Damien Lennen v Hallmark Editions Pty Ltd T/A Hallmark Editions
[2012] FWA 6691
•30 AUGUST 2012
[2012] FWA 6691 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Damien Lennen
v
Hallmark Editions Pty Ltd T/A Hallmark Editions
(U2012/4356)
DEPUTY PRESIDENT HAMILTON | MELBOURNE, 30 AUGUST 2012 |
Application for unfair dismissal remedy - serious misconduct - procedural fairness - ‘fair go all round’ accorded, dismissal not harsh, unjust unreasonable - application dismissed.
[1] On 25 January 2012, Mr Damien Lennen applied under section 394 of the Fair Work Act 2009 (‘the Act’) for an unfair dismissal remedy.
[2] A jurisdictional objection made by the employer, CommStrat, also known as Hallmark Editions Pty Ltd, was dismissed 1. The matter was referred to me for determination.
[3] Mr.Lennen gave evidence on his own behalf. Witness evidence for the employer was given by Mr.Blake Duggin, and Mr.Scott McKinnon. Another witness was foreshadowed by Mr.Lennen, but was ultimately not called by him to give evidence. I have had regard to all the submissions and evidence.
[4] Mr.Mathew Johnson, the Chief Executive of Hallmark, did not give evidence. I was asked to draw an adverse inference under Jones v. Dunkel 2. However, there is no obligation on a Chief Executive to appear in every unfair dismissal proceeding he or she is involved with under threat of an adverse inference being drawn if they do not. Such an obligation would be quite unworkable for busy Chief Executives. In this case the employer led evidence from two managers with direct contact with Mr.Lennen, and their evidence was direct and persuasive. They were involved in warning Mr.Lennen about his conduct, and the events which led to his termination by email from Mr.Johnson. There is no reason to believe that Mr.Johnson would take a different view, quite the contrary given the context such as the email Mr.Johnson sent and other material. To draw an adverse inference would be to create a legal fiction. I note also that Mr.Lennen appears to be able to put submissions utilising a range of legal concepts relevant to the conduct of these cases, whether as a result of legal advice, his own research, or both.
Statutory Provisions
[5] Section 387 of the Act provides:
‘387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.’
(a) Valid Reason
[6] The term ‘valid reason’ was considered by Northrop J in Selvachandran v. Petron Plastics Pty Ltd 3 , in relation to s.170DE of the Industrial Relations Act 1988. He said:
“Section 170DE(1) refers to a `valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective `valid’. A reference to dictionaries shows that the word `valid’ has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is” `2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In the Macquarie Dictionary the relevant meaning is `sound, just or well founded; a valid reason.’
In its context in s 170DE(1), the adjective `valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must `be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of a s170DC.”
[7] On 19 January 2012 the Chief Executive, Mr.Mathew Johnson, sent Mr.Lennen an email dismissing him for the stated reason that 4:
‘Things are not working out as we have thought mainly due to attendance, general attitude around the office’.
[8] Mr.Lennen received what appears to have been pay in lieu of notice. Even if it was not pay in lieu of notice, the employer submitted that Mr.Lennen’s conduct constituted serious misconduct which justified summary dismissal 5.
[9] The employer submitted that there were a number of valid reasons for termination of Mr.Lennen’s employment, the first being that Mr.Lennen engaged in ‘a brazen attempt to dishonestly extract a financial benefit from Hallmark, in the form of early payment of his retainer.’ 6 Mr.McKinnon gave evidence that Mr.Lennen sent an email on 29 November 2011 stating that:
‘I have spoken to both Scott and Matt and they are happy for my invoice to be processed today and Matt said if there are any issues to contact him.’
[10] Mr.McKinnon is the ‘Scott’ referred to. He gave evidence that on 29 November 2011 he sent an email in reply to an email from another person that:
‘I did not approve Damien’s pay to be given early, hence why he didn’t cc me on the second email’.
