Peter Leo v Camperagent RV Centre Adelaide Pty Ltd T/A Camperagent RV Centre Adelaide
[2017] FWC 6171
•22 NOVEMBER 2017
| [2017] FWC 6171 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Peter Leo
v
Camperagent RV Centre Adelaide Pty Ltd T/A Camperagent RV Centre Adelaide
(U2017/9198)
COMMISSIONER PLATT | ADELAIDE, 22 NOVEMBER 2017 |
Application for an unfair dismissal remedy –– no valid reason – dismissal harsh, unjust and unreasonable – reinstatement not appropriate – compensation awarded.
Summary
[1] On 24 August 2017, Mr Peter John Leo lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal by his former employer Camperagent RV Centre Adelaide Pty Ltd T/A Camperagent RV Centre Adelaide (Camperagent).
[2] Mr Leo contends that he was engaged by Camperagent as Service Manager on 30 January 2017 and was dismissed because the ‘company was going in a different direction’ on 1 August 2017 with his last day of employment being 18 August 2017.
[3] Mr Leo was on a salary of $72,500 per annum.
[4] There was no suggestion that Mr Leo was not a person protected from unfair dismissal.
[5] Camperagent contends that throughout Mr Leo’s employment it raised with him issues concerning his performance. On 1 August 2017, Mr Leo is alleged to have raised his voice and yelled at staff before slamming doors. Mr Munro dismissed Mr Leo as the business was going in a different direction.
[6] Camperagent contends that the decision to terminate Mr Leo’s employment was not harsh, unjust or unreasonable.
The Determinative Conference
[7] A Determinative Conference was conducted on 22 November 2017.
[8] Mr Leo represented himself. Camperagent was represented by Mr Christopher Mahoney from the Motor Trade Association of South Australia.
[9] Mr Leo provided a witness statement, 1 and gave evidence on his own behalf.
[10] Camperagent provided witness statements and led evidence from Mr Daniel Munro (Owner and Director) 2 and Mr John Munro (Owner and Director).3
[11] At the end of the determinative conference, I read my decision on transcript. These are the edited formal reasons for my decision.
The Witness Evidence
Peter Leo
[12] Mr Leo’s relevant evidence is summarised as follows.
[13] Mr Leo is 63 years old and participated in a job interview with Mr John Munro and Mr Daniel Munro on 12 January 2017. Mr Leo was advised that the Camperagent business had grown too quickly and they needed help to get the business performing in the service department. There was no job description for the role offered.
[14] At a meeting on 25 January 2017, Mr Leo advised Mr John Munro and Mr Daniel Munro that the business needed some structure, clear directions and role descriptions. Mr Daniel Munro said that role was a huge task and that six months would be required to see the fruits of the work.
[15] Mr Leo contends there was general agreement on the ‘course of action’ and a salary of $72,500 was agreed.
[16] Mr Leo commenced full time employment on 30 January 2017.
[17] Mr Leo prepared a job description 4 for his role. This was emailed to Mr Daniel Munro who verbally agreed to it in February 2017. The job description provides as follows:
“• Coordinate and carry out management of Service Department.
• Manage sick leave, RDOs, annual and personal leave to ensure work flow is maintained to the satisfaction of customers.
• Maintain a clean and safe workspace, and abide by workplace health and safety policies and procedures.
• Open premises in the morning in a timely manner to enable all employees to commence work at the allotted time.
• Secure premises at closing time and activate alarm system.
• Roster staff for weekend work.
• Manage workloads through implementation of procedures through application of technological change to minimize effort of personnel
• Take action to implement management system of Spare parts division and implement annual stock take of all parts.
• Manage Warranty Division to ensure profitable and timely delivery of insurance and warranty jobs.
• Provide managerial support for items requiring statutory compliance i.e. Fire safety and OHS issues.
• Provide technical support to payroll Officer
• Manage projects as directed by management that require technical input for construction or maintenance issues.”
