Alice Cranson v Peoplesmove Pty Ltd T/A Carhood

[2019] FWC 1193

[2019] FWC 1193

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Alice Cranson
v
Peoplesmove Pty Ltd T/A Carhood
(U2018/2919)

COMMISSIONER GREGORY MELBOURNE, 22 FEBRUARY 2019

Application for an unfair dismissal remedy.

Introduction

[1] Ms Alice Cranson was employed by Peoplesmove Pty Ltd T/A Carhood (“Carhood”) as a Customer Service Assistant and worked in its Victorian office located near the Melbourne airport. The business describes itself as a “community marketplace,” which enables vehicle owners to list and rent out their vehicles to other individuals. However, Ms Cranson’s employment was terminated on 2 March 2018 and she subsequently lodged an unfair dismissal claim.

[2] Mr Gary Dirks was given permission to appear on behalf of Ms Cranson under s.596(2)(b) of the Fair Work Act 2009 (Cth) (“the Act”) as it would be unfair not to because Ms Cranson was unable to represent herself effectively. Mr Steven Johnson, the Executive Director of Carhood, appeared on behalf the Respondent.

The Issue to be Determined

[3] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied “the dismissal was harsh, unjust or unreasonable.” 1 Section 387 continues to set out the various considerations the Commission must take into account in determining whether an employee’s dismissal was “harsh, unjust or unreasonable.” It states:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 the FWC considers relevant.” 2

[4] The Commission is now required to determine whether Ms Cranson’s dismissal was “harsh, unjust or unreasonable” taking into account the matters in s.387 it must have regard to.

The Evidence and Submissions

The Applicant’s Evidence and Submissions

Ms Alice Cranson

[5] Ms Cranson was employed by Carhood from 15 November 2016 until 2 March 2018 and worked on a full-time basis as a Customer Service Assistant. She was required in this role to deal with customer bookings and enquiries. She was also required to provide day-to-day support to both the Site Manager and the Customer Experience Manager. In May 2017 one of the other Customer Service Assistants, Mr Cory Bentley, was promoted to the position of Customer Service Manager, and Ms Cranson reported to him in that role.

[6] During the time Ms Cranson was employed by Carhood there was a significant amount of staff turnover. She also considered that the business had a poor workplace culture, and employees often lacked clear direction in terms of how to carry out their roles and responsibilities. For example, Ms Cranson was on occasions given different directives at various times by different people within the organisation about the policies and procedures to be applied and adopted. These individuals included Mr Bentley, Mr Daryl Myers, the National Operations Manager, and the owner of the business, Mr Steven Johnson.

[7] Ms Cranson received a first warning letter in July 2017. It concerned a situation in which she had accepted what was described as a “last minute” rental booking from a customer. While she was taking the booking on the telephone the Site Manager, Ms Monica Esmilla, overheard the call and indicated that the booking should be cancelled because Carhood had a policy of not accepting bookings at short notice. This was because it did not allow sufficient time for appropriate reference and other checks to be made in regard to the customer. However, Ms Cranson said she had been told previously by Mr Johnson that bookings should not be cancelled, and she was acting in accordance with those instructions. She was then involved in a further discussion with Ms Esmilla and it was finally agreed that the booking should proceed. However, the customer subsequently caused damage to the vehicle and Carhood was unable to recover the excess payable because the booking had been taken without the appropriate credit score checks being carried out.

[8] The warning letter given to Ms Cranson in July 2017 indicated that she had ignored a request from Ms Esmilla to cancel a booking. It also indicated that she had failed to follow policy and procedure by not conducting a credit score check in regard to the customer. It concluded by indicating that she was required in the future to follow the appropriate policies and procedures at all times, and to observe any other instructions given by her Managers. A further meeting was also proposed for 6 August 2017 “to review your progress.” 3 The letter was signed by Mr Bentley in his capacity as Acting Customer Service Manager.

[9] However, Ms Cranson said she was only provided with a limited opportunity in the meeting on 25 July 2017 to explain what had occurred. She also indicated that Ms Esmilla had finally agreed that the booking should proceed, and she was not aware that clear policies and procedures were in place in regard to the acceptance of bookings. In addition, it was not her role to carry out checks on customers, and this was instead the responsibility of the operations staff. In addition, the proposed follow-up meeting did not take place.

[10] On 8 November 2017 Ms Cranson was contacted by a customer, who she knew as “Gabrielle,” 4 who was inquiring about why a booking had been cancelled. She was also travelling with a dog, which meant she would be ineligible in any case to make a booking. Ms Cranson attempted to explain the situation to her, but then decided to pick the customer up from the airport in her own vehicle and to drive her to her destination, which turned out to be in Geelong. Ms Cranson acknowledged that these circumstances were unusual, but was simply endeavouring to use her initiative to satisfy the customer’s requirements. She was also not aware she had acted in breach of any applicable policy or procedure.

