Damien Cliffe v Hotline It Pty Ltd

[2016] FWC 7020

[2016] FWC 7020

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Damien Cliffe
v
Hotline IT Pty Ltd
(U2016/2049)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 30 SEPTEMBER 2016

Application for relief from unfair dismissal.

[1] On 3 May 2016 Mr Damien Cliffe (the Applicant) lodged with the Fair Work Commission (the Commission), pursuant to s.394 of the Fair Work Act 2009 (the Act), an application for a remedy for unfair dismissal against his former employer Hotline IT Pty Ltd (the Respondent).

[2] The Applicant commenced employment with the Respondent on 2 July 2012. The Applicant says that he was notified of his dismissal on 13 April 2016 and the dismissal took effect on that day.

[3] The Applicant was employed as a Senior Technician in the Respondent’s Information Technology and Communications company located on Sydney’s North Shore. The Applicant had been promoted to his position in January 2015. Prior to this date, he had been employed as a Help Desk Technician.

[4] The Applicant was dismissed for performance issues. Whilst he concedes that he had received previous warnings, his performance had improved and dismissal was unfair. He also says that it did not take account of his personal circumstances. He seeks financial compensation.

[5] The Respondent says that the Applicant had consistently not filled out timesheets which were logs of his work for clients. Therefore, clients could not be properly billed. There were also timekeeping issues.

[6] In its F3 response, the Respondent set out counselling processes undertaken with the Applicant. The major steps were:

● 17 August 2015 – commencement of a performance improvement plan;

● 25 September 2015 – letter to the Applicant expressing concern about his failure to complete timesheets;

● 16 October 2015 – meeting about the issue with the Applicant which led to a warning letter late that day;

● 10 February 2016 – further performance improvement plan which led to a final written warning;

● 12 February and 9 March 2016 – further meetings about the issue – the Applicant was granted two weeks personal leave;

● 5 April 2016 – final written warning letter;

● 11 April 2016 – letter to the Applicant inviting him to attend disciplinary meeting;

● 13 April 2016 – disciplinary meeting, termination letter sent to Applicant.

[7] The Respondent says that the Applicant was terminated for consistent underperformance which he failed to remedy. The termination letter was signed by Michelle Joosse the Respondent’s General Manager. It specifically referred to failure to complete the timesheets for the week of 4 April, despite numerous clear warnings. The Applicant was paid three weeks’ pay in lieu of notice.

Commission Proceedings

[8] The matter was conciliated on 1 June 2016, but not resolved.

[9] I conducted a telephone programming hearing on 3 August 2016.

[10] The hearing took place on 11 August 2016.

[11] The Applicant represented himself. The Respondent was represented by Ms A. Curtis from Employsure who was granted permission to appear pursuant to s.596.

[12] The Applicant relied on a written submission and his witness statement (Exhibit C1).

[13] The Respondent relied on written submissions and the witness statements of:

● Malcolm Joosse (Exhibit H2)

● Peter Weber (Exhibit H3)

● Michelle Joosse (Exhibit H4)

● Nicholas Butler (Exhibit H5)

Protection from Unfair Dismissal

[14] An order for reinstatement or compensation may only be issued where I am satisfied the Applicant was protected from unfair dismissal at the time of the dismissal.

[15] Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

[16] The question of award coverage of the Applicant was unclear. However, his annual salary of $85,000 plus $60 per week for home internet and $100 per week on-call allowance is below the high income threshold. It was conceded therefore that he was a person protected from unfair dismissal in accordance with s.382 of the Act.

Preliminary Matters

[17] Section 396 provides that certain matters must be determined by the Commission before proceeding to deal with the merits of a matter. It provides:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(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.”

[18] None of these matters were at issue in this case. In particular I note that the Respondent had 18 employees at the time of the dismissal so the Small Business Fair Dismissal Code has no application.

Was the dismissal unfair?

[19] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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.”