[18] Whilst there were written descriptions of how things worked from a workflow perspective, there were no formalised procedures of work methodology or performance measures.
[19] Management meetings were held every Tuesday where Mr John Munro, Mr Daniel Munro and CFO Ms Jane Brown (nee Munro) were present.
[20] Whilst Mr Leo was told the Service Division was unprofitable, he was not given any financial data.
[21] On or about 3 July 2017, Mr John Munro and Mr Daniel Munro had a meeting with Mr Leo and advised that a new Service Manager, Mr Danciu was starting the following day. Mr Leo was told it was nothing to do with his performance but they needed someone with more caravan experience to get the workshop moving.
[22] Mr Leo was not told how he would be impacted by the appointment of Mr Danciu.
[23] Mr Leo was required to train Mr Danciu on the performance of his role.
[24] Mr Leo made no reference to any workplace dispute on 1 August 2017 in his statement.
[25] Mr Leo was originally given such notice that his last day of work would be 25 August 2017, but determined to cease work earlier as he felt humiliated by Camperagent’s actions towards him.
[26] Mr Leo did not seek reinstatement, preferring compensation.
[27] Mr Leo took a planned holiday post dismissal and has applied for five other roles. Mr Leo has not yet found employment.
Daniel Munro
[28] Mr Daniel Munro submitted a witness statement 5 and gave evidence.
[29] Mr Daniel Munro is one of the owners of Camperagent and is also a Director. His duties within the business include managing the technical and service aspects of the business and he is the Dealer Principal.
[30] Since 1996 Camperagent had grown from a two person operation to employing more than 50 staff.
[31] In early 2017, Camperagent advertised for a Service Manager on Seek. 6 The Service Manager was described as the head of the service department which comprised of a team of technicians who performed insurance repairs, caravan servicing, mechanical servicing and preparation/detailing for new and used caravans and motorhomes for sale. The service department also took care of all caravan and RV customer handovers plus sales of RV accessories and parts.
[32] On 12 January 2017, Mr Daniel Munro and Mr John Munro interviewed Mr Leo for the Service Manager role. Mr Leo represented that he could source and implement a new computer management system which would lead to greater efficiencies in the service side of the business.
[33] Mr Leo was employed as Service Manager on a salary of $72,500 per annum commencing on 30 January 2017. No written contract of employment was prepared or agreed.
[34] Mr Leo, Mr Daniel Munro and Mr John Munro met fortnightly to discuss operations. These meetings were informal and minutes were not kept.
[35] In May 2017, Mr Daniel Munro formed the view that Mr Leo was out of his depth and unable to perform the fundamental duties of the Service Manager role. Mr Leo was spending a lot of time writing and rewriting position descriptions, worrying about the management of staff not under his supervision, trying to organise office cleaning and otherwise pursuing tasks not required of him. When this was raised with Mr Leo he became defensive.
[36] Mr Leo did not implement the computer system discussed prior to his employment.
[37] Due to the inability of Mr Leo to perform his role, in early July 2017 Mr Danciu was appointed to the position of Head of the Service Department.
[38] Following the appointment of Mr Danciu, Mr Daniel Munro intended to dismiss Mr Leo, but owing to business volume and the illness of his brother John, the matter was not discussed.
[39] On 1 August 2017, Mr Daniel Munro was advised by Mr Danciu that Mr Leo was acting unprofessionally by yelling at members of staff and slamming doors. Mr John Munro was asked to deal with the issue.
[40] Mr John Munro later informed him that he had dismissed Mr Leo.
[41] Mr Daniel Munro contends that Mr Leo failed to complete the duties assigned to him during the notice period.
[42] At the time of the dismissal Camperagent did not have in house human resources expertise.
John Munro
[43] Mr John Munro is one of the owners of Camperagent and is also a Director. His duties within the business include managing the sales, marketing and any human resource requirements.
