Tuan Nguyen v Adelaide Fencing and Steel Supplies Pty Ltd
[2020] FWC 79
•30 JANUARY 2020
| [2020] FWC 79 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Tuan Nguyen
v
Adelaide Fencing and Steel Supplies Pty Ltd
(U2019/8757)
COMMISSIONER HAMPTON | ADELAIDE, 30 JANUARY 2020 |
Application for an unfair dismissal remedy – business manager – alleged fraud and dishonesty associated with supply of product to a customer and other practices – whether dismissal unfair – serious allegations not supported by the evidence – legitimate issues of concern and some conduct reckless but not fraudulent or dishonest – valid reason for termination found – fair process for dismissal not followed – dismissal determined in a cursory manner without prior warning or genuine opportunity to deal with the substance of the allegations – dismissal harsh and unreasonable and accordingly unfair – compensation awarded.
1. What this decision is about
[1] Mr Tuan Nguyen (the Applicant) has applied to the Fair Work Commission (the Commission) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the FW Act) following his alleged unfair dismissal from Adelaide Fencing and Steel Supplies Pty Ltd (Adelaide Fencing or the Respondent).
[2] Adelaide Fencing, now trading as Bargain Steel Centre, is a home improvement business predominantly selling garages, sheds, verandas, carports and fencing products, predominately to trade customers and erectors. The business is based in Burton, in the north of metropolitan Adelaide.
[3] Mr Nguyen commenced employment with Adelaide Fencing in a full-time capacity on 22 February 2016. Mr Nguyen was initially employed as a Sales Representative but within a few months was promoted to a Business Manager position – as had been planned by the parties upon his engagement. Mr Nguyen formally commenced in the Business Manager position in early April 2016.
[4] Mr Nguyen’s employment was terminated on 31 July 2019 while he was on a period of personal leave covered by medical certificate. The letter of termination substantially relied upon two elements of alleged misconduct, namely:
“1 As per the cartage note on 22 July 2019 and invoices dated you arranged for a non-account holder contractor, Luke Ruediger, to be supplied with $3,403 worth of steel without charge and without authorisation.
2. On 18 July 2019 you incorrectly coded job orders “ZZ” for [CDB] 1 (724107), in an attempt to cover-up your mistakes/losses to the value of $1,119.30, contrary to my specific instructions on 14 July 2019, after you also coded the [MDL]2 order this way on 12 July 2019.”3
[5] Accordingly, the specific conduct allegations and conclusions related to allowing goods to be released to a customer without prior payment and using incorrect order codes in the business’ software to hide losses caused by his mistakes. Further, the letter of termination also stated to the effect that Mr Nguyen’s employment was terminated on the basis that Adelaide Fencing considered that he had engaged in fraudulent activity causing significant financial loss to the business in breach of his contractual duty to act in the business’ best interests.
[6] I observe that during the proceedings, those matters further morphed into broader allegations that Mr Nguyen had deliberately sought to undermine and cause financial distress to the business and had, in effect, conspired with another person to establish a business in direct competition using the Respondent’s intellectual property.
[7] Mr Nguyen denies the alleged fraud and suggests that releasing goods to some customers without prior payment was common practice and within his authority as the Business Manager. Further, that he was not responsible for any misconduct in connection with the coding of the jobs in question and in particular that he misused a particular job code, ZZJOBSUPPLY, as alleged by the Respondent. He also denies the later broader allegations.
[8] After conducting a directions conference with the parties on 23 September 2019 and considering the nature and extent of the evidence involved, I determined that a hearing would be the most effective and efficient way to resolve this matter.4
[9] I observe that there is no contest that the application was validly made within time, 5 that Mr Nguyen was dismissed,6 and that he was protected from unfair dismissal.7 Adelaide Fencing is also not a small business as defined under the FW Act.8
2. The cases presented by the parties
2.1 Mr Nguyen
[10] Mr Nguyen was represented, with permission, by Ms Millar of Australian Dismissal Services. Mr Nguyen provided written and later oral submissions, and two witness statements. Mr Nguyen also relied upon witness statements and oral evidence from the following persons:
• Mr Luke Ruediger, self-employed and a former customer of Adelaide Fencing – the customer to whom it was alleged the Applicant had improperly provided goods without payment;
• Mr Reynor Breetzke, a former Sales Consultant at Adelaide Fencing – who provided evidence about procedures at the Respondent during his employment; and
• Mr Gavin O’Connor, Owner – Outdoor Home Improvements Pty Ltd – the person who is alleged to have established the competing business with the support of the Applicant.
[11] The general propositions underpinning Mr Nguyen’s position may be summarised as follows:
• He was employed by Adelaide Fencing from 22 February 2016 to July 2019. He started as a Sales Representative but quickly, as planned with the owner of the business (Mr Choimes), advanced to a senior position as a Business Manager for the company.
• In his capacity as the Business Manager, he was authorised to release goods to customers without payment, noting that invoices would be, and were in each case here, issued for that customer.
• The owner of the business also regularly released goods to customers without prior payment and did so as part of a scheme where at least some of these sales were manually accounted for, and when paid in cash, the records were removed from the system.
• During his employment he was not given any formal warning relating to his conduct or performance.
• He had been bullied and ostracised by Mr Choimes, who had also bullied Mr Nguyen’s wife during her time working for Adelaide Fencing.
• On the morning of 24 July 2019 he suffered a mental breakdown and had to leave the workplace for medical assistance where he was diagnosed with severe depression and anxiety.
• He was provided a month-long medical certificate following the diagnosis. His doctor also undertook to immediately communicate that certificate to Adelaide Fencing, although he subsequently learnt that this did not happen.
• During the period covered by the medical certificate, which was supplied to the Respondent, he was variously invited to attend a Show Cause meeting, was told that a decision would be made in his absence if he did not attend, and had his employment terminated on 31 July 2019.
• He denies all of the fraud allegations and maintains he did not engage in any misconduct as relied upon in his termination, or more generally.
• He did not improperly release goods without payment and the practice of providing credit to known contractors was common in the business.
• He was never instructed not to use the job code “ZZJOBSUPPLY” and did not mis-code other orders as now alleged. Rather, the alleged errors relate to production and in another case to the ordering of flashings by the installer, after the primary construction has been completed, to finalise the job.
• There was no valid reason for the dismissal.
• He suggests that even if the allegations were true (which is denied) they would not constitute a valid reason for termination and would represent a disproportionate response by Adelaide Fencing.
• He was not provided sufficient opportunity to respond to the decision to terminate his employment given how the events unfolded while he was on a period of sick leave covered by a medical certificate.
• He was not paid leave in lieu of notice upon termination, although he was paid his accrued annual leave.
• He denies allegations that his post-employment conduct was in breach of his employment contract.
• His employment contract dated 11 April 2016 is the contract covering his employment. This contract contains no restraint of trade or similar clause. A contract relied upon by Adelaide Fencing in these proceedings dated 22 February 2016 containing such clauses is not authentic and he questioned the veracity of Adelaide Fencing in providing such to the Commission.
• As part of his mental health recovery efforts, he has engaged in limited volunteer work in a company owned by a personal friend, Mr O’Connor. He denies improperly sharing any of Adelaide Fencing’s intellectual property with this company.
• He denies that any of his conduct prior to, and after, his dismissal was carried out with a view to damaging Adelaide Fencing, including the suggestion that he had encouraged Adelaide Fencing staff to leave the business.
• Despite engaging in this volunteer work he has yet to secure another job. 9
[12] Mr Nguyen contends that the dismissal was, having regard to the considerations provided by s.387 of the FW Act, unfair and that the maximum compensation available in lieu of reinstatement should be ordered by the Commission.
