Sathyajith Vengatasamy v Lycamobile Pty Ltd - [2025] FWC 94

[2025] FWC 94

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Sathyajith Vengatasamy
v

Lycamobile Pty Ltd

(U2024/6645)

COMMISSIONER MATHESON

SYDNEY, 10 JANUARY 2025

Application for an unfair dismissal remedy – valid reason for the dismissal related to the Applicant’s conduct on the balance of probabilities – dishonesty – procedural deficiencies – application dismissed.

On 11 June 2024, Mr Sathyajith Vengatasamy (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Lycamobile Pty Ltd (Respondent).

When can the Commission order a remedy for unfair dismissal?

Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

(b) the Applicant has been unfairly dismissed.

Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i)a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

When has a person been unfairly dismissed?

Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.

Background

The uncontested factual background to the matter is set out below.

The Applicant moved to Australia with his family in 2023 and commenced employment with the Respondent on 15 September 2023.

The Respondent is primarily a mobile virtual network operator (MVNO).[1] It operates in 23 countries, leases radio frequencies from mobile phone network operators and sells SIM cards to consumers.[2] It commenced operations in Australia in 2010.[3]

The Applicant was employed as a Marketing Specialist but was known amongst his colleagues as Head of Traditional Sales.

The allegations and suspension

On the morning of 5 April 2024 the Applicant was suspended from work and was required to hand over his work supplied lap top and mobile phone.

On the afternoon of 5 April 2024, the Respondent, via its Head of Employment Law, Anthony Thompson, wrote to the Applicant indicating it had received a confidential complaint setting out three allegations (Allegation Letter).

The first allegation (Allegation 1) was that during the period from late 2023 to February 2024 the Applicant gave multiple verbal directions (by telephone and during face-to-face meetings) to certain employees of the Respondent:

‘to scan the maximum number of DE sim cards (a maximum of five DE sim cards can be allocated to any individual retailer) to random retailers’ in the Respondent’s system;
‘to delivery only some, or none, of the scanned in DE sim cards to those retailers’;
‘to return the scanned, but undelivered sim cards’ to the Respondent’s Melbourne office;
‘not to tell anyone else in the business about the practice’ the Applicant had instructed them to undertake.

The Allegation Letter said:

‘This had the effect of inflating the company’s activation figures, and also resulted in [the Applicant] inappropriately stockpiling around 50 DE sims that were scanned in the system as having been assigned to various retailers.’

The second allegation (Allegation 2) was in around January 2024:

· the Applicant instructed an employee to prepare three invoices (attached to the Allegation Letter) in respect of an inactive account, ‘Seafarers’, and instructed that employee to deliver the sim cards listed on those invoices to a banned wholesaler, Tony, who was not in any way affiliated with Seafarers; and, on the same occasions;
· the Applicant instructed the employee to provide to Tony a large number of DE sim cards which were not itemised in the attached invoices that were made out to Seafarers.

The third allegation (Allegation 3) was that:

· on around 13 February 2024 the Applicant received a text message from a banned wholesaler, Tony, in which he asked to purchase sim cards;
· the Applicant then forwarded that message to a colleague and directed them to activate the sim cards and process the transaction by arranging for Tony to collect the sim cards and pay for them in cash.

Termination of the Applicant’s employment

The Applicant was ultimately dismissed from his employment on 7 June 2024 and was provided with a letter (Termination Letter) which, by way of summary, stated:

allegations that the Applicant had engaged in certain conduct set out in the Allegation Letter and broadly speaking involved:
o‘directing other employees to register D/E SIM cards, that are provided at no cost, to authorised retailers but not provide the SIM cards to those retailers and instead return them to the Melbourne office so they could be provided to other retailers /wholesalers’; and
o‘supplying SIM cards and recharge cards to an individual (Tony), who represented a wholesaler whose contract with Lyca had been terminated, using fraudulent invoices that purported to be supplying the products to an alternative retailer (Seafarers)’;

on 10 April 2024, the Applicant provided a written response to the allegations;
the Respondent had concluded that each of the allegations had been substantiated;
the substantiated conduct involved serious breaches of the Applicant’s employment contract, the Respondent’s Employee Handbook and the Respondent’s Ethical Code of Conduct which amounted to serious misconduct;
the Respondent had decided to terminate the Applicant’s employment with immediate effect on the basis that he had engaged in serious misconduct.

Remedy sought

The Applicant indicated during the hearing that on 22 August 2024 he commenced new full time employment earning the same salary[4] and his representative indicated he considered financial compensation to be an appropriate remedy.[5]

The hearing

There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.

After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter (s.399 of the FW Act).

The Applicant sought to be represented by a paid agent and the Respondent sought to be represented before the Commission by a lawyer.

Relevantly, section 596(1) of the FW Act provides that a party may be represented in a matter before the Commission by a lawyer or paid agent only with the permission of the Commission.

Section 596(2) provides that the Commission may grant permission for a person to be represented by a lawyer or paid agent in a matter before the Commission only if:

(a) it would enable the matter to be deal with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

The decision to grant permission is not merely a procedural step but one which requires consideration in accordance with s.596 of the FW Act.[6] The decision to grant permission is a two-step process. First it must be determined if one of the requirements in s.596(2) have been met. Secondly, if the requirement has been met, it is a discretionary decision as to whether permission is granted.[7]

On the question of representation, the Applicant submitted that the Applicant was distressed as a result of the dismissal and required assistance. On the question of representation, the Respondent sought to rely on s.596(2)(a) of the FW Act and submitted that the Commission would be assisted by a representative who was familiar with the unfair dismissal jurisdiction. The Respondent also sought to rely on s.596(2)(b) and submitted that the Respondent was a UK based organisation that did not employ persons familiar with the Australian framework. Neither party opposed the other being represented.

Having considered those matters and the material before the Commission, I determined that the matter did involve complexity, including involving issues concerning the regulatory environment applicable to the telecommunications industry and Respondent, and that allowing the parties to be represented by a paid agent and lawyer would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. I therefore decided to exercise my discretion to grant permission for the parties to be represented pursuant to s.596(2)(a) of the FW Act.

Accordingly, at the hearing on 15 October 2024, the Applicant was represented by a paid agent, Mr Dang, and the Respondent was represented by a lawyer, Mr Fawcett of Counsel, instructed by Mr Anaf. I do however note that the Applicant did seek to represent himself at various junctures and this included undertaking his own cross examination of witnesses and making oral submissions.

Witnesses

The Applicant did not file a witness statement however sought to assert a number of facts in both his outline of argument (Applicant’s Outline of Argument). The Applicant, while initially represented, indicated that he would not be represented at the time of filing the Applicant’s Reply Submissions and during the hearing. In the circumstances, and having sought the views of the parties, I considered it appropriate for the Applicant to take an oath or affirmation to attest to the matters he had asserted in the Applicant’s Outline of Argument, to permit the Respondent to cross examine the Applicant about those matters and to enable the Commission to inform itself regarding matters relevant to the determination of this matter, including matters relevant to remedy. As such, the Applicant gave evidence during the hearing.

The following witnesses gave evidence on behalf of the Respondent:

· Mr Brendan Feeney (Mr Feeney), Country Manager for the Respondent; and
· Mr Anthony Thompson (Mr Thompson), Head of Employment Law for ‘Lycatel Services Limited’ a related entity of the Respondent.

Submissions

The Applicant filed submissions in the Commission on 4 September 2024. The Respondent filed submissions in the Commission on 8 October 2024.

Final written submissions were filed by the Applicant on 14 October 2024.

Has the Applicant been dismissed?

A threshold issue to determine is whether the Applicant has been dismissed from their employment.

Section 386(1) of the FW Act provides that the Applicant has been dismissed if:

(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or

(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.

Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.

There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent.

I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the FW Act.

Initial matters

Under section 396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b)   whether the person was protected from unfair dismissal;
(c)   whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d)   whether the dismissal was a case of genuine redundancy.

Was the application made within the period required?

Section 394(2) requires an application to be made within 21 days after the dismissal took effect.

The Applicant was dismissed on 7 June 2024 and the Commission’s records indicate that the Applicant made the application on 11 June 2024. I am therefore satisfied that the application was made within the period required in subsection 394(2).

Was the Applicant protected from unfair dismissal at the time of dismissal?

I have set out above when a person is protected from unfair dismissal.

Minimum employment period

It was not in dispute and I find that the Respondent is not a small business employer, having 15 or more employees at the relevant time.

It was not in dispute and I find that the Applicant was an employee, who commenced their employment with the Respondent on 15 September 2023 and was dismissed on 7 June 2024, a period in excess of 6 months.

I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.

Applicant’s annual rate of earnings

It was not in dispute and I find that, at the time of dismissal, the sum of the Applicant’s annual rate of earnings (being $85,000) together with such other amounts worked out in accordance with regulation 3.05 of the Fair Work Regulations 2009, was less than the high income threshold, which, for a dismissal taking effect on or after 1 July 2024, is $175,000.

I am therefore satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

Section 388 of the FW Act provides that 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.

As mentioned above, I find that the Respondent was not a small business employer within the meaning of s.23 of the FW Act at the relevant time, having in excess of 14 employees (including casual employees employed on a regular and systematic basis).

Was the dismissal a case of genuine redundancy?

Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:

(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

It was not in dispute, and I find that the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.

I am therefore satisfied that the dismissal was not a case of genuine redundancy.

Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.

Was the dismissal harsh, unjust or unreasonable?

Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

(a)   whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b)   whether the person was notified of that reason; and
(c)   whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d)   any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e)   if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f)    the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g)   the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h)   any other matters that the FWC considers relevant.

I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[8]

I set out my consideration of each below.

Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?

In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[9] and should not be “capricious, fanciful, spiteful or prejudiced.”[10] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[11]

Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[12] “The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.”[13]

Evidence

Regulatory context for supplying SIM cards

The regulatory context in which pre-paid SIM cards are supplied is important in understanding why the Respondent says this constitutes serious misconduct.

