FWA 3922
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Peter John Harley
Rosecrest Asset Pty Ltd T/A Can Do International
DEPUTY PRESIDENT MCCARTHY
PERTH, 21 JUNE 2011
Termination of employment.
 Mr Peter Harley (the Applicant) was employed by Rosecrest Asset Pty Ltd T/A Can Do International (the Respondent). The Applicant asserts that his employment was terminated unfairly. He claimed that his termination of employment was because the Respondent had a personal dislike and that he was unsettling to others.
 There was no conciliation conducted as the Respondent asserted that Fair Work Australia (FWA) did not have the jurisdiction to deal with the application. The Respondent therefore requested that the jurisdiction issue be dealt with first.
 There were substantial difficulties in getting this matter to the point where it could be determined. It is unnecessary to recount the difficulties encountered other than to state that the difficulties were in the main caused by the Respondent. The Respondent’s objection was that the employer was a Small Business Employer who had complied with the Small Business Fair Dismissal Code. The contention was that the Applicant was dismissed because the Respondent believed, on reasonable grounds, that the Applicant was stealing goods from the business.
 The Fair Work Act 2009 (the FW Act) provides that a person has been “unfairly dismissed” if FWA is satisfied that the person has been dismissed and the dismissal was not consistent with the Small Business Fair Dismissal Code 1 (the Code). Put in the positive, if the dismissal was consistent with the Code then the dismissal cannot be unfair.
 A person’s dismissal is consistent with the Code if:
(i) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(ii) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
 It is not in dispute that the Respondent is a small business employer.
 The Code provides, amongst other things, that:
“It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”
 For an employer to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal, it is firstly necessary for the employer to establish that the employer did in fact hold the belief that as a matter of fact that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) that the conduct justified immediate dismissal. This is to be contrasted to the provisions of s.387(a) where FWA, in determining whether there was a valid reason for the dismissal, must find whether the conduct in fact occurred. 2
 Secondly, it is necessary for the employer to establish that there are reasonable grounds for the employer holding the belief. It is thus necessary for the employer to establish a basis for the belief held which is reasonable. In this regard it would usually be necessary for the employer to establish what inquires or investigations were made to support a basis for holding the belief. It would also ordinarily be expected that the belief held be put to the employee, even though the grounds for holding it may not be. Failure to make sufficient inquiries or to put the accusation to the employee in many circumstances might lead to a view that there were no reasonable grounds for the belief to be held.
The Assertions 3
 On 4 March 2011, the Respondent provided a completed Small Business Fair Dismissal Code Checklist (the Checklist). The Checklist asserted that the Respondent employed fewer than 15 full time employees at the time of the dismissal and that the Applicant had been employed for more than 12 months. It was also indicated that the termination was not because of a genuine redundancy. There were only two further items completed in the Checklist.
 Firstly, in the Checklist it was asserted that the employment of the Applicant was terminated because the Respondent had reasonable grounds to believe that the Applicant was stealing money or goods from the business. A notation was made that [the Respondent] "reported [the allegation] to police 22/12-10."
 Secondly, in the Checklist it was also asserted that the Applicant was also dismissed for some other form of misconduct. The reason outlined in support of that assertion was:
“Unbeknown to me, on 2 separate occasions, he brought a, different, person from another company into our premises for training. This done using company time & equipment.”
 On 16 March 2011, Mr Nielsen sent an email to my office. Mr Nielsen provided the reasons why he had formed the opinion that the Applicant had stolen from the Respondent. Those reasons were:
“On 20 Dec 2010 I became aware that Mr. Harley had removed some custom made goods from the factory. My attention was brought to the fact by internal production-procedures that causes the ‘job’ to show up for invoicing.
I did a physical check to confirm the goods were not present in the factory; they were not, and a little investigation, a look in our production-control software, revealed the goods had been custom-ordered by Mr. Harley on 16 Dec 2010.
It is apparent from this software that other staff had been involved in the production, but as the job was run through production in the same manner as any other job, it would not have been perceptible to anyone, whether he had an agreement with me to allow the personal job, or indeed if he had any intention of paying for it.
There had been NO attempt by Mr. Harley to ask permission prior to have custom-made goods produced, nor had there been any attempt to inform me of the fact during the production period.
I later found out the goods are not for himself, but for a friend of his ---or his partner.
After a couple of days of contemplation, on Wednesday 22 Dec. I called the police to report the matter, and take their advice on how to proceed, and not surprisingly, they suggested it is a civil matter and I should try to ‘sort it out with the person’ --no, they did not show up for an arrest or anything like that.
I later confronted Mr. Harley with the facts, with the intention of dismissing him, and my assessment that it constitutes theft, was not disputed. His only ‘defense’ was that he intended to ‘pay on Friday’ --or words to that effect.
In view of my general perception, formed over some time, of Mr. Harley, I cannot say that I’m without doubt as to the validity of this claim ---had he not been ‘found out’.
My initial intention was to pay Mr. Harley in lieu of notice, just as I indicated to him that it was not necessarily very important for him to actually PAY for the goods, but it is a matter of the principal ---I will NOT accept ANY staff helping themselves to good, but if approached beforehand I have always been accommodating with a ‘mates’ rate, and I believe this principal is well understood by our employees.
