Ms Mijin (Jinny) Lee v Alexandria Imex Pty Ltd T/A SES
[2020] FWC 4837
•1 OCTOBER 2020
| [2020] FWC 4837 |
| FAIR WORK COMMISSION |
| REASONS FOR DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Mijin (Jinny) Lee
v
Alexandria Imex Pty Ltd T/A SES
(U2019/12408)
| Deputy President Asbury | BRISBANE, 1 OCTOBER 2020 |
Application for an unfair dismissal remedy.
BACKGROUND
Ms Mijin (Jinny) Lee (the Applicant) applies under s. 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in respect of her dismissal by Alexandria Imex Pty Ltd T/A SES (SES/ the Respondent). The Applicant was employed by the Respondent as a Shop Manager from 30 July 2012 until her dismissal on 23 October 2019. On 14 September 2020, I issued an Order requiring that the Respondent pay the Applicant compensation on the basis that I decided that her dismissal was unfair. These are the reasons for my decision.
The Respondent owns and operates a chain of retail fashion stores. The Applicant was the Store Manager at the Respondent’s store in North Lakes. The Applicant was dismissed for serious misconduct on the basis that she had received three written warnings for contravening various policies of the Respondent, the details of which are outlined in this decision. Following her dismissal, the Respondent alleges that it uncovered an incident of theft of an item or items from its store room as well as incidents of the Applicant fraudulently creating store credits during customer returns or exchanges, and using the store credits towards personal purchases. The Respondent relies on these allegations of theft and fraud as also providing a valid reason for the Applicant’s dismissal.
The Applicant maintains that these contraventions of store policy did not amount to a valid reason for termination. Further, the Applicant maintains she is not guilty of theft or fraud and did not take any items of clothing without purchasing them or fraudulently create store credits to purchase items for herself.
The application was made within the time required in s. 394(2) of the Act. It is not in dispute that the Applicant is a person protected from unfair dismissal as defined in s.382 of the Act. The Respondent is not a small business and the dismissal was not a case of redundancy.
The matter was dealt with by way of a hearing. The Respondent sought permission to be represented by a lawyer, and permission was granted pursuant to s. 596(2)(a) of the Act on the basis that I was satisfied the matter involved issues of complexity in relation to allegations of theft and fraud and the Respondent’s Human Resources Manager did not speak English at a level which would have enabled her to adequately represent the Respondent. I was also satisfied that permitting the Respondent to be represented by a lawyer would assist with the efficient conduct of the case.
As the case developed the Respondent’s legal representative did not assist with the efficient conduct of the case and made what should have been a straightforward proceeding lengthier and more convoluted. The approach of the Respondent and its legal representative was to drip feed relevant evidence as the proceedings progressed, rather than to comply with Directions of the Commission. In particular, the Respondent’s Form F3 and witness statements referred to CCTV footage which was clearly relevant to its case. The Respondent’s witness statements and evidence it relied on was required to be filed on 19 February 2020. The Respondent initially filed a bundle of documents which included still images taken from the CCTV with a witness statement of Ms Kim. The still images were unclear and Ms Kim’s witness statement did not adequately explain their significance. The CCTV footage was not filed until 15 May 2020 and was accompanied by a second statement made by Ms Kim which again was of limited assistance in identifying what the footage was said to show.
The witness statements filed by the Respondent were also of little use in clarifying its case. A number of the statements of witnesses for the Respondent contained material that was not relevant to the matters in dispute. The statement of a witness (Mr Cony Lee) whose evidence came to be critical to the Respondent’s case did not set out that evidence in an intelligible manner, and it was only during oral evidence at the hearing, that the significance of Mr Coney Lee’s evidence was apparent. These issues prolonged the hearing unnecessarily and should not have occurred, given that the Respondent was legally represented at all times.
The Applicant was represented by her husband, Mr Lee. A Korean interpreter was provided for a number of witnesses. The Applicant gave evidence on her own behalf.[1] Evidence for the Respondent was given by:
· Ms Kayoung (Alice) Kim, Human Resources Manager;[2]
· Mr Sunwoong (Cony) Lee, Accounting Manager;
· Mr Doho (Scott) Ryu, CCT Department;[3] and
· Mr Seungjin (Steve) Ma, Former Director of the Respondent.[4]
LEGISLATION
In deciding whether a dismissal was unfair on the grounds that it was harsh, unjust or unreasonable, the Commission is required to consider the criteria in s.387 of the Act, 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 the FWC considers relevant.”
The employer bears the onus of establishing that there was a valid reason for a dismissal.[5] A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”[6] The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts,[7] and the validity is judged by reference to the Tribunal’s assessment of the factual circumstances as to what the employee is capable of doing or has done.[8]
To determine whether there was a valid reason for a dismissal relating to conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred, on the basis of the evidence before the Commission. The test is not whether the employer believed on reasonable grounds, after sufficient inquiry that the employee was guilty of the conduct.
Further, to constitute a valid reason for dismissal, the Commission must assess whether the conduct was of sufficient gravity or seriousness such as to justify dismissal as a sound, defensible or well-founded response to the conduct.[9] In finding that there was a valid reason for dismissal, the Commission is not limited to the reason relied on by the employer. Facts justifying dismissal, which existed at the time of the dismissal, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal. Facts which existed at the time of the dismissal, but came to light after the dismissal may:
· justify the dismissal when it would otherwise be harsh, unjust or unreasonable, or
· render the dismissal harsh, unjust or unreasonable.
Ultimately, the Commission is bound to determine whether, on the evidence provided, facts existed at the time of termination that justified the dismissal. The reason for the dismissal need not be that which was given by the employer. It can be any reason underpinned by the evidence provided to the Commission. If the employer seeks to rely on a reason for dismissal other than the reason given or relied upon at the time of the dismissal the employer will have to contend with the consequences of not giving the employee an opportunity to respond to such reason.
The Applicant was dismissed for a number of reasons relating to her conduct and work performance. These were set out in a letter notifying the Applicant of her dismissal. In summary, the reasons for dismissal set out in the letter were: failure to submit a daily report on 18 July 2019; using her mobile phone while at work; and sitting on a bench outside the store on 19 August 2019. Other allegations relating to taking breaks to which the Applicant was not entitled and removing items from the store were put to the Applicant before her dismissal but were not referred to in the dismissal letter. The Respondent also contends that after the dismissal, it established that the Applicant took a credit voucher from a customer and used it to purchase items for herself and made a number of fraudulent transactions. Generally, conduct of the kind alleged to have been discovered after the Applicant’s dismissal, if proven, will constitute a valid reason for dismissal. In determining whether the Applicant did engage in the conduct alleged and whether there was a valid reason for her dismissal, the standard of proof is the balance of probabilities. Given the seriousness of the allegations, the principle in Briginshaw v Briginshaw is relevant.[10]
This principle has been held to establish that whilst the standard of proof remains the balance of probabilities, the seriousness of the allegation affects the process of reaching a level of satisfaction that the conduct occurred and “should not be produced by inexact proofs, indefinite testimony, or indirect inferences’ or ‘by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion.”[11]
A more recent consideration of the principle in Briginshaw is found in the High Court Decision in Neat Holdings v Karajan[12] where it was held that statements to the effect that clear or cogent or strict proof is necessary where a question of whether a person in civil proceedings has engaged in theft or fraud is to be determined, should not be understood as directed to the standard of proof. Rather such statements should be understood as: “…merely reflecting a conventional perception that members of our society do not ordinarily engage in criminal or fraudulent conduct.”[13] The Court went on to observe that:
“When an issue falls for determination on the balance of probabilities and the determination depends on the choice between competing and mutually inconsistent allegations of fraudulent conduct, generalisations about the need for clear and cogent proof are likely to be at best unhelpful and at worst misleading. If such generalisations were to affect the proof required of the party bearing the onus of proving the issue, the issue would be determined not on the balance of probabilities but on an unbalanced standard. The most that can validly be said in such a case is that the trial judge should be conscious of the gravity of the allegations made on both sides when reaching his or her conclusion. Ultimately however it remains incumbent upon the trial judge to determine the issue by reference to the balance of probabilities.”[14]
The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:
Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;
Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or
Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.[15]
REASONS FOR DISMISSAL
The Applicant was dismissed on 23 October 2019 by letter sent to her by email from Ms Alice Kim, Human Resources Manager of the Respondent. The email attaching the termination letter is written mostly in Korean, with the following in English:
“Consequences are as follows:
1. Head office has continuously requested you to submit daily report on daily basis, but it has not been submitted on 18th July.
2. You used your mobile phone frequently during working hours for personal purposes. Especially you did not stop it even though our customer was standing in front of the counter.
3. You sat on the bench in front of the store during your working hours several times even though there were customers in the store.”
