Scott Cairns v Trade Port International (Aust.) Pty Ltd
[2016] FWC 6812
•7 OCTOBER 2016
| [2016] FWC 6812 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Scott Cairns
v
Trade Port International (Aust.) Pty Ltd
(U2016/7717)
VICE PRESIDENT HATCHER | SYDNEY, 7 OCTOBER 2016 |
Application for relief from unfair dismissal.
Introduction
[1] Mr Scott Cairns has applied for an unfair dismissal remedy under s.394(1) of the Fair Work Act 2009 (FW Act) in respect of the termination of his employment as a Sales Representative with Trade Port International (Aust.) Pty Ltd (Trade Port). He was dismissed with immediate effect on 27 May 2016 on the basis that he would be paid two weeks’ pay in lieu of notice (although this was not actually paid until 19 July 2016 and was not paid in full because, as discussed later, a deduction of $1556 was made). The official reasons for his dismissal, which were set out in a letter dated 27 May 2016 but which was not sent to Mr Cairns until some weeks later, was that his performance and conduct were unsatisfactory in respect of “Unsatisfactory sales reports to Management” and “Lack of planning and time management”. Mr Cairns contends that his dismissal was unfair, and seeks the remedy of monetary compensation. His application was dealt with at a determinative conference conducted pursuant to s.398 of the FW Act on 19 September 2016.
Preliminary matters
[2] Section 396 of the FWAct requires that four specified matters (set out in paragraphs (a)-(d)) must be decided before the merits of Mr Cairns’ application may be considered. There was no contest between the parties about three of those matters. I find that:
● Mr Cairns’ application was made within the period required by s.394(2);
● Mr Cairns was a person protected from unfair dismissal; and
● his dismissal was not a case of genuine redundancy.
[3] In relation to s.396(c), there was no dispute that Trade Port, having employed only ten persons at the date of the dismissal, was a small business employer as defined in s.23 to which the Small Business Fair Dismissal Code (Code) applied. I will return later to the question of whether Mr Cairns’ dismissal was consistent with the Code.
Facts
[4] The following persons made witness statements and gave oral evidence at the determinative conference:
● Mr Cairns;
● Mr Trevor Braybon, another sales representative employed by Trade Port;
● Mr Sean Lee, Trade Port’s Administration Manager; and
● Mr Vojimir Jesic, Trade Port’s Sales Manager.
[5] Some other witness statements were filed by Trade Port, but no arrangements were made by Trade Port for the attendance at the determinative conference of the makers of these statements. In most cases, the statements went to matters that were not in contest, and it was unnecessary to admit them. One statement, made by Mr Jayson Lee, made a specific allegation against Mr Cairns which was disputed by him, not raised with Mr Cairns when he gave evidence, and not relied upon as a reason for the dismissal even though it appeared to have been known to Trade Port at the time of the dismissal. I considered it would be unfair to admit it because the evidence in it could not be tested.
[6] I consider that Mr Cairns was a credible witness. Although his evidence was affected in some degree by the fact that he was simultaneously the advocate and the principal witness in his own case, he was truthful and generally straightforward in his account of the relevant events. In particular I weighed in his favour his forthright disclosure of matters adverse to his case, including that shortly after he was informed of his dismissal he punched the warehouse door at Trade Port’s premises out of frustration and thereby caused damage. Any difficulties with his evidence were the result of understandable failures of recollection about the detail of certain events.
[7] Mr Jesic was assigned the unenviable role of acting as advocate for Trade Port and being its primary witness even though he played no part in the decision to dismiss Mr Cairns. His evidence was highly credible. He made a number of important admissions in Mr Cairns’ favour, which gave greater weight to the limited criticisms he made of Mr Cairns’ work performance.
[8] Mr Lee gave evidence by telephone, which made it somewhat more difficult to assess his credibility. He was frank about one matter of critical significance, as will be explained. However in relation to another matter about which he professed to have no recollection, I doubt his truthfulness for reasons which are given below. Mr Braybon also gave evidence which I consider to have been unreliable, but this (as explained later) was of little account since relevant documents made the factual position clear.
[9] Trade Port is a wholesaler of tiles. Its managing director is Mr Kie Lee. Mr Cairns commenced employment as an Area Sales Representative on 20 January 2014. His duties required him to deal with current and potential customers. He was paid a base salary plus sales commission, which in the last financial year of his employment caused him to earn a total of $63,726. He was provided with a company car for use in connection with his duties and for such private use as might be approved by Trade Port. In respect of that car, Mr Cairns signed Trade Port’s “Company Vehicle Policy” (Vehicle Policy) on 27 January 2015 and by doing so acknowledged that he had read and accepted the Vehicle Policy. In respect of vehicle damage, the Vehicle Policy provided, relevantly, that “You are to report all damages done to vehicle inside and out” and “If at the time of termination or leaving employment of Trade Port International any damages found which has not been reported you will be responsible for”. Mr Cairns was also provided with a mobile phone, and in this connection the Policy stated: “GPS trackers on phones will also locate company vehicles”.
