Joseph Duncan v Complete Belting Solutions
[2023] FWC 804
•8 MAY 2023
| [2023] FWC 804 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Joseph Duncan
v
Complete Belting Solutions
(U2022/10060)
| DEPUTY PRESIDENT LAKE | BRISBANE, 8 MAY 2023 |
Application for an unfair dismissal remedy – unsatisfactory work performance – valid reason – application dismissed.
Mr Joseph Duncan (the Applicant) brought an application to the Fair Work Commission (the Commission) seeking a remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) claiming he was dismissed from his employment with Complete Belting Solutions Pty Ltd (the Respondent). The Applicant had been employed with the Respondent since around 1 January 2021 as the North Queensland Business Development Manager in a full-time capacity.
It is undisputed that Applicant was dismissed on 4 October 2022, and he lodged this application with the Commission on 14 October 2022, within 21-days, as required by the Act.[1] The Applicant is protected from unfair dismissal and the dismissal did not involve a genuine redundancy.[2]
A conference was held on 9 January 2023. Directions were issued for a hearing which was held on 10 February 2023. The Applicant was self-represented, and Ms Chelsi Gale appeared on behalf of the Respondent as the General Manager.
Background
On 4 October 2022, Ms Gale called the Applicant into the Gladstone branch to discuss a series of issues. She informed him that a major customer was very unhappy with the lack of responsiveness and had chosen a different supplier because of the Applicant. The Respondent indicated that this caused a significant loss of business. The Respondent provided an opportunity for the Applicant to respond where the Respondent had highlighted previous poor performance in his role such as ignoring customers, turning down work and not communicating within the business. Furthermore, the Applicant had not been bringing any new business as part of his role.
The Respondent asked the Applicant if there were any other issues that they should be made aware of considering previous discussions had been undertaken regarding poor work performance. The Respondent suggested that the Applicant move to a site-based role might be an option. However, the Respondent knew that the Applicant would not accept, and the Applicant confirmed that this was not his preference. The Respondent stated that the Applicant had been made aware of the performance gaps in May 2022 and that she would be terminating his employment with the Respondent if there had been no improvement. The Applicant was effectively immediately on this day.
The Applicant was paid two weeks in lieu of notice, accrued entitlements and any outstanding pay.
Respondent evidence and submissions
The Respondent submits that the Applicant’s unsatisfactory work performance was a valid reason for dismissal.
The specific reasons for the Respondent’s dismissal of the Applicant were:
-failure to adequately perform the customer account management functions of his role (especially regular communication, failure to submit reports, failure to quote, not returning emails, etc), resulting in tangible loss of significant custom and revenue for the company;
-failure to deal adequately with customer complaints, including ignoring customer emails and failure to escalate their concerns;
-failure to onboard new customers as required by the role;
-the inability to work autonomously in the execution of his employment duties;
-the inability and/or unwillingness to follow instruction; and
-showing a lack of engagement and commitment to the performance of his role to the best of his abilities.
The Respondent’s reasoning was based on direct feedback from customers as to their unhappiness with the service provided by the Applicant.
The Respondent submits that the reasons meet the requirements for validity as set out in Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333 (7 July 1995), (1995) 62 IR 371 at 373, specifically that they are sound, defensible and well-founded, as they are based on third-party feedback, actual customer loss and formal data which ultimately demonstrated that the Applicant did not have the capacity to perform the role.
The Respondent submits they did not offer the Applicant the opportunity to have a support person, however, s. 387(d) 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 per the Explanatory Memorandum to Fair Work Bill 2008. The Respondent states the Applicant did not request the opportunity to have a support person on 4 October 2022.
The Respondent submits that warnings were given to the Applicant. Concerns around the Applicant’s performance across two separate roles in the business were raised repeatedly to the Applicant both formally and informally over a 16-month period.
