Ms Michelle King v Prouds Jewellers Pty Ltd
[2016] FWC 1369
•30 MAY 2016
| [2016] FWC 1369 [Note: a correction has been issued to this document] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Michelle King
v
Prouds Jewellers Pty Ltd
(U2015/14118)
COMMISSIONER HUNT | BRISBANE, 27 APRIL 2016 |
Application for relief from unfair dismissal – misconduct – application dismissed.
Background
[1] Ms Michelle King applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to her dismissal by Prouds Jewellers Pty Ltd (Prouds). Prouds is a national retail chain operating jewellery stores including Prouds, Angus & Coote and Goldmark.
[2] Ms King commenced employment with Prouds on 10 March 2008 as a part-time Sales Assistant. During 2013, Ms King acted as an Assistant Store Manager and then acting Store Manager. From August 2014, Ms King was permanently employed as an Assistant Store Manager at various Prouds and Angus & Coote stores.
[3] The last store Ms King worked in was the Angus & Coote Redbank Plains store. Ms King’s employment was terminated on 23 October 2015.
[4] At a hearing in Brisbane on 2 March 2016, Ms King was represented by Mr Allan Williams, Ms King’s domestic partner. Prouds was represented by Mr Adrian Barwick of WilliamsonLegal. On 29 February 2016, I issued a decision [PR577427] granting approval for Prouds to be represented by a lawyer pursuant to s.596 of the Act.
[5] Ms King gave evidence on her behalf. Evidence for Prouds was given by:
● Mr Scott Burt, Group Regional Manager; and
● Mr Barry Lowndes, Group Loss Prevention Manager.
Issues for determination
[6] Ms King was summarily dismissed following an investigation in October 2015 into allegations of misconduct. Prior to the investigation being conducted with respect to Ms King’s alleged conduct, Prouds had been making inquiries into possible breaches of Prouds’ policies and procedures and fraudulent activity of Ms King’s then manager, Store Manager, ‘Tracey’.
[7] It is not disputed that Ms King provided assistance to Prouds with respect to the investigation into Tracey’s alleged misconduct. The information provided by Ms King then caused Prouds to commence inquiries into Ms King’s conduct.
[8] Ms King’s employment was suspended with pay on 22 October 2015. A
letter was provided to Ms King informing her of the suspension, and requiring her to attend a meeting the following day to provide information and input with respect to the allegations. Ms King was informed that she was welcome to bring a support person to the meeting. The letter advised that pending the outcome of the investigation, if Ms King was found to have been involved in any misconduct which amounted to a breach of Prouds’ policies, Prouds would consider whether to take action, which could include termination of Ms King’s employment.
[9] A two page letter detailing allegations that Prouds wished to discuss with Ms King was issued to her on the same day. Prouds alleged Ms King had engaged in the following conduct:
● creation of layby’s without the customer being in the store;
● creation of layby’s without a deposit;
● layby payments made for product without the customer being in store;
● alleged bullying of a team member;
● staff discounts provided to a friend;
● processed a ‘special order’ and then cancelled the ‘special order’;
● awareness of ‘numerous fraudulent layby’s conducted by Tracey to gain sales and achieve store budget’;
● writing up her own repairs; and
● a small number of additional allegations not pursued by Prouds.
[10] Following an investigation into the above allegations, Ms King’s employment was terminated. The conduct allegedly engaged in by Ms King is said to be in breach of Prouds’ policies and procedures and the terms of Ms King’s contract of employment which requires compliance with those policies and procedures.
[11] Ms King’s position is that her actions were minor administrative errors, and not serious enough to warrant termination of her employment. 1 It is Ms King’s contention that she had an unblemished work history until the decision was made to terminate her employment.
Prouds’ reliance on various documents
[12] Prouds has in place a Team Member Employment and Safety Handbook (the Employee Handbook). It is a detailed policy and procedure document of 103 pages. It is not disputed by Ms King that she was aware of the Employee Handbook during her employment. Ms King agreed in cross-examination that as she was employed as an Assistant Store Manager, she was more familiar with the Employee Handbook than subordinate staff because she needed to make sure they were complying with its terms. 2
[13] An investigation meeting was held with Ms King on 23 October 2015. An interview record form was prepared by the Prouds’ human resources department in the form of a script to be read by Mr Lowndes. Mr Lowndes’ evidence is that he read from the script when interviewing Ms King. Mr Burt’s evidence is that he recorded Ms King’s answers in handwritten form, provided to the Commission as an exhibit. This document is referred to as the Interview Record Form.
[14] Following the investigation meeting on 23 October 2015, an employee from the Prouds’ human resources department prepared a nine page document titled, Performance Management and/or Disciplinary Meeting Record (the Disciplinary Meeting Record). The Disciplinary Meeting Record was issued to Ms King on the afternoon of 23 October 2015 at the same time as she was informed her employment had been terminated. Ms King signed the Disciplinary Meeting Record.
Ms King’s evidence
[15] Ms King had been employed with Prouds for approximately 7 and a half years, and had been in a management position for three years. At no time during her employment had she been disciplined.
[16] Ms King had been offered a store manager position in January 2015 but had declined the role, citing that she was not ready to become a store manager.
[17] Ms King denied having engaged in fraudulent conduct, or causing any monetary loss to Prouds.
[18] During the investigation, when she was offered the opportunity of a support person, she did not take up the opportunity to have a support person present. Ms King said in evidence-in-chief, “I didn’t feel I needed to. I don’t think I fully understand the full accusations.” 3
[19] In relation to the Disciplinary Meeting Record, Ms King was asked in examination-in-chief if she had read the document on the day. She answered that she had not, nor had she read the document after the meeting. Ms King’s evidence is that she signed the Disciplinary Meeting Record and left after having been issued with the termination letter dated 23 October 2015.
[20] During cross-examination, Ms King was asked to confirm that she was given an opportunity to read the Disciplinary Meeting Record if she had wanted to. Ms King answered, “I had just been terminated. I wasn’t going to sit there and read three pages.” 4
The layby
[21] I had before me evidence of a layby created on 13 June 2015. The layby was in the name of Kel Lane, Ms King’s father. It is a disputed fact as to whether a staff discount of $69.00 was applied. The team member identification number is 40404, Ms King’s staff number.
[22] In examination-in-chief, Ms King was asked if she created the layby. Ms King’s evidence is that the receipt states that she did create it, but she doesn’t recall doing it. She stated that she had her manager’s (Tracey’s) consent to place the layby.
[23] It is Ms King’s evidence that she paid a $28.00 deposit on the $112.00 layby, representing 25% of the purchase price. She is unable to explain why the $28.00 deposit is not recorded on the receipt. There is evidence of a $28.00 payment made from her debit account to the store on this date.
