Ms Deborah Maree Ford v Vita Group Limited

[2010] FWA 4630

[2010] FWA 4630

FAIR WORK AUSTRALIA

DECISION

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

Ms Deborah Maree Ford
v
Vita Group Limited
(U2010/6012)

COMMISSIONER CONNOR WOLLONGONG, 28 JUNE 2010

Application for unfair dismissal – allegations of workplace bullying – application dismissed

Introduction

[1] Since late in 2005 Ms Deborah Ford had been employed as store manager of the Nowra store of Vita Group Limited, trading as Fone Zone, which is a licensed dealership for the sale of Telstra products. Her services were summarily terminated on Thursday, 28 January, 2010 and on Thursday, 11 February, 2010 an application under s.394 of the federal Fair Work Act 2009 (FW Act) was lodged on her behalf. Ms Ford has not been subjected to any disciplinary action or counselling in the past and it appears her work performance has been generally satisfactory. However, there appears to have been some concerns over her employment and, in particular, her alleged harassment of fellow employees. On Friday, 22 January, 2010 Ms Ford was involved in an incident with Ms Sasha Eckert, a former employee of Fone Zone which led to Ms Ford’s dismissal. In fact, two days before that incident on Friday, 22 January, 2010, Fone Zone had placed an advertisement for Ms Ford’s position as vacant—a matter I will address in more detail later in this decision.

[2] Conciliation by teleconference on Tuesday, 16 February, 2010 failed to settle her claim and the matter was allocated to me for hearing. I set the matter down for mention and programming on Tuesday, 2 March, 2010, also proceeding by way of teleconference. The subsequent arbitrated proceedings on Monday, 31 May, 2010 were convened in the premises at 90 Crown Street, Wollongong which Fair Work Australia now shares with the Industrial Commission of New South Wales. Mr Lawson represented Ms Ford in the hearing, calling her to give evidence. He also called Mr Gregory Jones, Ms Ford’s partner, as a witness in the hearing. Mr Anning represented Vita Group in the hearing. He called Mr Warren Winch, the regional manager of Fone Zone, and Mr Bill Sarris, the manager of another region for Fone Zone but whose decision it was to terminate Ms Ford’s services. Ms Natalie Singh, the human resources advisor for the Vita Group provided a written statement which was admitted into evidence in this hearing without Mr Lawson requiring her for cross-examination.

[3] It was initially the wish of Vita Group to proceed by way of a conference in accordance with ss.398 and 399. In that respect, s.398 provides as follows:

“(1) This section applies in relation to a matter arising under this part if FWA conducts a conference in relation to the matter.

(2) Despite s.592(3), FWA must conduct the conference in private.

(3) FWA must take into account any difference in the circumstances of the parties to the matter in:

(a) considering the application; and

(b) informing itself in relation to the application.

(4) FWA must take into account the wishes of the parties to the matter as to the way in which FWA:

(a) considers the application; and

(b) informs itself in relation to the application.”

[4] But s.399 still gives some discretion to me as to the conduct of such proceedings, viz:

“(1) FWA must not hold a hearing in relation to a matter arising under this Part unless FWA considers it appropriate to do so, taking into account:

(a) the views of the parties to the matter; and

(b) whether a hearing would be the most effective and efficient way to resolve the matter.

(2) If FWA holds a hearing in relation to a matter arising under this Part, it may decide not to hold the hearing in relation to parts of the matter.

(3) FWA may decide at any time (including before, during or after conducting a conference in relation to a matter) to hold a hearing in relation to the matter.”

[5] Ms Ford had not announced her preference as to how the matter may proceed in arbitration in the conciliation teleconference. Mr Lawson has now done so on her behalf. He seeks a formal hearing. There is some conflict in the evidentiary material provided to me for these proceedings which necessitates cross-examination of witnesses. In my opinion, such conflicts in the evidence can only be effectively resolved in a formal hearing. I propose to proceed on that basis.