[11] He gave evidence that he never authorised such a statement to be made by Mr.Lennen, and never made a statement which may have been construed as such. He said that the Chief Executive, Mathew Johnson, the ‘Matt’ referred to, would not have authorised it 7. To the extent that it is relevant emails from a Ms.Etheridge confirmed that Mr.Johnson had told her that he never authorised it, and told her to pay as normal and not to pay early. These emails were not challenged by Mr.Lennen. Mr.Lennen said that the payment had been authorised8. In his final submissions he said that he ‘followed the correct procedure the request was ultimately denied’, which may be a different version of events. He also said that because of the seriousness of the allegations a high standard of proof was required9.
[12] I had the opportunity to observe both witnesses giving evidence and I prefer the evidence of Mr.McKinnon, which is also consistent with the email evidence. I am satisfied that Mr.Lennen sent an email claiming early payment of his salary on the basis that this had been authorised knowing that it had not been authorised. I am satisfied that this is a valid reason for the termination of his employment, and is also a serious issue of financial dishonesty.
[13] The employer submitted that Mr.Lennen made a ‘dishonest attempt to obtain sales commissions to which he was not entitled by falsifying sales figures’ 10. Mr.McKinnon gave evidence that Mr.Lennen had falsified sales figures for that purposes11. Mr.Lennen denied that he did this12. I had the opportunity to observe both witnesses giving evidence and I prefer the evidence of Mr.McKinnon. I am satisfied that this is a valid reason for the termination of his employment, and again is a serious issue of financial dishonesty.
[14] The employer submitted that Mr.Lennen engaged in actions which damaged its brand and reputation. Specifically, the employer received calls from Mr.Lennen’s creditors seeking payment, these include local cafes where Mr.Lennen had run up credit and refused to pay. Mr.Duggin gave evidence that he sat next to Mr.Lennen at work, and that Mr.Lennen was ‘frequently’ on the phone at work dealing with personal creditors about unpaid bills, perhaps on dozens of occasions 13. He also gave evidence that he had spoken to Mr.Lennen’s landlord when he rang up seeking Mr.Lennen so that he could pursue him for unpaid rent, and the business was still receiving phone calls from creditors14. He said that he had seen a credit bill at a local cafe, the Deco Cafe, run up by Mr.Lennen for $600. Mr.Lennen had left a CommStratt (Hallmark) business card, thus directly associating the business with his private debt. He had a telephone call from another cafe seeking Mr.Lennen’s address, so that they could pursue him for the bill ‘and were quite verbal about it’15. There was other similar evidence16. He heard conversations between other employees and Mr.Lennen’s creditors. He gave evidence that Mr.Lennen in some way forged his signature on invoices17. One of the attachments to the employer submissions is a letter from a creditor sent to Mr.Lennen by facsimile to his workplace stating that four months rent was owed following a VCAT order, and threatening legal action. Mr.McKinnon gave similar evidence, although his evidence was based on less direct knowledge and was therefore less useful as a matter of weight18.
[15] Mr.Lennen denied that he had engaged in any conduct detrimental to the business 19. He admitted to using his business card to identify himself in getting credit, but claimed that he did not recall getting credit from the two local cafes mentioned, Reset and Deco20. This is a claim that he had no recollection of running up a debt of $600 at a local cafe, Deco, that he ate at, a claim that lacks credibility. He then denied owing Deco or Reset money21. In a written submission he said that ‘the accounts were personally acquired’22, which seems to suggest that he agreed that accounts had been run up. In his final submissions he said that ‘none of these matters related to my employment. No evidence was supplied that Hallmark lost any business from my dealings with any personal creditors’23. Again this is not a denial that he had run up debts and that creditors were pursuing him at work for them. I had the opportunity to observe both witnesses giving evidence and I prefer the evidence of Mr.Duggin.
