Mr Daniel Hember v Greater South East Projects Pty Ltd T/A Red Rooster
[2012] FWA 6098
•31 OCTOBER 2012
[2012] FWA 6098 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Daniel Hember
v
Greater South East Projects Pty Ltd T/A Red Rooster
(U2011/13659)
COMMISSIONER ASBURY | BRISBANE, 31 OCTOBER 2012 |
Application for unfair dismissal remedy - Employer not restricted to reason given for dismissal for purposes of establishing valid reason pursuant to s.387(a) whether or not facts upon which dismissal based were known at point of dismissal - Where employer relies on reason not given at time of dismissal as valid reason for purposes of s.387(a) issues of procedural unfairness may arise - Applicant dismissed for theft - Allegations of theft not able to be substantiated - Employer entitled to advance alternative of non-compliance with policy and procedure in relation to cancelling orders and consumption of product as valid reason for dismissal - Finding that employer had valid reason for dismissal - Finding that employee was not afforded procedural fairness so that on balance dismissal was unfair - Compensation awarded.
OVERVIEW
[1] This is an application under s.394 of the Fair Work Act 2009 (the Act) by Mr Daniel Hember, for an unfair dismissal remedy. The Respondent is Greater South East Projects Pty Ltd T/A Red Rooster (GSEP) the Mackay franchisee for Red Rooster, and operates four franchises in Mackay. Mr Hember commenced full time employment with Red Rooster in 2001. GSEP purchased the business in or about 2007. Mr Hember commenced with GSEP in the position of Store Manager Mackay, effective 16 April 2007. Mr Hember was dismissed on 13 November 2011.
[2] The application was made on 22 November 2011, within the time required in s.394(2) of the Act. Mr Hember is a person protected from unfair dismissal as defined in s.382 of the Act. GSEP is not a small business and the question of whether the dismissal was consistent with the Small Business Fair Dismissal Code is not relevant. The dismissal was not a redundancy.
[3] The matter was dealt with by way of a hearing, as it was considered that this was the appropriate course, having taken into account the matters set out in s.399 of the Act and the views of the parties. Permission was granted for Mr Hember to be represented by Mr Smart from SR Wallace & Wallace Lawyers, on the basis that it was apparent that the case would involve allegations of theft against Mr Hember, and representation would allow the matter to be dealt with more efficiently, taking into account its complexity.
[4] GSEP was represented by its managing Director, Mr Allen. At 12.10 pm on the first day of the hearing Mr Allen sought an adjournment, and when the matter resumed at 1.33 pm, Mr McLennan of Counsel sought permission to represent GSEP. Permission was granted, but an application for a further adjournment until the next day was refused, on the basis that the hearing dates had been set for over three months, and Mr Hember’s witness statement and submissions had been provided to GSEP in accordance with Directions well in advance of the hearing. Mr McLennan was granted a two hour adjournment to prepare to take over the conduct of the case for GSEP.
THE ISSUES IN DISPUTE
[5] In his application for an unfair dismissal remedy, Mr Hember asserted that his dismissal was unfair on grounds including:
a) There was no valid reason in relation to his capacity or conduct;
b) He was not notified of a valid reason for the dismissal other than a suspicion of theft;
c) He was not given an opportunity to respond other than to deny the accusation of theft;
d) He was not given an opportunity to have a support person present having been asked to attend a meeting with the employer about an unrelated matter; and
e) He was not given any warnings about unsatisfactory performance prior to his dismissal.
[6] At a Non-compliance Hearing on 28 March 2012, for the purposes of considering whether GSEP should be granted a further period in which to file and serve its submission and witness statements, Mr Allen stated that Mr Hember had engaged in conduct including stealing large amounts of money from the Company; taking money from the safe and placing it in his wallet; and stealing stock. These assertions were repeated in the material filed on behalf of GSEP and in statements made by Mr Allen on the first day of the hearing during the period when he was conducting the case for GSEP.
[7] Upon taking over the conduct of the case for GSEP, Mr McLennan submitted that the valid reasons for the dismissal were related to breaches of policy on the part of Mr Hember and that Mr Hembers’ excuses for these breaches were dishonest. It was further submitted that Fair Work Australia is permitted to consider valid reasons for a dismissal which were not relied upon notwithstanding that those alternative valid reasons were within the knowledge of the employer at the time of the dismissal. The position at law is that: “it is enough that upon the true facts a party is entitled to act as he has done and his justification is independent of his own knowledge of the facts. 1 In support of this submission, Counsel for GSEP cited the High Court decisions in Shepherd v Felt and Textiles of Australia Ltd2and Concut Pty Ltd v Worrell3.
[8] It was submitted for Mr Hember that in deciding whether a dismissal is harsh, unjust or unreasonable, the Tribunal must look to the misconduct or inference actually relied on by the employer, and that it is not open for the employer to simply “change its mind” about the reason for a dismissal. The Tribunal is not permitted to determine whether, on the evidence before it, there is another reason for the dismissal which although not relied upon, is otherwise valid. The only exception to this proposition is said to be where circumstances in existence at the time of the dismissal which were not then known, later come to the knowledge of the employer. 4
[9] The argument advanced for GSEP raises the issue of whether an employer, having given a reason for dismissing an employee at the point the dismissal was effected, can assert that there was another valid reason for the dismissal, based on the same facts, for the purposes of defending an application for an unfair dismissal remedy.
LEGISLATION
[10] By virtue of s.385 of the Act, a person has been unfairly dismissed if FWA is satisfied that:
“(a) the person has been dismissed;
(b) the dismissal was harsh, unjust or unreasonable; ..” and
[11] In deciding whether a dismissal was harsh, unjust or unreasonable, FWA must take into account matters set out in s.387 of the Act as follows:
(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 the dismissal; and
(e) If the dismissal related to unsatisfactory performance – 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 FWA considers relevant.
[12] The Tribunal is required to consider the factors in s.387 and to weigh the evidence and material in relation to them, to decide on balance, whether a dismissal was unfair because it was harsh, unjust or unreasonable. The question of whether an employer had a valid reason for the dismissal of an employee, is one of the factors required to be considered, and is not determinative.
[13] A valid reason for dismissal is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.” 5 The reason for a dismissal must also be defensible or justifiable on an objective analysis of the relevant facts6, 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.7
[14] The question of whether there was a valid reason for a dismissal, is answered by reference to the facts that existed at the time of the dismissal. The validity or otherwise of a reason for dismissal is determined objectively. Shepherd v Felt and Textiles of Australia 8involved a contractual relationship of principal and agent, and a claim for damages for termination of that contract by the agent. Concut Pty Ltd v Worrell9involved a contract of employment and a claim for damages for wrongful dismissal.
