Mr Shane Stephen Kennedy v Nestle Australia Ltd
[2010] FWA 2414
•30 APRIL 2010
[2010] FWA 2414 |
|
DECISION |
Workplace Relations Act 1996
s.643 - Application for relief re (Unlawful and Harsh, Unjust or Unreasonable) termination of employment
Mr Shane Stephen Kennedy
v
Nestle Australia Ltd
(U2009/2796)
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 30 APRIL 2010 |
Termination of employment – whether there was a valid reason for termination – whether the relationship of trust and confidence was broken – dishonesty – compensation – discount for failure to mitigate and Applicant’s contributing conduct.
[1] This application was made by Mr Shane Kennedy (“the Applicant”), who contends that the summary termination of his employment by Nestle Australia Ltd (“the Respondent”) was harsh, unjust or unreasonable under s.643(1)(a) of the Workplace Relations Act 1996 (“the Act”).
[2] The Applicant made an application to the Australian Industrial Relations Commission (as it was) under s.643(1)(a) of the Workplace Relations Act 1996 (“the Act”) on 27 March 2009.1
[3] The Applicant was employed by the Respondent for 20 years and six months2, and appears to have permed the role Area Manager for the Respondent since 1997 3, responsible for achieving sales targets (and growth in sales), client relationships, and managing staff (including coaching drivers4) and overseeing stock and assets in the Cairns region.5
[4] The Applicant’s employment was summarily terminated on the broad grounds that the relationship of trust and confidence had been irreparably damaged. The reason for this was the Respondent had formed the view that the Applicant had been less than honest in accounting for his whereabouts during work time.6
[5] This application was subject to a conciliation conference before a member of the Australian Industrial Relations Commission, as it was, and was allocated to me on 19 October 2009.
APPLICANT’S EVIDENCE IN SUMMARY
[6] By way of background, the Applicant was appointed Cairns Territory or Area Manager in 1997 and contended that it was expressly stated to him at the time that “you will undertake the hours of work necessary to complete the requirements of the work in your position” and that there were to be no fixed hours of work.
[7] The Applicant further contended that his role demanded that he be “on call” 24 hours a day 7 days a week and worked nights and weekends. Ms April Sharkie, the former Area Manager, also attested to the flexibility of hours worked by the Area Manager given that the role made demands outside of ordinary hours.7
[8] The Applicant contended that “his relationship with his employer had always been good” up until March 2009. 8
[9] Despite this claim, the Applicant gave evidence of two sets of circumstances that disturbed that relationship prior to this time.
[10] Firstly, the Applicant was investigated for a conflict of interest in that he was the sole Director and shareholder of a company, One Distribution Pty Ltd (“the Company”) that had a contract for various services with the Respondent. This occurred in March 2008. The Respondent had known of this relationship at an earlier stage when the Applicant had been one of three Directors and he had held a minority shareholding. But the Applicant did not advise the Respondent of his changed status from mid 2007. 9 The Respondent discovered the Applicant’s new status from its own sources and investigations.
[11] The Applicant was subject to an investigation, the result of which the Company ceased its dealings with the Respondent and the matter was not progressed any further. The Applicant gave evidence that he acknowledged that his changed status gave rise to a serious issue about a conflict of interest and that it had been a stressful time for him. 10
[12] Over the course of the short investigation into this matter, the Applicant had cause to complain to the Respondent’s HR Manager about the conduct of Mr Eric Hay, who was the State Manager for the Respondent responsible for investigating the Applicant’s conduct at the time.11
[13] According to the Applicant there were no disciplinary outcomes from the investigation into his conflict of interest (only that the contract with his business was severed).
[14] There is further discussion of this matter, mainly from the perspective of the Respondent's evidence, below.
[15] The second matter that brought the Applicant into some degree of conflict with the Respondent arose when, in February 2009, the Applicant received from Mr Daryl Ruhle (Regional Manager) an adverse performance report. The Applicant refused to counter sign the report, which appears to have become a point of some conflict between the two individuals.12 The principal reason for the adverse report was that the Applicant had not made enough client calls per month or met the expected quota for occasions when he as required to travel with drivers to mentor them and survey the markets in which they worked.
[16] In relation to physically visiting clients, the Applicant appears to claim that he visited clients on the basis of the dollar value to the business and did not incur expenses and lost time from visiting clients in remote areas.13 These clients were served by telephone contact, it appears, though the evidence he led suggested, nonetheless, that he did also physically visit clients as well.14 In this regard, for example, evidence was led by Ms Annette Bourke, a client of Respondent, that while she had indicated to the Respondent that she “had not seen [the Applicant] lately”, she had had seen “him regularly and had done so over a number of years.”15
[17] The Applicant accepted that the frequency with which he travelled with drivers fell short of the expectations of his Respondent. 16
[18] These matters aside, in the following month, the Applicant’s relationship with the Respondent was placed under further stress.
[19] On Wednesday, 11 March 2009 the Applicant was interviewed by Mr Hay and Mr Ruhle when they visited Cairns.
[20] The issue of the Applicant’s refusal to sign off on his performance management report was discussed. 17
[21] The Applicant claimed in his written evidence that he was also asked about his movements over Monday, 9 March 2009 and Tuesday, 10 March 2009. The Applicant claimed he was asked whether he ever worked from home, and he answered in the affirmative. 18
[22] The Applicant claims he was then asked whether he ever worked half days, and he answered, again, in the affirmative. 19
[23] The Applicant then stated that he was asked what work he had completed last Monday, and he replied that he would need to check his diary to ascertain that information. 20
[24] The Applicant then gave evidence that he was asked whether he worked a half day on the Monday, 9 March 2009. The Applicant answered in the negative. 21
[25] He further claimed at the hearing that he wished to give a further explanation for his answer but was given no opportunity to do so by Mr Hay, who stated, it was said, that given his reply that the matter was now in the hands of the Respondent’s HR department. 22
[26] An interview between the Applicant and Mr Ruhle and Ms Jennifer Jones of the HR Department was conducted on Monday, 16 March 2009.
[27] The Applicant claimed that the Respondent raised the issue of his telephone accounts, which revealed a high frequency of mobile telephone calls that appeared to emanate or have their origin from an area in close proximity to his home. The Applicant nonetheless denied being at home when these calls were made. 23
[28] The Applicant claimed that he was accused of indicating on his monthly report that he had made “calls” to a customer in Port Douglas, but his phone account the “call” was a mobile telephone call and not a physical visit. The Applicant claimed that he had acted under the belief that a substantive telephone call to a customer was a “call”, and he had been led to believe that he could report calls of a physical kind as well as substantive telephone contact. 24
[29] The Applicant further claimed that he was asked why he had left work at 12.30pm on Monday, 9 March 2009.
[30] The Applicant on his own evidence stated that the reason (on Wednesday 11 March 2009) that he answered in the negative as to when he was asked if he went home early on Monday, 9 March 2009, was because he was flustered in the context of knowing his employment might be in jeopardy and his general state of unpreparedness for such questioning (such as not having his diary with him). 25
[31] The Applicant claims that during the interview (on Monday 16 March 2009) he stated in explanation for his conduct (in relation to Monday, 9 March 2009) that he had concluded his work for the day and that he had performed some duties on the prior Sunday (8 March 2009) and was presumably entitled to time off in lieu.26
[32] The Applicant also claimed that he left work at 12.30pm on Monday, 9 March 2009 after having been contacted by his partner earlier that day who had alerted him to a suspicious ‘silver’ vehicle near their home.27
[33] The Applicant had reason to be concerned about suspicious conduct as both he and his fiancé (who was recovering from a motor car accident) had been violently threatened by a friend of a former Nestle employee, whose employment the Applicant had reason to terminate (at the instruction of the Respondent).28
[34] The Applicant also contends that he was asked about his movements on Tuesday, 10 March 2009. The Applicant claimed that he had started work at 7.30am, and that this was able to be corroborated by a work colleague (who gave evidence in these proceedings to this effect). 29
[35] The Respondent alleged (through Mr Ruhle) in reply to this that the Applicant had been seen (by Mr Ruhle) leaving his home at 9.00am that morning, which is why the matter was a point of contest between the parties. 30
RESPONDENT’S EVIDENCE IN SUMMARY
[36] Though the following comprises a summary of the Respondent’s evidence, it also includes some (evidence-based) rejoinders by the Applicant.
