Kellie Smith v Coles Supermarkets Australia Pty Ltd
[2015] FWC 5446
•17 SEPTEMBER 2015
| [2015] FWC 5446 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Kellie Smith
v
Coles Supermarkets Australia Pty Ltd
(U2015/5536)
COMMISSIONER HAMPTON | SYDNEY, 17 SEPTEMBER 2015 |
Application for relief from unfair dismissal – manager – physical and verbal conduct involving suspected shoplifters – whether applicant aware of relevant procedures and sufficiently trained – whether conduct inconsistent with requirements – whether valid reason for dismissal – delay in suspension pending disciplinary process – whether conduct condoned – valid reason for dismissal – whether dismissal harsh – dismissal harsh and unreasonable in all of the circumstances given the absence of notice of pay in lieu – reinstatement not appropriate – compensation awarded.
1. Background and Case Outline
[1] Kellie Smith has made an application under s.394 of the Fair Work Act 2009 (the FW Act) seeking a remedy for an alleged unfair dismissal by, Coles Supermarkets Australia Pty Ltd (Coles).
[2] Coles is a well-known large Australian supermarket chain and Ms Smith was employed at the St Clair store in South Australia.
[3] Ms Smith commenced with Coles around 7 July 2014 and worked in the role of Night-fill Manager until her dismissal on 12 May 2015.
[4] Ms Smith was terminated on the basis of alleged serious misconduct principally associated with her involvement in an incident with two female “teenage” 1 customers on 29 April 2015. It is common ground between the parties that the teenage customers were suspected to be potential shoplifters. The incident resulted in a verbal and physical altercation between the applicant and one of the two teenage customers.
[5] There is no dispute that Ms Smith was protected from unfair dismissal within the meaning of s.382 of the FW Act and there is a valid application before the Commission.
[6] Ms Smith was represented by Mr Blairs of the Shop, Distributive and Allied Employees Association (SDA) and contends that there was no valid reason for termination. That is, her behaviour in relation to the incident was not a wilful or deliberate breach of Coles’ policies and as such was not inconsistent with the continuation of the contract of employment. In relation to the incident, the applicant contends that she was acting in self-defence and was provoked. Her response to being “assaulted and abused” by the two teenagers was considered by her to be reasonable and proportionate in the circumstances. In the alternative, Ms Smith asserts that if a breach of policies is found, then it was not a serious breach.
[7] Furthermore, Ms Smith submits that Coles was aware of the incident but took no action for over a week. In addition, Ms Smith asserts that the decision to terminate was not proportionate to the events and as such was harsh.
[8] Ms Smith also contends that she was not properly inducted in relation to the relevant policies and that the training she received was grossly inadequate in relation to dealing with shoplifters and threatening situations as a manager. Ms Smith concedes that should she had had proper training she may have handled the situation differently and would have been happy to comply with any training in that regard.
[9] Ms Smith seeks reinstatement and contends that the events were nothing more than an isolated incident and should be treated as such. Furthermore, the applicant contends that there has been no breakdown in the relationship between the applicant and the employer and that Coles could easily accommodate the applicant back into one of its stores and into the role undertaken prior to her termination.
[10] Coles was represented by Ms Anderson, in house legal counsel, and contends that the dismissal was not harsh, unjust or unreasonable and that the application itself should be dismissed. Rather, Coles contends that it had valid reasons for dismissal connected with Ms Smith’s involvement in the incident on 29 April 2015 and her subsequent conduct in a termination of employment meeting on 12 May 2015.
[11] Coles position is that Ms Smith was terminated due to her conduct breaching Coles’ Code of Conduct and the Safe Working Procedure (SWP) on “Threatening Situations”. That is, it argues that Ms Smith acted in such a manner as to escalate the incident with the teenage girls by her comments and actions and this ultimately led to the applicant aggressively swearing at, pushing and holding, one of the customers by the collar.
[12] Coles further contends that Ms Smith had completed the SWP Induction Training which included the Threatening Situations SWP and the Code of Conduct and that the applicant acted in contravention of these requirements.
[13] Furthermore, the reasons for dismissal included the applicant’s alleged dishonesty following the incident and the response from the applicant in the disciplinary meeting on 12 May 2015. Coles contends that Ms Smith showed little remorse or contrition and no recognition that her behaviour inflamed the incident and created risks for her and the staff more generally. Coles contends that as a result of the above, the applicant’s summary dismissal on 12 May 2015 was fair and that no remedy should be granted.
[14] This application was subject to a hearing following consultation with the parties as contemplated by s.399 of the FW Act.
2. The evidence
[15] Ms Smith provided a witness statement and gave evidence in the matter. Ms Smith also relied on the evidence of Mr Ashiqulbari Mohammed – Nightfill Team Member.
[16] Coles provided witness statements and led evidence from the following employees:
● Shawn Haverland, Regional Manager;
● Saksia Scott, Online Manager;
● Rochelle Martin, Store Support Manager;
● Jayne Willsdon, Code Checker;
● Sharon Buttfield, Team Member; and
● Concetta Citroni, Team Member.
[17] The Commission also received into evidence CCTV footage which showed most, but not all, of the events of 29 April 2015. The footage did record the most important interactions including the final physical altercation between Ms Smith and one of the teenage girls. I note that it is CCTV footage, and not video, and does not have sound, however, it is useful objective evidence of many of the events in question.
[18] The CCTV footage was shown to the key witnesses who were involved in the events of 29 April 2015.
[19] I do not consider that Ms Smith attempted to mislead the Commission however I do consider that she had a tendency to fill in some of the gaps to suit her case. This included what she described as the motivation for certain actions, the details of her induction, and the basis upon which an alleged threat from one of the teenage girls was raised in the course of the dismissal discussion.
[20] I found that Mr Mohammed was in general terms a credible witness however some of his evidence was not convincing about the detail of the exchanges and I note that he was some distance away from them at times.
[21] Mr Haverland’s evidence was generally convincing and I accept his version of the dismissal discussions and the basis upon which he made the termination decision.
[22] I accept the evidence of Ms Scott about the induction of Ms Smith and the information provided to the applicant in that regard and related matters.
[23] Ms Martin was an excellent and convincing witness. She consistently and accurately recalled details of the events and the circumstances, provided explanations for her evidence and made appropriate concessions. Where her evidence conflicts with any other witness, including Ms Smith, I accept Ms Martin’s version of the facts.
[24] I found that the evidence of Ms Citroni, Ms Buttfield and Ms Willsdon as to the facts was generally reliable. However, I note that Ms Willsdon did not recall the detail of what was said at various points.
