Mr Martin Champion v All Lifting & Safety Pty Ltd ATF All Lifting & Safety Trust T/A All Lifting
[2016] FWC 6285
•14 SEPTEMBER 2016
| [2016] FWC 6285 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Martin Champion
v
All Lifting & Safety Pty Ltd ATF All Lifting & Safety Trust T/A All Lifting
(U2015/12584)
COMMISSIONER SAUNDERS | NEWCASTLE, 14 SEPTEMBER 2016 |
Application for relief from unfair dismissal – dismissal harsh, unjust and unreasonable – compensation.
[1] Mr Martin Champion was employed by All Lifting & Safety Pty Ltd ATF All Lifting & Safety Trust trading as All Lifting (All Lifting) from January 2012 until his dismissal on 20 October 2015. All Lifting is a manufacturing company specialising in lifting, rigging and height products and services.
[2] Mr Champion was initially employed as Branch Manager when All Lifting opened a new office in Newcastle in early 2012. However, in early 2015, Mr Champion’s role began focusing more on field service and customer work and a new Branch Manager was employed. Mr Champion’s employment came to an abrupt end on 20 October 2015, when he was handed five written warnings and a letter of termination all within minutes. Mr Champion submits that there was no valid reason for his dismissal, and furthermore, there were serious deficiencies in the termination process carried out by All Lifting. Mr Champion claims that his dismissal was harsh, unjust and unreasonable, and has made an application pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy. All Lifting denies those allegations.
[3] Mr Champion was represented by the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union, New South Wales Branch (AMWU) throughout these proceedings. All Lifting was represented by its director, Mr Sean Warner.
Initial matters to be considered
[4] I am required by s.396 of the Act to decide four matters before I consider the merits of Mr Champion’s application. There is no dispute between the parties and I am satisfied on the evidence that:
(a) Mr Champion’s application was made within the period required by section 394(2) of the Act;
(b) Mr Champion was a person protected from unfair dismissal;
(c) All Lifting was not a “small business employer” as defined in section 23 of the Act, so that the Small Business Fair Dismissal Code was inapplicable; and
(d) Mr Champion’s dismissal was not a case of genuine redundancy.
Evidence
[5] All Lifting failed to comply with a number of directions made by the Commission for it to file and serve witness statements, documents and an outline of submissions. On 17 August 2016, the parties participated in a conciliation conference but were unable to resolve the matter. At 9:16am on 18 August 2016, eight days before the matter was listed for hearing, All Lifting made an application to be able to rely on additional documents and witness statements which had not been filed or served in accordance with the previous directions made by the Commission. I heard that application by telephone at 4pm on 18 August 2016. In a decision given on transcript at the conclusion of the hearing by telephone on 18 August 2016, I gave All Lifting leave to rely on a number of statutory declarations and documents which had not been filed or served in accordance with directions issued by the Commission, but rejected the application by All Lifting to rely on other material.
[6] After considering the views of the parties, I decided to hear this matter by way of determinative conference in Newcastle on 26 August 2016. Mr Champion gave evidence in support of his case. All Lifting called Mr Howard Warner (interim Newcastle Branch Manager) and Ms Mel Gorman (Inspection Clerk) as witnesses in support of its case.
[7] Mr Champion gave evidence in his witness statement that on or around 12 October 2015 he, along with two other employees (Gary and Nathan Maloney) and union organiser (Cory Wright), met with Sean and Howard Warner to discuss a possible underpayment of their wages. Mr Champion gave evidence that their conversation was in words to the following effect:
“Martin [Champion]: The Sydney Branch are doing the same hours as us, and getting paid the 2.5 hours overtime.
Howard [Warner]: Well it looks like it’s the case that we have underpaid you, and we’ll look into that.
Sean [Warner]: Howard is going to be the Newcastle Branch Manager moving forward, you’ll all answer to him.”
[8] Mr Champion gave evidence that on 20 October 2015 he was working as normal, doing paperwork in the Newcastle branch, when he was approached by Mr Howard Warner. Mr Howard Warner simultaneously handed Mr Champion five written warnings, all dated 20 October 2015 and signed by Mr Sean Warner.
[9] The first warning letter stated that it was “regarding bullying in the workplace” and that Mr Champion’s “conduct on the 9th of July 2015 was not acceptable and that any futures [sic] issues with staff need to be brought to management”. The second letter stated Mr Champion was receiving a second official warning in relation to “removing stock from the premises without paperwork”. The third warning letter alleged that Mr Champion was “writing incorrect times on your timesheet”. The fourth warning letter stated it was for “performing inspections for clients on stop credit”. The fifth warning letter provided to Mr Champion stated that it was in relation to “paperwork being incorrectly completed or not completed at all”.