[37] By way of background, Mr Eric Hay was the State Manager for Queensland of Nestle Peters Ice-cream, a Division of the Respondent.31
[38] Mr Hay gave evidence that the “nature of the Applicant’s position and the sense of autonomy which naturally exists in an Area Manager resident so far from Brisbane” necessitates “trust and understanding between the manager and those above him in the management chain”. 32
[39] Mr Hay contended that the relationship with the Applicant fell into difficulties in March 2008 when it was disclosed (through the Respondent’s research only and not by any admission by the Applicant) that a conflict of interest may have arisen by virtue of the Applicant being a director and major shareholder of the Company.33
[40] The Respondent at that time had a contract with the Company to provide freezer movements, forklift rental and maintenance, pallet hire and transport of shippers. The Respondent also received labour hire services through the Company. It was put to the Applicant that the Respondent had a contract for services of almost $100,000 with the Company between mid 2006 and mid 2008. 34
[41] Ms Jaimelle Whittaker, who had commercial dealings with the Applicant at the warehouse in which the Company operated its business (which itself was previously owned by the Respondent) gave evidence that the Applicant was directly involved in the day-to-day management of his business whilst being the Area Manager for the Respondent. It was said that the Applicant arrived each day at the warehouse and collected deliveries and conducted staff meetings.35
[42] The Company’s contract for services with the Respondent included the hire of a forklift. Whilst this was not known to him at the time, Mr Hay came to doubt that the Respondent had any new forklift hire requirements as he had been informed by its warehouse worker familiar with the Respondent’s forklift that it was still in good operational order. The empirical basis to these doubts was in contest in these proceedings as the very same warehouse worker gave evidence that he would never have made such an observation as the forklift had been unreliable.36
[43] He also came to doubt that there was any evidence that any labour hire services had been provided by the Company,37 though the Applicant contended otherwise.
[44] Mr Hay had also observed that the Applicant appeared to be storing orange juice, which was the Company’s stock, at the Respondent’s premises.38
[45] The contractual relationships between the Company and the Respondent were severed following the Respondent’s investigation and the Applicant appeared (according to Mr Hay’s evidence) to undertake to commit himself to his role as Area Manager for the Respondent.39 It also appears that at this time the relationship between the Applicant and Mr Hay was stressed, with the Applicant making claims that Mr Hay had bullied him or else acted in a bullying manner.40
[46] In dealing with the Applicant’s telephone accounts, it became evident to the Respondent that the Applicant had been making personal calls whilst on an international holiday on his mobile telephone (to the value of $329.00) and that the “Applicant spends a lot of his working day either at home or close to home and away from the Nestle premises”.41
[47] The Applicant denied he had ever been informed he was not to make personal calls on his mobile telephone and having been so advised, acted to repay the call charges once advised of the discrepancies.42
[48] Two further incidents arose when the Applicant did not respond to two telephone calls from security on separate days as to temperature problems in two trucks. This led to $14,000 of wasted product, which was written off by way of an inappropriate procedure and without notice to the Applicant’s managers.43
[49] It became further apparent to the Respondent that the Applicant had not been:
• meeting his sales targets44;
• meeting customers and generating new sales (revealed firstly by alleged discrepancies in the Applicant’s reports and his telephone records which revealed that there were occasions when the Applicant was said to have claimed he was visiting clients in regional areas but his mobile phone record revealed he was making calls from within the Cairns area)45; and secondly by way of calling key account customers, who revealed they had not heard of or had not met the Applicant)46 – the Applicant was expected to make a visit on key customers once every four to six weeks47;
• making any where near the minimum number of driver trips.48
[50] These matters, and particularly the issue in relation to client relationships were raised with the Applicant, who disagreed with the summation of his performance deficiencies. The Applicant refused to sign off on the performance counselling procedure.49
[51] Thereafter, Mr Hay and Mr Ruhle travelled to Cairns to meet a key customer on Green Island. Mr Hay arrived on Wednesday, 11 March 2009. Mr Ruhle arrived on Monday, 9 March 2009 so that he could, amongst other things, investigate whether the Applicant had been making regular contact with the Respondent’s clients.50
[52] Mr Ruhle had conveyed to Mr Hay that the Applicant had been sighted at home on Monday and Tuesday of that week (9 and 10 March 2009).51
[53] The Applicant was subsequently interviewed by Mr Ruhle and Mr Hay over lunch, on Green Island.
[54] Issues about the Applicant’s commitment following the prior conflict of interest issue were raised, along with concerns as to why he would not sign off on the earlier performance counselling procedure.52
[55] The Applicant was also asked whether he ever left work early or worked from home. The Applicant was said to have responded “absolutely not”.53
[56] The Applicant was asked whether he worked from home on Monday 9 March 2009, and the Applicant was said to have responded “absolutely not”.54
[57] The Applicant was also asked why he had not returned Mr Ruhle’s telephone call on the Monday afternoon, and replied he had been busy (but would need to consult his diary as to what the particular reason might have been).55
[58] Mr Hay stated to the Applicant that he had been seen at home on Monday, 9 March 2009, but that the Applicant again (twice) denied that this had been the case.56 The evidence of the Applicant having been seen at his home that day was given by Mr Ruhle, who claimed he observed the Applicant at his home whilst driving past the Applicant’s residence on that day.57
[59] Mr Ruhle also claimed that he had witnessed the Applicant driving away from his home about 9.00am and driving home at about 2.30pm on Tuesday, 10 March 2009.58
[60] The Applicant was also asked whether he made calls on his work mobile from home, and the Applicant said he only ever received or made calls on his mobile after hours.59
[61] On the basis of these responses to Mr Hay’s questions, the matter was handed over to the Respondent’s Human Resources department.60
[62] The Applicant thereafter met with Mr Ruhle and Ms Jennifer Jones, the Respondent’s HR Manager, on 16 March 2009. Ms Jones’ notes of that meeting are at Annexure JJ-1 to her Statement. 61
[63] The Applicant was provided (on two occasions) with an opportunity to have a support person with him but declined the opportunity.62
[64] The Applicant claimed he was “rattled” by Mr Hay’s questions the previous week and that his answers as to his whereabouts on Monday 9 March 2010 were inaccurate and that he had “forgotten things”. 63
[65] According to Ms Jones’ evidence the Applicant went on to explain at the interview that on Monday, 9 March 2009, he had gone home at 12.30pm and had worked from home for a further 4-5 hours. 64
[66] Notwithstanding that he had claimed he had worked for 4-5 hours, the Applicant is also said to have stated that it had been a quiet day and his work had been completed and he decided to stay at home after going home for lunch. He also stated, it is said, that he decided to do this because of his concern for his partner’s condition. 65
[67] The Applicant also said that he had been called out for 15 – 30 minutes on the Sunday and because of this he felt he was entitled to go home early on the Monday.66 Ms Jones suggested, however, that at the interview the Applicant stated that he went home for lunch on the Monday and as his work was done, decided not return to work.67
[68] Ms Jones, however, gave evidence that the Applicant had mentioned to her privately in the interview while Mr Ruhle had not been present that he was concerned about the security of his partner and that played a role in why he stayed at home after lunch on Monday, 9 March 2009. The Applicant informed Ms Jones that he wished to keep this information from Mr Ruhle.68 That information is largely as the Applicant put it above.
[69] Following Mr Ruhle’s return to the interview, the Applicant also proffered an explanation that he had stayed at home on the Monday afternoon for reason that he had worked the previous day (for a brief period of between 15-30 minutes). Ms Jones had commented to him after he had mentioned this explanation that this appeared to be a considered decision and should have been readily recalled before this point in the interview, given his movements had been subject to close scrutiny since 11 March 2009.69
[70] The Applicant also contended at the interview that he spent 60% of his time away from the Respondent’s Cairns office and about 40% on the premises, where he said he used his landline telephone.70
[71] The Respondent it appears reached a view that the level of mobile telephone usage and the origin of those calls was such that the Applicant was not on the premises to the extent that he claimed.71
[72] The Respondent also claimed at the interview, so Ms Jones recorded, that he did not work from home very often and did not take time off from work with any regularity.72 Ms Jones had queried the Applicant if this was so, why did so many of his mobile telephone calls originate from White Rock, which is near to his place of residence.73 Moreover, the telephone records did not appear to tally with the claim by the Applicant in his interview on 16 March 2009 that he used the landline whilst at work, but only used his mobile telephone in external situations, such as when he was home. 74
[73] There also appears to have been an exchange between Mr Ruhle and the Applicant about the hours of work expected of an Area Manager. The Applicant claimed that Mr Hay had originally told him that as long as he worked 40 hours each week he could chose when those hours were worked. Mr Ruhle had heard of no such arrangement.75
[74] When the Applicant was asked why he had stated that he had visited certain clients on particular dates but that his mobile phone records showed he was still within the Cairns central area, the Respondent claimed that the Applicant stated that he did not realise that he had been required to personally visit clients, as opposed to telephoning them, despite some recollection of his training (most recently in 2006) that this was the Respondent’s requirement of its Area Managers.76 This express matter, it was claimed, had also been the subject of the prior performance interview with Mr Ruhle, who had indicated it was an area in which the Applicant had been deficient.77 The Applicant’s evidence in relation to these claims is set out above.
