Heather Lynn Hazelle v George Thomas Hotels (Hurstville) Pty Ltd T/A Meridian Hotel - [2011] FWA 7969

[2011] FWA 7969

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Heather Lynn Hazelle
v
George Thomas Hotels (Hurstville) Pty Ltd T/A Meridian Hotel
(U2011/4911)

COMMISSIONER ROBERTS

SYDNEY, 8 DECEMBER 2011

Application for unfair dismissal remedy.

[1] This decision concerns an application lodged on 9 February 2011 by Ms Hazelle pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the alleged unfair termination of her employment by George Thomas Hotels (Hurstville) Pty Ltd t/as Meridian Hotel (Meridian or the Hotel).

[2] The application was dealt with by a Fair Work Australia Conciliator on 7 March 2011 but the conciliation was unsuccessful.

[3] The arbitration came before me for hearing in Sydney on 6 June and 8 and 9 August 2011. Ms Hazelle was represented by Mr D Groundwater of Warren McKeon Dickson Lawyers and the Hotel by Mr M Kimber SC and Mr Y Shariff of Counsel.

[4] Ms Hazelle gave sworn evidence on her own behalf. Mr G Thomas (the owner and Director of the Hotel), Mr D Cust (a Partner of Nexia Court & Co Chartered Accountants), Mr D Scicluna (General Manager) and Mr C Thomas (Operations Manager) gave sworn evidence for the Respondent.

Background

[5] From around May 1996 Ms Hazelle was employed as a Duty Manager at the Hotel. In November 2000, the Hotel was purchased by the Respondent and the Applicant worked for the Respondent both at the Hotel and at other hotels owned by the George Thomas Hotel Group (GTHG). From about February 2005 until 8 February 2011, Ms Hazelle was the Licensee of the Meridian Hotel.

[6] On 10 November 2010 a money bag containing the sum of $11,929.45, amongst several money bags to be collected by a security guard from the Hotel office, went missing. Ms Hazelle maintains that she did not know about the missing monies until she was advised by the Hotel’s Accountant in December 2010. The Respondent also learned from its Accountant of the incident around the same time and an investigation was undertaken by Mr C Thomas.

[7] Following its investigation, the Respondent took the view that Ms Hazelle was aware of the missing monies and failed to report the loss to the Respondent in a timely manner. The Respondent also relied on other performance issues and terminated Ms Hazelle’s employment on 8 February 2011. The Respondent claims that it offered Ms Hazelle an opportunity to resign and when that offer was rejected by her, terminated her employment with payment of notice and all required statutory entitlements. No allegation of theft has been made against the Applicant.

[8] Ms Hazelle denies any wrongdoing and maintains that her termination was harsh, unjust and unreasonable. The Applicant claims that her dismissal resulted from her refusal to pay an insurance excess of $3,500 in relation to the monies lost on 10 November 2010.

[9] Ms Hazelle seeks compensation but not reinstatement.

Evidence

Ms Hazelle

[10] Ms Hazelle gave sworn evidence and submitted a witness statement 1. She also submitted a further statement in response to the Respondent’s evidence and submissions2.

[11] In her primary witness statement, Ms Hazelle said, in summary:

In addition to her salary, she was provided with accommodation for herself and her family. “We were not required to pay for utilities such as water usage, electricity or telephone bills during the time we resided on the hotel premises.” She and her family took up residence at the Hotel when she became Licensee.

She was required to work approximately 45 to 60 hours per week according to the rosters but was also to be available to oversee the operations of the hotel on a 24 hour basis if necessary. “All other conditions were covered by the Hospitality Modern Award, although I worked all public holidays and did not receive any days in lieu.”

“My duties as Licensee of the Meridian Hotel were as follows:

(a) Human resources/industrial relations;

(b) Wages;

(d) Maintenance and good repair of the building, plant and equipment;

(e) Cash control and other cash related tasks associated with running of the hotel;

(f) All promotional concepts and advertising, including marketing expenditure;

(g) Customer service;

(h) Accommodation;

(i) Cellar work;

(j) Ordering of stock and stock control.”

She had two children while working in Meridian and during both pregnancies, she worked up to 38 weeks and then took 4 weeks unpaid maternity leave. “As I lived on the hotel premises, I continued to oversee the operations of the hotel whist on maternity leave.”

From approximately 2005 to 2010, her husband “assisted the Respondent by doing repair and maintenance work throughout the venue, which saved the Respondent substantial money. Graeme completed 3 major renovations to the venue, including renovations to the indoor/outdoor gaming area, the TAB area and the sports bar.”

“During my employment as the Licensee of the Meridian Hotel, the Meridian Hotel was ranked as being in the top 5 gaming venues in NSW and held the number 1 position for 4 consecutive quarters according to government data. I consider that my work as Licensee assisted the Meridian Hotel to achieve this status ...”

She considered herself to have a good working relationship with the Respondent and Mr Scicluna. She was often requested to attend business functions where she was introduced by Mr G Thomas as ‘the best manageress’.

On or about 8 February 2011, she was asked to attend a meeting with Mr Scicluna. During this meeting, she was told by Mr Scicluna that Mr G Thomas was not happy with her and wanted her to resign. The conversation continued with words to the effect:

“Mr Scicluna: [Mr G Thomas] wants you out immediately. You won’t receive anything.

Ms Hazelle: I will not resign. This is unfair. I don’t deserve this. This is because I won’t pay the $3,500 excess fee relating to the stolen money isn’t it?

Mr Scicluna: [Mr G Thomas] believes that as you manage all the cash handling on site, you are responsible for all money errors. He is also not happy with your mystery shopper report.

Ms Hazelle: I have never received warnings. I have never been issued with warning letters nor have I ever been verbally reprimanded. I refuse to resign.

Mr Scicluna: Then I have no choice but to terminate your employment effective immediately.”

She denied that she had poor cash control and work performance. She had never received any warning in relation to her work performance or her responsibilities regarding cash control. She was often praised by Mr Scicluna and Mr C Thomas “for my high standard of work performance”.

In relation to the incident which led to her dismissal: “The theft was brought to my attention in December 2010 by the Respondent’s accountant who advised me that some of the Meridian Hotel’s takings for a period during November 2010 were missing. The amount missing was approximately $11,929.45. On the day the monies were stolen, I do not recall that there were any monies missing when I handed the cash to SCAN security. It is possible that the theft could have occurred after the monies left the hotel premises and after the monies were out of my control. When the theft was reported to Mr Thomas, he requested that I personally pay the amount of $11,929.45 to the Respondent to compensate it for the theft. I refused to do so. Mr Thomas then instructed me to further investigate the theft and lodge an insurance claim. A police report regarding the theft was filed at the end of December 2010. An insurance claim was lodged in January 2011 and the insurance company paid an amount of approximately $8,429.45 to the Respondent in early February 2011. Approximately 3 days after I refused to personally pay the insurance excess of $3,500 to the Respondent, the Respondent terminated my employment.”

She believed that her refusal to personally pay the insurance excess was the reason which led to her dismissal. “I was not given any warning that the theft or my refusal to personally pay the insurance excess would lead to the termination of my employment.”

She was pressured to vacate the hotel premises without adequate notice.

It was the general procedure of the Respondent that any employees who made accounting errors would be given 3 formal warnings before being dismissed.

She recalled an incident in or about 2008 where a large sum of money was stolen from another hotel owned by the Respondent where the Licensee of that hotel did not receive a warning and was not reprimanded following the theft. “I believe from my conversations with the Licensee at the time that the money was written off in the accounts.”