The issue

[6] There are allegations, not substantiated in the evidence in this hearing, that Ms Ford has acted in the past in a threatening and intimidating manner with other Fone Zone staff members under her supervision and had otherwise been guilty of unsatisfactory conduct which was under investigation. So much so, apparently, that an advertisement had been placed on Wednesday, 20 January, 2010, whilst Ms Ford was on recreation leave, to fill her position. Ms Singh indicated in her written statement that certain allegations against Ms Ford were being investigated and:

“. . . due to the size of Nowra, recruitment has historically been a difficult and lengthy process. Considering these factors, management felt it was necessary to be proactive and commence the recruitment process, simply as a precaution. In the event that the allegations were substantiated, this would decrease potential disruption to the operations of the business. . . .”

[7] I have to say that I regard that conduct as inappropriate. It must prima facie be unfair to advertise a position as vacant when it is still occupied by an employee who is absent on leave and when investigations concerning her were not concluded. Clearly, a decision had been made by the Vita Group management adverse to Ms Ford, whether it was to result in her dismissal or not. I assume that it was simply a prelude to Ms Ford’s dismissal. But those concerns were overtaken by events and at no time did the alleged past conduct of Ms Ford form any basis for her dismissal or form part of the evidence in this hearing. As I indicated earlier in this decision, the issue which led to Ms Ford’s summary dismissal occurred on Friday, 22 January, 2010.

[8] On Friday, 8 January, 2010 Ms Ford had lent her personal car to Ms Eckert, at that time a fellow employee of Fone Zone. Ms Eckert’s own vehicle required repairs at the time and Ms Ford was going on holidays and did not need her own vehicle for two weeks. Ms Ford returned to work on Friday, 22 January, 2010 to discover that Ms Eckert had resigned from Fone Zone in the meantime effective from Monday, 18 January, 2010 and was now working for another licensed Telstra dealership in Nowra (T-Life), which is a competitor to Fone Zone. Ms Eckert had returned Ms Ford’s car to her residence on Thursday, 21 January, 2010, leaving the keys in the letter box.

[9] It is not altogether clear to me why Ms Eckert’s conduct should have presented Ms Ford with any real concerns—certainly not enough to produce the subsequent exchange between the two women, I would think. However, Ms Ford claimed that at no time had Ms Eckert thanked her for using her car and she was driving her car whilst working for T-Life. Ms Ford claimed in a written statement which formed the basis of her evidence that she:

“. . . was feeling extremely betrayed and used due to the fact that Ms Eckert had continued to use my personal car to get to work even though she was now working for a Fone Zone competitor. . . ”

[10] I would have thought that primarily any thanks from Ms Eckert would have been made when Ms Ford provided her with her car in the first place.

[11] Ms Ford firstly forwarded an e-mail to the retail manager for Fone Zone, viz:

“. . . Can someone please tell what is going on in my store. I have come back from holidays today and find I have no team working with me today and I will be working short staffed as I have had a team member resign whilst I was away and what is happening to rectify this as I have another team member on three weeks leave and I am down to myself and another team member. . . ”

[12] Ms Ford was informed by e-mail that Ms Eckert’s position had also been advertised and until it was filled, she would have additional support from another region (Bateman’s Bay).

[13] Later in the day Ms Ford forwarded a text message by e-mail to Ms Eckert, viz:

“You low life dog. Don't want to see you and I am going to enjoy bad mouthing you all over the town. You are nothing more than a user.”

[14] Not much chance for Ms Eckert to thank Ms Ford after she received that e-mail. Ms Eckert did not reply to the e-mail. But for a late lunch Ms Ford closed the store and walked through a shopping complex and past the T-Life store in which Ms Eckert now worked. Ms Ford claimed that she walked past the T-Life store on her way to buy her lunch. It would have been possible for her to do that without going anywhere near the T-Life store. It would have been better for her if she had avoided any chance of a contact with Ms Eckert. In any event, Ms Ford observed Ms Eckert lean towards a fellow employee and say something to him. She did not hear what was said but she claimed that both employees laughed at her as she was passing.

[15] There is apparently some conflict at that point as to what then transpired but since neither Ms Eckert nor the other employees of the T-Life store gave evidence in the hearing I must rely primarily on what Ms Ford asserts in her evidence. In any event, none of what followed was particularly dignified conduct on any person’s part. Ms Ford conceded that she responded in the same terms as her e-mail to Ms Eckert:

“You low-life dog. You are nothing but a user.”

