Tuffin v Tom McArthur Pty Ltd
[2013] FWC 7218
•25 October 2013
[2013] FWC 7218
DECISIONS
AND
REASONS FOR DECISION
| Fair Work Act 2009 | |
| s.394—Unfair dismissal | |
| Richard Tuffin | |
| v | |
| Tom McArthur Pty Ltd (Receiver and Manager Appointed) | |
| (U2013/9508) | |
| COMMISSIONER CLOGHAN | PERTH, 25 OCTOBER 2013 |
| Unfair dismissal. |
[1] This is an application by Mr Richard Tuffin seeking a remedy for alleged unfair
dismissal from his employment with Tom McArthur Pty Ltd (Receiver and Manager
Appointed).
[2] The Employer asserts that Mr Tuffin’s employment ceased by way of mutual agreement. The circumstances surrounding the ending of Mr Tuffin’s employment are unusual in that the Employer’s witnesses resisting his application are related to him by marriage.
PROCEDURAL BACKGROUND
[3] On 13 May 2013, Mr Richard Tuffin (Mr Tuffin or Applicant) made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from his employment with Tom McArthur Pty Ltd (Receiver and Manager Appointed) (Employer) pursuant to s.394 of the Fair Work Act 2009 (FW Act).
[4] The application was not the subject of conciliation as the Applicant requested the matter proceed directly to arbitration.
[5] Procedural directions were issued on 3 July 2013 and arbitration took place on
16 September 2013.
[6] At the hearing on 16 September 2013, Mr Tuffin made opening and closing
submissions. Mr M Van der Wielen, the Applicant’s father-in-law, conducted cross
examination on his behalf. Mr Tuffin gave evidence on his own behalf.
[7] Ms M Saraceni of Counsel represented the Employer. Evidence was given on behalf of
the Employer by:
Ms G Visscher, Director (March - June 2013)
Mr G Sharpe, acting Chief Executive Officer (CEO)
[2013] FWC 7218
Mr T Brickhill, former CEO
Ms G Stafford, Consultant
[8] At the conclusion of the hearing, I reserved my decision. Having considered the
evidence provided as a result of the procedural directions, submissions and oral evidence, this
is my decision and reasons for decision.
RELEVANT BACKGROUND
[9] The Applicant commenced employment on 16 May 2011.
[10] The Applicant was employed as a Sales and Service Analyst with a probationary period of three (3) months.
[11] Mr Tuffin reported to Mr Sharpe who, until 1 April 2013, was the General Manager Sales and Distribution Channels.
[12] In August 2011, Ms Stafford was engaged by the Employer in a consultative role to assist Mr Tuffin “in the preparation of sales reports and procedures”. In addition, Ms Stafford was contracted to act as “a coach/mentor and available for Rick [Applicant] to assist him in
developing his analytical skills”. Ms Stafford carried out this role for approximately one (1)
week[1].
[1]Exhibit R8
[13] In February 2012, Mr Tuffin received a salary increase.
[14] On 16 January 2013 Mr Tuffin met with Mr Brickhill. Mr Brickhill was concerned with a stocktake report which Mr Tuffin had completed. Mr Brickhill considered this a “straight forward exercise” for a short period post Christmas. In particular, he considered it a simple exercise in view of the fact that Mr Tuffin had “confirmed to me that he had reconciled the stock figures just prior to Christmas and there should not have been too much stock to reconcile. Sales were slow just after Christmas.”[2]
[2]Exhibit R6
[15] Mr Tuffin produced stocktake reports which Mr Brickhill described as follows, “the stock calculations and the rates of stock usage, as a mathematical calculation, did not make sense...I explained Rick’s mathematical errors to him, as I had done so on previous occasions.Rick found it difficult to analyse and project data going forward”[3]. Due to a lack of
confidence in the data, it was necessary to carry out a manual stocktake (across the sites).
[16] On 15, 16 and 17 January 2013, the Applicant had discussions with the former CEO, Mr Brickhill and Mr Sharpe who was to become the acting CEO at the time of Mr Tuffin’s termination of his employment. Aspects of these discussions are in dispute between the parties. The Employer relies upon these discussions to assert that the Applicant’s employment ceased by way of mutual agreement.