[10] Three of the five written warnings advised Mr Champion that failure to comply with the directions set out in the warnings, or any repeat of the conduct the subject of the warnings, would result in his employment at All Lifting being terminated.
[11] Immediately after being handed the five written warnings on 20 October 2015 and “flick[ing] through the documents” 1, Mr Howard Warner handed Mr Champion a sixth document and said to him words to the effect: “You know what this one is.” The sixth document handed by Mr Howard Warner to Mr Champion was a letter of termination signed by Mr Sean Warner, in the following terms:
“Dear Martin
Re: Letter of Termination
Since the appointment of the new management within the Newcastle Branch, it has been revealed that you have shown a total lack of co-operation and team work over a sustained period of time.
This behaviour has resulted in the following:
- Sustainability issues for the store moving forward; and
- An unworkable relationship between yourself and All Lifting.
It is for these reasons and those outlined in the warning letters issued to you and the fact that you wish to blatantly lie about financial matters of our business that we are terminating your employment effective immediately.
If you would like to discuss this further, please contact myself by phoning …”
[12] Mr Champion was dumbfounded. Mr Howard Warner said to him words to the effect:
“Well, you can pack up your gear and Gary will take you home.”
[13] Mr Champion gave evidence that this was the first time he had been made aware that there were any issues with his performance or conduct, or that there was any possible threat to his employment with All Lifting. Mr Champion was not provided with any payment in lieu of notice on the cessation of his employment with All Lifting on 20 October 2015.
[14] All Lifting did not challenge Mr Champion’s evidence as set out in paragraphs [7] to [13] above.
[15] I found Mr Champion to be a witness of credit. He gave evidence in a direct and responsive manner. He made concessions where appropriate and had a good recollection of the majority of relevant events.
[16] All Lifting relied on a statutory declaration made by Mr Howard Warner, the full contents of which are set out below:
“I, Howard Warner, was appointed interim Branch Manager for the Newcastle All Lifting Branch on the 20th of September 2016 [corrected later to 2015].
It soon became clear that the issues management thought were happening within the branch were significant and damaging.
After only two weeks it became clear that there was little cohesion and that animosity between the staff was destructive to the individuals and to the business.
It was clear that the bulk of the issues were caused by one person not working within the company guidelines and team ethos.
It was this behaviour and the need to right the ship that caused us to take the action to terminate Mr Martin Champion’s employment.”
[17] All Lifting also relied on the evidence given by Ms Mel Gorman, a colleague of Mr Champion’s, and specifically to an email complaint made by her on 9 July 2015 involving a disagreement she says she had with Mr Champion at the office printer. Ms Gorman’s email to Mr Sean Warner dated 9 July 2015 was in the following terms:
“This morning, I printed a whole bunch of jobs and waited for them to print. I went to get them off the printer and they were on top of the printer and half of them were missing. I asked the boys if they had to cancel my printing, Martin said no, Matt said didn’t hear/answer and left for the workshop. Print jobs have had to be cancelled before so customers don’t get kept waiting. I replied to Martin with oh, ok, half my jobs aren’t here. I went to walk away and Martin said why would I do that. I said its fine, you said no you didn’t.
I went back to my desk to reprint them. He followed me back to my desk and started raising his voice saying that I accused him of it, when all I did was ask if he had to. He then started to proceed with a few comments about everyone in Brisbane being glad to get rid of me because no one there liked me anyway, and that my attitude to everyone here sucks and no one likes me and they want me gone. I replied back that he shouldn’t judge people and I don’t appreciate the way he is talking to me. I stated more that [sic] once that I had just asked, I didn’t accuse.
He then went on some weird rant about how much people love him and how I cant make chain slings and I should go out in the work shop now and show him I can. And that I do not know what specific parts are called on certain items.
I felt that his initial response of no I didn’t, and my reply to it should have been sufficient. Being followed back to my desk and berated the way I was felt very intimidating and was highly inappropriate.”
[18] In making my decision in this matter I have had regard to all of the evidence adduced by and on behalf of Mr Champion and All Lifting, including the timesheets, payslips and spread sheet tendered by All Lifting during the determinative conference.
Was the dismissal harsh, unjust or unreasonable?
[19] The ambit of the conduct which may fall within the phrase “harsh, unjust or unreasonable” was explained in Byrne v Australian Airlines Ltd 2 by McHugh and Gummow JJ as follows:
“… It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of misconduct which the employee acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[20] The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out in section 387 of the Act. I will deal with each of these matters in turn below.
