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[2020] FWC 5402
General information, not legal advice.
Fair Work Commission
2020-10-16
Original judgment source is linked above.
s.394 - Application for unfair dismissal remedy
Unfair dismissal - engagement in secondary employment - valid reason for dismissal - significant procedural deficiencies - dismissal unreasonable - no remedy provided.
[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Sydney on 20 November 2019. The application was made by Shane John Harris (the applicant) and the respondent employer is Luka Financial Pty Ltd ABN: 83 163 657 850 (the employer).
[2] The application indicated that the date that the applicant's dismissal took effect was 30 October 2019. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) (a) of the Act.
[3] The matter was not resolved at conciliation, and it has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted at Orange on 11 August 2020.
[4] At the Hearing the applicant represented himself, and he provided evidence as the only witness called in support of the unfair dismissal claim. The case for the employer was presented by its Managing Partner, Mr M McKenna_._ Mr McKenna called two witnesses to provide evidence on behalf of the employer, and he also provided evidence as the third witness called by the employer.
[5] The applicant had worked for the employer for 2 years. The applicant was initially employed to work in a position described as a paraplanner. In October 2018, the applicant was promoted to the position of Financial Adviser, and in December 2018 the applicant successfully negotiated a significant remuneration increase. The applicant was engaged in work that included a variety of activities associated with the preparation and provision of financial advice to the clients of the employer.
[6] The employer conducts a business as a firm of Chartered Accountants and Financial Advisors based in the New South Wales country town of Dubbo. The employer's business provides various accounting, tax, financial and insurance services to both personal and business clients. The employer is not a small business, and it and its associated entities, had in excess of 18 employees at the time of the dismissal of the applicant.
[7] The applicant's employment appeared to have involved a level of successful performance and was without any recorded complaint or issues prior to August 2019. In August 2019, the applicant approached one of the employer's three Partners, Mr Thompson, and raised concerns about the professional conduct of one of the other Financial Advisers who worked for the employer. The applicant's concerns regarding the conduct of his colleague were initially raised on a confidential basis with Mr Thompson because the individual in question was the son of the employer's Managing Partner, Mr McKenna. In broad terms, the applicant's concerns involved what he believed to be poor compliance and quality of advice provided by the other Financial Adviser, Mr McKenna junior.
[8] During August 2019, the concerns that the applicant had raised about the conduct of the Managing Partner's son were the subject of a series of meetings that involved the applicant, Mr Thompson, Mr McKenna, and his son, Nicholas McKenna. The concerns that the applicant had raised regarding the professional conduct of the other Financial Adviser, Nicholas McKenna, were investigated by the employer, and subsequently some alterations were made to the detailed fashion in which certain work was completed in respect to material used in the preparation of statement of advice documentation provided to clients. The applicant felt that his concerns had not been properly resolved although he did not express this to the employer's Partners at the time. The applicant was also criticised for not directly raising his concerns with his colleague, Nicholas McKenna and/or his father, Mr McKenna.
[9] In October 2019, Mr McKenna (senior) noticed behavioural changes with the conduct of the applicant in the workplace. In particular, Mr McKenna noticed that the applicant kept his office door shut for long periods of time, and that when he walked into the applicant's office, the applicant would quickly minimise windows that had been open on his computer screen. Mr McKenna became quite concerned that the behaviour of the applicant suggested that he was using the employer's IT system/equipment for something other than appropriate business operations. Mr McKenna suspected that the applicant may have either been accessing pornography, or engaging in computer gaming, or running a personal business utilising the employer's IT facilities.
[10] On Monday, 28 October 2019, Mr McKenna discussed his concerns about the applicant's workplace behaviour, particularly the minimising of windows on the computer screen, with one of the other Partners, Mr Thompson. Mr Thompson was the Partner in charge of the employer's IT systems, and as a result of the discussion with Mr McKenna, he commenced an investigation which included an examination of the applicant's work emails.
[11] The examination of the applicant's emails revealed documents that included a webpage for "SJ Harris Wealth" and email exchanges between the applicant and others which made mention of inter alia, the income that the applicant had received from conducting secondary business operations. Mr McKenna and Mr Thompson were alarmed at what had been discovered, which they believed to be evidence that the applicant had been engaged in contract paraplanning work.
