Mr Bruce Bowen v Life's Memories Pty Ltd

[2012] FWA 6124

[2012] FWA 6124

FAIR WORK AUSTRALIA

DECISION

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

Mr Bruce Bowen
v
Life's Memories Pty Ltd
(U2011/12262)

COMMISSIONER STEEL ADELAIDE, 18 JULY 2012

Termination of employment.

Introduction

[1] This matter concerns an application for review of the dismissal of Mr Bruce Bowen (the applicant) by Life’s Memories Pty Ltd (the respondent).

[2] The applicant is identified as a person protected from unfair dismissal pursuant to s.382 of the Fair Work Act 2009 (the Act). The respondent is a small business as defined by the Act and hence the provisions of s.388 are required to be considered.

[3] Section 385 of the Act provides that a person has not been unfairly dismissed if the dismissal was consistent with the Small Business Fair Dismissal Code (the Code). Sub-sections 388(1) and (2) sets out the declaration of such a Code and the requirements for compliance that a business must give effect to and provide evidence of to ensure they have been consistent with the Code.

[4] Both parties in this matter contend that the dismissal of the applicant was not a summary dismissal as per the Code, that is that it was a dismissal for serious and wilful misconduct. The applicant submits it was a performance based dismissal and unfair based on his responses in a performance management meeting. The respondent submits it was a dismissal in conformity with the Codes “other dismissal” category for performance matters addressed to the applicant, including matters he had been warned about.

[5] The tribunal heard this matter by way of a conference determination with the co-operation of the parties who were self represented and who provided sworn evidence.

Evidence and submissions

[6] The tribunal heard evidence from the applicant and found him to be a focused, mature individual who provided specific and articulate material. The tribunal found him to be a generally reliable witness.

[7] Mr Joel Hepburn-Brown appeared for the respondent. The tribunal found him knowledgeable as to employer responsibilities and an open, positive and encouraging employer. The tribunal found his evidence generally reliable.

[8] Mr Anthony Renshaw appeared as a witness for the respondent. He was the respondent’s Chief Executive Officer at the time of the applicant’s dismissal. His evidence indicated some limitations with his recall of detail of events and conversations. However the tribunal found he endeavoured to provide reliable testimony.

Background

[9] The tribunal has given regard to all the submissions and documentation provided and has considered such on the basis of equity, good conscience and the merits of the evidence. Where facts are in contention the tribunal has given regard to the balance of probabilities of the events in question.

[10] The applicant was employed as a Retail Sales Consultant under contract from 14 September 2009. His remuneration commenced at $45000 per annum plus contingent commission on sales (5%). His remuneration included provision for any applicable penalty rates, overtime for working after hours, weekend work on occasion and annual leave loading. 1 The applicant asserts that he anticipated his income would peak at approximately $90000 per annum but the evidence is that it did not reach that quantum.

[11] On Friday 23 September 2011 between 1.30 pm and 3.00 pm the applicant was telephoned by Mr Renshaw and instructed to attend a meeting at the respondent’s premises that day. The applicant explained he could not return in that time frame as he was at McLaren Vale. He was then told to be there between 5.30 pm and 7.00 pm. The applicant then advised he had taken a few hours off from work, that he was visiting cemeteries that day and that on the Saturday he had a meeting with a customer and had organised his caravan with the intention of staying at the caravan park at McLaren Vale that night. 2

[12] The applicant in his statement identifies this time off as “in lieu of after hours work”, albeit combined with work activities. 3 He further asserts that he was requested to attend not in normal business hours and indicates he had prescribed hours of 8.30 am to 5.00 pm.

[13] The respondent asserts the applicant did not give specifics of what he was doing and did not mention meeting clients. 4 The applicant referred to being on flexitime and on holidays with his family and that it was unreasonable for the respondent to expect him to return to work.

[14] It is clear from the evidence the applicant did not have a timesheet requirement, a diary or any structured reporting of his activities on a daily, weekly or monthly basis. He did however have to apply for paid leave. The applicant did not have a flexitime arrangement and hence could not nominate when he was arbitrarily on holidays. He also had an after-hours requirement in his contract of employment and his remuneration provided for such occurrences. He inconsistently asserts in his statement that it is unreasonable for the employer to have him return to work after prescribed hours and relies in his letter of reply to the respondent that he had flexible hours.