[20] No issue was raised pursuant to s.385(a) (c) or (d).

Harsh, Unjust or Unreasonable

[21] I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“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.”

Applicant’s case

[22] The Applicant submits that the dismissal was harsh, unjust or unreasonable because:

● The Applicant does not deny the problems with his timesheet keeping, but says that after the counselling meeting in March there was a significant improvement.

● The Applicant says that at the time of the dismissal the timesheets were up to date, therefore, the dismissal was harsh and unreasonable.

● The Applicant further submits that he had been diagnosed with depression and anxiety and that this was not taken into account by the Respondent.

● The Applicant found another job in mid June 2016, and seeks financial compensation in the order of $14,000 based on income lost because of his period of unemployment and the difference compared to his new position.

Respondent’s case

[23] The Respondent submits that the dismissal was not harsh, unjust or unreasonable because:

● The Respondent submits that the proper completion of timesheets is essential to its business enabling clients to be charged for the work that has been done. All employees were instructed in this but the Applicant consistently failed to do it.

● The Performance Improvement Plan implemented in August 2015 allowed for paid days off for study. As well, an extra 30 minutes per day administration time was allowed to the Applicant to facilitate the completion of the timesheets. He was reminded daily verbally to complete them. The Respondent therefore says that there was plenty of support and leniency to the Applicant to allow the problem to be addressed.

● In October 2015 there were also issues about the Applicant’s work attendance, as well, which led to the 16 October disciplinary meeting and subsequent warning letter.

● The Respondent says that there was no improvement leading to the final warning letter on 16 February 2016.

● The Respondent denies that there was any improvement after this, leading to a further final written warning on 5 April and the disciplinary meeting on 13 April and termination later that day.

● The Respondent says that it has suffered financial loss and damage to the relationship with its clients as a result of the Applicant’s poor performance.

● The Respondent says that the Applicant was provided with procedural fairness as demonstrated by the lengthy counselling and performance management process in which the Applicant was provided with plenty of opportunities to improve his performance.

● The Respondent denies that it was provided with medical evidence by the Applicant about his medical condition. In any event, the Applicant was treated with due consideration.

● The statement of Michelle Joosse (Exhibit H4) outlines in detail the steps taken to counsel the Applicant. Specific examples of the timesheets were provided and specific examples of difficulties with clients. Despite having enough evidence to dismiss the Applicant, two weeks annual leave was granted to him in March 2016.

● Ms Joosse noted that the Applicant did update his timesheets immediately before the 13^th April disciplinary meeting. The Applicant showed no appreciation of the seriousness of the issue or gave any confidence that he would perform satisfactorily into the future.

● Peter Weber’s evidence (Exhibit H3) related particularly to the impact of the Applicant’s non-performance on clients. He referred to a number of complaints by clients about non-completion of work, failure to return calls etc.

● Malcolm Joosse, the Respondent’s Managing Director, gave evidence of the impact of the Applicant’s poor performance with respect to one client of nearly 20 years. About $11,000 in labour had to be re-credited to this client because of the Applicant’s failure to properly record the work performed.

● Nicholas Butler (Exhibit H5) was the Applicant’s direct manager and provided details of the Respondent’s attempts to manage and support the Applicant. He also provided an account of the meeting which led to the Applicant’s termination. Attached to his statement was a copy of the Respondent’s timesheet policy together with sample print-outs of completed records.

Approach of the Commission

[24] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“... 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.”

[25] Vice President Ross, as he then was, in B Rose v Telstra Corporation Limited (1998) Q9292 (Rose) restated the above proposition and also stated:

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

Valid Reason - s.387(a)

[26] In Container Terminals Australia Limited v Toby [2000] Print S8434, a Full Bench said ‘In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable’.

[27] Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 said:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct, or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that the employer and employee are each treated fairly ...”