[44] Mr John Munro gave evidence that in early 2017 Camperagent required a Service Manager to assist with workflow management in the service side of the business, this included the need to review and integrate IT technology into the service aspects to allow for faster processing of warranty claims and registration/title transfer of sales.
[45] On 12 January 2017, Mr Daniel Munro and Mr John Munro interviewed Mr Leo for the Service Manager role. Mr Leo represented that he could source and implement a new computer management system which would lead to greater efficiencies in the service side of the business.
[46] Mr Leo, Mr Daniel Munro and Mr John Munro met fortnightly to discuss operations. These meetings were informal and minutes were not kept.
[47] In May 2017, Mr John Munro formed the view that Mr Leo was out of his depth and unable to perform the fundamental duties of the Service Manager role. Mr Leo was spending a lot of time writing and rewriting position descriptions, worrying about the management of staff not under his supervision, trying to organise office cleaning and otherwise pursuing tasks not required of him. When this was raised with Mr Leo, he became defensive.
[48] On 15 June 2017 Ms Joanne Excell, the Insurance and Warranty Manager, emailed him concerning a complaint that Mr Leo had become unapproachable and a further complaint about Mr Leo’s failure to deal with a customer complaint.
[49] Mr John Munro raised this with Mr Leo who said words to the effect of ‘Ms Excell doesn’t understand the bigger picture’.
[50] In early 2017, as a result of Mr Leo’s performance, Mr Danciu was appointed Head of the Service Department.
[51] Mr Leo refused to work with Mr Danciu.
[52] On 1 August 2017, Mr John Munro was advised by Mr Danciu that Mr Leo was acting unprofessionally yelling at members of staff and slamming doors.
[53] Upon approaching the department, Mr John Munro heard a door slam, and saw Mr Leo who appeared to be flustered and irritated.
[54] Mr John Munro asked Mr Leo to step outside and said words to the effect of ‘Look we can’t continue. We are going to have to end your employment and move in a different direction.’
[55] Mr Leo said, ‘There goes my holiday.’
[56] Mr John Munro ascertained that Mr Leo’s holiday was due to commence on 25 August 2017, and agreed a notice period that would extend until the commencement of the holiday.
[57] Mr Leo was then instructed to resume work and given a list of duties to perform.
[58] Camperagent tendered a number of emails to and from Mr Leo which it contended demonstrated the performance deficiencies. 7
Consideration
[59] Mr Leo was responsible for the management of the service team as described in the Seek advert.
[60] From the evidence and exhibits submitted, I accept that there were a range of issues with internal and external communications and coordination between and within the sales and service teams. As a result, there were a number of customer complaints and adverse social media comment.
[61] It appears that Mr Leo had a poor relationship with some of his work colleagues which resulted in complaints about his conduct and management style.
[62] Whilst Mr John Munro and Mr Daniel Munro discussed these issues with Mr Leo, these conversations were very informal and I accept that Mr Leo did not perceive them as so critical of his performance that his continued employment was at risk.
[63] On 12 April 2017, Mr John Munro sent an email to all staff 8 which described his concern with a range of issues across the business. Whilst the email did not detail specific events, it was blunt in seeking a rethink of how customers were serviced, and should have served as a warning to Mr Leo that there was a crisis and as a manager he should have addressed the matters.
[64] Mr Leo considered that his work performance was satisfactory and did not believe any change was required. I formed the impression that when presented with issues, Mr Leo focused on the symptoms rather than the root cause, as a manager this approach is not acceptable. Having witnessed Mr Leo in the hearing, I can understand why Camperagent formed the view that Mr Leo was out of his depth.
[65] I accept that Mr Leo was not performing at the level required of a Service Manager and that Camperagent had a reasonable basis to performance manage him.
[66] Unfortunately Camperagent did not performance manage Mr Leo in manner which would have made their concerns obvious. Undocumented, general discussions are insufficient to constitute a warning.
[67] I find that the discussions held by Mr Daniel Munro and Mr John Munro were not such so as to alert Mr Leo that his performance was substandard to the point his employment was at risk.
