[2014] FWC 1916

FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr David Friend
v
Bennett Carroll Holdings Pty Ltd T/A Bennett Carroll Solicitors
(U2013/9978)

DEPUTY PRESIDENT ASBURY

BRISBANE, 21 MARCH 2014

Application for unfair dismissal remedy - arbitration.

BACKGROUND

[1] David Friend applies under s.394 of the Fair Work Act 2009 (the Act), for an unfair dismissal remedy in respect of his dismissal by Bennett Carroll Holdings Pty Ltd trading as Bennett Carroll Solicitors (Bennett Carroll). Mr Friend was employed as a Senior Commercial Solicitor from 25 October 2010 until his dismissal on 7 May 2013. His initial salary was $90,000.00 per annum plus superannuation. Mr Friend was employed at the Kawana Branch office on the Sunshine Coast, one of four offices operated by the Firm.

[2] Mr Friend was dismissed for alleged poor performance; failure to follow procedures; having a significant number of client complaints; failing to capture time; and for having a level of billable hours that made his continued employment unsustainable for the Firm. Mr Friend contends that there was no valid reason for his dismissal and that it was unfair. Mr Friend also maintains that he had no warning that his employment with Bennett Carroll was at risk and has had no issues of poor work performance in his forty year legal career, which included a period as principal of his own practice.

[3] With respect to the initial matters required to be considered by virtue of s.396, Mr Friend’s application was made within the period required in s.394(2) of the Act and he was protected from unfair dismissal as provided in s.382. The dismissal was not a redundancy. It is not in dispute that Bennett Carroll has fourteen full time equivalent employees and is a small business employer as defined in s.23 of the Act.

[4] The central issue for determination is whether the dismissal was consistent with the Small Business Fair Dismissal Code. If the dismissal was consistent with the Code, it is not an unfair dismissal and Mr Friend’s application must be dismissed. If the dismissal was not consistent with the Code, then it is necessary to determine whether it was unfair because it was harsh, unjust or unreasonable.

[5] Mr Friend represented himself in this matter and Bennett Carroll was represented by its Chief Executive Officer and Director, Mr Guy Gibbons, who is also a Solicitor. The proceedings were lengthy and complicated by a series of disputes between the parties about production of documents, which necessitated a number of interlocutory hearings.

[6] Mr Friend gave evidence on his own behalf and provided three witness statements attaching a range of material. Mr Gibbons gave evidence on behalf of the firm.

[7] The manner in which the parties conducted their cases was at odds with the simplified scheme established by the Small Business Fair Dismissal Code and with the object of establishing flexible and informal procedures for dealing with unfair dismissal as provided in s.381of the Act. A significant amount of documentation was tendered by both Mr Friend and Mr Gibbons, and I have taken into account that which is relevant to the issues in dispute in this case.

THE SMALL BUSINESS FAIR DISMISSAL CODE

[8] By virtue of s.385, a person has been unfairly dismissed if the Commission is satisfied that:

[9] The Commission must be satisfied in relation to each of the matters set out in s.385 and the section acts as a gateway, to prevent or restrict access to the other provision of the Act relevant to consideration of whether a dismissal is unfair and remedy. The Commission is required to consider whether a dismissal by a small business employer is consistent with the Code, regardless of whether the small business employer asserts compliance and seeks the protection of the Code.

[10] As previously stated, the issues in dispute in this case are whether Mr Friend’s dismissal was consistent with the Small Business Dismissal Code, and if not, whether it was harsh, unjust and unreasonable.

[11] The Small Business Fair Dismissal Code is provided for in s.388 of the Act, as follows:

“388 The Small Business Fair Dismissal Code

[12] The terms of the Small Business Fair Dismissal Code were declared by legislative instrument with effect from 1 July 2009. Mr Friend was not summarily dismissed, and the relevant provisions of the Code are as follows:

[13] Those provisions are a less prescriptive version of the criteria in s.387 and significantly do not allow the Commission to take into account any matters not specifically provided for in the Code in deciding whether a dismissal is consistent with the Code. The employer’s experience and resources may be relevant to the consideration of the reasonableness of any opportunity given to the employee to respond to the warning and rectify the problem. 1

[14] However, the Commission must also be mindful that the effect of finding that a dismissal is consistent with the Code is that the application for an unfair dismissal remedy must be dismissed, and a dismissed employee will be deprived of the opportunity available to other dismissed employees to an unfair dismissal application dealt under s.387 of the Act.

[15] The provisions of the Code make it clear that the reason that employment is at risk and the warning that the employee will be dismissed if the conduct or work performance does not improve, must be provided to the employee before the decision to dismiss the employee is made. The term “risk” connotes that the employee must have sufficient information to understand that there is a possibility of dismissal and the reasons that possibility has arisen. The term “warning” connotes that an employee must be informed of the risk of dismissal in a manner that is sufficiently clear and forceful to be reasonably understood as a warning.

EVIDENCE

Time Capture/Billable Hours

[16] Bennett Carroll operates a system known as ACCPAC which allows time spent by fee earners on billable work and administrative work to be captured and recorded. The system contains a number of features which allow “to do” lists to be generated; notes to be made in relation to work performed and documents to be saved. This system is also used to generate bills for clients.

