Karen Sommers v Dawson Media Pty Ltd t/as Pink Pages
[2014] FWC 6179
•8 SEPTEMBER 2014
| [2014] FWC 6179 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Karen Sommers
v
Dawson Media Pty Ltd t/as Pink Pages
(U2014/3985)
DEPUTY PRESIDENT SAMS | SYDNEY, 8 SEPTEMBER 2014 |
Application for an unfair dismissal remedy - poor sales performance - three warnings over a one month period - mixed messages from the employer - no valid reason for the applicant’s dismissal - serious concerns with the employer’s conduct and processes - dismissal ‘harsh, unreasonable and unjust’ - reinstatement inappropriate - compensation ordered.
[1] Ms Karen Sommers (the ‘applicant’) was employed by Dawson Media Pty Ltd t/as Pink Pages (the ‘respondent’) from 8 March 2010 until 1 November 2013. The applicant was employed as a Telephone Sales Consultant on an annual salary of $52,000 pa. She was dismissed following a series of written warnings issued to her for poor performance in the month of October 2013. A letter dated 1 November 2013, indicated that the applicant was summarily dismissed (see para [21]; although it seems the applicant received payments in lieu of notice.
[2] The applicant filed an application for a remedy from unfair dismissal, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) on 22 January 2014. As the application was filed outside of the 21 day time limit prescribed by s 394(2) of the Act, an application was made and granted by SDP Drake on 16 April 2014 to extend the time for filing the application to 22 January 2014.
[3] In the Employer’s Response to the application (Form F3), the reasons for the applicant’s dismissal were summarised as follows:
‘1. Karen’s performance to budget was well down on the company’s average in her last six months:
Annual sales: Karen 61% Company 90%
Recurring Sales: Karen 58% Company 83%
2. Karen’s attitude was very poor even after extensive counselling which could not be tolerated from the senior most member [sic] of the team.
3. Karen’s budget (annual and recurring) was reduced to reflect her three day working week.’
[4] As there had been no conciliation of the matter, I undertook a conciliation with the parties at the beginning of the hearing on 9 July 2014. Unfortunately, the matter could not be settled and the application proceeded to arbitration.
[5] At this point, I do not apprehend there to be any other jurisdictional objections to the matter proceeding to arbitration. Specifically, I am satisfied that the applicant was a person protected from unfair dismissal (s 382) in that:
a) she was dismissed at the initiative of the employer (ss 385(a), 386);
b) she was a national system employee and the respondent is a national system employer (ss 380, 13, 14);
c) the applicant was not covered by an Award or an enterprise agreement and her income was not above the high income threshold (s 382(b));
d) the applicant’s employment met the minimum employment period (over three years) (ss 382(a), 383);
e) the respondent is not a small business as defined (29 employees) and not subject to the Small Business Fair Dismissal Code (ss 396(c), 388).
f) the applicant’s dismissal was not a case of genuine redundancy (ss 396(d), 389).
THE EVIDENCE
[6] The applicant was the only person to give oral evidence in the proceeding, though I note that the respondent, through its Director, Mr W Dawson, filed extensive material - albeit not in proper form.
For the applicant
[7] In her written statement, the applicant claimed that she has a high level of experience in sales roles, having worked as a Photographer, Field Representative and in various other sales and administration roles. She was employed by the respondent in March 2010 as a Telephone Sales Consultant, which involved selling advertising in the Pink Pages by ‘cold-calling’ potential clients. She described her performance as ‘very good’, adding that she often worked through her breaks and after hours.
[8] The applicant explained that she had been offered a position by the NRMA in 2011 in telesales. She decided to give the respondent one month’s notice, despite only being required to give two weeks. When she did so, a Manager, Ms Faye Hudson, said that the respondent was willing to match any salary offered by NRMA as the respondent did not want to lose a good salesperson. She agreed to remain employed by the respondent and her salary was increased from $42,000 to $52,000.
[9] Throughout her work with the respondent, the applicant was required to set out the differences between Annual and Recurring Sales as follows:
- Recurring Budget is ongoing monthly amounts need to be paid by the client every calendar month. The reduction was made by only $10 however I achieved this.’
‘ Annual is the amount a client would pay in 1-6 instalments or in one go, if paid upfront a 5% discount is offered. The Amount I was required to sell varied month to month. I had 3 days in the week to make target set for that month.
[10] On or about 28 February 2012, the applicant sustained an injury to her left shin and both knees when she fell while exiting the car park and walking to the building in which she worked. She filed a workers’ compensation claim, but did not take time off work. When she attended the doctor’s surgery, her right knee collapsed. She was scheduled to have surgery on the knee in November 2012, but the insurer insisted that she should continue pain management as recommended by a physiotherapist. This caused her to take time off work and then to reduce her working days.
[11] At some point around August 2013, the applicant noticed that Ms Hudson would give her ‘cold stares’ and another unnamed employee had said, ‘Faye doesn’t like you anymore.’ The applicant had noticed that things on her desk had been rearranged. As Ms Hudson had just been at the applicant’s desk, she asked her why it had been rearranged. Ms Hudson had yelled across her desk that if she did not like it, she could leave. When she asked Ms Hudson why she had said this, Ms Hudson ignored her.
[12] The applicant was moved to another desk at the back of the room. She claimed that this desk was known as the ‘departure lounge’ as many employees were terminated after being relocated there. She used a printer next to that desk, but another employee unplugged it, even though it had been plugged in for 14 months previously. Ms Hudson had told her she had no right to use that printer. The applicant said that she was using a walking stick at the time and she had complained that the phones and computers were regularly not working.
[13] The applicant recalled a conversation with a former colleague, Ms Kaye Wallace, who had been dismissed several months prior. Ms Wallace said that when she had been ‘fired’, Ms Hudson had told her that she, the applicant and two other employees were also ‘going’. Ms Wallace had also sustained a workplace injury.
[14] The applicant received her first ‘Performance Warning’ from Ms Hudson on 4 October 2013, which set out that her ‘achievements are well below the level required to maintain your position as a Telesales Account Manager’ in relation to the July-September 2013 quarter, even after taking into account that her budget had been reduced due to her reduced working days. Ms Hudson went on to criticise the applicant’s approach as follows:
‘I believe that you have the ability to improve the recent statistics and as suggested perhaps a ‘back to basics’ approach will help. Please take the time out to listen and allow your prospects take part in the sales process instead of doing all the talking during your abnormally long conversations. The other trend that I have noticed and mentioned previously, is your tendency to do a complete presentation knowing that you are not talking to the decision maker expecting them to pass on the entire conversation to the right person. This is a complete waste of time and impacts on your time management.
A 2nd review of your performance will take place on Monday 14 October 2013 where we will discuss your success and achievements for the month to date.’
[15] The applicant was confused, as she had been told the week before receiving this notice that the reason she had been moved, was because she did not require supervision. Ms Hudson had also told her that she was a good worker in the presence of her Rehabilitation Officer, Ms Shannon Mahoni.
[16] After the scheduled meeting held between herself and Ms Hudson on 14 October 2013, the applicant responded at length by email. She disputed Ms Hudson’s figures and complained that while the respondent had taken planned absences into account when developing budgets, it had not taken into account an absence of 3½ weeks when she was ill with pneumonia. She expressed her confusion as to Ms Hudson’s suggestion that she take a ‘back to basics approach’ with her sales, as she had previously been praised for her sales approach.
