[2017] FWC 5501

FAIR WORK COMMISSION

DECISION

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

Mr Raymond Alverson
v
Artcraft Pty Ltd
(U2017/769)

DEPUTY PRESIDENT SAMS

SYDNEY, 16 NOVEMBER 2017

Application for an unfair dismissal remedy – summary dismissal for serious misconduct – forwarding of confidential information to personal email – contraventions of policies and contract of employment – facts unknown at time of dismissal come to light – applicant operating a business said to be in competition to his employer – breach of contract of employment and conflict of interest – whether valid reason/s for dismissal – allegation employee dismissed in order to avoid payment of significant commission – much of the evidence dealt with alleged alternative reason for dismissal – witness credit – insufficient evidence to establish stated reason for dismissal was serious misconduct or a valid reason for dismissal – procedural unfairness – facts not known at time of dismissal constitute a breach of contract of employment and a conflict of interest – applicant’s business in competition with employer’s business – conduct justified earlier dismissal – serious misconduct proven – serious misconduct not outweighed by earlier findings and issues of procedural unfairness – dismissal not harsh, unjust or unreasonable – application for unfair dismissal remedy dismissed.

BACKGROUND

[1] Mr Raymond Alverson (the ‘applicant’) commenced employment with Artcraft Pty Ltd on 30 March 2016 as the Company’s Business Development Manager. Artcraft is in the business of selling electronic road signs and is the largest road sign manufacturer in Australia. In the exercise of his duties, Mr Alverson was provided with a company vehicle, mobile phone and laptop computer. Mr Alverson’s salary was $62,000 per annum, with the ability to earn commission according to a scale of commissions set out in his contract of employment. As the commission issue became a dominant feature of the case, I set out, at this point, the relevant provision in his contract which reads:

Commission structure

• Monthly budget required $60,000 revenue with minimum of 25% margin.

• Bonus for sales exceeding $60k up to $100k, 2% of revenue with a margin of 25% or greater.

• Bonus for sales over $100k for the month, 3% uncapped.

• Commissions paid on invoice in full.

[2] Mr Alverson was dismissed from his employment for serious misconduct on 5 January 2017. The misconduct alleged against Mr Alverson was set out in a letter terminating his employment as follows:

‘the systematic forwarding of company confidential documents to your home email account in contravention of cl 11 of his contract of employment.’

[3] Clause 11 referred to above reads as follows:

Confidentiality

11.1 Use copying and storage of Confidential Information

You must not use, copy or store Confidential Information other than for the purpose of performing your duties.

11.2 Disclosure of Confidential Information

Must not disclose Confidential information unless the disclosure:

(a) is to an officer, director or employee of Artcraft;

(b) is to third parties who have a need to know (and only to the extent that the third parties have a need to know) and the disclosure has been approved by the Board of Directors or the Chief Executive Officer;

(d) relates to information which is part of the public domain, or becomes part of the public domain other than as a result of breach of confidentiality.

11.3 Acknowledgements and assistance

(a) you acknowledge that disclosure of Confidential Information, except as permitted in accordance with this Agreement, could cause Artcraft damage.

(b) you must provide all assistance reasonably required by Artcraft in connection with any proceedings Artcraft may take against any person for unauthorised use, copying, storage, or disclosure of Confidential Information.

(c) you acknowledge that your obligations in relation to use and disclosure of Confidential Information survive termination of your employment.

[4] On 25 January 2017, Mr Alverson filed an application for an unfair dismissal remedy, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) in which he sought orders from the Fair Work Commission (the ‘Commission’) for monetary compensation (s 392 of the Act) and the payment of an outstanding commission. Amongst other matters, Mr Alverson asserted that his dismissal was unfair and that the real reason he was dismissed was because Artcraft intended to avoid paying him a commission of approximately $80,000.00. Mr Alverson claims he had been entitled to the commission for securing one of the largest contracts Artcraft had ever won from Coates Hire. The extent of Mr Alverson’s involvement in securing this contract became a highly contested feature of this case, to which I will later return.

[5] In accordance with the Commission’s protocols, the application was subject to telephone conciliation, but was unable to be resolved. The matter was remitted to me for arbitration and directions were issued for the filing and service of evidence and a short outline of submissions. At the hearing, Mr Alverson (also referred to as the ‘applicant’) was represented by Mr M Vassili, Solicitor and Mr P Santucci, of Counsel appeared for Artcraft (the ‘Company’ or the ‘respondent’). Both parties were given permission to be represented by lawyers, pursuant to s 596 of the Act.

THE EVIDENCE

[6] The following persons provided statement and oral evidence in the proceedings:

• Mr Kelly Knight, National Operations Manager, Artcraft Pty Ltd;

• Mr Russell Chataway, Project Supervisor, Artcraft Pty Ltd;

• Mr Rod Wellington, Chief Executive Officer, Artcraft Pty Ltd;

• Mr Douglas Grey, Division Manager, Artcraft Pty Ltd;

• Mr Scott Reed, Former NSW Branch Manager, Artcraft Pty Ltd; and

• Mr Raymond Alverson.

Mr Kelly Knight

[7] In his role as National Operations Manager, Mr Knight manages the performance of each state branch and State Manager. He is also responsible for the achievement of Company sales and performance targets and the implementation of Companywide processes and strategies.

[8] It was Mr Knight’s evidence that on 21 December 2016, he received an email from Mr Gary Flexman, General Manager of Streets Ahead Maintenance (SAM). SAM is part of the respondent’s Group of Companies and is the preferred supplier for the provision of sign and structure installation and road maintenance service. SAM has the same directors as Artcraft. In this email, Mr Flexman expressed concerns that the applicant had potentially assisted a competitor of SAM - MBA Installations and Maintenance (‘MBA’) - to set up its business in Sydney and may have potentially used MBA in relation to a particular job. Shortly thereafter, he was told by Mr Krishna Swamy, Purchasing and Administration Officer, that the applicant had asked him to place an order with MBA.

[9] Mr Knight then spoke to Mr Wellington and it was agreed that Mr Wellington would seek to gain access to the applicant’s emails to establish if he was communicating with MBA. That same day, Mr Wellington identified a series of confidential emails sent from the Company’s email account to the applicant’s personal Gmail address. The documents included:

• the Sydney Quote Register (sent 29 October 2016)

• the Company Project Estimation Spreadsheet (sent 3 November 2016)

• the customer price list for Mr Ted Piggott (sent 10 November 2016)

The documents were tendered and marked ‘confidential’. Mr Knight recalled on the days the documents were sent to the applicant’s home Gmail, he was in the office.

[10] Mr Knight described the import of each document as follows.

Sydney Quote Register

[11] Mr Knight claimed this was a highly sensitive and confidential document about the Company’s pricing. It details every client and prospective client which the Company has provided quotes to. Information includes quote value, the margin of each quote, whether the quote was won or lost and comments in relation to sales and marketing strategies. Mr Knight’s evidence was that this register can be accessed remotely worldwide by all sales staff with a user name and password. The applicant had access to the secure login facility, including through the Company provided laptop.

Company Project Estimation Spreadsheet

[12] Similarly, Mr Knight claimed this spreadsheet contains highly sensitive confidential information about the Company’s costs and details relating to the installation processes. It is used by all sales staff as a template for estimating and providing tenders for large and small projects, using the Company’s username and password. The spreadsheet can be accessed remotely on any computer through the secure remote login facility. The applicant can also access the spreadsheet by using the Company supplied laptop.

Customer price list for Mr Ted Piggott

[13] Mr Knight said that until around October 2016, Mr Piggott had been one of the respondent’s top five customers. His price list contains highly sensitive and confidential information. Mr Knight understood that Mr Piggott is now using the services and products of a competitor. Given these circumstances, Mr Knight was unclear why the applicant would have needed to access Mr Piggott’s customer list in November 2016. Like the above documents, this price list is accessible to all sales staff, including remotely and via Company laptops, using passwords and Company logins.

[14] After reviewing this information, Mr Knight had conversations with Mr Wellington and Mr Chattaway. He asked Mr Chattaway to have a meeting with the applicant to ask him if he had copied any Artcraft electronic files. This meeting was held on 22 December 2016. The applicant informed Mr Chattaway that he took documents home along with his laptop to assist with his job duties. Later that day, Mr Knight discussed the matter with Mr Wellington and Mr Robyn Smit, HR Manager. Mr Knight formed the view that unless the applicant had a proper reason for sending confidential information to his Gmail address, his conduct would amount to serious misconduct, warranting dismissal. Due to the Company’s closedown, Mr Wellington met with the applicant on the first day back in 2017 (3 January 2017). Mr Knight was himself on annual leave until 22 January 2017. He understood that the applicant was dismissed on 5 January 2017.

[15] Mr Knight was later informed by Mr Chattaway that after the applicant’s dismissal, the respondent discovered he had been operating a personal business which hires out Variable Message Signs (VMS). Mr Knight believed this to be a clear conflict of interest in that:

(a) the respondent seeks to encourage customers to purchase, rather than rent (hire) VMSs;
(b) the respondent had dealings with customers considering renting VMSs, in order to encourage them to purchase them; and
(c) the applicant could have encouraged a customer, unsure of purchasing a VMS, to hire it directly from his personal business.

[16] In cross examination, Mr Knight acknowledged that Artcraft does not currently lease or hire out VMSs.

[17] Mr Knight was asked about his knowledge of the Coates contract for around 200 automated signs which had been won by the respondent. While Mr Knight did not know the details, he believed from discussions with other persons, that the applicant had not been responsible for securing the Coates contract.

[18] Mr Knight did have a conversation with the applicant about his claim to a commission of 3 per cent of the value of the Coates contract. He agreed Mr Alverson was upset about not receiving the commission. While the Company rejected the applicant’s claim, it offered him a fee (the applicant described it as a ‘spotter’s’ fee) in recognition of his part in the Coates relationship. Mr Knight understood the applicant did have some conversations with Coates about the sale, but he did not make the sale. Coates had asked the applicant for a quote. Mr Knight conceded that this is typically what happens when salespersons seek out contracts. Mr Knight agreed the contract was significant, as each sign was worth about $20,000.00.

[19] Mr Knight’s evidence was that the product ultimately purchased by Coates was different to that for which Coates had originally been quoted for (by Mr Alverson). Mr Knight explained the difference. The contracted product was a Ver-Mac VMS trailer, manufactured by a Canadian company, rather than alternative Chinese product, originally quoted for, which Artcraft usually supplied. Coates had a preference for the Canadian product. Artcraft became the Australian distributor for the Canadian trailer after negotiations between Artcraft and Ver-Mac. These negotiations had commenced some three to four months before Mr Alverson had even been employed.

