Grant Dziurek v A'Vard Industries Pty Ltd
[2018] FWC 1091
•13 MARCH 2018
| [2018] FWC 1091 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Grant Dziurek
v
A’Vard Industries Pty Ltd
(U2017/12665)
DEPUTY PRESIDENT MASSON | MELBOURNE, 13 MARCH 2018 |
Application for an unfair dismissal remedy- small business employer – compliance with Small Business Fair Dismissal Code.
[1] On 24 August 2017, Mr Grant Dziurek (the Applicant) made an application pursuant to s 394 of the Fair Work Act 2009 (the Act) for a remedy in respect of his dismissal by A’Vard Industries Pty Ltd (the Respondent).
[2] The application indicated that the date that the Applicant’s dismissal took effect was 16 November 2017.
[3] On 11 December 2017, the Respondent filed a response to the unfair dismissal application.
[4] On 15 December 2017, the matter was listed for conciliation before a Fair Work Commission Conciliator but remained unresolved at the end of the conciliation. Consequently the matter was listed for hearing before me on 22 February 2018.
The Hearing
[5] At the Hearing, the Commission sought submissions from the parties as to whether the Commission should conduct either a conference (s 398) or a hearing (s 399) in relation to the matter. Taking into account the number of witnesses and the parties wishes, it was decided that a hearing would be the most effective and efficient way to conduct the matter.
[6] At the Hearing the Applicant was self-represented and gave evidence on his own behalf. The Respondent was represented by Mr James Hooper of Counsel, by permission of the Commission, and led evidence from three witnesses:
Mr Adam Newstead: | Operations Manager for A’Vard Industries Pty Ltd |
Ms Aileen A’Vard: | General Manager for A’Vard Industries Pty Ltd |
Mr Wayne A’Vard: | Managing Director for A’Vard Industries Pty Ltd |
Initial matters to be considered
[7] I am required by s 396 of the Fair Work Act 2009 (Cth) (the Act) to decide four matters before I consider the merits of the application. There is no dispute between the parties and I am satisfied on the evidence that:
(a) The application was made within the period required by s 394(2) of the Act;
(b) The Applicant was a person protected from unfair dismissal; and
(c) The Applicant’s dismissal was not a case of genuine redundancy.
[8] I will now address whether the Respondent was a “small business employer” as defined in s 23 of the Act and, if so, whether the Applicant’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code).
Small Business Fair Dismissal Code
[9] Section 388 of the Act provides:
“388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”
[10] Section 23 of the Act provides a definition of a “small business employer” for the purpose of the Act. Relevantly, s 23(1) provides that a “national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time”.
[11] For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) all employees employed by the employer at the time (including the dismissed employee who has made the unfair dismissal application) are to be counted subject to the caveat that a casual employee is not to be counted unless, at the time, he or she has been employed by the employer on a regular and systematic basis (ss.23(2) & (4) of the Act); and
(b) associated entities are taken to be one entity (s.23(2) of the Act). The expression associated entity has the meaning given by section 50AAA of the Corporations Act 2001 (Cth) (Corporations Act).
[12] I am satisfied on the evidence that the Respondent employed seven employees as at 16 November 2017. There was no suggestion or evidence that the Respondent had any associated entities at the time of the Applicant’s dismissal.
[13] Accordingly, it is not disputed and I am satisfied on the evidence that, immediately before the time of the Applicant’s dismissal, the Respondent was a small business employer within the meaning of the Act.
[14] The Code declared by the Minister pursuant to s 388(1) of the Act relevantly provides as follows:
“Summary dismissal
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.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[15] In Pinawin v Domingo 1, the Full Bench considered whether, in the context of a summary dismissal under the Code, the Commission had to be satisfied that the serious misconduct which was the basis for the dismissal actually occurred:
“[29] … 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. The circumstances include the experience and resources of the small business employer concerned.
…
[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well …”
[16] Another Full Bench of the Commission recently examined the summary dismissal part of the Code in detail in Ryman v Thrash Pty Ltd 2and concluded as follows:
“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates the following way:
(1) If a small business employer has dismissed an employee without notice – that is, with immediate effect – on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.
(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectivity speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.”
Background and evidence
[17] The Respondent is engaged in the manufacture and sale of high quality stove tops which are sold nationally via various stores including the Good Guys and has been operating for approximately twenty eight years.
[18] The Applicant commenced employment with the Respondent as a Product Sales Executive on 23 August 2004. At the time of his termination, the Applicant held the position of National Sales Manager receiving a salary of $87,500.00 plus statutory superannuation. He was also provided with a laptop computer, mobile phone and a fully maintained motor vehicle. In addition to his base salary, the Respondent gave evidence that the Applicant also received a discretionary bonus on a six monthly basis subject to business performance.
