Adam Miller v Urbanite Bikes Pty Ltd T/A Urban Pedaler

[2018] FWC 1638

[2018] FWC 1638

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Adam Miller
v
Urbanite Bikes Pty Ltd T/A Urban Pedaler
(U2017/12611)

COMMISSIONER BISSETT MELBOURNE, 22 MARCH 2018

Application for an unfair dismissal remedy – jurisdictional objection - Small Business Fair Dismissal Code – application dismissed.

[1] Mr Adam Miller has made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (FW Act) seeking an unfair dismissal remedy. Mr Miller was employed by Urbanite Bikes Pty Ltd T/A Urban Pedaler (Urban Pedaler) as the Workshop Manager, responsible for servicing bicycles. His employment commenced on 5 September 2016 and he was dismissed on 22 November 2017.

[2] Urban Pedaler is a small business. It had, at the time of Mr Miller’s dismissal, four employees including Mr Miller.

[3] Mr Miller represented himself in the proceedings before the Commission and Urban Pedaler was represented by Mr Gabe Sullens, the owner of the business.

[4] Both Mr Miller and Mr Sullens gave evidence. Mr Kristiann Griffin also gave evidence for Mr Miller.

Evidence

Mr Adam Miller

[5] Mr Miller’s evidence is that he commenced employment with Urban Pedaler in September 2016 and was responsible for servicing bikes, ordering parts and accessories, stock, and for attending the Saturday morning “shop ride” (apparently a bike ride with shop clients as a means of gaining loyalty to the store).

[6] Mr Miller said that his contract of employment had never been signed because there were matters relating to it that he wanted to resolve with Mr Sullens but he could never get Mr Sullens to give attention to the issues. The matters Mr Miller wished to discuss with Mr Sullens included the restraint of trade clause, the incorrect classification level and flexibility in hours. Mr Miller also had concerns about the bonus/performance package Mr Sullens wanted to place him on. He said he had been subject to performance pay in the past and found such an arrangement stressful.

[7] Mr Miller says that he does not recall ever receiving a written warning from Mr Sullens with respect to his performance. He agreed that, whilst he received a number of emails from Mr Sullens that dealt with matters pertaining to the workshop, these never specified that they were written warnings with respect to his performance. As to the performance of the workshop, Mr Miller said that Mr Sullens was not properly measuring the performance of the workshop as he did not consider income from parts, only from the labour component of the work.

[8] Mr Miller agreed that he obtained an ABN in about June 2017. He said he did so because Mr Scott Leader, Store Manager, told him Urban Pedaler was in some trouble and he thought having his own business might give him something to fall back on.

[9] Mr Miller denied that he sought to set up an account with a supplier. He further denied that he solicited clients of Urban Pedaler after his dismissal. Rather, he says that he had set up a Facebook page for his business and invited friends to the page. Some of his Facebook friends were clients of Urban Pedaler but he said he did not directly solicit their custom.

[10] Mr Miller also denied that he stole tools from Urban Pedaler. He said that he had sold a bike frame for cash to a customer who did not want to come in to collect it. He found a box to put the frame in and put some tools in the box that he was going to borrow. He said he went to Mr Sullens to tell him that he was borrowing the tools but before he could say anything Mr Sullens concluded that he was stealing them.

[11] Mr Miller agreed that he received a show cause letter from Mr Sullens on 16 November 2017. He provided a written response to that letter on 17 November 2017 and attended a meeting with Mr Sullens and Mr Leader on 20 November 2017. He said that because of the short notice and the meeting being at 8:00am he could not get anyone to attend as a support person. He did not ask that the meeting be postponed to another time.

[12] Mr Miller said he was never given an opportunity to show improvement in his work performance. He says he took responsibility for some issues within his control but did not consider he should be held responsible for all of the matters raised by Mr Sullens in the letter of 16 November 2017.

[13] Mr Miller submitted that the matter was not handled well and he seeks compensation of 20 weeks’ pay.