The termination letter attached to the email from Ms Kim is more akin to a form that has been completed by Ms Kim for the Respondent’s records. The letter contains a heading stating “your employment will be terminated due to:” followed by four options:
· End of season or contract
· Shortage of work or redundancy
· Misconduct
· Other
A box next to misconduct has been ticked. Under a heading entitled “Notice Period”, Ms Kim selected “sufficient notice was given by the employer.” The letter was signed by Ms Kim and contained a blank space for the Applicant to sign the letter. The reasons for dismissal are explained in Korean in Ms Kim’s email and it is common ground that the email states that the Applicant’s conduct was considered to be serious misconduct on the basis that the Applicant had received three written warnings that she had breached the Respondent’s policies as follows:
“1. A written warning dated 22 July 2019 (the First Written Warning) for failing to submit a daily report for the store on 18 July 2019.
2. A written warning dated 21 Oct 2019 (the Second Written Warning) for the alleged use of a mobile phone on 11 Aug 2019 and 25 Aug 2019 for personal purposes during working hours and in the presence of customers at the store.
3. A written warning dated 22 Oct 2019 (the Third Written Warning) for sitting down on a bench in front of the store on 19 Aug 2019.”
In its Form F3 Employer Response filed on 19 November 2020, the Respondent stated that the reasons for the Applicant’s dismissal were fraud, inappropriate behaviour that impacts work and breaching her employment contract in relation to Sunday working hours. In relation to fraud, the Respondent outlines three instances which are described as follows:
“1-1. Fraud: Credit voucher
a) At 12:55 pm, 11th August 2019, the applicant falsely refunds one of three items
purchased by the customer (credit note issued).b) After the customer left the shop around 1:08 pm, 11th August 2019, the applicant
takes the credit note and puts it in her bag.c) At 5:18pm, 14th August 2019, the applicant uses the credit note to purchase her own
clothes.d) At 5:35pm 14th August 2019, she leaves the store with the item she purchased.
1-2. Fraud: Credit voucher
a) At 12:21 pm, 11th August 2019, a customer buys 7 items.
b) At 1:02 pm, 11th August 2019, the customer comes back to ask about price for one of
purchased items.c) At 1:04 pm, 11th August 2019, the applicant falsely refunds one of the items purchased by the customer (credit note issued).
d) After the customer leaves the shop around 1:15 pm, 11th August 2019, the applicant
takes the credit note and puts it in her bag.e) At 7:28 pm, 3rd October 2019, the applicant uses the credit note to purchase her own
clothes.f) At 9:01 pm, 3rd October 2019, she leaves the store with the item she purchased.
1-3. Fraud: Stock
a) At 5:09pm, 4th August 2019, the applicant turns off the shop's (sic) light and goes out of
the storage room with some new items after her shift.b) And the applicant puts the items in the trolley placed in the fitting room and takes the
trolley out of the store.c) According to CCTV footage, the applicant takes the trolley which contains some items
during her break time, and the employer confirms that there are only her own belongings in the trolley when the applicant brings it back into the shop.d) The employer requests an explanation about why she takes out the items without any
purchase and she responds that the items were already purchased before, but she did not bring it home at that time.e) When the employer requests proof of the purchase, she does not respond.”
The allegations relating to “inappropriate behaviour at work” are also stated as including a “negligence of duties”, which is said to relate to the Applicant taking too many breaks, in addition to the reasons contained in the email of 23 October 2020 relating to a failure to submit a daily report (the first written warning), personal use of mobile phone (the second written warning) and for sitting on a bench outside of the store on 19 August 2019 (the third written warning). The Respondent also alleges the Applicant breached her contract by taking one hour paid breaks on Sundays in circumstances where the Applicant purportedly agreed to work a 7.5 hour shift on Sunday without a break.
The Applicant submitted that the allegations relating to fraud associated with credit vouchers, excessive works breaks and the taking of an unauthorised hour long break on Sundays were never put to her prior to her termination and have only been raised in the Respondent’s response to her unfair dismissal application. Further, the Applicant states the allegations of theft or fraud were only put to her on 14 November 2019 after the Applicant had filed her unfair dismissal application.
EVIDENCE
Failure to submit daily report
The Applicant was issued with a written warning in a letter dated 22 July 2019 for failing to submit a daily report to the Respondent’s Head Office on 18 July 2019. The letter is signed by Ms Kim and states as follows:
“Dear Mijin Lee,
Warning letter
I am writing to you about your recent performance at Northlakes store during your employment with Alexandria Imex Pty Ltd. (the employer).
This warning letter is reported based on the point that makes us suggest you show no improvement on daily duty. Even though Head office has continuously requested you to submit daily(cleaning) report on daily basis, it has not been submitted on 18th July. Since it is important for Head Office to collect your daily work and evaluate your performance with the daily report, you are obligated to send the report every day.”
The letter concludes by stating that if the Applicant wished to respond to this formal warning letter she should do so by contacting Ms Kim by telephone or by replying in writing.
Ms Kim clarified in her evidence during cross examination that there were three reports the Applicant was required to submit each day; a best ranking report, a daily report and a cleaning report.[16]
Ms Kim’s evidence is that she often notifies employees of the importance of completing daily duties (daily report) and that a possibility of not completing a report is the issuing of a written warning. Ms Kim stated that as the Applicant had been employed for more than seven years she was quite sure the Applicant knew better than anyone how important it was to send completed daily reports before she closed the shop for that day.
The Respondent tendered an email sent by Ms Kim dated 27 September 2019 to its stores, that stated:
“Hi, all.
I am writing again to remind you of the basic tasks.
A few days ago, we inspected one of our shops without prior notice and discovered that they were not carrying out some of their daily duties such as cleaning their shops and reorganising the racks, etc. A warning letter has been issued to the staff who was responsible of the store on that day.May I remind you that the head office checks your daily reports very thoroughly every day. Please ensure that you do not forget to carry out any of the basic tasks as we will continuously inspect our stores without giving them notice in advance.
Please also ensure that all aspects of the store are clean at all times, not to mention the store floor.
A formal warning letter will be issued to those who continuously refuse to do this basic duty despite our multiple notice to the stores.
We would also like to remind you that, under our company policy, if you received a warning letter 3 times or more, we reserve the right to terminate your contract immediately.
We thanks for your cooperation.
Best regards,
Alice”
The Applicant said that she missed part of the report on 18 July 2019, but that this was caused by other employees of the Respondent, and that the only thing missing from the report was a photo showing the shop had been cleaned. In relation to her failure to submit a complete daily report, the Applicant had the following exchange with the Respondent’s representative:
“MR CHEON: You say on 18 July you were prevented from submitting the report, and you're being asked what prevented you from submitting the report. Was it a technological problem? What did the other employees do that stopped you from submitting the report? ---- Usually we shared the report before we closing, two or three people, and for the cleaning, it was not my part of it, and I'm doing the sales report to the, yes, accounting and then - what else - I don't remember now. Anyway, some of the, like, money report I doing, and the second step I doing the cleaning the floor and cleaning the changing room, and they take a picture and send it to the head office, and was missing that part, the take a picture of changing room - we missing that part. Do you understand, Mr Cheon?
MR CHEON: Yes, but I'm still not understanding how that's preventing you from submitting the report. But yes, I think - yes, it has been answered, if not sufficiently? ---- That night the other second member was the first day of the closing. That's why missed the one part of the report. So yes, I've already spoken with Alice I can't accept this warning letter, but she told me: sorry, Mr Ma doing it; Mr Ma wants you to keep the warning letter. Okay - - -
Ms Lee, no, that's not my question. What I'm asking is how did the employees prevent you from submitting the reports? Was it from physical - some illegal physical altercation, or was it a computer problem, a technical issue? ---- No, there was no issue.”
The Applicant’s evidence was also that the Respondent’s HR did not ask her to resubmit the report to include the missing part. The Applicant also asserted that there were other staff who did not submit the daily report in September 2019 and that these staff were not given a written warning for failing to do so. In this regard the Applicant said she was aware of an email sent by the Respondent’s HR to another employee which merely informed the employee to be more careful next time. In response to a question from me about how the Applicant knew that other store managers who failed to submit a complete daily report were not disciplined, the Applicant said as follows:
“THE DEPUTY PRESIDENT: How do you know that those store managers didn't get a warning for not submitting the report, Ms Lee? ---- Because (indistinct) this manager told me they have got a like a warning, this email, and they send the email right away and then they didn't get a warning letter, and then my store staff, who is a Kayong Kim(?) as well, she didn't get a warning letter; she got one more chance to submit daily report.”[17]
Ms Kim stated that she did not issue a written warning to another store manager the Applicant referred to, because that manager had mistakenly attached a wrong photo, and resubmitted the report upon realising the error.[18] It was also put to Ms Kim in cross examination, that the Applicant’s understanding was that the submitting of these daily reports was not only the responsibility of the Store manager, but also other staff. Ms Kim’s evidence in relation to this is as follows:
“It is my understanding that submitting the several daily report to head office was not only the store manager's duty, but also other staff. Do you agree with that? ---- When we finish or close the shop there are so many things to do, but on that particular day the person in charge of cleaning was Mijin, that's what I know.