[24] Ms King made payments of $5.00, $10,00 and $69.00 between June and October 2015 in satisfaction of the remaining balance of the layby. The transactions were processed by other staff members in the store without the customer, Mr Lane being present in the store as per company policy.
[25] The employee handbook states the following in relation to staff layby’s:
10 Team Member Purchases/Lay-By Policy
10.1 Guidelines/Rules:
No purchase can be made without a valid Team member Card…….
ALL Purchases must be recorded in the Team member Purchase Register/Log. The Team member Purchase Register/Log is to remain in-store for auditing purposes.
…..
A team member is not able to affect their own team member purchase transaction under any circumstance.
Please remember that these team member discounts only apply to purchases for your own use (or as gifts from you). Items cannot be on-sold or purchased on behalf of another person.
…..
Team member may lay-by up to three items on one lay-by account, provided that:
● Each item must have a retail value over $100 but less than $750 (at retail)
● A team member has only ONE lay-by account at any one time
● The lay-by is subject to the usual lay-by terms, including the usual cancellation charges
● Any lay-by over $300 (at the discounted price) must be approved by the Regional Manager
● The lay-by account includes the word “STAFF” in front of the first name
[26] The Interview Record Form records the following questions and answers in relation to the layby:
Lowndes: What is your understanding of Security Policy and Procedure Manual Clause 10 Team member Purchases/Lay-By Policy, 10.1 Guidelines/Rules – Please remember that these team member discounts only apply to purchases for your own use (or as gifts from you). Items cannot be on-sold or purchased on behalf of another person?
King: Anything on lay-by is for me or a gift.
…….
Lowndes: You created a Lay-By (1112815) on the 13th June 2015 in the name of Kel Lane with no deposit and no customer in the store. Please explain.
King: Fathers Lay-by he was not in store. Already had a staff purchase on, so already had one. So it’s stupid I know. I’ve been in the business for 9 yrs. I know I have breached policy and procedures. I shouldn’t of done it, I knew better.
Lowndes: Who is Kel Lane?
King: My father
Lowndes: What are the reasons for creating the layby without anybody in store?
King: I couldn’t afford them, I know it’s wrong but I did it ‘cause I couldn’t afford it.
Lowndes: Do you think it is acceptable to be creating lay-by with no customers in store?
King: No
Lowndes: Why was no deposit put on the layby?
[recorded as: Michelle said yes, Barry said no].
Lowndes: Would you agree you have falsified records?
King: Yes
Lowndes: Do you think you have led by example?
King: No
Lowndes: Would you agree that this course of conduct is unacceptable as an assistant store manager?
King: Yes
Lowndes: A Lay-By payment made on the 29th June, 2015 of $5.00 by operator 105188 (Tracey). This transaction was processed without the customer in store under your direction. It is alleged you provided the funds of $5 to the team member to make this payment. Please explain.
King: Yes I did ‘cause this lay-by was for me.
Lowndes: Why did you provide the funds to Tracey?
King: Because it was for me.
Lowndes: Why was the payment put on the layby without the customer in store?
King: It’s mine.
Lowndes: Would you agree you have falsified records?
King: Yes
Lowndes: Do you think you have led by example?
King: No
Lowndes: Would you agree that this course of conduct is unacceptable as an assistant store manager?
King: Yes
[27] Similar questions were put to Ms King regarding the further payments of $10.00 and $69.00. Ms King’s responses are recorded as follows:
“…..it was my lay-by I was paying for it.”
“Because it was mine.”
“It was a stupid thing to do, but I wasn’t doing anything wrong. I was paying for it. I know it’s wrong, I understand.”
“It’s mine, not like I’m stealing.”
[28] The Disciplinary Meeting Record was prepared by Prouds following the interview earlier in the day on 23 October 2015. Ms King signed the document. The relevant summary was included in the Record:
(a) You created a Lay-By (1112815) on the 13th June, 2015 in the name of Kel Lane with no deposit and no customer in the store. During the investigation you stated that Kel Lane is your father. You further stated the reasons for creating the layby without anybody in store was you couldn’t afford them, you know it’s wrong but you did it because you couldn’t afford it. You agreed it is not acceptable to be creating lay-by with no customers in store. You stated the reason why no deposit put on the layby was you thought there was, you could not provide an answer when you were told the receipt had no deposit. You agreed you have falsified records. During the investigation you agreed you have not led by example. You agreed that this course of conduct is unacceptable as an assistant store manager.
(b) A Lay-By (1112815) payment made on the 29th June, 2015 of $5.00 by operator 105188 (Tracey). This transaction was processed without the customer in store under your direction. It is alleged you provided the funds of $5 to the team member to make this payment. You stated the reasons why you provided the funds to Tracey was because it was for you. You stated the reasons why the payment was put on the layby without the customer in store was because it was yours. During the investigation you agreed you have falsified records. You agreed you have not led by example and agreed that this course of conduct is unacceptable as an assistant store manager.
(c) A Lay-By (1112815) payment made on the 17th July, 2015 of $10.00 by operator 100941 (Natasha). This transaction was processed without the customer in the store under your direction. It is alleged you provided the funds of $10 to the team member to make this payment. During the investigation you stated that you know, it was your lay-by, you were paying for it. You stated the reasons why you provide the funds to Natasha was because it was yours. You agreed that you have falsified records. During the investigation you stated you have not led by example and agreed that this course of conduct is not acceptable as an assistant store manager.
(d) A Lay-By (1112815) payment made on the 4th October 2015 of $69.00 by operator 97640 (Hannah). This transaction was processed without the customer in the store under your direction. It is alleged you provided the funds of $69 to the team member to make this payment. It is alleged you advised the team member that you “required the items urgently”. During the investigation you stated the reasons why the layby was created without a customer in store was because it was due to be collected, that’s why. It was a stupid thing to do; you know it’s wrong you understand. You agreed it is not acceptable to be creating a lay-by with no customers in store. You agreed you have falsified records. You stated the reasons for making the comment “you required the items urgently” was because it was due to be collected. During the investigation you agreed you have not led by example and agreed that this course of conduct is unacceptable as an assistant store manager.
[29] In cross-examination, the following exchanges occurred:
And, you see, I want to put it to you that during the course of the investigation you admitted that this particular layby transaction was for your own personal benefit and not for that of your father's?---No. I said that the layby was for my father. 5
And during the investigation you admitted that the reason why you put it in your father's name was because you already had one layby in place for yourself?---That's correct. 6
[30] And in addition:
Can you see that at the top of the receipt there it's got the words "team member", then there's a colon, then there's the number 40404?---Yes. 7
And that's your payroll number, isn't it?---That's correct, it was. 8
Yes. And it's also your operator ID number for the purposes of entering transactions?---Yes, it was. 9
In the store. Yes. So I want to put it to you squarely that the appropriate conclusion to draw from this document is that you created this layby?---No, not necessarily. Like, I said I could have been in the computer doing something at the time and I've left the screen open. And, therefore, any staff member can walk past and do anything under my name. 10
Right. But you don't have any evidence that that happened. You're just speculating, aren't you?---No, I don't have any evidence that that happened. But it's quite possible. 11
[31] After Ms King had been cross examined by Prouds, I asked Ms King if she disagreed with any of the handwritten comments of the Interview Record Form. Ms King’s evidence is that disagreed with “quite a bit of it”, and the answers written down were not full accounts of what she said during the interview.
