Julie McCabe v Tasak Pty Ltd

[2019] FWC 5406

[2019] FWC 5406

FAIR WORK COMMISSION

EX TEMPORE DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Julie McCabe
v
Tasak Pty Ltd
(U2019/4916)

COMMISSIONER PLATT ADELAIDE, 2 AUGUST 2019

Application for an unfair dismissal remedy.

[1] The following decision, now edited, was issued during proceedings conducted on 2 August 2019.

[2] Ms Julie McCabe has lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of her employment with Tasak Pty Ltd T/A Sprint Auto Parts Two Wells (Tasak), which her Form F2 - Unfair Dismissal Application advised took effect on 11 April 2019.

[3] On 7 June 2019, Tasak lodged a Form F3 - Employer Response, which indicated that it was a small business and that the dismissal was consistent with the Small Business Fair Dismissal Code. The Form F3 included a detailed account of the reasons for termination, a copy of the Small Business Fair Dismissal Code checklist, and a copy of a document titled ‘Termination of your employment’.

[4] The matter did not resolve at conciliation and was allocated to my Chambers.

[5] On 1 July 2019, a Directions conference was conducted. Ms McCabe represented herself, Tasak was represented by the Motor Trade Association of South Australia (MTASA). Directions were issued for Ms McCabe to file her material on 11 July and for Tasak to file its material by 18 July 2019. Any material in reply was to be received by 25 July 2019. The hearing was listed for 9.30am on 2 August 2019.

[6] The parties complied with the Directions and served the material by email to the parties registered email addresses and to the Commission. In addition Tasak provided copies of ostensibly relevant CCTV footage on a USB Drive.

[7] At 12.27pm on the day before the hearing Ms McCabe sought that the hearing be adjourned based on the time frame in which to file the documents. Ms McCabe acknowledged that she received the CCTV footage on 19 July, but contended that she did not receive the witness statement until 31 July 2019 ‘for some unknown’ reason. Ms McCabe asserted she did not have time to prepare for the allegations made against her and to prepare documents. Ms McCabe advised this was due in part to her ‘working situation’.

[8] A review of the file indicated that the email address used by to send material to the Applicant was the same as used by the Commission, and the Applicant in her correspondence, and that the email had been sent on 18 July 2019 at 11.52am. No issue as to the compliance with Directions had been previously raised by Ms McCabe.

[9] Tasak objected to the adjournment application.

[10] The adjournment application was refused due to its proximity to the hearing, the lack of explanation as to why Ms McCabe did not receive the material that had been provided, and that no issue as to receipt of materials has been received prior (noting that the material alleged not to have been received was due on 18 July).

[11] Ms McCabe did not attend the hearing at 9.30am. My Associate sought to contact her by telephone and left messages, and again tried to contact Ms McCabe just before 10.00am.

[12] The hearing commenced just after 10.00am in Ms McCabe’s absence. Mr Coppola from the MTASA represented Tasak.

Evidence

[13] Ms Susan Lange submitted a statement 1 and gave evidence. Her evidence is summarised as follows;

•  Her husband Mr Tony Lange is the sole Director of Tasak.

•  Tasak operates a retail premise at Two Wells for two businesses: Sprint Auto Parts and Lange Auto. The total number of employees as at 11 April 2019 was 7 or 8.

•  Ms McCabe was one of those employees and was a sales assistant.

•  On 8 April 2019 she received information which lead her to believe that Ms McCabe had incorrectly completed a transaction concerning a ‘Narva globe’ sold for $4.95. She spoke to Ms McCabe about the transaction but was not satisfied with the answer.

•  Ms Lange determined to review the CCTV footage at the shop.

•  Ms Lange observed a number of actions taken by Ms McCabe which led her to believe that Ms McCabe was stealing from the shop. These instances occurred on 4, 5 and 8 April 2019, and included failing to promptly place money in the till, not recording sales, removing cash from the till, consuming an iced coffee without paying for it, not placing cash in the till correctly and an allegation that the unrecorded cash was subsequently removed.

•  Ms Lange reviewed the sales records which she found did not record the sale of a number of items which were shown to be sold on the CCTV footage. Despite this the till balanced when it should have been up. This added to Ms Lange’s suspicion that Ms McCabe was not recording sales and removing the corresponding amount of money from the till(s).

•  Ms Lange spoke with her husband and determined that in the absence of a satisfactory explanation, Ms McCabe had been acting dishonestly.

•  Ms Lange interviewed Ms McCabe on 11 April 2019 and discussed the transaction and showed her some CCTV footage. Ms Lange was not satisfied with the explanation given by Ms McCabe.

•  Ms Lange instantly dismissed Ms McCabe, completed a Small Business Fair Dismissal Checklist 2 and reported the matter to the Police.3

•  Ms Lange prepared a letter of termination 4 but did not immediately send it to Ms McCabe as she did not have the correct postal address.

[14] Mr Tony Lange provided a statement 5 and gave evidence. His evidence corroborated the evidence of Ms Lange. He also formed the view that Ms McCabe had been stealing from the business.

