Yen Yap v Club Assist Pty Ltd
[2022] FWC 520
•8 JULY 2022
| [2022] FWC 520 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Yen Yap
v
Club Assist Pty Ltd
(U2021/9643)
| DEPUTY PRESIDENT BOYCE | SYDNEY, 8 JULY 2022 |
Application for an unfair dismissal remedy – applicant dismissed for alleged failure to meet KPIs – misconduct reasons raised post dismissal – concerns with KPIs as a genuine measure of individual performance for valid reason purposes – no valid reason for dismissal – procedural unfairness – dismissal harsh, unjust and unreasonable – whether reinstatement inappropriate – reinstatement, back-pay and continuity of service ordered
Introduction
Mr Yen Yap (Applicant) has filed a Form F2 with the Fair Work Commission (Commission), being an application for an unfair dismissal remedy. The Applicant claims that he was dismissed from his employment with Club Assist Pty Ltd (Respondent) on 12 October 2021, and that his dismissal was “unfair” within the meaning of Part 3-2 of the Fair Work Act 2009 (Act).
The Respondent asserts that the Applicant was dismissed due to unsatisfactory work performance. In short, the Respondent says that the dismissal was both substantively and procedurally “fair”.
Following the receipt of submissions and evidence in accordance with directions made, I held a hearing in Sydney to resolve the application. Mr Philip Boncardo of counsel appeared with permission for the Applicant, instructed by Mr Joshua Martin of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). Ms Tess Duthie of counsel, instructed by Mr William Marshall and Mr Grant Klemm (Solicitors, Gadens), appeared with permission for the Respondent.[1]
Factual Background
The Applicant relies upon the following evidence:
(a)Witness Statement of Mr Yen Yap, Applicant, dated 14 December 2021 (Exhibit A3);
(b)Witness Statement of Mr Yap in reply, dated 17 January 2022 (Exhibit A4);
(c)Witness Statement of Ms Jacqueline Carovska, Organiser, AMWU (NSW Branch), dated 14 December 2021 (Exhibit A1); and
(d)Witness Statement of Ms Carovska in reply, dated 17 January 2022 (Exhibit A2).
The Respondent relies upon the following evidence:
(a)Witness Statement of Mr Paul Kinsella, General Manager NSW & ACT, dated 24 December 2021 (Exhibit R3); and
(b)Witness Statement of Ms Denise Scally, Senior Human Resources Business Partner, dated 24 December 2021 (Exhibit R5).
I note that the parties contested much of the factual background as it relates to the Applicant’s conduct and performance, and in particular matters around the Key Performance Indicators (KPIs) that the Applicant was assessed against. That said, the parties do not appear to be in contest as to the following issues, as compiled from the evidence and submissions filed with the Commission:
(a) The Respondent conducts a roadside repair service, specialising in the storage, distribution, and installation of car batteries in vehicles. It provides roadside assistance services and personnel to various state-based clients, including the National Road and Motorist Association (NRMA) in New South Wales.
(b) The Respondent employs Non-Technical Roadside Responders (NTRR) and Technical Roadside Responders (TRR), collectively known as Roadside Patrol employees. Both NTRR’s and TRR’s attend jobs for members of the NRMA and perform diagnostic and battery change/replacement functions. TRR’s also perform some additional tasks, such as changing tyres or assisting members to access their vehicle, but do not perform functions equivalent to a mechanic. The Respondent’s Roadside Patrol employees supplement NRMA’s own roadside assistance workforce, made up of employees and contractors engaged directly by NRMA. More than 50% of the jobs attended by Roadside Patrol employees for NRMA relate to battery issues.[2]
(c) The Applicant is 61 years of age. He is a qualified motor mechanic. He commenced employment with the Respondent on 27 November 2017 as an NTRR. On and from 4 April 2018, he was appointed as a TRR.[3]
(d) The Applicant’s job as an NTRR involved attending to the testing and replacement of car batteries, tyres and other like matters relating to motor cars. After being appointed as a TRR, the Applicant’s job was to attend to the roadside repair of motor vehicles, including undertaking the minor repair of transmissions, fixing steering issues and salvaging vehicles that were, for instance, bogged. His duties were in effect to conduct required repair or remedial work to the vehicles of the Respondent’s customers, and get them back on the road.
(e) The Respondent organises its business around ‘hubs’. TRRs and NTRRs are based at hubs located in particular geographical areas, which have responsibility for surrounding and adjacent locations.
(f) Work is allocated by the Respondent notifying TRRs or NTRRs of a job they are required to attend via a message sent on a tablet. TRRs and NTRRs are then required to click ‘enroute’ when they are travelling to the job location, ‘at scene’ when they arrive and ‘call clear’ when the job is completed. This data is able to be inputted via the tablet.[4]
(g) The Applicant was, during the course of his employment, based at the Chatswood hub. He performed work in the surrounding area which encompassed north eastern Sydney, including the area around Brookvale and up to Palm Beach.
(h) In late May 2020, the Applicant was called into a meeting with the Respondent’s management and told he was to be placed upon a ‘Coaching and Performance Improvement Plan’ (CAPP).[5]
(i) The CAPP (in short) purported to deal with three matters:
(i) battery conversions by the Applicant needed to remain above 50% of jobs attended;
(ii) the Applicant’s average working time per job was too long and needed to improve; and
(iii) the number of batteries being replaced under warranty by the Applicant were too high.[6]
(j) From 21 May 2020 to 29 September 2020, as part of the CAPP, the Applicant attended monthly KPI Meetings with his Manager, during which his failure to meet KPIs and/or the goals in the CAPP was discussed.[7] During the period post 2 October 2020, the Applicant attended regular monthly catch-ups with his manager to discuss his KPI performance (noting that all roadside patrol officers also attend monthly KPI catch-ups with their relevant manager).[8]
(k) On 2 October 2020, the Applicant received a formal written Warning, at which time the CAPP ended.[9] The Warning noted that the Applicant’s performance in three identified areas, battery conversion rate, battery warranty rate and average working time on jobs, did not meet the Respondent’s stipulated KPIs. The Warning stated that due to the Applicant’s continued failure to meet expectations under the CAPP/KPIs, his ongoing employment was at risk.[10]
(l) Around 10 months later, on 30 August 2021, the Respondent issued the Applicant a Show Cause Letter. That letter identified an asserted failure to meet KPIs from January to June 2021, in relation to the three identified areas (average working time, average time on job, and battery warranty rates). The Show Cause Letter stated that whilst there had been ‘some improvement’ in the three identified areas, the Applicant’s performance was below KPI standards.[11]
(m) The Applicant responded, with the assistance of his union, to the Show Cause letter on 17 September 2021.[12]
(n) Having considered the Applicant’s response to the Show Cause Letter, it was recommended to Mr Kinsella, by Ms Scally, that the Applicant’s employment be terminated by the Respondent.[13]
(o) On 12 October 2021, the Applicant was terminated by the Respondent. The Termination Letter (of same date) reads:
“Dear Yen
Termination of employment
Thank you for attending our meeting today at which we discussed Club Assist Corporation Pty Ltd.’s (Club Assist) ongoing concerns with your performance.
I am writing to confirm Club Assist has considered all the responses you have provided to date in relation to your performance issues, including in the Meeting. We do not consider that your responses provide a sufficient explanation for your performance issues, nor do they persuade us that your employment should not be terminated.
To that end, I confirm Club Assist has decided to terminate your employment. You will receive payment in lieu of notice of four weeks’ pay.
Please return all of Club Assist’s property in your possession by no later than close of business Wednesday 13th October 2021. This includes the return of all physical and electronic files in your possession. Including those held on personal devices. You are also required to delete any electronic copies of Club Assist’s information in your possession.
We also remind you of your post-employment obligations including but not limited to in relation to the disclosure of confidential information and intellectual property.
You will be paid your statutory and contractual entitlements as per your employment contract.”.[14]
Statutory provisions
Section 385 of the Act reads:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
The parties are not in dispute as to the following:
(a) The unfair dismissal application was made within the period required by s.394(2) of the Act.
(b) The Applicant is a person protected from unfair dismissal within the meaning of s.382 of the Act.
(c) The Applicant had been “dismissed” by the Respondent within the meaning of s.386 of the Act.
(d) The Small Business Fair Dismissal Code (as provided for in s.388 of the Act) does not apply.
(e) The Applicant’s dismissal was not a case of genuine redundancy within the meaning of s.389 of the Act.
I accept and make findings consistent with the foregoing position of the parties.
Section 387 of the Act provides what matters must be taken into account by the Commission in determining whether a dismissal was harsh, unjust or unreasonable:
“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”.
I turn to consider each of these matters.
s.387(a) — Whether there was a valid reason for the Applicant’s dismissal which is related to his capacity or conduct
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”, and should not be “capricious, fanciful, spiteful or prejudiced”.[15] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[16]
Where a dismissal relates to an employee’s conduct, the reason for dismissal might be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur, or it did occur, but did not justify termination.[17] The question of whether alleged conduct took place, and what it involved, is to be determined by the Commission on the basis of the evidence in the proceedings before it.[18]
Where a dismissal relates to an employee’s capacity (i.e. where the reason is associated or connected with the ability of an employee to do their job),[19] and there is a dispute as to whether the employee possessed the requisite capacity to perform their job, it is for the Commission to resolve that disputed issue as a matter of fact.[20]
I note at this stage that Applicant’s case relies heavily on arguments going to the ‘reasonableness’ of the KPIs that the Applicant was assessed against to measure his performance. This means that the submissions by each party under s.387(a) of the Act also contain lengthy submissions and arguments relating to the KPIs.
Applicant’s Opening Submissions (s.387(a))
The Applicant’s opening submissions under s.387(a) of the Act are as follows:
“21. The principles concerning valid reason are well settled. A valid reason is one which is sound, defensible and well-founded; and not capricious, fanciful, spiteful or prejudiced. A valid reason must be defensible or justifiable on an analysis of the objective facts.[21]
22. It is not clear whether Club Assist will rely on the ‘capacity’ or ‘conduct’ limbs of s 387(a) of the [Act]. It is submitted that, properly assessed, a dismissal for unsatisfactory performance is a dismissal premised on an employee’s capacity rather than their conduct, as it is concerned with an employee’s ability to do the work they are employed to do.[22] The Full Court of the Federal Court observed in Crozier v Australian Industrial Relations Commission [2001] FCA 1031:[23]
‘… The word “capacity”, as used in s 170CG(3)(a), means the employee's ability to do the work he or she is employed to do. A reason will be “related to the capacity” of the employee where the reason is associated or connected with the ability of the employee to do his or her job. The terms of s 170CG(3)(a) provide no support for Mr Crozier's contention that there can be no “valid reason ... related to the capacity ... of the employee” where an employee is working to his or her personal best, even though this personal best is less than what is required to do the job for which he or she is employed. Plainly, there can be a valid reason for the termination of an employee's employment where he or she simply does not have the capacity (or ability) to do the job. In this case, the Full Bench found that Mr Crozier knew that “the main focus of his position was to generate new business”; that he failed to meet this objective; and that his failure was not due to external factors but to a lack of capacity (or ability) as a sales representative (at 150 & 152-153). In making these findings it acted within jurisdiction, and we detect no jurisdictional error in its approach.’
23. Focus must, therefore, be directed to the job the applicant employee was engaged to perform and an objective analysis made as to whether the employee was doing what their job required.
24. When the reason for termination is premised on misconduct alleged to have been engaged in by an applicant (which does not appear to be this case), the Commission must determine: (1) whether the misconduct occurred and what it involved; and (2) whether the misconduct justified the termination. In respect to (2), there will not be a valid reason for termination if the conduct occurred but did not justify the termination.[24]
25. The employer bears the persuasive onus of establishing that there was a valid reason for dismissal.[25]
26. There was no valid reason for Mr Yap’s dismissal relating to his capacity.
27. In relation to the KPIs generally, how they were derived and whether they were formulated after an objective and impartial analysis or study is unclear. Club Assist has never sought to identify how the KPIs were objective and proper measures of performance. Additionally, the evidence adduced discloses that there were serious issues and concerns with the arbitrary and unfair nature of the KPIs imposed by Club Assist.
