Linda Sika v Khaled El-Sheikh Pty Ltd atf the El-Sheikh Practice Trust T/A Tristar Medical Group

[2016] FWC 316

[2016] FWC 316

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Linda Sika
v
Khaled El-Sheikh Pty Ltd atf the El-Sheikh Practice Trust T/A Tristar Medical Group
(U2015/11587)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 15 JANUARY 2016

Application for relief from unfair dismissal.

[1] Ms Linda Sika’s employment was terminated by Khaled El-Sheikh Pty Ltd on 27 August 2015. Ms Sika was employed as a hospitality worker in a café operated by Khaled.

[2] I granted permission to Khaled to be represented by Mr Avery, a legal practitioner. That permission was not opposed by Ms Sika. Ms Sika was represented by Mr Mitton, a friend of the family. Khaled submitted that the matter involves some complexity and allowing representation would enable the matter to be dealt with more efficiently. Further, it submitted that it would be unfair not to allow Khaled to be represented as it could not represent itself effectively. It submitted that it only had one HR Manager who was not capable of representing Khaled. I accepted those submissions. I accept given the nature of the allegations, Khaled would not be able to represent itself adequately and it would be unfair not to allow Khaled to be represented by a legal practitioner.

[3] On 30 November 2015, Mr Avery sought an adjournment of the matter until after 15 April 2016. He submitted that Khaled had not been able to gather the evidence necessary for its case as the records it relied upon were in the custody of Victoria Police, which would not provide the documents to Khaled. After receiving the request, Mr Avery was advised that he could seek an order for production directed to Victoria Police, but he pressed his application. I declined the application for an adjournment. Khaled had been on notice since 8 October 2015 that it was required to file its evidence with the Commission. It was aware that it was obliged to produce sufficient evidence to the Commission to establish that the conduct it relied upon occurred. Khaled was at all times represented by legal practitioners who were aware that the Commission had power to compel the production of documents. The application for an adjournment was made eight days before the hearing of the matter. It was opposed by Ms Sika. Given the serious allegations made against her, she wanted the hearing to go ahead. Documents filed with the Commission supported her submission that the matter was causing her significant distress. Mr Avery did not subsequently make an application for the production of documents.

[4] Ms Sika’s employment was terminated for serious misconduct. Her termination letter said that her employment was terminated immediately due to gross misconduct, including theft and fraud.

[5] At the hearing, Khaled submitted that her conduct in voiding certain transactions was misconduct justifying her dismissal.

[6] There is no dispute that Ms Sika had been voiding transactions made by customers and/or entering no sales when in fact sales had occurred.

[7] The café, like many businesses, had a float for the till. For cash transactions, when a customer buys a product, the details of the transaction are entered on the till and monies taken and placed in the till. At the end of the day, a printout of the transactions is produced. The money from the till was placed in the safe overnight and the next morning the Manager reconciled the amounts and after taking account of the float, the till either matched the total on the printout or it was under or over. The Manager provided reconciliation details to the finance department once a week and the monies were banked.

[8] It was Ms Sika’s evidence that Mr Martin Saxby, her Manager, “came to me one day and said that the safe money was down, and he asked if I could do some voids in the morning – cash sales – to get the safe back up to its original amount.” 1 Voiding involved ringing up the order taking the money and then voiding the sale.2 It was her evidence that she placed the monies received from void sales in the till.3

[9] Ms Sika said that Mr Saxby asked her to do this around the start of 2015 or the end of 2014. She did not think this was anything irregular or strange. 4

[10] Ms Sika said she discussed with Mr Saxby why the till was down and they could not work out why it was. She said that mistakes could be made which could put the till out. 5 Ms Sika said she trusted Mr Saxby.6

[11] Ms Sika accepted that most of the time the till did not balance because there was more money than there should have been. 7 She also accepted that this occurred because she had been voiding sales.8

