s.394 - Unfair dismissal

Australian Capital Territory (Represented by Transport Canberra and City Services Directorate)

Application for an unfair dismissal remedy - dismissal was unfair - reinstatement awarded.

• [1] Mr Mohamed Shehata (Applicant) has made an application pursuant to s.394 of the Fair Work Act 2009 claiming that he was unfairly dismissed from his employment with the Australian Capital Territory (Respondent). He had been employed since November 2004 as a General Services Officer at the Transport Canberra and City Services Directorate's Tuggeranong bus depot (TCCS). His dismissal took effect on 12 August 2024 and was a result of a finding that he had misappropriated property found on a bus at the depot, namely a pink bag.

• [2] At the hearing, the Applicant was represented by Ms J Gordon of the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) and Ms B Gallifuoco of Counsel appeared with permission for the Respondent.

• [3] For the reasons set out below, I find that the Applicant's dismissal was unfair and have awarded the remedy of reinstatement.

• [4] The Applicant had worked for over 20 years as a Cleaner/Re-fueller at the Tuggeranong bus depot. There is no dispute that he had an unblemished employment record.

• [5] The alleged conduct for which the Applicant was dismissed was that at around 7:05pm on 23 June 2023 at the Tuggeranong Bus Depot, the Applicant misappropriated a bag and its contents that had been left on a bus.

• [6] The Applicant denied misappropriating the bag and says he placed it in a "low value lost property bin".

• [7] The issue arose following a report by another employee, Mr Herrero, who said that on Friday, 23 June 2023 at approximately 7:05pm, he walked from the administration building to the fuel bay to collect cans and bottles from the recycling bin. As he was doing this, he noticed a bus pull up in the fuel lane, and the Applicant exited the bus with a lady's pink handbag. He said he saw the Applicant run to the carpark. Mr Herrero said he continued to walk to his car and looked back towards the fuel lane twice but did not see the Applicant again. On 24 June 2023 when Mr Herrero arrived at work, he spoke with his supervisor, Mr McGregor, about the behaviour he said he had observed.

• [8] Mr McGregor made a note of the conversation and sent it to Mr Lange, the Director of the Tuggeranong Bus Depot.

• [9] Mr Lange located some of the CCTV footage but said it took some time because he did not have the bus identification number. He did not speak with the Applicant about the matter until 26 July 2023.

• [10] At that time, Mr Lange showed the Applicant a photo from the CCTV but not the CCTV footage itself. The photo showed the Applicant standing inside the front door of the bus holding a pink bag. He asked the Applicant about the bag, and the Applicant advised it was put into the low value lost property basket.

• [11] A search of the lost property database failed to find any record of a pink bag being recorded as lost. The bag was not subsequently located.

• [12] On 19 October 2023 the Respondent referred an allegation of misconduct to the ACT Public Sector Standards Commissioner for investigation by the Professional Standards Unit (PSU). The allegation, as set out earlier, was that the Applicant misappropriated the bag.

• [13] The Applicant was advised on 19 October 2023 that the allegation had been referred for investigation.

• [14] On 24 February 2024, the PSU concluded its investigation and provided an investigation report to the Respondent. The report found that there was sufficient evidence to conclude, on the balance of probabilities, that the Applicant misappropriated the bag and its contents.

• [15] As a part of the investigation, the PSU investigator had given the Applicant a letter on 9 January 2024 outlining the final allegations and the relevant information it had obtained and offered him an opportunity to respond.

• [16] On 11 January 2024 the CCTV footage was shown to the Applicant, his daughter and his AMWU representatives. The footage was shown again to the AMWU representatives on 4 February 2024.

• [17] On 14 February 2024, the Applicant provided a written response in which he denied misappropriating the bag and maintained he had placed it in the low value lost property bin.

• [18] The Applicant was given a "Notification of Preliminary Misconduct Decision" letter on 25 March 2024, which gave him a right of reply.

• [19] On 28 May 2024, the Applicant provided a response.

• [20] On 21 June 2024, the Applicant was given a letter titled "Notification of Misconduct Decision and Proposed Disciplinary Action".

• [21] On 30 July 2024, the Applicant provided a written response.

• [22] On 12 August 2024, the Applicant was provided with a written notice of termination.