Ms Kim, I repeat my question again. It is my understanding, it is the applicant's understanding that submitting the several daily reports we just mentioned before to head office was not only this store manager's duty, but also the other staff. Do you agree with that? ---- My understanding is anyone who in charge is responsible for the report, and I am not sure what you are really are pointing out, but I believe that it's not fair that anyone's duty of (indistinct), not doing his duty should receive all staff member warning all together. I don't think that is fair.”[19]
The Applicant also asserted that the first time she became aware that failing to submit a complete daily report would result in a written warning was when the Respondent’s HR sent an email to all staff regarding the importance of the daily report on 26 July 2019, which was after the Applicant had received her written warning.
Unauthorised mobile phone usage during working hours
The Applicant was issued with her second written warning on 21 October 2019. The letter containing this written warning stated as follows:
“Dear Mijin,
I am writing to you about your recent unsuccessful performance at North lakes store during your employment with Alexandria Imex Pty Ltd. (the employer).
This warning letter is issued based on the point which make us further suggest you show an improvement on attitude at work. We have noticed that you used your mobile phone (personal purposes) at the counter during your working hours several times. (Including 11 Aug and 25 Aug 2019).
Especially, you did not stop it even though our customer was standing in front of the counter. I would like to remind you that the use of cell phone during working hours is strictly prohibited.”
The letter again concluded by inviting the Applicant to contact Ms Kim by telephone or in writing if she wished to respond to the formal warning letter. Ms Kim also tendered an email she sent to the Applicant on 11 October 2019 in relation to the use of her mobile phone. This email was translated to English by the Respondent and reads as follows:
“Hi Mijin,
This is Alice.4. Frequent mobile phone use
Despite our several notice to you that it is our strict company policy that we prohibit employees from using mobile phones for personal use during their shifts, we discovered that you have continuously used your mobile phone for personal use (such as Instagram and Kakao talk messenger) against our company policy.In particular, there were many cases where you continued to use your phone even when customers were right in front of you.”
Ms Kim also tendered an email received from the Applicant the same day in response, which stated:
“Hi Alice,
This is Mijin from ML store.
4. Frequent use of the mobile phone
I often had to use/look at my phone for the purpose of checking group chat messages from other store staffs and receiving orders from customers. I note that this is because our order number is relatively higher than other stores and I use my phone as my personal note. I apologise and I will not use my mobile phone during my shift again.”
The Applicant stated she would use her mobile phone to assist her in performing various duties as Store Manager, as follows:
· taking photos of inventory (i.e. articles of clothing);
· liaising with customers to assist them in placing orders (including by sharing
photos) or placing items on layby for collection at a later date;
· reading resumes and cover letters of prospective employees for the store;
· making rostering arrangements for the store and liaising with staff as to availability;
· preparation of the daily report; and
· any ancillary tasks associated with the above tasks.[20]
The Applicant also tendered screenshots of text messages of her mobile phone showing that she used her own mobile phone to communicate with customers about their orders.
The Respondent tendered screenshots of CCTV footage of two incidents on 11 August 2019 and 25 August 2019 which it asserts show the Applicant using her mobile phone for reasons not related to her duties as store manager. Ms Kim stated the CCTV footage shows the Applicant “most likely” browsing Instagram or another social media application on both 11 and 25 August 2019. Mr Ryu said that he conducted CCTV monitoring on 9 October 2019 and reported that the Applicant used her mobile telephone several times during working hours for personal purposes involving Instagram, shopping and gaming activities. Mr Ryu referred to still images from CCTV footage said to show such activities. While the images show the Applicant looking at the screen of her mobile telephone while in the store, including while she was standing at the cash register with customers apparently standing in front of her, it is not clear from the images what was on the screen of the Applicant’s phone. The dates on which the footage was taken are also not evident other than on two occasions where the footage is stamped 25/08/2019 and 04/08/2019 respectively.
At the hearing, the Applicant gave evidence that Mr Ma had asked her to use Instagram because other stores the Respondent competed with were also using Instagram. I had the following exchange with the Applicant in relation to the use of her mobile phone during working hours:
“THE DEPUTY PRESIDENT: Well it's up to you. Whatever evidence you want to put in you should have put in, Ms Lee. If you want to put - what extra evidence do you say you have about your mobile phone usage? ---- Ms Tomar ask me using the Instagram, because these days they do other competitive (indistinct) store. They're using Instagram very much. But what the matter is, when you open the Instagram and many - how can - many new videos(?) comes around, and then they just take a picture and I can use the Insta when I'm working, and I don't think - it's not fair. What else? And - - -
So why were you using Instagram at work? ----- I check like a (indistinct) Instagram.
Right? ---- So others - some of the store, they are very similar product to what we sell.
Right? ---- Yes, and we can check, and then Ms Tomar allow me to do it - told me to do it. So I always checking, and I always checking what other stores say going on, what the promotion is going on, so I can report them. So maybe why don't we do this, do this, do this.
Okay. ---- So you say if you were looking at Instagram during working hours, you were doing it to see what other competitors were doing to see if you should match their specials or discounts or you were being competitive with the same kind of clothing? Yes.
Okay? ---- And then - the mobile, if they don't want me to use my personal phone why they - but there's so many things to do with my personal phone, my customer data, like in the morning I have to take all the pictures from first the ranking number 1 to 20, and take a picture and do the Photoshop with my phone - - -
Sorry, take a picture of what? ---- A picture of the first ranking item.
Okay, yes? ---- That scores the most. So I had to take a picture, the location, and I have to Photoshop, add it the photo. I have to put on the number 1, 2, 3, and early in the morning by - yes, but I work alone until 12, so yes, it was very busy. And sometimes they asking me to make a report why the sale is not good in this week, and what you can do - to do in this week, and they're all sending the email and (indistinct) - to send it to my customer email. I have to check my phone very often and frequently. We had like - how can I say - like a (indistinct) Messenger, but it's like WhatsApp.
Yes? ---- So we made a group message - group message I think, all the area manager and head office manager. We did - yes, the group message. So I have to check, yes, and last time I told them I use so much my personal phone when I'm working, and they said the manager is okay, but the others that they are not allowed to have the phone if they are working.
So you say that every morning when you came to work you had to take photographs of the 20 best selling items? ---- Yes.
And rank them? ---- Yes.
And send them to head office using your own phone? ---- Yes.
And your own data? ---- Yes.”[21]
The Applicant also stated that she was included in a WhatsApp group with other Store Managers of the Respondent which was used to discuss what was selling well in store and what was not selling. Further, the Applicant said that the Respondent would communicate with the Applicant on her personal mobile phone.
Sitting on a bench outside the store during working hours
Mr Ryu tendered stills taken from CCTV footage which depict a figure sitting on a seat. It is not apparent that the figure is the Applicant. The footage is date stamped 19/08/2019 at 11:54:35 and 11/08/2019 at 9:24:29. The Applicant was issued with her third written warning on 22 October 2019. The letter containing the written warning reads as follows:
“Dear Mijin,
I am writing to you about your recent unsuccessful performance at North lakes store during your employment with Alexandria Imex Pty Ltd. (the employer).
This warning letter is issued based on the point which make us further suggest you show an improvement on attitude at work. We have noticed that you sat on the bench in front of the store during your working hours several times (Including 19 Aug 2019) even though there were customers in the store. This kind of behavior (sic) during your working hours is a misconduct and will result in a formal warning letter being sent.”
The Applicant accepts that she sat on a bench in front of the store on 19 August 2019 but says she did so due to a medical condition which causes low haemoglobin levels. This causes the Applicant to feel dizzy or disorientated after standing for long periods of time. The Applicant also stated that she was sitting on the bench while taking a rest break of ten minutes.
Ms Kim stated that she emailed the Applicant on 11 October 2019 raising this issue, and the Applicant responded stating she was sitting outside of the store before opening hours and was thinking about the store display in the front window. It was submitted by the Respondent that the two explanations provided by the Applicant were inconsistent.
Sunday working hours and excessive breaks
The Respondent asserts the Applicant’s contract of employment required her to work 7.5 hours on Sundays, and it became aware that the Applicant was only working 6.5 hours because she was taking an hour long lunch break. The Respondent also asserted the Applicant was taking too many breaks, including breaks being taken right after the Applicant had opened the store. Ms Kim states she sent an email to the Applicant raising these concerns on 11 October 2019 which translated into English, reads as follows:
“Hi Mijin,
This is Alice.