She and her family vacated the hotel premises 13 days after the dismissal and had since been forced to reside with family members.

“Shortly after the dismissal, the Respondent paid me 4 weeks salary in lieu of notice as well as my annual and long service leave entitlements.”

“Based on my calculation of my accommodation package, I regard my gross salary to be $108,910.40 per annum.”

Since her employment was terminated, her husband has had to work full-time in Queensland and she is the sole carer of the children and this has affected her in relation to other employment opportunities.

“Employment opportunities in the position of licensee of a hotel which is ranked in the top 5 according to Government data in Sydney (such as the Meridian Hotel) are difficult to obtain.”

“I do not consider that reinstatement of my position as Licensee of the Meridian Hotel is an appropriate remedy as my relationship with the Respondent has deteriorated to such an extent that a positive ongoing employment relationship with the Respondent would not be possible. I seek payment of compensation from the Respondent on the basis that my dismissal as Licensee of the Meridian Hotel was harsh, unjust and unreasonable.”

[12] In her further statement in reply, Ms Hazelle said:

That she denied that it had ever been a procedure that “either I or any of the hotel staff has been required to reconcile the bank statements to the weekly taking sheet when the bank statements are received. No one from the employer ever directed me to do that. It was never required and never done. The accountant undertook this process.”

That no written procedures were ever set out by Mr C Thomas in relation to cash takings.

“I would only refer to the bank statements and cross reference them to the weekly taking sheets if there was an imbalance in either the ATM machine or the cash safe.”

That on 10 November 2010 a security guard from Scan security attended her office. At that time “[T]here were 5 banking satchels sitting on my desk ready for banking.

“I then realised that cash was needed that day and whilst the security guard was present, I opened one satchel, took all of the money out, put $9,393.00 on top of the satchel and prepared a new banking satchel for a deposit of $2,536.45 (ie $11,929.45 less $9,394.00). I then prepared the Summary Slip and placed it in the new satchel.”

“It was my intention to bank the new satchel with $2,536.45 in it. I had left the new satchel with $2,536.45 in it and the cash I had extracted of $9,394.00 on top of it. That is the last time I saw the satchel and the cash on top. I believe the most likely scenario is that the security guard took the new satchel with the money on top (ie $11,929.45).”

She left her office in the company of the guard.

“There was nothing in my usual procedures that would have alerted me to realise that the new satchel was not banked.”

That she does not recall the purpose for which she intended to use the sum of $9,393.00. “Whatever I had intended to use that money for must not have eventuated and I did not consider it later that day.”

“I was not aware that there were any monies missing until 10 December 2010.” She was informed of this by Mr Cust.

That she had a practice of separating amounts of cash “in the interest of protecting the Respondent’s money.”

That she told Mr Cust on 11 December 2010 that the missing money could not be found. She then informed Mr Scicluna on 13 December 2010, at which time “I was under the impression that there had been a bank error rather than that the money was missing.”

That a new computer poker machine system was installed in September 2010 which was faulty “and there were constantly irregular balances of both surplus and deficit cash being generated by computer error. Management were aware of this and I deny the respondent’s contention that there were shortfalls of cash in the safe in the manner alleged.”

That on or about 21 December 2010 she spoke with Mr Scicluna: “I recall stating my opinion that the SS guard could have stolen it but that I couldn’t prove anything without CCTV footage.”

That she attempted to call Mr G Thomas on several occasions and also sent him text messages. However Mr Thomas and her never spoke in person about the missing money.

[13] Ms Hazelle’s statement in reply goes on to set out information relating to a previous incident where money went missing from the Hotel. On that occasion $546.25 in cash and a number of cheques were stolen by a security guard who picked up five bank bags but only delivered four to the bank. The theft was discovered by Mr Cust less than two weeks after it occurred and therefore CCTV footage was available. In that case, SS Security repaid the stolen cash to the Hotel.

[14] In cross-examination, Ms Hazelle:

Said that on 10 November 2010, she gave the security guard four satchels to transfer to the bank. 3

Said that she can’t be sure which four satchels the guard took. 4

Agreed that a Licensee “has the responsibility for the proper management of the licence.” 5

Agreed that she had responsibility for the banking of the Hotel’s money. 6

Agreed that rectifying problems identified in mystery shopper reports would have been her responsibility. 7

Agreed that she and her family still have personal possessions stored at the Hotel with the agreement of Mr Scicluna. 8

Denied that it was her long term practice to “check every item that was banked against the bank statement.” 9

Was asked: “But you didn't raise with Mr Cust when he arrived any concern at all about $11,929 not being on the bank statement, did you?” and replied: “That's not my job, no.” 10

Denied that she was aware, prior to the arrival of Mr Cust, that the takings for 9 November 2010 had not been banked. 11

Was asked: “So you were alive to the fact that there was a real question as to where $11,929 had gone?” and replied: “Yes.” Was then asked: “Before the auditor arrived?” and replied: “Yes.” 12

Was questioned at length concerning banking processes and the handling of cash at the Hotel.

Was asked: “You say that confidently now, do you, that the money was stolen?” and replied: “Yes.” 13

Was asked: “you were the person who last had the $11,000 in your hands when you were at the hotel, weren't you?” and replied: “Yes.” 14

Was asked: “You don't suggest that anybody else from the hotel was helping you doing the money or doing it in your place?” and replied: “No.” 15

Said that the CCTV equipment is angled to the safe and the office door, not towards the desk. 16

Said that it would have assisted if Mr Cust had come earlier to do his audit as CCTV footage would have been available. 17

Was asked: “But if you walked out with the guard then he didn't take it, did he?” and replied: “Well, I'm saying he did.” 18

Said that it was possible that the security guard took the cash off the table while she was in the room with him. 19

Agreed that she did not tell Mr Cust that she thought the money had been stolen by the guard as she did not know that it was missing at that time. 20

Denied that she had reconstructed events from documents that she looked at during the course of the Hotel’s investigation into the missing money. 21

Said that she had “a visual recollection of a satchel with $2300 in it - $2500 - and 9300 in cash sitting on top of it.” 22

Agreed that she did not see the security guard take any money, but assumed that he did. 23

[15] In answer to questions from me, Ms Hazelle said that she returned to the office within ten minutes of escorting the security guard out and that the office door has an automatic lock. She went on to say that she did not believe that she saw a satchel containing money and further cash on top of it before she left the office. “I don't remember seeing it the second I walked him out of the office door, no.” 24 She went on to say that when she returned to the office she had forgotten about the money she had placed on the desk.25

[16] Ms Hazelle went on to say that:

She disagreed that she knew the money was missing but “elected to keep quiet about it.” 26

The paper work was not completed when the security guard arrived and that she “felt rushed and uncomfortable that he was in there while I dealing with moneys.” 27

She had never spoken to Mr G Thomas in person about the events of 10 November 2010. 28

She agreed that she was not told by anyone that she would have to pay the insurance excess or be dismissed. 29

Mr G Thomas

[17] Mr G Thomas gave sworn evidence and submitted a witness statement 30. In his statement, Mr Thomas said, in summary:

He is the owner and director of the Respondent.

He is also the owner of some 13 other hotels that are part of the GTHG.

He has owned the Meridian Hotel since approximately 2000.

During her employment, Ms Hazelle was one of the best licensee/managers employed by the Respondent.

He agreed with Ms Hazelle’s evidence that they had a good working relationship and that he often referred Ms Hazelle as ‘the best manageress’.

