Vibin Nair v United Petroleum Pty Ltd

[2014] FWC 340

[2014] FWC 340

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Vibin Nair
v
United Petroleum Pty Ltd
(U2013/10285)

COMMISSIONER BISSETT MELBOURNE, 17 JANUARY 2014

Application for relief from unfair dismissal.

[1] This is an application by Mr Vibin Nair (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (the Act) in which he claims he was unfairly dismissed from his position with United Petroleum Pty Ltd (the Respondent).

[2] Mr Nair commenced employment with the Respondent on 20 April 2012. He has held a number of positions and at the time of his dismissal he was employed as a regional manager. In this role the Applicant was responsible for the standards of a number of United Petroleum petrol/convenience store sites. The Applicant was dismissed on 3 June 2013 with four weeks’ pay in lieu of notice.

[3] The Applicant was dismissed for poor performance. His letter of termination said:

I refer to your meeting with myself and Alex Micevski on 17 April 2013 in which I outlined a number of concerns with your performance including areas that could potentially result in serious injuries if not addressed. I also provided you with an action plan and gave an opportunity to improve your performance.

At the meeting you did not dispute that your performance needed to improve and that your current standard was not satisfactory.

Since your above meeting we have worked closely with you to assist you to improve your performance, and in particular Mr Alex Micevski has given you coaching and attended sites with you.

Unfortunately it is clear that despite these efforts your performance has not improved.

On Saturday, 1 June 2013 I met again to discuss you (sic) performance and I informed you that your performance has not improved, and we discussed a number of specific issues. You failed to provide me with any satisfactory explanations at that meeting.

Accordingly I regret to advise you that position with United Petroleum Pty Ltd has decided to terminate your employment... 1

[4] The Applicant says that his dismissal is unfair. He seeks compensation.

[5] The Applicant was represented with permission by Mr Dircks.

[6] The Respondent was represented with permission by Mr Millar of Counsel.

Legislative Requirements

[7] I am satisfied that the Applicant is protected from unfair dismissal (s.382 of the Act). The Applicant was dismissed (s.385(a)), the Respondent is not a small business such that the Small Business Fair Dismissal Code would apply (s.385(c)), and the dismissal does not relate to a redundancy (s.385(d)).

[8] In determining if the Applicant was unfairly dismissed it is necessary for me to consider if his dismissal was harsh, unjust or unreasonable. The requirements for consideration of this matter are set out in s.387 of the Act:

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.

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct

[9] The Applicant was not dismissed on the grounds of any conduct that occurred. Rather he was dismissed on the grounds his performance in his job was not to the standard required by the Respondent. The Applicant was therefore dismissed for reasons that go to his capacity (to do his job).

[10] A determination of the capacity of the Applicant is a determination of his ability to do his job as required by the Respondent. The appropriate test is not whether the employee was working at his personal best but whether the work was performed satisfactorily when looked at objectively:

In our view an employee’s performance is an incident of his or her ‘‘capacity’’ within the meaning of that word in s 170CG(3)(a). A consequence of the adoption of the test posited by the appellant would be that an employer would never have a valid reason to terminate an employee based on his or her capacity if the employee was doing his or her best. This would be so despite the fact that the employee may be entirely unsuited for their position or they do not fulfil a key requirement of their position which was reasonable in the circumstances, as was the case in the matter before us. 2

[11] On 13 November 2012 the Applicant was given a written warning (the first warning letter) with respect to his performance. The issue of the warning followed a meeting between the Applicant and Mr David Szymczak (Chief Operating Officer of the Respondent) at the Rowville site. During this visit Mr Szymczak told the Applicant that his performance needed to improve. 3 That letter detailed areas where the Applicant’s performance was required to improve. The letter indicated that it was a ‘warning for unsatisfactory performance’ and that if there are ‘any further incidents of unsatisfactory performance [this] will lead to the termination of [the Applicant’s] employment.’4

[12] Mr Szymczak says he did not prepare the letter of the 13 November 2013 although he would have had some input into it. 5

[13] Of the matters in the letter the Applicant says that he had raised the issue of the price board with the appropriate area manager and had been told it was on the list to be replaced. 6 He says that while cleanliness standards were raised by Mr Szymczak, he did not speak to the Applicant in a ‘warning tone’. The Applicant took the visit to be a training session but agrees that Mr Szymczak outlined his expectations of how the Respondent’s sites should be presented with the Applicant. He says that the visit could not have resulted in a formal warning as it was the first time Mr Szymczak had visited the site. The Applicant agrees that he told Mr Szymczak he would make sure things were done better.7

[14] The Applicant says when he received the written warning he spoke to Mr Yuen (to whom he reported at that time) who told him not to worry about it and he would ‘fix’ the letter. The Applicant did not follow up any further with respect to the letter and whether or not it had been withdrawn.

