[2017] FWC 1515

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Damien Lumsden
v
East Arnhem Regional Council
(U2016/12887)

COMMISSIONER BISSETT

MELBOURNE, 24 MARCH 2017

Application for relief from unfair dismissal.

[1] Mr Damien Lumsden was employed by the East Arnhem Regional Council (EARC) as the Municipal Services Supervisor in Milingimbi in the Northern territory. Milingimbi is a small community of about 1,000 people.

[2] Mr Lumsden’s employment was terminated on 11 October 2016. The letter of termination said, in part:

On 15^th August 2016 you completed and signed the EARC Accident and Incident Report where you stated you were driving a EARC Vehicle (registration number: C135629) which was involved in an incident.

Section 7 of the EARC Accident & Incident Report states:

‘By signing this, I declare that the information on this form is true and correct and no other information relevant to this incident has been withheld.’

On Tuesday 13^th September 2016 you participated in a Municipal Services Supervisor’s teleconference at the Milingimbi Council Office where you stated; “recently we had an incident where both Owen Roberts (Council Service Manager, Milingimbi), and myself knew that we had no licensed (sic) drivers but decided anyway to use the staff to operate the vehicle. The driver (Arthur Murrupu), bent the bumper then I had to jump in and take the blame”. 1

[3] The letter went on to say that Mr Lumsden’s actions breached the EARC “Code of Conduct”. Following a review of Mr Lumsden’s conduct and behaviour it was decided to terminate his employment. Mr Lumsden received five weeks’ pay in lieu of notice and was offered $5,000 repatriation expenses.

[4] The incidents that led to the decision to terminate Mr Lumsden’s employment are not clear cut. Mr Lumsden says that, due to a brain injury he sustained in 1990 his memory is not always reliable. He did, however, provide written and oral evidence to the Fair Work Commission (Commission).

[5] Mr Owen Roberts, formerly Council Services Manager of EARC, who was involved in some of the incidents, provided a written statement 2 in reply to that of Mr Lumsden. He also provided an email he had sent on 19 September 2016 to Mr Ben Waugh, Director Council Services of EARC, in relation to some of the incidents. Mr Roberts was not available for cross-examination but no objection was taken to his statement or email being admitted.

[6] Mr Ben Waugh provided a written statement 3 in relation to some assistance he gave to Mr Lumsden in relation to a tax matter which is only of peripheral relevance. Mr Waugh was not available for cross-examination but no objection was taken to his statement being admitted. Mr Waugh provided no statement in relation to counselling meetings with Mr Lumsden or the meeting at which Mr Lumsden’s employment was terminated.

[7] Mr Arthur Murrupu provided a brief written statement. 4 He was not available for cross-examination but no objection was taken to his statement being admitted.

[8] Mr Lumsden was responsible for the supervision of at least two to three staff. Two of these, Mr Murrupu and Mr Johnny Dallarer had vehicle licences but each lost their licence. The dates they lost their licence are not clear although Mr Lumsden says that in about December 2015 he found that Mr Dallerer lost his licence (although he says he told Mr Roberts of this in June 2015). He says that in May 2016 he was told by Mr Roberts that Mr Murrupu had lost his licence.

[9] Mr Roberts says he was not aware either worker had lost their licence. When he did find out he says he told both men that if they continued to drive they might lose their jobs. This appears to have occurred around August 2016 although the date is not confirmed in any statements.

[10] Sometime in mid to late 2016 there was an incident with a rubbish truck. As a result, some damage was done to the bumper bar.

[11] Mr Lumsden says:

● the incident occurred in June 2016. Mr Murrupu was driving the rubbish truck (the vehicle) and told Mr Lumsden of the damage.

● Mr Lumsden told Mr Roberts about it at the time.

● Mr Roberts had Mr Murrupu fill in an Accident and Incident Report (A&I Report).

● On finding out Mr Murrupu did not have a licence Mr Roberts made Mr Lumsden fill in a report.

● Mr Lumsden resisted signing the report but eventually did so on 15 August 2016.

[12] Mr Roberts says:

● On 15 August 2016 Mr Lumsden told him of the damage to a backhoe and the vehicle.

● Mr Roberts put in a maintenance request but was asked by Mr Errol Weber, Fleet Manager of EARC, to put in an A&I Report.

● Mr Weber arrived at Milingimbi on 16 August 2016 to undertake fleet inspections.

● On 17 August 2016 Mr Roberts completed what he could of the A&I Report and signed it as the authorising officer.

