Ms Jennifer Delaney v Parramatta Leagues Club Limited

[2010] FWA 1164

[2010] FWA 1164

FAIR WORK AUSTRALIA

DECISION

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

Ms Jennifer Delaney
v
Parramatta Leagues Club Limited
(U2009/11060)

COMMISSIONER CARGILL SYDNEY, 22 FEBRUARY 2010

Termination of employment.

[1] This decision arises from an application by Ms J. Delaney (the applicant) pursuant to section 394 of the Fair Work Act 2009 (the Act) for a remedy in respect of her dismissal by Parramatta Leagues Club Limited (the respondent or the Club). The dismissal occurred on 30 July 2009. The application was lodged with Fair Work Australia (FWA) on 7 August 2009.

[2] The matter was dealt with by an FWA Conciliator but did not settle. It was then heard by me in Sydney on 4, 5 and 6 November 2009 and 29 January 2010. The matter proceeded by way of hearing as I considered that it was appropriate to do so having taken into account the parties’ views as noted in the Conciliator’s report as well as the other factors in section 399 of the Act.

[3] The applicant was represented by Mr Stevenson, agent and the respondent by Mr Magee of Counsel. Both representatives appeared by permission.

[4] The applicant gave evidence. Her witness statement was marked Exhibit Applicant 1. Her oral testimony is at PN 290-2067 of Transcript. Evidence in the applicant’s case was also given by Ms J Grosvenor, a former work colleague of the applicant. Ms Grosvenor’s witness statement was marked Exhibit Applicant 5 and her oral testimony is at PN 2299-2821 of Transcript.

[5] The following witnesses gave evidence on behalf of the respondent:

Mr T. Cofrancesco	Chief Executive of the respondent. His witness statement is Exhibit Respondent 6 and his oral testimony is at PN 2831-3713 of Transcript;
Mr J. Findlay	Principal of Findlay and Associates, consultants. Mr Findlay provided two statements in this matter. An affidavit dated 14 October 2009 is Exhibit Respondent 7 and a statement dated 5 November 2009 is Exhibit Respondent 8. Mr Findlay’s oral testimony is at PN 3749-3849 of Transcript;
Ms L. Wallace	Director of the respondent. Ms Wallace is employed as Group Human Resources Manager for McAlpine Hussmann Pty Ltd. Her witness statement is Exhibit Respondent 9 and her oral testimony is at PN8-481 of Transcript of 29 January 2010. It should be noted that the transcript for this date begins again at PN1. This is the result of new transcript providers at FWA.

SUMMARY OF FACTS AND EVIDENCE

[6] The applicant commenced employment with the respondent in 1976 as a waitress. In 1989 she was promoted to the position of Catering Manager, a role which she carried out until the date of her dismissal. Approximately 35 employees reported to the applicant in that position. The applicant’s job description is Exhibit Respondent 1 and her contract of employment is Exhibit Applicant 2. This contract of employment is titled “Award Flexibility Agreement” and calls up a number of clauses of the Club Managers (State) Award 2008, a notional agreement preserving a state award (NAPSA).

[7] Prior to the events which led to the applicant’s dismissal she had never been warned or counselled nor had any disciplinary issues been raised with her. It is her unchallenged evidence that her trustworthiness had never been questioned by the respondent.

[8] In 2002 there was a major restructure in the Club. It is the applicant’s evidence that this divided the senior management team into two factions. It is also her evidence that her relationship with Mr Cofrancesco diminished during this time as he went out of his way to ensure that the teams could not work together.

[9] Ms Grosvenor’s evidence is that Mr Cofrancesco hated both the applicant and another employee, Mr Kolc, the General Manager Club Operations, to whom the applicant reported. Mr Cofrancesco denied this and also rejected the applicant’s evidence that there were factions within the senior management team.

[10] In April or May 2009 a new Board of Directors was elected to the Club. Ms Wallace became a Director at that election. Ms Grosvenor described the elections as “very political and public”. Following the election the Board retained Findlay and Associates to undertake an investigation into whether there had been any impropriety by employees in relation to the election. It is Mr Findlay’s evidence that, as part of that investigation, he interviewed a number of Club employees. The applicant was not among those employees. It is also Mr Findlay’s evidence that his investigation was not directed towards the applicant’s activities in any way.

[11] Mr Findlay’s evidence is that, during the investigation, he worked with Deloittes Forensic in relation to the collection of emails from only one employee, the executive assistant to the former Chief Executive of the Club.

[12] The applicant agreed that she had not been interviewed by Mr Findlay as part of his investigation nor had she been told that her conduct was being considered by him. It is Ms Wallace’s evidence that the investigation by Findlay and Associates concluded on or about 25 May 2009.

[13] It is the applicant’s evidence that there was a feeling among several managers, especially those who reported to Mr Kolc, that their jobs were at risk. There were newspaper reports which indicated that some long-term managers might lose their jobs in a cost-cutting exercise. It is the applicant’s evidence that the feeling of unrest was heightened by the display of koalas in the finance section which were said to have been an indication that employees in that area were a “protected species” giving rise to the inference that other employees were not.

[14] Ms Grosvenor gave evidence that the feeling in the management team was one of fear and unknowing. Her evidence is that the level of trust and morale among the managers was very negative at that time. Ms Grosvenor confirmed the applicant’s evidence about the koalas and the “protected species” inference.

[15] During the week beginning 22 June 2009 Ms Grosvenor and Mr Cofrancesco had a conversation about what was going to be happening with the management team. Mr Cofrancesco informed Ms Grosvenor that he expected that the Board was about to decide to proceed with an organisational review of the Club. His evidence is that he had previously expressed his views to the Board Chairman as to how such a review should be conducted but not in relation to any future structure.

