Tony Merlino v Coles Supermarkets Australia Pty Ltd

[2015] FWC 8106

[2015] FWC 8106

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tony Merlino
v
Coles Supermarkets Australia Pty Ltd
(U2014/8408)

DEPUTY PRESIDENT ASBURY BRISBANE, 22 DECEMBER 2015

Application for relief from unfair dismissal – serious breach of safety

1. BACKGROUND

[1] Mr Guiseppe (Tony) Merlino applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to his dismissal by Coles Supermarkets Australia Pty Ltd (Coles). Mr Merlino commenced employment as a File Manager with Coles on 28 June 1994 at the Coles Toowoomba Kmart Plaza store. In 2002, Mr Merlino was promoted to Store Manager and held that position at the Wynnum, Greenslopes and Cairns Central stores before moving to the Earlville Store in July 2013 as Store Manager. Mr Merlino was dismissed on 2 June 2014.

[2] Mr Merlino’s unfair dismissal application was not made within the period required in subsection 394(2) of the Act. On 20 March 2015 I decided to extend the time for filing 1 on the basis that I was satisfied that there were exceptional circumstances justifying the exercise of the discretion to do so. Mr Merlino is a person protected from unfair dismissal as defined in s.382 of the Act. Coles is not a small business employer and the dismissal was not a case of genuine redundancy. The matter was dealt with by way of a hearing, as it was considered that this was the appropriate course, having taken into account the matters set out in s.399 of the Act and the views of the parties.

[3] Mr Merlino was represented by Ms Anne Milner, Milner Lawyers. Coles was represented by Mr Andrew Pollock, Herbert Smith Freehills. Evidence in support of the application was given by Mr Merlino 2 on his own behalf and by:

● Ms Jennifer Marie Anne Hannam, team member at Coles Cairns Central Store and formerly at Coles Earlville Store;

● Ms Jackie Lamprey, team member at Coles Cairns Central Store; and

● Christopher Bellairs, formerly Bakery Team Member at Coles Earlville Store. 3

[4] Evidence for Coles was given by:

• Ms Shendelle Tyson, formerly Store Support Manager, Earlville store; 4

• Mr Michael Tobys, Fresh Produce Manager, Earlville store; 5
• Mrs Suzanne Baker, Store Support Manager, Cairns Central store; 6
• Ms Yvette Ploeger, formerly Business Assurance Advisor, Queensland; 7
• Mr Jason Millard, formerly Cairns Regional Manager; 8
• Ms Jan Stevenson, State Manager – HR Advisory, Queensland and Western Australia;  9 and
• Ms Reagan Lauder, State Human Resources Manager, HR Operations, Queensland. 10

2. ISSUES FOR DETERMINATION

[5] Mr Merlino was dismissed following an investigation into allegations of misconduct which concluded that he had climbed onto a high stack of twelve pallets affixed to a pallet jack within the Earlville store during a peak trading period. Mr Merlino did this for the purposes of hanging promotional material relating to a charitable event from the ceiling of the store. This conduct is said to be in breach of Coles’ policies and procedures and the terms of Mr Merlino’s contract of employment which requires compliance with those policies and procedures. Further it is asserted that Mr Merlino engaged in misconduct because as a Store Manager and leader of the business, Mr Merlino was expected to adhere to and model Coles’ high standards of behaviours to other employees.

[6] Mr Merlino accepts that the pallet incident did involve a safety risk and conceded at his termination interview that there were more appropriate solutions to hang the promotional material than using a stack of pallets and that he would not do it again. Mr Merlino submits that Coles has not provided any evidence of a safety incident occurring as a result of his conduct and points to differential treatment of other employees who were involved in the pallet incident or other safety incidents, which also constituted breaches of Coles’ policies and procedures. Further, Mr Merlino asserts that if the pallet incident is a valid reason for dismissal then there are other matters that outweigh this incident that the Commission should take into account in finding that Mr Merlino’s dismissal was unfair.

[7] In this regard, Mr Merlino contends that he had an unblemished work history until he moved to North Queensland and that disciplinary action, in the form of warnings given to him after that time, was based on unfair processes that were inconsistent and irregular. In particular Mr Merlino challenges procedures followed in the conduct of a number of food safety audits on the basis of bias on the part of the auditor Ms Baker, and failure by Mr Millard to give proper consideration to other factors that impact on the results. Mr Merlino also contends that warnings were left on his personnel file by Mr Millard so that Mr Merlino was in a vulnerable position when the pallet incident occurred, and that Mr Millard did this because of the poor relationship between Mr Merlino and Mr Millard.

[8] Further, Mr Merlino contends that Mr Scates – who made the decision to dismiss him – did not have the full information about these issues and did not properly consider them before deciding to dismiss Mr Merlino. Mr Merlino also points to issues with the process of investigating his concerns about these matters such that it is not reasonable for management of Coles to have lost trust and confidence in him. In addition, Mr Merlino contends that he has been treated differently to other employees who have engaged in unsafe work practices. Mr Merlino further contends that his excellent performance and disciplinary record (prior to transferring to a location where he was under the management of Mr Millard) and significant improvements shown in a January audit of the Earlville store, meant that but for his dismissal Mr Merlino would have continued his employment indefinitely.

[9] According to Coles, the decision to dismiss Mr Merlino was based on the pallet incident, set against a background of a number of extant final warnings issued to Mr Merlino concerning various “high risk” store audit results at the Cairns Central and Earlville Stores between 2012 and 2014, relating to (among other things) food safety and hygiene issues. Coles contends that the pallet incident involved serious misconduct warranting immediate dismissal and provided a valid reason for dismissal. Coles further contends that there was no procedural defect in the pallet incident investigation; Mr Merlino was notified of the reason for his dismissal; given an opportunity to respond to that reason; Mr Merlino failed to advance any other relevant matters sufficient to sustain a finding that his dismissal was otherwise unfair; and it is open to the Commission to find that Mr Merlino’s dismissal was not unfair on the basis of the pallet incident alone, without having regard to the audit breaches.

[10] It is further submitted that if the Commission has regard to the audit breaches and the final warnings, in conjunction with the pallet incident, there was a valid reason for dismissal. The final warnings also indicate that the pallet incident was not a one off incident but was rather the latest and most serious example of a broader behavioural pattern in relation to safely issues on the part of Mr Merlino. According to Coles, the procedural issues alleged by Mr Merlino in relation to the final warnings following various audit breaches, can only be considered as “other relevant matters” under s. 387(h) of the Act, although Coles does not concede that there were any such issues.

[11] Should the Commission accept that there are issues which call into question the validity of the warnings then Coles submits that the impact of those issues was insignificant when compared to the serious nature of the audit breaches. This is said to be the case even when consideration is restricted to the factual aspects of those breaches admitted by Mr Merlino. According to Coles, the impact of any such issues becomes even more insignificant when the audit breaches are considered in conjunction with the pallet incident. According to Coles, the fact that the pallet incident occurred following Coles’ repeated communication to Mr Merlino around safety and leadership, and his express undertakings to meet those expectations, only amplifies the gravity of Mr Merlino’s conduct and does so regardless of whether or not the final warnings issued to him were properly given. Any such issues should not lead to a finding of unfairness when the Commission weighs the various factors under s. 387.

[12] The issues for determination can be summarised as follows:

● Whether the pallet incident considered in isolation was a valid reason for Coles to dismiss Mr Merlino;

● The legitimacy of the warnings given to Mr Merlino in light of the interpersonal issues between Mr Merlino and Mr Millard and Ms Baker, and the extent to which those warnings should have weighed in the balance when the decision to dismiss Mr Merlino was made;

● Whether Mr Merlino was afforded procedural fairness on the basis that Mr Scates - who decided to dismiss him - considered all relevant information;

● Whether Mr Merlino was treated differently to other employees who were involved in safety breaches including food safety; and

● Whether other factors such as the length of Mr Merlino’s service and his employment record before he moved to Cairns outweigh any misconduct that he may have engaged in so that his dismissal was unfair.

3. EVIDENCE

3.1 The pallet incident

[13] The pallet incident was recorded on CCTV cameras, which indicate the time at which various activities took place. It is not in dispute that on 17 April 2014 Mr Merlino brought a manual pallet jack, holding a stack of twelve pallets, into the Earlville store at or around 11.23am and placed it in front of the service desk. Pallets are wooden frames with open sides to allow the tines of a forklift to be placed between the bottom and top of the pallet to lift it. The top of the pallet consists of wooden slats, some 7 - 10 centimetres apart. The CCTV footage also shows that there were two safety steps on the top of the stack of pallets upon which persons’ can climb to reach things at height.

[14] At approximately 11.26 am Mr Merlino climbed up the side of stack of pallets, using them as a ladder, and stood on top of them for a period of some 28 minutes while using pliers to bend lengths of wire onto a number of kites, which he affixed to the ceiling of the store. The kites were promotional material for a charitable activity in which Mr Merlino proposed to run on a treadmill for a distance equivalent to the distance between Cairns and Brisbane. While on top of the pallets Mr Merlino variously stood, walked and sat on a safety step, which was positioned near the edge of the stack of pallets. The footage does not indicate that Mr Merlino stood on the safety steps while he was on the stack of pallets.

[15] Mr Merlino said that before climbing on the stack of pallets he conducted an assessment and determined that a ladder in the store would not reach the height needed to hang the kites. Mr Merlino said at his termination interview that he considered the pallets to be the safest option for hanging the promotional material. 11 In his witness statement in these proceedings, dated 24 April 2015, Mr Merlino said that the stack of pallets provided him with enough height and stable base upon which to stand.12 In a further witness statement in these proceedings dated 15 May 2015, Mr Merlino said in relation to the assertion that he had not conducted a safety assessment:

“Upon realising that there were no ladders of an appropriate height to place the promotional material, I assessed the situation and deemed the stack of pallets to be the safest method. The stack of pallets provided a broad and stable base upon which to place a safety step and reach the ceiling. No safety incident occurred as a result of my actions and I note that Coles has not asserted that any such safety incident occurred.” 13

[16] Under cross-examination, Mr Merlino agreed that Coles has policies relating to ladders and pallet jacks, which relevantly provide that:

● Team members should avoid using a pallet jack on the shop floor during peak trading periods;

● A pallet jack is only to be used for its intended purpose and not to lift or transport people and other equipment;

● Pallets are not to be stored more than eight high; and

● Where a pallet jack is to be used on the shop floor team members are to ensure clear visibility and seek assistance from another team member to keep customers and other team members safe.

