Matthew Johnston v Wax Hed Inc Pty Ltd T/A Surf Toyota

[2014] FWC 1398

[2014] FWC 1398

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Matthew Johnston
v
Wax Hed Inc Pty Ltd T/A Surf Toyota
(U2013/12801)

COMMISSIONER CAMBRIDGE SYDNEY, 28 FEBRUARY 2014

Unfair dismissal - summary dismissal - loss of drivers licence not valid reason for summary dismissal - capacity for applicant to perform work for notice period - procedural deficiencies - harsh, unjust and unreasonable dismissal - compensation.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Sydney on 21 August 2013. The application was made by Matthew Gregory Johnston (the applicant) and the respondent employer is Wax Hed Inc Pty Ltd ABN: 46 869 641 461 trading as Surf Toyota (the employer).

[2] The application indicated that the date that the applicant’s dismissal took effect was 5 August 2013. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation and it has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted in Tweed Heads on 13 February 2014.

[4] At the Hearing, the applicant was represented by his father, Greg Johnston. The applicant was the only witness who provided evidence in support of the claim. The employer was represented by its Fixed Operations Manager, Michael Wilson, who also gave evidence as the only witness called on behalf of the employer.

Factual Background

[5] The applicant had worked for the employer for about three years and nine months. The applicant was employed in a position referred to as Spare Parts Storeman/Parts Interpreter. Relevantly, the work of the applicant included a component which involved some regular motor vehicle delivery driving.

[6] The employer conducts a new and used car sales and service operation known as Surf Toyota. The employer has approximately 39 employees.

[7] On the morning of Friday 2 August 2013, the applicant was caught by Police, driving at 45kms/hour over the speed limit and his driver’s licence was immediately suspended. The applicant telephoned the employer and advised that he could not proceed on to work as he had “lost his licence for speeding”. He managed to get to the workplace later in the morning and told the employer that he would take the rest of that day off so that he could seek to get his licence back for work purposes.

[8] The applicant was unable to obtain any form of conditional or concessionary driver’s licence arrangement for work purposes. On the afternoon of 2 August, the applicant informed the employer that he had been unsuccessful in his attempts to get the suspension of his driver’s licence altered in any way.

[9] On Monday 5 August, the applicant commenced work at about 7:50 am. At about 9:15 am the employer’s Manager, Mr Wilson, met with the applicant and told him that without a valid driver’s licence the applicant could not fulfil a “major part” of his role and therefore he was dismissed from employment. Mr Wilson told the applicant that he would be dismissed that day but offered the applicant to continue to work for the remainder of that day. The applicant refused the offer of work for the remainder of the day as he said he “was in no shape to work after being told I had lost my job.”

[10] The applicant was paid his accumulated annual leave entitlements, together with payment for one day of work.

The Case for the Applicant

[11] The applicant’s father submitted that it was unfair to have dismissed the applicant without notice. Further, it was submitted that the driving component of the applicant’s job could have been covered by other employees as it involved only about 30 minutes to an hour on a daily basis, plus a monthly three hour trip to Ballina.

[12] The applicant sought payment of three weeks wages in lieu of notice as prescribed by the National Employment Standards as compensation for his unfair dismissal.

The Case for the Employer

[13] The employer was represented by Mr Wilson who submitted that the dismissal of the applicant was not unfair.

[14] Mr Wilson said that the employer had not paid the applicant notice because it had been advised by the NSW Motor Traders Association that because the applicant had lost his driver’s licence he would be unable to work during the three week notice period and therefore the applicant was not entitled to any payment in lieu of notice.

Consideration

[15] Section 385 of the Act stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:

(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.

[16] In this case, there was no dispute that the matter was confined to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

387 (a) - Valid Reason for the Dismissal Related to Capacity or Conduct

[17] It has been unfortunate that this matter has proceeded to Hearing and a requirement for determination. The evidence has established that the loss of a driver’s licence for a six month period was probably valid reason for the dismissal of the applicant with notice. Regrettably, the employer acted upon misconceived advice that the actions of the applicant involving the loss of his driver’s licence could represent valid reason for summary dismissal.

[18] The common law and various applicable statutory regimes, including the Act and its predecessor legislation, have for many decades, distinguished summary dismissal from dismissal with notice. Any consideration as to whether there was a valid reason for dismissal should logically have regard for the summary nature of the dismissal. In simple terms, what may be a valid reason for a dismissal with notice, may not be a valid reason to dismiss someone summarily.

