1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Steven Guthrie
v
AJ & T Pulbrook Pty Ltd T/A Brook Motors
(U2015/13054)
COMMISSIONER SAUNDERS NEWCASTLE, 26 FEBRUARY 2016
Application for relief from unfair dismissal – small business employer.
[1] AJ & T Pulbrook Pty Ltd trading as Brook Motors (Brook Motors) operates a small
mechanical workshop in Mayfield, New South Wales. It also sells spare parts and accessories
for motor vehicles.
[2] Mr Anthony Pulbrook and Ms Toni Pulbrook are the sole directors and shareholders of
Brook Motors. They are both retired. Neither of them are employees of Brook Motors. One of
their sons, Mr Warren Pulbrook, is employed by Brook Motors in the position of Manager. He
is responsible for running the business.
[3] The applicant, Mr Steven Guthrie, was initially employed by Brook Motors on 17
February 2014 as a Mechanic. He later took on the duties of a Foreman and Assistant
Manager, together with his role as a Mechanic.1 He was dismissed on 18 September 2015.
[4] There is no dispute as to the following brief summary of events leading up to the
termination of Mr Guthrie’s employment with Brook Motors:
(a) Mr Guthrie had a dispute with a customer on 21 August 2015 in relation to the amount
the customer should be charged for the work undertaken by Mr Guthrie at Brook
Motors. Mr Warren Pulbrook and Mr Guthrie agree that the customer acted
unreasonably in refusing to make any payment for the work that had been undertaken
on his car;
(b) On 21 August 2015, Mr Guthrie poured water into the customer’s fuel tank before he
returned the car to the customer. Mr Guthrie says he did so because he extracted some
water from the fuel tank in the customer’s car when he was working on it and he was
simply returning the car to the customer in the same condition as it was2 when it
arrived in the Brook Motors’ workshop;
1 PN773-6; PN1496-8
2 Save for the replacement of oil which had been extracted from the customer’s car and disposed of by Mr Guthrie (PN633).
[2016] FWC 914 [Note: An appeal pursuant to s.604 (C2016/3043) was
lodged against this decision - refer to Full Bench decision dated 11 May
2016 [[2016] FWCFB 2859] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
http://www.fwc.gov.au/decisionssigned/html/2016FWCFB2859.htm
[2016] FWC 914
2
(c) Mr Warren Pulbrook was absent overseas at the time the incident took place on 21
August 2015. Mr Warren Pulbrook arrived back in Australia in early September 2015,
at which time he returned to work; and
(d) After Mr Warren Pulbrook’s return to work in early September 2015, he undertook an
investigation into the incident concerning Mr Guthrie’s dispute with the customer and
then dismissed Mr Guthrie on 18 September 2015.
[5] Mr Guthrie contends that his dismissal from Brook Motors was harsh, unjust and
unreasonable. Brook Motors denies that allegation, and says that Mr Guthrie’s dismissal was
consistent with the Small Business Fair Dismissal Code (the Code).
[6] After taking into account the views of the parties, I decided to deal with the matter by
way of a determinative conference.
Initial matters to be considered before merits
[7] Section 396 of the Fair Work Act 2009 (Cth) (the Act) requires me to decide four
matters before I consider the merits of Mr Guthrie’s application. I am satisfied on the
evidence that:
(a) Mr Guthrie’s application was made within the period required by section 394(2) of the
Act;
(b) Mr Guthrie was a person protected from unfair dismissal because he completed a
period of employment with Brook Motors of at least 12 months prior to his dismissal,
he was covered by the Vehicle Manufacturing, Repair, Services and Retail Award
2010 during his employment with Brook Motors, and his earnings from Brook Motors
were less than the high income threshold (s.382 of the Act);
(c) Brook Motors was, at the relevant time, a “small business employer” as defined in
section 23 of the Act and Mr Guthrie’s dismissal was consistent with the Code. My
reasoning in relation to these issues is set out in paragraphs [9] to [54] below; and
(d) Mr Guthrie’s dismissal was not a case of genuine redundancy.
[8] I am also satisfied on the evidence that Mr Guthrie was dismissed by Brook Motors.
Small Business Fair Dismissal Code
[9] Section 388 of the Act provides:
“388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair
Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal
Code if:
[2016] FWC 914
3
(a) immediately before the time of the dismissal or at the time the person was
given notice of the dismissal (whichever happened first), the person’s
employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in
relation to the dismissal.”