The Respondent states the Applicant was involved in five formal performance reviews during his employment where 3 formal warnings were given. The Applicant was offered in-house training and extensive support from his direct manager to assist with improving his performance. The Applicant’s final formal performance review was on 11 May 2022. This review was conducted in person and the Respondent explicitly stated that if the Applicant’s performance did not improve, his employment would be terminated.
Statement of Ms Chelsi Gale
Ms Gale is employed by the Respondent as the General Manager. Ms Gale submits that she had raised issues surrounding his performance as Branch Manager between 1 January 2021 and 19 May 2021 on multiple occasions. She raised concerns around the Applicant’s apparent inability to properly manage staff that reported to him in his role, his lack of organisation and planning for works were letting down customers. Ms Gale states she provided much support to the Applicant as possible to ensure that he could succeed in his role.
On 19 May 2021, a formal performance review was conducted between the Applicant Ms Gale and Mr Daniel Clark (Direct Manager). There were a series of issues raised by the Respondent which were:
-The staff that [Applicant] was responsible for we being mismanaged, specifically, their day to day tasks were not being set or communicated so personnel were standing around; when staff were communicated to, it was always at the last minute and Raymond Black (lead splicer) had made a complaint regarding this; [The Applicant] was consistently failing to provide management with weekly schedules of works as required so that the activities of the branch could be properly monitored; safety and paperwork requirements were not being enforced – head office was constantly chasing the Gladstone branch for their paperwork to be able to invoice, plus JSEA’s were not being completed for every job as required which is a huge breach of our safety policy.
-[Customer] has made complaints to Daniel Clark and Simon Smith about [the Applicant]’s lack of communication.
-New customer engagement was a key part of [the Applicant]’s role but he had failed to onboard more than 2 customers in 5 months.
-[The Applicant] was not effectively managing budget of the branch – consistent replacement of unnecessarily lost or damaged items (totalling approx. $15,000.00 to this point) and when asked for justification, [The Applicant] could not explain what had happened to the gear. The branch is also consistently running out of core materials (e.g. splicing materials, PPE) and it meant last minute run arounds were occurring at an unnecessary cost to the branch when it could have been avoided with proper management. Reports were not being submitted to management as required.
The Applicant stated that whilst he didn’t think he was doing a terrible job, he agreed that he was struggling with some elements of his role. Ms Gale asked the Applicant if he could perform the role and the Applicant replied that ‘if he was honest, he didn’t think so and if there could be some adjustment to the role that would assist’. The Applicant stated that he enjoyed the customer contact role and preferred it over his current role at that time.
The Respondent considered their options, and they would remove several responsibilities from the Applicant’s role which included the staff responsibilities and operational management the Respondent. The Respondent advised the Applicant that his wage would need to be reduced to reflect the additional resources needing to be put into Gladstone branch to effect this change, plus the reduction of core responsibilities and lack of direct reports. The Applicant agreed and his remuneration was decreased to $100k inclusive of super.
On 31 August 2021, the Applicant was given an informal verbal warning when Ms Gale observed a meeting involving a presentation with a prospective major customer. She had observed the Applicant to be unprepared and could not answer questions asked by the prospective customer. The Respondent commented to the Applicant that as this was his core role now that the business had made changes to his role, that he had no excuse to be so poorly prepared.
On 6 October 2021, a formal performance review was held regarding the Applicant’s performance, with issues arising from the presentation. The Applicant responded by admitting that that he did not have the skills necessary to prepare formal presentations and was not confident in preparing written introductory correspondence to customers. The Applicant said that the reason he spends so much time in the office is that he doesn’t know where to start with planning a sales trip and that he probably needs a bit of help. Ms Gale questioned why he didn’t raise this sooner, and he responded that he was waiting for Mr Clark to come up to site to which Ms Gale responded that was not the right thing to do and he was wasting time and resources by just sitting around waiting.
Ms Gale reiterated that his performance was substandard and that he needed to improve as soon as possible. Ms Gale emphasised that in his role he should be on the road 80% of the time due to the lack of work at that time.
