[2014] FWC 5894 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Lance Camilleri
v
IBM Australia Limited
(U2014/5954)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN |
ADELAIDE, 10 SEPTEMBER 2014 |
Application for relief from unfair dismissal - failure to comply with company requirements - valid reason - fair process - harsh, unjust or unreasonable - reinstatement.
[1] On 25 March 2014 Mr Camilleri lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) relative to the termination of his employment with IBM Australia Limited (IBM). That application was unable to be settled through the conciliation process and was consequently referred to me for arbitration.
[2] It was the subject of a hearing on 14, 15 and 22 August 2014. At this hearing Mr Camilleri was represented by Mr S Bourne, of counsel and IBM by Mr Colgrave of counsel. Grants of permission were made pursuant to s.596(2)(a) in each instance.
[3] No initial or jurisdictional issues are associated with the application.
[4] Mr Camilleri worked for IBM for some 17 years. Prior to the termination of his employment Mr Camilleri had an unblemished employment history. At the time of the termination of his employment he was a Technical Project Manager/Managing Consultant. From March 2011 to September 2012 Mr Camilleri was engaged on an IBM project in Melbourne which generally required him to travel from his home in Adelaide and be accommodated in Melbourne. The termination of his employment followed an investigation undertaken by the IBM Internal Audit function which commenced in May 2013. Mr Camilleri met with IBM Internal Audit and human resources personnel on 8 November 2013. In the days following that meeting Mr Camilleri provided various emails relative to the matters raised with him. The IBM Internal Audit function report was provided to the IBM Disciplinary Action Review Committee (DARC). That investigation concluded that during the period from October 2011 to 26 September 2012 Mr Camilleri made various expense related claims in breach of IBM policies, practices and code of conduct. The DARC endorsed termination of Mr Camilleri’s employment as the appropriate sanction.
[5] On 23 December 2013 the IBM Managing Director agreed with the proposal for the termination of Mr Camilleri’s employment.
[6] On 21 January 2014 IBM provided Mr Camilleri with formal advice of the Internal Audit investigation which foreshadowed termination of his employment and effectively required him to show cause as to why this dismissal should not be effected. This advice advised Mr Camilleri of his immediate suspension, with pay, and requested him to respond by 23 January 2014.
[7] IBM emailed Mr Camilleri on 22 January 2014, asking about his response. On 23 January 2014 Mr Camilleri provided an email response in which he advised of his previously approved annual leave commencing on 24 January 2014 and a planned overseas trip. He requested an extension of time to respond until 21 February 2014. IBM approved this request.
[8] The allegations made against Mr Camilleri are particularly significant in this matter. These allegations were set out in Mr Duckworth’s letter to him of 23 January 2014. IBM confirmed its Internal Audit conclusion that, in the period from 30 October 2011 to 26 September 2012 Mr Camilleri submitted inappropriate claims for 141 night expenses, in the form of per diem payments for nights when he was not in Melbourne on IBM business. I have referred to this allegation as ‘the per diem issue’.
[9] Secondly, IBM asserted that Mr Camilleri claimed reimbursement for air travel to the Gold Coast from Melbourne for a personal trip. I have referred to this allegation as ‘the Gold Coast trip issue’.
[10] Thirdly, IBM asserted that Mr Camilleri used his personal credit card to make payments associated with accommodation payments for the period in which he was accommodated in Melbourne. IBM asserts that Mr Camilleri should have used his IBM provided credit card. I have referred to this as ‘the credit card issue’.