• [23] In his evidence (and during the investigation process), the Applicant explained that on 23 June 2023, while undertaking an overtime shift, he drove a bus to the fuelling lane to clean and fuel it. He collected the bag, which had been left on the bus, as he exited the bus. At that time, he received a call from the hospital about his disabled son and began experiencing reflux symptoms. He said this was triggered by stress associated with his son. He said he went to his car which was parked adjacent to the fuel bay to get his reflux drink. He took the bag with him to the car, then returned via the lost property bin and put the bag in it.

• [24] The Applicant's submissions highlighted that while there might have been a more logical course of action to take, it should be borne in mind that the Applicant had commenced work at 5:00 am that day and the incident occurred at 7:05 pm. He had also just received a stressful call from the hospital about his son.

• [25] In addition to denying the allegation and maintaining he had placed the bag in the low value lost property bin, the Applicant gave evidence that he did not get along with Mr Herrero. He said they knew each other through previous employment. After Mr Herrero began working with the Respondent in 2010, he asked the Applicant to collect bottles from the recycling bins so Mr Herrero could get money for them. The Applicant refused to do so. He said Mr Herrero would regularly make the same request and his repeated refusals led to the deterioration of their relationship.

• [26] The Applicant said that in October 2021 he saw Mr Herrero in a shop and Mr Herrero pointed to him and said "be careful of those people because they steal". The Applicant took this to mean because of his Muslim background. The following workday, the Applicant made a complaint to his supervisor about what had occurred. A conversation was had between the Applicant, Mr Herrero and his supervisor, after which the Applicant said he and Mr Herrero rarely spoke to each other.

• [27] The Applicant's former manager, Mr R Smith, gave evidence on the Applicant's behalf. He had been the Applicant's supervisor for around 18 years until he retired in July 2024.

• [28] Relevantly, Mr Smith's evidence was that low value lost property was placed in a tray outside the office next to the fuelling lane, while valuable lost property was taken to the main office. The low value lost property would stay in the tray overnight and be cleared in the morning.

• [29] Mr Smith highlighted that there were CCTV cameras "everywhere" on site so no one would steal anything because it would be captured on CCTV. This included cameras that covered the lost property tray.

• [30] Mr Smith said that in the 18 years he supervised the Applicant, he did not have any issues with his conduct or performance, and the only time the Applicant took time off was due to his son who was badly disabled and sometimes hospitalised. He also gave evidence that the Applicant had handed in lost property "without fail". This included handing in $800 in cash, phones and wallets that he had found on buses. Mr Smith said he was shocked when he heard of the allegation of misconduct. He said it was highly unlikely that the Applicant had stolen anything given his history of handing in lost property and his record of employment over 20 years as a trusted employee with access to lost property on a daily basis.

• [31] The Respondent submitted that the Applicant's dismissal was proportionate to the finding that he had engaged in misconduct on 23 June 2023. It also submitted that the process was procedurally fair in that it undertook an investigation during which he was given an opportunity to respond.

• [32] The Respondent called evidence from Ms J Sturman, the Executive Group Manager at Transport Canberra, who outlined the events leading to the Applicant's dismissal and the investigation process. She was also the decision-maker and explained her reasons for the decision to dismiss the Applicant. Mr Lange also gave evidence as to his involvement in the investigation.

• [33] There is no dispute and I am satisfied that the Applicant is a person protected from unfair dismissal by virtue of s.382 of the Act.

• [34] A dismissal is unfair if the Commission is satisfied on the evidence before it that the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

A person has been unfairly dismissed if the FWC is satisfied that:

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

• [35] There is no dispute that the Applicant was dismissed and that subsection (c) and (d) do not apply. The question, therefore, is whether the dismissal was harsh, unjust or unreasonable.

Was the dismissal harsh, unjust or unreasonable?

• [36] The criteria the Commission must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

• [37] I am required to consider each of these criteria in reaching my conclusion[1], to the extent they are relevant to the factual circumstances of this case.

• [38] The ambit of the conduct which may fall within the phrase 'harsh, unjust or unreasonable' was explained in Byrne v Australian Airlines Ltd[2] as follows:

"... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted."

• [39] There must be a valid reason for the Applicant's dismissal, although it need not be the reason given to him at the time of the dismissal.[3] The reason(s) should be 'sound, defensible and well founded'[4] or justifiable on an objective analysis of the relevant facts, and should not be 'capricious, fanciful, spiteful or prejudiced'.[5]

• [40] In cases concerning conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred[6]. The test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct and therefore acted in the belief that the termination was for a valid reason. The Commission must make a finding as to whether the conduct occurred based on the evidence before it[7].

