Brian Willis v Inproof Transport Emergency Services
[2018] FWC 3188
•14 JUNE 2018
| [2018] FWC 3188 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Brian Willis
v
Inproof Transport Emergency Services
(U2018/1251)
| Deputy President Masson | MELBOURNE, 14 JUNE 2018 |
Application for an unfair dismissal remedy - small business employer – compliance with Small Business Fair Dismissal Code.
Introduction
On 9 February 2018, Mr Brian Willis (the Applicant) made an application pursuant to s 394 of the Fair Work Act 2009 (the Act) for a remedy in respect of his dismissal by Inproof Towing, Transport and Emergency Services Pty Ltd (the Respondent).
The application indicated that the date that the Applicant’s dismissal took effect was 31 January 2018.
On 15 February 2018, the Respondent filed a response to the unfair dismissal application. In its response, the Respondent raised a jurisdictional objection to the application, that being the Respondent was a small business and that the dismissal was consistent with the Small Business Fair Dismissal Code (the Code).
The matter was listed for conciliation before a Fair Work Commission Conciliator on 5 March 2018 and a further member assisted conciliation was conducted on 7 May 2018 but remained unresolved at the end of the conciliation. Consequently the matter was listed for hearing before me on 28 May 2018.
The Hearing
At the Hearing, the Commission sought submissions from the parties as to whether the Commission should conduct either a conference (s 398) or a hearing (s 399) in relation to the matter. Taking into account the number of witnesses and the parties wishes, it was decided that a conference would be the most effective and efficient way to conduct the matter.
At the conference, the Applicant was self-represented and gave evidence on his own behalf. Ms Maureen Dare appeared for and gave evidence on behalf of the Respondent.
Initial matters to be considered
I am required by s 396 of the Act to decide four matters before I consider the merits of the application. There is no dispute between the parties and I am satisfied on the evidence that:
(a)The application was made within the period required by s 394(2) of the Act;
(b)The Applicant was a person protected from unfair dismissal; and
(c)The Applicant’s dismissal was not a case of genuine redundancy.
I will now turn to consider whether the Respondent was a “small business employer” as defined in s 23 of the Act and, if so, whether the Applicant’s dismissal was consistent with the Code.
Small Business Fair Dismissal Code
Section 388 of the Act provides:
“388 The Small Business Fair Dismissal Code
(1)The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”
Section 23 of the Act provides a definition of a “small business employer” for the purpose of the Act. Relevantly, s 23(1) of the Act provides that a “national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time”.
For the purpose of calculating the number of employees employed by the employer at a particular time:
(a)all employees employed by the employer at the time (including the dismissed employee who has made the unfair dismissal application) are to be counted subject to the caveat that a casual employee is not to be counted unless, at the time, he or she has been employed by the employer on a regular and systematic basis (ss 23(2) & (4) of the Act); and
(b)associated entities are taken to be one entity (s 23(2) of the Act). The expression associated entity has the meaning given by section 50AAA of the Corporations Act 2001 (Cth) (Corporations Act).
Were there any associated entities?
The Respondent gave evidence that the sole director and shareholder of the Respondent was Mr Michael Davidson. Mr Davidson was also the sole director and shareholder of GTT Towing, Transport and Emergency Services Pty Ltd (GTT).[1] Another Company called Adams Towing was, according to the Respondent, held as a trading name only, the evidence on which I accept.
Whether the Respondent and GTT are associated entities is a relevant consideration in this matter. The expression “associated entity” is defined in s 12 of the Act to bear the same meaning as in s 50AAA of The Corporations Act 2001 (Cth) (the Corporations Act) which provides the following regarding associated entities:
“50AAA Associated Entities
(1)One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
(2)This subsection is satisfied if the associate and the principal are related bodies corporate.
(3)This subsection is satisfied if the principal controls the associate.
(4)This subsection is satisfied if:
(a) the associate controls the principal; and
(b) the operations, resources or affairs of the principal are material to the associate.
(5)This subsection is satisfied if:
(a) the associate has a qualifying investment (see subsection (8)) in the principal; and
(b) the associate has significant influence over the principal; and
(c) the interest is material to the associate.
(6)This subsection is satisfied if:
(a) the principal has a qualifying investment (see subsection (8)) in the associate; and
(b) the principal has significant influence over the associate; and
(c) the interest is material to the principal.
(7)This subsection is satisfied if:
(a) an entity (the third entity) controls both the principal and the associate; and
(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.
(8)For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:
(a) has an asset that is an investment in the second entity; or
(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.
The meaning of associated entities is taken from s 50AAA of the Corporations Act which provides that one entity (the associate) will be an associated entity of another entity (the principal) if any of ss 50AAA (2) through to (7) apply. Of particular relevance in this matter is s 50AAA(7).
Entity is defined in s 64A of the Corporations Act to include not only other companies but also inter alia individuals. A relevant consideration in this matter is s 50AA which defines “control” to mean having the ‘capacity to determine the outcome of decisions about financial and operating policies’.