● On 22 August 2016 Mr Weber emailed him and said the A&I Report had not been completed. Mr Roberts emailed Mr Lumsden and Mr Robert Baker and asked Mr Baker to assist Mr Lumsden in completing the A&I Report.

● Mr Roberts says that on 29 August 2016:

I received an email from Errol [Weber] in regards to the fleet inspection – several ongoing issues in regards to the Municipal fleet were raised. These included general tidiness, maintenance, reporting, not following fleet policy. Errol also raised the fact that the [A&I] report was not sent in – I got advice from HR on how to proceed and moved forward with a formal first and final warning (as there had been previous documented counselling with Damien [Lumsden] in regards to fleet in April as well as numerous individual directions to clean vehicles, ensure check sheets were done ect (sic)).

● On 9 September 2016 Mr Roberts was again informed by Mr Weber that the A&I Report had not been completed. On 12 September 2016 Mr Roberts completed and sent through a report he had completed as the incident had been relayed to him.

[13] On 12 September 2016 Mr Lumsden was given a first and final warning in writing (dated 31 August 2016) by Mr Roberts. The first and final warning related to Mr Lumsden’s “unsatisfactory performance and lack of care to vehicle cleanliness, paperwork and maintenance” during his employment with EARC. Details of his unsatisfactory work performance were listed as:

● A counselling session held on 28 April 2016 with Mr Roberts in which vehicle cleanliness and work planning were discussed;

● A meeting on 17 August 2016 with Mr Roberts where the importance of vehicle check sheets being completed was discussed. Mr Lumsden was advised that a failure to meet this requirements could affect his job performance;

● A request was made on 22 August 2016 to complete an incident report but it was still not completed on 29 August 2016;

● There were several unexplained incidents and damage to vehicles that Mr Roberts only became aware of on 29 August 2016. 5

[14] At a meeting of Municipal Services Supervisors on 13 September 2016 Mr Lumsden told the meeting that both he and Mr Roberts were aware of unlicenced driving, that Mr Roberts did nothing about it and that he, Mr Lumsden, was pressured into signing the I&E Report as if he was the driver of the vehicle during the incident.

[15] Following the meeting Mr Lumsden had a counselling session with Mr Waugh and Mr Roberts with respect to those matters in the first and final warning letter. The counselling session, according to Mr Roberts, concentrated on helping Mr Lumsden “stay on top of his paperwork, follow council fleet policy, and keeping vehicles clean”. It also covered issues in relation to whether or not Mr Murrupu had a licence and who was aware of this.

[16] The EARC submits that in the few weeks following the counselling session Mr Waugh undertook an investigation of the vehicle incident although Mr Waugh provides no evidence of this. Mr Lumsden was not told of the investigation or given any opportunity to comment on its outcomes. No outcomes of the investigation were put before the Commission.

[17] On 11 October 2016 Mr Lumsden’s employment was terminated. In its submissions EARC says that his employment was terminated for:

● Falsifying a critical incident report;

● Breaches of the Code of Conduct:

○ Violations of laws and failure to comply with Council policies, procedures, rules and regulations;

○ Not being truthful in all dealings with persons encountered in the workplace;

○ Not acting with integrity and be honest in his dealings with people and be accountable for actions;

○ Not conducting himself in a proper manner so as to not discredit the organisation.

[18] Mr Lumsden claims that he was unfairly dismissed and has made an application to the Commission for relief pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[19] Mr Lumsden was represented by a lawyer and EARC was represented by Latitude 12. Permission was granted to both parties to be represented in accordance with s.596(2)(b) and (c) of the FW Act.

Legislation

[20] The provisions of the FW Act relevant to the matter I must determine are:

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(d) the dismissal was not a case of genuine redundancy…

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…

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(d) whether the dismissal was a case of genuine redundancy.

Consideration

[21] It is not disputed that Mr Lumsden:

● made his application within the required period specified in the FW Act;

● that he is protected from unfair dismissal; 6

● that EARC is not a small business such that the Small Business Fair Dismissal Code is not a relevant consideration; and

● that his dismissal was not a redundancy.

[22] It is also not disputed that Mr Lumsden was dismissed from his employment.

[23] In determining if Mr Lumsden was unfairly dismissed it is necessary, therefore, to consider if the dismissal was harsh, unjust or unreasonable. In deciding this, it is necessary to consider each of the matters set out in s.387 of the FW Act.

