https://www.fwc.gov.au/documents/decisionssigned/html/2019fwc6172.htm

This matter saw the respondent subjected to lost business opportunities due to its lack of proper processes, which were not assisted by (according to the Commissioner) an unqualified HR Manager. There were seven witnesses called over two days of hearing, which was preceded by witness statements and, of course legal costs. The falsification of the medical certificate was discovered after the dismissal, and the Commissioner discounted the compensation paid by 30 percent because of this.

The applicant in this matter was employed as a showroom manager for the respondent, a furniture retail business.

As Showroom Manager, the Applicant was responsible for styling and photoshoots which involved the Applicant solely staging and managing the photographic shoots to promote the respondent’s products. The photographic shoots were time consuming, sometimes taking weeks; the event was known to disrupt the showroom’s tidiness and lift dust from the concrete floor.

In or around October 2018, the Applicant applied for the position of National Sales Manager, however, was unsuccessful.

On 27 November 2018, the Applicant submits she was unwell, and as a management meeting was scheduled for that morning, she informed the senior management team of her absence (Director, HR Manager and National Sales Manager) via email. At 10.28 am the Applicant received an email from the Director standing her down (Suspension Email).

The Suspension Email contained allegations against the Applicant which included:

  1. Upon a walkthrough of the Showroom by the National Sales Manager and the Co-Director, the Showroom was found to be dirty, unkempt with unmaintained furniture and a piece of furniture not unpacked
  2. That the Applicant did not keep an active roster that was reliable for staff and that casual staff were taking sick leave without providing medical certificates.
  3. A complaint from a client alleged that the Applicant handled his complaint in a poor manner.
  4. The Applicant complained to staff that the Manager from another location was stealing sales and on questioning why she had not escalated the situation, she responded that the Manager in question and the National Sales Manager were “ganging up on her” and “she was over it.”
  5. That she took a sick leave day even though she knew a new staff member was commencing that same day.

On 29 November 2018, the Applicant received a Letter of Termination citing termination effective immediately. The letter was signed off from the Administrator/HR Manager (herein referred to as the HR Manager). The termination letter states the Applicant is not eligible for any payment of notice. The Letter of Termination refers to the reasons for termination as:

  1. The Applicant was malicious and demonstrated ill-intent toward the National Sales Manager;
  2. The Applicant was unsupportive and since her suspension attempted to “damage the relationship between the National Sales Manager, the Managing Director and staff by spreading half-truths”;
  3. Despite being suspended and contrary to advice, the Applicant maintained contact with staff “spreading similar half-truths about her suspension” which was allegedly committed to develop unrest within the company and is considered serious breaches of the company’s anti-bullying and toxicity policies;
  4. That she was negligent in her duties resulting in the National Sales Manager handling her responsibilities and consequently attaining the highest gross sales level; and
  5. Since receiving a written warning in relation to attendance (which was also considered a serious breach of company policy), she has continued to demonstrate serious breaches of policy.

The Letter of Termination ends with a directive to return company property; she is reminded of the restraint of trade and confidentiality terms in her contract of employment. [ED: Do you letters contain this provision?]. The respondent also paid notice and provided a separation certificate.

Following the termination of the Applicant’s employment, the Respondent undertook a review of the Applicant’s work emails. Through that review the Respondent discovered that the Applicant had attended a job interview on 23 November 2018, for which the Applicant had submitted a medical certificate to support the taking of paid personal leave. The medical certificate was found to have been falsified by the Applicant.

The Applicant sought compensation, an apology, waiver of the restriction of trade clause in her contract of employment and conversion of her termination to a resignation.

The Commissioner heard evidence from seven witnesses over two days; with the applicant giving evidence on her own behalf. Witness statements were also relied upon.

In considering the evidence, the Commissioner noted:

  • While regulation 1.07 [summary dismissal] is not directly relevant to an unfair dismissal application, it remains that termination due to misconduct must be serious and relevant to whether the conduct is inconsistent with the continuation of the contract of employment.
  • Evidence of misconduct that comes to light after the termination of employment is relevant if the employer intends to rely on the facts, even if it had not relied on the facts at the time of the dismissal. If the employer intends to rely on the reason given to the Commission, “they will have to contend with the consequences of not giving the employee an opportunity to respond to such a reason” APS Group (Placements) Pty Ltd v O’Loughlin [2011] FWAFB 5230 at [51].
  • Punctuality and time off in lieu of overtime: There was lack of clarity over guidelines concerning overtime and time off in lieu. It was not disputed that the Applicant worked six to seven days per week, most weeks. Based on the evidence, the lack of clarity benefited the Respondent at the expense of the Applicant. The Commissioner therefore rejected this a a reason for dismissal.
  • Reports concerning the state of the showroom, her management of it, the alleged lack of motivation of her staff, and alleged comments from the Applicant to another staff member: The respondent used a “portal” where employee may make complaints against other employees anonymously. The Commission found that this part which was relied upon to dismiss the applicant as “…flimsy on the evidence” and the issue was considered by the Full Bench decision in RMIT v Asher:

The Full Bench in Osman described this obligation as requiring the employer to take reasonable steps to investigate the allegations and give the employee a fair chance of answering them. It adopted comments of Chief Justice Wilcox in Gibson v Bosmac Pty Limited, approved by Justice Northrop in Selvachandran, where Chief Justice Wilcox said:

“Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical common-sense way so as to ensure that the affected employee is treated fairly. Where the 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 the section.”

  • As such, the Commissioner found that the Applicant was denied a fair chance to respond to the allegations and consequently denied procedural fairness.

The Respondent relied on a report from the National Sales Manager to determine that the Applicant did not manage the site or her staff. By his own admission, the National Sales Manager had never seen a photoshoot when he formed the view that the state of the showroom was poor. The evidence demonstrated that unfair and unreasonable management expectations of the Applicant created a hostile and difficult environment for her.

“The evidence shows a lack of support or care for the Applicant as she was expected to comply with rules that did not apply equally to all, she was expected to work extensive and unreasonable hours. When she spoke up about sales being stolen, sought clarity over what is reasonable overtime and requested additional staffing resources, she was disregarded or victimised. The National Sales Manager with the authority of the Director implemented decisions directly impacting the Applicant’s management of her showroom, yet she was criticised and held responsible for matters beyond her control. The pressure placed on the Applicant was described by her as bullying. I am mindful to agree.” [My emphasis].

  • A customer complaint was not against the applicant, but the processes in the delivery of the product.
  • An alleged fraud:

“The alleged fraud asserted by the Respondent relates to the falsified medical certificate by the Applicant. While falsifying medical certificates cannot be condoned, the Respondent is relying on this to support a valid reason, even though the information came to their attention after the dismissal. The Applicant was not afforded an opportunity to reply, thus the expectation is that the Respondent will bear the burden to demonstrate the seriousness of the allegation to warrant a reason for immediate termination. The Respondent also submits that this incident is serious misconduct to find that the dismissal was fair, just and reasonable should I be inclined to disregard the other reasons for the termination of employment

“When she was presented with the opportunity to attend an interview to relieve herself from the environment where she felt bullied and victimised, she admits to producing a medical certificate to save her job.

“There was no financial gain for the Applicant by producing the medical certificate, she had already worked excessive overtime and knew the company would not pay the overtime, and time off in lieu was apparently only permitted with the approval of the Director.

“While the Applicant’s conduct in forging a medical certificate was intentional because she knew that if she did not have a medical certificate she could lose her job, under the circumstances and in the context in which the act was committed, I do not agree that it was wilful or inconsistent with her contract of employment nor serious enough to cause risk to the health or safety of a person or the reputation, viability or profitability of the business.

“Given the environment in which the Applicant found herself in, I am of the view that the falsification of the medical certificate in this case did not justify termination for misconduct”. [My emphasis].

The Commissioner concluded that:

“I am satisfied on the evidence before me that the Respondent did not justify termination with or without notice. While the falsification of the medical certificate cannot be condoned, the circumstances that led to the personal state of the Applicant can be understood that her desperation to save her job led to an act of foolishness. Her admission and regret over this act is acknowledged”. [My emphasis].

HR under attack (again)…

The Commissioner also commented that:

“…While the Respondent has a dedicated resource, it was obvious in evidence that the Human Resources Manager lacked the required skills for the position…”

Compensation ordered

In calculating the compensation, the Commissioner noted the following:

  • The applicant was employed for just over four years and her weekly rate of pay (excluding commissions) was $1,346 per week.
  • The applicant was into her fourth year of employment, she was in receipt of a salary of $70,000 per year plus commission.
  • She had found casual work.
  • The applicant was poorly treated by the respondent.
  • For the purposes of the calculation of remuneration the Applicant would have received had she not been dismissed would have been at least $70,000.
  • The Applicant was out of work for a period of nine weeks, therefore the potential remuneration over the 52 weeks is discounted by anticipated earnings over 52 weeks from the casual position to an amount of $31,390.
  • The final sum was also discounted by 30 percent due to the applicant’s admission to falsifying a medical certificate.

Therefore the applicant was awarded $21,973 (less taxation as required by law).