FWA 9386
Fair Work Act 2009
s.394— Application for unfair dismissal remedy
ACM Group Ltd
SYDNEY, 12 NOVEMBER 2012
Unfair dismissal, summary termination of employment, breach of duty of good faith and fidelity, application dismissed.
 In this matter, Mr Matthew Melouney (the Applicant) has made an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy alleging that his dismissal by ACM Group Ltd (the Respondent) was harsh, unjust or unreasonable. Mr Melouney does not seek reinstatement as he has obtained alternate employment, but seeks compensation in the form of two weeks’ notice and six weeks of lost earnings.
 The Respondent advised that the legal entity which employed the Applicant was ACM Group Ltd, not ACMS as stated in the application. Pursuant to s.586 of the Act the application is amended to the extent that the employer of the Applicant is correctly identified.
 ACM Group Ltd is involved in debt recovery. The Applicant was employed as a full-time Collections Officer.
 On 27 June 2012, the Applicant was confronted with allegations regarding his conduct in denigrating his employer and encouraging other staff to leave the Respondent and work with a competitor. The Applicant denied such conduct ever occurred and as a result the Respondent determined that his employment should be terminated summarily.
 Mr Melouney, while representing himself before the Tribunal, prepared a statement and gave evidence. Mr Melouney did not call any witnesses to support his case.
 Mr Melouney stated that he was employed with the Respondent from 21 March 2011 until his summary termination on 27 June 2012, when he was approached by his Section Manager, Mr Dean Vieira, who asked him to attend the training room. The Respondent’s Chief Operating Officer, Mr Paul Brazabon also attended.
 Mr Melouney states that it was put to him that he was working for a competitor, Fox Symes and Associates Pty Ltd (Fox Symes), which Mr Melouney categorically denied. It was also put to him that he was at Fox Symes on 20 June 2012, to which he responded that he was off sick that day and had provided medical certification. Mr Brazabon then said that he had documentation stating that he had been trying to poach employees to go and work for Fox Symes. Mr Melouney requested a copy of the purported documentation, but Mr Brazabon would not provide a copy.
 Mr Brazabon summarily terminated his employment and then requested Mr Dean Vieira to escort him to his desk to collect his personal belongings. Mr Dean Vieira attempted to manhandle him in front of other staff towards the door before he could finish collecting all his personal items, he was shocked and upset.
 Mr Melouney claims that he was not given the chance to respond to the allegations nor verify who had made the allegations against him. He submitted that the Respondent’s witness statements dated 27 June 2012, contained material in response to his statement made on 3 September 2012, suggesting they were not made on the date indicated. He further submitted that the content of the written statements of Mr Brazabon and Mr Dean Vieira were extremely similar, indicating some collusion.
 Mr Melouney’s case was that he had no reason to encourage staff to leave ACM Group Ltd and join Fox Symes as he did not and had never worked for Fox Symes. He had not discussed with any of the Respondent’s staff about working for Fox Symes nor had he spoken ill of the Respondent or encouraged other staff to apply to work with Fox Symes. At the hearing he admitted to having attended a job interview with Fox Symes on 20 June 2012, and was later advised on 29 June 2012, that he was not successful in his job application.
 Mr Melouney told the Tribunal that although he was off sick on 20 June 2012, he had recovered sufficiently after visiting a medical practitioner to attend the Fox Symes interview that afternoon.
 Mr Melouney stated that staff within the ACM Group knew he had applied for work with Fox Symes and opined that someone from Fox Symes may have passed this on to the Respondent’s workforce.
 Mr Melouney submitted that in his view, he was unfairly terminated for having applied for a position at Fox Symes.
Respondent’s evidence and submissions
 The Respondent’s Managing Director, Mr Humberto Vieira presented the case for the Respondent.
 Mr Vieira submitted that the Applicant had engaged in unconscionable behaviour by promoting to staff that they should leave ACM Group Ltd to work for a competitor, Fox Symes. The decision to terminate the Applicant was taken after the Respondent became aware that two of its employees had been approached in this way by Mr Melouney. The employees, Mr Michael Fury and Ms Brodie Hayes provided written statements to the Respondent when requested to confirm their conversations with Mr Melouney.
