Heather Munckton v Laser Bean Pty Ltd T/A Muzz Buzz

[2015] FWC 2874

[2015] FWC 2874

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Heather Munckton
v
Laser Bean Pty Ltd T/A Muzz Buzz
(U2014/16102)

COMMISSIONER BISSETT MELBOURNE, 30 APRIL 2015

Application for relief from unfair dismissal - Small Business Fair Dismissal Code.

[1] Ms Heather Munckton (the Applicant) has made an application for relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009. She worked for Laser Bean Pty Ltd T/A Muzz Buzz from September 2013 until her employment was terminated on 3 December 2014.

[2] Laser Bean (the Respondent) operates two Muzz Buzz (drive though coffee shop) sites, one at Rowville and another at Moorabbin. Across both sites Laser Bean employed a total of 7 or 8 employees at the time the Applicant’s employment was terminated. The Respondent therefore operates a small business.

[3] The Applicant commenced employment as a casual employee in September 2013 at Muzz Buzz Moorabbin. Her uncontested evidence is that as a casual employee she worked the same shifts every week with the occasional extra shift. She moved to Muzz Buzz Rowville and in September 2014 she became an on-going employee.

[4] The Applicant was terminated on 3 December 2014 but was required to work until the end of her roster on 7 December 2015. The termination therefore took effect on 7 December 2014.

[5] The Applicant was represented by Mr John Frandsen, a family friend, in the proceedings. Mr Ciprian Stinean, the Director of Laser Bean, represented the Respondent.

[6] Ms Munckton, Mr Rahul Vase, and Ms Emma Carapellotti gave evidence for Ms Munckton and Mr Stinean and Mrs Christine Stinean (an employee of the Respondent) gave evidence for the Respondent.

[7] The letter of termination received by the Applicant (dated 3 December 2014 but received after 7 December 2014 1) said:

I consider that your performance and conduct is still unsatisfactory and have decided to terminate your employment for the following reasons:

● gross misconduct and behaviour against your employer;
● deliberately behaving in a way that is inconsistent with continuing your employment;
● refusing to carry out reasonable instructions that is part of your job;
● breach of confidentiality agreement;
● store appearance assessed against our standards.

Your employment will end on 07/12/2014…

Small business fair dismissal code

[8] Section 396 of the Act states that:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[9] As the Respondent is a small business it is necessary that I consider if the dismissal was consistent with the Small Business fair Dismissal Code (the Code).

[10] The Code states:

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

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.

[11] The Applicant was not summarily dismissed so that part of the Code does dealing with summary dismissal not apply in this case.

[12] For this dismissal to be consistent with the Code:

● The dismissal must be for a valid reason based on conduct or capacity of the Applicant;
● The Applicant must have been warned verbally or in writing that she risks dismissal if there is no improvement;
● The Respondent must have given the Applicant an opportunity to respond to the warning and the Applicant must be given a reasonable chance to rectify the problem, having regard to the Applicant’s response.

[13] Procedurally, in the discussions where dismissal was possible the Applicant can have another person with her.

[14] In determining if the dismissal is consistent with the Code I have considered each of the matters set out in the Code as well as whether the Applicant could have had another person with her in the meeting when she was dismissed.

A valid reason relating to capacity or conduct

[15] In his evidence Mr Stinean expanded on the reasons for dismissal of the Applicant set out in the termination letter. On the gross misconduct he explains that this was a failure by the Applicant to follow his direction to implement a specific rostering strategy. He refers to an email sent to the Applicant on 1 October 2014 in which he said that he wants Larissa to be rostered on Saturdays and for Emma not to receive two shifts on Saturdays. He also indicates that he wants the morning weekday shift for the second employee to finish earlier (at least on Thursdays) as there is not enough business to justify two staff. He also indicates that it would be ‘good to sit down and analyse the roster a bit’ because he thought ‘we can save money every day if we organise the shifts better. Think about it and let me know your arguments.’ 2