[17] Mr Gibbons’ evidence is that it was a critical requirement of Mr Friend’s employment to capture 6 billable hours per day comprising 60 units of 6 minutes, and that his time capture never reached anywhere near the required level. Time capture records from the start of Mr Friend’s employment appended to Mr Gibbons’ witness statement indicate that during 30 months of employment Mr Friend met this target on 11 of 100 weeks and only one of those weeks was in the 5 month period before dismissal. The billable hours KPI is critical to the Firm. Its computer system provides an hourly update every working day and weekly and ongoing averages for fee earners. According to Mr Gibbons, there is no KPI in the Firm more spoken about, captured, advertised and fed back to fee earners. 60 units per day is a standard and achievable level and is an industry benchmark which has been in place for decades.

[18] In April 2013, the month before his dismissal, Mr Friend had an average time capture of 21 hours. Mr Gibbons said that this level of billable hours was not sustainable and that Mr Friend failed to meet the billable hours KPI on more occasions than other fee earners employed by Bennett Carroll. Figures for the period November 2010 to May 2011 show that other fee earners averaged in the later 50s and early 60s while Mr Friend averaged more than 60 once in the entire time and declined from a high of 63 to a low of 34 by November 2011.

[19] Mr Gibbons disputed that Mr Friend was not provided with training and said that he physically sat with Mr Friend and went through the operation of the time capture system. Mr Gibbons also said that he scheduled a regular training session on Tuesday when he was at Kawana and on a number of occasions, despite sitting in an office next door to the one occupied by Mr Gibbons, Mr Friend did not attend the scheduled training. The Firm also had a Procedures Manual with a large amount of information complete with pictograms depicting how to operate the system. 2

[20] Mr Gibbons said that in his view, training was a mutual commitment and that after two or three sessions, he assumed that Mr Friend did not require more training. Mr Gibbons also said that if Mr Friend had approached him he would have happily conducted further training.

[21] According to Mr Gibbons, there was never an issue raised by Mr Friend about the impact of paperless files, and Bennett Carroll has spent a considerable amount of money on providing state of the art dictation, electronic recording and other procedures designed to allow fee earners to be as efficient as possible. Mr Gibbons maintained that the ACCPAC system is simple and most new staff require a days’ training. Mr Friend was provided with more training than any other staff member since the system was installed.

[22] In relation to Mr Friend’s evidence that it was not his responsibility to obtain new work, Mr Gibbons said that new work enquiries are received via telephone and email, and it was Mr Friend’s responsibility to respond sufficiently well to create confidence on the part of persons making enquiries so that they provided instructions for work to be done. Mr Gibbons said that he told Mr Friend that he should put notes in to the system at the time he undertook work, so that it was done within the billable record. Mr Friend was also provided with a headset and the ability to make notes as he worked. This practice is utilised by other fee earners in the Firm.

[23] Mr Gibbons agreed that Mr Friend proposed seminars as a means of increasing billable hours, but said that when he requested Mr Friend to propose a topic for a seminar and undertake some work in connection with organising it, Mr Friend did not do so. Mr Gibbons also queried the value of or the need for a promotion suggested by Mr Friend whereby the Firm would assist Barristers to prepare their wills and said that other suggestions of Mr Friend related to things that the Firm was already doing and had done for some time.

[24] Under cross-examination, Mr Gibbons rejected the proposition that 60 units a day was not achievable and that to achieve that amount of billable time required an additional two or three hours. Mr Gibbons said that there are approximately 80 units available in a day and that with the systems in place at Bennett and Carroll Solicitors that allowed fee earners to work efficiently there was no reason why an additional two or three hours of work per day would be required to achieve that target.

[25] Mr Friend’s evidence was that he did not recall KPIs being discussed in the interview prior to him accepting the position with Bennett Carroll and no great emphasis was put on this matter after he commenced his employment. Mr Friend also said that he regarded the KPI in his letter of offer as a target rather than as a mandatory requirement.

[26] A salary letter of offer from Bennett Carroll tendered by Mr Friend states that:

[27] Mr Friend also tendered a letter setting out employment conditions, under the signature of the General Manager of Bennett Carroll, which concluded as follows:

[28] Mr Friend stated in the Form F2 Application that he noted a reduction in work load and billings in November 2012 and that he was told by Mr Gibbons in the meetings preceding his dismissal, that his billable hours were unsustainable. In his evidence to the Commission, Mr Friend disputed the assertion that his billable hours were unsustainable and said that this matter was related to the current economic downturn rather than poor work performance on his part.

[29] Mr Friend asserted that he diligently carried out work that was assigned to him by the CEO. Mr Friend also said that it was not his responsibility to secure new work, and that if his time recording was unsustainable then it was the Firm’s responsibility to ensure that he had sufficient work to make his time recording sustainable. Mr Friend also said that he was told when he commenced employment that the Firm employed a marketing person and that fee earners were not required to perform marketing.

[30] In relation to the KPI of 60 units per day, Mr Friend said that this was unreasonable. The Firm’s paperless files meant that Mr Friend was required to read files on a computer which was generally slower and had a negative impact on his billable units. Time was also lost reading emails in case there were any for Mr Friend or there were enquiries in his area of expertise.

