Kirsty Clavell v Kerries Snack Bar

[2014] FWC 3364

[2014] FWC 3364

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kirsty Clavell
v
Kerries Snack Bar
(U2014/4624)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 23 MAY 2014

Application for relief from unfair dismissal - Small Business Fair Dismissal Code - reasonable belief of misconduct - failure to put allegations to employee - harsh and unjust - compensation.

[1] On 14 February 2014 Ms Clavell lodged an application through which she sought relief with respect to the termination of her employment with Kerries Snack Bar.

[2] Ms Clavell's application was listed for conciliation but there was no attendance in this conference on the part of the respondent. The application was then referred to me for determination. Neither party attended a directions conference on 23 April 2014. The application was subsequently listed for a determinative conference on 19 May 2014. Directions issued on 23 April 2014 were not complied with by either party with the exception that an Employer Response (Form F3) to the application, together with a partially completed Small Business Fair Dismissal Code Checklist, was received on 2 May 2014.

[3] At the conference on 19 May 2014 Ms Clavell represented herself with her father as a support person. Mr Harris, the proprietor of Kerries Snack Bar also attended. On the evidence provided to me I have formed the following conclusions about the facts of this matter.

[4] Kerries Snack Bar is a small business for the purposes of s.385 of the Fair Work Act 2009 (the FW Act). I have accepted Mr Harris' advice that it employed two people. Ms Clavell worked for Kerries Snack Bar from 2006 as a weekly hire employee. Her employment was terminated on 12 February 2014. Ms Clavell asserts that no reason for her summary dismissal was given and that she was not paid pro-rata long service leave and other monies owed to her. Mr Harris asserts that he suspected Ms Clavell of theft and had reported concerns of this nature to the police on 7 February 2014, on the advice of “Fair Work people”.

[5] The parties both agreed that on 3 February 2014 Mr Harris sent a text message to Ms Clavell in which he instructed her to stay home until further notice. On 12 February 2014 Mr Harris sent, or arranged to have sent a further text message instructing Ms Clavell to attend for a meeting on that day. Neither of these messages specified allegations to Ms Clavell. Ms Clavell attended the meeting on 12 February 2014 with her mother. Ms Clavell’s evidence is that Mr Harris told her that her job was no longer required. She asked why this was the case and Mr Harris told her that he could not tell her and that she should leave the property. Mr Harris’ version of the advice he provided to Ms Clavell at that meeting is that he advised her that her services were no longer required because she had been stealing money. Whilst I note that Ms Clavell could have called her mother to give evidence to support her position, but did not do so, I have tended to prefer her evidence about that meeting to the effect that no reason for the termination of her employment was given. In this regard Ms Clavell’s evidence is consistent with the information included in her application. Had she been told that she was accused of theft I think that her position in this respect would have been stated in her application.

[6] It is appropriate that I note that neither the evidence of Ms Clavell nor that of Mr Harris was particularly persuasive in this matter and I am not at all sure about which of these two people is telling the truth.

[7] Section 385 establishes that a dismissal cannot be unfair if the Small Business Unfair Dismissal Code (the Code) has application and if the dismissal was consistent with that Code.

[8] The Checklist provided with the Form F3 is incomplete and Mr Harris acknowledged that he had partially completed this form some time after the termination of Ms Clavell's employment.

[9] While Mr Harris specified a number of complaints about Ms Clavell's work performance, he was very clear in asserting that the termination of her employment occurred only because of his conclusion that she had stolen money and because she was not entering all monies into the cash register. The evidence of Ms Clavell and that of Mr Harris is clearly contradictory with respect to Mr Harris’s allegations that Ms Clavell was instructed, on numerous occasions over many months, to enter transactions in the cash register and his allegations of theft. I have not determined that those allegations are made out or established and the evidence before me does not permit a finding in this respect.

[10] Ms Clavell was summarily dismissed. The Code deals with summary dismissal in the following terms:

“Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”

[11] In John Pinawin T/A Rose Vi.Hair.Face.Body v Domingo 1 a Full Bench of Fair Work Australia stated:

“[29] .... There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.”

and further

“[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. ....”

[12] I have applied this approach. In this instance Mr Harris' evidence was that he was concerned over the operation of the cash register for some two years. His concerns were heightened in January when Ms Clavell had two days off work. Mr Harris asserted that he recorded the serial numbers of a number of notes that he could not later locate. Mr Harris asserted that he received numerous advices that monies were not being entered into the cash register. Ms Clavell's evidence is that after she was told to enter all monies into the cash register, she did so. Further, that notes were moved from the cash register to a tin at the rear of the snack bar. Ms Clavell asserts that she did not steal money.

[13] I have taken into account Mr Harris's advice that at some point after he became concerned that Ms Clavell was stealing money he spoke with an authority which he referred to as the “Fair Work People” who he says told him to dismiss Ms Clavell. After advising Ms Clavell to stay home until further notice on 3 February 2014, Mr Harris formally lodged a complaint with the Police on 7 February 2014. He then waited until 12 February to meet with Ms Clavell and advise her that she was dismissed. He explained this delay on the basis that he had “other things to do”. 2

[14] The absence of any discussion between Mr Harris and Ms Clavell about the theft allegations, combined with Mr Harris' emphatic but general and unsupported assertions means that I am unable to conclude that Mr Harris was able to reasonably hold a belief that Ms Clavell's conduct was sufficiently serious to warrant summary dismissal. This is not a finding that endorses or rejects the allegation that Ms Clavell stole money. It is simply that the process followed by Mr Harris did not reasonably allow him to reach that conclusion without talking to her about his concerns.

