Mr Adrian Ward v Club Resort Holdings Pty Ltd trading as RACV Royal Pines Resort

[2015] FWC 747

[2015] FWC 747

FAIR WORK COMMISSION

DECISION

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

Mr Adrian Ward
v
Club Resort Holdings Pty Ltd trading as RACV Royal Pines Resort
(U2014/10387)

DEPUTY PRESIDENT ASBURY BRISBANE, 3 JUNE 2015

Application for relief from unfair dismissal.

Background

[1] Mr Adrian Ward applies under s. 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of his dismissal by Club Resort Holdings Pty Ltd trading as RACV Royal Pines Resort (RACV). RACV has 3000 employees across Australia, and in addition to operating a retail network and an Emergency Roadside Assistance service in Victoria, operates various resorts across Victoria, Tasmania and Queensland, including Royal Pines Resort. Mr Ward commenced employment with RACV on 16 February 2012 and at the time of his dismissal held the position of Rooms Division Manager at the Royal Pines Resort (the Resort).

[2] As a Manager of RACV, Mr Ward was given a “Club Card” account which was in effect an internal debit card onto which RACV would credit “bonus” amounts of money. Mr Ward was permitted to use the Club Card to pay for expenses incurred at RACV’s facilities by himself, his family or his friends.

[3] On a date not identifiable from the evidence (other than that it was on a weekend prior to 24 June 2014) Mr Ward was working at the Resort. Mr Ward’s wife, their children and his wife’s friend came to the Resort and used spa and food/beverage facilities for which a cost was incurred. Mr Ward opened an account known as a Posting Master Account on his own behalf to pay for the expenses incurred by his wife, her friend and the children, and later used his Club Card to settle that account. The expenses were charged to Mr Ward’s Club Account at full cost and there is no suggestion that any item was discounted or not paid for.

[4] When this conduct was discovered by RACV, Mr Ward was summarily dismissed on 24 June 2014 for serious misconduct said to involve breaches of the RACV Code of Conduct. The reason for the dismissal was set out in a letter dated 26 June 2014, which stated that Mr Ward had made a number of transactions relating to personal expenditure against a Posting Master Account and/or his own Club Account. This was termed by RACV as Mr Ward “transacting on his own account”, an activity contrary to the RACV Code of Conduct. It was further determined by RACV that Mr Ward had not made the transactions by mistake. 1

[5] Mr Ward asserts that his dismissal was unfair on the grounds that it was harsh, unjust and unreasonable. Mr Ward also asserts that his conduct was not serious misconduct for reasons including that he was not aware of the relevant provisions of the Code of Conduct or that he had breached those provisions. Further, Mr Ward asserts that he was not provided with assistance by his manager to understand the Code of Conduct or to ensure that his behaviour was consistent with it as required by the terms of the Code of Conduct.

[6] The application was made within the period required in subsection 394(2) of the Act. Mr Ward is a person protected from unfair dismissal as defined in s.382 of the Act.  RACV is not a small business and the dismissal was not a case of genuine redundancy.    The matter was dealt with by way of a hearing, as it was considered that this was the appropriate course, having taken into account the matters set out in s.399 of the Act and the views of the parties.

[7] Both parties sought permission to be represented by lawyers pursuant to s. 596 of the Act. Permission was granted on the basis that I was satisfied that representation would allow the matter to be dealt with more efficiently taking into account its complexity and that no issue of unfairness arose. Mr Ward was represented by Mr S McSwan, Solicitor of McKays Solicitors. RACV was represented by Mr J Dwyer of Counsel.

[8] Mr Ward gave evidence on his own behalf. 2 Evidence on behalf of RACV was given by Mr John Morris, General Manager RACV Resorts and Mr Eddie Ross, Food and Beverage Manager Royal Pines Resort.

Relevant Legislation

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(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.”

[9] The onus rests with the respondent to establish that the misconduct as alleged took place and it constituted a valid reason for dismissal: Culpeper v Intercontinental Ship Management Pty Ltd. 3 A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”4 The reason for termination must also be defensible or justifiable on an objective analysis of the relevant facts,5 and the validity is judged by reference to the Tribunal’s assessment of the factual circumstances as to what the employee is capable of doing or has done.6 

[10] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable.  A dismissal may be:

Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;

Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or

Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer. 7

Evidence

Events leading to Mr Ward’s dismissal

[11] RACV has a Code of Conduct said to set out the principles that guide and direct all employees on the accepted and expected standards of behaviour to be displayed at work. It is not in dispute that at the point Mr Ward was dismissed, RACV’s Code of Conduct included the following terms:

“Ethical Behaviour

…

Ensure that you never provide or maintain products or services for, or complete or approve, transactions on behalf of yourself, your family members, personal friends or relatives in the course of your work.

…

What if my conduct as an employee is considered inappropriate or in breach of the Code?

Your Manager or team leader will work with you to ensure you understand RACV’s values and that your behaviours are consistent with RACV’s values.

There is a process your manager or team leader will follow, which in most cases will start with an informal discussion with you to raise your awareness of the issue.