[17] In response to an assertion that she had been ‘borderline argumentative’ with some potential clients, she acknowledged that getting constant rejections could perhaps make her come across as desperate, but she did her best to treat all clients ‘respectfully and with a smile in my voice’. Rather than simply saying that she was receiving insufficient feedback, she had suggested that monthly one on one meetings in relation to KPIs should take place. The applicant apologised if a question she had asked about the number of warnings required before termination had been misunderstood, but she had never been subject to this kind of process before.
[18] The applicant outlined her history with the Company, her offer from NRMA and emphasised her efforts to to do a ‘good job’. Examples of her work had been used to assist other staff, including Ms Hudson. The applicant conceded that she was not ‘performing at 100%’. While her pain management made it difficult, she did not want to blame her performance just on her medication or her knee, but she ‘felt helpless not knowing what to do now.’ She did not feel that her performance was particularly different, apart from her reduced hours. In further oral evidence, the applicant claimed that not all staff met their annual budgets.
[19] The applicant received correspondence from Ms Hudson on 14 October 2013 as follows:
‘Karen
As discussed during your 1st formal review/warning meeting on 4 October 2013, our scheduled meeting today is to further talk about your achievements for the month to date for your modified October budget.
Close of business today represents your 5th working day of a 12 day month which equates to 42% of the available time used.
Your achievement to your modified annual budget to date is 23% and 135% to budget for your modified recurring budget.
You have achieved your recurring budget which is very pleasing; however your annual budget is behind by 19 percentage points and given your senior status in the sales team remains well below the level required for you to maintain your position as a Telesales Account Manager.
During our last meeting re your performance, one of your responses was to say that you had been sick during September and had therefore taken additional time off in excess to your already scheduled reduced hours. I explained to you that from a company budgeting prospective [sic], we are able to modify/reduce individual to reflect any planned absences ie annual leave etc, I also clarified that individual budgets can’t be further reduced to reflect unplanned absences. This is standard business practice. I also reiterated that your performance had been reviewed over the 3 month period from July - September 2013 which represents the conclusion of the 1st quarter of the 2013/2014 financial year not just a single month.
You also responded by saying that you didn’t feel as though you were being given any help or feedback. I reminded you that I had spoken to you on numerous occasions about your extraordinarily long sales presentations having listened to recorded phone calls and had suggested a ‘back to basics’ approach. I had also suggested prospecting for basic telephone sales and not to continue over complicating the telesales process by sending email proposals for maximum priced packages which are traditionally difficult to close over the phone and challenging to renew at the end of the contract. I also reminded you that you were given an equal number of warm sales leads generated from our website as the other team members and that in fact over recent weeks had been given a disproportionate number in your favour which you acknowledged was correct.
The only other response you offered was that you hadn’t been given any information about other team members’ achievements in comparison to your own. I reminded you that the Sales Leader Board was updated every month and that there were 6 x A3 copies posted visually around the office for all to see. I also reminded you that every team member’s month to date figures including their budget to go figures were displayed on the sales whiteboard every day of the month.
I was very disappointed that at the conclusion of our last meeting you asked how many warnings you had to be given before you would be terminated. I answered you by saying that I was hoping not to have to continue the legal warning process and that I was looking forward to you approaching your position armed with valuable advice and with renewed enthusiasm. I advised you that the company was required to provide 3 warning notifications if employee performance continued to present below the required level. This cut and dried answer was one you were keen to know.
I have again monitored your recorded phone calls and find that you are continuing to do all the talking and not allowing your prospects to be part in the sales presentation bordering on being argumentative. This practice is obviously not proving to be successful and is an issue we have spoken about several times. You are still tending to present to the wrong person and as we’ve discussed, this is a waste of your valuable time. Please go back to basics as was suggested and take the time to listen for they buying signals instead of talking over the top of your prospects.
I strongly believe you have the ability to improve your sales performance by utilising both your sales expertise and the structured feedback you have been given and by concentrating on a more positive attitude and less defensive stance.
A 3rd and final review of your performance will take place on Monday 21 October 2013.’
[20] After further meetings held on 18 and 25 October 2013, Ms Hudson forwarded correspondence (the third written warning) to the applicant in the following terms:
‘Karen
Today’s meeting is a follow up to our previous meetings on 4 October 2013, 14 October 2013 and 18 October 2013. This meeting was due to be held on 21 October 2013, but wasn’t held due to me conducting a late interview at your shift finish time. I haven’t been able to hold this meeting earlier as this is the first time you’ve attended the office since 21 October 2013.
It was bitterly disappointing that you did not attend the company’s Road Show event on Wednesday 23 October 2013 as this was a major pre-planned event involving all employees of Dawson Media Pty Ltd. I’m aware that you had a doctor’s appointment at midday on that day and although I explained to you the importance of your attendance you stood adamant that you would not be attending. I feel that your decision not to attend after your appointment demonstrated a complete lack of interest in your position and the company’s strategies moving forward.
I mentioned to you on 21 October 2013 that it was pleasing to note that you had retained your two renewal customers which are included in your October budget bringing your annual sales budget closer to attainment.
As at start of business today your annual target stands at 59% and your recurring target remains at 135%.
We have listened to 3 recorded presentations today and it is clear you are not using the ‘back to basics’ approach that I asked you to use. Instead you are still doing all the talking and not allowing your prospects to join the conversation. You aren’t asking any questions to engage the prospect and you are delivering incorrect information. Your performance will be reviewed at the end of the month however I will be monitoring your recorded presentations. It is mandatory that you abide by company policies regarding sales scripts and the delivery of truthful information. Failure to do this will result in serious consequences.
I am depending on you as the most senior member of the sales team to achieve your October budget by close of business on 31 October 2013. Should you fail to accomplish your budget you leave me with no choice other than to ask you to seek alternative employment.
A review of your performance will take place on Wednesday 30 October 2013 as this is the final day you will be working to achieve your October budget.’
[21] The applicant complained that throughout her performance review, a sale that would have put her over her budget was ‘stopped’ by Ms Hudson. Ms Hudson had said that because her performance was being reviewed, she needed to get an upfront payment. This was the first time she had heard of this requirement. On 31 October, there were significant issues with the phones and computers, though she was told that any sales she made that day would be counted. She had made two sales, but Ms Hudson disallowed one of them. If it had not been disallowed, the applicant believed she would have reached her targets. On 1 November 2013, the applicant was handed an email as follows:
‘As stated during our meeting dated 25 October 2013 and also in your written warning of that same date, your continued employment with Dawson Media Pty Ltd was dependant [sic] on you achieving your modified October 2013 Budget by adhering to company sales presentation policies. This budget has an annualised shortfall of $1056. You have exceeded the recurring component of your monthly budget however company policy regarding budget achievement requires both components of the budget to be met. This policy has been in place since the introduction of our website in 2002.
We conducted our final review meeting on 30 October 2013 which was your last scheduled working day for the month. As you still had a shortfall of $1056 I recommended you continue to make sales on Thursday 31 October 2013 as this was the official month end date. I suggested you take any leads/follow-ups home with you to give you a further opportunity to make up your October shortfall.
I have spent many hours at your request monitoring your calls and giving you feedback on a call by call basis. I have repeatedly asked you to use a ‘back to basics’ presentation as your sales presentations are very long and complicated with irrelevant content making your sales calls ineffective. You asked me to provide you with a back to basics script and to continue to give you feedback. I provided you with the company’s new business script taken from the sales training manual and asked you to use it as your guide.
