Luke Wenman v Fuchs Lubricants (Australasia) Pty Ltd
[2022] FWC 2327
•8 SEPTEMBER 2022
| [2022] FWC 2327 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Luke Wenman
v
Fuchs Lubricants (Australasia) Pty Ltd
(U2021/8325)
| COMMISSIONER WILLIAMS | PERTH, 8 SEPTEMBER 2022 |
Application for an unfair dismissal remedy
Mr Luke Wenman (the applicant) has filed an application for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Cth) (the Act). The respondent is Fuchs Lubricants (Australasia) Pty Ltd (Fuchs or the respondent).
At the hearing of the matter, evidence was given by the applicant, and for the respondent evidence was given by Mr Paul Wiseman, the Sales Manager (WA), Mr Joshua Selwood, the National Sales Manager, and Ms Gabriella Gutierrez, the Human Resources Manager.
Evidence and factual findings
The applicant commenced working in July 2019.
The respondent is a global group of companies which develops, produces and sells lubricants in a range of industries, including automotive suppliers, original equipment manufacturers, mining and exploration, metalworking, agricultural and forestry, aerospace, power generation, construction and transport.
The lubricant products and related services are marketed in categories: automotive lubricants, industrial lubricants, lubricating greases, metal processing lubricants, special application lubricants and services.
The automotive trade division in Australia services multiple channels including but not limited to Franchise Car Dealerships (FCD), Civil Transport and Local and National Distributors.
The FCD channel makes up approximately 9% of the respondent’s business in Australia.
The applicant was employed by the respondent as an Account Manager to sell the respondent’s products in Western Australia.
The applicant’s position description[1] says he is responsible for the sales account management function for the respondent’s automotive trade business in the WA territory as defined by the Region Sales Manager.
The respondent supplies oil to customers in 1000 L or 205 L containers which are delivered to customers by a third party. The unfilled capacity in a customer’s oil storage tank is referred to as “ullage”.
The applicant was dismissed on 27 August 2021.
The letter of termination records a history of meetings concerning his performance, beginning with the issuance of a verbal warning on 17 December 2020. Following this, a further meeting was held in February 2021 and the applicant was issued with a formal warning letter on 29 March 2021. Next, he was issued with a final warning letter dated 10 May 2021 which states that if significant improvement in his performance is not achieved by 11 August 2021 his employment is likely to be terminated.[2]
The termination letter states that the respondent considers his performance is still unsatisfactory and have decided to terminate him for the following reasons:
·Order accuracy having not improved to the level required, resulting in customers running out of oil multiple times since 6 May 2021 and customer orders being returned due to insufficient ullage in the tank.
·CRM/Activity has not improved to the required level. Reporting not updated by close of business Friday of each week. CRM missing inputs from 6 April 2021 to 18 May 2021.
·The steps required to achieve objectives in the Performance Improvement Plan tool that was created to support you. Steps to achieve objectives were not completed.
CRM is the respondent’s Customer Relationship Management database.
The applicant’s evidence is that in the last six months of his employment he was subjected to unreasonable performance management. He says the warnings he received during this period gave the impression that the respondent was doing the right thing by him when in truth it was setting him up for failure.
The applicant’s evidence is that during his two years working for the respondent, he was bullied and harassed by his boss Mr Wiseman, by Mr Selwood and by the WA Warehouse Manager Mr Paul Harbor.
The applicant claims these managers created performance issues that led to his dismissal by:
Instructing him to conduct his daily duties in a way that created ongoing issues;
On the 29th November 2019, instructing him to go against Senior Management’s instructions and actively target internal National OEM Accounts sales to improve the WA zone's sales;
Continually withholding crucial information and changing internal processes to suit his direct Manager;
Providing him with little to no support to address reoccurring issues he had raised with his direct Manager, the National Sales Manager and Human Resources;
Falsifying his performance reviews by deleting his comments of concern and inconsistent performance scoring by his Manager;
Falsifying internal reports to increase the number of product returns in his name. One example happened on 4 September 2020 for customer Auto Classic. They ordered the incorrect amount of oil, not him, but he was held responsible;
Charging excessive freight charges to his accounts that reduced his territory’s gross profit;
Providing him with minimal or no training on internal software;
Conducting investigations in a grossly unfair manner;
Disregarding his peers who had the same or worse performance issues but they were never disciplined or warned and continue to be employed;
Pressuring him to perform duties that were unsafe which resulted in an injury;
Highlighting and exposing issues in front of other colleagues and customers issues that were out of his control, not his responsibility or just human error;
Demanding that he not follow the Health & Safety Policy and report his workplace accident;
Disregarding his consistently high sales performance;
Making unnecessary demands that were time consuming and left little or no time for administration related tasks, like CRM activities;
Continuing to dismiss him from his position after significantly improving the amount of product returns and CRM activity as requested of which there is clear documentary proof.
The applicant’s evidence is that he was targeted by his managers after he spoke to human resources on 18 June 2020 about a number of complaints as follows:
The misuse of internal company money/Gross Profit (GP) kept in “rebate accounts" that affected the GP of his territory and therefore affected his income. These "rebates'' should not have existed on the accounts that they were taken from.
Being a scapegoat for an agreement that went wrong. Mr Wiseman and Mr Selwood supplied around $30,000 of equipment to a new customer and neglected to put any signed agreements in place in case the customer decided to purchase from another oil supplier or did not purchase the agreed volumes of oil. He inherited this account and the cost of the equipment was deducted from his territory GP therefore affecting his income. He met with Mr Wiseman on 5 June 2020 to discuss this and admitted that there was still a large outstanding debt for the equipment.