Mr Thompson’s evidence was that the Respondent is subject to various obligations with respect to the collection and verification of customer data and under the Telecommunications (Service Provider – Identity Checks for Prepaid Mobile Carriage Services) Determination 2017 (Prepaid Determination), it is required to:

ensure its resellers act in a manner that enable it to comply with the balance of its obligations under the Prepaid Determination (cl 2.4(2));
not engage in conduct where:
oan authorised party sells or otherwise provides a prepaid SIM to a third party; and
oneither the Respondent nor the authorised party obtains the necessary information from or verifies the identity of the of the third party (cl. 2.4(3));
not activate a prepaid SIM unless it has:
oobtained the information identified in cl 4.3 of the Prepaid Determination, including the name of the customer and their residential address; and
overified the identity of the customer in accordance with clause 4.5 of the Prepaid Determination;
keep records in relation to each prepaid SIM it supplies to enable its compliance with the Prepaid Determination to be readily ascertained (cl 6.10).[14]

Mr Thomspon also gave evidence that under the Telecommunications Act 1997 (Cth) (Telecommunications Act) and the Integrated Public Number Database (IPND) Code, the Respondent must also ensure that all Public Number Customer Data (PNCD) provided to the IPND Manager is accurate, complete and up to date (cl 4.2.16 of the IPND Code) and this includes the name and address of the customer.[15]

Mr Thompson said that if the Respondent is found to have contravened the obligations set out above, the regulator, the Australian Communications and Media Authority (ACMA) could take enforcement action, including:

issuing infringement notices, breach notices and remedial directions;
commencing proceedings in the Federal Court of Australia against the Respondent, seeking penalties of up to $10 million per contravention.[16]

Mr Feeney’s evidence was that:

it is a regulatory requirement that each SIM card is registered for activation online using the Respondent’s website or via a portal given to Traditional Retailers called POS;
it is necessary to produce a valid form of identification, such as a driver's license or passport, to register a SIM card and show that it is registered to the correct recipient;[17]
this is important because SIM cards activated without the recipient’s correct identification information can more easily be utilised for criminal purposes.[18]

Mr Feeney commenced employment with the Respondent on 4 January 2020[19] and his evidence was that at around this time ACMA sanctioned the Respondent for:

failing to ensure that the correct identification information of recipients that bought its SIM cards was included upon their activation; and
time delays in loading details of all activated SIM cards into a government database for record keeping purposes.[20]

Mr Feeney’s evidence was that in this context compliance was a major focus for the Respondent and he made significant efforts to ‘tighten up’ its processes in relation to this issue.[21]

The Respondent’s DE SIM cards

The Respondent has wholesale and retail customers in Australia.[22] It distributes various types of SIM cards to retail customers.[23] A specific naming convention is used to identify SIM cards being distributed to different types of retailers.[24] A-C SIM cards were distributed to larger retail customers that bought and sold high volumes whereas DE SIM cards were distributed to retail customers with lower sales volumes, such as milk bars.[25] The recommended retail price for a DE SIM card was $30.[26]

Mr Feeney’s evidence was that as a promotional exercise, the Respondent’s sales representatives could provide retailers up to a maximum of five DE SIM cards for free with the objective of ensuring low sales producing stores would have its stock in stores and to help drive distribution and stock in the market.[27]

Mr Feeney said that when a free DE SIM card was provided the sales representative was required to scan the SIM card through a mobile application called ‘Repsly’ which is required to be installed on their company issued phone.[28] Repsly is able to track and identify where a SIM card has been scanned and sales representatives were required to scan the DE SIM cards within a 50 metre radius of the retail shop to which they were distributed.[29]

In respect of Repsly Mr Feeney also gave evidence that:

the Applicant was required to use it;[30]
it recorded the details of deliveries of SIM cards to customers at the point of transaction;[31]
if SIM cards were delivered to a particular customer that delivery should have been recorded in Repsly;[32]

Differences between Respondent’s products and their distribution

During cross examination the Applicant asked Mr Feeney to describe what a ‘voucher’ is and what a SIM card is.[33] By way of summary, Mr Feeney explained:

a SIM card is a package with a SIM card inside it;
the Respondent only sells a prepaid service;
when the customer purchases a product they will have use of that service for the next 28 days or longer dependent upon the plan;
a SIM card purchased may already have credit applied to it, i.e. a certain amount of dollars provides a certain amount of call inclusions, or it could be a blank SIM which is called a $2 SIM;
a $2 SIM card had no value on it but is a unit that is inserted into a customer’s phone which gives them access to the Respondent’s telecommunications services;
in contrast a ‘recharge’ card is not a SIM card but is a credit that applies a value to a customer’s existing SIM card service with the Respondent.[34]

Mr Feeney went on to explain that when a customer purchases a voucher they are considered a genuine customer or long-term customer using the Respondent’s products and services and the Respondent wanted to grow its customer base in this regard.[35]

Mr Feeney also gave evidence that:

every day every representative leaves the office with a select amount of stock which could be in the form of SIM cards or vouchers;
the representatives go out in the field and need to sell stock as the customer or retailer requires it;
there will be the odd occasion where certain retailers doing higher volumes will request a large volume of stock and that will be notified through a relationship with the sales representative;
if a large volume of stock is requested the sales representative will organise that with their local State office, the stock would be activated overnight and the stock would then be available for the representative to distribute;
if, for example, a customer requested 100 SIM cards, that would be considered a large order that would need to be preorganised and distributed;[36]
in the case of vouchers (rather than SIM cards) there is a surplus of stock sitting in each of the offices that are active and can be utilised as needed;[37]
if there were no vouchers available in the State office, the representative would need to speak to a person call Shandeek who would work with head office in London to activate stock so it could be taken to market and sold.[38] In this regard the period between when the additional stock is requested and when it can be activated is 24 hours.[39]

Respondent’s termination of its contract with Lucky Asian Pty Ltd

Lucky Asian Pty Ltd (Lucky Asian) was the Respondent’s largest wholesale customer for approximately 10 years until 30 November 2023 and accounted for around 50 percent of the ‘Traditional’ sales channels. [40] Mr Feeney’s evidence was that these wholesale sales contributed to the Traditional sales number as they were operating in the same retail market.[41]

The Respondent’s contact person within Lucky Asian was a man named Tony.[42]

Mr Feeney’s evidence was that in or around August 2023 the Respondent identified, through a review of its data, a series of patterns of SIM card activation, in respect of SIM cards sold to Luck Asian, that were problematic and symptomatic of fraudulent activity.[43]

Mr Feeney said that on 28 August 2023, the Respondent sent a letter to Tony:

explaining its concerns;
requiring him to immediately cease the registration of the relevant products; and
requesting a response within 21 days.[44]

Mr Feeney’s evidence was that the Respondent did not receive a response from Tony and on 6 November 2023 the Respondent sent a further letter communicating that it had terminated its agreement with Lucky Asian.[45] Mr Feeney said that this decision was made because the Respondent was concerned that ongoing sales of pre-paid SIM cards to Lucky Asian posed an unacceptable regulatory risk.[46] This meant that from 30 November 2023 the Respondent would no longer be selling pre-paid SIM cards to Lucky Asian.[47]

Mr Feeney said that the termination of the contract with Lucky Asian was a talking point within the company because of the regulatory pressure the Respondent was under and because Lucky Asian had been a large customer.[48]

Respondent’s relationship with Seafarers

Seafarers was a customer of the Respondent that would purchase pre-paid SIM cards for sailors docking in Melbourne.[49]

From around July 2023, the Respondent increased the price of the pre-paid SIM cards it sold to retailers, including Seafarers.[50] Mr Feeney’s evidence was that as a consequence Seafarers stopped purchasing SIM cards from the Respondent from August 2023 and switched to a competitor.[51]

Mr Feeney’s evidence was that he corresponded with the Applicant about losing Seafarers’ business in July 2023.[52] The email chain attached to Mr Feeney’s statement appears to suggest that there were concerns that Seafarers may move providers if the price was increased and that the Applicant was to raise this with a person called ‘Piru’ and update Mr Feeney about his discussions.

During cross examination the Applicant was taken to an email attached to Mr Feeney’s statement from Ajith Jayasuriya to Amitesh Chand dated 24 July 2023 and with the subject heading ‘Lyca $30 Starter Sim Packs’.[53] That email indicates that Ajith Jayasuriya was the Club Manager for Seafarers and that he was placing an order for the Respondent’s SIM Cards. It was put to the Applicant that Ajith Jayasuriya was the contact person for Seafarers and was the person who made orders for SIM cards with the Respondent and the Applicant agreed with these propositions.[54]

During cross examination the Applicant was also taken to an email from Kris McFetridge to Ajith Jayasuriya dated 30 April 2024 with the subject heading ‘Lycamobile Order Audit’ and which stated:

‘Hi Ajith,
l am a lawyer at Lycamobile, responsible for our regulatory affairs and telecoms matters and am conducting a review of some of our business in Australia. Seafarers was an active account of Lyca for a long time and we are looking into our relationship from last July to date. Please can you let me know if you can confirm from your records what, if any orders you have placed with us and any details you have around those orders?
Please do let me know it you have any questions and thank you for your help’.

That email trail includes a response from Ajith Jayasuriya dated 1 May 2024 stating:

‘Our last order for Lyca sim cards were received on 08/07/2023 for 400pcs of $30 sims. Thereafter we have not ordered any Lyca sim cards.
Since August 2023 we were not selling any Lyca sim cards.’

During cross examination the Applicant was asked whether he accepted that Lyca lost Seafarers as a customer from July 2023 and the Applicant did not answer the question clearly and appeared to dispute that Ajith Jayasuriya was working for Seafarers at the time the email response was sent.[55]

While the Respondent’s position is that Seafarers stopped purchasing SIM cards from it due to the price increase, during the hearing the Applicant was asked how often prices were restructured for clients with the Applicant’s response below suggesting some volatility in pricing:

“Must be two months/three months, sometimes monthly, sometimes middle of the month, come stock (indistinct), we are to do a different. That is what happened in February 9th. We received email from Piru in London, pricing team, saying that, 'Stop this bulk activations, bulk SIMs to be processed, hold that right now. We are stopping this offer.' That is what he emailed on 9th.”[56]

Applicant’s role

In his role of Head of Traditional Sales, the Applicant was responsible for the Respondent’s traditional retail sales across Australia.[57] The Applicant reported to Mr Feeney.[58]

Mr Feeney’s evidence was that the Applicant’s role did not require him to have dealings with the Respondent’s wholesale customers or its wholesale business.[59] Instead wholesale orders were placed through the Respondent’s Logistics manager who would take receipt of funds and active stock and facilitate delivery.[60]

Mr Feeney’s evidence was that the Applicant had five direct reports, being the State Managers from the Sydney, Melbourne, Brisbane and Perth Offices, including Adrien Chanragan and Amitesh Chand.[61] Mr Feeney said these State Managers had approximately 12 sales representatives working directly under them.[62]

The whistleblower complaint

Mr Feeney’s evidence was that on 21 February 2024, he received an email from employees working in the Applicant’s team who sent him an email titled ‘Whistleblower Complaint’ (Whistleblower Email).[63]

The Whistleblower Email was sent from an individual email and was copied to four other email addresses, that appear to be addresses of Respondent employees, and stated:

‘We have been instructed to carry out the following activities by the Head of Sales (Sathyajith)
- Scan DE sims into random retailers as we visit. Give the retailer 1 or 2 sims and return the rest to the office, or not give anything at all but scan on repsly as if we delivered the DE sims.
- Collect all the old value (old packaging) sims in the market and return them to the office.
- We later found out that the sims we bring back to the office are being delivered to a banned wholesaler (Tony).
- This banned wholesaler has been purchasing under the missionseafarers account at traditional channel rates. In order to compensate for the higher price he pays, DE sims that get returned to the office by zone managers are handed to Tony.
All these instructions were given verbally on the phone or in meetings -face to face. Since we got to know Tony was a banned seller, we felt uncomfortable following the instructions given by SATHYAJITH. We, as a team, do not want to be involved in any illegal activity or be a part of it. We, all zone managers, are going through a lot of pressure and mental stress due to this. It's just that we are hanging on to our jobs out of fear of losing or resigning if these activities are not stopped. Please take appropriate action against this. Looking forward to hearing from you’.

