Mr Glenesk Allan v Jones and Jones Master Plumbers Pty Ltd

[2012] FWA 4483

[2012] FWA 4483

FAIR WORK AUSTRALIA

DECISION

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

Mr Glenesk Allan
v
Jones and Jones Master Plumbers Pty Ltd
(U2011/2124)

DEPUTY PRESIDENT SAMS SYDNEY, 31 MAY 2012

Termination of employment - whether reason for dismissal poor performance or redundancy - procedural unfairness - dismissal ‘harsh, unreasonable and unjust’ - reinstatement not appropriate - compensation ordered.

[1] This is an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’), for an unfair dismissal remedy, filed by Mr Glenesk (Glenn) Ronald Allan (the ‘applicant’) following his dismissal by Jones and Jones Master Plumbers Pty Ltd (the ‘respondent’) on 5 October 2011. The applicant had been employed by the respondent since January 2000, firstly as a plumber, then as a Foreman (2005) and from March 2008, as the Plumbing Supervisor. His final employment arrangement was subject to a letter of offer and an employment contract which stipulated a salary of $105,000 (inclusive of superannuation). His hours of work were 7am - 5pm Monday to Friday and 7am - 1:30pm Saturdays. The applicant is 38 years of age. His wife works part time and they both support an 18 month old child. The applicant said that since his dismissal, he had received no letter of termination or separation certificate and had not been paid his outstanding entitlements.

[2] On the day of his dismissal, the applicant received a phone call from one of the respondent directors, Mr Jim Quinlan, who told him that the Company was running out of work and he was to be ‘let go’. He denied telling Mr Quinlan that he ‘knew it was coming’. When he asked Mr Quinlan whether he had been made redundant, Mr Quinlan did not respond. The applicant made two unsuccessful attempts to speak to Ms Roza Jones, the wife of Mr Paul Jones, Company Director, in the office the next day. Mr Quinlan told the applicant he should return his work ute, phone and laptop. Mr Quinlan confirmed that he had been made redundant.

[3] On 12 October 2011, the applicant made phone contact with Ms Jones and enquired about his entitlements. She told him that she would get around to it. After receiving nothing from the respondent by 17 October 2011, the applicant lodged his unfair dismissal application. He said the respondent then changed the reasons for his dismissal at the conciliation of his claim which was unsuccessful.

[4] The applicant believed his dismissal was unfair because:

• he had received no letter of termination outlining the reasons for his dismissal;



• the respondent changed the alleged reason from redundancy to poor performance;



• he was led to believe that he would be returning to work on 10 October 2011 after a period of annual leave;



• he was given no opportunity to respond to his termination of employment and not offered to reduce his salary for continued employment;



• he had received no complaints and no warnings about his performance; and



• he had worked for the respondent for 12 years, without any verbal or written warnings.

[5] The applicant said he had applied for around 25 jobs since his dismissal and had received no income for 6 weeks until securing a job as a casual general hand where his wife works. He is earning half of what he earnt with the respondent and had to borrow $4, 000 to complete training courses and $10, 000 from his father to keep afloat and pay the bills.

[6] At this juncture, I observe that the respondent insisted at the hearing of this matter that the applicant had been dismissed for poor performance. It is curious therefore that in the employer’s response to the application (Form F3), the respondent made no mention of the applicant’s performance. Rather, it seems to confirm the applicant’s initial advice that he was, in fact, made redundant due to a lack of work. In its response, the respondent stated:

The applicant was dismissed as per Clause 6 of his signed contract which we note commenced on 11/3/08.

The applicant states there was no prior warning. We dispute this as the applicant was well aware that we were running out of work and he chose to take his annual leave.

The applicant was employed as a plumbing supervisor as per his contract.

The applicant got fringe benefits to the value of approx. $6,000 on our account which is to be paid back. On his termination, we attempted to finalise his termination pay but he swore at Roza Jones and hung up the telephone.

The applicant still has plant and equipment and master keys in his possession belonging to Jones & Jones.

[7] Reference to clause 6 (above) to his signed contract is the following provision in a contract of employment which commenced on 11 March 2008. Clause 6 is as follows:

6. ENDING (TERMINATING) THE EMPLOYMENT

6.1 By Employee

You may terminate your employment with Jones & Jones by giving 4 weeks’ notice in writing.

