Makai v Victorian Radio Network Pty Ltd
[2016] FWC 684
•5 February 2016
[2016] FWC 684
DECISION
| Fair Work Act 2009 | |
| s.394 - Application for unfair dismissal remedy | |
| Mr Jonathon Makai | |
| v | |
| Victorian Radio Network Pty Ltd | |
| (U2015/13157) | |
| COMMISSIONER ROE | MELBOURNE, 5 FEBRUARY 2016 |
| Termination of employment – alleged unfair dismissal. |
[1] Mr Makai was employed full time as an account manager by Victorian Radio Network
from 24 November 2014 until his dismissal on 7 September 2015.
[2] I am satisfied that and it is not contested that Mr Makai is protected from unfair
dismissal and that:
The employer is a national system employer.
The termination of employment was at the initiative of the employer.
The employer is not a small business and employs about 100 persons.
Mr Makai had more than six month’s continuous employment at the time of the
termination.
The termination was not for reasons of genuine redundancy.
[3] Mr Makai says he was suffering from an illness which was diagnosed in March 2015
and which affected his capacity to deliver on work performance targets. Mr Makai says that
his employer failed to make reasonable adjustments for his disability.
Reason for dismissal
[4] The evidence of the Victorian Radio Network witnesses is that the meeting which led
to the dismissal arose from an email sent by Mr Makai to a client which Victorian Radio
Network considered inappropriate. A termination letter was prepared and signed prior to the
meeting. Mr Makai was invited to the meeting one hour before hand but was not told that the
meeting related to his conduct or performance or that his employment was at risk. Victorian
Radio Network had decided that if Mr Makai’s responses to the issues raised about the email
were unsatisfactory he would be given the dismissal letter.
[5] However, the termination letter of 7 September 2015 says that Mr Makai was
dismissed “due to unsatisfactory work performance.” The letter says that: “our specific
concerns relating to your performance have been brought to your attention a number of times
[2016] FWC 684
but has not been remedied by you.” There is no mention of the misconduct allegation
involving the email.
1
| [6] | The employer response to the unfair dismissal application | states that “the primary |
reason for termination of Mr Makai’s employment is that he did not achieve monthly budget
target.” The emails referred to in the employer response also contain concern that the number
of appointments arranged each week to seek new business was less than targeted. The
employer response also refers to a client complaint and request to change account manager
and that “on meeting with the client to discuss this we became aware of important information
that had not been disclosed to us by Mr Makai and which was relevant to the client
relationship”.
[7] Victorian Radio Network in the submissions and evidence before me changed the
primary reasons for dismissal from those presented in the termination letter and in the F3
employer response. Victoria Radio Network in their submission allege serious misconduct
was the reason that the termination decision was made on 7 September 2015. Victorian Radio
Network submit that: “Mr Makai was dismissed for misconduct in his dealings with a client
and not being truthful when asked questions about his dealings with this client… In the
meeting of 7 September 2015, Barrie Quick (CEO) asked Mr Makai about the issues raised in
the email to his client. After hearing Mr Makai’s responses the CEO advised him that his
employment was being terminated for misconduct and our ongoing concerns about his
underperformance.”
[8] I consider the failure to refer to the email issue and the alleged untruthfulness in the
termination letter and in the F3 employer response to be significant. I also found the evidence
of the employer witnesses about the termination meeting and the alleged untruthfulness to be
unconvincing.
[9] The performance issues raised in the proceedings can be summarised as follows:
a. Failure to meet monthly targets. b. Failure to arrange sufficient appointments to seek new business. c. Poor handling of one client. That poor handling included offering 4 grand final tickets as part of attracting the new business rather than 2 tickets which was
approved and some errors in booking advertising time about which the client was
unhappy.
d. Some complaints about inadequate responsiveness to management. [10] The conduct issues raised in the proceedings can be summarised as follows:
a. The email to the same client involved in the grand final ticket issue of 31 August 2015 which Victorian Radio Network considered inappropriate.
b. The alleged initial denial of the matters contained in the email when these issues were raised at the termination meeting on 7 September 2015.
[2016] FWC 684
Did Mr Makai fail to meet monthly sales targets and could this be a valid reason for
termination?
[11] Mr Makai’s employment contract includes the following:
“For commission purposes there will be no monthly revenue threshold for the first six
months of this agreement.”
