Venn v Wesfarmers Limited
[1997] IRCA 128
•16 April 1997
DECISION NO:128/97
C A T C H W O R D S
INDUSTRIAL LAW - ALLEGED UNLAWFUL TERMINATION - TERMINATION OF EMPLOYMENT - whether employee given an opportunity to defend himself - whether VALID REASON for termination.
Workplace Relations Act 1996 (formerly Industrial Relations Act 1988) Ss 170DC, 170DE, 170EA, 170EDA.
Victoria v The Commonwealth (1996) 138 ALR 129
Neil Robert VENN -v- WESFARMERS LIMITED
WI 1130 of 1996BEFORE: R. D. FARRELL JR
PLACE: PERTH
DATE: 16 April 1997IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY )No. WI 1130 of 1996
BETWEEN:
Neil Robert VENN
ApplicantAND:
WESFARMERS LIMITED
RespondentMINUTE OF ORDERS
BEFORE: R. D. FARRELL JR
PLACE: PERTH
DATE: 16 April 1997
THE COURT ORDERS THAT:
1. The application is dismissed.
Note: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRYWI 1130 of 1996
BETWEEN:
Neil Robert VENN
ApplicantAND:
WESFARMERS LIMITED
RespondentREASONS FOR DECISION
16 April 1997 R. D. FARRELL JR
This is an application under Section 170EA of the then Industrial Relations Act 1988 (now the Workplace Relations Act 1996) (“the Act”) for reinstatement or, in the alternative, compensation arising from the alleged unlawful termination of the employment of the applicant, Mr Neil Venn (“Mr Venn”), by the respondent, Wesfarmers Limited (“Wesfarmers”).
Wesfarmers is a diversified Western Australian-based company which includes a Rural Division. Wesfarmers’ Rural Division markets agricultural goods and services to customers - principally farmers - through a national network of branches, agents and partnerships. Its Geraldton Branch services the mid-north of Western Australia.
Mr Venn was employed by Wesfarmers to work as an agronomist in the merchandise section at its Geraldton Branch. An agronomist is a specialist in land and crop management. According to the Position Description document tendered by Wesfarmers, the agronomist’s role at Wesfarmers’ Geraldton Branch was to “provide agronomy support to the Branch and Agent network for broad-acre and horticultural chemicals, to coordinate regional based and contractual agronomists and to develop training strategies for colleagues to maximise product knowledge and sale opportunities.” The Branch had not previously employed a qualified agronomist. The Branch’s new capacity to offer the support and advice of an agronomist to farmers was expected to provide a marketing advantage.
Mr Venn’s Curriculum Vitae shows that he has almost thirty years experience in crop management, agricultural chemicals and fertilisers since obtaining a Diploma of Agriculture in 1967.
However, after eighteen months’ employment during which Wesfarmers conducted a series of reviews of Mr Venn’s performance, Wesfarmers terminated Mr Venn’s employment. While the termination took the form of a resignation, Wesfarmers concede that, in all the circumstances, it was a “termination at the initiative of the employer” for the purposes of the Act.
Section 170DE(1) of the Act provides that:
“An employer must not terminate an employee’s employment unless there is a valid reason, or valid reasons, connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.”
Wesfarmers says the termination of Mr Venn’s employment was due to shortcomings in his performance, which is a valid reason connected with his capacity and conduct. They contend, therefore, that the termination was not in breach of Section 170DE(1).
Mr Venn contends that his performance was satisfactory, and that there was therefore no valid reason for the termination of his employment. He also contends that the respondents were in breach of Section 170DC of the Act. That section requires that an employer must not terminate an employee’s employment for reasons related to the employee’s conduct or performance unless the employee has been given the opportunity to defend himself or herself against the allegations made (where the employer could reasonably be expected to give the employee that opportunity). Wesfarmers say they gave Mr Venn the opportunity to so defend himself.
Because this matter was heard before the High Court’s decision in Victoria v The Commonwealth (1996) 138 ALR 129, the Court also heard submissions as to whether the termination was harsh, unjust or unreasonable for the purposes of subsection 170DE(2). Now that the High Court has held that subsection to be invalid, the Court has had no regard to those submissions for that purpose.
The Court heard the evidence of three witnesses. They were:
·Mr Venn;
·Ms Susan Obst (“Ms Obst”), the then-merchandising manager at Wesfarmers’ Geraldton store to whom Mr Venn reported; and
·Mr Daniel Williamson (“Mr Daniel Williamson”), a farmer and Wesfarmers client who had dealings with Mr Venn.
I was satisfied that each of the witnesses was doing their best to give accurate evidence. Having said that, I noted that Mr Venn did not make concessions readily. He demonstrated a tendency to initially deny propositions, only to reveal on further questioning that his denial rested upon pedantic and sometimes idiosyncratic definitions of terms used within those propositions.
Ms Obst for her part seemed concerned to justify her actions in terminating Mr Venn’s employment. I note that she no longer works for Wesfarmers. She is now an agent for the Central W.A. wheatbelt regions of Pithara, Dalwallinu and Kalannie, but presumably retains important links with Wesfarmers in that capacity. Her evidence lacked detail on occasions, reflecting an understandable deterioration in her memory since the events in question. It was sometimes left unclear whether she was speaking of matters within her direct knowledge or things she had been told. It also seemed at times that she was reconstructing events rather than relying upon actual recollection.
Mr Williamson’s evidence was brief and I accept it without qualification. Where there are inconsistencies between the evidence of Ms Obst and Mr Venn, I have reconciled those inconsistencies on a case by case basis, in the absence of any general reason to prefer the evidence of one of them over that of the other.
History of Employment
Mr Venn began his employment with Wesfarmers on 1 September 1994; he had previously been employed by the CSIRO in Perth as an agronomist and Field Trial Manager with the Dry Land Crops and Soils Unit of its W.A. Plant Industry Division. His starting salary with Wesfarmers was $42,500 per annum. He was provided with a company car and received a rent subsidy. He was given a mobile telephone and reimbursed his home telephone expenses. There was a probation period of 3 months in his new job. Mr Venn’s family relocated from Perth to join him in Geraldton after his probation period expired on 1 December 1994.
