Donald Alfred Eadie v Mediterranean Management Pty Ltd
[2010] FWA 6392
•24 AUGUST 2010
[2010] FWA 6392 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Donald Alfred Eadie
v
Mediterranean Management Pty Ltd
(U2009/14211)
COMMISSIONER SIMPSON | BRISBANE, 24 AUGUST 2010 |
Application for unfair dismissal remedy - failure to follow lawful direction - warnings issued - application dismissed.
[1] This is an application by Donald Alfred Eadie (the Applicant) for an unfair dismissal remedy. Section 385 of the Fair Work Act 2009 (the Act) defines unfair dismissal as:
“A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code;
and
(d) the dismissal was not a case of genuine redundancy.”
[2] The application was filed on 1 December 2010. The Applicant’s employment was terminated by the Respondent on 18 November 2010. The Applicant alleged that there had been no warnings of poor performance either verbally or in writing prior to his termination. A conciliation conference between the parties was conducted on 23 December 2010 which was not successful.
[3] The matter was listed for a preliminary hearing before me on 9 June 2010 to address jurisdictional objections raised by the Respondent on the grounds that the Applicant was not an employee of the Respondent and that the application was frivolous and vexatious. The Respondent initially pressed the objection that the Applicant was not an employee of the Respondent on the basis that the application filed had named the Respondent as Sands Management Pty Ltd whereas in fact the Applicant was employed by Mediterranean Management Pty Ltd.
[4] Part way through the preliminary hearing the Respondent indicated it would no longer press the objection that the Applicant was not an employee of the Respondent and I subsequently allowed an amendment to the application in accordance with s.586 of the Act to substitute the name of the Respondent as Mediterranean Management Pty Ltd. The Respondent did not press its objection at the preliminary hearing that the application was frivolous or vexatious.
[5] The matter was ultimately heard on Thursday 1 July 2010. The Applicant represented himself at the hearing and the Respondent was represented by Mr Ben Seccombe a solicitor from Mahoney Lawyers. The Respondent had raised the issue in its original response to the application filed on the 16 December 2009 that the dismissal was subject to the Small Business Dismissal Code. The Respondent clarified at the commencement of the hearing that it no longer pressed that submission. 1
[6] The Applicant called himself as the only witness in his case. The Respondent called Ms Jane Anne Belcher and Mr John Belcher. The only issue for determination at the hearing was whether the termination of the Applicant was harsh unjust or unreasonable. 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.”
BACKGROUND
[7] The background to the termination was that the Applicant was employed to carry out day-to-day maintenance and repair works at property that formed part of the Mediterranean Apartments Community Titles Scheme located at The Esplanade at Burleigh Heads on the Gold Coast.
[8] The Scheme assets are administered by a Body Corporate. The Body Corporate is governed on behalf of the owners by a committee. The Body Corporate is responsible for the maintenance, upkeep and repair of common property and other Body Corporate assets. The Body Corporate engages a caretaking services contractor.
[9] In 1998 the Applicant was employed by Flamala Pty Ltd to perform maintenance and repair work as it was the holder of the management rights to the Mediterranean Scheme. The Applicant continued to work in this capacity at the scheme. In September 2007 the Respondent purchased the management rights to the Scheme for $4.6 million. 2
[10] The Respondent offered the Applicant employment in the maintenance role and this offer was accepted. About one year after the Respondent had purchased the management rights for the Scheme the Committee representing the Body Corporate started to adopt a more active and critical monitoring role with regard to the performance of the Respondent in its management of the Scheme. 3
[11] In November 2008 the Committee resolved to enforce a protocol on the Respondent that it was not to engage contractors for amounts in excess of $200 unless the Respondent had obtained two quotes and the committee had assessed the quotes and authorised the Respondent to engage the contractor in writing. 4
[12] The Respondent directed the Applicant to abide by the new spending protocol. 5 The Applicant acknowledged this while under cross examination.6 The evidence indicated that the importance of compliance with the spending protocol was reinforced by the Respondent again to the Applicant in January 2009.7 The Respondent was so concerned about this issue that it took the step of providing a formal written notice to staff in strongly worded terms that any works needed to be done over $200 must have two quotes attached and be approved by a committee member. The Applicant acknowledged under cross examination that they had seen this written notice and understood it.8
[13] The importance of complying with the spending protocol was the subject of further discussions between the Respondent and the Applicant in March and April of 2009. 9
[14] In October 2009 the Applicant engaged Moore Plumbing to repair a leaking fire hydrant for which the Body Corporate was forwarded an invoice for $416. 10 The Applicant did not comply with the direction of the Respondent to follow the spending protocol as required by the Body Corporate.