Section 50 AA provides as follows:
“50AA Control
(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.
(2) In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.
(4) If the first entity:
(a) has the capacity to influence decisions about the second entity’s financial and operating policies; and
(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;
the first entity is taken not to control the second entity.”
It is clear that Mr Davies is the sole owner and director of both the Respondent and GTT. As such I am satisfied that the Respondent and GTT are associated entities pursuant to s 50AAA of the Corporations Act.
It follows from my finding on the associated entities that the number of employees of both the Respondent and GTT must be included for the purpose of determining whether the Respondent is “small business employer” for the purposes of s 23(1) of the Act.
How many employees were employed by the Respondent and the associated entities?
The Respondent gave evidence that as at 31 January 2018 there were ten employees of the Respondent. The list of names which was provided in a payroll activity statement[2] identified eleven names. The Respondent gave evidence that one of those named employees, Mr Yaman, had been terminated on 10 June 2016 due to his medical condition but continued to receive workers compensation payments from the company as at 31 January 2018, which was reflected in the 31 January 2018 payroll statement.
At the request of the Commission, the Respondent subsequently filed evidence of the termination of Mr Yaman[3] which was received following the hearing. The Applicant did not contest that Mr Yaman had been dismissed as submitted by the Respondent.
The Applicant identified three further persons that he believed were casual employees of the Respondent that should be included for the purpose of calculating the number of employees. They were:
· Mr Grant Hodgson
· Mr Tim Tyler
· Mr John King
Ms Dare gave evidence that Mr Hodgson was engaged on an ad-hoc basis and last worked for the Respondent approximately 3-4 months previously; Mr Tyler last worked for the Respondent in September 2017 following which he had undergone heart surgery and it was unclear whether he would undertake any further casual work for the Respondent; and Mr King had not worked for the Respondent for at least 18 months.
In order to verify the incidence and pattern of any casual employment Ms Dare, at the request of the Commission, furnished evidence of employees engaged over a three month period by way of a further payroll summary statement for the period from 1 December 2017 to 28 February 2018.[4] The summary revealed that for the relevant three month period, there were eleven employees variously engaged by the Respondent. The difference between that number of eleven employees and the ten employees engaged at the time of the Applicant’s dismissal was explained by the resignation of Mr Zjandu in December 2017.
On the basis of the evidence furnished by the Respondent, I am satisfied that Messrs Hodgson, Tyler and King were not casual employees regularly and systematically engaged as at 31 January 2018 and as such are not to be included in Respondent employee numbers. I am consequently satisfied that at the time of the Applicant’s dismissal there were ten employees engaged by the Respondent.
I now turn to consider the number of employees engaged by the associated entity GTT.
Ms Dare gave evidence that GTT employed 4 employees as at 31 January 2018 and in support of that provided a payroll summary statement as at the date.[5] The statement revealed that there were five persons that received payment in that pay period, one of whom was Mr Davidson, the sole owner and director of both the Respondent and GTT. Ms Dare gave evidence that Mr Davidson was not an employee of the business and received a regular owner/director fee which the payment reflected.
I am satisfied that Mr Davidson is not an employee of the Respondent or GTT. This finding is based on the evidence of Ms Dare and the evidence of the two entities’ ownership structure.[6] I am consequently satisfied that at the date of the Applicant’s dismissal there were four employees of GTT that must be included for the purpose of calculating employee numbers of the Respondent.
I am satisfied on the evidence that the Respondent and its associated entities employed 14 employees as at 31 January 2018. Accordingly, I am satisfied on the evidence that, immediately before the time of the Applicant’s dismissal, the Respondent was a small business employer within the meaning of the Act.
Having determined that the Respondent and its associated entities employed fewer than 15 employees at 31 January 2018, it is necessary for me to now consider and determine whether the Applicant’s dismissal was consistent with the Code.
Background
The Applicant commenced employment with the Respondent as a driver on 2 June 2014. He was dismissed by the Respondent on 31 January 2018 due to misconduct. At the time of his dismissal the Applicant’s weekly gross wages were $874.00.
The cited reason for the dismissal was that the Applicant when towing a customer’s vehicle on 24 January 2018 (Supergas Incident) caused damage to it and then failed to report the damage. The Supergas Incident occurred following a series of other alleged incidents that the Applicant had been involved in including:
(1) An incident on 16 March 2017 in which, while lifting a container at a customer’s site, a lifting chain broke which the Applicant failed to report (Chain Incident);
(2) An incident on 6 October 2017 in which, when dropping a customer vehicle off for repairs, damage was sustained to the Mercedes vehicle which the Applicant failed to report (Mercedes Incident); and
(3) An incident on 22 December 2017 in which damage was sustained to a customer container while being transported from Melbourne to Mildura which the Applicant failed to report (Container Incident).
Applicant Case
The Applicant gave the following evidence in relation to the various incidents leading up to and including the Supergas Incident on 24 January 2018.
