Roger Byrnes v Tuftmaster Carpets Pty Ltd

[2015] FWC 1039

[2015] FWC 1039

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Roger Byrnes
v
Tuftmaster Carpets Pty Ltd
(U2014/14362)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 18 FEBRUARY 2015

Application for relief from unfair dismissal - performance as a salesperson - post employment issues - alleged pornographic images retained on phone - failure to comprehensively market within reach of responsibility.

[1] This decision concerns an application by Mr Roger Byrnes under s.394 of the Fair Work Act 2009 (“the Act”). On 24 September 2014 Mr Byrnes was dismissed from his position as an Area Sales Manager with Tuftmaster Carpets Pty Ltd (“the employer”) following almost 4 years of employment on a full-time basis. Mr Byrnes now seeks a remedy (expressly by way of compensation only) in relation to his dismissal, which he alleges was harsh unjust or unreasonable.

[2] Mr Byrnes had been responsible for carpet sales to retail outlets (such as Andersens and Carpet Call) within a region that bounded Roma and the Tweed.

Background

[3] On Friday 26 September 2014 the Applicant was asked by Mr Mark Considine (the employer’s State Sales Manager) to attend a meeting on Monday 29 September 2014 at which Mr John Roberts (the employer’s General Manager) would also be attending. The Applicant was not informed about the purpose of the meeting.

[4] When the meeting convened, Mr Byrnes claimed that Mr Roberts simply said to him words to the effect of, “we’re going to let you go today”. Mr Byrnes said Mr Roberts stated that he made the decision owing to a downturn in sales, but he also claimed that Mr Byrnes’ sales performances were not adequate. Mr Byrnes agreed that Mr Roberts had also referred to his performance as a cause for the decision. But Mr Byrnes also claimed that Mr Roberts referred to other factors as well.

[5] Following the communication of the dismissal, Mr Roberts was said to have said words to the effect of:

“Well, do you have anything to say in response?”

[6] The Applicant was not of the view that anything he could say would change things, and his employer seemed to have adopted the same stance.

[7] The letter of termination dated 29 September 2014 as forwarded to Mr Byrnes read, in part, as follows:

Dear Roger

This letter is to confirm the company decision of today to terminate your employment effective today 29/09/2014. This is following a discussion with Mr John Roberts regarding problems within the Queensland state sales area. [...].

[8] The Applicant was in a state of disbelief because he was of the view that he performed at a similar level to his other Queensland sales colleagues (Mr Considine and Mr Peacock). Mr Byrnes also contended that he had never received any negative performance feedback and had been given no opportunity by Mr Roberts to respond to the allegations made about his performance levels.

[9] Mr Byrnes contended that had he been given an opportunity to respond to the comments about his sales performance - in advance of the decision to dismiss him - he would have been able to persuade Mr Roberts that his performance was equal to that of any other member of the sales staff and that his dismissal was unwarranted.

[10] Indeed, Mr Byrnes contended that his overall position as a salesperson was indistinguishable to of that either Mr Peacock or Mr Considine.

[11] Mr Byrnes alleges that on 27 May 2013 Mr Roberts advised that there was a business downturn which was affecting sales in Queensland and if there was no improvement in sales, the sales team would need to be reduced by one person (to a two-person sales team).

[12] The correspondence directed to the Applicant at that time by Mr Roberts read in part as follows:

Over a number of years the Queensland sales team have not made their required state budget the sales. We have a three-person sales team and the revenue from current sales is insufficient to support three people. If sales do not lift to a level of support for three people Tuftmaster will have no choice but to reduce their costs to meet the level of sales being generated, put simply we will be forced to have a two-person sales team. There is nothing personal in any of this, it is simply business. Our marketplace is tough and we must control our costs to survive.

In discussions with yourselves I have noted your concerns over our stock levels and accept that because of unforeseen supply issues from our key supplier, this has contributed to your dilemma. Nevertheless, it is what it is and we have to make the best of it at all times. I also accept that your marketplace is depressed, obviously, none of your doing it once again that is the situation we are faced with and as always it will be taken into consideration.

We simply need to sell more carpet, we have some new products coming through and I believe most of a yarn issues are behind us. That’s not to say that for whatever reason there may be supply issues going forward, it’s the nature of the beast. Carpet manufacturing in Australia is difficult at best and from time to time our patience is tested. What I will assure you of is that I will give you as much assistance as I can in your endeavours to lift sales.
[...].

[13] Letters to the same effect (with one exception to which I will refer below) were sent to the other two members of the sales team, according to Mr Byrnes. The reference in the letter to the “discussions with yourselves” supports the view the letter was a template that was directed to the sales team generally.

[14] Mr Roberts also expressed concerns in a final paragraph of the letter of 27 May 2013 directly to Mr Byrnes. Mr Roberts pointed out to Mr Byrnes that he had missed an opportunity to attend a social function with him (Mr Roberts) and other sales staff, and this was detrimental to the team relationships. Mr Byrnes, however, argued that this was an unavoidable consequence of having a prior arrangement.