Mr Venn says the job required him to visit farms within a 160 kilometre radius of the Branch to inspect paddocks, and to give advice in the field or by telephone to farmers about crop management matters - chiefly concerning use of agricultural chemicals, but also concerning other matters such as tillage practices, pastures and stock. Mr Venn saw himself as a link between agricultural scientists and the farmer.
Mr Venn says that when he first started, he asked the then Regional Manager, Mr Hugh Harding (“Mr Harding”), for a list of Wesfarmers’ clients, but the list was never provided. He says he gradually pieced together information about Wesfarmers’ client base from other members of the merchandising department and began visiting farms. He did not prepare rosters or schedules of farms to visit.
Many of the farmers he visited were existing Wesfarmers customers; Mr Venn says they liked to see their purchases repaid with interest in their farm. He would also call on other farmers and attempt to establish a rapport which might result in new business. As part of the merchandising team he was also expected, when he was in the office, to serve at the counter on a “last call basis”, ie if the other merchandising staff were already busy serving.
December 1994: Probation Review
In September 1994, soon after beginning his employment, Mr Venn was absent on sick leave for seventeen days due to a life-threatening haemorrhage of his liver, resulting from complications in an earlier liver biopsy. After his return, he remained unwell and required ongoing treatment for six months involving a course of three injections per week. Mr Venn says that each injection was like having a dose of influenza.
After his probation period expired, a review of his performance was completed by Ms Obst on 16 December 1994 in accordance with the normal Wesfarmers procedure, though a little later than usual because of his illness.
I accept Ms Obst’s evidence that the review document was completed in “a sympathetic manner”. Mr Venn’s “Quantity of Work” was graded as “competent”, while his “Quality of Work”, “Dependability” and “Compatibility to Job” were graded as “Commendable”. Ms Obst says she took the view that, while Mr Venn hadn’t reached expected standards of performance, his sickness had been an important factor in that outcome. She says she still believed she had been correct to employ him and she wanted to rebuild his confidence. Mr Venn agrees that it wasn’t a typical six months.
Mr Venn does not recall being shown the assessments made by Ms Obst when he completed his probation. Ms Obst believes he was. Nothing turns on it, but I accept that, if the assessment was shown to Mr Venn, then he does not recall it, perhaps because it was not treated as significant at the time.
December 1994 to June 1995
As part of Wesfarmers’ usual management procedures, Mr Venn was asked after he finished his probation to write up goals and objectives for the period ending 30 June 1995, on the understanding that he would be measured against those goals. These goals were usually drawn up annually. Mr Venn wrote up his goals accordingly. Ms Obst says they were “soft” and easy to attain, but considered that this was not inappropriate for the first set of such goals.
Mr Venn’s first crop season began in about April of 1995. He explained that his role was most important at the break of the season when it began raining and the crops germinated. He says he was greatly in demand from that time for hands-on advice in the areas of seed sowing, herbicides, insecticides and crop variation.
Performance Review: 8 June 1995
Ms Obst conducted a routine review of Mr Venn’s performance on 8 June 1995. In the course of such reviews, ratings from “1” to “7” were given on the employee’s performance by reference to a number of criteria both by the employee themself and by the person to whom they reported.
A rating of “3” was defined to mean “Met most important requirements most of the time”. A rating of “4” meant “Met all important requirements most of the time” and a rating of “5” meant “Exceeded all important requirements most of the time”.
Ms Obst gave Mr Venn an overall performance rating of “3+”. This was based upon overall ratings of “3 1/2” for “Success in achieving principal job goals” and for “Business Skills” along with overall ratings of “4” for success in achieving “Personal Development goals” and for “Personal Skills”.
Mr Venn’s “strong technical knowledge - depth. Skills in research” were nominated by Ms Obst as his strengths, while his “time management, selling skills and local knowledge” were nominated as areas for improvement.
Mr Venn’s Agreed Goals and Objectives to 30 June 1995 had specified a goal of providing “accurate, soundly based agronomic advice to clients and agents”. The document provided for twice yearly measurement of Mr Venn’s success at meeting this goal through a “Questionnaire to 6 customers at random, two agents and merchandise staff”.
In the review Ms Obst gave Mr Venn a rating of “3” in relation to the goal of providing “accurate, soundly based agronomic advice to clients and agents”, noting on the review form that “Local knowledge still limited”.
It was not clear from Ms Obst’s evidence what she relied upon to make this assessment. I infer from general statements in her evidence that she based the assessment on informal feedback she received from customers and agents, some of it probably second hand. As far as I can tell, none of the specific complaints referred to in Ms Obst’s evidence relate to the period before this review.
There was no evidence that Ms Obst sent questionnaires to or even questioned random customers at any stage in Mr Venn’s employment. Rather she seems to have relied on an assessment of those complaints that came to her attention, whether directly or indirectly. Ms Obst observes that it is relatively unusual for farmers to come forward and complain. More usually they say nothing and simply don’t come back. I accept that this has been Ms Obst’s experience in her industry and that this led her to regard the complaints seriously. However, if there were legions of customers impressed with Mr Venn’s services, they did not come forward. I cannot therefore assume they didn’t exist. Ms Obst’s original proposal for measuring Mr Venn’s effectiveness would have provided a more reliable and persuasive basis for assessing his performance. It is a pity she did not use it.
By the time of this review, Ms Obst says she was concerned that Mr Venn seemed to be in the office a great deal, and that he was not making enough farm visits. She says that during the busy period in the office in February and March she might expect him there for about two days a week, but from April to July she believed he should only be in the office half a day a week. She says that Mr Venn was in fact only getting out of the office for two to three days a week, and then only for part of the day.
Mr Venn’s Agreed Goals and Objectives to 30 June 1995 had specified a target of visiting four customers a day, three days a week as a means of meeting the goal of assisting Ms Obst in sales and promotions to achieve budgeted sales targets. At the review, Ms Obst assessed this area of performace at level “4” - a satisfactory rating. Ms Obst explains that she was conscious that he had been unwell, and was concerned not to push him too hard. She says she had left him to set his own schedule, as he would best know what his health could cope with. I note also that the sales and profit targets for Ms Obst’s department for the period were exceeded.