[15] In February 2013 Mr Szymczak visited three sites with the Applicant and Mr Yuen that the Applicant was responsible for. Mr Szymczak had ‘serious concerns’ arising from these visits about the state of each of the sites with particular concerns in relation to the Balwyn site.

[16] The Applicant says that: no performance issues were raised during the site visit; it was training for him and Mr Yuen; Mr Szymczak did not identify any problems; 8 and the conversation was informal.9 The Applicant says he did not understand there was a problem with his performance because ‘the conversation on that day was very informal, we were just driving around to the competitors and were looking at what they’re doing and we were trying to figure out what’s happening and what are we trying to do. No performance issues addressed at all...’10.

[17] From 12 April 2013 Mr Alex Micevski (National Operations Manager for the Respondent) took over as the Applicant’s manager. On 16 April Mr Micevski visited the Blackburn South, Bayswater and Croydon sites and identified ‘serious problems that should have been picked up and remedied’ by the Applicant. Mr Micevski took notes on these site visits. 11 Following the site visits a meeting was arranged between Mr Micevski, Mr Szymczak and the Applicant.

[18] This meeting was held on 16 or 17 April 2013. The Applicant agrees that at this meeting performance issues were discussed with him. In particular he says that the safety compliance audits completion was raised with him and he subsequently completed these audits by the end of April.

[19] The Applicant agrees in his evidence that during the meeting Mr Micevski made it clear that he was not happy with the Applicant’s performance and he wanted the performance to improve. He also agrees that it was clear management had some concerns with his performance. 12

[20] Following the meeting a further warning letter dated 17 April 2013 13 was given to the Applicant.

[21] The Applicant says that matters raised in this letter were not raised in the meeting and the report of Mr Micevski mentioned in the letter was not given to him. He says Mr Morely, the Human Resources Manager, gave him the letter 14 and told him that he would follow up and get the report for him.15 The Applicant did not follow this matter up. He did not sign or otherwise respond to the warning letter.

[22] Further, while the Applicant admits that the matters raised in the letter were serious his evidence is that the only matters raised at the meeting were the non-completion of the safety audit of each site, out of date stock on shelves, and that there was not the appropriate LPG torches at the sites. He says that the issue of cleanliness in the stores was not raised. He says that the meeting was not lengthy. He believes that if there were issues management should take him to the sites, tell him what they needed and set out an action plan. 16

[23] Mr Micevski says that his report, referred to in the warning letter, was a reference to his handwritten notes from the site visits he undertook 17 and that it was expected that the Applicant would develop an action plan to address these issues.

[24] Mr Szymczak says that the meeting was held on 17 April 2013, that the meeting was ‘lengthy’ and that he and Mr Micevski spoke to the Applicant of the need for him to improve. Mr Szymczak says that at the end of the meeting the warning letter was provided to the Applicant but he refused to accept it. 18

[25] On 12 May 2013 Mr Micevski says he asked the Applicant to send a warning letter to the Bayswater site with respect to its opening hours. The Applicant subsequently sent an email which is what he says he was told to send. Mr Micevski re-issued the warning letter to the site.

[26] On 21 May 2013 Mr Micevski visited the East Doncaster, Mitcham and Doreen sites. He was ‘dismayed by the state of the three sites’. 19 He completed a checklist for the sites. The Applicant says that he did not attend the sites with Mr Micevski. He also says that there was nothing wrong with the sites. The Applicant’s evidence is that Mr Micevski got it wrong and there were no issues to be found at the site.20

[27] On 23 May 2013 category managers (who are part of the merchandising team for the Respondent) visited the Mulgrave site. As a result of this visit they sent a presentation to Mr Micevski in which they raised a number of critical issues to do with presentation, stock levels, cleanliness etc at the site. 21 The Applicant says that the category managers only visited the site because he had raised issues with the need for new shelving and relay of the site. He says that the problems at the site were beyond his and the site agent’s ability to fix.