[10] Until April 2016 there does not appear to have been any difficulty with Mr Cairns’ performance as a Sales Representative. Mr Jesic accepted that Mr Cairns performed his duties competently and generated growing sales for Trade Port, albeit during a period of high demand for building products. However, there was an alleged incident which occurred sometime in 2015 which clearly affected Mr Sean Lee’s view of Mr Cairns. The evidence about this incident only emerged during questioning of Mr Lee when he gave his oral evidence via telephone. It was not referred to in Mr Lee’s witness statement, or that of any other witness; it was not mentioned in Trade Port’s submissions; and it was not raised with Mr Cairns when he had earlier given his evidence. Mr Lee’s evidence about the incident, which was somewhat garbled, can best be summarised as follows:
- Mr Lee called Mr Cairns on his mobile phone but could not get hold of him.
- He then checked the GPS, which showed that Mr Cairns’ car was parked near the Georges River.
- Mr Lee believed Mr Cairns was fishing.
- After half an hour Mr Cairns called Mr Lee back.
- Mr Lee believed that Mr Cairns lied to him, and since then has not trusted him.
[11] Mr Lee could not remember when this occurred in 2015. There was no suggestion that Mr Cairns had been disciplined about this, and there was no written record of the incident placed into evidence. Mr Lee did not explain in what respect he considered that Mr Cairns lied to him, nor did he explain the basis of his conclusion that Mr Cairns was fishing (beyond the proposition that the GPS showed him near a river). There was no clear evidence that the matter was ever actually raised with Mr Cairns, or that Mr Cairns knew that Mr Lee had formed a poor opinion about him because of the alleged incident.
[12] In these circumstances, I can give no weight to Mr Lee’s evidence about this alleged incident in a manner adverse to Mr Cairns’ case. However what is clear is that, as Mr Lee freely admitted, at the time the decision was made to dismiss Mr Cairns, he believed Mr Cairns to be an untruthful and untrustworthy person.
[13] During the course of the first half of 2016, Trade Port’s management formed concerns about the quality of the weekly sales reports being submitted by Mr Cairns and Mr Braybon. Mr Jesic said that the reports being sent in lacked sufficient information, and often appeared to have been typed hastily on the mobile phone “on the road” rather than being prepared properly at a computer in the office. Trade Port’s concerns about this were raised at Sales Meetings on 31 March 2016 and 8 April 2016. The minutes of the first meeting contain the following item: “Weekly Sales Reports – Final warning sales reps need to email Kie Lee, Sean and VJ [Mr Jesic] weekly sales calls, industry movement and what’s new”. The minutes of the second meeting record, as the first item: “Weekly Sales Reports - FINAL WARNING sales reps need to email Kie Lee, Sean and VJ weekly sales calls, industry movement and what’s new. END of every week”. Mr Jesic added that Mr Cairns and Mr Braybon were given a template of a sales report in order to assist them in the preparation of their reports.
[14] In his oral evidence Mr Braybon denied that he and Mr Cairns had been warned about the quality of their sales reports at the Sales Meetings on 31 March 2016 and 8 April 2016. I do not accept that evidence. Not only was that evidence contradicted by the minutes of the two meetings, it was also contradicted by Mr Braybon’s own evidence in his witness statement as follows:
“VJ had on several occasion explained and given verbal and final warnings to both Scott Cairns and myself in our Sales meeting dated 31st March and 8th April 2016. VJ stated that sales reports were unsatisfactory and poorly completed. Both Scott Cairns and I, acknowledged that this would improve and would email Sales Reports to management by the end of week Friday afternoon.”
[15] I accept that Mr Cairns was verbally warned about the quality of his sales reports at the Sales Meetings on 31 March 2016 and 8 April 2016, and at the latter meeting the warning was expressed in emphatic terms.
[16] A difficulty subsequently arose in respect of Mr Cairns’ sales report for the week ending 6 May 2016. Mr Cairns gave evidence that an “intense” call that he received from a client late on 6 May 2016 (a Friday) caused him to neglect to finish his report and send it through that evening. He subsequently sent it on Monday 9 May 2016, and provided supplementary information on 10 and 11 May 2016.
