Mr Luke Cain v TL Engineering Pty Ltd
[2022] FWC 3239
•14 DECEMBER 2022
| [2022] FWC 3239 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Luke Cain
v
TL Engineering Pty Ltd
(U2022/4028)
| COMMISSIONER WILLIAMS | PERTH, 14 DECEMBER 2022 |
Application for an unfair dismissal remedy
This decision concerns an application for an unfair dismissal remedy made by Mr Luke Cain (the applicant) under section 394 of the Fair Work Act 2009 (the Act). The respondent is TL Engineering Pty Ltd.
At the hearing of this matter both parties were self-represented.
Mr Cain gave evidence on his own behalf. For the respondent, evidence was given by Mr Dan Oldham who is the respondent’s Managing Director and by Mr John Bulanadi who is the Leading Hand in the Paint Shop.
Evidence and factual findings
The respondent is a vehicle body building company. It specialises in customised high-quality vehicle upgrades of special commercial, industrial, fleet and recreational vehicles.
The respondent employed approximately 70 people when the applicant was dismissed.
The applicant began working for the respondent in February 2014. He was notified of his dismissal on 23 March 2022.
He had been employed in the full-time role of Team Lead Fitter and the terms of his employment were set out in a Revised Offer of Employment letter dated 6 December 2021.
At page 7 of that letter under the heading ‘Termination’, it stated that dismissal without notice shall apply in the case of serious misconduct and in all other cases his employment may be terminated by the respondent providing 4 weeks’ notice in writing if he has more than 5 years continuous service.
The applicant’s evidence is that in November or December 2021, Mr Oldham asked employees at the monthly meeting who might be interested in a four-day work week.[1]
This would mean working 38 hours over four days of 9.5 hours each day and then Friday and Saturday was available for overtime. He says approximately 50% of employees said they were interested.
Over the next month or two, there was a lot of workshop chatter about whether it was a good idea and a lot of people were concerned.
In January 2022, Mr Oldham and Mr Chris Brown, the Operations Manager met with the applicant. They wanted his opinion on the best way to explain to everyone what they were proposing. His evidence was that he suggested small groups at a time so everyone would get an opportunity to listen and ask questions.
In late January and early February 2022, these small groups were taken in and it was explained to them what a four-day week would look like. In the applicant’s group, they were told overtime won’t be affected.
Employees asked if they could leave early one day and make the hours up and were told no unless they got permission from the Mr Brown or Mr Oldham.
They were told management wants everyone behind this idea and only people who "physically were unable" would be excepted such as dads with school kids.
When Mr Brown and Mr Oldham asked the applicant his opinion on it, he said no and so did some other workers.
The applicant says that at no stage did management say they could continue their current work hours.
His evidence was that people still did not want to do a four-day work week. They also found out that the company was already advertising this on Seek and hired someone with this arrangement already.
They were told during March's company meeting that 80% of people were for the four-day work arrangement and a 3-month trial was announced to start 23 March 2022.
On 4 March 2022, a Trial Letter was handed out explaining this arrangement. This asked employees to nominate their new start and finish times for the trial. It also stated Saturday work will cease, unless under directions of Mr Oldham. His evidence was that this upset a lot of people.
Mr Cain says some people signed on to the new arrangement fearing it was inevitable. Many did not sign it as they were fearful it would trap them to the arrangement.
Other workers became upset about No Saturdays. Some had been doing more than 55 hours a week and were told that this would be cut to 48 hours a week.
This has since allegedly changed to 52.5 hours per week. However, it was not the same hours they were doing.
The applicant’s evidence was that all this chatter became overwhelming. They felt helpless. He says it did not feel like 80% were behind this.
The idea of a new survey came up. His evidence was that on Thursday, 17 March 2022 he conducted a survey of his peers asking if they were “For or Against” this idea. He says that 66% were against the idea of a four-day work week.
On 18 March 2022, he handed Mr Oldham the results. Mr Oldham asked the applicant who had surveyed the employees. The applicant told Mr Oldham that he did it. He says until that point, management had not communicated to them further about the 4-day week.
Mr Oldham called him to the boardroom with Mr Brown later that day.
Mr Oldham asked the applicant why he had surveyed the employees. The applicant said he undertook the survey because of all the workshop chatter which indicated support had dwindled. He was scared that this would be worse for the company and more staff may leave. The applicant says Mr Oldham told him that 80% of employees surveyed were for the arrangement made up of: 62% voting yes, 18% were 50/50 and 20% voting no. The applicant’s evidence was that this did not make sense to him.