Reasons for termination
[19] In support of its reasons for termination, the Respondent submitted that from mid- 2015, it discerned that the Applicant was suffering financial difficulties and that his work performance was deteriorating. The Respondent referred to:
1. Personal loans that it had extended to the Applicant totalling $13,300.00 from mid-2015;
2. The Applicant’s poor record of attendance including being late for work, departing early and simply not attending work at times without approval;
3. The Applicant’s declining and unsatisfactory sales results;
4. Insubordination and rudeness directed towards the General Manager, Ms Aileen A’Vard.
[20] The Respondent submitted that at the time of termination on 16 November 2017, the Respondent reasonably believed that the Applicant had:
1. Re-commenced making unlawful credit card purchases on his work credit card; and
2. Had threatened its Operations Manager, Mr Adam Newstead, causing a serious risk to Mr Newstead’s health and safety.
[21] The reasons cited in the letter of termination signed by Mr A’Vard were as follows:
“It is a sad moment that after many years employment with this company, that a situation has arisen that require me to give notification that I am terminating your employment.
As a small company it is imperative that all employees work together as a team. Teamwork requires respect for other staff members in their daily communication, punctuality and performance.
In many of these areas its sadly lacking and I have mentioned to you before, that as a team, all members keep in mind the goals of the Company and the unspoken rules of being a team member. If one of the team are playing by their own set of rules then that member, is not part of the team.
This is the situation I find with you currently. As such I am giving you 30 days notice as per the employment agreement of 26 July 2004 effective immediately. All long service will be paid, personal loans and credit card debt to be deducted.
This will be worked out and paid accordingly.
I wish you well in whatever endeavour you pursue.” 3
Personal Loan
[22] Ms A’Vard gave evidence that the Applicant approached the Respondent in May 2015 seeking a loan from the Company due to financial difficulties he confronted. The Respondent agreed to provide an interest free loan of $12,000.00 to be repaid by way of twenty five percent deductions from his six monthly discretionary bonus payments. A record of the loan agreement was made. 4
[23] Ms A’Vard stated that a further approach by the Applicant in January 2015 resulted in an additional loan of $3,300.00 being extended to the Applicant by the Respondent. No formal record or loan agreement was prepared. The total amount loaned to the Applicant was $15,300.00 which was progressively paid off by the Applicant with the final outstanding loan balance owing of $5,300.00 deducted from his termination payment. 5
[24] The personal loans extended by the Respondent to the Applicant were progressively paid down and fully paid off upon termination of the Applicant’s employment. There was no evidence that the Applicant had failed to acquit the debt according to the agreed process and timeline. Ultimately, while the Respondent may have believed there was a link between the Applicant’s financial position and the alleged decline in his performance, the personal loans were not relied on by the Respondent in its dismissal of the Applicant.
Attendance and Sales Performance
[25] The evidence of Mr A’Vard was that between the commencement of the Applicant’s employment in 2004 and mid-2015, he had been “a good employee who worked hard, came up with good ideas, was a good team player and did his job effectively”. 6 However, from mid-2015 it was claimed that the Applicant’s performance began to deteriorate and issues of poor performance emerged including lateness for work, failure to attend work, decreasing sales performance and increasing incidents of insubordination.7 It was claimed that these concerns were raised with the Applicant in the twelve month period from November 2016.
[26] Ms A’Vard gave evidence that the Applicant regularly turned up late and that she recorded these instances on her desk diary pad. 8 Payslips recording the deduction for the unauthorised absences were also provided in evidence.9 There were also, according to Ms A’Vard, regular instances of the Applicant simply failing to turn up for work without seeking approval, which prompted her to specifically raise her concerns with the Applicant in correspondence dated 19 September 2017.10 That correspondence made clear that Ms A’Vard had concerns regarding the Applicant’s attendance record but did not warn him that a failure to improve in respect of punctuality and attendance would lead to disciplinary action.
[27] I am satisfied that the Applicant’s attendance had deteriorated to the extent that Ms A’Vard had reason to raise concerns with the Applicant, which she did on 19 September 2017. The Respondent’s legitimate expectations of the Applicant regarding punctuality, regular attendance and notification requirements were referenced in the note from Ms A’Vard. I note however that no formal warning was issued to the Applicant that made clear what the consequences for him would be if the immediate improvement sought was not realised.
[28] While referring to declining sales performance, no specific evidence was adduced by the Respondent regarding the sales performance of the Applicant beyond general claims of deterioration and a request for assistance by the Applicant. 11 I am unable to make findings in relation to the claimed sales performance deterioration on the basis of the material before me.
