Fair Work Commission

[2014] FWC 3907

[2014] FWC 3844

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Suzanne Hembrow
v
Bartley Burns Town Planning T/A Bartley Burns
(U2013/1950)

COMMISSIONER BOOTH BRISBANE, 17 JUNE 2014

Termination of employment - high income threshold and Small Business Fair Dismissal Code.

[1] Ms Suzanne Hembrow (Ms Hembrow) seeks an unfair dismissal remedy following her summary dismissal from her role as a Senior Town Planner by Bartley Burns Town Planning Pty Ltd (Bartley Burns) for alleged serious misconduct.

[2] Bartley Burns provides building certification and town planning services. At the time of the dismissal it employed fewer than 15 employees bringing it within the definition of a small business. It objects to the application on two jurisdictional grounds that:

a) Ms Hembrow’s annual rate of earnings exceeded the high income threshold, then $123,300; and

b) the dismissal complied with the Small Business Fair Dismissal Code.

[3] The parties initially agreed to the jurisdictional issues being determined on the papers. However I was not satisfied that the state of the evidence was adequate for a determination to be made and consequently heard argument over two days. Ms Hembrow was represented by Ms Prior, Industrial Advocate, and Bartley Burns by Mr Merrell of Counsel.

Background facts

[4] Ms Hembrow was employed by Bartley Burns from about 29 November 2004 until her dismissal on 24 May 2013. Her contract of employment commencing 7 June 2012 provided for a gross annual salary of $100,000. The contract also allocated her a Bartley Burns motor vehicle with private use privileges subject to conditions and restrictions. The contract did not specify what type of vehicle is to be provided, but the vehicle was a manual Nissan Navara utility (the Nissan) displaying Bartley Burns signage. No log books were kept for the Nissan. Bartley Burns estimates Ms Hembrow’s private use at 89.6% of annual travel, valued at $16,025.87 for earnings purposes, a calculation she rejects.

[5] In addition to the $100,000 salary, Ms Hembrow was also paid an extra $12,000 being $1,000 per month for the twelve months of the contract. The proper characterisation of that extra amount is contested. It is described in the contract in a dot point under the heading “Leave Entitlements”:

● Backpay will be reimbursed to the employee in the form of a bonus of $1,000.00/month (for a period of 12 months ie. 12 X $1,000.00) payable on the first pay period of each month commencing 2^nd July 2013.

[6] On 2 December 2012, Ms Hembrow alleges she crashed the Nissan into a tree fern at her home, causing it to fall, damaging a friend’s vehicle. She promptly reported the incident to Bartley Burns, providing a photograph, and admitted fault. An insurance claim was lodged for vehicle repairs and a $500 insurance excess incurred. It seems there were other photographs taken with a mobile phone, but they were not provided at the time and the phone has since become inoperable.

[7] At some later date, Bartley Burns’ Director, Mr Ken Burns decided to investigate the claim and concluded that Ms Hembrow may not have been truthful about the crash. He and, then co-Director Mr Stephen Bartley, met with her on 23 May 2013, showing her evidence in the form of images from Google Maps and Nearmap that Mr Burns says showed the tree was not in the location she had claimed. She restated her version of the incident. She was summarily dismissed the next day. Mr Burns says in his statement:

“Ms Hembrow has dishonestly and fraudulently misrepresented how the car accident occurred, resulting in a fraudulent insurance claim and loss to Bartley Burns.”

Applicant’s evidence and submissions

Backpay issue

[8] Ms Hembrow exhibited to her statement various previous contracts of employment with Bartley Burns and several iterations of her most recent contract. Mr Aaron Sweet was the Planning Director of Bartley Burns. He was Ms Hembrow’s immediate supervisor and mentor, but despite his title he was not a company director of Bartley Burns. In the lead up to Ms Hembrow’s contract negotiations in 2012, Mr Sweet resigned. Mr Burns, it seems, wanted to be reassured of Ms Hembrow’s intentions to stay with Bartley Burns. She says she asked for a pay rise and ‘back pay’ to compensate for accepting lower wages during the economic downturn. Ms Hembrow says that Mr Burns later left a post-it note on her desk with the amount ‘$12,000’ written on it. Ms Hembrow deposes that Mr Burns later told her that he would be mad to pay her the $12,000 in a lump sum because she might leave.