6.2 By Jones & Jones Upon Giving of Notice

Jones & Jones may terminate your employment by giving 4 weeks’ notice in writing or 4 weeks payment in lieu.

6.3 By Jones & Jones for Proper Cause

Jones & Jones may terminate this agreement at any time without prior notice if you:

(1) commit any serious or persistent breach of any of the provisions of this agreement;

(2) are guilty of any grave misconduct or wilful neglect in the discharge of your duties;

(3) become of unsound mind;

(4) are convicted of any criminal offence other than an offence which in the reasonable opinion of Jones & Jones does not affect your position as employee of Jones & Jones;

(5) become permanently incapacitated by reason of accident or illness from performing your duties under this agreement. For the purposes of this clause, incapacity in excess of 90 consecutive days or for an aggregate period of 90 days in any period of 12 months shall be deemed to be permanent incapacity unless Jones & Jones has adequate accumulated sick or annual leave;

(6) are found with illegal drugs or alcohol in your possession or body;

(7) breach the alcohol and drug policy of Jones & Jones; or

(8) do anything which would justify summary dismissal at common law.

[8] At the hearing, Ms Roza Jones, who had prepared the respondent’s F3, asserted that the applicant was dismissed according to Cl 6.3 of the contract of employment. However, she acknowledged that the applicant had not been provided with any letter of termination to that effect, or at all. Ms Jones said that the applicant had been paid all his outstanding entitlements, including redundancy pay in 2008 when he was re-engaged as the plumbing supervisor. Ms Jones’ daughter, also representing the respondent, claimed the applicant received many warnings about his performance.

[9] The applicant’s partner claimed that he was entitled to 11 weeks redundancy pay and that the respondent had not followed due process in terminating his employment. In cross-examination, the applicant conceded that he had once, during his lunch break, made an inquiry as to alternative employment.

[10] The applicant added that because he looked after a number of jobs, he had varied hours, but was directed to record 7:30am - 3:30pm for accounting convenience. He would occasionally work on a Saturday when required. He said he had never received any complaints about not working every Saturday.

[11] The applicant was asked about a number of site problems. He believed these issues were not his responsibility, as ultimately, Mr Jim Quinlan, was in control of all jobs. The respondent claimed that the applicant was responsible for the following losses on four projects:

Cochlear HQ - Macquarie University ($234,632.00)

Glenquarie Shopping Centre - ($113,914.00)

Oakdale - ($6,056.00)

VW Chullora Site - ($113,723.00)

[12] The applicant denied he was negligent in respect to a piping work incident on the Oakdale job. The applicant said that he was not responsible for budget control and he was only made aware of cost overruns at the end of each month. He agreed that the Glenquarie job was not going well financially and in one month had gone from an $80,000 profit to a $113,000 loss. This has been explained in the monthly foremen’s meetings. He denied he was in control of the job and said there were a number of factors which caused the cost overrun. He was never told that he was responsible for the loss. The applicant denied he was responsible for the incorrect placement of the syphonics at the Glenquarie site. It was the responsibility of the builder and roofing contractor. In respect to the VW job, the applicant said he was asked to go to that job when it was 70 percent complete and losing money. He was not responsible for the earlier losses.

[13] The applicant said that Mr Quinlan had never told him his job drawings were not up to standard; indeed quite the reverse. The applicant said that he did spend some time in the site shed doing the material orders, which Mr Quinlan would then cross check and price. This was in addition to his duties of controlling the site, site safety, dealing with builders and getting quotes from subcontractors. The applicant agreed he was not always at work by 7am - but Mr Quinlan didn’t mind so long as the job was done. He was never warned about punctuality.

[14] Two statements, in support of the applicant, were tendered by Mr Daniel Lewington and Mr James Connell without objection. Neither person was required for cross-examination.

[15] Mr Daniel Lewington was employed by the respondent as an apprentice from 22 September 2008 - 1 October 2011 and mostly worked under the supervision of the applicant. Mr Lewington said he was asked by Mr Quinlan to extend his annual leave in September 2011 because work was slow and no new contracts had been won. He was given this reason again by Mr Quinlan when he was terminated on 1 October 2011 with two others who had been working on the same site as the applicant. Mr Lewington described the applicant as honest, hardworking and a very fair boss. The applicant was well liked and showed great leadership and loyalty to the respondent. He had been told, by Mr Quinlan, to aspire to the applicant’s work ethic and example.