[16] In my respectful view latitude should be shown to employees in relation to issues arising from their personal life, although it is a question of degree. At some point issues arising from an employee’s personal life can be damaging to the business and the employee can be held to account for this. In particular, an employee is in effect a representative of the business and its reputation in some cases, and business reputation can suffer because of an employee’s personal conduct. In this case I see no reason to believe that Mr.Lennen took any real or effective action to protect the reputation of the business from an adverse impact to its reputation arising from his conduct in running up debts and refusing to pay creditors, who associated him with his workplace and sought him out there and spoke to others there. I am satisfied that Mr.Lennen engaged in conduct which damaged the reputation of the business, and that this was a valid reason for the termination of his employment.
[17] The employer submitted that Mr.Lennen engaged in persistent and unexplained absenteeism 24. Mr.Duggin gave evidence that on a number of instances, primarily Friday afternoons, Mr.Lennen would ‘go missing at lunch and not return until quite late. On many occasions being found down the road at the TAB etc cetera’25. He said that Mr.Lennen did not return to work after the Christmas party until January26. On the evidence of Mr.McKinnon the absenteeism was perhaps not great, perhaps only 25 hours over the period of his employment, as well as two days after Christmas. Mr.Lennen denied that this was absenteeism, and for example said that the two days after Christmas were authorised. This was denied by Mr.McKinnon. I had the opportunity to observe both witnesses giving evidence and I prefer the evidence of Mr.McKinnon. In this case the degree of absenteeism was not necessarily large but nevertheless constitutes a valid reason for termination of his employment. It also had an indirect effect of sending the wrong signal to other employees.
[18] The employer submitted that Mr.Lennen engaged in ‘poor treatment of customers and his breaches of Hallmark’s pricing policies’ 27. Mr.Lennen denied that he engaged in any such treatment28. Mr.Duggin29 and Mr.McKinnon gave evidence to the contrary30. I had the opportunity to observe both witnesses giving evidence and I prefer the evidence of Mr.McKinnon and Mr.Duggin. There is some degree of judgement required in such matters, and there could be instances where pricing was reasonably considered legitimate by an employee and illegitimate by the employer. This is not such a case, in my view. In this case I am satisfied that the conduct amounted to a valid reason for termination of employment. It is also the case as Mr.Lennen said that some degree of forcefulness may be required in pursuing sales. However again this is a question of degree and I am satisfied that Mr.Lennen went beyond a reasonable degree of forcefulness and treated customers poorly. This is also a valid reason for termination of his employment.
[19] I note that Mr.Lennen sought to argue that he was moved from a contracting arrangement to a full-time position and that this is relevant 31. Mr.McKinnon and others gave a satisfactory explanation for this32, and it in no way diminishes the poor conduct of Mr.Lennen outlined above. Mr.Lennen was not moved to an employment relationship as a reward for his last six months of achieving sales targets and to secure his employment.
(b) Person Notified of that Reason
[20] Mr.Lennen was notified of ‘Things are not working out as we have thought mainly due to attendance, general attitude around the office’. This is not a full notification of the matters raised by the employer in submissions and evidence put during the case. Mr.Lennen was notified only of absenteeism, and a general comment of the nature ‘general attitude around the office’. This is too vague to constitute fair warning of such matters. However, Mr.Lennen had been warned about falsification of sales figures, absenteeism, and fraudulent behaviour. He was given an opportunity to put what he could to his employer about his conduct, and the later termination should not have been a surprise to him.
(c) Opportunity to Respond to any Reason
[21] Before termination Mr.Lennen was not given an opportunity respond to the valid reasons for termination of his employment 33. However, he had been warned about some of them. Moreover, some common sense must be exercised in considering the lack of an opportunity given to Mr.Lennen to respond. Given the warnings, the discussions associated with the warnings, and the lack of any real answer to the charges against him during these proceedings, it is difficult to see how an opportunity to respond would have improved the decision making of the employer in any respect, or given the employee much greater degree of a voice than he already had. Those are surely the main or significant purposes of an opportunity to respond. I have listened carefully to Mr.Lennen’s account of events and I heard nothing to suggest that an opportunity to respond would have led to a decision other than the termination of his employment, or would have been an actually useful exercise. Mr.Lennen’s responses to the employer claims were unsatisfactory or based on an account of events which I am unable to accept on the evidence before me.
