| [2017] FWC 2688 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Teresa Margaret Murphy
v
Banana Coast Community Credit Union Ltd T/A BCU
(U2016/15578)
COMMISSIONER SAUNDERS |
NEWCASTLE, 29 MAY 2017 |
Application for relief from unfair dismissal – valid reason for dismissal – dismissal not harsh, unjust or unreasonable – application dismissed.
[1] Ms Teresa Murphy was employed by the Banana Coast Community Credit Union T/A BCU (BCU) as a Store Supervisor from January 2015 until her dismissal on 22 December 2016. Ms Murphy was dismissed in relation to her conduct in transferring about $342,000 from the account of a deceased person (Deceased Person) without obtaining a certified copy of probate. Ms Murphy alleges that her dismissal was harsh, unjust and unreasonable. BCU denies those allegations.
[2] I heard this matter in Coffs Harbour on 11 May 2017. Ms Murphy gave evidence in support of her case. BCU adduced evidence from Ms Bianca Pichaloff, BCU Manager, Performance and Service Excellence, and Mr Russell Gardner, BCU General Manager, NSW.
[3] I am required by s.396 of the Fair Work Act 2009 (Cth) (Act) to decide four matters before I consider the merits of Ms Murphy’s application. There is no dispute between the parties and I am satisfied on the evidence that:
(a) Ms Murphy’s application was made within the period required by s.394(2) of the Act;
(b) Ms Murphy was a person protected from unfair dismissal;
(c) BCU was not a “small business employer” as defined in s.23 of the Act, so that the Small Business Fair Dismissal Code was inapplicable; and
(d) Ms Murphy’s dismissal was not a case of genuine redundancy.
[4] I am required by s.387 of the Act to take into account the matters specified in paragraphs (a) to (h) of the section in considering whether Ms Murphy’s dismissal was harsh, unjust or unreasonable. I will address each of these matters in turn below.
Legal principles
[5] The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. 1 The reason for the dismissal should be “sound, defensible and well founded”2 and should not be “capricious, fanciful, spiteful or prejudiced”.3
[6] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 4 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).5
[7] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.6 It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 7
Valid reasons contended for by BCU
[8] BCU contends that it had a valid reason to dismiss Ms Murphy because she breached BCU’s Deceased Member Policy and Procedure Manual (Deceased Member Policy).
[9] The significance of breaches of employer policies in the context of a consideration of whether there was a valid reason for dismissal was discussed by the Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 8 as follows:
“[35]... as indicated by Northrop J in Selvachandran, ‘valid reason’ is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct, on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer that must be a ‘valid reason’ where ‘valid’ has its ordinary meaning of ‘sound, defensible or well founded’. As Northrop J noted, the requirement for a ‘valid reason’ should not impose a severe barrier to the right of an employer to dismiss an employee.
[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a ‘valid reason’ for dismissal.”
Deceased Member Policy and Procedure Manual
[10] It was an express term of Ms Murphy’s contract of employment, which she signed on 5 January 2015, that she read and comply with BCU’s policies and procedures:
“Policies and Procedures
As an employee of bcu you are directed to read and comply with bcu policies and procedures, and Enterprise Agreement as they relate to your employment. These policies and procedures may be varied from time to time, and you are directed to comply with such variations. Such policies and procedures do not vest enforceable rights on you however, a breach of bcu’s policies and procedures may result in disciplinary action which may include termination of your employment.”
[11] One of BCU’s policies and procedures is its Deceased Member Policy. Ms Murphy was aware of and read the Deceased Member Policy during her employment with BCU. 9 Further, Ms Murphy was aware of her requirement to use a Deceased Member Checklist when dealing with the accounts held by a deceased member of the BCU.10
[12] The Deceased Member Policy includes the following provision concerning obtaining documentation prior to the release of any funds from a deceased member’s account:
“7 DOCUMENTATION
Prior to release of any funds and/or closure of account(s), the following documentation will be required:
If single account, then …
• Certified copy of Probate
Required if balance of account exceeds $20,000 at date of death”
[13] The Deceased Member Policy also includes the following relevant background information:
“1 BACKGROUND
… As a general rule, the executor needs to apply to the court in order to have the Will and their appointment validated; this is known as applying for ‘probate’. A probate certificate confirms the person’s status to deal with the estate. If the estate is small this may not be required…
When dealing with deceased accounts, it is important that staff follow the Deceased Account checklist and complete all relevant sections.”
