Mr John Mather v AHG Services (Qld) Pty Ltd
[2020] FWC 5805
•16 NOVEMBER 2020
| [2020] FWC 5805 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr John Mather
v
AHG Services (QLD) Pty Ltd
(U2020/1461)
DEPUTY PRESIDENT ASBURY | BRISBANE, 16 NOVEMBER 2020 |
Application for an unfair dismissal remedy.
Background
[1] This Decision concerns an application by Mr John Mather (the Applicant) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of his dismissal by AHG Services (QLD) Pty Ltd (the Respondent). The application was made on 11 February 2020. On 2 November 2020 I issued an Order requiring compensation to be paid to Mr Mather on the basis that I found that he had been unfairly dismissed. These are my reasons for that decision.
[2] The background to the matter can be summarised as follows. The Respondent is in the business of selling vehicles and is part of the Automotive Holdings Group and AP Eagers Group. The Respondent has around 111 dealerships located across Australia and New Zealand and over 12,000 employees. The Applicant was 69 years old at the time he was dismissed and had been employed by the Respondent from early 2004 until 31 January 2020. The Applicant was originally employed as a Driver/Detailer initially, and at the time of his dismissal was employed as a Salesperson, working out of a branch located in Burleigh Heads, Queensland.
[3] The Applicant was dismissed for serious and wilful misconduct after he delivered a Fuso Bus to a customer in circumstances where the Respondent had not received payment or a remittance advice for an amount of $120,000 that was owing on the vehicle. The Respondent maintained that this was a breach of Company procedure and of a direct management instruction not to release the vehicle to the customer until a remittance advice was received. The Respondent also maintained that it had lost trust and confidence in the Applicant.
[4] The Applicant contended that his dismissal was unfair on the basis that he had not engaged in serious and wilful misconduct but had decided to deliver the vehicle out of concern that the customer was threatening to cancel the order and in circumstances where the remittance advice had been received 30 – 50 minutes after the vehicle was delivered. The Applicant also contended that the Company policies are ambiguous and not consistently complied with. Further, the Applicant contended that other employees who had engaged in misconduct of a more serious nature had not been dismissed and that consideration was not given to his long and unblemished service when the decision to dismiss him was made. The Applicant also pointed to the harshness of his dismissal in the context of his personal circumstances including his age and his wife’s health issues.
[5] The matter was not resolved at conciliation and was allocated to me for determination. The matter was allocated to me for determination and I issued Directions for filing of material and listed the matter for a Hearing. I determined to conduct a hearing after considering the views of the parties, on the basis that there were disputed issues of fact which required resolution.
[6] Mr Nathan Kershler of Affinity Lawyers sought permission to represent the Applicant. I granted permission for the Applicant to be legally represented on the basis that I was satisfied that the matter raised issues of some complexity and that it would be more efficient if the Applicant was permitted to be represented. I also had regard for the fact that the Respondent is a large employer with dedicated human resource management expertise and was represented by its Human Resources Manager Ms Jacinda Davies.
[7] Section 396 of the Act requires that four specified matters must be decided before the merits of the application may be considered. The Respondent did not raise any jurisdictional objection to the application. I find that:
(a) the application was made within the period required by s.394(2);
(b) the Applicant was a person protected from unfair dismissal;
(c) the Respondent was not a “small business employer” as defined in s.23 of the FW Act; and
(d) the dismissal was not a case of genuine redundancy.
[8] The Applicant gave evidence on his own behalf. 1 Evidence for the Applicant was also given by Mr David Boxsell, formerly employed by the Respondent as a salesperson.2 Evidence for the Respondent was given by Mr Aaron Camilleri, Branch Manager3 and Mr Michael Bridge, Fuso Group Sales Manager.4 I considered all the evidence and submissions and summarise below that which is relevant to my conclusions that the Applicant was unfairly dismissed and that he should have a remedy for his unfair dismissal.
EVIDENCE
[9] The Applicant states, and it is not disputed, that for over 16 years he dedicated himself wholeheartedly to the Respondent and gave a significant portion of his life to it and that he had an excellent record of employment and was at no time the subject of verbal or written warning.
[10] The Applicant also states he took on additional roles and responsibilities for the Respondent, including, obtaining HVRAS accreditation and being the main or only contact person with the Department of Transport and Main Roads and that he was not compensated for those duties despite it detracting from his ability to make sales and earn commission. Further, the Applicant stated that as an example of his commitment to the Respondent, he had in in excess of 1,000 hours of accrued sick leave.
[11] The events that led to the Applicant’s dismissal were described by the Applicant as follows. At a time in January 2020, the Applicant had sold a Fuso Bus valued at $142,600.00 to a long-term customer. The Applicant stated that the customer had purchased vehicles valued at over $7,000,000.00 during the time the Applicant had been employed as a salesperson. At approximately 7:30am on 22 January 2020 (the day the vehicle was delivered) the Applicant received an internal email advising that the customer’s vehicle had been received by the Branch overnight. At approximately 7:45am on 22 January 2020, the Applicant telephoned the customer to inform him that the Vehicle had arrived at the Branch and that there was some work to be done on the vehicle prior to delivery. According to the Applicant the customer angrily said words to the effect of:
“… just get the vehicle to me immediately as I need to fit a towbar and signage prior to renting it out in the next few days. I will cancel the order and go elsewhere if the vehicle is not at my premises immediately …”
[12] The Applicant said that the long-term customer was angry because the vehicle was meant to be delivered to his premises days earlier on 20 January 2020, and there had been a delay on the part of the Respondent or its suppliers. At approximately 7:55am on 22 January 2020, the Applicant telephoned Michael Bridge to notify him of the above conversation and Mr Bridge said words to the effect of “…hold delivery until payment is received …”. The Applicant said that at approximately 8:25am on 22 January 2020, he sent Mr Bridge an email in the following terms:
“… Hi Michael,
LTD were always on DPP for deliveries, This had been the case all the time I had been looking after them, they paid their deposit when vehicle was delivered and bank would send though payment within a couple of days. When I phoned Glenn this morning , he was obviously not happy and said he required delivery today otherwise would cancel. I had asked for the remittances to come thought ASAP. There has never been a problem with their payments. The Tax Invoice was only amended and sent to them yesterday. I know there are rules in place and we have to stick by them, but there has never been anything said in regards this long standing customer.
Regards, John …”
[13] At approximately 8:35am on 22 January 2020, Mr Bridge telephoned the Applicant and said that remittance advices are required prior to delivery. The Applicant said that the instructions from Mr Bridge are inconsistent or not in strict compliance with the Policy which provides as follows:
“… EFT – Electronic Transfers may be accepted only when it is confirmed without our bankers that payment has been received into the Dealership’s bank account. A print from a personal computer or other printed confirmation is not acceptable …”
[14] At approximately 9:31am on 22 January 2020, the Applicant sent a further email to Mr Bridge stating as follows:
“… HI Michael,
This arrangement was made by previous dealer Principles of the business and if that is being changed we need to inform the customer so he can decide if he wants to continue business with us. I know we have bent over backwards for this company in regards a lot of things, but we can’t change with rules without letting them know.
Thanks Regards John …”
[15] At approximately 11:04am on 22 January 2020, the Applicant sent an email to the customer (copying Mr Bridge) stating:
“… HI Glenn,
As per our phone conversation this morning , Company policy has changed. Can you please get David from BOQ to forward remittance confirmation also your deposit confirmation as soon as possible. It is being detailed at present and will be ready for delivery after lunch. I need to receive the require remittances so I can deliver.
Thanks Regards …”
[16] At approximately 11:43am on 22 January 2020, the customer sent an email in reply stating:
“… John, as discussed, please deliver a.s.a.p By the time you get here everything will be done Ta Glenn …”
[17] The Applicant replied to this email at 12:00pm on 22 January 2020 stating:
“… HI Glenn,
I understand but unfortunately I don’t make the rules. Regards,
John …”
[18] Mr Bridge responded to this email stating:
“… John
You need to rethink your approach & if you are acting it the best interest of DT Gold Coast with this kind of response …”
[19] At approximately 1:30pm on 22 January 2020, the Applicant telephoned Mr Bridge who told him to take the vehicle to the customer’s premises. The Applicant said that Mr Bridge did not tell him what to do if there was a change in circumstances nor, despite being the Manager, did he put in place alternative arrangements if he was unable to be contacted.