It should be noted that Ms Obst graded Mr Venn’s “abilities in establishing and maintaining sensitive communications with others” at level “4” in this review.
Ms Obst resolved that Mr Venn should obtain authorisation and have arrangements made to attend Time Management and Selling courses by the end of September 1995. The courses were never organised. Mr Venn says he understood it to be Ms Obst’s role to organise the courses. She did not dispute this in her evidence, saying only that there was a lack of time to attend the courses in 1995 and they would have been arranged before 30 June 1996 if Mr Venn’s employment had continued.
The formulation of a second set of goals and objectives was addressed in the June review. Ms Obst and Mr Venn discussed possible areas which might be covered, and discussed the concept of goal-setting at length. Accordingly, Mr Venn drew up a new set of goals for the period ending June 1996.
Mr Venn was notified on 7 July 1995 that he had received a salary increase, and would receive a further increase in October 1995. By the time his employment ended, his salary had risen $2,600 to $45,100 per annum.
Counselling Session: 14 July 1995
There was a counselling session on 14 July 1995, involving Mr Venn, Ms Obst and Mr Hugh Harding, the then Geraldton Regional Manager. Ms Obst says the session was called to discuss complaints from clients. It seems three issues were raised. They were:
· the clarity and accuracy of Mr Venn’s advice to farmers;
· Mr Venn’s interaction with his fellow employees; and
· Mr Venn’s timekeeping.
Mr Venn recalls being told by Mr Harding that they were pleased with his performance up to that time but that they wanted to raise a few points. Mr Venn was told that, when discussing things with farmers, he needed to focus and concentrate on the main issue, limiting himself to the specific information required. He should not try to demonstrate all his knowledge every time he visits.
Ms Obst says that Evan Hammersly, a sizeable and loyal client of Wesfarmers, had told Mr Harding that he would take his business away unless Wesfarmers did something about Mr Venn.
Ms Obst explained to the Court that Mr Hamersley was predominantly a stockman, and needed someone who could tell him very simply what he needed to do in relation to agricultural chemical use. Ms Obst says he told Mr Harding that he was uncomfortable with Mr Venn’s recommendations; they were very longwinded and Mr Hamersley often couldn’t understand what Mr Venn was talking about. Because of his lack of personal knowledge, he relied upon Wesfarmers for that sort of information. Ms Obst says that he ultimately went to their competitor, Elders, for that reason.
Mr Venn took this advice as constructive criticism and agreed to be conscious of those issues and to work on them. He explained to the Court that he believed he had been trying too hard to prove himself in the community by demonstrating the extent of his knowledge.
Mr Harding also asked Mr Venn, apparently without warning, when was the correct time to apply Diuron, which is a weedkiller for wheat crops. Ms Obst says she would have expected that information on that chemical would be second nature to anyone in the chemical industry. Mr Venn demonstrated that he knew the correct time and was aware of the dangers of late application. He was told that a client had called into the office who had been left with the misunderstanding that he could use Diuron much later than the “5 leaf” stage of the crop’s development, which was incorrect. Mr Venn was not told the identity of the client.
It was clear from Ms Obst’s evidence that Ms Obst held Mr Venn responsible for the misunderstanding, even if he gave the correct advice, because the fact that the client misunderstood the advice indicated that the advice had not been given sufficiently clearly.
Ms Obst says that at that stage their approach to any client who complained about Mr Venn was to reinforce that Mr Venn was new to the area, had a background in research and that it would take time to acquire local knowledge. She also on occasion made them aware that he had been very ill.
Ms Obst says they also addressed more general customer comments. She says there was:
“a lot of just general chat that was coming from clients. Very few of them like to complain formally, usually they just take their business away from you, but I was starting to just get comments when I called on farm or when I saw a client about concern about Neil’s knowledge...”
Ms Obst spoke of complaints from customers that they didn’t understand Mr Venn, that he was too technical, that he gave long-winded and indirect answers to simple usage queries.
Ms Obst says Mr Venn was in conflict with his fellow employees, and that this was raised with him at the meeting.
Mr Venn says he felt he had good working relationships with all the people in the office.
Mr Venn recalls Mr Harding or Ms Obst also raising the proposition that he was cutting across other staff in the performance of their roles. They raised an incident where a farmer, Mr Pawelski, changed his order after speaking to Mr Venn. Mr Venn gave his account of the advice he gave Mr Pawelski. The discussion moved on to other matters.
Mr Pawelski, a local farmer, had purchased some agricultural chemicals from Wesfarmers, on the recommendation of the person serving at the counter. The chemicals were loaded into Mr Pawelski’s utility. Mr Venn met Mr Pawelski in the car park. In the course of conversation, Mr Venn gave some advice to Mr Pawelski which led him to change his order. Ms Obst saw this as Mr Venn undermining a colleague. In her view, if it continued it would mean that nobody could sell chemicals but Mr Venn, because nobody would trust the advice of the counter staff. In Ms Obst’s view there was no reason why the original recommendation should have been changed. Mr Venn recalls Ms Obst or Mr Harding telling him that if the customer has been served and the advice they were given was just slightly incorrect, then he should let it be because it will perhaps do the job. Mr Venn says he did not believe that was right. He does not accept that he had done the wrong thing in his dealings with Mr Pawelski. Ms Obst contends that the original recommendation was not incorrect.
Mr Venn was ten to fifteen minutes late for the counselling session with Mr Harding, which had been scheduled for 8:00 am on 14 July 1996. This was raised with him immediately, and he told Ms Obst and Mr Harding that he had stopped to fuel the car up.
They raised a complaint from a particular farmer who rang mid-afternoon to say that Mr Venn had not arrived. Mr Venn explained he had rung the farmer and told him he would be there that afternoon, and that he in fact arrived there at 4:30 pm, before the afternoon was over.
