[2016] FWC 1844

The attached document replaces the document previously issued with the above code today.

It is amended by removing the highlighting on para [68]

Associate to Commissioner Ryan

Dated: 24 March 2016

Fair Work Act 2009
s.394—Unfair dismissal

Ron Shamir
v
Commonwealth of Australia (Australian Taxation Office) T/A Australian Taxation Office
(U2015/11065)

Application for relief from unfair dismissal – valid reason.

[1] Mr Shamir was initially employed by the Australian Taxation Office (the ATO) on 25 July 2011 as a Senior Case Profiling Officer at the classification level of EL1. The ATO Enterprise Agreement 2011 (ATO EA) applied to Mr Shamir in his employment. Mr Shamir was dismissed from his employment on 19 June 2015 but due to proceedings before the Federal Court the ATO agreed to suspend the dismissal whilst those proceedings were underway. After the Federal Court proceedings had been discontinued by Mr Shamir, the dismissal of Mr Shamir took effect on 24 July 2015. The application for an unfair dismissal remedy was filed with the Commission pursuant to s.394 of the Fair Work Act 2009 (the Act) on 14 August 2015.

[2] For the purpose of s.396 of the Act I find as follows:

● The application in this matter was made within the period required by s.394(2). Although the dismissal was to take effect on 19 June 2015 the dismissal did not take effect until 24 July 2015 and the filing of the application on 14 August 2015 was within the 21 day time period specified by s.394(2)(a).

● Mr Shamir was protected from unfair dismissal within the meaning of s.382 given that he had completed the minimum employment period specified by s.383(a) and that he met the requirements of s.382(b) as an enterprise agreement applied to him.

● The Small Business Fair Dismissal Code does not apply in the present matter as the ATO is not a small business.

● The dismissal of Mr Shamir was not a case of genuine redundancy.

Background to the Dismissal

[3] Mr Shamir was employed by the ATO as a Senior Case Profiling Officer. That was the position advertised and each of the “Job description”, “Duty statement” and “Selection criteria” for the position were clearly that of a profiling analyst with significant experience. The position of Senior Case Profiling Officer was classified at the EL1 level.

[4] In 2013 the ATO restructured its business and made the positions of Senior Case Profiling Officer redundant. Mr Shamir and other case profiling officers were transferred to other employment within the ATO at the same classification level. In the case of Mr Shamir he was transferred to a position in an audit team performing an audit role. Mr Shamir maintained his classification of EL1 but was reporting to a Team Leader, Indirect Tax, Serious Evasion who was also at the classification level of EL1. Mr Shamir was expected to make the transition from profiling to audit with some training provided.

[5] Mr Shamir did not accept that he could or should be transferred into an audit role and notwithstanding the provision of some training in relation to the audit role Mr Shamir considered himself to lack the skills necessary to enable him to perform the audit role he was expected to undertake.

[6] The audit role specifically required that an auditor talk with the client or the client’s legal representative or accounting advisers. There was no such requirement in the role of the case profiling officer.

[7] Until March 2015 there had been significant disagreement between Mr Shamir’s then Team Leader and more senior management as to the need to require Mr Shamir to undertake client contact duties as part of his audit role. More senior management expected Mr Shamir to have the skills necessary to undertake the client contact duties associated with the audit role. The Team Leader at the time was of the view that Mr Shamir needed much more time before he would be able to perform client contact duties.

[8] Until March 2015 Mr Shamir had not been required to have contact with clients or client representatives as his then Team Leader accepted that Mr Shamir considered himself to lack the skills and ability to properly interact with clients in an audit role.

[9] On 10 March 2015 a new Team Leader was appointed to the audit team comprising Mr Shamir.

[10] On 7 April 2015 the CPSU confirmed with the ATO the existence of a dispute under clause 145 of the ATO EA concerning the ATO requiring Mr Shamir to work in a role outside his skill, competence and training.