[15] In both cases, it was held that a claim for damages can be resisted on the basis of misconduct which was not known to the principal/employer at the time of the termination. However, those cases do not stand as authority for the proposition that misconduct not relied on as a reason for dismissal can only constitute a valid reason in circumstances where it was not known to the employer at the time the dismissal was effected. In Shepherd, his Honour Justice Rich observed that:
“The suggestion faintly made that, because the defendant was unaware of the plaintiff’s misdeeds until after the termination of the contractual relationship, they could not constitute a defence, is an ancient heresy to which I am surprised to find any surviving adherent. In 1838 Tindal C.J. expressed the view that when a party is discharged and a reason assigned at the time, another reason may afterwards be proved...The question is whether the defendant was entitled to do what it did, and not whether the reason why it exercised the rights it in fact had, was a good one or a bad one... 10 [citations omitted] [emphasis added]
In that case his Honour Justice Starke also said that:
“The fact that the appellant’s misconduct was unknown to the respondent at the time of the termination of the agreement is quite immaterial. If there were, in fact, any circumstances in existence at the time of the termination of the agreement which could have justified the respondent in so terminating it, then it may justify the termination by subsequent proof of those circumstances...” 11
Further, his Honour Justice Dixon said:
“It is well established, however, that a servant’s dismissal may be justified upon grounds on which his master did not act and of which he was unaware when he discharged him...It is true that the agreement between the appellant and the respondent does not amount to a contract of service. But the rule is of general application in the discharge of a contract by breach, and enables a party to any simple contract who fails or refuses further to observe its stipulations to rely upon a breach of conditions, committed before he so failed or refused, by the opposite party to the contract as operating to absolve him from the contract as from the time of such breach of a condition whether he was aware of it or not when he himself failed or refused to perform the stipulations of the contract. ‘It is a long established rule of law that a contracting party, who, after he has become entitled to refuse performance of his contractual obligations, gives a wrong reason for his refusal, does not thereby deprive himself of a justification which in fact existed, whether he was aware of it or not.’...”. 12 [citations omitted]
[16] In Concut the majority of the High Court referred to the passage from the judgment of his Honour Justice Dixon set out above as a rule of general application with respect to the discharge of a contract by breach. 13
[17] Further, his Honour Justice Kirby in his judgment in Concut set out five applicable legal propositions, including:
“The particular misconduct of the employee, upon which the employer relied in this case, was not known to the employer at the time of the employee’s dismissal. It was discovered later and relied on at the trial. However, as a matter of law, it was certainly open to the employer to rely on it. The question was not whether the employer was aware of the grounds to justify the course which the employer adopted. It was whether such grounds and justification existed.” 14
[18] Thus the general proposition established in the cases of Shepherd and Concut is that a claim for damages for wrongful dismissal by an employee may be resisted by an employer, on the basis of facts in existence at the time the dismissal was effected, whether known to the employer or not, and in circumstances where the employer did not rely on those facts as the reason for the dismissal. Further, the cases are also authority for the proposition that where a wrong reason is given for a dismissal, the employer is not deprived of the ability to justify the dismissal on other grounds, whether or not the facts that support those grounds were known to the employer at the time the dismissal was effected, provided the facts existed at that time. In my view the principles established in those cases are also applicable to determining whether there was a valid reason for a dismissal for the purposes of s.387(a).
[19] The cases cited in submissions on behalf of Mr Hember do not support the proposition that facts which were in existence at the time of a dismissal but not relied on by the employer as reasons for a dismissal, may only be raised as a valid reason if they were not known to the employer at the time of the dismissal.
[20] Byrne v Australian Airlines 15involved a claim for breach of an award provision that required that termination of employment not be harsh, unjust or unreasonable. The judgment of their Honours Justices McHugh and Gummow observed that:
“..the primary judge was bound to consider whether, on the evidence given at the trial the respondent could resist an allegation of breach of cl 11(a), provided that the evidence concerned circumstances in existence when the decision to terminate was made.” 16
[21] In Australia Meat Holdings Pty Ltd v McLauchlan 17a full bench of the Australian Industrial Relations Commission was considering whether a dismissal was unfair because it was harsh, unjust or unreasonable, under s.170CG(3) of the Workplace Relations Act 1996. That provision was in the following terms:
“(3) In determining, for the purposes of arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
(a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer’s undertaking, establishment or service; and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee - whether the employee had been warned about that unsatisfactory performance before the termination; and
(e) any other matters the Commission considers relevant.”
[22] The appellant employer argued in that case that the termination could not be harsh, unjust or unreasonable, because it was determined in a reasonable fashion on the facts available at the relevant time. In rejecting that proposition, the Full Bench noted that the objects of Division of the Workplace Relations Act 1996 dealing with unfair dismissal, included that the procedure and remedies were intended to ensure that “a fair go all round” is accorded to both the employer and the employee concerned. The Full Bench also held that the issue of whether there was a valid reason for the termination is not determinative, but is only one factor which the Commission must have regard to. Further, the Full Bench noted:
“The second point to be made about s.170CG(3) is that it does not, in terms, limit the Commission’s consideration of an application to whether the employer had reasonable grounds on the facts at the relevant time for terminating the applicant. Indeed, the requirement in s.170CG(3)(e) to have regard to any other matters the Commission considers relevant appears to be inconsistent with the limitation suggested by the appellant.” 18
The statutory provisions considered by the Full Bench in Australia Meat Holdings v McLauchlan are very similar to those in s.387 of the Act and the conclusions reached by the Full Bench in that case are apposite in the present case. The cases establish that at a hearing into an application for an unfair dismissal remedy an employer may assert that there was a valid reason for the dismissal on the basis of:
• Facts which existed at the time the dismissal was effected but were not known to the employer, and came to light after the event; or
• Facts known to the employer when the dismissal was effected, but not relied on as the reason for the dismissal.
[23] Further, where the employer has drawn an incorrect conclusion on the basis of facts known at the time the dismissal was effected, that employer can advance a different conclusion as a valid reason for the dismissal, in response to an application for an unfair dismissal remedy.
[24] The question of whether there is a valid reason for a dismissal is only one of the factors required to be considered when the Tribunal is deciding whether a dismissal is unfair because it is harsh, unjust or unreasonable. A dismissal may be:
• | harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct; |
• | unjust, because the employee was not guilty of the misconduct on which the employer acted; and/or |
• | unreasonable, because it was decided on inferences which would not reasonably have been drawn from the material before the employer. 19 |
[25] When the matters in s.387 are weighed for the purposes of considering whether a particular dismissal was harsh, unjust or unreasonable, it may be that where the employer demonstrates that the employee engaged in serious misconduct, procedural deficiencies will be outweighed so that on balance, the dismissal is not unfair. An employee who engages in an act of misconduct may also be found to have been unfairly dismissed because the misconduct was not sufficiently serious to justify dismissal or to outweigh deficiencies in procedural fairness or because of other extenuating circumstances particular to the dismissed employee.
[26] It is also the case that an employer who advances a reason at the time a dismissal is effected, and then advances a different reason at a hearing into an application for an unfair dismissal remedy, risks a finding that the dismissal is unfair on the basis of the other factors set out in s.387. It may be difficult to establish that an employee was notified of the reason for his or her dismissal, and given an opportunity to respond to that reason, in circumstances where an entirely different reason is relied on at the hearing as a valid reason for the dismissal.
EVIDENCE
CCTV Footage
[27] As part of the material provided in support of its case, GSEP provided a copy of CCTV footage from certain dates upon which it was asserted that Mr Hember cancelled or cleared orders and consumed product in the workplace. According to the witness statement of Mr Allison 20, that footage showed some fourteen incidents in the period from 18 to 20 October 2011 including four incidents where Mr Hember consumed food and did not pay for it; eight incidents where orders were “cleared” from the cash register using the managers swipe card to cash a zero value and the order was paid for by the customer; one refunded order where no money was handed to the customer; and one incident where money was placed into Mr Hember’s wallet from the safe float.
[28] In his witness statement in reply, filed on 26 April 2012, Mr Hember said:
“I have reviewed the statements filed by the Respondent and also viewed the video footage provided by it.”
[29] At the commencement of the hearing, Mr Hember’s legal representative advised that it was conceded that the CCTV footage showed the conduct described in Mr Allison’s statement, but the conclusions to be drawn from that conduct were not conceded. It was not conceded that the CCTV footage showed Mr Hember removing money from the safe float and placing it in his wallet. Notwithstanding this concession, Mr Allen (who was conducting the case for GSEP at the relevant time) maintained that the footage should be viewed by the Tribunal.
