Mark Robinson v The Trustee For Protean Trust
[2024] FWC 490
•11 MARCH 2024
| [2024] FWC 490 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mark Robinson
v
The Trustee For Protean Trust
(U2023/11705)
| DEPUTY PRESIDENT CROSS | SYDNEY, 11 MARCH 2024 |
Application for an unfair dismissal remedy
Mr Mark Robinson (the Applicant) was employed from 4 June 2013 until 7 November 2023 in the position of Manager, and prior to that Motor Mechanic, for Kays Discount Tyres (the Respondent). The Applicant was dismissed for serious misconduct during a disciplinary meeting on 7 November 2023 after Mr Kent (the owner and director of the Respondent) became concerned that the Applicant:
(a) was performing work on vehicles at the premises of the Respondent without the Respondent’s knowledge or consent;
(b) was selling various products at a discounted rate without the Company’s knowledge or consent; and
(c) had falsified a wheel alignment report.
On 21 November 2023, the Applicant filed an application, pursuant to s 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy (the Application). The Applicant did not seek reinstatement. He claimed payment of entitlements including long service leave and compensation for loss of wages up to 26 weeks.
In response, the Respondent raised the jurisdictional objection that the Respondent is a small business employer and the employer complied with the Small Business Fair Dismissal Code (the Code). There was no issue between the parties that the Respondent was a small business employer.
On 23 February 2024, I heard the above matter (the Hearing). Mr Kent of the Respondent and his representative Mr Caslick of the Motor Traders Association of NSW attended. The Applicant did not attend the Hearing, despite numerous calls from my Chambers, and an email from my Chambers to the parties which re-attached the Notice of Listing and requested the parties’ attendance. To date the Applicant has provided no reason for his absence from the Hearing.
I observe that, as the Hearing dealt at least initially with the jurisdictional objection that the Respondent complied with Code, that circumstance lent itself to what was effectively an ex parte hearing, in the absence of the Applicant. As outlined below, the Code involves an employer establishing:
(a) that it held the belief that an employee’s conduct is sufficiently serious to justify immediate dismissal; and
(b) that there are reasonable grounds for the employer holding that belief.
Pursuant to the Code, it is the employer that is put to proof, and the determination of whether there has been compliance with the Code rests primarily with the Respondent.
The Legislation
Section 385 of the Act defines when a dismissal is unfair. It reads as follows:
‘385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.’
Section 396 of the Act requires the Commission to determine a number of preliminary matters, before considering the merit of the Applicant’s claim. The section is expressed as follows:
‘396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.’
In relation to those preliminary matters, I find:
(1) The Applicant is a national system employee, and the Respondent is a national system employer (ss 380, 13, 14);
(2) The Applicant was employed under the terms of the Vehicle Repair, Services and Retail Award 2020 [MA000089] at weekly rate of $1692.00 gross (s 382(b)).
(3) The Respondent’s business is a small business as defined by s 23, in that the Respondent employed approximately 5 persons (ss 396(c), 388);
(4) The Applicant had been employed for the minimum employment period for a small business of at least twelve months (ss 382(a), 383(b));
(5) The Applicant’s dismissal was not a case of genuine redundancy (s 385(d));
(6) The Applicant was dismissed for serious misconduct on 7 November 2023 (ss 385(a), 386); and
(7) The application for a remedy from unfair dismissal was lodged within the statutory time limit of 21 days (s 394(2)(a)).
The only outstanding preliminary issue is the Code, and the Respondent maintained that he had complied with the Code and consequently, the Applicant’s claim for an unfair dismissal remedy was beyond the Commission’s jurisdiction. If, however, it is found that the Respondent had not complied with the Code, then considerations going to whether the dismissal was ‘harsh, unreasonable or unjust’, within the terms of s 387 of the Act, will arise.