[17] Mr Merlino also agreed that Coles’ policies and procedures state that team members should never stand on crates, trolleys, boxes or shelving, which are items that are not designed for the purposes of reaching products at height. 14 Further, Mr Merlino agreed that he is aware of these policies and procedures and is required as Store Manager to model them to employees and to ensure that employees undertake training in respect of those policies and procedures.

[18] During the hearing, CCTV footage of the pallet incident was viewed and Mr Merlino was cross-examined about the footage. Mr Merlino agreed that when he placed the pallets near the service desk there was “quite a bit of traffic” in the Store but said that the trolleys are over the other side of the store and that customers do not usually enter the store in the area where he placed the pallets. Mr Merlino also said that there were barriers in the area where the pallets were placed and the pallets were against a structure upon which promotional material for a telephone company was placed.  15

[19] Mr Merlino agreed that he climbed up the side of the pallets using them as a ladder, and that he was pulling on the pallets from the side using his weight when he did this. Mr Merlino also agreed that the safety steps were on top of the pallets with one placed up against the end of the top pallet while he was climbing. Mr Merlino did not dispute that the other safety step was jutting over the edge of the top pallet and maintained that the pallets were stacked to “shoulder height”. Later when the proposition was put to him that the stack of pallets reached a height just above his head, Mr Merlino did not disagree and said that he did not wish to replay the CCTV footage to confirm the height of the stack of pallets.

[20] While on top of the pallets, Mr Merlino had blunt edged pliers which he used to bend wire that he was going to use to attach the kites to the ceiling. At one point during cross-examination Mr Merlino said that he had one pair of pliers on his person while he was on top of the pallets. Later Mr Merlino agreed that he had two pairs of pliers with him on top of the pallets but maintained that both were blunt edged. 16 Mr Merlino said that when he climbed down from the pallets he had the pliers in his pocket. There is no evidence about whether Mr Merlino secured the pliers at other times such as when he was climbing up on top of the pallets or while he was not using the pliers.

[21] Mr Merlino agreed that at times he sat on the safety step on top of the pallets while the safety step was up against the edge of the pallet and that if he had fallen from the pallets the back of his head would have struck the service desk. Mr Merlino also agreed that there were times when, had he taken a step backwards, he could have tripped on the safety step and fallen from the top of the stack of pallets. The footage did not show Mr Merlino standing on either of the safety steps.

[22] The CCTV footage showed that there were a number of persons in the area where Mr Merlino was working while on top of the stacked pallets. There were members of staff of Genesis – a gym located in the Centre – who were located near the stack of pallets and were carrying out promotional activities. Mr Tobys was also in the area. Mr Merlino said that Mr Tobys and the staff of the gym were assisting him to keep customers away from the pallets. The CCTV footage showed a number of customers walking past the pallets including women pushing prams, a woman holding a baby and a number of children. Some customers stood near the pallets apparently looking up at Mr Merlino.

[23] The CCTV footage shows that before climbing down from the pallets, Mr Merlino stacked the two safety steps one on top of the other. Mr Merlino said that he put the pliers in his pocket while he climbed down. Mr Merlino then moved the pallets to another area in the store, using the pallet jack. Another staff member later removed the pallet jack and left the pallets in the same position in the store. The CCTV footage indicates that the stack of pallets was left in the store until midday. The safety steps were still on top of the pallets. Mr Merlino maintained that the pallets and the pallet jack were not a tripping hazard but agreed that Coles’ policy and procedure stipulates that no more than eight pallets should be stacked. Mr Merlino could not recall whether he removed the stack of pallets but said that he brought the pallet jack back to the stack of pallets after the other staff member had removed the pallet jack. In response to the proposition that it would not be appropriate to move a stack of pallets with two safety steps on top of them, Mr Merlino said that it is “pretty stable” on top of the pallets.

[24] Mr Merlino maintained that he took every precaution to be as safe as he could be while hanging the kites and said that he did not report the incident because he did not consider it to be unsafe. In relation to the precautions he took, Mr Merlino said:

“I asked my team member to supervise and help me with the site. I also had team members from Genesis [Gym] there. Those barriers that I moved later on, those cardboard barriers, I put those up as a bit of a deterrent for customers coming through there.” 17

[25] In response to a question from me about what barriers were in place, Mr Merlino said: “human barriers”. 18 Mr Merlino agreed that the Genesis Gym team members are not employed by Coles, but rejected the proposition that he did not obtain assistance from Coles team members because he knew that what he was doing was unsafe. Mr Merlino maintained that he did have assistance from a Coles team member – Mr Tobys. Mr Merlino also agreed that he was not directed by anyone at Coles to hang the promotional material for the charity from the ceiling of the Earlville store and that he was not directed by Coles as to the method he employed to do so. Further Mr Merlino agreed that he made his own decisions in relation to these matters as the Store Manager.

[26] Mr Tobys, saw Mr Merlino bring the pallet on to the shop floor using the pallet jack and climb to the top of the pallets so that he could reach the ceiling. Mr Tobys observed Mr Merlino hanging kites from the ceiling. Mr Tobys stated that Mr Merlino placed a safety step on top of the pallets and stood on top of the step and stepped up and down on the step a number of times. Mr Tobys said that he thought Mr Merlino’s behaviour was strange and that it was commonly understood that pallets are not to be used in this way. Mr Tobys also said that he did not see anyone assisting Mr Merlino and that Mr Merlino did not discuss the performance of the task with him beforehand.

[27] According to Mr Tobys, Mr Merlino was very high off the ground and if he had fallen, Mr Merlino could have broken bones and seriously injured himself. As the area was not roped off or isolated, there was also a risk that Mr Merlino could have fallen and seriously injured someone that was passing by. Mr Tobys said that pallets are not very safe, break frequently, and there was a risk that they could have done so while Mr Merlino was standing on them.

[28] Under cross-examination, Mr Tobys maintained that he stood watching Mr Merlino the entire time he was on the pallets, but did not have a discussion with Mr Merlino. Mr Tobys also maintained his recollection that Mr Merlino stepped up and down on the safety steps while on top of the pallets. Mr Tobys said he did not do anything to stop people coming in to the area while Mr Merlino was on top of the pallets and that he was standing in that area because it was adjacent to the produce area of which he is the manager. Mr Tobys agreed that the pallets did not break and he did not see any broken pallets in the stack, but maintained that there could have been broken pallets in the stack and not all pallets were visible.

[29] Mr Tobys said that there were customers in the area but he did not stop them or rope off the area. In response to the proposition that he could have taken these actions, Mr Tobys said:

“I wasn’t the store manager either. I’ve dealt with a few store managers. You can’t – If they want to do something, they do it. It’s as simple as that.” 19

[30] In response to the proposition that he was in a perfect position to do something about safety in relation to the pallet incident, Mr Tobys said that no-one came directly near the pallets, but if Mr Merlino had fallen he might have hit an “unlucky customer”. In response to the proposition that pallets are stable, Mr Tobys said that they have slats with ten centimetre gaps between them and that Mr Melino’s foot could have gone into a gap causing him to trip and fall.

[31] Mr Tobys was shown CCTV footage in which he variously stood watching Mr Merlino; walked back to observe Mr Merlino from a distance; leaned on the pallets; and handed Mr Merlino a kite. Mr Tobys maintained that Mr Merlino did not ask him for assistance and that his experience of store managers generally is that there is no stopping them if they want to do something. Mr Tobys also said that he did not suffer any repercussions in the form of counselling or discipline for his role in the pallet incident.

[32] Ms Tyson stated that she saw Mr Merlino standing on safety steps on top of the stack of pallets. Ms Tyson states that she was concerned for Mr Merlino’s safety and the safety of customers and team members. After Mr Merlino got down from the pallets, Ms Tyson spoke to him and said words to the effect of “What do you think you’re doing? You’re on top of 12 pallets on the shop floor in breach of safety in full view of customers”. Ms Tyson states that in response, Mr Merlino told her that he was the Store Manager. Ms Tyson contacted Ms Tina Smith, Regional HR Manager, on 30 May 2014 to complain about the pallet incident.

[33] Under cross-examination, Ms Tyson maintained that she saw Mr Merlino standing on the safety steps on top of the pallets. Ms Tyson agreed that she is the Assistant Store Manager and that her role includes assisting Mr Merlino to deal with issues that arise in the store. Ms Tyson also has authority over department managers. In response to the proposition that as Assistant Store Manager she did not say anything to Mr Merlino while he was on top of the pallets, Ms Tyson said that she was in the bakery when she saw Mr Merlino on top of the pallets and she spoke to him when he climbed down and walked over to her.

[34] Ms Tyson agreed that she did not email Ms Smith to report the pallet incident until six weeks after it occurred, but said that she contacted Ms Smith by telephone at the beginning of May – two weeks after the incident – to report it. Ms Tyson also agreed that she did not tell Ms Smith that she had done nothing about the pallet incident while it was happening, notwithstanding that she told Ms Tyson that she was concerned that members of the public could have been injured.

2.2 The termination of Mr Merlino’s employment

[35] On 2 June 2014 Mr Merlino attended a meeting with Mr Millard and Ms Reagan Lauder in relation to the pallet incident. Mr Merlino’s wife attended the meeting as his support person. Mr Merlino’s employment was terminated at that meeting. Mr Merlino recorded the meeting on his Dictaphone and said that he did this due to unfair treatment he had received from Mr Millard. Mr Merlino attached a transcript of the recording he took at the meeting to his Second Affidavit. 20 The transcript indicates that Mr Merlino made a lengthy statement at the commencement of the meeting in which he raised concerns, including about the conduct of Mr Millard in relation to a an earlier meeting held in January 2014 and Mr Millard keeping a first and final warning to Mr Merlino open, when there was no basis for Mr Millard to do so.

[36] The transcript indicates that the allegations about the pallet incident were put to Mr Merlino and he responded by stating that:

● He was assisted by team members including staff of Genesis Gym;

● Safety issues were “in accordance” and there were no customers nearby;

● There were no ladders high enough to reach the ceiling;

● The pallets were a safe and stable base for Mr Merlino to stand on, it was safer than any other method and Mr Merlino considered everything to be as safe as possible; and

● Pallets are often on the floor on pallet jacks and this is not uncommon practice within a store.