[31] Further Mr Friend maintained that he was not provided with training or secretarial support, and had to spend a considerable amount of time undertaking administrative tasks such as typing notes into the system. When Mr Friend requested training Mr Gibbons scheduled an hour each Tuesday for this purpose and then did not provide the training. According to Mr Friend, Mr Gibbons later apologised for not providing the training and stated that he had been prevented from doing so by other issues.

[32] There were a number of documents attached to Mr Friend’s witness statement containing suggestions to improve performance, in which he commented about the complexity of the time recording system utilised by Bennett Carroll. Mr Friend also said that his previous experience with time keeping involved using paper records and that he struggled with estimating the time it took to undertake various tasks.

[33] Mr Friend agreed under cross-examination that he had not met the KPI of 60 units per day on 117 weeks in 130, but maintained that he regarded the KPI as a target and not a mandatory requirement. In response to the proposition that prior to his dismissal the last week when he met the KPI was October 2012, Mr Friend said that he did recall having a discussion with Mr Gibbons where he told Mr Gibbons that things were quietening down and asking whether Mr Gibbons had any more work for him.

[34] Mr Friend tendered various proposals he had provided to Mr Gibbons about ways of increasing new work and said that these suggestions were ignored. The suggestions made by Mr Friend involved the Firm conducting a series of seminars or promotional activities such as assisting Barristers to prepare their wills.

Client Complaints

[35] Mr Gibbons said that it is a legal requirement for a law firm to make a disclosure to a client at the commencement of instructions. It is the Firm’s policy that unless an exception is approved in writing, to obtain funds into trust before commencing work. Mr Friend consistently failed to get this done to the satisfaction of the client, in circumstances where the client understood that a formal engagement was taking place. Mr Gibbons provided examples of clients who either complained that they did not realise they were engaging the firm formally, complained that they had not sought advice that Mr Friend provided or refused to sign engagement documents after work had been done by Mr Friend.

[36] Evidence was also given by Mr Gibbons of complaints made to the Legal Services Commission by four clients whose files were dealt with by Mr Friend and a further 25 complaints made either orally or in writing to the Firm. The emails and other correspondence relating to these complaints variously indicate that they related to Mr Friend invoicing for greater amounts than he had estimated to clients; clients disputing that the amount of time taken for Mr Friend to perform work was reasonable or that Mr Friend had failed to respond promptly to client requests or those of other professionals such as accountants assisting clients in commercial matters. There are complaints about Mr Friend commencing chargeable work without discussion with clients or charging clients who later stated that they had not engaged the firm.

[37] There are also some complaints involving both Mr Friend and Mr Gibbons alleging failure to communicate internally about particular matters resulting in clients being charged twice for both Mr Gibbons and Mr Friend to consider matters, failure to advise about estimated costs or blowouts in those costs or that Mr Gibbons had failed to understand and respond to issues raised by clients.

[38] Mr Gibbons also said that Mr Friend constantly failed to open, peruse, deal with, respond to and save emails from clients. This meant that management of the Firm had to chase Mr Friend to perform paid work, clogged the Firm’s email inbox and resulted in time not being captured. Mr Gibbons said that Mr Friend was cautioned about this on some 17 occasions between 23 August 2011 and 30 October 2012. The notifications in relation to this issue were tendered by Mr Gibbons. Six of those notifications are directed only to Mr Friend. The remaining 11 are directed to multiple employees of the Firm including Mr Friend.

[39] Mr Gibbons said that allowing for the fact that some clients complain to avoid paying their bills in full, and that Mr Friend had generally taken the correct steps in relation to files, there were a significant number of client complaints about Mr Friend. The essence of those complaints was that the billing by Mr Friend for the work done and by implication the amount of time that Mr Friend took to do work, was too high, and that Mr Friend was not sufficiently insightful or efficient in protecting client’s interests.

[40] Mr Gibbons also said that in the period that Mr Friend worked for the Firm there were 11 complaints to the Legal Services Commission and a total of 2000 files opened. Of the 11 complaints to the Legal Services Commission, 7 related to Mr Friend’s files. Mr Gibbons accepted that a small number of clients will raise a complaint in order to reduce their bill, the sheer volume and consistent pattern of complaints about files run by Mr Friend was a reason for dismissal.

[41] Mr Friend responded in some detail to the allegations about client complaints. Essentially his response was that clients complained from time to time, usually about their costs and that clients complained about other fee earners including Mr Gibbons. According to Mr Friend, clients complained to reduce their costs, and this fact was acknowledged by Mr Gibbons in their discussions about the complaints. Mr Friend said that his charge out rate was set by the Firm; he followed Mr Gibbons’ directives in recording time to the relevant client files; invoices were sent out by the Firm; and it was always his view that any complaints from clients regarding costs or invoices were claims against Bennett Carroll Solicitors rather than him personally.

