Kyle Ogden v Prestia Holdings Pty Ltd
[2022] FWC 2234
•22 AUGUST 2022
| [2022] FWC 2234 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Kyle Ogden
v
Prestia Holdings Pty Ltd
(U2022/3037)
| DEPUTY PRESIDENT EASTON | SYDNEY, 22 AUGUST 2022 |
Application for an unfair dismissal remedy – valid reason not found – changes in approach to fatigue management requirements and company practice – no warning or notice about changes –– dismissal was unfair – remedy – compensation awarded.
Mr Kyle Ogden made an application to the Fair Work Commission under s.394 of the Fair Work Act 2009 (Cth) for a remedy, alleging that he had been unfairly dismissed from his employment with Prestia Holdings Pty Ltd.
Mr Ogden was employed by Prestia Holdings Pty Ltd (Prestia) as a licenced heavy vehicle dangerous goods driver from December 2020 until his dismissal in February 2022.
Prestia’s principal, Mr Sam Prestia, died suddenly on 18 January 2022 and his wife, Ms Naz Prestia, was required to take over the business. Prior to Mr Prestia’s death Ms Prestia had worked as the payroll officer for some time but was not otherwise involved in running the business.
On 7 February 2022 Mr Ogden sent an SMS to his supervisor, Mr Gunston, asking that certain documents be printed out for him at the start of his run, and indicated that he had received a driving infringement notice relating to alleged use of a mobile phone while driving outside of work hours.
The news of the infringement notice was passed on to Ms Prestia who then had a conversation with Mr Ogden. Mr Ogden was immediately stood down on pay and was given a show cause notice the next day.
Ms Prestia gave oral evidence of the conversation she had had with Mr Ogden on 7 February 2022 in relation to the infringement notice. She said she became very concerned about Mr Ogden’s “cavalier” approach to safety, based on what she says was a discussion between the two of them about the legality of “touching” a mobile phone whilst driving. Mr Ogden, she says, indicated to her that he thought certain conduct with the phone whilst driving was legal (or at least not illegal) but Ms Prestia says she was adamant that no driver can touch their phone whilst driving.
The show cause letter was issued the next day and it invited Mr Ogden to respond to three allegations – the infringement notice and two other matters. The show cause letter referred to a “serious and escalating pattern of misconduct”. The allegations put in the show cause letter were as follows:
“As you are aware there have been a series of incidents recently where you have failed to follow instructions including:
- On 18/01/2022 you breached instructions to contact the business after your last scheduled delivery and took it upon yourself to make further deliveries without communication which resulted in you going over hours, which is a breach of fatigue management laws, and
- On 18/01/2022 you were instructed to commence work at 1am instead you commenced at 2.07am.
As you are aware today 7/2/2022 you notified the business that you have received an infringement notice for using a mobile phone while driving. As you are aware mobile phone use while driving is illegal.
The business is distressed by this serious and escalating pattern of misconduct which has called into question the businesses ability to trust you to follow the law and lawful instructions in what is a high consequence, highly regulated role.
The standard response to such misconduct, let alone a pattern of escalations such as this, is termination of employment.”
The most contentious allegation in the show cause letter was the allegation that Mr Ogden breached fatigue management laws. Mr Ogden says that he was regularly directed to perform jobs that resulted in him driving longer than 12 hours in a shift. He says he was told when his employment commenced that he was able to refuse such jobs, but if he did then his employment would be terminated and Prestia would find a replacement.
In cross-examination Mr Ogden accepted that he was required under fatigue management laws to ensure that he did not drive for any more than 12 hours, regardless of directions given to him by Prestia.
Prestia provided certain payroll records under an Order to Produce that show that Mr Ogden worked longer than 12 hours from time to time. Mr Ogden argues that this pattern of work revealed Prestia’s ongoing tolerance for, if not encouragement of, contraventions of fatigue management laws.
The hours worked by Mr Ogden on 18 January 2022 were the focus of the parties’ attention at the time and also the focus of the evidence at hearing.
It is significant that Mr Ogden was paid in January for his 18-hour shift without question. In fact no questions were asked at all about that shift until three weeks later when Mr Ogden volunteered the fact that he had received an infringement notice.