[37] Mr Merlino also stated that in hindsight, he should have considered another option, and in future would seek advice in managing a situation. The transcript indicates that the meeting broke so that Coles’ representatives could consider Mr Merlino’s response. When the meeting resumed, Mr Merlino was told that his employment was to be terminated and that he would be paid five weeks wages in lieu of notice. The transcript records that Mr Merlino stated that he would not accept the termination of his employment and that he was informed that he should raise his concerns about the manner in which he had been treated, with Coles’ Human Resource Management staff.

[38] A termination letter dated 3 June 2014 21 was sent to Mr Merlino, stating:

“…

Dear Tony,

This letter is to confirm your employment with Coles Supermarkets (Australia) Pty Ltd was terminated effective 2 June 2014.

As discussed with you at the meeting on 2 June 2014, your termination was due to a serious safety breach. In making the decision to terminate your employment, consideration was given to previous disciplinary discussions with you.

Your final pay has been processed and will include 5 weeks’ in lieu of notice. These monies should be received into your nominated bank account within the next 72 hours.

A copy of the completed discussion record is attached to this correspondence for your records.

Yours sincerely,

Reagan Lauder
State Human Resources Manager – QLD
Coles”

[39] Following the meeting on 2 June 2014, Mr Merlino telephoned Mrs Stevenson to discuss allegations he had made at that meeting and was asked to put his concerns in writing and that Mrs Stevenson would start an investigation. Mr Merlino sent three written complaints in the form of submissions to Mrs Stevenson on 12 June, 16 June and 30 June 2014. On 16 June 2014, Mrs Stevenson sent an email to Mr Merlino requesting confirmation of when his submissions would be finalised. On 1 July 2014, Mr Merlino emailed Mrs Stevenson requesting her to consider a racist comment as an example of the type of treatment Mr Merlino stated he had endured at the Earlville store. On 4 July 2014, Mrs Stevenson sent an email to confirm to Mr Merlino that she had received his final submissions on 30 June 2014 and that she would look at the issues in the coming weeks.

[40] Mr Merlino’s submissions emphasised the following points:

• Unfair, inconsistent and bullying treatment of [Mr Merlino] by Mr Millard;



• Actions by Mr Millard that placed [Mr Merlino] in a vulnerable position;



• First and Final warning invalidly given; and



• Termination of employment due to safety breach having occurred during a period in which the above first and final warning was still active.

[41] Mrs Stevenson investigated the complaints made by Mr Merlino. According to Mrs Stevenson, multiple witnesses were interviewed and she concluded that the majority of Mr Merlino’s complaints were unsubstantiated and vexatious. Mrs Stevenson also said that she considered that Mr Merlino’s behaviour in making vexatious allegations to be misconduct and would have treated it as such if he had remained in employment. Mrs Stevenson tendered her investigation report. In summary, her findings were that Department Managers who were interviewed were unanimous in:

● Saying that the result of Ms Baker’s mock audit was justified;

● Denying that Mr Millard had ever exhibited bullying behaviour towards Mr Merlino;

● Denying that other team members were upset at Mr Millard’s treatment of Mr Merlino;

● Denying that team members were fearful and apprehensive when Mr Millard came into the store.

2.3 Previous disciplinary history

February 2012 Audit Result and final warning

[42] In February 2012, a business assurance audit was conducted at the Cairns Central Store, where Mr Merlino was Store Manager. Mr Millard said that it was standard business practice within Coles at that time, and common knowledge among Store Managers, that when a store received a “high risk” supermarket assessment:

● The Store Manager would receive a disciplinary warning called a “First and Final Warning”;

● The Store Manager was required to develop and implement an “action plan” for the store and to assist in this process an action plan would be provided;

● Mr Millard would review and assess the action plan and arrange a further meeting with the Store Manager to discuss the outcome of his review approximately four weeks later and if satisfied with the on-going performance of the store at that time, Mr Millard would approve the action plan;

● An unscheduled reassessment of the store would be conducted by the Business Assurance Team within three to six months; and

● The warning would remain “live” until the result of the reassessment was received.

[43] Mr Millard said that if the reassessment result was a further high risk finding (known as a back to back high risk result) the employment of the Store Manager would be terminated. If the reassessment returned a low or moderate risk result, the warning would no longer be “live” in the sense that there was no longer a risk of a “back to back” high risk, resulting in immediate termination of employment. However, the warning would remain on the Store Manager’s employment record.

[44] The audit of the Cairns Central Store conducted in February 2012 returned a high risk result. Mr Millard said that Mr Merlino was in the United States on a Coles study trip at the time the audit was conducted. After Mr Merlino returned to Australia, Mr Millard met with him and issued Mr Merlino with a final warning in relation to that result. Mr Merlino gave a number of undertakings as part of an action plan following that audit and included an undertaking that Mr Merlino would comply with Coles’ Code of Conduct at all times. Mr Millard’s notes of his discussions with Mr Merlino about this audit result indicate that Mr Merlino stated that he had done a significant amount of work to improve the operations of the Cairns Central Store. Mr Millard approved Mr Merlino’s action plan. A reassessment was conducted some six months later and the Cairns Central Store returned a “low risk” result. Mr Merlino was transferred to the Earlville Store and commenced at that store in the capacity of Store Manager, on 3 July 2013.

September October 2013 audit result and first and final warning

[45] An audit was conducted by Ms Ploger in the Earlville Store in September 2013. That audit returned a high risk result with 31% of the negative findings being critical risk and 69% being high risk. Ms Ploger said that she discussed the findings of this audit with Mr Merlino before she left the Store. In October 2013 Mr Merlino was issued with a first and final warning, in relation to that audit. Mr Merlino states that following the audit, he presented Mr Millard, with an action plan. Mr Merlino further states that he implemented this plan, and that Mr Millard signed off on it.

[46] Mr Merlino states that Mr Millard did not take into account his short tenure (less than two months) as Store Manager at that store when he decided to issue Mr Merlino with a formal warning. Mr Merlino contends that the majority of adverse findings were in the Deli Department and could be attributed to a new Manager in that department who did not have sufficient experience. Mr Merlino also gave evidence that he raised the issue of the inexperience of the Deli Manager with Mr Millard and sought training for her, and that Mr Millard did not respond to these requests. Further, Mr Merlino states that Mr Millard extended the date for signing off or clearing the formal warning until 29 November 2013 and did not explain his reasons for doing so.

[47] Ms Ploeger said in her oral evidence that a number of high risk findings in the September 2013 audit could not be explained by a new Deli Manager and related to paperwork. Ms Ploeger pointed to the fact that the Deli Manager is not the only person in the Department, and that the Deli team at the Earlville Store comprised some experienced people. Ms Ploeger said that it is the responsibility of the Store Manager, or the Store Support Manager, to arrange training for staff and that it is the Store Manager who has the responsibility of managing day to day process issues. 22 There was also evidence from Ms Ploeger that the previous audit of the Earlville Store had delivered a low risk result.

[48] Mr Millard said that after Mr Merlino raised concerns about the skills of the Deli Manager, he had a discussion with the Deli Manager who told him that she was comfortable in her role. The Deli Manager was not a new employee, but rather an employee returning to the role. Mr Millard said that he offered, on two or three occasions, for the Deli Manager to undertake refresher training and was told by the Deli Manager that she did not require this. Mr Millard also said that he did not suggest to Mr Merlino that the Deli Manager should not be given refresher training and that Mr Merlino could have arranged such training if he had strong concerns about the skills of the Deli Manager.

[49] Ms Tyson said that following the September audit result, Mr Merlino did not follow up with Department Managers and failed to support her in departments where she was not being listened to by Department Managers. Ms Tyson also said that she expected Mr Merlino to follow up the audit result by sitting down with her and the relevant Department Managers to go through the audit results and to ask why these results were happening and what could be done to get the departments back to 100%.

[50] Under cross-examination, Mr Merlino agreed that he had been in the role of Store Manager for three months, not two months, when the audit was conducted. Mr Merlino also agreed that the Deli Manager had been in that position for two weeks prior to the audit being conducted, but maintained that there was a high probability that the systemic issues in the Deli Department raised in that audit would not have occurred if there had been a more experienced Deli Manager in place at the time. Further, Mr Merlino agreed that he did not challenge the September 2013 audit result or raise the inexperience of the Deli Manager as an issue in discussions with Mr Millard after the audit. 23 Mr Millard tendered a discussion record, dated 4 October 2013, recording a discussion with Mr Merlino about the September 2013 audit result. During that discussion, Mr Merlino is recorded as having stated that:

● The results were not delivered deliberately;

● He never set out to put the Company at risk;

● He was truly sorry to have put the Company at risk;

● He is aware of his role and responsibility; and

● He was confident that this will not be the situation next time. 24

[51] The record of interview also indicates that Mr Merlino was told that he would be subject of further disciplinary action, including termination of employment, if he failed to comply with the agreed actions; committed a further breach of the Code, policies or procedures; or failed to meet and sustain Coles’ operational standards. Mr Merlino agreed that the discussion record was accurate.

[52] Mr Millard’s evidence was that on 31 October 2013, he undertook a store tour in which he found evidence of a number of food safety breaches. This evidence was photographed and emailed to Mr Merlino along with Mr Millard’s view that these matters would result in a high or critical finding if an audit was conducted. Mr Millard said that for these reasons, he decided to extend the date for signing off the warning he had given Mr Merlino on 4 October 2013.

[53] Under cross-examination, Mr Merlino agreed that these high or critical findings could have serious health implication for customers including food poisoning or anaphylactic shock, 25 and that these findings breached the undertakings he had given in the meeting with Mr Millard on 4 October 2013. Further, Mr Merlino conceded that Mr Millard explained to him that the findings from his store visit on 31 October were the reason that the review period after the September 2013 audit was extended from 31 October to 29 November 2013.