[15] Following this the Chairman of the Body Corporate Mr Alan Miles forwarded correspondence to the Respondent complaining about the failure of the Respondent to comply with the directions of the committee and giving notice that any further expenditure outside the guidelines established by the Body Corporate committee would be the responsibility of the Respondent.
[16] The Respondent took the decision to terminate the Applicant on the 18 November 2009. In June 2010 the Respondent received a formal Remedial Action Notice from the Body Corporate which relied upon failure to comply with the notice from the Body Corporate not to pledge the credit of the Body Corporate in excess of approved limits. 11
CONSIDERATION
[17] The Respondent contended that when it took over the management of the Scheme the custom and practice had generally been that the Body Corporate had not previously taken an active role in overseeing the engagement of contractors and that the Applicant had worked to a large extent unsupervised and engaged contractors as necessary. The Respondent said that initially it maintained this custom and practice albeit with some additional oversight of the Applicant. 12 The Respondent contends that the Applicant resented what he saw as a restriction of his previous autonomy in this regard.
[18] The Respondent contended that in December 2008 and January 2009 the Applicant failed, refused or neglected to comply with the new protocol as required by the Body Corporate committee regarding expenditure over $200. Ms Belcher gave evidence that Mr Eadie was given a formal warning about this issue in February 2009. 13 Mr Eadie gave evidence that if he did engage contractors in December 2008 or January 2009 he would have went though management.14 It was apparent from the evidence that Mr Eadie was aware of the written instruction from his employer15 of a very clear direction regarding steps to be followed by him when it came to the engagement of contractors. He also acknowledged discussions occurred surrounding the protocol at this time.16
[19] He said he did not remember if he engaged contractors without getting two quotes in December 2008 and January 2009 and accepted that Ms Belcher had spoken to him about the issue. 17 He confirmed later in evidence he had read and understood the notice.18
[20] Later in his oral evidence the Applicant suggested that the intent of the notice his employer had directed him to comply with regarding the spending limit may not apply to the engagement of contractors as it may have referred to other expenditure such as the purchase of supplies. I found his evidence on this point unconvincing. I believe Mr Eadie fully understood that the written notice was intended to apply to the engagement of contractors.
