The attached document replaces the document previously issued with the above code on 1 December 2014.

Correcting typographical error in spelling of representative's names

[2014] FWC 8410

Fair Work Act 2009_

s.394 - Application for unfair dismissal remedy

Janart Holdings Pty Ltd T/A Stewart Automotive Group

[1] This decision arises from an application by Mr E. Young (the applicant) pursuant to section 394 of the Fair Work Act 2009 (the Act) for relief in respect of the termination of his employment by Janart Holdings Pty Ltd trading as Stewart Automotive Group (Janart or the respondent). The applicant's dismissal was notified to him on 14 July 2014 and took effect from 21 July 2014. The claim for relief was lodged on 1 August 2014.

[2] The matter was dealt with by a Conciliator on 29 August 2014 but did not settle. It was heard by me in Sydney on 3 and 4 November 2014. The matter proceeded by way of hearing as I considered that it was appropriate to do so having taken account of the factors set out in section 399 including the views of the parties reflected in the Conciliator's Report.

[3] The applicant was represented by Mr McArdle, solicitor and the respondent by Ms Dinnen of Counsel. Both representatives appeared by permission pursuant to section 596.

[4] The applicant gave evidence. His statement dated 22 September 2014 became Exhibit Applicant 1. It should be noted that, as part of his statement, the applicant adopts all of the assertions of fact in the outline of submissions filed on his behalf. The applicant's oral testimony is at PN 31-945 of Transcript.

[5] The applicant's wife, Ms T Young, also gave evidence on his behalf. Her statement dated 22 September 2014 was marked Exhibit Applicant 2. Her oral evidence is at PN 950-1012 of Transcript.

[6] The following witnesses gave evidence on behalf of the respondent:

Mr A Welsh Managing Director of the respondent. His statement was marked Exhibit Respondent 1. His oral testimony is at PN 1043-1456 of Transcript;

Mr R Bressington Fleet Manager with the respondent. His statement is marked Exhibit Respondent 2. His oral testimony is at PN 1460-1569 of Transcript;

Ms L Culkin-Maida Human Resources/Payroll Officer with the respondent. Her statement was marked Exhibit Respondent 3 and her oral testimony is at PN 1604-2248 of Transcript;

Mr A Pal General Manager for three specific vehicle brands at the respondent's Rockdale site. His statement was marked Exhibit Respondent 4 and his oral testimony is at PN 2251-2419 of Transcript;

Mr J Seal Used Car Salesman at the respondent's Sutherland site. His oral testimony is at PN 2422-2524 of Transcript;

Ms S Venables Clerk employed by the respondent at its Sutherland site. Her oral testimony is at PN 2530-2704 of Transcript.

PM Until recently, a clerk employed by the respondent at its Sutherland site. Her oral testimony is at PN 2785-2991 of Transcript. PM appeared in response to a summons to attend;

Mr P Mercouris Principal of Australian Investigation Security Management. He was not required for cross-examination and his statement dated 1 November 2014 was tendered without objection. It was marked Exhibit Respondent 5.

[7] It should be noted that the statement of Ms Culkin-Maida included twenty-three attachments, seven of which are recordings of interviews with some of the witnesses in this matter, PM, Ms Venables, Mr Seal and the applicant. Those attachments are respectively, B and O (PM), E (Ms Venables), J (Mr Seal) and H, M and R (the applicant). All of these recordings were played during Ms Culkin-Maida's evidence and she was questioned about them.

[8] An application was made by the respondent for PM's name to be kept confidential in any decision issued in this matter. The application was expressed as being made pursuant to section 594 of the Act although I am not entirely sure that section is relevant to what is being sought. In any event the application was opposed by the applicant.

[9] I do not propose to issue an order as sought by the respondent, however I do not intend to identify PM in this decision. The parties know who she is as do the other witnesses. She has provided her evidence in an open hearing and has been cross-examined upon it. The applicant has had a full opportunity to face his main accuser. In the light of the particular circumstances, especially her young age and her future employment opportunities, I have decided to identify her in this decision only by initials.

[10] There was extensive evidence and much material provided in these proceedings. Although I may not specifically refer to each and every issue raised, in reaching my conclusions I have had regard to all relevant materials and evidence before me.

[11] The applicant commenced employment with the respondent in August 2012. At that time he was engaged as a Used Vehicle Sales Consultant at the respondent's Sutherland site. His contract of employment is Attachment V to Exhibit Respondent 3. There had been a previous period of employment with the respondent in 2010.

