| [2016] FWC 8572 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Desapriya Fernando
v
South Oakleigh Club Incorporated T/A South Oakleigh Club (SOC)
(U2015/16669)
COMMISSIONER HARPER-GREENWELL |
MELBOURNE, 13 DECEMBER 2016 |
Application for relief from unfair dismissal.
Introduction
[1] Mr Desapriya Fernando made an application to the Fair Work Commission (Commission) pursuant to s.394(1) of the Fair Work Act 2009 (Cth) (the Act) in respect of the termination of his employment as Head Chef with South Oakleigh Club Incorporated T/A South Oakleigh Club (SOC). He was dismissed with immediate effect on 10 December 2015 on the basis he would be paid in lieu of notice.
[2] The reason provided for the dismissal, set out in a letter dated 30 November 2015, was that SOC had set in motion a new five year business plan and Mr Fernando did not have the confidence of the SOC Directors to bring about the vital changes needed in the catering department which is a core part of SOC’s daily operation.
[3] Mr Fernando’s submits his dismissal was unfair as he was not provided with a valid reason for the dismissal, nor had he ever received any warnings for poor performance or conduct.
[4] The matter was subject to a jurisdiction hearing on 8 July 2016. The matter then proceeded to a hearing of the substantive matter before me on 20 September 2016.
[5] Mr Fernando was represented by Mr Ian Maxfield. Mr Cleverley, previously employed as General Manager of SOC, appeared and gave evidence for Mr Fernando.
[6] SOC was represented by Mr O’Connor, Counsel. The following witnesses gave evidence for and on behalf of SOC:
● Mr Anthony O’Sullivan, acting General Manager at the time of Mr Fernando’s dismissal, current SOC Board Member;
● Mr Peter Russell, SOC President;
● Mr Andrew Gilmore, Duty Manager, SOC;
● Mr Les Downard, Duty Manager, SOC; and
● Ms Kathy Barrile, Bookkeeper, SOC.
Preliminary matters
[7] Section 396 of the Act requires that four specified matters (set out in paragraphs (a)-(d)) must be decided before the merits of Mr Fernando’s application may be considered. There was no contest between the parties about those matters. I find that:
● Mr Fernando’s application was made within the period required by s.392(2);
● Mr Fernando was a person protected from unfair dismissal; and
● His dismissal was not a case of genuine redundancy.
[8] Whether or not SOC was a Small Business as defined in s.23 of the Act was the subject of a jurisdiction hearing before the Commission. It was determined at the time of Mr Fernando’s dismissal SOC was not a small business, therefore the Small Business Fair dismissal Code (Code) does not apply 1.
[9] Mr Maxfield sought to rely on the witness statement of Ms Brooke Ramsden. Ms Ramsden was not called to give witness evidence at the hearing. Mr O’Connor for SOC objected to the admission of Ms Ramsden’s evidence. I accepted into evidence the witness statement of Ms Ramsden. Mr O’Connor was provided the opportunity to make submissions on what weight was to be attributed to the evidence if any. However to that end, in making my decision it has not been necessary to rely on the witness statement of Ms Ramsden, or any evidence that arose from questions put to any witness during the hearing about the content of Ms Ramsden’s witness statement.
Background
[10] Mr Fernando submits he is a 52 year old man who commenced as a chef in Sri Lanka and continued to work as a chef in Australia when he emigrated in June 1999.
[11] He commenced employment with SOC, a not for profit club based in Bentleigh Victoria, as a chef under a contract of services in August 2014. In October 2014 Mr Fernando was appointed to the position of full time Chef reporting to the General Manager commencing 1 January 2015.
[12] Mr Fernando reported to Mr Cleverley until Mr Cleverley left SOC in September 2015 for what was described as irreconcilable differences. Mr Cleverley submits as Mr Fernando’s direct manager he was responsible for the direction and control of Mr Fernando’s duties. Mr Fernando did not have any direct communications with SOC Board members.
[13] SOC submits Mr Fernando was required to work autonomously and was required to supervise other staff whilst maintaining the food and hygiene standards synonymous with the operation of a commercial kitchen and had failed to do so. They say this contributed to SOC’s financial problems as SOC was struggling to maintain revenue and its food services were operating at a loss.
[14] SOC submitted Mr Fernando was issued with two oral warnings by Mr O’Sullivan prior to his dismissal. Those warnings were said to be related to kitchen hygiene standards, the standard and quality of the food service, as well as his capacity to meet SOCs needs to improve customer patronage and revenue. He was advised that he did not have the confidence of the SOC Board and they did not believe Mr Fernando was the right person for the role.