Insubordination and rudeness
[29] Ms A’Vard gave evidence that the Applicant was demanding and rude to her at times. She claimed this was particularly the case in circumstances where the Applicant was confronted regarding his performance, which Ms A’Vard claimed would regularly provoke follow-up queries from the Applicant regarding his remuneration, superannuation entitlements and outstanding loan details. 12 Ms A’Vard gave further evidence that she viewed the advice from the Applicant that he intended to raise his concerns about pay and entitlements with Fair Work Australia, the Fair Work Ombudsman and the Australian Taxation Office as threats. Ms A’Vard specifically referred to correspondence received from the Applicant on 15 November 2017.13
[30] The Applicant rejected Ms A’Vard’s characterisation of his queries regarding pay, superannuation and personal loan balance details as threats. The Applicant pointed to the poor records maintained by the Respondent which he believed justified his regular enquiries. He specifically referred to the lack of detail on pay slips. Ms A’Vard ultimately conceded that payslips had not been prepared to a standard that would meet statutory requirements. 14
[31] The Applicant claimed that he had raised concerns regarding his pay, superannuation and loan balance on many occasions because his enquiries had not been adequately addressed by Ms A’Vard. He referred to correspondence with Ms A’Vard exchanged in February 2017, which highlighted the issues that he was frustrated about. 15 Ms A’Vard conceded that the Applicant had raised concerns on a number of occasions but that she had replied to those queries. Ms A’Vard gave further evidence that no other issues had been raised by the Applicant in the intervening period between the Applicant’s emails dated 16 February 2017 to which she responded and 15 November 2017.
[32] I am not satisfied on the evidence that the issues raised by the Applicant with Ms A’Vard regarding his pay and benefits was done in a vindictive or malicious manner. While the Respondent may believe that the queries from the Applicant were raised in the wake of the Applicant being confronted over performance issues, there was insufficient evidence to satisfy me of that submission. Ultimately, the Applicant was entitled to take what he considered an unresolved grievance to an external regulatory body and that was what he foreshadowed. As to whether the communication of that action on the Applicant’s part was done with the purpose of putting pressure on the Respondent was not clear on the evidence.
[33] I am not persuaded by the evidence that the Applicant’s conduct in raising concerns over his pay, superannuation and outstanding personal loan balance was done in an insubordinate manner or with a purpose of intimidating Ms A’Vard. I am therefore not satisfied that his raising of these concerns in themselves constituted misconduct.
Credit Card Misuse
[34] The Respondent claimed that of most concern to it in terms of the Applicant’s conduct, was his use of his corporate credit card for personal purchases which, according to the Respondent, first became apparent in late 2016. The total of the Applicant’s personal purchases between September 2016 and February 2017 was in excess of $9000.00. According to Ms A’Vard, when she confronted the Applicant in January 2017, she directed him to cease using the corporate credit card for personal purchases and he agreed to commence repayment of an agreed amount of between $200.00 and $300.00 per week. 16 The cessation of use of the corporate credit card for personal purchases was recorded by the Applicant on the National Australia Bank statement for the period 29 December 2016 – 27 January 2017.17
[35] While no documentary evidence was furnished, the Applicant claimed that his use of the corporate credit card for personal purchases was pre-authorised by Ms A’Vard. 18 Ms A’Vard flatly rejected that claim.19
[36] The statement of Ms A’Vard regarding the timing of her confronting the Applicant in January 2017 was at odds with the National Australia Bank Account Transaction statement for the period 1/01/2016-16/11/2017. 20 That statement showed that the Applicant commenced repayments at a much earlier date, that being 3 November 2016. The Applicant continued to make repayments through until his termination in November 2017. The statement also showed that the Applicant continued to use the corporate credit card for personal purchases until February 2017 at which point the use of the credit card for personal purchases ceased.
[37] An inference that may be drawn from the pattern of the Applicant’s use and repayment of the credit card is that the Respondent was in fact aware of its use and had accepted and implemented the Applicant’s repayment schedule from 3 November 2016. Under questioning on this point, Ms A’Vard stated that her recollection of the timing events may have been incorrect and that it was earlier then January 2017 that she confronted the Applicant. 21 If that were the case, and Ms A’Vard did in fact confront the Applicant in November 2016 as she corrected during cross-examination, then no credible explanation was provided as to why the Applicant’s use of the credit card for personal purchases continued unabated until February 2017.
[38] I am not satisfied that the version of events presented by Ms A’Vard squares with the record of the Applicant’s credit card debits and repayments which commenced in early November 2016. Conversely, the Applicant, while adamant as to the source and timing of approval, was unable to provide any credible evidence to support his claim that Ms A’Vard pre-authorised his use of the credit card for personal purchases.
[39] What is clear is that, at least from February 2017, the Applicant acknowledged that he would cease to use the corporate credit card for personal purchases. That is evident by reading the relevant National Australia Bank account statement 22 on which the Applicant wrote that the “Card is not being used for personal as of start of Feb.” Further, in response to a question from Ms A’Vard, also written on the statement as to whether the January 2017 purchases were the last personal purchases he wrote “yes”. While the Applicant unconvincingly rejected that the written response of “yes” on the statement was his handwriting, he did acknowledge during cross-examination that he had agreed to stop using the credit card for personal purchases.23
[40] No further use of the corporate credit card by the Applicant for personal purchases was identified by the Respondent until October 2017 when the September 2017 credit card statement arrived. The Respondent subsequently identified that in the period August 2017 to October 2017, the Applicant used the corporate credit card to incur personal expenditure of $796.37. This was contrary to the claimed instruction given by the Respondent and the Applicant’s agreement in February 2017 not to use the credit card for such purposes.
