[2015] FWC 6900 [Note: An appeal pursuant to s.604 (C2015/7245) was lodged against this decision - refer to Full Bench decision dated 23 March 2016 [[2016] FWCFB 1795] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Nigel Smith
v
Buick Holdings Pty Ltd T/A DVG Automotive Group - Midland City
(U2015/4370)

COMMISSIONER RIORDAN

PERTH, 21 OCTOBER 2015

Application for relief from unfair dismissal.

[1] This decision relates to an application by Mr Nigel Smith for an unfair dismissal remedy against Buick Holdings Pty Ltd trading as DVG Automotive Group – Midland City Nissan (DVG).

[2] Mr Smith represented himself in this matter. DVG was represented by Mr Ron Bellucci from the Motor Traders Association of Western Australia. I would like to thank Mr Bellucci for his consideration and assistance in allowing this matter to be conducted in a flexible and informal manner. His assistance allowed the proceedings to continue without delay. I am indebted to his professionalism in this regard.

[3] Mr Smith was employed by DVG on June 5, 2014. Mr Smith was terminated on 25 March 2015 by way of correspondence

1- Mr Smith was given three reasons for his termination:
2- that he has fraudulently used the company fuel card;
3- that he sent an inappropriate and offensive text message to his Manager, Albeit by mistake; and
4- that he left his place of employment contrary to an instruction by his Manager to remain on site.

[4] It was agreed with Mr Bellucci that the Company would only rely on the fuel card issue in defending this unfair dismissal application.

[5] Importantly, Mr Bellucci conceded that Mr Smith had not been provided with the appropriate level of procedural fairness from DVG during the termination process on the basis that Mr Smith was not given an opportunity to respond to any of the allegations. This is an important matter which I have taken into account in reaching my decision.

[6] Witness statements in this matter were sworn by Mr Smith, Mrs Jill Smith and Mr Meeran Vankamah on behalf of the Applicant and Mr Noel Rutledge, Mr Ross Bennett, Mr Michael Tomeo and Ms Patricia Daly on behalf of DVG.

[7] DVG employs approximately 740 employees.

Background

[8] Mr Smith worked as a salesman in the used-car division of DVG. He was the only salesman in this yard and reported directly to the Used Cars Manager, Mr Rutledge. Mr Rutledge reported to the Dealer Principal, Mr Bennett.

[9] The company was concerned with the amount of fuel that Mr Smith was purchasing on his company fuel card. It was a term of Mr Smith’s appointment that he would be provided with the use of a motor vehicle from the used cars sales yard to travel to and from work and for his private use on weekends:

“ Company Fuel Card

Terms & Conditions

This Fuel card is accepted subject to the following terms and conditions;

● This fuel card is to provide fuel to company vehicles only, unless written approval from the Dealer Principal is given

● All fuel is to be purchased from local Caltex fuel stations.

It is my responsibility to ensure this fuel card is kept safe at all times and under no circumstances is to be used for any unauthorised purposes.

I am aware it is my responsibility to inform my Manager and Human Resources immediately if this fuel card is lost or stolen.

I agree to return the fuel card to my manager if my employment with DVG ceases.

Please sign the below section and return to HR to indicate your acceptance of these terms and conditions.

Card number: 7071 3400 7417 7709

Monthly limited: $250

Name: Nigel Smith

Date: 8/7/14 “ 1

[10] The document was signed my Mr Smith on 18 July 2014.

[11] Mr Smith lived 40 km away from the car yard, in the northern suburbs of Perth, which meant that he was doing at least 80 km a day and 480 kms a week when travelling to and from work. Mr Smith was entitled to spend $250 on fuel each month on the Company fuel card. Over many months Mr Smith complained that his fuel card allowance was inadequate and that he needed an increase in his allowance. Eventually, Mr Bennett agreed with Mr Rutledge to allow Mr Smith to purchase a tank of petrol on what is known as the company “yard card” once he had exhausted his $250 allowance. Mr Smith denies ever being told of the opportunity.

[12] In an attempt to allegedly improve the efficiency of Mr Smith’s travel, Mr Smith was allegedly allocated a diesel four-wheel-drive vehicle (Nissan Patrol) for the month of February. There is some debate as to whether or not this provided Mr Smith with any actual improved fuel efficiency or, in fact, whether Mr Smith was actually directed to only drive the Nissan Patrol for the month. There is certainly no written evidence that would suggest that such a direction was given.

