Dr Baher Zaghlool v Geohart Consultants Pty Ltd

[2015] FWC 6936

[2015] FWC 6936

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Dr Baher Zaghlool
v
Geohart Consultants Pty Ltd
(U2014/13797)

COMMISSIONER GREGORY MELBOURNE, 20 NOVEMBER 2015

Application for relief from unfair dismissal.

Introduction

[1] Dr Baher Zaghlool was employed by Geohart Consultants Pty Ltd (“Geohart Consultants”) in the role of Manager, Principal Structural/Geotechnical Engineer in July 2013, and worked with the business until 27 October 2014 when he was informed his role was to be made redundant. However, 14 days later he received a further letter informing him he was now to be dismissed on the basis of serious misconduct, and this decision superseded the previous redundancy notification provided to him.

[2] This matter was initially listed for a jurisdiction hearing to deal with an application by Geohart Consultants claiming Dr Zaghlool was unable to bring an unfair dismissal application because his earnings exceeded the high income threshold. However, Vice President Watson rejected that application, finding instead that Dr Zaghlool was an award covered employee, covered by the Professional Employees Award 2010, and therefore his income level did not render him ineligible to make application.

[3] Dr Zaghlool appeared on his own behalf. Geohart Consultants was represented by its Principal Geotechnical Engineer and Director, Mr Wouter Hartman.

The Issue to be Determined

[4] Dr Zaghlool claims he has been unfairly dismissed because his dismissal was harsh, unjust or unreasonable. In determining an unfair dismissal application the Fair Work Act 2009 (Cth) (“the Act”) requires that the Commission must take into account the various factors set out in s.387. It states:

“In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

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

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

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

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.” 1

[5] Therefore, taking into account the matters set out in s.387, was Dr Zaghlool unfairly dismissed on the basis that his dismissal was harsh, unjust or unreasonable?

The Evidence and Submissions

[6] Dr Zaghlool said he commenced employment with Geohart Consultants in July 2013 in the position of Manager, Principal Structural/Geotechnical Engineer and worked on a variety of projects with the business from that time. In his submission he was specifically employed to expand and diversify the scope and extent of Geohart’s business. However, on Monday, 27 October 2014 he received a letter from the Director and Principal Geotechnical Engineer, Mr Wouter Hartman, indicating as a result of the “economic downturn,” and a review by the business of “its operational requirements,” his position was to be made redundant. 2 The letter continued to indicate the “decision is not a reflection on your performance” and concluded by thanking him for his contribution during his time with the business.3 Dr Zaghlool said he reluctantly accepted the decision, based on his understanding of how the business was performing, and subsequently met with other staff to encourage them to continue to support the business.

[7] The full text of this letter from Mr Hartman to Dr Zaghlool is set out below:

“Notice of Termination of your employment

The purpose of this letter is to confirm the outcome of a recent review by Geohart Consultants Pty Ltd of its operational requirements, and what this means for you.

As a result of the economic downturn and the state of the company financials, the position of Principal Geotechnical Engineer/Office Manager is no longer viable. Regrettably this means your employment will terminate. This decision is not a reflection on your performance and it is with great sadness that we present to you a Notice of Termination of employment.

Your notice period will begin on the day of advice, being Monday 27 October 2014. As your final day of work will be Mon 27 October 2014, the remainder of your notice period will be paid in lieu of notice.

You will also be paid your accrued entitlements and any outstanding pay, including superannuation, up to and including your last day of employment.

We remind you of your continuing obligations regarding non-solicitation of Geohart clients and to keep confidential all Geohart company information, as stipulated in your contract of employment.

Please ensure all Geohart property has been returned to the office on your final day in the office. We thank you for your contributions during your time with Geohart Consultants and wish you all the best in your future endeavours.

Yours sincerely” 4

The letter was signed by Mr Hartman in the capacity of “Principal Geotechnical Engineer – Director.”