[9] Mr Bartley, who is no longer a Director of Bartley Burns, also made a statement. He states that although Mr Burns had negotiated with Ms Hembrow on her contract, he was generally aware of the negotiations and that Ms Hembrow had asked for a pay rise and back pay. He says:

“Ken proposed to pay the back pay in instalments and I was aware of that … There was certainly no intention that the agreed amount for back pay would form part of the salary beyond its final instalment.”

[10] Two payslips exhibited by Ms Hembrow specify ‘back pay’ as an item in the sum of $1,000.36 in addition to normal pay and other entitlements. A third pay slip from another week does not show any back pay.

Private use of Motor Vehicle

[11] Ms Hembrow disputes Bartley Burns’ estimate of private use of the Nissan. She says the Nissan was regularly used by others in the office and the method Bartley Burns used to calculate business use is flawed. She says that because the Nissan was a utility truck it was often used to carry signs to sites, and deposes that all the planners made use of the Nissan except one who did not have a license to drive manual vehicles. Ms Hembrow pointed out that Bartley Burns’ witness statements confirm that their vehicles are available for use by staff.

[12] Mr Sweet says when he left Bartley Burns there were 8 vehicles in the fleet, all but one being home garaged, and all being available for business use by other staff. The Nissan was added to the fleet to allow safe transportation of large signs, star pickets and rammers and other equipment. Being a four wheel drive, the Nissan was also useful for rural and off-road work.

[13] He submits that to his knowledge Ms Hembrow does not travel extensively privately, and that in his opinion 89.6% private use of 20,000km annually is ‘simply not a reasonable estimation’.

[14] He further deposes that Bartley Burns encouraged use of the Nissan because Ms Hembrow’s private use was so low and ‘the business needed to keep the kilometres up.’

He confirms the Nissan was used by other staff in the business:

“It was particularly the case with that vehicle as it was allocated to town planning and was set up to be used for signage and also was used by certification staff on occasions. Staff generally used other vehicles as well. There was no exclusive usage.”

[15] No log books were kept. Therefore he says:

“...it would be impossible to correctly estimate the business travel by all staff on any particular vehicle.”

[16] Ms Hembrow concedes that a “significant amount of travel in the vehicle would have been private” but submits:

● the vehicle was available as a fleet vehicle if she was not using it for business purposes during work hours;

● as a larger vehicle it was suitable for use when signs and equipment were to be carried;

● it was available for other staff who might be away overnight and make personal use of it then; and

● there is no way of reliably apportioning travel.

[17] Ms Hembrow suggests business usage is more realistic at 37.5%. That leaves 62.5% private use compared to 89.6% suggested by the employer. Ms Hembrow points out that her figure means she earned less than the high income threshold even including the $12,000.

Summary Dismissal of Ms Hembrow

[18] Mr Bartley deposes that he had not decided to terminate Ms Hembrow’s employment saying he was not aware of the decision until after Mr Burns had dismissed her. He says:

“I was not involved in any decision in relation to the facts and circumstances of the accident. From my perspective there was no decision made at the meeting. Nor was I involved in making one following the meeting.”

[19] As to the alleged serious misconduct warranting summary dismissal he says:

“That was not a decision I had made nor a conclusion I drew based on the facts. My signature was applied to the letter of termination electronically.”

[20] On her dismissal, Ms Hembrow gave oral evidence that Mr Burns suggested to her that the Nissan was not damaged by the tree but that someone had jumped on it. 1

Respondent’s evidence and submissions

Back Pay issue

[21] Bartley Burns did not provide any evidence about the negotiations that resulted in the additional $12,000 allowed for in the contract of employment. In submissions it says that Ms Hembrow:

“...was entitled to a guaranteed payment in the amount of $12,000.00 … paid to the Applicant by way of an increase to her base wage of $1,000 per month.”

[22] Bartley Burns concedes that reimbursements and back pay are not part of annual earnings. It drew the Fair Work Commission’s (the Commission) attention to a Commissioner of Taxation ruling (Withholding Schedule NAT 3348) with the following description:

A back payment is a payment that was meant to have been made in a prior period.