Chain Incident
The Applicant stated that on the day of the Chain Incident on 16 March 2017, he was required to drive a different truck to that he normally drove. He was required to lift a container at the customer’s site and acknowledged that due to the weight of the container it was a “bit of a struggle.”[7]
The Applicant stated that he completed the job, left the site and was unaware of any chain having broken during the lifting process despite the subsequent report by the customer to the Respondent. He further stated that no broken chain was located. The Applicant stated during his evidence that:
“ ……..I know for a fact when I finished what I did and brought the truck back, there was no broken chains on the truck at all and I wasn’t even aware of any incident ever happened.”[8]
When pressed during his witness evidence as to the motivation of the customer to have reported a broken chain when there was no broken chain as claimed by the Applicant, the following exchange took place:
“THE DEPUTY PRESIDENT: The company's evidence is they received reports from a major client that there was a chain breakage.
MR WILLIS: Yes.
THE DEPUTY PRESIDENT: It is frankly very difficult for me to reconcile two very different versions of events. I mean, why would a client report a chain breakage incident if there was none?
MR WILLIS: Fair enough.
THE DEPUTY PRESIDENT: No, no, I'm inviting you to provide some explanation as to why a major client would have fabricated a story about a chain breakage which you say didn't occur. Is there any explanation as to what their motivation would have been to report it if it didn't occur?
MR WILLIS: Not really.”[9]
Mercedes Incident
The Applicant stated that on the day of the Mercedes Incident on 6 October 2017, he was delivering a customer’s vehicle for repairs to Mercedes for the Respondent’s customer, the Wyndam Accident Repair Shop. During the process of lowering the vehicle down off the tray of the tow truck on delivery of the vehicle, the securing strap unhooked itself and the car rolled down off the tray. In doing so it sustained damage[10] to the front of the vehicle when it hit the ground and the back of the tray[11].
The Applicant stated that as soon as he finished the job he went to the reception of the Mercedes workshop, advised them of the incident and the damage sustained to the Mercedes and then contacted Ms Dare by telephone to report the incident.[12]
The Applicant conceded during his evidence that when he was subsequently spoken to by Ms Dare regarding the Mercedes Incident, she had made clear that a failure to immediately report incidents could result in the termination of his employment, as the following exchange highlights:
“THE DEPUTY PRESIDENT: All right, so there was the first incident which involved the breaking of the chain. The second incident was the one involving the Mercedes where there was damage to the front of the Mercedes, which we had the evidence earlier about who called who, but, in any case, when you met with Mr Willis in relation to that incident, what was said to him?
MS DARE: He didn't deny the damage to the Mercedes, but he's now denying - he didn't deny at the time - about failure to report, and I've put here, in my comments on page 3 of that incident, "Brian has been reminded of the accident reporting procedure."
THE DEPUTY PRESIDENT: That doesn't sound like a warning.
MS DARE: I just write - that's what I say to them, I say the same thing over and over, I've been saying it for years, that it may result in their dismissal.
THE DEPUTY PRESIDENT: Right. Mr Willis, do you have a recollection of being spoken to about that incident?
MR WILLIS: In a fashion, yes.
THE DEPUTY PRESIDENT: When you say "in a fashion", what's your recollection?
MR WILLIS: When we, you know, went in to write the report, what had happened, that's what come out, that's what Maureen told me then.
THE DEPUTY PRESIDENT: Were you warned or what?
MR WILLIS: Basically what she's just said to you.”
Container Incident
The Applicant stated in his evidence that on the day of the Container Incident on 22 December 2017, he was required to deliver a container from Melbourne to Mildura. He further stated that as a consequence of windy weather on that day there were fallen branches and other tree debris on the stretch of the Calder Highway before Bendigo. He stated that debris was falling and at one point he heard a loud thump following which he looked in his mirrors and saw branches and leaves hanging off the side of the truck. He subsequently pulled off the road and noticed that damage to the top of the container had been sustained.[13]
On delivery of the Container in Mildura, the Applicant stated that he reported the damage to the customer but did not report it to the Respondent despite being aware that the immediate reporting of damage to customer property was required under relevant policies of the Respondent and as per his signed position description.[14]
While stating that he was shaken up the incident, the Applicant was unable to explain why he had failed to report the incident to the Respondent despite his acknowledged understanding of his obligation to do so. The following exchange during the Applicant’s giving of evidence is relevant:
“THE DEPUTY PRESIDENT: So you delivered the container.
MR WILLIS: Yes.
THE DEPUTY PRESIDENT: Damaged as it was?
MR WILLIS: Yes, yes.
THE DEPUTY PRESIDENT: Did you report that to Inproof?
MR WILLIS: No, no.
THE DEPUTY PRESIDENT: Is there a particular reason why you didn't?
MR WILLIS: Just the way I was at the time, very - sort of had the fright of my life with what had happened because probably a minute or two minutes prior, that could have come through the windscreen and I really honestly don't know.
THE DEPUTY PRESIDENT: Ordinarily, would it be a requirement consistent with the company policies that any damage to material or equipment be reported?
MR WILLIS: That's correct, yes.
THE DEPUTY PRESIDENT: You say that you were upset or agitated by it and you didn't report it?
