John Karahalios v Reece Australia Pty Ltd T/A Reece Pty Ltd
[2017] FWC 725
•2 FEBRUARY 2017
| [2017] FWC 725 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
John Karahalios
v
Reece Australia Pty Ltd T/A Reece Pty Ltd
(U2016/6209)
COMMISSIONER CIRKOVIC | MELBOURNE, 2 FEBRUARY 2017 |
Application for relief from unfair dismissal.
Introduction
[1] On 14 April 2016, Mr John Karahalios (Applicant) made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy in respect of his dismissal by Reece Australia Pty Ltd T/A Reece Pty Ltd (Reece) (Respondent).
[2] On 27 April 2016, the Respondent filed a response to Mr Karahalios’ application.
[3] On 25 May 2016, the application was listed for conciliation before a Commission Conciliator, but remained unresolved at the end of the conciliation. Consequently the matter was listed for hearing.
[4] On 14 June 2016, the Commission received an application for six orders requiring a person to attend from the Applicant. On 15 June 2016, the Commission received an application for an order requiring production of documents from the Applicant.
[5] On 16 June 2016, the Applicant’s order requiring persons to attend and order to produce requests were refused by Deputy President Clancy. The Deputy President declined to issue the order at that time.
[6] On 6 July 2016, the Commission received an application for six orders requiring a person to attend and an application for an order requiring production of documents from the Applicant. On 13 July 2016, the Commission received an amended application for two orders requiring a person to attend and an amended application for an order requiring production of documents from the Applicant.
[7] On 14 July 2016, the Commission received submissions from the Applicant objecting to the Respondent being legally represented.
[8] The matter was listed for a telephone mention on 28 July 2016.
[9] On 28 July 2016, permission to appear was granted to Mr Martin Jones for the Applicant and Mr Will Spargo, of Lander and Rogers, for the Respondent.
[10] Following the telephone mention the parties representatives undertook to liaise between themselves in an endeavour to limit the scope of the issues in dispute between them pertaining to the production of documents and the attendance of witnesses at the hearing.
[11] On 29 August 2016, the Commission received a further application for an order requiring production of documents from the Applicant. On 1 September 2016, the Respondent wrote to the Commission and objected to the granting of the order. On 9 September 2016, the Applicant withdrew the application for an order requiring production of documents.
[12] On 15 September 2016, the Commission received further application for two orders requiring a person to attend from the Applicant. On 16 September 2016, the Commission issued orders requiring Mr Gordon Rae and Ms Erica Gray to attend the Commission.
[13] Mr Karahalios’ application was heard on 26 and 27 September 2016. Closing submissions were filed by the parties and the parties requested that the closing submissions be considered on the papers without a further hearing for the purpose of making oral submissions. Mr Karahalios gave evidence on his own behalf. The following witnesses also gave evidence for the Applicant:
- Gordon Rae, Counter Hand (previously Branch Manager of Maribyrnong);
- Erica Gray, Sales Representative.
The following witnesses gave evidence for the Respondent:
- Talissa Brinkhuis, School-Based Apprentice;
- Dean Etherton, Region Leader;
- Josh Clarke, Assistant Manager (previously Branch Manager of Sunbury);
- Wayne Carl, Region Leader.
Background
[14] The Applicant was employed as Assistant Branch Manager, Sunbury Branch. Prior to that he was employed as Assistant Branch Manager, Maribyrnong. 1
[15] The Respondent is a retailer of plumbing and bathroom products. 2
[16] The Respondent submits that the Applicant was dismissed for providing two customers with products without charge in March 2016. 3 The Respondent submits that the value of the products provided to one of the customers was approximately $12,000.4
Evidence
Incident involving goods provided to Mr Ivan Movrin
[17] The evidence of Mr Etherton is that on 23 March 2016, he visited the Sunbury store to assist with its customer order report for the month. 5 His evidence is that in the course of reviewing the store’s customer orders, he noticed a number of issues with the account of Mr Ivan Movrin.6 Mr Etherton’s evidence is that he found there were items on an order that had not been charged to Mr Movrin’s account that he could not find in stock on site.7 Further, his evidence is that the particular items that concerned him were dated in a period Mr Movrin’s account was on “Stop Credit” and no extension had been granted.8 The evidence of Mr Etherton is that a number of goods listed in the customer orders for Mr Movrin were not on site.9 His evidence was that one order had been processed by Ms Brinkhuis, others had been processed by Mr Craig Hobblen and another had been processed by the Applicant.10
[18] The evidence of Mr Etherton is that he spoke with Ms Brinkhuis and asked her about the order she had processed, specifically whether the goods were charged to Mr Movrin at the time he took them. 11 His evidence is that Ms Brinkhuis replied that the goods had not been charged to Mr Movrin’s account because it was on “Stop Credit”.12 Mr Etherton’s evidence is that when he asked Ms Brinkhuis who had instructed her to do this, she had replied that the Applicant had.13 Mr Etherton’s evidence is that he was concerned the Applicant had instructed Ms Brinkhuis to act against the Respondent’s policies and that despite Mr Movrin’s account now being off “Stop Credit” the Applicant had not yet charged it for the products.14 The evidence of Mr Etherton is that there was no record of sale or way of ensuring receipt of payment and that the Respondent’s payment terms could not commence running.15
