Mark Anthony Cuthbertson v The Trustee for Team Moto Group Unit Trust
[2011] FWA 122
•11 JANUARY 2011
[2011] FWA 122 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Mark Anthony Cuthbertson
v
The Trustee for Team Moto Group Unit Trust
(U2010/6901)
COMMISSIONER GOOLEY | MELBOURNE, 11 JANUARY 2011 |
[1] Mr Mark Cuthbertson was employed by the Trustee for Team Moto Group Unit Trust (“the respondent”) from approximately October 2007 until his employment was terminated on 8 March 2010.
[2] Mr Cuthbertson lodged an application for relief pursuant to s 394 of the Fair Work Act 2009 (“the FW Act”) alleging that he was unfairly dismissed. The application was referred to conciliation and then for hearing on 20 August 2010.
[3] Mr Cuthbertson was employed by the respondent as a sales manager at its Springwood dealership. The dealership sold new and used bikes and also had a facility to service and repair bikes. Mr Cuthbertson managed a sales team of four or five employees. 1
[4] Mr Adam Tayler, a solicitor, appeared with permission for Mr Cuthbertson and Mr David Ahmet appeared for the respondent.
[5] Mr Cuthbertson gave evidence on his own behalf and Mr Robert Tinlin, Mr David Elliott, Ms Kerrianne Keers, Ms Nicole Bell, Mr James Veress and Mr John Sayers gave evidence for the respondent.
Jurisdiction of Fair Work Australia
[6] There is no dispute that Mr Cuthbertson is a person who was protected from unfair dismissal. Further the respondent is not a small business and it was not submitted that Mr Cuthbertson had been made redundant. Therefore Fair Work Australia has the jurisdiction to determine the application.
The Evidence
[7] The respondent terminated Mr Cuthbertson’s employment because of his performance and for integrity issues.
The Sales Performance Issues
[8] Mr Cuthbertson’s sales target for each month was eighty five new and used bikes. 2 Mr Sayers was the principal dealer at Springwood.3 Mr Sayers took annual leave in January 2010 and when he returned on 18 January 2010 the dealership had sold less than twenty bikes.4
[9] It is not disputed that this was a bad result for the dealership. What is in dispute was the cause of the decline in sales.
[10] Mr Bruce Tinlin who was the Group Sales Manager for the respondent gave evidence that he met with Mr Cuthbertson on 11 January 2010 about his poor performance as a manager. 5 Mr Tinlin told Mr Cuthbertson “that his lack of focus on his staff and the customers was largely responsible for his poor performance. Specifically I mentioned his failure to ‘double close’ on negotiations, his reluctance to get involved with customers resulting in low margins and low sales volumes, and his poor leadership qualities which I felt were unacceptable for this senior role. I explained that an improvement in his management/leadership skills and a concerted effort was required.”6 Mr Tinlin’s evidence was that he warned Mr Cuthbertson on this occasion that if he did not improve his performance his job would be in jeopardy.7 Mr Cuthbertson accepted that the meeting took place on 11 January 2010 but did not agree that Mr Tinlin discussed his performance or warned him that his job was in jeopardy.8
[11] Mr Sayers formed the view that the Mr Cuthbertson was “struggling to perform his duties and could not be relied upon to achieve the results needed.” 9 On his return to work in January 2010 Mr Sayers sought an explanation from Mr Cuthbertson about the poor sales figures and did not accept Mr Cuthbertson’s explanation that things were quiet. Mr Cuthbertson accepted that sales were low but said this was due to the lack of bikes for sale, lack of advertising and lack of staff.10 Mr Cuthbertson accepted that Mr Sayers spoke to him about the lack of sales but denied that this was a counselling session. 11 Mr Sayers’ evidence was that this was a counselling session.12
[12] It was not disputed that sales for January 2010 were 34 units less than budget. This resulted in the business losing money for the first time in 12 to 13 months. The loss was said to be thirty to forty thousand dollars. 13
[13] Mr Sayers gave evidence that he held a formal meeting with Mr Cuthbertson in early February 2010 to discuss his performance. He said he explained that Mr Cuthbertson was not applying himself and the sales result was unacceptable. He said he told Mr Cuthbertson that the dealership needed to return to budget in February. 14 Mr Cuthbertson accepted that this meeting took place but denies he was told it was a counselling session.15
[14] Mr Tinlin gave evidence that he again counselled Mr Cuthbertson about the January sales figures on 9 February 2010. He said he had not witnessed a positive response to his earlier meeting. His evidence was that Mr Cuthbertson maintained his explanation that the market was quiet. Mr Tinlin’s evidence was that this explanation was not consistent with other dealership results for the same period. He formed the view that Mr Cuthbertson accepted little responsibility for the poor sales result. Mr Tinlin said he told Mr Cuthbertson that “his substandard management/leadership skills needed immediate and vast improvement” and that his job was in jeopardy. 16 Mr Cuthbertson accepted there was a meeting with Mr Tinlin but denied he was giving a warning.17 Mr Cuthbertson relied upon the failure of Mr Tinlin to have witnesses present to support his claim that he was not given a warning on this occasion.
