Mr Dru Candappa v Inedit Holdings Pty Ltd T/A Belle Property

[2020] FWC 468

[2020] FWC 468

FAIR WORK COMMISSION

DECISION

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

Mr Dru Candappa
v
Inedit Holdings Pty Ltd T/A Belle Property
(U2019/7783)

DEPUTY PRESIDENT ASBURY BRISBANE, 30 JANUARY 2020

Application for an unfair dismissal remedy – Dismissal on grounds of work capacity – Dismissal not unfair – Application dismissed.

[1] Mr Dru Candappa (the Applicant) applies under s. 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of his dismissal by Inedit Holdings Pty Ltd T/A Belle Property (the Respondent). The Respondent is a real-estate franchise of Belle Property operating on the Sunshine Coast in Queensland. The Applicant was employed by the Respondent as a Residential Sales Consultant from 19 November 2018 until his dismissal on 15 July 2019.

[2] The application was made within the time required in s.394(2) of the Act, on 16 July 2019. The Respondent initially objected to the application on the basis it asserted that it was a small business employer. That objection was withdrawn on 22 August 2019 and the application was allocated to me for hearing. The circumstances in which that objection was made and withdrawn is a matter to which I will return. It is not in dispute that the Applicant is person protected from unfair dismissal.

[3] The Applicant contends that his dismissal was unfair on a number of grounds. Firstly, the Applicant asserts that he was dismissed without any warning that there were issues with his conduct or work performance. Secondly, the Applicant asserts that he was dismissed because he sent an email on 13 July 2019 to a Director of the Respondent Mr John Stamp taking issue with the manner in which Mr Stamp spoke to him earlier that day and Mr Stamp responded in a “spiteful” manner. The Applicant asserted that Mr Stamp verbally abused him on that date and did not like the fact that the Applicant “talked back” during their discussion. Thirdly, the Applicant asserts that he was dismissed after he questioned a restraint of trade provision in a new contract he was given on 28 June 2019.

[4] The Respondent maintained the Applicant was verbally warned about his performance in a meeting on 9 July 2019, and that the reasons for the dismissal, as set out in a termination letter dated 15 July 2019, were an inability to meet the Key Performance Indictors (KPIs) and failure to reach sale targets. There is a dispute in relation to whether the Applicant received this termination letter at the time he was dismissed.

[5] As provided in s. 397 of the Act, I decided to conduct a hearing on the basis that there were disputed issues of fact and I considered this to be the most appropriate means to resolve them. Directions were issued for the hearing requiring the Applicant to file his material by 10 September, the Respondent by 24 September and the Applicant’s material in reply by 1 October 2019. Both parties filed notices seeking orders for production of documents. The Respondent sought that the Applicant file documents evidencing income from employment obtained by the Applicant shortly after his dismissal. The Applicant then sought an order for the Respondent to produce its bank records to evidence its financial position and for the Directors to produce bank statements relating to their personal accounts. The Applicant said that this was necessary because the Respondent had asserted that its business was not profitable and the Directors were driving expensive vehicles.

[6] I declined to issue either of the notices sought on the basis that I would require evidence from the Applicant in relation to mitigation of his loss from other employment in any event and had made this clear prior to the hearing in mentions and directions conferences. I was also of the view that the notice sought by the Applicant was not relevant to the matters in dispute given that the Respondent was not contending that it lacked capacity to pay any amount which might be ordered by the Commission if the application for an unfair dismissal remedy succeeded.

[7] On 24 October 2019 the Respondent sought permission to file additional material outside of the time set out in the Directions. The material was in response to assertions made by the Applicant about the performance of other agents and the status of properties dealt with by the Applicant and other agents during the Applicant’s employment. I allowed the Respondent to tender that material notwithstanding that it was filed late, on the basis that it relevant to the issues in dispute and responsive to the Applicant’s case. I was also of the view that this material could properly have been put to the Applicant in cross-examination and that no unfairness arose as the Applicant had the material before the hearing and responded to it by annotating the document comparing the performance of the Applicant and another agent and attaching information from real estate sales websites to support his contentions about various properties. The version of the document annotated by the Applicant became an exhibit in the proceedings. Further, the Applicant relied on some of that material to support his own case, namely the Respondent’s Handbook of Company Policies and Expectations.