My constant monitoring revealed that you were using the script introduction but that you persisted to disregard the company sales proposal policies given to you and continued to add irrelevant content including instigating discussions regarding Google, other search engines and directories and irrelevant references to the Pink Pages re marketing adverts appearing on various other websites.
Again I counseled you regarding your refusal to follow my instructions and you retaliated by saying that there is a line in the provided script that you were struggling with which forced you to go off on a tangent. I referred to your vast years of sales experience and suggested that you work around that particular sentence and continue on with the company’s sales proposal policies.
You then complained that you were the only sales person on the floor being counseled regarding sales presentations and performance. I reminded you that you had asked for individual attention and training which is why you are being given singular training and assistance.
Your previous sales success has regrettably declined with only 2 completed budgets being achieved in the 2012-2013 financial year and not a single budget achieved in the 4 months to date in the 2013-2014 financial year. The last monthly budget you achieved was in February 2013.
Despite my patience regarding your poor performance, you continue to display a defensive negative attitude towards the Pink Pages product and the company in general. As the most senior so the sales team, a status that is reflected in your team authority, this attitude and your resolve to manipulate advice and assistances in an attempt to exonerate your behavior and poor performance can no longer be tolerated.
Your position as a Telesales Account Manager is terminated effective immediately.’
[22] The applicant was strongly of the view that the real reason for her termination arose from the fact that she was required to work reduced hours and that she was an injured employee.
[23] The applicant complained that after she had asked for help from Ms Hudson in her letter on 14 October, she was simply told to ‘Work with the tools you’ve got. Go back to basics.’ She also said that not being able to talk about internet search engines, particularly Google, made her job difficult. She had tried to use a ‘back to basics’ approach, which was essentially following a script. However, this approach was often ineffective, as it did not allow for questions from the customer or spontaneity. She was also confused that scripts and presentations that she had created were being circulated to other staff for their use. On one occasion, when other employees had complained that prospective clients kept hanging up on them, Ms Hudson had said words to the effect of ‘Well, why don’t you use what Karen does, try to talk to them.’ She believed that this was inconsistent with being told to shorten her approach and she had felt panicked. She had never been told that she was ‘borderline argumentative’ prior to October 2013.
[24] The applicant said she was shocked at the reference in the email of 25 October 2013 to her failure to attend the respondent’s Road Show on 23 October. A specialist’s appointment had taken months to get and she had notified the Company’s accountant one month earlier, when she herself had been notified of this appointment. While the appointment had been at 12:00pm, she did not get in until after 1:15pm. She had called Ms Hudson to tell her that she was delayed and Ms Hudson had told her not to worry. She left the specialist’s office at 4:00pm and then went to her General Practitioner. She arrived home at 5:00pm. When she spoke to Ms Hudson later, Ms Hudson had told her that she had no excuse and that the event had been organised around her availability.
[25] The applicant deposed that when she asked Ms Hudson why they could not engage in one on one ‘KPI meetings’ or something similar, she was told that that was what the public sales charts were for. She asked for feedback on specific recordings, but was never told she was doing anything wrong, except when she received the correspondence from Ms Hudson. She denied displaying a defensive or negative attitude towards the respondent or Pink Pages generally.
[26] The applicant complained that the respondent had never raised concerns about her own small business, known as StarKatz Photography, until after she lodged this application. The business had started as a hobby and moved into weekend business. She had actually taken photographs for the respondent’s advertisers, but she had never handed out her own business cards to the respondent’s customers, despite Ms Hudson suggesting she do so.
[27] The applicant said that the respondent had never raised any concerns as to her efforts in relation to her rehabilitation programme. Nor did the respondent raise any concerns as to her jury duty attendance until this proceeding. The applicant said that she was waiting until after her surgery to resolve her health issues before looking for further work.
[28] In cross examination, the applicant did not dispute the sales figures shown to her that demonstrated that between November 2011 and April 2012, she had achieved 96% of budget, between May 2012 to October 2012, she had achieved 85% of budget and between November 2012 and April 2013 (which fell during her rehabilitation period), she had achieved 94%. In the final six months of her employment, she had achieved 59% and zero of the six budgets (see para [45]). This was when her hours were reduced, at her doctor’s request, as her knee was progressively degenerating. She had also been on annual leave and personal leave when she had contracted pneumonia. She did not think that her budget had been reduced by very much at all.
[29] The applicant accepted she had been critical of the ‘back to basics’ script Ms Hudson had asked her to use. She had been aware that things weren’t going as well, but she had not realised that she was going to lose her job, as everyone in the office was struggling. She had been concerned after being told by a now dismissed colleague that she and two other employees would be next. One of those employees still worked for the respondent. She had been concerned about her job security and when her rehabilitation officer, Ms Mahoni, came in, she had asked Ms Hudson directly as to the applicant’s concerns. Ms Hudson had responded that she had nothing to worry about and she would tell her if she did. She had also told the applicant on the Friday prior to her first warning that ‘everyone’s struggling. Don’t be hard on yourself. Everyone’s in the same boat.’
[30] The applicant agreed that her health issues played a part in meeting her budgets, but she was working through her breaks and outside of hours. She had steady sales from June 2013, but they were not as high as she would have liked. While she was a senior salesperson, this was largely because a number of other employees had been laid off or left.
[31] The applicant explained that her injury had occurred on 28 February 2012. She had been walking across a zebra crossing outside the carpark and had fallen into a depression in the road, next to the gutter. A colleague, Mr Bruce Harkins, had witnessed the fall and said she should go to the doctor. She went to a medical centre around the corner that day to have her shin, which was heavily bruised, looked at and while walking out the back to get an x-ray, she felt a sharp pain in her right knee and she fell. She had asked if she could see the doctor again, but was told that the doctor had left for the day and she was likely to face a three hour wait.
[32] The applicant said she did not see her own GP (Dr Cheung) until 27 March 2012. Her right knee had become more painful in the intervening period. She had told Dr Cheung about her knee at the appointment on 27 March, but he had referred only to her shin and ankle in the WorkCover certificate. Her injury became progressively worse and was referred to in the Medical Certificate of 30 May 2012. Dr Cheung referred her to a physiotherapist in relation to her left knee, who taped and iced her knee. She acknowledged that she had sustained an injury to her right knee five or six years ago, but this had been resolved by surgery. The insurance company supported her rehabilitation up to January 2014. It then came to the view that the continued degeneration of her knee was not due to the fall.
[33] The applicant conceded she had refused pain management medication (Endone and Panadeine Forte, amongst others) at certain points in the rehabilitation process, due to her concern as to side effects, such as liver and kidney damage. On 30 July 2014, she had told her doctor that physiotherapy was aggravating her condition and had taken his advice to stop. She had never been given pain management counselling. The doctor had been of the view that surgery was necessary as it would arrest the deterioration of her knee.
[34] The applicant acknowledged that when she was told by Ms Mahoni that she would likely be excused from jury duty due to her workers’ compensation claim, she had responded by email: ‘LOL true but I’d like to do it I’m such a stickybeak, aren’t I?’ She had thought that she would probably be excused and had raised her knee injury and that she was on medication. She had been told that if she was not having surgery in the next three weeks, then there were no grounds to be excused from jury duty. She had not sought a letter from Ms Mahoni or her doctor to support her being excused, because she had not thought that she was likely to be empanelled.