[11] Mr Camilleri provided a detailed response to the allegations on 21 February 2014. 1 In that response he referred to his employment history and record and advised that, had the IBM expense reimbursement system identified these matters at an earlier time, he would have then addressed them. Mr Camilleri confirmed his earlier advice that the per diem issue reflected an error on his part, that he only became aware of this in the discussions with the IBM Internal Audit personnel in November 2013 and that he was prepared to repay any amounts to which he was not entitled. With respect to the Gold Coast trip issue, Mr Camilleri advised that he considered he had approval to undertake that travel but that nevertheless he was prepared to pay the additional expense incurred by IBM as a consequence of it. Relative to the credit card issue, Mr Camilleri agreed that he did not use the IBM corporate credit card but did not believe this resulted in IBM incurring any additional costs. Mr Camilleri argued that, given the time since these events occurred, termination of his employment was not appropriate and that the process followed by IBM with respect to these issues was unfair.
[12] On 7 March 2014 Mr Camilleri was advised of the termination of his employment in a meeting with the IBM GBS Business Partner, Mr Duckworth and Ms Muir, an IBM Human Resources Case Manager. He was provided with written advice confirming the IBM position and was paid four weeks pay in lieu of notice.
The Submissions
[13] Mr Camilleri’s position is that the per diem issue reflected inadvertent claims that arose from the circumstances under which his accommodation and work in Melbourne was undertaken, that it reflected an honest mistake rather than an intention to defraud IBM. Mr Camilleri obtained approval to stay in accommodation which was prepaid on a monthly basis and then submitted his per diem claims in a series of batches, specifying start and finishing dates but not identifying days when he was not in Melbourne. Notwithstanding his position that this reflected an honest error, Mr Camilleri asserts that he had always understood that the IBM expense claims system would identify errors of this nature. In terms of the Gold Coast trip issue, Mr Camilleri’s submission is that he had approval to undertake that travel and that this matter did not represent misconduct. Finally, in terms of the credit card issue, Mr Camilleri asserts that on other occasions when he had used his personal credit card he has been reminded to use the IBM card, as that reflects a preference, but that he was not aware that this was a direction and, in any event, it was not a matter which should have been determinative of his employment. In respect of the credit card issue, Mr Camilleri’s position was that he had, in November 2012 been counselled in relation to this issue such that the matter was resolved.
[14] Mr Camilleri asserts that the alleged breaches of the IBM policies did not support the decision to terminate his employment. Additionally, he asserts that any errors he made relative to expense claims were honest mistakes and, in that respect, he offered to make appropriate restitution and fully cooperated with the investigation. Accordingly, and taking into account his long period of unblemished service, he asserts that there was no valid reason for the termination of his employment.
[15] In terms of the termination of employment process, Mr Camilleri asserts that the Internal Audit investigation was flawed in that it did not involve all of the appropriate interviews with his managers at the time. Further, that the delay in notification of the investigation such that the events in question occurred some 14 months earlier, represented an inherent unfairness. Finally, Mr Camilleri asserts that the fact that, after he was advised of the allegations he remained at work until 21 January 2014 was inconsistent with the final decision to terminate his employment.
[16] The IBM position is that its investigation established behaviour on the part of Mr Camilleri which substantiated serious concerns about his integrity and the extent to which he could be trusted. IBM assert that the over-sighting of the Internal Audit investigation by the DARC ensured fairness to Mr Camilleri and that it ensured that he had an appropriate opportunity to respond to the allegations put to him. Further IBM assert that, in terms of the process it followed, due consideration was given to the response provided by Mr Camilleri before the termination of his employment was put into effect.
The Evidence
[17] Mr Camilleri’s evidence went to his employment history, to the circumstances under which the alleged breaches of the IBM policies occurred and to his response to the investigation process. Mr Camilleri detailed his understanding of the IBM policies and his past practices and understanding of practices which generally applied. Mr Camilleri advised that, the circumstances under which he claimed the per diem allowances arose because his accommodation in Melbourne was, in accordance with his request, paid in advance, with the agreement of IBM and consequently his expense payments were lodged without the benefit of normal hotel accounts which identified the dates upon which he was away from home. In the course of lodging these bulk claims he simply identified block periods of time and overlooked weekends and other days when he was not in Melbourne.