MR WILLIS: Yes, yes.
THE DEPUTY PRESIDENT: Is there any reason why you didn't report it when you got back to Melbourne?
MR WILLIS: No. When I got to the other end and I spoke to - I can't remember who it was - I mentioned to them I hadn't notified work and what they could see was, "Don't worry about it, we'll fix it."
THE DEPUTY PRESIDENT: Did they subsequently notify your work?
MR WILLIS: Apparently, yes.”[15]
The Applicant acknowledged that he was interviewed by Ms Dare regarding the incident on his return from annual leave and received a verbal warning for his failure to report the incident.[16]
Supergas Incident
The Applicant stated in his evidence that on the day of the Supergas incident on 24 January 2018, he was required to pick up a hearse which had broken down and deliver it to the Supergas vehicle repair shop. He gave further evidence that because of the length and low ride of the hearse he was required to use a “soft strap” to winch the vehicle onto and off the tow truck trailer.[17]
The Applicant gave evidence that on picking up the vehicle, the only issue was that its engine wasn’t working and that the front wheels were both parallel and facing forward. Despite the damage to the steering arms of the hearse that was alleged to have occurred during the pick-up and delivery of the vehicle, the Applicant claimed the wheels were “dead straight” when he picked up and dropped off the vehicle. The Applicant acknowledged that a report was subsequently made by Supergas to the Respondent regarding damage sustained to the vehicle but denied he had been responsible for it. The Applicant’s denial of responsibility is made clear in the following exchange:
“THE DEPUTY PRESIDENT: Is your evidence that when you delivered the vehicle to the repair shop, that the wheels were straight?
MR WILLIS: Dead straight. That's like personally me facing you.
THE DEPUTY PRESIDENT: I'll get evidence from the company in due course, but I understand it was contended by the company that the wheels were - - -
MR WILLIS: Well, in the words, that's what was told to me. The wheels were facing each other. Also, when the vehicle was coming off the truck at Supergas, made a hell of a screeching noise and as I sort of said in my statement, I can only tell you what I saw, what I heard and that's entirely what happened on that day.”[18]
The Applicant stated that as he was not responsible for the damage to the vehicle, he had not reported the damage to the Respondent. When shown photos of the damage to the vehicle by Ms Dare[19], the Applicant did not accept nor could he understand how the “soft straps” could have caused the damage. In a subsequent exchange the Applicant questioned the legitimacy of the alleged damage report:
“THE DEPUTY PRESIDENT: Do you reject the evidence that there was damage done?
MR WILLIS: Yes. I personally - I don't think I did anything.
THE DEPUTY PRESIDENT: No, no, I'm not asking whether you did anything.
MR WILLIS: Yes.
THE DEPUTY PRESIDENT: I am just asking do you accept that at some point in the handling of the vehicle, whether it was by you or by somebody else, there was damage done to it?
MR WILLIS: No, not accepted.
THE DEPUTY PRESIDENT: So you think it's a fabrication?
MR WILLIS: I really don't have an answer.
THE DEPUTY PRESIDENT: Well, I've got to come up with an answer.
MR WILLIS: No, I understand that, yes, I understand that.
THE DEPUTY PRESIDENT: I have got to try and wade through the competing versions of events.
MR WILLIS: Yes.
THE DEPUTY PRESIDENT: And reach a conclusion, one, whether damage occurred and, secondly, how is it likely that damage would have occurred?
MR WILLIS: No, I understand that. Me, personally, I honestly don't think I did anything.
THE DEPUTY PRESIDENT: I am not asking you that, I am asking you whether, having seen the photos, do you doubt that they are photos of the vehicle or do you accept that damage has occurred to this vehicle as a result of somebody's actions?
MR WILLIS: Yes, I - - -
THE DEPUTY PRESIDENT: You don't know?
MR WILLIS: I don't know for the simple reason that photo, I don't even know what car it's off. There's shiny pieces on that vehicle. Has that been replaced? Because it'd be only natural a new part - - --
THE DEPUTY PRESIDENT: I am just trying to understand, based on that, what possible motivation there could be for somebody to fabricate evidence in relation to damage done to the hearse.
MR WILLIS: I don't really have an answer.”[20]
The Applicant stated that following the Supergas Incident on 24 January 2018 he was spoken to informally by Ms Dare in the yard on two separate occasions during which she encouraged him to admit that he had been responsible for the damage to the hearse. He continued to deny responsibility in those informal discussions. He was then interviewed on 31 January 2018 following Ms Dare’s completion of an investigation of the incident.[21]
The Applicant gave evidence that during the meeting with Ms Dare on 31 January 2018, he continued to deny having been responsible for the damage sustained to the steering arms of the hearse and was not convinced that the damage shown to him in the photos could have been caused by the soft strap that he had used.[22] He agreed that he had been given an opportunity to put his side of the story in the meeting following which Ms Dare contacted the owner of the Respondent business, Mr Davidson. Following that call, Ms Dare confirmed that he was to be dismissed “on the spot”.[23]
The Applicant understood the reason for his dismissal was due to the Respondent’s conclusion that he was responsible for the damage done to the hearse rather than his failure to report the damage.[24]
The Applicant acknowledged that he had been spoken to by Ms Dare regarding the required incident reporting procedures following each of the three incidents prior to the Supergas Incident. He agreed that he had been reminded of the risk of dismissal for failing to report damage to customer property following the Mercedes Inicident[25] and that he had also received a verbal warning for failing to report customer property damage in the wake of the Container Incident.[26]
Respondent Case
Evidence was given by Ms Dare on behalf of the Respondent in relation to each of the incidents that preceded the Applicant’s dismissal and the process leading to the Applicant’s dismissal.