Mr Feeney’s evidence was that the Whistleblower Email attached a document entitled ‘Evidence’ and which showed that:

on 18 and 19 January 2024 invoices were drawn in the name of Seafarers in circumstances where the SIM cards the subject of those orders were to be provided to Lucky Asian and not Seafarers;
on 13 February 2024 the Applicant requested, via text message, that a member of his team make an order of pre-paid SIM cards for Tony; and
on 14 February 2024 an invoice was drawn for the SIM cards ordered by Tony but under Seafarers’ name.[64]

Escalation of the Whistleblower Email

Mr Feeney forwarded the Whistleblower Email on to the Respondent’s Chief Operating Officer, Head of Compliance and Legal Director on 22 February 2024 and in doing so stated:

that the Applicant was conducting and enforcing ethically inappropriate, fraudulent and regulatory non-complaint activity with the Respondent’s products in the Australian marketplace;
that the Whistleblower Email and attached evidence outlined:
oa directive from the Applicant to misuse the Traditional Retailer commission structure by signing out 5 x $30 credits SIM cards at 100 percent margin (i.e. free stock) to retailers, with the directive to not give all that stock to the allocated retailer and instead take remaining stock back to the Melbourne office for distribution elsewhere (i.e. to be given free to wholesalers);
oconfirmation that 100 percent margin sims were being given to a black listed wholesaler, Lucky Asian, to supplement personally negotiated pricing arrangements not aligned to the traditional channels’ approved commission structure;
othe fulfilment of SIM stock orders to Lucky Asian by using fake orders of another retailer;
oevidence demonstrating a request from Tony of Lucky Asian to the Applicant the Applicant forwarding the request to be fulfilled and an invoice matching that exact order under a different retailer (Seafarers);
whistleblower staff had confirmed that Tony was collecting the orders from the office or in some cases staff were instructed to drive and meet Tony in a field to deliver him free credit SIM cards;
the fraudulent methods being used to deliver stock to Luck Asian were ‘the most dangerous risk to Lykamobile Australia’ in a context where it had made written commitments to the regulator not to service Lucky Asian, Lucky Asian had been long identified as a prolific pre-registration seller and the sales would cause regulatory issues such as fines and loss of the telecommunications licence if and when the practice was identified;
the intentional misuse of SIM cards was against company policies and unethical;
traditional sales numbers were being artificially inflated through the ‘targeted churn and burn activity’;
the conflict associated with fraudulently gained sales numbers resulting in personal commission payments was questionable;
the Respondent’s metrics were incorrect as SIM activations were being recorded against retailers that didn’t receive the SIM card nor make the sale;
the names of the whistleblowers and that they were willing to have formal discussions about the matter as required.[65]

Unusual activity involving Seafarers account and SIM card activations

As noted above, Mr Feeney’s evidence was that as a consequence of a price increase Seafarers stopped purchasing SIM cards from the Respondent from August 2023 and switched to a competitor.[66]

Mr Feeney also gave evidence that on around 21 March 2024 he obtained data from DSM, the Respondent’s system that holds SIM distribution, activation and usage data, which demonstrated a surge in SIM card sales and activations under the Seafarers account after Seafarers purported to have stopped purchasing SIM cards from the Respondent.[67] In particular Mr Feeney’s evidence was that the data recorded that:

Seafarers had made regular orders of between 400 and 800 SIM cards (other than in May 2023) between January 2023 up until July 2023, when the price increase took effect;
‘first call activations’ for those SIM cards were between 118 and 633 per month;
Seafarers made no orders between August and October 2023 (inclusive);
Seafarers began making orders again in November 2023, increasing to 1500 SIM cards in February 2024; and
first call activations for Seafarers in February 2024 totaled 1,855.[68]

Mr Thompson’s evidence was that on 30 April 2024 Ms McFetridge of the Respondent sent an email to Ajith Jayasuriya, the Club Manager of Seafarers, requesting confirmation as to whether Seafarers had placed any orders with the Respondent from July 2023.[69] On 1 May 2024 Mr Jayasuriya responded stating:

‘our last order for Lyca sim cards were received on 08/07/2023 for 400pcs of $30 sims. Thereafter we have not ordered any Lyca sim cards’.[70]

Unusual activity involving SIM card activation

Mr Feeney also gave evidence that on 27 March 2024 he obtained a 12 month data set from DSM showing a number of the Respondent’s SIM cards, including DE SIM cards, had been activated by the same end-user in quick succession.[71] Mr Feeney said this reinforced that SIM cards were being registered by someone other than the ultimate customer.[72]

Meeting with the Applicant on 5 April 2024

Mr Thompson gave evidence that on 5 April 2024 he met with the Applicant, together with Mr Feeney and his assistant, via Microsoft teams for the purposes of providing him with information about the alleged misconduct and informing him that while the investigation was ongoing, he would be suspended on full pay.[73]

Mr Thompson’s evidence was that during this meeting the Applicant denied:

engaging in any of the alleged misconduct; and
that he knew who Tony was, or that Tony was from Lucky Asian.[74]

Mr Thompson attached a copy of his notes from the meeting to his witness statement[75] and those notes indicate:

Allegations 1, 2 and 3 were put to the Applicant;
it was communicated to the Applicant that this was serious misconduct and that a decision had not been made about the Applicant’s future;
the Applicant queried whether he had been provided with an email to state that Tony was a banned retailer;
the Applicant was given the option of replying in writing by 10 April 2024 or in a meeting on 12 April 2024;
the Applicant was asked to hand over his work phone and lap top and took issue with this;
the Applicant was advised that he would be provided with a phone, that he was not allowed to work until the Respondent advised otherwise and that he needed to maintain confidentiality and was no allowed to contact suppliers, distributors or Tony;
the Applicant indicated he did not know who Tony was.

Allegation Letter

On 5 April 2024, following the meeting,[76] Mr Thompson arranged for the Allegation Letter, to be sent to the Applicant. [77]. The Allegation letter set out Allegations 1, 2 and 3 and went on to state, by way of summary, that:

the Respondent had credible evidence that the Applicant engaged in the alleged conduct which, on its face amounted to serious misconduct;
the Respondent was seeking a response from the Applicant before it made a final decision;
for this purpose it would arrange a meeting on 12 April 2024 however if the Applicant preferred to respond in writing he was required to do so by 10 April 2024;
the Applicant was suspended with immediate effect and, due to the nature of the allegations, was required to return his work-issued laptop and mobile phone.[78]

The invoices

The Allegation Letter attached three invoices.[79] The first of these was dated 18 January 2024 (18 January Invoice) and the details of that invoice were as follows:

it was made out to ‘Seafarers’;
it indicated it was for the following items:
o200 x ‘$10 Top-up’ at a price of $10 per unit with a discount of 9 percent applied such that the amount charged for these items was $1820. A batch number was stated as well as start and end numbers being 7000 and 7199;
o50 x ‘$15 unlimited’ at a price of $15 per unit with a discount of 9 percent applied such that the amount charged for these items was $682.50. A batch number was stated as well as start and end numbers being 2900 and 2949;
o50 x ‘$30 unlimited’ at a price of $30 per unit with a discount of 9 percent applied such that the amount charged for these items was $1,365. A batch number was stated as well as start and end numbers being 8050 and 8059.

The second invoice was dated 19 January 2024 (19 January Invoice) and the details of that invoice were as follows:

it was made out to ‘Seafarers’;
it indicated it was for 400 x ‘$30 Plan sims’ at a price of $30 per unit and with a 70 percent discount applied such that the amount charged for these items was $3,600’
it stated a batch number and start and end numbers being 440 and 4799.

The third invoice was dated 14 February 2024 (14 February Invoice) and the details of that invoice were as follows:

it was made out to ‘Seafarers’;
it indicated it was for the following items:
o200 x ‘$10 Top up’ at a price of $10 per unit and with a 9 percent discount applied such that the amount charged for these items was $1820. A batch number was stated as well as start and end numbers being 1000 and 1199;
o50 x ‘$20 top up’ at a price of $20 per unit with a discount of 9 percent applied such that the amount charged for these items was $910. A batch number was stated as well as start and end numbers being 5150 and 5199;
o50 x ‘$30 unlimited’ at a price of $30 per unit with a discount of 9 percent applied such that the amount charged for these items was $1,365. A batch number was stated as well as start and end numbers being 9050 and 8099.
o400 x ‘$30 SIMS’ with a 70 percent discount applied that the amount charged for these items was $3,600. No batch nor start and end numbers were stated in the invoice in respect of this item;
the total cost of the order was $7,695.00.

During cross examination the Applicant was taken to an email attached to Mr Feeney’s statement from Ajith Jayasuriya to Amitesh Chand dated 24 July 2023 and with the subject heading ‘Lyca $30 Starter Sim Packs’.[80] That email indicates that Ajith Jayasuriya was the Club Manager for Seafarers and that he was placing an order for the Respondent’s SIM Cards.

