Roger Crisp v Twynam Agricultural Group Pty Ltd
[2011] FWA 8472
•23 DECEMBER 2011
[2011] FWA 8472 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Roger Crisp
v
Twynam Agricultural Group Pty Ltd
(U2011/7182)
VICE PRESIDENT WATSON | SYDNEY, 23 DECEMBER 2011 |
Application for an unfair dismissal remedy - whether termination harsh, unjust or unreasonable - whether valid reason for dismissal - whether conduct justified dismissal - whether opportunity to respond to allegations - Fair Work Act 2009 ss.387, 394
Introduction
[1] This decision concerns an application for an unfair dismissal remedy by Mr Roger Crisp in relation to his employment with Tynam Agricultural Group Pty Ltd (Twynam). The application is made under s.394 of the Fair Work Act 2009 (the Act).
[2] At the hearing of the matter on 12, 13 and 14 October and 23 November 2011, Mr I Latham of counsel represented Mr Crisp and Mr J Trew QC represented Twynam.
Background
[3] Twynam is an agricultural products company that operates seven properties throughout NSW and employs approximately 68 employees. Its head office is located in Sydney.
[4] Mr Crisp was employed by Twynam as Property Manager of Jemalong Station, near Forbes NSW. He commenced employment with Twynam in April 2008. On 7 April 2011 his employment was terminated by way of resignation. His resignation was given after he was given the option by Twynam of resigning as an alternative to being dismissed for serious misconduct. Twynam accepts, correctly in my view that the circumstances amount to a dismissal and that Mr Crisp’s unfair dismissal application is validly made.
[5] Lengthy evidence was given by the parties in the proceedings. However the scope of the relevant issues is quite narrow. Mr Crisp was effectively dismissed because of his conduct in relation to the processing of one invoice for an earthmoving contractor. Twynam contends that his conduct in this regard amounted to serious or wilful misconduct and justified summary dismissal. Twynam also relies on a history of unsatisfactory performance, although the decision to terminate did not rely on that performance record.
[6] Evidence on behalf of Mr Crisp was given by himself. Twynam called evidence from Mr Peter Morrison, Mr Timothy de Mestre, Mr Lawrence Hodge, Ms Tania Guaran, Ms Karen Phillips, Mr Peter Roach, Ms Tania Hill and Mr John Kahlbetzer who are all employees of Twynam.
[7] The evidence regarding the invoice matter has some complexity, but is not substantially in dispute. Both parties accept that this conduct is the primary matter to be considered in determining whether Mr Crisp’s dismissal was harsh, unjust or unreasonable and that the background circumstances and the process leading to the dismissal are also relevant. I propose to consider the invoice matter first before consider the other background circumstances.
The Cowra Earthworks invoice
[8] Twynam has a comprehensive accounting system for the authorisation of contracting work and the processing of invoices for that work. As part of its system it maintains a register of contractors and monitors the insurance status of the contractors to ensure that all contractors carry relevant insurance coverage for accidents that occur on Twynam properties. One of the contractors on its register was Cowra Earthworks - a business operated by GS and VS Laneyrie.
[9] Mr Crisp was authorised to engage contractors to provide various services and was required to approve invoices for payment to those service suppliers engaged by him. In September 2010 he conducted a site inspection with Mr Guy Laneyrie, the principal of Cowra Earthworks regarding some forthcoming earthmoving work. He knew that Cowra Earthworks was a contractor that had conducted work on the property previously. Mr Laneyrie subsequently submitted a quotation for the work and his quote was accepted. He was issued with a purchase order number and in late 2010 undertook the work in question.
[10] In early January 2011 Twynam received an invoice regarding this work. The invoice was dated 31 December 2010 and was received in the name of Carmina Quarries. Ms Hill, the Office Manager at Jemalong Station provided the invoice to Mr Crisp and informed him that it could not be processed as it was in a different name to the name in Twynam’s contractor register and there was no information in the system regarding valid insurances with regard to Carmina Quarries.
[11] Mr Crisp gave evidence that he contacted Mr Laneyrie regarding this invoice and received assurances that the trading names Cowra Earthworks and Carmina Quarries were covered by insurances. Mr Crisp said that Mr Laneyrie apologised for the error and agreed to send another invoice when he was able to do it. Mr Crisp said that he asked Mr Laneyrie whether he would like him to amend the name on the invoice and process the invoice for payment. Mr Crisp said that Mr Laneyrie confirmed that he would like Mr Crisp to do that. Twynam dispute that this latter conversation occurred, but neither party called Mr Laneyrie to give evidence on his version of the events.