[12] Mr Makai’s employment contract states in respect to Commission Structure:
“In the event that 100% of your budget is not achieved for a period of three consecutive
months, Company Management reserves the right to renegotiate the terms of your
employment.”
[13] The position description attached to the employment contract states:
“You are expected to achieve these monthly sales budgets at all times. Frequent non-
achievement of your monthly sales budgets may result in a review of your position
with the Company.”
[14] There is no dispute that budget targets are only relevant in the seventh month of
employment and following. Six months after commencement is 24 May 2015. The relevant
months are therefore June, July and August 2015.
[15] Mr Makai accepts that he failed to meet budget in June, July and August 2015 but
argues that the budget targets were unrealistic. He says that his revenue budget was around
$72,000 after six months. He says that when he was employed he was told that he could
expect a revenue budget of around $30,000 after six months employment. I accept Mr
Makai’s evidence. However, there is nothing to prevent the employer from changing the
revenue budget.
[16] September 2015 is not relevant as Mr Makai was dismissed on and from 7 September
2015. Notwithstanding the termination Mr Makai did achieve a significant proportion of his
budget in September 2015. Mr Makai says that the evidence suggests he would have met his
September 2015 target, the employer disputes this. All that can be said with certainty is that
the sales performance in the first part of September was not particularly poor and that
therefore there is no basis to conclude that Mr Makai would not have met his September
target.
2
| [17] | The budget versus sales performance | is illustrated by the following: |
| MONTH | SEN REVENUE BUDGET | SEN SALES |
| June 15 | $65,000 | $56,345.86 |
| July 15 | $57,750 | $29,497.86 |
| August 15 | $61,750 | $41,777.86 |
| [2016] FWC 684 |
[18] Mr Makai submitted that his sales improved from July to September. If the September
figures are excluded this is obviously not the case. No clear conclusions can be drawn from
the September figures. Mr Hung was unable to deny Mr Makai’s assertion that his sales
income was improving.
[19] Mr Makai gave evidence that his sales budget targets were higher than other
employees who had similar amounts of service with the company. The evidence about this
was not very specific and I accept the submission of the employer that it set its sales budgets
with regard to factors including the prior sales experience of new employees. Mr Makai
agreed with the sales budget targets at the time they were set. I accept that he was under some
pressure to do so but there is no basis to conclude that the pressure was unreasonable. There is
insufficient basis to draw a conclusion that Mr Makai’s sales budget targets were
discriminatory or unreasonable.
[20] Mr Makai argues that his sales budget targets should have been reduced or failure to
meet targets accommodated because of his disability which was advised to the employer in
March 2015. Mr Moore, Mr Makai’s direct manager, gave evidence that he provided support
to Mr Makai once he had been advised of his disability.
[21] I am satisfied that meeting sales targets is an inherent requirement of the sales job Mr
Makai was engaged to perform. A reasonable accommodation may have been alteration to
working hours or the allocation of alternative duties. If there was such an accommodation
sales targets would need to have been adjusted. Mr Makai did not request that he be allocated
alternative duties or reduced working hours to accommodate his illness and there was no
evidence about whether this was either necessary or possible. I am not satisfied that reducing
sales targets which are an inherent requirement of the sales job is a reasonable
accommodation.
[22] Mr Makai says that there were several incidents which affected his health and his sales
performance:
In July 2015 the commission rate for a long term contract was reduced from 7.5%
to 5% without consultation. He raised his concerns about this matter but they were
dismissed.
In August 2015 Mr Quick had a discussion with him about sales progress and Mr
Makai alleges that Mr Quick did not allow him to respond and acted in an
aggressive and intimidating manner. Mr Makai complained to Mr Sweeney who
suggested that he contact a psychologist to help determine if it was bullying. The
report of the psychologist was provided after the termination of employment.
On 21 August 2015 Mr Moore criticised Mr Makai’s lack of positive body
language. Mr Makai explained it was due to his illness and he felt that Mr Moore’s
comment undermined him.
[23] These facts are not directly contested. Mr Quick did not give evidence. I am satisfied
that these issues may have affected Mr Makai’s sales performance. There is no basis for a
conclusion that Mr Moore deliberately undermined Mr Makai. The issue of Mr Makai’s
disability may be relevant is assessing the harshness of any termination.
