Mr Jihad Elsouki v Iconis Unit Trust T/A Sunny Top Bakery Ciabatta Della Nonna

[2014] FWC 3070

[2014] FWC 3070

FAIR WORK COMMISSION

DECISION

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

Mr Jihad Elsouki
v
Iconis Unit Trust T/A Sunny Top Bakery Ciabatta Della Nonna
(U2013/15590)

COMMISSIONER ROE MELBOURNE, 9 MAY 2014

Termination of employment.

[1] The matter arises from an application filed on 6 November 2013 under Section 394 of the Fair Work Act 2009 (Cth) (the Act) by Mr Jihad Elsouki (the Applicant) for relief in respect to the termination of his employment from Iconis Unit Trust T/A Sunny Top Bakery Ciabatta Della Nonna (the Respondent).

[2] The Respondent submits that it had 16 employees including the Applicant at the time of the termination. I am satisfied that the Respondent is not a small business.

[3] The Applicant says that he was employed from January 2004 until 21 October 2013. The parties agreed, and I am satisfied that, the Applicant was dismissed at the initiative of the employer on 21 October 2013.

Jurisdictional Objection – not an employee.

[4] The Applicant gave evidence that he worked 7 nights per week. The Respondent made a submission that the Applicant was not an employee. I am satisfied that the Applicant worked for the Respondent, the work performed was controlled by the Respondent and directed by the Respondent, and the Applicant and was paid an hourly rate for that work. The Applicant was paid for four hours each day however he says that he often worked extra hours, generally between one and four hours each shift. The Applicant and Mr Iaconis, Director of the Respondent, agree that the Applicant was not paid for extra hours worked. However, Mr Iaconis said that if the Applicant finished his work early he could go home early. The Applicant gave evidence that:

● He had very little time off during the entire period of his employment. On the few occasions when he did not work he was not paid for that day.
● He was paid $80 for each day and $560 per week except for one week when he was paid $900.
● He worked on most public holidays.
● He provided the Respondent with his tax file number when he started work.
● He did not receive pay slips.
● He did not have to be told what to do each day as he knew what the regular duties he was expected to attend to were. There were other matters about which he received instructions from time to time.
● He was rung up and advised when he was required to come into work earlier or work later because of work requirements.

[5] The Respondent submitted that the Applicant was not an employee because he was not legally permitted to work due to his visa status. The Applicant gave evidence that he was legally permitted to work. I accept the evidence of the Applicant. It is not necessary to determine the matter but I doubt that an employee loses protection from unfair dismissal because they are working in contravention of visa requirements.

[6] The evidence of Mr Iaconis, Director of the Respondent, under cross examination confirmed the main aspects of the Applicant’s evidence about the character of the employment relationship. There are some points of difference, for example in respect to the tax file number. Having regard to the nature of the work, the regularity of the work and the lack of any evidence that the Applicant was running his own business I have no hesitation in finding that the Applicant was an employee.

[7] The evidence strongly suggests that the Applicant was not paid his minimum award entitlements. The remedy for these matters lies elsewhere and this factor has not influenced my decision. However, the irregularity of the employment arrangements implemented by Mr Iaconis lead me to have some doubts about the integrity of some other aspects of his evidence.

[8] I am satisfied that the Applicant was an employee for a continuous period of between seven and nine years prior to the termination at the initiative of the employer. The Applicant was employed on a regular and systematic basis and had a reasonable expectation of ongoing employment.

Consideration of the evidence

[9] The Applicant last worked on the night of 20/21October 2013 and was dismissed on 21 October 2013 for allegedly stealing the sum of $870 or $970. The Applicant says that it was common practice for customers of the bakery to leave money in envelopes. The Respondent accepts that the Applicant was responsible for taking money from a limited number of regular customers. Mr Iaconis accepted that the Applicant would have custody of money in the period before Mr Iaconis and Mrs Sciola (nee Iaconis) started work and would then give the money to one of them. The Applicant says that on occasion he had custody of such money until the following day. The Applicant says that this was known to the Respondent and accepted by the Respondent. The Respondent denies that they were ever aware of or condoned this behaviour.

