Khoder Abdulrahim v QBE Management Services Pty Limited

[2016] FWC 2985

[2016] FWC 2985

FAIR WORK COMMISSION

EX TEMPORE DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Khoder Abdulrahim
v
QBE Management Services Pty Limited
(U2016/2)

DEPUTY PRESIDENT KOVACIC MELBOURNE, 12 MAY 2016

Application for relief from unfair dismissal – harsh, unjust or unreasonable – application dismissed.

[1] The following decision, now edited, was handed down in the hearing of this matter on 11 May 2016.

[2] Mr Khoder Abdulrahim (the Applicant) lodged an application under s.394 of the Fair Work Act 2009 (the Act) on 31 December 2015 alleging that the termination of his employment by QBE Management Services Pty Ltd (QBE – the Respondent) on 23 December 2015 was unfair.

Background

[3] Mr Abdulrahim commenced employment with QBE as a Customer Service Officer on 14 March 2006.

[4] In October 2015 Mr Abdulrahim purchased a discounted motor vehicle insurance policy under QBE’s Employee Insurance Program for his father’s motor vehicle. Mr Abdulrahim was nominated as the contact person for that insurance policy on the basis that his father could not speaking English.

[5] On 10 November 2015 Mr Abdulrahim made an insurance claim against that policy contending that someone had run into his father’s vehicle whilst it was parked in the street.

[6] In December 2015 Mr Abdulrahim refused to participate in an interview with an investigator from QBE’s Financial Crimes Team regarding the abovementioned insurance claim. On 21 December 2015 QBE wrote to Mr Abdulrahim in the following terms:

“On Friday 18 December, you were advised by Simon McQualter, Customer Service Manager Motorcycle to attend an interview with an investigator as instructed by the Financial Crime Team. This matter is in relation to a claim made in the name of Farouk Abdulrahim and the nominated contact on that claim is you

We have number of questions relating to this claim and given you are listed as a contact on the claim it is expected that you should be willing to assist the investigation. You have refused to participate previously and QBE considers this to be very concerning

QBE is issuing you with a lawful and reasonable direction to attend an interview with Mr Peter Hiscock who we have engaged to assist in this matter…

As an employee of QBE, you are expected to comply with this direction and if you do not attend, QBE may take disciplinary action including termination of employment.” 1

[7] Mr Abdulrahim did not subsequently agree to participate in the interview and on 23 December 2015 was summarily dismissed by QBE. The termination letter stated:

“This is to advise QBE has made a decision to terminate your employment summarily, on the basis of your repeated failure to follow a lawful and reasonable direction to attend an interview with an investigator from the QBE Financial Crimes Team.” 2

The Applicant’s case

[8] Mr Abdulrahim submitted that the direction issued to him by QBE was not available at law; that there was no valid reason for his dismissal and that should the Fair Work Commission (the Commission) find that there was a valid reason for his dismissal, that his dismissal was harsh, unjust or unreasonable. In his written submissions, Mr Abdulrahim contended that his dismissal was a constructive dismissal. However, this submission was not pressed at the hearing.

[9] In his witness statement 3, Mr Abdulrahim deposed that on 21 December 2015 QBE wrote to him requesting that he participate in an interview with the QBE Investigator from the Financial Crimes Team and that he declined the interview because he felt it was not a lawful or reasonable direction, adding that as he was not involved in the accident or listed on the policy he could make no contribution to the investigation. Mr Abdulrahim further deposed that there was nothing in his contract of employment that specified that he must participate in any investigations that do not relate to him and that he had not breached any company policies or procedures.

[10] At the hearing, Mr Abdulrahim attested, inter alia, that:

• he understood QBE’s Code of Business Ethics and Conduct (the QBE Code), that he had a duty to follow a lawful and legal direction and that he had a duty to cooperate with his employer but that he was not aware of the provisions of the QBE Code relating to conflict of interest;



• he had made the insurance claim on 10 November 2015 on his father’s behalf and had followed up that claim on 8 December 2015 on his father’s behalf;



• he had set up a business, Extreme Perfection Panels, in late 2015 which had prepared a quote of over $38,000 to repair his father’s car;



• he did not prepare that quote despite his name and mobile telephone number being cited at the bottom of the quote;



• he had contacted the employee managing the claim on 14 December 2015 at his father’s request; and



• his manager had advised him to participate in the investigation.