[14] BCU’s Deceased Member Checklist includes a list of the documents which must be “received and attached”. One such document is a “certified copy of probate (>$20,000.00)”.
[15] There is no dispute in this case that Ms Murphy used a Deceased Member Checklist when dealing with the accounts of the Deceased Person. 11 Ms Murphy did not receive a certified copy (or any copy) of probate in relation to the Deceased Person; she left the box next to that item in the checklist unmarked. It is also not in dispute that Ms Murphy, acting on instructions from the executor of the Deceased Person’s estate, released about $342,000 from the Deceased Person’s account on 12 December 2016 without witnessing or obtaining a certified copy of probate. In doing so, Ms Murphy breached the Deceased Member Policy.
Conclusion on valid reason
[16] Although I accept that Ms Murphy did not intentionally breach the Deceased Member Policy, her conduct in releasing the funds from the Deceased Person’s account without obtaining a certified copy of probate constituted a clear and substantial breach of that policy and gave BCU a sound, defensible and well founded reason to dismiss her.
[17] For the reasons set out above, I am satisfied that BCU had a valid reason for Ms Murphy’s dismissal related to her conduct.
[18] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made 12, and in explicit13 and plain and clear terms.14 In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following (at [73]):
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the 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 170(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.”
[19] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 15
[20] Allegations in relation to the release of funds from the Deceased Person’s account without first obtaining a certified copy of probate, in a breach of the Deceased Member Policy, were put to Ms Murphy in a meeting on 16 December 2016. Ms Murphy was told that the meeting was a formal performance discussion, the purpose of which was to discuss alleged serious breaches of the Deceased Member Policy in relation to the Deceased Person. Ms Murphy was provided with an opportunity to provide a response to the allegations put to her in the meeting on 16 December 2016. At the end of that meeting Ms Murphy was informed that one of the disciplinary actions that BCU may take in relation to her conduct may be termination of her employment.
[21] On 22 December 2016, Ms Murphy attended a further meeting with Mr Gardner and Ms Lantry, BCU Human Resources Manager, at which time she was informed that BCU had conducted a further review of the deceased estate matter and had decided that her employment would be terminated. Ms Murphy was also provided with a letter of termination dated 22 December 2016 which set out BCU’s reasons for dismissal.
[22] On the basis of the evidence summarised in the previous two paragraphs, I am satisfied that BCU notified Ms Murphy of the reasons for her dismissal and gave her an opportunity to respond to those reasons before making the decision to dismiss her.
[23] I do not accept Ms Murphy’s argument that she was not informed of the reasons for the decision to dismiss her and was not given an opportunity to respond to those reasons prior to the decision being made because she was informed on 22 December 2016 that a further review of the deceased estate matter had been conducted but she was not informed about the results of any such further review or investigation. There is no dispute that BCU put to Ms Murphy squarely on 16 December 2016 that she had released funds from the Deceased Person’s account without first obtaining a certified copy of probate, her conduct in that regard constituted a breach of the Deceased Member Policy, and BCU was considering terminating her employment. In the period between 16 and 22 December 2016, BCU reviewed and considered Ms Murphy’s responses to the matters put to her in the meeting on 16 December 2016. After considering those matters, BCU came to a decision that it would terminate Ms Murphy’s employment on the basis of her “clear and significant breach of policy and procedures”. 16 That decision was communicated orally to Ms Murphy on 22 December 2016 and she was provided with a letter on the same day confirming the decision and setting out the reasons for it. There is no suggestion in the evidence that BCU based its decision to dismiss Ms Murphy on matters other than those discussed with her in the meeting on 16 December 2006.
[24] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
[25] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
“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.”17
[26] Ms Murphy had a support person with her during the meetings with BCU on 16 and 22 December 2016. Accordingly, I am satisfied that there was no unreasonable refusal by BCU to allow Ms Murphy to have a support person present to assist at any discussions relating to her dismissal.
[27] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal.
[28] In this case, the reasons for dismissal related to Ms Murphy’s conduct, rather than her performance, so this consideration is not relevant.
[29] BCU is a medium size business; it employs about 180 employees. I do not consider that its size would be likely to impact on the procedures followed in effecting Ms Murphy’s dismissal.