[20] Mr Knight agreed that Mr Alverson had been talking to Coates and he was not warned away from Coates. Nevertheless, it was Mr Knight’s view that Mr Alverson was not entitled to commission, because the product was not the same one originally quoted for, notwithstanding it was for the same number (200) of VMS trailers.

[21] During Mr Knight’s cross examination, he was shown two quotation documents, one from ITS (a related entity) and another from Artcraft. They both include in the header, a reference to the initials, ‘RA’ (Ray Alverson), as the salesperson. One quote was for the Chinese product (Artcraft). Mr Knight agreed the second quote was for the Canadian product. Mr Knight qualified his answers by indicating he had not seen the documents before and he was not responsible for ITS (Mr Wellington is). Nevertheless, he accepted the quotes were genuine.

[22] When shown the applicant’s evidence dealing with what he said in the meeting about the commission, Mr Knight conceded that the comment attributed to him (‘we’re not going to be paying you the commission, however, we will think about paying you a ‘spotter’s’ fee) was ‘something like that’. He could not recall the specifics. Mr Knight confirmed that Artcraft had been talking to Coates about the Ver-Mac product before the applicant was engaged. Mr Knight conceded that if Mr Alverson had been directly involved in the sale, he may have been entitled to commission; but he had not been directly involved.

[23] In a question from me, Mr Knight said that the commission of around $80,000.00 was not paid to anyone. The ‘spotter’s’ fee proposed in general discussions with the applicant was to be around $5,000.00. Mr Knight agreed the Coates contract was large, but not the largest Artcraft had secured, which was $12m for signs supplied to Queensland Main Roads.

[24] Mr Santucci objected to further questions about the Coates commission on the basis that the issue was irrelevant to the reasons for dismissal and the respondent had been ‘ambushed’ by this line of questioning. As to the ‘ambush’ claim, it is obvious from the F2 application that the respondent was clearly on notice that this issue was being claimed as the reason for his dismissal.

[25] As to the reason for the applicant’s dismissal (see: para [2] above), Mr Knight acknowledged that:

• Mr Alverson was entitled to access the confidential information;

• Mr Alverson could do so from home, using the remote login;

• the software can be accessed from anyone’s computer if they know the IP address and security access password;

• access could occur offsite when required;

• salespersons are not expected to be in the office all of the time, because they are expected to be chasing contracts;

• the information is a necessary ‘tool of the trade’;

• salespersons need the information in the Quote Register and the spreadsheet when quoting for contracts; and

• in respect to losing Mr Piggott’s custom, Mr Alverson could have had a role in getting his business back.

[26] Nevertheless, Mr Knight’s evidence was that the issue was not that the applicant had access to the information, but that he had copied it into his personal email account, without authority. However, Mr Knight conceded that there may be occasions where a salesperson cannot access the internet. Mr Knight acknowledged the Company had initially installed software on the applicant’s computer (Team Viewer) when he first commenced employment in order for him to access his computer while waiting for the Company’s computer to be supplied to him. Mr Alverson had offered to use his own computer for the short term with the respondent’s agreement. He was not sure if Team Viewer had been subsequently removed from the applicant’s computer, as he was not responsible for the IT part of the business.

[27] In re examination, Mr Knight said it was his understanding it was Mr Grey who had prepared a quote for Coates for the Ver-Mac trailers. Mr Knight explained that in January 2016, Artcraft was discussing with Ver-Mac replacing its distributor for Ver-Mac products in Australia, from its then distributor, Aldridge Traffic. As to the applicant’s involvement in the Coates contract, Mr Knight understood Mr Alverson had a number of conversations with Coates for the Chinese product which was quoted for on Artcraft letterhead. He agreed that Mr Alverson was working on building the relationship with Coates.

Mr Rod Wellington

[28] Mr Wellington’s evidence is broadly consistent with Mr Knight’s evidence in respect to:

• the email received from Mr Flexman; and

• his conversations with Mr Knight on 21 and 22 December 2016 and the concerns expressed by both of them in respect to the applicant’s conduct.

[29] Around the annual close down in 2016, Mr Wellington conducted a review of the applicant’s emails and established that confidential information had been sent from the Company email address to his personal email account. Mr Wellington said that each of the documents is highly sensitive and confidential. They contain key information such as:

• the names of all past, present, and potential customers of Artcraft;

• all quote details, including the quote values, whether a quote was agreed to by the customer and profit margins; and

• comments on sales strategies.

[30] Together with Mr Chataway, Mr Wellington met with the applicant on 3 January 2017. The applicant was offered a support person, but he wanted a lawyer to be present. This was refused, as a support person is not an advocate. When he questioned the applicant as to why he sent confidential information to his personal email address, the applicant replied ‘It’s part of my job to sometimes work out of the office. It’s the same as taking a printed copy home so I didn’t see any problem’. Mr Wellington responded by indicating that this was a very serious breach and constitutes serious misconduct. He offered him a further opportunity to respond and proposed meeting again at 2pm that day. He provided the applicant with a ‘show cause’ letter dated that day. Mr Alverson said he was ‘going to seek legal advice’. The meeting did not proceed at 2pm, as the applicant rang to say he was unwell and was seeking medical advice.

[31] It was Mr Wellington’s evidence that on 5 January 2017, Mr Chataway rang him to say he had met with the applicant, who explained he had sent the documents home because he has poor eyesight and he could view them on his larger computer screens. He maintained he had done nothing wrong. Mr Wellington advised Mr Chataway to proceed with dismissal as the applicant’s explanation was not ‘suitable’.

[32] Mr Wellington outlined the reasons for the termination of the applicant’s employment for serious misconduct as follows:

(a) The extremely sensitive and confidential nature of the documents the applicant sent to his personal email account, particularly the Sydney Quote Register;

(b) The applicant could have accessed the information either from his company laptop or his home computer, by logging in to the Company IT portal; and

Considering these factors, he formed the view that:

(a) The applicant sent the confidential information for an improper purpose that could harm the respondent;

(b) The applicant’s conduct amounted to a significant breach of his employment contract, particularly cl 11 in relation to the respondent’s confidential information;

[33] Mr Wellington then set out his views of the information subsequently advised to him that the applicant was operating his own business hiring out VMSs.

(a) The applicant was employed as Business Development Manager and was specifically tasked with developing Artcraft’s intelligent traffic systems business, which included trailer mounted VMSs;

(b) The applicant was required to secure sales to a wide group of customers including, amongst others, hire companies, local councils, Roads and Maritime Services, civil construction companies and retailers;

(c) A key reason for customers to switch from hiring to purchasing VMS trailers was cost savings, especially if on long term hire;

(d) Potential customers, presently hiring from a third party, would give the applicant an opportunity to present a hire deal from him; and

(e) Furthermore, the applicant could persuade customers, considering purchasing a VMS trailer, to hire one from him.

Given these factors, Mr Wellington said the applicant had breached cl 2.2 of his employment contract, which prohibited him from:

(a) acting in conflict with the interests of the respondent, or being placed in a position of perceived conflict with the interests of the business during his employment with the respondent; and

(b) being engaged by any other business, and in particular a competing business to Artcraft, during his employment, without the Company’s written consent.

[34] In cross examination, Mr Wellington was asked about the contract with Coates for 152 Ver-Mac trailers, at a quote cost of around $18,000.00 per unit. This was a significant sale for the Company. It was Mr Wellington’s evidence that Mr Alverson had no involvement in securing that contract. He understood that Mr Alverson’s only involvement was a conversation at a trade show with a representative of Coates in early 2016 who mentioned that Coates was looking to buy some VMS trailers. Mr Alverson put a quotation together for Artcraft branded trailers, which were sourced from China; not Ver-Mac trailers. In the end, the Chinese trailer was not compatible with Coates’ existing fleet. Coates had been dealing with another distributor (Aldridge) of Ver-Mac trailers from Canada. However, he understood that the relationship had deteriorated to a point where Coates did not want to continue its arrangements with Aldridge. Artcraft took advantage of this situation and he and Mr Grey met with Ver-Mac representatives when they were in Australia. As a result, and after two or three months, Ver-Mac cut ties with Aldridge and engaged Artcraft as their representative in Australia. Mr Alverson had no involvement in any of these conversations and negotiations.

[35] Mr Wellington emphatically denied Mr Alverson was dismissed when the Company realised he was entitled to a large commission. He was never entitled to any commission. Mr Wellington was shown the quotation which disclosed the applicant’s initials (RA) on the document. His initials in the quote did not mean he was involved with the contract. Although the applicant had followed up the trade show contact, this was a long way from securing an order. Mr Wellington said that Artcraft did not have an automatic right to bring Ver-Mac trailers into Australia. This was a result of the negotiations with Ver-Mac. At the time of the trade show, Artcraft did not have the right to sell the Ver-Mac units. Mr Wellington said it was the usual practice to put sales under ITS. Had Mr Alverson been entitled to commission, it did not matter that the contract was under the ITS banner.

[36] Mr Wellington claimed he had never seen any email between Coates and Mr Alverson; although he had made no inquiries about whether any existed. Mr Wellington stated that Mr Alverson’s involvement with Coates ended at the purchase order point. He agreed that at that point, it was not Mr Alverson’s fault that the Company did not have the right to bring Ver-Mac units into the country. Mr Wellington was unaware of whether Mr Alverson and Mr Scott Reed were discussing with Coates their preference for the electronic signage. (Mr Vassili made a call for the emails demonstrating these discussions. Mr Santucci objected on the basis of relevance and that such a call should have been made much earlier).

[37] Mr Wellington gave evidence that the Company was first alerted to Mr Alverson’s conduct when he engaged a third party to do installation work in preference to the Company’s own in house provider, Streets Ahead Maintenance (SAM). Mr Wellington conceded there was no written policy about this, but it was a well known policy which had been communicated to all five Branch Managers (although he could not recall seeing this communication). In any event, if a third party provider was proposed, Management approval was necessary. No such approval was given. Again, there is no written policy in this respect, but it is an accepted principle. Mr Wellington said that Mr Chataway would be best placed to answer questions about SAM. Nevertheless, he understood that any fixed signage work was performed by SAM as a sub contractor and no other third party is engaged for this work. Mr Wellington believed he would have been advised if third parties had been engaged.