[10] Section 23 of the Act provides a definition of a “small business employer” for the
purpose of the Act. Relevantly, section 23(1) provides that “A national system employer is a
small business employer at a particular time if the employer employs fewer than 15
employees at that time”.
[11] For the purpose of calculating a number of employees employed by the employer at a
particular time:
(a) all employees employed by the employer at the time (including the dismissed
employee who has made the unfair dismissal application) are to be counted subject to
the caveat that a casual employee is not to be counted unless, at the time, he or she has
been employed by the employer on a regular and systematic basis (ss.23(2) & (4) of
the Act); and
(b) associated entities are taken to be one entity (s.23(2) of the Act). The expression
associated entity has the meaning given by section 50AAA of the Corporations Act
2001 (Cth) (Corporations Act).
[12] I am satisfied on the evidence and there is no dispute that, at the time of Mr Guthrie’s
dismissal, Brook Motors employed six employees3 - Mr Guthrie
(Mechanic/Foreman/Assistant Manager), Mr Warren Pulbrook (Manager), Mr David Pearce
(Mechanic), Mr Harry Mullen (Junior Assistant in the Workshop and Spare Parts
Department), Mr Darren Pulbrook (Spare Parts Manager), and Mr Paul Williams (Assistant
Parts and Service Manager). Each of these persons gave evidence before the Fair Work
Commission (Commission), as did Mr Anthony Pulbrook and Ms Toni Pulbrook.
[13] I am satisfied on the evidence that Brook Motors did not, immediately before the time
of Mr Guthrie’s dismissal, have any associated entities.4
[14] For the reasons set out in the previous five paragraphs, I am satisfied that, immediately
before the time of Mr Guthrie’s dismissal, Brook Motors was a small business employer
within the meaning of the Act.
[15] The Code declared by the Minister pursuant to section 388(1) of the Act is in the
following terms:
“Summary dismissal
“It is fair for an employer to dismiss an employee without notice or warning when the
employer believes on reasonable grounds that the employee’s conduct is sufficiently
3 PN264-5
4 PN255-332; PN1538-1579; PN1602; PN1771
[2016] FWC 914
4
serious to justify immediate dismissal. Serious misconduct includes theft, fraud,
violence and serious breaches of occupational health and safety procedures. For a
dismissal to be deemed fair it is sufficient, though not essential, that an allegation of
theft, fraud or violence be reported to the police. Of course, the employer must have
reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he
or she is at risk of being dismissed. The reason must be a valid reason based on the
employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks
being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to
respond to the warning and give the employee a reasonable chance to rectify the
problem, having regard to the employee’s response. Rectifying the problem might
involve the employer providing additional training and ensuring the employee knows
the employer’s job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the
employee can have another person present to assist. However, the other person cannot
be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with
the Code if the employee makes a claim for unfair dismissal to Fair Work Australia,
including evidence that a warning has been given (except in cases of summary
dismissal). Evidence may include a completed checklist, copies of written warning(s),
a statement of termination or signed witness statements.”
[16] In Pinawin v Domingo5, the Full Bench considered whether, in the context of a
summary dismissal under the Code, the Commission had to be satisfied that the serious
misconduct which was the basis for the dismissal actually occurred:
“[29] … There are two steps in the process of determining whether this aspect of the
Small Business Fair Dismissal Code is satisfied. First, there needs to be a
consideration whether, at the time of dismissal, the employer held a belief that the
employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly
it is necessary to consider whether that belief was based on reasonable grounds. The
second element incorporates the concept that the employer has carried out a reasonable
investigation into the matter. It is not necessary to determine whether the employer
was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers
may approach the matter differently and form different conclusions, perhaps giving
5 [2012] FWAFB 1359
[2016] FWC 914
5
more benefit of any doubt, but still be acting reasonably. The legislation requires a
consideration of whether the particular employer, in determining its course of action in
relation to the employee at the time of dismissal, carried out a reasonable
investigation, and reached a reasonable conclusion in all the circumstances. The
circumstances include the experience and resources of the small business employer
concerned.