[13] Mr Bennett accepted that Mr Smith would be using approximately $15 a day in petrol to get to and from work. This equates to $75 a week 2 or $300 per month – which is $50 per month more than the approved allowance, without any private use. From these figures, it would appear that Mr Smith had a justifiable grievance in relation to his fuel allowance.

[14] Mr Smith was off on workers compensation from 26 February 2015, until his termination.

[15] Mr Smith was terminated in March following an investigation into his fuel card use which identified that unleaded petrol had been purchased on his card on two occasions during the month of February. Such an occurrence should not have occurred if Mr Smith was only driving the vehicle that he was allegedly instructed to drive by Mr Rutledge.

“Account Transaction Detail Report 3“

Transaction Date	Location Name	Driver	Product	$TotalExGST
31/1/15	Caltex Wangara S/Stn	Nigel Smith	Unleaded	$12.13
7/2/15	Joondalup Woolorths	Nigel Smith	Unleaded	$36.43
11/2/15	Midvale Caltex Woolworths	Nigel Smith	Vortex Diesel	$29.07
14/2/15	Kingsway Woolworths	Nigel Smith	Vortex Diesel	$30.11
16/2/15	Joondalup Woolworths	Nigel Smith	Unleaded	$39.05
18/2/15	Midvale Caltex Woolworths	Nigel Smith	Vortex Diesel	$39.01
23/2/15	Greenwood Woolworths	Nigel Smith	Unleaded	$38.85

[16] I note from Exhibit B9 that Mr Smith did not use his petrol card from 18 January 2015, until 7 February 2015. Ms Daly advised that any purchases may have been paid on the yard card but there is no documentary evidence before me in relation to the yard card. I note that Mr Smith never seems to “fill the tank” on any of the trips to the petrol station. The presents significant problems in attempting to analyse the data.

[17] It is of significance that a logbook is not in existence in the used-car side of the business for employees who drive vehicles to and from work. I was advised that such a book does exist in the new car business to ensure that employees can be identified as to who was driving what vehicle, on any given day, in case of accidents or traffic infringements which may be notified at a later date. Mr Rutledge testified that he did not believe that a log book was required because there was only himself and Mr Smith in the yard and he knew which vehicles were being driven.

[18] It is also interesting to note that the company, after initially finding these alleged purchase discrepancies on 26 February 2015, did not seek to obtain a copy of the relevant CCTV footage from the particular petrol stations where the unleaded petrol had been bought until many weeks after the purchases. 4 At this point in time, the relevant CCTV footage had been erased by the petrol station.

[19] Mr Smith was dismissed on 25 March 2015 by the Company having couriered to his home, correspondence in the following terms:

“25 March 2015

Private and Confidential

Dear Nigel

Termination of your employment

I am writing to you about your employment with DVG – Midland City.

Your behaviour and conduct of late has been unacceptable:

● On the 25^th February 2015 you send a very inappropriate and offensive text message to your Manager. Copy of which I can provide to you if required.

● On 26^th February 2015, you left the dealership without authority as you had an urgent personal matter to be attended to. At the time your Manager was on a phone call and he asked you to wait until he had finished. You did not wait and left immediately.

● You have not been truthful with DVG – Midland regarding an injury that allegedly occurred again on 26^th February 2015.

As you are aware your fuel card was closed on 26^th February 2015. This action was taken as a result of suspicious fuel card usage. We have now completed our investigation and have found several discrepancies. One occasion in particular, 23^rd February 2015 your drive car was a White Patrol, a diesel vehicle, the fuel you purchased with DVG’s fuel card was unleaded. This vehicle was sold upon your return to work.

During our investigation we were able to conclusively prove that you have used the DVG fuel card for unauthorised purchases.

Time unauthorised use of the fuel card is considered wilful and deliberate behaviour, engaging in fraud, and is inconsistent with the continuation of your employment.

We consider that your actions constitute serious misconduct and warrants dismissal. In these circumstances your continued employment during a notice period would be unreasonable.

You will be paid any accrued entitlements and outstanding remuneration, including superannuation, up to an including the date of this letter. You will receive one week’s pay in lieu of notice.

Employees and employers may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them you can call 13 1394 or visit their website at

Yours truly

Trish Daly

Group Manager – Human Resources”

Statutory Requirements

[20] The objects of the Unfair Dismissal provisions are contained in section 381 of the Fair Work Act, 2009 (the Act);

“381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.”

