Amalle Halabi v The Star Pty Limited

[2014] FWC 415

[2014] FWC 415

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Amalle Halabi
v
The Star Pty Limited
(U2013/7754)

COMMISSIONER CARGILL SYDNEY, 19 FEBRUARY 2014

Application for relief from unfair dismissal.

[1] This decision arises from an application by Ms A Halabi (the applicant) pursuant to section 394 of the Fair Work Act 2009 (the Act) for relief in respect of the termination of her employment by The Star Pty Limited (the respondent or The Star). The applicant’s dismissal occurred on 1 March 2013 and her application for relief was lodged on 21 March 2013.

[2] The matter was dealt with by a Conciliator on 18 April 2013 but did not settle. It was heard by me in Sydney on 14 and 15 October, 4 November and 18 December 2013. There was also a telephone directions conference on 24 October 2013.

[3] The substantive matter proceeded by way of hearing as I considered that it was appropriate to do so having taken account of the factors set out in section 399 including the views of the parties reflected in the Conciliator’s Report.

[4] The applicant was represented by Mr Lynch, solicitor and the respondent by Mr Seck of Counsel. Both representatives appeared by permission pursuant to section 596.

[5] The applicant gave evidence. Her witness statement dated 20 May 2013 became Exhibit Applicant 1 and her witness statement dated 21 May 2013, Exhibit Applicant 2. The applicant’s oral testimony is at PN54 - 1863 of Transcript.

[6] The following witnesses also gave evidence in the applicant’s case:

Ms T Nguyen	Former colleague of the applicant. Her witness statement dated 20 May 2013 was marked Exhibit Applicant 5. Her oral testimony is at PN 1873 - 2547 of Transcript;
Mr S Lim	Former colleague and manager of the applicant. His witness statement dated 17 May 2013 was marked Exhibit Applicant 6. His oral testimony is at PN2563 - 2849 of Transcript.

[7] Both Ms Nguyen and Mr Lim appeared in response to orders requiring them to attend.

[8] The following witnesses gave evidence on behalf of the respondent:

Ms K McCormack	Senior Human Resources Advisor with the respondent. Her witness statement dated 5 July 2013 was marked Exhibit Respondent 5. Her oral testimony is at PN2943 - 3252 of Transcript;
Mr S Neish	Formerly General Manager, VIP Marketing with the respondent. Mr Neish appeared in response to an order requiring him to attend. He is presently located in the Republic of South Africa and provided his evidence via a Skype link. His oral testimony is at PN3275 - 3593 of Transcript;
Ms P Hammond	General Manager of Human Resources with the respondent. Her witness statement dated 3 July 2013 was marked Exhibit Respondent 7. Her oral testimony is at PN3598 - 3656 of Transcript;
Ms V Ebert	Customer Relations Team Leader with the respondent. Her witness statement dated 5 July 2013 was marked Exhibit Respondent 8 and her supplementary statement dated 19 September 2013 was marked Exhibit Respondent 9. Her oral testimony is at PN 3669 - 3869 of Transcript.

[9] There was extensive evidence and much material provided in these proceedings. Although I may not specifically refer to each and every issue raised, in reaching my conclusions I have had regard to all relevant materials and evidence before me.

[10] It should be noted that there is an order pursuant to section 594 relating to certain parts of Exhibit Respondent 8, to Exhibit Respondent 1 and to references to and transcript concerning that material. As a consequence, my description of some material may be more general than it would otherwise be.

FACTS AND EVIDENCE

[11] The respondent operates The Star Casino in Sydney. The applicant commenced her employment with the respondent in 1997. This was only her second job after leaving school. Since 2006, and as at the date of her dismissal, the applicant occupied the position of a Customer Relations Executive (CRE).

[12] Each CRE is allocated a number of what have been described as “Key Customers” or “VIP members” to assist and look after. The main role of the CRE is to build relationships with those customers with a view to increasing their patronage of The Star. As part of that role, CREs are authorised to provide benefits and rewards to their particular group of customers. These include complimentary dining vouchers, hotel bookings, tickets to shows or other events and, of particular relevance in this case, treatments at the Darling Spa, a spa facility within The Star complex (the Spa).

[13] CREs each have a monthly target and are provided with a particular budget to achieve that target. It is expected that they will expend their budget.

[14] There was much debate in the evidence about the characterisation of the ways in which the different types of rewards and benefits are provided to customers. In simple terms, some, usually larger events such as concerts, are planned and organised well in advance perhaps with the assistance of other departments. CREs are invited to nominate customers to attend these events. CREs also often attend.

[15] Other functions are organised by each CRE for some within their own group of customers. These are generally smaller events, for perhaps only a few customers, and are often hosted by the CRE. Occasionally there may be more than one CRE in attendance. Also in this category of rewards are vouchers for hotel stays which, for obvious reasons, are experienced by the customer alone or with their family and/or friends.

[16] This second type of event involves a greater degree of discretion and judgement on the part of each CRE than the former. CREs do not need to seek permission before providing these rewards and benefits which are mostly paid for by use of their individual Comp Card (as in “complimentary”). However the use of their individual budgets on such expenditure is monitored on a monthly basis by the Team Leader or Manager.

[17] Each CRE is provided with a Customer Relations Executive - Working Manual (Manual) which provides information about their role and the respondent’s expectations of them including in relation to the provision of rewards and benefits. The processes involved in this provision are set out in a Standard Operating Procedure (SOP) for such purpose. The applicant was issued with a copy of both the Manual and the SOP and was provided with training on each.