[15] Mr Byrnes did not consider the letter of 27 May 2013 as a letter of warning in relation to his performance as an employee. Mr Roberts’ concerns were couched too broadly and did not single out (Mr Byrnes’) own individual performance.

[16] Mr Byrnes generally contended that his sales performance was the result of the depressed state of the Queensland market combined with the effect of difficulties in supply of product and otherwise did not reflect on his performance.

[17] He claimed that the Queensland Sales Manager would give the sales staff “pep talks” to encourage them to keep trying their hardest, but that all three Sales Managers were:

“failing to make budget as a result of the conditions [they] could not control.”

[18] Mr Byrnes contended that his dismissal was unwarranted therefore. He also contended that the effects of the dismissal upon him had been significant given he had financial commitments including mortgage repayments. Mr Byrnes also provided a medical certificate which indicated, on its face at least, that he was suffering from an anxiety disorder. The extent of the disorder, its impact on the Applicant’s quality of life, its relationship to any other stressors, or its likely duration are all undisclosed.

[19] Mr Roberts argued that there were sounds reasons for the Applicant’s dismissal.

[20] Mr Roberts provided data on the Applicant’s sales performance up to 30 June 2014. The data sheet indicated that in each of the four years the Applicant had been employed by the employer he had been unable to achieve more than 78% of his allocated target. His best performance was in his first year of employment, in the second year he achieved a little over 50% of the required target and in subsequent years he achieved around 66% and 68% of the target. The salesman whom the Applicant replaced in the role had achieved more than 97% of his sales budget (for the year ending June 2010).

[21] Mr Roberts was concerned by the poor return but more so by the Applicant’s attitude as it was exhibited towards him and Mr Considine. Mr Roberts complained that the Applicant was “negative and apathetic” and seemed resigned to not making sales. The Applicant, so Mr Roberts claimed, was disinclined to undertake initiatives and demonstrated little enthusiasm for the role.

[22] Mr Roberts claimed that he reminded the Applicant of these deficiencies in his approach to the sales role “on a number of occasions”.

[23] The Queensland sales team comprised Mr Byrnes, Mr Considine – the State Sales Manager – and Mr Ian Peacock, who was “primarily responsible for selling to projects rather than the retail trade”. The three members of the team therefore did not appear at all times to perform like duties or exercise like responsibilities.

[24] The Applicant’s role required that he make regular face-to-face calls upon his customers (the retail clients) on a regular 6 to 8 weeks cycle and to promote new products. To ensure the systematic nature of the work the Applicant was required along with other sales persons to provide a monthly report to Mr Roberts.

[25] Mr Roberts claimed that the Applicant failed to regularly provide him such reports and that it was necessary for Mr Considine to “chase” Mr Byrnes to obtain the reports. The Applicant was said to have failed to have produced a report in June 2013, July 2013 and August 2013. The Applicant provided reports for each of the next months through to February 2014 but thereafter no monthly report was ever made. Mr Considine gave evidence that he was directed by Mr Roberts to “chase the Applicant” in relation to the provision of the reports.

[26] Mr Considine states that in the end he simply stopped chasing the Applicant for the reports because the Applicant made it clear to him that he saw no point in providing them.

[27] Mr Roberts claimed that the reports were important for the purposes of identifying which products are selling in what part of the country, and whether any particular ranges or colours should be discontinued.

[28] Mr Considine for his part was critical of the Applicant’s failure to act on complaints from key customers. Mr Considine gave evidence of customer complaints that were not acted upon appropriately by Mr Byrnes and had caused embarrassment to the company.

[29] It was accepted by Mr Roberts that market conditions in which Mr Byrnes operated were difficult and it was expensive to maintain high levels of stock (particularly in a depressed market). Mr Roberts argued that from time to time the warehouse will be temporarily out of stock of a particular brand or carpet colour but this was the nature of the business and the problems were always of a temporary nature only. In any event, the issue affected all the sales representatives in the same way.

[30] Despite these circumstances, Mr Roberts claimed that Mr Byrnes was principally responsible for his own failings because of his lack of initiative. He cited two examples. The first concerned an occasion on which sample drapes of new colours had been issued to all sales representatives in late 2012 as a promotional campaign.

[31] But some lengthy time later, the Applicant had not shown one of the principal buyers the range of stock which had been available by that time for about nine months.

[32] Mr Considine’s evidence supported Mr Robert’s account of his concerns at the time.

[33] Mr Roberts claimed there was a second incident involving the development of a new carpet range by Tuftmaster. Mr Roberts argued that between late June and late July 2014, emails were sent to all sales persons directing them to deliver sample drapes to a selected store in their territory to enable the employer to conduct product research. It was subsequently discovered that the Applicant had never placed the new range with any of his customers and the samples had remained in a storage facility. Mr Considine provided direct evidence in relation to the discovery of the samples in the storage facility.

[34] Mr Roberts also claimed that whilst he was appreciative that members of the sales team may have had other social commitments that did not enable them to meet as a team to discuss the business, he was concerned by the fact that Mr Byrnes’ apparent commitment was to a meeting of a social rugby club.