(a) a valid reason

[24] For a reason to be valid it must be “sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced cannot be a valid reason”. 7

[25] Where the dismissal has been for reasons of misconduct it is necessary for the Commission to be satisfied that the conduct did, in fact, occur. 8

[26] In this case, Mr Lumsden does not take issue that there was a valid reason for his dismissal. I take from this that he accepts that he did, in fact, falsify the A&I Report, in that he completed (or at least signed) the report as if he had been driving the truck at the time when he had not (although I note Mr Lumsden says he was forced to sign the A&I Report).

[27] I am satisfied that the person driving the truck was Mr Murrupu. I am also satisfied that, at time of the incident (which I accept occurred in August, not June) Mr Lumsden was aware that Mr Murrupu did not have a valid licence. On Mr Lumsden’s best evidence he was aware of this in May 2016 when he says Mr Roberts told him. 9 Even accepting Mr Lumsden’s problems with his memory, I am satisfied that he was aware of this at the time of the incident described in the A&I Report.

[28] I am satisfied that Mr Lumsden signed the A&I Report indicating that he was the driver of the truck when the incident occurred. It is not clear that Mr Roberts was aware either that Mr Murrupu was the actual driver of the truck at the time he signed the form on 17 August 2016 or that Mr Murrupu did not have a licence at the time of the incident. Whilst it is not clear when Mr Lumsden signed the A&I Report, I am satisfied that it was not before 31 August 2016 on the basis that this was raised in the first and final warning issued to him.

[29] In signing the A&I Report when he was not, in fact, the driver, Mr Lumsden did mislead EARC.

[30] Further, I am satisfied that Mr Lumsden did allow Mr Murrupu and Mr Dallarer to drive EARC vehicles when he knew they did not hold valid licences.

[31] I am satisfied that Mr Lumsden had been counselled with respect to his performance in maintaining the cleanliness of vehicles in April 2016. Whilst a plan had been put in place for maintaining the vehicles as required, there is no evidence that Mr Roberts followed this up formally after April although he does say he followed it up informally. It is not clear why, if Mr Lumsden was not performing at the required level in this respect, there was nothing more formalised about failing to meet the April plan until the fleet inspection by Mr Weber and the first and final warning letter of 31 August 2016.

[32] I am not satisfied that the cleanliness of the vehicles, by themselves, provides a valid reason for the dismissal of Mr Lumsden. Whilst the recurrence of the performance issue may have warranted a warning it is not clear that it warranted a “first and final” warning such that it then provided a basis, six weeks later, for dismissal.

[33] I am satisfied that allowing unlicenced drivers to drive EARC vehicles (including trucks) is a serious matter and does provide a valid reason for dismissal. The consequences for EARC, had there been a reportable accident, would be severe. I am satisfied that Mr Lumsden, signing off as being the driver on the A&I Report when he was not, in conjunction with allowing unlicenced drivers to drive vehicles, provides a valid reason for dismissal.

(b) whether the person was notified of the reason

[34] In Crozier v Palazzo Corporation Pty Ltd, 10 305 the Full Bench said:

[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG (3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.

[35] In this case, it is not evident that Mr Lumsden was advised of the reason for his dismissal prior to the decision being taken to dismiss him. Whilst the first and final warning mentions the failure to sign the A&I Report, issues relating to allowing unlicenced drivers to drive EARC vehicles and signing off the A&I Report as being the driver when he was not were never put to Mr Lumsden prior to receipt of the dismissal letter.

[36] The decision to dismiss Mr Lumsden was not taken at the time he was issued with the first and final warning – the decision at that time was that conduct and performance issues to that date warranted no more than a first and final warning. This is not the relevant point in time at which the notification could be given. The first and final warning is and must be seen as a totally different decision making process to the decision to dismiss.

[37] Mr Lumsden was therefore not notified of the reason for his dismissal.

(c) an opportunity to respond

[38] An employee must be given an opportunity to respond to the reason for dismissal prior to that decision being taken. Otherwise the opportunity is meaningless.

[39] Mr Lumsden was not given an opportunity to respond to the reason for his dismissal. Whilst a meeting was held with him on 11 October 2016 (on Mr Lumsden’s evidence) there is no evidence of any discussion with Mr Lumsden of that reason nor that his response was sought prior to a decision to dismiss him being made. Matters relied on to justify dismissal were never raised with him such that he was given an opportunity to provide any explanation for his action or to influence the decision maker at EARC.