Mr Griffin

[14] Mr Griffin gave evidence that he was a customer of Urban Pedaler, that he went on the weekly shop rides and regularly observed Mr Miller at work. He said that he had not heard of complaints about Mr Miller’s work although some customers on the shop ride complained that Mr Sullens pushed them aside.

[15] Mr Griffin said he had the sense that in the period prior to Mr Miller’s dismissal Mr Miller was run down and tired and that this was caused by work.
[16] Mr Griffin is no longer a customer of Urban Pedaler as he trusts Mr Miller to do the work on his bikes.

Mr Gabe Sullens

[17] Mr Sullens is the owner of Urban Pedaler. He gave evidence that over time he realised that Mr Miller was not “delivering” on his job. He said that he had detailed those areas of performance in emails to Mr Miller where Mr Miller was not meeting expectations or where he sought improvement. Further, he had met with Mr Miller during his probationary period and detailed areas to which Mr Miller should pay attention.

[18] Mr Sullens said he had decided to start a formal performance process with Mr Miller but then discovered Mr Miller’s attempt to take tools from the premises. Because of this he then instigated the termination “for cause” process by sending the letter of 16 November 2017 to Mr Miller. He said that in this letter he indicated how seriously the business took the performance issues raised. Mr Sullens’ expectations from this letter were that Mr Miller would take responsibility for his actions. He said that the letter he received in reply from Mr Miller did not indicate that Mr Miller understood the seriousness of the matter or that he took any responsibility in relation to the issues raised. Rather, he said, Mr Miller sought to shift blame on to others for his own failings.

[19] Mr Sullens said that the relevant metric in terms of the service department, which was Mr Miller’s responsibility, was the value of “labour sales” (service). Mr Sullens said that whilst there was some improvement when Mr Miller commenced employment, the measure had declined most months from March 2017 compared to the same time in 2016. Whilst Mr Sullens accepted the retail downturn would have some effect, he said the service area of the business was very important as it could mean repeat visits by a client.

[20] Mr Sullens said that he expected Mr Miller would manage clients even when he was on leave and had raised with him the need for his spelling and grammar to improve as Mr Miller’s written communications with others was the professional face of the organisation.

[21] Mr Sullens said that he discovered the tools from the workshop that he considered Mr Miller was taking without authorisation when he picked up the box for the bike frame. He said Mr Miller’s jacket was covering the tools. When confronted Mr Miller said that he was about to speak to Mr Sullens about borrowing the tools.

[22] Mr Sullens agreed that another person (“Baz”) had told him that Mr Miller had sought to set up an account with the Urban Pedaler supplier and that he assumed, because Mr Miller had an ABN, that he was running his own business while working at Urban Pedaler. Any attempts by Mr Miller to solicit clients of Urban Pedaler would breach the restraint of trade provisions of Mr Miller’s contract of employment.

[23] Mr Sullens said that Mr Miller had never asked to meet with him about his contract.

[24] Mr Sullens said that he had raised performance issues with Mr Miller in meetings and emails for many months but a decline in Mr Miller’s area was a real issue for the small business that he could not afford. He says he accorded Mr Miller due process in terminating his employment.

Small Business Fair Dismissal Code

[25] Section 396 of the Act requires consideration, prior to the merits of the matter, of whether the dismissal was consistent with the Small Business Fair Dismissal Code (Code).

[26] The Code states:

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

[27] Whilst Mr Sullens said that he dismissed Mr Miller “for cause” he did terminate Mr Miller with notice and there is no suggestion that the alleged stealing or unauthorised borrowing of tools was the basis for summary dismissal. In any event, Mr Sullens sent a letter on 16 November 2017 to Mr Miller detailing concerns and inviting his response at a meeting to be held on 20 November 2017. To the extent that the Code applies, it is in relation to a dismissal other than a summary dismissal.

