Mr Garry Bale v M Langley and K Olliver-Langley t/as the Pool and Spa Shop

[2012] FWA 5763

[2012] FWA 5763

FAIR WORK AUSTRALIA

DECISION

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

Mr Garry Bale
v
M Langley and K Olliver-Langley t/as The Pool & Spa Shop
(U2011/14041)

COMMISSIONER STEEL ADELAIDE, 6 JULY 2012

Termination of employment.

Introduction

[1] This matter is an application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) in the summary dismissal of the applicant, Mr Garry Bale by the respondents Mr Mark Langley and Mrs Kathleen Olliver-Langley, owners of The Pool & Spa Shop (the respondent).

[2] The respondent is a small business as determined by the s.388 of the Act and hence the Small Business Fair Dismissal Code is relevant for consideration. It is noted the code provides that there is an onus on the respondent to be consistent with the code in respect to summary dismissals.

[3] The respondent’s termination of employment letter reads as follows:

“29th November, 2011

Private and confidential

Garry Lee Bale

4 Narida Street, Hallett Cove 5158

Dear Garry

Termination of your employment

I am writing to you about the termination of your employment with The Pool & Spa Shop. I refer to our meeting on 14th December 2009 which was attended by you, Mark Langley and Kathy Olliver-Langley.

During the meeting we discussed serious misconduct issues of:

• conducting your Golden Pool Services business on The Pool & Spa Shop premises



• theft of equipment

As discussed during the meeting, your conduct during that incident:

• was wilful or deliberate behaviour by you that is inconsistent with the continuation of your contract of employment.



• was conduct in the course of your employment engaging in theft, and in the circumstances your continued employment during a notice period would be unreasonable.




It was decided on the 20th December 2009, that your employment was continued with the agreement that you would keep all Golden Pool Services business completely separate from The Pool & Spa Shop and all theft would be discontinued.

Of recent times it has been brought to our attention that:

• Golden Pool Services business has been conducted by you on The Pool & Spa Shop premises.



• You as Golden pool Services have been procuring service customers on The Pool & Spa Shop premises.

Your conduct:

• was wilful or deliberate behaviour by you that is inconsistent with the continuation of your contract of employment.



• caused a serious and imminent risk to the profitability of the Employer’s business in that Golden Pool Services is stealing The Pool & Spa Shop Service customers from The Pool & Spa Shop premises.



• was conduct in the course of your employment engaging in theft, and in the circumstances your continued employment during a notice period would be unreasonable.

We consider that your actions constitute serious misconduct warranting summary dismissal.

You will be paid any accrued entitlements and outstanding remuneration, including superannuation, up to and including the date of this letter.

(Signed)

Sincerely,

Mark Langley, Kathy Langley-Olliver

The Pool & Spa Shop” 1

(The underlining is the tribunal’s)

Evidence and submissions

[4] The applicant was assisted by his wife in submissions and giving his evidence as he asserts he is dyslexic and may occasionally confuse his words. This assistance was significant at times however in full consideration of the material in this matter and the manner of the proceedings the tribunal can identify no prejudice to the respondent by allowing this to occur.

[5] The tribunal heard evidence from the applicant and found he did have problems with recall and articulation at times. He also needed assistance which was readily provided by Mrs Bale at times. He also on occasion appeared to be carefully self serving as to his answers and avoided direct responses which may have been a symptom of his condition.

[6] Mr Gregory Potter gave evidence for the applicant. Mr Potter considers the applicant to be a friend. The tribunal found Mr Potter to be a mature, direct individual clear in his testimony which went to the history of relationship with the applicant, that he was recommended to the applicant by the respondent after June 2010 and has utilised his services since that time. The tribunal found Mr Potter to be a reliable witness.

[7] The respondents, Mr Langley and Ms Olliver Langley, gave direct evidence and the tribunal found them to be earnest and generally reliable in their views.

[8] Mr Anthony O’Brien also gave evidence for the respondent. He is an employee of the respondent and gave evidence of his experience at the respondent’s premises on 26 November 2011. The tribunal found Mr O’Brien reliable.

The relevant facts

[9] The tribunal has considered all the documentary and witness evidence in this matter and has identified the following facts. Where versions of events have differed the tribunal has determined the facts on consideration of the evidence including the credibility of witnesses and the probability of the events in question.

[10] The applicant had for some period run his own pool technician business (Golden Pool Services) prior to being offered a retailing role, working in the respondent’s pool shop in February 2009. He asserts the respondent knew about his business and was happy for him to continue to run it outside working hours as they did not provide a technician service. The applicant did not generally work overtime or on weekends and his knowledge was helpful in the pool shop and a benefit to the respondent’s business.