[15] The tribunal finds that the applicant had decided to make himself unavailable to his employer on this occasion and had organised that he be away from work requirements at this location. The evidence as to his work arrangements which he determined is not compelling and he must have expended work time to arrange his caravan, family etc to be in the vicinity at the times nominated. In response to the lawful instruction to attend from his employer he provided a range of excuses and reasons which go to him determining his attendance for the employer. His reference to after-hours work in this scenario is not sustainable. In these circumstances the tribunal considers the employer had a right to bring the applicant to account for this behaviour.

[16] The phone call concluded with the applicant being instructed to attend a meeting on Monday morning with management. He attended that meeting and was provided with a letter headed “Performance Management - Notice.” 5 It read as follows:

“Friday 23 September 2011

Bruce Bowen

Life’s Memories Pty Ltd

Suite 1, 250 Glen Osmond Road

Fullarton SA 5063

Dear Bruce

Re Performance Management - Notice

I am writing to advise you are required to attend an interview in relation to your under-performance as set below;

[a] Failure to achieve actual sales at or above the agreed budget and targeted amount of $100,000 per month

[b] Continuing to engage in discussions with clients and the personnel of clients and referral sources about matter pertaining to the business arrangements between Life’s Memories and its clients, after being clearly and specifically counselled about such conduct previously and as recently as in the last 3 months

[c] Unsatisfactory follow up of referred leads and business opportunities

[d] Taking unauthorised leave without advice or notification

1. Meeting Arrangements

Date Wednesday 2 September 2011

Time 9.30 am

Location Life’s Memories Meeting Room

Suite 1, 250 Glen Osmond Road

Fullarton SA 5063

Attending the meeting will be Tony Renshaw and Joel Hepburn-Brown.

A support person of your choice may accompany you if you wish.

This meeting commences the formal process for managing and improving under-performance, as your performance has not improved to the expected standard through an informal process. You are advised that continued under-performance will result in disciplinary action, which may include dismissal.

At the meeting a strategy will be developed to assist you in improving your performance. The expected acceptable standard of performance will be reiterated and you will have the opportunity to present any factors that may be hindering your performance.

Yours sincerely

Life’s Memories Pty Ltd

(Signed)

Tony Renshaw

Chief Executive Officer”

[17] The respondent had nominated four areas of underperformance including [d] that refers to unauthorised leave the matter as discussed above.

[18] The applicant was required to attend a meeting on the following Wednesday to respond to the matters raised and was invited to bring a person to accompany him in that regard. He prepared a written response to the letter he had received and determined to attend the meeting alone.

[19] The respondent’s management, Mr Renshaw and Mr Hepburn-Brown attended the meeting with the applicant. The applicant initially read from his written reply and further discussion occurred.

[20] In regard to the four nominated aspects of the applicant’s underperformance nominated in the letter the applicant responded as follows:

Failure to achieve actual sales at or above the agreed budget and arranged amount of $100,000 per month

[21] The applicant denied he had that actual target and that any target was specifically assigned to him as it was a company target. He asserted that he had many discussions as to potential strategies to achieve such sales or improved sales. Such strategies required various provisions and requirements which were often not completed or available such as the expedition of orders, CAD drawings, pricing structures, operational streamlining, sample availability etc. and servicing of members on an efficient basis. These strategies he submits were not formal or adopted policy but conversational matters with management directed to financial performance improvement of the organisation. He nominated several issues which inhibited his personal performance such as the strained relationship with Invocare, lack of samples, price lists delivery times, drawings, the failure of others and the need to continuously follow up orders.

[22] The applicant also indicated he had prepared a board proposal regarding financial targets for Mr Renshaw when he was the only salesperson in July which had not been responded to despite assurances from Mr Renshaw that it was under consideration. Accordingly he considered he had been misled and deceived on this issue.

[23] He subsequently had been required, with the employment of the new salesperson, to give up half of his referrals and Invocare work despite there being no discussion of the effects on him of these changes. The applicant also mentioned he had been given positive feedback by Mr Renshaw on 19 September 2011 about financial performance.

Continuing to engage in discussions with clients and the personnel of clients and referral sources about matters pertaining to the business arrangements between the respondent and its clients after being clearly and specifically counselled about such matters previously and as recently as in the last 3 months.