[12] On Tuesday, 29 October 2019, Mr McKenna and Mr Thompson met with the other Partner of the employer, Mr Shanks, and the three men discussed the material that had been discovered during the examination of the applicant's emails. The Partners concluded that the material that had been discovered demonstrated that the applicant had been conducting a secondary contract paraplanning business utilising inter alia, the IT resources of the employer. The Partners decided that the applicant should immediately be suspended from work and locked out of the employer's IT system. Further, it was decided that Mr McKenna and Mr Shanks would meet with the applicant on the next day, Wednesday, 30 October 2019, to hear from the applicant and determine the extent of the secondary paraplanning business operation that had been conducted by the applicant.
[13] At around 4:30 pm on 29 October 2019, Mr Shanks met with the applicant and informed him that issues involving the applicant potentially breaching his employment contract had emerged, and that the applicant was requested to attend a meeting the following day at which he should bring a support person. The applicant enquired as to whether he was being terminated from his employment, and Mr Shanks indicated the termination of employment was a potential outcome but that all options would be considered during the meeting to be held the following day. Mr Shanks then told the applicant that he should immediately leave the workplace and his work laptop and office keys were taken from him. A short time later the applicant received advice that his access to the work email and other IT systems had been removed.
[14] On 30 October 2019, the applicant attended the workplace, and prior to the meeting scheduled for 9 am, the applicant went into his office and packed up his personal belongings in anticipation of the termination of his employment. The applicant had been unable to arrange to have his preferred support person and instead he was accompanied by another colleague in the financial planning team who acted as his support person during the meeting. The applicant secretly made an audio recording of the meeting.
[15] During the meeting, Mr Shanks and Mr McKenna questioned the applicant about the operation of his secondary employment involving a contract paraplanning business. In the course of the questioning of the applicant he was asked to provide an estimate of how much time he had spent engaged in the secondary paraplanning business and the applicant stated probably anywhere from 10 to 20 hours a week. Following some further discussion about secondary employment in business operations that did not involve the nature of work undertaken by the employer, Mr McKenna then advised the applicant that he was terminating his employment.
[16] The meeting concluded with the applicant offering to provide a handover to Nicholas McKenna who was then bought into the meeting room to discuss specific client related issues with the applicant. The applicant subsequently gathered his personal belongings in preparation for leaving the workplace. Before the applicant left the employer's premises, he was assisted with retrieving personal material from his work laptop computer.
[17] On 8 November 2019, the applicant received an email from the employer which included a termination of employment letter which advised inter alia, that the applicant had been dismissed in respect of his conduct involving his secondary consultant paraplanning work that was considered to be in breach of his employment contract. The termination of employment letter also indicated that the employer considered that the applicant's secondary business activities conflicted with those of the employer, and therefore the decision was made to terminate his employment.
[18] The termination of employment letter also set out the basis upon which a calculation was made of the applicant's final pay. The calculation for final pay included payment in respect of 2 weeks' notice and then deductions were made in respect of a negative balance of personal/carer's leave, and for payments in respect to training for the applicant that the employer had paid, and which it sought to recover. As a result of these deductions, the employer claimed that it was owed a balance of $718.00, and the applicant was invoiced for an outstanding payment of $718.00.
[19] The applicant subsequently disputed the final pay calculations and other issues surrounding the basis for the termination of his employment. On 11 November 2019, the applicant wrote to the employer detailing his objections to the final pay calculation and raising various issues regarding the termination of his employment. On 18 November 2019, Mr McKenna replied to the applicant's letter of 11 November, and he rejected the propositions that the applicant had advanced in respect of the termination of his employment.
[20] The applicant subsequently lodged his unfair dismissal claim on 20 November 2019. The applicant's unfair dismissal claim (Form F2) indicated that the remedy that the applicant sought involved firstly, a letter rescinding his termination and acceptance of his resignation as of the same date as the original termination, and secondly, adjustment to the final pay calculation which removed reductions in respect of payment of training costs paid by the employer.
[21] The applicant has apparently been unable to secure alternative employment in a position as a Financial Adviser in the Dubbo area. However, he did indicate that he had been fortunate enough to be able to continue working as a contract paraplanner to provide income to support his needs.