The Applicant was directed to copy in his line manager Mr Clark to all email correspondence (both internal and external) so that Mr Clark could be well informed regarding the Applicant's work and ensure customer requests were being attended to promptly. The Applicant was also directed to provide updated call reports daily.
Ms Gale states that Mr Clark committed to assist the Applicant with writing quotes and that if the Applicant had questions or concerns that he should be proactive and contact Mr Clark. Ms Gale noted that it should not be necessary to manage the Applicant and that he should be able to operate independently given the role and his experiences in his role given the representations the Applicant made during the interview process. The Applicant committed to improve his performance straight away, saying that he could do the job.
On 6 December 2021, Ms Gale raised that the Applicant failed to attend work without notice and was uncontactable via his company provided mobile phone. Ms Gale also stated that the Applicant also failed to answer incoming customer phone calls to his company provided mobile phone. The Applicant called Mr Clark after lunchtime on that day and advised that he had typed his letter of resignation and would not be returning to work as he had been prevented from using the company vehicle allocated to him to travel from Gladstone to the Gold Coast and back. She noted that the Respondent has always been very clear that use of company vehicles for personal long trips need to be approved by a manager prior, and in this instance, we required the vehicle for planned work as she had previously told him when he initially requested to take the vehicle the day before the Applicant was due to depart. Ms Gale advised the Applicant that the conduct was unreasonable and unacceptable and it would not be tolerated. Ms Gale also told him that if it were to occur again, he would be dismissed.
On 14 December 2021, another meeting was held between the Applicant, Ms Gale and Mr Clark. The purpose of the meeting stated by Ms Gale was was to reset KPIs and formalise them so that the Applicant was very clear on the Respondent’s expectations and so that there was a pathway for the Applicant’s income to increase based on his performance in the hope that this would encourage improvement in the Applicant’s performance.
Ms Gale and the attendees worked through the KPI’s line by line and the Applicant was asked for his feedback on each, and whether he thought them to be reasonable. Ms Gale identified to the Applicant that his performance would sit below the requisite standard and made clear that the consequences of continued below standard performance could result termination. Ms Gale attests that after this process she asked the Applicant if he was satisfied with the KPIs, and the Applicant agreed. Further, Ms Gale asked if there was anything further that the Applicant needed from us to assist in meeting his KPIs. The Applicant requested more help with sales planning to which Mr Clark then provided an outline of sales call schedule.
Ms Gale committed to preparing a final version of the KPI’s and send them to the Applicant for his signature. Finally, Ms Gale asked the Applicant to make a commitment in not repeating the poor performance to which the Applicant stated that there would be no more issues like that.
On 11 May 2022, a review regarding performance was held. Ms Gale and Mr Clark worked through KPI document and identified the following areas in which the Applicant was not meeting his KPIs.
The Record of Meeting on 11 May 2022 state:
-Quarterly revenue target
-Revenue sources/NBD
-Call reports – still not being updated.
-Sales planning – no sales trips in the last 1.5 months
-Quotes still lacking despite being given all the relevant info.
-Customer account management – not going back to customers.
-Organisation of product and service – not being accountable for delivery or product and service to customers and not actively engaging with and communicating to operations to outline your customer needs and ensuring they are met.
-Communication – both internal and external is still lacking.
-Invoicing – very behind in his customer invoicing due to undertaking works without POs or failing to revise quotations when required and not doing job costings in a timely manner.
-Management directions are still not being followed – esp. not CCing Mr Clark as repeatedly requested. This has seen a few things fall between the cracks and not followed up. Bottom line you are not doing as you were asked.
Ms Gale said to the Applicant that this was the last time the Respondent would accept underperformance and if they are in this position again, his employment would be terminated as they could not keep coming back to the same things over and over.
Ms Gale asked if there was anything the Applicant needed from us and he responded, “I don’t think so, no”. Ms Gale further asked the Applicant if they are all on the same page, he responded yes.