[20] The Applicant arrived at the customer’s premises at approximately 2:00pm on 22 January 2020, and received confirmation of an EFT payment for the deposit of $22,600.00. The customer said that the balance was being processed by the Bank of Queensland. At approximately 2:30pm the Applicant asked the customer to call its banker, a person the Applicant had known of for many years. The customer put the call on speaker and the banker confirmed that the balance payment of $120,000.00 was being processed at the Brisbane office and remittance advice would be provided that afternoon.
[21] The Applicant states that shortly after this he tried to contact Mr Bridge, who was unavailable. The Applicant also states that the customer “elevated his threats and anger” stating that he was going to cancel the order and that he needed to get work done on the vehicle immediately. The Applicant felt under extreme pressure and knew that the customer had started approaching and buying vehicles from other businesses and believed that the Respondent was at serious risk of losing a long-term customer and valuable client.
[22] The Applicant said that in this respect, in late 2019, the customer bought a vehicle from a competitor and had also obtained a quote from the same competitor in respect of the sale the subject of these proceedings. Further adding to the pressure, the Respondent had arranged for the Applicant’s colleague Mr Riley to collect him from the customer’s premises and Mr Riley was on overtime and had advised the Applicant that he had personal commitments that he needed to attend to that afternoon. At approximately 3:40pm customer told the Applicant that if the remittance advice did not come through he could come back the next morning and get the vehicle. The Applicant decided to provide the vehicle to the customer in light of:
• the customer’s statement that he could get the vehicle back;
• the extreme pressure the Applicant was under;
• the fact that the customer had always paid over the last 15 or more years, having purchased more than 100 vehicles;
• the customer’s time pressure to carry out further works to the vehicle prior to renting it out;
• the serious risk of losing the customer to other businesses given its recent purchases from a competitor;
• inability to get in contact with Mr Bridge;
• the representation by the Bank of Queensland to the effect that the money would be paid; and
• Mr Bridge’s email earlier that day where he said “… You need to rethink your approach & if you are acting it the best interest of DT Gold Coast with this kind of response ….”.
[23] At approximately 3:46pm Mr Bridge telephoned the Applicant who told Mr Bridge he had left the vehicle with the customer because the customer was getting incredibly angry and the customer’s banker had confirmed that payment was being processed with remittance advice to be provided that afternoon. The Applicant said that Mr Bridge responded stating that he should not have left the vehicle. The Applicant also said that Mr Bridge did not tell the Applicant or instruct him to turn around and return to the customer’s premises to wait for the remittance advice and nor did he instruct the Applicant to collect the vehicle. Not long after, at approximately 4:20pm, the Applicant received an email from the Bank of Queensland attaching the remittance advice which he forwarded to Accounts and Mr Bridge a short time later.
[24] At approximately 5:15pm, on 22 January 2020, Mr Bridge sent the Applicant an email requesting that the Applicant meet with him at 11:30am the following day. The Applicant was not invited to have a support person. On 23 January 2020, the Applicant was issued with a Show Cause letter setting out the following matters and inviting the Applicant to provide a written response as to why his employment should not be terminated as a result of the conduct described:
Matter 1
• It has been substantiated that your provided keys to [customer] for their bus without receiving payment or remittance advice from the customer for the $120,000 payment which was still owing on the vehicle.
• This is a direct and serious breach of the Company procedure; Vehicle Payment Policy.
• The Company considers your actions to be a wilful and serious breach of a Company procedure which had which had the real potential to damage the Company’s financial viability if payment was not received and the customer had possession of the vehicle.
Matter 2
• It has been substantiated that you phoned me on 22/01/2020 at 7.15 am & 1.30 pm to request permission to deliver the vehicle to the customer without payment, I informed you that you were not to deliver the vehicle without receiving remittance advice from the customer prior to handing the keys over at 3.15 pm which we had not received the remittance or payment for at that time.
• Specifically you have failed to follow a direct management instruction from me to obtain a remittance advice prior to delivering the vehicle.
• The Company considers your actions to be a wilful and deliberate breach of a direct management instruction which had the real potential to seriously damage the Company’s financial viability if payment was not received and the customer had possession of the vehicle.
[25] The Applicant provided a written response to the Show Cause letter, generally according with his evidence to the Commission. In that response the Applicant said that he felt overwhelmed with stress and pressure to get his colleague back to the office and to deliver the vehicle by close of business that day. The Applicant’s response also included the following statement:
“In my position as salesperson with the Company since 2006, I have witnessed many varied situations in how and when receipt of payment for a vehicle has been received and accepted by the Company. On this occasion, for the delivery of the Vehicle to the Customer I was never in any doubt the full payment of the Vehicle would be received by close of business on 22 January 2020. As a result of being unable to make contact with Michael Bridge for updated direction and the Customer’s earlier threat to cancel the purchase, given the Customer’s strong purchasing history with the Company over the last 16 years, and a verified bank representative confirming payment was currently being processed, I made a decision which I felt was in the best interest of the Company to leave the vehicle with the Customer with the understanding the final remittance would be received by the Company within the hour.”
[26] The Applicant went on to state that he spoke to Mr Bridge at 3.46 pm and Mr Bridge did not instruct him to turn around and go back to collect the vehicle which the Applicant would have done. The Applicant also pointed out the that remittance advice was received at 4.20 pm and forwarded to Mr Bridge at 5.04 pm. The Applicant concluded his response by referring to his unblemished career and his commitment to the Company evidenced by the fact that he had 1000 hours of accrued and untaken sick leave and also stated:
“I sincerely hope that the Company can reflect on my obedience, dedication and commitment over the 16 years of employment and why on this one occasion I left the vehicle with the Customer before the final payment was received. It was never my intention to blatantly disobey an order from direct management or not adhere to any policy and procedure. My genuine concern was that the customer would terminate the purchase and cease purchasing from the Company in the future.”
[27] On 31 January 2020, Mr Bridge met with the Applicant and gave him a letter advising that his employment was terminated with immediate effect, due to serious misconduct. The termination letter stated that the remittance advice was received after the bus was delivered and after the time the customer had verbally advised that it would be received and that the $120,000 payment was not received until the following day – 23 January 2020 at 11.50 am. The letter went on to state that the Applicant had committed serious and wilful misconduct by failing to comply with a direct management instruction not to release the vehicle without receiving a remittance advice prior to delivering the vehicle and despite being refused permission to deliver the vehicle without receiving a remittance advice during telephone conversations with Mr Bridge at 7.15 am and 1.30 pm.
[28] It was also stated that the Applicant had engaged in conduct that was in conflict with the Company’s best interest and in breach of the Code of Conduct and that the Applicant had not acted with honesty and integrity. The Applicant was paid his accrued entitlements and, as “a gesture of good will”, five weeks wages. The Applicant was also permitted to use the Company vehicle for a further week to give him time to make alternative arrangements.
[29] The Applicant asserted that there was confusion in the workplace in relation to the policy he was said to have breached. In this regard, the Applicant said that in the years he worked for the Respondent, there were in excess of 10 changes to management or ownership of the Respondent, each with considerably different approaches to the operation of the business and relationships with customers. The Applicant also said that the turnover of management led to many different interpretations of policies and procedures and confusion in the workplace and that he did not receive proper training in relation to these. The Applicant tendered what he described as the latest version of the Policy dated February 2018. 5
[30] Examples of what were said to be confusing and ambiguous parts of the Policy referred to by the Applicant were as follows:
“… AHG has a general policy that a vehicle will not be released to a customer until payment in full in cleared funds has been received by the Dealership … However, in a practical sense this is not always possible, and in the interests of sale and customer relations some leeway must be given in some instances strictly as detailed below …
… EFT – Electronic Transfers may be accepted only when it is confirmed without our bankers that payment has been received into the Dealership’s bank account. A print from a personal computer or other printed confirmation is not acceptable. Confirmation received direct from a recognized financial institution that payment has been effected to our bank account is acceptable as proof of payment being made …”.
[31] The Applicant said that the Respondent’s requirements were “all over the place”, including in respect of the long-term customer in question, and Mr Bridge’s instructions. The Applicant also said that in recent times, the Branch he worked out of was operating on a regular basis without an onsite manager and, as a result, employees were left to make decisions and make calls “on the run” when managers were uncontactable.
[32] The Applicant gave evidence in relation to what were described as mixed arrangements involving customers. He said that between 2004 to 2020, many of the Respondent’s long-term customers purchased vehicles with the intention of ‘on selling’ them. Payment to the Respondent would only occur once the vehicle was “on sold” and it was commonplace for the customer to have the vehicle for weeks or months before the Respondent received payment.
