Mr Paul Arthur v Bells South Melbourne Pty Ltd T/A Bells Hotel and Brewery

[2010] FWA 9487

[2010] FWA 9487

FAIR WORK AUSTRALIA

DECISION

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

Mr Paul Arthur
v
Bells South Melbourne Pty Ltd T/A Bells Hotel and Brewery
(U2010/12007)

COMMISSIONER ROE MELBOURNE, 9 DECEMBER 2010

Termination of employment – misconduct.

[1] The matter arises from an application filed on 30 August 2010 under s 394 of the Fair Work Act 2009 (the Act) by Mr Paul Arthur (the Applicant) for relief in respect to the termination of his employment from Bells South Melbourne Pty Ltd T/A Bells Hotel and Brewery (the Respondent).

[2] Following an unsuccessful conciliation conference the matter proceeded to arbitration. I determined having considered all the circumstances to proceed to a hearing.

[3] Directions were issued by Fair Work Australia and the matter was heard on 8 December 2010.

[4] At the hearing the Applicant was represented by Mr L Crofton of counsel. Leave was granted for Mr Crofton to appear.

[5] The Applicant gave evidence. 1 I also admitted into evidence correspondence from Fresh Numbers Pty Ltd, an accountancy firm, to the Respondent dated 4 November 2010.2

[6] The Respondent did not appear.

[7] On 22 November 2010 Fair Work Australia received advice that Tisher Liner and Co were no longer acting for the Respondent and that “our client has instructed that it does not propose to appear at the hearing of this matter.” I wrote to Mr K Day and Mr R Day, Directors of the Respondent on 2 December 2010 advising them that the matter will proceed on 8 December, that I may determine the matter in their absence pursuant to Section 600 of the Act, that the Respondent was required to attend the hearing, and that the Respondent should still provide any evidence they might wish to rely on in advance of the hearing notwithstanding the fact that the deadline imposed by the directions was passed. Mr Ken Day responded on behalf of Bells South Melbourne Pty Ltd on 3 December 2010 advising that there would not be any submission or attendance at the hearing. I responded further on 3 December 2010 again advising that I would proceed to hear the matter on 8 December 2010 and that the matter would be determined based upon the evidence presented at that time and again urging the Respondent to attend.

[8] The Respondent did provide a F3 Form - Employer’s Response to Application to Unfair Dismissal Remedy on 18 October 2010. I take into account the contents of that Form. Question 4 on that Form asks “Do you have any jurisdictional or other objection(s) to the application?” The response from the Respondent was “no”. In response to question 1 on the Form the Respondent confirms that the Applicant was employed from 14 December 2007 until the date of dismissal on 17 August 2010. The Respondent confirms that the Applicant was first notified of the dismissal on 17 August 2010. The Respondent in response to Question 5 said that they employ 4 full time and 15 casual employees. The Applicant submitted that the casual employees were employed on a regular and systematic basis and in the absence of any evidence to the contrary I am satisfied that this is the case.

[9] Having considered the statements of the Respondent provide on the F3 Form together with the other evidence and submissions I am satisfied that:

• the Respondent is a national system employer;



• the Applicant earns less than the high income threshold;



• the Applicant was dismissed on 17 August 2010 at the initiative of the employer and that the dismissal was a summary dismissal for alleged misconduct and no notice was given or paid;



• that a genuine redundancy is not involved;



• that the Applicant was employed as a full time employee in the position of general manager continuously from May 2001 until 17 August 2010. The Respondent purchased the Hotel in December 2007 and continued the employment of the Applicant; 3



• that the Respondent is not a small business employer as defined by Section 23 of the Act.

[10] The jurisdiction exists to determine the Application for unfair dismissal remedy.

[11] I do not have to have regard to the small business fair dismissal code. However, if I am wrong about the conclusion that the Respondent is not a small business I am satisfied that the code has not been complied with as the allegation of theft or fraud has not been reported to the police and there is no evidence of compliance with the code.

[12] The Respondent in the F3 Form says that the Applicant was terminated on the grounds of misappropriation of funds.

[13] Having considered all of the evidence before me I am satisfied that:

• There was no letter of dismissal.



• The Applicant attended a regular scheduled weekly meeting with Mr Rodney Day a Director of the Respondent on 17 August 2010 and without any prior warning Mr Day alleged at that meeting that there were significant cash discrepancies amounting to some $100,000 dating back over two years and accused the Applicant of stealing this money.



• The Applicant was dismissed without notice at the meeting on 17 August 2010.



• The Applicant did not receive his contractual entitlements including salary for the week ending 15 August 2010, 10 weeks annual leave, 8.1 weeks long service leave and superannuation payments totalling $10,188.39.

[14] I am satisfied that the Respondent has not advised the police of the alleged misappropriation of funds. The Respondent does not claim to have done this in any of the documents provided including the F3 Form. The Applicant gave sworn evidence that he had not been interviewed by the police in relation to the matter. 4

[15] The Applicant gave evidence that during the dismissal meeting Mr Day confirmed that the investigation into the missing money had not been completed. The Applicant gave further evidence that two days after the dismissal an employee of the Respondent sought his assistance in trying to locate how the cash discrepancy may have occurred. Correspondence from the accountants Fresh Numbers of 4 November 2010 confirmed that the accountants had not yet confirmed the actual amount of any discrepancy. There is no suggestion in the correspondence of 4 November 2010 that anything has been discovered about the role of the Applicant in any missing funds. 5

[16] I am satisfied that at the time of the dismissal the Respondent did not have sufficient evidence to be able to determine that the Applicant was in any way responsible for the missing funds. At the time of the dismissal there had been no proper investigation of the matter. The investigation had still not been completed on 4 November 2010 several months after the dismissal.