[12] In September 2013 the applicant was promoted to the role of Sutherland Used Vehicle Manager. The Position Package for this role is Attachment T to Exhibit Respondent 3.

[13] The alleged events which led to the applicant's dismissal took place on 28 June 2014. The applicant denies those events entirely and says that the real reason for the dismissal was because there was not enough work for both himself and another employee, a Mr Cooke. He also says that Mr Cooke was favoured because he is a personal friend of Mr Pal. The respondent denies the applicant's allegations in this regard.

[14] I shall deal first with the material and evidence concerning the applicant's allegations and then proceed to consider the alleged events of 28 June and their aftermath.

[15] Mr Cooke was originally employed as the Senior New Vehicle Sales Manager. Mr Pal agreed that, in that role, Mr Cooke had not always met his monthly sales targets. His evidence is that the applicant had similarly not always met his targets. Mr Pal agreed that he is a personal friend of Mr Cooke.

[16] In March 2014 Mr Welsh announced a restructure within the organisation. An email concerning the restructure is Attachment A to Exhibit Respondent 1. It is the evidence of Mr Welsh that this restructure was in large part due to the departure of the applicant's manager, a Mr D Counsel.

[17] As part of that restructure, in April 2014 Mr Cooke was appointed to the position of Senior Used Car Manager at Sutherland. It is the evidence of both Mr Welsh and Mr Bressington that this was to assist the used car department, and the applicant, to meet their targets. Mr Bressington's evidence is that the department had not been making money for some months. His evidence is that he explained the situation to the applicant. Mr Bressington denies that Mr Cooke was brought in to replace the applicant.

[18] The applicant's evidence is that he didn't know why Mr Cooke had been brought into the used car department. At the time he informed his wife that his "days were numbered". The applicant agreed that his title, responsibilities, salary and commissions did not change as a result of Mr Cooke's arrival. He says that Mr Cooke's duties were the same as his own.

[19] The applicant's evidence is that Mr Cooke's arrival changed the dynamics in the department. He says that, from that time, he only attended one or two management meetings and was the only manager who did not receive any management emails. In cross-examination he agreed that the Finance Manager had also been "cut out". Four emails from Mr Welsh variously dated 16 and 23 June 2014 are at Exhibit Applicant 3.

[20] It is the evidence of Mr Welsh that, following the restructure, the only people who were invited to attend the monthly management meetings were those who reported directly to him. This resulted in about four employees who had previously attended such meetings no longer doing so. One of these was the applicant. Mr Welsh's evidence is that the applicant had never reported directly to him. Mr Cooke did not attend these meetings either.

[21] Mr Welsh noted that the email of 16 June in Exhibit Applicant 3 had included the applicant among the list of recipients. His evidence is that one of the other emails did not include the General Sales Manager who would usually be a recipient and another had been sent to an external person who looks after the phones. Mr Welsh says that there were clearly errors in the lists of recipients but noted that the emails were not formal documents and that he generally sent them to whoever he thought would be interested in the particular subject matter. Mr Welsh states that there was no intention on his part to exclude the applicant from the list.

[22] I now turn to consider the events of Saturday 28 June 2014. Both PM and Ms Venables worked in the office at the Sutherland site. Among other things they processed the paperwork resulting from the sale of vehicles. Neither usually worked on a Saturday but did so on this occasion as it was near the end of the financial year. It was usual for the various sales staff, including the applicant, to come into the office to provide the relevant paperwork, sometimes several times a day. The evidence is that the applicant sold five cars on 28 June although there is nothing before me to indicate when the sales were made. The applicant's evidence is that he generally sold around ten cars during a weekend.

[23] PM is in her late teens or early twenties. Her evidence is that the applicant came into the office sometime around the middle of the day on 28 June, stood near the desk next to hers and asked if she wanted some cocaine. Her evidence is that she didn't recall if he actually said the word "cocaine", however, he used a gesture of putting a finger at the side of his nose and turned his head sideways. PM indicated to him that she was interested.

[24] PM's evidence is that the applicant returned to the office later in the day, around 4pm. He asked her if she wanted to go out the back. Her evidence is that the applicant repeated the actions he had used earlier. She understood this meant "racking" or "snorting" some substance. PM and the applicant then left the office together and proceeded to the service area where they entered the applicant's work car. Her evidence is that they went past Mr Seal who was showing a vehicle to some customers, one of whom was inspecting underneath the car.