[30] When Mr McLennan took over the conduct of the case for GSEP, Mr Hember was cross-examined about the CCTV footage, and indicated that he had been provided with the footage, and had looked at it. Mr Hember stated that he would be able to refer to parts of the footage on 18 and 19 October 2011, showing that he had: re-entered cancelled orders into the system; 21 gone to the front till to check on the average spend statistic;22 written down cancelled orders on a piece of paper kept on his person for this purpose;23 and written down food and drinks consumed by him to be paid for at a later point.24
[31] At the conclusion of the first hearing day, leave was given for Mr Hember to be recalled on the second day to identify parts of the CCTV footage for 18 and 19 October 2011 said to demonstrate the matters he had asserted. Leave was granted on the basis that Mr Hember said that he would be able to identify relevant parts of the CCTV footage after viewing it overnight. Under further cross-examination on the second hearing day, Mr Hember said that on the previous night he had watched approximately one hour of the footage and was unable to identify any part of it demonstrating those matters.
[32] Mr McLennan was also asked to consider the concession made by the legal representative for Mr Hember in relation to the CCTV footage, and indicate whether the footage should be viewed in these proceedings. The following exchange took place between the Tribunal and Mr McLennan in relation to the footage:
MR MCLENNAN: I tender that footage.
THE COMMISSIONER: Do you expect I’ll look at it?
MR MCLENNAN: No. The caveat being if in my submissions I find a specific time which I’d ask you to look at, then perhaps if you could do that.
THE COMMISSIONER: Okay. I guess we’ll ...
MR MCLENNAN: According to the applicant there’s nothing to see, so probably not.
THE COMMISSIONER: We’ll mark that as exhibit 8.
THE COMMISSIONER: But it would be unlikely that I would go off on an exercise looking at footage in dealing with submissions. If you wanted that you might have to try to re-open the proceedings. Because if it shows Mr Hember and you want me to look at it, he probably needs to be invited to comment on it. It would be a bit unusual that I would look at footage that wasn’t shown in open proceedings when someone was telling me what I’m meant to be looking at while giving evidence”.
MR MCLENNAN: I think there’s a case on that point.
THE COMMISSIONER: Perhaps it’s one you’ll have to deal with in your submissions. 25
[33] There was no argument advanced by Mr McLennan in final submissions, in relation to whether I should view the footage and the basis upon which such a viewing would be conducted. Instead specific references were made to the footage and what it was said to show. It was contended for Mr Hember that I should not engage in an exercise of viewing the footage at large, in circumstances where GSEP sought to have adverse inferences drawn from it.
Mr Daniel John Hember
[34] Mr Hember said that he was notified by Mr Jeremy Allison, the Operations Manager, that he had organised a meeting on 13 November 2011 with Mr Allen. Mr Hember believed that this meeting was in relation to discussing serious maintenance issues at the Canelands store, which he had been raising for some time, and which were the subject of a four page list Mr Hember handed to Mr Allen at the meeting.
[35] Mr Hember said that at the meeting on 13 November 2011 he was asked by Mr Allen whether he thought the safety issues were the reason the store was not meeting sale targets, and was confused as he believed that the store was making budget. Mr Hember responded by saying: “If the store wasn’t such a safety hazard and was in full working order, we would be able to meet your targets.”
[36] According to Mr Hember, Mr Allen said words to the effect that another Store Manager from the Greenfields store had been fired for stealing $30,000 and that that Store Manager had named Mr Hember as the ringleader, and said that Mr Hember taught him everything he knew about stealing. Mr Hember said that Mr Allen then accused him of stealing from the Canelands store over the last three months and implied that he had stolen a similar amount to that stolen from the Greenfields store. Mr Allen also told Mr Hember that he liked him because he had a house and he could recover the stolen money by taking Mr Hember’s house.
[37] Mr Hember said that Mr Allen and Mr Allison stated that the reasons they thought he was stealing money was due to him exchanging notes in the safe; inappropriately using the EFTPOS machine; and pocketing the money from catering orders. Mr Hember conceded that he exchanged his own money, as well as Social Club money, from funds held by the Respondent in the safe. Mr Hember said he was collecting money for a social club event and he exchanged the small notes given to him by staff for larger notes from the safe. Mr Hember believed he was allowed to do this as he had been told in his original training that it was ok to bring in coins and change them for notes.
[38] In relation to the EFTPOS machine Mr Hember said that he did not know his PIN and would get cash out by swiping his card; entering the amount of money he wished to withdraw; signing the receipt; taking the money from the cash draw; and then placing the receipt in the cash draw. Mr Hember believed that he was allowed to do this on the basis of what he was told in his original training and because the previous Operations Manager had done the same thing with larger amounts of money. Mr Hember said that as far as he knew the money went straight from his credit card to GSEP’s bank account so that there was no loss from the transactions.
[39] In relation to catering orders, Mr Hember said that most are from businesses which require tax invoices. When GSEP changed to new cash registers, the company’s ABN wasn’t displayed on the receipts, so Mr Hember printed out a document from the computer to provide to the customers until the problem was fixed. Mr Hember said that he stated that he had raised this issue with Mr Allison, and that Mr Allison confirmed that this was the case.
[40] Mr Hember said that following his explanation, Mr Allen said words to the effect of: “I know you have stolen from me and I want it back. Go away and think about things and come back to me with a number.” Mr Hember said that this confused him. Mr Allen also said: “Ring me by close of business tomorrow and give me a number in dollars you are willing to pay me to stop me going to the police.” Mr Hember responded with words to the effect of: “I may not be perfect, but I’m not a thief and I wouldn’t steal from you”.
[41] Mr Hember was then notified by Mr Allen that his employment was terminated on the spot. Mr Hember was required to return his store keys and card but was informed that he could keep his car but had to pay out the remaining amount. Mr Hember denied that he had stolen from GSEP. Mr Hember also said in his evidence, that the real reason for his dismissal was that he was about to become entitled to long service leave, and had asked about this on several occasions.
[42] In his evidence in reply to that of Mr Allen and Mr Allison, Mr Hember said that he had viewed the video footage provided by GSEP and admitted that it showed him taking food and eating it. Mr Hember said that the footage did not show that when he did this, he made a list of the food and drink and paid for it in bulk on a regular basis, usually weekly. This practice was followed because the store was busy and it allowed Mr Hember to maintain service speed statistics which were a performance measure for the store. Mr Hember also asserted that Mr Allen and Mr Allison were aware of this practice. When Mr Hember was asked about his knowledge of Red Rooster policy and procedure in relation to staff eating food, his response was: “You pay for it when it’s bought - so, sorry, you pay for everything you eat” 26.
[43] Mr Hember also agreed that the footage showed him clearing orders from the till. This practice involved clearing a number of smaller orders from the till after taking customers’ money, and then putting those orders back through the till at a later stage. The result of this was to increase average spend. This was a performance measure for the store and Mr Hember maintained that he engaged in this practice because he noticed that when the average spend budget was achieved, the morale of staff was increased. Conversely morale was low when the average spend budget was not reached. Mr Hember also said that it was difficult to meet the average spend budget at the Canelands store because the fit out was dated and there were ongoing maintenance problems.
[44] Mr Hember said that this practice had no effect on the overall performance of the store as he was not taking money out of the till. Further Mr Hember said that the daily figures sheet disclosed by GSEP indicated, for example, that on 18 October 2011, there were cleared orders totalling $200.38 but the cash variance after banking was only $0.36. Mr Hember also asserted that other store managers engaged in this practice and had not been dismissed.