[10] Mr Matthew Nesci, a customer or sub-contractor, to the Respondent had worked each night alongside the Applicant. He gave evidence that it was likely that the Applicant received money from a number of customers and drivers. The Applicant was the sole employee of the Respondent in the dispatch and retail area of the bakery during the early hours of each morning.

[11] Late on 19 October or in the early hours of 20 October 2013 money was left on a white bench in an envelope marked “Matt$870”. Mr Nesci (Matt) says that he put the envelope containing the money on top of his black folder. The Applicant says that he put the envelope in his pocket for safekeeping. The Applicant says that he forgot that he had the envelope when he left work at the end of the day, Sunday morning. Matthew Nesci rang the Applicant a few hours later to ask if the Applicant had seen the envelope. The Applicant says that he answered no because he had forgotten about it. He went to work that night and at about 5.30am the following morning says he noticed the envelope in his pocket and immediately rang Matthew Nesci and arranged to meet him at 9am at a coffee shop so that he could return the cash. The meeting actually occurred at about 10 am and he returned the cash at that meeting. Matthew Nesci suggests that the amount involved was $970 but agrees that all the money was returned.

[12] The Respondent dismissed the Applicant summarily that day. The parties agree that there was some compensation paid in lieu of notice. The Applicant says that he was not given a proper opportunity to respond to the allegation. The Applicant says that he was permitted to hold cash money and returned the money as soon as he became aware of the fact that it was in his possession.

[13] Mrs Nadia Sciola (nee Iaconis), an employee of the Respondent says that on 21 October she viewed CCTV footage which she said showed the Applicant put the envelope in his pocket at about 12.15am on 20 October. The Applicant says that he noticed the envelope at about that time but that he did not put it in his pocket until about 3am.

[14] Matthew Nesci says that the money without the envelope was what was returned to him. The Applicant says that he never counted the money and that he returned it in the envelope.

[15] The Respondent did not show the CCTV footage to the Applicant. Despite requests by the representatives of the Applicant the Respondent did not provide the CCTV material to the Applicant. The Respondent did not include the CCTV footage in the material upon which they relied in response to the directions prior to these proceedings. During the proceedings the Respondent sought to introduce the CCTV footage. In the end the Respondent did not press this point as it was not considered central to establishing its case.

[16] At about 6am on 21 October 2013, shortly after Mrs Sciola had viewed the CCTV footage, Matthew Nesci told Mrs Sciola that the Applicant had denied taking the envelope the previous day but that he had rung at 4am that morning seeking to catch up. Matthew Nesci met with the Applicant at about 10am and telephoned Mrs Sciola to confirm that the money had been returned by the Applicant. At about 10.30am Mrs Sciola says that she rang the Applicant and requested that he come into the office for a discussion. She says that the Applicant said he was too busy. Mrs Sciola says that she then told the Applicant that he was dismissed immediately on grounds of theft which is misconduct and should not return to work. Mrs Sciola says that the Applicant then said that he was trying to teach Matthew Nesci a lesson to not leave money lying around. The Applicant says that Mrs Sciola did not give him any opportunity to explain. The Applicant says that Mrs Sciola did not ask him to go into the office. Mrs Sciola says that the Applicant was loud and aggressive during the conversation. The Applicant denies this.