[42] Under cross-examination Mr Friend agreed that he recorded the time taken to perform work in the Firm’s ACCPAC system as units, and clients were then invoiced for those units at his hourly rate. Mr Friend was shown a number of pieces of correspondence he had produced in relation to files that had been the subject of client complaints. It was suggested in cross- examination that the time allocated to the production of that correspondence was excessive. Mr Friend maintained that the units that he had allocated to the work associated with the correspondence were reasonable and consistent with the policies of Bennett Carroll and that he had also been required to read other documents associated with the preparation of the correspondence in question.

[43] In response to the proposition that 30 complaints in 30 months of employment was a significant number of complaints, Mr Friend said that most of the complaints were not valid, and Mr Gibbons had previously made statements to the effect that lots of clients made complaints just to get their costs reduced. Mr Friend was also cross-examined about two files I will refer to as D and M. The file in relation to D concerned the purchase of a commercial property.

[44] Mr Friend said at the time he was working on the M file and as the D file had a large number of documents which were required to be reviewed before advice was provided, he wished to complete the work on the M file first. Mr Friend was referred to a note from a staff member dated 12 September 2012 requesting that he look at the D file and provide the client with advice about the contract and a further note dated 19 September 2012 indicating that Mr D had withdrawn his instructions in relation to the file due to inactivity on the part of the Firm.

[45] In response to the proposition that his time sheets indicated that in the period from 12 to 19 September he had not met the KPI with respect to billable units on all but one day and could have undertaken the work in question, Mr Friend said that he had probably not recorded entries that he should have recorded during that time period. Mr Friend also agreed that in that period he spent time doing administrative work including composing an email to a training person and perusing an email from somebody wanting to sell information to do with changes to legislation. Mr Friend said that he needed to keep up with these sorts of things and it was not a waste of time.

[46] Mr Friend agreed that Mr Gibbons spoke to him about client complaints but did not agree that Mr Gibbons said that the amount of complaints was alarming. Mr Friend said that the impression he got was that Mr Gibbons thought that the complaints were not valid. Under cross-examination Mr Friend maintained that although the Firm received 30 complaints about him in 30 months, his time capture over the last three weeks of his employment was below the KPI and there had been three hours of meetings about this over the space of a month, he did not believe that there had been criticism of his work performance.

Events leading to the dismissal

[47] Mr Gibbons said that Mr Friend’s unit capture rate was being monitored throughout 2011, and that meetings were held with him on a weekly basis in June, July and August of that year, to attempt to train him and improve his performance in this area. Mr Gibbons also tendered what he described as notices given to Mr Friend regarding his failure to meet the central key performance indicator in relation to billable hours. Those notices are electronic communications that generally state: “Good morning David” and then go on to set out Mr Friend’s units for particular days or the week. The notices generally conclude by wishing Mr Friend a “happy” day.

[48] Mr Gibbons said that such notices are provided to all fee earners on Mondays and progress figures were also provided on Tuesday and Wednesday. According to Mr Gibbons, these notices meant that Mr Friend could see his consistent failure to meet his key performance indicator.

[49] There was a meeting between Mr Friend and Mr Gibbons on 23 December 2011, during which Mr Gibbons states that he pointed out to Mr Friend that his time capture was so poor and his conduct yielding so little productivity, that his salary was not sustainable. Mr Friend’s salary structure was altered after that meeting to create an incentive based arrangement under which Mr Friend received a base salary of $75,000.00 plus superannuation and a bonus of ¼ of fees billed and paid. Mr Gibbons tendered a memorandum of that meeting in the following terms:

[50] Mr Friend tendered a series of written exchanges between himself and Mr Gibbons in relation to the change to his salary structure. In a memo dated 13 January 2012, Mr Friend states that he is disappointed with the decision and that a review should have been held 6 months ago in accordance with his employment agreement so that he was aware of the situation and “not under the misunderstanding that my contribution to the firm was satisfactory”. Mr Friend also asserts that his productivity is restricted by the Firm’s resources and the significant amount of time he is required to devote to administrative tasks, and that his fees have been discounted. Mr Friend further states: “Your expectations of me - is it just billing 60 units per day? Am I just a money manufacturing unit?”

[51] In a response dated 16 January 2013, Mr Gibbons states that the matter of the reduction in salary was discussed with Mr Friend at great length on 16 December 2012 and that Mr Gibbons had gone through the figures with Mr Friend and explained what was required. Mr Gibbons also states that Mr Friend had received weekly feedback about his inability to reach his time budget and that the issue with administrative tasks is that in some cases, the time could be legitimately billable and that Mr Friend should also use his “to dos” list to eliminate time lost between tasks.

[52] In relation to discounting of fees, Mr Gibbons states that the only discounts he is aware of are those required to compromise complaints and bad debts of which there had been many. In relation to time capture, Mr Gibbons states that this is given to Mr Friend weekly and pops up hourly and can be accessed at any time. The memo also states that Mr Friend’s major requirement has always been to earn the budgeted time.

[53] Mr Gibbons said that he held a series of meetings with Mr Friend on 9, 16 and 23 April 2013, during which he pointed out Mr Friend’s very poor and constantly reducing time capture, a consistent pattern of complaints by clients resulting in very low new file openings. Mr Gibbons also said that he told Mr Friend that this position was unsustainable and called for a response from Mr Friend.