[25] Coles did not lead evidence from the St Clair Store Manager. That Manager was not a direct witness to the events and did not take part in the investigation leading to the decision to dismiss Ms Smith. Ms Smith contends that the Commission should draw a negative inference from the failure to call the Store Manager, given that he was aware of the incident shortly after the events and took no steps to deal with the matter. The inference being, in effect, that the Store Manager (and Coles) did not initially view Ms Smith’s conduct as serious or warranting disciplinary action. Coles opposes the drawing of any negative inference given that the Store Manager was not a witness to any of the events and that the absence of an immediate follow-up was not relevant as the issue was dealt with immediately when Human Resources (HR) at Coles became aware of the matter.
[26] It is open for the Commission, but not necessary, to draw such a negative inference where there is an unexplained failure to call evidence. 2 It is clear on the evidence that the Store Manager was made aware of the incident and took no steps to follow up. He was subsequently disciplined about his non-action and as soon as HR at Coles became aware of the incident, immediate action was taken. The fact remains that this delay occurred and Ms Smith worked in the period between the incident and her suspension, some eight days later.
[27] In these circumstances, I do not propose to draw the negative inference from the absence of evidence from the Store Manager as sought on behalf of Ms Smith. 3 It does however remain the case that there is no evidence about why the Store Manager did not act on the information provided and the employer is also not entitled to any inference, positive or otherwise, in that regard which is not supported by direct evidence. The balance of the evidence is that Coles has firm and generally consistently applied policies for dealing with similar circumstances, including at the store concerned.
3. Ms Smith’s employment and the events leading to her dismissal
[28] Ms Smith commenced work with Coles on or around 7 July 2014 and was employed as a full time salaried night-fill manager. Prior to obtaining this position, Ms Smith had previous retail experience including at Woolworths. Ms Smith was hired through the ‘Successful Start’ program, which was targeted at hiring people with prior management experience.
[29] Ms Smith worked various rosters whilst she was employed with Coles. Generally speaking, Ms Smith would work a 6/4 roster, which include working Monday to Thursday in week 1 and Monday, Tuesday, Wednesday, Thursday, Saturday and Sunday in week 2. When first employed in the position, Ms Smith worked from 3.00 pm to midnight. This later changed to 4.00 pm to 1.00 am.
[30] At the time of the events leading to this application, Coles St Clair did not have security guards in the store. From 6.00 pm, when trading on relevant days, Coles St Clair ordinarily had a reduced number of staff working. There was always a duty manager rostered on until the shop closed. Other employees consisted of the night-fill team, small number of check-out operators and customer service staff. After about 9.30 pm, the only employees were night-fill staff.
[31] Ms Smith began her induction on her first day of work. Ms Smith was inducted by Ms Scott who was the most senior manager at the store at the particular time.
[32] I am satisfied that Ms Smith was taken through the store mandatory and department specific policies and SWPs and that this included the “Threatening Situations” SWP. At the end of the training the relevant Code of Conduct and the SWP Induction Training Record was signed off and completed by Ms Smith and Ms Scott. 4
[33] The Threatening Situations SWP provided as follows: 5
“Working Safely
● In the very rare occurrence of threatening situations in our stores, it is extremely important that we know how to manage these situations
● Contact your manager if you notice people acting suspiciously, if you feel threatened or if there is an unsafe situation
● Always treat team members, contractors, visitors and customers in a non-threatening manner. Eg. Treat others with respect, be calm, polite and listen, do not raise your voice, swear or become aggressive
● Ensure emergency contact numbers are accessible and in the store mobile contacts
● Keep cash levels in registers to a minimum by making regular cash clearances throughout the day
● Where possible, walk with another team member when walking to a vehicle during early or late trade
● Report inadequate lighting within the car park to your store manager
Situations with no immediate danger
If someone becomes frustrated you can try to defuse the situation by showing empathy and working together to determine a solution
DO NOT raise your voice, use threatening body language, react or respond to insults
Always keep a safe distance and stay calm
● Listen and demonstrate empathy to try and understand what the issue is
● Focus on achieving a resolution
● If the situation escalates or you begin to feel unsafe or in danger:
- Where possible, remover yourself from the situation and seek assistance from a manager
- Follow the steps set out in the next section
If you are involved in a threatening situation, feel unsafe or are in danger
DO NOT chase, touch or handle an offender in any way
ALWAYS cooperate, obey instructions and ******************* 6
● If possible, remove yourself and others from the immediate area
● Stay as calm as possible
● Seek support by calling “*****” over the PA System
- ***** is used to request urgent assistance in response to a potential theft or altercation
● If safe to do so, observe any distinguishing features e.g. build, clothes. ethnicity
… …
Following a threatening situation
● Notify a manager as soon as it is safe to do so
● Write down any details and distinguishing features
● All aggressive, violent or threatening incidents must be reported to the Serious Incident Helpdesk (18********) and your Regional Manager
- Ensure you report the incident details accurately
● Complete an online incident report
Should the Police be called?
● Each incident needs to be judged on a case-by-case basis
● If a physical assault or direct threat has been made, the Police should be called to assist with the situations
● A crime does not have to occur for the police to attend, they can be called to prevent a breach of peace and they have the ability to physically remove someone from the store if required”
[34] The relevant code of conduct 7 set out obligations that are consistent with appropriate behaviour in workplaces such as those conducted by Coles. This included respectful conduct and the leadership required of managers.
[35] The need for compliance with this SWP and policies more generally is set out in the applicant’s letter of appointment 8 and reinforced by the extensive efforts made by Coles in that regard during the induction process.
[36] There is no evidence that further specific training was provided to Ms Smith by Coles about how to deal with potential shoplifters or unruly customers. This must be considered along with the fact that Ms Smith had previous retail experience with another major retailer and had experience as a retail manager including through an on the job ‘Successful Start’ program for managers.
[37] It is a reasonable inference that Ms Smith should have understood that in the case of suspected shoplifters or other customers where a threatening situation might arise, Coles staff were to observe, follow them and call for assistance. Ms Smith should also have understood that staff were not permitted to threaten, provoke, chase, touch or handle the “offender” or check their bags. Further, Ms Smith should have appreciated that the basic rules also applied to managers when called in by other staff.
The events prior to 29 April 2015
[38] The two teenage girls at the centre of the later events had been in the St Clair store earlier and it is clear that they were considered by the staff to be potential shoplifters. During one such attendance on 14 April 2015, Ms Martin followed the SWP and “over-serviced” them in a low-key and appropriate manner. That is, Ms Martin approached the girls and asked what was going on. Ms Martin had a low-key conversation and reminded them that they should not put things in their bags without paying for them. The girls said they understood and this apparently led to them to subsequently leaving behind some goods and exiting the store without incident. The evidence is that the two girls were not aggressive and responded to this low-key management. It is also likely that one of the teenage girls was of limited intellectual ability.