[33] On some occasions when a customer selected Company Finance, the Respondent would allow the customer to take the vehicle without the receipt of payment. In respect of the long-term customer in question, the Applicant said that his belief was that for around 15 years it was on a “Delayed Payment Plan” also known as “DPP” which meant that so long as it paid a deposit, it could take delivery of the vehicle and pay the balance a short time later. In around 2017 to 2018, a further relaxation occurred in respect of the long-term customer whereby it could take delivery of vehicles and was not required to pay for them under the loan arrangement for around 3 months.
[34] Accordingly, there was general accommodation made for the long-term customer to suit the circumstances. The Applicant also said that the customer had purchased around $7,000,000.00 worth of vehicles from the Respondent during his tenure, and that to the best of his knowledge it was not mandated for the customer to produce full payment or a payment remittance advice at or prior to delivery.
[35] The Applicant contended that his dismissal was unfair because:
• He did not engage in serious misconduct, but made a decision in difficult circumstances that was not wilful or deliberate nor for personal gain, nor a refusal to carry out instructions, but was made in a high pressure environment for the genuine interests of the Respondent and its relationship with a long-term customer;
• Ultimately, the Respondent received a remittance advice around 30 - 50 minutes after delivery and shortly thereafter received payment in full;
• There is vagueness and ambiguity in both the company policy and the instructions given by Michael Bridge. There is also significant inconsistency between the company policy and Michael Bridge’s instructions;
• He was never given training or proper training on the company policy; and
• Contextually, his decision was made in circumstances where there was a history of a laissez-faire attitude towards the policies by the Respondent and even Mr Bridge’s own instructions were confusing and not consistent with or strictly in compliance with the policy.
[36] The Applicant also said that there was no real risk of financial detriment to the Respondent as a result of his actions. In this regard, the Applicant said that the customer had a very good reputation and was of good standing having not failed to pay during its 15 or more year relationship with the Respondent and the purchase of over 100 vehicles during that time. The Applicant also said that if there was such a serious risk, Mr Bridge ought to have instructed him to return to the long-term customer’s premises to wait for the remittance advice or to collect the vehicle. Further the Applicant pointed to the terms of invoices issued to customers by the Respondent which state that title to the vehicle described in the invoice does not pass to the purchaser until payment in full in cleared funds are received by the dealership.
[37] In addition, the Applicant said that the representations made to him by the Bank of Queensland rendered it highly unlikely that the payment would not be made because it would likely to lead fraudulent misrepresentation on its part. Finally, the Applicant said that as a last resort, if payment was not made, the Respondent could have commenced proceedings against the long-term customer and the Bank of Queensland for the monies owed. Accordingly, not only was there no risk to the viability of the Respondent, but there was essentially no risk of not being paid. Importantly, the Respondent suffered no loss and was paid in full only minutes after the vehicle was provided to the long-term customer.
[38] The Applicant said that a discussion should have been held with him about the lack of clarity and that at best, he should have been given a warning and opportunity and/or retraining and/or a discussion to set out clear guidelines moving forward. The Applicant contended that ultimately, Mr Bridge just wanted to get rid of him because he saw the Applicant as a future liability as he was getting older, had over 1000 hours of sick leave, and was close to retirement age.
[39] The Applicant also contended that his punishment was disproportionate to the conduct and gave evidence about other matters or circumstances where the Respondent was said to have dealt differently with employees who had also engaged in misconduct. One such incident was said to involve a Service Manager taking his motorcycle into the reception of the Brisbane Branch following a customer event, and placing the front wheel up against the reception desk while performing a “burn out” with the back wheel. The Applicant said that Queensland Fire and Emergency Services was dispatched to the scene as smoke alarms were activated. The Applicant said he was unaware if the Service Manager even received a written warning and the Service Manager has since remained an employee of the Respondent.
[40] Mr Boxsell gave evidence in support of this allegation and said that it occurred at an event referred to as “Big Boys Toys” to which customers were invited to bring their “toys”. While he did not witness the events, he was informed about them and saw a black burn mark on the carpet in front of the reception desk after the event. Mr Boxsell said he also heard a number of employees, including Mr Bridge, laughing about the incident.
[41] The Applicant also gave evidence that in around December 2018, Mr Bridge and a Dealer Principal had, in effect, used Company money at adult entertainment venues in Brisbane and in this respect there was mutual agreement between Mr Bridge and the Dealer Principal to put the charges on Mr Bridge’s personal credit card as the Dealer Principal could approve those expenses without further scrutiny. In response to records of the expenditure produced by Mr Bridge, and his evidence, the Applicant said that on or about 14 December 2018, the Respondent held a dinner function for some of its employees in Brisbane. The dinner concluded at around 11.00 pm and some attendees went to an adult entertainment venue. The Applicant said that he did not attend the adult entertainment venue and went back to the hotel. The Applicant also named two other employees who did not attend the adult entertainment venue. The Applicant and those employees are listed on Mr Bridge’s expense claim as attendees which the Applicant states is false.
[42] The Applicant also gave evidence about the harshness of his dismissal. In this regard, the Applicant said that his wife suffers from a number of permanent health issues. The Applicant and his wife had planned that he would work for at least the next 2 years, which would have meant that his wife could spend less time at work or even resign to focus on her health. As a result of his dismissal and the difficulty for him finding work – particularly during a pandemic – the Applicant’s wife will be required to keep working for the next few years. This upsets the Applicant and is unfair on his wife and family.
[43] Further, the Applicant has lost the benefit of his sick leave of in excess of 1000 hours. In his initial statement the Applicant said that he was earning up to approximately $130,000.00 gross per annum with the Respondent (including commissions, car allowance and fuel allowance but not including other entitlements). In his initial submissions and evidence the Applicant said that his gross salary in the last 6 months of employment was approximately $53,211.78 plus superannuation of $3,876.04, calculated as follows:
• $28,869.19 salary;
• $18,731.31 commission ($18,021.22 + 700.00);
• $13,790.00 in respect of motor vehicle (new Mercedes Benz Dual Cab worth approximately $60,000.00 – approximately 40,000km per annum total, around 20,000.00km of which were for personal use – accordingly 20,000 x $1.182 calculated by reference to RACV calculation document = $13,790.00); and
• $700.00 company phone used also for personal use (approximately $90 per month/12 months x 7 months).
[44] The Applicant said that using these amounts his salary was calculated as $62,080.41/7 months x 6 months = $53,211.78 Superannuation ($28,869.19 plus $18,731.31) x 9.5%/7 months x 6 months = $3,876.04. This calculation results in a gross salary of approximately $1,744.64 per week and superannuation of $127.08 per week (using 30.5 weeks between 1 July 2019 and 31 January 2020). After being provided with payslips, in final submissions the Applicant sought compensation in the amount of $45,360.64 plus superannuation contributions of $3,304.08
[45] With respect to mitigation, the Applicant said that finding work has been difficult because of his age and since his dismissal, the Applicant has only been able to earn around $1,000.00 gross from a small transport job despite actively looking for and applying for work elsewhere. It cost the Applicant around $500.00 to obtain that $1,000.00. The Applicant was hopeful of picking up more part time work in the interim but that has been a task made more difficult by the effect of COVID-19 and an injury to his shoulder a couple of months ago, requiring the Applicant to have surgery. It will take approximately three months for the Applicant to get full strength back into his shoulder.
[46] The Applicant has been communicating with contacts and has obtained a driver authorisation to enable him to drive vehicles for different companies in the near future, such as a bus rental company taking school children to sport when the effects of COVID-19 diminish.