[11] He asserts his technician services were recommended by the respondents to their customers and he could advertise his services via cards in the shop, a sign board and his diploma on display. There was no specific written or verbal agreement between the parties as to the applicant’s employment and his business operations but the evidence indicates the respondent was aware of its co-existence and apparently no conflicts were anticipated when employment commenced.

[12] In December 2009 the applicant was suspended and accused of theft of equipment from the proprietor. The respondents had suspicions as to the applicant’s behaviour and had contrived a sale of equipment via a known intermediary to them and obtained evidence against the applicant. Such evidence indicated the applicant was involved in theft of two articles. The applicant was suspended for a short time and consequent to further discussions between the parties was reinstated. The applicant has made admissions as to his behaviour at this time. 2

[13] The respondent asserts the applicant received a “Conditions of your Employment” letter which itemised distinctly the conditions of his reinstatement and future employment as follows:

“20th December 2009

Garry Lee Bale

4 Narida Street

Hallett Cove 5158

Dear Garry

Conditions of your Employment

Following the meeting on 14th December 2009, when your misconduct for theft of equipment and money, as well as procuring customers for yourself or your business (Golden Pool Services) during your employment at The Pool & Spa Shop, was brought to your attention and discussed, although these are dismissable (sic) offences, as you admitted to your wrong doing and expressed remorse, we have decided that your employment will be continued under the following conditions.

● All Golden Pool Services business is kept completely separate from The Pool & Spa Shop.

● No receiving or sending of Golden Pool Services stock whilst on the premises or time of The Pool & Spa Shop.

● No receiving or making of any telephone calls, texts or emails for Golden Pool Services whilst on the premises or time of The Pool & Spa Shop.

● All customers who enter The Pool & Spa Shop premises are not to be approached or procured for Golden Pool Services.

● All customers who communicate with The Pool & Spa Shop via telephone, fax or email are not to be approached or procured for Golden Pool Services.

● The Pool & Spa Shop stock is not to be used or exchanged in any manner by Golden Pool Services.

● All deposits and monies paid by The Pool & Spa Shop customers are to be put through the cash register.

● Any aberration from the above will result in instant dismissal.

Sincerely,

Mark Langley, Kathy Olliver-Langley

The Pool & Spa Shop” 3

[14] The applicant denies receiving this letter but accepts that he was verbally advised of the above details applying to his employment on the above date. 4 He accepts he was advised that he had to keep his business separate to the respondent and he agreed to do so.5

[15] In this respect the applicant considers that he had to keep all phone calls separate by use of message bank and answering in his lunch break on a private mobile. 6 Deliveries to his business by courier were to be made to his vehicle which was parked in the car park one metre away from the respondent’s premises. Such vehicle displayed the applicant’s business name. The applicant states the vehicle was unlocked so deliveries within shop hours could be loaded into it without his involvement.7

[16] Under examination from the tribunal the applicant stated:

“I was verbally told. To keep the business separate. Obviously, you can’t remember everything. I don’t believe all of this was verbally told to me, but I do recall the part about keeping the business separate.” 8

[17] However at other times the applicant could recall the instructions he received about phone calls, deliveries and receiving goods, the procurement of customers and the receiving of payment from his customers at the respondent’s premises. 9

[18] Further the applicant under further examination by the tribunal as to his assertion that it was unreasonable for the respondent to expect him to not run his business outside employment and which referred to the eventuality of there being continued conflicts of interest in the relationship and actions of the parties. 10 The applicant apparently recalls that he had the specific meeting with the respondent where he received such instructions and the respondent wrote it down which can only, in probability, refer to the existence and receipt of exhibit R1, the new conditions to prevail.

[19] The tribunal therefore finds that the applicant was explicitly aware of his circumstance at this time, that he accepted the new conditions of employment as per exhibit R1 and all its inclusions and that it is, in the circumstances, probable that he received the letter, despite his denial of having done so.

[20] Thereafter the respondent arranged that all the applicant’s business cards and signboard were removed and replaced and any reference to the applicant’s business also removed. In the circumstance the applicant was clearly of the understanding his private business activities were to be totally separate.

