Industrial Relations Commission of New South Wales CITATION: Brien -V- Harrisons Timber and Hardware [2005] NSWIRComm 1001 APPLICANT Adam Matthew Brien PARTIES: RESPONDENT Harrisons Timber and Hardware FILE NUMBER(S): 6889 of 2003 CORAM: Cambridge C CATCHWORDS: Unfair dismissal - termination of employment - alleged poor work performance - absence of written reasons for dismissal - insufficient evidence to establish substantive basis for dismissal - absence of proper warning of unsatisfactory work performance - hasty and harsh method of implementation of dismissal - dismissal held as harsh, unreasonable and unjust - reinstatement or re-employment impractical - compensation Ordered LEGISLATION CITED: Industrial Relations Act 1996 Commissioner for Government Transport v Royall (1966) 116CLR 314. D & R Commercial v Flood (2002) Full Commission of Industrial Relations Commission of NSW [Wright P, Walton VP & Tabbaa C] 113IR 344. CASES CITED: Electricity Commission of New South Wales trading as Pacific Power v NIEASS and Others (1995) Full Commission of Industrial Relations Commission of NSW, [Fisher P Bauer J & Patterson CC], 81IR 46. Hurskin v Australian Jewish Press Pty Ltd (1996) Industrial Relations Court of Australia, [Millane JR], 69IR 123. Zhu v Reliable Mailing Services Pty Ltd (1998) Industrial Relations Commission of New South Wales, [McLeay C], IRC No. 4595 of 1998, Decision delivered 17 November 1998. HEARING DATES: 09/02/2004; 09/03/2004; 11/22/2004 DATE OF JUDGMENT: 01/25/2005 APPLICANT Mr P Bruckner of Counsel Solicitor for applicant: Mr K Solari LEGAL REPRESENTATIVES: RESPONDENT Ms J Webster and Ms J Williams from the Timber Trade Industrial Association DECISION: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 25 January 2005 Matter No IRC 6889 of 2003 Adam Matthew Brien -V- Harrisons Timber and Hardware Application by Adam Brien pursuant to section 84 of the Industrial Relations Act 1996 re alleged unfair dismissal. DECISION [2005] NSWIRComm 1001 1 This matter involves a claim for unfair dismissal. On 1 December 2003, Adam Matthew Brien, (the applicant), filed an application for Relief in relation to unfair dismissal. The application was made pursuant to section 84 of the Industrial Relations Act 1996 [NSW], (the Act), and named the respondent employer as Harrisons Timber and Hardware. The employer has subsequently been more accurately identified as Harrison's Timber Pty Limited trading as Harrison's Timber n' Hardware (the employer). 2 Following unsuccessful attempts at resolving the claim by way of conciliated settlement, the matter proceeded to Arbitration involving three days of Hearing, 2, 3 September, and 22 November 2004. BACKGROUND 3 The applicant is a male who was some 29 years of age at the time of his alleged unfair dismissal on 14 November 2003. The applicant had been employed for a period of approximately eighteen months. 4 The employer operates a trade and retail timber and general hardware supply business. The applicant was engaged in a sales position. The work of the applicant involved travelling to building and other development sites selling products such as timber frames and trusses, wooden flooring, bricks and general hardware items. 5 Initially the applicant was required to travel to various building sites in his own motor vehicle for which he was paid an allowance. In or about March of 2003, following various requests made by the applicant, the employer provided the applicant with a motor vehicle so that he was no longer required to use his private vehicle for business purposes and therefore he was no longer paid the relevant motor vehicle allowance. 6 The applicant as with other sales staff of the employer, was paid a bonus in addition to his salary. The bonus arrangements for sales staff involved payment of the bonus being made upon a salesperson reaching or exceeding a pre-determined gross sales figure within a particular monthly period. 7 During the middle of 2003, the employer implemented a series of sales staff meetings which were aimed at increasing the sales performance of the sales staff. These meetings initially involved all sales staff and the applicant was also involved in supplementary individual meetings with the Sales Manager, Mr Patrick Smith. On occasions the sales meetings would also include attendance by the employer's Managing Director, Mr John Harrison. 8 On 14 November 2003, the applicant attended an individual sales meeting that commenced with attendance by both Mr Smith and Mr Harrison. After a period of time, Mr Harrison left the meeting and the meeting continued with only the involvement of the applicant and Mr Smith. During this period of the meeting, Mr Smith informed the applicant that he was dismissed as he had not satisfied the sales performance requirements of the employer. 9 The employment of the applicant was finalised immediately upon the completion of the meeting between the applicant and Mr Smith on the afternoon of 14 November 2003. The applicant was required to remove personal belongings from the company provided motor vehicle before he left the employer's premises. 