Gail Kemp v Allied Brands Limited T/A Kenny's Cardiology

[2010] FWA 2769

[2010] FWA 2769

FAIR WORK AUSTRALIA

DECISION

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

Gail Kemp
v
Allied Brands Limited T/A Kenny's Cardiology
(U2009/12859)

COMMISSIONER HARRISON SYDNEY, 19 APRIL 2010

Termination of employment – unfair dismissal – meaning of dismissed.

[1] This decision arises from an application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) by Mrs Gail Kemp following the termination of her employment by Allied Brands Limited trading as Kenny’s Cardiology (the Respondent).

[2] The matter did not settle at conciliation and the application was set down for Arbitration Conference and Hearing on 5 March 2010. At the commencement of proceedings I conferred with both parties jointly and individually in an attempt to reach a negotiated settlement. The Respondent’s representative was unable to obtain instructions and the matter reverted to formal proceedings.

[3] Mrs Kemp was self-represented and the Respondent was represented by Mr Mark Rothwell, Corporate Advisor. The evidence was by way of sworn statements and statutory declarations provided pursuant to previous directions issued to the parties.

[4] The matters for determination are whether Mrs Kemp was dismissed within the meaning of s.386 of the Act and if so whether the dismissal was unfair within the meaning of s.385 of the Act. In this matter the Respondent is not a small business and there is no question of redundancy.

Background

[5] The Respondent is a national greetings card, gifts and variety retailer. Mrs Kemp commenced employment in Port Macquarie in June 2008 shortly before the store was opened. She was appointed Store Supervisor in October 2008. In January 2009 Mrs Kemp met with a Director of the Respondent to discuss the prospect of her purchasing the Port Macquarie store. In July 2009 she entered a Confidentiality Non Disclosure Agreement to obtain a copy of the store’s Profit and Loss statement.

[6] Between March and July 2009 the overall business went through a restructuring which in part involved a turnover of senior State and National management.

[7] On 28 September 2009 Mrs Kemp was interviewed for the position of Store Manager which she was required to apply for several weeks earlier. What transpired after the interview is the subject of this decision.

[8] The Respondent asserts that Mrs Kemp resigned her position as a casual supervisor by abandoning her employment on 29 September 2009. They lodged a formal objection and an application to dismiss. Mrs Kemp asserts she went home sick and was replaced by another employee one hour after she left the store.

Submissions

[9] Mrs Kemp’s submission can be summarised as follows:

• On 28 September 2008 Mr Bert Cotte, Operations Manager – Corporate Stores and Mr Ian Gallagher, Customer Service Manager attended the Port Macquarie store. A week before, Mrs Kemp was asked by Mr Cotte to arrange for persons to be available for job interviews whilst he was in Port Macquarie. Messrs Cotte and Gallagher were recently appointed “… to get the company back on track as it was apparently running at a loss …” 1;



• During the day Messrs Cotte and Gallagher conducted customer service training with the staff and also interviewed Mrs Kemp for the position of Store Manager;



• Mrs Kemp described her job interview as follows:

“That day I was also being interviewed for the position of Store Manager, which I had to apply for in August 2009, through SEEK, several weeks beforehand, and I thought this was a slap in the face, considering I had been the Store Supervisor for 10 months, and not once was my work performance or customer service ever questioned.

The interview with Bert Cotte and Ian Gallagher was quite informal and questions were asked, and answered. The subject of my interest in purchasing the store was also discussed. As I was the Store Supervisor, and had intentions of purchasing the store, I wanted some questions answered regarding a few things. Our rent was in arrears, stock that I had ordered had not been arriving as the accounts were on hold, the profit and loss statement that Ian Gallagher had sent me didn’t seem right.

I also told them that I had been extremely frustrated since February as I had been trying to have my employer superannuation contributions sorted out, as I had not received any since October 2008, and had spoken to several people over this issue which still had not been resolved. I have had no option but to inform the Australian Taxation Office and they are now making enquiries on my behalf.” 2

• On 29 September 2008 Mrs Kemp and Mr Cotte conducted an interview with a young job applicant in which Mrs Kemp described Mr Cotte’s behaviour as “quite disturbing” in the manner in which he spoke to the applicant to the extent that she started to feel physically sick.