[35] The relevant part of the correspondence not replicated above is as follows:

Roger, can I say that I was very disappointed that you were unable to find the time to share a meal with me and the other guys, not only did you miss an enjoyable evening discussing upcoming products and opportunities to grow sales but it also sent a message that maybe you are not as committed as you should be. I don’t visit Brisbane very often and this was an opportunity to spend some time together as a sales team in an informal environment. I enjoy the banter at these meetings with you guys and I am very concerned that you perceived rugby training as being more important.

On a more positive side I think Queensland’s economy is improving and with our new products we are well placed to lift sales.

[36] Mr Roberts rejected the Applicant’s suggestion that in the 14 months from May 2013 to September 2014 his poor sales performance was a result of general conditions and problems with stock. Mr Roberts preferred the view that it was Mr Byrnes’ “apathy and neglect” as shown in the above examples that “were the prime cause of his poor performance.”

[37] Mr Roberts claimed that he agreed with the Applicant’s account of the meeting as set out above:

In the circumstances, I saw no point in beating around the bush and let him know that it was our intention to terminate his employment. However, whilst I have come to a view that we should terminate the Applicant’s employment, I was both prepared and ready to listen to him and what he had to say as to why we should persist with him in the Queensland sales team.

[38] Mr Roberts confirmed that when the Applicant asked “why?” He was informed that the decision had been made “because of your poor sales performance.”

[39] The Applicant replied, according to Mr Roberts, with the question:

“Would anything I say make any difference?”

[40] Mr Roberts contended that:

By that stage, I was satisfied in my own mind and from the figures that [Mr Byrne’s] performance continued to be unsatisfactory and replied honestly, “No”. However, I did give him an opportunity to respond to me and to open a discussion about issues. To a limited extent, he did engage in discussion. The reality however, was that he had very little to say other than to repeat the depressed state of the market and his complaint about erratic supply. He would have been well aware that I was not prepared to accept either as a reasonable explanation as to why he should keep his job.

[41] Mr Considine for his part gave evidence that the Applicant was given an opportunity to have a support person in attendance at the interview. Mr Considine also claimed that:

It is not true that [Mr Byrnes’] was dismissed in seconds and if it was the Applicant’s belief that nothing he would have said might have changed the outcome then, that was not because Mr Roberts had made a predetermined decision but that in all the circumstances, there was really no explanation that the Applicant might offer for his unsatisfactory performance. It is my belief that he was given every opportunity and had he wanted to say something in his defence or have something helpful to say then Mr Robert would have listened to him.

[42] Following the termination of the Applicant’s employment, Mr Roberts contended that Mr Considine and Mr Peacock undertook a tour of the Applicant’s client base. Mr Roberts claims that there was evidence as a result of that tour that the Applicant had not been “working his territory efficiently and that he was leaving his customers, even his best customers, with out of date sampling, old books and a number of managers who were dissatisfied with the service they have been getting from the Applicant.” Mr Roberts maintained that the results of the tour confirmed his view that the Applicant’s lack of initiative drove his underperformance and not any market supply issues.

[43] The evidence led in these proceedings both by Mr Considine and Mr Peacock was to the effect that some customers had not seen Mr Byrnes or a representative in years or else only intermittently. Other customers had discontinued stock lines and were unaware of new products.

[44] Mr Considine and Mr Peacock claimed that this was the experience across “all the territory” for which Mr Byrnes was responsible. Mr Peacock produced a report following the tour indicating the experience of the major customers in Mr Byrnes’ territory. Mr Peacock’s experience was that there was a great deal of demand amongst the customers and that he had been able to generate a very considerable volume of sales activity.

[45] It was claimed by Mr Considine that Mr Peacock’s sales achieved in Mr Byrnes territory since Mr Byrnes’ dismissal, had “shown a dramatic increase in the figures produced by the Applicant in his time with the company.”

[46] In the post employment period, Mr Roberts claimed that he and Mr Considine had checked the Applicant’s mobile phone for any missed calls or messages from customers. But in so doing they claimed that they had come across “several dozen pornographic photographs”. The photographs “depicted women either on their own or with other people taking part in a variety of explicit sexual acts. Most of them seem to be pictures [Mr Byrnes] had downloaded from some other sources, presumably the Internet, rather than photographs that he might personally have taken.”

[47] Mr Considine’s evidence confirmed the claims made by Mr Roberts. Mr Considine indicated that the images were discovered on the mobile telephone in the course of a meeting involving himself, Mr Roberts and Mr Peacock following Mr Byrnes’ dismissal. Mr Roberts was said by Mr Considine not to have shown him all the photographs but the number of photographs that he did see “were all pornographic and in poor taste.” Mr Peacock’s evidence was largely to the same effect.

[48] The Applicant’s conduct in this regard had been contrary to the company’s Electronic Equipment Policy and would have warranted dismissal in any event, so Mr Roberts claimed.