10 On or about 16 November 2003, Mr Smith attended at the applicant's home residence in order to retrieve what was asserted to be company property still in the possession of the applicant. Although the applicant did return some further items of clothing to Mr Smith, the applicant subsequently sought to recover some personal belongings which had apparently been inadvertently retained by the employer. 11 The applicant has asserted that his dismissal implemented on 14 November 2003, was unfair. The applicant has not sought reinstatement or re-employment but instead has asked the Commission to grant Orders for monetary compensation as remedy. THE EVIDENCE 12 The most notable feature of the evidence presented in this matter involved the unusual construction of the employer's primary evidentiary material. There were two "affidavits" filed on behalf of the employer, one from Mr Patrick Smith, and the other from Mr John Harrison. The construction of both these "affidavits" was unusual as they each contained numerous attachments which were not directly referenced from the text of the respective "affidavit". Although the Commission attempted to avoid technicality and legal form, the identification and verification of the various documents that were attached to the employer's "affidavits" became a difficult and time consuming task. Unfortunately much of the material presented by way of the attachments to the "affidavits" of the employer could not be properly verified. 13 Additionally there were various passages of the "affidavits" of Mr Smith and Mr Harrison which were identical or so similar that there could be considerable doubt cast upon the veracity of the material as deposed. 14 The applicant's evidentiary material was incomplete and although it did not possess the same unusual aspects that were contained in the employer's material, it did not provide a comprehensive or succinct evidentiary outline. 15 The applicant was the only witness called in support of the claim. The applicant attested to the veracity of two affidavits that he had sworn for these proceedings. The applicant presented as a polite and respectful witness. At times the applicant's testimony became a little confused and therefore a number of inconsistencies can be identified with the applicant's evidence. The nature of these inconsistencies tended to involve absence of detail or perhaps some embellishment of the applicant's testimony. Overall however, the inconsistencies in the applicant's testimony do not disturb the general veracity of the evidence that he provided. 16 The employer's two witnesses were Mr Patrick Smith, and Mr John Harrison. Regrettably, the unusual characteristics of the documentary material provided for the employer have not assisted in the adoption of any preference for the employer's evidence wherever that differed from the applicant's testimony. Although matters of factual contest would consequently be determined in favour of the applicant, these issues of fact were ultimately not crucial to the primary determination of the claim. 17 Although the evidence presented in this matter did give rise to various factual conflicts, those contests were not of such significance as to disturb the primary findings required. THE CASE FOR THE APPLICANT 18 Mr P Bruckner, barrister, appeared for the applicant at Hearing. Mr Bruckner commenced his submissions by challenging the alleged reasons for the dismissal of the applicant. Mr Bruckner stated that the evidence did not establish that the applicant's sales performance was sufficiently poor as to justify dismissal. Mr Bruckner submitted that the figures suggested that the applicant was the best performing employee in the period of the July, August, September quarter which was approximately one and a half months prior to the applicant's dismissal. 19 Mr Bruckner made further submissions which examined the sales target figures that had been set for the applicant and other sales staff. Mr Bruckner acknowledged that the applicant had achieved the sales targets approximately four times within the eighteen months period of his employment. However Mr Bruckner submitted that the sales targets were established for the purposes of performance monitoring and in no way represented a level of achievement that if it was not reached, would represent some basis for termination of employment. Consequently Mr Bruckner submitted that the employer could not rely upon the sales target data as establishing that the applicant was underperforming in respect of his salesperson role. 20 Mr Bruckner further submitted that although the applicant had been attending meetings, both collective sales meetings and individual meetings, these events did not represent proper warning about any concern regarding his work performance. Mr Bruckner submitted that there was no statement or comment made to the applicant that if he did not either reach his performance target figure, or undertake a fixed number of attempts to engage new customers, referred to as "cold calls", would his employment be in jeopardy. Mr Bruckner submitted that the applicant was not aware that either his sales target performance or his recorded number of "cold calls" would provide basis for his dismissal. Therefore Mr Bruckner submitted that the applicant had not been provided with any proper warning regarding the matters which were subsequently relied upon as basis for his dismissal. 