July 1995 to January 1996
On 11 August 1995, there was a presentation in Mullewa on pasture topping organised by Mr Johnson, Wesfarmers’ agent for the region. Relevant Wesfarmers staff attended to support Mr Johnson. The presentation began at 9:00 am, which required Ms Obst to leave the Geraldton office by about 8:00 am. Ms Obst says Mr Venn arrived at about 10:30 am, when the presentation was almost complete. He explained that he got really busy at the office and that he couldn’t get away. Ms Obst says she checked when they returned to the Branch and was told they weren’t that busy. Ms Obst says she was embarrassed to have the Wesfarmers agronomist walk in at the end of the meeting because she believed it gave the clients the impression they weren’t very important. Mr Venn does not recall this incident. I accept that the incident happened.
Within the merchandising section, there was a problem between Mr Venn and Mr Doug Patton, who was second in charge of the section. In August 1995, there was a verbal altercation between them when Mr Venn interrupted Mr Patton, who it seems was occupied either serving a customer or working on the computer, to ask for some information. The Court only heard Mr Venn’s account of the incident. On his account, Mr Patton’s outburst would appear to have been unjustified, and Mr Venn was not to blame for the incident.
Mr Venn left a note that day saying he would not travel with Mr Patton to the Dowerin Field Day, as had been planned. The next morning, they were counselled by Mr Harding, shook hands and got on with things. They travelled together to the Field Day as originally planned.
Ms Obst spoke to Mr Patton about the incident, but did not hear a full account of what had happened.
Agents of Wesfarmers also complained about Mr Venn’s performance. There were three commission agents for the Geraldton Branch, based in Northampton, Mullewa and Morawa.
Mr Neil Johnson, the Mullewa agent, complained that he had lost confidence in Mr Venn’s advice about agricultural chemical usage and felt he had to check its accuracy with the representatives of the chemical suppliers because he had sometimes found Mr Venn’s advice to be wrong. He had complained that Mr Venn had given him wrong recommendations on three occasions, on matters which Mr Johnson did not regard as complicated. Ms Obst says Mr Johnson pointed out that if he had to check, he may as well just ring the chemical representative directly. Mr Johnson had only recently taken over the position of agent. Mr Johnson’s background was as a stockman, so he had no knowledge of agricultural chemicals. Ms Obst had explained to Mr Venn that he had to support Mr Johnson because he was new.
Mr Johnson gave Ms Obst a specific example, where he had asked Mr Venn the percentage of “wetter” to use with a particular product and was told “2 per cent”. In fact, the correct percentage is “0.2 per cent”. If one were using oil rather than wetter, one would use 2 per cent. Ms Obst raised this incident with Mr Venn as soon as possible, certainly within a day. She says on such occasions he never acknowledged giving the wrong answer; in this case, she had no doubt Mr Venn knew the correct percentage. However, her view, which she conveyed to Mr Venn, was that the issue was that the client didn’t know what Mr Venn had recommended; whether Mr Venn had given the right or the wrong recommendation was academic. It was important that the client understand Mr Venn’s recommendation.
The need for clear recommendations had been discussed at the counselling session on 14 July 1994. Consideration was given to leaving recommendations in writing.
Mr Venn explained that generally recommendations had not been given in writing because the rates of application actually used by farmers were usually much lower than that prescribed on the label. If he wrote a recommendation lower than the label rate and there are harmful or ineffective results, then Wesfarmers would be liable. Recommendations were therefore usually given verbally. It was suggested at the meeting that Wesfarmers’ legal people draw up a recommendation pad, so that recommendations could be left in writing, while Wesfarmers could be protected from legal liability.
Mr Rolly Flavel, a loyal Wesfarmers client, had come to Ms Obst in November 1994 and complained about Mr Venn’s performance and local knowledge. Ms Obst defended him in the usual terms and said he would improve, given time. In due course, Mr Flavel shifted his agricultural chemical business, worth $100,000, to Elders because he used their agronomist, Mr Ralph Papalia. He gave Wesfarmers the rest of his business, where it was unrelated to agronomy.
Mr Flavel again spoke to Ms Obst in late November 1995 and asked her what she was going to do with Mr Venn. When she asked why, he pointed out that Wesfarmers’ business had been affected, and that unless Wesfarmers did something about Mr Venn, he was going to have to continue giving Elders his business, because he could not use Elders’ agronomist and not use them to purchase the product. Ms Obst said that the Flavels were very loyal to Wesfarmers, and that they were upset at having to take their business away. Ms Obst noted that there were few clients who would provide that sort of feedback; usually they would just say nothing and purchase elsewhere.
Mr Bruce Leishman, Wesfarmers’ largest individual merchandise client spoke to Ms Obst when she visited his property, expressing concern about the results of the recommendations Mr Venn had made during the season. He didn’t believe Mr Venn was meeting with his manager as often as he should have been and monitoring the crops.
In more general terms, Ms Obst was being told in conversation with Wesfarmers’ clients that Wesfarmers weren’t going to be able to compete in the agronomy stakes because Ralph Papalia from Elders was doing an excellent job. Special Buying Service (“SBS”), another competitor, also had two good agronomists. The inference in what she was told was that Wesfarmers couldn’t compete and was going to suffer accordingly.
By the end of November 1995, the Geraldton Branch’s three agents had each contacted Ms Obst and told her that they were not prepared to use Mr Venn in the next season in field days and in paddock inspections. The three agents generated about four million dollars in annual turnover in agricultural chemicals. The agents are not contractually tied to purchase their merchandise from Wesfarmers.
Ms Obst says that, because of the frequency of the complaints:
“it was becoming general conversation in the district so the pub talk was Wesfarmers’ agronomist and that’s not the way we want to be discussed, that’s for sure.”
Ms Obst said she would hear of this general conversation between farmers from people who were present, such as Wesfarmers livestock territory managers.
The Court heard evidence from Mr Daniel Williamson, a farmer and partner in G.J. Williamson and Sons, who have been and continue to be longstanding clients of Wesfarmers.
Mr Williamson says Mr Venn called at the main homestead on his farm about three or four times. He also saw Mr Venn a few times in the Branch at Geraldton and sometimes spoke to him on the phone.
