Ronald Lee v JA Gosden and G Macmillan T/A Dunlop Tyres Kapunda
[2016] FWC 3125
•19 MAY 2016
| [2016] FWC 3125 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Ronald Lee
v
JA Gosden and G Macmillan T/A Dunlop Tyres Kapunda
(U2016/3954)
COMMISSIONER PLATT | ADELAIDE, 19 MAY 2016 |
Application for relief from unfair dismissal - Small Business Fair Dismissal Code applied - application dismissed.
Background
[1] JA Gosden and G Macmillan T/A Dunlop Tyres Kapunda (Dunlop Tyres Kapunda) is a franchise operating in Kapunda, South Australia. The franchise was purchased by Mr Macmillan and Ms Gosden on 1 September 2014 and is a small business employer within the meaning of s.23 of the Fair Work Act 2009 (the Act).
[2] Mr Lee commenced employment with Dunlop Tyres Kapunda as an assistant manager on 1 September 2014. His responsibilities included tyre fitting, wheel aligning and administration such as the filing, cash handling and daily banking. He worked in the same role for a previous owner of the business.
[3] On 15 January 2016, Mr Macmillan reviewed video footage that showed Mr Lee removing money from the cash register and placing it in his wallet. He also discovered separate CCTV footage of Mr Lee watching pornographic videos at the front counter of the store on the work computer.
[4] After reviewing the Small Business Fair Dismissal Code (the Code), Mr Macmillan confronted Mr Lee about the removal of the money and watching pornography. Dissatisfied with Mr Lee’s explanation, Mr Macmillan proceeded to summarily terminate Mr Lee’s employment.
[5] On 20 January 2016, Mr Lee lodged an application pursuant to s.394 of the Act seeking a remedy, by way of compensation, for the alleged unfair dismissal.
[6] The application was the subject of a determinative conference on 18 April 2016.
[7] Mr Lee submitted that his dismissal was unfair for the following reasons:
● the dismissal was inconsistent with the Code;
● Dunlop Tyres Kapunda did not have a valid reason for the dismissal;
● Mr Lee’s conduct was not sufficiently serious to warrant dismissal and Dunlop Tyres Kapunda should have given proper and adequate consideration to alternatives to dismissal;
● Mr Lee did not wilfully or deliberately behave in a manner inconsistent with the contract of employment;
● Mr Lee did not cause a serious health or safety risk to other persons nor did he cause serious or imminent risk to the reputation, viability or profitability of the employer’s business as the float balanced at the end of the day;
● Mr Lee had a sound and defensible reason for his actions;
● Mr Lee was not given an opportunity to respond to the reasons for dismissal prior to the decision to terminate being made and thus was denied natural justice;
● Mr Lee was not able to have a support person present at the time of dismissal;
● Mr Lee had an excellent employment record and no prior warnings for poor performance;
● Dunlop Tyres Kapunda failed to provide evidence to support allegations of misconduct; and
● the dismissal was harsh due to Mr Lee’s:
● age;
● limited prospects of finding alternative employment in a small rural area;
● excellent employment record and long service; and
● reliance on the longstanding custom and practice of the business.
● Mr Lee had stolen cash on 15 January 2016 which was reported to the Police;
● the theft amounted to serious misconduct within the meaning of regulation 1.07 of the Fair Work Regulations;
● Mr Lee had watched pornography at work; and
● the dismissal was in accordance with the Code.
[9] I have determined that Mr Macmillan believed on reasonable grounds that Mr Lee had stolen cash from the business and therefore, had engaged in conduct sufficiently serious to justify immediate dismissal. On that basis, I have dismissed the application. My detailed reasons for this decision follow.
The evidence and material before the Commission
[10] Mr Lee supplied a witness statement and gave oral evidence in this matter.
[11] Dunlop Tyres Kapunda relied upon the witness statements and oral evidence of:
● Mr Macmillan, the proprietor of the business and the person who made the decision to terminate Mr Lee; and
● Mr Ian Kowald, the Manager of Dunlop Tyres Kapunda until 1 March 2016.
[12] Video footage was also tendered by Dunlop Tyres Kapunda which depicted Mr Lee:
● taking money from the cash register and placing it in his wallet on 10 October 2015 and 15 January 2016; and
● watching pornographic videos on 8 October 2016.