[35] The applicant was shown an email which Ms Mahoni sent to her on 26 October 2012, which purported to remind her of her obligations under the Workplace Injury Management and Workers’ Compensation Act 1998 in order for her to continue receiving her entitlements. The email referred to the applicant’s frustration. She said that this was because she had expressed her view in a conversation with Ms Mahoni, immediately prior to the letter being sent, that the physiotherapy was not working and was actually making her injury worse. She had complied with the requirements to have a cortisone injection, to provide medical certificates and attend hydrotherapy, though she said that there were difficulties with the therapist’s venue. She had attended a consultation with an independent physiotherapist and it was not rebooked. She did not take this email to be a threat, because she was complying with the requirements. She noted that her payment was not suspended until after her dismissal.
[36] The applicant had disagreed with the insurer’s approach to her rehabilitation because she was concerned as to the effect that taking painkillers would have on her ability to care for her children and work for the respondent. She agreed that a progress report from Rehabilitation Services on 3 May 2013 set out that she felt ‘high and agitated with reduced ability to live, often unable to engage in activities of daily living.’ This was in answer to a question as to how it made her feel and she did not accept that it impacted on her work. Ms Mahoni had told Ms Hudson the applicant needed a new chair and a footrest. She never received a chair and used a wastepaper bin as a footrest until another colleague had resigned. She agreed that after 18 months of rehabilitation, her condition was worse, not better, but she and the insurer had agreed that she would work five days per week. It was her doctor who had reduced her hours to three days per week. Her doctor had said to her that if she had the surgery earlier, it would have been a simple arthroscopy; now it was likely that her knee would need a full reconstruction. She was now out of the workers’ compensation system and in the public health system.
[37] The applicant agreed that she owned the StarKatz photography business and had done so throughout the rehabilitation period. This had involved operating a mobile studio and moving equipment. However, most of the applicant’s work had been handed over to Ms Tay Ashton and two other people from mid-2012. From that time, the work she performed in relation to that business largely consisted of editing photos taken by them on her computer. She had let the webpage for the business expire earlier in 2014 and was now referring all work to Ms Ashton. The applicant stressed that during the rehabilitation period, she had not undertaken any photography work for her own business, only editing, although she had undertaken some photography work for the respondent’s customers.
[38] The applicant was referred to a number of photo galleries on the StarKatz Photography Facebook page, which had been tendered by Mr Dawson. She said that a shoot at Clovelly on 1 April 2012 had been taken by her partner. With her partner’s assistance, she had taken an outdoor family shoot in a flat park for friends on or around 20 May 2012. This was provided ‘gratis’. A further one at the Yarramundi Reserve on 22 May was performed by Ms Ashton. The applicant’s name was on the photos as she had done the editing. She had performed a shoot for a customer of the respondent on 21 July 2012, but said she was sitting down when she did it, as she was in pain. Similarly, she had taken a shoot at a friend’s wedding (to which she was invited) while sitting at a table. A shoot on Valentine’s Day in 2014 was done by Ms Ashton. On 13 March 2013, she did another shoot for a customer of the respondent and Ms Hudson was aware of this. She had attended a shoot on 10 May 2013, but again Ms Ashton had taken the actual photography. Her partner had taken another shoot on 18 May 2013 and another outdoor shoot at Vaucluse on 26 May 2013.
[39] The applicant emphasised that a number of people had access to her business’ Facebook page. She acknowledged that in December 2013, her Facebook page showed an update which said that the business would be taking bookings again. This was because she was referring her bookings to other people, like Ms Ashton. She had done some free work and some of the photos on her business’ Facebook page were from years earlier. Any photography shoots she was paid for, were prior to her injury. Any work carried out after that only involved editing.
[40] The applicant denied a proposition that she had had eight counselling or coaching sessions with the respondent. The majority of discussions between herself and Ms Hudson were begun by the applicant asking, ‘What am I doing wrong?’ There had been generalised and group discussions in which she was told that her presentation was too long, with too much irrelevant content. She was told to use a ‘back to basics’ approach. The following exchange occurred between Mr Dawson and the applicant:
‘There’s no debate about most of your time with Dawson Media you did a very, very good job?---But I had no knowledge that these were, like, warnings or anything like that.
They weren’t. These were just notes that Fay makes in her management role in running the team and then when we receive an unfair dismissal claim, we go, “Oh my God, we better do our homework and find out what went on,” and this is what it is. We don’t waste our time doing this stuff unless we have to. In the process of running a sales team or a business managers keep diaries. That’s the way it works and these are diary notes?---Are there ones from prior to that?’
[41] The applicant said that she had felt stressed, under pressure and intimidated in the workplace. She could not say whether her struggle at work arose from her injury and the medication. She would have performed better if she had not felt threatened. She noted that when she was moved to a table at the back of the room (which she claimed was nicknamed the ‘departure lounge’ by other employees), she was told that it was because she did not need to be monitored. She was then more heavily monitored by Ms Hudson. The Second in Charge (2IC) ‘Marcus’ had told her, ‘Welcome to the departure lounge’. She had heard second hand that Ms Hudson claimed to have a video of her ‘walking okay’.
[42] The applicant claimed that on being handed the third warning on 25 October 2013 by Ms Hudson, she had asked what she could do to improve things and was told that ‘it doesn’t matter now.’ When asked what more the Company could have done, the applicant said that the respondent could have, upgraded its telephone and computer equipment, had one on one meetings to discuss performance, rather than group sessions and notify staff of their sales results in a manner that was more discreet than charts posted on the walls. The applicant conceded that her sales figures had dropped from 90% for the previous 18 months to 59% for the last six months, but noted that she had been off with pneumonia for 3½ weeks.
[43] The applicant claimed she had applied for jobs, but not in telesales, as she no longer had any interest in working in that area. She was currently unemployed.
[44] In re-examination, the applicant said that nobody had ever put to her directly an accusation that her workers’ compensation claim was not valid. Her GP had told her that it was obvious that physiotherapy was causing more pain and would add to the degeneration of her knee. There were plans for surgery. However, her GP had never told her that she needed emergency treatment.
For the respondent
[45] As earlier mentioned, the respondent did not provide witness statements in support of its case and the applicant’s legal representative declined to cross-examine Mr Dawson. Mr Dawson tendered a bundle of documents as evidence, including sales summaries for the applicant, an email from the applicant to Ms Hudson, extracts from the applicant’s business website and Facebook page, progress reports from the rehabilitation services provider, a number of work declarations, WorkCover certificates and the warning letters. The applicant was cross-examined on most of these documents by Mr Dawson. A chart of the applicant’s sales history recorded as follows:
TIME | Total Annual Budget | Total Annual Sales * | % To Budget | Budgets Met by Karen ^ |
November 2011 - April 2012 | $84,481 | $81,453 | 96% | 3 of 6 months |
May 2012 - October 2012 | $41,695 | $35,510 | 85% | 3 of 6 months |
November 2012 - April 2013 | $60,787 | $57,125 | 94% | 2 of 6 months |
May 2013 - October 2013 | $45,371 | $26,951 | 59% | 0 of 6 months |
* Recurring sales have been annualised for comparison.
^ Performance bonuses paid to Karen Sommers for exceeding her monthly budget.
[46] Also amongst this bundle was an email from Ms Hudson to Mr Dawson setting out the date and content of a number of diary notes Ms Hudson said she had made in relation to interactions with the applicant. Although Ms Hudson offered in this email to provide Mr Dawson photocopies of these diary notes, they were not filed or tendered and Ms Hudson did not attend the hearing. Unfortunately, these notes appear to include ex post facto comments about the applicant of which the applicant was unaware.