[18] Mr Camilleri’s evidence also went to his circumstances and actions subsequent to the termination of his employment.
[19] Ms Muir is an IBM Human Resources Case Manager. Her evidence established her involvement in consideration of Mr Camilleri’s behaviour through her coordination of the DARC. Ms Muir participated in interviews conducted by Ms Hutchins of the Internal Audit function with Mr Camilleri and various of his managers in September, October and November 2013. She also convened meetings of the DARC in December. Her evidence was that the second DARC meeting agreed that termination of Mr Camilleri’s employment was appropriate because of the large number of inappropriate transactions, the length of time over which these claims were submitted, the monetary amounts involved and the loss of trust in Mr Camilleri. 2 Ms Muir then met with the IBM Global Business Services Unit Executive, Mr Bingham and his Human Resources Executive, Ms Armstrong. Her evidence was that Mr Bingham and Ms Armstrong agreed that termination of employment would be appropriate but should not occur before Christmas 2013.3 Ms Muir then obtained approval to proceed from the Country General Manager, Mr Stevens. That approval was obtained on 23 December 2013.4 Ms Muir then arranged for the matter to go to a broader DARC which considered these issues in the context of the IBM activities in the Asia Pacific region. Agreement from that body was obtained on 7 January 2014.
[20] Ms Muir’s evidence was that she then prepared a “show cause letter” 5 in consultation with Mr Duckworth. She was present when this was provided to Mr Camilleri on 21 January 2014.
[21] Ms Muir reviewed Mr Camilleri’s response on 21 February 2014 in concert with Ms Hutchins. She summarised that response in advice she provided to Mr Bingham on 25 February 2014 in which she concluded that his response did not provide mitigating evidence to disturb her conclusion that his employment should be terminated.
[22] Ms Muir participated in the meeting on 7 March 2014 which put into effect the termination of Mr Camilleri’s employment.
[23] Ms Watts was, at the time of the termination of Mr Camilleri’s employment, the IBM Australia/New Zealand Chief Financial Officer. In that capacity she was a member of the DARC which reviewed Mr Camilleri’s behaviours. Her evidence went to IBM’s core values and its Business Conduct Guidelines including the requirement that all IBM employees must read, complete online training and be certified in those guidelines every year. Those guidelines strictly prohibited dishonest reporting and the submission of expenses that were not actually incurred.
[24] As a member of the DARC, Ms Watts reviewed the Internal Audit committee report. Her evidence confirmed the considerations of that committee and her position that the primary factor underpinning the termination of employment decision related to the inappropriate per diem claims. Ms Watts’ evidence went to IBM’s zero tolerance approach to these issues which involved a starting premise of termination of employment unless there were substantive mitigating factors. Her evidence was that she particularly took into account the extended period of time over which the inappropriate per diem claims were made and the extent to which Mr Camilleri’s conduct directly impacted on his integrity as an employee and the trust which IBM put in him.
[25] Ms Watts’ evidence also went to the actions endorsed by the DARC with respect to various of Mr Camilleri’s managers relative to their role in over-sighting his claimed expenses.
[26] Ms Hutchins is the IBM Internal Audit investigator who undertook the investigation into Mr Camilleri’s actions. Her evidence went to the IBM Internal Audit function generally and the process she followed in this particular instance. This involved a review of documentation and the relevant IBM Per Diem Policy before interviews were conducted with various of Mr Camilleri’s former managers. Her evidence went to the interview she conducted with Mr Camilleri on 8 November 2013 and the consideration of the material subsequently forwarded to her by Mr Camilleri. On the basis of her findings she recommended disciplinary action at the discretion of the DARC.
[27] Ms Hutchins later conferred with Ms Muir in relation to the issues raised by Mr Camilleri in his 21 February 2014 response.
Findings
[28] Before considering the extent to which the termination of Mr Camilleri’s employment was unfair, I have detailed various conclusions about the circumstances which led to the termination of his employment.
