Mr Damien Rowley v Tom and Barry Pty Ltd T/A Hills in Hollywood
[2010] FWA 2686
•15 JULY 2010
[2010] FWA 2686 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Damien Rowley
v
Tom and Barry Pty Ltd T/A Hills in Hollywood
(U2009/13363)
COMMISSIONER SPENCER | BRISBANE, 15 JULY 2010 |
Termination of employment - arbitration.
Introduction
[1] This determination relates to the application by Mr Damien Rowley (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) that the termination of his employment from Tom & Barry Pty Ltd trading as Hills in Hollywood (the Respondent) was harsh, unjust or unreasonable.
[2] The Applicant’s employment was terminated by three of the four company directors for failure to comply with a lawful direction by the three directors to provide the computer system and website passwords, user names and admin codes. The fourth director (Mr Tom Rowley) is the Applicant’s father. He was not involved with the direction or the termination of employment.
[3] The Applicant had been employed as the Information Technology (IT) Manager in the family-owned business since 6 September 2008 on a full-time basis. Prior to that date, whilst he was alternatively employed, he assisted the business with IT issues. From the commencement of his full-time employment he was engaged to establish IT infrastructure and policy for the Company, primarily in the form of developing various websites for the retailing of formal wear. The Applicant is the son and step-son respectively of two of the directors, Mr Tom Rowley and Ms Marlene Millers, who were separated at the time of the termination. The Applicant alleged that the escalation of the acrimony in this relationship led to the decision to terminate his employment. The other two directors who were party to the termination decision were Ms Gayle Clarke (the twin sister of Ms Millers) and her husband, Mr Richard Clark.
[4] The Applicant’s employment was terminated by correspondence dated 28 October 2009. The letter of termination stated as follows:
“Dear Damien
We refer to our previous oral notice to you in relation to termination of your employment on 15 October 2009. We are writing to confirm that notice we say was given effectively on that date.
In any event, if our earlier oral notice to you was not effective we hereby give you notice of termination of your employment as and from 15 October 2009.
Grounds of Termination
The ground for terminating your employment has previously been communicated to you by Marlene Millers on behalf of Tom and Barry Pty Ltd your employer.
For your benefit, we repeat these grounds as follows:
1. Faliure [sic] to comply with a lawful direction of the directors of Tom and Barry Pty Ltd, your lawful employer. The particulars of these directives were that you were repeatedly requested to provide the passwords , user names and admin codes to all servers, computer systems and website.
2. On the morning of 15 October, you visited Hills in Hollywood Head Office at 20 Ana Street Bald Hills Qld. You were requested to hand this information to the three directors present at the meeting. You pointedly refused this request.
Thank you for your contribution to the company. We calculate your lawful entitlements to be in accordance with the attached schedule.
Yours Faithfully
Tom and Barry Pty Ltd”
[5] This decision does not refer to all of the evidence, material and submissions but all of such have been considered in the determination of this matter. The Applicant was self-represented. The Respondent was represented by Mr Richard Clarke (Director). The evidence for the Applicant was provided by the Applicant and Mr Tom Rowley (Director). The evidence for the Respondent was provided by Ms Marlene Millers (Director), Mr Richard Clarke (Director), Ms Gayle Clarke (Director) and Ms Jeanette White (Wholesale Manager).
Relevant legislation
[6] Section 387 of the Act states:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.
[7] Section 385 of the Act states:
385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
[8] Section 396 of the Act states:
396 Initial matters to be considered before merits
FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy
[9] The Respondent employed fewer than 15 employees at the relevant time of the dismissal. Accordingly it is necessary to consider whether the termination of the Applicant’s employment was consistent with the Small Business Fair Dismissal Code (the Code) as set out below.
[10] This Code is established pursuant to section 388 which states:
“388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”
[11] The Code states as set out below:
“Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.
Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response.
Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[12] This decision considers whether there has been compliance with the Code. If such compliance is established then the application must, in accordance with the intent of the legislation must be dismissed. Alternatively the factual matrix must be considered against the legislative factors as set out in s.387 of the Act, to assess whether the termination of employment was harsh, unjust or unreasonable.
Applicant’s submissions
[13] The Applicant was self represented. Whilst the Applicant did not provide a Witness Statement he sought to adopt the Outline of his Submissions as his evidence in the matter; these matters all being within his knowledge. This course was adopted by the consent of the parties and the Applicant was cross-examined accordingly. He also provided further evidence in response.