January 2014 Mock Audit/Sense Check

[54] Mr Millard said that despite his approval of Mr Merlino’s action plan, Mr Merlino was in danger of back to back high risk audits, and of having his employment terminated, if the reassessment of the Earlville Store resulted in another high risk outcome. Mr Millard said that he was concerned at this occurring in the Earlville Store. In late 2013, Mr Millard organised mock audits at each of the stores in the Cairns area. Mr Millard determined that the mock audit of the Earlville Store would be conducted by Ms Suzanne Baker, Store Support Manager, Cairns Central. The mock audit of the Earlville Store was conducted on 8 January 2014. Mr Millard said that he selected Ms Baker to conduct the mock audit at Earlville based on her experience in auditing and store compliance and her extensive knowledge of the Earlville Store where she was previously the Store Support Manager.

[55] Mr Millard tendered an email, dated 4 January 2014, confirming that the Earlville Store audit would be conducted on 8 January 2014, and pointed to the fact that the email had been copied to Mr Merlino. Mr Millard said that Mr Merlino did not respond to the email and did not raise any concern about Ms Baker conducting the audit. Ms Baker states that she contacted Mr Merlino by telephone to inform him that the mock audit would be conducted on 8 January 2014 and then sent him the email of 4 January, which was also appended to her statement. Ms Baker said that Mr Merlino did not raise any issue with her conducting the mock audit, which Ms Baker referred to as a “sense check”. Ms Baker did not conduct any other sense checks at this time, but said that she has extensive experience in conducting them in other stores.

[56] Ms Baker said that the objective of a sense check is to offer support to Store Managers so that they are aware of areas at risk that need to be addressed prior to a formal audit. Ms Baker conducted a walk through the Earlville Store on 8 January 2014. The walkthrough was completed at 4.30pm and Ms Baker sat in the point of sale area with Mr Merlino and took him through the audit form to provide an overview and to alert Mr Merlino to areas that needed improvement. Ms Baker said that there is no overall rating for sense checks but rather key points for attention, critical findings and high risk issues are noted. Ms Baker said that she also identified some rostering issues, which she fixed with the officer in charge, and Mr Merlino was thankful for this. Ms Baker said that when Mr Merlino asked for her notes, she told Mr Merlino that she needed to hold on to them to type up the results and that he would receive an email with those results and the audit forms would be provided later in the internal mail.

[57] Ms Baker said that she went back to the Cairns Central Store after the sense check on 8 January 2014 and typed up her report. The report – appended to Ms Baker’s witness statement – was sent to Mr Merlino at 6.00 pm on 8 January 2014 and to Mr Millard at 9.12 am on 9 January 2014. The outcome of Ms Baker’s sense check was that the Earlville Store had failed to meet a number of standards in relation to food safety, hygiene and cleanliness, with four critical findings and 32 high risk findings, 16 of which related to food safety. Ms Baker rejected the proposition put to her in cross-examination that her poor relationship with Mr Merlino impacted on the mock audit and the manner in which she conducted it. Mr Millard said that if the mock audit had been an official supermarket assessment, it would most likely have resulted in a high risk result, and Mr Merlino’s employment would have been terminated. Mr Millard said that this was not acceptable and he was very disappointed with the result.

[58] Mr Merlino maintained that he was not contacted by Ms Baker by telephone to arrange the mock audit and stated that he would have recalled this as it would have made him concerned about the audit due to their poor working relationship. Mr Merlino also said that he did not receive the email advising him of the date of the audit or that he overlooked it and that this may have been because of the numbers of emails that he received at that time. Mr Merlino said that he accompanied Ms Baker while she conducted the audit on 8 January 2014, and that he requested a copy of the report from Ms Baker but was denied a copy. Mr Merlino contends that it is unusual that he was not provided with a copy of the audit form and that this heightened his concerns about the fairness of the audit process. Mr Merlino said that while Ms Baker was conducting the last checks, he noticed part of the completed report was in her office and he made a copy of the document for his records. 26

[59] Mr Merlino said that when Ms Baker emailed him the issues identified as a result of the audit, she included points that had not been discussed or addressed during the investigation. Mr Merlino states that he was provided with the final report after Ms Baker had left the store and his belief is that Ms Baker fabricated information to place him in a vulnerable position within the company. Mr Merlino said that he compared the photocopied version with the complete audit and found that Ms Baker had made amendments after leaving the store. This caused Mr Merlino to be concerned that Ms Baker’s audit was not based on contemporaneous observations and caused him to form the view that the results were not genuine. In cross-examination Mr Merlino agreed that there were nine examples on the audit form completed by Ms Baker where she had not circled a result in the form that he copied, which in the final report were favourable to Mr Merlino, but maintained that notwithstanding this the results were fabricated.

[60] Mr Merlino agreed under cross-examination that he did not contest the accuracy of every finding made by Ms Baker but rather contested the findings in the bakery. Findings not contested by Mr Merlino included “out of code” items in the cool room. An out of code item is an item that is on show in a store on the date that it cannot be used past, or a date after the date it cannot be used past. Coles’ policy is that such items should be removed from show the day before trade. For example, if an item is marked “best before 27 May” it can be on show on 27 May but must be removed from display before trade on 28 May.

[61] Mr Bellairs, who was working in the bakery on the day Ms Baker conducted the sense check, said that Ms Baker attended the bakery department and made a comment to Mr Bellairs that the racks he was working on should have been inverted. Mr Bellairs said that while it is Coles’ policy that unused bakery trays must be inverted to assist in preventing contamination, he was still using the racks at the time and he thought the comment was unfair.

[62] Mr Bellairs said that Ms Baker also made a comment about pest activity and pointed out a single ant that was near the ant-bait trap that had been set to kill ants. Mr Bellairs states he was surprised about the comment because there was just one ant and he did not see any other evidence of pests. Mr Bellairs said that Mr Merlino told him that Ms Baker had reported that there was pest activity in the bakery department; the selling floor was not clean; the containers were not inverted; and various bakery machines were not clean. Mr Bellairs said that he was surprised at the results because he knew that Ms Baker had not inspected the department in a thorough manner and did not inspect the machines or look around them or under the benches.

[63] Ms Baker’s evidence in response to these assertions was that at the point Mr Merlino found the form, she had not compiled and consolidated her findings. Ms Baker also said that there was nothing unusual about Mr Merlino not being given the form at the point the audit was concluded and that it is her practice to provide the form with her final findings. It is also the case that when a comparison between the form and Ms Baker’s findings is conducted, that a number of her initial findings were altered in Mr Merlino’s favour in the final report. Under cross-examination Ms Baker explained the manner in which she completed the audit form. When asked to explain “out of code” findings, Ms Baker pointed to an item recorded as having been found in the cool room marked “best before 2 January” which should have been removed six days before 8 January when she did her audit. In relation to the bakery, Ms Baker said that regardless of whether there was a single ant or a number of ants, the trap that was in the bakery was for rodents and the presence of an ant had not been recorded in the book use for recording pest activity so that it could be treated.

[64] In relation to Mr Bellairs’ view that she had not properly inspected the bakery, Ms Baker said that she had visually inspected the machinery and the floor and had noted that under the benches was not clean. Ms Baker said that she did not assess the donut maker as Mr Bellairs was still using it. In relation to the trays, Ms Baker said that they should be inverted at all times and when picked up to be used, the trays should already be in an inverted position to prevent contaminants from falling into them.

[65] On 13 January 2014, Mr Millard and Ms Smith (Regional HR Business Partner Cairns Region – who participated by telephone) met with Mr Merlino and his support person to discuss the outcome of the mock audit. Mr Millard issued Mr Merlino with a warning. Mr Millard said that while a mock audit would not normally result in disciplinary action, there was no policy to prevent this action, and he believed that it was necessary to ensure that Mr Merlino understood the seriousness of the mock audit result. Following that discussion, and in response to Mr Merlino’s comments that he felt alone and that he had no support, Mr Millard said that he worked with Mr Merlino and implemented steps such as summaries and commitments from each department within the Earlville Store in relation to the findings of the mock audit and an action plan involving daily checks and tours in the Store.

[66] Mr Millard tendered a series of emails between himself and Mr Merlino outlining action plans. There is an email from Mr Merlino proposing that Mr Millard come to the Store three times a week to assess three departments. Mr Millard responded to this request committing to a number of visits and also indicating that he could not commit to three visits a week but that he would arrange for other Store or Store Support Managers to undertake these visits. On 20 January 2014 Mr Millard emailed a number of managers requesting support for the Earlville Store and setting out a program of visits by those managers in addition to visits by Mr Millard. Mr Merlino responded to that email thanking Mr Millard for the support. 27

[67] On 29 and 30 January 2014, Ms Ploeger carried out a reassessment of the Earlville Store. The result of that audit was “silver” or “moderate risk”. Mr Millard said that despite the “moderate risk” outcome, there was still one “critical” and 25 “high” findings, meaning that the audit was just one finding off an overall “high risk” result. Mr Millard said that he had a telephone conversation with Mr Merlino in which Mr Merlino said he had “contemplated leaving the keys to the Earlville Store and just walking out”. When Mr Millard indicated that he would accept Mr Merlino’s resignation, Mr Merlino indicated that he was not intending to resign but was just contemplating it.

[68] Mr Millard said that following this conversation he spoke with Mr Scates and Ms Lauder. While it was standard practice that following a “moderate risk” result in a reassessment the risk of a back to back “high risk” assessment (resulting in termination of the Manager’s employment) fell away, Mr Millard remained concerned about the results of the Earlville assessment and wanted advice about dealing with Mr Merlino going forward. Mr Millard was advised that Coles’ standard practice should be followed as Mr Merlino was no longer at risk of back to back “high risk” audit results. However the informal action plan that was implemented following the 13 January meeting was formalised and a review scheduled in four weeks.

[69] Mr Merlino said in his evidence that in conducting the reassessment Ms Ploger failed to take into account that there had been a tropical cyclone in the area at the time this audit was conducted and that this had impacted the results because it impacted on trade patterns. Mr Merlino agreed that he did not raise this issue with Ms Ploger at the time the audit was conducted. Mr Merlino also agreed that his comments as Manager after this audit were that the efforts of the team to improve performance had not come to absolute fruition. Mr Millard said that trade patterns were not relevant to the issues identified in the audit. Ms Ploger said that the cyclone event had not occurred at the point the audit was undertaken.

