[2019] FWC 3152

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

David Kalweit
v
Metcash Trading Limited T/A Australian Liquor Marketers
(U2018/6231)

DEPUTY PRESIDENT KOVACIC

CANBERRA, 13 MAY 2019

Application for relief from unfair dismissal – dismissal found not to be unfair – application dismissed.

[1] Mr David Kalweit (the Applicant) made an application which was received by the Fair Work Commission (the Commission) on 15 June 2018 under s.394 of the Fair Work Act 2009 (the Act) alleging that the termination of his employment by Metcash Trading Limited T/A Australian Liquor Marketers (the Respondent) on 7 June 2018 was unfair.

[2] Mr Kalweit’s application was heard on 16 and 23 November 2018 with closing submissions subsequently provided in writing. At the hearing, Mr Jamie Ronald of Counsel appeared with permission for Mr Kalweit while Mr Peter McNulty appeared with permission for the Respondent. Mr Kalweit gave evidence on his own behalf together with Mr Brendon D’Aquino, a former employee of the Respondent, and Mr Brett Cotterill, an Organiser for the National Union of Workers (NUW). Mr D’Aquino and Mr Cotterill were not required for cross examination. Mr Phillip Christian, the Respondent’s Warehouse Manager, gave evidence for the Respondent.

[3] For the reasons outlined below, I have found that Mr Kalweit’s dismissal was not unfair in that it was not harsh, unjust or unreasonable. Accordingly, Mr Kalweit’s application will be dismissed.

Background

[4] Mr Kalweit commenced employment with the Respondent as a Storeworker Grade 1 in August 2007. Mr Kalweit worked as a picker at the Respondent’s Fyshwick warehouse which involved him picking stock and assembling liquor orders. By way of background, the Respondent’s Fyshwick warehouse stocks around 4,400 products consisting of a full range of beers, wines and spirits and services around 860 clients comprised of independent retailers, clubs, pubs and restaurants in the ACT and surrounding areas of NSW.

[5] In October 2015 the Respondent introduced minimum performance metrics. The performance metrics were set having regard to two and a half years of data, with each employee assessed against the following three performance metrics each month:

• Pick-rate – the number of cartons picked by an employee in an hour – employees are required to have a pick rate of at least 115 cartons per hour (averaged over a month);

• Mistake rate – the number of mistakes made when fulfilling orders – employees are required to have no more than one mistake per week (averaged over a month); and

• Exceeded time – the amount of time elapsed between finalising one order and acceptance of the next order – employees are required to have exceeded time of less than 10 minutes per day (averaged over a month).

[6] Mr Kalweit received a verbal written warning regarding his performance on 7 June 2017 in the course of his Employee Performance Review with Mr Christian for May 2017. The Employee Performance Review document was annotated as follows:

“7/6/17 13:08-13:45

Dave Rejects having a pick rate and was aggressive during P/R. aggressive and not listening only attacking continually [sic]

Verbal warning was issued to David Kalweit over poor performance.” 1

[7] Mr Christian’s notes of his 7 June 2017 Employee Performance Review meeting with Mr Kalweit include the following:

“After returning from speaking with Warren [Mr Kalweit’s support person] I asked him [Mr Kalweit] did he understand why I am considering giving him a warning as he did not meet the required pick rate last month or the last 5 months. He answered NO I DON’T UNDERSTAND.” 2 (Emphasis as per original, underlining added)

[8] The Employee Counselling Interview Record of the 7 June 2017 meeting states that:

“OUTLINE OF REQUIRED PERFORMANCE OR BEHAVIOUR

…David must improve his pick rate performance to equal and maintain the warehouse pick standard of 115ctns/hour. He must continue to meet the other performance measures of exceeded time and mistakes as well.

Previous discussions where he was advised to improve his performance and meet the standards set occurred on 30/11/2016, 26/10/16, 16/11/2015.

…

AGREED ACTION

Step

Specific Action

Responsible

By When

David must increase his pick rate and maintain it at the warehouse average.

David will be given further training to improve his picking

David Kalweit

3/7/17

…” 3 (Underlining added)

[9] On 17 June 2017 Mr Kalweit underwent an Assessment Technique Review (ATR) which identified that he needed to improve his manual handling. 4

[10] A further Employee Counselling Interview was conducted with Mr Kalweit on 6 July 2017 at which he was issued with a first written warning. The record of that interview includes the following:

“REASON FOR COUNSELLING INTERVIEW

Poor performance in achieving the required pick rate standard. David’s current pick rate is 111ctns/hour for the month of June 2017. Observation during ATR indicates that David Kalweit can pick safely at a reasonable pace and to the require [sic] performance standard. But during normal work activity his performance is below the required pick rate standard…

OUTLINE OF REQUIRED PERFORMANCE OR BEHAVIOUR

… David has been informed of his non-performance and has weekly access to his performance data to keep him informed of his ongoing performance.

David must improve his pick rate performance to equal and maintain the warehouse pick standard of 115ctns/hour. He must continue to meet the other performance measures of exceeded time and mistakes as well.

Previous formal discussions where he was advised to improve his performance and meet the standards set occurred on the 10/05/2017, 30/11/2016, 26/10/16, 16/11/2015.

…

David must follow all reasonable directions given to him by his Supervisor and Managers during the business operation.

EMPLOYEE’S RESPONSE TO THE MATTERS PRESENTED

My age, orders should be considered Dave believes [sic] he does his job well. David feels he is being discriminated against because he is an ageing worker.

…

THE COUNSELLING INTERVIEW IS RECORDED AS: 1st Written Warning” 5 (Emphasis and text as per original, underlining added)

[11] The Employee Counselling Interview Record of 6 July 2017 states that “David is not willing to sign.” 6

[12] On 11 January 2018 Mr Kalweit received a second and final written warning which stated inter alia as follows:

“I refer to the discussion held on Thursday, 7 December 2017 …

The meeting was in relation to the Company’s ongoing concern of your failure to meet the expected standards relating to performance in achieving the required pick-rate outcomes.

Background

The following is a summation of the history to date relating to verbal documented discussions in disciplinary outcomes for failure to meet the required performance standards.

