Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Application for relief from unfair dismissal - allegation of unsatisfactory work performance - dismissal was not unfair.

[1] Mr Robert Etienne (Mr Etienne) has made an application (Application) pursuant to section 394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy in respect of his dismissal by FMG Personnel Services Pty Ltd (FMG).

[2] At the time of his dismissal, Mr Etienne was employed as an Inventory Controller in FMG's Inventory Management Team which is a part of the FMG Procurement Group.

[3] On 9 September 2016, FMG lodged a Form F3 Employer Response to the Application noting it had no jurisdictional objections to the Application.

[4] The parties participated in conciliation facilitated by a staff conciliator on 28 September 2016, and by myself on 17 October 2016. The matter could not be resolved and was therefore listed for hearing on Wednesday, 7 December 2017 and Thursday, 8 December 2016 (Hearing). Taking into account the parties circumstances, and their wishes, it was determined that a hearing would be the most effective and efficient way to determine the matter.

[5] Directions were issued on 18 October 2016 to ensure the efficient conduct of the Hearing (Directions). Those Directions required Mr Etienne and FMG to file and serve an outline of submissions, copies of authorities on which they proposed to rely at hearing, witness statements of any witnesses they proposed to call, and copies of any documents on which they sought to rely as evidence on or before close of business, 16 November and 23 November 2016, respectively.

[6] At the Hearing, Mr Etienne gave evidence in support of his Application. FMG Inventory Superintendent Mr Justin Cogger (Mr Cogger), FMG Inventory Planner Mr Noel Kenny (Mr Kenny), FMG Group Manager of Procurement Mr Steve Fewster (Mr Fewster) and HR Advisor Mr Sam Cox (Mr Cox), gave evidence on behalf of FMG.

[7] FMG filed an undated and unsigned witness statement for FMG Supply Superintendent Mr Brian Kurthi (Mr Kurthi). Mr Kurthi was unavailable to swear to the accuracy of his statement or give oral evidence at the Hearing. Given his evidence was unsworn and untested, his witness statement was not admitted into evidence.[1]

[8] On 16 November and 17 November 2016, respectively, FMG and Mr Etienne sought permission to be represented at the Hearing. FMG sought to be represented by K&L Gates at the Hearing, who subsequently engaged Ms Heather Miller of Counsel. Mr Etienne sought leave to be represented by Mr Steve Heathcote of APX Law Pty Ltd.

[9] Section 596 of the Fair Work Act 2009 (Cth) (FW Act) provides as follows:

"596 Representation by lawyers and paid agents

(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

[10] Cambridge C in Karkamakar v Australian Campus Network Pty Ltd [2013] FWC 2340 made the following comments about section 596 of the FW Act:

"[9] These provisions represent a more stringent requirement for the granting of permission than existed under the predecessor provisions of the Workplace Relations Act 1996. There have been a number of Decisions of the Commission which have recognised the legislative intention to broadly restrict and limit the basis upon which permission would be granted for legal (and paid agent) representation in proceedings before the Commission as compared with the Australian Industrial Relations Commission. In this respect I refer in particular, to the Decision of Harrison C in Rodney James Rogers v Hunter Valley Earthmoving Company Pty Ltd [2009] FWA 572, and the Decision of Lewin C in Chris Lekos v Zoological Parks and Gardens Board [2011] FWA 1520.

[10] Further, the legislative intention underpinning s.596 of the Act has been the subject of Judicial Review in the (incorrectly named) Judgment of Warrell v Walton (Warrell) and I refer in particular to paragraph 25 of that Judgment.

[11] Upon examination of subsection 596 (2) there appears to be three, and only three, criteria which separately or in combination, provide basis upon which the Commission can grant permission for a lawyer or paid agent to represent a party in proceedings such as the Hearing of a claim for unfair dismissal. The three criteria which can be identified in paragraphs (a), (b) and (c) of subsection 596 (2), can be paraphrased as: (a) complexity/efficiency; (b) inability; and (c) fairness."

[11] The Directions provided the parties with an opportunity to object to the other party being represented by 23 November 2016. Taking into account the submissions of both parties and in the absence of any objections from either party opposing representation for the other party, leave to appear was granted to both parties pursuant to section 596(2)(a) and (c) of the FW Act.

[12] Mr Etienne commenced employment with FMG on 30 September 2014 as a Port Hedland based Inventory Controller.[2] He successfully completed his probationary period and his employment was confirmed as permanent effective on 30 December 2014.[3]

[13] In May 2015, a business decision was made to transfer all Inventory Controllers to Perth.[4]

[14] On 23 June 2014, Mr Etienne was transferred to FMG's Perth Inventory Management Team. At that time, the Perth Inventory Management Team consisted of an Inventory Superintendent (Mr Cogger), an Inventory Planner (Mr Kenny), an Inventory Specialist, a Disposals Specialist and five Inventory Controllers.[5] The Inventory Management team sits within the wider Procurement Group. Mr Cogger reports to the Group Manager of the Procurement group, Mr Fewster.[6]

[15] As an Inventory Controller, Mr Etienne reported to Mr Cogger.[7] During the last six months of Mr Etienne's employment, Mr Kenny was the Acting Supervisor for the Inventory Management Team while Mr Cogger was on secondment to another project. Mr Kenny was responsible for managing the on-going concerns with Mr Etienne's performance during the period leading up to the termination of Mr Etienne's employment.[8]

[16] In his role, Mr Etienne was required to co-ordinate and manage inventory at the Linfox Distribution Centre and manage the Perth Inventory Box. The Perth Inventory Box is a shared inbox for any inventory related enquiries relating to the Perth distribution centre. Mr Etienne was required to monitor that inbox and action emails from both internal and external personnel. Mr Etienne's role involved him regularly communicating with internal and external stakeholders and, in particular, the Linfox Supervisor and Operations Manager of the Linfox Distribution Centre.