2.2 Adelaide Fencing and Steel Supplies Pty Ltd
[13] Adelaide Fencing was represented, with permission, by Ms Pierro of Adelaide Aspire, a Human Resources consultant providing service to the Respondent. Adelaide Fencing provided written and oral submissions responsive to the issues. In addition, Adelaide Fencing relied upon witness statements and led sworn evidence from the following employees:
• Mr Stamatis (Steve) Choimes, Managing Director – the Respondent’s key witness and the person who made the decision to dismiss the Applicant;
• Ms Tracey Gourlay, Accounts Receivable and Personal Assistant to Mr Choimes – who gave evidence about accounting procedures and the conduct of the business;
• Mr Matthew Corkin, unstated formal position but directly engaged in the business 10 – the person who is alleged to have given the Applicant some express “instructions” and a “warning” about the use of the ZZJOBSUPPLY job code; and
• Ms Renai Richardson, Sales Representative – who gave evidence about information allegedly given to her and her partner by the Applicant about the vulnerability of the partner’s employment with Adelaide Fencing and actions taken by Mr Nguyen in that regard.
[14] The general propositions underpinning Adelaide Fencing’s position as advanced at the conclusion of the case may be summarised as follows:
• There was a valid reason for dismissal; namely that Mr Nguyen had given goods from his employer to customers without payment. This included supplying goods to a customer (CDB) where the supply of some materials was deliberately coded using the incorrect code to cover his mistakes and the supply of goods to Mr Ruediger, who already had outstanding debts, without payment and without the required authorisation of Mr Choimes.
• Mr Nguyen’s behaviour was deceptive and deliberate. This included that he signed and crossed-out the payment amount in the cartage note for Mr Ruediger and was aware that the business’ accounting system was flawed and took advantage of this to do damage to the Respondent.
• Mr Nguyen used the ZZJOBSUPPLY code immediately after he had been directed not to use that code for mistakes and he was warned about continuing inappropriate use of that code.
• Other losses associated with Mr Nguyen’s conduct in relation to the coding of jobs had also now been discovered and these had confirmed additional losses to the business.
• Based upon its view of Mr Nguyen’s conduct, it had made a report to the Police and anticipated that this was would be subject to a criminal investigation in due course.
• Mr Nguyen was aware from an email on 23 July 2019 that Mr Choimes wanted to meet with him on 24 July and he attended work only briefly on that day and then left without notifying other management. When the Applicant did not attend the scheduled meeting he was sent a show cause notice at 12.11 pm on that day, with a meeting scheduled for the following day, 25 July 2019. The Applicant then quickly arranged a doctor’s appointment at 2.00pm on 24 July to get a workers compensation certificate to divert attention from his own conduct.
• The Applicant’s claims of bullying are unsubstantiated and part of an ulterior motive.
• The Respondent has subsequently discovered that it had been misled about earlier claims by another employee that Mr Nguyen had encouraged employees to leave the business and this conduct was inconsistent with the senior management role held by the Applicant.
• Mr Nguyen had subsequently used the Respondent’s intellectual property (photos of jobs undertaken with Adelaide Fencing’s materials) and potentially other information and provided this to Mr O’Connor, who was a former customer in a commercial dispute with the Respondent, and is now running a business in direct competition where the Applicant nominated as the primary contact point for that enterprise and being its sales force.
[15] Adelaide Fencing denies that the dismissal was harsh, unjust or unreasonable and contends that the application should be dismissed. In the alternative, it also contends that the Commission should take into account the Applicant’s post-dismissal conduct including his use of the Respondent’s intellectual property to assist the competitor and his initial failure to even disclose that he had been working for Mr O’Connor. In this latter regard, the Respondent also contends that the claimed arrangements with Mr O’Connor, that he was an unpaid volunteer working up to 20 hours per week, were dubious and supportive of its view about Mr Nguyen’s motives and actions more generally.
3. Observations on the evidence
[16] Before dealing with each of the witnesses, I should make some observations about the course of evidence in this matter. Prior to proceedings, Mr Nguyen sought that he give his evidence without the presence of Mr Choimes in the hearing room due to his medical condition and status. This was opposed by the Respondent on that basis that the Applicant’s workers compensation claim had been rejected and his allegation of bullying underpinning his stated medical condition were strongly disputed.
[17] There was some medical evidence supportive of the Applicant’s request. I also note that his workers compensation claim has been denied by the insurer concerned but not yet subject to any consideration by the relevant Tribunal.
[18] In balancing the interests and considerations, I put arrangements in place for the Applicant to watch the proceedings via video-link from a near-by conference room and to attend the hearing room only for the purpose of giving his evidence, including his cross-examination. During the Applicant’s evidence, Mr Choimes went to the conference room to observe the hearing and arrangements were also made for him to regularly provide instructions to his representative. These arrangements were made as a matter of abundant caution, without any decision as to the disputed elements underpinning the request, and in order to permit those matters to be put to the relevant witnesses openly and safely.
[19] Further, despite a grant of permission for the Respondent to be represented, it became apparent to me that many of the significant elements of its factual case were not put to Mr Nguyen under cross-examination. To assist me to determine the matter, and so as to ensure that natural justice was afforded to both parties, 11 Mr Nguyen was recalled at the conclusion of the Respondent’s case to enable those matters to be put to him.
[20] I also observe that after each party had closed its evidentiary case and arrangements had been made to hear final submissions at a resumed hearing, the Respondent sought to provide additional evidence including a further statement of Mr Choimes and new statements from further persons. In the context of an indication that leave would need to be sought to lead any further evidence, together with some explanation as to why this evidence was not provided or even foreshadowed earlier, the Respondent did not seek to rely upon any of that material. 12
[21] Much of this case depends upon the credibility of the witnesses. In general terms, each party called into question the veracity of the other side’s witnesses.
[22] I generally found that Mr Nguyen’s evidence was given openly and was, with some important exceptions, convincing. Those exceptions stem from his propensity to draw conclusions about Mr Choimes’ business activities on what appeared to be a limited foundation. This included the basis upon he suggests that certain ‘off the books’ sales were arranged and recorded on a whiteboard by Mr Choimes. 13 Further, there were some occasions where I gained the impression that he was adjusting the evidence on some relatively peripheral issues to support his case. This does not lead me to discount his evidence entirely, but I treat it with caution on some issues.
[23] I found Mr Ruediger’s evidence to be given honestly and openly. It was clearly not given in a partisan manner and some of that evidence was not always helpful to the Applicant. This included a concession that whilst the provision of the materials without requiring immediate payment was an important part of attempts to support his business’ survival and that this was made known to the Applicant, he would not have extended himself credit if the roles had been reversed. 14
[24] Mr Breetzke’s evidence was genuine but of limited use in determining the disputed events. That is, whilst some of the contextual evidence was relevant and confirmed general practices during his time with the business, he was employed only until 30 June 2017 and was no longer in the company when the alleged incidents occurred. This means that I have allowed for the fact that some of these practices may have changed after his employment concluded, where the evidence reliably confirms that this has occurred.
[25] Despite what appears on face value to be a very unusual arrangement involving the Applicant’s “voluntary” work, I found that Mr O’Connor’s evidence was generally given in an open and honest manner, including where comments may not have reflected well on some of his business practices and the degree to which he was managing the new activities. I will return to the significance of these arrangements.
