Johannes Machiel Erasmus v GJ Consulting Pty Ltd T/A A&K Lievesley Electrical & Solar

[2018] FWC 6767

[2018] FWC 6767

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Johannes Machiel Erasmus
v
GJ Consulting Pty Ltd T/A A&K Lievesley Electrical & Solar
(U2018/4933)

COMMISSIONER SIMPSON BRISBANE, 1 NOVEMBER 2018

Application for an unfair dismissal remedy.

Application for relief from unfair dismissal – Allegations the Applicant engaged in misconduct involving sexual harassment – Valid reason for dismissal – Procedural flaws and failure to pay notice – manner of dismissal harsh and therefore unfair – compensation equivalent to period of notice ordered.

[1] This matter concerns an application under s.394 of the Fair Work Act 2009 (the Act) by Mr Johannes Machiel Erasmus who alleges that the termination of his employment with GJ Consulting Pty Ltd (GJ Consulting) was unfair.

[2] Mr Erasmus commenced employment with GJ Consulting as an electrician on 9 January 2017 and worked on a full time basis for 38 hours per week. 1 It was not in dispute that the Respondent had a total of five employees at the time of Mr Erasmus’ dismissal, and was therefore a small business employer. Mr Erasmus satisfied the minimum employment period of one year required to bring the application, having worked for GJ Consulting for approximately 16 months.

[3] A meeting occurred at approximately 10am on 10 May 2018 attended by Mr Erasmus, and by Mr Stewart and Ms Monteith on behalf of the business, during which Mr Erasmus was told he was to be terminated. A factual dispute exists regarding what was said at the meeting. It appears not to be in dispute that Mr Erasmus was told he would be given 1 weeks’ notice. Later that afternoon Mr Erasmus sent a text message to Mr Stewart stating he was entitled to two weeks’ notice. What followed was a series of text messages between Mr Stewart and Mr Erasmus that concluded with Mr Erasmus asking he be given his written notice and Mr Stewart advising it will be ready when Mr Erasmus dropped off the van. It seemed apparent neither Mr Stewart nor Mr Erasmus understood Mr Erasmus would be performing any further work for the Respondent from this point.

[4] On 11 May 2018, Mr Erasmus was issued a letter of termination of employment (the termination letter). In the termination letter, GJ Consulting refers to four incidents of misconduct which amounted to what it said were breaches of three sections of Mr Erasmus’ employment contract. 2 The termination letter says Mr Erasmus was to be terminated “as of Thursday 17 May 2018 due to inappropriate actions despite several warnings and negligence in looking after and maintaining the vehicle.”

[5] The matter was the subject of conciliation on 7 June 2018 and a subsequent dispute arose as to whether or not a settlement agreement had been reached between the parties. That dispute was resolved by a decision of Commissioner McKinnon issued on 11 July 2018 3 where it was determined that the matter could proceed to arbitration.

[6] In email correspondence to the Commission of 25 September 2018 GJ Consulting indicated to the FWC that it was unable to settle the matter because it would not absolve Mr Erasmus from legal action because it claimed it was facing potential legal action because of his actions during his employment.

[7] In terminating Mr Erasmus’ employment, GJ Consulting considered that the incidents of misconduct amounted to “conduct causing serious risk to a person’s health or safety; or the reputation, viability or profitability of the employer’s business.” 4

[8] Mr Erasmus claims that his dismissal was unfair as he disputes that the allegations of misconduct made against him by GJ Consulting were the reason for his dismissal. Mr Erasmus relies on the fact that he was told he “was being made redundant [due] to financial problems” within GJ Consulting. Mr Erasmus claims that when he questioned the amount of redundancy pay he was to receive, he was dismissed for misconduct. 5

[9] Mr Erasmus relies on the fact that the alleged instances of misconduct occurred in September and December 2017 and were dealt with at the time. Mr Erasmus maintains he worked for a further six months for GJ Consulting before being dismissed.

[10] Mr Erasmus submitted his notice and entitlements have still not been paid. Having had the opportunity to explore this issue during the determinative conference it appeared that Mr Erasmus was paid for 33 hours annual leave on termination and not paid notice pay. Mr Stewart initially suggested that this was connected to Mr Erasmus not working in the notice period however it seems apparent from the evidence he was not required for work during the notice period given Mr Stewart sent a text to Mr Erasmus at 6.50pm on 10 May 2018 directing him to “Please drop off the van at the office tomorrow. I expect that you will do the right thing and hand in the tools and material as well.”