[29] I have noted that this matter is the first and only issue of a disciplinary nature associated with Mr Camilleri’s long period of employment with IBM. I have also noted that Mr Camilleri completed the annual code of conduct training and was well aware of the requirement that he should only claim expenses on a legitimate basis.
[30] In terms of the per diem issue I have accepted Mr Camilleri’s evidence that he lodged his per diem claims for the period in question in a series of bulk lodgements. I have concluded that these generally occurred on a monthly basis. Mr Camilleri’s evidence was that: 6
“Mr Camilleri: I did not set out to submit claims that were not valid.
Mr Colgrave: Well why did you submit these claims that were not valid then, if it wasn’t based on that assumption?
Mr Camilleri: It was a mistake.
Mr Colgrave: No, you said in your letter, in your statement, in your evidence this morning, that there was a mistaken belief that there was an assumption that the system ... you are blaming the system, for not excluding it. You are not taking any responsibility yourself.
Mr Camilleri: I take responsibility that it happened.
Mr Colgrave: Well I am suggesting to you that you quite clearly turned your mind to the fact that you were simply slapping in an expense claim for per diems for an entire months period based upon the month of accommodation in the apartment and that you knew at that time that it included weekends, didn’t you?
Mr Camilleri: No ... well I did submit it that way but I didn’t do it with the intention to claim weekends.
Mr Colgrave: Well why then did you assume that the system would pick up the weekends?
Mr Camilleri: I assumed that it would correlate all the claims together, it’s not just one claim that goes in.”
[31] I am not able to easily reconcile this advice with what appears to be Mr Camilleri’s deliberate exclusion from his per diem claims of certain periods such as the Christmas-New Year period in 2011 but his inclusion of other periods such as Easter 2012. Mr Camilleri admitted that he should have been more careful in completing his per diem claims. 7 The evidence before me indicates that Mr Camilleri was either grossly negligent in his manner of completion of the per diem claims in that he simply relied on the IBM system to identify dates for which this allowance was not payable or he deliberately entered start and end dates for the allowance knowing that this could potentially involve payment of the per diem amounts the days when he was not in Melbourne. His evidence was:8
“Mr Colgrave: .. you knew when you repeatedly lodged these bulk per diem claims on a monthly basis that those claims included days, weekends and otherwise, when you were not in Melbourne for work ... you knew that didn’t you?
Mr Camilleri: .. If I was to say that I knew it, that would infer that I intended it that way .. it is not true.
Mr Colgrave: You had knowledge of the fact that during that monthly period, you were clearly not in Melbourne for work, didn’t you?
Mr Camilleri: Yes.
Mr Colgrave: On each occasion repeatedly that you lodged these bulk claims, you knew that didn’t you?
Mr Camilleri: If you are inferring that I did not intentionally, I did not.
Mr Colgrave: I’m asking you that you had the knowledge that you were not in Melbourne ....
Mr Camilleri: Yes
Mr Colgrave: .... for that entire period of the month that you were claiming on at least 12 occasions.
Mr Camilleri: Yes.
Mr Colgrave: So you knew that you were not in Melbourne for each and every day that you were claiming that was contained in that month that you were entitled to a per diem. That is true isn’t it?
Mr Camilleri: Yes.”
[32] The evidence does not facilitate a definitive conclusion in this respect, but I have adopted the position that Mr Camilleri did not exercise care in completing his per diem claims and relied upon the IBM claim management system to make payments accordingly. I have concluded that he adopted the position that the IBM systems would determine the payments to be made to him. Accordingly, I have concluded that he failed to comply with the 2011 IBM Business Conduct Guidelines which require honest, accurate and transparent reporting of matters which include expense claims. Additionally, Mr Camilleri did not comply with the requirements set out in the IBM expense reimbursement system.
