Anthony William Pomering v Ronpom Pty Ltd T/A Millers Turf Farm

[2017] FWC 1948

[2017] FWC 1948

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Anthony William Pomering
v
Ronpom Pty Ltd T/A Millers Turf Farm
(U2016/11064)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 5 APRIL 2017

Application for an unfair dismissal remedy – dismissal not consistent with Small Business Fair Dismissal Code – no valid reason – no procedural fairness – dismissal was unfair – compensation awarded.

[1] Mr Anthony William Pomering (the applicant) has applied under s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy against his former employer, Ronpom Pty Ltd T/A Millers Turf Farm (the respondent).

[2] The evidence in this matter was heard on 21 February 2017. I then issued directions for the filing of written submissions and held a further brief hearing to address issues raised in those submissions on 27 March 2017. With permission, the applicant was represented by Mr Micali of counsel, instructed by Mr Arcella, solicitor, and the respondent was represented by Mr Jensen, solicitor.

[3] The applicant tendered:

● his own witness statement; 1

● a credit card statement relating to an Amplify Business account with St George bank in his name; 2

● an organisational chart showing the reporting lines of employees of the respondent; 3 and

● a witness statement of Julianne Lee Lewig, the applicant’s mother and also a former employee of the respondent. 4

[4] The respondent tendered a witness statement of Mr William Ronald Pomering (Mr Pomering Sr), 5 its sole director and shareholder, and the applicant’s father, with some redactions.

[5] All witnesses were cross-examined.

Background

[6] On 19 August 2016, the applicant received a letter from his father on behalf of the respondent, terminating his employment for three reasons. The letter relevantly provided:

‘It is with much regret that I, on behalf of Ronpom Pty Limited hereby notify you of the termination of your employment by Ronpom Pty Limited as General Manager of Millers Turf Farm, effective immediately.

The reasons for this action are as follows:

1. Your unauthorised transfer of funds totalling $5,000.00 from the company’s bank account into your Credit Card account on 16^th August 2016, and

2. The unauthorised removal by you of the computer owned by the company and operated by you at Millers Turf Farm.

3. $990 cash was removed from our delivery vehicle without authority.

I require the immediate reimbursement of the above money and return of the computer.’ 6

[7] The applicant’s evidence is that he was not notified of or asked about any of the three alleged actions that led to his termination before receiving the letter. 7

Alleged unauthorised transfer of $5000

[8] The applicant did not deny that he had transferred $5000 from the respondent’s bank account to the Amplify Business credit card account in his name. However, he said that he did not need to seek authorisation to do so. He said the credit card in question was opened with his father’s knowledge, during the same visit to the bank at which the respondent’s bank account was opened, and that it was used almost exclusively to pay for expenses incurred in relation to the respondent’s business. 8

[9] The applicant further testified that he had previously made several transfers from the bank account to the credit card account to keep the latter from reaching its limit, without objection from the respondent. 9 I accept the applicant’s evidence in this regard; indeed, some of these prior transfers were evidenced in the credit card account statement10 he tendered. It may also reasonably be inferred from that same statement that the $5000 transfer related to the payment of an invoice issued to the respondent by a supplier, as the applicant stated.11

[10] Mr Pomering Sr stated at the hearing that he had asked the applicant several times for a copy of the credit card statement that was tendered, 12 but did not tender any written correspondence to support this, though he tendered emails and endeavoured to tender text messages relating to other matters. The only written correspondence tendered that evidenced a request for any statements was an email to the applicant dated 13 August 201613 requesting statements covering the period 17-31 July 2016 for the respondent’s accountant. Mr Pomering Sr eventually conceded during cross-examination that he did not contact the applicant to enquire about the $5000 transfer between becoming aware of it and terminating his employment.14

Removal of computer

[11] The applicant also did not deny that he had removed the computer from the respondent’s premises on 17 August 2016, but explained that he had taken it home to enable a friend who had IT expertise to securely delete his personal files from the computer’s hard drive. 15 The applicant conceded that he had not mentioned the removal of the computer from the respondent’s premises to his father or sought permission, but stated that he did not think he needed to do so, since he was the one responsible for the day-to-day operations of the business.16

[12] While Mr Pomering Sr maintained that he sent the applicant several text messages requesting the return of the computer, 17 he conceded that he neither expressed his concern that the applicant had taken the computer, nor asked him to return it, before effecting the dismissal.18

[13] The computer was returned to the respondent some months after it was removed. The applicant explained that it was returned as soon as the files had been deleted, but that this did not occur immediately after he took the computer. This was partly because he had had other priorities at the time and did not consider the file deletion a matter of urgency, and partly because his friend had been travelling overseas. 19 While the applicant might have done better to communicate his intentions to the respondent before or at the time he removed the computer, I accept that he never intended permanently to take possession of it.

Alleged removal of $990 cash

[14] In his written statement filed on 17 February 2017, Mr Pomering Sr indicated that he no longer pressed the allegation that the applicant had effectively stolen $990 in cash from one of the respondent’s delivery vehicles. 20 This was the result of a conversation he had had (after the applicant was dismissed) with the employee who allegedly initially informed him that the applicant had stolen the money.21 Mr Pomering Sr described himself as having been ‘set up’22 to rely on this false allegation, presumably by the applicant.