[26] It was clear to me that Mr Choimes’ evidence was significantly influenced by his strong personal views about what he considers to be the conduct of the Applicant. This is perhaps understandable given that Mr Choimes and Mr Nguyen were friends and business associates and Mr Choimes treats his business and those within it on a personal basis. However, this also means that there is little objectivity in his evidence and I found that he had a tendency to exaggerate and was quick to draw an adverse inference regarding Mr Nguyen from any event. There were also some elements of his evidence that were new to the Respondent’s case and this left me unsure as to whether they were being developed as the case went along or that the Respondent’ case was not fully articulated to that point. In any event, these factors lead me to treat Mr Choimes’ evidence with some caution, particularly to the extent that he was dealing with events or circumstances that he did not directly see or undertake himself and where he was apparently influenced by his strong subjective views.
[27] Ms Gourlay gave evidence on the invoicing and re-delivery process for Adelaide Fencing. Ms Gourlay’s evidence was guarded to a degree and she did not seem willing to make concessions, including to the extent that the business may have debtors she was not aware of. I treat her evidence regarding the Adelaide Fencing’s approach to non-account customer debtors with a degree of caution given that she was apparently not involved in dealing with such to any significant extent.
[28] I found Mr Corkin’s evidence to be genuine and credible. This includes the detail of a discussion that was conducted with Mr Nguyen in the lead up to the events contributing to the dismissal. However, his evidence about the status of that discussion and how and when it was reported to Mr Choimes was far less convincing.
[29] I found Ms Richardson’s evidence to be given openly and honestly. Ms Richardson was however short on the details of the timing of some of these alleged conversations and I cannot ignore the potential that her jaundiced view of the Applicant has led to some exaggeration in the detail.
[30] It would be clear from the earlier case summaries that the parties each made very serious allegations against each other, including suggestions of fraud and conspiracy. This included that the Applicant had deliberately caused financial damage to Respondent as part of a conspiracy, which has been reported to the Police, and that Mr Choimes (or another person) had forged Mr Nguyen’s signature on a fraudulent employment contract and adopted practices the effect of which was to hide sales and reduce taxation payments and to pay some employees in cash off the books, at least for some work performed.
[31] In these circumstances, I ensured that each of the relevant witnesses was aware of their individual privilege against self-incrimination; that is, their right not to provide materials or answer a question that would tend to incriminate them in connection with a relevant offence. None of the witnesses relied upon that privilege to refuse to answer any question.
[32] Given the nature of some of these allegations, in the concluding stages of proceedings I also raised with each of the representatives the implications of Briginshaw v Briginshaw. 15 In cases where allegations of a very serious nature are made in civil proceedings of the kind being considered here, the standard of proof in relation to the alleged conduct remains the balance of probabilities, but the nature of the issue necessarily affects the process by which reasonable satisfaction is attained.
[33] In Briginshaw, Dixon J said:
“Except upon criminal issues to be proved by the prosecution, it is enough that that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.” 16
[34] In Budd v Dampier Salt Ltd 17 a Full Bench of the Australian Industrial Relations Commission said the following in relation to Briginshaw v Briginshaw:
“[14] The second ground of appeal is that the Commissioner erred in the application of the principle in Briginshaw. So far as relevant, that case decided two things. The first is that where allegations are made in civil proceedings which, if proven, might found criminal liability, the standard of proof remains the civil standard. It follows that it is necessary that the court only be satisfied on the balance of probabilities. The second thing is that in such a case a proper degree of satisfaction is required having regard to the seriousness of the allegations. In the words of Dixon J., as he was: “The nature of the issue necessarily affects the process by which reasonable satisfaction is obtained.”
[15] In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd the High Court pointed out that care needs to be taken in applying what was said in Briginshaw.Furthermore, it would be wrong, for example, to apply a standard of proof higher than the balance of probabilities.Counsel for the appellant contended that the Commissioner failed to have regard to the seriousness of the situation for the appellant in making findings of fact as to what had occurred and in deciding that there were no extenuating circumstances for the appellant's behaviour.
[16] In relation to fact finding, the Commissioner analyzed the evidence with care. In making findings he indicated how the findings were reached, in particular why he rejected some evidence and accepted other evidence. There was no error in the fact-finding process. To the extent that this ground involves a contention that the Commissioner did not exercise the statutory discretion properly it should also be rejected. Briginshaw was a case concerned with the nature of findings about conduct. It is potentially misleading and unnecessarily complicated to attempt to apply Briginshaw to the exercise of judgement required once the findings about conduct have been made. Section 652(3) specifies the way in which the discretion is to be exercised and the matters to be taken into account. Loss of employment is a serious matter and applications for a remedy are to be dealt with seriously. That the Commissioner so regarded it in this case is clear from his decision. There is no basis on which to conclude that the Commissioner's approach to the fact-finding process or to the exercise of the discretion was erroneous because of anything said by the Court in Briginshaw. The second ground of appeal must be rejected.” (references omitted) 18
[35] I have applied the relevant approach in assessing the more serious alleged conduct in this case. This is ultimately important because the most serious allegations put against the Applicant were based upon a series of, generally, post-fact circumstantial constructions by the Respondent as to why the alleged conduct took place and was as serious as contended, rather than findings that could be supported by the objective first-hand evidence that is before the Commission.
4. Findings about the key context and events
4.1 The general context of Mr Nguyen’s employment with Adelaide Fencing
[36] As earlier stated, Mr Nguyen commenced employment with Adelaide Fencing in early 2016. Mr Nguyen became known to Adelaide Fencing through an existing employee of the business. After meeting with Mr Choimes, the Applicant provided a business proposal that involved him starting at the company as a Sales Representative before moving into a management position after a few months. This proposal was agreed to by Mr Choimes and Mr Nguyen commenced employment as a Sales Representative on 22 February 2016 earning approximately $65,000 per year, before moving into the Business Manager position earning $110,000 per year on or around 11 April 2016. 19 Mr Nguyen’s contract of employment was varied around this time to reflect the change in position.
[37] The timing and content of this varied contract is a contested matter, particularly as it relates to alleged post-dismissal conduct. It is necessary to determine which version of the contract covered Mr Nguyen’s employment at this juncture and at the point of the dismissal. Adelaide Fencing contends that Mr Nguyen’s applicable employment contract was that dated 22 February 2016 20 (February Contract), while Mr Nguyen contends that an employment contract dated 11 April 201621 covered his employment (April Contract).
[38] The differences between these contracts are material, including as the February Contract contains non-competition and intellectual property clauses, while the April Contract is silent on these points. In his role as Business Manager, Mr Nguyen drafted provisions such as these for use in employment contracts in around June 2016. On his evidence, which I accept on this point, the new clauses were added only to all new employee contracts after that point in time, but existing employees did not have their contracts changed to avoid potential conflict in the workplace. 22 During proceedings it was also suggested that the signature appearing in the February Contract was not Mr Nguyen’s and, by implication, had been forged by someone else. Various copies of Mr Nguyen’s signature were shown to me23 where focus was directed to whether the end stroke sloped up or down. I observe that a person’s signature will not always be an exact copy, and variations occur over time. I do accept that the purported signature of Mr Nguyen varies from those contained in other documents and it may not be genuine. However, I have relied upon other aspects to determine the genuine contract.
[39] The February Contract contains certain anomalies and mistakes, such as that Mr Nguyen will report to himself (rather than Mr Choimes as stated in the April Contract) and that he will be employed as a Sales Representative but would be paid $110,000 per year (the Business Manager rate).
[40] On the balance of probabilities, it is likely that the Applicant’s version of the contract is correct, that is to say the April Contract covered his employment. The February Contract contains material differences and obvious errors and Mr Nguyen has provided a plausible explanation why the April Contract was not further updated when he himself had drafted the clauses for new contracts.
