Rodney Maclure v Stottys Pty Ltd T/A Victor Tyrepower

[2014] FWC 6041

[2014] FWC 6041

FAIR WORK COMMISSION

DECISION

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

Rodney Maclure
v
Stottys Pty Ltd T/A Victor Tyrepower
(U2013/2871)

DEPUTY PRESIDENT ASBURY BRISBANE, 3 SEPTEMBER 2014

Application for unfair dismissal remedy - Jurisdiction - Small Business Fair Dismissal Code - Whether the dismissal was unfair - Remedy - Compensation.

[1] Mr Rodney Maclure applies under s.394(1) of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to his dismissal by Stottys Pty Ltd T/A Victor Tyrepower (Victor Tyrepower). Victor Tyrepower initially objected to the application proceeding to arbitration on the jurisdictional ground that Mr Maclure had not completed the minimum employment period required by s.382 of the Act at the date of his dismissal. Commissioner Spencer resolved this issue 1 and dismissed the jurisdictional objection on the basis of a finding that Mr Maclure was employed from at 30 March 2012 until 15 August 2013.

[2] Mr Maclure represented himself in these proceedings. Victor Tyrepower was represented by its proprietor and manager Mr Stott.

[3] In relation to the matters I am required to have regard to under s.396 of the Act, the application was made within the period required by the Act, Mr Maclure is a person protected from unfair dismissal and there is no issue of genuine redundancy.

[4] Mr Maclure asserts that he was dismissed without being given a warning and that he has never had any issues with his conduct or work performance. Mr Stott maintains that Mr Maclure was dismissed for being argumentative in front of customers and because he was physically unable to do the work he was employed to do, or was too slow.

[5] Victor Tyrepower is a small business employer and it is necessary for me to determine whether Mr Maclure’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code) and if I find that it was not, to then consider whether the dismissal was harsh, unjust or unreasonable having regard to the criteria referred to in s.387 of the Act.

The Small Business Fair Dismissal Code and relevant legislative provisions

[6] By virtue of s.385 of the Act, a person has been unfairly dismissed if the Commission is satisfied that:

(a) the person has been dismissed;
(b) the dismissal was harsh, unjust and unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.

[7] The Small Business Fair Dismissal Code is provided for in s.388 of the Act, as follows:

“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.”

[1] The terms of the Small Business Fair Dismissal Code were declared by legislative instrument with effect from 1 July 2009. Those terms are as follows:

“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, than 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 either 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 may be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia. Evidence may include a completed check list, copies of written warning(s), a statement of termination or signed witness statements.”

[2] The Code provides for two kinds of dismissal - summary dismissal on the grounds of serious misconduct, and other dismissal on the basis of conduct or capacity to do the job. If an employer cannot establish that the requirements of the Code have been met, the dismissal is not consistent with the Code and the Commission is then required to consider whether it was harsh, unjust and unreasonable on the basis of the criteria in s.387 of the Act. Those criteria are:

“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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.”

Evidence and Submissions

[3] As previously noted, and consistent with the decision of Commissioner Spencer, Mr Maclure commenced work at Victor Tyrepower on 30 March 2012. From 3 April 2013 to late June 2013 Mr Maclure was absent from work due to an injury for which he made a claim to WorkCover. That claim was refused. Mr Maclure was notified of his termination of employment, and it was effected, on or about 15 August 2013. 2

[4] In his initial application Mr Maclure said that the reasons given for his dismissal were inadequate work performance unrelated to his physical condition and an argumentative attitude. Mr Maclure disputed these reasons and said that at numerous times during the period of his employment, he acted as an Assistant Manager overseeing the running of the business while Mr Stott was absent. Mr Maclure maintained that there were no issues raised with him during his employment with respect to his conduct, capacity or work performance.

[5] Mr Maclure also said that when he was cleared to return to work on light duties on or around 21 May 2013, he was advised by Mr Stott that there were no light duties to return to, and that if he could not lift tyres then he did not have a job. Mr Maclure said that in a subsequent discussion with Mr Stott on 28 June 2013, Mr Stott told him that he should go on a disability pension. According to Mr Maclure there was no mention in these discussions of any issues with his work performance.

[6] On 15 August 2013 Mr Maclure had a discussion with Mr Stott during which Mr Stott informed him that the business was to be sold and that there would be no job for him. It appears from Mr Maclure’s evidence that this possibility had been discussed previously. Mr Maclure said that he told Mr Stott that he would be entitled to two weeks wages in lieu of notice if the business was sold and his employment was terminated.

[7] The discussion turned into an argument during which Mr Stott informed Mr Maclure that he was too slow and that he argued with customers. Mr Maclure said that he raised issues in relation to amounts owed to him by Mr Stott. Mr Maclure also tendered a hand written letter from Mr Stott disputing that he owed Mr Maclure outstanding wages payments and stating that Mr Maclure’s employment had been terminated due to his attitude and performance.