[28] Given the dismissal was not a summary dismissal the following matters need to be determined:

•  Did Urban Pedaler give Mr Miller a reason as to why he was at risk of being dismissed?

•  Was that reason a valid reason relating to capacity or conduct?

•  Was Mr Miller advised that he risked being dismissed if there was no improvement?

•  Did Urban Pedaler give Mr Miller an opportunity to respond and a reasonable chance to rectify the problem (taking into account Mr Miller’s response)?

Consideration

[29] Mr Sullens gave Mr Miller a letter dated 16 November 2017. That letter set out a number of areas where Mr Sullens considered Mr Miller’s performance needed to improve. These included:

•  Managing service parts and orders;

•  Prolonged service tickets;

•  Old service tickets;

•  Ticket detail;

•  Refusal to complete work;

•  Organisation (parts inventory, parts organisation, cleanliness and presentation);

•  Communication to clients;

•  Communication to the team;

•  Cardboard recycling;

•  Service parts maintenance;

•  Time management and prioritization (sic);

•  Labour sales decline;

•  Supervision of junior staff;

•  Bonus package;

•  Bike building;

•  General issues (spelling and grammar errors in communication to clients; non-attendance at training; communication with a sales representative, lack of organisation, lack of communication of required time off).

[30] The letter also raised the issue of the alleged theft of tools from the workshop referred to in the evidence of both Mr Miller and Mr Sullens. Mr Sullens referenced the incident in particular to the policy on removing Urban Pedaler property without permission.

[31] The letter of 22 November 2017 terminating Mr Miller’s employment confirmed that termination was with respect to those performance issues raised in the letter of 16 November 2017 and Mr Miller’s failure to adequately respond to them.

[32] Mr Miller’s primary complaint as to whether he was warned of performance issues is that it was never explicitly stated in the emails (and conversations) that performance issues were being raised and if his performance did not improve his employment may be at risk. In considering if Mr Miller was warned of his performance issues it is necessary to consider the content of the emails Urban Pedaler sent to him and if these could be taken to be fair warning of the need to improve his performance.

[33] During Mr Miller’s probationary period Mr Sullens met with him twice, once after 30 days (early October 2016) and again after 90 days (18 December 2016) employment. During the first meeting Mr Sullens raised with Mr Miller (in addition to the discussion of what was working well):

•  The need to ensure cleanliness and order in the workshop;

•  The need to monitor parts held in the workshop through regular stocktakes;

•  The need to streamline “bike order/receipt/build/parts install…” 1

[34] At the 90 day meeting Mr Sullens raised with Mr Miller the following areas for improvement:

•  Cleanliness of benches in workshop;

•  Warranties needing to be addressed promptly (not languishing for days);

•  Need to improve confidence in dealing with customers. 2

[35] There is little evidence of any matters in relation to performance being raised either formally or informally with Mr Miller again until April 2017. On 18 April 2017 Mr Sullens sent an email to Mr Miller in which he said:

…Scott and I will expect that you also take more accountability for your department… We need to individually seek solutions and independently take on the responsibility when we are on deck, only the most serious and complicated challenges need to be directed to me...

I also mentioned that I think you need to think more proactively about communication to put our clients at ease…

I believe a 9-month review of your performance, direction, responsibilities and progress is in order.

[36] I am satisfied that this email did identify for Mr Miller areas of his performance that required improvement.

[37] On 25 May 2017 Mr Sullens sent another email to Mr Miller in relation to a pay increase. That email said, in part:

I have had a 30 day review with you which was conducted on Sep 5 (sic 3) and a 90 day review with you which was conducted on Dec 18.