[47] Under cross-examination, the Applicant said that for the previous 11 or 12 years prior to Mr Bridge becoming sales manager for Fuso there had been a range of practices in the workplace and agreed that Mr Bridge had been making changes. 6 The Applicant also said that the customer had been on DPP arrangement and there had never been an issue with payment previously in the 13 or 14 years the Applicant had dealt with the customer. The practice had been the customer would pay the deposit with the balance being paid after the vehicle was delivered, usually within a few days.7 On the occasion which led to the Applicant’s dismissal the vehicle was due to be delivered to the customer on 20 January and had been hired out for Chinese New Year on 22 or 23 January with the customer wanting the vehicle in sufficient time to fit a tow bar and to put his signage on the vehicle. The Applicant accepted that in the past he had been late delivering vehicles and the customer had not cancelled the orders and instead had taken the vehicles on later dates.8
[48] In response to the proposition that if he was unable to contact Mr Bridge or had wanted to escalate matters, he could have contacted Mr Camilleri, the Applicant said that Mr Camilleri had been with the Respondent for 12 – 18 months and was not across Fuso. The Applicant also said that he did attempt to contact Mr Camilleri and that Mr Camilleri returned his call at the same time as Mr Bridge was also calling and the Applicant opted to speak to Mr Bridge. The Applicant agreed that Mr Bridge told him to take the bus to the customer’s premises and get the remittances from him when you get there and to wait there until he got the remittances. The Applicant also agreed that the customer had previously purchase a vehicle from a competitor because the Respondent could not match a trade in price and not because of delivery issues. The Applicant maintained that he received the remittance for the deposit on the vehicle on arrival at the customer’s premises and had verbal confirmation from a representative of the Bank of Queensland that the Respondent would have the remittance advice for the balance by close of business on that day. 9
[49] The Applicant said that he left the vehicle at the customer’s premises because he had to attend a sales meeting in Brisbane the next day and would not have been able to get the bus back to the customer in time for the customer to fit a tow bar. The Applicant also said that he knew that the customer would not touch the vehicle and would not fit the tow bar prior to the remittance being received because the customer had said that the Applicant could come and take the vehicle if the remittance was not received and would have spent $1500 on a tow bar. Further, the Applicant said that he had arranged a driver to pick him up from the customer’s premises and the driver told him that he had to be back at the Respondent’s premises by 4.00 pm and had arranged a private appointment. The Applicant agreed that he did not make alternative arrangements but maintained that every salesperson was tied up at the meeting the next day and his driver had another job to attend to.
[50] The Applicant accepted that in his response to the show cause letter he had stated that the customer wanted the vehicle because he had rented it out on 24 January, and said that he was confused with dates and that the vehicle had to go out on 23 January for a two week rental which would have returned an amount of approximately $2000.00 to the customer. In response to the proposition that there was a risk to the Respondent’s business as a result of the bus being left with the customer, the Applicant said that the risk was minimal because of his relationship with the customer, the longstanding practice of leaving vehicles with the customer before final payment was received, the fact that title to the vehicle would not transfer before the final payment was made and that the was insured by virtue of the customer having a cover note on the vehicle.
[51] In response to a question as to where he was when Mr Bridge called him and stated that the bus should not have been left with the customer, the Applicant said that Mr Bridge did not ask where he was and did not instruct him to return to take the vehicle. In response to a question from me as to whether Mr Bridge told the Applicant that the customer was no longer on a DPP arrangement, the Applicant first said that Mr Bridge had not told him this but had simply instructed him to get a remittance and that Mr Bridge had not responded in writing to the Applicant’s assertion that the customer was on a DPP arrangement. The Applicant later said that he could not recall whether Mr Bridge told him this during one of their discussions on 22 January 2020.
[52] Mr Camilleri’s evidence was that he commenced employment with AHG in February 2018 and is the Branch Manager. Mr Camilleri said that the Applicant was an experienced Salesperson with a long period of service with the company. The role of salesperson in heavy vehicle is hands on in nature and can extend to non-core activity. The Applicant had previously assisted with liaising with Department of Main Roads and other bodies as part of his role, however this is now centrally administered by the Company’s new vehicle build team in Brisbane and the Applicant has not been required to assist with Department of Main Roads for the past 3 years.
[53] Mr Camilleri said that the Applicant could be aggressive with younger male employees at times but he did not believe that the Applicant had any warnings or other issues. Prior to the incident which led to the Applicant’s dismissal, Mr Camilleri is not aware of the Applicant disregarding any Company policy.
[54] In relation to the events of 22 January 2020, Mr Camilleri said that the Applicant was advised by Mr Bridge not to deliver the vehicle which had been ordered by a customer. The vehicle was late arriving at the dealership because of shipping and build delays. The vehicle required a pre-delivery and basic fit-up when it was received at the dealership. Mr Camilleri said that he understood that the Applicant was concerned about the customer becoming upset due to the delivery of their vehicle being delayed and because the customer wanted to fit a tow bar to the vehicle before commissioning it on 23 January. Mr Camilleri said that that arrangements could have been made with the customer for AHG to fit the tow bar while waiting for payment to be received.
[55] Mr Camilleri also said that the Applicant acknowledged that he understood the company policy and the risk of delivering a vehicle to a customer prior to payment being received and also said that the Respondent did not receive cleared funds for the vehicle until 23 January 2020. Mr Camilleri does not believe that the Applicant would have been subjected to any disciplinary outcomes by refusing to release the vehicle to the customer.
[56] Further, Mr Camilleri said that the Applicant was an experienced Salesperson and would have known that in vehicle sales, refusal to release a vehicle until payment is received is one of the most common objections a customer will make and that he would be surprised if the Applicant did not understand how to manage customers’ frustrations where refusal to release a vehicle occurs due to his experience in vehicle sales. According to Mr Camilleri it is the role of a salesperson to complete a transaction by managing client expectations which includes communicating timeframe deviations. Occasionally sales will fall through, it is part of the job. If a customer cancels their order the vehicle is included back into the dealership floor plan and attempts are made to re-sell to another customer. The Applicant would not have lost his commission if the sale fell through unless the customer cancelled their order.
[57] Mr Camilleri also gave evidence about payment arrangements. He said that vehicles are released without settlement being received where they are under different payment arrangements known as DPP. DPP arrangements are only allowed where prior purchasing history and financial screening checks are completed. The customer involved in the events that led to the Applicant’s dismissal was not approved for DPP arrangements.
[58] Mr Camilleri maintained that staff are not permitted to release vehicles without payment unless specific arrangements are in place as there is a risk payment will be delayed or will not occur. The Respondent has obligations to their OE and finance partners to ensure the correct management of the Respondent’s floor plan. If vehicles are released without receiving payment the Respondent would get a reputation for having loose financial practices which would be detrimental to its dealer agreements and put its dealer licence at risk.
[59] Mr Camilleri is not aware of any instances where customers who select company finance are allowed to take possession of a vehicle prior to funds being received. Mr Camilleri was also not aware of any customers being permitted to on sell vehicles prior to the Respondent business receiving payment.
[60] Under cross-examination Mr Camilleri agreed that it is possible that in the last 5 years customers who select company finance were allowed to take possession of a vehicle prior to funds being received 10 and that customers were permitted to on-sell vehicles prior to the Respondent receiving payments.11 In relation to the particular transaction, Mr Bridge agreed that: the vehicle would have had a cover note12; the only risk would have been if the customer took the vehicle and did not give it back13; and that ownership of the vehicle does not pass until the money for the vehicle has been paid14. Mr Camilleri also agreed that the customer was a long-term customer with extensive dealings with the Respondent and had not been required to repossess a vehicle before.15
[61] Mr Bridge gave evidence about the events of 22 January 2020. Mr Bridge said that at 7.15am the Applicant called him to request to release the vehicle without payment. Mr Bridge said that he said no to this request. At 8.15am Mr the Applicant called Mr Camilleri requesting approval to release the vehicle and was again refused and told not to release the vehicle until payment had been made. Mr Bridge referred to his email exchange with the Applicant and said that in response to the Applicant’s first email sent at 8.25am, he telephoned the Applicant and told him that the particular customer was not on a DPP. In response to the Applicant’s second email sent at 8.32 am Mr Bridge telephoned the Applicant to reiterate he was not approved to release the vehicle to the customer without payment. Mr Bridge said that during the call he advised the Applicant that there is no point putting himself or Mr Bridge at risk by releasing the vehicle without payment.
[62] At 11.04am the Applicant included Mr Bridge on an email to the customer requesting a copy of the remittance. At 11.43am on 22nd January 2020 the customer sent an email requesting the Applicant deliver the vehicle and the Applicant responded by email stating to the customer: “I don’t make the rules”. Mr Bridge said that he responded to the Applicant advising him to rethink his approach because the Applicant’s response to the customer was inappropriate.
[63] At 1.30pm the Applicant called Mr Bridge again asking that the vehicle be released to the customer. Mr Bridge said that he told the Applicant he could release the vehicle if there was a remittance evidencing payment. At 3.10pm Mr Bridge missed a call from the Applicant and sent him a text message advising that he was in a meeting. At 3.45pm Mr Bridge called the Applicant who advised he had delivered the vehicle to the customer, had waited for a remittance for 1.5 hours but had left without receiving a remittance. The remittance for the payment was not received by the Applicant until 4.24 pm and forwarded to the Respondent’s accounts team at 4.33pm and payment was not received until 23 January 2020.