[41] Beyond Mr Nguyen’s terms of engagement, I observe that prior to the events ultimately leading to Mr Nguyen’s dismissal, he and Mr Choimes shared a close relationship. Their families would occasionally dine together and share birthdays. It also appears a significant degree of mutual trust existed in this relationship, with personal issues discussed between the pair. 24 Amidst this close relationship between the families Mr Nguyen’s wife also took up a position at Adelaide Fencing as a Sales Representative. The engagement of Mr Nguyen’s wife at Adelaide Fencing was short lived however and Mr Choimes, in effect, terminated her employment in or around April 2018.25 It is not necessary for me to make any finding on the cessation of Mr Nguyen’s wife’s employment itself; however, I do find that this event likely caused some tension between Mr Nguyen and Mr Choimes. This tension expanded and resulted in both Mr Nguyen and Mr Choimes forming a dim view of each other and their respective work practices.
4.2 The process for recording sales and the procedure for authorising credit at Adelaide Fencing
[42] It is clear that Adelaide Fencing’s processes for recording sales and authorising credit were at the time somewhat imprecise and inconsistent. There was no formal written instruction manual as to how the system operates provided to the Commission and there was some tension even between the Respondent’s witnesses about how elements of this operated for non-account holders. It is clear that there were in any event a number of exceptions applied to the system’s normal account-based operation.
[43] For account customers, the process involved generation of an invoice and an outstanding debt being recorded in the system. I note that there could be a delay in such invoices and debts being recorded, for instance when sales are processed overnight. 26 These debts would then be automatically reconciled and billed by the Accounts Receivable personnel at the end of the month.27
[44] Based upon the evidence, there were some exceptions to this process when credit was, in effect, extended to some non-account customers. In some limited instances, a non-account customer was approved to take goods without pre-payment. Further, for some other large volume, probably supply and install jobs for the fencing and tubular steel division, that debt was recorded on a whiteboard in Mr Choimes’ office. For those jobs, it is likely that Mr Choimes arranged for these sales to be noted on his own account and later reconciled. 28 Who exactly may authorise release of goods without prior payment is a contested matter and I will return to that aspect shortly. In these circumstances an invoice would be generated as part of the sale, however this outstanding debt would apparently not appear as an account receivable and no automatic or formal process to follow-up these debts appeared to exist.29
[45] At least in the case of some non-account customers, a cartage note and order confirmation would be issued setting out the goods that were to be supplied, their unit cost and containing most of the details that would be contained on an invoice, including the account details for payment of the amounts due to Adelaide Fencing. The sales system subsequently generated an invoice based upon the information entered into the system to create the order confirmation. The cartage note was used by the customer to obtain the goods from the Respondent’s supply area.
[46] I observe at this point that use of a whiteboard to record outstanding debts and the receipt of cash payments in that regard is not necessarily improper; however, this practice clearly demonstrates a frailty within Adelaide Fencing’s systems. While an invoice was also generated for these and other non-account customers, these debts were not systematically tracked and were apparently not automatically reconciled in the formal accounting or sales systems. I further observe that given his role, Mr Nguyen should have been aware that some manual follow-up was necessary in such cases.
[47] It is not necessary for present purposes to make findings about the alleged cash sales and wage irregularities of Adelaide Fencing contended by the Applicant more generally. However, as these have been raised as part of the Applicant’s case, I would indicate that the evidence about such matters is certainly not sufficient for the Commission to make any adverse findings about these aspects involving Mr Choimes or the Respondent, and I should not be taken to have done so.
[48] As earlier mentioned, a limited pathway exists for goods to be released to some non-account customers without pre-payment. It is generally clear that Mr Choimes, as an owner/director of the business, had authority to authorise these transactions. 30 It is also clear on both cases, that Mr Nguyen had some authority in that regard.31 The dispute concerns whether that authority was removed at some point and if so, when.
[49] Adelaide Fencing made various suggestions about when and how the Applicant’s authority was removed. This included that all staff were sent an email to that effect. The existence of the email is disputed, and it was not provided to the Commission. The evidence about when any such email was provided was also inconsistent and unconvincing. The highest point sustained in the evidence is that there may have been some general understanding by many in the business that only Mr Choimes could authorise such sales. However, I cannot be satisfied on the balance of probabilities that Mr Nguyen was without any authority to sanction the supply of goods to some non-account holders without prior payment at the time of the events leading to his dismissal. He had done so at various times during his employment, he had express authority to authorise other transactions and he was the Business Manager with significant and wide responsibilities.
4.3 Mr Nguyen’s conduct in relation to the release of goods to Mr Ruediger on 22 July 2019
[50] The release of goods to Mr Ruediger was one of the major reasons relied upon by Adelaide Fencing in support of Mr Nguyen’s termination. As I have found above, Mr Nguyen had some authority to provide what was, in effect, credit to non-account customers; Mr Ruediger was a non-account customer. Mr Nguyen does not dispute that he allowed Mr Ruediger to take the goods without pre-payment, suggesting he extended credit because Mr Ruediger was a “reliable, repeat customer.” 32 Conversely, Adelaide Fencing suggests that Mr Nguyen’s actions in releasing the goods amounted to theft – a proposition I will return to.
[51] In the case of Mr Ruediger, Mr Nguyen put a sale through the system and organised a cartage note and order confirmation, which was given to Mr Ruediger to enable him to pick up the goods. The total amount shown at the bottom of the cartage note was crossed out and initialled by Mr Nguyen. Mr Nguyen gave evidence that this was done so that the supply staff would provide the goods without requiring immediate payment and I accept that evidence. It was not intended by Mr Nguyen that the goods were to be supplied without charge and, as expected, an invoice for the full amount was created for Mr Ruediger the next day, based upon the sale.
[52] While Mr Nguyen did have some authority to release goods to non-account customers, it is clear to me that this discretion was poorly applied on 22 July 2019 given Mr Ruediger’s business and personal circumstances. Mr Ruediger suggested that he was struggling financially in June 2019 due to issues with a company he had previously contracted for and that Mr Nguyen extended the goods to assist him. 33 I note here that a conflict arose between Mr Ruediger and Mr Nguyen’s respective evidence. Mr Ruediger suggests he had a direct conversation with Mr Nguyen regarding his financial and personal circumstances at the time.34 Mr Nguyen’s account differs; he suggested in evidence that he did not become aware of the particulars of Mr Ruediger’s financial circumstances, including his inability to pay, until after he was terminated.35 Consistent with my view of Mr Ruediger’s evidence more generally, I find that Mr Nguyen was aware of Mr Ruediger’s particular circumstances when he decided to release the goods. In this regard, I do not believe Mr Nguyen intended the goods to be released as a gift, that is to say – without payment at any stage. Mr Nguyen’s evidence was consistent that the goods were released on the basis that Mr Ruediger would pay the outstanding amount once he was paid himself.
[53] Given his awareness of Mr Ruediger’s particular financial circumstances, Mr Nguyen as a senior manager at Adelaide Fencing, should have exercised his authority with due regard to the interests of the business. This would include, for example, whether and when goods should be released to a non-account customer, whether those particular goods or substitute goods should be released, and importantly, how and when payment will be received by the business. The evidence before me is that Mr Ruediger was unable to immediately pay for the goods and there were obvious doubts regarding his capacity to pay for the goods within a defined future period. Mr Ruediger himself acknowledged this and conceded that he would not have extended credit to himself in those circumstances. 36 I am satisfied that Mr Nguyen allowed the goods to be released on credit to Mr Ruediger but was reckless in doing so given the circumstances. Further, given Mr Nguyen’s knowledge of the payment system, more steps should have been taken to ensure that Mr Ruediger’s debt was properly documented and established rather than simply relying on the automatic invoice system.