[19] The Applicant’s evidence is that on the relevant day he was acting branch manager of the Sunbury store. 16 His evidence is that he does not recall authorising Ms Brinkhuis to provide the goods to Mr Movrin whilst on “Stop Credit”.17 The Applicant’s evidence is that if requested, he would probably have authorised a $100 item to a twenty year veteran customer in order to maintain the purchasing relationship.18 The Applicant’s evidence is he could remove the “Stop Credit” at his discretion, though he does not remember entering the system to extend the credit terms of the account by 7 days.19 The Applicant concedes that in hindsight this may have been a mistake.20
[20] The evidence of Ms Brinkhuis is that during the period that Mr Clarke was away the Applicant asked her to make a customer order for Mr Movrin. 21 Her evidence is that she told the Applicant that Mr Movrin was on “Stop Credit”.22 The evidence of Ms Brinkhuis is the Applicant told her to put through the customer order and hold it, that the Applicant had told her the order would be released to Mr Movrin’s account once it was off “Stop Credit”.23 Her evidence is that she does not know if the Applicant released the goods into Mr Movrin’s account once it came off “Stop Credit”.24
[21] The evidence of Mr Clarke is that he does not recall telling the Applicant to be acting branch manager in his absence. 25
[22] The evidence of Mr Rae is that in order to take a customer off “Stop Credit” a branch manager has to go into the computer system and check a box. 26
[23] The Applicant’s representative provided a copy of the tax invoice for the item, dated 24 March 2016, charging it to Mr Movrin’s account. 27
Incident involving goods provided to Alpha One Development
[24] The evidence of Mr Etherton is that on the morning of 24 March 2016, he discovered a customer order of $12,000 raised in the commercial account of Alpha One Developments Pty Ltd and that it included a warehouse location of the items. 28 However, his evidence is that when he went to inspect the warehouse the products were not there.29
[25] The Applicant’s evidence is that in mid-March 2016 he delivered goods to Alpha One Development to the value of approximately $12,000 over the course of approximately two weeks. 30 His evidence is that all the goods were fully itemised on a commercial customer order listed against his managers’ sales number.31 His evidence is that he had informed Mr Clarke of the order being created prior to him going on leave.32
[26] The Applicant’s evidence was that even though the customer order had been raised in the commercial customer account of Alpha One the intention was always for Mr Theo Patsiotis to pay for the goods, the proprietor of a Fish and Chip Restaurant. 33 His evidence is that even though the customer order stated that the customer was his cousin, Mr Patsiotis is in fact not his cousin, he is his friend.34 The Applicant’s evidence is that he personally delivered the goods in early March 2016, however that he cannot remember exactly when and that he did not keep a record of when he delivered the goods.35 His evidence is that the goods were not charged to Alpha One’s account because Mr Patsiotis was going to pay for the goods directly.36
[27] The evidence of Mr Clarke is that the Applicant had spoken to him about the Alpha One Development order before he went on leave, telling him that it was for a fish and chip shop of his friend. 37 His evidence is that the Applicant had not asked if he could put the order in his name and that there was no need for it to be put in his name, as opposed to the Applicant’s, as the order was not raised against the Applicant’s staff account.38
[28] The evidence of Ms Gray is that everyone in the Sunbury branch was of aware that the Applicant was assisting with this project, that it had been the subject of on-going conversation for some months around the store. 39
Termination of Employment
Meeting of 24 March 2016
[29] The evidence of the Applicant is that on the morning of 24 March 2016, Mr Etherton stated his displeasure at the Applicant’s actions relating to the Apha One Development customer account. 40 His evidence is that he explained the process he had gone through, apologised if he had done anything wrong and said that he would fix it immediately if it was of concern to him.41 The Applicant’s evidence is that Mr Etherton said words to the effect “I have sacked someone for doing the same thing” and that they would discuss the matter at a 2:30pm meeting.42 His evidence is that he was not told prior to the 2:30pm meeting that his employment was under review or what the purpose of the meeting was.43 The Applicant’s evidence is that prior to the meeting Mr Etherton asked him whether he would like to bring a witness, and that he declined to do so.44
[30] The evidence of the Applicant is that the first thing he was asked by Mr Etherton when he attended the 2:30pm meeting was “why should you retain your job at Reece”. 45 His evidence was that he was not told prior to the meeting that his employment was under review.46 The Applicant’s evidence is that Mr Etherton gave him limited opportunity to respond to the allegations of policy breach and dismissed his responses without consideration.47 The Applicant’s evidence is that Mr Etherton told him he was being dismissed due to his lack of trust in him.48