Date	Issue	Actions	Outcome
5 September 2017 (August monthly review)	Poor performance in achieving the required pick-rate, current average for the month is 113 cartons per hour. Improvement required for exceeded time – average of 10 minutes per day/ month	* Requirement to improve pick-rate to warehouse standard of 115 cartons per hour. * Requirement to improve exceeds time to below 10 minutes/ day.	…
8 August 2017 (July monthly review)	Improvement required for exceeded time – average of 10 minutes per day/month (July 2017)	* Requirement to improve exceeds time to below 10 minutes/ day.	…
6 July 2017	Poor performance in achieving the required pick-rate, current rate is 111 cartons per hour. … Over the last 6 months, David’s pick-rate has averaged 108 cartons per hour (below the warehouse standard)	* Increase pick-rate and maintain at the warehouse average.	Counselling –1^st written warning
7 June 2017 (May monthly review)	Poor performance in achieving the required pick-rate, current rate is 113 cartons per hour. … Over the last 5 months, David’s pick-rate has averaged 107 cartons per hour (below the warehouse standard)	* Requirement to improve performance inclusive of increasing pick rate and maintaining the warehouse standard of 115 cartons per hour. …	Counselling – Verbal warning
6 June 2017 (YTD review)	Poor performance in achieving the required pick-rate, current rate is 108 cartons per hour. Improvement required for exceeded time – average of 14 minutes per day/month.	* Requirement to improve pick rate to the warehouse standard of 115 cartons per hour. * Requirement to improve exceeds time to below 10 minutes/ day.	…
10 May 2017 (April monthly review)	Poor performance in achieving the required pick-rate, current rate is 107 cartons per hour. Improvement required for exceeded time – average of 20 minutes per day/month.	* Requirement to improve pick rate to the warehouse standard of 115 cartons per hour. * Requirement to improve exceeds time to below 10 minutes/ day.	…
March/April 2017 (March monthly review)	Poor performance in achieving the required pick-rate, current rate is 99 cartons per hour. Improvement required for exceeded time – average of 11 minutes per day/month.	* Requirement to improve pick rate to the warehouse standard of 115 cartons per hour. * Requirement to improve exceeds time to below 10 minutes/ day.
May 2017 (YTD review)	Pick-rate for 2016 (past year was above standard at 118 cartons per year. Current year average 2017 is below the required standard, current average is 107cartons per hour. Exceeded [time] average for 2016 (past year) is averaged of 12 minutes per day. Current year average 2017 is for exceeded time is 14 minutes per day/month	* Requirement to improve pick rate to the warehouse standard of 115 cartons per hour. * Requirement to improve exceeds time to below 10 minutes/ day.	…

Ongoing Performance Concerns

As discussed in the meeting, the following provides a summary of your performance outcomes for the month of November and other relative [sic] information to the matter.

• Your current pick rate – 98 cartons per hour (each week for the month of November 2017 resulted in outcomes below the required pick-rate)

• Over the past eleven (11) months your pick-rate has averaged 110 cartons per hour which is below the overall expected warehouse standard of 115 cartons per hour.

• The warehouse average pick-rate (exclusive of new starters and temporary labour) equals 130 cartons per hour.

• During normal work activity your performance is below the required pick-rate standard.

• …

You have provided a written statement via Brett Cotterill outlining your reasons why you should not receive a 2^nd written warning for performance related reasons. This has been carefully considered and does not have any new information that has not been previously discussed.

Outcome

Following careful consideration, given that you have not met expectations in relation to performance and that the Company is satisfied that you have been provided adequate training and support to improve in the expectation of the requirement to improve has been communicated to you on numerous occasions, the business has decided to issue you with a 2^nd written & final warning.

This means that:

• a copy of this warning will be placed on your employee file; and

• any further instances of failure to perform your duties to the required standard and/or conduct that is unacceptable or unsatisfactory to Metcash, including but not limited to any breaches of the provisions of the Enterprise Agreement, Company policy and procedures, may result in disciplinary action up to and including the termination of your employment.

Company Expectations and Ongoing Support

You are required to meet all performance levels set by Australian Liquor Marketers …

The Company expects that you demonstrate a conceded [sic] effort to improve your pick-rate performance to equal in and maintain the warehouse pick standard of 115 cartons per hour. The business also expects that you continue to meet the other performance measures which includes the exceeded time and pick error allowances resulting in an exceeded average time of less than ten (10) minutes per day to no more than one (1) mistake per week.” 7 (Underlining added)

[13] Mr Kalweit was issued with a show cause letter at his Employee Performance Review on 5 June 2018. Mr Cotterill attended that meeting as Mr Kalweit’s support person. The show cause letter included the following:

“As you are aware, we have had ongoing concerns that you are not performing the duties of your position of Assembly Storeworker Grade 1 to the standard required by Metcash. More specifically, in relation to your failure to meet required performance standards including achieving the required pick-rate outcome and maintaining high error rates.

The purpose of this letter is to confirm our discussion today where you are notified that you have made insufficient progress toward the expected performance standards and while over the last few months your pick rate has increased, your performance still remains in an unsatisfactory level as your mistake rate has consistently increased.

Specifically, most recently while your pick rate has increased to an average of 116 cartons per hour (which meets the warehouse minimum performance standard) your mistake rate is seven mistakes for the month of May 2018 and nine mistakes for the month of April 2018. As you are aware from our ongoing discussions, this is in excess of the warehouse minimum performance standard for mistakes which is one per week …

The following is a summary of the history to date relating to the documented discussions and disciplinary outcomes for failure to meet the required minimum performance standards over the last 12 months.

Date	Issue	Actions	Outcome
10 May 2018 (April monthly review)	Poor performance by making too many mistakes (nine mistakes over eight days picking in the month of April). Achievement of required pick-rate (116), Exceeded Time (0 min.).	Requirement to reduce mistakes to at all below 1 per week to meet warehouse minimum performance standard.	… David was given further time to improve performance due to only eight days of picking in the month and as David was on his final written warning for performance. A further review to occur next monthly EPR
1 February 2018 (January monthly review)	Poor performance in achieving the required pick-rate, current average for the month is 113 cartons per hour. Exceeded time (average 9 minutes per day), Mistakes (0)	Requirement to improve pick rate to meet warehouse minimum performance standard of an average of 115 cartons per hour.	… Following feedback provided by David in the meeting, Metcash agreed to provide David with a further period of time to meet performance standards.
7 December 2017 (November monthly review)	Poor performance in achieving the required pick-rate, current average for the month is 98 cartons per hour.	Requirement to improve pick rate to meet warehouse minimum performance standard of an average of 115 cartons per hour.	Counselling –2^nd written warning issued on11/1/2018
… (as per second written warning)

…

We would like to provide you with the opportunity to show cause as to why your employment should not be terminated …” 8

[14] Mr Kalweit responded to the show cause letter later that day. In his response he stated among other things that:

“… I was not aware that if I made more than 1 mistake a week it would be rolled into the one basket as far as warnings go. The Company only ever spoke about achieving the pick rate as they wanted me to achieve the 115 cartons per hour. I’ve been here for 10 plus years I don’t believe you would think I would purposely go and make a mistake I am trying to maintain the pick rate you required I have not been given any warnings about mistakes prior to this nor have I been spoken about excessive mistakes up until last month.” 9 (Underlining added)

[15] As previously mentioned, Mr Kalweit was dismissed on 7 June 2018. The termination letter included the following:

“As you are aware, we have had ongoing concerns that you are not performing the duties of your position of Assembly Storeworker Grade 1 at the standard required by Metcash Trading Limited (Metcash).

As discussed with you in our meeting on 5 June 2018 and as set out in our letter dated on the same day, Metcash considers that you continue to perform below our reasonable expectations. In our meeting we explained that, given our ongoing concerns, we were considering terminating your employment. We provided you with the opportunity to show cause as to why your employment should not be terminated.

In our meeting, you were given an opportunity to give us any further information before we made a decision. You were also given the opportunity to provide further information following the meeting. In your response, you advised Metcash, amongst other things that you had been trying to improve your pick rate in you believe that this has contributed to you making mistakes. You also stated you are not aware that if you made more than one mistake per week it would be rolled into the current warnings you had received relating to your performance nor had you been spoken to about making mistakes previously.

While Metcash took this response into account, we do not consider these to be acceptable explanations for your poor performance. We have clearly articulated our expectations in relation to performance standards in our discussions with you about performance over the last 12 months. We had a discussion with you on 10 May 2018 in relation to your unacceptable mistake rate made during April 2018. In addition, it was clearly stated within the second and final warning issued to you on 11 January 2018 that ‘the company expects that you demonstrate a concerted effort to improve your pick-rate performance to equal and maintain the warehouse extended of 115 cartons per hour. The business also expects that you continue to meet the other performance measures which includes the exceeded time and pick error allowances resulting in an exceeded average time of less than ten (10) minutes per day and no more than one (1) mistake per week.’ You were advised that any further instances of failure to perform your duties to the required standard and/or conduct that is unacceptable or unsatisfactory to Metcash, may result in disciplinary action up to and including the termination of your employment.

