Mr Paul Clutterbuck v AHG Newcastle Pty Ltd

[2017] FWC 1060

[2017] FWC 1060

FAIR WORK COMMISSION

DECISION

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

Mr Paul Clutterbuck
v
AHG Newcastle Pty Ltd
(U2016/12417)

COMMISSIONER SAUNDERS NEWCASTLE, 3 MARCH 2017

Application for relief from unfair dismissal – valid reason for dismissal – dismissal not harsh, unjust or unreasonable – application dismissed.

[1] In about August 2016, Mr Paul Clutterbuck took a compressor from his workplace and stored it in a shed rented by Mr Clutterbuck and Mr Wayne McGuiness, the former Detail and Pre-Delivery Manager of AHG Newcastle Pty Ltd (AHG). Mr Clutterbuck claims that he was acting on instructions from Mr McGuiness when he removed the compressor from the workplace. On 26 September 2016, AHG summarily dismissed Mr Clutterbuck in connection with his removal of the compressor from the work premises without authority from AHG. Mr Clutterbuck alleges that his dismissal was harsh, unjust and unreasonable. AHG denies those allegations.

[2] I heard this matter on 17 February 2017. Mr Clutterbuck gave evidence in support of his case. AHG adduced evidence in support of its case from Mr David Williamson, HR Relationship Manager, Mr John Kearns, Pre-Delivery Manager, Mr Michael Fairbairn, Detailing Team Leader, and Mr John Cairns, Accessory Fitter.

Initial matters to be considered

[3] I am required by s.396 of the Fair Work Act 2009 (Cth) (the Act) to decide four matters before I consider the merits of Mr Clutterbuck’s application. There is no dispute between the parties and I am satisfied on the evidence that:

(a) Mr Clutterbuck’s application was made within the period required by s.394(2) of the Act;

(b) Mr Clutterbuck was a person protected from unfair dismissal;

(c) AHG was not a “small business employer” as defined in s.23 of the Act, so that the Small Business Fair Dismissal Code was inapplicable; and

(d) Mr Clutterbuck’s dismissal was not a case of genuine redundancy.

Was Mr Clutterbuck’s dismissal unfair?

[4] I am required by s.387 of the Act to take into account the matters specified in paragraphs (a) to (h) of the section in considering whether Mr Clutterbuck’s dismissal was harsh, unjust or unreasonable. I will address each of these matters in turn below.

Was there a valid reason for Mr Clutterbuck’s dismissal (s.387(a))?

Legal principles

[5] 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. 1 The reason for the dismissal should be “sound, defensible and well founded”2 and should not be “capricious, fanciful, spiteful or prejudiced”.3

[6] 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. 4 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).⁵

[7] 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.⁶ It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 7

[8] In cases where allegations of serious misconduct are made, the standard of proof in relation to the alleged conduct remains the balance of probabilities but "the nature of the issue necessarily affects the process by which reasonable satisfaction is attained" 8 and such satisfaction "should not be produced by inexact proofs, indefinite testimony, or indirect inferences"9 or "by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion".10 Put another way, the application of the Briginshaw standard means that I should not lightly make a finding that an employee engaged in the misconduct alleged against him or her.11

Valid reasons contended for by AHG

[9] AHG contends that it had a valid reason to dismiss Mr Clutterbuck in connection with his removal of the compressor from the workplace. The letter of termination given to Mr Clutterbuck on 29 September 2016 is in the following terms:

“This letter serves as formal notice of the cessation of your employment with AHG Newcastle Pty Ltd (the company). As discussed in the meeting held on Monday 26th September 2016, between your manager John Kearns, you and I, it was alleged that you removed from the work premises company owned property in the form of a functional air compressor almost a month ago and that you removed the property from the work premises without any authority from the company.

Whilst you acknowledged that you did hold this property in your personal possession, you stated that you did so believing the compressor was the personal property of a former employee, Wayne McGuiness. You further cited that you had not received any advice at all from Mr McGuiness to indicate that he was the owner of this property and confirmed that you did not seek any permission to remove this company property from the workplace.

I communicated to you that the company determines you have wilfully breached the terms and conditions of your formal employment agreement and in doing so you have placed your employment in an untenable position. You were therefore advised that the company would discontinue your employment with immediate effect.