[16] There is some difference in the evidence as to whether Mr Cofrancesco indicated to Ms Grosvenor that the review was being carried out merely to provide a pretence of independence. Mr Cofrancesco denies such a suggestion. His evidence is that he did not in fact believe that to be the case.

[17] Ms Wallace’s evidence is that the Club had made a significant operating loss in the previous financial year. The new Board wanted independent expert advice about present arrangements and recommendations as to whether changes were required. It is Ms Wallace’s evidence that the Board did not have any preconceived ideas about what, if any, changes should be made to the Club’s structure, neither was the review intended to target any particular employees or sections.

[18] In late June 2009 Findlay and Associates were retained to undertake the organisational review. Mr Cofrancesco sent an email to all managers notifying them of the review. In the email, Annexure TCI to Exhibit Respondent 6, he set out the scope of the review and noted that a representative of Findlay and Associates would contact each manager to arrange an interview. He also noted that the Board sought managers’ co-operation with the review.

[19] The applicant’s evidence is that the content of the email was very onerous. She testified under cross-examination that point (g) of the email caused her particular concern. That point notes that the scope of the review would include “(a)ny other matters arising out of or incidental to, matters referred to above”. The applicant’s evidence is that she felt threatened by the situation and believed that, because of her uneasy relationship with Mr Cofrancesco, she would be the first to go. Ms Grosvenor’s evidence is that she thought the email was confronting.

[20] The applicant’s evidence is that she understood that it was only the operations, payroll and information technology managers who were interviewed by Mr Findlay and not the other managers who reported to Mr Cofrancesco. The applicant apparently came to this understanding as a result of seeing a list of interview times. She conceded that there may have been another list.

[21] Ms Grosvenor’s evidence is that, during the first week, it was only operations managers who were interviewed by Mr Findlay. She agreed that ultimately other managers were interviewed although she was unable to comment on the exact details.

[22] Mr Cofrancesco’s evidence is that he had no role in selecting who was to be interviewed, that was up to Mr Findlay. His evidence is that, ultimately, meetings were arranged with each of the managers within the Club.

[23] Mr Findlay met with the applicant on 3 July 2009. The applicant was asked about her role and responsibilities. Mr Findlay’s evidence is that he sought the applicant’s input into any organisational changes which she thought would be beneficial to the Club.

[24] Mr Findlay also gave evidence that, prior to the meeting, he had reviewed the financial position of the Catering Department. It had reported losses in excess of $1 million. Mr Findlay’s evidence is that he informed the applicant that the new Board would not tolerate such a loss. He asked the applicant whether she had any plans to turn the situation around. His evidence is that the applicant’s response was that it was an issue for the Marketing Department. Mr Findlay’s evidence is that he did not indicate to the applicant that her job was at risk as a result of the review.

[25] It is Mr Cofrancesco’s evidence that, as part of the review, Mr Findlay asked him about how regularly the Club monitored its email traffic. As a result of that discussion, Mr Cofrancesco requested the IT Manager to review employees’ emails as far back as they were archived, six or twelve months, to see if there were any that were questionable, in particular whether they breached the Club’s IT policy. Mr Cofrancesco’s evidence is that, of approximately 250 employees, about 50 have email accounts. His evidence is that the IT Manager came back to him with a number of possibly questionable emails including some from each of the applicant, Ms Grosvenor and Mr Kolc. There were also several from other employees.

[26] Mr Cofrancesco’s evidence is that, after considering the emails which had been sent by the applicant, he formed a preliminary view that, as they contained confidential information which should not have been sent to third parties, her actions could amount to serious misconduct. He contacted Ms Wallace as she had been delegated by the Board to handle staffing matters. Mr Cofrancesco’s evidence is that he was not experienced in such matters. His background is in finance and accounting.

[27] Mr Cofrancesco discussed his concerns with Ms Wallace and showed her the emails and attachments. Ms Wallace told Mr Cofrancesco that she believed a formal disciplinary process should be instituted. She advised him of the manner in which the process should be undertaken.

[28] The applicant’s evidence is that, on 14 July, Mr Kolc told her that he had heard that he, the applicant and Ms Grosvenor were going to be dismissed. Later that day she was telephoned by a Mr Cooper from the Club Managers’ Association who advised her that the Club’s solicitor, a Mr Belling, had informed him that the Club wanted her gone and did not want to pay any redundancy pay. The applicant was shocked by this conversation.

[29] Neither Mr Cooper nor Mr Belling were called to give evidence in the matter. Mr Cofrancesco’s evidence is that, prior to advising the applicant on 15 July of the disciplinary proceedings, he had not had any discussion with Mr Cooper or Mr Belling about the applicant. He also gave evidence that his only knowledge of any discussion between Mr Belling and Mr Cooper had been in relation to the previous Chief Executive, Mr Fitzgerald. Ms Wallace’s evidence is that, prior to the date of the applicant’s dismissal, she had no contact about the applicant with either Mr Belling or Mr Cooper. She also testified that she had no knowledge of the Board authorising Mr Belling to speak to Mr Cooper about the allegations against the applicant.

[30] Mr Cofrancesco met with the applicant on 15 July 2009. The applicant was asked whether she had emailed confidential information to third parties. She replied that she had not knowingly done so. Mr Cofrancesco informed the applicant that he had become aware that she had sent confidential information by email to the Lidcombe Catholic Club (Dooleys). The applicant reminded Mr Cofrancesco that her husband worked as a manager at Dooleys.