[68] Mr Leo was accused of being involved in an altercation with other staff members on 1 August 2017, where he yelled at staff and slammed a door. No witnesses to this event were called. Mr Leo denied yelling or slamming doors. The only evidence before me is hearsay. The fact that Mr Leo was observed by Mr John Munro as flustered and/or irritated is not evidence of the conduct alleged. I am not persuaded that Mr Leo engaged in the conduct described on 1 August 2017.
[69] Camperagent contended that Mr Leo’s conduct after he was advised of his dismissal on 1 August 2017 also formed the basis for his dismissal. In particular it is alleged that Mr Leo failed to tag and test all electrical equipment and as a result Camperagent failed a subsequent audit. Whilst Mr Leo was given a list of tasks to perform whilst he was serving his notice, 9 the requirement to ‘finalise OHSW’ does not sufficiently detail an obligation to tag and test. I am not satisfied that Mr Leo engaged in misconduct post dismissal, but prior to the end of his employment, such that it could form part of the valid reason to dismiss him.
[70] On 1 August 2017, Mr Leo was advised that his employment would end as the company was going to move in a different direction, no mention was made of any issues relating to Mr Leo’s performance or conduct.
Was the dismissal harsh, unjust or unreasonable?
[71] Pursuant to s.387 of the Act, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:
“(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
Valid reason - s.387(a)
[72] Notwithstanding its formulation under a different legislative environment, I have adopted the definition of a valid reason set out by Northrop J in Selvachandran v Peteron Plastics Pty Ltd10which requires the reason for termination to be ‘sound, defensible or well founded.’
[73] I find that Mr Leo was dismissed because of Camperagent’s view that his performance was not at the level required of a Service Manager and because of his poor relationships with staff. This was a valid reason pursuant to s.387(a) of the Act.
Notification of valid reason - s.387(b)
[74] I find that Mr Leo was not informed of the reason for his dismissal.
Opportunity to respond - s.387(c)
[75] I find that Camperagent did not provide an opportunity for Mr Leo to respond to the allegations.
Any unreasonable refusal by the employer to allow Mr Leo to have a support person present to assist at any discussions relating to dismissal - s.387(d)
[76] Whilst Mr Leo did not request a support person the process prevented such a request from being made.
Warnings relative to unsatisfactory performance - s.387(e)
[77] Whilst I accept that concerns in relation to the operation of the business were discussed between Mr John Munro, Mr Daniel Munro and Mr Leo the informality and lack of detail as to the performance requirements and the consequences of failure are such that I am unable to characterise these conversations as performance warnings and, accordingly, I find that Mr Leo was not subject to any warnings in respect of his alleged unsatisfactory performance.
Size of the employer’s enterprise and absence of dedicated human resources support - ss.387(g) and (f)
[78] Camperagent does not have a dedicated human resources management specialist. Whilst Mr John Munro has the HR responsibility, he did not appear to have any expertise in this area.
Other matters considered relevant - s.387(h)
[79] There are no other relevant matters.
Conclusion
[80] The Explanatory Memorandum to the Act11 explains the approach of the Commission in considering the elements of section 387:
“FWA must consider all of the above factors in totality. It is intended that FWA will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.”
[81] In Byrne and Frew v Australian Airlines Pty Ltd,12 the following observations made by McHugh and Gummow JJ are relevant to my conclusion:
“It may be that the termination is harsh but not 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.”
[82] Having considered each of the factors detailed in s.387 of the Act, I have concluded that the termination of Mr Leo’s employment was harsh, unjust and unreasonable.
Remedy
[83] The relevant provisions of Division 4 of Part 3-2 of the Act state:
“Division 4—Remedies for unfair dismissal
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.
…
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.”
[84] The prerequisites contained in ss.390(1) and (2) of the Act have been met in this case.
[85] Mr Leo did not seek reinstatement and I am satisfied that it is not appropriate in this case.
