Kevin Vernon v Electricity Networks Corporation T/A Western Power

[2016] FWC 1721

[2016] FWC 1721

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kevin Vernon
v
Electricity Networks Corporation T/A Western Power
(U2015/1513)

COMMISSIONER WILLIAMS PERTH, 21 MARCH 2016

Termination of employment - remedy.

[1] On 29 January 2016 the Commission issued its decision 1 on Mr Vernon’s unfair dismissal remedy application and found that he had been unfairly dismissed. The parties were requested to provide further evidence and submissions on the issue of remedy under sections 391 and 392 of the Fair Work Act 2009 (the Act).

[2] This supplementary decision deals with the issue of remedy only.

The applicant’s submissions

[3] The applicant is seeking reinstatement as the remedy.

[4] The applicant submits he was considered a valued employee prior to the arrival of his last Team Leader, Mr Andrew Boots (Mr Boots). There were no issues with the applicant’s work performance or abilities prior to the appointment of Mr Boots and subsequent changes to the role of the applicant.

[5] The respondent is a reasonably sized employer with a large workforce.

[6] The evidence is that there were other employees working in the same department who had been redeployed from the same role as the applicant but were not required to carry out the duties which eventually led to the unfair dismissal of the applicant.

[7] The applicant contends that it would not be unreasonable to reinstate him to the same department he was employed in prior to his dismissal in a role which did not require commercial and financial analysis.

[8] If the Commission determines that reinstatement is not the appropriate remedy the Act requires the Commission to consider the matters set out in section 392 of the Act in regards to a possible order for compensation.

[9] Those matters that are relevant are addressed below.

[10] The applicant was employed by the respondent for 8.5 years from 18 September 2006 until 18 March 2015

[11] At the time of dismissal, the applicant’s annual salary was $122,764.30 exclusive of superannuation. The calculation for what should have been earned in salary 44.14 weeks at $2,360.85 per week = $104,207.91.

[12] The applicant has applied for jobs directly and through many internet job-seek sites and has registered with numerous employment agencies. The applicant also undertook studies and completed a Certificate III in Investigative Services in applying to the WA Police for an Investigators Licence to assist in his opportunities for employment

[13] The applicant worked for 4 weeks between 31 August 2015 and 25 September 2015 in a short term contract via a recruitment agency. The total gross earnings was $11,010.00

[14] The applicant remains unemployed at this time.

[15] The applicant says that the following should be a considered by the Commission in determining any compensation. The employer maintained that the position that the applicant was redeployed in to did not change during his time in the role.

[16] If this is the case based on the evidence provided then the applicant submits he was unreasonably redeployed at that time and should have been retrenched at the time his previous role was made redundant.

[17] If it was in fact that the position changed following Mr Boots taking on the position of Team Leader in March 2014 then the applicant says the following needs to be considered.

[18] The revised Property Specialist position that Mr Boots drew up around March 2014, changed the duties substantially from the one the applicant was transferred into in October 2013. When this change occurred, neither retraining, redeployment nor redundancy were offered as they were said to have been offered previously when the applicant’s original position of Senior Property Officer was made redundant in October 2013.

[19] The applicant wishes the Commission to consider that he was either redeployed in to a position he did not have the full competences for or that the role was changed significantly after he was redeployed so he no longer had the full competences for the role.

[20] It is the view of the applicant therefore that he should have been retrenched at either the time of the redeployment from Senior Property Officer to Property Specialist or after the revision of the requirements for the position of Property Specialist by Mr Boots around June 2014.

[21] If the applicant had been retrenched he would have been entitled to redundancy payment as outlined in his employment contract. The applicant would been entitled to 12 weeks remuneration in lieu of notice and an additional 3 weeks’ remuneration for each completed year of service.

[22] The applicant estimates this to be $28,330.20 for the 12 weeks’ notice and $56,660.40 for redundancy.

[23] This is based on a salary 2,360.85 per week.

The respondent’s submissions

[24] The applicant’s employment was terminated on 18 March 2015 with payment of 5 weeks’ salary in lieu of notice.

[25] The applicant commenced an unfair dismissal claim on 1 April 2015 in the Commission.

[26] The Commission made the following relevant findings in the Decision:

(a) The applicant had not been performing to the standard expected in the role of Property Specialist for an extended period leading up to his dismissal. This was a valid reason for the applicant’s dismissal: [80].

(b) The applicant was notified of the reasons he was ultimately terminated for when he received a written warning regarding his performance on 20 February 2015 and he had been made fully aware during the PIP of the specific concerns the respondent had about his performance: [81].

(c) The applicant had an opportunity to respond to the reasons he was ultimately dismissed for and the complaints regarding his performance: [82] – [83].

