Martin Cochrane v Ambrose Haulage Pty Ltd
[2015] FWC 838
•17 APRIL 2015
| [2015] FWC 838 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Martin Cochrane
v
Ambrose Haulage Pty Ltd
(U2014/15408)
COMMISSIONER SIMPSON | BRISBANE, 17 APRIL 2015 |
Application for relief from unfair dismissal - Respondent a Small Business Employer - Summary Dismissal - Respondent did not comply with Small Business Fair Dismissal Code - No valid reason for dismissal - Compensation Ordered.
[1] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Mr Martin Cochrane (“the Applicant”) who alleges that the termination of his employment with Ambrose Haulage Pty ltd (“the Respondent”) was unfair in accordance with the definition contained within s 385 of the Act.
Background
[2] The Applicant was employed by the Respondent, Ambrose Haulage Pty Ltd for the period 23 September 2013 to the 3 November 2014. A conciliation conference was conducted which was not successful in resolving the matter. At a directions hearing the Applicant and the Respondent was directed to file material on the both the jurisdictional issue on whether the Respondent was a small business employer, and the substantive application.
[3] An email was sent to the Fair Work Commission on 19 January 2014 by the Applicant requesting an order for the production of a range of material by both the Respondent and also from a telecommunications operator which he believed was directly related to his dismissal.
[4] On the filing of material it became evident that the Respondent’s position at the time of filing its Form 3 Response to the Application had changed. Whilst it initially claimed the Applicant failed to attend for work on 1 November 2014, it now accepted that the driver who should have contacted the Applicant in order for him to commence work did not do so. Further the Respondent accepted it failed to give the Applicant reasons for his dismissal at the time or to give him an opportunity to respond to any reasons. On the basis of the changed position of the Respondent I declined to issue the orders sought for production of documents by the Applicant as there was no longer a contest in relation to the issues that the documents if produced would have been relevant.
[5] The Applicant filed a considerable volume of material, much of which related to matters which were not directly related to the reasons relied upon by the Respondent to justify its decision to terminate the Applicant. The Respondent provided submissions and Mr Jamie Ambrose, who is the Director of the Respondent, provided a statement. In his witness statement Mr Ambrose said that he did not want to enter into a contest with the Applicant about the rights and wrongs of the termination of his employment only to say that he had the very firm belief that he was left with no alternative but to dismiss the Applicant due to the Applicants actions which in his belief were disrespectful to him, antagonistic toward his fellow employees and were having a negative impact on the business.
[6] After the filing of all the material the matter was listed for hearing on Friday 17 April 2015. At the hearing both parties were provided a further opportunity to say anything further they wished to in regard to the matter, and make any submissions in relation to compensation remedy if consideration of the matters in section 392 was required. In the main after being given the opportunity to raise any further matters both parties were content to rely on the material they had submitted. I proceed to deal with the matter on that basis.
Small Business Employer
[7] This issue of whether the Respondent is a small business employer needs to be resolved in order to determine whether the Small Business Code applies. Section 23 of the Act reads as follows:
23 Meaning of small business employer
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.
(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):
(a) the employee who is being dismissed or whose employment is being terminated; and
(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.
[8] The Applicant provided a schedule of employees titled “Ambrose claims that his company has only twelve employees” listing staff he thought worked for the Respondent at the time of this dismissal meaning the Respondent was not a small business.
[9] The Respondent rejected the Applicant’s list of employees on the basis that it did not reflect who was an employee at the time of termination, included on the list a person who was a contractor, a person who was a Director and not an employee, and a person who had been terminated at the time of the Applicant’s dismissal and re-hired for a short term in December 2014. The Respondent asserts it had 13 employees at the time of this dismissal. The Respondent provided a document to support this claim from accountant Pam Middleton.
[10] Looking at the documents provided by both parties, the names of people employed match, however their status in the company did not. It is my view that the Applicant would not have the same level of information on the specific nature of persons engaged by the Respondent and would not know the nature of the arrangements between those persons and the Respondent to the extent the Respondent does. On the basis of the material put before me by both parties the Respondents information is more likely to reflect the nature of the arrangements between it and persons engaged by it and on that basis I accept its submission that it had less than 15 employees at the time of termination and was therefore a small business employer at the time of termination.
Half Shaved Beard Issue
[11] Mr Ambrose said the Applicant was coming to work with a half shaved beard when delivering product to customers which he said showed a disregard for the business that employed him. Mr Ambrose said when he raised this with the Applicant, rather than trying to see Mr Ambrose’s point of view the Applicants only comment was “Where is your facial hair policy.”