[14] The Applicant submitted that at no stage did he refuse to provide the necessary passwords and codes as requested by the three directors. He stated that he had conveyed to the three directors that to provide these codes to them would have exposed the Company to security risks and therefore he had wanted to mediate or resolve his security concerns.
[15] He suggested that the solution to the request was that he would provide the codes only to his father, Mr Tom Rowley; as he was certain that he would not distribute them to anyone that would breach the security of the computer system or websites.
[16] The Applicant made a series of submissions regarding the deficiencies in the manner the dismissal was effected and that he had been denied procedural fairness. The Applicant stated that the dismissal had not been undertaken in accordance with the Small Business Dismissal Code and accordingly it was unfair.
[17] The Applicant stated that this same information on the passwords and codes had been requested from him by these directors, three months prior in July 2009 and that he had not provided the information then for the same reasons and he assumed that the issue had been resolved.
[18] The Applicant stated (referring to himself as Damien):
“2. Damien was dismissed from Hills over an alleged refusal to supply the company with domain information.
3. Damien had declared his concerns regarding the security of the domain information several times (communicated via email and in person) and had provided a diplomatic solution which was in line with previous employment expectations, Hills’ initial request and his duties as the systems administrator.
4. Damien never refused to make the information available, he merely sought to resolve the severe security problems he mentioned on several occasions.
…
5. Damien's dismissal aligns closely with the severe breakdown of the relationship between Tom and Marlene and is deemed to be the actual cause of the dismissal given Damien's close relationship with his father Tom.
6. At every point, Hills refused to mediate, preferring to involve costly solicitors.”
[19] The Applicant’s father, Mr Tom Rowley provided evidence regarding the significant contribution his son, the Applicant, had made in establishing the computer systems and websites and that this work had been essential to the progress of the company. His evidence was given in a calm and reasoned manner. He did not question the authority of the three directors to terminate the Applicant’s employment. However it was clear that he considered that the security issues could have been resolved and the dismissal avoided. In the past he had acted to resolve similar issues and the directors, particularly Ms Millers, had appealed to him and relied on him previously to mediate issues with the Applicant. Mr Tom Rowley was in a difficult position given the breakdown of his marriage and as a result, his isolation from the other directors of the business and his obvious loyalty to his son, and respect for his son’s computer knowledge.
Summary of the Respondent’s submissions
[20] The Respondents stated that the Applicant was dismissed for failing to follow instructions given by his employers, namely the three Directors, to provide them with the admin passwords and codes for their computer system. They stated that on three occasions he refused to provide the required information. They contended that the Respondents’ witness statements verify this.
[21] Further, whilst they recognised that the Applicant attempted to infer Ms White was lying to protect her job, her evidence supports the Respondents’ testimony that clear requests were made and the Applicant refused to provide the requested material.
[22] The Respondent submitted that the Applicant made his position clear that he considered that the website and IT were his property; at the meeting on 15 October 2009. The Respondents stated:-
“The final time was at a meeting at the head office of Tom and Barry Pty Ltd on 15/10/2009. Mr Damien Rowley attended the meeting at Head Office and was again asked to provide the admin codes and password. He again refused and advised that the IT and website were his property, not the property of Tom and Barry Pty Ltd. He said that he would give a copy of the passwords and codes to Mr Tom Rowley for safekeeping, but he would not give the codes to the remaining 3 directors. Mr Tom Rowley did not attend this meeting, as relations between Mr Tom Rowley and the other 3 directors was fairly strained at this point.”
[23] The Applicant’s position was reiterated in his witness statement. The Respondent stated that the Applicant contended that in the absence of any written licence agreement, any IT would be the Applicant’s property.
[24] Further, the Respondent refuted that the Directors had condoned his conduct, simply because he had ignored their original request in July 2009. They stated they had again followed up the request in October 2009, and he again claimed ownership of the IT assets.
[25] The Respondent stated that one of the major issues in the first correspondence from their solicitor to the Applicant, summarised “The Intellectual Property Issue” 1 as follows:-
“The Intellectual Property Issue
We understand that you say that you are the owner of the copyright in the various applications of the programs set up by you prior to and in the course of your employment by Hills In Hollywood of documents and other software. This is in dispute between yourself and our clients. In any event, even if you did own the intellectual property in documents of programs you created for the business, it is clearly the case that our clients have the unfettered exclusive right to use these documents in the business. To suggest otherwise, would be contrary to a very clear course of conduct involving yourself and the business owners.