Mr Wiseman, told him he purchased 4 x VIP tickets to the 2020 Fl Grand Prix at the cost of $20,000 for a customer plus one guest and for himself plus one guest. This was approved by Mr Selwood and paid for using his territory expenses and affected his GP and income.
Mr Wiseman demanding that he not follow the Health & Safety Policy and report his workplace accident. He fractured his ankle while removing oil from a bulk tank and transferring it into another bulk tank at a customer's workshop, a job that he should not have been doing in the first place and on his own and was pressured to do by Mr Wiseman. Because Mr Wiseman felt this looked bad on him, he told him not to report the accident to the health and safety officer. After a long discussion and a call to the safety officer, he finally backed down and completed the form with him.
On the 17 January 2020, Mr Wiseman deleted his comments from his performance review. In section 6 "Barriers to more effective performance" he commented that he had not been supplied with a contact list for all of his customers. Mr Wiseman felt that this looked bad on him so he decided to delete the comments in front of him. After numerous requests for a contact list, Mr Wiseman never supplied him with a list.
His son was born in February 2020, at the start of the COVID-19. He was maintaining his sales orders from home as instructed by the General Manager of the respondent. Paul Wiseman made threats that he would lose his job if he didn't continue to visit customers and cold call for new business. As his son was a newborn with little immune system to fight a virus and there was little information to hand about the severity of COVID-19, he voiced his concerns about visiting customers and making cold call visits as it was a huge risk to his son and potentially many others as he was traveling from customer to customer. Because of Mr Wiseman’s consistent threats about losing his job if he didn't continue to visit customers, his wife spoke with their GP during their son’s 8-week-old check up to understand how severe COVID-19 would be. The GP was concerned and wrote a letter for him to supply to his manager asking that he work from home. This made no difference and the threats continued. As his wife was on maternity leave, he was under so much pressure to keep his job so visited customers and made the cold calls. He raised this with HR and they allowed the National Sales Manager, Mr Selwood, to deal with his concerns. He told him that his wife exaggerated the situation to the GP to get the letter. This was not only untrue but discriminatory and bullying.
His evidence was that the then human resources manager Ms Anna-Lisa Chivers told him after an investigation that everything was above board and then handed him over to Mr Selwood to deal with the last three points above. The applicant says Mr Selwood’s spoke to him on the phone on 24 July 2020 to discuss those issues but the applicant felt he didn’t address any of them with Mr Wiseman and blamed the applicant for everything. His evidence in chief was that Mr Selwood mentioned that he knew about the first three points above, even though human resources had told the applicant it would be kept confidential.
The applicant’s evidence in chief was that after this he was subjected to management performance by Mr Wiseman and Mr Selwood which eventually led to his dismissal.
His evidence was that it was not recognised in the last six months of his employment that he was performing his role adequately so far as sales performance in his territory was concerned. He obtained a growth in gross profit and was paid a commission for that.
In the first quarter of 2021, his evidence was that he was number 1 out of 23 account managers nationally for obtaining new business.
With respect to allegations that he was ordering incorrectly, based on returns from customers, his evidence in chief was that there were a range of instances where customer returns were made to the warehouse which were the fault of the customer, but the warehouse manager would enter into the system that it was his fault.[3]
Regarding ordering, his evidence was that Mr Wiseman gave him inconsistent instructions and wanted him to spend less time with customers. This meant that he did not have the opportunity to strictly monitor the amount of oil they had on hand or needed for each order which resulted in over and undersupply from time to time. His evidence was he earnestly endeavoured to implement checks and balances to ensure that returns by customers were minimised. His evidence was that there will never be a situation where there will be zero returns as evidenced by his colleagues, but his evidence was that his figures improved substantially.
Regarding CRM reporting, his evidence was that entering data into the respondent’s CRM was not critical to the job. Mr Wiseman directed him to do it daily, yet he himself would only get it done weekly.
His evidence was that others in the business did not achieve daily inputs. His evidence was that he could not always do it daily due to the pressure of other work. He says the dates cited in the dismissal letter being between 6 April 2021 and 18 May 2021 were unfair as this covered a period of holidays.
His evidence in reply regarding CRM was, amongst other things, that he had not been properly trained in its operation and there were technical issues with the system.[4]
His evidence in reply also was that over the last 10 years, his previous roles had required him to record even more CRM activity than did the respondent and had required a more in-depth analysis about customer interactions. He had been an integral part of the ongoing improvements of the CRM system at General Motors Holden and his evidence was that he therefore clearly understood the importance of a good CRM system and the information needed to assist the growth of the business. He, however, says the information Mr Wiseman instructed him to put into the CRM system was very limited and he could not understand the benefit to the business.[5]
I note this evidence in reply from the applicant is inconsistent with his evidence in chief that entering data into the respondent CRM was not critical to the job.[6]
With respect to the respondent’s criticism of him regarding ordering of bulk oil, his evidence was that when Mr Wiseman inducted him he was told to place orders in multiples of 205 L drums. He says, however, that this instruction changed[7] and Mr Wiseman then instructed him to supply more products in 1000 L containers to retain better gross profit. This required the oil levels of a larger number of tanks to be a lot lower and a lot closer to running out compared to supplying 205 L drums. He says this also meant he had to visit the FCDs more regularly.