[24] The applicant says he was told informally by Mr Renshaw to refer inquiries by the Invocare client personnel to Sydney head office and also not to speak to Mr Parker from that office. Correspondence from Mr Parker was to be forwarded to Mr Renshaw. The applicant refutes that he has been counselled and on the contrary was instructed by Mr Renshaw to “just do it and beg forgiveness.” He inferred he was the scapegoat in this matter.

Unsatisfactory follow up of leads and business opportunities

[25] The applicant denied he had not done so and referred to his time being spent on other matters affecting his efficiency. He also offered to explain any particular example should it be provided.

The issue of unauthorised leave

[26] The applicant explained that he was in fact visiting a client on the Friday and had an appointment at Willunga on the Saturday. 6 He considered his organisation of events on the Friday fitted in with the “flexible working hours” that applied to him and he rejected he had taken unauthorised leave.

[27] Consequent to the applicant reading his response he says there was minimal discussion and the respondent adjourned for about 20 minutes. Mr Hepburn-Brown submitted that - “We had some discussion - nothing of any particular consequence,” 7 and the meeting adjourned.

[28] Mr Renshaw, in his evidence, indicates that he did not recall specifics, however the discussion went to particular follow up contacts and whether they had occurred or not. In his statement however he indicates the conversation went to the applicant’s efficiency, unauthorised leave, speaking to clients and referrals.

[29] It is evident that the respondent then invited the applicant to make any further comments before adjourning to decide their action. In that time they determined to dismiss the applicant, predominantly from the evidence, because they considered he was lying. The meeting reconvened and applicant was subsequently requested if he had anything further to add. He apparently had nothing further to say and he was then advised he was dismissed and arrangements were made for him to leave and be delivered to his home.

[30] The tribunal has already referred to the submissions of the parties that this dismissal was not a summary dismissal for misconduct.

The Law

[31] The Code requires that:

● The employer must give the employee a reason why he is at risk of being dismissed.
● The reason must be a valid reason based on the employees, conduct or capacity to do the job.
● The employee must be warned verbally or preferably in writing that he risks being dismissed if there is no improvement.
● The employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer additional providing training and ensuring the employee knows the employer’s job expectations.
● The employee can have another non-lawyer person present to assist.
● The employer will be required to provide evidence of compliance with the code, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warnings, a statement of termination or signed witness statements.

[32] The tribunal is assisted in consideration of this matter by the decision of Asbury C in the matter of Mourilyan v James Hardie Australia Pty Ltd in which the Commissioner states:

“A valid reason for termination of employment must be “sound, defensible and well founded” and not “capricious, fanciful spiteful or prejudiced.” The termination must be defensible or justifiable on an objective analysis of the facts. 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.” 8 (Footnotes omitted)

[33] The respondent in this matter has provided a completed checklist as evidence. 9

Consideration

[34] The evidence in this matter indicates that subsequent to the adjournment of the performance meeting on the Wednesday the applicant was dismissed without further reason or reasons being advised to him. The respondent had concluded that dismissal was appropriate in the circumstances and paid the applicant two weeks pay in lieu of notice.

[35] The reasons notified to the applicant for the meeting that precipitated the dismissal (Exhibit R4, Attachment B referred to above) indicates the meeting is “an interview in relation to your under-performance” and that:

“This meeting commences the formal process for managing and improving under-performance, as your performance has not improved to the expected standard through an informal process. You are advised that continued under performance will result in disciplinary action, which may include dismissal.

At the meeting a strategy will be developed to assist you in improving your performance. The expected acceptable standard of performance will be reiterated and you will have the opportunity to present any factors that may be hindering your performance.”

[36] In consequence of the meeting the applicant was dismissed.

Was there conformity with the Code?

[37] From the evidence provided the respondent was unhappy with the applicant’s performance in several areas as listed in Exhibit R4, Attachment B. However the tribunal cannot identify any specificity in the sales performance required of the applicant. The evidence of sales and sales administration is not compelling and does not form evidence of a position requirement on the applicant in the most basic form. Further, the respondent has had various combinations of sales people, but has not explained the effect of these on the applicant’s job requirements, performance and alleged sales targets.

