[2014] FWC 3674

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Application for unfair dismissal remedy

Mr Darren Gadowski
v
EcoClassic Group Pty Ltd
(U2013/2764)

DEPUTY PRESIDENT SMITH

MELBOURNE, 4 JUNE 2014

Application for relief from unfair dismissal—compensation awarded.

Introduction.

[1] Mr Darren Gadowski commenced employment with EcoClassic Group Pty Ltd (EcoClassic) on 21 May 2012. He was engaged as a Sales Representative. The contract of employment stated: “Your duties will include all aspects of cold calling on customers, generating new customer base and following up on quotes. Weekly call sheets are also a requirement.”

[2] EcoClassic describes itself in the following terms:

EcoClassic provides the most energy efficient windows and doors for your home or office. Designed and built to the highest Australian standards for absolute strength and efficiency. Our six star windows are guaranteed to please for years to come. Choose from either aluminium, or thermally broken aluminium for ultimate results. 1

[3] On 26 July 2013, EcoClassic terminated the employment of Mr Gadowski for what it said was poor performance. Mr Gadowski now seeks relief in relation to his termination of employment, pursuant to s.394 of the Fair Work Act 2009 (the Act). There is no issue that Mr Gadowski is a person protected from unfair dismissal.

[4] At the commencement of the proceedings consultations occurred with the parties in accordance with the Act and an attempt was made to settle the matter without success. I should make mention of the fact that Mr Gadowski asked if he could be represented by Ms Margaret McAuley. This was approved but I was unaware until written submissions arrived that Ms McAuley was a Solicitor requiring permission to appear.

The reasons for the termination.

[5] EcoClassic argued that it terminated the employment of Mr Gadowski for poor performance citing a failure to:

• produce reports;



• log appointments into the outlook calendar;



• increase visits to generate orders; and



• produce a plan for generating sales and servicing a major client.

[6] It was submitted that these matters were discussed seriously with Mr Gadowski at a meeting on 27 February 2013 but there was no improvement. On 11 May 2013 a final warning was given to Mr Gadowski and his employment was terminated on 26 July 2013.

[7] Mr Gadowski argued that:

• he was on sick leave and was therefore protected against dismissal due to a temporary absence due to illness or injury;



• no opportunity was given to him to contest his termination of employment prior to it taking place;



• previous meetings in relation to performance did not make it clear that his employment was in jeopardy;



• issues in relation to his electronic diary were a fault of the IT system not his recording; and



• the sales issues were related to the quality of the product and problems associated with supply rather than his alleged poor performance.

The evidence.

[8] In support of his application, Mr Gadowski argued that he was given no guidance when he started work and simply told to look at the yellow pages and was wished good luck. In his evidence Mr Gadowski stated that when he started with EcoClassic the product was good, the service was good and the delivery was good. He added that after a while the service dropped in standard and that there were delivery errors and this impacted upon his ability to sell the product.

[9] It was the evidence of Mr Gadowski that no-one was meeting sales targets.

[10] His evidence was that in February 2013 the Managing Director of the Company, Mr Ed Stelling invited him to have a cup of coffee. During this meeting, Mr Gadowski said that Mr Stelling asked a number of very personal questions. It was also his evidence that Mr Stelling accused him of not visiting one of the company’s clients. One of the company’s clients was a business called Bowens Timber and Hardware (Bowens). This company is a founding shareholder of EcoClassic and Mr John Bowen is a past Director and Chairman of EcoClassic. Being challenged about whether or not he had visited a client caused him to contemplate resignation. However this was dealt with by having further meetings with Mr Stelling and Mr Barry Williams, the Operations Manager of EcoClassic.

[11] Mr Gadowski stated that during sales meetings he was not advised that his performance was poor rather they didn’t indicate either way. On one occasion, Mr Gadowski stated that he had a congratulatory note from Mr Stelling about some work.

[12] On 19 July 2013 Mr Gadowski was assaulted by a customer of the company and he reported this to Mr Stelling by email on the same day. On the same day Mr Stelling replied and stated that he expected Mr Gadowski to report the matter to police and seek medical attention. EcoClassic took further steps to ensure the Occupational Health and Safety of Mr Gadowski. Mr Williams also took the necessary steps to deal with the assault and acted in an appropriate manner.

[13] The evidence of Mr Stelling began with his version of the meeting in February where he was concerned about the number of people being contacted at Bowens.

[14] Mr Stelling stated that he was asking about particular times, dates and people seen but that Mr Gadowski was unable to provide this information. Mr Stelling recalled that he had offerred Mr Gadowski coaching but that was not sought. In relation to Mr Gadowski’s evidence that there was an IT problem preventing his diary being synchronised with the computers, Mr Stelling said that he wasn’t aware of a problem but in any event there were insufficient appointments. Importantly, Mr Stelling said that he asked to view Mr Gadowski’s computer or phone but that he refused.