He says Mr Wiseman instructed him to only order 1000 L containers. His evidence was that he could not, for example, where the circumstances warranted it order eight 205 L drums.[8] His evidence was he found this to be unproductive and if he was unable to place a bulk order during a visit to an FCD, he would have to later revisit the customer to recheck the oil levels hoping they had not run out.
The applicant’s view was the expectations placed on him through the Performance Improvement Process (PIP) were deliberately designed to put pressure on him to make a mistake. Targets of the zero bulk oil returns were unrealistic and unachievable. He says he told them that it was unachievable because there was a high potential for human error.
His evidence was also that both Mr Wiseman and Mr Selwood advised him in multiple meetings that if there was a bulk oil return, they would talk about it and nothing would be done if it did not happen too regularly.[9]
He says many of the criticisms of him were actually errors by Mr Wiseman in the first instance.
The evidence of Mr Wiseman is that he is the respondent’s Sales Manager (WA) and has been employed in this position since April 2019. Prior to this, he was an Account Manager for 5 years, the same role as the applicant. As Sales Manager, he manages the two Account Managers in Western Australia and also manages his own sales territory.
The applicant reported to Mr Wiseman.
He says an Account Managers' key role is to ensure customer satisfaction, as well as to bring in new accounts. While Account Managers have a high level of autonomy in their roles, he oversees their work and is available to provide support where required.
What is required in relation to the ordering and monitoring of customer oil levels depends on the customer. Some manage their own stock levels and will notify Fuchs when they require more oil. Others require more attention from Fuchs, either because this is the historical relationship, or because they prefer for Fuchs to provide support managing stock levels. For the latter customers, it is the Account Managers' role to go to their site, check their stock levels and place an appropriate order.
Where customers are transitioning from relying on Fuchs to doing it themselves, Account Managers are required ensure the customer is aware of how this is done and support them in learning what is required.
To support customers, Account Managers need to understand how often the customer requires oil, so they can be proactive about making and monitoring orders. This is important from a customer service perspective, but also ensures orders are correct and cost effective.
His evidence is the respondent supplies various oils in 1000 L and 205 L containers delivered by a third party provider, DTM. He says it is preferable for 1000 L to be sent as this is more cost effective for customers, as well as Fuchs. However, customers' tanks are only able to be safely filled to a certain level. If too much oil is sent, there is insufficient ullage for the tank to be safely filled. For example:
if a customer has 200L of oil remaining, and their tank has a safe fill limit of 1400L, it would be appropriate to order 1000L for that customer; and
if the customer had 200L of oil remaining, and their tank has a safe fill limit of 1000L, they could only fit 3 x 205L containers.
If an Account Manager incorrectly orders too much oil, the third party deliverer is not able to put any of the oil in the tank. So, if 1000 L has been ordered, but there is only sufficient ullage for 700 L, the driver is not able to fill the 700 L and return the remaining 300 L as the driver must ensure the full amount in the container that they are pumping out of is used. In that case, Fuchs pays for the oil to be unsuccessfully delivered to the customer and then pays for it to be returned to the warehouse and re-pumped. Fuchs will then issue a credit to the customer because the customer will have already been invoiced for this order. The customer can then use this credit to seek redelivery of the order at a time that the oil will fit in the tank. Where this occurs, Fuchs is charged for both the unsuccessful delivery and the subsequent redelivery, thus doubling the freight rate for that order.
Account Managers must correctly monitor stock levels. If a customer runs out of oil, they cannot continue to run their businesses. If this occurs, customers may need to quickly obtain product from a competitor to allow them to continue operating, and then require a discount from Fuchs on their next order. This creates customer dissatisfaction, which may cause them to cease using Fuchs. An Account Manager inadequately or incorrectly reporting stock levels can result in Fuchs losing business.
Incorrect or late orders cause reputational damage. Oil levels are an important part of customer's business, and a key part of the service Fuchs provides is to save the customer from having to worry about running out of oil. If customers are running out of oil, receiving too much, too little, or the incorrect oil, they become dissatisfied.
If the wrong oil is ordered, and is ultimately put in someone's car, this can damage the car, causing damage to our customer, as well as Fuchs.
Orders are made either by customers directly, or by Account Managers, who send them through to the Customer Service team (either by phone or email), advising of the customer’s name, the type and quantity of oil, when it is required, and the ullage in the tank.
There are checks and balances in place to help avoid inaccurate orders. Site Surveys are completed to ensure tanks are labelled accurately, and customer service and account managers have access to this list. Account Managers are able to check the order has been placed, and check that it is accurate before the order is sent out. It is recommended that Account Managers check this list both at the beginning and end of the work day to ensure orders have been entered accurately and in a timely manner. The delivery drivers also have an understanding of various customers' requirements, and they also check at the customer site to ensure the correct oil is being supplied.
The Account Managers also have to ensure the CRM database is up to date in relation to their accounts. CRM entries should include when oil was purchased, by whom, how much, what type, and any other comments in relation to the customer's needs, including where the oil levels are up to, where relevant.
The CRM database needs to be updated regularly. Generally, Account Managers are expected to update it daily, but if an employee is busy, it is acceptable to complete the CRM every few days. At an absolute minimum, Mr Wiseman’s evidence is that CRM must be updated by Friday each week.
This is important because it allows an Account Manager or Mr Wiseman to look at the activity for the week. This allows him to provide effective supervision and oversight of the Account Managers, as he can see what they have been doing each day. It also maintains data for each customer so that anyone can see activity and know the status and preferences of the customer.