21 Mr Bruckner made submissions which criticised the similarities that were identified in the "affidavits" of Mr Smith and Mr Harrison. Mr Bruckner suggested that the similarities between the two individuals' evidentiary material should render the material therein deposed to be highly implausible. 22 Mr Bruckner made further submissions which criticised the manner in which the applicant was dismissed. In particular Mr Bruckner made mention of what he described as the "horrible" way that the applicant was required to retrieve items from his company motor vehicle whilst being observed by other employees. Mr Bruckner submitted that it was an embarrassment for the applicant to be searching the vehicle in such a public manner. 23 In summary Mr Bruckner submitted that the alleged substantive basis for the applicant's dismissal could not be established, and that the absence of warnings denied the applicant procedural fairness. Therefore Mr Bruckner submitted that the applicant's dismissal was unfair, and that he should be provided with appropriate monetary compensation. THE CASE FOR THE EMPLOYER 24 Ms J Webster, solicitor, appeared for the employer, together with Ms J Williams, solicitor. Ms Webster submitted that this matter was fairly simple. Ms Webster said that the employer was not required to continue to employ any employee who did not fulfil their role as a salesperson. In addition Ms Webster stressed that the employer was not required to continue to employ someone who did not obey the legal and reasonable directions of the employer. 25 In respect to the requirement to have the applicant properly fulfil his salesperson role, Ms Webster stated that the applicant had only reached his sales target figures in four out of the eighteen months that he had been employed. Ms Webster said that this was sufficient evidence to establish that the applicant had not been properly fulfilling the role for which he had been employed. 26 Ms Webster also asserted that the applicant had consistently refused to obey the reasonable and lawful directions of the employer in respect to making at least twenty "cold calls" each week. Ms Webster drew the Commission's attention to evidence that the applicant had never made more than ten "cold calls" in any week. Therefore according to Ms Webster, the applicant had refused to obey the reasonable and lawful direction of the employer by not making at least twenty "cold calls" each week. In addition Ms Webster stated that the applicant had not constructed a plan or strategy as requested by the employer, and this represented a further aspect of disobedience that provided the substantive, justifiable basis for his dismissal. 27 Ms Webster made further submissions about inconsistencies that were identified in the testimony provided by the applicant. Ms Webster noted that the applicant had overstated the amount that he said that he had obtained as sales income for the employer from one particular customer. Also Ms Webster said that the applicant's evidence attempted to suggest that all of the sales staff were involved in the individual meetings with Mr Smith and which sometimes included Mr Harrison. The evidence established that at the time, the only person who was having individual weekly meetings was the applicant. Ms Webster submitted that this was not a small oversight, but an attempt by the applicant to bolster the credibility of his story and as such should be exposed for its fallacy. 28 Ms Webster also submitted that there was evidence that the applicant had been warned about the employer's concerns regarding his work performance. Ms Webster made mention of alleged comments made by the applicant at the time of his dismissal that suggested that he was aware that his employment was in jeopardy. 29 Ms Webster made further detailed submissions about the provisions of section 88 of the Act. In this respect Ms Webster said that the applicant was given a reason for his dismissal and that was his poor performance. In addition, the reason for the applicant's dismissal related to the applicant's refusal to obey the employer's lawful directions. Ms Webster submitted that the evidence established that the applicant was underperforming, and that he had not made the required number of "cold calls". Ms Webster further submitted that the fact that other sales staff may have failed to comply with the requested number of "cold calls" was irrelevant. Ms Webster submitted that there was a specific requirement upon the applicant to make the required number of "cold calls", and that such requirement was not necessarily placed upon other sales staff. Ms Webster said that the employer was entitled to specifically concentrate upon the applicant's sales performance and require him to make the specified number of "cold calls" even if it did not require such compliance from other staff. 