Adam Ramsay v AVA Systems Pty Ltd
[2010] FWA 7448
•8 OCTOBER 2010
[2010] FWA 7448 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Adam Ramsay
v
AVA Systems Pty Ltd
(U2010/376)
COMMISSIONER ROBERTS | SYDNEY, 8 OCTOBER 2010 |
Application for unfair dismissal remedy.
[1] This decision concerns an application lodged on 8 March 2010 by Mr Ramsay (formerly Mr Ahmed Attia) pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the alleged unfair termination of his employment by AVA Systems Pty Ltd (AVA or the Company).
[2] The application was dealt with by a Fair Work Australia Conciliator on 8 April 2010 but the conciliation was unsuccessful.
[3] The arbitration came before me for hearing in Sydney on 9, 22, 23 and 27 July 2010. Mr Ramsay represented himself and the Company was represented by its Managing Director, Mr A Ajara. Mr N Hancock, a former employee of AVA, gave sworn evidence for the Applicant. Ms G Ardic (Administration Manager) and Mr B Weaver (Technical Services Manager) gave sworn evidence for the Company.
Background
[4] Mr Ramsay was first employed by AVA on or about 25 August 2008. At the time his employment commenced, Mr Ramsay was known as Ahmed Attia, and other documents during the term of his employment referred to him as Adam Attia. In this decision I will use his current name only. Mr Ramsay’s employment was terminated at the initiative of AVA on 26 February 2010 for alleged “gross incompetence”. The termination letter provided to Mr Ramsay describes the basis of the termination to be: “... your lack of willingness to learn the product and related topics and therefore not improving the ability in resolving problems and issues in time and in accordance with the specifications and/or business requirements and company’s procedures”. It is the Company’s contention that Mr Ramsay’s alleged performance failures amounted to serious misconduct.
[5] Mr Ramsay’s employment was subject to a common law agreement which he entered into with AVA on 11 July 2008. AVA maintains that the terms of that common law agreement allow it to terminate Mr Ramsay’s employment in the circumstances which it alleges to have occurred in such a manner that it is not required to provide or pay any notice. Mr Ramsay denies all allegations made against him by AVA and maintains that his employment was unfairly terminated. Mr Ramsay seeks to be reinstated to his former position at AVA together with compensation for lost wages.
Legislative Framework
[6] Section 385 of the Act provides:
“385 What is an unfair dismissal
A person has been unfairly dismissed if FWA 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.”
[7] Section 388 of the Act provides for the Minister to declare a Small Business Dismissal Code (the Code). That code was declared on 24 June 2009 and commenced operation on 1 July 2009. The Code provides:
“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.”
[8] It is not disputed that AVA is a small business as described in the Act, employing fewer than fifteen full time equivalent employees.
[9] Firstly I must decide if AVA complied with the Small Business Fair Dismissal Code.
Evidence
Mr Hancock
[10] Mr Hancock gave sworn evidence and said that he had been employed by AVA but was dismissed for lack of performance. He was not given an opportunity to respond to allegations concerning his performance. Mr Ajara had told him that he was being dismissed for gross incompetence in his programming duties.
[11] In cross-examination, Mr Hancock was questioned about his qualifications and expertise.
Ms Ardic
[12] Ms Ardic gave sworn evidence and submitted a witness statement. 1 This took the form of a memo from Ms Ardic to Mr Ajara dated 21 May 2010. That memo covered the areas of Mr Ramsay’s arrival times over the period January to February (inclusive) 2010. The monitoring of Mr Ramsay over that period alleges that he was late on several occasions. The memo goes on to say that Mr Ramsay took excessive time off to attend to his religious obligations and allegations that Mr Ramsay ‘on a few occasions’ left in the afternoon with the office keys leaving other staff “unable to lock up properly”. It was further alleged that Mr Ramsay took several periods of leave between October 2008 and January 2010 without submitting a signed request, co-signed by his manager.
[13] Ms Ardic went on to say that Mr Ramsay “just seemed to have trouble grasping basic workplace team principles and work ethics”.