In both instances we discussed the tasks listed in your duty statement…We talked about what tasks you were performing competently, what tasks weren’t being done to satisfaction, areas for improvement and actions to be taken. After each review, agreements were made between us on the points discussed…

I can not (sic) grant a pay increase at this time for the following reasons:

•  While a lot of duties are being adhered to not all tasks and duties listed in your duty statement are being performed to satisfaction

•  Although some progress has been made after our 30 day and 90 day reviews, there are too many areas for improvement that still require commitment to consistency. E.g. keeping a super clean and organized service department at all times, managing part time staff…, bringing ideas to us for improving service, communication levels with customers…

At this point, I’d like to have a meeting with you at 8.15am on Thursday 1^st June 2017 to discuss the contents of this email…

I’ll also prepare a performance review so there is structured communication of our expectations of you…

[38] On 28 May 2017 Mr Sullens sent a further email to Mr Miller in which he raised issues of additional staff, responsibility for quality and work completion in the workshop.

[39] Mr Sullens met with Mr Miller on 1 June 2017 and provided him with a detailed document which set out Mr Miller’s strengths and weaknesses and the actions required to address areas of concern. The areas of concern identified by Mr Sullens included:

•  Customer service skills:

•  Need to be proactive in communicating with customers;

•  Overlooking problems and potential service upgrades;

•  Falling off of enthusiasm for phone conversations;

•  Spelling and grammar errors in written communication.

•  Attitude and responsibility:

•  Lack of motivation if workload is low;

•  Cardboard bin not being put out;

•  Difficulty in accepting suggestions from others.

•  Organisational skills and management:

•  Failure to take primary responsibility in bike building and final inspection, workshop organisation of parts and tools, workshop cleanliness, workflow, walk-ins and on the spot repairs efficiency, managing live tickets;

•  Requires constant supervision, bike building and inspection not done unless directed to, failure to organise and take responsibility for work of part time staff, consistent delay in ordering parts, bikes in workshop without tickets, bikes without tickets taking too long to finalise

•  Lack of attention to hours and schedule

[40] The document also set out the actions that were required of Mr Miller to reach the standards required.

[41] On 11 August 2017 Mr Sullens sent Mr Miller a further email in which he sought to “formalize some of the discussions that we’ve had over the last couple of weeks and to ensure you understand my expectations…” The matters raised dealt with:

•  Recycling bin schedule;

•  The need to avoid unnecessary expenses by ensuring all orders are placed on Mondays;

•  The need to show judgement when deciding to offer “freebies”.

[42] On 24 October 2017 a further email was sent to Mr Miller. This email was primarily in relation to the need for adequate notice by Mr Miller of the proposed weekend each month he would like to have off. The email also took Mr Miller to task in relation to a “confrontational” conversation he had with a sales representative in front of customers.

[43] Mr Sullens sent a further email to Mr Miller on 3 November 2017 outlining in detail Mr Miller’s responsibilities with respect to a part-time mechanic and sales assistant who was to soon commence employment with Urban Pedaler.

[44] In addition to these emails which clearly set out the expectations Mr Sullens had of Mr Miller, a number of other emails were presented by Urban Pedaler where one-off issues were raised with Mr Miller in respect to his performance.

[45] The flow of formal communication from Mr Sullens to Mr Miller clearly demonstrates that Urban Pedaler did raise with Mr Miller those areas where his performance was required to improve. There are consistent themes through the documentation, including with respect to customer service, cleanliness and order in the workshop, and having bikes properly tagged and attended to in a timely manner.

Findings

[46] There are a number of findings that must be made in order to determine if the dismissal of Mr Miller was consistent with the Code. I have made the findings below on the basis of the evidence given by Mr Miller and Mr Sullens and the material put before me by the parties. I have not had regard to the evidence of Mr Griffin. His evidence was generally speculative and hence of little value in proving factual matters.

[47] There is little conflict in the evidence given by Mr Miller and Mr Sullens that requires any resolution by me.

[48] The phrase “a valid reason” as used in the Code should be given the same meaning as its use in considering if a dismissal is harsh, unjust or unreasonable. That is, for a reason to be valid it must be “sound, defensible and well founded” and that a reason that is “capricious, fanciful, spiteful or prejudiced” could not be a valid reason. 4 Whilst I acknowledge the purpose of the Code, this should not import any alternative meaning into the words used in it to those otherwise used in the FW Act itself.