Chain Incident
Ms Dare gave evidence that she was contacted by officers of the Department of Environment, Land Water and Planning (DELWP), who she described as a “huge customer” of the Respondent, regarding their investigation of the Chain Incident. She was requested to complete an incident report by the DELWP which then required a series of meetings with DELWP to investigate and then address actions flowing from the incident.[27]
Ms Dare gave evidence that the investigation of the incident was triggered by the witnessing of the chain breakage by a specific DELWP officer on 16 March 2017.[28] She also stated that the broken chain was not located when the truck came back to the yard and that while a check of the truck equipment checklist revealed that two chains were missing, it was not possible to say with certainty when the chains had gone missing due to the absence of regular equipment checklist reviews. The Respondent relied on the DELWP witnesses to the incident to conclude that the Applicant had failed to report the Chain Incident.[29]
Ms Dare stated that when she interviewed the Applicant, she asked him why he hadn’t reported the incident and that such a failure made the Respondent look foolish to the customer. She stated that during the discussion, she warned the Applicant regarding the reporting procedures, however, he continued to deny the incident occurred.[30]
Mercedes Incident
Ms Dare gave evidence that on 6 October, 2017, the day of the incident, she was contacted by the Mercedes workshop manager regarding the damage suffered to the vehicle that was being delivered by the Applicant. Ms Dare further stated that she then immediately called the Applicant to find out what had happened. Ms Dare directly contradicted the Applicant’s evidence as to who initiated the phone call. [31]
Ms Dare subsequently completed an investigation of the incident on 10 October 2017 which resulted in the Applicant being reminded of the incident reporting procedure.[32]
Container Incident
Ms Dare gave evidence that the container was towed and delivered to Mildura by the Applicant on 22 December 2017. A phone call was received by the Respondent’s base operator on 24 December 2017 regarding the damage to the container. The customer was requested to put the details in an email which was received on 3 January 2018, following which there was an exchange between the Respondent and the customer.[33]
Ms Dare stated that due to the Christmas period and the Applicant’s annual leave, she was unable to interview him until 19 January 2018. She stated that when asked why he had failed to report the incident the Applicant “just shrugged his shoulders”.[34] The Applicant did not contest that the container had been damaged or that he had failed to report it.
On completion of her investigation, Ms Dare issued the Applicant with a warning regarding his failure to follow the incident reporting procedure.[35] She also stated that as a consequence of the incident and the incident reporting failures, the Respondent had now lost that particular customer.[36]
Supergas Incident
Ms Dare gave evidence that in picking up and delivering the vehicle to Supergas on 24 January 2018, it was evident to the Respondent that the Applicant had incorrectly hooked the “luxury straps” to the steering arms of the vehicle. She referred to reports from the Supergas mechanic that, on delivery of the vehicle when it was being lowered from the tray of the tow truck, the mechanic initially heard a screeching noise from where he was working and then observed that the wheels were not parallel but pointing at each other due to bent steering arms.[37]
She further described that the winch used to place and then lower a vehicle off the trailer of the tow truck exerted up to 10,000 pounds of force and that incorrect placement of a strap or chain was likely to cause damage to the vehicle. Ms Dare went on to state that the issue was not that the damage had occurred, as such incidents (incorrect strapping) were not uncommon in her experience, but rather that the Applicant was unwilling to admit the damage was caused by his actions and that he had again failed to report the incident.[38]
Ms Dare gave evidence that the Respondent actually became aware of the incident when Mr Davidson was contacted by the owner of the Supergas workshop on 24 January 2018 to advise him, following which Mr Davidson was sent photos of the damaged steering arms. Ms Dare was then contacted by Mr Davidson who requested that she speak with the Applicant regarding the incident.
Ms Dare gave evidence that she undertook an investigation of the incident between 24 and 31 January 2018[39] and during that period had sought to encourage the Applicant to accept responsibility for the incident but he was unwilling to do so.
The Applicant was formally interviewed by Ms Dare on 31 January 2018 at the conclusion of the incident investigation. She stated that faced with the refusal of the Applicant to accept responsibility and confronted with what the Respondent regarded as an inescapable conclusion as to the cause of the damage to the vehicle, the Respondent dismissed the Applicant on 31 January 2018.[40]
Ms Dare gave evidence that in dismissing the Applicant, the Respondent took into account the four incidents and the Applicant’s continued disregard for the procedures.[41] When pressed during her evidence as to the reasons for the Applicant’s dismissal, Ms Dare stated as follows:
“THE DEPUTY PRESIDENT: Right, okay. Then the final incident involving the hearse was the incident that led to the termination of Mr Willis's employment?