“After the interview, Bert Cotte brought up the subject of my interview and told me that I was unsuccessful at obtaining the position of store manager. He told me that I had answered my questions, in his opinion, by saying things that I thought they wanted to hear. I told him I answered the questions as honestly as I could, and that I was passionate about my job, and the shop, and if I wasn’t interested, why would I spend time in there on my days off, use my own computer and internet at home for work related matters or go to the trouble of enquiring about the sale of it? He told me that it would be very unwise for me to even think about buying the store, as I have no experience and no qualifications. He told me this in a particularly demeaning manner. After he said that, he said he didn’t doubt my passion and that I would still be the store supervisor and he would pay me an extra $1 an hour, and see how I go over the next couple of months.

On returning to the store, Ian Gallagher was waiting for Bert Cotte with another man, and they all left the store. At this stage I was starting to feel like I was going to have a panic attack. The stress I was feeling was extreme. My mouth was very dry, my heart palpitating and I had a severe pain on the right side of my head. I tearfully told one of my colleagues Shannon Clayton that I had to leave the store, and to tell Bert Cotte that I had gone home sick. I could not face him.” 3

“Later that afternoon I discovered that my position had been replaced by Chantelle Coughlan, one of my colleagues and that one of the people who had been interviewed after I left had already started training on the floor. Chantelle Coughlan is now doing my job and is on 30 -38 hours a week.

On Wednesday morning 30^th September 2009 I rang Bert Cotte to discuss the previous day’s events and to enquire about my replacement. He told me that as I had resigned he had to quickly arrange the rosters, and the lady that they interviewed was perfect for the job, so they started her immediately. I told him I hadn’t resigned, I just had to leave the store due to my health, and after hearing the information about the replacement I wanted to know where I stood. He said ‘We no longer need your services’. I said ‘So I have no hours?’ to which he replied, ‘Yes, that is correct.’ I was so shocked to hear that, I told him to have a nice day and hung up. After my nerves had settled I rang him back to find out the reason for my dismissal and left a message for him to ring me. Instead of arriving at work at 12.30 for my shift, I went and took my key back as there were only four keys - one for each staff member, and collected a few belongings, still stunned at what had happened.

On Wednesday evening I received a forwarded email from Chantelle Coughlan, which had been sent to head office by Bert Cotte that morning which said that I had resigned the day before. This was sent shortly after my conversation with him.

On Thursday morning 1^st October 2009 I spoke to Bert Cotte again and enquired the reason for my dismissal. He said he didn’t dismiss me, that I had resigned. I asked him if I had told him I had resigned. Or did I give him a written resignation? His answer was that he was told by one of my colleagues that I had quit because I did not get the manager’s job and that I left my key there and walked out. I replied by telling him that for someone who is a professional like himself it is hard to believe that he makes decisions on hearsay, and that I had resigned, he would have a letter, or I would have told him to his face and that I still had my key until I handed it in on Wednesday afternoon, a few hours after I was told I didn’t have a job. I was expecting to return to work on the Wednesday for my usual shift. I asked him again the reason I was dismissed, and he said he didn’t believe I would be able to grow with the company and my replacement will benefit by not having me in the store. I then asked him to tell me at what point he had decided to dismiss me, and his reply was that he is not confident in my customer service, or my willingness to adapt to the customer service programme. This reason was because of the incident the day before when I was behind the counter fixing up Ian Gallaghers mistakes, instead of handing out chocolates.

In 15 months of working at Kenny’s Cardiology, I had never had any bad reports, counselling, or customer complaints. Not once was my work ethics questioned. In fact, of 34 years working in retail, I have never had a customer complaint against me.” 4

• Mrs Kemp acknowledged that Mr Cotte attempted to call her at home but she was in transit at the time. She did not respond to his message to call him back at the time because she was not in a “… fit state to speak to him”.



• Attached to Mrs Kemp’s statement is a Statutory Declaration sworn by Ms Shannon Clayton. The declaration states:

“On Tuesday 29^th September 2009, Gail Kemp returned to the store after having a meeting with Bert Cotte.

She started crying and was visibly stressed and upset and told me she could not face Bert Cotte or continue her shift.

Gail asked me to tell Bert Cotte and Ian Gallagher that she had gone home sick, and left the store.

Ian Gallagher came back into the store and asked where Gail was. I told him she had gone home sick. When Bert Cotte found out, he rang Gail’s home number to see if she was ok.”

• Also attached to Mrs Kemp’s statement is a Statutory Declaration sworn by Mrs Kemp’s daughter, Kylie Deborah Kemp. The declaration states she (Kylie Kemp) was home alone when she received a phone call from Mr Cotte who stated he had been informed “… my mother had left work at Kenny’s Cardiology, as she was feeling unwell. He had called to see if she was OK.”