[70] Following the reassessment audit, a review meeting was held with Mr Merlino on 19 February 2014. The record of discussion of that meeting indicates that Mr Merlino’s continued failure to meet requirements was discussed and that Mr Merlino could not produce notes of daily store tours he was required, by the terms of the action plan, to have conducted, because he had lost books containing his notes of those tours. The record also indicates that Mr Merlino walked out of the meeting and that it recommenced on 21 February 2014. A further review was scheduled for 14 March 2014. There is no evidence about that review and whether it was held.

[71] Mr Merlino said that he had no notice of the meeting with Mr Millard on 10 January 2014 and no opportunity to have a support person present. Mr Merlino states that, during this meeting, Mr Millard said words to the effect of “if this was the real audit, I’d be terminating you right now”. In relation to the meeting with Mr Millard and Ms Smith on 13 January 2014, Mr Merlino said that he was surprised and upset at being issued a warning on the basis of a mock audit as this was against usual practice for Coles. Mr Merlino said that mock audits are conducted as training exercises and do not normally result in disciplinary proceedings. Mr Merlino also said that at the follow up meeting with Mr Millard and Ms Lauder on 19 February 2014, Mr Millard made accusations about the current action plan not being implemented. Mr Merlino walked out of the meeting because he felt ambushed by the accusations and Mr Millard had not told him that he had allegations to raise with Mr Merlino prior to the meeting.

[72] On 21 February 2014, at the rescheduled review meeting, Mr Merlino said Mr Millard informed him that he had complied with the Code, but that the warning issued on 13 January was not going to be removed because Mr Millard wanted to “keep [Mr Merlino] on his toes”. Mr Merlino said that this was inconsistent with his previous experience that after a further review four weeks after a warning is given, first and final warnings are removed if the person warned complies with the action plan implemented to address the issues in the warning.

[73] Mr Merlino states that Mr Millard was supposed to hold a review meeting to sign off on the action plan on 14 March 2014 but Mr Millard decided to extend the review. Mr Merlino states that on 5 May 2014, the review had not been finalised so he contacted Mr Millard to follow up this issue. Mr Merlino states that he was told by Mr Millard that Mr Millard would “catch up with [Mr Merlino] on the other side”, as Mr Merlino was going on annual leave. The pallet incident arose while Mr Merlino was on annual leave and Mr Merlino’s employment was terminated the day after he returned from leave.

[74] Mr Merlino maintains that had Mr Millard conducted the review process in a timely manner, the 13 January 2014 warning would have been signed off and resolved, and consequently, it would not have been a relevant consideration in relation to his dismissal. Mr Merlino also said that he believes that Mr Millard acted unfairly in not removing the warning and acted in this way to put Mr Merlino in a vulnerable position and because they do not get along within the company.

2.4 Mr Merlino’s relationship with Ms Baker and Mr Millard

[75] Mr Merlino placed a considerable amount of evidence before the Commission about his poor relationships with Mr Millard and Ms Baker. The complaints Mr Merlino made after his employment was terminated are replete with allegations about Ms Baker and Mr Millard and issues Mr Merlino had with them. Ms Baker states that she and Mr Merlino had a professional working relationship and that they would often go for coffee together and that to her knowledge they got along well. Ms Baker said that there were times when she became frustrated with Mr Merlino because he was not attending work and she was left to run the store, but that they never had any harsh words with each other. Under cross-examination, Ms Baker denied stating to staff in relation to Mr Merlino’s absence on a particular day, that “it’s a Tony-free day” and that staff were “the A Team”.

[76] Ms Lamprey said that she did not observe friendly communication between Mr Merlino and Ms Baker and had not seen them have coffee together. According to Ms Lamprey, Ms Baker spent more time with other Managers than she did with Mr Merlino. On one occasion Ms Lamprey observed Ms Baker and Mr Merlino having a fight, using raised voices, in relation to an employee who had ceased employment because he had not been given time off to attend university. Ms Lamprey also said that on an occasion when Mr Merlino was absent and Ms Baker conducted a “team huddle” at the commencement of work, Ms Baker spoke about sales targets and said: “we’ll try and beat Tony…Let’s get to work. It’s a Tony-free day”. Under cross-examination Ms Lamprey said that Ms Baker made this comment in jest.

[77] Mr Bellairs said that his observation of the interactions between Ms Baker and Mr Merlino was that they were cold and unfriendly. Mr Bellairs also said that it was well known amongst employees that Ms Baker and Mr Merlino did not get on well and that it was a topic of conversation amongst employees. Under cross-examination Mr Bellairs agreed that the interactions between Mr Merlino and Ms Baker that he had witnessed were limited to “body language” on the day of the mock audit and that he had not heard any discussion between Mr Merlino and Ms Baker on that day. Mr Bellairs also agreed that his evidence on this point was based on what others had told him.

[78] Mrs Stevenson’s Report in relation to the allegations made by Mr Merlino after his employment ceased, stated in relation to Ms Baker and Mr Merlino that:

“It was common knowledge in the region about the nasty relationship between the two parties and the words used to describe their relationship were ‘hatred and despising each other.”

[79] Mrs Stevenson went on to observe that notwithstanding Ms Baker’s experience as a Store Support Manager and that in usual circumstances it would have been appropriate for Ms Baker to conduct audits, consideration should have been given to the poor relationship between Ms Baker and Mr Merlino when the decision about who should conduct the mock audit at Earlville was made. Under cross-examination, Mrs Stevenson agreed that it was not a good idea for Ms Baker to have conducted the mock audit. Mrs Stevenson also said that Ms Ploeger reviewed the mock audit conducted by Ms Baker and Mrs Stevenson also spoke to a number of people at the Earlville store, who told her that the mock audit result was justified.

[80] In relation to Mr Millard, Mr Merlino said that his working relationship with Mr Millard became difficult not long after his transfer to the Cairns Central store in 2012. Mr Merlino states that this may have been because Mr Millard did not appreciate comments Mr Merlino made about stores in the region, while he was attending a conference in lieu of Mr Millard. Mr Merlino said that after his return from the meeting, Mr Millard approached him and directed him not to speak about issues at stores in the region without telling Mr Millard first. Mr Merlino said that that Mr Millard’s tone was rude, aggressive and intimidating.

[81] Mr Merlino said that he was concerned for his job as he felt that Mr Millard took every opportunity to threaten his continued employment. Mr Merlino gave as an example an incident in 2013, when Ms Hannam disposed of some store racks on Mr Merlino’s rostered day off. Mr Merlino said that he received a text message from Mr Millard with words to the effect of “destroying company property is instant dismissal”. Mr Merlino states he was concerned that Mr Millard would send this text message to him without speaking to Mr Merlino to find out what had occurred. Mr Merlino said that he felt Mr Millard’s behaviour was unreasonable given that the incident had occurred when Mr Merlino was away and not under his direction.

[82] When Mr Merlino raised complaints about Mr Millard’s behaviour towards him at the 13 January 2014 meeting, Ms Lauder told him to put his complaints in writing formally. Mr Merlino said that he refrained from making a formal complaint about Mr Millard at that time as he was fearful for his job. Mr Merlino also said that he was informed in around January or February 2014 that Mr Millard would be leaving the position of Regional Manager, and Mr Merlino decided that he would not cause further trouble by raising a formal complaint as Mr Millard would not be his line manager for much longer.

[83] None of the witnesses gave evidence supportive of Mr Merlino’s allegations about Mr Millard’s conduct, either in relation to Mr Merlino or in relation to the Earlville Store generally. Ms Hannam gave evidence about the disposal of the shelving and said that she threw the shelving out because it was broken. Ms Hannam said that Mr Merlino told her that he had received a text message from Mr Millard about throwing away company property which caused Mr Merlino to be concerned for his job. Ms Hannam rang Mr Millard to explain that she had thrown away the shelving because it was broken. Under cross-examination, Ms Hannam said that when she explained this to Mr Millard he told her that it was not an issue.

[84] Mr Millard denied that he behaved aggressively to Mr Merlino or that he bullied Mr Merlino. Mr Millard said that in response to comments about stores in his region made by Mr Merlino at the conference, Mr Millard told Mr Merlino that he should raise any issues with Mr Millard first. Mr Millard also gave evidence to contradict suggestions in Mr Merlino’s evidence that actions such as the mock audit were specifically directed to Mr Merlino. Mr Millard said he selected Ms Baker to do the mock audit because she was the subject matter expert and the best person to give a fair and true assessment of stores in the region. Further, Mr Millard said that all stores in the region were subjected to a mock audit.

[85] Mr Millard also disputed that he had a difficult relationship with Mr Merlino but conceded that over time the relationship did become difficult when a higher level of scrutiny was directed at the Earlville Store following the assessment in September 2013 and the mock audit in January 2014. Mr Millard disagreed with Mr Merlino’s assertion that it is usual practice for Coles to sign off or clear formal warnings within a four week period. Mr Millard said that while an action plan is reviewed and signed off, an actual warning is not treated in this way, and remains on an employee’s file.

2.5 Differential treatment

Mr Tobys and Ms Tyson

[86] Coles submits that there was no evidence available to Mrs Stevenson at that time to suggest that Mr Tobys had failed to act appropriately in relation to the pallet incident. Mrs Stevenson said that she spoke to Mr Tobys about the incident and Mr Tobys told her that he advised Mr Merlino that he should not be on the pallets and that Mr Tobys stayed there because he felt that this is what he should do, out of concern for the safety of Mr Merlino and team members.

[87] In relation to the gap between the pallet incident and team members reporting it, Mrs Stevenson said that it was her understanding that team members reported the incident to Mr Millard after Mr Merlino had gone on annual leave. Mrs Stevenson gave evidence as follows:

“Did you then investigate any of that?---I had the photographs that I reviewed.  It had been identified to me that Mr Michael Tobys was the team member standing beside the pallets.  I rang Michael Tobys on 9 May and asked him to confirm and provide me with his information in relation to what the photographs showed.

What did you ask him?---As I say, I advised him I have the photographs that show Mr Merlino standing on top of pallets and show him standing beside them.  I asked him to provide me with his information about that.  He advised me that he saw Tony on the pallets.  He went to Tony and advised that he shouldn’t be on the pallets.  That there’s ladders to do what he was wanting to do.

Sure?---He advised me that he stayed there because he felt it was what he should do.

What did you understand that to mean?---My understanding of that was that he was concerned for the safety of Mr Merlino and team members and customers, and he was staying there in case there was something he needed to act on.