[11] Mr Erasmus also claimed he is owed further outstanding leave entitlements. I explained to the parties the Commission did not have power to deal with the underpayment claims as part of the unfair dismissal application.

[12] Following applications being filed by Mr Erasmus for orders that Steven Dale, Jessica Bendle and Ilona Monteith attend the hearing, orders were issued to that effect. A further order was sought by Mr Erasmus that the Respondent produce emails sent between Mr Stewart and Sarah Guerrera. An order to that effect was also issued.

[13] Prior to the hearing, email correspondence was sent to my chambers from Mr Stewart on behalf of the respondent advising that the Respondent had ceased to trade, however this was occurring on a voluntary basis. The parties were advised that the hearing would proceed, however the date of hearing was postponed because just prior to the initial hearing date the Commission was advised that the orders issued by the Commission had not been served and the persons who were the subject of the orders would not be attending.

[14] New orders were issued with the amended hearing date. Subsequently Mr Dale and Ms Bendle advised that they would be interstate at the time of the hearing however indicated they would be able to provide evidence by telephone.

[15] Ms Monteith sent correspondence seeking to be excused from giving evidence on the basis that her daughter had an appointment with a surgeon following earlier surgery, and would be required to undergo a number of medical procedures on the day of the hearing. Ms Monteith also said she was related to and resides with Mr Stewart, and having read his statement indicated she agreed with it.

[16] On 9 October 2018, email correspondence was sent from my chambers to parties and the persons who were the subject of the orders that the Commission was minded to grant permission for those persons to give evidence by telephone, and to advise chambers if there was any objection to this course. The only response received was from Ms Monteith who indicated there was a possibility she may not be available by telephone given the location of the medical procedures her daughter would be undertaking on the day of the hearing.

[17] There was no dispute that whilst the Respondent was not trading it was still a registered company. At the commencement of the matter, after seeking the views of the parties I decided to conduct the matter as a determinative conference. Mr Erasmus and Mr Stewart gave evidence in person, and Mr Dale, Ms Bendle and Ms Monteith gave evidence by telephone.

Small Business Employer

[18] GJ Consulting raised a jurisdictional objection on the basis Mr Erasmus’ dismissal complied with the Small Business Fair Dismissal Code (The Code).

[19] GJ Consulting did not provide any comprehensive submissions on how Mr Erasmus’ dismissal complied with the Code. It submitted that “The Office manager contacted the Fair Work Australia and the ETU to seek advice. We then followed the procedure. A meeting was called with Johan Erasmus.” 6

[20] The Code provides that 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. On the facts of the case it is not immediately clear whether this was a case of summary dismissal or not, as GJ Consulting initially gave Mr Erasmus the option to work for a further week during the meeting on the morning of 10 May 2018, until he found alternative employment, however by the end of the same day following the exchange of emails one of the last emails Mr Stewart sent directed Mr Erasmus to return his vehicle and tools.

[21] However this needs to also be viewed in the context of the employer’s termination letter of the following day saying his termination did not have effect until a week later. It is apparent Mr Erasmus was entitled to be paid two weeks’ notice however was paid just under one weeks wages. It was Mr Stewart’s evidence that this was an error because, as I understood his evidence, he believed that Mr Erasmus was being paid annual leave for the period up until Thursday 17 May 2018 which operated as notice. There was no suggestion that Mr Erasmus had applied for annual leave.

[22] On the evidence I am inclined to accept that the effect of the evidence is that this is not a case of a summary dismissal, however Mr Erasmus has not been paid for the notice period he was entitled to be paid. On that basis the part of the Code pertaining to summary dismissal does not apply in this case.

[23] If I am wrong in that view than in any event I have been satisfied on the evidence that it would not have been fair for GJ Consulting to dismiss Mr Erasmus without notice or warning because the employer believed that the employees conduct was sufficiently serious to justify immediate dismissal. I will deal with the specifics of the matters in greater detail below, but at this point it is sufficient to say I have not been satisfied that the issues taken either separately or together were of a nature that could ground a belief on reasonable grounds to justify immediate dismissal.