Valid reason (s.387(a))
[21] The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. 3 The reason for the dismissal should be “sound, defensible and well founded”4 and should not be “capricious, fanciful, spiteful or prejudiced.”5
[22] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 6 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).7
[23] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.8 It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 9
[24] In order to establish whether there was a valid reason for Mr Champion’s dismissal related to his capacity or conduct and, on the balance of probabilities, whether the alleged conduct occurred, I will consider each of the five written warnings issued to Mr Champion on 20 October 2015, together with the reasons for dismissal set out in the letter of termination.
First written warning
[25] The first written warning relates to Mr Champion’s interaction with Ms Gorman on 9 July 2015. Ms Gorman’s complaint is set out in paragraph [17] above. Mr Champion accepts that an argument took place in relation to the documents that had been queued for printing. 10 Mr Champion’s recollection of the conversation with Ms Gorman is as follows:
Ms Gorman: | “You’ve jumped the queue – your document is printing first!” |
Mr Champion: | “I can’t control what order it prints in – the computer does it when it wants!” |
[26] Mr Champion denies raising his voice in the discussion with Ms Gorman.
[27] Neither Mr Champion nor Ms Gorman was cross examined in relation to the content of their discussion on 9 July 2015.
[28] Mr Champion gave unchallenged evidence, which I accept, that a few days after his argument with Ms Gorman he spoke to Mr Sean Warner about what happened. Ms Gorman gave evidence that she was aware Mr Sean Warner spoke to Mr Champion about the matter shortly after the incident on 9 July 2015. Mr Champion says that his conversation with Mr Sean Warner a few days after 9 July 2015 was in words to the following effect:
Mr Champion: | “If she’s got any issues with me, I’ll steer clear of her.” |
Mr Warner: | “Alright then, I’ll talk to her about it.” |
[29] Mr Champion also gave unchallenged evidence, which I accept, that he did not hear anything more about the matter from either Mr Sean Warner or Ms Gorman, and he continued to work together with Ms Gorman. Mr Champion believed that was the end of it.
[30] I prefer Mr Champion’s evidence over Ms Gorman’s evidence in relation to what happened in their discussion on 9 July 2015 because, if Ms Gorman had been intimidated and berated by Mr Champion to the extent suggested by her, it is unlikely, in my view, that Ms Gorman and Mr Champion would have continued working together in a small branch office for a period of three months after 9 July 2015 without further incident. It is also likely, in my view, that Mr Sean Warner would have taken action within three months if he believed the matter was as serious as suggested by Ms Gorman. Accordingly, I find, on the balance of probabilities, that Mr Champion had a disagreement with Ms Gorman on 9 July 2015 as set out in paragraphs [25] and [26] above. A disagreement of that kind is of a trivial nature and does not, in my view, meet the standard of a sound, defensible or well founded reason for dismissal.
[31] Further, in Toll Holdings Ltd v Johnpulle, 11 a Full Bench of the Commission considered the issue of reliance by an employer on an earlier instance of misconduct in making a later decision to summarily dismiss an employee:
“It may be accepted that, under the general law, an employer is disentitled to summarily dismiss an employee for an earlier instance of misconduct on the part of that employee where the employer with full knowledge of the misconduct had decided to retain the employee in employment. It would be difficult to conclude for the purpose of s.387(a) of the FW Act that an employer who had condoned misconduct by an employee in this way and had thus lost the right of summary dismissal at law nonetheless had a valid reason for dismissing that employee.”
[32] In the present case, Mr Sean Warner was made aware of the incident by reason of Ms Gorman’s email to him on 9 July 2015. Mr Sean Warner spoke to Mr Champion about the matter on about 11 July 2015 and finished the conversation by saying that he (Mr Sean Warner) would talk to Ms Gorman about it. In the period of more than three months from about 11 July 2015 to the date of termination on 20 October 2015, Mr Champion heard nothing more about the matter. In those circumstances, applying the principles articulated by the Full Bench in Toll Holdings Ltd v Johnpulle and set out in the previous paragraph, I am satisfied that, even if the disagreement between Ms Gorman and Mr Champion was, contrary to my earlier finding, in the terms set out in paragraph [17] above, All Lifting did not have a valid reason to dismiss Mr Champion on 20 October 2015 in relation to his disagreement with Ms Gorman on 9 July 2015.
Second written warning
[33] The second written warning relates to an allegation that Mr Champion removed stock from All Lifting’s premises without paperwork. No particulars were provided about the stock allegedly removed from the premises or when the removal allegedly took place.