[25] PM says that the applicant drove his car around to the side of the service area and took "the coke" out of his top pocket. Her evidence is that the applicant sprinkled "some white powder" onto a folder and told her to make sure no-one was watching. The applicant crushed the powder with a card, rolled up "a note" and then he and PM each snorted a line of the powder. PM's evidence is that she assumed the powder was cocaine and knew it was some type of drug.

[26] PM says that the applicant then drove his car back to where it had previously been parked. She returned to the office where she told Ms Venables what had taken place including the feeling as the substance went down the back of her throat. PM's evidence is that she felt no other effect from the substance and later went home and to sleep. She says that this was a different effect from that which she had experienced when she had cocaine on a previous occasion.

[27] PM's evidence is that she had never previously seen the applicant take any drugs on the work premises and he had not previously offered any to her. Her evidence is that she had only been at the Sutherland site for about two to three months and this was the first private interaction she had with the applicant.

[28] Ms Venables' evidence is that the applicant came into the office sometime after lunch on 28 June. She says that he was standing near PM's desk when he and PM had a conversation. Ms Venables' evidence is that after a discussion about what each had planned for the weekend there was "some innuendo" about going outside and "doing a line" or "racking up". Ms Venables could not recall who initiated this part of the conversation.

[29] It is the evidence of Ms Venables that about an hour or so later PM told her that she was going outside. Her evidence is that PM left the office alone. PM returned about half an hour later and told Ms Venables what she had been doing, that she could feel it in her throat and that it felt "good". Ms Venables' evidence is that PM was not jumpy, loud or agitated when she returned.

[30] Mr Seal's evidence is that, at some point in the late afternoon on 28 June, he was in the service area locking up a vehicle he had sold. He saw the applicant and PM getting into a car which he understood to be the applicant's work vehicle. He also saw the car being driven out of the service area.

[31] Mr Seal agrees that he was recruited by Mr Cooke but denies that he was in his debt. He acknowledged that he received one or two commissions from vehicles which had been sold by another salesman who had since left, not the applicant. Mr Seal agreed that the respondent had assisted his son by attempting to rectify some mechanical problems on a vehicle whilst it was under warranty. His evidence is that this was because he was working for the dealership. He denied that it was for the purpose of pressuring him to provide a statement in these proceedings.

[32] As stated earlier, the applicant denies the allegations made about his activities on 28 June. He specifically denies taking any drugs at the workplace on that day, or any other day. He also denies inviting PM or anyone else to partake in drug taking. Further, he denies inviting PM into his car or driving anywhere with her.

[33] The applicant's evidence is that the only contact that he had with PM and Ms Venables on 28 June was buying lunch for them and the other office staff. He says that there had been a brief conversation about whether the office staff would be partying that night.

[34] On 29 June 2014 Mr Pal was contacted by a member of staff who informed him that Ms Venables had told her about a serious incident she had observed involving the offer of drugs to another employee by a manager, the applicant. Mr Pal spoke to Ms Venables about this on 1 July. He then informed Mr Welsh and a discussion was held with Ms Culkin-Maida about the best way to approach the matter. It was agreed that they should initially speak to PM to see if there was any basis to the allegation.

[35] A meeting was held with PM. It was recorded on Ms Culkin-Maida's mobile phone with PM's consent. The transcript of the interview is Annexure A to Exhibit Respondent 3, the recording is Annexure B and PM's signed statement arising out of the interview is Annexure C. During the meeting Mr Welsh told PM that she would not be dismissed, but would receive a warning and would be required to undergo further training on the relevant policies. PM confirmed the allegation about the applicant's activities on 28 June.

[36] Ms Culkin-Maida then held a meeting with Ms Venables. She recorded it on her mobile phone. The transcript of the interview is Annexure D to Exhibit Respondent 3, the recording is Annexure E and Ms Venables' signed statement is Annexure F. Ms Venables confirmed the allegations as far as she had observed the activities.

[37] A meeting was then held with the applicant. Also present were Mr Welsh, Mr Pal and Ms Culkin-Maida. The applicant's evidence is that Mr Cooke was also in attendance. Neither Mr Welsh nor Ms Culkin-Maida recalls Mr Cooke being there. Mr Pal's evidence is that he believed Mr Cooke stayed in the room with the applicant when the others left at the conclusion of the meeting.