The Evidence
On Thursday 2 November 2023, Mr Kent became aware that the Applicant had been conducting mechanical work on Saturdays, contrary to instructions. That awareness led Mr Kent to make further enquiries. Mr Kent spoke with the Applicant, as well as current and former employees. The Applicant was suspended on pay on 3 November 2023. Also on 3 November 2023, Mr Kent completed the Small Business Fair Dismissal Code Checklist.
Mr Kent met with the Applicant during a disciplinary meeting on 7 November 2023, to obtain his response and the Applicant was invited to respond to the evidence at hand. The Applicant chose not to accept the opportunity to review the available evidence at hand, except for the wheel alignment report and the invoices relating to allegations he sold tyres valued at $149.00 each for $75.00 each. At the beginning of the meeting, before any allegations were read to the Applicant, the Applicant stated words to the effect “Anything you ask me I don’t recall”.
The above explanations provided by the Applicant in the disciplinary meeting were unacceptable. In respect of the wheel alignment report as contained, while the Operator is noted on the report as ‘Biggins’, Biggins did not perform work on 25 October 2023 as he was not at work being unwell, and the Applicant was the only person who could have performed the wheel alignment that day. That report was examined in the Hearing and on its face it is apparent that the report was manually, and clumsily, altered. That alteration could have had devastating effects on the Respondent.
Regarding discounted goods, it became apparent at the Hearing that such discounts were afforded on numerous occasions to certain persons and families. The Applicant was notified that the allegations were serious and in respect of performing unauthorised work on vehicles and obtaining a profit, as well as failing to charge customers the appropriate price resulting in a detriment to the company.
After the disciplinary meeting with the Applicant on 7 November 2023, Mr Kent provided him with the following letter:
RE: TERMINATION OF YOUR EMPLOYMENT BY WAY OF SERIOUS MISCONDUCT
As advised today your employment has been terminated by Kays discount tyres (the Company) by way of serious misconduct for the allegations addressed with you during the disciplinary meeting and as indicated below
THE SUBSTANTIATED ALLEGATIONS
1. It is alleged that you performed work on vehicles at the premises of the Company and use Company property and resources without the Company’s knowledge or consent and have retained the profits for such work in particular it is alleged that:
a.On 13 May 2023 you prefer you performed work our customers vehicle that you drove to work in a Company cannot locate records of payment for the service performed.
b.On 20 May 2023 performed worker customers vehicle that you drove to work in a Company cannot locate the records of payment for the service performed.
c.On 3 June 2023 performed work on a customer’s vehicle the drove to work in a Company cannot locate records of payment for the service performed.
d.On 14 July 2023 performed work in a customer’s vehicle that you drove to work in a Company cannot locate records of payment the service performed.
2. It is alleged that you’ve sold various products of the Company at a discounted rate without the Company’s knowledge or consent in particular it is alleged that:
a.On 13 May 2023 you sold two (2) Winrun 245/35R20 inv#249161, which was required by the Company to be sold at $150 each and our records indicate that the item was sold at the rate of $70 each.
b.On 29 July 2023 you sold four (4) Kumho 235/55R17 HP71 inv#250668 which was required by the Company to be sold at $260 each and our records indicate that the items sold the rate of hundred $95 each.
c.On 29 July 2023 you sold two (2) Kumho 225/60R18 HP71, which was required by the Company to be sold $265 each in and our records indicate the item was sold at the rate of hundred and $72 each.
d.On 1 August 2023 you sold four (4) Maxxis 265/65R17 MT772 inv#250703, which was required by the Company to be sold $385 each and our records indicate that the item was sold at the rate of $150 each.
e.On 5 October 2023 you sold a Winrun 225/45R17 inv#251903 which was required by the Company to be sold at $149 each and our records indicate that the item was sold the rate of $75 each.
As a result of your above-mentioned conduct is alleged that your conduct amounts to serious misconduct as:
· your conduct amounts serious breach of your common law obligations of good faith and fidelity;
· you failed to act in the best interests of the Company;
· you have taken advantage of your position and the property of the Company and obtained a financial advantage to the detriment of the Company;
· you failed to use Company time and resources appropriately;
· the Company have lost trust and confidence in you; and
· your conduct is inconsistent with the continuation of your employment.