[34] Mr Champion thinks this may be a reference to “occasions when customers needed to see an item at their site to see whether it would suit the specific job”, such as a “hook, some shackles or similar gear.” 12 Mr Champion gave evidence that this was standard practice at the Newcastle branch of All Lifting and he was not aware of any “paperwork around this practice”.13 Mr Sean Warner asked Mr Champion some questions about this issue in cross examination, which questions Mr Champion answered in a coherent and reasonable way. All Lifting did not adduce any evidence to support this allegation. I therefore find, on the balance of probabilities, that the conduct alleged in this warning letter did not occur and is not a valid reason for his dismissal.
Third written warning
[35] The third written warning raised an allegation that Mr Champion had been writing incorrect times on his time sheets. All Lifting alleges in the warning letter that they “noticed significant inconsistencies regarding your [Mr Champion’s] timesheets and actual hours worked”. The letter goes on to state that “it is a requirement that your timesheet reflects the hours worked and these work hours are 7:00am to 3:30pm, Monday to Friday”. In support of these allegations, All Lifting tendered a time sheet dated 30 September 2015, 14 which showed that Mr Champion worked 8 hours each work day in the relevant week, starting at 7am on each day and finishing each afternoon at 3:30pm. All Lifting also tendered a payslip in respect of the period from 23 September 2015 to 29 September 2015,15 which showed that Mr Champion was paid 40 hours “base” pay for this week. These documents indicate that Mr Champion was paid for the number of hours recorded on his timesheet. However, All Lifting did not adduce any evidence to support its contention of “significant inconsistencies regarding your [Mr Champion’s] timesheets and actual hours worked.”
[36] Mr Champion denies these allegations and gave evidence that he was required to work between the hours of 7:00am and 4:00pm, and that he regularly started work before 7:00am. Mr Champion also gave evidence that he took calls from Mr Sean Howard before 7:00am in the office on several occasions and Mr Sean Howard never raised an issue about this with him. 16
[37] During cross examination Mr Champion was asked about a funeral he attended. In particular, it was put to Mr Champion that he attended a funeral on 25 September 2015 but recorded on his time sheet that he worked 8 hours on that day. It was also put to Mr Champion that the GPS tracking device attached to Mr Champion’s work vehicle showed that he did not leave home on 25 September 2015. Mr Champion gave evidence that he has gone to a couple of funerals in the past couple of years, but cannot recall if he went to a funeral on 25 September 2015. Mr Champion also gave evidence that, on one of the days he attended a funeral, he went to the office and worked in the morning, at which time Sean and Jason Howard were present, and he then changed his clothes and attended the funeral part way through the day.
[38] As to the GPS tracking device, All Lifting sought to rely on a spread sheet 17 to show where Mr Champion was on 25 September 2015. Although no evidence was given to support this, I was told by Mr Sean Warner at the determinative conference that the spread sheet shows the location of Mr Champion’s work vehicle according to a GPS tracker. Even putting to one side the issues raised by Mr Champion concerning the source of the spread sheet, its authenticity, and how the information in the spread sheet appears to have been marked in particular ways, the spread sheet records that Mr Champion’s vehicle was at Lambton on 25 September 2015. It does not support All Lifting’s contention that Mr Champion stayed at home on 25 September 2015 or engaged in any misconduct.
[39] Mr Champion also gave evidence that he sometimes worked from home and on occasions he used his partner’s vehicle to drive to see a local customer in relation to a job. In particular, Mr Champion gave evidence that he used his partner’s vehicle occasionally to drive from his home to see a local customer because there is a steep driveway at his home and it is difficult to get the work vehicle out of the driveway. I accept Mr Champion’s evidence in relation to these matters. The answers he gave to the questions put to him in cross examination do not establish, on the balance of probabilities, any misconduct on his part.
[40] I accept Mr Champion’s evidence in relation to these matters, including his denial of the allegations related to the third warning letter. In the absence of any supporting evidence to the contrary, I find that this is not a valid reason for his dismissal.
Fourth written warning
[41] The fourth written warning alleges that Mr Champion performed “inspections for clients on stop credit”. No particulars were provided in the warning letter of which clients were involved, what inspections were undertaken, or when the inspections were undertaken.
[42] Stop credit refers to a situation where All Lifting refuses to take any further orders from a client on credit. Mr Champion concedes that he may have performed inspections for clients on a couple of occasions, but denies ever performing an inspection, without authorisation from Accounts, after he found out a client was on stop credit.