[18] The applicant also acknowledged that she had been trained in and was aware of the importance of the respondent’s Code of Conduct (the Code). The Code, which is Attachment KM14 to Exhibit Respondent 5, deals with conflicts of interest and the appropriate use of the respondent’s resources. It requires employees to act with honesty and integrity in any situation. It also provides that employees have an obligation to report breaches of the Code. The consequences of a breach of the Code include disciplinary action up to and including termination of employment.

[19] During her period of employment the applicant often acted in the role of Team Leader. It is the evidence of Mr Neish that she was being groomed for a leadership position. Ms Ebert agreed that the applicant was a valuable employee with a strong performance history, as reflected in Attachment VE 5 to Exhibit Respondent 9.

[20] Exhibit Respondent 2 contains a record of comments concerning the applicant from 2000 to 2010. It sets out a range of matters both positive and negative.

[21] During the course of 2012 the applicant organised and hosted two events at the Spa. Each involved the provision of a complimentary treatment for a group of customers. The applicant also received a complimentary treatment herself as part of the second event. There is some difference between the applicant and Ms Ebert as to whether the applicant sought management approval for her treatment before or after the event. Whatever the case, there was no objection to her receipt of the treatment which was a manicure/pedicure and which took place in a group setting with the customers.

[22] It is the evidence of the applicant that the feedback from customers was that they felt more relaxed and had a better experience when she participated in the event with them. She says that the experience had enhanced her in her role as a CRE and helped to build a closer rapport with her customers.

[23] On or around 12 February 2013 Ms Nguyen had a conversation with the applicant in which she told the applicant that she wanted to increase her revenue by organising additional events for her customers. The applicant suggested that she could do something at the Spa. The applicant sent an email to a representative of the Spa introducing Ms Nguyen.

[24] Ms Nguyen proceeded to organise two events at the Spa. The first took place on 17 February at which time Ms Nguyen and one customer had treatments. The second event occurred on 22 February. It is the circumstances surrounding this event which resulted in the dismissal of both the applicant and Ms Nguyen.

[25] Ms Nguyen had received confirmation from two of her customers for the event on 22 February. The event was scheduled for 1 pm. Late in the morning of 22 February Ms Nguyen received a text message from one of the customers advising that she would not be attending. Ms Nguyen then contacted the other customer who informed her that she was ill and would not be able to attend. Ms Nguyen rang the Spa to cancel the bookings but was informed that there was a 24 hour cancellation policy and consequently, the full cost of the proposed treatments would be charged. Ms Nguyen tried to contact other customers to attend the event but was unsuccessful in these endeavours.

[26] At approximately 12.45 pm Ms Nguyen and the applicant had a conversation. Ms Nguyen informed the applicant about the event, that there had been a cancellation, her attempts to cancel the bookings, and the cancellation policy. She asked the applicant to come with her instead. The applicant agreed.

[27] The applicant advanced several reasons for agreeing to attend the Spa: it was standard practice for CREs to fill unexpected gaps in the attendance of customers at events; she wanted to assist Ms Nguyen; she wanted to observe other events at the Spa as such events had initially been her idea and she was interested in the way Ms Nguyen had organised the event; the fact that the respondent would have to pay the full cost of the treatments because of the cancellation policy at the Spa; and, it would enhance her role as a CRE into the future.

[28] The applicant and Ms Nguyen hurried to the Spa and arrived at about 1 pm, the scheduled time for the treatments. There were no customers in the reception area when they arrived. The applicant’s evidence is that she assumed that the customers had already been shown to the treatment areas. The applicant and Ms Nguyen are both firm in their evidence that, at this stage, the applicant did not know that no customers were attending the event.

[29] Ms Nguyen and the applicant were taken to their separate treatment areas where each received a massage. I understand that the cost of the treatments was $560. Although the evidence is a little unclear as to whether this was charged to Ms Nguyen’s Comp Card or not, the cost of the treatments was borne by the respondent. When the applicant and Ms Nguyen met up in the lounge area after their treatments the applicant asked Ms Nguyen where the customers were. Ms Nguyen informed her that all of them had cancelled. Both the applicant and Ms Nguyen are adamant that, until this point, the applicant did not know that there would be no customers attending the event.

[30] The applicant’s evidence is that it was not unheard of to have an event where no customers attended. Sometimes cancellations occurred beforehand and, at other times, the customer or customers just didn’t show up. In such a situation the standard practice was to advise management. The applicant’s evidence is that she assumed Ms Nguyen, as the event organiser, would have advised her manager that the event had been unsuccessful. She did not report it herself. The applicant did not attempt to hide her attendance and spoke about the benefits of events at the Spa during a team meeting the following week.

[31] On 25 February 2013 Ms McCormack received an email relating to a concern which had been raised by the Director of the Spa about Ms Nguyen and the applicant having treatments when there had been no customers present and charging those treatments to their Manager’s card. Ms McCormack sought further details from the Director. The email exchanges are set out in Attachments KM3 and 4 to Exhibit Respondent 5.

[32] Ms McCormack then notified Mr Neish of the allegations against the applicant and Ms Nguyen and informed him that formal meetings would have to be held with each of them. Mr Neish indicated that one of the Team Leaders, a Mr Law, would provide notice of the meetings to the applicant and Ms Nguyen. Ms McCormack provided Mr Law with a brief overview of the allegations and asked him to provide each employee with 24 hours notice of the formal meeting, to explain the reason for the meeting and to inform them of their right to have a support person with them.

[33] At some point on 27 February Mr Law told the applicant that he would be sending her an email organising a meeting about the use of Comp Cards. He sent the email at 4.24 pm. It informed the applicant that there would be “a formal meeting to discuss employee entitlement on their Manager Comp Card. You can have a support person present at the meeting.” The meeting was notified as being at 5 pm on 28 February. The email is Attachment KM 8 to Exhibit Respondent 5. A similar email was sent to Ms Nguyen for a meeting at 4 pm on that date.