As a result, we have determined that it is appropriate to terminate your employment with Metcash. Your employment will end today, 7 June 2018 …” 10

The Applicant’s case

[16] Mr Kalweit submitted that his dismissal was unfair for two reasons – there was no valid reason for his dismissal as his performance did not fail to meet the Respondent’s standards and the dismissal was harsh in the circumstances. More particularly, drawing on the decision in Mr Bradley Donald Davidson v Griffiths Muir’s Pty Ltd, 11 Mr Kalweit submitted that the Respondent’s evidence did not reach the threshold necessary to conclude that he was demonstrating an inability to perform his central duties, adding that the evidence demonstrated the opposite. Mr Kalweit also highlighted that he was 55 years of age and at the time of his dismissal had been employed by the Respondent for almost 11 years.

[17] Mr Kalweit further submitted that if he did not meet any part of the Respondent’s performance benchmarks in any given month that the benchmarks were unreasonable for a number reasons, including that a number of employees were not meeting one or more of the performance benchmarks in any given month in 2018, the application of an average was unreasonable as a minimum acceptable standard and the performance standards did not take into consideration factors such as age and fatigue. In this regard, Mr Kalweit, relying on the decision in Selak v Woolworths Ltd, 12 submitted that the application of a policy that was unreasonable would not provide a valid reason for dismissal. Mr Kalweit also posited that he was particularly disadvantaged by the Respondent’s performance benchmarks because among other things he worked the early shift and therefore had to pick and assemble more restaurant orders which were slower to pick and because his pick rate was reduced as he was unable to manually wrap orders due to a medical condition.

[18] With regard to the evidence before the Commission, Mr Kalweit contended among other things that it emerged from Mr Christian’s evidence that there was no objective basis for his dismissal and that the application of the Respondent’s performance standards by Mr Christian was inconsistent and applied unfairly against him.

[19] As to remedy, Mr Kalweit sought reinstatement with full continuity of service and back-pay.

[20] Mr Kalweit provided two witness statements, 13 with his second statement replying to Mr Christian’s witness statement. In those witness statements Mr Kalweit deposed inter alia that:

• his day always started with having to complete restaurant orders which he contended took more time to complete because the orders tended to be smaller, included more wine and fewer items of beer and involved items spread further around the warehouse;

• he was unable to manually wrap pallets due to a prior back injury and therefore needed to use the pallet wrapping machine to wrap each order, adding that he sometimes had to wait five minutes to use the machine;

• the method used by the Respondent to measure performance did not take into account various factors which may slow down a picker such as the number of restaurant orders a picker completes, fatigue, any medical restrictions and time spent waiting for the wrapping machine to become available;

• in June 2017 he complained to the Respondent’s human resources area about Mr Christian unfairly harassing him;

• having reviewed the performance report produced by the Respondent in accordance with a revised Order made by the Commission on 7 September 2018 he observed that:

– his average pick rate for 2017 was 111 cartons per hours and for January–June 2018 was 116 cartons per hour,

– his average exceeds time per day for the period January-June 2018 was 10 minutes per day, and

– between January-June 2018 his mistake rate exceeded the benchmark in April and May only;

• he considered he met the Respondent’s performance benchmarks and did not think his performance was unsatisfactory;

• following his dismissal he found it difficult to meet his financial commitments, though he had obtained some piecemeal casual employment;

• he believed his age would make it difficult for him to obtain further employment in a manual role;

• he did not believe a mistake rate of one per week averaged over a month was reasonable or realistic;

• he did not think it was fair that he was issued with a written warning based on his performance over the period January-May 2017 or to rely on a year-to-date average as a reason to performance manage him;

• he agreed his missed the pick rate benchmark in August 2017, contending that this was mainly because of the stress, anxiety and pressure he was feeling in relation to his performance; and

• he always tried to cooperate with Mr Christian but did think the pick rate was unfair.

[21] Key aspects of Mr Kalweit’s oral evidence included that:

• he wanted to be reinstated inter alia because he felt that what had happened to him was unfair as he was doing the best he could with what he had these days and because he thought he was adequate when compared to everyone else; 14

• he was not the only picker required to pick restaurant orders, complete unfinished orders, wait for forklifts, lift or roll kegs onto pallets and take toilet breaks; 15

• all of those things were also occurring in 2013, 2014 and 2015 and impacted on picking during that time as well as the time to do the job and possibly on mistakes; 16

• the performance standard from November 2015 was 115 cartons per hours; 17

• he was aware that there was a mistake rate standard that he was required to achieve and that each month the mistake rate was taken into account in respect of his performance figures; 18

• at a toolbox meeting on 3 March 2017 it was made clear that performance management was now fully back in operation after having been suspended in January and February 2017 while re-racking of the warehouse was undertaken, with employees also reminded that the performance standards were 115 cartons per hour, 1 or less mistake per week and exceeded time to be below 10 minutes and that any delay time needed to be brought to the attention of management so it could be added to the employee’s metrics; 19

• the verbal warning he received on 7 June 2017 made it clear that he must improve his pick rate to equal and maintain the warehouse standard of 115 cartons per hours and continue to meet the other performance standards in terms of mistakes and exceeded time; 20

• the first written warning he received on 6 July 2017 noted that he must improve his pick rate to equal and maintain the warehouse standard of 115 cartons per hours and continue to meet the other performance standards in terms of mistakes and exceeded time; 21

• the second and final written warning he received on 11 January 2018 similarly noted that the Respondent expected him to demonstrate a concerted effort to improve his pick rate to equal and maintain the warehouse standard of 115 cartons per hours and continue to meet the other performance standards in terms of mistakes and exceeded time; 22

• he did not meet the mistake rate standard in April 2018 because of the pressure he was under to meet the pick rate standard, though he met both the pick and mistake rate standards in February and March 2018; 23

• with regard to his evidence that he missed the pick rate standard in August 2017 because the pressure he was feeling at the time in relation to his performance had increased such that he submitted a complaint that Mr Christian was bullying and harassing him, he acknowledged that he lodged the complaint in June 2017 and managed to perform to the minimum standards in July 2017; 24 and

• he commenced a steady job with Harvey Norman Commercial in early-mid August 2018 and was working 7-8 hours a day, 4-5 days each week earning $27 per hour which was what he was paid when employed by the Respondent. 25

[22] In his witness statement Mr D’Aquino deposed among other things that:

• he had worked as a picker at the Respondent’s Fyshwick warehouse for just over three years, i.e. from June 2015 to July 2018 when he resigned, during which he was a workplace delate with the NUW;

• factors which would reduce a picker’s pick-rate which were not tracked by the Respondent when reviewing performance against the performance benchmarks included the number of restaurant orders and unfinished orders from the previous shift completed by pickers, pickers becoming fatigued, and the time spent by pickers waiting for an item to be restocked by a forklift or to use the pallet wrapping machine;

• restaurant orders were particularly slow to pick compared to other orders, adding that in his experience a restaurant order could not be picked in accordance with the pick-rate benchmark of 115 cartons/hour;

• those pickers who started work at 5.00 am did more restaurant orders than those who commenced at 6.00am because the warehouse picking system assigned restaurant orders to be picked first each day; and

• employees and the NUW raised concerns with the Respondent about the unfair pressure placed on pickers and the risk to health and safety caused by the Respondent’s performance benchmarks. 26

[23] Mr Cotterill in his witness statement 27 provided a chronology of a dispute between the NUW and the Respondent regarding “the revised pick-rate benchmarks and the manner in which they were introduced.”28 The dispute was the subject of a separate application to the Commission made under s.739 of the Act. However, as the disputes procedure in the relevant enterprise agreement29 only provided for conciliation, the dispute was not resolved prior to the Respondent advising the Commission that it no longer consented to conciliation.