[41] The Applicant claimed that he had sought and obtained further approval from Ms A’Vard to re-commence using the corporate credit card in advance of incurring the personal expenses in the August 2017 to October 2017 period. No documentation was provided nor was any specific timing of such discussions or agreement adduced in evidence. Ms A’Vard strongly rejected the Applicant’s claims of fresh approval having been obtained from her. 24
[42] I am satisfied that in the period from September 2016 to February 2017, the Applicant used his corporate credit card for personal purchases. Shortly after commencing his use of the card for personal purchases in October 2016, he also commenced a repayment schedule of between $200.00 and $300.00 per pay period in November 2016. It is significant that the repayment schedule commenced shortly after the first series of personal purchases by the Applicant and that personal purchases on the credit card continued through until February 2017.
[43] It is clear from the re-payment and debit schedule, that the Applicant was making repayments while at the same time continuing to use the credit card for personal purchases. That pattern supports a finding that the Respondent was at least aware of the credit card use from November 2016, evidenced by it having facilitated deductions from the Applicant’s pay while he continued to use the card. The Respondent may not have been happy about the Applicant’s use of the corporate credit card, but I am satisfied that they did not press the Applicant to cease using the credit card for personal purchases until February 2017. I am further satisfied that at that point (February 2017) it was clearly understood and acknowledged by the Applicant that personal use of the credit card would cease.
[44] The permissive approach of the Respondent in addressing the issue with the Applicant may be explained by the “family” nature of the business which Ms A’Vard referred to in her evidence. 25 The fact that no formal warning was issued to the Applicant in the wake of the credit card use reinforces that permissive approach. Further, the willingness of the Respondent to also extend personal loans to the Applicant speaks to the understanding that existed between the parties from at least mid-2015 regarding the Applicant’s difficult financial circumstances.
[45] While the Respondent may have adopted a permissive approach to the issue of the Applicant’s corporate credit card use up until February 2017, the Applicant was on notice from that point not to use the corporate credit card for personal purchases. Having heard Ms A’Vard’s evidence on this point, I am not persuaded by the Applicant’s evidence that Ms A’Vard subsequently authorised him to re-commence using the credit card for personal purchases in August 2017.
[46] I am satisfied in the circumstances that the Applicant was not authorised to re-commence using the corporate credit card in August 2017 and that his decision to do so was contrary to his clear acknowledgement in February 2017 that he would not use the corporate credit card for personal purchases. I am satisfied that his decision to re-commence using the corporate credit card for personal purchases without authorisation constituted misconduct.
Threat to Mr Newstead
[47] The Respondent gave evidence of what it considered threatening and intimidating communication from the Applicant to its Operations Manager, Mr Adam Newstead, on 9 November 2017. The email from the Applicant to Mr Newstead stated as follows:
“Heads up to you. Don’t bother faking it with me anymore champ. I’ve observed it all, watched it, heard it, listened to it, worn it behind closed doors and put up with your shit long enough. I know your game pal, do you think I’m fucking stupid? It’s your low greasy way of conducting oneself. I’ve known all along.
Stay the fuck away from me and know this – that I fucking know. We all know.
Too many chances. Try bullshitting (sic) leveraging or pushing one bit again towards me for your own lowlife gains and I’ll open the vault for all to make a public assessment.” 26
[48] Mr Newstead gave evidence that he was shaken up by the email and was concerned that the Applicant wanted to have a confrontation “or be physically abusive towards me.” 27 He did, however, concede during cross-examination that during his four years of working with the Applicant he had not been involved in a physically abusive confrontation with the Applicant.28
[49] The Applicant in response gave evidence that the email was provoked by his growing intolerance of Mr Newstead’s conduct and behaviour, which the Applicant attributed in part to Mr Newstead’s medical condition. The Applicant did not accept that the email was threatening or menacing or that Mr Newstead was at any risk of violent confrontation. While feeling justified in his frustration with Mr Newstead, the Applicant did however concede that the use of poor language in the email was inappropriate. 29
[50] There is little doubt that the language used and tone of the email from the Applicant to a colleague, Mr Newstead, was entirely inappropriate. The Applicant may have felt justified with respect to his personal grievances with Mr Newstead, of which no substantive evidence was adduced, but that does not excuse the sending of an email which I am satisfied was objectively crude, offensive, threatening and intimidating and therefore constituted misconduct
Termination Process
[51] Mr A’Vard stated that he arranged to conduct a disciplinary meeting with the Applicant on 16 November 2017. This occurred following Mr A’Vard becoming aware of the Applicant recommencing his use of the corporate credit card for personal purchases and the emails from the Applicant to Mr Newstead on 9 November 2017 and to Ms A’Vard on 15 November 2017. 30
[52] The Applicant stated in his evidence that on 16 November 2017, Mr A’Vard approached him and advised that he wished to discuss the outcome of a sales meeting from the previous day. Approximately ten minutes later, according to the Applicant, he met with Mr and Mrs A’Vard during which he was challenged by Mr A’Vard regarding the Applicant’s 15 November 2017 email to Ms A’Vard. The Applicant stated that he was then advised by Mr A’Vard shortly following this exchange that his (the Applicant’s) actions were not those of a “team player”. The Applicant was then advised of the termination of his employment and a confirmatory letter was provided to him approximately ten minutes later.