[11] The new Team Leader, Mr Konstantinidis, developed a proposed work plan for
Mr Shamir which required him to perform client contact duties. This was communicated by email to Mr Shamir on 13 April 2015 and Mr Shamir responded by email on 15 April 2015 declining to discuss the proposed work plan because the matter was subject to the dispute notification from the CPSU.

[12] Mr Konstantinidis gave directions to Mr Shamir to perform certain specific duties which included client contact. Mr Shamir refused to perform the duties. Mr Shamir relied on the notification of the dispute and the status quo provisions of the ATO EA as providing a basis for his refusal to perform duties which were in dispute.

[13] The decision to dismiss Mr Shamir was made by Mr Miller, Assistant Commissioner, ATO People on 19 June 2015 and the reason for dismissal was the non-performance of duties by Mr Shamir during the period 10 April 2015 and 5 June 2015. During that period
Mr Shamir only attended work on 11 days. The non-performance of duties only related to the non-performance of the specific tasks that Mr Konstantinidis required Mr Shamir to perform when he was attending work. Mr Shamir did perform work when he attended work during the period 10 April 2015 and 5 June 2015 but the work he performed was not the work that
Mr Konstantinidis required him to perform.

Consideration

[14] The ATO contends that it had a valid reason for the dismissal given Mr Shamir’s continued refusal to undertake duties specifically allocated to him by his Team Leader and that Mr Shamir was given ample opportunity to both comply with the directions from his Team Leader and to explain his non-compliance. The ATO also contended that each of the reasons given by Mr Shamir for non-compliance with the directions issued to him by his Team Leader were considered by the ATO not to provide a satisfactory explanation for the non-compliance.

[15] Mr Shamir contends that the ATO’s position that it could require him to perform the duties of an auditor was erroneous. Mr Shamir contended that he never had the skills or experience necessary to perform the duties of an auditor. Once the issue had been notified as a dispute under the ATO EA then Mr Shamir contended the status quo provisions of the ATO EA meant that he could not be directed to perform the duties of an auditor until the dispute had been resolved in accordance with the terms of the ATO EA. Mr Shamir contended that he was performing work which was within his duties on the days in which it was alleged that he was guilty of non-performance of duties.

Was there a valid reason for the dismissal of Mr Shamir?

[16] The ground for dismissal was “non-performance of duties”. The reasons for dismissal on the ground of non-performance of duties were set out in a detailed 9 page letter to
Mr Shamir from Mr Miller which accompanied the Notice of Termination of Employment issued on 19 June 2015. The bulk of the letter from Mr Miller was a response to submissions made on behalf of Mr Shamir by his legal representative in answer to a show cause letter given by Mr Miller on 10 June 2015.

[17] Much evidence was given by Mr Konstantinidis about the work plan he prepared for Mr Shamir and how he instructed Mr Shamir to do certain tasks and how Mr Shamir failed to perform those tasks, and much evidence was given by Ms Cavanagh, Director, Serious Evasion about the ongoing efforts to get Mr Shamir to perform the tasks required of him and her involvement in the process which led to the dismissal of Mr Shamir. Evidence was also given by Ms Ross, Human Resource Director, People Support concerning the restructure within the ATO in 2013 and in relation to general matters concerning the continuing reduction of EL positions.

[18] The specific evidence of each of Mr Konstantinidis and Ms Cavanagh was that they were not the decision maker in relation to the dismissal of Mr Shamir and that they had not been involved in the decision to dismiss Mr Shamir. 1

[19] Mr Miller, Assistant Commissioner, People, who was the decision maker for the ATO did not give evidence in this matter.

[20] Mr Shamir, in his final written submissions contended that in light of the failure of the ATO to call evidence from any of its officers who were decision makers or involved in the decision, the Commission must infer that their evidence would not have assisted the ATO’s case. Further, Mr Shamir contended that because Mr Miller as the decision maker did not give evidence then none of the reasons proffered by Mr Miller to reject the submissions of
Mr Blige (Mr Shamir’s legal representative) were able to be tested, and cannot be relied on. Finally Mr Shamir contended that the failure to call evidence from Mr Miller strongly supported his contention that there was no valid reason for the dismissal.