[64] Mr Bridge said that releasing a vehicle without payment is widely known as the first and most important rule when selling vehicles. The Respondent only releases vehicles without payment being received where customers are on an approved fleet list or DPP as outlined in the Vehicle Payment Policy. The instances where customers are able to take delivery of their vehicle prior to payment or remittance being received is when there are agreements in place which specifically outline this, or where our business manager responsible for credit checks confirms all documentation is ensuring internal finance is approved and will be paid. The customer with which the Applicant was dealing on 22 January was not on a DPP.
[65] Mr Bridge also said that he told the Applicant that it was okay if the customer wanted to cancel their order. If the customer had cancelled their order, the vehicle would have become floor stock available for sale. The Applicant would not have been held accountable if the customer had cancelled the order.
[66] Further, Mr Bridge said that the initial delivery of the vehicle to the dealership was delayed due to Fuso experiencing a shortage of vehicles which was completely out of the control of the dealership. The Applicant was made aware of this delay and was requested to discuss this with the customer. Further delay was caused by the customer’s financier, the Bank of Queensland, making an amendment to the invoice on 20 January 2020 and when invoices are amended by the financier, it generally holds up the settlement payment. The Applicant was advised of the potential delay in settlement. Mr Bridge said it is not clear whether the Applicant communicated the potential delay to the customer, and he did not believe that the Applicant adequately managed the expectations of the customer.
[67] Mr Bridge also said that the Applicant is an experienced vehicle salesperson and he considers the Applicant to have a good awareness of processes and policies. The Applicant had previously been provided with the Vehicle Payment Policy and had previously acted in accordance with that policy. There was a previous occasion where the Applicant requested to release a vehicle without payment being received and he followed Mr Bridges direction not do so on that earlier occasion. On the day in question, Mr Bridge advised the Applicant on a number of occasions not to release the vehicle prior to either payment being cleared as received, or a remittance being provided. By delivering the vehicle to the customer, the Applicant did not follow that direction or the Company policy by delivering the vehicle to the customer.
[68] Further, Mr Bridge said there would have been no repercussions for the Applicant where vehicle delivery did not occur, as he was following Mr Bridge’s directions and the Company policy. The customer concerned had previously advised that if the Respondent did not deliver a vehicle when they wanted it, they would not purchase from the Company again and notwithstanding this had continued to purchase from the Respondent even where delivery was delayed. Mr Bridge does not believe the sale to the customer would have been lost if the Applicant had followed the direction and policy to not deliver the vehicle without remittance.
[69] Mr Bridge also said that the relevant customer was a small one with only approximately 2.75 sales per year made to them. It would not have significantly affected the profitability of the Respondent’s business if the customer discontinued purchasing from the Respondent. While the customer typically purchases Fuso vehicles from the Respondent, they have recently purchased from a different dealership which created a lack of trust in the business to business relationship.
[70] According to Mr Bridge, the risk to the business of delivering a vehicle prior to delivery is not just the cost of the vehicle, but the associated costs and risks in trying to recoup the money. The reputation of the dealership is damaged because of views from suppliers about inadequate floor plan maintenance, relaxed financial practices and the disregard for policies in the workplace.
[71] Mr Bridge also said that there had been some issues with the Applicant’s attitude towards others prior to his termination, but they did not relate to the reasons for his termination. In this regard, Mr Bridge said that the Applicant had a tendency to work with an attitude that he knew better than others, which would sometimes mean he did not follow tasks such as completing paperwork properly.
[72] When those issues would occur, Mr Bridge would discuss them with the Applicant and he would clarify his understanding of the correct way to do things. Mr Bridge agreed that the Applicant did perform additional tasks from time to time such as registering vehicles, but maintained that those tasks are associated with the sale of a vehicle and that the Applicant’s salary compensated for those tasks.
[73] Under cross-examination, Mr Bridge agreed that an employee had done a burnout on a motorcycle in the reception of the dealership, that it was dangerous and that the fire brigade had attended 16. Mr Bridge also agreed that he had attended an adult entertainment venue on 14 December 2018, following a Company Christmas dinner. Mr Bridge agreed that he paid for naked dances as part of a package and that he obtained reimbursement of $1,812.71 to his personal bank account from the company for that package which included naked dances.17 When asked whether the event was sanctioned by the Company, Mr Bridge said that his expenses were approved18.
[74] Mr Bridge agreed that the customer involved in the incident which led to the Applicant’s dismissal had bought vehicles over many years, but was uncertain as to whether the value of those vehicles was $7,000,000.00. 19 Mr Bridge also agreed to a number of propositions about financial arrangements with customers including that:
• long-term customers did purchase vehicles from the Respondent and the Respondent would only receive payment after they on sold them 20;
• some customers would have vehicles for weeks or months before the Respondent received payment 21;
• on some occasions the Respondent would allow the customer to take a vehicle without receipt of payment 22;
• he could not confirm whether the customer involved in the events that led to the Applicant’s dismissal was ever on a DPP 23; and
• on occasion the customer was allowed to take delivery of vehicles and was not required to pay for them for 3 months 24.
[75] Mr Bridge agreed that there is a difference between a remittance advice and actual payment and said the former is simply advice that that an amount has been paid. Mr Bridge also agreed that where the policy states “Confirmation received direct from a recognised financial institution that payment has been effected to our bank account is acceptable as proof of payment being made.” does not refer to a remittance and nor does it say the confirmation has to be in writing 25. Further, Mr Bridge agreed that the Bank of Queensland is a “recognised financial institution” as described in the policy and that he had not contacted the bank employee nominated by the Applicant to verify what the Applicant told him26 and nor did Mr Bridge contact the customer27.
[76] Mr Bridge accepted that he did not tell the Applicant to go back immediately and pick up the vehicle 28. Mr Bridge also accepted that there was no loss suffered29 and that the Respondent’s invoices state that “… Title to the vehicle described herein will not pass to the purchaser until payment in full in clear funds are received by the selling dealership …”30 and that he had never heard of a bank giving finance without a cover note.31 Mr Bridge agreed that that he did not give the Applicant a second chance or warning or ask him to undertake not to repeat the conduct which led to his dismissal.32 Mr Bridge further agreed that he did not take into account the Applicant’s wife’s health conditions when terminating the Applicant from his employment.33 Mr Bridge also agreed with the Applicant’s evidence in relation to his salary package.
LEGISLATIVE PROVISIONS CONCERNING UNFAIR DISMISSAL
[77] The Commission must consider the criteria in s.387 of the Act in deciding whether a dismissal was unfair on the grounds that it was harsh, unjust or unreasonable, which are:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
[78] The employer bears the onus of establishing that there was a valid reason for a dismissal.34 A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”35 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts,36 and 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.37
[79] In determining whether there was a valid reason for a dismissal relating to conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred, on the basis of the evidence before the Commission. The test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct. Further, to constitute a valid reason for dismissal, the Commission must assess whether the conduct was of sufficient gravity or seriousness to justify dismissal as a sound, defensible or well-founded response. 38 The Commission is not limited to the reason relied on by the employer in finding that there was a valid reason for dismissal,.39
[80] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:
Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;
Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or
Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.40
[81] I turn now to consider these factors in the present case.
CONSIDERATION
387(a) - was there 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)?
[82] As previously noted, the reason for the Applicant’s dismissal as set out in his termination letter, was that he committed serious and wilful misconduct by delivering a bus and providing keys to a customer, without receiving remittance advice or payment for the vehicle in the amount of $120,000 which was still owing and that he did this in contravention of a direct instruction from his manager. The reasons for the termination of the Applicant’s employment also included that remittance advice was received after the bus had been delivered and that payment was not received until the following day.
[83] In its submissions to the Commission the Respondent contended that the Applicant’s conduct was wilful, deliberate and caused serious and imminent risk to the reputation, viability and profitability of the Respondent’s business and that it would continue to exercise its right to dismiss employees who engaged in such conduct. The Applicant’s submissions incorporate the definition of serious misconduct in the Fair Work Regulations. That definition is not relevant to s. 387(a) which is concerned with whether there is a valid reason for a dismissal.