[31] The applicant asked to see the emails. Mr Cofrancesco’s evidence is that he did not have them with him at the time and informed the applicant that she could view them at the formal disciplinary meeting which was to be held on 17 July. There followed some debate about who the applicant could bring to that meeting as a witness or support person.

[32] Shortly after the meeting Mr Cofrancesco rang the applicant and left a message advising her that the emails and attachments were available for her to look at. There is a conflict in the evidence as to whether Mr Cofrancesco mentioned only two specific emails, dated 20 January and 23 February, or whether the offer was to see all of them. In any event, the applicant didn’t seek to view the emails. Her evidence is that she was very stressed at the time. The applicant could not recall whether she informed her representative about Mr Cofrancesco’s offer to see the emails.

[33] The applicant was absent on sick leave from 17 July. Mr Cofrancesco’s evidence is that he had received a medical certificate indicating that she was unfit for work until 24 July. He consequently moved the disciplinary meeting to 30 July. His evidence is that he had not been aware that the applicant’s sick leave had subsequently been extended until 1 August. The applicant’s evidence is that she had sent the second medical certificate to the payroll manager.

[34] The applicant’s evidence is that she rang Mr Cofrancesco on 30 July and informed him that she was still on sick leave but would attend the meeting in any event. Mr Cofrancesco’s evidence is that he could not recall whether the applicant telephoned him that day. He says that he was unaware whether she was on sick leave on 30 July although he did know that she wasn’t at work that day. Mr Cofrancesco’s evidence is that, if he had known that the applicant was still unwell, he would have delayed the meeting again.

[35] The applicant’s evidence is that both she and Mr Kolc met with Mr Cooper on 21 July. During this meeting Mr Cooper informed them that Mr Belling had advised that the Club was not prepared to offer redundancies, but in view of their length of service, was willing to negotiate a payout. The applicant’s evidence is that both she and Mr Kolc indicated that they were not interested. They subsequently engaged the services of Mr Stevenson.

[36] It is the applicant’s evidence that Mr Stevenson contacted the Club at various times to request details of the allegations being made against her. Her evidence is that allegations were provided but no details of why they were being made. An email from Mr Stevenson to Mr Cofrancesco dated 24 July 2009, Exhibit Applicant 6, requests details of the allegations.

[37] Mr Cofrancesco sent the applicant a letter dated 27 July 2009 confirming the time and place of the disciplinary meeting, setting out her right to a representative and noting that the outcome of the meeting may be no further action, the issue of a warning or dismissal. The letter, which is Annexure TC3 to Exhibit Respondent 6, detailed the allegations to be discussed as follows:

“


• A deliberate act of forwarding a copy of confidential Board Papers to a third party, containing the Club’s financial reports;

• A Deliberate act of forwarding to a third party, the Club’s Intellectual Property.

The organisation regards these aforementioned issues as extremely serious.”

[38] This letter was also faxed to Mr Stevenson. In an email to Mr Cofrancesco dated 29 July, Exhibit Applicant 7, Mr Stevenson stated that the allegations were vague and lacking in sufficient detail. He requested further particulars as well as copies of the emails and other documents on which the allegations were based. In his reply email Mr Cofrancesco stated that the documents and particulars would be available at the meeting on the following day.

[39] The meeting took place on 30 July 2009. It was attended by the applicant, Mr Stevenson, Ms Wallace and Mr Cofrancesco. The applicant was shown a number of emails and attachments and asked for an explanation as to why they had been sent.

[40] There is some dispute over exactly how many and which emails and attachments were provided. The applicant’s evidence is that she was given six. Mr Cofrancesco’s evidence is that eight documents were provided in a bundle, Annexure TC2 to Exhibit Respondent 6. I note that one of the emails in the Annexure, at p102 of Exhibit Respondent 6, appears to be a duplicate of the email at p104 of the Exhibit which is attached to the 2008 and 2009 Beverage Department Board Reports.

[41] Mr Cofrancesco conceded that two additional emails, pages 3 and 6 of Exhibit Applicant 3, had also been shown to the applicant at the meeting. Mr Cofrancesco’s evidence is that it was an oversight that these were not included in Annexure TC2.

[42] The applicant was taken to each of the documents in Annexure TC2 during cross-examination. She agreed that she had sent each of them except one which was sent to her home email account by her assistant so that she could work on the material when she was absent on sick leave. This email and attachment is found at pp18-28 of Exhibit Respondent 6 and is the Club’s Catering Report for December 2008. The applicant’s evidence is that Mr Cofrancesco and Ms Wallace appeared to accept her explanation concerning this document.

[43] Mr Cofrancesco’s evidence is that, whilst the applicant had provided this explanation for sending this particular document, he believed that it had actually been sent to her husband. This belief was based upon the email address. The applicant’s evidence is that the address is the joint home email account for her and her husband. Ms Wallace’s evidence is that she had accepted the applicant’s explanation as to why some of the emails had gone to her home.

[44] The applicant’s evidence is that she had emailed the other documents to her husband to assist him to carry out his role at Dooleys including the formatting of reports. Her evidence is that the document attached to the email at p168 of Exhibit Respondent 6, a functions kit, is actually on the Club website and available to the public to access. The applicant’s evidence is that she would send up to 10 copies of this document each day to clients of the Club. Her evidence is that the document attached to the email at p186 of the Exhibit, an interview guide for an Executive Chef, originated from outside the Club. I note that the document attached to the email at p192 of Exhibit Respondent 6 appears to be a related part of an interview guide.