Mr Williamson says the first couple of times Mr Venn called he was “feeling his way around the district, as you’d expect anybody that was new to a position to do.” The next visit he gave advise on what to do about weeds in their lupin crop. They had no problems with that advice.
Mr Williamson says Mr Venn sounded as if he had a fair amount of knowledge behind him. He told of how Mr Venn had pulled apart a double-gee seed on one occasion to explain a point in relation to herbicide use for double-gee control. Mr Williamson had never seen an agronomist go into that much detail before. Mr Williamson thought Mr Venn may have been able to put his knowledge across to people a bit better when they got to understand him and know him a bit better. Mr Williamson does not consider himself to have a detailed knowledge of agronomy and chemicals, and he did not have a problem understanding Mr Venn. Mr Williamson has never complained about Mr Venn and was not aware of any of his brothers in the partnership complaining either. He had never known anyone to say that they had a problem with Mr Venn.
In November 1995, due to staff taking leave and her involvement in an internal Wesfarmers Committee, Ms Obst asked Mr Venn to help out at the office when she was away in Perth for committee meetings. It was a less important time of the year to contact clients, who were preoccupied with harvesting their crops and therefore had little immediate need or time for agronomic advice. Mr Venn says he had to attend the counter during November 1996 virtually on a full time basis. Ms Obst describes this as an exaggeration.
Mr Venn also had a low level of contact with farmers in December 1995. Mr Venn says that in December, he was quite keen to go out to farmers and promote some campaigns from chemical companies but Ms Obst told him not to, because the farmers were still busy harvesting. There had been delays in the harvest due to rain and she said she was concerned they were getting a bit “cranky”.
Ms Obst says that Mr Aaron Gould, a trainee employee, complained to her at about this time that he felt he was being undermined at the counter by Mr Venn, because when he was serving Mr Venn would come to the counter and take over, making it look like he didn’t know what he was talking about. Mr Gould conceded that his knowledge was limited, but said he knew what he didn’t know, and said that if he needed help he would ask for it. Ms Obst believes she spoke to Mr Venn about it.
Mr Tom Wrightstone, a Wesfarmers employee responsible for maintaining the orders for product to be delivered to Wesfarmers complained to Ms Obst that Mr Venn would try and place orders, making it difficult for him to keep control of the ordering process. The normal structure of the Branch was that one person did the ordering.
By early December 1995, Ms Obst was beginning to receive complaints from all departments, including outside the merchandising team. There are twenty employees in all in the Geraldton office. Many of the complaints were over small matters of annoyance, which were not unusual in a big staff. Ms Obst considered them personality issues, which she found difficult to deal with; she did not talk to Mr Venn about them.
She was also told by the new Area Branch Manager, Mr Craig Williamson, that Mr Venn had interfered in social club issues, taking it on himself to tell the liquor store that he was taking over the buying of alcohol and either he would purchase it or an order number would be given by someone in the Branch. Mr Williamson, was the next person to go down to the liquor store for Wesfarmers, where he was told he couldn’t buy without an order number. Mr Williamson returned to the office and told Mr Venn he was to have nothing to do with the alcohol purchasing. Mr Venn denies that he gave the liquor store any instruction.
Ms Obst told Mr Venn at the 29 January meeting that people in the staff had been finding him difficult to work with.
Mr Venn took two weeks leave in January, 1996.
Performance Review: 29 January 1996
On 29 January 1996, when Mr Venn got back from leave, Ms Obst told him that they needed to have a meeting to get his goals sorted out. He was struck by what he perceived to be a change in her attitude towards him. She appeared less friendly throughout the ensuing process; Mr Venn described her as more aloof and stern than usual.
Ms Obst went on to conduct a review of Mr Venn’s performance for the period from 1 July 1995 to 31 January 1996. It was a general review which Ms Obst considered was required because of Mr Venn’s performance throughout the previous year.
Ms Obst told the Court she had discussed the need for such a review with Wesfarmers’ National Human Resources Manager in December 1995, when she had become very concerned with Mr Venn’s performance. She says she felt there were serious issues involved and sought advice as to the best way to approach the review to get results and to improve Mr Venn’s performance. In accordance with the advice she received, the review was delayed until both Mr Venn and Ms Obst returned from leave so that there would be a set period of time following the review during which his performance could be measured.
Ms Obst agreed that her manner toward Mr Venn may have appeared different. She explained she hadn’t been looking forward to the review because of some of the difficult matters she would have to raise with Mr Venn.
The review document completed on 29 January 1996 for the period from 1 July 1995 to 31 January 1996 has gradings only in relation to the “Business Skills” and “Personal Skills” criteria. There were no overall gradings. The gradings were filled in by Mr Venn and Ms Obst in the course of the review, and discussed between them as they went along. The gradings were as follows:
BUSINESS SKILLS
Leader’s Estimates Colleague’s Estimates (i) Knowledge necessary for fulfilling job responsibilities 2 4 (ii) Providing service to clients 2 4 (iii) Establishing and maintaining priorities 2 4 (iv) Using foresight and creative thinking to plan and complete goals 2 - (v) Maintaining procedure and standards 3 4 (vi) Organising work 1 3 PERSONAL SKILLS Leader’s Estimates Colleague’s Estimates (i) Skills and consistency in practising the Company’s Values 3 4 (ii) Skills in finding practical, workable solutions to job problems 2 4 (iii) Reliability in fulfilling delegated responsibilities 3 4 (iv) Proficiency in learning from experience and improving own performance 1 3 (v) Abilities in establishing and maintaining sensitive communications with others 1 4/5 (vi) Performance as a team leader 1 - (vii) Efficiency and productivity in stressful situations 3 4 (viii) Adaptability to change 3 4 (ix) Skills in evaluating own performance realistically 2 3
Rating
Definition 1 Failed to meet important requirements constantly 2 Did not meet most important requirements most of the time 3 Met most important requirements most of the time 4 Met all important requirements most of the time 5 Exceeded all important requirements most of the time
The following areas were listed for improvement:
· Colleague relationships
· Client relationships, particularly with specific large clients
· Organisation and Planning
· Local knowledge of products and requirements.