[17] Mr Cogger and Mr Kenny both say that when Mr Etienne joined the Perth Inventory Management Team in June 2015, Mr Etienne received training on the job from them both to ensure that Mr Etienne was familiar with all of the processes and transactions that Mr Etienne was required to perform in his role, as well as the organisational policies and procedures which were relevant to his role.[9]

[18] In early July 2015, Mr Cogger met with Mr Etienne to discuss Mr Etienne's KPIs as an Inventory Controller. Mr Cogger says that he gave Mr Etienne the following specific tasks to complete over a 12 month period (by the end of the 2015/16 financial year).[10]

1. Prepare a stock count plan for the Linfox Distribution Centre.

2. Clean up inventory in the Linfox Distribution Centre.

[19] Preparation of a stock count plan for the Linfox Distribution Centre entailed liaising with Linfox staff, creating stock count sheets to provide to Linfox so that the stock could be counted, reconciling stock count sheets against stock in the distribution centre, and investigating any stock which couldn't be accounted for.[11]

[20] Cleaning up inventory at the Linfox Distribution Centre entailed Mr Etienne identifying stock that was not physically present at the Linfox Distribution Centre so that a decision could be made to authorise write-offs of stock that could not be accounted for or for further investigation be carried out.[12]

[21] FMG say that it became clear to Mr Kenny and Mr Cogger in or around September 2015 that Mr Etienne lacked the necessary skills, capabilities and knowledge to adequately perform his role and that his manner and attitude to customers and internal personnel was unsatisfactory. In particular that:[13]

1. Mr Etienne could not grasp the concepts and transactions central to his role.

2. Mr Etienne did not comply with business processes.

3. Mr Etienne was unable to prioritise his duties appropriately.

4. Mr Etienne was incapable of building and maintaining effective working relationships.

Alleged Performance Deficiencies - Lack of ability to grasp concepts and transactions

[22] Mr Cogger says he was particularly concerned about Mr Etienne's ability to understand transactions and processes which are central to the role of Inventory Controller. For example, Mr Cogger says that he noticed that Mr Etienne repeatedly failed to understand and comply with the process for rotables.[14]

[23] A rotable is a component or inventory item that can be repeatedly and economically restored to a fully serviceable condition: for example, a motor, gearbox or pulley. When FMG purchases a new rotable (e.g. a new motor), the rotable is categorised in the SAP system as C1 (new) and the rotable will sit in the warehouse on Site. If maintenance have a job on site and they need a new motor, the new motor sitting in the warehouse will be provided to maintenance and the old motor will be sent back to the Linfox Distribution Centre, where a decision will be made about which vendor should repair the old motor. When the old motor is sent to the vendor for repair, a record needs to be made in the SAP System that the item is being issued to the vendor for repair. If that step is missed, when the repaired item is returned to the Linfox Distribution Centre by the vendor, the system can't receipt it and payment of the vendor is not triggered. It also means that, if a job is waiting for the old motor to come back, the job may have to be deferred which can have a financial implication for FMG.

[24] According to Mr Cogger, Mr Etienne was continually failing to enter the transaction into the SAP system. When repaired item was returned to the Linfox Distribution Centre, the system would produce an error message saying that the item couldn't be receipted. Mr Cogger says Mr Etienne could not understand why the error message was coming up because he failed to grasp that he had missed a step in the process.[15]

[25] Mr Cogger says that the rotable process for sizer shaft rebuilds was another particular area of concern. This process requires sizer shaft spares to be added into the transaction process on the SAP system so that the true cost of repair is known and receipted. Sizer rebuilds happen every eight or so weeks. According to Mr Cogger, on numerous occasions Mr Etienne did not add sizer spares into the order on the SAP system. This meant that sizer shaft rebuilds were being undervalued and there were large stock discrepancies. That also led to budgets not being calculated correctly, and accounts payable having to reverse payments when anomalies were rectified. Each sizer rebuild, including spares, costs approximately $400,000.00.[16]

[26] Mr Cogger says that he and Mr Kenny explained the rotable process to Mr Etienne in detail. According to Mr Cogger, when it became clear after a few months that Mr Etienne was still not grasping the process, Mr Kenny held a one-on-one training session with Mr Etienne to further explain the process in detail.