[15] Mr O’Sullivan, who owns and operates a number of clubs around Melbourne 2 commenced with SOC as acting General Manager in a voluntary capacity mid to late October 2015. On 29 November 2015, some five weeks after he commenced, Mr O’Sullivan terminated Mr Fernando’s employment. The dismissal took effect that evening after he had completed food service for approximately 200 patrons.
[16] Mr Fernando submits he had engaged in general discussions with Mr O’Sullivan however was never performance managed 3, nor was he ever provided with any warnings by Mr O’Sullivan or anyone else throughout the duration of his employment4. He was not provided with any reason for the dismissal at the time his employment was terminated, nor was he provided with an opportunity to respond to any reasons SOC may have held at the time of his dismissal.
[17] Mr Fernando submits SOC was suffering internal leadership issues and the new Board had decided to take a different direction and consequently removed him from his position.
[18] In addition to Mr Fernando not having the confidence of the new Board in that he was not the right person for the role, SOC’s submission was that Mr Fernando continued to fail to respond to the two previous warnings on hygiene standards. Consequently Mr O’Sullivan terminated Mr Fernando’s employment to ensure the safety of its patrons.
[19] Mr Fernando disputes his immediate dismissal was as a consequence of the hygiene standards and the risk to patrons as he was required to remain and cook for a function of approximately 200 people on the evening of his dismissal. Mr Fernando submits there were no performance discussions or plans put in place to rectify the supposed issues. Further, there was no valid reason for his summary dismissal, his dismissal was as a result of the changing of the guard of the new Board and that they (the Board) had decided he was not part of the new five year business plan.
Changing of the Guard at SOC
[20] Mr Russell was elected President in June 2015. His evidence was his platform for being elected President was to keep SOC in East Bentleigh, increase the food service and introduce live entertainment. 5 Mr Russell said he had spoken to other venue operators and was of the understanding that the bar and the pokies success was reliant on the food attracting customers or as he put it:
“Basically food will impact on pokie machines, your bar, so obviously the more people you have in there, the more chance that they're spending money. They're not just coming to play the pokie machines”. 6
[21] Mr Russell submitted he put a number of proposals to the Board of which one was to make changes to the chef and the kitchen operation because ‘… something’s got to happen to get the business going’ 7 and those changes were objected to by the Board at the time.
[22] Mr Russell’s evidence was the Board discussed those proposed changes outlined in the above paragraph in June 2015. Some of the Board Members decided the food service had to improve whereas the other half of the Board were aligned with Mr Cleverley and did not want to make any changes to the chef and sought to have the club moved to a location in Oakleigh. Mr Russell’s evidence was, consequently, the Board became fractured and four Members resigned. 8
[23] Mr Russell’s evidence was after the Board members resigned he put together a new Board. In September 2015 the new Board discussed the future of SOC, this included the proposal to remove Mr Fernando and replace him with a new Chef. The new Board agreed to Mr Russell’s proposed changes. Mr Russell’s evidence was it was necessary to change the chef and the food to enable SOC to move forward.
[24] Mr Cleverley gave similar evidence, in that the Board wanted to take a new direction and the Board had questioned whether Mr Fernando was the right fit for SOC moving forward. Mr Cleverley said there were only certain people on the Board who thought this way.
[25] Mr Cleverley’s evidence was when he attended the Board meetings, during discussions relating to whether or not Mr Fernando was the ‘right fit’, no one raised concerns about his performance, quality of food or hygiene.
[26] Mr O’Sullivan’s evidence was Mr Russell had told him in mid-October 2015 that the board was reviewing the clubs operations and had concerns about the declining patronage and the negative feedback the club had received regarding food service. Mr O’Sullivan and Mr Russell had at that time discussed the plans of the board to remove the chef.
[27] The submission that the SOC Board had made a decision as early as July 2015 to remove Mr Fernando from his position was not disputed. The evidence is clear the decision was made in advance of any concerns being raised with Mr Fernando about his performance and in advance of his dismissal.
Food and Hygiene
[28] In their submission to the Commission SOC relied on the following reasons for Mr Fernando’s dismissal:
(a) poor hygiene standards in food handling; and
(b) poor standard of kitchen cleanliness.
[29] SOC relied on the 8 July 2015 inspection by an Environmental Health Officer from the Glen Eira City Council (the Council) who conducted an assessment of SOC and identified a number of public health/food safety risks in the kitchen, bar and function room, main bar and TAB. The majority of the items on the Assessment Report (the Report) were related to the kitchen.