[34] The applicant’s evidence is that she assumed that the meeting was to enable her to provide information about the failure of the event on 22 February. She says that she had no idea that it related to any possible disciplinary action against her. As a result, she declined the invitation to bring a support person. The applicant’s evidence is that, if she had realised that allegations were going to be made against her, she would have wanted such a person with her.

[35] The meeting with Ms Nguyen took place at 4 pm on 28 February. The respondent was represented by Mr Neish, Ms McCormack and Mr Law. Both Mr Neish and Ms McCormack took notes. Mr Neish’s notes are at the first page of Exhibit Respondent 6. Ms McCormack’s handwritten notes are Attachment KM9 to Exhibit Respondent 5. At some point shortly after the meeting Ms McCormack typed up a file note based on her notes and her recollection of the meeting, Attachment KM10 to the Exhibit.

[36] It is the evidence of Ms McCormack that, during the meeting, Ms Nguyen informed them that the applicant knew that there were no customers attending the event on 22 February as she had told the applicant of this. Ms McCormack agreed that this had not been recorded in her handwritten notes but denied that this was because Ms Nguyen had not said this. She confirmed that Ms Nguyen had clarified that the applicant knew before receiving her treatment that there would be no customers.

[37] Mr Neish did not recall whether Ms Nguyen was asked whether the applicant had known there were no customers attending the event. His notes do not mention the matter either.

[38] Ms Nguyen’s evidence is that she recalled being asked whether the applicant knew there were no customers. She emphatically denied the statement attributed to her by Ms McCormack. Her evidence is “I definitely didn’t say that because Amalle didn’t know.”

[39] The applicant was called to her meeting half an hour before the appointed time. Her evidence is that this made her flustered. The respondent was represented by the same persons who were present at the earlier meeting with Ms Nguyen and the process of taking notes was the same. Mr Neish’s notes are at the second page of Exhibit Respondent 6. Ms McCormack’s handwritten notes are at Attachment KM11 to Exhibit Respondent 5 and her typed file note is Attachment KM12.

[40] The applicant’s evidence is that she felt pressured and intimidated during the meeting. She felt bullied by the manner in which some questions were asked and believed Ms McCormack was aggressive in some of her questioning. Ms McCormack denied that she, or the other representatives of the respondent, had acted other than in a calm, polite and professional manner.

[41] It is the evidence of Ms McCormack that, during the meeting, the applicant stated that she knew there were no customers coming when she arrived at the Spa and before she had her treatment. The handwritten notes record “In the Spa found that there were no customers” and “knew it wasn’t going to be an event before receiving the treatment” followed by “KMC when did you know no customers.” This record is reflected in the typed file note.

[42] Mr Neish’s notes record “when arrived at the Spa realised no customers”. His evidence is that this accorded with his recollection of what the applicant had said although he acknowledged that his specific recall of the events was “not great”. Under cross-examination Mr Neish agreed that the applicant had denied that she knew there were no customers before receiving her treatment and had stated that she thought they had already entered the facility. In re-examination he confirmed that he had to trust his notes.

[43] The applicant is firm in her evidence that she did not state that she knew that there were no customers attending the event when she arrived at the Spa. Her evidence is that she explained that she knew there were no customers in the reception area but not that none were there or coming at all. The applicant was apologetic for her actions which she agreed had not been one of her best decisions. She stated that she didn’t see what had happened as being a personal gain and noted that she had not previously abused a privilege.

[44] Ms McCormack, Mr Neish and Mr Law reached a preliminary view that the applicant’s conduct warranted dismissal but wished to discuss the matter with Ms Hammond. They then met with her.

[45] It is the evidence of Ms Hammond that Ms McCormack informed her that the applicant had acknowledged that she had been aware, before receiving her treatment, that there would be no customers in attendance. The applicant had also admitted that she knew what she had done was wrong. Mr Neish and Mr Law agreed with Ms McCormack’s summary.

[46] Disciplinary options were then discussed including summary dismissal, dismissal with notice or a final warning. Mr Neish raised the issue of the applicant’s length of service and expressed concern as to whether dismissal was appropriate in the circumstances. Ms Hammond stated that a final warning would set a bad precedent.

[47] Ms Hammond’s evidence is that the following issues were considered: the applicant’s decision to have the treatment in work time at the respondent’s expense; her culpability despite Ms Nguyen’s initial responsibility; the applicant’s acknowledgement that she knew before her treatment that there were to be no customers; her admission that she knew what she had done was wrong and that, if she had asked for permission beforehand, it would have been refused; the fact that the applicant could have changed her mind about having the treatment but didn’t; the loss of other business to the Spa; and, the cost of the products used.

[48] It was decided that the applicant had breached the respondent’s policies and procedures, in particular, by the inappropriate use of its resources, a failure to follow its procedures and the breach of its values. Ms Hammond viewed the applicant’s actions as a serious breach of the Code which warranted dismissal. The others agreed. It is the evidence of Ms Hammond that they considered the position of trust held by the applicant and the potential for further misuse of resources. The fact that neither the applicant nor Ms Nguyen had reported their actions to their managers was also relevant.

[49] A decision was made to dismiss the applicant with notice and Ms Nguyen without notice. These decisions were to be communicated to them on the following day. In the meantime each was suspended on pay. As Ms Nguyen was to be on annual leave, her meeting and her dismissal did not take place until 6 March.