[8] However, after being informed his role had been made redundant Dr Zaghlool said he then discovered, later that morning, that his access to the network had been denied as a result of his password being changed. He subsequently contacted Mr Hartman and requested to be able to access the system in order to delete some personal and other confidential material stored on a laptop provided to him by the business. He submits there was nothing unusual about this request, and he was simply seeking to gain access to information he had loaded onto the system which he was entitled to download and retain. However, these requests were refused, and he subsequently took action to download the material himself. After meeting briefly with some other staff he then left the building and did not return to work at Geohart Consultants after that time. However, he said he has not received any payments in regard to any redundancy entitlements due to him. He also said he was subsequently contacted later that afternoon by telephone by Ms Anita Hartman and had a discussion with her about the information downloaded from the computer system.

[9] Dr Zaghlool’s evidence continues to indicate that on Monday, 10 November 2014 he then received a further email from Geohart Consultants with an attached letter from Mr Hartman headed “Termination of employment due to serious misconduct.” The letter continued to state:

“This letter supersedes the letter of termination of employment you received on the 27th October 2014. This letter is to advise you that your employment with Geohart Consultants has been terminated due to serious misconduct.

The serious misconduct relates to the following actions during your employment:

• On the 27th October 2014 you were advised that your employment will be terminated due to operational difficulty. Upon this notification you unlawfully formatted the laptop that was assigned to you as an employee. You acknowledged your unlawful action following a telephone conversation with Anita during the afternoon of the 27th October 2014. You were further questioned during this telephone conversation whether you had permission to conduct this unlawful action upon which you answered no.



• We further reviewed your email communication (see attached Appendix A) which revealed that you had further acted unlawfully in misrepresenting myself in a letter to the Victorian Building Authority (VBA – see Appendix A – email communication and letters). The letter you presented to the VBA has no reference number and no physical Geohart Consultants contact numbers.



• Through this email communication (Appendix A) we understand that you have further misrepresented Geohart Consultants in providing the VBA with Geohart Consultants Professional Indemnity Insurance (PI) without Geohart Company Director Approval.



• Furthermore the PI insurance had been falsely misrepresented to the VBA to cover building inspections.

Not only have you breached your employment agreement regarding damaging company property, but acted unlawfully misrepresenting a Company Director of Geohart Consultants, which is a further breach of Geohart Consultants Company Code of Conduct Policy.

Following these multiple breaches we have no choice but to terminate your employment due to serious misconduct. Due to the nature of your termination and as a result of serious misconduct, you are no longer eligible to receive severance payment.

Furthermore we have instructed Geohart Consultants solicitors to provide you with a letter advising you of you post-employment obligations and other items related to your serious misconduct. We have further advised the VBA to lodge a formal investigation into your unlawful action and misconduct.

For and on behalf of GEOHART Consultants.” 5

[10] The letter to the Victorian Building Authority, referred to in the above correspondence, was also attached to the termination letter. It is dated Friday, 8 August 2014 and headed “Re: Dr Baher Zaghlool employment record.” It continues to indicate:

“I hereby confirm that Dr Zaghlool is an employee of Geohart Consultants Pty Ltd as Manager, Principal Structural/Geotechnical Engineer. Please update your records accordingly.

Please contact me if any queries may rise and thanks.

Yours faithfully” 6

[11] The letter is indicated to have been signed by Mr Hartman, whose position is stated to be “Director and Principal Geotechnical Engineer.”

[12] In his witness evidence Dr Zaghlool rejects each of these allegations as “baseless.” 7 He, firstly, states the allegation that Mr Hartman was unaware of the letter provided to the VBA is “false,” as a printed copy was provided to him for his approval before it was emailed to the VBA.8 He said he cannot understand why Mr Hartman now seeks to deny that he both saw and approved the letter, although Dr Zaghlool does not deny he drafted the letter for Mr Hartman’s approval. Dr Zaghlool said the letter was simply sent to the VBA to update the information about him on their system, particularly in regard to details about the business he was now employed by. He acknowledged the effect of this notification would be that as an employee of Geohart Consultants he would be covered by its professional indemnity insurance, and without providing this notification the VBA’s records would indicate he continued to be employed by his previous employer.