· Client contact
· Following advice through.
Mr Venn says he was alarmed by the discrepancies between his and Ms Obst’s estimates. Her low gradings came as a shock to him, given his results in the previous review. He felt he had “put in a good year”. He was upset, and refused to sign the review form, because he didn’t accept the ratings.
In the course of the review, Ms Obst again instructed Mr Venn that he shouldn’t “cut across colleagues’ areas”. Mr Venn was not aware that was still a problem. His agronomy role and the merchandising role were quite separate. He had tried to keep out of the way. He says when he asked for examples, there were none forthcoming. Ms Obst said that it was just that he tended to interfere. The issue of timekeeping and lateness was raised again. She raised an example of a complaint from an agent, Mr Howard Richardson, about his lateness for a farmers meeting. Mr Venn responded that he was only five minutes late, and had carted a trailer of chemicals down as a favour to the agent. She asked him how he thought his local knowledge was going. He said he thought it was improving, and gave details. He describes Ms Obst as responding with a “blank look of non-recognition of that explanation”. He recalls being told at the meeting that “the agents don’t want to use you.” At one point in the interview, however, Mr Venn recalls Ms Obst observing that the farmers liked him.
Ms Obst says she told him that the position was extremely serious, and that they couldn’t go on this way. She told him they needed him to turn it around if they were going to have any future for his position.
Ms Obst and Mr Venn were joined during the review by Craig Williamson, who had taken over from Hugh Harding as Manager of the Geraldton Branch. He was asked by Ms Obst to review the poor gradings of Mr Venn’s performance and to discuss the discrepancies in ratings between Mr Venn and Ms Obst. Mr Venn does not recall him saying much.
At the end of the interview, Ms Obst told Mr Venn that they needed to get his goals finalised, and that they should address the matters raised in the review. She told him to go away and draw up some goals, and then come back to discuss them with her. It was agreed they needed to address the issues raised during the meeting and that Mr Venn and Ms Obst would work through them weekly together.
February 1996
There was a delay in Mr Venn drafting the goals and objectives against which his performance would be assessed. The task of preparing the goals was given to Mr Venn by Ms Obst on Monday 29 January 1996. He reported back with a draft on Thursday 1 February 1996. He was told by Ms Obst that he needed to be more specific. They arranged to meet again the next day, Friday 2 February 1996.
At the meeting on Friday 2 February 1996, Ms Obst presented to Mr Venn a memorandum in the following terms:
“TO:NEIL VENN
FROM:SUE OBST
MERCHANDISE MANAGER
SUBJECT:SUBSTANDARD PERFORMANCE AND CONDUCT
This memo confirms our discussion on Monday 29th January 1996 regarding your work conduct and performance. This is a very serious issue which as agreed requires your immediate attention.
As discussed in your 6 month performance review there are several issues that have been raised relating to substandard performance and conduct relating to your work.
Lack of cooperation with colleagues and interfering in colleagues business transactions with clients. The Department operates as a team and requires all colleagues to provide support and assistance to each other. You must operate only within the determined boundaries of your position and allow colleagues to do the same without interference and interruption from you.
Client relationships particularly with specific large clients and Wesfarmers Dalgety agents in the region. The needs and wishes of clients must be considered at all times. You must listen to the needs of our clients and assess their individual requirements and at all times act in their best interests.
Organisation and Planning. When reasonable and achievable time frames have been set by management you must meet these time frames. If there are extenuating circumstances preventing you from meeting these time frames it is your responsibility to advise management so that action can be taken. You must be punctual with appointments at all times or advise as soon as possible of potential delays.
Local knowledge of products and clients requirements. It is imperative that precise and succinct agronomic advice be given in a reasonable time frame at all times.
Specific examples and further explanation of these problems were discussed in your review.
As was agreed specific short term goals and objectives to attempt to alleviate these problems will be implemented. A list of these goals are attached.
An immediate improvement in your work performance and conduct is required as outlined above. I will meet with you on 1st March 1996 for a formal review and will also have progress meetings weekly with you.
If there has not been a marked improvement in both performance and conduct by 1 March, 1996 I will be left with no alternative other than to terminate your employment. This does not prejudice our right to terminate your employment during this probationary period should your performance and/or conduct warrant such action.
If you are unsure of correct action or conduct to take, or you do not understand what is required of you let me know as soon as possible.
Signed........ ........ ...(signed)
Received........ .......(signed)
Bob Hill- Human Resource Manager
Daryl Rowland- State Network Manager
Craig Williamson- Area Branch Manager”
Faced with this document, Mr Venn said that “it sounds as if I’ve done all this deliberately” and that it sounded like “the end”. Ms Obst responded that it was not the end because they had a month to show that they could turn the situation around, but affirmed that at the end of the month, if they haven’t turned it around, it certainly would be the end of the job.
Mr Venn had amended his draft list of goals and objectives. However, attached to the letter was the following list of goals prepared for him by Ms Obst:
“NEIL VENN - GOALS AND OBJECTIVES
1ST FEBRUARY 1996 - 1ST MARCH 1996
COLLEAGUE RELATIONSHIPS
Operate within the determined boundaries of the position of Agronomist. At no time interfere in colleagues business transactions with clients or in their areas of authority.
CLIENT RELATIONSHIPS
Clients calling is to be done 3 days a week minimum with a planned campaign to be in place. A minimum of 25 clients to be called on per week. Report to Merchandise Manager weekly to present next weeks itinerary and a written report on each call made the previous week. Meeting to be on Friday mornings at 8.30am unless agreed otherwise.
Agents from Morawa, Mullewa and Northampton to be called on with the Merchandise Manager to assess needs and requirements for the season and to address previous difficulties experienced.
ORGANISATION AND PLANNING
Meetings and appointments to be attended punctually and within the specified time frames.
IMPROVED LOCAL KNOWLEDGE
Meet with all chemical company Territory managers from key suppliers and endeavour to improve local knowledge and clients requirements.