[16] The Applicant’s responds that she does not think rostering Larissa on Saturday mornings is a good idea because that time is the ‘lifeline for the week’ and the customers like to see the staff they are used to on a weekend. The Applicant also indicates that Larissa displays some attitude problems as she considered herself a friend of the Stinean family. 3 Mr Stinean responds to the Applicant that ‘You will do it the way I told you to do it or you wont do it at all!!! Please don’t forget where your place is!’4 (sic) The Applicant replies, saying:

That’s not fair to say to remember where my place is because if you wanted a manger because you wanted to not have to worry about all of this then you need to step back. Your main concern is the money and mine is the customers and what’s best for the shop and that’s what I’m trying to do and when it suits you you tell me it’s your shop and your decisions and when it’s something you don’t really care about you tell me it’s my shop to do what I want. If you want someone who does whatever you tell them and is just there to do what you want then you definitely picked the wrong person. Sorry for thinking you wanted to step back and let this shop succeed.’ 5

[17] Mr Stinean sends a further reply in which he, indicates that it is his business to run as he sees fit, ending with ‘Put Larissa on one shift a week as I told you and don’t step on what I say if you want things to run smooth…’ to which the Applicant responds ‘She can go on a Wednesday with lucy. She’s not going on Saturday.’ 6 (sic) Larissa was ultimately rostered on a Saturday.

[18] On 7 October 2014 Muzz Buzz (the franchisor) receives feedback from a customer in relation to service and quality on a Saturday at Rowville. This was fed through to Mr Stinean who forwarded it to the Applicant with a note that stated ‘I saw this coming :) Please have a chat with Emma and Larissa…’ 7

[19] In her evidence the Applicant says that she understood that she had been employed to manage the Rowville store. Part of this includes the rostering. She believes that she should have the responsibility to roster but that if Mr Stinean wanted to set some rules around this he should sit down and discuss the matter with her. She believes that, given the complaint of 7 October 2014 she was justified in not wanting to roster Larissa on a Saturday. As to the weekday shifts she gives evidence that she had reduced the lengths of those shifts based on her observation of demand and the need to get other tasks in the shop completed.

[20] On the basis of the documents and evidence it is clear there was at times conflict between the Applicant and Mr Stinean as to rostering. Whilst the Applicant considers that, as store manager, she should have the final say on such matters she in her evidence she failed to acknowledge, ultimately, it was Mr Stinean’s business and he had a right to make decisions as to how the business should be run and that she, as an employee, should accede to these decisions.

[21] The tone of the emails between the Applicant and Mr Stinean leave a lot to be desired. There is nothing professional in the way either of them addressed the other. The emails read more like a fight between two young children than exchanges between a business owner and one of his senior employees. Neither of the Applicant nor Mr Stinean addressed the other in a way that suggested maturity or an understanding of the basis of a sound working relationship.

[22] Despite all of this I do find that, while the Applicant ultimately did follow the direction given to her in respect of Larissa, she did so reluctantly and after an inappropriate exchange of emails with Mr Stinean. In normal circumstances, if an employee addressed their manager in such a way it might be found to provide valid grounds for disciplinary action, up to and including dismissal. I find, however, in this case that Mr Stinean did nothing to encourage cooperation from the Applicant but did encourage the responses he received by the tone of his communication with her. Mr Stinean sets the tone for communication with his staff and he cannot be surprised when this was reflected back to him.

[23] Mr Stinean also gives evidence that the Applicant’s behaviour was inconsistent with continuing her employment and included a refusal to listen to advice, a refusal to wear a uniform and a refusal to clean the shop.

[24] It is not clear what Mr Stinean relies on in particular to show that the Applicant refused to listen to advice unless it is to the issue of rostering already considered.