[13] Dr Zaghlool also rejects the suggestion that the fact the letter did not have a reference number, or Mr Hartman’s contact details on it, is an indication it was not genuine. He submits other documentation prepared and distributed on behalf of Geohart Consultants can be found to have been in the same format, and the absence of these details is by no means conclusive.

[14] He also states that as a full-time employee he was fully covered by Geohart Consultants’ professional indemnity insurance as long as he was carrying out work his employer has consented to him being involved in. This extended to include his registered building practitioner sign off which was conducted on a number of projects. He also states he was tasked with the role and responsibility of developing the business in areas like asset management and structural works, and in late 2013 verbal confirmation was provided to him by Mr Hartman to include this scope of work in Geohart Consultants professional indemnity insurance. In his submission proposals provided to the City of Casey and GDF Suez Hazelwood provide examples of this, and had been authorised by Mr Hartman on behalf of Geohart Consultants. These changes were also reflected in the ISO certification for the business, which had changed from encompassing only geotechnical work to now include structural and civil work.

[15] He also submits it was not correct to suggest he had sought to arrange professional indemnity insurance to cover him personally as a registered building practitioner in order to enable him to act in an individual capacity. He submits he had never sought to act as a registered building practitioner in his own right, and had only ever purported to act under the corporate structure of Geohart Consultants. He also denied having ever worked in a private capacity while employed by Geohart Consultants. He also stated that, in any case, public indemnity insurance was not jeopardised unless the individual involved acted negligently, and no such claim had ever been made about him.

[16] Dr Zaghlool also indicated in his evidence that it was misleading to suggest Geohart Consultants was solely involved in geotechnical work and he had been employed and authorised to pursue work outside of this discipline, including other structural and asset management work, and these were pursued under the banner of Geohart Consultants and encompassed within its professional indemnity insurance. He had been specifically tasked to expand and diversify the business in this way, and gaining accreditation as a registered building practitioner was done entirely for this purpose.

[17] Dr Zaghlool’s evidence also indicates that on 27 October 2014, when he attempted to connect his laptop to the network, it was locked out due to a changed password. He said he then approached Mr Hartman to confirm the arrangements regarding his redundancy and also, on two occasions, requested access to delete from the computer system various materials, including emails received from his former employer that he had been authorised to retain. He also sought to remove a range of other information that was personal to him, including private business contacts, technical information, journals and other communications. However, his evidence indicated Mr Hartman refused to allow him access to enable him to delete or download this information.

[18] Dr Zaghlool also denies he was ever provided with a copy of the “Internet, Social Media, E-Mail and Computer Use Policy,” dated July 2014, that Geohart Consultants submits was provided to him, and notes that the copy of the policy provided by Geohart Consultants in conjunction with its submissions did not contain a completed signed acknowledgement of personal commitment by him on the page where this was set out.

[19] Dr Zaghlool also rejected in cross-examination any suggestion he had sought to use Geohart Consultants’ public indemnity insurance for personal use, and he had only ever been involved in work carried out on behalf of Geohart Consultants.

[20] He also said the personal computer provided to him was more than three years old, and had been used previously by other employees, so it was impossible to conclude he had been responsible for downloading all the information and other materials that might have been found to have been stored on it. He also said he was never told he was not able to download material from the Internet or other information that was not directly work-related. He also defended the downloading of documentation obtained during his employment with other businesses on the basis that it could be used for the benefit of future projects Geohart Consultants was involved in “rather than reinventing the wheel” on every occasion. 9

[21] He also acknowledged in cross-examination he had not been given express permission to format the computer provided to him, but the materials loaded onto the computer were necessary in order to be able to participate in large scale projects that Geohart Consultants was now interested in getting involved in, and his intention was simply to look for opportunities to expand the business and maximise its potential. He indicated he had also included and retained examples of his past work so it could be borrowed and revamped to assist and support project work Geohart Consultants was now involved in.