Did Urban Pedaler give Mr Miller a reason as to why he was at risk of being dismissed?

[49] I am satisfied that the matters raised by Mr Sullens in the letter of 16 November 2017 along with the earlier emails provide a valid reason as to why Mr Miller’s employment might be at risk. Whilst any of the individual issues might not form a valid reason for the dismissal, the breadth of issues, if substantiated, provides a reason that is sound and defensible should the performance issues result in dismissal.

Was that reason a valid reason relating to capacity or conduct?

[50] I am satisfied that the reasons given for dismissal related to Mr Miller’s capacity (that is, work performance). It is, however, necessary to make some findings as to whether these reasons were sound, defensible and well founded.

[51] Ultimately, Mr Miller was dismissed for the reasons set out in the letter of 16 November 2017. Taking into account his response, I remain satisfied that there was a valid reason for his dismissal.

[52] In reaching this conclusion I have carefully considered the evidence of Mr Miller and his detailed written response to Mr Sullens of 17 November 2017 in relation to the letter of 16 November 2017. In his response, Mr Miller provides some explanations that, on their face, appear reasonable (for example he was open with Mr Sullens from the commencement of his employment about his difficulties with spelling and grammar and that some family responsibilities cannot be timetabled) and explains some specific matters associated with individual bikes. However on the broader, systematic issues such as cleanliness, time management and service tickets, Mr Miller blames others (“it happens when I’m not here”, “it is like it when I return from my days off”) or says it would all be fixed if only he had another mechanic working with him.

[53] Mr Miller’s response is, at least in part, an apparent acceptance of the performance issues raised by Mr Sullens. The performance standards required of Mr Miller do not appear to be unreasonable and Mr Miller does not complain that they are unattainable, just that others are at fault for him not reaching the required standard.

[54] I am satisfied that the performance issues did exist. If they did not there is little to explain the emails from Mr Sullens or the detailed discussion and documentation of 1 June 2017. In a workplace of so few employees such shortcomings can, and clearly did, create difficulties.

[55] This is not to suggest that Mr Sullens was without fault. He perhaps expected much more than Mr Miller could give. Ultimately however, Mr Miller was not performing at the standard required by Mr Sullens and this was a valid reason for his dismissal.

[56] For these reasons, I am satisfied that there was a valid reason relating to Mr Miller’s capacity for his dismissal.

[57] I make no findings in relation to the tools Mr Miller said he was borrowing. No reliable evidence was put before me to support either version of the incident.

Was Mr Miller advised that he risked being dismissed if there was no improvement, given an opportunity to respond and a reasonable chance to rectify the problem?

[58] Given the emails from Mr Sullens to Mr Miller it is difficult to understand how Mr Miller could not have understood those areas where his performance needed to improve.

[59] On 1 June 2017 Mr Miller was provided with specific and detailed feedback on his performance and the expectations Mr Sullens had of him. On 16 November 2017 Mr Sullens sought again to formalise the areas of concern he had with Mr Miller’s performance. Whilst this letter reads like a litany of every minor transgression of Mr Miller, the themes of those areas of improvement identified in the correspondence over the previous six months in particular remain.

[60] Whilst the issues raised with Mr Miller over his period of employment are constant, Mr Sullens did not, until the letter of 16 November 2017, unequivocally advise Mr Miller that his employment was at risk. It would have been prudent for him to have done so clearly and precisely and much earlier than 16 November 2017. Had Mr Sullens done so there could have been no basis for complaint of Mr Miller that he was not aware of the performance standards required of him.
[61] Whilst the precise impact of failure to improve may not have been detailed to Mr Miller, I am satisfied that he was well aware of the areas where his performance needed to improve. The issue is whether, despite the lack of explicit advice, Mr Miller was given a real opportunity to demonstrate improvement in his performance.