[21] The ATO contended, correctly in my view, that because the “Commission is required to determine ….. whether there was in fact non-performance and, if so, whether it constituted a valid reason for dismissal” then “in the circumstances, no adverse inference should be drawn from the failure to call Mr Miller and/or Mr Montanez to give evidence”. 2

[22] Any consideration as to whether the reason for dismissal of an employee constitutes a valid reason requires consideration of the reasons of the decision maker. Where the ATO has made the decision that the decision maker is not available to be examined about the reasons for dismissal then the Commission simply has to weigh the untested reasons for dismissal against all of the other evidence that either supports or challenges the existence of a valid reason for dismissal. In the present circumstances this is not a case where the principles of Jones v Dunkel 3 need apply. No adverse inference should or need be drawn in relation to the failure of the ATO to call Mr Miller, as the decision maker, to give evidence in this matter.

[23] In the present matter Mr Shamir freely admits that he did not undertake some duties which he was specifically told to perform. Thus the non-performance of duties by Mr Shamir is not in dispute. However, the fact that Mr Shamir did not perform some duties which he was specifically told to perform does not of itself lead to the conclusion that there was a valid reason for the dismissal of Mr Shamir.

[24] Mr Shamir’s refusal to perform certain duties which he was told to perform is merely one fact in a matrix of facts and whether Mr Shamir’s refusal to perform certain duties which he was told to perform gives rise to a valid reason for dismissal must be considered in the context of the factual matrix which existed at the time.

[25] In the Selvachandran sense, 4 i.e. using the dictionary definition of valid5, the reason for dismissal needs to be well founded, sound, defensible, or just.

[26] In the present matter the decision to dismiss Mr Shamir is indefensible in the circumstances where there was a live and ongoing dispute both as to the ATO’s entitlement to require Mr Shamir to perform the duties he was directed to perform and as to Mr Shamir’s entitlement to refuse to perform those duties. It is clear that the ATO met the requirements of the PS Act 1999 (the PS Act) in dismissing Mr Shamir for non-performance of duties within the meaning of s.29(3(c) of the PS Act. However, meeting the requirements of s.29(3)(c) of the PS Act does not mean that the dismissal is defensible for the purpose of determining whether the dismissal is harsh, unjust or unreasonable. The focus only on the provisions of the PS Act is too narrow a focus. In the present matter the ATO’s decision to dismiss Mr Shamir pursuant to provisions of the PS Act is clearly lawful but is not a valid reason. Section 29(1) of the PS Act creates a right for an Agency Head to terminate the employment of an APS employee but it does not mandate that the Agency Head must terminate the employment of the APS employee. In the circumstances of the present matter where the conduct of Mr Shamir provided a ground for termination under s.29 of the PS Act, there was nothing in the PS Act that required the ATO to terminate Mr Shamir’s employment. There is nothing in the material before the Commission which suggests that alternatives to termination were explored either within the ATO or with Mr Shamir.

[27] In the present matter the decision to dismiss Mr Shamir is unsound. There are too many holes in the ATO’s case. By not resolving the dispute raised by the CPSU about the need for Mr Shamir to perform certain duties, the ATO was proceeding down the path of disciplinary action leading to dismissal with only half of the factual matrix in play. This was very much an exercise of the right hand of the ATO either not knowing or ignoring what the left hand of the ATO was doing. The decision to dismiss Mr Shamir was intuitively unsound because of this. The soundness of the decision to dismiss Mr Shamir might possibly have been established had Mr Miller given evidence in this matter. However in the absence of evidence from Mr Miller the Commission could not be satisfied that the reason for the dismissal of Mr Shamir was sound.

[28] In the present matter the decision to dismiss Mr Shamir is not well founded. The mere non-performance of certain duties does not of itself found a reason for dismissal. The non-performance of duties occurred in a context which comprises a factual matrix. The dismissal for non-performance of duties could only be well founded where the nature of the non-performance of duties, both as to the nature of the duties to be performed and the nature of the conduct which amounted to non-performance, outweighed factors which explained or excused the non-performance of duties. In the circumstances of the present matter where the reasons for the dismissal are those set out in the letter from Mr Miller, Assistant Commissioner, People on 19 June 2015 and where Mr Miller was not able to be examined as to those reasons it is not possible for the Commission to be satisfied that the reason for dismissal was well founded.