Dear Manager Mijin Lee,
I am writing to inform you that we received a report regarding your performance during your Sunday shifts and accordingly, commenced an internal investigation via CCTV record check.
Based on our investigation, it has been found that you breached several employee obligations specified under your employment contract. Examples include your incompliance (sic) with the agreed no break time for Sunday shifts of 7.5 hours, questionable work attitude, etc.Below is our detailed findings of your performance. If you have any question or wish to discuss in relation to any matter raised during this investigation, please feel free to contact me at any time.
3. Unsatisfactory performance and dereliction of your duties
We were able to confirm that you had 10-minute breaks right after opening the shop on several days of your shifts. You also left the shop unattended for no reason while the customer was in the shop. We view this as serious dereliction and unsatisfactory performance of your duties as an employee and manager of our company.”
The Applicant responded to this email stating that the previous HR Manager named “Rael” had said she could have a paid hour lunch break on Sunday, as did the HR Manager (Ms Somi Kim) who took over from “Rael” when the Applicant renewed her contract with the Respondent.
The Applicant tendered a copy of an employment contract dated 5 June 2019 which stated it was an amended contract of employment which took effect from 10 June 2019. In relation to the Applicant’s ordinary hours of work, the contract stated as follows:
“2. Ordinary hours of work
2.1 Your ordinary hours of work will be as follows:
Sunday (7.5 hours) to Thursday
Total of 40 hours per weekPlus, any additional hours that are necessary to fulfil your duties.”
The Applicant states she was issued this new contract in June 2019 for 40 ordinary hours per week as she believed this was to match the payslips she was being issued, but that the staff rosters during this period continued to indicate that the Applicant was rostered for 39 hours a week and not 40 hours.
Ms Kim’s evidence is that the Applicant was not recording the fact she was taking an hour long break on her timesheet using the “Deputy – Punch in & out software”, and that this showed the Applicant was claiming she had worked a total of 7.5 hours on a Sunday while concealing the fact that she had taken an hour long break. Ms Kim also referred to emails received from Ms Somi Kim and “Rael” responding to questions from Ms Kim about the Applicant being permitted to take an hour long break, where both Ms Somi Kim and “Rael” had denied authorising the Applicant to take an hour long paid lunch break.
Ms Kim also said that the issue with the break is that it was paid and the Applicant recorded on her time sheet that she had worked for 7.5 hours with no break when in fact she had worked for 6.5 hours with a one hour paid break. The Applicant stated she was told that she could take the break, but did not have to report it and did not dispute that she had submitted time sheets which stated she worked for 7.5 hours when this was not the case, and the Applicant had taken a one hour paid break. The Respondent also tendered CCTV footage which it contended showed that the Applicant was taking excessive breaks outside of the store.
In relation to the allegations that she took excessive breaks, the Applicant stated that these allegations were based on footage showing the Applicant outside the front of the store and that she was often outside of the store premises for reasons such as:
· Purchasing stationery items for the store (e.g. cleaning equipment, balloons,
· promotional items and wipes);
· Ordering stock, sending emails to the Respondent’s warehouse;
· Checking mannequins and replacing clothes on them;
· Checking the retail promotions of other competitor stores in the shopping centre;
· Liaising with the shopping centre’s concierge desk (e.g. to find out about events, maintenance schedules, lost property and center management issues);
· Use the bathroom; and
· Making various calls with head office to discuss staffing issues, store maintenance requirements etc.
Allegations of theft and fraud
The Respondent asserts that following the Applicant’s dismissal it became aware of incidents that it alleges amount to theft and fraud when Mr Ryu conducted reviews of CCTV footage that is collected from the store. Mr Ryu is responsible for reviewing CCTV footage from the Respondent’s stores. The Respondent tendered a volume of CCTV footage relating to the alleged incidents of theft and fraud as evidence of the alleged conduct.
Mr Ryu’s evidence is that his review of the CCTV footage from the Respondent’s stores is not taken at the time the footage is filmed as he is based in the Respondent’s New South Wales Office, and CCTV from Queensland is collected on discs every month or two months.[22] Mr Ryu said that he reviews the footage periodically depending on when it is collected.
In his written statement, Mr Ryu stated that on 11 October 2019 he reviewed the store’s CCTV footage and reported that on 4 August 2019, the Applicant had removed store items out of the storage room and had left the store with those items after the Applicant had closed the store for the day. CCTV footage of the storage room tendered by Ms Kim was viewed during the hearing. The footage shows the Applicant bringing a shopping trolley into the store and placing it just outside the storage room of the store at around 2.52pm on 4 August 2019. The Applicant then enters the storage room and places a take-away food container on a shelf. The Applicant stated that the shopping trolley contained groceries that she had purchased.[23] The footage then shows the Applicant returning to the store-room at around 4.59pm, turning off the lights, and removing an item from a shelf. The Respondent asserted that the item was goods belonging to the store. The item in question appears to be a small black parcel.
Ms Kim tendered an email sent to the Applicant dated 11 October 2020. The email is written in Korean and includes screenshots of the CCTV footage showing the Applicant removing the parcel, placing it into her trolley and leaving the store. The parties agreed that the email said that it appeared that Ms Lee took two items from the storage room on 4 August 2020 after turning off the store lights and closing the shop for the day. The email went on to state that the Respondent was unable to confirm that the Applicant purchased any items based on records of the subject date and the leadup to it and it is asserted that the Applicant did not purchase the items she took with her on that date.[24]
Ms Lee replied to Ms Kim’s email in Korean. Ms Lee, through the assistance of the translator, stated that her email in response said:
“One thing that I can assure you is that I have not taken anything from the (indistinct). By the looks of it you might have sufficient. However, it could be I took unpacked one and throw there without taking it, or it could have been my item that I already purchased. It could be one of those.
It's been only two weeks and there are many clothes which belongs to me that I already can show with a receipt. Today is holiday. You can come anytime and have a look at my items hanging over there with the receipt.
…
I apologise I have not taken it after having purchased it and paid it.”[25]
The translation provided by the Respondent of the Applicant’s response states that the Applicant said that she understands that the CCTV footage can raise the suspicion that the Respondent has but that she had probably taken the items because they were clothes that she had purchased or because she had to drop them off at the unpacking storage container on her way out. Ms Kim’s response on 18 October was to state that the response raised more suspicion because the Applicant:
took the items from the storage room after she turned off the lights;
took the items without checking the labels;
did not place the items in the unpacking container; and
put the items in her trolley instead.
Ms Kim’s email of 18 October goes on to state that even if it assumed that the Applicant purchased the items she took, it is difficult to understand why she left them in the store where they could be mixed up with the Respondent’s stock and accidentally sold by other staff. The last line of Ms Kim’s email asks the Applicant for details of the items that were purchased. In relation to what the Applicant told Ms Kim in response, I had the following exchange with the Applicant:
“THE DEPUTY PRESIDENT: Right. So did you ever answer and say what was taken, Ms Lee? ---- It was the same question on page 488, and I was pretty upset too, because I keep saying that I didn't take any, and they keep saying that it looks like you've got it - it looks like you took it. Okay, and so I didn't reply email because I needed some break I guess, and then - yes, I didn't have time to reply, because the 21st and the 22nd and the 23rd I terminated.
So basically - you can agree or disagree with this - but in that video footage, you look like you know exactly what you're taking. You're going to a very precise point, sorting through some packages and you're taking a particular item out? ---- Yes. I guess that means that is been lost(?) me.”[26]
Further, in relation to Applicant’s response to the allegation, I had the following exchange with the Applicant:
“THE DEPUTY PRESIDENT: Okay. So Ms Lee, you apologised and said I'll make sure next time I buy something I'll take it straightaway and that's my explanation? --- Yes.”
By this comment the Applicant meant that she was apologising for leaving an item that she had purchased at an earlier time in the store, and not taking it out of the store at the time it was purchased. The Applicant also said that she could not specifically recall what the item was that she had purchased and then taken from the store as she was being asked about the event three months after it had occurred.[27] At the hearing, the Respondent’s representative said that the Respondent took issue with the Applicant’s conduct on the basis that most employees who had purchased items from the store immediately took the item and that it was irregular for an employee to make a purchase and not collect it for several days as there was a risk it could be mixed up with stock belonging to the store.[28]
The Respondent’s representative accepted propositions from me that there was no policy in place that employees could not process their own purchases or that employees purchasing goods from the store must remove it that day.[29] The Respondent’s representative also asserted that the purchase could not accounted for, and that if Ms Lee had purchased items on that day then she could have provided the transaction as proof.[30] In relation to how the Respondent knew that two items were taken, I had the following exchange with the Respondent’s representative:
“THE DEPUTY PRESIDENT: Well, why do you say there were two items taken?
