Cowdroy criticised then K&S Executive General Manager Steve Fanning for holding Lee negligent without visiting the site of the accident or speaking to the driver.

"Had he spoken to Mr Lee, it may have been apparent that his initial impression may have been unjustified in view of mitigating circumstances. It could scarcely be said that a thorough investigation took place in relation to Mr Lee’s accident," he says.

Cowdroy upheld Winser’s claim that the policy is designed to end a culture of carelessness and the "bash and crash" attitude of drivers.

"All of the evidence points unequivocally to the fact that the principle concern of K&S was to reduce the number of negligent accidents by requiring drivers who were found to be negligent to meet the cost of the damage from their own wages," he says.

If it had known it was not entitled to sack Lee immediately, Cowdroy says K&S would have terminated him with the required notice

"Such a policy could still be enforced through the use of termination with notice instead of summary dismissal," he says.

However, he warns against other companies relying on this method in dealing with drivers accused of negligence.

"The Court emphasises that such conclusion is predicated upon the facts surrounding Mr Lee’s employment," Cowdroy says.

TWU National Secretary Tony Sheldon last year claimed K&S’ policy had to be overturned or a precedent would be set for other industries.

Winser in December last year told the TWU "to get the facts correct", saying K&S was within its rights to hold negligent drivers accountable.

In a separate case earlier this year, Fair Work Australia labelled the vehicle policy "unfair and unreasonable".

The TWU had to take Lee’s case to the Federal Court because he was not employed long enough to launch an unfair dismissal claim with Fair Work Australia.

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