Interaction with Other Employees
[12] Mr Ambrose said that on another occasion when he raised with the Applicant how he was interacting with other employees, again rather than attempting to see how this might impact upon the business the Applicants comment was “I’m here to make money not friends”.
Hole in Trousers
[13] Mr Ambrose raised an issue concerning an incident that he said occurred in his office concerning the Applicant showing him a hole in his trousers, and doing so in a manner that he believed was disrespectful. The Applicant maintained this was meant to be a humorous incident and not meant to cause offence. The Respondent did not take any action at the time, or warn the Applicant about the incident. I do not regard it as a significant event in determining the issue.
Decision to Terminate
[14] Mr Ambrose said that the final decision that led him to terminate the Applicants employment was his attitude and approach to undertaking his duties on the evening of 1 November 2014.
[15] Mr Ambrose does not dispute, and acknowledges that there was a failure on the part of another employee to make contact with the Applicant as required; in order for the Applicant to commence his driving shift that night, however Mr Ambrose says that the Applicant was aware that he was required to work that evening and Mr Ambrose said that he had confirmed that with him.
[16] Mr Ambrose said that he had presumed that the Applicant had prepared for this, including the fact that he had rested sufficiently that day so as to safely undertake his shift that evening. Mr Ambrose says that for the Applicant to text him that he was going to bed at 9.30pm that night was unreasonable in his view, and then threaten that he might forget to work the following day was again inappropriate.
[17] Mr Ambrose said that on Monday 3 November 2014, he sought advice and was told that he could terminate the Applicants employment provided he paid two weeks’ notice. Mr Ambrose said that later that day he caused a letter of termination to be sent to the Applicant.
Acknowledgement of Lack of Procedural Fairness
[18] Mr Ambrose says that he acknowledges that he failed to provide the Applicant with the reasons for his termination, and did not allow him an opportunity to respond to those reasons. Mr Ambrose says that he believes had he raised these concerns he would have been attacked or had some clever response back. Mr Ambrose says that he did not set out deliberately to do anything wrong, and he believes he had a valid reason for dismissing the Applicant.
Loss of Major Contract
[19] The Respondent says that since the dismissal of the Applicant the Respondent has lost a major contract and been forced to reduce the number of employees back to three employees. The Respondent said the number had risen back to seven but was three permanent employees.
The Legislation
[20] The termination of the Applicant was a summary dismissal; he was dismissed with no warning or notice of his dismissal. However after the summary termination the Respondent decided to pay an additional two weeks wages to the Applicant. The Small Business Fair Dismissal Code reads as follows:
“Summary Dismissal
It is fair for the employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employees 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.”
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.
[22] Section 387 of the Act set out a number of factors which the Commission must take into account in considering whether a dismissal was harsh, unjust or unreasonable. The first of those is whether there was a valid reason for the dismissal related to the person’s capacity or conduct.
[23] The Respondent argues that there was a valid reason for the dismissal of the Applicant based upon his conduct throughout the period of his employment. That behaviour of the Applicant is said to be with respect to his attitude toward other employees and his employer and also clients of the employer, and this gave the Respondent a valid reason to dismiss the applicant.
[24] The difficulty with this submission is that it has not been made at all clear by the Respondent that the behaviour that the Respondent saw and regarded as the offending behaviour of the Applicant was behaviour that would provide a valid reason for termination in the particular facts of this case. The Applicant was not clearly directed by Mr Ambrose not to wear his facial hair in the manner that he had been. It appears Mr Ambrose indicated to the Applicant he did not like it, but it was incumbent on him to direct the Applicant to do something, and for the Applicant to not do it, in order the Respondent to then rely on that matter as a basis for termination.
[25] Further in regard to the matter of the issue of the Applicants interaction with other employees, the evidence of misconduct again is not clear. It appears the Respondent had clear concerns about the manner in which the Applicant had interacted with other staff but never investigated the issue. In terms of interactions between himself and the Applicant, again there appears to have been no clear direction from the Respondent to the Applicant about the issue, or warning that his behaviour was unacceptable. In the circumstances I cannot be satisfied any of these issues provided a valid reason for termination.
[26] Finally there are the circumstances surrounding the incident that triggered the decision of Mr Ambrose to summarily dismiss the Applicant that being the claim that the Applicant sent him a text that he was going to bed at 9.30pm on the night of 1 November, and then threatened that he might forget to work the following day.