The CRM system was introduced in May 2019. Prior to this, Account Managers were required to submit weekly activity reports with this content.[10] CRM was used exclusively from around January 2021.
His evidence was that the applicant was provided training documents on 8 August 2020 and received training from his peers who also used the CRM system, as well as the SAP Systems Engineer.
Mr Wiseman’s evidence was that he had previously held the applicant’s role for 5 years and so was very familiar with what specific customers want and need.
He says the applicant’s sales territory comprised 58% FCD customers. The remaining 42% was a mix of small to medium regional distributors, Civil Contractors, Independent workshops, and some national distributors.
The applicant was responsible for managing approximately 18 FCD accounts. Some of these required him to ensure those customers' oil levels were maintained, order more oil when required, manage customer enquiries or direct them to Mr Wiseman if he was unsure.
His evidence is that from around October 2019 and throughout 2020 he noticed the applicant was making a lot of errors. These errors included:
sending the incorrect oil to customers;
inadequately monitoring customer accounts resulting in FCD customers running out of oil and Fuchs having to expedite orders to ensure that customers could service vehicles;
sending too much oil to customers, meaning oil needed to be returned at Fuchs’ expense and Fuchs may have to issue the customer with a credit note and pay for delivery twice;
failing to be available for urgent customer enquiries, resulting in customers complaining and requesting future discounts;
sending out orders with incorrect pricing, resulting in credits needing to be issued;
failing to process orders on time; and
failing to accurately and consistently enter CRM inputs in the database.
These mistakes resulted in Fuchs incurring expenses to rectify them, and receiving numerous complaints from customers, including customers threatening to take their business elsewhere.
Initially, he formed the view that the applicant’s errors were just part of the learning curve and training on the job, and it was reasonable to give the applicant some time to get used to the role and the customers. He says he discussed these issues with Mr Selwood throughout 2019 and 2020, and often stepped in to help fix the issues on the applicant’s behalf because he understood the specific customers and could identify and fix the issues quickly. Each time this happened, he discussed what had happened with the applicant.
Mr Wiseman’s evidence details four specific documented examples of such errors occurring in July, September and November of 2020. These concern:
a customer of the applicant’s emailing Mr Wiseman to say they had run out of oil;
DTM the third-party who delivered the respondent’s oil contacting the applicant to say 1000 L of oil ordered for a customer would not fit in to the customers tank and consequently the oil was returned to the warehouse;
an incorrect type of oil being ordered to one customer; and
a second instance of the incorrect type of oil being ordered to a customer.[11]
His evidence was on 12 August 2020 he had joined the applicant on the road making customer visits. Later that afternoon he sent the applicant an email.[12]
As Mr Wiseman states in his evidence, whilst that email provides feedback to the applicant on a number of matters, which he may have interpreted as criticism, and also makes some suggestions where and how he can improve, the email considered objectively was positive in its tone, supportive where suggestions for improvement were made and expressly included a number of positive statements such as:
“Good to spend some time on the road today..”
“Good job on being flexible and going into…”
“Great to finish with a quote request….”
Mr Wiseman’s evidence was that the next day, 13 August 2020, he and the applicant again spent some time travelling on the road together. He says he identified the applicant seemed to be struggling with time management and the responsibilities of his role and he asked him to spend some time that afternoon in the office to catch up on some administrative tasks.
At the end of that day, the applicant came into his office and raised a number of issues he had with Mr Wiseman’s management style saying that he could not trust him and that he had no empathy. Mr Wiseman replied that they needed to improve their communication and work together to get the best outcome for Fuchs. He suggested they both go home and pick up the conversation again at a later date.
However later that night at 12:17 AM (14 August 2020), the applicant sent an email to Mr Wiseman[13]with twelve numbered issues, nine being direct criticisms of Mr Wiseman and the balance being complaints about IT or C4C problems.
Mr Wiseman’s evidence was that he forwarded the email he had received from the applicant to Mr Selwood when he received it, and also discussed the applicant’s performance with Mr Selwood.
Mr Selwood’s evidence is that the applicant, on 17 August 2020, rang him in relation to complaints he had about Mr Wiseman and also on that day forwarded to Mr Selwood a copy of the applicant’s email he had sent to Mr Wiseman on 14 August 2020.[14]
On 13 November 2020, Mr Wiseman emailed Mr Selwood detailing concerns he had with the applicant’s performance relating to accuracy and sales excellence and timely reporting in CRM. He asked for guidance regarding managing the applicant’s performance or issuing written warnings.[15]
Mr Wiseman’s evidence was that at the applicant’s request, he met him for coffee on 23 November 2020. He says the applicant complained that Mr Wiseman was stepping in over his head and sending emails to customers fixing issues. Mr Wiseman said he understood his frustration but ultimately, he was the applicant’s manager and if he identified an issue, it was his job to point it out and help to fix it. His evidence was he told the applicant that they needed to move past it because it was affecting customer service and they needed to stop errors happening. Mr Wiseman’s evidence was that at the meeting, the applicant also told him that he had no respect for Mr Wiseman and Mr Wiseman should not be his manager.[16]
The evidence of Mr Wiseman and Mr Selwood is that following this, there were discussions between them and with their Human Resource Manager Ms Gutierrez about the applicant’s performance and Mr Selwood decided that a verbal warning would be given to the applicant.
Mr Wiseman and Mr Selwood met by video with the applicant on 14 December 2020 and discussed his performance and after that meeting, he was issued with a letter confirming the verbal warning, dated 17 December 2020.[17]
The letter explains the company’s dissatisfaction with the applicant concerning the late and insufficient CRM inputs and the lack of accuracy in order placement over the last 12 months.