[21] In considering whether a dismissal is harsh, unjust or unreasonable, the Fair Work Commission (FWC) must take into account the provisions of s.387 of the Act;

“Section 387 Criteria for considering harshness etc.

(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 in any discussion relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that FWA considers relevant.

Contentions

[22] Mr Smith argued that his dismissal was unfair because he only used the fuel card to purchase petrol for company vehicles. He vehemently and consistently denied that he had fraudulently used the card to purchase fuel for his private vehicle.

[23] Mr Smith claimed that his dismissal was part of a conspiracy to dismiss him by senior management, following an alleged assault perpetrated upon him by a senior employee.

[24] Mr Smith asserted that the new Dealer Principal, Mr Tomeo, was out to “get him”. Further, Mr Smith claimed that he was never told by Mr Rutledge to only drive the Nissan Patrol in February or that Mr Bennett had allowed him an extra tank of fuel per month if Mr Smith exhausted his $250 per month allowance.

[25] Mr Smith argued that he would regularly take home two vehicles on a weekend when his daughter and her boyfriend were looking to each purchase a vehicle. Mr Smith accepted that he did not follow DVG policy in submitting the required forms for this practice.

[26] Mr Smith stated that he took a variety of vehicles home over many months. This practice is common in used car sales on the basis that it allows the cars to “tick over” and ensure that they are roadworthy and operational for any future test drives from prospective purchasers.

[27] Mr Bellucci argued that the summary dismissal of Mr Smith was for a valid reason, i.e, that the unauthorised use of the fuel card on at least two occasions amounted to theft and fraudulent behaviour.

[28] Further, Mr Bellucci referred me to Mr Smith’s Form F2 (Unfair Dismissal Application) which was lodged with the FWC on 27 March 2015. In section 3.2 of the form, Mr Smith states:

“They state that I use my fuel card in a personal car, I did not deny this as my manager was aware – but denies now. I made him aware that I use my new A3 convertible on weekends and days off if I need them and was putting fuel in. He was ok with that for months until the DP Ross Bennett resigned and when the new DP came in who doesn’t like me he now denies that too.”

[29] Mr Bellucci identified that Mr Rutledge and Mr Bennett both testified that Mr Smith had been told to only drive the Nissan Patrol in February and that they were unaware of Mr Smith driving any other vehicle until the Nissan Patrol had been sold in late February.

[30] Mr Bellucci suggested that Mr Smith’s conduct fell within the definition of the term “serious misconduct” as defined by regulation 1.07 of the Act:

“1.07 Meaning of serious misconduct
(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.
(2) For subregulation (1), conduct that is serious misconduct includes both of the following:
(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:
(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or
(ii) fraud; or
(iii) assault;

(b) the employee being intoxicated at work;
(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.
(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.
(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

[31] Mr Bellucci also referred me to the requisite standard of proof in matters before the Fair Work Commission compared to the criminal courts, ie, that the alleged conduct occurred “on the balance of probabilities” rather than “beyond reasonable doubt”.

Jurisprudence

[32] In Edwards v Giudice 5, in a different legislative framework, Moore J made the following observation in relation to the operation of s.170CG(3) of the Workplace Relation Act;

“The paragraph requires consideration of the validity of the reason when the reason is, relevantly, based on conduct of the employee. It is, in my opinion, difficult to avoid the conclusion that the Commission is obliged in such circumstances to investigate in the inquiry process contemplated by s.170CG(3) whether the conduct relied on occurred as a necessary step in the process of determining whether a valid reason existed.

The reason would be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or it did occur but did not justify termination.” 6
(My emphasis)

[33] In Byrne v Australian Airlines 7, the High Court endorsed the decision of Doussa J in Lane v Arrowcrest Group Pty Ltd (1990);8

“Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer’s state of ignorance. A circumstance likely to weight against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred.” 9

(My emphasis)

[34] Whilst this case is predominantly relied upon as support for an employer to rely on facts after the termination of employment, it also highlights the requirement for an employer to make an appropriate level of enquiry in relation to the facts of a case before an employee is terminated.

[35] The oft quoted joint judgement of McHugh and Gummow JJ, in Byrne 10 sets the parameters for these types of determinations;

“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. ...

Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable...”

[36] The Full Bench of the AIRC in Australia Meat Holdings Pty Ltd cited this decision in definitive terms;

“The above extract is authority for the proposition that a termination of employment may be:

unjust, because the employee was not guilty of the misconduct on which the employer acted;

unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or

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.

