Ms Michelle King Prouds Jewellers Pty Ltd. [2016] FWC 1369 (U2015/14118). Hunt, C. 27 April 2016.

 

This is a most interesting case as it explores a number of issues, including:

 

  • An employee’s obligation to bring any observations of breach of company policy to the attention of management.
  • Serious misconduct, not necessarily being a valid reason for dismissal.
  • The infallibility of written records of interview not being of great concern.
  • The length of service and age of the employee.

 

Ms King commenced employment with Prouds on 10 March 2008 as a part-time Sales Assistant. During 2013, Ms King acted as an Assistant Store Manager and then acting Store Manager. From August 2014, Ms King was permanently employed as an Assistant Store Manager at various Prouds and Angus & Coote stores.

 

Prouds summarily dismissed Ms King for serious misconduct. Despite the summary dismissal, Prouds elected to pay her four weeks in lieu of notice.

 

Allegations that led to Ms King’s dismissal were:

 

  • Created layby’s without the customer being in the store;
  • Created layby’s without a deposit;
  • Layby payments made for product without the customer being in store;
  • Alleged bullying of a team member;
  • Staff discounts provided to a friend;
  • Processed a ‘special order’ and then cancelled the ‘special order’;
  • Awareness of ‘numerous fraudulent layby’s conducted by Tracey to gain sales and achieve store budget’;
  • Writing up her own repairs; and
  • A small number of additional allegations not pursued by Prouds.

 

Ms King’s argued that her actions were minor administrative errors, and not serious enough to warrant termination of her employment; and had an unblemished work history until the decision was made to terminate her employment for serious misconduct.

 

 

 

The Commissioner found:

 

  • Ms King was not prepared for the meeting of 23 October 2015.
  • Ms King did not give enough importance to the suspension letter and letter of allegations of 22 October 2015.
  • Handwritten notes taken at the meeting would not contain every word answered by Ms King, there may have been additional words used by Ms King. Even if those words were said by Ms King, and not recorded, they do not alter, in my view to any significant degree, the misconduct engaged in by Ms King.
  • Ms King has admitted that she knew what she was doing was wrong. If Ms King obtained a staff price. It does not matter that each pen refill, of which there were four, were nominal in value.
  • It was Ms King’s responsibility to her employer to protest her previous manager’s policy breaches to the manager. If the protest fell on deaf ears, Ms King’s responsibility was to report the incident to a higher level of management. Instead, Ms King signed her name against the staff discount register, therefore knowingly completing a false business record.

 

The Commissioner also considered Ms King’s period of service and her age:

 

“In Sexton v Pacific National (ACT) Pty Ltd, Vice President Lawler noted:

 

‘Relevantly advanced age and long service can render harsh a termination that would not be harsh in the case of identical conduct by a younger person with relatively short service. Nevertheless, age and length of service simply remain a factor to be taken to account in considering whether the termination was harsh, unjust or unreasonable and in applying the principle of a “fair go all round’.”

 

“Ms King’s employment with Prouds was in excess of 7 years, and she had an earlier unblemished record. These are clearly relevant and significant matters in the consideration of whether the dismissal was harsh, unjust or unreasonable”.

 

The commissioner also made some interesting observations relating to the reference to “serious misconduct” referencing a full bench decision in O’Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205 (18 December 2015, which in turn referenced Rankin v Marine Power International Pty Ltd Gillard J stated that:

 

“There is no rule of law that defines the degree of misconduct which would justify dismissal without notice” and identified the touchstone as being whether the conduct was of such a grave nature as to be repugnant to the employment relationship.

 

“…wilful or deliberate conduct inconsistent with the continuation of the employment contract, serious and imminent risk to health and safety or the viability of the business, theft, fraud, or assault, intoxication at work and refusal to carry out a lawful and reasonable instruction may [be grounds] that there is a valid reason for dismissal,

 

“It must also be acknowledged that the application of the exemption) from the requirement to provide the NES entitlement to notice [and redundancy payment]”.

 

The point being that the Commissioner found that there was no nexus between “serious misconduct” and a “valid reason” for dismissal.

 

The Commissioner concluded:

 

  • If the reason for Ms King’s dismissal had been a single company policy breach, made inadvertently, I would have been inclined to the view that the dismissal was harsh. However, I have found that Ms King knowingly breached company policy [on a number of occasions] and that
  • Ms King had opportunity to address these issues with senior management and failed to do so.
  • Notwithstanding Ms King’s length of service, her previous unblemished work history, and the consequences of her dismissal, that Prouds was entitled to conclude that there was no basis for confidence that Ms King would comply with Prouds’ company policies in future if her employment continued. For that reason, Ms King’s dismissal cannot fairly be characterised as a disproportionate response to her conduct.
  • The decision by Prouds to pay to Ms King four week’s payment when the termination was viewed by Prouds as constituting serious misconduct, assists with reducing some of the understandable financial concerns that Ms King would have had on termination.

 

 

 

Commentary

 

Prouds was successful in defending this case because it:

 

  • Had policies in place which were known to the employees and properly applied.
  • Conducted an investigation following due process.
  • Was found to be generous when providing (what amounted to an “ex-gratia”) payment of four weeks, which may have offset – to a small degree – the “length of service argument”.

Greg Reiffel Industrial Relations & Human Resources Consulting has been providing the following services to businesses for over 30 years:

 

  • General HR and IR advisory service.
  • Fair Work Commission representation (eg unfair dismissals, adverse actions, etc.).
  • Workplace investigations and mediations.
  • Policies and procedures.
  • Discipline & Termination.
  • People Audits (are you at risk of prosecution?).
  • Enterprise Agreements, Contracts of Employment, Individual Flexibility Agreements.
  • On-site HR services.

Contact Greg on 0438 906 050 or mailto: greg@gregreiffelconsulting.com.au.