James Murphy v Barrett Moving Pty Ltd T/A All States Removals

[2015] FWC 8486

[2015] FWC 8486

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

James Murphy
v
Barrett Moving Pty Ltd T/A All States Removals
(U2015/10908)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 8 DECEMBER 2015

Application for relief from unfair dismissal – small business fair dismissal code not followed – employment termination unfair – no compensation awarded.

[1] On 11 August 2015 Mr Murphy lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) in relation to the termination of his employment with Barrett Moving Pty Ltd T/A All States Removals (All States Removals). This application was the subject of a determinative conference on 7 December 2015. At the conclusion of this determinative conference I advised the parties that I was not satisfied that the termination of Mr Murphy’s employment was consistent with the Small Business Fair Dismissal Code. Further, having considered the factors set out in s.387 of the FW Act I had concluded that the termination of Mr Murphy’s employment was unfair. I noted that neither Mr Murphy nor All States Removals considered reinstatement to be a feasible remedy and the evidence supported that conclusion. In terms of an order for payment of compensation in lieu of reinstatement, I noted that Mr Murphy’s evidence was consistent with that of All States Removals with respect to the remuneration he would have been likely to receive had he not been dismissed. That remuneration was significantly less than the remuneration which Mr Murphy acknowledged he had been receiving since a week after the termination of his employment. I advised the parties that I was not persuaded that any order for compensation should be made. These reasons for my decision explain the basis for my conclusions in this respect.

[2] At the outset, it is appropriate that I record a number of relevant preliminary issues.

[3] The application was the subject of a directions conference before Commissioner Wilson on 10 September 2015. The Commissioner subsequently issued directions. Amongst those directions was the following advice:

“[2] I note that neither party has indicated that grants of permission for representation will be sought. Should this position change, formal advice to this effect should be provided as soon as possible.”

[4] In a further preliminary conference on 30 November 2015 I requested that Mr Jakobsen establish whether his request for representation was going to be opposed so that he could be prepared to present an argument in support of that position. On 1 December 2015 Mr Jakobsen advised that he understood that request would be opposed and that All States Removals would represent itself in this matter.

[5] Additionally, on 30 November 2015 I confirmed that as All States Removals relied on the Small Business Fair Dismissal Code (the Code), it should attend the conference on 7 December 2015 with information which established that it was, at the time of the termination of Mr Murphy’s employment, a small business for the purposes of the FW Act.

[6] At this same 30 November 2015 conference I indicated that the material before me raised serious questions relative to the utility of the application given the compensation remedy which Mr Murphy was seeking. I suggested to the parties that this matter appeared to represent circumstances where an agreed settlement was both desirable and should be possible.

[7] I also note that, at this same 30 November 2015 conference I identified a number of substantial shortcomings in the material which had been provided to me by the parties at that time.

[8] The background to the application is that Mr Murphy was engaged by All States Removals for approximately two years. All States Removals provides removalist and heavy vehicle transportation services. Mr Murphy was employed as a removalist and a heavy vehicle driver. All States Removals provided a list of employee names as at 27 July 2015. Despite the addition of two names to that list, there was no dispute that All States Removals was, at the time of the termination of Mr Murphy’s employment, a small business in that it employed fewer than 15 employees. The only issue of an initial or jurisdictional nature went to the extent to which the Code was complied with.

[9] Mr Murphy’s position was that he was engaged on a full-time basis and that he was dismissed on 27 July 2015 because he did not follow instructions. Mr Murphy’s position was that the matter that resulted in the termination of his employment followed an instruction that he travel to Balranald in New South Wales and have a defect notice removed from a semitrailer. This required certification from a mechanic. Mr Murphy asserted that no suitable mechanic was available to remove the defect notice and that he was instructed to drive to the next town, Hay, to find another mechanic. Mr Murphy referred his doubts about the legality of this request to the police and was advised that the vehicle should not be driven to Hay. As a result he waited and had the defect removed on the following day. He then returned to Adelaide on 27 July 2015 and his employment was terminated that day. Mr Murphy asserted that he could not legally have driven the vehicle from Balranald to Hay and that the instruction to do so was simply not reasonable irrespective of whether the Code or the provisions of s.387 were applied to his circumstances.

[10] Mr Murphy did not seek reinstatement and sought compensation for lost wages. He advised that he has obtained other employment the week after the termination of his employment with All States Removals but this is on a casual basis.