All employees should be aware that serious, wilful or repeated breaches of this Code could lead to dismissal.” 8

[12] The Code of Conduct also includes a provision stating that on commencement of employment employees must complete a declaration to show understanding of the Code of Conduct. It is not in dispute that that Code of Conduct was in effect during the period of Mr Ward’s employment. It is also not in dispute that Mr Ward’s contract of employment included the following term:

“Unauthorised Transactions/Operations

During employment or at any time after employment ceases, employees are not permitted to:

● alter another person’s records to provide an illegal benefit to that person or knowingly falsify records and/or breach RACV Royal Pines Resort policies and procedures;
● alter or amend records or receipt payments to RACV Royal Pines Resort for themselves and/or immediate family members and partners;

…

Breaches of this provision make an employee liable to disciplinary action including dismissal and/or legal proceedings for damages.” 9

[13] In his position as Rooms Division Manager, Mr Ward’s responsibilities included:

“...Reception, Night Audit, Concierge, Reservations, Kids Club, Housekeeping, PABX, the Shuttle Bus service and the Lobby Shop...This role is accountable for the effective management of the Rooms Division department and the adherence to RACV standards and procedures.” 10.

[14] Mr Ward said that the day on which the events leading to his dismissal occurred, was a day when he was not required to work but had come to work to help out because it was busy, and it was expected by RACV that he would assist. Mr Ward’s wife had a friend visiting from Western Australia and they had arranged to go to the spa at the Resort while he was working. Mr Ward’s children were also at the Resort with his wife and her friend and were in the Resort Café. Mr Ward said that he was working on the front desk and could not walk around to pay charges for spa treatments or food from the café on behalf of his wife, her friend and the children as the charges were incurred.

[15] To facilitate the payment of those charges, Mr Ward opened a Posting Master Account on his own behalf. According to Mr Ward, the Posting Master Account was able to be accessed by designated staff of RACV including accounts, conference, duty managers and senior managers, who were authorised to charge expenses to and from a Posting Master Account.

[16] The charges incurred by Mr Ward’s wife, her friend and the children amounted to some $250. Those charges were placed on Mr Ward’s Posting Master Account by other RACV staff and were made at the usual RACV rate. 11 Mr Ward stated that it was “not unusual” for staff who were going to incur multiple charges, to have a Posting Master account.

[17] At a time subsequent to the charges being incurred, which Mr Ward said in his written statement was “about a week” later, Mr Ward cleared the expenses by debiting them against his Club Card, using the RACV’s computer system. Mr Ward said that his Club Card had a balance of over $300 at the time and when he did this it did not occur to him to seek the approval of another manager because:

a. There was no personal benefit to Mr Ward at all.
b. The clearing across the accounts was simply a mechanical step.
c. The expenses had already been entered to the PM account by other staff of the employer.
d. There was no additional expense or cost incurred to the company.
e. The details of the transfer were clearly visible to the accounts [team] when they undertook a review of the accounts and transactions. It was entirely transparent. 12

[18] Mr Ward also said that he charged the expenses to his Club Card at the full rate without any reduction in value or cancellation of any item. The effect of charging the Posting Master Account expenses to Mr Ward’s Club Card was to reduce the Posting Master Account to nil and to reduce the Club Card balance by the amount of the charges. Mr Ward said that if he had not done this the charges would have stayed on the Posting Master Account until he was questioned about them by one of the duty managers, receptionists or hotel managers.

[19] Mr Ward maintained that had he been aware that he needed to seek the approval of another manager then he would have done so. Further, Mr Ward said that it would not have been difficult for him to arrange for another manager to have cleared the account as he interacted with other managers on a daily basis.

[20] While acknowledging that his employment contract included a provision that he was not to breach Company policies or procedures or receive payments to RACV Royal Pines for himself or his immediate family members or partner, Mr Ward stated that he had not re-read his employment contract during the period of his employment and had forgotten that those terms existed. Mr Ward also said that even had he known those terms existed, he would not have understood that his conduct in opening the Posting Master Account and clearing it against his Club Card, breached any of the terms of his employment contract.

[21] In relation to RACV’s Code of Conduct, Mr Ward said that he may have received the Code of Conduct and signed a declaration indicating his understanding of its terms at an induction prior to commencing employment. However, Mr Ward also said that he could not remember whether or not this had occurred. Further, Mr Ward said that he received a large amount of documentation at the induction prior to commencing employment and could not remember details relating to the Code of Conduct or whether he had signed the declaration.

[22] Mr Ward also said that he did not recall being given training on the Code of Conduct but that this might have occurred as part of his induction. Mr Ward stated that he was not given any refresher training in Company policies and other documents throughout the course of his employment. Further, Mr Ward said that he had been informed that since his dismissal, continuing employees of RACV had been given training and RACV had implemented a policy in relation to the operation of and responsibility for Posting Master Accounts, the clearing of those Accounts and the process involved. This training was not given to Mr Ward.

[23] Under cross-examination, Mr Ward accepted that in addition to whatever training he may have had on the Code of Conduct and/or RACV’s policies, his employment contract included a prohibition on the type of behaviour that he had engaged in. Mr Ward agreed that even if he had not been trained in relation to the prohibition on transacting on his own account, that there were dangers associated this practice, particularly in the context of a Resort like Royal Pines where there were a number of different outlets including a pool, spa, restaurant and coffee shop. Mr Ward also agreed that there was a need to contain and protect transactions so that free or discounted services could not be provided by employees to their family and friends at a whim.