[25] With respect to a refusal to wear a uniform Mr Stinean’s evidence is that he saw the Applicant via his remote video monitoring of the shop not wearing the bandana that is part of the uniform. The Applicant’s evidence is that she forgot to put it on when she came out of the toilets (staff had been instructed not to wear them in the toilet) and when she was reminded she put it on straight away. That she did put it on straight away is not disputed. Mr Stinean gives no other evidence of other times when she did not wear her uniform. There is no evidence that the Applicant refused to wear her uniform.

[26] I understand the refusal to carry out reasonable instructions goes to the rostering issues outlined above. Nothing was put to the Commission of any other matter.

[27] Mr Stinean says that in the days following her dismissal the Applicant contacted a number of customers to complain to them of the treatment she received from the Respondent. Mr Stinean submits that, as a result of this contact by the Applicant, a number of loyal customers have stopped coming to the shop. The only evidence given to support this submission was the evidence of Mrs Stinean who gives evidence that a regular customer told her on 4 December 2015 that the Applicant told him she was going to quit because she was being bullied by Mr Stinean. No customers gave any direct evidence. Apart from Mr Stinean’s submission no other material was provided to the Commission to support this submission. Mr Stinean submits that this behaviour of the Applicant is in breach of the confidentiality agreement she signed. 8

[28] There is nothing before the Commission that demonstrates the Applicant did speak to customers about what had happened to her. At best the evidence is that she told a customer she was resigning. In any event there is nothing in the confidentiality agreement signed by the Applicant in September 2013 that would operate to stop the Applicant talking to customers. If her comments to a customer on 4 December 2014 were of concern it was always open to Mr Stinean to pay the Applicant out her notice period so that she would not have contact with his customers.

[29] As to the matter of store cleanliness there are a number of emails and texts on this subject between the Applicant and Mr Stinean although the complete text message thread and email chain is not included so that it is difficult to know when they originated. 9 What is apparent is that a discussion around cleanliness of the shop occurred on 10 October 2014. Nothing was provided to the Commission to suggest that cleanliness was an on-going problem. Evidence was given that the Applicant was involved in developing a check list of things to do prior to closing the store and the Applicant gave evidence that there were restrictions on when cleaning could be done caused by how busy the shop was and whether the stove had cooled down to enable it to be safely cleaned around.

[30] Evidence has not be given that would enable me to conclude that the Applicant did not attend to store cleanliness.

[31] I am not satisfied, on the evidence and documents before me that there is any grounds to the Respondent complaints in respect to the Applicant not carrying out instructions, breaching confidentiality or not maintaining cleanliness of the shop. These matters do not provide a valid reason for the dismissal of the Applicant.

[32] There is, however, little doubt that there was a level of insubordination displayed by the Applicant in her dealing with Mr Stinean. As I have observed above, his language and attitude helped engender this attitude in the Applicant. It is not possible to consider the behaviour of the Applicant out of context and that context must include the tone of and language used in text and email messages from Mr Stinean.

[33] It did take some encouragement of Mr Stinean to have the Applicant adopt the roster arrangements in respect of Larissa. I am not satisfied however, in context, that this issue indicates gross misconduct or that it provides a valid reason for the dismissal of the Applicant.

Verbal or written warning

[34] On 10 October 2014 the Applicant was given a first warning ‘in reference to [the Applicant’s] personal discussion with the Franchisee, dated 09/10/2014, which was considered un-professional Behaviour.’ 10 (sic) The letter goes on to say that during the discussion it was explained to her the need to ‘follow the norms and hierarchy of the Company’ and that she was ‘informed about the expectations [of her] as an employee and a Senior member of the team.’11 (sic). The warning advised the Applicant that if she did not follow the ‘hierarchy of the Company’ she would be issued with a second warning and that, on a third warning, she risked having her employment terminated.

[35] There was little evidence given to me of a meeting on 9 October 2014. On Mr Stinean’s evidence there is nowhere in the shop to have a sit down discussion.

[36] The Applicant says (and Mr Stinean agrees) that he gave the Applicant the letter of 10 October 2014 as he went through the drive through to get his cup of coffee – that is he gave it to the Applicant (her evidence is he threw it at her) as he was in his car at the window of the drive thru.