[17] Mr Matthew Nesci, gave evidence that he was provided an envelope with the money by a customer at about 11.30pm on 19 October and he placed the envelope on top of his paperwork on a bench behind his work area. He went home at about 2.30am on 20 October. At approximately 4.30am he realised that the envelope was not with his paperwork and he rang his father who works for Mr Nesci, and he said that he had not picked up the envelope. An unsuccessful search was made for the envelope and Mr Nesci then rang the Applicant who also said that he had not seen the envelope. It is not in contention that Mr Nesci and the Applicant were both at work for a number of hours on the Sunday evening and early Monday morning. Mr Nesci says that the Applicant asked him if he had found the money at about 10pm when they arrived at work together. The Applicant denies this happened. After Mr Nesci had left the bakery to do his deliveries the Applicant rang him and asked to catch up for coffee. Mr Nesci was told by Mrs Sciola at about 6am that the CCTV footage showed the Applicant had taken the envelope. The Applicant and Mr Nesci met for coffee at about 10am and the Applicant returned the money. Mr Nesci says that the Applicant was upset and Mr Nesci says that the Applicant asked him to create a story so that he did not lose his job. They agreed that the story would be that he had taken the money to teach Mr Nesci a lesson for leaving the money lying around. The Applicant says that it was Mr Nesci who suggested the story.

[18] In cross examination the Applicant said that he was wearing different jeans when he went to work on Sunday from those he wore on Saturday. He also gave evidence that the envelope containing the money was in the pocket of the first pair of jeans when he came home early on Sunday and was in the second pair of jeans when he went to work on Sunday evening. I am satisfied that the Applicant was therefore aware that he had the money in the envelope when he went to work on the Sunday. Matthew Nesci was at work for several hours on the Sunday at the same time as the Applicant. The Applicant did not give the money to Matthew Nesci at that time. The Applicant says that he remembered he had the money at 5.30am and rang Matthew. However, he asked to meet Matthew and did not tell him on the phone that he had found the money.

[19] I found Mr Nesci to be direct and consistent in his evidence. I consider that Mr Iaconis understated the role of the Applicant and I prefer the evidence of Mr Nesci in this respect. I prefer the evidence of Mr Nesci to that of the Applicant on three important points. Firstly, I am satisfied that Mr Nesci and the Applicant did discuss the missing money when they were at work together at around 10 or 11 pm on the Sunday night. Secondly, I am satisfied that the money was returned to Mr Nesci without the envelope. Thirdly, I am satisfied that the idea of the explanation that the money was taken to teach Mr Nesci a lesson not to leave money around was the Applicant’s idea.

[20] Mr Nesci agreed that over many years he had left money in envelopes in the workplace. He accepted that there were many opportunities for the Applicant to take that money but to his knowledge it only happened on the occasion in question.

[21] Although she does not mention it in her witness statement Mrs Sciola says that she also asked the Applicant about the money when she arrived at work at 6am on the Monday morning before the Applicant went home. She says the Applicant said no at that time. The Applicant left shortly afterwards and she then examined the CCTV footage. The Applicant denied that Mrs Sciola raised the matter with him when she arrived at work on the Monday morning. Given that Mrs Sciola did not raise this matter in her witness statement I prefer the evidence of the Applicant to that of Mrs Sciola on this point. I also was not convinced that the evidence of Mrs Sciola concerning the telephone conversation when she dismissed the Applicant was particularly accurate.

[22] I am therefore satisfied that the Applicant:

● Was asked about the envelope at around 8.30am on Sunday morning by Mr Nesci. I accept that the Applicant had just woken from a short sleep at this point. The Applicant denied knowledge of the envelope. I doubt that the Applicant could fail to recall taking the envelope only a few hours earlier when directly questioned. Even on the Applicant’s own evidence it was not a common event for him to take and keep an envelope of money overnight.

● Was aware that he had the money when he put the money in his changed jeans to go to work on Sunday evening.

● Discussed the fact that the money was still missing with Mr Nesci when they arrived at work at about 10pm on Sunday evening.

● Failed to recall the envelope or to advise Mr Nesci about the envelope even though they worked together for some hours from 10pm Sunday evening until at least 2am Monday morning.

● Recalled that he had the envelope with the money and rang Mr Nesci at some time between 3.40am and 5.30am to arrange a meeting with Mr Nesci. Mr Nesci says it was the earlier time. The Applicant did not tell Mr Nesci at that time that he had found the money.