[15] Mr Sayers said February sales were also below budget and the dealership again recorded a loss. 18 Mr Sayers’ evidence was that the sales figures in February were unacceptable.19 He accepted that sales in February were an improvement over January sales.20
[16] Mr Cuthbertson was injured on 5 March 2010 and did not return to work before his employment was terminated on 8 March 2010.
[17] The workplace disciplinary policy was not in evidence before me.
The Missing Bikes
[18] On 10 February 2010 an audit of the dealership was conducted. Two bikes could not be found. The respondent alleged that Mr Cuthbertson should have, but did not, know where the bikes were.
[19] Mr Cuthbertson’s evidence was that he knew where the bikes were and that he was not asked during the audit where the bikes were. 21
[20] Ms Keers, who is the Vehicle Administration Supervisor, gave evidence that she conducted the audit on 10 February 2010 along with Mr Oliver, a Company Director. She said the audit was conducted early in the morning and that initially ten bikes could not be located. It was her evidence that eight of the bikes were found but two were still missing. It was her evidence that Mr Cuthbertson was present the whole time and that Mr Sayers asked Mr Cuthbertson specifically where the bikes were. It was her evidence that she overheard a heated conversation between Mr Sayers and Mr Cuthbertson about this matter and she heard Mr Cuthbertson say, when asked “Where are the bikes?”, “I don’t know.” 22
[21] Mr Sayers gave evidence that he spoke to Mr Cuthbertson about the missing bikes after being told by Ms Keers and Mr Oliver about the missing bikes. Mr Cuthbertson did not tell him he knew where the bikes were. Mr Sayers said that he and Mr Cuthbertson then searched the yard but were unable to find the bikes 23. Mr Sayers then sent out an email at 9.55am asking if other dealers knew where the bikes were.24
[22] The respondent complained that not only did Mr Cuthbertson not know where the bikes were; he had confused one missing bike with another and could not properly identify the other missing bike. 25
The Insurance Claim
[23] The respondent claimed that Mr Cuthbertson had loaned a bike to a customer in breach of company policy and, when the customer had an accident, tried to cover it up.
[24] Ms Nicole Bell, the respondent’s Corporate Accountant, gave evidence that on 18 February 2010 she was approached by Mr Cuthbertson who advised her that he had loaned a bike to a customer in November 2009 and there had been an accident on 27 December 2009. Ms Bell alleges that Mr Cuthbertson initially told her that the customer was licensed and when she disputed this, he said that the customer had told him she was licensed. He then told Ms Cuthbertson that the customer had a learner’s permit and was accompanied by a fully licensed rider who was riding pillion. Ms Bell’s evidence was that the pillion passenger in fact had a provisional licence not an open licence. 26 She said she counselled Mr Cuthbertson about this incident and pointed out that, while a learner must be accompanied by an open licensed rider, that person must not be riding pillion.