Our clients’ position is that:
1. When the business was being set up you were assisted by our client Marlene Millers and your father to buy your first home with a financial contribution in the vicinity of $50,000.00. This has never been repaid and is considered by our client Marlene Millers to have been a gift on behalf of herself and your father for your assistance in establishing the website and other IT operations for the business.
2. You were then invited because of your father and step-mother’s involvement in the business to work in a full time IT position which you have held since September 2008. You have been an employee of the Hills In Hollywood business since that time.
3. There is no agreement in writing between yourself and the Hills In Hollywood business about the ownership of the intellectual property in the various internet applications which are operated by the business. There is a course of conduct which supports what we have set out earlier, namely that even if you owned the intellectual property in these applications that no court is going to allow you to prevent Hills In Hollywood from retrieving and using all of these applications exclusively. Nor, does it seem to us that you would be entitled to any further payment other than to your legal entitlements which arise on termination of your employment.”
[26] The Respondents queried how the Applicant’s proposed mediation would have resolved the matter, given that the Applicant was claiming ownership of the IT assets and “control of a crucial part of... the business infrastructure”.
[27] The Respondent stated that the Applicant was an employee paid to run and control the company’s IT assets, but he was to do so under their direction and any IT policy he formulated would have to have been approved by the Directors, his employers.
[28] They stated he had no authority to dictate any IT policy or to formulate a policy where he could refuse to follow an employer’s explicit instructions.
The Evidence
[29] All of the evidence has been considered in its entirety; the following extracts are provided. Whilst the Applicant’s evidence was that the request from the directors changed over time, it was clear that it could consistently be understood that they required the access information for the company’s computer system. The Applicant’s position in response to their requests, can be seen from his evidence below. When asked why he would not provide the computer access information he stated as follows:
“What was your response to that?---I said that I had major security concerns with it. I didn't want to give that information out to anybody. Being the only person who understands IT, I was the only one who could really make an educated decision on it, and I had done in the past with previous IT policy, and I said that I had problems with it and, to solve it, I would be quite happy to give the information they requested - give it to Hills in Hollywood, but give it to Tom to put it in a secure holding, because I would know that if anyone asked Tom for it he wouldn't give it over immediately, he'd always ask me, and then I can say that, "Yes, they need it" or "No, they don't."
Give me an understanding of the security problems?---With a web site, especially a company that's based a lot around a web site, your domain name - in this case "hillsinhollywood.com" - is your name. If someone gets access to that information they can then - they can basically change the details and they basically take your identity. Your web site would go down or your web site would be defaced or anything. They'd basically own your entity, and especially if you have a register on an account that has multiple domains in it, then they would have - instantly they would have access to everything, and at no point was that needed for - there was never a reason given why it was needed. It was just wanting to be put on file. I said I was totally happy with that. I've always been happy to. I've never refused the information. I had serious security concerns about it.
**** DAMIEN ROWLEY XXN MR CLARK
When you say you never refused the information - - -?---Yes.
- - - they were asking to put that information on file, weren't they?---Yes.
And you wouldn't give it to them for that purpose?---I said that I would.
That you'd give it to Tom to put it on file?---Yes.
Were you aware that there was a division amongst the directors?---There were two times when this was requested. The first time there was no issue and it was then resolved three months prior, and then on the 14th of the 10th all of a sudden it comes up again, and this is after Tom returned from Europe and the marriage between Marlene and Tom took a turn for the worst and he was asked to leave the company. At that time it all blew up again and they requested the information. I once again said, "This is my stance on it," and - I actually - it's an interesting turn of events that happens on the 15th and it highlights a major communication problem that we've always had, both Marlene, Gail and myself; very hard to talk to each other and this seemed to be the problem and I said - I gave it an email. I said, "There is a major communications problem here. We need to sit down and go through it." My best intentions - like, "I am doing what I'm doing for the company. I have always done that and I want to sort this out because it's negatively affecting the company. Can we organise a time to sit down and discuss these problems and sort it all out so that we can continue working?" and - - -
And what was the response to that?---And that was deemed irrelevant and she demanded the codes in an email within an hour.
You are an employee of the company?---Yes.
**** DAMIEN ROWLEY XXN MR CLARK
Do you agree that Mr Clark - Mr Richard Clark, Ms Gail Clark, Marlene Millers and your father, Tom Rowley, are all the directors?---Yes.
So there's four, isn't there?---Yes.
So do you concede that these codes are their property?---Yes. I've never had a problem giving them that information.