[11] Ms Cranson was then given a further warning letter on 30 November 2017, which made reference to what was described as an “inappropriate” 5 phone call with a staff member from the Sydney office. This conversation had taken place on 14 November 2017. The letter also made reference to criticisms Ms Cranson had made in that conversation about other staff members and about the business. It also made reference to alleged disclosures of confidential information. It continued to state:

“You have been told in your previous performance review on 25/07/2017 that you should not get involved with these types of conversations and that phone calls to other team members should only be for gathering information for a relevant business enquiry. You have not only slandered management and the company, you have also spread false rumors and have disclosed private and confidential information which is a breach of your employment agreement.

There is a flow on effect to other Customer Service staff member’s if you have long conversations that are not work related and I believe this is affecting your productivity.

After considering the situation it is expected that your performance improves and specifically that you follow instructions given to you by a Company appointed Manager and that you also follow Company Policy and Procedure at all times.” 6

[12] The letter concluded by indicating that her behaviour warranted a second warning, and Carhood reserved the right to terminate her employment if her performance did not improve by the end of the year. It also proposed a further meeting on 14 December 2017 to review her progress. However, this meeting did not eventuate. Ms Cranson did not receive any further warnings after this time, and no other issues were raised about her work performance.

[13] However, on 2 March 2018 she was asked to attend a meeting with Mr Bentley and Mr Johnson. She was initially told in this meeting that her conduct had not improved and there were still ongoing issues to do with her work performance. Mr Bentley then made reference to a phone call Ms Cranson had received from the Brisbane Site Manager, Ms Yvonne Toering, on 1 February 2018. He indicated that he considered her comments during the course of that discussion to be inappropriate. Ms Cranson said she was then given a letter of termination which had obviously been prepared in advance of the meeting. She said she was extremely surprised about the decision, and believed she had been a valuable and loyal employee during the time she had been employed. She continued to emphasise that she had always been prepared to take on additional responsibilities, and to do what was necessary in a difficult working environment to endeavour to respond to customer demands.

[14] She also stated in her examination in chief that no reference was made to specific work performance issues in the meeting, and the discussion was instead about her being involved in what was considered to be an inappropriate conversation with another staff member. She also indicated that she had not made the phone call and it had instead been initiated by the other employee, being the Brisbane Site Manager, Ms Yvonne Toering.

[15] She also indicated that some of the statements attributed to her in the previous warning letter given to her on 30 November 2017 could not be found in the transcript of the conversation that was contained in the materials Carhood had filed in response to her application. This included the references to the statements, “This company is crap,” and “I used to give a shit but now this is just a joke.”

[16] The termination letter given to her at the conclusion of the meeting on 2 March 2018 was signed by the Customer Service Manager, Mr Cory Bentley. It stated in part:

“On 25/07/2017 we had a meeting. In that meeting, you are advised that you had gone against Company Policy and Procedure by going against a manager’s direct order. You were issued with a formal warning letter on this date.

On 30/11/2017 we had a second meeting and you were advised that your performance and behaviour had not improved to the level required and you had an inappropriate conversation to colleagues during business hours. You were issued with a second warning on this date.

On 02/03/2018 as part of a call quality check, I located a call that was taken by you on 01/02/2018 with the Brisbane Site Manager, Yvonne, where you discussed a management plan that was being considered regarding security bonds for uniforms and materials. You said to Yvonne “I’ll take him to fair work, Cory can stick this up his pipe and smoke it”. This is an inappropriate conversation to have during work hours to a colleague.

I consider that your performance is still unsatisfactory and have decided to terminate your employment for the following reasons:

•  We have had numerous verbal conversations about this and have also had two prior warnings relating to your performance and your behaviour during work.

•  We have had discussion about lengthy phone calls and how they impact the customer service team and your performance.

Your employment will end immediately. Based on your length of service, your notice period is 2 weeks. In lieu of receiving that notice, you will be paid out your notice period on your next pay cycle.” 7

The Applicant’s Submissions

[17] Ms Cranson submits that Carhood did not have a valid reason to terminate her employment. The termination letter given to her referred, in particular, to the phone call that took place with the Site Manager in Brisbane on 1 February 2018. However, following that conversation the Site Manager did not consider it necessary to make any reference to the conversation to Ms Cranson’s Manager, and the content of the discussion between the two employees was only discovered on the day of Ms Cranson’s dismissal, after Mr Bentley had reviewed the recorded audio of the conversation. Ms Cranson continued to submit that the recording and monitoring of telephone calls between staff members could not be justified on the basis of quality and/or training, and Mr Bentley’s actions in monitoring telephone calls made between employees could only be described as “snooping.” 8

[18] Ms Cranson continued to submit that the conversation referred in part to a proposal by management to introduce security bonds that would be required to be paid by staff in regard to the uniforms and other equipment and materials that were provided by the business, and this was a legitimate matter for open discussion between staff members. The transcript also indicates that the conversation actually involved a light hearted and jocular exchange between the two employees, and it should not have been viewed by management in the way that it was. Ms Cranson continues to submit that it did not constitute misconduct, and some of the references to the conversation detailed in the termination letter were inaccurate. This was only revealed when the transcript of the recording was provided in the materials filed by Carhood in these proceedings.