[17] On 1 April 2013, Mr Sharpe was appointed acting CEO.
[2013] FWC 7218
[18] On 8 April 2013, Mr Sharpe advised Mr Tuffin that his employment would cease on
3 May 2013.
[19] On 15 April 2013, Mr Tuffin was provided with a letter of termination of employment. The letter confirmed that termination of employment is related to Mr Tuffin’s failure to meet performance expectations. The correspondence is signed by Mr Sharpe.
[20] On 30 April 2013, Mr Tuffin and Mr Sharpe agreed that the Applicant’s tasks and
hand over had been completed. Accordingly, the employment relationship ceased on 30 April
2013.
APPLICANT’S CASE
[21] The Applicant sets out in his application that his dismissal was unfair for the following
| reasons: |
unclear position description;
insufficient counselling. He was never informed of what he was allegedly doing
wrong or given the right to have a witness present;
insufficient discussions, particularly how to improve his allegedly poor
performance; and
insufficient compensation, “severance or redundancy pay for my sudden and
unexpected termination”. (my emphasis)
EMPLOYER’S CASE
[22] The Employer submits that:
the employment relationship was terminated by mutual agreement;
additionally, or in the alternative, Mr Tuffin’s dismissal was performance related;
the Applicant was provided with professional assistance to improve his
performance;
Mr Tuffin was dealt with in a fair and reasonable manner, in particular, rather than
terminate his employment in January 2013 with 4 weeks notice, he was given up to
three (3) additional months to seek alternative employment;
Mr Tuffin was given and took time off work to seek alternative employment;
nearly four (4) months after agreeing to end the employment relationship by mutual
agreement, Mr Tuffin was given formal notice ending the employment relationship;
the Applicant did not receive a redundancy payment because he was not made
redundant; and
[2013] FWC 7218
the reason why the Applicant is contesting his dismissal of employment is that he
had not found alternative employment prior to the cessation of his employment.
CONSIDERATION
[23] It is essential in Mr Tuffin’s application alleging unfair dismissal to determine whether the employment relationship came to an end by mutual agreement.
[24] Two key discussions between the Applicant and the Employer took place on 16 and
17 January 2013.
[25] The first discussion was with Mr Sharpe but was preceded by a meeting between Mr Brickhill and Mr Tuffin regarding the stocktake reports.
[26] Mr Tuffin was approached by Mr Brickhill, the then CEO, to provide a stocktake report. Mr Tuffin provided six or seven reports which did not meet Mr Brickhill’s requirements[4]. Mr Tuffin gave evidence that he was told by Mr Brickhill exactly what he wanted in the stocktake report but the Applicant’s reports, according to Mr Brickhill, did not make mathematical sense.
[27] Mr Brickhill’s request for the stocktake reports and his discussions with Mr Tuffin on the various reports took place over approximately one week[5].
[5]Transcript PN324
[28] On 16 January 2013, Mr Tuffin left Mr Brickhill’s office “very upset”[6]. Mr Sharpe invited Mr Tuffin into his office.
[6]Transcript PN334
[29] Mr Sharpe was Mr Tuffin’s immediate supervisor as General Manager Sales and Distribution Channels. Mr Sharpe was the designated Employer representative who employed the Applicant on 16 May 2011.
[30] Mr Sharpe commenced with the Employer in April 2011.
[31] Mr Tuffin is Mr Sharpe’s nephew-in-law[7].
[7]Transcript PN628
[32] In August 2011, Mr Sharpe engaged an external consultant to assist Mr Tuffin in
developing his analytical skills. The external consultant was Ms Stafford. Ms Stafford’s
witness statement was admitted into proceedings without cross examination.[8]
[33] Ms Stafford’s written evidence is as follows.
“During the time I spent with Rick [Mr Tuffin], he preoccupied himself with different tasks unrelated to the analytical role I was there to assist, and if he had made himself more available, we would have had more time for mentoring and coaching. I indicated to him that he would need to really spend some time to develop his analytical skills -
[2013] FWC 7218
both technical Excel and an analytical mindset, and perhaps set aside some time to concentrate on this and learn every week. However, I felt he was easily distracted and that with too many distractions this wouldn’t get done...