[54] I briefly turn to the Respondent’s proposition that Mr Nguyen’s actions regarding Mr Ruediger constitute fraud or theft from the business. Adelaide Fencing, through Mr Choimes, contends that Mr Nguyen provided “stolen” goods in that he did not get payment for the goods before they were released. 37 This is not sustainable given the evidence before the Commission and the findings set out above. Rather, on the evidence before me, I am not satisfied to the requisite standard that Mr Nguyen’s alleged actions, constitute theft or fraud.
[55] Overall, Mr Nguyen’s release of goods to Mr Ruediger was reckless and a very poor use of his authority. This finding is more akin to the Respondent’s alternative proposition on this aspect as outlined in final submissions. 38 Such actions would rightly cause disciplinary concerns for the employer and the consequences that flow from these actions will be considered later in this Decision.
[56] I observe for completeness that Mr Ruediger, at the time of the hearing, had not yet paid for the goods or any part of those goods but that a debt to do so was acknowledged. 39
4.4 Mr Nguyen’s conduct in relation to the CDB job and use of the ZZ job code more generally
[57] In essence, the allegations in this regard are that Mr Nguyen used an incorrect job code, ZZJOBSUPPLY, to cover up mistakes that he had made in ordering the materials for the CDB and other jobs. Further, it is alleged that Mr Nguyen and others were given a formal instruction not to use that job code in these circumstances.
[58] The letter of dismissal refers to an instruction being given on 14 July 2019. There is no evidence to support that notion. During the course of the hearing, Adelaide Fencing principally relied upon an alleged instruction and warning given by Mr Corkin on 11 and 16 July 2019. The evidence reveals that Mr Corkin was not in a formal management position and Mr Nguyen did not report to him. Mr Corkin was apparently engaged as a contract consultant to assist the business and was not given a formal title. I do accept that Mr Corkin advised Mr Nguyen that he and others should not be using the ZZJOBSUPPLY code when goods need to be remade and/or resupplied as another code, REDELIVER, was the appropriate code that should be used as this was monitored to assess the level of mistakes being made. I also find that Mr Corkin advised Mr Nguyen that if the practice continued, he would notify Mr Choimes who may then consider some disciplinary action.
[59] In all of the circumstances, I find that Mr Nguyen was given advice about the proper use of the codes, including the reason why this should be done, and that should this practice continue he would escalate the issue to senior management. I also accept that whilst reports could be generated to disclose rework, the use of the ZZJOBSUPPLY code when mistakes led to rework was not best practice, However, none of this was, of itself, a formal instruction or warning. It was at best, a warning that a warning might be given. I note that no immediate action was taken by Mr Choimes in relation to this issue and that this properly reflected the seriousness, or otherwise, of the conduct in its own right.
[60] For reasons outlined earlier, the allegations of the Respondent about Mr Nguyen’s conduct in the present context were not always consistent and there was a tendency to conflate the issues. I am not satisfied that Mr Nguyen inappropriately used the ZZJOBSUPPLY code after the 16 July 2019 meeting. Although Adelaide Fencing relied upon an invoice and the re-ordering of some purlins apparently completed at or after that time, it eventuated during the hearing that this related in part to a rework job that it was alleged was prepared by others following Mr Nguyen’s verbal instruction to supply some further purlins for a job. On the state of the evidence, I cannot be satisfied that Mr Nguyen completed that or any other order improperly at that time or that he expressly instructed that the further purlins job be undertaken using the ZZJOBSUPPLY code. There is also insufficient reliable evidence before the Commission to determine who was at fault, if anyone, in relation to that job.
[61] I am satisfied that Mr Nguyen did make some mistakes in ordering and this led to some rework and additional costs; however, it is evident to me that Adelaide Fencing has sought during these proceedings to expand the number and nature of these alleged mistakes, and in many cases, has done so without proper foundation. Whilst not related to the use of job codes, Adelaide Fencing also relied upon an allegation that Mr Nguyen had used a contractor without a builder’s licence. The evidence is that the relevant job was performed by a licenced builder but that the job may not have been invoiced by a licenced builder. I accept that Mr Choimes considers that this may cause a technical breach of the relevant building regulations, and without making any findings, 40 he may be correct about that; however, there is no indication that Mr Nguyen knowingly breached any such requirement or sought to or did expose the Respondent to any issues as a result.
4.5 Attempts to poach Adelaide Fencing staff and customers and related alleged conduct
[62] There are two aspects relied upon by Adelaide Fencing in this regard. Firstly, that Mr Nguyen had informed other staff that he was going to go into business for himself in competition with the Respondent and would poach its staff. On the balance of probabilities, I find that whilst Mr Nguyen may have “big noted” himself to Ms Richardson and may have expressed his concerns about the business’ treatment of staff – probably in light of the “dismissal” of his wife from the business, there is no reliable evidence that he took any steps, or that he ever had the intention, to set up his own business.
[63] Related to this first aspect is a suggestion, faintly advanced by the Respondent, that Mr Nguyen had attempted to poach customers and undertook actions allegedly to curry favour for a new business. 41 The evidence before the Commission is not capable of supporting any such allegation.
[64] Secondly, it is alleged that Mr Nguyen actively encouraged Mr Richardson (who was also an employee at the time) and potentially others to leave the Respondent’s business. Given the state of the evidence, I cannot be satisfied that Mr Nguyen actively sought to encourage employees to leave the business in any malicious manner. However, I do find that he did not handle the circumstances in a manner consistent with his role as a senior manager. That is, even based upon his own evidence, he did not take all of the actions that were appropriate such as gaining an understanding as to why employees were unhappy and attempting to remedy the situation. It appears to me that Mr Nguyen wanted to be a friend to the employees, which is admirable at one level, but did not sufficiently factor in the interests of his employer as would have been appropriate for a senior manager. Mr Nguyen’s comments about the business discussed above were also proper grounds for disciplinary concern by the Respondent.
[65] In that regard, I note that there is no reliable evidence that Mr Nguyen had any role in the February 2019 departure of a key employee to a competitor business as alleged by the Respondent.
4.6 The events surrounding the dismissal
[66] The evidence about these events is somewhat unsatisfactory. Foreshadowed evidence that may have been helpful to determine the facts of these events, including documentary and some allegedly direct evidence from others about the timing of the Applicant’s awareness of some disciplinary action, was not properly put to the Applicant and ultimately not led by the Respondent. 42 I must however decide the matter based upon the evidence that is properly before the Commission.
[67] Mr Nguyen alleges that workplace bullying led him to having a mental breakdown and his departure from the workplace on 24 July 2019. That allegation is firmly disputed and the examples provided by the Applicant appear limited at this juncture. However, there is little evidence about any alleged workplace bullying before the Commission and the Applicant does not seek to rely upon such for present purposes. There are other proceedings where the dispute about this aspect may ultimately be determined. There is some medical evidence, which I accept, to support the notion that Mr Nguyen was unwell at the time, and continues to be; however, I make no findings about the cause of this ill heath given the nature of these proceedings and the absence of proper evidence to do so.
[68] In relation to the timing of the events, Adelaide Fencing contends that Mr Nguyen was aware that it wanted to have a disciplinary meeting with him and that he read an email to that effect, then left the workplace and subsequently returned to delete files from his computer, and organised a doctor’s appointment and made a workers compensation claim as a response. The Respondent also relied upon the rejection of that claim as support for the notion that the Applicant was not genuine in that regard. As earlier noted, this claim has not been subject to any consideration by the relevant tribunal and the rejection of a claim by an insurer cannot be determinative.
[69] There was considerable dispute about an email attached to the Form F3 Employer’s Response that was allegedly sent by Mr Choimes to Mr Nguyen on the evening of 23 July 2019, setting up a meeting to discuss the CDB job and another matter. This email was not relied upon during the hearing by way of direct evidence and its authenticity was disputed on a number of grounds including a difference in the sending time stated. I observe that there is a feasible explanation for different sending times being displayed in the versions of this document held by the parties. 43 However, the state of the evidence and the absence of the detail of some related matters being put properly to Mr Nguyen on behalf of the Respondent complicates the making of findings on this aspect.