[49] The electronic equipment policy, which Mr Byrnes was said to have been familiar for reason it was part of his induction, expressly related to both Internet and mobile phone usage states that “visiting internet sites that contain obscene, hateful, pornographic or other illegal material” was a breach of policy and that employees may be “open to [...] disciplinary action” as a consequence. Mr Byrnes, at the very least, reasonably was alert to the concern his employer held about accessing (generally) content about which there is community sensitivity.

[50] I add that Mr Roberts did not tender the photographs in evidence for reasons that he states that he deleted them as the phone had to be provided to a new employee.

Legislative context

[51] Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable. Section 387 is as follows:

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; 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.”

Consideration

(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)

[52] Principally at least, Mr Byrnes was dismissed from his employment owing to perceived deficiencies in his performance as a salesperson. The Full Bench in Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport S5897 (“Re: Crozier”) contended that performance issues, which may often be premised on an employee’s discretionary effort, was an incidence of “capacity”:

[62] We find that there was a valid reason for the termination of Mr Crozier’s employment related to his capacity. In our view an employee’s performance is an incident of his or her “capacity” within the meaning of that word in s.170CG(3)(a) [...]

[53] Mr Byrnes’ performance as a sales person was not to be taken in a narrow sense, according to Mr Roberts. Indeed, it appears from the Applicant’s own viva voce evidence that Mr Roberts set out a range of reasons for the dismissal at the time of the dismissal (of which sales performance as such was only one).

[54] It is apparent that Mr Byrnes’ sales performance (as such) was well below his targets, but he was not alone in that regard. Mr Considine’s sales figures had also been below expectation as well, on his own admission. Mr Considine attributed his sub-par performance to market conditions (and perhaps supply issues). Mr Peacock’s sales figures had been positive, however. But this may have been the result of his different sales focus. The manner in which the comparative evidence on sales performance was led was far from decisive in relation to establishing a valid reason for the Applicant’s dismissal.

[55] At the most I would conclude that Mr Byrnes’ sales performance was below the performance as expected against the express indicators. But I would not go so far as to conclude on the state of the evidence as led that his sales performance - at least on its own - had reached a fatal mark which warranted his dismissal, if only because he was not alone in having under-performed against his sales targets.

[56] But there were others concerns, beyond Mr Byrnes’ performance that led to his dismissal, and which more widely framed the Applicant’s performance generally.

[57] It appears moreover that Mr Roberts had formed a view that the Applicant was insufficiently committed to the sales task compared to others in his sales team. Mr Considine put it another way, and indicated that the Applicant was negative, apathetic and lacking initiative.

[58] The evidence as to the extent to which the Applicant comprehensively marketed his employer’s product in the region for which he was responsible arose in respect of an investigation into the matter carried out by Mr Peacock. Mr Peacock’s evidence was unchallenged in a direct sense.

[59] The evidence as led demonstrated that Mr Byrnes was not inactive in the region which he was responsible, but that his coverage of the region was very patchy and left a number of sales opportunities and business relationships unaddressed. I have no reason to think that Mr Peacock’s report to Mr Roberts was fabricated. The report is written in candid terms, does not appear to have been drafted for any exaggerated effect, records customer responses on a case by case basis, and went unchallenged it its own right. The report also suggests that Mr Peacock was able to sell to the region despite the so-called market conditions and Mr Byrnes’ insistence that there was resistance in various cases to his role by various clients.

[60] I am satisfied that Mr Peacock’s particularised account of his experiences with Mr Byrnes’ client base demonstrates that the Applicant had only selectively applied himself to his duties in relation to marketing his employer’s product in his region.

[61] The evidence of Mr Considine, also unchallenged, was that since Mr Byrnes’ departure Mr Peacock had been able to improve sales in Mr Byrnes’ region significantly.

[62] The failure to make a comprehensive effort in his region to market his employer’s product lines reflected poorly on Mr Byrnes’ commitment to his duties as a sales manager for his region. Mr Byrnes knew and understood his role in this regard, as he articulated it himself in his own evidence. That role as Mr Byrnes explained it included:

• Developing, maintaining and fostering strong and effective relationships with local and regional Queensland clients; [and]



• To make regular call cycles (face to face interaction with customers) [..]

[63] Of course, however, these were not concerns known to the employer at the time of the decision to dismiss Mr Byrnes, and equally they were not matters put to Mr Byrnes for his response at the time of the dismissal.

[64] There were two examples given of Mr Byrnes’ failure to deal comprehensively with complaints from his customer base.

[65] It was clear from Mr Byrnes’ own viva voce evidence that he did not perceive himself as having a critical role in managing complaints. His experience was that there were sales people and there were complaints managers and his role fell into the former category only. This was despite him given evidence that one of his roles as Area Sales Manager was:

“Following up on complaints with customers.”

[66] Mr Byrnes provided as a response to one long running complaint (which was ultimately resolved by Mr Peacock), that he did not action it with any industry for reason he was unfamiliar with complaints handling processes. This was a less than adequate response by an employee with a very long record in a very senior role in the carpet sales industry (prior to joining the employer), and who recognised in both his written evidence and his viva voce evidence that one of his roles was to follow up on complaints.