28. Further, how the KPIs were appropriate measures is debatable. The notion that TRRs or NTRRs should aim for a particular battery warranty rate appears prima facie improper, given that it points employees to not make an impartial and proper assessment of whether a battery was in warranty. Further, it is plainly the case that Club Assist was contracted to provide appropriate and professional service to its customers. This would necessarily involve its employees properly attending to each job they were called out to perform. If those jobs were complex or difficult, they should necessarily spend more time on them. Average working time and time on job measures were a perverse incentive to not complete work properly or professionally.
29. Moreover, there is no indication that the failure to achieve the stipulated KPIs had any adverse impact on anyone, let alone Club Assist.
30. Most fundamentally, what these KPIs had to do with Mr Yap’s ability to perform his job is not pellucid.
31. The following matters may be observed in relation to the three KPIs relied on to ground the dismissal.
32. ‘Average working time’ was capricious and unbalanced. The requirements of each job were necessarily different, and more complex or difficult jobs would take longer to complete.
33. The ‘average time on job’ measure was both arbitrary and unfair. It was flawed, as employees regularly inputted that they were commencing a job at different times after being notified of the job, meaning it was not an objective or uniform measure. Further, it was arbitrary as it took no account for the different travel time to jobs or the complexity and nature of particular jobs. NTRRs and TRRs who were required to travel greater differences or otherwise deal with more complex or difficult jobs would have necessarily had a greater average time on job.
34. The battery warranty rate was likely improper and impermissible, for the reasons detailed above.
35. There was no lack of diligence, quality or care taken by Mr Yap in performing work. He performed his job as a TRR to an appropriate and satisfactory level.
36. In the circumstances, Club Assist cannot establish that there was a valid reason for Mr Yap’s dismissal.
37. This entails that there was not valid reason for dismissal.”[26]
Respondent’s Opening Submissions (s.387(a))
In reply to these submissions, the Respondent filed submissions clarifying its arguments under both the ‘capacity’ and ‘conduct’ limbs, as well as background context to the Respondent’s KPIs:
“Key Performance Indicators – formulation and training
10. CA’s Roadside Patrol employees are subject to certain Key Performance Indicators (KPI’s).
…
12. The position description for Roadside Patrol employees (which is provided to them with their employment contract) confirms the importance of the KPI’s. It states: (emphasis added)
a. “the position exists to assist in the overall achievement of service delivery and response times.”; and
b. “[NTRR/TRR’s] must adhere to all Key Performance Indicators as set out by Club Assist Management”.
13. Upon commencing employment with CA, Roadside Patrol employees receive a list of the KPI’s in the Roadside Responder Monthly Performance Review Sheet, and then also receive one on one training in the KPI’s with their Field Manager.
14. Roadside Patrols then attend monthly KPI meetings with their manager throughout their employment during which their performance against the KPI’s is assessed and discussed. Further training and guidance on achieving the KPI’s is then provided by their Manager on a monthly basis.
15. CA’s Roadside Patrols are not expected to achieve every KPI each month. Some variation is inevitable and expected. However, if a Roadside Patrol employee consistently fails to achieve the KPI’s, this will result in steps being taken to manage and improve the performance of such an employee.
16. CA’s clients in other states have similar requirements in their respective SLA’s around matters such as average working time taken by a Roadside Patrol per job and their battery sale conversion rate (which are similar to CA’s KPI’s in NSW, described in more detail below). Accordingly, KPI’s for CA’s Roadside Patrol employees in other states are very similar to those implemented for CA’s NSW Roadside Patrol employees.
17. Further, CA understands that NRMA (along with its other state-based clients, such as RACV in Victoria) require their own employees and/or contractors to meet similar KPI’s. CA’s KPI’s are therefore consistent with the industry standard.
Description of relevant KPI’s
18. Relevantly, the KPI’s for CA’s Roadside Patrol employees include the following:
a. Average Working Time, target 17 minutes – meaning time spent at a job by a Roadside Patrol employee from the time they indicate they are “at scene” until they indicate “call clear”. If a job is likely to take a longer period of time, for reasons beyond the employee’s control, they are required to notify NRMA’s dispatch team and/or make a note of why this is the case on their tablet. This is then taken into account in assessing performance against this KPI.
b. Average Time on Job – meaning the time from when the Roadside Patrol employee is initially dispatched to a job the time they click “all clear” in the system. This is a secondary KPI and is primarily used as a check and balance on Average Working Time.
c. Battery Conversion Rate, target 24% - meaning the number of battery sales made by a Roadside Patrol employee, divided by the number of jobs they attend. This is of particular importance to the NRMA as battery sales makes up a large portion of their business, and battery related jobs make up more than 50% of jobs attended by Roadside Patrol employees.
d. Battery Warranty Rate, target 3.9%, meaning the percentage of batteries replaced under warranty against the number of batteries sold. This KPI is formulated to ensure CA employees are not giving away free batteries to members, and claiming they are covered by warranty when they are not. In respect of this, KPI it is important to also note that:
i.whether a battery is covered by warranty or not is determined by diagnostic tests run by testing equipment and/or by the answers given by members to prescribed questions asked by a Roadside Patrol employees (for example, to determine if the member has voided their warranty by failing to drive the car for a prolonged period);
ii.CA’s experience shows that batteries under warranty should fail on less than 2% of occasions, the KPI is therefore set at 3.9% to enable employees to exercise their discretion and replace batteries “under warranty” on almost twice as many occasions as they are likely to encounter a battery that has failed and is genuinely covered by warranty;
iii.if an employee has a high battery warranty rate, but it can be demonstrated that they only replaced batteries under warranty on occasions where those batteries fell within the warranty parameters (as determined by the diagnostic test and/or answer to questions), this does not in any way reflect poorly on an employee’s performance. To the contrary, it is expected that all batteries which are legitimately within warranty must be replaced accordingly;
iv.if, however, a Roadside Patrol employee has an excessively high battery warranty rate and it cannot be explained by reference to an outlier of failed warranty batteries, this indicates that the employee may be replacing batteries “under warranty” when they are not genuinely covered by a warranty; and
v.it is simpler for a Roadside Patrol employee to simply replace a battery on the spot and claim it was under warranty, instead of selling a new battery to a member and/or having a difficult conversions with a member to explain why a warranty has been voided or does not apply. This is of concern to CA and another reason for this KPI.
…
Capacity Limb
35. A valid reason for dismissal must be “sound, defensible or well founded”.[27]
36. A sustained failure to achieve and sustain performance criteria represents a valid reason for termination of employment.[28]
37. The Applicant’s performance fell well short against the required KPI standards for a prolonged period of almost 22 months, and thus the Commission can be satisfied that CA had a valid reason for the dismissal.
38. The Applicant rightly submits that when assessing an employee’s capacity, focus must be directed to the job the Applicant was engaged to perform.
39. Plainly, the adherence to and achievement of the KPI’s was critical to the role the Applicant was engaged to perform. So much is confirmed by the position description which states that the role of NTRR/TRR exists to assist in the overall achievement of service delivery and response times and ‘employees must adhere to all KPI’s as set out by CA’.
40. Indeed, for CA to maintain its SLA it is essential that Roadside Patrol employees, on average, meet their KPI’s. The adherence to KPI’s is therefore absolutely critical to the role of Roadside Patrol.
41. The Applicant does not appear to dispute that he continually failed to meet the KPIs. Instead he continues to make excuses for his continued underperformance, primarily by relying on assertions that the KPI’s are an unreasonable measure of performance. Their assertions are incorrect, inter alia, for the following reasons:
a. In regard to battery conversions, as more than 50% of jobs attended by Roadside Patrols concern battery related issues, and on only 2% of occasions is it likely the battery will be under warranty, it is not in any manner improper to set sales targets to encourage employees to utilise this opportunity to sell NRMA’s batteries. Plainly, this should only occur when the member requires a replacement battery, however, this will oft be the case.
b. In regard to average working time, CA takes into account job by job variables and requires employees to notify dispatch if a job will be unusually long, or make note of this on their tablet. Variables outside an employee’s control are therefore taken into account when assessing this KPI.
c. In regard to battery warranty rates, as noted above at paragraph 18(d) if an employee’s battery warranty rate is high, but it can be demonstrated that on all occasions the replaced batteries were indeed under warranty, this is of no concern at all and entirely appropriate. However, this was not the case with the Applicant, who could not explain why his battery warranty rate was so high, and thus the excessively high rate was indicative of the Applicant providing free batteries to customers who did not have a valid warranty.
d. In regard to average time on job, this is primarily a check and balance on average working time and was only included on the Applicant’s CAPP reports at his own request.
42. In the decision of David Friend v Bennett Carroll Holdings Pty Ltd T/A (Bennet Carroll),[29] Deputy President Asbury similarly considered an unfair dismissal application brought by an employee who consistently failed to achieve KPI’s for the vast majority of their employment.
43. Deputy President Asbury determined that the employee’s failure to adhere to KPI’s was a valid reason for dismissal and noted that the employment had been accepted on the basis of the KPI’s[30] and the Applicant’s performance against the KPI’s was consistently worse than other employees.[31]
44. Similarly, in the recent decision of Cristian Vasquez v Cleanaway Operations Pty Ltd (Cleanaway),[32] Deputy President Binet considered the dismissal of an Applicant who had failed to achieve certain KPI’s, relating to sales targets and alike.
45. The Deputy President was not persuaded to accept the “evidence of a disgruntled poorly performing former employee”[33] that the targets set by the employer were unreasonable, particularly in the face of evidence that (i) other employees were able to achieve their targets on a regular basis[34] and (ii) the evidence provided by the employer demonstrated that competitors had similar sales models.[35]
46. As can be seen from the above decisions of Carroll Bennett and Cleanaway, it is significant that:
a. the Applicant accepted employment on the basis that he must adhere to the KPI’s, as set out in the position description provided to him with his employment contract;
b. the Applicant’s performance against the KPI’s was consistently worse than that of other Roadside Assist employees, who generally met their KPI’s over the same period or came very close to doing so; and
c. CA’s KPI’s are similar to that of NRMA, and other roadside assist operators such as the RACV and therefore reflect an industry standard.
47. Indeed, not only did the Applicant fail to meet the KPI’s but he displayed a “continued pattern of disregard”[36] for them and no desire to work towards improving his performance to achieve them.
48. Thus, the Commission can be satisfied that the KPI’s are a reasonable measure of the Applicant’s performance, which were inherently critical to his role, and his sustained failure to meet these KPI’s over a prolonged period constituted a valid reason for dismissal.
Conduct Limb
49. In the alternative, the Commission can be satisfied that CA had a valid reason to terminate the Applicant’s employment based on his conduct.
50. The Applicant refused to engage with the CAPP and/or CA’s KPI’s and instead displayed a poor attitude and behaved in a belligerent and rude manner towards his manager and employer, as identified at paragraph 25 above.
51. Not only did he make thinly veiled threats, daring CA to terminate his employment and “see what happens”, he also disparaged CA to other Roadside Patrol employees, such that they requested he be asked to stop “stirring up trouble”.
52. The Applicant displayed an attitude of contempt towards the Respondent, its personnel and KPI’s, such that the ongoing employment was untenable.