 Mr Vieira stated that with over 260 employees it was not unusual for employees to seek employment elsewhere and this was not a factor in Mr Melouney’s dismissal.
 In support of the Respondent’s case, three witnesses were called to give evidence.
Evidence of Mr Paul Brabazon
 Mr Paul Brabazon, the Respondent’s Chief Operating Officer, had made a file note on 27 June 2012, concerning the events surrounding Mr Melouney’s dismissal, which he tendered; he also gave evidence before the Tribunal.
 Mr Brabazon stated that he received a phone call from Mr Dean Vieira stating that he had been informed by a staff member that Mr Melouney was approaching staff and trying to get them to leave ACM Group Ltd and work for Fox Symes. Mr Brabazon asked Mr Dean Vieira to arrange a meeting in the training room with the employees allegedly approached. Mr Furey and Ms Hayes both attended and confirmed the allegations. Mr Brabazon asked that they write a statement to that effect which they both did in the presence of himself and Mr Dean Vieira.
 Mr Melouney was then asked to attend the training room where the allegations were put to him. Mr Melouney denied that he had spoken to any staff about leaving ACM Group Ltd nor had he encouraged them to seek work with Fox Symes.
 Mr Brabazon stated he did not provide Mr Melouney with a copy of the statements that he had received from two employees nor would he identify the authors as he was concerned with their privacy and Mr Melouney’s possible reaction to these staff members.
 Mr Brabazon told the Tribunal that had there been only one statement made against Mr Melouney he would not have acted to terminate him. However, as there were two staff members giving independent statements against Mr Melouney regarding separate incidents, he determined that the events as alleged had occurred and he could not allow the services of Mr Melouney to continue.
Evidence of Ms Brodie Hayes
 Ms Brodie Hayes tendered a witness statement and gave evidence before the Tribunal. Ms Hayes deposed that on 18 June 2012, Mr Melouney approached her and advised that he had been offered a job interview at Fox Symes but was not sure when it would be.
 On 21 June 2012, he approached Ms Hayes again and told her he had attended his job interview at Fox Symes the previous day. He advised her to do the same and that she would be crazy to stay when Fox Symes was offering more money. Ms Hayes advised Mr Melouney that she was not interested however; he still continued to encourage her to leave ACM Group Ltd.
 Ms Hayes advised the Tribunal that she had friends who worked at Fox Symes but that she had never applied for a position with Fox Symes.
Evidence of Ms Michelle Delamere
 Ms Michelle Delamere was not listed to give evidence in this matter, but did so on the basis that the Respondent’s anticipated witness, Mr Furey had advised the Respondent on the weekend before the Monday Tribunal hearing that he intended resigning and would not be attending the hearing.
 Ms Delamere had prepared a statement dated 27 June 2012, which was tendered and Mr Melouney was provided with time to read Ms Delamere’s statement.
 Ms Delamere’s evidence was that Ms Hayes and Mr Furey had both approached her as a senior staff member and relayed to her that Mr Melouney had told them he was leaving to work with Fox Symes and that they should leave with him. Mr Melouney had told them that they would be better off leaving, as ACM Group Ltd would not look after them and they were not a good company to work for.
 Ms Delamere then contacted her Section Manager, Mr Dean Vieira, and recounted the conversation.
 Ms Delamere stated that there were rumours in the office that Mr Melouney was leaving and she had been told by an employee at Fox Symes, Mr Trevor Anderson, that Mr Melouney had been granted an interview. She prepared her statement on the afternoon of 27 June 2012, after being asked to do so by Mr Dean Vieira over the telephone, as she was at home sick that day.
Evidence of Mr Dean Vieira
 Mr Dean Vieira, the Respondent’s Section Manager, tendered a statement of events he prepared on 27 June 2012, and gave evidence before the Tribunal. Mr Dean Vieira stated that on 27 June 2012, he was notified by senior staff member, Ms Michelle Delamere that Mr Melouney was approaching other staff and asking them to leave ACM Group Ltd and work for Fox Symes. He subsequently contacted Mr Brabazon who came to his office to discuss the matter.
 Mr Dean Vieira then contacted both Mr Furey and Ms Hayes and they were interviewed regarding the contact they had received from Mr Melouney. Ms Hayes told Mr Dean Vieira and Mr Brabazon that Mr Melouney had approached him on a number of occasions to go and work for Fox Symes. Both Mr Furey and Ms Hayes wrote statements confirming what they had advised Mr Dean Vieira and Mr Brabazon.