Alleged Performance Deficiencies - Incapable of building and maintaining working relationships

[27] Mr Cogger says that, within a few months of Mr Etienne commencing in Perth, he began to receive complaints about Mr Etienne from both Linfox and FMG employees. According to Mr Cogger, both the Linfox Operations Manager and the Warehouse Supervisor complained to him that Mr Etienne had no idea what he was doing and constantly demanded that they complete work which was Mr Etienne's responsibility.[17] Mr Cogger says that these complaints were corroborated by Mr Kirthi, a FMG employee based at the Linfox Distribution Centre in the role of Supply Superintendent. Mr Kirthi allegedly told Mr Cogger that he had witnessed this behaviour, and had unsuccessfully endeavoured to get Mr Etienne to amend his ways.[18]

[28] Mr Cogger says that, on 10 September 2015, the Linfox Warehouse Supervisor told him that she had participated in a heated phone discussion with Mr Etienne which ended with Mr Etienne hanging up the phone on her while she was trying to explain something to him.[19]

[29] According to Mr Kenny, both internal personnel and external clients consciously avoided dealing with Mr Etienne by approaching others, including Mr Kenny, to perform tasks that should have been performed by Mr Etienne.[20]

[30] Mr Etienne denies experiencing any difficulty in his relationships with colleagues or clients. However, Mr Etienne's curtness, excessive formality and unnecessary complexity in email exchanges tended by FMG is consistent with the evidence of Mr Cogger and Mr Kenny and with FMG's assertion that Mr Etienne had difficulty in conducting effective working relationships with others.[21]

Alleged Performance Deficiencies - Inability to prioritise duties appropriately

[31] All Inventory Controllers were required, at the start of the 2015/2016 financial year, to create a stock count plan. This plan is intended to outline the individual materials in FMG's plant that require counting, and to provide a schedule for these counts. According to Mr Kenny, all Inventory Controllers are provided with the procedure to create this plan, and a template to populate which calculates a schedule for them. The task has to be done as a matter of priority at the start of the financial year to allow the counts to progress continuously throughout the year. Mr Kenny says that Mr Etienne did not complete this plan at all in the 2015/2016 financial year despite repeated requests by Linfox warehouse staff during weekly meetings.

[32] Mr Etienne asserts that there was no template for BPM6, and that he did in fact complete the plan and send it to Mr Kenny.[22] The minutes from the Linfox operations meetings attached to Mr Kenny's statement at NK2 indicate that the plan remained uncompleted at least until 5 November 2015, and was the subject of regular action requests.[23] Mr Etienne asserts that this was because the draft plan he had prepared was awaiting approval by Mr Kenny.[24] Mr Etienne did not tender the plan. There is no indication in the meeting minutes that Mr Etienne informed Linfox that the plan was prepared and awaiting FMG approval. Under cross examination, Mr Etienne did not point to anything which might evidence the existence of the draft plan.[25]

[33] Mr Kenny also gives Mr Etienne's handling of purchase order alterations as an example of Mr Etienne's inability to prioritise duties appropriately. Emails tendered by Mr Kenny indicate delays in Mr Etienne dealing with these matters. Mr Etienne asserts that the delays were not caused by him, but were a function of the large number of outstanding legacy items.[26]

[34] Mr Kenny also gives Mr Etienne's handling of the BPM6 clean-up as an example of Mr Etienne's inability to prioritise duties appropriately. The clean-up was one of the tasks specifically listed on Mr Etienne's performance objectives for the 2015/2016 financial year. Mr Etienne was tasked with ensuring there was no live inventory in BPM6 by 30 June 2016.[27]

[35] Mr Etienne claimed he was unable to complete the task on time because of sensitivity with respect to writing off stock.[28] However, Mr Kenny says that he spent many hours with Mr Etienne explaining to him how he was required to investigate inventory that could not be accounted for, correct what could be corrected in SAP, and identify what could not be corrected so approval could be attained from Mr Fewster for the write-off process. Mr Kenny says that Mr Etienne always wanted someone else to do the investigation and determine what to do, because he did not understand how to do it and didn't feel confident doing the work, despite having been extensively trained.[29]

Alleged Performance Deficiencies - Failure to comply with process

[36] All Inventory Controllers were tasked at the beginning of the 2015/2016 financial year with completing a 100% count of materials in their plants by 30 June 2016. Mr Etienne commenced in the Perth team on 23 June 2015 and his plant was the Linfox Distribution Centre. The Centre was comprised of the main operational plant and the legacy plant.[30]

[37] There are approximately 400 lines of stock in the main operational plant of the Linfox Distribution Centre, and approximately 900 lines of stock in the legacy plant. Mr Cogger says that stock count and reconciliation of the Linfox Distribution Centre over a 12 month period was an achievable target for Mr Etienne, particularly when compared to stock count reconciliations for the mine sites for which other Inventory Controllers in Mr Etienne's team were responsible (there are approximately 22,000 lines of stock at Cloudbreak and approximately 13,000 lines of stock at Christmas Creek).[31]

[38] Both Mr Cogger and Mr Kenny say that, from July 2015 onwards, they stressed to Mr Etienne on multiple occasions the importance of completing the stock count and reconciliation by 30 June 2016. They say Mr Etienne told them that he was on track to meet the target. However, Mr Etienne ultimately managed to count only 141 lines of stock out of a total of 1,361 lines. Therefore, the actual result achieved by Mr Etienne was 10.4% of stock counted. Other sites which are managed by other Inventory Controllers in the team achieved 99% plus of stock counted.[32]

[39] In response, Mr Etienne asserted that, while there was a low number of lines in his stock count, there was a high number of discrepancies dating back many years which slowed his progress as compared to his colleagues. He says that he raised concerns about the volume of work he was required to perform and says that he, in fact, counted in excess of 1,100 lines of stock.[33] However, under cross examination, when asked whether he asked for more help or told Mr Cogger or Mr Kenny that he could not manage his work, Mr Etienne said: 'I don't think I ever said that.'[34] Mr Etienne also claimed to have completed more lines than asserted by FMG. Mr Etienne was unable to explain the evidence in NK1 which corroborated FMG's assertion that he had completed less than 11% of the stock count.[35] In his witness statement, Mr Etienne also asserted that he was only given the task in June 2016. Under cross examination, he conceded that he had, in fact, been given the task nearly 11 months earlier.[36]