[43] Although delivering goods to clients on stop credit was not raised in any of the letters provided to Mr Champion on 20 October 2015, this issue came up in his cross examination. Mr Champion admitted to being responsible for the delivery of goods to Fox Mining, but said he only became aware of Fox Mining being on stop credit after the goods had been delivered to them. Mr Champion also gave evidence that he was of the understanding that once a customer was on stop credit All Lifting’s accounting system would not allow a work order to be generated for that customer. On the particular occasions in question, the work orders had been generated and were in the All Lifting system so Mr Champion delivered the goods.
[44] No evidence was adduced by All Lifting to support any assertion that Mr Champion had performed an inspection for, or delivered goods to, a client in circumstances where Mr Champion knew, or ought to have known, that the client was on stop credit.
[45] I accept Mr Champion’s evidence that he was simply following the systems in place at the time and did not knowingly or negligently perform an inspection for, or deliver goods to, a client on stop credit. Accordingly, I find that this is not a valid reason for his dismissal.
Fifth written warning
[46] The fifth written warning provided to Mr Champion on 20 October 2015 alleges that he failed to follow “paperwork procedures … correctly and paperwork being incorrectly completed or not completed at all”. No particulars were provided in the warning letter as to when this conduct allegedly occurred, but the following details were given concerning the nature of the alleged failures:
(a) first, it is alleged that Mr Champion had not been doing his quotes in MYOB; and
(b) secondly, it is alleged that Mr Champion had not been doing work orders in MYOB before invoicing.
[47] Mr Champion denies these allegations. Mr Champion gave evidence that, in response to an enquiry from a customer about the price of a specific item such as a shackle, he would sometimes “informally give customers the price of these items, without a quote. I did not think this needed to be put into MYOB”. 18 Further, Mr Champion gave evidence that he did not do “any invoicing other than in person EFTPOS in the store”.19 I accept Mr Champion’s evidence in relation to these allegations, particularly in circumstances where there is no evidence to the contrary. I therefore find that this is not a valid reason for Mr Champion’s dismissal.
Termination letter
[48] The termination letter makes the following allegations:
(a) Mr Champion showed a total lack of co-operation and team work over a sustained period of time. No particulars were provided for this very broad and general allegation;
(b) Mr Champion’s behaviour in showing a total lack of co-operation and team work has resulted in:
(i) sustainability issues for the store moving forward. No particulars were provided as to what the sustainability issues are or how Mr Champion’s behaviour had caused them to occur; and
(ii) an unworkable relationship between Mr Champion and All Lifting. Again, no particulars were provided for this allegation;
(c) Mr Champion’s “wish to blatantly lie about financial matters of our business”. No particulars were provided for this very serious allegation.
[49] The evidence given by Mr Howard Warner in his statutory declaration, as set out in paragraph [16] above, is vague and general; I have given it little weight. I found Mr Howard Warner to be a credible witness when he gave evidence in the determinative conference, but his oral evidence was limited in scope and did not advance All Lifting’s evidentiary case very far.
[50] There is no cogent evidence before me to support any of the allegations in the termination letter. Mr Champion denies the allegations. I accept his denials.
[51] For the reasons set out above, I find, on the balance of probabilities, that the conduct alleged in the termination letter did not occur and there was not, in my view, a valid reason for Mr Champion’s dismissal related to his conduct or capacity.
Notification of the valid reason and opportunity to respond (s.387(b)&(c))
[52] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made 20, and in explicit21 and plain and clear terms.22 In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following (at [73]):
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”
[53] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 23
[54] Mr Champion was informed of reasons for his dismissal in the letter of termination and the five warning letters provided to him just before receiving the termination letter. However, the reasons were general and, in many cases, vague; they were not communicated in explicit and plain and clear terms. Furthermore, the first time that Mr Champion was notified of those reasons was when he attended the meeting with Mr Howard Warner on 20 October 2015. It is plain from the terms of the termination letter and the fact that it was provided by Mr Howard Warner to Mr Champion immediately after he had been provided with, and “flicked through”, the five warning letters, that the decision to dismiss Mr Champion was made before the reasons for dismissal were given to him. It follows that Mr Champion was not notified, in explicit and plain and clear terms, of the reasons for the termination of his employment, and the reasons that were provided were not communicated to him before the decision was made to dismiss him, nor was he provided with an opportunity to respond to All Lifting’s reasons for his dismissal.
Unreasonable refusal by the employer to allow a support person (s.387(d))
[55] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.
[56] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”24
[57] Mr Champion did not request that a support person be present during his discussion with Mr Howard Warner on 20 October 2015. However, he had no notice that there would be any discussion about his dismissal or potential dismissal on 20 October 2015. Further, Mr Howard Warner simply handed the warning letters and the termination letter to Mr Champion on 20 October 2015, and gave him no opportunity to request a support person be present. In those circumstances, I am satisfied that All Lifting’s conduct constituted an unreasonable refusal to allow Mr Champion to have a support person present to assist at any discussions relating to his dismissal.