[38] Mr Wellington agreed that part of Mr Alverson’s role was to secure new work and old work lost by the Company, including the custom of Mr Piggott. It was expected that Mr Alverson would try and win back Mr Piggott’s work. In performing this part of his role, Mr Alverson was perfectly entitled to have access to the confidential information in Mr Piggott’s price list. Mr Wellington agreed there was no problem with Mr Alverson accessing confidential information remotely (if on the road), but if internet access was unavailable, he would need to come into the office. He may also require access to company pricing and quoting templates, as well as the Quote Register.

[39] Nevertheless, Mr Wellington considered it was a fundamental breach of policy for Mr Alverson to have sent confidential information to his personal email, rather than accessing it using his Company password and username. While the policy was not in evidence, Mr Wellington believed Mr Alverson was aware of the policy and had signed off on it. Mr Wellington rejected questioning that he had other reasons to dismiss Mr Alverson, primarily that he was ‘agitating’ to be paid commission for the Coates contract. He denied looking for any convenient reason to dismiss him.

[40] Mr Wellington claimed he had no knowledge of the applicant’s claim to have had sight problems. If this was the case, he could have plugged the Company laptop into his larger screen at home, rather than his own laptop and personal email. When asked to delete the information, Mr Alverson would give no undertaking as to having done so. Mr Wellington believed the applicant’s conduct constituted a pattern of unacceptable behaviour.

[41] Mr Wellington further explained how it was that Mr Alverson’s initials appeared in the Ver-Mac quote for Coates. He said the system requires an account to be created with a salesperson’s code. This code remains on any subsequent quotes for the same customer. It cannot be changed. So ‘RA’ was put in the initial document and has remained there ever since. Mr Vassili put to Mr Wellington that this evidence was untrue, which he denied.

[42] Mr Wellington reaffirmed his statement evidence concerning his meeting with the applicant on 3 January 2017 and his understanding of Mr Chataway’s meeting of 5 January. However, Mr Wellington denied using the word ‘malicious’ acts in respect to the applicant’s conduct, as it was not a word he would ordinarily use.

[43] Mr Wellington said he could not ask the applicant about his competing business, because he had heard about it post the applicant’s dismissal. Even if it was not a direct conflict of interest, it would raise questions as to whether he was diverting his energies to his own business. It was a possibility Mr Alverson might suggest to a customer to hire a sign from him, rather than purchasing it from Artcraft. Mr Wellington conceded Artcraft does not hire out equipment or machines, but it had been a consideration in the past. Mr Wellington agreed Artcraft does not have certification for traffic control or road management. This is where SAM comes in.

[44] In answer to questions from me, Mr Wellington claimed that the industry is ‘very incestuous’; long term people are well known to each other and form particular relationships; people move about in the industry; it is not unknown for people to work together against one company’s interests. The first email from Mr Flexman identified this problem as persons known to Mr Alverson had been engaged for installation work and there was a suspicion Mr Alverson was ready to commence his own installation business.

[45] In re examination, Mr Wellington explained Mr Grey’s experience and involvement in securing the Ver-Mac units. Without his involvement, Artcraft would never have secured the Ver-Mac agency arrangement in Australia. Mr Grey did not receive any commission, because his high management level remuneration is not structured to include commission.

[46] It was Mr Wellington’s belief that Mr Alverson’s conduct was in breach of the Company’s IT policy and his contract of employment.

Mr Russell Chataway

[47] Mr Chataway gave direct evidence of his meeting with Mr Alverson on 22 December 2016. He asked the applicant whether he received a quote from SAM in relation to the A & L Florist job and what was his relationship to MBA Installations and Maintenance. Mr Alverson replied that he had received a higher quote from SAM; that he was friends with the two owners of MBA and had introduced them to SAM for potential work around the School Zone Project. Mr Chataway then questioned him about taking electronic or hard copies of sensitive Artcraft information and if so, what information? Mr Alverson responded that he took his laptop on the road and home to complete the work. He took customer quotes, planned customer visits and follow ups with customers. He added ‘why are you asking?’. Mr Chataway said he would let him know.

[48] Mr Chataway attended the 3 January 2017 meeting with Mr Wellington and the applicant. His evidence of the conversation is not put in issue and accords with Mr Wellington’s version of the meeting; see: para [30] above. The applicant went home unwell that day and did not return until 5 January 2017. Mr Chataway met Mr Alverson around 9am that day and asked if he had anything further to add. He replied:

‘As I said, I need those documents so I can work from home. I also need to work on my home computer due to my eyesight. The large screen helps.’

Mr Chataway said that this was the first time Mr Alverson raised his poor eyesight as an explanation. Mr Chataway conveyed this information to Mr Wellington, who did not accept the explanation. Mr Wellington instructed him to proceed with the termination of the applicant’s employment.

[49] Mr Chataway met the applicant again at 9.50am. He gave him a termination letter, explained its contents and advised that he was entitled to seek legal advice. Mr Chataway also requested the applicant sign a statutory declaration deposing that he had returned or destroyed all confidential Artcraft information in his possession. He did not sign the statutory declaration then, or at all.

[50] Mr Chataway drove the applicant home because his Company provided vehicle was to be returned to the respondent. Mr Chataway said that when they reached the applicant’s home, he noticed a VMS unit in the driveway. The applicant said:

‘That VMS sign in the drive is mine, I am repairing it. I have my own business where I rent a number of these out.’

Mr Chataway said he found it ‘interesting’ that Mr Alverson was running a personal business renting VMSs when Artcraft sold these units. As he believed this was a clear conflict of interest, he informed Mr Wellington when he returned to the office.

[51] In cross examination, Mr Chataway said that he commenced employment as the Branch Manager on 12 September 2016 and was the applicant’s direct Supervisor. He is now Project Supervisor. He agreed he had a close working relationship with Mr Alverson.

[52] Mr Chataway was aware Mr Alverson was agitating for his commission for the Coates contract around September 2016. Mr Knight told him that the Company might offer him a ‘spotter’s’ fee, but he was not entitled to commission for the Coates contract. It was Mr Chataway’s evidence that the applicant had no input into securing the contract. He agreed the applicant was sending out emails to Coates before he had commenced as his Supervisor and had been copied into some of them later. He acknowledged Mr Alverson had a number of communications with Coates as Business Development Manager.

[53] Mr Chataway said he had referred the issue of commission to Mr Knight and did not make any inquiries himself. Mr Chataway understood that initially Mr Alverson and Mr Reid had attended a trade show at Penrith and had conversations with a number of persons from Coates. From this, there was a request for a quote. Mr Chataway agreed Mr Alverson’s initials were written on the top of the quote. However, Mr Chataway understood that the documents which ‘drive commission, would be invoiced and (are) not quotations’. However, Mr Chataway could give no specific details.

[54] Mr Chataway said he and Mr Alverson had numerous conversations around the installation of static signs. However, neither ITS or Artcraft have certification for traffic management. Mr Chataway agreed that, from time to time, installations were done by other companies, rather than SAM. However, he was only aware of one occasion - the A & L Florist job, which Mr Flexman had complained about. Mr Chataway was involved in this with Mr Alverson at the time. He agreed Mr Alverson was not told he could not source from a third party. The choice of a third party related to price and traffic control. Mr Chataway did not believe Mr Alverson had breached Company policy, because he was not aware of the policy which barred this practice. He later became aware that SAM was the supplier of choice for Artcraft.

[55] As to accessing confidential information, Mr Chataway believed if the computer connection stops, you stop work. Nevertheless, he agreed that access 100 per cent of the time was not a reality. Mr Chataway acknowledged that he and Mr Alverson were responsible for trying to get Mr Piggott’s account back. To do so, Mr Alverson needed the Piggott costing and have it in electronic form. Mr Chataway also agreed Mr Alverson needed the customer price list. Mr Chataway said he did not save files on a backup, or anything other than his Artcraft email address.

[56] Mr Chataway understood Mr Alverson had an elaborate home computer system with multiple screens, because he was a ‘gamer’. Mr Chataway had no reason to disbelieve Mr Alverson when he told him he had easier access at home. Mr Chataway had seen Mr Alverson using glasses from time to time, but as far as he was aware he had not raised any issues with his eyesight. Mr Chataway understood Mr Alverson had initially used his own computer, but had later received an Artcraft computer. Mr Chataway was unaware of any other employee who used their private computers for business purposes.

[57] As to the drive to Mr Alverson’s home on 5 January 2017, Mr Chataway said Mr Alverson was unhappy, but not distraught. The conversation was mostly about Mr Chataway asking directions to Mr Alverson’s home.

[58] Mr Chataway did not believe the applicant’s agitation for his commission was a factor in his dismissal. It certainly did not cross his mind. Mr Chataway said that it would have been a different matter if Mr Alverson had a printed copy of the confidential documents, rather than sending them to his personal email account.

Mr Douglas Grey

[59] Mr Grey’s duties as ITS Division Manager, include products and sales management, day to day management of the ITS businesses and management of customer relationships. He is based in Queensland. Mr Grey deposed that since around 2003 (and prior to his employment with Artcraft) he has had a close, long standing relationship with Ver-Mac and its company directors. He is very familiar with Ver-Mac products. Mr Grey said that up until September 2016, Coates Hire had sourced electronic traffic equipment through Aldridge Electrical Industries (‘Aldridge’) as the Australian distributor for Ver-Mac. Aldridge is a direct competitor to Artcraft.

[60] Mr Grey’s evidence dealt with his meetings around 8 March 2016, with Ms Sandra Richardson, Owner/Co President of Ver-Mac, to discuss the potential for Artcraft to take over Ver-Mac’s distribution agency in Australia and therefore Aldridge’s relationship with Coates Hire. At this meeting, he was accompanied by Mr Wellington and Mr Knight. This was followed up by ongoing dealings with Ver-Mac between April and September 2016 by phone and email. Shortly after 6 September 2016, Mr Grey had a conversation with David Fraser, Coates’s Procurement Management to discuss the potential for Coates to change their Ver-Mac supplier and to discuss pricing and product configuration. Mr Grey deposed that on or around 8 September 2016, he sent an email to Mr Reed, NSW Manager providing a quote for 200 Ver-Mac signs and a draft letter to Coates, which he had prepared. Mr Grey said that although addressed from the applicant, they were drafted by him from a standard template. Mr Grey explained how Mr Alverson’s name came to be on the quote:

‘In my experience, it is common practice at Artcraft to allocate customers to field sales people, usually determined by sales territory. I understand the reason for this is that it helps to filter customer accounts. This is done in our accounting/sales software called Accpac. At the time I generated the quote I thought it was best to use the Artcraft name on the quote document and cover letter and not confuse Coates Hire with the [ITS] division. From what I understood, Coates Hire generally knew the Artcraft name well and I knew Artcraft definitely had a national presence which was an attribute that I believe attracted Coates Hire to Artcraft. At the time Ray Alverson was listed as the default account manager on the Coates Hire account in the Artcraft Accpac system.’