[53] Mr A’Vard gave evidence that he had made it explicitly clear to the Applicant during the termination meeting that he was entitled to raise any concerns he had regarding his pay and benefits and that the business had nothing to hide from the Australian Tax Office or Fair Work Ombudsman. Mr A’Vard rejected the Applicant’s claim that his termination was in response to his raising pay and benefits concerns. 31
[54] Mr A’Vard claimed in his witness statement that during the termination meeting on 16 November 2017, he made clear to the Applicant that the issues of concern were that of his continuing poor performance, intimidation and threats to other staff and insubordination towards Ms A’Vard. 32 Those concerns were summarised by Mr A’Vard in the termination letter in the following terms:
“As a small company it is imperative that all employees work together as a team. Teamwork requires respect for other staff members in their daily communication, punctuality and performance.”
[55] During cross-examination, however, Mr A’Vard conceded that the specific areas of concern regarding the Applicant’s conduct and performance had not been detailed to him during the termination meeting. The following exchange between myself and Mr A’Vard highlights this:
“Deputy President: | The follow-up question then is: at the termination meeting, did you put to Mr Dzuriek all of those concerns, be that the email to the operations manager, the pattern of attendance, and we’ve talked about the credit card, the concerns over the credit card misuse, so those – that build-up of disappointments to use your words, which I have tried to summarise, was that put to Mr Dzuriek in clear terms? |
Wayne A’Vard: | Not all of those, no. |
Deputy President: | So what was put to him? |
Wayne A’Vard: | I mentioned to him about being a team player, I mentioned about the disappointment, and I also mentioned previously about the threats to the staff. That was a week earlier.” |
[56] The absence of detail provided to the Applicant at the termination meeting was reinforced in the evidence of Ms A’Vard. She acknowledged during cross-examination that key issues of concern, that of the threats to Mr Newstead and the Applicant’s attendance record, were not raised with him at the termination meeting and that the issue that was raised was that of the Applicant not being a “team player”. 33
[57] I am consequently satisfied that the Respondent, in communicating the termination of the Applicant’s dismissal, did not detail the specific conduct and performance concerns it held. Rather, it referred to its general concern that the Applicant was not acting as a “team player” or following the “team rules”. The meeting appeared on the evidence to be perfunctory, with no specific detail advanced on the reasons for termination. Nor was there a reasonable opportunity for the Applicant to comment or respond to the reasons relied on for his dismissal by the Respondent.
[58] I am not persuaded that the Respondent took the action of dismissing the Applicant simply because he (the Applicant) had raised his intention to pursue his entitlements with the Australian Tax Office or Fair Work Ombudsman. I found the evidence of Mr A’Vard under cross-examination on the substance of the termination meeting to be forthright and reliable. In particular he acknowledged deficiencies in the process followed in communicating the reasons for the Applicant’s dismissal.
[59] In communicating the termination of employment in the meeting of 16 November 2017, Mr A’Vard gave the Applicant the choice to work out the thirty day notice, which the Applicant declined. Payment in lieu of notice was subsequently confirmed in the termination letter. 34 Mr A’Vard confirmed in his evidence that at the time of the Applicant’s dismissal, he did not believe that the cumulative effect of the Applicant’s conduct was so serious as to justify immediate dismissal.35
Was the Applicant dismissed without notice?
[60] I am satisfied on the evidence that the Applicant was notified of his dismissal on 16 November 2017 and that he was terminated with thirty days’ notice. In terminating the Applicant, the Respondent did not detail the reasons on which it relied but rather summarised those reasons as being that the Applicant was not acting as a “team player.”
[61] Mr A’Vard gave the Applicant the choice to work out his notice period or finish up immediately. The Applicant chose the latter and received pay in lieu of thirty days’ notice. Further and importantly, Mr A’Vard, who made the decision to dismiss the Applicant, did not regard the Applicant’s conduct as so serious as to justify summary dismissal.
[62] I am consequently satisfied that the Respondent in terminating the Applicant on 16 November 2017 with thirty days’ notice did not hold a genuine belief that the Applicant’s conduct was sufficiently serious as to justify immediate dismissal.