30 Ms Webster made further submissions about the nature of the warnings to the applicant. Ms Webster submitted that there was no obligation upon the employer to provide the applicant with an official written warning. Ms Webster said that the Commission has consistently said that formal written warnings were not always required. In particular, according to the submissions of Ms Webster, where an employer did not have specialist human resource facilities, the absence of official, written warnings could not be relied upon as representing some procedural defect. 31 Ms Webster summarised her submissions by stating that the applicant had been given a fair go. Ms Webster said that the applicant had disobeyed the lawful and reasonable instructions of the employer, and had failed to meet the sales performance standards that the employer had required. Therefore according to Ms Webster, the Commission should not interfere with the employer's decision to dismiss the applicant. CONSIDERATION 32 The primary Determination required in this case has been straightforward. The absence of any written reasons for the applicant's dismissal is reflective of the generally erroneous approach adopted by the employer. 33 The alleged substantive basis for the applicant's dismissal cannot be properly established. In the absence of a letter of dismissal stating the reason or reasons for dismissal, the alleged substantive basis for the applicant's dismissal has tended to become something of a "moving feast". It appeared that the applicant was dismissed for a combination of poor sales performance, a failure to undertake the specified number of "cold calls", and because the performance improvement plan or strategy that he developed frustrated the employer. 34 The evidence presented could not establish that the applicant's sales performance was inadequate such as to justify his dismissal. The evidence established that the applicant had met the sales target figure on only four of the eighteen months of his employment. However, the evidence also showed that other sales staff were performing at similar or lesser levels of achievement of the target figures. Although it is conceivable that an employer might require particular performance targets to be met by one employee and not by others, in the absence of some compelling basis for such differentiation it would seem that such a requirement would be inherently unreasonable. 35 Similarly, in respect to the alleged disobedience regarding the required number of "cold calls" to be undertaken by sales staff, it would seem unreasonable to place a requirement to observe such a directive upon one employee and not another, in the absence of any logical explanation. The evidence in this instance demonstrated that only one employee on one occasion during the period of employment of the applicant, actually conducted the required number of "cold calls". Why then should the applicant as opposed to any of the other sales staff, be singled out as having failed to obey the directive of the employer? It would seem therefore that the employer would be unable to rely upon the alleged failure to comply with the directive regarding the number of "cold calls" as providing some substantive basis for dismissal. 36 The final component of the alleged substantive basis for dismissal involved the applicant's preparation of a plan or strategy to improve sales performance. The frustration that the employer experienced when the applicant's plan involved a suggestion to increase his "cold calling" would be understandable. However frustration on the part of the employer does not readily translate into proper substantive basis for dismissal. It would have been more appropriate in the circumstances as faced by the employer on the afternoon of 14 November 2003, to formalise some warning about required sales performance and the number of "cold calls". This was not done but instead the employer took the hasty step of immediately dismissing the applicant. 37 Consequently the alleged substantive basis for dismissal that the employer has attempted to rely upon cannot be established. In addition, the absence of proper procedure was resoundingly confirmed by the employer's own evidence. 38 The evidence provided by both Mr Smith, the employer's Sales Manager, and Mr Harrison, the Managing Director, acknowledged that the applicant had not been told that any aspect of his work performance or conduct was sufficiently inadequate such as to give rise to concerns regarding ongoing employment. The evidence from Mr Smith on this particularly important aspect of absence of warning can be summarised from the following extract from transcript: "Q. At no time during these weekly meetings did you tell Adam that he was not being successful did you? A. You asked me that question before. Q. Pardon? A. You asked me that question before. Q. You did not did you? A. No because we didn't put him down, we wanted to try and drive him to be successful." Transcript of proceedings (03/09/04) @ page 43. 39 Mr Harrison also provided evidence about the absence of warning to the applicant about his performance and the following extract of the testimony of Mr Harrison during cross examination is reflective of his testimony generally: "Q. Well, I am asking you that, sir, because I am putting to you that you did not say, and nor did Mr Patrick Smith during these meetings that his performance was poor and his job was on the line, did you? A. You mentioned motivation - - Q. Sir, it is a simple question. A. No, we never said it like that, no." Transcript of proceedings (22/11/04) @ page 29. 