I offered for Rick to follow up and contact me for future assistance/guidance. He did contact me on one occasion, and I replied to his email with a solution/amended the spreadsheet for him and sent it to him saying to get back in touch if needed, but didn’t hear anything further so had assumed there was no further issues.
I spoke to Gavin Sharpe at the end of my time at McArthur’s Natural Products and indicate concern with Rick’s current abilities. I indicated to Gavin that he would have to work hard to develop his technical and analytical skills in order to learn and produce the level of information that is required. In my opinion, I didn’t know how long this would take given the issues above, or if it was achievable.”[9]
[9]Exhibit R8[34] Mr Sharpe gave detailed written evidence regarding Mr Tuffin’s performance[10].
[10]Exhibit R5
[35] Mr Sharpe gave oral evidence that he was concerned with Mr Tuffin’s
underperformance from the commencement of his employment.[11]
[11]Transcript PN664
[36] Further, in relation to his performance, Mr Tuffin received an email on 9 November 2012 from Mr Sharpe attaching a Performance Management Plan (PMP)[12]for bonuses (if any) due in March 2013. Mr Tuffin agrees that, in the first instance, he undertook a self assessment, as part of the PMP, which he sent back to Mr Sharpe. Mr Sharpe completed various ratings of Mr Tuffin and also made comments on the PMP and forwarded it back to Mr Tuffin.
[12]Exhibit R4
[37] In terms of Mr Tuffin’s objectives, he is “on watch” on four objectives and “on track”
with one other.
[38] In the comments section, it is not necessary to set out Mr Sharpe’s entire narrative, however, it is safe to say that he considered Mr Tuffin failed to understand the difference between work activity and achievement. Further, the necessity of Mr Tuffin to avoid distractions and to avoid distracting others.
[39] When asked in cross examination, Mr Tuffin agreed that Mr Sharpe had sent the PMP back to him with his comments. However, he gave evidence “I knew that we were going to
talk about it on his return so at that stage I had not opened it”.[13] While not beyond the realm
[13]Transcript PN303
of possibility, Mr Tuffin’s evidence was that his immediate supervisor had sent him an email
which was to do with his performance, and related to a bonus, he decided not to open it.
[40] Mr Tuffin, in his evidence, does not recall any discussions about his performance in 2011 and 2012[14]or specifically about the PMP.
[2013] FWC 7218
[41] Further, Mr Tuffin attacks the credibility of the PMP as an “incomplete document”[15],
[15]Transcritp PN279
it “was not a finalised document”[16]and “it has not been signed”[17].
[16]Transcript PN248
[17]Transcript PN219
[42] Mr Sharpe gave evidence of his standing three weekly meetings (which on occasions did not go ahead) with the Applicant. Mr Sharpe gave evidence that he repeatedly discussed the gap between Mr Tuffin’s performance and the level expected by the Employer in the position.[18]Mr Tuffin’s written statement of facts asserts that up to 21 December 2012, “he
[18]Exhibit R5
was never formally spoken to in regards to the quality of his work” (my emphasis) or “he was
never advised he was not performing up to standard”[19]. In cross examination, he could not
[19]Exhibit A1
recall being questioned about his performance.[20]
[43] Notwithstanding Mr Sharpe’s oral evidence regarding Mr Tuffin’s performance, what
is important for the purposes of this application, is Mr Sharpe’s written witness statement that
was not challenged in cross examination. Relevantly, the written evidence is as follows:
“...upon returning from annual leave I noticed that RT [Mr Tuffin] was visibly upset after a discussion with TB [Mr Brickhill] and I called him into his (sic) office. He was on the verge of tears when he said to that he ‘was on the verge of quitting’. He was very emotional and cried when he told me how closely TB had scrutinised his performance whilst I was away. I provided RT with career counselling saying that maybe the path that RT was on wasn’t the right path for him at the moment, maybe he needed to look at a different role outside the company that would give him a better work-life balance and better suit his skills set. RT agreed that he would resign and seemed relieved. I said to RT that I would notify TB about his decision the following morning...TB approached me and asked what was going on so explained RT’s decision to TB that it was agreed that rather than stick to the four weeks notice period under the contract, the company would support RT while he looked for work for a period of up to three months.