[15] Mr Stelling addressed the final warning given to Mr Gadowski on 11 May 2013 and, under cross-examination agreed that it was the only written warning and that it was before a time (20 June 2013) when he congratulated Mr Gadowski on a job well done. Mr Stelling’s evidence was that he was trying to encourage Mr Gadowski.

[16] It was the evidence of Mr Stelling that Mr Gadowski’s sales figures were well below what was expected and below others. Mr Gadowski’s representative sought further and better particulars and this was subsequently provided but no further submissions were made on the level of sales.

Conclusion.

[17] From the material provided and the evidence it is apparent that Mr Gadowski did not meet the sales target that was expected of him and that this had been discussed. It is also apparent that sales targets were not met by all staff [Transcript PN239], although the reference of others was better than Mr Gadowski.

[18] The evidence also allows for the conclusion that Mr Gadowski was advised that his targets were not being met and that Mr Williams was trying to assist Mr Gadowski to improve his sales figures [Transcript PN 271-275].

[19] In the final submission Mr Gadowski argued that he:

• was terminated whilst on sick leave and this was impermissible;



• was not given an opportunity to respond; and



• should be reinstated and given full back-pay.

[20] I turn to the statutory considerations. Section 387 of the Fair Work Act 2009 (the Act) provides:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[21] It is convenient that I deal with each one in turn.

(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).

[22] I have reached the conclusion that there was a valid reason for the termination of Mr Gadowski. I am satisfied that the employer was concerned about his performance and that concern was reasonably held. In making such a finding I do not accept that that the dismissal during a period of sick leave is prohibited. What is prohibited is the termination of employment because someone is exercising a workplace right. It does not vitiate the valid reason simply because a person is on sick leave at the time.

(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.

[23] It is convenient to deal with these matters together. Mr Gadowski was given the reason but he was not given an opportunity to respond because he was on sick leave at the time. Similarly, given the circumstances, Mr Gadowski would not have been given the opportunity to have a support person present.

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal.

[24] In this regard I find that there was a warning given to Mr Gadowski. In his own evidence in cross-examination, Mr Gadowski accepted that Mr Williams said that he needed to appreciate certain matters to stay employed [Transcript PN274].

(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.

[25] This is not a large business, but both Mr Williams and Mr Stelling sought to deal with the matter as best they could and except for one matter, sought to deal with the matter appropriately. The one matter relates the actual termination of employment. I am not satisfied that the termination was procedurally appropriate. Given the illness of Mr Gadowski which was not long term, some consideration should have been given to discussing the matter with Mr Gadowski upon his return.

(h) any other matters that the FWC considers relevant.

[26] There are no other matters I consider to be relevant.

[27] Given my findings going to a valid reason and the way in which Mr Gadowski had his employment terminated I will find, on balance, that the termination was unreasonable. Mr Gadowski should have been given the opportunity to save his job and to see if he could have persuaded his employer to provide a further period in which to assist him.

[28] I now turn to remedy.

[29] Section 390 of the Act provides:

390 When the FWC may order remedy for unfair dismissal.

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

[30] Given the history of this matter as revealed by the evidence and the fact that I have found that there was a valid reason, I am satisfied that reinstatement is inappropriate. This means that I now turn to consider compensation in lieu of reinstatement.

[31] Section 392 provides:

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

[32] I begin by noting that there is no submission going to the viability of the enterprise in terms of any order for compensation. Mr Gadowski had some 14 months employment and therefore this aspect does not add weight to any consideration for compensation given the relatively short service. Further, issues of poor performance were ongoing between the parties. In assessing the level of compensation to be awarded I am also guided by the Full Bench Decision in Sprigg v Paul Licensed Festival Supermarket [(1998) 88 IR 21].

[33] I have reached the conclusion that the substantive reasons for the termination of employment would not have altered if EcoClassic had taken more time in addressing the issues. Whilst I observed earlier that Mr Gadowski may have been able to persuade EcoClassic not to terminate his employment, I do not see any basis for that argument based upon his performance. The further discussion may have lasted for a further two weeks.

[34] Accordingly I find that but for his termination his employment would have remained on foot for another two weeks and I shall award compensation of that amount. Other factors were not addressed significantly, but in light of the small level of compensation I do not propose to make any further deductions.

DEPUTY PRESIDENT

Appearances:

M. McAuley, Solicitor for D Gadowski.

E. Stelling with B. Williams on behalf of EcoClassic Group Pty Ltd.

Hearing details:

2014.

Melbourne:

January, 20.

Final written submissions:

S. Ferreras, EcoClassic Group Pty Ltd, 3 February 2014.

M. McAuley, 23 March 2014.

B. Williams, 28 March 2014.

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