In early December 2010, he was advised by the Hotel’s accountant that there appeared to be a deposit amount of $12,000 missing or unaccounted for.

Mr Scicluna and Mr C Thomas undertook an investigation into the missing money and he was later informed that the missing money represented the takings for 9 November 2010. “I was informed that there was no deposit slip completed and no record of it being checked off against the bank statement. There was no record of where the money went.”

“I was particularly concerned about the missing money, because it should have been picked up by the Applicant shortly thereafter in the cross checking process. This process showed the Applicant either knew the money was missing and did not report the matter, did not say anything or just did not know about it, which indicated to me the Hotel was not being managed to an acceptable standard. I considered this to be unacceptable conduct and a serious instance of negligence, particularly for someone with the Applicant’s experience and knowledge.”

In early January 2011, he was told by Mr Scicluna that Ms Hazelle did not know where or how the money was lost but would accept full responsibility for it. He had asked whether Ms Hazelle would repay the lost money and was later told that she refused to do so. A police report was subsequently made and an insurance claim lodged.

“Around the same time, it was reported to me by Chris Thomas that mystery shopper reports were coming back with poor ratings regarding the Hotel and the safe at the Hotel was not balancing. I cannot recall whether it was David Scicluna or Chris Thomas, but it was also reported to me that there were increased variances in the stock.”

Based on these reports he formed the opinion that the Hotel was being mismanaged and that Ms Hazelle had been negligent or had lost control of the running of the Hotel. “I was very concerned of the risks of cash and stock not being checked and balanced by the licensee/manager. These are serious matters and sets a bad example to other people, and exposes the Hotel to further losses. In a cash business failing to keep track of cash and stock is unacceptable.”

After a further discussion with Mr Scicluna and Mr C Thomas, it was decided that Ms Hazelle was to be offered the chance to resign.

He was later told by Mr Scicluna that Ms Hazelle “won’t resign unless we give her a few months pay on top.” He then told Mr Scicluna: “No. She has to go now. Make sure she gets all her notice and entitlements by the book.”

He denied having spoken with Ms Hazelle about the investigation. He also denied having any direct contact with the Applicant since he was informed about the missing monies.

[18] In cross-examination, Mr Thomas:

Agreed that for the whole period of her employment, Ms Hazelle was one of the best of GTHG’s Licensee Managers. 31

Agreed that there was no drop in Ms Hazelle’s performance before November 2010. 32

Agreed that all company decisions ultimately rest with him. 33

Said that he is guided by Mr Scicluna and Mr C Thomas and the information provided by them. 34

Said that he did not conduct any investigation himself into the missing money. 35

Said that he was unaware of a theft by a security guard from the Hotel in July 2010.

Said that he was concerned that Ms Hazelle had not discovered that money was missing by way of a cross check of bank statements. 36

Said that an experienced manager like Ms Hazelle should have picked up the discrepancy in the bank statement. 37

Said that although the missing money incident occurred in November 2010 and Ms Hazelle was not terminated until February 2011 was because an investigation was underway: “that's why it took us so long to find out exactly what's happening, investigating.” 38

Agreed that “we still don't really know what happened to the money...” 39

Said he did not ask Ms Hazelle to repay the missing money. 40

Said that even if Ms Hazelle has repaid the missing money, her employment would still be termination. 41

Agreed that Ms Hazelle was fully cooperative in the investigation into the missing money. 42

Said that he did not know if Ms Hazelle or another person had stolen the money. 43

Agreed that there had been no other case of missing money since Ms Hazelle began working for his company in 2001. 44

Said that it was his suggestion that Ms Hazelle be asked to repay the $3,500 insurance excess. 45

Was questioned extensively about the mystery shopper reports. 46

Agreed that the poor mystery shopper reports together with problems about missing stocks contributed to the decision to terminate Ms Hazelle’s employment. 47

Said that the ultimate decision to terminate Ms Hazelle’s employment was made by Mr Scicluna after consultation with him. 48

Agreed that it was usual to give a manager or other senior employee a warning when they do “something wrong”. 49

Said that in Ms Hazelle’s case, there was no explanation as to what had happened to the money. 50

Was questioned at length about missing money at another hotel owned by GTHG.

Mr Cust

[19] Mr Cust gave sworn evidence and submitted a witness statement 51. In his statement, Mr Cust said, in summary:

He is a partner in the accounting firm Nexia Court & Co. and is engaged as the independent accountant for the GTHG.

He is responsible for all of the accounting work for the Respondent and has been Mr Thomas’ accountant for nearly 40 years.

He checks the accounts of various hotels owned by the Respondent on a monthly basis and performs bank reconciliations of the hotels’ accounts to ensure that all monies are deposited and accounted for.

On or about 7 December 2010 he made his usual monthly visit to the Meridian Hotel to conduct the reconciliation of accounts. He gathered the documentation he needed, checked off some of the deposits, then took the paperwork home to finalise the reconciliation.

He discovered that an amount of $11,929.25 was entered as an amount to be banked for the week ending 14 November 2010, however, there was no entry in the Hotel’s bank account statement relating to this amount.

On or about 10 December 2010, he telephoned Ms Hazelle to enquire about the amount that did not show on the bank statement as being banked. Ms Hazelle said she didn’t understand why it was not there but would look for it. She later phoned him and said that: “I can’t find it and there is no deposit slip. I’ll have to have a look in all my hidey-holes.”

During the conversations with Ms Hazelle, she appeared unaware that the money was missing. “I found this odd as other deposits relating to the same period were ticked/checked off by her as having been deposited into the bank account so I was surprised that she had not picked up on this deposit not being banked and accordingly, advising me about this matter in the first week of December when I was at the Hotel.”

On or about 11 December 2010, he advised Mr C Thomas by telephone about the missing money and told him that he had spoken to Ms Hazelle and she did not know where the money was and that he could not find a deposit slip. Mr C Thomas told him that he would investigate the matter and would also do a ‘float count’ when he is in the Hotel. “I thought that this was a good idea as the safe may have been over in its float and this might account for the missing deposit.”

He later also contacted Mr Scicluna to advise him of the missing money and was told that he was aware of it and was looking into the incident. He also contacted Mr G Thomas about the incident and was told by him that he would ask Mr Scicluna and Mr C Thomas to “go to the hotel and check everything out”.

[20] In cross-examination, Mr Cust said that he does a reconciliation of the Hotel’s bank statement on a monthly basis and this is the same process followed for the other hotels in the GTHG. 52 He was then asked: “Is it the case do you say that at all of the hotels there is a procedure in place where the manager has to tick off the bank statements as they come in to the deposit book, is that what you're suggesting?” and replied: “That's correct.”53

[21] Mr Cust went on to say that there are cases where errors are found when he does a bank reconciliation and those errors are referred back to the relevant manager to “try and sort out where the error occurred”. 54 However, this was the first instance “where we have a complete day's takings missing.”55

[22] In re-examination, Mr Cust said that discrepancies in the reconciliation of bank statements were usually in the order of some $50. 56 In the case of the money which disappeared on 10 November 2010, he “would have expected the manager to notify David Scicluna initially about the problem prior to my visit to the hotel.”57

Mr Scicluna

[23] Mr Scicluna gave sworn evidence and submitted a witness statement 58.