[50] On 1 March the applicant met with Ms McCormack and Mr Neish. The applicant declined to have a support person present. She was informed of her dismissal. She was subsequently provided with a letter of termination dated 7 March, Annexure B to Exhibit Applicant 1 and Attachment KM21 to Exhibit Respondent 5. The reason for dismissal stated in the letter is:

“The Star has decided to terminate your employment because, by your conduct in accessing beauty therapy services at The Star’s expense on 22 February 2013, you engaged in improper misconduct in breach of your obligations as an employee of The Star, including your obligations under The Star’s Code of Conduct and other workplace policies.”

[51] It is the applicant’s evidence that she started looking for alternative employment shortly after her dismissal. In Exhibit Applicant 2 she states that this was a “few days after”, in her oral evidence she testifies that it was about two or three weeks later. She enquired about and applied for numerous jobs. Her evidence is that some customer relations positions were not suitable as they required experience in a particular industry or were offering much lower pay and responsibilities.

[52] The applicant was unemployed until 27 May when she commenced a new job. That is on a part-time basis of three days a week. As at 14 October, when she gave her evidence, she had been working approximately one extra shift each week for the previous two months. The applicant’s pay is lower than she was receiving while employed by the respondent. Payment summaries and payslips relating to employment with the respondent are Exhibit Applicant 3 and payslips relating to the applicant’s present employment are Exhibit Applicant 4.

[53] The applicant agreed that her present job requires different skills from those she had developed whilst employed at The Star. Her evidence is that she accepted the new role because she wanted to learn new skills and develop in the position which she says provides her with self-respect.

SUBMISSIONS ON BEHALF OF THE APPLICANT

[54] A written outline of submissions was provided prior to the commencement of proceedings. Mr Lynch also made oral submissions.

[55] Mr Lynch submitted that both the applicant and Ms Nguyen had been consistent in their evidence that the applicant had not been aware, until after her treatment, that there were to be no customers attending the event on 22 February. Ms Nguyen had organised the event and the applicant’s state of knowledge was entirely based on what she had been told by Ms Nguyen.

[56] Mr Lynch noted the applicant’s reasons for attending the event were to assist her colleague and to maximise the benefits for the customers and, consequently, the respondent. She had shared her experiences with others at the team meeting which took place the following week. Mr Lynch also noted the evidence about the positive responses from customers who had attended the event organised by the applicant when she had joined with them in the treatments.

[57] Mr Lynch submitted that the applicant had been honest and forthright in her evidence. She was firm that she had not told the respondent’s representatives in the meeting on 28 February that she knew there were to be no customers before receiving her treatment. Her evidence was clear that she saw no customers at the reception area and presumed they had already proceeded to their treatments.

[58] Mr Lynch submitted that Mr Neish’s evidence was consistent with that of the applicant and Ms Nguyen. In contrast, the evidence of Ms McCormack was just not credible. He noted that it had not been to Ms Nguyen’s advantage to have exonerated the applicant from responsibility and her evidence should be accepted. Mr Lynch further noted that Ms McCormack’s notes did not support her evidence about what Ms Nguyen had told the respondent concerning the timing of the applicant’s awareness of the absence of customers. Little weight should be given to the typed notes which were prepared after the dismissal.

[59] Mr Lynch submitted that the evidence disclosed a culture whereby CREs were encouraged to attend events organised by their colleagues. The applicant’s actions in accompanying Ms Nguyen were designed to benefit the respondent by encouraging customers to return to its premises.

[60] Mr Lynch submitted that the applicant’s actions did not amount to misconduct. She had been overly trusting of Ms Nguyen and perhaps it had been a lapse of judgement not to have questioned Ms Nguyen more closely about who was attending the event. Mr Lynch submitted that the applicant had not breached the Code. There had been no conflict of interest as her actions were not for personal gain. Neither had there been a misuse of the respondent’s resources.

[61] It is submitted that, even if it is determined that the applicant had engaged in misconduct, this did not amount to a valid reason for her dismissal. Mr Lynch submitted that the evidence concerning the previous dismissal of two other employees demonstrated how harshly the applicant had been treated. Those employees had obtained personal benefits of a higher value and then had lied to cover up their actions. Their situations were clearly very different to that of the applicant.

[62] Further, the respondent’s decision had been based on incorrect information. If it is accepted that the applicant didn’t know there were no customers when she had her treatment, the whole basis for the dismissal falls away. Ms Hammond was not told of the applicant’s reasons for joining in the event. Furthermore, Ms Hammond’s assessment of the applicant’s state of knowledge at paragraph 9 of her statement was wrong.

[63] Mr Lynch submitted that the respondent had given insufficient consideration to the applicant’s employment history and work performance. There were other options available such as removing the applicant’s access to a Comp Card or other disciplinary sanctions short of dismissal. Mr Neish’s evidence is that, in his view, dismissal had not been an appropriate outcome.

[64] Mr Lynch submitted that, although the applicant had been notified of the reason for her dismissal, that reason was not a valid one. He submitted that the applicant had not been afforded a proper opportunity to respond. The conduct of the respondent’s representatives at both meetings had been grossly unfair. The meeting on 28 February had been an investigatory meeting. The only disciplinary meeting was that which was held on 1 March and it was at that point that the applicant was informed of the dismissal.

[65] It is submitted that the applicant refused the offer of a support person for the meeting on 28 February as she thought it was for the purpose of providing information about the failure of the event on 22 February. She had not known that the meeting was in relation to her own actions. Mr Lynch submitted that, in the circumstances, the applicant should have been advised to reconsider her need for a support person.

[66] Mr Lynch submitted that, as an extremely large entity with extensive resources and a dedicated Human Resources Team, the respondent should be held to a high standard in relation to its procedures. He submitted that it had failed to meet that standard in this case.