[30] SOC’s submission was it is the responsibility of Mr Fernando as head chef to have addressed the items within the Report including the required repairs to the fly screen door in the kitchen. SOC further submitted the Report was evidence of the poor state of the kitchen and Mr Fernando’s inability to perform the functions of his role which led to the loss of confidence of the Board.
[31] Mr Cleverley’s evidence was the standard of cleanliness at SOC was not inconsistent with other venues he has worked at. Prior to the issues that arose within the Board, none of the managers or staff had raised any concerns with regards to Mr Fernando’s performance in terms of hygiene. 9 As Mr Fernando’s manager he did not have any concerns with the hygiene and the Council inspection was a routine inspection that did not raise any major concerns.10 He submitted this was evident as there was no follow up assessment conducted by the Council.11 Mr Cleverley asserts should it have been a major concern the Council would have arranged a follow up inspection. It is not in contention that there were no further Council inspections.
[32] Mr Cleverley’s evidence was, as Mr Fernando’s Manager at the time, all non- financial items identified in the Report were addressed which included things like; reviewing the cleaning schedule for the kitchen and updating minor equipment such as mop heads.
[33] Both Mr Fernando and Mr Cleverley gave evidence that a new cleaning schedule was implemented as a result of the inspection. Ms Barrile gave evidence she was shown the cleaning schedule whilst she was attending to the issue of a broken down dishwasher in the kitchen. 12
[34] Mr Cleverley’s evidence was he assessed the items in the report which were separate major financial components and made what he thought were the necessary decisions. Where there was a requirement to replace the fly wire on the fly screen door, because the door was not being used and remained closed at all times, he decided it was not necessary to replace the fly wire. The requirement to store certain food items separately, which could have been addressed by obtaining a new cool room, was inhibited by the financial difficulties SOC were facing. When Mr Fernando raised a request for additional storage space he was provided with a separate small fridge instead.
[35] Mr Cleverley submitted items such as the flue clean, for which SOC were required to provide evidence to the Council, were usually completed by external contractors as it is a task which is undertaken by a contractor and not a chef. He submitted SOC’s expectation that a chef should clean the flue was unreasonable.
[36] Mr Gilmore has been a duty manager with SOC since mid-2012. His evidence was he often observed the kitchen during lunch or dinner. His evidence was that he had observed on a daily basis a number of food handling practices that were not safe and he had concerns as to the cleanliness of the kitchen. 13 He was also concerned with the dishes not being cleaned properly by the dishwasher and submitted Mr Fernando was ‘probably’ aware Mr Cleverley was watering down the detergents used in the dishwasher.14
[37] Mr Cleverley’s evidence was due to the problems they had with the aging dishwasher and finances for maintenance, he was following manufacturer’s instructions when it came to the appropriate dilution of the detergents, and this was not Mr Fernando’s responsibility. Mr Gilmore’s submission was the supplier had attended SOC and made a statement that Mr Cleverley had reconfigured the dilution amounts.
[38] Mr Gilmore was also concerned that Mr Fernando was thawing out frozen seafood and then refreezing portions that were not used. Mr Fernando refutes this claim stating he had never been spoken to about such practices, and if he had he would have explained he would take the frozen food out of the freezer, separate the portions he needed, and place the frozen content back in the freezer.
[39] Mr Gilmore’s evidence was Mr Fernando’s direct line manager was Mr Cleverley and it was Mr Cleverley that handled any matters relating to Mr Fernando. 15 His evidence was he may have discussed his concerns with other employees however he had not at any stage raised his concerns with either Mr Cleverley or Mr Fernando. Further, he stated he had communication issues with Mr Fernando because of Mr Fernando’s strong accent, which made it difficult to understand him. Mr Gilmore’s evidence was as Duty Manager he did not raise his concerns with Mr Fernando even after Mr Cleverley had left SOC.
[40] Ms Barrile, SOC’s book-keeper, written submission was during November 2015, whilst there was no General Manager in place, she undertook a general inspection of SOC to see what needed to be cleaned and what needed maintenance. 16 Ms Barrile’s oral evidence during the hearing was she reported her findings back to the Acting General Manager, Mr O’Sullivan. Ms Barrile then said the reason for her kitchen inspection was because the dishwasher had broken down and the repair man had raised some OH&S concerns with her.17
[41] It is not in contention that Ms Barrile spoke to Mr Fernando in early November 2015 about the state of the kitchen. She pointed out a number of concerns and Mr Fernando responded saying he would clean the kitchen on the weekend. This concurs with the evidence of Mr Fernando.