[37] Mr Bellucci referred me to the principle of “on the balance of probabilities.” This phrase emanates from the High Court decision in Briginshaw v Briginshaw, 11where Dixon J said;

“The tribunal must feel an actual persuasion of its occurrence or existence before it can be found… Reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved… In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”

[38] In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd, 12the High Court held;

“The strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove… authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary ‘where so serious a matter as fraud is to be found.”

[39] In Brinks Australia Pty Ltd v Transport Workers’ Union of Australia, 13 a Full Bench of the AIRC said;

“It seems to us beyond doubt that the standard of proof to be applied in Commission proceedings is proof on the balance of probabilities. While it is true that the strength of the evidence necessary to establish a fact on the balance of probabilities may vary according to the nature of what it is sought to prove, the standard of proof never changes. The Commissioner indicated that he thought it appropriate to apply a higher level of satisfaction in relation to findings of fact involved than the bare civil onus of the balance of probabilities. That was an error of law.”

[40] The pre-eminent decision in relation to the requirement of s387(c), ie, whether Mr Smith was given an opportunity to respond to the allegation of serious misconduct is Crozier v Palazzo Corp Pty Ltd 14. In this case the Full Bench said;

“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. [The legislation] would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”

[41] In Farquharson 15 the Full Bench held that;

“The fact of unfairness in the employer’s decision making process, even if it involves a breach of a term in a certified agreement, is but a factor to be taken to account in determining whether a termination of employment was harsh, unjust or unreasonable. In circumstances where, as here, the merits of a termination of employment based on misconduct have been the subject of a full hearing in the Commission (in which the employer must establish the alleged misconduct on the balance of probabilities) and the dismissal has been found to be justified, it will be rare for a defect in an internal disciplinary process that preceded the termination justifying a conclusion that the termination was harsh, unjust or unreasonable. This is so because, almost invariably in such circumstances, it may be inferred that the outcome of the disciplinary process would have been the same even if there had been no such defect.”

Consideration

[42] In assessing whether Mr Smith’s dismissal was harsh, unjust or unreasonable, I am required to undertake an assessment of each subsection of section 387 of the Act.

(a) Valid Reason

[43] DVG have claimed that Mr Smith has fraudulently used his Company fuel card for his own personal use on at least two occasions during the month of February for a total expenditure of $77.90. I find that Mr Smith knew of the Company fuel card policy. Mr Smith knew that he required approval in writing to use the Company fuel card to purchase fuel for his private vehicle. I accept that the information provided by Mr Smith in his F2 application to be true and accurate.

(b) Was employee notified of that reason

[44] Mr Smith was advised of his dismissal by correspondence. This correspondence identified the allegation of fraudulent use of the Company petrol card.

(c) Opportunity to Respond

[45] Despite numerous attempts by Mr Smith to discuss the reasons for termination, DVG refused to participate in such discussions. Mr Bellucci accepted that, as a result of this behaviour, DVG had not provided the requisite procedural fairness to Mr Smith in relation to his termination. Mr Bellucci claimed that DVG have always accepted that they did not comply with the procedural fairness requirements.

(d) Support Person

[46] Mr Smith was not provided with an opportunity of a meeting. This provision is therefore irrelevant.

(e) Unsatisfactory Performance Warning

[47] Mr Smith was regarded as a very good car salesman. His performance was not a relevant issue in relation to his dismissal.

(f) Size of Employer

[48] DVG is a large employer with 40 car dealerships under their control. There are no excuses for an employer of this size not to provide their employees with the necessary procedural fairness.

(g) Dedicated Human Resources Management

[49] DVG has its own HR Department. Ms Daly is the Group Manager of this Department.

(h) Any other relevant consideration

[50] The management practices at DVG Midland Nissan Used Cars are sloppy. I can see absolutely no reason why the practice of maintaining a vehicle log book for the vehicles that are driven by staff would only apply in the new car division. The same issues in relation to the imposition of fines and penalties and the need to identify the driver would apply equally to employees in the used cars department.

[51] DVG did not attempt to source the CCTV footage from the relevant petrol station for many weeks after the alleged misuse of the petrol card. This inactivity would be acceptable if DVG were unaware of the indiscretion for that period of time, but it knew of the misuse some two days after it occurred. That is when they should have attempted to source the additional evidence.