[28] On 1 June 2013, a Saturday, the Applicant was contacted by Mr Szymczak and asked to come into a meeting. Mr Szymczak says that Mr Micevski arranged the meeting. 22 The Applicant says the meeting was between him and Mr Szymczak.23 Mr Szymczak says the meeting was also attended by Mr Micevski.24 Mr Micevski says in his written statement that he attended the meeting25 but in his oral evidence he could not recall if he was at the meeting or not.26

[29] At that meeting Mr Szymczak told the Applicant neither he nor Mr Micevski was happy with his performance. The Applicant says he was surprised when this was put to him as nothing had been raised with him after the warning letter of 17 April 2013. Mr Szymczak then said that he would think things through over the weekend. 27

[30] On 3 June 2013 the Applicant was called into a meeting with Mr Szymczak. Mr Micevski cannot recall if he attended this meeting or not, although both the Applicant and Mr Szymczak say he was present. At this meeting the Applicant was advised that his employment was being terminated. The Applicant was surprised as he thought he might be formally counselled about his performance but not dismissed. 28

[31] I did not find the evidence of the Applicant or of Mr Szymczak or Mr Micevski for the Respondent particularly reliable or useful.

[32] The Applicant’s evidence was at times inconsistent such that its reliability is in question.

[33] Mr Szymczak and Mr Micevski for the Respondent both had very poor recall of quite critical issues in the process of performance managing and ultimately deciding to terminate the Applicant’s employment. Mr Szymczak was vague on a number of matters including his recollection of events and documents. He did not, himself, take any responsibility for drafting the warning letters given to the Applicant although he signed both of them. Mr Micevski seemed confused in his evidence as to whether he had attended meetings that were quite critical in the decision to terminate the Applicant’s employment.

[34] Despite these deficiencies I am satisfied that the Applicant was not performing his job at the standard expected of him. The Applicant managed either to find someone else who was responsible for many of the problems with respect to his sites or that it was just too hard. He appears to have not appreciated that when specific standards were being explained to him these were the standards reasonably expected at all sites.

[35] The Applicant’s response on a number of matters in this respect is not convincing. Of the price board at Rowville the Applicant says he had already sought to have the board replaced. The evidence he relies on however shows that he raised the issue at best in March 2013 – some four months after Mr Szymczak raised it with him and not beforehand.

[36] With respect to the state of a number of sites, the Applicant did not seem to think that it was his responsibility to bring the sites up to standard. He says the sites were run by agents, that they were responsible for stock ordering and for training of staff. If they had non-authorised stock or their staff were not trained it was their problem. Of the Blackburn site he says it was in the state it was when he took over the position and he had done nothing about it. Problems with sites he says were the fault of someone else in the organisation not doing their job properly or not providing the equipment he felt was needed. 29

[37] I accept the evidence of Ms Suzanne (Cruise) Findlay that she undertook a relay 30 of three sites in response to a request from the Applicant. That request from the Applicant was made on 5 May 2013.31 I accept her evidence of the state of the sites she visited and that she, and not the Applicant, did most of the work of the relay.

[38] The evidence from the presentation of the category managers is that the problems with that site would not be remediated with some new shelving and a relay. The content of the presentation, not disputed by the Applicant, indicate that the problems went much further than a simple shelving relay. The site was in a state of very poor repair and was suffering from neglect.

[39] I am satisfied that the Applicant failed to appreciate advice given to him, formally or otherwise, on the standards expected of him. That Mr Szymczak did not tell him he was being counselled when he explained the standards expected on site visits does not mean the Applicant was not advised of the standards expected.