[67] Particular failings included: the fact that, until the end of the meeting of 28 February, the applicant had not been aware that disciplinary action might be taken against her; the time of the meeting had been brought forward without reasonable notice; the applicant had been at a disadvantage in the meeting because of the disparate numbers; and the behaviour of the representatives had been intimidatory towards the applicant. Further, the applicant had been given no opportunity to review the notes taken at the meeting which would have provided clarification about what she had said.

[68] Mr Lynch submitted that the applicant’s dismissal was harsh, unjust and unreasonable. He submitted that it would not be appropriate to reinstate the applicant to her former position as the employment relationship had completely broken down. Instead, compensation should be awarded. Mr Lynch submitted that this should be calculated in accordance with the decision in Tabro Meat Pty Ltd v Heffernan[2011] FWAFB 1080 (Tabro). He provided a document setting out a summary of loss and compensation sought which, after the application of the compensation cap, amounts to $49, 933.97.

[69] It is submitted that regard should be had to the applicant’s age, length of unblemished service, the acknowledgement that she was an asset to the respondent and her intention to remain with the respondent for the rest of her career. It is noted that the applicant was unemployed for almost three months despite her diligent efforts to find other work. Her present remuneration is between $47,000 and $53,000 per year less than her earnings from the respondent.

[70] It is also submitted that there should be no reduction in compensation pursuant to section 392(3) because there had been no misconduct by the applicant. Alternatively, there should be a nominal reduction only when factors such as the value of the treatments to the respondent and the work history of the applicant are taken into account.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

[71] A written outline of submissions was provided prior to the commencement of proceedings. Mr Seck also made oral submissions.

[72] The respondent submits that the applicant’s dismissal was not harsh, unjust or unreasonable. It submits that there was a valid reason for the applicant’s dismissal as set out in the extract from the letter of termination at paragraph 50 above. Further it submits that the applicant dishonestly received a benefit for personal gain without obtaining permission from her manager in breach of both the Code and the respondent’s standard practice.

[73] The respondent submits that the applicant knew before receiving her treatment that there were to be no customers in attendance at the event at the Spa on 22 February and consequently, that there was no legitimate business purpose for her use of the Spa’s services. The applicant and Ms Nguyen admitted as much during the meetings on 28 February. Contemporaneous notes reflect these admissions.

[74] Mr Seck noted that there was a direct conflict in the evidence as to the accounts of what was said in the meetings on that day. He submitted that the evidence of Ms McCormack and Mr Neish should be preferred to that of the applicant and Ms Nguyen. He submitted that there is also considerable circumstantial evidence which supports the respondent’s version that the applicant had prior knowledge of the absence of any customers. Furthermore, the applicant’s failure to report the situation to management was a breach of the Code and, in itself, amounted to a valid reason for her dismissal.

[75] Mr Seck submitted that the evidence had been clear that the main focus of the role of CREs was to build personal relationships with high value customers in order to encourage their patronage of The Star and its facilities. The provision of benefits and rewards was an important means of doing this. The Manual and the SOP regulated this process to ensure that it was being done for the benefit of the business. Mr Seck noted this business purpose had been reinforced in discussions with the applicant in July 2008 and March 2009 as shown in Exhibit Respondent 2.

[76] It had also been reinforced by the 2009 dismissals of two employees for misuse of their Comp Cards. Mr Seck rejected the submission made on the applicant’s behalf that her case was different. He noted that the thrust of the allegations in each instance related to misuse of Comp Cards. Mr Seck also noted that the memo at Attachment VE3 to Exhibit Respondent 9 had emphasised the fact that Comp Cards were not to be used for personal entertainment.

[77] Mr Seck submitted that the operation of the relevant policies was underpinned by the Code and letters of appointment signed by the applicant. He noted that the applicant had agreed that she had read and understood the relevant provisions.

[78] Mr Seck submitted that there were three parts of the Code which were of particular relevance in this matter. The first, conflict of interest, was an objective standard and consequently the applicant’s assertion that her actions were for the benefit of the business was not relevant. The second, improper use of company resources, is no less relevant because the cost of the treatments was charged to Ms Nguyen’s card rather than to the applicant’s. The third was the obligation to report any breach of the Code. Mr Seck submitted that the applicant had six days following the event during which she could have complied with this obligation.

[79] Mr Seck submitted that, contrary to the position put on behalf of the applicant, Ms McCormack’s notes of the meetings on 28 February should be accepted. Any differences between the handwritten and typed notes are explicable in the circumstances. Mr Seck submitted that there was no reason why Ms McCormack would have fabricated her notes. She didn’t know the applicant, her notes are supported by those of Mr Neish, her contemporaneous report to Ms Hammond was in the same terms and the notes were typed well before this claim was made.

[80] Mr Seck rejected the suggestion that there had been procedural unfairness because Ms McCormack’s notes had not been given to the applicant for her to check.

[81] Mr Seck submitted there was also circumstantial evidence which supported the fact that the applicant knew beforehand that there were to be no customers at the event. He noted that there was a conflict between the applicant and Ms Nguyen as to whether Ms Nguyen ever told the applicant that there would be customers. Further, it was not plausible that the subject had not been discussed during their walk to the Spa or that, upon arrival there, they had not inquired as to the whereabouts of the customers.

[82] Mr Seck submitted that, if the applicant’s version of events on 22 February is accepted, it would have been reasonable to have expected that she would have been outraged at being used by Ms Nguyen. However, she had expressed no such concern in her statement or under cross-examination. Neither had she shown concern about discovering that she had received a benefit without the presence of any customers. Rather she had sought to explain the situation away.