[29] In the present matter the decision to dismiss Mr Shamir is unjust. I note at this point that in this paragraph I am considering the justness of the reason for dismissal and not the justness of the dismissal which is a much broader consideration of all of the relevant criteria in s.387. The decision to dismiss was made before the dispute resolution process in relation to the dispute about what duties Mr Shamir could be required to perform was resolved. The decision to dismiss denied Mr Shamir the opportunity to have the dispute over performance of duties resolved in accordance with the dispute procedures of the ATO EA. The decision to dismiss Mr Shamir could only have occurred on the basis that the ATO considered at all times that it had a right to terminate Mr Shamir under s.29 of the PS Act and that that right trumped any entitlement Mr Shamir had to raise a dispute under the disputes procedure of the ATO EA and any rights that Mr Shamir had under the ATO EA and or the Fair Work Act.

[30] The Commission, on all of the material before it, cannot be satisfied that there was a valid reason for the dismissal of Mr Shamir.

Notification of reason for dismissal and opportunity to respond – s.387(b), (c) and (d).

[31] Mr Shamir acknowledges that he was notified of the reason for dismissal and that he was given an opportunity to respond but complains that the process adopted by the ATO “was inherently unfair” 6 to Mr Shamir.

[32] The ATO in its written final submissions invited “the Commission to reject the submission that Mr Shamir was not provided with a proper opportunity to respond to the proposal to terminate his employment, or the reason for that proposal being made. He was told what he needed to do in order to access ATO offices. He availed himself of that process when he wanted to retrieve his medication. He has suggested no reason why he could not have availed himself of the process in order to respond to the show cause letter.” 7

[33] In the circumstances of this matter, and having regard to all of the material before the Commission, it is clear that Mr Shamir was given detailed notice of the reasons for his dismissal in a timely manner so as to properly permit him to respond to those reasons for dismissal before the decision to dismiss was made. Not only was Mr Shamir given notice and an opportunity to respond but it is also clear that the ATO were quite happy to deal with
Mr Shamir’s legal representatives in the lead up to the decision to dismiss.

[34] Each of the criteria in s.387(b), (c) and (d) weigh in favour of a conclusion that the dismissal was fair.

Warnings as to unsatisfactory performance – s.387(e)

[35] The criteria in s.387(e) is not relevant to the present matter.

[36] Mr Shamir contends that s.387(e) is relevant in that he was not given a warning in relation to his non-performance of the duties he was specifically directed to perform by
Mr Konstantinidis. In the present matter the dismissal was for non-performance of duties not for the unsatisfactory performance of duties. There is a sufficiently clear difference between the concept of non-performance of duties and the concept of unsatisfactory performance of duties that the two concepts cannot be treated as being synonymous with each or as being indistinguishable from each other or as being interchangeable with each other.

Size of the ATO and HR expertise availabale to ATO – s.387(f) and (g)

[37] The criteria in s.387(f) and (g) are very clearly in play in this matter. The very large size of the ATO, the fact that it has a complex and comprehensive approach to managing HR matters, the fact that it has a many dedicated human resource management specialists and expertise all significantly impact on the procedures followed in effecting the dismissal of
Mr Shamir. In all of the circumstances of this matter these two criteria have neutral weighting in any consideration of the fairness or unfairness of the dismissal.

Any other matters that the Commission considers relevant – s.387(h)

[38] There are a number of matters which are directly relevant to the Commission’s consideration under s.387(h).