[22] The applicant provided two extensive written submission documents which were respectively filed on 10 February and 11 March 2020. The applicant submitted that his dismissal was harsh, unjust and unreasonable and he supported this proposition by way of identification of various issues under the headings of; procedural fairness; reason for termination; accusations made after the fact; and examination of evidence.
[23] The applicant made extensive submissions in respect of the issue of procedural fairness whereby he asserted that the employer implemented his dismissal in a manner which denied him procedural fairness. The applicant submitted that on 29 October 2019, when he was suspended from work, he was not provided with the reason for that suspension or the basis for the meeting that he was required to attend the next day.
[24] The applicant submitted that he was not provided with evidence of the allegations made against him prior to the meeting. Therefore, the applicant stated that he had no opportunity to properly prepare for the meeting including arranging for a suitable support person to be present at the meeting. Further, the applicant said that during the termination meeting he was provided with only minimal opportunity to respond to the allegations that were made against him.
[25] The applicant also noted that the decision to dismiss was made by Mr McKenna approximately 11 minutes after the meeting had commenced. The applicant submitted that the decision to terminate his employment had been made prior to the meeting, and this was reflected by the fact that he had been suspended from work, disabled from access to the work IT systems, and he had his office keys confiscated. The applicant referred to various Judgments and Decisions which he said represented the case law that reinforced the requirement for procedural fairness to have been provided to him before the decision was taken to terminate his employment.
[26] The submissions made by the applicant also referred to the employer's failure to follow their own internal policies and procedures as outlined in the Luka Group Team Member's Handbook Version 1 document (the Handbook). The applicant asserted that the procedures that were stipulated in the Handbook had been breached.
[27] The applicant also submitted that the employer was not entitled to withhold his final pay and make deductions which resulted in him being issued with an invoice to pay the employer $718.00. In support of these submissions, the applicant referred to s. 324 of the Act.
[28] The applicant made further submissions in respect of the reason for his dismissal whereby he asserted that the reasons that were provided to justify the termination did not constitute a valid reason for dismissal. The applicant submitted that the simple fact that he worked a second job was not grounds for termination unless it could be proven that it was likely to have negatively impacted the employer's business.
[29] The applicant submitted that engaging in the contract paraplanning work did not conflict with or harm the business interests of the employer. The applicant submitted that his work as a contract paraplanner did not breach his employment contract because; the employer did not provide contract paraplanning services; none of the businesses that he provided services to were located in Dubbo or the surrounding area; none of the paraplanning was conducted for current or former clients of the employer; the paraplanning contract work did not result in a loss of revenue to the employer; and the paraplanning contract work did not impact on his ability to complete his role for the employer to a satisfactory standard.
[30] The further submissions of the applicant also addressed a number of issues that had been mentioned in the termination of employment letter and subsequently included in the employer's response, Form F3, but which had not been the subject of discussion during the meeting held on 30 October 2019. The applicant said that the reasons for his termination were fabricated and expanded upon by the employer when it realised that he was going to pursue an unfair dismissal claim.
[31] The applicant also asserted that conducting his contract paraplanning work expanded his skills and knowledge and thereby assisted in terms of the work that he performed for the employer. The applicant also submitted that a substantial amount of his contract paraplanning work was conducted in his personal time, during work breaks and outside of working hours.
[32] In further submissions, the applicant asserted that his business website did not advertise services or allude to the fact that services may be provided by him. The applicant submitted that the reason for constructing his website was to "build a personal brand". Further, the applicant asserted that his contract paraplanning work did not negatively impact upon his work performance with the employer.
[33] In summary, the applicant submitted that the manner in which he had been dismissed involved a blatant disregard for procedural fairness and that his termination was a targeted attack to remove a dedicated and hard-working team member because the employer had a vendetta against him. The applicant stressed that the manner in which he had been dismissed breached the employer's internal policies and procedures. Further, the applicant submitted that the employer had gone out of its way to fabricate reasons for his dismissal.