53. Whilst the Respondent acknowledges that the Applicant’s poor attitude was not relied upon in the show cause or termination letters as a reason for dismissal, it was nonetheless taken into account by the Respondent at the time the decision was made, and the Tribunal is not confined to consideration only of the reason or reasons given by the employer at the time of the dismissal when considering if there was a valid reason for dismissal.[37]”[38]
Applicant’s Opening Reply Submissions (s.387(a))
In response to the Respondent’s submissions, the Applicant made the following reply submissions:
“8. The ‘Position Description’ appended to the ‘Employment Agreement’ signed by Mr Yap in November 2017, which pertained to his initial engagement as an NTRR, provided that:
(a) his position was a ‘Roadside Responder’
(b) his position corresponded with the Vehicle Industry RS&R tradesperson or equivalent Level 1, R4 of the Vehicle, Manufacturing, Repair, Services and Retail Award 2010.
9. There is no evidence that the ‘position description’ relied on by Club Assist for either the NTRR or TRR position was ever given to Mr Yap. Those appended to Ms Scally’s statement at ‘DS-2’ are not signed by Mr Yap. Nor is there any evidence that Mr Yap was told about or otherwise had access to these position descriptions. It is difficult to see how Club Assist can rely on these descriptors as setting out the function or primary role of Mr Yap’s position as a ‘Roadside Responder’.
10. In any event, the position descriptions do not assist Club Assist and RS [12] elides the description of ‘the role’ of an NTRR or TRR in the position description from the ‘key objectives’ of the role. The purpose of a TRR’s role is described as creating value for Club Assist by:
‘… providing road service and delivering and installing NRMA products to Members and Customers of NRMA in a timely, efficient and friendly manner. The position exists to assist in the overall achievement of service delivery and response times.’
11. In other words, the primary function of Mr Yap’s role was to provide road service and deliver and install products (being batteries) to NRMA customers and members.
12. The reference in the ‘Key Objectives’ to the adherence to ‘all Key Performance Indicators’ says nothing about the lawfulness or reasonableness of those KPIs, or the ability of Club Assist to set such KPIs. The lawfulness or reasonableness of a KPI must be adjudged by reference to conventional principles concerning the lawful and reasonable directions which may be given to employees, which are detailed further below.
13. Further, the reasonableness of a KPI needs also to be assessed in the context of other ‘Key Objectives’, which are overlooked in the RS, including (amongst others):
(a) the requirement to provide ‘Roadside Assistance’ via first service resolution;
(b) the provision of technical related information to NRMA members as required;
(c) the obligation to deliver and install batteries to members and non-members in accordance with Club Assist procedures;
(d) the requirement to ensure that relevant documentation is raised on each job; and
(e) the obligation to complete all compliance requirements.
14. These ‘key objectives’ and those which follow, evince that Mr Yap’s role was focused on the delivery of professional and proper roadside assistance. There is and can be no complaint that Mr Yap achieved all of these principal key objectives throughout his employment. The reasonableness of any KPIs and whether any failure to comply with them grounds a valid reason for dismissal must be assessed in this context.
15. RS [13] fails to note that Mr Yap did not receive a list of KPIs when he commenced employment, nor any training with his Field Manager (or any other manager) in relation to the KPIs he did not achieve.
16. The ‘steps’ referred to in RS [15] which are said to be undertaken when a Roadside Patrol employee does not achieve KPIs are not set out. There is, in fact, no evidence of remedial training being provided to employees, nor any instruction on how to achieve KPIs. A significant issue with the CAPP imposed on Mr Yap and the meetings with Mr Ashton in relation to the CAPP was that on training, no direction or other practical assistance was provided to Mr Yap to assist him in achieving the three KPIs relied on to terminate his employment.
17. RS [16] should be rejected. There is no admissible evidence of any other SLAs or the practices in other States.
18. RS [17] is emblematic of the vice inherent in a good deal of Club Assist’s evidence. The subjective understanding of Mr Kinsella and Ms Scally about what Club Assist’s unnamed and un-identified competitors have in place by way of KPIs is patently inadmissible and bereft of any probative value.
The reasonableness of the KPIs
19. It is elementary that an employee is required to comply with the lawful and reasonable directions of their employer.[39]
20. An employee cannot be instructed to do something that would be unlawful.[40] Hence, an employee cannot be instructed to engage in conduct which would otherwise be contrary to a statutorily prescribed norm of conduct, such as the prohibition under s 18 of the Australian Consumer Law[41] against engaging in misleading or deceptive conduct or make false or misleading statements about the nature of goods contrary to s 29 of the ACL.
21. It is not contended that the KPIs to achieve particular average working times or times on job were unlawful. Rather, Mr Yap’s case is that Club Assist has not established, nor made any proper attempt to establish, that such times were reasonable.
22. The Full Bench of this Commission in CFMMEU v Mt Arthur Coal Pty Ltd [2021] FWCFB 6059 recently described the requirement of reasonableness:[42]
‘Reasonableness is “a question of fact having regard to all the circumstances” and that which is reasonable in any given circumstance may depend on, among other things, the nature of the particular employment. The approach to the task of assessing the reasonableness of a direction to an employee was identified by Dixon J in Darling, as follows:
“But what is reasonable is not to be determined so to speak, in vacuo. The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award governing the relationship, supply considerations by which the determination of what is reasonable must be controlled. When an employee objects that an order, if fulfilled, would expose him to risk, he must establish a case of substantial danger outside the contemplation of the contract of service”.’
23. The reasonableness of the KPIs relied on by Club Assist to ground a valid reason for dismissal is a matter which it bears the onus of establishing. Whilst the application of the concept of legal onus or burden of proof in respect to an administrative tribunal such as the Commission is a difficult one, it is plain that an employer bears the evidentiary onus of establishing a valid reason for dismissal as it is required to adduce the evidence necessary to establish that there was a valid reason for the applicant employees’ dismissal.[43] In assessing whether Club Assist has discharged its onus in this regard, regard must also be had to Lord Mansfield’s dictum in Blatch v Archer [1774] 1 Cowp 63 at 65 that all evidence is to be weighed according to the proof which it was in the power of one side to have produced.
24. It was plainly within Club Assist’s bailiwick to establish, on the basis of objective evidence, that an average working time of 17 minutes was reasonable and proper having regard to the multitude of circumstances which a TRR may face. No evidence establishing how an average working time was computed has been adduced. No evidence establishing what was considered in calculating an average working time of 17 minutes has been led. No evidence as to the variables an NTRR as compared to a TRR may face on a job and how these were considered in formulating an average working time has been adduced. Nor has any evidence been adduced which bears on the reasonableness of the computation of an average working time, or time on job in circumstances where Roadside Patrol employees may be allocated jobs that require them to travel more significant distances from their home base.
25. In the result, the ‘requirement’ to achieve an average working time of 17 minutes per job has not been established by Club Assist to be reasonable. The absence of such evidence in chief by Club Assist entails that the Commission should infer that evidence on these topics would not have assisted it.[44]
26. The notion advanced at RS [18](a) that an employee should notify the NRMA dispatch team if a job is ‘likely to take a longer period’ does not assist Club Assist, given that there is no definition on what a ‘longer period than usual’ is, nor was any training ever given to Mr Yap about what timeframes would trigger the requirement to call dispatch.
27. An obligation to achieve a particular battery conversion rate or warranty rate is manifestly arbitrary. The number of battery sales a Roadside Patrol employee makes will necessarily depend on the quality and serviceability of the batteries in the vehicles they are required to attend. A requirement to achieve a particular battery conversion rate is, in effect, the imposition by Club Assist of an incentive or directive to sell customers new batteries in circumstances where they may not require a new battery. This is an inducement to engage in conduct contrary to ss 18 or 29 of the ACL, and neither lawful nor reasonable. The same applies in relation to replacement of batteries under warranties. A customer cannot be compelled to purchase a new battery. Nor can a Roadside Patrol employee misleadingly or wrongly determine that a battery should not be replaced under warranty. These KPIs are problematic on this basis.
28. It was squarely within its province to establish, on the basis of objective evidence, that a battery conversion rate of 24% and a battery warranty rate of 3.9% were both reasonable and proper having regard to the variety of circumstances a TRR may face in servicing particular jobs.
29. Further, no training was ever provided to Mr Yap in making sales or promoting the purchase of batteries to customers. This is a significant matter indicating that the KPIs concerning battery conversion and warranty rates were not reasonable.
30. Finally, the implicit contention at RS [18](d)(iv)-(v) that Mr Yap replaced batteries under warranty when they were not covered by a warranty is speculative and conjectural. There is no evidence Mr Yap ever did such a thing and he specifically rejects the suggestion.
31. In the result, none of the KPIs were reasonable and cannot properly be relied on to found a valid reason relating to Mr Yap’s capacity.
Club Assist’s ‘capacity’ case
32. The proposition asserted at RS [36] puts the matter too highly. In order for an employee’s failure to adhere to performance criteria to constitute a valid reason for dismissal, the employer must first establish that:
(a) the performance criteria are reasonable; and
(b) the employee’s failure to adhere to the criteria entails that they are unable to do the work they were employed to do, viz. to perform the primary function of their role.
33. For the reasons detailed above, the first limb described above cannot be established.
34. As to the second limb, the three KPIs which Mr Yap did not achieve on a number of occasions cannot, properly assessed, found a sound or defensible basis for his dismissal in circumstances where:
(a) he was employed principally to fulfil the role of a TRR and provide road service to NRMA members and customers and deliver and install products to such members and customers. There is and can be no dispute that he more than satisfactorily fulfilled the principal requirements of his role;
(b) Mr Yap’s departures from the three KPIs relied upon did not have any discernible adverse impact on Club Assist or anyone else;
(c) Mr Yap’s departures from the KPIs were, in any event, explicable by external circumstances; and
(d) Mr Yap’s departures from the KPIs were not, in all the circumstances, so
significant or serious as to warrant dismissal.
35. The dearth of evidence controverting the above propositions underscores the weakness and untenability of Club Assist’s ‘capacity’ case.
36. For the reasons detailed above RS [39] should be rejected as a tendentious representation of the requirements of Mr Yap’s position. It is worth repeating that Mr Yap was never provided a copy of any position description. RS [40] must also be rejected as it is without proper evidentiary foundation.
37. As to RS [41]:
(a) there is no objective evidentiary basis for the assertions set out in RS [41](a). Nor does the submission make any allowance for the variables that an employee will encounter on particular jobs, or the fact that it is the customer’s choice as to whether to purchase a battery;
(b) contrary to RS [41](b), there is not a scintilla of evidence that the average working time has been calculated to take into account job variables, nor were any instructions ever given to Mr Yap as to when to call dispatch when a job would be ‘unusually long’;
(c) RS [41](c) must be rejected as speculative. This matter was, in any event, never put to Mr Yap and he was denied procedural fairness by not being apprised of Club Assist’s concern that he was providing free batteries to customers. This is a serious allegation to which the precepts in Briginshaw v Briginshaw (1938) 60 CLR 336 apply. No such finding is open and the submission must be rejected; and
(d) RS [41](d) is factually erroneous. Mr Yap never requested that this matter be included on his CAPP.
38. The decisions of Friend v Bennett Carroll Holdings Pty Ltd[2014] FWC 1916 and Cristian Vasquez v Cleanaway Operations Pty Ltd[2021] FWC 758 and do not assist Club Assist as the factual matrices of both decisions are a universe away from the present matter.
39. Bennett Carroll concerned an employee engaged as a ‘Senior Commercial Solicitor’. The employee was dismissed for poor performance, including a failure to follow procedures, being the subject of client complaints, not recording time (a cardinal sin for solicitors employed by law firms) and not achieving billable hours which made his continued employment sustainable.
40. Asbury DP found that there was a valid reason for the employee’s dismissal relating to his capacity and conduct given that he had failed to meet billable hours measures and been the subject of complaints from clients. Distinctly from the present matter, the employee had accepted employment on the basis of achieving specified KPIs concerning billable hours. Mr Yap did not accept employment on the basis that he would achieve any of the three nominated KPIs. Further, there is no contention that Mr Yap’s failure to achieve those KPIs meant that his employment was economically unsustainable. Bennett Carroll is, contrary to the RS, useful in illustrating that there was no valid reason for Mr Yap’s dismissal.