The letter states it has been decided that the applicant will ensure CRM is updated by Wednesday and Friday each week as a minimum and that for order accuracy he is to conduct a monthly site visit to ensure tank ullage matches order placements and email all orders to Mr Wiseman.
Mr Wiseman’s evidence details subsequent mistakes, once in December 2020 and three times in February 2021, made by the applicant in the quantity of oil he sent to customers and failing to keep the customers updated when oil would be arriving.[18] Consequently, the respondent made a decision to issue the applicant a written warning.
The evidence of Mr Wiseman and Mr Selwood is that consequently, on 26 February 2021, they had another video meeting with the applicant where they explained their ongoing concerns in relation to order accuracy and CRM data input issues. They advised him that his performance had not improved and he would be issued a written warning.
There was an unexplained delay in providing this written warning to the applicant which was not done until 29 March 2021.[19]
The letter states that it is an official warning regarding his performance. It states that if the concerns raised in the letter are not addressed, the respondent will have no alternative but to issue a second warning regarding this matter, and continued failure to improve his performance may lead to termination of employment.
On 7 April 2021, Mr Selwood emailed the applicant and noted that Mr Wiseman had recently expressed his opinion that the applicant had improved in ordering. The letter notes that the applicant is in number one position, Mr Selwood having completed the new business update for the first quarter of 2021. The letter states that Mr Wiseman also told Mr Selwood there had been an improvement in the applicant’s attitude and commitment.
The evidence of Mr Wiseman is that notwithstanding this positive encouragement, the applicant continued to make mistakes and his evidence details these errors supported by customer complaint emails. The errors involve not monitoring customers oil supplies, ordering too much oil and causing it to be returned to the warehouse. These issues arose on or around 20 April 2021, 22 April 2021, 23 April 2021 and two issues on 27 April 2021.[20]
The evidence is these further failures in performance by the applicant were discussed again between Mr Selwood, Mr Wiseman and Ms Gutierrez, and they then decided to issue the applicant a final warning and place him on a Performance Improvement Plan (PIP).[21]
Mr Selwood’s evidence is that on 6 May 2020, another video meeting was held with the applicant and Mr Wiseman, and on this occasion with Ms Gutierrez also present. They discussed with the applicant the ongoing concerns they had about his order accuracy, FCD’s and a recent decline in activity reporting in CRM. Mr Wiseman provided copies of examples of these concerns. These examples concerned an urgent request for oil from Melville Subaru on 20 April 2021 and City Subaru Maddington running out of oil on 22 April 2021.
The evidence of Mr Wiseman, Mr Selwood and Ms Gutierrez is that at the meeting, the applicant was told he would be receiving a final warning letter. Ms Gutierrez then explained to him that she would send him a short-term development plan and separately a template for a PIP which the applicant would complete together with Mr Wiseman. He was told that Mr Wiseman would be joining him on some further customer visits in order to help him and provide coaching and development.[22]
A letter dated 10 May 2021 was provided to the applicant entitled Final Warning Notice. The letter traces the history of counselling and warnings beginning on 14 December 2020. The letter states that his performance has not improved and continues to be unsatisfactory. The letter states that if significant improvement in performance is not achieved by 11 August 2021, his employment is likely to be terminated.
The letter then reiterates the respondent’s expectations that:
“.. your CRM activity improves to the required level by way of having your visit report updated by close of business every Friday. And order accuracy improves to the level that you have no errors in order placement resulting in the return of goods or customers running out of oil.”
The letter concludes by stating that they will work together on a development plan to assist him in the short term and will continue to monitor the situation, and that the future is in the applicant’s hands.
Mr Wiseman in his evidence details further ordering errors on 13 May,18 May and 1 June 2021 causing two separate customers to run out of oil, and in the third case, oil to be returned which could not be delivered due to insufficient ullage.[23]
Subsequently, on 8 June 2021, there was a meeting between Mr Wiseman and the applicant to work on short-term improvement plans.
The two short term improvement documents are each headed “What do I need to Stop, Start and Continue? So I can be the best I can be!” One of these lists what needs to stop as “Relying on customer service to pick up on order errors”, and “Relying on information provided by dealers that have had issues in the past”. The other lists what needs to stop as “prioritising other things over CRM input”.[24] These are both signed apparently by the applicant and Mr Wiseman and dated 8 June 2021.
Around 23 June 2021, Ms Gutierrez says she attended a Microsoft Teams meeting with the applicant. He told her he was happy with the PIP, that he felt he was now getting the support he needed from Mr Wiseman, and that it was a step in the right direction. He said that he and Mr Wiseman had spent time together working on the PIP. He said he thought that it was achievable and he agreed to sign it. She asked the applicant how he felt, and he said words to the effect of “I feel really good about it” and "I think I was overwhelmed trying to figure it out on my own. It was good that we completed it together”.
On 23 June 2021 Mr Wiseman sent the applicant a calendar invitation to meet and discuss finalisation of the PIP for the following day. The applicant replied asking if the meeting could be postponed until July because he was busy. Ultimately, the meeting did go ahead on 24 June 2021 and they finalised the PIP.[25]
The PIP is two pages in length and is straightforward and self-explanatory. There are two objectives. The first improvement objective is CRM Input, the specified outcome desired for this being to ensure all visits are entered into CRM by Friday each week. The second improvement objective is Pump in Order Accuracy & FCD Returns or Run Out Of Products, the specified outcome desired for this being no product returns from FCD bulk pump in orders and no FCD’s run out of oil.