[40] The Applicant was an area manager for the Respondent. It was his role to ensure that all sites within his area met the standards necessary. The Applicant accepted the proposition that, as a regional manager he was expected to take ownership of problems in the stores and ensure that the Respondent’s best image was put forward. 32 Whilst acknowledging this, the Applicant did not appear to appreciate what was required if him. When it was put to him that the Respondent was looking for him to show some leadership in managing a particular outlet the Applicant’s response was:

How can I? It’s not fair when you say, “You have to manage.” As a company they have their own duty of care that, they give me guidelines on how do I manage it. Because if you go and say, you know, “You have to manage it,” when I’m not placing an order, when I can’t see the information. How am I supposed to manage that?

[41] This response encapsulates the issues of the Applicant’s performance. It appears that without very specific direction from the Respondent as to how to do his work he was not sure on how to manage the sites he was responsible for.

[42] For a reason to be valid it must be ‘sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason...’ 33

[43] In the circumstances of this case I am satisfied that the Respondent had a valid reason that is sound and well founded to terminate the Applicant’s employment.

Whether the person was notified of that reason

[44] I am satisfied that the Applicant was aware of the reason for the termination of his employment prior to being dismissed.

[45] The Applicant had received two written warnings, had site visits with Mr Micevski and Mr Szymczak and attended two formal meetings where his performance was discussed (on 16 or 17 April 2013 and 1 June 2013).

[46] That the Applicant did not sign the warning letters is not relevant. His view that the warning letters would not stand if he did not sign them is inexplicable and he gave no reason for this view.

[47] The warning letters in particular raised performance issues with the Applicant. I am therefore satisfied that he was notified of the reason for his dismissal.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[48] I am satisfied that the Applicant was given an opportunity to respond to the reason for his dismissal prior to the dismissal taking effect.

[49] I am satisfied that Mr Szymczak did not make the decision to terminate the Applicant’s employment until after the meeting of 1 June 2013.

[50] Prior to this the Applicant had received two written warnings about his performance and been involved in a number of informal discussions.

[51] The Applicant was aware that his employment was at risk if his performance did not improve and was given a number of opportunities to respond to the concerns either orally or in deed.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[52] There was no unreasonable refusal to allow the Applicant to have a support person present at any of the meetings.

If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[53] I am satisfied that the Applicant was advised, by the warning letters of 13 November 2012 and 17 April 2013 that his performance needed to improve and that, if it did not improve it may lead to termination of his employment.

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 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

[54] No submissions were made on these matters.

[55] I note however that the Respondent is a national company and has a Human Resources Manager (he signed the first warning letter) which suggests that there is some human resource expertise to provide advice on the process of managing staff performance and effecting dismissals.

[56] I note that there is no evidence, apart from one signed warning letter, that the Human Resources Manager played any role in managing this particular issue.

Any other matters that the FWC considers relevant

[57] There is much about the termination of the Applicant’s employment and the performance management of him that is of concern to the Fair Work Commission.

[58] It is inappropriate in my opinion that a person not present at a performance meeting should write to an employee about matters discussed at such a meeting. This is what occurred with respect to the warning letter of 13 November 2012. Mr Morely, the Human Resource Manager, signed a letter to the Applicant that went to matters directly discussed at a meeting Mr Morely was not present at, yet the letter does not make that clear. The letter says, for example, that ‘In the meeting you were asked if you had anything to say or to respond to the situation and nothing in your response has indicated that you have taken responsibility for these issues.’ Mr Morely cannot know whether the Applicant’s response indicated he had taken responsibility. That is a judgement only those present could make. Mr Szymczak says the letter of 13 November 2012 was written on his instruction but it does not read this way. If Mr Szymczak conducted the meeting then the letter should properly make this clear or be signed by Mr Szymczak himself.

[59] The letter of 17 April 2013 was, on one version of events, delivered to the Applicant by Mr Morely (and this seems to be supported by his initials on the last page) who was not present at the meeting at which the contents of the letter were said to have been addressed. Again the letter was prepared by Mr Morely on Mr Micevski’s instructions and signed by Mr Szymczak.

[60] I have mentioned above my concern with the evidence of both Mr Szymczak and Mr Micevski. These two people took responsibility for the performance management of the Applicant and Mr Szymczak the ultimate responsibility for the decision to terminate the Applicant’s employment. The lack of a clear recollection from either of them as to attendance at key meetings raises legitimate concerns about the accuracy of their evidence with respect to what was said at the meetings and in other conversations with the Applicant.