41. Cleanaway Operations concerned an employee engaged as a ‘Business Development Manager’. He was responsible for meeting particular sales budgets, targets and KPIs relating to attracting new customers and revenue to the employer. Binet DP noted that the employee had been provided with ‘appropriate on-boarding’ in relation to the KPIs relied on and given training about them. Further, he had experience in business development and it was a core aspect of his job. The case is, therefore, a world away from Mr Yap’s matter. Mr Yap was not provided with any ‘on-boarding’ or training in relation to the three KPIs relied on. Nor were sales a core aspect of his role.
42. Contrary to RS [46], Mr Yap did not accept employment on the basis he was required to adhere to particular KPIs. Further, the propositions set out in RS [46](b)-(c) lack a proper evidentiary foundation.
43. The ultimate question is whether Mr Yap had the ability to do the job he was employed to do, as detailed in Crozier v Palazzo Corporation Pty Ltd [2001] FCA 1031 at [14]. He plainly did so. There was, therefore, no valid reason based on capacity.
Club Assist’s ‘conduct’ case
44. Club Assist has raised, for the first time, at RS [25] and [50] that Mr Yap’s conduct in ‘refusing to engage with the CAPP and/or CA’s KPI’s’ and displaying an allegedly poor attitude or engaging in belligerent or rude behaviour towards his manager and Club Assist generally constitutes a valid reason for his dismissal. Club Assist cannot now rely on this asserted conduct, as it has waived its capacity to do so. In any event, there is no substance whatsoever to these post facto contentions.
45. The principles of waiver or condonation were summarised by Gillard J in Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 as requiring that an employer with full knowledge of the employee’s misconduct determines not to dismiss the employee for that misconduct.[45] The result is that the employer will have deliberately abandoned its rights to rely on that misconduct to justify any subsequent dismissal.[46] Whether a waiver has occurred is a question of fact.[47] These principles have been applied by the Commission in assessing conduct able to be relied upon by an employer to ground a valid reason for the purposes of s 387(a) of the FW Act.[48]
46. Club Assist was, plainly, aware of Mr Yap’s asserted conduct in regard to the CAPP and the KPIs prior to his dismissal. This was not after acquired knowledge which, it is uncontroversial, an employer can rely on to justify a dismissal.[49]
47. The evidence relied on at footnote 85 as detailed in RS [53] underscores that Club Assist was aware of the conduct and elected not to rely on it. The evidence is, in any event, self- serving and a post facto rationalisation not reflected in the contemporaneous record of the reasons for Mr Yap’s dismissal.
48. Club Assist determined not to dismiss Mr Yap for this (asserted) conduct. In the circumstances, it waived its right to rely on this conduct and the conduct is unable to be relied on by it as grounding a valid reason for dismissal.
49. In any event, the conduct asserted has been misrepresented and mischaracterised and cannot constitute a valid reason for dismissal.
50. The principles concerning valid reason can be shortly stated. First, a valid reason is one which is sound, defensible and well-founded; and not capricious, fanciful, spiteful or prejudiced. Second, when the reason for termination is premised on alleged misconduct the Commission must determine: (1) whether the misconduct occurred and what it involved; and (2) whether the conduct justified the termination. In respect to (2), there will not be a valid reason for termination if the conduct occurred but did not justify the termination.[50] Third, the employer bears the onus of establishing that there was a valid reason for dismissal.[51]
51. Selective comments made by Mr Yap as apparently recorded by Mr Ashton (who Club Assist has not called to give evidence) and recorded a-contextually during the course of meetings concerning the CAPP and the KPIs cannot constitute a valid reason for dismissal. Mr Yap did not agree to Mr Ashton’s recitation of their discussions and did not sign the documents prepared by Mr Ashton for this reason. The documentation cannot, therefore, be relied upon to establish that Mr Yap said the things asserted or said them in a context which was indicative of belligerence or misconduct of any particular kind.
52. The performance improvement process was neither a well-structured, nor assistive one. No training or direction was given to Mr Yap by Mr Ashton. It appears that Club Assist had implemented no structures or procedures to assist employees to meet KPIs, apart from telling them they were not meeting KPIs and instructing them that they needed to do so. Comments Mr Yap made about a departure from Club Assist’s business were the product of frustration at a process which was circuitous and appeared to be going nowhere. Mr Yap also felt (reasonably in the circumstances) that the process was geared to result in his dismissal. Further, Mr Yap was entitled to raise concerns about the KPIs and the reasonableness of the requirements they purportedly imposed.
53. Even accepting that the comments asserted at RS [25] and [29] were made by Mr Yap, they cannot be said to be sufficiently serious to justify dismissal. They were comments made by him during a performance process that was protracted, unstructured and in which Mr Yap was not provided any tangible assistance in achieving outstanding KPIs.
54. To the extent the matter asserted at RS [26] is relied on to ground a valid reason for dismissal, it must be rejected as it is premised on impermissible hearing and, in any event, not accepted by Mr Yap.”[52]
Applicant’s Closing Submissions (s.387(a))
The Applicant made the follow closing submissions in relation to s.387(a):
“The KPIs generally
8. Club Assist’s case rises and falls, in large part, on the three KPIs it asserted Mr Yap failed to adhere to. Mr Yap raised as a threshold issue in his outline of submissions at [27]-[29] that there was no evidence indicating the basis on which the KPIs had been determined and whether they were the result of any objective or impartial analysis. No evidence was adduced to substantiate the objective validity or appropriateness of the KPIs. This was evidence (if it existed) which was peculiarly within Club Assist’s knowledge. It elected not to lead any evidence to justify or legitimise the KPIs beyond Mr Kinsella’s broad assertions at [18] to his statement that the KPIs stemmed from the SLA. That SLA was not appended to any statement filed by Club Assist and was only produced under an order made pursuant to s 590 of the FW Act. It revealed that but for the Battery Conversion Rate KPI, none of the other KPIs had their genesis in the SLA. For the reasons detailed further below, the Battery Conversion Rate KPI was, in fact, two pronged and Mr Yap only just fell under it in relation to ‘battery jobs’ in the period May 2020 to May 2021.
9. Further, there was no evidence that Mr Yap ever received, when he commenced the position as a TRR, the position description requiring him to adhere to KPIs. Mr Yap’s evidence was to the contrary and should be accepted. There is a threshold issue which remains un-addressed by Club Assist as to how the KPIs were imposed as lawful and reasonable directions in respect to Mr Yap after he became a TRR. In any event and as the Full Court of the Federal Court made plain in Crozier v Australian Industrial Relations Commission [2001] FCA 1031, the question in a capacity case is whether the employee has the capacity (or ability) to do their job. Mr Kinsella described Mr Yap’s job as follows at PN937:
Mr Yap’s not employed as a salesman specifically. So if I could just outline a
roadside patrol is basically emergency breakdown and provides a service of we’re getting members moving again. And, again, principally 50 per cent of jobs they go to are related to batteries. They are trained on how to use a battery tester and they are trained on the technology of batteries and what causes issues with batteries in regards to longevity, maintenance, use of battery et cetera. So we don’t train our staff on specific sale tactics. It’s effectively a member service…
10. There was and can be no complaint that Mr Yap did not discharge his duties properly and capably in providing emergency breakdown and repair services to NRMA members. None of the KPIs relied on bear on whether he was able to discharge his job in this regard. Club Assist’s case must, therefore, fail as it does not and has never grappled with the requirement that any lack of capacity be directed to the job Mr Yap was employed to do.
11. Further, any belated and post facto reliance on conduct issues concerning Mr Yap’s attitude must be rejected. Mr Kinsella’s evidence sounded the death knell for such a case when he said that Mr Yap was not terminated for misconduct and accepted that no regard should be had to any assertion that he was. Mr Yap’s evidence at [37] to his reply statement that his attitude was never identified as being problematic or in need of rectification was not undermined in cross-examination. It should be accepted. Mr Yap’s alleged poor attitude, which was missing entirely from the show cause letter and termination letter should be viewed by the Commission as an after the event concoction by Club Assist to rationalise the termination. It is not, in any event, something which can rationally ground a valid reason for dismissal. This is particularly when the KPIs relied on are assessed.
12. A number of matters should be noted in relation to the KPIs generally.
13. First, Mr Kinsella acknowledged in cross-examination the obvious deriving from the spreadsheet he had compiled which was attachment PK-3 to his statement: that, on average, employees of Club Assist did not meet the Average Working Time KPI or the Battery Conversion Rate KPI. Club Assist’s position in this case is, therefore, a curious one: it terminated Mr Yap for not complying with two KPIs (being the Average Working Time and Battery Conversion Rate) that his fellow employees on average did not achieve and, in the case of Average Working Time, had never achieved in the period June 2020 to July 2021. Overall, Club Assist’s employees’ performance was, as Mr Kinsella conceded, ‘sub-par’ in relation to these KPIs.
14. Second, the Average Time on Job KPI was not applied to any employee other than Mr Yap. Mr Kinsella, in a manner unfortunately characteristic of some aspects of his evidence, did not disclose this in his statement. How a KPI can be sensibly relied on when it is not uniform but is applied solely to an employee is unclear and has never been explained by Club Assist.
15. Third, Mr Kinsella had stated at [42] to his statement that PK-3 contained data relating to workers in Club Assist’s business in New South Wales and who reported to Mr Yap’s SSM. He walked back his evidence in cross-examination when it was pointed out to him that at no point had Club Assist met the 17 minute Average Working Time KPI or the Battery Conversion Rate KPI required by its client NRMA, by stating that the figures in PK-3 concerned employees of Club Assist only and said that Club Assist had met its obligations under the SLA because it engaged contractors who were more efficient and had not (for reasons that were never explained) been included in PK-3. It is noted that in relation to the Average Working Time KPI, which was stipulated to be 17 minutes, on average employees in New South Wales generally and those who were peers of Mr Yap with the same SSM did not achieve this KPI.
16. Fourth, the reliability of Mr Kinsella’s figures as inputted into the amended version of PK-3 is questionable. Mr Yap’s lawyers were served with an amended version of PK-3 on the eve of the hearing. Mr Kinsella acknowledged that he had made over 30 errors in the original version of PK-3. Notwithstanding the revised version of PK-3 there were discrepancies between the KPIs for Mr Yap as recorded in the Monthly Performance Review documents provided to Mr Yap and the figures included in Mr Kinsella’s table.
17. Fifth, the only KPI which derived from the SLA was the battery conversion KPI. Mr Kinsella’s attempts to link the average working time KPI and the Battery Warranty Rate to provisions of the SLA were, as detailed further below, unsound, conjectural and without basis.
18. Sixth, Mr Kinsella misrepresented the position arising under the SLA at paragraph [18] of his statement. He there set out that KPIs related to matters such as Battery Conversion Rate and Battery Warranty Rate. No KPI for Battery Warranty Rate appears in the SLA and Mr Kinsella’s belated attempt in further evidence in chief to contend that that KPI derived from other provisions of the SLA was untenable and plainly geared to rationalising this KPI which has no direct connection to the SLA.
19. Seventh, Mr Kinsella’s evidence in his statement was misleading as he failed to distinguish between ‘Critical Service Levels’ and ‘Required Service Levels’ under the SLA. The former permitted the NRMA to terminate the SLA on immediate notice under clause 8.2.2. The latter only permitted NRMA to implement the corrective action set out in the Operations Manual. No evidence was led by Club Assist in relation to this Operations Manual. This was evidence it would have been available for it to lead. An inference can and should be drawn of the kind described by Handley JA in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419 against it that such evidence would not have assisted its case.
