Ms Sonia Love v DJP Asset Management Pty Ltd

[2021] FWC 4788

[2021] FWC 4788

FAIR WORK COMMISSION

DECISION

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

Ms Sonia Love
v
DJP Asset Management Pty Ltd

(U2021/3409)

DEPUTY PRESIDENT LAKE BRISBANE, 5 AUGUST 2021

Application for unfair dismissal remedy – small business employer – summary dismissal – whether employer complied with Small Business Fair Dismissal Code – whether use of company card constituted serious misconduct – application dismissed

[1] Ms Sonia Love (the Applicant) brought an application for an unfair dismissal remedy pursuant to s.394 of the Act in which she contended that she had been unfairly dismissed by DJP Asset Management Pty Ltd (the Respondent).

[2] The Applicant commenced working as a property manager for Intergrityx Enterprises Pty Ltd in 30 July 2018. That company underwent a restructure and the Applicant’s employment was consequently transferred to the Respondent on 1 November 2020. It was accepted that since July 2018 her employment had been continuous.

[3] On 12 March 2021, the Applicant was notified that her employment was to be terminated, but it was agreed it would not terminate until 31 March 2021.

Preliminary matters

[4] Section 396 of the Act requires that I decide four matters before considering the merits of the Applicant’s application. Neither party disputed that the Applicant made her application within the 21-day period required by s.394(2) of the Act, that she was a person protected from unfair dismissal, as she earned less than the high-income threshold 1 or that her dismissal was not a case of genuine redundancy. I am satisfied that the three matters referred to in s.396(a), (b) and (d) are satisfied.

[5] The issue before me is whether the dismissal of the Applicant was consistent with the Small Business Fair Dismissal Code (the Code). The Respondent says it was, but the Applicant disagrees.

Dismissal under the Code

[6] The dismissal of an employee will not be unfair if it was consistent with the Code. 2 Section 388 of the Act provides:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”

[7] It was uncontentious that the Respondent, notwithstanding its associated entities, had less than 15 employees and was therefore a “small business” within the meaning of s.23 of the Act.

Legal framework

[8] The Code provides that:

“Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[9] In the present case, if the Applicant’s employment was terminated because the Respondent reasonably believed that she had engaged in serious misconduct, the corollary is that Respondent was entitled to summarily dismiss her. If that is so, the application fails. If, however, the Applicant’s conduct fell short of serious misconduct, I must consider whether there was a valid reason for the Applicant’s dismissal and whether she was afforded the usual requirements of procedural fairness.

[10] Both matters were dealt with at a hearing before me on 29 July 2021. The Applicant appeared on her own behalf and gave evidence. Mr Daimien Patterson, the Respondent’s owner and director appeared for the company and Mr Russell Kirby, the General Manager, gave evidence on the Respondent’s behalf. A statement was also provided by Jane Benson, the Business Manager, but she was not called.

Background

[11] The Respondent’s evidence was that the Applicant was overall a very good property manager. However, he had received phone calls from people with whom she interacted in relation to her “abruptness”. Mr Kirby had, on a number of occasions raised the issue of her verbal and written communication style with the Applicant. She had done some training, but it had not improved. Though frustration was growing in relation to the Applicant’s communication style, this did not factor into the decision to dismiss her.

[12] Both the Applicant and Mr Kirby admitted that while overall they were able to work together, there was occasionally tension between them. The Applicant said this was because they sometimes had different opinions, but both thought they were right.

Events leading up to termination

[13] In or around October 2020, the Respondent company adopted a MyConnect card, which operated as a referral scheme for the property manager if the client adopted the utilities transfer services provided by the MyConnect company. For every successful referral, MyConnect paid a fee into a debit card. It was agreed that the Applicant would have possession of the Respondent’s MyConnect card.

[14] The Applicant says she and Mr Kirby had a verbal conversation when the MyConnect card first arrived about its use. Her evidence was that Mr Kirby told her to keep the card and use it for when the team when out for coffee or lunches, but that she could also use the money on the card for personal use. It was stated by the Applicant, and conceded by the Respondent, that the Applicant was not asked to provide receipts or account for her transactions with respect to this card as she did with the company credit card she held and used on behalf of the Respondent.