[38] The meeting was recorded on Ms Culkin-Maida's mobile telephone. In Attachment B to Exhibit Applicant I, the applicant says that there had been no offer to record the meeting. In his oral testimony the applicant says that he didn't know if it had been recorded as it was all a "bit of a shock". Ms Culkin-Maida's evidence is that, at the start of the meeting, she told the participants that she was going to record it. The transcript of the meeting is at Annexure G to Exhibit Respondent 3 and the recording is Annexure H.

[39] Mr Welsh told the applicant that he was furious and very disappointed that there were allegations that the applicant had offered, supplied and taken drugs at the premises on the previous Saturday. Mr Welsh stated that, if the applicant agreed with those allegations, he would be dismissed or, if he denied them, there would be an investigation. The applicant denied that he had brought drugs to work, offered drugs to other employees or had taken drugs at work.

[40] Mr Welsh agreed that he could have been more eloquent and measured in the way in which he spoke to the applicant. He denied swearing about the applicant's family or anything else during the meeting as alleged by the applicant. I note that the recording does not contain any swearing. I also note that Mr Welsh's voice appears to become agitated as the meeting progressed although it is initially calm.

[41] The applicant was then directed to take paid leave while an investigation was undertaken. It is Ms Culkin-Maida's evidence that she did not think the respondent could have required the applicant, or any employee, to submit to a drug test. She noted that the drug and alcohol policy in place at the time did not contain any such provision.

[42] On 3 July 2014 Ms Culkin-Maida was informed by Mr Pal that Mr Seal might have information about the events on 28 June. She then held a meeting with Mr Seal. The meeting was recorded on her mobile phone. The transcript of the meeting is Annexure I to Exhibit Respondent 3, the recording is Annexure J and Mr Seal's signed statement is Annexure K. The statement was not typed up or signed until 8 July. Mr Seal confirmed his observations of the applicant and PM driving off in the applicant's car on 28 June. Mr Seal also stated that the applicant had called to tell him of the allegations about the activities in the car.

[43] There was a telephone conversation between Ms Culkin-Maida and the applicant later on 3 July during which the applicant was asked to attend the work premises the following day for a further meeting. Ms Culkin-Maida informed him that he should bring a support person with him. The applicant attended the meeting on 4 July with his wife as his support person. Mr Pal and Ms Culkin-Maida attended on behalf of the respondent.

[44] Both Ms Culkin-Maida and the applicant's wife recorded the meeting. The transcript prepared by Ms Culkin-Maida is Annexure L to Exhibit Respondent 3 and the recording is Annexure M. The transcript prepared by Ms Young is Attachment B to Exhibit Applicant 1. The applicant's evidence is that his transcript is more accurate than that of the respondent.

[45] Mr Pal informed the applicant that the purpose of the meeting was to obtain the applicant's version of events on 28 June. Mr Pal put to the applicant that he had offered to, and taken drugs with, a female staff member on that day. The applicant noted that his solicitor had informed him that he had a duty to make a statement. The applicant stated that, regardless of such a duty, he emphatically denied that there had been drug use or any mention of drug use. Mr Pal stated that one employee had made the allegation and that two others had provided corroboration of parts of that allegation. The applicant repeated his denials and stated that the allegations had been fabricated. The applicant also put forward concerns that he been threatened by another member of the staff.

[46] Mr Pal informed the applicant that the issue was serious and the respondent needed to seek advice. He suggested that the applicant remain on paid leave and that it would be preferable if the applicant didn't contact any of his work colleagues while the investigation was proceeding.

[47] The transcript concludes at the point when the applicant and his wife leave the meeting. It appears that the phone was inadvertently left recording. When Annexure M was played during proceedings Ms Culkin-Maida is heard telling Mr Pal that she thinks the applicant is lying. It is Ms Culkin-Maida's evidence that there was no discussion about dismissal at that time and, in any event, that was Mr Welsh's decision.

[48] A meeting was held on 9 July 2014 with PM. Ms Culkin-Maida and Mr Cooke were also present. The transcript of the interview is Annexure N to Exhibit Respondent 3, the recording is Annexure O and PM's signed statement is Annexure P. In essence PM confirmed her earlier allegations of what had taken place on 28 June.

[49] On 11 July 2014 Ms Culkin-Maida telephoned the applicant and requested that he attend a meeting on 14 July. The applicant attended with his wife as a support person. Mr Pal, Mr Cooke and Ms Culkin-Maida were all present. The meeting was recorded by Ms Culkin-Maida and by Ms Young. The transcripts are respectively Q to Exhibit Respondent 3 and Attachment C to Exhibit Applicant 1. The recording of the former is Annexure R to Exhibit Respondent 3.