[54] The evidence about the meeting of 9 April 2013 can be summarised as follows. Mr Gibbons said that during that meeting he told Mr Friend that:

[55] According to Mr Gibbons, Mr Friend’s response was that he was required to do a lot of administration work, and therefore could not capture his time. Mr Gibbons said that he told Mr Friend that administration work was not billable and was not relevant to the KPI requiring him to capture 60 billable units per day. Mr Friend did not address the complaints other than to state that he recorded his time on the file. In relation to decline of file numbers, Mr Friend said that this was due to a lack of marketing.

[56] Under cross-examination, Mr Gibbons said that at the discussion on 9 April he put the issues before Mr Friend and gave him a week to respond. Mr Gibbons said that an appropriate response would have been along the lines of Mr Friend trying to capture more time and to adhere to the Firm’s procedures more, or to keep an eye on the KPI and attempt to catch up by the end of the week.

[57] Mr Friend agreed that at the meeting of 9 April 2013, Mr Gibbons told him that his billable hours were unsustainable and that he had to do something about his timekeeping. Mr Friend also said that he had just returned from annual leave and was caught by surprise at the statement made by Mr Gibbons. Mr Friend responded to the statement by reminding Mr Gibbons that he had made suggestions to increase new work and income that had been ignored by Mr Gibbons and that there was a down turn in new work being generally experienced by the industry.

[58] Mr Friend also said that he told Mr Gibbons that he could be far more productive if he had support from secretarial or junior staff. Mr Friend said that he felt frustrated because his suggestions about increasing new work had been ignored and that he was being unfairly blamed in relation to billable units. Mr Friend did not recall whether Mr Gibbons said that the situation could not continue or that the firm could not keep him on if the process did not change.

[59] Mr Gibbons said that in the period between 9 and 16 April 2013, Mr Friend’s performance continued to be poor. According to Mr Gibbons, the only response Mr Friend gave at the meeting of 16 April was that the matters raised by Mr Gibbons on 9 April could be resolved by a marketing campaign involving seminars to be undertaken by Mr Gibbons. Mr Gibbons said that he responded to this suggestion by asking Mr Friend to choose a topic for the seminars and speak to the Firm’s administrative staff about creating a list of targets for the seminars. Mr Friend did not respond to this request, and had not done so at the point he was dismissed.

[60] In relation to the proposition that there had been another week of poor performance before the meeting of 16 April, and that he was asked at that meeting to respond to the issues raised on 19 April, Mr Friend said that the discussion on 16 April was about time costing and suggestions that Mr Friend had to improve in that area. Mr Friend agreed that he had suggested a round of seminars with local accountants and had made some notes about this proposal.

[61] A further meeting was held between Mr Gibbons and Mr Friend on 23 April 2013. At that meeting Mr Friend was informed that his employment was to be terminated. Mr Friend said that the termination of his employment was a huge shock and the first indication he had that his employment was at risk.

[62] Mr Gibbons said that at that meeting, he pointed out to Mr Friend that no further explanations or proposals with respect to improving productivity or addressing the constant stream of complaints had been received; he had not organised the seminar he had proposed; his employment position was unsustainable and his employment was to be terminated. Mr Gibbons said that there was some discussion about how this would take place. As a result of that discussion it was agreed that the last day of Mr Friend’s employment would be 7 May 2013, and Mr Gibbons told him that if he wanted an additional week to arrange his affairs, that he would be prepared to discuss this, and arranged a time on 1 May 2013 for that discussion to occur. A letter confirming the termination of Mr Friend’s employment and the discussions about the date the termination would take effect, was sent to Mr Friend on 24 April 2014. The termination letter states:

[63] Mr Gibbons said that he held a meeting with Mr Friend on 1 May 2013 to discuss the date that the termination of his employment would take effect. Mr Friend asked Mr Gibbons to reconsider the decision to dismiss him and Mr Gibbons indicated that the decision would stand. It appears (although there is no direct evidence on this point) that Mr Friend ceased employment with Bennett Carroll on 13 May 2013. This is apparent from a series of correspondence between Mr Gibbons and Mr Friend commencing with an email of 9 May 2013 in which Mr Friend requests a response to a “To Do” that he sent on Tuesday (presumably 7 May) regarding bonus calculations and his termination pay. Mr Friend also asks whether he can accept Mr Gibbons’ offer of assistance in the form of a reference and offers assistance in relation to an outstanding client complaint.

[64] There is further email correspondence on 13 May 2013 in which Mr Friend queries a number of matters including whether he should have received one months’ notice on termination of his employment in accordance with his employment contract and whether he was entitled to redundancy pay. Mr Gibbons responded to those queries, informing Mr Friend that the contract referred to termination on notice without reasons and that his employment was terminated for performance reasons. The response also states that it was agreed that two weeks’ notice would apply, and that an additional week would be paid as a “gesture”. Mr Friend was also informed that he was not entitled to redundancy pay as his termination was not a redundancy and that Mr Gibbons would act as a referee on his behalf.

[65] Mr Friend again corresponded with Mr Gibbons on 13 May 2013 and requested clarification about the statement that his employment was terminated for performance reasons. Mr Gibbons responded to this query on 22 May 2013 stating that there had been discussions regarding Mr Friend’s performance and time capture back to August 2012 and that he had pointed to Mr Friend’s constant low productivity and time capture, complaints, poor capture rate of enquiry and very low new file rate.