[8] At the hearing the Applicant gave evidence on his own behalf. Evidence for the Respondent was given by Mr John Stamp and Mr Ben Radcliff, Directors of the Respondent. I have considered all the evidence and submissions and summarise below that which is relevant to the issues for determination. Those issues are whether the Applicant was unfairly dismissed and if so whether he should have a remedy for his unfair dismissal.

EVIDENCE

[9] As previously noted the Applicant commenced employment with the Respondent on 19 November 2018. The Applicant’s written employment agreement tendered by him at the hearing indicates that he was employed as a Residential Sales Consultant on a full time basis and that his employment classification for the purposes of the Real Estate Industry Award 2010 was Property Sales Representative. 1 The first employment agreement was signed by the Applicant on 15 November 2018. The Applicant was remunerated on the basis of wages and commission under a debit/credit arrangement whereby his wage and leave entitlements were to be offset against commissions earned. The employment agreement also contained a reference to the Applicant’s post-employment obligations indicating that these were designed to protect the Respondent’s business goodwill. On 8 January 2019 the Applicant signed a second employment agreement. That agreement provided for the Applicant to be employed as a Salaried Operational Employee and also provides for a salary plus commission arrangement. The second agreement contains different provisions in relation to restraint of trade. The Applicant’s annual salary including allowances and leave loading was $41,500.00 including applicable allowances and leave loading and excluding superannuation. In addition both of the contracts provided for a commission structure.

[10] The Applicant also said that he questioned the restraint of trade clause in a new contract he was given on 28 June 2019 and that email proof of this was available. According to the Applicant this angered the Respondent’s Directors and contributed to his dismissal. The Applicant did not tender the emails referred to in his statement and there is no other contract of employment in evidence besides the first contract signed by the Applicant on 15 November 2018 and the second contract signed by him on 8 January 2019.

[11] In relation to the incident involving the Applicant and Mr Stamp on 13 July 2019, the Applicant stated that on that date, Mr Stamp was listening in to a conversation that the Applicant was having with a prospective client. Mr Stamp disagreed with the manner in which the Applicant was conducting the conversation and the Applicant said that Mr Stamp was ranting and spoke to him like he was a “kid or idiot”. The Applicant said that he later sent Mr Stamp a “polite text” saying that he did not appreciate the way he had been spoken to which Mr Stamp responded. The text exchange tendered by the Applicant was in the following terms:

“[The Applicant] I should have been pumped today knowing I got an offer off a bloke going for a walk on the street as that is exactly what it was. I have built up and on-sold 3 business for a profit and could not have done so if I was an idiot, you spoke to me like I was one this morning and I do not appreciate it. Rely not required.

[Mr Stamp] You are getting a reply Dru. Be in the office at 8.00 am on Monday.” 2

[12] The Applicant also said in his written statement in relation to this matter:

“The Directors never appreciated positive or constructive feedback / comments from the team and profanity was the norm across the workplace on a daily basis, the culture they bread [sic] was toxic. I still enjoyed working at Belle. I firmly believe John did not appreciate me finally saying something back to him (politely) as no one could talk back to them.” 3

[13] According to the Applicant, when he attended the meeting at 8.00 am on Monday 15 July 2019 he was informed by Mr Stamp and Mr Radcliffe that he had not been performing and was “fired on the spot”. The Applicant also maintained that he did not receive a termination letter until 24 July 2019 after he filed his unfair dismissal application stating this. The termination letter (also tendered by the Applicant) states that the reason for his dismissal is based on performance and the failure to meet KPIs in almost eight months of working in the business. The letter states that the Applicant will be paid his accrued leave and notice payments. It is not in dispute that on termination of his employment the Applicant was paid one week in lieu of notice and his accrued entitlements.

[14] In his witness statement the Applicant maintained that he was not given written warnings before being dismissed and that he met all of his KPIs and often exceeded them. The Applicant also said that there were worse performing agents in the Respondent’s business at the time of the Applicant’s dismissal. Further the Applicant said that at the time of his dismissal he was working with 396 active contacts including 147 prospects of which 25 were in his sales pipeline.

[15] The Applicant also asserted that his pipeline had projected income of $850,000.00 coming into the business which would have resulted in $344,250.00 in lost income to him and that all of these connections were simply given to another agent depriving the Applicant of further commission from prospective sales over the last 8 months in the many millions of dollars. The Applicant said that he sold a property at Point Cartwright Drive Buddina in June and listed a property in Buddina and another property in Birtinya before he was dismissed with the result being that he was deprived of his commission.