[24] The conduct in connection with the sexual harassment allegations occurred in September and December 2017 and the employer was aware of the nature of the issues at the relevant times. This is some six months before the decision to terminate Mr Erasmus. I am also not satisfied the failure to comply with the terms of the employment contract pertaining to the vehicle would ground a reasonable belief that it justified immediate dismissal. In relation to the issue of the conduct of Mr Erasmus having a negative financial impact on the business, the evidence is vague on this point. Whilst Mr Erasmus’ conduct was referred to in the instances where clients either did engage GJ Consulting or refused to pay a bill, it is also apparent the clients in each case were also unhappy with GJ Consulting for reasons other than Mr Erasmus’ conduct.

[25] For other forms of dismissal, the Code provides as follows:

“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.”

[26] On close scrutiny of the evidence it is sufficiently clear that Mr Erasmus was not given a reason why he was at risk of being dismissed prior to his dismissal. The evidence of the discussions following the two complaints in connection with Amazing Smiles and the later complaint from Ms Guerrera both resulted in Mr Erasmus being counselled to watch what he said in front of clients, but he was not warned he was at risk of dismissal. On that basis it cannot be said that GJ Consulting had complied with The Small Business Fair Dismissal Code. The question then must turn to whether the dismissal was fair in accordance with the matters in s.387 of the Act.

CONSIDERATION

[27] On 11 May 2018, GJ Consulting provided a termination letter to Mr Erasmus that stated:

“It is with regret that we have been forced to terminate your employment with A&K Electrical as of Thursday 17th May 2018 due to inappropriate actions despite several warnings and negligence in looking after and maintaining the Company Vehicle. Under the terms of your employment contract your termination is subject to breaches of section 19, 23 and 24. As a result of serious breaches in your contract A&K Electrical can terminate your employment with immediate effect and reserve their right to do so.

In terms of section 23 of your employment contract, Conduct causing serious risk to a person’s health or safety; or the reputation, viability or profitability of the employer’s business.”

[28] The termination letter then went on to describe the four “incidents” that lead to the decision to terminate Mr Erasmus’ employment.

The first incident

[29] In the termination letter GJ Consulting provided that the first incident of misconduct occurred at Amazing Smiles at the Wynnum Dental Surgery, whereby an official complaint was made by the client on 6 September 2017. The letter states this incident was raised with Mr Erasmus “during a meeting after the incident.”

[30] GJ consulting submitted Mr Erasmus engaged in misconduct involving sexual harassment towards the regional manager at Amazing Smiles. GJ Consulting did not provide particulars of the alleged sexual harassment in its submissions apart from stating that Mr Erasmus “made sexual remarks towards Julie the regional manager.” 7 An email was sent from Mr Terebessy of Amazing Smiles Dental to Mr Stewart on 6 September 2017 as follows;

“Hi Gary,

Your quote was questioned due to the quote below. Obviously it is a massive difference and hence your work was halted.

Secondly, there were also complaints that some of your guys were inappropriate in their language with our regional manager (Julie), the feedback is not the greatest.

Regards,

Kris”

[31] Mr Erasmus claims that in September 2017, while on-site at Amazing Smiles Dental, he made a joke about opening a brothel in an upstairs loft above the clinic. Mr Erasmus claims that the joke was between himself, Julie (the regional manager who apparently made a complaint which was the basis for what is said in the email of 6 September set out above, and from Mr Terebessy in the email of 7 September set out below), and Steven Dale (an electrical apprentice). Mr Erasmus stated that at the time “all three… laughed about it.” Mr Erasmus further claims that upon returning to the GJ Consulting office, he told the joke to everyone at the office and everyone laughed. Mr Erasmus further maintains Mr Stewart, was aware of the joke at that time.

[32] Mr Erasmus further claims that the joke only became an issue after amounts quoted and invoiced by GJ Consulting were questioned by Amazing Smiles Dental. Mr Erasmus states that Amazing Smiles Dental only raised concerns of sexual harassment after the difference between amounts quoted and invoiced were explained.

[33] Mr Erasmus states that a meeting took place between himself and Mr Stewart regarding this first incident. Mr Erasmus claims he was shocked about this meeting and that Mr Stewart said at the meeting that he knew about the joke. Mr Erasmus claims Mr Stewart said that he should watch what he said when on site and that he could not go back to any Amazing Smiles jobs. Mr Erasmus maintains no verbal or written warning was given to him regarding the incident and that no charges were laid.