The PIP specifies steps to achieve the objectives, that the outcomes are to be achieved by 30 July 2021 and what support to accomplish the objectives are to be provided to the applicant. The PIP is signed and dated apparently by the applicant and Mr Wiseman on 24 June 2021.
The evidence of Mr Wiseman is that the applicant continued to make mistakes and failed to improve his performance as required by the PIP. Examples of this were that on 29 June 2021, a customer called to place an urgent order because their oil level was critically low. The applicant had been at this site on 22 June 2021 and Mr Wiseman should have contacted the customer prior to the customer’s levels being so low.
On 1 July 2020, Mr Wiseman emailed the applicant about his CRM inputs which had not been entered between 6 April 2021 and 18 May 2021.
Also on 1 July 2021, the applicant placed an order and a week later, on 9 July 2021, followed up with the customer service team asking whether the order had been placed because it had not been delivered to the dealership and the dealership had run out.
On 20 August 2021, Mr Wiseman received an email from a customer saying they only had 25 L of oil remaining and would run out shortly. He placed an urgent order for this customer, but the applicant should have been aware of this and placed an order well before they nearly ran out of oil. Mr Wiseman was particularly concerned because there had previously been errors affecting the same customer in the past.[26]
Mr Wiseman was cross-examined about these events. He did not recall whether he had met with the applicant about these problems. His evidence was that he had been doing joint visits with the applicant over that period to try and improve his performance. He said he worked with the applicant closely on a daily basis but could not recall whether he had a meeting about these events or not.
In re-examination, Mr Wiseman’s evidence was he did recall speaking to the applicant about each of those issues and he would have advised the applicant that it happened and it needed to stop.[27]
Next, there was a meeting between Mr Wiseman, Mr Selwood and Ms Gutierrez where Mr Wiseman explained he was having to check all of the applicant’s accounts and that they were losing customers. Mr Wiseman explained he was having to check the applicant’s accounts every second day, but he was now nervous about sending emails to the applicant because they may offend him. Ms Gutierrez suggested that Mr Selwood could go on visits with the applicant when he planned to visit Western Australia. This, however, did not eventuate because of Covid-19 border closures.
The evidence of the respondent’s witnesses is that in August 2021, they met and Mr Wiseman and Mr Selwood explained to Ms Gutierrez that the applicant’s performance had still not improved in accordance with the PIP. He asked Ms Gutierrez if there was anything else they could do and she said that if the applicant was still not improving as required, the next step would be to terminate his employment. This was her recommendation.[28]
On 24 August 2021, there was a video meeting with Mr Selwood, Mr Wiseman, Ms Gutierrez, Ms Chivers, the respondent’s General Manager People, and Mr Mark Blacker, the respondent’s General Manager Automotive. The applicant’s performance and continued errors were discussed and Ms Gutierrez advised the group that the decision had been made to terminate the applicant’s employment and Ms Chivers and Mr Blacker approved this decision.[29]
Next, on 27 August 2021, the applicant attended a video meeting, accompanied by his support person, with Mr Selwood, Mr Wiseman and Ms Gutierrez. At the meeting, the applicant was told his performance had not improved in accordance with the PIP. Mr Wiseman showed him examples of customer complaints, instances where customers had run out of oil on 13 May, 1 June, 1 July and 20 August 2021, and told him that his CRM input had not improved. The applicant was then given an opportunity to respond. Ms Gutierrez asked him a number of times if he wanted to respond and provide any explanation, however, the applicant shook his head and said ‘no’.
Ms Gutierrez then told him that, consequently, the respondent intended to terminate his employment.[30]
Later that day the letter of termination was posted to the applicant.
Returning to some of the conflicts in the evidence. Firstly, regarding the 6-week period between 5 April 2021 and 18 May 2021 during which the applicant had not input anything into CRM, it was put to Mr Wiseman in cross examination that the applicant had been on sick leave during this period for two weeks, having been admitted to hospital on 13 April 2021. Mr Wiseman was not certain of the timeframe the applicant was away for but agreed that if he was on sick leave, there would be no CRM entries.
A record of the applicant’s leave for his period of employment was provided in Ms Gutierrez’s evidence.[31] This leave record shows that during this particular 6-week period of no CRM input, the applicant was absent only between 13 April 2021 and Tuesday 20 April 2021 inclusive, being six working days. Consequently, there is no explanation for the applicant not inputting to CRM for the balance of the six-week period.
Regarding the customer email on 20 August 2021, Mr Wiseman’s evidence under cross examination was that he brought this error, that the customer had run out of oil again, to the applicant’s attention on that day.[32]
The applicant during his evidence, on a number of occasions, referred to having been absent from work sick for roughly two weeks. The applicant specifically referred to this sick leave absence as an explanation concerning a customer advising they had run out of oil on Friday, 23 April 2021.[33]
The leave record, however, shows he was absent only between Tuesday, 13 April 2021 and Tuesday, 20 April 2021, inclusive, and that he was at work on the Wednesday and Thursday immediately before the customer complained they had run out of oil on the Friday.
It was also put to Mr Wiseman in cross examination that the applicant had been admitted to hospital on 13 April 2021 for a couple of weeks.[34] The leave record, however, shows the applicant actually was absent for only six working days, as above.