Mr Oldham told the applicant that he had created uncertainty in a time where grown men were terrified of “the flu” (COVID-19). The applicant argued back that he was creating uncertainty by changing people's hours.
Mr Oldham said he wanted the weekend to think and would talk to the applicant on 21 March 2022.
At the end of the day on 21 March 2022, the applicant was called to the boardroom again. He was told Mr Oldham had planned to walk the floor on 18 March 2022 after morning tea to seek feedback about the 4-day week, until the applicant had handed him his survey.
Mr Oldham told the applicant that he was stood down on pay till 23 March 2022.
Mr Oldham gave the applicant a show cause meeting letter and said he was to return at 3.00pm 23 March 2022, to show cause why he should not be terminated. [2]
His evidence was he returned for the show cause meeting at 3.00 pm on 23 March 2022 and when asked if he had anything to say read aloud. His ‘Show cause oral meetings statement’ is as follows:
“Serious misconduct involves an employee deliberately acting in a way that is inconsistent with continuing their employment. I definitely did not intend to be reprimanded or fired over this. My intentions were to bring to the attention of management the voices of all the applicants on the floor. This was to ultimately improve the business, not to damage it. The talk of not being in favour of the 4 day week has been growing significantly in the last few weeks.
When the idea was first mentioned a lot of people were for it, me included. Due to thinking it through fully, some people started having reservations. People were scared of losing money foremost. At the small workshops, after being told that based on the same hours of work, you would be better off by getting to double time quicker, it swayed people back for it. We were told we would not lose overtime hours.
On the 4th of March, forms were handed out. On the form it states there will be no manufacturing on Saturdays, unless under the direction of the managing director. Dan has also stated that he does not want Saturday work due to insurances and other things. This has swayed the workshop significantly. Some people are doing 55 plus hours at the moment and we’ve been told this will be reduced to 48 hours. This has contradicted what we were told at the small workshops that overtime would not be affected.
We have also been advertising on seek, since before the announcement of the trial. We have already hired a worker on this who has since left the company.
The noise against this has become deafening. People felt hopeless that we are locked into this trial. A few of us discussed what options we had. The idea came up about a survey. I thought this is the most peaceful, non disruptive way to communicate our thoughts with management. Because I’m a floor worker, I thought people may be more honest.
I shouldn’t have done it during work time as I now know it distracted people from their work briefly.
People knew I was writing down their names and responses and I told several people this was not organised by management, but I would be showing them. I thanked everyone for their input and honesty, regardless of my own views. I never suggested strikes or protests, nor asked anyone to get behind me. This in my eyes would have been misconduct.
After working out that 66% were against it, I felt I definitely had to bring this to Dan’s attention promptly, for fear of losing more workers.
We’ve lost over 50% of our workers in the last 2-3 years and every time someone else walks out the door, everyone else’s job gets harder. We have to find a replacement and train them before our workloads return to normal.
I have worked in this company for 9 years all up. Due to my work standards and behaviour, I’ve managed to climb the ladder.
Not at TL, or before have I ever received any type of management training, and yet in 9 years I have never found myself in a position like this before. As far as I know my record is clean here. This reflects I generally do the right thing and wish to grow with the business, and have had the good of the company at heart.
Upon handing Dan the survey, I have been totally honest and never shied away from what I did, further cementing my true intentions.
Please don’t just consider this act of how I am remembered at TL. Thank you”
After the applicant read this statement to Mr Oldham, Mr Oldham thanked him and handed the applicant a letter explaining he had been terminated without notice.
Mr Cain’s evidence was that the 4-day week trial was allegedly postponed because of the applicant’s actions. The trial then went ahead one week later. Some requests made by workers for flexibility of their hours were only granted after the applicant was dismissed, including where they had previously been refused.
The summary dismissal letter from Mr Oldham dated 23 March 2022 reads as follows:
“Dear LUKE,
I am writing to confirm that as a direct consequence of your actions on Friday 18th March 2022, when you finalised and presented an unauthorised staff survey, the business has determined that you have engaged in a form of serious misconduct which is inconsistent with the continuation of your employment.
I note that our concerns regarding your actions were initially discussed with you on Friday 18th March. You were subsequently advised on Monday 21st March that termination of your employment was being considered, and you were provided with an opportunity to ‘show cause’ why you should not be dismissed.