…
[38] Normally in order to hold a belief on reasonable grounds it will be necessary to
have a discussion with the employee about the perceived serious misconduct and pay
regard to the explanations and views given by the employee. We are concerned in this
case that no discussions took place about the implications of Mr Domingo’s conduct
for his future employment. However this is a very unusual case. The employer was
very small. The owners knew Mr Domingo well …”
[17] Another Full Bench of the Commission recently examined the summary dismissal part
of the Code in detail in Ryman v Thrash Pty Ltd6 and concluded as follows:
“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we
consider that the “Summary dismissal” section of the Code operates the following
way:
(1) If a small business employer has dismissed an employee without notice – that is,
with immediate effect – on the ground that the employee has committed serious
misconduct that falls within the definition in reg.1.07, then it is necessary for the
Commission to consider whether the dismissal was consistent with the “Summary
dismissal” section of the Code. All other types of dismissals by small business
employers are to be considered under the “Other dismissal” section of the Code.
(2) In assessing whether the “Summary dismissal” section of the Code was complied
with, it is necessary to determine first whether the employer genuinely held a
belief that the employee’s conduct was sufficiently serious to justify immediate
dismissal, and second whether the employer’s belief was, objectivity speaking,
based on reasonable grounds. Whether the employer has carried out a reasonable
investigation into the matter will be relevant to the second element.”
Reasons for Mr Guthrie’s dismissal
[18] At the commencement of the determinative conference Mr Warren Pulbrook informed
the Commission that he would rely on the following four reasons for termination in relation to
Mr Guthrie’s dismissal:
(a) First, Mr Guthrie poured water into a customer’s fuel tank on 21 August 2015
following a dispute with the customer in relation to the amount to be charged to the
customer for work undertaken on the customer’s car;7
6 [2015] FWCFB 5264
7 PN7-11
[2016] FWC 914
6
(b) Secondly, the manner in which Mr Guthrie allegedly communicated with staff and
customers over a period of time. In particular, Mr Warren Pulbrook asserts that, from
time to time, Mr Guthrie belittled the performance of other staff and upset customers
by under–quoting their work and talking to them in an unprofessional manner;8
(c) Thirdly, Mr Warren Pulbrook alleges that Mr Guthrie purchased a car from a customer
in about June 2015 and changed the speedometer reading on the car before selling it to
a third party.9 Although Mr Guthrie undertook some work on the car in the workshop
of Brook Motors, there is no dispute that he sold the car privately (and away from the
workplace) to a third party; and
(d) Fourthly, Mr Warren Pulbrook alleges that Mr Guthrie failed to properly supervise
another employee, Mr Mullen, in the workplace.10
[19] Mr Warren Pulbrook did not provide Mr Guthrie with any details as to the reason(s)
for his dismissal at the time he was dismissed.
[20] The reasons for dismissal included in the Employer’s Response to Unfair Dismissal
Application (Form F3) differ in some respects to the reasons for termination relied on by
Brook Motors at the determinative conference, as set out in paragraph [18] above.
Was Mr Guthrie dismissed without notice?
[21] The parties agree that Mr Guthrie was notified of his dismissal on 18 September 2015
and his dismissal took effect on that day.11
[22] The Employment Separation Certificate states that Mr Guthrie’s employment with
Brook Motors ceased on 18 September 2015 on the ground of “misconduct as an employee”
and he received a payment of two weeks’ salary in lieu of notice.12 There is no dispute that Mr
Guthrie received such a payment from Brook Motors after his dismissal.
[23] The fact that Mr Guthrie was paid an amount in lieu of notice does not alter the
position that his dismissal occurred with immediate effect on 18 September 2015 – that is,
without the provision of any actual notice.13
[24] The witness statements of, and oral evidence given by, Mr Warren Pulbrook and Mr
Guthrie also support a conclusion that Mr Guthrie was dismissed without notice on 18
September 2015. That evidence is summarised in the following six paragraphs.