[50] Mr Pal informed the applicant that the investigation had now been completed. He also informed the applicant that his employment was being terminated with immediate effect. The reason given for the dismissal both in the meeting and in the letter of termination, Annexure A to Exhibit Respondent 4, was gross professional misconduct relating to offering to supply and the use of drugs at the work premises on 28 June.

[51] The applicant received payment in lieu of notice although there was some dispute about the correct amount. I understand that has now been rectified. It appears that there is still an issue between the parties as to an amount of commission outstanding.

[52] Although Mr Pal was the person who informed the applicant of the dismissal, the evidence is that the decision was made by Mr Welsh. It is Mr Welsh's evidence that the dismissal had nothing to do with anything other than the events that took place on 28 June. He testified that he relied on what he had heard from PM and the transcripts of the meetings with Ms Venables and Mr Seal. Mr Welsh also testified that, until the events of 28 June, he had considered the applicant to be a valued member of the team and had no intention of getting rid of him.

[53] At all relevant times the respondent had a Drug and Alcohol Policy. The policy is contained in the Employee Handbook, Annexure W to Exhibit Respondent 3. Among other things the policy includes a statement that employees are not permitted to consume alcohol or any illegal substance, which may include marijuana, opiates or amphetamines, during working hours or on the premises at anytime. It prohibits the presence of such substances on the premises. In addition it prohibits employees being on the premises if under the influence of alcohol or any illegal substance. The policy also provides that company vehicles are not to be driven by anyone under the influence of alcohol or any illegal drug.

[54] The policy provides that any breach may result in disciplinary action including summary dismissal. The applicant's evidence is that he was aware of the policy. He agreed that consumption of an illegal substance at the work premises was unacceptable and a valid reason for dismissal.

[55] The applicant was not told that the drug which he was alleged to have offered and consumed on 28 June was cocaine. The evidence of Ms Culkin-Maida is that it did not occur to her to tell the applicant the specific drug named in the allegations.

[56] It is the applicant's evidence that he did not discover that the allegations related to cocaine until sometime after his dismissal. On 1 August 2014 he had a urine test. The result is at Attachment D to Exhibit Applicant 1. It shows negative for "cocaine metabolites" but positive for "cannabis metabolites". The applicant's evidence is that he has smoked marijuana three or four times a week since his mid-teens and uses it as a relaxant at the end of a day. He says that he wasn't under the influence of marijuana when he was at work and never used the drug at or prior to work.

[57] The evidence of Mr Mercouris is as to the effects of cocaine. He says that the user experiences feelings of euphoria, an increased sense of energy and alertness and an elevated mood. The user's speech becomes more excited and exuberant. Mr Mercouris says that the effects are difficult to identify and would only be noted by someone who is familiar with the user's usual personality.

[58] A written outline of submissions on behalf of the applicant was provided prior to the hearing. That outline refers to and adopts the contents of the application. Mr McArdle also made oral submissions.

[59] Mr McArdle referred to discrepancies and conflicts in the evidence as to the applicant's alleged activities on 28 June and the serious nature of those allegations. Mr McArdle submitted that the evidence demonstrated that the applicant was a person of worth who had been dismissed for alleged actions which amounted to the commission of a crime. The applicant had been stigmatised by the allegations.

[60] Mr McArdle referred to a judgement of the Full Federal Court of Australia in Vergara v Ewin [2014] FCAFC 100 @ paras 21-29 and to a judgement of the High Court of Australia in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449 @ 449 and 450. He also referred to the decision of a Full Bench in Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 and, in particular, to the summary of relevant authorities at pages 10 to 14 thereof. Mr McArdle submitted that the question to be determined is whether, on the balance of probabilities, the applicant committed the acts which formed the basis of the dismissal.

[61] Mr McArdle submitted that there had been no misconduct by the applicant. In this regard he referred to the decision of Pietraszek v Transpacific Industries Pty Ltd T/A Transpacific Cleanaway [2011] FWA 3698 @ pars 92-94. Mr McArdle also relied upon the Full Bench decision in Rode v Burwood Mitsubishi [Print R4471] @ paras 16-19 and 24 and to the analysis therein of the meaning of valid reason. He submitted that there was no valid reason for the applicant's dismissal.