[83] Mr Seck submitted that the applicant’s explanation for her failure to report the incident should be rejected. He submitted that the evidence was clear that the respondent did not tolerate misuse of its resources, in particular, the use of Comp Cards for personal benefit. In addition, regardless of any potential embarrassment for Ms Nguyen, the applicant’s obligation to report the matter to management remained.

[84] Mr Seck rejected all of the applicant’s explanations for accompanying Ms Nguyen to the Spa referred to in paragraph 27 above. He submitted that the applicant’s suggestion that authorisation was not required for such attendance was contrary to the evidence of her own witnesses.

[85] Mr Seck noted that the event on 22 February was not of the special kind which would have required the attendance of more than one CRE. Consequently there could have been no possible reason for the applicant to have gone even if customers had been present. She had previously sampled the treatments at the Spa and could recommend them without requiring any further experience there. Mr Seck submitted that there was no basis for the applicant’s evidence that she had been attempting to assist Ms Nguyen.

[86] Mr Seck submitted that it may be possible to infer that the applicant and Ms Nguyen had connived to create a consistent version of events on 22 February. He noted however that he could not put this any higher than an inference.

[87] Mr Seck submitted that, even if it is accepted that the applicant’s actions could be characterized as an error of judgement, it was still sufficiently serious to amount to a valid reason for dismissal. Mr Seck referred to two decisions as being relevant in this regard: Petrosillo v Coles Group Supply Chain Pty Ltd [2009] AIRC 3 and Applicant v Virgin Australia Airlines Pty Ltd [2011] FWA 5595.

[88] Mr Seck submitted that the evidence was clear that the respondent had a high degree of trust and confidence in the CREs. This was especially so with one as experienced and senior as the applicant. The breaches of the respondent’s policies and procedures were consequently of sufficient seriousness as to warrant termination.

[89] Mr Seck submitted that the decision making process had been open and fair. He submitted that the evidence was clear that Ms McCormack had informed Ms Hammond that the applicant had acknowledged that she had been aware before receiving her treatment that there would be no customers at the event. This had been confirmed by Mr Neish and Mr Law. Mr Seck submitted that it was inherently improbable that information which was untrue would have been provided so soon after the meeting with the applicant.

[90] Mr Seck noted that there had been a discussion about mitigating factors in the applicant’s favour which had been put forward by Mr Neish as well as consideration given to a range of disciplinary options. Mr Seck noted that the respondent accepted that the applicant had a good performance record. He submitted however that the question in this matter related to the applicant’s conduct not her performance.

[91] Mr Seck submitted that the applicant’s evidence that she was not aware the 28 February meeting could have adverse disciplinary outcomes for her should not be accepted. He noted that it was contrary to Ms Nguyen’s evidence which, he submitted, should be preferred. He also submitted that this reflected poorly on the applicant’s overall credibility.

[92] The respondent submits that its size and the presence of human resource specialists did not adversely impact upon the decision to dismiss the applicant or contribute to any unfairness in the disciplinary process.

[93] It is submitted that the applicant had been provided with a full opportunity to respond to the allegations against her. She had also been able to put forward any additional material such as mitigating circumstances. Mr Seck noted that there was no suggestion that the outcome had been predetermined. Ms Hammond didn’t even know about the issue until she was consulted after the meeting had been held with the applicant.

[94] Mr Seck noted that the applicant was seeking compensation, not reinstatement. He submitted that ultimately this was a question of discretion. Mr Seck submitted that one of the factors which should be taken into account is the applicant’s truthfulness. If a finding is made that the applicant has not been honest in her evidence it is open to me to decide not the grant a remedy.

[95] Any amount of compensation should be discounted, if not entirely eliminated, for the applicant’s misconduct. Further, it is submitted that the applicant had failed to reasonably mitigate her loss. She could have applied for many other jobs as evidenced in Exhibit Respondent 3. A further relevant factor is the applicant’s conscious decision to change her career. The respondent should not be required to compensate her for that move. The payment in lieu of notice should also be taken into account.

[96] Mr Seck challenged the material on compensation which had been put on the applicant’s behalf and submitted that it was based on a flawed approach. He submitted that the proper approach was to look at the period of six months following the dismissal, assess the loss after taking account of actual earnings, the payment of notice and what could have been earned if there had been reasonable mitigation. Mr Seck submitted that what remained was much less than the amount sought by the applicant.

SUBMISSIONS IN REPLY ON BEHALF OF THE APPLICANT

[97] In his submissions in reply Mr Lynch made the following points:

● the question of the credibility of the various witnesses should be decided on the basis of the totality of their respective evidence rather than on specific passages;

● Mr Neish’s evidence had supported the evidence given by both the applicant and Ms Nguyen about what occurred in their meetings on 28 February;

● Ms Nguyen had been adamant that she had never told the respondent’s representatives that the applicant had prior knowledge about the absence of customers at the event;

● the applicant had provided clear evidence of the benefits of experiencing the treatments herself;

● no adverse inference should be drawn from the failure of the applicant and Ms Nguyen to have had discussions on their way to the Spa about an appropriate strategy for the event;

● the suggestion that there had been connivance between the applicant and Ms Nguyen about their evidence should be rejected;

● the decisions relied upon by the respondent are clearly distinguishable;

● it was possible that Ms McCormack had reached her preliminary view which had then coloured her later actions;

● Ms Nguyen’s evidence supported the applicant’s statement that she had no idea that the 28 February meeting could result in any disciplinary outcome for her;

● the atmosphere of the meeting on 28 February rendered it unfair;

● the applicant had been diligent in seeking other employment;

● the Tabro decision is very clear as to the appropriate method for the calculation of compensation.