In September 2022, Ms Gale states Applicant was given very negative feedback regarding customer opinions and that one of their clients would be engaging an alternative contractor to perform their conveyor works due to the issues they had experienced in dealing with the Applicant.
On 4 October 2022, Ms Gale had raised concerning feedback relating to a client to the Applicant. She stated that they were very unhappy with the Applicant’s service because he was constantly chasing them for quotes and plans, because the Applicant had declined to perform works for the client stating that the Respondent had other jobs. Ms Gale stated to the Applicant that this was incredibly serious as it constituted the loss of a major customer and huge revenue source. The Applicant was asked if he had anything to say, which he stated ‘he was not really sure’ and the Respondent stated to the Applicant they do not turn down work without operations and upper management sign off, and asked if he followed the process. The Applicant said no.
Ms Gale stated to the Applicant that this was another example where he was failing in his customer account management functions, and that he had also not onboarded any new customers. Ms Gale asked if the Applicant understood everything. She states the Applicant had stated to her that he ‘did not think it was that bad’. Upon further discussions regarding his work performance, Ms Gale stated that they could potentially utilise the Applicant in a site-based role but assumed it would not suit him because it would keep him away from his partner and his partner’s son. She raised this with Applicant, to which the Applicant did not want to take that role. The Applicant’s employment was terminated after this conversation. A termination letter was issued this same day.
Statement of Daniel Clark
Mr Clark is the Director of Operations with the Respondent and was the direct manager of the Applicant. He states that he travelled from Tasmania to the Gladstone branch for 1-to-2-week periods for the purpose of training and providing support to the Applicant approximately 12 times during the Applicants employment period. He states that the training consisted of teaching the Applicant how to plan sales trips, how to approach new business, product knowledge, how to quote and how to plan works.
In October 2021, Mr Clark instructed the Applicant to copy himself into all correspondence he had with both internal and external stakeholders as Mr Clark was concerned that he was not being truthful as to the frequency and content of the contact he was having with customers. Mr Clark wanted to ensure that customers were being looked after properly. Despite this instruction, the Applicant repeatedly failed to include Mr Clark into correspondence despite numerous follow up requests and further direct instructions during both formal and informal performance reviews.
In the 20 months that the Applicant was employed, he was unable to accurately quote basic belt jobs independently despite frequent interventions by Mr Clark and consequently Mr Clark was compelled to check every quote the Applicant prepared for accuracy and completeness.
Mr Clark was required to frequently intervene and resolve urgent issues with customers as the Applicant had not managed the relationship or had ignored the matter.
Mr Clark said that post the Applicant’s dismissal, he had followed up with a former large customer who had confirmed that they had taken their business elsewhere as a result of the Applicant’s poor service. Mr Clark claims that when the former customer was informed that the Applicant had left the Respondent’s business, he responded by saying “thank fuck you got rid of that idiot”.
Mr Clark estimated that the lost business as a result of the Applicants poor performance just with two customers was $637,000.
Evidence of Simon Smith
Mr Smith is the Operations Coordinator at the Gladstone branch of the Respondent. He recalls that in a meeting with a very large customer, he met with the Maintenance Planner who provided quite negative feedback regarding the Applicant’s lack of responsiveness and refusal to take on work that was offered. Consequently, the client had sourced product and service from a competitor business. Mr Smith was surprised as he was unaware that the Respondent had turned down work as a standing instruction and was work that was refused that upper management be involved. He had never heard that there had been a refusal to provide services to this major customer considering it was the largest one in the region by a large scale.
The witness also attested to the fact that another person from the same client also was experiencing difficulties with contacting the Applicant and how the Applicant managed the contract. He further attested that the Applicant often left work early and that he was not able to be contacted by the witness during business hours.
Applicant’s evidence
The Applicant submits that there were no issues regarding poor work performance and states the Respondent’s claims are a total fabrication. He states that he was dismissed due to not going away to a position in the US.