MR CHEON: It was just an educated guess, just looking at what she took, the thickness of the parcel that she was holding.
THE DEPUTY PRESIDENT: Right. So you've got no proof that two items were missing from the stock in the shop and were not paid for?
MR CHEON: Yes. It is just two items that we're assuming, but definitely that items were taken from the stock.
THE DEPUTY PRESIDENT: Okay. So that's the applicant's answer, all right - that she asserts that she must have paid for it previously, and you've got no evidence to put to her that she didn't. So we'll move on, shall we?”[31]
The Respondent did not advance any reason as to why this allegation was not referred to in Ms Kim’s email of 23 October when the Applicant was dismissed, given the exchange of emails about the incident had occurred prior to this time.
Mr Ryu gave evidence that on 12 November 2019 he reviewed CCTV footage from the store and identified two incidents where that the Applicant issued an unnecessary store credit note while processing a customer refund, and then used that credit note towards personal purchases. The first incident is alleged to have occurred at approximately 12.45 pm on 14 August 2019. Ms Kim’s evidence is that the footage shows the Applicant assisting a customer who appears to claim that he has been overcharged. The Applicant can be seen issuing a document which the Respondent claims is a credit note and placing the credit note in front of the monitor on the counter. The Applicant then opens the cash register and hands the customer cash, and the customer leaves. The Applicant then takes the credit note and places it into her handbag.
Ms Kim stated that CCTV footage then shows that on 14 August 2020 at around 5.05pm, the Applicant retrieves the credit note from her handbag. Ms Kim alleged that the Applicant then can then be seen processing a sale for herself for two pairs of pants. According to Ms Kim the CCTV footage shows the Applicant with the credit note in her hand using the EFTPOS machine to complete the purchase, and then placing the purchase in a plastic bag which she leaves the store with shortly after.
The second incident is alleged to have occurred at 12.48 pm on 11 August 2020. Ms Kim again refers to CCTV footage showing a male customer returning to the store with items purchased earlier that day and appearing to challenge the price charged for the item. The Applicant can be seen on the CCTV footage opening the cash register and handing over at least one $5.00 note to the customer and marking the customer’s receipt. The Applicant then prints out a document that is alleged to be a credit note and places it under the monitor.
The footage then shows the Applicant a few minutes later, removing a document, said to be the credit note and holding it in her hand. Ms Kim stated that the Applicant also places this credit note into her handbag in a similar fashion as referred to in the first incident. It is then alleged that the credit note from the second incident on 11 August 2019 is identified as being used for a personal purchase by Ms Lee on 3 October 2020. In response to a question from me, Ms Kim agreed that it is Company policy that employees do not complete their own purchases. Ms Kim said that this was not raised as an issue with the Applicant because the Company was more concerned about the Applicant’s conduct with respect to the credit vouchers. In response to a proposition that the Applicant did not apply a staff discount to the purchases she made using the credit vouchers, Ms Kim said that staff discount only applies to full priced items and that the items the Applicant purchased using the credit vouchers were already discounted.
In his statement to the Commission, Mr Cony Lee said that he identified these transactions on 11 October 2020 and tracked the tax invoice created to show that the credit notes that Ms Lee had created while processing customer refunds had been used towards the balance of purchases made by Ms Lee on her own behalf. In relation to the first incident, Mr Cony Lee’s evidence is that the Respondent’s records show that a credit note was generated for $9.98, which was the amount of one of the three items purchased by the customer, the total of which was $30.00. When a store credit is generated, the item it is created for is processed as being returned in the system. However, Mr Cony Lee said that the Applicant can be seen giving the customer all three items from the transaction, as well as giving the customer what he believed to be around $3.00 in cash. Further, Mr Cony Lee said that if the customer had wanted to return an item, this should have been processed onto the customer’s credit card as this was how the purchase was made.[32]
In relation to the second incident on 11 August 2019, Mr Cony Lee provided the following explanation of what the CCTV footage showed with references to the receipt and the credit note created by the Applicant. Mr Cony Lee said that a customer purchased seven items and paid a total of $133.10. Those items included a black cardigan priced at $23.39. The original receipt for the items was tendered by the Respondent in a bundle of documents. The CCTV footage shows the customer returning to the store and taking the black cardigan out of a bag and having a discussion with the Applicant while holding a piece of paper which Mr Cony Lee said is a receipt for the seven items. The Applicant is shown to hand at least one $5.00 note to the customer and to write something on the receipt and also give that to the customer. The Applicant is then shown creating a document said to be a store credit which the Respondent alleges was for the amount of $23.39 representing the full price for the cardigan. Further, the CCTV footage shows that the customer puts the cardigan back into the bag and leaves the store with it.[33]
Mr Cony Lee tendered a credit voucher for the amount of $23.39 issued by the Applicant on 11 August 2019 and numbered YNXGXY2S. Mr Cony Lee also tendered a tax invoice establishing that on 3 October 2019, the Applicant used the credit note numbered YNXGXY2S to purchase a striped shirt dress priced at $25.99. Mr Coney Lee said that the Applicant did not pay the difference of $2.60 in cash but that this was not the major issue. Mr Cony Lee said that the Respondent’s system would show that the cardigan was returned and the credit note given and the till would balance if the Applicant put the amount of the refund she gave the customer into the till from her own funds.
Mr Cony Lee said that this amounts to the Applicant giving the items away for free, as the items are processed as being returned but are actually taken by the customer and a credit voucher for the full amount of the item is issued. Mr Lee also stated that the Applicant adjusting the receipt by hand to reflect the change in price, instead of reissuing the receipt, would also result in an invalid receipt. Further, this meant that from the customer’s perspective they had purchased the item, when the item had actually been processed as returned to generate a credit note.[34]
In relation to why the register would balance if the Applicant was giving cash out for an item where a customer was overcharged, as well as issuing a store credit for the item for the amount charged to the customer, I had the following exchange with Mr Cony Lee:
“So why would the till not be short by $23.39 and probably $28.39 because if the customer got $5.00? --- Yes.
And the credit note is $28.00 - $23.39 - wouldn't that be $28.39 that the till would be short? --- No. The till wouldn't be short.
Why? ---- The till just - the till just wouldn't be - the till wouldn't be short. On the till would it be short $5.00 when Mijin takes it out a $5.00 to the customer.
Right? ---- Still missing $5.00. But as soon as she take out $5.00 notes into the till money that evens it out. You understand that? Because if she - - -
No, I don't? - - - take out $5.00 from her pocket and refills - tops it off or whatever she (indistinct).
I see. Yes? Yes. But then - - -
But the $23.39 credit note is the - - -? --- Credit note - yes.
- - -system thinks the cardigan is being returned? --- Cardigan has been returned, yes.
And it hasn't you say? And the credit note would balance out the cardigan? --- Yes, it would balance it out.
As being returned? --- Yes.
Yes, I understand what you're saying. Yes? --- Exactly. So she still takes another advantages of using - issuing this credit notes - even though she takes out all the money and fills up onto till money. So in the end, in the end the settlement amount is even. So we have no suspicious of ours that she used it herself or issued a credit note and she use it for herself because it's - - -
So the significant point we should be looking at and Mr Cheon, you didn't alert me to this yesterday, when we were watching the footage which would have been helpful. So the significant point we're looking at, Mr Lee, you say is the fact that when the credit note is issued the item is not returned? --- That's correct.
Right? --- Item hasn't returned.
I understand? --- Because of inventory system tells it - it shows the return but in reality it's missing because she just gave it to the customer.
And that wouldn't be noticed and the till would balance out? --- They all balance out at the end.
Because the credit note would balance the return item and so - - -? --- That's correct.[35]
The Applicant gave her evidence before Mr Cony Lee and as previously noted, his witness statement did not put her on notice of the precise allegations he was making. The Applicant said that often customers wanted cash refunds for an amount they had been overcharged, because an item they had purchased was discounted and the discount was incorrectly not applied. In order to process a cash refund Ms Lee needed a confirmation number that she could not obtain on Saturday or Sunday. In order to avoid conflict with a customer wanting a cash refund, Ms Lee said that would create a store credit for the amount, keep the credit note and then give the customer cash out of the cash register which she would make up out of her own pocket.[36]
I had the following exchange with Ms Lee in relation to issuing the store credits:
“THE DEPUTY PRESIDENT: Thank you. So essentially what you're say, Ms Lee, is that what you were doing is giving the customer your own cash, and you were taking the credit note? --- Yes. So I thought that it's even, and then they are happy and maybe I can use the store credit later, because I have to put my money on the till.
Did you take the money out of the till and give it back to the customer? --- Yes.