MS DARE: Yes, and I clearly said to Brian on three different occasions, twice out in the factory where I was trying to coax him into - because he is an experienced driver and we put a lot of time into them, as you can see by the paperwork, and I tried to coax him into "Just admit you've done it" because in my 30-odd years, there's no other way that that steering arm could have been bent, that's how it happened, so twice I said to him, "You know what's going to happen if this keeps going" and he still denied it, so I brought him in and did the report and said that:
Due to the continuing failure to notify incidents to management and to follow procedures, Brian will be dismissed. This is the fourth occasion.
THE DEPUTY PRESIDENT: Does the company believe that that incident in itself justified dismissal or on top of the previous incidents?
MS DARE: On top of previous incidents.”[42]
Ms Dare also gave evidence that on each occasion that she had interviewed the Applicant in relation to the incidents prior to his dismissal, she had reminded the Applicant of the need to immediately report any damage to customer equipment/property and that failure to do so could result in dismissal.[43] Ms Dare also referred to the the incident reporting procedure[44] and drew specific attention to an extract from the Applicant’s position description which made clear the reporting obligation and stated as follows:
“Immediately notify the base room of any incident or damage to Inproof or customers' goods, equipment or facilities. Non-reporting of such incidents may bring about instant dismissal. At the incident scene, never admit liability to damage or injury.”[45]
Ms Dare gave evidence that the Respondent was concerned at the impact of the Applicant’s conduct on the reputation of the Respondent and that it had caused a loss of business for the Respondent totalling up to $3,500.00 per month. Ms Dare referred to the loss of three customers including Supergas and that, as a small business, they were particularly vulnerable because of the competition and alternatives available to their customers.[46]
Evidentiary Findings
I am satisfied that the Respondent was acutely concerned about reputational damage and potential business impact flowing from a failure of its employees to follow required procedures including incident reporting procedures. This concern was evident through the strong emphasis placed by the Respondent on the need for the prompt reporting of accidents and incidents by its employees. Clear procedures were in place and were reinforced in employee position descriptions.
Importantly for the purpose of the present matter, the Applicant’s position description, which he signed on commencement of his employment 2 June 2014, included specific reference to incident reporting requirements and the potential consequence of instant dismissal for a failure to immediately report damage to customer property/equipment. I am consequently satisfied on the evidence of both Ms Dare and the Applicant, that he was aware of his obligations to immediately report damage to customer property/equipment and also of the potential consequence of failing to do so.
As regards the Chain Incident, it seems inconceivable that the Applicant could have been unaware of a lifting chain breaking during his lifting of the container. Consequently, given the Respondent’s evidence as to its notification by the DELWP regarding the incident, the Commission is drawn to conclude that either the Applicant’s evidence is unreliable or alternatively the DELWP’s report to the Respondent was at best in error or simply false.
I can find no plausible explanation for why DELWP staff would have made a report to the Respondent of the lifting chain breaking had it not occurred. This is particularly so given the investigative process that was triggered by the incident involving both the Respondent and DELWP staff. Nor could the Applicant offer a credible explanation as to why such a report would have been incorrectly or falsely made by the DELWP. While no direct evidence of the incident was provided other than by the Applicant, I am unable to accept the Applicant’s evidence due to my concerns regarding his general reliability as a witness.
In any case, the Respondent concluded that the Chain Incident occurred and I am satisfied based on the evidence of Ms Dare that the Applicant was put on notice regarding his obligation to report incidents immediately.
With respect to the Mercedes Incident on 6 October 2017, there was no contest and I accept that damage was sustained to the vehicle being delivered to the Mercedes workshop by the Applicant on 6 October 2017. How or why the vehicle strap unhooked which led directly to the vehicle damage sustained was not in issue. Rather, it was the Applicant’s failure to immediately report the incident of damage to customer property/equipment that was in issue.
A competing version of events emerged with the Applicant claiming to have called Ms Dare immediately following his speaking to staff at the Mercedes workshop regarding the incident, whereas Ms Dare claims to have contacted the Applicant immediately after the incident was reported to her by the Mercedes workshop manager. I have preferred the evidence of Ms Dare in relation to the events. I am persuaded by Ms Dare’s clear recollection of the events which was supported by the evidence of Ms Dare’s timely completion of an investigation report. That report specifically referred to the Applicant having being reminded as to his accident and incident reporting obligations.
I am consequently satisfied that immediately following the Mercedes Incident the Applicant failed to report the incident as he was required to and that following completion of an investigation of the incident he was again reminded of the procedures for reporting of accidents and incidents. I am also satisfied, based on the Applicant’s evidence, that in the wake of the Mercedes Incident he was verbally warned as to the risk of dismissal for failing to immediately report accidents and/or incidents of damage to customer property/equipment.