[61] Mr Grey’s evidence was that all quotes sent by Artcraft typically conform to a standard format. While he had prepared all the aforementioned quotes, Mr Alverson’s initials appear on each one. This arises from Artcraft’s systems, which automatically assign a default account manager to each client. In his position as ITS Manager, Mr Grey is not assigned clients for this purpose.

[62] It was Mr Grey’s evidence that around 8 September 2016, Mr Reed sent a copy of the quote to Mr Fraser at Coates, but did not send the draft letter referred to above and this letter was never sent. Mr Grey claimed he had further phone and email discussions with Mr Fraser between 8 and 15 September 2016 and around 15 September, he sent a revised quote he had prepared, with included additional details requested by Mr Fraser. Further communications between Mr Grey and Mr Fraser continued between 16 and 20 September 2016. On 21 September, Mr Grey sent an updated quote to Mr Fraser which was the same as the 20 September quote, but on ITS letterhead. After further discussion, a revised quote Mr Grey prepared was sent to Coates on 27 September 2016. Around 30 September 2016, Coates advised its acceptance of the quote and provided a purchase order. Copies of all these quotes and communications were annexed to Mr Grey’s statement.

[63] Mr Grey was aware Mr Alverson had separate dealings with Coates from time to time. On 4 October 2016, Mr Grey sent the following email to Mr Knight:

‘Hey. Ray’s enthusiasm is good I guess but I kind a feel like he’s jumping all over Coates and Ver-Mac when I told him not to jump into Ver-Mac at all. Coates is one thing if they are an account but I’m not wanting anyone to jump the gun here on Ver-Mac. I need to do this right and there is a lot to do before I release anything.’

[64] The same day, Mr Grey sent an email to all Branches announcing the Ver-Mac deal with Coates. The email also said:

‘As far as Artcraft potentially selling the Ver-Mac product range, this is something I will work on over the next 3 or so months and will officially make a decision on how we go about it and expect that I will release something in the New Year.

With regards to Artcraft supporting the Coates Hire for their existing flee now that Aldridge Electrical Industries has been cut off, Coates Hire Head office sent out the below communication all branch managers 3 weeks ago.

Coates Branches have been told to contact me.

Please tell any Coates people to contact me as per below. Everything will be running through Brisbane until all the details are finalised and possible for a while longer.

Final pricing schedules for Ver-Mac parts etc. will be submitted to Coates purchase department within the next week or so.’ (my emphasis)

[65] The next day, Mr Knight sent the following email to Mr Chataway:

‘Morning Russell,

Can you please explain to Ray that the Vermac product is not part of his product range as of yet and should not be offered to any client.

Doug has been very clear on this, he will not release the product until the full structure is in place and the Coates arrangement is setup correctly and working.

Ray can call on Coates but is not to get involved in the Vermac product. He can offer anything else (Evolis, signs, cones etc etc).

Coates have clearly communicated internally that the only contact for the vermac range is Doug. We cannot risk the account by doubling up or conflicting information.

If you need any further clarification on Vermac then please call Doug.’

[66] Mr Grey understood that Coates had only purchased Ver-Mac VMSs pursuant to the quotes he had prepared, and not any portable VMSs for which Mr Alverson had quoted. Despite his involvement, Mr Grey did not receive any commission for the Coates contract (or any other) because his senior management position did not include such an arrangement.

[67] In further evidence in chief, Mr Grey was shown the two quotes dated 27 July 2016 and 15 September 2016 on the letterhead of Artcraft and ITS respectively and both with the initial ‘RA’ recorded. Mr Grey said the first quote was not proceeded with. The second quote for the Ver-Mac VMSs was prepared by him. There is no code because the system had not provided for it. This was the beginning of the chain of quotes he had prepared; see: para [62] above. One of the changes involved a battery charger model. All of the discussions Mr Grey had with Coates were with Mr Fraser and Mr Knight. Mr Alverson was not involved.

[68] In cross examination, Mr Grey agreed he had been responsible for sourcing the Chinese VMS for Artcraft. It is the role of the salespersons (three in New South Wales) to sell these units, and other Artcraft products. Mr Grey agreed that Mr Alverson had been employed to develop sales for Artcraft, and that the only impediment to him selling Ver-Mac units was that, at that stage (around March/April 2016), Artcraft did not have the Ver-Mac distribution rights. Mr Grey conceded that if Artcraft had the rights at this time, he would not have objected to him securing any Ver-Mac sale.

[69] Mr Grey agreed that in the first half of 2016, Artcraft’s NSW Division was not performing well. He understood Mr Alverson was employed in March 2016 for the purpose of developing new business. Mr Grey said he was not aware of the practice of how commissions were awarded in NSW. In any event, he believed that no sales persons received commissions. Mr Grey understood that Mr Alverson and Mr Reed had attended a trade show in early 2016, because he received a communication from the Sydney division about a prospective sale of some significance. At that point, the only sale in New South Wales was for 20 VMSs and this sale had problems when one of the units caught fire. Mr Grey was asked about a Chinese VMS delivered to Coates in 2016 for a demonstration he conducted. There was some issues with this unit. Mr Grey agreed that the Ver-Mac units are more reliable than its Chinese counterpart.

[70] Mr Grey was shown an email (DG16) in which he expressed frustration with Mr Alverson’s dealing with Coates after the order had been secured. Mr Grey said he was dealing directly with the client - he did not ‘steal’ the sale from Mr Alverson. Mr Grey stated that he secured the product and the sale (to Coates). He had worked with the client, organised the product to be reconfigured and designed, and did all the hard work to get the right price at the configuration Coates required. Mr Grey said that he had no reason to cut Mr Alverson out of the sale, because even up until late in 2016, he had not known that commission was involved. He believed he was the best person tasked to deal with Ver-Mac product and getting the sale across the line. Coates was attracted to Artcraft after Ver-Mac told him that Coates was unhappy with Aldridge. He took this up as an opportunity for Artcraft, as Coates already had Ver-Mac units in their fleet.

[71] It was Mr Grey’s evidence that he was unaware if Mr Alverson had said he had an opportunity to sell the Ver-Mac trailers in September 2016. Mr Grey confirmed that he was not asked to comment on Mr Alverson’s involvement. However, he did not believe Mr Alverson had been involved at all. Mr Grey had in fact instructed him not to get involved in ‘doubling up’ by talking to Coates. Mr Grey told him he was free to deal with Coates on any other sale, but to stay out of the Ver-Mac contract. Mr Grey insisted that the Ver-Mac opportunity came from Coates approaching him. He denied that Mr Alverson and Mr Reed had done all the preliminary work. It was only up to the time Coates had contacted him, that the Ver-Mac contract materialised. Up to this point (6 September), he understood Coates might go direct to Ver-Mac. After this point, Mr Grey said he had not wanted to cut Mr Alverson out. It was just that he (Mr Grey) was the best person for the job.

[72] Mr Grey was closely questioned as to the source of the documents he attached to his statement. Some originated from his Outlook account; others from his sync file, his calendar or from archives. Mr Grey said that he had wanted to control the release of other Ver-Mac units after the Coates sale in October 2016. However, he agreed he did not tell this to Mr Alverson, despite Mr Alverson telling him he had an opportunity to quote on the Ver-Mac or the Chinese product. Mr Grey said that because he was 100 per cent occupied from September through to October (2016) dealing with Coates, there was no way he could have prepared a general product release. He had planned to do so in the New Year.

[73] Mr Grey said that when he said he was aware that Mr Alverson had separate dealings with Coates from time to time, he assumed that he had been in touch with Coates throughout his career and at Artcraft.

[74] Mr Grey acknowledged that he had considered Mr Alverson to be a ‘nuisance’, as he was interfering with his progress to roll out the product. Mr Grey insisted he had prepared and provided the quotes for the Ver-Mac product - not Mr Alverson.

Mr Scott Reed

[75] Mr Reed gave oral evidence in response to an F51 Notice. Mr Reed was the NSW Branch Manager between September 2015 and September 2016. He had employed Mr Alverson as Artcraft’s Business Development Management in March 2016. Mr Alverson had been hired to grow the business, as he had had experience in the industry and with other competitors.

[76] Mr Reed had attended the trade show with Mr Alverson in March 2016. Mr Alverson had introduced him to Mr Lancaster from Coates. Mr Lancaster had made comments that Coates was in the market for 200 VMS units. While the discussion was ‘pretty short and sweet’, he was excited about the prospect of such a large sale for the NSW Branch and communicated this to Mr Knight and Mr Grey. Mr Reed claimed that from that point, Mr Alverson virtually ‘lived at Coates’; ‘he was probably there at least twice a week’. At this point, the discussion was about the Chinese product. Mr Alverson arranged to have a test unit sent to Coates at Prospect. It remained there for a month, during which time Coates trialled and tested it. After a couple of months of negotiating with Mr Fraser, Mr Alverson organised a meeting and presentation in July 2016 around the software, as the hardware issues had been largely resolved. Mr Grey attended as he was more attuned to software. Mr Reed believed Coates was disappointed with the service provided by the current supplier. Artcraft was a national business, with operations in every state and 150 employees. It knew all about traffic control equipment, and even designed reflective tape with Coates’ insignia to rebrand all their trucks.

[77] Around late July or early August, it became known that Coates was not going to order the Chinese product. It would stick with Ver-Mac. Mr Reed suggested that Mr Grey’s relationship and prior dealings with Ver-Mac would be advantageous in Coates using Artcraft as its Australian distributor. This was because Ver-Mac preferred going through a distributor, rather than selling their product direct to customers. Mr Reed believed that being the Ver-Mac distributor would be very beneficial to Artcraft, because its Chinese product was seen to be inferior.

[78] It was Mr Reed’s evidence that during August 2016, he had provided multiple pricings to Coates for the Ver-Mac units, which had been given to him by Mr Grey. Mr Reed was involved because he was very familiar with how the Chinese VMS Units were delivered and assembled and the labour costs involved. Mr Alverson had relayed to him what Coates’ requirements were for items such as radars, spare wheels and other accessories.

