Mr Tony Favios v Power Crank Batteries Pty Ltd
[2012] FWA 4214
•21 MAY 2012
[2012] FWA 4214 |
|
DECISION |
Fair Work Act 2009
s.394—Application for unfair dismissal remedy
Mr Tony Favios
v
Power Crank Batteries Pty Ltd
(U2011/12847)
DEPUTY PRESIDENT SMITH | MELBOURNE, 21 MAY 2012 |
Application for unfair dismissal remedy.
INTRODUCTION AND BACKGROUND
[1] Mr Tony Favios believes that his termination of employment by Power Crank Batteries Pty Ltd (Power Crank) was harsh, unjust and unreasonable. Mr Favios was employed on 5 July 2010 and was dismissed on 10 October 2011. Power Crank terminated the employment of Mr Favios for reasons relating to his work performance.
[2] Power Crank is a National company with approximately 40 employees. Its Queensland business was established in around May 2010 where it employed three full time persons and one part time person. In January 2011 it suffered as a result of the Queensland floods and was inundated with 3.1 meters of water losing $800,000 of stock and suffered $340,000 disruption costs. It was this business environment which created a sharp focus on the performance of Mr Favios.
[3] At the commencement of the matter, I considered ss.398 and 399 of the Act. As a result of that consideration it was decided that a hearing would be the most effective and efficient way to resolve the matter. An attempt at further conciliation was also made following the evidence of the applicant but regrettably that did not result in agreement.
[4] Mr Favios had the title of Sales/Business Development Manager. His role was to sell and to develop a client base for Power Crank. For his first year of employment, Mr Favios had the North East area of Brisbane. For the last three months of his employment, Mr Favois had an area of South West Brisbane which was an established area and became available when another person was promoted.
[5] Power Crank was unhappy with the service provided to clients; his sales figures, as well as the socks he wore. Although Power Crank did express concern at the general attire. In addition, Power Crank was concerned that Mr Favios did not keep his truck in a clean state and properly washed. Whilst Power Crank stated that it had been lenient in relation to his working hours, nonetheless it became frustrated by what it believed were times spent at home and not responding to telephone calls made to the mobile phone.
[6] The letter of termination contained the following reasons:
● Lack of commitment in regard to your position.
● Taking time off for personal reasons during working hours.
● Complaints from customers regarding attitude, not being serviced on a regular basis and personal presentation.
● Over the period of your employment sales numbers and dollar value have not covered costs and when changed to an established run, the unit numbers and the dollar value decreased.
● A total disregard to administrative procedures and timing of same.
● Company vehicle (value $98,000) was neglected in regard to presentation, company policies to keep the vehicles clean inside and out and wash once a week.
● Office found it difficult to contact you on your work hand phone hence other personnel would have to do emergency deliveries in your area when required because you could not be contacted.
● When asked to do a delivery that was in the afternoon before finishing time, it was an effort and too hard and the retort in most cases was “can’t someone else do it or it is too late in the day”.
THE EVIDENCE
[7] Mr Favios gave evidence in support of his application. His evidence was that Power Crank was not a known brand and that he had difficulty in selling the product. As to the sales performance, his evidence was that the decline in sales was cyclical for the period and together with the floods, meant that sales would be down. Mr Favios stated that he was concerned:
● about the propriety of him being directed to drive a truck for which he was not properly licensed;
● that the trucks may not have been roadworthy at particular times;
● that his only warning was about his ankle socks; and
● that he had not been warned about poor performance.
[8] Mr Favios stated that he was terminated whilst covered by a sick leave certificate.
[9] Mr Favios called a previous employee, Mr Sant to give evidence. Mr Sant gave evidence that he thought that Mr Favios had been the subject of workplace bullying and that the standards they expected of him were not those that management applied to themselves. Mr Sant also expressed concern that he was being asked to charge flood affected batteries and to make them look like new. He stated that he resigned his employment because management became irate and unreasonable even over the “pettiest things”. He expressed the view that Power Crank did not treat its staff well.
[10] Mr Favios was given an opportunity to comment upon sales figures drawn from the company’s records. In cross-examination Mr Favios was also asked about this.
[11] In response, both Mr Mackay, an owner of the business and Mr Massey, the Business Development Manager, gave evidence.
[12] Mr MacKay’s evidence detailed the concerns he held over the sales performance of Mr Favios. This evidence drew upon the document presented to Mr Favios in cross-examination. He also dealt with the times when Mr Favios could not be contacted and his attitude to his employment. Mr MacKay detailed the times that he was un-contactable and his attitude to starting and finishing work.
[13] Mr Mackay stated that the medical certificates referred to by Mr Favios were not provided prior to the decision to terminate his employment.