[40] In September 2015, Mr Cogger rearranged seating within the Inventory Team so that Mr Etienne could sit next to Mr Kenny to enable Mr Kenny to provide Mr Etienne with coaching on a daily basis to improve Mr Etienne's work performance. Mr Kenny says that, from September 2015 onwards, he worked closely with Mr Etienne to assist him in relation to all aspects of his work. Mr Kenny says that he delivered performance management informally over a period of 10 months.[37]

[41] Mr Kenny says that, during these informal performance coaching sessions, Mr Etienne merely nodded his head and did not ask questions or seek clarification. Mr Kenny says that he devoted a significant amount of time and effort into providing additional training and support to Mr Etienne at the expense of other Inventory Controllers. Mr Kenny says that he found this particularly challenging from February 2016 when Mr Kruger went on secondment and he became acting supervisor of the inventory team in Mr Kruger's absence.[38]

[42] Mr Etienne denied that he had been the subject of any formal or informal performance management or coaching. However, under cross examination, he did not deny that Mr Kenny had spent more time coaching him than any other individuals performing the same role, and did not identify any person that received same or similar attention from Mr Kenny.[39]

[43] Mr Kenny says that, despite steps he took to manage Mr Etienne's performance, Mr Etienne did not show any improvement in his work performance.[40] Mr Kenny's evidence of continued concerns about Mr Etienne's performance is consistent with contemporaneous emails tendered by FMG.[41]

[44] According to Mr Kenny, Mr Etienne became increasingly sensitive to constructive criticism, and Mr Etienne told Mr Kenny that he felt he was being singled out because of the one-on-one training sessions. In an attempt to continue performance managing Mr Etienne without him feeling singled out, Mr Kenny decided to take the whole Inventory Team offsite for training, even though the training was targeted specifically at Mr Etienne. Mr Kenny says that this was expensive and did not achieve the desired improvement in Mr Etienne's performance.[42]

[45] The group training session related to rotables. Mr Kenny identified the management of rotables as an example of a process that he says Mr Etienne was extensively trained in, and performance managed, but continued to perform inadequately.[43]

[46] Mr Kenny gave evidence that all members of the inventory team attended the training presentation which explained the rotables process in detail. According to Mr Kenny, following the training presentation everyone on the team demonstrated an understanding of what was required of them in the roles except for Mr Etienne, who struggled to complete transactions and standard processes. Mr Kenny says that, in light of Mr Etienne's difficulty in understanding the process, he ran an individual training session with Mr Etienne to guide him through the process again in its entirety. In addition, Mr Kenny says that he suggested to Mr Etienne that he write the procedure out in his own words so that it would be easy for him to follow. According to Mr Kenny, even after Mr Etienne had written out the procedure himself and told him that he understood it, he continued to make the same mistakes in entering transactions in the system. Mr Kenny says that, by mid-2016, Mr Etienne was still asking very basic questions about the rotables process which demonstrated that he still did not understand how the system worked.[44]

[47] Mr Etienne acknowledges that the training occurred. However, he claims that he never had any difficulty in completing rotables transactions, was never counselled about performing the task incorrectly, and was never asked to write out the process.[45]

[48] Mr Cogger says that, on 3 November 2015, the Linfox Warehouse Supervisor contacted him to tell him that she had participated in another heated phone discussion with Mr Etienne which also ended with Mr Etienne hanging the phone up on her. According to Mr Cogger, she informed him that she refused to deal directly with Mr Etienne in the future and that arrangements had been made for her supervisor to take over all communications with Mr Etienne moving forward.[46] Mr Etienne denies ever having any heated discussion with any Linfox employee.[47] Mr Cogger conceded, under cross examination, that he did not raise this particular incident with Mr Etienne and instead accepted the Linfox Supervisor's version of events. Mr Cogger asserts that he did raise the earlier incident with the Linfox staff with Mr Etienne.[48]

[49] Even after the Linfox Operations Manager had taken over communications with Mr Etienne, the working relationship did not improve. On 11 and 14 December 2015, Mr Cogger was copied into email correspondence between Mr Etienne and the Linfox Operations Manager in which Linfox raised concerns about the accuracy of information provided by Mr Etienne. Mr Cogger says his inquiries revealed that Mr Etienne had tried to 'handball' the tasks to Linfox rather than properly discharging his duties. At the hearing, Mr Etienne asserted that the inaccuracy of the information occurred because he was physically remote from the item in question. However, I am not satisfied that it was unreasonable for FMG to expect him to provide a more accurate estimation and, in any event, his response was unnecessary curt and formed a pattern of conduct which could be harmful to the relationship between Linfox and FMG.[49]

[50] In mid-November 2015, Mr Cogger says he approached Mr Mark Lumsden, the Warehouse and Logistics Manager for FMG (Mr Lumsden), to whom he was reporting at the time. Mr Cogger says he told Mr Lumsden that Mr Kenny and he had been taking steps to manage Mr Etienne's performance but were not seeing any improvement. Mr Cogger says that Mr Lumsden suggested that it would be appropriate to put Mr Etienne on a written performance improvement plan (PIP).[50]

[51] On 25 November 2015, a week or so following Mr Cogger's discussion with Mr Lumsden about the written PIP, Mr Etienne was involved in incident at the Linfox Distribution Centre during which he injured his back when FMG say he performed a task contrary to the instructions of Mr Kenny. In accordance with their standard procedures, Linfox conducted an investigation into the incident and temporarily removed Mr Etienne's site access. Mr Cogger says that Mr Etienne did not respond well to this, and complained to him that he was being harassed and victimised. Mr Etienne subsequently escalated his complaint of alleged harassment to Mr Lumsden.