[17] Mr Cairns was required to attend a meeting about this matter on 12 May 2016. What occurred at the meeting may be inferred from a document entitled “Counselling Meeting for Scott Cairns – Agenda”. It identified three issues in respect of each of which an “Action Plan” was identified. The first issue was “Poor Sales Report” (which, being expressed in the singular, presumably referred to the sales report for the week ending 6 May 2016). The action plan was: “To inform management what store[s] were visited. Not detailed and please write down which stores were visited”. The second issue was “Understanding Trade Ports 30 Day Credit Application policy and questioning Management to approve a customer that has been COD for last 4 years”. This issue arose because Mr Cairns had the week before agreed to the request of a client in Pambula, who usually paid cash on delivery, to have 30 days to pay for a particular purchase order without going through the necessary approval process. The third issue concerned a phone call which Mr Cairns received in his car on 28 April 2016 which Mr Jayson Lee had overheard and which he was asked to explain. Mr Cairns sent an email response to these matters, as requested, on 16 May 2016. He never received any response to this email prior to his dismissal.
[18] In his very brief witness statement, Mr Sean Lee said: “12/5/16 Final Warning meeting with VJ - Sales Manager regards to Scott Cairns poor Performance”. There was no elaboration upon this in Mr Lee’s oral evidence, so it is entirely unclear whether a final warning, or any warning, was actually communicated to Mr Cairns at the meeting. Mr Jesic gave no evidence to this effect. The Counselling Meeting Agenda document made no reference to a final warning. Mr Cairns did not understand that such a warning had been given. The letter of termination sent to Mr Cairns some weeks after his dismissal asserted that he had been issued with “a formal counselling letter and final warning” at the meeting on 20 May 2016, but the circumstances of this letter are curious, as explained later. I am not satisfied on the balance of probabilities that any final warning was communicated to Mr Cairns at this meeting although, for reasons which will be explained, I do not consider that this matters much.
[19] At the determinative conference, Mr Jesic raised an issue concerning Mr Cairns’ failure in April and May 2016 to promptly comply with email requests for him to arrange to have the flat spare tyre in his company car replaced and a fire extinguisher installed as a safety measure. Mr Cairns accepted he had not arranged for this to occur prior to his dismissal because of pressure of work. I note that these matters were not raised at the 12 May 2016 meeting, nor at the termination meeting on 27 May 2016 or in the termination letter setting out the reasons for dismissal.
[20] Prior to being informed of his dismissal, Mr Cairns had the opportunity to submit only three further sales reports after the meeting on 12 May 2016. The first was for the week ending 13 May 2015. Mr Jesic accepted that this sales report was satisfactory and accorded with Trade Port’s requirements.
[21] In relation to the second, for the week ending 20 May 2016, Mr Cairns’ evidence was that he sent a comprehensive report to Mr Kie Lee, Mr Sean Lee and Mr Jesic at 4.34pm on Friday 20 May 2016 by email from his mobile phone. No issue was raised about the report by Trade Port’s management. On 27 May 2016, Mr Cairns together with Mr Braybon attended a sales meeting with Mr Jesic at about 10.00am. During the meeting, Mr Cairns noticed that Mr Jesic had a copy of the report which was incomplete. This incomplete version, which was placed into evidence, only showed Mr Cairns’ activities for Monday through to Thursday. Mr Cairns told Mr Jesic that this was not the full report which he sent, and showed Mr Jesic from the sent email on his mobile phone what the full report actually looked like. He then went to his office computer and re-sent the full report, which Mr Jesic then acknowledged. The full report was also placed into evidence, and is the same as the partial report except that it continues on with the sales activities for Friday and adds additional news items. Mr Jesic accepted that the full report complied with Trade Port’s requirements.
[22] Mr Cairns’ evidence about the report for the week ending 20 May 2016 was not challenged or contradicted in any significant way. I accept his evidence. The technical explanation for Mr Jesic not initially receiving the full report is not clear and was not explored by any party beyond a suggestion from Mr Cairns that it did not “load properly”. The only conclusion which can be drawn about this is that Mr Cairns prepared a sales report in accordance with Trade Port’s requirements but, by reason of some technical accident, the full report was not received by Mr Jesic before the end of the week of 20 May 2016. The only legitimate criticism which may be made about Mr Cairns’ performance in connection with this report is that he had sent it from his mobile phone, contrary to Mr Jesic’s earlier advice that his sales reports should be prepared and sent from his office computer. However whether this had anything to do with Mr Jesic not receiving the full report when he should have is not clear.
[23] The third sales report was for the week ending 27 May 2016 (which was the date Mr Cairns was dismissed). There was no indication that this report was taken into account when the decision to dismiss Mr Cairns was made, and indeed that decision seems to have been made before the time when Mr Cairns emailed the report to Mr Kie Lee, Mr Sean Lee and Mr Jesic (at 11.18am on 27 May 2016). If so, the report is of little relevance to this matter. In any event, no particular criticism of it was advanced by Trade Port.