[75] The Applicant denied he had made such admissions and rejected claims he knew he was required to conduct personal calls exclusively.78
[76] The further evidence led by the Applicant included evidence from the former National Sales Training and Development Manager for the Respondent (Mr Eugene Pizzolato) that he had advised the Applicant (in conversation in 2003) to place telephone contacts with clients on his call plan report. Mr Pizzolato so claimed because while the contact had not been personally, some such calls may be substantial enough to warrant inclusion on the record as a matter of common sense.79
[77] The Applicant’s movements on Tuesday, 10 March 2009 were also questioned. The Applicant claimed he had started work at 7.30am. Mr Ruhle informed him he had seen him driving away from his home at about 9.00am that same day. It appears that this exchange went through no further development as the Applicant considered the Respondent was “spying” on him and the Respondent considered it was carrying out an audit no less common than applied to all Area Managers.80
[78] In respect of his movement on Tuesday, 10 March 2009, the Applicant did lead evidence in these proceedings to rebuff the suggestion that he did not perform any duties on that day. That evidence was provided by Mr Peter Laifoo of IBIS, and went to a record Mr Laifoo kept of a visit by the Applicant to him on the early afternoon (1.30pm-2.00pm) of 10 March 2009.81 This evidence went unchallenged (as the Respondent’s argument was about the honesty with which the Applicant had reported his movements earlier in the morning, not in the afternoon – about which there is further discussion below).
[79] At the conclusion of the interview, the Respondent reached the view that the Applicant had been less than honest in his explanations for his conduct, particularly on Monday, 9 March 2009 and Tuesday, 10 March 2009.82
[80] The Respondent was also of the view that the Applicant’s mobile telephone records demonstrated that the Applicant was not in the office (and that his non-attendance at the office had not been authorised) and that the calls were not business related calls.83 The Respondent nevertheless suggested the Applicant was not being honest about his general whereabouts. The relationship of trust and confidence between the Applicant and his managers had been brought into serious question, as a consequence, and the Applicant’s employment was terminated that day.84
[81] Ms Jones also gave evidence that while the Applicant had been directed to remove his personal property from the premises, he attempted to remove an allegedly large amount of corporate data and records. Upon Ms Jones discovering this material, he was required to remove it from his box of “personal” possessions. The Applicant is said to have commented that he thought the material and data might assist him in gaining further employment in the Cairns area.85
CONSIDERATION
[82] For the purpose of an arbitration, in determining whether a termination was harsh, unjust or unreasonable, regard must be had to the matters set out at s.652(3) of the Act, which are:
(a) whether there was a valid reason for the termination related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees)
[83] The evidentiary basis to numerous of the allegations made about the Applicant’s conduct is not made out, in my view.
[84] Though questions might be asked about the frequency of the Applicant’s use of the mobile telephone and the point of origin of his calls, and how this reflects on his attendance to his duties and/or his proclivity to be at home instead of his place of work is not, those questions were not answered to any finality in these proceedings.
[85] All I have before me as evidence which has any probity is that the Applicant had access to a mobile telephone, and he made use of it frequently over the days for which records were presented to me. Though the Respondent is suspicious of the conduct of the Applicant, there is little else that I can usefully or relevantly otherwise conclude (on the civil burden of proof) from the materials before me.
[86] That is, I am unable to find that the Applicant:
- was not performing his required duties (his sales figures do not appear to have been below target to any meaningful degree); or
- was attending to the Company’s business instead of the Respondent’s business; or
- made non-business related telephone calls from his work mobile phone; or
- was working from home without the consent of the Regional Manager; or
- was misusing his mobile telephone to contact key clients instead of visiting them personally.
[87] In addition to these matters, I cannot find that the pattern or frequency of or point of origin of his calls:
- was necessarily inconsistent with his claim that he only worked in the office 40% of the time; or
- demonstrates that the Applicant never visited key clients.
[88] In respect of the requirement to visit key clients, at the end of the hearing I am left uncertain as to precisely what expectations had been placed on the Applicant to visit key clients, given it was divulged by Mr Ruhle that the Applicant only needed to contact key customers in some regions of North Queensland and not others. I also remain similarly uncertain as to what the precise expectations were of the Applicant’s hours of work as a manager, and whether they afforded him some autonomy (as the evidence seemed to suggest). It appears, at most, the Applicant, after complaining at a much earlier point in time, was only “encouraged” to work 8.00 am – 5.00pm. 86
[89] I note that over the course of the proceedings it was proven that the Applicant had continued to perform a role in relation his relationship to the Company such that he previously advertised his (the Respondent’s) mobile telephone number on his advertising material. But there is not sufficient surrounding contextual evidence that allows me to draw an inference that the Applicant had misused his company mobile telephone. There may well be suspicion to that end, but a finding made on the balance of probability (that the conduct as alleged occurred) requires more.
[90] It is also difficult to reconcile the Applicant’s claim that he only used his mobile phone outside of the office and spent 40% of his time at his place of work, with regards to his phone usage. I might be suspicious, like the Respondent, of the Applicant’s mobile telephone records in the context of his wider claims about attendance at work. But I was not taken to any pattern of conduct that was able to be adduced for the available mobile phone account records to assist me in drawing a factually-grounded inference in this regard. 87
[91] There is no evidence that the Applicant continued to utilise the mobile telephone number for the same purposes after he had been alerted to the conflict of interest matter. If he had done so an adverse finding may have been open for me to make:
“That's an assumption you're making, isn't it, Mr Ruhle? There's no proof, as it were, that on a particular day or at a particular time he had been engaged in work specifically for One Distribution rather than Nestle?---No. It is an assumption, yes.” 88
[92] In general, Ms Jones believed the Applicant’s explanations for his conduct did not “stack up”. 89 However, despite the level of reasonable suspicion to the Applicant’s conduct gives rise, there is not enough before me in relation to the telephone records to make adverse findings against him in relation to his commitment to the performance of his duties, his attendance to his duties, or whether he was being honest in his dealings with his employer.
[93] Similarly, the evidentiary argument about whether the Applicant was required to record substantive telephone calls or physical calls on clients in his monthly reports was an arid one. I was not taken in any detailed way to precisely where the Applicant had misrepresented his activities. I have reached the view on the evidence that the Applicant believed genuinely that he could report both actual physical calls and substantive telephone calls to clients for the purposes of completing his monthly reports.
[94] Nothing was put to me about the detail of the Applicant’s monthly reports in so far as they misrepresented his actual visits to or substantive telephone contacts with key clients in the regions where he was relevantly required to contact them.
[95] I do consider that the Applicant was aware that the base expectation of his employer was that he was to make physical contact with his clients. He admitted in his viva voce evidence that he was of this view before he was advised by a former Nestle Training Manager, Mr Eugene Pizzolato, that a meaningful telephone contact might be also be reported as a “call”, but Mr Pizzolato’s advice to him was not that he could substitute telephone calls for physical calls at his discretion. The Respondent’s Training Manual makes this sufficiently clear as well.
[96] Notwithstanding this, while the Applicant might have had a view about how to service key clients that was different to that of the Respondent, I could not discern anything in the Applicant’s evidence that he had set out to never to contact key clients personally (in the regions in which he was required to contact them). The evidence did not allow me to draw that conclusion and I was not taken to the pattern of conduct in relation to contacting clients upon which I could make such a finding.
[97] I acknowledge that the Applicant had demonstrably fallen behind in his CSR Workwith targets. The Applicant conceded this himself. 90 But these are not matters that are fatal to his employment and I note that there is no evidence that the Respondent ever engaged the Applicant in any substantive discussion about this matter or how he might be able to achieve the performance target whilst meeting other obligations (or if he indeed fully understood the performance obligation). This was an issue that had only arisen in the then current performance cycle, and before that the Applicant, at least as it appears to me on his previous performance reports, had been a relatively high performing Area Manager against his performance criteria. Ms Jones herself conceded this point.91 Further, in the most current performance cycle, the Applicant had only fallen short of his revenue targets by a very small amount, so his Workwith rates had not as yet impacted on that important performance indicator.
[98] I did, however, find the Applicant’s evidence about his explanation for his movements on Monday, 9 March 2009 and Tuesday, 10 March 2009 to be troubling.
[99] In respect of Monday, 9 March 2009, the Applicant claimed at the hearing that he attempted to provide an extended explanation as to why he had answered “no” to the question whether he had worked a half day on Monday, 9 March 2009, but claimed that when he made an effort to do so he was denied an opportunity by Mr Hay who closed the discussion. 92
[100] The Applicant did not expressly or decisively indicate in his written evidence that he made an effort to provide a further explanation (to explain, presumably, why he claimed that he did not go home early or did not perform a half day’s work on Monday, 9 March 2009) but was curtailed from doing so. 93
[101] Nor in the Respondent’s materials (Ms Jones’ evidence and the records of interview), did his explanation for his response in the interview of 16 March 2009 include such an explanation.
[102] The Applicant’s written evidence 94 was that he had been “flustered” and he did not have his diary with him.
[103] Having heard and considered the Applicant’s evidence, I do not accept his explanation that he attempted to proffer an explanation to Mr Hay for why he answered “no” to the question why he went home early or performed only a half day’s work. The claim by the Applicant does not sit well within his wider evidence and the explanations he gave for his conduct.