20. Eighth, Mr Kinsella also stated that a failure by NRMA to comply with the SLA would entail it was open to it to terminate it at [18]. That was untrue. Clause 8.2.1 of the SLA only permitted NRMA to take (unspecified and unproved) corrective action if there was non-adherence to a Critical Service Level. Mr Kinsella properly agreed at PN579-580 that he had misrepresented the position at [18] to his statement, although he partially qualified this by saying that he did not agree ‘with all of your statement’ at PN580. This is a matter which undermines Mr Kinsella’s reliability and credit generally but also exposes the flawed nature of the KPIs relied on by Club Assist. They did not properly relate to or stem from the SLA.
21. Ninth, and most critically, there was no evidence that a failure to achieve any of the nominated KPIs had had any adverse (or any) effect on Club Assist including in relation to its relationship with the NRMA. The asserted non-achievement by Mr Yap of the KPIs therefore did not impact Club Assist in any material way. Had it done so, Club Assist would have adduced evidence of such adverse affectation.
Battery Conversion Rates
22. This KPI was subject to a number of variables, the most fundamental of which was that, if a patrol officer attended a job which was not battery related or otherwise did not involve a battery that needed to be replaced or which the customer wanted to be replaced by Club Assist, a battery sale could not occur. Hence, achievement of the Battery Conversion Rate KPI was dependent on chance. It was not a true or proper measurement of the performance of a patrol officer. It must be rejected as a basis for establishing that Mr Yap was incapable of performing his job as a TRR on this basis alone.
23. Further, NTRRs and TRRs were allocated differing numbers of ‘battery jobs’, being jobs where an issue had been identified with a member’s battery (which may or may not require the battery to be replaced).
24. In regard to ‘battery jobs’, being jobs, Mr Kinsella helpfully explained at PN587 that:
… we have nontechnical and technical patrols, obviously a nontechnical patrol would go to a lot more battery jobs, and a technical patrol would go to potentially a different mix…
25. In other words, it would be easier for an NTRR to achieve the Battery Conversion Rate KPI given they would be allocated more jobs where battery issues occurred. The figures set forth in PK-3 in relation the Battery Conversion Rate (which disclosed that but for the months of June to August 2021, Club Assist’s employees in New South Wales did not meet the KPI provided under the SLA), made no distinction between NTRR and TRRs.
26. There was, therefore, no assessment done in relation to the position of TRRs as compared to NTRRs in respect to this or any other KPI. The KPIs were, therefore, unfair and cannot be seen to be a proper reflection of the job performed by Mr Yap as a TRR (presuming that he was, as a matter of contract, required to adhere to them).
27. It is unclear why this KPI, which was not included in the show cause letter and not mentioned in the termination letter, is relied on by Club Assist. Mr Kinsella accepted at PN937 that Mr Yap had never received training in how to sell batteries and the training scheduled tendered by Club Assist, being Exhibit R1, demonstrates that Mr Yap never received any training in relation to the achievement of this KPI or on how to deal with customers and sell batteries to customers.
28. As Mr Kinsella detailed at PN937, Mr Yap was not employed to sell batteries but to provide NRMA members with a service so they could get their vehicles back on the road. There was no complaint that Mr Yap did not provide a sound and appropriate service to NRMA’s members who he serviced. In other words, he was well able to perform his job and Club Assist’s capacity case must fail.
29. Further, the SLA provided two measures for the Battery Sales Services Standard, being ‘all job codes’ and ‘battery job codes’. The former ‘job codes’ had to produce a 25% conversion rate, whilst the latter battery jobs had to produce a 50% battery sales rate. In other words, there was a recognition that the fewer battery jobs one attended, the less chance there was of achieving a high battery conversion rate. Mr Yap was calculated by Mr Kinsella at [112] to his statement (as amended during his evidence-in-chief) of having on 4 occasions achieved this KPI in the months from July 2020 to August 2021.
30. This was flawed and misleading. Mr Yap had achieved a 50% sale rate for battery jobs in the following months:
(i)May 2020, when of the 91 jobs he attended, he made 50 battery sales;
(ii)June 2020, when of the 84 battery jobs he attended, he made 43 battery sales;
(iii) November 2020, when he attended 68 battery jobs and made 34 sales;
(iv) February 2021, when he attended 60 battery jobs and made 32 sales;
(v) March 2021, when he attended 69 battery jobs and made 42 sales;
(vi) May 2021, when he attended 84 battery jobs and made 51 sales.
31. Further, in the period May 2020 to May 2021, Mr Yap attended 936 battery jobs and made 464 battery sales. That is, on 49.6% of the battery jobs he attended, he made a sale. In other words, assessed over that 13-month period he only just fell below the KPI set out in the SLA. This exercise indicates the artificial and misleading nature of this KPI and the way it has been portrayed by Club Assist.
32. Moreover, in that same period, he attended 2,200 jobs. Of these, 936 were jobs were an issue with a battery was involved. Hence 42% of his jobs only were battery jobs. No data was adduced by Club Assist demonstrating that on any particular job or jobs Mr Yap performed that was a battery job that Mr Yap should have made a battery sale. There was, for instance, no data on how many of these jobs involved jump starts or how many involved batteries under warranty of how many of these members who may have needed a new battery refused to buy a battery from Club Assist.
33. For the above reasons, the KPI was flawed as it was subject to a significant number of variables, made no account for the difference between the type of jobs allocated to TRRs and NTRRs, was not a matter on which Mr Yap was trained and was not, in any event, a core or even important part of his job as a TRR. This may explain why it was not relied on by Club Assist in its show cause letter. There was no satisfactory explanation as to why it was not and why it was otherwise only raised after Mr Yap had filed his evidence. It is perhaps telling that it does not appear in Club Assist’s Form F3 Response.
Battery Warranty Rates
34. Mr Kinsella sought to tie this KPI to Service Standard 13 in the ‘Required Service Levels’ aspect of Schedule 5, being the Battery Conversion Rate KPI as ‘if a battery is given a warranty there’s a potential sale lost at that point’. He also sought to tie it to Service Standard 6 which refers to ‘Member Feedback’ and is measured by ‘Average Member Satisfaction’.
35. Both these asserted connections must be rejected. First, if a battery is within warranty there will be no missed sale opportunity. Rather, the battery will be covered by a warranty and Club Assist (presuming it intends to act consistently with its obligations under ss 18 and 29 of the Australian Consumer Law) would expect its employees to ensure they provide a new or replacement battery consistently with the warranty. Second, the KPI can only sensibly relate to member satisfaction insofar as a member would, presumably, be dissatisfied if they were entitled to have a battery replaced under warranty and were convinced they ought buy a new battery. Perversely, the KPI measurement in requiring patrol officers to ensure that only a certain proportion of batteries are provided under warranty, incentivises patrols to sell batteries that otherwise ought not be sold but should be replaced under warranty. In any event, there was no evidence that there had ever been any complaints concerning Mr Yap in relation to replacement of batteries under warranty or his conduct in adjudging warranties generally.
36. The Battery Warrant Rate KPI was the percentage of batteries that a roadside patrol officer sold as compared to those which were replaced under warranty.
37. Mr Yap’s evidence on the variables inherent in this KPI at [44]-[49] was not challenged and should be accepted by the Commission.
38. Mr Kinsella accepted that whether the Battery Warranty Rate could be achieved would depend fundamentally on the warranty of the member being serviced and whether the particular faulty battery was, in actual fact, under warranty. In other words, achievement of this KPI was entirely random and by chance.
39. Club Assist’s case faltered completely on this ground, when it was exposed that its thesis that Mr Yap had been replacing batteries under warranty was (oddly) not one premised on Mr Yap misconducting himself but acquiescing to the demands of customers and determining to not have difficult conversations (which Mr Kinsella unusually said was not a form of misconduct).
40. Mr Yap specifically rejected any suggestion he had ever engaged in any such practice. Most significantly, there was no evidence that Mr Yap had ever inappropriately replaced a battery under warranty that was not, in fact, under warranty. Club Assist’s case on this ground (which was, in truth, an allegation of serious misconduct) was entirely speculative and without evidentiary foundation. Remarkably, Mr Kinsella who was responsible for levelling such a serious allegation against Mr Yap, said that he had made no attempt to determine any particular instance where Mr Yap had replaced a battery because he did not wish to have a difficult conversation with a customer.
Average working time
41. Mr Kinsella accepted that working time on a job depends fundamentally on the nature of the job and that jobs necessarily varied in length, including in relation to the difficulties in relation to the particular jobs.
42. The flawed nature of this KPI is exposed when it is compared to the ‘JPH’ KPI which Mr Kinsella included in his annexure PK-3. Jobs per hour is, as its name suggests, calculated by dividing the number of jobs a road patrol officer performs by the time they spend working. Mr Yap performed, on average, more jobs per hour than peer patrols from the same SSM and in New South Wales more generally.
43. Mr Yap’s superior productivity, and the benefits accruing to Club Assist from it, can be demonstrated by the following simple example. Presuming an average working week of 38 hours and an average of 48 working weeks per year, a roadside patrol officer would work 1,824 hours in a year. The average jobs per hour completed in New South Wales in the period July 2020 to August 2021 was 0.9, whilst for per patrols with the same SSM it was 0.89. Mr Yap’s was 0.93. Mr Yap would, over a year, perform some 1696 jobs over a year. On average in New South Wales, other road patrol officers would do 1641 jobs. In other words, Mr Yap would service 55 jobs a year more than average. In respect to his peers with the same SSM, Mr Yap would perform 73 more jobs per year (being the difference between 1,696 and 1,623). The notion, advanced in submissions by Club Assist and postulated (unresponsively) by Mr Kinsella in cross-examination that Mr Yap was performing 20% less work than everyone else is exposed as fallacious. It should also be noted that Mr Kinsella acknowledged that jobs per hour were an indicator of a driver’s productivity.
44. Mr Kinsella had no credible response as to why Mr Yap’s JPH KPI was as high as it was. He candidly said that he could not explain it. He then, unimpressively, asserted that Mr Yap’s JPH KPI might be the result of him working extra overtime. That evidence was non-sensical, self-serving and must be rejected.
45. Further, JPH was, clearly, a far more objective and rational measurement of productivity than average time on job which, for reasons described in Mr Yap’s statement at [34], [37], [39] and [41]-[43] (which were not challenged in cross-examination and should, therefore, be accepted) is flawed and unfair, given the various variables involved.[53] Curiously, the JPH KPI was a KPI that Club Assist kept secret from patrol officers. Mr Kinsella said that Mr Yap would not have known what his jobs per hour were as it was a KPI that was not shared with drivers.
46. Reliance on this KPI was flawed and cannot sustain a valid reason for dismissal.
Average time on job
47. No reliance can sensibly be placed on this KPI given that it was not general and was solely imposed on Mr Yap.
48. It is also wrong that Mr Yap asked this KPI be applied to him. His evidence was clear: he asked Mr Ashton to include details of his average time on job at [29] in his reply statement. This was not challenged in cross-examination. It should be accepted. Further, the notion that an employee would volunteer a KPI which they could be sacked for if they did not achieve it is intuitively unsound.
49. The flaws in this KPI, identified by Mr Yap in his statement at [32]-[43] were not challenged in cross-examination and should be accepted by the Commission. As compared to JPH, it is not an appropriate or accurate measure of productivity. The incongruity between the results of this KPI and Mr Yap’s JPH indicates that this is a flawed and faulty measure.
50. The Commission should reject any reliance on this measure as a KPI reflecting Mr Yap’s ability to do the job he was employed to do.
Mr Yap’s alleged poor attitude
51. Club Assist’s case premised on Mr Yap’s asserted poor attitude must be dismissed. Mr Yap denied that he did not try to achieve the KPIs. His evidence was to the contrary. He also specifically denied that he had ever exhibited a bad attitude or that this had ever been raised with him as an issue. The objective evidence supports this. Nowhere in the show cause letter or in the termination letter is his alleged poor attitude mentioned. Indeed, the show cause letter notes that there had been improvement in a number the KPIs, albeit a decline in others.