[12] Ms Sika gave evidence that she used to balance the till at the end of the lunch period and if there was more money in the till than was registered on the till, she would place that money in the safe 9 and she would write the total amount of cash down on the back of the X1.10 At some point, she stopped recording the amount and mostly told Mr Saxby.11 Ms Sika accepted that this meant there was therefore no record of how much was in the safe.12

[13] Ms Sika accepted that she voided transactions when the till was down. 13

[14] CCTV footage and till receipts 14 showed Ms Sika and Mr Saxby voiding each of the sales on the morning of 27 August 2015. It was put to Ms Sika that there could be no reason to void those sales as the till would not have been under or over at that time because there had been no other sales. She explained this by saying that she did not know what the safe was or the banking was. She continued to do cash sales until she was told to stop.15 Ms Sika accepted that she had no idea how much the till would be over or under when she voided sales.16

[15] Ms Sika said there were no standard procedures and as Mr Saxby was her direct boss, she did what he asked her to do. 17 Ms Sika had worked in the hospitality industry for a long time and she agreed that this practice was not the norm.18

[16] It was her evidence that she never took any monies from the business. She never thought that there was anything wrong in what was being done despite not being asked to do this by any other manager in her years working in hospitality.

[17] At the beginning of 2015, Ms Carolyn Chamberlain commenced working at the cafe. It was her job to close up at the end of the day. As part of the job, she counted the monies at the end of the day and reconciled the amounts.

[18] Ms Chamberlain immediately noticed that the amount in the till was out by $20 to $30. She spoke to Mr Martin Saxby, the Manager, who told her that “you girls make mistakes all the time so I just don’t ring a few things up and put the cash in the till.” 19 Ms Chamberlain continued to count the monies and it was regularly out by $20 to $30.20

[19] She did not do anything about this because she was new.

[20] Ms Chamberlain then noticed that the amounts that the till was over were increasing and she spoke to Mr Saxby again and he told her that it was not her job to count the monies and that she should just put the money in the safe. 21 Despite this instruction, Ms Chamberlain continued to count the monies but no longer recorded how much over the till was.22

[21] Ms Chamberlain discussed this with a co-worker but they did not consider that they could report it because the Manager’s mother in law was the receptionist at head office and she thought that it would get back to Mr Saxby and she would lose her job. 23 The co-worker reported to Ms Chamberlain that Ms Sika was doing something with the tills each lunch time when she was not in the café. Subsequently, Ms Chamberlain observed Ms Sika counting the money in the till.

[22] On about 11 August 2015, Ms Chamberlain rang head office and alerted them to her concern that money was being taken from the café. As a result, arrangements were made to review the CCTV footage, the till reports and the monies in the safe. Ms Chamberlain said that Ms Josephine Capogreco, the HR Manager, came to the café that night and every night from then on to count the money in the safe and she was required to countersign the totals. 24

[23] Ms Chamberlain said that she did not initially report what she saw because she thought reporting it would jeopardise her career because Mr Saxby and Dr Khaled El-Sheikh were extremely close. 25

[24] Ms Capogreco gave evidence that after being notified by Ms Chamberlain, her and other staff went to the café to count the monies. They also arranged to download information from the tills. 26 In addition, CCTV footage was downloaded. Ms Capogreco observed the CCTV footage and the dockets and determined that Ms Sika and Mr Saxby were voiding transactions. It was, however, Mr Saxby who each morning counted the monies taken. She was not able to observe if Mr Saxby took any of the money he was counting.