[79] Mr Reed agreed he had been responsible for approving commissions to salespersons. He claimed that had he been there at the time (October 2016), he would have allocated commission for the Ver-Mac sales to Mr Alverson, because he was the ‘conduit between the product and the customer’. Had they not been at the trade show, there would have been no discussion with the Coates representative Mr Alverson knew. He later spent at least two days a week at Coates pursuing the potential for a sale. Mr Reed believed that Mr Grey’s involvement was from a technical point of view, because of his prior knowledge of the Ver-Mac product and how it would work operationally. He was to look after the product ‘down the track’. Mr Reed’s evidence was that Coates was allocated to Mr Alverson as a client, because up to that point Artcraft had not said anything to Coates.

[80] It was Mr Reed’s evidence that when he and the applicant gave a presentation to Coates in July 2016, Mr Grey was impressed with their salesmanship and control of the room. This was said to him, but not directly to Mr Alverson. Mr Reed believed that while Mr Grey had raised a concern about the applicant’s lack of technical prowess, he was employed as a salesperson, not a technician.

[81] Mr Reed said that when Mr Alverson was initially engaged, he had told him that he owned a VMS unit, which he rented out ‘for a bit of pocket money’. Mr Reed did not have an issue with this, because Artcraft is not in the hire business. He never told him not to hire out his VMS unit and did not know whether he ever did.

[82] Mr Reed understood that Mr Alverson had not been provided with a Company computer for the first six weeks after commencing employment. Mr Alverson had arranged with IT to have his personal computer able to receive Company documents and emails. Mr Reed was unaware of any restrictions on the applicant’s computer access. Mr Reed understood a number of salespersons sent price lists through their personal email. One of the other salespersons would email to her home computer, because it was faster and more effective than the Company system. He was unaware of any Company policy preventing this practice.

[83] Mr Reed confirmed that in respect to installations, such as speed humps or static signs, these were contracted out to a related business (SAM) as the preferred option. However, there were occasions when other companies had quoted for, and obtained such work, largely because the SAM quote was too expensive. This was not a breach of policy. In fact, Mr Knight had encouraged him to get a better price, so long as SAM had ‘first crack at it’.

[84] Mr Reed said he did not leave the respondent’s employ (in September 2016) on ‘bad terms’. Mr Grey actually offered him his job back five days after he resigned. At this point, the Coates deal had become ‘live’ and he assumed he was offered his job back to manage the business and grow the Ver-Mac product. Mr Reed understood the applicant had applied for the State Manager’s role and while he had supported him, he had been unsuccessful.

[85] It was Mr Reed’s evidence that he regarded Mr Alverson as a work colleague, with a nice personality. However, he had no ‘axe to grind’ (no claims against Artcraft) and simply wanted to give his evidence under a notice to do so, because he was not on ‘anybody’s side’.

[86] In response to questions from Mr Santucci, Mr Reed accepted he did not know Ms Richardson was the owner and co-president of Ver-Mac and obviously had no dealings with her. Nor did Mr Alverson, as far as he was aware. Mr Reed said he had not known of the meeting Mr Grey, Mr Wellington and Mr Knight had with Ms Richardson on 8 March 2016 (which was before the applicant commenced employment).

[87] However, Mr Reed knew that:

(a) Coates had previously purchased Ver-Mac units through Aldridge;

(b) Artcraft could not sell Ver-Mac units, if it was not the distributor;

(d) Coates never brought the Chinese product.

Mr Reed accepted that Mr Grey had been speaking to Mr Fraser (of Coates) about the Ver-Mac product and Mr Grey had told him (Mr Reed) to send the quote he had prepared to Mr Fraser. He agreed that the quote (132119) had an attached email which said ‘if you need to discuss this further please contact myself [Mr Reed] or Doug at your convenience’. He accepted it did not mention the applicant. Mr Reed agreed that he and Mr Grey were the primary contacts in respect to the quote.

[88] Mr Reed confirmed he was responsible for ‘signing off’ on commissions, but although Mr Alverson was the only person under his control who was on commission, he had never received a commission during his employment. Mr Reed acknowledged that if a commission was to be paid, it would have required approval by somebody above him. As at 8 September 2016 (when he resigned) Mr Reed had not sought approval to pay Mr Alverson any commission.

[89] In showing Mr Reed cl 11 of Mr Alverson’s contract of employment; see para [3] above, he agreed that there was a reference to the use of confidential information. He agreed this would include Company price lists, the Quote Register and the Project Estimation Spreadsheet. Such information would be potentially useful to a rival competitor. The Company would want to control such information to avoid the risk. Mr Reed understood that if such information was sent to a personal email address, the Company would lose control of the information. Mr Reed said he did not tell Mr Alverson he could send confidential documents home to his personal email and Mr Alverson had not asked him if he could do so. Mr Reed also agreed that if printed copies of Company records were held by an employee, they should be returned, if the employee leaves the Company. Mr Reed accepted than an Excel spreadsheet is easier to use on a computer than a printout, but he never really used the spreadsheet personally. He could understand why Artcraft would be worried about information being sent to personal emails.

[90] Mr Reed was asked about cl 2.2 of Mr Alverson’s contract of employment which reads:

2.2 Conflict of interest and non-competition

You must devote your full time and attention to the business of Artcraft and act at all times in the best interests of Artcraft. Without limiting your duties to Artcraft, You must not:

(a) act in conflict with the interests of Artcraft, and must avoid being placed in a position of perceived conflict between your own interests and those of Artcraft.

(b) be Engaged in any other business or occupation without the prior written approval of Artcraft (which won’t be unreasonably withheld providing Artcraft is satisfied that they will not interfere with your duties); or

[91] Mr Reed agreed that Mr Alverson was not to act in conflict or perceived conflict with Artcraft’s interests and that he could not engage in any other business, without prior written approval. Mr Reed explained that he had only one conversation with Mr Alverson about his own VMS trailer. Mr Alverson spoke about his son trying to rent it out and he was helping his son to get a couple of them. When asked about his earlier evidence that Mr Alverson said he was just doing it for ‘pocket money’, he agreed that it was a business. Mr Alverson had never sought written consent to do so, although Mr Reed did not believe it constituted a conflict of interest. Notwithstanding this, he eventually conceded that at the time the applicant disclosed his practice of hiring out of a VMS unit/s to him, he should have insisted the applicant seek written approval from the Company to do so. He also conceded that should such a request have been made in writing, he would have sent it ‘up the chain’ for approval.

[92] In re examination, Mr Reed said Mr Alverson’s role had been to sell the product the Company had - not to organise suppliers - which was Mr Grey’s role. In respect to commissions, Mr Reed said that commissions are payable once a sale is completed and the order is placed. As he had left before the Coates deal became ‘live’, he could not have asked anyone higher for approval of the commission to Mr Alverson.

[93] In further cross examination, Mr Reed acknowledged that just because ‘RA’ was recorded on the quote, does not mean the person is entitled to the commission. He further explained that ‘Ray was the salesperson who was selling that product to Coates’.

Mr Raymond Alverson

[94] Mr Alverson is 54 years old and described himself as having no formal education. He has worked in sales for over 20 years. Although having only worked for Artcraft for about eight months, his job description included implementing sales strategies and meeting and exceeding sales targets. To do this, he claimed he would frequently perform work either from home, or out of his vehicle, including taking client calls 24/7. He could also use his technical abilities to assist clients when programming the VMS units.

[95] Mr Alverson gave evidence that shortly after commencing employment he had a conversation with Mr Reed about using his own laptop until the Company laptop was provided. He then spoke to a Company IT person who installed software called ‘Team Viewer’. This allowed remote access to his laptop. The IT person calibrated his Microsoft Outlook to enable access to the Artcraft's server and software called ‘Web Studio’. His computer was also set up so he could access the file server (‘T: Drive’) when travelling. This enabled him to access confidential documents. In mid June 2016, he was provided with a Company laptop, but the screen size was only around 14 inches. He did not like working from this device because he was ‘long sighted’.

[96] Mr Alverson did not dispute that he had sent the three confidential documents to his private email. However, he explained that:

(a) he understood that he was able to do so;

(b) he wanted to access the documents on his personal computer, which has a larger screen, making it easier to read;

(d) working from home was encouraged; and

(e) in respect to the Piggott price list, he said he had told Mr Chataway on 3 November 2016 that he would go to Piggott’s offices the next morning and try to win back their business. He wanted to review the material before doing so.

[97] It was Mr Alverson’s evidence that in September 2016, he had successfully negotiated the Coates contract – the largest sales contract Artcraft had ever secured. Mr Alverson said he was told by Mr Knight (in the presence of Mr Chataway) that the Company was not going to pay him commission, but they would think about paying him a ‘spotter’s’ fee. Mr Alverson rejected this as unacceptable. Mr Chataway later told him he could not help him (with the commission) as he was ‘just a contractor here’.

[98] Mr Alverson claimed that around 20-21 December 2016, he and Mr Chataway had a conversation regarding his performance review. He was told there was nothing he was doing badly, but he needed to improve his paperwork skills. On 22 December 2016, Mr Chataway raised the issue of Mr Flexman’s complaint and the quote for the A&L Florist job for which SAM had quoted $660 and MBA Installation had quoted $553, plus ongoing traffic control and management. He fronted Mr Chataway by indicating that when he had raised the matter with him, he (Mr Chataway) told him to go ahead with the lower quote. Mr Chataway asked him if he kept confidential information on his person, in his car or at home. He replied that of course he did, as he worked from home as part of his job. He asked Mr Chataway if there was a problem. Mr Chataway replied ‘No, I have just been asked to ask you’. About two hours later, Mr Chataway asked him to put his explanation in writing.

[99] The Company then closed for the Xmas break and he returned on 3 January 2017. Around 10:30am that day, he was called to the office for a meeting with Mr Chataway and Mr Wellington. Mr Wellington told him there were serious concerns regarding him sending confidential information to his private email. He was offered a support person, but when told the discussion was about his ‘malicious acts’, he requested his solicitor be present. This was refused. He was told a support person had to be someone from the Company. When questioned as to why he had sent three confidential documents to his personal email address, he replied:

‘I need those documents in my role. That includes when I am not in the office. It’s the same as taking a printed copy home, and I already have these documents at home on my personal laptop so I am not sure why that is a problem. I always need to double check the quote register as a Business Development Manager and do forward planning as part of my job. Everyone here does the same thing, and we all do it to try to keep ahead.’