[27] The background to this situation was that the driver that was to handover to the Applicant had failed to contact the Applicant. That had been a system failure and the Applicant was frustrated given his own view that he had been receiving less beneficial shifts for some time, and further had been inconvenienced by having to stand ready to be prepared to work and then had simply not been contacted. Whilst the Applicant should not have reacted to the circumstances as he did, it is in the context of being a long distance driver who would reasonably have some expectations about certainty concerning when he will and will not be working, and the failure of the communication system led to frustration on his part. In my view it did not provide a valid reason for dismissal. It is clear the Respondent decided to terminate the Applicant when he was not fully apprised of the facts of what happened that night. The Applicant did not fail to attend work as was initially claimed by the Respondent.
[28] Having found there was no valid reason for termination, I also make the observation that whilst the Respondent protests that he was unhappy with the manner the Applicant had been conducting himself, the Applicant’s material disclosed that he also was unhappy with his treatment by the Respondent before the termination, particularly in regard to the manner in which work was being allocated and it appears to me the relationship between the Applicant and Mr Ambrose was becoming increasingly difficult and unstable. The nature of the text message sent by the Applicant to Mr Ambrose on the evening of 1 November is indicative of an employment relationship in decline.
[29] It is not disputed by the Respondent that the Applicant was not provided with a reason for his dismissal at the time of termination and it is not disputed that the Applicant was not afforded any opportunity to respond to the reasons for his dismissal.
[30] The Respondent never afforded the Applicant an opportunity to have a support person present at any discussions relating to the dismissal as the Respondent did not give the Applicant an opportunity to discuss the dismissal. The dismissal did not relate to unsatisfactory performance but misconduct and therefore s. 387(e) is not relevant.
[31] The Respondent is a small business and this would be likely to impact on the procedures followed in effecting the dismissal. The Respondent did not have a dedicated human resource management specialist or expertise in the enterprise and again this would be likely to impact on the procedures followed in effecting the dismissal.
[32] Having taken into account each of the considerations required by s. 387 I am satisfied the dismissal was harsh, unjust or unreasonable.
Remedy
[33] It is clear to me the relationship between Mr Ambrose the Director of the Respondent and the Applicant has broken down to such an extent that the relationship could not reasonably be expected to be able to be re-established. Further the Respondent is a small business employer who has lost a major contract and has significantly reduced its number of employees since the termination of the Applicant. In the circumstances reinstatement is inappropriate. Having found the dismissal was unfair but that reinstatement is inappropriate a compensation remedy is appropriate.
[34] The Act requires that an order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
[35] In determining an amount for the purposes of an order the FWC must take into account all the circumstances of the case including each of the elements of section 392.
[36] The Respondent has not submitted that an order for compensation would affect the viability of the employer’s enterprise. The Applicant worked for the Respondent for a period of 13 and half months. This is not a sufficiently long period to justify a substantial compensation order of itself.
[37] Given the strained relationship between the Applicant and Respondent, and also the significant reduction in the size of the Respondent’s workforce in the months after the Applicant’s termination I estimate the remuneration that the Applicant would have received, or would have been likely to receive, if he had not been dismissed when he was would have been no more than another 6 weeks. I am also persuaded that the relationship was unlikely to last for longer than that given the tone of communications between the Applicant and Mr Ambrose. On the Applicants own version of the nature of the text messages exchanged between himself and Mr Ambrose on 1 November 2014, which were attached to his originating application, the language on the Applicants part is strongly worded, strident and even contemplates the Applicant ending the employment relationship himself.
[38] On an average of 44 hours per week at $32 per hour I estimate the Applicant would have earned a further $8,448.
[39] The Applicant made a submission to the effect that he has been seeking to mitigate his loss. I make no deduction for failure to mitigate.
[40] As at the hearing date of 17 April 2015 the Applicant had not gained other employment and I make no further deduction on the basis of s.392(f). There are no other matters that I consider relevant for the purpose of assessing compensation. I make no further deduction on account of misconduct. I deduct the amount of $2,432 from the amount of $8,448 as the Applicant was paid that amount as notice pay at the time of termination arriving at a figure of $6,016.00.
[41] The amount of $6,016 does not exceed the compensation cap. I intend to issue an order at the same time as the issuing of this decision that the Respondent pay within 14 days to the Applicant the amount of $6,016 gross taxed according to law plus applicable superannuation.
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