[25] Ms Capogreco gave evidence that when they counted the money in the period prior to the dismissal, it was not adding up to what it was supposed to be and it was over more than it was under. 27

[26] Ms Karen Cross, the Finance Team Leader, gave evidence that the Manager in this case, Mr Saxby, was responsible for bringing the banking into head office and he had a very autonomous role. 28

[27] After the allegation was made by Ms Chamberlain, Ms Cross said that it was arranged for the tills to be examined, but it was only possible to obtain historical data going back to 5 August 2015. 29 From viewing the historical data and the corresponding CCTV footage, Ms Cross formed the view that both Ms Sika and Mr Saxby were stealing money.30

[28] It was her evidence that Ms Capogreco counted the cash each night after 12 August 2015 and the monies brought to them by Mr Saxby did not match the money counted by Ms Capogreco. 31

[29] It was her evidence that the amounts being taken ranged from $60 to $160 each day. 32

[30] Ms Cross accepted that the issues of unders and overs had been discussed with Mr Saxby. She said that there would be $2 to $5 up or down and the finance team member would ask Mr Saxby to explain. 33 She said that Mr Saxby had been given a cash reconciliation form to be used that required two people to sign, but he never used it.34

[31] The information was provided to the police and to the company director who decided that Ms Sika’s employment must be terminated. 35 The police did not want the staff to be alerted to the investigation until such time as they had arrested them.36 There was a concern that if the staff knew about what was going to happen, evidence could be destroyed.

[32] On 27 August 2015, Ms Sika was arrested and taken to the police station where she was questioned. She was released without charge but advised that there was an on-going investigation. That afternoon, she was telephoned and told that her employment was terminated for serious misconduct, namely theft and fraud, and that she would be provided with a letter of termination.

Was the termination of employment harsh, unjust or unreasonable?

[33] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Fair Work Commission must take into account the following:

s387(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);

[34] The allegations of theft and fraud are serious and I am required to find on the balance of probabilities that the conduct complained of occurred. In this case, I am not satisfied that Ms Sika is guilty of theft or fraud. There was no direct evidence that Ms Sika received any monies taken from the business. The evidence established that there were discrepancies between the monies in the safe and the monies provided for banking. This evidence was not challenged. However, there was no evidence that Ms Sika took this money or received a share of this money. She denied taking any monies and it is was not put to her in cross examination that she received a financial benefit from the actions of Mr Saxby. I am also not satisfied that Ms Sika intended by her actions to facilitate anyone else stealing from Khaled. In those circumstances, I am not prepared to infer that she was involved in defrauding her employer or stealing from her employer.

[35] However, it was put that her conduct in voiding transactions was still serious misconduct and provided Khaled with a valid reason for terminating her employment. Ms Sika described her decision to follow her bosses’ instructions as silly. 37 Mr Mitton conceded that it might be misconduct,38 though he submitted that it was not done maliciously or dishonestly.39 I put to Mr Mitton that Ms Sika, by voiding transactions, misrepresented to her employer how much money was taken on a daily basis. I put to him that her explanation for this was “because her manager told her to do it.”40 Mr Mitton submitted that Khaled had months to investigate this and ask for an explanation. He submitted that they were aware as late as November 2014 that there were issues.41 I do not accept this submission. While Ms Cross gave evidence that there were issues with the till being between $1 and $5 out, there is no evidence that Khaled was aware of what was happening until Ms Chamberlain reported her suspicions in August 2015 and Khaled then acted promptly. I accept the submission that the autonomy given to Mr Saxby and the lack of stricter process for cash monitoring contributed to this situation.

[36] I am unable to accept that it was reasonable for Ms Sika to fail to properly record the sales she made. Ms Sika did not give evidence that she was told particular amounts that she needed to void. For example, there was no evidence given by her that Mr Saxby, after reconciling the till, told her that the till was under or over that day and therefore specific adjustments were needed to balance the till. It is also difficult to understand how Ms Sika could have thought that having more money in the till than was showing on the till reports was reasonable. Mr Mitton put that what she did was serious. I agree with that submission.

[37] I am not satisfied that Ms Sika’s conduct can be justified because her Manager told her to do it. While I am not satisfied that she deliberately or maliciously misled her employer, her actions in failing to accurately record the sales enabled her employer to be deceived about the café’s takings. In a cash based business, an employer is entitled to trust its employees to accurately record the takings. Whether the till is under or over, the employer is entitled to receive accurate information.