[25] Mr Cuthbertson’s evidence was that he loaned this bike to the customer at Mr Sayers’ direction. He said that Mr Sayers knew the customer held a learner’s permit. He further said that he understood a bike could be loaned to a learner and that the other person’s licence was an open licence. He said he was told subsequently that this licence had been downgraded to a provisional licence. He denied being counselled by Ms Bell and questioned her authority to counsel him. 27
[26] Mr Cuthbertson’s oral evidence was that the accompanying driver did in fact hold the appropriate licence. 28
[27] Mr Sayers denied directing Mr Cuthbertson to loan the bike. 29 He acknowledged that he approved the decision to loan the bike but left the details to Mr Cuthbertson.30 He also denied knowing the rider had a learners permit.31
[28] The respondent also relied on the failure of Mr Cuthbertson to report the accident until February 2010. Mr Cuthbertson gave evidence that he did not know about the accident until eight weeks later as the customer was away. 32
Customer Complaint of 23 February 2010
[29] A customer complained to Mr Dave Elliott, the Service Manager, that Mr Cuthbertson had misled him about the history of the bike he had purchased.
[30] Mr Elliott gave evidence of what the customer told him. Mr Tayler in cross examination put to Mr Elliott that the customer was confused and that Mr Cuthbertson had not sold him the bike. 33
The Termination
[31] Mr Tinlin gave evidence that there was discussion in early March about Mr Cuthbertson’s performance and it was decided that Mr Cuthbertson’s employment would be terminated. Mr Tinlin’s evidence was that this decision was made before Mr Cuthbertson had his accident. 34 There was no discussion with Mr Cuthbertson about this.
[32] Mr Tinlin contacted Mr Cuthbertson by telephone on 8 March 2010 and told him his employment had been terminated because he had not improved his performance in the last two months. 35 Mr Cuthbertson denied he was told the reason for his termination until he asked if it was about performance issues.36
[33] Mr Cuthbertson was paid two weeks pay in lieu of notice.
Was the Termination of Employment Harsh, Unjust or Unreasonable?
[34] In considering whether the Tribunal is satisfied that a dismissal was harsh, unjust or unreasonable, Fair Work Australia must take into account the following:
s387(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);
[35] Mr Cuthbertson’s employment was terminated for poor performance and integrity issues.
[36] There was no question that the dealership had not made its budget in January and February 2010. I accept the evidence of the respondent that Mr Cuthbertson’s response to the questioning of his performance did not satisfy them. I also accept the respondent’s evidence that, given the performance of other dealerships, the failure of the Springwood dealership to perform in January and February was caused by Mr Cuthbertson’s poor performance.
[37] I accept the evidence of the respondent that Mr Cuthbertson should have been aware of where the two missing bikes were. Mr Cuthbertson did not challenge this and in fact gave evidence that he did in fact know where the bikes were located. His evidence on this matter is in direct conflict with Ms Keers’ and Mr Sayers’ evidence.
[38] While I accept there are significant differences between Ms Keers’ and Mr Sayers’ descriptions of what occurred, both agree that Mr Cuthbertson was there during the audit, was asked where the bikes were and denied knowing where they were. In this matter I prefer their evidence to Mr Cuthbertson’s evidence. It is inconceivable, in the circumstances, that Mr Cuthbertson would not have been asked if he knew where the bikes were. So I can only conclude that either Mr Cuthbertson knew where they were, and allowed a time consuming search for the bikes to take place without advising those searching for the bikes where they were, or he did not know. I have decided that the latter is more believable and is consistent with the evidence given by Ms Keers and Mr Sayers.
[39] It is not clear to me on the evidence if Mr Cuthbertson breached company policy when he loaned the bike to the learner driver. The loan agreement was made with two persons one of whom held a learner’s permit and the other a licence of some kind. There were no submissions put as to how this breached company policy. I also do not find on the evidence before the Tribunal that Mr Cuthbertson covered up the accident.
[40] I further do not accept on the evidence before the Tribunal that Mr Cuthbertson misled customers and lacked integrity. No customers were called to substantiate these claims.
[41] Mr Cuthbertson failed to meet his targets for January and February. It is not the role of this Tribunal, without cogent evidence, to go behind the employer’s decision to set sales targets for its sales employees. I accept the unchallenged evidence of Mr Sayers that the targets are set to take account of the vagaries of the market and are calculated from yearly sales figures. 37 Mr Cuthbertson was a senior manager with responsibility for meeting the targets. Mr Cuthbertson did not, and still does not, accept any responsibility for the failure to meet those targets and because of that did not indicate to the respondent a willingness to improve his performance.