[28] In Parmalat Food Products Pty Ltd v Wililo[2011] FWAFB 1166, the Full Bench held:

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

[29] The Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post[2013] FWCFB 6191provides a useful summary of the approach to be taken by the Commission in weighing the factors to be considered under s.387:

“[20] Northrop J’s reasoning anticipated the reasoning of the High Court in Victoria v Commonwealth – that s.170DE(2) by its operation could render invalid a reason that would otherwise have been a valid reason. The fact that some dismissals are “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” means that the class of dismissals that are “harsh, unjust or unreasonable” is greater than the class of dismissals where there is no “valid reason” for the dismissal.

[21] Section 387 specifies a range of matters that must be considered in each case. Section 387(h) requires consideration of “any other matters that FWA considers relevant”. In any given case, there will be a range of matters, beyond those specified in s.387(a) to (g), that rationally bear upon whether the dismissal is “harsh, unjust or unreasonable” and thus are “relevant matters” that must be considered pursuant to s.387(h).

[22] Often it will not make any difference to the ultimate outcome whether a particular circumstance is considered pursuant to s.387(a) in determining whether there is a valid reason, or as a relevant matter pursuant to s.387(h), leading to the ultimate determination of whether the dismissal was “harsh, unjust or unreasonable”. However, in some cases it may matter greatly. That will tend to be so when the particular misconduct, shorn of the personal circumstances of the employee and the broader context beyond the particular acts or omissions that are said to constitute the misconduct, is clearly a matter that a reasonable employer is entitled to take seriously. This is such a case.
...
[34] In considering whether there was a valid reason for a dismissal under s.387(a), the reason(s) being considered are the employer’s reason(s). In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1).

[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee”.

[35] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.
. . .

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

(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;
against
(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.”

[30] I respectfully adopt this approach.

[31] This was a case where the Applicant admitted that he had not carried out an important part of his duties (Transcript PN86-PN93). There is no doubt that there was a requirement for all employees of the Respondent to fill in timesheets correctly. The importance of this was made clear to all employees. Clients could not be properly charged and the amount of work done could not be demonstrated without this. The Respondent’s witnesses were able to show that it had suffered financial and reputational loss due to the Applicant’s performance.

[32] The Applicant demonstrated this failure over most of the period of his employment. He was formally performance-managed from August 2015 until his termination on 13 April 2016. The Applicant says that his performance in this area had improved at the time of his termination. However, I am not satisfied that this was the case. Timesheets were filled in quickly and incompletely just prior to the final disciplinary meeting.

[33] The Applicant was made well aware of his performance failures in respect of the timesheets. As well, the evidence shows that there were difficulties with respect to attendance and timekeeping, timely completion of work and communication with clients. In respect of all of these issues the Applicant received:

● Four warning letters;
● Three disciplinary meetings;
● Two formal performance improvement plans.

[34] The evidence of the Applicant was that it takes between 15 to 30 minutes per day to properly fill in the timesheets (Transcript PN277). Early in 2016 the Applicant had his workload adjusted so that this specific time was allocated, but still the task was not satisfactorily performed. The Applicant was also provided with additional training and allowed time off to deal with personal circumstances. I am therefore satisfied that the Respondent gave the Applicant every reasonable chance to improve his performance and support so that the problem could be rectified. It could not be said that the Respondent acted precipitously.

[35] Ms Joosse’s evidence about the Applicant’s failure to show real improvement was convincing:

“MR CLIFFE:  So based on that can you see a trend downwards as evidenced by the trend line?---Well, the negative down here was when you put your leave - it was before we granted you that time - annual leave, and you've put the leave in advance.  So that's why you've got a negative then because you actually put it in advance.  But I mean even looking at this you're still looking probably about five days maybe that you've - it's taken you to do your timesheets, which to me is still not good enough.  Like unless your timesheet's entered on that - I didn't look at anything quantitive[sic] like this.  Basically for me unless your timesheet is entered on the day that the work was performed it's not good enough, and the fact that this is still showing five days it's just not good enough.