[24] On 24 May 2016 an incident occurred which later had apparent significance in Trade Port’s decision to dismiss Mr Cairns. On that day he visited a client at Brookvale to pick up some defective tiles (using a trailer attached to his vehicle). He visited some other clients in the vicinity while he was there. At about 2.00pm he proceeded to return to Trade Port’s office at Wetherill Park. He chose to return by the route of the Sydney Harbour Tunnel and the M5 and M7 freeways. That seems to me to be far from the shortest route, but no particular issue was made about this at the conference beyond Mr Jesic saying that this was a poor judgment on Mr Cairns’ part. However Mr Cairns became stuck in traffic in the vicinity of the Sydney Harbour Tunnel. By 4.00pm he had made little progress, and rang Mr Braybon to inform him of the delay. He subsequently spoke to Mr Jesic, and proposed that he go straight to his home in Zetland and lock up the vehicle there overnight. The alternative was that he would not get back to Wetherill Park until after 6.00pm, and someone would have to stay back to keep the premises open for him. Mr Jesic approved what Mr Cairns proposed provided that he would be responsible for the security of the load of tiles he was carrying.
[25] During the sales meeting on 27 May 2016, Mr Cairns made a request for clarification of the outcome of the 12 May 2016 meeting, and was told by Mr Jesic that it would be discussed with Sean later. Mr Jesic’s evidence was that he was informed that morning by Mr Sean Lee that a decision had been made arising out of a discussion between Mr Sean Lee and Mr Kie Lie to dismiss Mr Cairns. Mr Jesic was unable to recall the precise time when he was informed of this, but he thought it was some time after the sales meeting. It is clear that Mr Jesic played no part in the making of this decision.
[26] At about 2.00pm Mr Cairns was about to leave the office to visit a client when Mr Jesic asked him to attend a meeting in Mr Sean Lee’s office. Mr Cairns was the only witness to give a detailed account of the meeting which followed, and except for a few details his account was not challenged or contradicted. I accept his evidence about the meeting except for one specific matter, which is identified below.
[27] Mr Cairns said that Sean Lee began by saying: “We have had a couple of meetings about you and its bad news, we are terminating your employment”. He was then handed a document headed “Notice of Termination” which was dated 27 May 2016 and, omitting formal parts, stated:
“It is with regret that we advise that your employment with Trade Port is now terminated.
In terms of your contract that commenced on 20th Jan.2014, we now provide you with payment for two week[s] pay in lieu of notice of termination.
You will also be paid your annual leave loading of 54.932 hrs and superannuation.
Please return your car key, fuel card, unlocked mobile phone with charger and all company documents.
We wish you well for the future and thank you for your contribution.
If you need any additional information, please do not hesitate to contact me.”
[28] Mr Cairns then asked Mr Lee for the reason for his dismissal. According to Mr Cairns, Mr Lee replied “The GPS on your company phone shows you were at an art show in Bicentennial Park on Thursday 19th during work hours”. I am confident that Mr Cairns’ description of Mr Lee’s reply reflects a mishearing and/or a garbled recollection of what Mr Lee actually said. In his oral evidence, Mr Lee made it clear that the accusation was that the GPS showed that Mr Cairns had parked his car on Art Gallery Road in the Domain for 48 minutes on 24 May 2016, and I consider that this was the reason for the dismissal he initially communicated to Mr Cairns at the meeting. Presumably the gravamen of this allegation was that Mr Cairns was taking a lengthy unauthorised break during working hours or engaging in some extraneous activity. As Mr Jesic confirmed, this allegation related to the episode on 19 May 2016 when Mr Cairns attempted to return from Brookvale to Wetherill Park and was delayed in traffic. It may be noted at this point that but for Mr Cairns asking why he was being dismissed, it does not appear that Trade Point intended to provide him with any reason for the dismissal.
[29] Mr Cairns denied the allegation and asked for proof of it. He was told that he was “unable to see it”. Mr Cairns then asked: “What other reason do you have for dismissing me?” Mr Lee then advised Mr Cairns that his last sales report (that is, the report for the week ending 20 May 2016) was unsatisfactory. Mr Cairns’ evidence was that, in response, he explained how he had seen the incomplete version of the report on Mr Jesic’s desk that morning, and had then shown Mr Jesic the complete report. He then showed Mr Lee the email on his mobile phone by which he sent the full report at 4.34pm the previous Friday 20 May 2016. This was not contradicted by Mr Jesic. When Mr Lee, when giving his evidence, was questioned about whether Mr Cairns had given this explanation at the termination meeting on 27 May 2016, he twice answered (on both occasions after a long pause) that he did not remember. I do not accept Mr Lee’s evidence in this respect. I accept that Mr Cairns explained to Mr Lee, as he had earlier explained to Mr Jesic, the circumstances pertaining to his sales report for the week ending 20 May 2016.