[23] Bartley Burns’ written submissions say that Ms Hembrow asked for the $12,000 in a lump sum but it was paid monthly due to the risk that she might resign. Consistent with that proposition, the submissions characterise the $12,000 as a sum intended to maintain her employment with Bartley Burns. It submits the terminology “back pay will be reimbursed” does not appropriately describe the amount. It further asserts that if the sum was back pay, Ms Hembrow would have a contractual right to the $1,000 still outstanding at the time of her dismissal, she having received by that time 11 of the 12 payments. It says, without elaboration, “That is not the case here”.

[24] At the hearing, Mr Merrell objected to oral evidence of the intention of the parties 2 but in submissions argued that the $12,000 must be a bonus because: it was a one-off payment in recognition of past lower pay; if it was back pay there would have been appropriate superannuation adjustments, and there was no evidence of any; there was no evidence of Ms Hembrow agitating for the unpaid balance being $1000 for the final month during which she was dismissed.

[25] On the $12,000, in his further statement Mr Burns agrees that Ms Hembrow had not received a pay increase for a number of years, alleging that was because ‘she refused to sign an employment agreement’.

[26] After Mr Sweet’s departure, he agrees that he arranged to meet Ms Hembrow:

“...to discuss the recent events and her future intentions with the Respondent [ie Bartley Burns] as I was [wary] of the closeness of the Applicant and Mr Sweet and given the manner and circumstances of the resignation of Mr Sweet I was concerned that the Applicant would leave the Respondent and follow Mr Sweet.

The Applicant demanded a pay increase and, due to not being given a pay rise for the previous two years, the Applicant also demanded that her pay increase reflect that. The separation of the $12,000 component of the pay increase was to appease the Applicant and recognise that she did not receive pay increase in the two prior years, however at no time did the Respondent owe the Applicant any money.

The Applicant did not earn the money in the two years prior to the pay increase not had the $12,000 been promised or even mentioned until the meeting with the Applicant wherein I did what I could to encourage her to maintain her employment with the Respondent…

I concede there was a separate figure of $12,000 as an incentive for the Applicant to maintain her employment with the Respondent. If the amount was back pay then it would be owing to her in a lump sum in the event she left her employment, and that was not the case…

I did not wish to pay an additional amount to the Applicant, however, as stated above, in an effort to appease the Applicant and keep her employed with the Respondent, I agreed to authorise a further pay increase of $12,000 to reflect her request.

Private Use of Motor Vehicle

[27] Bartley Burns submits that the Nissan was predominantly used for private purposes. It asserts, and Ms Hembrow appears to accept, that the Nissan averaged 20,000km annually and that the RACQ operating cost for a Nissan Navarra is 89.43 cents/km.

[28] It calculates the monetary value of private use, applying the well known approach from H.W. Fewings v Kunbarllanjnja Community Government Council 3, using a figure of 89.6% private use, yielding a monetary value of private use of $16,025.87.

[29] Two employees of Bartley Burns made statements, one deposing to approximately 20kms work travel per month; the other, 40kms per week.

[30] Bartley Burns derives the 89.6% figure by taking 40kms per week as the business use over 52 weeks and appropriating the balance of the estimated 20,000kms per annum to Ms Hembrow’s private use. They argue that Ms Hembrow’s travel between her home and workplace is not work-related travel, citing Zappia v Universal Music Australia Pty Limited T/A Universal Music Australia. 4

[31] In submissions and oral evidence it was suggested for Bartley Burns that Ms Hembrow’s suggestion of a 62.5% private use component was contrived. 5

[32] Mr Burns concedes that he and Mr Bartley had limited involvement in the day-to-day running of the Town Planning division of Bartley Burns. He says that Mr Sweet departed Bartley Burns in “unpleasant circumstances” and that he and Mr Bartley, formerly personal friends and business partners, had fallen out. Mr Bartley’s “departure from the business was not amicable”.

[33] He says Mr Bartley and Mr Sweet’s statements are biased.

[34] He denies that access to a utility vehicle was crucial for town planners. He says that off-road and rural work was rare, staff using other tools such as Nearmap rather than site visits.