[39] There is some evidence that employees at the St Clair store had been more interventionist than the strict application of the SWP would permit. However, there is no reliable evidence that any such intervention has involved a verbal or physical altercation with a customer or attempts to prevent a customer leaving the store.
[40] In that regard, I note that there is some evidence, which I accept, that another employee had confronted some children who were apparently stealing some chocolates and that later, a group of children returned to the store and yelled threats to the employee through an outside window.
[41] On or around 20 April 2015, Ms Smith became aware that the two girls (whom she had not seen prior to that point) had been in the store and had gone to the female toilets located adjacent to the store. Ms Smith watched the toilets and noted that the girls were in there for a long period. Ms Smith then directed another employee, Ms Citroni, to come with her to the toilets. Knowing that the teenage girls were in one of the cubicles and could hear them, Ms Smith pretended they did not know the girls were in the toilet and stated to Ms Citroni words to the effect of “oh we know those teenage girls were stealing and the next time they come in we should call the police, maybe we should call them now”.
[42] On the following day, Ms Smith advised Ms Martin of the above events and Ms Martin informed the applicant that she should not have followed the girls and gone into a closed off area where no one could see them. Ms Smith was also informed that as the manager on duty at that time she had left the store unattended without advising other staff and this was also not acceptable.
The day of the incident
[43] On the day of the incident, 29 April 2015, the applicant began work at around 3.00pm. The shift was relatively uneventful. At approximately 6.30pm Ms Smith was alerted by a kiosk employee that the two teenage girls were in the store. Ms Smith requested the kiosk employee to alert Ms Martin or Ms Buttfield (the duty managers) and advised that she would follow the girls. Ms Smith proceeded to look for the two customers.
[44] Ms Smith found them in aisle 10, which is the hair and beauty aisle. Ms Smith approached an employee, Ms Willsdon, who was working in that aisle and told her to watch them from the other end of the aisle concerned.
[45] Ms Smith was in close proximity to the teenage girls and one of them stated to the applicant “what the f*** are you looking at us for?”. Ms Smith replied “if you are doing nothing wrong then you don’t have a problem”. At this point, Ms Martin and Ms Buttfield arrived and Ms Smith said to them loudly in a voice that would be clearly heard by the teenage girls “they are stealing, they have stuff in their pockets”. The teenage girls responded to Ms Smith that they do not have anything, they are not stealing and to leave them alone. Ms Smith responded that she had seen them and that they have makeup in their jumper pockets.
[46] Ms Martin stepped in and tried to have a quiet conversation with the girls. Ms Martin explained to the girls that they had spoken about this a couple of weeks ago and that they can’t put items in their bags without paying for them. Ms Smith was standing behind Ms Martin and interjected by saying words to the effect of “you come in here all the time, give us what you’ve got and don’t come back….we know you’re stealing”. Ms Martin gestured for Ms Smith to back away and not to aggravate the situation. The girls then started dropping stock from their bags onto the floor and throwing some items near to the staff following them. This included a glass item, which fell near Ms Martin who then stated that if (the girls) were going to behave like that then they would need to leave the store and not finish their shopping. The girls responded with words to the effect of “you can’t touch us”. Ms Martin indicated that she would have to call the police.
[47] At one stage, one of the customers turned around and stated that she had a disability. Ms Smith replied to the effect that she can’t have too much of a disability considering she seemed to know what she was doing.
[48] Ms Buttfield cleaned up the broken jar and Ms Martin left the immediate area and used a phone to call the police. Ms Smith continued to follow the girls.
[49] In another aisle, Ms Smith stood in front of the teenage girls and said words to the effect of “you’re not finishing your shopping tonight, it’s time to leave….give us what is in your bags”. At this point, Ms Smith vigorously attempted to take a shopping bag away from one of the customers. Ms Smith said to her “who knows what else you have in your bag to throw”. As this occurred, the customer pushed Ms Smith. Ms Smith did not react. The customers continued to walk around the store and Ms Smith continued to closely follow them.
[50] When the teenage girls reached another aisle, Ms Smith encouraged them to leave and they proceeded to head to the front of the store. Whilst doing this they yelled abuse over their shoulders and they appeared to think it was a joke.
[51] As the two girls headed toward the main entry/exit point at the front of the store Ms Smith went in front of them and stood in their way and told them to pay for their goods and leave. Although Ms Smith contends that this was to prevent them going back into the store proper, the evident effect of the comments and the physical action actually prevented the girls from walking out of the store (without paying for any goods in their possession). The girls then walked back along the front of the store and Ms Smith again stood directly in their way and in effect attempted to direct (shepherd) them through the self-service checkouts. Ms Smith reiterated that the girls should pay for their stuff and leave.
[52] The effect of these events was that the two girls were now prevented from going back into the store proper and their only way out was to leave via the self-service checkouts and to pay for any goods in their possession.
[53] One of the girls then said words to the effect of “leave me alone or I’ll hit you”. Ms Smith responded with words to the effect of “I’m not scared of you come on then hit me, go on hit me”. The two girls didn’t react at that point and Ms Smith said again “come on then hit me”. One of the girls grabbed the other girl and tried to lead her back down one of the aisles. Ms Smith stood in front of them and one of the two customers said something to Ms Smith along the lines of “you can’t f***ing make us leave. There’s not many of you. You can’t touch us. You can’t make us leave. I know my rights.”
[54] Ms Smith did not want them walking around the store so she stood directly in front of them. As Ms Smith did this, one of the customers pushed her and she fell against the display at the end of the aisle. Ms Smith yelled words to the effect of “I will have you up for f***ing assault”. Ms Smith quickly regained her balance and aggressively pushed the customer back. Ms Smith then grabbed the customer around the collar and again aggressively pushed her and indicated that they should get out of the store. The teenage girl was saying words to the effect of “f***king get off me”.
[55] Ms Willsdon and Ms Martin intervened and eventually separated Ms Smith and the teenager. Ms Smith was led away by another employee. The two teenagers were immediately led through the checkout area and left the store. On advice from the police, Ms Martin and two other staff members went outside and noted the general directions in which the two girls had walked away.
[56] When Ms Martin returned she advised Ms Smith that the police were on their way and that she needed to be careful as the customer could charge her with assault as it is “all on camera”. Ms Smith responded that she was defending herself.
[57] Shortly afterwards the police arrived and Ms Smith was called into the office and she was asked a few questions. Ms Smith then went back to work.
[58] At about 10.00 pm the police returned to the store. The constable handed Ms Smith two 2.25 litre bottles of soft drink and advised that this was some of the stock that the two young customers had stolen. The police advised Ms Smith that they had arrested and charged the two customers and banned them from the St Clair shopping centre and surrounding areas.