[32] Ms King disputed that she said during the interview that the layby had been created for her. She insisted at hearing that it had been created for her father, and that is the only answer she gave during the interview. The following questions were put by me and Ms King responded:
What do you say was your answer?---I told them, again, I was paying for the lay-by, but it was for my father. I don't even think I understand half the questions, let alone anything else. 12
Okay. Take me through anything else there that you dispute was your answer on the day?---On page 8 where it says that I said to a staff member that I required the items urgently. That's why I collected them. I didn't collect it because I needed them urgently. I collected them because it was due to be collected. 13
It's recorded here that your answer was, "Due to be collected. That's why"?---Yes. 14
Do you dispute that you answered, "Due to be collected. That's why"?---No, I dispute that it says I required the items urgently. 15
That is the question that I suspect the witnesses will suggest they put to you and you answered, "It was due to be collected. That's why"?---Mm-hm. 16
I'm not asking you whether the typed script is incorrect or correct?---Okay. 17
I'm asking you now whether the answers recorded in handwriting were answers given by you or whether you say they are incorrect or false?---Okay. I don't know. I just --- 18Just below that, on page 8, you were purportedly asked, "Why was the lay-by created without a customer in store?" It's recorded that you answered, "It was a stupid thing to do, but I wasn't doing anything wrong. I was paying for it. I know it's wrong. I understand"?---I would have said something to that effect, but also I would have said that I had my manager's permission to do it.19
[33] During examination-in-chief of Mr Burt, he was asked if the layby made by Ms King had a discount apply to it. Mr Burt answered yes, that there was a staff discount applied. 20
[34] I asked Mr Burt what discounts had been applied with respect to the layby. Mr Burt detailed each retail price and price paid by Ms King and concluded that a staff discount on the items had been applied. With reference to four pen refills, the price paid for each item was a staff price.
[35] In cross-examination, Mr Williams suggested to Mr Burt that the items had been discounted generally due to a sale that was occurring at the time. Mr Burt could not recall if a sale was occurring at the time the layby was generated.
[36] Mr Burt was asked to explain to the Commission why Prouds’ layby policy exists. He answered, “It’s to protect ourselves and the customer, and the customer must be on the other side of the shop floor while we’re processing a transaction.”
Alleged bullying of a team member
[37] The investigation into Ms King’s conduct included an allegation that in September 2015, Ms King had intimidated and embarrassed a junior staff member, and spoken harshly at a team meeting in October 2015.
[38] The Disciplinary Meeting Record, prepared from the notes taken by Mr Burt in the Interview Record Form effectively made a finding that Ms King’s conduct was not appropriate during these two events.
[39] It is fair to say that Prouds relied on these two findings (among their other findings) to support a decision to terminate Ms King’s employment. It was included as a breach within the Disciplinary Meeting Record.
[40] During the course of the hearing, at the opening of the respondent’s evidentiary case, Mr Barwick informed me that Prouds no longer wished to press the two issues above as supporting Prouds’ assertion that the termination was for a valid reason. In written submissions, it was confirmed that Prouds had abandoned the above two allegations as valid reasons for the dismissal.
[41] I understand that the submission made by Prouds is effectively that I should find that the other allegations, bar these, do form a valid reason for termination.
Staff discount provided to a friend
[42] On 19 September 2015, Ms King entered the store with a friend named David Pearson. Mr Pearson is a friend of Ms King and Mr Williams. A purchase was made by Mr Pearson to the value of $369.10.
[43] The store manager, Tracey attended to Mr Pearson, with Ms King nearby. Tracey rang up the sale, attributing the sale to Ms King, and providing Ms King’s staff discount to the purchase.
[44] The Employee Handbook includes the following:
2.37 Shopping In Store / Discount Policy
Purchases by Team Members can be made before or after their shift. A Team Member is not permitted to conduct any personal purchases, exchange or return transaction unless a member of Management is present. All details must be recorded. Full-Time and Part-time Team Members are entitled to a Team Member discount after successfully completing 3 months (90 days). Casuals are only entitled to a discount after 6 months.
For further details on the discount policy, Team Members please speak to your Manager or check the Intranet.
Failure to comply with the discount structure will result in disciplinary action and may result in termination or prosecution.
The Company has the right to withdraw the discount privilege at any time without notice.
[45] The Interview Record Form completed by Mr Burt records the following account [with some minor grammatical errors amended by me, and noting that Mr Pearson’s name has been recorded incorrectly at various times]:
Lowndes: On the 19th September 2015 CCTV shows you enter the store with a male “friend”. A sale of a black sapphire pendant, chain and earring is processed at 11.45am under transaction number 1115085 by operator 105188 and OSP to operator 40404 for the amount of $369.10. The sale was finalised by the male friend with you, the male friend received staff prices. Please explain.
King: Friend ‘Dave’ it’s not relevant I give you his surname. OK, Pierce [sic]. No-one knows him. No-one would know him. He’s never been in that store with me before or any other store.
Lowndes: Who was the customer?
King: Friend of mine. Shopping for his niece’s 21st. Dave Pierce [sic]. He’s a close family friend of mine. [Michelle laughs]. He lives at [location].
Lowndes: Why was your discount used?
King: Only personal and gift-shopping together. He paid for it. He purchased it. I should of paid for it, sorry.
Lowndes: Do you think it is acceptable to be giving your discount to a customer?
King: No but yes.
Lowndes: Do you think you have deprived the company of funds?
King: Yes.
Lowndes: Do you think you have led by example?
King: No.
Lowndes: Would you agree that this course of conduct is unacceptable as an assistant store manager?
King: Yes
[46] The Disciplinary Meeting Record details the following:
During the investigation you stated the customer was your friend is Dave. He was shopping for his niece 21st. His name was Dave Pierce [sic], he is a close family friend of yours and lives at [location]. You stated the reasons why the discount was used was gift shopping together, he paid for it, he purchased it, you should have paid for it. Sorry. You agreed it is not acceptable to be giving your discount to a customer. You agreed you have deprived the company of funds. During the investigation you agreed you have not led by example and agreed that this course of conduct is unacceptable as an assistant store manager.