[25] On 18 September 2015, Mr Warren Pulbrook told Mr Guthrie in his office that he was
“doing my head in”.14 Mr Warren Pulbrook also told Mr Guthrie that “it wasn’t working out”,
8 PN13-15
9 PN17-24
10 PN51-53
11 Applicant’s Unfair Dismissal Application at [1.2]-[1.3] and Respondent’s Employer Response to Unfair Dismissal
Application at [1.3]-[1.4]
12 Ex A11
13 Ryman v Thrash at [42]
14 PN950-1
[2016] FWC 914
7
he “couldn’t handle it anymore”, and he had “had enough”.15 Mr Warren Pulbrook then asked
Mr Guthrie to give back his fuel card and the key to the business in his possession, which he
did.16 There was no other person present during this discussion, and I am satisfied that Mr
Guthrie did not request that a support person be present.17
[26] Mr Warren Pulbrook gave evidence that he “needed Steve out of there straight away. I
didn’t trust him anymore once we had made the decision” to dismiss Mr Guthrie.18
[27] Mr Guthrie asserts that Mr Warren Pulbrook offered him three days’ pay and a bonus
during the termination meeting on 18 September 2015.19 Mr Warren Pulbrook denies this
allegation20 and instead says that he told Mr Guthrie that he was entitled to two weeks’ notice,
but rather than him work out his two weeks’ notice, he could “go now and I will pay him until
the end of the pay week, which was the Wednesday.”.21 I do not need to resolve this factual
controversy because it does not, in light of the events which transpired, have any impact on
my conclusion that Mr Guthrie was, in fact, dismissed with immediate effect on 18 September
2015.
[28] After the discussion in Mr Warren Pulbrook’s office on 18 September 2015, Mr
Guthrie went back downstairs to finish off the work he was doing in the workshop. Mr
Warren Pulbrook went downstairs and informed Mr Guthrie that he didn’t have to stay until
the end of the day, but Mr Guthrie told Mr Warren Pulbrook that he was happy to finish off
the work that he was doing on that day. Mr Guthrie continued to work until the end of the
day.22
[29] Later on 18 September 2015, Mr Guthrie’s partner, Ms Karen Carcary, attended the
workshop, handed a separation certificate to Mr Warren Pulbrook, and stated that he had to
give Mr Guthrie either two weeks’ notice or two weeks’ pay in lieu of notice.23 Mr Guthrie
says that he informed Mr Warren Pulbrook on the afternoon of Friday, 18 September 2015
that he was happy to work out the two weeks’ notice.24 Mr Warren Pulbrook told Mr Guthrie
there was no need for him to work any period of notice, and he did not do so.25 Mr Guthrie’s
last day of work for Brook Motors was 18 September 2015.
15 PN963-7
16 PN958-9; Ex A1 at [5]-[6]
17 Mr Guthrie asserted for the first time in final submissions that he asked for a support person to be present. I do not accept
his evidence in this regard because (a) his initial response to the question about whether he asked for a support person
was “I didn’t have the opportunity to”, (b) he then contradicted that evidence by asserting that he asked if Karen could be
present as his support person, and (c) he did not make mention of this issue in his witness statement or at any earlier time
in the determinative conference (PN3450-3464)
18 PN1275
19 PN1278
20 PN1278-83
21 PN1299
22 Ex A1 at [9]-[10]
23 PN1284-1288
24 Ex A1 at [13]
25 Ex A1 at [14]; PN1275
[2016] FWC 914
8
[30] Mr Guthrie attended the workshop of Brook Motors on Monday, 21 September 2015,
but only for the purpose of collecting his tools.26 Mr Guthrie subsequently received two
weeks’ salary in lieu of notice, together with his outstanding leave entitlements, from Brook
Motors.
[31] For the reasons set out in paragraphs [21] to [30] above, I am satisfied that, on 18
September 2015, Brook Motors dismissed Mr Guthrie without notice – that is, with
immediate effect – on the ground that Mr Guthrie had committed serious misconduct. I will
address below the issue of whether the misconduct alleged against Mr Guthrie falls within the
definition of “serious misconduct” in regulation 1.07 of the Fair Work Regulations 2009
(Cth).
Did Brook Motors believe that Mr Guthrie had engaged in conduct sufficiently serious to
justify immediate dismissal?
[32] Whether the employer genuinely held the belief that the employee’s conduct justified
the immediate dismissal is a question of fact.27 A separation certificate provided to a
dismissed employee may be relevant to that question, but in many cases other evidence will
need to be considered in order to make a proper finding of fact in relation to this issue.28
[33] Although Mr Anthony Pulbrook and Ms Toni Pulbrook were the sole directors and
shareholders of Brook Motors at the time of Mr Guthrie’s dismissal, they each made it plain
in their evidence that Mr Warren Pulbrook, in his capacity as Manager of the Brook Motors
business, was the sole person who had authority within the business to decide whether an
employee such as Mr Guthrie should be dismissed or not.29
[34] By reason of section 793(2) of the Act, it follows that the state of mind of Mr Warren
Pulbrook in deciding to dismiss Mr Guthrie can be attributed to Brook Motors.30
[35] The Employment Separation Certificate completed by Mr Warren Pulbrook states that:
(a) “misconduct as an employee” is the “reason for separation”;
(b) “conduct towards staff and other employees. Conduct towards our business” are the
“reason and/or further details” for termination; and
(c) Mr Guthrie will be paid two weeks’ salary in lieu of notice.