The Respondent’s case

[24] In summary, the Respondent submitted that the evidence before the Commission demonstrated that there was a valid reason for Mr Kalweit’s dismissal and that the dismissal was not otherwise harsh, unjust or unreasonable. As such, the Respondent submitted that Mr Kalweit’s application should be dismissed. (The Respondent’s submissions are set out in greater detail below when considering the criteria set out in s.387 of the Act).

[25] As to remedy, the Respondent submitted that reinstatement was inappropriate in all the circumstances and to the extent the Commission considered it reasonable to order compensation that any compensation should be minimal. In support of its submissions regarding reinstatement, the Respondent relied on the decision in Andrew Hinchen v Moonee Valley Racing Club Inc T/A Moonee Valley Racing Club, 30contending inter alia that the Commission could not be satisfied that the relationship of trust and confidence could be restored to make the relationship viable and productive or that Mr Kalweit would be able to consistently perform to the required standard. The Respondent also submitted that the Commission should be cognisant that Mr Kalweit’s termination payment included an amount of over $17,000 to payout his personal/carer’s leave and that this amount would need to be returned so that Mr Kalweit’s personal/carer’s leave balance could be reinstated. As to the issue of compensation, the Respondent submitted that even if Mr Kalweit had been given a further warning he would not have performed to the required standard for a period of six months and highlighted Mr Kalweit’s evidence that he had secured a steady job.

[26] In his witness statement 31 Mr Christian canvassed a number of issues including the layout of the Respondent’s Fyshwick warehouse, how orders are picked at the warehouse, the introduction of formal performance metrics, the Respondent’s performance management process, Mr Kalweit’s performance from 2016 until his dismissal and his relationship with Mr Kalweit. Mr Christian also responded to the witness statements of Messrs Kalweit, D’Aquino and Cotterill, disagreeing with several aspects of their respective statements. For instance, in respect of Mr Kalweit’s statement Mr Christian deposed inter alia that:

• completing an unfinished order did not lead to a longer picking time;

• had there been significant delays in Mr Kalweit waiting for the wrapping machine he would have expected those delays to have been reflected in higher exceeded time metrics for Mr Kalweit; and

• it was not correct for Mr Kalweit to state that the warning he received in January 2018 was for failing to meet the pick rate benchmark in 2017 as the warning reflected ongoing performance concerns and was specifically in relation to Mr Kalweit’s performance in November 2017.

[27] Key aspects of Mr Christian’s witness statements included that:

• in setting the pick rate performance standard he reviewed the previous two and a half years average monthly pick rate data for the Fyshwick warehouse (i.e. for the period March 2013 and July 2015), with that data showing that the average monthly pick rate for 2013 was 116 cartons per hour and 115 cartons per hour for 2014;

• this necessarily included contemplation of a number of factors such as the pick rate for each employee over that period, noting that the group included 10 employees who were older than Mr Kalweit;

• he decided that it was appropriate to set a pick rate standard of an average of 115 cartons per hour over a month, adding that he considered it appropriate to average the target over a month so that employees would not be disadvantaged by the nature of the orders they had to pick on any one day;

• adherence to the pick rate standard by employees was important because it enabled the Respondent to appropriately determine the allocation of work and staffing levels;

• in setting the mistake rate standard he had regard to a number of factors, including material published by Vocollect (the provider of workflow performance technology) that the mistake rate when using the voice picking system in use at the Fyshwick warehouse should be only 0.01 per cent of picks or less, the need for high customer satisfaction and setting a rate that was not too unrealistic;

• he considered an expectation that employees make no more than one mistake per week averaged over a month was reasonable;

• as to the exceeded time standard he decided it should be less than 10 minutes per day averaged over a month having regard to a number of factors, including that any more than 10 minutes per day would be getting close to giving employees another full break per day;

• while each performance metric was important, the exceeded time target was less of a focus than the other two metrics because exceeded time could often be caused by factors including pickers forgetting to sign off before moving to another job or employees stopping work early before leaving for the day;

• employees were required to meet each of the metrics each month and a failure to meet any one or more of the metrics in any month could lead to a performance discussion with disciplinary consequences;

• if an employee had not met one or more of the performance requirements over a month he would meet with the employee to talk through the area(s) of concern and seek any feedback from the employee as to why they had not met the metric(s);

• ATR’s would often be performed to identify any obvious signs of an employee not following the preferred method of picking;

• if an employee’s performance continued to fall below the performance standards the employee would be counselled and given warnings in accordance with the enterprise agreement, adding that if the employee’s performance still did not improve the employee would then be issued with a show cause notice and asked why their employment should not be terminated;

• with regard to Mr Kalweit’s performance:

– his performance during 2016 was varied, highlighting that Mr Kalweit failed to meet the pick rate in April, June, September and October 2016 and that consistent with his usual practice he raised concerns with Mr Kalweit regarding the months where he did not meet the performance metrics,

– his pick rate in March and April 2017 was 99 and 107 cartons per hour respectively while his exceeded time was 11 minutes and 20 minutes per day respectively, adding that he met with Mr Kalweit on 10 May 2017 to discuss his concerns regarding his performance and that during that meeting he compared Mr Kalweit’s overall performance from 2016 (average monthly pick rate of 118 cartons per hour and exceeded time of 12 minutes per day) with his year-to-date performance for 2017 which had dropped against both of these metrics,

– his pick rate for May 2017 was 113 cartons per hour and his exceeded time was 11 minutes per day, adding that he issued Mr Kalweit with a verbal warning at the end of their employee performance review meeting on 7 June 2017 which had been convened to discuss Mr Kalweit’s unsatisfactory performance,

– on 17 June 2017 Mr Kalweit underwent an ATR which identified that he needed to improve his manual handling,

– his pick rate for June 2017 was 111 cartons per hour and his exceeded time was 11 minutes per day, adding that he met with Mr Kalweit on 6 July 2017 to discuss his unsatisfactory performance with Mr Kalweit issued with a first written warning at the end of that meeting,

– on 10 July 2017 Mr Kalweit underwent another ATR which demonstrated that he was capable of meeting the performance standards and did not require any further training,

– his pick rate for July 2017 was 116 cartons per hour and his exceeded time was 10 minutes per day (i.e. Mr Kalweit met or exceeded the required performance standards),

– his pick rate for August 2017 was 113 cartons per hour and his exceeded time was 10 minutes per day, adding that he met with Mr Kalweit on 5 September 2017 to discuss his unsatisfactory performance and that as Mr Kalweit had at the time complained about his [Mr Christian’s] conduct in managing his performance Mr Kalweit had been given a six-week “grace period” with respect to his performance,