[30] Mr Lee gave no response to this and the meeting ended. Sometime later, before Mr Cairns left the premises, two things happened (although in what order is not clear). First, as Mr Cairns readily admitted, he punched the warehouse door out of frustration about his dismissal, and caused some damage. Second, Mr Cairns attempted to remove some personal contact numbers from his mobile phone, but before he could do so he was confronted by Mr Sean Lee and Mr Jayson Lee and told to return the phone and leave the premises. A taxi had been arranged to take him home since he no longer had use of the company car.
[31] A second termination letter setting out the reasons for the termination was later sent to Mr Cairns. The letter is dated 27 May 2016, but was not received by Mr Cairns until approximately eight weeks later. Mr Cairns could not recall the precise date that he received it, but I note that it is not referred to in his unfair dismissal remedy application lodged on 16 June 2016 but is attached to Trade Port’s response to the application lodged on 7 July 2016. It is likely therefore that the letter was only sent (and written) after the lodgement of Mr Cairns’ application. Certainly, despite the letter having been drafted in such a way as to give it the appearance of having been written on 27 May 2016, no explanation was advanced for the delay in sending the letter or indeed why a second termination letter had been considered necessary. The letter, omitting formal parts, stated:
“It is with regret that we advise that your employment with Trade Port International (Aust) Pty Ltd is now terminated.
We consider that your performance and conduct is still unsatisfactory and have decided to terminate your employment for the following reasons:
- Unsatisfactory sales reports to Management
- Lack of planning and time management
The Director of Trade Port International Kie Lee has made it clear that all sales representatives need to email “weekly sales report” movement in market place. A Template for this weekly report was email and verbally explained to the sales team by your Sales Manager Vojimir Jesic (VJ).
On a number of occasions our Sales Manager – VJ had explained the importance of completing the weekly sales report and emailing it to management at Trade Port International by the end of the week. He also explained over the several months that your reporting was poor and unsatisfactory. VJ also explained that the template was easy and straight forward all you needed to do was fill in the weekly sales Template given to you.
On 31st of March 2016, you had a sales meeting with Trevor and VJ. In that meeting, VJ your Sales Manager advised that management needed a much better weekly sales report. Your performance and conduct when meeting deadlines for improvement were unsatisfactory. You were issued with a formal and verbal warning in your sales meeting.
On 8th of April 2016, you had a sales meeting with Trevor and VJ. In that meeting, VJ your sales Manager advised that your weekly sales reports was still unsatisfactory and your level of reporting needed to improve and stated that you need indicate which clients were seen and what was achieved. You were issued with a final warning in that sales meeting.
You also attended a meeting with VJ – your Sales Manager and Sean Lee – Administration Manager on 12th of May. In that meeting you were issued with a formal counselling letter and final warning to improve your performance. It was indicated that your actions were unsatisfactory and not good.
In terms of your contract that commenced on 20th Jan.2014, we now provide you with payment for two week pay in lieu of notice of termination.
You will also be paid your annual leave loading of 54.932hrs and superannuation.
Please return your car keys, fuel card, unlocked mobile phone with charger and all company documents.
We wish you well for the future and thank you for your contribution.
If you need any additional information, please do not hesitate to contact me.”
[32] The entitlements to two weeks’ pay in lieu of notice and accrued leave entitlements were not paid until some weeks after the dismissal, and after Mr Cairns had lodged his application. Indeed Mr Cairns’ evidence was that these payments became a “bargaining chip” in the conciliation of the matter. When they were eventually paid, they were not paid in full. Trade Port deducted a total amount of $1556. This consisted of $1300 for the payment of the insurance excess amount when a claim was made for damage to Mr Cairns’ company car, $150 for the damage which Mr Cairns did to the warehouse door on the day of his dismissal, and $106 for a parking fine incurred by Mr Cairns. Mr Cairns did not dispute the latter two items, but denied that he had any liability to pay the insurance excess amount. He explained that the damage had occurred about 4-6 months prior to his dismissal when he had parked the vehicle in the street outside his apartment in Zetland. The damage had subsequently been noticed when he took the car to Trade Port’s office. At no stage did anyone tell him to arrange to have the damage repaired, and the issue did not come up again prior to his dismissal. Trade Port claims that it was entitled to make the deduction on the basis of the Vehicle Policy. However it did not identify which provision of the Vehicle Policy it relied upon to sustain that position.
[33] Mr Cairns, after having taken a few days to digest his dismissal, quickly began looking for alternative employment. He commenced employment in a new sales position after eight weeks of unemployment and no income. The total remuneration for his new position is approximately the same as for his previous position with Trade Port.