[66] Mr Gibbons contends that Mr Friend received “a great many pieces of feedback that his employment effort was not acceptable”, leading to the meeting on 9 April 2013.

[67] Mr Friend states that there was no valid reason given for his dismissal and no notification of a valid reason. Mr Friend further states that he felt that Mr Gibbons was unfairly blaming him for the reduced billable hours, and did not listen to his ideas for improving income levels.

[68] Mr Friend maintains that he did not receive any warnings in relation to his conduct or work performance and that Mr Gibbons had expressed satisfaction with his performance and professional abilities. Mr Friend also said that any discussion of client complaints consisted of Mr Gibbons indicating that the clients were in the wrong and did not appreciate the legal work done for them. Further, Mr Friend said that when Mr Gibbons visited the Kawana office, there were discussions about some clients not being happy with the charges but Mr Gibbons did not suggest that Mr Friend’s performance was not acceptable. Mr Friend also pointed to fortnightly file reviews conducted by Mr Gibbons in relation to his files and said that Mr Gibbons had not warned him about any matter during this process.

Other relevant matters

[69] Mr Friend said that he had not renewed his practicing certificate subsequent to his dismissal because he did not wish to be out of pocket for the cost of renewal if he was not going to get work as a solicitor, and that he would renew the certificate in the event that he obtained such employment. Mr Friend said that he had not registered with any employment agencies because he had not had positive experience with such agencies in the past, and that he was relying on seek.com to identify positions to apply for. In the event that he obtains this work, Mr Friend will renew his practicing certificate.

[70] The documents in evidence in relation to Mr Friend’s employment are:

[71] The document headed Section 2 states in relation to termination: “Please refer to section 1 regarding termination notice period and workplace relations policies and procedures”. The document headed Section 1 does not contain any notice period. There is a reference in the letter headed “Employment Conditions” to a Standard Solicitor Employment Agreement which is not in evidence. There is also correspondence between Mr Gibbons and Mr Friend after employment ceased, suggesting that there is a four week notice period. In that correspondence Mr Gibbons appears to assert that this notice period would only apply if Mr Friend’s employment was terminated “on notice without reasons” but does not dispute that there is a four week notice period provided for in the contract.

[72] In all of the documentation provided by the parties, it is not clear whether Mr Friend was paid three weeks’ notice on termination of his employment, or whether the three weeks’ notice was constituted by Mr Friend continuing to work for Bennett Carroll between 23 April until 13 May 2013 when he ceased employment.

CONCLUSIONS

Was Mr Friend’s dismissal consistent with the Small Business Fair Dismissal Code?

[73] I accept that the reasons for Mr Friend’s employment being at risk were valid. Mr Friend had a KPI in relation to billable hours, set out in the letter offering him employment with Bennett Carroll. Mr Friend accepted employment on the basis of that KPI. He did not achieve the KPI for the vast majority of the period he was employed. I also accept that Bennett Carroll had systems in place for providing fee earners with constant feedback about their performance against this indicator. While other fee earners did not always achieve the KPI, it is apparent that Mr Friend’s performance was consistently worse than that of other fee earners.

[74] Mr Friend now challenges the reasonableness of the KPI and provided a range of reasons in his evidence to the Commission about why he did not achieve it. I do not accept that there was anything inherently unreasonable about the KPI. I do not accept Mr Friend’s explanation of his failure to meet the KPI. Mr Friend is an experienced commercial solicitor who has run his own practice. I also do not accept his assertion that it was the responsibility of the Firm to provide him with work, and to ensure that he had sufficient work so that his time recording was sustainable.

[75] It is clear from Mr Friend’s evidence that he was not capturing all of his time in the Firm’s recording system and that he was not comfortable working with a computerised system. There is no evidence that other fee earners had difficulties with using the ACCPAC system. I do not accept that there was a failure to provide training to Mr Friend. Some training was provided, and if this was not adequate, Mr Friend should have sought additional assistance which was offered to him by Mr Gibbons in the form of scheduled training on Tuesdays.

[76] In the email exchange of December 2012 between Mr Friend and Mr Gibbons wherein Mr Friend disputes the reduction in his salary, Mr Friend does not raise any issue about lack of training in relation to recording billable hours. Further, Mr Friend takes no issue in that correspondence with Mr Gibbons’ assertion that the discussions which preceded the reduction of his salary included the issue of recording, and that Mr Gibbons would continue to work with Mr Friend each Tuesday and Friday to maximise efficiency and minimise lost time.

[77] Mr Friend had a significant number of complaints made against him during the period of his employment, and I am of the view that this was also a valid reason for Mr Friend’s employment to have been at risk. There is some incongruity between Mr Gibbons contending on the one hand that Mr Friend did not bill sufficient hours and on the other hand, that client complaints about being overcharged for work performed by Mr Friend had some validity. It is also the case that some of the complaints involved Mr Gibbons.