And then put your money in later, is that what you're saying you did? --- Yes, and if you see the CCTV or the pictures, and next to me there is my assistant manager, who is a (indistinct) like a store manager, they know this is procedure, because we discussed before we do that, because - yes, there's no way on the weekend we can escape from this hard situation. It's really difficult to, yes, deal with the refund to customers. They want a refund, but we can't, so - and there is nowhere to call, a contact, and the customer cannot wait. So they're just yelling and - yes, so - okay, so you make a credit note and I'm going to keep my money, and maybe I can use this credit note when I need a purchase later, and it's only $10 and I don't want to (indistinct) - yes, the situation. And our - I think every company do the same. Our company was very, extremely sensitive, especially about the money. So if it is over the plus/minus $5 then you have to put it back, or unless you are going to have a warning letter. We all signed if something happen with the money issue and we are going to get the warning letter. We all signed. So nobody wants to get the warning letter, because if you have three warning letters then you are going to termination right away. So I haven't attached evidence, all of my Messenger, even my (indistinct), and they send and task me, because I'm store manager, and there was a short money discrepancy and they just took back their money back. So we did - yes, we did, and we thought it was something, a short money discrepancy that is our fault; that's what we did, but it's getting like $20, sometimes $50, so we share all the money to put it back to the till. So yes, I don't know - yes, that's what I explain for the credit note. So I didn't - that is something bad thing. I didn't realise that, because I think I can make the customer happy and we can use the credit notes later, and there is no manager, yes, help us.”[37]
After Mr Cony Lee gave his evidence, I allowed the Applicant to respond, after warning of the issues associated with self-incrimination and directing the translator to translate that warning for the benefit of the Applicant.[38] The Applicant was also granted an adjournment before responding to Mr Cony Lee’s evidence, to consider the provisional view that I put to her that the CCTV footage appears to show that the Applicant refunded at least $5.00 in cash to a customer as a refund on an item (a cardigan) that cost $23.39. The Applicant then issued a credit note for $23.39 which she retained and used to later purchase an item. The customer left with the item as evidenced by the CCTV footage which shows the Applicant handing the customer a black cardigan which he places into a bag and leaves the store.
The Applicant maintained the position that she needed to give the customer a refund immediately to prevent the customer being angry, and could not do so on a weekend. The Applicant also maintained that she had topped up the till from her own money and had otherwise done nothing wrong in relation to the credit note.
In cross-examination the proposition was put to Mr Cony Lee that the Applicant did not understand how to create a credit note for an amount that was less than the full price of an item – in this case the $5.00 that she gave to the customer. Mr Cony Lee maintained that the problem was that the Applicant issued the credit note the item should have stayed in the store. Mr Cony Lee also maintained that even if the customer was not happy, the Applicant should have proceeded to follow the procedure in relation to a return. In this regard the Applicant could have issued a credit note for the value of the difference in price – ie. $5.00 – or could have issued a full refund for the item and allowed the customer to repurchase the item at the lower price. It was also put to Mr Cony Lee that the Applicant gave the customer the $5.00 refund and wrote a credit note for the item and put sufficient money back into the till to cover the credit note and the refunded amount. Mr Cony Lee said that this would cause the till to be over and on all relevant dates the till was either under or even. Mr Cony Lee also said that there was still a problem in that the system recorded the item as being returned on the basis that a credit note for the full amount was issued, when the item had not been returned.
Further, Mr Cony Lee said that even if the customer was not happy, the Applicant should have followed the proper procedure for the return of an item and not issued cash from the till when the item had been purchased with a credit card. Mr Lee also maintained that the Applicant had been employed for a sufficient period of time to understand the correct procedures for dealing with this matter. Mr Cony Lee was also cross-examined about a shortage in the till on the day prior to the issuing of the credit note and maintained that this had not had any impact. Mr Cony Lee also maintained that even if the Applicant put the full amount of the cash refund to the customer and the residual value of the credit note into the till, there would still be issues. Firstly, the refund should not have been given in cash when the payment method was credit card. Secondly, the receipt the Applicant gave the customer following the transaction was not valid as it had been altered by hand and could not be verified if the customer came back for a further refund. Thirdly, Mr Lee said that even if the Applicant topped up the till, there was no way of knowing that she had done so. Finally, Mr Cony Lee maintained that even if what the Applicant did was not theft, it was suspicious and the Respondent was entitled to view the conduct accordingly.
Mr Ma’s evidence was that in 2017 he attended a training course at which the Applicant was present. After the training Mr Ma states that he had a conversation with the Applicant and asked her whether it was true that she had worked less hours than recorded and had created “fake” vouchers and used them to purchase items in the store where she was working. According to Mr Ma, the Applicant “looked elsewhere” and did not respond. After considering that the Applicant was pregnant at the time, and not wanting to put stress on her, Mr Ma states that he told her that if she promised that this would never happen again, he would not consider the issue again and would let it pass. According to Mr Ma, the Applicant nodded her head and said: “thank you boss”.
Under cross-examination, Mr Ma said that he had not issued a warning letter at the time because the Applicant was pregnant and he did not think he could take such action against a pregnant woman. Mr Ma also said that he decided to ask the Applicant the two questions in the way that he did. In response to a question about why the credit note issues were not raised with the Applicant prior to her dismissal, Mr Ma said that when Ms Kim found the fake vouchers she talked to the Applicant but the Applicant denied wrongdoing. The Respondent then had its CCTV monitoring person look at footage and found the incidents one by one.
CONSIDERATION
Was there a valid reason for dismissal – s. 387(a)
The Respondent bears the onus of establishing that there was a valid reason for the dismissal of the Applicant. The Applicant bears the onus of showing that her dismissal was unfair. In considering whether there is a valid reason for dismissal, the Commission is not restricted to the reason relied on by the Respondent and can find that there was a valid reason for dismissal based on any reason underpinned by evidence. In my view, the conduct that was the subject of the three warnings the Applicant received was not, in substance, sufficiently serious constitute a valid reason for dismissal.
The Applicant provided responses to the matters set out in the letter advising of her dismissal. The allegation in relation to the failure to provide a report was in substance a failure to attach a photograph to a report to establish whether certain areas of the store had been cleaned. I do not accept that this matter, either individually or in conjunction with the other matters set out in the dismissal letter was a valid reason for dismissal of the Applicant. I also do not accept that the Applicant’s use of her mobile telephone while at work was a valid reason for dismissal either individually, or in conjunction with the matters raised in the dismissal letter.
The Applicant provided evidence, which I accept, that she used her mobile telephone to contact customers in relation to items they had ordered. Further, the Applicant’s evidence that she used her mobile telephone to contact staff was not disputed and nor was her evidence that the Respondent sent her emails on her private phone which were work related, and communicated with her via a group chat in relation to work matters. The Applicant also gave evidence of using her mobile telephone to conduct activities for the Respondent such as photographing and reporting popular selling items. The cleaning report which the Respondent claims the Applicant did not lodge was also required to be done on the Applicant’s mobile telephone. Further, the Applicant said that Mr Ma instructed her to look at what competitors were posting on Instagram. Mr Ma gave evidence after the Applicant and did not contradict her evidence. In any event, even if the Applicant was using her phone during working hours for non-work related matters, this was conduct about which she should have been warned and which did not justify dismissal.
The evidence about the Applicant sitting outside the store on a seat did not establish that this conduct occurred or was repeated such that it would constitute a valid reason for dismissal. The Applicant conceded that she was sitting outside the store on a seat on one occasion – 19 August 2019. Otherwise the stills from the CCTV footage show an unidentified figure and I am unable to be satisfied that it is the Applicant. The identity of the figure in the footage was not put to the Applicant in cross-examination and the shortcomings in the way that the Respondent and its legal representative presented the CCTV footage in its evidence did not assist with elucidating this matter.
I am also of the view that the Applicant’s breaks did not justify termination of her employment. The Applicant’s evidence was that a previous HR Manager had authorised her taking paid breaks on Sundays when she worked 7.5 hour shifts. While questions may have arisen as to why the Applicant did not indicate these breaks on her time sheet, the Applicant was entitled to breaks and could not have validly agreed to work for 7.5 hours without a break. In my view, while the Respondent was entitled to explore and address this issue with the Applicant it was not a matter that justified dismissal either individually or in conjunction with the other matters raised in the termination letter. Furthermore, the Respondent’s Human Resources Manager Ms Kim displayed a lack of understanding about award entitlements to breaks. I also accept the Applicant’s evidence that as store manager she had other reasons for being out of the store including purchasing consumable items and liaising with centre management.
