Paul O'Brien v The Trustee for Print Warehouse Australia Trust T/A Print Warehouse

[2015] FWC 8232

[2015] FWC 8232

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Paul O’Brien
v
The Trustee for Print Warehouse Australia Trust T/A Print Warehouse
(U2015/10976)

COMMISSIONER BISSETT MELBOURNE, 3 DECEMBER 2015

Application for relief from unfair dismissal - performance - compensation.

[1] Mr Paul O’Brien has made an application to the Commission seeking relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act). Mr O’Brien was employed by The Trustee for Print Warehouse Australia Trust T/A Print Warehouse (PW). 1

[2] Mr O’Brien commenced with PW on 20 October 2014. His employment was terminated on 24 July 2015 for poor performance for failing to meet sales targets.

[3] Mr O’Brien says that he was never provided with written sales targets, he was never informed that he was failing to meet his targets, he was not issued with any formal warnings with respect to not meeting his purported targets and he was not provided with any substantive assistance to assist him in performing his job.

[4] For these reasons Mr O’Brien says that he was unfairly dismissed.

[5] Mr O’Brien was represented with permission by Mr Richardson. Print Warehouse was represented by Mr Rohan Singh.

Evidence

Mr O’Brien

[6] Mr O’Brien was referred to PW by JDA, a recruitment company specialising in the printing industry. Mr O’Brien was interviewed for and was subsequently offered the position of Account Manager. Mr O’Brien says that at no time in his interview did Mr Singh discuss sales targets with him. Mr O’Brien says that he never saw any information from JDA that indicated sales targets for the position.

[7] Mr O’Brien signed a contract and commenced employment on 20 October 2014. His role was to source new accounts for PW. In this he was required to identify and develop new printing opportunities in Victoria.

[8] Mr O’Brien’s contract of employment indicated that he would be set monthly sales targets and that if he failed to reach these over three successive months his employment would be subject to review. He was placed on a six month ‘trial period’ (which I take to be probation) and his contract indicated that his performance and conduct would be reviewed during this period. Subject to satisfactory performance his employment would be confirmed at the end of the six month period.

[9] At the expiration of the six month period in April 2015 Mr O’Brien was not advised that his performance was unsatisfactory, continued to work and assumed his employment was confirmed.

[10] Mr O’Brien says that in about January 2015 he had a discussion with Mr Singh in which Mr Singh indicated that he thought Mr O’Brien should be ‘selling’ about $25,000 per month of new business. Mr O’Brien says he explained to Mr Singh that this would be difficult. Mr O’Brien says that Mr Singh never spoke to him of a $60,000 or $100,000 per month sales target.

[11] Mr O’Brien says that he was never told by Mr Singh that if he failed to achieve a particular target his employment was in jeopardy. Further he says he was given no formal warnings that he was failing to meet the required standard but was asked to achieve more sales.

[12] On 24 July 2015 Mr O’Brien attended a meeting as requested with Mr Singh. He says at the meeting Mr Singh that he was being finished up that day. He says the meeting went for two minutes.

Mr Singh

[13] Mr Singh says that when he employed Mr O’Brien he was looking for a sales person to generate new business.

[14] Mr Singh says that he had regular meetings with Mr O’Brien where they would discuss Mr O’Brien’s progress but admits he did not document these meetings.

[15] Mr Singh says he decided to dismiss Mr O’Brien because he was not achieving the level of sales that was expected. He agreed that the dismissal meeting was short because he had already decided to dismiss Mr O’Brien prior to the meeting. He said he had already made the decision because he had heard the same story from Mr O’Brien on a number of occasions that he had some clients ‘on the horizon’ but these never eventuated.

[16] Mr Singh says that in the first three months of Mr O’Brien’s employment he wanted to see who Mr O’Brien was contacting. After that he says every time he met with Mr O’Brien he had his sales figures. These reports formed the basis of the commission payments due to Mr O’Brien under his contract.

[17] Mr Singh says that Mr O’Brien never told him that a target of $25,000 was not achievable, he did tell Mr O’Brien he was not meeting his targets and that his employment was under threat if he did not meet the targets.

[18] Mr Singh says that in May 2015 he told Mr O’Brien he was considering terminating his employment but Mr O’Brien convinced him to not do so. This meeting was not documented. In June he says he told Mr O’Brien that he would have to see something soon or would terminate his employment, this was also not documented. In July Mr Singh decided to terminate Mr O’Brien’s employment.

[19] Mr Singh agrees that the meeting in which he terminated Mr O’Brien’s employment was short (although suggests it went for 3-4 minutes). He agreed in cross examination that he was not interested in what Mr O’Brien had to say and that he went into the meeting with the intention of terminating his employment. Mr Singh says he handed the letter of termination to Mr O’Brien at the meeting. Mr Singh says that he did not stand up during the meeting but was seated as was Mr O’Brien.

Maneka Adikari

[20] Ms Adikari is an employee of PW. She worked in the same office as Mr O’Brien. She gave evidence with respect to what she observed in the meeting room when Mr Singh and Mr O’Brien met.

[21] I have not had regard to the evidence of Ms Adakiri. She appeared to be confused as to dates but, in any event, her evidence adds very little to the matters I am required to consider.