[16] Ms Ford claimed that one of Ms Eckhart’s co-workers said:

“Fuck off you old hag.”

[17] And Ms Ford alleged another co-worker said:

“Fuck off out of the shop.”

[18] And called her a “ranga”. I understand that the word “ranga”, derives from orang-utan and implies a person with red hair and a fiery temper—hardly a complimentary expression.

[19] Ms Ford claimed she told them to:

“Shut your filthy mouths.”

[20] Ms Ford denied that at any time had she sworn at Ms Eckert but that allegation had been levelled against her by Ms Eckert.

[21] Mr Winch, who was Ms Ford’s immediate supervisor, was absent on leave at that time. It was Mr Sarris who received a telephone call from Mr Nathan Coombes, the manager of the Nowra T-Life store, and informed about the incident. Mr Coombes had formerly worked for Fone Zone in its Figtree store and therefore was in a position to know appropriate contacts in Fone Zone management. Mr Sarris telephoned Ms Ford and asked her about the incident. She confirmed that she had sent the offensive e-mail to Ms Eckert and that she had closed the Fone Zone store and walked over and abused Ms Eckert in the T-Life store. The telephone conversation was aborted when Ms Ford had a customer to attend to but later Mr Sarris telephoned Ms Ford again, suspending her at that time on full pay. The suspension was to take effect immediately but Ms Ford continued to serve a customer at the time.

[22] A meeting between Ms Ford and Mr Sarris ultimately took place on Thursday, 28 January, 2010. Mr Gregory Lewis, Ms Ford’s partner, accompanied her as her witness. Mr Winch accompanied Mr Sarris at the meeting. Mr Sarris handed Ms Ford a copy of a document outlining the core values of Fone Zone (which Ms Ford had seen before) and the code of conduct (which Ms Ford asserts she was aware of but had not read). Among other things the document outlining the Fone Zone core values, refers to the obligation on employees to “. . . treat team members and customers with respect. . . ”. And the code of conduct also provides that Fone Zone staff must:

“. . . not use inappropriate or offensive language or behaviour in the vicinity of, or when communicating with customers, other team members or management. . . ”

[23] And:

“. . . never physically harm any person or engage in any type of fighting or violent behaviour during work hours, while on company premises, while attending a company function, or whilst wearing the company uniform. . . ”

[24] And:

“. . . never commit any act (including an act of dishonesty) that could negatively impact, or is not in the best interests of, the company. . . ”

[25] Ms Ford was wearing the Fone Zone uniform at the time and the incident took place in what I assume was a fairly busy shopping centre. Mr Sarris claimed that Ms Ford had by her conduct breached the Fone Zone core values and the code of conduct and he told Ms Ford:

“You have put the Telstra and Fone Zone relationship in jeopardy.”

[26] Ms Ford asked how she had done this and Mr Sarris replied:

“. . . By abusing a T-Life store member.”

[27] At the meeting Ms Ford disputed the version of events as described by Ms Eckert in a statement she had prepared. She said that she had not approached the T-Life store swearing at Ms Eckert, as Ms Eckert had claimed, and that the T-Life staff had been jeering at her. Ms Ford informed Mr Sarris that she had earlier lent her car to Ms Eckert—something Mr Sarris regarded as irrelevant. The meeting was adjourned for a period while Ms Ford wrote out her version of the incident, viz:

“. . . Yes, I did say to (Ms Eckert) the things as reported and have never hidden the fact. At no stage did I approach the T-Life store swearing or behaving in a threatening manner. I was walking this way to go and get my lunch. At no stage did I ever speak to the other Telstra employees who stated that I did. This behaviour was purely personal and in hindsight I should have done it differently. At no stage was this done to create a rift between the T-Life store and Fone Zone. In the past four years I have displayed all core values of Fone Zone. I feel that this could have been avoided ...if someone had communicated with me as to what was happening in my store. . . ”

[28] Ms Ford claimed that she prepared that statement hurriedly and felt rushed. Mr Sarris left the meeting to make a telephone call and when he returned he indicated that Ms Ford was to be summarily dismissed for breaching the Fone Zone core values and code of conduct, i.e. (i) a lack of trust, (ii) potential damage to Fone Zone’s dealership relationship with Telstra, (iii) damage to Fone Zone’s reputation and bad public relations, and (iv) lack of confidence in Ms Ford’s management of the store.