[15] Under oath, Mr Kirby agreed that the Applicant was entitled to possess and use the MyConnect card. However, he states she was only authorised to do so for work-related activities, for example, taking the team out to lunch or coffee or entertaining a client. He was adamant that he never authorised the Applicant to use the MyConnect card for personal use. He conceded that records should have been maintained in relation to the use of the card, but that was not considered or required at the time.

[16] The Applicant did use the MyConnect card to pay for coffees and lunches with clients and colleagues, including in the presence of Mr Kirby. Those transactions were not at issue.

[17] On or around 9 March 2021, Mr Kirby became aware that the Applicant had been using the MyConnect card for personal use. There was, for example, large cash withdrawals from hotels. This was never denied by the Applicant. Mr Kirby had come to the realisation that the Applicant had used the card for personal use whilst conducting the first audit of the MyConnect card and checked the transactions made using it since the Applicant had been given it. He accepts this was not good practice and the MyConnect card has since become part of the Respondent’s more regular auditing processes.

[18] On 9 March 2021, Mr Kirby sent the Applicant a message asking her to call him. She did. The Applicant and Respondent’s recollections of this conversation differ somewhat. There was no one else on the call.

[19] The Applicant says the conversation began by discussing the landlord insurance before Mr Kirby asked about the use of the MyConnect card. She recalled him asking where the funds on that card had gone. She replied that she used the MyConnect card to pay for team lunches and coffees, outings with clients and admitted to having taken out money (i.e. cash withdrawals) for personal use. She recalls the conversation becoming quite heated and admits that she did not speak as respectfully as she should have.

[20] Mr Kirby agrees that during the call on 9 March 2021 he confronted her about using cards for extraneous purposes. She admitted to having used the card for personal use, as he had suspected. He admitted it would be fair to say that he was ‘quite worked up’ on the call as he felt he had been let down by a mate and that the Applicant had stolen from the Respondent. He felt that once he identified the existence of theft, there was no other option other than termination. Mr Kirby was mindful of and regretted the inevitable impact that termination would have on the Applicant.

[21] Following the call, the Applicant said to Mr Kirby via text, “If you want the my connect card take it. I was just using it like a bonus and looking forward to it as there is no other bonuses in my job.”

[22] Mr Kirby did not take the card back. He asserts that there was no need because the card had been cancelled. The Applicant says that is not the case as she used the card for a work-related purchase two days before her employment ended. There was no evidence adduced by either party in relation to this point. In any event, it was accepted that the Applicant kept it until the conclusion of her employment.

[23] Following the Applicant’s text, Mr Kirby responded with the following message, “Do not be under any illusion that this is how to conduct yourself Sonia.” By this he was referring to the theft.

[24] Mr Kirby arranged a meeting with the Applicant at approximately 9am on 12 August 2021 at the Paddington office. No one else attended that meeting and again, Mr Kirby and the Applicant have slightly different recollections of the events.

[25] The Applicant says that Mr Kirby told her there was a clash of personalities and consequently, her employment was to be terminated. The Applicant says she asked for further explanation and whether there was anything she could improve. The Applicant recalls Mr Kirby saying no, that she could not change personalities and that she would be better suited to working somewhere else. The Applicant asked if there was anything she could do to keep her job as her house renovations were four weeks from completion. Mr Kirby said no but agreed she could work for two further weeks, take some leave without pay and then use up her annual leave.

[26] Mr Kirby recalls opening the meeting by saying something along the lines of, “you know what this is about, you’ve stolen from the company”. He felt that theft could not be tolerated and that he had no option but to terminate her employment. That said, he was acutely aware of the impact that losing her employment would have on the Applicant and was willing to support her as much as he could. He was aware she had a mortgage review coming up and continuing renovations. Given the circumstances, he thought that it was punishment enough to lose her job. Accordingly, he afforded the Applicant some mercy in allowing her an extended exit from the company to offer her additional time to secure future employment and be in full time work at the time of the mortgage settlement. He was willing to be a positive reference for her and maintains that she was a good property manager.

[27] Following the meeting, Mr Kirby sent an email to the Applicant confirming that she would cease attending work at the end of March 2021 but that her employment would terminate at the end of April after using her annual leave and some leave without pay. The email refers to the handing over of work and the fact that Mr Kirby would be willing to be an enthusiastic reference for the Applicant (“Please also ensure that you put me down as your reference as I will ensure that your new employees know they are getting a very very very good [property manager]”). There was no reference to the Applicant’s theft or serious misconduct.