I have given careful consideration to your responses but must advise these do not excuse or justify your unacceptable behaviour.
You are hereby notified that as of 23rd March 2022 you are dismissed from your position without notice or payment in lieu of notice. All applicable statutory entitlements will be released to you as part of your final pay.
Please do not hesitate to contact me should you wish to further discuss your dismissal.
Yours faithfully,”
Under cross-examination, the applicant agreed that he had a senior role in the business as a team leader.
He agreed he had been consulted by Mr Oldham about the best approach to pursuing the four-day week with the employees.
The applicant agreed he had not been asked to do the survey.
The applicant’s evidence was that he obtained other employment four weeks after the date of his dismissal.
The evidence of Mr Oldham was that the business raised the idea of a four-day work week at the December meeting in 2021 and, by show of hands, 60% indicated they would like to know more.
The applicant initially said that from the first meeting in December he was a little unsure and may not be in favour of a four-day work week.
Post the Christmas break and at the time they sat down in January 2022, the applicant had more time to consider a four-day work week and was now in support of the idea but wanted more details.
The applicant (in a senior workshop role) joined the Managing Director and Operations Manager in early January 2022 and was consulted about how best the business might approach the four-day work week concept. The applicant proposed small group workshops to detail the concept.
During January and February 2022, the business held 6 workshops for approximately 45 minutes each in the Board Room with a random selection of workshop employees and a Slide Pack on the projector to outline what the 4-day work week would look like for three different types of staff rosters.
Staff questions were answered, and it was clearly communicated that the respondent did not want to lose any employees and that exceptions would be made.
Ongoing communication to employees involved meetings in December, two in January and in February and March to keep everyone updated regarding the new arrangement.
The respondent’s notes for the March 2022 (Town hall) meeting dealing with this issue read as follows:
“4 Day Work Week
· 80% are in favour and we feel now is the time for a 3 month trial starting Wednesday 23rd March
· Workshop will be open 5am to 4.30pm Monday to Friday
· Standard rosters will be
o 05.00 to 3.00pm
o 05.30 to 3.30pm
o 06.00 to 4.00pm
o 06.30 to 4.30pm
Break times will remain the same
We have a one-page letter outlining the changes that everyone will need to read and return.
Please read and select the suitable roster for the standard 9.5-hour day 38-hour week
There is a box to tick if you would like to discuss other options. We have a list of those staff and will make time to find a solution – we don’t want to lose anyone
You will need to commit to the roster – 6am start means we will expect you at 6am
38 hours base then open to OT on Friday
If you don’t complete the 38 hours, then the Friday hours make up the base time
OT still needs Op’s Manager approval
Not open Sat unless approved
If we as a business don’t feel this is working, then we will revert back to original rosters from 1st July
oLetter out today
oReturn by Wed 9th March
oConsolidate the list and talk to anyone that needs follow up
oPrepare communication to customers around change in manufacturing hours
oGo-Live Wednesday 23rd March”
The business provided a “Roster Confirmation Letter” to all staff asking them to review and select the most suitable roster and return to Payroll so they can update the system.
Fifty-one employees (88%) returned their confirmation letters with a 4 Day Roster nominated.
Staff that wanted to stay on current roster were spoken to and it was business as usual for them.
Mr Oldham’s evidence was that Go Live was planned for 23 March 2022 as a three-month trial.
On the morning of 18 March 2022, the applicant handed Mr Oldham his staff survey with regards to a 4 Day Work Week trial asking if each employee agreed or disagreed with the changes.
Mr Oldham asked the applicant to explain who had asked for the survey to be conducted. The applicant said he took it upon himself to run a survey.
Mr Oldham said that he was not sure why he would do this given he was just about to walk the floor to check in with everyone about the trial given the respondent had planned to go live the following Wednesday 23 March 2022.
He reviewed it and it became obvious that there were conflicting results.
His evidence was that both Operations Managers came to tell him that there were a large number of staff asking questions about what was happening with the 4 Day Work Week given they had made arrangements for the next week with school drop off, partners/family movements etc.
Mr Brown and the applicant attended a meeting in the boardroom to discuss the applicant’s survey. The applicant said he thought he would take on the responsibility to run a survey during work time as he felt they had a mass resignation about to happen.
Mr Oldham explained that his actions were contradictory to Mr Oldham’s position and that many staff had become stressed, confused and anxious.
The applicant was not aware of the serious nature of his actions.