[36] Mr Warren Pulbrook gave evidence that he was aware before he dismissed Mr Guthrie
that he was entitled to dismiss him effective immediately and not pay him any notice if he
dismissed him for “malicious misconduct”.31 This evidence, together with the fact that Mr
Warren Pulbrook told Mr Guthrie that he was entitled to two weeks’ salary in lieu of notice
and he made such a payment to Mr Guthrie, tends to suggest that Mr Warren Pulbrook did not
26 Ex A1 at [15]
27 Ryman v Thrash at [43]
28 Ryman v Thrash at [46]
29 PN1269; PN1601; PN1770
30 Ryman v Thrash at [43] and footnote 15
31 PN1090
[2016] FWC 914
9
believe that Mr Guthrie had engaged in conduct sufficiently serious to justify immediate
dismissal. However, this evidence needs to be weighed against the evidence given by Mr
Warren Pulbrook as summarised in paragraphs [25] to [29] above, in addition to Mr Warren
Pulbrook’s evidence as to the reasons for his actions. In particular, Mr Warren Pulbrook gave
evidence that he believed he had the right to dismiss Mr Guthrie without notice on the basis of
his conduct in pouring water into the customer’s fuel tank32, but he decided to pay Mr Guthrie
two weeks’ salary in lieu of notice for the following reasons:
“My reasons for not going down this path was simple: at the end of the day, even
though Steve had done the wrong thing, I knew that this would go against his record
and that at the end of the day I knew with the way Steve reacts with people that I was
far better to get him to go quietly. So that’s – you know, it’s in my statement anyway,
what I did. This is the reasoning I had. I didn’t want any more fights. I’d had enough
of blues. I’d had enough of all the disruption of the workplace. I knew that if I
challenged you with wilful and malicious conduct we would end up here.33
…
I just thought you would get a job straightaway and it would all go away. That's the
best way to explain it. That's why I gave you the extra weeks, even though I knew I
didn't have to.”34
[37] Similarly, Mr Warren Pulbrook said in his witness statement that he did not tell Mr
Guthrie he was being dismissed for wilful and malicious misconduct because he knew it
would “go against his record of employment and make it very hard for Steve to get a job …
So I finished Steve’s employment and left this part out.”35
[38] Mr Warren Pulbrook gave evidence that Mr Guthrie had betrayed his trust with his
conduct in pouring water into the customer’s fuel tank and, as a result, he had no choice but to
dismiss Mr Guthrie.36 Mr Warren Pulbrook explained his thought process in the following
way at the conclusion of his oral evidence:37
“I just couldn’t trust him anymore after that. I really thought to myself if that’s what
he’ll do to a customer – someone he meets once – what would he do to, you know, the
business and, you know, the family and everything else. I think I had justified concerns
on those grounds. That’s all I can say.”
[39] I find that the evidence given by Mr Warren Pulbrook concerning his decision to
dismiss Mr Guthrie and his reasons for paying Mr Guthrie two weeks’ salary in lieu of notice
instead of dismissing him without such a payment, as summarised above, was truthful and
reliable. The evidence was given by Mr Warren Pulbrook in a direct and frank manner and, in
my view, revealed his true beliefs at the time of Mr Guthrie’s dismissal, which beliefs
continued up to the time of the determinative conference. Based on this evidence by Mr
32 PN1016; PN1131-4; Ex R1 at [7]
33 PN1090
34 PN1267
35 Ex R1 at [2]
36 Ex R1 at [7]; PN985
37 PN1587
[2016] FWC 914
10
Warren Pulbrook, I am satisfied that, as the controlling mind of Brook Motors, he genuinely
believed that Mr Guthrie had engaged in conduct sufficiently serious to justify immediate
dismissal. In particular, Mr Warren Pulbrook believed that Mr Guthrie engaged in a wilful
and malicious act by pouring water into the customer’s fuel tank and, as a result of that
conduct, Mr Warren Pulbrook no longer had any trust or confidence in Mr Guthrie.