[12] Mr Crisp amended the name on the invoice to reflect the supplier as Cowra Earthworks. He did so by replicating the font of the original invoice on his computer, pasting it over the original name and photocopying the invoice with the amended issuing entity displayed.
[13] There is some conflict in the evidence as to what then occurred and the dates of certain events. Mr Crisp said that he placed the photocopy into Ms Hill’s in-tray for processing on 13 January 2011. Ms Hill says that the document was not given to her until 3 February 2011 and followed conversations with Ms Laneyrie regarding the trading names and insurances and a request she made that a replacement invoice be provided.
[14] Ms Hill sent an email to Mr Crisp regarding the processing of the invoice on 3 February 2011. It essentially said that a correct invoice was needed in order for it to be paid. Ms Hill gave evidence that Mr Crisp handed Ms Hill the invoice that he had amended at approximately 1.30pm on 3 February but did not state that he had amended the invoice or that he had Mr Laneyrie’s authority to do so.
[15] Later that day Ms Hill received an invoice from Ms Laneyrie by email substantially in the same terms as the one amended by Mr Crisp. While cleaning the offices and emptying bins on 4 February 2011 Ms Hill noticed the original invoice which had the amended business name stuck to it and a sheet of paper with Cowra Earthworks produced in various fonts with the one used by Mr Crisp to produce the amended invoice cut out.
[16] I prefer Ms Hill’s version of the events to Mr Crisp’s. I do not believe Mr Crisp produced the replacement invoice until 3 February. I am unsure whether the conversation between Mr Crisp and Mr Laneyrie occurred and Mr Laneyrie provided authorisation for the change in business name on the invoice. It is curious that neither party called Mr Laneyrie to give evidence. It is also curious that Twynam did not apparently check with him whether he had provided authorisation. It is understandable that it did not do so before the decision to terminate as it was not advised that this had occurred. Its failure to check subsequently is more surprising.
[17] On balance I consider that it is more likely than not that a conversation between Mr Laneyrie and Mr Crisp did occur, that it occurred at some time between 13 January and 3 February and that Mr Crisp simply neglected to take any further steps to resolve the problem until 3 February by which time Ms Hill had become involved.
[18] Ms Hill provided a report to Mr de Mestre, the General Manager of Twynam on her concerns with Mr Crisp’s behaviour. Mr de Mestre discussed the matters with Mr Kahlbetzer, the Executive Chairman of Twynam. They regarded it as a serious matter and decided to raise it with Mr Crisp directly and assess his response.
The circumstances leading to dismissal
[19] When visiting Jemalong Station on 7 April 2011 for a budget meeting, Mr de Mestre and Mr Kahlbetzer met with Mr Crisp. Mr Mark McLean, Operations Manager accompanied Mr Crisp to the meeting. Although Mr de Mestre and Mr Kahlbetzer had indicated that the meeting was to discuss another warning letter, they raised the issue of the Cowra Earthworks invoicing. They gave evidence that as the matter involved issues of trust and credibility they wanted to see how Mr Crisp responded without him having the opportunity to prepare a response to the matter.
[20] Mr Kahlbetzer presented the various invoice documents and documents used by Mr Crisp to produce the revised invoice and asked for his comments. Mr Crisp initially said that he could not remember the invoice he had produced. When presented with working documents produced from his bin he said that he did remember changing the document. When asked why he had changed the document he replied that he did not know. He said that it was a stupid thing to do. When asked whether he had anything to add he replied that he had nothing to add.
[21] Mr Kahlbetzer and Mr de Mestre then discussed the situation. They considered that changing the invoice left the company exposed to claims against Twynam’s insurance, that this was an example of Mr Crisp’s non-performance and that the deceit involved meant that they could not trust him to manage the Jemalong asset. They called Mr Crisp back into the office and said that they regarded his conduct as totally unacceptable. They gave him two options, the first to resign and sign a deed of release whereupon he would receive two months pay plus leave entitlements, or alternatively he would be summarily dismissed and receive only his leave entitlements. He was given until midday on Saturday 9 April 2011 to notify Twynam of his decision.