[22] Dr Zaghlool submitted, in conclusion, that the allegations made about him were a spiteful response, and had been concocted to deny him his legitimate employment entitlements on termination.

[23] Geohart Consultants submits at the outset that Dr Zaghlool has misrepresented his job title and he was in fact employed in the position of Manager, Geotechnical (Mining and Civil)/Principal Engineer, rather than Manager, Principal Structural/Geotechnical Engineer.

[24] Its submissions also contain what it describes as “background information” detailing chronological information about various significant events in the context of this matter. It submits that on 27 October 2014 Dr Zaghlool was provided with a letter of termination and “requested to leave as there was no requirements for further involvement.” 10 It notes he was subsequently contacted again later that day via telephone and email following the discovery he had destroyed company data and property by formatting the computer system. It also submits that as part of this process it was discovered he had forwarded a letter to the Victorian Building Authority, some months earlier, purporting to have been signed by Mr Hartman by means of using his electronic signature, but without his consent or authority to prepare and forward that letter. At the same time it was discovered Geohart Consultants’ professional indemnity insurance had been compromised as details had been forwarded to the Victorian Building Authority without the authority of a Director of Geohart Consultants.

[25] Geohart Consultants said it has made a complaint to the Victorian Building Authority, following this discovery, and understood it was still being investigated. It had not been advised at this stage about when that process of investigation would be completed and understood it was on-going.

[26] It also submitted that after further discussions with the firm’s solicitors, and with the Victorian Building Authority, another letter was provided to Dr Zaghlool on 10 November advising his employment was now terminated due to serious misconduct, and this should be taken to supersede the previous correspondence indicating he had been made redundant.

[27] The submissions provided by Geohart Consultants continue to indicate the decision to terminate Dr Zaghlool on the basis of serious misconduct related primarily to the discovery of the letter found to have been provided to the Victorian Building Authority and purportedly signed by Mr Hartman on behalf of Geohart Consultants. It submits Mr Hartman did not write or sign the letter, and at no time provided authority for it to be sent. In its submission Dr Zaghlool wrote the letter and then used Mr Hartman’s electronic signature before forwarding it to the Victorian Building Authority. He also then provided details about Geohart Consultants professional indemnity insurance to the Authority.

[28] Geohart Consultants denies Dr Zaghlool ever provided a copy of the letter to Mr Hartman for approval before it was sent to the VBA, and at no time was it approved or authorised by him prior to being sent. In addition, it submits Dr Zaghlool was never authorised to provide details of Geohart Consultants public indemnity insurance certificate to the Victorian Building Authority. It also submits its public indemnity insurance did not extend to provide insurance cover for structural and building inspection work for Dr Zaghlool as a registered building practitioner and, further, its consultants are not involved in that work.

[29] It also denies Dr Zaghlool was required, as part of his responsibilities, to develop or expand the scope of the existing business into areas such as asset management and structural works, and Dr Zaghlool has provided misleading submissions about the details of the scope of works in which the business was involved.

[30] In its submission Dr Zaghlool was pursuing registration with the Victorian Building Authority for personal reasons, rather than for reasons associated with the business interests of Geohart Consultants. However, it also acknowledged its public indemnity insurance would not be compromised, providing the work being carried out was done with the authority of Geohart Consultants. It also acknowledged in this context it was possible Dr Zaghlool might only be seeking to use his registration with the Victorian Building Authority for the purpose of bringing more work to the business.

[31] It also submits the discovery about formatting the computer was a further significant concern and following this discovery the computer was sent to an IT forensic expert for examination. In the course of this exercise it retrieved company data from other businesses that had been stored on the computer. It was very concerned such information was retained on its computer system. In addition, the email it alleges Dr Zaghlool sent to the Victorian Building Authority, which included the information about Geohart Consultants’ insurance details, was also discovered. As indicated, a complaint about this was now being pursued with the Victorian Building Authority. In addition, a further complaint had been made to the police in an endeavour to try and speed up the investigation process.