Was Mr O’Brien unfairly dismissed?

[22] I am satisfied that Mr O’Brien is protected from unfair dismissal. He has been dismissed, PW is not a small business and the dismissal was not a redundancy.

[23] To determine if Mr O’Brien was unfairly dismissed it is necessary to consider if his dismissal was harsh, unjust or unreasonable. The matters which must be taken into account in making such a decision are set out in s.387 of the Act.

Section 387(a) was there a valid reason for dismissal relating to capacity or conduct

[24] For there to be a valid reason for a dismissal it must be ‘sound, defensible and well-founded.’ 2

[25] In this case I am not satisfied that Mr Singh ever clearly set targets for Mr O’Brien. I am satisfied that Mr O’Brien never saw the Job Brief Specification between JDA and PW 3 (referred to as BPA Print Group in the documentation). Whilst page 5 of that document does set out some targets this is not a document provided to Mr O’Brien or raised with Mr O’Brien by either JDA or Mr Singh.

[26] Further I am satisfied that targets were only spoken of generally and a specific target was only discussed once to Mr O’Brien. I accept however that Mr O’Brien was from time to time exhorted to achieve greater sales.

[27] Given that targets were never specifically provided to Mr O’Brien it is difficult to find that dismissal for failing to achieve something he did not know about provides a valid reason for his dismissal.

[28] That Mr O’Brien had experience in the printing industry (which was not disputed) does not mean he should have had some sixth sense as to the targets that might be established by Mr Singh.

[29] There is no suggestion Mr O’Brien was dismissed for reasons to do with his conduct.

[30] I therefore find that there is no valid reason for the dismissal of Mr O’Brien.

Section 387(b) whether the person was notified of the reason

[31] Even if I am wrong and Mr O’Brien was set targets and the failure to meet the purported targets provides a valid reason for dismissal I am not satisfied that Mr O’Brien was advised of that reason prior to his dismissal.

[32] In Crozier v Palazzo Corporation Pty Ltd 4 the Full Bench said:

[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG (3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment…

[33] Mr Singh agreed that he had made the decision to terminate Mr O’Brien’s employment prior to the meeting. On the evidence of Mr Singh the meeting went for four minutes at most. Clearly Mr O’Brien was not notified of the reason for his dismissal prior to any final decision being made.

[34] Whilst Mr Singh says that he told Mr O’Brien in May he was intending to terminate his employment because he failed to reach the sales target I do not accept that this constitutes notification of the reason for dismissal. Whilst I remain sceptical that firm targets were set for Mr O’Brien I do not believe that Mr Singh at any time told Mr O’Brien that failure to meet the targets could result in his dismissal.

Section 387(c) Opportunity to respond

[35] I am satisfied on the evidence of both Mr O’Brien and Mr Singh that Mr O’Brien was not given an opportunity to respond to the reason for his termination. Mr Singh agrees that he had made his decision prior to the meeting and that the meeting went for a very short time because he had already made up his mind.

Section 387(d) unreasonable refusal to allow a support person

[36] I accept that Mr O’Brien did not seek a support person. To an extent this is attributable to the fact that he was not aware of the purpose of the meeting on 24 July 2015 when his employment was terminated.

[37] It may well be argued that, in not advising of the purpose of the meeting Mr Singh did, by his actions, unreasonably refuse Mr O’Brien access to a support person. This was not subject to detailed submissions before me so I take it no further.

Section 387(e) whether any warnings were given of unsatisfactory performance

[38] I am satisfied that Mr O’Brien was aware of his performance and that Mr Singh provided him with regular reports with respect to his sales. This is the information on which Mr O’Brien’s commission was paid and I am confident that Mr O’Brien had an interest in his pay such that he took note of the sales he made.

[39] This, however, should not be confused with warnings given to him about his performance.

[40] Whilst I accept that Mr Singh encouraged Mr O’Brien to improve his sales performance this does not amount to a warning of the consequences of failing to improve.

[41] Further, I am satisfied that little support was provided to Mr O’Brien to help him improve to the standard required. On this matter I accept that Mr Singh may well have thought he was employing a highly experienced person in sales who was bringing with him to the job a partly established client base but certainly the skills necessary to help grow the business.

[42] Again, however, this is not excuse for a failure to clearly establish targets for Mr O’Brien, monitor him against these targets or to provide feedback and support to assist him.

[43] Ultimately it was Mr Singh’s responsibility to ensure Mr O’Brien was aware of the performance standards required of him and the consequences of a failure to perform. This did not occur.

Section 387(f) and (g) the size of the employer’s business and access to HR expertise

[44] PW is not a small business as defined by the Act. Despite this it does not have access to human resource expertise. Whilst this may have affected the procedures in relation to the dismissal I agree with the submissions for Mr O’Brien that the size of the business is no excuse for the lack of due process surrounding the dismissal.

[45] Mr Singh mentioned in his submissions of how few dismissal disputes his company has been involved in over many years of operation. If that is the case then he should be better aware of how to deal with such matters in a way that shows respect and affords the employee some dignity. No one would ever suggest that a meeting that went for four minutes met any reasonable standard on how to deal with the dismissal of an employee for performance reasons.