• [41] Further, the Commission does not 'stand in the shoes' of the employer but will need to be satisfied that the termination of the employee was for a valid reason[8].

• [42] There is no mandate for giving the 'valid reason' criterion any greater emphasis or weight than any of the other criteria in s 387. It is well settled that the statutory requirement to 'have regard to' or 'take into account' requires the Commission to give the matter(s) weight as a fundamental element in the decision-making process. Even if it is found that there was a valid reason for the dismissal, an overall assessment must be made as to whether the dismissal was harsh, unjust or unreasonable.

• [43] It is well settled that the employer bears the onus of establishing the misconduct upon which it relies to demonstrate a valid reason for the dismissal.

• [44] Having considered the evidence, I find that there was no valid reason for the Applicant's dismissal because I am not satisfied that it is more probable than not that the Applicant engaged in the conduct for which he was dismissed.

• [45] It was the CCTV footage that was primarily relied on by the Respondent to ground its decision to dismiss the Applicant.

• [46] Having viewed the CCTV footage relied on by the Respondent, I am not satisfied that it shows what the Respondent asserts. It is unclear and of poor quality, and as a result I cannot find that the Applicant either took the bag, or that he did not place it in the lost property bin as he asserts. The CCTV footage was certainly not "compelling", as asserted by the Respondent, and I am satisfied that it would amount to unsafe conjecture to make a finding that the Applicant misappropriated the bag based on the footage.

• [47] It is unfortunate that the CCTV footage from other cameras, which would likely have shown exactly what happened to the bag, was deleted and unrecoverable. I accept the Applicant's submissions that given Mr Herrero's report was made on 24 June 2023 (i.e. the following day), there was no excuse for the Respondent not to have saved all relevant CCTV footage before it was deleted. This is particularly so where the specific time of the incident was known to the Respondent at the time Mr Herrero made his report.

• [48] I accept the evidence of the Applicant's former manager, Mr Smith, that in his experience the Applicant had handed in lost property without fail.

• [49] I also accept that Mr Herrero (who was not called to give evidence) and the Applicant did not get along, and that the Applicant had made a complaint about him a few years earlier. Mr Herrero did not actually witness the Applicant misappropriating the bag, and his account ought to have been treated with some caution in the circumstances.

• [50] The site inspection undertaken as a part of the hearing of this application made it clear that the low value lost property basket was not secure. However, this is the Respondent's system for collecting low value lost property.

• [51] I do not accept that the Applicant gave inconsistent responses or versions of events during the investigation process. I consider that his limited English skills affected his ability to respond effectively, notwithstanding the assistance of his daughter who was interpreting for him. What is clear is that the Applicant consistently maintained throughout the investigation process and the hearing that he did not take the bag, and that he did place it into the low value lost property basket.

• [52] Having considered all the evidence, I find it more probable than not that the Applicant did what he said he did. In summary that is: he found the bag, was distressed by a phone call he then received about his son being in hospital, the stress of which triggered reflux symptoms, and he went to his nearby car with the bag to get his reflux drink. He then returned and placed the bag in the lost property tray.

• [53] The Respondent has not discharged its onus of establishing the misconduct upon which it relied on to dismiss the Applicant. As a result, I am not satisfied that there was a valid reason for the dismissal.

Notification of the valid reason and opportunity to respond - s.387(b) and (c)

• [54] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,[9] in explicit terms[10] and in plain and clear terms.[11] In Crozier v Palazzo Corporation Pty Ltd[12] a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:

"[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their 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."[13]

• [55] An employee protected from unfair dismissal must also be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. Such requirement will be satisfied 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.[14] 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]

• [56] The requirement to notify of the reason, together with the requirement to provide an opportunity to respond to the reason, involves consideration of whether procedural fairness was afforded to the Applicant before his dismissal was effected.

• [57] On the evidence before me, I am satisfied that the Applicant was notified of the reason for his dismissal. There seems to be no dispute that notification of the reason was given.

• [58] Further, I am satisfied he was given an opportunity to respond to the reason. While the Applicant contended the process was unfair because of his limited comprehension of English, the Applicant had the benefit of his daughter to translate documents for him.

Unreasonable refusal by the employer to allow a support person - s.387(d)

• [59] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.

• [60] There is no dispute that the Applicant was provided with the opportunity to have a support person.

Warnings regarding unsatisfactory performance - s.387(e)

• [61] The Applicant was not dismissed for unsatisfactory performance and so this factor is a neutral consideration.