[33] In terms of the Gold Coast issue I have accepted Mr Camilleri’s evidence that he gained verbal approval for this trip. The substantial time between that event in July 2012 and the interview in November 2013 is significant in that I have accepted that it is quite possible that Mr Camilleri would not be able to recall with whom he had reached that particular arrangement. However, it is clear that Mr Camilleri’s subsequent travel from the Gold Coast to Adelaide must have involved additional expense for IBM and I consider that his conduct in not immediately recognising this must represent misconduct.
[34] In terms of the credit card issue I have concluded that Mr Camilleri used his personal credit card because this suited him as he accumulated loyalty points on that card. In this respect I have concluded that he did not comply with the expectations of IBM but I am unable to regard this as a serious form of misconduct because of the evidence that Mr Camilleri has provided about the common use of personal credit cards. Mr Camilleri’s manager counselled him in relation to the use of his personal credit card in late 2012 and I have concluded that Mr Camilleri was entitled to conclude, by February 2014 that his use of his personal credit card generally was a matter that had been previously resolved.
[35] I have concluded that the process followed by IBM to effect the termination of Mr Camilleri’s employment was profoundly affected by the presumption that the multiple inappropriate per diem claims warranted termination of employment as part of the IBM zero tolerance approach. I am not satisfied that Mr Camilleri’s concerns about his long service, access to support persons, and consideration of the long delay between the incidents that led to his dismissal and the disciplinary action were given significant attention as part of the IBM review of whether there were mitigating circumstances relevant to that disciplinary action. I have concluded that those issues received only cursory consideration in Ms Muir’s summary of his position which was provided to the final decision maker, Mr Bingham on 25 February 2014. 9 Further, that this summary impacted on Mr Bingham’s capacity to fully assess the response provided by Mr Camilleri to the “show cause” letter.
[36] Notwithstanding that evidence from Mr Bingham, as the final IBM decision maker in this matter, has not been provided to me, I am satisfied that all of the evidence before me indicates that IBM decided to terminate Mr Camilleri’s employment because it concluded that there had been serious failures in his personal conduct in breach of its Business Conduct Guidelines and other policies and that those breaches went to issues of integrity and trust.
[37] I have concluded that, as of 23 December 2013, IBM management had formed a clear view that Mr Camilleri’s employment should be terminated. Whilst I accept the evidence of Ms Muir and that of Ms Watts to the effect that a final termination of employment decision depended on consideration of mitigating circumstances, this is not clear from the authorisation of termination agreed by Mr Stevens, as the Managing Director of IBM Australia and New Zealand of 23 December 2013. 10
[38] I consider that, in this context the decision not to at least suspend Mr Camilleri pending his response to the IBM concerns and to allow him to continue to work for another month before those issues were bought to his attention, is inherently inconsistent with the premise that IBM no longer had trust in him as an employee.
[39] Section 387 states:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
[40] I have reviewed each of these factors in the context of the circumstances of this matter.
Valid Reason
[41] Justice Northrop’s commonly quoted citation in Selvachandran v Peterson Plastics Pty Ltd 11 was made in the context of a different legislative regime which incorporated in the concept of a valid reason, a number of the now separate considerations. Notwithstanding that, I have applied that same principle.
[42] I consider that Mr Camilleri’s failure to comply with the IBM Business Conduct Guidelines and the obligations established by its expense reimbursement policies represented a valid reason for the termination of his employment. Mr Camilleri’s failure to comply with the IBM policy requirements and lack of care in lodging inappropriate expense claims that were of such a magnitude and were repeated over the period from 30 October 2011 to 26 September 2012 must be regarded as behaviours which represented a valid reason for termination of his employment. In arriving at this conclusion, I have taken into account the circumstances which led to these claims and Mr Camilleri’s long service with IBM. I have further considered that long service later in this decision.
[43] I am not satisfied that the Gold Coast issue represented a valid reason for the termination of Mr Camilleri’s employment, either on its own account or in conjunction with the per diem issue. I consider that the amount involved is simply not so significant that it could be regarded as a valid reason for the termination of his employment.