[78] However, even if it is accepted that some of the complaints about Mr Friend were not valid, the sheer number of complaints is such that real concerns would have been raised about Mr Friend’s capacity to do the job. There is a pattern in the complaints about Mr Friend taking too long to respond to clients or billing them for time that was not reasonable in the context of the work he had performed or undertaking work in circumstances where they did not believe that they had engaged the Firm.

[79] Notwithstanding my view that these matters were valid reasons for Mr Friend’s continued employment at Bennett Carroll to have been at risk, I am not satisfied that Mr Friend was told that he was at risk of being dismissed. The regular notifications to Mr Friend about his billable hours are not warnings or advice that Mr Friend’s employment is at risk if he does not improve his performance.

[80] The letter of 23 December 2012 confirming the reduction in Mr Friend’s salary does not contain any reference to client complaints. Neither does the letter contain a warning that failure to address the matters raised in the letter as a basis for the reduction would result in dismissal. While it is clear from his response to the letter that Mr Friend knew that his contribution to the Firm was not viewed as satisfactory, a reasonable interpretation of that letter is that notwithstanding the salary reduction, the Firm intended to persist with Mr Friend’s employment and that the salary reduction was the mechanism by which those issues would be addressed.

[81] This is consistent with Mr Gibbons’ evidence that he maintained Mr Friend in employment for longer than he should have, because he liked him personally and hoped the situation would improve. I am also of the view that this evidence indicates a failure to provide clear warnings to Mr Friend that his employment was at risk if he did not improve his billable hours against the KPI and if the Firm continued to get complaints about his conduct of matters.

[82] I accept that Mr Gibbons held discussions with Mr Friend in April 2013 in relation to time capture, productivity and client complaints. I also accept that during those discussions Mr Friend was told that his employment was not sustainable. However, there were no witnesses to these discussions and the outcome was not put into writing. Mr Friend maintains that he was not warned that his employment was at risk and that no mention of dismissal was made until the meeting of 23 April 2013 when he was informed that his employment was to be terminated. Mr Gibbons asserts that he told Mr Friend that his employment was at risk in the meetings prior to 23 April 2013.

[83] The Code requires that the employee be warned, preferably in writing, that he or she is at risk of being dismissed if there is no improvement. The test is not whether Mr Friend would reasonably have understood that this was the case but rather whether he was warned that his employment was at risk. The provision of a warning is a fundamental aspect of compliance with the Small Business Fair Dismissal Code.

[84] It is also a fundamental requirement that the warning be given at the point that the employee is at risk of being dismissed, and not at a point where the decision to dismiss has already been made. If the warning is not given in accordance with the requirements of the Code, then it cannot be said that the employee had an opportunity to respond or a reasonable chance to rectify the problem.

[85] The employer in this case is a law firm which practices in the area of business advice and lists “hiring and firing” among the subjects upon which it has expertise. It would have been a relatively simple matter to provide a written warning to Mr Friend if the intent of the meetings was to convey to Mr Friend that his employment was at risk and to warn him that failure to address the matters discussed in the meetings would result in his dismissal. This is what occurred after the meeting on 23 December 2012 when Mr Friend’s salary was reduced. That his employment was at risk and dismissal under active consideration is a much more serious situation than the reduction to his salary, and the failure to warn him in writing of the risk of dismissal is inexplicable in the context of the experiences and resources of Bennett Carroll.

[86] Accordingly, the state of the evidence is such that I am not satisfied that Mr Friend was warned that he was at risk of being dismissed until 23 April 2013. At that point, the risk had crystallised into a decision to dismiss. Furthermore, I am unable to accept that Mr Friend had an opportunity to respond to the warning because the meetings at which the issues were discussed was not conducted on the basis that Mr Friend was warned that his employment was at risk. It follows that Mr Friend did not have a reasonable chance to rectify the problems.

[87] For these reasons, Mr Friend’s dismissal was not consistent with the Small Business Fair Dismissal Code, and it is necessary to determine whether his dismissal was otherwise unfair, on the grounds that it was harsh, unjust or unreasonable.

Was Mr Friend’s dismissal unfair?

[88] In relation to the criteria in s.387(a), I am satisfied, for the reasons set out above, that there was a valid reason for the dismissal related to Mr Friend’s capacity or conduct. In short, Mr Friend failed to meet a key performance indicator in relation to billable hours for the vast majority of the period he was employed. There were a substantial number of client complaints in relation to files that were the responsibility of Mr Friend. I am also satisfied that Mr Friend was notified of the reason for his dismissal.

[89] It is not in dispute that at the meeting of 23 April 2013, Mr Friend was informed by Mr Gibbons that his billable hours were unsustainable and that there were a significant number of client complaints in relation to his work. In the context of the salary reduction that Mr Friend had been informed of in December 2013, and his response to that reduction, Mr Friend had known since at least that time that Mr Gibbons was not happy with his work performance with respect to recording of time and billable hours.

[90] I am satisfied that Mr Friend was notified of the reason for his dismissal as provided in s.387(b). This notification was given at the meeting on 23 April 2013.

