Garry Alexander Holliday-Smith v Johnson Prestige Realty Pty Ltd T/A LJ Hooker Pymble

[2011] FWA 3664

[2011] FWA 3664

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Garry Alexander Holliday-Smith
v
Johnson Prestige Realty Pty Ltd T/A LJ Hooker Pymble
(U2010/10734)

ROBERTS, COMMISSIONER SYDNEY, 17 JUNE 2011

Application for unfair dismissal remedy.

[1] This decision concerns an application lodged on 16 July 2010 by Mr Holliday-Smith (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (the Act). The Respondent to Mr Holliday-Smith’s application is Johnson Prestige Realty Pty Ltd T/A LJ Hooker Pymble (the Company or the Respondent).

[2] The application was dealt with by a Fair Work Australia conciliator on 13 August 2010 but the conciliation was unsuccessful. The Company also raised a jurisdictional objection, claiming that it is a small business employer which employed fewer than 15 full time employees at the time of the termination of the Applicant’s employment. The jurisdictional objection was heard before Commissioner Cargill in Sydney on 1 and 28 October 2010 and the Commissioner made a finding that the Company is not a small business employer and dismissed the motion. The matter was then referred for arbitration.

[3] The arbitration came before me for hearing in Sydney on 14 April 2011. Mr Holliday-Smith represented himself and Mr A Riley, the Company’s Office Manager, appeared for the Respondent. Both Mr Holliday-Smith and Mr Riley gave sworn evidence in support of their respective cases.

Background

[4] Mr Holliday-Smith commenced employment with the Company as a member of its sales staff on 5 November 2009. He was summarily dismissed for alleged gross misconduct on 2 July 2010 for allegedly being absent during office hours with no reasonable explanation. The Applicant maintains that he returned to his home during his lunch break to retrieve documents requested by an employee of the Company, Ms M Cross, which related to his superannuation. In his form F2 (application for unfair dismissal remedy), the Applicant said: “It was totally reasonable for me to attend my home during my lunch break to pick up my superannuation details as requested, particularly so as I rarely ever took my lunch break. The obvious fact that my superannuation had not been previously paid at all cause me some alarm and I wanted to provide the details requested as a matter of urgency.”

Evidence

Mr Holliday-Smith

[5] The Applicant gave sworn evidence and submitted a witness statement 1. The witness statement also comprised Mr Holliday-Smith’s written submissions.

[6] The Applicant’s witness statement said that it was harsh, unjust and unreasonable for the Respondent to summarily dismiss him “when the employer had no reasonable grounds to believe that my conduct was sufficiently serious to justify immediate dismissal.” He had been given no indication that summary dismissal was a possible outcome from his discussions with the Respondent and that he was denied his right to properly respond to any allegations against him or to have a support person present. In addition, the Respondent did not give any consideration to his responses and he received no opportunity to respond to allegations made against him.

[7] Mr Holliday-Smith went on to say that he attended his home to retrieve documents which had been requested by Ms Cross, a receptionist for the Company. Those documents related to his superannuation, which had not been paid on his behalf.

[8] In cross-examination, Mr Holliday-Smith said that he was approached by Ms Cross when he arrived at the Company office on 2 July 2010 and that she “told me that she needed my superannuation details. I told her that I didn’t have them on me and she told me it was very important that I give it to her.” 2 The Applicant agreed that Ms Cross did not specify that he was to return home during working hours to retrieve the documents.3

[9] Mr Holliday-Smith agreed that when he left the office he entered details into a ‘sign-in book’ indicating that he was to be absent doorknocking. He went on to say that on reaching his car, he decided to go home first to obtain the superannuation documents. 4

[10] The Applicant denied giving false information as to his whereabouts when contacted by phone by Mr Riley. 5 Mr Holliday-Smith agreed that he was asked by Mr Riley to return to the office but said that he had no idea why that request was being made.6

[11] In further cross-examination, the Applicant:

• Agreed that Mr Riley had asked him about his specific whereabouts during the telephone conversation. He had told him that he was on his way to do doorknocking. 7



• Agreed that, on his return to the Company office, Mr Riley informed him that he had been parked near the Applicant’s home when the telephone call was made. 8



• Agreed that he told Mr Riley that Ms Cross did not tell him to go home to obtain the superannuation documents. 9



• Said that during the interview with Mr Riley, Mr Riley had confirmed with Ms Cross that she had not requested the Applicant to go home. 10



• Denied that he is in possession of files which are the property of the Company. 11

Mr Riley

[12] Mr Riley gave sworn evidence and submitted a witness statement 12. The witness statement also comprised the Company’s written submissions.

