FWC 1077
FAIR WORK COMMISSION
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Roderick Macdougall
SCT Pty Limited T/A Sydney City Toyota
SENIOR DEPUTY PRESIDENT HAMBERGER
SYDNEY, 25 MARCH 2013
Application for unfair dismissal remedy.
 Mr Roderick Macdougall (the applicant) made an application to Fair Work Australia on 3 October 2012 for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 in relation to the termination of his employment by SCT Pty Limited t/a Sydney City Toyota (the respondent, SCT). The matter did not settle at conciliation and was referred to me for determination.
 A hearing was conducted in Sydney on 7 and 8 February 2013. Mr D Le Page, solicitor appeared for the applicant and Mr S Gladman, counsel appeared for the respondent.
 Mr Macdougall gave evidence on his own behalf. Ms Jessica Lo Ricco, Human Resources Advisor, Mr Peter Toman, General Sales Manager, and Mr Dane Huxley, Service Advisor, gave evidence on behalf of the respondent.
 I am satisfied that the Commission has jurisdiction to deal with the application. The issue to be determined is therefore whether the dismissal of the applicant was harsh, unjust or unreasonable.
 The applicant had been employed by the respondent since January 2004, and was a Government Fleet Sales Executive at the time of his dismissal. He was summarily dismissed on 20 September 2012.
 The applicant’s role as Government Fleet Sales Executive was to focus on the sale of Toyota cars to government. Among other things, he was entrusted to deal personally and directly with government customers in relation to sales of Toyota cars; and to assist SCT in managing its long-term relationships with customers. 1
 The incident that triggered the applicant’s dismissal occurred on 18 September 2012. It is not in dispute that there was an altercation that morning between Mr Macdougall and Mr Phillip Leary, an employee of one of the respondent’s customers. It is not in dispute that Mr Macdougall lost his temper, was rude to Mr Leary and used offensive language. The incident occurred near the customer lounge and service reception area. The respondent received an email complaining about the conduct of the applicant later that day.
 There were two meetings between the applicant and the respondent in relation to the incident. The first took place between Mr Macdougall, Mr Toman and Ms Lo Ricco on 19 September 2013. The second was on 20 September 2013, after the respondent had undertaken an investigation into the incident, again involving the applicant, Mr Toman and Ms Lo Ricco. Shortly after the conclusion of that meeting Mr Toman handed the applicant a letter confirming the termination of his employment. The letter identified the reason for his dismissal as ‘conduct which caused an imminent risk to the reputation and profitability of Sydney City Toyota’ 2
 Mr Macdougall’s version of the incident was set out in his statement.
‘24. In or about July 2012, Mr Leary from the University of NSW attended the Respondent’s showroom, inspecting and seeking information about the new Toyota Camry Hybrid. I showed Mr Leary the Toyota Prius and the Toyota Camry Hybrid, and I provided him with information about both cars. I estimate that I was with Mr Leary for 20 minutes, and we discussed the attributes of both cars while Mr Leary sat in a Toyota Camry Hybrid. On leaving, he said to me words to the following effect:
“You’ll get the order next month.”
25. I had spoken to Mr Leary and shown him cars at the Respondent’s premises on a number of occasions in prior years. I understood that he was a driver for the University of New South Wales. He had driven me back to the Respondent’s dealership on various occasions, after I had delivered a car to the University of New South Wales. I understand now that he is the driver for the Vice Chancellor of the University.
26. On 18 September 2012, at about 9:30am, I was upstairs at the service reception area, attending to a service matter with a customer. On approaching the customers’ lounge, I saw Mr Leary standing near the door to the lounge. There were a number of people in the lounge and service area, but none standing near Mr Leary.
27. I approached Mr Leary, we greeted and exchanged pleasantries in the normal way. We then had a conversation to the following effect:
Macdougall: “Well, what are you doing here?”
Leary: “I’ve brought the car in for service.”
Macdougall: “Which car?”
Leary: “The Camry Hybrid.”
Macdougall: “What Camry Hybrid?”
Leary: “That one”, and he pointed to a white Toyota Camry Hybrid.
Macdougall: “Where did you get that one?”
Leary: “Chatswood Toyota.”
Macdougall: “I thought that we were going to get the order for that one.”
Leary: “I don’t know what happened. We got it at Chatswood.”
Macdougall: “Well I guess that means that you wasted my fucking time.”
