1
Fair Work Act 2009
s.394—Unfair dismissal
Robert Johnson
v
North West Supermarkets T/A Castlemaine IGA
(U2017/1404)
DEPUTY PRESIDENT HAMILTON MELBOURNE, 1 JUNE 2017
Application for an unfair dismissal remedy.
[1] On 9 February 2017, Mr Robert Johnson (the applicant) made an application to the
Fair Work Commission (the FWC) seeking relief from unfair dismissal pursuant to s.394 of
the Fair Work Act 2009 (the Act). Mr Johnson was employed by North West Supermarkets
T/A Castlemaine IGA (the respondent).
[2] Mr Matthew Minucci sought permission to appear on behalf of the applicant pursuant
to s.596 of the Act. Mr Brendan Blake for the respondent objected to permission being
granted. Pursuant to s.596 of the Act, permission was granted to assist the efficient conduct of
proceedings. By agreement the proceedings were conducted by way of determinative
conference. It was agreed that Mr Johnson is a person protected from unfair dismissal and that
there were no jurisdictional issues, and that the only issue to be determined was that pursuant
to s.387 of the Act.
Authorities
[3] The ambit of the conduct which may fall within the phrase “harsh, unjust or
unreasonable” was explained in Byrne v Australian Airlines Ltd1 by McHugh and Gummow
JJ as follows:
“… It may be that the termination is harsh but not unjust or unreasonable, unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust because
the employee was not guilty of the misconduct on which the employer acted, may be
unreasonable because it was decided upon inferences which could not reasonably have
been drawn from the material before the employer, and may be harsh in its
consequences for the personal and economic situation of the employee or because it is
disproportionate to the gravity of the misconduct in respect of which the employer
acted.”
1 (1995) 185 CLR 410, 465.
[2017] FWC 2866 [Note: An appeal pursuant to s.604 (C2017/3304) was
lodged against this decision - refer to Full Bench decision dated 29 August
2017 [[2017] FWCFB 4453] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb4453.htm
[2017] FWC 2866
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[4] This matter concerns detailed instructions to an employee given in an employer policy
document and other employer directions. Such policies have been considered in a range of
decisions which include the following:
[5] In Bostik (Australia) Pty Ltd v Gorgevski (No 1)2, Sheppard and Heerey JJ observed:
“Employers can promulgate polices and give directions to employees as they see fit, but
they cannot exclude the possibility that instant dismissal of an individual employee for
non-compliance may, in the particular circumstances of an individual case, be harsh,
unjust and unreasonable.”
[6] In Woolworths Limited (t/as Safeway) v Brown3, a Full Bench of the Commission said:
“[34] In summary, a breach of an employer’s policy involving or amounting to a
failure to obey a lawful and reasonable direction of the employer sufficient to justify
dismissal at common law will amount to a valid reason for termination of employment
within the meaning of s.170CG(3)(a) in the sense of a reason that is ‘sound, defensible
or well-founded.’ A failure to comply with a direction to do or refrain from doing
something in compliance with an employer’s policy will not provide a valid reason for
termination of employment where:
(a) the policy, or a direction to comply with the policy, is illegal;
(b) the policy does not relate to the subject matter of the employment or matters
affecting the work of the employee; or
(c) the policy, or a direction to comply with the policy, is unreasonable.
[35] What is reasonable will depend upon all the circumstances including the nature
of the employment, the established usages affecting it, the common practices which
exist and the general provisions of the instrument governing the relationship. A policy
will be reasonable if a reasonable employer, in the position of actual employer and
acting reasonably, could have adopted the policy. That is, a policy will only be
unreasonable if no reasonable employer could have adopted it. A policy will not be
unreasonable merely because a member of the Commission considers that a better or
different policy may have been more appropriate. As the Full Bench observed in the
XPT Case, albeit in a somewhat different context, it is not the role of the Commission
‘...to interfere with the right of an employer to manage his own business unless he is
seeking from the employees something which is unjust or unreasonable.’