[100] Mr Wellington said that Artcraft considered this to be a ‘very serious breach’ (of Company policy) and consideration was being given to terminating his employment. Mr Wellington directed him back at 2pm to provide his response. When Mr Alverson said he would be seeking legal advice, Mr Wellington replied ‘I have good lawyers, you are not to touch your computer, a telephone or speak to clients’. Mr Wellington handed him a show cause letter.

[101] Mr Alverson claimed that at the time, he was feeling overwhelmed, stressed and light headed due to the suddenness of the meeting and the seriousness of the allegations; he had been taken by surprise. Around midday, he attended a medical centre and was diagnosed with high blood pressure. He called the office and told someone he spoke to (who he could not recall) that he would not be returning to work that day and had been to the doctor.

[102] Mr Alverson returned to work on 5 January 2017 at around 8am. He went to see Mr Chataway after noticing that he could not access his email. Mr Chataway told him not to access his computer, phone or leave the building. At 9am, he had a meeting with Mr Chataway, who asked him if he wanted to offer anything ‘for consideration’. He claimed he needed to work on his home computer, because of his poor eyesight. As he has a large home computer screen, this helps. Mr Chataway asked if he wanted to provide written responses. He said no. Mr Chataway left the meeting and appeared angry. Mr Alverson said by this point, he was feeling unwell. Around 9.50am, Mr Chataway returned and said:

‘Sorry bud, but we are terminating your employment effective immediately.’

He handed him the termination of employment letter.

[103] In further examination in chief on 27 July 2017, Mr Alverson said that since his dismissal he had secured employment as full time Sales Manager with a company similar to Artcraft. However, that Company only sold VMS boards, and not all signage. This employment ceased around mid-June 2017, because he found he was under too much pressure. He was actively seeking work, but in a small industry, word gets around and he needed to prove his innocence in this case.

[104] Mr Alverson reaffirmed his evidence concerning when he offered to use his own computer when he commenced employment, until receiving the company computer. It was Mr Alverson’s further evidence that he had copied all work documents in his possession on a USB stick and handed it back to the respondent. Mr Alverson explained that although he was asked to return all of the respondent’s property at the time of his dismissal, he simply forgot about the electronic files in his possession. However, he had returned everything else.

[105] In cross examination, Mr Alverson acknowledged that he had an obligation not to engage in conduct which would be a conflict of interest with his employer – but he insisted he never did. While he understood that he was required to seek written consent before engaging in another business, he had received Mr Reed’s verbal permission to do so, as long as it was after hours and on weekends. In any event, Mr Reed’s approval predated his signing of the contract of employment. Mr Alverson said he could not recall exactly what Mr Chataway said when he drove him home after his dismissal because he was ‘pretty upset’ (as was Mr Chataway). He did not accept Mr Chataway’s version of their conversation. He did not tell him he had a number of VMS units, because he only had one, and it was in poor repair. He denied having a conflict of interest because Artcraft does not rent out signs; nor was there a perceived conflict of interest. Mr Santucci showed Mr Alverson a number of emails he had sent to Artcraft customers.

[106] Mr Alverson was shown an email from Mr Reed on 28 April 2016 which read:

‘Subject: VMS Lead

Ray, please find ADIS door automation and ask for Mark as he has asked the café for a price

Not sure what size but a good lead

Discuss rental lease option.’

Mr Alverson claimed that the reference to ‘rental/lease option’ concerned the customer borrowing money from a brokerage firm to buy the equipment, and then rent or lease it.

[107] A further email from the applicant of 28 April 2016 read:

‘Rental Option

We can offer you a equipment rental option via an operating lease that has several advantages, the least of which is having the ability to get the new equipment required for your business without the up-front cost (your capital), on structured monthly rental instalments over the desired term. We simply purchase the equipment you need and rent it to you for an agreed payment over a fixed term.

With an Operating Lease or rental you have the use of the equipment, without impacting on your working capital.

Lease Term: 36 months

Lease amount per week approximates: $120 + GST. To be confirmed on application.

At the end of the 26 month term you can continue to rent the item at the contractual rate, to up-grade, or simply return the equipment when the lease expires – it’s your choice.’

Mr Alverson explained that while the wording above was not ideal, it meant that Artcraft would put the customer in touch with a brokerage firm, which would give them the money that would be paid back, as a long term lease through that company and Artcraft would get paid in full, from the broking company. It was not a rental agreement. He denied this demonstrated an actual conflict of interest with his own business. Further emails using similar wording reflected the above arrangement. For example, in an email to Austral Bowling Club, Mr Alverson wrote:

‘You can buy them outright or lease them for about $100 a week.’

[108] It was Mr Alverson’s evidence that he was only doing what Mr Reed had trained him to do. He explained that this is a sale, because the broking firm owns the unit until it is paid off over four to five years. Artcraft had a buy back option depending on the condition of the unit at the end of the lease.

[109] On 20 May 2016, a further email records:

‘Hi Tom

Sorry to seem like I am hassling you but I just wanted to let you know we can now offer SALES, LEASE, and HIRE of our Electronic Traffic Equipment!

Cheers

Ray’

Mr Alverson conceded that the words used may have been wrong, because it was a leasing arrangement through a third party. However, it was not explained in full, so as not to scare the client off by describing it that way.

[110] When shown a further email, where he had written:

‘Hi Tony

I hope you are well…

How are the prices I submitted and will you be order [sic] soon as we have to build the units?

Did you know I can offer a hire option as well?

Can you give me a quick call to discuss please?

Also – I went to Rooty Hill RSL for a FREE comedy stand up night… it was pretty good if you like a good belly laugh.

Kind regards

Ray’

Mr Alverson contended that while he should have used ‘lease’ rather than ‘hire’, in his mind they were the same thing.

[111] In a further email of 24 May 2016, he had said:

‘I can offer you three alternatives…

1. Long term hire $30 a day

2. Lease approximate payment would be around $20 a day

3. Purchase outright for $14,700 – B-Size’

In answer to questions from me, as to why, when he said ‘lease’ and ‘hire’ are the same, they are expressed above as alternatives, Mr Alverson answered ‘Probably the wrong words, that’s all’. Mr Alverson denied changing his story when the above emails came to light. He accepted that these emails had all been kept on his own computer and not returned when we was requested to do so.

[112] Turning to the confidential documents, Mr Alverson accepted that they would be useful to someone setting up a competitor business. He claimed he had permission from Mr Reed to send confidential documents to his personal email account. Mr Alverson said he had three massive monitors at home. He is a gamer – and a good one. He agreed he could have logged his Artcraft account on any computer, providing he had the required connections. He acknowledged that he did not need to send the documents to his personal email – but it was just easier. He explained there were two servers – one runs all the software from China updating the VMS signs.

[113] Mr Alverson accepted that it is not the same to have an Excel spreadsheet on a soft copy, as it is to have it hard copy. He agreed that when he sent an email from his Gmail account, Artcraft would not see what was being sent. However, it was valuable to have the documents on his personal email, in order for him to do his job. Mr Alverson denied these documents were ‘valuable’ to him because he was running a competing business. He was not running a competitive business and it could not be proved otherwise.

[114] Mr Alverson claimed that he never asked Mr Chataway if it was OK to send the Sydney Quote Register home, because he did not need to, as Mr Reed had given him permission earlier. He was not privy to what Mr Reed might have told Mr Chataway. Mr Alverson offered new evidence that the reason he sent the documents home was to check on quotes, prepared by two inexperienced new staff who had been making numerous mistakes. Mr Alverson denied he had not returned or destroyed these documents because he had an interest in keeping this information for his own side business of renting VMSs. There was no evidence he had approached any of Artcraft’s customers for their business, either before or after he left.

[115] Mr Alverson agreed he was asked to sign a statutory declaration, at the time of his dismissal, affirming that he returned or destroyed all confidential property of the respondent. He did not sign it and forgot about the three confidential documents on his laptop. He did not sign it because he was ‘pissed’ and ‘annoyed’. Mr Alverson gave a very long answer as to why he was annoyed with the Company, but at no time had he mentioned the commission claim, nor did he mention it after September 2016. He insisted that he had raised five issues, including the commission, with Mr Chataway and Mr Wellington in December 2016.

[116] In his evidence about the Coates contract, Mr Alverson described it as a ‘team effort’ (notwithstanding that in his statement he said ‘I successfully negotiated a sales contract between the Respondent and Coates Hire Australia Pty Ltd’). Mr Alverson accepted the first quote QT2129799 was for the Chinese VMSs which were never sold to Coates. The second quote, QT2132119 was changed several times subsequently. He said his authority for final ‘sign off’ only went to quotes up to $10,000.00. This quote, for several million dollars, required Mr Wellington’s ‘sign off’. Nevertheless, his own role was getting Coates to the table and taking the negotiations to the final point before ‘sign off’. Mr Alverson claimed there were hundreds of emails demonstrating his involvement with the Coates contract, although he did not submit any into evidence. He conceded that he had been able to access all of them.

[117] Mr Alverson was asked about an email he sent to Office Assistant, Krishna Swamy on or around 7 September 2016 in which he said:

‘As I am primarily dealing with Coates hire I asked Scott to change Coates Hire into my Sales…Can you please check and make sure this has been done please.’

He denied arranging to have his initials on the account at this time, because he got a ‘whiff of the Ver-Mac sale’. He had asked the office assistant to put his name on the account, because he was just checking. He said his initials were on the Coates’ quotes from day one. He conceded he had nothing to do with Artcraft becoming the Ver-Mac distributor, because it was not his job. Mr Alverson was shown emails from early September 2016 between Mr Wellington and Ms Richardson of Ver-Mac.

[118] Mr Alverson was asked about an email from Mr Reed to Mr Fraser being the first quote for Coates. The applicant had said he did not know about this quote, yet he claimed he had successfully negotiated the sale. Mr Alverson believed he was involved in the detail of finalising the quote up to its acceptance. Mr Alverson claimed it was ‘damn rude’ that he was cut out of information about updated quotes from Mr Grey to Mr Fraser. He believed he was being ‘undermined’. He said that just because he was not copied into emails, did not mean he was not involved in the sale. Mr Alverson agreed he did not tender evidence of his involvement with Coates, other than these two quotations. He added that things were being added and removed all the time. He had also sourced a specific jockey wheel for the units from Melbourne, for instance.