I further communicated to you a request that you return this company property at the earliest convenience which you did the following day on Tuesday 27th September. It must be noted that the company property was returned in a significantly damaged state and is no longer operational. This further justifies the company’s decision to cease your employment, however the company will not be seeking compensation for the damages you have caused.

All outstanding entitlements to wages up to and including Monday 26th September along with accrued annual leave entitlements were processed and paid to you on Tuesday 27th September. Your final payslip and an Employment Separation Certificate are enclosed for your benefit. Should you have any queries or require any additional information please contact me at your earliest convenience to discuss.”

[10] Mr Clutterbuck agreed to comply with the following relevant obligations when he signed his contract of employment with AHG:

“During your employment you must:

…

● use your best endeavours to promote our interests and welfare at all times;

● refrain from acting, or being seen to act, in conflict with our best interests…”

[11] Mr McGuiness gave AHG six weeks’ notice of his resignation on 16 June 2016. His last day at work was due to be 29 July 2016. However, Mr McGuiness and AHG agreed that his last day at work would be 22 July 2016.

[12] Mr Cairns says that before Mr McGuiness left the workplace he heard Mr Clutterbuck and Mr McGuiness have a conversation to the following effect:

Mr McGuiness: “Don’t forget that compressor and the lift.”

Mr Clutterbuck: “Yes, I’d better get that.”

[13] Mr Cairns says that he then had a conversation with Mr Clutterbuck in words to the following effect:

Mr Cairns: “I don’t think you should be taking the compressor because I don’t think it is Wayne’s. It came out of Lucci’s spray painting van.”

Mr Clutterbuck: “I don’t know, I’m just doing what I’m told.”

[14] Mr Cairns claims that he had a subsequent conversation with Mr Clutterbuck along the same lines as the conversation set out in the previous paragraph.

[15] Mr Clutterbuck gave evidence that he more than likely had such conversations with Mr Cairns, but he cannot now recall whether he did.

[16] In light of the clarity with which Mr Cairns was able to recall these discussions with Mr Clutterbuck and Mr Clutterbuck’s concession that he more than likely had such conversations with Mr Cairns, I accept the evidence given by Mr Cairns, as set out in paragraphs [12] to [14] above, as truthful and reliable.

[17] On a day in about August 2016, after Mr McGuiness had ceased to be employed by AHG, Mr Clutterbuck arrived early to work one morning and loaded the compressor, together with a number of other tools and items, into his vehicle and trailer. Mr Clutterbuck says all the items he collected from the workplace were, to the best of his knowledge and belief, owned by either him or Mr McGuiness and Mr Clutterbuck was removing Mr McGuiness’ items (including the compressor) from the workplace at Mr McGuiness’ request.

[18] Mr Kearns arrived at work on the morning Mr Clutterbuck was loading the compressor and other items into his vehicle and trailer. At that time Mr Kearns was new to AHG’s business and did not know what items were owned by AHG. Mr Kearns approached Mr Clutterbuck and asked what he was doing. Mr Clutterbuck told Mr Kearns that he was taking his tools home. He gave that answer because at the time Mr Kearns asked him the question Mr Clutterbuck was pushing the welder he owned towards his vehicle. Mr Clutterbuck did not tell Mr Kearns that some of the items he was taking away from the workplace were, so far as Mr Clutterbuck understood it, owned by Mr McGuiness. Mr Clutterbuck took the compressor and other items he removed from the workplace to a shed he shared with Mr McGuiness.

[19] Some time after Mr Clutterbuck removed the compressor from the workplace, a number of employees informed Mr Kearns that Mr Clutterbuck had removed a compressor owned by AHG from the workplace. Mr Kearns made enquiries and satisfied himself that the compressor was owned by AHG; the compressor had been removed from a mobile spray painting van operated by AHG in favour of a more user friendly model following a safety review earlier in the year. 12