[13] Mr Riley’s witness statement said that the Applicant “was dismissed due to gross misconduct in the workplace”. On 2 July 2010, Mr Holliday-Smith entered details in the office sign-in book “that he was leaving the office of LJ Hooker Pymble to go ‘doorknocking’ (This is a way of prospecting for new business)”. The sign-in book specified two streets that Mr Holliday-Smith intended to go doorknocking in.

[14] Mr Riley’s statement went on to say, in summary:

• “There had been suspicions within the office that Mr Holliday-Smith was not always where he claimed to be as he was regularly missing during the day for extensive periods of time and no formal explanations received other than that he was ‘out doorknocking’.”



• That he had been suspicious and had driven past the Applicant’s residence and viewed him there for the period from 11 am to 11.40 am approximately. He then telephoned the Applicant from his car to ask him to explain his whereabouts.



• That during the telephone conversation, Mr Holliday-Smith told him that he was out doorknocking and Mr Riley then asked him to return to the Company office.



• That during the subsequent meeting at the Company office, the Applicant continued to maintain that he had been out doorknocking.



• The Applicant was guilty of falsifying attendance records and of being untruthful during discussions with him.



• The Applicant “was dismissed when he became very aggressive, threatening and continually used bad language”.



• “During the summary discussion, Mr Holliday- Smith was advised that the conversation may lead to his dismissal, Mr Holliday-Smith also had the opportunity to have another person to assist in the discussion.”



• Ms Cross attended the meeting between him and the Applicant “so as the conversation could not be misconstrued in anyway as he was concerned as Mr Holliday-Smith became aggressive and refused to listen at times and was not interested in discussing the issue.”



• The Applicant was sent a letter of termination immediately after his dismissal on 2 July 2010.



• “Mr Holliday-Smith was given every opportunity to respond to his conduct. He repeatedly was offered the opportunity to tell the truth, yet refused to do so until he was advised that he had been viewed at his residence for an extensive period of time. During the dismissal conversation, Mr Holliday-Smith refused to discuss the issue and repeatedly swore at [Mr Riley] when given opportunities to discuss the issue at hand. He specifically said ‘I don’t care’ and that he thought it was ‘a joke’.”



• “Correct procedures were followed during the summary dismissal. The issue was discussed with Mr Holliday-Smith asked to respond. He refused to do so in a sensible manner and became aggressive and was asked to leave the office immediately after his dismissal as he was aggressive and a threat to other staff members.”



• He manages a team of more than 20 employees and followed all correct procedures in effecting the termination of the Applicant’s employment.



• The Applicant “was made aware at the time of dismissal about the reasons he was dismissed and also was offered the opportunity to respond to these reasons.”



• The Applicant went home for an extended period outside the usual lunch period. “If he had genuinely needed to go home for an urgent reason, he should have sought permission and he would have been in a position to be honest when he was asked as to his whereabouts.”



• The Applicant’s performance had not been at an acceptable level and he had been given a warning letter.



• “Mr Holliday-Smith was warned verbally several times he needed to take advice as he was not completing tasks or following instructions in the correct way during his employment (this was witnessed by several staff). Many staff members commented on his arrogant attitude and the fact he was never willing to take advice on board as he knew better than other agents with many years experience within the industry when had none.”



• The Applicant had been warned for smoking on a client’s property.



• The Applicant “constantly arrived late and left early as he was ‘doorknocking’ hence the reason suspicions were rife as to his whereabouts”.



• The Applicant is still in possession of Company property.

[15] In supporting oral evidence, Mr Riley expanded on alleged performance issues which arose during the Applicant’s employment and his behaviour in relation to the incident that led to the ending of the employment relationship.