Consistency with the Small Business Fair Dismissal Code – “other dismissal”
[63] It is clear that the summary dismissal element of the Small Business Fair Dismissal Code (the Code) does not apply in the circumstances. I therefore now turn to consider whether the termination falls within the second limb of the Code. In order for the termination to be consistent with the second limb of the Code it is necessary for me to be satisfied that there was a valid reason relating to the capacity and/or conduct of the Applicant and that the Applicant had been warned verbally or in writing that his employment was at risk if there were no improvement in his conduct and/or performance.
[64] The Respondent claimed that there were a number of concerns regarding the Applicant’s conduct and performance including his attendance, declining sales performance, credit card misuse and threats and intimidation of staff. I have made findings regarding each of those concerns above. Mr A’Vard described the cumulative effect of these concerns as a “year of disappointments” which ultimately were the reason for the Applicant’s dismissal. 36
[65] While Ms A’Vard had raised concerns with the Applicant regarding his attendance, there was no evidence that it had been put to the Applicant that unless his attendance improved he would be at risk of termination of employment. 37 Nor was there any evidence that the claimed decline in the Applicant’s sales performance had been raised as a risk to his continuing employment.
[66] The use of the corporate credit card by the Applicant for personal purchases was ultimately addressed in February 2017 at which point there was a cessation of such use, for several months at least. No warning was issued to the Applicant in February 2017 of the consequences of future misuse of the corporate credit card. This supports an inference of some tacit acceptance by the Respondent, if not approval, of the corporate credit card’s use for the Applicant’s personal purchases up to that point. In any event the Applicant was not warned in February 2017 that his employment would be at risk if credit card misuse re-emerged. Having said that it should have been self-evident to the Applicant at that point that the corporate credit card was not to be used by him for personal purchases.
[67] I am satisfied on the evidence, in particular the evidence of Mr A’Vard that notwithstanding the Respondent’s concerns held regarding the Applicant’s conduct and performance, those concerns were not raised clearly and directly with the Applicant nor was he warned regarding the consequences for his employment if the pattern of unacceptable conduct and/or performance continued. 38
Conclusion on compliance with the Code
[68] For the reasons set out above, I am satisfied that:
(1) Immediately before the Applicant’s dismissal, the Respondent was a small business within the meaning of the Act;
(2) On 16 November 2017, the Respondent dismissed the Applicant with notice and in doing so gave the Applicant the choice to work out the notice or receive payment in lieu of notice. The Applicant chose the latter;
(3) The Respondent dismissed the Applicant for conduct and performance shortcomings, which on its own evidence, the Respondent did not believe justified immediate dismissal; and
(4) There were no prior written or verbal warnings issued to the Applicant in relation to his conduct and performance which put him on notice that unless his conduct and performance improved he was liable to be dismissed.
[69] It follows from the above that the Applicant’s dismissal was not consistent with the Code. I therefore dismiss the objection of the Respondent to the Applicant’s pursuit of an unfair dismissal remedy on the grounds of their claimed compliance with the Code.
[70] I must accordingly now turn to consider whether the dismissal was unfair by reference to the criteria in s 387 of the Act.
Was the dismissal unfair?
[71] In deciding whether a dismissal is harsh, unjust or unreasonable, the Commission must take into account procedural and substantive matters set out in s.387 of the Act as follows:
“387 Criteria for considering harshness etc.
(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 the dismissal; and
(e) If the dismissal related to unsatisfactory performance – 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 FWA considers relevant.”
[72] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd 39by McHugh and Gummow JJ as follows:
“.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[73] I am under a duty to consider each of these criteria in reaching my conclusion. 40
[74] I will now consider each of the criteria at s 387 of the Act separately.
Was there a valid reason – s 387(a)
[75] I turn first to consider whether there was a valid reason related to the person’s capacity or conduct. A valid reason for the dismissal of the Applicant need not be the reason given to the Applicant at the time of the dismissal.41 The reasons should be “…sound, defensible and well founded”42 and should not be “…capricious, fanciful, spiteful or prejudiced.”43
[76] Having been dismissed for misconduct, the Commission must first satisfy itself that, on the balance of probabilities that the alleged misconduct occurred.44 In doing so, the Commission will take into account the need to be properly satisfied of the proofs of the conduct, without applying a standard of proof higher than the balance of probabilities.45
[77] 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 matter 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.46
[78] The Respondent’s concerns regarding the Applicant’s attendance and sales performance deterioration were not supported by sufficient evidence to satisfy me that the Applicant’s alleged performance and attendance deficiencies were so serious as to warrant termination of employment. Nor am I satisfied that the Applicant’s conduct in raising concerns with the Respondent regarding his pay and benefits constituted intimidation of Ms A’Vard as claimed by the Respondent.