The applicant also refers to having been on sick leave between 8 June 2021 and 1 July 2021, but not for the entire period.[35]
Contradicting the applicant’s evidence, the leave record shows that he was not absent in June at all and the only days he took leave in July was on the 5th and the 29th.
Under cross-examination, the applicant repeated his view, first expressed in his evidence in chief, that the respondent’s complaints about his performance, in terms of errors in ordering and lack of inputting to CRM, were contrived, that Mr Wiseman and Mr Selwood were making these issues up in order to target him.[36]
Contrary to the applicant’s view the evidence of Mr Wiseman, which is supported by numerous emails from customers and which I accept, is that there were in fact numerous complaints over a lengthy period from customers which when examined demonstrated errors had been made by the applicant or he had failed to act as he should have to order product for the customers before their oil supplies became critically low. Also, there is no doubt that the applicant consistently failed to comply with the respondent’s requirements to each week input information into CRM. Indeed, the applicant seemed contemptuous of this requirement notwithstanding he was aware he had been directed to do so and this requirement was highlighted in his final warning.[37]
The evidence does not support a conclusion that the complaints made against him by the respondent were contrived.
Separately, the applicant in his evidence stated that he was targeted for dismissal because of the various complaints he had made to human resources, including the allegation that the respondent’s rebate accounts were misused and improperly reducing his income. The applicant’s evidence in chief was that he first raised these complaints on 18 June 2020.[38]
The unchallenged evidence of Ms Gutierrez is that Ms Chivers told her that in 2020 that the applicant had spoken to her about his concern that rebates were being paid out of his territory expenses and she investigated this matter, speaking to Mr Blacker who reviewed the rebates the applicant had raised concerns about and found there was nothing unusual or untoward about them. Ms Chivers then relayed this to the applicant.
Ms Gutierrez says the applicant spoke to her often about the rebate issue and told her he was upset because he felt it affected his income. She told him it affected all of the sales team in the same way. She told him he was not receiving any different treatment to any other account manager. In April 2021, he told her that the customer service team thought there was something fishy about the rebates, however, she spoke to the customer service manager on 3 May 2021 and she told her she had not heard any concern about rebates.
The applicant raised the issue again with her on 12 May 2021 and she told him she would speak with Mr Ballingall, the Head of Finance and Company Secretary. She did so and he emailed her advising that the rebate looked quite common. His email has been provided to the Commission.[39]
Then, Mr Haysom from the finance team spoke to her and said the applicant had raised the issue with him and he had explained to the applicant how the rebate process worked.
Her evidence was that both Mr Ballingall and Mr Haysom told her the rebates are externally audited. Consequently, she then spoke to the applicant and told him the finance team had investigated and found that there was nothing untoward happening and that the rebates were operating in the way they were intended to operate.[40]
Mr Selwood denies the rebate complaint played any role in the decision to dismiss the applicant.[41]
Whilst the applicant maintains his suspicions about the operation of rebates within the business, there is nothing beyond that before the Commission to support a conclusion that the rebates are operating in any improper manner. There is also no evidence before the Commission that the fact the applicant pressed his concerns about rebates and had pursued other complaints in June 2020 within the business contributed in any way to the respondent deciding to dismiss him.
The applicant’s belief about this being a reason for his dismissal simply ignores the weight of evidence that there had been multiple customer complaints caused by his failure to undertake his ordering duties properly and ignores the fact that he, for a lengthy period, was not complying with the respondent’s requirement to input information into CRM on at least a weekly basis.
There clearly was evidence of poor performance. This was not contrived.
Under cross-examination, the applicant had an alternative explanation for his errors in ordering. He said that in those instances which without doubt were his own fault, such as where he had written down the wrong product number which occurred more than once, he made the errors because of the pressure, lack of training and lack of assistance. His evidence was they had put pressure on him and he was under a lot of stress. This he said led him to make those errors.[42]
Another explanation the applicant had for his ordering errors causing customers to run out of oil was that he had been complying with Mr Wiseman’s direction to only use 1000 L oil containers, because they were more profitable for the respondent, rather than 205 L containers.[43]
Mr Wiseman in his oral evidence denied that the applicant was ever instructed to only use 1000 L containers but rather he was told to do so where possible. His evidence was that if he needed to use 205 L containers, he was able to.[44]
The applicant also on occasions in his evidence argued that the territory he was required to cover made it practically impossible for him to visit the FCD customers to check their oil levels and so he was obliged to rely on the dealerships assessments.
Mr Wiseman’s evidence was that he has performed the same role as the applicant in the past and it was quite achievable to get around to the dealerships that he did need to monitor. Mr Wiseman’s evidence was that this had been done successfully for numerous years prior to the applicant being employed without any dealership running out of oil. His evidence also was that after the applicant left, the customers were being properly serviced personally by himself and no FCD customer had run out of oil.[45]
The legislation
Section 387 of the Act sets out matters the Commission must take into account when considering whether it is satisfied that the dismissal was harsh, unjust or unreasonable. This is set out below.
“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.”
Consideration
The evidence is that initially in 2020, the respondent came to the view that the applicant was not performing satisfactorily.
Consequently, beginning in December 2020, there were an escalating series of disciplinary meetings with the applicant where the respondent’s dissatisfaction with his lack of accuracy in ordering lubricants for customers, which was resulting in customer complaints, and his insufficient or delayed inputs into CRM were discussed.
In all of these disciplinary meetings, it was repeatedly made clear to the applicant that his performance was unsatisfactory and a failure to improve would result in further disciplinary action.
