Katie Wade v Quad Care Pty Ltd
[2023] FWC 796
•30 MAY 2023
| [2023] FWC 796 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Katie Wade
v
Quad Care Pty Ltd
(U2022/11061)
| DEPUTY PRESIDENT LAKE | BRISBANE, 30 MAY 2023 |
Application for an unfair dismissal remedy – serious misconduct – allegation of dishonesty – Respondent compliant with Small Business Fair Dismissal Code – application dismissed
BACKGROUND
Mrs Katie Wade (the Applicant) made an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy regarding her dismissal from Quad Care Pty Ltd (the Respondent).
The Applicant commenced her employment with the Respondent on 12 August 2019 and her employment came to an end on 31 October 2022.
It is not in dispute that the application was made within time (s.396(a)); the person was protected from unfair dismissal (s.396(b)); and the dismissal did not involve a genuine redundancy (s.396(d)). These matters were not raised by the parties, and I find that these issues are not a point of contention.
The Respondent relies on the fact that they complied with the Small Business Fair Dismissal Code (s.396(c)) and that they had less than 15 employees during the time of the Applicant’s dismissal.
Directions were set for the filing of material and the matter was dealt with by way of Hearing on 9 March 2023. The Applicant filed her submissions on 30 January 2023. The Respondent filed their submissions on 13 February 2023.
The Applicant appeared on her own behalf. Ms Danielle Creffield appeared as the Director for the Respondent.
Does the Respondent fall under the Small Business Fair Dismissal Code?
Before I am able to determine the merits of the matter, I am required to consider whether the Respondent is a small business.
The Respondent states in her Form F3 that they are a Small Business and that they have complied with the Small Business Fair Dismissal Code. Ms Creffield claims that there were 9 employees that work on a regular and systematic basis, and that there were 10 additional employees who were casual and do not work on a regular basis. Ms Creffield later amended this to 14 employees that were regular and systematic.
The Applicant contends that the Respondent is not a small business. The Respondent provided Chambers a list of employees on payroll for the last six months prior to the Applicant’s dismissal. However, the names on the list provided were redacted.
The Applicant was unable to recall the number of employees within the business. Due to the factual conflict of the evidence provided. I asked Ms Creffield to provide unredacted payroll records for the time of the dismissal.
In Bronze Hospitality Pty Ltd v Hansson (No 2) [2019] FCA 1680 at 40, Jackson J states that the Fair Work Commission does not limit the matters that may be taken into account in determining whether the expectation is reasonable when determining ongoing expectation of continuing employment. If the period of employment is shorter, it will be generally harder for the employee to establish that he or she reasonably relied on a pattern of work, if that is the basis of their reasonable expectation. But the reasonableness of the expectation depends on all the circumstances.
There are numerous decisions regarding the interpretation of what ‘regular and systematic’ means. [1] ‘Regular and systematic’ focuses on the working patterns of the employee, and not just the hours worked.
After removing the Director (Ms Creffield) from the count of employees on payroll as she is the employer, I confirm that there are 14 employees that are regular and systematic employees hired with an expectation of an ongoing basis upon review of the payroll records. The remaining employees either no longer had shifts with the Respondent or were not regular and systematic.
Therefore, I find the Respondent to be a small business with less than 15 employees and the dismissal will be determined with reference to the Small Business Fair Dismissal Code.
Small Business Fair Dismissal Code
The Small Business Fair Dismissal Code states the following:
“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.
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 the Fair Work Commission, 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.”
The Full Bench decision in Pinawin v Domingo [2012] FWAFB 1359 summarises the following principles.
This test brings the position for small businesses into line with the test for unfairness applied by tribunals in the UK in misconduct cases. In the leading case of British Home Stores Ltd v Burchell, the Employment Appeal Tribunal held that:
“What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further.”
Deputy President Bartel in Narong Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana Tree Cafe[2010] FWA 7891 said at 60:
“At the outset it is appropriate to note that unlike a consideration of the dismissal of an employee of a business that is not a small business employer, the function of FWA is not to determine on the evidence whether there was a valid reason for dismissal. That is, the exercise in the present matter does not involve a finding on the evidence as to whether the applicant did or did not steal the money. The application of the Small Business Fair Dismissal Code involves a determination as to whether there were reasonable grounds on which the respondent reached the view that the applicant’s conduct was serious enough to justify immediate dismissal. As such, the determination is to be based on the knowledge available to the employer at the time of the dismissal, and necessarily involves an assessment of the reasonableness of the steps taken by the employer to gather relevant information on which the decision to dismiss was based.”