[24] In his witness statement, Mr Scicluna said that he is the General Manager for the GTHG and has been employed in this position since August 1997. He has known Ms Hazelle since November 2000, and at the time of her dismissal she reported directly to him and Mr C Thomas. Mr Scicluna agreed that the Respondent did not provide Ms Hazelle with a written contract of employment but disagreed with her interpretation as to the terms and conditions of her employment and the benefits she received. Mr Scicluna’s statement set out in some detail the remuneration received by Ms Hazelle apart from her annual salary. He went on to say:

“The Applicant was required to work as many hours as needed to ensure she completed her duties to a satisfactory level. At no time was the Applicant requested or directed to work 45-60 hours per week. While the Applicant wrote her own roster, I did expect her to be rostered on shift at the busier times, as she was responsible for the business. There was considerable flexibility provided to the Applicant regarding her hours of work and her family commitments. She ultimately determined her own roster and her own hours of work. The Applicant’s conditions were not covered by the Hospitality Industry (General) Award 2010 (‘the HIGA’) or its predecessor as her position of Licensee/Manager is expressly excluded from that award. I negotiated the Applicant’s conditions of employment and never told her or suggested to her that the HIGA governed her conditions.”

[25] Mr Scicluna went on to set out the duties Ms Hazelle was required to perform in her position as the Licensee of the Hotel. He attributed the Hotel’s performance in the past not only to the performance of Ms Hazelle, but also to the Respondent’s ability to manage and run top gaming venues. He said that another hotel which is operated by the Respondent has also been ranked highly in the past.

[26] Mr Scicluna said that Ms Hazelle’s husband was paid at commercial rates for renovation work he performed. He was also permitted to use storage space and a home office at the Hotel at no cost to run his own business.

[27] Mr Scicluna went on to say that:

On 13 December 2010 he was told by Mr C Thomas that an amount of about $12,000 was missing from the Hotel. Mr Thomas told him that he would investigate the matter.

He was later told by Mr C Thomas that “he had conducted some ‘safe balances’ at the Hotel which fluctuated. A safe balance is a reconciliation of the cash that’s kept on the premises as an operating float.”

He checked through the documentation from the Hotel and concluded that the takings from 9 November 2010 amounting to $11,929.45 were missing from the Hotel’s bank records.

“The missing money fell directly within the Applicant’s responsibility as it was her duty, as the Licensee/Manager, to ensure daily cash takings are collected and deposited and to reconcile them against bank statements. While this may sometimes be performed by a Duty Manager, it was the Applicant’s responsibility for the dates in question.”

“I was particularly concerned that the Applicant had not reported the matter to me or to Chris Thomas. From my review of the relevant documents, I concluded that the Applicant had become aware of the missing money before the accountant’s visit/audit. I know this because the Applicant had marked the bank statement for the relevant period, she had checked/ticked off other deposits which had been made for that same week, and therefore must have been aware that there was amount of almost $12,000 missing.”

“This concerned me as it was apparent that the Applicant had noted the lack of credit for the deposit when she marked off the other deposits on the bank statement, yet had not reported it nor followed it up until the accountant pointed out the discrepancy during the audit in early December 2010.”

He later spoke with Ms Hazelle about the missing money and she said: “On the day the security guy came into the office to collect the banking, I hadn’t finished doing all of the satchels. I bagged up a number of deposits but there was one more which wasn’t ready. I didn’t like the idea of making the security guy wait so I decided to put it aside, only send the satchels which were finalised, and deal with the incomplete deposit later. But that was the last time I saw the satchel.”

He had a number of discussions with Ms Hazelle about the lost money and he asked if Ms Hazelle would repay the loss. Ms Hazelle said she would consider and later advised him that she would not do so since she did not take the money or have any personal gain from it.

On or about 27 December 2010 the incident was reported to the Police. Due to the time lapse the CCTV footage of the office was no longer available and the Police were unable to conduct any worthwhile investigation. “Had the Applicant reported the matter immediately or at an earlier time, the CCTV footage may have been available for investigation.”

An insurance claim was lodged in late December 2010 and the Hotel later received the amount of $8,429.45 being the amount of the missing money minus a $3,500 excess.

As a Licensee/Manager of the Hotel, Ms Hazelle is responsible for the two unfavourable ‘mystery shopper reports’ which are reports on the various areas of the hotel operation conducted by independent consultants or contractors. Those two reports were undertaken in December 2010 and January 2011.

On 7 February 2011 he met with Mr C Thomas and Mr G Thomas and had a discussion about Ms Hazelle’s work performance. He said that Mr G Thomas was not happy with Ms Hazelle’s performance and her “negligence in permitting the event to occur, her lax and indifferent attitude to not reporting the matter, her lax and indifferent attitude to finding the money and not following up the matter.” It was decided that Mr Scicluna would speak with Ms Hazelle to see if she would be willing to resign.

He met with Ms Hazelle on 8 February 2011 and terminated her employment during that meeting.

[28] In response to Ms Hazelle’s primary witness statement, Mr Scicluna:

Agreed that he had heard Mr G Thomas comment positively on Ms Hazelle’s abilities. “However, it was customary for Mr Thomas to acknowledge all his staff in public in this manner.”

Agreed that Ms Hazelle had not received any prior written warnings regarding her work performance or cash control ability.

Disagreed that the first time Ms Hazelle became aware of the missing money was when the investigation by the Hotel’s accountant commenced in December 2010.

Said that the incident involving the missing money and Ms Hazelle’s conduct in relation to the matter was unlike any other incident which had occurred at the Hotel. “It was most certainly the first time that a person in the position of the Applicant, and with the authority and trust reposed in her, has behaved in a similar way.”

[29] In cross-examination, Mr Scicluna said:

That a loss of some $8,000 at another GTHG hotel in 2008 was comprised of “a dribble of smaller losses”. 59 It was unable to be attributed to any one person.60

That the termination of Ms Hazelle was for work performance issues, including cash handling. 61

That the performance issues also incorporated the results of the mystery shopper reports. 62

That he did not at any stage form a view that Ms Hazelle took the money that went missing on 10 November 2010. 63

That although Ms Hazelle was not accused of taking the money, the loss was her responsibility. 64

That her refusal to repay any money was not a factor in the decision to terminate her employment. 65

That he did not at any time ask Ms Hazelle to repay the insurance excess of $3,500. 66

That the decision to terminate Ms Hazelle’s employment was reached in a meeting with Mr G Thomas and Mr C Thomas. 67

That the loss of the money would not in itself have warranted termination of employment. 68

That Ms Hazelle’s length of service and her previous good employment record together with Ms Hazelle’s version of events were taken into account before reaching the dismissal decision. 69

That it was Mr Cust’s responsibility to reconcile cash takings with the bank statements. 70

That “Experienc

ed managers do tend to perform that operation. However, obviously the accountant is there to check those as a third party.” 71

That it was not irregular for Ms Hazelle to have not done a reconciliation prior to Mr Cust performing that task. 72

[30] In re-examination, Mr Scicluna said that he understood Ms Hazelle’s explanation for the money going missing on 10 November 2010 was merely that she did not know what had happened to it. 73 He went on to say that the issue which primarily led to the dismissal of Ms Hazelle was not the amount of money lost “but the loss in itself. The loss or losing track of money, the cash control.”74

Mr C Thomas

[31] Mr C Thomas gave sworn evidence and submitted a witness statement 75. In his statement, Mr Thomas said that he is the Operations Manager for GTHG and has been employed in this position since approximately mid 2003. Prior to this position, he was employed as the Licensee/Manager of the Campsie Hotel.