In the email for 24 July 2023 Ajith Jayasuriya requests 400 $30 starter SIM packs for the price of $6 per item and requests that the order be cancelled if the wholesale price is more than $6. During cross examination it was put to the Applicant that a $6 price for a $30 SIM card equated to an 80 percent discount and the Applicant agreed.[81] During cross examination it was put to the Applicant that Seafarers wanted a discount of 80 percent and the Applicant agreed that they did at this time.[82] The Applicant was then taken to the 19 January Invoice which provided a smaller discount of 70 percent and appeared to agree that this resulted in a price of $9 per SIM card instead of $6 per SIM card as Seafarers had requested in its email of 24 July 2023.[83]

During cross examination it was put to the Applicant that Seafarers was asking for a price that could not be provided by the Respondent and the Applicant appeared to agree with this proposition.[84] It was then put to the Applicant that it was not true to say that Seafarers was an active retailer in those circumstances to which the Applicant indicated that Seafarers was an active retailer because they were still taking SIM cards from the Respondent, including in January and February, and the invoices reflected this.[85] It was then put to the Applicant that while Seafarers was listed on the invoice, it was not actually the customer receiving the SIM cards to which the Applicant responded:

“‘I am sorry about it. All right. That is where you have to prove me on that”.[86]

During re-examination the Applicant’s evidence was that:

State Managers and hot spot representatives make the invoices for orders placed by State Managers and the Applicant;[87]
he did not make the 18 January Invoice, 19 January Invoice or 14 February Invoice.[88]

During cross examination the Applicant asked Mr Feeney whether there was a possibility that a team member could have two or three invoice books to which Mr Feeney indicated that he had seen instances of this.[89] When asked whether this happened frequently Mr Feeney said:

“It shouldn't ever be happening. And so there was an instance prior to my leaving where there was an employee who had multiple invoice books. After they left it was identified they had multiple invoice books running. That shouldn't ever be the case and that's something I spoke to Shandeek about that that needs to be cleaned up and tidied and under more rigour.”[90]

The 13 February 2024 text messages

Attached to Mr Feeney’s email of 22 February 2024[91] was a text message which appears to have been sent on 13 February and which states:

‘Dear Sathya
I need lyca recharge $10: 200
pc
$20: 50pc $30 unlimited 50
pc
When do you give me?
Let me know
Thanks
For Tony.’

During cross examination it was put to the Applicant that this was a message from the Applicant to the Melbourne HSP team and he agreed to this proposition.[92]

It was then put to the Applicant that in this text message he was putting in an order on behalf of Tony to which the Applicant responded:

“I'm forwarding it to know my people who is – I have (indistinct) I received a message. In that message, that Tony would have send me a message – sorry – Tony would have shared a message. In that message, I have to send it somebody. I have to refer a name, right? And what – how will they know who is that”.[93]

The Respondent’s representative then said:

“My question was a simple one. What you're doing here is putting in an order for Tony”

to which the Applicant responded:

“Whatever I received, I'm sending to my team. Yes. Whatever I received as a message, I forward it to the team.”[94]

It was put to the Applicant that the message referred to Tony from Lucky Asian to which the Applicant responded:

‘No. I told you. The Tony I came to know only after receiving the letter on 5 April…’[95]

A response to that text reads:

‘Already requested to activate via Adrian. I have the order prepare on me already. Waiting for the activation’.

During cross examination the Applicant asked Mr Feeney what he understood Tony was asking for in this message and whether any SIM cards were mentioned in the message.[96] Mr Feeney’s response appeared to be that there was no mention of SIM cards in that message, [97] although he qualified that the first item requested in the text was quite specific in that it referred to recharge vouchers whereas the request for $20 and $30 items were not specifically referring to recharge vouchers or SIM cards.[98]

The Applicant took Mr Feeney to the 14 February Invoice and asked him to confirm what was sold to Seafarers.[99] In response Mr Feeney indicated that the invoice said:

200 pieces of $10 top-up, which is recharge cards;
50 pieces of $20 top-up cards;
50 pieces of $30 unlimited which, based on the discount being provided, are also top-up cards; and
400 $30 SIM cards;
“the first three times, the 200, the 50 and the 5- are all recharge cards being sold at nine per cent discount which is the correct amount for a retailer. And 400 pieces of the $30.00 SIM cares which is at 70 per cent which was the correct amount…”[100]

The order ‘For Tony’ as reflected in the text message of 13 February appears to correspond with the order in the 14 February Invoice with the exception that the order of 400 x ‘$30 SIMS’ at a 70 percent discount price was also included in the 14 February Invoice.

The Applicant pointed out that in the 14 February Invoice there was no range of SIM card numbers provided in respect of the order for 400 SIM cards. During cross examination Mr Feeney confirmed that the local State office has a surplus of active stock that they can pull on each day as they go out to market and that the invoice should have shown the range of the SIM card numbers from SIM card one to SIM card 400.[101]

Applicant’s complaints to human resources on 6 April 2024

On 6 April 2024 the Applicant sent an email to the Respondent’s Group HR Director complaining about the conduct of the meeting on 5 April 2024 and seeking her intervention.[102]

Applicant’s written response to the allegations

On 10 April 2024 the Applicant responded in writing to the allegations.[103]

As noted earlier in this decision, Allegation 1 was that during the period from late 2023 to February 2024 the Applicant gave multiple verbal directions (by telephone and during face-to-face meetings) to certain employees of the Respondent:

‘to scan the maximum number of DE sim cards (a maximum of five DE sim cards can be allocated to any individual retailer) to random retailers’ in the Respondent’s system;
‘to deliver only some, or none, of the scanned in DE sim cards to those retailers’;
‘to return the scanned, but undelivered sim cards’ to the Respondent’s Melbourne office;
‘not to tell anyone else in the business about the practice’ the Applicant had instructed them to undertake.

Allegation 2 was in around January 2024:

· the Applicant instructed an employee to prepare three invoices (attached to the Allegation Letter) in respect of an inactive account, ‘Seafarers’, and instructed that employee to deliver the sim cards listed on those invoices to a banned wholesaler, Tony, who was not in any way affiliated with Seafarers; and, on the same occasions
· the Applicant instructed the employee to provide to Tony a large number of DE sim cards which were not itemised in the attached invoices that were made out to Seafarers.

Allegation 3 was that:

· on around 13 February 2024 the Applicant received a text message from a banned wholesaler, Tony, in which he asked to purchase sim cards;
· the Applicant then forwarded that message to a colleague and directed them to activate the sim cards and process the transaction by arranging for Tony to collect the sim cards and pay for them in cash.

In response to the allegations, the Applicant said, by way of summary:

·   he had given clear instructions to State Managers and representatives to distribute free SIM cards only to DE category retailers and this practice occurred between November 2023 and February 2024;
·   he denied instructing team members to misuse DE SIM cards in any meetings or face to face interactions;
·   he denied the allegation that 50 SIM cards had been allotted to retailers;
·   he denied inappropriate stockpiling of SIM cards;
·   from mid-November 2023 the Corporate Pricing team had asked him to remove old SIM cards from retailers and so he instructed his team members to collect them from retailers and submit them to their respective state offices, with this instruction being only in respect of old SIM cards and not DE SIM cards;
·   representatives were authorised to replace up to five SIM cards in place of old SIM cards, with any quantity above 5 SIM cards requiring his approval;
·   he did not ask any team member to invoice retailers as creating an invoice is a basis process that everyone needed to follow and did not require approval;
·   Seafarers was an active retailer and had been active for many years;
·   he had not dealt with or met any wholesalers;
·   he met Tony, along with Sydney State Manager Adrien, in the Respondent’s Melbourne office when Amitesh introduced them to Tony, handed over stock and received cash in their presence;
·   when Adrian asked which retailer Tony represented, Amitesh replied that he was from Melseafarers (Seafarers);
·   he was not aware that Tony was a banned retailer and was misguided by Amitesh;
·   no information regarding banned retailers was shared with him officially or unofficially;
·   he never instructed any employee to deliver DE SIM cards to Tony;
·   Amitesh visited the Melbourne office until 22 January 2024 and it is possible that he could have prepared the 18 January Invoice and 19 January Invoice;
·   he was not in Melbourne when the 18 January Invoice and 19 January Invoice were generated;
·   there is a possibility that Tony could have messaged him and requested vouchers or SIM cards but he was unable to verify this as he did not have his work phone;
·   if any retailers ask for vouchers or SIM cards he would forward the request to the concerned State Manager or representative in order to fulfil the request;
·   if a retailer was banned the SIM cards or vouchers would not have been activated or processed and had it been known that Tony was a banned retailer this wouldn’t have happened;
·   his team members were unaware that Tony was a banned retailer;
·   SIM cards were sold at a 70 percent discount rate which is the offer provided for all A-Category retailers;
·   he was sceptical about the 14 February Invoice and requested that the Respondent check if the SIM cards were actually delivered and the corresponding amount was deposited into the Respondent’s account because the batch number for the SIM cards was missing from the invoice and without this a question arose as to how the SIM sales amount was tallied;
·   if the total amount in the 14 February Invoice had not been deposited into the bank, he deduced that the invoice was a fake invoice created for the purposes of making fake allegations against him to benefit an individual’s personal motive.[104]

Mr Feeney’s evidence concerning collection of old SIM cards

Mr Feeney’s evidence was that in late 2023 there was an initiative in which sales representatives were asked to retrieve SIM cards held by retailers that were around 10 years old[105] because the Respondent had recently changed its carrier from Telstra to Vodafone and it was not certain that some of its very old products would work with the new carrier.[106]

However Mr Feeney’s evidence was that the Respondent never directed its sales representatives to retrieve unused DE SIM cards from retail shops, there was no reason for this to be done and he did not witness this happening during his employment with the Respondent.[107]

Mr Feeney said the products that were asked to be retrieved were different from the DE SIM cards and were easily distinguishable in size and appearance such that there could have been no confusion between the DE SIM cards and SIM cards being retrieved as a part of the initiative.[108]

The Respondent’s investigation

Mr Thompson gave evidence that on 22 April 2024 Ms McFetridge was appointed by the Respondent to review all material that had been obtained and the Applicant’s response to the show cause letter for the purposes of determining whether the Applicant had engaged in misconduct and what, if any, disciplinary action should be taken.[109] Ms McFetridge was the Respondent’s Legal Director however Mr Thompson’s evidence was that she was no longer employed by the Respondent and declined to participate in the proceedings.[110] Ms McFetridge issued a report setting out findings (Investigation Report) and Mr Thompson attached a copy of this, including annexures that he considered were not the subject of privilege.[111] The Investigation Report indicates that Ms McFetridge:

interviewed Adrien Charangan, the Respondent’s State Sales Manager;
interviewed Mr Feeney;
collected and reviewed:
onotes provided by Minter Ellison in connection with interviews during preliminary enquiries with whistleblowers;
othree images of invoices made out to Seafarers, i.e. the 18 January Invoice, 19 January Invoice and 14 February Invoice;
oan email from Mr Feeney on 12 April 2024 setting out his response to the Applicant’s show cause letter;
orecords of SIM registration and activation together with an explanation provided by Mr Delaviz;
oan email sent by the club manager at Seafarers about its order details from July 2023 onwards;
oa letter sent to Lucky Asian confirming that the Respondent would no longer provide it with SIM cards;
othe Applicant’s employment contract;
othe Respondent’s Whistleblowing Policy;
othe Respondent’s Employee Handbook.