– his performance for September and October 2017 met or exceeded the performance metrics with the exception of exceeded time in October,

– his pick rate for November 2017 was 98 cartons per hour, adding that he met with Mr Kalweit on 7 December 2017 to discuss his unsatisfactory performance and at that meeting advised him that he was considering issuing him with a second and final written warning with the meeting adjourned to give Mr Kalweit time to consider his response to this proposal,

– he subsequently decided it was appropriate to issue a second and final warning having considered Mr Kalweit’s response and the submissions made by Mr Cotterill on Mr Kalweit’s behalf, with the warning given to Mr Kalweit on 11 January 2018 when the meeting reconvened (Mr Kalweit was absent on personal leave for the period 8 December 2017 to 4 January 2018),

– his pick rate for January 2018 was 113 cartons per hour and his exceeded time was 18 minutes per day, adding that he met with Mr Kalweit on 1 February 2018 to discuss his unsatisfactory performance and indicated that given his long history of poor performance the Respondent was considering the termination of his employment

– in response to a suggestion made by Mr Cotterill (Mr Kalweit’s support person) at the meeting of 1 February 2018 he determined that it would be appropriate to give Mr Kalweit a further opportunity to meet the performance standards,

– his performance for the months of February and March 2018 met or exceeded the performance metrics with the exception of exceeded time in February 2018,

– his pick rate in April 2018 was 122 cartons per hour and his exceeded time was 10 minutes per day though his mistake rate had increased to nine mistakes,

– the fact that there had been a significant increase in Mr Kalweit’s mistake rate caused him concern because it appeared to indicate that he could not increase his pick rate without making further mistakes and as such the higher pick rate was effectively meaningless,

– his pick rate in May 2018 was 116 cartons per hour however his mistake rate was seven mistakes over the month and his exceeded time was 11 minutes per day,

– he met with Mr Kalweit on 5 June 2018 to discuss his unsatisfactory performance in May 2018, adding that at the conclusion of that meeting he handed Mr Kalweit a show cause letter as to why his employment should not be terminated,

– he did not accept Mr Kalweit’s response of 6 June 2018 to the show cause letter which stated that he did not know that his mistake rate would be relevant to the Respondent’s continued assessment of his performance because each of the written warnings provided to him stated that he was required to improve his pick rate and continue to meet the other performance measures,

– he had regard to Mr Kalweit’s age, length of service and employment prospects when considering whether or not to terminate his employment and weighed those considerations against a number of factors, including that Mr Kalweit had been afforded a far longer period to improve his performance than other employees in similar circumstances because of his length of service, that Mr Kalweit had demonstrated a failure to perform consistently at the required minimum standard and that there was very little prospect of Mr Kalweit’s performance improving to a consistently acceptable standard, and

– against that background he determined it was necessary and appropriate to terminate Mr Kalweit’s employment; and

• it was clear to him at the end of the performance management process that Mr Kalweit was not willing to accept that he should be held to account for his performance, had failed to acknowledge or accept the need for him to improve his performance, was not willing to take steps to improve his performance or commit to performing at the requisite standard and had repeatedly acted in an uncooperative manner during the performance meetings as evidenced in his notes.

[28] In his oral evidence Mr Christian rebutted a number of aspects of Mr Kalweit’s second witness statement. Among other things Mr Christian was extensively cross examined regarding the performance metrics which applied at the Respondent’s Fyshwick warehouse and Mr Kalweit’s performance against them. Key aspects of Mr Christian’s evidence in that regard included that:

• in terms of the hierarchy of performance standards the most important standard was the pick rate followed by mistakes and then exceeded time; 32

• he exercised some discretion in relation to the exceeded time performance standard, attesting that he would not be sacking people if they had isolated instances of exceeded time of 11 minutes per day here and there; 33

• exceeded time did not form part of the basis of Mr Kalweit’s termination; 34

• the verbal warning given to Mr Kalweit in June 2017 was about his pick rate; 35

• the purpose of performance management was to improve performance; 36

• the written warning issued to Mr Kalweit on 6 July 2017 was about his pick rate; 37

• Mr Kalweit’s performance improved after he received each of the two written warnings issued to him; 38

• just as had occurred following the first written warning issued to Mr Kalweit, following the second warning issued to him there was an improvement in his pick rate and the maintenance of his performance against the other performance measures; 39

• Mr Kalweit’s pick rate following the second warning issued to him in January 2018 was 119 cartons per hour in February 2018, 116 cartons per hour in March 2018 and 122 cartons per hour in April 2018; 40

• with regard to May 2018 Mr Kalweit again exceeded the pick rate standard whilst his exceeded time was 11 minutes per day though he had a total of seven mistakes, four of which occurred in week five of that month; 41

• it was unusual for Mr Kalweit to have four mistakes in a week; 42

• he was unable to identify any employee who had been terminated in circumstances where they were a good picker who had not met the mistake rate standard for two consecutive months, adding that Mr Kalweit did not fall into this category as he had been dismissed on the basis that he had not performed to the standard required which included mistakes; 43

• in week four of May 2018 Mr Kalweit had a pick rate of 127 cartons per hour with a mistake rate of one; 44

• at the time Mr Kalweit was dismissed he was performing to the standard for the pick rate, his exceeded time was within a range that demonstrated he was doing his job as he was contracted to do and his mistake rate over the period 2017/2018 was one of the best in the warehouse despite slipping in April and May 2018; 45

• he disagreed that none of the objective information before him at the time of Mr Kalweit’s termination suggested that Mr Kalweit was not able to perform his job as required by the Respondent, contending that the information showed him that Mr Kalweit’s performance was continuing to vary up and down and that there was going to be an ongoing issue with Mr Kalweit’s performance going forward; 46

• Mr Kalweit was a reasonable employee that would do his work when required but when allocated tasks that he did not agree with became argumentative and aggressive and did not want to follow normal instructions but rather just wanted to be left alone to do what he wanted to do regardless of what the process and policies were, acknowledging that this was a source of frustration for him [Mr Christian]; 47

• these factors were not a consideration in the performance management process, adding that his actions were based on Mr Kalweit’s performance rather than his personality; 48

• an employee meeting the pick rate but not meeting the mistake rate performance standard would most definitely be a ground to commence performance action; 49 and

• with regard to another employee who had a run of six months in 2018 in which their mistake rate was above the standard, that employee had received a first written warning regarding some of those mistakes though the Respondent had also taken into consideration some personal circumstances which had impacted the employee. 50

[29] As to remedy, Mr Christian attested that were Mr Kalweit to be reinstated he would find it very difficult to manage Mr Kalweit as he had failed to perform consistently at the required level, had never accepted the idea that he had to perform to the standards that had been put in place and because he would not apply himself correctly to the role to do the job. 51

The Statutory framework

[30] The Commission exercises its discretion in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. In this case there is no contest that Mr Kalweit is a person who was protected from unfair dismissal pursuant to s.382 of the Act. In the context of this matter, the relevant provisions of the Act are ss.385 and 387 which provide as follows:

“385 What is an unfair dismissal

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

(a) the person has been dismissed; and

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

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

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

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, 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 FWC considers relevant.”

[31] There is no dispute that Mr Kalweit was dismissed, so s.385(a) of the Act is satisfied. Mr Kalweit contended that his termination was harsh, unjust or unreasonable, so s.385(b) is relevant. The Respondent is not a small business employer therefore s.385(c) is not relevant. The termination was not a case of redundancy so s.385(d) does not apply. Therefore, in determining whether Mr Kalweit was unfairly dismissed, I must consider whether his dismissal was harsh, unjust or unreasonable as per s.385(b).