[14] In cross-examination, Ms Ardic:
- Agreed that Mr Ajara had given her the task of monitoring Mr Ramsay. 2
- The monitoring concerned Mr Ramsay’s arrival times at work and customer satisfaction. 3
- Denied that she received a salary increase related to the monitoring. 4
- Said that Mr Ramsay: “had a problem with coming in on time for about a year, but not necessary every day.” 5
- When asked to quantify the alleged late arrivals, she estimated them at 50 per cent. 6
- Agreed that she did not provide any feedback to Mr Ramsay about his arrival times. 7
- Said that she was not aware of any written warnings to Mr Ramsay. 8
- Said that AVA only ever issued “verbal reminders or warnings” in relation to lost keys. 9
Mr Weaver
[15] Mr Weaver gave sworn evidence and submitted a witness statement. 10 This took the form of memos from Mr Weaver to Mr Ajara.
[16] In November 2009 Mr Weaver undertook an appraisal of Mr Ramsay and asked him to complete an appraisal form. This was followed by an appraisal interview on 25 November 2009.
[17] The appraisal interview identified the following areas where Mr Ramsay’s performance “needed to be vastly improved”:
“1. His timekeeping: I made the point that his position dictated that he was to be available in the office at 8:30 am so that he can login to Efficiency and prepare himself to take calls from clients from 9:00 to 5:00 excluding breaks and his consistent tardiness was a cause of considerable frustration for me and totally unacceptable for the company. Up to this point in some mornings he was late as much as 2 hrs.
2. Leave Application: He must submit the signed leave forms days before the actual leave day so that the arrangements can be made to provide the replacement. Under no circumstances he would be taking the time off without the leave from being signed by one of the managers at least a few days before the date of the leave.
3. Data Entry and Maintenance in Efficiency: He must enter records into Efficiency properly, in time and manage correctly and timely manner. He must record all the customer contacts and resolutions when it happened and as it happened.
4. Using Skype for personal contacts: I told him that it was inappropriate for him to spend as much time on Skype as he was talking to his friends overseas during work hours. This will be stopped immediately.
5. Use of company assets and office hours: I mentioned the issue that we had had with his PC becoming severely affected by virus that he had inadvertently downloaded while downloading non-business software. He was told that under no circumstances would he be downloading any non company and business related material. He was also cautioned to show a high degree of discipline on the WEB sites he visited.
6. Other Technical Issues: As I went through the other technical and operational issues one by one with Adam I became aware that his understanding of his role in terms of responsibilities to the client, AVA and himself in terms of a business environment was not deep and in some cases dangerously incorrect and technically inadequate.
7. Decision for another interview: In the end I said that it would be inappropriate to continue with the formal appraisal as it would only be a permanent and fairly damning document if I was to complete my side. I offered the opportunity to take two months to see if we could address all of the most important issues and then re-appraise during February.”
[18] Mr Weaver went on to say that the following steps were set down for the two month period after the November appraisal:
“1. Adam was to improve his timekeeping so that he was on time and also asked for signed in leave request after giving appropriate notice periods.
2. He will be monitored and further trained if necessary in order to improve his data management in Efficiency.
3. He will be very disciplined accessing WEB or using Skype during office hours for his personal contacts and interests. Under no circumstance he will be downloading any non company/business related material without authorization or permission.
4. He must spend considerable amount of his own time to study and learn the AVA Systems’ products so that he can provide a proper, correct and timely service to our clients.
5. To follow on to paragraphs 3 and 4, AVA Systems would provide him with a PC when he set up a broadband connection at home so he could improve his PC and IT knowledge and can use it for his personal interests at home.
6. He was to consider courses that he thought could improve his performance within the company. I strongly recommended business communications and technology courses.”
[19] Mr Weaver’s further evidence was that during the above two month period, Mr Ramsay’s performance did not adequately improved:
“1. His Time keeping: After Adam came in on time for three days in a row, I took him out for coffee and thanked him for taking a responsible attitude for something that we regarded as important. That was almost the last day he was on time in the next two months. Admittedly a lot of the time it was only 3 or 4 minutes, but it was almost always late. I commented several times about his lack of punctuality over this time but it never seemed to elicit a positive response.
2. Leave Request Processing: In at least one occasion he requested the half day leave on the same morning and put in the paperwork a few days later.
3. PC on Loan: I asked on a number of occasions but Adam never had broadband installed, so we could not provide him with a PC at home. He also said that, he much preferred not to involve anything that relates to IT at home. 8 hours of IT is enough during day time.
4. Training Courses: The only course he looked at was one on project management, on which I commented that he had to get an appreciation for the basics first. I had recommended a business communications course but he did not look at this.
5. General Observations: Although I left much of the technical and operational issues, product training and testing his knowledge and learning pace for Efficiency to you, I have noticed there were hardly any improvements in his data entry and maintenance in Efficiency and compliance with the business requirements in general.