[19] Ms Cranson also submits that the warning given to her on 25 July 2017 related to her taking an inappropriate booking in breach of her Manager’s instructions. However, she denies that she took the booking and submits instead that it was made online. She was then told by Ms Esmilla that the booking had to be cancelled because it was made at late notice, and any such bookings were not allowed because the appropriate customer checks were not able to be carried out in the time available. However, Ms Cranson submits that Ms Esmilla then decided to proceed with the booking. She also submits that she was not aware of any policy that prevented last-minute bookings from being accepted, and she had previously been told by the Executive Director that bookings were not to be cancelled, and she was acting in accordance with this direction. She was also not aware of the credit score result in regard to the customer, and could not be held responsible for the financial loss that was subsequently suffered by the business as a result of the damage to the vehicle.

[20] She also submits that Carhood has not produced any documents or other materials that spell out the relevant policies and procedures to be followed in such cases, and there was no follow up with her at any stage to discuss any areas that might require improvement. In addition, the meeting which led to her termination was brief and cursory in nature, and she was not provided with a reasonable opportunity to respond to the issues raised in the termination letter. In addition, her dismissal was a disproportionate response in all the circumstances, and the warnings given to her were not warranted, given the circumstances involved and the lack of any proper investigation process. She also rejects the claims that she made defamatory statements about the business.

The Respondent’s Submissions and Evidence

Mr Stephen Johnson

[21] Mr Johnson is the Executive Director of Carhood. He indicated in his evidence that the business has strict policies and procedures in place about the appropriate practices to be followed, and these must be complied with before customers can be eligible to rent a vehicle. This includes a requirement that appropriate timeframes exist between the time a booking is made, and the collection of the vehicle, in order to enable appropriate checks to be made about the origin of the renter and his/her credit rating.

[22] Mr Johnson denied telling Ms Cranson that in no circumstances should a booking be cancelled, and the business has instead strict criteria that renters must abide by. If a customer is not able to satisfy these criteria then the booking does not proceed, or should be cancelled. These rental terms and conditions were set out on Carhood’s website and could be readily accessed by all staff members. He also indicated in cross examination that he was not aware Ms Esmilla had decided to proceed with the booking, despite it being made at late notice.

[23] Mr Johnson was present in the meeting on 2 March 2018 with Mr Bentley and Ms Cranson and said she was offered the opportunity of having a support person present in those discussions. During the course of the meeting Mr Bentley made reference to the previous warnings given to Ms Cranson, and then dealt with her conduct during the phone call on 1 February 2018 with the Brisbane Site Manager.

[24] Ms Cranson was given an opportunity to listen to the phone call before providing a response but declined to take up this opportunity. He then had a discussion with Mr Bentley at the conclusion of the meeting and it was decided that her employment should be terminated.

[25] He also indicated in cross examination that during the meeting on 2 March 2018 with Ms Cranson the content of the phone call on 1 February 2018 was described to her, however, the audio was not played. He also confirmed that the audio was only reviewed by Mr Bentley for the first time on 2 March 2018, and it was then decided to meet with Ms Cranson on that day. He also confirmed in cross examination that the other employee who was involved in the conversation had not made any report about it, and she was still employed by the business. He also indicated that the content of the phone call was the final trigger that led to Ms Cranson’s termination, and it was “an inappropriate conversation to be had during work hours.” 9 He continued to indicate that he understood the term, “You can stick it in your pipe and smoke it, Cory,”10 to mean “she won't be adhering to any suggestions for processes put in place by Cory or other management staff.”11

[26] He also indicated in cross examination that no decision had been made to dismiss Ms Cranson in advance of the meeting on 2 March 2018, and the business wanted to consider her response before any decision was made. However, after considering her responses it was decided that her behaviour was inappropriate, and the decision was taken to terminate her employment. In addition, leaving aside the nature of the conversation the fact that Ms Cranson was involved in lengthy phone calls during work hours was a further concern, and placed additional strain on the Customer Service Department. He also indicated in cross examination that her comments amounted to misconduct and constituted a breach of her employment contract.

[27] The decision to terminate her employment was also made despite the fact that the phone call had been initiated by Ms Toering, as it was not appropriate for Ms Cranson to refer to Mr Bentley in the way that she did in that conversation. It was not considered necessary to take any action in regard to Ms Toering because her comments during the course of the conversation were not considered in the same light as Ms Cranson’s.

Mr Cory Bentley

[28] Mr Bentley is employed by Carhood as a Customer Service Manager, and Ms Cranson reported to him in that role. He indicated in his evidence that the business has approximately 30 employees, but does not have a dedicated HR department or specialist HR expertise.

[29] Mr Bentley’s evidence continued to indicate that on 14 July 2017 Ms Cranson acted in breach of a clear directive from the Acting Site Manager to cancel a rental booking. This direction was given because the booking had been made at short notice with insufficient time provided to carry out the required security checks. Carhood had strict policies and conditions in place that had to be satisfied before a customer could be eligible to rent a vehicle. This included a requirement that adequate timeframes be available between the time of making a booking and collecting the vehicle, to enable requisite details to be obtained about the origin of the renter, and their existing credit rating.

[30] Ms Cranson was provided with details about Carhood’s policies and procedures in October 2017, and how they could be accessed. She also participated in a staff knowledge quiz in April 2017, which confirmed she was aware of the relevant credit checking processes that were required to be conducted in regard to potential customers.