[28] Senior Deputy President O’Callaghan in Harley v Rosecrest Asset Pty Ltd T/A Can Do International [2011] FWA 3922 at [8] said:
“For an employer to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal, it is firstly necessary for the employer to establish that the employer did in fact hold the belief that as a matter of fact that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) that the conduct justified immediate dismissal. This is to be contrasted to the provisions of s.387(a) where FWA, in determining whether there was a valid reason for the dismissal, must find whether the conduct in fact occurred.
Secondly, it is necessary for the employer to establish that there are reasonable grounds for the employer holding the belief. It is thus necessary for the employer to establish a basis for the belief held which is reasonable. In this regard it would usually be necessary for the employer to establish what inquires or investigations were made to support a basis for holding the belief. It would also ordinarily be expected that the belief held be put to the employee, even though the grounds for holding it may not be. Failure to make sufficient inquiries or to put the accusation to the employee in many circumstances might lead to a view that there were no reasonable grounds for the belief to be held.”
Summary of Evidence
I have considered all material provided by the Applicant and Respondent.
Ms Creffield dismissed the Applicant based on serious misconduct resulting from dishonesty. The Applicant had overpaid herself amounting to $499.36 for work undertaken on 8, 9, 15 and 16 October 2022.
The Applicant commenced employment with Quad Care Pty Ltd on 12 September 2019 in the position of Bookkeeper/Payroll. The Applicant had a close friendship with Ms Creffield prior to starting at Quad Care Pty Ltd and the Applicant states she was hired because of her prior experience in bookkeeping.
The Applicant states she was formally offered the position of full-time Manager after a 7-month period in July 2022. The Applicant states she was offered an hourly rate of $41.61. The Applicant submits that she was expected to continue doing the bookkeeping/payroll tasks as needed. Mrs Wade was put in the managerial position as Ms Creffield was going on maternity leave.
On 28 October 2022 at 8:55am, Ms Creffield stated that she would like to talk with the Applicant regarding the overpayment that was recorded on her recent payslip. It was Ms Creffield’s understanding that the Applicant was doing 4 x 8-hour days and the fifth day was paid for the phone calls outside of hours. Ms Creffield stated in that email that she wished the Applicant had discussed the arrangements.
The Applicant responded on the same day at 9:05am, stating that she was sorry and had been working the additional hours to get her job done, and that she did not realise that this was not okay. The Applicant sent a further email stating she was confused, stating that she only charged the Respondent for the hours that she was doing work on the business, and she did not charge the Respondent for the inactive hours she did not work.
The Applicant attempted to contact Ms Creffield seven times between 9.06am and 9.27am. Ms Creffield states she picked up the phone despite being on family leave because of her husband’s surgeries. Ms Creffield states that she picked up two of the seven times the Applicant called in order to provide Ms Wade the opportunity to explain why she had overpaid herself.
During this period, Ms Wade sent a text stating that ‘she could not hold this together thinking you think I have done something wrong. It seems like your saying I am robbing you. I’m supposed to go into a meeting in 5 mins.’
On 30 October 2022 at 12:17pm, Ms Wade sent an email to Ms Creffield stating that she did not realise that the expectation was to only work 8 hours for 4 days and the days off was only to take phone calls. The Applicant states she only ever put down the hours she has worked for and that she had not taken a day off. The Applicant states that she was under the impression that the extra things the Respondent had asked her to do in the day were approved working hours. The Applicant asked for direction from the Respondent on how to proceed with her role and hours with a phone call, and to document this with an email within the week.
On 31 October 2022, at 2.50pm, Ms Creffield responded to the email. The Respondent states that her understanding was that the Applicant gets paid for 38 hours of work a week including a vehicle and usage costs. Ms Creffield believed that the remuneration was adequate to cover calls outside of hours and had frequently encouraged changes to be discussed with her if the demands of the role were more than her remuneration. Ms Creffield states that she never agreed to the hours the Applicant had paid herself, nor the 15-minute intervals of time that were being allocated per phone call. Ms Creffield states she made the mistake of not documenting their verbal agreement adequately and had this been discussed earlier she would have been happy to negotiate.
In the same email, Ms Creffield states that she had tried to teach, train and coach the Applicant through the managerial role for many months and was unsure how to support her any further. She stated that the management role was outside her scope and suggested to continue in an administration role. Furthermore, Ms Creffield had terminated the Applicant’s management role and Mrs Wade’s last day would be 27 November 2022.