[42] There was no dispute Ms Barrile raised concerns regarding the lack of labelling of food and Mr Fernando responded advising her he had run out of labels and that they were on order and he knew how long things had been in the freezer.
[43] Whilst I accept the kitchen at SOC may have not been in a perfect state of cleanliness, taking into account the Report by the Council inspector, I am of the view Ms Barrile’s evidence was somewhat of an attempt to overstate the situation in relation to the state of cleanliness of the kitchen. I found her inconsistency in providing reasons for the kitchen inspection to some degree discrediting. Further the events leading to Ms Barrile’s concerns did not take place until well after it was decided to remove Mr Fernando from his position.
[44] Mr Downard’s submission was that in December 2015, after Mr Fernando had been dismissed, the freezer broke down. When Mr Downard was assisting with removing the freezer he found a steak under it, it was wrapped in glad wrap and ‘stunk to high heaven’. 18
[45] His oral evidence during the hearing was the steak could have been there for anytime up to two years, nobody would really know. 19 Mr Downard said when you walked through the kitchen you would not have known it was there because it was sealed in plastic. Mr Downard’s oral evidence was:
“… it was wrapped in plastic, it was under the freezer. When you walk through the kitchen there was no smell”. 20
[46] Mr Downard said you would have had to remove the freezer to have found it and you would not have discovered it in a normal clean.
[47] Both Ms Barrile and Mr Downard’s oral evidence paint a different picture to their written witness statements and both written witness statements were in my view misleading for the purpose of overstating the hygiene concerns relating to the kitchen. It is also my view that the oral evidence goes no further than to support that there has been a lack of financial investment in the SOC Bentleigh kitchen and Mr Fernando has had to work with aging equipment as a consequence.
[48] Although SOC’s submission was that it was the hygiene issues associated with food preparation, and the state of the kitchen (in that it was not clean), that lead to the dismissal of Mr Fernando, the evidence before me is that even if there was concern, these matters did not arise until after the inspection by the Council and the matters were primarily dealt with to the expectation and satisfaction of Mr Fernando’s then manager Mr Cleverley. The evidence is that prior to 30 October 2015, at no time were these issues ever raised with Mr Fernando by any other manager or Board members. It was the evidence of Mr Russell that Board members did not go into the kitchen and had very little interaction with the chef.
[49] I am of the view the Council inspection was no more than a routine inspection to which Mr Cleverley responded. It was not contested that there was no further follow up from the Council, from this it can be deduced that the issues identified were not of significant enough concern to warrant immediate action by the Council. Nor did anyone at SOC at the time raise any concerns with regards to the Council inspection directly with Mr Fernando. On the evidence before me the first discussion raising concerns with regards to the cleanliness of the kitchen either came from the bookkeeper just prior to Mr O’Sullivan’s commencement or from Mr O’Sullivan on 30 October 2015.
[50] It was the submission of SOC that Mr Fernando had received a number of warnings from Mr O’Sullivan for his performance prior to his dismissal. As earlier discussed one of the concerns said to have been raised with Mr Fernando were the hygiene standards of the kitchen.
[51] Mr Cleverley gave evidence that during his time as Mr Fernando’s manager he was not aware of any performance issues. 21 Mr Cleverley had never engaged in any performance discussions with Mr Fernando nor was he aware of any other manager holding discussions with Mr Fernando about his ability to perform his role or any other performance related concerns.
[52] Mr Cleverley states during the time he was manager he had received a little above the average amount of complaints about the food, however, he has never worked at a venue where there have not been complaints about the food. 22 Mr Cleverley did not address these complaints with Mr Fernando.
[53] Mr Gilmore said if there was a complaint about issues like food poisoning, Mr Cleverley did not address those complaints with Mr Fernando, he was dismissive of those complaints. This was consistent with Mr Cleverley’s evidence. 23
[54] Mr Cleverley attended a Board meeting in August 2015 where members of the Board discussed Mr Fernando’s future with SOC. Mr Cleverley’s evidence was there was no mention of Mr Fernando’s ability to perform his role, rather the discussion centred around whether or not Mr Fernando was a suitable fit moving forward. Mr Cleverley’s evidence was during his time as Manager with SOC Mr Fernando’s quality of cooking was never raised as an issue. There was no evidence put by SOC to the contrary.
[55] Shortly after Mr Cleverley’s separation from SOC Mr O’Sullivan commenced in the role of General Manager in a voluntary capacity. Mr O’Sullivan is currently a Board member of SOC. Mr O’Sullivan submits he visited SOC two to three times a week whilst managing two other venues.