[34] It appeared to be common ground between the parties that the date on which the incident occurred was a couple of days before the 6 September email from Kris Terebessy of Amazing Smiles raising the complaint. This means the incident probably occurred on Monday 4 September.

[35] Mr Stewart said in his evidence that a couple of weeks before this incident another complaint had been received about Mr Erasmus’ conduct involving Julie, arising out of work on the Northside of Brisbane at Bray Park. Mr Stewart said that after receiving the email complaint on 6 September he spoke to Mr Erasmus and warned him about his behaviour. Mr Erasmus accepted that after the email he was reprimanded by his employer, being told to watch what he said, and that he was called off that job. Mr Erasmus refuted the claim he had any involvement in an alleged incident on the Northside of Brisbane.

[36] Mr Stewart said that Mr Terebessy from Amazing Smiles told him not to send Mr Erasmus back to the Wynnum site. A further email was sent from Mr Terebessy to Mr Stewart on 7 September 2017 which read as follows:

“Hi Gary,

Thanks.

The quotation you sent made sense. It seems that they have taken short cuts and used old equipment. I requested a full refurbishment of the wiring. You can proceed with the upgrade as from next week provided the Julie issue is managed correctly. Your guy is not to attend this site. I will also need the go ahead from Jennifer.”

[37] The reference to the “Julie issue” referred to in the email from Mr Terebessy was a reference to the complaint about Mr Erasmus. Mr Stewart gave evidence that a contract with this client, at what he called the Wembley Road site, was subsequently lost because of the conduct of Mr Erasmus.

[38] Mr Dale who was present at the Wynnum site on the day that gave rise to the complaint gave evidence to the effect that he did not believe the comments of Mr Erasmus appeared to cause offence at the time and were intended to be humorous. Ms Bendle could not provide much evidence on this matter except to say Julie was not happy and she knew it was a sexual harassment complaint concerning Mr Erasmus.

[39] Whilst there is no evidence from the manager of Amazing Smiles Mr Erasmus accepted that he had made what he regarded as a joke about part of the business being turned into a brothel. It would seem reasonable to draw the inference from the evidence that the manager of the GJ Consulting client was sufficiently offended and concerned by Mr Erasmus’ conduct to escalate the matter as a complaint. It would also appear that this incident at least contributed to a deterioration in the business relationship between GJ Consulting and its client and probably also contributed to a loss of business from this client, although it is also evident in the email from Mr Terebessy there were other issues between GJ Consulting and its client beside the behaviour of Mr Erasmus.

The second incident

[40] GJ Consulting submitted that three months later in December 2017 Mr Erasmus was involved in another incident involving sexual harassment. It submitted Mr Erasmus was the lead electrician on site for a client, Ms Sarah Guerrera. GJ Consulting submitted it received information claiming Mr Erasmus made comments of a sexual nature towards Ms Guerrera’s 14 year old daughter. Mr Erasmus claimed in his evidence that the girl involved in the incident was 15 and he believed she was older at the relevant time. GJ Consulting submitted the client’s daughter was not happy about what Mr Erasmus had said to her and told her mother about the incident. It submitted the office was contacted straight away by Sarah Guerrera and Mr Erasmus was removed from the site.

[41] GJ Consulting submitted that no specific details of the incident were given at the time, and that it had tried to investigate the incident but Ms Sarah Guerrera refused to take Mr Stewart’s calls.

[42] GJ Consulting says that the incident was only finalised in May 2018 (and not around the time of the incident itself) when the employer attempted to obtain final payment of the invoice for work completed by Mr Erasmus. GJ Consulting claims that it was only in May that details of the incident were revealed by Ms Guerrera.

[43] Mr Erasmus states that in December 2017, he was on site working for a client at the private address of Ms Sarah Guerrera. The work was in the nature of renovations on a private home. Mr Erasmus admits he made a comment to Ms Guerrera’s daughter, saying that “it is nice to work at a place when there is a pretty girl around.” 8Mr Erasmus gave evidence to the effect that it was a school day and as the girl was at home he assumed she was not of school age, and she had asked him a question about whether it was hard to work all day, and his response was in that context.