[24] In response to the proposition that he did not dispute that he acted contrary to a condition of his employment and the RACV Code of Conduct by transacting on behalf of his wife and her friend, Mr Ward said:

“I signed off on it, yes, but that was because I had forgotten about this. I was unaware of it. If I had known that it was contrary – yes”. 13

[25] Notwithstanding these concessions, Mr Ward did not depart from his contention that at the time he made the transactions he was not aware of the terms of his contract of employment or the Code of Conduct and that had he been aware of these matters he would not have engaged in the conduct that lead to his dismissal.

[26] In response to a question from the Commission, Mr Ward said that his wife could not charge items to his Club Card without him being present as staff at the various outlets at the Resort needed an account to charge items to, and his wife could not just turn up and say that she wished to charge items to his Club Card. Mr Ward said that he opened the Posting Master Account to remove the need for him to stop work and go to the spa and restaurant to charge items to the Club Card as the charges were incurred.

[27] Mr Morris said in his evidence that it is a standard fundamental rule in all resorts and hotels in Australia and overseas that staff cannot open a Posting Master Account on their own behalf and transact on that account. A procedure whereby a staff member gets another manager or appropriately trained staff member to make a transaction on his or her account, is standard in the industry. All employees are trained in the Code of Conduct as part of their induction training and are provided with a copy when they commence employment. RACV did not tender evidence that Mr Ward received the Code of Conduct; signed an acknowledgement that this had occurred or that Mr Ward had otherwise confirmed that he had read and understood the Code.

[28] Mr Morris also pointed to the responsibilities of Mr Ward’s position in relation to ensuring that policies and procedures are carried out in accordance with Company and Departmental policy and reviewing and updating policy and procedure manuals to ensure currency of operations throughout the Rooms Division. Further, Mr Morris said that Mr Ward’s role as Rooms Division Manager included training his team in all policies, procedures and responsibilities of Posting Master and Club Accounts.

[29] According to Mr Morris’ statement, on the day that the events resulting in Mr Ward’s dismissal occurred, Mr Ward was working as the Manager on Duty and as such was free to move around the Resort and monitor guest and staff activity. There was no barrier to Mr Ward paying the expenses for his family as they were incurred. Further, Mr Morris said that Mr Ward was staying in the Resort at that time to perform the role of weekend Duty Manager. Mr Ward’s family could have charged items such as food and beverages to Mr Ward’s room and he could have paid them on check out.

[30] Under cross-examination, Mr Morris agreed that it was other employees and not Mr Ward who posted charges to the Posting Master Account opened by Mr Ward. Further, Mr Morris agreed that there was no discount for any of the charges and that Mr Ward did not adopt a course of conduct to obtain a discount or seek to confuse or hide any information about the expenses posted to that account.

[31] Mr Morris maintained that for Mr Ward to have opened a Posting Master Account on his own behalf was “a bit like authorising his own holiday”. Such a practice involved transacting on Mr Ward’s own account and is open to abuse. Mr Ward’s conduct in opening the Posting Master Account was not a question of him gaining a benefit, but rather, was a question of Mr Ward engaging in the fundamentally wrong practice of operating on his own account.

[32] Mr Morris said that he was not aware that Mr Ward was not staying on the property that weekend or that he was not the Duty Manager on the day in question. This information did not change Mr Morris’ view, as it is a fundamental rule in hospitality that employees should not transact on their own account. In response to a question as to what Mr Ward should have done in the circumstances, Mr Morris said that the charges incurred by Mr Ward’s wife and family should have been made directly to his Club Card or he should have asked another staff member to open a Posting Master Account for him and then had that staff member undertake the transaction which cleared the Posting Master Account against Mr Ward’s Club Card.

[33] Mr Morris said that he understood that Mr Ward did not want to follow his wife around the Resort paying charges as they were incurred. However, Mr Morris maintained that everyone would have known Mr Ward’s wife and that Mr Ward could have given his wife his Club Card to use directly and that if any issue arose the staff could have telephoned Mr Ward.

[34] Mr Morris also said that he was not aware of whether Mr Ward was given training on posting to and clearing expenses from Club Card and Posting Master Accounts or as to whether his wife could use his Club Card. Mr Morris agreed that after Mr Ward’s dismissal, retraining of employees in posting and clearing expenses with respect to Posting Master accounts and Club Cards was undertaken. Mr Morris also confirmed that a document entitled “RACV Cub and Resorts Hospitality Systems User Agreement” was introduced after Mr Ward ceased employment, as part of the retraining of staff in the Rooms Division.

[35] A notice to produce was issued by the Commission to RACV at the request of Mr Ward in relation to certain documents. The documents ordered to be produced included:

● Workplace policy or procedure about the clearing of PM accounts and Club Card accounts, given to Mr ward at the commencement of his employment, or following;
● Documents pertaining to training about the clearing of PM accounts and Club Card accounts, given to Mr Ward at the commencement of his employment or following;
● RACV User Agreement signed by Mr Ward;
● Documents pertaining to training given to Mr Ward about the RACV Systems User Agreement; and
● Documents pertaining to training of employees at RACV after the cessation of Mr Ward’s employment about the Systems User Agreement.