[31] The evidence of Mr Etherton is on the morning of 24 March 2015, he invited the Applicant into the manager’s office, told the Applicant about the order in Mr Clarke’s name, that he thought there was an issue with Mr Clarke and asked the Applicant if he knew about the order. 49 His evidence is that the Applicant told him that it was his order and because the customer was like family it was under Mr Clarke’s name.50 Mr Etherton’s evidence is that the Applicant told him the goods were in the customer’s possession already and that he had delivered them personally.51 His evidence is when he asked the Applicant how he released the goods without payment or an invoice the Applicant had replied that he was going to charge and release the order at the end of the job, even though he knew that it was not policy to do so, because it was a job for a friend of his.52
[32] The evidence of Mr Etherton and Mr Carl is that at approximately 2:00pm on 24 March 2016, they notified the Applicant that he was required to attend a formal meeting at 2:30pm in relation to the Alpha One and Mr Movrin customer orders. 53 Their evidence is that Mr Etherton told the Applicant he was welcome to bring a support person and that the Applicant declined to do so.54
[33] Mr Etherton and Mr Carl’s evidence is that the meeting commenced at approximately 2:30pm. 55 His evidence is that he told the Applicant it was a formal meeting due to the seriousness of the conduct in question.56 Mr Etherton and Mr Carl’s evidence is that Mr Etherton asked the Applicant if he wished to have a support person present and that the Applicant declined.57 Mr Etherton’s evidence is that Mr Carl attended the meeting as a witness on behalf of the Respondent.58 The evidence of Mr Carl is that the Applicant, when asked why he had given goods to Mr Movrin without receiving legal tender, that the Applicant had replied it was the ‘done thing’.59
[34] Mr Etherton’s evidence is that the Applicant confirmed he knew about the applicable policies of the Respondent relating to the supply of goods to customers and that he was aware of the repercussions for breaching the Respondent’s policy. 60 The evidence of Mr Etherton is that other employees had been dismissed for similar conduct.61 Mr Carl’s evidence is that the Applicant was aware that his actions were a breach of the Respondent’s policy and that he did not give an explanation as to why he did not charge the goods to the customer’s commercial account.62 Mr Etherton and Mr Carl’s evidence is that the only explanation the Applicant provided was that the customer to whom he delivered $12,000 worth of goods was a family friend whom he trusted.63
[35] Mr Etherton’s evidence is that he stopped the meeting to consider the Applicant’s response and discuss the issue with Mr Carl. 64 Mr Etherton’s evidence is that he and Mr Carl discussed that $12,000 of stock was a very significant amount, that there was no way for the Respondent to enforce payment and that as a result they considered dismissal, as opposed to a warning, appropriate.65 Mr Carl’s evidence is that when asked he provided Mr Etherton with his thoughts on how he would handle the matter in his region and that he had said if it had been confined to the issue of Mr Movrin’s account he would have issued the Applicant a final written warning, but because it was also about a failure to properly account for nearly $12,000 worth of stock and put the business at a significant risk of loss that he would dismiss the Applicant.66 Mr Etherton’s evidence is that he was also concerned that the Applicant had put his interests and those of a friend before the Respondent’s interests.67 Mr Etherton’s evidence is that the decision was made to terminate the Applicant’s employment.68
[36] Mr Etherton and Mr Carl’s evidence is that when the meeting resumed, Mr Etherton recapped what had been discussed and told the Applicant that his conduct was in breach of the R10s, the 10 values and one overarching goal of the Respondent, in particular R05 – lead by example and R09 – honesty and integrity. 69 Mr Etherton’s evidence is that the Applicant insisted that he was an honest person and had made a mistake.70 Mr Etherton’s evidence was that despite this that he had come to the view the relationship with the Applicant had broken down and was not capable of being restored.71 The evidence of Mr Etherton and Mr Carl is that Mr Etherton advised the Applicant that the decision to terminate his employment immediately had been decided.72
Relevant Legislation
Protection from Unfair Dismissal
[37] Section 382 of the Act sets out the circumstances where a person is protected from unfair dismissal. Section 382 of the Act is as follows:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
[38] The Respondent is a large employer with 450 branches across Australia and approximately 3,500 employees. 73 The Applicant commenced his employment with the Respondent on 13 January 2003 and his employment was terminated 24 March 2016 taking effect that same day, being a period of more than thirteen years.74 Therefore, I am satisfied that the Applicant has completed a period of employment with the Respondent of at least the minimum employment period pursuant to s.383(a) and s.382 of the Act.
[39] The Applicant was covered by the Reece Operations Employee Collective Agreement 2009 and the sum of his annual rate of earnings was $66, 262.07, less than the high income threshold. 75 Consequently, I am satisfied the Applicant was protected from unfair dismissal.