[11] The All States Removals’ position was that Mr Murphy had been given a range of informal directions and warnings of a formal nature prior to the termination of his employment. All States Removals assert that the Code was appropriately applied in these circumstances and that, irrespective of this, the termination of Mr Murphy’s employment was neither harsh, unjust nor unreasonable. All States Removals asserted that the Balranald incident was a contributor to its decision to terminate Mr Murphy’s employment but that the primary reason for this decision was its conclusion that Mr Murphy had been responsible for damage to a client’s antique furniture item some time earlier and that he had indicated to another employee that he “didn’t give a fuck” about that damage. All States Removals asserted that this reflected its general dissatisfaction with Mr Murphy’s conduct, his lack of respect, his poor performance and his failure to improve.

The Evidence

[12] Whilst I considered all of the material before me in this matter, I have briefly summarised the witness evidence in the following terms.

[13] Mr Murphy’s evidence went to his employment history with All States Removals. He detailed the circumstances under which he refused to move a semi-trailer from Balranald until the defect notice had been removed by a mechanic. His evidence went to the discussions he had with Mr Barrett of All States Removals on 27 July 2015 when Mr Barrett advised him that he was dismissed in the following terms:

“…. all of this was because you wouldn’t drive to Hay, So we won’t be sending you on any trips again, so it’s not viable to keep you. We have to let you go and we would like you to leave now.” 1

[14] Mr Murphy disputed the various allegations of poor performance relied on by All States Removals.

[15] Mr Murphy’s evidence addressed the employment which he found within a week after the termination of his employment with All States Removals. His evidence was that, whilst he was engaged as a casual employee he had generally worked on a full-time basis and earned between $1200 and $1300 per week.

[16] Ms Browning is the Administration Manager with All States Removals. Her evidence went to her understanding of performance concerns relative to Mr Murphy since she commenced in November 2014. Her evidence was that she met with Mr Murphy on 18 June 2015 and discussed some 12 concerns relative to his work performance. These concerns related to allegations that he had not undertaken tasks as requested, taken cash from customer payments without approval and inaccurately recorded his travel so as to result in payments to him to which he was not entitled. Ms Browning participated in a further discussion with Mr Murphy on 14 July 2015. Her evidence was that this discussion included Mr Barrett and Mr Patterson. Her evidence was that this discussion occurred as a result of a customer concern over Mr Murphy’s behaviour. Ms Browning’s evidence was that the interstate trip which Mr Murphy commenced to undertake on 19 July 2015 was an endeavour to see if his performance had improved. Ms Browning’s evidence went to the extent of overpayments made to Mr Murphy on the basis of his logbook entries. Ms Browning’s evidence also went to the extent to which, on two occasions in mid-2015, she advised Mr Murphy that he would not be given further interstate driving work and would be restricted to driving work within South Australia. That South Australian driving work was covered by an hourly rate of pay as distinct from the combination of a per kilometre rate with loading and unloading payments which applied for interstate work.

[17] Approximately one week after the termination of his employment, Ms Browning provided Mr Murphy with a retrospectively dated letter confirming his dismissal.

[18] Mr Barrett is the General Manager of All States Removals. His evidence went to the various concerns which he had with Mr Murphy’s work performance and attitude. Mr Barrett advised that he had given Mr Murphy an interstate trip in mid-July on very much a trial basis. Mr Barrett confirmed that Mr Murphy’s actions in refusing to move the semi-trailer from Balranald was a factor in his decision to terminate his employment. More significantly he explained that whilst Mr Murphy was undertaking a further trial of interstate driving duties in mid-July 2015, he concluded that Mr Murphy had damaged a client’s goods at an earlier time and understood that Mr Murphy advised another employee that he “didn’t give a fuck” about that damage. Mr Barrett regarded this as the final straw in a series of concerns relating to Mr Murphy’s performance. He also confirmed that when he raised the Balranald trip with Mr Murphy on 27 July 2015, Mr Murphy sneered at him, prompting him to say that he would not give Mr Murphy further interstate trips and that there was no point in him continuing as an employee. Mr Barrett advised that Mr Murphy referred to him as a “real piece of work” and subsequently took steps to initiate unfounded complaints to both the union and to the South Australian police.

Findings

[19] I am satisfied that All States Removals was, at the time of the termination of Mr Murphy’s employment, a small business and that consequently the Code has application.

[20] I have concluded that All States Removals did not regard Mr Murphy as a good performing employee. Conclusive evidence to support the various allegations against him and to confirm that these were impartially investigated was not provided to me. I am satisfied that concerns raised with him extended to his accident record, his work performance including his interaction with customers, and the manner of his time recording. Mr Barrett’s evidence was to the effect that he had considered terminating Mr Murphy’s employment and that the trip to Balranald commencing on 19 July 2015 was very much a trial about whether Mr Murphy would be retained as an employee.