[36] RACV produced a number of documents, none of which confirmed receipt or acknowledgement of the Code of Conduct by Mr Ward. The documents also included an RACV Clubs and Resorts User Agreement including the following terms of use:

“i. All use of RACV Club & Resorts hospitality systems must be in accordance with the RACV Code of Conduct policy.

ii. All transactions must be made under own user login, and passwords must not be shared with any other person.

iii. Users must NOT transact on their own accounts or accounts of family members/relatives/friends, including but not limited to:

- Create their own house account
- Create their own reservation at any RACV property
- Check-in or check-out their own reservation at any RACV property
- Make any adjustments or postings on their own account
- Transact in or to their own Club Member account including payments, credits or surcharges
- Adjust their Club Member status
- Make any amendments to their RACV personal details via RACV Hospitality Systems

iv. Any amendments to RACV personal details must be made through the following methods:

1. Calling RACV
2. Employee Kiosk
3. My Member Portal

v. All expenses incurred by the user or the user’s family members/relatives/friends must be settled at the time of transaction with cash, credit card, EFTPOS, RACV Club member charge card or RACV Gift Card.”

[37] This was said to be a document given to staff after Mr Ward ceased employment. The document includes an area for staff to sign, indicating that they have read, understood and accept the terms of use set out in the document (extracted above).

The dismissal process

[38] Mr Ward’s version of the dismissal process was as follows. On the morning of 24 June 2014, Mr Ward attended for work and was carrying out his normal duties. He received an email from Mr Morris asking him to attend a meeting later that day about Posting Master Accounts. To the best of Mr Ward’s recollection, the email did not explain the purpose of the meeting; suggest that he should have a support person; or that the meeting was for investigation of his conduct or to take disciplinary action against him.

[39] Upon arriving at the meeting at 12.30 pm, Mr Ward said that he was surprised to find that Mr Morris was present along with the Food and Beverage Manager Mr Ross and a Human Resource person (Mr Paul Harris) who attended by telephone. At the outset of the meeting, Mr Morris stated that Mr Ward had breached the Code of Conduct and asked him to explain the breach. When Mr Ward requested an explanation of the alleged breach, Mr Morris told him that he had charged off his own account.

[40] Mr Ward said that he stated to Mr Morris that he had done this and that charges while his family visited him during working hours, such as spa treatments, coffee and cakes were charged to an account and then paid by him later. This had been done to ensure that all charges were paid in full and this was clear. Mr Ward also said that he did not see the problem with this and he found it difficult to understand.

[41] Mr Morris maintained that Mr Ward had breached the Code of Conduct and read parts of the Code to Mr Ward. After reading the Code to Mr Ward, Mr Morris stated that he had violated the Code and his conduct was a serious breach for which he was instantly dismissed.

[42] Mr Ward stated that he had made an honest mistake and that he had not engaged in serious misconduct. According to Mr Ward, no elaboration was sought on any of his answers and he did not receive a proper explanation of why his conduct was said to have breached the Code of Conduct or his employment contract.

[43] Mr Ward said that the meeting caught him by surprise and because he was not informed of the purpose of the meeting he did not consider whether he should ask for a support person. As the meeting progressed, Mr Ward did not think to ask for a support person. According to Mr Ward, the way in which the meeting was conducted denied him the opportunity to have a support person present and to properly respond to the allegations. In particular Mr Ward asserted that no consideration was given to whether he had received any benefit from the transactions or whether he had been properly trained in relation to the clearing of his account to his Club Card.

[44] Mr Ward also said that when Mr Ross escorted him to the lift after the meeting, Mr Ross stated that he did not understand what had happened and that he could not see how Mr Ward’s conduct was deemed to be serious misconduct justifying dismissal.

[45] Under cross-examination, Mr Ward maintained that the email advising him of the meeting on 24 June 2014 did not specify that the topic for discussion was his own Posting Master Account or Club Card. Mr Ward said that he understood that there had been a previous issue with a staff member in the reservations department who had been posting against her own account and clearing it herself. Mr Ward was only aware of this, five days before the meeting of 24 June and was not involved in disciplining the employee concerned. It was put to Mr Ward that when he saw what happened to this employee he could have realised that he had done the same thing and taken action to clear it up by volunteering information to Mr Morris. Mr Ward maintained that he did not realise that his actions were contrary to the Code of Conduct.

[46] Mr Ward agreed that when he came to the meeting on 24 June 2014, he was immediately informed that the meeting was about his conduct and the allegations were put to him. Mr Ward agreed that he had not disputed that he engaged in the behaviour but had stated that he could not see what was wrong with the behaviour and did not know that it breached the Code of Conduct until Mr Morris read the relevant provision to him.

[47] Mr Morris said that during the days prior to the meeting with Mr Ward it had come to his attention that some of the Rooms Division Staff may have been making transactions on their own accounts. An investigation had revealed that Mr Ward had made transactions on a Posting Master Account that he had created for himself.