There is a dispute about whether Mr Ogden was in fact required to declare to Prestia that he had received the infringement notice. Mr Ogden relies on the absence of any company policy to assert that he was under no obligation to advise the employer of the infringement notice but did so in any event. I do think it makes a difference whether there was any actual requirement that Mr Ogden notify Prestia, it’s a fact that he did and it opened up a line of enquiry for Prestia that led to Mr Ogden’s dismissal.
It was agreed at the hearing that Mr Ogden’s employment prior to 18 January 2022 was otherwise unblemished.
There was an email exchange between Mr Ogden and Ms Prestia that extended over a number of days where Mr Ogden asked for copies of his timesheet for the day in question and also for the bill of lading for 17 and 18 January 2022. The timesheet was provided the next day but Prestia refused to provide the bill of lading. Prestia did not provide this document because it did not think it was relevant. I am inclined to the view that it should have been provided although I do not think it would have made the difference between dismissal or not. Mr Ogden accepts that he drove for longer than 12 hours that day, and says further that it was not unusual or remarkable for him to do so.
In the email exchange between Mr Ogden and Prestia, Mr Ogden was able to provide a detailed response to the show cause letter. It was said at hearing that the primary reason for dismissal was Ms Prestia’s concern after speaking to Mr Ogden on 7 February 2022 about the infringement notice - specifically the conversation she had with him about the use of mobile phones while driving. It is problematic however that these concerns were not spelt out for Mr Ogden in the show cause letter or any of the subsequent correspondence.
In the dismissal letter Prestia accepted that “it is clear now that [Mr Gunston] continue to allocate work for the afternoon when he arguably should have remembered that you would be over 12 hours.” In my view this concession is significant. Prestia did not lead any evidence from Mr Gunston, who is no longer employed with Prestia.
The only direct evidence about working hours was from Mr Ogden. He said that during the course of his employment, he and his colleagues drove over 12 hours on a regular basis in accordance with instructions from managers at Prestia. This evidence was not challenged or contradicted by any evidence from Prestia at the hearing.
Accepting this evidence to be correct, as I must, it is quite obvious that disciplining or even terminating Mr Ogden because he drove for more than 12 hours on 18 January 2022 was inconsistent with Prestia’s previous tolerance of and encouragement of fatigue management breaches.
Prestia was entitled (if not required) to change its expectations of how Mr Ogden and other drivers manage their time and fatigue, but as a matter of fairness it needed to inform drivers of the change prior to taking any adverse action against them. There is no evidence of Mr Ogden being told before 18 January 2022, or at any stage, that he was required by Prestia to disregard or contravene directions given by Prestia’s own managers in situations where compliance with those directions would result in him driving more than 12 hours.
In these circumstances is quite unfair that Mr Ogden was dismissed without any kind of warning of the consequences for him if he were to continue following such management directions.
It is also unfair that Mr Ogden was dismissed because of his apparent views on mobile phone use in his conversation with Ms Prestia on 7 February 2022. If what he had said in the conversation was so damaging to the employment relationship that he could not have been given a warning, then he should have been told in no uncertain terms of Prestia’s concern in the show cause letter or at least in the course of Prestia’s investigation process.
Consideration
Section 387 of the FW Act requires me to take into account the following matters in determining whether Mr Ogden’s dismissal was harsh, unjust or unreasonable:
(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.
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me. I set out my consideration of each below.
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
To be a valid reason, the reason for the dismissal should be sound, defensible or well founded and should not be capricious, fanciful, spiteful or prejudiced. However, in assessing the validity of the reasons for dismissal the Commission will not stand in the shoes of the employer and determine what the Commission would do in the same position.
The test is whether, on the evidence before the Commission, there was a valid reason for dismissal connected with the employee’s capacity or conduct.
Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.
In this case there is very little contest about the incidents that occurred. Although there was some jousting about exactly how many hours Mr Ogden drove on 18 January 2022, it is accepted by both parties that he was directed to perform additional deliveries and that he drove for more than 12 hours that day. Similarly there was no contest that Mr Ogden received an infringement notice. Ultimately Mr Ogden challenged the infringement notice and it was withdrawn, but not much turns on this.
It is trite to say that wilful breaches of fatigue management laws by a driver would be a valid reason for dismissal. However in this matter the previous encouragement and tolerance for the same conduct, let alone the fact that the hours driven on the day in question were at the direction of Prestia, means that Mr Ogden’s hours worked on 18 January 2022 in excess of fatigue management requirements was not a valid reason for dismissal.