[52] Mr Smith vehemently denies that Mr Rutledge told him to only drive the diesel Nissan Patrol during February. He claims that he drove a multitude of cars during that month, a claim supported by his wife, Mrs Jill Smith. A simple three line letter advising Mr Smith of this requirement would have been sufficient to prove and substantiate the direction from the Dealer Principal, Mr Bennett.

[53] The evidence of Ms Daly leads me to believe that Mr Smith may have been “set up” to fail by DVG in February. DVG made a conscious decision to insist Mr Smith only drive a diesel fuelled car whilst they monitored his fuel usage over the month. Mr Smith was not notified of Management’s intention to monitor his fuel card during February 16. As a result, I am not convinced that DVG has provided Mr Smith with a “fair go”. It would have been appropriate to re-issue the petrol card policy to all staff to ensure that all employees fully understood their obligations under the policy and the written approval from Management for any exception to the policy.

[54] DVG was aware that Mr Smith was considering renewing his police career in 2016. DVG would have known that any suggestion of fraudulent behaviour would render any such application improbable. It would also be unlikely that another car dealership would be willing to employee Mr Smith with a black mark, such as this, against his name. Mr Smith advised me that apart from a short term appointment at another car yard, he has unsuccessfully applied for more than a dozen jobs in this industry since his termination and is surviving on the payment of $175 per week from a Disability Pension.

Determination

[55] I have taken into account all of the evidence and submissions of the parties.

[56] I find that DVG had a valid reason to dismiss Mr Smith. DVG remain convinced that Mr Smith was driving a diesel vehicle on 23 February 2015, when he purchased unleaded fuel from a petrol station at Greenwood. This purchase was in breach of the DVG fuel card policy. Relevantly, Mr Smith has admitted that he has used DVG’s fuel card to purchase fuel for his own vehicle. Mr Smith knew that such a practice was a breach of the fuel card policy without written authorisation. I have taken this into account.

[57] However, such a finding does not necessarily sustain the proposition that the dismissal was not harsh, unjust or unreasonable.

[58] It is of significance that Mr Smith was not given an opportunity to discuss his credit card purchases before he was terminated. The “horse has already bolted” analogy of the Full Bench in Crozier v Palazzo Corp Pty Ltd 17 is of proportional significance in relation to any fairness assessment. The whole concept of natural justice/procedural fairness is based around the requirement for both sides to get a fair go. Mr Smith was denied the right to respond to the accusations. I have taken this into account.

[59] Mr Smith’s alleged fraudulent use of DVG’s fuel card was eventually referred to the police by DVG. The police did not charge Mr Smith. Whilst the outcome of the police investigation is of little relevance to these proceedings, the mere fact that the police investigated the matter signifies the seriousness of the issue.

[60] I am obligated to take into account the obiter of the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd 18 and the Full Bench in Brinks Australia Pty Ltd v Transport Workers’ Union of Australia19. As such, whilst the standard of proof remains proof on the balance of probabilities, the evidence must be clear and concise, particularly in relation to serious accusations such as fraud.

[61] CCTV footage was available for the two incidents in February 2015. DVG, whilst monitoring Mr Smith’s fuel purchases throughout February, could have sourced this footage on either 17 or 24 February 2015. They failed to do so. I have taken this into account.

[62] Mr Smith is a fairly unique individual. To use an Australian colloquialism, he is a “good spruiker”. He is very good at talking but not very good at listening – a trait that undoubtedly makes him a good salesperson, whilst providing challenges for the conduct of these proceedings. I have taken this into account.

[63] Mr Smith was allegedly advised by Mr Rutledge that he was to only drive the diesel fuelled Nissan Patrol during February. Mr Smith denies this conversation. If DVG were closely looking at Mr Smith’s fuel card purchases then this direction should have been put in writing. I note that no fuel was purchased by Mr Smith until 7 February and no diesel until 11 February. I have taken this into account.

[64] I also take into account the decision by Mr Bennett to allegedly direct Mr Smith to drive a vehicle that would obviously exhaust his monthly fuel allowance by simply driving to and from work. Such a direction, without the promise of the additional tank of fuel on the yard card, would have been mean and unfair.

[65] Mr Smith appears to know his cars very well. If such a direction had been made by Mr Rutledge, I am confident that Mr Smith would have immediately raised the issue of his petrol allowance. It is clear that this issue was at the forefront of his mind. I have taken this into account.