6. Usage of Efficiency: I have prepared a separate memo ‘Use of Efficiency Application - Adam Ramsay’ to you in relation to his usage of Efficiency. The results in this area are very poor and very disappointing.
7. In respect to Authorisation and Care of Customer Assets: I have also prepared a separate memo ‘Connecting to Clients Computer Systems - Adam Ramsay’ to you in relation to his approach and care to customer site and their data.
8. Conclusion: In summary, it was extremely frustrating dealing with Adam over these issues. Not only did he perform poorly over a set of goals that could be simply achieved, he did not acknowledge their importance or relevance to his position and likelihood of severe damage that he might be causing to the clients operations and AVA Systems integrity and reputation.”
[20] It was Mr Weaver’s further evidence that Mr Ramsay had breached company policy by altering clients’ systems settings and introducing new technology to a client’s site. Mr Weaver’s evidence went on to cover several other areas such as virus checking and backups. Mr Weaver said: “Adam’s past activities and misdemeanours were understandable individually perhaps. What concerned me then and was reflected in my decision to postpone his review was his apparently complete lack of understanding or feelings of accountability for what were pretty basic errors. His behaviour around his PC and the malware by delaying moving his equipment or refusing to see the need for the action amounted to insolence. His keeping a virus laden machine connected to the network and our clients was dangerous negligence and inexcusable. I was hoping that in the following days of the interview he would improve his understanding and the possible consequences of his conduct and actions. Although he did not infest his PC with another virus, he did not make any improvements on the other points of concern. For example, I can not comprehend how he could continue accessing customer data without ensuring that there was an adequate and recent back up in place.”
[21] Mr Weaver concluded by saying: “Adam placed very little weight on our requirements for proper system operation. He did not log in with the correct user id, did not have the system ready for operation for the whole of the work day, and was lax in the storing of correspondence against service calls. Several Service calls were not logged at all during this period. In these points Adam was acting directly against instructions given on many occasions and especially in the November 2009 appraisal interview and was acting deliberately negligently in my view. He did not show any improvement in relation to above matters since the November 2009 appraisal interview.”
[22] In his supporting oral evidence, Mr Weaver said that he has spent 33 years in Information Technology including being Data Processing Manager of Goodyear New Zealand and Senior Technical Manager for the National Australia Bank. 11 He has held his current position since May 2009.12 He went on to say that he had recommended to Mr Ajara that Mr Ramsay be dismissed on a previous occasion as he “couldn't comprehend how a person could find it acceptable to have a contaminated machine and be connecting to clients' machines with it. It put our company at very great risk.”13 However, Mr Ajara wanted to continue with the appraisal process with Mr Ramsay with Mr Weaver taking over some parts of assessing the Applicant’s performance.14 Mr Weaver went on to elaborate on issues contained in his witness statement.
[23] In cross-examination, Mr Weaver:
- Said that no minutes were kept of meetings. 15
- Said that the reason for this was that the team consisted only of 4 or 5 people. 16
- Said that he did not remove unlicensed software from the machines but rather licensed those software. 17
- Said in relation to installation of software on a client’s network: “the point is you have to have permission to make changes to somebody’s asset.” 18
- Agreed that only AVA is accusing Mr Ramsay of installing software without permission. 19
- Agreed with me that Mr Ramsay was not being accused of placing any virus on any computer but rather, of taking no action concerning a virus when required action should have been apparent to him. 20
- Said: “in the case of AVA making changes to a client's environment, then AVA has a strict liability to make sure that they follow good practices like, for example, backing up the database or ensuring that a backup has occurred before any changes are made. Because otherwise they could be held liable for damages should a problem occur.” 21
- Said, concerning the appraisal of Mr Ramsay, that “it was going to be a useful tool to ascertain what the situation was as far as you were concerned.” 22
- Went on to say that an appraisal is only opinion. 23
Mr Ajara
[24] Mr Ajara gave sworn evidence and submitted a witness statement. 24 Mr Ajara’s legal surname is Acaroglu but told me that he uses the surname Ajara for convenience.
[25] In summary, it was Mr Ajara’s witness statement that:
- Mr Ramsay was given extensive training by AVA and had full access to all manuals, overviews and technical papers.
- He had 4 private discussions with Mr Ramsay between mid 2009 and mid February 2010 “in order to help him and to understand the reasons for his very steep downward slope of performance.”