[42] I do not accept Mr Cuthbertson’s evidence that his strained relationship with Mr Tinlin impacted on the decision by the respondent to terminate his employment.
[43] I also do not accept Mr Cuthberston’s submission that his employment was terminated because of his injury.
[44] I find that Mr Cuthbertson’s failure over two months to meet his sales target means there was a valid reason for the termination of Mr Cuthbertson’s employment.
s387(b) whether Mr Cuthbertson was notified of that reason;
[45] Mr Cuthbertson was advised of the decision to terminate his employment after the decision was made to terminate his employment.
[46] In Crozier v Palazzo Corporation Pty Ltd 38 the Full Bench of the Australian Industrial Relations Commission considered whether the equivalent provision in the Workplace Relations Act 1996 (as it existed prior to Workplace Relations Amendment (Work Choices) Act 2005) required the employee to be notified before the decision was made.
[47] The Full Bench held that:
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG (3) (b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted”. 39
[48] As Mr Cuthbertson was not advised of the reasons to terminate his employment prior to the decision being made I find that he was not notified of the reason.
s387(c) whether Mr Cuthbertson was given an opportunity to respond to any reason related to the capacity or conduct of the person;
[49] For the reasons set out above in relation to s 387(b), the opportunity to respond is a reference to an opportunity to respond before a decision is taken to terminate the employee’s employment.
[50] I find that Mr Cuthbertson was not provided with an opportunity to respond to the reason for his termination.
s387(d) any unreasonable refusal by the employer to allow Mr Cuthbertson to have a support person present to assist at any discussions relating to dismissal;
[51] Mr Cuthbertson did not ask for a support person to be present at any of the meetings held to discuss his performance.
s387(e) if the dismissal related to unsatisfactory performance by the person—whether Mr Cuthbertson had been warned about that unsatisfactory performance before the dismissal;
[52] I accept that while Mr Cuthbertson was not given a formal warning about his performance he was counselled about his performance by Mr Sayers and Mr Tinlin in January 2010 and again in February 2010.
[53] I prefer the evidence of Mr Tinlin and Mr Sayers in relation to these meetings over Mr Cuthbertson’s evidence. I do not accept Mr Cuthbertson’s conclusion that because neither Mr Tinlin nor Mr Sayers followed the respondent’s policy in relation to warnings that these meetings were not counselling sessions.
[54] However I do find that neither Mr Sayers nor Mr Tinlin made it clear to Mr Cuthbertson that if his sales in February were below target that his employment would be terminated.
[55] There was also no evidence that Mr Cuthbertson was warned about the other performance matters relied upon by the respondent. There was evidence of a heated conversation between Mr Sayers and Mr Cuthbertson about the missing bikes but no particulars of the conversation were provided. There was no evidence that Mr Cuthbertson was spoken to about the other complaints made by staff about him. While Ms Keers spoke to Mr Cuthbertson about loaning bikes to learner drivers this was not a warning about his performance.
[56] In Fasitada Pty Ltd v J B Goodwin 40 the Full Bench when considering the equivalent provision in the Workplace Relations Act 1996 (as it existed prior to the Workchoices Amendments) found that the warning must:
“- identify the relevant aspect of the employee’s performance which is of concern to the employer; and
make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.
In relation to the latter requirement, a mere exhortation for the employee to improve his or her performance would not be sufficient. We also note that we accept that these criterion are to be applied in a practical and commonsense way taking into account the employment context.”
[57] While Mr Tinlin gave Mr Cuthbertson some insight into why he considered his performance was unacceptable there was no evidence that Mr Sayers did anything more than exhort Mr Cuthbertson to meet his targets.
s387(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
[58] I do not consider that the size of the business impacted on the procedures followed in effecting the dismissal.
s387(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal;
[59] The respondent had a part time human resources employee who was not consulted about the dismissal. Therefore I do not consider this factor relevant to my considerations.
s387(h) any other matters that FWA considers relevant.
