Fair Work Act 2009_

s.394 - Application for unfair dismissal remedy

Mackay CC Pty Ltd T/A Trend Interiors Carpet Court

Application for unfair dismissal remedy - Jurisdiction - Small Business Fair Dismissal Code.

[1] The following decision, now edited, was issued in a hearing on 26 June 2014. At that time I indicated that this Decision and an Order to give effect to it would be issued in due course.

[2] This Decision concerns an application by Mr Mark Coughlan for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) in respect of his dismissal by Mackay CC Pty Ltd t/a Trend Interiors Carpet Court (Carpet Court). Carpet Court asserts that Mr Coughlan's dismissal was consistent with the Small Business Fair Dismissal Code. Mr Coughlan was summarily dismissed on the grounds that Carpet Court believed that he engaged in theft.

[3] In order to succeed with the argument that the dismissal was consistent with the Small Business Fair Dismissal Code, Carpet Court must establish that it believed on reasonable grounds that Mr Coughlan's conduct was sufficiently serious to justify immediate dismissal and serious misconduct included in the code or covered by the code involves theft, fraud, violence, and other serious breaches of occupational health and safety procedures.

[4] In this case, the allegation is theft. Theft is a serious allegation and it can have catastrophic consequences for a person against whom such an allegation is made, particularly in relation to obtaining other employment. Such an allegation requires clear and cogent proof before it can be accepted that there is a reasonable ground for an employer to believe that an applicant had engaged in theft.

[5] I have carefully considered all of the material that the parties have put before me, notwithstanding the fact that Carpet Court has put some statements before me where the person who made the statement has either unfortunately deceased or is not available to give evidence.

[6] I have also considered the statements that Mr Coughlan has provided and the fact that Carpet Court has not cross-examined Mr Coughlan's witnesses. As a result I have no option but to accept the contents of those statements on that basis. I have taken into account all of Carpet Court's material, even some of it which is not properly admissible because either the deponent is not available or because the person who made the statement has unfortunately passed away since making the statement. After considering all of those statements, I have reached the conclusion that Carpet Court has not established that it had reasonable grounds to believe that Mr Coughlan's conduct was sufficiently serious to justify immediate dismissal. Carpet Court asserts that Mr Coughlan stole money and product.

[7] I do not accept that Carpet Court has established that it had reasonable grounds for believing that Mr Coughlan had engaged in theft. Even if I accept the truth of all of the statements that Carpet Court has tendered, they do not establish to the sufficient degree that Mr Coughlan was either responsible for the missing money, or engaged in conduct in relation to tiles and carpet remnants he is alleged to have taken. I have also taken into account, although it is not an essential factor, that the police were not informed of the alleged theft until after Mr Coughlan had filed his unfair dismissal application.

[8] As I have concluded that the dismissal was not consistent with the Small Business Fair Dismissal Code, I am required to turn to s.387 of the Fair Work Act 2009 to consider whether the dismissal was otherwise unfair on the grounds that it was harsh, unjust, or unreasonable. Considering each of the criteria in s.387, firstly I am required to consider whether there was a valid reason for the dismissal related to Mr Coughlan's capacity or conduct, including its effect on the safety and welfare of other employees. Having considered the evidence before me, I do accept that there were issues in relation to Mr Coughlan's dealings with other employees and with the respondent's product that would have given Mr Jack legitimate cause for concern.

[9] Although I do not accept that those matters constituted theft, I have taken into account that there was inconsistent information provided by Mr Coughlan in relation to the weekend installation of hard wood flooring and in that regard I accept Mr Winkler's evidence. I can see no reason why Mr Winkler would falsify his evidence, and it certainly was not put to him that he did. There is also no explanation as to why Mr Coughlan simply didn't tell Mr Winkler that the flooring had been installed as he says it was. I also accept that there was some issue associated with the sale of product which indicates that perhaps Mr Coughlan was not following proper processes and procedures in relation to product leaving the store.

[10] Accordingly, I am satisfied that these matters were a valid reason for his dismissal. In relation to whether Mr Coughlan was notified of the reason, I do not accept that Mr Coughlan was properly informed about the matters alleged against him. In particular, I am of the view that there was insufficient detail about what amounted to very serious allegations. Even at this hearing, there was insufficient detail when the respondent has had some time to prepare its case.

[11] There is evidence that the statements that various witnesses had made were not provided to Mr Coughlan when the matters were initially put to him in the meeting which led to his dismissal. There was inconsistency in the evidence of witnesses for Carpet Court about whether there were one or two petty cash slips. The petty cash slip that was in issue was not provided to Mr Coughlan at the meeting which led to his dismissal. In this regard I note that there is uncontested evidence from a witness that Mr Coughlan provided a statement in relation to that matter, that indicates that that slip was not shown to him.