[62] Whilst it was not explicitly put to Mr Miller that he had a period of time within which to demonstrate improvement, I do not consider this fatal, in the circumstances of this case, to finding compliance with the Code.

[63] In Grigonis v Adelaide Coffee Company Pty Ltd 5 (Grigonis) Commissioner Hampton said:

[67] The Small Business Code, for good reason, expresses a preference that warnings are given in writing. It is also evident from the Code that this is not required however I consider that the effect of the Code is that an employer will be required to demonstrate that the relevant warning has in fact been given and that this may be done by way of direct evidence. On that basis, I need to assess the evidence pertaining to the issue.

[68] Given the nature of the Small Business Code, it would not be appropriate to attempt to establish the precise form or set of words that would need to be used to demonstrate compliance with this element of the Code. Rather, the evident intent of the Code is clear. The respondent must have, at least once, taken steps that would have, or should have, left the applicant with the understanding that she risked being dismissed if there was no improvement in her job performance.

[69] In this case, this involves the consideration of the many “warnings” given by the respondent that elements of the applicant’s work were unsatisfactory and whether, more particularly, one or more of those warnings met the requirements of the Small Business Code.

[64] I adopt the approach of Commissioner Hampton.

[65] The situation before me is not substantially different to that in Grigonis. I am satisfied that I can consider if the warnings given to Mr Miller complied with the requirements in the Code to give him an opportunity to improve his performance.

[66] The advice to Mr Miller of his poor performance and areas requiring improvement was consistent and occurred over at least a six month period after having been explicitly detailed to him in the 30 and 90 day review meetings. The issues raised were consistent – cleanliness and order in the workshop, customer service, and the standard of written material.

[67] I am satisfied that Mr Miller was offered support in relation to these matters, Mr Sullens for example offered to read over his written material before it went out to minimise typing and grammatical errors and to provide standard text that he could insert into written material. Cleanliness and order in the workshop and properly labelling bikes in the workshop were matters that Mr Miller could, and should, have seen to. This was a matter raised with him in his 30 day review meeting and in emails through 2017.

[68] In the context of the case that has been put to me, and accepting the relevant observations in Grigonis, I am satisfied that Mr Miller had performance issues raised with him in writing, was given warnings of poor performance and should reasonably have understood the implications of a failure to perform at the standards required. He was, through the consistency of warnings, given an opportunity to show improvement.

[69] Mr Miller was also given an opportunity to respond to the reasons set out in the letter of 16 November 2018 both in writing and in person on 20 November 2017. In doing so he was well aware of the concerns with respect to his performance might lead to his dismissal.

Procedural matters

[70] I am satisfied that, in setting the meeting for 20 November 2017, Urban Pedaler did invite Mr Miller to bring a support person to the meeting. Whilst Mr Miller complains that he could not get a support person for the time of the meeting he did not ask that the meeting time be changed in order to facilitate the attendance of a support person.

Compliance with the Small Business Fair Dismissal Code

[71] For the reasons given above, I am satisfied, on balance, that Urban Pedaler has complied with the Code.

[72] Section 385 of the FW Act states:

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

[73] A dismissal can only be unfair if all of these prerequisites have been met. Given my findings with respect to the Small Business Fair Dismissal Code, the dismissal of Mr Miller was not unfair.

[74] The application for relief from unfair dismissal by Mr Miller is therefore dismissed. An order 6 to this effect will be issued with this decision.

COMMISSIONER

Appearances:

A. Miller on his own behalf.

G. Sullens for Urbanite Bikes Pty Ltd T/A Urban Pedaler.

Hearing details:

2018.

Melbourne:

February 19.

<PR601324>

 1   Exhibit R1.

 2   Ibid.

 3   Mr Miller commenced employment on 5 September 2016 so this cannot be the date of the 30 day meeting.

 4   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 5   [2011] FWA 1586.

 6   PR601386.

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