[16] Mr James Connell was contracted to the respondent to supply and operate an excavator for in ground work when other excavators were tied up on other jobs. He referred specifically to the delays at the Glenquarie Project which became more difficult and costly because:

(a) The pit dimensions were approximately 3m x 2m x 2.5m deep x 2 pits in solid rock.

(b) My excavator was only a 4.5ton [sic] excavator and Glenn advised that this job would require a 20ton [sic] excavator but we would never get one that big into the available space. The public road access needed to be kept open at all times and my excavator could only just fit, restricting my manoeuvrability. In my professional opinion there is no way anything bigger than my excavator would have been able to fit. This meant we had to rock break (jack hammer) the hole and took a lot longer than expected. The rock was so hard that it caused damage to my machine including burst hoses and rock breaker chisels.

(c) Because of the restricted space I was unable to keep my truck close to the excavation area. This meant that I had to constantly stop excavating to get my truck to land and remove the spoil to allow me to continue to excavate.

Respondent’s Evidence

[17] Mr Paul Jones described the applicant’s role as follows:

Supervising the plumbers under him, ensuring they were on site on time and working, inspecting installations, Testing of pipe work and installations, co-ordinating works, making material lists, administrative works ie. S/W/M/S, As-Built Drawings.

[18] Mr Jones gave details of a phone call from the applicant in June 2011 in which he sought to buy into the business and spend more time in the office and ‘off the tools’. Mr Jones had explained to him that it would be expensive and his supervisory role wouldn’t change very much. Mr Jones said that in the next month he became aware that the applicant had applied for another job and was looking for alternative employment during work time. He referred to an email from the applicant to another employer which read:

Thanks for your time on the phone earlier this morning, as requested please find attached my resume. As mentioned I have been with my current company for the last 11 years so my resume may seem a little thin but hopefully you will be able to see what I have achieved with Jones and Jones and why I need to branch out into something with more room for development.

[19] Mr Jones said that in early 2011, he and Mr Quinlan began holding monthly performance meetings with all Foremen Plumbers. At the May meeting, Mr Jones told the applicant his performance on the Cochlear job was ‘abominable’ and that the respondent had lost ‘so much money’ on that job. He told the applicant that he was responsible and that he needed to supervise his guys better and have them work harder.

[20] At the August 2011 meeting he told the applicant that things were getting worse and that the respondent had lost $200,000 in a month on the Glenquarie job. When the applicant said it wasn’t all his fault, Mr Jones told him that he had been informed that he had not been on site when he was meant to be. He warned him of instant dismissal and said he was a ‘bad example’ and was ‘having a complete lend of me’.

[21] Mr Jones said that on 29 September 2011, he had the following conversation with Mr Quinlan:

Jones: “Mate, I have just been looking through the figures with Roza and it’s not looking good. We have to make some serious changes around here. Especially Glenn, he has to go. He has lost us close to half a million dollars in his last few jobs. Theres [sic] been a lot of solid evidence as well that he isn’t putting in the hours or working as hard as he should be”.

Quinlan:“I know Paul, I know. Next time I get a chance to speak with him, I’ll sack him”.

[22] In oral evidence, Mr Jones said that as he had not filled in the Form F3, he could not explain why performance issues were not identified in the document. However, having been in business for 25 years, he measured the performance of supervisors directly against profit and loss on projects. He considered that training was provided verbally to the applicant by Mr Quinlan on regular occasions and he was spoken to at monthly Foremen meetings. He accepted that he did not discuss matters with the applicant on a day to day basis.

[23] Mr Jones said the applicant was paid a lot of money and he expected that he should know what he was doing. While Mr Jones held the applicant responsible for losses, he agreed he did not sit down with him to discuss how these losses might be mitigated or avoided. Mr Jones added that while annual bonuses were given to everyone, they were not linked to performance. Mr Jones said he had not dismissed the applicant until October 2011, despite his warnings in May and July, because he was unaware of some of the issues until some time later. He had also wanted to give him a ‘fair go’ and not embarrass him by disclosing the size of the losses. Mr Jones conceded that the applicant’s jobs were not the only ones he had lost money on. However, the issue was twofold - the loss of money and the fact that he didn’t tell anyone of the losses.