[67] Having said as much, there was no evidence of a pattern of neglect or indifference to dealing with customer feedback (given that they were the only examples over a period of four years of employment). Admittedly, however, they were matters which rightly attracted the concern of his employer and provided a window into Mr Byrnes’ lack of diligence in respect of such customer concerns. After all, Mr Byrnes was a sales person whose success depends greatly on maintaining the confidence of other people and businesses and it might have been reasonably expected he would have had a stronger interest in protecting the business and his relationships in his sales region.

[68] Generally, Mr Byrnes’ subdued interest in responding to customer complaints - even from quite large clients - no doubt caused his employer to question his commitment to his role as a sales person. There were other incidents, however, that fuelled this conclusion.

[69] I have earlier referred above to 2 incidents in which Mr Roberts claimed to have had insight into Mr Byrnes’ motivation. Both incidents concerned claims that Mr Byrnes did not make a sufficient effort to sell new lines into the customer base.

[70] I think there is sufficient evidence around the first of these claims (that concerned Mr Byrnes having not showed a new colour range to Andersens) to show that Mr Byrnes was not at all times committed to the sales task. Mr Roberts’ evidence about promoting and selling product samples to Andersens (on or about October 2013) - when the Applicant had admitted not having to do so - was particularly detailed (as to the steps he took and the prices at which he sold), and credible for that reason. Mr Considine recalled the exchanges with Mr Roberts at the time, as well. It certainly does appear (on the balance of probability) that Mr Byrnes had forgone the chance to seize a sales opportunity.

[71] The evidence as to whether or not Mr Byrnes had failed to market a further product line in or about July 2014 is much less clear on the evidence. It was alleged that a sample set belonging to the Applicant was found in a storage facility, having not been placed with customers. Mr Byrnes provided a creditable and detailed explanation as to how that sample came to be in storage. That explanation concerned Mr Considine, who was said to have been the cause for the sample having been sent to the storage facility. Mr Considine gave an alternative account, which was unchallenged, and explained that he had found the sample range in the storage facility at his own initiative and concluded that Mr Byrnes had not placed the range with a customer. Mr Considine notified Mr Roberts of the situation and pressed his view that the Applicant lacked initiative as a sales person.

[72] These are starkly different accounts of the same incident. However, I prefer the account given by Mr Considine. My reason for preferring Mr Considine’s account is that the original communication from Mr Roberts directing that the sales team place the new product line stressed the urgency of the situation and requested that each member of the sales team notify him by e-mail as to the client with which the product line was installed.

[73] Mr Byrnes never responded to Mr Roberts’ request. There appears to be no sound reason why Mr Byrnes would not have responded as requested on such an urgent basis other than that he did not place the product as directed.

[74] On their own, the two incidents in October 2013 and July 2014 to which I have referred above would not in their own right warrant the dismissal of the Applicant. Ordinarily, two incidents in the larger pattern of performance would warrant discrete counselling and redirection. But the two incidents assume greater relevance when taken together with other findings.

[75] The employer had other concerns with Mr Byrnes’ performance. Mr Considine gave evidence that the Applicant was particularly reluctant to complete monthly reports on his sales performance. The Applicant did not deny this allegation with any vigour at all. Indeed, Mr Byrnes believed that the reporting requirements of his position were a waste of time effectively:

[...] Let’s move to the matter of the reporting process; 5(i), duties as area sales manager were reporting. You didn’t really like reporting, did you?---No.

Why not?---It was very much a waste of time, as far as I was concerned.

Because nobody ever read them?---Not only that, but they were - nothing changed and also they were - just Mark would send me his reports so I could copy his reports so I could back him up to try and get at the company, to do whatever they wanted to do, but then the company were going to do what they wanted to do anyway because nothing changed from month to month, to year to year - - -

Because here we are, we have a sales rep in Queensland who has an obligation to report to his general manager every month and you really don’t bother to do it, on the basis that they’re a waste of time, nothing changes and nobody reads them?---Correct.

Notwithstanding that, do you agree with me that at various times in this process, both Mr Roberts and Mr Considine had chased you to get the reports in?---On occasion they would.

Yes, and you’d just not bother?---I would do them from time to time.

From time to time?---Yes.

But generally speaking, you wouldn’t bother?---No.

So when Mr Roberts, for example, says:

He regularly failed to provide with any report, or if it was provided, it was late and only after it had been chased by Mr Considine. He failed to produce a report for me in June, July or August, but then completed reports through November 2013 and February 2014. Since then, no report.

Do you accept that?---Yes. 1

[76] Mr Byrnes held these views despite the fact that in his own evidence in chief one of the responsibilities of an area sales manager was said by him to be:

“Reporting”

[77] Mr Considine contended that the reports were important but that Mr Byrnes considered the reports to be of little value and refused to comply with the direction to provide them on a regular basis. Mr Considine convincingly explained that he grew tired of pursuing Mr Byrnes for each of the monthly reports and eventually gave up altogether. Mr Considine’s evidence was not directly challenged.