[84] In all of the circumstances, I do not accept that the Applicant’s conduct on 22 January 2020 was such that it provided a valid reason for his dismissal and that dismissal was a sound, defensible and well-founded response to that conduct. At worst, the Applicant’s conduct on 22 January 2020 showed poor judgement. However, I do not accept that it was wilful or deliberate. I accept the Applicant’s evidence that he was stressed and did not want to lose the sale to what was a long-term customer. While the Respondent’s witnesses down-played the significance of the customer to its business, to the Applicant the customer was not insignificant and the Applicant had been dealing with the same customer for some 13 – 14 years and the customer had purchased vehicles to the value of $7,000,000.00. The Applicant’s uncontested evidence is that the customer was unusually angry and that there had been delays in the deliver of the vehicle to the dealership. While those delays were not the fault of the Respondent, they were also not the fault of the customer and impacted on the date the vehicle was available.
[85] While the Applicant may not have been subject to discipline if the sale was cancelled, he would not have achieved his commission for that sale. Further, he risked losing the customer in the future or at least damaging his long-term relationship with that customer. I also accept the Applicant’s evidence that the customer had previously been on a DPP arrangement whereby there was a longstanding practice that vehicles were delivered to the customer upon payment of a deposit and the customer paid the balance of the price of the vehicle after delivery. Further, I accept the Applicant’s uncontested evidence that the customer had never defaulted on any previous occasion.
[86] I accept the Applicant’s evidence that the risk to the Respondent of suffering loss and damage as a result of him delivering the bus to the customer on 22 January 2020 was minimal. In this regard, the Respondent’s standard form invoice indicated that title of the vehicle would not pass to the customer until the invoice was paid in full. The vehicle was at all times insured. While the Applicant had not received a written remittance for the balance of the payment, he had received a remittance for the payment of the deposit and oral confirmation from bank representative of some standing that the remittance would be sent that afternoon. That undertaking was honoured and payment was received the next day. There is no evidence that the funds would have cleared at an earlier time even if the Applicant had the remittance before he left the customer’s premises. I accept that it is improbable that the customer would have fitted the tow bar before the remittance advice was sent to the Respondent because the customer would have expended funds to fit the tow bar which might have been lost if the vehicle had been repossessed by the Respondent if for some reason, the remittance was not received that afternoon.
[87] Finally I accept the Applicant’s evidence that he was under pressure because the person who he had arranged to pick him up from the customer’s premises had commitments that afternoon and the Applicant would not have been able to return the next morning with the bus had he taken it with him that afternoon.
[88] It is also the case that the Respondent’s policy is not clear and was not always followed, or if it was followed, the customer in question had been on a different arrangement. In any event, there is no stipulation in the policy with respect to the form that a remittance should take in order to be accepted. A remittance is a notification from a bank that funds have been transferred into an account. While the Applicant did not have a remittance in writing he had an undertaking that he would receive that document from a representative of the customer’s bank – a person also known to the Applicant – before he left the vehicle with the customer.
[89] For these reasons the Applicant’s conduct did not involve a wilful or deliberate breach of the Respondent’s policy. The Applicant did not set out to breach the policy. Rather, he made a poor choice by conceding to the customer’s demands and delivering the bus, in circumstances where he had not received the remittance advice in writing from the customer’s bank. It is significant that the Applicant was told to take the bus to the customer’s premises by Mr Bridge when Mr Bridge knew from his earlier exchanges with the Applicant that the customer was being difficult and demanding delivery and that the Applicant was already in a difficult position. It is probable that the customer would have been angrier if the Applicant had removed the truck after having brought it to the customer’s premises than would have been the case if delivery was simply postponed until 23 January 2020.
[90] The evidence of Mr Camilleri and Mr Bridge about the seriousness of the Applicant’s conduct, is also contradicted by their own conduct. Mr Bridge authorised the vehicle to be taken to the customer’s premises in circumstances where the customer had not paid a deposit. In this regard, the Applicant’s uncontested evidence is that he was given the remittance advice for the deposit when he arrived at the customer’s premises on 22 January 2020. It is also the case that upon being informed that the Applicant had left the bus at the customer’s premises, Mr Bridge did not instruct him to return and take the vehicle back. Mr Bridge did not even inquire of the Applicant whether this was possible and how far away he was from the customer’s premises at the relevant time.
[91] If there was a significant risk to the Respondent arising from the Applicant’s conduct, such that it justified summary dismissal of an employee of 16 years who had an otherwise unblemished record, it would be expected that Mr Bridge or Mr Camilleri would have instructed the Applicant to return to the customer’s premises and remove the bus or made arrangements for this to occur. At very least, if the risk was so significant it would be expected that Mr Bridge or Mr Camilleri would have contacted the customer to ascertain the security of the bus and that the customer would not undertake any work on it and/or contacted the banking representative to verify that the remittance would be received that afternoon. Mr Bridge and Mr Camilleri did not take any of these steps and their inaction in this regard belies their evidence about the seriousness of the Applicant’s conduct.
[92] I also note that both Mr Bridge and Mr Camilleri raised as an issue the fact that the payment was not received for the vehicle until 23 January, in circumstances where even if the Applicant had waited at the customer’s premises until the remittance advice was received, it is probable that the payment would not have cleared into the Respondent’s bank account until the next day, in any event. Finally, while the Respondent’s witnesses state in their evidence to the Commission that the Respondent could have fitted the tow bar before the vehicle was delivered and while waiting for the remittance from the customer, there is no evidence that Mr Bridge or Mr Camilleri engaged with the Applicant sufficiently to suggest this. It is also the case that the customer wanted to fit signage to the vehicle which could probably only have been done by the customer. Whether Chinese New Year started on 24 or 25 January, I accept that the customer wanted the vehicle on 22 January and was angry with the delays that had been already incurred.
[93] As previously stated, the Applicant’s conduct showed poor judgment and he deserved to be censured as a result. I also note that the Applicant sent what is an inappropriate email to the customer stating that he did not make the rules, when what he should have done was manage the customer’s expectations in light of the views that were being expressed by his manager Mr Bridge. However, the Applicant’s conduct was not such that summary dismissal or dismissal at all, was a valid, sound and defensible response, in all of the circumstances including: the Applicant’s long and unblemished service; the standing of the customer including the fact that the same arrangements had been followed for some 13 – 14 years by the Applicant without incident; the mitigating factors such as the invoice terms and the verbal confirmation from the customer’s banker that the remittance would be processed that afternoon; the fact that the vehicle was insured and that the customer accepted that it would be removed in payment was not made.
[94] Notwithstanding that it was an isolated event in an impeccable 16-year career, the Applicant was terminated from his employment without a second chance nor did the Respondent ask the Applicant to undertake not to engage in the alleged conduct again. Further, the termination letter described the conduct of the Applicant in terms which are unsustainable on the evidence and included the unjust assertion that the Applicant had not acted with honesty and integrity. The consequences for the economic position of the Applicant and his family also rendered the dismissal unfair. Notably, the Respondent did not take into account the Applicant’s wife’s health conditions when terminating the Applicant from his employment.
387(b) - was the person notified of that reason?
[95] Notwithstanding my finding that there was no valid reason for the Applicant’s dismissal, I am satisfied and find that the Applicant was notified of the reason.
387(c) - whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[96] Although a detailed show cause letter was provided to the Applicant and he provided an equally detailed response, there is no evidence that the Applicant’s response was properly considered by the Respondent. In this regard, neither Mr Bridge nor Mr Camilleri checked with the Bank of Queensland representative nominated by the Applicant or with the customer to verify the Applicant’s statements. Further, there is no evidence of any consideration of the fact that the Applicant expressed remorse in his response to the show cause letter and that he had not intended to blatantly disregard an order.
[97] The failure to have regard to the Applicant’s response is evidenced by the repetition of the allegations in the termination letter handed to the Applicant on 31 January 2020 with no reference to consideration of his responses being evident.
387 (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
[98] I do not accept the Applicant’s submission that he was denied the opportunity to have a support person at the meeting on 31 January 2020. The Applicant did not request a support person and there was no refusal, unreasonable or otherwise, for the Applicant to have a support person. Accordingly, this factor is not relevant.
387(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[99] The dismissal related to misconduct rather than unsatisfactory performance and this factor is not relevant for the purposes of this factor.
387(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
[100] The Respondent is a very large employer and would be expected to have carried out proper procedures in effecting the Applicant’s dismissal. This factor is not a basis for mitigating any unfairness associated with the Applicant’s dismissal.
387(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
[101] The Respondent has a dedicated human resources department. As such it would be expected that the Applicant’s conduct on 22 January 2020 was properly considered and dealt with appropriately. This was not the case and this factor is not a basis for mitigating any unfairness associated with the Applicant’s dismissal.