[47] These notes briefly set out that the applicant, along with two other employees, was moved to a different desk on 18 July 2013. The following day, the applicant was involved in a confrontation with another employee (Marcus) in which she asked when she would be getting a warning letter. On 22 July 2013, the applicant again confronted Marcus, complaining about the decision to move her desk and stating that there was no point in trying to make her resign.
[48] The notes further set out that on 12 August 2013, Ms Hudson had a discussion with Ms Mahoni, who gave her the impression that the applicant was only interested in complaining. A conference was to be organised in the Parramatta office. The meeting took place on 14 August 2013, in which the applicant complained that she had heard that she and another employee were going to be given performance warnings and that Ms Hudson had been heard saying she had video of the applicant working as normal. Ms Hudson had responded that the person who told her that, and was likely to be bitter about their dismissal.
[49] The notes set out that on 30 August, 11 and 16 September 2013, Ms Hudson had spoken to the applicant about her sales presentations, suggested that she use a ‘back to basics’ approach and target smaller and more consistent sales. The applicant was given a first warning on 4 October 2013. Her response was to complain about the quality of the product and the Company’s lack of marketing. A second warning was given to the applicant on 14 October 2013. It had said that the applicant ‘blames everything and everyone for her lack of performance, also brought up pain medication as a reason for not being able to sell.’ The applicant responded by email on 15 October 2013 (see paras [16]-[18]). Ms Hudson forwarded her a script to use on 18 October 2013 and had a meeting in relation to the applicant’s email response.
[50] The notes set out that the applicant was given a third warning on 25 October 2013 and the applicant and Ms Hudson listened to three of her recent presentations. Ms Hudson made further criticisms of the applicant’s long-winded approach, but she did not seem to take it on board. The note went on:
‘I reiterated by [sic] disappointment re her not making an effort to come to the company road show and in the course of a few minutes she had given me 3 different excuses as to why she couldn’t come after her Dr appointment at midday. 1) Didn’t get home until 5pm. 2) Didn’t have a baby sitter for child. 3) Had appt with GP after the midday appt with specialist. I reminded her that this had been a scheduled work day for her for the month. She then said that she suspected that I had arranged the road show to be held on a day that I knew she wouldn’t be working. I explained the fact it was quite the opposite and that the event had been booked knowing that Wednesday was one of her regular working days.’
[51] The notes confirmed that on 30 October 2013, Ms Hudson had received an email from Ms Mahoni, asking her to confirm that 25 October 2013 would be the applicant’s last day. Ms Hudson responded by phone and said that she hoped the applicant would achieve her budget for the end of the month and would let her know if anything changed. The applicant’s final warning was given to her that same day and Ms Hudson suggested the applicant work from home to try to achieve the budget. When she spoke to the applicant again on 1 November 2013, she said that she didn’t make any sales on Thursday as she could only ring land lines from her home phone and her mobile phone was out of credit. When the applicant was given her termination letter on 1 November 2013, she had already cleaned out her desk. On 4 November 2013, it was said that all documents and files on the applicant’s work computer had been deleted and it was surmised that this must have occurred prior to the meeting at 4:30pm, Friday 1 November 2013.
SUBMISSIONS
For the applicant
[52] In written submissions, Mr J Matthews, Solicitor said that the quality of the applicant’s work was never questioned until 4 October 2013. As a result of the injury sustained by the applicant on 28 February 2012, she had been required, at various times, to take time off or work reduced hours. The warnings provided by the respondent on 4, 14, 25 and 30 October 2013 were inadequate and were designed to create a false impression of fairness. They were inappropriate and failed to take into account the applicant’s injury.
[53] Mr Matthews claimed that it was not plausible that an experienced sales person would be directed, in good faith, to take a ‘back to basics’ approach. The applicant had attempted to comply with the directions given to her to the best of her ability, but the respondent was working towards terminating the applicant’s employment for the improper reason of her injury. He noted that as far back as 14 August 2013, the applicant had reported to Ms Mahoni that she felt stressed, depressed and at risk of losing her job. At a subsequent meeting between the applicant, Ms Mahoni and Ms Hudson, Ms Hudson had told the applicant that her job was not at risk and she was not being performance-managed. It was not plausible that the applicant’s workplace performance could have fallen so drastically between 14 August and 4 October 2013 so as to support the issuing of a written warning.
[54] Mr Matthews submitted that there was no valid reason for dismissal. The reasons for her dismissal were contrived and the applicant was given no genuine opportunity to improve her performance. The dismissal was therefore ‘harsh, unjust and unreasonable’.
[55] In oral submissions, Mr Matthews put that there was no dispute the applicant was a competent employee until the last six months. He noted that the second warning letter referred to the applicant having received her recurring budget and that this was ‘pleasing’. This was evidence of good work. The response to the second warning letter ended with the applicant expressing that she wanted to make budget and apologised that the respondent now considered her performance questionable. This would not have come from an uninterested employee. It made clear that she was desperate to keep her job. The warning of 25 October 2013 set out that the applicant was coming closer to her attaining her annual budget.
[56] Mr Matthews submitted that the criticism of the applicant not attending the respondent’s Road Show could not be considered genuine. The evidence was that she had notified the respondent a month earlier that she needed to attend this appointment, that she had called Ms Hudson when the appointment was running late and that Ms Hudson told her not to worry about it.
[57] Mr Matthews claimed that the accusation of a ‘defensive, negative attitude towards the Pink Pages’ was not put to the applicant until the ‘final warning’ on 30 October 2013. Similarly, the respondent had not raised any issues with the applicant claiming workers’ compensation, poor rehabilitation compliance, running her own business or attending jury duty until these proceedings. The respondent had not extracted their file notes or diary entries which they now rely on. The applicant’s evidence should be accepted as she was a witness of credit. The line of questioning from Mr Dawson demonstrated anger on the part of the Company and Mr Matthews claimed that this arose from her workplace injury.
[58] In relation to the budgets, Mr Matthews noted that the applicant’s budget between May-October 2012 was $41,630 and her budget between May-October 2013 was $45,300. It was acknowledged that she had dropped from 85% to 59%. However, the applicant was working under difficult circumstances, including a length of time taken off when she had pneumonia.
[59] Mr Matthews submitted that the applicant’s dismissal was ‘harsh’ in that she was an injured worker, working three days per week awaiting surgery, who was not given genuine support by her employer. Reinstatement was not appropriate in the circumstances and compensation of approximately 20 weeks at $52,000pa would be appropriate.
For the respondent
[60] The respondent filed extensive, repetitive and unsigned written submissions. A number of documents were annexed to these submissions and these were marked as exhibits and tendered as evidence for the respondent.
[61] The respondent described the circumstances of the applicant’s injury and noted that her first WorkCover certificate on 27 March 2012 only discussed injuries to her left shin and knee. There was no assessment of workplace duties required at this time. Dr Cheung described the injuries to her left knee and ankle as ‘better’ on 30 May 2012, but she then reported pain in her right knee. Even so, her subsequent physiotherapy referral only discussed her left knee.