[10] In response the Respondent submitted that Mrs Kemp resigned from her position by abandoning her shift on 29 September 2009. She did not advise her superiors that she was sick and going home. Mrs Kemp’s action to leave the store was irresponsible. She failed to communicate after messages were left on the day and her actions constituted an instant dismissal offence.

[11] Mrs Kemp’s version of events of 29 September were contested by the Respondent. In summary:

• Mr Cotte asserts that after he advised of Mrs Kemp of her unsuccessful application for the Manager’s position she proposed a name of a person whom she thought would be more suited for the role.



• Mr Cotte claimed that Mrs Kemp took the news of her failed application well, “although disappointed and the meeting ended amicably”.



• He disputed the Statutory Declaration of Shannon Clayton that Mrs Kemp had gone home sick, whilst accepting that he was told that she had gone home upset. Mr Cotte also disputed the recollection of events outlined in Kylie Kemp’s Statutory Declaration regarding him acknowledging Mrs Kemp had gone home ill.



• Attached to the Respondent’s submissions is a Statutory Declaration sworn by Bertrand Cotte which, in part, states:

“(1) On Tuesday 29^th of September, 2010, Bert Cotte and Ian Gallagher met with a business colleague for a coffee at Settlement City, Port Macquarie after the (sic) BC had met with Gail Kemp. When BC and IG returned to the Kenny’s Cardiology store, they were informed that Gail had left the store. The two staff members intimated that Gail was upset, had said that she would not be returning, and would be handing in the keys the following day. This left us surprised (as GK had been quite composed when BC met with her to advise her that she had been unsuccessful in her application for the role of Store Manager). This left us with a staffing shortage, and without a leader in the store.

(2) To try and understand better what Gail was thinking and to check on her, I called her home number (after trying her mobile first). Her daughter answered the phone. I requested to speak with Gail. I told her who I was, and I was seeing how her mother was as she had left work suddenly. She informed me that GK was not home yet, and would pass on the message for GK to give me a call. Tuesday afternoon/evening passed without a return call from Gail.

(3) GK returned her keys to the store on Wednesday the 30^th of September.

(4) Gail’s identified weaknesses in her application for the Store Managers [sic] role included the following points:

• Didn’t display a high ability to adapt to change.

• Gail did not respond positively to the operational changes communicated and implemented during the training.

• Her comments recently have stated that she obviously doesn’t want to adapt to [the] way we now deliver customer service in the Kenny’s stores across the country.

• Gail did not have a good grasp of how the numbers (sales versus profitability) impact the business. This was surprising considering she wanted to but the business.

• Gail didn’t demonstrate the potential to be a good trainer or manager of performance during the time we spent with her and the duration of the staff meeting.

• When we had discussed the expectations of the role, Gail had difficulty recognising how her behaviours/habits would have to change to succeed in the role.

• These observations were also prevalent in Ian Gallagher’s discussions with GK in her inquiries about buying the store. The elements above combined would not have given the store the leadership required to grow the business.

(5) Payroll reports state that Gail worked an average of 8.45 hours a week in her 65 weeks with Kenny’s Port Macquarie. In the last 13 weeks of her time with Kenny’s she worked an average of 21.9 hours per week.”

• Also attached to the Respondent’s submissions is a Statutory Declaration sworn by Ian Gallagher which states:

“On Tuesday 29^th September 2009 I returned to the store after a meeting with Bert Cotte and noticed that Gail Kemp was not in the store. I asked one of the staff (I cannot recollect who) where Gail was and was told by the staff member “she has just gone home”. I then asked why and was told “I don’t know why she was upset”.

[12] Following the initial conciliation of the matter and prior to the proceedings before me, the Respondent through Mr Cotte made a formal offer of reinstatement on condition that the matter before the Tribunal be withdrawn.

[13] Mrs Kemp declined the offer because the position of Casual Costumer Service Staff member was a demotion from Store Manager and the hours of work and rate of pay were less than previously applied.

Considerations and Findings

[14] I turn firstly to consider whether Mrs Kemp was dismissed within the meaning of s.386 of the Act. The relevant section reads:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer. ”

[15] The Respondent contends Mrs Kemp abandoned her employment and effectively resigned her position.