[45] The applicant’s evidence is that, other than the documents attached to the email at p38 of Exhibit Respondent 6 which are duplicated at p104 and following of the Exhibit, she did not have specific permission to send any of the material outside the Club. Her evidence in relation to those documents, the Beverage Department Board Report Trading Results January 2008 and 2009, is that she requested the reports from a Mr Nofal, who has been variously described as Beverage Coordinator and Beverage Manager. The applicant’s evidence is that Mr Nofal knew that she was sending the material to her husband to assist him to format similar reports at Dooleys. Her evidence is that Mr Nofal did not tell her that the documents were confidential or that they should not be forwarded to her husband.

[46] The evidence of Mr Cofrancesco and Ms Wallace is that, during a break in the meeting on 30 July, they spoke to Mr Nofal about the applicant’s statement concerning his involvement. Their evidence is that he denied ever giving the applicant permission to send the material outside the Club. He informed them that the applicant had asked for the documents to use as a template for her Catering Board reports. It is Mr Cofrancesco’s evidence that the applicant was actually Mr Nofal’s supervisor. His evidence is that he could not see how Mr Nofal could have given the applicant approval to send the documents in any case. Mr Nofal was not called to give evidence in this matter.

[47] It is the applicant’s evidence that she did not consider the Board Reports to be confidential. Her evidence is that the figures contained in the Reports and others like them were discussed among managers of a number of registered clubs at their regular meetings. The applicant’s evidence is that she would not have sent the material to her husband if she had thought it was confidential. It is also the applicant’s evidence that Dooleys was never considered to be a competitor of the respondent as it was “out of area”.

[48] It is the evidence of Mr Cofrancesco and Ms Wallace that the material in each of the email attachments sent by the applicant to her husband was the intellectual property of the Club and was sent in breach of both its information technology and intellectual property policies, Exhibits Respondent 4 and 5. In particular their evidence is that the Board Reports contained highly confidential financial information.

[49] Mr Cofrancesco denied that the detailed material in the Reports was the subject of discussion at external club managers’ meeting. His evidence is that those discussions were in general terms about trends and percentages.

[50] Mr Cofrancesco and Ms Wallace both gave evidence that they considered Dooleys to be a competitor club. Mr Cofrancesco’s evidence is that the clubs were approximately 10 kms apart. Most of the respondent’s members live within 10-20 kms of the Club and his evidence is that any other club within that area is seen as a competitor. In addition, his evidence is that Dooleys had recently become very active in seeking new members.

[51] The applicant’s evidence is that she had not received any training about dealing with confidential material. She agreed that the Club’s intellectual property, information technology and other policies were on the intranet. Her evidence is that updates to the policies were rarely provided and she could not remember when she last read the policies. She had not been trained about the policies. The applicant agreed that managers had a role to play in ensuring that Club policies were adhered to. Her evidence is that the policies had not been explained to her during the meeting on 30 July 2009.

[52] The applicant’s evidence is that she sent the documents to her husband to help him in his role at Dooleys. In this she had acted innocently and naively. The applicant’s evidence is that she now realised that she had made a mistake in sending the material but noted that it was the only one in 33 years service. She believes that in the circumstances summary dismissal was harshly unfair.

[53] Following their discussion with Mr Nofal referred to at paragraph 46 above, Ms Wallace and Mr Cofrancesco conferred. Their evidence is that they did not accept the applicant’s explanation about sending the Board Reports to her husband and considered that the contents of the Reports were clearly confidential. Ms Wallace informed Mr Cofrancesco that, in view of the nature of the material, the fact that it had been sent to a competitor club and given the applicant’s senior position within the Club she considered the applicant’s actions to be serious misconduct. Ms Wallace considered the actions to be a breach of trust and confidence and recommended summary dismissal. Mr Cofrancesco agreed.

[54] They returned to the meeting room and Mr Cofrancesco informed the applicant that Mr Nofal had denied her version of events. He also relayed to the applicant the factors set out by Ms Wallace in the immediately proceeding paragraph and informed her that she was being summarily dismissed. Mr Cofrancesco then wrote out a Dismissal Notice, Annexure TC4 to Exhibit Respondent 6, Annexure LW2 to Exhibit Respondent 9 and p1 of Exhibit Applicant 3. The applicant did not sign the Notice.

[55] There is some dispute in the evidence as to the interaction between the applicant and the respondent concerning the return of the Club’s motor vehicle and keys and the payment of the applicant’s statutory entitlements. Ultimately the property was returned on 9 August 2009 and the entitlements paid shortly thereafter.

[56] Ms Grosvenor was also dismissed on 30 July 2009 following a disciplinary meeting. She had also made a claim alleging that her dismissal was unfair. That matter has been settled between the parties and the claim discontinued. During the proceedings in November 2009 in this matter there was some evidence about whether Mr Kolc had been suspended, was on sick leave or had been dismissed. He did not give evidence in this matter.

[57] The applicant seeks reinstatement. She concedes that she did not have a good working relationship with Mr Cofrancesco but is happy to work with him again. The applicant’s evidence is that she is now more aware of the Club’s policies. She wants to put all this behind her and start again. Her evidence is that she had applied for other jobs since the termination. At the time of her testimony on 5 November 2009 the applicant had received only 10 hours of casual work as a food and beverage attendant all of which was in the two weeks prior to the November hearing dates.

[58] Ms Wallace’s evidence is that one of the recommendations of the organisational review carried out by Findlay and Associates was that the roles of Catering Manager and Beverage Manager should be combined. That has occurred. There is no longer a catering manager or a beverage manager within the Club but a new position which is at a higher level. Ms Wallace’s evidence is that the new role is now occupied by Mr Nofal.

SUBMISSIONS ON BEHALF OF THE APPLICANT

[59] A written outline of submissions was lodged prior to the proceedings. Mr Stevenson also made oral submissions.