● Returned the money without the envelope to Mr Nesci at around 10am on Monday morning at a cafe.

[23] It is possible that the Applicant did forget that he had taken the money with him and it is possible he still failed to recall on the first occasion he was asked about it having just awoken from sleep. However, I consider it unlikely that it was an oversight that the Applicant failed to advise Mr Nesci about the fact that he had discovered the money after he put the money in his jeans to go to work on the Sunday evening. I make the same assessment concerning the failure to advise Mr Nesci that he had found the money when he saw Mr Nesci at work and when he rang Mr Nesci at some time between 3.40am and 5.30am. The Applicant’s account of the sequence of events when considered as a whole is implausible.

[24] I am satisfied that the Applicant did receive money from customers and contractors which he held in safekeeping for the Respondent. The money was then given to Mr Iaconis or other representatives of the Respondent. This usually occurred after a matter of some hours. I am satisfied that this was approved of by the Respondent. However, I am not satisfied that Mr Iaconis or other representative of the Respondent was aware that the Applicant might on occasion forget to deliver the money to the Respondent and take it home with him and return it the following day. I do not dismiss the evidence of the Applicant that this may have occurred on a previous occasion however I am not satisfied that the Respondent was aware that this had occurred or approved it. I also note that the situation involving a customer or contractor giving the Applicant money for goods or services to be passed on to the Respondent is a completely different situation to the Applicant taking an envelope clearly marked with Mr Nesci’s first name on it.

[25] I am satisfied that the Applicant was made aware of the fact that CCTV footage might be examined when Mr Nesci and the Applicant had the phone conversation at around 8.30am on the Sunday morning. It is possible that this knowledge affected his behaviour on 20 and 21 October.

Legislation

[26] The legislation provides as follows:

“s387 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.”

Was there a valid reason for termination? (S 387(a))

[27] Given that the Applicant returned the money within about 30 hours and prior to any allegation being put to the Applicant I am not satisfied that there is a proper basis for concluding that the Applicant stole the money. However, I am satisfied that the failure of the Applicant to advise the Respondent and Mr Nesci as soon as he became aware that he had the money in circumstances where he knew that there was concern about the money was misconduct. I am satisfied that given that the Applicant was the sole representative of a small business in the shop/dispatch area of the business at night it was necessary that the Respondent have trust in the Applicant. I am satisfied in this situation the misconduct of the Applicant was serious and it would be reasonable to conclude the relationship of trust and confidence between the Applicant and the Respondent was broken by that misconduct.

[28] I am satisfied that there was a valid reason for termination related to the conduct of the Applicant although that reason was not the reason given by the Respondent at the time of the termination.

Procedural matters. S387(b)-(g)

[29] The Applicant was not notified of the valid reason for termination because the valid reason I have found is not the reason given to the Applicant. The Applicant was told that the reason for the termination was because it was alleged that the CCTV footage showed that he had stolen the money. However, I am satisfied that it was reasonably clear to the Applicant that the reason for the termination was directly related to his actions in taking the envelope of money and his actions in respect to this over the subsequent 30 hours. For this reason I do not regard the failure to notify the Applicant of the valid reason to be a significant factor standing in favour of a finding that the termination was unfair.

[30] I am not satisfied that the Applicant was given any proper opportunity to respond to the allegations made. Procedural fairness was denied to the Applicant. Procedural fairness was important because the motivation or intention of the Applicant in taking the envelope was of central importance in determining whether or not there was a valid reason for termination given that the money had been returned. Mrs Sciola said that the reason for the termination was that the Applicant had stolen the money. Mr Iaconis gave evidence that this is what Mrs Sciola also told him at the time. At the time Mrs Sciola rang the Applicant she knew that the money had been returned. The only evidence she had was the CCTV footage and the information she had from Mr Nesci concerning the Applicant’s initial denial. It was not reasonable for Mrs Sciola to reach a conclusion to dismiss the Applicant summarily for stealing based on this information without putting the allegations, including the CCTV footage, to the Applicant and giving him an opportunity to respond.