[59] Ms Smith continued to work the rest of her shift until 1.00am. At the end of her shift she was the only one left at work and, regrettably in the circumstances, there were no arrangements made for her to be accompanied whilst locking up the store and walking to her car. No further incidents took place involving Ms Smith and the teenage girls.
The events following the incident and leading to dismissal
[60] The day after the incident, Ms Smith arrived for her shift at the usual time. Ms Smith did not report the incident as Ms Martin (her immediate manager) had been present. There was no follow-up at that time with Ms Smith by Coles management either in relation to her role in the incident or her welfare.
[61] Ms Martin reported the incident to the St Clair store manager and anticipated that the matter would be investigated.
[62] During the following week, Ms Smith did her full shift on Thursday 30 April 2015, had a rostered day off on Friday 1 May 2015 and worked Saturday 2 May and Sunday 3 May 2015. Ms Smith was absent on carer’s leave on Monday 4 May and worked Tuesday 5 May and Wednesday 6 May 2015. At no stage during this period did management contact Ms Smith in relation to the incident.
[63] In due course, Coles HR became aware of the incident and the existence of the CCTV footage. Having viewed that footage an investigation was commenced including into why the Store Manager has not dealt with the issues and/or advised HR. As indicated earlier, ultimately disciplinary action was being taken against the Store Manager. Mr Haverland, who was involved in this process, took the view that the matter was serious enough for Ms Smith to be stood down pending an investigation.
[64] Ms Smith was stood down with pay when she arrived for work on Thursday 7 May. Ms Smith expressed her surprise and disappointment about this turn of events and was advised that it was a serious matter and she may lose her job over it.
[65] I note that during this time period Ms Smith was apparently advised by Police that one of the girls had been charged with shoplifting, assault and malicious damage.
[66] On 11 May 2015, Ms Martin advised Ms Smith of a disciplinary meeting that was to be conducted in relation to the incident and that she should bring a support person.
[67] The disciplinary meeting was conducted on 12 May 2015 by Mr Haverland and also in attendance was Ms Smith with her support person from the SDA - Ms Turner, and Ms Martin as the Store Support Manager.
[68] Ms Smith and Ms Turner were provided with a copy of a formal “Discussion Record” and Mr Haverland read out each allegation contained in the record. Ms Smith was asked to respond to each of points and Mr Haverland noted her response.
[69] There were three major issues raised with Ms Smith at the outset of the disciplinary meeting which were as follows:
“Section 2 – Reason for discussion [what has the team member done/alleged to have done that fails to meet our business expectations.]
The reason for today’s meeting is to discuss our concerns regarding your conduct, in relation to the physical altercation you had with customers on 29/4/15, and to give you the opportunity to respond to those concerns.
We acknowledge that the customers in question were potentially planning to steal goods and that they were abusive and otherwise behaving in an unacceptable way during the time in question. However a preliminary investigation which included a review of CCTV footage and witness testimony, has highlighted some concerns regarding your conduct. The preliminary findings of the investigation are outlined below
1. In the time leading up to the actual physical altercation, you engaged in conduct that inflamed the situation rather than subdued it. More specifically it alleges that:
a. When Rochelle Martin approached the two customers for the first time on the day in question, you told her, in a volume that was plainly audible to the two customers. “They’re stealing – they have stuff in their bags” (or words to that effect).
b. When Rochelle was in process of telling the two customers that they should leave the store and that they would not be served, you interjected (from behind Rochelle) saying “we know your stealing” and “get out” (or words to that effect).
c. As you, at times very closely followed the two customers throughout the store, you spoke to them in a ‘demeaning’ or ‘smart arse’ tone and way, whilst you were repeatedly trying to get them to leave.
2. Directly prior to the physical altercation (near the entry to the assisted checkout area) you engaged in conduct which seriously inflamed the situation and likely contributed to, if not caused the physical altercation to occur. More specifically it is alleged that:
a. You continued to speak to the two customers in a ‘demeaning’ or ‘smart arse’ tone and way, and in raised voice, whilst saying words to the effect of “You need to leave.” and “I’m not letting you shop anymore.” and “Pay for what you have and leave.”
b. You physically tried to block (by standing in front of the customer, at times with your arms out) the path of the two customers to prevent them from remaining in the store.
c. You, in response to one of the customers saying “Get out of my face or I’ll hit you.” (or words to that effect) said, “Come on then hit me.” and “Go on hit me” and/or “What are you going to do – hit me?” (or words to that effect). Essentially it was concluded that you were effectively egging the customers on, or daring them to follow through with their threat.
d. You again stepped in front of the two customers to try and prevent them from remaining in the store.
3. After one of the customers pushed you, you reacted with significant physical response which is not consistent with self-defence. More specifically:
a. You pushed one of the customers (whom we understand to be under the age of 18 and whom had been shouting “I have a disability”) with 2 hands and it caused her to stumble backwards.
b. You then confronted that customer again, grabbed her by her collar and pulled her towards you before you pushed her yet again.
c. As/around this time you screamed, “I’m going to call the cops and have you on f***ing assault.” (or words to that effect) 9
[70] The disciplinary meeting lasted for approximately two hours and there were various breaks during which Coles considered Ms Smith’s responses.
[71] Early in the meeting Ms Smith raised the notion that one of the young girls had threatened to stab her and that she was then acting in self-defence when she grabbed the customer. Ms Smith also denied that she had been inducted into the relevant SWPs.
[72] Amongst other considerations, management took the view that Ms Smith was being dishonest about the stabbing threat and the alleged failure to properly induct her on the relevant SWPs. It also considered that Ms Smith was not taking any responsibility for her actions and there were many opportunities for her to walk away and observe the girls from a safe distance in line with the Coles SWP.
[73] After considering Ms Smith’s position on the various issues raised and the circumstances more generally, Mr Haverland reconvened the meeting and informed Ms Smith that he was considering terminating her employment and asked whether there is anything further she would like to add or have considered. Ms Smith did not provide any response.
[74] Following a further break, Mr Haverland concluded that Ms Smith’s actions were a serious breach of a SWP by a manager and were serious enough to warrant termination of employment. At the end of the meeting Mr Haverland informed Ms Smith that her employment was terminated. A termination letter was prepared and provided to Ms Smith on 13 May 2015 and this confirmed that the termination was effective as from 12 May and was based upon serious and wilful misconduct. No pay in lieu of notice was provided.
[75] I add that shoplifting is an issue for Coles at the St Clare store and more broadly and that on occasions, this may involve dealing with difficult and potentially aggressive individuals. There is some evidence that staff are encouraged and rewarded for preventing shoplifters. The weight of evidence is that this encouragement is directed at actions that are consistent with the SWPs and induction training, and that any form of physical intervention by staff is very uncommon and is not condoned.