[38] That conduct provided Khaled with a valid reason to terminate her employment.

s387(b) whether Ms Sika was notified of that reason;

[39] Ms Sika was not notified of the reason before the decision to terminate her employment was made. Dr Khaled decided to terminate her employment 42 prior to the arrest, but the police did not want the termination to occur until after the arrest for fear that information would be deleted from a laptop in Mr Saxby’s possession.43 Ms Sika was not notified of any of the reasons for the termination of her employment prior to the decision to terminate her employment.

s387(c) whether Ms Sika was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[40] Ms Sika was not given an opportunity to respond prior to the decision being made. She was never provided with an opportunity to respond to the contention that the voiding of transactions over such a long period of time was itself a valid reason to terminate her employment.

s387(d) any unreasonable refusal by the employer to allow Ms Sika to have a support person present to assist at any discussions relating to dismissal;

[41] There was no refusal to allow Ms Sika to have a support person when she took the phone call on 27 August 2015.

s387(e) if the dismissal related to unsatisfactory performance by the person—whether Ms Sika had been warned about that unsatisfactory performance before the dismissal;

[42] The dismissal did not relate to Ms Sika’s performance.

s387(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;

[43] There were no submissions that the size of the business had an impact on the procedures followed. This is a large business and its failure to provide Ms Sika with any opportunity to put her version of events weighs in favour of a finding that the dismissal was unfair.

s387(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;

[44] There were dedicated human resources staff and again the failure to afford Ms Sika with any opportunity to put her version of events weights in favour of a finding that the dismissal was unfair.

s387(h) any other matters that the FWC considers relevant.

[45] It was submitted the dismissal was harsh given her personal circumstances. It was her evidence that because of the allegations and her arrest her reputation has been permanently damaged. Ms Sika, at the date of the hearing, had not been charged with any offence.

Conclusion

[46] It was submitted by Khaled that the valid reason outweighs the lack of procedural fairness. 44 It was put that Ms Sika voided transactions every day for over eight months. It submitted she was either wilfully blind or complicit with Mr Saxby.45 It was submitted that even if she had been provided with that opportunity to be heard prior to the decision being made, it would have made no difference.46

[47] Ms Sika submitted that her termination was without any real foundation or merit. She submitted that it was unfair that Khaled assumed she was involved in an alleged theft by deception. Mr Mitton submitted that Ms Sika was a junior employee and was doing as she was told. She submitted that she had done nothing wrong. She submitted her dismissal was unfair.

[48] While Ms Sika complained about being arrested and about what happened during her arrest, Khaled cannot be held responsible for that. They were entitled to make a complaint to the police and to accept their advice about what it should do during the investigation. Khaled are not responsible for the damage to Ms Sika’s reputation and health that flowed from those events.

[49] By her conduct, even though unwitting, Ms Sika has provided the means whereby her employer may have been defrauded. Her explanation that she was only doing what she was told is not reasonable. Unlike Ms Chamberlain, Ms Sika did not give evidence that she felt any pressure from Mr Saxby to do as he said. She did not question his direction. That she was unaware of any wrong doing by Mr Saxby does not excuse her conduct. She was, by her conduct, misleading her employer about the business’s takings. There was a valid reason for the termination of her employment.

[50] I accept that Khaled followed police advice about not terminating Ms Sika’s employment prior to their investigation. However, there was no reason why after Ms Sika had been released by the police, Khaled could not have met with Ms Sika and provided her with an opportunity to explain her version of events.

[51] Khaled terminated Ms Sika’s employment for theft and fraud. Had Ms Sika been afforded an opportunity to explain her reasons for voiding the transactions and been afforded the opportunity to explain that she did not take any monies, Khaled may not have reached the view that she was guilty of theft and fraud. She was entitled to that opportunity and the failure to provide her with that opportunity means that the dismissal was unfair.