[36] Even where a breach of policy (or failure to comply with a direction to observe
a policy) provides a valid reason for termination of employment, it is well established
that the termination may nevertheless be harsh, unjust or unreasonable. For example:
the employee may establish ignorance of the policy;
2 (1992) 41 IR 452, 460.
3 PR963023.
[2017] FWC 2866
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termination of employment may be a disproportionate response to the breach having
regard to its nature and the employee’s length of service and prior history;
the employee may demonstrate prior non-enforcement or inconsistent application of
the policy which, in the particular circumstances, render termination for breach of
the policy harsh, unjust or unreasonable (although it should be noted that ‘…merely
because in the past, another employee in breach of the policy may have been dealt
with in a particular way other than dismissal is not, of itself, a reason why
subsequent dismissals in similar circumstances might be said to be harsh.’);
the evidence may disclose that the policy is being applied in a discriminatory fashion
or is used as a pretence to disguise a real reason that is impermissible (eg union
membership or non union membership).
This list is not intended to be exhaustive and each case will turn on its own facts.”
[References omitted]
[7] In David Dawson v Qantas Airways Limited4, the Full Bench said:
“[30] We note that the Qantas Group Cabin Crew Operations Manual makes it clear
that the removal of aircraft stores from the aircraft is strictly prohibited and may lead
to termination of employment. Further, under section 15.24 of the Qantas Group
Standards of Conduct Policy, employees of the Respondent are not to engage in
conduct including deliberately providing incorrect or misleading information, at any
time, which is relevant to the employee’s employment.
[31] It is not disputed that, on 14 February 2016, alcohol was found to be in the
possession of the Applicant. Further, the Applicant admitted that his explanation
regarding how the alcohol came into his possession was “not true” in his letter to Ms
Elliott dated 22 March 2016.
[32] Noting the above and considering the factual matrix as a whole, we are
satisfied that the Applicant did remove the alcohol from the aircraft and subsequently
misled the Respondent as to how and why the alcohol came into his possession. As
such, the Respondent had a valid reason to dismiss the Applicant from his
employment.”
[8] In Cameron Woodman v The Hoyts Corporation Pty Ltd5, the Full Bench said:
“[34] We have concluded that the appellant's lie, being dishonest, was a breach of his
obligations pursuant to the Employee Handbook and a breach of his common law duty
of fidelity. We have concluded also that there was a valid reason for the termination of
the appellant's employment for the purposes of s.170CG(3)(a). That reason related to
his conduct in representing that the ice creams had been paid for. We find that the
employee was notified of the reason (s.170CG(3)(b)) and given an opportunity to
respond (s.170CG(3)(c)). Nevertheless we think that the termination of his
employment was harsh. The appellant himself was a participant in the theft only in an
4 [2017] FWCFB 1712.
5 PR906309.
[2017] FWC 2866
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indirect way in that his statement that the ice creams had been paid for amounted to an
attempt to cover up the theft. But the lie was not premeditated nor was it intended to
benefit the appellant. It was not persisted in for long and it was given in connection
with the pilfering of goods of fairly low value. We are unable to say what led to the
appellant's subsequent admission that he had lied about payment. Although Hoyts
challenged his assertion that he had decided to tell the truth when he knew that
Wentworth's employment had been terminated, no alternative reason for the change of
heart was advanced. We do not think that the resolution of this issue has any real
bearing on the outcome of the case. While we do not underestimate the importance of
maintaining high standards of honesty amongst staff working in this industry, we think
the appellant's conduct warranted a warning and no more. Dismissal for dishonesty had
the potential to entirely alter his employment prospects for the rest of his life. In the
circumstances that penalty was unwarranted. We have no doubt that this is a case of
the kind referred to in Byrne and Frew v Australian Airlines Limited (1995) 185 CLR
410 in which the termination was disproportionate to the gravity of the misconduct in
respect of which the employer acted (per McHugh and Gummow JJ at 465).”