40 The employer sought to establish that the meetings that had been held with the applicant represented warning of unsatisfactory performance such as to satisfy section 88(c) of the Act. The evidence about the meetings held with the applicant did not represent any basis upon which to conclude that some warning regarding employment could be established. In many respects the employer's position sought to have the applicant infer that his employment may have been in jeopardy because of the meetings that were being held. However, curiously, the regularity of the meetings altered such that they occurred weekly during the month of September, and then there was one further meeting on 24 October, prior to the meeting at which the applicant was dismissed on 14 November 2003. Therefore even if it would have been reasonable to accept that the applicant should have inferred that the meetings represented basis to be warned about employment continuation it would similarly be reasonable for the applicant to infer that the concerns of the employer had at least to some extent, lessened as reflected by the decreasing frequency that the meetings were held during October and then November. 41 In any event, in the context of dismissal from employment, these matters should not be left to inference but should be the subject of unequivocal communication preferably in writing. 42 The method of implementation of the applicant's dismissal was also unnecessarily harsh. The decision to dismiss the applicant appeared to be one taken with great haste during the course of the meeting on the afternoon of 14 November. The employer was not properly prepared and this was revealed by the requirement for Mr Smith to attend at the applicant's home residence on the following Sunday in order to try to recover items of the employer's property in possession of the applicant. 43 There was unnecessary indignity associated with the requirement for the applicant to "clear out" the company motor vehicle in view of other employees. The method of implementation of the dismissal in this instance was one that would more often be observed in cases involving serious and wilful misconduct, rather than alleged poor work performance. 44 The unnecessarily hasty, undignified, and unreasonable procedure adopted by Mr Smith in dealing with the dismissal of the applicant on 14 November, was further demonstrated by the absence of any documentation providing reasons for the applicant's dismissal. The subsequent dispute regarding the employer retaining items of property of the applicant would not have arisen had there been a more careful and considered approach to the implementation of any dismissal. CONCLUSIONS 45 In this instance the applicant was dismissed because of alleged poor work performance. Regrettably because of the absence of any written reasons for the applicant's dismissal, and because of the unusual construction of the employer's evidentiary material, the basis for the applicant's dismissal has been difficult to identify with precision. Instead the employer appears to have dismissed because of poor work performance and also because of failure to comply with directions regarding a particular work requirement. 46 Having carefully considered the evidence, the Commission must conclude that there is insufficient basis upon which to establish the alleged substantive reasons for the applicant's dismissal. 47 Further the evidence established that there had been no warning to the applicant of unsatisfactory work performance given before his dismissal. In addition, the method of implementation of the dismissal of the applicant was unnecessarily hasty and harsh. 48 Consequently on both substantial and procedural grounds, the dismissal of the applicant was harsh, unreasonable and unjust. 49 The applicant has not sought reinstatement or re-employment as remedy for his unfair dismissal. In the alternative the applicant has sought monetary compensation and the Commission is prepared to provide for compensation as reinstatement or re-employment of the applicant would be impracticable. 50 The quantum of compensation has been determined having regard for sections 89(5) and 89(6) of the Act, and the Authority as established by the Full Bench in the Decision in the matter of D & R Commercial v. Flood. In this instance the amount of compensation has represented approximately sixteen weeks of the applicant's pre-dismissal remuneration. ORDERS In this matter, for the reasons outlined herein, I have Determined that the dismissal of the applicant was harsh, unreasonable and unjust and I hereby make the following Orders: 1. The Commission Orders that the employer pay to the applicant an amount of compensation of $12,900.00. This amount is a gross figure and appropriate taxation treatment is a matter for the Parties. 2. The amount of compensation specified in Order 1 above is to be paid by the employer to the applicant within twenty one days from the date of this Decision. oooOOOooo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.