[22] Before leaving the office Mr Crisp apologised to Mr Kahlbetzer for letting him down, as well as himself and his family. Later that evening Mr Crisp sent an email to the Twynam Human Resources Department submitting his resignation. He did not sign a deed of release and was not paid anything other than for his unused leave entitlements.
Other circumstances
[23] At the time of the events concerning the invoice described above there were performance issues discussed between Twynam and Mr Crisp. Mr Crisp received a written warning from Mr Kahlbetzer dated 18 February 2011. The letter raised concerns about Mr Crisp’s performance. Mr Crisp responded to the written warning by letter dated 26 February 2011. Mr Crisp received a second warning letter from Twynam dated 31 March 2011. The letter stated:
“Dear Roger
This is another letter to serve as a second warning which again results from concerns regarding your work performance.
Further to the issues raised in the previous letter sent to you, we have received two separate complaints regarding timely paperwork and subsequent account payments over the last three weeks.
Specifically the issue relates to the timely approval of invoices -
- This appears to be not a one off issue but an area of concern that is on-going and specific to Jemalong’s management;
- This lack of timeliness is adversely affecting those staff in Twynam accounts and the appropriate flow of paperwork;
- Our reputation with suppliers has been unnecessarily diminished and on several occasions we have been threatened with a stop credit status and refusal to supply;
- Slowing the approval of invoices, in many instances has implications to good management of inventory and crop costings.
The payment of our accounts is crucial in the sector and location in which we operate our business. You need to pay special attention to this aspect of your management and ensure that a priority is placed on lifting your management in this area.
We can discuss further next week when I am at Jemalong.
Yours sincerely,
Johnny Kahlbetzer
Executive Chairman”
[24] These matters were not discussed on 7 April as the discussion was confined to the invoice issue. Twynam states that the decision to dismiss Mr Crisp was based on the conduct in relation to Cowra Earthworks invoice against the background of his general performance.
Submissions of the parties
[25] Counsel for Mr Crisp, Mr Latham submits that in circumstances where an employee is terminated for serious and wilful misconduct, the onus of proof rests with the employer to establish that the conduct warrants dismissal without notice. It is submitted that in this instance Twynam has not discharged its onus. Mr Latham submits that the Laneyrie partnership was the employing entity and was insured at all times, that Mr Crisp merely changed one trading name to another and that his conduct was not contrary to any instruction or policy.
[26] Further, Mr Latham submits that although Mr Crisp was notified of the reason for termination during the meeting of 7 April he was not given accurate advice prior to the meeting of the subject matter of the meeting and thought the subject of the meeting was a discussion about matters raised in the letter of 31 March 2011. It is submitted that Mr Crisp was not provided with time to consult with others or seek advice about the subject matter of the meeting and the procedure was flawed as a result.
[27] Counsel for Twynam, Mr Trew QC submits that Mr Crisp’s dishonesty in fabricating the invoice, authorising its payment and lying about its origin justified his immediate dismissal. Mr Trew submitted that Mr Crisp’s conduct was such that it destroyed the trust and confidence in him and as such his continuing employment with Twynam was no longer viable. It is submitted that in altering the invoice Mr Crisp created potential liability issues in that the insurance of the contractor may not have been up to date at the time the services were provided.
[28] Mr Trew submits that Mr Crisp’s admission of wrongdoing undermines his claim that he did not have an adequate opportunity to respond. Mr Trew further submits that Mr Crisp chose to have Mr McLean attend the meeting as his support person and that the Mr Crisp was given until 9 April to notify Twynam of his decision in respect of his resignation. Mr Trew submits that the time permitted would have enabled Mr Crisp to seek advice if he wished to do so.
[29] I propose to consider these matters in the context of the criteria I am required to consider in determining whether the termination was harsh, unjust or unreasonable.
Whether termination harsh, unjust or unreasonable
[30] In considering whether a dismissal is harsh, unjust or unreasonable, FWA must take into account the factors set out in s 387 of the Act. That section provides as follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.”
Valid reason
[31] It is well established that the approach to the existence of a valid reason is the same for summary dismissals and dismissals on notice. In each case it must be determined whether the reason for dismissal was sound, defensible and well-founded. 1
[32] In this case Mr Crisp admitted to conduct which was regarded as inappropriate. Twynam regarded the matter as amounting to fraud and as there was no disclosure of the amended version went to the heart of the necessary requirement of trust in a senior employment relationship. Mr Crisp said that he believed that he had authority to do what he did and it was done to fix an administrative problem, not for any personal gain. It also appears that the perceived risks of the action were not as serious as Twynam thought.