[52] As a consequence of Mr Etienne's injury and his response to the measures taken by Linfox, Mr Cogger decided that it was not appropriate at that time to put Mr Etienne on a formal written PIP as he did not want the PIP to be construed as being a response to Mr Etienne's injury or his complaint about Linfox. Mr Cogger agreed with Mr Lumsden that they would hold off preparing a written PIP until the beginning of 2016. According to FMG, Mr Lumsden did not give evidence because he has since resigned from FMG.

[53] In February 2016, Mr Fewster was appointed Group Manager of Procurement and Mr Cogger began reporting to him. Mr Fewster advised Mr Cogger that Mr Cogger would be transferred to another project until the end of June 2016. Mr Cogger informed Mr Fewster of the concerns that he and Mr Kenny held in relation to Mr Etienne's performance and the steps they had been taking to manage his performance. Mr Cogger says he explained to Mr Fewster that Mr Etienne required sensitive management. Mr Fewster decided that, given Mr Etienne's past negative reactions and Mr Cogger's upcoming secondment, it was preferable for Mr Kenny to performance manage Mr Etienne's performance on a one-on-one basis as he had been doing until Mr Cogger returned from his secondment. It was agreed that, if upon Mr Cogger's return, Mr Etienne was still underperforming then FMG would consider putting Mr Etienne on a written PIP at that point. According to FMG, this was intended to provide Mr Etienne with a fair opportunity to demonstrate he was able to meet the 12 month targets which had been set in July 2015.[51]

[54] On 11 May 2016, Mr Kenny says he became aware that Mr Etienne made another mistake in relation to a size shaft rebuild transaction. Mr Kenny says he subsequently spoke to Mr Cogger about what could be done to address his concerns about Mr Etienne's on-going performance issues given that he felt his efforts to performance manage Mr Etienne to date had not produced any improvement. Mr Cogger suggested that they discuss the matter with Mr Fewster. [52]

[55] In or around May 2016, Mr Cogger and Mr Kenny met with Mr Fewster to discuss Mr Etienne. At the meeting with Mr Fewster, Mr Kenny explained steps he had taken to assist Mr Etienne to improve his performance and explained that, despite having spent more time coaching Mr Etienne than the rest of the team put together, he had not been able to improve Mr Etienne's performance deficiencies. Mr Kenny told Mr Fewster that he believed they had done everything they could to improve Mr Etienne's performance and he was satisfied that Mr Etienne simply did not have the appropriate skill set for the role of Inventory Controller. As a consequence, Mr Fewster directed that Mr Etienne be placed on a PIP.[53]

[56] FMG HR Advisor, Mr Cox, prepared the PIP for Mr Etienne with assistance and input from Mr Cogger and Mr Kenny. Mr Cox says that he worked with Mr Cogger and Mr Kenny to ensure the PIP was relevant to the areas of concern with Mr Etienne's unsatisfactory performance and to ensure the PIP was achievable.[54]

[57] On 27 July 2016, Mr Cox, Mr Cogger and Mr Kenny met with Mr Etienne to discuss the PIP. The evidence of Mr Cox, Mr Cogger and Mr Kenny is that Mr Kenny and Mr Cogger explained in detail the on-going concerns about Mr Etienne's performance and the steps which had been taken to try to improve Mr Etienne's performance. They also say that they explained to Mr Etienne what was required of him in order for him to meet the expected areas of performance or conduct outlined in the PIP. Mr Cox explained to Mr Etienne how the PIP process worked.[55]

[58] During the PIP meeting, Mr Etienne did not say much other than to challenge the inclusion of the BPM6 clean-up task in the PIP and the timeframe for completing the task. Mr Etienne argued that he did not have authority to make the required adjustments to the inventory records and therefore could not complete the BPM6 task within the required timeframe. Mr Cogger told Mr Etienne that it was never part of his role to approve write-offs and that he believed the timeframe was appropriate since Mr Etienne had been given the task 12 months prior and, at that time, Mr Cogger had explained to Mr Etienne what he needed to do and when he needed to complete it. Mr Cox informed Mr Etienne that he would amend the PIP to make it clear that Mr Etienne was not responsible for authorising write-offs.[56]

[59] Mr Cox, Mr Kenny and Mr Cogger say that Mr Etienne nodded throughout the PIP meeting. Mr Cox says that he took this to mean that Mr Etienne understood the concerns FMG held in relation to Mr Etienne's performance and the key issues identified in the PIP. Later the same day, Mr Cox forwarded a copy of the amended PIP to Mr Etienne.[57]

[60] Mr Etienne acknowledges that the expected areas of performance were discussed with him and says that, apart from the modification to the BPM6 task, he was confident that he could, and would, meet the expectations within the timetable provided. Mr Etienne adamantly denies that any short comings in his performance were discussed with him at that meeting or prior to the meeting.[58]

[61] The day after the PIP meeting, Mr Etienne sent an email to Mr Cox, copied to Mr Fewster, which stated inter alia:[59]

"I was very surprised for this meeting to actually be relating to a PIP as I've never been issued with any performance plans in my career. "I fail to understand why a PIP has been raised.