[30] BCU has dedicated human resource management specialists and expertise, so this consideration is not relevant.
[31] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
[32] The basis upon which a dismissal may be found to be harsh, unjust or unreasonable, notwithstanding a finding that there was a valid reason for dismissal based upon conduct in breach of employer policy was explained by the Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 18 in the following terms:
“[41] Nevertheless, it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” for the dismissal”: Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; J Boag & Son Brewing Pty Ltd v John Button [2010] FWAFB 4022; Windsor Smith v Liu [1998] Print Q3462; Caspanello v Telstra Corporation Limited [2002] AIRC 1171; King v Freshmore (Vic) Pty Ltd [2000] Print S4213; Dahlstrom v Wagstaff Cranbourne Pty Ltd [2000] Print T1001; Erskine v Chalmers Industries Pty Ltd [2001] PR902746 citing Allied Express Transport Pty Ltd (1998) 81 IR 410 at 413; Qantas Airways Limited v Cornwall (1998) 82 IR 102 at 109; ALH Group Pty Ltd T/A the Royal Exchange Hotel v Mulhall [2002] PR919205. That principle reflects the approach of the High Court in Victoria v Commonwealth and is a consequence of the reality that in any given case there may be “relevant matters” that do not bear upon whether there was a “valid reason” for the dismissal but do bear upon whether the dismissal was “harsh, unjust or unreasonable”.
[42] Broadly speaking, circumstances bearing upon whether a dismissal for misconduct is harsh, unjust or unreasonable fall into three broad categories:
(1) The acts or omissions that constitute the alleged misconduct on which the employer relied (together with the employee’s disciplinary history and any warnings, if relied upon by the employer at the time of dismissal) but otherwise considered in isolation from the broader context in which those acts or omissions occurred.
(2) The broader context in the workplace in which those acts or omissions occurred. [This may include such matters as a history of toleration or condonation of the misconduct by the employer or inconsistent treatment of other employees guilty of the same misconduct.]
(3) The personal or private circumstances of the employee that bear upon the substantive fairness of the dismissal. [This includes, matters such as length of service, the absence of any disciplinary history and the harshness of the consequences of dismissal for the employee and his or her dependents.]
[43] The determination of whether there was a “valid reason” proceeds by reference to the matters in category (1) and occurs before there is a consideration of what Northrop J described as “substantive fairness” from the perspective of the employee. Matters in categories (2) and (3) are then properly brought to account in the overall consideration of the whether the dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason”.
...
[47] In Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 41 IR 452 Sheppard and Heerey JJ observed (at p 460):
“Employers can promulgate polices and give directions to employees as they see fit, but they cannot exclude the possibility that instant dismissal of an individual employee for non-compliance may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable.”
[48] Thus, a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is not harsh, unjust or unreasonable. The Commission has consistently applied the proposition that instant dismissal of an employee for non-compliance with his or her employer’s policies may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable: Kangan Batman TAFE v Hart [2005] PR958003, Ross VP, Kaufman SDP and Foggo C at para [51]; Fearnley v Tenix Defence Systems Pty Ltd [2000] Print S6238, Ross VP, Polites SDP and Smith C (Fearnley) at [61]); Atfield v Jupiters Ltd (2003) 124 IR 217 (Jupiters) at [12]-[13].”
[33] There are a number of “other matters” which are relevant to my determination as to whether Ms Murphy’s dismissal was harsh, unjust or unreasonable. I will deal with each of them in turn below.
Ms Murphy’s awareness of her obligations under the Deceased Member Policy
[34] Ms Murphy contends that BCU failed to take “adequate” steps to ensure that she was fully aware of her obligations under the Deceased Member Policy, or to make her aware that dismissal could result from breaches of such a policy. Ms Murphy also contends that she was not provided with any training in relation to the Deceased Member Policy or the Deceased Member Checklist.