The decision of the ATO to make case profiling officer positions redundant

[39] It is very clear that the decision of the ATO in 2013 to remove the positions of case profiling officers was a decision that those jobs were redundant. What happened to the case profiling officer positions was very clearly an exercise where the ATO decided that it no longer required the job done by the case profiling officers to be done by anyone and that this had nothing to do with the ordinary and customary turnover of labour. The issue of dealing with employees whose jobs were redundant appears to be comprehensively dealt with in Section F of the ATO EA. The circumstances involving Mr Shamir’s transfer into an audit role, his training for that role, his capacity to perform that role, his alleged inability to perform that role and the issues surrounding the requirement to perform that role and his refusal to perform certain aspects of that role are all matters which appear to be covered by the various processes in Section F of the ATO EA.

[40] The very fact that the ATO chose to deal with Mr Shamir under the disciplinary provisions of the PS Act rather than under the processes set out in Section F of the ATO EA is directly relevant to the issue of the fairness or unfairness of the dismissal of Mr Shamir.

[41] The processes set out in Section F of the ATO EA could have led to the same outcome as in the present matter, namely, that Mr Shamir was no longer employed by the ATO, but importantly the process for termination under Section F of the ATO EA would only occur as a last resort and as an involuntary termination on account of redundancy with appropriate redundancy payments being paid.

[42] When the ATO transferred Mr Shamir from a case profiling officer job to an audit job it did so on the basis that as a Senior Case Profiling Officer at EL1 he was capable of doing any other EL1 job given appropriate training. The ATO adopted the approach that it clearly had the right to require Mr Shamir to transfer to any other EL1 role. As the ATO put it in their final written submission:

“From 1 July 2013 Mr Shamir’s substantive position was that of Audit Leader in the serious Evasion section, Indirect Tax business line (ITX SE)” and that “Mr Shamir’s ‘duties’ were the things that he was required to do in his position as an Audit Leader in ITX SE”. 8

The non performance of duties

[43] Both Mr Shamir and the ATO made contentions as to what constituted the duties of Mr Shamir for the purpose of s.29(3)(c) of the PS Act.

[44] Mr Shamir contended that “s.29 only applies where an employee is not performing any duties at all” or alternatively “that the non-performance must be a substantial non-performance of all of an employee’s duties.” The ATO contended that s.29 applied to the non-performance of any of the duties that an employee was required to perform. The ATO contended that the work which Mr Shamir performed during the period 10 April 2015 to 5 June 2015 was not the performance of duties:

“65. The ATO invites the Commission to reject the submission that Mr Shamir's conduct in performing tasks related to:

65.1. his workers' compensation claim;
65.2. the EA dispute;
65.3. his FoI application;
65.4. his various internal ATO grievances and reviews;
65.5. his response to the notice issued by the Inspector General of Taxation; or
65.6. his CPSU responsibilities;

were, or formed part of, Mr Shamir's duties for the purposes of section 29(3)(c) of the PS Act.

66. A distinction can, and should, be drawn between an employee's duties and other matters to which an employee attends during work time. The employee may be attending to the matter in the exercise of a workplace right55 or because the employer recognises that employees have obligations outside of their employment that can only, or most conveniently, be dealt with during work time. Either way, these matters do not become "duties". They are not things that the employee is required to do by virtue of his or her position. Regardless of the extent to which there were other matters to attend to during the work day, the Applicant's primary obligation was to attend to his allocated duties. The Applicant frankly conceded in his evidence that he did not do so.” 9

[45] The invitation from the ATO is one I must decline as it appears that to accept such an invitation would only lead the Commission into error.

[46] The Duty statement for the position of Senior Case Profiling Officer, the position for which Mr Shamir was employed, provides that his duties include:

• Where required, assist in liaison with external stakeholders

• Apply relevant people policies and practices including:

• employment, equity and diversity (EED), Occupational Health and Safety (OH&S) and workplace relations as they relate to the workplace



• access and equity and secrecy and privacy as they relate to the management of clients and their information. 10

[47] The ATO acknowledges that during the period 10 April 2015 and 5 June 2015
Mr Shamir was involved in responding to the notice issued to him by the Inspector General of Taxation. It would appear that such work by Mr Shamir fell within the duty:

“Where required, assist in liaison with external stakeholders.”