[66] I accept Mr Bellucci’s submission that Mr Smith has admitted to breaching the DVG fuel policy in his F2 application. Mr Smith was of the view that he had an agreement with Mr Rutledge that if he used his own private vehicle on the weekend instead of DVG’s vehicle, then he was entitled to replace the fuel that had been used. This point was not pursued in any detail with Mr Smith, Mr Rutledge or Mr Bennett, but there is a modicum of logic to such a proposition, ie, if your contract of employment entitles you to full private use of a motor vehicle, including fuel, then should you be disadvantaged by using your own vehicle when you are entitled to use the company vehicle? It is an interesting point which I have taken into account.

[67] The practice of employees taking a multitude of cars home each month makes it extremely difficult to fully utilise the data provided on the monthly fuel card summary. The practice of not selling cars with a full tank of petrol further exacerbates this problem. I have taken this into account.

[68] I have taken into account the fact that Mr Smith has been unable to secure long term employment since his dismissal and is now the recipient of a disability pension

[69] I have considered the overall effect of DVG’s failure to provide Mr Smith with an opportunity to respond to the allegations. I am in no doubt that Mr Smith would have vehemently denied any fraudulent behaviour. I am in no doubt that he would have insisted on DVG accessing the CCTV footage from the two petrol stations. That evidence (the CCTV footage) would have either cleared or condemned Mr Smith.

[70] As such, Mr Smith was denied the opportunity to argue for DVG to source this vital evidentiary material as a matter of urgency. I am of the view that this defect is of such significance to overcome the general conclusion in Farquharson.

Conclusion

[71] I find that DVG, by dismissing Mr Smith in the manner that it did, denied Mr Smith his basic right to procedural fairness and a fair go.

[72] Also, I find that DVG has not sufficiently made out its accusation of fraudulent behaviour by Mr Smith. The lack of CCTV evidence and the lack of a written direction does not provide the level of certainty in the evidence which is required in cases of fraud or theft.

[73] DVG is a large employer with over 40 car yards under its corporate wing. The inappropriate human resources governance and processes cannot be condoned.

[74] I find that Mr Smith’s dismissal was therefore harsh, unjust or unreasonable.

Remedy

[75] The issue of an appropriate remedy is contained in the following sections of the Act;

“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

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.
Note: subsection 392(5) indexed to $66,500 from 1 July 2014
(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.”

[76] Mr Smith is seeking reinstatement and financial compensation.

[77] Mr Bellucci submitted that the employment relationship has irretrievably broken down between DVG and Mr Smith. He argued that there needs to be a relevant level of trust between the employer and the employee in these types of businesses and that DVG had no trust in Mr Smith.

[78] Whilst reinstatement is the primary remedy identified in the Act for successful unfair dismissal applications, I find that such an order would be inappropriate in this circumstance. It is evident that there is little trust in existence between Mr Smith and DVG.

[79] I find that the appropriate remedy is the payment of compensation in accordance with section 390(3)(b) of the Act.

[80] I note that Mr Smith received a week in lieu of notice when he was dismissed on 25 March 2015. I have taken this into account.

[81] I also note that Mr Smith sent an offensive text message to his Manager and ignored a lawful direction from his Manager to remain on site. These incidents would have resulted in significant and appropriate disciplinary action against Mr Smith. As a result, I do not believe that Mr Smith would have remained employed by DVG for a lengthy period. I have taken this into account.

[82] Taking into account the above issues, I have decided to award Mr Smith four weeks’ pay plus superannuation.

[83] An Order for this amount will be released concurrently.

COMMISSIONER

1 Exhibit B3

2 Transcript PN 536

3 Exhibit B9

4 PN760

5 [1999] FCA 1836

6 [1999] FCA 1836 at para 6 - 7

7 (1995) 185 CLR 410

8 (1990) 27 FCR 427

9 (1995) 185 CLR at 467

10 (1995) 185 CLR 410 at 465 - 468

11 (1938) HCA 34

12 [1992] HCA 66

13 PR922612

14 (2000) 98 IR 137

15 PR971685

16 Exhibit B8 pm16-18

17 (2000) 98 IR 137

18 [1992] HCA 66

19 PR922612

Printed by authority of the Commonwealth Government Printer

Nigel Smith v Buick Holdings Pty Ltd T/A DVG Automotive Group Midland City

[2015] FWC 6900

21 OCTOBER 2015

DECISION