Was the dismissal harsh, unjust or unreasonable?

(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)

[32] In Rode v Burwood Mitsubishi (Rode) 52a Full Bench of the then Australian Industrial Relations Commission (AIRC) canvassed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996 (Cth) citing Selvachandran v Peteron Plastics Pty Ltd53. The following is an extract from the Full Bench’s decision in Rode.

“[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:

‘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 wellfounded; a valid reason’.

In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. 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, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.’

[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).

[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” (Underlining added)

[33] In short, Mr Kalweit contended that there was no valid reason for his dismissal for the following reasons:

(a) his performance did not fail to meet the Respondent’s standards;

(b) if he did not meet any of the Respondent’s performance benchmarks in any given month it was because the benchmarks were unreasonable; and

(c) he was particularly disadvantaged because he had to pick and assemble more restaurant orders and was unable to manually wrap orders which reduced his pick rate.

[34] The Respondent, on the other hand, submitted that there was a valid reason for Mr Kalweit’s dismissal. More particularly, the Respondent highlighted the following in its submissions:

• its performance expectations were clearly communicated to Mr Kalweit, those expectations were not unreasonable and it endeavoured to assist Mr Kalweit to meet those expectations;

• each of the performance metrics, and most particularly the pick and mistake rate metrics, could not be considered in isolation;

• the pick rate and mistake rate were reasonable for a number of reasons, including the basis on which the metrics were set, Mr Kalweit’s ability to exceed those metrics during ATR’s and Mr Kalweit’s ability to improve his performance to a standard that met the metrics for a period after he had received a warning;

• Mr Kalweit was dismissed because of his inability to perform to the minimum required standard on a consistent basis, particularly with respect to the pick and mistake rate metrics;

• Mr Kalweit was not dismissed having regard to his failure to meet the minimum mistake rate metric in April and May 2018;

• Mr Kalweit failed to meet the performance standards in a number of months in 2017;

• all but two employees commenced work at 5:00 am (when Mr Kalweit commenced work), meaning that restaurant orders were spread among Mr Kalweit and these employees;

• the Commission should not accept Mr Kalweit’s evidence that he did not meet the pick rate standard in August and November 2017 because he was stressed and anxious about the pressure he was under;

• Mr Kalweit’s performance improved following his Employee Performance Review meeting on 1 February 2018 at which he was informed that the Respondent was considering terminating his employment such that he met the pick and mistake rate standards in both February and March 2018, adding that as a result the reason given by Mr Kalweit for his excessive mistakes in April and May 2018 (i.e. pressure to improve his pick rate) was not credible; and

• there were a number of other employees who were being performance managed as a result of their failure to meet the minimum performance standards, with two other employees terminated for underperformance.

[35] An examination of the data regarding Mr Kalweit’s performance over the period March 2017 to June 2018 when he was dismissed (January and February 2017 are excluded because performance management was suspended during this period while re-racking of the Fyshwick warehouse was undertaken) indicates that:

• Mr Kalweit failed to meet one or more of the performance metrics in thirteen of the fifteen months over the period March 2017 to May 2018, i.e. he met all three performance metrics in two of those fifteen months (September 2017 and March 2018) 54

– if the exceeded time metric is not considered, over the same period Mr Kalweit failed to meet either the pick rate or mistake rate performance metric in nine of the fifteen months; 55

• over the period January to May 2018 Mr Kalweit met the pick rate standard in each month but January 2018, the mistake rate standard in January to March 2018 and the exceeded time standard in January and March 2018; 56

• Mr Kalweit met the pick rate standard in eight of the fifteen months over the period March 2017 to May 2018, with four of those eight months being in 2018; 57

• Mr Kalweit failed to meet the mistake rate standard in two of the fifteen months over the period March 2017 to May 2018, with those months being April and May 2018; 58

• Mr Kalweit failed to meet the mistake rate standard in two of the eight months where he met or exceeded the pick rate standard; 59

• Mr Kalweit met the exceeded time standard in two of the fifteen months over the period March 2017 to May 2018, with those months being September 2017 and March 2018; 60

• his average pick rate improved in 2018 (average of 118 cartons per hour) when compared to 2017 (average of 111 cartons per hour); 61

• his monthly average mistake rate had increased in 2018 (average of five mistakes per month) when compared to 2017 (average of three mistakes per month), while his number of mistakes in 2018 (January-May) totalled 23 compared to 24 in 2017; 62

• his monthly daily average exceeded time fell from 13 minutes in 2017 to 10 minutes in 2018, i.e. his performance against this metric had improved but was still above the required standard; 63

• in respect of the pick rate yearly average:

– in 2018 there were 10 employees with an average lower than Mr Kalweit (five of those employees no longer work for the Respondent, with two of those five employees having been dismissed), there were 19 employees with an average higher than Mr Kalweit and one employee had an average equal to Mr Kalweit’s,

– in 2017 there were seven employees with an average lower than Mr Kalweit, 24 with an average higher than Mr Kalweit and two employees with an average equal to Mr Kalweit’s;

• similarly in respect of mistakes:

– in 2018 there were seven employees (three of whom no longer work for the Respondent, with two of those employees dismissed) with more total mistakes than Mr Kalweit and 22 employees with less total mistakes than Mr Kalweit, while on a monthly average basis, there were six employees with more mistakes than Mr Kalweit, 22 employees with less mistakes than Mr Kalweit and one employee with the same number of average mistakes per month,

– in 2017 there were nine employees with more total mistakes than Mr Kalweit, 24 with less total mistakes than Mr Kalweit and two employees with the same number of total mistakes, while on a monthly average basis there were no employees with more mistakes on average, 11 with less mistakes on average and eight with an equal number of mistakes on average;

• as to exceeded time:

– in 2018 there were 21 employees (including two employees who were dismissed) with an exceeded time average above Mr Kalweit’s, three with an exceeded time average lower than Mr Kalweit’s and three with the same exceeded time average as Mr Kalweit’s

– in 2017 there were 25 employees with an exceeded time average higher than Mr Kalweit’s, three employees with an exceeded time average lower than Mr Kalweit’s and two with the same exceeded time average as Mr Kalweit’s; and

• Mr Kalweit’s performance in 2016 was assessed in the following terms:

“David Kalweit’s pick rate for the past year of 2016 is 118 which is above the required Standard of 115 ctns/hr and is a good result. Your ATR results show you are capable of picking safely at the required standard. Your exceeded time for the past year is currently a total of 9:25 (Hours & Minutes) which averages to 12 minutes per day per month, this must be reduced to below 10 minutes per day. Your mistakes for this past year totals 34, or an average of 3 per month, this is a good result.” 64 (Emphasis as per original)

[36] An analysis of the above information indicates that while Mr Kalweit’s performance improved in 2018 relative to 2017, he failed to meet either the pick rate or mistake rate standard in three of the five months he worked in 2018. This occurred in circumstances where he failed to achieve the pick rate standard in six of the ten months over the period March to December 2017. In other words, the material before the Commission points to there being ongoing issues with Mr Kalweit’s performance over an extended period of 15 months (i.e. March 2017 to May 2018). These ongoing performance issues support a finding that there was a valid reason for Mr Kalweit’s dismissal.