In light of that, did you recommend that any disciplinary action be taken against Mr Tobys in relation to that incident?---No.

Why was that?---Mr Tobys was a team member who called out to a store manager that the store manager was doing something that he believed to be wrong.  The store manager has indicated back to him that he was doing it and requested the team member to provide him or assist him with it, and as a team member he was following the instruction of his store manager.

At that time were you aware of any other team members at the store who might have been involved at all?---Not involved in it, no.” 28

Mr Crowe

[88] Mr Merlino gave evidence that subsequent to the termination of his employment, there was an incident at the Earlville store where pallets were stacked and used by a Manager who stood on the stacked pallets. Mr Merlino said that the Manager was not sacked for this conduct.

[89] Mrs Stevenson said that she was informed on 10 December 2014 that there had been a safety incident at the Earlville store on 2 December 2014, involving the Store Manager (Mr Malcolm Crowe). Mrs Stevenson viewed the CCTV footage, which showed Mr Crowe building a promotional soft drink display next to the fresh produce area at 8:16am. The footage showed Mr Crowe climbing over the display by standing on existing cardboard boxes of soft drink while he continued to build the display, which was approximately 1 metre above ground. Mrs Stevenson said that the store was trading and customers were present at the time of the incident.

[90] Mrs Stevenson said that she was not involved in the preparation of the Discussion Record for the disciplinary meeting relating to the incident involving Mr Crowe, but was informed that Mr Crowe received a final warning for this incident. Mrs Stevenson said that in her view, Mr Merlino’s safety breach warranted a more serious disciplinary outcome than Mr Crowe’s because:

• Mr Merino climbed two meters off the ground, which was significantly higher than the one metre height that Mr Crow climbed, and Mr Merlino’s conduct posed a greater risk to himself, customers and other team members;



• Mr Merlino breached Coles’ Safe Work Practice in relation to pallet jacks; and



• Mr Merlino had already received two final warnings that included matters in relation to safety issues with the Earlville store, and his failure to meet Coles’ expectations for Store Managers.

[91] Mr Millard also gave evidence in relation to this matter and said that Mr Crow stood on a couple of layers of 24 packs of Coca Cola, and while Mr Millard does not endorse this behaviour, in his view, the height and severity of this safety breach clearly distinguishes this incident from the pallet incident involving Mr Merlino. Coles submits that the CCTV footage in relation to Mr Crow’s safety breach was produced to Mr Merlino prior to the hearing of this matter, but that Mr Merlino failed to submit the footage as evidence in these proceedings.

Mr Millard

[92] On 23 December 2013, Mr Merlino states he was contacted by Mr Millard and instructed to travel to the Westcourt and Edmonton Stores in his vehicle to pick up frozen prawns and fresh chicken breasts for the Earlville store. Mr Merlino states he raised concerns about his vehicle being an un-air-conditioned utility and states that he told Mr Millard he thought it was unsafe for him to be transporting seafood and fresh chicken in his vehicle. Mr Merlino states that Mr Millard told him he was to do it or they would have a further discussion. Mr Merlino states he concluded that Mr Millard meant to discipline him if he did not do as directed and that Mr Millard’s tone was threatening to him.

[93] Mr Millard said two days prior to Christmas 2013, due to Mr Merlino’s lack of leadership and planning, it became clear that there would be no prawns available for customers at the Earlville Store. Mr Millard rang the Store Manager of the Westcourt store to ask whether he could spare some prawns for Earlville and that Store Manager reluctantly agreed. Mr Millard then rang the Food Safety Manager for Queensland to check whether there would be an issue and was told that standard food product could be out of refrigeration for up to 30 minutes and that there would be no problem provided that the prawns were maintained at a sufficiently low temperature. Mr Millard requested Mr Merlino to pick up the prawns from the Westcourt store which is ten minutes from the Earlville Store.

[94] As Mr Merlino was a Store Manager, Mr Millard assumed that Mr Merlino and the staff despatching and receiving the prawns would check the temperature of the prawns to ensure that it was sufficiently low in accordance with Coles’ food handling procedures. Coles’ cold chain compliance processes allow for a window of 30 minutes for product to be out of refrigeration. Mr Millard thought that this window was sufficient to allow for Mr Merlino to collect and despatch the prawns. Mr Millard also said that until Mr Merlino submitted his second statement of concerns after his dismissal, he was not aware that Mr Merlino had concerns about this matter. Mr Millard was not disciplined in relation to the transportation of the prawns.

3. RELEVANT LEGISLATION

[95] It is necessary to consider whether Mr Merlino’s dismissal was unfair on the grounds that it was harsh, unjust or unreasonable by applying the criteria in s.387 of the Act, as follows:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that 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.”

[96] The employer bears an onus of establishing that there was a valid reason for a dismissal. 29 A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”30 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts,31 and the validity is judged by reference to the Tribunal’s assessment of the factual circumstances as to what the employee is capable of doing or has done.32 

[97] The Commission may consider an employer’s approach to disciplinary action and whether a dismissed employee has been treated differently to other employees, as a factor relevant to determining whether dismissal was unfair under s. 387(h) of the Act. 33 In determining whether differential treatment is a relevant factor the Commission should be cautious and must be satisfied that cases advanced as comparable cases are truly comparable. As Vice President Lawler put the matter in Sexton v Pacific National34, the Commission must ensure that it is comparing “apples with apples”, and there must be sufficient evidence of the circumstances of the cases that are said to be comparable to enable a proper comparison to be made.35

[98] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable.  A dismissal may be:

Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;

Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or

Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer. 36

4. CONSIDERATION

4.1 Was there a valid reason for Mr Merlino’s dismissal?

[99] Coles asserts that the pallet incident involved serious misconduct warranting immediate termination of employment and provided a valid reason for Mr Merlino’s dismissal. The evidence before the Commission substantiates this assertion. Mr Merlino did not dispute the essential elements of the pallet incident. Rather, Mr Merlino sought to excuse and rationalise his misconduct with a series of contentions including that: his actions did not cause any harm or injury; standing on a stack of twelve pallets to hang the red kites was the safest available method; and he took reasonable safety precautions

[100] Mr Merlino’s defence of his conduct in relation to the pallet incident was disingenuous and displayed a total disregard for his own safety and that of others. Generally I did not find Mr Merlino’s evidence convincing. On a number of occasions, Mr Merlino made assertions or put a spin on events that was contrary to the evidence. For example, Mr Merlino insisted that Mr Millard did not give him an explanation for extending the warning of 4 October 2013 following the September 2014 audit. Under cross-examination Mr Merlino was forced to concede that Mr Millard had conducted a store tour, found further issues of concern, emailed details of those concerns to Mr Merlino and explained to him that for this reason the warning was to be extended. Mr Merlino’s assertions that Mr Millard did not support him and that Mr Millard’s visits to the Earlville Store were a source of concern for Mr Merlino and employees at that Store, was at odds with emails where Mr Merlino invited Mr Millard to visit the Store three times a week to conduct assessments after an audit had identified issues and Mr Millard agreed to undertake assessments and provided additional support in the form of other managers to conduct further assessments in order to assist Mr Merlino.

[101] Mr Merlino does not dispute that he brought a pallet jack on to the shop floor in a peak trading period or at very least in a period that was busy. Mr Merlino’s assertion that there were other instances when pallets and pallet jacks were on the shop floor is not to the point. The policy requires that staff should avoid bringing pallet jacks on to the shop floor during peak trading times, Mr Merlino breached this requirement. It was apparent from the CCTV footage that there were a number of customers walking past Mr Merlino while he was on top of the pallets including women pushing prams, a woman carrying a baby and children. Employees of Genesis Gym and Mr Tobys were also in the immediate area.

[102] Mr Merlino stacked twelve pallets on the pallet jack and it is not in dispute that the height of the stack was in excess of six feet. In another example of his propensity to make assertions that were not correct, Mr Merlino initially said that the pallets were stacked only to the height of his shoulders and then conceded that they reached a height above his head. The lack of other suitable equipment for Mr Merlino to stand on in order to hang the kites – which Mr Merlino made much of – is also not to the point. That the height of ladders in the store was limited was not an excuse for Mr Merlino to use other equipment not designed for the purpose of employees working at heights. Mr Merlino also knew that Coles’ policy required that no more than eight pallets be stacked for storage purposes.

[103] Far from storing the pallets, Mr Merlino climbed up the side of the stack of pallets and stood on top of the stack for 28 minutes. It is apparent from the CCTV footage that for most of the time that Mr Merlino was on the pallets, he was looking at the ceiling and the kites rather than the persons standing near or walking past the foot of the pallets. It is improbable that Mr Merlino had clear visibility while he was on the pallets and if he did it is not apparent that he gave any consideration to the danger that his conduct posed for customers or staff who were in the area.

[104] I do not accept that Mr Merlino sought assistance from Mr Tobys. For the reasons set out above, I preferred the evidence of Mr Tobys to that of Mr Merlino. The fact that Mr Tobys stood beside the pallets and assisted Mr Merlino by handing him a kite, is not a sufficient measure for Mr Merlino to comply with the requirement of the policy to seek assistance from another team member to keep customers and team members safe. Mr Merlino’s contention that he utilised staff from the Genesis Gym as “human barriers” is ludicrous. Mr Merlino had no right to require persons not employed by Coles to assist him or to give such persons any responsibility for the safety of Coles’s customers or team members.

[105] On Mr Merlino’s own evidence, he erected some cardboard signs as “a bit of a deterrent” for customers walking through the area. It is clear from the CCTV footage that this strategy was not a deterrent at all. Further, the impression I gained from viewing the CCTV footage is the staff of the Genesis Gym were simply watching Mr Merlino standing on top of a stack of pallets rather than providing Mr Merlino with any assistance. Similarly my observation of Mr Tobys on the CCTV footage and giving his evidence were that Mr Tobys was acting of his own volition by standing beside the pallets so that he could offer assistance if Mr Merlino fell rather than being required by Mr Merlino to assist. I also accept that Mr Tobys was constrained by the fact that Mr Merlino was the Store Manager. I do not accept that Mr Merlino took reasonable steps to ensure the safety of other employees and customers; much less that Mr Merlino took any steps at all in this regard.