[47] It was Ms King’s evidence in cross-examination that she did not process the sale to Mr Pearson, and this was done by her manager, Tracey. It was Tracey, and not Ms King who decided to give to Mr Pearson the staff discount that Ms King was entitled to use for her own purchases. 21
[48] Ms King was asked the following in cross-examination 22:
Ms King, during the investigation meeting with Mr Lowndes, you admitted that you knew it was not acceptable to be giving your staff discount to a customer?---No, I said it was not acceptable for anyone to be giving my staff discount to anyone.
[49] Ms King confirmed that she signed off on the Team Member Purchase Register to record a 50% discount on one of the items purchased for Mr Pearce, and 60% on another item.
[50] In cross-examination the following exchange occurred in relation to the Team Member Purchase Register:
Subsequently you signed off on the staff log that that was your transaction?---What was I supposed to do? She had already - she had done it. 23
You could have told her it was the wrong thing?---If I didn't sign down on it and write it up, I would have got in trouble for a staff purchase being done and not written up. 24
Come now?---So it didn't matter. It wouldn't matter either way, would it? 25
Ms King, Ms [edited] could not possibly have disciplined you over complying with company policy about staff discounts not being given to customers?---That was it. She used my staff discount for a customer, not me. 26
[51] It appeared from Ms King’s evidence that she did not consider the staff discount of 50% and 60% that was provided to her friend to be of any significant concern. The following was put to Ms King in cross-examination 27:
You knew that, as a consequence, Prouds would lose money on those transactions when it shouldn't have done so?---What do you mean, lose money? We were always discounting stuff in the store. 28
Well, because if Mr Pearce had purchased it as a normal customer would have without the benefit of the staff discount, Prouds would have?---He probably wouldn't have paid much less than what he already did. 29
Well, come on?---Much more, sorry. 30
[52] The evidence of Mr Burt is that the staff discount of 50% and 60% afforded to Mr Pearson did cause Prouds to suffer a loss with respect to the transaction. Mr Burt’s evidence is that the maximum discount available to members of the public is in the order of 10% to 15%. 31
[53] Mr Williams asked Mr Lowndes in cross-examination, would there have been an issue if Ms King had obtained from Mr Pearson the money to purchase the items outside of the store, and then properly purchased them herself, accessing the staff discount. Mr Lowndes did not directly answer the question, and instead answered:
“I think that's incorrect, because I believe Michelle acknowledged during the interview process that the way the transaction happened was incorrect and she was at fault.”
[54] Mr Williams again put the question to Mr Lowndes; the scenario of Ms King taking the money from her friend outside of the store, making the purchase herself, and accessing the staff discount. Mr Lowndes answered:
“If Michelle followed the correct procedures on her staff discounts, I don't think there would be the issue.”
[55] I asked Mr Lowndes the following:
…….. Did you inform her that if she had bought it herself, it would not have been an issue?---I may have said to Michelle that if the item was purchased correctly, it may not have been an issue because it's not an issue. The way in which it was done was the concern. It was a breach of our policies and procedures. 32
Ms King writing up her own repairs
[56] Ms King agreed that she had written her name on a repair packet in order to have the store jeweller repair her broken necklace. Another store member placed Ms King’s necklace in the packet and sealed it.
[57] Ms King confirmed when questioned by me that she understood that staff members should not write up their own repairs; it was against company policy. Ms King had concluded, however, that because an amount for the repair had not been put on the packet by her (or the subordinate staff member), it was of no consequence. The jeweller would be the person to decide how much to charge for the repair.
[58] Mr Burt explained in examination-in-chief that if a staff member requires a piece of jewellery to be repaired, it is to be taken to the store manager or the assistant store manager to be written up. He explained that the policy is in place for security reasons; to protect the staff member and the tradespeople [jewellers].
[59] In cross-examination, Mr Burt was asked if an assistant manager has the right to write up a repair packet. Mr Burt answered no, that it must be done with two people. 33
Special order for customer, Mr Kennedy; and other concerns
[60] In cross-examination, Ms King was asked to explain her involvement in an order for a customer, Mr Kennedy. She described it as a “disaster”.
[61] It is Ms King’s evidence that Mr Kennedy is a friend of the former manager, Tracey. Largely, transactions relating to Mr Kennedy were dealt with by Tracey. Special orders would be made for items for purchase or layby for Mr Kennedy, and items would be placed by Tracy for Mr Kennedy on layby, and then taken off layby. These transactions appear to be in breach of company policy.
[62] Ms King stated that she had asked Tracey about these transactions, but was assured by her that she had permission to do what she was doing.
[63] Ms King agreed that she had processed an order for Mr Kennedy at the request of her manager, Tracey. She did not follow company policy, and processed the special order without requiring a 30% deposit.
[64] When Ms King was questioned by Mr Lowndes in relation to this on 23 October 2015, Mr Burt recorded her response as follows:
I cannot recall why I did this. I do not remember. Everyone new (sic) not to touch [name] Kennedy. Anything of his. I would of been told I [illegible] in falsifying company records by following her directions. Yes I did do something fraudulent. s/o without deposits happens all the time. Traceys customer they are police officers.
[65] The Interview Record Form records the following answer to the question: What are the reasons for creating the special order without anybody in store:
I no (sic) it’s wrong but Tracey would of told me to do it. I dunno, I just can’t answer that, it is dishonest and misleading. Never intentionally. I know I’ve broken policy and procedure.
[66] When Tracey asked Ms King to later cancel the special order, Ms King did so, and placed $100 in the company safe at the request of Tracey. Ms King states that she questioned Tracey as to why a $25 cancellation fee should not apply, and was informed by Tracey that the $100 was hers, and not Mr Kennedy’s.
[67] Ms King’s evidence is that when she was questioned about this transaction on 23 October 2015, she stated that it was Tracey’s fraudulent conduct, not her own. It was Tracey who had wanted to achieve budget by creating false sales; it was not Ms King’s own actions.
[68] Ms King agreed in cross-examination that she was aware that what Tracey was doing was wrong. Ms King answered, “When that came to light, yes.” 34
[69] Ms King was asked if she knew that there were numerous fraudulent transactions carried out by Tracey. It is Ms King’s evidence that she knew there were transactions being carried out by Tracey, and she had questioned her in relation to them. On each occasion, Tracey informed Ms King that she [Tracey] was the manager, she had permission, and it was none of Ms King’s business.
[70] Ms King agreed that when she was interviewed by Mr Lowndes, she had informed him that she was aware of Tracey’s practices of inflating sales in order for Tracey to earn greater commission.
[71] The Interview Record Form details the following questions put to Ms King and her answers as recorded by Mr Burt:
Q: On the 6th October 2015 you stated that you were aware of “numerous fraudulent layby’s conducted at the store by operator 105188 to gain sales and achieve store budget” you admitted that this was wrong however “you were caught up in the moment”. Please explain.
A: Stupidly I new (sic) it was fraudulent. I condoned this. It’s common knowledge in all store. Natasha herself has done it.