[61] During proceedings it came to light that the letter of termination Mr Micevski says was given to the Applicant 34 (although it was signed by Mr Szymczak and there is no evidence Mr Micevski was responsible for writing it or providing it to the Applicant) is not the same letter the Applicant put into proceedings.35 The letter produced by the Applicant was verified as a true copy of the letter he received.

[62] Neither Mr Szymczak nor Mr Micevski could explain the existence of two termination letters, both addressed to the Applicant but different in content. Mr Szymczak could not explain why he had signed both of them.

[63] The existence of the two letters suggests a lack of attention to what is a serious issue involving the dismissal of an employee for poor performance.

[64] I note that the Applicant was employed by the Respondent for 13 months. On termination of his employment he received four weeks’ pay in lieu of notice.

Conclusion as to harsh, unjust or unreasonable

[65] In Byrne v Australian Airlines Ltd it was held that

It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. 36

[66] There is no doubt that the Applicant’s performance was not of a standard required by the employer. This is easily discerned from the Applicant’s own evidence. The Applicant’s tendency was to blame everyone else for shortcomings in his own performance and to only address issues of concern when management had brought these to his attention. I have found above that there was a valid reason for his dismissal. The Applicant’s view that the warning letters meant nothing as he did not sign them is perplexing.

[67] On the other hand there are serious deficiencies in how management conducted some of the meetings and dealt with the warning letters. Apparent undertakings given to the Applicant were not followed through (for example to provide him with a copy of the report mentioned in the letter of 17 April 2013). No evidence was given of any follow up by management of the Applicant’s performance in between the meetings held with him.

[68] On balance however it cannot be ignored that the Applicant was given two warning letters, and, even on his version of events, was spoken to, including on site visits, about the standards expected of him by the Respondent. He was aware from at least November 2012 that his performance was not at the level required. It did not appear to improve. I am satisfied the Applicant was afforded a fair go in his dealing with Respondent. I have also taken into account that the Applicant received four weeks’ pay in lieu of notice after 13 months employment.

[69] On balance, and having carefully weighed the evidence I am satisfied that the dismissal of the Applicant was not harsh, unjust or unreasonable.

Conclusion

[70] I find that he Applicant was not unfairly dismissed from his employment with the Respondent. The application is therefore dismissed.

COMMISSIONER

Appearances:

G. Dircks for the Applicant.

R. Millar of counsel for the Respondent.

Hearing details:

2013.

Melbourne:

November 12, December 13.

 1   Exhibit A3, attachment VB7.

 2   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 [75].

 3   Transcript PN841.

 4   Exhibit R2, attachment 1.

 5   Transcript PN816.

 6   Exhibit A6 commencing with email of 27 March 2013.

 7   Transcript PN203-5.

 8   Transcript PN238.

 9   Transcript PN246.

 10   Transcript PN246.

 11   Exhibit R3, attachment 1, 2 and 3.

 12   Transcript PN322, 324.

 13   Exhibit A3, attachment VB4.

 14   Transcript PN272.

 15   Transcript PN318.

 16   Transcript PN354.

 17   Exhibit R3, attachment 1, 2 and 3.

 18   Exhibit R2, paragraphs 9-10.

 19   Exhibit R3, paragraph 12.

 20   Transcript PN405.

 21   Exhibit R3, attachments 14 and 15.

 22   Exhibit R2, paragraph 11.

 23   Transcript PN589.

 24   Exhibit R2, paragraph 12.

 25   Exhibit R3, paragraph 23.

 26   Transcript PN1094.

 27   Transcript PN621.

 28   Transcript PN627.

 29   See exhibit A4. See also, for example transcript PN302, 334, 484, 494, 5127, 525 and 535.

 30   Ms Findlay’s evidence is that a relay is about getting stock onto the shelves of the site in the order required by merchandising. Sometimes it may involve new and/or additional shelving being installed but this was not always the case. Sometimes it was just the placement of stock.

 31   Exhibit A3, attachment VB6.

 32   Transcript, PN526.

 33   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 34   Exhibit R3, attachment 18.

 35   Exhibit A3, attachment VB7.

 36 (1995) 185 CLR 410, 465.

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