[33] In my view the conduct did not amount to a valid reason for termination. I accept that his conduct was unwise and inappropriate, but appears to have been the product of naivety rather than dishonesty. If, as I accept as likely, Mr Laneyrie approved the amendment, Mr Crisp appears to have sought to adopt a course of action designed to eliminate the problem in processing and payment of the invoice.
[34] Mr Crisp could have been more open with Ms Hill as to his conduct, but then again he was not accountable to her. I consider that the fears of Twynam with regard to insurance cover may have been understandable when the information first came to light but with further examination the fears were overstated as insurance cover appears to have been secure at all relevant times.
[35] Mr Crisp did not advance his cause when the matters were raised with him on 7 April. I consider that it is unlikely that he had forgotten about the altered invoice when it was first raised with him as his conduct in altering an invoice was quite unusual and invoice issues were covered by the letter said to be the purpose of the meeting. When he was reminded of other circumstances and he recalled his conduct, he was unable to put anything favourable in his defence. All he could do was apologise. That understandably left Twynam with the impression that he had attempted to avoid facing up to the issue and knew that it was seriously inappropriate. If he had explained the authority he had obtained from Mr Laneyrie, that he thought that the Laneyrie insurance was in place, and that he considered it to be a minor administrative action to resolve a problem for Twynam, that would have at least prompted Twynam to investigate the matter further. If they confirmed these matters they would have been dealing with behaviour characterised more as naive than deceitful and dishonest.
[36] I consider that in the circumstances more investigation was required by Twynam. Upon that further investigation I believe that it would have viewed the matter differently and should have adopted a different form of disciplinary action in the context of the matters raised for discussion by way of the letter of 31 March 2011. I do not believe that these matters would or should have led to dismissal.
Notification of reason
[37] Mr Crisp was notified of the reason for dismissal at the meeting of 7 April 2011.
Opportunity to respond
[38] I consider that a senior employee should be able to respond to matters raised with them at a meeting with more senior management. Mr Crisp was given advanced notice of the desire to discuss a range of issues including contractor management and administrative issues. The conduct in question fell within that description and was perhaps a notable instance of the problems of delay in processing payments. When the matter was raised with him he appeared to be surprised did not respond in the best manner possible. Nevertheless I consider that the opportunity to respond was provided to him.
Support person
[39] Twynam suggested that Mr Crisp have a support person and a work colleague was available. For a senior employee such as Mr Crisp I do not consider that Twynam had any further obligation.
Other factors
[40] I do not consider that the other specified factors are relevant in this case. Nor do I consider that any other factors are relevant. The case essentially concerns the seriousness of the conduct and whether dismissal was appropriate in all the circumstances. I have considered these matters in the course of considering whether there was a valid reason for the dismissal.
Conclusions
[41] For the reasons above I consider that the termination was harsh, as the penalty for Mr Crisp’s conduct after a more fulsome investigation should have been something less than dismissal.
[42] I am satisfied that an order of reinstatement is inappropriate in this case. Mr Crisp had several performance issues prior to his dismissal. The relationship of trust broke down at the time of dismissal because of Twynam’s beliefs of his conduct. Although the concerns of Twynam management may have been overstated, his conduct was nevertheless lacking in judgment. His conduct after the matters were raised with him did little to restore confidence. Having regard to all of the circumstances including the seniority of Mr Crisp’s role I consider that Twynam would be reasonable in not having confidence in him to adequately discharge the functions of his role in the future.
[43] I am prepared to make an order of compensation. I note that two months notice was required to terminate the contract on notice. I have had regard to the factors in s.392 of the Act. In all of the circumstances I consider that the appropriate amount of compensation is five months salary less taxation. I will issue an order for payment of that amount in conjunction with the handing down of this decision. 2
VICE PRESIDENT WATSON
Appearances:
I. Latham of counsel for Mr R Crisp
J. Trew QC for Twynam Agricultural Group Pty Ltd
Hearing details:
2011.
Sydney.
12, 13, 14 October
23 November
1 Selvachandaran v Peteron Plastics Pty Ltd (1995)62 IR 371
2 PR518505
Printed by authority of the Commonwealth Government Printer
<Price code C, PR517565>
0