[44] I am similarly not satisfied that Mr Camilleri’s use of his personal credit card could be regarded as a valid reason for the termination of his employment. That issue was resolved when Mr Camilleri was counselled about it in late 2012 and, in any event I regard it as a relatively minor transgression. Had Mr Camilleri continued to use his personal credit card after being specifically told not to do so, I may have arrived at a different conclusion.
Notification of the reason
[45] Mr Camilleri was notified of the reasons for the termination of his employment on 7 March 2014 and was also given written advice detailing those reasons on the same day.
Opportunity to Respond
[46] Mr Camilleri was given an opportunity to respond to the allegations against him. That opportunity was, taking the substantial delay between the matters under investigation into account, over a relatively short period of time. In this respect I have noted that the “show cause letter” 12 initially provided Mr Camilleri with two days in which to respond, but additional time was then given to him after he advised IBM of his preapproved leave and overseas travel imminent. Notwithstanding this, the approach adopted by IBM, and its correspondence to Mr Camilleri, made it very clear that termination of his employment was highly likely irrespective of the response he was able to provide.
[47] Further, I have concluded that IBM’s preparedness to review the termination of employment decision was, at best, extremely limited. That employment termination decision was achieved through a complicated process of committee and senior management endorsement and I have concluded that there was little enthusiasm or desire to revisit the issue despite Mr Camilleri’s comprehensive response of 21 February 2014. 13
Any Unreasonable refusal to allow a support person
[48] Mr Camilleri was not advised of the particular issues or allegations against him prior to the initial meeting he had with the IBM Internal Audit function on 8 November 2013. Whilst this position is understandable, the advice provided to him of that meeting confirmed that he was instructed not to discuss the matter with anyone prior to that meeting. 14 Further, the “show cause letter” did not alter this position although it did recognise that Mr Camilleri could access the IBM Employee Assistance Program. Consequently, I am not satisfied that IBM made clear to Mr Camilleri that he was able to access a professional support person in discussions about, or consideration of, the allegations against him. I have noted that his partner attended this discussion with him.
Warnings about unsatisfactory performance
[49] The termination of Mr Camilleri’s employment was not related to performance issues and he had no history of performance related warnings.
Size of the IBM business - impact on procedures
[50] IBM is a very large employer. Its procedures are clearly and strictly prescribed and have an understandable international focus. However, in this case those procedures operated in a manner which substantially limited Mr Camilleri’s capacity to present his position to the relevant IBM decision maker(s). Mr Camilleri’s response of 21 February 2014 was not provided to the ultimate IBM decision maker, Mr Bingham, but was rather the subject of a very brief summary provided by Ms Muir.
[51] Further, those procedures involved an extraordinary long delay in the identification and actioning of the IBM concerns.
Dedicated human resource management specialists
[52] IBM management has access to substantial human resource management specialists. Those specialists were involved in consideration of the allegations against Mr Camilleri at the outset and in formulating the IBM position in this matter.
Other matters considered relevant
[53] I have already referred to Mr Camilleri’s long and unblemished record of service with IBM. Whilst his actions in inappropriately claiming the per diem allowances represented a valid reason for the termination of his employment, that long service history represents a factor which mitigated against termination of his employment in these circumstances. In contrast, had Mr Camilleri only a short service history, or was it the case that he had been counselled about previous misdemeanours, the termination of his employment would have been a less contentious approach.
[54] Mr Camilleri recognised, at a very early time in the investigation (8 November 2013) that his expense claims were wrong and he offered immediately to reimburse IBM accordingly. He repeated that offer in his formal response of 21 February 2014. I consider that offer, in the particular circumstances of this matter represented a factor which was given little consideration by IBM.