[78] I do regard Mr Byrnes’ effective refusal to provide monthly reports as directed to be a cause for concern as it reflects on the extent to which he was prepared to respond positively to his employer’s reasonable instructions. But Mr Considine, despite having chased Mr Byrnes up over time on his failure to provide the monthly reports, did not take the matter up with Mr Byrnes and assert that compliance was necessary as a condition of employment. Mr Considine let Mr Byrnes have his way, in effect, and did not seek to invest any more time in him.

[79] Again, on its own, Mr Byrnes’ conduct in this discrete sense did not warrant dismissal. But in the context of the wider evidence it assumes somewhat greater importance.

[80] I turn now to the issue of the so-called pornographic images retained on Mr Byrnes’ company phone. It appears to me the evidence sufficiently supports a conclusion that Mr Roberts located a collection of explicit sexual related images on Mr Byrnes’ mobile phone. There is no case in my view that the images on the phone came to be on the phone over the course of time it was in Mr Byrnes’ control. The phone had been given “new” to Mr Byrnes, according to Mr Peacock’s unchallenged evidence.

[81] Mr Byrnes claimed that these images have been forwarded to him by his client base and other than that some of the images had been forwarded to him by Mr Considine at an earlier period in time. Mr Byrnes claimed the content of the images was humorous and just included some photo-shopped images. The content of the images themselves was not able to be considered by the Commission for reason that the images had been deleted. But it is enough to draw from the evidence they could readily be described as including adult sexually explicit material. The evidence of Mr Roberts, Mr Considine and Mr Peacock was all to this effect. Mr Roberts’ evidence, in particular, was convincing as to the full range of the materials as he was required to delete them seemingly one at a time over a half hour period, and his recollection of the process he undertook in this regard was authentic. Mr Byrnes for his part conceded there were at least an indeterminate number of what he described as pornographic images and jokes in the phone:

Let’s just start there, shall we, Mr Byrnes.  There were photographic images on the mobile phone, company mobile phone, which you used as your business phone?---(No audible reply).

You’re going to have to speak rather than nod, because of the recording?---Yes. 
77 pornographic images?---I’m not too sure. 

Well, how many would you say?---Well, I’m not too sure. 

Is it about right?  Is that vastly excessive or would you accept it’s 77?---I honestly don’t know. 

[...]

Okay.  They were pornographic?---Not too sure. 

What do you mean, you’re not too sure?  You know what pornographic means, don’t you?---Yes. 

Well, were they pornographic?---There probably was some on there that were pornographic. 

I put it to you there were 77 pornographic pictures of ladies in various states of undress performing certain acts, all of which could properly be described, potentially described, as pornographic?---No, I disagree. 

I’m sorry?---I disagree. 

Well, what were they?  Tell us what they were?---There would have been some pornographic jokes on there. 2

[82] There was much debate in the proceedings about whether or not the Applicant had been trained in respect of employer policy in relation to accessing, storing and distributing violent, offensive or pornographic images. The employer’s approach to engaging its employees in relation to such policy appears to have been less than rigorous and Mr Considine himself had at an earlier point in time forwarded a number of the images to Mr Byrnes. It is questionable therefore as to the extent to which the employer had been able to create a climate of expectation about receiving, storing and distributing images and materials that could offend others on company devices. Further, there is no suggestion that Mr Byrnes downloaded the images at his own initiative, or else distributed the images to any person, or caused anyone to be offended at any point.

[83] The issue is more complicated still by the fact that Mr Byrnes’ own line manager in the period before 2012 - Mr Considine - had forwarded to him some images that under the current policy would likely have been considered inappropriate. Again, this is a matter that goes to the extent to which the employer was effective (at least up until 2012) in creating a workplace environment which discouraged the retention or downloading of potentially offensive materials.

[84] Equally, however, Mr Byrnes himself could provide no explanation whatsoever as to why - when he reasonably was aware of the sensitivity around such images - he had not chosen to delete the collection of images (as he would other e-mails that he received that he no longer required). The images appear to have accumulated on his mobile phone over a period of some years.

[85] This was not a situation in which Mr Byrnes, as I suggested immediately above, could be said to have been uninformed and innocent as to the difficulties posed by the presence of such images, as they were, in a workplace context. He had indicated in 2010 that he had read and understood policy documentation provided to him which alerted him to the sensitivity of such materials in the workplace.

[86] Mr Byrnes’ conduct in relation to the retention of what can be taken to have been sexually explicit images on his employer’s mobile telephone is of course a considerable concern. It brings into question his judgment, and the extent to which he could have retained his employer’s trust and confidence into the future.

[87] Taken as discrete issues, the various performance and conduct issues of concern to Mr Byrnes’ employer do not warrant his dismissal. But taken together, they provide a more comprehensive profile of Mr Byrnes’ standing and performance as an Area Sales Manager.

[88] When I consider the weight of the evidence as a whole, I am persuaded that the employer had sound reasons to lose confidence in Mr Byrnes’ capacity to perform his role as a sales person. Thus, there was a valid reason for dismissing Mr Byrnes.