[60] It is submitted that Ms Wallace and Mr Cofrancesco contrived the allegations against the applicant in order to avoid the Club’s obligation to pay her notice and severance entitlements. There had been discussions about the applicant’s dismissal prior to any allegations being put to her. Those discussions took place between the respondent’s solicitor and a representative of the Club Manager’s Association.

[61] It is submitted that the respondent breached the procedural fairness provisions in both the applicant’s contract of employment, Exhibit Applicant 2, and the NAPSA, an extract of which is Exhibit Applicant 4. Furthermore the applicant had not been given a reasonable opportunity to respond to the allegations against her.

[62] It is submitted that the applicant had not been given notice or pay in lieu as required by the Act, the NAPSA and her contract of employment. In addition, the applicant had not been paid eligible termination payments set out in the NAPSA. The applicant had not received her annual and long service leave entitlements within the required period after her dismissal. This caused the applicant further hardship and humiliation. It is noted that the applicant was on sick leave at the time of her dismissal.

[63] It is submitted that the applicant had been treated harshly and unfairly by the respondent’s representatives and, by inference, the respondent itself.

[64] Mr Stevenson noted that the evidence in the matter had been voluminous, far outweighing what had been put to the applicant prior to her dismissal. He further noted that there had been only one disciplinary meeting with the applicant.

[65] Mr Stevenson submitted that it was of note that, of the number of employees whose emails had been found to be questionable, only three had been interviewed. These were the applicant, Ms Grosvenor and Mr Kolc. Mr Stevenson noted that the applicant had not been provided with the emails prior to the disciplinary meeting. He also noted that, despite his request to Mr Cofrancesco for detailed particulars of the allegations, only broad outlines had been provided before the meeting.

[66] Mr Stevenson submitted that it was of significance that, prior to any allegations of misconduct being put to the applicant, she had become aware of discussions between the respondent’s solicitor and a representative of her union that suggested she was going to be dismissed without payment of any notice or redundancy benefits.

[67] Mr Stevenson submitted that procedural fairness was a cornerstone issue in this matter. He submitted that there had been a number of deficiencies in this regard: no formal investigation into the applicant’s alleged misconduct; no terms of reference; no record of interviews or discussions including the meeting on 30 July; and no proper particulars had been put to the applicant.

[68] Mr Stevenson referred to clause 38.4 of the NAPSA, Exhibit Applicant 4. He submitted that the clause required that the applicant should have been provided with full particulars of allegations and the opportunity to defend herself prior to the meeting on 30 July. Mr Stevenson also noted Mr Cofrancesco’s evidence that he had not been aware of the award clause prior to making the decision to dismiss the applicant.

[69] Mr Stevenson submitted that there were additional procedural defects arising from the meeting on 30 July. He pointed to the vagueness in the evidence as to the number of emails actually presented to the applicant. Mr Stevenson noted that the evidence was that the applicant had been presented with a bundle of emails and asked for her response. Some of her explanations had been accepted and others had not.

[70] Mr Stevenson submitted that there had been no evidence that the applicant had ever received the Club’s information technology or intellectual property policies. She had not been taken through them during the meeting on 30 July. Mr Stevenson submitted that it was of note that some of the documents in question were publicly available on the Club’s website and others had originated outside the Club. He also noted that none of the documents had been marked as confidential or as being the intellectual property of the Club.

[71] Mr Stevenson submitted that the evidence was that the Board Beverage Report had been sent by the applicant to her husband to help him in his role at Dooleys. It had not been provided to Dooleys itself.

[72] Mr Stevenson submitted that there had been contamination of the evidence given by the respondent’s witnesses, in particular, Mr Cofrancesco and Ms Wallace. He referred to a number of paragraphs in Exhibits Respondent 6 and 9 which were either identical or in very similar terms. Mr Stevenson also submitted that there was an inconsistency in the evidence of the two witnesses as to whether the discussion with Mr Nofal during the break in the meeting on 30 July had been by telephone or face to face. He also noted that Mr Nofal had since been promoted.

[73] Mr Stevenson submitted that the respondent had acted inconsistently in deciding that the applicant had engaged in serious misconduct warranting summary dismissal yet had allowed her to continue working for a period of weeks.

[74] Mr Stevenson noted that the applicant had been a long-standing employee of the Club with no disciplinary history. She had found the disciplinary process and termination to be very stressful. The applicant had been the victim of a considerable injustice.

[75] Mr Stevenson submitted that the applicant should be reinstated and receive full back pay for the period since the termination. Alternatively, if her position as Catering Manager no longer exists, she should be reinstated to a position on similar terms and conditions and the parties could negotiate about redundancy. Mr Stevenson noted that the applicant had been unable to obtain permanent employment since her dismissal.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

[76] A written outline of submissions was lodged prior to the hearing. A further extensive written outline was provided during proceedings on 29 January 2009. Mr Magee also made oral submissions.

[77] It is submitted that the applicant had fundamentally misunderstood the purpose of the investigation conducted by Findlay and Associates in May 2009. That investigation was solely to inquire whether there had been any improper conduct by Club employees in relation to the 2009 Board elections. It was not a general investigation, did not involve the applicant and did not result in any adverse findings against the applicant. It is submitted that there is no evidence to support the applicant’s assertion that particular managers were at risk. It is further submitted that any suggested link between the investigation and the applicant’s dismissal should be rejected.

[78] It is submitted that there is no connection between the investigation and the subsequent organisational review. The Board’s decision to undertake the review was not made until about one month after the conclusion of the investigation. There is no evidence that the review was conducted for some ulterior purpose. Rather the evidence is that the Board wanted independent expert advice about Club operations and possible changes in the light of the significant financial loss experienced in the preceding year.