[20] On 26 September 2016, Mr Williamson and Mr Kearns met with Mr Clutterbuck to discuss the compressor. Mr Williamson and Mr Kearns asked Mr Clutterbuck a number of questions about his removal of the compressor from the workplace. Mr Clutterbuck did not deny that he had taken the compressor from the workplace. There is a dispute on the evidence as to whether Mr Clutterbuck told Mr Williamson and Mr Kearns that Mr McGuiness had instructed him to remove his compressor from the workplace. Mr Williamson says that Mr Clutterbuck told them that he had no instruction to remove the compressor from the workplace. Mr Clutterbuck says that he told Mr Williamson and Mr Kearns that Mr McGuiness had asked him to take his items away from the workplace, but when he was questioned specifically about the compressor Mr Clutterbuck told them that he had mistakenly taken the compressor as one of Mr McGuiness’ belongings. Mr Kearns gave evidence that Mr Clutterbuck told them that he had collected the compressor on behalf of Mr McGuiness. 13 I prefer the evidence given by Mr Kearns in relation to this issue. Mr Clutterbuck did not have a good recollection of the discussion on 26 September 2016, because he was upset at being accused of theft.14 Further, Mr Kearns’ evidence is consistent with, and supported by, the evidence set out in paragraph [12] above concerning the conversation Mr Cairns heard between Mr Clutterbuck and Mr McGuiness.

[21] Mr Williamson and Mr Kearns considered Mr Clutterbuck’s responses to the questions they asked him about the compressor and then made a decision to dismiss him summarily. Mr Clutterbuck was asked to return the compressor to AHG at his earliest convenience, which he did on the following day, 27 September 2016. Mr Clutterbuck admits that the compressor was damaged when he returned it to AHG. Mr Clutterbuck says, and I accept, that the compressor was damaged when it slipped off the back of his trailer as he was transporting it back to AHG. I am satisfied that Mr Clutterbuck did not intentionally damage the compressor.

[22] On 29 September 2016, Mr Clutterbuck was provided with a letter confirming the termination of his employment and the reasons for it.

[23] In light of the conversations Mr Clutterbuck had with Mr Cairns before he removed the compressor from the workplace, as set out in paragraphs [12] to [14] above, it is clear that Mr Clutterbuck was on notice at the time he took the compressor from the workplace that it was, or may well have been, owned by AHG, not Mr McGuiness. Further, given that Mr McGuiness was, at the time Mr Clutterbuck removed the compressor from the workplace, no longer employed by AHG and therefore had no actual or apparent authority to give a direction or approval to Mr Clutterbuck to remove the compressor from the workplace, it was, in my view, incumbent on Mr Clutterbuck to seek authority from Mr Kearns or another appropriate manager before removing the compressor from the workplace. That he did not do so meant that he failed to comply with his obligations to use his “best endeavours to promote our [AHG’s] interests and welfare at all times” and “refrain from acting, or being seen to act, in conflict with our [AHG’s] best interests”.

Conclusion on valid reason

[24] I am satisfied that Mr Clutterbuck did not remove the compressor from the workplace because he wanted to steal or use it for his own benefit. I accept Mr Clutterbuck’s evidence that Mr McGuiness asked him to remove the compressor from the workplace.

[25] However, Mr Clutterbuck did not have approval from AHG to remove its compressor from the workplace. Further, in circumstances where Mr Clutterbuck was on notice that the compressor was, or may well have been, owned by AHG, not Mr McGuiness, Mr Clutterbuck’s failure to obtain approval from AHG before removing the compressor from the workplace gave AHG a sound, defensible and well founded reason to dismiss Mr Clutterbuck. I am therefore satisfied that AHG had a valid reason for Mr Clutterbuck’s dismissal related to his conduct.

Was Mr Clutterbuck notified of the reasons for his dismissal and given an opportunity to respond (s.387(b)&(c))?

[26] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made 15, and in explicit16 and plain and clear terms.17 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.”

[27] 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. 18

[28] Allegations in relation to Mr Clutterbuck’s removal of the compressor from the workplace were put to Mr Clutterbuck in the meeting on 26 September 2016. In addition, Mr Clutterbuck was given the opportunity to, and did, respond to those allegations in the meeting on 26 September 2016. Those events took place before the decision to dismiss Mr Clutterbuck was made and communicated to him.

[29] On the basis of the evidence summarised in the previous paragraph, I am satisfied that AHG notified Mr Clutterbuck of the reasons for his dismissal and gave him an opportunity to respond to those reasons before making the decision to dismiss him. The reasons for termination were also confirmed in a letter dated 29 September 2016.

Was there an unreasonable refusal to allow Mr Clutterbuck to have a support person present (s.387(d))?

[30] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.