52. The notion that a subjectively perceived ‘bad attitude’, in and of itself, can found a valid reason for dismissal is without merit. There is no basis for thinking that a negative attitude, without more, can amount to a sound, well-founded or justifiable reason for dismissal
53. Further, Club Assist did not call any manager who had ever been privy to Mr Yap displaying a ‘bad attitude’. Rather, its case was inferential and conjectural and based off notes written by Mr Ashton who, as accepted by Mr Kinsella in chief as being ‘factually correct’, was disciplined for being too eager to progress Mr Yap’s disciplinary process. Whilst Mr Ashton was no longer in its employ at the time of the hearing, it did not seek to establish that he was unavailable or unwilling to give evidence for it. It could have sought an order under s 590 for Mr Ashton to appear to give evidence. It failed to do any of these things and based its case in this regard on the speculative musings of Mr Kinsella. Its case in this regard must be rejected.”[54]
Respondent’s Closing Submissions (s.387(a))
The Respondent made the follow closing submissions in relation to s.387(a):
“13. Having regard to the matters set out in Part B herein, the FWC must determine whether the Respondent had a valid reason for dismissing the Applicant. For the reasons set out below (and in the Outline), the FWC should have little difficulty in concluding that the Respondent had a valid reason to dismiss the applicant, on the basis of his sustained poor performance.
Summary valid reason – performance – failure to achieve KPI’s
14. It is trite to say, but bears repeating, that a sustained failure to achieve performance criteria represents a valid reason for termination of employment. This includes failure to meet critical KPI’s.[55] Whilst the Applicant is at pains to distract the FWC from this reality, it cannot be escaped.
15. The Respondent terminated the Applicant’s employment after a sustained period of underperformance stretching about 18 months. During this time, the Applicant failed to achieve critical KPI’ and, most significantly, substantially underperformed compared to his peers (the evidence which clearly supports this conclusion is set out at paragraphs 36-57 below).
16. The Respondent cannot have been expected to retain the employment of an extremely underperforming employee,[56] especially once it had exhausted all avenues to improve his performance and it was apparent that his performance had not and would not improve to the level required.
Mischaracterisation of Respondent’s case
17. The Respondent’s position in respect of valid reason is clear (as summarised above). However, at the Applicant’s Closing Submissions mischaracterise the Respondent’s defence to this Application, and the task for the FWC, in two critical ways.
18. Firstly, the burden does not lie with the Respondent to positively establish that the KPI’s it sets for its workforce are reasonable, appropriate and/or not “flawed” in any respect.
19. It is uncontroversial that it is within a business’s managerial prerogative to establish key performance metrics for its workforce,[57] and that a sustained failure to meet performance criteria constitutes a valid reason for dismissal.[58]
20. Thus, the submission that as a “threshold issue” the Respondent must positively establish that its KPI’s are objectively reasonable or appropriate cannot be accepted, as a matter of principle or law.
21. Indeed, there is no support for the proposition that the Respondent must go so far as to adduce evidence regarding how its business KPI’s were determined, or any other matter, in order to satisfy the FWC that an employee's sustained failure to meet KPI’s or at least perform at a level comparable to his peers in respect of those KPI’s, constitutes a valid reason for dismissal [c.f. ACS.8].
22. If the Applicant wishes to submit that the Respondent’s KPI’s are somehow so capricious or unreasonable such that a sustained failure to achieve them cannot form a sound, defensible or well-founded reason for dismissal, then the burden is on the Applicant to prove that to be so.
23. Plainly, the Respondent’s KPI’s were not patently unreasonable or capricious, and certainly not unlawful. So much is clear from the simple fact that all other workers achieved or almost achieved the KPI’s consistently. Further, the KPI’s were similar to the standard KPI’s set for workers across the industry. The inquiry into the Respondent’s KPI’s ends there.
24. Notably, the Applicant’s Outline of Submissions (AOS) cites no authority in support of the proposition that a employer dismissing an employee for poor performance against KPI’s must first establish that the KPI’s are reasonable [AOS.32(a)]. To the contrary, in previous FWC decisions involving dismissals for a failure to achieve KPI’s, there has been no suggestion that the FWC must first examine an employer’s KPI’s and positively determine that they are reasonable or appropriate for that business or workforce.[59]
25. Indeed, to adopt such an approach would lead to the absurd and undesirable consequence that the FWC may be required to determine the appropriateness of KPI’s in all kinds of businesses and industries, which would be an excessive interference with an employer’s management of its own business affairs.
26. Accordingly, the Applicant’s attempt to turn this proceeding into an examination of the Respondent’s business and how or why it develops its performance metrics ought to be rejected. This Application is about Mr Yap’s employment, Mr Yap’s extremely poor performance, and ultimately, Mr Yap’s dismissal.
27. Secondly, a failure to follow an employer’s reasonable or lawful direction is a matter that is only relevant when an employer asserts a valid reason for dismissal relating to conduct i.e. a failure by an employee to follow a reasonable or lawful direction.[60]
28. The Respondent does not assert that the Applicant’s failure to achieve the KPI’s amounted to a failure to follow a reasonable and lawful direction, amounting to misconduct. The Respondent submits, as it always has, that the Applicant’s failure to achieve the KPI’s formed a valid reason for dismissal relating to his poor performance and therefore capacity.
29. In cross examination Mr Kinsella adamantly resisted the repeated suggestion that the Applicant’s failure to achieve the KPI’s, specifically the battery warranty rate KPI, amounted to serious misconduct. Mr Kinsella was steadfast that the Respondent considered this to be a performance issue.
30. Thus, again, no “threshold issue” arises as to whether the KPI’s were imposed as lawful or reasonable directions [c.f. ACS9].
Alternatively, KPI’s reasonable
31. If the FWC nonetheless determines it necessary to positively conclude that the Respondent’s KPI’s are reasonable and appropriate (which for reasons above, it need not), they are nonetheless clearly reasonable for the reasons set out in the Outline, including most pertinently that (a) all of the Respondent’s other roadside patrol workers in NSW managed to achieve them, or almost achieve them consistently, and (b) the Respondent’s KPI’s reflect a standard expectation across the industry.
129. I am also deeply troubled by the poor attitude displayed by the Applicant during his employment. Not only did he demonstrate an unwillingness to engage in the
performance management plan/monthly KPI meeting feedback discussions, he was frequently rude and belligerent towards his manager, and made negative comments
about the Respondent to other employees.130. Employees achieving the KPIs are critical to maintaining the NRMA contract. As such, should levels of performance similar to the Applicant's be allowed across the business, there would be a real risk that the SLA requirements would be impacted and the NRMA contract would be lost, resulting in the termination of the entire Roadside Patrol workforce.
131. I note that the Applicant seeks reinstatement in this Application. I strongly oppose this. I have no trust and confidence in the Applicant. I do not believe that he would be willing or able to perform the role to the standard required, including by working towards consistently achieving the KPI’s which he does not accept, but are critical to the Respondent’s business. Further, I have no confidence that he would be receptive to any feedback provided to him or performance management that would be required in relation to any aspect of his performance, as he has demonstrated a consistently unwillingness to engage in these processes.
132. Further, the Applicant’s poor attitude, thinly veiled threats and rude comments have further irreparably damaged the relationship between Club Assist and the Applicant.” [129]
Mr Kinsella also gave the following oral evidence (in-chief) in relation to the Applicant’s reinstatement:
“Has this restored your confidence in Mr Yap's ability to achieve those KPIs if he were to return?
I would probably start by saying that this process has been very long, and we've had a very - we've been going over 14 months so there's a significant amount of time and effort gone into working with Mr Yap in regards to helping him understand how to meet his KPIs and he consistently missed them more often than not. The feedback I've received from numerous staff members who were involved and from HR and Mr Ashton, Mr Richardson, and Mr Dale in regards to the way he behaves in any way, shape or form fail to meet the values of the organisation. The comments that you would see in the exhibit documents are, to be really frank, belligerent and rather hostile towards, not only Mr Ashton, the organisation and myself. It's not the culture of an organisation that we would like, and nor the culture that we would want from our roadside patrol members. Look, I'm also of the firm belief that if all our patrols behaved in the way that Mr Yap behaves in regards to his aversion to even trying to work towards hitting his KPIs we wouldn't have a contract with NRMA, and we'd risk losing the entire workforce, so I fail to see how him coming back under a different line manager would make any difference to his performance, so, no, I don't believe for a second that he would be able to achieve his KPIs, because he's demonstrated over a protracted period of time he's unable to do so. And I guess then and finally the role itself in that area that it was in has actually now been replaced over the past couple of months, so even if we were to be able to consider to reinstate that it would not be anywhere near, and when I say nowhere near, it would probably require at least a two hour drive to get to the nearest location. But to say that the trust relationship is irrevocably broken would be just a complete understatement, in my view, given the amount of effort and time that we've spent at all levels of management in regards to trying to help him meet his KPIs.
Thank you, Mr Kinsella. And did Mr Yap - did you manage Mr Yap?
Not directly. But from a - I have a regular - a weekly
MR BONCARDO: I object. This is not in reply. I'm sorry, I went too late. The witness can finish his answer.
THE DEPUTY PRESIDENT: Thank you.
THE WITNESS: I'm sorry, sir. So
MR BONCARDO: Please continue.
MS DUTHIE: Sorry, Mr Kinsella, finish your answer about whether - the question was whether you manage Mr Yap?
No, I don't manage Mr Yap directly. I have indirect reports across the business and they report through on my reporting lines. The roadside operations manager, Mr Dale, reports directly to me anybody who's in a - on an ongoing CAP is obviously discussed on a regular basis and I have weekly calls with my HR team, Ms Galle and Mr Ketticue before that, in regards to it, so anybody - I do take a keen interest in understanding where we are with employees that are on CAPs. In this instance it's the roadside business. There was only one person on a CAP, or, sorry, a corrective action plan, during the period, and that was Mr Yap, but if there are any others I'm made aware of those and I monitor them carefully. So, before actually we actually put people on these plans that would normally be discussed with myself, so I'm well aware of, at least for the discussions with Mr Yap had through the CAP, at least through reading the documentation and then obviously at different times meeting with Mr Dale, and then informally discussing them with - or formally, depending on the meeting, with Mr Ashton in regards to how he was progressing, and how the general CAP was progressing across the period of time.” [130]
In cross-examination, Mr Kinsella relevantly made the following concessions:
· he has only ever met or communicated with the Applicant two to three times; and
· he has never personally discussed KPIs with the Applicant, or discussed with the Applicant his state of mind in relation to working at the Respondent.[131]
Mr Kinsella’s assessment of the Applicant, including his character and performance, has been based upon reviewing the Applicant’s KPI sheets, and pursuant to feedback he has received from the Applicant’s former direct manager, Mr Ashton. In this regard, Mr Kinsella stated:
“… So you're inferring that I'm making my decision – my determination without any sort of research and I think there's enough information in my evidence and Mr Ashton's KPI sheets are as comprehensive as they come in regards to the way in which Mr Yap behaves. When people make comments like, 'Just pay me out.' That does not indicate to me that there will ever be any sort of – if he loved working for Club Assist in the way that he infers – why on earth would you be saying, 'Just pay me out to get me out of here.' Now, suddenly he wants to be back in again. It doesn't look like he has any indication that he wants to actually come back and work.”[132]
Working on the assumption that the Applicant respects the Respondent, its management, and desires to always do his best to achieve his KPIs, Mr Kinsella made this response to the question of the Applicant’s reinstatement:
“If you assume those matters you would agree that your view as to whether or not the employment relationship could be re-established would be a different one? No, I do not. He has had every single opportunity. In fact he has had far more opportunities that I believe we should have given him over the past 14 months to change and to meet his KPIs. He's not actually able to meet his KPIs is my – the way I would actually characterise his ability. I don't think he can do the inherent role of a roadside patrol. I think he's an extremely competent technician that could work in a workshop where time constraints aren't the same. But the reality is roadside patrol is a type of work that actually has time constraints on it and he's not capable of fulfilling that.”[133]
The Respondent made the following submissions in relation to the Applicant’s reinstatement:
“75. If the FWC finds against the Respondent and determines the dismissal was unfair (which is denied), then the Applicant should not be reinstated.