[21] I have accepted that Mr Murphy’s evidence that the semi-trailer that he was required to move from Balranald was subject to a defect notice and this could only be lifted by an appropriately qualified mechanic. Further, that Mr Murphy was not able to access the mechanic who had been arranged to attend to this issue in Balranald on that day. I am satisfied that, notwithstanding this, All States Removals instructed Mr Murphy to drive the truck to Hay so as to access a mechanic there. Given that the semi-trailer was subject to a defect notice, I consider that Mr Murphy was entitled to have a legitimate concern over whether or not he was able to comply with this instruction. Consequently, I am satisfied that Mr Murphy acted reasonably in obtaining advice from the police at Balranald to the effect that the semi-trailer should not be driven to Hay. In light of this advice, All States Removals’ continuing instruction that Mr Murphy drive the truck to Hay was unreasonable.

[22] I have concluded that the evidence establishes that, on his return to Adelaide on 27 July 2015, Mr Murphy was called into the office by Mr Barrett and was advised that he would not be sent on any further trips, that it was not viable to retain him as an employee and that he was dismissed. Mr Murphy was paid two weeks’ pay in lieu of notice.

[23] The Code states:

“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.”

[24] There is no suggestion that All States Removals completed the Code Checklist so as to facilitate consideration of compliance with the Code.

[25] I do not consider the termination of Mr Murphy’s employment should be characterised as a summary dismissal as he was paid two weeks’ pay in lieu of notice. Notwithstanding this, even if I regarded that dismissal as a summary dismissal I do not consider that Mr Murphy’s conduct in refusing to drive the semi-trailer with the current defect notice until such time as that notice was lifted by an appropriately qualified mechanic, could be regarded as a reasonable ground upon which All States Removals could conclude justified immediate dismissal. Once Mr Murphy informed Mr Barrett of the advice he had been given by the police, there was no reasonable basis to conclude that his refusal to drive the semi-trailer was misconduct. Furthermore, I am not satisfied that there was a reasonable basis upon which to conclude that Mr Murphy damaged goods some weeks earlier and that he expressed a clear lack of care relative to those goods. The evidence does not enable any conclusion of this nature to be drawn.

[26] I consider that Mr Murphy’s termination should be more properly assessed against the “Other Dismissal” considerations inherent in the Code. In this respect I do not think that Mr Murphy’s refusal to drive the truck following the advice provided to him, or the allegation that he damaged goods and expressed a lack of care about them, represented valid reasons for the termination of his employment or that there was a reasonable bases for those conclusions. Whilst I am satisfied that Mr Murphy had been warned that his employment was at risk, I am not satisfied that the termination of his employment related to the matters raised with him in the various warning discussions.

[27] In terms of the procedure followed to effect the termination of Mr Murphy’s employment, the manner in which this dismissal occurred did not give Mr Murphy the opportunity to have anyone with him to assist him. Further, I am not satisfied that the letter confirming Mr Murphy’s dismissal properly reflected the discussion which resulted in his dismissal on 27 July 2015.

[28] Consequently, I am not satisfied that the termination of Mr Murphy’s employment was consistent with the Code. Section 385 of the FW Act establishes that, had it been the case that the termination of Mr Murphy’s employment was consistent with the Code, that dismissal could not then be considered unfair. However, in these circumstances it is appropriate then to consider whether that dismissal was unfair consistent with the factors set out in s.387. This section 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.”

[29] I have considered each of these factors.

Valid Reason

[30] Notwithstanding the subsequent changes to the legislation I have adopted the position detailed in Selvachandran v Peterson Plastics Pty Ltd². I do not consider that Mr Murphy’s refusal to move the semi-trailer which was the subject of a defect notice from Balranald to Hay represented a valid reason for the termination of his employment. In this respect I have already set out my conclusion that Mr Murphy’s refusal to do so reflected a reasonable position given the advice he had received from the police. This means that the demand that he act contrary to that advice was not a reasonable demand. Furthermore, the allegation that Mr Murphy had damaged a customer’s goods some weeks earlier and had expressed a lack of care about this, appears to be based simply on circumstantial evidence which was not tested by All States Removals and was not an allegation which was substantiated before me.

[31] All States Removals asserts that, subsequent to the termination of Mr Murphy’s employment it became aware of instances where his mileage claims for payment purposes on interstate trips, had been misrepresented such that he received significant overpayments which could be regarded as fraudulent and hence represent a valid reason for employment termination. However, the evidence before me simply does not establish fraudulent claims of that nature or character.

Notification of the reason

[32] I am not satisfied that Mr Murphy was comprehensively advised of the reasons for the termination of his employment.