[32] It acknowledges that while Dr Zaghlool may not have been told directly to not put information about other businesses on the Geohart Consultants computer system this did not need to be expressly stated because it was inherent in the agreement he had entered into when first employed.

[33] In response to a question from the Commission seeking to clarify its position Geohart Consultants indicated that the letter of 8 August provided to the VBA was a forgery and its insurance certificate of currency should not have been enclosed with that email. This did not prevent Dr Zaghlool being registered with the Victorian Building Authority for his own personal professional development, but for the type of work he was doing when employed by Geohart Consultants he did not require insurance coverage in his own name.

[34] It also indicated that the subsequent action taken by Dr Zaghlool to remove personal information from the computer system meant the computer was now inoperable and did not have a functioning operating system.

[35] In response to a further question from the Commission about whether Geohart Consultants had sought to raise the matters constituting serious misconduct with Dr Zaghlool, before it provided the letter dated 8 November to him, it indicated he was contacted by phone on the afternoon of 27 October and asked why he had formatted the computer. A response was provided indicating this was done because of the requirement to delete his personal data. However, the matters to do with the communication with the Victorian Building Authority had not been raised with him because he was no longer employed by the business at the time. Geohart Consultants also denied there was anything spiteful in what it had done, and it was simply acting to protect the interests of the business.

[36] It also stated that the data obtained through the process of investigation and retrieval by the IT consultants engaged by the business indicated that documentation and project information from other consulting businesses had been downloaded, together with movies, computer games, personal photos, as well as videos downloaded from the Internet.

[37] Geohart Consultants submits, in summary, that the subsequent decision to decide to retract its earlier decision to terminate Dr Zaghlool, based on his role being made redundant, and to instead dismiss him on grounds of serious misconduct, was appropriate in all the circumstances because he had breached company policy, prepared a letter misrepresenting a Director of the business, used a Director’s electronic signature without approval, and misrepresented the Geohart Consultants’ professional indemnity insurance.

Consideration

[38] The submissions provided by each party did not directly address the various factors contained in s.387 of the Act that the Commission must take into account in determining an application of this kind. The requirements imposed by this section are generally clear and well understood and were simply stated by a Full Bench of Fair Work Australia, as the Tribunal was then known, in the matter of L.Sayer v Melsteel Pty Ltd 11 in the following terms:

“Where the applicant does present a case, in the ordinary course each of the criteria in s.387 which is capable of being relevant on the facts emerging at the hearing must be taken into account.” 12

[39] I now turn to deal with the circumstances involved in this matter in the light of these considerations.

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct conduct (including its effect on the safety and welfare of other employees);

[40] In dealing with this consideration it is noted at the outset that a previous Full Bench of the Tribunal in the matter of Parmalat Food Products Pty Ltd v. Mr Kasian Wililo 13 came to the following conclusion in terms of the significance of this initial “valid reason” consideration in terms of the various matters contained in s.387:

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.” 14

[41] The question of what is required to constitute “valid reason” was also considered in the matter of Selvachandran v Peteron Plastics Pty Ltd 15. It was decided under a previous statutory scheme, but is still relevant in the present context. At page 373 Northrop J held:

“In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. the provisions must `be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly...” 16

[42] It is also clear that the reason must be objectively valid. It is not sufficient that the employer believes it had a valid reason for termination. This was emphasised in the Full Bench decision in the matter of Rode v. Burwood Mitsubishi 17at paragraph 19 where the Full Bench held:

“....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.” 18

[43] Previous decisions of the Commission have also established that “valid reason” is not to be limited by importing a test requiring justification to repudiate the employment contract; rather the test is simply whether the behaviour or performance gave rise to a valid reason for the employee’s termination. I now turn to consider whether a “valid reason” exists in all the circumstances of this matter that is defensible, well founded, and can be justified based on an objective analysis of the relevant facts.