[70] On balance, it is possible that on the morning of 24 July 2019 Mr Nguyen was aware that Mr Choimes wanted to meet him about two jobs but I cannot be satisfied that this was the case. I am satisfied that Mr Nguyen left the workplace before he had received the show cause letter dated 24 July 2019 and that he had attended his Doctor and been diagnosed as being medically unfit before he was aware of those allegations and a proposed show cause meeting.
[71] I do not accept that Mr Nguyen returned to the workplace, or to his office, at any point on 24 July 2019 (or otherwise) and deleted material from the computer system.
[72] The show cause letter dated 24 July 2019 stated as follows:
“A serious matter has arisen since your meeting with Matt Corkin on 11 July, 2019 regarding the coding of workshop errors via re-deliver instead of (zz job supply), where you were specifically told that you were to code these correctly so that the business could track and have full transparency over financial losses which have occurred.
It has been brought to my attention that as a leader you have ignored my request and done the same incorrect process for [CDB] 724107, whereby you have ignored my instruction for transparency. These include but are not limited to -
• Failing to follow Management direction as per my instructions on 14 July, 2019.
• Incorrectly coding job orders on 18 July 2019, in an endeavour to cover-up losses to the value of $1119.30.
• Allowing stock to be released without payment $3403.03 Luke Ruediger
Due to the considerable cost to Bargain Steel Centre and the lack of trust and confidence we have in your ability to perform your leadership role as per our specific instructions , you will need to show cause why your employment should not be terminated based on a fundamental failure to perform your duties diligently and competently, as required by your contract of employment.
A Show Cause meeting is scheduled for 10:00 at Bargain steel centre boardroom. Present at this meeting will be Emma, Angelo and myself and you will be given an opportunity to respond to the above. You can provide a written statement to me in response to this issue at or before our meeting. At this meeting you are welcome to bring a support person.
Please confirm with me that you are able to attend the meeting at the above time.” 44
[73] Mr Choimes rang Mr Nguyen on the afternoon of 24 July but did not leave any specific message.
[74] Mr Nguyen understood that his Doctor’s practice would provide a copy of his medial certificate to Adelaide Fencing on 24 July but it did no do so and the Respondent was not aware of this development until 25 July when the Applicant advised the internal HR Officer that he was unable to attend work due to illness. The medical certificate was subsequently supplied to the Respondent.
[75] Having consulted the Office of the Fair Work Ombudsman, Mr Nguyen informed Adelaide Fencing that he was advised that he did not need to attend any meetings or work-related activities due to his medical condition and certificate. He was informed by Adelaide Fencing that he must attend the disciplinary meeting.
[76] Mr Nguyen subsequently received a further show cause letter and an invitation to attend a meeting at 10.00am Tuesday 30 July 2019. This raised the same issues as the earlier letter but noted that Mr Nguyen needed to respond despite his medical certificate and that:
“You can respond to the above in writing as an alternative to attending this meeting however, a decision on your employment future will be based on the information available to us and you are strongly advised to give us as much detail as you can in response.” 45
[77] It is also likely that on 26 July 2019 Mr Choimes left a message on Mr Nguyen’s phone to the effect that the discussion between them could be done one on one and could await an improvement in the Applicant’s health. It is probable that after Mr Choimes became aware of the workers compensation claim, he was no longer prepared to give Mr Nguyen any benefit of the doubt.
[78] Mr Nguyen did not attend the show cause meeting or provide a response to the allegations made.
[79] On 1 August 2019, Mr Nguyen received the letter of dismissal dated 31 July 2019, the substance of which was set out earlier in this decision. It is clear from his own evidence 46 that Mr Choimes made the decision to dismiss Mr Nguyen some days earlier.
[80] I observe that whilst the revised show cause letter provided the opportunity for Mr Nguyen to provide a written response, the allegations contained in the letter were not complete and contained a number of important errors in dates and the details of the actual job order allegations, that also made that opportunity somewhat problematic.
4.7 The post-dismissal events
[81] Generally, I would leave findings on these matters until after the substantive merit has been considered and determined. However, in this case, the Respondent relied in part upon that conduct as evidence demonstrating the motivation and alleged fraudulent activities of Mr Nguyen.
[82] The evidence reveals the following:
• Despite the initial rejection of the Applicant’s workers compensation claim, Mr Nguyen has been placed on a rehabilitation plan that includes encouraging him to participate in work placements or voluntary work as part of work hardening activities;
• Mr O’Connor sought to establish a small side business some time earlier and did not have any dealings with Mr Nguyen about that prospect at that time;
• Mr O’Connor became aware that Applicant had been dismissed and was mentally vulnerable. Due to his own family experience, and personal concerns about Mr Nguyen’s wellbeing, Mr O’Connor was keen to provide a context in which the Applicant could continue with some work engagement and as part of his rehabilitation;
• The new business established a website and Mr Nguyen provided some photos of jobs that had been undertaken using materials supplied by Adelaide Fencing and erected by some of their construction customers, including the other business of Mr O’Connor. It is likely that some of those photos were taken by and for Adelaide Fencing and although the owners of the premises may have been contacted by Mr Nguyen, the intellectual property (IP) may lie with the Respondent and others. I observe that although Mr Nguyen was not subject to an express IP provision in his contract, the use of this material given all of the circumstances does not reflect well upon the Applicant;
• Mr Nguyen agreed to work on a voluntary basis in the new business and is recorded on the website as being the contact point;
• Mr O’Connor utilises Mr Nguyen in that capacity and relies upon the Applicant’s sales skills and his willingness to attend the premises of potential clients and organise quotes;
• The level of activity of the new business is small with as a little as one phone call prompted by the website per week and Mr Nguyen attends the workplace, not always to perform any meaningful work, somewhere between 10 and 15 hours per week; and
• Mr O’Connor does not pay Mr Nguyen or reimburse any expenses in connection with these activities, and there is no profit share or related remuneration arrangements in place.
[83] As a result, these arrangements are somewhat unusual and appear to be convenient. However, based upon the evidence there was no conspiracy with Mr O’Connor to establish his business and these events are not confirmation that Mr Nguyen was earlier attempting to damage his former employer’s business. The post dismissal conduct does not in these circumstances inform the existence of a valid reason for dismissal. There are however some aspects of the post dismissal conduct that are potentially relevant to remedy and I will canvass those at the relevant time.
5. Whether the dismissal was unfair (harsh, unjust or unreasonable) – s.387 of the FW Act
[84] Given the above findings, I need to consider whether the dismissal of Mr Nguyen was unfair.
[85] Section 385 of the FW Act provides as follows:
“385 What is an unfair dismissal
(1) A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[86] Given that my findings satisfy s.385(1)(a) and items (c) and (d) are not relevant, Mr Nguyen dismissal will be unfair if it is found to be harsh, unjust or unreasonable.
[87] Section 387 of the FW Act provides 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.”
[88] It is clear that s.387 of the FW Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the FW Act sets out a number of considerations that must, where relevant, be weighed up in totality.
[89] It is convenient therefore to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.
Section 387(a) – whether there was a valid reason for the dismissal related to Mr Nguyen’s capacity or conduct (including its effect on the safety and welfare of other employees)
[90] Valid in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly.47
[91] It is also clear from the authorities that the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts before the Commission. That is, it is not enough for an employer to rely upon its reasonable belief that the termination was for a valid reason.48 Equally, facts justifying dismissal, which existed at the time of the termination, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.49 In this case, the subsequent allegations of additional misconduct associated with Mr Nguyen’s use of the job codes more generally and in relation to the discussion with other employees about other employment and related allegations are capable of being relied upon in this context. For reasons set out earlier, the alleged post-dismissal conduct is not relevant in this regard.