[104] The Applicant’s witness statement refers to himself as being in a state of confusion (“flustered” and without his diary) but one of his explanations at the hearing for his response to the question whether he went home early on 9 March 2009 was that he was denied an opportunity to provide an extended explanation. 95
[105] The explanations are incongruent, in my view, from an evidentiary perspective. Why would the Applicant find he needed to give a reason for not answering a question accurately when he had argued that he was never given a chance to give the reason that he knew and was on his mind at the time? The latter explanation does not allow for a state of forgetfulness or dependency on an external record of events.
[106] I am also at a loss as to which explanation the Applicant would have offered Mr Hay and Mr Ruhle in any event, given his distrust of them - a matter about which there is further discussion below. Would the Applicant have given what must have been the “actual;” explanation whatever that might have been – arguably, perhaps, his partner’s sense of insecurity? 96 The answer to this must be in the negative, given the Applicant’s disposition towards both Mr Hay and Mr Ruhle. Would he therefore have continued compound a deception if he had been given a further opportunity to provide an explanation to his managers? It would be reasonable to infer that it is most likely he would have done so.
[107] I note also that there are passing inconsistencies or discrepancies between the evidence of the Applicant and his partner in relation to the precise content of some of the relevant events.
[108] One example concerned how the Applicant’s partner contacted him on Monday, 9 March 2009, which was an occasion on which she says she was distraught. The Applicant stated in his cross examination that his partner, Ms Green, “rang him” 97 and indicated she was “concerned” about suspicious conduct outside their house. Ms Green, in her evidence, stated that she was in an elevated emotional state and not being able to contact the Applicant on either his mobile phone or his work land line, drove to the Applicant’s office to see him personally.98 It is unusual that such a personally intense event was recounted inaccurately and in this manner.
[109] Another example was that the Applicant gave evidence in the interview of 16 March 2009 that he took, perhaps, one afternoon off per month or two afternoons in a row consecutively and then none for a month and otherwise went home for lunch in order to remain close to his partner. The Applicant’s partner, however, was adamant that the Applicant never came home early to spend time with her. 99 The Applicant and Ms Green’s evidence was not as mutually supportive as would be anticipated.
[110] Overall, and having heard the witnesses, I prefer the evidence of Mr Hay and his material, particularly the contemporaneous record of the conversation on 11 March 2009 (compiled some hours after the interview with the input from Mr Ruhle) to the Applicant’s account of events that day. 100
[111] I should add that I do not accept the proposition put to me by Counsel for the Applicant that all the Applicant’s various explanations for his conduct on Monday, 9 March 2009 are compatible, in so far as the Applicant was motivated by multiple influences.
[112] It appears to me on the evidence that that the Applicant merely provided a range of convenient explanations to conceal what might have been an actual reason for going home early, whatever that might have been.
[113] As Ms Jones rightly observed when giving her evidence, the Applicant’s explanations for his conduct (in going home early on the Monday) simply became more numerous and differentiated over time and less credit-worthy for that. 101 His reasoning extended from casual responses to his immediate workload (it having been a quiet day and having finished his work) to urgent reactions to his partner’s safety, to more considered and planned reactions to the fact that he claimed to have worked for a short period on the immediately prior Sunday, and was taking some time off in lieu, in effect.
[114] I have read various statements (and their annexures) in this matter and heard the witnesses for both sides in relation to this matter and the totality of the evidence about what questions were put to the Applicant and what his replies were. I prefer the evidence of the Respondent, and particularly that of Ms Jones, who maintained closely detailed notes of the record of interview (of 16 March 2009). Ms Jones also had a practice in her interview of summarising the proceedings at various stages, which is a means of ensuring matters of detail were not lost and focus was retained on the full range of issues. This is a credible record of the discussions between the parties.
[115] I accept Ms Jones and Mr Ruhle’s evidence that the Applicant gave a series of distinct explanations for his conduct on Monday, 9 March 2009. His viva voce evidence added to the explanations that he has given to explain his conduct (as discussed above).
[116] It appears to on the evidence, therefore, that the Applicant was less than forthcoming about his movements on Monday, 9 March 2009, and in the end, proffered numerous explanations for his conduct, which had the not uncommon effect of undermining the credibility of all his explanations.
[117] What can be made of the Applicant’s evidence in relation to his conduct on Tuesday, 10 March 2009?
[118] On that day the Applicant, in his interview with Ms Jones and Mr Ruhle stated he started work at 7.30am. Mr Ruhle however had a diarised notation that he had seen the Applicant and his vehicle leaving his home at 9.00am that same morning. Mr Ruhle’s diary recorded other vehicle movements that morning.
[119] At the interview on 16 March 2009, the Applicant provided no evidence in support of his attendance at work on the Tuesday at the time he stated (which was the immediately preceding week). The Applicant claims that he did, and that Ms Jones’ record of interview is incomplete or dishonest.
[120] I doubt the Applicant’s claims. Ms Jones did not recall the Applicant making any mention of the presence of Mr Travers (warehouse worker) and her statement, her typed record of interview and hand written notes make no reference to Mr Travers’ role in relation to the Applicant’s explanations for his movements on 10 March 2009. 102
[121] That said, for the purposes of these proceedings, the Applicant led evidence through Mr Travers that Mr Travers had come to work on the morning of 10 March 2010, even though he was officially on sick leave, to communicate certain logistics matters to the Applicant, who was present at his place of work at the time.
[122] Mr Travers gave evidence that the Applicant came into work for a very short period between 8.00-8.30am on Tuesday 10 March 2009, gave what must have been uncomplicated procedural advice to the Applicant about a weekly orders practice (in which the Applicant was no doubt highly experienced given his 20 year tenure with the Respondent) and then left to attend a medical appointment at 9.00am.
[123] I approach his evidence, in its own right, with caution, given Mr Ruhle’s contrary evidence which is buttressed by his diarised notes.
[124] But taken with the Mr Travers wider evidence, I view it in a more critical light still.
[125] Mr Travers’ gave evidence (contrary to what Mr Hay claimed Mr Travers stated to him in 2008) that the Respondent’s forklift was unreliable (and therefore justified using the hiring the Applicant forklift from the Company. 103 Mr Travers’ evidence under cross examination varied from saying the Respondent’s forklift was “always out of order”104 to it being unreliable “very regularly” but not on a “daily basis”, to the forklift having been unreliable “a bit more regularly than now and again”.105 Whereas the Applicant’s evidence in relation to the forklift was that - “Every day it was breaking down”.106
[126] The forklift has been used ever since it was repaired and has continues in service. But Mr Travers still maintained under questioning that it only works “on and off” to this day, though there has been no need to replace it. 107
[127] Mr Travers also maintained that the repairs to the Respondent’s forklift (which have allowed it to operate from 2008 to this time it appears) amounted to “well over $5000 to $7000 to restore the Respondent’s forklift to a workable condition (which it plainly did not). The evidence of receipts I have accepted in these proceedings demonstrate that the forklift was repaired for an amount of slightly greater than $500.00. 108
[128] I have set aside Mr Travers’ evidence. Having heard his evidence, I have found him not to be a credible witness, and not just because of his casual approach to responding to questions. In the best light, Mr Travers’ recollections are unreliable and his claims lack consistency or otherwise are not based on direct knowledge of events now 12 months past.
[129] I return now to the Applicant’s evidence.
[130] Is there any reason why the Applicant made no mention of Mr Travers’ apparent role as a witness for his attendance at work on the morning of Tuesday, 10 March 2009 in the interview of 16 March 2009?
[131] I have no doubt that any mentally competent individual such as the Applicant would have recalled such a significant supporting event such as this at the time the issue came into contest, particularly given the small amount of time that had passed (between Tuesday, 10 March 2009 and Monday, 16 March 2009).
[132] Such an explanation would have put Mr Ruhle’s queries at the interview of 16 March 2009 about his movements to rest completely, and would have featured in Ms Jones’ extensive record of interview – both the handwritten and typed versions. It did not. And it did not because I am of the view the Applicant never proffered any such evidence at that time of events that were then only very recently in his mind (that is, six days prior). The claim that Ms Jones’ might have omitted such an element from the record of interview is unsustainable, particularly given her propensity to summarise the detail of all parties’ position as she worked through the day long interview.
[133] Further, in my view, Mr Ruhle’s diarised notations, taken up as evidence, are to be believed as to the Applicant’s movements on the day in question and that the Applicant misled or was not entirely honest with his employer as to his movements on the morning of Tuesday, 10 March 2010. Mr Ruhle’s observations that day against his diary note were tested under cross examination and was unmoved and otherwise gave me no reason to question either his then contemporaneous record of the Applicant’s movements or his recall of that day’s events.
[134] I will make no finding or comment in relation to what, if anything, has transpired between Mr Travers and the Applicant since the Applicant’s termination and this hearing.