The Respondent’s case

[11] QBE submitted that Mr Abdulrahim’s dismissal was not harsh, unjust or unreasonable and that his unfair dismissal application should be dismissed. In its submissions, QBE contended that its investigations had determined that 24 motor vehicle claims totalling over $106,000 and two household claims totalling more than $15,000 had been made from Mr Abdulrahim’s residential address, with Mr Abdulrahim’s personal bank account having been the nominated bank account for five QBE motor vehicle insurance claims during his period of employment with QBE.

[12] Ms Claire Sultana, QBE’s Senior HR Specialist – Employment Relations, deposed among other things in her witness statement 4 that on 23 December 2015 she returned a call from Mr Abdulrahim and that during the conversation he indicated that his main reason for not participating in the interview was that the investigator had been very arrogant. Ms Sultana further deposed that she offered to provide a different investigator but that Mr Abdulrahim advised he was still not willing to participate in the investigation. Ms Sultana was not cross-examined by Ms Youssef, i.e. Ms Sultana’s evidence was unchallenged.

The statutory framework

[13] The Commission exercises its discretion in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. In this case there is no contest that Mr Abdulrahim is a person who is protected from unfair dismissal pursuant to s.382 of the Act. In the context of this matter, the relevant provisions of the Act are ss. 385 and 387 which provide as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if FWC is satisfied that:

(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, 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 FWC considers relevant.”

[14] There is no dispute that Mr Abdulrahim was dismissed, so s.385(a) of the Act is satisfied. Mr Abdulrahim contended that his termination was harsh, unjust or unreasonable, so s.385(b) of the Act is relevant. QBE is not a small business employer, therefore s.385(c) of the Act is not relevant. The termination was not a case of redundancy, so s.385(d) of the Act does not apply. Therefore, in determining whether Mr Abdulrahim was unfairly dismissed, I must consider whether the dismissal was harsh, unjust or unreasonable as per s.385(b) of the Act.

Was the dismissal harsh, unjust or unreasonable?

[15] In considering whether a dismissal was harsh, unjust or unreasonable, the Act requires the Commission to have regard to the criteria set out in s.387. I will address each of those criteria separately.

(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)

[16] In Rode v Burwood Mitsubishi 5 (Rode) a Full Bench of the then Australian Industrial Relations Commission canvassed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996 citing Selvachandran v Peteron Plastics Pty Ltd.6 The following is an extract from the Full Bench’s decision in Rode’s Case.

“[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:

“Section 170DE(1) refers to a ‘valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective ‘valid’. A reference to dictionaries shows that the word ‘valid’ has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: ‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In The Macquarie Dictionary the relevant meaning is ‘sound, just or wellfounded; a valid reason’.

In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.”

[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).

[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.”

[17] The QBE Code states at item 6.2 that “Employees are required, upon reasonable request by QBE, to provide full and complete cooperation with any investigation related to actual or potential breaches of this Code.” 7 Against that background, I consider the direction which QBE issued to Mr Abdulrahim on 21 December 2015 to be a lawful and reasonable direction in circumstances where it had legitimate concerns about a potential conflict of interest regarding not only his father’s insurance claim but also his business, Essential Perfection Panels. Further, Mr Abdulrahim’s spurious reason for not participating in the interview based on the conduct of the investigator no longer remained following Ms Sultana’s offer to provide an alternative investigator.

[18] Mr Abdulrahim’s failure to comply with QBE’s direction, despite the subsequent urging of his manager and also the abovementioned accommodation by Ms Sultana, in my view is a valid reason for his dismissal. Drawing on the language of the decision in Rode, I am satisfied that the reason for Mr Abdulrahim’s termination is defensible or justifiable on an objective analysis of the relevant facts and was not “capricious, fanciful, spiteful or prejudiced.”