[31] 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.”19

[32] Although Mr Clutterbuck was not offered to have a support person with him at the meeting on 26 September 2016, there is no suggestion in the evidence that Mr Clutterbuck asked for a support person to be present during the meeting on 26 September 2016. Accordingly, I am satisfied that there was no unreasonable refusal by AHG to allow Mr Clutterbuck to have a support person present to assist at any discussions relating to his dismissal.

Warnings about unsatisfactory performance (s.387(e))

[33] 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.

[34] In this case, the reasons for dismissal related to Mr Clutterbuck’s conduct, rather than his performance, so this consideration is not relevant.

Impact of size of AHG on procedures followed in effecting the dismissal (s.387(f))

[35] AHG is a reasonably large business enterprise. I do not consider that its size would be likely to impact on the procedures followed in effecting Mr Clutterbuck’s dismissal.

Absence of dedicated human resource management specialists or expertise (s.387(g))

[36] AHG has dedicated human resource management specialists and expertise, so this consideration is not relevant.

Other relevant matters (s.387(h))

[37] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

[38] The basis upon which a dismissal may be found to be harsh, unjust or unreasonable, notwithstanding a finding that there was a valid reason for dismissal based upon conduct in breach of a contract of employment or employer policy was explained by the Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 20 in the following terms:

“[41] Nevertheless, it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” for the dismissal”: Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; J Boag & Son Brewing Pty Ltd v John Button[2010] FWAFB 4022; Windsor Smith v Liu [1998] Print Q3462; Caspanello v Telstra Corporation Limited [2002] AIRC 1171; King v Freshmore (Vic) Pty Ltd [2000] Print S4213; Dahlstrom v Wagstaff Cranbourne Pty Ltd [2000] Print T1001; Erskine v Chalmers Industries Pty Ltd [2001] PR902746 citing Allied Express Transport Pty Ltd (1998) 81 IR 410 at 413; Qantas Airways Limited v Cornwall (1998) 82 IR 102 at 109; ALH Group Pty Ltd T/A the Royal Exchange Hotel v Mulhall [2002] PR919205. That principle reflects the approach of the High Court in Victoria v Commonwealth and is a consequence of the reality that in any given case there may be “relevant matters” that do not bear upon whether there was a “valid reason” for the dismissal but do bear upon whether the dismissal was “harsh, unjust or unreasonable”.

[42] Broadly speaking, circumstances bearing upon whether a dismissal for misconduct is harsh, unjust or unreasonable fall into three broad categories:

(1) The acts or omissions that constitute the alleged misconduct on which the employer relied (together with the employee’s disciplinary history and any warnings, if relied upon by the employer at the time of dismissal) but otherwise considered in isolation from the broader context in which those acts or omissions occurred.

(2) The broader context in the workplace in which those acts or omissions occurred. [This may include such matters as a history of toleration or condonation of the misconduct by the employer or inconsistent treatment of other employees guilty of the same misconduct.]

(3) The personal or private circumstances of the employee that bear upon the substantive fairness of the dismissal. [This includes, matters such as length of service, the absence of any disciplinary history and the harshness of the consequences of dismissal for the employee and his or her dependents.]

[43] The determination of whether there was a “valid reason” proceeds by reference to the matters in category (1) and occurs before there is a consideration of what Northrop J described as “substantive fairness” from the perspective of the employee. Matters in categories (2) and (3) are then properly brought to account in the overall consideration of the whether the dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason”.
...

[47] In Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 41 IR 452 Sheppard and Heerey JJ observed (at p 460):

“Employers can promulgate polices and give directions to employees as they see fit, but they cannot exclude the possibility that instant dismissal of an individual employee for non-compliance may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable.”

[48] Thus, a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is not harsh, unjust or unreasonable. The Commission has consistently applied the proposition that instant dismissal of an employee for non-compliance with his or her employer’s policies may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable: Kangan Batman TAFE v Hart [2005] PR958003, Ross VP, Kaufman SDP and Foggo C at para [51]; Fearnley v Tenix Defence Systems Pty Ltd [2000] Print S6238, Ross VP, Polites SDP and Smith C (Fearnley) at [61]); Atfield v Jupiters Ltd (2003) 124 IR 217 (Jupiters) at [12]-[13].”

[39] There are a number of “other matters” which are relevant to my determination as to whether Mr Clutterbuck’s dismissal was harsh, unjust or unreasonable. I will deal with each of them in turn below.