[62] The respondent said that the applicant’s performance was satisfactory until mid 2013. The respondent considered the applicant’s performance, while under rehabilitation, in the 14 months leading up to this period as ‘satisfactory under the circumstances’, but after this, her attitude, performance and demeanour ‘diminished’ to the point where it became unacceptable. She adversely modified her sales presentations, failed to follow instructions and coaching and this resulted in her sales figures being significantly diminished over the last six months of her employment. The respondent repeatedly stated that the applicant’s performance was disappointing in the context of her status as a Senior Sales Consultant. She had behaved aggressively towards her supervisor on 19 July, 22 July and 12 August 2013. Ms Mahoni had noted, in a conversation with Ms Hudson, that the applicant only seemed interested in complaining about her job.
[63] The respondent speculated that this change in attitude was due to a lack of progress in her rehabilitation and stressed that it did not have any input into the decisions required by the rehabilitation and medical professionals. The respondent had made every effort to assist the applicant in her recovery and made compromises in relation to her sales performance. It was also noted that the applicant had advised the insurer that she no longer wished to comply with her workers’ compensation obligations earlier in 2014. It could therefore be assumed that she had made a full recovery between 1 November 2013 and 7 February 2014.
[64] The respondent drew attention to the applicant’s medical reports in which she had stated to a medical professional that her pain medication caused her to feel high, confused, slur her words and interfered with her concentration. The respondent also noted that she had refused pain management therapy on 13 August 2013, further physiotherapy on 30 July 2012 and ceased hydrotherapy on 16 July 2013. She had also continued to drive after it was suggested she should cease doing so.
[65] The respondent submitted that the applicant was uninterested in her rehabilitation and had ‘dramatically extended’ her recovery period due to inaction and failure to cooperate with her medical team. She had been ‘threatened’ by Ms Mahoni that she risked losing her workers’ compensation entitlements unless she cooperated (see para [35]). It noted that when told by her rehabilitation manager that she could avoid jury duty due to her injury, the applicant had replied that she would be interested in doing it anyway. She had continued to run her ‘physically demanding’ photography business, but she had not declared this on her WorkCover NSW Certificates of Capacity. This failure could be said to be misleading WorkCover. Her photography business’ Facebook page advised that the business was closed as of 14 April 2014.
[66] The respondent put that the applicant had been aware of her poor performance since 19 July 2013. The diary notes of Ms Hudson demonstrated that she had confronted ‘Marcus’ on this date and asked him when she would be receiving a warning letter. She had also made reference to people trying to get her to resign on 22 July 2013. The respondent also relied on the applicant’s expressed fears in the meeting on 13 August 2013 that she thought she would be receiving a warning letter.
[67] The respondent claimed that the management of the applicant’s performance started with a counselling/coaching session on 30 August 2013. Further, similar sessions were held on 11 and 16 September 2013. There were further ‘warning/coaching meetings’ held on 4 and 14 October 2013. A further counselling/coaching meeting was held on 18 October 2013 and two further ‘warning/coaching’ meetings were held on 25 and 30 October 2013. This represented eight meetings held over two months during which Ms Hudson provided help, support and suggestions for improvement. It was normal practice to suggest a ‘back to basics’ approach for an underperforming employee. The applicant made no progress and the respondent provided graphs setting out her drop in performance in the last six months of her employment, even after her targets were reduced (See para [45]). She had only achieved 59% of her budget in her final five months and zero out of her six monthly budgets. While she had exceeded her recurring budget for October 2013, when these figures were annualised and combined with her final budget, she was short of her total October budget. The applicant may have thought she was making genuine attempts to comply with the respondent’s requirements, but she was mistaken.
[68] The respondent took issue with the applicant’s characterisation of the reasons given for her termination not being appropriately objective. Her letter of termination set out that her sales calls had been monitored and that feedback had been given. It also set out that she should try a ‘back to basics’ approach and that she had been given a script to work from. She had been reminded of her long experience. Her attitude was negative and defensive and this was unacceptable for a Senior Sales employee. Her complaints that she was the only salesperson being performance managed were unfounded, as she had asked for assistance. All these reasons had been flagged to her in previous warning letters.
[69] The respondent believed that the feelings of stress and lack of support expressed by the applicant and noted by her rehabilitation officer on 14 August 2013 arose from her poor performance. The respondent had used the formal warning system as a last resort and it had no desire to get rid of someone who had previously been a competent and productive salesperson. There was no evidence of any preconceived plan to terminate the applicant’s employment. Her sudden lack of performance was something of a mystery to the respondent. Her frustration, aggression, depression, slurring of her words and lack of concentration were all out of the control of the respondent.
[70] The respondent submitted that the applicant’s dismissal was fair.
[71] In oral submissions, Mr Dawson described correspondence that the respondent had received in relation to the applicant’s WorkCover claim in the previous four or five weeks. It set out that WorkCover’s investigations team was making some inquiries and it was said that she had not continued to provide the relevant documentation. Her benefits had ceased some time before February 2014. It was this correspondence that led the respondent to imply ‘fraud’ on the applicant’s part and this was why they had not raised it previously.
[72] In an extraordinary exchange between Mr Dawson and the Bench, the following was said:
His Honour: | Does the budgetary setting take into account absences? |
Mr Dawson: | Well, it depends on what they are. If they're planned holidays, it does obviously. If it's unplanned, it doesn't. So if someone has a day off here or there, we don't readjust the budget unless there's a forward plan. |
His Honour: | What about someone who is ill? |
Mr Dawson: | She was back to - I think we said she was put down to three days a week, I think, in August and her budgets accordingly were reduced so - - - |
His Honour: | I understand you would have to do that, but wasn't it said that she was off for three weeks with pneumonia? |
Mr Dawson: | In May or June, I suspect. I don't have that detail here, but if she were, the budget in that month would probably still not be changed. That's been the company policy and, generally speaking, it's never an issue. You don't get a performance where someone fails six months in a row. It just doesn't happen. |
His Honour: | So through no fault of your own your budget targets and consequently your employment is jeopardised because the budgetary system doesn't take into account illness. |
Mr Dawson: | It hasn't been needed to in the past. |
His Honour: | That's appalling. |
Mr Dawson: | Yes, not really. |
His Honour: | It is appalling. |
Mr Dawson: | It hasn't come up in the past. It hasn't come up. |
His Honour: | It might come up now. |
[73] Mr Dawson submitted that after fourteen months of rehabilitation, it appeared her injury was getting worse, rather than better. In this period, she still maintained her photography business, requiring ‘significant physical activity’ and had ‘insisted on doing three weeks’ jury service’. The applicant had continued to drive, though Ms Mahoni had suggested she stop doing so. The applicant had not taken her rehabilitation seriously.
[74] Mr Dawson believed that the applicant’s attitude began to change in May or June 2013 and noted she had mentioned issues with pain, drowsiness, depression and lack of concentration. Ms Mahoni had recommended she reduce her working week from five days to three. Her budget was adjusted accordingly. However, despite numerous meetings, the applicant had behaved aggressively and was given a warning as a last resort after months of poor performance. Indeed, the respondent had ‘compromised’ in supporting the applicant through the first fourteen months of her rehabilitation when her performance had not been ‘100 percent’. Her attitude and performance was problematic for such a senior and influential sales employee.
CONSIDERATION
Statutory provisions and applicable principles
[75] The ultimate question to be determined in this case is whether the applicant’s dismissal was ‘harsh, unreasonable or unjust’ within the meaning of s 387 of the Act. That section is expressed as follows:
‘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.’
[76] The well known passage from Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 (‘Byrne’) is relevant to the consideration of whether a dismissal is ‘harsh, unjust or unreasonable.’ Their Honours McHugh and Gummow JJ said at para [128]:
‘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’.