[8] In written submissions which were also Mr Stott’s witness statement, it was asserted that Mr Maclure had made a fictitious WorkCover claim and that prior to his employment, Mr Maclure had indicated that he had a persistent back complaint but had assured Mr Stott that it would not impede his performance. In those same submissions Mr Stott asserted that he had observed that Mr Maclure, from early in his period of employment, was not physically coping with the position. This in turn affected the speed with which he worked and his mood around colleagues and customers.

[9] Mr Stott also said that he had an offer from persons looking to purchase his business in March 2013 and he informed Mr Maclure on 7 March 2013 that he would not have a job after the sale of the business. The sale of the business did not proceed, but Mr Stott maintained that Mr Maclure’s attitude changed. Mr Stott also said that prior to the proposed sale, he had concerns about Mr Maclure’s work performance, in particular the speed at which he worked, his dealings with work colleagues and arguing with Mr Stott in front of customers.

[10] The records maintained by Victor Tyrepower in relation to Mr Maclure’s employment leave much to be desired. Neither Mr Stott nor Mr Maclure were particularly impressive witnesses. They were argumentative and aggressive in their interactions. Each went out of their way to denigrate the other and to make claims of fraud, forgery and other serious matters which were inconsistent and not substantiated by other evidence during the hearing.

[11] The substance of important conversations between Mr Stott and Mr Maclure regarding warnings concerning performance and notice of termination is contested, as are the dates on which some of those conversations took place. It is clear however that it is not asserted by Victor Tyrepower that Mr Maclure engaged in serious misconduct so that summary dismissal is justified. Accordingly, the relevant provisions of the Code are those dealing with “other dismissal”.

Was Mr Maclure’s dismissal consistent with the Code?

[12] Having considered the evidence and submissions of the parties I have resolved various factual issues relevant to the Code as follows.

[13] In relation to the reason for the dismissal, in his evidence to the Commission Mr Stott made various references to Mr Maclure’s lack of efficiency in completing his tasks and Mr Maclure’s beligerent manner in the workshop, 3 citing instances in early 2013 where, in some cases, customers were witness to Mr Maclure’s confrontational conduct.

[14] Having noted the antagonism with which both Mr Maclure and Mr Stott addressed each other during proceedings, I am satisfied that the working relationship between the parties deteriorated to a very low level and that that antipathy manifested itself in aggressive verbal exchanges at the workplace. I am also satisfied that the working relationship between the parties was unworkable and provided a valid reason for the termination of Mr Maclure’s employment.

[15] I accept Mr Stott’s evidence that Mr Maclure was not capable of performing all required tasks with the requisite speed. Victor Tyrepower is a small business and required the tasks allocated to Mr Maclure to be performed by a properly qualified person. I accept that Mr Maclure was the only employee qualified to perform those tasks.

[16] I am satisfied that there was no prospect of devising a suitable alternative working arrangement between these parties given the antipathy between Mr Maclure and Mr Stott, the record of sub-standard performance and the occasional aggressive attitude of Mr Maclure in front of customers.

[17] Mr Stott provided oral testimony regarding the financial impact of Mr Maclure’s slower performance of key duties. 4 Notwithstanding the lack of corroborative evidence by way of balance sheets or profit and loss statements to substantiate this submission, I am satisfied that Victor Tyrepower’s commercial performance was likely to be adversely affected by Mr Maclure’s physical limitations and aggressive attitude. I am satisfied that, as to attitude and capacity, Victor Tyrepower’s reasons for the termination of Mr Maclure’s employment were valid.5

[18] With respect to the requirement that Mr Maclure be given a reason for his dismissal, I am satisfied that the conversation between Mr Maclure and Mr Stott on 15 August 2013, and the subsequent letter of 16 August 2013, disclosed the reasons for dismissal as required by the Code. However, I am not satisfied that Mr Maclure was warned about these matters in a way that made it clear to him that he was at risk of being dismissed if there was no improvement.

[19] I am satisfied, having considered the inconsistencies in the evidence and submissions of the parties, that there was no formal or final opportunity provided to Mr Maclure to discuss the matters that lead to his dismissal prior to the implementation of the decision to dismiss him. Accordingly as required by the Small Business Fair Dismissal Code, Mr Maclure was not given a reasonable chance to rectify the problem.

[20] In relation to procedural matters there was no formal or final discussion regarding termination of employment and therefore no opportunity for a support person to play a role. Given my previous findings this lack of opportunity was not in compliance with the Code.

[21] On balance, Mr Maclure’s dismissal was not consistent with the Code and it is necessary to consider whether Mr Maclure’s dismissal was unfair, on the basis of the criteria in s.387 of the Act.

Was Maclure’s dismissal unfair?