[31] Mr Bentley also indicated that all staff were aware that “last-minute” renters were an extremely high risk proposition, and if there was any uncertainty about the status of a customer before a vehicle was rented out then staff were instructed to contact either the Operations Manager or the CEO to determine how the matter should be dealt with. Ms Cranson’s failure in this regard to follow company directives, and the appropriate policies and procedures, had cost the business a significant amount in terms of both actual expense and reputational damage.

[32] In September 2017 the business introduced fixed hours for all sites and the Operations Manager instructed all staff in conjunction with this change that customers arriving out of hours were to make their own way to the depot, or to otherwise arrive during operating hours. However, Ms Cranson ignored this requirement, and on one occasion collected a customer from the airport which potentially exposed the business to additional liability and safety risks.

[33] He also considered that Ms Cranson made defamatory comments about him, and about the business, in her telephone conversation with Ms Reid in November 2017.

[34] Ms Cranson was also provided with the details about the various issues of concern associated with her behaviour, and was then provided with an adequate opportunity to respond to those concerns before the decision was made to terminate her employment. The two warnings given to her previously were also raised during the course of the meeting on 2 March 2018, and she was provided with an additional opportunity to respond to the alleged misconduct involved in the course of the telephone conversation on 1 February 2018.

[35] Mr Bentley also indicated in cross examination that he had no intention of terminating Ms Cranson’s employment prior to the discussions in the meeting on 2 March 2018, and wanted instead to discuss the circumstances with her and to enable her to provide a response. He also acknowledged that some of the comments attributed to Ms Cranson in the correspondence given to her did not appear in the written transcripts provided by Carhood in these proceedings. However, he understood that those comments did appear on the audio files.

[36] He also stated in cross examination that the recording and monitoring of staff phone calls was done to make sure the correct information was being given to customers. The monitoring of calls between staff members was also carried out to make sure that the content of these calls was work-related. All staff members were aware their phone calls were being monitored, and this assisted in enabling them to understand their strengths and weaknesses, and where they need to improve. He denied that the monitoring of staff phone calls constituted “snooping,” 12 and it was instead directed at maintaining and ensuring quality. These processes were common practice in call centre operations.

[37] He also confirmed in cross examination that the Brisbane Site Manager was not disciplined over her role in the phone call with Ms Cranson on 1 February 2018, but he did provide feedback to her Manager about the conversation and what was discussed. He also considered that the comments about the “company being crap,” and “stick it up your pipe and smoke it Cory” were defamatory. The comments were also inappropriate, regardless of which staff members they were directed at. There had also been a number of meetings and discussions with staff about the need to keep internal phone calls to a minimum so that they were not diverted from dealing with calls from customers.

[38] Mr Bentley acknowledged in cross examination that there was no follow-up meeting with Ms Cranson after the warning given to her on 25 July 2017, and there was no further evidence of her having disregarded appropriate directives since that time. However, she had in the past demonstrated a lack of care in her behaviour, as well as a preparedness to ignore directives given to her. She had also failed at times to follow relevant policies and procedures.

Consideration

[39] As indicated at the outset in dealing with this application the Commission is required to consider whether Ms Cranson’s dismissal was “harsh, unjust or unreasonable” taking into account the various considerations in s.387. The nature of the circumstances which might be considered to be “harsh, unjust or unreasonable” has been considered in various previous decisions. For example, in the often quoted decision in Byrne v Australian Airlines Ltd 13 McHugh and Gummow JJ concluded that:

“...It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.” 14

[40] The decision of the Full Bench of Fair Work Australia in L. Sayer v Melsteel Pty Ltd 15 also provides guidance about the Commission’s role in regard to each of the considerations in s.387. It concluded:

“Where the applicant does present a case, in the ordinary course each of the criteria in s.387 which is capable of being relevant on the facts emerging at the hearing must be taken into account.” 16

[41] Vice President Ross, as he then was, in B Rose v Telstra Corporation Limited 17 (Rose) restated the above proposition, and also added (references omitted):

“In my view whether there has been a `fair go all round’ is a matter which I think is relevant and hence I am to have regard to it determining whether the termination was harsh, unjust or unreasonable. It is not necessarily determinative but it is a factor to be taken into account.” 18

[42] I now turn to consider whether Ms Cranson’s dismissal can be said to be “harsh, unjust or unreasonable” taking into account each of the considerations in s.387.

(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)

[43] Previous authorities have again considered what is required in order to conclude that there was “a valid reason for the dismissal related to the person’s capacity or conduct.” The judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd 19 is often referred to in this context. His Honour came to the following conclusions:

“The reasons of an employer for terminating the employment of an employee are solely within the knowledge of the employer. The employer may state a reason but that reason need not be the actual reason nor need it be the only reason. This is the rationale for the onus of proof provisions contained in s 170EDA.