[24] Mr Jones acknowledged that he was unfamiliar with the process of dealing with an employee who had performance issues. He agreed that no written warnings had been given to the applicant. What was important to Mr Jones was ‘firing someone for the right reasons’.

[25] Mr Jones believed that the applicant’s failure to fulfil his duties led to the job cost blowouts. However, he agreed the specifics were not discussed with the applicant during the course of the project or subsequently. In respect to the VW job, Mr Jones agreed that he actually praised the applicant for bringing it in on profit. Mr Jones accepted that the industry was very competitive. He claimed the applicant had said each month that the Glenquarie project was profitable and right at the end ‘it’s a big fat loss’. He said the applicant should have had control of the budgets of the jobs he supervised. He said he gave the applicant the benefit of the doubt over two years and if it had been up to him ‘we would have gotten ridden [sic] of you a long time ago...and employed someone capable of doing your role.’ He said the applicant’s position had now been replaced by a leading hand, Mr Nathan Edwards. He conceded he was nervous about Mr Edwards being up to the task.

[26] In re-examination, Mr Jones deposed that he had not set higher standards for the applicant compared to the other Foremen. They were all told at meetings of the jobs which were losing money and he tried to understand why. Mr Jones said he had spoken to Mr Quinlan, on numerous occasions, about the applicant’s performance, but as he and the applicant were friends, he did not think Mr Quinlan took the necessary steps he should have. He had expected Mr Quinlan to dismiss the applicant because of their very close relationship. In summary, Mr Jones believed the applicant had been there too long. He wanted to sit in the office and fill out paperwork. He was not punctual and not on site at crucial times.

[27] Mr Jim Quinlan is a director of the respondent. He deposed that, in May and June 2011, he had cause to question the applicant as to his commitment to, and standard of his work. The applicant had replied that he had a lot of paperwork to do. Mr Quinlan said that towards the end of the applicant’s employment, he would only do work he wanted to do and leave more menial or difficult work until he was badgered into doing it.

[28] Mr Quinlan gave evidence of defects in the pipe work on the Eastern Creek Project which he attributed to the applicant not properly testing the site. It cost the project $10,000 and the loss of the client. As to the Glenquarie job, Mr Quinlan attributed the substantial loss to the applicant’s lack of understanding as to the work program for excavation and the installation of syphonic downpipes in the wrong locations. The applicant’s answer was ‘oh well - I can’t do everything’.

[29] Mr Quinlan’s version of the dismissal conversation on 5 October 2011 was as follows:

Quinlan:’Hi Glenn. Look, as much as I don’t like doing this, I have spoken with Paul and I am going to have to let you go’.

Applicant:’It isn’t really any surprise to me, I knew it was coming’.

(As earlier mentioned the applicant denied Mr Quinlan’s version of this conversation.)

[30] In oral evidence, Mr Quinlan agreed that he did not give the applicant a reason why he was to be ‘let go’ in the conversation and accepted that he was entitled to a reason. Nevertheless, Mr Quinlan believed his dismissal was for poor performance which he and Mr Jones had discussed in depth. Mr Quinlan acknowledged that the applicant had received no written warnings, but he had spoken to him numerous times when reviewing progress on various jobs. He further conceded that the procedures for dealing with the applicant’s performance had not been followed.

[31] Mr Quinlan acknowledged that the applicant was not 100 percent responsible for the way jobs were priced. However, they went through the figures and pricing on a monthly basis and the applicant needed to be aware of what the budgets were. Mr Quinlan confirmed that the Cochlear job was priced three times and started with a $350,000 deficit. This was not unusual as it was hoped to bring this figure in over the life of the project. Mr Quinlan also said the applicant’s own overhead costs were not included in every quote for a job. He said the applicant’s performance was satisfactory on the Cochlear job, but there were problems with it.

[32] As to the losses on the 4 jobs identified by Mr Jones, Mr Quinlan said that the ‘wheels started to fall off probably in the last 12 months’. The applicant lost interest in the work and told him so. Mr Quinlan said he may have mentioned to the applicant once about being late for the job, but other instances of being late for work were discovered subsequently. Mr Quinlan accepted that the applicant was not present on the VW job for the entire time of construction, but he was overseeing it. He agreed the applicant had arrived when the job was 60 - 70 percent complete. He recalled Mr Jones sending the applicant to the job to bring it back on budget. Mr Quinlan conceded that the applicant had done so.