Summary dismissal

[35] As to the dismissal, Mr Burns said in oral evidence that the decision was made by him alone, 6 and this was confirmed by Mr Bartley under cross-examination.7

Small Business Fair Dismissal Code

[36] Ms Hembrow’s dismissal can only be an unfair dismissal if the Commission is satisfied (among other things) “the dismissal was not consistent with the Small Business Fair Dismissal Code”: s385(c).

[37] The Small Business Fair Dismissal Code (the Code) provides:

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

[38] The Code is a legislative instrument: s.388(1). Expressions used in legislative instruments have the same meaning as in the enabling legislation: Legislative Instruments Act 2003 (Cth), s13(1)(b). Serious misconduct is defined by way of prescribed definition under s.12 of the Fair Work Act (the Act): see reg1.07. For the purposes of this jurisdictional question, the statutory definition is, at least, a useful guide to what the employer must have had in contemplation at the time for the conduct to fall within the Code. 8 Reg1.07 provides as follows:

1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

...

[39] The Act and the Code relieve small businesses from some of the evidentiary burden placed on larger businesses. But they do not permit dismissal at will, even for suspected serious misconduct. The requirement is for the employer to believe on reasonable grounds that the conduct was serious misconduct justifying immediate dismissal.

[40] Bartley Burns says the dismissal was consistent with the Code. It is uncontested that Bartley Burns is a small business within the definition. It is undisputed that Ms Hembrow was given an opportunity to have a support person at the meeting.

[41] In oral evidence Mr Burns mentioned another incident involving a cyclist claiming damage to a wheel or tyre after colliding with the Nissan, driven by Ms Hembrow who was using the vehicle for work purposes at the time. This was said to be further evidence of misconduct in the mind of Mr Burns when he dismissed her. In her oral evidence, Ms Hembrow denied the incident was an accident, believing the cyclist may have deliberately collided with the car. She said she was not aware that the matter was of particular concern to Bartley Burns. 9

[42] It seems Mr Burns also asked Ms Hembrow for additional photographs from her (broken) camera during a performance appraisal in March, but these were not provided. Ms Hembrow said that to access the photos would have been expensive, and as they were not pressed for, she took no further action.

[43] Mr Burns also said he sought advice from an engineer and a horticulturist 10 as well as examining Google maps and Nearmaps to inform himself of the position of the tree. The photograph provided by Ms Hembrow at the time of the incident apparently indicated red dirt or dust on the roof of the damaged Nissan, which he considered suspicious.

[44] Mr Merrell said in submissions that the belief Mr Burns formed justifying immediate dismissal was that Ms Hembrow was not being truthful about the December accident. 11

Consideration

The extra $12,000

[45] The parties contested the proper treatment of the additional $12,000 payment. In summary:

a) Bartley Burns says the payment was part of the contractually agreed salary, being $100,000 paid in weekly instalments plus an additional $1,000 paid monthly for 12 months, partly being inducement to remain with Bartley Burns and partly in recognition of past lower earnings;

b) Ms Hembrow says the extra $1,000 per month was back pay, referrable solely to past periods of employment, even though it was agreed upon in negotiations for the 2012-2013 contract: it was salary for those past periods agreed retrospectively and paid as back pay.

[46] It is perfectly open to parties to agree that the appropriate salary for a past period should be adjusted retrospectively. The question is how properly to characterise the payment for the purposes of ss.332 and 333 of the Act.

[47] The parties were not able to point me to any authority, and I was unable to find any case directly on point. This case is distinguishable from Daniels v Beames & Associates Accounting and Financial Services Pty Ltd 12, a case of conscious underpayment by the employer being made good.

[48] I am not convinced by Bartley Burn’s argument that the expression “back pay” used in the contract and on the payslips is merely an inapt expression. Further, the failure to address past superannuation contributions does not prove that the $12,000 is current salary. Likewise, Ms Hembrow’s not pursuing the remaining $1,000 does not go to the characterisation of the sum: she may yet choose to do so, but clearly cannot do so before this Commission.