[45] Under cross-examination by Mr Allen, Mr Hember maintained that he did not remember attending a meeting in late 2011 where issues associated with managers stealing food were discussed and where the requirement for food to be paid for at the time it was taken, was reinforced. Mr Hember agreed that stealing food from GSEP was a serious matter and that employees had been dismissed from time to time for this. Mr Hember also agreed that he took food when working, and a drink on most shifts, but maintained that he had various practices for keeping a record of items he took, including keeping the information in his head, writing it on pieces of paper and leaving them on the computer, and typing a list of food consumed. Mr Hember further maintained that it was his practice to pay for food and drinks he consumed at a later time, sometimes on a weekly basis and sometimes the next day. Mr Hember also said that on occasion he would pay for drinks in advance. Mr Hember maintained that his previous manager had given him permission to use these methods to pay for food and drinks consumed at work.
[46] Mr Hember agreed that he kept his wallet on his person during working hours, and would have been able to pay for food and drinks using either cash or EFTPOS, at the time he took them. In relation to clearing orders, Mr Hember said under cross-examination by Mr Allen, that he used his manager’s card to do this. When asked about the number of occasions upon which he engaged in this practice, Mr Hember said: “Well some days it would be zero. Some days it could be high as a couple...two three sometimes four...Sometimes four, as low as zero.” 27
[47] Mr Hember said under cross-examination by Mr Allen, that the usual circumstances where an order would be cleared would be where a customer drives away without paying for an order, or does not have money or a wallet to pay. Mr Hember also agreed that on some occasions he gave food to customers, notwithstanding that he had cleared the relevant orders. Mr Hember said that he did this because morale was low and he combined two orders into one, to boost the average spend for the store. Further, Mr Hember agreed that when he did this, there was no detail on the till roll in relation to the product, and that the only record that could be obtained was a readout of the total number of cancelled orders and their total value.
[48] Under cross-examination by Mr McLennan, Mr Hember said that he combined orders because there were certain things that had to be done in relation to speed of service and average spend and then said the combined orders related only to speed of service. Mr Hember explained this inconsistency in his evidence by saying that it was the first thing that came to mind. 28 Mr Hember also disagreed with the proposition that he brought up the issue of speed of service at the termination meeting.
[49]In response to the proposition that the entire crux of this case was the cancelling of orders and that he could have reviewed CCTV footage and identified where it showed that he re-entered cancelled orders, Mr Hember said that he did not go into that much detail. In relation to the figures for average spend, Mr Hember said that these were printed out at the front till and either brought to him or collected by him, to be entered into a computer. Mr Hember said that when he combined orders he kept a record of those being cancelled using a pen and paper kept next to the till or in his pocket or behind the counter.
[50] In response to a question from the Tribunal, Mr Hember said that the cleared orders had been paid for with cash or EFTPOS and that generally it was cash. Mr Hember also agreed in response to a question from Mr McLennan that another employee had been prosecuted for stealing money by cancelling orders and dismissed on 4 November 2011. Further, Mr Hember agreed that the danger in cancelling orders where food had been given and money taken, was that one could potentially keep the cash.
[51] Mr Hember maintained that the average spend figure had nothing to do with his performance, but related to staff morale and gave staff a sense of achievement. Mr Hember also agreed that the average spend figure was used by senior staff to assess how well the business was performing and that the figure was wrong in the store he was managing due to his practice of cancelling orders. Mr Hember maintained that the figure was not important and was not for any gain, but agreed that what he did in relation to the figure was not in accordance with policies and procedures. Mr Hember later gave contradictory evidence to the effect that his conduct with respect to the average spend statistic was not in breach of policy.
[52] Mr Hember agreed that he had worked for Red Rooster for a total of nine years and was generally familiar with the operating policies and procedures. Mr Hember further agreed that part of his role was to train employees about those policies and procedures.
Mr Jeffrey William Allison
[53] Mr Allison is the Opeations Manager for GSEP. According to Mr Allison the reasons for an order to be cancelled or cleared off the register system are that the customer has objected to the price of a product or has just driven off without collecting their order from drive through window. The clearing of an order occurs when it has not been paid for and the customer does not receive the food. There would be no reason for an order to be cancelled in circumstances where the customer paid for the food and it was handed over.
[54] Mr Allison said that if an order was cleared from the register in circumstances where the food was given to the customer, there would be a positive variance in the till in cash. If the customer paid by EFTPOS then the till would have a positive variance which could be reconciled by the removal of the equivalent amount of cash. As an example Mr Allison said that if a customer paid $20 for an order and was given the food, and the order was subsequently cleared from the register, there would be an additional $20 in the register. If that $20 was removed, the sales would reconcile with money in the register. If a customer paid for a $20 order by EFTPOS and that order was cleared from the register, if $20 cash was removed from the drawer, and the EFTPOS receipt placed into the drawer, the register would balance. Mr Allison agreed that in both cases cash could be taken and it would not be possible to identify whether this had occurred.
[55] Mr Allison said that he investigated CCTV footage for 18, 19 and 20 October 2011, because there were a significant number of cleared orders on those days in excess of the usual number which is between two and four per day. Mr Allison also said that Mr Hember was the night duty manager on those dates, and as such his role was to close off registers and reconcile cash and EFTPOS with gross sales on the register. Further, Mr Allison said that on those dates there was no incident where any manager other than Mr Hember had cancelled orders, given out food and received money in relation to cancelled orders.
[56] In relation to the “average spend” measure, Mr Allison said that this is the total number of net sales divided by the number of transactions processed on the day, to give the average amount spent by customers. This figure is used by upper management as a basis for determining whether new products or up-selling to large “combos” should be used for promotions aimed at driving up average spend. The figures for the average spend are printed out at a master register by the manager at the front counter and then entered into a computer spread sheet in the manager’s office. It would be highly unlikely that the figures in the spreadsheet could be viewed from outside the manager’s office, particularly given the other figures set out in the spread sheet.
[57] Mr Allison said that the only way for staff to know what the amount of average spend would be is if they were informed by management. This would generally not be a matter discussed with junior employees and it would be more likely that discussions with such employees would relate to “suggestive selling” or “up-selling” and the impact that this has on the business. Mr Allison also said that the average spend statistic had significance for him and needed to be accurate. It could be a basis for changing how an outlet was managed, is also a measure of the performance of a manager.
[58] Mr Allison explained the process of dealing with customer complaints. This involves complaints about faulty or missing products being entered into a register and customers being provided with replacement products next time they come to the store. This process would not usually involve a refund because the product had already been paid for and the new product would be handed out without going through the cash register. There would be no reason for a refund to be processed if the customer was not present, and any refund would be handed to the customer. Generally the customer would provide the receipt from the order they felt they needed a refund for or the faulty product. If a refund was processed while the customer was not in the store, there would be a positive cash variance in the cash register. This would also not be in accordance with GSEP’s cash handling policies.
[59] Mr Allison said that he could dial in on his mobile telephone and view CCTV footage. On four occasions, Mr Allison had viewed footage showing Mr Hember sitting in the office when he should have been attending to the store, and telephoned Mr Hember to warn him in relation to the requirement to control the store from out on the floor. Mr Allison also gave evidence about a first and final written warning given to Mr Hember about a text message Mr Hember sent to Mr Allison wherein he said: “U can be a real cunt of a bloke sometimes...”. 29
[60] Under cross-examination, Mr Allison agreed that the figures tendered by GSEP in relation to cleared orders, applied from open to closing time of the store, and that it was not possible to establish whether the day or night manager had cleared a particular order, without viewing CCTV footage.