[33] Mr Quinlan agreed that in a conversation on 4 October 2011, when the applicant was due back the next day after annual leave, he told him ‘things were a bit slow’ and to come back the following Monday. However, no decision as to his dismissal had been finally made at that stage. Mr Quinlan agreed that, in hindsight, there was probably a better way of doing things, but the applicant had agreed it wasn’t working out. Mr Quinlan added that the respondent was happy with Mr Edward’s performance so far.

[34] In re-examination, Mr Quinlan said the only reason the applicant was put off was because of his financial performance on the jobs. Mr Quinlan agreed that his friendship with the applicant probably stopped him from being entirely honest when he dismissed him.

SUBMISSIONS

[35] The applicant said he was never told there were problems with his performance and never given any opportunity for training or to improve. Originally, the respondent had said there were no issues of performance and now it claims there were. The applicant was given no letter of termination or separation certificate.

[36] Mr Jones submitted that the applicant was not made redundant, nor was he unfairly dismissed. He was told his performance was not good and for the last 8 - 12 months had not acted in the best interests of the Company. However, there was no intention to breach due process, but perhaps Mr Quinlan’s friendship with the applicant prevented him from being brutally honest with him. The applicant had demonstrated his negligence and that is why he was dismissed.

CONSIDERATION

Unrepresented Litigants

[37] At the outset, I would observe that as both parties were unrepresented the usual procedural difficulties were very evident in this case. Unsurprisingly, the questioning of witnesses became an opportunity for arguing between the questioner and the witness; the evidence was riddled with leading and irrelevant questions and the participants in the proceedings would frequently interupt or speak over each other. As a result it was difficult for the parties to properly focus on the issues which needed to be articulated and developed in the context of the Act’s unfair dismissal provisions. The proceedings, despite my best endeavours, were somewhat disorderly.

[38] As I said in Dickinson v Calstores Pty Ltd [2011] FWA 6858 [PR515330] at para [115]:

‘...the task of the Tribunal is to ensure that the unrepresented litigant is given as much guidance and assistance as is reasonably acceptable and most certainly not to act as an advocate in the cause for the unrepresented person. Invariably, this will involve granting a degree of procedural latitude, when the person is presenting a case and, most particularly, when the person is preparing evidence and examining witnesses. In this respect, I refer to what a Full Bench of the Australian Industrial Relations Commission said in Davidson v Aboriginal & Islander Child Care Agency (1997) Q0784,at page 6-7:

‘In our view the general approach to be taken in proceedings involving an unrepresented party is set out in the following passage from the judgment of Samuels JA in Rajski v Scitec Corporation (NSW Court of Appeal, 16 June 1986, unreported):

". . . the advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinary suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored. But the court should be astute to see that it does not extend its auxilliary role so as to confer upon a litigant in person a positive advantage over the represented opponent". [cited with approval by Sackville J in Morton v Mitchell Products [1996] 828 FAC 1 (18 September 1996)].

What must be done to assist an unrepresented party depends on the nature of the case and the parties intelligence and understanding of the case: Abraham and Anor v Bank of New Zealand (1996) ATPR 41-507.

A member has a responsibility to ensure that the proceedings are fair. This means that in some circumstances a member has an obligation to intervene, both for the benefit of an unrepresented party and more generally.

In a case involving an unrepresented party the Commission should endeavour to ascertain the true legal character of the claims made. As the High Court said in Neil v Nott and Anor (1994) 121 ALR 148 at 150:

"A frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy."

Further as Kirby P noted in Burwood Municipal Council v Harvey (CLS 1995 NSWSC CA 51):

"Some judicial officers are, by personality and disposition, more inclined to intervene in proceedings than others. The appearance of justice and fair procedures does not impose a monochrome uniformity upon judicial conduct such that only one style of conducting proceedings is permitted. There are special restraints in the conduct of criminal trials. Cf. Titheradge v The King (1917) 24 CLR 107 , 116; X v Y [No. 2] [1954] VLR 715 (SCV), 718; R v Delaney [1955] VLR 47 (FCV), 50. But in civil proceedings there is much greater room for variety and innovation. T.D. McCawley, "Judicial Intervention in the Examination of Witnesses" (1957) 31 ALJ 529 , 530;

The assistance provided by a member may, depending on the circumstances, include:

_ identifying the issues which are central to the determination of the particular proceedings. For example, if a respondent to a s.170CE application is arguing that the applicant is excluded from the operation of the relevant provisions of the Act by virtue of reg. 30B(1)(d) then the pertinent issues are:

- was the applicant engaged as a casual;

- had the applicant been employed by the respondent on a regular and systematic basis for a sequence of periods during a period of at least 12 months; and

-did the employee have a reasonable expectation of continuing employment by the employer.