In the PIP report it states "Your behaviour is always relevant when evaluating performance. A PIP can be commenced when your behave is contrary to our Fortescue Values or Code of Conduct"... I vigorously disagree! I have worked extra hours to ensure the efficiencies are met, incurred a workplace injury under instruction by my Line Manager to meet a deadline etc ... I live by FMG's Vision and Values being Family, Empowerment, Enthusiasm, Frugility, Integrity, Generating Ideas, Determination and set yourself stretch targets. I take umbrage that this paragraph is present as I'm a loyal and professional employee.

As an employee I believe I have done all that is expected."

[62] Mr Cox was puzzled by the email because, he asserts, that only a day earlier Mr Etienne appeared to indicate in the PIP meeting that he acknowledged and understood FMG's concerns about his performance.[60]

[63] Mr Fewster says the email caused him serious concern because it appeared to him that, despite nearly a year of performance management, Mr Etienne failed to acknowledge either any short comings in his performance or the resources which had been committed by the organisation to assist him in the performance of his duties and the improvement of his skills.[61]

[64] Mr Fewster sought the advice of the FMG People and Employee Relations Manager and decided to meet with Mr Etienne to discuss with him Mr Etienne's response to the PIP and to give Mr Etienne the opportunity to convince Mr Fewster that further performance management would have any prospect of success.[62]

[65] On 3 August 2016 Mr Fewster and Mr Cox met with Mr Etienne to discuss Mr Etienne's email, Mr Etienne's response to the PIP and Mr Etienne's on-going employment. Mr Cox and Mr Fewster say that this meeting lasted 30 minutes and at this meeting Mr Fewster expressed to Mr Etienne his concerns that[63]:

1. Mr Etienne lacked self awareness in relation to his work performance and the efforts taken to by the organisation improve his work performance.

2. Mr Etienne appeared unwilling to participate in and cooperate with the PIP.

3. There existed overwhelming evidence of Mr Etienne's inability to carry out the standard processes and tasks in which he had been extensively trained.

4. Mr Etienne's behaviour and manner towards customers, his supervisors and other key stakeholders did not align with FMG's values and code of conduct.

5. Mr Etienne appeared unable to adapt to the flexible and dynamic environment in which FMG operated.

[66] Mr Fewster invited Mr Etienne to respond. Mr Cox says that Mr Etienne offered no response. Mr Fewster says that as Mr Etienne did not say anything to convince him that the employment relationship was workable he decided that continuing Mr Etienne's employment was no longer viable. Mr Etienne was informed that his employment would be terminated effective that day and that he would be paid out his annual leave and all other entitlements. Mr Fewster offered Mr Etienne the opportunity to have his employment separation recorded as a resignation rather than a dismissal. Mr Etienne was given a deed of settlement and release setting out the terms on which FMG was prepared to convert his dismissal to a resignation and advised him that he had until Friday 5 August 2016 to decide whether he wanted to take up this offer.[64]

[67] Mr Cox says he advised Mr Etienne of the existence of an employee assistance program and chaplaincy services and provided him with the relevant contact details. He then collected Mr Etienne's security pass and computer from him and escorted him from the premises.

[68] Mr Etienne says that the meeting with Mr Fewster and Mr Cox lasted only 10-15 minutes and that Mr Fewster handed him a sealed envelope and said words to the effect that:[65]

1. There seems to be a disconnect between Mr Etienne and FMG when it comes to position descriptions.

2. FMG does not 'do' position descriptions.

3. Mr Etienne should not return to work for the next few days.

4. Mr Etienne should get legal advice in relation to the document in the envelope and that Mr Etienne should hand back his access pass and collect his personal property before leaving the premises.

[69] Mr Etienne denies that he was told that his employment had been terminated.[66]

[70] On Monday 8 August 2016, Mr Etienne presented at the reception area of his former workplace. Mr Cox says Mr Etienne informed him that he'd been told by his lawyer to attend at work and inform FMG that he did not accept the deed of settlement and release. Ms Beaumont met with Mr Etienne and confirmed that his employment was terminated on 3 August 2016 and again offered him access to employee assistance program.[67]

[71] Mr Etienne maintains that he was unfairly dismissed and seeks an order that he be reinstated and compensated the lost remuneration between the date of his dismissal and his reinstatement.

[72] Section 396 of the FW Act requires that the FWC to decide four preliminary issues before considering the merits of an application for unfair dismissal.

"396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy."

[73] I am satisfied that the Application was made within the twenty one day period required by subsection 394(2) of the FW Act. I am also satisfied that the Small Business Fair Dismissal Code which applies to employers of fewer than fifteen employees does not apply to Mr Etienne's dismissal. There is no assertion that Mr Etienne's dismissal involved redundancy.

[74] Section 382 sets out the circumstances that must exist for Mr Etienne to be protected from unfair dismissal:

"382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold."

[75] There is no dispute, and I am satisfied, that Mr Etienne had completed the minimum employment period and that his annual rate of earnings was less than the high income threshold. Consequently, I am satisfied Mr Etienne was protected from unfair dismissal.

[76] Section 385 of the FW Act sets out the circumstances in which a dismissal will be considered unfair:

A person has been unfairly dismissed if the the Commission 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."

[77] It was not contested, and I am satisfied, that Mr Etienne was dismissed for the purposes of section 385(a) of the FW Act and that his dismissal was not a case of genuine redundancy, nor subject to the Small Business Fair Dismissal Code.