Remedy

[52] Ms Sika is not seeking reinstatement of her employment.

[53] In assessing any amount in lieu of reinstatement, the Commission is required to have regard to the following:

(a) the effect of the order on the viability of the employer’s enterprise;

[54] No submissions were made that any order would affect the viability of Khaled’s enterprise.

(b) the length of the person’s service with the employer;

[55] Ms Sika had been employed for 18 months. Her length of service neither increases or decreases the amount of compensation.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;

[56] Ms Sika submitted that she would have continued in employment until she retired. I do not accept that submission. I have found that Khaled had a valid reason for the termination of Ms Sika’s employment. Had she been able to explain her conduct, she may have been able to change Khaled’s view about her culpability, but in those circumstances, it is more likely than not that Ms Sika’s employment would have been terminated, albeit with notice because of her conduct in failing to properly record sales. As Ms Sika had been employed for 18 months, she would have been entitled to two weeks’ pay in lieu of notice.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;

[57] Ms Sika has been unfit to work since the dismissal, as such, she has been unable to mitigate her loss. In the circumstances, I make no deduction from the amount of compensation for her failure to mitigate her loss.

(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;

[58] Ms Sika has not earned any monies.

(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;

[59] Ms Sika is unlikely to earn any monies between the making of the order and the payment of the compensation.

(g) any other matter that the FWC considers relevant.

[60] There was no submission that there were any other relevant factors.

[61] It was submitted that there should be a significant reduction on account of Ms Sika’s misconduct. It was submitted that the voiding of sales was misconduct and it was not a single or sporadic event. It was submitted that it was a pre-meditated scheme which was increasingly applied over eight months. If, by pre-meditated scheme, Mr Avery was submitting that Ms Sika planned to deceive, I do not accept that submission. I have found that her conduct was unwitting. However, I have found that her misconduct contributed to Khaled’s decision to terminate her employment. In those circumstances, I will make a deduction of 10% from the amount of compensation.

Conclusion

[62] Ms Sika earned $1,040.57 per fortnight. I therefore order that Khaled pay Ms Sika $936.51 and $88.97 to her superannuation fund within 21 days of the making of this order.

DEPUTY PRESIDENT

Appearances:

Mr A Mitton on behalf of the Applicant.

Mr P Avery on behalf of the Respondent.

Hearing details:

2015.

Mildura:

December 8.

 1   Transcript PN 55.

 2   Ibid PN 56.

 3   Ibid PN 58.

 4   Ibid PN 152-154.

 5   Ibid PN 164 and 165.

 6   Ibid PN 167.

 7   Ibid PN 201.

 8   Ibid PN 202.

 9   Ibid PN 71.

 10   Ibid PN 232-233.

 11   Ibid PN 234-235.

 12   Ibid PN 246.

 13   Ibid PN 250.

 14   Exhibit R11.

 15   Transcript PN 413.

 16   Ibid PN 417.

 17   Ibid PN 420.

 18   Ibid PN 423.

 19 Exhibit R1 at [5].

 20 Ibid at [7].

 21 Ibid at [8].

 22 Ibid at [11].

 23 Ibid at [16].

 24   Transcript PN 736-741.

 25   Ibid PN 705-706.

 26 Exhibit R2 at [8].

 27   Transcript PN 838-9.

 28   Ibid PN 883.

 29 Exhibit R4 at [8].

 30 Ibid at [10].

 31 Ibid at [18].

 32 Ibid at [20].

 33   Transcript PN 997.

 34   Ibid PN 981.

 35   Ibid PN 1025.

 36   Ibid PN 1030.

 37   Ibid PN 426.

 38   Ibid PN 1084 and 1115.

 39   Ibid PN 1099.

 40   Ibid PN 1104-1107.

 41   Ibid PN 1115.

 42   Ibid PN 783.

 43   Ibid.

 44   Ibid PN 1145.

 45   Ibid PN 1152-53.

 46   Ibid PN 1199.

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