Ms Creffield received further calls from the Applicant on 1 November 2022 while she was on personal leave, Ms Creffield then issued a termination letter effectively terminating Mrs Wade immediately on 2 November 2022.
In the termination letter, Ms Creffield cites that the Applicant paying herself represent a significant breach of trust of the role she held, and that the Applicant would be terminated because of serious misconduct in the form of dishonesty. As a gesture of goodwill, the Applicant would be paid until 11 November 2022 and would not make deductions regarding the alleged overpayment. The Applicant was also requested to return all company property by 2 November 2022 at 5:30pm.
Did the Respondent comply with the Code?
Ms Creffield had a sufficient basis in finding that Mrs Wade could have possibly engaged in serious misconduct. Mrs Wade had moved into the managerial role in order to cover Ms Creffield on 11 July 2022. Mrs Wade had been doing the payroll and bookkeeping from the beginning of her employment from 12 September 2019.
Ms Creffield notes that there were no issues of overpayment during July, August or September 2022. These issues were only raised in October when there were several overpayments made by Mrs Wade to herself in this month. Mrs Creffield had a valid reason to hold the belief that Mrs Wade could have engaged in serious misconduct in overpaying herself to what she may have not been entitled to.
However, where Ms Creffield faces some issues with compliance of the Code is whether she had reasonable grounds for holding the belief. Employers who rely on the Small Business Fair Dismissal Code are expected to make sufficient enquiries or investigations to support the belief of their allegation of an employee’s misconduct. Small Businesses are not expected to have a high level of formality or is expected to be technical when making sufficient enquiries, but the enquiries should be clearly made and understandable to the person affected. The enquiries should also be documented.
Mrs Wade was responsible for payroll throughout her roles with Quad Care Pty Ltd and contended that she did not know of the issue and would have paid back any overpayment if she had known if this was what Ms Creffield was seeking. Mrs Wade’s recent move to Ms Creffield’s role may have caused confusion. Ms Creffield acknowledged that she should have documented their verbal agreement adequately on 31 October 2022.
One of Ms Creffield’s arguments is that Mrs Wade created her own contract and therefore she should have been aware of the conditions of her employment. Ms Creffield states the Applicant knew she wasn’t entitled to be paid for taking phone calls outside her shifts. Mrs Wade provided evidence that it was not a contract drafted by herself but one that was generated from Employment Hero and that she was not aware of the specific details. Mrs Wade states that she was unaware that the generated contract exclude overtime allowances, or any other entitlements of phone calls out of hours. On balance, I find that this factor is not a sufficient basis of holding a reasonable belief of misconduct considering the employment contract was autogenerated.
I accept that Ms Creffield could have been clearer on this issue to Mrs Wade via the email sent on 28 October 2022 at 8:55am. Although Ms Creffield puts the allegation to the Applicant, more clarity could have been brought to the Applicant informing her she had investigated the payroll and noted the overpayment and that it was not agreed to. The specific amount of overpayment should have been brought to the Applicant’s attention in this email. A specific time to discuss the payslips could have been made to avoid multiple calls from Mrs Wade in trying to resolve the matter.
Although Ms Creffield and Mrs Wade’s prior longstanding friendship may have affected some of the formalities of the investigation process, Ms Creffield did consider Mrs Wade’s response of the initial allegation of overpayment on 31 October 2022 and this was the time where Ms Creffield had made the allegations more clearly. Ms Creffield also considered placing Mrs Wade in a different role with a shorter week in facilitating a transition for her. It was at this instance where the sufficient enquiry was made regarding the serious misconduct and demonstrated that Ms Creffield complied with the Code.
I do not find that Mrs Wade was dishonest. However, Mrs Wade should have consulted with Ms Creffield regarding changes in pay arrangements considering that there were no issues with payroll three months before the incident. I find that the Respondent could have had reasonable grounds for holding the belief that the Applicant engaged in serious misconduct which was communicated and raised with the Applicant, although there were some issues with procedure.
The Respondent complied with the Small Business Fair Dismissal Code in establishing a reasonable belief of serious misconduct arising from the overpayment. As a result, the jurisdictional objection is upheld and the Application is dismissed. I Order accordingly.
DEPUTY PRESIDENT
[1] Yaraka Holdings Pty Ltd v Giljevic [2006] 149 IR 339 at [65]; Summerton v Jabiru Golf Club Inc (unreported, AIRC, Duncan SDP, 6 June 2001) Print PR904938; Ponce v DJT Staff Management Services Pty Ltd [2010] FWA 2078 at 66 (Roe C).
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