[40] I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the Act.
Was the dismissal unfair?
[41] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[42] I am satisfied that the Respondent dismissed the Applicant from his employment on 24 March 2016 within the meaning of s.386(1)(a) of the Act.
[43] I am satisfied that the Small Business Fair Dismissal Code does not apply to the Applicant’s dismissal.
[44] The Respondent has not submitted that the Applicant’s dismissal was a case of genuine redundancy. Regardless, I am satisfied that the Applicant’s dismissal was not a case of genuine redundancy within the meaning of s.389 of the Act.
Harsh, unjust or unreasonable
[45] Having been satisfied of each of the matters prescribed by s.385(a), (c)-(d) of the Act, I now must consider whether the Applicant’s dismissal was harsh, unjust or unreasonable. Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable:
“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.”
[46] The type of conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained by the High Court of Australia in Byrne v Australian Airlines Ltd (1995) 185 CLR 410. McHugh and Gummow JJ explained as follows:
“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.” 76
Consideration
[47] I will now consider each of the matters set out in s.387 of the Act. 77
Valid Reason – s.387(a)
[48] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account 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). 78 When considering whether a reason is a valid reason for the purpose of s.387(a) of the Act, the reason must be “sound, defensible or well founded”. 79 A reason which is “capricious, fanciful, spiteful or prejudiced” cannot be a valid reason. 80
[49] The Commission will not stand in the shoes of the employer and determine what it would do if it was in the position of the employer. 81 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).82
[50] This is not a matter which concerns whether there was a valid reason for the Applicant’s dismissal which related to his capacity to perform the role of Assistant Branch Manager as was required by the Respondent. There is currently nothing before the Commission which I consider demonstrates otherwise. This matter concerns whether there was a valid reason for the Applicant’s dismissal which related to his conduct.
[51] In cases relating to alleged misconduct, the test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct. It is not enough for the employer to establish that it had a reasonable belief that the termination was for a valid reason. The Commission must make a finding as to whether the conduct occurred based on the evidence before it. 83 The reason is valid where the Commission finds that the conduct occurred and justified termination of employment. The reason might not be a valid reason where the conduct did not occur or where it did occur but did not justify termination. 84
[52] There is no dispute between the parties that Reece products can be sold to a customer either via a cash sale or by charging the items to the customer’s commercial account. 85
[53] There is no dispute between the parties that the standard terms and conditions of customer commercial accounts require customers to pay outstanding amounts within 30 days of the last day of the calendar month in which the purchases are made and that the Respondent offers a standard 15 day extension to customers who fail to pay within the 30 day period. 86 There is also no dispute between the parties that once a customer’s payment period expires, the customer’s commercial account is automatically placed on “Stop Credit” until it is paid in full.87 The Reece Group Credit Management Policy & Procedure document states “No activity, sales and/or delivery is to occur at all for a client on Stop Credit”.88
[54] Initially, the evidence of the Respondent disputed that the Applicant had the discretion to extend this period by up to a further 7 days 89, however this evidence was amended during the hearing and the Respondent no longer disputes this.90
[55] It is the evidence of Mr Etherton, Ms Gray, Mr Clarke, Mr Carl and Mr Rae, that it is a requirement for all Reece employees to charge items to a customer’s commercial account prior to giving the customer the items. 91 When goods are not in stock a customer order is created in the customer’s name, listing the goods ordered. This does not affect the requirement to charge a customer’s commercial account prior to giving the customer the items.92
[56] The evidence of Mr Rae is that in a situation where an order is split, that is when some goods are provided to the customer immediately and some are ordered in, separate invoices are generated for the goods supplied on each occasion. 93
[57] Mr Rae’s evidence is that Reece policy in relation to purchases by Reece employees and/or their close relatives provides for staff to use a staff account to make the purchase at a staff discount rate. 94
[58] The evidence of Mr Rae, is that when a branch manager is on leave for any reason and for any period the assistant branch manager is expected to take over the manager’s duties and responsibilities. 95 His evidence is that since a restructure in 2010, branches are regarded as being managed by the branch manager and assistant branch manager working together, as a branch management team, with not a lot of difference between the roles.96
[59] The evidence of Ms Gray is that whilst she is generally not privy to branch management issues or procedures, it was her belief and understanding that the Applicant was the acting branch manager when Mr Josh Clarke, the branch manager, was absent for any reason. 97 Her evidence is she reported to the Applicant on this basis during the period of Mr Clarke’s absence immediately prior to the Applicant’s termination.98
[60] The Respondent asserts that the Applicant provided two customers products without charge in March 2016. The evidence before the Commission substantiates this assertion. The Respondent maintains that this conduct constitutes a valid reason for the Applicant’s dismissal.