[44] On 27 October 2014 Dr Zaghlool’s role at Geohart Consultants was made redundant because of operational and financial issues impacting on the business. The evidence indicates Dr Zaghlool reluctantly accepted this decision at the time, acknowledging the circumstances that led to the decision being made. It also appears that at this point the parties had built up a reasonable working relationship during the period of 15 months in which Dr Zaghlool had been employed by Geohart Consultants. However, this situation quickly changed. Geohart Consultants submits Dr Zaghlool’s actions later that day in formatting the laptop computer that had been provided to him was the catalyst for it deciding to retract its earlier decision to make him redundant, and to instead dismiss him on grounds of serious misconduct.

[45] Two developments, in summary, essentially provided the basis for this decision. The first concerned what Geohart Consultants describes as the unlawful formatting of the laptop computer, which it submits rendered it inoperable and required specialist IT expertise to reinstate. This apparently occurred as a result of Dr Zaghlool attempting to retrieve the data he had loaded onto the system during his time at Geohart Consultants.

[46] The second issue concerns what Geohart Consultants discovered after reviewing Dr Zaghlool’s email communications, and some of the data and other materials he had loaded onto and stored on the PC. Its principal concern in this regard was that he had prepared and forwarded a letter to the Victorian Building Authority under Mr Hartman’s signature, but without his consent or approval, and in doing so had misrepresented Geohart Consultants position and the scope of its public indemnity insurance. It also claimed to have discovered that Dr Zaghlool had loaded movies and other non-work-related material onto the system, as well as other documentation and materials he had obtained in the course of his previous employment. In its submission Dr Zaghlool had not been authorised to load this information onto the system, and it was inappropriate and unprofessional to do so.

[47] In response to the first matter Dr Zaghlool submits that after being told he had been made redundant he attempted to access the computer system in order to delete some personal and other confidential information and materials he had stored on the laptop provided to him. However, he discovered his access had been denied as a result of his password being changed. He then asked Mr Hartman to be able to access the system for these purposes but this request was denied. His subsequent attempts to retrieve this material then led to the formatting issues that Geohart Consultants refers to.

[48] In dealing with this issue in isolation it does appear that if both parties had acted differently in the circumstances they could have avoided the disputation and angst that now exists. In a situation where an employee is being made redundant, and leaving their employment immediately as a consequence, it would normally be the case for that individual to be given time and access to remove any personal items or matters from the workplace including, where appropriate, access to the computer system so as to be able to download or delete any data or information that was personal in nature to them. However, this did not occur in the present matter. It appears Dr Zaghlool was simply denied any opportunity to access this material and, as a consequence, took other action to gain access.

[49] The second set of issues arose as a consequence of Geohart Consultants review of Dr Zaghlool’s email communications, and the materials and data he had stored on the computer system. The most significant issue in this context concerns the letter signed by Mr Hartman that Dr Zaghlool provided to the Victorian Building Authority, together with details about Geohart Consultants public indemnity insurance, and the scope of that insurance cover. Geohart Consultants submits he was never authorised to provide the letter and it had not previously been seen or authorised by Mr Hartman before being sent. It supports this submission by indicating it did not contain his personal contact details as would normally be the case with a letter signed by Mr Hartman. It also submits that in providing details about its insurance coverage, and the scope of that coverage, Dr Zaghlool was again going beyond what he was authorised to do and had, potentially, jeopardised its insurance coverage.

[50] Dr Zaghlool refutes these submissions and states that a copy of the letter was authorised by Mr Hartman before it was sent. He also states he was expressly authorised to grow and diversify the scope of the business and his actions were consistent with this intent. He also made reference to other documentation provided by the business which did not contain Mr Hartman’s personal contact details, and submits there was nothing unusual in this. It is also noted that despite a complaint having been made to the Victorian Building Authority, nothing has been substantiated in response at this point. Dr Zaghlool also submits that, in any case, any issue in regard to the insurance coverage would only ever materialise if an individual was found to have acted negligently.