[91] In relation to s.387(c) I do not accept that Mr Friend was given an opportunity to respond to the reasons for his dismissal relating to his work performance. At the point Mr Friend was given an opportunity to discuss Mr Gibbons’ concerns about his billable hours, he had not been clearly informed that his employment was in jeopardy and could reasonably have believed that the previous attitude of tolerance in relation to his work performance would continue. Although Mr Friend did not request to have a support person present at the discussions with Mr Gibbons in April 2013, and there was no refusal in relation to such assistance, Mr Friend was not aware that the meetings were to discuss the future of his employment or his dismissal (s.387(d)).

[92] The dismissal related to unsatisfactory performance, and for the reasons set out above, I do not accept that Mr Friend was warned about the unsatisfactory performance before his dismissal as provided in s.387(e). It is to be expected that the Firm would have ensured that Mr Friend was clearly warned about the issues with his work performance and given an opportunity to respond to and improve upon those concerns before the decision to dismiss him was made. I do not accept that Mr Friend was told with sufficient clarity that he was facing dismissal until 23 April 2013. At that point the decision had been made and there was no opportunity for him to give the kind of responses that on Mr Gibbons’ evidence, would have been acceptable after the meeting of 9 April 2013. Instead, after a significant period of apparent tolerance of poor work performance, Mr Friend was dismissed with three weeks’ notice.

[93] Bennett Carroll is a small business employer, but the nature of its business and the fact that the Firm practices in the area of employment law, offsets any impact that could be caused by its size or the absence of dedicated human resource management specialists (s.387(f) and (g)).

[94] There are other matters that I consider to be relevant and pursuant to s.387(h). I am of the view that it is clear that there were a series of discussions with Mr Friend about poor performance in relation to time capture, billable hours and client complaints and that these discussions had commenced by at least December 2012. Mr Friend should have been acutely aware by at least December 2012, that there were significant issues with his work performance, given that he had been subjected to a reduction of $15,000.00 per annum to his base salary in at that time.

[95] It is implicit in Mr Friend’s email in response to that reduction that at this point, he knew that his contribution to the firm was not satisfactory and that there were issues with his productivity. This is the case notwithstanding that Mr Friend had an explanation for these matters and did not accept that his performance was unsatisfactory. Mr Friend is a Solicitor and his insistence that his dismissal on 23 April 2013 came as a complete shock to him, is at odds with the statements he made in relation to the reduction of his salary in December 2012. This assertion is also at odds with Mr Friend’s correspondence after the dismissal.

[96] I am also of the view that it is relevant that Mr Friend is 66 years of age and will likely experience difficulty obtaining other employment in the current economic environment. On balance, I am satisfied that Mr Friend was unfairly dismissed and that he should have a remedy for that dismissal.

Remedy

[97] Mr Friend does not seek reinstatement and on that basis I am satisfied that it is not appropriate and that an award of compensation should be made. The remedy of compensation is dealt with in s.392 of the Act in the following terms:

[98] There is no evidence that an order for compensation will affect the viability of Bennett Carroll. Notwithstanding that he was unfairly dismissed, there were significant issues with Mr Friend’s capacity and work performance. After considering the evidence in these proceedings including Mr Friend’s refusal to accept that he had any responsibility for the issues that lead to the termination of his employment, I am of the view that his employment would have continued for a period of no more than four weeks.

[99] I base this conclusion on the fact that Mr Friend should have been well aware of the significant problems with his work performance, and that a one month period following a final warning about those issues would have been a reasonable time for Mr Friend to have improved and that in light of his evidence in these proceedings and his attitude to the matters asserted by Mr Gibbons, that he would probably not have improved his performance.

[100] Had Mr Friend remained in employment for a further period of one month he would have earned an amount of $5,769.23 as base salary. Although Mr Friend was paid for an additional three weeks after being informed that his employment was to be terminated, I make no deduction for that amount on the basis that had Mr Friend remained in employment for an additional month he would have still been entitled to payment in lieu of notice on termination or to work out the notice period.

[101] I do not propose to make any contribution for the amount of billings that the Applicant says he was entitled to. Mr Friend has not led evidence that enables the Commission to adequately account for this claim. There is insufficient evidence about what Mr Friend might have earned from billings in that period.

[102] In relation to mitigation, I accept that Mr Friend has made reasonable attempts to apply for other positions and his explanation for not renewing his practicing certificate is reasonable. I also accept that at the age of 66 Mr Friend may have difficulty in obtaining other employment commensurate with that he held with Bennett Carroll. Mr Friend’s dismissal was not for misconduct and I make no deduction on that basis.

[103] The amount of $5769.23 less taxation at the appropriate rate is to be paid to Mr Friend within fourteen days of the date of this Decision. An Order to this effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr D. Friend on his own behalf.

Mr G. Gibbons on behalf of the Respondent.

Hearing details:

2013.

Brisbane:

November 7; 8.

Final written submissions:

17 December 2013.

 1   John Pinawin T/A Rose Vi.Hair.Face.Body v Domingo [2012] FWAFB 1359 .

 2   Exhibit 35 Statement of Guy Austin Gibbons Annexure “BCS-13”.

 3   Exhibit 1 Statement of David Campbell Friend Annexure A.

 4   Exhibit 35 Statement of Guy Austin Gibbons Annexure “BCS-3”.

 5   Exibit 1 Statement of David Campbell Friend Annexure B.

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