[106] Mr Merlino’s reprehensible conduct in climbing the pallets was compounded by the fact that he placed two safety steps on top of the pallets and also that he had two pairs of pliers on his person. None of these items were tied off or secured, and could have fallen on to Mr Tobys, the Genesis Gym employees or passing customers including children. Mr Merlino’s insistence that both pairs of pliers had blunt edges is a further indication of the lengths to which Mr Merlino was prepared to go to justify his conduct. Mr Merlino said that he put the pliers into his pocket when he climbed down from the pallets. I can only wonder at what Mr Merlino did with the pliers when he was on top of the pallets and otherwise occupied with hanging the kites.

[107] On a number of occasions, Mr Merlino sat on one of the safety steps when it was close to the edge of the pallets. Mr Merlino could easily have lost his balance and fallen. I accept that Mr Merlino did not stand on the safety steps. However, Mr Merlino’s evidence is that he put them on top of the pallets because he considered that the pallets provided a stable base on which to place the safety steps and reach the ceiling. Thankfully Mr Merlino did not consider that he needed to stand on the safety steps but, given his evidence, I consider it probable that he would have done so if he believed that he needed to gain some extra height and that he put the safety steps on top of the pallets because he was considering climbing on them to achieve this. Regardless, the safety steps were an added hazard and could have been a tripping hazard for Mr Merlino or fallen the top of the pallets.

[108] The contention that the pallets provided a stable base is also ludicrous. The top of a pallet is not a deck. It has slats which are up to ten centimetres apart. Mr Merlino could have caught his foot between the slats and fallen, seriously injuring himself or others. Mr Merlino’s failure to acknowledge the risks of his conduct was entirely unconvincing. In short, at the point he was dismissed, Mr Merlino doggedly defended his conduct, which was simply indefensible and continued to do so at the hearing of his unfair dismissal application. The fact that no one was injured is fortunate and is not a basis for Mr Merlino to defend his conduct.

[109] I do not accept that the fact that Mr Millard was involved in assessing the seriousness of the pallet incident and in dismissing Mr Merlino invalidates the reason for the dismissal. Regardless of the relationship between Mr Millard and Mr Merlino, the pallet incident viewed objectively, was serious misconduct and this is not dependent on any view on the part of Mr Millard. There are no extenuating circumstances in relation to the pallet incident. Mr Merlino was not required by Coles to hang the kites, and did so of his own volition. There was no evidence of urgency or a pressing need to hang the kites. In engaging in this conduct, Mr Merlino put himself, co-workers and customers at imminent risk to their health and safety. I am satisfied and find that the pallet incident amounted to serious misconduct and constituted a valid reason for Mr Merlino’s dismissal. This is the case regardless of the status of other warnings that Mr Merlino had received.

[110] I also accept that the other warnings which had been given to Mr Merlino provided a contextual basis for the decision to dismiss Mr Merlino. In the context of the validity of the reason for Mr Merlino’s dismissal, the previous warnings are relevant to the extent that they establish that Mr Merlino had a disciplinary history where non-compliance with Coles Policies had been an issue and was on notice that future infractions could lead to the termination of his employment. Mr Merlino’s case is an attempt to challenge the validity of earlier warnings and to assert that but for those earlier warnings the pallet incident would not have been a valid reason for his dismissal.

[111] This approach can only succeed if the pallet incident, viewed in isolation, could not be categorised as serious misconduct that would constitute a valid reason for dismissal. For the reasons set out above, I am of the view that the pallet incident amounted to serious misconduct and that it did constitute a valid reason for dismissal. There may be cases where an employee has received a series of warnings in relation to instances of misconduct, in circumstances, which viewed in isolation, would not constitute a valid reason for dismissal, but taken together do constitute a valid reason for dismissal. In such cases, where the Commission is satisfied that the conduct which was the subject of an earlier warning in the series of misconduct relied on did not occur, or should not have been the subject of a warning, there may be a finding that there was not a valid reason for dismissal.

[112] In the present case, Mr Merlino’s conduct in relation to the pallet incident, viewed in isolation, was serious misconduct and did not depend on earlier warnings to constitute a valid reason for dismissal. Even if I was satisfied that an earlier warning should not have been given to Mr Merlino, or that some or all of the conduct on which an earlier warning was based did not occur or did not justify a warning being given, that finding would not be relevant to determination of whether there was a valid reason for Mr Merlino’s dismissal. Similarly, If I was satisfied that a warning had been left on Mr Merlino’s file because of some personal vendetta against him by Mr Millard, that finding would not be relevant to whether there was a valid reason to dismiss Mr Merlino.

[113] If I am wrong in relation to this point and the previous warnings were a substantive part of the reason for Mr Merlino’s dismissal rather than contextual, I do not accept that the earlier warnings were invalid or that they should have been downgraded or removed from Mr Merlino’s file prior to the pallet incident. In relation to this point, I accept the evidence of witnesses for Coles that first and final warnings given to Store Managers when their store fails an audit, remain live until a second and subsequent audit is conducted, but thereafter remain on the employee’s file as a record of disciplinary action. There is nothing inherently unfair or unreasonable about Coles relying on a warning which is not “live”, as part of a valid reason to dismiss an employee.

[114] In the case of Mr Merlino, the warnings he received indicate that he had ongoing issues relating to failure to comply with Coles’ policies and procedures. This was essentially the reason for Mr Merlino’s dismissal. This situation is one that in my view Coles would have been entitled to consider as part of the reason for the decision to dismiss Mr Merlino.

[115] Mr Merlino did not dispute the validity of the warning he received in relation to the February 2012 first and final warning following the audit at the Cairns Central Store. I do not accept Mr Merlino’s complaints about the September 2013 audit at the Earlville Store. Mr Merlino had been at that store for three months (not two months as he asserted) when the audit took place. I do not accept that the result of the audit can be attributed to the new Deli Manager. In this regard I accept Ms Ploeger’s evidence that the issues identified were systemic and concerned paperwork and process issues that were Mr Merlino’s responsibility. I am also of the view that if the Deli Manager did require training, then Mr Merlino could have taken steps to ensure that this occurred and was at least equally responsible for any failure in his regard, as Mr Millard. The record of interview after this audit contains no reference to any concerns on the part of Mr Merlino about the length of his tenure as Store Manager when the audit occurred or any lack of training on the part of the Deli Manager. Mr Merlino accepted the warning following this audit and gave assurances that he was aware of his role and responsibilities and was confident that the audit result would not be repeated. Mr Merlino accepted that the record of discussion in relation to this matter, tendered at the hearing, was accurate.

[116] Issues with the fairness and validity of this audit, or the warning of 4 October 2013 that followed this audit, were not raised by Mr Merlino until after he was dismissed. It is also the case, as previously noted, that Mr Merlino made an entirely unsustainable assertion that this warning was unfairly extended by Mr Millard and that Mr Millard provided no explanation for doing so. I am satisfied and find that contrary to Mr Merlino’s assertion, Mr Millard undertook a store tour on 31 October and found evidence of food safety breaches of the kind about which Mr Merlino had received a final warning less than a month previously and told Mr Merlino that the date for signing of the warning would be extended because of those findings. Mr Merlino did not dispute the findings made by Mr Millard on 31 October 2013 at the time they were made or in the hearing of his unfair dismissal application.

[117] I accept that with the benefit of hindsight, it would have been preferable if Ms Baker did not conduct the mock audit in September 2013. However, even if Ms Baker’s findings about the bakery (with which Mr Merlino disagreed) are discounted, it is apparent that there continued to be serious food safety issues at the Earlville Store. Regardless of the relationship between Ms Baker and Mr Merlino, findings that there were food items on display that were out of code – in one case by eight days – cannot be explained by antipathy towards Mr Merlino on the part of Ms Baker. The mock audit was a sense check and it showed that there continued to be food safety issues of the kind previously raised with Mr Merlino at a store under his management.

[118] I do not accept that there were any irregularities with Ms Baker’s conduct of the audit and in particular I accept as perfectly reasonable Ms Baker’s explanation as to why she did not give the completed forms to Mr Merlino until she had written up the outcome of the sense check. Mr Merlino can hardly complain of delay in circumstances where Ms Baker provided him with the outcome in writing on the day she conducted the mock audit and discussed that outcome with him. I also note that other than some findings in the bakery, Mr Merlino does not dispute the findings made by Ms Baker.

[119] I do not accept that Mr Millard issuing Mr Merlino with a warning following the mock audit check was unreasonable. Once again, Mr Millard was confronted with a series of food safety issues in the store managed by Mr Merlino. It is also apparent that Mr Millard went to considerable lengths to support Mr Merlino in addressing the issues highlighted by the mock audit. Mr Merlino invited Mr Millard into the store three times a week to conduct a check on three departments, to assist with addressing those issues. Mr Millard agreed to provide support and arranged for other managers to also assist. The email correspondence between Mr Merlino and Mr Millard in relation to this period and the aftermath of the mock audit is totally at odds with the picture which Mr Merlino attempted to paint in the complaints he made to Coles management after his dismissal and in his evidence to the Commission. I do not accept Mr Merlino’s evidence in relation to this matter.

[120] While the Earlville Store received a silver audit result in the reassessment carried out by Ms Ploeger on 29 and 30 January 2014, that audit was one finding off being a high risk result, which would have meant that Mr Merlino was at risk of dismissal in accordance with Coles’ processes surrounding audits. Again, the record of interview following this audit contains no reference to Mr Merlino raising questions about whether the impact of a tropical cyclone had been taken into account and Mr Merlino only raised this issue in his complaints following his dismissal and in his evidence to the Commission. It was not clear from Mr Merlino’s evidence what cyclone event he was referring to and Ms Ploeger said that the cyclone had not yet impacted when the audit was conducted. On balance, I do not accept that there was any issue of validity associated with this audit. I am also of the view that in light of Mr Merlino’s record of poor audit results, it was reasonable for Mr Millard to extend the warning that Mr Merlino was already subject to.

[121] In short, I was left with the view that at the point he was dismissed, Mr Merlino was skating on thin ice and essentially counting down the days to the expiration of one warning so that the warning count would start again and any further infraction would be receive another warning rather than resulting in his dismissal. In these circumstances, Coles would have been entitled to rely on the warnings as a valid reason to dismiss Mr Merlino, particularly after the pallet incident.