(d) Unreasonable refusal to allow support person
[22] There was no request for a support person, as there was no meeting before termination.
(e) Warnings of Unsatisfactory Performance
[23] Mr.McKinnon gave evidence that Mr.Lennen was warned on 3 November 2011 about falsification of sales figures, on 15 November 2011 about absenteeism, and on 29 November 2011 about fraudulent behaviour. Mr.McKinnon’s recollections in relation to the issue of sales figures was assisted by a contemporaneous note he prepared 34, and a similar note in relation to absenteeism35. The evidence of Mr.Duggin was generally consistent with this evidence, although Mr.Duggin considered that there were ‘at least two’ verbal warnings not three given36. Mr.Lennen claimed that these warnings never took place37. He said that there were ‘regular discussions with Scott McKinnon none of these resulted in verbal warnings’38.
[24] I have no hesitation in preferring the evidence of Mr.McKinnon and Mr.Duggin wherever it was in conflict with that of Mr.Lennen. I am asked to believe, in effect, that Mr.McKinnon, Mr.Duggin and others concocted an account of warnings, and maintained that account in giving sworn evidence, and did so even though for example Mr.McKinnon no longer works for the employer and has no conceivable reason for lying. I was given no reason to believe that they would engage in such conduct, and in fact I found their evidence to be generally consistent and convincing. I am satisfied that Mr.Lennen was given an adequate opportunity to take account of the employer complaints about his performance, and to improve his conduct taking account of those views. He seems not to have done so.
(f) Size of Business, (g) Dedicated Human Resource Specialists
[25] As the employer submitted, it is not a large business, and does not have dedicated human resource specialists. This mitigates to a limited extent the employer management of Mr.Lennen, and its failures in that management. For example the employer failed to provide Mr.Lennen with an opportunity to answer the claims against him before he was dismissed.
(h) Any Other Matters
[26] I have had regard to all matters raised by the parties.
Harsh Unjust or Unreasonable
[27] On any reasonable view of the evidence Mr.Lennen was accorded a ‘fair go all round’. The termination of his employment was not harsh, unjust or unreasonable. There were sufficient reasons for summary dismissal, or dismissal with payment in lieu of notice, which appears to have been paid. An order dismissing his application is contained in PR528566.
DEPUTY PRESIDENT
Appearances:
D. Lennen, the applicant represented himself.
A. McNab of the respondent, Hallmark Editions Pty Ltd
Hearing details:
Melbourne
2012
5 July and 7 August
Final written submissions:
2012
14 August (applicant)
21 August (respondent)
23 August (in reply) (applicant)
1 [2012] FWA 3546, Bissett C, 30 April 2012.
2 (1959) 101 CLR 298
3 (1995) 62 IR 371 at 373
4 Exhibit H1, attached email dated 19 January 2012 from Mathew Johnson Chief Executive Officer
5 Exhibit H1, paragraph 7(b)
6 Exhibit H1, paragraph 14
7 PN1810-1820
8 PN549-557; Exhibit L1
9 Applicant Final Submissions, paragraph 5
10 Exhibit H1, paragraph 15
11 PN1828-1829
12 PN558; Final Submissions paragraph 3
13 PN813-825
14 PN825-832
15 PN840
16 Exhibit H1, paragraph 16
17 PN932-983
18 PN1880-1903
19 PN559
20 PN630
21 PN653
22 Exhibit L1, paragraphs 16
23 Applicant Final Submissions paragraph 7
24 Exhibit H1, paragraph 17
25 PN792
26 PN797
27 Exhibit H1, paragraph 18
28 PN561
29 PN1108-1143
30 PN2210-2276
31 Exhibit L2, paragraph 3.
32 PN1919-1929
33 Exhibit L1, paragraph 26
34 Exhibit H8
35 Exhibit H9
36 PN798-811
37 PN562
38 Applicant Final Submissions paragraph 10
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