[15] Consequently, I am not satisfied that the termination of Ms Clavell's employment on a summary basis was consistent with the Code.

Section 387

[16] In those circumstances I am required to then consider the facts of the matter in the context of the factors set out in s.387 of the FW Act. This section states:

“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.”

[17] I have considered each of these factors.

Valid Reason

[18] Notwithstanding the legislative changes made since then I have applied the concept of a valid reason summarised by Northrop J in Selvechandron v Petersen Plastics Pty Ltd. .3.

[19] Mr Harris' concerns that Ms Clavell was stealing money required further investigation. The evidence before me does not permit a conclusion about whether, on the balance of probabilities she was stealing money or not “ringing up the till’. I have concluded that, without that more extensive investigation or more substantial evidence there was no valid reason for that termination. The mere referral of Mr Harris’ allegations to the police does not enable me to reach a conclusion about those allegations. Had a more extensive investigation occurred so as to provide greater certainty about the allegations against Ms Clavell a valid reason finding would have followed.

Explanation of the reason

[20] As I have already found, Mr Harris did not give Ms Clavell a reason for the termination of her employment. This is a further factor that favours a finding of unfairness.

Opportunity to Respond

[21] Ms Clavell was given no opportunity to respond to the proposed termination of her employment.

Refusal to allow a support person

[22] Ms Clavell had her mother with her on 12 February, as a support person at the termination of employment interview.

Warnings about unsatisfactory performance

[23] To the extent that Ms Clavell was dismissed for serious and wilful misconduct this factor is not relevant. To the extent that Mr Harris' other performance related concerns including the requirement that she “ring up the till’ are relevant, I am not satisfied that Ms Clavell was warned about her performance.

Employer's size - impact on procedures

[24] Mr Harris' business is a very small one. I have taken into account that it did not appear to have any procedures relating to a disciplinary issue such as this.

Employer's size - access to human resource management expertise

[25] I have concluded that Mr Harris did not have access to human resource expertise

Other matters considered relevant

[26] Ms Clavell indicated that she pursued this application in order to achieve payment of her pro- rata long service leave entitlement.

[27] Mr Harris confirmed that he was not prepared to make that payment. Section 5(4) of the Long Service Leave (SA) Act 1987 states:

“5—Long service leave entitlement

....

(4) A worker is not entitled to a payment under subsection (3) if—

(a) the worker's contract of service is terminated on the ground of serious and wilful misconduct on the part of the worker; or

(b) the contract of service is unlawfully terminated by the worker.”

[28] I have taken it that Mr Harris' refusal to pay pro rata long service leave is based on his assertions about Ms Clavell's conduct. That matter is clearly outside of the jurisdiction of the FWC and may involve different considerations to those before me. Consequently, I am unable to take Ms Clavell's complaint in this respect into account.

Conclusion - Harsh , unjust or unreasonable

[29] I have concluded that the termination of Ms Clavell's employment was harsh in that the allegations against her have not been substantiated on the balance of probabilities. Additionally it was unjust in that the allegations were not put to her such that she had an opportunity to respond to those allegations. Accordingly, I have concluded that the termination of Ms Clavell's employment was unfair.

Remedy

[30] In these circumstances I am required to consider the issue of remedy.

[31] Section 390 establishes that the primary remedy is that of reinstatement. In this matter that is clearly impractical. It is not sought by Ms Clavell and I am convinced that reinstatement would be very short-lived.

[32] Section 390(3) then establishes that an award of compensation can be considered. In the circumstances of this matter I consider such an award to be appropriate. Section 392 establishes the factors that I am required to take into account in considering such an award. I have considered these factors.

[33] There is nothing that indicates that the amount being contemplated would affect the viability of Ms Harris's business. Ms Clavell had been employed for over seven years. Whilst that is a substantial period of time in that industry, I think the allegations against her mean that continuing employment of any significant duration would be unlikely even if Ms Clavell had not been dismissed on 12 February 2104. Clearly, the relationship between her and Mr Harris was irreparably damaged. Mr Harris’ conclusion that she had stolen money would have made a continuing employment relationship highly unlikely. Had Mr Harris conducted a more extensive investigation into his concerns about Ms Clavell’s actions, this could have resulted in summary dismissal or dismissal on notice. Whilst I think summary dismissal was the more likely option I have taken the possibility of dismissal with notice into account. I also acknowledge the possibility that the provision of more detail about the allegations of theft may have brought about Ms Clavell’s dismissal on a summary basis very soon after 12 February 2014. On balance, I have estimated a maximum of eight weeks payments could have been possible.

[34] There is no information before me that establishes efforts made by Ms Clavell to mitigate her losses since the termination of her employment. Further, there is nothing before me that indicates that she is likely to obtain paid employment in the near future. I have made a deduction in the amount payable to her on that basis.

[35] I have adopted the approach applied in Sprigg v Paul’s Licensed Festival Supermarkets 4 and have determined that an amount of 6 weeks pay less tax is applicable. An Order (PR550857) reflecting this decision will be issued,

SENIOR DEPUTY PRESIDENT

Appearances:

K Clavell on her own behalf

J Harris for Kerries Snack Bar.

Hearing details (Determinative Conference):

2014.

Adelaide:

May 19.

 1   [2012] FWAFB 1359

 2   Sound Recording, 19 May 2014, 10:40 am

 3 (1995) 62 IR 371 at 373

 4   AIRC, Print R0235, (24 December 1998)

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