[19] Any employer should be very cautious about invoking a summary dismissal, as opposed to dismissal with the required notice. In this regard, it is relevant to repeat an extract from the Judgement of Mr Justice Hungerford in the case of Pastrycooks Employees, Biscuit Makers Employee & Flour and Sugar Goods Workers Union (NSW) v. Gartrell White (No 3), (Gartrell White)  1:

“The right of an employer to summarily dismiss an employee without notice is qualified by the employee inter alia having committed an act of misconduct; thus, to be able to rely upon the right, and to pay the employee up to the time of dismissal only rather than terminate by notice or payment in lieu of notice, the employer must not only allege misconduct but must also prove it.”  2

[20] The following further extract from the same Judgement is relevant:

“...the test comes down to the question whether the employee's conduct has been so inconsistent with his duties under the employment contract that it strikes down any reasonable suggestion that the employer-employee relationship can be continued in the future.”  3

[21] Much of the recent case law on the question of what conduct of an employee may justify summary dismissal, has developed from a line of authority which, for present purposes, can be conveniently traced back to the case of Laws v. London Chronicle (Indicator Newspapers) Limited. 4 Although this was an English case from 1959, it established the concept that any conduct which is relied upon to provide basis for summary dismissal must "... have the quality that it is “wilful”: it does (in other words) connote a deliberate flouting of the essential contractual conditions." 5

[22] In this instance, the employer acted upon advice which would appear to be contrary to well established legal principle. Even if there was some proper foundation to support the prospect that no payment in lieu of notice was required in circumstances where the applicant was unable to perform work during the notice period, it was clear that for a three week period at least, rearrangements could have been made to accommodate the applicant not performing the driving component of his position.

[23] The practical rearrangements that could have accommodated the work of the applicant for the three week notice period were recognised in the employer’s response document, wherein it was stated: “Whilst the other members of the parts Department can and do perform delivery duties for short periods of time, providing this as a permanent solution would not favour the business only Mr Johnston.” 6

[24] Consequently, there was not a valid reason for the summary dismissal of the applicant. However, as was accepted by the applicant, there was valid reason for dismissal with notice.

387 (b) - Notification of Reason for Dismissal

[25] It appeared that the employer provided only verbal notification of the reason for the applicant's dismissal.

387 (c) - Opportunity to Respond to any Reason Related to Capacity or Conduct

[26] The employer called the applicant into the meeting on Monday 5 August and advised of its decision to terminate employment by day’s end. In such circumstances, the employer did not provide an opportunity for the applicant to respond to any prospects, short or long term, which might accommodate the loss of his driver’s licence.

387 (d) - Unreasonable Refusal to Allow a Support Person to Assist

[27] As an additional aspect of adoption of an erroneous procedure, the employer arranged for a meeting at which it would advise of termination of employment, without offering the applicant a support person.

387 (e) - Warning about Unsatisfactory Performance

[28] This factor has no relevance in this instance.

387 (f) - Size of Enterprise Likely to Impact on Procedures

[29] I have been cognisant that the employer’s operation is of a small to medium size. The employer’s business operation may benefit from a review of its employee management practices.

387 (g) - Absence of Management Specialists or Expertise Likely to Impact on Procedures

[30] It appeared that the employer did not have dedicated employee relations management specialists and I have had regard for the consequential impact on the poor procedures that were adopted.

387 (h) - Other Relevant Matters

[31] There were no other relevant matters which have required consideration.

Conclusion

[32] The applicant was summarily dismissed because he had his driver’s licence suspended for six months. The driving component of the applicant’s employment could be reasonably circumvented in the short term but not for a period of six months. The applicant did not commit any serious and wilful misconduct such as would be necessary to justify summary dismissal.

[33] Consequently, the substantive reason for the applicant's summary dismissal cannot be held to be valid.

[34] The procedure that the employer adopted in dealing with the employment issues which arose from the suspension of the applicant’s driver’s licence was, regrettably, deficient.

[35] It was very unfortunate that the employer acted upon, what has appeared to be, misconceived or simply erroneous advice. However, that is a matter between the employer and its advisor.

Remedy

[36] The applicant has not sought reinstatement as remedy for his unfair dismissal. The applicant, to his credit, has conceded that the employer could not have been expected to make accommodation for the loss of the driving component of his position for an extended period. The applicant’s complaint was confined to the employer’s refusal to pay an amount in lieu of three weeks’ notice, as an entitlement arising under the National Employment Standards.

[37] The applicant sought remedy for his unfair dismissal in the form of payment of an amount equivalent to the three weeks’ notice.

[38] Consequently, for the reasons stated above, I find that the dismissal of the applicant was unfair. In the circumstances, I am prepared to make Orders for compensation as sought by the applicant. That amount is $2,113.80. Accordingly separate Orders [PR548170] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Mr G Johnston on behalf of the applicant;

Mr M Wilson on behalf of the employer.

Hearing details:

2014.

Tweed Heads:

February, 13.

 1   Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No. 3), Industrial Commission of NSW, [Hungerford J], 35IR @ page 70.

 2   Ibid @ page 84.

 3   Ibid @ page 74.

 4   1 WLR [1959] @ 698.

 5   Ibid @ 701.

 6   Form F3 @ paragraph 3.1.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR548169>