[44] Mr Erasmus states that the next day, upon returning to complete the work he had started, he received a call from Ms Jess Bendle (Office Administrator at GJ Consulting) advising him Ms Guerrera had called the office and was very angry about his comment. Mr Erasmus claims Ms Guerrera later came to look at the progress of his work on site and then she started raising her voice (about the comment he made to her daughter), at which time he apologised. In his oral evidence he said Ms Guerrera swore and threatened him, and it was only at this time that he learned the age of Ms Guerrera’s daughter. Mr Erasmus repeated in his oral evidence that Ms Guerrera did not want him to get dismissed or to prosecute him but that she did not want him at the site.

[45] Mr Erasmus states he heard Ms Guerrera tell both Ms Bendle and Mr Stewart over the phone that she did not want Mr Erasmus to lose his work over the comment, and that she also stated the same to him after his apology. Mr Erasmus claims his comment only became an issue when Ms Guerrera was invoiced for the work completed, relying on an email sent to Mr Stewart on 21 March 2018.

[46] Mr Erasmus states he was called to the office for a meeting with Mr Stewart and Ms Ilona Monteith, the office and finance manager a day after the incident. Mr Erasmus claims he said he felt bad about what had happened and explained he had already apologised to Ms Guerrera. Mr Erasmus claims Mr Stewart spoke to him about the context of what Mr Erasmus said on site, and told stories about a similar incident that happened to him. Mr Erasmus maintains in his written material that again no verbal or written warning was given to him regarding the incident and that no police charges were laid, however in his oral evidence he indicated he was given a verbal warning to watch what he said in front of clients.

[47] Mr Stewart said in his oral evidence that he was not notified about the incident when it happened but was told about it by Ms Monteith later that day. Mr Stewart said he understood Ms Bendle had phoned Mr Erasmus and told him not to go to the site, however Ms Bendle’s evidence was that after receiving an angry call from Ms Guerrera she advised Mr Stewart and understood he had told Mr Erasmus not to go to the site. On the basis of this conflicting evidence it would appear more likely than not that Mr Erasmus was not told before he returned to the site the following day not to return to the site.

[48] Mr Stewart said Ms Guerrera refused to speak to him, however the installation work at her private residence was subsequently completed without the involvement of Mr Erasmus and a subsequent dispute arose with Ms Guerrera who sent the following email to the Respondent on 21 March 2018.

“I have paid a FINAL payment of $1000. Your staff member sexually harassed our daughter and the idiot manager said it’s something that needed to be taken up with him, not the company. It does not work like that in our country. You have also put a light in the main bathroom that is too small for the fitting. You will not be getting one more cent from me. You can try to take this further and I will be happy to play the voice message from the new owner. In future you need to be honest and up front with Tony’s old clients saying that there is new ownership of the business. I will be sure never to recommend you to anybody EVER. You play foul adding hundreds of dollars for admin fees. KARMA that is all….DO NOT EVER CONTACT ME AGAIN.”

Damage to company vehicle

[49] GJ Consulting also cites as a reason for dismissal the fact Mr Erasmus allowed his wife to drive the company vehicle, in breach of Mr Erasmus’ employment contract.

[50] GJ Consulting also claims Mr Erasmus failed to keep his company vehicle in a safe condition or keep the company vehicle in a safe and secure area when parked.

[51] A copy of Mr Erasmus’ employment contract formed part of the evidence. Mr Erasmus accepted he was provided the contract early in his employment and he accepted it was his signature on the contract, and that he had initialled each page of the contract. At clause 24 of the contract it is stated explicitly that a driver of a company vehicle must be an employee of the company, and persons who are not employees of the company are not permitted to drive company vehicles. Further, at annexure A of the contract at point 26 it states that personal use of motor vehicles is not allowed, they are to be in good order and a tidy condition, keep car / van clean and regularly washed (not at company expense) weekly.

[52] GJ Consulting asserts there was severe damage to the roof of Mr Erasmus’ vehicle in the form of rust and holes, and claims an inspection of the vehicle showed it had not been washed or cleaned during Mr Erasmus’ use of the vehicle. Mr Erasmus did not respond in any detail to these issues in his written material. In his oral evidence he said he had asked his wife to go to the shop in February 2018 using the company vehicle. Initially in his oral evidence he said he raised the issue with Mr Stewart to clarify what the arrangements for driving the vehicle were.

[53] Mr Stewart evidence was that the vehicle had been making a noise in connection with the wheel bearings. Mr Stewart said contrary to what Mr Erasmus had claimed, he became aware that Mr Erasmus’ wife had been driving the car because in the course of a discussion with Mr Erasmus, Mr Erasmus said to him that the car is still making a rumbling noise and every time his wife drove the car she complained about it. When this version of the conversation was put to Mr Erasmus he did not dispute it, and appeared to retreat from his earlier claim that he had directly raised the issue of his wife’s entitlement to drive the car with Mr Stewart for the purpose of clarifying the issue.