[40] Again, the decision to dismiss Mr Lumsden was not taken at the time of the counselling meeting of 14 September 2016. That meeting focussed on “helping Damien stay on top of his paperwork, follow council fleet policy, and keeping vehicles clean.”

[41] EARC has denied Mr Lumsden any procedural fairness in deciding to terminate his employment. Mr Lumsden was not given an opportunity to respond to the reason for dismissal.

(d) unreasonable refusal to allow a support person

[42] Mr Lumsden says that, when he was called to the meeting of 11 October 2016, he asked if he needed a support person and was told by Mr Waugh that it wouldn’t be necessary as “it’s all very straightforward”.

[43] I am satisfied, on the basis of his comment to Mr Lumsden, that Mr Waugh was well aware that he intended to dismiss Mr Lumsden at the meeting of 11 October 2016. That it might have been “straightforward” from Mr Waugh’s perspective is no reason to discourage an employee from bringing a support person to such a meeting. Knowing what he intended to do, Mr Waugh inappropriately denied Mr Lumsden access to a support person.

[44] I do note that Mr Lumsden had some sense that the meeting was not going to be a positive one. When advised by Mr Waugh of the meeting Mr Lumsden, on his evidence, replied that it “doesn’t sound very good.” He however took Mr Waugh’s advice that a support person was not necessary.

[45] It is not uncommon that an employee will ask the employer if they need a support person present at a meeting, as was the case here. It is not clear to me why an employer would answer “no” to such a request but it is my experience that they often do. This, however, cannot be the basis of a finding of unreasonable refusal of a support person – although in my opinion it comes very close. In this case, Mr Lumsden did not ask to bring a support person with him and have that request refused, rather he asked if he should and was told no. He chose to accept that advice.

(e) unsatisfactory performance

[46] It is not apparent that Mr Lumsden’s employment was terminated for performance related issues, although I do note that the April counselling was in relation to performance matters – that is, that Mr Lumsden was not performing his duties to the standard required by his employer.

[47] In terminating Mr Lumsden’s employment for misconduct reasons, EARC cannot rely on performance issues to justify the termination.

(f) & (g) the size of the employer’s undertaking and access to dedicated human resource specialist or expertise

[48] I am satisfied that EARC is a large employer. It has approximately 290 employees. I am also satisfied that EARC has access to human resource expertise.

[49] EARC was represented in proceedings by Latitude 12, an organisation that provides “tailored managed business services to its clients in remote and regional Australia”. 11 Latitude 12 says that “As an employer, you can achieve piece (sic) of mind, completeness, independence and assurance that all HR related services are managed thoroughly, in a professional manner by industry experts.”12 The evidence of Mr Lumsden is that Latitude 12 “do the human resources for East Arnhem Shire” and Mr Roberts, in his email of 19 September 2017, said he got advice from “HR” on how to proceed (with the first and final warning). I take “HR” to be Latitude 12.

[50] I am satisfied that EARC had access to human resource expertise. There is no reason its size or access to human resource expertise should adversely impact on how it went about affecting the dismissal.

(h) other matters

[51] Mr Lumsden submits that there was a culture of turning a blind eye to unlicenced drivers. He relies on a claim of unlicenced people driving vehicles after the cyclones in 2015 when a state of emergency was declared and his claim of an initial lack of concern by Mr Roberts about the unlicenced employees driving EARC vehicles.

[52] I have not taken into account what may or may not have been allowed to occur when cyclones hit the area and a state of emergency was declared. I am not sure of its relevance to the matter I must decide but, in any event, they are unsupported assertions. Further, I am not satisfied that Mr Roberts knew of the unlicenced driving such that he could be seen to have tacitly agreed to it.

[53] Mr Lumsden says that he has been treated less favourably than others.

[54] I accept that Mr Murrupu and Mr Dallarer have both lost their licences and, it has been established, were driving whilst not licenced. I am not satisfied, however, that their situations can be compared to that of Mr Lumsden such that an argument of less favourable treatment can be sustained.