(b) whether the person was notified of that reason

[89] So far as it can be held that a valid reason in relation to the Applicant’s conduct or capacity was relevant to this matter, it is not immediately evident from the claims made by Mr Considine and Mr Roberts that the Applicant was notified in advance of the communication of his dismissal or the reason for the dismissal. The Applicant was informed on the evidence before me of his dismissal prior to Mr Roberts indicating to the Applicant that the reason for the dismissal was a result of his poor sales performance.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[90] It does not appear to me to be the case that Mr Byrnes was able to respond to the allegation of his poor sales performance and wider behaviours (his “capacity”) as a sales person before such time as after he was dismissed.

(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

[91] The circumstances of the dismissal did not give rise to a context in which Mr Byrnes was provided an opportunity to have a support person present to assist him at the time of the discussion with Mr Roberts.

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[92] Mr Byrnes was dismissed by Mr Roberts without any notice and without having been given an opportunity to rectify his performance.

[93] It appears to me upon reviewing the evidence as given by Mr Roberts and Mr Considine, that they had been aware since at least May 2013 of difficulties with Mr Byrnes’ sales performance, and his general conduct in relation to discharging his duties (such as in relation to generating the required monthly reports). But for all of this, there was no single point at which the Applicant was given the benefit of a focused or pointed warning in relation to his unsatisfactory performance. Indeed, in relation to one particular incident referred to above which occurred in October 2013, in which Mr Byrnes failed to market a new colour range to an important customer, Mr Roberts gave evidence that he directed Mr Considine to oversee Mr Byrnes’ performance more closely in future. Mr Considine for his part said Mr Roberts was responsible for that process. The upshot being that despite both individuals being aware of Mr Byrnes’ performance issues, neither took responsibility for the required performance management process.

(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

[94] There is no evidence led in this matter that the size of the business in any way affected the procedures relating to the dismissal. This is a matter that weighs neutrally upon my judgement therefore.

(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

[95] It appears as though the company had access to human resource expertise (in the form of the HR Manager Mr Grace) for the purposes of assisting it in the manner in which it effected the dismissal. Whether or not it made use of such expertise (which was located interstate) is not a question that is required to be resolved. In the circumstances this matter bears neutrally upon my judgement.

(h) any other matters that the FWC considers relevant.

[96] Mr Byrnes’ length of employment with the employer was about 4 years. He was not a long standing employee.

[97] Mr Byrnes’ expressed concern at the impact of the dismissal upon him and his family, particularly in respect of his mortgage obligations. Mr Byrnes also complained that he had a loss of self esteem owing to the dismissal, along with a tarnished reputation in the industry. The materials on file suggest that he has been treated for an anxiety condition following the dismissal.

[98] Generally, these are very often the common effects of a dismissal on a person.

[99] Clearly, there are deficiencies in the extent to which the Applicant was afforded procedural fairness in relation to the dismissal. In the circumstances of this case, the deficiencies cannot be overlooked. The employer held concerns about Mr Byrnes’ performance over a number of years but took no express steps to give him [Mr Byrnes] the opportunity to rectify the situation that had emerged. This was similarly the case in relation to his failure to meet reporting requirements and his deficient sales efforts as identified. Mr Byrnes was given no opportunity to reflect upon the expectations of his employer in order to redirect his efforts.

[100] There are some matters (particularly the existence of sexually explicit images on his mobile telephone and the feedback provided by the regional clients about Mr Byrnes’ sales efforts) that have arisen in the post-employment period. As I discussed above, these were not matters that were able to be bought to Mr Byrnes’ attention at the time of the dismissal, of course. Mr Byrnes did not have the opportunity to provide a full explanation to his employer in relation to those matters, either (notwithstanding he was seemingly blind to the implications of retaining such images on his company phone, especially over such a long time period).

[101] Generally, the extent of the denial by the employer of procedural fairness to Mr Byrnes was substantial in this case. Before the employer formed the ultimate view about Mr Byrnes’ future it should have extended him an opportunity to give an account of himself, his performance and his conduct (as there were many categories of concern about the Applicant’s conduct and performance).

[102] I do not think that a disregard for procedural fairness on the scale evident in this particular case and in the discrete context of the issues raised can be readily put aside by a presumption that affording the Applicant an opportunity to respond to the allegations made about him would not have made the ultimate result any different. I say this knowing that when Mr Byrnes was pressed on how he would have defended himself he had no more to add than his evidence in this matter. But that said, where an employee is put on notice at an early point as to their employer’s concerns with their apparent capacity or performance, an opportunity is provided for rectification - and this is the area in which Mr Byrnes was most seriously deprived (be it in relation to sales performances, his resistance to complying with reporting, his lack of effort in installing new product etc). Other concerns arose in the post employment period, and Mr Byrnes had no opportunity to respond to those issues of course.