[32] Mr Thomas’s statement went on to set out the process of how the daily cash takings of the Hotel are dealt with:

“a. At the end of the night shift, the daily takings are counted by the manager on duty at the Hotel and the final amount is recorded in a ‘daily takings sheet’.

b. During the next day shift, the licensee/manager (who was the Applicant) is required to check the entries in the ‘daily takings sheet’ and prepare a document recording the cash and cheque deposits to be made. This required the Applicant to complete a deposit ‘Summary Slip’ by entering into that document each individual cash deposit to be made.

c. The Applicant was then required to remove each deposit ‘Summary Slip’ for that day from the Deposit Book and place it into its own ‘cash-bag’ along with an equivalent amount of cash and seal that bag to ensure that it is ready to be collected and delivered to the bank. A copy of each deposit Summary Slip is retained in the Deposit Book. Then the daily takings are recorded in the Deposit Book. Then the daily takings are recorded in the blue book which is a copy of the weekly takings sheet.

d. The cash transit contractor engaged by the Hotel, Scan Security Pty Ltd (‘Scan’) attends the Hotel on Monday, Wednesday and Fridayto collect the sealed cash bags and take them to the St George Bank at Hurstville.

e. Scan’s employees are required to encounter sign a register indicating the total cash collected by them. This is done on a docket indicating the deposit summary slip numbers which are noted in a section labelled ‘EBD Nos’.

f. Within the next week, the Hotel receives a statement from the Bank. The Applicant was required to cross check the deposits on the bank statements with those registered in the deposit book and/or the weekly takings sheet to ensure that all cash takings had been banked. This reconciliation is conducted by the Applicant by reference to a computer generated weekly takings sheet.”

[33] On 11 December 2011, Mr Thomas was advised by Mr Cust of the discrepancy of about $12,000 in the Hotel’s banking for 10 November 2011. On 13 December 2011 he went to the Hotel and spoke with Ms Hazelle. Ms Hazelle told him that she did not know what happened to the missing money. Mr Thomas’ statement went on in some detail to set out the process of investigation he conducted, and attached to his statement a number of the relevant records including bank statements, daily takings sheets and deposit summary slips. He said:

“On the basis of the above information, I formed the view that the amount of $11,929.45 was not collected by Scan and was not banked. I further concluded that the Applicant should have been aware that:

a. the takings on 9 November 2010 were $11,929.45. She should have been aware of this either at the time she was doing the banking or soon after when she was cross checking the daily taking sheet with her bank statements;

b. the cash takings of $11,929.45 had not been recorded in the deposit Summary Slips and had not been collected by Scan;

c. the amount had not been banked as it did not appear in the bank statements; and

d. the amount of $11,929.45 was missing. This is because she had cross off the other amounts on [the computer generated weekly takings sheet] but not the $11,929.45.”

[34] On the same day he also conducted a ‘safe balance’ and found that it was $4,940 short. “I mentioned this to the Applicant but cannot recall what was said.” On or about 29 December 2010 he sent an email to Mr Scicluna summarising the review that he had undertaken.

[35] Mr Thomas’ statement goes on to deal with mystery shopper reports for the Hotel for 7 December 2010 and 19 January 2011. Both reports were of concern to him as the results were poor. Ms Hazelle was the Manager of shift at the time.

[36] During December 2010 he conducted further safe balances at the Hotel and recalls that “these safe balances also being out by approximately $5,000.00.” The safe balance problems were rectified by 21 December 2010 but he “wondered whether the Applicant was using cash in the safe for her own purposes and replenishing it.” There were also concerns about stock inventory and increases in beer waste.

[37] “It was apparent to me that the Applicant's management of the Hotel had become negligent. Along with the missing money, the safe wasn't balancing at times, the stock take variances and wastages [beer wastage] were getting high and there were poor mystery shopper reports coming in.”

[38] At a meeting with Mr G Thomas and Mr Scicluna in late 2010 there was general agreement that Mr Scicluna would ask Ms Hazelle to resign 76.

[39] In cross-examination, Mr Thomas said:

At all the GTHG hotels, the procedure is for the manager to check the bank reconciliations. 77

That cash takings procedures were not set out in any documentary form. 78

That an experienced manager would know what the procedure for handling cash was, although that procedure was not set down in writing. 79

That the disappearance of the money on 10 November 2010 and an earlier theft in July 2010 were not factors in the hotel ceasing to use Scan Security. 80

That no warning was issued to Ms Hazelle prior to her dismissal, although such warnings were sometimes given to employees to provide them with a second chance. 81

That the loss of the money on 10 November 2010 resulted in a loss of confidence in Ms Hazelle by the Hotel. 82 The delay from November 2010 to February 2011 in dismissing Ms Hazelle was to “give her the benefit of the doubt until we could find out what was happening.”83

That the mystery shopper reports only played a small role in the dismissal. 84

That irregularities in the safe checks also played a role in the dismissal. 85

That the safe checks ultimately did not reveal any missing money “but money did reappear and the way it reappeared for me is very questionable.” 86

That the safe not balancing could have been related to the TITO computer system. 87

That the issue of beer wastage was a “very minimal” part of the decision to dismiss Ms Hazelle. 88

[40] In re-examination, Mr Thomas said that Ms Hazelle had “no real explanation” for what happened to the money on 10 November 2010. 89

Security guard

[41] A security guard (the Guard) who was an employee of Scan Security in November 2010 gave evidence under summons. It was agreed in proceedings that the identity of the Guard would be suppressed in this decision.

[42] The Guard gave evidence that he has been employed in the security industry since September 1981 and holds the appropriate license. To hold that license he must have a clean criminal record in relation to matters involving his honesty. He was asked: “Have you ever been accused in your time in the security industry with ever having stolen any money from any of the premises you've attended?” and replied: “No, never.” 90

[43] The Guard went on to say, in summary:

He attended the Meridian Hotel on 10 November 2010 and is aware that a suggestion has been made that he stole the money which went missing on that day. 91

Said that he recognised the manager’s office in the Hotel from photographs shown to him prior to the hearing. 92

He does not recall any cash lying on a table in the manager’s office on 10 November 2010. 93 He went on to say that he could not remember cash ever “lying around in the Meridian” at other times also.94

Was asked: “Was there ever an occasion - either that day or any other - when you took from the Meridian Hotel, $11,000 in cash for your own purposes?” and replied: “No.” 95

[44] In cross-examination, the Guard said that Scan Security no longer performs work for the Hotel. 96 He went on to say that he did not know why this was so.97

[45] The Guard went on to say that he did not remember the events of 10 November 2010 “in any specific detail”. 98 However, he remembered the general procedure undertaken that day. “I attended the hotel with my partner who I work with and he waited outside. He's the lookout. I went into the hotel. I went to the bar. The bar attendant notified Heather I was here. She let me in. It was just normal. There was nothing that stood out. I just went in there. I started preparing my docket book for the bags, wrote down - the first thing I do is I write down the name of the venue at the top, my name, sign it, the bank - which bank it is, then I get the four bags and write down the numbers. I write down the number of bags. I get the total off Heather and then I give the book - the docket book to her to verify it, sign, and I sign the banking register that she has there. I put the satchel - the express bags into our banking bag. I zip it up. I put the security seal on it, then I say, ‘See ya later,’ and I leave. We take it to the bank and then hand it over to the teller.”99 The Guard has no recollection as to whether it was Ms Hazelle who handed the money bags to him on 10 November 2011.100

Submissions

Ms Hazelle

[46] Ms Hazelle, per her solicitors, filed a written outline of submissions prior to the hearing. 101 In those submissions, the Applicant argues that her dismissal was harsh, unjust and unreasonable as defined in s.387 of the Act for the following reasons:

“(a) There was not a valid reason for the dismissal. The reason give to the Applicant for the dismissal was ‘poor work performance and cash control.’ The Applicant denies that she performed poorly in her role generally or in relation to cash control. To the contrary, the Applicant was often praised by the Respondent’s director and managers in relation to her work performance. The Applicant submits that the actual reason for the dismissal was because she refused to pay an insurance excess of $3,500 in relation to monies that were stolen from the hotel premises. This is not a valid reason for the dismissal.