 Mr Dean Vieira and Mr Brabazon interviewed Mr Melouney, where the allegations were put to Mr Melouney, which he refuted, stating they were all lies. He was asked whether he had anything else to add to the claims made by the two staff members, to which he replied “no”. Mr Melouney was not told which staff members had made the allegations or given a copy of their statements.
 Mr Brabazon advised Mr Melouney that as he had nothing further to add, and based on the two statements he had from staff members, Mr Melouney would be dismissed for serious misconduct. Mr Dean Vieira then escorted Mr Melouney to his work station to collect his possessions. Mr Melouney was swearing and conducting himself in a loud and aggressive manner. Mr Dean Vieira denied physically manhandling the Applicant at any stage during this process.
 Mr Humberto Vieira concluded the Respondent’s case by submitting that none of its witnesses had any cause not to tell the truth and that the Respondent, in being confronted with an employee who was encouraging staff members to leave and making disparaging comments about his employer to other staff members was entitled to summarily dismiss Mr Melouney.
 Mr Vieira submitted that while it is not unusual for employees to seek employment elsewhere, this is never considered a reason for their termination of employment. In Mr Melouney’s case, he was denigrating his employer to other staff members and encouraging them to leave and work for a competitor, contrary to his obligation of good faith to his employer.
 Pursuant to sub-s.385(b) of the Act, the Tribunal must determine whether the dismissal was harsh, unjust or unreasonable.
 Section 387 of the Act sets out the matters the Tribunal must take into account in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable:
(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 FWA considers relevant.
 I deal with these issues below:
(a) Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct (including its effect on the safety and welfare of other employees)?
 In cases of summary dismissal, the Respondent bears the onus of establishing the serious misconduct that justifies the summary termination having occurred. The test this Tribunal applies under the Act (see Harley v Rosecrest Asset Pty LTd t/a Can Do International  FWA 3922) is whether the employer can demonstrate it had reasonable grounds for holding the belief the employee is guilty of misconduct.
 The Respondent has stated that it acted immediately on becoming aware that Mr Melouney was encouraging other staff to leave and join a competitor. The Respondent’s management spoke to two of its employees who confirmed they were approached by Mr Melouney where he criticised the Respondent and stated generally that they would be better off leaving and joining a competitor.
 In the Federal Court decision of Serventi v John Holland Group Pty Ltd, Madgwick J stated:
‘An employer is entitled to summarily dismiss an employee for serious and wilful misconduct. Such misconduct must be of a kind that, as a practical matter, is likely to make maintenance of the contract of employment impractical.’ 1
 In the Victorian Supreme Court decision of Sent v Primelife Corporation Ltd, Mandie J stated:
‘Serious misconduct in this context has been held to include conduct, in relation to important matters, that constitutes a repudiation of or is incompatible with or repugnant to the essential obligations of an employee …’ 2
 The need for there to be trust and confidence between an employer and an employee is an essential component of an employment contract. Conduct that meets the test of serious misconduct will constitute repudiation by the employee of the employment contract because it will be conduct that is repugnant to the essential obligations of the contract.
 In Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 the Full Court of the Industrial Relations Court of Australia considered that there was ample English authority for the implication of a term of trust and confidence into a contract of employment.
 In Woods v WM Car Services (Peterborough) Ltd  IRLR 347 Brown-Wilkinson J it was stated:
‘In our view it is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: Courtaulds Northern Textiles Ltd v Andrew’ IRLR 84.
 In this case the Respondent was faced with evidence from two of its employees that Mr Melouney was conducting himself in a manner inconsistent with his duty of good faith, and trust and confidence to his employer. Mr Melouney denied the allegations. The employer chose not to believe Mr Melouney over its employees Ms Hayes and Mr Furey.