[2016] FWC 684
[24] Mr Moore accepted that other members of Mr Makai’s sales team failed to make
budget. Mr Makai asserted that the team only made budget in one month. This was not
strongly contested.
[25] Mr Hung accepted that a new employee in a sales role with the company could expect
to earn between $70,000 and $100,000 in a year. It was accepted that Mr Makai’s income was
within that range and that income was strongly dependent upon sales performance. This
suggests that Mr Makai’s first year performance was not significantly abnormal. Mr Hung
gave evidence that sales performance was not the central concern about Mr Makai.
[26] Mr Deltondo was employed as an account manager from June 2014 to October 2015.
He gave evidence that Mr Makai was amongst the top four writers or new business and that he
had been given similar expectations about annual earnings and likely sales budgets.
[27] There were regular meetings between Mr Makai and his managers Mr Moore and Mr
Hung at which sales progress was reviewed and discussed. There is no doubt that sales
performance and measures to improve sales performance were discussed.
[28] However, taking into account the factors discussed above, I am not satisfied that Mr
Makai’s sales performance in the three months from June to August 2015 was so poor as to
warrant dismissal for failure to meet budget. The performance justified warning and training
and if the poor performance was sustained notwithstanding proper warnings and training it
could have then formed a valid reason for dismissal.
Was Mr Makai warned about poor performance? (Section 387(e))
[29] The Victorian Radio Network submit that there were a number of warnings about
performance. In their submission Victorian Radio Network say that the emails of 28 July, 11
August and 17 August to which I refer below are warnings in respect to performance. They
also raise a further email of 28 July from Mr Hung but that email was not in the evidence
provided and it is disregarded.
[30] On 11 May 2015 Mr Moore wrote that “we need to get the number of new discovery
appointments back to an acceptable level across the team… you should be aiming to get a
minimum of 6 new discovery meetings for the coming week and 3 for the week following.”
This correspondence relates to the team not just Mr Makai and it only refers to targets for two
weeks.
[31] On 28 July 2015 Mr Hung wrote to Mr Makai following a meeting of the day before:
Expressing disappointment that Mr Makai had not completed a task. Mr Hung
acknowledged that “you had more or less written it up but ultimately not printed it
because you were late to the meeting”.
Advising that this along with other matters “start to reveal a disturbing trend” and
the respect and turnaround time he puts to CEO requests ultimately reflects on Mr
Makai.
Continuing to express concerns about management decisions and failing to move
on. In cross examination it was confirmed that this was a reference to Mr Makai
escalating his concern about the reduction in commission as a punishment for
including 4 Grand Final tickets in a contract instead of the approved 2 tickets.
[2016] FWC 684
Noting the decision to include 4 Grand final tickets in a package without manager
approval. It was confirmed in cross examination that this matter was resolved by
the reduction in commission.
Advising that it is a “weekly struggle to get our calls, general appointments and
discovery appointment to acceptable minimum levels”.
[32] Mr Hung said as a result of these issues: “I really question your ultimate commitment
and willingness to fulfil the role… in three/four weeks I will schedule a review with you and
Gordon to get both your feedback on how your attitude and performance are tracking”.
[33] This should be seen as a generalised warning that the employer did not regard Mr
Makai’s performance as satisfactory and that improvement is required but it does not clearly
say that it is a warning, it does not say that employment is at risk or may be at risk, and it does
not specify what specific performance changes are to be achieved.
[34] Mr Makai responded to this correspondence by stating that: “Thanks for the review
and I totally accept that there are things I need to change. I look forward to showing you over
the next 3-4 weeks how much SEN means to me”. This response confirms that Mr Makai
understood that the 28 July 2015 email was a general warning that his performance needed to
improve.
[35] On 11 August 2015 Mr Hung wrote to Mr Makai that:
“2 appointments be they “discoveries” or not in a week in simply not good
enough.”
“we should be aiming for 8-10 meetings with at least six of those being
discoveries”.
“please confirm with me what that action plan is once you have put it in place and
this will also form part of our review that I suggested we would do at the end of
this month”.
[36] Mr Makai responded that he was up to six meetings for this week and two for next
week and that he “will continue to work closely with Gordon and Greg to continue the
momentum.” Mr Makai gave evidence that he considered the 11 August 2015 email was pay
back for his complaints about the commission issue.