[79] As I have previously found, the Applicant re-commenced using his corporate credit card for personal purchases in August 2017. This is contrary to a clear understanding reached with the Respondent in February 2017 that he would cease using the corporate credit card for such purposes. While the Respondent may be accused of a tardy or permissive approach to such use when it emerged in late 2016, it should have been abundantly clear to the Applicant from February 2017 that his use of the corporate credit card for personal purchases was no longer acceptable.
[80] Despite the clear position reached in February 2017, the Applicant chose to re-commence using the corporate credit card for personal purchases in August 2017 without authorisation. I am consequently satisfied in the circumstances that such action constituted misconduct.
[81] I am also satisfied that the email sent by the Applicant to Mr Newstead on 9 November 2017 was objectively crude, offensive, threatening and intimidating and cannot be justified on any basis. Attempts by the Applicant to justify the email were unconvincing and self-serving. I am satisfied that the sending of the email constituted misconduct.
[82] I am satisfied that the Applicant’s unauthorised use of his corporate credit card for personal purchases in the August to October 2017 period and the email sent by the Applicant to Mr Newstead on 9 November 2017 constituted misconduct. I am consequently satisfied that at the time of the Applicant’s dismissal the Respondent had a valid reason to terminate the Applicant’s employment based on his misconduct.
Notification of the valid reason – s.387(b)
[83] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,47 in explicit terms48 and in plain and clear terms.49 In Crozier v Palazzo Corporation Pty Ltd50 the Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:
“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”
[84] The Applicant was advised in the termination meeting on 16 November 2017 that Mr A’Vard was disappointed in him and that he (the Applicant) was not acting as a team player. The specific reasons for the termination were not put to the Applicant at or prior to the termination being effected.
[85] I am consequently not satisfied that the Applicant was notified of the reason for his dismissal in plain and clear terms prior to the decision being made to terminate his employment. This weighs against a finding that the dismissal was not unfair.
Opportunity to respond to any reason related to capacity or conduct - s.387(c)
[86] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 51
[87] As I have previously found I am not satisfied that the Applicant was given an opportunity to respond to the specific reasons relied on by the Respondent in terminating his employment. 52 This weighs against a finding that the dismissal was not unfair.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[88] It was not contested by the Applicant that he had been unreasonably refused a support person during the disciplinary meeting on 16 November 2017. It is therefore a neutral consideration.
Warnings regarding unsatisfactory performance - s.387(e)
[89] While Ms A’Vard wrote to the Applicant on 17 November 2017 regarding his attendance and her expectations moving forward, the correspondence did not take the form of a formal warning which detailed the consequences of a failure to improve. There was no evidence of any other warnings having been issued to the Applicant regarding his conduct or performance. Mr A’Vard also conceded that the Respondent had failed to warn the Applicant regarding his conduct and performance prior to his termination of employment. The absence of warnings is consequently a neutral factor in my decision.
Impact of the size of the Respondent on procedures followed - s.387(f)
[90] I have already found that the Respondent was a “small business” on the basis of having only seven employees at the time of the Applicant’s dismissal. I am satisfied that the size of the Respondent’s business, and consequent lack of expertise, adversely impacted the procedures followed by the Respondent in dismissing the Applicant. This weighs against a finding that the termination was unfair.
Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)
[91] The Respondent did not employ any dedicated human resources specialist/expertise. This lack of expertise assistance may explain the absence of documentary records going to the Applicant’s alleged conduct and performance deficiencies. Nor was there any evidence that the Company utilised or relied on external expertise or resources. I am consequently satisfied that the lack of human resources management specialist/expertise adversely impacted the procedures followed by the Respondent in dismissing the Applicant. This weighs against a finding that the termination was unfair.
Other relevant matters - s.387(h)
[92] The Applicant submitted that his fourteen years of service was a relevant factor that should be considered by the Commission. The Respondent in reply rejected that the Applicant’s service should excuse the misconduct in circumstances where it was submitted the Applicant should have known better.
[93] The Applicant’s length of service is significant; however, I have also found it necessary to consider the steps taken over a prolonged period by the Respondent to support the Applicant during the period of financial difficulty he confronted. That occurred through the Respondent extending a substantial personal loan in mid-2015 as well as adopting an initially permissive approach to the Applicant’s use of the corporate credit card when knowledge of it emerged in late 2016.
[94] I am satisfied that the Applicant’s length of service and the “family” nature of the business were factors in the Respondent’s treatment of the Applicant in the period from 2015 to 2017. Taking into consideration the measures taken by the Respondent to both support and then tolerate the Applicant’s conduct from mid-2015, as well as the payment in lieu of notice on termination, I am not persuaded that the Applicant’s length of service remains a relevant matter in my consideration. It is therefore a neutral consideration.
[95] The Respondent also submitted that the Applicant’s conduct since termination had been consistent with his pre-termination conduct. The Respondent specifically referred to:
1. The Applicant’s failure to return the Apple iPhone and Apple laptop computer that had been issued to him. Rather he had returned older versions of the issued equipment which the Respondent claimed were registered to a Ms McLaughlin, who was known to the Applicant. The evidence of the Respondent was that the returned mobile phone and laptop were not the company issued equipment. The Respondent efforts to retrieve the Company issued property since the Applicant’s termination had been unsuccessful.