[22] In relation to s.387(a) I am satisfied that there was a valid reason for Mr Maclure’s dismissal. I accept that he was unable to carry out the inherent requirements of his job and that this was a financially unsustainable situation for the Respondent. I am also of the view that it is more probable than not that Mr Maclure did display aggression on some occasions in front of customers and that his attitude in the workplace was a valid reason for his dismissal. Further, I accept that the relationship between Mr Maclure and Mr Stott had deteriorated to the extent that there was no prospect that agreement could have been reached in relation to alternative working arrangements. This was apparent from their interaction in the hearing of this case, which went beyond the understandable stress of being in a formal hearing.

[23] For the reasons set out above, I accept that Mr Maclure was notified of the reason for his dismissal, by virtue of his conversation with Mr Stott on 15 August 2013 and the letter of 16 August 2013 and that this was sufficient to notification to comply with s.387(b). I do not accept that Mr Maclure was given an opportunity to respond to the allegations as provided in s.387(b). Quite simply at the point that Mr Maclure was dismissed, he was afforded no procedural fairness whatsoever.

[24] In relation to s.387(d) the issue of whether Mr Maclure was refused a support person does not arise, because there were no discussions about his dismissal before it was effected. I do not accept that Mr Maclure was warned about his unsatisfactory performance prior to the dismissal in a manner which would have resulted in him being aware that his continued employment was in jeopardy as provided in s.87(e), or given him an opportunity to improve his work performance.

[25] I am satisfied and find that the procedures adopted by Victor Tyrepower in effecting the dismissal were inadequate. However, in terms of s.387(f) and (g) the size of Victor Tyrepower’s business and the absence of any Human Resources professionals contributed to this deficiency. In relation to other relevant matters as provided in s.387(g) I have considered the financial and social consequences to Mr Maclure of termination of employment.

[26] I am also satisfied that the issues between the parties were issues of conflict for some time and that their significance for the continuance of his employment should not have escaped Mr Maclure. I am not persuaded that any failure to engage in a formal or final discussion of these matters and provide an opportunity to respond was a significant failure in all the circumstances notwithstanding that I am not satisfied that that there was compliance with the Code.

Conclusion

[27] I am satisfied that Victor Tyrepower did not comply with the Code’s requirements for dismissal other than a summary dismissal or its procedural requirements.

[28] Having considered the requirements indicated in s.387 of the Act I am also satisfied that the summary dismissal of Mr Maclure was harsh, unjust or unreasonable. However, I am satisfied that his dismissal with notice would not have been harsh, unjust or unreasonable. I make this finding despite Mr Stott’s failure to satisfactorily resolve operational difficulties and devise a mutually acceptable alternative working arrangement. I am satisfied that that failure arose in part from Mr Maclure’s own attitude.

Remedy

[29] Mr Maclure was unfairly dismissed and I am of the view that he should have a remedy for his unfair dismissal. I am satisfied that reinstatement is not appropriate in all the circumstances surrounding this application, particularly the relationship of the parties.

[30] I am satisfied that compensation is appropriate in all the circumstances surrounding this application. In considering the payment of compensation to Mr Maclure I have considered the circumstances to which my attention is directed by s.392 (2) of the Act which are as follows:

“(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 FWA considers relevant.”

[31] There is no evidence that an order for compensation will affect the viability of Victor Tyrepower. Mr Maclure had over twelve months service with the Company. Considering the circumstances of the case, including the factors in s.392 of the Act, I have determined that Mr Maclure should be compensated for his unfair dismissal by the payment of 4 weeks wages.

[32] Despite the unfairness of Mr Maclure’s dismissal I am not able to conclude that Mr Maclure would have remained in employment for a period of longer than 4 weeks. The relationship between Mr Stott and Mr Maclure was antagonistic, even making allowances for the stress of conducting a case in the Commission. I have also taken into account contingencies including the fact that Mr Stott may well have sold the business at any time, and the new owner may have decided not to employ Mr Maclure. Given that Victor Tyrepower is a small business, Mr Maclure would not have been entitled to redundancy payments and would have received an amount of two weeks payment in lieu of notice, or may have been required to work out his notice period.

[33] There is no evidence that an order for compensation will affect Victor Tyrepower’s viability. Considering the circumstances of the case, including the factors in s.392 of the Act, I have determined that Mr Maclure should be compensated for his unfair dismissal by the payment of 4 weeks wages.

[34] Given that this is not a dismissal involving serious misconduct, I make no adjustment on that account. Mr Maclure stated that he earned an amount of $810.00 per week gross during the period of his employment with Victor Tyrepower.

[35] The amount of $3,240.00 less taxation at the appropriate rate is to be paid to the Applicant within fourteen days of the date of this Decision. An Order to this effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr R. Maclure on his own behalf.

Mr B. Stott on behalf of Stotty’s Pty Ltd t/a Victor Tyrepower.

Hearing details:

2014.

Brisbane:

May 14.

 1   Spencer, C. on 20 February 2014, [2014] FWC 1069.

 2   Ibid at para 54

 3   PN146-147, PN191.

 4   PN146, 249, 256.

 5 (1995) 62 IR 371, 373.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR554961>