[77] The meaning of ‘valid reason’ in s 387(a) is drawn from the judgment of Northrop Jin Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’). This meaning has been applied by members of the Commission and its predecessors for many years:
‘In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly.’
[78] Subsections (b) - (e) of s 387 of the Act might be broadly characterised as issues relevant as to whether a dismissed employee was afforded procedural fairness/natural justice. It is trite to observe that even if there was a valid reason or reasons for an employee’s dismissal, the dismissal may still be held to be unfair, if the employee was not afforded procedural fairness. This has been a long held industrial principle adopted and applied by this Commission, its predecessors, other Courts, industrial tribunals and the High Court. In the High Court case of Byrne, supra above, their Honours McHugh and Gummow JJ said at para [130]:
‘130. That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh, unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable (168). But the question under cl 11(a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking to the first issue before there is seen to be any need to enter upon the second.’
[79] Three further authorities on the subject of procedural fairness in an unfair dismissal are relevant to this matter. In Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport (2000) 98 IR 137 (‘Crozier v Palazzo’), a Full Bench of the AIRC said at para [73]:
‘As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment.’
[80] In Wadey v Y.M.C.A. Canberra [1996] IRCA 568, Moore J made clear that an employer cannot merely pay ‘lip service’ to giving an employee an opportunity to respond to allegations concerning the employee’s conduct. His Honour said:
‘In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of allegations concerning the employee's conduct so as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.’
[81] Nevertheless, procedural fairness steps should be applied in a commonsense and practical way. In Gibson v BosmacPty Ltd (1995) 60 IR 1 (‘Gibson’), Wilcox CJ said at 7:
‘Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the 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 the section.’
[82] Superintending the Commission’s unfair dismissal jurisdiction is the principle of ‘a fair go all round’. This principle is spelt out at s 381(2) of the Act as follows:
‘381 Object of this Part
...
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.’
[83] I turn now to the specific matters required to be taken into account in respect to s 387 of the Act.
Was there a valid reason for the applicant’s dismissal (s 387(a))?
[84] At first blush, it might be said that the respondent had an unassailably valid reason for the applicant’s dismissal; namely a deterioration in her sales performance over the six months prior to her dismissal. This is certainly the impression the respondent sought to create through its tender of various documents, which were said to constitute the foundation of its case in opposition to the applicant’s claim that she was unfairly dismissed. However, I find myself deeply troubled by a number of matters which emerged during the proceeding and which cause me to doubt that the respondent had any valid reason for the applicant’s dismissal. Those concerns may be summarised as follows.
[85] Firstly, the failure of the respondent to provide or make available any witness evidence, particularly from Ms Hudson, author of most of the documentary material relevant to the warnings and concerns for the applicant’s performance. Ms Hudson was the applicant’s direct supervisor. Her cross examination may well have proved very illuminating. It seems manifestly clear, even from Ms Hudson’s letters to the applicant, that she was ‘at best’ sending mixed messages as to the applicant’s performance. A few examples will suffice to demonstrate the point.
- In the warning letter of 14 October 2013, Ms Hudson said ‘You have achieved your recurring budget which is very pleasing’ and then she goes on to criticise her performance and the applicant’s questions as to appropriate help or feedback.
- In the warning letter of 25 October 2013, Ms Hudson said:
- Ms Hudson strongly criticised the applicant for not attending the Roadshow on 23 October 2013, in circumstances where:
‘I mentioned to you on 21 October 2013 that it was pleasing to note that you had retained your two renewal customers which are included in your October budget bringing your annual sales budget closer to attainment.’
(a) the respondent had known for a month that she had a hard to obtain specialist appointment;
(b) the applicant’s appointment was delayed and the applicant called Ms Hudson to explain; and
(c) Ms Hudson told her not to worry about it.
- Ms Hudson had told Ms Mahoni (the applicant’s rehabilitation officer) that the applicant was a good worker.
- On the Friday before receiving her first warning, Ms Hudson had told the applicant, ‘Everyone’s struggling; Don’t be hard on yourself. Everyone’s in the same boat.’
- The applicant was confused as to being told to adopt the ‘back to basics’ approach when she had previously been praised for her sales approach.
- When handed her third warning letter, the applicant asked what she could do to improve things and Ms Hudson told her, ‘It doesn’t matter now.’
[86] I was very disturbed by many aspects of the applicant’s evidence that were not refuted by the respondent and, which I must say, given the unlikelihood that they were fabricated, raise serious doubts as to the bona fides of the respondent. These include the following:
- The applicant was moved to a desk which was menacingly nicknamed, ‘the departure lounge’; the implication being that anyone who sat there was likely the next person to be fired. The applicant said she was told she was moved there because she did not need supervision, but was then closely supervised by Ms Hudson. A printer next to the desk was unplugged without any explanation and during a time when the applicant habitually used a walking stick.
- The applicant gave evidence that another injured employee, Ms Wallace, who had been dismissed earlier, had told her that she and two other employees were going to be dismissed.
- It seems the respondent did all it could to ‘move the goal posts’ so as to ensure the applicant would never meet her targets. For example:
- she was directed to adopt a ‘back to basics’ approach which was directly contrary to her experience and the manner she went about her work when she was successfully meeting budget;
- without any explanation, Ms Hudson disallowed one of the applicant’s sales which, had it been included, would have ensured that she met budget; and
- for the first time, the applicant’s budget was restricted to ‘upfront’ sales (for which there was a 5% discount), as distinct to sales which might result in a payment plan over a number of months.
- The respondent had meetings of the sales team where each person’s performance was written on butcher’s paper and stuck on the wall. The applicant said she felt belittled and humiliated and it is little wonder she felt scared and apprehensive about her future employment. In my view, this sort of ‘shame file’ conduct was an utterly appalling employee relations practice. It was designed to embarrass and humiliate those who did not make sales targets.
[87] Perhaps the most egregious conduct of the respondent was the very warning process itself. Eager to get rid of the applicant and conscious of the well known, but largely discredited, ‘three strikes and you’re out’ rationale, the applicant received her three warnings and dismissal over one month - October 2013. In my view, an assessment of someone’s sales performance through warnings over one month, is both unrealistic and demonstrably unfair. If there had been genuine concerns about a salesperson’s performance, particularly where the employee had three years of unblemished service, had been commended for her work and encouraged not to leave by a large salary rise, then she should have been assessed over a longer period. A one month snapshot of a person’s sales performance was unduly hasty and unfocused. It raises concerns as to the real motivations of the respondent. For the respondent to state (as disclosed in its original Form F3 - Employer’s Response) that the applicant was dismissed after ‘extensive counselling’, was disingenuous. In addition, there was uncontested evidence that other salespersons had similarly not met their budgets.
[88] Of course, the respondent rationalised that as the applicant was the Senior Salesperson, more was expected of her. It seems that the reason that she was a senior member of the team was that she appeared to be the longest-serving person still standing - others had left or been sacked. While I accept unreservedly that the applicant’s sales figures were appropriately adjusted to reflect her working three days per week and that her sales performance had fallen over a six month period, Mr Dawson’s candid statement that during the period the applicant had had 3½ weeks off with pneumonia, but this had not been taken into account in the sales assessment, was an extraordinary admission.
[89] Mr Dawson brushed this off as irrelevant, as only planned absences were ever taken into account. To have not taken into account an unplanned absence, such as a serious illness is grossly unfair and frankly, absurd and unacceptable. Is it any wonder that, through no fault of her own, the applicant’s sales figures suffered as a result. The applicant was judged on an utterly unreliable and unsound basis.