[37] Other key aspects of the evidence before the Commission include:

• Mr Christian’s oral evidence that at the time he was dismissed Mr Kalweit was performing to the standard for the pick rate, his exceeded time was within a range that demonstrated he was doing his job as he was contracted to do and his mistake rate over the period 2017/2018 was one of the best in the warehouse despite slipping in April and May 2018; 65

• all of the warnings issued to Mr Kalweit (i.e. the verbal and two written warnings) made it clear that he must “… improve his pick rate performance to equal and maintain the warehouse pick standard of 115ctns/hour” and “… continue to meet the other performance measures of exceeded time and mistakes as well” (see paragraphs [8], [10] and [12] above), with Mr Kalweit acknowledging this in his oral evidence; 66

• Mr Christian’s oral evidence that Mr Kalweit had not been dismissed because he did not meet the mistake rate standard for two consecutive months but because he had not performed to the standard required which included mistakes; 67

• Mr Christian’s oral evidence that an employee meeting the pick rate but not meeting the mistake rate performance standard would most definitely be a ground to commence performance action; 68

• Mr Kalweit’s response to the show cause letter in which he highlighted among other things that he not been given any warnings about mistake rate prior to being issued with the show cause letter and that he had not been spoken to about excessive mistakes until May 2018; 69 and

• Mr Kalweit’s oral evidence that he was aware that there was a mistake rate standard that he was required to achieve and that each month the mistake rate was taken into account in respect of his performance figures. 70

[38] While it is true that Mr Kalweit was not warned in respect of his failure to meet the mistake rate standard, I note that this was because over the period March 2017 until his dismissal in June 2018 he only failed to meet this benchmark in April and May 2018. Further, I note that the issue of Mr Kalweit’s mistake rate was raised with him as part of his Employee Performance Review for April 2018 which was held on 10 May 2018. The record of that meeting includes the following (the second paragraph below is Mr Christian’s handwritten annotation):

“Evaluation: David Kalweit’s pick rate is ABOVE the required Standard of 115 ctns/hr. His current pick rate is 112 ctns/hr, Great work … His exceeded time is currently a total of 0:10 for the month which averages to 10 minutes per day, this result needs improving, MUST be below 10 min/day. His mistakes totalled 9, this is a UNEXCEPTABLE [sic] RESULT and needs to be rectified …

10/5/18 @ 12:00 – 12:03 pm.

David has had 9 mistakes for the month of April 2108. This is not normal for David. As David is on a final written warning for performance and this result could result in dismisal [sic]. We have discided [sic] to give David a chance to show this is a one off. and as he has only picked for 8 days last month. David needs to reduce his mistakes.” 71 (as per original).

[39] The abovementioned other key aspects of the evidence before the Commission do not contradict the above finding that there was a valid reason for Mr Kalweit’s dismissal. If anything, the feedback provided to Mr Kalweit as part of his Employee Performance Review for April 2018 should have made it clear to him that any further failure to meet the mistake rate performance standard would result in his dismissal.

[40] As to Mr Kalweit’s contentions that the Respondent’s performance benchmarks were unreasonable and he was particularly disadvantaged because he had to pick and assemble more restaurant orders and was unable to manually wrap orders which reduced his pick rate, Mr Kalweit provided no probative evidence to substantiate either contention. For example, Mr Kalweit produced no evidence to substantiate his contention that he was required to complete more restaurant orders than other employees. Also relevant in this regard is Mr Kalweit’s oral evidence that he was not the only picker required to pick restaurant orders, complete unfinished orders, wait for forklifts, lift or roll kegs onto pallets and take toilet breaks. 72 While I note that the issue of the performance benchmarks has been contentious since their implementation in 2015 (including being the subject of an application made under s.739 of the Act), this of itself does not make them unreasonable. Against that background, I am not satisfied that Mr Kalweit’s contentions that the performance benchmarks were unreasonable or that he was particularly disadvantaged have been made out.

[41] Having regard to all the material before the Commission supports a finding that there was a valid reason for Mr Kalweit’s dismissal based on his performance. Further, drawing on the language in Rode, I am satisfied that the reason for Mr Kalweit’s dismissal was defensible or justifiable on an objective analysis of the material before the Commission and that it was not “capricious, fanciful, spiteful or prejudiced”.

(b) Whether the person was notified of that reason

[42] It was not disputed that Mr Kalweit had been notified of the reason for his dismissal. I therefore consider this criterion to be a neutral consideration in this case.

(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[43] It was not disputed that Mr Kalweit had been given an opportunity to respond to reason for his dismissal. As previously noted, Mr Kalweit was provided an opportunity to respond to the show cause letter of 5 June 2018 (see paragraph [13] above) with his response taken into consideration by the Respondent in deciding to terminate his employment. As such, I consider this criterion to be a neutral consideration in this case.

(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

[44] As previously noted Mr Cotterill attended the show cause meeting of 5 June 2018 as Mr Kalweit’s support person. I therefore consider this criterion to be a neutral consideration.

(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[45] It was not disputed that Mr Kalweit had been warned of his unsatisfactory performance prior to his dismissal. Indeed it is clear from the material before the Commission that Mr Kalweit was warned about his performance on a number of occasions in 2017 and 2018. Accordingly, I do not consider this criterion to be relevant in this case.

(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

(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

[46] The Respondent’s 2018 Annual Report states that in 2018 it had 6,378 full-time equivalent employees. 73 Against that background, I consider these criteria to be neutral considerations in this case.

(h) Any other matters that FWC considers relevant

[47] Mr Kalweit submitted that his dismissal was harsh, unjust or unreasonable for the following reasons:

(a) his almost 11 years of service;

(b) his performance in 2016 met the Respondent’s performance standards and was described as “good” in respect of his mistake rate and exceeded time;

(d) he had been unfairly treated as his treatment was inconsistent with other employees as the Respondent terminated his employment in circumstances where his performance improved following performance management; and

(e) the fact that he was 55 years of age and his particular circumstances meant that he would find it difficult to find new permanent employment.

[48] The Respondent contended in respect of this criterion that the decision to terminate Mr Kalweit’s employment was not otherwise harsh, unjust or unreasonable. Specifically, the Respondent submitted that it considered that there were no further steps which could be taken to assist Mr Kalweit to improve his performance to a consistent standard and that any continuation of the process would be futile. In addition, the Respondent contended that Mr Kalweit’s dismissal was the appropriate outcome having regard to:

(a) Mr Kalweit’s attitude during the process and his failure to meet the minimum performance metrics on a consistent basis;

(b) the a number of opportunities over a period of more than 12 months which were given to Mr Kalweit to improve his performance to a level at which he was consistently meeting the minimum performance metrics; and

[49] With regard to Mr Kalweit’s contention that his was treatment was inconsistent with the treatment of other employees, material produced by the Respondent in accordance with an Order issued by the Commission on 20 November 2018 indicates that six other employees were counselled regarding performance issues while two casual employees had their employment terminated as a result poor performance over the period 1 January 2017 to 7 June 2018. 74 More particularly, an analysis of that material indicates that:

• Employee number 2167669 received a verbal warning on 7 June 2017 regarding his failure to meet the pick rate and exceeded time benchmarks – the employee had failed to reach the pick rate standard in March and May 2017 (February 2017 was excluded as performance management process was suspended while re-racking of the Fyshwick warehouse was undertaken) and he failed to meet the exceeded time benchmark in March, April and May 2017. While the employee’s average pick rate for 2017 was 117 cartons per hour, he subsequently failed to meet the pick rate performance standard in October and November 2017. The employee met the pick rate performance standard throughout 2018.