[15] Tasak contended that Mr and Mrs Lange had conducted a proper investigation and had reasonable grounds to suspect that Ms McCabe’s conduct was sufficiently serious to justify immediate dismissal (in particular that Ms McCabe had engaged in theft). Ms McCabe had been given an opportunity to explain her action and that evidence of the compliance with the Code (in the form of a checklist) had been provided. Tasak contended I should find that the Small Business Fair Dismissal Code had been complied with and that I should dismiss the matter pursuant to s.385(c) of the Act.

The legislation

[16] Section 23 of the Act defines “a small business employer” as an employer who, at the particular time, employed fewer than 15 employees.

[17] Section 385 of the Act sets out what the Commission must be satisfied about for a person to be found to have been unfairly dismissed. Section 385 of the Act is set out below.

“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.”

[18] The Small Business Fair Dismissal Code (the Code) is set out below.

“Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[19] As will be seen below the definition in the Fair Work Regulations2009 of serious misconduct is also relevant and this is set out below.

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

Consideration

[20] The evidence is that immediately before Ms McCabe’s dismissal, Tasak had 7 or 8 employees. Consequently I find that at this time Tasak was a small business employer.

[21] The next issue to be considered is whether or not Ms McCabe’s dismissal was consistent with the Code.

[22] If Ms McCabe’s dismissal was consistent with the Code, then because of section 385(c) of the Act she cannot have been unfairly dismissed. If Ms McCabe’s dismissal was consistent with the Code, the Commission does not need to consider any other matters and the Commission must find that she was not unfairly dismissed.

[23] In the decision of TIOBE Pty Ltd T/A TIOBE v Cathy (Yaqin) Chen 6 a Full Bench of the Commission considered the operation of the Small Business Fair Dismissal Code, the Commission confirmed that,

“[24] It is necessary to first consider whether the dismissal was consistent with the Code before turning to deal with the issue of whether the dismissal was unfair.”

[24] The Full Bench continued on to consider how the summary dismissal section of the Code is to be applied by the Commission,

“[30] The first issue that fell for determination in the subsequent appeal was whether Mr Ryman’s dismissal was of a type to which the ‘Summary Dismissal’ section of the Code applied. At the outset the Full Bench observed that ‘this issue is not easy to resolve because the Code generally, and this section of the Code in particular, is very poorly drafted’. After detailed consideration of the legislative provisions and their context the Full Bench concluded that the ‘Summary Dismissal’ section of the Code applies to dismissals without notice on the ground of serious misconduct as defined in regulation 1.07. The Full Bench then concluded:

‘To be clear, nothing stated above is to be taken as suggesting that in relation to such a dismissal it is necessary for the Commission to be satisfied that the serious misconduct which is the basis for the dismissal actually occurred in order for the dismissal not to be unfair. As was explained in Pinawin T/A RoseVi.Hair.Face.Body v Domingo:

“[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.”

Whether the employer had “reasonable grounds” for the relevant belief is of course to be determined objectively.

In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:

(1) If a small business employer has dismissed an employee without notice - that is, with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.

(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.

In this case, Mr Ryman’s dismissal occurred with immediate effect - that is, without the provision of any actual notice - on the ground of serious misconduct. The fact that he was paid an amount said to be in lieu of notice, or that the dismissal occurred some days after the conduct to which it related, does not alter the position in this respect. His dismissal therefore fell to be considered under the “Summary dismissal” section of the Code in accordance with the Pinawin principles. There was no error on the part of the Commissioner on this issue.’

[31] The decision in Ryman was applied in Gainbridge Limited v Mrs Diane Wiburd, in which the Full Bench said:

‘The proper inquiry raised by the Code is relevantly, whether at the time of the dismissal the employer genuinely believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. The Code focusses attention on the employer’s belief which must be based on reasonable grounds, not on whether the employee’s conduct as a matter of fact and law justified immediate dismissal.’” (References omitted)

[25] In this case there is no doubt that Tasak dismissed Ms McCabe without notice and with immediate effect.

[26] Tasak dismissed Ms McCabe on the grounds that she committed serious misconduct and consequently it is necessary for the Commission to consider whether this dismissal was consistent with the “Summary Dismissal” section of the Code.

[27] The first matter I need to determine is whether Tasak genuinely held a belief that Ms McCabe’s conduct was sufficiently serious to justify immediate dismissal. Secondly I need to determine if Tasak’s belief was, objectively, based on reasonable grounds.

[28] The evidence of Mr and Mrs Lange support a positive finding in respect of these two requirements.

[29] In all the circumstances of this case I am satisfied that the dismissal of Ms McCabe was consistent with the Small Business Fair Dismissal Code. Consequently as a result of section 385(c) of the Act, Ms McCabe cannot have been unfairly dismissed.

[30] I uphold Tasak’s jurisdictional objection. This application is therefore dismissed and an Order to that effect has been issued in conjunction. 7

COMMISSIONER

Appearances:

No appearance of the Applicant.

Mr Coppola (MTASA) on behalf of the Respondent.

Hearing (Conference) details:

2018.

Adelaide:

August 2

Printed by authority of the Commonwealth Government Printer

<PR710988>

 1   Exhibit R1

 2   Exhibit R2

 3   SAP 1900 8661 dated 11 April 2019)

 4   Exhibit R3

 5   Exhibit R4

 6   [2018] FWCFB 5726.

 7   PR710974.