Was Mr Etienne's dismissal harsh, unjust or unreasonable?

[78] Having been satisfied of each of s.385(a),(c)-(d) of the FW Act, it is necessary to determine whether the dismissal was harsh, unjust or unreasonable. The criteria to be taken into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the FW Act:

"387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the the Commission 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 Commission considers relevant."

[79] The ambit of the conduct which may fall within the phrase 'harsh, unjust or unreasonable' was explained in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ 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."

[80] To determine whether Mr Etienne's dismissal was, in the circumstances, harsh, unjust or unreasonable, it is necessary to consider each of the criteria set out in section 387 of the FW Act.

Did FMG have a valid reason for dismissing Mr Etienne (s.387(a))

[81] An employer must have a valid reason for the dismissal of an employee protected from unfair dismissal, although it need not be the reason given to the employee at the time of the dismissal.[68] The reasons should be 'sound, defensible and well founded'[69] and should not be 'capricious, fanciful, spiteful or prejudiced.'[70] The reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. The requirement to be reasonable must be applied in a practical common sense way to ensure that the employer and employee are each treated fairly.[71]

[82] FMG dismissed Mr Etienne because FMG believed that Mr Etienne was incapable of perceiving or achieving an acceptable level of work performance.

[83] A pattern emerged in the evidence of a complete divergence between Mr Etienne's perception and recollection of events, and those of the FMG witnesses. For example, Mr Etienne is adamant that he was not informed that his employment was terminated at the meeting held on 3 August 2016.[72] Mr Fewster and Mr Cox are resolute that Mr Etienne was clearly informed that his employment was terminated effective that day. FMG's version of events is corroborated by the uncontested evidence that Mr Cox offered Mr Etienne access to the EAP, removed his security pass and company property, and escorted him from the work premises following the meeting. Mr Etienne seeks to rely on the evidence that he returned to the workplace several days later to corroborate his version of events. Given that Mr Etienne did not return to the workplace on the next business day, did so only on the advice of his lawyer, and that his return was clearly a surprise to FMG, the fact of his return is not sufficient to discredit the FMG version of events.[73]

[84] Based on the consistency of the evidence of the three FMG witnesses and the contemporaneous evidence which was tendered, I am satisfied that FMG had genuine and reasonable concerns about Mr Etienne's capabilities to properly perform his duties and to perceive (and consequently address) any deficiencies in his work performance.

[85] Mr Etienne acknowledges that Mr Cogger and Mr Kenny had a number of exchanges with him in relation to his work performance. Mr Etienne characterises these exchanges as ordinary workplace conversations, whereas FMG characterise the conversations as training and coaching for the purposes of performance management.[74] I am satisfied that these exchanges were intended to be, and are properly characterised as, informal performance management.

[86] Much was made by Mr Etienne's representative of the lack of formal warnings or file notes.

[87] FMG consciously chose an informal method of performance management because FMG believed that it was likely to be the most effective method of improving Mr Etienne's performance.[75] The evidence revealed that FMG delayed the implementation of formal documented performance management to avoid any risk of Mr Etienne's injury being seen to taint the performance management process and to give Mr Etienne further opportunity to improve his performance.

[88] While useful from an evidentiary perspective, performance management need not occur in a formal documented manner in order for an employer to rely on it as the basis for the termination of an employee's employment on the grounds of poor performance.

[89] The informal performance management of Mr Etienne extended over a period of nearly a year. Having fully exhausted that process, FMG eventually, in frustration, commenced a formal documented performance improvement process. It is clear from Mr Etienne's correspondence following the PIP meeting that he was oblivious to both the deficiencies in his performance and FMG's efforts to correct those deficiencies. This remained the case even at the Hearing.

[90] A pattern of discrepancy between Mr Etienne's perception and recollection of events and those of others present, evidenced at the Hearing, is consistent with the FMG witnesses' explanation as to why performance management of Mr Etienne had not been successful and why FMG believed it was unlikely to be successful, whether formalised or not.

[91] I am satisfied that, over a period of nearly a year, FMG sought to clearly communicate to Mr Etienne what their performance expectations were and that FMG diligently endeavoured to assist Mr Etienne to achieve these expectations. I am also satisfied that there were reasonable grounds for FMG determining that further informal or formal performance management would be unlikely to be successful. Consequently I find that there were valid reasons for Mr Etienne's dismissal.

Was Mr Etienne notified of the reason for his dismissal? (s.387(b)); Was Mr Etienne given warnings regarding his unsatisfactory performance? ( s.387(e))

[92] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,[76] in explicit terms,[77] and in plain and clear terms.[78] In Crozier v Palazzo Corporation Pty Ltd[79] a Full Bench of the Australian Industrial Relations Commission, dealing with a similar provision of the Workplace Relations Act 1996 (Cth), stated that:

"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."[80]

[93] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employer about the unsatisfactory performance before the dismissal.

[94] For many months, FMG had unsuccessfully endeavoured to make clear to Mr Etienne its performance expectations and assist him to meet their performance expectations. Even to the date of the Hearing, Mr Etienne has consciously and continually refused to acknowledge any deficiencies in his work performance. This includes denying that any performance deficiencies were raised with him at the PIP meeting or the subsequent termination meeting with Mr Fewster.