In May 2021, he was issued with a final warning letter that stated he would likely be terminated if his performance had not improved.
The respondent then with the applicant put in place a PIP.
The applicant complains that there was not a formal meeting to review the PIP. The PIP however does not specify that there will be a review meeting but does have a date of 30 July 2021 by which the desired improvements are to be achieved. The respondent’s view is that the applicant did not achieve the specified improvements by this date or at all.
In any event, whatever the applicant might have liked to say at such a review meeting, perhaps to explain his lack of improvement or to provide some mitigating information, he was equally able to say at the termination meeting if he had wished, but he did not.
I accept the evidence that there was, however, no improvement by the applicant.
Consequently, the respondent decided to terminate the applicant’s employment because of his ongoing unsatisfactory performance.
It is for the respondent to decide what level of performance it expects of its employees. In this case, there is no evidence that the standard of performance the respondent required of the applicant was unreasonable. Indeed, the evidence is that others had performed the role to the respondent’s expected standard before the applicant was employed and after he was dismissed.
The evidence does not support the applicant’s submission that he was being bullied and harassed by the respondent’s management or that the complaints against him were contrived. Nor does the evidence support the applicant’s submission that the real reason he was dismissed was because of the complaints he made to HR in June 2020.
What the evidence does show is that when communicating with the applicant in emails, Mr Wiseman and Mr Selwood over a long period of time, even when they were dealing with customer complaints caused by the applicant’s mistakes, consistently did so in a positive, encouraging and supportive manner.
There is also clear evidence of errors the applicant made in ordering and there is evidence of customer complaints about matters he was responsible for. The Commission accepts that a number of those were properly explained by the applicant having been absent from work, but these were a minority of those instances. Separately, there is no doubt the applicant did not comply with the respondent’s direction to, at a minimum, input information into CRM each week.
These facts demonstrate the applicant was not performing satisfactorily.
Turning to the criteria in section 387.
Valid reason
The applicant, by often not accurately placing orders for customers to ensure they did not run out of oil or dispatching oil in incorrect quantities that had to be returned and not inputting into CRM at all in some periods and in other periods not inputting into CRM by close of business each Friday, was performing unsatisfactorily.
The applicant’s unsatisfactory performance was a valid reason for his dismissal to do with his capacity.
Notification of the reason for dismissal
The applicant was notified at the termination meeting on 27 August 2021 of the reason the employer was considering dismissing him.
Opportunity to respond
The applicant was given an opportunity to respond to the reason the employer was considering dismissing him at the termination meeting but declined to do so.
Support person
There was no refusal to allow the applicant to have a support person. At the termination meeting, the applicant was accompanied by a support person.
Warnings
The applicant was dismissed for unsatisfactory performance.
The applicant had received a series of escalating warnings that his performance was unsatisfactorily, over a lengthy period. Those warnings were in writing and the final warning expressly advised that failure to improve his performance was likely to result in his employment being terminated.
Size of the enterprise and absence of human resource management specialists
The respondent is a medium-sized business and it does have human resource management specialists in house. Consequently, the procedures followed in effecting the dismissal were appropriate.
Other relevant matters
At the time of his dismissal the applicant had been employed for a little over two years.
Conclusion
The applicant for an extended period had been either unable to or unwilling to meet the reasonable standard of performance required by the respondent. The applicant had been warned that a failure to improve his performance was likely to lead to his termination and he was given support and assistance and time to improve but unfortunately did not.
The dismissal of the applicant was not harsh, unjust nor was it unreasonable.
The applicant was not unfairly dismissed.
Consequently, this application will be dismissed and an order to that effect will now be issued.
[1] Court Book page 45.
[2] Court Book page 231.
[3] Court Book page 34 para 14.
[4] Court Book page 282 para 14 – 18.
[5] Court Book page 282 para 16.
[6] Court Book page 34 para 16.
[7] Court Book page 283 para 21.
[8] Court Book page 283 para 21(a).
[9] Court Book page 285 para 29.
[10] Court Book page 167.
[11] Court Book pages 145 and 146.
[12] Court Book page 186.
[13] Court Book page 187.
[14] Court Book page 241 para 12.
[15] Court Book page 188.
[16] Court Book page 147.
[17] Court Book page 255.
[18] Court Book pages 148 and 149 para 45.
[19] Court Book page 256
[20] Court Book pages 149 – 151.
[21] Court Book page 263.
[22] Court Book pages 151, 246, 263.
[23] Court Book pages 152 para 55.
[24] Court Book page 223 and 225.
[25] Court Book page 221 and 222.
[26] Court Book pages 154 para 61.
[27] Transcript PN 611 – 614.
[28] Court Book page 265 para 29.
[29] Court Book page 246 para 36, page 266 para 30.
[30] Court Book page 155 para 65, page 247 para 37, page 266 para 31.
[31] Exhibit R1; Transcript PN 797.
[32] Transcript PN 491 – 496, 502, 504.
[33] Transcript PN 209.
[34] Transcript PN 482 – 485.
[35] Transcript PN 257.
[36] Transcript PN 83 – 86.
[37] Transcript PN 238 – 240.
[38] Court Book page 31 para 10.
[39] Court Book page 273.
[40] Court Book pages 267 – 269.
[41] Court Book page 250 para 56 – 57.
[42] Transcript PN 150.
[43] Court Book page 283 Para 21; Transcript PN 311 – 312.
[44] Transcript PN 339 – 340
[45] Transcript PN 342, 344 – 345.
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