387(h) any other matters that the FWC considers relevant
[102] I do not entirely accept the Applicant’s submissions about the alleged differential treatment by the Respondent between its employees. It is well established that an argument with respect to differential treatment must be approached on the basis of comparing apples with apples. The conduct of an employee who did a burnout on his motorcycle in the Respondent’s reception area had a real possibility of causing significant injury to persons present or damage to the premises, with a resulting risk of reputational and financial loss and damage for the Respondent. It is arguable that this conduct, like that of the Applicant, displayed poor judgment on the part of the employee concerned. It is also the case that there was a real risk of serious injury or significant damage if the stunt went wrong. This is a case of differential treatment and is relevant to the question of whether the dismissal is unfair.
[103] The same cannot be said about attendance of Mr Camilleri and Mr Bridge at an adult entertainment venue in company with other employees of the Respondent following a dinner. It is clear from the evidence that the event was sanctioned by the dealer principle and I do not accept that Mr Bridge engaged in any misconduct. In particular, Mr Bridge’s expenses were approved by the Respondent and I do not accept the submission on behalf of the Applicant that the conduct of Mr Bridge and Mr Camilleri had real potential to cause risk to the reputation and financial viability of the Respondent. In my view, the adult entertainment venue incident was an irrelevant distraction and did not assist the Applicant’s case. While the evidence of Mr Bridge and Mr Camilleri about the matter was guarded and inconsistent with the facts evidenced by the receipt, I am satisfied that this was due to their obvious embarrassment rather than any attempt to mislead the Commission. In circumstances where the entire matter was not relevant to the matters in dispute, I draw no adverse inference against either Mr Camilleri or Mr Bridge on the basis of this issue.
[104] Other matters I consider relevant to the question of whether the Applicant’s dismissal was unfair are as follows. The Applicant is 69 years of age and as such dismissal would have a significant impact upon him. The Applicant contends, and I accept that he is unlikely to be gainfully employed elsewhere for the remainder of his working life. The Applicant had accrued in excess of 1000 hours of unused personal leave. While the Respondent was not required to pay out personal leave on termination, the Applicant lost the benefit of that accrued sick leave at a time in his working life where he would have been more likely to have used it. The Applicant will not have an opportunity to accrue further personal leave given his age and the likelihood that he will not obtain employment of the kind which will entitle him to personal leave. It is also the case that the Applicant’s wife suffers from health issues and this exacerbated the harshness of the dismissal. While Mr Camilleri and Mr Bridge may not have known that the Applicant’s wife suffered from health issues, a more fulsome discussion with the Applicant about the decision to dismiss him may have resulted in the Applicant sharing this information.
[105] Finally, I consider that insufficient weight was placed on the Applicant’s long and unblemished work history. The Applicant was summarily dismissed notwithstanding that he received an ex gratia payment of five weeks in lieu of notice. The dismissal was effected by Mr Bridge handing the Applicant a letter which simply repeated allegations made in the earlier show cause letter and failed to engage with the responses the Applicant provided. In circumstances where the Applicant’s conduct was not sufficiently serious to warrant summary dismissal, the manner of the dismissal added to its harshness.
Conclusion in relation to whether the Applicant was unfairly dismissed
[106] In all of the circumstances I am satisfied and find that the Applicant was unfairly dismissed. The Applicant’s dismissal was harsh because of its impact on his personal and economic circumstances. The dismissal was also harsh because of the Applicant’s long and unblemished employment history which should have outweighed his conduct given that it was not conduct for which dismissal was a sound, defensible and well-founded response. In short, dismissal was a disproportionate response to the Applicant’s conduct in all of the circumstances.
[107] The Applicant dismissal was unjust because he was not guilty of misconduct as asserted by the Respondent. For reasons set out in this Decision, the Applicant’s conduct was not wilful and he did not deliberately set out to flout the Respondent’s policy. There is no evidence that the conduct of the Applicant caused any risk to the Respondent’s business, much less a serious and imminent risk to the reputation, viability and profitability of the Respondent’s business. The Applicant’s dismissal was also unreasonable because it was decided on inferences that could not reasonably have been drawn from the material before the employer including the Applicant’s detailed response, his otherwise unblemished history and his statements to the effect that he had not intended to breach the Respondent’s policies. The Applicant deserved a second chance in those circumstances and should have been given such a chance.
REMEDY
[108] The Applicant sought compensation as a remedy for his dismissal. The Applicant did not seek to be reinstated. The Respondent objected to reinstatement on the grounds that his dismissal was for alleged serious misconduct and submitted it has been faced with the difficult decision to reduce its workforce by approximately 1,200 employees during the COVID-19 pandemic, impeding its ability to accommodate any finding that the Applicant should be reinstated.
[109] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. The remedy of compensation is designed to compensate an unfairly dismissed employee in lieu of reinstatement, for losses reasonably attributable to the unfair dismissal, within the bounds of the statutory cap on compensation that is to be applied. 41
[110] Having regard to all the circumstances of the case, including the reasons for the Applicant’s dismissal and his response, I consider that reinstatement is not appropriate. Further, having regard to the fact that the Applicant has been unfairly dismissed and has suffered financial loss as a result, I considered that an order for payment of compensation to him was appropriate. Accordingly, I assessed the amount of compensation that should be ordered to be paid to the Applicant having regard to the circumstances of the case including the matters in s. 392(2) as follows:
“(2) In determining an amount for the purposes of an order under subsection (1), the FWC 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 the FWC considers relevant.”
[111] A Full Bench of the Commission in Sprigg v Paul Licensed Festival Supermarket 42 set out the established approach to the assessment of compensation, and that approach has been consistently applied in the context of the current legislative provisions by Full Benches of the Commission in a number of cases.43 The approach to calculating compensation in accordance with these authorities is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 5: Apply the legislative cap on compensation.
[112] In relation to each of the matters I was required to consider in deciding the amount of compensation to be awarded to the Applicant for his unfair dismissal, I reached the following conclusions.
The effect of the order on the viability of the Respondent – s.392(2)(a)
[113] The Respondent is a large business with holdings across Australia. While the Respondent has made submissions to the effect it has been required to reduce its workforce, and that it is reliant on the JobKeeper scheme to subsidize wages, the Respondent has not submitted that any order of compensation would impact on the viability of the Respondent’s business. Furthermore, the Respondent did not call any evidence about the effect of the COVID-19 Pandemic or the general economic environment, but rather made unsubstantiated assertions in its final submissions.
[114] I was not satisfied that the order I propose to make will have an effect on the viability of the Respondent.
Length of the Applicant’s service – s.392(2)(b)
[115] The Applicant had been employed by the Respondent sixteen years. This is a considerable period of time and is acknowledged by the Respondent as such. In addition to the Applicant having a relatively lengthy period of service his employment history is unblemished.
Remuneration the Applicant would have or would likely have received – s.392(2)(c)
[116] There is an element of speculation in determining an employee’s anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 44
[117] The Applicant’s evidence was that he intended to continue to work for the Respondent for another two years. Had the Applicant been given a warning and a second chance to maintain his employment, there is no evidence to suggest that he would not have made full use of this opportunity and done all he could to maintain his employment for the two year period that he had planned. This is particularly so given the Applicant’s age and his wife’s health issues and the fact that he had over 1000 hours of accrued personal leave. However, there is also a degree of probability that the Applicant would not have been employed for the full two years given his age, his own health and the effects of the COVID-19 Pandemic on the Respondent’s workforce.
[118] I am satisfied on the balance of probabilities that if the Applicant had not been dismissed on 31 January 2020, he would have remained employed by the Respondent for at least a further twelve months. The Applicant had no record of any issues relating to his performance or capacity. The Applicant had worked for 16 years for the Respondent and for the reasons set out above would have little incentive to leave the Respondent prior to the two years he had planned.
[119] The Applicant’s evidence about his earnings during the period of his employment was uncontested and no evidence to the contrary was called from any witness for the Respondent. In its final submissions which were made after an evidentiary hearing, raised some marginal issues about matter such as the inclusion of an amount for private use of a telephone and a vehicle supplied by the Respondent to the Applicant and that the Applicant’s commission varied and was not guaranteed. However, this was not sufficient to counter the Applicant’s evidence of his earnings and I generally accept that evidence subject to the following matter.