[13] In January 2015, Mr Macmillan observed Mr Lee receiving cash from a customer without immediately placing it in the register. 1 Mr Macmillan confronted Mr Lee about this, indicating his disapproval of the conduct. Mr Macmillan observed the same behaviour in early October 2015 and warned Mr Lee it was not worth losing his job over.2 Mr Macmillan installed a hidden video camera. Mr Lee could only recall one conversation about cash handling processes.3
[14] A considerable amount of evidence was provided in relation to the cash handling practices of the business. It was established that there had been a long standing practice of employees having permission to make business related purchases using money from the cash register, in the event that there was not enough petty cash available. For example, if a customer paid in cash for a $20 sale, Mr Lee would take this money, without recording it as a sale, and use it at the hardware store for business related expenses, without retaining the receipt. 4 This was confirmed by Mr Kowald.5 It was apparent that Mr Macmillan was unaware of this practice.
[15] Mr Macmillan submitted video footage taken on 10 October 2015 which depicted Mr Lee taking money from a customer and not placing it in the cash register. Mr Lee said that he was engaging in the practice described in paragraph [14] above. While such a practice is unorthodox, I cannot take issue with it in light of its endorsement by Mr Kowald. 6 I note that this event did not form part of Mr Macmillan’s decision to terminate Mr Lee.
[16] The video footage taken on 15 January 2016 showed Mr Lee removing money from the cash register and putting it in his wallet. Later that day, Mr Macmillan viewed the video footage and came to the conclusion that Mr Lee was stealing from the business. Mr Lee had already left work.
[17] The reasons for the removal of the cash from the register by Mr Lee on 15 January 2016 are disputed.
[18] Mr Lee in his application (Form F2) and witness statement stated that earlier that day he had used his own personal money to give a customer change for a transaction, as the cash register contained insufficient funds. Once the cash register contained enough money, he opened it and reimbursed himself.
[19] Mr Lee provided a different account at the determinative conference. Mr Lee gave evidence that early in the day, a passer-by that was known to him, but not a customer, entered the store and asked for ten, five dollar notes in exchange for a $50 note. As the cash register did not contain enough five dollar notes he gave the passer-by a combination of five dollar notes from his own wallet and the cash register. 7
[20] When asked to explain why his reason for the removal of money from the cash register had changed, Mr Lee suggested it was due to an error by his representative. 8 Mr Lee was given the opportunity to provide a statement from his representative to confirm this but failed to do so.9
[21] Mr Lee contended that the act of giving change to a customer or a passer-by was in line with the cash handling practice previously discussed in paragraph [14] and as a result he had the implicit authority to remove money from the cash register and his own wallet to give change. Mr Macmillan denied this stating that “we’re not in the practice of giving people that walk in off the street change in our notes box.” 10 I accept Mr Macmillan’s view on this.
[22] With respect to Mr Lee’s contention that he used his own money to give change to a customer, Mr Macmillan submitted that he had reviewed the banking for the day and there had been several cash sales on 15 January 2016 which meant there would have been ample cash in the register to give change to a customer. Mr Macmillan’s witness statement states that Mr Macmillan:
“checked that cash sales recorded for the day of 15 January and the days before. We keep a cash float of $250.00 in the till. There were two cash sales on 14 January, one for $198 which have required change of $2.00 only and one of $32.00 which would have required a maximum change amount of $18.00. The third sale is for $250 and no $100.00 notes were in the till so it must have been the right money and no change was required, there were no cash sales recorded which required $30.00 change.” 11
[23] With respect to Mr Lee’s contention that he used his own money to assist a person break a $50 note into $5 notes, Mr Macmillan disputed that a person would come into the store for such a purpose as it was not near the shops 12 and this was the first occasion that this account had been proffered.
[24] Mr Macmillan detailed his actions after he had reviewed the video footage, stating that:
“I informed Mr Kowald about this the following day on Saturday 16 January and that I was thinking about having to dismiss the Applicant for serious misconduct. I wanted to talk to Ian Kowald about it because he had worked with the Applicant for so long. I did not want to make a hasty and not considered decision to dismiss the Applicant and decided to think about it over the weekend. I looked at the Fair Work Ombudsman website about summary dismissal and looked at the Small Business Fair Dismissal Code. I came to the conclusion the Applicant was guilty of serious misconduct and that I had to dismiss him as this was now the third incident and despite a previous warning that his job was at risk he had again taken money without advising me or Mr Kowald about it any reason that in the circumstances it amount to third incident of theft. I then went through the checklist to be sure that I was following the correct procedure in deciding to dismiss the Applicant. I came to this conclusion on Monday night.” 13
[25] On the morning of 19 January 2016, Mr Macmillan confronted Mr Lee in the car park outside the store as he arrived for work.