[37] On 17 August 2015 Mr Moore wrote to Mr Makai that:
th
“In the light of your meeting with Barries and myself on Friday afternoon (14 August) it is clear that we have some work to do to get your performance up to an acceptable
level going forward.
The reality of not having achieved budget since March 2015, and our ongoing
concerns with your appointment levels means that we all agreed in the meeting to put
in some minimum expectations as follows:
1. You are expected and have agreed to sell at least $10,000 in sales into
August….
2. You are expected to set a minimum of 6 new discovery meetings each and
every week….
[2016] FWC 684
3. You have also made a commitment (and it is our minimum expectation)
that you will achieve your September budget
Jonno, in return you have my commitment to provide you the support and direction
you need for success. You and I will get together later today to set strategies you will
be using to get there. From there we will catch up regularly to make sure you are on
track”
[38] Mr Makai confirmed this except he pointed out that he did not have a budget until the
six month probation period was completed. Mr Moore accepted that qualification and that
employees were not given sales budgets during the first six months of their employment.
[39] I am satisfied that the email of 17 August 2015 in the context of the earlier emails,
outlined some clear performance expectations and a plan. I am satisfied that the email of 17
August 2015 constitutes a warning that disciplinary consequences may follow if performance
does not improve following implementation of the agreed plan. Disciplinary action in respect
to poor performance would not have been reasonable until there was some opportunity for this
to be implemented. The time period from 17 August 2015 until 7 September 2015 was clearly
inadequate for this purpose particularly given one of the key expectations in the plan was the
achievement of September budget figures.
[40] On 20 August Mr Moore asked what are the contingencies on the go. Mr Makai
responded with some detail and Mr Moore responded– “well why didn’t you list them? That’s
what we wanted! What have you presented!” I am not satisfied that any conclusions can be
drawn from this correspondence.
[41] Mr Hung, Sales Director, gave evidence that Mr Makai demonstrated good sales
performance on the contacts that he made but there were concerns about the number of
contact appointments made. He conceded that other employees had problems with achieving
target number of appointments.
[42] Mr Hung gave evidence that Mr Makai had a “poor and negative attitude” from June
2015. Questioning of Mr Hung confirmed that essentially this “poor and negative attitude”
related to Mr Makai’s failure to accept the decision Mr Hung made on 29 July 2015 to reduce
Mr Makai’s commission as punishment for issuing four grand final tickets instead of two in
securing a deal with a client. Mr Makai escalated this issue through various levels of
management and finally to the CEO. Mr Moore, Mr Makai’s direct supervisor, raised the
same issue. He considered that Mr Makai became obsessed with the issue of the reduced
commission.
[43] Mr Sweeney confirmed that Victorian Radio Network reduced Mr Makai’s
commission to teach him a lesson about the extra grand final tickets and to defray some of the
cost of the extra tickets.
[44] Mr Makai raised a bullying complaint and the decision to reduce his commission was
one aspect of this. The period of time when Mr Makai was dissatisfied about the commission
decision extended from 29 July 2015 until the dismissal on 7 September 2015. I do not
consider that there was anything unreasonable in Mr Makai escalating his concerns about the
reduction in commission. His employment contract provides that he would be consulted and
have the opportunity to make submission about any change to commission arrangements. I am
[2016] FWC 684
satisfied that there was no consultation or opportunity to make a submission before the
decision was made by Mr Hung or the CEO.
[45] I do not consider it unusual or unreasonable that Mr Makai would continue to harbour
concerns about this matter for five or six weeks.
[46] Mr Moore gave evidence that Mr Makai was reluctant to properly participate in
training arranged for all the sales account employees in August to improve potential customer
identification process.
[47] Considering all of the evidence I am satisfied that the employer had legitimate
concerns about appointment numbers and failure to meet budget. I am satisfied that Mr Makai
was warned about the need to improve his performance in respect to these matters. However,
there was insufficient time following the warning to reach any conclusion as to whether or not
Mr Makai’s performance responded positively to the warning and associated
training/coaching.
[48] I am not satisfied that there was a proper basis to discipline Mr Makai over his alleged
“poor negative attitude” arising from the decision to reduce his commission. I am satisfied
that there were some mistakes made by Mr Makai with appointments for a particular client
and that he also made an error of judgement in offering 4 grand final tickets instead of 2 to
secure the business with that client. However, there is insufficient evidence to suggest that
these errors were part of a wider pattern of poor performance and the issue of the grand final
tickets was dealt with by the decision to reduce commission. There was no proper basis for
further discipline over these matters.