CONCLUSIONS

[98] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. Those matters are:

“(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[99] As will have been apparent from paragraph 1 of this decision the application was made within the period required in subsection 394(2). There is no dispute that the applicant is a person protected from unfair dismissal. Paragraphs (c) and (d) of section 396 have no relevance in the present matter.

[100] Section 385 provides that a person has been unfairly dismissed if FWC is satisfied that:

“(a) the person has been dismissed; and

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

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

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

[101] Paragraph (a) is clearly met in relation to the applicant. Paragraphs (c) and (d) have no relevance. Consequently it is to paragraph (b) that my attention must be directed. In considering whether the dismissal of the applicant was harsh, unjust or unreasonable it is relevant to refer to the comments of McHugh and Gummow JJ in Byrne & Frew v Australian Airlines Pty Ltd (1995) 61 IR 32 @ 72:

“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.”

[102] It is necessary to turn to section 387 which sets out the factors which must be taken into account by FWC in deciding whether a dismissal is harsh, unjust or unreasonable. Those factors are as follows:

“(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 FWC considers relevant.”

[103] The first matter which must be taken into account is whether there was a valid reason for the dismissal. The meaning of valid reason has been the subject of much consideration by the Courts as well as by this Commission and its predecessors. There seems to be general acceptance of the often quoted words of Northrop J in Selvachandran v Peteron Plastics Ltd (1995) 62 IR 371 @373:

“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 s170DE(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, ...”.

[104] The reasons relied on for the termination in this matter relate to the alleged misconduct of the applicant. In this regard I have to determine for myself whether the misconduct, or any part of it that is contested, took place and, if so, whether it amounted to a valid reason for the dismissal: King v Freshmore (Vic) Pty Ltd [Print S4213].

[105] The misconduct which is alleged in this matter is that the applicant dishonestly accepted a benefit, the Spa treatment, without permission or approval and in doing so acted in breach of the Code. It is also alleged that she further breached the Code by failing to report the relevant events to management.

[106] I agree that if the applicant had accepted the treatment knowing that no customers were participating in the event, this would have amounted to misconduct on her part. However, I accept the evidence of the applicant and Ms Nguyen that the applicant did not know about the absence of customers until after her treatment. In these circumstances I am not satisfied that the applicant’s actions amounted to a conflict of interest or misuse of the respondent’s resources.

[107] I am not satisfied that either the applicant or Ms Nguyen made admissions during their respective meetings on 28 February to the effect that the applicant did have prior knowledge of the absence of customers. Ms Nguyen was adamant that she had made no such admission. Perhaps more importantly, the handwritten notes of both Ms McCormack and Mr Neish do not contain any mention of what would have been a relatively crucial point.

[108] The applicant was similarly emphatic that she had explained that, although she knew there were no customers in the reception area of the Spa when she arrived there, she did not know until after her treatment that none were coming at all. The handwritten notes of Ms McCormack are at odds with this as was Ms McCormack’s evidence.

[109] At first glance Mr Neish’s notes appear to support Ms McCormack’s version. However, in my view, proper consideration of the relevant parts of his notes as set out at paragraph 42 above reveals that they are equally consistent with the applicant’s evidence. Mr Neish’s oral evidence confirmed that the applicant had denied any prior knowledge of the absence of customers from the event not just upon arrival at the reception area.

[110] Where there is a conflict in the evidence between the applicant and Ms McCormack on this question I prefer and accept the evidence of the applicant. It should be noted that I am not suggesting that Ms McCormack was other than truthful in her evidence.

[111] It is true that, in hindsight, it would have been prudent for the applicant to have questioned Ms Nguyen about the number and identity of the customers who were attending the event as well as to have made inquiries about their whereabouts upon her arrival at the Spa. It would also have been helpful if she had sought approval for her attendance. However, it needs to be remembered that the applicant was approached by Ms Nguyen approximately 15 minutes before the scheduled time of the treatments. In such circumstances her actions are understandable.

[112] For the reasons set out above, I do not accept that the applicant’s actions on 22 February 2013 amounted to misconduct. There remains the question about her failure to subsequently report the situation to management. Part 3 of the Code provides, among other things, that each employee has an obligation to report breaches of the Code and to ask for guidance if they are not clear on what action to take. There would be some situations where it would be obvious to anyone that there has been a breach of the Code and, in those instances, the breach must be reported. However, in many cases, the issue of whether there has been a breach will not be apparent. Ultimately the question is for the respondent to determine. In my view the events on 22 February fall into this category and the applicant’s failure to report upon them does not amount to a breach of the Code.

[113] However I do consider that the failure to report on what had occurred was an error of judgement on the applicant’s part. At the very least she should have ensured that Ms Nguyen had made her manager aware of the situation. Nevertheless, in my view, this error of judgement does not amount to misconduct.

[114] As a consequence of these conclusions, I am not satisfied that there was a valid reason for the applicant’s dismissal.

[115] I now turn to consider what might be termed the “procedural fairness” factors in section 387, paragraphs (b), (c) and (d). The applicant was informed of the allegations against her and the reasons for her dismissal. I consider that she was also provided with an opportunity to respond. Regardless of any uncertainty on the applicant’s part as to the purpose of the meeting on 28 February the respondent did not unreasonably refuse to allow her to have a support person. I note that the applicant also declined to have a support person with her at the 1 March meeting when she was undoubtedly aware of the nature of the meeting.

[116] Paragraph (e) of section 387 is not relevant as the applicant’s dismissal was not related to her performance. I have had regard to paragraphs (f) and (g). The respondent is a large employer with dedicated human resource management specialists. I am satisfied that these factors were reflected in the procedures which were followed in effecting the dismissal. There are no other matters which I consider are of particular relevance under paragraph (h).