[48] The Inspector General of Taxation is most certainly an external stakeholder in relation to the work of the ATO and Mr Shamir was required to respond to the notice issued to him by the Inspector General of Taxation.

[49] The ATO acknowledges that during the period 10 April 2015 and 5 June 2015
Mr Shamir was involved in the EA dispute and his various internal ATO grievances and reviews. It would appear that such work by Mr Shamir fell within the duty:

“Apply relevant people policies and practices including:

employment, equity and diversity (EED), Occupational Health and Safety (OH&S) and workplace relations as they relate to the workplace”.

[50] Even in the absence of knowing what are the ATO policies it is sufficient to identify that the practices include the processes set out in the ATO EA. Thus one on the workplace relations practices would include the utilisation of the dispute settlement procedures of the ATO EA.

[51] It is not necessary for the Commission to come to a concluded view in relation to each of the examples of work relied on by Mr Shamir as constituting the performance of duties during the period 10 April 2015 and 5 June 2015. It is sufficient in this matter to conclude that the contention of the ATO that none of the work identified by the ATO as having been performed by Mr Shamir during 10 April 2015 and 5 June 2015 constituted the performance of duties, is unsustainable.

[52] What flows from this conclusion is that during the period 10 April 2015 and 5 June 2015 Mr Shamir did perform some of the duties which were included in his Duty statement but that he did not perform other specific duties allocated to him by his Team Leader. In the context of s.387(h) this is relevant to a consideration as to whether the dismissal was harsh.

[53] The ATO clearly contends that Mr Shamir’s duties were those set out in the Development/Work Plan prepared and issued to Mr Shamir by Mr Konstantinidis. 11 It is clear that Mr Shamir’s duties included, at the very least, some of the work performed by him during the period 10 April 2015 and 5 June 2015.

[54] The ATO contended, and correctly in my view, that the reference to non-performance of duties, in s.29(3)(c) of the PS Act did not require non-performance of all duties but could be met by non-performance of some duties. For the purposes of s.387(h) it is relevant that
Mr Shamir had not refused to perform all of the duties which he was required to perform and that Mr Shamir had performed some of the duties which he was required to perform and that
Mr Shamir had not performed some of the duties that he was required to perform.

The industrial dispute

[55] The existence of the dispute notified by the CPSU on 7 April 2015 has direct relevance to this matter. The dispute concerned the performance of duties by Mr Shamir. Whilst the non-performance of duties by Mr Shamir could have been dealt with under the dispute handling procedures of the ATO EA, the ATO chose to deal with the non-performance of duties under the PS Act. It is the very fact that the CPSU had notified a dispute under the terms of the ATO EA which is relevant to a consideration of the fairness of the decision of the ATO to dismiss Mr Shamir. Each of Mr Shamir and Mr Wiesse gave evidence of their understanding that an Assistant Commissioner at the ATO gave an undertaking to the profilers when their jobs were made redundant that no profiler would be required to perform audit work until they were ready for it. The recollections of Mr Weisse and Mr Shamir differ as to detail but concur as to outcome. 12 Mr Vydelingum gave evidence to a similar effect but without mentioning any Assistant Commissioner.13

[56] Clearly the dispute related to an ongoing issue over the readiness of Mr Shamir to do the audit work he was being required to perform. The mere existence of an industrial dispute as to performance of duties does not prevent the ATO from acting under s.29 of the PS Act but it is relevant in considering whether the dismissal which flowed from the ATO’s reliance on s.29 of the PS Act is fair or unfair.

Training for the audit role

[57] In circumstances where Mr Shamir had not been employed to perform the role of Audit Team Leader but had been required by the ATO to perform that role then the matter of the amount and type of training needed by Mr Shamir to perform that role and the amount and type of training given by the ATO to Mr Shamir to enable him to perform that role is directly relevant to a consideration as to the fairness or unfairness of the dismissal of Mr Shamir for the non-performance of duties associated with that role.