Was the dismissal consistent with the Code?
[34] The Code provides as follows:
“Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[35] In relation to the first section of the Code relating to “Summary Dismissal”, it is clear that Mr Cairns was not dismissed for “serious misconduct”. At the determinative conference, Mr Jesic accepted that there was no suggestion of Mr Cairns having committed serious misconduct prior to his dismissal. Mr Cairns’ punching of the warehouse door might arguably have met the definition of serious misconduct in reg.1.07 1 of the Fair Work Regulations Act 2009, but this occurred after the dismissal was effected. Accordingly the first section of the Code relating to summary dismissal is not relevant.
[36] Mr Cairns’ dismissal therefore falls to be considered under the second section, “Other Dismissal”. The actual requirements of the Code in this section are somewhat difficult to follow because of its poor drafting, as has been observed in a number of decisions. The first paragraph appears to require that an employee be informed of a reason for possible dismissal, and that reason must be a valid one based on the employee’s conduct or capacity to do the job. However the second and third paragraphs apparently contemplate that a valid reason may consist of a performance issue about which the employee was warned and given an opportunity to rectify.
[37] Mr Cairns’ dismissal involved both a conduct reason and a performance reason. The conduct reason was the first reason provided by Mr Lee at the dismissal meeting on 27 May 2016, namely that Mr Cairns had parked his car at Art Gallery Road in the Domain for 48 minutes on 19 May 2016 after he had visited clients at Brookvale. This allegation was said to be based on Mr Cairns’ location as shown by the GPS in his phone. The Code was not complied with in relation to this reason. First, the reason was not communicated to Mr Cairns until after it had been decided to dismiss him. That is, Mr Cairns was not told he was at risk of dismissal because of this reason and given an opportunity to respond.
[38] Second, the reason was not valid because it was without substance. Trade Port made no attempt to prove the allegation. To all appearances, Mr Jesic gave it no credence. Mr Cairns’ evidence that he became stuck in traffic in the vicinity of the Sydney Harbour Tunnel for an extended period in the afternoon of 19 May 2016 was credible, and I accept it. Mr Jesic confirmed that Mr Cairns had rung him about this on the day. Finally, as a matter of common knowledge for a Sydneysider, Art Gallery Road overpasses the freeway shortly after it exits the Sydney Harbour Tunnel on the Southern side. If Mr Cairns was stuck in traffic in the freeway for an extended period in the vicinity of the southern end of the Sydney Harbour Tunnel, the GPS might well appear to indicate that he was stopped on Art Gallery Road. I raised this scenario with Trade Port at the determinative conference, and gave them an opportunity to lodge a written submission about it. No written submission was forthcoming.
[39] If Trade Port had approached this matter with an open mind and given Mr Cairns an opportunity to respond to the allegation, no doubt there would have emerged a ready explanation for what the GPS had indicated. But, as earlier discussed, Mr Sean Lee had formed the preconception based on the earlier GPS incident in 2015 that Mr Cairns was an untrustworthy and untruthful person. I consider that he formed this view without proper justification, with the result that Mr Cairns was dismissed on the basis of a baseless and invalid conduct-related reason, contrary to the requirement of the Code.
[40] The performance reason concerned Mr Cairns’ sales reports. Mr Cairns was warned that his sales reports were not considered satisfactory at the Sales meetings on 31 March 2016 and 8 April 2016, and the issue was raised again at the meeting on 12 May 2016 as one requiring remedial action. I have earlier found that there was no final warning issued at the meeting on 12 May 2016, but even if there was, it ultimately does not matter. Trade Port had not, as at 12 May 2016, considered that Mr Cairns’ inadequate sales reports constituted a sufficient basis upon which to dismiss him. The question is whether the period from 12 May to 27 May 2016 constituted a reasonable opportunity for Mr Cairns to improve his performance, and whether he did so.
[41] As earlier found, there were two sales reports required from Mr Cairns in the period before the decision to dismiss him was made. The report for the week ending 13 May 2016 was conceded to be satisfactory. The full report prepared by Mr Cairns for the week ending 20 May 2016 was also satisfactory, but an unknown technical difficulty caused it to be received by Mr Jesic in only a partial form. Mr Cairns, when he became aware of this on the morning of 27 May 2016, was able to explain this to Mr Jesic and demonstrate from his sent emails on his phone that he had actually sent the full report as required at 4.34 pm on 20 May 2016. However, without any investigation of what had occurred and without giving Mr Cairns any opportunity to explain himself, Mr Kie Lee and Mr Sean Lee had already made the decision to dismiss Mr Cairns under the belief that he had submitted an inadequate report. Again, had this issue been discussed openly with Mr Cairns before any decision was made, the true explanation would have emerged. The performance-related reason for Mr Cairns’ dismissal was therefore also not valid, contrary to the requirement of the Code. Further, the reason (insofar as it related to Mr Cairns’ performance post-12 May 2016) was not communicated to him prior to dismissal and he was accordingly not given a chance to respond.