[14] The evidence of Mr Massey was that he started work at about the same time as Mr Favios and that his sales were superior to that achieved by Mr Favios. Upon his promotion Mr Massey stated that Mr Favios took over his “run” and he noticed that sales dropped. It was the evidence of Mr Massey that whilst Mr Favios had only been given one written warning he had received many verbal warnings.
[15] Mr Massey concluded his witness statement: “I personally think as a manager now that Mr Favios would still be employed by Power Crank Batteries if he had shown more desire and willingness not only to Power Crank Batteries but for his own ability”.
THE LEGISLATION AND CONCLUSIONS
[16] Relevantly in relation to s.396 of the Act, I find that Mr Favios was a person protected from unfair dismissal and the application was lodged within time. No other matters under the section are relevant. I now turn to consider whether the termination was harsh, unjust or unreasonable. To this end attention is directed to s.387 of the Act.
“387 Criteria for considering harshness etc.
“In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[17] I turn firstly to consider whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees).
[18] The evidence demonstrates that Mr Favios was not performing as was expected by Mr Mackay. Although it must be said that Mr MacKay, when he started the business in Queensland, made it clear that there would be no pressure for two years and that he expected the business to grow over time [see transcript PN124-125]. However the floods created a different business dynamic and greater pressure was placed on the business. This was known by all concerned. As Mr Massey stated, Mr Favios may still be employed if he had shown more desire and willingness.
[19] This sentiment expressed by Mr Massey seems to be the key to the breakdown in the employment relationship. There were practices and approaches which could have been improved by the employer but it appears that Mr Favios did not recognise the seriousness of the business situation facing Power Crank. All of the issues used by the employer for the termination of the employment of Mr Favios were built up over a relatively short period of time and provided, what was seen by Power Crank, as a lack of commitment and willingness to serve the business. There was no real challenge to the matters raised in the termination letter.
[20] I find that there was a valid reason for the termination of employment of Mr Favios. I also find that Mr Favios was notified of the reason for his termination of employment. As to whether he was given an opportunity to respond to any reason related to the capacity or conduct, I find that he was not given a full opportunity to respond.
[21] It is clear that Mr Favios was advised of concerns held about his attire but there is scant evidence that any serious discussion was held about his capacity or conduct. A similar finding is made in relation to unsatisfactory performance.
[22] Whilst this is not a small employer as defined, it is also clear that there is no dedicated human resources management specialist which could have assisted Power Crank at this difficult time. It follows that the size of the business also meant that specialist advice was not available if sought.
[23] The decision by Power Crank, whilst underpinned by a valid reason, was nonetheless unreasonable. This was good example of frustrations growing but no real consideration given to how to provide the employee with an opportunity to retain his employment by a change in attitude and approach. There were many challenges to the business and some led to perhaps inappropriate practices, but Power Crank could not point to clear advice to Mr Favios that his employment was in jeopardy if his conduct and performance did not change. The frustrations were cumulative and not well articulated.
[24] I now turn to the remedy which should follow these findings. In this regard attention is directed to ss.390, 391 and 392. Section 390 provides:
“390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[25] Having considered the circumstances of the dismissal and the employment history I find that reinstatement is inappropriate. I now turn to s.392 and deal with each of the statutory considerations.
● the effect of the order on the viability of the employer’s enterprise
[26] There were no submissions on the effect of any order on the viability of the employer’s enterprise.
● the length of the person’s service with the employer
[27] Mr Favios had relatively short service
● the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[28] Given the evidence, it appears to me that Mr Favios contributed to the concern of the employer and therefore I assess that had he not been dismissed but advised more formally about his performance it may have provided an additional month for more formal processes to take place, although I would not be confident that his performance and approach would improve. If a major natural event (the floods) did not result in a concerted effort by Mr Favios then it is difficult to see how he would have valued his employment any more than it appeared that he did. I have reached this conclusion also against the background of what may have been inappropriate practices and conduct of the employer. Mr Favios used the term bullying but in the hearing stated that it may not have been the correct term although he was unhappy about the manner in which he was treated.
● the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[29] Mr Favios was, at the time of hearing, working in the industry.
● the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation
[30] No material was presented on this matter
● the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation
[31] Given that Mr Favios was working in the industry this is not a relevant consideration.
● any other matter that FWA considers relevant.
[32] The impact on the business of the Queensland floods was serious and threatened the business. On this basis I am prepared to examine some of the conduct of the employer against this background. It was not an easy time and the employer was required to put another one million dollars into the business. If this event had not occurred, the approach to Mr Favios would have been considered differently and greater weight may have been placed upon an opportunity for Mr Favios to improve.
[33] In the circumstances I consider that an amount of 4 weeks pay (less relevant taxation) should be paid to Mr Favios within 14 days of today. My order is attached.
DEPUTY PRESIDENT
Appearances:
T. Favios the applicant.
B. MacKay on behalf of Power Crank Batteries Pty Ltd.
Hearing details:
2012.
Brisbane:
February, 16.
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