[61] The Applicant provides various explanations in relation to both the Movrin and Alpha One incidents as to why his conduct does not constitute a valid reason for dismissal. On the whole I found the Applicant’s testimony disingenuous, at times inconsistent and self-serving. He sought to excuse and rationalise his conduct with a series of contentions, including that:
- He had the authority to extend the period for Mr Movrin to pay outstanding amounts on his account by a further 7 days 99;
- His evidence is that later collection of payment in relation to cash sales happens often 100;
- He could have issued the Alpha One goods and products on a cash sale invoice without itemisation 101;
- The arrangement he made with Mr Patsiotis was a ‘simple variation’ of the usual process of either charging the customer for each item separately as they came in to collect the goods or charging it to the customers commercial account. 102
- He had intended to total all items up at the end on one itemised account, invoice the customer and receive payment at that time. 103
- At any time he could have put all charges onto the customer’s commercial account, allowing the customer the usual period afforded to customer’s with commercial accounts to pay outstanding amounts. 104
- Immediately following a conversation regarding the account with Mr Etherton on 24 March 2016 he contacted the customer informing him that payment needed to be collected immediately and that the customer paid later that morning. 105
[62] I prefer the evidence of Ms Brinkhuis to that of the Applicant in relation to the Movrin incident. His evidence on this issue ranged from ‘I don’t recall’ to ‘I would probably have authorised’ and ultimately ‘in hindsight this may have been a mistake’. 106 The Applicant fails to provide a plausible explanation as to why he did not take the Movrin commercial account off ‘Stop Credit’ so that Ms Brinkhuis could charge the item to the account prior to providing the goods to Mr Movrin. It is the Respondent’s position that this incident alone would not have led to the Applicant’s dismissal.
[63] In relation to the Alpha One incident, I do not accept the Applicant’s characterisation of this incident as a ‘simple variation’ of the usual process of charging. I agree with the Respondent’s submission that it involved a serious amount of money and that the Applicant was reasonably required to receive payment, either in cash or by charging a commercial account, prior to the provision of goods to a customer. I accept the Respondent’s submission that the Applicant’s failure in this regard is two-fold: not only did the Applicant fail to collect payment prior to handing over the goods, but he exacerbated this failure by omitting to record that the goods had left the premises. The Applicant’s actions meant that the Respondent’s policy in relation to pursuing customer accounts for payment within the set time frame was not able to be activated. The fact that ultimately these payments were made does not negate the seriousness of the Applicant’s failure. In my view the reasons provided by the Applicant for these failures are without foundation and do not adequately address issues of paramount importance. Namely, that he allowed goods to be provided to a customer, albeit a ‘close friend’, to the value of approximately $12,000 before receiving payment and further without recording the items delivered.
[64] The Respondent did not terminate the Applicant’s employment summarily. It made payment to the Applicant in lieu of notice, and denies his dismissal was harsh, unjust or unreasonable. I am satisfied that the conduct involving the provision of goods, as described above, was ultimately inconsistent with the trust and confidence required for a continuing employment relationship. Given the above, I am satisfied that there is a valid reason for terminating the Applicant’s employment. Even if I am wrong in my characterisation of the evidence in relation to the Movrin incident, I am satisfied that the Alpha One incident constitutes a valid reason for terminating the Applicant’s employment.
Notification of the Valid Reason – s.387(b)
[65] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account whether the person was notified of the reason. 107 Procedural fairness requires that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment. 108 The notification of the valid reason must be in explicit, plain and clear terms. 109
[66] The Applicant submits that the Respondent has provided four different and changing reasons for the Applicant’s dismissal, and that while a written reason was given at the time of dismissal the Applicant remains unclear as to the actual reason and whether the stated reasons were the real reasons.
[67] The Respondent submits that the Applicant was notified of the reasons for his dismissal in the meeting of 24 March 2016 and via the record of outcome provided to him.
[68] The Applicant was notified of the reasons the Respondent relied on for his dismissal in a termination of employment document, dated 24 March 2016, and during a meeting on the same day. Based on the evidence set out above in paragraphs [29]-[36], I find that the Applicant was notified in clear terms of the reasons for the termination of his employment prior to the decision being taken to terminate his employment.
Opportunity to Respond – s.387(c)
[69] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person. 110 An employee must be notified of the reason for termination and must also be given an opportunity to respond to that reason before the decision to terminate is made. 111 This process does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly. 112 Where an employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of this section. 113
[70] The Applicant submits whilst Mr Etherton asked in the meeting of 24 March 2016 why he should keep his job, Mr Etherton did not any time intend to, or did in fact, consider any response made by the Applicant.
[71] Respondent submits that the Applicant was given, and took, the opportunity to respond to the allegations against him during the meeting of 24 March 2016.