[56] Mr O’Sullivan submitted he raised his concerns regarding Mr Fernando’s food handling and general cleanliness with Mr Russell in or around mid-October 2015, and raised those same concerns with Mr Fernando on 30 October 2015. His evidence was he did not hold any formal meetings with Mr Fernando, he spoke to him in the kitchen when he could find the time. On each occasion that they met, Mr O’Sullivan did not tell Mr Fernando that he was having a meeting about his performance, it was more of a discussion about the overall state of the kitchen and the state of the business. 24
[57] Mr O’Sullivan submits at the 30 October 2015 meeting he informed Mr Fernando the Board were aware of his concerns and made diary entries recording the discussion. At the hearing Mr O’Sullivan could not recall the time of day the meeting took place nor could he recall the details of the diary entries, however, he thought it may have taken place in the morning. Mr O’Sullivan’s diary entry on 30 October 2015 states the following:
“. . . mention to chef that the kitchen needs to be cleaned especially under fryers fridges etc.” 25
[58] Mr O’Sullivan could not recall the date of the second meeting, nor could he recall the time the second meeting took place. Again he thought it may have taken place in the morning. Mr O’Sullivan’s diary entry for the 19 November 2015 states the following:
“. . .talk to chef re the state of the kitchen” 26
[59] Although Mr O’Sullivan’s evidence was that he thought the meetings occurred in the morning, both diary entries were made in the afternoon section of the diary. I found Mr O’Sullivan’s recollection of the circumstances to be somewhat vague.
[60] Mr O’Sullivan’s evidence was he had discussions with Mr Fernando regarding the need to improve the quality of food being served as SOC was not attracting diners. Mr Fernando proposed a new menu, however Mr O’Sullivan’s oral evidence was time was not on his side as he was entering into a busy time of year at the other venues, and he was too busy to give the new menu a trial. 27
[61] Mr Russell’s evidence was he had spoken in the past with Mr Cleverley about introducing a new menu and it was clear to him Mr Cleverley was in control of the menu and not Mr Fernando. His evidence was he did not think a new menu would have made any difference to the number of patrons dining at SOC. 28
[62] Mr Russell obtained the food and venue patronage report from Mr Cleverley in May 2015. 29 The figures were low and he sent an email to Mr Cleverley on 27 June 2015 requesting a response to how he was in his position going to increase patronage at SOC and the timeframe for his proposed plan. Mr Russell submits he never received a response.30
[63] Mr O’Sullivan submitted Mr Fernando had been with SOC as an employee for 11 months and the reputation of SOC had suffered during this time 31 however he only provided submissions for the figures obtained by Mr Russell for May 2015 and no other comparative data. Ms Barrile being the SOC’s bookkeeper gave oral evidence that she could not be sure what the status of the club financials were for any time period outside of the May 2015 figures.32
[64] Mr O’Sullivan’s oral evidences was sometime in the month between his commencement in his role with SOC and the dismissal of Mr Fernando, Mr O’Sullivan had a conversation with the President of SOC in which Mr O’Sullivan discussed dismissing Mr Fernando. Mr O’Sullivan’s evidence was he had decided to dismiss Mr Fernando at the time of the discussion however he could not recall the exact date that discussion took place. 33
[65] Mr Gilmore submitted after Mr Cleverley left SOC it was basically running with Duty Managers in charge. In the absence of a General Manager, the Duty Managers are in charge of staff. None of the Duty Managers were involved in Mr Fernando’s performance management or discussions. 34
[66] Mr Gilmore’s evidence was in his 30 years of experience, he is used to people being given notice that their performance was not satisfactory, and being given an opportunity to improve. Although SOC was small in operation he was of the opinion they should have followed a similar process and was of the belief Mr Fernando was not afforded a proper process. 35 Mr Gilmore was not aware of any performance discussions Mr O’Sullivan may have had with Mr Fernando, and it was his evidence that Mr O’Sullivan would have been the person responsible for issuing any warnings to Mr Fernando.36
[67] Mr O’Sullivan’s evidence was the performance management of Mr Fernando was much more informal than the practices he would normally adopt in his role as Manager at the venue where he currently works. He submitted he would normally give the employee a couple of verbal warnings and if there was no improvement he would finish them up 37. Mr O’Sullivan said that he was not under those same constraints at SOC as he would be in his other role and the process he followed to dismiss Mr Fernando was more informal. Mr O’Sullivan concedes he did not follow those processes outlined above when dismissing Mr Fernando.