The Company have carefully considered your responses during the disciplinary meeting held today and note that your response to the allegation about the position that you “cannot recall” either attending for work on the days in question or selling the products a discounted price. The Company find your response improbable on the balance of probabilities. The Company find the allegations as above-mentioned to be substantiated on the balance of probabilities based on the available evidence at hand.
As you been dismissed by way of serious misconduct, your employment will end immediately, and no notice is required to be provided. Any outstanding pay will be paid to you within 7 days from today.
Kind regards,
Jonathan Kent
Consideration
The Code deals with dismissals separately in respect to serious misconduct and poor performance. As earlier mentioned, it is not in contention that the Respondent was a small business as the Respondent employed five employees. Given the Respondents allegations and suspicions of theft and fraud, in these circumstances, the following paragraph from the Code is applicable:
‘Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.’
This provision may be read in conjunction with the definition of serious misconduct in the Fair Work Regulations 2009. R 1.07 is as follows:
‘Meaning of serious misconduct
(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.
(2) For subregulation (1), conduct that is serious misconduct includes both of the following:
(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:
(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer's business.
(3) For subregulation (1), conduct that is serious misconduct includes each of the following:
(a) the employee, in the course of the employee's employment, engaging in:
(i) theft; or
(ii) fraud; or
(iii) assault; or
(iv) sexual harassment;
(b) the employee being intoxicated at work;
(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee's contract of employment.
(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.
(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee's faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee's duties or with any duty that the employee may be called upon to perform.
The Full Bench in Pinawin v Domingo,[1] considered the summary dismissal aspect of the Code at length:
[23] As s.396 requires the determination of this issue before considering the merits of the application more generally we consider this matter first. The Small Business Fair Dismissal Code contains the following reference to Summary Dismissal:
“It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. .....”
[24] This test brings the position for small businesses into line with the test for unfairness applied by tribunals in the UK in misconduct cases. In the leading case of British Home Stores Ltd v Burchell, the Employment Appeal Tribunal held that:
“What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further.”
[25] There have been few decisions discussing the requirements of the relevant paragraph of the Small Business Fair Dismissal Code in Australia and no Full Bench cases. Commissioner Deegan in French v Lufra Investment expressed her conclusion on consistency with this part of the Small Business Fair Dismissal Code as follows:
“[41] The respondent appeared to argue that the applicant’s conduct was serious misconduct as it was “wilful and deliberate behaviour by an employee that is inconsistent with the contract of employment”. I am not satisfied that the applicant’s conduct in initially refusing to restore the shed to its former state or refusing to discuss the matter with Ms Holland some short time later was, in all the circumstances “wilful or deliberate behaviour” or in fact conduct so serious as to justify summary dismissal. I will expand on my reasons for reaching this conclusion in dealing with the matter of whether the dismissal was harsh, unjust or unreasonable. As summary dismissal was not warranted in this case the dismissal was inconsistent with the Code.”
[26] In our view this approach is not consistent with the requirements of the Small Business Fair Dismissal Code as it equates the test in the Code with a determination by the tribunal of whether summary dismissal was warranted.
[27] Deputy President Bartel in Narong Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana Tree Cafe said:
“[60] At the outset it is appropriate to note that unlike a consideration of the dismissal of an employee of a business that is not a small business employer, the function of FWA is not to determine on the evidence whether there was a valid reason for dismissal. That is, the exercise in the present matter does not involve a finding on the evidence as to whether the applicant did or did not steal the money. The application of the Small Business Fair Dismissal Code involves a determination as to whether there were reasonable grounds on which the respondent reached the view that the applicant’s conduct was serious enough to justify immediate dismissal. As such, the determination is to be based on the knowledge available to the employer at the time of the dismissal, and necessarily involves an assessment of the reasonableness of the steps taken by the employer to gather relevant information on which the decision to dismiss was based.”