[72] I accept the evidence of Mr Etherton and Mr Carl as to the events that took place on 24 March 2016. The Applicant was made aware of the allegations in relation to his conduct on 24 March 2016. The Applicant attended a meeting with Mr Etherton and Mr Carl, after the Applicant had provided his response to the allegations, the meeting was adjourned to enable Mr Etherton and Mr Carl to consider the Applicant’s response. The decision to terminate was made after this consideration. I am therefore satisfied that the Applicant was given an opportunity to respond to the reasons for his termination.
Unreasonable Refusal of a Support Person – s.387(d)
[73] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal. 114 With respect to this consideration, the Explanatory Memorandum to the Act states:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.” 115
[74] The Applicant was provided an opportunity for a support person to attend the meeting of 24 March 2016 which he declined. On that basis I find that the Respondent did not refuse to allow the Applicant access to a support person.
Warnings regarding Unsatisfactory Performance – s.387(e)
[75] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal. 116 Unsatisfactory performance is more likely to relate to the employee’s capacity to do the job, than to their conduct. 117 The Commission must take into account whether there was a period of time between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period of time gives the employee the opportunity to understand their employment is at risk and to try and improve their performance. 118
[76] The dismissal of the Applicant did not relate to his performance. I consider this factor neutral.
Impact of the Size of the Respondent on Procedures Followed and Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(f) – (g)
[77] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal. 119 Further, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account 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. 120
[78] The Applicant accepts that the Respondent is a large employer with dedicated human resources professionals. 121 The Respondent did not contend that it was disadvantaged in relation to s387(f) of the Act, nor does it lack the resources in this regard. I do not consider that there are any factors which might have impacted on the ability of the Respondent to follow a fair process in effecting the Applicant dismissal.
Other Relevant Matters – s.387(h)
[79] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any other matters that the Commission considers relevant. 122
Alleged ulterior motive of Respondent
[80] The Applicant seeks to rely on the demotion of Mr Clarke to assistant branch manager, subsequent to the Applicant’s dismissal as an ulterior motive of Mr Etherton in the decision to terminate the Applicant’s employment. The Applicant’s evidence is that in approximately December 2015, Mr Clarke had confided in him that he felt under pressure and was interested in stepping down into a lessor role. 123 Further, the Applicant’s evidence is that Mr Etherton and Mr Clarke are friends outside of work.124
[81] The evidence of Mr Etherton is that he has known Mr Clarke since he employed him when he was 16 years old and that he has a good relationship with him. 125 Mr Etherton strongly denies the assertion of the Applicant that he had an ulterior motive.126 Mr Etherton’s evidence is that on 11 December 2015, he had a conversation with Mr Clarke’s wife during which she indicated Mr Clarke was having difficulties coping with a health issue.127 Mr Etherton’s evidence is that Mr Clarke told him that as a result he was having difficulties in the role of Branch Manager.128 Mr Etherton’s evidence is that he told Mr Clarke to give himself six months to see if his health improves and if not Reece could help him find a different role.129 Mr Etherton and Mr Clarke’s evidence is that Mr Clarke’s health did improve and that prior to Mr Clarke going on leave in March 2016 he told Mr Etherton that he was fine to stay in the role of Branch Manager.130 Mr Etherton and Mr Clarke’s evidence is that Mr Etherton and Mr Carl met with Mr Clarke on 29 March 2016 to discuss the issues of items being released to customers without payment.131 Mr Etherton and Mr Clarke’s evidence is that despite Mr Clarke not being directly involved as he had been on annual leave, Mr Clarke offered an apology and accepted that it should not have happened under his leadership as Branch Manager and that Mr Clarke was demoted from his role as Branch Manager.132
[82] I do not accept the Applicant’s assertion that Mr Etherton was motivated by a desire to facilitate Mr Clarke’s wish to step down into a lesser role. I accept that Mr Etherton and Mr Clarke gave their evidence in a truthful and forthright manner.
Evidence of other employees providing goods when a customer commercial account is on ‘Stop Credit’
[83] The Applicant submits that there are four other proven occasions at the Sunbury branch in the February to March 2016 period where goods were provided to customer’s whose commercial accounts were on ‘Stop Credit’. Included in the four occasions, is the Applicant’s own conduct in relation to the Ivan Movrin account. The Applicant also includes transactions of Mr Craig Hobbelen, Mr Clarke and a further unknown individual. The Applicant further submits that this is evidence of a more widespread practice at the Sunbury branch.