Q: What are the reasons for engaging in this behaviour?
A: It was lay-byed on and off a lot. She told me about some others she did or Tash told me. ........ Yes I condoned this I understand.
Q: What are the reasons for not bringing this information forward prior to the investigation starting at your store?
A: Dunno, but I should of. Budgets and be #1. Caught up in the hype of being the best. I new (sic) it was wrong but I ignored it.
Q: On the 6th October 2015 you stated that you were aware that it looked bad “as commission was paid out to the team member if the store made budget and the team member made IPS”. Please explain.
A: We did anything to get dollars in the till. We wanted to be number one. It just looks bad because it’s fraudulent and dishonest.
Q: What are the reasons for not bringing this information forward?
A: Dunno I’m fully accountable. I knew once you were in store you would find out. Conversation help trigger these things.
Protection from Unfair Dismissal
[72] An order for reinstatement or compensation may only be issued where I am satisfied that Ms King was protected from unfair dismissal at the time of the dismissal. Section 382 of the Act sets out the circumstances that must exist for Ms King to be protected from unfair dismissal.
[73] There is no dispute, and I am satisfied, that Ms King was protected from unfair dismissal.
[74] It is not disputed that the dismissal was at the initiative of Prouds.
Harsh, unjust or unreasonable
[75] I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at 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, the FWC 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 the FWC considers relevant.”
[76] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:
“.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[77] I am under a duty to consider each of these criteria in reaching my conclusion. 35
[78] Ms King submits the dismissal was harsh, unjust or unreasonable because:
(a) the allegations made against Ms King in respect of falsifying documents are false and misleading;
(b) the interview conducted on 23 October 2015 was at times inaccurate, nonfactual and stressful. No-one from Prouds HR was present at the interview and Ms King did not have a support person with her because she felt that she didn’t need to;
(c) Prouds took some disciplinary action against some staff in the form of a verbal warning; they did not lose their jobs;
(d) Ms King has applied for many jobs, mainly in retail jewellery, but upon disclosure of the reasons given by Prouds for the termination of her employment, she has been unsuccessful;
(e) Ms King has obtained casual work, but this work is precarious. Ms King now suffers from some physical limitations due to the kind of work she is performing, and did not suffer these ailments while working in jewellery retail.
[79] Prouds submits the dismissal was not harsh, unjust or unreasonable because:
(a) Prouds conducted a meeting with Ms King in the course of its investigation and made factual findings contained within the Disciplinary Meeting Record;
(b) The Disciplinary Meeting Record contains a summary of the findings made by Prouds in relation to each of the allegations, Ms King’s responses, and how each of the findings were said to amount to a breach of Prouds’ various policies;
(c) according to the Disciplinary Meeting Record, Ms King made a number of admissions;
(d) Ms King signed the Disciplinary Meeting Record;
(e) the handwritten notes made by Mr Burt in the Interview Record Form corroborate and are consistent with the admissions recorded in the Disciplinary Meeting Record;
(f) the admissions made by Ms King during the interview of 23 October 2015, as evidenced by the Disciplinary Meeting Record and the Interview Record Form founded a sound basis for Prouds to conclude that there were valid reasons for the dismissal of Ms King;
(g) where the evidence of Mr Lowndes and Mr Burt conflicts with Ms King’s, the evidence of Mr Lowndes and Mr Burt should be preferred.
[80] I will now consider each of the criteria at s.387 of the Act separately.
Valid reason - s.387(a)
[81] Prouds must have a valid reason for the dismissal of Ms King, although it need not be the reason given to the Applicant at the time of the dismissal. 36 The reasons should be “sound, defensible and well founded”37 and should not be “capricious, fanciful, spiteful or prejudiced.”38
[82] The reason Prouds gave for the dismissal of Ms King was that she had engaged in misconduct, serious in nature to result in a decision to terminate the employment with immediate effect. The termination letter stated, “Despite being viewed as misconduct the Company has elected to pay 4 weeks pay in lieu of notice.”
[83] Prouds relied on the Interview Record Form, completed contemporaneously by Mr Burt during the interview with Ms King. There was a gap of several hours between the completion of the interview on 23 October 2015, and the issuing of the Disciplinary Meeting Record and termination letter to Ms King. The human resources department of Prouds relied upon Mr Burt’s handwritten notes contained within the Interview Record Form to complete the Disciplinary Meeting Record.
[84] Ms King’s evidence is that she did not understand all questions that were put to her at the interview by Mr Lowndes. Mr Lowndes denied that he had ‘verballed’ Ms King when interviewing her. 39 The evidence of Mr Lowndes is: “My questions were in no way rephrased in a way to attempt to gain a favourable outcome for myself. I did assist Michelle with questions she appeared to have difficulty with and was not able to understand the question, or in some cases would not answer the question at all.”40
[85] During the hearing, Ms King’s evidence is that she did not read the Disciplinary Meeting Record during the meeting of 23 October 2015. Ms King stated that the answers recorded by Mr Burt were largely incomplete; they only recorded parts of what she said and not her complete answers.
[86] I find that by and large, the handwritten notes made by Mr Burt record the verbal answers given by Ms King. I am compelled to find the notes are an accurate reflection of the answers given by virtue of the fact that the answers were then used on the same day to form the document known as the Disciplinary Meeting Record.
[87] I find that Ms King was not prepared for the meeting of 23 October 2015. Ms King did not give enough importance to the suspension letter and letter of allegations of 22 October 2015. Ms King provided answers to Mr Lowndes, recorded by Mr Burt. While Mr Burt would be unable to handwrite every word answered by Ms King, I do find he has satisfactorily recorded the answers provided by Ms King. There may have been additional words used by Ms King. Ms King stated that she would have said, in addition to what has been recorded, that the actions she took were with the full knowledge and approval of her manager, Tracey.
[88] Even if those words were said by Ms King, and not recorded by Mr Burt, they do not alter, in my view to any significant degree, the misconduct engaged in by Ms King. I provide reasons below with respect to each of the issues before me.
Ms King’s conduct with respect to the layby
[89] In relation to the layby made by Ms King on 13 June 2015, I find that Ms King’s evidence has wavered. During the investigation on 23 October 2015, Ms King’s response is recorded as:
“Fathers Lay-by he was not in store. Already had a staff purchase on, so already had one. So it’s stupid I know. I’ve been in the business for 9 yrs. I know I have breached policy and procedures. I shouldn’t of done it, I knew better.”
[90] The remainder of her answers, recorded by Mr Burt were that the layby was for her, and not for her father. In evidence at the hearing, Ms King stated that the layby was her father’s layby, and not hers.