[48] In his written statement, Mr Morris said that at the meeting of 24 June 2014 he asked Mr Ward whether he had made transactions on his own Club Card and Mr Ward responded by saying: “Probably, I am not sure, why?”. Mr Morris then asked Mr Ward whether he had opened a Posting Master Account for himself and made transactions on that account. Mr Ward responded by saying that he had done this to separate his family’s food from his weekend Manager On Duty shift. Mr Morris said that there was a discussion about the fact that the concern was not the reasons behind the transactions but the fact that Mr Ward was making the transactions on his own Club Card.

[49] According to Mr Morris, Mr Ward claimed not to know this was inappropriate. Mr Morris responded by reading the relevant section from the RACV Code of Conduct that prohibits staff making transactions on their own card/account and setting up Posting Master Accounts for their own use. Mr Morris then advised Mr Ward that a breach of the Code meant instant dismissal and that he was to immediately leave the premises. Mr Ward again stated that he had not done anything wrong and that his dismissal was too harsh. When Mr Ward appealed to Mr Harris, Mr Harris confirmed the dismissal.

[50] Mr Ross concurred with Mr Morris’ version of the meeting. Mr Ross also agreed that he stated to Mr Ward that he did not understand why Mr Ward had been dismissed but said that he made this comment because he was in an awkward position when Mr Ward kept stating that his dismissal was “so unfair”. Mr Ross also said that in his role with RACV he was not required to have an understanding about Posting Master Accounts and had never operated one.

Mr Ward’s employment history

[51] In relation to the period of his employment, Mr Ward said that he was responsible for a number of matters in addition to his usual tasks, including a soft refurbishment of guest rooms, setting up of a new lobby shop and organising and co-ordinating tenders for the Resort’s guest shuttle service. In addition, changes to the Resort layout and the location of his team meant that Mr Ward was required to spend additional time on the front desk. These matters lead to greater difficulty for Mr Ward to efficiently perform all of his daily tasks.

[52] Mr Ward received a first warning letter on 10 April 2014. That warning was in relation to what were said to be ongoing issues about Mr Ward’s performance, brought to a head by a failure to communicate with staff and guests in relation to lift renovations. The letter also asserted that issues had been raised with Mr Ward at previous meetings including communication, management of staff and activities in his division, planning and leadership.

[53] The first warning letter records that Mr Ward asserted that he did not have sufficient time to undertake all activities required of him because he spent too much time on the reception desk and because of a lack of staff to support him. The letter records that this response was not accepted and set out expectations and a monitoring process of fortnightly meetings with Mr Morris.

[54] The first warning letter relevantly states:

“I refer to previous meetings we have had at which I have outlined my concerns over a number of performance issues. My ongoing concerns have been brought to a head over the lift works in the lobby this week. Once again, there was a lack of communication – both to staff and to guests which has caused a lot of frustration to both. More specifically:-

● Arriving guests were not contacted about the lift work until work had actually started in this area.
● On line channels were not informed until after the work had started.
● No signage was prepared for the lists or the lift wells.
● No directional or advisory signage was prepared for the lobby until after the work had started.
● No advance communication sent to staff advising of the lift work and how guests would have their luggage taken to and from their rooms and the car park.

The following issues were raised with you in previous meetings

● Lack of regular communication with staff
● Lack of regular, minuted meetings with Jani King despite directives in this regard.
● Lack of involvement in the financial output of Rooms Division as shown by financial spreadsheets not being updated regularly
● Lack of involvement in rostering and inconsistency in this area
● Not reviewing or analysing the monthly Profit and Loss report
● Lack of leadership
● Dirty back of house lift well areas
● Lack of planning for periods when there is large guest movements
● No apparent change since the last discussion regarding performance

You were provided with the opportunity to respond to this and other issues raised. In response you advised that:

● You felt that you did not have enough time in your day to manage properly and that your operational time impacted your effectiveness as a manger
● You have to spend too much time on the Reception desk which again impacts your effectiveness
● You felt that you do not have enough staff to support your department

These responses were not considered to be satisfactory.” 14

[55] Mr Ward acknowledged that the communication issues raised may have had substance but stated that he had requested to be involved in the weekly “impact meetings” so that he could know of issues in advance. As to the communication issue involving the lifts, Mr Ward stated that previous work on the lifts had been communicated by the Property Services Manager and Mr Ward expected that this would occur again. Mr Ward states that he was only informed this was his responsibility after the events in question.

[56] Mr Ward was issued a second written warning on 15 May 2014. That warning stated, in part:

“The following issues were raised with you at our meeting on 14th May 2014.

● The loss of 350+ pool towels in less than 6 months
● A lack of management of pool towel systems
● The protracted shuttle bus tender renegotiation & poor communication with the successful tenderer.
● The fact that despite numerous instances of Jani King providing rooms that are not cleaned to an acceptable standard, payment has only been withheld for one room.

You were provided with the opportunity to respond to the issues raised. In response you advised that:

● You thought your performance had improved
● You agreed that you need to manage your time better but felt that you were time poor
● Your operational responsibility each day hampered your ability to perform other tasks” 15

[57] The letter went on to conclude that Mr Ward’s responses were not accepted and that a second written warning would be issued. Meetings were scheduled between Mr Ward and Mr Morris for the next two months for Mr Ward’s performance to be reviewed. The letter concluded by stating that failure by Mr Ward to address these issues could result in further disciplinary action that may include terminating his employment.