Warnings regarding unsatisfactory performance (s.387(e))
[58] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal.
[59] The Commission must take into account whether there was a period of time between an employee being warned about unsatisfactory performance and a subsequent dismissal. This period of time gives the employee the opportunity to understand their employment is at risk and try and improve their performance. 25 This simply did not happen in this case.
[60] A number of the allegations made against Mr Champion in the five warning letters and the letter of termination are properly characterised as allegations of unsatisfactory performance. All Lifting did not warn Mr Champion about his alleged unsatisfactory performance before his dismissal.
Impact of the size of the employer’s enterprise on procedures followed (s.387(f))
[61] Despite All Lifting not being a small business employer as defined by section 23 of the Act, Mr Sean Warner submits that All Lifting is a small family business with 41 employees in seven locations across Australia. All Lifting’s letterhead shows that it has offices in Melbourne, Brisbane, Gold Coast, Sydney, Newcastle, and Chinchilla.
[62] In the circumstances, I am satisfied that the size of All Lifting’s enterprise had an impact on the procedures followed in effecting the dismissal of Mr Champion. Notwithstanding allowances being made for the small size of All Lifting’s enterprise, the procedure followed in effecting Mr Champion’s dismissal was “devoid of any fairness”. 26 In particular, it was unfair to ambush Mr Champion with the five warning letters on 20 October 2015 and then immediately effect his summary dismissal without first giving him a chance to consider, respond to and then improve the areas of his performance that were said to be deficient.
Absence of dedicated human resources management specialist/expertise on procedures followed (s.387(f))
[63] There is no evidence as to whether All Lifting had, at the date of Mr Champion’s dismissal, any dedicated human resource management specialists or expertise. Accordingly, I consider this to be a neutral consideration. Even if there was evidence that All Lifting did not have any dedicated human resources management specialists or experience, that would not have altered my conclusion as to the unfairness of the procedures followed to effect Mr Champion’s dismissal, for the reasons set out in the previous paragraph.
Other relevant matters (s.387(h))
[64] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
[65] I have had regard to the following other matters in considering whether Mr Champion’s dismissal was harsh, unjust and/or unreasonable:
(a) Mr Champion’s age 27 and the harshness of the personal and economic consequences of the dismissal for Mr Champion. Mr Champion was unemployed for about three months following his dismissal. During that time he was forced to live off his savings and adjust his mortgage repayment plan. Mr Champion struggled to find alternative employment in the Newcastle region;
(b) the alternative employment Mr Champion has found is as a casual employee. His work in that role is unstable; his hours of work can vary significantly from week to week; and
(c) Mr Champion had over three years’ service at All Lifting with an unblemished record. Mr Champion had not received any warnings prior to 20 October 2015.
Conclusion as to whether the dismissal was unfair
[66] Having considered each of the matters specified in section 387 of the Act, I am satisfied the dismissal of Mr Champion by All Lifting was:
(a) unjust because, on the evidence before me, Mr Champion did not engage in any of the misconduct or unsatisfactory performance on which All Lifting acted in making its decision to summarily dismiss him; and
(b) unreasonable because All Lifting’s decision to dismiss Mr Champion was made on inferences which could not, on the basis of the evidence before me, reasonably have been drawn and because Mr Champion was not afforded any procedural fairness in the process leading to his dismissal; and
(c) harsh in its consequences for the personal and economic situation of Mr Champion and because dismissal, particularly summary dismissal, is disproportionate to the gravity of the misconduct in respect of which All Lifting acted.
Remedy
[67] In light of my findings that Mr Champion was protected from unfair dismissal, and that his dismissal was harsh, unjust and unreasonable, it is necessary to consider what, if any, remedy should be granted to him.
[68] Mr Champion seeks the remedy of compensation. He contends that reinstatement would be inappropriate because he does not have any trust or confidence in All Lifting. In particular Mr Champion says that there has been a breakdown in trust caused by All Lifting’s conduct during the termination process. It is clear that All Lifting agrees that reinstatement would be inappropriate. So much is clear from Mr Sean Warner’s comment during the determinative conference to the effect that “when a cancer has been set in the organisation you need to remove it very quickly”. I am therefore satisfied that reinstatement is inappropriate in this case.
[69] A compensation remedy 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. 28
[70] Having regard to the fact that Mr Champion has suffered financial loss and unemployment as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate in all the circumstances of this case.
