Mr Brian Hallam v Davbridge Properties Pty Ltd T/A Davbridge Constructions

[2014] FWC 3861

[2014] FWC 3861

FAIR WORK COMMISSION

DECISION

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

Mr Brian Hallam
v
Davbridge Properties Pty Ltd T/A Davbridge Constructions
(U2013/14020)

DEPUTY PRESIDENT ASBURY BRISBANE, 30 JUNE 2014

Application for unfair dismissal remedy - Arbitration - Remedy granted.

[1] The following decision, now edited, was issued in a hearing on 10 June 2014. At that time I indicated that this Decision and an Order to give effect to it would be issued in due course.

[2] Mr Brian Hallam applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in relation to his dismissal by Davbridge Properties Pty Ltd t/a Davbridge Constructions (Davbridge Constructions). Mr Hallam commenced employment with Davbridge on 10 April 2012 in the capacity of Plant Manager. Davbridge Constructions employs some 35 persons and in his role, Mr Hallam had two employees reporting to him. Mr Hallam’s annual salary was $125,000.00 per annum.

[3] Davbridge Constructions maintains that Mr Hallam was dismissed because of ongoing issues with his conduct, capacity and work performance in relation to problems with plant, program targets not being met, required attendance at tool box meetings not occurring regularly and failure on the part of Mr Hallam to locate himself so that he could properly oversee the employees he was responsible for managing.

[4] Mr Hallam contends that he was not aware that there were any issues with his conduct, capacity or work performance until he was called into a meeting on 16 August 2013 (the day he was scheduled to go on annual leave) and given a warning about his work performance. Mr Hallam went on annual leave until 26 August 2013 and was given a further warning letter on 9 September 2013 before being dismissed on 24 September 2013. Mr Hallam contends that there were only 21 working days between the first warning letter and his dismissal and that the issues raised have no validity and/or did not occur.

[5] Mr Hallam’s unfair dismissal application was made on 30 September 2013, within the time required in s.394(2) of the Act. In a decision released on 28 February 2013 1, I dismissed a jurisdictional objection from Davbridge Constructions on the ground that Mr Hallam earned in excess of the high income threshold. Mr Hallam is a person protected from unfair dismissal as defined in s.382 of the Act. Davbridge Constructions is not a small business and the dismissal was not a redundancy.

[6] The matter was dealt with by way of a hearing, as it was considered that this was the appropriate course, taking into account the matters set out in s.399 of the Act and the views of the parties. Mr Hallam represented himself. Davbridge Constructions was represented by its Construction Manager Mr James Downes. Evidence in support of the application was given by Mr Hallam. Evidence for Davbridge Constructions was given by Mr Downes and by Ms Renee Hend, the Company’s Administration and Accounting Manager, who also undertakes some human resource management activities.

Legislation

[7] The criteria that the Commission is required to consider in deciding whether a dismissal was harsh, unjust or unreasonable are set out in s.387 of the Act as follows:

“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.”

[8] The criteria direct attention to the reason for the dismissal, the process followed in effecting it and other matters particular to the employer or the employee, relevant to the consideration of whether the dismissal was unfair.

[9] The applicant for an unfair dismissal remedy bears the onus of establishing that the dismissal is unfair. However, the starting point is whether there was a valid reason for the dismissal, which necessarily focuses attention on the validity of the reasons given by the employer at the time of the dismissal or reasons relied on by the employer to defend the application for an unfair dismissal remedy. In this sense the employer bears the onus of establishing that there was a valid reason for a dismissal. 2

[10] If the reason for the dismissal is based on the conduct of the employee, the Commission must determine that the conduct occurred. 3 A valid reason for dismissal is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”4 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts5, 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

CONSIDERATION

Was there a valid reason for the dismissal related to Mr Hallam’s capacity or conduct?

[11] Having considered all of the evidence provided by the parties, I am satisfied that there was a valid reason for Mr Hallam’s dismissal. I accept that Mr Downes had genuine issues with the manner in which Mr Hallam was carrying out his work and as to whether Mr Hallam was working at a level and performing a range of tasks commensurate with the salary he was being paid and the expectations of Davbridge Constructions for a Manager at that level.

[12] In reaching this conclusion I have taken into account the unchallenged evidence of Mr Downes to the effect that the documentation in relation to maintenance of vehicles was not up to date in that it did not match up with information kept by Mr Hallam on a whiteboard. I also accept that basic matters such as registration stickers being attached to plant and equipment that was in use on site, had not been undertaken. Mr Hallam was requested to employ a second mechanic and when he was unable to do so, Mr Downes was required to step in and complete this task. Further Mr Hallam did not relocate his office to Beaudesert as requested. There is also a text message wherein Mr Hallam informs an employee that he is responsible for supervising that: “All I need to cover my arse is to tell you to do [a particular task] in writing”. This text message was tendered by Mr Hallam.

