Tian v DMG Industries Pty Ltd,

Industrial Relations Commission (NSW)|2005-06-09

CITATION: Hernandez -V- Bayton Group Unit Trust [2005] NSWIRComm 1087

APPLICANT Oscar Javier Hernandez PARTIES: RESPONDENT Bayton Group Unit Trust

Unfair dismissal - termination of employment - CATCHWORDS: summary dismissal - dishonesty admitted - disloyalty proven - no mitigation or justification - claim dismissed.

LEGISLATION CITED: Industrial Relations Act 1996 [NSW]

CASES CITED: Tian v DMG Industries Pty Ltd, (2005) Australian Industrial Relations Commission [Lewin C], matter no. U2004/5373, Decision delivered on 22 Feb 2005.

APPLICANT Mr R Killalea, barrister LEGAL REPRESENTATIVES: RESPONDENT Mr D Davies, agent

DECISION: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Application by O Hernandez re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996.

1 An employer is entitled to honesty from an employee, and vice versa. Oscar Javier Hernandez, (the applicant), lied to Richard Woods, the Managing Director of the Bayton Group of Companies and Trustee of Bayton Group Unit Trust, (the employer). The applicant's dishonesty arose during questioning by the employer about apparent disloyalty or conflict of interest regarding the applicant's activities at a site where work was being undertaken on behalf of a competitor of the employer. The employer then summarily dismissed the applicant as it believed that the applicant had been both dishonest and disloyal. 2 The applicant has claimed that his dismissal was unfair and has sought monetary compensation as remedy for his alleged unfair dismissal. The applicant made claim for unfair dismissal under section 84 of the Industrial Relations Act 1996 [NSW], (the Act). 3 The unfair dismissal claim was filed on 25 August 2004, and listed for Conciliation proceedings on 9 September 2004. Settlement of the matter was unable to be achieved and the claim was pursued and ultimately involved a Hearing conducted on 26 April 2005.

BACKGROUND 4 The applicant is a male who was some fifty years of age at the time of his alleged unfair dismissal on 6 August 2004. The applicant had been employed as an Area Manager and he had occupied that managerial position for approximately five years prior to his dismissal. The applicant had a lengthy employment history with the employer that involved at least two promotions.

5 The employer relevantly operates a commercial cleaning company that undertakes commercial office and general cleaning work. The employer competes against other cleaning companies for contracts involving the cleaning of various commercial, office and retail premises. The applicant's duties included the organisation and supervision of employee cleaners who were engaged to carry out the actual cleaning work. In addition the applicant had some limited role in respect to quoting for new cleaning work and therefore he was involved with customer contact for both the provision of existing cleaning services, together with the pursuit of new or additional cleaning work. 6 Although the applicant had a generally commendable employment history, he had become dissatisfied with certain aspects of his employment during the period leading up to the events that surrounded his summary dismissal on 6 August 2004. The applicant's dissatisfaction with his employment appeared to relate to certain differences of opinion that he had with other managerial staff. The applicant's work dissatisfaction has ultimately proven to be largely irrelevant to the matters that relate to his dismissal.

THE EVIDENCE 7 The circumstances surrounding the dismissal of the applicant on 6 August, and the reasons for his summary dismissal, were not matters of any significant factual conflict. The applicant admitted that he had lied to the employer's Managing Director, Mr Richard Woods, about his knowledge of a building referred to as the "Packer building", located at 54 Park Street in the Sydney Central Business District. 8 The applicant and one other witness, Mr Edgardo Rodriguez, provided evidence in support of the applicant's claim. The employer called a total of three witnesses, and the substantial evidentiary material was provided by Mr Richard Woods.

THE CASE FOR THE APPLICANT 9 Mr R Killalea, barrister, appeared for the applicant at Hearing. Mr Killalea commenced submissions by indicating that the matter involved an application for compensation. Mr Killalea recounted the employment history of the applicant and stressed that the applicant had been promoted on two occasions, from a position of Cleaner, firstly to an Area Supervisor, and then subsequently to the position of Area Manager. 10 Mr Killalea submitted that the decision of Mr Woods to dismiss the applicant had been based on an incorrect assumption that the applicant was receiving remuneration for doing work at the "Packer building". Mr Killalea said that the evidence was clear that the work that the applicant did in respect to assistance in translating English and Spanish for workers engaged at the "Packer building" was something for which he did not receive any remuneration. 11 Mr Killalea acknowledged that the applicant had falsely denied that he had any knowledge of the "Packer building". Mr Killalea further acknowledged that the applicant now admitted that he had lied to Mr Woods when asked about his knowledge of the "Packer building". 12 However according to the submissions of Mr Killalea, Mr Woods had made the decision to immediately terminate the applicant based upon information that he had obtained, and the answers given by the applicant, concerning the activities undertaken at the "Packer building". Mr Killalea submitted that it was pre-emptory of the employer to terminate the applicant's employment on the basis of this level of knowledge of the activities that the applicant may have been involved in at the "Packer building". Mr Killalea said that the employer had incorrectly assumed that the applicant's involvement in the activities at the "Packer building" involved work for which the applicant was remunerated. Mr Killalea submitted that it was manifestly unfair to terminate the applicant's employment on such an incorrect assumption. 13 Mr Killalea made further submissions which criticised the suggestion that other aspects of work performance, and other issues, may have also been in the mind of Mr Woods at the time that he made the decision to dismiss the applicant. Mr Killalea submitted that it was unfair for these additional grounds to be relied upon now as representing some basis upon which to dismiss the applicant. 14 Mr Killalea urged the Commission to find that the applicant had been unfairly dismissed, and to Order that he be paid compensation as an appropriate remedy.