The Investigation Report indicates that Minter Ellison interviewed each of the four whistleblowers (Whistleblowers) and that the investigation notes reflect that:

a Whistleblower referred to as WB#1 said, by way of summary:
ohe was instructed by the Applicant on 3-4 occasions verbally in a meeting or over the phone, usually when he came to Melbourne in October/November and then again in January, to scan SIM cards to random retailers but to then bring them back to the office;
ohe did not know what happened to SIM cards that were delivered back to the office but he delivered them to Adrien Charangan;
ohe did this for about 30 – 40 SIM cards;
oAdrien Charangan instructed him that if he was asked if he was scanning in SIM cards and bringing them back to the office he should say he didn’t do it;
ohe didn’t know Tony or why he was banned and never saw the Applicant deliver any products to him;
a Whistleblower referred to as WB#2 said, by way of summary:
oretailers receive a 70 percent discount and wholesalers receive a 90 percent discount;
oup to five SIM cards can be given to retailers at no cost to incentivize them to sell products;
ohe was instructed by the Applicant on 4-5 occasions over a period between January 2024 and the date of the Whistleblower Email to write an invoice for Seafarers with the appropriate retailer discount but deliver the products to Tony;
ohe was instructed by the Applicant verbally and in a team meeting to scan five SIM cards in for some retailers and bring them back to the office for Adrien Charangan to “take care of”;
ohe knew that Tony was a banned account, that Tony did not work for Seafarers and that Seafarers had stopped buying;
a Whistleblower referred to as WB#3 said, by way of summary:
ohe was instructed to pick up old SIM cards from retailers that had a lot or to assign SIM cards to other retailers but not give all of them to that retailer;
oTony called him and while he had seen him in the office, he didn’t know him and didn’t know he was a banned retailer;
oTony came to pick up SIM cards from him;
othe Applicant asked for old inactive SIM cards to be brought back to the office;
othe Applicant asked him to bring most of the SIM cards back to the office when a retailer with a lot of SIM cards was encountered;
ohe was not asked to assign any new SIM cards as his retailers had a lot of unsold SIM cards;
oin February Seafarers was added to his zone however he did not know who did this or why;
owhen Seafarers was added to his zone his numbers went up from about 300 a month to 1800 a month;
ohe never met with Seafarers;
a Whistleblower referred to as WB#4 said, by way of summary:
othe Applicant had told him that if he scanned five SIM cards he should give two or three to the retailer and keep the others;
ohe did not give the extra SIM cards to a different retailer and he did not know who received them;
ohe had been asked by the Applicant a few times over the phone or when he came to the Melbourne office to replace old stock with SIM cards;
ohe was concerned because his old manager, Amitesh, had told him that he would be contacted by police in cases where he personally scanned SIM cards and criminal activity was later connected to those SIM cards;
oon one occasion in January he returned about 50-60 SIM cards to the office and put them in a box but he did not know whether Tony picked them up;
ohis old manager Amitesh had also asked him to do this once before he left;
oone day in December he saw Tony outside, recognised him as a wholesaler and asked him why he was hiding behind a car with Tony telling him it was because he had been banned;
oonly the manager dealt with Tony;
othe Applicant told him not to tell Mr Feeney or staff from the UK about these activities.

The Investigation Report indicates Ms McFetridge interviewed Adrien Charangan who:

confirmed he knew of Tony and was told by Mr Feeney not to deal with him;
said he didn’t know Tony’s company name;
stated that he met a Tony on 12 February 2023 with Amitesh and the Applicant and that Tony said he was a wholesaler who didn’t buy through his own company but sometimes bought through the retailer Seafarers.

The Investigation Report indicates that Ms McFetridge:

found the ‘evidence compelling’ that the Applicant verbally directed the Whistleblowers to take SIM cards and register them to authorised retailers but not provide them to those retailers so they could instead be provided to other retailers or wholesalers;
found it more probable than not that the Applicant directed staff members to provide or personally provided products using fraudulent invoices that identified Seafarers;
found that the Applicant was selling products to Tony at prices that were inconsistent with the Respondent’s pricing/commission structure.

Mr Feeney also gave evidence that he reviewed the Applicant’s phone activity which showed:

extensive contact with Tony from Lucky Asian by phone and text message; and
Tony making a request of the Applicant for 100 free SIM cards, being DE SIM cards provided to retailers.[112]

Decision to terminate the Applicant’s employment

Mr Thompson’s evidence was that the Investigation Report was circulated to senior management in the United Kingdom who decided that the Applicant’s employment should be terminated.[113]

Meeting between the Applicant and Ashim Badola on 4 June 2024

On 4 June 2024 the Applicant met with Ashim Badola, Regional Sales Manager of the Respondent, who informed him that his employment was being terminated for serious misconduct.[114]

Termination Letter

On 7 June 2024 the Termination Letter was sent to the Applicant[115] and as noted above, indicated that the Respondent had substantiated allegations that the Applicant had engaged in conduct that involved:

‘directing other employees to register D/E SIM cards, that are provided at no cost, to authorised retailers but not provide the SIM cards to those retailers and instead return them to the Melbourne office so they could be provided to other retailers /wholesalers’; and
‘supplying SIM cards and recharge cards to an individual (Tony), who represented a wholesales whose contract with Lyca had been terminated, using fraudulent invoices that purported to be supplying the products to an alternative retailer (Seafarers)’.

Applicant’s evidence concerning Lucky Asian and ‘Tony’

During cross examination the Applicant’s evidence was that prior to 5 April he had never heard of Lucky Asian and was not aware that it had been a big wholesale customer of the Respondent.[116]

During cross examination the Applicant was taken to Mr Thompson’s notes from the meeting on 5 April 2024[117] and the record reflecting that the Applicant said:

“Who is Tony? I don’t know any Tony.”[118]

The Applicant was asked whether he made that comment to which he replied:

“In your emotional time, you say Tony – if I ask you – you know Rick? Which Rick? Which Rick? Which Thomas? Which Anthony?”[119]

The following exchange between the Respondent’s representative and the Applicant then followed:

Mr Fawcett: “Well, Mr Vengatasamy, you were told about the allegations at the beginning of this meeting?”
Applicant:“I'm telling you again. They were reading it, okay? They were reading it one-by-one. But I can't capture everything in my mind, right? So I said no.”
Mr Fawcett: “Mr Vengatasamy, at the beginning of this meeting you were told about an allegation that you were providing Tony with SIM cards?”

Applicant:“No. I'm telling you they have not given me written anything to me, any letter. That's why I asked Anthony Thompson also on that. If they had given me a letter, I could read it. See, I will tell you how it happened: in a Teams meeting, Thompson was talking to me, okay? You are saying allegation 1, 2, 3. Okay. I heard it. But one time you heard, you can't hear everything, right?”[120]

The Applicant was again taken to Mr Thompson’s notes from the meeting on 5 April 2024[121]which indicate that at the beginning of the meeting Mr Thompson summarised Allegations 1-3 from the Allegation Letter, including the parts of the notes that read:

‘2. In around January 2024, you instructed an employee to prepare three invoices (attached) in respect of an inactive account, ‘Seafarers’, and instructed that employee to deliver the sim cards listed on those invoices to a banned wholesaler, Tony, who is not in any way affiliated with Seafarers. Further, and on the same occasions referred to above, you instructed the employee to also provide to Tony a large number of DE sim cards which were not itemised in the attached invoices that were made out to Seafarers.
3. On around 13 February 2024, you received a text message from a banned wholesaler, Tony, in which he asked to purchase sim cards. You then forwarded that message to a colleague and directed them to activate the sim cards and process the transaction by arranging for Tony (Luck Asian – a banned retailer) to collect the sim cards and pay for them in cash’.[122]

In respect of this the Applicant appeared to suggest during cross examination that this had been pasted from the Allegation Letter and did not reflect what Mr Thompson had said.[123]

The Applicant was then taken to the part of Mr Thompson’s notes from the meeting on 5 April 2024[124] which stated:

‘Anthony mentioned, you have given sims to Tony who is not connected to the ‘Seafarers’. It was a large quantity of sims without invoices. You have asked to activate the sims and process the transaction by cash. Tony is a banned retailer. You have directed your colleague to activate the sims and asked Tony to collect the sims with cash.’[125]

It was put to the Applicant that this had not been copied from the letter to which the Applicant responded:

“See, I am not saying – we had long discussion. Two hours 47 minutes. Okay? That was my emotional period. Okay. Tony also said, 'Sir, why are you accusing me – you can discuss with me' – Anthony. Sorry. Anthony. Okay. See, by then, by the time, Tony – Anthony also has Tony name inside him. Okay? So which Tony? And in that period he told me that if any accident happens, you will be handcuffed – okay. Is that statements are available here, because we discussed two hours 47 minutes. The entire minutes were not copied here. That was my first allegation - the meeting starts.
… So whatever is here, we can't take it just like that, because it's a discussion point between two people, and for me it is an emotional period...”[126]

The Applicant was asked whether he accepted that Mr Thompson’s notes record Mr Thompson telling him the allegation was that he was providing Tony with SIM cards to which the Applicant responded:

“There were a lot of discussion happened. I'm not saying no. Because, Mr Fawcett, I will tell you one thing: this was an emotional period, somebody taking your laptop and mobile. I was shocked. Why? Still I couldn't able to get – there were so many questions and on top of me, I have to clarify. So I took some time. I read the mail, everything, whatever they sent. Then I replied very clearly. Why you are not talking about 10 April, which I have shared the – every objection I have replied there.”[127]

The Applicant was again taken to Mr Thompson’s notes which record the Applicant saying 'Who is Tony? I don't know any Tony'?[128] and was asked whether he accepted that was not an honest answer he gave during the meeting to which the Applicant responded:

“No. It was not an honest question. It was a detailed question. There is something – honesty is not that, actually. You put everything on a person, you say honest – yes. I am honest, only. But you ask Tony – which Tony? You ask Mr Sunil, which Sunil? …”[129]

The following exchange then took place between the Respondent’s representative and the Applicant:

Mr Fawcett: “Mr Vengatasamy, you accept that you were told that the allegation was that you were providing Tony with SIM cards, Tony from Lucky Asian, and Tony was not associated with Seafarers? That's what the minutes record in this document?”

Applicant: “That is what was being told to me. There was no - - -“

Mr Fawcett: “So you knew who the Tony was that was being referred to, didn't you?”

Applicant: “I know many Tonys. I'm not denying it, still.”