[54] The oral evidence appeared to be that Mr Erasmus had use of the company vehicle from approximately February or March 2017 until May 2018. Mr Stewart said the vehicle was a 2014 model Fiat van, making it approximately four years old. Mr Stewart said he purchased the van with a number of other vehicles when he purchased the business in the later part of 2016 and all of the vehicles underwent vehicle inspections at the time and were past as road worthy. Mr Stewart said the vehicle had 4 rust holes in the roof exposing the vehicle to the elements, and the two other vans of the same make and model did not have this issue. The respondent provided photographs of the van indicating the extent of the rust and generally dirty state of the vehicle.

Further alleged complaint of Bendle to Stewart

[55] Near the conclusion of his evidence at the determinative conference Mr Stewart raised an issue not previously raised in the material. He claimed that on the day of 10 May 2018, which was the day Mr Erasmus was advised he was to be dismissed, Ms Bendle had raised with him concerns in the manner of allegations of inappropriate sexual comments made by Mr Erasmus toward her, and that if Mr Stewart did not sort it out that she was “going to walk”.

[56] Mr Stewart asked Ms Bendle when she was giving her evidence if she had ever complained to him about Mr Erasmus. Ms Bendle responded, not formally but that she may have mentioned to Mr Stewart that she was not comfortable. Her evidence was to the effect that sometimes Mr Erasmus’ sexual innuendo went a bit too far. Although her evidence appeared to support the proposition that she had raised concerns with Mr Stewart about Mr Erasmus’ conduct toward her, she did not support his evidence that she had given him some kind of ultimatum about Mr Erasmus.

Events of 10 May 2018

[57] Mr Erasmus stated that the initial verbal reasons that he was given by Mr Stewart was that the company is in financial trouble and they had to let him go and make his position redundant. Mr Erasmus submitted he was advised by Mr Gary Stewart, the director of GJ Consulting, that Mr Erasmus was to receive one weeks’ notice and all of his outstanding entitlements. Mr Erasmus submitted that later that afternoon after he queried the amount of notice and referred to his employment contract where it states he should receive two weeks’ notice Mr Stewart changed the reasons for his dismissal to misconduct.

[58] In his oral evidence Mr Erasmus maintained the position he put in his written material that at the 10am meeting on 10 May he was told he was being let go, that he was being given one weeks’ notice and could either work for that week or leave now if he wished. He maintained the reason given was confined to the financial difficulties of the Respondent in connection with clients not paying bills and that the other matters concerning complaints of sexual harassment were not raised at this meeting.

[59] In its Form F3 Employer Response, GJ Consulting confirmed that the business was not financially stable. It submitted that Mr Stewart explained to Mr Erasmus that due to the delay in payment from a major client, the company was struggling to pay salaries. It submitted no mention was made to Mr Erasmus that he was being made redundant, claiming he was the highest earner at the time.

[60] Mr Erasmus’ evidence conflicts with Mr Stewart’s evidence. Mr Stewart accepted that the financial issues were raised with Mr Erasmus, but his evidence was also that he spoke to Mr Erasmus about the connection between the non-payment of bills by clients and Mr Erasmus’ conduct which caused the complaints to be made about him, and the subsequent loss of business and financial determent to the company as the reason for his dismissal.

[61] Ms Monteith who was also present at the meeting supported Mr Stewart’s evidence during her oral evidence, and corroborated Mr Stewart’s claim that it was explained to Mr Erasmus at the meeting that financial problems leading to his dismissal were connected to Mr Erasmus’s conduct.

[62] Mr Erasmus had the opportunity to challenge Ms Monteith about her evidence on this matter while she was giving evidence, particularly after she had corroborated Mr Stewart’s recollection of the conversation; however Mr Erasmus made only a very limited attempt to do so. On the balance of probability, I prefer the evidence of Mr Stewart and Ms Monteith about the breadth of the discussion on the morning of 10 May 2018.