[40] Mr Guthrie asserts that he was dismissed so that Brook Motors could employee a
replacement mechanic (who commenced employment on the Monday following Mr Guthrie’s
dismissal) and pay him a lower wage. Mr Warren Pulbrook rejects that assertion and I accept
his evidence in that regard based on my assessment that he gave truthful and reliable evidence
to the effect that he found out during his investigation that Mr Guthrie had poured water into
the fuel tank of a customer’s car and, in Mr Warren Pulbrook’s mind, that meant Mr Guthrie
could no longer be trusted and his employment had to come to an immediate end.
[41] At the time of Mr Guthrie’s dismissal, I am satisfied that Mr Warren Pulbrook did not
believe that Mr Guthrie’s conduct the subject of the other three reasons for termination relied
on by Mr Warren Pulbrook at the determinate conference38 justified his immediate dismissal.
So much is clear from the fact that such conduct occurred some time prior to the dismissal,
Mr Warren Pulbrook was aware of the conduct at the time it occurred, and Mr Warren
Pulbrook did not take any action to dismiss Mr Guthrie or provide him with a written warning
in relation to such conduct. Mr Warren Pulbrook gave evidence that he would not have
dismissed Mr Guthrie if he had not engaged in the conduct on 21 August 2015.39
Was Brook Motors’ belief based on reasonable grounds?
[42] In my view, an employer’s belief that an employee engaged in conduct sufficiently
serious to justify immediate dismissal will not be based on reasonable grounds if the
employee’s conduct the subject of the belief does not meet the definition of “serious
misconduct” in regulation 1.07.
[43] In the present case, I am of the view that conduct by a mechanic in pouring water into
a customer’s fuel tank following a dispute with the customer over the amount to be charged to
the customer satisfies the definition of “serious misconduct” in regulation 1.07, in that such
conduct:
(a) is wilful and deliberate behaviour by an employee that is inconsistent with the
continuation of the contract of employment (reg 1.07(2)(a)). In particular, such
conduct is inconsistent with the employee’s implied duty to co-operate, as well as the
employee’s implied duty of fidelity and good faith; and
(b) causes serious and imminent risk to the reputation and (potentially) profitability40 of
the employer’s business. It is important to note that it is the risk to reputation and
profitability which must be considered, not whether the reputation or profitability of
the employer’s business was in fact damaged. In my view, conduct by a mechanic in
pouring water into a customer’s fuel tank gives rise to a serious and imminent risk that
the customer concerned and other customers, if they become aware of the conduct, are
38 See subparagraphs [18(b), (c) and (d)] above
39 PN3595-6. See also PN1016 & PN3513
40 Depending on any subsequent legal claim arising from the conduct and the outcome of such a claim
[2016] FWC 914
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likely to take their car to an alternative mechanic in the future. This constitutes a
serious and imminent risk to the reputation and profitability of the employer’s
business. The risk arises, in my view, whether or not the customer directed the
mechanic to return his or her car to the state it was in when the car was first delivered
to the mechanic. Mr Guthrie made such an assertion in this case. Any mechanic acting
reasonably in those circumstances would, in my view, either (i) have an express
discussion with the customer to the effect that following the customer’s direction
literally would result in water being poured into the fuel tank to replace water taken
out during the repair work and checking whether the customer intended for that to
occur or (ii) simply not pour water back into the fuel tank on the basis that doing so
could not assist in the running of the car and may in fact cause damage to the car. Mr
Guthrie did neither of those things.
[44] The other three reasons for dismissal relied on by Brook Motors at the determinative
conference41 did not, in my view, amount to “serious misconduct” within the meaning of reg
1.0742, for the following reasons:
(a) Mr Guthrie’s conduct in selling a car he had earlier purchased from a customer at
Brook Motors had no real or sufficient connection to his employment with Brook
Motors. Mr Guthrie sold the car to a third party away from the workplace. Further, Mr
Guthrie had a legitimate reason for putting a new component into the car with a
different speedometer reading and Brook Motors had no basis to believe that Mr
Guthrie did not inform the purchaser of the car that the speedometer reading had been
changed as a result of repairs to the car;
(b) Brook Motors provided very few details concerning its allegation that Mr Guthrie
failed to supervise a junior employee, Mr Mullen. Given the range of duties for which
Mr Guthrie was responsible at Brook Motors and the fact that Mr Mullen was not an
apprentice, I am not satisfied that the failure to supervise, if it did occur, was wilful or
deliberate behaviour by Mr Guthrie or otherwise constituted “serious misconduct”;
and
(c) Save for allegations that Mr Guthrie was subject to “mood swings”, very little detail
was provided concerning Brook Motors’ allegation that Mr Guthrie communicated
with staff and customers in an inappropriate manner over a period of time. I am not
satisfied that such conduct, if it did occur, caused a serious and imminent risk to the
employer’s business or otherwise constituted “serious misconduct”.