[79] In addition, it is submitted that there is no evidence to support the applicant’s suggestion that the outcome of the review had been predetermined or that it was intended to target any particular employees such as operations managers. The overwhelming evidence is that the review had been conducted across all of the business. It is submitted that the evidence demonstrated that Mr Findlay nominated those employees he wished to interview and in which order. It is noted that Mr Findlay had not been cross-examined about this point.

[80] It is submitted that there is no evidence that the meetings with Mr Findlay were disciplinary meetings or that Mr Findlay played any role in looking at the applicant’s conduct. The only issues raised by him with the applicant concerned the performance of the Catering Department.

[81] In addition, it is submitted that there is no reliable evidence that the Club had dismissed the applicant in order to avoid having to make a redundancy payout. The report into the organisational review was not presented to the Board until November 2009, a number of months after the applicant’s dismissal.

[82] It is noted that the applicant held a senior role within the Club and was in charge of a substantial department within the organisation. The applicant had conceded that she was required to understand the Club’s policies and was responsible for ensuring that her staff adhered to those policies. She had also conceded that she was aware that a breach of the policies could result in disciplinary action.

[83] In particular the evidence showed that the applicant was aware of both the intellectual property and information technology policies. It is noted that the intellectual property policy contains a statement that time and money had been spent in producing, storing, securing and backing up the material. It is submitted that this is important when considering the seriousness of the applicant’s conduct.

[84] Also relevant to the question of seriousness is the fact that the transmission of the documents by the applicant was not just one isolated incident. It involved the sending of a number of documents including Board reports. It is submitted that the documents were clearly the intellectual property of the Club and, given their content, it was not appropriate for them to have been sent to any third party especially a competitor of the respondent. It is noted that the Board reports in particular contained highly confidential information about the Club’s operations.

[85] The seriousness of the applicant’s conduct is aggravated by the fact that the material sent to her husband was directly relevant to him in carrying out his role at Dooleys. It could also have provided a competitive advantage to that club in respect of the respondent as well as the potential saving of time, money and resources for Dooleys. Mr Magee submitted that, although there was no evidence as to any use of the material by the applicant’s husband, the important point was that the documents were out of her control.

[86] It is noted that the applicant had ultimately conceded that she acted in breach of the Club’s intellectual property and information technology policies. It is submitted that this gave rise to real concerns about the manner in which the applicant had carried out her duties during the course of her employment and her ability to properly carry out those duties if she was reinstated. It is further submitted that it should be determined that the applicant’s actions amounted to serious misconduct and that she had breached her duties of good faith and fidelity to her employer.

[87] It is submitted that the applicant’s suggestion that the discovery of her email transmissions related to the investigation into the Board elections or the organisational review should be rejected. Further, there is no evidence that the discovery of the emails was part of any attempt by the respondent to find grounds on which to terminate the applicant’s employment.

[88] The disciplinary process was fair and reasonable in the circumstances. Mr Magee rejected the submissions in relation to clause 38.4 of the NAPSA which had been made on behalf of the applicant. He noted that the clause required allegations to be put to an employee prior to any dismissal not before any disciplinary meeting. Mr Magee noted that, in this case, the applicant had been provided with verbal allegations in the meeting on 15 July and had then been advised that she could view the material. There followed a period of 15 days in which the applicant could have sought advice from her representative. Mr Magee submitted that the procedure followed by the respondent went beyond what was required by clause 38.4.

[89] It is submitted that I should not be satisfied that the Club had made any decision to terminate the applicant’s employment prior to entering into the disciplinary process on 15 July or indeed before the meeting on 30 July. The general allegations had been put to the applicant during the 15 July meeting and she had provided a response which Mr Cofrancesco had not considered to be acceptable. The applicant was informed that she could have a support person at the next meeting and, shortly after, was informed that she could view all of the emails and attachments. It is submitted that Mr Cofrancesco’s evidence on this point should be preferred over that of the applicant.

[90] It is also submitted that, prior to the meeting on 30 July, the applicant had been sufficiently informed of the allegations both orally and in writing and provided with a proper opportunity to prepare a response. The applicant was taken to each of the relevant documents during the 30 July meeting, was asked for and had provided an explanation in relation to each of them. She was also given the opportunity to respond to Mr Nofal’s denial that he had given her permission to send the Beverage Reports to her husband.

[91] It is submitted that the respondent’s decision that the applicant’s actions amounted to serious misconduct which warranted summary dismissal was based on proper grounds and was reasonably open to it. It is submitted that particular attention should be given to the following factors: the seriousness of the applicant’s misconduct; the seniority of her role; her refusal to accept she had done anything wrong; the applicant’s explanation about the Beverage Reports which was not based in fact; and the respondent’s loss of trust and confidence in her.

[92] The respondent denies that it has breached clause 38.4 of the NAPSA. Because the applicant was summarily dismissed she was not entitled to notice or pay in lieu thereof. Further, she had no entitlement to any eligible termination or redundancy payments. It is submitted that the applicant has been paid her annual leave, sick leave and long service leave entitlements.

[93] It is submitted that, having regard to the factors in section 387 of the Act, the applicant’s dismissal was not harsh, unjust or unreasonable. It is submitted in the alternative that reinstatement would not be appropriate. The evidence had showed that the Board and the Chief Executive had lost confidence in the applicant’s ability to properly exercise her duties and responsibilities as a senior manager within the Club. It is submitted that trust and confidence is a vital component in the relationship between an employer and its senior management. That trust and confidence could not be re-established.

[94] A further factor weighing against reinstatement is the relationship between the applicant and Mr Cofrancesco. It is noted that the applicant would be reporting directly to Mr Cofrancesco. In addition it is noted that the applicant’s previous role has changed and, in any event, is not vacant. Further, there is no evidence of any other roles within the Club into which the applicant could be placed.