[58] Mr Ward agreed that in the period between the first and second warnings he had met with the General Manager, Mr Morris, “approximately” every two weeks but did not accept that during those meetings he was further counselled that his performance was not to a satisfactory standard.

[59] In response to the specific issue regarding the towels, Mr Ward stated that RACV operated on an honesty system and that the issue had not been brought up with him prior to the warning of 15 May 2014. Similarly, in relation to the shuttle bus tender, Mr Ward stated that he lacked knowledge in relation to tenders and this contributed to the delay. Generally, Mr Ward conceded that RACV had raised some issues with him during informal discussions but maintained that these were not formal discussions. 16 Notwithstanding this, Mr Ward agreed that the conduct outlined in these warnings was serious.17

Events following the dismissal

[60] Following dismissal, Mr Ward states that he has made efforts to gain alternative employment. Mr Ward has “registered” with SEEK, a job applications website, and has attended an interview. Mr Ward states however that the fact of his dismissal for serious misconduct has affected his ability to gain alternate employment. Mr Ward conceded that he hadn’t applied for other work or had another interview, other than the one position that he gave evidence about. 18 Mr Ward accepted that Mr Ross referred him to a position in Canberra and gave him the number for the recruiter in relation to that position. Mr Ward did not contact that recruiter.19

[61] Mr Ward states that most of the jobs within his area of expertise would involve relocating his family to another state. Mr Ward has purchased a house and has three children who are now in school. Relocation is not an option that he is considering.

[62] Mr Ward also states that but for his dismissal he would have stayed with RACV for “as long as possible”. In this regard Mr Ward said that he did not have another position to go to; his family had settled into the Gold Coast area; he was at the time the main income earner; and positions of his level are difficult to obtain on the Gold Coast. Mr Ward states that “it is reasonable to expect” that he would have remained in his position with RACV for no less than 18 months, or at least, no less than 12 months.

[63] In his supplementary evidence to the Commission, Mr Ward stated that he and his wife purchased a small business - an indoor children’s play centre. The purchase of this business was made against borrowings on their home. Mr Ward commenced operating this business on 9 October 2014.

[64] Mr Ward maintained that despite the purchase of this business he was still looking for employment and had maintained his registration with SEEK but conceded that he had not made any applications for employment or attended any interviews. 20

Submissions

[65] Mr Ward submits that the conduct for which he was dismissed was not serious misconduct because it was not wilful or deliberate, in the sense that he did not know it was in breach of RACV’s code of conduct. Mr Ward also submits that the conduct was not in any event a breach of the code of conduct and accordingly was not inconsistent with the employment relationship continuing.

[66] Mr Ward further submits that if the conduct for which he was dismissed constituted a breach of RACV’s Code of Conduct, it was an innocent breach, to which RACV contributed by failing to provide training or instruction, and that at most he made a error of judgment which did not justify summary dismissal. In addition Mr Ward submits that RACV had already decided to terminate his employment prior to any opportunity to respond to the allegations.

[67] RACV submitted that Mr Ward has previously been issued with written warnings in relation to his performance; being 10 April and 15 May 2014. Mr Ward admitted to the misconduct for which he was dismissed at the meeting of 24 June 2014 and displayed a lack of candour by his unwillingness to fully explain his actions.

[68] RACV also submitted that at the meeting of 24 June 2014, Mr Ward was provided with an opportunity to respond to the allegations and raise any mitigating factors. Mr Ward failed to put forward any acceptable explanation or raise any mitigating factors, and that RACV was forced to rely on the material before it.

[69] Mr Ward clearly breached the Code of Conduct by transacting on his own account. As the Rooms Division Manager, Mr Ward needed to show a clear example to employees who reported to him and for whose behaviour he was responsible for. RACV submitted that Mr Ward’s conduct when considered together or separately, constitutes a valid reason or termination of employment.

Consideration

(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)

[70] Mr Ward was summarily dismissed on the ground of serious misconduct. That RACV later paid Mr Ward an amount in lieu of notice, does not alter the fact that this was the basis of his dismissal. In essence, Mr Morris formed the view that Mr Ward’s breach of the Code of Conduct was wilful in that it was not a mistake on Mr Ward’s part.

[71] I accept that there are sound reasons for RACV to have a policy prohibiting employees transacting on their own accounts. I also accept that this practice is prohibited under RACV’s Code of Conduct. However, it is also the case that there is little evidence that the Code of Conduct is promulgated in the workplace or that, as provided in the Code, Mr Ward’s managers worked with him to ensure his understanding of its terms. The failure on the part of RACV to promulgate the Code of Conduct is evidenced by the fact that after summarily dismissing Mr Ward, further training was conducted for employees in relation to the very matters that lead to Mr Ward’s dismissal.

[72] RACV was unable to produce any evidence that Mr Ward was given the Code of Conduct, or that he was provided with an explanation of its terms during his induction. This is despite the fact that the Code of Conduct states that on commencement of employment employees must complete a Code of Conduct Declaration to show that they understand and will comply with the Code. RACV took steps to ensure that all staff read and acknowledged the Code provisions in relation to staff transacting on their own accounts after Mr Ward was dismissed.