Did the email of 31 August constitute misconduct and was Mr Makai untruthful in his
response to this issue?
[49] Victorian Radio Network say that at the meeting on 7 September 2015 Mr Makai was
given an opportunity to respond to concerns raised by a client and an email Mr Makai had
sent the client on 31 August 2015. They say that prior to the meeting they had decided that if
Mr Makai did not answer the questions about this matter truthfully his employment should be
terminated. A termination letter was prepared in advance of the meeting for this eventuality.
They say that they felt that his answers were less than truthful and they terminated his
employment immediately.
[50] On 2 September 2015 the company say it was contacted by a client who was Mr
Makai’s responsibility and the company met with that client on 3 September 2015. The client
requested a different account manager.
[51] The email of 31 August 2015 included the following:
Mr Makai advised that he had booked 2 more home page takeovers than the client
was paying for and asked them to not disclose this to others. He wrote that this was
“part of me looking after” the client and “if we could keep this to ourselves, it will
keep me out of trouble”.
Mr Makai also advised that he had received a rocketing for giving them 4 grand
final tickets instead of 2 and that he was paying for 2 of them out of his own
pocket.
[2016] FWC 684
[52] The company alleges that this was misleading and a misrepresentation of confidential
internal communications relating to commission structure and was disparaging to the
company. Effectively Mr Makai was asking the client to cover up for his mistakes in booking
the extra homepage takeovers and for double booking dates.
[53] There was a further email to the client on 1 September 2015. This email was a further
attempt by Mr Makai to mend relationships with the client and sell the benefits of what the
company was providing to them. I was not satisfied that the email was inappropriate.
[54] Mr Moore says that at the dismissal meeting:
“Barrie Quick asked him about these matters. At first he denied them, then when
presented with the email he said he believed that he was indeed paying for the tickets
out of his own pocket. He did not accept that he had misrepresented the truth nor put
the client in a compromising position.”
[55] Mr Makai conceded that he did make some errors with booking advertising dates for
the client and that the email should have been worded differently. He said that it was true that
the reduction in the commission effectively meant he was paying for the 2 grand final tickets
out of his own pocket. The cost of the booking error to the company was minor. The direct
cost was small but the company says that the potential loss of a client is a significant cost.
[56] Mr Hung, Mr Quick and Mr Moore were present at the meeting for the company. Mr
Quick did not give evidence. No notes were taken at the meeting. During the proceedings Mr
Moore said that Mr Quick did not raise the email directly with Mr Makai at the meeting but
asked general questions about what he had said to the client. He said that the exact words used
in the email were not used in those questions.
[57] Mr Hung says that matters were raised about the client and what Mr Makai had said to
the client. Mr Hung said it was more like a general discussion than questioning. Mr Hung
could not recall the responses of Mr Makai to matters raised in the email such as the extra
home page takeovers. Mr Hung considered that the general thread of Mr Makai’s response
was contrary to the email.
[58] Mr Makai said that he was so unwell in the meeting that he cannot recall the detail of
what happened. He says that he was not given an opportunity to respond to the reasons for
termination as the termination letter had already been written, printed and signed before he
entered the room. He recalls he was told about what he would be paid upon termination.
[59] I am not satisfied that there is a proper basis to conclude that Mr Makai was not
truthful in his responses at the termination meeting. There is no evidence of any particular
statement made by Mr Makai at the meeting which could be described as untruthful. I found
the evidence of the employer witnesses about this matter to be unconvincing. The failure to
mention the issue of conduct surrounding the email in the termination letter or the F3
employer response reinforces this view.
[60] However, I am satisfied that the email was inappropriate. It was not appropriate to
suggest to a client that he was doing them a favour and they should not disclose this to others
at Victorian Radio Network to avoid him getting into trouble with his employer. It was also
not appropriate to reinforce this by disclosing that he had got into trouble for giving them an
[2016] FWC 684
extra two grand final tickets. There was nothing particularly inappropriate or inaccurate in
telling the client that he was effectively paying for two of the tickets. I do not consider that the
email was suggesting that the client do anything improper or not disclose benefits received as
might be required by law or professional duty. The only request was about not disclosing the
bookings issue to his managers.