- He discussed with him how to organise training for him in such a way that he could learn and improve his performance.
- Other meetings were conducted to help Mr Ramsay “to understand the ramifications of his actions or no actions and how and why he must rectify them.” Those meetings occurred with Mr Ajara and 2 other managers.
- Mr Ramsay’s performance was at an acceptable level up to mid February 2009. Mr Ramsay’s performance later declined.
- “At the end of the appraisal interview that took place on 25th November 2009 and conducted by Adam’s manager Mr Brett Weaver, he was told that all his shortcomings, performance level and conduct in general was so bad either he should have been dismissed immediately or we gave him a change of improvements and to re-do the appraisal interview in two months time. The time for the interview was set to sometime in February 2010. He was also told by Mr Brett Weaver that we will be keeping a very close eye on his every conduct, on his improvement of the product knowledge, on his and learning ability and his ability to follow the instructions to the dot. I was made aware of the situation the same day by Mr Weaver and made an action plan how to help Adam and how to monitor his improvements...” 25
- An action plan was developed to improve and monitor Mr Ramsay’s performance in relation to punctuality, time management, additional training, usage of internet and Skype during work hours, usage of administrative privileges, compliance with company rules and instructions and product knowledge and learning.
- “Not only he did not make any noticeable improvements, he was defending and arguing with us about his unacceptable attitudes and conducts when they were pointed out to them when they occurred (sic).”
- The decision to terminate Mr Ramsay’s employment was then made.
[26] In cross-examination, Mr Ajara:
- Said that he told Mr Ramsay in January and February 2010 on three occasions that his performance was bad. 26
- Said that problems with Mr Ramsay began when he started working alone. 27
- Said that no dismissal occurred as Mr Ramsay did not comply with his contract and the contract was terminated. 28
- Went on to say that AVA doesn’t dismiss any employee, it just terminates their contracts. 29
- Agreed that the benefit of terminating a contract as opposed to dismissing an employee was that no notice period was payable. 30
- Said that Mr Ramsay was not dismissed for misconduct but rather for “gross negligence and gross incompetence.” 31
- Said: “... it is basically your professional attitude and professional performance was the trigger for the dismissal.” 32
- Agreed that no written warnings were provided. 33
- Said that meetings with Mr Ramsay constituted warnings. 34
- Said: “your dismissal is based on the gross negligence and wilful neglect. That was clarified to you verbally and also via email... there was no misconduct at point of time that you dismissed for.” 35
- Said that misconduct was discovered after the termination of employment. 36
- Said that Mr Ramsay’s excessive use of Skype came to his attention as part of the appraisal process in November 2009. 37
- Was questioned extensively about Skype and internet usage, particularly of dating sites.
Submissions
[27] Both the applicant and Mr Ajara made extensive oral submissions.
Mr Ramsay
[28] Mr Ramsay submitted that: “this case remains a simple direct case of improper summary dismissal that violated the Small Business Fair Dismissal Code.” 38 He went on to say: “AVA acknowledged that Adam was not accused of any misconduct, not to mention serious misconduct, which would have been the only legitimate reason for a summary dismissal, as per the code AVA ignored. AVA only started accusing of misconduct after they became aware of the FWA complaint.”
[29] Mr Ramsay went on to say:
- No warnings were issued.
- Other employees were summarily dismissed improperly. 39
- AVA is not conscious of its need to act in accordance with law when dismissing employees.
- Denied being habitually late arriving at work.
- AVA granted him recreational leave when he requested it. 40
- AVA’s position regarding the use of keys is ‘fictitious’. 41
- Mr Weaver’s claims regarding unlicensed software are not credible. 42
- He had no responsibility for the introduction of viruses. 43
- AVA’s complaints regarding backup only arose after the termination of employment. 44
- AVA has used data selectively to attack Mr Ramsay’s performance. 45
- No personal files were ever found on his machine. 46
- He was allowed to retain access to Skype on his machine despite allegations that he was misusing it for personal use. 47
- AVA does not have an internet usage policy. 48
- He did not abuse his administrative log-on privileges. 49
- He was retained in employment when peers with similar roles were dismissed. 50
[30] Mr Ramsay also made submissions in reply to those of Mr Ajara and I have paid regard to those further submissions.