[91] I find that the layby was Ms King’s and not her father’s. If I were to find that the layby was Ms King’s father’s, I would necessarily have to find that almost all of Mr Burt’s handwritten records with respect to the answers provided by Ms King about the layby, are false. I do not find so. I accept that Ms King answered Mr Lowndes’ question in the manner recorded above; initially she said the layby was for her father, but then she answered that she already had one layby on in her own name, and she obtained Tracey’s approval to put another layby on, but recorded her father’s name instead.
[92] Ms King’s answer recognises that she knew she was not allowed to do what she had done, despite having Tracey’s approval to do so. Tracey could not provide approval for this transaction, whether or not it was Ms King’s personal layby, or whether it was for her father.
[93] Further, I find that the layby did attract a discount of at least $69.00 off the retail price of the items purchased. It is not clear whether the discount was attracted because of a staff discount that Ms King applied to her purchase, or whether it was due to a sale at the time. It is for this very reason why Prouds’ policy is in place, to ensure that staff members do not conduct their own sales.
[94] If the layby was purchased for her father, the evidence is that Ms King received at least some small discount on the pen refills. Mr Burt’s evidence is that the pen refills were charged at a staff discounted rate. 41
[95] I do find that Ms King made a payment of $28.00 to Prouds representing the 25% deposit required for the items. This occurred on 13 June 2015, as evidenced by the bank account statement referred to by Ms King. While the statement was not formally admitted into evidence, I have given consideration to the document.
[96] My finding is that Ms King was honest with her answers to Prouds with respect to the layby. She answered that the layby was for herself, and not for her father. She provided an explanation as to why she had put the layby in her father’s name, having already a layby in her own name. This second layby had been approved by Tracey.
[97] I find that Ms King engaged in misconduct by placing the items on layby. Ms King knowingly completed a false business record, recording a layby in a customer’s name when the layby was for her own benefit. She did not do so to obtain a financial benefit; nevertheless, it was a significant breach of her employer’s policies. Ms King was aware her actions were not permitted.
[98] If I am wrong by finding that the layby was for Ms King and not for her father, I have formed the view that Ms King engaged in misconduct by creating a layby for her father, with direct knowledge this action constituted a breach of company policy. Whether she had approval from a manager who was prepared to bend the rules is irrelevant. Ms King has admitted that she knew what she was doing was wrong. If Ms King obtained a staff price with respect to the items, and it is known that she did at least with respect to the pen refills, the misconduct is exacerbated. It does not matter that each pen refill, of which there were four, were nominal in value.
Staff discount provided to a friend
[99] Ms King attended the store on a day off in the company of a family friend. A purchase was made by the friend, and Tracey managed the transaction, providing Ms King’s staff discount to the purchase. The discount amounted to approximately $429.40.
[100] Ms King’s evidence is that she only became aware of Tracey’s actions in giving her friend the discount immediately thereafter it happened. She agreed that she was at the register (on the shop side) with her friend as Tracey conducted the transaction.
[101] Ms King later signed a staff discount register, attesting that the discount was for her purchase. She knew this transaction was not her purchase.
[102] Ms King’s evidence is that it was Tracey who had given her discount to her friend, and if she hadn’t completed the staff discount register, she would have been in trouble for not writing it up. She said in evidence that she “had words” with Tracey over giving her staff discount to her friend.
[103] Mr Lowndes conceded that if Ms King had obtained the money from her friend to purchase the item, and did, in fact purchase the items herself, there would be no complaint from Prouds. However, that did not happen.
[104] Ms King was not responsible for her staff discount being applied to the sale of items for her friend. This action was undertaken by Tracey. However, Ms King knew Tracey’s actions were inappropriate and against company policy.
[105] It was available to Ms King to protest to Tracey immediately after the purchase was made. While it was not before me in evidence, it is highly probably that the sale could have been reversed or refunded, and a new transaction made without the discount applying.
[106] With the evidence before me as to the creation of false purchases made by Tracey at various times, it would appear that Tracey was indifferent to the application of Prouds’ discount policy.
[107] Ms King’s responsibility to her employer at the time was to protest Tracey’s actions. If the protest fell on deaf ears, Ms King’s responsibility was to report the incident to a higher level of management. Instead, Ms King signed her name against the staff discount register.
[108] I find that Ms King engaged in misconduct on this occasion by knowingly completing a false business record.
Ms King writing up her own repairs
[109] On the evidence before me, Ms King simply put her name on a packet or envelope, for the item to be given to the store jeweller. Another staff member placed Ms King’s broken necklace in the packet and sealed it. Ms King did not quote a repair cost.
[110] While I accept that Ms King did not follow the company policy with respect to repairs, the breach of policy was minor. Ms King did not benefit from this action. I do not find misconduct with respect to this incident.
Special order for customer, Mr Kennedy; and other concerns
[111] Having regard to all the information before me, and Ms King’s answers during the interview of 23 October 2015, I am satisfied that Ms King knew that Tracey’s actions were improper. Ms King could have informed senior management of the practices, but she did not do so.
[112] Whether she said that she or Tracey wanted the store to be number one is irrelevant. Ms King knew that Tracey was recording items as valid purchases when they were not. She was also aware that those purchases would then later be cancelled. This conduct occurred to inflate sales figures, which might then lead to the payment of commission.
[113] There is no evidence before me that commission was paid to Ms King as a result of these actions, however I am satisfied that she was aware of the actions. Despite her evidence that she was assured by Tracey that these practices were authorised, her statements made during the interview, with reference to a conversation she had on 6 October 2015 demonstrate that Ms King was indeed aware of the improper activities.
[114] I find that Ms King engaged in misconduct by not reporting the improper practices that she was aware of. As an Assistant Store Manager, she was in a position to report this conduct. She was not, for example, a junior store assistant in her first year of employment, unsure whether to report this conduct to management or not.
[115] In Ms King’s own words, she condoned the activity. Ms King’s admissions are, “I knew once you were in store you would find out. Conversation help trigger these things.”
Consideration
[116] Having determined that Ms King engaged in misconduct with respect to:
(a) the layby issue;
(b) the discount for a friend issue; and
(c) the special order for Mr Kennedy and other issues;
(d) but did not engage in misconduct with respect to writing up her own repairs;
[117] I find that there was a valid reason for the dismissal of Ms King.
Notification of the valid reason - s.387(b)
[118] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made, 42 in explicit terms43 and in plain and clear terms.44 In Crozier v Palazzo Corporation Pty Ltd45 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations FW Act 1996 stated the following:
“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.” 46
[119] Ms King was notified of the reasons Prouds relied upon for her dismissal in a letter of allegations dated 22 October 2015. The letter detailed the allegations against Ms King, and advised that an investigation into allegations of misconduct was going to be undertaken. Ms King was informed that a meeting had been arranged for the next day for her to formally respond to the allegations.
[120] At this meeting, Ms King gave her version of events. A decision to terminate her employment was not made until after a period of time was taken to consider Ms King’s responses. I am satisfied that the decision to terminate Ms King’s employment was not made prior to the first meeting of 23 October 2015.