Consideration
[9] Section 387 of the Act sets out factors which must be considered to determine if the
termination of Mr Johnson’s employment was unfair. I am required to consider, make
findings about, and give weight to each of these factors6. I consider each of these in turn.
Section 387(a) – Valid reason
[10] Many of the basic facts of the matter are not in dispute. It is not in dispute that on 7
February 2017 Mr Blake detected Mr Johnson departing the store with three items removed
from the store without any payment offered or made7. Mr Blake stopped and searched Mr
Johnson and found the three items of stock then called police who arrived, but did not charge
Mr Johnson8. The employer had clear policies against theft or removal of stock without
payment by an employee, which are set out in a formal manual in three places, and also in the
probationary employment policy that Mr Johnson signed9. The employer policies are set out
in the manual in various places10, and are attached to this decision. Mr Johnson signed and
acknowledged the policy11. While Mr Johnson sought to describe the items as samples, all are
stock or saleable items and are covered by the employer directions contained in the policy and
probation contract.
[11] Mr Johnson was then summarily dismissed on the day without notice. It was agreed
that this was a summary dismissal, and to ensure accuracy the employer checked that no
notice had been paid, and advised me that it had not been paid.
[12] There are a number of issues which however require some discussion. Firstly, Mr
Johnson claimed that he had not really been trained in the policy, and that the induction was
6 Sayer v Melsteel [2011] FWAFB 7498.
7 Exhibit B1 at [7].
8 Ibid at [8]-[12].
9 Ibid at [34]-[35].
10 Ibid [23]; Attachment to Exhibit B1 at p.5 [3]; Attachment to Exhibit B1 at p.7 [1] and Attachment to Exhibit B1 at p.7 [3].
11 Exhibit B1 at [21].
[2017] FWC 2866
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in 2008, some 8 years previous to the incident. He sought to claim that he had signed the
policy in a purely legal fashion without much knowledge of its contents. However, in my
view, he bore responsibility for signing and acknowledging the policy, and cannot escape that
responsibility. He agreed to abide by its terms.
[13] Secondly, he also claimed that his supervisor, Ms Penny Royal, authorised him and
others to take these items home without payment. The employer in giving evidence was at
best not aware of this authorisation and I accept that he was so authorised in some form. I also
accept the statement of Mr Blake that Ms Royal herself did not have the actual authority to
make this arrangement.
[14] There are a number of difficulties with this claim. The arrangement, if legitimate,
would have been known to the various managers, and would have been discussed or disclosed
by Ms Royal and employees. Instead Mr Blake, a Director who frequently visited the
supermarket, was left completely unaware of the arrangement. Further, while giving evidence,
Mr Johnson at times appeared to concede the ambiguity of this arrangement. It is intrinsic in
the retail business that employees sell stock and are scrupulous about not mixing personal and
employer property and interests. This is almost self-evident, and an intelligent man such as
Mr Johnson cannot simply plead ignorance of such matters. In my view, Mr Johnson was
aware, or suspected, or should have suspected, that these arrangements may not have been
ideal or appropriate or fully authorised by the employer, even if he was not directly told by
anyone that these arrangements were inappropriate. The actions of Ms Royal do not fully
excuse Mr Johnson’s conduct.
[15] This is a complex set of factors, each of which has, in my view, to be given weight
consistent with authority quoted above.
[16] I find that there was a valid reason for termination of employment, namely the
removal of stock without payment in breach of the employer policy and probation contract.
There are, however, mitigating circumstances which I deal with below.
Section 387(b) – Whether the person was notified of that reason
[17] Mr Johnson was told about the allegation of theft12, and appeared to accept that he was
notified of the reason for termination, namely removal of stock without payment.
Section 387(c) – Whether the person was given an opportunity to respond to any reason
related to the capacity or conduct of the person
[18] Mr Johnson acknowledged that he was able to respond to Mr Blake by stating that Ms
Royal authorised him to remove the three items of stock. He was literally able to respond and
give a relatively relevant response based on his claims in this case. I find that he was given the
opportunity to respond, although there are additional issues raised by the applicant namely
that the employer did not undertake a proper investigation.