Can a finding of a valid reason for the termination of the Applicant’s employment be founded upon the evidence discussed above?
[135] It appears to me that an employee who works with considerable in autonomy, which must be anchored in trust, puts their employment relationship in jeopardy when they are not honest with their employer.
[136] The Applicant is such an employee.
[137] I have found that he has acted to mislead his employer about his movements on both 9 March 2009 and 10 March 2009, and given the degree of autonomy he is required to exercise in his position, he acted to destroy the requisite trust that underpins the employment relationship. In this sense, the Respondent had a valid reason for the termination of the Applicant’s employment.
[138] While I have so concluded, this is not the end of the investigation I must make on the way to a finding as to whether the Applicant’s employment was terminated harshly, unjustly or unreasonably.
(b) whether the employee was notified of that reason
[139] The termination of the Applicant’s employment culminated after an all day interview, which traversed the Applicant’s conduct across a spectrum of issues. The discussions were extended and Ms Jones’ record of interview reveals a practice whereby the points under discussions and in contest were periodically summarised and the Applicant’s views sought on that summary.
[140] At all times, the Applicant was reasonably informed about the issues about which he was being challenged. There can be no doubt that the Applicant must have recognised that the purpose of the very extended interview and the nature of the inquiry into his conduct jeopardised his employment.
[141] There would be no reasonable basis to conclude otherwise given the terms on which the discussions of 11 March 2009 had concluded (with Mr Hay stating the matter was now in the hands of the Respondent’s Human Resources Department).
[142] The decision to inform the Applicant of the reasons for the termination of his employment came at the end of the interview, and in the context of the decision to terminate his employment.
[143] I could not say that the Respondent notified the Applicant in advance of the reasons for the decision to terminate his employment. The reasons and the decision arose in the same communication.
[144] But that said, those reasons had been the subject of an all day discussion-come-inquiry. It could hardly be said that the Applicant stood unaware of his circumstances and the reasons for them when the Respondent announced its decision.
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee
[145] As explained above, the Applicant’s conduct was the subject of an all-day interview. In a narrow and formal sense, the Respondent did not give its reasons for considering the termination of the Applicant’s employment, and then permit him an opportunity to respond. The interview procedure was such that the Respondent tested the Applicant’s claims through very extended discussion and then announced its decision to terminate his employment on the basis of its findings.
[146] But that said, I cannot find that this interview procedure denied the Applicant an opportunity to ventilate all his claims and counter claims and put forward his views comprehensively in an effort to dissuade his employer from forming an adverse view of him. The Applicant was also afforded two opportunities to have a support person, but declined the opportunity to do so.
[147] In this sense, it could not be said that the Applicant was denied procedural fairness by his employer. There was little about the all day interview that was perfunctory.
(d) if the termination related to unsatisfactory performance by the employee—whether the employee had been warned about that unsatisfactory performance before the termination
[148] Issues of performance were raised over the course of the proceedings. I have not found them to be sufficiently demonstrated to warrant consideration. It would appear that the Applicant’s employment was terminated exclusively for reason of his conduct, as the Respondent believed it to be, not the performance of his duties as such.
(e) the degree to which the size of the employer’s undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination
[149] The size of the Respondent’s undertaking did not impact negatively upon the procedures it followed in effecting the termination of the Applicant’s employment. Nor is it likely to have given the operation of s.643(10) of the Act.
(f) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination
[150] No issue arise in this regard. The Respondent did not labour under any absence of dedicated human resource management specialists or expertise. The interview which led to the termination of the Applicant’s employment was conducted by the Respondent’s National Human Resources Manager. The decision to terminate the Applicant’s employment was made by that same Manager. It follows that there was no negative impact on the procedures followed in effecting the termination arising from the absence of such resources.
(g) any other matters that the Commission considers relevant
[151] Consideration needs to be given to the extended period of the Applicant’s employment with the Respondent. That period was in excess of 20 years. The termination of a long serving employee might warrant careful consideration for reason of the productivity that he has brought to the business (and the Applicant in this matter was clearly over time a contributor in this regard, given his performance assessments). 109
[152] The fact that the termination of the Applicant’s employment, after such a long period of time of continuous employment and for the issues I have discussed, was a summary termination is also an important consideration. These are circumstances that support a finding of harshness in relation to the Respondent’s decision making.
[153] Equally, however, a senior employee with a deep knowledge of and commitment to his employer may be expected to give honest and direct answers to questions about his conduct when challenged by that employer.
[154] I have noted above that there are some imperfections in relation to the procedural opportunities extended to the Applicant.
[155] But these are not so profound as to conclude the Applicant was deprived of some right or opportunity that would have impacted on the decision making process such that the Respondent’s decision making may have may have yielded a different result. The interview process was far from perfunctory and it cannot be said to have denied the Applicant an opportunity to understand and respond to the issues of concern held by the Respondent.
[156] Were there wider circumstances that militate against a summary dismissal, or else give deeper context to the Applicant’s conduct than I have found it to be for purposes of a valid dismissal?
[157] I think the context of this matter (or the characterisation of the Applicant’s conduct) gives rise to important nuances which affect the global finding of whether the termination of the Applicant’s employment was harsh, unjust or unreasonable.
[158] It is necessary to keep in mind that the relevant issues of trust and honesty arose over two demonstrated incidents: one concerned whether the Applicant went home early from work (at or about lunch time) on Monday 9 March 2009; and the second concerned his claim to have arrived at work at or about 7.30am on Tuesday, 10 March 2009. In both instances I have found the Applicant’s evidence to be wanting and have found that he misled his employer.
[159] I do not think these offences, however, constitute grounds for the dismissal of the Applicant, when placed in the context.
[160] In the first instance, the damage done to the Applicant by the deceit was slight, indeed if measurable at all. The question it raised was more one of ongoing honesty and trust.
[161] This, considered objectively, is a matter that might be reason for subject of disciplinary sanction (particularly as on one explanation, that he was taking time off in lieu, the Applicant accepted that he should firstly notify his Area Manager before so doing). 110
[162] Indeed, it was not a matter for which, in its own right (as a single issue), that Ms Jones, as HR Manager, would have considered terminating the Applicant’s employment. 111
[163] If the Applicant had sought permission to work flexibly on these and other occasions, it is unlikely that this would ever have been denied to him: given his role, length of service and seniority, and the obligations to work extended and\or variable hours, and with a partner in need of some care, such opportunities would have been approved by Mr Ruhle. The evidence about Mr Ruhle’s disposition in these regards supports this finding. 112
[164] In relation to the incident of Tuesday, 10 March 2009, putting aide the Applicant’s dishonesty in representing the hour at which he started work that day, there is no suggestion that as an Area Manager the Applicant had to observe prescriptive start and finish times each day. Again, if the Applicant had been honest with his employer as to the time he started work that day, it is unlikely, it may be reasonably inferred, that any issue of great note would have arisen between him and his employer.
[165] While the Applicant’s conduct brought into question his honesty and trustworthiness in the context of a position that required considerable autonomy (which I have found to constitute a valid reason for the dismissal), was the Applicant's conduct (as I have contextualised it above) so extreme so as to warrant the termination of his employment?
[166] Ascertaining the Applicant’s motivation might be important in this regard.
[167] On one view, the Applicant, because of his anxiety about his relationship with the Respondent following having fallen into difficulties over (and since) the conflict of interest allegations and his long held distrust of his employer (about which I will say more below) might be said to have acted defensively under questioning by his employer.
[168] The evidence, if this motivation was assumed, suggests that the Applicant became ensnared in his own anxieties and acted to conceal information he feared would jeopardise his employment (but which in reality would unlikely to have had that effect if he had acted honestly).
[169] This is a contextually or materially different consideration to an employee who sets out with the sole intention to deceive an employer about conduct he knows to have been inappropriate or objectionable, or who acts wilfully in order to secure an undeserved benefit.
[170] Equally, the Applicant might have acted to conceal his movements in order to conceal a wider pattern of conduct relating to his pattern of attendance at work, which he felt might have jeopardised his employment.
[171] The evidence that has been led does not take me in any conclusive way to the Applicant’s motivation. That will always be a matter of speculation.
[172] As a consequence the Applicant’s motivation in acting dishonestly is not a matter that affords any context for any consideration in relation to whether his employment was harshly, unjustly or unreasonably terminated.
[173] That said, issues will arise from the above discussion which are relevant to other considerations in determining more widely whether the Applicant’s employment was harshly, unjustly or unreasonably terminated, and any remedy he may be afforded.
CONCLUSION
[174] Though my judgement might be finely balanced, I am of the view that in all the circumstances, and having regard to all the matters to which the Act obligates me to consider, the Applicant’s employment was harshly, unjustly and unreasonably terminated.
[175] In so deciding, I make reference to:
- The Applicant’s very long period of service to the Respondent;
- The summary nature of the termination of the Applicant’s employment; and
- The acts of dishonesty concerned two days, one of which related to a period of time in respect of which the Applicant could have taken time off in lieu, and the second concerned what may have been the Applicant’s actual start time (in the context in which actual start and finish times may have been variable).