[45] Another relevant consideration to the question of whether the employer’s belief was
based on reasonable grounds is whether the employer carried out a reasonable investigation,
and reached a reasonable conclusion in all the circumstances.
[46] In this case, Mr Warren Pulbrook returned to work from an overseas holiday in early
September 2015 and then proceeded to investigate the incident involving Mr Guthrie. On Mr
Warren Pulbrook’s return to work from his holiday, Mr Guthrie told him the police had been
41 See subparagraphs [18(b), (c) and (d)] above
42 In light of my conclusion that Mr Warren Pulbrook did not believe Mr Guthrie’s conduct the subject of the other three
reasons for termination justified his immediate dismissal, it is not strictly necessary for me to make findings in relation to
this issue.
[2016] FWC 914
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to the workplace because they had had trouble with a customer.43 Mr Warren Pulbrook then
spoke to his brother Mr Darren Pulbrook, who informed him that another employee, Mr Harry
Mullen, told Mr Darren Pulbrook that Mr Guthrie had poured water into the customer’s fuel
tank.44 Mr Warren Pulbrook was not told during his investigation how much water Mr
Guthrie had poured into the customer’s fuel tank. Mr Warren Pulbrook explained in his
evidence that the quantity of water Mr Guthrie poured into the customer’s fuel tank was
irrelevant to him; it was the act of doing so that was important:45
“Water in the fuel tank of any quantity – it’s just the act of it. I don’t care if it’s 2 mil or
200 mil or whatever. It’s the – it’s the intent of what he was trying to do. That was
what worried me …”
[47] After speaking to Mr Darren Pulbrook, Mr Warren Pulbrook directed Mr Guthrie to
work out the back of the workshop while he investigated the incident. Mr Warren Pulbrook
decided that he would organise and run the workshop himself and keep Mr Guthrie away from
customers of the business as much as possible during the period of his investigation.46
[48] Mr Warren Pulbrook did not speak to Mr Guthrie directly about the incident involving
water being poured into the customer’s fuel tank other than to tell Mr Guthrie that he was
investigating the matter.47 Mr Warren Pulbrook explained his decision not to discuss the
pouring of water into the customer’s fuel tank with Mr Guthrie in the following terms:48
“… I was concerned if I confronted him that the business, the other staff, myself, we
were all going to be at risk of a similar act or something similar. I just couldn’t deal
with it.
… If I confronted him with that issue, I knew it would be on. It would be on for young
and old.”