[73] That RACV states that the process allegedly breached by Mr Ward is an industry standard is not sufficient to establish a valid reason for dismissal, particularly where there is no evidence of that standard or of RACV having provided proper training to Mr Ward in relation to it.

[74] It is also significant that the Code of Conduct states that serious, wilful or repeated breaches could lead to dismissal. I accept that Mr Ward breached the Code of Conduct. However, I am not satisfied that Mr Ward’s breach was serious. There is no evidence that Mr Ward was dishonest or that he had any intention to be dishonest. Other staff posted the charges to the Account and Mr Ward did not delete or alter any of them. The charges were paid for by Mr Ward using an entitlement under his Club Card Account, which was provided by RACV for that purpose.

[75] Mr Ward provided an explanation for his conduct and in my view that explanation was reasonable and should have been accepted. Mr Morris’ assumption that Mr Ward was the duty manager on the day in question and that he could have moved around the Resort to pay the charges as they were incurred, was incorrect. Mr Ward was in fact working on a day that he was rostered off and his uncontested evidence is that he was fully engaged and not free to move around the Resort. There is no evidence that Mr Ward was aware that he could have given his Club Card to his wife and I accept that this is not an option that Mr Ward would reasonably have considered.

[76] Mr Ward’s evidence that he did not know that his conduct was in breach of the Code of Conduct was not seriously challenged and I accept that his breach was inadvertent. The breach was not repeated. I am satisfied and find that there was no reasonable basis for Mr Morris to have determined that Mr Ward’s breach of the policy was serious or wilful or that it was not a mistake.

(b) whether the person was notified of that reason

[77] I accept that Mr Ward was notified of the reason for dismissal at a meeting on 24 June 2014.

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

[78] I am not satisfied that Mr Ward was given an opportunity to respond to the reasons for his dismissal. The allegations were serious enough for RACV to summarily dismiss Mr Ward. RACV did not give Mr Ward details of the allegations prior to the meeting so that he could be prepared to respond to them. It is not in dispute that Mr Ward was not notified of the meeting until the day on which it was held. I note that Mr Ward contended that the email requesting him to attend the meeting on 24 June 2014 did not make any reference to his conduct but rather stated that the meeting was about Posting Master Accounts generally. The email was not produced by RACV and I accept Mr Ward’s evidence in this regard.

[79] Mr Ward was not notified of the reason for the meeting, was not given the allegations to consider and respond to in advance and was, in effect, ambushed with the allegations at the meeting. Given the seriousness with which RACV apparently considered the issue, it was incumbent upon RACV to put those allegations to Mr Ward, give him an appropriate amount of time to prepare a response and then for RACV to consider those responses. Mr Ward’s evidence regarding his approach to the meeting demonstrates that he did not understand the seriousness with which RACV was considering the conduct. This is unsurprising given that he was given no warning at all about the matters to be discussed at the meeting or that it was alleged that he had breached the Code of Conduct.

[80] While it is true that Mr Ward was referred to the relevant Code of Conduct provisions during the meeting, it is not in dispute that the provisions were read to Mr Ward, he was informed that he had breached them and was dismissed, in fairly short order. In circumstances where Mr Ward was asserting that he was not aware of the relevant provisions of the Code of Conduct, I am unable to accept that he had a reasonable opportunity to respond to the allegations that he had breached it.

(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

[81] RACV argued that Mr Ward did not request a support person at the meeting and that his colleague, Mr Eddie Ross, was in the meeting as a witness. Mr Ward conceded that he did not ask for a support person, but submitted that RACV had caught him by surprise by giving him no notice before the meeting that there was a disciplinary or investigative process on foot. Further, Mr Ward submitted that he is inexperienced in disciplinary and investigative processes and did not realise he could request a support person.

[82] Mr Ward submitted that RACV’s conduct effectively denied him a support person. Section 387(d) does not go to opportunity to have a support person present but rather, deals with whether a request by an employee facing dismissal to have a support person present was unreasonably refused.

[83] In the present case, there was no refusal, unreasonable or otherwise, for Mr Ward to have a support person present. However, I accept that Mr Ward was effectively denied a support person because of the way in which the meeting was conducted and this is a matter that I have taken into account as part of the consideration of whether Mr Ward had a reasonable opportunity to respond to the allegation and under the heading of “other relevant matters” in s.387(h).

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

[84] I accept that Mr Ward was warned about some areas of his performance. These performance issues however did not form the basis of the dismissal and as such are not determinative.

(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

[85] It is not contested that RACV is a large employer, with dedicated human resource staff, and its size would not adversely impact upon the procedures following in effecting the termination of Mr Ward. In my view, an employer of this size should have had more thorough performance management processes and better mechanisms for promulgating policies and procedures, the breach of which could lead to dismissal of employees. Further, it is my view that RACV should have better managed the process by which the dismissal was effected.

(h) any other matters that the FWC considers relevant

[86] As previously noted, the RACV Code of Conduct provides that if the conduct of an employee of RACV is considered to be inappropriate: “Your Manager or team leader will work with you to ensure you understand RACV’s values and that your behaviours are consistent with RACV’s values”. There does not appear to have been any effort by Mr Ward’s mangers to provide him with training and assistance. The Code goes on to provide that: “There is a process your manager or team leader will follow, which in most cases will start with an informal discussion with you to raise your awareness of the issue”. Given that the breach by Mr Ward was not serious as defined in the Code, this process should have been followed.