[95] It is submitted that, if compensation was to be awarded, it should be at the lower end of the range. There is scant evidence of the applicant’s efforts to mitigate her losses. It should be inferred that little, if any, effort has been made.

CONCLUSIONS

[96] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits are considered. Those matters are:

“(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[97] As indicated in paragraph 1 of this decision, the application was made eight days after the termination. This is within the period required in subsection 394(2). There is agreement that the applicant was protected from unfair dismissal within the meaning of section 382. Paragraphs (c) and (d) of section 396 have no relevance in this particular matter.

[98] Section 385 provides that a person has been unfairly dismissed if FWA is satisfied that:

“(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.”

[99] Paragraph (a) is clearly met. Paragraphs (c) and (d) have no relevance in this matter.

[100] In order to decide whether the applicant’s dismissal was harsh, unjust or unreasonable it is necessary to turn to section 387 which sets out the factors which must be taken into account by FWA. Those factors are as follows:

“(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.”

[101] The first factor to be taken into account is whether there was a valid reason for the applicant’s dismissal. In this matter the issues put against the applicant relate to her conduct rather than her capacity or performance.

[102] The broad allegation against the applicant is that she deliberately forwarded copies of confidential material, in particular Board Reports, to a third party. It is said that her actions were in breach of the Club’s information technology and intellectual property policies.

[103] I accept that all of the email attachments sent by the applicant form part of the Club’s intellectual property. Some of the documents clearly contain confidential material, in particular, the Catering and Beverage Reports. I accept the applicant’s evidence that the Catering Reports were not sent to her husband but rather to herself to work on at home whilst she was unwell. That evidence is supported by a note about a catering contract on page 22 of Exhibit Respondent 6 where the applicant mentions organising a meeting on her return from sick leave.

[104] The applicant agreed that she had sent all of the other documents to her husband to help him in his job. I accept her evidence as to her purpose in providing him with the material. However, the Beverage Reports which are clearly marked as Board Reports contain very sensitive financial material. This includes: profit and loss figures; stock take figures; monthly sales comparisons; and trading analyses for each of the venues within the Club.

[105] I note that the January 2009 Beverage Report, which commences at both pages 40 and 106 of Exhibit Respondent 6, is actually dated 26 February 2009 which may perhaps indicate that was the date on which it was to be presented to the Board. Whether or not that was the case, it obviously contained very up to date information yet the applicant first provided it to her husband on 23 February 2009 and then again on 10 March.

[106] In my view it does not matter that the applicant’s husband may not have used any of the material sent to him. The evidence is that he was employed in a similar role to the applicant at another club which I accept is a competitor of the respondent. The possibility that the information sent by the applicant could have been used by him or someone else within Dooleys to the disadvantage of the respondent should have been obvious.

[107] The applicant held a senior position within the Club. She should have appreciated the mischief in providing the Board Reports to her husband. It has been put on behalf of the applicant that she had, in effect, received permission from Mr Nofal to send the Beverage Reports to her husband or, at the very least, that Mr Nofal bore the responsibility as he had not informed her that the material was confidential and should not be given to a third party. However, whatever the discussion between the applicant and Mr Nofal about the Reports, he was in a position which was either subordinate to or equal to the applicant. As such he could not have given authority for her actions.

[108] I am satisfied that the applicant’s actions amount to misconduct and give rise to a valid reason for the termination of her employment.

[109] I now turn to consider what might be termed the “procedural fairness” factors in section 387, paragraphs (b), (c) and (d). I am satisfied that the applicant was notified of the reasons for her dismissal and given an opportunity to respond.

[110] She was provided with the broad outline of the allegations made against her both during the meeting with Mr Cofrancesco on 15 July and then in the letter of 27 July. She was given the opportunity to view the emails and attachments prior to the meeting on 30 July. It is not necessary to determine whether this offer related to all of the documents or only two. The applicant chose not to avail herself of that opportunity either personally or via her representative.

[111] More detailed allegations were put to the applicant at the meeting on 30 July and she was asked for and provided explanations for her actions. Some of those explanations were accepted and others were not. After the break in the meeting the applicant was informed of Mr Nofal’s response to her explanation about the Beverage Reports.

[112] Whilst on the subject of procedural fairness I shall deal with the issue of clause 38.4 of the NAPSA and other procedural fairness issues which were raised on behalf of the applicant. The relevant part of the clause provides as follows:

“38.4.1 An employer shall not terminate the services of any employee for reasons of conduct or performance unless:

38.4.1(a) The employee has been provided prior to the termination with full particulars verbally or in writing, of all allegations against the employee;

38.4.1(b) The employee has been given the opportunity to defend himself or herself against all allegations relied upon by the employer.”

[113] It is clear that the requirement to provide full particulars of all allegations against an employee and an opportunity for the employee to defend themselves is to be provided prior to any termination. The clause does not require that the material or the opportunity be provided at an earlier stage in a disciplinary process. In my view the requirements of the clause have been met in this case.

[114] The other procedural fairness issues which were raised on behalf of the applicant were that there had been no formal investigation conducted and no formal records of interview made. In view of the nature of the allegations against the applicant and her responses it is difficult to see what any further or more formal investigation could have achieved. Although written records of interview are usually helpful, they are relatively rare in matters such as this. I do not make any adverse finding about the absence of such records or a formal investigation in this case.

[115] There was no unreasonable refusal by the respondent to allow the applicant to have a support person present during discussions. There had been some debate between the applicant and Mr Cofrancesco about whether or not the person could be another employee of the Club, however, she was represented by Mr Stevenson both prior to and at the meeting on 30 July.