I turn now to the allegations of theft and fraud. I do not accept that the Respondent has established such conduct in relation to the removal of items from the store on 4 August 2019. The package the Applicant removed could have been an item that was not the property of the Respondent and the evidence does not make good what is a serious allegation. At best, Mr Cheon’s submission was that it was an educated guess that the package contained anything that was the property of the Respondent and that the Respondent had no evidence to establish that any of its stock was missing. The Respondent also had no evidence to establish that if the item that was removed was the Respondent’s stock, the Applicant had not paid for the item. This is a serious allegation and the lack of cogent evidence to establish that the Applicant did engage in such conduct is striking.
It is also surprising that this conduct was discovered on 11 October 2019 – some weeks before the Applicant was dismissed – and was raised with the Applicant on that date but was not included as a reason for termination of the Applicant’s employment. The Respondent’s policies about staff not completing their own purchases were not enforced and the Respondent’s practices in relation to such matters left much to be desired. On the balance of probabilities I do not accept that this allegation was made out.
However, the issues in relation to credit notes are another matter entirely. I am satisfied and find that the Applicant had a practice of giving cash refunds to customers when she should not have done so. I am also satisfied that the Applicant on one occasion, issued a credit note for the full value of an item, when the item was retained by the customer and this was also an action that the Applicant should not have taken. I accept that the retail establishment operated by the Respondent sells discounted clothing and that there will be occasion when a discount is not applied to a purchase and a customer returns to the store to seek a refund or credit for an amount overpaid, without wishing to return the item. I accept that customers may be irate if there is a delay in them receiving a refund or a credit because they have paid item by credit card, and there is a delay to processing the refund or credit on weekends when the Applicant was working. However, the Applicant’s explanation for the way in which she dealt with such situations was improbable and even allowing for language difficulties, was not credible.
The Applicant had over seven years’ experience with the Respondent and was employed in the position of store manager. The Applicant knew, or should have known, that a refund or credit should not be given in cash where the customer has paid with a credit or debit card. It is more probable than not that the Applicant knew this because on her own evidence, the steps she took to deal with customers in such circumstances were designed to circumvent credits or refunds being made to the card used for the purchase.
I do not accept that the manner in which the Applicant dealt with such issues was the only option she had. I am also satisfied if the customer was overcharged by an amount of $5.00 the Applicant could have created a credit voucher for the $5.00 and offered it to the customer or given the customer $5.00 from the cash register and retained the $5.00 credit voucher for herself, and reimbursed the cash register at a later time before doing the banking. While such conduct would have breached the Respondent’s policies, it would have been consistent with the objective the Applicant claims she was seeking to achieve – keeping the customer happy – while at the same time would not have exposed the Applicant to allegations of theft.
Instead, the Applicant engaged in conduct which is illogical and bizarre to the extent that I find her explanation improbable. Using the beaded cardigan as an example, the evidence establishes that on 11 August 2019, the Applicant handed a $5.00 cash refund from the cash register to a customer who had paid $23.39 for that item and should only have paid $18.39. The Applicant created a credit note for the full amount of $23.39 and the customer left the store with the cardigan. The credit note covered the cardigan and the Respondent had no way of knowing that the cardigan was not in the store having been returned. The Applicant used that credit for the full amount of $23.39.
In her evidence in chief the Applicant said that she put the $5.00 refund back into the cash register. It was only after Mr Cony Lee gave his evidence and I had warned her about the impact of that evidence that the Applicant said that she put the entire amount of $23.39 back into the cash register. This would have caused the cash register to be out of balance by being over in the amount of $18.39. Mr Cony Lee said that the cash register was not out on the day in question. The Applicant sought to explain why the cash register was not over in the amount of $18.39 by pointing to the cash register being under on the previous day.
I have made allowances for the fact that the Applicant should have had notice of the extent of Mr Cony Lee’s evidence had the Respondent’s legal representative ensured that proper witness statements were filed in the Commission in accordance with Directions. The Applicant would then have understood the Respondent’s case before she gave her oral evidence. However, I explained the impact of Mr Cony Lee’s evidence at the hearing, warned the Applicant about self-incrimination and gave her an adjournment to consider her position and to formulate a response. The response the Applicant gave was not credible in relation to this transaction. It is also apparent that this was not the first occasion on which the Applicant had dealt with credit notes in this way.
While I do not accept that the Respondent has presented evidence sufficient to establish theft, I do accept that the Applicant’s handling of cash and her issuing of credit notes was entirely inappropriate. The Applicant held a position of trust as store manager and her conduct in relation to the credit notes was a valid reason for her dismissal. I am also of the view that the inability of the Applicant to provide a reasonable and credible explanation for her conduct at the hearing, further establishes that this conduct was a valid reason for dismissal. Accordingly, I am satisfied and find that there was a valid reason for the Applicant’s dismissal related to her conduct.
Whether the Applicant was notified of the reason for the dismissal
It is well established that s. 387(b) of the Act is included is part of a statutory framework by which the Commission is required to consider whether the dismissal of an employee is attended with substantive and procedural fairness. An important aspect of procedural fairness is that the reason for an employee’s dismissal is notified to the employee before the decision to dismiss the employee is taken. The plain meaning of the term “notified” is that information is provided in a formal manner. Notification of the reason for dismissal informs the subsequent matters required to be considered by the Commission in ss. 387(c) and (d) of the Act. As a Full Bench of the Commission observed in Crozier v Palazzo Corporation Pty Ltd:43
“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 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify the employee and give them an opportunity to respond after the decision to terminate their employment.”
Sections 170CG(3)(b) and (c) of the former Workplace Relations Act were in similar terms to the present sections 387(c) and (d) of the present Act and respectively provided that for the purposes of arbitrating an application alleging that a dismissal was unfair the Commission must have regard to whether the employee was notified of a reason for termination of employment related to capacity or conduct and whether the employee was given an opportunity to respond to any such reason. As the Full Bench held in Crozier, ss. 170CG(3)(b) and (c) of the former Act were clearly related to the concept of procedural fairness.44 The same can be said in relation to sections 387(c) and (d) of the current Act.
In the present case, the reasons for the Applicant’s dismissal was because of her conduct, and while reasons for dismissal were provided to her prior to the dismissal, those reasons did not include an allegation that the Applicant removed stock from the Respondent’s store room and the Respondent’s view was that she had not paid for the items she removed. It is apparent that the Respondent relied on the removal of the item as a reason for dismissal. The Respondent notified the Applicant of this matter and took steps to seek an explanation from her. Whether the Applicant had an opportunity to respond to the allegations is a matter I will return to.
It is also the case that other conduct relied on at the hearing as a valid reason for dismissal – the credit vouchers – was not known at the time the Applicant was dismissed and was not notified to her. Accordingly, I do not accept that the Respondent notified the Applicant of the reasons for her dismissal in a manner consistent with s. 387(b) of the Act.
Whether the Applicant was given an opportunity to respond to reasons related to conduct
I do not accept that the Applicant had an opportunity to respond to reasons for her dismissal related to her conduct. The process adopted by the Respondent was devoid of procedural fairness. The Applicant received a first warning in July then two additional warnings in rapid succession, on 21 and 22 October. As previously noted the issues dealt with in those warnings did not individually or collectively warrant dismissal. The Respondent acted with undue haste in relation to those matters and terminated the Applicant’s employment.
It is also the case that at the time of the dismissal, the Applicant was in the process of responding to the allegation of removing stock that was the Respondent’s property and, on any view, had not completed her explanation. Two warnings about relatively trivial matters were piled on top of the stock removal allegations, and as a result the Applicant was denied a proper opportunity to respond to that allegation.
The allegations in relation to the credit notes were not provided to the Applicant at the time of her dismissal and were relied on in response to her unfair dismissal application, to establish a valid reason for dismissal. While I have found that the conduct of the Applicant in relation to the credit notes was a valid reason for dismissal, the fact remains that she was not given an opportunity to respond to that allegation.
Whether a support person was unreasonably refused in discussions relating to dismissal
There were no discussions relating to the Applicant’s dismissal as it was undertaken by email. Accordingly, there was no refusal – reasonable or otherwise – of a support person and this is a neutral consideration in the present case.
Whether the Applicant was warned about unsatisfactory performance
I accept that the Applicant was given warnings about her unsatisfactory performance. However, in the present case, the Applicant was dismissed on the basis of conduct rather than performance. In the context of an unfair dismissal regime which focuses on procedural and substantive fairness, the purpose of a warning is to give an employee at risk of dismissal an opportunity to improve his or her performance. It does not automatically follow that the giving of a written warning will be found to give an employee such an opportunity.
In the present case, even if the Applicant’s dismissal was based on unsatisfactory performance, the second and third warnings were given in such rapid succession, that there was no opportunity for the Applicant to improve her performance. The Applicant was dismissed for reasons of conduct rather than unsatisfactory performance and this consideration is not relevant in the present case. In circumstances where the dismissal was not performance related this is a neutral consideration.