Section 170DE(1) refers to ‘‘a valid reason, or valid reasons’’, but the Act does not give a meaning to those phrases or the adjective ‘‘valid’’. A reference to dictionaries shows that the word ‘‘valid’’ has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: ‘‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’’ In the Macquarie Dictionary the relevant meaning is ‘‘sound, just, or well founded; a valid reason’’

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…” 20

[44] In Parmalat Food Products Pty Ltd v Wililo 21 the Full Bench also concluded that:

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.” 22

[45] The Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 23 (“Australian Postal Corporation”) also provides a useful summary of the approach to be taken by the Commission in weighing the various factors to be considered:

“Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:

(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;

against

(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.” 24

[46] It is also clear that the reason must be valid when viewed objectively. It is not sufficient that the Employer believed it had a valid reason for termination. This was made clear in the Full Bench decision in Rode v Burwood Mitsubishi 25 at paragraph 19 when it stated:

“…the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” 26

[47] These authorities make clear that the existence of a “valid reason” is generally the most important consideration among those in s.387. It is also clear from these authorities that a “valid reason” is one that is “sound defensible and well founded,” as opposed to one that is capricious, spiteful or prejudiced. It must also be valid in the context of both the capacity or conduct of the employee, and the operational requirements of the business. The test must also be applied in a practical, common sense way to ensure the parties are treated fairly in circumstances where each has rights and privileges, but duties and obligations as well. I have sought to adopt this approach in coming to a decision in this matter.

[48] The decision to terminate Ms Cranson’s employment was made after the meeting with her on 2 March 2018. The meeting had been arranged to discuss the content of an earlier phone call on 1 February 2018 between Ms Cranson and the Site Manager in the Brisbane office. However, the termination letter given to Ms Cranson also made reference to previous warnings given to her, and it is evident that these also contributed to the decision that was finally made to terminate her employment. It is appropriate to consider the circumstances involved in each case.

[49] The first warning was provided to Ms Cranson in July 2017. It involved a situation in which she is alleged to have accepted a booking from a customer at short notice, meaning that there was insufficient time available to carry out the required credit/reference checks on that customer. These circumstances were then compounded when the customer subsequently caused damage to the rental vehicle. As a consequence Carhood was subsequently unable to recoup the cost of the damage through its insurance arrangements. The warning letter makes reference to Ms Cranson accepting the rental booking, despite being advised by the acting Site Manager that it should be cancelled. It also refers to her failure to follow company policy and procedure by not conducting a credit score check. It also indicates that a further meeting would be scheduled on 6 August 2017 to review her progress.

[50] However, Ms Cranson indicated in her evidence that when the Acting Site Manager, Ms Esmilla, became aware of the booking a discussion took place, and Ms Esmilla finally decided that the booking should proceed. Ms Cranson also states that the Executive Director of the business, Mr Steven Johnson, had previously told her that a booking, once made, should not be cancelled, and she was not aware of any specific policy or procedure dealing with bookings taken at short notice. Ms Cranson also states that she was not responsible for carrying out customer credit score checks, and this was instead the responsibility of the operations staff. She also indicated that she was given only a limited opportunity to provide any explanation about what occurred prior to being given the warning letter. In addition, the further meeting that was foreshadowed to review her progress did not take place.

[51] The second warning letter was dated 30 November 2017, and was again signed by Mr Bentley as the recently appointed Customer Service Manager. It concerned the content of a phone call Ms Cranson made to another staff member, Ms Jesse Reid, on 14 November. The warning letter referred, in part, to her criticisms of senior management and the business during that conversation. It also accused her of revealing confidential information about other employees’ entitlements. It concluded by indicating that she should not be involved in phone calls of this nature with other staff members, and “phone calls to other team members should only be for gathering information for a relevant business enquiry. You have not only slandered management and the company, you have also spread false rumors and have disclosed private and confidential information which is a breach of your employment agreement.” 27

[52] The letter continued to indicate that long conversations with other staff members that were not work-related also impacted on other customer service staff, and on the productivity of the business. It concluded by indicating that Carhood reserved the right to terminate her employment if there was no improvement in her performance by 30 December 2017. It again proposed that a further meeting be held on 14 December 2017 to enable her progress to be reviewed.

[53] Ms Cranson, firstly, takes issue in response with the recording and monitoring of telephone conversations between staff members, and submits that it is a practice that amounts to “snooping.” Mr Bentley in his evidence rejects these assertions and states that call monitoring is a common practice in the call centre industry, and extends to include calls made between employees as well as to calls made between staff and customers. It obviously unusual for a business to be monitoring calls made between staff members. However, the evidence of Mr Bentley about practices in the call centre industry is acknowledged and understood. In addition, an employer is clearly entitled to inform its employees that they should not be involved in extended telephone conversations with other staff members, unless they concerned work-related matters.

[54] Carhood also takes issue with the criticisms made about the business in the conversation between Ms Cranson and Ms Reed, and about some members of the management team. Ms Cranson submits in response that it is being overly sensitive in this context, and the comments were not defamatory, as claimed by Mr Bentley. It is acknowledged in response that it is inevitable in any business that some employees in their private conversations with other employees are from time to time going to be critical of both their employer and other employees.