[116] Paragraph (e) of section 387 is not relevant as the dismissal was not related to the applicant’s performance but to her conduct. I have had regard to paragraphs (f) and (g). I note that the evidence was that the respondent has approximately 250 employees. Although Mr Cofrancesco is not experienced in staffing matters Ms Wallace has extensive human resources management experience.

[117] There are several matters which I consider to be relevant under paragraph (h) of the section. The first is the applicant’s 33 years of unblemished service with the respondent. Whilst length of service may be of less relevance in matters involving misconduct than it would be in those concerning performance, nevertheless, such a long period of unspoilt service should be taken into account.

[118] The second matter of relevance is that the applicant was summarily dismissed for serious misconduct. Although I have found that the applicant’s actions amounted to misconduct and formed a valid reason for the termination, I have some doubt as to whether in the circumstances they were serious misconduct. I have considered Regulation 1.07 of the Fair Work Regulations 2009. I accept that the applicant’s actions were deliberate and could have caused harm or risk to the respondent’s business. However, as indicated earlier, I also accept the applicant’s evidence that she was intending to assist her husband. This may have clouded her judgement. In my view this is a case where the employee failed to appreciate the potential consequences of what she was doing rather than intentionally attempting to harm her employer.

[119] The third matter of relevance is that the applicant was covered by a medical certificate on the day of her dismissal. In many instances this would be a cause of concern. However, there are two factors which militate against such concern in this case. First, Mr Cofrancesco’s evidence that he was unaware of the second medical certificate and his preparedness to have adjourned the disciplinary meeting. Secondly, the fact that, despite being professionally represented, the applicant had not sought to postpone the meeting.

[120] The fourth matter of relevance is the suggestion in the submissions made on behalf of the applicant that she was the victim of a conspiracy on the part of the Club to get rid of particular employees. I do not accept that there was any such conspiracy. The evidence demonstrates that the cause of the applicant’s dismissal was her own actions.

[121] In all of the circumstances and having taken account of each of the factors in section 387 and my findings thereon I have determined, on balance, that the termination of the applicant’s employment was harsh. It follows from this determination and the other matters addressed in paragraphs 98 and 99 above, that the applicant’s dismissal was unfair.

[122] Sections 390, 391 and 392 of the Act deal with remedies for unfair dismissals. I am satisfied that the provisions of section 390(1) and (2) have been met in this case. Subsection (3) provides that an order for compensation must not be made unless FWA is satisfied that reinstatement is inappropriate.

[123] The applicant is seeking reinstatement to her former position or another on terms and conditions no less favourable. The respondent opposes reinstatement. I have decided, on balance, that reinstatement is not appropriate in this case. I have reached that conclusion for the following reasons:

• I have found that there was a valid reason for the termination of the applicant’s employment arising from her actions in transmitting confidential information to a third party where there was a real possibility that such information could have been used to the respondent’s disadvantage;



• The applicant’s failure to recognise the gravity of her actions until these proceedings is a cause of real concern specially in the light of her senior position within the organisation;



• I accept that in the circumstances it would be very difficult to re-establish the necessary relationship of trust and confidence between the Board and Mr Cofrancesco on the one hand and the applicant on the other;



• The applicant’s evidence is that she and Mr Cofrancesco previously had a difficult working relationship. There is no evidence that any other position, not responsible to Mr Cofrancesco, is either available or appropriate to the applicant’s skills and qualifications.

[124] Pursuant to section 390(3)(b) I consider that, in all of the circumstances of this case, it is appropriate to make an order for the payment of compensation. Section 392(2) requires that, in determining an amount for the purposes of such an order, FWA must take into account all the circumstances of the case including:

“(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) 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; and

(f) 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; and

(g) any other matter that FWA considers relevant”

[125] There is no evidence that any order I am able to make will have any particular effect on the viability of the respondent’s enterprise.

[126] The applicant was employed by the respondent for 33 years, a very lengthy period.

[127] There is always a speculative element involved in assessing the remuneration that a person would have or would have been likely to have received had it not been for their dismissal. I am of the view, that had the applicant’s employment not been terminated, she would have remained in the employment of the respondent for some years to come. That would have had a commensurate impact on the remuneration she would have been likely to have received.

[128] The evidence as to the applicant’s efforts to mitigate her loss was less than satisfactory. On what is before me I consider that she has made some effort but could have done more.

[129] The only evidence as to paragraphs (e) and (f) of section 392(2) is that which is set out in paragraph 57 of this decision. There is no other matter which I consider to be relevant under paragraph (g).

[130] Having taken all of these matters into account as well as all of the circumstances of the case I would have determined that I should make an order for 18 weeks’ compensation. However, subsection (3) of section 392 is relevant in this matter and needs to be considered. That subsection provides:

“If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.”

[131] Clearly the applicant’s misconduct contributed to the respondent’s decision to terminate her employment. I consider that an appropriate reduction in the amount of compensation that I would otherwise have ordered is six weeks.

[132] Consequently the order for compensation which accompanies this decision [PR993760] is for 12 weeks remuneration. I trust that the parties will be able to agree on the relevant monetary amount. If they cannot the matter will be decided by FWA.

[133] Finally, I indicate that in deciding this matter I have given consideration to the need to ensure that a “fair go all round” has been accorded to both the applicant and the respondent as provided in section 381(2).

COMMISSIONER

Appearances:

G. Stevenson, agent for the Applicant.

C. Magee of Counsel, with C. Fleming for the Respondent.

Hearing details:

Sydney

2009.

November 4, 5 and 6,

2010.

January 29.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR993759>