Protection from Unfair Dismissal
[68] Section 382 of the Act sets out the circumstances that must exist for Mr Fernando to be protected from unfair dismissal:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
[69] There is no dispute that Mr Fernando has completed a period of employment with his employer of at least the minimum employment period.
[70] The sum of Mr Fernando’s annual rate of earnings is less than the high income threshold.
[71] Mr Fernando was dismissed from his employment from SOC.
[72] The matters I need to consider in this case are outlined below.
[73] Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable:
“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.”
[74] The type of conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained by the High Court of Australia in Byrne v Australian Airlines Ltd. 38 McHugh and Gummow JJ explained as follows:
“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.” 39
[75] I will now consider each of the matters set out in s.387 of the Act.
[76] There must have been a valid reason for the dismissal relating to Mr Fernando’s capacity or conduct, although it need not be the reason given to Mr Fernando at the time of the dismissal. 40 The reason should be “sound, defensible or well-founded”41 and should not be “capricious, fanciful, spiteful or prejudiced”. 42
[77] SOC submits they provided written reasons for Mr Fernando’s dismissal which were set out in a letter dated 30 November 2015. Those reasons were that SOC had set in motion a new five year business plan and Mr Fernando did not have the confidence of the SOC Directors to bring about the vital changes needed in the catering department which is a core part of SOC’s daily operation. This may have given rise to an argument that Mr Fernando’s position was subsequently being made redundant, however the parties to this matter did not pursue this and submitted that the dismissal was not a result of redundancy but rather capacity.
[78] In its submission to the Commission and during the hearing SOC put that Mr Fernando had lost the confidence of the Board due to his lack of hygiene standards and poor food handling practices. SOC relied on the assessment report of 8 July 2015 conducted by an Environmental Health Officer from the Council which identified a number of public health/food safety risks in the kitchen, bar and function room, main bar and TAB and it being Mr Fernando’s responsibility to address all items identified in the Report including obtaining a new cool room to store items separately. I am not satisfied on the evidence before me that it was the sole responsibility of Mr Fernando to address all items in the Report. It is clear Mr Fernando was not provided with the level of control or authority to enact this responsibility. This was an authority level and function of Mr Cleverley’s role.
[79] It is certainly not in dispute that the assessment was conducted. It was the evidence of Mr Cleverley that this was a routine Council inspection that required no follow up from the Council. This was not disputed by SOC. As previously stated I accept Mr Cleverley’s evidence on this point.
[80] The evidence of Mr Cleverley was that he was the decision maker and directed Mr Fernando in his activities. This was consistent with the evidence of Mr Fernando, Mr Gilmore and Mr Russell. The evidence presented was that neither Mr Cleverley, nor any of the Duty Managers, raised any performance or hygiene concerns with Mr Fernando throughout his 11 months of employment. I am satisfied that this was the case in point.
[81] Although SOC relied on the declining numbers as part of the reason for the dismissal of Mr Fernando, Mr Russell’s evidence was he had not obtained any figures from June 2015 through to the time of Mr Fernando’s dismissal. 43 There was conflicting evidence given by Mr O’Sullivan and Mr Russell as to whether there was an increase or a decrease in patronage over the period from May 2015 to Mr Fernando’s dismissal and thereafter. Further I note no comparative data was tendered nor were there any submissions made in regards to seasonal data for the SOC. I do not find the data relied on by SOC to be of much evidential value in this matter.
[82] Both Mr Russell and Mr O’Sullivan gave evidence that the food service and menu were critical to the success of SOC attracting patrons. However it was Mr Russell’s evidence that the only discussions he had had regarding implementation or trialling of a new menu were with Mr Cleverley. Mr Russell’s evidence was under Mr Cleverley’s management there was plenty of opportunity for Mr Fernando to implement a new menu. However, Mr Russell’s evidence was that he had spoken to Mr Cleverley at a board meeting and asked who wrote the menu, to which Mr Cleverley informed him he did. Mr Russell stated;
“…the chef had no control over the menu, which I found strange”. 44
[83] Mr Russell also stated he did not believe that giving Mr Fernando the opportunity to implement a new menu was going to help improve patronage in any case.
[84] Mr O’Sullivan’s evidence was that he had discussed the implementation of a new menu with Mr Fernando, however he did not proceed down this path because he did not have the time 45.
[85] Based on the evidence before me it is my view, Mr O’Sullivan had no intention to facilitate the implementation of a new menu, as the decision to dismiss Mr Fernando had already been made in June and July 2015. Therefore I am satisfied there was no intention to provide Mr Fernando with any opportunity to address any of the concerns the Board may have had in relation to the food service or menu.