[55] The duration of the delay in the investigation of this matter and in alerting Mr Camilleri to the allegations against him, means that a delay of nearly 3 years occurred between the first inappropriate claim and the termination of his employment. That delay is significant in terms of issues of fairness. Further and even more significantly, it appears clear that, as of 8 November 2013, IBM had significant concerns about Mr Camilleri’s behaviour. Nevertheless it took no action at that time to suspend him pending the conclusion of its investigation. This situation was compounded by the decision of Mr Stevens, on 23 December 2013, to endorse the proposed termination of Mr Camilleri’s employment. Notwithstanding this, IBM took no action to suspend Mr Camilleri until it issued the “show cause letter” on 21 January 2014. In this context it is difficult to reconcile the IBM position that it had lost trust and confidence in Mr Camilleri as an employee and proposed to dismiss him with its requirement for him to work until 21 January 2014. That inconsistency introduced a measure of unfairness to Mr Camilleri in terms of the significance of the allegations against him.
[56] I have noted that, had the basis for the per diem payments made to Mr Camilleri been specified to him at the time those payments were made, IBM would have been able to expect a higher level of accountability from Mr Camilleri.
[57] Finally I have noted that there is no evidence before me relative to Mr Camilleri’s behaviour relating to expense claims since the events of 2011. In this regard it is somewhat surprising that such a further review did not occur given the long time delay in the finalisation of the investigation that led to his dismissal.
Conclusion - harsh, unjust or unreasonable
[58] Having considered all of the circumstances of this matter, I have concluded that the termination of Mr Camilleri’s employment was harsh given his substantial service and employment history, including the particular circumstances under which he made the inappropriate per diem claims. To the extent that IBM took into account the Gold Coast trip and credit card issue, this contributes to the harshness of the termination of his employment. I have concluded that the termination of Mr Camilleri’s employment was unjust given the long delay in the investigation process, the fact that Mr Camilleri was limited in his capacity to respond to the allegations against him and IBM’s limited consideration of his ultimate responses. Further, IBM’s decision to require Mr Camilleri to continue to work when it had made an in principle decision to dismiss him because it had no confidence in him, contributed to the injustice of the decision. As I have found that IBM had a valid reason for the termination of Mr Camilleri’s employment, I do not consider that termination to be unreasonable.
[59] As a consequence, I consider that the termination of Mr Camilleri’s employment was, in overall terms, unfair.
Remedy
[60] Section 390 establishes that in these circumstances the Commission may order a remedy. Reinstatement is clearly established as the primary remedy and the alternative remedy of compensation cannot be considered unless I am satisfied that Mr Camilleri’s reinstatement is inappropriate.
[61] Mr Camilleri seeks reinstatement. His position is that there is nothing to indicate that his relationship with IBM management is such that reinstatement is impractical or inappropriate and that, given his long service with IBM, alternative employment opportunities are inherently limited. Mr Camilleri’s evidence was that he was confident he would be able to resume appropriate work with IBM and he accepted the obligations on him to ensure future compliance with appropriate policies. Mr Camilleri confirmed his commitment to repaying amounts which he claimed inappropriately.
[62] The IBM position with respect to remedy was that the necessary trust and confidence for re-establishment of the employment relationship was destroyed by Mr Camilleri’s conduct and, presumably, that his reinstatement would undermine the integrity of its internationally consistent policy requirements and values.
[63] I have adopted the position that, as reinstatement is the primary remedy in the event of a finding of unfairness IBM bears a substantial onus to demonstrate to me that reinstatement is not appropriate as distinct from undesirable or difficult. In this respect the observations of the Full Industrial Relations Court decision in Perkins v Grace Worldwide (Australia) Pty Ltd 15 remain relevant:
“Trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited (Wilcox CJ, von Doussa and Marshall JJ, 13 December 1996, not yet reported). The implication is not confined to employers, it extends to employees: see for example Blyth Chemicals Ltd v Bushell [1933] HCA 8; (1933) 49 CLR 66 at 81-2 and North v Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee’s employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court’s finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.”