[86] Section 390 of the Act makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances.
[87] I now turn to whether compensation in lieu of reinstatement is appropriate.
[88] A Full Bench in McCulloch v Calvary Health Care Adelaide13 confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg v Paul’s Licensed Festival Supermarket14 remains appropriate.
[89] Section 392(2) of the Act requires the Commission to take into account all of the circumstances of the case including the factors that are listed in subsections (a) to (g). Without detracting from the overall assessment required by the Act,15 it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.
The effect of the order on the viability of the employer - s.392(a)
[90] There was no submission that any order of compensation would impact the viability of Camperagent.
The length of Mr Leo’s service with the employer - s.392(b)
[91] Mr Leo was employed for a period of six months and 18 days.
The remuneration Mr Leo would have received, or would have been likely to receive, if he had not been dismissed - s.392(c)
[92] This involves a consideration as to how long Mr Leo would have remained in the employ of Camperagent but for the dismissal.
[93] Mr Leo held the view that his work performance was appropriate and no change was needed, but had he been advised that his role was in jeopardy he would have sought to address the matter. Mr Leo’s responses at the hearing indicated that he focused on the symptoms of the issues presented rather than addressing the root cause. In my view, a continuation of this approach would most likely have prevented Mr Leo from meeting the requirements of his position even if he were given an opportunity to address the performance deficit.
[94] In my view, it would be reasonable to assume that Mr Leo would have remained in employment for a further 5 weeks including a period of notice.
The efforts of Mr Leo to mitigate the loss suffered by him because of the dismissal - s.392(d)
[95] Whilst Mr Leo has not secured alternative employment, I am satisfied that he has made a reasonable attempt to do so.
Remuneration earned by Mr Leo during the period between the dismissal and the making of the order for compensation and the amount of any income likely to be earned by Mr Leo during the period between the making of the order for compensation and the actual compensation - ss.392(e) and (f)
[96] Mr Leo has not earnt any money since the dismissal.
Any other matter that the Commission considers relevant and the remaining statutory parameters - s.392(g)
[97] I do not accept that Mr Leo’s conduct during the notice period was such that it could be characterised as ‘misconduct’ and accordingly no deduction will be made on this basis.
[98] Whilst Camperagent paid Mr Leo more notice than is required by the Act, I do not find that this is an appropriate basis upon which to reduce the award of compensation.
[99] In accordance with s.392(4) of the Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal.
[100] The maximum compensation limit in this case would be the lesser of 26 weeks remuneration or half the high income threshold immediately before the dismissal.16 The amount of compensation awarded is less than this limit.
[101] Taxation is to be paid on the amount determined.
[102] I believe that the compensation detailed below is appropriate having regard to all of the circumstances of this matter and the considerations specified by the Act.17
[103] I award compensation in the amount of $6,971.15 which represents the amount Mr Leo would have been paid if he had continued to work at Camperagent for a period of 5 weeks at a weekly wage of $1,394.23 gross.
[104] An Order 18 reflecting this decision will be issued.
COMMISSIONER
Appearances:
Mr P.Leo the Applicant.
Mr C.Mahoney of the Motor Trade Association of South Australia for the Respondent.
Hearing details:
2017.
Adelaide:
November 21.
1 Exhibit A1
2 Exhibit R2
3 Exhibit R7
4 Exhibit A3
5 Exhibit R1
6 Exhibit R2
7 Exhibits R11, R12, R13, R14, R15, R16, R17, R18
8 Exhibit R12
9 Exhibit A5
10 (1995) 62 IR 371 at 373
11 Explanatory Memorandum to the Fair Work Bill 2008
12 Byrne and Frew v Australian Airlines Pty Ltd [1995] HCA 24
13 [2015] FWCFB 873
14 (1998) 88 IR 21. See also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431
15 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446
16 Section 392(5) of the Act
17 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at par [32]
18 PR597981
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