Leary: “You will have to speak to Estely Pruze about that.”
I knew Ms Pruze well from previous dealings. She was the Manager at the University of NSW for Fleet Services. She had had responsibility for the ordering of new cars for the University until that responsibility was placed with LeasePlan (subject to any directions from Ms Pruze) about three or four years ago. The conversation with Mr Leary continued in words to the following effect:
Macdougall: “You can tell Stella that I am very upset.”
Leary: “You will have to take it up with her.”
Macdougall: “I have to go. I’ve got another customer.”
I then walked back to the customer with whom I had been dealing, who was standing some ten metres way in the parking area. I didn’t speak to Mr Leary again.
28. I acknowledge that I lost my temper, that I was rude to Mr Leary and that I used offensive language. I deny that I was aggressive to Mr Leary, or that I swore at him personally.’ 3
 In cross examination Mr Macdougall agreed that the customer service reception area is a high traffic area for customers. 4 The applicant admitted that he became angry toward the end of his discussion with Mr Leary.5 He denied that he said ‘Have you ordered that fucking car yet?’6 He also denied that he used the word ‘fucking’ more than once7, that the altercation was very heated8, or that he was shouting9. He disagreed that there was any tension between himself and Mr Leary or that he questioned Mr Leary in an aggressive manner. The applicant also denied that he swore at Mr Leary. He said that if he was going to swear at someone it would be directly at them, such as ‘eff off’.10
 Mr Huxley gave evidence that on 18 September 2012 he witnessed an altercation between the applicant and a customer. He did not know the customer’s name however he did know that he worked for a university and that he was a regular customer of the service department. 11
 In his witness statement he said he did not know what the altercation was about but that it was very heated. He said that there was definite tension between the applicant and the customer and that he would describe the applicant’s behaviour as pretty aggressive. Mr Huxley stated that the applicant raised his voice and that he did so in front of other customers right outside the service reception area. Mr Huxley said that he heard the word ‘fuck’ at least two times. He did not hear the customer swear. 12
 Under cross examination Mr Huxley stated that he was approximately four to five metres away from where the applicant and Mr Leary were standing. 13 He also stated that he did not hear the whole conversation; however he heard voices being raised and swear words.14
 Mr Huxley was in effect an independent witness to the altercation, with no particular interest in the matter. To the extent that there is conflict between his version of the incident and that of the applicant I prefer his version. Accordingly therefore I find that the altercation was very heated, there was tension between the applicant and Mr Leary, the applicant was ‘pretty aggressive’, he raised his voice, in front of other customers and swore at least twice.
 In her statement Ms Lo Ricco said that the respondent had received a complaint via an email from Mr Mark Gilbert, Dealer and Pricing Manager, LeasePlan Australia from Ms Estely Pruze, Manager – Fleet, the University of New South Wales on 18 September 2012 relating to an incident that had occurred earlier that day between the applicant and Mr Leary. 15 The email was attached to Mr Toman’s statement.16 In the email Mr Gilbert forwarded a complaint from Estely Pruze to him. He indicated that he had spoken to her and asked permission to forward the complaint to the respondent. Ms Pruze’s complaint was as follows:
‘As per our conversation, I would like to lodge a formal complaint against a Mr Rory McDougall from Sydney City Toyota - Waterloo.
Mr Leary attended the dealership about two months ago to obtain information on the Camry Hybrid and received a brochure from Mr McDougall.
When time came to place the order on the vehicle I did it through the LeasePlan portal and the order was allocated by the system to Chatswood Toyota.
The Vice Chancellor's driver, Mr Phillip Leary went to collect vehicle Camry Hybrid, licence plate BQ50ZL from service this morning (18 September 2012) and was very rudely questioned by Mr McDougall as he recognised him from the previous time he was there to collect the brochure.
He proceeded to question Mr Leary in an aggressive manner as from which dealership he obtained the vehicle and how he wasted his time.
Mr Leary explained that he does not order the vehicle, as he is only the driver to the Vice Chancellor of UNSW and if he had any comments to speak to Estely Pruze, Fleet Manager at UNSW. While Mr Leary was trying to say all this is Mr McDougall was complaining very rudely and walking away from him.
I wanted to raise this issue with you as we do not tolerate this kind of behaviour towards any of UNSW staff when they are taking vehicles in for service. If Mr McDougall has any issues he should have spoken directly to me as the main point of contact. This behaviour is a reflection on Sydney City Toyota customer service.’