 The loss of confidence between the parties is further exacerbated in this case as Mr Melouney denies outright the conduct which his employer believed he undertook. I have no reason not to accept the evidence of the Respondent’s witnesses. Ms Hayes’ evidence was that Mr Melouney approached her and advised her that she would be crazy to stay with the Respondent. Ms Delamere stated that both Mr Furey and Ms Hayes relayed to her what Mr Melouney had told them. While Mr Furey did not give evidence and his statement was not admitted into evidence, I accept Ms Delamere’s evidence that Mr Fury approached her and relayed his conversation with Mr Melouney which the Respondent has subsequently acted on.
 Mr Melouney argues that the conversations, alleged to have taken place between Ms Hayes, Mr Furey and himself never occurred.
 None of the Respondent’s witnesses were seriously challenged on their evidence under cross-examination. Having heard the evidence as presented, I accept the Respondent’s position that Mr Melouney did in fact denigrate his employer to other staff and encouraged them to leave the Respondent and work for a competitor.
 I also note, that all the Respondent’s witness statements and file notes were written contemporaneously and despite Mr Melouney’s submission to the contrary, there was nothing put to the Tribunal to demonstrate that the statements were other than contemporaneous records.
 I find that where an employee is encouraging other employees to leave their employer and work for a competitor by making disparaging remarks about their employer, a valid reason exists for the termination of the employment contract on the basis that the conduct is likely to destroy or seriously damage the relationship of confidence and trust between the parties.
(b) Was the person notified of that reason?
 Although Mr Melouney did not accept the reason provided by his employer, Mr Melouney was told why he was being terminated.
(c) Was the person given an opportunity to respond to any reason related to the capacity or conduct of the person?
 Mr Melouney was given an opportunity to respond and he denied the offending conduct had occurred. His witness statement deposes that his reply to the allegations was “this is rubbish”. In his oral evidence he stated he said “this is bullshit”. He would have preferred the opportunity to view the employee statements the Respondent stated it was relying on, but they were not provided. This in my view was a defect in the Respondent’s procedure which is discussed below.
(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.
 The issue of a refusal of a support person did not arise in this matter, Mr Melouney was not offered nor did he request a support person. As a matter of good human resource management the offer of a support person would have been preferable.
(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal.
 This matter did not relate to performance issues of the Applicant, but to conduct unrelated to the performance of his work duties as a Collections Officer.
(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.
 No evidence was put before the Tribunal regarding the Respondent’s human resources capacity. On the size of the employer (260 plus employees), it could be assumed that there would be person(s) employed in human resources. On the evidence presented to the Tribunal, no human resource personnel appeared to be involved in the termination process.
(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.
 As stated above, no evidence was put before the Tribunal regarding the Respondent’s human resource management capacity and expertise.
(h) Any other matters that FWA considers relevant.
 In this matter, Mr Melouney argues that having been told employees had made statements about him, he wasn’t told, despite his requests, who had made the complaints and was denied a copy of the statements the Respondent was relying on.
 The Respondent argues that for privacy reasons, and not knowing how Mr Melouney would react to the staff that had made the complaints, it was not willing to provide this information.
 I regard the actions of the Respondent in not informing Mr Melouney who was making the allegations regarding his conduct as a denial of natural justice to a limited extent. Where the Respondent is contemplating the dismissal of an employee, it is significantly more difficult for an employee to respond fully and in a learned fashion to the allegations made against him when the source of the statements is not known and a copy not provided.
 However, in this case, as the conversations are completely denied, as opposed to Mr Melouney putting them in a different context, or arguing that the particular employees have an ulterior motive for making the statements, knowing the identity of the employees is less crucial in this case. Mr Melouney simply submits the conversations never took place.
 I also find that Mr Melouney did not assist his claim when he deposes in his written statement that when asked by Mr Brazabon what he was doing at Fox Symes on 20 June 2012 he responded:
‘I said I’m sorry but I was off sick and I provided medical documentation to that effect from my GP.’
 In Melouney’s oral evidence he told the Tribunal that he actually was at Fox Symes that afternoon attending a job interview after visiting the doctor.
 Having heard the evidence in this matter I am not persuaded that the witness evidence of the Respondent is not an accurate recollection of the events as they occurred. As such for the above reasons, the summary termination of Mr Melouney was not conducted in a manner or carried out in circumstances that would make the termination harsh, unjust or unreasonable.
 The application is dismissed.
M Melouney on his own behalf.
H Vieira for the Respondent.
1  FCA 1049, .
2  VSC 445, .
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