After RT and I mutually agreed that RT would look for a role outside of the company I received a confusing text message from RT. It should be noted that the tone of our conversation earlier in the day was not at all supportive of RT having a long career at the company and that I had already spoken with RT and TB about RT moving on.
On or about 18-Jan-13-I said to RT that could use me as a reference and that I would be honest in his discussion with any potential employers. I said that if RT were to go for a purely business analyst role I would need to tell a prospective employer that his analyst skills needed development...
Jan-Feb 2013: RT sent multiple messages to me about external meetings he was attending to find work and about not being able to come into the office.
[2013] FWC 7218
6-Feb-13 RT started to hand-over tasks to other staff members.
Feb-13: I discussed with RT his timeframe for moving on to another position and how his job search was going. I also suggested that when he does declare his last day that I would like to take him out --- RT said he appreciated the thought but may decline if he hadn’t found another job.
Mar-13: I asked RT how his job search was going on a regular basis. At one point RT said that things were looking promising as he had been asked to attend a 4th interview for a Team Leader position.
5-Apr-13: Board meeting teleconference...Board members agreed that I should
terminate RT’s position asap.8-Apr-13: I spoke with RT and asked how his job hunting was going. I subsequently informed him that he would be provided with an additional four weeks notice period upon which his employment with McArthur Natural Products would be concluded. RT said he was sad about moving on but understood and thanked me for my ongoing assistance.
15-Apr-13: I gave RT written notice of termination based on previous discussions and
understandings.Mid-Apr-13: I reiterated...to take RT out to lunch with team...he once again indicated that he may decline if he didn’t have another job to go to.
30-Apr-13: I sat with RT at the end of the day to see where he was at with his hand- over and he mentioned that he had handed-over as much information as he could and
there wasn’t much else for him to transfer. As he didn’t have much left to do I gave
him the rest of the week off to pursue other employment opportunities.”[21]
[21]Exhibit R5
[44] Despite Mr Tuffin’s evidence that he could not recall discussions with his immediate supervisor, Mr Sharpe, in 2011 and 2012, I am satisfied that the unexecuted PMP is supportive of Mr Sharpe’s evidence of the Applicant’s performance. I am also satisfied, contrary to Mr Tuffin’s assertion, that his performance was the subject of discussions with Mr Sharpe during his employment. While Mr Tuffin may not consider these discussions “formal”, I am satisfied that discussions on his performance occurred.
[45] Mr Sharpe’s evidence is that Mr Tuffin was nearly in tears when he said that he “was on the verge of quitting”.[22] Mr Tuffin’s evidence is that he muttered under his breath “this is making me feel like I want to quit. This is what I said and that’s why Gavin [Mr Sharpe] pulled me in the room.”[23] Mr Tuffin concedes that Mr Sharpe discussed with him pursuing
[22]Exhibit R5
[23]Transcript PN343
employment outside the Employer.[24] Mr Sharpe’s evidence is that Mr Tuffin “agreed that he
[24]Transcript PN347
would resign”[25]and that Mr Sharpe would notify Mr Brickhill the following day.
[2013] FWC 7218
[25]Exhibit R6 26 Exhibit A1
[46] The second discussion was between Mr Tuffin and Mr Brickhill. Mr Brickhill is Mr Tuffin’s uncle by marriage. Both Mr Brickhill and Mr Sharpe are first cousins.
[47] Mr Tuffin in his written evidence states that Mr Brickhill stated “it had become apparent that there was a need to hire a specific Business annalist (sic) & hence would need to shift RT [Mr Tuffin] sideways or downward and therefore would understand if RT was to seek a new career.”26 In cross examination, Mr Tuffin went further and agreed that
Mr Brickhill explored with him the possibility of looking for alternative work outside of the
Employer.[27]
[27]Transcript PN349
[48] Mr Tuffin agreed that his conversation with Mr Brickhill was cordial and reassuring[28]
[28]Transcript PN355
and that Mr Brickhill advised him to focus upon his strengths in looking for work elsewhere.