[55] Ms Cranson also makes reference in her submissions to one further matter which is of significance. The warning letter given to her makes particular reference to her comments that “Yes, Daryl is like that” 28 and “this company is a crap.”29 It also makes reference to a statement attributed to her, “I used to give a shit, but now this is just a job.”30 However, Carhood provided a transcript of the relevant telephone conversation in the materials provided in response to the application. It contains a number of criticisms by the two employees about the business and their employment, however, it does not make reference to the above statements attributed to Ms Cranson although she does state at one point, “And I’ve just lost interest in the place, I’m just here, it’s just a job now.”31

[56] This is clearly a matter of significant concern in terms of the validity of the process gone through. Various statements made by Ms Cranson have been relied on as the basis of providing her with a warning. However, the available evidence indicates that she did not actually make those statements. In addition, she was only provided with a limited opportunity to respond to the allegations made about her, and a further meeting foreshadowed in the warning letter to review her progress did not take place.

[57] Ms Cranson’s employment was finally terminated as a consequence of a telephone conversation she had with the Brisbane Site Manager, Ms Yvonne Toering, on 1 February 2018. The content of this conversation apparently came to light on 2 March 2018 following what was described as a “call quality check” 32 carried out by Mr Bentley in his role as Customer Service Manager. The termination letter given to Ms Cranson makes reference to that part of the conversation where the two employees were discussing a management plan being considered regarding the introduction of security bonds for uniforms and other materials provided to employees. The letter makes particular reference to the comment that was made by Ms Cranson along the following lines, “I’ll take him to fair work, Cory can stick this up his pipe and smoke it.”33 The letter continued to indicate, “This is an inappropriate conversation to have during work hours to a colleague.”34

[58] The materials provided by Carhood again included an extract from the relevant conversation between Ms Cranson and Ms Toering. It makes clear that both employees were complaining about the possibility of being required to pay what was described as a “staff bond.” 35 The actual words attributed to Ms Cranson are as follows, “I’m gonna bloody take them to Fair Work. If I’ve not given permission, they’re not gonna take it.”36 Ms Toering then replies, “Oh, you little rebel, Alice.”37 Ms Cranson then states, “You can stick that in your pipe and smoke it, Cory.”38

[59] A number of things can be said about this conversation. Firstly, the phone call was not initiated by Ms Cranson, but was instead made by the Site Manager in Brisbane, Ms Toering. Secondly, she was also critical of the business in the conversation with Ms Cranson, including in regard to the proposed introduction of employee staff bonds. However, it appears that it was not considered necessary to take any action in regard to Ms Toering, despite the fact she initiated the phone call and was clearly the more senior employee.

[60] It is also necessary to give consideration to the actual words used and, in particular, to the reference to, “You can stick that in your pipe and smoke it, Cory.” Ms Cranson attempted in her submissions to make light of this statement, and to categorise it as being relatively harmless in nature. However, I am satisfied that it was a statement that was intended to be contemptuous of Mr Bentley, and of the suggestion that some form of staff bond or levy be imposed upon employees. However, despite the fact that the business was apparently recording and monitoring the calls that were being made between employees, the conversation between Ms Cranson and Ms Toering was essentially a private one which was not intended to be heard by anyone else. It is also inevitable in such discussions that employees will from time to time be critical of their employer and other employees in the business. This is simply a fact of life given the amount of time employees spend in the workplace. In this case the proposal to introduce a staff bond could also be viewed as a controversial measure and one likely to prompt critical discussion amongst employees.

[61] It is acknowledged in response that critical comments made in a discussion between two employees might provide the basis for disciplinary action. However, it is difficult to conclude that the comments made in this case by Ms Cranson fall into that category.

[62] I have reviewed the various circumstances that were indicated in the termination letter given to Ms Cranson to provide justification for her dismissal. It appears in each case that there are significant doubts about whether when considered separately, or when taken together, they can be said to provide the basis of a valid reason for her termination. In terms of the first warning there seems to be some doubt about whether Ms Cranson actually acted in breach of the stated policy and procedure. The second warning then appears to be based upon statements attributed to Ms Cranson that are not confirmed in the evidence provided about the relevant telephone conversation. Thirdly, it is difficult to conclude that the content of the telephone conversation in February 2018 provides a basis for her termination. It also appears that Ms Cranson was singled out and treated differently from other employees. I am not satisfied, in conclusion, that it can be said that Carhood had a valid reason for its decision to terminate Ms Cranson’s employment.

(b) whether the person was notified of that reason

[63] Ms Cranson was notified of the reason for her dismissal in the termination letter that was provided to her at the conclusion of the meeting on 2 March 2018.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[64] Ms Cranson was provided with the opportunity to respond to the reasons related to the decision to terminate her employment, and Mr Bentley and Mr Johnson state in their evidence that they had not made a decision prior to the meeting on 2 March to terminate her employment, and instead wanted to provide her with the opportunity of responding before any decision was taken in regard to the matter.

(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

[65] There is no evidence indicating whether Ms Cranson was provided with the opportunity of having a support person present in the meeting on 2 March, however, there is no evidence indicating she was refused such opportunity.

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[66] Ms Cranson had been warned on two previous occasions prior to the meeting on 2 March.

(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.

(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

[67] I am satisfied that it is appropriate to deal with each of the above matters together. Carhood by its own admission is a relatively small organisation and does not have dedicated human resource management or expertise. I am satisfied that these circumstances impacted on the procedures involved in carrying out Ms Cranson’s termination but, at the same time, Mr Johnson and Mr Bentley endeavoured to do what they considered to be appropriate in all the circumstances.