[26] Mr Macmillan advised Mr Lee that he had viewed footage of Mr Lee taking money from the cash register and viewing pornography at work. Mr Macmillan asked for an explanation. In Mr Lee’s statement and Form F2 he stated that his response to this accusation was that he said words to the effect of, “it was change” and “I didn’t steal.” 14
[27] During the determinative conference, however, Mr Lee stated that he:
“was accused of theft but was not given enough time [to respond], because I went into shock at the time, and I wasn’t given enough time to get my head around what actually happened, to give a proper explanation.” 15
[28] Mr Macmillan stated that Mr Lee admitted to watching pornography. Mr Lee denies this.
[29] The parties disagree on whether the discussion about pornography happened prior to the dismissal or after. I prefer the evidence of Mr Macmillan on this matter. I accept that Mr Macmillan accused Mr Lee of stealing from the business and watching pornography at work and sought a response before he dismissed him.
[30] During the determinative conference, Mr Lee first denied having watched pornography in the workplace. 16 Later, after having had the opportunity to view the CCTV footage of himself using the work computer, Mr Lee recanted his earlier denial.17
The credibility of the witnesses
[31] There are a number of factual disputes between Mr Lee and Mr Macmillan in this matter.
[32] The credibility of Mr Lee’s evidence is undermined by the fact:
1. Mr Lee vehemently denied having watched pornography, but had no choice but to admit to doing so once he viewed video footage played at the determinative conference;
2. Mr Lee’s initial reasons for removing money from the cash register when lodging his unfair dismissal application and the evidence given at the determinative conference varied substantially; and
3. Mr Lee’s recollection of conversations where cash handling issues were discussed and when the allegations put to him was poor.
[33] Conversely, I have found Mr Macmillan to be an honest and truthful witness, his evidence included concessions which were detrimental to his case. For example, that he did not rely on the evidence of Mr Lee’s watching pornography to support his decision to dismiss Mr Lee.
[34] Where Mr Lee’s evidence conflicts with the account given by Mr Macmillan, I prefer the evidence of Mr Macmillan.
Was Mr Lee unfairly dismissed?
[35] Section 385 of the Act defines unfair dismissal. It states that:
- “A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or 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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
[36] I am satisfied that Mr Lee was dismissed and that it was not a case of genuine redundancy. It is therefore relevant to consider the Code. Section 388 of the Act states:
“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.
[37] The Code as declared is set out as follows:
“The Code
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, that 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 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 will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[38] It is clear that Mr Lee was dismissed summarily. A two-step test to determine whether an employer has complied with the summary dismissal aspect of the Code was set out by the Full Bench in, Pinawin v Edwin Domingo. 18It states:
“[29] …There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.
[30]Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.
…
[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. ….
[39] On 15 January 2016, Mr Macmillan viewed footage of Mr Lee removing money from the cash register. Over that weekend, Mr Macmillan consulted the Code and considered the definition of serious misconduct which he understood to include theft. Mr Macmillan also consulted with Mr Kowald. Mr Macmillan did not believe he was entitled to dismiss Mr Lee for watching pornography at work.
[40] On 19 January 2016, Mr Macmillan confronted Mr Lee about the removal of cash from the register. Mr Lee’s explanation did not satisfy Mr Macmillan as to why he had removed money from the cash register.
[41] Mr Macmillan subsequently reported the theft to the Kapunda Police who took a crime report.
[42] I accept that Mr Macmillan believed on reasonable grounds that Mr Lee had stolen cash from the business and therefore, had engaged in conduct sufficiently serious to justify immediate dismissal.
[43] I accept that Mr Macmillan in reviewing the video, speaking to Mr Kowald and giving Mr Lee an opportunity to explain his actions on the video, conducted a reasonable investigation within the meaning of the Small Business Fair Dismissal Code.
Conclusion
[44] I find that Mr Lee’s dismissal was consistent with the Code. Accordingly, Mr Lee was not unfairly dismissed within the meaning of s.385 of the Act and his application is dismissed. An Order 19 to this effect will be issued.
COMMISSIONER
Appearances:
R Lee on his own behalf;
G Macmillan on behalf of the Respondent.
Hearing details:
2016.
Adelaide:
May 2.
<Price code A, PR580469>
1 PN419.
2 PN121.
3 PN98.
4 PN560 - PN664.
5 PN622.
6 Ibid.
7 PN131.
8 PN161.
9 PN1034.
10 PN157.
11 Exhibit R1 at [13].
12 PN231.
13 Exhibit R1 at [12].
14 Exhibit A1at [14]
15 PN32.
16 PN165.
17 PN486.
18 [2012] FWAFB 1359.
19 PR580470.
1
0
0