AVA
[31] Mr Ajara submitted that Mr Ramsay is a highly educated and highly qualified IT professional. 51 AVA itself consists of himself, Mr Weaver, one or two programmers, one implementation consultant and one support consultant. The team is supported by a salesperson and an administration manager. Accountancy is provided externally and there is no employee responsible for Human Resources. Mr Ramsay was employed in 2008 on the strength of his CV.52
[32] Mr Ajara went on to submit:
- The contract signed by Mr Ramsay was developed by an external human resources provider with legal assistance. 53
- Mr Ramsay was provided with an induction by Ms Ardic. He did not require any further learning assistance due to his high level of qualifications and experience. However, subsequent training was provided. 54
- He relied on Mr Ramsay’s professionalism in relation to client databases. 55
- After Mr Weaver joined the company, it was discovered that Mr Ramsay’s PC was infected with a virus. 56
- Mr Ramsay showed no concern or expeditious action when informed of the virus infection. 57
- The use of Skype by Mr Ramsay was expected to be within reasonable limits. 58
[33] In answer to a question from me, Mr Ajara conceded that Mr Ramsay’s employment had been terminated at the initiative of AVA. 59 Mr Ajara’s further submissions went on to elaborate on matters contained in his earlier evidence and I have paid regard to those further submissions. The termination of Mr Ramsay’s employment was actioned by Mr Weaver.60 I have also had regard to material filed by AVA as part of its Employers Response to Application for Unfair Dismissal Remedy (Form F3).
Conclusions and Findings
[34] In the case before me, it does not appear to be in contest that AVA is a small business employer. It is also not contested that Mr Ramsay is a person protected from unfair dismissal in that his employment exceeded one year and his annual earnings were less than the high income threshold. The first matter for me to consider is whether the dismissal of Mr Ramsay was consistent with the Code. The terms of the Code are set out earlier in this decision.
[35] Mr Ramsay was summarily dismissed for alleged “gross incompetence”. On the evidence of Mr Ajara, Mr Ramsay was not accused of misconduct. In terminating Mr Ramsay’s employment summarily, AVA relied on the terms of its employment contract with him. At clause 14 (Termination of Employment), the contract provides:
“14. Termination of Employment
14.1 Unless a more generous benefit applies under an applicable industrial instrument, after the probation period, either you or the Company may terminate your employment by giving written notice of the amount specified in item 10 of Schedule 1 [this provides for notice of termination of four weeks] or in the case of the Company by payment in lieu thereof.
14.2 However, the Company may terminate this Agreement and your employment immediately if you breach any term of this Agreement, wilfully fail to properly discharge any of the duties hereby imposed on you, or engage in serious misconduct. Circumstances which may amount to serious misconduct include, but are not limited to the following:
(a) where you are guilty of dishonesty, gross misconduct, or gross incompetence or wilful neglect of duty;
(b) where you act in a manner (whether in the course of your duties or otherwise) which does or is likely to bring you or the Company or any related corporation into serious disrepute;
(c) where you commit a material breach of any of any laws (including rules and regulations) of any relevant regulatory authority in any jurisdiction in which the Company or any related corporation operates; or
(d) where you commit any unlawful act of discrimination or harassment.
14.3 Upon termination of your employment, you must deliver to the Company all property, documents and records (including any stored electronically) in your possession or control relating in any way to any confidential information, intellectual property, inventions or any other property of the Company.”
[36] AVA relevantly relies on subclause 14.2.
[37] AVA initially maintained that it had dismissed Mr Ramsay by terminating his contract of employment. It further maintained that it was entitled to do so and therefore not be liable for the payment of any notice period. It later revised that position and agreed that Mr Ramsay’s employment had been terminated at the initiative of the company for performance issues, specifically “gross incompetence”. According to subclause 14.2 of the employment contract, ‘gross incompetence or wilful neglect of duty’ ‘may amount to serious misconduct’. However, during proceedings, AVA specifically ruled out any charge of misconduct against Mr Ramsay. On the evidence and materials before me I am unable to conclude that conduct justifying summary dismissal occurred in any event. The core reasons for the termination of Mr Ramsay’s employment were based on his inability to perform at a level required by the company and his continued non-adherence to company procedures.
[38] In relation to the performance and conduct issues alleged against Mr Ramsay, I prefer the evidence of Ms Ardic, Mr Weaver and Mr Ajara to that of Mr Ramsay whenever the evidence is in conflict. Mr Hancock’s evidence has not formed any part of my consideration.