Impact of the size of the Respondent on procedures followed (s.387(f)), and the absence of dedicated human resources management specialist/expertise on procedures followed (s.387(g))

• [62] I am satisfied that the size of the Respondent and its dedicated human resource expertise did not impact on the procedures followed by it in effecting the dismissal.

Other relevant matters - s.387(h)

• [63] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

• [64] The Applicant submitted that there are other relevant matters for consideration. He said the Commission should have regard to:

1. His 20 years of unblemished service;
2. The Respondent's delay in investigating the allegation, which meant that the majority of the CCTV footage which would have provided clear pictures of the lost property area were deleted; and
3. His age and the difficulty in finding alternative employment.

• [65] I have taken these matters into account, however it is the lack of a valid reason that is the primary basis for the finding below as to unfairness.

• [66] Having considered each of the matters specified in s.387 of the Act and for the reasons set out above, I am satisfied that the dismissal was harsh, unjust and unreasonable. As a result, I find that the Applicant was unfairly dismissed.

• [67] I now turn to the appropriate remedy.

• [68] Having found that the Applicant as protected from unfair dismissal, and that his dismissal was unfair, it is necessary to consider what, if any, remedy should be granted to him. He seeks the remedy of reinstatement.

• [69] I am satisfied that it is appropriate to reinstate the Applicant to his former position given it is the primary remedy for unfair dismissal. There is no evidentiary basis for a conclusion that reinstatement is impracticable.

• [70] Section 391(2) of the Act provides that, if the Commission makes an order for reinstatement and considers it appropriate to do so, the Commission may also make any order that the Commission considers appropriate to maintain the following:

1. the continuity of the Applicant's employment;
2. the period of the Applicant's continuous service with the employer or, if applicable, the associated entity.

• [71] In all the circumstances, I consider it appropriate to make an order to maintain the Applicant's continuity of employment and period of continuous service with the Respondent. There is no reason not to do so.

• [72] Section 391(3) of the Act provides that, if the Commission makes an order for reinstatement and considers it appropriate to do so, the Commission may also make any order that the Commission considers appropriate to cause the employer to pay to the Applicant an amount for the remuneration lost, or likely to have been lost, by the Applicant because of the dismissal.

• [73] Section 391(4) of the Act provides that, in determining an amount for the purposes of such an order, the Commission must take into account:

1. the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
2. the amount of any remuneration reasonably likely to be so earned by the Applicant during the period between the making of the order for reinstatement and the actual reinstatement.

• [74] An order to restore lost pay does not necessarily follow an order for reinstatement. The Commission may only make an order if it considers it appropriate to do so and only make an order that the Commission considers appropriate.[16] Where an employee has engaged in misconduct, the Commission may refuse to make any order to restore lost pay.[17]

• [75] I am satisfied that the Applicant has lost wages since his dismissal however it is not clear on the evidence the quantum of such loss.

• [76] I consider that I should make an order causing the Respondent to pay lost remuneration to the Applicant from the date of the dismissal until his reinstatement takes effect, less any remuneration earned during that period and less any payment in lieu of notice made to the Applicant at the time of his dismissal.

• [77] Given the lack of evidence about this, the parties are directed to confer as to the quantum of lost remuneration less any remuneration earned. If there is a dispute about this amount, the parties have liberty to apply within 14 days from the date of this decision.

• [78] Orders providing for reinstatement with continuity of employment and lost remuneration will be issued separately.

B Gallifuoco of Counsel for Australian Capital Territory (Represented by Transport Canberra and City Services Directorate).

[1] Sayer v Melsteel [2011] FWAFB 7498.

[2] (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.

[3] Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

[4] Selvachandran v Peterson Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371, 373.

[6] Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561.

[7] King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].

[8] Miller v University of New South Wales [2003] FCAFC 180; (2003) 132 FCR 147

[9] Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].

[10] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

[11] Previsic v Australian Quarantine Inspection Services Print Q3730.

[12] (2000) 98 IR 137.

[14] Gibson v Bosmac Pty Ltd [1995] IRCA 222; (1995) 60 IR 1, 7.

[15] RMIT v Asher [2010] FWAFB 1200; (2010) 194 IR 1, 14-15.

[16] Aurora Energy Pty Ltd v Davison PR902108 (AIRCFB, Watson SDP, Williams SDP, Holmes C, 8 March 2001), [25].

[17] See, eg, Regional Express Holdings Ltd v Richards [2010] FWAFB 8753, [29].

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