[62] Mr McArdle submitted that Mr Welsh was wrong in his conclusion that the applicant had engaged in the alleged activities. This had caused him to punish the applicant for something the applicant had not done. Mr McArdle submitted that Mr Welsh had been motivated by anger and this had led to lapses in procedure and a wrong conclusion. Mr McArdle accepted that different approaches could be taken towards employees of differing levels of experience. Nevertheless, the approach adopted here had been incorrect.

[63] Mr McArdle submitted that there is a "large degree of onus" on the respondent to establish that the alleged misconduct took place. He noted that there had been consistent evidence from the applicant that he had not acted as alleged. Mr McArdle also noted that the respondent's witnesses had agreed that such actions would have been out of character for the applicant. Further, the fact that the applicant had a drug test indicated the strength of his belief in his innocence. Mr McArdle also submitted that the fact the applicant had sold five cars on the day of the alleged misconduct suggested he had not been under the influence of any drugs.

[64] Mr McArdle referred to the Full Bench decision in King v Freshmore (Vic) Pty Ltd [Print S4213] @ paras 24 and 28 (King) and the need for the Tribunal to determine for itself whether the misconduct had occurred. He also referred to the decision of Melouney v ACM Group Ltd [2012] FWA 9386 @ para 40 (Melouney). In addition Mr McArdle relied upon the decision of Barber v Commonwealth of Australia as represented by the Department of Parliamentary Services [2011] FWA 4092 @ para as 93 as to the process by which the necessary degree of satisfaction is reached in these matters.

[65] Mr McArdle submitted that the dismissal of the applicant might have really been about performance or only requiring one person to do the role of used car manager. He submitted that the respondent had seized upon the opportunity to rid itself of an extra employee for the benefit of Mr Pal's friend, Mr Cooke.

[66] It was submitted that, based on the evidence of the applicant and Mr Pal, it should be assumed that Mr Cooke had been at the meeting with the applicant on 1 July. Mr McArdle submitted that a "Jones v Dunkel" inference should be drawn from the respondent's failure to call Mr Cooke to give evidence so that he could be cross-examined about the contention that the applicant had been dismissed for Mr Cooke's benefit.

[67] Mr McArdle submitted that the applicant had not been given procedural fairness in the process leading up to the dismissal. There had been prejudgement of the applicant's guilt by Mr Welsh who had put the allegations to the applicant in an angry manner. The applicant had been given no proper opportunity to bring a support person to the interview on 1 July. A further unfairness arose from the fact that the applicant had not been informed of the identity of his accusers and had been denied access to their statements until these proceedings.

[68] Mr McArdle submitted that reinstatement would not be an appropriate remedy because of the applicant's seniority. He submitted that the applicant should be awarded the maximum amount of compensation.

[69] A written outline of submissions on behalf of the respondent was provided prior to the hearing. That outline adopted the response filed by Janart in its Form F3. Ms Dinnen also made oral submissions.

[70] The respondent submits that there was a valid reason for the applicant's dismissal. That reason was his misconduct in offering to supply and the use of drugs at the workplace on 28 June 2014. The respondent rejects the applicant's position that there was any other reason for the dismissal and, in particular, denies that it had anything to do with Mr Cooke or his continued employment.

[71] Ms Dinnen submitted that the evidence had established that the applicant had been informed of the restructure in March 2014. The evidence also established that the applicant had not been deliberately excluded from receiving emails. Further, his exclusion from management meetings was due only to the restructure and nothing else.

[72] Ms Dinnen accepted that the respondent had not informed the applicant, either in the interviews held with him or in the letter of termination, that the allegation related to a specific drug. She noted however that the applicant had consistently denied using any drugs at all at the work premises. Ms Dinnen submitted that it is necessary only for a determination that the applicant had been engaged in the use of drugs of some description on the relevant day.

[73] Ms Dinnen submitted that there is not necessarily any inconsistency between the evidence of PM and Ms Venables as to whether the applicant was present in the office at the time PM left, allegedly to participate in the taking of drugs. She submitted that, in any event, this is not an issue which is central to or needs to be determined in this matter.

[74] The respondent rejects the applicant's suggestion that there was a conspiracy whereby several of its employees colluded to make false allegations against the applicant in order to provide the respondent with a reason to dismiss him. Ms Dinnen submitted that suggestions that these employees had ulterior motives for making the allegations had been vaguely put to the respective witnesses however had not been bourne out by the evidence.