 In his statement, Mr Toman provided some background to the relationship between the respondent, LeasePlan Australia and the University of New South Wales.
‘23. LeasePlan Australia is a Fleet Management Organisation, which is an organisation that acts as a "broker" to obtain fleet vehicles on behalf of its customers, including the University of New South Wales. When a customer approaches a Fleet Management Organisation to obtain a new vehicle, the Fleet Management Organisation will seek quotes from the car dealerships that are placed on its preferred dealership list. It will then place the order with one of those dealerships and ensure that the vehicle is delivered to the customer.
24. SCT maintains important relationships with Fleet Management Organisations as well as the ultimate customers. It deals directly with customers in relation to the service of their vehicles. It also deals directly with customers when they wish to obtain information about different vehicles before placing an order with the Fleet Management Organisation.
25. At the time the complaint was made, SCT was involved in a tender process with LeasePlan Australia to remain a "preferred Toyota dealership" for a three-year period. It was crucial that SCT succeed in its tender because LeasePlan Australia deals only with car dealerships that have “preferred Toyota dealership" status. If SCT had not succeeded in the tender, it would have lost a significant amount of business from the University of New South Wales and numerous other customers that deal with LeasePlan Australia. In addition, at the time the complaint was made, the University of New South Wales was about to commence its own tender process for Fleet Management Organisations. LeasePlan Australia was one of the Fleet Management Organisations that would participate in the tender process.’
 During his cross-examination Mr Toman explained that there are only two or three dealers in Sydney out of 22 that have the status of a ‘preferred Toyota dealership’. ‘And then once you've got that status, you simply receive orders from them, so that's quite valuable. The hard work is done in gaining that status, and then maintaining it.’ 17 LeasePlan is the biggest Fleet Management Organisation that the respondent has a relationship with.18
 On 19 September, according to his statement, Mr Toman went to the University of New South Wales to discuss the complaint with Ms Pruze. 19
 Ms Lo Ricco sent a written notice to the applicant on 19 September requiring him to attend a meeting with management at 4.00 pm that day. He was notified that the subject of the meeting was an investigation into allegations of conduct impacting on the respondent’s reputation and profitability. In his statement the applicant said that it occurred to him that the meeting might concern the incident with Mr Leary. 20 He was given an opportunity to bring a support person with him and told that if he needed more time to schedule the meeting to let Ms Ricco know.21
 .Ms Lo Ricco attached to her statement notes that she said she had made during the meeting summarising the discussion. 22 According to these notes, Mr Toman provided the applicant with a printed copy of the complaint and asked for his response. The applicant said that Mr Leary and he ‘did have words’. He had told Mr Leary he was disappointed with him and that he asked why the car had been bought from Chatswood Toyota. He denied that he had been aggressive. He denied swearing at Mr Leary.
 In Mr Toman’s statement he indicated that he told the applicant that the customer had complained that he had twice sworn at him using the word ‘fuck'. According to Mr Toman, the applicant replied ‘I would deny that. I would deny using the word ‘fuck’ to the customer.’ 23
 During his cross-examination the applicant agreed that he had denied using the fuck word to the customer. He said that he had told Mr Toman that he would never swear at a customer. 24 However his evidence was that he told Mr Toman that he had probably said to the customer ‘you've wasted my fucking time’.
 Ms Lo Ricco stated that Mr Toman made the applicant aware of the seriousness of the allegations particularly as the respondent was currently involved in phase two of a tender process with LeasePlan as a preferred Toyota dealership. The applicant was told that because of the seriousness of the complaint he was suspended on full pay pending the outcome of an investigation. A further meeting was scheduled for 4:00 pm the next day.
 On 20 September Mr Toman spoke to Mr Huxley and Mr Leary. 25 Based on the accounts of the incident given by both Mr Huxley and Mr Leary, Mr Toman and Ms Lo Ricco made the decision that unless the applicant could provide further relevant information relating to the incident he would be summarily dismissed.26
 At the meeting held with the applicant on 20 September Mr Toman asked the applicant if he had anything he wished to add for SCT’s consideration. According to the applicant’s statement he responded along the following lines:
‘I agree that I was rude to Mr Leary, and I am sorry for that. However I feel as though I have been marginalised, and you have put me under a lot of pressure.’