[51] Having considered all the circumstances involved in this matter I am unable to conclude Dr Zaghlool acted beyond the scope of his authority in regard to his actions in this matter, and it follows that I am unable to conclude that this provided a valid reason for his termination. Neither party provided any additional evidence in support of their submissions, which might have enabled the matter to be determined conclusively. In the absence of that evidence I am unable to conclude that Dr Zaghlool acted in a way that misrepresented Geohart Consultants.

[52] The other issues that subsequently arose concerned the material that Geohart Consultants submits Dr Zaghlool loaded onto the computer system without permission or authority. These were claimed to include movies and other material downloaded from the Internet, together with documentation and other materials Dr Zaghlool had obtained previously in the course of his employment. In its submission, he was expressly prevented from loading these materials onto the system by the terms and conditions contained in the contract of employment he signed when he was first employed.

[53] Dr Zaghlool submits in response that other employees had access to the personal computer prior to him being employed, and any information and other non-work related materials found on the system could have been loaded onto it by those individuals. He specifically denies having downloaded the movies, for example, that Geohart Consultants claims to have found on the system. He also explains the material derived from other businesses by submitting he had permission to access that material, and it was simply retained for the benefit of Geohart Consultants in that it could be used to assist the consulting work in which it was involved.

[54] Again, I am not satisfied these circumstances provide sufficient grounds to support Dr Zaghlool’s termination on grounds of serious misconduct. Again, it involves one party submitting it had the right to act in the way it did, and the other party denying this entitlement, without further evidence being provided in corroboration.

[55] In summary, for the reasons indicated I am unable to conclude that the matters relied upon by Geohart Consultants for its subsequent action to retract the decision to make Dr Zaghlool’s role redundant, and instead decide to terminate his services based on grounds of serious misconduct, constitute valid reasons for his dismissal.

(b) whether the person was notified of that reason;

[56] Dr Zaghlool was initially informed he was being terminated because his role had been made redundant. He was also told at this time he would not be required to work out the notice period, but would receive payment in lieu. However, 14 days later he received a further email, and an attached letter from Mr Hartman on behalf of Geohart Consultants, advising his employment had been terminated due to serious misconduct. The letter then continued to set out details about the actions said to constitute the serious misconduct.

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

[57] Some initial discussions took place on the day Dr Zaghlool was made redundant after Ms Hartman contacted him that afternoon to discuss issues about information downloaded from the computer system. However, Dr Zaghlool was not provided with any further details about the issues to do with his alleged “serious misconduct” until he received the letter dated 10 November. In addition, he was not provided with any opportunity, either prior to or after the receipt of this letter, to respond to any of the issues raised about his capacity or conduct.

(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;

[58] The evidence does not indicate any unreasonable refusal by Geohart Consultants to have a support person present to assist in any discussions relating to the dismissal of Dr Zaghlool. However, the evidence also indicates the parties did not, at any time, convene to discuss the matters that led to the decision to dismiss Dr Zaghlool, or the issues he might wish to raise in response.

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal;

[59] There is no evidence of any warnings being provided to Dr Zaghlool prior to him receiving the letter advising him that his employment had been terminated due to serious misconduct.

(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;

[60] Geohart Consultants is a relatively small business and the evidence does not indicate it employed anyone with experience in HR or related abilities. However, the evidence of Mr Hartman indicates he consulted his solicitors and obtained some advice from them before deciding to terminate Dr Zaghlool on grounds of serious misconduct.

(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;

[61] It is likely Geohart Consultants lack of any dedicated human resource expertise impacted on the procedures followed in effecting Dr Zaghlool’s dismissal, however, as indicated above it did seek external advice before finally initiating the decision to terminate him on grounds of serious misconduct.

(h) any other matters that FWC considers relevant.

[62] The parties did not raise any further matters in this context and the Commission is not aware of any other relevant considerations that need to be taken into account in determining this matter.