(h) any other matters that the FWC considers relevant

[68] I am not aware of any further matters that need to be considered in this context.
Conclusion

[69] I have had regard to all of the submissions and evidence provided by the parties in this matter. As indicated, I have also had regard to each of the matters in s.387 that the Commission is required to take into account. I am satisfied in all the circumstances that Carhood’s decision to dismiss Ms Cranson was at least “harsh” and “unreasonable,” and that she has therefore been unfairly dismissed. In coming to this decision I have had particular regard to the conclusions reached in regard to “valid reason.”

[70] Having come to this conclusion I am now required to consider what is an appropriate remedy in the context of s.392 of the Act. I can also indicate that I am satisfied that reinstatement is not a relevant consideration, given the degree of antipathy demonstrated by the participants in the proceedings, and the fact that Carhood is a relatively small organisation. In addition, Ms Cranson clearly does not seek to be reinstated to her position, and Carhood is opposed to any such suggestion.

Remedy

[71] Section 392 of the Act states:

“Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(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 the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1 must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period – the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.” 39

[72] In relation to the amount of any compensation that might be awarded previous Commission decisions have made clear that it is necessary to take into account all of the circumstances of the case, including the specific matters identified in s.392(2)(a) to (g), and to consider the other relevant requirements in s.392. The long established approach to the assessment of compensation is to apply the formula derived from the Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (“Sprigg”). 40 This approach was most recently confirmed in the context of the present legislative framework by the Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge (“Bowden”).41 The first, and perhaps most important step to be taken, is to determine what the employee would have received by way of remuneration, or would have been likely to receive, if they had not been dismissed. This was described in Bowden, citing Ellawala v Australian Postal Corporation,42 in the following terms:

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’. This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the ‘anticipated period of employment’ are deducted.” 43

[73] Once this assessment has been made various adjustments are then required, including for the amount of income earned since the time of dismissal, any amount on account of contingencies, any reduction on account of the employee’s misconduct, and the application of the statutory salary cap. This approach is, however, subject to the overarching requirement to ensure that the level of compensation is an amount that is considered appropriate having regard to all of the circumstances.

[74] I now turn to deal with the matters in s.392 in the order in which they appear. I am not aware of any evidence to suggest, firstly, that there is any issue concerning the effect of any order of compensation on the viability of Carhood. It apparently had around 30 employees at the time Ms Cranson was dismissed and has now been operating for more than 4 years.

[75] Ms Cranson has, secondly, been employed by Carhood for less than a year and a half. While this is not an insignificant period of service it is clearly not a long period of employment.

[76] The Commission is next required to consider what remuneration Ms Cranson would have earned if she had not been dismissed. This involves making an estimate about how long she might have remained in employment had she not been dismissed. As indicated, this is inevitably a matter that is difficult to come to a definitive conclusion about.

[77] However, I am satisfied that a number of circumstances are relevant in this context. Firstly, as indicated Ms Cranson had only been employed by Carhood for a relatively short period of time. Whilst this is not of itself conclusive it does not lend weight to a conclusion that she was unlikely to continue to be employed by the business for an extended period of time. Secondly, Ms Cranson had already been warned about issues to do with her work performance on the two separate occasions prior to her employment being terminated. On each of these occasions she was informed that she might be dismissed if her performance did not improve. While the Commission has questioned whether those warnings were warranted in all the circumstances, the fact that they were given to Ms Cranson indicates that the business had concerns about her ongoing employment.

[78] The final matter which is of particular significance relates to Ms Cranson’s own comments in the separate conversations with Ms Reid in November 2017, and with Ms Toering in March 2018. These have already been referred to at some length during the course of this decision. However, it is noted in the present context that in the discussion with Ms Reid in November 2017 Ms Cranson refers to “this place” 44 being “totally screwed.”45 She also states at a later point in the conversation after complaining about the pay rates, “And I’ve just lost interest in the place, I’m just here, it’s just a job now.”46 Her conversation with Ms Toering in February 2018 also contains references to her complaints about the business, and the action she was contemplating taking against it.

[79] I am satisfied in response that each of these circumstances indicate that it was most unlikely that Ms Cranson would have continued to have been employed by Carhood for an extended period of time if she had not been dismissed. Again, while it is impossible to be precise about how long that period might have been, I am satisfied that it is reasonable to conclude that in all the circumstances she would not have remained in employment for a period of more than 6 months.

[80] Ms Cranson provided a document which details the attempts she has made to find work elsewhere. She has made a number of job applications, and has had several job interviews, but at the time of the hearing had been unsuccessful in obtaining employment elsewhere. However, I am satisfied that it is reasonable to assume that Ms Cranson would be able to obtain further employment within a reasonable period of time and it is appropriate for some deduction to be made from any amount of compensation as a consequence.