(d) The applicant was unambiguously warned at disciplinary meetings on 9 and 20 February 2015 that his employment was at risk.

[27] However, the decision was otherwise harsh as the Commission found:

(a) The applicant’s limited Microsoft Excel skills had previously been adequate for him to perform his role prior to a new emphasis being placed on providing commercial and financial analysis, something unfortunately which was beyond the applicant’s ability: [97].

(b) The applicant did not participate in an external Microsoft Excel training course or business writing course until 5 weeks before his dismissal. In addition the applicant alone of the Property Specialists was required to meet the challenge of the changes to the role (being the focus on financial and commercial analysis). The applicant has been working for the respondent since 2006 and had an unblemished record prior to these events: [101].

[28] Section 390 to 392 of the Act provides the relevant powers for the Commission in relation to reinstatement.

[29] The respondent submits reinstatement is inappropriate in this matter.

[30] The Commission found there was a valid reason for dismissal and that the applicant had not been performing to the standard expected in the role of Property Specialist for an extended period leading up to his dismissal: [80].

[31] In this matter, the applicant during employment did not accept that his performance was not to an acceptable standard.

[32] The applicant at hearing gave evidence that he was performing his role to the best of his ability 2 and accepted under cross examination that he was unable to meet the requirements of the role3. It has been found that the applicant was not performing his role to the requisite standard.

[33] The applicant contends that reinstatement should occur to a role that does not require him to perform commercial or financial analysis. Even if this were to occur, (which the respondent says is impractical as per the below), the applicant would still need to improve in additional areas of performance, including written and verbal communication and time management.

[34] The evidence of Mr Boots 4 is that other members of the team were required to perform commercial and financial analysis. A supplementary statement of Mr Boots confirm that Property Specialists are all required to perform commercial and financial analysis as well as having good written and verbal communication and time management skills.

[35] Further, the decision found that the role performed by the applicant required performance of commercial and financial analysis skills. As such, it would be inappropriate to reinstate the applicant.

[36] Reinstating the applicant in circumstances where he is unable to fulfil the requirements of his role to the required standard would:

(a) put the applicant at risk of further termination of employment for poor performance: Colson v Barwon Health [[2013] FWC 8734];

(b) be disruptive to the harmony and productivity of the workplace: Mary-Jane Anders v The Hutchins School [[2016] FWC 241]; Nguyen v Vietnamese Community in Australia [[2014] FWCFB 7198]; and

(c) make the applicant surplus to requirements: Change v Mega International Commercial Bank Co. Ltd [[2014] FWC 5606]; Brambleby v Australian Postal Corporation [[2014] FWCFB 9000].

[37] The applicant made a number of serious assertions regarding Mr Boots, including that he was seeking as early as October 2014 to dismiss the applicant, that he used the performance management process as a sham, that he did not provide appropriate support to the applicant and that he was a bully and hostile in his dealings with the applicant.

[38] No findings were made that support these unwarranted and unfair assertions. Mr Boots remains the Manager of the Property and Fleet Team the applicant seeks reinstatement to.

[39] The respondent considers that in the circumstances, the relationship between the applicant and Mr Boots has broken down, making reinstatement inappropriate: Mary-Jane Anders v The Hutchins School [[2016] FWC 241]; Nguyen v Vietnamese Community in Australia [[2014] FWCFB 7198].

[40] In all of the above circumstances, the respondent contends that reinstatement would be wholly inappropriate in this matter.

[41] Section 392(2) of the Act provides the following criteria for determining compensation.

[42] It is accepted that the maximum compensation the Commission can order in this matter is 6 months’ salary, being $61,382.15.

[43] Mr Vernon received 5 weeks’ pay in lieu of notice. This ought to be factored into the compensation, reducing the maximum permissible to 21 weeks’ pay, being $49,577.85. The respondent contends that an award in this amount is not appropriate taking into account the section 392 factors.

[44] An order for compensation will not impact the viability of the respondent’s business.

[45] The applicant was employed for a period of 8.5 years.

[46] The applicant was not performing his role to the required standard and had not been performing to the required standard for a substantial period of time. The Commission found that the dismissal was harsh on the basis that the applicant did not receive external training in Microsoft Excel and business writing until 4 to 5 weeks’ prior to the dismissal.

[47] The question for determination is what would be a reasonable time frame for the applicant to have demonstrated improvement following provision of the external training.