[63] Having had regard to each of the matters contained in s.387 and, in particular, having regard to the fact I am unable to conclude there were valid reasons for dismissal I find the dismissal of Dr Zaghlool, in all the circumstances, was harsh, unjust or unreasonable. Accordingly, I find that the dismissal was unfair in the terms of s.385. Having come to this conclusion I now turn to consider what form of remedy is appropriate in response.

[64] Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case” 19

[65] It is clear that Dr Zaghlool is not seeking to be reinstated to his former position and, in any case, I am satisfied an order of this kind would be inappropriate in all the circumstances of this matter, having particular regard to the size of the business and the nature of the relationship that clearly now exists between Dr Zaghlool and the principal Director of the business, Mr Wouter Hartman. In addition, the earlier decision to make the role redundant suggests there is no longer an ongoing position available.

[66] As indicated, s.390(3)(b) provides that the Commission can consider an order for payment of compensation if it is appropriate in all the circumstances of the matter. Having concluded that Dr Zaghlool has been unfairly dismissed and reinstatement is not appropriate I am satisfied an order for compensation should be made. Section 392 continues to set out the circumstances to be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct, and the upper limit of compensation that may be ordered. It provides:

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

Note: subsection 392(5) indexed to $66,500 from 1 July 2014

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.” 20

[67] In coming to a decision in this matter I have had regard to each of these criteria. However, in the circumstances of this matter one of these criteria is of particular significance. At the time Dr Zaghlool was terminated on grounds of serious misconduct Geohart Consultants had already informed him, 14 days earlier, his position had been made redundant with effect immediately. He was also told he would not be required to work out the notice period and would receive payment in lieu of notice, together with his redundancy entitlements. However, the evidence indicates he has not received any of these payments following the subsequent decision to terminate him on the grounds of serious misconduct. However, it follows that the only payments Dr Zaghlool could have expected to have received from Geohart Consultants, if he had not been dismissed on grounds of serious misconduct, were the payment in lieu of notice and the redundancy entitlements.

[68] I am also satisfied there is no evidence indicating Dr Zaghlool had been able to mitigate his losses, certainly not at the time of the hearing in any case.

[69] Having considered all the circumstances involved in this matter, and the criteria I must have regard to in s.392, I am satisfied Dr Zaghlool should receive at first instance what he clearly was entitled to had he not been unfairly dismissed. For a person with more than one years’ employment, but less than two years’ service, that entitlement under the National Employment Standards would be two weeks pay in lieu of notice, together with a redundancy entitlement of 4 weeks, being a total amount equivalent to six weeks pay. However, I am also satisfied there should be some deduction from this amount given what I consider to be Dr Zaghlool’s misconduct in taking action to retrieve or delete information from the computer system on the day he was made redundant, in the absence of any agreement about this matter. I am satisfied it is appropriate to deduct an amount equivalent to two weeks salary on this basis.

[70] Therefore, an order for payment of an amount equivalent to four weeks salary will be issued in conjunction with this decision. If for any reason the parties are unable to reach agreement on what that amount should be they can seek recourse to the Commission to assist in settling that amount.

COMMISSIONER

Appearances:

Dr Zaghlool appeared on his own behalf.

Mr Wouter Hartman appeared on behalf of the Respondent.

Hearing details:

2015.

Melbourne:

7 July and 12 August.

 1   Fair Work Act 2009 (Cth) at s.387

 2   Exhibit BZ3 at Exhibit A

 3   Ibid

 4   Ibid

 5   Ibid at Exhibit B

 6   Ibid at Appendix A to Exhibit B

 7   Exhibit BZ2 at para 1

 8   Ibid

 9   Transcript at PN591

 10   Exhibit WH1 at page 3

 11   [2011] FWAFB 7498

 12   Ibid at para 20

 13   [2011] FWAFB 1166

 14   Ibid at para 24

 15   Selvachandran v Peteron Plastics Pty Ltd (1996) 62 IR 371

 16   Ibid at page 373

 17   Rode v. Burwood Mitsubishi, Print R4471, 11 May 1999

 18   Ibid at para 19

 19 Above n.i at s.390(1)

 20   Ibid at s.392

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