4. Was Ms Smith’s dismissal unfair within the meaning of the FW Act?
[76] Section 385 of the FW Act provides as follows:
“385 What is an unfair dismissal
(1) A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[77] Ms Smith was dismissed, the employer is not a small business within the meaning of the FW Act, and the concept of a genuine redundancy is not relevant here.
[78] On that basis, the dismissal will be unfair if it is found to be harsh, unjust or unreasonable.
[79] The FW Act relevantly provides 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.”
[80] It is clear that s.387 of the FW Act contemplates an overall assessment as to the nature of the dismissal being made by the Commission. In so doing, the FW Act sets out a number of considerations that must, where relevant, be treated as a matter of significance in the decision making process and weighed up accordingly.
[81] It is convenient to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.
Section 387(a) – whether there was a valid reason for the dismissal related to Ms Smtih’s capacity or conduct (including its effect on the safety and welfare of other employees)
[82] Valid in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly. 10
[83] In applying this approach, it is also important to recognise that conduct occurs in a context and this must also be taken into account. This might include the circumstances in which any misconduct occurs and the events leading to that point. 11
[84] It is also clear from the authorities that the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts before the Commission. That is, it is not enough for an employer to rely upon its reasonable belief that the termination was for a valid reason.12 Equally, facts justifying dismissal, which existed at the time of the termination, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal. 13
[85] In Woolworths Limited (t/as Safeway) v Cameron Brown14 a Full Bench of the AIRC, after considering the principles in Selvachandran v Peteron Plastics Pty Ltd and the approach of the AIRC in Atfield v Jupiters Limited t/a Conrad Jupiters Gold Coast,15 considered when failure to abide by a policy of an employer would amount to a valid reason for termination of employment and when it would not:
“In summary, a breach of an employer’s policy involving or amounting to a failure to obey a lawful and reasonable direction of the employer sufficient to justify dismissal at common law will amount to a valid reason for termination of employment within the meaning of s.170CG(3)(a) in the sense of a reason that is “sound, defensible or well-founded.” A failure to comply with a direction to do or refrain from doing something in compliance with an employer’s policy will not provide a valid reason for termination of employment where:
(a) the policy, or a direction to comply with the policy, is illegal;
(b) the policy does not relate to the subject matter of the employment or matters affecting the work of the employee; or
(b) the policy, or a direction to comply with the policy, is unreasonable.”16
[86] In Kolodjashnij v Lion Nathan T/A J Boag and Son Brewing Pty Ltd,17 Deegan C determined that:
“Not every breach of a policy will provide a valid reason for termination of employment. However in circumstances where the policy is both lawful and reasonable and an employer has stressed the importance of the particular policy to the business and made it clear to employees that any breach is likely to result in termination of employment, then an employee who knowingly breaches that policy will have difficulty making out an argument that there is no valid reason for the termination.” 18
[87] In this case, the relevant policy and SWP issued by Coles are in my view reasonable and necessary. In the context of a very large number of employees having regular dealings with the public across a large number of stores throughout Australia, the employer is entitled to establish and administer appropriate rules. Those rules emphasise, amongst other matters, the need to avoid physical and other conflict with customers and that the related safety considerations are a much higher priority than the protection of the goods.
[88] I am also satisfied that Ms Smith’s attempts, in the disciplinary meeting, to deflect from the actual conduct by denying any knowledge of the relevant SWP was also inappropriate given my findings about the comprehensive induction process.
[89] Having regard to all of the evidence, I accept that Ms Smith was, at least initially, principally motivated to protect the interests of Coles. That is, to encourage the girls to leave the store having paid for any goods in their possession. This also took place in the context where the girls were making a nuisance of themselves by yelling and throwing some goods, including the glass jar that narrowly missed the other manager.
[90] However, significant elements of Ms Smith’s actions were inappropriate and had the effect of quickly and unnecessarily escalating the conflict, including by:
● Directly confronting the girls with accusations before there was any suggestion that they were actually attempting to leave the store without paying for the goods;
● Closely following the girls and making direct accusations that they were shoplifters, including when Ms Martin was attempting to handle the situation;
● Standing in their way in a shopping aisle, whilst Ms Martin was off ringing the Police, and attempting to physically grab a bag away from one of them;
● Not permitting them to leave the store via the main entry/exit – by standing in front of them and telling them and others that they could not leave because they had goods that were not paid for;
● Responding to taunts of one of the girls by goading them into a physical confrontation; and
● Effectively, leaving the girls with no option but to leave with the goods (and paying for them) or push their way past Ms Smith back into the store.
[91] In terms of the physical altercation:
● Ms Smith had blocked the path of the girls and this had the effect of attempting to shepherd them through the checkouts and she was then pushed against the aisle end; and
● Ms Smith then pushed back in an aggressive manner and grabbed the shirt of one of the girls (around or near the collar) and pulled and pushed her in a threatening manner.
[92] Ms Smith’s physical response to being pushed may have been reactive but was not simply self-defence and was disproportionate in all of the circumstances. It is evident that Ms Smith was angry with the conduct of the teenage girls and with what she considered to be them challenging her.
[93] I have also carefully considered the notion that one of the girls had threatened to stab Ms Smith. There were a number of other staff in the immediate area and none heard this despite being in a position to do so. Further, Ms Smith’s action in moving back towards the girl and grabbing her were not consistent with any real appreciation of being threatened in that manner. It should be noted that I am not making a finding whether this allegation (that a threat was made by one of the girls) was reported by Ms Smith to the Police at some point. Rather, I am not satisfied, based upon the evidence before the Commission, that this threat was made by the one of the girls in the manner alleged.
[94] The conduct of Ms Smith was not consistent with the SWP and in any event was not appropriate, particularly from a manager. In reaching this view, I have taken into account the apparent absence of specific management training in dealing with these circumstances, beyond the induction process. The SWP does not clearly specify what a manager is to do when called in. However, it is reasonably clear that any action being taken by the manager would involve taking some leadership and acting in a manner consistent with the SWP itself.
[95] Some of the above elements also go to the whether some of Ms Smith’s actions were serious mistakes rather than deliberate misconduct.
[96] Having regard to all of the facts and circumstances, I am satisfied that there was a valid reason for the dismissal related to Ms Smith’s capacity or conduct (including its effect on the safety and welfare of other employees).
Section 387(b) – whether Ms Smith was notified of the reasons for dismissal
[97] This consideration requires the Commission to assess whether the applicant concerned was relevantly notified of the reasons leading to the dismissal before that decision was taken. 19
[98] The evident purpose of this consideration is that notification of the valid reason to terminate must be given to the employee before the decision to terminate the employee is made and the notification needs to be in explicit and plain and clear terms.