THE CASE FOR THE EMPLOYER 15 Mr D Davies, from McCarthy Ausgroup Pty Ltd, represented the employer. Mr Davies commenced his submissions by referring to the provisions of section 88 of the Act. 16 Mr Davies submitted that the employer gave a valid reason for dismissal, and that that reason had a basis in fact. Mr Davies submitted that the reason involved the applicant's apparent disloyalty which quickly changed to dishonesty when questioned about matters relating to the apparent disloyalty. Mr Davies submitted that the applicant had been dismissed because he lied to the employer. 17 Mr Davies submitted that the applicant had been given an opportunity to explain matters relating to his apparent involvement in activities undertaken at the "Packer building", and that he had not made any attempt to explain what his involvement was at the "Packer building" but instead, had simply denied any knowledge of the premises. Mr Davies submitted that the dishonesty of the applicant justified his summary dismissal. 18 Mr Davies further submitted that the employer had reasonable grounds for making inquiries about the apparent disloyalty of the applicant, and that when confronted with the applicant's clear dishonesty, the employer was then entitled to dismiss summarily. Mr Davies referred to a Decision of the Australian Industrial Relations Commission in the case of Tian v DMG Industries Pty Ltd Tian v DMG Industries Pty Ltd, (2005) Australian Industrial Relations Commission [Lewin C], matter no. U2004/5373, Decision delivered on 22 Feb 2005. which, according to Mr Davies, supported the proposition that the employer's actions in dismissing the applicant should not be overturned by this Commission. 19 Mr Davies said that the Commission should not interfere with the employer's decision to terminate the applicant's employment, and it should not reward him with any monetary compensation. Mr Davies urged the Commission to dismiss the application.

CONSIDERATION 20 The Determination of this matter has been straightforward. The applicant's admitted dishonesty provided proper substantive basis for summary dismissal. 21 Although, in retrospect, the employer acted very quickly during the meeting held on 6 August 2004, the applicant's dishonesty was clear and unbridled at the time. 22 Subsequently the applicant has asserted that he was dishonest because he was angry with the accusations of disloyalty that underpinned the employer's questioning about his knowledge of the "Packer building". This is a curious explanation for lying. It would seem that if the applicant had a clear conscience about his activities that were associated with the "Packer building", then he had no need to be angry about what would have been false accusations. Instead he could have calmly explained that his involvement was nothing that involved any conflict with the employer's business interests, but just a casual association to translate for people whose first language was other than English. If the translation activities were not inimical to the employer's interests, then there was no reason to be angry about questions which may have insinuated otherwise. 23 In realty the applicant's anger was a manifestation of his guilt. The applicant's involvement in translation and other functions associated with the work undertaken at the "Packer building" represented a clear conflict of interest. The applicant assisted a competitor, and although he did not receive direct remuneration for his disloyal activities, it was clear that at least his close relatives were provided with paid work at the "Packer building". 24 The applicant's activities in respect to the work conducted at the "Packer building" was a matter that the employer was entitled to investigate, and the applicant's responses were plainly dishonest. Although it may have been more prudent for the employer to have delayed the decision to dismiss, it was clearly understandable that in the face of the blatant dishonesty, the employer decided to react immediately and decisively. It would be advisable that a more considered approach be adopted, particularly if in different circumstances there emerged some explanation and or mitigation of the apparent misconduct. 25 Regrettably for the applicant in this instance, there has been no subsequent explanation, mitigation, or even partial justification for the applicant's misconduct.

CONCLUSIONS 26 In this case the applicant was dismissed for blatant dishonesty. The applicant has subsequently admitted his dishonesty which in some respects, was commendable. However the employer was entitled to summarily dismiss the applicant when confronted with the overt dishonesty. The dishonesty arose from other conduct which upon analysis, represented disloyalty, and although the actions of the employer were hasty, they should not be disturbed. 27 The summary dismissal of the applicant for gross and wilful misconduct involving his dishonesty and disloyalty was not harsh, unreasonable or unjust. 28 The applicant's claim is dismissed and the proceedings are concluded.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

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