…
“After landing in this country, wherever I go, I see a lot of retailers in the name called Tony. Okay. I would like to add one more point here. In that same minutes of meeting, I also mentioned I will going to complain to the police because my mobile has been confiscated. I also mention I want to talk to advocate. It is all emotional statements. Okay? This is – okay. You're trying to prove a point. Okay. Fine. Other than the proofs, you're trying to prove a point. Okay. I will answer. Further proceed on, then.”[130]

When the Respondent’s representative asked the Applicant whether this was his honest answer under oath the Applicant indicated he was upset, he had a problem with Mr Feeney, he had complained to human resources about that and he had become emotional.[131]

The following exchange between the Respondent’s representative and the Applicant then took place:

Mr Fawcett: “Yes. Now, if you didn't know who the Tony was who was being referred to, that's what you would have asked at the time, isn't it, Mr Vengatasamy?‑‑‑”
Applicant:“Okay. That is what I'm saying. There are lot of contents missing in this meeting. I raised it in the first place. See, Tony would have keep telling me – I mean Anthony would have keep telling me, okay, in the meeting, that 'You know him. You know him. You know him'. I said no. Somebody – given some name or something – I would have replied to the question raised by Mr Anthony. I would not say it just like that, right?”[132]

It was then put to the Applicant that he knew during the meeting which Tony was being referred to and the Applicant Responded:

“No. I don’t know”.[133]

It was then put to the Applicant that his response that he did not know was a lie to which the Applicant Respondent:

“I know many Tonys. In that – during the meeting, I was emotional, totally. I'm sorry for it. Even I spoke about police. Even I spoke about advocate, everybody. Okay. I'm sorry. If you say a lie, sorry, you to prove a point.”[134]

During cross examination the Applicant was taken to a document which the Respondent said was his call history with Tony between February and March 2024 and the Applicant appeared to accept this. [135] The Applicant was also taken to a document that the Respondent said was a screenshot of a message from Tony to the Applicant dated 11 January and which said:

‘Dear Sathya
How are you ?
I order lyca recharge
$10 500 pc
$20 50 pc
$15 unlimited 100 pc
$30 unlimited 150 pc
Sim lyca $30 400 pc
You give me 100 pc sim Lyca $30 free
If you let me know
I pay cash or transfer
When I can pick up stock
Thanks’

The following exchange then took place between the Respondent’s representative and the Applicant:

Mr Fawcett: “There's a message from Tony to you dated 11 January, it's a bit blurry, but you can make out the date?”
Applicant:“Yes, it is Thursday, 11 January, correct?”
Mr Fawcett: “Yes. And he makes a request for a number of items including 100 pieces SIM $30 free”

Applicant: “All right”

…

Mr Fawcett: “Yes. So he's asking for a hundred free SIM cards, isn't he?”
Applicant:“All right. All right. Yes, he is. It is mentioned in the message, yes. Yes.”
Mr Fawcett: “And you respond “Hi, will ask Adrian to call you”?”
Applicant:“Yes”[136]

The Respondent’s representative then took the Applicant to a further text message that appears to be from Tony to the Applicant, dated 9 February in which Tony says:

‘Dear Saytha
I need 400 sim lyca $30 on today
Thanks’

and the Applicant’s response which reads:

‘Hi Tony, how are you?
Next week, I am coming to Melbourne this coming week. Let us meet at ur office, along with my Pricing team for better discussion’.[137]

The Respondent’s representative asked the Applicant whether he accepted that Tony was using the Applicant’s name to which the Applicant responded:

“Absolutely. Why don’t you read the full message?”[138]

The Respondent’s representative put to the Applicant that he organised for Tony to be provided with free SIM cards and the Applicant did not accept this.[139]

Submissions

The Respondent submitted that there was a valid reason for the dismissal related to the Applicant’s conduct because the Applicant engaged in serious misconduct by:

directing other employees to register DE SIM cards to authorised retailers but not to provide some or all of the SIM cards to those retailers and instead provide them to the office so they could be provided to other retailers or wholesalers;
supplying SIM cards and recharge cards to an individual who represented a wholesaler whose contract with the Respondent had been terminated, using fraudulent invoices that purported to be supplying the products to an alternative retailer (who was no longer an active customer of the Respondent).[140]

The Respondent submitted that the Applicant’s defence during the course of the investigation changed, noting that he first stated “I don’t know any Tony”,[141] before saying he did not know Tony was blacklisted and/or that he thought Tony was genuinely associated with Seafarers.8[142] The Respondent submitted that the Applicant’s evidence about these matters is not persuasive and should not be accepted because:

the documentary evidence from the Applicant’s own mobile phone proves that he engaged in extensive correspondence with Tony;
there is documentary evidence that the Applicant gave instructions to employees to fulfil orders “For Tony”;[143]
the Applicant clearly knew who Tony was and his initial denial in this regard was dishonest;
it was common knowledge that Lucky Asian and Tony were blacklisted and the idea that the Applicant, as Head of Sales, did not know this was “laughable;[144]
the Applicant had enough knowledge of Seafarers to understand that Tony was not associated with it as the Applicant introduced Adrian Chanrangan to the relevant contact at Seafarers;[145]
Seafarers had ceased doing business with the Respondent in July 2023.[146]

The Respondent submitted that the Applicant’s conduct in:

supplying a known blacklisted entity with SIM cards;
arranging such supply in a deceptive manner so as to avoid detection;
not being forthcoming during the investigation,

plainly amounts to a “sound, defensible or well-founded” reason for the dismissal.[147]

The Applicant submitted that there was no valid reason for the dismissal related to the Applicant’s capacity or conduct. The Applicant denied the allegations said, by way of summary:

he did not instruct any of his team members to misuse the SIM cards;
DE SIM cards are free of cost to distribute to retailers;
he instructed State Managers to inform their respective team members to remove old SIM cards (being 5 years old) from the shops and maintain them in the city office in accordance with an instruction from the Corporate Pricing Team from London;
SIM cards were not misused by any team member.[148]
the invoice supporting this allegation was tampered with by adding a line item below the voucher sales, that invoice does not have SIM card details and the handwriting in relation to the last line item that the Applicant says was added differs compared to the first, second and third line items;
no bulk SIM cards were transacted in the month of February, noting that on 9 February 2024 he received an email from the Corporate Pricing team requested that he “stop distributing bulk SIM cards to all Retailers”.[149]

The Applicant appears to infer that he has been ‘set up’ and in this regard submitted that:

he had undertaken an inquiry into SIM cards distributed between November 2023 and February 2024;
he found that over 3000 SIM cards were missing and not reflected in the Respondent’s portal;
he raised his concerns with the Respondent’s Country Head, Mr Brendan, and the Respondent’s Stock Manager, Mr Shangeeth;
the managers could not explain the missing SIM cards nor show a proper ledger of SIM card stock;
within 10 days of this incident false allegations were raised.[150]

In response to the Respondent’s submissions the Applicant submitted, by way of summary:

the email identification of the person sending the Whistleblower Email appears to be from a fabricated email ID[151] and the State Manager, Adrian Charangan was not copied in accordance with the chain of command;[152]
he called two of the HSP Representatives copied on the Whistleblower Email who said they had not made a complaint about him;
Mr Feeney had a grudge against him because he didn’t like someone from overseas taking over the role the Applicant held and who was not a direct report controlled by Mr Feeney;
the text message on 13 February 2024 with an order ‘For Tony’ was sent at 3.06pm and delivering vouchers on 14 February 2024 was not possible so it is evident that someone had ordered and kept stock ready to deliver to Tony before the Applicant’s text;
the fourth line of the 14 February 2024 invoice was added and the Respondent failed to look into this to find out the truth;
on 22 February 2024 he messaged Tony indicating he would meet him at the Melbourne office along with the ‘Pricing Team, for better discussion’ and in this regard the Applicant questioned why he would bring a member from the Corporate Pricing Team in London along for further discussion on offers if his intentions were wrong;
the Respondent failed to investigate who made the 18 January Invoice, 19 January Invoice and 14 February Invoice;
while the Respondent had submitted that no SIM cards were distributed to Seafarers post July its own evidence (a document entitled Sim Distribution in 2024 attached to the Investigation Report)[153] indicates SIM cards were billed to Seafarers during this time.

Having heard the evidence during the hearing the Applicant also submitted:

it was only vouchers that were reflected on the invoices the Respondent sought to rely on rather than SIM cards[154] and selling vouchers benefits the Respondent;[155]
the Respondent’s investigation was flawed.[156]

Consideration and findings

It is apparent that Lucky Asian was a very significant customer for the Respondent and that the Respondent terminated its contract with Lucky Asian because it posed an unacceptable regulatory risk in circumstances where the Respondent had already been the subject of regulator scrutiny. It is also apparent that ‘Tony’ had been the contact for Lucky Asian.

I also find, on the balance of probabilities, that Seafarers was a customer of the Respondent and that, as confirmed in the email of Ajith Jayasuriya, the Club Manager of Seafarers, it last ordered SIM cards from the Respondent on 8 July 2023 as it had stopped ordering SIM cards from the Respondent following a price increase. Mr Feeney’s evidence was that on around 21 March 2024 he obtained data from the Respondent’s systems indicating that Seafarers had begun making orders again in November 2023. It is apparent that the orders and SIM card activations under the Seafarers account after July 2023 should not have occurred as it did not order any SIM card and a question arises as to why they did.

I accept that Mr Feeney received a Whistleblower Email on 21 February 2024. While it appears to have been sent from a personal account, it clearly copies four employees with Respondent email addresses being Radima, Nadun, Kamni and Haris and is said to have been sent on the part of the ‘Victoria HSP team’. I am not persuaded that the email was fabricated an on the balance of probabilities find it was sent on behalf of the employees of the Respondent’s HSP team in Victoria. That Whistleblower Email alleged, among other things, that SIM cards were being delivered to a banned wholesaler, Tony, and that the banned wholesaler had been purchasing under the Seafarers account. The email states:

‘Since we got to know Tony was a banned seller, we felt uncomfortable following the instructions given by SATHYJITH.’

It can be drawn from the Whistleblower Email that the employees on whose behalf it is being sent are suggesting that the Applicant directed them to sell to Tony. I find on the balance of probabilities that the ‘Tony’ they referred to in the Whistleblower Email was the contact from Lucky Asian, with whom the Respondent had terminated its contract.

I accept Mr Thompson’s evidence that at the meeting with the Applicant on 5 April 2024 he summarised the Allegations, as indicated in his meeting notes, and that in doing so, he put the allegation that the Applicant had, in essence, instructed employees to provide SIM cards to a banned wholesaler, Tony and make the invoices out to Seafarers which had an inactive account. I also accept that, as reflected in Mr Thompson’s notes from the meeting on 5 April 2024[157] the Applicant said something along the lines of:

“Who is Tony? I don’t know any Tony.”[158]

The evidence establishes that the Applicant communicated with a ‘Tony’ about orders for the Respondent’s products and that the Applicant gave instructions to employees to fulfil orders “For Tony”.[159] I find on the balance of probabilities that the Applicant did know who Tony was and was dishonest in his response when he was first questioned about the allegations.