[61] Mr Allison gave evidence about another employee who was dismissed on 4 November 2011, for cancelling orders off the register system resulting in a significant amount of missing money. That former employee, in an interview before his dismissal, stated that he learned this process from Mr Hember. Mr Allison also said that orders could only be cancelled off the system using a special card that was issued to each manager. Cards were only issued to managers and were not used by junior staff.
[62] In relation to staff consuming food and drinks without paying, Mr Allison said that this is a major problem in the fast food industry. It is the policy of Red Rooster in Mackay that product must be paid for before consumption. A number of employees, including managers, had been dismissed for not complying with this requirement and some of those dismissed had been colleagues of Mr Hember’s.
[63] In August 2010, shortly after Mr Allison started work at Red Rooster in Mackay, a meeting of all store managers was held at the Company’s office in Victoria Street. The meeting was called with 48 hours notice, as a result of a theft in the stores. The relevant incident involved a store manager who had been caught stealing two chickens, and had been prosecuted and has a criminal charge against her. Mr Allison said that twelve managers had attended the meeting, including Mr Hember. The dismissal of the store manager was discussed, and Mr Allen told the managers present at the meeting that anyone caught stealing product would be dismissed on the spot. It was also reiterated that product was required to be paid for prior to consumption. This meeting took place after Mr Hember’s former manager ceased employment with GSEP.
[64] In relation to the meeting on 13 November 2011 at which Mr Hember was dismissed, Mr Allison said that Mr Hember asked for the meeting and Mr Allen agreed to conduct it. At the meeting, Mr Hember was asked about cancelling orders off cash registers and agreed that he had done this. Mr Allison said that Mr Hember claimed to have engaged in this process to increase the average spend per customer.
[65] Under cross-examination, Mr Allison agreed it had not been suggested to Mr Hember prior to the meeting that his employment would be discussed. Mr Allison also said that the intention of the meeting was to discuss the allegations made by the employee dismissed nine days earlier. Further, Mr Allison agreed that he had not viewed the CCTV footage said to show Mr Hember clearing orders and consuming food and drinks without paying, before the meeting of 13 November 2011. In response to the proposition that at the meeting, Mr Hember was accused of stealing, Mr Allison agreed that this occurred after Mr Hember admitted that he had cancelled orders. According to Mr Allison, once Mr Hember admitted to this conduct, it was decided that he had engaged in misconduct, justifying dismissal.
[66] Mr Allison agreed that Mr Hember was not told that the meeting was for the purpose of putting allegations of stealing to Mr Hember, but said that it was intended to ask him about cancelling orders. In response to the proposition that he knew that Mr Hember was going to be dismissed before going into that meeting, Mr Allison said that Mr Hember was going to be asked about cancelling orders, as he had been implicated in this process by an employee who had been dismissed for theft. Mr Allison also maintained that it was not intended to dismiss Mr Hember “at that time”. In response to the proposition that a snap decision was made to dismiss Mr Hember, Mr Allison said that Mr Allen dismissed Mr Hember. In response to the proposition that Mr Hember was dismissed for stealing, Mr Allison said: “I suppose the assumption or the conclusion brought from it could be that he was stealing.” 30
[67] Mr Allison agreed that the issue of Mr Hember issuing his own invoices for catering orders was also discussed at the meeting of 13 November 2011. Mr Allison said that Mr Hember had previously been told that he should staple a receipt from the register to the invoices he produced. Mr Allison agreed that there was no evidence that Mr Hember took any of the catering money for his own purposes.
[68] Mr Allison agreed that there was no counselling in relation to the dismissal of Mr Hember and maintained that this was because Mr Hember was dismissed instantly for misconduct. Mr Allison also agreed that there was no written confirmation of the reasons for Mr Hember’s dismissal. Further, Mr Allison agreed that there was no CCTV footage establishing that Mr Hember took cash from registers, but maintained that there were times when Mr Hember was counting cash and was not visible on CCTV footage - for example when Mr Hember was in the office with register drawers on his lap. Mr Allison said that he could not say whether or not Mr Hember took cash.
[69] Mr Allison agreed that if Mr Hember cancelled orders and then put them back into the system, there would be no positive or negative cash balance at the end of the day. Mr Allison also agreed that there would be no financial difference to the business of GSEP but maintained that this practice would affect key performance indicators. Mr Allison further agreed that he could not establish a financial cost to the business as a result of Mr Hember’s consumption of product, but maintained that there had never been a practice whereby staff were permitted to make a list of products consumed and pay for them at a later date.
[70] Mr Allison agreed that the CCTV footage showed Mr Hember taking money from the safe, and putting money back into the safe and that this could be consistent with his evidence that he was changing smaller notes for larger notes. Mr Allison also said that it was not clear how much money was taken out and how much was put back into the safe.
Mr Donald William Allen
[71] Mr Allen is the owner of GSEP and has been in this role for five years. In his witness statement 31, Mr Allen said that Mr Hember was summarily dismissed based on his admission of a gross breach of Red Rooster operating procedures. One of the aspects of misconduct involved clearing off orders from the cash register system, but still filling the orders and giving the product to the customer. Another aspect was Mr Hember’s involvement in taking catering orders then filling the orders without ringing them up in the register system and supplying the customer with made up invoices that were not put into the takings records.
[72] Mr Allen said during a meeting on 13 November 2011, Mr Hember was told that another employee had provided information to Mr Allen advising that Mr Hember was cancelling valid orders off the register system. Mr Hember was given the opportunity to respond at the interview and stated that he did not steal any cash but admitted to clearing orders off the cash register system and still supplying the order to the customer. Mr Allen said that Mr Hember conceded to deleting orders to improve the speed of service times for sales and further stated that he re-entered the orders later in the shift to improve the speed of service. However Mr Allen also said that there are no reporting criteria in the store which relate to the speed of service as the software system does not have the capability to record speed of service.
[73] Mr Allen said in his witness statement that the images on the CCTV footage show images of Mr Hember stealing product and taking cash from the safe in the office and placing it in his wallet.
[74] In his oral evidence, Mr Allen said that he called a meeting with all managers on a date between August and November 2011 after he caught a manager stealing two chickens from one of his stores. Mr Allen dismissed the manager himself. At that meeting, Mr Allen told all managers what had happened and reinforced the policy of the Company that anyone caught stealing would be instantly dismissed. Mr Allen also said that he went through the policy about employees eating and drinking Company product while working, and told staff that they had to immediately pay for product consumed and that there was a requirement for another staff member to ring up sales, and staff were not permitted to ring up their own sales.
[75] Mr Allen also said that in November 2011 he dismissed another manager for cancelling orders on the cash register system. That manager was the closing manager and had to tally up cash and put it into the safe for banking on the next day. That manager would take cash out that equated to the cancelled sales so the register still balanced. At that manager’s termination interview, he had informed Mr Allen that Mr Hember taught him how to cancel orders. That manager had been charged with theft and Mr Allen had spent a considerable period of time after the meeting with him assembling information in relation to that charge. Mr Allen believed the employee concerned had stolen $30,000 but he had pleaded guilty to stealing $9,900.
[76] In relation to the average spend statistic, Mr Allen said that it was very important for the financial management of the business undertaken by senior management and the owner. The inflation of the average spend statistic may have lead to a conclusion that the store was over-performing compared to its actual performance and did not give a real indication of the true performance of the store. Mr Allen also said that he would operate the store differently if he had a true indication of its performance, including reviewing its budget and the performance of management and staff. Average spend is also a statistic used to measure the performance of managers and there is a monthly target in relation to it.