[99] Ms Smith accepts that she was notified of the reasons and this is demonstrated by the evidence.
Section 387(c) – whether Ms Smith was given an opportunity to respond to any reason related to his capacity or conduct
[100] The relevant reasons are those arising from the valid reasons found by the Commission. This consideration is therefore directly related to the above discussion.
[101] This process contemplated by the Act does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly. The question becomes whether Ms Smith was aware of the precise nature of the employer’s concern about her conduct and had a full opportunity to respond to these concerns. 20
[102] Ms Smith accepts that she was given the relevant opportunity and this is demonstrated by the evidence.
Section 387(d) – any unreasonable refusal by the respondent to allow Ms Smith a support person
[103] Ms Smith was accompanied by an official of the SDA in the disciplinary meeting.
Section 387(e) – if the dismissal is related to unsatisfactory performance by Ms Smith – whether he has been warned about that unsatisfactory performance before the dismissal.
[104] This consideration relates to performance of the job. Performance in this context includes the employee’s capacity to do the work, and the diligence and care taken with that work. 21
[105] The dismissal related to conduct and this consideration is not relevant.
Section 387(f) – the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.
Section 387(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.
[106] Coles is a very large employer and has dedicated human resources staff.
Section 387(h) - other matters considered to be relevant
[107] Amongst other considerations, the Commission should consider the impact of the dismissal upon the applicant given all of the circumstances. This includes consideration whether the dismissal was harsh in the sense that it was disproportionate to the actual conduct found by the Commission. 22
[108] The factors to be considered in that context include the nature of the conduct and the circumstances of the workplace, and the circumstances of Ms Smith and the impact of the dismissal upon her.
[109] Coles did not provide notice or pay in lieu thereof. The notice of termination of employment provisions in s.117 of the Act, which do permit payment in lieu of notice of termination, would in accordance with s.123(1)(b) of the Act not apply if the conduct of the applicant could be described as being serious misconduct. This term is defined by Regulation 1.07 in the following terms:
“1.07 Meaning of serious misconduct
(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.
(2) For subregulation (1), conduct that is serious misconduct includes both of the following:
(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:
(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.
(3) For subregulation (1), conduct that is serious misconduct includes each of the following:
(a) the employee, in the course of the employee’s employment, engaging in:
(i) theft; or
(ii) fraud; or
(iii) assault;
(b) the employee being intoxicated at work;
(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.
(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.
(5) For paragraph (3) (b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”
[110] I have earlier found that the initial intention of Ms Smith was to protect her employer’s business and was later seeking to do so by shepherding the teenagers out of the store – provided they paid for any goods. However, I have also found that Ms Smith’s conduct directly exacerbated the situation and that some of her actions were the result of becoming angry and then being drawn into a physical confrontation that she had provoked to a large degree. This was serious conduct that created a risk to herself and others. This was the first such incident involving Ms Smith and some “heat of the moment” decisions were made by the applicant. Ms Smith was also attempting, in the disciplinary meeting, to deny the impact of the extensive induction process. In all of these circumstances there remains a question as to whether the conduct found by the Commission warranted dismissal without notice.
[111] During the course of the hearing I raised with both parties the potential implications of the initial delay in Coles dealing with the incident and the fact that Ms Smith was permitted to work for a period and then was ultimately dismissed without notice. In particular, I referred the parties to the following approach adopted by Harrison DP in Rowland andRollason v Austar Coal Mine Pty Limited[2010] FWA 8011 where the following was stated:
“[19] Mr Endacott relied upon the doctrine of condonation referred to in A/asian Transport Officers’ Association v Department of Motor Transport which referred to the principal in the following manner:
“The doctrine of condonation has always formed a part of the law applied by the NSW Industrial Commission. It was defined by Cook J in the following terms:
“Where an employer with a full knowledge of an act amounting to misconduct justifying summary dismissal does not exercise the right which he thereby possesses but elects to treat the contract as still subsisting he is regarded in law as having waived the right of summary dismissal for that offence or having ‘condoned’ that offence so that he cannot, in an action for wrongful dismissal based on misconduct, rely upon an offence which he has waived as justification for his action” [1967] AR (NSW) 16.”
[20] Knowledge by Deputies and Undermanagers is unproven. The best information is that Mr Copp warned against the continuation of the practice. There is no doubt that Mr Fulham was unaware of the practice. The full knowledge requirement is not met in such a way as to invoke the doctrine of condonation.”
[112] Coles contends that it has not condoned the conduct of Ms Smith and that as soon as HR became aware of this issue, it immediately took steps to investigate the incident and suspend Ms Smith. In terms of the earlier knowledge of the Store Manager, it contends that he was not following appropriate procedure and Coles should not, in effect, be compromised due to that inaction.
[113] Ms Smith contends that the delay in raising the matter with her would militate against the finding of serious and wilful misconduct, or at least summary dismissal without notice. Ms Smith asserts that based on the evidence, the Commission should be satisfied that the Store Manager was aware of the incident on the day following or possibly on the night the incident occurred, and he chose to do nothing about it. As such, the applicant contends that Coles, in failing to act immediately, have waived any right to terminate her without notice.
[114] The decision in Rowland did distinguish between the various levels and knowledge of the management staff.
[115] Ms Smith’s manager advised her immediately after the incident that her conduct could lead to issues with the police, but did not warn her about the potential breach of the SWP or other policy and Coles did not takes steps to have her stood aside at that point or at any time in the following seven days.
[116] The Store Manager was, in effect, responsible for taking or initiating a review that might lead to the appropriate disciplinary action and did not do so. This does not in my view mean that Coles has condoned the conduct so as to be prevented from relying upon the conduct as the basis for a valid reason or more generally. However, the decision not to provide notice or make a payment in lieu of notice must be considered in terms of whether the dismissal was harsh and/or unreasonable in all of the circumstances.23
[117] Ms Smith also suggested that the decision making process adopted by the employer was flawed. That is, the decision maker, Mr Haverland, did not see the actual witness statements provided by the staff as part of the investigation and did not know some elements of the facts. This included that Mr Haverland was unaware that a glass jar had been thrown by one of the teenage girls. The summary of events and allegations relied upon was representative of the broad facts understood by the employer at the time and was generally consistent with the findings I have made. Ms Smith was provided with a full opportunity to explain her version of the events and to give reasons why a dismissal should not take place.
[118] I do not consider that the process adopted by the employer led to any unfairness in its own right.
Conclusion on nature of dismissal
[119] On balance, I consider that Ms Smith’s dismissal was harsh and unreasonable. The lack of notice or pay in lieu and the impact upon her given that fact and the circumstances more generally was unfair.