[86] The evidence leads me to conclude that Mr Fernando’s dismissal was as a result of the Board seeking to take a new direction for which they had decided Mr Fernando had no place. The evidence in this matter is that Mr Fernando had very little if any interaction with managers or the Board at SOC. All direction and control of Mr Fernando’s work was through Mr Cleverley. As the decision had already been made to dismiss Mr Fernando back in June/July 2015 he had little to no opportunity to work directly with management or the board to demonstrate his capacity to deliver the changes they had proposed as part of the new direction of SOC. Considering my earlier findings and for the reasons outlined above, I am not satisfied SOC had a valid reason for dismissing Mr Fernando.
[87] In considering whether it is satisfied that the dismissal was harsh, unjust or unreasonable, the Commission must take into account whether the person was notified of the reason. 46 Procedural fairness requires that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment.47 The notification of the valid reason must be in explicit, plain and clear terms.48
[88] It was not disputed that Mr Fernando was advised at the time of the termination that he was being dismissed. However I am not satisfied that Mr Fernando was notified of SOC’s reasons relied on in this matter for the dismissal. Mr O’Sullivan’s evidence was due to his own limited availability he informed Mr Fernando of his dismissal at the time he was dismissed and not prior to. He informed Mr Fernando that the Board had lost confidence in him and due to the dwindling numbers and reputation of SOC he was no longer required moving forward. 49
[89] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person. 50 An employee must be notified of the reason for termination and must also be given an opportunity to respond to that reason before the decision to terminate is made.51 This process does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly.52 Where an employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of this section.53
[90] Mr O’Sullivan’s evidence was the meetings he had with Mr Fernando were informal and were not conducted in the same way he would otherwise have held performance meetings of the same nature. In oral evidence Mr O’Sullivan also provided an account of the discussion with Mr Fernando at the time of the dismissal. Mr Fernando was advised of his dismissal at the time of the dismissal and not beforehand. I am not satisfied that Mr Fernando was provided with an opportunity to respond to the precise nature of SOC’s concerns about his capacity to perform the role.
[91] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal. 54 With respect to this consideration, the Explanatory Memorandum states:
“. . . This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them. 55
[92] Mr O’Sullivan’s submission was he was only at SOC on a part-time basis, therefore he needed to act quickly and did not have the luxury of waiting to permit Mr Fernando to have a support person attend what he called a ‘termination interview’. 56
[93] It is not in contention that Mr Fernando was not provided with any prior notification of the meeting on 29 November 2015, he was certainly not advised the nature of the meeting he was about to have. Further, Mr Fernando was dismissed without any prior notice at that meeting, therefore Mr Fernando was not provided with the opportunity to request or obtain a support person. In these circumstances I find Mr Fernando was effectively denied the opportunity to request a support person because he was dismissed on the spot with no chance of arranging for someone else to be present.
[94] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal. 57 Unsatisfactory performance is more likely to relate to the employee’s capacity to do the job, than their conduct.58 The Commission must take into account whether there was a period of time between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period of time gives the employee the opportunity to understand their employment is at risk and to try and improve their performance.59
[95] Mr Cleverley did not hold any discussions with Mr Fernando in his 11 months of employment with regards to any concerns regarding performance. The evidence is no other member of management or the Board held any performance discussions with Mr Fernando to which his attention was drawn to any concerns.
[96] Although the submission made by SOC was that Mr O’Sullivan had provided two formal warnings to Mr Fernando, Mr O’Sullivan’s evidence was he had engaged in informal discussions with Mr Fernando. Mr O’Sullivan’s contemporaneous notes record that he had spoken with Mr Fernando however made no mention of any warnings or the proposed seriousness or gravity of the situation.
[97] Mr O’Sullivan is an experienced venue manager who has performance managed employees in the past, and was able to articulate adequate processes for performance managing employees. He conceded he had not followed such processes with Mr Fernando. His reasons for not following those processes with Mr Fernando were that things were done informally at SOC.
[98] Whilst I accept Mr O’Sullivan may have met with Mr Fernando during the five weeks he was acting General Manager, I am not persuaded that he adequately communicated any performance concerns with Mr Fernando, nor was Mr Fernando aware that he was being performance managed in any way.
[99] As previously stated Mr O’Sullivan’s evidence was the manner in which he discussed his concerns with Mr Fernando was fairly informal. It is a reasonable conclusion in my view, unless Mr Fernando was advised there were specific performance concerns that were likely to result in dismissal during the five weeks Mr O’Sullivan was in charge, he would not have understood the gravity of the situation. There was no evidence before me to satisfy me Mr Fernando received any prior warnings or that he was informed he was at risk of being terminated.