[42] The third section of the Code deals with procedural matters. It requires that an employee be able to have another person who is not his or her lawyer present in discussions where dismissal is possible. It is not clear whether the Code actually requires such discussions to occur before a dismissal is effected, but if it does, that requirement was not complied with.
[43] My conclusion is that Mr Cairns’ dismissal was not consistent with the Code because it did not comply with the requirements concerning an “Other Dismissal”, and may also not have complied with the requirements relating to “Procedural Matters”.
Whether dismissal was unfair
[44] It is therefore necessary to determine whether Mr Cairns’ dismissal was harsh, unjust or unreasonable having regard to the matters specified in s.387. I will deal with each of the s.387 matters in turn.
Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (s.387(a))
[45] As earlier found, the conduct-related reason for Mr Cairns’ dismissal, namely his alleged 48-minute sojourn at Art Gallery Road on Tuesday 24 May 2016, was not valid.
[46] For completeness, insofar as other matters raised by Trade Port at the determinative conference arguably concerned Mr Cairns’ conduct - such as Mr Cairns’ failure to promptly comply with requests to replace the spare tyre in his car and have a fire extinguisher installed, the agreement to allow the client in Pambula payment terms of 30 days in respect of one purchase order, and the telephone call referred to in the 12 May 2016 Counselling Meeting Agenda - they cannot constitute valid reasons for his dismissal. These matters were all known to Trade Port at the time of dismissal, but were not relied upon to justify the dismissal. They cannot therefore constitute valid reasons for his dismissal (and it was not contended by Trade Port that they did).
Whether the person was notified of that reason and was given an opportunity to respond to any reason related to the capacity or conduct of the person (s.387(b) and (c))
[47] As earlier stated, Mr Cairns was not notified of the conduct-related reason for his dismissal prior to him being dismissed on 27 May 2016, and he was therefore not given an opportunity to respond to that reason.
Whether there was any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s.387(d))
[48] There were no discussions relating to Mr Cairns’ dismissal prior to him being given the notice of termination. Accordingly the issue of him being allowed a support person does not arise.
If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal (s.387(e))
[49] Insofar as Mr Cairns was dismissed for unsatisfactory performance relating to his sales reports, he was warned about this, or his shortcomings were identified, on 31 March, 8 April and 12 May 2016.
The degree to which the size of the employer’s enterprise or 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 (s. 387(f) and (g))
[50] Trade Portis a small business employer and does not have any dedicated human resource management specialists or expertise. It is clear that this detrimentally affected the procedures it adopted in dismissing Mr Cairns.
Any other matters that the Commission considers relevant (s.387(h))
[51] I consider that the following matters are relevant to a consideration of whether Mr Cairns’ dismissal was harsh, unjust or unreasonable:
(1) For the reasons already stated, the performance-related reason for Mr Cairns’ dismissal relating to his sales reports was not valid, notwithstanding that he had been warned about this issue.
(2) Mr Sean Lee, who participated in the decision to dismiss Mr Cairns, can fairly be described as having an unfair bias against him at the time that decision was made, in that he unjustifiably believed Mr Cairns to be untruthful and untrustworthy.
(3) Mr Cairns suffered financial loss as a result of the eight weeks of unemployment and no income which was the consequence of his dismissal.
[52] All of the above matters weigh in favour of the conclusion that Mr Cairns’ dismissal was harsh, unreasonable and unjust.
Conclusion
[53] I consider that Mr Cairns’ dismissal was harsh, unjust and unreasonable. There was no valid reason based on his conduct or performance for his dismissal, he was denied procedural fairness, one of the persons who decided to dismiss him was unfairly biased against him, and his dismissal has caused him financial loss.
Remedy
[54] I do not consider that reinstatement is an appropriate remedy. Mr Cairns does not wish to return to work at Trade Port, and has found satisfactory alternative employment. Mr Sean Lee at least firmly holds the view that Mr Cairns is an untrustworthy and untruthful person, and in the context of such a small business I do not consider that a viable working relationship could be re-established.