Impact of size of Respondent’s undertaking on dismissal procedures
The Respondent is a large employer and this is not a consideration that can explain deficiencies in the procedure the Respondent followed in effecting the dismissal.
Impact of dedicated human resource management specialists
The Respondent had a dedicated human resource management specialist and access to legal advice. While I accept that the Respondent’s Human Resources Manager did not have strong English language skills, neither did the Applicant. It would be expected that the Respondent would have dealt with the dismissal of the Applicant and the steps that preceded the dismissal, in a more appropriate manner rather than in the manner set out in this Decision.
Other relevant matters
I consider that the Respondent fast tracked the second and third warnings, in circumstances where fairness required that it put the serious allegations to the Applicant in a manner that allowed her to respond to them including with sufficient detail from the CCTV footage and the documentation relating to the credit note transactions. The Respondent did not take these steps and in my view, notwithstanding the findings I have made, this rendered the dismissal unfair.
I am also of the view that it would have been reasonable for the Respondent to put the allegations and supporting evidence to the Applicant before dismissing her and that given it had commenced investigating the Applicant’s conduct, evidenced by the discovery of the CCTV footage showing the Applicant removing items from the stock room, it would have been a relatively easy step to have taken.
Conclusion in relation to whether the Applicant’s dismissal was unfair
On balance and after considering the matters in s. 387 of the Act, I am satisfied that the Applicant’s dismissal was unfair.
REMEDY
Given that my finding that the Applicant’s dismissal was unfair, I determined to award a remedy. As required by s.390 of the Act, I am satisfied that the Applicant was a person protected from unfair dismissal and that she has been unfairly dismissed. I was also of the view that the Applicant should have a remedy for her unfair dismissal. The Applicant seeks compensation.
Reinstatement is the primary remedy for unfair dismissal. Compensation can only be awarded where the Commission is satisfied that reinstatement is inappropriate. In the present case my view is that reinstatement is inappropriate on the basis that I have found that there were valid reasons for the Applicant’s dismissal and that the Respondent has lost trust in her and that loss of trust is reasonably based. Accordingly, I am satisfied that in all of the circumstances reinstatement would not be appropriate and that compensation should be awarded to the Applicant for her unfair dismissal.
In relation to the assessment of compensation, s. 392 of the Act provides as follows:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC 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 the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.[39] That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;[40] Jetstar Airways Pty Ltd v Neeteson-Lemkes[41] and McCulloch v Calvary Health Care (McCulloch).[42]
In McCulloch¸ the Full Bench considered, in some detail, the question of how a contingency discount should be applied to the calculation of the remuneration the dismissed person would have received, or would have been likely to receive, if the person had not been dismissed. The Full Bench pointed out in McCulloch that a deduction for contingencies is applied to prospective losses, or losses occasioned after the date of the hearing. The Full Bench also noted that at the time of the hearing any such impact on the earning capacity of the dismissed person between the date of dismissal and hearing will be known, and a finding can be made on the basis of whether the dismissed person’s earning capacity has in fact been affected during the relevant period.
I turn now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to the Applicant for his unfair dismissal.
The effect of the order on the viability of the Respondent – s. 392(2)(a)
There is no evidence that an Order for compensation will have any impact on the viability of the Respondent. If this was an issue, I assume that the Respondent’s legal representative would have put evidence before the Commission given that the Directions I issued required the parties to address the issue of remedy.
Length of the Applicant’s service – s. 392(2)(b)
The Applicant was employed by the Respondent for a period in excess of seven years. This is a relatively lengthy period of service.
Remuneration that the Applicant would have or would likely have received – s. 392(2)(c)
This consideration requires an assessment of how long the Applicant would have remained in employment but for his dismissal. In my view had the Applicant been afforded procedural fairness she would have remained in employment for no more than a four week period in which the evidence of her conduct could have been formulated and put to her so that she was afforded procedural fairness.
I am also of the view, having considered the Applicant’s evidence at the hearing of her unfair dismissal application, that she would not have provided an acceptable explanation, and would have been fairly dismissed after the opportunity to explain her conduct had been provided to her.
The Applicant’s weekly earnings were $1,001.86 per week. In a four week period she would have earned an amount of $4,007.44 and received superannuation contributions of $380.70.
The Applicant’s efforts to mitigate loss – s. 392(2)(d)
The Applicant made reasonable attempts to mitigate the loss of her employment and obtained alternative employment (albeit casual employment) shortly after she was dismissed.
The amount of any remuneration earned since dismissal – s. 392(2)(e)
Given the period of time covered by the award of compensation, I do not intend to deduct any amount earned by the Applicant after her dismissal.
The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)
Given the period which has elapsed since the Applicant was dismissed and the period I have assessed that she would likely have remained in employment, I make no adjustment to the amount of compensation on this basis.
Any other matter that the FWC considers relevant – s. 392(2)(g)
There are no other matters I consider to be relevant.
Deduction for misconduct
Notwithstanding my findings about the Applicant’s conduct, I do not intend to make any deduction on this basis, given the amount of compensation I have awarded.
CONCLUSION
In summary I have decided that:
- An order for the payment of compensation would not affect the viability of the Respondent’s business (s.392(2)(a)).
- The length of the Applicant’s service favours the making of an award of compensation (s.392(2)(b)).
The remuneration that the Applicant would have been likely to receive, but for her dismissal, is $4,007.44 in gross wages and superannuation contributions in the amount of $380.70 (s.392(2)(c)).
- I make no deduction for contingencies on the basis of the time frame over which I have assessed that the Applicant would likely have remained in employment.
- I make no deduction on account of a failure to mitigate loss (s.392(2)(d)).
- I make no deduction for remuneration earned since dismissal (s.392(2)(e)).
- I make no deduction for income likely to be earned during the period between the making of the order and the actual compensation (s.392(2)(f)).
- There are no other relevant matters (s. 392(2)(g)).
- I make no deduction for misconduct (s.392(3)).
An Order requiring that the Respondent pay compensation to the Applicant in the amount of $4,007.44 in gross wages, to be taxed according to law, and superannuation contributions in the amount of $380.70 has been issued.[43]
DEPUTY PRESIDENT
Appearances:
Mr E Lee for the Applicant.
Mr D Cheon of Dax Legal for the Respondent.
Hearing details:
27 May, 28 May & 18 June.
2020.
By video.
[1] Exhibit A3 Witness Statement of the Applicant; Exhibit A1 Form F2 of the Applicant; Exhibit A2 Outline of Submissions of the Applicant.
[2] Exhibit R1 Statement of Kayoung (Alice) Kim; Exhibit R2 Second Statement of Kayoung (Alice Kim)
[3] Exhibit R5 Statement of Mr Doho (Scott) Ryu
[4] Exhibit R4 Statutory Declaration of Seungjin Steve Ma
[5] Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204.
[6] Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
[7] Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.
[8] Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.
[9] Bista v Glad Group Pty Ltd [2016] FWC 3009.
[10] (1938) 60 CLR 336; cited in Barber v Commonwealth (2011) 212 IR 1, 33 [93].
[11] Ibid at 362-363.
[12] (1992) 110 ALR 449.
[13] Ibid at 450.
[14] Ibid at 451.
[15] Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.
[16] Transcript 28 May at PN1365.
[17] Transcript 27 May PN242.
[18] Exhibit R1.
[19] Transcript 28 May 2020 at PN1381 to 1382.
[20] Exhibit A2.
[21] Transcript 27 May 2020 at PN176 to PN188.
[22] Transcript 18 June 2020 at PN249.
[23] Transcript 27 May 2020 at PN477.
[24] Transcript 27 May 2020 at PN435 to PN441.
[25] Transcript 27 May 2020 at PN455 to 463.
[26] Transcript 27 May 2020 at PN474 to 475.
[27] Transcript 27 May 2020 at PN400.
[28] Transcript 27 May 2020 at PN479.
[29] Transcript 27 May 2020 at PN480 to 487.
[30] Transcript 27 May 2020 at PN491.
[31] Transcript 27 May 2020 at PN492 to 496.
[32] Transcript 28 May 2020 at PN1599 to 1600.
[33] Transcript 28 May 2020 at PN1624 to 1637.
[34] Transcript 28 May 2020 at PN1638 to 1639.
[35] Transcript 28 May 2020 at PN1652 to 1667.
[36] Transcript 27 May 2020 at PN156 to 158.
[37] Transcript 27 May 2020 at PN161 to 163.
[38] Transcript 28 May 2020 at PN
[39] (1998) 88 IR 21.
[40] [2013] FWCFB 431.
[41] [2014] FWCFB 8683.
[42] [2015] FWCFB 2267.
[43] PR722755.
Printed by authority of the Commonwealth Government Printer
<PR722640>
0
11
0