[103] In the circumstances, although there was a valid reason for the dismissal that is in relation to the Applicant’s employment, when the circumstances of the dismissal are taken into account I am of the view that Mr Byrnes dismissal was harsh unjust or unreasonable. The employer, I add at this point, is entitled to rely upon conduct that becomes known after the dismissal for providing a valid reason for dismissal (see Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 at 9), and it is open for the Commission to find that there were valid reasons for a dismissal other than as pressed by the employer at the time.

[104] I now turn to remedy.

REMEDY

[105] Section 390 of the Act reads as follows:

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.

[106] Mr Byrnes is a person protected from unfair dismissal for the Act’s purposes, and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise a discretion as to whether Mr Byrnes can be reinstated.

[107] Section 391 of the Act provides as follows:

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.

[108] I would neither reinstate (by re-appointing) Mr Byrnes to his former position nor order that he be appointed to another equivalent position with the employer, or any associated entity of the employer, on the same or any other site.

[109] This is because Mr Byrnes himself does not request reinstatement or otherwise. The fact that Mr Byrnes does not seek to be reinstated (or otherwise) is a significant reason for not exercising the discretion to reinstate etc. Where an employee is unwilling to return to the workplace, a productive and cooperative relationship is unlikely to result. Mr Byrnes’ believed the relationship of trust and confidence had been fatally compromised by the dismissal.

[110] Because of my findings in this regard I now turn to consider compensation.

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.

[111] In respect of the above matters that I must take into account, I find as follows:

(a) the effect of the order on the viability of the employer’s enterprise

There is no evidence that any order I might make for compensation would in some manner affect the employer’s viability.

(b) the length of the person’s service with the employer

[112] Mr Byrnes had been employed for some 4 years with the employer. This is not a period of time that strongly encourages the making of an order for compensation, but it is suggestive that Mr Byrnes had a settled and continuous period of employment with his employer.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[113] There is a necessary element of speculation in such a judgement as must be made by the Commission, as was admitted in the Full Bench in Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR. The judgement must be informed by any relevant circumstances known at the time, however.

[114] On the evidence available to me, as set out above, the Applicant would have been likely to have remained in employment for a period of at least a further five weeks. There were altogether too many issues afoot for the period of time to be any greater and it appears to me that there was little likelihood that Mr Byrnes would have been able to sustain the relationship beyond this short period (as the evidence discussed in relation to s.387(a) of the Act above indicates). Mr Roberts’ correspondence of 23 May 2013 also suggested that the capacity of the employer to support the current sales team was limited.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[115] Mr Byrnes had made sufficient effort to mitigate his losses including making various applications for new positions within Queensland and also undertaking unpaid work in order to gather experience in the retail sales environment.

(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.

[116] Mr Byrnes did not earn any remuneration in the anticipated period of further employment (of 5 weeks).

(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

[117] This is not a matter that requires any further consideration.

(g) any other matter that the FWC considers relevant

[118] Section 392(3) of the Act provides as follows:

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.

[119] I consider that Mr Byrnes’ admitted refusal to comply with his reporting requirements (which he accepted was an element of his duties as Area Sales Manager) was a conduct related factor that contributed to the decision to dismiss him from his employment. Other conduct related matters arose after the decision had been taken. The wider concerns about the Applicant related to the performance of his duties and reflect on his capacity as a salesperson (but not his conduct as is required in relation to this section).

[120] In view of this, I will deduct 20% from the amount that I would otherwise have ordered to be paid to Mr Byrnes. This reduces the amount to be paid to Mr Byrnes to 4 weeks of his ordinary salary subject to taxation as applicable.

[121] Section 392(4) of the Act provides as follows:

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.

[122] My order for compensation makes no allowance for the above proscribed matters or considerations.

[123] Section 392(5) of the Act provides as follows:

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.

[124] Section 392(6) of the Act provides as follows:

(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.

[125] The order that I propose to make does not need to take into account the statutory cap.

[126] Section 393 of the Act provides as follows:

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.

[127] The employer has made no application to pay any amount I may order to be paid as compensation in instalments.

CONCLUSION IN RELATION TO REMEDY

[128] In my view the Applicant was dismissed harshly, unjustly or unreasonably, as I have indicated earlier. The compensation the Respondent must pay to the Applicant is an amount equivalent to four weeks of his usual remuneration subject to taxation as applicable. I have elected in this matter not to make further deduction for any contingencies given the short period that I consider that Mr Byrnes would have remained in employment but for the decision to dismiss him.

[129] An order to this effect will issue along with the publication of this decision.

[130] I add that I have reviewed the amount ordered to be paid in all the circumstances of this matter, including the Applicant’s period of employment, and consider it to be an amount that is also appropriate in the context of this application.

SENIOR DEPUTY PRESIDENT

Appearances:

Ms C. Raftos, of McKays Solicitors, for the Applicant

Mr D. Miller, of the Australian Industry Group, for the Respondent

Hearing details:

2015

Brisbane

9 February

 1   Transcript of proceedings dated 9 February 2015 at PN336-341.

 2   Transcript of proceedings dated 9 February 2015 at PN108-120.

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