That's inconsistent with your evidence though, isn't it? You're saying that, "I refused to give it to them until we sorted out some particular process with them"?---I never - well, I said that I didn't want to give it to them because of the security concerns that I had, but I didn't have a problem giving it to the company in a secure fashion. If I did that and Tom felt it was necessary to give it - make it available - then I had done everything in my capacity as the administrator and the only person with IT knowledge. I had done everything that I could to secure it. If something happened after that then I couldn't be held accountable for it.
So you would give it to Tom Rowley, one of the directors?---Yes, and I specified this as one of my solutions and I wanted to sit down and discuss this.
So the other three directors were asking for the codes but you would not give them the codes?---I specified that I didn't want to give it to them because of the issues that I had. I never said that I wouldn't give them to them. I wanted - I had - like with any problem that I've ever had, I wanted to sit down and discuss it. If I'd have just said, "Here you go and I think there's a problem with it," it never would have been recognised.
All right?---If I say, "Well, here's the policy that I'm trying to enforce here. Let's sit down and discuss it. Give me the pros and cons." I'm like, "Okay, well, we can't sort this out, we can't do it this way, you're not happy for Tom to do it for whatever reason. Get Tom involved, sit down and go, 'Okay, pros, cons. We have to make it available. That's the only solution.'" That was never afforded to me.
**** DAMIEN ROWLEY XXN MR CLARK
But is it that the security concerns that you talk of - is it that you considered that one of the three directors that are the respondents in this particular matter would give that to someone who would be able to then access the web site?
---Most definitely.
Why did you think that?---Whenever a query would come in, and there's one specific example that I state in my submission, if it's too inconvenient at the time or everyone is busy, security will just be overlooked, and given that they didn't have a knowledge of the IT it would just be, "It'll sort itself out," and that could be giving over all of our domain information where, if there was a policy in place, then that couldn't happen. The reason - a specific reason - is I built retail software for our retail store. There was security - a level of security in that, based around user accounts. That was implemented because there were younger staff in the store and the retail software held pricing - wholesale pricing information and it was deemed that the younger staff - I mean, they're part-time workers shouldn't be given access to the wholesale information. There's big mark-up on the dresses and it would create an issue. During that time while I was developing that, questions were bounced back and forward because we were building the system and I was constantly making changes. I implemented an administrator account for Gail and she would go in and she would check in stock and she would have access to the wholesale information, so that account basically opened everything. Everyone else had limited access accounts. When it became too inconvenient for Gail to have to come in and check stock in and do her admin tasks, rather than asking me to sort things out and do it in a secure fashion, she just gave her user account to everybody because it was too inconvenient for her to have to come in and do it herself. By doing that she has totally avoided all the security and bypassed all of the security in the system without ever telling me and I can't help but think that the same thing, when it becomes too inconvenient, would happen with more serious information.
**** DAMIEN ROWLEY XXN MR CLARK
You were at liberty though, weren't you, to give those codes and to write the sort of evidence that you're giving now - to write to the directors and say, "If in fact you give these codes over to a supplier or a third party, this is the breach of security with the consequences that could happen for this company. You're able to - - -"?---I explained all this and I explained several solutions in giving it over to a third party in the most secure fashion, and they were ignored.
But they are the directors. Isn't that their decision to make?---In the end, yes. As the policy-maker and the only person with IT knowledge, I take it very personally and I will stand up for the policy that I've made and I will do my best to get that across. It's not the first time that I've had this. It's because people don't understand what I'm doing that I've had to take a stance and stop people and explain that this - "It can't happen this way. It can't happen because of this, this and this", and that's never been a problem until everything broke down with Tom. 2
[30] In relation to the final meeting on the Codes, the Applicant’s evidence was as follows:
This is the meeting on?---The 15th. As soon as I sat down, Marlene demanded that I give the - no, sorry. She said, "Did you bring the codes with you?" I was never informed to bring the codes and I said, "No. " "Why not?" I said, "Well, I wasn't told to bring the codes. I didn't expect to have to bring the codes. I expected to sit down and talk about the communication problem, and I expected to sit down and talk about this and resolve it." After that I said - they said, "Well, why not?" I said, "Well, firstly I wasn't" - I didn't -
"I wasn't asked to bring the information and secondly, I have a concern - which I stated before - that I have serious concerns regarding security for the domains and my solution for that is to give it to Tom." I said, "There's no reason for everyone to have access to it. Can you explain why?" And no-one could give me an answer. Instead, they continued to demand this information from me. Rick then said, "Well, it's all our information so you've got to give it to us", and I said, "Well, I'm not actually sure who owns the information, but I'm quite happy to give it to Tom. I've said that. Explain why. Let's discuss this issue", and no-one was interested in that. They continued to demand information from me. I said, "If that's the only reason I'm here" - by this time it was getting heated. "If that's the only reason I'm here then I'm going to leave", and I got up and I left. As I left, from what I gather, it was Marlene who muttered that, "Maybe you should leave the company," to my back, as I left. I walked under the house and out the front and as I did that, I heard someone else say, "Call the solicitors." 3
[31] The Applicant was asked how he would have addressed the security of the Codes with the Directors.