Similarly, in most instances a “cavalier” approach to safety could be a valid reason to dismiss someone from their employment. However, expressing a view about what he thought the rules were regarding mobile phones while driving, even if the view was wrong, does not constitute a cavalier approach to safety.
In the circumstances I do not find that there was a valid reason to dismiss Mr Ogden from his employment.
Was the Applicant notified of the valid reason?
Section 387(b) requires me to take into account whether Mr Ogden “was notified of that reason.” Sections 387(b) and (c) direct the FWC’s inquiry to matters of procedural fairness. In general terms a person should not exercise legal power over another, to that person’s disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case (per Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151 [70] citing FAI Insurances Ltd v Winneke (1982) 151 CLR 342; Kioa v West (1985) 159 CLR 550; Annetts v McCann and others (1990) 170 CLR 596).
In context, the inquiry to be made under s.387(b) is whether the employee was “notified” of that reason before the employer made the decision to terminate. The reference to “that reason” is a reference to the valid reason(s) found to exist under s.387(a) and the reference to being “notified” is a reference to explicitly putting the reasons to the employee in plain and clear terms.
Because I am not satisfied that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.
I do note that allegations were put to Mr Ogden and the letter of termination was substantial. For the most part Mr Ogden was notified of the reasons for his dismissal, even though the stated reasons were not valid reasons.
Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
This factor is also not strictly relevant to the present circumstances because I have not found that there was a valid reason related to dismissal.
Nonetheless Mr Ogden was given an opportunity to respond to the substantial allegations against him. As referred to above, Prestia did not specify its concerns about the conversation between Mr Ogden and Ms Prestia regarding the infringement notice.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
This factor is not a relevant consideration in this matter.
Was the Applicant warned about unsatisfactory performance before the dismissal?
As the dismissal did not relate to unsatisfactory performance, strictly speaking this factor is not relevant to the present circumstances.
However, it should be noted that if there was a change in Prestia’s approach to fatigue management requirements, Mr Ogden should have been put on notice of the change. Such a notice would not strictly be a warning, but Prestia should have left no room for misunderstanding about future expectations and the consequences for future contraventions.
To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
In Horizons Holdings Pty Ltd v Slavin[2012] FWAFB 8147 at [12] the Full Bench said:
“It seems clear that the intention of paragraph (da) is for the Commission to have regard to the size of the undertaking and to assess whether, in the context of that size, it has a capacity to formulate some formal procedures for effecting termination of employment. This could mean also that an undertaking that has no formal termination of employment procedure may be held to have acted unreasonably in a termination of employment case because its administrative and management structure is of such a magnitude that it ought to have formulated some formal termination of employment procedure. This seems to follow from the requirements of paragraph (db). I adopt this construction in determining this case.”
Prestia’s enterprise was not large and had not formulated formal procedures for effecting termination of employment.
To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
There was no dedicated human resource management specialists or expertise in Prestia’s enterprise. Ms Prestia was thrust into managing the whole of Prestia’s business because of the sudden death of her husband.
Nonetheless Prestia did put its allegations to Mr Ogden in a fairly comprehensive way and he was afforded, at least in most respects, procedural fairness.
What other matters are relevant?
Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
No other matters arise for consideration in this matter.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
I have made findings in relation to each matter specified in section 387 as relevant. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable and therefore an unfair dismissal.
Mr Ogden’s had direct and personal obligations to ensure that he complied with fatigue management rules, but the lines were substantially blurred by the apparent instructions given to Mr Ogden when his employment commenced about him losing his job if he did not do the additional work as directed.
Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of Mr Ogden was unfair.
Remedy
Being satisfied that Mr Ogden made an application for an order granting a remedy under s.394, was a person protected from unfair dismissal and was unfairly dismissed within the meaning of s.385 of the FW Act, I may order Mr Ogden’s reinstatement, or the payment of compensation to him, subject to the FW Act.
Mr Ogden does not seek reinstatement. He accepts that the basic level of trust between the employer and employee no longer exists. In any event there is evidence that in March 2022 Prestia made more than half of its drivers redundant and that by 30 June 2022 all of Prestia’s drivers were redundant.
I am satisfied that reinstatement is not an appropriate remedy.
Compensation
Mr Ogden seeks 26 weeks compensation, being the maximum available.
Mr Ogden obtained alternative employment on 28 April 2022 – some 9.5 weeks after he was dismissed. Prestia paid three weeks’ pay in lieu of notice to Mr Ogden.