[34] The written submissions provided on behalf of the employer summarised the reason for the applicant's dismissal to be breaching his employment contract as he was earning income from a side business in the financial planning industry. The employer submitted that operating a paraplanning business was in direct conflict with the business of the employer. The employer stated that its business engaged the applicant to do amongst other things, paraplanning for clients of the employer.
[35] The submissions made by the employer referred to various clauses in the applicant's employment contract document which it claimed were breached when the applicant operated his contract paraplanning business without the knowledge or consent of the employer. The employer also submitted that the applicant had utilised its computer network facilities and other resources for his own private personal use in order to operate his side business. Further, the employer submitted that the applicant's activities jeopardised a sub authorised representative deed that it had with its licensee, Capstone Financial Planning Pty Ltd.
[36] The submissions made by the employer also acknowledged that it had difficulty following correct procedures because it did not have dedicated human resource specialists or relevant expertise. The submissions of the employer explained that due to the severe nature of the breach that was admitted by the applicant during the meeting held on 30 October 2019, the decision to dismiss the applicant was made during the meeting, rather than after taking a break to consider the matter more carefully.
[37] The employer's submissions also asserted that it had lost all trust and confidence in the applicant and that in any event, the applicant had made it clear that he did not want to be reinstated. The employer stressed that the actions of the applicant in operating a contract paraplanning business were in direct conflict with the employer's business operation, and in breach of various aspects of the applicant's employment contract document. Therefore, according to the submissions made by the employer there was valid reason for the dismissal of the applicant.
[38] The unfair dismissal provisions of the Act relevantly include s. 385 which stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. Section 385 is in the following terms:
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."
[39] In this case, there was no dispute that the matter was confined to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable.
[40] Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. Section 387 is in the following terms:
"387 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."
S. 387 (a) - Valid reason for the dismissal related to capacity or conduct
[41] In this instance, the applicant was dismissed because the employer considered that his activities, whereby he conducted a secondary business that provided contract paraplanning services, fundamentally breached the contract of employment. The applicant asserted that his secondary business as a contract paraplanner did not represent valid reason for dismissal because inter alia, it did not negatively impact the business interests of the employer.
[42] The applicant's contract of employment document did not specifically refer to the issue of secondary employment. Clause 5 of the contract of employment document included various clauses which require the applicant to inter alia, not engage in any business or activities which may conflict with or be harmful to the employer's business interests. Clause 15 of the contract of employment document refers to the employer's policies and procedures which are contained in the Luka Group Team Member's Handbook Version 1 document (the Handbook) which at clause 6.4, refers to "Other Employment".
[43] The terms contained in the contract of employment and the Handbook reflect the well understood notion that an employee is obliged to devote their time and energies in the interests of the employer, and that any engagement in secondary employment would not be inimical to the employer's interests. Contract of employment and policy and procedure documents often stipulate that engagement in any secondary employment is only permitted with the expressed approval of the employer.
[44] In this instance, the relevant terms of clause 6.4 of the Handbook are expressed in other than obligatory terms wherein it is stated:
"All full time members of our Group are expected to devote their full energies to the work of the Group and are discouraged from accepting employment or compensation from outside sources without the prior written approval of their Partner." [emphasis added]
[45] Despite the non-obligatory nature of the wording in the Handbook, the evidence has revealed that the applicant understood that his secondary employment as a contract paraplanner which had been undertaken without written approval of the employer, was something that, if discovered by the employer, may bring his employment to an end. The applicant's understanding of the risk that he was taking by engaging in secondary employment as a contract paraplanner without obtaining clear approval from the employer, was reflected in an email exchange that he had with another employee on 22 October 2019.
[46] The subject of the 22 October email exchange was "Side hustle", and the following extract from an email that the applicant sent to his colleague at 2:29 pm discloses that the applicant recognised that if the employer discovered his "side hustle" his employment would be jeopardised, and his colleague might be the beneficiary by moving into his office:
"When I interviewed for here I was pretty heavily running an ebay store and let them know and the response was "as long as it does not interfere with your work we don't mind", and heaps of people here have side stuff.
I did mention before in my wage review when I became an adviser how much I get when I contract to try and push my wage up, so they were aware I did or was contracting at that point and nothing was said lol.
Just figure it is easier not to mention it, also have not had any reason to.