All right. And tell me what you would have discussed at that meeting in terms of exposure, how they would have prevented the security risk?---Firstly, I would have had Tom at the meeting as well because he was one of the directors and he also understood the concerns. But I would go through and explain that, if this information gets leaked out to anybody and someone doesn't - if you give it to somebody and they do the right thing by it, they don't store it properly or they don't have the right - a strong enough password and it gets stolen, it's gone. I hold a very strict security guideline and policy with respect to all of that so that I can be guaranteed that no-one is going to steal it and I can guarantee to the company, I quite happily guarantee to the company, that nobody would steal that information while I'm administering it.
But that's the highest, isn't it, in terms of - that there needs to be security around the communication of that information to third parties?---And storage of that information.
Okay, so that's what you could have set up in terms of conveying that information as to how it's going to be stored and kept confidential?---I could have, yes, told them all of that but I wouldn't have expected the girls to adhere to that because I'd seen in the past when it became too inconvenient for security it just gets handed over and then it would come back to me. 4
[32] Mr Clark questioned the Applicant regarding his position with the Codes as follows:-
So Tom is trustworthy with this information, we're not?---He understood the security concerns regarding this, and if a request was made to him he would pass that on to me before ever doing anything about it and I would be able to check the validity of the statement, the question, check the security about it and handle it appropriately, as the IT manager.
So that information is not to be trusted with us? We're supposed to make policy decisions as long as you're happy with them or Tom is happy with them? We're to plan around that, are we?---As the only IT person there, then obviously any IT questions would be related to me. 5
[33] Ms Millers’ evidence was that the directors acknowledged that the Applicant had IT expertise and made the company’s IT policy but that this did not allow him to dictate where the codes were held in the company.
[34] The Applicant cross-examined Ms Millers in relation to her request for the computer Codes as follows:
But you agreed for me to make IT policy within the business?---Yes, but I didn't - never agreed for you not to hand over the code.
The security - - -?---That's our ownership. That's our property.
The security - - -?---You've got no right to do that.
The security of that information, would that be classified as a policy of the IT department?---No.
No, it wouldn't be?---No.
Security has - - -?---Because at the end of the day, it's a director's decision whether whatever policy you come up with.
So I had no right to inform you of my serious concerns as an educated - - -?
---Yes, which you did.
- - - IT professional - - -?---Which you did.
And you ignored?---Which you did. I didn't ignore. I just asked you for the codes. 6
[35] The Applicant further questioned Ms Millers about his IT policy and the email he sent expressing his concerns regarding the security of the Codes and the communication with the Directors. The Applicant (referring to himself as Damien) questioned Ms Millers as follows, regarding his defence to the requests for the computer information:-
MR D. ROWLEY: Sorry. It was requested through Tom and the bigger problem was that there was a communication - - -?---
MS MILLERS: You see, this is where I struggle with it. I don't know why I have to read all these emails relating to emotional feelings. All I asked for was the - for the codes and you didn't give them to me.
**** MARLENE GAY MILLERS XXN MR D. ROWLEY
MR D. ROWLEY: They weren't emotional feelings, but once again, did I expressly state - - -?
MS MILLERS: ---Damien, that email says how you feel.
Does Damien expressly state his refusal to give the information to you in that email?---No.
To your knowledge, during any email to you, did Damien expressly refuse to give you information?---How long do I have to wait?
Was there ever - - -?---No. You refused to on the day of the 15th. 7
[36] The Applicant maintained that the codes only became the issue when the relationship between the directors became frustrated. He cross-examined Ms Millers on this issue as follows:-
But you can't explain to me what "location of the server means" because you don't understand IT. Is that right?---No. I'm understanding more and more about it every day and I'm getting better at it.
That's inevitable. When Tom returned from a European trip on the 27th of the 9th did you inform him that you no longer wanted him working at Hills?---Yes, I think I did.
Two weeks prior to the big meeting, yes, this all went down?---Could've been.
Your relationship with Tom had obviously taken a turn for the worse at this point?
---A long time ago, yes.