[37] Mrs Stinean gives evidence of a verbal warning being given to the Applicant on 6 November 2014. The details of the warning were not provided in evidence. Mrs Stinean says that Mr Stinean had intended to provide the Applicant with a written warning but she convinced him a verbal warning was appropriate.

[38] It is not clear from the warnings provided to the Applicant (verbal and written) exactly how her performance was intended to improve except that she was required to follow the ‘hierarchy of the Company.’

[39] Whilst I do not believe the Applicant was advised properly what the warnings meant, the performance and/or behaviours of concern and the expectations of in the future. I do accept that she did receive a written warning and was aware that any further matters may result in her employment being terminated.

An opportunity to rectify problems

[40] As I have found that the performance issues were not clearly put to the Applicant it is difficult to determine if she was given an opportunity to rectify the issues.

[41] I note that on 27 October 2014 the Respondent sent an email to the Applicant complaining that he could see on the cameras (he had cameras in the shop connected to his iPad to enable monitoring of the shop) that the Applicant and another staff member had been sitting down. He continues in his text messages:

Hi Heather…I had a look at the cameras this morning and both you and Emma were sitting down. I can’t tolerate this! The store looks like crap and I’m loosing money cause you are sick all the time…This can’t continue like this… You have 3 weeks to sort you shit and put your life together. In 3 weeks I will evaluate your performance. If your performance is not what I am looking for, you can start looking for a job…

No point to write me a novel text message…I am waiting for a “Yes Sir” message…That would be enough 12 (sic)

[42] Again, the lack of any specific details (except that the Applicant was sitting down and a general comment that the store looked like ‘crap’) makes it difficult to know whether the Applicant was given enough information to enable her to rectify identified problems. Certainly there was no further complaint of sitting down (but I expect Mr Stinean’s complaints were broader than this).

[43] I am not satisfied the Applicant was given enough information that would enable her to rectify the problems that were, in any event, poorly identified with expectations of standards not clearly spelt out.

An opportunity to respond to the warning

[44] The conclusion of Mr Stinean’s text messages quoted above (I am waiting for a “Yes Sir” message) suggests that he was not interested in any explanation of the Applicant but rather wanted her immediate obedience to his demands of her.

[45] I am not satisfied the Applicant was given an opportunity to respond to the warnings.

An opportunity for the Applicant to have another person present

[46] On the day Mr Stinean advised the Applicant that her employment was to be terminated he called the Applicant to the back of the store for a meeting. He did not tell the Applicant that the meeting was to discuss the termination of her employment.

[47] The Applicant says that if she had known that her employment was to be terminated she would have had another person with her at the meeting.

[48] Whilst Mr Stinean did not deny the Applicant having another person present, that he never provided any advance warning of the meeting or its purpose she was not given an opportunity to have another person present.

Conclusion as to compliance with the Code

[49] The Respondent in this case is a small business. It is acknowledged that a small business owner without recourse to human resource specialist may not have the most sophisticated approach to staff management issues. Mr Stinean is not a member of an employer association although he is a member of a franchise and he did give evidence that he had access to and was required to abide by the policies (including anti-bullying) of the franchisor.

[50] Despite the Respondent being a small business, I find the approach of Mr Stinean to employee management bewildering. While he accorded his customers respect and had concern for their needs he did not flow this through to his treatment of his staff. That he is a small business owner does not excuse the lack of civility and professionalism with how he communicates with and manages his employees.

[51] I am satisfied that the Respondent did not comply with the Small Business Fair Dismissal Code.

Was the Applicant unfairly dismissed?

[52] Given non-compliance with the code it is necessary that I consider if the Applicant was unfairly dismissed in accordance with the Act.

[53] I am satisfied that the Applicant was dismissed, the dismissal was not consistent with the Code and the dismissal was not a case of genuine redundancy.