 The applicant also offered to apologise to Mr Leary. 27
 The applicant denied during cross-examination that he had been aggressive or had sworn at the customer. 28
 At that meeting the applicant raised a concern relating to Mr Toman’s management style. According to Mr Toman's statement, the applicant said
‘As a supervisor, you could have helped out and put me under less stress and given me more deals. I feel you have marginalised me and I'm not happy about that.’ 29
 The applicant was asked to leave the room so that Ms Lo Ricco and Mr Toman could discuss the matter. Ms Lo Ricco stated that she and Mr Toman agreed that the performance matter raised by the applicant was not relevant to the complaint they were investigating. The applicant was then recalled to the room and Mr Toman informed him that the performance issue was a separate matter. Ms Lo Ricco stated that she then recalled that Mr Toman told the applicant he was summarily dismissed. The applicant then asked if there was anything he could say to change SCT’s mind. Ms Lo Ricco recalled that Mr Toman told the applicant that his actions were not appropriate given his role and SCT’s strong customer service philosophy. The applicant’s conduct towards the customers was considered by SCT to be extremely serious and placed the reputation of the company and their profitability in jeopardy. The applicant’s actions meant that SCT could no longer trust him in his role. The applicant was informed both verbally and in writing that he was summarily dismissed due to conduct which caused imminent risk to the profitability and reputation of the business. 30
 In his written statement, the applicant referred to his record of service.
‘35. Until the incident on 18 September 2012, no complaint about my behaviour in the near nine years of employment with the Respondent was ever referred to me, and I'm not aware that any was ever made.
36. To the best of my recollection, for the last six or seven years of my employment, I achieved membership of the Toyota Sales Society at a senior level. This is a standard prescribed by TMCA for superior performance in the sale of motor vehicles. This resulted in the payment of a bonus each year of some $1,200.
37. In or about August 2012 and September 2012, I received an award from the Respondent for outstanding customer service, and received each occasion a voucher for $100. The award is made following the return to the Respondent of a report from a customer which records a perfect score for customer sales service. I had received this award on a number of occasions previously.’ 31
 Mr Tomin’s evidence was that all the respondent’s government and fleet sales staff would be expected to be members of the Toyota Sales Society, given the size of the dealership. 32 He also said the $100 vouchers were not an award, but an incentive to encourage sales staff to gain 100 per cent survey score forms. ‘Receiving a couple of incentives is not really representative of the big picture.’
 In her statement, Ms Lo Ricco said that:
‘7. I spoke to Mr Gino Macolino, the former Fleet Sales Manager of SCT on a handful of occasions regarding the Applicant’s performance. I am aware that Mr Macolino held a few informal discussions with the Applicant regarding his performance during the time I have been employed with SCT.
8 In the Outline off Applicant’s Submissions dated 10 December 2012, the Applicant states that, but for the incident on 18 September 2012, he had an “unblemished sales record and service record with the Respondent". This is not the case. On 19 April 2012 Mr Macolino sent an e-mail to me in which he expressed his discontent with the applicant's performance.... On the 18 April 2012, the Applicant and Mr Macolino discussed his “constant poor results” and Mr Macolino notified the Applicant that his performance needed to be “turn(ed) around immediately" otherwise formal disciplinary action would be undertaken. Shortly after the discussion between Mr Macolino and the Applicant, on 9 August 2012, Mr Macolino resigned from his employ with SCT.’ 33
 Ms Lo Ricco attached Mr Macolino's e-mail to her statement. It reads:
I formerly (sic) put Rory on notice yesterday re his constant poor results and advised him that I’d basically be performance managing him from here on in and would issue him with his first written warning if it is not turned around immediately.
I have asked him to come back to me by Monday with a plan on how he's going to turn it around or stop
What else do I need to do?