[119] Mr Alverson said that there were problems with his commission shortly after Mr Reed left and Mr Chataway began asking questions, because he was new to the business. It was after that that Mr Knight offered him a ‘spotter’s fee’, which he rejected as ‘not good enough’. Mr Alverson rejected the suggestion that he never raised the commission issue when he was dismissed; notwithstanding he did not mention in in his statement evidence or in the dismissal meeting. He added that the meeting was biased in any event.

[120] Mr Alverson accepted that Mr Grey had told all the Artcraft team that he (Mr Grey) was the contact for the Coates sale. He agreed Mr Grey had experience with, and knowledge of the Ver-Mac product; but he and Mr Reed were included in the sale process. He accepted the deal was finalised by persons in higher authority than him.

[121] In re-examination, Mr Alverson insisted that he had never disseminated the details of the three confidential documents to any third party.

[122] Mr Alverson confirmed he only had one VMS, which he had leased out to Lakeside Kiosk, Blacktown. The lease commenced before his employment with Artcraft. It was for eight months, but only lasted half way through, because the sign started to muck up. At that time, he towed it back home and left it in the driveway, where it has stayed ever since. He said he never offered his VMS trailer for sale, lease or hire, to any of the companies mentioned in the emails he was taken to by Mr Santucci in cross examination. He may have mentioned to customers that he owned such a unit, but only as a selling technique.

[123] Mr Alverson described the process of ‘sign off’ according to the contract value. In respect to the supply of jockey wheels, Mr Alverson was shown an email from Mr Grey, dated 9 September 2016, in which he asks him to phone a supplier of jockey wheels and obtain a price for 200 units. This is what he meant by working ‘behind the scenes’ to secure the contract. Mr Grey has also asked him on 24 August 2016 about 50 am battery charges for the Coates contract. He said this was to keep everyone ‘in the loop’ as to what was going on as a team. Mr Fraser also wrote to him around the same time about the issue.

[124] Mr Alverson said he had evidence of a request from Mr Fraser of Coates, on 5 October 2016, for him to go across to Coates to look at the latest version of the Ver-Mac trailer. He passed the request on to Mr Grey and Mr Knight. Mr Grey responded to Mr Chataway about the applicant’s involvement in an email to him on 4 October 2016 as follows:

‘Can you stop fucking runaway train for me please. He’s doing my fucking head in and making this sale a pain in the arse!

He is literally doubling up on everything I have here coming in direct from the Coates branches. He is not the Ver-Mac representative for Artcraft or product specialist. I am not releasing the Ver-Mac product until I’m ready and I’m not being forced to do so. It always turns to custard if you do.

The Coates branches have been instructed to deal with me only. I have shown you (sic) guy the official e-mail. I will work out a plan later on whether I’m going to stock part sin (sic) branches of (sic) use a central location with quick turnaround. Right now it’s central from Brisbane. It’s cleaner, quicker and easier.

I’m the key contact from now until we sort out the deal. I discussed with David Fraser and he is fine with that.

I don’t want Ray or anyone to have anything to do with Ver-Mac product. I’m working on having a key account manager for Coates / Ver-Mac Specialist (not Scott)

I will not be issuing any Ver-Mac pricing to anyone expect [sic] direct to Coates.’

(This became known as the ‘runaway train’ email).

[125] Mr Alverson believed Mr Grey had been undermining him earlier when he pointed out the Chinese products, (Mr Grey had signed off on), were actually catching fire.

[126] In further cross examination, Mr Alverson agreed it was Mr Fraser who was ‘cutting him out’ of the email chain - not Mr Grey. He denied these emails disclose he was just helping a superior. He insisted it was a team effort. Mr Alverson did not accept Mr Grey was his senior. If he asked politely, he would do whatever Mr Grey asked in order to help the team.

[127] In respect to the 5 October 2016 email to the team, Mr Alverson claimed he had taken photos on his recent visit to the Coates Hire yard at Glendinning. He agreed that at this point the sale had been completed (30 September 2016). However, this still proved he was working on improvements (modifying the trailer) to make sure that Coates got exactly what they had paid for.

[184] I would add this final observation. It is clear the applicant was agitating for the commission in early September 2016 (indeed, he checked with the Office Manager on 7 September 2016 that his name was on the quotes to Coates). If Artcraft had wanted to dismiss him to avoid paying the commission, it could have done so before 30 September 2016. Up to that day the applicant was on probation and would not have been employed for the minimum employment period to have lodged a competent unfair dismissal application. This is not to say he may not have had any other rights under the Act relating to his employment or his dismissal.

[185] I turn now to first reason for the applicant’s dismissal.

[186] There does not appear to be any suggestion - let alone evidence - that the applicant had actually used the information in the documents he had sent to his personal email, for an ulterior purpose or personal gain, (or in the words of his contract ‘using, copying or storing confidential purposes other than for performing his duties’), such as poaching Artcraft’s customers or passing such information to persons or businesses, regarded as competitors. I do not apprehend Mr Santucci’s submissions to go to that direct allegation. Although this case has some factual similarities to Finemore, namely that the applicant in Finemore was also dismissed for sending confidential company information to her personal email, the current matter can be distinguished in several important respects. In Finemore, the Commissioner found that the employer had a reasonable belief that the employee had engaged in serious misconduct, and in turn, the Code was satisfied and the dismissal was fair. It must be noted, however, that the employee had sent the information to her personal email within just two minutes of sending her letter of resignation to the directors of the company. While she claimed the information was necessary for her to work from home, the timing of her email, as well as its content, and the deteriorating relationship the employee was experiencing with her manager, was enough to cast a degree of doubt on her justification for emailing the documents. Further, that employee had previously been directed not to work from home.

[187] The highest the respondent’s case could properly ascend here was that there were a number of actions taken, or not taken by the applicant, which led to a very real suspicion that he was ‘misusing Artcraft’s confidential information by sending it to his personal email’. It followed, so the argument goes, that the applicant was in serious breach of Artcraft’s policies and his contract of employment which states at cl 11.1 ‘You must not use, copy or store confidential information other than for the purpose of performing your duties’, and such conduct was serious misconduct justified the applicant’s summary dismissal.

[188] As I raised with Mr Santucci at the time, in Finemore, the learned Commissioner was dealing with a separate and distinct test relating to the validity of the employee’s dismissal, under the Code. Obviously, that case was decided on what is often said to be the less onerous test of the Commission being satisfied that the employer ‘believed on reasonable grounds’ that the misconduct had occurred, rather than the test in this case, being that the Commission for itself is satisfied that the misconduct has been proven. So much is clear from the Code which states under the heading Summary Dismissal:

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

See: Pinawan v Domingo [2012] FWAFB 1359 (2012) 219 IR 128 and Ryman v Thrash [2015] FWCFB 5264.

[189] In my assessment, there are a number of competing factors which could lead to different conclusions as to whether the respondent’s reason for dismissal was a valid reason. Factors which point to a conclusion that the respondent’s suspicions were justified, include the following:

(a) Mr Alverson claimed he sent the documents to his personal email so he could work from home by using his bigger home screens, due to his poor eyesight. Putting aside this explanation was not given when he was first asked about it on 3 January 2017, and that there was no evidence that the applicant had ever told anyone about his poor eyesight as the reason why he sent information to his home, the fact is that the applicant could access confidential documents on any computer, at any time, through Artcraft’s IT facilities.

(b) When asked in cross examination why he did not connect the Company’s computer to his home screen connections (thereby not requiring him to send information to his personal email), Mr Alverson equivocated and claimed it was difficult to do. Yet later in cross examination, he said he had three large screens and sophisticated computer equipment at home, because he was a ‘gamer’ (and very good at it). This is inconsistent with what I apprehend to be a relatively easy task of linking Artcraft’s IT facilities to his own. Put another way, a ‘very good gamer’ would have no difficulty in negotiating such a task.

(c) When these explanations did not appear to gain traction, he raised a third reason for the first time in his oral evidence – he had sent the confidential information home so as to check on two inexperienced staff who were making frequent mistakes. No evidence was provided supporting this claim.

(d) While the applicant used his own computer in the first six weeks or so of his employment, until he received the Company laptop, there does not appear to be any reason why he did not revert to the Company provided facilities, after they were provided.

(e) There was no evidence that anyone (other than Mr Reed in March/April 2016) was aware that the applicant was using his personal email for work purposes. Mr Reed’s evidence was that the applicant had never asked specifically about sending confidential documents to his personal email. It is also unclear whether Mr Reed was aware that the applicant continued to send work related documents to his personal email, after he was provided with the Company laptop.

(f) Mr Reed, whose evidence was relied on by the applicant in respect to this matter, (but not on the other matter of his VMS unit), gave evidence that the confidential information would ‘potentially’ be useful to competitors. Even the applicant conceded confidential information would be useful to competitors and Artcraft needed to control its distribution.

(g) It seems curious, why the applicant sent two of the three confidential documents to his personal email early in the morning (7.47am and 8.34am) when he was actually working in the office.

(h) After his dismissal, the applicant was asked to sign a statutory declaration confirming that he had destroyed, or returned all of Artcraft’s confidential information in his possession. He declined to sign the statutory declaration and it was clear the three confidential documents remained on his personal email. This refusal does not sit comfortably with his explanation that he simply forgot that this information. It seems incredible that the applicant forgot he had thousands of Company emails on his personal computer, when the very reason he was dismissed was because he sent confidential information to his personal email.

(i) It is well understood that once a document (confidential or otherwise) is sent to a personal email, the employer effectively loses control of the document, including how it might be used or disseminated in the future.

[190] On the other hand, a number of factors point in the opposite direction and support the applicant’s view that his dismissal was unfair, because Artcraft had no valid reason to dismiss him. These include:

(a) The respondent’s witnesses agreed that the confidential information was necessary in order for the applicant to perform his job. I accept the evidence that other employees would have also needed to have confidential information to perform their job.

(b) Mr Reed, as Mr Alverson’s direct Supervisor at the time, did not object to him using his personal email for work purposes; at least during the interim period before he was supplied with a Company laptop.

(c) It seems the respondent did not have any policy which made it abundantly clear (or at all) that the practice of sending Company information (confidential or otherwise) to an employees’ personal email, was a breach of policy. No written policy was produced.

(d) There was no Company policy or directive to employees to advise management that permission was required to send confidential information home to their personal email.

(e) Artcraft certainly did not object to the applicant working from home, or outside of the office, such as when salespersons visit potential or existing clients.