[84] The Respondent submits that Mr Hobbelen was involved in one instance of providing goods to a customer who was on ‘Stop Credit’. The evidence of Mr Etherton is that Mr Hobbelen took full responsibility for breaching Reece policy and that he made the decision to issue Mr Hobbelen with a first and final written warning. 133 The evidence of Mr Etherton is that Mr Hobbelen was issued with a warning, as opposed to termination, because of the lower value of the goods he provided, the lower level of seniority of his position and because Mr Hobbelen took responsibility for his actions without qualification.134
[85] The Respondent submits that the evidence the Applicant relies upon for the assertion that Mr Clarke provided goods to a customer who was on ‘Stop Credit’, is that of Ms Gray, Mr Etherton and Mr Clarke. The evidence of Ms Gray is that goods were provided to the customer MM Constructions whilst its commercial account was on ‘Stop Credit’. 135 The evidence of Mr Etherton is that Mr Clarke did not provide goods to MM Constructions as he was on annual leave at the time, but that Mr Clarke did provide goods to the customer Rock Plumbing whilst its commercial account was on ‘Stop Credit’.136 Mr Clarke denies that he provided any goods to customers whose commercial accounts were on ‘Stop Credit’, his evidence is that he found out about the goods that had been provided to Rock Plumbing whilst its commercial account was on ‘Stop Credit’ and that he tried to resolve the issue himself.137 The Respondent submits that the discrepancy between the evidence of Mr Etherton and Mr Clarke is due to the passage of time affecting Mr Etherton’s recollection, particularly as the issue was only raised with Mr Etherton in response to matters that were first adduced during the hearing. The Respondent submits that Mr Clarke’s evidence is more consistent with the witness statement of Mr Etherton, that provided the reason for Mr Clarke’s demotion and final warning was his lack of oversight.138
[86] In the alternative, the Respondent submits that the Applicant’s misconduct was more serious than the alleged conduct of Mr Clarke and that the Applicant would not have been dismissed if he had only provided the goods to Mr Movrin. 139
[87] There is insufficient evidence before me to support any finding in relation to MM Constructions, Rock Plumbing or a further transaction of an unknown individual. Even if I were to accept that Mr Clarke did provide goods to Rock Plumbing whilst its commercial account was on ‘Stop Credit’, the evidence before me is that the equivalent conduct of the Applicant would, on its own, have resulted in a first and final warning only, as was the case with Mr Hobbelen.
Conclusion
[88] In taking into account all the matters set out above, including his period of service of more than thirteen years, I must now consider whether the termination of the Applicant was harsh, unjust or unreasonable.
[89] I find on the evidence before me on the balance of probabilities that the alleged incidents occurred and that they were in breach of policies that the Applicant either knew or should have known. Regrettably, the particular consequences of the dismissal for the Applicant and his period of service, do not, in the circumstances of this case, outweigh the serious misconduct that the Applicant engaged in. I do not consider the dismissal was disproportionate to the gravity of the misconduct.
[90] In the circumstances of this case, having taken into account the considerations of s.387(a)-(h) I am not satisfied that the Applicant’s dismissal was harsh, unjust or unreasonable pursuant to s.385(b) of the Act. It follows from those findings that I dismiss the application.
[91] An order 140 to this effect will be published separately to this decision.
COMMISSIONER
Appearances:
M Jones and N Parthimos, for Applicant;
W Spargo, of Lander and Rogers for Respondent.
Hearing details:
2016
26 and 27 September.
Final written submissions:
Applicant’s Final Submission, 31 October 2016
Respondent’s Final Submission, 14 November 2016
Applicant’s Final Submission in reply, 25 November 2016
1 Exhibit A3, par.3-5.
2 Respondent’s Outline of Submissions, lodged 5 July 2016, par.3.
3 Respondent’s Outline of Submissions, lodged 5 July 2016, par.5; Respondent’s Closing Submissions, lodged 14 November 2016, par.20.