The Applicant denies being aware of performance or behavioural issues, claiming he has always behaved professionally and respectfully and has received only positive feedback from his managers. He asserts that allegations that he had a lack of interest in his employment were not substantiated or discussed prior to the inclusion in the show cause notice.
The Applicant claims he was bullied by the Respondent and that they were not honest in his dealings with himself. The Applicant states that he was threatened to be fired by Mr Clark, instructed and consequently threatened to copy in Mr Clark and Ms Gale into all emails by Mr Clark.
The Applicant stated that he commenced working with the Respondent on 1 January 2021 as a Branch Manager and that he worked full-time with a rate of pay of $60.72 per hour.
On 27 May 2021, the Applicant asserts his pay rate was reduced to $46.21 per hour and the reason given was that he was not meeting targets which he claims he never knew about. On 4 August 2022, his pay rate was changed again to $54.95 per hour and the reason given was that he was now meeting targets. He further contends that he held a variety of positions during his employment with the Respondent which included Branch Manager, State Manager, Operations Manager and North Queensland Business Development Manager. He states that he often assisted in the field with repairs and changeouts due to the lack of staff.
He claims that the business vehicle that was available was taken off him occasionally as a disciplinary matter. He notes that he was paid an away from home allowance of $50 per day but notes that this was no longer paid after January 2022.
On 4 October 2022, the Applicant states Mr Clark asked the Applicant to go outside of the office and was asked if he still wanted the USA position to which he replied yes. Mr Clark then asked if he would be happy to go to Emerald on a permanent basis, Monday – Friday at a site which had just signed up. Mr Clark offered the Applicant to do this for less money, namely $50 per hr to which the Applicant replied no due to his son’s condition.
The Applicant found work 2 weeks after his dismissal.
Consideration
Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[3]
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
To be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[4] and should not be “capricious, fanciful, spiteful or prejudiced.”[5] When determining if there was a valid reason for a dismissal, the Commission must be satisfied that the evidence before it demonstrates that the employee engaged in the alleged conduct. It is not sufficient that the employer reasonably believed, after sufficient inquiry, that the employee was guilty of the conduct. [6] Rather it must be proved, on the balance of probabilities. If that is established, the Commission must then assess whether the conduct was of sufficient gravity or seriousness to justify dismissal as a sound, defensible or well-founded response.[7]
The Commission is not limited to the reason relied on by the employer.[8] Neither is the employer limited solely to the reason given to the employee at the time of the dismissal to establish a valid reason for a dismissal. That said, relying on other reasons may have implications for the considerations in s. 387 going to procedural fairness.[9]
The reasons given by the Respondent for the Applicant’s dismissal at the time, were his:
a)Poor customer service leading to the loss of a major customer and a huge revenue source.
b)Had turned down work without senior management sign off.
c)Not following correct procedure regarding the item above
d)Ongoing failure in customer account management, specifically ignoring customers and not communicating internally.
e)No new customer sourced by the Applicant (he was responsible for business development)
f)displayed disengagement over the loss of a major customer.
g)There had been frequent formal and informal performance feedback sessions over the past 18 months regarding the same issues of poor work performance.
The Respondent considered an alternative role for the Applicant. However, this would require the Applicant to be away from home and the Respondent understood that this would not work for the Applicant.
The evidence before me suggested that the Applicant was someone who became disengaged from their workplace and was not performing as an employer might reasonably expect. There had been a series of formal reviews of performance to which the Applicant denied receiving any feedback. However, the Respondent’s witnesses were clear in their evidence and testimony that the business had been providing feedback and had made adjustments to the Applicant’s role to better align with his capabilities and add value to the business.
The Respondent had a valid reason for summarily dismissing the Applicant. The Applicant had been warned on numerous occasions regarding his poor. When it was discovered by the Respondent that the Applicant caused a significant financial loss to the business, the Respondent had valid grounds to summarily dismiss the Applicant.