Mr. Harley insisted on paying, and because of subsequent events, I also revise my intention re payment in lieu of notice.
I have attached a statement from our Sales & Marketing Manager who overheard the dismissal and I have attached a copy of the invoice for the goods. The invoice is dated in January because our invoicing department was closed for the holidays. The amount owned on the invoice was withheld from last wage-payment, so the balance shows zero.”
 Mr Nielsen also outlined other reasons for his decision to dismiss but requested those reasons remain confidential.
 I provided a copy of the reasons outlined above, other than those requested to be confidential, to the Applicant, and sought his response. He responded as follows:
“In regards to Mr Nielsen's assertion that I removed Goods from the factory premises, I can catagorically state that it was not myself who removed the goods, but that it was my partner Kristine Rouse for the purposes of Quality assessment. The completion date for the job concerned was the 23/12/10 as assigned on the job card. Payment was arranged to be made on the afternoon of the 22/12/10 as our pays did not go to the bank till after 12pm.
I made the initial request for the goods to be made to the Sales Manager Mr C. Hill. I then proceeded to put the matter out of my mind, under the impression the sales manager would relay the request to Mr Neilsen.
Mr Nielsen was present when Mrs M. Robinson the purchaser of the goods, (also assistant to my partner) came to sit with Brett Schofield (Graphics Dept) to transfer photo's for the job in dispute. If there was an issue with the work being done, why was it not mentioned then. Mrs Robinson and Mr Nielsen were introduced.
If as Mr Nielsen asserts that there was no intention to pay for the goods why was there a job card raised? The job card is instrumental to all information recorded by the software mentioned.”
 It was clear that the Applicant contests the assertions and allegations of Mr Nielsen. I decided that there are facts in dispute and as a consequence, I listed and heard the matter accordingly.
Evidence and Consideration
 The Respondent asserts that the Applicant removed goods from the Respondent’s premises without permission. The items concerned were six stubby holders and three bar mats with a total value of about $150.00. Mr Nielsen says that it is not against the Respondent’s policies to have goods made for themselves but that they are required to seek permission first and a price would be agreed at that time.
 Mr Nielsen says that he formed the view that goods were taken from the Respondent’s premises without the usual procedures and without agreement first being reached, which he considered to be theft. When he raised it with the Applicant, the Applicant stated that he was going to pay for the goods later in the week.
 The Applicant says that he did not take the goods but that his partner, who was involved in the business, apparently as a contractor, took them. Mr Nielsen responded that this was not raised with him when he confronted the Applicant. Mr Nielsen also stated that if the Applicant had not taken the goods then the Applicant should have mentioned that to him when he confronted the Applicant about the allegation.
 The Applicant’s partner gave evidence that she did not take the goods home but rather, she took prints, panels and tapes involved in producing the goods for the purpose of working on them at home. She then intended returning to the Respondent’s premises for further inspection and to pay for the goods. Indeed it seems the Applicant and or the Applicant's partner had the prices for the goods established, although this had been through someone else other than Mr Nielsen. The Applicant’s partner also gave evidence that once the goods were finished being made, that she did remove them from the Respondent’s premises.
 The Applicant gave evidence that he had not taken the goods. He stated that the matter was one where there was a communication breakdown that got out of hand. He stated that he did not respond to Mr Nielsen when he was confronted by him as he felt he was being belittled and so he shut his mouth and waited for another time.
 The Applicant also asserts that he did have permission for the goods which he had discussed with another person in authority. The Respondent asserts that goods were taken by the Applicant without permission. Had the Applicant taken the goods without permission, it would have been the conduct that would constitute serious misconduct. However, the evidence is clear that the Applicant did not take the goods, and even if he had, the evidence is that he had permission to do so.
 However, as I outlined above, the question here is not whether the conduct occurred but rather whether the Respondent had reasonable grounds to believe that it did. I have no doubt that the Respondent did in fact hold the belief that the conduct did occur, albeit erroneously. The critical question here then is whether the Respondent had reasonable grounds to hold the belief. Had Mr Nielsen approached the discussion with the Applicant regarding the goods differently, he may well have not held the belief he did and the decision to dismiss the Applicant could quite easily have been different. Similarly, had the Applicant made some endeavour to explain what had occurred at that time, there also could have been a different outcome. Rather than dispute the allegations, the Applicant indicated an intention to pay instead of explaining that he had either not removed or had permission to remove the goods. In effect, the Applicant did not dispute the Respondent’s belief when he had the opportunity to do so.
 Considering all of these circumstances, I have come to the conclusion that Mr Nielsen believed, albeit erroneously, that the goods had been removed from the Respondent’s premises without permission by the Applicant and that he had reasonable grounds for holding that belief. I therefore find that the Respondent believed on reasonable grounds that the Applicant’s conduct was sufficiently serious to justify immediate dismissal. The Respondent thus complied with the Code and the dismissal was consistent with the Code.
 The application is therefore dismissed.
Mr P Harley on his own behalf.
Mr S Nielsen on behalf of the Respondent.
15 March, 19 May.
2 see British Home Stores Ltd v Burchell  IRLR 379
3 Note: a substantial portion of these matters were outlined in an interlocutory statement I issued for the parties for the purposes of the hearing
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