[117] In all of the circumstances of the case and having taken account of each of the factors in section 387 and my findings thereon I have determined that the dismissal of the applicant was harsh, unjust and unreasonable. It follows from this determination and the other matters addressed in paragraphs 100 and 101 above that the dismissal was unfair.

[118] Sections 390, 391 and 392 of the Act deal with remedies for unfair dismissals. I am satisfied that the provisions of section 390(1) and (2) have been met in this case. Subsection (3) provides that an order for compensation must not be made unless FWC is satisfied that reinstatement is inappropriate. The applicant does not seek reinstatement and I am satisfied that in the circumstances of the case reinstatement is inappropriate. However I am satisfied that an order for the payment of compensation in lieu of reinstatement is appropriate.

[119] Section 392(2) requires that, in determining an amount for the purposes of such an order, 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 FWC considers relevant.”

[120] The question of the calculation of compensation has been dealt with in a number of Full Bench decisions such as Tabro and, most recently, Haigh v Bradken Resources Pty Ltd[2014] FWCFB 236 (Haigh). These decisions confirm the approach in Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 which is summarised as:

“1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,

2. Deduct monies earned since termination,

3. Deductions for contingencies,

4. Calculate any impact of taxation,

5. Apply the legislative cap.” (Haigh @ para 10)

[121] There was nothing before me as to the effect of any order for compensation on the viability of the respondent’s business. I am satisfied that the order which I propose to make would not have an adverse effect on such viability and consequently does not militate against an order.

[122] The length of the applicant’s service with the respondent was over 15 years. It is a period which supports the making of an order.

[123] There is always a speculative element involved in assessing the remuneration that a person would have or would have been likely to have received had it not been for their dismissal. I consider that it is reasonable to assume that, but for the dismissal, the applicant would have remained in the employment of the respondent for at least one year. This is based on her length of service, generally good employment record and her evidence that she had intended to remain with the respondent for the rest of her career.

[124] The unchallenged evidence of the applicant as set out in paragraphs 76-78 of Exhibit Applicant 1 is that she received an annual base salary of $78,000 plus bonuses of between $9,000 and $15,000 per year. Her evidence is that the payment of the bonuses was based on her turnover and that, as at the date of her dismissal, she was approximately 15% above her target. This would have entitled her to bonuses at the highest end of the range.

[125] Accordingly I calculate the remuneration that the applicant would have received or would have been likely to have received had she not been dismissed as $93,000 gross.

[126] It is true that the applicant could have applied for more jobs as evidenced by the material in Exhibit Respondent 3. However in the absence of detailed information about the suitability of each of the positions set out therein I consider that the applicant made satisfactory attempts to mitigate her loss by searching for other work. I deal below with the question of her accepting a part-time position and the impact that should have on the amount of compensation.

[127] The material before me indicates that between the date of the applicant’s dismissal, 1 March 2013, and the dates on which she gave her evidence, 14 and 15 October 2013, she had earned $20,587.15 gross by way of remuneration. I assess that between 16 October 2013 and the making of the order for compensation, 19 February 2014, the applicant would have earned a further $18,000.00 gross. The basis for this assessment is 18 weeks at $1000 per week. $1000 is approximately the midpoint between the applicant’s average weekly earnings in her new job, $1,083.53, and those estimated average weekly earnings if her overtime and additional shifts are reduced, $910.32. The total of the amounts under paragraph (e) of section 392(2) is therefore $38,587.15 gross. This should be deducted from the amount of $93,000.00 referred to in paragraph 125. The result is $54,412.85 gross.

[128] The amount of any income reasonably likely to be earned between the date of the order and the actual payment of compensation is $3000.00 gross being $1000 per week for a period of three weeks. It should be noted however that only half of this period of time falls within what I have assessed to be the anticipated period of employment and so only half of the amount, $1,500.00, should be deducted from the figure of $54,412.85 referred to in the previous paragraph. The remaining amount is $52,912.85 gross.

[129] There are three other matters which I consider are relevant under paragraph (g) of section 392 (2). First, the applicant was paid four weeks in lieu of notice. As I understand it, Annexure D to Exhibit Applicant 1 shows that amount to be $5,230.75 gross. The respondent should receive credit for that amount so it will be deducted from $52,912.85. The remaining balance is $47,682.10 gross.

[130] Secondly, there is the question of contingencies. The anticipated period of employment has all but passed and there is nothing before me which persuades me that there is any sound basis for making a deduction for contingencies.

[131] The third matter is the question of the applicant’s acceptance of a part-time position. The evidence is that this was in part due to her lack of success in finding a suitable full-time position and in part due to a deliberate choice to build a new career in a job where she had self respect. I do not consider that the respondent should bear the full cost of the applicant’s choice and apply a 10% deduction on this account, $4,768.21. The remaining amount after this is deducted from $47,682.10 is $42,913.89 gross.

[132] As I have found that the applicant did not engage in misconduct there is no basis for any reduction in the amount of compensation pursuant to section 392(3).

[133] The amount of $42,913.89 gross is less than the compensation cap in section 392(5). I leave the question of taxation to the parties to determine as required by law. An order reflective of this decision is issued today at Print PR547859.

[134] It should be noted that, in deciding this matter, I have given consideration to the need to ensure that a “fair go all round” has been accorded to each of the parties as provided in section 381(2) of the Act.

COMMISSIONER

Appearances:

S.Lynch solicitor for the applicant

M.Seck of Counsel, for the respondent

Hearing details:

2013.
Sydney:

October 14,15,

November 4,

December 18.

Printed by authority of the Commonwealth Government Printer

<Price code G, PR546878>