[92] Based upon my earlier findings regarding Mr Ruediger, Mr Nguyen was not breaching an instruction, did not steal or allow Mr Ruediger to steal the goods, and intended that Mr Ruediger would be responsible for payment for the goods. However, I am satisfied that Mr Nguyen was reckless in his approval of the sale, on credit, to Mr Ruediger and in the absence of his follow up of that sale.
[93] Mr Nguyen also made some mistakes in ordering and in using the ZZJOBSUPPLY code at times. I am not satisfied that he did so in breach of any lawful direction or that the conduct was considered as serious at the time. I also cannot be satisfied that Mr Nguyen was acting fraudulently or with any intention to cause commercial harm to the business in this or any other regard during his employment.
[94] However, given his senior role, Mr Nguyen did not always act consistently with the best interests of his employer including in his dealings with some employees potentially seeking opportunities elsewhere.
[95] Having objectively considered all of the relevant circumstances related to Mr Nguyen’s capacity and conduct based upon the findings of the Commission, I am on balance persuaded that the combination of his conduct constituted a valid reason for dismissal.
Section 387(b) – whether Mr Nguyen was notified of the reasons for dismissal
[96] This consideration requires the Commission to assess whether the applicant concerned was relevantly notified of the reasons leading to the dismissal before that decision was taken.50
[97] Subject to the caveat outlined below, Mr Nguyen was, at least in general terms, notified of the reasons for his dismissal that were expressly relied upon at the time.
Section 387(c) – whether Mr Nguyen was given an opportunity to respond to any reason related to his capacity or conduct
[98] The process contemplated by the FW Act does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly. This question becomes whether Mr Nguyen was aware of the precise nature of the employer’s concern about his capacity and had a reasonable opportunity to respond to these concerns.51
[99] Given my earlier findings about the events surrounding the dismissal and the deficiencies associated with the show cause process and stated allegations, I am not satisfied that a reasonable opportunity was provided to Mr Nguyen as contemplated by this consideration.
Section 387(d) – any unreasonable refusal by the respondent to allow Mr Nguyen a support person
[100] There was no meeting actually conducted and no request was made by Mr Nguyen for a support person. This consideration does not arise in this matter.
Section 387(e) – if the dismissal is related to unsatisfactory performance by Mr Nguyen – whether he has been warned about that unsatisfactory performance before the dismissal.
[101] This consideration relates to performance of the job. Performance in this context includes the employee’s capacity to do the work, and the diligence and care taken with that work.52
[102] For reasons set out earlier in this decision, I do not accept that Mr Nguyen was warned about his work performance or behaviour in any meaningful disciplinary sense.
Section 387(f) – the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.
Section 387(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.
[103] I deal with these two considerations together.
[104] Adelaide Fencing is a not a small business and has access to dedicated external human resource management specialists. To the extent that the processes adopted lead to the manner of the dismissal, the circumstances of Adelaide Fencing do not represent a mitigating consideration in the context of these factors.
Section 387(h) - other matters considered to be relevant
[105] Amongst other considerations, the Commission should consider the impact of the dismissal upon the applicant given all of the circumstances. This dismissal meant that Mr Nguyen lost his employment with the normal consequences of that event. This occurred with a valid reason for dismissal but without a warning and without notice or pay in lieu of notice.
Conclusion on nature of dismissal
[106] The FW Act requires a global assessment having regard to the various relevant statutory considerations. In that context, procedural unfairness is an important consideration given the provisions of the FW Act but does not necessarily mean that the dismissal was unfair. This is reinforced by the objects relating to Part 3-2 Unfair Dismissal of the FW Act in s.381 which relevantly provides as follows:
“381 Object of the Part
… …
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”
[107] As revealed in various decisions of the Commission (and the Court), each case must be considered in its own circumstances and it is appropriate, amongst other factors, to have regard to whether the procedural deficiencies made any difference to the fairness of the outcome.53 In this case, given the circumstances that have led to dismissal, it was procedurally unfair and many of the most serious allegations and grounds relied upon by the Respondent were not sustained on the evidence. The procedural deficiencies also limited Mr Nguyen’s capacity to provide a reasonable response, which objectively should have materially impacted upon the assessment of that conduct by the Respondent.
[108] I also consider that the dismissal was harsh and disproportionate, particularly as it was without notice.
[109] Given the facts of the matter and the statutory considerations, I am satisfied that the dismissal of Mr Nguyen was harsh, and unreasonable. It was therefore unfair within the meaning of the FW Act.
6. Remedy
[110] Mr Nguyen does not seek reinstatement to his former position, but rather, compensation.
[111] Division 4 of Part 3-2 of the FW Act relevantly provides as follows:
“Division 4—Remedies for unfair dismissal
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) the FWC may make the order only if the person has made an application under section 394.
(3) the FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
… …
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. Disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
393 Monetary orders may be in instalments
To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”
[112] The prerequisites of ss.390(1) and (2) have been met in this case.
[113] Section 390 of the FW Act makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. Mr Nguyen does not seek reinstatement and I find that such would be inappropriate in all of the circumstances of this matter.
[114] As set out above, under the FW Act, it is then necessary to consider whether compensation in lieu of reinstatement is appropriate.
[115] A Full Bench in McCulloch v Calvary Health Care Adelaide54 (McCulloch) confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg55 remains appropriate in that regard.
[116] Section 392(2) of the FW Act requires me to take into account all of the circumstances of the case including the factors that are listed in paras (a) to (g). Without detracting from the overall assessment required by the FW Act,56 it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.
The effect of the order on the viability of Adelaide Fencing
[117] Nothing was put on this aspect but Adelaide Fencing is a large business and there is no indication that an order of kind being considered here would impact upon the viability of that business.
The length of Mr Nguyen’s service with Adelaide Fencing
[118] Mr Nguyen worked for Adelaide Fencing for approximately three years and five months, which is not of insignificant duration.
The remuneration Mr Nguyen would have received, or would have been likely to receive, if he had not been dismissed
[119] This involves, in part, consideration of the likely duration of Mr Nguyen’s employment in the absence of what I have found to be an unfair dismissal. That is, the establishment of the anticipated period of employment.57
[120] There were legitimate issues concerning aspects of the working relationships at the time. I have also found that ultimately there was a valid reason for dismissal; albeit on a much narrower basis than posited by the Respondent.
[121] The anticipated period of employment requires consideration as to how long the employment would have continued before it otherwise came to an end fairly, or on some justified or mutual basis. An applicant employee might also leave of their own volition and this is a reasonable prospect in this case.
[122] In this case, there were issues of concern that should have been subject to proper warnings and a pre-dismissal process if that was to occur. There were also legitimate issues of mutual trust between the key protagonists that must be taken into account given the senior role being undertaken by Mr Nguyen.
[123] I consider that the anticipated period of employment for present purposes should be in the order of some six weeks, including a period of notice. This reflects the balancing of all of the circumstances and inferences arising from the facts of this particular matter.
[124] Mr Nguyen was paid an annual salary of $110,000, being a gross weekly payment of $2,115 per week, plus superannuation contributions.
[125] The projected remuneration that Mr Nguyen would have received based upon the anticipated period of employment with Adelaide Fencing and the rate of remuneration paid would therefore have been $12,690 plus superannuation contributions.
The efforts of Mr Nguyen to mitigate the loss suffered by him because of the dismissal
[126] Mr Nguyen is participating in a rehabilitation program in light of his apparent medical condition. Whilst I have significant concerns about the legal basis of his “volunteer” work with Mr O’Connor, 58 it is consistent with the notion of the rehabilitation program and does not involve the payment of wages or any other form of remuneration.