[35] I accept that Ms Murphy did not receive any training from BCU in the Deceased Member Policy or the Deceased Member Checklist. I also accept that some weight should be given to this lack of training in my consideration of whether Ms Murphy’s dismissal was harsh, unjust or unreasonable. However, I am only prepared to give this lack of training a limited amount of weight for the following reasons:
• Ms Murphy was aware of, and had read, the Deceased Member Policy during her employment with BCU;
• the requirement in the Deceased Member Policy for an employee to obtain a certified copy of probate before releasing any funds from the account of a deceased person (assuming the account exceeded $20,000 at the date of death) was clear and unambiguous;
• Ms Murphy was aware of, and had used, the Deceased Member Checklist during her employment with BCU. In fact, Ms Murphy used a Deceased Member Checklist when dealing with the Deceased Person’s account;
• the requirement in the Deceased Member Checklist to obtain a “certified copy of probate (>$20,000.00)” was clear and unambiguous;
• Ms Murphy did not ask anybody about the requirement to obtain a certified copy of probate in connection with the Deceased Person’s account. She should have done so if she did not understand whether or why such a document was required; and
• Ms Murphy had communicated with BCU’s Store Support team in relation to other deceased estates during her employment with BCU. Although Ms Murphy had not previously dealt with the precise situation that confronted her on 12 December 2016 in relation to the transfer of funds from the account of a deceased person, she had previously communicated by email with an email address known as “Deceased Accounts”, which was used by BCU’s Store Support team. Ms Murphy could have sent an email to that email address or otherwise contacted someone from the Store Support team if she was unsure about transferring approximately $342,000 from the account of the Deceased Person. There is no evidence to suggest that Store Support was not available to be contacted by Ms Murphy at about the time of the transaction on 12 December 2016.
[36] Ms Murphy was on notice from the express term in in her contract of employment concerning BCU’s policies and procedures that she may be dismissed for breaching such a policy or procedure.
“Engineering out” human error
[37] Ms Murphy submits that BCU had the ability to “engineer out” the possibility that she could distribute funds from the Deceased Persons account without first obtaining a certified copy of probate. In particular, it was submitted that BCU could have programmed its computerised systems to prevent an employee in Ms Murphy’s position from being able to distribute or transfer funds from the account of a deceased person, either at all or in particular circumstances. It was put in submissions that BCU was “grossly negligent” 19 and the “architect of their own misery”20 for failing to implement such controls.
[38] I do not accept these “engineering out” arguments. It is open to an employer to deal with a business risk in a variety of ways, including by implementing policies and procedures and/or by implementing technological systems which prevent employees from undertaking particular actions. In this case, BCU implemented a clear policy which required its employees to obtain a certified copy of probate for a deceased person’s account exceeding $20,000 prior to releasing any funds from that account. BCU also implemented a Deceased Member Checklist as a tool to limit the prospect of an employee failing to comply with their obligation under the Deceased Member Policy to obtain a certified copy of probate prior to releasing funds from the account of a deceased person. If those clear policies and procedures had been followed, there would not have been a problem. That BCU could have implemented a technological solution to eliminate the risk is not, in my view, relevant to an assessment of whether Ms Murphy’s dismissal for breach of the Deceased Member Policy was harsh, unjust or unreasonable.
Allegation of bullying against Mr Gardner
[39] On 19 December 2016, Ms Murphy made an allegation in writing that Mr Gardner had intimidated, bullied and harassed her in the meeting on 16 December 2016.
[40] In light of Ms Murphy’s allegations of bullying against Mr Gardner, Ms Murphy contends that he should have been removed from any decision-making role in relation to the potential termination of her employment.
[41] Evidence was adduced in these proceedings by a number of witnesses about what happened in the meeting on 16 December 2016. Having considered that evidence, I am satisfied that Mr Gardner did not intimidate, bully or harass Ms Murphy in that meeting. Mr Gardner asked Ms Murphy a number of questions during the meeting in an effort to find out what happened on 12 December 2016 and why Ms Murphy had transferred funds from the Deceased Person’s account without first obtaining a certified copy of probate. Mr Gardner probably became a bit frustrated by Ms Murphy’s refusal to answer various questions asked of her, and shrugging her shoulders in response to some such questions, but he did not, in my view, behave inappropriately. Accordingly, I reject the contention that Mr Gardner should have been removed from any decision-making role in relation to the potential termination of Ms Murphy’s employment.
Remorse
[42] I accept that Ms Murphy apologised for her mistake during the meeting on 16 December 2016. I have had regard to Ms Murphy’s remorse in assessing whether Ms Murphy’s dismissal was harsh, unjust and/or unreasonable.