[63] Mr Stewart said the financial dispute with Amazing Smiles is ongoing and Sarah Guerrera has refused to pay her outstanding bill. He also claimed Ms Guerrera is now counter suing the Respondent in connection with the sexual harassment allegation against Mr Erasmus. When Mr Stewart was pressed on providing any particulars of the alleged legal claim of Sarah Guerrera he could not provide any more information. Mr Stewart maintained the Wembley Road contract was lost because of Mr Erasmus and this was worth $25,000 dollars, work lost from Amazing Smiles was worth $12,000 and other losses were in the order of $4000.

Was there a valid reason for dismissal?

[64] Sexual harassment of clients of GJ Consulting by Mr Erasmus would constitute a valid reason for dismissal. In this case it would appear from the evidence that the conduct of Mr Erasmus, directed to the manager of Amazing Smiles Dental and the daughter of Ms Guerrera, was inappropriate and warranting of a disciplinary response. The applicant has tried to downplay the conduct but it was clearly serious enough for a complaint to be made against him on two occasions. I am fortified in my view that it is more likely than not that Mr Erasmus’ conduct was inappropriate given the evidence of Ms Bendle, who said that whilst she had not made a formal complaint about Mr Erasmus she had mentioned to Mr Stewart that she was not comfortable sometimes with Mr Erasmus’ sexual innuendo, which she described as going “a bit too far”.

[65] More to the point is whether the conduct itself was a valid reason for dismissal as at 10 May 2018 given the allegations occurred in September and December of 2017 and were the subject of meetings and counselling at the relevant times.

[66] The reason that Mr Stewart has given for justifying reliance on this conduct well after the conduct itself is that the full ramifications of Mr Erasmus’ conduct had not become clear until much later when his conduct became a basis for a client refusing to pay a bill which would cause significant financial loss and loss of client/reputation, in reference to the email from Ms Sarah Guerrera of 21 March 2018. There is still a difficulty with this submission however because the decision to dismiss Mr Erasmus was not taken until 1½ months later in May 2018.

[67] It appears the real reason for Mr Erasmus’ dismissal was because of a client’s refusal to pay an invoice being linked to his behaviour, rather than the behaviour itself, and a perception in the mind of Mr Stewart that Mr Erasmus’ earlier conduct in September 2017 contributed to the loss of work from Amazing Smiles. Is it enough that GJ Consulting wasn’t aware until March 2018 that Mr Erasmus’ conduct of December 2017 was apparently contributing to the company suffering financial loss? To complicate the matter it is clear Mr Erasmus’ conduct was not the only reason because other matters are were clearly raised in communications to GJ Consulting by the respective clients in both September 2017 and March 2018.

[68] I am inclined to the view that the conduct itself was sufficient to provide a valid reason despite it being conflated with the “real” reason for his termination, that being the apparent financial fallout from clients refusing to pay bills and connecting that refusal to the earlier conduct of Mr Erasmus. To the extent that there is doubt about whether these issues are sufficient to provide a valid reason, I am satisfied when taken together with the evidence concerning the failure of Mr Erasmus to comply with his employment contract by allowing his wife to use the company vehicle, and his failure to comply with the contract by maintaining the vehicle in good order and a tidy condition, keeping it clean and regularly washed that the GJ Consulting had a valid reason for dismissal as at 10 May 2018.

[69] Mr Erasmus appeared to provide no plausible explanation for the state of the vehicle he was responsible for as attested to by Mr Stewart and demonstrated by the photographs provided. There appears to be no explanation for the significant rust damage to the van other than neglect, given other vehicles of the same make and model was did not in this state.

[70] In summary, and as stated when the totality of the issues is taken together I am satisfied that GJ Consulting had a valid reason for dismissal.

Was Erasmus notified of the reasons for his dismissal?

[71] Based on my findings above, I am satisfied Mr Erasmus was notified of the reasons for his dismissal in connection with the sexual harassment allegations, and the related financial impact on the business in the course of the meeting in the morning of 10 May 2018. It appears the issue concerning the breach of contract concerning the vehicle were not raised at the meeting in the morning but became part of the subject of matters raised in text messages later that day. It would seem, given Mr Erasmus was told in the morning that he was to be dismissed, that the decision was made before he was notified of the matters concerning the vehicle.

Was Erasmus given an opportunity to respond to the reasons for dismissal?

[72] Whilst Mr Erasmus was advised of some of the reason for his dismissal it does not appear the meeting on 10 May was for the purpose of deciding whether to dismiss him pending his responses, but was for the purpose of advising him he was being dismissed and on that basis he was not given a proper opportunity to respond to the reasons. As already said, it appears the matters concerning the vehicle were not raised at the meeting.