Ensure that all recommendations are precise and succinct and report any such recommendations to the Merchandise Manager daily.”
Ms Obst told him she couldn’t wait any longer for his draft.
In the week following his review, Mr Venn obtained a list of the Branch’s one hundred leading clients and grouped them according to geography, to allow him to organise a visiting schedule. He gave the list to Ms Obst, and used it to prepare a calling plan for the month of February, which he in turn discussed with Ms Obst. In February, his role would typically have involved canvassing for herbicides and the setting up of field days.
Mr Venn and Ms Obst went and visited two agents in the first week, namely Neil Johnson in Mullewa and Howard Richardson in Morawa. Ms Obst decided not to visit Gary Harrison, the Northampton agent, as his share of the turnover was relatively small and she considered it unrealistic to expect to turn his attitude around in a month.
Both Mr Johnson and Mr Richardson resisted Mr Venn playing a role in their operations, though they eventually acquiesced to the possibility that he might be used should they form the view it would assist.
The meeting with Mr Johnson was left on the basis that Mr Venn would make a further appointment with him.
Final Meeting: 28 February, 1996
At about lunchtime on Wednesday 28 February, 1996, Mr Venn was just about to go home from work with influenza when he received a telephone call from Ms Obst, asking him to bring forward a weekly planning meeting with her which had been scheduled for Friday 1 March to Thursday 29 February, 1996, because she had to go to Perth.
Mr Venn came into the office at the beginning of the next day for the meeting with Ms Obst, despite feeling unwell. Mr Williamson joined the meeting part of the way through. Ms Obst and Mr Venn did most of the talking. After enquiring about Mr Venn’s influenza, Ms Obst remarked that it was not going to be a good meeting.
Ms Obst told Mr Venn that they had given him the letter a month ago to address several issues, and they have not been achieved. Mr Venn was surprised that Ms Obst was of the view they had not been achieved, and pointed out that he had been working to the plan they had agreed, and that he had gone all out to address the issues.
Ms Obst said she was listening to him but then produced a faxed document headed “Termination Entitlements” and handed it to him.
Mr Venn had been considering asking for an extension of the period over which his performance could be assessed. However, on seeing the faxed document, and noting that the transmission details showed it to have been sent from head office the previous morning, he says he was “not fool enough to think: well, gee, I can climb out of this, or if I work three times as hard as I just did in the last month of February, perhaps they will give a stay of execution.”
Ms Obst raised each of the issues in turn and they were discussed at length. Ms Obst discussed in relation to each issue where she felt he had fallen down and where she felt he had achieved. She then gave Mr Venn an opportunity to respond before moving on to the next issue. Ms Obst asked Mr Venn if he had any questions, and he raised a number of specific issues concerning particular clients.
The matters discussed are set out in notes prepared by Ms Obst later the same day:
“Notes on Review of Goals (by Sue Obst)
Issue 1:Lack of cooperation with colleagues and interfering in colleagues’ business transactions with clients.
Evident that Neil has endeavoured to stop interference with colleagues business transactions. However, this is still evident in other behavioural practices. Eg. Kim Frost with Seminar - arranging Robyn Morley’s change of itinerary without consultation with Kim.
It has also meant a total withdrawal of Neil from all office and department functions. ie. No involvement in discussions, no involvement in Friday’s Branch meetings, little or no feedback on informal level to Department colleagues. Colleagues have noticed a change in attitude but feel uncomfortable with the situation.
Issue 2:Client relationships particularly with specific large clients and Wesfarmers Dalgety agents in the region.
No evidence of the goal being achieved. Complaints of incorrect advice and confused advice from clients still happening.
Ralph Gould and Peter Giles: Neil is calling on these types of clients rather than the “well educated” client, but is still unable to meet their needs. When a client is “always confused” as Neil said, it is common sense not to cover huge ground as he said he did. Must simplify recommendations as discussed and if necessary put in writing - also discussed.
Chris Gillam: Neil is more suited to research, didn’t follow up on a difficult enquiry. Another Agronomist found the answer.
Bruce Leishman: Too experimental, not enough guidance, incorrect recommendation.
Andrew Vlahov - No knowledge, on basic everyday information.
Peter Pawelski - Not reliable; messed up order several times. Incorrect recommendations on depth of sowing - cost them about 8 bags per acre - Roamed over sheds and property on a Sunday.
Rolly Flavel - Only saw Neil a couple of times. No agronomic knowledge.
Kim Fleary - Hardly saw Neil - no agronomic knowledge outside soil and cultivation.
Jim Dreghorn - Never saw Neil.
Issue 3:Organisation and Planning
Did not meet time frame on goals and objectives despite seriousness of the nature of the requirement.
Originally asked for goals to be done 3pm Monday following review. Neil came in at 4.30pm, no time to go through this work - gave Neil till 8am Thursday. Finally came in at 10am Thursday - discussed and asked him to be more specific and report back at 8.30 Friday.
On Friday Neil presented his calling programme for the next week but had not worked on his goals. “No time”. Asked him to come back 8am Monday. 11.50am Neil came in and I said I would see him at 4.30.
First review - 9th - no records, photocopied diary when asked - same thing on 23rd February. No appointment with Neil Johnstone although in planning. No contact with Peter Svensson although in his planning twice.
Issue 4:Local knowledge of products and client requirements.
Agronomic advice incorrect. No daily reporting on recommendations as requested. Mullewa problem recognised but not addressed. No follow up to Howard.”
In Mr Venn’s view, Ms Obst glossed over those matters, finally saying “We really don’t see any point in continuing on”. Ms Obst says she told Mr Venn that she believed they had not met their objective in the four weeks and that there had to be a parting of the ways.
At Ms Obst’s suggestion, Mr Venn prepared and signed a handwritten letter of resignation in the course of the meeting. They then went on to discuss further Mr Venn’s perceived difficulties in his dealings with clients. Mr Venn says he was trying to find out why they were dismissing him. He was told that it was because of the “feedback” they were receiving. Mr Williamson said that sales have been dropping. Mr Venn responded that he wasn’t responsible for sales. Mr Venn asked them whether they explored any possibilities for his redeployment. Ms Obst responded that they didn’t see any possibility of redeployment.