[16] In cross-examination, Mr Riley:

• Agreed that the warning letter referred to by him was issued one day before the termination of employment. 13



• Said that the warning letter was unrelated to the dismissal, which would have taken place in any event. 14



• Said that he was alerted to the Applicant leaving the Company office by Ms Cross. 15



• Agreed that it would have taken him some 20 minutes to drive to the Applicant’s home. 16



• Repeated his evidence that he spent at least 40 minutes in his car in the vicinity of the Applicant’s home. 17



• Denied that any employees of the Company have been treated in a manner that forces them to resign. 18



• Denied that Mr Holliday-Smith had obtained a document from Ms Cross during the meeting of 2 July 2010 concerning superannuation. 19



• Said that he felt threatened by the Applicant during the 2 July 2010 meeting. 20



• Said that the Applicant’s employment was terminated solely due to his actions on 2 July 2010. 21



• Said that Ms Cross had prepared a letter for the proceedings but he did not feel it necessary for her to attend the hearing. 22

The written statement from Ms Cross

[17] A written statement from Ms Cross has been alluded to elsewhere in this decision and therefore it is fair to set that statement out in full:

“I [Ms Cross], confirm that I was a witness during the dismissal of Mr Holliday-Smith on the 2nd July 2010.

I have read the document prepared by Mr Riley (attachment 2) 23 that details the conversation that took place during the dismissal & confirm that it is a true representation of the actual conversation that took place on the 2nd July 2010 when I was present.

I can confirm that I NEVER asked Mr Holliday-Smith to leave the office of LJ Hooker Pymble to attain his superannuation details.

My presence to witness the dismissal conversation was requested by [Mr Riley] (Office Manager), NOT Mr Holliday-Smith.

If you require any further information, please don’t hesitate to contact me directly on [xxxx xxx xxx].”

Written submissions

[18] As both sides adopted their written submissions as witness statements and those witness statements have been summarised above, I will not repeat that material here.

Oral submissions

Mr Holliday-Smith

[19] In his oral submissions, Mr Holliday-Smith argued that: “there’s a pattern that can be seen in the evidence that they themselves have provided which could lead to a conclusion that the events of 2 July were a deliberate set-up on their part with regard to terminating me on that day.” 24

[20] The Applicant went on to say that it was reasonable of him “to have done a small diversion to my home, which is in Turramurra, on my way to do doorknocking on streets in Miowera and Ellalong Streets which are in North Turramurra. I submit, Commissioner, that it was reasonable for me to do that to go and collect my superannuation details.” 25

[21] Mr Holliday-Smith also submitted that as he left the Company office at 11.45 am, it would have been impossible for Mr Riley to have observed him at his home during the period 11 am to 11.40 am. He is unable to provide a telephone record but recalls that the phone call from Mr Riley was received at 12.06 pm. In relation to Ms Cross, the Applicant said: “if you look at the train of events of the day, there can only be one conclusion that is reached why Mrs Cross isn’t here and that’s because she can’t help. I submit that the view that should be taken from Mrs Cross’ lack of attendance is wholly and solely that she wouldn’t assist LJ Hooker Pymble. From my part I am highly disappointed that she’s not here. I expected her to be here and, if I’d known that she wasn’t going to attend, I would have subpoenaed her. But the question has to be asked why would a critical person who is going to be the only witness that can back up the claims of Mr Riley, the question would have to be why would so important a person to the case of LJ Hooker Pymble not be in attendance here today?” 26

[22] In closing, Mr Holliday-Smith said that the Company should have taken into account his reasonable feelings of disturbance when he found that the Company had not paid any superannuation contribution on his behalf for some eight months. The Applicant does not seek reinstatement but claims compensation.

Mr Riley

[23] In his oral submissions, Mr Riley argued that the Applicant is “not actually disputing the fact that he was at his residence. He’s not disputing the fact that he didn’t advise us of that, that he was attending his residence, and it all seems to be clouded in something to do with superannuation …” 27

[24] He went on to say: “We specifically gave him a warning not a termination and asked him that he needed to – you know, said to him that he needed to increase his performance and then the next day he’s at home unaccounted for, missing in action, the day after he had been given a warning letter that was advising him that he needs to seriously consider his employment with the company. I can’t fathom the understanding there and, as I say, in terms of it being premeditated, the dismissal on 2 July, there is no way that we would have given him a termination. But that was not the case. We gave him a warning. We gave him the opportunity to lift his game and obviously work harder to succeed within the company, not a termination.” 28

[25] Mr Riley said that in any employment environment there was due process which needed to be followed: “Had he asked permission to visit his residence during work hours, had he explained that he was utterly upset that his superannuation had not been paid for whatever reason, he could have sought the approval of myself or the principal, yet he failed to do that. He has admitted that. The time sheet states that. He said in his evidence that he said he was going doorknocking. He never sought permission nor sought approval to attend his residence during work hours.” 29