(b) Whether the person was notified of that reason

[19] QBE’s letter of 21 December 2015 stated that Mr Abdulrahim was expected to comply with the direction to attend an interview with the investigator and foreshadowed that if he did not attend it may take disciplinary action including termination of employment. Further, Mr Abdulrahim was advised by his manager that he should attend the interview. As noted above, the termination letter of 23 December states that “QBE has made a decision to terminate your employment summarily, on the basis of the repeated failure to follow a lawful and reasonable direction to attend an interview with an investigator from the QBE Financial Crimes Team.” 8

[20] This indicates that Mr Abdulrahim was notified of the reasons for his dismissal.

(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[21] Ms Sultana’s unchallenged evidence was that she returned a call from Mr Abdulrahim on 23 December 2015 and that during the conversation he indicated that his main reason for not participating in the interview was that he had concerns regarding the investigator’s conduct and, despite her offer to provide a different investigator, Mr Abdulrahim was still not willing to participate in the investigation.

[22] That evidence supports a finding that Mr Abdulrahim was given an opportunity to respond to the reasons relating to his conduct.

(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

[23] As no meeting occurred with Mr Abdulrahim, there was no requirement for a support person. I therefore consider this factor to be a neutral consideration.

(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[24] Mr Abdulrahim’s dismissal does not relate to unsatisfactory performance. Accordingly, this is not a relevant consideration in this matter.

(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

[25] QBE employs approximately 3,500 employees. As such, the size of the enterprise is not a relevant consideration in this matter.

(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

[26] QBE has a dedicated human resources department. As such, this factor is not a relevant consideration in this matter.

(h) Any other matters that FWC considers relevant

[27] Mr Abdulrahim submitted that his dismissal was harsh, unjust and/or unreasonable when regard was had to his length of service, his employment record and the nature of his alleged conflict of interest.

[28] QBE, relying on the decision in Parmalat Food Products Pty Ltd v Wililo 9, submitted that where the Commission finds that there was a valid reason for the dismissal it should refrain from interfering with the decision to terminate employment in the absence of significant mitigating factors. Beyond this, QBE submitted among other things that Mr Abdulrahim’s dismissal was proportionate to the seriousness of his conduct and the level of wrongdoing, adding that trust and confidence was essential in the performance of his employment and that Mr Abdulrahim knowingly placed his personal interests in direct conflict with the interests of his employer on multiple occasions and in a most serious way.

[29] As noted above, I consider there was a valid reason for Mr Abdulrahim’s dismissal. In circumstances where QBE had legitimate questions regarding the insurance claim made in respect of his father’s vehicle, Mr Abdulrahim’s potential conflicts of interest, his refusal to participate in the investigation and the fact that he had been warned of the potential consequences of a failure to do so, I do not consider Mr Abdulrahim’s dismissal a disproportionate response. Further, Mr Abdulrahim’s failure to cooperate with the investigation begs the question – what did he have to hide? This goes to the issue of trust which was referred to in QBE’s submissions regarding this criterion and counterbalances the weight to be given to Mr Abdulrahim’s length of service and employment record.

[30] This supports a finding that there are no other relevant considerations.

Conclusion

[31] Drawing on the above analysis, I find that there was a valid reason for Mr Abdulrahim’s dismissal, that Mr Abdulrahim was notified of the reason and was given an opportunity to respond, and that there are no other relevant considerations. I further find that the remaining considerations in s.387 are either not relevant in this matter or are neutral considerations.

[32] For all these reasons, I do not consider that Mr Abdulrahim’s dismissal was harsh, unjust or unreasonable. Accordingly, I dismiss the application. An order to that effect will be issued in due course.

Appearances:

M. Youssef for the Applicant.

D. Gardner for the Respondent

Hearing details:

2016.

Melbourne:

May 11.

 1   Exhibit 2 at Annexure CS-6

 2   Ibid at Annexure CS-9

 3   Exhibit 1

 4   Exhibit 2

 5   Print R4471

 6 (1995) 62 IR 371

 7   Exhibit 2 at Annexure CS-10

 8   Ibid at Annexure CS-9

 9 (2011) 207 IR 243

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