[29] Since the termination of her services Ms Ford has attempted to find alternative employment. She has applied for a range of jobs, not necessarily restricted to employment of the type which her qualifications would support. She has only recently found some casual employment—a commission based job distributing pamphlets—which pays significantly less than she was receiving whilst working for Fone Zone.

Conclusion

[30] The basis of an application for unfair dismissal is, firstly, the determination of whether or not, in all the circumstances, that dismissal was, in terms of s.385(b), “harsh”, “unjust” or “unreasonable”. That task has been described as determining whether there was a “fair go all round” with a dismissal, a concept which was approved by Sheldon J of the former New South Wales Industrial Commission in Re Loty and Holloway and the Australian Workers Union [(1971) AR 95 at p. 99] and which has now found statutory recognition in s.381(2).

[31] The second task for me, on a conclusion that the dismissal was unfair, is to determine the appropriate remedy—reinstatement or, alternatively, monetary compensation in lieu thereof, with preference being given to reinstatement over monetary compensation and that latter remedy only being available if reinstatement is impracticable (ss.390, 391 and 392). Ms Ford has not sought her reinstatement, however, recognising that it would not be practicable. I agree, having regard to the circumstances described to me in this hearing. In my opinion, in view of Ms Ford’s conduct, any constructive restoration of an effective employer/employee relationship with Fone Zone has been destroyed. Ms Ford has sought monetary compensation alone and Mr Lawson has assessed her remuneration in that respect at the level of from four to six months salary.

[32] Mr Lawson has submitted that the summary dismissal of Ms Ford was both substantively unfair (because her dismissal was not justified in the first place) and procedurally unfair (because the manner in which it was put into effect was also unfair). He asserted that the issue between Ms Ford and Ms Eckert was purely personal and should not be regarded as affecting Ms Ford’s employment relationship with Fone Zone or with Telstra. Mr Lawson pointed out that there was no evidence that Ms Ford had sworn at Ms Eckert.

[33] Mr Anning disputed that Ms Ford’s summary dismissal was either substantively or procedurally unfair. He claimed that the altercation between Ms Ford and Ms Eckert put Fone Zone in a negative light. He emphasised that Ms Ford was a senior Fone Zone employee whose conduct was unacceptable. Alternatively, he submitted that if I were to consider that Ms Ford’s dismissal was unfair, any monetary compensation to her should be discounted to take into account her unsatisfactory conduct.

[34] Section 387 sets out the matters to take into account in determining whether a dismissal was unfair, viz:

“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 the dismissal; and

(e) if the dismissal related to the unsatisfactory performance by the person—whether the person had been warned about the 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.”

[35] It would appear to me that, since Ms Ford occupied a senior position in Fone Zone—the manager of a store—with a certain degree of independence and autonomy, there is a need to preserve a high level of trust in her employment relationship with it. As the Full Bench (Wilcox CJ, Marshall and North JJ) of the then Industrial Relations Court of Australia commented in Perkins v. Grace Worldwide (Australia) Pty Limited [(1997) 72 IR 186 at p.191]:

“. . . trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause. . .  The implication is not confined to employers; it extends to employees: see for example Blyth Chemicals Limited v. Bushnell (1933) 49 CLR 66 at pp.81 and 82 and North v. Television Corporation Limited (1976) 11 ALR 599 at p.609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based. . . ”

[36] As the words I have emphasised in the Full Bench decision suggest, that alleged loss of trust must, of course, have a proper basis and not be capricious or arbitrary on the part of the employer. The discretions available to be exercised in that respect by an employer should, using the words of Kitto J of the High Court in R v. Anderson; ex parte Ipec-Air Pty Limited [(1965) 113 CLR 117 at p.189]:

“. . . be exercised according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself. . . ”

[37] But, in my opinion, any reasonable assessment of the situation described to me in this hearing would support the contention that Ms Ford’s conduct on Friday, 22 January, 2010 effectively destroyed that trust and confidence that Fone Zone management was entitled to expect in the employer/employee relationship with her.