[49] Ms Hembrow’s salary was increased significantly in her 2012 contract from $75,000 to $100,000 pa. The $12,000 was in addition to that increase, and said to be “back pay reimbursed … in the form of a bonus”. Those words need to be given some meaning. 13

[50] The evidence of Ms Hembrow, Mr Bartley and Mr Sweet are consistent with the submissions of Ms Hembrow that the proper interpretation of the contract is that the sum was back pay and not current salary. Mr Burn’s evidence and the lack of evidence as to superannuation treatment said to be supportive of his position, was not persuasive of the alternative, and do not explain the language of the contract. I am persuaded that the reference to back bay and reimbursement indicate the parties’ intention and that the word ‘bonus’ is indicative that the additional sum would not form part of the salary once the full amount had been paid. Monthly payment rather than a single lump sum is consistent with the idea of an incentive to remain at Bartley Burns.

[51] For the purposes of ss.332 and 333, I find the $12,000 was back pay for a retrospectively granted pay increase referrable entirely to past periods of employment and not earnings for the purposes of the high income threshold.

The Motor Vehicle

[52] Given that finding, the calculation of motor vehicle benefits is irrelevant to whether Ms Hembrow’s earnings exceeded the high income threshold. However, this matter was also contested and fully argued, and so I deal with it here.

[53] There is no dispute on the 20,000km and the use of the RACQ rate, but there are two competing figures for private use of the Nissan.

[54] Ms Hembrow and her witnesses agree that it is impossible to say for certain what the apportionment of use was because there were no logbooks. That seems right: no reliable evidence appears to exist. Ms Hembrow’s suggestion of 62.5% private use also is not based on evidence, and is open to the suggestion that it was contrived.

[55] There is sufficient consistency in the evidence for me to conclude that:

(a) staff were able to use the Nissan for business purposes during normal working hours;

(b) the Nissan was apt for certain business purposes (including cartage of large sign and equipment and off-road site access) and no other vehicle in the fleet was;

(c) the Nissan was used for business purposes, even if only by Ms Hembrow;

(d) private use was a significant component of the Nissan’s use;

(e) Ms Hembrow’s private use in commuting between home and work was about 43% of the 20,000km;

(f) other staff were able to use the Nissan for their private purposes although that was uncommon or rare;

(g) there is no objective way to determine the apportionment of use.

[56] Mr Burns admits he does not know much about the town planning division, and his submissions as to what staff in that division do on a day-to-day basis have to be read in that light.

[57] The methodology used by Bartley Burns was to ask two current employees about business usage of their private vehicles and apply the higher of the two figures to calculate what Bartley Burns says was Ms Hembrow’s reasonable business usage of the Bartley Burns vehicle in a past period for the purpose of calculating earnings.

[58] Bartley Burns’ Counsel in final submissions conceded:

“...that the onus is on my client to make good the case that the Applicant's annual rate of earning were above the high income threshold, but in the absence of any log books the Commission is entitled to draw reasonable inferences from the evidence that's before it.” 14

[59] Ultimately I am not convinced that the inferences suggested are in fact reasonable. They remain in the realm of conjecture. 15 In this case, there is evidence of modest personal use, leaving open the unpalatable possibility described by Dixon CJ in Jones and Dunkel16 as “a choice among rival conjectures”. His Honour cited Richard Evans & Co v Astley, and the following passage from that decision is relevant here:

“In questions of this sort where direct proof is not available it is enough [if] the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture.” 17

[60] It is not possible on the evidence to make any finding as to what the private use was, other than to say it was likely to be more than 43% and certainly less than 100%. Accordingly, Bartley Burns cannot discharge its onus beyond saying “it is likely to be more than 43%”.

[61] On that basis, private use is valued at something more than approximately $7,700, but no better estimate is open. Even if I am wrong in my decision about the back pay, Ms Hembrow’s earnings fell below the high income threshold.

Small Business Fair Dismissal Code

[62] In John Pinawin T/A RoseVi.Hair.Face.Body v Domingo 18 (Pinawin) a Full Bench considered for the first time dismissal for serious misconduct under the Code in the following terms (footnotes omitted):

[25] There have been few decisions discussing the requirements of the relevant paragraph of the Small Business Fair Dismissal Code in Australia and no Full Bench cases. Commissioner Deegan in French v Lufra Investment expressed her conclusion on consistency with this part of the Small Business Fair Dismissal Code as follows:

“[41] The respondent appeared to argue that the applicant’s conduct was serious misconduct as it was “wilful and deliberate behaviour by an employee that is inconsistent with the contract of employment”. I am not satisfied that the applicant’s conduct in initially refusing to restore the shed to its former state or refusing to discuss the matter with Ms Holland some short time later was, in all the circumstances “wilful or deliberate behaviour” or in fact conduct so serious as to justify summary dismissal. I will expand on my reasons for reaching this conclusion in dealing with the matter of whether the dismissal was harsh, unjust or unreasonable. As summary dismissal was not warranted in this case the dismissal was inconsistent with the Code.”