[28] Mr Kirby says that was a deliberate decision to try and minimise the effects the termination would have on the Applicant. By not referring in writing to the theft or serious misconduct, Mr Kirby believed that he would still be able to “hand on heart” give the Applicant a good reference in relation to her work as a property manager. Indeed, he did so when he was called by a potential employer. He accepts that in hindsight he should have referred to the serious misconduct for which the Applicant was terminated but says that the omission was out of care for the Applicant. He says that after their phone call on 9 March 2021 and the meeting of 12 March 2021, there could be no doubt in the mind of either party that the reason the Applicant was terminated was because she had used the MyConnect card for unauthorised, personal transactions.

[29] At the hearing, the Applicant asked Mr Kirby why she was not offered the opportunity to repay the funds and keep her job if there had been a miscommunication regarding appropriate usage of the card. Mr Kirby was firm; there had been no miscommunication, she had used the card for personal use without authorisation. It was submitted that the other personal benefits received by the Applicant were clearly set out in her employment contract, which had been updated when the restructuring occurred, which was around the same time that the MyConnect card arrived. There is no mention of the Applicant having the benefit of unfettered personal use of the MyConnect card. Mr Kirby admitted that no lesser disciplinary penalty had been considered. He reiterated that, in his view, the Applicant had stolen from the company and accordingly, there was little choice but to terminate her employment.

[30] Around 23 March 2021, the Applicant requested that her termination date be extended. That was declined.

[31] The Respondent has since taken steps to recover the unauthorised spend from the MyConnect card, which was calculated to be $3482.

Consideration

[32] To establish that it summarily dismissed the Applicant in accordance with the Code, the Respondent must demonstrate that the Applicant was dismissed without notice or warning and that the Respondent believed on reasonable grounds that her conduct was sufficiently serious to justify immediate dismissal.

[33] I am satisfied that the Applicant was dismissed without warning. She and Mr Kirby had one phone conversation on 9 March 2021, during which the Applicant admitted to having used the funds on the MyConnect card for personal use. In their subsequent meeting on 12 March 2021, her employment was terminated.

[34] The Respondent, through Mr Kirby, discovered on 9 March 2021 that the Applicant had used the company’s MyConnect card for personal use. Given this was a company card, the Respondent viewed this conduct as theft, which is one of the examples of serious misconduct listed in the Code. The Applicant admitted to using the MyConnect card for personal use and therefore I accept the Respondent believed on reasonable grounds that the unauthorised used had occurred and thus was sufficiently serious to justify immediate dismissal.

[35] I did turn my mind to whether the Applicant truly believed she had been authorised to use the funds on the MyConnect card for her personal use and if there was a genuine misunderstanding. While I accept the lack of reporting and auditing of the card by the Respondent was not done in the same way as was required for the Respondent’s credit card which the Applicant also possessed, I do not accept that it was reasonable for the Applicant to proceed on the basis that the funds on that card could be used as a personal bonus. The MyConnect card was issued to the Respondent. The Applicant was allowed to possess that card because of her employment. I do not think that a reasonable employee acting honestly would perceive that this entitled them to use the card for personal use. That might be different if the card is expressly referred to as being for the employee’s personal benefit in their employment contract or in some other document. However, that was the case here. I also do not accept that Mr Kirby orally authorised the Applicant to use the MyConnect card in that way.

[36] The Code states that, “for a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police”. The Respondent submitted it was taking action to recover the misappropriated funds from the Applicant. No detail was provided as to what specific process the Respondent had embarked upon. It is unclear whether the theft had been reported to police. In any event, the Code provides it is not essential for a report to police having been made.

[37] Having considered the evidence and submissions made by each party, I am satisfied that the Respondent reasonably believed that the Applicant engaged in serious misconduct warranting summary dismissal.

[38] Accordingly, I order that the jurisdictional objection be upheld and that the Applicant’s application be dismissed.

DEPUTY PRESIDENT

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 1   Fair Work Act 2009 (Cth) s.382.

 2   Fair Work Act 2009 (Cth) s.385.