4.2 Was Mr Merlino notified of the reason for his dismissal?

[122] Mr Merlino accepts that he was notified of the reasons for his dismissal in a meeting on 2 June 2014 and in a subsequent letter dated 3 June 2014. I am satisfied and find that Mr Merlino was notified of the reason for his dismissal.

4.3 Was Mr Merlino given an opportunity to respond to the reason for his dismissal?

[123] Mr Merlino submits that he was not given an opportunity to respond to the reason for his dismissal because:

• The person who made the decision to terminate the Applicant’s employment was Mr Scates and not any of the witnesses who gave evidence on behalf of the Coles;



• There was relevant and material information that was not supplied to Mr Scates;



• It is open to the Commission to conclude that if Mr Scates had been aware of this relevant and material information which arises from the evidence given by the Coles’ witnesses during the hearing Mr Merlino’s employment would not have been terminated; and



• The Commission is entitled to infer that Mr Scates would not have assisted Coles’ case had he been called as a witness on the basis of the rule in Jones v Dunkel 37.

[124] I do not accept this submission. It is well established that evidence is not necessarily needed from the person who made the decision to dismiss, for the Commission to find that there was a valid reason for dismissal, even in the absence of incontrovertible evidence about the reasons for dismissal or where there is considerable challenge about the reasons for the dismissal. 38 In the present case there is incontrovertible evidence about the reasons for Mr Merlino’s dismissal. Mr Merlino challenges the validity and existence of the reasons. The persons who witnessed the pallet incident, investigated it and formulated the reasons for dismissal gave evidence. The person who conducted audits gave evidence as did the persons who drew conclusions about Mr Merlino’s conduct, capacity and work performance as a result of those audits. Mr Scates made a decision to dismiss Mr Merlino based on what he was told and his evidence could have added nothing to the elucidation of issues in dispute about the reasons for Mr Merlino’s dismissal.

[125] For the reasons set out above, I am satisfied that there was a valid reason for Mr Merlino’s dismissal. The Commission is required to be satisfied that there was a valid reason for dismissal and not that the person who decided to dismiss believed on reasonable grounds that there was a valid reason for dismissal. As Coles points out – correctly in my view - the submission on behalf of Mr Merlino on this point appears to suggest that Mr Scates could have given evidence about what decision he might have made had he been aware of mitigating factors which Mr Merlino asserts were relevant to his decision and which may have resulted in Mr Scates imposing a lesser disciplinary outcome. Those mitigating facts were contested in the hearing of Mr Merlino’s unfair dismissal application. A number of them were only raised after Mr Merlino was dismissed. I am unable to accept that such evidence is relevant to these proceedings at all much less in relation to the question of whether Mr Merlino was given an opportunity to respond to the allegations about conduct which was the reason for his dismissal.

[126] If Mr Merlino wished to advance the argument that his dismissal was unfair on the basis that Mr Scates failed to consider mitigating circumstances then he could have called Mr Scates. Mr Scates is no longer employed by Coles and had not been employed by Coles for a period of at least six months prior to the hearing of Mr Merlino’s application. Mr Merlino caused notices requiring attendance to be issued to other witnesses and could have issued a notice to Mr Scates. I also accept that Mr Scates’ evidence was unnecessary given the evidence of Mr Millard and Ms Lauder, who attended the meeting at which the reason for Mr Merlino’s dismissal was discussed. In those circumstances no inference can be drawn about the fact that Coles did not call Mr Scates to give evidence. The record of the meeting on 2 June 2014 at which the reason for Mr Merlino’s dismissal was discussed indicates clearly that Mr Merlino was given an opportunity to respond to that reason and did so at length. A page containing Mr Merlino’s response is attached to the discussion record. 39 The written record of the discussion is confirmed by Mr Merlino’s digital recording of the meeting and the transcript tendered by him. Even if an inference was drawn about the failure of Coles to call Mr Scates to give evidence, the inference is simply that his evidence would not have assisted Coles’ case.

[127] Accordingly, I am satisfied and find that Mr Merlino was given an opportunity to respond to the safety breach in the meeting held on 2 June 2014.

4.4 Was there an unreasonable refusal by Coles to allow Mr Merlino to have a support person present to assist at any discussions relating to the dismissal?

[128] Mr Merlino accepts that there was no unreasonable refusal by Coles to allow him to have a support person present to assist in discussions relating to his dismissal. The meeting on 2 June 2014 was attended by Mr Merlino’s wife who was said to be there in the capacity of support person for Mr Merlino.

4.5 If the dismissal related to unsatisfactory performance—whether Mr Merlino had been warned about that unsatisfactory performance before the dismissal?

[129] For the reasons set out above, I am satisfied and find that to the extent that the dismissal related to unsatisfactory performance, Mr Merlino was warned in no uncertain terms about that unsatisfactory work performance prior to his dismissal. In short there was a consistent theme of failure on the part of Mr Merlino to comply with the policies and procedures and Mr Merlino was warned about the implications of these failures on numerous occasions and in no uncertain terms.

4.6 Did the size of Coles’ enterprise and the absence of dedicated human resource management specialists or expertise impact on the procedures followed in effecting the dismissal?

[130] Coles is a large employer and has dedicated human resource management specialists. The manner in which Mr Merlino was dealt with after his employment was terminated, was the subject of proceedings in which I decided that there were exceptional circumstances justifying an extension of time being granted for Mr Merlino to file his unfair dismissal application. This factor is not relevant to the procedures followed in effecting Mr Merlino’s dismissal.

4.7 Any other matters that the FWC considers relevant

[131] I do not consider that there are any other matters of significance that would outweigh my findings in relation to the other criteria in s. 387 so that on balance, Mr Merlino’s dismissal could be found to be unfair. The other employees said to have been involved in the pallet incident – Mr Tobys and Ms Tyson – were subordinate to Mr Merlino. I accept that Mr Tobys was not in a position to remonstrate with Mr Merlino about his conduct with respect to the pallets and that it would not have been reasonable for Coles to discipline Mr Tobys in relation to that matter. I also accept that Ms Tyson was not in a position to prevent Mr Merlino from climbing on the pallets and that she did raise the inappropriateness of his conduct with Mr Merlino when he climbed down from the pallets. While it is the case that Ms Tyson did not immediately report the incident, this is not a matter which goes to mitigating its seriousness.

[132] I accept the evidence of Coles’ witnesses that Mr Crow’s conduct in climbing on two stacked cartons of soft drink that were approximately one metre above the ground, was not comparable with the conduct of Mr Merlino in climbing on a stack of twelve pallets, on a pallet jack, to a height of two metres off the ground and with all of the attendant safety breaches and issues associated with that conduct.

[133] Further, I accept that the conduct of Mr Millard in asking Mr Merlino to transport prawns was not comparable to Mr Merlino’s conduct with respect to the pallet incident. The prawns were in chilled plastic crates; Mr Millard conducted a sense check with respect to the mode of transport with Coles’ State Food Safety Manager; Mr Millard assumed that temperature checks would be conducted in accordance with Coles’ policy (as he was entitled to do given Mr Merlino’s position); and Mr Merlino was at least partly responsible for ensuring that the temperature checks were undertaken. I also accept that if a food safety breach was involved on the part of Mr Millard it was not because of negligence and was not part of a continuing pattern of such breaches. Further, I note that Mr Merlino did not raise this issue until after he was dismissed and that it occurred almost six months prior to Mr Merlino’s dismissal.

[134] I have also considered the interpersonal issues between Mr Merlino and Ms Baker and Mr Millard, and in my view they did not impact on the validity of the reason for Mr Merlino’s dismissal and the warnings which preceded it. Further, I have considered that Mr Merlino had a lengthy period of service of some twenty years and that until his transfer to the Cairns region, had an apparently unblemished career during which he had been promoted and rewarded for his work performance. Regrettably, this factor does not, in the circumstances of this case, outweigh the serious misconduct that Mr Merlino engaged in and the fact that he put himself, his work colleagues and customers of Coles at significant risk. Mr Merlino was a Store Manager with considerable experience and knew that his conduct with respect to the pallet incident was entirely inappropriate.

5. CONCLUSION IN RELATION TO WHETHER THE DISMISSAL WAS UNFAIR

[135] On balance, I am satisfied and find that Mr Merlino’s dismissal was not unfair. Mr Merlino’s application for an unfair dismissal remedy is dismissed and an Order [PR575360] to that effect will issue with this Decision.

DEPUTY PRESIDENT

 1   PR561199, PR562226.

 2   Exhibit 1 - First Affidavit; Exhibit 2 - Second Affidavit: Exhibit 3 - Witness Statement; Exhibit 4 -Third Affidavit.

 3   Exhibit 13.

 4   Exhibit 12.

 5   Exhibit 14.

 6   Exhibit 16.

 7   Exhibit 17.

 8   Exhibit 19.

 9   Exhibit 22.

 10   Exhibit 26.

 11   Exhibit 3 “TM-11”.

 12   Exhibit 3.

 13   Exhibit 4.

 14   Transcript of Proceedings 27 May 2015 PN1192 – PN1197.

 15   Ibid at PN1249.

 16   Ibid at PN1269 and PN1275.

 17   Ibid PN1369.

 18   Ibid PN1370.

 19   Transcript of Proceedings 28 May 2015 PN2116.

 20   Exhibit 2, TM-6.

 21   Exhibit 1, Attachment TM-12.

 22   Transcript of Proceedings 29 May 2015 PN2902 – PN2906.

 23   Transcript of Proceedings 27 May 2015 PN873 and PN874.

 24   Exhibit 19, Attachment JAM-3.

 25   Transcript of Proceedings 27 May 2015 PN905 and PN906.

 26   Exhibit 1, Attachment TM-1.

 27   Exhibit 19 Attachment JAM-7.

 28   PN3406 to PN3412.

 29   Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204.

 30   Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

 31   Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.

 32   Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.

 33   Linfox Australia v Fair Work Commission [2013] FCAFC 157.

 34   PR931440, 14 May 2003.

 35 Ibid at [36].

 36   Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.

 37 (1959) 101 CLR 298.

 38   The Heran Building Group Pty Ltd v Anneveldt (2013) 236 IR 123; [2013] FWCFB 4744 at [16].

 39   Exhibit 3, attachment TM-11.

Printed by authority of the Commonwealth Government Printer

<Price code G, PR574330>