Lol and if they told me I had to pick, you might end up with your own office haha - because im only working for the money..." [1] [emphasis added]
[47] The evidence has confirmed that the employer was unaware that the applicant was conducting a secondary business as a contract paraplanner. The applicant had attempted to suggest that he had informed the employer about his work as a contract paraplanner during the negotiations for his remuneration increase. However, the evidence disclosed that the applicant referred to the rates paid to contract paraplanners as a means to obtain leverage to secure a greater increase in his remuneration. The applicant disingenuously sought to portray this pay negotiation and the earlier mention of his eBay business, as evidence of knowledge that the employer had gained of his secondary employment as a paraplanner. The applicant attempted to confound the clear knowledge that the employer had regarding his eBay business with the reference in pay negotiations to rates paid to contract paraplanners, so as to diffuse and deflect from the undeniable potential for the conflict of interest that the employer would realise when his secondary employment as a contract paraplanner was discovered.
[48] Although the applicant asserted that his secondary employment as a contract paraplanner did not conflict with the business interests of the employer, on various occasions during the Hearing, the applicant confirmed that the nature and extent of his activities as a contract paraplanner could not be justified as some innocent, harmless, and/or partially disclosed secondary employment. For example, during the cross-examination of Mr McKenna by the applicant the following exchange occurred:
"There wasn't much protection going on there? --- No, because you were doing the wrong thing.
Accused, with no evidence provided in your - - - ? --- No, you were doing the wrong thing and you actually admitted that you were doing it.
I never said I wasn't. ..." [2][emphasis added]
[50] A careful and thorough examination of all the evidence has established that the undisclosed secondary employment undertaken by the applicant as a contract paraplanner was, once clarified in its nature and extent, misconduct that the employer could properly consider to have represented a fundamental breach of the contract of employment. It was largely irrelevant that the applicant may have performed contract paraplanning work via engagement through an intermediary, and apparently for clients that were not located in the vicinity of Dubbo. Once the employer had confirmed that the applicant had undertaken 10 to 20 hours per week in undisclosed secondary employment involving financial services in the same or similar operations to those undertaken by the employer, it was entitled to treat the activities of the applicant as misconduct that was inconsistent with any continuation of the employment relationship.
[51] In summary therefore, the conduct of the applicant whereby he engaged in undisclosed secondary employment performing work as a contract paraplanner, constituted misconduct and provided valid reason for the dismissal of the applicant.
S. 387 (b) - Notification of reason for dismissal
[52] The employer provided initial verbal notification of the reasons for the applicant's dismissal during the termination of employment meeting that occurred on 30 October 2019. Subsequently, the employer provided a termination letter dated 8 November 2019, which provided more detailed notification of the reason for the applicant's dismissal including reference that was made to various clauses in the applicant's contract of employment document.
[53] Consequently, the applicant was notified of the reason for his dismissal both verbally and subsequently in writing. Although the employer was understandably alarmed during the meeting held on 30 October 2019, when the applicant confirmed that he had performed between 10 to 20 hours per week in his contract paraplanning business, such alarm should not have been immediately translated into verbal notification of dismissal. The employer has subsequently acknowledged that Mr McKenna acted too hastily, and he should have adjourned the meeting before providing any notification of dismissal.
S. 387 (c) - Opportunity to respond to any reason related to capacity or conduct
[54] During the termination interview on 30 October 2019, the applicant was provided with a number of opportunities to respond to the circumstances regarding his undisclosed secondary employment as a contract paraplanner. The transcript of the secret audio recording made by the applicant of the meeting of 30 October 2019, records that on numerous occasions the applicant seemed to acquiesce and agree that dismissal was appropriate, and he offered little or no opposition. The following extracts from the transcript of the secretly recorded meeting are relevant:
"Michael McKenna then said: So, where we're at, you-you're in total breach. Our-our advice has been that um, we should terminate you.
I then said: Well, I gathered that. It was pretty obvious that's where it's heading. I know this is a formality. I'm not stupid.
Michael McKenna then said: No, it's not a formality. There- there's nothing you've told us today that would think that we could change our mind.
Michael McKenna then said: Yeah, unless you've got any more to offer?