[71] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Mr Champion. In assessing compensation, I am required by section 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection. In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was elaborated upon in the context of the current Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden). 29
Remuneration Mr Champion would have received, or would have been likely to receive, if he had not been dismissed (s.392(2)(c))
[72] The AMWU submits on behalf of Mr Champion that he would have been employed for no less than one year by All Lifting had he not been dismissed on 20 October 2015.
[73] Mr Sean Warner, on behalf of All Lifting, submits that Mr Champion may have been employed for up to the next 12 months, no more, had he not been dismissed on 20 October 2015.
[74] There are a number of matters that are relevant to my assessment of the likely period Mr Champion would have remained employed by All Lifting had he not been dismissed on 20 October 2015, including the following:
(a) Mr Champion enjoyed working at All Lifting and had no intention from resigning from his job at All Lifting;
(b) Mr Champion lives in a regional location where full-time jobs are difficult to secure, as Mr Champion has found, particularly for somebody at his age with his skills and experience;
(c) Mr Champion was employed by All Lifting for in excess of three years and did not, prior to 20 October 2015, have any disciplinary matters or issues concerning his performance brought to his attention; and
(d) All Lifting is a relatively small business. It has a small number of employees in its Newcastle branch. Mr Howard Warner became the interim Branch Manager of the Newcastle branch on 20 September 2015. Mr Champion formerly worked in this role. Mr Howard Warner formed the view that there was little cohesion between staff in the Newcastle branch and changes needed to be made. This gave rise to the prospect of a restructure or potential disciplinary action in the event All Lifting was satisfied of there being misconduct or unsatisfactory performance.
[75] In all the circumstances, I find that Mr Champion would have remained in employment with All Lifting for a period of 6 months but for the termination of his employment on 20 October 2015.
[76] In calculating the remuneration Mr Champion would have earned had he not been dismissed, it is necessary to identify what his rate of payment would have been. The evidence establishes that Mr Champion’s average gross weekly earnings as a full-time employee with All Lifting were $1,480 gross per week ($37/hr x 40 hrs/week).
[77] Mr Champion would therefore have received $38,480 gross in remuneration in the 6 months following 20 October 2015 had he not been dismissed on 20 October 2015 (26 x $1,480 = $38,480).
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[78] Mr Champion commenced alternative casual work at the start of February 2016 and has been earning, on average, $1,000 gross per week. Mr Champion has worked in this casual position on a continuous basis from the start of February 2016 until the date of the determinative conference. This was not challenged by All Lifting.
[79] Mr Champion has not received any other remuneration since the termination of his employment with All Lifting.
[80] In the period from the start of February 2016 to the end of the anticipated period of employment (20 April 2016), Mr Champion earned $11,600 from other employment (11.6 weeks from 1 February 2016 to 20 April 2016 x $1,000/week = $11,600).
[81] Once the payment of $11,600 in wages is deducted from the figure of $38,480, this leaves $26,880 gross. This calculation is intended to put Mr Champion in the position he would have been in but for the termination of his employment. 30
[82] There is no need to look at any income Mr Champion might reasonably be likely to earn after the determinative conference on 26 August 2016, because that is beyond the period of anticipated employment (21 October 2015 to 20 April 2016).
[83] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination.
Other matters (s.392(2)(g))
[84] It is necessary to consider whether to discount the remaining amount for "contingencies". This step is a means of taking into account the possibility that the occurrence of contingencies to which Mr Champion was subject might have brought about some change in earning capacity or earnings. 31 Positive considerations which might have resulted in advancement and increased earnings are also taken into account.
[85] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision. 32
[86] Because I am looking in this matter at an anticipated period of employment which has already passed (21 October 2015 to 20 April 2016), there is no uncertainty about Mr Champion’s earnings, capacity or any other matters during that period of time.
[87] In all the circumstances I have decided that it is not appropriate to discount or increase the figure of $26,880 for contingencies.
Viability (s.392(2)(a))
[88] Mr Sean Warner made submissions that an order for compensation might, subject to the amount of any such order, have a significant effect on the viability on All Lifting. Although no evidence was provided in support of this submission, All Lifting was not represented in the proceedings before me and Mr Sean Warner does not have experience in appearing in unfair dismissal matters. In all the circumstances, I am of the view that All Lifting should be given an opportunity to consider this decision and, if it wishes to do so, file and serve evidence on the effect that an order that it pay compensation in the sum of $26,880 to Mr Champion would have on the viability of its enterprise. Any such evidence would need to be comprehensive and may well give rise to an application by the AMWU for orders for the production of relevant financial records.