AHG’s investigation

[40] Mr Clutterbuck contends that AHG’s investigation into his removal of the compressor from the workplace was deficient and unfair. He says AHG should have asked him earlier than it did about his removal of the compressor from the workplace, AHG should not have accused him of theft, and if the matter was so important it should have been reported to the Police.

[41] It took AHG some time to investigate the matter and raise it with Mr Clutterbuck. However, that was because Mr Kearns was new to the business and he needed to make appropriate enquiries after the matter was brought to his attention in order to determine whether the compressor was owned by AHG. The timeframe was reasonable in the circumstances.

[42] I am satisfied that Mr Clutterbuck was asked reasonable questions by Mr Williamson and Mr Kearns in the meeting on 26 September 2016. Mr Clutterbuck was upset during that meeting at the thought of being accused of theft, but it was necessary in the circumstances for AHG to ask Mr Clutterbuck the questions that it did concerning his knowledge of who owned the compressor and who, if anyone, had instructed him to remove it from the workplace. I also accept AHG’s explanation that they did not report the matter to the Police because they dealt with it as an internal employment matter and took the view that terminating Mr Clutterbuck’s employment was the end of the matter.

Mr Clutterbuck’s history of employment with AHG

[43] Mr Clutterbuck was employed by AHG for a relatively short period of time, namely from 28 October 2015 to 26 September 2016. There is no suggestion in the evidence that Mr Clutterbuck had received any warnings or been the subject of any disciplinary action during his employment with AHG, save for in relation to the events that gave rise to his dismissal on 26 September 2016.

Harshness of the dismissal

[44] Mr Clutterbuck’s dismissal has had significant negative consequences for his personal and economic situation. In particular, Mr Clutterbuck has not obtained alternative employment since his summary dismissal with AHG. He has undertaken a limited amount of work as a subcontractor, but is likely to find it difficult to obtain alternative full time employment. Mr Clutterbuck also believes his dismissal was harsh because he was simply following Mr McGuiness’ instructions to remove the compressor from the workplace.

[45] The harsh aspects of the dismissal must be weighed against the gravity of Mr Clutterbuck’s misconduct in respect of which AHG acted in deciding to dismiss him. In the circumstances, I am satisfied that Mr Clutterbuck’s dismissal was not disproportionate to the gravity of the misconduct in which he engaged, nor was it harsh in any other sense. The fact that Mr Clutterbuck was following Mr McGuiness’ instructions for him to remove the compressor from the workplace should, in my view, be given limited weight as a mitigating factor in view of the fact that Mr Clutterbuck was warned by Mr Cairns that the compressor was, or may well have been, owned by AHG, not Mr McGuiness, and Mr McGuiness was not employed by AHG at the time that Mr Clutterbuck removed the compressor from the workplace.

Conclusion

[46] AHG had a sound, defensible and well founded reason for dismissing Mr Clutterbuck on the basis of his conduct. In particular, Mr Clutterbuck’s dismissal was based on his removal of AHG’s compressor from the workplace without authority. AHG undertook an investigation into Mr Clutterbuck’s conduct. AHG afforded Mr Clutterbuck an opportunity to participate in the investigation and respond to the allegations made against him before the decision was made to terminate his employment. I am satisfied that he was afforded procedural fairness throughout the process.

[47] Having considered each of the matters specified in s.387 of the Act, I am satisfied that AHG’s dismissal of Mr Clutterbuck was not harsh, unjust or unreasonable. Mr Clutterbuck’s unfair dismissal application is therefore dismissed.

COMMISSIONER

Appearances:

Mr P Clutterbuck appeared for himself

Mr D Williamson appeared for the Respondent

Hearing details:

2017

Newcastle

February 17

 1   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.

 2   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373

 3   Ibid

 4   Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681 at 685

5 Ibid

6 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].

 7   Ibid

 8   Briginshaw v Briginshaw (1938) 60 CLR 336 per Dixon J at p 363

 9   Ibid per Dixon J at p 362

 10   Ibid per Rich J at p 350

 11   Sodeman v The King [1936] HCA 75; (1936) 55 CLR 192 at 216 per Dixon J

 12   PN389

 13   PN411

 14   PN238-244 & PN400

 15   Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]

 16   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151

 17   Previsic v Australian Quarantine Inspection Services Print Q3730

 18   RMIT v Asher (2010) 194 IR 1 at 14-15

19 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].

 20   [2013] FWCFB 6191

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