[28] Senior Deputy President O’Callaghan in Harley v Rosecrest Asset Pty Ltd T/A Can Do International said:
“[8] For an employer to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal, it is firstly necessary for the employer to establish that the employer did in fact hold the belief that as a matter of fact that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) that the conduct justified immediate dismissal. This is to be contrasted to the provisions of s.387(a) where FWA, in determining whether there was a valid reason for the dismissal, must find whether the conduct in fact occurred.
[9] Secondly, it is necessary for the employer to establish that there are reasonable grounds for the employer holding the belief. It is thus necessary for the employer to establish a basis for the belief held which is reasonable. In this regard it would usually be necessary for the employer to establish what inquires or investigations were made to support a basis for holding the belief. It would also ordinarily be expected that the belief held be put to the employee, even though the grounds for holding it may not be. Failure to make sufficient inquiries or to put the accusation to the employee in many circumstances might lead to a view that there were no reasonable grounds for the belief to be held.”
[29] We believe that the approach and observations in these two decisions are correct. There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.
The question I need to consider in this case is whether Mr Kent believed on reasonable grounds that the Applicant’s conduct was sufficiently serious to justify immediate dismissal.
It is apparent that Mr Kent was well aware of his obligations in this regard as he had uncovered and has continued to uncover apparent misconduct. The matter to address is whether Mr Kent had ‘reasonable grounds’ to believe the Applicant’s conduct was sufficiently serious to justify his dismissal.
The meaning of ‘reasonable grounds’ in the Code is that the grounds are ‘reasonable’ when viewed from the standpoint of what a reasonable person would conclude as grounds which are credible, sensible, logical or plausible; See also: Construction, Forestry, Mining and Energy Union v HWE Mining Pty Limited[2](‘HWE Mining’).
It is entirely unremarkable that Mr Kent concluded that he had reasonable grounds for believing the Applicant’s conduct was such as to justify instant dismissal. He had established that:
(a) verbal instructions had been provided to the mechanics that no mechanical work was to be done on Saturdays. In lieu the mechanics on duty would assist other staff by doing wheel alignments and other non-mechanical duties;
(b) the Applicant continued to work on Saturdays without the permission or knowledge of the Respondent. Mr Kent also uncovered that the Applicant sold tyres at cost price or below cost price, and either, did not charge for the work, did not record the cost of the cost of the work or did not put the work through the business; and
(c) the Applicant altered a wheel alignment report. It is clear that the Applicant altered the results of the wheel alignment report by hand.
From these circumstances, I am comfortably satisfied that Mr Kent, and the Respondent, had reasonable grounds to believe that the Applicant’s conduct was sufficiently serious to justify his immediate dismissal, without notice or warning, and there were reasonable grounds for the employer holding the belief. Given the above finding, it follows that Mr Kent had complied with the Code in respect to the summary dismissal of the Applicant.
While not relevant to the application of the Code, I note that the Applicant did in fact receive notice, and a disciplinary meeting was held on 7 November 2023, prior to his dismissal. Unfortunately, the Applicant did not avail himself of that opportunity to any reasonable extent.
Accordingly, as the dismissal was consistent with the Code, the Applicant was not unfairly dismissed for the purposes of s 385 of the Act, and the Commission has no jurisdiction to deal with the Application. It is unnecessary to make findings as to whether the Applicant’s dismissal was ‘harsh, unreasonable or unjust’ for the purposes of s 387 of the Act. The Application must be dismissed. Orders to that effect will issue simultaneously with this decision.
DEPUTY PRESIDENT
Appearances:
Mr Caslick (Respondents Representative)
Mr Kent (for the Respondent)
Hearing details:
23 February 2024.
Sydney.
In-person.
[1] (2012) 219 IR 128.
[2] [2011] FWA 8288.
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