[38] Ms Ford claimed that what occurred at the T-Life store was her reaction to being jeered and laughed at. But as I indicated earlier in this decision, it would have always been open to Ms Ford to purchase her lunch without going anywhere near the T-Life store. Ms Ford claims to have been provoked by the conduct of Ms Eckert and her fellow employees. But, in fact, the start of the disagreement between the two women was Ms Ford’s very offensive e-mail to Ms Eckert. And it appears to me that Ms Ford’s response to the situation with which she was confronted on her return to work on Friday, 22 January, 2010 was out of proportion to any alleged slight which she claimed she had received.

[39] Currently there is a strong emphasis placed throughout the industrial community, quite properly, on the elimination of all bullying in the workplace. All employees have the right to the quiet enjoyment of their work without being bullied, harassed or threatened by supervisors and/or fellow employees (or, for that matter, former supervisors). Ms Ford described Ms Eckert both in the e-mail and later face-to-face in very derogatory terms—“. . . you low life dog. . . ”. Whether or not Ms Ford later swore when she spoke to Ms Eckert is irrelevant, in my opinion. Those derogatory words were offensive enough on their own.

[40] In determining the fairness of a dismissal, s.387(a) directs me to take into account:

“. . . 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). . . ”

[41] The fact that s.387(a) has emphasised “. . . the safety and welfare of other employees. . . ” illustrates the importance that the safety and welfare of employees has in the structure of the FW Act. I consider that the offensive comments Ms Ford made to Ms Eckert in the e-mail and later at the T-Life store were directed to undermine Ms Eckert’s welfare. They were clearly harassment and grounds for disciplinary action against Ms Ford, in my opinion.

[42] Mr Lawson submitted that the code of conduct on which Mr Anning relied was restricted to existing employees or customers and Ms Eckert was neither an existing employee nor a customer. (I also note that s.387(a) may strictly be read in the same manner, i.e. as confined to “. . . the safety and welfare of other employees. . . ”—not necessarily past employees.) Nor was the T-Life store a customer but a competitor for the sale of Telstra products. Consequently, Mr Lawson argued that the incident fell outside the core values document and the code of conduct—and presumably s.387(a). To my mind that is a far too subtle distinction to make. I do not believe that the obligations one employee has in that respect to another employee ceases when that other employee leaves the employment.

[43] Mr Lawson also asserted that, whilst Ms Ford was wearing her uniform at the time of the incident at the T-Life store, she was on her lunch break and the incident did not therefore occur in work time. But the fact is that Ms Ford was wearing her Fone Zone uniform at the time of the incident at the T-Life store and the argument occurred in a shopping complex presumably in the presence of members of the public—hardly positive behaviour as an exercise in good public relations.

[44] Mr Lawson also asserted that the exchange between Ms Ford and Ms Eckert was no more than a personal disagreement between the two women. Whilst what a person does privately does not necessarily always fall within the scope of what could be regarded as the contract of employment, sometimes it may do. In my opinion, this is such a case. I believe that the incident in question in this hearing was sufficiently linked to Ms Ford’s employment with Fone Zone to warrant the action that Fone Zone took in dismissing her. Ms Ford’s threat to Ms Eckert that she was going to “. . . enjoy bad mouthing her all over town. . . ” was clearly a most intimidating and damaging comment—directed at Ms Eckert’s welfare and therefore a matter relevant under s.387(a). That is especially the case in the regional area where both Ms Ford and Ms Eckert worked. To my mind, it had the potential to affect Ms Eckert’s position in T-Life, the T-Life operations and, indirectly, the relationship between Fone Zone and Telstra.

[45] For those reasons, I see no justification for my intervention in support of Ms Ford in this hearing. I dismiss her s.394 application.

COMMISSIONER

Appearances:

M Lawson of Counsel and R Binks of R and M Legal, Solicitors and Attorneys for D. Ford.

M Anning for Vita Group Limited.

Hearing details:

2010.
Wollongong:
May, 13.

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<Price code C, PR998531>