(b) The Applicant was only notified of the reason for the dismissal at the time that she was informed her employment was to be terminated.

(d) The Applicant had not been given any verbal or written warning in relation to unsatisfactory performance during the whole of her employment with the Respondent. This is inconsistent with the Respondent’s general procedures for employees to be given 3 warnings in relation to their performance before they would be dismissed.”

[47] The submissions go on to say that reinstatement is not appropriate as “the relationship between employee and employer has broken down and is beyond repair”. In lieu of reinstatement, Ms Hazelle claims compensation based on a total salary package of $109,910.40 per annum, being comprised of a base salary of $69,910.40 per annum plus accommodation benefits valued by the Applicant at $40,000 per annum.

[48] Ms Hazelle also relies on the length of her employment by the Respondent.

[49] The submissions go on to say:

“If the Applicant was still employed by the Respondent in May 2011 (a mere 3 months after her dismissal), she would be entitled to an additional 4 weeks long service leave in accordance with section 4(2) of the Long Service Leave Act 1955 (NSW). The Applicant did not receive a proportionate amount of long service leave for her employment of between 10 years of continuous service and 15 years of continuous service with the Respondent in accordance with section 4(2) of the Long Service Leave Act 1955 (NSW).

As a result of the dismissal, the Applicant and her family were uprooted from their home in the premises owned by the Respondent at short notice. The Applicant’s husband was forced to temporarily move to Queensland to work to earn a greater income to support the Applicant and their family as they no longer had the Applicant’s income to rely on. The Applicant has remained in Sydney and is the sole carer of the children. If the Applicant had not been dismissed, the family would have remained together in Sydney.

The Applicant had spent money on internal renovations to the residence which she and her family had lived in for approximately 6 years. As the Applicant was forced to move out of the premises as a result of the dismissal, she no longer receives the benefit from these renovations. The Respondent has received a benefit as a result of these renovations as they add value to the premises.”

[50] In supporting oral submissions, Mr Groundwater said, in summary:

The Applicant had no obligation to check the bank reconciliation against the cash taking records of the Hotel. Ms Hazelle relies on both her own evidence and the evidence of Mr Scicluna to that effect. The evidence of Mr G Thomas and Mr C Thomas on this point should not be accepted. 102

The Applicant was busy and ‘flustered’ on 10 November 2010 and this explains any error of judgement that she made on that day. “... what she did here was have a momentary lapse in judgment or concentration in leaving this money on the bench in her office. She left that at a time where the security guard could have had unfettered access to it.” 103

The money was mostly likely taken by the security guard. 104

Ms Hazelle committed one error in 15 years of service with the Hotel and the loss should be seen in the context of the Hotel’s takings being in excess of $1.6 million per week. 105 The Respondent accepts that Ms Hazelle’s performance was not in question prior to December 2010 and January 2011. Ms Hazelle relies on the evidence of Mr Scicluna on this point.106

Any problems with safe balances can be explained by computer systems problems. 107

The manager of another hotel in the GTHG was not dismissed when similar circumstances arose in relation to missing money. 108

Ms Hazelle “concedes that had she been more diligent, then perhaps what occurred may not have occurred, except what she would ask you to take into account is that what she has done is, on her version, left this money in her office in a secured place with a trusted person in the security guard, so to that extent she says that had she been watching the security guard more closely, perhaps this could have been averted, but she didn't and if that was her error, well, she accepts that.” 109

Due to her need to be the full time carer of her children whilst her husband is working in Queensland, Ms Hazelle has been unable to mitigate her loss since her dismissal and claims the maximum compensation available under the Act.

[51] In reply to the oral submissions of Mr Kimber, Mr Groundwater said that the justification for termination based on the money which went missing on 10 November 2010 was contrived after the event. The Applicant relies again on the evidence of Mr Scicluna, as well as her own evidence, that her employment would not have been terminated for the missing money issue alone.

The Hotel

[52] The Hotel, per Mr Kimber and Mr Shariff, filed a written outline of submissions prior to the hearing 110. The Hotel later filed supplementary submissions111 and a further document titled Summary of Evidence as to the Process112. In its initial outline of submissions, the Hotel acknowledged that Ms Hazelle was “a long standing and valued employee”. The submissions went on to say:

“The position carried statutory and other critical responsibilities, including prudent financial management. In particular, the Applicant's day to day responsibilities included the daily tasks of:

a. checking the takings of the day before; and

b. completing the necessary paperwork associated with the banking of the cash takings; and

c. arranging the handing of those cash takings to security guards contracted by the Respondent to undertake the relevant banking thereof.

On the morning of 10 November 2010, the Applicant had in her possession a designated cash sum of $11,929.45 (which was a part of the overall takings for 9 November 2010). This sum was to be banked that morning. The said sum was not banked and disappeared without a trace during the course of that morning.

The Applicant was aware that day (i.e. on 10 November 2010) that the $11,929.45 had "gone missing" yet did not advise the Respondent of this significant fact.

The Applicant, when recalling the events of 10 November 2010, has not been able to explain:

a. How and when it was that she lost possession of the significant sum of money;

b. Why she did not immediately "raise the alarm" about the disappearance of that money (and hence enable, inter alia, the checking of CCTV footage of the room in which she had seemingly last seen the money, with a view to possibly explaining that disappearance -being footage routinely deleted after 28 days of recording);

c. Why she did not take any other steps that day (or on the days that followed) to try and trace the money, for example by contacting the security guard company to try and trace the money to see whether the guards took the money inadvertently or otherwise;

d. Why she did not even inform the Respondent's accountant about the money on or before 7 December 2010 (almost a month later) when he attended the Hotel premises to conduct a monthly audit;

e. Why she told the Respondent's accountant in early December 2010 (in effect) that she did not know anything about the missing money, when it is clear that she did have important knowledge about it.

The Applicant's absence of any, let alone any satisfactory, explanation(s) with respect to all the above matters left the Respondent with misgivings and doubts about the reliability, trustworthiness, candour and ongoing competence of the Applicant, given her critical autonomous senior role in the Respondent's organisation.

Whilst the Respondent did not, at any stage, accuse the Applicant of stealing the money -given the absence of any direct evidence to support such a serious allegation -the Applicant's "no recollection" explanation coupled with her failure to report the loss at any time in the three weeks prior to the December 2010 audit, caused the Respondent to infer that the Applicant had made a serious mistake on the morning of 10 November 2010 and decided not to admit it -hoping that her error may not be picked up.”

[53] The submissions go on to argue that during December 2010 and January 2011 the Hotel became aware of other problems with Ms Hazelle’s performance in relation to safe audits, drink/product wastage and poor mystery shopper reports. Ms Hazelle was unable to offer explanations for these further problems.