[13] In short, the impression I gain from the evidence is that Mr Downes and the owner of the Company formed the view that Mr Hallam was not stepping up and performing at a level expected of a manager in receipt of his salary. While I accept that Mr Hallam disputes this, the evidence establishes that he did not complete a variety of tasks including relocating himself and his office to Beaudesert so as to be close to the employees he was supervising and employing a second mechanic. While Mr Hallam has excuses for not completing these tasks, they are not particularly convincing and there is nothing that Mr Hallam was requested to do that would not reasonably be expected of a Plant Manager who was in receipt of a salary of $125,000 per annum and a package which included use of a company vehicle for work related purposes and for travelling to and from work and between the various locations at which the Company was undertaking its operations.

[14] If a suitable mechanic was not available, it would be reasonably expected that a person of Mr Hallam’s experience would have had an alternative plan such as the employment of someone who could have been provided with additional training and would have made such a recommendation to Mr Downes. Mr Downes also asserts that the first he knew of any issues with the Beaudesert site given by Mr Hallam as the reasons for not relocating himself to that site, was in these proceedings. It would be reasonably expected that a manager at Mr Hallam’s level who had failed to comply with a requirement to relocate to Beaudesert because of the lack of suitable facilities at that location, would have reported this to Mr Downes and proposed a plan to install suitable facilities. Other than a few emails of complaint from Mr Hallam about combining an office and crib facilities in one location, there is no evidence of any such advice or plan being provided to Mr Downes or to the owner of the Company.

[15] In my view, there were reasonable grounds for Mr Downes and the owner of the Company to decide that Mr Hallam was not a good fit for the role that he was employed to perform, and that Mr Hallam was not displaying the initiative that would be expected of the second highest paid manager in the Company. These matters were a valid reason for deciding to dismiss Mr Hallam.

[16] I note that the letter of dismissal included an allegation about an employee being electrocuted. Mr Hallam took issue with having blame for this incident placed on him and wrote a letter to that effect to Mr Downes. I also note that Mr Downes wrote to Mr Hallam on 26 September 2013 and unreservedly withdrew this allegation and admitted that he was wrong to make it.

[17] Notwithstanding that this allegation was withdrawn after the dismissal of Mr Hallam, this matter is one of a number of reasons for the dismissal. It was not the entire reason, and in the context of all of the issues with Mr Hallam’s performance, it was not determinative of the decision to dismiss him, and is not a basis for a finding that there was no valid reason for the dismissal.

Was Mr Hallam notifed of the reason for his dismissal?

[18] I am satisfied that Mr Hallam was notified of the reasons for his dismissal. Mr Hallam was provided with a letter of dismissal on 24 September 2013 that set out those reasons.

Was Mr Hallam given an opportunity to respond to any reason related to his capacity or conduct?

[19] I am satisfied that Mr Hallam was given an opportunity to respond to reasons for his dismissal. Mr Hallam received a warning letter on 26 August 2013 confirming a discussion on 16 August, and setting out issues with his work performance. That letter stated that there would be a further meeting to review his progress in addressing those issues, to be held on 9 September 2013. A further letter was given to Mr Hallam on 9 September 2013 confirming that at a meeting on that day, his performance had been further discussed, and a view had been formed by Mr Davies, Mr Downes and Ms Hend that improvement had not been achieved to the required level. The letter of 9 September 2013 states that there will be a further meeting on 23 September 2013 and that if a significant improvement is not achieved by that date, Mr Hallam’s employment will be terminated.

[20] In my view, the letters received by Mr Hallam clearly set out the issues with his work performance and invite him to respond either by contacting Mr Downes or in writing. There is no evidence that Mr Hallam took advantage of this invitation. I am also of the view that the meetings held with Mr Hallam provided him with an opportunity to respond to issues with his work performance which were clearly articulated, and could have left him in no doubt that his employment was at risk.

[21] Notwithstanding that Mr Hallam was on leave until 26 August 2013, he had from that date until 23 September 2013 to improve his performance and to respond to the matters that had been raised.

Was there an unreasonable refusal by Davbridge Constructions to allow Mr Hallam to have a support person present to assist at any discussions relating to his dismissal?

[22] There was no refusal on the part of Davbridge Constructions to allow Mr Hallam to have a person present to assist at discussions relating to this dismissal. I do not accept Mr Hallam’s assertion that he had no opportunity to have a person present. Mr Hallam was informed in writing on 26 August 2013 that there would be a further meeting to discuss his work performance on 9 September 2013. He was then informed in writing that there would be a further meeting on 23 September 2013 and that his employment was at risk.

[23] Mr Hallam had notice of the meeting at which the possibility of his dismissal was to be discussed and did not request to have a person present to assist him. While it may have been advisable for Davbridge Constructions to have informed Mr Hallam that he could have a person present, that is not a requirement of s.387(d).