2. The Applicant remained indebted to the Respondent in relation to the repayment of unauthorised credit card purchase discovered after his termination of employment.
[96] The Applicant initially argued that he had not been presented with any evidence by the Respondent that the Apple laptop computer and iPhone that he had returned were not the original company issued equipment. The Applicant subsequently conceded under cross-examination that he had returned the wrong laptop but was now unable to return the correct laptop as it had been stolen by Ms McLaughlin. 53
[97] I found the Applicant’s explanation of his failure to return the correct Apple laptop computer and iPhone unconvincing and so I consequently prefer the Respondent’s evidence on this issue. The Applicant’s failure to return the correct equipment on termination reflects poorly on him and is an issue the Respondent may choose to pursue in a different jurisdiction. In the present matter, I am satisfied that the Applicant’s post-employment conduct is a relevant matter that weighs against a finding that his dismissal was unfair.
Conclusion
[98] I have considered those factors that support a finding that the dismissal was not unfair, specifically the establishment by the Respondent of a valid reason for the Applicant’s dismissal, the Respondent’s small size and the absence of Human Resources expertise along with the Applicant’s post-termination conduct. Balanced against those factors are the procedural deficiencies of the termination process which the Respondent has acknowledged.
[99] In carefully weighing each of the relevant factors, I have concluded that greater weight should be accorded to the established misconduct of the Applicant, the Respondent’s limited Human Resources capability and size and the Applicant’s post-termination conduct. I am thus satisfied that the Applicant’s dismissal was not harsh, unjust or unreasonable and consequently he was not unfairly dismissed within the meaning of the Act.
[100] The Application is dismissed. An Order will be issued in conjunction with this decision.
DEPUTY PRESIDENT
Appearances:
Mr G Dziurek on his own behalf.
Mr J Hooper, of counsel, for the Respondent.
Hearing details:
2018.
Melbourne.
February 22.
<PR600557>
1 [2012] FWAFB 1359.
2 [2015] FWCFB 5264.
3 Exhibit A2, Statement of Mr. Grant Dziurek, Attachment 1.
4 Exhibit R4, Statement of Ms. Aileen A’Vard, Annexure AA1.
5 Ibid at paragraphs [9]-[13], Annexure AA1.
6 Exhibit R7, Statement of Mr Wayne A’Vard at paragraph [15].
7 Ibid at paragraph [16].
8 Exhibit R4 at paragraph [15(a)], Annexure AA2.
9 Ibid at Annexure AA4.
10 Ibid at Annexure AA6.
11 Exhibit R7 at paragraph [16(c)].
12 Ibid at paragraph [15(d)], Annexure AA7.
13 Ibid at paragraph [17]-[18], Annexure AA12.
14 Transcript at PN1030.
15 Exhibit A2, Attachment 4.
16 Exhibit R4 at paragraph [15(e)].
17 Ibid at Annexure AA9.
18 Transcript at PN417-426.
19 Transcript at PN764-765.
20 Ibid at Annexure AA9.
21 Transcript at PN1107.
22 Exhibit R4 at Annexure AA9.
23 Transcript at PN 460.
24 Transcript at PN 782-783.
25 Transcript at PN1121.
26 Exhibit R3, Statement of Mr. Adam Newstead, Annexure AJN1.
27 Ibid at paragraph [4].
28 Transcript at PN667.
29 Transcript at PN247.
30 Exhibit R7 at paragraphs [24], [26]-32].
31 Ibid at paragraph [33].
32 Ibid at paragraph [33].
33 Transcript at PN1062 and PN1129-1130.
34 Exhibit R7 at paragraph [35].
35 Transcript at PN1224-1229.
36 Transcript at PN1191-1193.
37 Transcript at PN1128.
38 Transcript at PN1242-1244.
39 Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465.
40 Sayer v Melsteel[2011] FWAFB 7498.
41 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.
42 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.
43 Ibid.
44 Edwards v Giudice (1999) 94 FCR 561 [6]-[7].
45 Budd v Dampier Salt Ltd (2007) 166 IR 407, at [15]; with reference to Briginshaw v Briginshaw (1938) 60 CLR 336 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171.
46 King v Freshmore (Vic) Pty Ltd[2000] AIRC 1019 [24].
47 Chubb Security Australia Pty Ltd v Thomas,Print S2679 at [41].
48 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
49 Previsic v Australian Quarantine Inspection Services, Print Q3730.
50 (2000) 98 IR 137.
51 RMIT v Asher (2010) 194 IR 1, 14-15.
52 See Paragraph [57]
53 Transcript at PN 607-608.
Printed by authority of the Commonwealth Government Printer
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