[26] In answering a question from me, Mr Riley said that the termination of employment arose from a combination of two factors: Mr Holliday-Smith’s unauthorised absence during work hours and his dishonesty when asked about his whereabouts during the telephone conversation. He went on to say: “We are a small real estate office. We don’t have a designated HR department. The process was followed to the best of our ability and to the level that can only be expected from an office our size. I would have loved to have had someone who had 20 years’ experience in HR but it’s just not commercially viable for a small office. Alex was never refused a support person during the conversation. He was more than welcome to do that and I would never ever obviously refuse an employee that right.” 30

[27] Mr Riley said that during the period of the Applicant’s employment: “… there were several occasions where myself directly was trying to offer him advice and he just would not accept that advice. He was extremely difficult. He would not take any of my experience on board. It wasn’t as though I was looking down to him and telling him to do something. I was more so offering him support and offering him the ability to gain some experience within the industry and become a successful agent. I mean, at the end of the day that’s why we employ sales staff – is not to entertain someone for a period of months. It’s to obviously give them the tools to turn them into a successful agent.” 31

Conclusions and Findings

[28] The Respondent terminated the employment of Mr Holliday-Smith on 2 July 2010 on the ground of alleged ‘gross misconduct’, more commonly referred to in this jurisdiction as ‘serious or wilful misconduct’. It is settled law that serious or wilful misconduct must be conduct by an employee which amounts to a repudiation by that employee of the essential employment contract. Such repudiation entitles an employer to terminate the employment relationship summarily without payment of notice.

[29] As the Applicant’s conduct is a reason or part reason given by the Company for the termination, I have to determine for myself whether the impugned conduct occurred and, if so, whether it amounted to a valid reason for termination of employment. In this regard I respectfully agree with the following observations of the Full Bench in King v Freshmore (Vic) Pty Ltd 32:

“When a reason for a termination is based on the conduct of the employee, the Commission must, if it is an issue in the proceedings challenging the termination, determine whether the conduct occurred. The obligation to make such a determination flows from s.170CG(3)(a). The Commission must determine whether the alleged conduct took place and what it involved.

The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.”

[30] Northrop J in Selvachandran v Peteron Plastics Pty Ltd 33 said:

“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 s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, ….”

[31] In Qantas Airways Ltd v Cornwall 34, the Full Court of the Federal Court said:

“The question is whether there was a valid reason. In general, conduct of that kind would plainly provide a valid reason. However, conduct is not committed in a vacuum, but in the course of the interaction of persons and circumstances, and the events which lead up to an action and those which accompany it may qualify or characterize the nature of the conduct involved.”

[32] In Edwards v Justice Giudice 35, Moore J said:

“The reason would be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or it did occur but did not justify termination.”

[33] The alleged serious or wilful misconduct by Mr Holliday-Smith was composed of two factors: his unauthorised absence from the Company office during working hours for the purpose of visiting his home and secondly, his actions in allegedly making a false entry in the Company sign-in book and lying to Mr Riley about his whereabouts both during the telephone conversation on 2 July 2010 and during the following meeting with Mr Riley at the Company office.

[34] Mr Holliday-Smith maintains that he was entitled to make a ‘short diversion’ to his home on the way to carry out doorknocking as he had been asked by Ms Cross to supply certain documents and was deeply concerned about the Company not making superannuation contributions on his behalf for several months. He denies falsifying the sign-in book on the ground that he only formed the intention to go to his home when he reached his car after leaving the Company office. The Applicant further denies that he lied to Mr Riley concerning his whereabouts. It is the Applicant’s contention that he was ‘set-up’ by the Company and/or Mr Riley and his ‘short diversion’ to his home was merely an excuse to end his employment summarily.

[35] It is not contentious between the parties that Ms Cross asked Mr Holliday-Smith to provide her with certain documents relating to his superannuation. It is further not in contention that Ms Cross did not specifically ask the Applicant to go to his home during working hours to obtain such documents for her. Given this common ground, the absence of Ms Cross to give sworn evidence is not crucial. Neither is her evidence crucial concerning what occurred between Mr Holliday-Smith and Mr Riley during their meeting on 2 July 2010. It would have more helpful if Ms Cross presented herself to give evidence but I accept Mr Riley’s explanation for her non-attendance and draw no adverse inference from it. It is certainly not clear that her attendance would have been detrimental to the Respondent’s case. However, I have paid no material regard to the written statement by Ms Cross which is set out at paragraph 17 supra.