[26] In our view this approach is not consistent with the requirements of the Small Business Fair Dismissal Code as it equates the test in the Code with a determination by the tribunal of whether summary dismissal was warranted.

[27] Deputy President Bartel in Narong Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana Tree Cafe said:

“[60] At the outset it is appropriate to note that unlike a consideration of the dismissal of an employee of a business that is not a small business employer, the function of FWA is not to determine on the evidence whether there was a valid reason for dismissal. That is, the exercise in the present matter does not involve a finding on the evidence as to whether the applicant did or did not steal the money. The application of the Small Business Fair Dismissal Code involves a determination as to whether there were reasonable grounds on which the respondent reached the view that the applicant’s conduct was serious enough to justify immediate dismissal. As such, the determination is to be based on the knowledge available to the employer at the time of the dismissal, and necessarily involves an assessment of the reasonableness of the steps taken by the employer to gather relevant information on which the decision to dismiss was based.”

[28] Senior Deputy President O’Callaghan in Harley v Rosecrest Asset Pty Ltd T/A Can Do International said:

“[8] For an employer to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal, it is firstly necessary for the employer to establish that the employer did in fact hold the belief that as a matter of fact that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) that the conduct justified immediate dismissal. This is to be contrasted to the provisions of s.387(a) where FWA, in determining whether there was a valid reason for the dismissal, must find whether the conduct in fact occurred.

[9] Secondly, it is necessary for the employer to establish that there are reasonable grounds for the employer holding the belief. It is thus necessary for the employer to establish a basis for the belief held which is reasonable. In this regard it would usually be necessary for the employer to establish what inquires or investigations were made to support a basis for holding the belief. It would also ordinarily be expected that the belief held be put to the employee, even though the grounds for holding it may not be. Failure to make sufficient inquiries or to put the accusation to the employee in many circumstances might lead to a view that there were no reasonable grounds for the belief to be held.”

[29] We believe that the approach and observations in these two decisions are correct. There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.

[63] A Full Bench in Steri-Flow Filtration Systems (Aust) Pty Ltd v Erskine 19 (Steri-Flow), approved the reasoning in Pinawin in the following terms:

[29] As we have indicated, the Code provides that it is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. In Pinawin a Full Bench of FWA held that this involves consideration of:

● whether the employer held a belief at the time of the dismissal that the employee’s conduct was sufficiently serious to justify immediate dismissal, and

● whether the belief was based on reasonable grounds, which incorporates the concept that the employer has carried out a reasonable investigation into the matter.

[64] It was not until some months after the crash that Mr Burns investigated the incident. The evidence does not satisfactorily explain the lengthy delay, during which time Ms Hembrow apparently discharged her duties to the satisfaction of Bartley Burns. Mr Burns certainly asked Ms Hembrow for the photos, but appears not to have pressed the matter. He was satisfied enough for her to continue her employment.

[65] The evidence said by Mr Burns to lead him to the belief of serious misconduct was a series of images obtained from Google Maps and Nearmap. It was also suggested he had consulted an engineer and a horticulturist although there was no evidence of how such consultations informed his view as to the reasonableness of immediate dismissal. Such investigation appears to fall short of the standard contemplated in Harley and approved in Pinawin.

[66] Further there is no explanation of the misconduct alleged to have been committed by Ms Hembrow in December 2012 save to allege that the insurance claim was false. Ms Hembrow says that Mr Burns’ alternative explanation for the damage to the car was that someone had jumped on it, which she flatly denied, and which does not seem plausible.

[67] Mindful of Pinawin and Steri-Flow, my concern for the delay and the identification of the alleged misconduct is not a quest for what the misconduct was or whether it was serious misconduct, but whether Mr Burns had, at the relevant time, a belief based on reasonable grounds that the conduct justified immediate dismissal. If the conduct cannot be pointed to, it is difficult to see how such a belief can be formed.