[100] For the reasons stated earlier I am not satisfied Mr Fernando was provided with any warnings regarding his capacity to do the job.
[101] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal. 60 Further, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account 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.61
[102] It was the submission of SOC that the size of the business impacted the procedures. Mr O’Sullivan submitted things were done more informally at SOC. I note Mr Gilmore gave evidence that he had over 30 years’ experience and that he was of the view the performance management of Mr Fernando was not a proper process. Mr O’Sullivan who is an experienced manager conceded that due to his own time constraints he did not follow the process he would normally follow for his own employees.
[103] Not only does SOC have a number of highly qualified managers who they could have relied upon to provide advice and guidance in the performance management of Mr Fernando, they also have an experienced legal practitioner on the Board. It was that same legal practitioner who prepared the submissions in this matter on behalf of SOC.
[104] I am therefore not satisfied the size of the employers enterprise and the absence of dedicated human resource management can be relied on as having an effect on the procedures followed in effecting the dismissal. It is my view that the procedures adopted by SOC leading up to and in effecting the dismissal were less than optimal, but this was not related to its size.
[105] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any other matters that the Commission considers relevant. 62
[106] There were no submissions made by either party to the Commission about other relevant matters for consideration. On the materials before me, I do not consider that there are such matters.
[107] I have considered this matter together with the other matters dealt with in s.387 of the Act, and in all the circumstances I am satisfied that the dismissal was harsh, unjust and unreasonable.
[108] Based on the evidence and submissions provided in the proceedings, I am unable to come to a concluded view about what remedy is appropriate. During proceedings the parties were put on notice should I find for the applicant both parties would accordingly be directed to provide further written submissions dealing with these considerations. Directions on the filing of submissions dealing with remedy will be issued to the parties following this decision.
COMMISSIONER
Appearances:
Mr I Maxfield for the Applicant
Mr M O’Connor of Counsel for the Respondent.
Hearing details:
2016.
Melbourne:
September 20.
2 Exhibit R14.
3 Transcript PN1134.
4 Transcript PNs 647, 1131.
5 Transcript PNs 1477, 1478, 1479.
6 Transcript PN1488.
7 Transcript PN1503.
8 Transcript PN1499.
9 Transcript PN247.
10 Transcript PN264.
11 Transcript PN267.
12 Transcript PN 1692.
13 Transcript PNs1569. PN1572.
14 Transcript PN1574.
15 Transcript PN1573.
16 Exhibit R11.
17 Transcript PN1688.
18 Exhibit R10.
19 Transcript PN 1720.
20 Transcript PN 1722.
21 Transcript PN248.
22 Transcript PN250.
23 Transcript PN1590.
24 Transcript PN1388.
25 Exhibit R8.
26 Exhibit R8.
27 Transcript PN1225.
28 Transcript PNs 1529, 1530.
29 Exhibit R16.
30 Transcript PN 1487.
31 Transcript PN1234.
32 Transcript PN1701.
33 Transcript PN1396.
34 Transcript PNs 1591, 1593.
35 Transcript PN1589.
36 Transcript PNs 1636, 1637.
37 Transcript PN1448.
38 (1995) 185 CLR 410.
39 Ibid at 465.
40 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.
41 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
42 Ibid.
43 Transcript PN 1485.
44 Transcript PN1530.
45 Transcript PNs 1225, 1226, 1232.
46 Fair Work Act 2009 (Cth) s.387(b).
47 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151: Gooch v Proware Pty Ltd T/A TSM (The Service Manager) [2012] FWA 10626.
48 Previsic v Australian Quarantine Inspection Services (unreported, AIRC, Holmes C, 6 October 1998) Print Q3730.
49 Transcript PN1427.
50 Fair Work Act s.387(c).
51 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
52 Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1, 14 citing Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7 (Wilcox CJ).
53 Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1, 14-15 citing Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7 (Wilcox CJ).
54 Fair Work Act 2009 (Cth) s.387(d).
55 Explanatory Memorandum, Fair Work Bill 2009 (Cth) [1542].
56 Exhibit R14 [17].
57 Fair Work Act (Cth) s.387(e).
58 Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237.
59 Johnston v Woodpile Investments Pty Ltd T/A Hog’s Breath Café – Mindarie [2012] FWA 2 [58].
60 Fair Work Act (Cth) s.387(f).
61 Fair Work Act (Cth) s.387(g).
62 Fair Work Act (Cth) s.387(h).
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