(f) There was no tracking by Artcraft of what documents were made generally available or restricted. It would have been very easy for an employee, with ulterior motives, to simply print hard copy documents and retain them, without Artcraft ever knowing.

(g) It can be safely assumed that Artcraft could, at any time, audit or investigate an employee who was sending documents to their personal email. Presumably, it cannot be done secretly or covertly. I accept it was not sought to be hidden or covered up by Mr Alverson. That said, as I said earlier, once the document has been sent to a personal email, all employer control and monitoring of its use or dissemination is lost.

(h) On its face, it is reasonable that Mr Alverson was entitled to have access to the Piggott’s price list in order for him to try and recover Mr Piggott’s business.

[191] In balancing the above considerations, I am not satisfied to the requisite standard, that the applicant was guilty of serious misconduct in sending confidential information to his personal email. It follows that this reason was not a valid reason at the time, to dismiss him.

Whether the applicant was notified of the reason for dismissal (387(b))

[192] The applicant was notified of the reason for his dismissal on 5 January 2017 and his possible dismissal on 3 January 2017. This is a neutral factor in this case.

Whether the applicant was given an opportunity to respond (s 387(c))

[193] In my view, there is some force to Mr Vassili’s submission that Mr Alverson was denied procedural fairness in respect to Artcraft’s handling of his dismissal. It could be accepted that Artcraft paid ‘lip service’ to the rather abridged and hurried dismissal of the applicant, from when the issue of Mr Flexman’s complaint was raised with him on 22 December 2016. At this point, Mr Alverson could not have expected his employment to be in jeopardy. The Company then closed for the Christmas/New Year shut down. He was not accused of serious misconduct until he returned to work on 3 January 2017 and had a meeting with Mr Chataway and Mr Wellington around 10:30am. Thereafter, the disciplinary process rapidly accelerated.

[194] In my opinion, it was unreasonable for Mr Wellington to adjourn the meeting and direct the applicant attend at 2pm that day to offer his explanation for the sending of the three confidential documents to his personal email. This was too short a time for an employee to gather their senses and consider and prepare a response. However, I accept there may be other examples where an employee might request such a meeting be convened, sooner rather than later. Nevertheless, I note that Mr Alverson, at that time, maintained he had done nothing wrong. That may have been all that was necessary for the respondent to accept it was not getting any further explanation from him.

[195] Of course, the meeting did not reconvene that day and shortly after Mr Alverson presented to a doctor as a result of his feeling stressed and overwhelmed at the suddenness of the meeting and seriousness of the allegations. Upon his return to work, the applicant met with Mr Chataway on 5 January 2017 and was again asked to explain why he had sent the documents to his personal email. This was the first time he mentioned his poor eyesight and his large screens at home.

[196] I accept an inference is open that Artcraft had determined that the applicant was to be dismissed, irrespective of his explanations, given the haste with which it rushed to dismissal after seeking his explanations on 3 January 2016. It is not clear whether Mr Wellington or Mr Chataway considered any alternative to dismissal. However, I accept the seriousness with which the Company viewed the matter, as distinct to the direct evidentiary foundation for so concluding, which appeared at the relevant time, to be based on suspicion, at best.

Whether there was any unreasonable refusal to allow the applicant to have a support person present to assist in any discussions relating to dismissal (s 387(d))

[197] Although I accept the applicant was not informed of the purpose of the meeting beforehand in order to arrange for a support person, it is hardly usual or routine for an employee to request the presence of his/her solicitor for a disciplinary meeting. Arranging for his solicitor to be present was likely to have resulted in a considerable delay in the process. Legal representation would have been more in the role of an advocate, rather than a support person. That said, Mr Alverson must have realised that the matters he was being asked about were serious, because he requested his solicitor to be present. This is a neutral factor.

Whether the applicant had been warned about unsatisfactory performance before the dismissal (s 387(e))

[198] This criterion is not relevant, as the applicant was dismissed for serious misconduct, not poor performance or conduct for which warnings may have been appropriate.

The degree to which the size of the employer’s enterprise, and the absence of a dedicated Human Resources specialists would have impacted on the procedures followed leading up to the dismissal (ss 387(f)-(g)).

[199] While the respondent is not a small business, its operations consist of 150 persons scattered across a number of States. It is not clear if the respondent has its own internal Human Resource or Industrial Relations functions. There was no evidence of any such advice being given or that Mr Wellington, Mr Grey, Mr Knight or Mr Chataway sought external advice. While I accept that proper advice might have resulted in a different and less rushed process, I do not consider these omissions were necessarily decisive, given the findings I will make shortly.

Any other matters the Commission considers relevant (s 387(h))

[200] As mentioned earlier, I consider that the information discovered later by the respondent, is a relevant matter under this section in determining whether the dismissal was unfair. I will discuss this matter more fulsomely in a moment.

[201] Having weighed up all the above considerations, I find the respondent has not met the onus it bears to prove the allegations outlined in the applicant’s termination letter, to the requisite standard, as set out by the High Court in Briginshaw.

[202] I am satisfied that the applicant’s dismissal at 9.50am on the morning of 5 January 2017 was unfair. However, that cannot be the end of the matter. For reasons which I will shortly explain, I intend to make no orders consequent upon this finding of unfairness.

[203] The coincidental observation by Mr Chataway of the applicant’s VMS unit in his driveway and what the applicant told him about his private business, was, in my opinion, a sufficient basis to justify Artcraft’s decision to dismiss him that day. How different the outcome might have been had Mr Chataway not helpfully driven the applicant home after he was dismissed. It is to this matter which I now turn.

Facts discovered after dismissal

[204] Earlier I referred to the applicant’s differing explanations as to his business of renting out a VMS unit/s in a conversation with Mr Reed in early 2016. In my opinion, Artcraft was entitled, as it were, to ‘connect the dots’ of the applicant sending confidential information to his personal email, his failure to sign a statutory declaration confirming he had destroyed or returned all of the Company’s documents, and the renting of a VMS unit for personal gain, to draw a firm conclusion that the applicant had placed himself in a conflict of interest with his duty and obligation to Artcraft’s interests. The applicant’s consistent trope in the proceeding was that he had not breached cl 11.1 of his contract of employment, or the general duty of fidelity owed to his employer, because his private business was not in competition with Artcraft. He rented his VMS unit and Artcraft only sold VMS units. Putting aside the conceded breach of cl 2.2 of the contract (in that he had not sought written approval to be engaged in any other business or occupation), his claimed distinction between his activities and Artcraft’s business, is illusory. It is a ‘distinction without a difference’.

[205] In my opinion, he was in the same business as Artcraft – providing VMS units to customers. It is of no consequence that his business rented VMS units and Artcraft sold them. It does not take a great leap of imagination to conclude that if a potential customer actually wished to rent or was encouraged, enticed or misled to rent a VMS unit/s, it was a loss of business for Artcraft. It cannot possibly be characterised in any other way. Whether Mr Alverson actually diverted a customer from purchase to rent (about which there is no conclusive evidence) is not the point at all. It had all the characteristics and appearance of a direct conflict of interest or, at the very least, a potential conflict of interest. Mr Alverson’s defence fails any objective test of reason or logic. It cannot seriously be sustained.

[206] Mr Alverson’s further plea was that he only had one VMS for ‘a bit of extra pocket money’ and, in any event, it was in need of repair. These claims were little more than a poor attempt to downplay and minimise the seriousness of the conduct he was actually engaged in. In my view, his VMS rental to Lakeside Kiosk was a real loss of business that might otherwise been secured by Artcraft, given its standing as the leading supplier of such products in the country. In my judgement, Mr Alverson’s evidence was built on a ‘platform of shifting sands’; as set out in my earlier comments (para [172] above) concerning his implausible belief that ‘rent’ is the same as ‘lease’, but offering them as two distinct options to a potential customer. His further ‘shifting sand’ evidence as to the nature and extent of his private business is the surest indicator that he knew Artcraft would view his business as a matter of serious concern, which represented a direct threat to its current and future business operations.

[207] As I earlier observed, it is apparent that Mr Reed had a somewhat different understanding of what Mr Alverson claimed he told him some months before – that the VMS unit had something to do with helping his son. Even if this was true (which is doubtful) it too would have the potential for a conflict of interest with Mr Alverson’s employment, as any assistance he provided to his son to build a VMS rental business, would be a conflict of interest with his employment by Artcraft.

[208] The essential fact was that Mr Alverson was under a contractual obligation to seek permission to engage in secondary employment. On his own admission, he failed to do so. In my opinion, his failure to do so was because of the likelihood Artcraft would have firmly rejected such approval being given and he knew this to be the case.

[209] In my assessment, the conflict of interest exposed and confirmed by the evidence was serious misconduct for which dismissal was an appropriate outcome. The evidence which emerged in this case, as I have attempted to set out above, concerning the implausibility of the applicant’s explanation for offering a rental option to Artcraft’s potential customers, was an obvious conflict of interest. This evidence demonstrated the correctness of the respondent’s decision that it had a valid reason for the applicant’s summary dismissal. The reason for the decision was ‘sound, defensible and well founded’; see: Selvachandran. The decision, based on the applicant’s serious misconduct, was validated by facts discovered after the dismissal and unknown to the employer at the time of dismissal; see: McLaughin v Meat Holdings supra above.

[210] Finally, s 381(2) of the Act is a significant and overarching object of Part 3-2. It is expressed in these terms:

‘381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.

Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95.’

[211] For the above reasons, I find that the applicant’s dismissal on 5 January 2017, was not ‘harsh, unjust or unreasonable’, within the meaning of s 387 of the Act. His dismissal was not unfair. Accordingly, this application is dismissed. I so order. I am satisfied that the outcome I have determined ensures a ‘fair go all round’ is accorded to both the applicant and the respondent. This matter is concluded, save for any application, pursuant to s 402 of the Act, as foreshadowed by Mr Santucci at the conclusion of his submissions.

[212] Finally, I should add that while I earlier found some elements of procedural unfairness surrounding the applicant’s dismissal and given the applicant’s relatively short service and all the relevant circumstances, I would not have been disposed, in the exercise of my discretion, to make any order for financial compensation.

DEPUTY PRESIDENT

Appearances:

Mr M Vassili for the applicant.

Mr P Santucci for the respondent.

Hearing details:

Sydney.

2017.

3 May.

9 June.

27 July.

Printed by authority of the Commonwealth Government Printer

Mr Raymond Alverson v Artcraft Pty Ltd

[2017] FWC 5501

16 NOVEMBER 2017

DECISION