[36] It is also not contentious that Mr Holliday-Smith did not seek permission to leave the office to go to his home during working hours or that he did not advise anyone in the Company office of his intention to do so. Mr Holliday-Smith specifically does not contend that he sought permission from the Company. The Applicant denies intentionally falsifying the sign-in book but I am unable to accept his evidence on that point. The issue of superannuation payments loomed large in proceedings and it is clear to me that Mr Holliday-Smith intended to go home to retrieve certain documents after being spoken to by Ms Cross in this regard. I do not believe his evidence that he only formed an intention to go home after filling out the sign-in book, which actually said he was going doorknocking. I believe that it was always the Applicant’s intention to go straight from the Company office to his home. It therefore follows and I find that the Applicant knowingly made a false entry in the sign-in book which was intended to mislead the Company.

[37] On the evidence and materials available to me, I am unable to reach a definite conclusion as to how long Mr Riley stayed outside or near Mr Holliday-Smith’s home on 2 July 2010. I am however satisfied that he drove to the home and made a telephone call to the Applicant whilst outside. I am further satisfied that Mr Riley’s evidence as to the content of that telephone discussion with Mr Holliday-Smith is truthful and therefore prefer his evidence in that regard to that of the Applicant. I further prefer the evidence of Mr Riley to that of Mr Holliday-Smith in relation to what occurred in the subsequent meeting at the Company office. In particular, I am satisfied and find that Mr Holliday-Smith was serially untruthful with Mr Riley as to his whereabouts on 2 July 2010 after leaving the Company office. The occupation in which Mr Holliday-Smith was employed involves extended periods outside the office and the employer is entitled to be able to trust the employee as to their whereabouts. The Applicant’s consistent untruthfulness about his whereabouts constitutes serious misconduct and I so find.

[38] From the totality of this case, it is clear to me that Mr Holliday-Smith was an unsatisfactory employee in the eyes of the Company and that the Company, largely through Mr Riley, held dark suspicions that the Applicant was going to his home for extended periods when he told the Company he was out working on such duties as doorknocking. What then occurred was that on 2 July 2010, Mr Riley personally observed the Applicant at his home during working hours and formed the view that his observation of the Applicant was proof of what had previously only been suspicions. The company-employee relationship was already under serious strain and the ‘home visit’ incident was the ‘final straw’ for the Company and Mr Riley. This was compounded by Mr Holliday-Smith’s subsequent untruthfulness. However, I have not paid regard to those earlier suspicions on the part of the Company and have only considered those matters which were the proximate reasons for the termination of employment on 2 July 2010.

[39] After a thorough review of the transcript, witness statements, oral evidence and materials, I have formed the view and find that the totality of Mr Holliday-Smith’s actions and conduct on 2 July 2010 amount to serious and wilful misconduct.

[40] In the light of my conclusions and findings above, I find that there was a valid reason for the summary termination of the Applicant’s employment based on serious and wilful misconduct.

[41] Given my finding in relation to serious and wilful misconduct, no question of harshness in the termination of the Applicant’s employment arises. Mr Holliday-Smith’s application for relief is dismissed.

[42] An order reflecting this decision is in PR510396.

COMMISSIONER

Appearances:

G Holliday-Smith, the Applicant.

A Riley, for the Respondent.

Hearing details:

2011.

Sydney:

April 14.

 1   Exhibit Applicant 1.

 2   Transcript PN94.

 3   Transcript PN97.

 4   Transcript PNs98-99.

 5   Transcript PN100 and following.

 6   Transcript PN103.

 7   Transcript PN102.

 8   Transcript PN107.

 9   Transcript PN109.

 10   Transcript PN115.

 11   Transcript PNs117-118.

 12   Exhibit Respondent 1.

 13   Transcript PN174 and following.

 14   Transcript PN186.

 15   Transcript PN228.

 16   Transcript PN276.

 17   Transcript PNs276 and 281.

 18   Transcript PNs322-323.

 19   Transcript PN363.

 20   Transcript PNs372-373.

 21   Transcript PN397.

 22   Transcript PN427.

 23   See Exhibit Respondent 1.

 24   Transcript PN489.

 25   Transcript PN495.

 26   Transcript PN506.

 27   Transcript PN576.

 28   Transcript PN578.

 29   Transcript PN579.

 30   Transcript PN605.

 31   Transcript PN610.

 32   Print S4213, 17 March 2000.

 33 (1995) 62 IR 371 at 373.

 34 [1998] FCA 865.

 35 [1999] FCA 1836.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR510395>