[61] There is no direct evidence that the email put the contract with the client at risk.
Considering the context and the content of the email I do not consider it likely that the email
put the business contract with the client at risk. The mistakes made by Mr Makai and which
he was trying to make up for in his communications with the client may have created a risk to
the client contract. It is not uncommon for a client to be dissatisfied with a salesperson.
Occasional instances of this are not cause for termination of employment. It is not suggested
that the mistakes were serious enough to justify termination but it is suggested that the
inappropriateness of the email and the denial of the email content is serious enough to justify
termination. In the main the email can be understood as “sales patter”. Although it was unwise
and inappropriate it was not particularly serious. As discussed earlier I am not satisfied that
Mr Makai denied the email or its contents.
[62] I am satisfied that the email was inappropriate, however, I do not consider sending it
to be serious misconduct. In itself it does not constitute a valid reason for dismissal. Dismissal
for such an isolated incident which is not serious misconduct would be disproportionate.
Was there a valid reason for termination related to conduct or capacity? (Section
387(a))
[63] I am satisfied that:
a. Mr Makai had been notified on 28 July that there were concerns about his performance in respect to number of appointments and achieving budget targets.
b. Mr Makai had been notified of concernsabout the issuing of 4 Grand Final tickets. That matter had been resolved as far as management was concerned by
reducing Mr Makai’s commission. It was not suggested that Mr Makai repeated
this behaviour with any other client.
c. Mr Hung suggested that therewould be a performance review at the end of August 2015 however there is no evidence that this took place, or if it did it did
not result in any specific disciplinary action or new performance requirements.
d. Mr Makai was advised on 17 August of specific performance requirements to address performance concerns. This was a performance improvement plan of
sorts.
e. Mr Makai was to be assisted to meet the specific performance requirements set out on 17 August 2015. One of these requirements related to September budget
sales performance.
f. Any final decision as to whether or not Mr Makai had responded positively or otherwise to the improvement plan specified on 17 August 2015 could not have
been known until the September sales performance was known. That is at the end
of September 2015.
g. Consistent with the contract of employment Mr Makai’s failure to meet budget targets could result in disciplinary outcomes. However, there is nothing in the
contract of employment which mandates the nature or timing of any disciplinary
outcome. Performance concerns need to be dealt with in a fair manner.
[2016] FWC 684
h. There was no proper basis to terminate Mr Makai’s employment because of failing to meet budget, failing to make adequate appointments, the issue of the
additional grand final tickets to a client, alleged poor attitude, errors or
inadequate responsiveness.
i. However, the fact that Mr Makai was on clear notice about performance
shortcomings and had been subject to earlier action concerning the grand final
tickets is relevant to determining if the termination due to the misconduct in
sending the email on 31 August 2015 was a valid reason for termination.
[64] On balance, I am satisfied that the inappropriate email when combined with the poor
performance in respect to sales budget and appointments about which he had been warned
and the errors made in respect to the client which led to the client seeking an alternative
account manager does constitute a valid reason for termination related to conduct or capacity.
No one of these factors alone would be a valid reason for termination but taken in
combination I consider that they do.
Was Mr Makai notified of that reason? (Section 387(b))
[65] Mr Makai was not notified of the reasons for termination in a clear manner. The
termination letter refers to performance issues not conduct. Mr Makai could reasonably
understand the performance issues to be the matters concerning sales budget and
appointments. Mr Makai was also aware of the errors he had made in respect to the client who
was the subject of the 31 August 2015 email. However, there is no evidence that Mr Makai
was told that the inappropriate email was a reason for the termination. Mr Makai may have
inferred that from the fact the termination letter was handed to him immediately after the
email was raised with him, however, the termination letter sent a different message.
Was Mr Makai given an opportunity to respond? (Section 387(c))
[66] It is not suggested that Mr Makai was asked to respond to the suggestion that his
employment may be terminated because of the email and his responses concerning it. The
termination letter was given to him immediately after the CEO had explored what Mr Makai
said about matters related to the content of the email. However, the discussion did not
specifically refer to the email and did not directly quote from the matters contained in it. The
other matters which the employer relied upon for the termination concerning conduct and
performance were not raised. The sequence of events when considered in context shows that
Mr Makai was effectively denied a reasonable opportunity to respond to the proposal that his
employment be terminated and was not clearly advised of the reasons.