[54] “By February 2011, the combined effect on the Respondent, of all of the above matters was to doubt that the Applicant could be trusted to perform her role as Licensee to the standard required by the law and by the Respondent. Accordingly, once the Applicant indicated that, in spite of the fact that she told the Respondent that she took full responsibility for the loss of the $11,929.49 in November 2010, she was not even prepared to partially reimburse the Respondent for the $3,500.00 costs (namely the excess on the insurance claim) of recovering the $11,929.49 from its insurer being a cost only incurred due to her undisclosed mistake. It was clear to the Respondent that there was no mutual trust, confidence and respect left in the relationship to enable it to continue.”

[55] Due to Ms Hazelle’s status as a previously valued employee, the Hotel offered her the opportunity to resign and did not seek to summarily dismiss her.

[56] The Respondent’s supplementary written submissions are largely a re-statement of the primary written submissions and also refer my attention to relevant case law. I have paid regard to that further material and I have also paid regard to the respondent’s further ‘Summary of Evidence as to the Process’ in making my decision in this matter.

[57] In supporting oral submissions, Mr Kimber said, in summary:

The proposition we put is that even good and long-standing workers can make serious errors of judgment.” 113

The explanations offered by Ms Hazelle for the loss of the money and for her subsequent conduct “are entirely untenable”. 114

That the question of whether Ms Hazelle should have been offered a second chance must be seen in context. “Ordinarily when one is embracing second chance, you're embracing it because a good explanation is ventured.” 115

That “She was terminated in accordance with her contract by a payment in lieu of notice.” 116

That Ms Hazelle knew of the loss of money prior to the arrival of Mr Cust because she had crosschecked the banking records. 117

That Ms Hazelle was not treated as if she had stolen the money. 118

“She provided the opportunity for the theft by the failure of her to adhere to basic rules about security and the way the system is supposed to operate.” 119

That Ms Hazelle’s explanation that she forgot all about the money which went missing is not credible. 120

Conclusions and Findings

[58] Ms Hazelle’s employment was terminated by the Hotel on 8 February 2011. The dismissal followed an investigation by the Hotel into the disappearance of $11,929.45 in cash on 10 November 2010. That money was in the custody of Ms Hazelle and the Applicant has not denied that its loss was her responsibility. The dismissal followed the forming of the view by Mr G Thomas, Mr C Thomas and Mr Scicluna that the Applicant’s actions on 10 November 2010 and her later lack of ‘any credible explanation’ for how the money came to be lost caused a loss of trust in her such that her continued employment at the Hotel as Licensee and Manager was not possible.

[59] The Hotel also relies on subsidiary performance issues in relation to safe balances, poor mystery shopper results and ullage to justify the termination of employment.

[60] Section 385 of the Act provides:

“385 What is an unfair dismissal

A person has been unfairly dismissed if FWA is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[61] As the Applicant’s conduct by way of her actions or omissions on 10 November 2010 and subsequently in relation to the money which went missing is the primary reason given by the Hotel for the termination, I have to determine for myself whether the impugned conduct occurred and, if so, its nature and then, depending on the outcome of my determination of the earlier matters, whether any such conduct 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 121:

“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.”

[62] In Container Terminals Australia Limited v Toby 122, a Full Bench of the Australian Industrial Relations Commission said: “In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable…”123

[63] Northrop J in Selvachandran v Peteron Plastics Pty Ltd 124 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, ….”

[64] In Qantas Airways Ltd v Cornwall 125, 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.”

[65] In Edwards v Justice Giudice 126, 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.”

[66] It is not in contest that Ms Hazelle had the sum of $11,929.45 in her custody on 10 November 2010. On that date she prepared five bags for banking and only four of those bags arrived at the bank in the custody of the security guard. Her evidence is that the fifth bag containing the sum of $11,929.45 was sealed by her and then reopened by her in the presence of the security guard when she realised that she needed to retain $9,393 from the total in the bag for Hotel purposes. She took all the money out, put $9,393 on top of the satchel and prepared a new banking satchel for a deposit of $2,536.45 and a new summary slip. She then left the new satchel with $2,536.45 in it and the remaining $9,393 on top of it. She said she last remembered seeing the fifth satchel and the money on top of it sitting on the desk in her office. She accompanied the security guard outside and the door of the office locked automatically behind her. She returned to the office some ten minutes later but had forgotten about the fifth satchel. She first realised the money was missing when advised by Mr Cust on 10 December 2010. It is her belief that the most likely scenario is that the security guard stole the fifth satchel and the money that was on top of it. If that scenario is true, then the guard would have had to steal the satchel and the money whilst he and Ms Hazelle were both in the office.

[67] From photographic evidence of the layout of the office 127, given its dimensions, it is in my view highly unlikely that anybody could have removed both the satchel and money sitting separately on top of it without Ms Hazelle being aware of it.

[68] In certain important respects, I am unable to accept the evidence of Ms Hazelle. Firstly, I do not believe that the security guard stole the money. He was never interviewed by police and was certainly never a ‘person of interest’ in the disappearance of the money. He is a man of good character and record and I reject any inference that he was guilty of stealing from the Hotel. The Applicant only accused the security guard of theft well into the Hotel’s investigation of the loss. The security guard denied any theft when he gave evidence in these proceedings and in cross-examination that evidence was not challenged. Secondly, I reject Ms Hazelle’s assertion that on returning to her office after only some ten minutes, she had totally forgotten about the existence of the fifth satchel with the money in it and the money on top of it and was not aware of the missing money until advised by Mr Cust on 10 December 2010. This assertion strains credulity beyond breaking point. In cross-examination, Ms Hazelle’s evidence was ambivalent about whether she knew of the theft prior to 10 December 2010. I am satisfied that she did and was aware of the loss at least from the date she received the relevant bank statement. It is not material whether the crosschecking of deposit records against the bank statements was a required part of her job, I believe that in practice she did so on a regular basis. The handling of the Hotel’s cash takings was an integral part of her duties as Licensee/Manager and the crosschecking against bank statements would be a normal prudent part of such duties.

[69] All in all, on the balance of probabilities, I am satisfied and find that there was a valid reason for the termination of Ms Hazelle’s employment based on her actions or omissions on 10 November 2010 and her subsequent actions in concealing the disappearance of the money until its discovery became inevitable with the arrival of Mr Cust to do his routine audit on 10 December 2010.

[70] My rejection of Ms Hazelle’s contention that she just forgot about the existence of the $11,929.45 is buttressed by her evidence that she reopened the fifth bag to extract $9393 for a specific purpose. If that is true, the absence of the relevant sum of money would have become all too apparent in a short period of time. The inevitable conclusion that I have reached is that, at the very least, the money was still on Ms Hazelle’s desk when she left her office in the Company of the security guard. When she returned, or shortly after she returned, she discovered that the money was missing. She may well then have panicked and not reported the disappearance of the money in the vain hope that it might somehow reappear. In the meantime, the CCTV footage which would probably have revealed the money’s fate became unavailable. If I am correct in my deduction that Ms Hazelle knew on 10 November 2010 or shortly thereafter that the money was missing, the question then arises as to why she did not check the CCTV footage. Her failure to do so would be of understandable concern to the Hotel given the position of trust which she held. It must be remembered that it was CCTV footage which proved that a previous security guard had stolen money on an earlier occasion.

[71] Even if I am wrong in my conclusions concerning Ms Hazelle’s knowledge of the loss of money on 10 November 2010, my finding on valid reason would be the same. Even if everything Ms Hazelle said is true, the simple fact remains that a large sum of money in her custody still disappeared without trace on 10 November 2010. The loss of that money was her responsibility, whatever happened to it. Someone took the money and was given the opportunity to do so because Ms Hazelle left it unattended on the office desk.