I then said: No, no, that's -- you know? I don't think it's that big of an issue. We disagree. That's fine. I can respect that."[4]
"Michael McKenna then said: Well, is there any reason you think we shouldn't terminate you?
I then said: Oh, not really. I'm-- You know, nothing I'm going to say is going to change what you've already decided, so--
Jeff Shanks then said: Shane, you're missing the point, we haven't decided mate. That's why- that's why we are having this discussion.
"Michael McKenna then said: But we are terminating you Shane.
"Michael McKenna then said: At the end of the day, we are securing our business.
I then said: That's fine, I've gotta secure my business-"[7]
[55] Despite the applicant's apparent acquiescence to the termination of his employment, the meeting should have been adjourned before Mr McKenna made any decision to dismiss the applicant. The meeting had been held at short notice and without providing the applicant prior advice of the issues that were under examination in respect of the applicant performing undisclosed secondary employment as a contract paraplanner.
[56] The procedure that the employer adopted whereby it required the applicant to attend the meeting on 30 October 2019, with only one days' notice and without any clearly identified issues or concerns that were to be the subject of the meeting, represents a significant procedural deficiency. The employer did not follow its own policies and procedures, and although the applicant was provided with a number of opportunities to respond or provide explanation during the meeting, the manner in which the meeting was arranged at short notice and without prior identification of the issues under examination, meant that the applicant was denied procedural fairness.
S. 387 (d) - Unreasonable refusal to allow a support person to assist
[57] The employer did not unreasonably refuse to allow the applicant to have a support person present at the meeting held on 30 October 2019. However, the haste with which the applicant was summoned to the meeting did provide difficulties for him to obtain the support person of his liking. Consequently, the process that the employer adopted avoided a proper opportunity for the presence of a preferred support person to assist the applicant.
S. 387 (e) - Warning about unsatisfactory performance
[58] This factor is not relevant to the circumstances in this instance as the applicant was not dismissed for unsatisfactory performance but instead, for breach of his employment contract.
S. 387 (f) - Size of enterprise likely to impact on procedures
[59] The employer is a medium size business operation and therefore allowance has been made for a degree of informality and some imprecision in respect to employment related matters.
S. 387 (g) - Absence of management specialists or expertise likely to impact on procedures
[60] There was evidence that the employer did not have employee management specialists or other employment expertise. Experts should not be required to ensure that fundamental fairness is observed. The employer should have adopted an approach that provided the applicant with procedural fairness. It is irrelevant that subsequently no mitigating factors have been identified which would have changed either Mr McKenna's mind, or that of any of the other Partners.
[61] Although the processes that were adopted by the employer appeared to have been influenced by the applicant's apparent acquiescence to his dismissal, it should have adopted the procedures that are outlined in its own employee Handbook. The employer acted to quickly secure its business operation upon the discovery of emails that appeared to confirm that the applicant had been engaged in undisclosed secondary employment in the financial services industry. However, it should have subsequently taken more time to deal with the employment of the applicant by way of a documented show cause process in order to ensure that procedural fairness was provided.
[62] The calculation of the applicant's final pay which involved deductions in contravention of s. 324 of the Act introduced an unlawful element to the dismissal of the applicant. The employer has indicated that it would take no further action in pursuit of the invoice issued to the applicant for $718.00.
[63] Regrettably, the employer has also introduced various other alleged reasons for the dismissal of the applicant in its attempt to defend the applicant's unfair dismissal claim. This material was largely irrelevant and did not redress the clear procedural deficiencies that were evident in the manner in which the employer dismissed the applicant.
[64] The credibility of the applicant was challenged during the Hearing when the employer introduced evidence that the applicant had failed to disclose income from his eBay business in his 2017/2018 income tax return. The applicant suggested that the absence of any declared income from his eBay business was an oversight. However, an oversight of this nature, in circumstances where the individual is a professional in the financial services industry was somewhat unusual.
[65] The secret audio recording that the applicant made of the 30 October 2019 meeting was also an issue that impugned the character of the applicant. Although the applicant asserted that the secret recording of the conversation would have satisfied particular exemption provisions contained in s. 7 (3) (b) (i) of the Surveillance Devices Act 2007 (NSW), it is doubtful that, if properly tested, the applicant could have established that the secret recording was reasonably necessary for the protection of his lawful interests.