Was there an unreasonable refusal to a support person?

[73] There is no evidence to suggest Mr Erasmus was denied a support person. I will consider this criteria to be neutral.

Warnings of unsatisfactory performance?

[74] Mr Erasmus was not dismissed for unsatisfactory performance so it is not necessary for me to consider this criteria.

Did the size of the business likely impact on the procedures followed in effecting dismissal? Did GJ Consulting have a dedicated Human Resources team?

[75] GJ Consulting is a small business with five staff and is no longer trading. It did not have a dedicated human resources expert on its staff and this no doubt affected the procedures followed in effecting Mr Erasmus’ termination. I am satisfied from the totality of the evidence that the procedures followed and obvious lack of a dedicated human resources specialist had an impact on the manner in which GJ Consulting dismissed Mr Erasmus.

Any other matters

[76] It seems from the evidence Mr Stewart had decided to terminate Mr Erasmus with one weeks’ notice when he was entitled to two weeks’ notice, and to give Mr Erasmus the option of working or being paid out the notice period. This changed later in the day on 10 May to Mr Erasmus being directed to return his vehicle and equipment the following morning. Mr Erasmus was ultimately not paid any notice but appears to have been paid part but not all of his accrued annual leave. As Mr Stewart admitted in his evidence he was mistakenly paid for a part of the last week, which he was not required to work, from his annual leave balance.

[77] Whilst I have been satisfied that GJ Consulting had a valid reason for dismissal, I have not been satisfied that the evidence concerning Mr Erasmus’ conduct in connection with the September and December 2017 incidents, and his failures in connection with maintaining the van and complying with all of the terms of his employment contract concerning the van constituted serious misconduct warranting summary dismissal without notice on 10 May 2018. The evidence concerning the claimed financial impact of his conduct is unclear and unreliable as the complaints about him were interwoven with separate complaints about GJ Consulting not attributed to him.

Conclusion on s.387 matters

[78] Whilst I have found GJ Consulting had a valid reason for dismissal, the combination of procedural failings in the way the dismissal was given effect, and the failure of GJ Consulting to pay Mr Erasmus for the notice period result in a conclusion that the termination was harsh and therefore unfair.

Remedy

[79] According to Mr Erasmus’ final pay slip he was being paid $1,444 per week gross plus 9.5% superannuation. Had Mr Erasmus been dismissed with notice he would have earned another $2,888 plus 9.5% superannuation on that amount.

[80] The evidence was that Mr Erasmus did not earn other income in the two weeks immediately following his termination. I deduct no other amount for contingencies. This amount does not exceed the legislative cap.

[81] The evidence of Mr Stewart was that whilst the business is no longer trading and is in the process of being wound up as at the date of hearing it has assets to a value in order of $5000. I have concluded that the matters of the viability of the business and also Mr Erasmus’ length of service are not matters on which I should further reduce the amount. Whilst it took some time, Mr Erasmus was successful in gaining other work some months after his termination. This is not a basis to further reduce to the amount as it does not relate the period for which the compensation applies.

[82] Whilst I have found Mr Erasmus engaged in misconduct and this contributed to the decision to dismiss him, given the amount I have arrived at I do not intend to further reduce the amount on that basis.

[83] I have determined that GJ Consulting Pty Ltd (ACN 605 112 883) should pay to Mr Johannes Machiel Erasmus the sum of $2,888 gross, taxed according to law, plus 9.5% superannuation, calculated on that amount, within 21 days. An order to that effect will be issued separately and concurrently with this decision.

COMMISSIONER

Appearances:

Mr M. Erasmus appearing on his own behalf

Mr G. Stewart appearing on behalf of the Respondent

Hearing details:

2018,

Brisbane:

October 24

Printed by authority of the Commonwealth Government Printer

<PR701982>

 1   Applicant’s Outline of Arguments, 5 August 2018 at pg 3.

 2   Letter of Termination, 11 May 2018.

 3   [2018] FWC 4135.

 4   Ibid.

 5   Applicant’s Outline of Arguments, 5 August 2018 at pg 13.

 6   Respondent’s Outline of Argument: objections.

 7   Respondent’s Outline of Argument: merits at page 9.

 8   Ibid at pg 7.