[77] Mr Allen said that he had not decided to dismiss Mr Hember before the meeting on 13 November 2011 because an investigation had not been commenced at that stage. Mr Allen also said that he had called the meeting with Mr Hember, and that Mr Hember made a request for a meeting about a pay rise some weeks earlier, which Mr Allen had not granted.
[78] Under cross examination, Mr Allen was shown figures indicating cleared sales on certain dates, and agreed that it was not possible to identify whether the morning or night manager had cleared those sales. In relation to his evidence that he told Mr Allison to summon Mr Hember to a meeting, Mr Allen maintained that he had called the meeting on 13 November 2011, but also agreed that Mr Hember had asked for a meeting a few weeks earlier. Mr Allen said he had not agreed to a meeting when Mr Hember requested it, but had met with Mr Hember after the theft by the other manager had been investigated and that manager had implicated Mr Hember in clearing sales. Mr Allen further agreed that Mr Hember had no warning of what would be discussed at the meeting on 13 November 2011.
[79] Mr Allen agreed that he told Mr Hember that another manager had stolen $30,000 and claimed that Mr Hember taught him how to steal. Mr Allen also agreed that he told Mr Hember that he had been stealing like the other manager and was going to be dismissed. Further, Mr Allen agreed that he was very angry with Mr Hember. In response to the proposition that he had no evidence that Mr Hember was stealing from GSEP, Mr Allen maintained that he had evidence to suggest that this was the case and was in the process of assembling documents to provide to the Police. Mr Allen also maintained that Mr Hember was dismissed for cancelling orders, and denied that the case being conducted by GSEP in response to Mr Hember’s unfair dismissal application had been changed, because the Company could not establish theft.
[80] In response to the proposition that he had already decided that Mr Hember was guilty of theft before the meeting on 13 November 2011, Mr Allen said that he had not reached that conclusion because an investigation had not been completed. Mr Allen also said that Mr Hember’s conduct in cancelling orders lead to a suspicion of stealing because excessive cancelled orders could lead to loss of control of the cash register system. Because excessive cancelling of orders leads to a grave suspicion of theft, it is “immediately a sackable offence”. 32
[81] Mr Allen denied that he told Mr Hember that he had a house he could recover against, or that Mr Hember should telephone him by close of business and tell him how much he was willing to pay Mr Allen in order to stop him going to the Police. Mr Allen said that he told Mr Hember he would leave the matter open for a few days so that he could telephone Mr Allen and voluntarily admit that he had stolen money and the amount of the theft. Mr Allen said that he also told Mr Hember that if he was satisfied with this information he would not refer the matter to the Police.
[82] In response to the proposition that Mr Hember did not request a support person at the meeting of 13 November 2011, because he did not know that he was going to be accused of stealing before he got there, Mr Allen said that Mr Hember had been trained and knew that if he wanted to have a support person present at such a meeting he could have asked for it to be suspended for this purpose.
[83] Mr Allen also said that he had undertaken more research since stating in his witness statement that GSEP did not measure speed of service, and was now aware that it could be recorded. Mr Allen did not agree with the proposition that the CCTV footage showing Mr Hember removing money from his wallet and the safe and putting money back into the safe and his wallet, was consistent with Mr Hember’s explanation that he was simply changing smaller notes for those with larger denominations, and maintained that this was against company policy.
[84] Under cross-examination, Mr Allen maintained that Mr Hember was present at the managers meeting at which he held a general discussion about theft and told managers that any employee caught stealing product would be instantly dismissed. Mr Allen said that he did not keep minutes or a list of attendees with respect to that meeting.
Mr Mitchell Brian Lauff
[85] Mr Lauff is a Senior Assistant Manager who has been working for GSEP for a year and a-half. Mr Lauff said in his witness statement 33 that he saw Mr Hember clearing orders but none of the food would be returned into the kitchen after the orders were cleared. Mr Lauff also said that Mr Hember said he was clearing the orders and putting them back through as a bigger order to get the average spend up. Mr Lauff saw Mr Hember put the money back in the till on a couple of occasions, and said he did not know what Mr Hember did with the money from the cancelled orders on other occasions.
[86] Under cross-examination Mr Lauff agreed that he never saw Mr Hember take any money from the store, but also said that he was not always on shift with Mr Hember or able to observe Mr Hember when they were working on the same shift as they could be working in different parts of the store.
CONCLUSIONS
Was there a valid reason for the dismissal of Mr Hember?
[87] Part way through the hearing of this application, it was conceded by GSEP that allegations of theft against Mr Hember made at the time of his dismissal, could not be established. In my view, that concession was correctly made. However, for the reasons set out above, I am also of the view that GSEP may rely on the same facts to advance an alternative basis upon which it could be found that there was a valid reason for the dismissal of Mr Hember.
[88] GSEP submits that the valid reasons are Mr Hember’s dishonest excuses for his breaches of policy, with which he persisted during this hearing; his deliberate cancellation of orders; and other numerous and habitual breaches of company policy.
[89] After considering the evidence, I am satisfied that there was a valid reason for Mr Hember’s dismissal. Mr Hember’s practices with regards to cancelling orders were highly questionable. Essentially, Mr Hember conceded that he would take money from a customer, provide purchased product to the customer and then cancel the order. Mr Hember was not inexperienced and had nine years experience with Red Rooster and over 4 years experience in a management role with GSEP. He should reasonably have known that at very least such practices could expose him to allegations of theft.
[90] The system employed by Mr Hember required him to keep a list of cancelled orders so that he could re-enter them into the cash register. If Mr Hember did not re-enter the cancelled orders in the same shift, the result of his conduct would be a positive variance in the balance in the cash register, allowing a dishonest manager to steal the excess cash. Mr Hember did not say that he re-entered the orders on the same day he cancelled them.
[91] I do not accept Mr Hember’s evidence that he used the average spend statistic to motivate staff. Mr Hember’s evidence about this matter was not convincing. There is no evidence that staff had any knowledge of performance in relation to this statistic. It was not displayed in the store and there is no evidence that Mr Hember communicated this statistic to those he managed. Further there is evidence, which I accept, that in order to view the performance against this indicator, staff would have been required to come into the office and read a line on a spread sheet on the computer screen. It is improbable that this was the reason that Mr Hember manipulated that statistic.
[92] On Mr Hember’s evidence about why he engaged in the practice of cancelling orders, it is clear that he deliberately set out to manipulate a financial statistic used by his employer. I accept that a statistic relating to the average amount spent by customers is an important management tool and is used to develop strategies for increasing sales. At best, Mr Hember was manipulating this statistic to give an appearance that the store in which he had a management role, was performing better than was actually the case. This is misconduct that constituted a valid reason for dismissal.
[93] I am also of the view that Mr Hember’s conduct in consuming product in the workplace was a valid reason for his dismissal. Mr Hember was an experienced manager and in that capacity Mr Hember should have been well aware that his conduct with respect to the consumption of food in the workplace was totally inappropriate.
[94] Mr Hember’s evidence about this matter was completely unconvincing. After insisting that he wrote a list of the food he consumed and paid for it at a later time, Mr Hember was unable to identify where the CCTV footage showed him doing this, despite being given an opportunity to do so both prior to and during the hearing of this matter. Even if he did engage in this practice, it was entirely inappropriate for a manager to do so. Indeed to accept Mr Hember’s evidence is to accept that he was keeping a number of running lists on pieces of paper located in the store; on the computer; or on his person - being lists of cancelled orders which he would re-enter at a later stage lists of food and drinks he consumed and would pay for at a later stage. Such behaviour is not what is expected of a manager with Mr Hember’s experience.