[66] In any event, in an employment context, and more generally, there is something very unpalatable about secretly recording a conversation. Consequently, it was somewhat disconcerting to observe that the applicant was most concerned that a successful determination of his unfair dismissal claim would enhance his "personal brand" and provide him some reputational restoration. The evidence which has challenged the applicant's character would appear to have had the opposite outcome.
[67] The applicant was dismissed for what the employer considered to be a fundamental breach of his employment contract involving his engagement in undisclosed secondary employment as a contract paraplanner. The nature and extent of the applicant's activities in respect of the undisclosed secondary employment was considered to represent conduct that was in direct conflict with the business interests of the employer. Upon careful analysis, the employer's findings in respect to the applicant's engagement in undisclosed secondary employment have been confirmed.
[68] The applicant was engaged in undisclosed secondary employment of significant magnitude and in work in the financial services industry. The nature and extent of the applicant's engagement in undisclosed secondary employment represented misconduct that was plainly inconsistent with the continuation of employment, and it established valid reason for the dismissal of the applicant. However, the valid reason for dismissal has required assessment and evaluation against significant procedural errors which were evident in the manner in which the employer determined and implemented the dismissal of the applicant.
[69] The procedural errors in this case were matters of significance such that the applicant was denied procedural fairness. The employer was entitled to act swiftly when it discovered evidence of the applicant's secondary employment. The immediate suspension of the applicant from the workplace and his removal from access to email and other IT facilities was appropriate action in the circumstances. However, the employer then hastily convened a meeting with the applicant without first clearly articulating the issues under examination. Further, the employer moved too quickly with its determination to dismiss the applicant conveyed verbally during the meeting held on 30 October 2019. The dismissal of the applicant was clearly undertaken with the adoption of defective procedure.
[70] Consequently, the applicant was dismissed for valid reason involving his misconduct arising from his significant engagement in undisclosed secondary employment that was inimical to the interests of the employer. However, the significant procedural defects evident in respect of the determination and implementation of the dismissal of the applicant have rendered the dismissal to have been unreasonable. The applicant's dismissal has been found to have been procedurally unfair, albeit for valid reason, and accordingly, the Commission must consider the appropriate remedy that should be provided in this instance.
[71] The application document (Form F2) indicated that the remedy sought by the applicant was:
"1. A letter rescinding my termination, and acceptance of my resignation to the same dates as my original termination and notice period.
2. My final pay calculation be revised to reflect the stated policy around refund of education or professional development costs as provided in section 8.2 and 8.6 of the Luka Group Team Member's Handbook (Version 1)."
[72] At no stage has there been any suggestion that the applicant sought reinstatement as remedy for his unfair dismissal. Further, the applicant has not articulated or advanced a position in respect of a remedy involving monetary compensation. It appeared that the applicant's motivation for the pursuit of his unfair dismissal claim was confined to a determination in his favour, rather than any remedy of either reinstatement or monetary compensation.
[73] In the circumstances of this case involving a dismissal for valid reason but with procedural deficiency, reinstatement would not be an appropriate remedy. Further, in the particular circumstances of this case which involved misconduct in the financial services industry, it is understandable that the employer would reject any proposition of "converting" the dismissal into a resignation and potentially misrepresenting the true record.
[74] It would be inappropriate for the Commission to proceed to contemplate monetary compensation in the absence of any articulated pursuit of such a remedy. In any event, if compensation was to be considered, the misconduct of the applicant would, having regard for s. 392 (3) of the Act, been reduced to $0.00, on the basis that the employer has confirmed that it shall cease and desist from any pursuit of the erroneous invoice arising from the applicant's final pay calculation.
[75] Consequently, for the reasons outlined above, taking into account all of the circumstances of the case, the application for relief from unfair dismissal is determined on the basis that the dismissal of the applicant was procedurally unfair but for valid reason.
[76] Therefore, in this instance, no Orders in respect of remedy shall be made, and the application for unfair dismissal is finalised accordingly.
Mr M McKenna, Director appeared for the employer.
Printed by authority of the Commonwealth Government Printer
Shane John Harris
Luka Financial Pty Limited [2020] FWC 5402