[120] As a result, the dismissal was unfair within the meaning of the FW Act.
[121] The relatively narrow basis upon which the dismissal has been found to be unfair is however also relevant to the determination of the matter more generally.
5. Remedy
[122] Ms Smith seeks reinstatement as a remedy in this matter.
[123] Division 4 of Part 3-2 of the FW Act relevantly provides as follows:
“Division 4—Remedies for unfair dismissal
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) the FWC may make the order only if the person has made an application under section 394.
(3) the FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
...
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(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. 24
(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.
393 Monetary orders may be in instalments
To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”
[124] The prerequisites of ss.390(1) and (2) have been met in this case.
[125] Section 390 makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. As a result, it is proper to firstly consider whether reinstatement is appropriate.
[126] In Australia Meat Holdings Pty Ltd v McLauchlan 25a Full Bench of the AIRC, having considered the language of the Act, which is comparable to the present provision, said:
“In our view a consideration of the appropriateness of reinstatement involves the assessment of a broader range of factors than practicability.
... ...
We accept that the question of whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate. It is one factor to be taken into account, but it is not necessarily conclusive.
In Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191-192, the Full Court of the Industrial Relations Court said:
"... We accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
At the same time it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of loss of confidence in the employee.
Each case must be decided on its own merits."
While Perkins was decided under the former statutory scheme the above observations remain relevant to the question of whether reinstatement is appropriate in a particular case.”
[127] More recently, a Full Bench of the Commission further considered the statutory scheme surrounding the remedy provisions including the role played by an alleged loss of trust and confidence felt by the employer. In Colson v Barwon Heath, 26 the Full Bench found as follows:
“[26] Section 381(1)(c) of the Act requires an emphasis on reinstatement in providing remedies if a dismissal is found to be unfair, which is one element of the object of Part 3–2. Section 381(2) of the Act requires as part of the object that a “fair go all round” is accorded to both the employer and employee concerned in deciding on and working out remedies under Part 3–2. Section 390(3) of the Act provides that the payment of compensation should not be ordered unless the Commission is satisfied that reinstatement of the person is inappropriate (and an order for compensation is appropriate).
...
[31] The approach of the Deputy President is consistent with that of the Full Bench in Regional Express Holdings Limited trading as REX Airlines v Richards which stated:
“[23] It is clear from the terms of s.390(3)(a) that, in circumstances where a remedy is appropriate, compensation must not be ordered unless the tribunal is satisfied that reinstatement is inappropriate. Seen in the proper context the Commissioner’s statement that reinstatement is the presumptive remedy is not indicative of any error in the decision. The section provides that compensation must not be ordered unless reinstatement has been found to be inappropriate. There is no basis for concluding that the Commissioner interpreted the section differently. Rex’s first submission on remedy must fail.
[24] In relation to remedy, therefore, the first question is whether reinstatement is appropriate.”
[128] The Full Bench further observed that consideration of reinstatement involved a balancing of the relevant considerations based upon evidence, 27 and that the approach outlined in Perkins remains sound and requires consideration of the “rationality” of the basis of the employers concerns.28
[129] In Thinh Nguyen and another v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australian Chapter 29 the Full Bench conveniently summarised the approach required as follows:
“[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:
● Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.
● Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.
● An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.
● The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.
● The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.
[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”
[130] I would emphasise that as confirmed above the discretion to award reinstatement as a remedy is not confined to the question as to whether there is a rational basis for any loss of trust and confidence. The Act requires consideration as to whether reinstatement is inappropriate and this is likely to involve a broad range of factors.
[131] Ms Smith seeks reinstatement and contends that this is the primary remedy under the Act. In light of the absence of any previous warnings or relevant misconduct, Ms Smith also contends that there was no basis for any finding of loss and trust in the employment relationship and, in effect, the remedial benefit of reinstatement should be granted.
[132] Ms Smith also sought that an order for lost income and for continuity of service and leave accruals be made, however she accepted that a reduction in lost income on the basis of misconduct might be appropriate.
[133] Coles strongly opposed any reinstatement of Ms Smith and contends that if any remedy is considered, compensation was appropriate. It further contends that Ms Smith had shown a lack of regard to her obligations as a manager and to the safety of her work colleagues.
[134] Coles also relied upon the short service of the Ms Smith and its view that there could be no confidence that she would comply with the relevant obligations as a manager in the future given the recent conduct and her apparent attitude to that conduct.
[135] As outlined earlier, Ms Smith only acknowledged, in effect, that given appropriate training she would have dealt with the incident better.
[136] Each case must be considered on its own facts and there is no automatic relationship between the findings on merit and remedy. 30 In this case, I have found that the application of the relevant policy and the maintenance of appropriate discipline within Coles are important. Further, the fact that Ms Smith has not shown any real appreciation of her conduct leads to genuine concerns about whether reinstatement is apt. That is, there is a rational basis for the loss of trust and confidence given all of the evidence now before the Commission. The applicant was not a long serving employee with Coles and was in a position of leadership. These factors must be considered along with all of the above circumstances to ensure a fair go all around.31
[137] Despite the potential remedial benefit of reinstatement to Ms Smith, I am satisfied that an order of that nature is inappropriate in this case.
[138] As set out above, under the Act, it is then necessary to consider whether compensation in lieu of reinstatement is appropriate, and if so, to what extent.
[139] A recent Full Bench in McCulloch v Calvary Health Care Adelaide 32 (McCulloch) confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg33 remains appropriate in that regard.
[140] Section 392(2) of the Act requires me to take into account all of the circumstances of the case including the factors that are listed in paras (a) to (g). Without detracting from the overall assessment required by the Act, 34 it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.
The effect of the order on the viability of Coles
[141] Nothing has been put the Commission on this aspect and it is evident that any order that the Commission is able to make under this provision will not affect the viability of Coles.
The length of Ms Smith’s service with Coles
[142] Ms Smith had only a short period of service, being less than 12 months.
The remuneration Ms Smith would have received, or would have been likely to receive, if she had not been dismissed
[143] This involves in part a consideration of the likely duration of Ms Smith’s employment in the absence of what I have found to be an unfair dismissal.
[144] The Full Bench in McCulloch also confirmed that when assessing likely lost remuneration, cogent evidence was required where the Commission had not found a valid reason for dismissal.35 In this case I have found that a valid reason existed and the unfairness arose principally from the absence of notice given the nature of the conduct and the delay in dealing with it. This must be weighed along with the nature and short length of the employment.
[145] In all of the evident circumstances it is reasonable to assess the compensation in this matter on the basis that the applicant would, on the balance of probabilities, have remained in employment only for a very short period. This further period would have been no more than the period of notice that may have been given by either party.