4 Respondent’s Outline of Submissions, lodged 5 July 2016, par.5.
5 Exhibit R7, par.22.
6 Exhibit R7, par.23.
7 Exhibit R7, par.23.
8 Exhibit R7, par.24.
9 Exhibit R7, par.25.
10 Exhibit R7, par.25-27.
11 Exhibit R7, par.31.
12 Exhibit R7, par.32.
13 Exhibit R7, par.32.
14 Exhibit R7, par.34.
15 Exhibit R7, par.37.
16 Exhibit A3, par.17e-f.
17 Exhibit A3, par.17j.
18 Exhibit A3, par.17k.
19 Exhibit A3, par.17g & 17l; Exhibit R8, attachment JC1.
20 Exhibit A3, par17l.
21 Exhibit R6, par.8.
22 Exhibit R6, par.9.
23 Exhibit R6, par.9.
24 Exhibit R6, par.10.
25 Exhibit R8, par.25.
26 PN430.
27 Exhibit A4.
28 Exhibit R7, par.40.
29 Exhibit R7, par.40.
30 Exhibit A3, par.18a.
31 Exhibit A3, par.18b & d.
32 Exhibit A3, par.18f.
33 PN808 & 848.
34 PN810-813; Exhibit R7, attachment DE4.
35 PN826-829.
36 PN844
37 Exhibit R8, par.27.
38 Exhibit R8, par.28.
39 Exhibit A1, par.7.
40 Exhibit A3, par.32.
41 Exhibit A3, par.32.
42 Exhibit A3, par.33.
43 Exhibit A3, par.33.
44 PN871.
45 Exhibit A3, par.35.
46 Exhibit A3, par.33.
47 Exhibit A3, par.36.
48 Exhibit A3, par.37.
49 Exhibit R7, par.41.
50 Exhibit R7, par.42.
51 Exhibit R7, par.43.
52 Exhibit R7, par.44.
53 Exhibit R7, par.51; Exhibit R8, par.21.
54 Exhibit R7, par.51; Exhibit R8, par.21.
55 Exhibit R7, par.52.
56 Exhibit R7, par.52.
57 Exhibit R7, par.52; Exhibit R9, par.22.
58 Exhibit R7, par.52.
59 Exhibit R9, par.28.
60 Exhibit R7, par.53.
61 Exhibit R7, par.55.
62 Exhibit R9, par.32-33.
63 Exhibit R7, par.56; Exhibit R9, par.31.
64 Exhibit R7, par.57.
65 Exhibit R7, par.57-58.
66 Exhibit R9, par.36-37.
67 Exhibit R7, par.57.
68 Exhibit R7, par.57.
69 Exhibit R7, par.58; Exhibit R9, par.38.
70 Exhibit R7, par.59.
71 Exhibit R7, par.59.
72 Exhibit R7, par.60 & attachment DE5; Exhibit R9, par.39 & attachment WC1.
73 Respondent’s Outline of Submissions, lodged 5 July 2016, par.3.
74 Exhibit A3, par.1 & 8.
75 Employer Response Form F3, lodged 27 April 2016, answers to questions 1.1 and 1.5.
76 Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 465 (McHugh and Gummow JJ)
77 Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]
78 Fair Work Act 2009 (Cth) s. 387(a)
79 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373
80 Ibid
81 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685
82 Ibid
83 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213, [24]
84 Edwards v Giudice (1999) 94 FCR 561, 565
85 Respondent’s Outline of Submissions, lodged 5 July 2016, par.6; Applicant’s Closing Submissions, lodged 31 October 2016, par A.4.3-A.4.4; PN697-706.
86 Exhibit R7, par.15-16; Exhibit A3, par.17b.
87 Respondent’s Outline of Submissions, lodged 5 July 2016, par.9; Exhibit A3, par.17c.
88 Exhibit R8, attachment JC1, p.15.
89 Exhibit R7, par.18 & 36.
90 PN1040-1054.
91 Exhibit R7, par.14; PN18; Exhibit R8, par.15; Exhibit R9, par.13; PN411-414.
92 Exhibit R8, par.13 & 15
93 Exhibit A2, par.26.
94 Exhibit A2, par.28.
95 Exhibit A2, par.3-4 & 9.
96 Exhibit A2, par.10.
97 Exhibit A1, par.4-5.
98 Exhibit A1, par.5.
99 Exhibit A3, par.17i.
100 Exhibit A3, par.18o.
101 Exhibit A3, par.18e.
102 Exhibit A3, par.18l.
103 Exhibit A3, par.18l.
104 Exhibit A3, par.18m.
105 Exhibit A3, par.34.
106 Exhibit A3, par17j-l.
107 Fair Work Act 2009 (Cth) s. 387(b)
108 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151; Gooch v Proware Pty Ltd T/A TSM (The Service Manager)[2012] FWA 10626
109 Previsic v Australian Quarantine Inspection Services (unreported, AIRC, Holmes C, 6 October 1998) Print Q3730,
110 Fair Work Act 2009 (Cth) s. 387(c)
111 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151
112 Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1, 14 citing Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7 (Wilcox CJ)
113 Ibid
114 Fair Work Act 2009 (Cth) s.387(d)
115 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542]
116 Fair Work Act 2009 (Cth) s.387(e)
117 Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237
118 Johnston v Woodpile Investments T/A Hog’s Breath Café - Mindarie [2012] FWA 2, [58]
119 Fair Work Act 2009 (Cth) s.387(f)
120 Fair Work Act 2009 (Cth) s.387(g)
121 Applicant’s Outline of Submissions, lodged 14 June 2016, p.20-21.
122 Fair Work Act 2009 (Cth) s.387(h)
123 Exhibit A3, par.19.
124 Exhibit A3, par.19
125 Exhibit R7, par.71.
126 Exhibit R7, par.72.
127 Exhibit R7, par.73.
128 Exhibit R7, par.73.
129 Exhibit R7, par.73.
130 Exhibit R7, par.74; Exhibit R8, par.23.
131 Exhibit R7, par.76; Exhibit R8, par.35.
132 Exhibit R7, par.77.
133 Exhibit R7, par.69.
134 Exhibit R7, par.70.
135 PN118-120.
136 PN1073-1096, 1118 and 1124-1138.
137 PN1314-1342 & 1405-1414.
138 Exhibit R7, par.77-79, attachment DE7.
139 PN1262-1265; Exhibit R9, par.36.
140 PR589976.
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