[90] In any event, was a budget reduction from 96% to 59% such a drastic fall in sales such as to justify a salesperson’s dismissal; particularly given her earlier results? I am not convinced that this reduction was so calamitous as to justify the applicant’s dismissal. It is also curious that during the applicant’s entire period of rehabilitation, some 18 months, she had achieved 96%, 85% and 94% of budget.
[91] As an aside, it always strikes me as curious, that if an employee is as good as they make out and are a loyal and dedicated employee, that they would be dismissed at all. Surely, it makes no logical, let alone business sense, to get rid of your high flyers. Why would the employer here dismiss such a previously high-performing employee? Perhaps the answer is as the applicant saw the situation. She was an injured employee working three days per week. Without expressly finding any real basis for the applicant’s dismissal, I have my suspicions. However, for the purposes of s 387(a), I need only find that the stated reasons for the applicant’s dismissal being her poor sales performance, was not, in my view, a valid reason for the applicant’s dismissal.
Was the applicant notified of the reason for her dismissal (s 387(b))?
[92] There can be no doubt that the applicant was aware of the respondent’s view as to the reason for her dismissal. She was expressly warned in the three letters of October 2013 of the respondent’s concerns. However, for the reasons I express elsewhere, these reasons were not valid.
Was the applicant afforded an opportunity to respond to the reasons for her dismissal (s 387(c))?
[93] The applicant was dismissed in a fourth letter of 1 November 2013. She was dismissed summarily, though paid some notice. The opportunity to respond to the reasons for her dismissal was perfunctory and dismissive. Indeed, the uncontested evidence was that when the applicant received her third warning letter, she asked Ms Hudson what she could do to improve her performance. Ms Hudson had replied, ‘It doesn’t matter now.’ In other words, the respondent had determined to dismiss the applicant at least by the 25 October 2013 and probably much earlier. Nothing the applicant said or did was going to change that decision.
Was there any unreasonable refusal by the respondent to allow the applicant to have a support person (s 387(d))?
[94] There was no evidence the applicant was offered a support person at any time during the disciplinary period of October 2013.
Was the applicant warned about unsatisfactory performance (s 387(e))?
[95] For reasons expressed earlier, the applicant was offered little opportunity to respond to and address her alleged unsatisfactory performance. In my view, nothing the applicant could have done would have saved her job. It appears even certain sales were sabotaged to ensure she did not reach her targets.
The size of the respondent (s 387(f)) and its access to human resources expertise (s 387(g))
[96] The respondent is not a small business. Its approach to the applicant’s dismissal was clumsy, hasty and indecent. Its approach to these proceedings was essentially, ‘We have done nothing wrong and we were perfectly entitled to dismiss the applicant.’ I would caution the respondent, lest it is to be a more frequent ‘visitor’ to the Commission, that it should take proper advice on handling the situation it had sought to create. I am reminded of what Commissioner Ryan said in the reasons for his decision (Basel Alogaidi v Agad Property Consulting Pty Ltd [2014] FWC 1503) which he gave in transcript on 3 March 2014 at PN23:
‘Even an employer with zero human resource management or expertise or specialisation is not relieved of the obligation to act fairly and fairness is not something that one learns doing a human resources management degree. Fairness is part and parcel of being a human being and treating each other properly and fairly.’
Other relevant matters (s 387(h))
[97] To compound the respondent’s appalling treatment of the applicant and its apparent disdain for these proceedings, the respondent raised a number of further concerns, which were never raised with the applicant, but presumably were designed to bolster their otherwise weak case and cast the applicant in the worst possible light. For example:
1. The respondent criticised the applicant for engaging in her own photography business while being unfit for full time employment. The applicant’s uncontested explanation for all of her business activities are referenced in paras [37]-[39]. Moreover, the respondent well-knew of the applicant’s business and even accepted her taking photos for its own clients.
2. The respondent criticised the applicant for allegedly not cooperating with her rehabilitation program in that she rejected medication and she rejected physiotherapy. This was all explained by her; See paras [35]-[36]. There was no evidence brought to substantiate this claim and the issue was never raised with her during her employment.
3. The respondent criticised the applicant for attending jury duty. The applicant had expected to be discharged from jury duty because of her injury, but was not. This was not her fault and cannot possibly serve as a reason for the applicant’s dismissal. Indeed, the respondent may have acted unlawfully in using this excuse as a basis for her dismissal.
In my opinion, these ex post facto criticisms, never raised with the applicant until these proceedings, reflect very poorly on the respondent and, to my mind, are entirely consistent with their plan to get rid of her and justify it later, if necessary.
[98] In summary then, I find that the applicant’s dismissal on 1 November 2013 was ‘harsh, unreasonable and unjust’ within the meaning of s 387 of the Act. Having so found, I turn now to an appropriate remedy.
REMEDY
[99] The applicant does not seek reinstatement or reemployment. Given my earlier findings, it is unsurprising that she does not want to work for the respondent. I determine that reinstatement would be inappropriate (s 390(3)).
[100] Determining compensation to be ordered in this case, requires the Commission to have regard to each of the criteria in s 392 of the Act. These are:
‘392 Remedy—compensation
1.
...
2.
...
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
Note: subsection 392(5) indexed to $66,500 from 1 July 2014
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.’
[101] The respondent advanced no evidence that any order of compensation would adversely impact on the viability of the respondent’s enterprise (s 392(a)). The applicant had 3½ years service with the respondent; the first three years seemingly without criticism, indeed to the contrary, in that the respondent substantially increased her salary when she gave notice in 2011, that she had been approached by the NRMA to work for it in telesales (s 392(b)).
[102] I consider that if the applicant had been permitted to recover from her injury and given a reasonable time to turn around her sales performance, then she would have continued employment with the respondent for a further six months (s 392(c)). The applicant gave uncontested evidence that she had been seeking alternative employment, but not in sales. She had also been awaiting surgery and recovery before actively looking for alternative employment (s 392(d)). This was not unreasonable in the circumstances. There was no evidence that the applicant had earnt any remuneration since having been dismissed.
[103] There was no contest the applicant had been unemployed at least to the hearing date of 20 June 2014, meaning she had been without employment for almost 8 months (ss 392(e), (f)).
[104] There was no misconduct of the applicant which might otherwise result in a discount of the compensation proposed to be ordered (s 392(3)). The order I propose to make contains no component for shock, distress, humiliation or any other analogous hurt (s 394(4)).
[105] I consider that an appropriate order of compensation is 20 weeks pay. Accepting that at the time of her dismissal (1 November 2013), the applicant was working three days per week based on an annual full time income of $52,000, the amount to be ordered is $600.00 x 20 being $12,000.00. This amount does not exceed half the high income threshold (s 392(5)) or exceed the amount of income earnt by the applicant in the 26 weeks immediately before her dismissal (s 392(6)). The amount of compensation is to be paid to the applicant within 21 days of today. An order to this effect will be issued contemporaneously with this decision.
[106] Finally, I judge that this order of compensation satisfies the requirements of providing a ‘fair go all round’ for both the employee and the employer as set out in s 381(2) of the Act.
DEPUTY PRESIDENT
Appearances:
Mr J Matthews, Solicitor for the applicant.
Mr W Dawson for the respondent.
Hearing details:
2014:
Sydney.
9 July 2014.
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