[15] The applicant acknowledged having a conversation with the relevant employee to the effect that cash payments for goods delivered by the respondent should not be given directly to Mr Pomering Sr, 23 but denied taking the money for himself.24 As the respondent ultimately did not rely on this as being a valid reason for dismissal, it is not necessary for me to make a finding about this.

Consideration

[16] It is not in dispute that the applicant is a person protected from unfair dismissal. 25 I am satisfied that he is so protected.

[17] Section 385 of the Act provides:

‘385 What is an unfair dismissal

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

(a) the person has been dismissed; and

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

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

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

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

[18] The respondent submitted that as at 17 August 2016, the applicant had made the decision to abandon his employment with the respondent. This was based on a response the applicant gave during cross-examination as to why he had removed the computer from the respondent’s premises, rather than have his IT consultant friend go to the respondent’s premises to delete his personal files. He responded:

‘Because after my father removed me as a director, I had no intention of going back into the office. I was going to maintain my employment on the farm. Therefore, I wouldn’t ask the IT guy to come to an office which I had no control over or nor did I know what was happening to the computer at the time.’ 26

[19] The respondent submitted that, given his position as General Manager, the applicant’s proposal not to return to the respondent’s office meant he could not continue his employment with the respondent beyond the date of termination of his employment.

[20] While the applicant’s response does raise doubts about whether the applicant wished, as at 17 August 2016, to remain in his role as General Manager, I am not satisfied that he did in fact abandon his employment. There is no evidence that he took any action to cease working in his role as General Manager or more generally for the respondent prior to receiving his letter of dismissal on 19 August 2016.

[21] Sections 385(a) and 385(d) of the Act are satisfied. The respondent dismissed the applicant on 19 August 2016, with immediate effect. 27 Neither party contended that the applicant was made redundant.

Whether dismissal consistent with the Small Business Fair Dismissal Code: s.385(c)

[22] The respondent submitted that the applicant’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code).

[23] The Code was declared by the Minister for Employment and Workplace Relations on 24 June 2009. It relevantly provides:

‘Summary Dismissal

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

[24] In John Pinawin T/A RoseVi.Hair.Face.Body v Domingo, 28 the Full Bench set out a two-step test to determine if an employer had complied with the summary dismissal aspect of the Code:

‘[29]... There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.’ 29

[25] Mr Pomering Sr did not make any attempt to contact the applicant in the two days between becoming aware of his alleged misconduct and deciding to terminate his employment. It follows that none of the three instances of alleged misconduct were put to the applicant prior to dismissal. Mr Pomering Sr conceded that he may have been ‘remiss’ 30 in not contacting the applicant to request that the computer be returned prior to the dismissal. He also conceded that the applicant had not stolen $990 as originally alleged in the letter of termination after having ‘[gotten] to the bottom of it’31 via a further conversation with the employee who he says initially informed him that the applicant had stolen the money. He further stated that he was still investigating the alleged misconduct at the time of the dismissal.32

[26] I consider that many of the things the respondent did after the applicant’s dismissal should actually have been done before deciding to dismiss him. In particular, had Mr Pomering Sr spoken to the other employee involved in the $990 incident in more depth in the first place, it seems he would not even have relied upon that ground in dismissing the applicant. Similarly, it is arguable that the applicant would have returned the computer had the respondent requested it.

[27] I cannot find that the respondent carried out a reasonable investigation into the applicant’s alleged misconduct before terminating his employment. It would be a very rare case in which the Commission might find that a reasonable investigation had been conducted notwithstanding that the employee in question had not been asked or told about the alleged misconduct prior to dismissal. This is not one of those.

[28] The actions of the respondent (or lack thereof) prior to dismissing the applicant were an inadequate basis on which to found a belief based on reasonable grounds that he had engaged in conduct sufficiently serious to justify immediate dismissal. This means the dismissal was not consistent with the Code. It is therefore not necessary for me to express a view on the subjective element of the Pinawin test (that is, whether the respondent genuinely believed that the alleged misconduct was sufficiently serious).

[29] The criterion in s.385(c) of the Act is satisfied. I turn to consider whether the dismissal was harsh, unjust or unreasonable.

Whether dismissal was harsh, unjust or unreasonable: s.385(b)

[30] Section 387 of the Act sets out the factors I must take into account when deciding whether the applicant’s dismissal was harsh, unjust or unreasonable:

‘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.’

Valid reason: s.387(a)

[31] None of the three instances of alleged misconduct set out in the letter of termination given to the applicant constituted a valid reason for his dismissal.

[32] On the evidence, I find that the $5000 transfer was made within the applicant’s ostensible authority as General Manager of the respondent. He had previously made several similar transfers without objection from Mr Pomering Sr and there was no basis on which he should reasonably have known that this one would be problematic.

[33] As I have stated above, I accept the applicant’s evidence that he never intended permanently to deprive the respondent of the computer. The respondent neither put the applicant on notice that it objected to his removing the computer nor gave him an opportunity to return it prior to dismissing him. It relied on nothing more than an untested assumption that the applicant had intended to steal it, which is not a valid reason.