[55] In Sexton v Pacific National (ACT) Pty Ltd, 13 Vice President Lawler said of claims of unequal treatment:

[36] In my opinion the Commission should approach with caution claims of differential treatment in other cases advanced as a basis for supporting a finding that a termination was harsh, unjust or unreasonable within the meaning of s.170CE(1) or in determining whether there has been a “fair go all round” within the meaning of s.170CA(2). In particular, it is important that the Commission be satisfied that cases which are advanced as comparable cases in which there was no termination are in truth properly comparable: the Commission must ensure that it is comparing “apples with apples”. There must be sufficient evidence of the circumstances of the allegedly comparable cases to enable a proper comparison to be made. Obviously, where, as in National Jet Systems, there is differential treatment between persons involved in the same incident the Commission can more readily conclude that the cases are properly comparable. However, even then the Commission must approach the matter with caution. Specifically, the Commission must be conscious that there may be considerations subjective to the circumstances of an individual that caused an employer to take a more lenient approach in an allegedly comparable case. For example, a worker guilty of particular misconduct justifying termination might be shown leniency because of extreme need or stress arising from the serious illness of a close dependent. Another worker guilty of the same misconduct could not necessarily rely upon the leniency shown to the first worker as a basis for demonstrating that his or her termination was harsh, unjust or unreasonable. Many other examples could be constructed.

[56] The treatment of Mr Lumsden can only be compared to that of others if those others are in the comparable situation as Mr Lumsden. In this case, I am not convinced that a claim of differential treatment can be sustained. Mr Lumsden was Mr Murrupu and Mr Dallarer’s supervisor. He knew that each had lost their licences. Without needing to establish when he knew this, Mr Lumsden implicitly allowed their misconduct to occur by not stopping them from driving when he was in a position to do so. The situations are not comparable. This is not to condone drink driving or driving whilst unlicenced but these are not situations that can be compared to that of Mr Lumsden.

[57] I am satisfied that pressure was placed on Mr Lumsden to sign the A&I Report but that this was in circumstances where Mr Roberts understood Mr Lumsden to have been in charge of the vehicle at the time of the incident. I would note, however, that it was not clear that Mr Roberts left clear instructions for Mr Lumsden to complete the A&I Report. Mr Roberts’ statement in his email of 19 September 2016 is that he commenced filling in the form and then left it on his desk when he left for Darwin and then on leave. No explanation is given as to why Mr Baker did not assist Mr Lumsden as requested by Mr Roberts or who gave a specific direction to Mr Lumsden to complete the form. It does appear that everyone except Mr Lumsden was told that the A&I Report needed to be completed by Mr Lumsden. The 31 August 2016 first and final warning seems to be the first time it was clearly put to Mr Lumsden that he was required to complete and sign the form.

[58] I do not accept that Mr Roberts had a grudge against Mr Lumsden and that this motivated the decision to terminate his employment. If this was the case, it does not explain why EARC proceeded with the dismissal after Mr Roberts had left its employment.

[59] Mr Lumsden says he is still shocked at the loss of his job. He has lived in Milingimbi, which is an island off the remote north coast of the Northern Territory, for 17 years and does not wish to leave the community.

[60] I do not accept the exaggerated claims of EARC that Mr Lumsden committed “life threatening breaches of safe work practices”. Whilst I accept that there may have been consequences had an accident occurred, I do not accept that Mr Lumsden’s actions were, in and of themselves “life threatening”.

Conclusion as to unfair dismissal

[61] In Byrne v Australian Airlines Limited 14 it was found that:

…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. 15

[62] Whilst I am satisfied that there was a valid reason for the dismissal of Mr Lumsden, the abject failure to afford him procedural fairness in reaching the decision to terminate his employment makes the decision unreasonable. Again, whilst there was a valid reason for the dismissal, I am not satisfied that the decision to terminate Mr Lumsden’s employment was justified in circumstances. In a small, remote community, counselling and a warning in relation to the matter would not have been a more just outcome.

[63] For these reasons, I find that Mr Lumsden was unfairly dismissed.

Remedy

[64] Mr Lumsden seeks reinstatement.

[65] Section 390 of the FW Act states:

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies

[66] EARC strongly oppose reinstatement based on Mr Lumsden’s conduct and what they claim to be an “irreparable breakdown of the employee/employer relationship”.

[67] In this case, I am not satisfied that reinstatement is appropriate. Mr Lumsden has not displayed the requisite level of professional conduct in managing staff such that reinstatement is reasonable. The workforce in Milingimbi is small and Mr Lumsden would have to interact with those who have been involved in reaching the decision to dismiss him for misconduct. I am not satisfied that the working relationship between Mr Lumsden and others can be properly restored.

[68] On this basis, I will consider compensation.

[69] I have not received submissions from the parties that go to the issue of compensation. I shall therefore issue separate directions for the filing of submissions with respect to this matter and resolve it separately.

Seal of the Fair Work Commission with member's signtaure.