Was Mr Hallam was warned about any unsatisfactory performance before the dismissal?

[24] I accept that Mr Hallam was warned about unsatisfactory performance before the dismissal. He was requested to attend a meeting on 16 August 2013 at which performance issues were discussed with him and received a letter setting out those matters and warning him about the consequences of failing to improve, on 26 August 2013. Mr Hallam can have been in no doubt, at least from that date, that his employment was in jeopardy.

[25] Even if I accept that Mr Hallam had no idea that there were issues with his performance before 16 August 2013, it is clear that from that date, he was warned about unsatisfactory performance.

[26] I also accept that there were instances when Mr Downes and the owner of Davbridge Constructions Mr Davies, raised performance issues with Mr Hallam orally or by email. While these discussions and emails were not warnings, a person of Mr Hallam’s experience should have realised that there were issues of concern with his work performance.

The degree to which the size of the employer’s enterprise and the absence of dedicated human resource management specialists would be likely to impact on the procedures followed in effecting the dismissal

[27] Davbridge Constructions has 35 employees and does not employ a dedicated human resource management specialist. Nothwithstanding this, there is evidence that considerable effort has been made to spell out clearly to Mr Hallam the issues with his work performance. That there may have been some deficiencies in the process followed however, is a matter that is explained by the size of the Company and its limited specialist resources.

Other relevant matters

[28] In addition to the matters set out above, I have given consideration to the following matters:

● Mr Hallam was on annual leave for part of the period over which issues with his performance were formally raised with him;

● There were issues associated with the employment of the son of the owner of the business, which appear to have impacted on Mr Hallam’s ability to do his job;

● There is a lack of evidence about Mr Downes communicating with Mr Hallam in relation to issues with his work performance prior to the meeting of 16 August and the letter of 26 August, so that Mr Hallam could have understood that matters were coming to a head and his job was in jeopardy;

● Mr Hallam was asked to work out his notice period and when he did not, was not paid in lieu of notice;

● The letter asking Mr Hallam to work out his notice period also contained an allegation that he was responsible for the electrocution of worker, in circumstances where that allegation was subsequently withdrawn; and

● Mr Hallam had a senior management position, and was offered only the minimum period of notice under the Act.

CONCLUSION

[29] On balance I have concluded that Mr Hallam’s dismissal was unfair. Mr Hallam had been employed for in excess of two years, and the effect of the manner in which his dismissal was effected, was that he received no payment in lieu of notice.

[30] In the present case, while it is accepted that Davbridge Constructions raised various issues with Mr Hallam, there is no evidence that they were articulated in a way that would reasonably have made it clear to Mr Hallam that his employment was in jeopardy, until 16 August 2013 when he was going on annual leave and did not return until 26 August 2013. At that point he was given a warning, and within a month his employment had been terminated.

[31] As required by s.390 of the Act, I am satisfied that Mr Hallam was protected from unfair dismissal and that he has been unfairly dismissed. Mr Hallam should have a remedy for his unfair dismissal. Mr Hallam does not seek reinstatement and on that basis I am satisfied that it is not appropriate and that an award of compensation should be made. The remedy of compensation is dealt with in s.392 of the Act in the following terms:

“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), FWA 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 FWA considers relevant.

Misconduct reduces amount

(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 FWA 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 FWA 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.”

[32] There is no evidence that an order for compensation will affect the viability of Davbridge Constructions. Mr Hallam has in excess of two years service with the Company in a senior management position. Considering the circumstances of the case, including the factors in s.392 of the Act, I have determined that Mr Hallam should be compensated for his unfair dismissal by the payment of 4 weeks wages.

[33] Despite the matters which I have determined made Mr Hallam’s dismissal unfair, I am not able to conclude that Mr Hallam would have remained in employment for a period of longer than 4 weeks from the date he was dismissed. In this regard, I have taken into account the fact that there were issues with Mr Hallam’s work performance that provided a valid basis for his dismissal and that even at the point this matter was heard, Mr Hallam does not accept that this is the case. Mr Hallam did not obtain other employment until 25 March 2014. I am satisfied that Mr Hallam made reasonable efforts to obtain other employment.

[34] The amount of $9,615.00 less taxation at the appropriate rate is to be paid to Mr Hallam within fourteen days of the date of this Decision. An Order to this effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr B. Hallam on his own behalf.

Mr J. Downes and Ms R. Hend on behalf of Davbridge Constructions.

Hearing details:

2014.

Brisbane:

June 10.

 1   [2014] FWC 1467.

 2   Culpeper v Intercontinental Ship Management Pty Ltd (2004) 134 IR 243 at 249.

 3   Edwards v Giudice (1999) 94 FCR 561; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201; Sherman v Peabody Coal Ltd (1998) IR 408; Australian Meat Holdings v McLauchlan (1998) 84 IR 1.

 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.

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