[60] I have had regard to the fact that Mr Cuthbertson had been employed from 2007 and had held the sales manager position for 12 months. In the first 10 months after his appointment as sales manager there was no evidence of any performance issues. It appears that inexplicably his performance fell off dramatically in January and February 2010. I have had regard to the short period of time that Mr Cuthbertson was given to improve his performance. I have also had regard to the respondent’s submissions that the failure to meet sales targets was costing them a significant amount of monies.
Conclusion
[61] While this case is finely balanced I have concluded that the termination of Mr Cuthbertson’s employment was harsh, unjust and unreasonable. I reach this conclusion because I do not consider that Mr Cuthbertson was sufficiently warned about the range of performance concerns held by the respondent and was given insufficient time to improve his performance.
Remedy
[62] Mr Cuthbertson does not seek reinstatement of his employment.
[63] In assessing any amount in lieu of reinstatement Fair Work is required to have regard to the following circumstances.
s392 (a) the effect of the order on the viability of the employer’s enterprise;
[64] No evidence was put before the Tribunal in respect of this criterion.
s392 (b) the length of the person’s service with the employer;
[65] Mr Cuthbertson had been employed by the employer from October 2007 until the termination of his employment on 8 March 2010.
s392 (c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;
[66] I have found that Mr Cuthbertson should have been given a longer period in which to improve his performance. It would have been reasonable, given that he had not failed to meet his sales target in the preceding ten months and the improvement in February, for Mr Cuthbertson to have been given another month to see if he would meet his sales target. However on the evidence before me, particularly Mr Cuthbertson’s lack of insight into his failure to perform, I have concluded that Mr Cuthbertson would not have remained in employment for longer than one month.
[67] Mr Cuthbertson’s base pay was $2307 per fortnight. Mr Cuthbertson gave evidence that he earned on average another $1000 a week commission. This is not reflected in the earnings summary provided by his employer. Mr Cuthbertson earned on average $725 commission per week.
s393 (d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;
[68] Mr Cuthbertson was on workers compensation until 6 May 2010. He found work four weeks prior to making his statement. No detailed evidence was given of any steps taken by him to find work after 6 May 2010.
s392 (e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation;
[69] As I have concluded that Mr Cuthbertson would have worked for one month after he returned to work from 6 May 2010 it is not necessary for me to have regard to any workers compensation payments made to Mr Cuthbertson. On the evidence before the Tribunal he did not work in the one month period after 6 May 2010.
s392 (f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation;
[70] Given my decision about compensation this is not relevant.
s392 (g) any other matter that FWA considers relevant.
[71] There were no submissions made about any other matters that should be considered.
Conclusion
[72] I have decided that it is appropriate to order that Mr Cuthbertson receive compensation of four weeks’ pay. I therefore order that the employer pay Mr Cuthbertson $7514 less applicable taxation.
COMMISSIONER
Appearances:
A Tayler for the Applicant.
D Ahmet for the Respondent.
Hearing details:
2010.
Brisbane:
20 August.
1 Exhibit R6 at [2]
2 Ibid at [6]
3 Ibid at [1]
4 Ibid at [6]
5 Exhibit R1 at [12]
6 Ibid
7 Transcript PN 273
8 Ibid PN 242
9 Exhibit R6 at [7]
10 Transcript PN 93
11 Transcript PN 101
12 Transcript PN 916
13 Transcript PN 362 -365
14 Exhibit R6 at [9]
15 Transcript PN 101
16 Exhibit R1 at [13]
17 Transcript PN 137
18 Exhibit R6 at [10]
19 Transcript at PN 908
20 Ibid at 1063-1064
21 Exhibit A1 at [74] and [75]
22 Transcript PN 616
23 Ibid PN 962
24 Exhibit R3 Annexure A
25 Exhibit R7
26 Exhibit R4
27 Exhibit A1 at [87]-[88]
28 Transcript PN 143
29 Exhibit R6 at [13]
30 Transcript PN 1040
31 Transcript PN 1041
32 Ibid PN 107
33 Ibid PN 514-539
34 Ibid PN 314
35 Ibid PN 317
36 Ibid PN 327
37 Ibid PN 1008-1009
38 Print S5897
39 Ibid at [73]
40 Print S9280
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