[49] The point of difference between the evidence of Mr Tuffin and Mr Brickhill is that
Mr Tuffin agrees that Mr Brickhill indicated that he should look for work beyond the
Employer in his areas of strengths, “but it was never agreed to”[29].
[29]Transcript PN362
[50] When questioned in cross examination, Mr Brickhill gave the following evidence:
“Did Richard Tuffin ever offer his resignation to you?---When we had the meeting on
the 17th - - -
A simple yes or no would do. Did he offer his resignation?---He agreed that he would leave the employ of Tom McArthur.
How did he agree, by offering his resignation?---I said I think it's that you move on, and if you've had time to find work, and he agreed yes look I will move on but give me time to find work. That was effectively – if you call that offering a resignation.”[30]
[30]Transcript PN827 to PN829
“So he came to you and said I'm happy to leave as long as I've got a job first?---It wasn't – I met him in the morning, I discussed what Gavin had said to me, he said he couldn't do the business at work, he said he was finding stocktake difficult – stocktake being one aspect of being a business analyst, I'd say – and it was agreed, and Rick agreed, that if he had reasonable time to find work that he would part the employ of Tom McArthur Pty Ltd. He agreed to that. To me it seemed as though Rick was sort of relieved by that because, you know, the aspects of his work, he was finding it difficult. Now, I'm not here to have a crack at Rick. This whole things cuts to me because it's family, but that's what happened.”[31]
[31]Transcript PN831 32 Transcript PN833 33 Exhibit R7
“While he didn't give his resignation, I think we can take it from that. Did you
categorically state to Richard Tuffin that you would never sack him because he was
family?---No, I didn't use those words. I said to Rick that we would give him
[2013] FWC 7218reasonable time to find work, not that I would never sack him because it was agreed
that he was going to part ways.”32
[51] Ms Visscher’s witness statement was also admitted unchallenged into proceedings.
[52] Relevantly, Ms Visscher gave evidence as follows:
“During that meeting [on or about 28 March] Gavin Sharpe said to Jeannette McArthur
[other director] and me words to the effect that:
He was reluctant to take the position of interim CEO as he was currently extremely busy.
He was not only undertaking his duties as General Manager of Sales and
Distribution but he was also carrying out the job of Business Analyst.
He wanted to discuss with us asking Mr Ric Tuffin to leave the company.
Ric Tuffin had underperformed as a business analyst for an extended period of time.
Ric Tuffin had been assisted by the company to improve his performance so that he might undertake his duties but Ric Tuffin had been unable to carry out the work properly.
There had already been a determination that Ric Tuffin was to leave the
Company some months prior.It had been determined that Ric Tuffin was allowed sufficient time to find a new position.
Gavin Sharpe was of the view that Ric Tuffin had been given more than sufficient time to find a new position but had not found a new position.
Ric Tuffin was now doing very little at the company.
On 5 April 2013 I attended a director’s meeting by telephone...Gavin
Sharpe...accepted the position of interim Chief Executive Officer.
During that meeting Gavin Sharpe said to Jeannette McArthur and me that:
He wanted to ask Ric Tuffin to leave the company.
Jeanette McArthur said to Gavin Sharpe and me words to the effect that Gavin should try to ensure that Ric Tuffin was not upset with the company when he left.
[2013] FWC 7218
In response Gavin Sharpe said words to the effect that when Gavin had had to have a difficult conversation with Ric Tuffin regarding Ric’s
underperformance, Ric had not been upset and instead had seemed grateful for
Gavin’s assistance.”33
[53] It is not unusual for witnesses to have differing accounts of discussions. In the discussion on 16 and 17 January 2013, Mr Tuffin asserts that he did not resign or agree to find alternative employment. The Employer asserts that Mr Tuffin did not resign nor was he dismissed. The Employer contends that the parties agreed that the employment relationship would end at some point in the future up to three (3) months, by mutual agreement.
[54] In view of this differing evidence, it is, in my view, necessary to consider objectively the conduct of the parties towards the employment relationship immediately after the discussions between Mr Tuffin, Mr Brickhill and Mr Sharpe took place. To put it in colloquial terms, “actions speak louder than words”.