[39] In terms of the Code, it was not open to AVA to summarily dismiss Mr Ramsay and I so find. I further find that AVA complied with the Code in warning Mr Ramsay that his employment was at risk if his performance did not improve and that Mr Ramsay had adequate opportunity to respond to such warnings and was given a reasonable chance to rectify his problems. The company, through Mr Ajara, appears to have gone to great pains to assist Mr Ramsay to improve. That is evidenced by Mr Ajara’s rejection of Mr Weaver’s advice around November 2009 that Mr Ramsay should be dismissed and the subsequent establishment of a program to assist him to improve. The company’s action in not dismissing Mr Ramsay earlier than it did does not, as Mr Ramsay submitted, amount to approval of his performance or conduct. Mr Ramsay did not do so either in relation to his work performance or his conduct. The evidence of the AVA witnesses is in my view sufficient to convince me that the steps set out in the Code in relation to warnings etc were complied with and I so find. Being a small business, some of the methodology adopted by AVA was not undertaken in a formal manner and took the form of attempts to counsel Mr Ramsay in a positive way to encourage better performance. In such circumstances, the presence of a support person or the non-presence of such is not a crucial issue. Further, there is nothing before me to seriously suggest that Mr Ramsay made such a request.
[40] All in all, I am satisfied that the Code was followed by AVA with the very important exception of its faulty reliance on the contract of employment to allow it to summarily dismiss Mr Ramsay.
[41] I must now decide whether there was a valid reason for the termination of Mr Ramsay’s employment. Northrop J in Selvachandran v Peteron Plastics Pty Ltd 61 (Selvachandran) said:
“In its context in s 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, ….”
[42] In Container Terminals Australia Limited v Toby 62 (Toby), a Full Bench of this Commission said: “In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable…”63
[43] As the Applicant’s conduct is part of the reason given by AVA for the termination, I have to determine for myself whether the impugned conduct occurred and, if so, whether it amounted to a valid reason for termination of employment. In this regard I respectfully agree with the following observations of the Full Bench in King v Freshmore (Vic) Pty Ltd 64:
“When a reason for a termination is based on the conduct of the employee, the Commission must, if it is an issue in the proceedings challenging the termination, determine whether the conduct occurred. The obligation to make such a determination flows from s.170CG(3)(a). The Commission must determine whether the alleged conduct took place and what it involved.
The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.”
[44] In the case before me, both conduct and performance are at issue. To determine whether Mr Ramsay’s performance and conduct amounted to a valid reason for the termination of his employment, I must have regard to the sworn evidence given in proceedings. As I note above, I prefer the evidence of the company’s witnesses to that of Mr Ramsay. All in all, I am satisfied that there was a valid reason for the termination of his employment and I so find.
[45] Section 385 of the Act provides that a person has been unfairly dismissed if the Tribunal is satisfied that the person has been dismissed and the dismissal was harsh, unjust or unreasonable and the dismissal was not consistent with the Code and the dismissal was not a case of genuine redundancy. In the case before me, it is not in contest that the termination of employment was not a case of genuine redundancy. Given that Mr Ramsay was summarily dismissed in a manner not consistent with the Code, I now turn to the question of whether his dismissal was harsh, unjust or unreasonable.
[46] Given the factors set out above, I am satisfied that the summary dismissal of Mr Ramsay by AVA was harsh and unjust. Section 387 of the Act sets out the criteria for considering harshness etc. It provides:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[47] The question of valid reason is dealt with above. It is apparent from the materials and evidence that Mr Ramsay was notified of the reason for the termination of his employment. It is further clear on the materials and evidence that he was not given an adequate opportunity to respond. The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting Mr Ramsay’s dismissal is a significant factor. On what is before me, I conclude that AVA is a small operation with no access to advice internally on industrial relations matters. This would have impacted significantly on the procedures followed by AVA, per Mr Weaver and Mr Ajara, in effecting the dismissal of Mr Ramsay.
[48] Section 390 of the Act provides:
“390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[49] In all the circumstances in this case, reinstatement would in my view be both impractical and undesirable. Mr Ramsay seeks reinstatement but I find that reinstatement is not an appropriate remedy in this case. My assessment of Mr Ramsay is that his conduct and performance were both below par during his time at AVA and his general attitude would not improve if he were to be reinstated. During the hearing, I formed the view that Mr Ramsay is largely incapable of accepting criticism or direction.