[121] I find Ms King was notified of the reason for the dismissal prior to the decision to terminate her employment.
Opportunity to respond - s.387(c)
[122] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 47
[123] Ms King was asked a number of questions read by Mr Lowndes from a prepared script. Ms King was afforded an opportunity to respond to each of the questions put by Mr Lowndes.
[124] Ms King asserted in her written material that she felt ‘verballed’ by Mr Lowndes when being interviewed. Mr Lowndes denied that he ‘verballed’ Ms King, or intimidated her in any way. I accept that Mr Lowndes is vastly more experienced in these kinds of interviews than Ms King, however I do not find that Ms King was at an unfair disadvantage. Ms King is a woman of mature age, and having reached the position of Assistant Store Manager, I do not find that she lacked the requisite assertiveness to answer the questions put to her.
[125] I find that Ms King was given an opportunity to respond to the reason for the dismissal.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[126] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.
[127] In the letter dated 22 October 2015 informing Ms King of the interview the following day, and setting out the allegations, Ms King was invited to bring a support person if she wished. Ms King attended the meeting without a support person.
[128] I find that Prouds did not unreasonably refuse to allow Ms King to have a support person present at discussions relating to the dismissal.
Warnings regarding unsatisfactory performance - s.387(e)
[129] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employer about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct. 48
[130] In this case, Ms King’s dismissal was on the basis of misconduct, not unsatisfactory performance, so the issue of prior warning does not arise.
Impact of the size of the Respondent on procedures followed - s.387(f)
[131] Prouds employs approximately 5000 people across Australia. It is a large company with a dedicated human resources function.
[132] I find that the size of Prouds’ enterprise did not impact on the procedures following in effecting the dismissal.
[133] This is a neutral consideration in determining whether the termination of Ms King’s employment was harsh, unjust or unreasonable.
Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)
[134] Prouds has dedicated human resources personnel.
[135] This is a neutral consideration in determining whether the termination of Ms King’s employment was harsh, unjust or unreasonable.
Other relevant matters - s.387(h)
[136] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. I consider the following matters to be relevant to the determination of whether the dismissal of the Ms King was harsh, unjust or unreasonable:
Ms King’s period of service and her age
[137] In Sexton v Pacific National (ACT) Pty Ltd 49, Vice President Lawler noted:
“Relevantly advanced age and long service can render harsh a termination that would not be harsh in the case of identical conduct by a younger person with relatively short service. Nevertheless, age and length of service simply remain a factor to be taken to account in considering whether the termination was harsh, unjust or unreasonable and in applying the principle of a “fair go all round”.”
[138] Ms King is middle-aged and at the time of her termination had approximately seven and a half years’ service. Ms King’s evidence is that she would have continued working at Prouds, at least up until the period when she became entitled to long service leave; at 10 years’ service.
[139] The termination of Ms King’s employment at the initiative of the employer has resulted in her losing any entitlement to payment on termination of pro rata long service, having reached the threshold of seven years. Ms King would be entitled to the payment of pro rata long service leave if a finding was made by the Commission that she had been unfairly dismissed.
[140] Ms King submits that her reputation within the jewellery and sales industry has been significantly damaged.
Ms King’s employment record
[141] Prior to the investigation commencing in October 2015, Ms King had an unblemished employment record. There had not been any earlier performance issues raised in any formal setting. The termination of employment was, however, based on conduct which Prouds say was uncovered in October 2015.
Serious misconduct
[142] In terminating Ms King’s employment, Prouds described Ms King’s offences as constituting serious misconduct. At Prouds’ discretion, the payment of four weeks’ wages was made to Ms King.
[143] An authority of a Full Bench of this Commission has determined that it is not necessary to make a finding as to whether misconduct of an employee fits the definition of serious misconduct that is often quoted in s.394 applications for unfair dismissal.
[144] The authority referred to is O'Connell v Wesfarmers Kleenheat Gas Pty Ltd[2015] FWCFB 8205 (18 December 2015). In this decision, the Full Bench heard an appeal of a single member of the Commission, and a consideration of that member with respect to a dismissal and whether it constituted serious misconduct or not.
[145] The Full Bench stated the following about the single member decision:
[22] We make one observation about the Decision. In his consideration under s.387(a) of the FW Act as to whether there was a valid reason for the dismissal, the Commissioner made reference to “[s]ummary dismissal for misconduct in employment” and referred to the definition of “serious misconduct” in reg.1.07 of the Fair Work Regulations 2013. This was, with respect, a distraction. As was said by the Full Bench in Sharp v BCS Infrastructure Support Pty Limited 50:
“[32] … It is certainly well established that, for the purposes of s.387(a), it is not necessary to demonstrate misconduct sufficiently serious to justify summary dismissal on the part of the employee in order to demonstrate that there was a valid reason for the employee’s dismissal (although established misconduct of this nature would undoubtedly be sufficient to constitute a valid reason). 51 Nor is the existence of a valid reason to dismiss assessed by reference to a legal right to dismiss.52 Therefore whether Mr Sharp’s admitted conduct amounted to misconduct serious enough as to give rise to the right to summarily dismiss him under the terms of his contract of employment was not relevant to the required s.387(a) consideration. It may be noted in any event that Mr Sharp was not summarily dismissed, but dismissed with a payment in lieu of notice.
[33] The relevance of the definition of “serious misconduct” in reg.1.07 to the matter is also, with respect, obscure. Section 12 of the Act contains a definition of serious misconduct for the purposes of the Act which simply cross-refers to reg.1.07. Apart from s.12 itself, the expression serious misconduct is used in only three places in the Act. In s.123(1)(b), a dismissal for serious misconduct is a circumstance in which the notice and redundancy entitlement provisions of Pt 2-2 Div 11 are not applicable; in s.534(1)(b) a dismissal for serious misconduct is one to which the requirements for notification and consultation in Pt 3-6 Div 2 do not apply; and in s.789(1)(b) a dismissal for serious misconduct is one in relation to which the requirements established by Pt 6-4 Div 3 for notification and consultation do not apply. The expression “serious misconduct” is not used anywhere in Pt 3-2, Unfair Dismissal, of the Act. Section 392(3) requires the Commission, in relation to the award of compensation for an unfair dismissal, to reduce the amount that it would otherwise order by an appropriate amount where it is “satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person”. However, it is clear that conduct may constitute “misconduct” for the purpose of s.392(3) without necessarily being “serious misconduct”. The expression is used in the Small Business Fair Dismissal Code, but that had no application in this case (and it is at least highly doubtful in any event whether the reg.1.07 definition applies to the Small Business Fair Dismissal Code). 53 Reg.1.07 therefore had no work to do in the application of the provisions of Pt 3-2 to the circumstances of this case.