Mr Venn estimates that the meeting went on for an hour and a half.
Ms Obst says she believes there was nothing more she could do to try and effectively salvage Mr Venn’s position as an agronomist with Wesfarmers. Nevertheless she maintains she was open-minded when she went into the final meeting, and that there was potentially another alternative to the termination of Mr Venn’s employment, although it was hard to envisage.
Mr Venn was paid one month’s salary in lieu of notice, and an accrued annual leave entitlement.
Wesfarmers have since employed another agronomist for the Geraldton Branch.
Whether There Was a Valid Reason for Termination
Section 170EDA(1)(a) confers the onus on the employer to prove that there was a valid reason for the termination of the employee’s employment connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.
The impression left by Ms Obst’s evidence was that she made the decision to bring about the termination of Mr Venn’s employment. While one might expect that she may have consulted with or even been influenced by Mr Williamson in reaching that decision, there was no evidence to that effect.
The Court heard only indirect evidence of many of the matters which influenced Ms Obst in reaching her decision to terminate Mr Venn’s employment. I heard no evidence from dissatisfied customers or agents of Wesfarmers - only the evidence of Mr Daniel Williamson, a satisfied customer. I heard Mr Venn’s evidence to the effect that the complaints Ms Obst says she received were without foundation.
I admitted Ms Obst’s evidence as to the complaints she received and the ultimatums she was given, because the fact that those complaints were made, whether they were justified or not, influenced her decision.
Having considered the evidence, I accept that Ms Obst concluded in good faith that the complaints were the result of persistent inaccuracies or, at least, a lack of clarity in the advice Mr Venn was giving.
In considering the matter in broader terms, there were two perceived problems with Mr Venn’s performance. First, he was not getting along with his fellow employees. I accept that this was the case, and that Mr Venn was at least partly responsible for those problems. It is apparent however that these problems were not so serious as to constitute a valid reason for the termination of his employment in isolation.
Secondly, the clients and customers of Wesfarmers were complaining about him. Again, to the extent that those complaints related to poor time-keeping, I am not satisfied that those problems were so serious as to constitute a valid reason for the termination of his employment. However, the problems reported by agents and farmers with his advice were more serious.
Ultimately, the evidence relating to the complaints indicates that the agents and several major clients of the Wesfarmers’ Geraldton Branch had lost confidence in Mr Venn’s abilities. Mr Venn can contend that they had no basis for losing confidence in him and that he was giving correct advice. The fact remains that the complaints came in, whether justified or not. I accept that Ms Obst had a reasonable basis, having received the complaints, for concluding that Mr Venn was not effectively performing the role and achieving the result he had been employed to perform and achieve.
An analogy may be drawn with a sales representative dismissed for failure to achieve average sales levels. He or she may be able to demonstrate that their sales techniques are in accordance with industry wisdom, and that they worked diligently in an effort to achieve sales. The fact remains that they are not successfully doing what they were employed to do, which is to achieve sales.
Mr Venn might accurately be said to have been employed to generate goodwill for Wesfarmers. The evidence of the proliferation of complaints which came to the attention of Ms Obst in my view sufficiently indicates that he was not achieving that result, though ideally the measurement of his performance would have been less anecdotal.
The concern I have concerning the circumstances leading to the termination arises from the apparent shift which occurred in Ms Obst’s approach to Mr Venn’s employment in about November 1995. Up to that point, her approach had generally been defensive, and her advice to him encouraging. After the events of November, she formed the view that it may be necessary to dismiss him, and after a delay made necessary for logistical reasons, put in place a process likely to lead to this result.
I suspect that there was nothing Mr Venn could have done in his final review period to “turn things around”. I accept that he worked hard during that period, even though he may not have met all his goals. I place no great weight on his failure to provide daily reports of his recommendations; while this requirement was applied, it was not emphasised, nor brought to his attention when it was not being met.
The problems which had revealed themselves had not however been solved. The agents had not demonstrated a willingness to work with Mr Venn. The complaints continued. The assessments of his performance by many clients still indicated a lack of confidence in him.
Ms Obst concluded at the end of the trial period that things had not been “turned around”, and proceeded to procure Mr Venn’s resignation. This was after some first gentle indications of problems with his performance in July 1995, and after the unfavourable assessment and four week review period in January 1996. It is arguable that Mr Venn was not given an adequate opportunity to improve his performance, because it was not expressly said at the July meeting that the deficiencies in his performance might jeopardise his employment, and because he was not given sufficient time in January 1996. However, I am inclined to agree with Mr Venn’s view. More time would not have helped. He had a finite group of potential clients to service, most of whom had already formed a view as to his usefulness to them. There was probably little he could have done in the medium term to affect that view. Ms Obst was entitled to conclude, based on the results after four weeks, that further time would not assist.
I accept therefore that there was a valid reason for the termination of Mr Venn’s employment.
Had I decided otherwise, then it is likely I would have ordered nominal compensation, because of the likelihood that Mr Venn’s effectiveness would not have improved had he been given more time.
Whether Mr Venn Was Given An Opportunity To Defend Himself
I am, on balance, satisfied that Mr Venn was given sufficient opportunity to defend himself at all stages of the counselling process. While Ms Obst clearly had a preliminary view prior to the final meeting leading to Mr Venn’s termination, she gave him ample opportunity to respond to the perceived shortcomings in his performance. I accept that it remained possible, if unlikely, that she would change her mind.
Conclusion
131. I will order that the application is dismissed.
I certify that this and the preceding 33 pages
are a true copy of the reasons for decision of
Judicial Registrar R.D. Farrell.Associate:
Dated:APPEARANCES
Counsel appearing for the applicant: Ms L. Black
Solicitors for the applicant: Dwyer Durack
Representative of the respondent: Mr C. Platt
Australian Wool Selling Brokers Employers Federation
Dates of Hearing: 9 & 11 July 1996
Date of Judgment: 16 April 1997
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