Length of service (s.392(2)(b))
[89] I consider that Mr Champion’s relatively moderate period of service with All Lifting (over three and a half years) does not in all the circumstances justify any increase or reduction to the amount of compensation otherwise payable.
Mitigation efforts (s.392(2)(d))
[90] Mr Champion has made significant efforts to mitigate his loss. After being left unemployed for three months over the Christmas and New Year period, Mr Champion managed to find casual work and has been working 25 hours per week on average. I will make no adjustment on this score.
Misconduct (s.392(3))
[91] Based on the findings I have made in this matter, Mr Champion did not commit any misconduct, so this has no relevance of the assessment of compensation.
Shock, Distress (s.392(4))
[92] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation cap (s.392(5)&(6))
[93] The amount of $26,880 is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration earned by Mr Champion with All Lifting during the 26 weeks immediately before his dismissal ($38,480). In those circumstances, I am satisfied that there is no basis to reduce the amount of $26,880 by reason of s.392(5) of the Act.
Instalments (s.393)
[94] Mr Sean Warner submits that if any amount of compensation is to be awarded, payment in the form of instalments would significantly assist All Lifting’s cash flow. The AMWU submits that the parties may be able to agree on an instalment arrangement if necessary.
[95] I will give the parties 7 days from the date of this decision to see if an agreement can be reached on a regime to pay compensation to Mr Champion by instalments. Absent such an agreement, All Lifting will be given the opportunity to file and serve evidence and submissions in support of an application to pay compensation to Mr Champion by instalments.
Conclusion on remedy
[96] In my view, the application of the Sprigg formula does not, in this case, yield an amount which appears either clearly excessive or clearly inadequate. Accordingly, there is no basis for me to reassess the assumptions made in reaching the amount of $26,880. 33
[97] For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $26,880 in favour of Mr Champion is appropriate in the circumstances of this case, subject to All Lifting adducing evidence in relation to the effect of such an order on the viability of All Lifting’s enterprise and my consideration of that evidence.
[98] In light of the outstanding potential issues concerning the effect of an order that All Lifting pay Mr Champion compensation in the sum of $26,880 on the viability of its enterprise and the possibility of paying the compensation sum by instalments, I will not make any orders at this stage. I do, however, make the following directions:
(a) Within 7 days of the date of this decision the parties are to confer to see if an agreement can be reached concerning the payment of compensation to Mr Champion by instalments;
(b) By 4pm on 28 September 2016, All Lifting must inform my Associate and the AMWU in writing whether an agreement has been reached concerning the payment of compensation to Mr Champion by instalments, and if so, the terms of that agreement;
(c) In the event that no such agreement is reached, by 4pm on 13 October 2016 All Lifting must file and serve an outline of submissions, any witness statements and any documents it wishes to rely on in support of an application:
(i) to have the figure of $26,880 adjusted by reason of the effect an order to pay compensation in the sum of $26,880 would have on the viability of All Lifting’s enterprise; and/or
(ii) to pay any amount to Mr Champion by instalments.
(d) After the steps set out in (a), (b) and (potentially) (c) above have been undertaken, I will consider how the outstanding matters should be dealt with.
COMMISSIONER
Appearances:
Ms L Saunders, AMWU Legal Officer, on behalf of Mr Champion;
Mr S Warner,director, on behalf of All Lifting.
Hearing details:
2016.
Newcastle:
August, 26.
1 Ex A1 at [27]
2 (1995) 185 CLR 410 at 465
3 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.
4 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
5 Ibid
6 Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681 at 685
7 Ibid.
8 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].
9 Ibid
10 Ex A2 at [13]
11 [2016] FWCFB 108 at [15]
12 Ex A1 at [34]
13 Ibid
14 Ex R3
15 Ex R2
16 Ex A1 at [35]-[37]
17 Ex R5
18 Ex A1 at [40]
19 Ex A1 at [41]
20 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]
21 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151
22 Previsic v Australian Quarantine Inspection Services Print Q3730
23 RMIT v Asher (2010) 194 IR 1 at 14-15
24 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].
25 Johnston v Woodpile Investments T/A Hog’s Breath Café – Mindarie [2012] FWA 2 at [58].
26 Williams v The Chuang Family Trust t/a Top Hair Design [2012] FWA 9517 at [40]
27 52
28 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]
29 [2013] FWCFB 431
30 Bowden at [24], citing Ellawala v Australian Postal Corporation Print S5109 at [35]
31 Ellawala v Australian Postal Corporation Print S5109 at [36]
32 Enhance Systems Pty Ltd v Cox PR910779 at [39]
33 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32].
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