But it was at this point that it obviously got to the point now where you didn't want to work with him, so there was a serious breakdown?---I never wanted to work with him from December two thousand and - - -
That's okay - - -?---Okay.
- - - because up until this point that was never an issue but, now, when Tom returned from that trip - - -?---It was always an issue. 8
[37] Ms Millers’ evidence was that she considered the Applicant was dismissed at the final meeting, but that the decision was confirmed in the further correspondence. She conceded the Applicant’s service had been further used after this date as he had retained the necessary information to access the computer system and they were left with no alternative. The evidence in relation to this issue was as follows:-
MR D. ROWLEY: So you believe you dismissed Damien on the 15th at the meeting - 15th of the 10th?---Yes, yes.
Did you call Tom and ask him to ask Damien to update the web site on the 22nd?
---I know I did ask you to do something after the dismissal because there was no other way we could do it. You set yourself up that no-one could access anything.
Well, that's exactly it. You didn't care how it got done or whether Damien was dismissed?---I just needed it done because Mackay had just opened and we've got obligations to our franchisees. Yes, I didn't care how it got done as long as it got done. 9
[38] The Applicant was paid for this period when the work occurred.
[39] The evidence of Ms Jeanette White corroborated that of Ms Millers and Mr Clarke as follows:
**** JEANETTE ALICE WHITE XXN MR D. ROWLEY
Jan, did you attend the meeting before the meeting with Damien on the 15th of the 10th?---I'm not aware of a meeting before.
Why were you asked to sit in on the meeting with Damien on the 15th?---I was just asked to sit in as a witness.
You weren't told of anything about the situation?---I knew what the situation was, that Marlene had been asking for codes and hadn't been able to get them from you. That was all I knew.
Were you aware that Damien could be dismissed at this meeting?---No...
Did you deem what Marlene said to constitute verbal notice to Damien on the 15th?---No, I didn't consider that she had given you notice. She just said that if you would not hand over the codes, then you would better be leaving the company.
But you didn't deem that to be verbal notice?---No.
Do you know if after Marlene issued this notice, did she indicate to Damien that it was his last day?---No.
Did she give a reason as to why she apparently dismissed him?---Well, I don't know, because I wasn't aware that she had actually dismissed him.
Thank you. Can I please ask your age?---I'm 63.
**** JEANETTE ALICE WHITE XXN MR D. ROWLEY
What qualifications do you have?---As far as what?
As far as working?---I'm the warehouse manager.
Do you have any formal qualifications?---No.
If you were fired today, would you find it difficult to find employment, given how close you are to retirement?---I would, yes. 10
[40] Whilst the Applicant endeavoured to discredit Ms White’s evidence, she answered the questions in a confident and genuine manner as follows:-
MR CLARK: Jan, at the meeting, did Damien say, "They're not your codes, they're mine"?---Yes, he did.
Did he say, "Well, that's all I'm here for," after he wouldn't provide the codes. Then, "I'm leaving." Did he say that?---He said, "Well, if that's the only reason I came here, then I'm leaving." 11
**** JEANETTE ALICE WHITE FXXN MR D. ROWLEY
Right, and what was the next thing she said?---The next thing she said was, "Did you bring the codes?"
Were you aware that Damien was required to bring the codes?---I was aware that you were asked for the codes, yes.
And you were aware of the security issues that I had mentioned previously?---I was aware of the security thoughts you had at that meeting. I wasn't aware of them before the meeting.
You weren't privy to any of the discussions leading up to that incident?---Not face to face. I was aware of discussions going on by email and phone, but that was it. No discussion face to face.
You knew of the existence of a discussion; you didn't know the details of it or the context of it?---No. I didn't know the existence of a specific discussion. I knew that Marlene had asked several times on the phone, because I was in the office, if she could have the codes and she showed me copies of emails that she had sent asking for code. That was my total involvement with any discussions prior to that meeting. 12
Considerations
[41] This matter has some factual similarities to the case decided by Deegan C in Lufra Investments Pty Ltd t/a Best Western Lufra Hotel 13 with regard to contradictory lawful directions being provided to an employee against disputes between family members involved in the management of a business. However the current matter can be distinguished from this case authority, on the basis that a clear directive was given to the Applicant.