REMEDY
[176] Section 654(1) of the Act empowers the tribunal to make an order for a remedy in relation to applications made under s.643 of the Act.
[177] Section 654(2) of the Act requires the tribunal to have regard to a range of matters before such time as it reaches a determination to order a remedy under the terms of 654(1) of the Act.
[178] These various requirements at s.654(2) of the Act, include:
(a) the effect of the order on the viability of the employer’s undertaking, establishment or service; and
(b) the length of the employee’s service with the employer; and
(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee’s employment had not been terminated; and
(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and
(e) any other matter that the [tribunal] considers relevant;
that the remedy ordered is appropriate.
[179] In respect of s.654(2)(a) of the Act, there is no evidence before the tribunal that any order as might be contemplated by the tribunal in this matter would so affect the employer’s undertaking, establishment or service.
[180] As required by s.654(2)(b) of the Act, I have had regard to the Applicant’s service with the Respondent. The Applicant was employed for a lengthy period of time with the Respondent; in excess of 20 years. All other things being equal, this fact on its own favours making an order for a remedy.
[181] In relation to the matters in s.654(2)(c) of the Act, I am sufficiently satisfied that the Applicant’s total remuneration package was in then order of $91,080.
[182] Would this remuneration have been sustained indefinitely? I suspect not. The Applicant’s degree of mistrust in his managers and his dislike for the Respondent’s business culture in the context of the deteriorating relationship between the Applicant and his employer after March 2008 does not suggest his employment was likely to be sustained for a long period. Supporting this is the view of Mr Hay, the State Manager, that he held the view that the Applicant’s employment should have been terminated for reason of his (the Applicant’s) failure to disclose his status in respect of the Company and the conflict of interest in which it embroiled him.
[183] In my view the Applicant is likely to have been employed for a period of a further six months at the outer limit because of the sharp deterioration in the relationship with the Respondent over the past two years about which there is further discussion below. Consequently, “the remuneration that the employee would have received, or would have been likely to receive, if the employee’s employment had not been terminated” amounts to $45,540.00, the basis of which is discussed below.
[184] In respect of s.654(2)(d) of the Act, the Applicant’s evidence was that he had attempted to mitigate his loss. From the time of the termination of the Applicant’s employment on 16 March 2009 to the time of the hearing of the application, the Applicant received some $15,000.00 in remuneration. This appears to have been remuneration derived from his involvement in the Company (for “management fees”).
[185] This is a very modest income for such an extended period of time. It is a matter of very considerable mystery to me how the Applicant has survived for this lengthy period of time on such a very meagre income stream, with no second income and, given that nothing was put to me at the hearing, no social welfare payments of any kind.
[186] The Applicant states that he has otherwise been unable to obtain employment during the period since the termination of his employment.
[187] The Applicant contends that he has cared for his partner as she recovered from a back injury arising from a car accident and has also cared for their new born child and his one job interview was not successful. 113
[188] In this regard I note the cautionary comments by the Full Bench in Re:Sulocki (in the context of claims relating to efforts to mitigate) as to the need to properly establish relevance of an claim before it is accepted and accorded weight:
It seems clear that the Commissioner decided not to discount the award to Ms Sulocki and Mr Titford for any failure to mitigate because of the evidence that they were single parents who were looking after their children. While the fact of being a single parent is a matter which may be taken into account in considering mitigation, it does not, in our view, entirely absolve the party from the obligation to make some effort to mitigate their loss. The primary question is whether the party has acted reasonably. As Madgwick J stated in Westen v Union des Assurances de Paris , "[t]he party claiming damages need only act reasonably." To what extent then were the parents' alternative arrangements during employment a financial burden, and what other obstacles or limitations preclude the person from making any attempt to find alternative work? Those questions do not appear to have been addressed.
[…]
The Commissioner appears to have accepted that their parental responsibilities absolved them from their obligation to mitigate. While we are prepared to accept the proposition that parental responsibilities may be a relevant consideration in assessing compensation for harsh, unjust or unreasonable termination of employment, it cannot, in all cases, be a proper basis for excusing a failure to make any effort to mitigate. This is particularly so where there is entitlement to financial assistance by way of social security for single parents. Each of Ms Sulocki and Mr Titford gave evidence that they were in receipt of single parent payments for childcare. Single parenthood cannot be accepted as an excuse for failure to attempt to mitigate their loss. If that status did in fact prevent them from seeking employment it would also have impacted on their ability to continue to work for the appellant had their employment not been terminated. 114
[189] There is nothing before me that tells me how many job interviews the Applicant has sought and undertaken in the 12 month period since the termination of his employment.
[190] The Applicant’s legal representative recounted that that the Applicant had been for an (unsuccessful) interview in October 2009 and had some occasional work as a truck driver. 115
[191] Given that his partner was injured prior to the termination of his employment and that he was caring for her at that time, I do not know what new circumstances might have arisen thereafter and whether the Applicant could have continued work for the Applicant or otherwise have had to take very extended leave.
[192] In all, the evidence in mitigation (which the Full Bench cited above considered must be made out on the evidence) is slender, and is not a strong, motivating force to make an order for remedy.
[193] Finally, I am required by s.654(2)(e) of the Act to have regard to any other matters that may be relevant and am satisfied that all relevant matters have been addressed in my reasons above.
[194] Overall, I am persuaded in the circumstances (though it might be a matter of fine balance) to make an order for remedy.
[195] I am next required to consider the requirements of s.654(3) of the Act, which reads as follows:
If the [tribunal] considers it appropriate, the [tribunal] may make an order requiring the employer to reinstate the employee by:
(a) reappointing the employee to the position in which the employee was employed immediately before the termination;
(b) appointing the employee to another position in terms and conditions no less favourable than those on which the employee was employed immediately before the termination.
[196] Having regard to the circumstances of this case identified above, I do not elect to exercise this discretion to reappoint or appoint the Applicant on either of the grounds specified in s.654(3) of the Act.
[197] Over the course of the proceedings, the Applicant himself indicated that he held particular views about the culture in which he worked (over his extended period of employment) and his immediate managers:
THE SENIOR DEPUTY PRESIDENT: Can I just ask the witness, putting aside what you were saying about the actual incident, when did you form the view about Mr Ruhle's untrustworthiness?---I'd been there for quite a long time. I suppose it's, you know, just the culture within the business. It was very unprofessional and very muck-up. They'd send emails around the business being discriminatory and having goes at each other, like other area managers. It was just, you know, like schoolyard stuff, and I've maintained fairly constant professionalism, and I didn't like it. There was a lot of joking, and I suppose that's why they said I wasn't a team player, and when it come to personal information, I just made a decision that I didn't want to disclose my of my personal life any more to Daryl or Eric.
Sorry, when was it said you weren't a team player?---That was stated on the meeting in Green Island. Eric had said that I wasn't a team player, that I hadn't come down to meetings to Brisbane.
Sorry, your distrust of Mr Ruhle arose, what, over an extended period of time?
---Yes.
Over what, a year, two years, three years?---Several years, yes. It was just not so much - you know, more so Mr Hay, but also Mr Ruhle, but Mr Ruhle would tell Mr Hay everything. It was mainly Mr Hay that I just didn't trust that he'd keep it sensitive.
So you didn't trust Mr Hay as well as Mr Ruhle?---Mainly Mr Hay, but Mr Ruhle would tell Mr Hay everything. So that was the common link why I wouldn't disclose - - -
This is something that had developed over a period of years - - -?---Yes.
- - - your distrust of those individuals?---Yes. 116
[198] The Applicant also indicated that the depth of his distrust of Mr Ruhle (which seems to have been of a lesser degree than his distrust of Mr Hay) was nonetheless of such a degree that he would not bring to Mr Ruhle’s attention issues that had direct bearing on this case:
“THE SENIOR DEPUTY PRESIDENT: Can I just ask the applicant, what was it about the circumstances of this former employee that made it so sensitive? I mean, there was a former employee who had made a threat against you?- - -Yes, it's mentioned in the statements of Mr Leon Foley that was dismissed, I think, about June of 2008. And a friend of his had actually rang up the - you know, he'd given them the work mobile number which I had and he rang up. It would've been about one or two in the morning, and just started threatening me, "You sacked my friend Leon. I'm going to rape your partner, Sarah, and kill you, rip your head off", and you know, they were pretty horrible allegations. I actually recorded it on the mobile and went to the - we went to the police and filed a complaint at the time.
Why wouldn't you inform a manager reasonably of such an action being taken by a former employee, to whom you had exercised a managerial decision?---I just did not trust Darryl with personal information, with, you know, like, you know, prior examples. Stuff had been said to - you know, within the business to other managers, and I just - you know, you go down and things - whispers. There were a lot of, you know, Chinese whispers in the business and I just didn't want that to go out into the business.” 117
[199] These admissions, set in vague and unsupported terms, sit uncomfortably with the Applicant’s claim that up until March 2009 he had a good relationship with the Respondent, as discussed above. They do not support the credibility of the Applicant’s overall evidence whatsoever.