[48] There is no evidence to suggest that the applicant’s performance would have improved to the required standard had additional time been given. 5 To the contrary, the evidence suggests that the applicant was unlikely to improve his performance given the level of one-on-one training provided by Mr Boots in the use of Microsoft Excel and in commercial and financial analysis and business writing. The applicant was given a copy of the business writing course materials on 24 November 2014: see AB20. The applicant had also previously undertaken beginner’s Microsoft Excel training and admitted in evidence reviewing his previous Microsoft Excel workbook and seeking assistance online in or about September 2014.6

[49] The respondent submits that a period of 8 weeks following the provision of external training would have been sufficient time for the applicant to have demonstrated improvement in Microsoft Excel and business writing. Had this been provided, termination of employment would have occurred on 14 April 2015, 4 weeks after the date termination of employment did occur.

[50] On this basis, the respondent considers that 4 weeks’ compensation is appropriate.

[51] The respondent does not comment on efforts to mitigate loss or amounts earned following dismissal as it has no information other than that provided by the applicant.

[52] The applicant states he has undertaken external training since his dismissal, being a Certificate III in Investigative Services.

[53] The respondent notes that the applicant has not undertaken any additional training relevant to the position he seeks to be reinstated to despite accepting he was not performing his duties to the required standard. That is, no training has been undertaken in financial analysis, Microsoft Excel or business writing.

[54] The applicant asserts he ought to have been made redundant in October 2014 or ‘mid 2015’, when the duties of his position changed. The applicant claims he would have been entitled to a redundancy payment of approximately $84,990.60 (comprised of 12 weeks’ notice and 24 weeks’ severance pay).

[55] The respondent disputes the applicant was made redundant. He was redeployed to a suitable alternative role and was provided with training.

[56] Even if it were accepted that the applicant ought to have been made redundant, the fact is that the applicant remained in employment until 18 March 2015. This meant the applicant received the benefit of 17 months’ employment and salary from October 2014, or 9 months’ employment and salary between July 2015 (mid 2015) and the ending of his employment. Both of these amounts either meet or exceed any redundancy the applicant claims to have been owed. On this basis any assertion to redundancy ought to be considered irrelevant.

[57] In all the circumstances, the respondent considers reinstatement is highly inappropriate as:

(a) There was a valid reason for dismissal - the applicant was not performing his role to the required standard for a prolonged period;

(b) The applicant’s performance and attitude puts him at risk of a further dismissal should he be reinstated, particularly given the changing environment which requires adaptability;

(c) The Property Team is functioning in a productive and efficient manner with all team members performing to standard. Reinstatement of the applicant would be disruptive to team harmony and productivity and would place an unfair and onerous burden on the relevant manager responsible for monitoring and managing Mr Vernon’s performance;

(d) Mr Boots remains the relevant manager for the Property Team and there has been a breakdown in the relationship of trust and confidence between Mr Vernon and Mr Boots.

[58] The respondent considers an appropriate sum of compensation is 4 weeks’ salary, representing an additional period of 4 weeks from the date the applicant undertook the last training course.

Consideration

[59] The respondent provided a supplementary witness statement from Mr Boots. This statement included evidence to support the submissions that it was not appropriate for Mr Vernon to be reinstated. I accept that evidence of Mr Boots as to the circumstances currently prevailing in the workplace.

[60] Not all of Mr Boots’ evidence was relevant to the question of reinstatement.

[61] Mr Boots’ evidence also included a number of statements that were critical of Mr Vernon. Mr Boots also states that he had made every effort to assist Mr Vernon to improve his performance. 7 It is not apparent why this assertion is relevant to the issue of reinstatement but in any event the reasons for decision that concluded Mr Vernon had been unfairly dismissed demonstrate Mr Boots did not make every effort to assist Mr Vernon. For example one significant finding explained in those reasons was that Mr Boots and the human resource advisors, after identifying that part of Mr Vernon’s performance deficiency was his lack of skills in report writing and Microsoft Excel, did not ensure training was provided promptly. In fact Mr Vernon attended both these training courses only 5 weeks before he was dismissed. This fact was ignored by Mr Boots who took the view that Mr Vernon had been underperforming for many months notwithstanding most of this period was before he received the training he needed.8

[62] The relevant considerations for the Commission as the parties have submitted are those set out in sections 391 and 392 of the Act.

[63] It is not suggested by the applicant that he should be reappointed to another position in some other area within the respondent’s organisation outside the Property Team. Similarly the respondent has not suggested that that might be an option. Whilst the employer is a large organisation it is not for the Commission to presume without supporting evidence that there may be an appropriate available position to which Mr Vernon could be reappointed elsewhere in the business on terms and conditions no less favourable than those on which he was previously employed.

[64] If Mr Vernon was to be reappointed to the position he held prior to his dismissal the evidence is that he would be likely to be required to perform financial and commercial analysis duties which is the work he was deficient in.