[127] Given the limited period over which the anticipated period of employment has been projected, I do not consider that any discount on the basis of this consideration is warranted.
The amount of any remuneration earned by Mr Nguyen from employment or other work during the period between the dismissal and the making of the order for compensation
The amount of any income reasonably likely to be so earned by Mr Nguyen during the period between the making of the order for compensation and the actual compensation
[128] Mr Nguyen was not in receipt of any employment related income following his dismissal and was not in paid employment at the time of the hearing of this matter.
[129] He received no notice or pay in lieu of notice following his dismissal that should be taken into account as income under this consideration.
Any other matter that the FWC considers relevant and the remaining statutory parameters
[130] I have taken into account the projected nature of the anticipated loss of remuneration over a known period and given the circumstances of this case, it is not appropriate to make a further allowance for contingencies.59
[131] There is some demonstrated misconduct that should lead to a discount in the compensation as provided by s.392(3) of the FW Act. I consider that a discount of 20 per cent to the compensation figure otherwise arising is appropriate.
[132] In accordance with s.392(4) of the FW Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal. I also observe that compensation in this context is not in the nature of damages or a penalty for the actions of the employer.
[133] The maximum compensation limit in this case is the lesser of 26 weeks remuneration 60 before the dismissal occurred ($55,000) or the stated statutory cap of $74,350.61 The amount of compensation otherwise arising from the statutory considerations is less than the lower figure.
[134] Taxation as required would be payable on any amount determined. I consider that superannuation of 9.5 per cent 62 should be taken into account in relation to the compensation figure in this matter.
Conclusions on remedy
[135] Having regard to the circumstances of this matter applied to the considerations established by s.392 of the FW Act, I consider that it is appropriate to make an award of compensation to Mr Nguyen in lieu of reinstatement. Further, I consider that the compensation should amount to $10,152, 63 plus superannuation contributions, given the circumstances of this case and the terms of the legislation.
7. Conclusions
[136] I find that Mr Nguyen’s dismissal was unfair within the meaning of the FW Act.
[137] I have found that compensation is appropriate in lieu of reinstatement and the amount determined above is also appropriate in all of the circumstances.
[138] The compensation payment is to be made within 14 days of this decision.
[139] An Order64 consistent with the above is being issued in conjunction with this Decision.
COMMISSIONER
Appearances:
A Millar, of Australian Dismissal Services with permission for Mr Nguyen.
R Pierro, of Adelaide Aspire with permission, with S Choimes for Adelaide Fencing and Steel Supplies Pty Ltd.
Hearing details:
2019
Adelaide and Melbourne (by video link on 19 December)
5, 6 and 19 December.
Printed by authority of the Commonwealth Government Printer
<PR715761>
1 I have not used the client’s name in this Decision, but the full name was set out in the original letter to the Applicant.
2 As above.
3 Annexure 4 to Exhibit A1.
4 Section 399(1) of the FW Act.
5 Section 394(2) of the FW Act.
6 Section 386 of the FW Act.
7 Section 382 of the FW Act. Mr Nguyen had served the minimum employment period and was not paid above the high income threshold.
8 Section 23 of the FW Act.
9 Drawn from the Applicant’s Outline of Submissions, his witness statements and oral evidence.
10 Mr Corkin’s substantive position at Adelaide Fencing is relevant to this matter and will be discussed later.
11 Given the sequence in which the evidence was led by the Respondent, Mr Choimes had the advantage of seeing all of the evidence before giving his own. I draw no adverse inference from this and note that he was the primary instructor and that this outcome arose due to the desirability of permitting the Respondent’s other witnesses to return to the workplace to keep it operating.
12 Email from Ms Pierro dated 18 December 2019.
13 Transcript PN3044 and PN3063.
14 Transcript PN1118.
15 Briginshaw v Briginshaw (1938) 60 CLR 336, 363 (Dixon J).
16 Ibid at 362.
17 (2007) 166 IR 407 at [14] - [16].
18 This approach was endorsed under the FW Act by the Full Bench in H.J. Heinz Company Australia Ltd v Green [2014] FWCFB 6031 at [15].
19 Transcript PN125-129.
20 Attachment SC3A to Exhibit R5.
21 Exhibit A7.
22 Transcript PN2985-2991 and 3104-3107.
23 As appearing in Exhibit A10.
24 Transcript PN2192.
25 It is likely that the Applicant’s wife left the business following an indication that she was to have been dismissed.
26 Transcript PN1730.
27 Transcript PN1712.
28 Transcript PN2203.
29 Transcript PN1732-1740.
30 Exhibit R1 at [4].
31 Exhibit A9 and transcript at PN2534-2541.
32 Exhibit A1 at [23].
33 Exhibit A3 at [1] and oral evidence of Mr Ruediger.
34 Transcript PN1079.
35 Transcript PN504.
36 Transcript PN1117–1120.
37 Transcript PN2230 to 2237.
38 Respondent’s written outline of closing submission at 4.
39 Including at transcript PN1085 and 1112.
40 The relevant statutory requirements and evidence are not before the Commission about this matter.
41 Transcript PN2159.
42 Refer to paragraph [20] of this Decision.
43 The document was an actual email and not a PDF copy of the email. As a result, the sending time of the email might vary depending upon the time zone of the person printing the email.
44 Annexure 2 to Exhibit A1.
45 Annexure 3 to Exhibit A1.
46 Transcript PN2751.
47 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation, (2004) 133 IR 458 per Ross VP, Williams SDP, Foggo C and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C at par [36].
48 See Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; King v Freshmore (Vic) Pty Ltd AIRCFB Print S4213 per Ross VP, Williams SDP, Hingley C, 17 March 2000; Edwards v Giudice (1999) 94 FCR 561; Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Rode v Burwood Mitsubishi AIRCFB Print R4471 per Ross VP, Polites SDP, Foggo C, 11 May 1999.
49 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 373, 377‒378; Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1, 14. See also Dundovich v P & O Ports AIRC PR923358 8 October 2002, per Ross VP, Hamilton DP, Eames C at [79]; Lane v Arrowcrest (1990) 27 FCR 427, 456; cited with approval in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410, 467 and 468.
50 See Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160.
51 RMIT v Asher (2010) 194 IR 1. See also Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [75].
52 See Anetta v Ansett Australia Ltd (2000) 98 IR 233.
53 See Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Villani v Holcim (Australia) Pty Ltd [2011] FCAFC 155 as examples.
54 [2015] FWCFB 873.
55 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21. See also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431.
56 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446.
57 McCulloch.
58 Whilst consistent with the objectives and strategies of the rehabilitation plan and undertaken by Mr O’Connor for sound compassionate reasons, it is not clear that the work is formally part of an authorised plan and this may cast some doubt upon the capacity of the parties to treat it as a truly voluntary arrangement.
59 See the discussion of contingencies in McCulloch at [20] – [23]; Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431, at par [52]; Ellawala v Australian Postal Corporation AIRC Print S5109, per Ross VP, Williams SDP and Gay C, 17 April 2000 and in Enhance Systems Pty Ltd v James Cox AIRC Print PR910779, per Williams SDP, Acton SDP and Gay C, 31 October 2001.
60 It is the higher of the amount of remuneration received or entitled to be received for the previous 26 weeks period that is to be used under s.392(6)(a) of the FW Act.
61 Section 392(5) of the FW Act.
62 Based upon the Superannuation Guarantee Charge Act 1992 (Cth) and related scheme.
63 This amount takes into account the s.392(3) misconduct discount of 20 per cent.
64 PR716141.
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