[21] In the months of March and April 2009 the Respondent further contended that the Applicant continued to ignore the Respondents directions with regard to engaging contractors without first or subsequently notifying the Respondent by engaging JJ McCalleff Electricians, and Spectrum Fire on several occasions without a written directive as required. 19
[22] Mr Eadie denied engaging these contractors. He accepted that they probably came to the site at that time. He could not remember who would have engaged them and offered no alternative explanation as to who would have made arrangements for them to attend the site if it was not him. Ms Belcher gave evidence that she had investigated the issue and concluded that Mr Eadie was the only person who could have engaged Spectrum Fire. 20
[23] The Respondent said that the actions of the Applicant caused tension between it and the Body Corporate Committee as the Committee perceived that the Respondent was deliberately ignoring the Committee. The Applicant acknowledges in his evidence that Ms Belcher had continued to raise the issue of the Respondents concern about the engagement of contractors outside the directed protocol during March and April 2009. 21
[24] Ms Belcher gave further evidence for the Respondent that in May 2009 the Applicant again engaged a contractor, namely Gold Coast Shute Cleaning without advising the Respondent or adhering to the protocol. The invoice for the work performed by Gold Coast Shute Cleaning was tendered. 22 In his statement Mr Eadie said he authorised Gold Coast Shutes to perform work for the Scheme because he did not know they had lost the contract.23 In his oral evidence he contradicted his own witness statement when he denied authorising Gold Coast Shutes to perform work at the Scheme.24 Ms Belcher said she raised this incident with Mr Eadie and says the Applicant was given a further verbal warning on or about 14 June 2010. In oral evidence Mr Eadie denied Ms Belcher had spoken to him about Gold Coast Shutes,25 however immediately after he indicated that they had discussed the issue.26
Ms Belcher gave further evidence that in July 2009 the Applicant again breached the protocol with regard to engaging contactors by engaging a contractor to clean the windows at the Scheme without advising the Respondent. The Respondent says that the Applicant was given a further verbal warning by the Respondent about this issue on 10 July 2010. The Respondent did not accept this, however he acknowledged that the Respondent had raised the issue of the spending cap again in July 2010. 27 He agreed he had a meeting with Ms Belcher in July 2009 in which he denied that he had engaged A & A Window Cleaning.28
[25] The Respondent then alleged that the Applicant again ignored the spending protocol in late July 2009 by engaging a contractor without advising the Respondent. The Respondent alleged that the Applicant had advised the contractor to split the invoice for the work performed in order to fall below the spending cap imposed by the Body Corporate Committee. The Respondent tendered a copy of the minutes of the Body Corporate Committee of 31 July 2009 29from which it is clearly evident that the Committee is displeased and frustrated at the continued engagement of contractors without its authorisation.
[26] Ms Belcher in her statement said that in August 2009 Mr Eadie engaged Swimmart to carry out works in contravention of the written directive and that the Respondent had no knowledge of this until it received an invoice for $682. 30 Ms Belcher gave evidence for the Respondent that Mr Eadie was given a verbal warning in August of 2009 at a further meeting. It was the Respondents evidence that at this meeting the Applicant was reminded of all of the previous warnings the Respondent had given with regard to this issue. The Applicant said firstly in his evidence that he could not remember if he had such a meeting and then believed no such meeting occurred.31
[27] The Respondent says that again in September of 2009 the Applicant engaged an electrical contractor Short Circuit Electrics without notifying the Respondent. The Respondent alleged again that they believed the Applicant had advised the contractor to split the invoice into two separate invoices to avoid the spending cap. Mr Eadie’s gave evidence was that he had spoken to Short Circuit Electrics 32 however he did not organise for them to visit the site.
[28] The Respondent also claimed that it discovered in September of 2009 that the Applicant had been failing to attend to certain cleaning duties for a number of years. 33 The Respondent said the Applicant was advised in October 2009 that it was considering terminating his employment as a consequence of his repeated failure to comply with the written directive and spending protocol.34
The Respondent stated that in or about October 2009 the Applicant engaged Moore Plumbing against the employer’s direction and the protocol as required by the Body Corporate Committee. A copy of the invoice for this work was tendered. 35 The Applicant agreed that Ms Belcher had a meeting with him about Moore Plumbing in October 2009.36 Mr Eadie agreed that he engaged Moore Plumbing to do work at the Scheme.37 Mr Eadie claimed he had to engage Moore Plumbing as it was an emergency because the fire hydrant was leaking. He conceded however that the fire hydrant had in fact been leaking for probably two weeks.
[29] The Applicant gave evidence that there were many changes in ownership of the management rights of the Scheme over the years of his employment. Mr Eadie gave contradictory evidence about the arrangements that applied to the engagement of contractors prior to the Respondent taking over the management rights. At one point in his evidence he agreed there were occasions when contractors would be engaged without the approval of the Body Corporate, 38 however he later said that this was not the case.39
[30] It is my impression from the evidence that the Applicant had become accustomed over several years to a work environment where he had a fair degree of autonomy in engaging contractors to perform work for the Body Corporate before the Respondent took over the management rights of the Scheme. About a year after the Respondent had taken over those management rights and employed the Applicant a new Body Corporate Committee came to office and demanded a higher level of scrutiny and control of expenditure by the Respondent.