[21] As a result of questioning from the tribunal Mr Langley stated:

“MR LANGLEY: From that day on, we had to make - because of what had happened, and Garry had admitted to it as well - he admitted to both incidents of stealing the pump and the filter - or attempting to steal the filter. He admitted to both of that, and we had to make sure that it was quite clear that his business was totally separate from ours, and that's the only thing we could do, is make it totally separate. We couldn't say, "We'll have a bit of this and a bit of that, but not that". It had to be totally separate, and that meant no deliveries, no faxes, no emails, nothing.” 11

[22] The applicant in his evidence was aware there was now a substantial change to the previous arrangements and he accepted such change and accepted the respondent’s instructions. 12 The applicant however asserts that the respondent did direct some service work to him on occasion.

[23] In February 2010 he was informed by the respondent that they had employed their son, Mr Michael Langley, as a service technician to do the service work for the company and that henceforth all service work would be directed to that person. 13

[24] The applicant indicates he thereafter endeavoured to do so except when the customer in question was a prior customer of his own business. 14 He therefore directed new customers to the respondent’s technician but he has retained service work for his own business from customers he recognised he had previously provided service to. There is no evidence the applicant’s view was ever put to the respondent that he considered past service customers were his customers and he was free to transact with them. The tribunal considers this a confusing division of responsibility by the applicant and may have led to conflict with the employer.

[25] The applicant subsequently changed his approach to requests for advice and information from the respondent’s service technician and refused to provide such advice. He did so as he considered such requests a conflict of interest in that he was requested to give service advice to the technician when he was not allowed to operate his own service business. 15 The applicant however does accept that his employment was predicated on the fact he was an experienced person in such matters and would assist the proprietor with his accumulated skill and knowledge.16 Again, the applicant had determined a limit as to his responsibility to the employer in terms of access to his knowledge.

[26] Subsequently the new technician would refer to the applicant at times for advice on technical matters. The applicant completed two work requests for him as a sub-contractor but rejected other requests as the applicant considered it was a conflict of interest. 17

[27] In October 2011 the respondent observed the applicant at approximately 4.00pm on a working day in the act of physically accepting a delivery of material into his vehicle. The respondent admonished the applicant verbally at this time for doing so. The applicant denies this occurred and submits that the car park area in question is not the respondent’s premises and infers that he was on a late lunch break at the convenience of the respondent. Subsequently the respondent had confirmed to them from two suppliers that they regularly delivered to the applicant at the respondent’s premises by the applicant’s instruction.

[28] The tribunal, on considering the evidence, finds that the parking area is the business premises of the respondent as it is adjacent their front door and leased payments are made in respect of such parking. Further, the act of receiving such deliveries in a direct contravention of the agreed provisions of the applicant’s “conditions of employment” document agreed to by the applicant. The tribunal finds that the applicant was warned at this time that his actions were a considered breach of his employment terms.

[29] On Saturday 26 November 2011 the respondent became aware of a number of issues concerning the applicant’s performance. Discussions with a customer (Mr Gardner) indicated that they had arranged service work from the applicant by engaging him on the respondent’s premises and had paid the applicant at the respondent’s premises on two occasions in 2011. The customer had called in to make a further payment.

[30] The respondent had also received an anonymous phone call from a person seeking the applicant do some service work on the assumption the applicant was “Garry your service guy”.

[31] On a further occasion three customers (the Wadsworth’s) entered the respondent’s premises and wanted to pay a cash deposit on an arranged purchase and fitting of a pump. The customer allegedly identified “it was cash agreement with the man who worked here.” 18 The customer described the applicant and advised that no documentation had been provided. The respondent submits that a purchase of equipment in these circumstances can amongst other matters create a warranty problem for the purchaser. The customer explained they had been given verbal quotes for purchase and fitting and a time for fitting arranged.

[32] The respondent considered these three matters to be breaches of the applicant’s contract of employment in that he was apparently still operating his service business from the premises. They also considered the applicant was stealing their service work and sales as the customers were confused as to whom the applicant was working for. The pump in question was considered to be from the respondent’s stock.

[33] The respondent made some initial enquiries with the police in regard to their suspicions of theft by the applicant, made some further enquiries of the customers mentioned above and considered their actions in respect to the applicant.

[34] On the Tuesday following, they met with the applicant and explained their position and sought an explanation. The applicant denied all accusations as to his conduct and the conversation became heated. The respondent presented him with the letter of termination of employment and he was summarily dismissed for serious misconduct. The applicant submits that he was offered a “resign or else” situation and denies the accusations.

[35] Subsequent to the dismissal the respondent identified a further incident they assert indicates that the applicant was procuring service work and sales for his own business when employed by them involving a Mr Leahy.