Mr Oldham explained he would need the weekend to consider the incident and to understand the impact to the business. They agreed to meet on Monday 21st March 2022.
The employee was invited to a meeting in the boardroom to attend with the Managing Director and the Operations Manager and he could bring a support person. The employee declined to bring a support person.
The employee was again asked to explain why he conducted an unauthorised survey. His response was not in line with the applicant’s position up to this point. With no new evidence or reasoning, Mr Oldham stood down the employee on full pay for 48 hours to enable the business to undertake an investigation and issued a Show Cause Letter with details pertaining to the incident.
Over the next 2 days, the Operations Managers checked in with all factory employees to settle their concerns and answer any questions. At this point they identified conflicting responses within the employees’ survey and that some staff were not present at work.
Mr Oldham met with the applicant as arranged on the 23 March 2022 for the Show Cause Meeting.
The applicant was offered and declined to bring a support person with them. He read a prepared statement. No new reasoning was given to support the incident.
Mr Oldham advised the applicant the damage to the business and its values that his actions caused were not in line with the position he holds in the business.
Consequently, the applicant was terminated for serious misconduct effective immediately.
The evidence of Mr Bulanadi was that he wanted to make clear about the implementation of the four-day work schedule that he likes the idea of the compressed working schedule and that it works best for him and for his family.
His evidence was this allowed him to have time to pick up his kids in the afternoon.
His evidence was that he was really surprised to be told that he had agreed to Mr Cain’s survey. His evidence was that he didn’t even see the survey form nor talk to Mr Cain about this. His evidence was he didn’t know how Mr Cain came up with that.
He was away from work with COVID-19 on the days the applicant undertook the survey. He notes that on the survey form he was marked as “Disagree” even though he was not at work.
Mr Bulanadi was not cross-examined and I accept his evidence.
The legislation
Section 387 of the Act sets out matters the Commission must have regard for when determining whether an employee’s dismissal was harsh unjust or unreasonable. This is set out below:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 the FWC considers relevant.”
The Commission notes the parties’ contract of employment does not define the meaning of ‘serious misconduct.’ These words however are defined in the Fair Work Regulations 2009 as follows:
“1.07 Meaning of serious misconduct
(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.
(2) For subregulation (1), conduct that is serious misconduct includes both of the following:
(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:
(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.
(3) For subregulation (1), conduct that is serious misconduct includes each of the following:
(a) the employee, in the course of the employee’s employment, engaging in:
(i) theft; or
(ii) fraud; or
(iii) assault;
(b) the employee being intoxicated at work;
(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.
(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.
(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.
Submissions
The applicant
The applicant submits that the punishment was too harsh. He was providing feedback to his employer that the trial may have negative consequences. He feels that some form of education or internal punishment would have sufficed, because he still had done a lot of good at the company and still had more to give.
In the eight years he had been employed he had never been reprimanded. He submits that he should have received notice if he was to be dismissed as his misconduct was not harsh enough for summary dismissal.
The applicant, to his credit, now recognises, as explained in his oral submissions, that he may not have done things the right way. However, he maintains his intentions were good and he does not believe that his actions warranted summary dismissal.
The respondent
The applicant undertook an unauthorised staff survey of all workshop staff with regards to a 4 Day Work Week. A 3-month trial by the company was about to commence from 23 March 2022.
As a result of his survey, the applicant has committed serious misconduct by damaging the reputation, and profitability of the business. At a time where labour is hard to find and given the significant and ongoing improvements by management to create a workplace to attract and retain talent, the applicant’s actions have undermined the businesses hard work to improve its workplace and culture.
As a senior leader, the applicant was expected to represent and lead by example at all times. Conducting a staff survey without approval has impacted a significant amount of staff and does not represent its values.
Consideration
Valid Reason
In this case, there is no doubt the applicant conducted an opinion survey of employees regarding the alternative working hours proposal the respondent had foreshadowed. He did not seek authority from the respondent’s managers to undertake this survey and as the respondent submits it was therefore unauthorised.
The context was that prior to the applicant conducting his survey, the respondent’s management had spent considerable time and effort over a period of months communicating with employees regarding an alternative working hours proposal. Prior to taking these steps, the General Manager and Operations Manager had consulted with the applicant as the Team Lead Fitter about the best approach to raise this with the staff. The applicant was fully aware of the respondent’s efforts and prior to undertaking his staff survey the applicant was aware that a trial of the alternative working hours was imminent.