[34] It may be accepted that an assessment of the degree of seriousness of misconduct which has been found to constitute a valid reason for dismissal for the purposes of s.387(a) is a relevant matter to be taken into account under s.387(h). In that context, a conclusion that the misconduct was of such a nature as to have justified summary dismissal may also be relevant. Even so, it is unclear that this requires a consideration of whether an employee’s conduct met a postulated standard of “serious misconduct”. In Rankin v Marine Power International Pty Ltd 54 Gillard J stated that “There is no rule of law that defines the degree of misconduct which would justify dismissal without notice”55 and identified the touchstone as being whether the conduct was of such a grave nature as to be repugnant to the employment relationship.56 Serious misconduct is sometimes used as a rubric for conduct of this nature, but to adopt it as a fixed standard for the consideration of misconduct for the purpose of s.387(h) may be confusing or misleading because the expression, and other expressions of a similar nature, have been considered and applied in a variety of contexts in ways which are influenced by those contexts. In McDonald v Parnell Laboratories (Aust) Pty Ltd57 Buchanan J said:
‘[48] The terms ‘misconduct’, ‘serious misconduct’ and ‘serious and wilful misconduct’ are often the subject of judicial and administrative attention as applied to the facts of particular cases but there is relatively little judicial discussion about their content and meaning. Naturally enough, when the term ‘serious misconduct’ is under consideration an evaluation of what conduct represents ‘serious’ misconduct is influenced by the (usually statutory) setting in which the phrase must be given meaning and applied. Frequently, for example, the question at issue is whether an employee is disentitled by reason of his or her conduct to a statutory entitlement (eg. in New South Wales, where Ms McDonald was employed, see Long Service Leave Act 1955 (NSW) s 4(2)(a)(iii); Workers Compensation Act 1987 (NSW) s 14(2).’”
[23] It is of course the case that the commission of any of the types of conduct referred to in reg.1.07 (broadly speaking, wilful or deliberate conduct inconsistent with the continuation of the employment contract, serious and imminent risk to health and safety or the viability of the business, theft, fraud, or assault, intoxication at work and refusal to carry out a lawful and reasonable instruction) may well ground a finding under s.387(a) that there is a valid reason for dismissal, and would also be given significant weight in considering whether a dismissal for such conduct is harsh, unjust or unreasonable under s.387. It must also be acknowledged that the application of the exemption in s.123(1)(b) from the requirement to provide the NES entitlement to notice would not be irrelevant under s.387. But the point is that “serious misconduct” as defined in reg.1.07 (or otherwise) is not the criterion for whether a valid reason exists under s.387(a) or for whether a dismissal is unfair or not. It may well be the case, for example, that conduct that does not fall within reg 1.07 may nonetheless be found to constitute a valid reason for dismissal. Alternatively, the fact that a dismissal is based on conduct that does fall within reg.1.07 does not preclude a finding that the dismissal was harsh, unjust or unreasonable.
[146] I concur with the above Full Bench decision, and find that I am not, in determining whether there was a valid reason for the dismissal, obliged to consider Regulation 1.07 of the Fair Work Regulations 2009. I may elect to have regard to the regulation in determining whether there was a valid reason for the dismissal. [my emphasis].
[147] The parties did not address me on this issue. I do not consider it necessary for me to traverse any issues with regard to Regulation 1.07 when I have already determined in paragraph [117] that there was a valid reason for the dismissal.
Conclusion
[148] Having regard to my findings above with respect to s.387(b)–(g), I cannot find for Ms King that the dismissal was harsh, unjust or unreasonable.
[149] With regard to what I have considered pursuant to s.387(h), Ms King’s employment with Prouds was in excess of 7 years, and she had an earlier unblemished record. These are clearly relevant and significant matters in the consideration of whether the dismissal was harsh, unjust or unreasonable.
[150] If the reason for Ms King’s dismissal had been a single company policy breach, made inadvertently, I would have been inclined to the view that the dismissal was harsh. However, I have found that Ms King knowingly breached company policy in the above activities and had opportunity to address these issues with senior management and failed to do so. I am sympathetic to Prouds’ unwillingness to continue the employment after discovery of a number of significant, deliberate breaches of company policy.
[151] In those circumstances I consider, notwithstanding Ms King’s length of service, her previous unblemished work history, and the consequences of her dismissal, that Prouds was entitled to conclude that there was no basis for confidence that Ms King would comply with Prouds’ company policies in future if her employment continued. For that reason, Ms King’s dismissal cannot fairly be characterised as a disproportionate response to her conduct.
[152] The decision by Prouds to pay to Ms King four week’s payment when the termination was viewed by Prouds as constituting serious misconduct, assists with reducing some of the understandable financial concerns that Ms King would have had on termination.
[153]
Having considered each of the matters specified in s.387, I am not satisfied the dismissal of Ms King was harsh, unjust or unreasonable. Accordingly, I find that Ms King’s dismissal was not unfair. The application is therefore dismissed, I order accordingly.
COMMISSIONER
Appearances:
Mr A Williams on behalf of the Applicant
A.Barwick solicitor on behalf of the Respondent
Hearing details:
2 March 2016, Brisbane
1 PN 658
2 PN242
3 PN93
4 PN502
5 PN224
6 PN225
7 PN314
8 PN315
9 PN316
10 PN317
11 PN318
12 PN632
13 PN633
14 PN634
15 PN635
16 PN636
17 PN637
18 PN638
19 PN639
20 PN 942
21 PN 461
22 PN 462
23 PN491
24 PN492
25 PN493
26 PN494
27 PN 591
28 PN591
29 PN592
30 PN593
31 PN976
32 PN1373
33 PN 1086
34 PN416
35 Sayer v Melsteel[2011] FWAFB 7498 at [20]
36 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.
37 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373
38 Ibid
39 PN1189
40 Exhibit R3 witness statement of Barry Lowndes at [26]
41 PN 1105
42 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].
43 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
44 Previsic v Australian Quarantine Inspection Services Print Q3730.
45 (2000) 98 IR 137.
46 Ibid at 151.
47 RMIT v Asher (2010) 194 IR 1, 14-15
48 Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237
49 (2003) unreported, PR931440 at [30].
50 [2015] FWCFB 1033
51 Annetta v Ansett Australia (2000) 98 IR 233 at [9]-[10]
52 He v Lewin [2004] FCAFC 161; (2004) 137 FCR 266 at [15] per Gray and Mansfield JJ
53 Since Sharp, it has been held in Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services[2015] FWC 5264 that reg.1.07 does apply to the expression “serious misconduct” where it appears in the Small Business Fair Dismissal Code.
54 [2001] VSC 150; (2001) 107 IR 117
55 Ibid at [240]
56 Ibid at [250]-[257]
57 [2007] FCA 1903; (2007) 168 IR 375
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