[31] It is not necessary to determine whether or not the Applicant is correct when he says that Mrs Sciola did not request him to come into the office because Mrs Sciola accepts that when the Applicant said that he was busy she did not suggest or make any other arrangement. It should be noted that the conversation took place after the Applicant had completed a night shift and at a time which was not his normal working hours.

[32] I found the Applicant to be defensive and not always logical or consistent however I did not find him to be unreasonable or aggressive. Of course behaviour in the witness box is not necessarily a reliable indicator of behaviour in the workplace. I did not find the evidence of Mrs Sciola about the phone conversation entirely convincing. I accept that it may have been difficult to give the Applicant an opportunity to respond to the allegation on the phone. In fact I am not satisfied it was appropriate to finalise the matter over the phone. I am not satisfied that the Applicant was unreasonably aggressive or made it impossible for the Applicant to be given a reasonable opportunity to respond prior to a decision concerning the termination being made. It is reasonably apparent that Mrs Sciola had made the decision to terminate the Applicant at the commencement of the telephone call.

[33] There were many options open to Mrs Sciola to give the Applicant an opportunity to respond prior to making any decision to terminate the Applicant. She could have:

● Sought to negotiate a different time for the Applicant to meet with her.
● Provided the allegations in writing to the Applicant and offered to meet to hear his response.
● Directed the Applicant not to attend work until there had been a meeting to discuss the allegation.
● Provided the Applicant with an opportunity to be represented.

[34] The failure to give the Applicant an opportunity to respond stands in favour of a finding that the termination was unfair.

[35] The Applicant did not have the opportunity to have a support person. However, the Applicant did not refuse to allow a support person.

[36] The dismissal did not relate to performance. Furthermore the question of a warning is not relevant in the circumstances of this case.

[37] The size of the employer and the lack of human resource management expertise was a factor in this case. The Respondent had 16 employees. Mr Iaconis and Mrs Sciola lack human resource management expertise. Given that the alleged conduct was reasonably considered to be serious misconduct these factors do to some extent explain the procedural failings in this case. It should be noted that Mr Iaconis was overseas and Mrs Sciola had to deal with the matter and she only had these responsibilities when Mr Iaconis was not available.

Other matters. S387(h)

[38] The fact that the Applicant had been employed for between seven and nine years and that he had been in a position of trust throughout that period and that there had been no prior issues concerning his conduct or performance is a matter that should be taken into consideration in judging whether or not the termination was harsh or disproportionate.

Conclusion as to whether the termination was unfair

[39] The fact that there was a valid reason for termination and the size of the business and the lack of human resources management expertise stand against a finding that the termination was unfair. The failure to provide the Applicant with an opportunity to respond prior to the termination being decided and the length of good service of the Applicant stand in favour of a finding that the termination was unfair.

[40] The Applicant has now found alternative employment and is not seeking reinstatement. I am satisfied that the nature of the valid reason is such that the trust and confidence of the employer in the Applicant could not be recovered.

[41] If on balance I was to find that the termination was unfair then in all of the circumstances I do not consider that it would be appropriate to make an order for compensation. If the Applicant had been given a reasonable opportunity to respond and be represented, as he has been in these proceedings, then I consider on balance that termination of employment would still have been the likely and appropriate outcome.

[42] It is a fine balance and a difficult decision to determine whether or not the termination was unfair. Employees are entitled to the opportunity to respond to the allegations against them and to thereby influence the decision maker prior to a decision to terminate employment. The denial of this opportunity will often lead to the termination being unfair regardless of the strength of the valid reason. However, the facts and circumstances of this case are unusual. In the end I have decided that the termination was not unfair.

COMMISSIONER

Appearances:

Mr J Snow appeared for the Applicant.

Mr P Kounnas appeared for the Respondent.

Hearing details:

2014

Melbourne

May 8

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<Price code C, PR550435>