[42] The case of Lufra Investments also involved a dispute between a husband and wife, the major shareholders and CEO respectively of the Respondents business. The decision set out the facts as follows:
“In that matter the Applicant’s evidence was that in a telephone call with him on 7 July, Mr Holland (who resides in Queensland) instructed him to clear out a shed (variously referred to as a garage) at the hotel in order to be able to store in it a container of goods about to arrive from China. Over that day and the next day the Applicant cleared space in the shed for the container. Ms Holland was away from the hotel for most of those days. Mr Holland had telephoned on occasion during that period to enquire how the task was proceeding.
Early on the morning of 9 July the Applicant had opened up the hotel and was in the kitchen when Ms Holland asked him what he had done in the shed. He had informed her that he had readied the shed for the container and was told that he had no right touching items that were in the shed that belonged to Ms Holland’s son and that he should restore the contents of the shed to their former position.
The Applicant claimed that he was upset as he had spent some time clearing the shed at Mr Holland’s instruction. He returned to the shed where he received a telephone call from Mr Holland who accepted responsibility for the matter and stated that he probably shouldn’t have given the instruction. Mr Gavin Boon, who had been in the kitchen during the discussion with Ms Holland and was working in the vicinity of the shed, advised him to “just do it to make her happy”. Although he was upset by Ms Holland’s attitude the Applicant proceeded to rearrange the contents of the shed as instructed.
According to the Applicant, a little while later when he returned to reception to turn off some lights he was met by Ms Holland who screamed at him. He said to her, “Judy, I don't want nothing to do with this" and walked away. Ms Holland continued to abuse him and “she come charging at me”. She then screamed, “Get out of here, I don't want you ever back here again. I'll get the police if you come back in”. At that stage the Applicant claimed he started to walk out but Ms Holland said, “Don't ever turn your back on me”. He responded, “Judy, you've got a massive problem” and then went straight home. The Applicant claimed he was “totally shattered” as he had worked at the hotel for 10 and a half years.”
[43] In the case mentioned the Applicant was subject to competing directions from management. However in the current circumstances before me, the Applicant was provided with a clear lawful direction as to the provision of company property. The Applicant’s father, Mr Rowley, whilst he acknowledged the Applicant’s expertise, he did not object to the direction that was provided to the Applicant. Accordingly unlike the case above, the Applicant was not caught between competing directions, but only the direction of the three directors and his refusal to comply with the direction to provide the passwords to these directors.
Consideration of the Small Business Fair Dismissal Code
[44] The Code requires an assessment of the Employer’s actions in regard to the dismissal, as to whether they comply with the requirements of the Code.
[45] The Applicant claimed that the dismissal was inconsistent with the Small Business Fair Dismissal Code. The procedural matters pertaining to the Code have been considered, it is clear that the procedure could have been improved. However, clear requests were made to the Applicant further to this he was requested to attend a meeting where the directive was again plainly made. The Applicant refused citing his own reasons, as to why the directors could not be trusted with the information. Whilst strict compliance has not been effected in the manner of the dismissal against the Codes requirements, in the alternative the factual matrix is to be considered against the criteria in s.387. On the evidence there was a valid reason for the dismissal. The Respondent’s business relied on the website promotions and the computer system was also integral to the franchise part of the business. The procedure provided for a clear lawful direction to the Applicant. The Applicant refused this reasonable direction.
[46] In this matter, the directors indicated that they required the operational information for the company’s computer operations. The Applicant based on his IT knowledge was aware of the required information. It seems logical that the breakdown of Mr Rowley and Ms Miller’s marriage precipitated the further request to have copies of the computer information but as stated there was no evidence that the three directors intended to keep the information from Mr Rowley. The request of the directors to maintain copies of this information in their head office was reasonable and prudent business practice and was possibly considered a protective measure given the alignment of the Applicant with his father in the circumstances of the breakdown of the marriage.
[47] The information was clearly sought from the Applicant. The directors did not have an obligation as the Applicant, required of them, to justify their request or to convince him of how they would maintain their security. Failure to maintain the passwords appropriately would obviously compromise their own business operations. The three directors seemed aware that the codes provided access to the business and that such actions would have been contrary to the very desire to hold the information to maintain the continuity of the business operations.
[48] The Applicant was invited to a meeting with the three Directors, he was requested to provide the passwords. The evidence confirmed that he refused this request.
Section 387 The criteria for determining whether a termination of employment was harsh, unjust or unreasonable will now be dealt with
[49] Further to the consideration of the compliance with the Small Business Fair Dismissal Code there were some procedural deficiencies in the manner that the termination was effected therefore it is necessary to provide an examination of the provisions in s.387 and the associated reasoning.