• Employee number 2167672 received a verbal warning on 6 April 2018 and a first written warning on 5 June 2018 regarding his high mistake rate. This employee’s mistake rate was above the required number in each month over the period December 2017 to May 2018 (i.e. six consecutive months). Mr Christian’s evidence was that the Respondent had taken into consideration some personal circumstances which had impacted the employee. 75

• Employee number 2167679 received a verbal warning on 4 January 2017, a first written warning on 3 March 2017 and a final written warning on 7 June 2017 regarding his high mistake rate and/or failure to meet the pick rate standard. It appears that the employee ceased working for the Respondent sometime in June 2017.

• Employee number 2167681 received a verbal warning on 14 December 2017 and a first written warning on 12 January 2018 for a failure to meet the pick rate standard. The employee failed to meet the pick rate standard in March, May, August, November and December 2017 (January and February 2017 were excluded for the reasons outlined above) and January 2018 but has since met the pick rate performance standard.

• Employee number 2167685 received a verbal warning on 4 January 2017 and a first written warning on 3 March 2017 for a failure to meet the pick rate standard and his high mistake rate. It appears that the employee ceased working for the Respondent sometime in April 2017.

• Employee number 2167687 received a verbal warning on 9 June 2017 for his failure to meet each of the Respondent’s performance benchmarks. The employee failed to meet the pick rate standard in May 2017 only, while he failed to meet the mistake rate standard in March-May, July, October and November 2017 and January 2018 and his exceeded time was above the required standard throughout 2017. It appears that the employee ceased working for the Respondent sometime in February 2018.

• Employee numbers 2167045 and 2167046 both had their casual employment terminated by the Respondent on 28 February 2018 for failing to meet the pick rate standard throughout their period of employment with the Respondent (Employee number 2167045 commenced with the Respondent in October 2017 while Employee number 2167046 commenced in September 2017).

[50] The above analysis does not support Mr Kalweit’s contention, with Employee number 2167669 having met the pick rate standard in all but two of the twelve months after he received a verbal warning and Employee number 2167681 having consistently met the pick rate standard in the months after he was given a first written warning in January 2018. As to Employee number 2167672, Mr Christian’s evidence was that there were some extenuating personal circumstances in that case. Finally, I note that the other employees are all no longer working for the Respondent.

[51] While I accept that Mr Kalweit’s 11 years of service with the Respondent is a relevant consideration, his lengthy service is counterbalanced by a number of factors. Firstly, it would be reasonable to expect an employee with that level of experience would in the absence of any mitigating circumstances/considerations be able to consistently meet the Respondent’s required performance standards. Further, and more relevant in this case, is the fact that Mr Kalweit’s performance did not meet one or more of the Respondent’s required standards for much of 2017 and 2018.

[52] While I accept that Mr Kalweit’s age (55 years old) may be a barrier to him finding alternative employment, this does not appear to have been the case. Mr Kalweit’s evidence was that he had found a steady job in August 2018 working 7-8 hours a day, 4-5 days each week earning $27 per hour which is what he was paid when employed by the Respondent. 76

[53] Against that background, I do not consider that there are any other factors that are relevant in this matter.

Conclusion

[54] Drawing on the above analysis, I find that there was a valid reason for Mr Kalweit’s dismissal and that the remaining criteria in s.387 of the Act are either neutral considerations or not relevant in this case.

[55] The leading statement of principle regarding the meaning of the expression “harsh, unjust or unreasonable” is the statement in the judgment of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd (Byrne) 77:

“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.” (Underlining added)

[56] Drawing on the language in Byrne, the material before the Commission does not support a finding that Mr Kalweit’s dismissal was harsh because of the consequences for his personal circumstances. Further, in circumstances where there was a valid reason for Mr Kalweit’s dismissal and Mr Kalweit was over an extended period not only advised of the areas where his performance needed to improve but also provided a number of opportunities to improve his performance yet he was still unable to consistently meet the Respondent’s performance standards, I do not consider that his dismissal was either unjust or unreasonable.

[57] Against that background, and having considered all of the criteria in s.387 of the Act, I find that Mr Kalweit’s dismissal was not harsh, unjust or unreasonable. Accordingly, his application is dismissed. An order to that effect will be issued in conjunction with this decision.

Appearances:

J. Ronald of Counsel for the Applicant.

P. McNulty for the Respondent.

Hearing details:

Canberra.

2018

November 16 and 23.

Applicant’s written closing submissions and submissions in reply received on 4 and 21 December 2018 respectively.

Respondent’s written closing submissions received on 17 December 2018.

Printed by authority of the Commonwealth Government Printer

1 Exhibit 6 at Annexure PC-12

2 Ibid

3 Ibid

4 Ibid at Annexure PC-13

5 Ibid at Annexure PC-14

6 Ibid

7 Ibid at Annexure PC-26

8 Ibid at Annexure PC-30

9 Ibid at Annexure PC-31

10 Ibid at Annexure PC-32

11 [2010] FWA 4342

12 (2008) 171 IR 267

13 Exhibits 3 and 4

14 Transcript at PN171

15 Ibid at PN186-190

16 Ibid at PN191-199

17 Ibid at PN200

18 Ibid at PN203-205

19 Ibid at PN206-225 and PN306

20 Ibid at PN246-249

21 Ibid at PN254-260

22 Ibid at PN261-268

23 Ibid at PN275-288

24 Ibid at PN334-354

25 Ibid at PN356-379

26 Exhibit 2

27 Exhibit 1

28 Ibid at Annexure BJC-2

29 The Australian Liquor Marketers Pty Ltd Enterprise Agreement Canberra Warehouse 2015 AE414893

30 [2016] FWC 4914

31 Exhibit 6

32 Transcript at PN557 and PN637

33 Ibid at PN563-566

34 Ibid at PN637

35 Ibid at PN677-682

36 Ibid at PN815

37 Ibid at PN828

38 Ibid at PN879

39 Ibid at PN893

40 Ibid at PN919

41 Ibid at PN957-959

42 Ibid at PN961

43 Ibid at PN1017-1018

44 Ibid at PN1060

45 Ibid at PN1076-1078

46 Ibid at PN1079

47 Ibid at PN1096-1097

48 Ibid at PN1098

49 Ibid at PN1117

50 Ibid at PN1130-1135

51 Ibid at PN486

52 Print R4471

53 (1995) 62 IR 371

54 Respondent’s Closing Submissions at Attachment A

55 Ibid

56 Ibid

57 Ibid

58 Ibid

59 Ibid

60 Ibid

61 Exhibit 7

62 Ibid

63 Ibid

64 Exhibit 6 at Annexure PC-10

65 Ibid at PN1076-1078

66 Ibid at PN254-268 and PN275-288

67 Ibid at PN1017-1018

68 Ibid at PN1117

69 Exhibit 6 at Annexure PC-31

70 Ibid at PN203-205

71 Exhibit 6 at Annexure PC-29

72 Ibid at PN186-190

73 Exhibit 8

75 Ibid at PN1130-1135

76 Ibid at PN356-379

77 (1995) 185 CLR 410 at p 465-6

David Kalweit v Metcash Trading Limited T/A Australian Liquor Marketers

[2019] FWC 3152

13 MAY 2019

DECISION

Was the dismissal harsh, unjust or unreasonable?

(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)