[36] In evidence the applicant has admitted receiving payment in the respondent’s premises from his customers but only by default in that he has instructed them not to do so. He however did receive such payments.

[37] The applicant after dismissal has not been employed although he has looked for other employment but then has concentrated on building up his own business.

The legislation

[38] With regard to the provisions of s.385 of the Act the Small Business Unfair Dismissal Code is a relevant consideration in this matter. It provides that a summary dismissal without notice or warning by an employer can be fair when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety. The Code also underlines the need for a valid reason for dismissal generally based on the employees conduct or capacity to do the job.

[39] Regulation 1.07 of the Fair Work Regulations 2009 which underpins the term of serious misconduct for the purposes of the act gives further illustration to the term.

1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3) (b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.

[40] A valid reason for termination of employment must be “sound, defensible and well founded” and not “capricious, fanciful spiteful or prejudiced.” 19 The termination must be defensible or justifiable on an objective analysis of the facts.20 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.21

[41] The tribunal is further guided by Asbury C, who states in the matter of Mourilyan v James Hardie Australia Pty Ltd:

“In circumstances where the reason for a dismissal is serious misconduct said to amount to fraud, it is critical that an assessment be made as to whether, on the balance of probabilities, the employee did actually engage in the serious misconduct. It is not the case that where fraud is alleged, that the standard of proof to be applied shifts, so that the question of whether the employee did engage in fraud is determined on the basis that it must be established beyond reasonable doubt.” 22

Consideration

[42] The tribunal has made the findings of fact in this matter and it is therefore uncontentious that the applicant was provided a significant warning as to the respondent’s requirements on him when he was reinstated in employment in 2009. He was provided with specific instructions and requirements and he accepted those including that any further aberration or incidence will result in his instant dismissal.

[43] With that background the applicant has continued to demonstrate a single minded approach to his definition of what “keeping his business separate” means. In that perception he has continued to service customers on the basis he defines them to be either his or the respondent’s based on previous transactions. Given the fundamental responsibility of employees to provide fidelity to their employer such an approach is not sustainable. A customer entering the respondent’s premises and approaching an employee cannot easily be ascribed to be a customer or not a customer of the respondent on the arbitrary fact of a previous commercial relationship with the applicant.

[44] In the tribunal’s view the applicant has identified he has curtailed the access to his knowledge of the industry to his employer when he was at all times employed as an experienced employee. He has continued to receive supplies for his business at the employer’s premises, he has received payments on the employer’s premises and it is reasonable to assume has transacted on the phone with his clients.

[45] The final incidents relied upon by the respondent must be limited to those where the customers involved were known and transacted with the respondent. In the tribunal’s view the remaining two incidents provide further information that the applicant was not keeping his business separate and the respondent did, in the case of Mr Gardner, suffer from a loss of sales and in the other (the Wadsworths) was potentially in danger of being commercially deprived of sales.

[46] Considered together they indicate that the applicant was not carrying out the dedicated, lawful and reasonable instructions consistent with the contract of employment. His actions were wilful and deliberate behaviour that was inconsistent with the continuation of the contract of employment.

[47] Such actions in the above circumstances and taking into account the previous dedicated warning to the applicant constitute a valid reason for dismissal of the applicant.

[48] The tribunal however considers that in all the circumstances the activities of the applicant in preserving his business activities whilst employed cannot be described as fraud which would require the involvement of the criminal jurisdiction. However they are serious misconduct of an employee in the above circumstances.

[49] I therefore refuse the application for review of the dismissal and the application is dismissed.

COMMISSIONER

Appearances:

Mr G Bale and Ms M Bale for the applicant

Mr M Langley and Ms K Olliver-Langley for the respondent

Hearing details:

2012:
Adelaide
30 April

 1   Exhibit A1

 2   PN 682

 3   Exhibit R1

 4   PN 1558-1560

 5   PN 278

 6   PN 294

 7   PN 309

 8   PN 1558, 1560

 9   PN 290-313

 10   PN 935-946

 11   PN 1589

 12   PN 560, 574

 13   PN 528

 14   PN 544

 15   PN 597

 16   PN 601

 17   PN 679-680

 18   PN 2046

 19 See Selverchandron v Peteron Plastics Pty Ltd, (1985) 62 IR 371 at 373

 20   See Rode v Burwood Mitsubishi, unreported AIRC Print R4471 at para 90 per Ross VP, Polites SDP, Foggo C

 21 Miller v University of New South Wales, (2003) 132 FCR 147 at 153 per Gray J

 22   [2010] FWA 9672 at PN 86

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