[65] The evidence before the Commission at this point is that the Property Team from which Mr Vernon was dismissed is currently operating in an efficient manner. If Mr Vernon was to be reinstated into this area he would in effect be an additional employee which would likely have effects for others within the respondent’s business.

[66] Whilst Mr Boots would not be Mr Vernon’s immediate Team Leader the Property Team remains under his management and Mr Boots on his own evidence appears to have some animosity towards Mr Vernon and apparently does not accept it was largely his actions and decisions that caused Mr Vernon’s dismissal to be unfair.

[67] In all those circumstances my decision is that reinstatement of Mr Vernon is inappropriate. I do however consider that an order for payment of compensation to Mr Vernon by the respondent would be appropriate in all the circumstances of the case.

[68] The matters the Commission must take into account in determining an amount of compensation to be paid are set out in section 392 of the Act.

[69] I note the applicant submits that what should have occurred was he should have been made redundant from his previous position in October 2014 as a consequence of the respondent’s restructure rather than being moved to the alternative position or alternatively he should have been made redundant in the middle of 2015 when Mr Boots unilaterally changed the requirements of his then position. The applicant submits that had this occurred he would have been entitled to a redundancy pay made up of 24 weeks’ severance pay plus an additional 12 weeks’ notice which would have amounted to approximately $85,000 in total.

[70] In terms of this submission I simply note that Mr Vernon was not dismissed due to his position being made redundant and the arguments based around redundancy, extended notice and severance payments are not relevant in the circumstances here to the Commission’s decision when determining an appropriate payment of compensation to be ordered.

[71] I am satisfied that the order for compensation I will make will not affect the viability of the respondent.

[72] Mr Vernon was employed for approximately 8.5 years.

[73] Estimating how long Mr Vernon would have remained in employment if he had not been dismissed as he was is difficult. What is clear is if the respondent had recognised the significance of the changes Mr Boots had made to the job description and considered that Mr Vernon had not previously been required to undertake commercial and financial analysis duties to the standard now expected a different approach might have been taken to the situation. Some of Mr Vernon’s colleagues were not, at that time, being required to undertake commercial and financial analysis duties. Consideration could have been had for whether some other employees were more suited to doing the commercial and financial analysis duties than Mr Vernon was. Some alteration of job roles amongst the employees could have being considered to accommodate both Mr Vernon’s limitations and the respondent’s need to respond to changing circumstances. As previously noted if the required training had been promptly provided Mr Vernon may have found Mr Boots’ guidance of more benefit than he did, lacking the necessary basic understanding because he hadn’t had the foundation training. Approached differently the changes that needed to be made to this area may not have led to Mr Vernon being dismissed. That possibility suggests that Mr Vernon, had he not been dismissed, may have continued in employment for years to come.

[74] However the Commission should also recognise the factual background is that the respondent had undertaken a process of change in 2013, in terms of the broader restructure, and at a the Property Team level further changes were made in 2014 both of which demonstrate the organisation is not static but rather is continually evolving which inevitably will have implications for some employees. The state of the current West Australian budget and other pressures from government has implications for the respondent which will necessitate it committing to further internal change. This context suggests that had Mr Vernon not been dismissed ongoing change would mean his employment would be less likely to be long-term. It is also fair to observe that Mr Vernon’s capacity to embrace the increasingly complex demands of his particular work area has some limitation.

[75] Taking all these factors into account my assessment is that had Mr Vernon not been dismissed as he was he would have remained in his employment for a further 26 weeks.

[76] At the time of his dismissal Mr Vernon’s salary was $2360.85 per week. Therefore the estimated remuneration lost is $61,382.10

[77] I am satisfied that Mr Vernon has made reasonable efforts to mitigate his loss by applying for other jobs. He worked for a period of 4 weeks in August and September 2015 and for that work was paid a gross amount of $11,010.

[78] Mr Vernon is currently unemployed.

[79] At the time of his dismissal Mr Vernon received 5 weeks’ wages in lieu of notice.

[80] Consequently from the estimated remuneration loss of $61,382.10 the remuneration earned of $11,010 is deducted the balance being $50,372.10. From this amount 5 weeks’ wages which was paid in lieu of notice being $11,804.25 is to be deducted leaving the balance of compensation to be ordered of $38,567.85. An order to that effect will now be issued.

COMMISSIONER

Final written submissions:

Applicant, 16 February 2016 and 8 March 2016.

Respondent, 2 March 2016.

 1   [2016] FWC 533.

 2   Transcript at PN604.

 3   Ibid., at PN602.

 4   Ibid., at PN1273 to PN1276.

 5   [2016] FWC 533 at [99].

 6   Transcript at PN252.

 7   Supplementary statement of Mr Andrew Robert Boots at paragraph 12.

 8   [2016] FWC 533 at [98].

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