Section 387(h) any other matters

[46] Mr O’Brien is 65 years old. In this respect the dismissal has been particularly hard on him as his capacity to find further work is limited.

Conclusion

[47] For all of the reasons given above I am satisfied that the termination of employment was harsh, unjust or unreasonable.

[48] I therefore find that Mr O’Brien was unfairly dismissed.

[49] During the hearing Mr Singh recognised that he had failed to properly document matters associated with Mr O’Brien’s targets, performance and dismissal. It is, hopefully, not an error he will make in the future. Such documentation is not to be seen as a mere administrative nuisance but enables both an employer and employee to monitor in an objective manner performance and progression against documented standards.

Remedy

[50] Mr O’Brien seeks reinstatement but, if that is not possible, maximum compensation.

[51] In considering a remedy for Mr O’Brien I am satisfied that he is protected from unfair dismissal and that he has been unfairly dismissed.

[52] Whilst I appreciate that Mr O’Brien seeks reinstatement I am not convinced that reinstatement is appropriate in these circumstances.

[53] PW’s office in Melbourne is small – apart from Mr O’Brien there was one other account manager whose focus was on an existing customer base. Further, there is evidence that Mr O’Brien and Mr Singh have substantially different views on how to develop new business and how quickly this could be achieved. Mr O’Brien expressed the view that a target of $25,000 per month was not, at the time it was discussed or in the near future, achievable when he was starting from a zero base. This needs to be balanced against the needs of PW and Mr Singh who wanted targets well in excess of this amount as set out in the JDA Job Specification brief. 5 In an environment where Mr O’Brien’s role was to develop new business and report to Mr Singh and where views on something so fundamental as targets varied so widely I am not convinced that reinstatement into a small office will result in a productive and harmonious working relationship.

[54] For these reasons I do not consider reinstatement appropriate.

[55] I will therefore consider compensation.

[56] PW have not made any submissions that any particular order of compensation would have an effect on the viability of the enterprise. I am therefore satisfied that the amount of compensation I have ordered will not have an effect on the viability of the business.

[57] Mr O’Brien was employed by PW for nine months. I am satisfied that Mr O’Brien would have remained with PW for no more than a further six months. There did appear to be a difference in attitude and perspective of what could and could not be achieved in developing new business for PW such that I do not consider that the employment relationship would have continued for a sustained period. I have also taken into account Mr Singh’s evidence that Mr O’Brien’s oft times response to questions of his level of sales was that he had prospects on the horizon. I have also taken into account that Mr Mark Singh (Mr Singh’s father and company owner) apparently had concerns about Mr O’Brien’s performance some months prior to dismissal.

[58] Mr O’Brien was earning $40,000 plus a $13,000 per year car allowance and a 3% commission paid on sales. On the basis of the evidence before me I am satisfied that the car allowance was to reimburse Mr O’Brien the costs of using his own car for work purposes. This finding is supported by an uncontested evidence of a conversation Mr Singh says he had with Mr O’Brien in May 2015 where he told Mr O’Brien that he might have to consider reducing his car allowance as he was in the office 95% of the time. As the $13,000 was to reimburse for the costs of the use of his car it is not appropriate that it be considered in determining compensation. 6 Mr O’Brien’s lost remuneration, had he not been dismissed is therefore $20,000 plus 9.5% superannuation.

[59] I have reduced Mr O’Brien’s lost remuneration by 5% for contingencies. There are no grounds on which I could conclude a greater figure is required.

[60] Mr O’Brien has not earned any income since his employment was terminated. In his evidence he said that he has been attempting to secure part time work, not necessarily in the printing industry, he has been in contact with JDA (the recruitment company through which he secured his position with PW) but has not asked them to look for work for him and has not been in touch with any other employment agencies. Mr O’Brien said in evidence that he has gone onto Seek.com and looked in the newspaper but has not found anything he wants to apply for because he is attempting to get part time work.

[61] In these circumstances I am not convinced Mr O’Brien has been seriously attempting to mitigate his loss. His evidence of attempts to secure other work do not suggest that he has focussed in any meaningful way on attempting to find alternative employment. For this reason I will reduce the amount of lost remuneration by 50%.

[62] No deduction needs to be made for misconduct as this was not the basis of the termination of Mr O’Brien’s employment and no amount has been included for shock, humiliation and distress.

[63] Taking all of these matters into I will order that Mr O’Brien be paid an amount of $9,500 plus 9.5% superannuation compensation within 21 days. This amount does not exceed the compensation cap.

[64] An order to this effect will be issued with this decision.

COMMISSIONER

Appearances:

B. Richardson for the Applicant.

R. Singh for the Respondent.

Hearing details:

2015.

Melbourne:

November 17.

 1   The Respondent’s name was changed following the receipt of further information from the Respondent to properly reflect the business name.

 2   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371.

 3   Exhibit A1, attachment 2.

 4 (2000) 98 IR 137.

 5   Exhibit R1, annexure 2.

 6   See Cigarette and Gift Warehouse v Kim Evans[2015] FWCFB 4030, [43].

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