Throughout this process, the Applicant has sought to minimise, deny or divert attention from each of the matters raised by the Respondent. The observations of each of the Respondent’s witnesses was compelling and persuasive with respect to the Applicant’s quality of work, interactions and teamwork. I am satisfied that when looked at collectively, the performance issues constitute a valid reason for dismissal.
Was the Applicant notified of the valid reason?
I am satisfied that the Applicant was notified of reason for termination which related to his performance. I accept Ms Gale’s evidence that the Applicant was provided feedback both formally and informally prior to the final meeting in October 2022 and that the Applicant was put on notice at that meeting that something needed to change.
Ms Gale put the issues to the Applicant on multiple occasions. I am also satisfied that the meeting on 4 October 2022 outlined the reasons for which the Respondent was then considering termination of the Applicant’s employment.
Was the Applicant given an opportunity to respond to any valid reason?
I am satisfied that the Applicant was given an opportunity to respond to the reasons provided at the meeting of 4 October 2022. Ms Gale went through all the issues and invited the Applicant to verbally make a response. He provided no cogent reason as to why he had continually not met the requirements for the role.
Support person
The Applicant was not informed that he could have a support person. The Applicant did not request a support person to be present nor was he refused a support person.
Was the Applicant warned about unsatisfactory performance before the dismissal?
As I have set out above, the Applicant submits that he was not warned about his unsatisfactory performance before the dismissal. The Respondent contends he was.
I am satisfied that Applicant had been made aware of the gaps in his performance in a series of meetings over the course of his employment numerous times. The role had been modified and he still did not meet the requirements for the role.
The Applicant chose to ignore or downplay all the work performance issues raised which does not assist his case. In such a small team where everyone’s work is intrinsically linked, underperformance of one employee is noticeable and can have a significant and direct impact on others, as well as on the team’s overall productivity and performance. It seems the Applicant – deliberately or not – ignored the cues being provided to him about his performance.
I am satisfied that the Applicant was warned on numerous occasions formally and informally regarding his poor performance before he was summarily dismissed.
Size of the Respondent’s Enterprise (s.387(f)) and Presence of a Human Resource Specialist (s.387(g))
It is not in dispute that the Respondent is a business that lacks dedicated human resource personnel. In spite of this, the Respondent undertook several performance reviews that were well documented and directed at improving the Applicant’s performance.
What other matters are relevant?
I have had regard to the fact that the Applicant had, at the time of the hearing, found new employment. The Applicant states that he was able to find employment 2 weeks after his dismissal.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
I am satisfied that the poor performance of the Applicant and numerous warnings about his performance justifies the termination of the Applicant’s employment. The Respondent attempted on numerous occasions to assist the Applicant to perform his role which included reducing the scope of the role to help the Applicant focus upon the tasks that he felt he had more capability. Despite this, the Applicant continued to underperform in the role and the Respondent had terminated the Applicant after the underperformance led to a loss of a significant client.
Consequently, for the reasons outlined above, I am not satisfied that the Respondent’s dismissal of the Applicant was harsh, unjust or unreasonable.
Accordingly, I order that the application be dismissed.
DEPUTY PRESIDENT
[1] Fair Work Act 2009 (Cth) s.394.
[2] Ibid s.396.
[3] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, at [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), at [69].
[4] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333 (7 July 1995), (1995) 62 IR 371, 373.
[5] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333 (7 July 1995), (1995) 62 IR 371.
[6] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
[7] Bista v Glad Group Pty Ltd[2016] FWC 3009; Turvey v Roverworth Pty Ltd [2021] FWC 4593 at [67].
[8] Heran Building Group Pty Ltd v Anneveldt[2013] FWCFB 4744 at [15] per Acton, SDP, Sams DP and Hampton C citing MM Cables (a Division of Metal Manufacturers Ltd v Zammit AIRC (FB) S8106 17 July 2000; Turvey v Roverworth Pty Ltd [2021] FWC 4593 at [67].
[9] Turvey v Roverworth Pty Ltd [2021] FWC 4593 at [67].
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