[17] The Applicant gave credible evidence that he had no proper opportunity to be able to respond to the allegations against him. Given the nature of the allegations it would have been appropriate for him to have advance notice of the meeting and the reason for it and proper opportunity and time to examine the relevant accounts and respond to them. I am satisfied that this did not happen.

[18] The Applicant gave evidence that he was responsible for the banking of cash and issuing of deposit slips to the bank but that he did not have access to the cash books of the hotel and was not responsible for the reconciliation of the cash banked with the bank statements for the accounts into which those deposits were credited. The Applicant gave evidence that he did carefully account for all cash received every week. In the F3 Form the Respondent stated that $10,000 was misappropriated whereas the Applicant gave evidence that it was $100,000 which was put to him by Mr Day. The Respondent does not state that there was any independent investigation which led to the conclusion that the Applicant was responsible. The Respondent states that the Applicant was responsible for cash recordings, reconciliations and banking for the hotel but does not contradict the evidence of the Applicant that he did not have access to the cash books of the hotel and was not responsible for the reconciliation of the cash banked with the bank statements for the accounts into which those deposits were credited.

[19] The Applicant gave evidence that when the representative of the Respondent sought his help two days after the dismissal to locate how the discrepancy may have occurred he was shown various documents covering the last two weeks of his employment. The Applicant says that he saw that the cash balance and cash banked reconciled in these documents but there were some discrepancies in the overall takings. This led the Applicant to suggest that the discrepancy may have arisen from electronic funds transfer (EFTPOS) amounts from the EFTPOS terminals in the Hotel. 6

[20] In the absence of any evidence to the contrary I am satisfied with the explanation of the Applicant. I am satisfied that the Respondent did not have a valid reason to dismiss the Applicant.

[21] The Applicant was notified of the reason for the dismissal.

[22] The Applicant was not provided with procedural fairness in that he was not told that the meeting he was attending was to deal with a disciplinary matter. He was given no notice of the matters to which he was asked to respond. It was totally unreasonable to expect the Applicant to respond to the alleged problem with the accounts without adequate time to review the complex documents. I am satisfied that in these circumstances the Applicant was effectively denied the opportunity to respond to the allegation against him.

[23] There is no requirement for the employer to actively encourage representation, however, given that the Applicant did not know that the meeting was to deal with a disciplinary matter he was effectively denied the opportunity for representation.

[24] There was clearly no prior warning.

[25] The relatively small size of the Respondent and the lack of specialist human resource management may have had some affect on the procedures followed, however, they cannot excuse the complete lack of procedural fairness in this matter.

[26] I am satisfied that the dismissal was harsh, unjust and unreasonable.

Remedy

[27] The Applicant does not seek reinstatement. The Applicant feels that the serious allegations which were made against him which he believes to be totally unfounded and unsubstantiated have caused very serious harm to him. The Applicant feels that this makes the continuing employment relationship untenable. In all of the circumstances I accept the Applicant’s submissions in this respect and agree that reinstatement is not appropriate.

[28] I am satisfied that an award of compensation is appropriate.

[29] The Applicant gave evidence to the effect that:

• His weekly salary prior to the dismissal was $1,217.86 per week gross of tax.



• He was unable to obtain any work during the first three weeks following the dismissal.



• He has been successful in obtaining casual bar work in the weeks following.



• He has been working an average of 35 hours per week since that time at a rate of $19.17 per hour on weekdays and $25 per hour approximately on weekends.



• In the 16 weeks since his dismissal he would have earned $19,485,76 working for the Respondent but his total earnings from other work during that period would not have exceeded $10,000.

[30] The Applicant gave evidence that no problems with his performance were raised during the period of his employment prior to 17 August 2010. He gave evidence that the Respondent praised his performance on a number of occasions. The Applicant expected that his employment would continue indefinitely.

[31] I am satisfied that had the dismissal not occurred on 17 August 2010 the Applicant’s employment would have continued for at least two and probably many more years. In coming to this conclusion I note that the Applicant had been doing the job for nine and a half years and that the Respondent had kept the Applicant on after a transfer of business in late 2007.

[32] I am satisfied that the Applicant made all reasonable attempts to mitigate his losses following the dismissal.

[33] I take into account the Applicants long period of service and the difficulties he may well have obtaining equivalent employment quickly.

[34] I make no allowance for shock, distress or humiliation caused by the manner of the dismissal.

[35] There was no evidence that the order I might make would affect the viability of the employer’s enterprise. I am satisfied that there would be no effect on the viability of the employer’s enterprise as a result of my order.

[36] The Applicant is likely to continue to earn significantly less than he did with the Respondent during the period between the making of my order and the actual payment of any compensation.

[37] I find that there is no basis to conclude that there was any misconduct by the Applicant which could reasonably have contributed to the employer’s decision to dismiss the Applicant and hence I do not reduce my order of compensation because of any misconduct by the Applicant.

[38] Based upon my conclusion that the Applicant would have continued to be employed by the Applicant for a period of at least two more years and after making deductions for the earnings made by the Applicant during the period since the dismissal and also reasonable deduction for errors and contingencies and taking into account the long service of the Applicant I am satisfied that an award of the maximum amount of compensation, that is six month’s salary, is appropriate in this case.

[39] I will issue an order that the Respondent pay to the Applicant an amount of $31,664.36 less appropriate taxation within seven days of this decision. The Respondent has liberty to apply for a variation to the orders in respect to the time period for payments.

COMMISSIONER

Appearances:

Mr L Crofton, appearing for the Applicant.

Hearing details:

2010

Melbourne

December 8.

 1   Exhibit A-1.

 2   Exhibit A-2.

 3   Exhibit A-1, Paragraph 1-3.

 4   Exhibit A-1, Paragraph 23.

 5   Exhibit A-2.

 6   Exhibit A-1.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR504843>