With respect to the Container Incident, the Applicant acknowledged that he had not reported the damage to the container that was sustained during its delivery to Mildura on 22 December 2017. The Applicant referred to having been shook up by the incident that led to the container damage as a reason for his failure to report the incident.
The Applicant’s explanation of his failure to report the damage was unconvincing given that the incident occurred some hours before his arrival in Mildura. He had ample time on arrival in Mildura to call and report the damage to the Respondent and furthermore he could have reported the incident on his return to Melbourne later that same evening or the following day. The fact that he was due to take annual leave the following day is not a legitimate excuse in my view for the Applicant having failed to report the container damage.
It is clear and I am satisfied that the Applicant failed to report the damage sustained to the container during its delivery to Mildura. This was contrary to the reporting procedures, and no acceptable reason for that failure was offered. I am further satisfied that the Applicant was interviewed by Ms Dare regarding the incident on his return from annual leave on 19 January 2018 and was issued with a verbal warning, this warning action having been recorded on the incident investigation report and which the Applicant acknowledged as having received.
I now turn to consider the events that led to the Applicant’s termination of employment. It is important to note at this stage that the evidence of the Applicant and my findings in relation to the events preceding the Supergas Incident are relevant to the credibility of the Applicant’s evidence and the version of events that he offered in relation to the Supergas Incident.
The Applicant acknowledged that he picked up and delivered the vehicle to Supergas on 24 January 2018. He strongly denied that in doing so he had caused damage to the vehicle through the use of the “luxury straps” that he had used to hoist and then lower the vehicle off the tray of the tow truck. The Applicant’s version of events is irreconcilable with that of the Respondent’s version in which they say, based on Supergas reports, that the Applicant had incorrectly attached the straps to the steering arms of the vehicle which had then caused the steering arms to bend during the hoisting and lowering process.
The Applicant questioned the veracity of Supergas’ report and the authenticity of the photos provided to the Respondent following the incident. This line of argument was unconvincing having regard to a number of factors. Those factors included the timeliness of the contact from Supergas to Mr Davidson, which was on the same day of the incident; the fact that it was not contested that the vehicle delivered to Supergas did not have damaged steering arms when picked up by the Applicant; and that no other plausible explanation or evidence was offered to explain the damage or why Supergas would fabricate their account of the incident.
I am satisfied on the evidence of Ms Dare, which I prefer to that of the Applicant, that the damage was sustained to the vehicle delivered to the Supergas workshop on 24 January 2018 and that it is most likely that the damage was sustained due to the manner in which the tow straps were attached to the steering arms of the vehicle for the hoisting and lowering of the vehicle off the tow truck tray.
I am satisfied that the Respondent’s concern was not that the damage had been sustained, but rather that the Applicant had refused to acknowledge his responsibility and had again failed to report the incident. The Respondent was alerted to the incident by the owner of Supergas contacting Mr Davidson directly following the incident, which then prompted an investigation by Ms Dare at Mr Davidson’s request.
The Applicant was spoken to informally by Ms Dare between the date of the Supergas Incident on 24 January 2018 and his formal interview on the 31 January 2018. During that period and in the formal meeting, the Applicant maintained that no damage had occurred and as a consequence he had not reported the incident.
Confronted with the evidence of the vehicle damage provided to it by Supergas; the Applicant’s continued denial of responsibility; and the pattern of the Applicant’s previous conduct, the Respondent concluded that the failure to report the incident was sufficiently serious to justify immediate dismissal.
I am satisfied that that the Applicant was dismissed without notice on 31 January 2018.
Was the dismissal consistent with the Small Business Fair Dismissal Code – Summary Dismissal?
The Code applies to small business employers with less than 15 employees. A person is not unfairly dismissed if the dismissal is consistent with the Code and immediately before dismissal or at the time notice of the dismissal is given, whichever is earlier, the employer is a small business employer. I have already found that the Respondent was a small business employer at the relevant time.
The Code declared by the Minister pursuant to s 388(1) of the Act relevantly provides as follows:
“Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
In Pinawin v Domingo[47], the Full Bench considered whether, in the context of a summary dismissal under the Code, the Commission had to be satisfied that the serious misconduct which was the basis for the dismissal actually occurred:
“[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.
[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. The circumstances include the experience and resources of the small business employer concerned.
…[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well …”
Another Full Bench of the Commission recently examined the summary dismissal part of the Code in detail in Ryman v Thrash Pty Ltd[48] and concluded as follows:
“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates the following way:
If a small business employer has dismissed an employee without notice – that is, with immediate effect – on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.
In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectivity speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.”
The Applicant was dismissed without notice by the Respondent. Consequently my role in this matter is to determine whether the employer genuinely held a belief that the employee had committed an act of serious misconduct and whether that belief was, objectively speaking, based on reasonable grounds. It is not necessary to determine whether the serious misconduct did in fact occur or that the employer was correct in the belief that it held.