[200] The admissions themselves reflect on the Applicant’s dislike of the company culture in general, and his particular distrust of Mr Ruhle, his Regional Manager, and even more so Mr Hay, his State Manager. His distrust of his managers (as I noted above in my discussion) was such that he would not divulge the circumstances of a threat levelled against him and his partner as a result of a decision taken legitimately on behalf of the Respondent (and which stood in the way of providing a complete explanation for his conduct on Monday, 9 March 2009). His dislike of the Respondent’s culture and his particular distrust of his Area and State Managers appears to have built up over several years.
[201] I very much doubt in such circumstances that the reappointment, or the appointment, of the Applicant to any position (be it his original position or an alternative position) with the Respondent’s workforce would result in a durable, productive and cooperative relationship. In view of this, I do not think that it is appropriate to re-appoint or appoint the Applicant to the same or a similar position with in the Respondent’s company.
[202] I am nonetheless of the view that I should make an order in respect of s.654(7) of the Act, which reads as follows:
If the [tribunal] thinks that the reinstatement of the employee is inappropriate, the [tribunal] may, if the [tribunal] considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay the employee an amount ordered by the [tribunal] in lieu of reinstatement.
[203] Having regard to the provisions of s.654(8) of the Act, I am of the view that any order that might be made in this respect would not affect the viability of the Respondent in any respect, and would be compatible with the other considerations there enumerated.
[204] In respect of s.654(8)(d) and (e) of the FW Act, I make the following comments.
[205] With respect to determining the amount to order the employer to pay the Applicant, I refer to the approach in the Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul's Licensed Festival Supermarket (1998) IR 21 (“Re: Sprigg”).
[206] The steps referred to in Re: Sprigg are as follows:
“STEP 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment.
STEP 2: Deduct moneys earned since termination. Workers compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation awarded.
STEP 3: The remaining amount of compensation is discounted for contingencies.
STEP 4: The impact of taxation is calculated to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
STEP 5: The legislative cap on compensation is applied. Section 170EE(3) limits the Court and the Commission to an amount not exceeding the amount of remuneration that the employee would have earned in the six months immediately following the termination, if the termination had not occurred.” [My emphasis]
[207] Following this approach I come to the following conclusions:
[208] The Applicant would have earned a further $45,540.00 if he had remained in the employment of the Respondent. My reasons for reaching this view are set out earlier.
[209] The Applicant therefore would have had an expectation of earning a further six months remuneration.
[210] There has been some contest between the parties following the hearing whether or not a monthly bonus paid each month should form part of the Applicant’s remuneration. I have not been able to be satisfied, at the time the various exchanges between the parties had concluded, that the monthly bonus is indeed contingent or, perhaps more so, that the Applicant would not have been entitled to that bonus on the basis of the sales achievements prior to the decision to terminate his employment. In any event, I was not taken to any particular personal contractual relationship between the parties as to this matter. All I am able to rely upon is the total remuneration received by the Applicant in the preceding 12 month period, which appears to have included a regular, monthly payment of bonus.
[211] From the amount of $45,540.00 I deduct his remuneration earned since the time of his dismissal up until the effluxion of the period for which I have found the Applicant would have worked for, but for the termination of his employment been employed, which is six months. I adopt this approach not simply as a common sense measure, but because it is the approach adopted by the Full Bench in the appeal by N Ellawala 118:
“Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the “anticipated period of employment”. This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the “anticipated period of employment” are deducted. An example may assist to illustrate the approach to be taken.
In a particular case the Commission estimates that if the applicant had not been terminated then he or she would have remained in employment for a further 12 months. The applicant has earned $3,000 a month for the 18 months since termination, that is $54,000. Only the money earned in the first twelve months after termination - that is $36,000 - is deducted from the Commission’s estimate of the applicant’s lost remuneration. Monies earned after the end of the “anticipated period of employment”, 12 months after termination in this example, are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.” 119
[212] The Applicant’s taxation records reveal he earned $15,000 in income since the termination of his employment. This is uncontested.
[213] My examination of his earnings records reveals that he received three payments, each for $5,000.00 (as payment of managements fees from his company, One Distribution), which total the $15,000.00 referred to above. However, I have discerned that all three of these payments were made late in the year 2009 and early in 2010. That is, none of the payments were made in the six month period immediately subsequent to the termination of the Applicant’s employment. The first of the payments were made on 18 November 2009, seven months after the Applicant was dismissed by the Respondent.
[214] In my view, none of the Applicant’s earnings since the time of the termination of his employment can be deducted from the remuneration he would have received but for the cessation of the employment relationship.
[215] I have, however, further discounted the Applicant’s anticipated earnings, perhaps conservatively, by a further 40% to take account of the deficiency in relation to the Applicant’s efforts to mitigate his losses over the period since the termination of his employment. That 40% indicates the period of time within the six month period within which I consider it to have been reasonable to have expected the Applicant to have mitigated his losses, taking account of the period he seemingly spent assisting his wife during her recovery and the time allocated to the one position for which he made unsuccessful application.
[216] This leaves $27,324.00.
[217] The s.654(10) of the Act requires me to have regard to the conduct of the Applicant which contributed to the decision to terminate his employment for purposes of determining the quantum of any remedy:
“If the [tribunal] is satisfied that misconduct of the employee contributed to the employer’s decision to terminate the employee’s employment, the [tribunal] must reduce the amount it would otherwise fix under subsection (7) by an appropriate amount on account of the misconduct.”
[218] I have discussed at length above my findings which demonstrate that the Applicant’s failure to be direct and honest with the Respondent contributed to the decision to terminate his employment, notwithstanding my contextualising commentary in that regard. But for that conduct, as I have found, the Applicant would have been likely to have remained in the Respondent’s employment (for at least a further six months).
[219] The Applicant’s conduct on 11 March 2009 and his subsequent failure to provide direct and honest answers to questions, particularly in circumstances where he performed the duties of an Area Manager and enjoyed considerable autonomy, are serious matters. That conduct triggered the very process that led to the termination of his employment. I consider that it is appropriate, in such circumstances, that I discount the Applicant’s potential earnings by 60% for reason of his contributing conduct. A discount of this magnitude reflects the significant contributing measure of causality for which the Applicant is responsible in relation to the circumstances that befell him.
[220] I have not in the circumstances of this case found appropriate to discount the Applicant’s remuneration for contingencies. Nothing was put before me that enabled to me to found any contingencies. For example, there was no evidence that the Respondent’s business suffered a downturn subsequently, or had to reduce employee numbers, and I am not otherwise satisfied that the Applicant would have had his income reduced by some vicissitudes or one kind or another in a six month period from the date of termination.
[221] Arguably, his need to attend to his wife as she recovered from injury and gave birth might have impacted upon the Applicant’s earnings potential, but there was nothing put to me about the availability of paid leave arrangements, and I am not inclined to simply assume there were no such arrangements at the Applicant’s disposal.
[222] This leaves $10,929.60. This is an amount under the so-called legislative cap, and no further adjustment to the amount is warranted.
CONCLUSION ON REMEDY
[223] The order that I make in remedy, therefore, is that the Respondent must pay the Applicant within 14 calendar days of the order in relation to this decision being published an amount in lieu of reinstatement of $10,929.60 as a gross amount (with the ordinary issue of taxation being left to the parties).
SENIOR DEPUTY PRESIDENT
Appearances:
Mr J Jacobs of Counsel instructed by Gayler Cleland Lawyers for the Applicant
Mr D Miller of the Australian Industry Group for the Respondent
Hearing details:
2010.
Cairns;
24 and 25 March.