-drawing a party's attention to the relevant legislative provisions and key decision(s) on the issue being determined. For example, in relation to a reg. 30B(1)(d) matter - Reed v Blue Line Cruises (per Moore J, Dec 571/96, 26 November 1996);

_ asking a party questions designed to illicit information in relation to the issues which are central to the determination of the particular proceedings;

_ assisting a party to conform to the Brown v Dunn principle and other procedural rules designed to avoid unfairness; and

_ drawing a party's attention to the relative weight to be given to bar table statements as opposed to sworn evidence.

A member may also intervene, to an appropriate extent, by asking questions of witnesses. Such a role is appropriate in the following circumstances:

·to clear up a point that has been over looked or left obscure;

·to obtain additional evidence to better equip the member to choose between the witnesses versions of critical matters;

·to exclude irrelevances and discourage repetition;

·to ask admissible questions which a party is unable, for the moment, to formulate; and

·to facilitate expedition in the progress of the proceedings. [See generally Government Insurance Office (NSW) v Glasscock (1991) 13 MVR 521 at 534 per Handley JA; and Spiteri v Monocure Pty Ltd (1995) 62 IR 359.]’ See also Wan v Australian Broadcasting Commission (1999) PRS6650.

[39] Despite the aforementioned difficulties, I do not impute any improper or misleading conduct by either party during the proceedings. I am well satisfied that they both were given every opportunity to present their respective cases to the Tribunal as they saw fit and put whatever they wished to put without any undue technical interference or objection. This is entirely consistent, of course, with s 577 of the Act which states that:

FWA must perform its functions and exercise its powers in a manner that:

(a) is fair and just; and

(b) is quick, informal and avoids unnecessary technicalities; and

(c) is open and transparent; and

(d) promotes harmonious and cooperative workplace relations.

Legislation and Principles

[40] It seems to me that the crux of this case is whether the applicant was dismissed for poor performance and negligence or lack of work, equating to a real and effective redundancy. I am satisfied, from the relevant evidence, even including that of the respondent, that the applicant was dismissed due to the lack of work. That said, I hasten to add that, on either competing argument, the respondent’s processes leading up to, and including the applicant’s dismissal, fell well short of expected industrial standards and the specific requirements of the Act. This was properly conceded by the respondent. I shall come back to the issue of procedural unfairness shortly.

[41] The statutory framework which underpins FWA’s consideration of unfair dismissal applications is to be found at s 387 of the Act. That section is expressed as follows:

387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.

[42] The frequently quoted authority as to the meaning of ‘harsh, unjust and unreasonable’ within an industrial context is that of the High Court in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410, where McHugh and Gummow JJ said:

“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted”.

[43] The generally accepted meaning of the adjective ‘valid’ in s 387(a) of the Act derives from what North J said in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly”.

[44] As is apparent, subsections (b), (c), (d) and (e) of s 387 are matters relevantly dealing with whether a dismissed employee was afforded procedural fairness. The High Court in Byrne & Frew v Australian Airlines Ltd also described the distinction between procedure and substance in the following way:

“The distinction between procedure and substance is elusive. This is so even in those fields of private international law, the statute law dealing with limitations of actions and the effect of repeal upon accrued rights, and the Statute of Frauds, where it has an entrenched operation. In our view, it is unhelpful and contrary to the tenor of the Award to introduce it into cl 11(a).

That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh, unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable. But the question under cl 11(a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking to the first issue before there is seen to be any need to enter upon the second.”

[45] The applicant insisted that he had been denied procedural fairness prior to when he was dismissed. In my opinion, these compliants are well founded. At this juncture, I refer to the decision of Moore J in Wadey v YMCA Canberra [1996] IRCA 568, 12 November 1996, as to the right of an employee to appropriately defend himself or herself in respect to allegations made by the employer:

In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of allegations concerning the employee's conduct so as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.