76. All trust and confidence has been lost between the parties, and in fact the animosity between the parties has reached such a level that the relationship simply could not be viable and productive.[134]
77. The Applicant himself acknowledged that by the end of his employment, he said that he “no longer found the job appealing.”[135] Ms Scally gave evidence that it was “very clear” the Applicant was “unhappy with the organisation” and he was “very vocal” about that fact.[136] The assertions that the Applicant “loved his job” and is “committed to achieving the KPI’s” are contradictory to the weight of evidence to the contrary,[137] inherently improbable and cannot be accepted.
78. Mr Kinsella, to whom the Applicant as a NSW roadside patrol would indirectly report should he be reinstated[138] gave evidence that he had no confidence at all in the Applicant’s ability to successfully return to the organisation, meet its values or achieve its KPI’s.[139] Mr Kinsella went on to say that “to say that the trust relationship is irrevocably broken would be just a complete understatement”[140]
79. Further, Mr Kinsella explained that the Applicant’s role has in any event been replaced, and there are no similar jobs available within the Respondent’s business within two hours of the hub the Applicant was previously based out of.[141]
The Applicant relevantly made the following submissions in support of the Applicant’s reinstatement:
“56. No weight can, or should, be placed on Mr Kinsella’s opinion evidence about whether Club Assist can have trust and confidence in Mr Yap such that a practicable and working employment relationship can be re-established. Mr Kinsella said he had only communicated with Mr Yap on two occasions,[142] although he thought there may have been a further occasion when he conducted a visit to the Chatswood Hub and met him at some unspecified time.[143] He had never supervised him in his work or trained him.[144] He was based at Club Assist’s head office in New South Wales at Arndell Park rather than at the Chatswood Hub where Mr Yap was worked from.[145]
57. Club Assist elected to call no supervisors whom Mr Yap worked with. Whilst his immediate supervisor had exited Club Assist’s business prior to the hearing, his Senior Support Manager remained employed by Club Assist.[146] Mr Kinsella’s opinion should be accorded no weight. It was an abstract and academic one formed without having ever spoken to or engaged with Mr Yap. The classic analysis of Gray J in AMIEU v G&K O’Connor [2000] FCA 627 is germane to the present case:[147]
The law relating to the need for trust and confidence in an employment relationship was developed at a time when employment invariably involved a close personal relationship between employer and employee. The advent of corporate employers has diminished the importance of this element of the employment relationship. A corporation has no sensitivity. The crucial question must be what effect, if any, loss of trust by a manager in an employee is likely to have on the operation of the workplace concerned. It might be more significant, for instance, to know the name of Mr Voss's immediate supervisor and to know the attitude of that person towards him. If the immediate supervisor had no trust in Mr Voss, it might also be relevant to know whether it would be possible to place Mr Voss in another part of the workplace, under another supervisor, who did have such trust. It would also be relevant to know what effect any lack of trust by any manager or supervisor in a particular employee might have on the conduct of operations in the workplace. There is no evidence as to any of these matters.
58. The asserted loss of trust and confidence in this case is not soundly or rationally based when the KPIs are considered and in circumstances where Mr Yap’s evidence was that he loved his job and was committed to doing his best to achieve any KPIs set by Club Assist.
59. The Commission should reinstate Mr Yap and make orders for full back-pay.”[148]
In their closing submissions in reply, the Applicant provided the following further submissions regarding remedy:
“61. RCS [76] should be rejected. Logically, if the Commission finds the non-achievement of the nominated KPIs did not ground a valid reason for dismissal, there can be no suggestion that reinstatement is inappropriate. If the Commission concludes, for the reasons detailed in paragraphs [54]-[60] above, that the dismissal was procedurally unfair and/or harsh in light of the nature of the KPIs and Mr Yap’s non-achievement of them, there is also no logical basis for refusing reinstatement.
62. RCS [77] should be treated with caution as it fails to read Mr Yap’s evidence in context. Mr Yap stated in July 2020 that he no longer found the job appealing.[149] That remark was uttered in a context where Mr Yap was frustrated by the process he had been subject to.[150] Ms Scally’s evidence about her opinions about Mr Yap’s views about his job are entirely inadmissible. She never spoke to him about such matters and inferred Mr Yap’s state of mind from what she had read as written by Mr Ashton and others.[151]
63. Mr Kinsella’s views about Mr Yap’s reinstatement are irrelevant given he will not be supervising him. In any event, they lack a rational or proper basis, particularly in light of Mr Kinsella’s failure to ever speak to Mr Yap about his attitude to working at Club Assist.
64. RCS [79] should be rejected. The fact that Club Assist may have replaced Mr Yap is not a barrier to reinstatement. This is an irrelevant consideration in determining whether reinstatement is appropriate and the Commission should make an order under s 391(1)(a) reappointing Mr Yap to his previous position. There is no evidence that the position no longer exists or has been made redundant.
65. Mr Yap should be reinstated with full back pay, minus amounts earned.
66. If reinstatement is not ordered, Mr Yap should be awarded compensation up to the statutory maximum.”[152]
Is reinstatement inappropriate?
The Respondent’s case as to reinstatement being inappropriate essentially hinges upon an asserted loss of trust and confidence in the Applicant based upon:
a. the attitude displayed by the Applicant towards his former manager, Mr Ashton, during CAPP and KPI catch-ups; and
b. the Applicant’s repeated failure to meet certain KPIs during his employment with the Respondent, which the Respondent says is highly likely to continue, despite the Applicant’s assertions otherwise.
In Nguyen, the Full Bench of this Commission helpfully identified the following propositions relevant to the impact of a loss of trust and confidence on the appropriateness of an order for reinstatement:
“Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.
Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.
An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.
The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.
The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.”
The Full Bench conclude that, “[u]ltimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”[153]
Having considered the evidence and submissions of the parties, I do not consider that reinstatement of the Applicant is inappropriate, for the following reasons:
a. Whilst I am prepared to find that the Applicant did make the statements attributed to him in Mr Ashton’s notations on CAPP meeting and KPI catch-up sheets,[154] such statements have been regularly made by the Applicant on an on-going basis since July 2020. None of the statements have resulted in the Applicant being counselled or warned, and they were not mentioned in the Show Cause Letter or the Termination Letter. I therefore do not consider that these statements are such that they, in and of themselves, make reinstatement inappropriate, or give rise to any clear conclusion that the employment relationship is no longer viable. Further, nearly all of the statements (of concern to the Respondent) were made to or towards Mr Ashton (who no longer works at the Respondent).
b. The Applicant has not worked with Mr Kinsella in the past, and will not be directly working with, or directly reporting to, Mr Kinsella if he is reinstated. There is no evidence that any immediate supervisor of the Applicant holds (or will hold) the concerns harboured by Mr Kinsella.
c. There is no evidence that any issues associated with the Applicant’s performance, genuine or perceived, have caused the Respondent not to meet its contractual obligations with the NRMA.[155]
d. Whilst the Applicant has failed to meet four of his KPIs over a prolonged period, the evidence is that many of his other KPIs have been met, or are well above the KPI standard.[156] Further, and significantly, all of the Respondent’s roadside patrol officers failed to meet their BC KPI between July 2020 and August 2021, and New South Wales roadside patrol officers have been failing to meet their AWT KPI (i.e. not just the Applicant).[157] The ATOJ KPI is not a KPI that applies universally to roadside patrol employees (i.e. it has only been applied to the Applicant).[158]
e. Mr Kinsella’s evidence as to the Applicant’s performance is very much hearsay, or inferences and conjecture drawn from unmet KPIs. Whilst I do not exclude his evidence on this basis, I do not weigh it towards any conclusive finding of the nature urged upon me by the Respondent concerning reinstatement being inappropriate.[159] The fact is that Mr Kinsella is not aware of any complaints about the Applicant, or dissatisfaction with his work.[160]
f. I accept the Applicant’s evidence that if he returns to the Respondent’s workplace he will do his best for the Respondent and its customers as a TRR roadside patrol officer.[161]
g. For the reasons set out in (a) to (f) above, I consider that a sufficient level of trust and confidence can be restored between the parties to make their relationship viable and productive going forward if the Applicant is reinstated.
Disposition
In all the circumstances, my evaluative assessment is that the appropriate remedy in this matter is an order under s.391(1)(a) of the Act, reinstating the Applicant to the position in which he was employed immediately before his dismissal, namely as a TRR roadside patrol officer.
I also consider it appropriate to make an order under s.391(2) of the Act as to continuity of employment, and an order under s.391(3) as to lost remuneration, being remuneration lost by the Applicant between the date of his dismissal and the date he is reinstated.
A separate order will be issued giving effect to this decision. Should there be any issue or dispute as to the implementation of such orders, or the calculation of lost remuneration, parties have liberty to apply to my Chambers via email to my Associate.
DEPUTY PRESIDENT
Appearances:
Mr P Boncardo, of Counsel, instructed by Mr J Martin of the AMWU, for the Applicant.
Ms T Duthie, of Counsel, instructed by Mr W Marshall and Mr G Klemm, Solicitors, Gadens lawyers, for the Respondent.
[1] I granted permission for both parties to be legally represented in these proceedings on 25 January 2022. I did so taking into account the necessary considerations under s.596 of the Act, specifically having regard to the complexity of the factual and legal contests between the parties, and my determination that the Commission would be assisted in conducting this matter more efficiently with the assistance of legal representation.
[2] Transcript, PN728.
[3] Exhibit A3, at [5].
[4] Ibid, at [11].
[5] Ibid, at [18]-[20], Annexures “YY-1” and “YY-2”.
[6] Ibid.
[7] Ibid, at [18]-[22].
[8] Ibid, at [26].
[9] Exhibit R3, Annexure “PK-2” (notations to CAPP end on 2/10/20). Exhibit A3, at [26].
[10] Exhibit A3, at [26], Annexure “YY-7”.
[11] Exhibit R5, Annexure “DS-3”.
[12] Ibid, Annexure “DS-4”.
[13] Ibid, Annexure “DS-5”.
[14] Ibid, Annexure “DS-6”; Exhibit A3, at [29].
[15]Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (2000) IR 371, at 373.
[16]Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, at 685.
[17]Edwards v Justice Giudice (1999) 94 FCR 561; (1999) 169 ALR 89; [1999] FCA 1836, at [7].
[18]King v Freshmore (Vic) Pty Ltd Print S4213 [2000] AIRC 1019, at [23] to [24].
[19]Crozier v AIRC (2000) 50 AILR 4-488; [2001] FCA 1031, at [14].
[20]See more broadly: Jetstar Airways Ltd v Neeteson-Lemkes[2013] FWCFB 9075; CSL Limited v Chris Papaioannou[2018] FWCFB 1005.
[21] Jurisic v ABB Australia Pty Limited[2014] FWCFB 5835, at [73].
[22] Crozier v Palazzo Corporation Pty Limited (2000) 98 IR 137, at [62]; Annetta v Ansett Australia Ltd (2000) 98 IR 233, at [16].
[23] At [14]. See also Karbowiak v 1000 Mile Travel Group Pty Ltd[2019] FWCFB 8064, at [13].
[24] Gelagotis v Esso Australia Pty Ltd[2018] FWCFB 6092, at [117]; Titan Plant Hire Pty Ltd v Van Malsen[2016] FWCFB 5520, 263 IR 1, at [28].
[25] Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410, at 412; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, at 204.
[26] Applicant’s Outline of Submissions, 14 December 2021, pp. 4-7.