[16] Under cross-examination the Applicant agreed that there were fortnightly meetings of salespersons at which discussions were held about how each person’s listings were going, what they were working on, what new business was being brought in and rentals that were being worked on. 4 The Applicant agreed that he had a discussion with Mr Stamp and Mr Radcliff about his view that the Buddina property was overpriced and to get some insight from them about the owner’s position5 but rejected the proposition that he told them that he had no prospects of selling those properties.

[17] The Applicant also agreed under cross-examination that in the period of his employment he sold one property which settled on 13 June 2019 bringing in commission which was accrued in the amount of $11,304.00. This commission represented half of the commission from the sale on the basis that another agent was also involved in the sale of the property concerned. In the period of his employment the Applicant was paid wages in the amount of $34,798.61 including superannuation. Notwithstanding this the Applicant maintained that he met all of his KPI’s. In response to questions from me about what his KPIs were the Applicant and I had the following exchange:

“What do you understand your KPI's were?---Well, the KPI's that were provided by the directors in terms of – I often exceeded them.  There is evidence that I was paid bonus commission.

What were the KPI's, Mr Candappa?---It was rental leads, how many rental properties we could get as agents.

And what was your KPI?---It differed from week to week, or I should say probably, month to month.  We also had Tuesday meetings at Noosa.  That was for everybody.  And often at these meetings it was determined what sort of rental leads should be passed onto the property manager.

But Mr Candappa, you were employed as I understand it, as a sales person?---Correct.  As part of the job we also had to provide rental leads.

What were the KPI's for property sales?---There was nothing stipulated in concrete.

Was there anything stipulated anywhere?---We had to list and sell real estate.  That was, yes, standard.” 6

[18] Mr Radcliff said that there were issues with Applicant’s performance from the beginning of his employment. Mr Radcliff also said that both he and Mr Stamp attempted to assist the Applicant to improve. The Respondent held weekly sales meetings with all sales staff and fortnightly individual meetings with each member of the sales team. Calendar invites for the meetings attended by the Applicant were tendered. Staff were requested to bring individual KPIs to the meeting. According to Mr Radcliff, the Applicant’s performance was the worst in the Respondent’s business.

[19] Mr Stamp also said that there were issues with the Applicant’s lack of performance from the outset and that the sole indicator that is measurable in the industry is properties sold. The Applicant did not come close to meeting his targets in this essential capacity. It was decided that the Applicant would be provided with a warning in relation to his performance.

[20] Mr Stamp and Mr Radcliff gave evidence that they conducted a meeting with the Applicant on 9 July 2019 for this purpose. Both Mr Stamp and Mr Radcliff maintained that they informed the Applicant that if he did not complete a sale within the next week his employment would be terminated. The Applicant agreed that he attended the meeting but maintained under cross-examination that this statement was not made during the meeting. In response to questions about his version of the discussion at the meeting the Applicant said that he discussed two of his listings and his view that they were overpriced. The Applicant disputed that he stated to Mr Stamp and Mr Radcliff that he had no prospect of selling either property and maintained that he sought their input in relation to dealing with the owners’ expectations in relation to price. The Applicant also disagreed with the proposition that he stated that the owner of one property was refusing to speak to him or return his calls.

[21] Mr Stamp tendered a document with leave that set out commissions earned compared to salary paid to another salesperson – who was identified in the hearing – for the period June to October 2019. 7 The version tendered in the hearing contained notes made by the Applicant and copies of printouts from real estate sales websites. That document evidenced that the former colleague had sold or assisted in the sale of six properties during that period bringing in a total commission of $62,364.05 (exclusive of GST and franchise fees) while being paid a salary of $29,786 including superannuation for the same period.

[22] This was contrasted with the Applicant’s performance in the eight month period of his employment from 19 November 2018 to 15 July 2019 during which the Applicant sold one property for which commission of $11,304.00 accrued while being paid a salary of $34,798.61 including superannuation. Mr Stamp maintained that the salesperson – who was named in the proceedings – made the sales set out in the document. In response to the Applicant’s assertion that the salesperson was not the listing agent Mr Stamp maintained that he made the sales and was entitled to commission for them as recorded in the document. Mr Stamp also maintained that notwithstanding that some of the properties may have still been showing for sale on real estate sales websites, this was due to an administrative delay in taking down the information and all properties were unconditional with deposits held by the Respondent.