[12] In relation to s.387(c) of the Act, which requires me to consider whether Mr Coughlan was given an opportunity to respond to the allegations against him, I am unable to accept that this occurred because of the lack of detail in relation to the allegations. There is evidence in relation to s.387(d) that Mr Coughlan was offered a support person and such a person was present. That person has provided a statement which I have taken into account.

[13] In relation to unsatisfactory performance, I am required to consider whether Mr Coughlan had been previously warned about his conduct. I am satisfied that he was warned previously about his conduct in relation to his dealings with other employees and with a Director of the company and there is evidence in relation to his conduct at a Christmas party.

[14] That evidence suggests that there were issues in the employment relationship and there was a warning that had been provided to Mr Coughlan. I have taken into account that Carpet Court is a small business and, in my view, this has impacted on the procedures that it followed in effecting the dismissal, in particular the failings with respect to the allegations being put to Mr Coughlan. Similarly, Carpet Court does not have dedicated human resource management expertise that it could rely on and I have taken into account the impact that this would likely have had on the manner in which this dismissal was affected.

[15] In relation to other matters that I consider relevant, I have taken into account that Mr Coughlan was not paid notice on termination and on any view of it, he had relatively lengthy period of service, leaving aside whether it was 16 and a half years, or two years. He was accused of theft when those allegations were not substantiated and to this day have not been substantiated. I have also considered the fact that he was in a senior position. He was a manager on a salary of $90,000 per annum. He had a company vehicle and use of a mobile telephone. On that basis, there should have been more consideration given to the manner in which the investigation and the dismissal was carried out.

[16] On balance I am satisfied taking all the relevant criteria into account that Mr Coughlan was unfairly dismissed and that he should have a remedy with respect to his unfair dismissal. Turning to the question of remedy as provided in s.391 of the Act, I am satisfied that reinstatement is not a practicable outcome given the reasons for the dismissal and the attitudes and views of both parties as expressed in this hearing.

[17] I have determined that Mr Coughlan should receive compensation for his unfair dismissal and I have considered the matters that I am required to consider in s.392(2) of the Act.

[18] Those provisions require me to consider the effect of the order on the viability of Carpet Court's enterprise and there is no evidence about that matter and there is no basis other than I could find that Carpet Court's enterprise is viable. There is no evidence it is in financial difficulty and it employs a number of staff, it operates in Mackay. Carpet Court has other business interests which may or may not be related, and there is no evidence upon which I could reasonably be satisfied that any order I might make would affect Carpet Court's viability. As I have already stated, Mr Coughlan has had a not insubstantial period of service, being two years with the company in Mackay and other service that may or may not be with related companies.

[19] Mr Coughlan has had a period of service that at very least is of some two years' duration and perhaps longer, depending on the relationships between the entities that he previously worked for. In any event, he has had a long relationship with Mr Jack in various capacities of some 16 and a half years.

[20] Having considered all the evidence, I am required to decide what remuneration that Mr Coughlan would likely have received had he remained in employment. In my view, it is unlikely that Mr Coughlan would have remained in employment for any considerable length of time, and given that he obtained other employment in six to eight weeks, I have made the assumption that he would have remained in employment for a period of at least a further six weeks.

[21] There is no evidence about Mr Coughlan's attempts to mitigate his loss, or how many jobs he applied for, but there is evidence that he had some difficulty because of the allegation of theft and I can accept that that is more than likely the case. There is no detailed evidence about what remuneration Mr Coughlan has earned for the period since his dismissal, however there is evidence that for eight of the 12 month period following his dismissal that he has been employed by other employers. There is also evidence that he took some breaks, some of them may have been not his option and others may have been at his option. He also lost subsequent employment, but that does not appear to have any relationship to the fact of his dismissal by the respondent in this case.

[22] I have also taken into account a number of other matters including that Mr Coughlan was a manager; he was on a not insignificant salary which included a car and a mobile phone; he did not have any payment in lieu of notice made to him; and he was summarily dismissed on the basis that he was alleged to have been involved in theft in circumstances where that allegation has not been substantiated.

[23] Accordingly, I have determined that I will award Mr Coughlan an amount of compensation of six week's wages. My calculation is that that is an amount of $10,384.00. That amount, to be taxed as required by law, is to be paid to the Applicant within fourteen days of the date of this Decision. An Order to this effect will issue with this Decision.

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