Mr Ogden argues that I should assume that he would not have been redundant in March but instead redundant in June. Prestia argues that I can and should find that Mr Ogden would have been made redundant in March 2022 if his employment had not been dismissed in February.
I am prepared to assume that because Mr Ogden’s service was not long, he would have been one of the first drivers to be made redundant because the severance payments under the Act would be less for him than for other drivers with longer employment.
As such his employment would not have lasted longer than a few weeks, but he would have received severance payments.
Is an order for payment of compensation appropriate in all the circumstances of the case?
In all the circumstances, I consider that an order for payment of compensation is appropriate to compensate Mr Ogden for financial losses he has suffered arising from being unfairly dismissed.
Compensation – what must be taken into account in determining an amount?
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Mr Ogden in lieu of reinstatement including:
(a)the effect of the order on the viability of the Respondent’s enterprise;
(b)the length of the Applicant’s service;
(c)the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d)the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e)the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g)any other matter that the Commission considers relevant.
I will consider these factors in sequence:
a)There is no suggestion that an order for compensation would have an effect on the viability of the employer’s enterprise;
b)Mr Ogden’ length of service was 14 months, which is not so long as to favour a greater amount of compensation;
c)if Mr Ogden had not been dismissed on 21 February 2022 his employment was unlikely to have continued far into March 2022 when the first round of driver redundancies took place. Prestia says that half of the fuel tanker drivers were made redundant a fortnight after Mr Ogden’s termination;
d)Mr Ogden mitigated his loss by finding other employment within 9 weeks;
e)Mr Ogden indicated that in his new position he earns approximately $2,600 per week;
f)the amount of income reasonably likely to be earned by Mr Ogden between the making of the order for compensation and the payment of compensation is not directly relevant; and
g)There is one other matter to consider, being the fact that Mr Ogden would have received 4 weeks’ severance pay if his employment had been made redundant in March 2022.
Compensation – how is the amount to be calculated?
The well-established approach to the assessment of compensation under s.392 of the FW Act is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 (Sprigg).
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 1
I have estimated the remuneration Mr Ogden would have received, or would have been likely to have received, if Prestia had not terminated the employment to be $6,705 on the basis that Mr Ogden would likely have remained in employment for a further period of three weeks until his employment would have been made redundant.
There was no agreement about Mr Ogden’s average weekly wage. In his application Mr Ogden claimed to have earned an average of $3,137 per week. Prestia says that over the 58 weeks of employment Mr Ogden earned an average of $2,932 per week and over the last 18 weeks he earned an average of $2,235 per week. I have decided to use the 18-week average because it seems more indicative of the amounts the Applicant was likely to receive each week over the three weeks. Although Prestia said it made other drivers redundant “a fortnight” after Mr Ogden was dismissed, there was no evidence of the details surrounding these other redundancies and I have adopted a more conservative estimate of three more weeks of employment.
Step 2
Mr Ogden did not earn any monies in the first three weeks after the date of dismissal. I have ignored the amount of notice paid to Mr Ogden on termination because Prestia would have had to pay or give that notice in March in any event.
Step 3
Given the reasonably short period that Mr Ogden was out of work I do not think it is appropriate to deduct any amount for contingencies.
Step 4
I have considered the impact of taxation but have elected to leave the gross amount calculated at Step 1 untouched.
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case” (per Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206 at [17]).
In the circumstances I do not think three weeks’ pay is adequate compensation because Mr Ogden was unfairly deprived of the severance payment he would otherwise have received if his employment had continued into March and then been made redundant. The compensation payable should be increased by four weeks’ pay, bringing the total amount to $15,645 (7 weeks at $2,235 per week).
Duly adjusted I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.
In this matter the amount of the order for compensation is not to be reduced on account of misconduct (per s.392(3)).
The cap on compensation in s.392(5) of the FW Act has no impact upon the present matter.
In light of the above, I will make an order that Prestia pay $15,645 gross less taxation as required by law to Mr Ogden in lieu of reinstatement within 21 days of the date of this decision, plus an additional component for superannuation.[1]
DEPUTY PRESIDENT
Appearances:
Mr D Garan for the Applicant
Ms E Radwanowski for the Respondent
Hearing details:
2022.
Sydney.
July 18.
[1] PR745053.
Printed by authority of the Commonwealth Government Printer
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