[27] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333 (7 July 1995); [(1995) 62 IR 371, at 373.
[28] See e.g. Ms A v Cth of Australia, represented by Centrelink[2011] FWA 3532.
[29] [2014] FWC 1916.
[30] Ibid, at [73].
[31] Ibid.
[32] [2021] FWC 758.
[33] Ibid, at [128].
[34] Ibid.
[35] Ibid, at [109].
[36] See e.g. Aperio Group (Australia) Pty Ltd (T/a Aperio Finewrap) v Sulemanovski[2011] FWAFB 1436, at [52].
[37] APS Group (Placements) Pty Ltd v Stephen O’Loughlin [2011] FWAFC 5230, at [51].
[38] Respondent’s Outline of Submissions, 24 December 2021, pp. 2-4 and 6-9.
[39] R v Darling Island Stevedoring & Lighterage Co Ltd; Ex parte Halliday (1938) 60 CLR 601, at 621-622; CFMMEU v Mt Arthur Coal Pty Ltd[2021] FWCFB 6059, at [67].
[40] Mt Arthur Coal, at [70].
[41] Being Schedule 2 to the Competition and Consumer Act 2010 (Cth).
[42] At [72].
[43] Advanced Health Invest Pty Ltd v Chan[2019] FWCFB 5104, at [43]; cf Jain v Infosys Limited[2014] FWCFB 5595, at [35]-[36].
[44] Fuge v Commonwealth Bank of Australia [2019] FCA 1621, at [327].
[45] [2001] VSC 150, at [355]-[357], relying on the decision of the Privy Council in Federal Supply Co v Angehrn (1910) 103 LT 150, at 152.
[46] Ibid, at [357].
[47] Ibid, at [358].
[48] See for instance Nyrstar Hobarty Pty Ltd v Cannan[2015] FWCFB 888, at [52]-[54]; Toll Holdings Limited v Johnpulle[2016] FWCFB 108, at [15]; Ashley-Cooper v Palm Beach Motor Yachts Co Pty Ltd[2019] FWC 8305, at [6]-[10].
[49] See generally: Shepherd v Felt and Textiles Australia Pty Ltd (1931) 45 CLR 359, at 377-378 (Dixon J).
[50] See generally: Gelagotis v Esso Australia Pty Ltd[2018] FWCFB 6092, at [117]; Titan Plant Hire v Van Malsen[2016] FWCFB 5520, 263 IR 1, at [28].
[51] Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, at 204.
[52] Applicant’s Outline of Submissions in-reply, 17 Jan 2022, pp. 3-13.
[53] Yap; as to the acceptance of unchallenged evidence see: TWUA v Qantas Airways Limited (2021) 308 IR 244, at [53] (Lee J); Ashby v Slipper (2014) 219 FCR 322, at [77] (Mansfield and Gilmour JJ).
[54] Applicant’s Closing Submissions, 14 February 2022.
[55] See e.g. Mr Dru Candappa v Inedit Holdings Pty Ltd T/A Bella Property[2020] FWC 428, at [43], per DP Asbury.
[56] Ibid.
[57] See e.g. Ergon Energy Corporation Limited v Queensland Services, Industrial Union of Employees[2014] FWC 431, at [29] per DP Asbury.
[58] See e.g. Ms A v Cth of Australia, represented by Centrelink[2011] FWA 3532.
[59] See e.g. Ms A v Cth of Australia, represented by Centrelink[2011] FWA 3532 and Cristian Vasquez v Cleanaway Operations Pty Ltd[2021] FWC 758.
[60] See e.g. Lambeth v University of Western Sydney[2009] AIRC 47 (Hamberger SDP, 16 January 2009) at [70]. See also Grant v BHP Coal Pty Ltd[2014] FWCFB 3027 (Richards SDP, Asbury DP, Booth C, 18 June 2014).
[61] Webb v RMIT University[2011] FWAFB 8336 (Drake SDP, Hamilton DP, Jones C, 8 December 2011), at [6].
[62] Walton v Mermaid Dry Cleaners Pty Limited [1996] IRCA 267 (12 June 1996); (1996) 142 ALR 681, at 684.
[63] See e.g. Jones v Dunkel [1959] HCA 8; 101 CLR 298.
[64] APS Group (Placements) Pty Ltd v Stephen O’Loughlin [2011] FWAFC 5230, at [51].
[65] Respondent’s Closing Submissions, 21 February 2022.
[66] At [40].
[67] Erroneously cited by Club Assist at its footnote 33 as [2014] FWC 431.
[68] At [88].
[69] At 684.
[70] At [6].
[71] ABCC v CFMEU (2010) 187 FCR 293, at [47].
[72] Applicant’s Closing Submissions in-reply, 28 February 2022.
[73] Transcript, PN707-PN709.
[74] Ibid. See Crozier v Australian Industrial Relations Commission [2001] FCA 1031, at [13]-[14].
[75] See Exhibit A3, Annexure “YY-8”.
[76] Ibid, Annexure “YY-10”.
[77] Form F3, dated 10 November 2021, at Item 3.1, paragraph [10]: “[the Applicant] was notified that his employment was to be terminated due to his poor performance”.
[78] Transcript, PN84-PN97. Exhibit A4 at [4]. For a copy of the position descriptions, see Exhibit R5, Annexure “DS-2”. Ms Scally does not suggest that the Applicant ever received either of the position descriptions she annexures to her witness statement (see Exhibit R5, at [6]-[8]). I equally note that there is no evidence that the Applicant himself (over his period of more than 4 years employment with the Respondent) ever sought to himself obtain a copy of his position description/s, despite a position description being referred to in his employment contract (at clause 10).
[79] Exhibit R5, Annexure “DS-1”.
[80] I note that the Applicant himself does not question the lawfulness of the KPIs as they concern time keeping, or their imposition. Rather, he questions their reasonableness in the context of being able to justify, in the facts and circumstances of this case, a valid reason for the Applicant’s dismissal. See Applicant’s Opening Reply Submissions, 17 January 2022, at [21].
[81] The one page documents titled “Roadside Responder Monthly Performance Review” and “CAT Monthly Performance Review” give no explanation of the KPI themselves (i.e. they are merely a one page assessment sheet).
[82] Transcript, PN423 and PN452. Exhibit R3, at [41]-[46]. A roadside patrol officer can notify dispatch if they are at a job that will take an unusually long time, make notes for a specific job indicating why it took longer than normal, or provide feedback at KPI meetings as to, for example, external factors that impacted upon job longevity, either specifically or generally (the notifications to dispatch, job notes, or feedback at KPI meetings can then be taken into account for the relevant roadside patrol officer’s KPI performance and assessment).
[83] Exhibit R3, at [70]-[74].
[84] Transcript, PN426.
[85] Exhibit R3, at [59].
[86] Transcript, PN728. Respondent’s Outline of Submissions, 24 December 2021, at [9].
[87] Exhibit R3, at [58]-[67]. See also, Transcript, PN460
[88] Exhibit R3, at [115]; Exhibit R5, at [19]. Transcript, PN803-PN833.
[89] Exhibit R3, at [49]-[54]. See also, Transcript, PN460
[90] See, for example, Exhibit R3, at [17]-[24], [31]-[32], [43], [50]-[53], [54], and Transcript, PN435-PN441.
[91] Exhibit R3, at [46], [48], [60], [69] and [72]. Transcript, PN440-PN442, PN452.
[92] Exhibit R3, at [60] and [72].
[93] Ibid, at [35].
[94] Transcript, PN432.
[95] Ibid, PN255-PN259; PN371. See also PN464 (per Mr Kinsella on the Applicant’s knowledge and awareness of KPIs).
[96] Ibid, PN296-PN297. Exhibit A3, at [32]-[49].
[97] Transcript, PN678.
[98] Ibid, PN675-PN679.
[99] Ibid, PN323-PN347.
[100] Transcript, PN674-PN725.
[101] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, at [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, at [55]; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, at 151.
[102] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[103] [1996] IRCA 568.
[104] Ibid.
[105] Exhibit R3, at [115]; Exhibit R5, at [19].
[106] Read v Gordon Square Child Care Centre Inc T/A Gordon Square Child Care Centre[2013] FWCFB 762, at [51]-[52].
[107] Fastidia Pty Ltd v Goodwin (2000) 102 IR 131, at [43]-[44].
[108] Cf Read, at [54]-[55].
[109] Applicant’s Outline of Submissions, 14 December 2021, p.7.
[110] Respondent’s Outline of Submissions, 24 December 2021, pp.9-10.
[111] Applicant’s Outline of Submissions in-reply, 17 Jan 2022, p. 14.
[112] I deal with this issue of ‘procedural fairness’ for the purposes of s.387(e) and 387(h) of the Act together.
[113] Applicant’s Closing Submissions, 14 February 2022, pp.13-14.
[114] Respondent’s Closing Submissions, 21 February 2022, p.11.
[115] Applicant’s Closing Submissions in-reply, 28 February 2022, 16-17.
[116] McCarron v Commercial Facilities Management Pty Ltd t/a CFM Air Conditioning Pty Ltd[2013] FWC 3034, at [32].
[117] Fastidia Pty Ltd v Goodwin, Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), at [43]-[44].
[118] Ibid.
[119] Exhibit R3, Annexures “PK-2”, “PK-5” to “PK-25”.
[120] Applicant’s Outline of Submissions, 14 December 2021, p.8.
[121] Ibid.
[122] Exhibit A3, at [53]-[57].
[123] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, at [14]; Smith v Moore Paragon Australia Ltd PR915674, at [69] (AIRC, 21 March 2002).
[124] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 (as cited in Potter v WorkCover Corporation (2004) 133 IR 458 per Ross VP, Williams SDP, Foggo C, and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C, at [36]).
[125] Applicant’s Closing Submissions, 14 February 2022, at [56]-[59]; Applicant’s Closing Reply Submissions, 28 February 2022, at [61]-[66].
[126] Respondent’s Closing Submissions, 21 February 2022, at [75]-[80].
[127] [2014] FWCFB 7198.
[128] Ibid, at [35].
[129] Exhibit R3, at [127]-[132].
[130] Transcript, at PN479-PN485.
[131] Ibid, at PN873-PN883.
[132] Ibid, at PN878.
[133] Ibid, at PN882.
[134] See e.g. Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198.
[135] Transcript, at PN147-149.
[136] Ibid, at PN1009.
[137] Ibid, at PN147-149 and PN308-317.
[138] Ibid, at PN485-486.
[139] Ibid, at PN479.
[140] Ibid.
[141] Respondent’s Closing Submissions, 21 February 2022, at [75]-[79].
[142] Transcript, at PN492.
[143] Ibid, at PN507.
[144] Ibid, at PN494-497 and PN500.
[145] Ibid, at PN502-504.
[146] Ibid, at PN508-509.
[147] At [42].
[148] Applicant’s Closing Submissions, 14 February 2022, at [56]-[59].
[149] Transcript, at PN133-149.
[150] Ibid, at PN303-307.
[151] Ibid, at PN1010.
[152] Applicant’s Closing Reply Submissions, 28 February 2022, at [61]-[66].
[153] [2014] FWCFB 7198, at [27].
[154] Transcript, PN103-PN163.
[155] Ibid, PN435—PN441 and PN479.
[156] Exhibit R3, Annexure “PK-3” (as tendered at hearing); Transcript, PN769-PN780 (Health Checks); PN619 and PN870 (Jobs per hour); PN667 and PN672 (Second Service KPI)
[157] Transcript, PN602-PN604, and PN609. I note there may be an exception for the BWR KPI during July and August 2021.
[158] Transcript, PN627 and PN641-PN645.
[159] Note, for example, Transcript, PN861.
[160] Transcript, PN652, and PN661-PN662.
[161] Exhibit A3, at [58]; Exhibit A4, at [38]-[42].
Printed by authority of the Commonwealth Government Printer
<PR739134>
46
0