[67] Mr Makai was not told that his employment was at risk or that the meeting was
concerning the future of his employment.
[68] I accept the evidence of Mr Makai that he was so unwell at the meeting that he was
unable to recall the detail of what happened. I accept the evidence of Mr Makai that he told
those in the meeting that he was unwell. Mr Moore gave evidence that Mr Makai told those in
the meeting that he was unwell. Mr Hung cannot recall the matter being raised. Mr Quick did
not give evidence.
[2016] FWC 684
[69] I generally preferred the evidence of Mr Makai about the meeting and the lead up to
the meeting to the evidence of Mr Hung and Mr Moore. Mr Hung’s evidence was imprecise
and replete with generalisations. The failure to mention the email issue or the alleged
untruthfulness in the termination letter or the F3 employer response reinforces my lack of
confidence in the evidence of the employer witnesses about the dismissal meeting.
[70] Mr Deltondo gave evidence that Mr Moore told him on 8 October 2015 that Mr Makai
had been terminated without warning because it was better to do it this way than to manage
him out the door. Mr Moore denies making that statement. It is not necessary to determine
that matter.
[71] Taking all these circumstances into consideration I consider that Mr Makai did not
have a reasonable opportunity to respond to the reasons it was proposed may lead to the
termination of his employment.
Was there an unreasonable refusal of representation? (Section 387(d))
[72] Mr Makai was unaware of the purpose of the meeting and so had no opportunity to
request representation. Mr Makai was not refused representation so Section 387(d) is a neutral
factor, however, the issue of the denial of an opportunity for representation is a relevant factor
in this case under Section 387(h) other matters.
Are the size of the employer and its resources relevant? (Sections 387(f) and (g))
[73] Sections 387(f) and (g) are neutral factors in this case as the employer was a large
employer with human resource management personnel and there was nothing before me that
suggested that the size of the employer or the expertise available impacted on the procedures
followed.
Other relevant matters? (Section 387(h))
[74] I consider that the failure to advise Mr Makai of the reason for the meeting and
thereby denying Mr Makai the opportunity to be represented to be procedurally unfair in the
circumstances of this case.
[75] Mr Sweeney, who is responsible for human resources in the company gave evidence
that he was not present at the meeting because it was arranged at such short notice. Mr Makai
was advised of the meeting by email one hour before it occurred. He asked a number of times
what the meeting was about. Mr Moore eventually said it was about budgets which was
untrue.
[76] Mr Sweeney said that “given the speed of events and the concerns raised by our client,
it would have been problematic to forewarn Mr Makai of the purpose of the meeting on
Monday 7 September 2015”. Under cross examination Mr Sweeney could not explain how
this was logical. I am not satisfied that there was any particular urgency to the matter. There
was no significant risk to clients or employees or the company.
[2016] FWC 684
[77] Mr Moore says that Mr Makai was not told about the purpose of the meeting out of
concern that he might contact the client concerned. Mr Hung said that Mr Makai was not told
because it was awkward to tell someone that there employment might be at risk. Mr Hung
accepts that it would have been fairer to allow Mr Makai representation.
[78] I am not satisfied that there was any reasonable basis for the concern that Mr Makai
might contact the client concerned if he was told that the meeting was to consider whether or
not his employment would be terminated or even if he was told that the meeting was about the
email. I can also see no reason why Mr Makai could not have been directly confronted about
the email.
[79] It was particularly unfair to hold the termination meeting without representation when
Mr Makai told those present that he was unwell and those present were all aware of the nature
of his illness. It was particularly unfair not to give proper notice of the meeting and the
reasons for the meeting and details of the allegations in these circumstances.
[80] I am satisfied that Mr Makai’s illness did effect his performance. This tends to make
the termination of employment a disproportionate response. Of course the illness would not
excuse poor performance indefinitely but it should have been taken into account as a
mitigating factor for a reasonable period of time. I am satisfied that Mr Moore was
sympathetic and helpful to Mr Makai and this was a reasonable adjustment and response to
his illness. However, there is no evidence that Mr Hung, Mr Moore or Mr Quick took account
of Mr Makai’s illness in determining whether or not the disciplinary response to poor
performance was fair and proportionate.