 In his statement in reply the applicant denied that Mr Macolino ever made any reference to him concerning ‘constant poor sales results’ that he would be ‘performance managed’, or that he would receive a written warning if his performance did not improve. 35 During cross examination, the applicant continued to deny that he had been formally put on notice about his performance by Mr Macolino. He agreed however that he had had discussions with him saying ‘Look, things aren’t going good. You know, we’ve got to sell more cars.’36
 During cross-examination Mr Toman gave evidence that the respondent’s government sales were declining at a much greater rate than the total Toyota dealership group. He largely put this down to poor performance by Mr Macdougall. In particular some accounts had been lost because procurement staff did not like dealing with him. 37 He had not personally spoken to Mr Macdougall about these issues.38 When asked whether these matters played any part in his consideration of Mr Macdougall's circumstances when he was deciding whether or not to keep him he replied:
‘ Look, for me the main factor was his behaviour on that occasion. But obviously in the back of my mind there had been similar or some other occasions where people have had to issue with his dealings with them, and so yes it played a part.” 39
 In considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account the factors referred to in s. 387 of the Act. These are:
‘(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 will deal firstly with whether SCT had a valid reason to terminate the applicant’s employment. The basic facts concerning the incident on 18 September 2012 are not in dispute. The applicant concedes that he was rude to Mr Leary, that he lost his temper and that he used offensive language. I was not impressed by the applicant’s attempt to split hairs by suggesting that he did not ‘swear at’ Mr Leary. Even accepting his own version, his comments were directed at Mr Leary, and referred to ‘wasting my fucking time’. That in my view clearly constitutes swearing at Mr Leary. Moreover as previously indicated, I am satisfied, based on Mr Huxley’s evidence, that the altercation was very heated, there was tension between the applicant and Mr Leary, the applicant was ‘pretty aggressive’, he raised his voice in front of other customers and swore at least twice. It is not in dispute that the altercation was initiated by the applicant. Mr Leary appeared to be largely passive in the incident, suggesting that the applicant needed to take the matter up with Ms Pruze.
 This was not just ‘an argument between two men’ as Mr Le Page sought to characterise it. 40 Mr Leary was a representative of one of the respondent’s customers. A key part of the applicant’s job was to maintain good customer relations. It would be hard to conceive of behaviour less conducive to achieving this goal than that engaged in by the applicant during the incident in question.
 The letter of termination referred to ‘conduct which caused an imminent risk to the reputation and profitability of Sydney City Toyota’. This is a perfectly reasonable description of what occurred. Mr Le Page submitted that there was no evidence of any such risk. This is not correct. The email from Mr Gilbert included the following statement by Ms Pruze:
‘This behaviour is a reflection on Sydney City Toyota customer service’.
 The email, coming as it did via Mr Gilbert is direct evidence that Mr Macdougall’s behaviour put at risk the respondent’s reputation both with LeasePlan Australia and the University of New South Wales, two important customers. The fact that the altercation took place in front of other customers was also likely to put at risk the respondent’s reputation. The seriousness of the incident was magnified because of the two tendering processes then in train, involving LeasePlan and the University of New South Wales. In particular, the loss of the preferred dealership status with LeasePlan Australia would have had a serious deleterious effect on the respondent.
 While issues concerning the applicant’s performance were raised during the proceedings, I am satisfied that the respondent had a valid reason for the termination of the applicant’s employment based solely on the applicant’s conduct during the incident with Mr Leary.
 I am also satisfied that the applicant was notified of the allegations against him, and given an opportunity to respond to them, during his interviews on 19 and 20 September 2012. The applicant was not prevented from having a support person present at any discussions relating to his dismissal.
 Criteria f), and g) in s.387 are not relevant to this case. There are no other factors I consider relevant.
 I find that the termination of the applicant’s employment was not harsh, unjust or unreasonable. The application is dismissed.
SENIOR DEPUTY PRESIDENT
Mr D Le Page for the applicant and Mr S Gladman for the respondent
1 Exhibit SCT2, PN140-142
2 Exhibit M1, attachment D
3 Exhibit M1, paragraphs 26, 27 and 28
5 PN179, PN200
11 Exhibit SCT3, paragraph 3
12 Exhibit SCT 3, paragraph 4
15 Exhibit SCT 1, paragraph 12
16 Exhibit SCT2, attachment 5
19 Exhibit SCT2, paragraph 28
20 Exhibit M1, paragraph 29
21 Exhibit SCT 1, attachment 6
22 Exhibit SCT 1, attachment 7
23 Exhibit SCT2, paragraph 32
25 Exhibit SCT2, paragraphs 36-7
26 Exhibit SCT2,. Paragraph 38
27 Exhibit M1, paragraph 31
29 Exhibit SCT 2, paragraph 42
30 Exhibit SCT1, paragraphs 43-48
31 Exhibit M1, paragraphs 35-37
33 Exhibit SCT 1, paragraphs 7-8
34 Exhibit SCT 1, attachment 1
35 Exhibit M2, paragraph 7
37 PN798, PN854
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