[38] Similarly the respondent was unhappy with the applicant’s performance in relation to the major client, Invocare, and follow up of leads and referrals. The applicant refutes these assertions. However the respondent’s concerns were consistent in this matter.

[39] The taking of unauthorised leave was a further issue in the meeting and the tribunal has determined that the respondent has a right to take issue with this behaviour by the applicant.

[40] However the respondent’ evidence from both witnesses is that they were more interested in encouraging employees than being negative. That at times they did not wish to challenge the applicant when he was their only sales person. The tribunal has therefore formed a view that the administration of the applicant did involve a lot of discussion and conversation, but not formal counselling or warnings. The evidence that the applicant had two verbal warnings in regard to Invocare is not compelling in this regard.

[41] In the respondent’s perception the applicant did need to be performance managed. However the respondent had been to some degree been responsible for that situation by a lack of systematic direction and accountability.

[42] The meeting prior to dismissal was referred to as a “performance management meeting” which then precipitated a dismissal. Yet nothing had changed from the position that generated the meeting other than the respondent deciding that the applicant’s responses were not acceptable to them. They concluded the applicant’s performance was now considered such that he be dismissed.

[43] In this scenario the tribunal is unable to identify where the applicant had been warned as to his employment being at risk. He was not warned during his employment by his management that his approach to Invocare or referrals would lead to his dismissal. The document he received and replied to refers to “commencing a process” and an opportunity to improve such performance. It warns that if applicable, after that occurs he is at risk if he has not improved. He was not given that opportunity as he was dismissed. Similarly the applicant was not given an opportunity to respond to a warning that he would be dismissed if he did not improve, nor was he given an opportunity to rectify an alleged problem communicated to him.

[44] For these reasons the tribunal cannot identify that the respondent has complied with the Code and hence the dismissal of the applicant must be considered unfair as it is inconsistent with the Code. The tribunal has also given regard to the requirements of s.387 of the Act - Criteria for Considering Harshness etc. The respondent‘s conduct is inconsistent with ss.387(a), (c) and (e). The tribunal has also taken into consideration the requirements of ss.387(f) and (g) in these matters.

Remedy

[45] In consideration of the evidence the tribunal considers that reinstatement contemplated by s.391 of the Act is not appropriate and that the applicant receive compensation as contemplated by s.392 of the Act.

[46] The tribunal has considered all the criteria pursuant to s.392(2) of the Act noting that the respondent is a small business and that the applicant has provided limited evidence of his activities in obtaining employment since dismissal.

[47] The tribunal has further considered the effects of s.392(3) of the Act as to misconduct of the applicant to the extent that the applicant did absent himself from the business at his volition and without arrangements being sanctioned, an issue which factored into the reason to dismiss by the respondent.

[48] The applicant had a remuneration contingent on sales achieved in his contract of employment. He provided uncontested evidence as to his sales achieved during the period January to August 2011. 10 The tribunal has decided to utilise these sales in an appropriate period in determining a remuneration component additional to his base salary consistent with s.392(6) of the Act.

[49] The applicant was dismissed on 28 September 2011. No sales commission is illustrated for the month of September 2011. The tribunal will therefore consider sales attributed from 31 August 2011 and 26 weeks before that time to 2 March 2011 inclusive. Total sales in the period used amounts to $287678 divided by 26 weeks amounts to $11064.53 per week. Commission of 5% on sales amounts to $553.53 per week. Salary of $45000 per annum amounts to $865.38 per week making an average remuneration of $1418.91 per week which is below the compensation cap as per s.392(6) of the Act .

[50] In consideration of all matters in this application the tribunal has determined that the applicant should be paid an amount of compensation totalling 10 weeks making a total of $14189.10 less appropriate taxation. However such amount shall be reduced by the amount of remuneration the applicant has earned from all sources of employment from the date of dismissal to the date of the hearing of this matter. An order shall be issued separately to give effect to his decision.

COMMISSIONER

Appearances:

Mr B Bowen the applicant

Mr J Hepburn-Brown for the respondent

Hearing details:

2012:
Adelaide
1 May

 1   Exhibit R4, Attachment A

 2   PN 143

 3   Exhibit A2

 4   PN 943

 5   Exhibit R4, Attachment B

 6   PN 541-543

 7   PN 1468

 8   [2010] FWA 9672 at [85]

 9   Exhibit R4, Attachment C

 10  

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