[72] Ms Hazelle asserts that the termination of her employment followed her refusal to repay the Hotel the $3,500 insurance excess. Evidence in proceedings was at variance over whether Ms Hazelle was asked to repay that sum. If she was asked to repay the excess, such a request would not have been remarkable in the circumstances. However I do not consider this issue to be material to my consideration.

[73] However, I do not agree with the Hotel’s assertion that three other factors, namely the problem with safe balances, the mystery shopper reports and the ullage were factors that supported a valid reason for the dismissal. There is serious doubt in my mind in relation to the safe balances, given the computer problems which were occurring at the Hotel at the time. The mystery shopper reports and the ullage issue were definitely worrying for the Hotel but would have warranted no more than a warning to Ms Hazelle to ‘lift her game’.

[74] I now turn to the question of whether the dismissal of the Applicant was harsh, unjust or unreasonable. Section 387 of the Act sets out the criteria for considering harshness etc. It provides:

“387 Criteria for considering harshness etc.

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

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

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

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

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

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

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

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

(h) any other matters that FWA considers relevant.”

[75] In Byrne v Australian Airlines 128, McHugh and Gummow JJ of the High Court said:

“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.”

[76] The question of valid reason is dealt with above.

[77] It is apparent from the materials and evidence that Ms Hazelle was notified of the reason for the termination of her employment and I so find.

[78] I am further satisfied and find that Ms Hazelle was given an opportunity to respond to allegations against her. It does not appear that the Hotel refused to allow Ms Hazelle to have a support person present during the process leading up to the termination of her employment and I so find. Issues related to unsatisfactory performance, beyond the events of 10 November 2010 and the consequences of those events, do not arise. In this context, I also refer to my remarks above concerning alleged performance issues. Ms Hazelle appears, and the Hotel does not contest this, to have been an exemplary employee until November 2010.

[79] The GTHG appears to be the employer of a significant number of persons but does not appear to have its own internal resources in legal, accounting and industrial relations areas. This would have impacted on the processes followed in the termination of Ms Hazelle’s employment and I so find.

[80] On balance, and after a consideration of all the evidence, materials and submissions before me, I have come to the conclusion and find that the termination of Ms Hazelle’s employment was not harsh, unjust or unreasonable in all the circumstances. Ms Hazelle held a position of trust at the Hotel and must bear the responsibility for the loss of the money on 10 November 2010. In the making of this decision, I have paid regard to Ms Hazelle’s long service at the Hotel, her age and employment prospects and the undoubtedly severe financial impact on her and her family of the termination of her employment.

[81] In accordance with s.381(2) of the Act, I am further satisfied that each party has been accorded a ‘fair go all round’ in these proceedings.

[82] Ms Hazelle’s application for relief is dismissed. An order reflecting this decision is in PR516941.

COMMISSIONER

Appearances:

D Groundwater for Heather Hazelle.

M Kimber SC and Y Shariff of Counsel for George Thomas Hotels (Hurstville) Pty Ltd t/as Meridian Hotel.

Hearing details:

2011.
Sydney:
June 6;
August 8, 9.

1 Exhibit Hazelle 1.

2 Exhibit Hazelle 2.

3 Transcript PN198.

4 Transcript PNs219 and 224.

5 Transcript PN236.

6 Transcript PN258.

7 Transcript PN283.

8 Transcript PNs319-320.

9 Transcript PN356.

10 Transcript PN386.

11 Transcript PN387.

12 Transcript PNs390-391.

13 Transcript PN748.

14 Transcript PN777.

15 Transcript PN778.

16 Transcript PN791.

17 Transcript PN796.

18 Transcript PN826.

19 Transcript PNs827-829.

20 Transcript PNs835-836.

21 Transcript PN903.

22 Transcript PN1001.

23 Transcript PNs1007-1008.

24 Transcript PN1050.

25 Transcript PN1053.

26 Transcript PN1070.

27 Transcript PN1411.

28 Transcript PN1488.

29 Transcript PN1594.

30 Exhibit Meridian 8.

31 Transcript PNs1957-1958.

32 Transcript PN1973.

33 Transcript PNs1983-1984.

34 Transcript PN1987.

35 Transcript PNs1990-1991.

36 Transcript PN2098.

37 Transcript PN2118.

38 Transcript PN2138.

39 Transcript PN2143.

40 Transcript PNs2170 and 2173.

41 Transcript PNs2184-2193.

42 Transcript PN2197.

43 Transcript PNs2203-2204.

44 Transcript PN2207.

45 Transcript PN2235.

46 Transcript PNs2238 and following.

47 Transcript PN2281.

48 Transcript PN2291 and following.

49 Transcript PN2305.

50 Transcript PN2312.

51 Exhibit Meridian 9.

52 Transcript PNs2395-2396.

53 Transcript PN2397.

54 Transcript PN2418.

55 Transcript PN2419.

56 Transcript PN2453.

57 Transcript PN2454.

58 Exhibit Meridian 10.

59 Transcript PN2486.

60 Transcript PN2487.

61 Transcript PN2492.

62 Transcript PN2501 and following.

63 Transcript PN2552.

64 Transcript PN2553.

65 Transcript PN2554.

66 Transcript PN2557.

67 Transcript PN2562.

68 Transcript PNs2563-2564.

69 Transcript PNs2565-2568.

70 Transcript PNs2578-2580.

71 Transcript PN2581.

72 Transcript PN2583.

73 Transcript PNs2612-2614.

74 Transcript PNs2656-2657.

75 Exhibit Meridian 11.

76 See Exhibit Meridian 6.

77 Transcript PN2806 and following.

78 Transcript PN2835.

79 Transcript PN2849.

80 Transcript PN2883.

81 Transcript PNs2902-2908.

82 Transcript PN2937.

83 Transcript PN2938.

84 Transcript PN2973.

85 Transcript PNs2982-2983.

86 Transcript PN2989.

87 Transcript PN2990.

88 Transcript PN3029.

89 Transcript PN3046.

90 Transcript PN2710.

91 Transcript PNs2715-2716.

92 Transcript PNs2720-2725.

93 Transcript PN2726.

94 Transcript PN2728.

95 Transcript PN2736.

96 Transcript PN2742 and following.

97 Transcript PN2752.

98 Transcript PN2763.

99 Transcript PN2765.

100 Transcript PN2767.

101 Exhibit Hazelle 6.

102 Transcript PNs3100-3102.

103 Transcript PN3108.

104 Transcript PN3111.

105 Transcript PN3121.

106 Transcript PN3124.

107 Transcript PN3136.

108 Transcript PN3154.

109 Transcript PN3165.

110 Exhibit Meridian 12.

111 Exhibit Meridian 13.

112 Exhibit Meridian 14.

113 Transcript PN3209.

114 Transcript PN3213.

115 Transcript PN3220.

116 Transcript PN3243.

117 Transcript PN3270.

118 Transcript PN3245.

119 Transcript PN3248.

120 Transcript PN3252.

121 Print S4213, 17 March 2000.

122 Print S8434, 24 July 2000.

123 Ibid at para 15.

124 (1995) 62 IR 371 at 373.

125 [1998] FCA 865.

126 [1999] FCA 1836.

127 See Exhibit Meridian 4.

128 (1995) 185 CLR 410.

Printed by authority of the Commonwealth Government Printer