[81] The legislation also makes clear that if the Commission is satisfied that the employee’s misconduct contributed to the decision to dismiss the employee then the amount that might otherwise be ordered is to be reduced. This decision has already concluded that Ms Cranson was not involved in conduct that justified the termination of her employment. However, at the same time it was perhaps unwise of her to be making some of the comments that she did in the telephone conversations with other employees, given she was aware those conversations were being recorded and monitored. It also appears that she was at times almost too anxious to respond to customer requirements and, in doing so, was prepared to cut corners or bend the rules in the course of attempting “to keep the customer satisfied.” The circumstances involving the customer who lived in Geelong is a clear case in point. Despite the fact that this customer was not prepared to travel to Carhood’s premises, and was travelling with a dog, which rendered her ineligible to book a rental vehicle, Ms Cranson picked her up from the airport in her own vehicle and drive her to her intended destination, which turned out to be in Geelong. While this can be viewed on the one hand as an example of incredible customer service Ms Cranson’s actions clearly extended way beyond the scope of the services provided by the business, and may have potentially exposed it to other issues. I am accordingly satisfied in all the circumstances that it is appropriate to reduce the amount of compensation that might otherwise be awarded to Ms Cranson by an amount of 15 percent.

[82] The decision in Sprigg also makes reference to the requirement to consider the impact of contingencies, and whether they should have any impact on the amount to be awarded. It also makes clear that this applies, in particular, to the estimate being made about the anticipated period of future employment. Given all of these uncertainties in this matter I am satisfied that it is appropriate to make a further deduction of 15% from the total amount of compensation awarded.

[83] The compensation cap is then referred to in s.392(5), and provides that the amount ordered by the Commission must not exceed the lesser of the total amount of remuneration either received by the person, or to which the person is entitled for any period of employment with the employer during the 26 weeks immediately before the dismissal, and half the amount of the high income threshold immediately before the dismissal. That amount was $145,400.00 immediately before the time of Ms Cranson’s dismissal. The amount of compensation currently under consideration in this matter is clearly well below the compensation cap.

Conclusion as to Remedy

[84] The amount of compensation that the Commission has accordingly arrived at has been calculated on the following basis:

•  Step 1: lost remuneration (six months) – $21,429.72

•  Step 2: remuneration likely to be earned (10 weeks) – $8,242.20

•  Step 3: deduction for contingencies (20%) – $2,802.34

•  Step 4: deduction for misconduct (15 %) – $1,681.41

= $8,703.77

[85] The final amount of compensation to be ordered is therefore $8,703.77, less deduction of any tax as required by law. I am satisfied that this amount of compensation is an appropriate amount in all the circumstances. In accordance with s.392(1) the amount of the order does not include any payment by way of compensation for shock, distress, humiliation, or other analogous hurt caused to Ms Cranson by the manner of her dismissal.

[86] The Commission accordingly orders that Carhood pay Ms Cranson the sum of $8,703.77, less deduction of any tax as required by law, within 21 days of the date of this decision. An Order to this effect is issued in conjunction with this decision in PR705238.

COMMISSIONER

Appearances:

G Dircks and T Koletsos for the Applicant.

S Johnson and C Bentley for the Respondent.

Hearing details:

2018.

Melbourne:

July 18.

Printed by authority of the Commonwealth Government Printer

<PR705237>

 1   Fair Work Act 2009 (Cth) s 385.

 2   Fair Work Act 2009 (Cth) s 387.

 3   Witness Statement of Alice Cranson dated 28 May 2018, attachment AC3.

 4   Ibid, [24].

 5   Warning letter from Carhood to Alice Cranson, dated 30 November 2017.

 6   Ibid.

 7   Witness Statement of Alice Cranson dated 28 May 2018, attachment AC4.

 8   Transcript, PN449.

 9   Transcript, PN223.

 10   Transcript, PN223.

 11   Transcript, PN225.

 12   Transcript, PN450.

 13 (1995) 185 CLR 410.

 14   Ibid, 465.

 15   [2011] FWAFB 7498.

 16   Ibid, [20].

 17   Print Q9292 (AIRC, Ross VP, 4 December 1998).

 18   Ibid.

 19 (1995) 62 IR 371.

 20   Ibid, 373.

 21   [2011] FWAFB 1166.

 22   Ibid, [24].

 23   [2013] FWCFB 6191.

 24   Ibid, [58].

 25   Print R4471 (AIRCFB, Ross VP, Polites SDP, Foggo C, 11 May 1999).

 26   Ibid, [19].

 27   Respondent’s Outline of Submissions dated 14 June 2018, attachment CH8.

 28   Warning letter from Carhood to Alice Cranson, dated 30 November 2017.

 29   Ibid.

 30   Ibid.

 31   Respondent’s Transcript of CH6, filed on 15 June 2018.

 32   Respondent’s Outline of Submissions dated 14 June 2018, attachment CH9.

 33   Ibid.

 34   Ibid.

 35   Respondent’s Transcript of CH7, filed on 15 June 2018.

 36   Ibid.

 37   Ibid.

 38   Ibid.

 39   Fair Work Act 2009 (Cth)s 392.

 40 Print R0235 (AIRCFB, Munro J, Duncan DP, Jones C, 24 December 1998) [(1998) 88 IR 21].

 41   [2013] FWCFB 431.

 42   Print S5109.

 43   Ibid.

 44   Respondent’s Transcript of CH6, filed on 15 June 2018.

 45   Ibid.

 46   Ibid.