[146] Given my findings about her conduct, Ms Smith was entitled to one month’s notice or payment in lieu thereof under the terms of her contract. 36 A month is not defined in the contract and for present purposes I have taken this to be four weeks given that, under the contract, a person over 45 years is to receive an additional amount totalling five weeks wages.
[147] Ms Smith’s salary with Coles was in the order of $1,115 per week plus statutory superannuation. 37
[148] Accordingly, the projected remuneration loss in this case is $4,460 (plus superannuation).
The efforts of Ms Smith to mitigate the loss suffered by her because of the dismissal
[149] Ms Smith has made significant efforts to mitigate her loss and no discount on the compensation otherwise due is appropriate in this regard.
The amount of any remuneration earned by Ms Smith from employment or other work during the period between the dismissal and the making of the order for compensation
The amount of any income reasonably likely to be so earned by Ms Smith during the period between the making of the order for compensation and the actual compensation
[150] Ms Smith has been, and in all probability, remains in receipt of some employment related income, albeit at a much lower level than with Coles. That employment commenced on 2 July 2015, being about seven weeks after her dismissal.
[151] Given the short period of projected employment and the timing of the alternative employment it is not necessary or appropriate to make a deduction from the provisional amount on this basis.
Any other matter that the FWC considers relevant and the remaining statutory parameters
[152] I have taken into account the projected nature of the anticipated loss of remuneration over a short period (s.392(2)(c)) that has already taken place. In that light, and given the circumstances of this case, it is not appropriate to make a further allowance for contingencies.38
[153] There is demonstrated misconduct that should be taken into account as provided by s.392(3) of the Act. That is, there is misconduct that significantly contributed to the dismissal. However, in this case I have already directly taken that misconduct into account in terms of the provisional amount of compensation. In these circumstances, a further deduction is not appropriate.
[154] In accordance with s.392(4) of the Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal.
[155] The maximum compensation limit in this case would be the lesser of 26 weeks remuneration or $66,500. 39 The amount of compensation that would arise from my findings is less than that limit.
[156] Taxation is to be paid on the amount determined.
[157] The compensation confirmed below is also appropriate having regard to all of the circumstances of this matter and the considerations specified by the Act.40
Conclusions on remedy
[158] After taking into account each of the relevant considerations, I find that compensation is appropriate in this matter. Further, I find that the compensation should be assessed having regard to the factors outlined above.
[159] Accordingly, I find that compensation in lieu of reinstatement should comprise a payment to Ms Smith by Coles of $4,460 plus superannuation.
6. Conclusions and orders
[160] I have found that the Ms Smith’s dismissal was unfair within the meaning of the Act.
[161] I have found that reinstatement is inappropriate but that compensation of the amount determined above is appropriate in all of the circumstances.
[162] The payment of required compensation is to be made to Ms Smith by Coles within 14 days of this decision.
[163] An Order 41 to that end has been issued in conjunction with this decision.
COMMISSIONER
Appearances:
D Blairs of the SDA on behalf of Ms Smith.
L Anderson, In House Legal Counsel, for Coles Supermarkets Australia Pty Ltd.
Hearing details:
2015
Adelaide
10 and 12 August.
1 The precise ages of the customers is not known by way of any direct evidence.
2 Jones v Dunkel (1959) 101 CLR 298.
3 See Cross on Evidence, Fifth Edition at [1215].
4 Exhibit R2 – Ms Scott’s witness statement – attachment SS05.
5 Exhibit R2 – Ms Scott’s witness statement – attachment SS04 – various deletions have been made for security and privacy reasons however these do no change the meaning or application of the SWP.
6 This redaction has been made in the interests of security, however the terms of part of the SWP are known to the parties and it is important in this case as this is one of the directions that is at odds with the approach adopted by the applicant.
7 Exhibit R2 – Ms Scott’s witness statement – attachment SS02.
8 Exhibit R3 – Ms Martin’s witness statement – attachment RM01.
9 Discussion Record - Exhibit R1 – Mr Haverland’s witness statement - attachment SH02
10 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation, (2004) 133 IR 458 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, at par [36].
11 See Qantas Airways v Cornwall (1998) 83 IR 102.
12 See Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; King v Freshmore (Vic) Pty Ltd AIRCFB Print S4213 per Ross VP, Williams SDP, Hingley C, 17 March 2000; Edwards v Giudice (1999) 94 FCR 561; Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Rode v Burwood Mitsubishi AIRCFB Print R4471 per Ross VP, Polites SDP, Foggo C, 11 May 1999.
13 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 373, 377‒378; Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1, 14. See also Dundovich v P & O Ports AIRC PR923358 8 October 2002, per Ross VP, Hamilton DP, Eames C, at [79]; Lane v Arrowcrest (1990) 27 FCR 427, 456; cited with approval in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410, 467 and 468.
14 PR963023 (26 September 2005) (footnotes excluded).
15 PR928970 (19 March 2003), at [14].
16 Woolworths v Brown at [34].
17 [2009] AIRC 893 (16 October 2009).
18 Lion Nathan at [54].
19 See Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160.
20 RMIT v Asher (2010) 194 IR 1. See also Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [75].
21 See Anetta v Ansett Australia Ltd (2000) 98 IR 233.
22 Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.
23 Potter v WorkCover Corporation AIRC PR948009, 15 June 2004 per Ross VP, Williams SDP and Foggo C at par [55].
24 Note: the subsection 392(5) amount was indexed to $133,000 from 1 July 2014 - as was relevant given the timing of this application.
25 (1998) 84 IR 1, per Ross VP, Polites SDP and Hoffman C.
26 [2014] FWCFB 1949.
27 Supra at [49] to [51].
28 Supra at [60].
29 [2014] FWCFB 7198. See also JBS Australia Pty Ltd v Challinger[2015] FWCFB 520.
30 See JBS Australia Pty Ltd v Challinger[2015] FWCFB 520 at [22].
31 Section 381 of the Act.
32 [2015] FWCFB 873.
33 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21. See also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431.
34 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446.
35 McCulloch at [27].
36 Exhibit R3 – Ms Rochelle Martin’s witness statement – attachment RMO1 at clause 11 noting that I have found that summary dismissal was not warranted.
37 The additional superannuation is confirmed in the applicant’s written contract of employment.
38 See the discussion of contingencies in McCulloch at [20] – [23]; Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431, at par [52]; Ellawala v Australian Postal Corporation AIRC Print S5109, per Ross VP, Williams SDP and Gay C, 17 April 2000 and in Enhance Systems Pty Ltd v James Cox AIRC Print PR910779, per Williams SDP, Acton SDP and Gay C, 31 October 2001.
39 Section 392(5) of the Act.
40 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at par [32].
41 PR572030.
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