[23] In relation to KPIs Mr Stamp and Mr Radcliff said that sales meetings are held every week, and meetings are held fortnightly with individuals. Staff were asked to bring information about KPIs to their individual meetings. Mr Radcliff said that during the period of the Applicant’s employment there was no minimum KPI for sales. Instead the KPI was that employees had to deliver four appraisals per week which involved a meeting with potential vendors to discuss selling their property. There was also a KPI for leads for the Respondent’s property management department. The KPI with respect to appraisals was to assist salespeople to meet their minimum standard. Mr Radcliff said that being a real estate agent means you’re your job is to sell property. Mr Radcliff said that the Applicant did not meet the appraisal KPI during his employment and as a result had only one sale. Mr Radcliff also said that the fact that the Applicant was paid bonuses amounts in his termination pay for two property management introductions was not a good representation of leads over the period of his employment.

[24] Under cross-examination Mr Radcliff accepted that the Applicant did not receive a written warning in relation to not meeting KPIs but maintained that he was informed on 15 July 2019 that if he did not sell a property within seven days he would be dismissed. In response to the proposition that the Applicant was dismissed due to Mr Stamp’s “spiteful text message”, Mr Radcliff said that the Applicant’s dismissal was purely based on poor work performance. Mr Stamp tendered the Applicant’s contract of employment which relevantly provided as follows in relation to Performance Review:

“The Employer has employed You because it believes You will make a positive contribution to the business. However, as the real estate industry is very much incentive driven, You will be expected to achieve a minimum level of performance and You will be required to meet the performance standards set by the Employer from time to time. your failure to meet the employer’s reasonable expectations in relation to performance or conduct, may lead to the Employer terminating your employment in accordance with paragraph 15.”

[25] The contract went on at paragraph 15 to provide for termination of employment with one weeks payment in lieu of notice and summary dismissal for serious misconduct. Mr Stamp also tendered minutes of a Sales/PM meeting held by the Respondent on 9 July 2019. 8 Those minutes were originally forwarded to the Commission by the Applicant as part of the material filed in opposition to the Respondent’s jurisdictional objection. The minutes record that every Monday by 4.00 pm staff needed to email details of their KPIs to Mr Stamp and Mr Radcliff which must include 4 sales appraisals and 4 property management leads. The minutes also record that each staff member was allocated a required number of sales by the next meeting with the Applicant being allocated 1 sale.

[26] Mr Stamp said that this was the first time that the minutes show that a certain number of sales were required from staff and this was done so as not to single the Applicant out. In response to questions from the Applicant in cross-examination about whether two staff members – Dawn and Rick – met their KPIs Mr Stamp said that Dawn sold a property and Rick was suffering from a medical condition which required hospitalisation for transfusions. This affected the way that the Respondent dealt with him. Mr Stamp also said that Rick and Dawn are no longer employed by the Respondent also due to sales performance issues. In response to questions from the Applicant in relation to why each of the employees referred to in the minutes had not been dismissed for failing to sell the required numbers of properties, Mr Stamp said:

“THE DEPUTY PRESIDENT: Have a look at the document. So Mr Candappa says, if that was a requirement for everybody, why was he the only one who got dismissed. So do you want to address that? --- I do. Because Dru was the only one who received a warning the week prior for poor performance.

Right? --- Yes. That's the simple reason behind that. No one else had received a warning. And the reason no one else had received a warning is, as managers of the business we deemed that those other people were not at that point yet, that they required that sort of management or the treatment. And going through them, Patrick's a commission only salesperson, so for us, he sells nothing, it doesn't matter, you know? Ben is – that Ben, the owner of the business, so, you know; Michael, at that time was my sales associate so he wasn't a full-time salesperson. So for him to have a sale, if he's going to be involved in a sale, is in essence, me. He's not a listing agent in any way, shape or form.

Right? --- Dru is the – Dru; Rick, I've explained had health issues; Sam was a sales associate to Ben, so he was not a listing agent.

Right? --- So he is saying he would be involved in Ben selling something.