Opportunity to respond

[33] I have concluded that Mr Murphy was not given an opportunity to respond to the proposed termination of his employment. That termination of employment decision was made by Mr Barrett prior to the discussions that he had with Mr Murphy on 27 July 2015.

Unreasonable refusal to allow a support person

[34] All States Removals did not refuse to allow Mr Murphy to have a support person present at the interview that resulted in the termination of his employment. However, the manner in which that interview was arranged meant that Mr Murphy simply did not have an opportunity to request or arrange for such a support person.

Warnings relative to unsatisfactory performance

[35] I am satisfied that Mr Murphy was given various warnings, which were primarily of an informal and verbal character about numerous aspects of his work performance. However, I do not consider that he was given a warning relative to the issues that ultimately culminated in the termination of his employment.

Size of the employer’s enterprise - likely impact on procedures

[36] All States Removals is a small business and I have concluded that it was unlikely to have procedures relating to employment termination in circumstances such as this. This is a factor which I consider mitigates in favour of regarding the termination of Mr Murphy’s employment as fair but is not determinative of that issue.

Size of the employer’s enterprise - absence of dedicated human resource management specialists

[37] All States Removals does not have access to dedicated human resource management specialists. The processes it followed reflected the absence of that expertise.

Other matters considered relevant

[38] I have noted that the relationship between Mr Murphy and Mr Barrett was severely strained and that there is no dispute that these two men were not generally on speaking terms. Notwithstanding this, I do not consider this to be a factor relevant to the fairness of the employment termination.

Conclusion - harsh, unjust or unreasonable.

[39] I have concluded that the termination of Mr Murphy’s employment was harsh in that his conduct did not warrant termination of employment. It was unjust in that his refusal to drive the semi-trailer from Balranald to Hay was not misconduct. It was unreasonable in that the termination decision was heavily influenced by inference rather than having a factual basis. Consequently, the termination of Mr Murphy’s employment was unfair.

Remedy

[40] Neither Mr Murphy nor All States Removals proposed reinstatement to me as a viable remedy. Further, it is absolutely clear from the evidence that reinstatement would not be viable in these circumstances.

[41] Mr Murphy sought compensation to take into account the extent to which his new job was of a casual nature and involved lower income than that which he used to achieve when undertaking interstate driving work.

[42] Section 392 sets out the factors to which I must have regard in considering any order for compensation. I have considered each of these factors.

[43] There is no evidence before me relating to the viability of the employer’s enterprise. Mr Murphy had been employed for some two years. Whilst that is not an extraordinarily short time it is not a long duration of employment that favours a significant grant of compensation.

[44] I have concluded that, had Mr Murphy not been dismissed on 27 July 2015 his employment would not have lasted for more than three months. I have reached this conclusion because of the significant concerns which All States Removals had with respect to his work performance and the evidence about his poor relationship with Mr Barrett. Furthermore, I think it highly unlikely that Mr Murphy would have been allocated interstate driving duties after his last trip to New South Wales. The evidence of Mr Barrett and Ms Browning confirms that further interstate work would be highly unlikely and Mr Murphy’s own evidence was that it was not likely that he would have been asked to do interstate work after Balranald. 3 Mr Murphy’s pay whilst undertaking interstate driving work was significantly higher than was the case when he was engaged on local work. As a consequence Mr Murphy confirmed that the intrastate award rate applicable to him meant that he would have earned income in the order of $731.25 per week had he continued to work for that estimated three months.

[45] Mr Murphy was paid two weeks’ pay in lieu of notice. He obtained alternative employment less than a week after his dismissal. Whilst that alternative employment is of a casual nature, Mr Murphy’s evidence was that he had worked all but one or two days since commencing on 3 August 2015. His evidence was that he had earned between $1200 and $1300 each week. This is obviously substantially in excess of the income that he would have been likely to have earned had he remained at All States Removals.

[46] Whilst I have considered the criteria set out in s.392(2)(f) and (g) I do not consider that these factors change the reality that Mr Murphy is earning substantially more at the present time than he would have earned over the same period had he remained an employee of All States Removals. Accordingly, I do not consider that any amount of compensation in lieu of reinstatement is appropriate in these circumstances. I note that Mr Murphy appears to have been advised of the possibility of this conclusion substantially before the determinative conference in this matter commenced.

[47] An Order (PR574840) reflecting this decision will be issued.

Appearances:

E Lawrie representing the Applicant.

G Barrett for the Respondent.

Hearing (Determinative Conference) details:

2015.

Adelaide:

December 7.

 1   Exhibit A2, para 24

2 (1995) 62 IR 371 at 373

 3   Transcript sound recording, 2:22 pm, 7 December 2015

Printed by authority of the Commonwealth Government Printer

<Price code C, PR574839>