[54] To determine if she was unfairly dismissed it is therefore necessary for me to determine if the dismissal was harsh, unjust or unreasonable in accordance with s.387 of the Act.

[55] Section 387 of the Act states:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 the FWC considers relevant.

(a) A valid reason

[56] For the reasons given above I do not consider there was a valid reason for the dismissal of the Applicant.

(b) Notified of the reason

[57] I am not satisfied that the Applicant was advised of the reason for her dismissal prior to the decision being taken to terminate her employment although I do accept that she was given a written warning on 10 October 2014 and a verbal warning on 7 November 2014.

(c) an opportunity to respond

[58] The Respondent provides a transcript of the meeting at which he terminated the Applicant’s employment. 13 The Applicant did not disagree that this was an accurate transcript.

That transcript demonstrates unequivocally that the Applicant was not given an opportunity to respond to the reasons for the termination of her employment prior to the decision to terminate her employment.

(d) A support person

[59] I have found above that the Applicant was not refused a support person although she says she was not aware of the reason for the meeting. She says that had she been aware she should have had a person with her.

[60] I am satisfied that, by not providing the Applicant with any advance warning of the purpose of the meeting or its potential outcome the Respondent did by its actions deny the Applicant access to a support person.

(e) Warned of unsatisfactory performance

[61] The Applicant did receive a warning letter on 10 October 2014 and was given a further verbal warning on 7 November 2104. However, as I found above there was little detail of the specific performance issues the Respondent had with the Applicant such that the warnings gave her little opportunity to rectify any problems.

(f0 & (g) The size of the employers business

[62] Again I have dealt with these matters above. The small size of the Respondent is a relevant consideration. The Respondent had little or no access to any expertise that may have assisted him in dealing with the situation although it appears he did have access to the policies of the franchisor. No evidence was given that it had policies that deal with performance and dismissal matters.

(h) Other matters

[63] The Applicant says that, while she was store manager, her store won a $5,000 prize in a completion run by Muzz Buzz, the franchisor. She says that the prize should have been given to the store but, instead, Mr Stinean kept the prize money.

[64] Mr Stinean says the prize money was put back into the running of the business.

[65] I acknowledge that this was a matter that caused some disquiet at the store. I have nothing on the terms and conditions associated with the competition but in any event I do not see how it relates to the termination of the Applicant’s employment.

[66] It is not a matter I have considered.

Conclusion

[67] For the reasons given above, in considering if the dismissal was in compliance with the Code, and taking into account the lack of human resource expertise in the Respondent I am satisfied that the dismissal was harsh, unjust or unreasonable.

[68] I therefore find that the Applicant was unfairly dismissed.

Remedy

[69] The Applicant does not seek reinstatement. Rather she seeks eight weeks pay in compensation and $5000, being the prize money she says should have come to her from the competition.

[70] I am satisfied the reinstatement is not appropriate in these circumstances.

[71] Section 392 of the Act sets out the criteria the Commission must take into account in determining compensation. I am not satisfied that these issues have been adequately addressed by the parties to enable me to make an informed decision as to the appropriate amount of compensation. Whilst the Applicant made some brief submissions as to compensation it is not a matter addressed by the Respondent.

[72] For this reason I shall issue further directions requesting written submissions going to those matters that I must take into account under s.392 of the Act in determining compensation.

COMMISSIONER

Appearances:

J. Frandsen for the Applicant.

C. Stinean for the Respondent.

Hearing details:

2015.

Melbourne:

April 23.

 1   Exhibit R1, document 1.

 2   Exhibit R1, document 31.

 3   Ibid.

 4   Ibid.

 5   Ibid.

 6   Ibid.

 7   Exhibit A1, document 6.

 8   Exhibit R1, document 33.

 9   See exhibit R1, documents 17 and 20; exhibit A1 document 27.

 10   Exhibit A1, document 22.

 11   Ibid.

 12   Exhibit A1, document 24.

 13   Exhibit R1, document 22.

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