I accept the evidence is that the applicants’ actions caused some confusion and consternation amongst some staff and was unsurprisingly viewed by the respondent’s management as an entirely unhelpful and disruptive intervention that interfered with the steps the respondent was taking to have a trial of the alternative hours’ proposal.
The Commission finds that Mr Cain conducting an unauthorised staff survey was misconduct.
In the circumstances the Commission is satisfied that Mr Cain’s misconduct was a valid reason for his dismissal.
Notification of the Reason
The applicant was notified in the show cause letter of the reason the employer was considering dismissing him before their final decision was made.
Opportunity to Respond
The applicant was given an opportunity to respond to the reasons the employer was considering dismissing him for, and he did so at the show cause meeting where he read out his response to their show cause letter.
Support person
The respondent did not refuse to allow the applicant to have a support person present during any discussions regarding his dismissal.
Warnings regarding performance
The applicant was not dismissed for any complaint about his performance, so this issue of warnings is not relevant in this instance.
Impact of the size of the enterprise and absence of HR specialists
The employer has 70 employees.
The employer does not have in-house HR specialists but receives HR advice from an external consultant.
Consistent with this, an appropriate procedure was adopted by the respondent in effecting the applicant’s dismissal.
Other relevant matters
The applicant had been employed for just over eight years.
The applicant had not been subject to any prior disciplinary action by the respondent.
The Commission accepts Mr Cain’s evidence that he undertook the staff survey because he was genuinely concerned there may not have been as much support amongst employees for the alternative hours proposal as the respondent believed. He felt therefore that implementing the alternative hours could be counter-productive for the business.
The Commission characterises Mr Cain’s actions as well intentioned but ill considered.
The respondent took the view that Mr Cain’s conduct was sufficiently serious that it warranted him being summarily dismissed without notice and without pay in lieu of notice.
Regarding cases of summary dismissal, a Full Bench of the Commission held under previous legislation, in Potter v WorkCover Corporation as follows,
“[55] In circumstances of summary dismissal the issue of whether the penalty imposed was proportionate to the conduct is a matter more appropriately considered in the context of s.170CG(3)(e) rather than s.170CG(3)(a). If summary dismissal was disproportionate to the misconduct that would support a conclusion that the termination was harsh, despite the existence of a "valid reason" for termination.”[3]
Under the current legislation the equivalent to s.170CG(3)(e) is s. 387 (h) and to s.170CG(3)(a) is s.387(a).
So it is that even though the applicant’s misconduct was a valid reason for dismissal it may still be that his misconduct fell short of that warranting summary dismissal. In such a situation this conclusion may then support a finding that his dismissal was harsh.
Conclusion
It is not for the Commission to stand in the shoes of the employer.
Whilst the applicant’s behaviour was deliberate it is not the case that it was clearly inconsistent with the continuation of the contract of employment. The Commission’s view is the applicants ill-considered actions were not so serious as to amount to serious misconduct.
Summary dismissal in this case was disproportionate to the applicant’s misconduct.
The Commission’s decision is that the dismissal of Mr Cain without notice or pay in lieu of notice was harsh, but only to that extent. For only this reason, the dismissal of Mr Cain was unfair.
Remedy
The applicant has gained other employment and so reinstatement is not an appropriate remedy.
I am satisfied that compensation is appropriate in the circumstances.
There is no evidence that an order of compensation would impact on the viability of the respondent’s business.
The applicant was employed for a little over eight years.
If the applicant had not been dismissed summarily, he would have had the opportunity to at least work out his notice period.
Under his contract, given he has more than five years of continuous service, the notice period the respondent was required to give the applicant was four weeks.
Consequently, if he had not been dismissed, the remuneration he would have received was four weeks wages at 38 hours per week at $32 per hour amounting to a total of $4864 gross.
The applicant has mitigated his loss by successfully obtaining other employment.
Whilst the Commission accepts the applicant’s misconduct contributed to the employer’s decision to dismiss him, it is not appropriate in this case for there to be any reduction in the amount of compensation on account of that misconduct.
An order will be issued in conjunction with this decision requiring the respondent to pay Mr Cain compensation in the amount of $4864.00 less applicable taxation within 21 days of the date of the order.
COMMISSIONER
[1] Exhibit A 2
[2] see attached to the applicant’s statement and submissions
[3] PR948009 at para. 55, [(2004) 133 IR 458]
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