[34] Finally, the removal of the $990 in cash was not ultimately relied upon as a reason for dismissal.

Notification of that reason and opportunity to respond: ss.387(b) and (c)

[35] The respondent conceded that the applicant was not notified of the reason for his dismissal until it took effect. The issue of having an opportunity to respond therefore does not arise.

Unreasonable refusal of support person: s.387(d)

[36] This factor is not applicable to the applicant’s situation. His employment was terminated with immediate effect and so there were no discussions relating to dismissal which he might have requested a support person to attend.

Warnings about unsatisfactory performance: s.387(e)

[37] This factor is not applicable to the applicant’s situation as he was not dismissed because of unsatisfactory performance, but rather for alleged misconduct.

Size of employer’s enterprise and absence of human resource management expertise: ss.387(f) and (g)

[38] The respondent is a small business, the operations of which were at least primarily the applicant’s responsibility until his dismissal. The organisational chart in evidence 33 suggested it did not have dedicated human resource management specialists or expertise.

Other relevant matters: s.387(h)

[39] I do not consider that there are any other relevant matters which I need to take into account.

[40] Having regard to all of the above, I consider that the applicant’s dismissal was harsh, unjust and unreasonable. Not only was there no valid reason given for the termination of his employment, but he was also not afforded procedural fairness in relation to the alleged misconduct that precipitated it. A lack of human resource management expertise cannot excuse the respondent’s total lack of communication with the applicant between becoming aware of the alleged misconduct and terminating his employment.

[41] The applicant’s dismissal was therefore unfair. I turn to consider remedy.

Remedy

[42] Section 390 of the Act states:

‘390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.’

[43] Mr Pomering did not seek reinstatement as a remedy. In any case, I am satisfied that reinstatement would be inappropriate in these circumstances. It would be an understatement to say that the relationship between the applicant and his father has broken down. I consider it appropriate that I order the respondent to pay the applicant compensation instead.

[44] Section 392 of the Act provides:

‘392 Remedy—compensation

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.’

[45] In determining the amount of compensation I will apply the Sprigg formula, as refined in Ellawalla v Australian Postal Corporation. 34

[46] The first step is to estimate the remuneration that the employee would have received if they had not been dismissed. 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.

[47] It is quite clear that the relationship between father and son had become poisonous. The applicant indicated during cross-examination that he no longer wished to work in the office, something that I am satisfied was a necessary corollary of performing his role as General Manager. It seems unlikely that the respondent would have been willing to allow the applicant to continue his employment ‘on the farm’. On balance, I am satisfied that the anticipated period of employment would be four weeks.

[48] No remuneration was earned by the applicant in the first four weeks after he was dismissed. It would not be appropriate to deduct an amount for contingencies, given the extremely short anticipated period of employment. The applicant earned $2,096.15 per week.

[49] I am satisfied that payment in the order of four weeks’ pay would not affect the viability of the respondent. I regard the applicant’s length of service as a neutral factor. I am satisfied that no deduction should be made for any misconduct by the applicant or for any failure to mitigate his loss (especially given the short period of anticipated period of employment).

[50] Accordingly, I consider that an order of compensation equivalent to $8,384.60, less applicable taxation, is appropriate.

Conclusion

[51] The applicant was unfairly dismissed. Reinstatement would be inappropriate. I consider that compensation of $8,384.60, less applicable taxation, is an appropriate remedy.

[52] An order to this effect will issue concurrently with this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

C Micali of counsel with D Arcella, solicitor, for Anthony William Pomering.

G Jensen, solicitor, for Ronpom Pty Ltd T/A Millers Turf Farm.

Hearing details:

Sydney.

2017.

February 21.

March 27.

 1   Exhibit 1.

 2   Exhibit 2.

 3   Exhibit 3.

 4   Exhibit 4.

 5   Exhibit 5.

 6   Exhibit 1 attachment AP-01.

 7   PN196-PN206.

 8   PN106-PN120, PN146-PN152.

 9   Exhibit 1 [11]-[15]; PN106-PN113.

 10   Exhibit 2.

 11   PN144-PN145, PN157-PN162, PN985-PN1001.

 12   PN1011, PN1030.

 13   Exhibit 5 annexure RP-04; PN1012-PN1056.

 14   PN1010, PN1056.

 15   PN178-PN182.

 16   PN328-PN333.

 17   PN855-PN858.

 18   PN865-PN869.

 19   PN183-PN186.

 20 Exhibit 5 [16].

 21   PN1066-PN1067. That employee was not made available for cross-examination and so his statement was not received into evidence.

 22   PN1066.

 23   PN352-PN362.

 24   Exhibit 1 [19]-[20].

 25   Fair Work Act 2009 (Cth) s.382.

 26   PN327.

 27   PN1054.

 28   [2012] FWAFB 1359.

 29 Ibid [29].

 30   PN893; see more generally PN880-PN900.

 31   PN1067.

 32   PN1068.

 33   Exhibit 3.

 34 Print S5109 [31].

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