[43] However, I also accept Mr Gardner’s assessment that Ms Murphy was somewhat uncooperative during the meeting on 16 December 2016, in that she did not answer a number of questions asked by Mr Gardner in the meeting and simply shrugged her shoulders when asked about various matters. This was, understandably, of concern to Mr Gardner because he was trying to get an understanding of what had occurred and why it had occurred. The answers Ms Murphy gave and the manner in which she conducted herself in the meeting on 16 December 2016 did not give Mr Gardner any confidence that she would take accountability for her mistake and would comply with BCU’s policies and procedures in the future. In light of Ms Murphy’s experience in the financial services industry and her leadership role as a Store Supervisor, these matters posed a risk to BCU’s business.
Ms Murphy’s history of employment with BCU
[44] Ms Murphy commenced employment with BCU in January 2015 and remained in that employment until she was dismissed on 22 December 2016. Other than her substantial breach of policy on 12 December 2016, Ms Murphy had a good employment record with BCU. This weighs in her favour.
[45] The positive aspects of Ms Murphy’s work performance must, however, be weighed against the conduct in which she engaged on 12 December 2016 in coming to an overall view about Ms Murphy’s performance and the history of her employment with BCU. I address the gravity of Ms Murphy’s conduct in paragraph [48] below.
Harshness of the dismissal
[46] Ms Murphy’s dismissal has had significant negative consequences for her personal and economic situation. In particular, she has spent a career working in the financial services industry, but has been prevented from continuing to work in that industry by reason of one unintentional mistake on 12 December 2016. Although she was paid four weeks’ pay in lieu of notice on termination, Ms Murphy was without any employment from 22 December 2016 until about May 2017. That has obviously had a significant financial impact on Ms Murphy and her family.
[47] I accept that Ms Murphy has made significant efforts to find alternative employment, and she has only recently obtained alternative employment in a different industry on a casual basis. I also accept it will be difficult for Ms Murphy to find alternative employment in the financial services industry in a regional location such as Coffs Harbour.
[48] The harsh aspects of the dismissal must be weighed against the gravity of Ms Murphy’s conduct in respect of which BCU acted in deciding to dismiss her. Although not a deliberate breach of policy, Ms Murphy’s conduct in failing to obtain a certified copy of probate prior to releasing substantial funds from the Deceased Person’s account exposed BCU to the risk of significant financial loss. In particular, had the Deceased Person’s will been disputed or some other challenge made to the application for a grant of probate, BCU may not have been in a position to recover the funds transferred by Ms Murphy on 12 December 2016 and BCU may have been liable to the estate or particular beneficiaries for any losses incurred. For a reasonably small credit union such as BCU, the amount of money involved in this case (about $342,000) was a fairly substantial sum.
[49] In the circumstances, I am satisfied that Ms Murphy’s dismissal was not disproportionate to the gravity of her substantial breach of policy on 16 December 2016, nor was it harsh in any other sense.
[50] BCU had a sound, defensible and well founded reason for dismissing Ms Murphy on the basis of her conduct. In particular, Ms Murphy’s dismissal was based on her substantial breach of BCU’s Deceased Member Policy. BCU undertook a detailed investigation into Ms Murphy’s conduct and considered the matters she raised. BCU afforded Ms Murphy an opportunity to respond to the allegations made against her. She was afforded procedural fairness throughout the process.
[51] Having considered each of the matters specified in s.387 of the Act, I am satisfied that BCU’s dismissal of Ms Murphy was not harsh, unjust or unreasonable. Ms Murphy’s unfair dismissal application is therefore dismissed.
COMMISSIONER
Appearances:
Heffernan, M, of Fair Work Claims, for the Applicant
Paterson, A, solicitor of Australian Business Lawyers & Advisors, for the Respondent
Hearing details:
2017
Coffs Harbour
11 May
1 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.
2 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
3 Ibid
4 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685
5 Ibid
6 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].
7 Ibid
9 PN90 & PN162 – PN166
10 PN96 - PN118
11 PN108 – PN110
12 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]
13 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151
14 Previsic v Australian Quarantine Inspection Services Print Q3730
15 RMIT v Asher (2010) 194 IR 1 at 14-15
16 Exhibit R1 at [26]
17 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].
19 PN737
20 PN737
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