[16] Mr Cotte was the crucial player for the Respondent but he did not appear in the proceedings before me. Had he done so the disputed facts could have been properly tested by way of first hand submissions or evidence.

[17] The written submissions of the Respondent tabled as Exhibit R1 refer to “the statement of Bert Cotte” on three occasions. Mr Cotte provided a sworn Statutory Declaration; however, the declaration does not attest, affirm or refer to his statements that Mrs Kemp took the news of her failed application well nor does it affirm that Mrs Kemp was abusive and hung up on him during a phone conversation on 1 October 2009.

[18] In such circumstances I have given greater weight to the version of events described by Mrs Kemp and corroborated by the Statutory Declarations of Shannon Clayton and Kylie Kemp.

[19] It is well accepted that jurisdiction can only exist where termination of employment at the initiative of employer has occurred. "Initiative" is relevantly defined in the New Shorter Oxford Dictionary as:

“initiative 1. The action of initiating something or of taking the first step or the lead; an act setting a process or chain of events in motion; an independent or enterprising act.”

This definition was considered in Mohazab v Dick Smith Electronics Pty Ltd 5 (Mohazab) where a Full Court of the Industrial Relations Court of Australia said, “... a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship.”

[20] In Mohazab, the Full Court also said:

“In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.” 6

[21] In this matter there is no basis to find Mrs Kemp abandoned her employment. I accept that she left the store in a highly emotional state. She requested a fellow employee to advise Mr Cotte that she had gone home sick. Her conduct cannot be characterised as a repudiation of the contract of employment giving rise to the concept of abandonment of employment.

[22] Within two hours Mrs Kemp’s position was filled by the promotion of another employee and an additional person was employed.

[23] It was the precipitate action of the Respondent in unilaterally filling her position without prior discussion or consultation which lead to the cessation of the employment relationship.

[24] Accordingly, I have concluded that Mrs Kemp was dismissed from her employment by the Respondent within the meaning of s.386 of the Act.

Was termination harsh, unjust or unreasonable?

[25] The criteria for considering this question are set out in s.387 of the Act. I have considered all of the circumstances and submissions in this matter and find that there was not a valid reason for the termination.

[26] The chain of events on the afternoon of 29 September and the morning of 30 September 2009 led the Respondent to erroneously assume that Mrs Kemp resigned her position. Furthermore, I cannot discount the possibility that this assumption was aided by the desire to restructure the business without Mrs Kemp. Mr Cotte’s Statutory Declaration clearly indicates his view that Mrs Kemp would not fit into the new business strategy.

[27] The termination of employment was not a reasonable response to Mrs Kemp’s conduct. The rush to replace her resulted in a breakdown of procedural fairness.

[28] In all of the circumstances I find that the termination of Mrs Kemp’s employment was harsh, unjust and unreasonable.

Remedy

[29] Mrs Kemp does not seek reinstatement. Whilst it is the primary remedy, in this matter reinstatement would be impractical and inappropriate.

[30] It was Mrs Kemp’s submissions that she has actively sought to mitigate her loss suffered as a result of the termination. She provided documentation to show she has been in receipt of a Newstart Allowance of $411.50 a fortnight since 13 October 2009.

[31] Her hours of work and income varied over the time of employment. Mr Cotte declared that her hours of work were an average of 8.45 a week in her 65 weeks of employment. In the thirteen weeks prior to termination she worked an average of 21.9 hours a week. Mrs Kemp submitted payroll records which showed she was paid $20.10 an hour. She stated she worked a rotation of 19 hours one week and 22 hours the next. For the purposes of calculation of any amount to be paid in lieu of reinstatement, I adopt 20.5 hours per week as her regular hours of work.

[32] I have decided that an order for compensation of twenty six weeks salary less any amounts received by her from the Newstart Allowance is the appropriate remedy.

[33] In applying the above calculations and deducting Newstart benefits, I will make an order that within fourteen days of this decision the Respondent is to pay to Mrs Kemp a gross sum of $5364 to be taxed as appropriate.

COMMISSIONER

Appearances:

G. Kemp, Applicant

M. Rothwell for Allied Brands Limited T/A Kenny’s Cardiology

Hearing details:

2010.

Sydney:

5 March.

 1   Exhibit K1 – Statement of Gail Kemp at PN7.

 2   ibid., PN11-13.

 3   ibid., PN19-20.

 4   ibid., PN22-26.

 5 (1995) 62 IR 200 at 205.

 6   ibid., pp205-206.

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