[87] Mr Ward was not a senior manager and I do not accept the submission that Mr Ward should have known that his conduct was inappropriate because of his position as Rooms Division Manager. I do not accept this submission because of the lack of training in relation to the Code of Conduct and the fact that RACV has not established that Mr Ward was provided with the Code at induction in accordance with its terms.

[88] There is evidence that another employee engaged in similar conduct at or around the time that Mr Ward was dismissed. Mr Ward asserts that he was treated differently than other employees who engaged in the same or similar conduct. There is insufficient evidence upon which I could make a finding in this regard. However, it is of significance that training, and detailed information, was provided to employees in relation to the matters that lead to Mr Ward’s dismissal, after Mr Ward’s dismissal took effect. This suggests an acknowledgement that training in relation to the Code of Conduct left something to be desired.

[89] The dismissal was harsh because it was disproportionate to the breach of the Code of Conduct that Mr Ward engaged in. It was unjust because Mr Ward was not guilty of a serious breach of RACV policy such that dismissal was warranted and unreasonable because conclusions were drawn about the seriousness of Mr Ward’s conduct that were not open on the material before Mr Morris.

Remedy

[90] Given that I have found that Mr Ward’s dismissal was unfair, it is necessary to consider the question of remedy. As required by s.390 of the Act, I am satisfied that Ward was protected from unfair dismissal and that he has been unfairly dismissed. I am also of the view that Mr Ward should have a remedy for his unfair dismissal.

[91] Mr Ward has not sought reinstatement to his position. Mr Ward has, since his dismissal, substantially changed his personal circumstances by purchasing a small business. Mr Ward has also given evidence that he does not believe that the relationship with RACV could be mended. Given the evidence of Mr Ward and the reasons for his dismissal advanced by RACV, I am satisfied that reinstatement is not appropriate.

[92] I am also satisfied that an order for the payment of compensation is appropriate in all of the circumstances of the case. Section 392 of the Act provides as follows in relation to the remedy of compensation:

“392 Remedy—compensation
Compensation
(1) 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.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(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; and
(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; and
(g) any other matter that the FWC considers relevant.

Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or
(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[93] There is no evidence that an order for compensation will have any impact on the viability of RACV’s business. Mr Ward’s service with RACV was some two years and four months in duration. I do not accept that Mr Ward would have remained in employment for a further period of twelve or eighteen months. Mr Ward had received two warnings in relation to his work performance and had been subject to fortnightly meetings to discuss his work performance.

[94] Notwithstanding that the warnings were not matters that could have been a valid basis for his dismissal, I am satisfied that Mr Ward’s employment record was not unblemished and there were legitimate issues with his capacity and work performance. For the purpose of calculating compensation, I am of the view that, but for his dismissal, Mr Ward would likely have remained in employment for no longer than a further six months.

[95] In relation to mitigation, I am of the view that Mr Ward made little if any effort to obtain other employment. Mr Ward applied for only one job during the period prior to purchasing his own business. I also note that Mr Ross assisted by referring Mr Ward to an alternative position. While the position would have required Mr Ward to relocate himself and his family, this is an indication that Mr Ward was not without assistance to find another job.

[96] Mr Ward was paid three weeks wages in lieu of notice at the time that this matter was heard. 21 Although it was paid well after the date of Mr Ward’s dismissal, this amount should be taken into consideration in calculating compensation. It is also relevant that Mr Ward and his wife commenced to operate a business from 9 October 2014. In light of this fact, and the failure of Mr Ward to take reasonable steps to mitigate his loss, I have determined to calculate compensation to that point.

[97] At the time he was dismissed, Mr Ward’s salary was $92,252.00 per annum. 22 Had Mr Ward remained in employment for six months he would have been paid an amount of $46,126. Mr Ward made no effort to mitigate the loss of his employment and commenced to operate his own business on 9 October 2014. After taking these matters into account, I have determined to compensate Mr Ward for his unfair dismissal by awarding him an amount of eight weeks wages in addition to the three weeks wages he was already paid. The amount of $14,192.26 is to be paid to Mr Ward within 21 days of the date of this Decision. An order to that effect will issue with this Decision.

DEPUTY PRESIDENT

 1   Annexure to Form F3 Employer Response to Unfair Dismissal Application filed by RACV on 14 July 2014.

 2   Exhibit 1 Statement of Adrian Ward.

 3   [2004] AIRC 261.

 4   Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

 5   Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.

 6   Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.

 7   Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.

 8   Exhibit 5 Statement of John Morris Annexure “JM-1”.

 9   Annexure to Form F2 Unfair Dismissal Application filed on 27 June 2014.

 10   Exhibit 1 at para 5.

 11   Exhibit 1 at para 31.

 12   Exhibit 1 at para 43 to 44.

 13   PN132.

 14   Exhibit 5 Statement of John Morris Annexure “JM-2”.

 15   Ibid.

 16   PN75.

 17   PN86.

 18   PN233.

 19   PN234 to PN236.

 20   PN249.

 21   PN26.

 22   This amount was agreed between the parties at the commencement of the hearing: Transcript PN20.

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