Section 387(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
12 Exhibit J1 at [38].
[2017] FWC 2866
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[19] It is agreed that Mr Johnson did not request a support person therefore there was no
unreasonable refusal to provide one.
Section 387(e) – If the dismissal related to unsatisfactory performance by the person--whether
the person had been warned about that unsatisfactory performance before the dismissal
[20] The termination was for conduct, not unsatisfactory performance so this is not
relevant.
Section 387(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
Section 387(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
[21] The respondent did not claim any discount on conduct because of these factors. I
accordingly find that the size of business or lack of human resource professionals did not
impact on the procedures followed. However, if the employer had not made this concession, I
would likely have found that the termination had all the indicia of one made without expert
knowledge, given that it was a summary dismissal without notice, rather than a dismissal with
notice, that the employer did not first undertake a full investigation, and other matters. These
are indications that the employer was not aware of termination procedural requirements and
the possible difficulties of such conduct.
Section 387(h) – Any other matters that the FWC considers relevant
[22] The applicant claims that there are mitigating circumstances, namely his difficult
personal circumstances, and the alleged statements and practices of Ms Royal authorising the
removal of items, and the lack of a full investigation. I take these issues into account. This
was also a summary dismissal.
[23] It is open to an employer to authorise employees to take home various types of stock.
However, in this case the authorisation was not open and known to Mr Blake, the Director. It
had operated for some time and was kept close to Ms Royal and some employees. In my
view, it is not appropriate to condone employees taking the benefit of some sort of semi-
covert or private arrangement made by someone without the actual authority to authorise such
an arrangement, when they knew or should have known that the arrangement was not bona
fide and legitimate, or fully bona fide or legitimate. Employees are or should be aware that it
is not appropriate to mix private and employer property, and this may have particular
importance in retail where the business is selling stock for a profit. It is probably not even
necessary in some or many cases for an employer to tell retail employees that removing stock
for personal benefit without payment is not appropriate, given that such conduct may in fact
be theft. They would of course be well advised to have a formal policy on this issue, as the
employer has in this case. Nor is this a trivial matter.
[24] The policy which Mr Johnson signed was quite clear. Taking stock home without
payment was prohibited by the policy, and Mr Johnson agreed to this arrangement when he
signed the policy, and signed the probation contract which had similar provisioni.
[2017] FWC 2866
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[25] I have considerable sympathy for Mr Johnson, but he has made a serious mistake.
Despite the mitigating factors, in my view the termination was not harsh, unjust or
unreasonable. I dismiss the application. An order dismissing the application is contained in
PR593193.
DEPUTY PRESIDENT
Appearances:
M Minucci of counsel for the applicant.
B Blake on his own behalf.
Hearing details:
2017.
Bendigo:
May 23.
Printed by authority of the Commonwealth Government Printer
Price code C, PR593192
i
The Maxi Foods Group Staff Policies and Procedures Manual states:
“Any person found consuming or removing goods, regardless of value, from the store without sufficient evidence of payment
will be immediately terminated and prosecuted. It is therefore the personal responsibility of each staff member to ensure that
any goods in their possession whilst at work are check sealed.
…
All samples received by staff must be placed into stock. Samples or gifts are not to be taken from the store by management or
staff.
…
Purchasing stock personally marked down will be treated as theft. Instant dismissal results from personally reduced and
purchased stock.
…
Goods passed through the registers without appropriate payment classed as theft.”
The Maxi Foods Group Probation Agreement signed by the applicant states:
“I further understand that theft is a crime punishable by law and the Maxi Foods Group will prosecute and instantly terminate
from employment any members of staff who steal or assist others to steal.
I am also aware that I am not permitted to receive any stock, gift or monetary benefits from company representatives or
suppliers for my personal use. All items associated with the operation of the business remain the property of the Maxi Foods
Group.”
COMMISSION THE SEAL OF THE