[95] Further, Mr Hember contradicted himself with respect to his evidence about the policy, first saying that it required food to be paid for when it was bought and eaten and then saying that there was simply a requirement that employees pay for everything they ate.
[96] I also accept the evidence of Mr Allen and Mr Allison that Mr Hember attended a meeting of all managers of GSEP in or around November 2011, at which the policy with respect to consumption of food was made clear. In contrast to Mr Hember, both Mr Allen and Mr Allison were firm in their evidence and their recollection of Mr Hember’s presence at the meeting and the matters that were discussed. Mr Hember simply said that he could not remember attending the meeting. Mr Hember was also aware that in 2010 a manager had been dismissed for taking food without permission. If Mr Hember was under some misapprehension about GSEP’s policy in relation to this issue because of what he had been told by his former manager, he could not have been so after that meeting and the dismissal of the manager.
[97] While the evidence falls short of establishing that Mr Hember engaged in theft, it does establish that he behaved inappropriately with respect to the cancellation of orders and his consumption of food and drinks in the workplace. This conduct constitutes valid reasons for Mr Hember’s dismissal.
Notification of the reason for dismissal
[98] The requirement in s.387(b) is that in respect of the valid reason for dismissal in s.387(a) the person is notified of “that reason”. The provisions of s.387(b) go to procedural fairness and are to be considered in the context of the other procedural matters in s.387. In short, to meet the requirement in s.387(b) it is necessary that an employee is notified if the reason for the dismissal so that the employee has an opportunity to respond to that reason.
[99] It is clear from the evidence that the reason given to Mr Hember for his dismissal was theft. I do not accept the evidence of Mr Allen that the reason given to Mr Hember was cancelling orders. The cancelling of orders was the evidence relied on by Mr Allen to conclude that Mr Hember had stolen money from the business. Mr Hember was notified of a reason for the dismissal that was not valid and was not the reason on which GSEP now relies to establish that it had a valid reason for the dismissal. It is therefore the case that Mr Hember was not notified of the reason for his dismissal, as required by s.387(b) of the Act.
[100] The proposition that his conduct breached company policy or was otherwise inappropriate was not put to Mr Hember prior to his dismissal. It cannot even be said that Mr Hember was notified of all of the facts upon which the decision to dismiss him was based. While reference was made to cancelling orders, there was no specificity provided in relation to that reason, other than an allegation of theft, and the consumption of food and drinks by Mr Hember was not mentioned at all in the discussions prior to his dismissal.
Opportunity to respond to reasons related to capacity or conduct
[101] At the meeting on 13 November 2011 Mr Hember was effectively ambushed by Mr Allen and Mr Allison, and confronted with allegations of theft. Mr Hember had no idea that he was attending a meeting at which his conduct would be an issue, and believed that the meeting was in response to a request he had made some time earlier for a meeting to discuss certain matters.
[102] At the point they confronted Mr Hember, Mr Allen and Mr Allison had not viewed the CCTV footage and had not completed an investigation. The mere fact that Mr Hember admitted to cancelling orders was conceded to be insufficient to ground an allegation of theft in these proceedings, and was certainly insufficient at the point Mr Hember was dismissed. The evidence makes it clear that Mr Allen put the proposition to Mr Hember that he should identify an amount of money that he had stolen, and if Mr Allen was satisfied about that amount, then he would not refer the matter to the Police. Mr Allen also agreed that he told Mr Hember another employee had stolen $30,000 and accused Mr Hember of stealing like that employee. Further, Mr Allen agreed that he was very angry when he had the discussion with Mr Hember.
[103] I accept that Mr Allen may have been entitled to be angry and to take a serious view of his suspicions of theft on the part of Mr Hember, particularly in light of the dismissal of another employee who had stolen from the business by cancelling orders. Notwithstanding this, the way in which Mr Allen dealt with Mr Hember prior to his dismissal was completely inappropriate. Allegations of theft are an extremely serious matter and should not be made without clear and cogent proof. Such allegations can have a significant effect on the career of an employee.
[104] On Mr Allen’s own evidence, at the point he dismissed Mr Hember, he had no proof that Mr Hember was guilty of theft, other than an allegation made by another employee who was subsequently found to be guilty of theft, and a belief that Mr Hember was cancelling orders in a way that did not accord with company policy. Notwithstanding this, Mr Allen called Mr Hember to a meeting with no warning as to the subject matter, and levelled serious allegations at him, followed by threats to report him to the Police if he did not confess to stealing from the business and nominate an amount of money that he had stolen.
[105] In my view, it was inappropriate for Mr Allen to have threatened to report Mr Hember to the Police to induce him to confess to theft, when Mr Allen had insufficient proof to warrant Mr Hember’s dismissal on that ground. The inappropriateness of Mr Allen’s conduct is heightened by the fact that the allegations of theft could not be sustained many months later in these proceedings, in circumstances where Mr Allen had opportunity to investigate those allegations and put evidence before the Tribunal to justify them, and where the standard of proof is on the balance of probabilities.
[106] It is clear from the evidence that Mr Allen and Mr Allison had made up their minds to dismiss Mr Hember on the grounds of theft, at a point where they could not sustain such an allegation and regardless of what explanation Mr Hember may have offered for cancelling orders. For these reasons, I am of the view that Mr Hember was not given an opportunity to respond to the reasons for his dismissal related to his conduct.
Unsatisfactory performance
[107] Mr Hember’s dismissal related to incidents of misconduct and not to ongoing unsatisfactory performance, and it is not relevant that Mr Hember was not given a warning about the conduct for which he was dismissed. The relevance of warnings Mr Hember had received about other conduct are considered under the umbrella of s.387(h).
Size of the employer’s enterprise
[108] GSEP is a significant employer and operates a number of stores in Mackay. GSEP is conducted as part of a national franchise, and has a Human Resource Management Department. GSEP had access to advice and assistance from human resource management specialists and the flaws in the process followed by Mr Allen in effecting the dismissal were not impacted by the absence of such advice and assistance.
[109] It would be expected that given the size of the enterprise and its resources, that a fair process would have been followed in investigating the allegations against Mr Hember and putting those allegations to him in a manner that would have allowed him a reasonable opportunity to respond.
Other relevant matters
[110] In my view it is relevant that Mr Hember had received warnings thoughout the course of his employment with GSEP for other matters. These included the offensive text message he sent to Mr Allison which resulted in a formal warning. I also accept the evidence of Mr Allison that Mr Hember was counselled on a number of occasions about failing to attend to duties in the store and remaining in the office when he should have been on the floor.
Was the dismissal unfair?
[111] In all of the circumstances of this case, I am satisfied that Mr Hember’s dismissal was unfair. Notwithstanding that there was a valid reason for the dismissal, the dismissal was harsh because Mr Hember was not guilty of the misconduct on which GSEP acted. The dismissal was also unreasonable because it was decided on inferences which could not reasonably have been drawn from the material before the employer. Further, when the other considerations are taken into account as required by s.387 of the Act, the fact that there was a valid reason does not outweigh the flaws in the rationale for the dismissal and the process followed in effecting it.
[112] Mr Hember was ambushed and accused of theft, in circumstances where the employer could not prove that he had engaged in such misconduct. The employer was not a small business and had access to human resource management expertise. The allegations made against Mr Hember were very serious and were likely to have significant consequences for him. Notwithstanding the lack of proof that Mr Hember had engaged in theft, he was dismissed on that ground, and it was persisted with until after the hearing into this application commenced. This is not a case where the employer had reasonable grounds upon which to base an assertion of theft but was mistaken. Rather it is a case where the employer made, and continued to make, assertions which could not be sustained on the evidence reasonably before the employer.