[68] Mr Merrell referred to the serious misconduct in the following way:

“...making a representation to an employer that damage to the friend's car occurred in a particular way when it did not occur that way, such that the employer made a claim on its insurer to indemnify [the friend] for the damage to her car which didn't occur in the way that the applicant said it occurred.” 20

[69] Mr Bartley now says he never thought the conduct sufficiently serious to warrant summary dismissal and that his signature was affixed to the dismissal letter without prior consultation. I note Mr Burns says that because of poor relations with his former business partner, Mr Bartley’s evidence is unreliable and I take that into account. However, Mr Burns’ evidence itself was not convincing. There were changes in the evidence between the first and second statement, and his oral evidence did not lead to a conclusion that he had the requisite belief justifying immediate dismissal as opposed to some other disciplinary sanction or further investigation.

[70] On the evidence before me, including the written and oral evidence and submissions I cannot conclude that Bartley Burns believed on reasonable grounds that Ms Hembrow’s conduct was so serious as to justify immediate dismissal.

[71] The jurisdictional objections are dismissed.

[72] The matter will now be returned to the Unfair Dismissals team to be processed for arbitration.

COMMISSIONER

Appearances:

Ms K Prior for the Applicant.

Mr J Merrell of counsel for Bartley Burns Pty Ltd.

Hearing details:

2014.

Brisbane:

6 and 13 May.

 1   Transcript dated 13 May 2014 at PN850, PN870 and PN1273

 2   Transcript dated 6 May 2014 at PN379, PN398, PN563 and PN576; and Transcript dated 13 May 2014 at PN1348,

 3   P9195

 4   [2012] FWA 3208 affd: [2012] FWAFB 6108

 5   Transcript dated dated 13 May 2014 at PN1012-PN1048, PN1422

 6   Transcript dated 6 May 2014 at PN214

 7   Transcript dated 6 May 2014 at PN614 and following

 8   There is no settled jurisprudence on whether the prescribed definition is directly applicable to unfair dismissals, but many cases have directly or by implication applied the definition (eg Dissanayake v Busways Blacktown Pty Ltd[2011] FWA 3549, [2011] FWAFB 6487; Symes v Linfox Armaguard Pty Ltd [2012] FWA 4789, [2012] FWAFB 7877; Carter v Qantas Airways Limited[2011] FWA 8025, [2012] FWAFB 5776; Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350; Transport Workers Union v School Bus Contractors Pty Ltd [2011] FMCA 28; Williams v Canberra Urology Pty Ltd [2012] FMCA 945; Ross v R.C. Mackenzie and Sons Pty Ltd [2013] FMCA 31. DP Sams applied the definition as applicable in considering the merits of an unfair dismissal application in a small business dismissal code matter: Williams v Dtarawarra Pty Ltd t/a Dtarawarra Aboriginal Resource Unit [2011] FWA 5091. VP Watson dissenting in Walsh v Ambulance Victoria[2013] FWCFB 6867, [32] was of the view that the statutory definition was not directly relevant but none-the-less thought the common law and statutory tests “not dissimilar” quoting at length from Wintle v RUC Cementation Mining Contractors Pty Ltd (No.3) [2013] FCCA 694

 9   Transcript dated 13 May 2014 at PN882

 10   Transcript dated 6 May 2014 at PN430-PN431

 11   Transcript dated 13 May 2014 at PN1471 and surrounding paragraphs

 12   [2010] FWA 5072

 13   Transcript dated 13 May 2014 at PN1404

 14   Transcript dated 13 May 2014 at PN1444

 15   Carr v Baker (1936) 36 SR (NSW) 301, 306-7 per Jordan CJ; Jones v Dunkel (1959) 101 CLR 298, 305 per Kitto J;

 16 [1959] HCA 8

 17  Richard Evans & Co Ltd v Astley [1911] AC 674, 687 per Lord Robson

 18   [2012] FWAFB 1359

 19   [2013] FWCFB 1943

 20   Transcript dated 13 May 2014 at PN1510

Printed by authority of the Commonwealth Government Printer

<Price code C, PR551880>