[95] It is difficult to conceive that, as Mr Etienne asserts, after nearly a year of informal performance management and documented exchanges between management staff about performance concerns, FMG would hold a formal performance management meeting with Mr Etienne which included a Human Resource staff member and not mention any performance deficiencies. Similarly, it is difficult to conceive that, as Mr Etienne asserts, following an unsuccessful formal performance management meeting, Mr Fewster would have held a further meeting with a Human Resource staff member and not mention either FMG's concerns about Mr Etienne's performance or his attitude to the performance improvement process.

[96] Based on the consistency of the evidence of the FMG witnesses, the evidentiary material filed, and in all the circumstances, I am satisfied that in the course of extended informal performance management, the PIP meeting and the termination meeting with Mr Fewster that FMG endeavoured to make Mr Etienne aware of FMG's concerns in relation to his work performance, the reasons why his employment was a risk and, subsequently, the reasons why it proposed to terminate his employment.

[97] Contrary to what was asserted by Mr Etienne, I am satisfied that the fact that FMG offered Mr Etienne the opportunity post termination via a deed of settlement to have his separation recorded as a resignation goes only to their genuine desire throughout his employment to achieve the best possible outcome for him and is not evidence that he had not been notified of the reason for his proposed dismissal.

[98] I find that FMG endeavoured to make Mr Etienne aware that his work performance was considered unsatisfactory before his dismissal such that he had an opportunity to improve his work performance and avoid being dismissed. Having not taken advantage of the coaching and training he was provided with, I am satisfied that FMG notified Mr Etienne of the reasons why FMG proposed to terminate his employment such that he was in a position to respond to those reasons.

Was Mr Etienne given an opportunity to respond? (s.387(c))

[99] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. 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.[81]

[100] In the course of the extended performance management, the PIP meeting and the termination meeting with Mr Fewster, Mr Etienne was given an opportunity to respond to the reasons which motivated his employer to ultimately terminate his employment.

[101] The evidence was that, with the exception of the write-offs related to the BMP6 clean-up and his email of 27 July 2016, Mr Etienne took limited advantage of these opportunities, presumably because he did not perceive that the criticisms were valid.

[102] I therefore find that Mr Etienne was given an opportunity to respond to the reasons for his dismissal.

Was Mr Etienne unreasonably refused a support person? (s.387(d))

[103] 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. There is no positive obligation on an employer to offer an employee the opportunity to have a support person.[82]

[104] It is conceded that FMG did not refuse to allow Mr Etienne to bring a support person with him to the meeting with Mr Fewster. However, Mr Etienne's representative submitted that the manner in which the meetings were arranged ambushed Mr Etienne and prevented him from being aware that he should bring a support person with him.

[105] FMG submit that Mr Etienne was given prior notice of the meeting with Mr Fewster and therefore had the opportunity to request a support person and did not do so.

[106] I am satisfied that Mr Etienne had the opportunity to request a support person and chose not to do so. I therefore find that FMG did not unreasonably refuse to allow Mr Etienne to have a support person present at discussions relating to the dismissal.

What is the impact of the size of the respondent on procedures followed and the presence or absence of dedicated human resources management specialist/expertise on the procedures followed? (s.387(f) and s.387(g))

[107] FMG is a large organisation with dedicated internal, and access to external, human resource management and employment law expertise. This was reflected in the processes utilised in the performance management of Mr Etienne, and ensured that Mr Etienne was afforded procedural fairness.

Are there any other relevant matters? (s.387(h))

[108] Section 387(h) provides the FWC with a broad scope to consider any other matters it considers relevant. There were no matters raised by Mr Etienne's representative that I consider make the dismissal of Mr Etienne harsh, unjust or unreasonable.

[109] Having considered each of the matters specified in s.387, including whether there are any other relevant matters which make Mr Etienne's dismissal harsh, unjust or unreasonable, I am satisfied that the dismissal of Mr Etienne was not in all the circumstances harsh, unjust or unreasonable. Accordingly, I find Mr Etienne's dismissal was not unfair.

[110] An order (PR591211) to this effect will be issued with this decision.

S Heathcote of APX Law Pty Ltd T/A Steve Heathcote Barrister & Solicitor for the applicant.

[9] Exhibit R1 at [17] and Exhibit R2 at [35].

[13] Exhibit R2 at [8] and [36]-[37].

[21] Exhibit R1 at [29]-[31] and JC2, Exhibit R2 at [30]-[33] and NK4.

[24] Transcript at [PN182]-[PN191].

[26] Exhibit R2 at [19]-[22] and NK3, Transcript at [PN107]-[PN114], [PN 194-PN 199].

[33] Transcript at [PN154]-[PN 157].

[39] Transcript at [PN412]-[PN415].

[42] Exhibit R2 at [41] and [49]-[51].

[45] Transcript at [PN 242]-[PN 261].

[48] Ibid [PN1142]-[PN1147], [PN1196].

[51] Exhibit R1 at [44] and Exhibit R3.

[53] Exhibit R1 at [47] and Exhibit R2 at [59]-[61].

[55] See for example Exhibit R2 at [63]-[66] and Transcript at [PN1413].

[56] Exhibit R2 at [67] and Exhibit R4 at [22]-[24].

[58] Exhibit A1 at [34 ] and [37]-[42].

[67] Exhibit R4 at [45]-[50] and Exhibit A1 at [52]-[57].

[68] Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359, 373, 377-378.

[69] Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.

[74] Exhibit A1 at [34] and Transcript at [PN 227].

[75] See for example Transcript at [PN1450] and [PN1456], [PN1470], [1474].

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

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

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

[79] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137.

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

[82] Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1542].

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