[75] Ms Dinnen submitted that no adverse inference should be drawn from the respondent's failure to call Mr Cooke to give evidence. She submitted that Mr Cooke was not called because he had nothing of any utility to add to the matter. Ms Dinnen noted that it had been open to the applicant to have summonsed Mr Cooke to appear and suggested that if any adverse inference was to be drawn it should be against the applicant.

[76] The respondent submits that the applicant's drug test should be disregarded. It provided an explanation of the testing, Annexure A to the outline of submissions, which confirms that the presence of cocaine is not detectable in urine after a period of 2-5 days.

[77] The respondent submits that the applicant was given procedural fairness. He had been informed of the reason for dismissal and had been afforded an opportunity to respond. The respondent rejects the applicant's submission that Mr Welsh had prejudged the situation and had decided on 1 July that the applicant was guilty of the alleged misconduct. The respondent submits that everything it did after the applicant's initial denial of the allegations was aimed at properly investigating the matter. Ms Dinnen submitted that in view of the serious nature of the allegations and fact that the applicant occupied a senior role in the organisation there was no reason for a long delay before the first meeting.

[78] The respondent accepts that it did not inform the applicant of the names of the persons who had made the allegations against him nor was he given a copy of their statements. The respondent submits that the applicant did not request that information. It also relies on the decision in Melouney for the proposition that, although a failure to give witness statements may amount to a denial of procedural fairness in some instances, it is of lesser importance where allegations of misconduct are completely denied.

[79] The respondent submits that there was no refusal to allow the applicant to have a support person at the meeting on 1 July. Ms Dinnen noted that the applicant had not requested the presence of such a person. The respondent also submits that there is no requirement that an employer wait for a support person when there is a serious allegation to be considered. It notes that the applicant had a support person in the two subsequent meetings. It also notes that the applicant had suffered no disadvantage as his position did not change over the three meetings.

[80] Ms Dinnen noted that the respondent had no issue with the applicant's performance. She submitted that the respondent was a large employer with a dedicated human resources manager and these factors impacted on the process which had been followed.

[81] Ms Dinnen rejected the applicant's submission that he was a person of good character and pointed to his admitted regular drug use. She submitted that his involvement in charity work did not establish that he was of good character.

[82] The respondent submits that the applicant's claim should be dismissed.

SUBMISSIONS IN REPLY ON BEHALF OF THE APPLICANT

[83] In his submissions in reply Mr McArdle made the following points:

● He reiterated that there had been a denial of procedural fairness. Mr Welsh had prejudged the applicant as soon as he had heard the allegations against the applicant. He had given the applicant the choice of leaving or having the matter investigated. Mr McArdle submitted that there was no real investigation as the decision to dismiss had already been made;

● The failure to provide the applicant with the statements of allegation against him was a further example of procedural unfairness;

● Mr McArdle refuted the suggestion that the applicant's case had shifted or that contentions had been made without a proper factual basis;

● Mr McArdle reiterated that the inconsistencies in the evidence of the respondent's witnesses supported the applicant's contention that the alleged conduct just had not happened.

[84] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. Those matters are:

"(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."

[85] As will have been apparent from paragraph 1 of this decision the application was made within the period required in subsection 394(2). There is no dispute that the applicant is a person protected from unfair dismissal. Paragraphs (c) and (d) of section 396 have no relevance in the present matter.

[86] Section 385 provides that a person has been unfairly dismissed if 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."

[87] Paragraph (a) is clearly met in relation to the applicant. Paragraphs (c) and (d) have no relevance. Consequently it is to paragraph (b) that my attention must be directed. In considering whether the dismissal of the applicant was harsh, unjust or unreasonable it is relevant to refer to the comments of McHugh and Gummow JJ in Byrne & Frew v Australian Airlines Pty Ltd (1995) 61 IR 32 @ 72:

"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."

[88] It is necessary to turn to section 387 which sets out the factors which must be taken into account by FWC in deciding whether a dismissal is harsh, unjust or unreasonable. Those factors are as follows:

"(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 FWC considers relevant."

[89] The first matter which must be taken into account is whether there was a valid reason for the dismissal. The meaning of valid reason has been the subject of much consideration by the Courts as well as by this Commission and its predecessors. There seems to be general acceptance of the often quoted words of Northrop J in Selvachandran v Peteron Plastics Ltd (1995) 62 IR 371 @373:

"In its context in s 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time 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. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must 'be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly, ...".

[90] The reasons relied on for the termination in this matter relate to the alleged misconduct of the applicant. In this regard I have to determine for myself whether the misconduct, or any part of it that is contested, took place and, if so, whether it amounted to a valid reason for the dismissal: King.