[50] Where reinstatement is not ordered, the Tribunal may order the payment of monetary compensation. Subsection 392(2) of the Act sets out the criteria for deciding a suitable level of compensation:
“(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that FWA considers relevant.”
[51] In relation to subparagraph (a), I find that the effect of the order I intend to make will not have any obvious effect on the viability of AVA. In relation to subparagraph (b), I have taken into account the relatively short duration of Mr Ramsay’s employment with the company. In relation to subparagraph (c), I am satisfied that Mr Ramsay’s employment prospects with AVA were limited at the time of his dismissal and he would not have continued in the employ of the company for any significant period. In relation to subparagraph (d), I am satisfied that Mr Ramsay has made efforts to mitigate his loss. The provisions set out at subparagraph (e) are not relevant to my consideration in the current case. The provisions of subparagraph (f) are not relevant in the current circumstances. There is no other matter I consider relevant pursuant to subparagraph (g).
[52] Subsection 392(3) of the Act provides that:
“(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.”
[53] In the case before me, I am not satisfied that misconduct occurred and this provision is therefore not relevant to my consideration.
[54] I am satisfied that both Mr Ramsay and AVA received a ‘fair go all round’ in these proceedings.
[55] All in all, I find that the termination of Mr Ramsay’s employment was harsh and unjust in that it was effected summarily and an order will be issued that AVA pay him a total of $6,538 (less appropriate tax), equating to 4 weeks’ wages at his former salary of $85,000 per annum. The sum awarded equates to the amount Mr Ramsay would have been entitled to if he had been dismissed in accordance with the terms of his employment agreement.
[56] As noted above, AVA is a small operation and while I am of the view that the award of a sum of $6,538 will not threaten its viability, I note the provision in s.393 of the Act that an amount ordered in these circumstances may be ordered to be paid in instalments. Accordingly, I intend to order that the sum awarded to Mr Ramsay be paid to him by AVA in four equal instalments. The first instalment is to be paid no later than 21 days after the date of this decision and the remaining three instalments be paid no later than 35 days, 49 days and 63 days respectively after the date of this decision.
COMMISSIONER
Appearances:
A Ramsay, the Applicant.
A Ajara, for AVA Systems Pty Ltd.
Hearing details:
2010.
Sydney:
July 9, 22, 23 and 27.
1 Exhibit AVA 1.
2 Transcript PN401.
3 Transcript PN402 and 474.
4 Transcript PNs472-478.
5 Transcript PN526.
6 Transcript PNs528-530.
7 Transcript PN536.
8 Transcript PN602.
9 Transcript PN676.
10 Exhibit AVA 2.
11 Transcript PN920.
12 Transcript PN915.
13 Transcript PN957.
14 Transcript PN959.
15 Transcript PN1105.
16 Transcript PN1106.
17 Transcript PN1179 and PN1185.
18 Transcript PN1222.
19 Transcript PN1271.
20 Transcript PN1315 and PN1317.
21 Transcript PN1355.
22 Transcript PN1422.
23 Transcript PN1461.
24 Exhibit AVA 3.
25 Exhibit AVA 3.
26 Transcript PN1672 and following.
27 Transcript PN1695 to PN1696.
28 Transcript PN1726.
29 Transcript PN1740.
30 Transcript PN1757.
31 Transcript PN1799 to 1800
32 Transcript PN1838.
33 Transcript PN1865.
34 Transcript PN1948.
35 Transcript PN2209.
36 Transcript PN2211 and following.
37 Transcript PN2495 to PN2496.
38 Transcript PN2801.
39 Transcript PN2802.
40 Transcript PN2809.
41 Transcript PN2810.
42 Transcript PN2812 and following.
43 Transcript PN2816.
44 Transcript PN2819.
45 Transcript PN2822 and following.
46 Transcript PN2824.
47 Transcript PN2825.
48 Transcript PN2826.
49 Transcript PN2842.
50 Transcript PN2852.
51 Transcript PN2886.
52 Transcript PN2888 to 2889.
53 Transcript PN2889.
54 Transcript PN2908.
55 Transcript PN2913 to 2915.
56 Transcript PN2916.
57 Transcript PN2917 to 2918.
58 Transcript PN2921.
59 Transcript PN2936 to 2937.
60 Transcript PN3034.
61 (1995) 62 IR 371 at 373.
62 Print S8434, 24 July 2000.
63 Ibid at para 15.
64 Print S4213, 17 March 2000.
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<Price code C, PR502033>
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