[55] Mr Tuffin gave evidence that he commenced taking time off work to look for alternative employment.[34]Mr Tuffin was actively looking for work.[35]Mr Tuffin indicated in evidence that he had more than one interview with Macquarie Bank[36]. Mr Tuffin sent text messages in January and February 2013 to Mr Brickhill and Mr Sharpe that he was attending other workplaces for interviews for employment.
[34]PN 369
[35]PN 373
[56] In my view, an ordinary interpretation of what happened is that Mr Tuffin was on the “verge of quitting” but because of family relationships, the Employer preferred not to see the Applicant give four weeks notice and leave his employment without a job to go to. Instead the Employer and the Applicant entered into an arrangement in which the actual date of cessation of employment would be up to three months to enable Mr Tuffin to find alternative employment.
[57] From the evidence, it can be fairly concluded that Mr Tuffin did not say “I resign” or “I am going to resign at a specific date in the future”. What happened, in my view, is that, influenced by family relationships, both parties did not wish to precipitate the notice provisions in the contract of employment by Mr Tuffin either resigning or being dismissed. Consequently, both parties entered into a variation of the contract of employment, whereby it would come to an end at some time up to three months in advance. In such circumstances, the Employer did not have to accept or refuse Mr Tuffin’s resignation. Likewise, the Employer was not placed in the position of having to dismiss a family member without a job to go to with four weeks notice.
[58] Mr Tuffin in his evidence resists the proposition that the employment relationship ceased by mutual agreement by simply stating that he did not agree. Illustrative of Mr Tuffin rejecting termination by mutual agreement is contained in a question to Mr Sharpe in cross examination. The question was as follows.
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“A mutual parting of ways. I would've thought that a mutual parting of ways would have two signatures on it, would it not, yours and Mr Tuffin's, as would a performance review?---I don't know that there's such a document of a mutual parting of ways.”[37]
[37]Transcript PN619
[59] The question or concept of a written agreement and signatures is an easy one to put
forward by the Applicant as Mr Tuffin knows that the arrangement was entered into following
discussions between himself and Mr Sharpe, and subsequently, Mr Brickhill.
[60] In my view, the Commission should approach Mr Tuffin’s termination of employment not by whether it was reduced to writing but by examining the evidence and the objective conduct of the parties after the discussions involving the Applicant, Mr Brickhill and Mr Sharpe.
[61] I found no reason to be dissatisfied with the evidence of Mr Brickhill and Mr Sharpe. Each was challenged vigorously by Mr Van der Wielen. Having the opportunity to observe both witnesses, I would say that they preferred not to be giving evidence because as Mr Brickhill put it, “it’s family”.[38]
[38]Transcript PN831
[62] Evidence was given regarding the change in nature of Mr Tuffin’s duties. However, that is not unusual in a company in the infancy of its operation.
[63] Evidence was given by Mr Tuffin of “warring”[39]between directors with the inference that he was collateral damage. Finally, it was asserted by Mr Tuffin that Mr Sharpe made dismissing the Applicant a prerequisite to becoming acting CEO. There are no evidential reasons for me to conclude that both of these propositions are correct.
[39]Transcript PN77
[64] Having considered the evidence of Mr Tuffin, Mr Brickhill and Mr Sharpe as to the content of their meetings on 16 and 17 January 2013, and objectively the actions of the Applicant immediately after these discussions, I am satisfied that they entered into an arrangement whereby the employment relationship would end by mutual agreement at some time in the future. The objective actions of the parties give logic only to a conclusion that the employment relationship ceased by mutual agreement.
[65] Having reached the conclusion that the employment relationship ended by mutual agreement, Mr Tuffin was not dismissed in accordance with s.386 of the FW Act and accordingly he is not protected from unfair dismissal and his application must be dismissed for want of jurisdiction. An order to this effect will be issued conjointly with this Decision and Reasons for Decision.
COMMISSIONER
[2013] FWC 7218
Appearances:
R Tuffin, the Applicant with M Van der Wielen.
M Saraceni of Counsel with G Sharpe for the Respondent.
Hearing details:
2013: Perth, 16 September.
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