I am satisfied that the Respondent formed a genuine belief that the Applicant, in his repeated failure to report damage to customer property/equipment, had been guilty of serious misconduct. It was clear that the Respondent as a small business operated in a competitive environment and was extremely sensitive to reputational risk and damage flowing from a failure of its employees to follow procedures.
In the case of the Applicant, there was a pattern of behaviour evident to the Respondent that exposed its business to serious risk as revealed by the loss of customers. The importance placed on incident reporting was reinforced in both documented procedures and position descriptions which the Applicant had signed off on and understood.
The Respondent conducted an investigation and concluded that the Applicant’s conduct was inconsistent with documented procedures and constituted a serious reputational and business risk. I am satisfied that the belief of the Respondent that the Applicant was guilty of serious misconduct was genuinely held by Ms Dare and Mr Davidson as the owner of the business.
The Respondent’s belief was formed on the basis of the documented procedures in place, the Applicant’s acknowledgement of his understanding of his reporting responsibilities, the report and evidence of vehicle damage received from Supergas, the Applicant’s prior conduct and the Mercedes Incident investigation undertaken by Ms Dare during which the Applicant was interviewed and afforded an opportunity to explain his side of the story.
I am satisfied, based on an objective assessment of the Supergas Incident and prior incidents, that the Respondent had reasonable grounds on which to form its belief that the Applicant’s behaviour constituted serious misconduct.
Conclusion
For the reasons set out above, I am satisfied that:
(1)The Applicant is a person protected from unfair dismissal.
(2)Immediately before the Applicant’s dismissal, the Respondent was a small business within the meaning of the Act;
(3)The Respondent dismissed the Applicant on 31 January 2018 for his failure to report damage to customer property and equipment, contrary to his obligations under Respondent policies of which he understood.
(4)The Respondent genuinely believed that the Applicant’s disregard for reporting procedures presented such a serious risk to its reputation and business interests and that such failures constituted serious misconduct justifying summary dismissal.
(5)The belief held by the Respondent as to the nature of the Applicant’s conduct was formed on the basis of reasonable grounds.
I am satisfied that the Applicant’s dismissal was consistent with the Code. Consequently, the application is dismissed. An Order to that effect will be issued with this decision.
DEPUTY PRESIDENT
Appearances:
Mr B. Willis on his own behalf.
Ms M. Dare on behalf of the Respondent.
Hearing details:
2018.
Melbourne
May 28
<PR607726>
[1] Exhibit R4, ASIC extracts.
[2] Exhibit R2, MYOB reports and bank statements.
[3] Letter of termination of Mr Ozcan Yaman, dated 10 June 2016.
[4] Exhibit R35, Payroll Activity [Summary]- Inproof.
[5] Exhibit R36, Payroll Activity [Summary] - GTT Towing, Transport and Emergency Services.
[6] Exhibit R4.
[7] Transcript at PN530.
[8] Transcript at PN537.
[9] Transcript at PN726 - PN731.
[10] Exhibits A8, A9, photographs of Mercedes Benz.
[11] Transcript at PN543-PN553.
[12] Transcript at PN571 – PN579.
[13] Transcript at PN587 – PN592.
[14] Exhibit R11, Position Description signed by Mr. Brian Willis, dated 2 June 2014.
[15] Transcript at PN595 – PN610.
[16] Transcript atPN1113 – PN1119.
[17] Transcript at PN409 – PN418.
[18] Transcript at PN444 – PN447.
[19] Exhibit A15, Statement of Mr. Brian Wills, photos of damaged steering arm.
[20] Transcript at PN915 – PN934.
[21] Exhibit A13, Injury, Incident and Accident Report dated 31 January 2018.
[22] Transcript at PN469 – PN470.
[23] Transcript at PN476.
[24] Transcript at PN493 – PN494.
[25] Transcript at PN1106- PN1111.
[26] Transcript at PN1113 – PN1119.
[27] Transcript at PN671.
[28] Transcript at PN679 – PN681.
[29] Transcript at PN687.
[30] Transcript at PN691 – PN693.
[31] Transcript at PN758 – PN763, PN772 – PN778.
[32] Exhibit A5, Injury, Incident and Accident Report, dated 10 October 2017.
[33] Exhibits A11, A12.
[34] Transcript at PN791.
[35] Exhibit A6, Injury, Incident and Accident Report, dated 19 January 2018.
[36] Transcript at PN792 – PN793.
[37] Transcript at PN883.
[38] Transcript at PN889.
[39] Exhibit A13, Injury, Incident and Accident Report, dated 31 January 2018.
[40] Transcript at PN946 – PN952.
[41] Transcript at PN956.
[42] Transcript at PN1130 – PN1134.
[43] Transcript at PN1035 – PN1061.
[44] Exhibit R2, Injury, Incident and Accident Reporting Procedure signed Mr. Brian Wills, dated 31 January 2017.
[45] Exhibit R11, Position Description signed by Mr. Brian Willis, dated 2 June 2014.
[46] Transcript at PN956.
[47] [2012] FWAFB 1359.
[48] [2015] FWCFB 5264.
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