[46] In my view, the respondent has breached virtually all of the procedural requirements identified in s 387 of the Act, in that:

i. the applicant was never notified of the alleged reason for his dismissal - or any reason - until one month after dismissal, and this was not the real reason;

ii. obviously, given these circumstances, the applicant was given no opportunity to respond to the reason;

iii. a support person was not offered; and

iv. the applicant was never warned of unsatisfactory performance, or given any opportunity to improve or modify his behaviour.

In addition, the size of the employer’s enterprise could not mitigate against the appalling lack of procedural fairness. As was obvious, the respondent had no dedicated HR management specialist or expertise to draw upon. (ss (f) and (g))

[47] It needs to be stressed that Mr Quinlan gave evidence that he did not tell the applicant why he was to be dismissed and he should have and that the procedures dealing with the applicant’s dismissal were not followed.

Real reason for dismissal

[48] There are numerous examples in the evidence which compel me to the conclusion that the real reason for the applicant’s dismissal was a down turn in work. This evidence includes the uncontested evidence of the applicant, Mr Lewington and Mr Quinlan, and even that of Mr Jones. I shall come back to this evidence momentarily.

[49] It follows that I do not accept the respondent’s assertion that it was the applicant’s negligence, in particular his lack of control over budgeting, which resulted in his dismissal. The evidence permits me to make the following findings:

(a) the applicant was never warned that his performance was unsatisfactory; let alone negligent;

(b) the applicant received no written warnings that his performance was unsatisfactory;

(c) monthly meetings in which all foremen were informed of the progress of the projects, do not constitute warnings, either collectively or individually;

(d) it was grossly unfair to ‘sheet home’ to the applicant, 100 percent responsibility for losses on particular jobs. The applicant and Mr Connell gave uncontested evidence of other mitigating factors. They were entirely plausible reasons for lost time and additional costs;

(e) In one instance (the VW job) the applicant was sent to the job when it was 60 - 70 percent complete. The respondent’s reasons for dismissal contradict the uncontested evidence that the applicant was sent to the VW job specifically to turn it around. He did so and was congratulated for it. In another case, it appears the job was deliberately under quoted in order to secure the contract, with a view that the costs would be recouped over time;

(f) the losses outlined by the respondent were over a period of 2 years. If the applicant was wholly responsible it beggars belief that something would not have been done before he was dismissed to at least warn him of his alleged poor performance or warn him that a failure to improve his performance might result in his dismissal.

(g) the financial documents relied on by the respondent were totally unsatisfactory and unreliable. They simply show accumulated losses on 4 projects without any specific breakdown or detail as to the reasons for the losses, save for a sweeping generalisation that the applicant must have been responsible because he was the plumbing supervisor; and

(h) contrary to the respondent’s assertion of the applicant’s responsibility for budgeting, there is no such reference in his contract of employment or letter of offer either expressly or implied, that one of his duties is in respect to budgeting. Nor did the applicant ever hold himself out to be responsible for project budgeting.

It follows from the foregoing that I do not consider that there was a valid reason for the applicant’s dismissal.

[50] Notwithstanding these findings, I do not doubt the respondent’s view that the applicant appeared dissatisfied with his job and was looking for alternative employment. In addition, I accept he may well have been less than punctual on occasions and may not have been working to the optimum of his capacity or the respondent’s expectations. However, I also accept that his hours were flexible due to the nature of his role. Even so, these concerns were cause for warnings and opportunities to improve, not instant dismissal on 5 October 2011 in the unsatisfactory circumstances disclosed by the evidence.

[51] Turning now to the evidence pointing to a slowdown in work, I accept the evidence of the applicant that:

(a) on 5 October 2011 Mr Quinlan told him that the respondent was running out of work and he was to be let go. When he asked Mr Quinlan if he was being made redundant, he did not answer;

(b) Mr Quinlan asked the applicant on 4 October 2011 to delay his return to work after a period of annual leave, because things ‘were a bit slow’;

(c) he made repeated unsuccessful attempts to contact the office to clarify his dismissal;

(d) he had never received a letter of termination to indicate the reasons for his dismissal;

(e) he did not know that the respondent had performance concerns until the time of the conciliation before an FWA conciliator on 7 November 2011 - over a month after his dismissal (see s 387(b) of the Act).

[52] Mr Lewington gave uncontested evidence that when he and two others were dismissed in October 2011 around the same time as the applicant, Mr Quinlan had told him that he had to be let go due to a lack of work. Earlier in September, Mr Quinlan had told him to extend his annual leave because work was slow and no new contracts had been won. Mr Quinlan did not contradict this evidence.