Where an employee has been found to have been dishonest, it does not necessarily follow that there was a valid reason for the dismissal. As a Full Bench of the Australian Industrial Relations Commission said, “[I]n some cases, the fact that the applicant has lied might support the conclusion that the termination was not harsh, unjust or unreasonable: McIndoe v BHP Coal Pty Ltd [Print PR901846, 2 March 2001]. In other cases despite the applicant having lied it might be held that there was no valid reason for the termination: Allied Express Transport Pty Ltd v Anderson. Whilst the facts of particular cases might be instructive in a general sense, it is inappropriate to attempt to compare the facts of one case too closely with the facts of another. It is the totality of the relevant facts in each case which must be considered in the context of both the particular employment relationship and the employer’s undertaking.”[160]

After his dishonest response during the meeting on 5 April 2024, the Applicant appears to have reflected on his position when he responded in writing to the allegations. In this respect the Applicant said he met Tony, along with Sydney State Manager Adrien, in the Respondent’s Melbourne office when Amitesh introduced them to Tony, handed over stock and received cash in their presence. The Applicant said that when Adrian asked which retailer Tony represented, Amitesh replied that he was from Seafarers and in this respect, he was misguided by Amitesh and was not aware that Tony was a banned retailer. The Applicant also said in his response that Amitesh himself had visited the Melbourne office until 22 January 2024 and could have prepared the 18 January Invoice and 19 January Invoice. In this respect the Applicant appears to be shifting the blame to Amitesh who was no longer with the business.

Amitesh may well have been involved in some way in the supply of products to Tony under another customer’s name however I find on the balance of probabilities that the Applicant was implicit in this practice because:

he was aware that Ajith Jayasuriya was the contact for Seafarers, not Tony;
he had been communicating with Tony and had asked that orders be placed for him;
his team members at some point established that they should not have been supplying to Tony and raised their concerns about the directions the Applicant was giving to them in the Whistleblower Email;
in the context of the Respondent’s regulatory environment, supplying products to Tony represented an unacceptable risk to the business; and
when the allegations were put to the Applicant in the meeting of 5 April 2024 he did not indicate that he had arranged for products to be supplied to Tony and that he believed he was a representative of Seafarers but was instead dishonest when he said words to the effect of “Who is Tony? I don’t know any Tony”. He likely did this because he knew, as did the Whistleblower team members at the time of the Whistleblower Email, that Tony was a person that he should not have been dealing with.

Having regard to the matters I have referred to above, I find that there was a valid reason for the dismissal related to the Applicant’s conduct, being that, on the balance of probabilities, he arranged for the supply of the Respondents products to Tony when he knew that doing so was wrong and was dishonest about knowing Tony when he was questioned about the allegations.

Section 387(b) - Was the Applicant notified of the valid reason?

The Applicant submitted that he was not notified of the reason for the termination of his employment.[161]

The Respondent submitted that the Applicant was notified of the valid reason, with these reasons being set out in the termination letter of 7 June 2024.[162]

Proper consideration of s.387(b) requires a finding to be made as to whether the applicant “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[163]

The valid reason found to exist under s.387(a) is that, on the balance of probabilities, the Applicant arranged for the supply of the Respondents products to Tony when he knew that doing so was wrong and was dishonest about knowing Tony when he was questioned about the allegations.

Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[164] and in explicit[165] and plain and clear terms.[166]

Allegations 1, 2 and 3 were put to the Applicant by Mr Thompson on 5 April 2024 and via a letter later that day. The Allegation Letter sought a response, including any explanation or clarification of any relevant conduct that the Applicant had engaged in and / or other information which he considered that the Respondent should take into account when making its conclusions and determining what disciplinary action, if any, to take.

On 7 June 2024 the Termination Letter was sent to the Applicant[167] and as noted above, indicated that the Respondent had substantiated allegations that the Applicant had engaged in conduct that involved:

‘directing other employees to register D/E SIM cards, that are provided at no cost, to authorised retailers but not provide the SIM cards to those retailers and instead return them to the Melbourne office so they could be provided to other retailers /wholesalers’; and
‘supplying SIM cards and recharge cards to an individual (Tony), who represented a wholesaler whose contract with Lyca had been terminated, using fraudulent invoices that purported to be supplying the products to an alternative retailer (Seafarers)’.

The Applicant was, in part, notified of the valid reason for his dismissal, i.e. that he had supplied products to Tony, who had been the contact for a banned retailer. However the Respondent did not notify the Applicant that he had been dismissed because he was dishonest about knowing who Tony was.

In all the circumstances, I find that the Applicant was not notified of the reason for his dismissal, being the valid reason I have found to exist under s.387(a).

Section 387(c) - Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?

An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[168]

In order to be given an opportunity to respond, the employee must be made aware of allegations concerning the employee’s conduct so as to be able to respond to them and must be given an opportunity to defend themself. As Justice Moore has stated, “the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That… does not constitute an opportunity to defend.”[169]

The opportunity to respond does not require formality and this factor is to be applied in a common sense way to ensure the employee is treated fairly.[170] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.[171]

Submissions

The Applicant appears to submit that the investigation outcome was not shared with him and he was denied an opportunity to challenge it. I understand the Applicant’s position to be that he was not given an opportunity to respond to any valid reason related to his capacity or conduct.

The Respondent submitted that the Applicant did have an opportunity to respond to any valid reason related to the Applicant’s capacity or conduct and took up that opportunity.[172] In particular, the Respondent submitted that:

the Applicant was formally provided with notice of the allegations in a meeting of 4 April 2024 and by way of letter of the same date;[173]
the Applicant provided a six-page written response to the allegations on 10 April 2024[174] and this was considered as part of the Respondent’s investigation and ultimate findings.

In response to a contention raised by the Applicant that the confiscation of his laptop and mobile at the time of his suspension “creates doubt” that he could not defend the allegations, the Respondent submitted:

the laptop and mobile were confiscated because they could (and, in fact, did) contain evidence relevant to the allegations that may otherwise have been destroyed; and
the Applicant has not provided ant satisfactory reasons as to why the confiscation of the items meant that he could not provide an adequate response to the allegations.[175]

It is apparent that the Applicant was provided with an opportunity to respond to Allegations 1, 2 and 3 which included that he had supplied products to Tony, who had been the contact for a banned retailer. However the Respondent did not provide the Applicant an opportunity to respond to the allegation that he was dishonest about knowing who Tony was in the meeting on 5 April 2024.

Having regard to the matters referred to above, I find that the Applicant was not given an opportunity to respond to the reason for his dismissal prior to the decision to dismiss being made.

I do however note that the mere fact that the Respondent has failed to provide the Applicant with an opportunity to respond does not automatically render the dismissal harsh, unjust or unreasonable. As noted by the Full Bench, “s.387(c) is not a ‘criterion’. It is not the case that a person must be provided with an opportunity to respond to any reason related to conduct or performance. Rather, s.387(c) is a consideration to which the Commission must have regard in its analysis of whether a termination is harsh, unjust or unreasonable…”[176]

Section 387(d) - Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?

Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.

There is no positive obligation on an employer to offer an employee the opportunity to have a support person:

“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”[177]

The Respondent submitted that it did not unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal on the basis that the Applicant did not request, and the Respondent did not refuse for the Applicant to have a support person at any of the relevant meetings.[178]

Having regard to the matters referred to above, I find that the Respondent did not unreasonably refuse to allow the Applicant to have a support person present at discussions relating to the dismissal.

Section 387(e) - Was the Applicant warned about unsatisfactory performance before the dismissal?

As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.

Section 387(f) and (g) - To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise and size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

The Respondent submitted that:

it was a small enterprise of just 24 employees at the time of the dismissal and did not have a dedicated human resources function in Australia and as a consequence, the Applicant’s misconduct was investigated by overseas personnel, located primarily in the United Kingdom;[179]
nevertheless, the Applicant was afforded procedural fairness, including by being given notice of the allegations and a sufficient opportunity to respond before any findings were made.[180]

While the Respondent’s Australian operation may have been relatively small, it was a very large enterprise employing several thousand employees globally[181] and had access to a Head of Employment Law who worked closely with human resources and management to provide legal advice on, among other things, employment litigation, terminations, internal investigations and disciplinary processes.[182] While its geographical dispersion may have been cause for some challenges and its dedicated resources had many jurisdictions to grapple with that, I find that the size of the Respondent’s enterprise was not likely to impact on the procedures followed in effecting the dismissal and there was not an absence of dedicated human resource management specialists in the Respondent’s enterprise.

Section 387(h) - What other matters are relevant?

Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.

The Respondent did not advance any other matters relevant to the Commission’s consideration of whether the dismissal was harsh, unjust or unreasonable.

The Applicant appears to suggest procedural deficiencies in the investigation and processes of the Respondent in dealing with the allegations.

Procedural fairness is one factor that the Commission may take into consideration when deciding if a dismissal has been harsh, unjust or unreasonable. It concerns the decision-making process followed or steps taken by a decision maker, rather than the actual decision itself.

In the context of administrative decision-making, the rules of natural justice are flexible and require fairness in all the circumstances, including the nature of the power exercised and the statutory provisions governing its exercise.[183] Ordinarily, procedural fairness requires that an allegation be put to a person and they be given an opportunity to answer it before a decision is made.[184]

The Respondent’s processes for dealing with the allegations made in the Whistleblower Email could have been better. It should have informed the Applicant about the serious nature of the meeting and its subject on 5 April 2024 so as to enable him to prepare, and potentially arrange a support person. Further, following receipt and consideration of the Applicant’s formal response and the conclusion of the investigation process, a show cause process could have been adopted in which the Respondent identified the matters it had considered warranted his termination and given him an opportunity to put forward reasons as to why his employment should not be terminated. However instead the Respondent appears to have put the allegations to the Applicant and sought a response, conducted its own further enquiries and then moved to termination without further engagement with the Applicant. Notwithstanding this, the Applicant’s response during the meeting on 5 April 2024 was not that of a person who had done nothing wrong, as evident in his dishonest response about not knowing ‘Tony’ and, having considered the evidence before the Commission, the procedural deficiencies were not such that there was likely to be a different outcome for the Applicant’s employment if they were not present.

Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?

I have made findings in relation to each matter specified in section 387 as relevant.

I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[185]

Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of the Applicant was not harsh, unjust or unreasonable because:

in the context of the Respondent’s regulatory environment, supplying products to Tony represented an unacceptable risk to the Respondent and there was a valid reason for the dismissal related to the Applicant’s conduct, being that, on the balance of probabilities, he arranged for the supply of the Respondents products to Tony when he knew that doing so was wrong and was dishonest about knowing Tony when he was questioned about the allegations;

while there were procedural deficiencies in the way in which the Respondent approached the Applicant about the allegations and handled its decision to dismiss him, they were not so material such that the absence of those deficiencies would have rendered a different outcome for his employment.