[64] In adopting an approach consistent with that position, I have noted the legislation now refers to the concept of inappropriate rather than impractical. I do not consider that change detracts from the relevance of the approach in Perkins and have, in any event, noted that later decisions of the FWC have also adopted the approach set out in Perkins. 16
[65] I have concluded, on very fine balance, that Mr Camilleri’s reinstatement is appropriate. I consider that, if restitution of the amounts inappropriately claimed is made, Mr Camilleri should be able to satisfactorily resume, and continue his long standing employment with IBM in the position in which he was employed immediately before the termination of his employment or, consistent with s.391(1)(b), another position on terms and conditions no less favourable than those which applied immediately before his dismissal, at the discretion of IBM. In reaching this conclusion, I think it likely that Mr Camilleri’s conduct means that his behaviour will continue to be the subject of deep concern and that his reinstatement and longevity of employment will depend on whether IBM identify any further breaches of its Business Conduct Guidelines. Any such breaches, irrespective of whether they relate to behaviours in the past or in the future, are likely to give rise to termination of his employment. Consequently, notwithstanding my conclusion that reinstatement is appropriate, if Mr Camilleri considers that any further breach of these Business Conduct Guidelines has occurred, he should consider attempting to negotiate an appropriate employment termination arrangement. I stress that my decision with respect to reinstatement has simply been made on the evidence before me.
[66] In this situation s.391(2) provides the capacity for the FWC to make an order to maintain the continuity of Mr Camilleri’s employment. I consider that to be appropriate in these circumstances. The nature of the misconduct, the delays in concluding the investigation into this issue and the duration of Mr Camilleri’s employment, favour such a conclusion.
[67] Section 391(3) also provides the capacity for the FWC to make an order in these circumstances for lost remuneration. Given my findings with respect to s.397 I consider that such an order is appropriate. However, I also consider it appropriate to deduct from the amount payable as lost remuneration between the termination of Mr Camilleri’s employment, and his reinstatement, the amounts which he inappropriately claimed from IBM. I understand that those amounts have not yet been finally agreed between the parties. Should agreement not be possible, leave is reserved to the parties to refer this issue back to me for determination. Further, I consider that there should be an additional deduction from the amount that would otherwise be payable as lost remuneration. That additional deduction is appropriate because it was Mr Camilleri’s misconduct that ultimately resulted in the termination of his employment. I consider that a 50% deduction in the amount of lost remuneration is appropriate, after repayment of the inappropriate expense amounts is taken into account. In reaching this conclusion I have taken into account the evidence before me which indicates that, consistent with s.391(4), Mr Camilleri has not earned significant income since the termination of his employment and I consider he is unlikely to do so before any reinstatement takes effect.
[68] An Order (PR554734) consistent with this decision will be published.
SENIOR DEPUTY PRESIDENT
Appearances:
S Bourne of counsel for the Mr Camilleri.
I Colgrave of counsel for IBM Australia Ltd.
Hearing details:
2014.
Adelaide:
August 13, 14 and 22.
1 Exhibit C1
2 Exhibit I2
3 Exhibit I2
4 Exhibit I2, Attachment EM3
5 Exhibit I2, Attachment EM4
6 Transcript Sound Recording, 13 August 2014: 2:10:09 pm - 2:11:14 pm
7 Exhibit C1, para 37
8 Transcript Sound Recording, 13 August 2014, 4:08:02 pm - 4:09:10 pm
9 Exhibit I2, Attachment EM8
10 Exhibit I2, Attachment EM3
11 (1995) 62 IR 371 at 373
12 Exhibit C2, para 24
13 Exhibit C2
14 Exhibit C2, para 22
15 (1997) 72 IR 186, 191
16 See for example Ngyuen v IGA Distribution (Vic) Pty Ltd [2011] FWA 3354 where this approach was not challenged on appeal and EDI Rail Pty Ltd v Rowley [2008] AIRCFB 64
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