Yes? --- Dawn did make a sale but shortly after that we begun the process – because, you know, as Dru had alluded to there was an issue there with her, and that's why she's no longer in the industry. Georgia, commission only salesperson at the time? I can't remember.

MR RADCLIFFE: Can't recall.

THE WITNESS: Yes, but again, not – Georgia's been with us for four and a half years, and is actually our number one salesperson, not Patrick, at the moment, so – Stacey was another assistant to Ben, not a full-time salesperson.

THE DEPUTY PRESIDENT: Right? --- And Guy was only very new at – he'd been working with us for about a week at that stage.

Well, we've dealt with Guy? --- We've dealt with Guy.

All right? --- So, again, going through all of those people, there has to be some judgment from us as directors, Dru, and us as owners of the business, of where people are going, whether they are going to be profitable for the business to retain their employment. But you know, there's mitigating factors like health, people's effort, their respect and the way that they deal with the principles. All those sort of things are involved. But the very simple point is, the only reason that Dru is the only person off that list that was terminated is because he was the only one that received a warning the week before.” 9

[27] The Applicant also raised an issue with Mr Stamp in cross-examination asserting that he had falsely made a jurisdictional objection to the application by alleging that the Respondent had less than 15 employees when this was not the case and that his evidence to the Commission was not credible on this basis. Mr Stamp said in response to this proposition that he misunderstood the status of working directors – namely himself and Mr Radcliff – and upon receiving advice from an employer organisation, promptly admitted that the jurisdictional objection was incorrectly made and withdrew it.

[28] Further the Applicant maintained that he did not receive the termination letter dated 15 July 2019. Mr Stamp said that he placed it on the desk beside the Applicant as he was packing up his things after being informed that he had been dismissed and that the letter was later found in a pile of papers left on the Applicant’s desk. Mr Stamp said he assumed that the Applicant had taken a copy of the letter with him when he left the workplace and was not aware that the Applicant claimed not to have been given a termination letter until the unfair dismissal application was filed in the Commission. At that point, Mr Stamp provided a copy of the termination letter with the Respondent’s material.

[29] Mr Stamp also denied the assertion put to him in cross-examination that the Applicant was sacked following a text he sent as a result of an “abuse filled rant” from Mr Stamp because Mr Stamp’s “ego could not be questioned by an employee”. Mr Stamp responded as follows to this assertion:

“…So the conversation was, he'd made a phone call to someone and was talking about a rental referral.  Because Dru had only got two rental referrals in eight and a half months and he was always struggling with that on his KPI's, I'd taken a number of times to explain to Dru things to say and how to handle the conversations.  On that phone call Dur did not correctly handle what had been said and had done the same thing I told him not to do, three or four times.  When he finished the conversation – and to be fair, he got very upset that I was listening to the phone call.  That's my job.  I'm the principle of the office.  You know, telling me that I'm treating you like a child because I'm listening to the phone call to do with my business, I don't understand how to answer that, other than to say it's my business, it's my job.  I then tried to educate him about the correct way to do it.  Half way through that conversation Dru had said the reason he had not got any rental referrals is because our new management person who gathered new managements …that that email conversation was with, he said that she was shit.  They were his exact words.  At that point I did get angry and said, ‘You do not refer to people like that.  You need to stop, okay?’  Dru got all huffity and I just ended the conversation.  The exact words, I can't remember but that was what upset me and that is why I – you know, and initially the first point was, he said, ‘You can't just end a conversation like that.’  And I did because it was in a room with other staff and he was calling another staff member shit.  So I couldn't let that continue.

Okay?---And, yes, there – but it had nothing to do with why he was terminated, absolutely nothing to do with it whatsoever, at all.” 10

[30] Mr Stamp went on to state that because the Applicant had been given a warning Mr Stamp suspected that by sending the text message of 13 July 2019 the Applicant was trying to fabricate an argument for unfair dismissal. As a result Mr Stamp kept his text message in reply short. Mr Stamp also reiterated that the text message exchange was not the reason for dismissing the Applicant stating:

“I – I - - -? Eleven thousand dollars' worth of money into the business that cost me $35,000 to secure. It is not rocket science. If we allowed you to continue, and everyone to continue on the same basis, our business would go broke. And the fact that you've dragged us here and you've questioned my telling the truth, you've questioned my ego, you've questioned my credibility, when I was the one fighting to keep you there and try and look after you, is disgusting.” 11

[31] Mr Stamp also said:

“…The fact of the matter is, mate, if you're not bringing commission into the business, the business cannot move on. Eight and a half months, and one sale which I did most of the hard work on getting the seller to where he needed to be – you had very little engagement other than dealing with the buyer, okay, and running the contract at the end, is not – you can't be expected to keep your job when you do so badly, mate.” 12

[32] In response to the proposition that the Applicant had active listings of in excess of $1 million Mr Stamp said that an active listing is worth nothing until it is sold. Mr Stamp went on to say that:

“…Dru, please stop putting words in my mouth. The fact of the matter is, Dru, you didn't sell enough real estate. If for one second we thought there was a way that you were going to sell enough real estate to be profitable – we are not idiots, we would have retained you in the business because it would have been profitable. We terminated you because it cost us $35,000 to get $11,000. Now here's the other thing, Dru. Even if potentially you'd ever sold those listings, we still would have had to keep paying you more and more wages, and you would have been deeper and deeper in the hole. And even if you had have sold those, it still wouldn't have been profitable for us to retain you. You were not profitable. We made that clear. We gave you a warning. You said you understood the warning. And then we acted on the warning. It is clear. There is no argument, Dru, other than to say that you didn't do what you were supposed to do.” 13

[33] In relation to the assertion that two worse performing agents than the Applicant were retained in employment while the Applicant was dismissed, Mr Stamp said:

“…Dru, both of those people were employed after you.  They are no longer employed in the business, okay?  In that statement alone you should be able to devise your answer, okay?  You were employed before them.  Your process of becoming to the point where it's no longer profitable, arrived before theirs.  They are no longer with the business, probably for similar reasons but I'm not going to breach their privacy any further, okay?  Now as a business owner my decision in how I deal with each individual employee is – sorry, is our decision.  I've given you the reason where your termination was delivered and I think---” 14

[34] The Applicant submitted that there was no valid reason for his dismissal and maintained that he was dismissed because of the 13 July text message exchange with Mr Stamp. The Applicant said that he was not given an opportunity to respond to the reasons for his dismissal and he was not offered a support person or informed he could request one. The Applicant disputed that he received a verbal warning and pointed to the Handbook of Company Policies and Expectations tendered by the Respondent. In particular the Applicant submitted that the failure to give him a warning – either written or verbal – was inconsistent with the Handbook which provides for a counselling and disciplinary process involving informal warning, written warning and final warning before termination of employment. Further, the Applicant submitted that the Respondent is part of a large national franchise and has a subscription to a professional employer organisation which had represented the Company until just before the hearing.

[35] In response to a question from me as to how long he believed that he would likely have remained in employment given his sales performance, the Applicant said that circumstances such as the Federal election and possible changes to negative gearing had impacted his sales figures and those of the whole business. There is now more activity in the market and given that he had two active listings at the time he was dismissed the Applicant maintained that he had no reasons to leave the Respondent’s employment.

[36] The Respondent submitted that the Applicant was dismissed because the business could not retain someone in employment who was not selling real estate. The decision to dismiss the Applicant was made purely on that basis, following the issuing of a warning. Accordingly the dismissal was not unfair.

CONSIDERATION

Legislation

[37] In deciding whether a dismissal was unfair on the grounds that it was harsh, unjust or unreasonable, the Commission is required to consider the criteria 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 dismissal; and

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

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[1] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. I turn now to consider each of those matters in the present case.

Was there a valid reason for dismissal of the Applicant?

[2] A valid reason for dismissal is a reason that is sound, defensible and well founded and valid in the context of the employee’s capacity or conduct, based on the operational requirements of the business. 15 Capacity is the employee’s ability to do the job as required by the employer. Capacity also includes the employee’s ability to do the work he or she was employed to do. The appropriate test for capacity is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively.16

[3] In the present case, the context in which the work was performed was a real estate agency in which the Applicant was employed as a real estate sales person. It is axiomatic that the main focus of his position was to sell real estate. I am satisfied and find that the Applicant was dismissed on the basis that he lacked the capacity to perform the duties he was employed to perform – in short the Respondent concluded that the Applicant lacked the capacity to sell real estate and that it could no longer sustain his employment on the basis that he was not bringing sufficient sales revenue into the business to offset his salary to the extent required by the Respondent.