1 This matter is dealt with and the decision is published by Fair Work Australia pursuant to Section 11, Part 2, Schedule 18 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
2 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 3
3 Statement of Mr Eric Hay dated 11 March 2010 at PN 2
4 Although it is not set out in the summary of evidence below, the Applicant nevertheless contended that his monthly reports indicated he did make efforts to work periodically with his drivers, though this did not meet the required performance target. See Supplementary Statement of Mr Shane Kennedy dated 23 March 2010 at PN 9
5 Statement of Mr Eric Hay dated 11 March 2010 at PN 2
6 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 51
7 Supplementary Statement of Ms April Sharkie dated 18 March 2010; Statement of Mr Shane Kennedy dated 10 February 2010 at PN 25 and Attachment 1 being a Letter of Appointment dated 30 October 1998; Statement of Ms Sarah Green dated 8 February 2010 at PN 16-17
8 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 3 and 29
9 Transcript of Proceedings dated 24 March 2010 at PN 99 to 106
10 Transcript of Proceedings dated 24 March 2010 at PN 163 and 166
11 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 4 and 6
12 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 12, 28-29; Supplementary Statement of Mr Shane Kennedy dated 23 March 2010 at PN 7
13 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 8, 28 and Attachment 2
14 Supplementary Statement of Mr Shane Kennedy dated 23 March 2010 at PN 4 and 5
15 Statement of Ms Annette Bourke dated 19 March 2010
16 Transcript of Proceedings dated 24 March 2010 at PN 297 - 300
17 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 12
18 Statement of Mr Shane Kennedy dated 10 February 2010 PN 13
19 Statement of Mr Shane Kennedy dated 10 February 2010 PN 13
20 Statement of Mr Shane Kennedy dated 10 February 2010 PN 13
21 Statement of Mr Shane Kennedy dated 10 February 2010 PN 13
22 Transcript of Proceedings dated 24 March 2010 at PN 452; Statement of Mr Shane Kennedy dated 10 February 2010 PN 13
23 Statement of Mr Shane Kennedy dated 10 February 2010 PN 16
24 Statement of Mr Shane Kennedy dated 10 February 2010 PN 17
25 Statement of Mr Shane Kennedy dated 10 February 2010 PN 21
26 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 18
27 Statement of Ms Sarah Green dated 8 February 2010 at PN 2-10; Statement of Mr Shane Kennedy dated 10 February 2010 at PN 18
28 Statement of Ms Sarah Green dated 8 February 2010 at PN 19; Statement of Mr Shane Kennedy dated 10 February 2010 at PN 18
29 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 19
30 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 19; Statement of Mr Josh Travers (undated); Transcript of Proceedings dated 25 March 2010 at PN 737 – 740
31 Statement of Mr Eric Hay dated 11 March 2010 at PN 1
32 Statement of Mr Eric Hay dated 11 March 2010 at PN 5
33 Statement of Mr Eric Hay dated 11 March 2010 at PN 10; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 7
34 Transcript of Proceedings dated 24 March 2010 at PN 63 and 64
35 Statement of Ms Jaimelle Whittaker dated 12 March 2010 at PN 4
36 Transcript of Proceedings dated 24 March 2010 at PN 910 to 919 and 941 to 946
37 Statement of Mr Eric Hay dated 11 March 2010 at PN 15-18; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 8, 9-11
38 Statement of Mr Eric Hay dated 11 March 2010 at PN 19; Statement of Ms Jaimelle Whittaker dated 12 March 2010 at PN 14
39 Statement of Mr Eric Hay dated 11 March 2010 at PN 22; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 12
40 Statement of Mr Eric Hay dated 11 March 2010 at PN 20; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 11
41 Statement of Mr Eric Hay dated 11 March 2010 at PN 26; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 16
42 Supplementary Statement of Mr Shane Kennedy dated 23 March 2010 at PN 12
43 Statement of Mr Eric Hay dated 11 March 2010 at PN 28
44 Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 25 (Mr Ruhle states that the Applicant was within 1.0% of his sales target)
45 Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 16 and 19-21 and Annexure DR-4
46 Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 18 and 27
47 These allegations were rejected by the Applicant. See the Supplementary Statement of Mr Shane Kennedy dated 23 March 2010 at PN 6. The Applicant claimed he had not been trained or instructed that sales calls were to be physical or personal visits.
48 Statement of Mr Eric Hay dated 11 March 2010 at PN 29-31; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 14, 23 and 26
49 Statement of Mr Eric Hay dated 11 March 2010 at PN 32; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 28
50 Statement of Mr Eric Hay dated 11 March 2010 at PN 33-35; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 31-32
51 Statement of Mr Eric Hay dated 11 March 2010 at PN 37
52 Statement of Mr Eric Hay dated 11 March 2010 at PN 39-41
53 Statement of Mr Eric Hay dated 11 March 2010 at PN 42 and EH-4, which purports to be a typed record of the conversation drafted on 11 March 2009
54 Statement of Mr Eric Hay dated 11 March 2010 at PN 42 and EH-3
55 Statement of Mr Eric Hay dated 11 March 2010 at PN 42 and EH-3; Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 33.
56 Statement of Mr Eric Hay dated 11 March 2010 at PN 44 and 45 and EH-3.
57 Witness Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 32-33
58 Witness Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 34
59 Statement of Mr Eric Hay dated 11 March 2010 at PN 43 and EH-3
60 Statement of Mr Eric Hay dated 11 March 2010 at PN 46 and EH-3
61 Statement of Ms Jennifer Jones sworn 24 March 2010 at Annexure JJ-1; Exhibit A12
62 Witness Statement of Mr Daryl Ruhle PN 44 and Witness Statement of Ms Jennifer Jones PN 5
63 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 8-9, 22
64 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 10
65 Statement of Ms Jennifer Jones dated 10 February 2010 at PN 10 and 14
66 Witness Statement of Mr Daryl Ruhle dated 12 March 2010 at PN 46; Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 20
67 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 10 and 15
68 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 17 and 48
69 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 19-22
70 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 23
71 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 23
72 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 25
73 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 26
74 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 23
75 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 12 and 43(e)
76 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 27-28
77 Witness Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 33
78 Supplementary Statement of Mr Shane Kennedy dated 23 March 2010 at PN 6
79 Statement of Mr Eugene Pizzolato (undated) filed with Fair Work Australia on 19 March 2010
80 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 39 and 42
81 Statement of Mr Peter Laifoo dated 19 March 2010
82 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 47
83 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 50
84 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 51
85 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 53
86 See, for example, PN 6-7 above and Statement of Ms Jennifer Jones sworn 24 March 2010 at pages 3 and 5 of Annexure JJ-1
87 For example, see Ms Jones’ evidence at Transcript of Proceedings dated 25 March 2010 at PN 1375-1399
88 Transcript of Proceedings dated 25 March 2010 at PN 2129
89 See Ms Jones’ evidence at Transcript of Proceedings dated 25 March 2010 at PN 1381-1391 and PN 1780
90 Transcript of Proceedings dated 24 March 2010 at PN 315
91 Transcript of Proceedings dated 25 March 2010 at PN 1540-1548
92 Transcript of Proceedings dated 24 March 2010 at PN 452
93 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 13 and 21
94 Statement of Mr Shane Kennedy dated 10 February 2010 at PN 21
95 Transcript of Proceedings dated 24 March 2010 at PN 442-444, 452, 458
96 Transcript of Proceedings dated 24 March 2010 at PN 440-441
97 In the Applicant’s statement, he claimed he had been “contacted” by Ms Green.
98 Transcript of Proceedings dated 24 March 2010 at PN 441; Statement of Ms Sarah Green dated 8 February 2010 at PN 3-5
99 Transcript of Proceedings dated 24 March 2010 at PN 801-807, 798-802; Statement of Ms Sarah Green dated 8 February 2010 at PN 7-9
100 Statement of Mr Eric Hay dated 11 March 2010 at EH-4
101 Transcript of Proceedings dated 24 March 2010 at PN 281-287
102 See Transcript of Proceedings 25 March 2010 PN 1554 and PN 1558-1561
103 Transcript of Proceedings dated 24 March 2010 at PN 269
104 Transcript of Proceedings dated 24 March 2010 at PN 916
105 Transcript of Proceedings dated 24 March 2010 at PN 915-919
106 Transcript of Proceedings dated 24 March 2010 at PN 269
107 Transcript of Proceedings dated 24 March 2010 at PN 936-939
108 Transcript of Proceedings dated 25 March 2010 at PN 1464-1465 (Mr Ruhle’s evidence) and 1845 (Mr Hay’s evidence). The Applicant maintained the forklift needed repairs in the order of $12,000. See Transcript of Proceedings dated 24 March 2010 at PN 264.
109 Transcript 25 March 2010 PN 209
110 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 22
111 Transcript of Proceedings dated 24 March 2010 at PN 1167 – 1170
112 Statement of Ms Jennifer Jones sworn 24 March 2010 at PN 20 and also see page 2 of Annexure JJ-1
113 Transcript of Proceedings dated 24 March 2010 at PN 37-53
114 See PR908053 dated 23 August 2001. Appeal by Lockwood Security Products Pty Limited (C2001/1250) against the decision and orders issued by Commissioner Whelan on 13 February 2001 in [PR901073], [PR901074], [PR901075], [PR901076], [PR901077] and [PR901078].
115 See Transcript of Hearing 24 March 2010 PN 37-43
116 Transcript of Proceedings dated 24 March 2010 at PN 722-728
117 Transcript of Proceedings dated 24 March 2010 at PN 496-501
118 Appeal by N Ellawala against the order of Commissioner Foggo on 5 November 1999 [Print S0691] dated 17 April 2000, per Ross VP, Williams SDP and Gay C (Print S5109)
119 Appeal by N Ellawala against the order of Commissioner Foggo on 5 November 1999 [Print S0691] dated 17 April 2000, per Ross VP, Williams SDP and Gay C (Print S5109 at PN 34-35)
Printed by authority of the Commonwealth Government Printer
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