Conclusion

Not being satisfied that the dismissal was harsh, unjust or unreasonable, I am not satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the FW Act. The Applicant’s application is therefore dismissed.

COMMISSIONER

Appearances:

Mr S Dang on behalf of the Applicant.
Mr D Fawcett of counsel and Mr J Anaf of MinterEllison on behalf of the Respondent.

Hearing details:

2024.
October 15.
By Video using Microsoft Teams.

[1] Thompson Statement at [7].

[2] Thompson Statement at [7].

[3] Thompson Statement at [11].

[4][4] Transcript of proceedings, 15 October 2024, PNs 1213 – 1219.

[5] Transcript of proceedings, 15 October 2024, PN 1402.

[6] Warrell v Fair Work Australia [2013] FCA 291.

[7] Ibid.

[8] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

[9] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

[10] Ibid.

[11] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

[12] Edwards v Justice Giudice [1999] FCA 1836, [7].

[13] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].

[14] Thompson Statement at [13].

[15] Thompson Statement at [14].

[16] Thompson Statement at [15].

[17] Feeney Statement at [23].

[18] Feeney Statement at [24].

[19] Feeney Statement at [1].

[20] Feeney Statement at [25].

[21] Feeney Statement at [26].

[22] Feeney Statement at [9].

[23] Feeney Statement at [10].

[24] Feeney Statement at [10].

[25] Feeney Statement at [11] – [12].

[26] Feeney Statement at [12].

[27] Feeney Statement at [13].

[28] Feeney Statement at [14].

[29] Feeney Statement at [15].

[30] Transcript of proceedings, 15 October 2024, PN 1257.

[31] Transcript of proceedings, 15 October 2024, PN 1258.

[32] Transcript of proceedings, 15 October 2024, PN 1259.

[33] Transcript of proceedings, 15 October 2024, PN 1274.

[34] Transcript of proceedings, 15 October 2024, PN 1275.

[35] Transcript of proceedings, 15 October 2024, PN 1277.

[36] Transcript of proceedings, 15 October 2024, PN 1280.

[37] Transcript of proceedings, 15 October 2024, PN 1281.

[38] Transcript of proceedings, 15 October 2024, PN 1282.

[39] Transcript of proceedings, 15 October 2024, PN 1283.

[40] Feeney Statement at [21], [22].

[41] Feeney Statement at [22].

[42] Feeney Statement at [21].

[43] Feeney Statement at [27] – [28].

[44] Feeney Statement at [29], Attachment BF-1.

[45] Feeney Statement at [30] – [31], Attachment BF-2.

[46] Feeney Statement at [31].

[47] Feeney Statement at [32].

[48] Feeney Statement at [34].

[49] Feeney Statement at [36].

[50] Feeney Statement at [37].

[51] Feeney Statement at [37].

[52] Feeney Statement at [39], Attachment BF3.

[53] Transcript of proceedings, 15 October 2024, PN 591.

[54] Transcript of proceedings, 15 October 2024, PNs 594 - 595.

[55] Transcript of proceedings, 15 October 2024, PNs 657 - 682.

[56] Transcript of proceedings, 15 October 2024 PN 1171.

[57] Feeney Statement at [4].

[58] Feeney Statement at [6].

[59] Feeney Statement at [5].

[60] Feeney Statement at [5].

[61] Feeney Statement at [7].

[62] Feeney Statement at [7].

[63] Feeney Statement at [40].

[64] Feeney Statement at [42].

[65] Feeney Statement, Annexure BF-5.

[66] Feeney Statement at [37].

[67] Feeney Statement at [45].

[68] Feeney Statement at [46]. Note Mr Feeney corrected his witness statement at paragraph 46(d) to replace the reference to 1000 SIM cards to 1500, see Transcript of Proceedings at PN1250.

[69] Thompson Statement at [24].

[70] Thompson Statement at [24], Annexure AT-3.

[71] Feeney Statement at [47].

[72] Feeney Statement at [47].

[73] Thompson Statement at [32].

[74] Thompson Statement at [33].

[75] Thompson Statement at [33], Annexure AT-7.

[76] Thompson Statement at [34].

[77] Thompson Statement at [31].

[78] Thompson Statement at [34], Annexure AT-8.

[79] Thompson Statement at [34], Annexure AT-8.

[80] Transcript of proceedings, 15 October 2024, PN 591.

[81] Transcript of proceedings, 15 October 2024, PN 600.

[82] Transcript of proceedings, 15 October 2024, PN 847.

[83] Transcript of proceedings, 15 October 2024, PN 848 - 850.

[84] Transcript of proceedings, 15 October 2024, PN 1006.

[85] Transcript of proceedings, 15 October 2024, PN 1007.

[86] Transcript of proceedings, 15 October 2024, PN 1008.

[87] Transcript of proceedings, 15 October 2024, PN 1184.

[88] Transcript of proceedings, 15 October 2024, PN 1185.

[89] Transcript of proceedings, 15 October 2024, PN 1270.

[90] Transcript of proceedings, 15 October 2024, PN 1273.

[91] Thompson Statement at [28], Annexure AT-5.

[92] Transcript of proceedings, 15 October 2024, PN 748.

[93] Transcript of proceedings, 15 October 2024, PN 757.

[94] Transcript of proceedings, 15 October 2024, PN 758.

[95] Transcript of proceedings, 15 October 2024, PN 785.

[96] Transcript of proceedings, 15 October 2024, PNs 1312 – 1314.

[97] Transcript of proceedings, 15 October 2024, PNs 1314.

[98] Transcript of proceedings, 15 October 2024, PNs 1317.

[99] Transcript of proceedings, 15 October 2024, PNs 1320 – 1321.

[100] Transcript of proceedings, 15 October 2024, PNs 1322.

[101] Transcript of proceedings, 15 October 2024, PNs 1331

[102] Thompson Statement at [35], Annexure AT-9.

[103] Thompson Statement at [36], Annexure AT-10.

[104] Thompson Statement, Annexure AT-10.

[105] Feeney Statement at [17].

[106] Feeney Statement at [18].

[107] Feeney Statement at [16], [20].

[108] Feeney Statement at [19].

[109] Thompson Statement at [37].

[110] Thompson Statement at [41].

[111] Thompson Statement at [39] – [40], Annexure AT-11.

[112] Feeney Statement at [51].

[113] Thompson Statement at [42].

[114] Thompson Statement at [44].

[115] Thompson Statement at [45].

[116] Transcript of proceedings, 15 October 2024, PN 885 – 887.

[117] Thompson Statement, AT-7.

[118] Transcript of proceedings, 15 October 2024, PNs 698 – 705.

[119] Transcript of proceedings, 15 October 2024, PN 891.

[120] Transcript of proceedings, 15 October 2024, PNs 892 – 893.

[121] Thompson Statement, AT-7.

[122] Transcript of proceedings, 15 October 2024, PNs 895 - 898 .

[123] Transcript of proceedings, 15 October 2024, PN 900.

[124] Thompson Statement, AT-7.

[125] Transcript of proceedings, 15 October 2024, PNs 902 - 904.

[126] Transcript of proceedings, 15 October 2024, PN 905.

[127] Transcript of proceedings, 15 October 2024, PN 911.

[128] Transcript of proceedings, 15 October 2024, PN 915.

[129] Transcript of proceedings, 15 October 2024, PN 920.

[130] Transcript of proceedings, 15 October 2024, PN 923.

[131] Transcript of proceedings, 15 October 2024, PN 925.

[132] Transcript of proceedings, 15 October 2024, PN 929.

[133] Transcript of proceedings, 15 October 2024, PN 932.

[134] Transcript of proceedings, 15 October 2024, PN 933.

[135] Transcript of proceedings, 15 October 2024, PNs 1052 - 1055.

[136] Transcript of proceedings, 15 October 2024, PNs 1062 – 1068.

[137] Transcript of proceedings, 15 October 2024, PNs 1069 – 1077.

[138] Transcript of proceedings, 15 October 2024, PNs 1078, 1094 – 1101.

[139] Transcript of proceedings, 15 October 2024, PN 1090.

[140] Respondent’s ‘Form F3 – Employer response to unfair dismissal application’.

[141] Thompson Statement at [33], Annexure AT-7.

[142] Thompson Statement at [38], Annexure AT-8; Respondent’s Submissions at [18].

[143] Thompson Statement at [38], [40] and Annexure AT-11; Respondent’s Submissions at [19].

[144] Feeney Statement at [34]; Respondent’s Submissions at [19].

[145] Feeney Statement at [38]; Respondent’s Submissions at [19].

[146] Feeney Statement at [37]; Thompson Statement at [24] – [25], Annexure AT-3; Respondent’s Submissions at [19].

[147] Respondent’s Submissions at [25].

[148] Applicant’s Outline of Argument, p.1.

[149] Applicant’s Outline of Argument, p.2.

[150] Applicant’s Outline of Argument, p.2.

[151] Applicant’s Submissions in Reply dated 14 October 2024 at [1].

[152] Applicant’s Submissions in Reply dated 14 October 2024 at [3].

[153] See page 235of the Digital Court Book.

[154] Transcript of proceedings, 15 October 2024, PNs 1382, 1386.

[155] Transcript of proceedings, 15 October 2024, PN 1382.

[156] Transcript of proceedings, 15 October 2024, PN 1388.

[157] Thompson Statement, AT-7.

[158] Transcript of proceedings, 15 October 2024, PNs 698 – 705.

[159] Thompson Statement at [38], [40] and Annexure AT-11.

[160] Woodman v The Hoyts Corporation Pty Ltd PR906309 (AIRCFB, Giudice J, Watson SDP, Grainger C, 11 July 2001), [30].

[161] Applicant’s Unfair Dismissal Application Form F2.

[162] Respondent’s submissions at [26].

[163] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].

[164] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

[165] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).

[166] Ibid.

[167] Thompson Statement at [45].

[168] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].

[169] Wadey v YMCA Canberra [1996] IRCA 568.

[170] RMIT v Asher (2010) 194 IR 1, 14-15.

[171] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.

[172] Respondent’s submissions at [27].

[173] Respondent’s submissions at [27]; Thompson Statement at [31] and Annexure AT-6..

[174] Thompson Statement at [36] and Annexure AT-10.

[175] Respondent’s submissions at [30].

[176] Etienne v FMG Personnel Services[2017] FWCFB 3864, [33].

[177] Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1542].

[178] Respondent’s submissions at [31].

[179] Respondent’s submissions at [33].

[180] Respondent’s submissions at [34].

[181] Thompson Statement at [7].

[182] Thompson Statement at [8].

[183] Kioa v West [1985] HCA 81, [11] (per Gibbs CJ).

[184] Kioa v West [1985] HCA 81, [22] (per Wilson J).

[185] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].

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