[55] I consider that the award of compensation to Mr Cairns would be appropriate given that his unfair dismissal has caused him financial loss. It is therefore necessary an assessment to be made as to the amount of compensation which should be ordered. In assessing compensation, it is necessary under s.392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a)-(g) of the subsection, and it is also necessary to consider the other relevant requirements of s.392. In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was elaborated upon in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. 2
Remuneration that would have been received if the dismissal had not occurred (s.392(2)(c))
[56] As earlier stated, if procedural fairness had been accorded to Mr Cairns, the issues concerning the 19 May 2016 traffic delay and the sales report for the week ending 20 May 2016 would readily have been sorted out. I consider that Mr Cairns had responded positively to the previous warnings about his sales reports prior to his dismissal, and understood the need to provide comprehensive and timely sales reports. Accordingly, if he had not been dismissed, there is no reason to think that his employment could not have continued indefinitely. It certainly would have continued for at least another eight weeks (being the period of unemployment suffered by Mr Cairns consequent upon the dismissal.
[57] Mr Cairns earned a total of $63,726 in the approximately 47 weeks of his employment salary for the financial year ending 30 June 2016, inclusive of sales commissions, before tax. His average weekly remuneration was therefore $1,356 (rounded to the nearest dollar). Eight weeks’ pay is therefore $10,848.
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[58] Mr Cairns did not earn any income during the eight weeks following his dismissal. However he was eventually paid two weeks’ pay in lieu of notice, less a deduction of $1,556. It is not clear what the precise amount paid in lieu of notice was, because it was mingled with a payment for leave entitlements. I shall assume that it was calculated at Mr Cairns’ base rate (that is, exclusive of sales commissions) of $1,058 per week (rounded to the nearest dollar) making a total of $2,116 (rounded to the nearest dollar). However once the deduction of $1,556 is taken into account, he effectively only received $560 as a notice payment. Deducting this amount reduces the compensation amount to $10,288.
[59] Whether he has earned any income since the end of the eight week period is not relevant since that period does not overlap with the period for which he will be compensated under s.392(2)(c).
Other matters (s.392(2)(g))
[60] I do not consider that there is any basis for further deductions for “contingencies”. In relation to taxation, compensation will be determined as a gross amount and it will be left to Trade Port to deduct any amount of taxation required by law.
Viability (s.392(2)(a))
[61] I do not consider that an award of compensation would pose any risk to the viability of Trade Port’s business.
Length of service (s.392(2)(b))
[62] Mr Cairns’ period of service does not justify any adjustment to the amount of compensation that might otherwise be ordered.
Mitigation efforts (s.392(2)(d))
[63] I consider that Mr Cairns made reasonable efforts to mitigate his loss by seeking alternative employment. There will be no adjustment on this score.
Misconduct (s.392(3))
[64] I do not consider that Mr Cairns committed any misconduct, so no deduction is required under s.393(3).
Compensation cap (s.392(5))
[65] The amount of compensation I propose to order is below the compensation cap.
Instalments (s.393)
[66] I do not consider that there is any reason for compensation to be made by way of instalments.
Conclusion
[67] The amount of compensation which is derived from the above considerations is $10,288, less deduction of any tax as required by law. Mr Cairns submitted that I should address two particular issues in my assessment of compensation. The first is that Mr Cairns contends that he had not been paid in full sales commissions owing to him for his work in May 2016, and that the amount owing should be included in the compensation calculation. I reject that submission. An order under s.392 must be for the purpose of appropriately compensating an employee for monetary loss suffered as a result of an unfair dismissal. It does not have the purpose of allowing an employee to recover contractual employment entitlements which were earned and payable prior to the dismissal.
[68] The second issue is the Mr Cairns submits that Trade Port wrongfully deducted $1,300 from the payment made to him after his dismissal for notice and leave, because the Vehicle Policy did not permit it to. While I am inclined to agree that the Vehicle Policy made no provision for this deduction, it is not necessary for me to deal directly with this submission. The compensation amount of $10,288 is intended to compensate Mr Cairns for the income which he lost over an eight week period of unemployment after his unfair dismissal. In calculating that amount, I have taken into account that he was to be paid two weeks’ pay in lieu of notice, but also that he did not receive this amount in full because of the deducted amount (which totalled $1,556 including the deductions for the damage to the warehouse door and the parking fine). On that basis, the amount of $10,288 would fully compensate Mr Cairns for his loss irrespective of the deductions. However, noting that Mr Cairns accepted that he was liable to pay for the damage to the warehouse door and the parking fine, I consider it appropriate to reduce the compensation amount by $256 to reflect this. This reduces the amount to $10,032.
[69] I consider $10,032 (less applicable taxation) to be an appropriate amount of compensation having regard to all the circumstances of the case. A separate order will issue to give effect to this decision.
VICE PRESIDENT
Appearances:
S. Cairns on his own behalf.
V. Jesic for Tradeport.
Hearing details:
2016.
Sydney:
19 September.
1 See Ryman v Thrash Pty Ltd [2015] FWCFB 5264 at [37]-[38]
2 [2013] FWCFB 431; 229 IR 6
Printed by authority of the Commonwealth Government Printer
<Price code A, PR585666>
0
2
0