[53] Of course, the fact that the respondent was losing money on its existing projects, may well be linked to the overall financial stress it was under and the need for it to take steps, including making employees redundant, in order to address its situation. In addition, I do not accept that the appointment of Mr Edwards to the applicant’s role demonstrated that the applicant’s position was not redundant. The evidence disclosed that Mr Edwards was an existing employee who was very much on trial in the position. There was no evidence that he was actually promoted or that his salary was commensurate with that of the applicant.

[54] That said, I would make the following general observation. When making decisions about employees to be made redundant, an employer would not ordinarily select the ‘high flyers’ or exceptionally performing employees. To do so would be contrary to common sense. Given the respondent’s views of the applicant’s lack of commitment to the Company and some of the minor performance issues described earlier, it would seem to have been a sensible business decision to select him for redundancy. I hasten to add that that does not absolve the respondent from adopting and applying the correct procedures when doing so. This was plainly not the case here and the applicant quite correctly complained of a most unfair process up to, and including his dismissal. The process was seriously flawed and manifestly unfair.

[55] In summary, I find that the applicant’s dismissal was ‘harsh, unreasonable and unjust’ both substantively and procedurally, within the meaning of s 387 of the Act.

Remedy to be ordered

[56] The provisions of the Act governing remedies following a finding of unfair dismissal by FWA are set out at ss 390 - 393 as follows:

390 When FWA may order remedy for unfair dismissal

(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) FWA may make the order only if the person has made an application under section 394.

(3) FWA must not order the payment of compensation to the person unless:

(a) FWA is satisfied that reinstatement of the person is inappropriate; and

(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

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.

Note: subsection 395(5) indexed to $59,050 from 1 July 2011

(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.

393 Monetary orders may be in instalments

To avoid doubt, an order by FWA under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order

[57] In considering the above provisions, I note that the applicant does not seek reinstatement and given the circumstances surrounding his dismissal, I conclude that reinstatement or reemployment is not appropriate in this case (see Holcim (Australia) Pty Ltd v Serafini [2011] FWAFB 7794.

[58] Then in considering each of the criteria in s 392 of the Act, I determine that the effect of the order I propose to make will have a minimal impact on the viability of the respondent’s enterprise (2(a)). The applicant had 12 years overall service with the respondent; the last 2 and a half years in his last position (2(b)) (noting he was paid redundancy in 2008). Given my earlier findings, I do not think the applicant would have remained in employment on a long term basis (2(c)). I accept the applicant has attempted to mitigate his loss and had obtained some casual employment (s 2(d)). As a result, I have taken ss 2 (e) and (f) into account in determining the amount of compensation to be ordered.

[59] I consider that the amount of compensation payable to the applicant for his unfair dismissal should be 15 weeks pay (excluding superannuation contributions: see s 332(2)(c)). This amount reflects the amount the applicant would have otherwise received if the terms of the National Employment Standards (NES) of redundancy pay (7 weeks) and notice entitlements (4 weeks) were paid to him at the time of his dismissal to which I have added a further 4 weeks pay for the unfairness of the serious procedural faults I have identified earlier in this decision. These are other matters which are relevant under ss (g) of s 392(2) of the Act. I am not satisfied that the applicant’s misdemeanours constituted misconduct, so no deduction is made in this respect under s 392(3). There is no component for shock, distress, humiliation or other analogous hurt (s 392(4)). Obviously, 15 weeks pay is less than the compensation cap identified in s 392(5). No further deductions are warranted.

[60] I am well satisfied that an amount of 15 weeks pay (gross) is appropriate in all of the circumstances of this case. Moreover it reflects the statutory instruction in s 381(2) of the Act ‘to ensure a fair go all round is accorded to both the employer and employee concerned’. An order to that effect will accompany the publication of this decision. As I have no evidence as to the remuneration the applicant received at the time of his dismissal, I shall leave it to the parties to calculate the amount totalling 15 weeks pay, less appropriate taxation. Any dispute about the final amount may be referred back to FWA for final determination.

DEPUTY PRESIDENT

Appearances:

Applicant in person

Mr and Mrs Jones , Directors, for the respondent

Hearing details:

2012
SYDNEY
7 March

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