[91] The misconduct which is alleged in this matter is that the applicant offered to supply and used drugs on the work premises on 28 June 2014. As indicated earlier in the recitation of relevant facts and evidence, the applicant denies that this conduct occurred on that day or any other. There is a direct conflict between his evidence and, most particularly, that of PM.

[92] In this regard I prefer the evidence of PM. I found her to be a credible witness who gave clear, firm and responsive evidence. She provided an explanation for the only ulterior motive suggested of her, being an amount of money which she received proximate to the time she left the employ of the respondent.

[93] There is nothing in the evidence which establishes a reason, rational or otherwise, as to why PM would have invented her version of the events on 28 June. It is not suggested that there was any history of animosity between PM and the applicant. Indeed it needs to be remembered that PM was not the person who raised the allegations against the applicant as might have been expected if she had been trying to cause trouble for him or to gain attention for herself.

[94] I acknowledge that there are some inconsistencies in the evidence of PM, Ms Venables and Mr Seal however those are differences of detail which do not go to the heart of the matter.

[95] I accept that there is no medical evidence as to the exact nature of the substance which PM says was ingested by the applicant and herself. It may be that it was cocaine or some other illicit drug or indeed some innocuous material. I acknowledge PM's evidence as to the difference in the effects she felt on 28 June compared with some earlier occasion on which she had used cocaine.

[96] Nevertheless, I accept PM's evidence as to what happened on 28 June 2014. It follows from this that I find that on that day the applicant, a manager, offered to a more junior employee, PM, a substance which he led her to believe was cocaine and that he ingested that substance with her. He also drove his work vehicle after taking the substance, albeit for a very short distance.

[97] I consider that the applicant's actions in this regard amount to misconduct and provide a valid reason for his dismissal. In view of this finding there is no need to further consider the alternative reason for dismissal advanced by the applicant.

[98] However, for the sake of completeness it should be noted that I accept the evidence of Mr Bressington as to the reason for Mr Cooke's arrival at Sutherland and the fact that it was not to replace the applicant but to assist the profitability of the used car department. I also accept that Mr Bressington explained these matters to the applicant. Further, I accept Mr Welsh's evidence that the applicant was not being excluded from the management group.

[99] In my view, even if the respondent had been trying to replace the applicant, which I don't accept it was, it seems it would be rather farfetched to have done this by way of some conspiracy with three of its junior employees to make the allegations about the applicant's conduct rather than by means of a straightforward redundancy.

[100] I also wish to note I do not draw any adverse inference from the failure of either party to call Mr Cooke to give evidence.

[101] I now turn to consider what might be termed the "procedural fairness" factors in section 387, paragraphs (b), (c) and (d). I am satisfied that the applicant was informed of the allegations against him and then, the reasons for his dismissal. In the particular circumstances of this case the applicant was not disadvantaged by not knowing the names of those who had made allegations against him or by not being provided with copies of their statements. His case has been consistently one of total denial.

[102] I am also satisfied that the applicant was provided with an opportunity to respond. I agree that Mr Welsh could have put the allegations to the applicant in a more measured fashion during the meeting on 1 July. Nevertheless I accept that he had not prejudged the applicant at that point.

[103] Further, I am satisfied that the respondent did not unreasonably refuse to allow the applicant to have a support person at the meeting on 1 July. The fact that he was not invited to bring such a person as he was for the meetings on 4 and 14 July does not amount to an unreasonable refusal.

[104] Paragraph (e) of section 387 is not relevant as the applicant's dismissal was not related to his performance. I have had regard to paragraphs (f) and (g). The respondent is a medium sized employer with around 180 employees. It has some dedicated human resource management expertise in Ms Culkin-Maida. These factors were reflected in the procedures which were followed in effecting the dismissal. There are no other matters which I consider are of particular relevance under paragraph (h).

[105] In all of the circumstances of the case and having taken account of each of the factors in section 387 and my findings thereon. I have determined that the applicant's dismissal was not harsh, unjust or unreasonable. It follows from this determination that the dismissal was not unfair. The application is dismissed.

[106] It should be noted that, in deciding this matter, I have given consideration to the need to ensure that a "fair go all around" has been accorded to the applicant and the respondent as provided in sections 381(2) of the Act. .

Ms D. Dinnen of Counsel, with E. Steiner solicitor for Janart Holdings Pty Ltd trading as Stewart Automotive Group

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