[81] I am not satisfied that the Mr Makai’s illness is a mitigating factor in respect to the
sending of the email on 31 August 2015. There is no evidence that the misjudgement in that
case was related to the illness.
[82] Mr Makai argues that the impact the illness had on his prospects for finding future
employment made the termination harsh. I accept that this is a factor but not a strong factor in
this case. Mr Makai was successful in obtaining new employment relatively quickly.
Was the dismissal unfair?
[83] I am satisfied that although there was a valid reason for the dismissal the procedure
utilised was particularly unjust and unreasonable and in all of the circumstances termination
of employment was a harsh or disproportionate response to the performance and conduct
matters involved. This may have become apparent to the employer had a fair process been
utilised. I am satisfied that the termination was harsh, unjust and unreasonable.
Remedy
[84] Mr Makai says that reinstatement is not appropriate because he has lost confidence
that the employer would treat him fairly. He is seeking compensation. I am not satisfied that
reinstatement would be an appropriate remedy in this case. However, I am satisfied that an
award of compensation would be appropriate.
[2016] FWC 684
[85] I consider that the misconduct in respect to sending the 31 August 2015 email did
contribute to the decision to terminate the employment and I will therefore discount any
compensation order by 20%. As discussed the conduct was not serious misconduct.
[86] There is no submission that the viability of the employer would be effected by any
order I might make.
[87] The length of service is less than one year which is relative short. I have taken this
factor into consideration in my estimate of the length of time that Mr Makai would have
remained in employment had it not been for the dismissal.
[88] I am satisfied that Mr Makai would have remained in employment for six months if it
had not been for the dismissal. Mr Makai says that he would have been in the job for 5 years
whilst the employer says it would be a matter of weeks or months not years. I take into
account the relatively short period of service and the fact that there were performance
concerns but that these may have been resolved given his commitment to the job and
acknowledged sales skills.
[89] I am satisfied that Mr Makai made adequate efforts to mitigate his loss. I accept his
evidence that he applied for 61 new jobs in the seven weeks between 7 September and finding
new employment on 25 October 2015.
[90] I am satisfied that Mr Makai received four weeks’ notice pay from Victorian Radio
Network but did not earn any other income from employment during the seven week’s he was
unemployed.
[91] The compensation period is 26 weeks. 21 weeks from the date of dismissal to the date
of this Order. 2 weeks from the date of this Order to the payment of compensation. 3 weeks
remaining.
[92] There are approximately 21 weeks between the date of dismissal (7 September) and
the date of this order. In that period I estimate Mr Makai’s lost income to be three weeks’ pay.
He was unemployed for 7 weeks but received 4 weeks’ notice pay. Mr Makai says that his
earnings in the new job are less than what he would have earned in his job with Victorian
Radio Network. The base pay is higher but the commission rate is lower. Mr Makai says he
could have expected to earn $120,000 per year with Victorian Radio Network. They say that
estimate is too high and inconsistent with actual earnings during the period of employment.
Based on Mr Makai’s estimate and the actual earnings in his new job Mr Makai estimates his
losses at $14,000. However, the commission rate at Victorian Radio Network is subject to
change and depends upon sales performance which is uncertain and cannot be predicted with
accuracy.
[93] The estimates of weekly earnings provided by the employer and Mr Makai differ. I
have taken a mid-point between the estimates and decided that the lost income for the period
is $2000 per week or $6000. I do not consider it necessary to make a further deduction for
contingencies as the variables are known.
[94] The two weeks between the order for compensation and the actual compensation will
not involve any loss as it is reasonable to assume the new employment will continue.
[2016] FWC 684
[95] The remaining period of compensation is 3 weeks. Mr Makai would have earned
$6000 in three weeks. I will deduct 25% for contingencies from that amount leaving $4500.
[96] The total compensation is therefore $10,500.
[97] This amount is reduced by 20% for misconduct for the reasons discussed earlier. The
compensation I will order is therefore $8,400 which is payable within fourteen days with
appropriate taxation deducted.
[98] An order is published separately.
COMMISSIONER
Appearances:
Mr J Makai represented himself.
Mr S Sweeney represented the Respondent.
Hearing details:
2015
Melbourne
January 21
Printed by authority of the Commonwealth Government Printer
<Price code C, PR576647>
1
F3 dated 14 October 2015.
2
Respondent documents, Attachment 2.
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