But in your submission you've said that there was no noticeable improvement, is that correct?---Well, I didn't look at any quantitive figures like this.  I don't have the time to spend on doing this sort of thing.  But the thing is you can clearly see that you're still not doing your timesheets on time.  So to me that is not any real improvement.  Everyone else in the organisation does their timesheets on the day that they perform the work, except for you.  So I didn't - no, I didn't do any data like this and looking at this may be some improvement.  But at the time I didn't look at this and I'm sorry, five days to do the timesheet from when they were actually done is not good enough.

Assuming this data is accurate, which I believe it to be, it goes against you saying there was no improvement, does it not?---Well, there's no real improvement.  Real improvement is the fact that you're doing your timesheets as you do them, which is what you were required to do.  You were still not doing your timesheets when you're expected to do them so to me that is not real improvement and, like I said, I did not have this data at the time we terminated your employment.  All I could see was, looking up on the - my screen every day was that your timesheets were still not up-to-date.  I had everyone else's time over six hours per day except for you.  I don't know what more we could have done, to be honest.”

(Transcript PN562-PN564)

[36] There was no evidence that the Respondent wanted to terminate the Applicant. Indeed, it is clear the Respondent was proactive in seeking to have the Applicant’s admitted performance deficiencies remedied through training and support. The Applicant did not take up these opportunities.

[37] Accordingly, I find that there was a valid reason for the dismissal.

Notification of a valid reason – s.387(b)

[38] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made, Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41] in explicit terms, Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151 and in plain and clear terms, Presvisic v Australian Quarantine Inspection Services Print Q3730. In Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:

“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”

[39] I have outlined earlier, in some detail, the steps taken by the Respondent in the performance management/disciplinary process including verbal counselling and monitoring, warning letters, and disciplinary meetings. There is no doubt that the Applicant was aware of the issues to be discussed at the 13 April disciplinary meeting.

[40] Accordingly, I am satisfied that the Applicant was notified of the valid reason for termination before it occurred on 13 April.

Opportunity to respond s.387(c)

[41] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal way to ensure the employee relating to the conduct or capacity of the person. This criterion is to be applied in a common sense is treated fairly and should not be burdened with formality RMIT v Asher (2010) 194 IR 1, 14-15.

[42] It follows from the above series of events, and the evidence about the 13 April meeting, that the Applicant had an opportunity to respond to the allegations.

Unreasonable refusal by the employer to allow a support person – s.387(d)

[43] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.

[44] There is no suggestion that the Applicant was denied a support person at the various meetings.

Warnings regarding unsatisfactory performance – s.387(e)

[45] I have outlined the various written and verbal warnings that the Applicant received.

Impact of the size of the Respondent on procedures followed – s.387(f); Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

[46] The Respondent is not a large business, but it did follow a structured process with the Applicant. It was assisted by advice from Ms Curtis. These factors did not therefore detract from the process adopted.

Any other matter that the FWC considers relevant

[47] Section 387(h) allows the Commission to consider any other matters it considers relevant. These must be considered in the context of the object of Part 3 - 2 of the Act contained in s.381(2) to “ensure that a ‘fair go all round’ is accorded to both the employer and the employee concerned”.

[48] The Applicant raised issues with respect to his medical conditions and family circumstances. There were no medical reports produced. Nevertheless, I have taken these factors into account.

[49] For these reasons I find that the dismissal was not harsh, unjust or unreasonable. Accordingly, I find that the dismissal was not unfair within the terms of s.385.

[50] The Application for unfair dismissal relief is therefore dismissed. An order [PR586008] accompanies this decision.

DEPUTY PRESIDENT

Appearances:

D. Cliffe, self-applicant;

A. Curtis with M Joosse for the Respondent.

Hearing details:

2016

Sydney:

August 3 (telephone mention),

August 11.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR585958>