[4] The Applicant’s assertion that he was dismissed because of the text message exchange with Mr Stamp was not credible. It is improbable given the Applicant’s sales record and his failure to meet KPIs, that he was dismissed for any other reason, particularly on the basis of the text message sent by the Applicant to Mr Stamp on 9 July 2019. In my view the text message was used by the Applicant to deflect attention from his poor work performance in the hearing of his unfair dismissal application. The Applicant’s text message was not overly offensive, and while direct, Mr Stamp’s response gives no indication that this is the reason for dismissal of the Applicant. Quite simply, by 13 July 2019 the sending of the text message was the least of the Applicant’s problems given his poor sales record and I accept the evidence of Mr Stamp and Mr Radcliff that they were focused on the Applicant’s sales and nothing else and that their intention was formulated to terminate his employment if he did not sell a property within the required time before the text message exchange occurred.

[5] Generally, I preferred the evidence of Mr Stamp and Mr Radcliff over that of the Applicant. Both witnesses for the Respondent gave their evidence in a forthright manner and allowing for their extreme annoyance at being required to participate in the hearing of the application, their evidence was convincing. In contrast the Applicant was argumentative and I was required to stop him from asking unfair and misleading questions on a number of occasions. For example, the Applicant repeatedly accused Mr Stamp and Mr Radcliff of lying about providing him with a written warning in circumstances where they had made no such assertion and had actually asserted that the warning was verbal. Other than repeatedly calling Mr Stamp and Mr Radcliffe liars with no apparent basis, the Applicant did not establish any discrepancies in their evidence to found such an accusation.

[6] On any view, the Applicant’s sales performance was extremely poor and the Respondent could not have reasonably been required to retain in employment a sales person who had sold only one property in the entire eight months of his employment and had brought in commission which was less than one third of the cost of his salary. Further, the sale was not exclusively associated with the Applicant and he was credited with only half of the commission on this basis. It is also clear that the Applicant had no apparent prospects of making a sale at the point he was dismissed and the conclusion of the Respondent’s managers on this point was reasonable on the basis that the Applicant had not met the appraisal KPI. Accordingly there were valid reasons for the Applicant’s dismissal.

Was the Applicant notified of the reason for his dismissal?

[7] It has been held that as a matter of logic an employee cannot have been given an opportunity to respond to any reason for dismissal based on capacity or conduct in circumstances where the employee is not notified of the reason. An employee must be given an opportunity to respond to the reason for dismissal before the decision to terminate is made.¹⁷

[8] I am not satisfied that the Applicant was notified in the required manner. By the time the Applicant was told that the decision had been made to dismiss him, his dismissal was a fait accompli and had been determined regardless of anything he might say in response.

Was the Applicant given an opportunity to respond to the reason for his dismissal based on his conduct?

[9] Given my finding that the Applicant was not notified of the reason for his dismissal based on his conduct it follows that he was not given an opportunity to respond to that reason.

Was there an unreasonable refusal by the Respondent to allow the Applicant to have a support person

[10] There is no positive obligation on an employer to offer an employee the opportunity to have a support person¹⁸. The inquiry in s. 387(c) is directed to whether any request was unreasonably refused. There is no evidence that the Respondent denied the Applicant the assistance of a support person at any discussion which may have occurred concerning his dismissal.

Was the Applicant warned about the unsatisfactory performance before the dismissal?

[11] I am satisfied that the Applicant was warned about his unsatisfactory performance before the dismissal. The Applicant had sold one property in the entire eight month period of his employment and I accept the evidence of Mr Stamp and Mr Radcliff that they met with the Applicant on 9 July 2019 in his individual sales meeting and informed him that if he did not sell a property within seven days he would be dismissed. The Applicant agrees that there was a meeting on 9 July and that it was attended by Mr Stamp and Mr Radcliff. For the reasons set out above I prefer their evidence.

Did the size of the employer’s enterprise impact on the procedures followed in effecting the dismissal of the Applicant?

[12] While the Respondent is a relatively small Company with less than 20 employees it is part of a franchise and is a member of an employer organisation from which advice could be sought. There is evidence that some advice was sought in relation to dealing with the termination of the Applicant’s employment. I have had regard to the size of the employer’s enterprise but I do not accept that this is a significant factor which could offset any unfairness to a significant degree.

Did the absence of dedicated human resource management specialists or expertise in the enterprise impact on the procedures followed in effecting the Applicant’s dismissal?