REMEDY
[113] Having found that Mr Hember’s dismissal was unfair, on the grounds that it was harsh, unjust and unreasonable, it is necessary to consider the question of remedy. Mr Hember was a person protected from unfair dismissal, and I am of the view that he should be granted a remedy for his unfair dismissal.
[114] Mr Hember said that he had encountered significant difficulty in obtaining other employment since his dismissal and had applied for some 40 positions. Appended to Mr Hember’s witness statement was a list of ten positions he has applied for in writing. These positions are in different fields to that in which Mr Hember has been employed and include stores positions, apprenticeships in a range of fields, trainee train driving and purchasing. Mr Hember said that he did not apply for positions in the fast food industry because he believed that his dismissal for theft would prevent him from obtaining such positions. Mr Hember also gave evidence of some experience as a sheet metal worker.
[115] Under cross-examination Mr Hember said that he was aware that it was GSEP’s policy not to discuss the circumstances in which employees left employment, and to simply give a statement of service indicating the length of an employee’s service. However, there was no evidence that Mr Hember was given such a statement of service. The circumstances in which Mr Hember was dismissed involved a direct allegation of theft and threats to report the matter to the police if Mr Hember did not nominate the amount of money he had stolen. Further, up to the point the hearing of this application commenced, Mr Allen was continuing to assert that Mr Hember was dismissed for theft, in circumstances where that allegation could not be sustained.
[116] I have no doubt that the circumstances in which Mr Hember was dismissed would have impacted on his ability to obtain other employment, and it is reasonable that he would not have wished to rely on Mr Allen to simply state that he had worked for GSEP for a period of time and make no other comment about the circumstances in which he had ceased employment. Mr Hember does not seek reinstatement and obtained other employment on 1 March 2012 at a salary that is some $43.31 per week less than the salary he was earning while working for GSEP.
[117] Given the circumstances in which the dismissal occurred and the manner in which it was effected, reinstatement is not an appropriate remedy. In all of the circumstances of this case, an order for compensation should be made.
[118] 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.”
[119] Considering the factors I am required to take into account in determining an amount of compensation, as provided in s.392(2) of the Act, I have come to the following conclusions. There is nothing to suggest that GSEP is not a viable business, and I am satisfied, as required by s.392(2)(a) that the Order I intend to make will not impact in this regard.
[120] Mr Hember was employed by GSEP for a period in excess of four years, and with the previous owner of the business for a period of in excess of five years. The issue of whether Mr Hember’s service with the two entities that operated the franchise in Mackay was continuous was raised in his evidence but not pressed. The evidence on behalf of GSEP also did not address this issue in any detail. Accordingly, there was insufficient evidence upon which I could make a finding about this matter. For the purposes of assessing compensation, as required by s.398(2)(b), I have taken into account that Mr Hember was employed by GSEP for a period of some four years and also that he had a significant period of employment with the previous owners of the Mackay franchise. I am also of the view that in light of the findings about Mr Hember’s conduct and his explanations for that conduct, the length of his service with GSEP is not material.
[121] With respect to s.392(2)(c), I am of the view that Ms Hember’s employment would not have continued for a lengthy period. The cancellation of orders and the consumption of product by Mr Hember were serious matters. Subject to a proper investigation and an opportunity for Mr Hember to respond to allegations in relation to them, these matters provided a valid reason for dismissing Mr Hember. Having heard Mr Hember’s unconvincing explanations about these matters, I am satisfied that it would not have been unreasonable for Mr Allen to reject those explanations and dismiss Mr Hember following the investigation. Mr Hember had also received a first and final warning on 21 August 2011 in relation to the text message he sent Mr Allison, and had been informed that further breaches of company policy and procedures would result in termination.
[122] In my view, a reasonable time for Mr Allen to have investigated the conduct of Mr Hember and to put the allegations in regard to cancelling orders and consuming product would have been a period of no more than eight weeks. In reaching this conclusion I have taken into account that there was a considerable amount of CCTV footage and other material to examine, and at the point Mr Hember’s unfair dismissal application was listed for Directions, Mr Allen had still not viewed all of that material.
[123] An adjustment of 25% should be made for contingencies, including that Mr Hember may have responded to the initiation of an investigation of these allegations by resigning his employment and obtaining other employment. I am also of the view that Mr Hember’s conduct contributed to his dismissal and that an additional adjustment of 25% should be made to reflect this.
[124] In relation to the issue of whether Mr Hember has taken reasonable steps to mitigate the loss of his employment, I am of the view that in the circumstances of his dismissal, Mr Hember could not reasonably have been expected to rely on Mr Allen simply confirming the length of his employment to any prospective employers. It is also not surprising that Mr Hember sought employment outside of the fast food industry. Accordingly, I have decided to make no adjustment in relation to mitigation.
[125] Mr Hember’s weekly salary was $1004.85 34 and would have totalled $8,038.80 for the eight week period I have assessed as the likely period for which employment would have continued. Adjusting for contingencies and Mr Hember’s contribution to his dismissal gives a total of $4,019.40. Mr Hember received an amount of $1,549.80 from Centrelink in the period after his dismissal. There is no evidence about when Mr Hember first received such payments and he was not cross-examined about the matter. In those circumstances as I am not able to be satisfied that this amount was received in the eight week period following Mr Hember’s dismissal, I do not intend to deduct it from the amount of compensation awarded. No deduction will be made for income earned by Mr Hember from his new employment which commenced on 1 March 2012, as that date is outside the period over which I have assessed compensation.
[126] An Order will issue with this Decision that Greater South Eastern Projects Pty Ltd pay to Mr Daniel Hember the amount of $4,019.40 taxed according to law, within 14 days of the date of this decision.
COMMISSIONER
Appearances:
Mr G. Smart on behalf of the Applicant.
Mr D. Allen and Mr S. McLennan on behalf of the Respondent.
Hearing details:
2012.
Mackay:
May 2; 3.
1 Williams v Frayne (1937) 58 CLR 710 at 733.
2 (1931) 45 CLR 359 at 377-8.
3 (2000) 176 ALR 693 at 701.
4 Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427 at 456.
5 Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
6 Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.
7 Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.
8 Op cit.
9 Op cit.
10 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 370-1 Per Rich J.
11 Ibid at 373 per Starke J.
12 Ibid at 377-378 per Dixon J.
13 Concut Pty Ltd v Worrell 176 ALR 693 at 701 per Gleeson CJ, Gaudron and Gummow JJ.
14 Ibid at 707 per Kirby J citing Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377 and Blyth Chemicals Ltd v Bushnell (1993) 49 CLR 66 at 80.
15 Byrne v Australian Airlines [1995] 185 CLR 410.
16 Ibid at 468.
17 (1998) 84 IR 1.
18 Ibid at 8.
19 Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-468 per McHugh and Gummow JJ.
20 Exhibit 6.
21 Transcript of proceedings 2 May 2012 PN546.
22 Ibid PN564.
23 Ibid PN619.
24 Ibid PN721.
25 Transcript of proceedings 3 May 2012 PN1248 - 1256.
26 Transcript of proceedings 2 May 2012 PN259
27 Ibid PN342-344.
28 Ibid PN529-535.
29 Exhibit 5.
30 Transcript of proceedings 3 May 2012 PN1468.
31 Exhibit 10.
32 Transcript of proceedings 3 May 2012 PN1775.
33 Exhibit 11.
34 Witness Statement in reply Exhibit 2.
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