[49] It took Mr Warren Pulbrook some time to find the customer’s details because the
invoice had been deleted and the customer had not been charged for the work.49 Mr Warren
Pulbrook was ultimately able to find out the identity of the car that had been involved in the
incident concerning Mr Guthrie pouring water into its fuel tank by examining the handwritten
work diary used in the workshop.50
[50] When Mr Warren Pulbrook believed he had enough evidence in relation to the
incident he was investigating concerning water being poured into the customer’s fuel tank, he
called his father, Mr Anthony Pulbrook, a director and shareholder of Brook Motors, to attend
43 PN994
44 PN996
45 PN998
46 Ex R1 at [1]
47 PN1000
48 PN998 & PN3560
49 Ex R1 at [2]
50 PN987
[2016] FWC 914
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the business to discuss the issue.51 That discussion took place on Friday, 18 September
2015.52
[51] After hearing from Mr Warren Pulbrook that he was convinced53 Mr Guthrie had
poured water into a customer’s fuel tank, Mr Anthony Pulbrook said to Mr Warren Pulbrook
“we can’t trust him”.54 Mr Anthony Pulbrook was of the view that Mr Guthrie should be
dismissed immediately:55
“… I viewed it as a very serious offence that, in my opinion, someone that would do a
thing like that [pour water into the fuel tank of a customer’s car] - I’ve been a
mechanic for a very, very long period of time, could do irreparable harm to my
business and someone that lost control could do a thing like that. It’s hard to believe
someone would do it.”56
[52] Normally in order to hold a belief on reasonable grounds it will be necessary to have a
discussion with the employee about the perceived serious misconduct and pay regard to the
explanations and views given by the employee.57 That did not happen in this case in relation
to the allegation that Mr Guthrie poured water into the customer’s car. However, this is an
unusual case. For the following reasons, I am satisfied that Brook Motors undertook a
reasonable investigation and reached a reasonable conclusion in all the circumstances:
(a) Mr Warren Pulbrook was informed during his investigation that Mr Guthrie poured
water into a customer’s fuel tank following a disagreement with the customer and Mr
Guthrie admits that he engaged in that conduct;
(b) For the reasons set out in paragraph [46] above, it did not matter to Mr Warren
Pulbrook how much water Mr Guthrie poured into the customer’s fuel tank. Mr
Warren Pulbrook’s opinion in relation to that issue is, in my view, sound and
reasonable;
(c) Detailed evidence was given by Mr Guthrie during the determinative conference in
relation to his actions on 21 August 2015 and his reasons for acting in that way. I am
satisfied that even if Mr Warren Pulbrook had discussed the water pouring incident
with Mr Guthrie prior to his dismissal and had heard everything Mr Guthrie had to say
about that issue, Mr Warren Pulbrook would not have changed his decision to bring
Mr Guthrie’s employment to an immediate end on 18 September 2015;
(d) Brook Motors conducts a small mechanical and spare parts business, the success of
which depends on the relationships it forms with customers and the reputation it has in
the area. The conduct in which Mr Guthrie engaged in pouring water into a customer’s
fuel tank caused serious and imminent risk to the reputation of the business of Brook
Motors;
51 PN1623
52 PN1265
53 PN1694
54 PN1266
55 PN1266; PN1625
56 PN1625
57 Ryman v Thrash at [38]
[2016] FWC 914
14
(e) Both Mr Warren Pulbrook and Mr Anthony Pulbrook are very experienced in the
motor vehicle industry. They are well placed to make an assessment as to the risks to
the business of Brook Motors by reason of the conduct in which Mr Guthrie engaged
on 21 August 2015. Having said that, they are inexperienced in dealing with
employment law issues and investigations leading up to a potential dismissal;
(f) Mr Warren Pulbrook knew Mr Guthrie well, having worked closely with him for
about 18 months; and
(g) Having regard to Mr Guthrie’s conduct in pouring water into the customer’s fuel tank
following a disagreement with the customer, as well as Mr Guthrie’s past behaviour
and conduct in the workplace and his disputes with employees of Brook Motors, Mr
Warren Pulbrook had, in my view, a legitimate concern as to how Mr Guthrie would
react if he confronted him directly in relation to what happened on 21 August 2015.
Conclusion
[53] For the reasons set out above, I am satisfied that:
(a) immediately before the time of Mr Guthrie’s dismissal, Brook Motors was a small
business employer within the meaning of the Act;
(b) on 18 September 2015, Brook Motors dismissed Mr Guthrie without notice – that is,
with immediate effect – on the ground that Mr Guthrie had committed serious
misconduct;
(c) Mr Guthrie’s conduct in pouring water into the fuel tank of a customer’s car
constituted “serious misconduct” within the meaning of reg 1.07;
(d) Mr Warren Pulbrook, as the controlling mind of Brook Motors, genuinely believed
that Mr Guthrie had engaged in conduct sufficiently serious to justify immediate
dismissal; and
(e) Mr Warren Pulbrook’s belief was, objectivity speaking, based on reasonable grounds.
[54] It follows that Mr Guthrie’s dismissal was consistent with the Code. Accordingly, Mr
Guthrie was not unfairly dismissed within the meaning of section 385 of the Act and his
application is dismissed.
COMMISSIONER
THE FAIR WORK AIR NORK C OMMISSION KLIA SEX THE SEAL OF THE
[2016] FWC 914
15
Appearances:
Mr S Guthrie on his own behalf;
Mr W Pulbrook on behalf of the respondent.
Hearing details:
2016.
Newcastle:
February, 9 & 10.
Printed by authority of the Commonwealth Government Printer
Price code C, PR576950