[13] The Respondent does not have dedicated human resource management specialist or expertise although it can access such expertise through membership of an employer organisation. For the reasons set out above this is not a factor that weighs heavily in the balance in the present case.

Are there any other relevant factors?

[14] In my view the following factors are relevant in the overall assessment of whether the Applicant was unfairly dismissed. The Applicant has not established that there is any basis for a finding of unfairness on the basis of differential treatment as between himself and other sales staff. I accept the explanations provided by Mr Stamp and Mr Radcliff about the performance of other staff compared to that of the Applicant. In summary there is no comparison between the Applicant and commission only salespersons employed by the Respondent on the basis that the Applicant was required to be paid his salary regardless of whether he sold property or not and commission only salespersons are not paid unless they sell property.

[15] I also accept that other staff were either employed in a different capacity to that in which the Applicant was employed – ie as assistants to salespersons – or were at a different stage of being reviewed by the Directors. It is also the case that other staff made sales while the Applicant did not and on the basis of the evidence of the witnesses for the Respondent, I am satisfied that it was reasonable for the Directors to conclude that the Applicant was not going to sell a property and could not be assisted to do so and that his continued employment was not sustainable. This was particularly so given the state of the Applicant’s listings at the point he was dismissed.

[16] This is not a case where the Respondent lacked the financial capacity to continue to employ the Applicant. However, fairness goes both ways and that object of the unfair dismissal provisions is to afford a fair go all around. I do not accept that it is fair for an employer to be required to maintain a non-performing salesperson in employment for an indefinite period because dismissal would have an adverse impact on that salesperson. On the basis of the Respondent’s evidence the situation had gone on for long enough. The Applicant was not earning enough revenue to cover the costs of employing him and the Respondent was entitled to end his employment on this basis.

[17] I also consider that the Respondent took reasonable steps to assist the Applicant in relation to his performance. In particular I note the weekly sales meetings and the regular individual discussions conducted with staff by the Directors of the Respondent. Further I note that in the final sales meeting before he was dismissed, the Applicant’s target of one sale was recorded in the minutes. This must have alerted the Applicant to the need to improve.

[18] Even if I am wrong in relation to the warning which I have found on the balance of probabilities was given to the Applicant, it is the case that the warning could have validly been given at any time given the Applicant’s poor performance in sales and the Applicant given a week to improve. The Applicant was paid one weeks wages in lieu of notice and this would reasonably cover a period for the Applicant to be warned and the outcome of dismissal would not change. In this regard I note that the Applicant has not put a convincing case to the Commission in relation to the alleged unfairness of his dismissal.

[19] A final matter to which I have had regard is that after the hearing of his application was adjourned and the decision reserved, the Applicant sent ex parte correspondence to my Associate seeking to advance further arguments. When he was informed to desist as the decision was reserved, the Applicant sent further ex parte correspondence. The correspondence was copied to the Respondent by my Associate on both occasions. While I have not had regard to the evidence sent by the Applicant, it appears to be at odds with the evidence given by the Applicant at the hearing and I have no doubt that the purpose of the Applicant’s employment was to sell property regardless of the Applicant’s job title.

CONCLUSION

[20] For these reasons I am satisfied that the Applicant was not unfairly dismissed and that his dismissal was neither harsh, unjust nor unreasonable. I have therefore determined to dismiss his application for an unfair dismissal remedy and an Order to that effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr D Candappa on his own behalf.

Mr J Stamp on behalf of the Respondent.

Hearing details:

21 October.

2019.

Brisbane.

Printed by authority of the Commonwealth Government Printer

<PR716262>

 1   Exhibit A2.

 2   Exhibit A4.

 3   Exhibit A1.

 4   Transcript PN160.

 5   Transcript PN163.

 6   Transcript PN154 – PN159.

 7   Exhibit A5.

 8   Exhibit R3.

 9   Transcript PN752 – PN761.

 10   Transcript PN864 – PN865

 11   Transcript PN874

 12   Transcript PN882

 13   Transcript PN924

 14   Transcript PN928

 15   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371.

 16   Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport Print S5897 AIRCFB 11 May 2000 at [62]

17 Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000) at para. 75, [(2000) 98 IR 137].

18 Explanatory Memorandum to Fair Work Bill 2008 at para. 1542.