Section 387(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)
[50] The Applicant was dismissed for failing to follow a lawful direction. The websites and computer systems were clearly the Respondent’s property and were inoperable without the passwords and codes to access them. The Directors’, Ms Millers and Ms Clarke’s evidence was credible and passionate in explaining the hard work they had invested in building the business. Accordingly they reasonably questioned why the Applicant would consider they would wish to breach the security of the password information that may then jeopardise the business. The Applicant’s concerns regarding their potential conduct that may breach the security of the computer system could have been explained and documented for the directors. He could also have discussed with them strategies for maintaining the security of the codes, that did not simply involve his father being the only director that retained custody of the codes. In any event, the safe custody and security of the web system and ultimately viability of the company operation were their responsibilities as directors of the business.
[51] The Applicant’s IT work had, on the evidence, been valuable in allowing the business to progress. Ms Miller’s evidence was that the Applicant had also been well remunerated for such.
[52] Other allegations were canvassed between the parties that I don’t intend to document in this determination as whilst they may be relevant to the demise of Mr Rowley and Ms Miller’s relationship and the split of the Directors business relationship, they are not relevant to the dismissal. I have however considered the Applicant’s submission that his dismissal was connected to the collapse of the director’s relationship. It is unlikely given the firm reasoning of the directors, that even if there had been unity in the company, and the Applicant had refused the other directors’ request for the codes and he had only agreed as he did to provide them to Mr Rowley, that they would have agreed to this. They were seeking to have this information accessible to them in head office. Whilst the Applicant contended that the directors were content with this course in July 2009, Ms Miller refuted this and maintained that the directors at all times intended to pursue the Codes. This essential computer information significantly belonged to all of the directors. There was no evidence presented that the three directors would keep the information from Mr Tom Rowley, although Mr Tom Rowley’s involvement in daily operations of the business, did appear to have been affected by the breakdown of the marriage.
[53] The Applicant was an employee of the Company and had an obligation to follow the lawful direction of the directors. The information requested pertained to the necessary operation of computer assets of the business. The Directors’ request was reasonable that they also hold the relevant “keys” or passwords to the computer operations of their business. The IT operations were part of the business assets and the Applicant had no basis to withhold this information from their custody.
Whether the person was notified of that reason;
[54] The Applicant was notified by Employers that they required the Codes. A meeting was called at which the information was clearly requested and he refused. He also refused to provide them subsequent to the meeting. He was made aware that his employment was in jeopardy. Whilst I don’t consider that his employment was formally terminated at the final meeting. The written correspondence as set out does clearly notify of the decision and therefore two weeks’ wages in lieu of Notice were payable from the point 15 October 2009. Whilst the Applicant sought further payment for the wages in lieu of notice and work undertaken prior to his dismissal being effective to order such payment is not within the jurisdiction of the Act. Furthermore, the invoices were for work performed more than a year ago. In the circumstances the paid invoice equates to the notice payment.
Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
[55] The Applicant was provided with a series of opportunities to respond to the request but specifically at the final meeting on 15 October 2009.
Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal;
[56] The Applicant did not complain of a refusal or denial by the Respondent to allow for a support person for him.
If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal;
[57] This termination of employment relates to the failure of the Applicant to repeatedly refuse to follow a lawful direction.
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 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;
[58] The Respondent was a small business with an absence of dedicated human resources personnel or policies. Accordingly, the procedures adopted should be considered in light of the limited resources available to this small business employer to manage the situation.
Any other matters that FWA considers relevant
[59] The fact that familial relationships are also intertwined with the employment relationship has been considered. The requests to the Applicant to comply with a lawful direction for the provision of the information and his repeated refusal culminated in his further refusal of their request at the meeting on 15 October 2009 to provide the computer passwords. His actions provided a valid reason for the dismissal.
[60] For the aforementioned reasons the termination of employment is not considered to be harsh, unjust or unreasonable. Accordingly, the application is dismissed. I Order accordingly.
COMMISSIONER
Hearing details:
Monday 29 March 2010,
Brisbane
Final written submissions:
Monday 12 April 2010
1 (Page 2 - 1/2/2010 - Applicant’s submission - Attachment M
2 PN106-125 of Transcript.
3 PN154 of Transcript.
4 PN213-215 of Transcript.
5 PN219-220 of Transcript.
6 PN992-PN1000 of Transcript.
7 PN1056-1060 of Transcript.
8 PN1095-1101 of Transcript.
9 PN1137-PN1138 of Transcript.
10 PN1197-1210 of Transcript.
11 PN1217-1218 of Transcript.
12 PN1229-1233 of Transcript.
13 [2009] FWA 574.
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