[31] This in turn forced the Respondent to seek to remove from the Applicant the autonomy he had previously enjoyed and led to the deterioration of the relationship between the Applicant and the Respondent.
[32] In Ms Belcher’s evidence she claimed she sat down with Mr Eadie in July 2009 and said to Mr Eadie words to the following effect;
“- I sat down there with you and we had a fairly heavy discussion. I told you that you were no use to the company at all if you’re going to continue doing this and if you continued, we couldn’t continue to employ you..” 40
[33] Generally I found Ms Belcher’s evidence to be more consistent and reliable than that of Mr Eadie with regard to the sequence of meetings that are said to have occurred throughout 2009 regarding the Respondents stated concerns about the Applicants failure to comply with its directions and the spending protocol. The Respondent through Ms Belcher has given evidence that formal verbal warnings had been given to the Applicant in January 2009, June 2009, July 2009 and October 2009. The evidence of the Applicant was that he was not warned that his employment was under threat. I find this implausible.
[34] There is clear documented evidence that the Body Corporate Committee was most unhappy about the Respondents failure to consult with it and the engagement of contractors outside the terms of its directions to the Respondent. There was an obvious motive for the Respondent to seek to satisfy the Body Corporate Committee’s concerns in this regard considering the Respondents management contract was a multi-million dollar contract that could be in jeopardy if the matters at issue were not ultimately resolved.
[35] In my view, the evidence points to the conclusion that the Respondent gave consistent and repeated warnings to the Applicant not to engage contractors to perform work unless the Applicant followed the clearly articulated steps set out in the direction to all staff dated 4 February 2009. The consequences for the Respondent if it failed to address this dispute with the Body Corporate were significant. On the evidence I believe the Respondent showed considerable patience with the Applicant in all of the circumstances before they ultimately took the decision to terminate his contract of employment.
[36] I accept the Respondent’s claim that it gave a lawful direction to the Applicant, and repeated that lawful direction on a number of occasions throughout 2009. I find that the Applicant was aware he had been given a lawful direction and chose to ignore it on more than one occasion.
[37] I have had regard to all of the evidence provided by both parties during the course of the hearing. For all of the reasons I have set out above I find that the dismissal was not harsh, unjust or unreasonable and I dismiss the application.
COMMISSIONER
1 Trans PN8
2 Exhibit 4 Par 8 and 9
3 Exhbit 3 para 16, 17 and 18
4 Exhibit 3 para 20 and 21; Exhibit JB -2; Trans PN 106-137
5 Exhibit 3 attachment JB2
6 Trans PN127
7 Exhibit 3 para 29-35; trans PN 182-188
8 Trans 270 -285
9 PN300-304
10 Exhibit 3 Jb-7
11 Exhibit 3 - JP-10
12 Exhibit 3 para 14
13 Exhibit 3 para 39(j)
14 Trans PN160
15 Exhibit 3 JB-3
16 Trans PN189
17 Trans PN-200
18 Trans PN271-275
19 Exhibit 3 para 43-44
20 Trans PN 922
21 Trans PN 300 -304
22 Exhibit 3 JB-4
23 Exhibit 1 para 7.2
24 Trans PN348 - 358
25 Trans PN381
26 Trans PN382-385
27 Trans PN419 -421
28 Trans PN413
29 Exhibit 3 JB6
30 Exhibit 3 para 93 - 97
31 Trans PN435 -440
32 Trans PN 467
33 Exhibit 3 para 104-105
34 Exhibit 3 para 115
35 Exhibit 3 JB 7
36 Trans Para 487 - 493
37 Trans PN 470 - 471
38 Trans 71 - 73
39 Trans PN 77
40 Trans PN 846
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