[120] The Respondent submitted (also without placing any supporting evidence before the Commission) that due to the effects of the COVID-19 Pandemic, the majority of the Respondent’s employees are entering (or have entered) into mutual agreements to reduce their hours of work by 20%. The Respondent submitted that the Applicant’s income in the role of salesperson would likely have reduced to $830.76 (before tax) per week as at 16 March 2020 under an agreement to reduce hours of work by 20%. It was conceded in final submissions that no evidence had been placed before the Commission on this point and that the submission did not indicate which staff were on JobKeeper and whether there had been an impact on all staff or on salespersons to a greater or lesser degree than other staff. Notwithstanding the lack of evidence on this point, I accept that it is more probable than not that the COVID-19 Pandemic would have impacted on the Applicant’s earnings in the manner contended by the Respondent and this is a matter to which I have had regard, doing the best that I can given the lack of evidence from the Respondent.
[121] For the purposes of the required calculation pursuant to s. 392(2)(c) I am satisfied and find that had the Applicant remained in employment for a period of one year, he would have earned a reduced amount of $830.76 for a period of 6 months from 16 March. At the time his employment was terminated the Applicant’s earnings for the 26 week period prior to this dismissal, were $45,360.64. The Applicant contended that this figure comprised amounts to which he was entitled and the Respondent placed no evidence to the contrary before me. That amount equates to a weekly rate of $1,744.64.
[122] Accordingly for the six week period from 31 January 2020 (when the Applicant was dismissed) until 16 March 2020 (when the Applicant would have been in receipt of JobKeeper payments) the Applicant would have earned the amount of $10,467,84. For the 26 week period from 16 March 2020 to 14 September 2020, the Applicant would have earned the amount of $21,599.76. Thereafter, for the period 20 week period from 14 September 2020 to 31 January 2021 the Applicant would have earned the amount of $34,892.80. The projected earnings total $66,960.40.
[123] Applying step 2 in the Sprigg formula, this amount exceeds the statutory cap in s. 392(5) and applying the cap results in the amount of $45,360.64.
[124] There was some evidence that the Applicant had sustained an injury to his arm which required surgery, which had prevented him from working for part of the period covered by the award of compensation I have determined. I have made no deduction for this amount as had the Applicant remained in employment he would have been entitled to use his accrued personal leave which well exceeded the amount of time he required to recover from the surgery. Further, while the injury may prevent the Applicant from pursuing alternative employment as a bus driver it would probably not have prevented him from working as a vehicle salesperson particularly during the COVID-19 Pandemic and the resulting down turn.
[125] Given the period over which I have assessed compensation already factors in contingency I make no other deduction for this.
The Applicant’s efforts to mitigate loss – s.392(2)(d)
[126] The Applicant’s evidence and submission was that he had attempted to obtain other employment but had been unable to do so. I am satisfied that in circumstances where the Applicant was 69 years of age and lost his employment in circumstances where his honesty and integrity were unjustly called into question, he has made reasonable attempts to mitigate the loss of his employment. That these attempts have been hindered by an injury the Applicant sustained, is not a basis to reduce his compensation on.
The amount of any remuneration earned since dismissal – s.392(2)(e)
[127] The Applicant earned an amount of $500.00 net (having regard for the fact that it cost the Applicant $500.00 to earn that amount) following the termination of his employment. The Applicant was also paid an amount of five weeks notice in lieu of the termination of his employment which appears on his pay slip as an amount of $5,192.30 which represents five weeks at his base hourly rate of $27.3276. Accordingly I deduct these amounts from his projected earnings leaving a total of $61,268.10.
The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)
[128] In all of the circumstances including the Applicant’s age, the manner in which he was dismissed, the effect of the COVID-19 Pandemic and the period of time over which I have assessed compensation, I do not think it reasonable to make a deduction for income likely to be earned between the making of the order for compensation and the actual compensation.
Any other matter that the FWC considers relevant – s.392(2)(g)
[129] I consider it relevant to the calculation of compensation, that shortly after the Applicant was dismissed and at the point at which the COVID-19 Pandemic took effect, the Respondent significantly downsized its employee numbers. If the Applicant had not been unfairly dismissed, he would have been employed at that time and but for his unfair dismissal may have been made redundant thereby entitling him to a redundancy payment. Based on the Applicant’s period of service, he would have been entitled to a redundancy payment comprising five weeks in lieu of notice and a further 12 weeks’ severance payment. These amounts would have been taxed in a manner that was advantageous to the Applicant. The unfair dismissal of the Applicant may have deprived him of ending his career on this basis.
[130] Even if the Applicant obtains other employment, he has lost the benefit of personal leave credits accrued during his 16 years of employment in circumstances where there was no valid reason for his dismissal.
Misconduct – s.392(3)
[131] While the Applicant did not engage in conduct for which dismissal would be a sound, well-founded and defensible response, I am satisfied that the Applicant did engage in misconduct which contributed to the situation he found himself in on 22 January 2020. The Applicant was told not to leave the vehicle without having received a remittance advice from the bank and notwithstanding that he had reasons mitigating his non-compliance, he did disregard that instruction. I have decided that it is appropriate to reduce the Applicant’s compensation to reflect this misconduct by an amount of 20%. I have applied the reduction to the amount of compensation after the cap is applied on the basis that to apply the reduction before the application of the cap would have no practical effect in reducing the compensation amount.
Shock, distress or humiliation, or other analogous hurt – s.392(4))
[132] In accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation cap – s.392(5)-(6)
[133] Applying the compensation cap in s. 392(5) results in amount of $45,360.64. That amount is less than half the amount of the high income threshold immediately before the dismissal. It is the total amount of remuneration to which the Applicant was entitled in his employment with the Respondent during the 26 weeks immediately before his dismissal. Applying the reduction of 20% which I have determined in accordance with s. 392(3) results in an amount of $36,288.51.
Instalments – s.393
[134] No application has been made to date by the Respondent for any amount of compensation awarded to be paid in the form of instalments.
Conclusion on compensation
[135] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, my view is that there is no basis for me to reassess the assumptions made in reaching the amount of $36,288.51. 45
[136] For the reasons I have given, I concluded that a remedy of compensation in the sum of $36,288.51 (less taxation as required by law) in favour of the Applicant was appropriate in the circumstances of this case. I also determined that superannuation contributions in the amount of $3,304.08 should be paid to the Applicant’s nominated superannuation fund. An Order requiring that the Respondent pay compensation to the Applicant in those amounts was issued on 2 November 2020 46.
DEPUTY PRESIDENT
Appearances:
Mr N Kershler of Affinity Lawyers on behalf of the Applicant.
Ms J Davies for the Respondent.
Hearing details:
1 July, 2 July & 10 August.
2020.
By Microsoft Teams.
Printed by authority of the Commonwealth Government Printer
<PR724104>
1 Witness Statement of John Thomas Mather – Exhibit A4.
2 Witness Statement of David Anthony Boxsall – Exhibit A3.
3 Witness Statement of Aaron Camilleri – Exhibit R1.
4 Witness Statement of Michael Bridge – Exhibit R2.
5 Exhibit A4 Annexure “JTM-2”.
6 Transcript PN137 – 138.
7 Transcript PN139, 144.
8 Transcript PN151-152.
9 Transcript PN189, 240.
10 Transcript PN388-391.
11 Transcript PN392-394.
12 Transcript PN407-411.
13 Transcript PN412.
14 Transcript PN413-415.
15 Transcript PN417-419.
16 Transcript PN505-518.
17 Transcript PN530-534, PN565-566.
18 Transcript PN597.
19 Transcript PN615-617.
20 Transcript PN618-619.
21 Transcript PN620.
22 Transcript PN621.
23 Transcript PN623
24 Transcript PN624-627.
25 Transcript PN710.
26 Transcript PN730.
27 Transcript PN725-726, PN730.
28 Transcript PN747.
29 Transcript PN750.
30 Transcript PN752.
31 Transcript PN797.
32 Transcript PN758.
33 Transcript PN769.
34 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204
35 Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
36 Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C
37 Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J
38 Bista v Glad Group Pty Ltd [2016] FWC 3009
39 Heran Building Group Pty Ltd v Anneveldt [2013] FWCFB 4744 at [15] per Acton, SDP, Sams DP and Hampton C citing MM Cables (a Division of Metal Manufacturers Ltd v Zammit AIRC (FB) S8106 17 July 2000
40 Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ
41 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]
42 (1998) 88 IR 21
43 Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431
44 Double N Equipment Hire Pty Ltd v Humphries[2016] FWCFB 7206 at [16]-[17]
45 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]
46 PR724157.
0
13
0