[58] There appear to be no prerequisite qualifications needed to become an Audit Leader or an Audit Team leader. The evidence of Mr Konstantinidis makes this very clear given that he has no formal qualifications as an auditor nor does he have any tertiary education. 14 The evidence of both Mr Konstantinidis and Ms Cavanagh describes the learning process for acquiring audit skills as involving a combination of classroom-style learning, informal iLearn training, buddying or mentoring arrangements and on-the-job training.15

[59] Mr Weisse gave very clear evidence that while he was the Audit Team Leader for
Mr Shamir that Mr Shamir had not acquired the necessary skills to perform the audit role.
Mr Weisse was of the view that Mr Shamir would take a long time to acquire the skills needed to become an Audit Leader. 16 The evidence of Ms Cavanagh is that she believed that in the time since Mr Shamir had been required to perform the duties of an Audit Leader that he should have acquired the necessary skills to do so. Ms Cavanagh’s evidence was that Mr Shamir “should have been engaging directly with taxpayers from the point that he became an auditor in July 2013” and that given his existing profiling skills he should have been able to acquire the additional skills necessary to perform the audit role in no more than 3 to 6 months.17 As the evidence of Mr Weisse made very clear, there was a strong difference of opinion as between Mr Weisse and Ms Cavanagh over the time taken by Mr Shamir to acquire and utilise the skills required to perform the duties of an Audit Leader. That difference of opinion was always going to be resolved in favour of Ms Cavanagh’s view simply because, as Mr Weisse put it, “I disagreed with her opinion, but she was my boss, so I tried to do what I could within the parameters of what she wanted to do”.18

[60] The evidence of Mr Konstantinidis aligns with the approach adopted by Ms Cavanagh. Mr Konstantinidis did not become Mr Shamir’s Audit Team Leader until 10 March 2015 and had not had any responsibility before that date in relation to the training and development of Mr Shamir to enable Mr Shamir to acquire the necessary skills to perform the Audit Leader job. On becoming Mr Shamir’s Audit Team Leader Mr Konstantinidis nevertheless was of the view that Mr Shamir had the capabilities or training to deal with taxpayer contact. 19

[61] The evidence of both Mr Konstantinidis and Ms Cavanagh was that by the time that Mr Konstantinidis took over from Mr Weisse as Mr Shamir’s Audit Team Leader that
Mr Shamir had received enough training and support that he should have been capable of performing client contact as part of an audit role.

[62] The approach adopted by Mr Konstantinidis, in discussion with Ms Cavanagh and HR at ATO, to develop a work plan for Mr Shamir which required him to have client contact and to undertake a wider range of audit work than Mr Shamir had been required to undertake by Mr Weisse, reflects the position adopted by both Ms Cavanagh and Mr Konstantinidis that
Mr Shamir had had enough training and support to equip him to do audit work.

[63] The approach adopted by Ms Cavanagh and Mr Konstantinidis does not appear to be based upon any objective consideration of the actual skills or capacity of Mr Shamir to undertake client contact or to undertake a range of the other functions involved in the audit role.

[64] The evidence of Mr Vydelingum is illuminating on the issue of being trained for an audit role. Mr Vydelingum was also a case profile officer but at the APS 6 level when he was required to perform an audit role. Mr Vydelingum did not have the same problem as
Mr Shamir with client contact 20 and Mr Vydelingum has since 2013 conducted 30 to 50 client contacts as part of his audit role.21 Mr Vydelingum made it very clear that the amount and level of training offered by the ATO has not met his needs.22 Although Mr Vydelingum is rated by his Audit Team Leader as “meeting expectations”23 Mr Vydelingum expressed the view that “I’m probably 60 per cent performing that role at the moment”.24

[65] In the context of this matter, when there is an unresolved issue as to the genuine capacity or ability of Mr Shamir to carry out the duties that Mr Konstantinidis required him to perform and whether the training and support given to Mr Shamir was appropriate or adequate, then the dismissal of Mr Shamir for non-performance of duties may appear to be unreasonable.

Square Peg in a Round Hole

[66] It is clear that if Mr Shamir was ever to become a competent Audit Leader it was going to take a considerable period of time – if at all.

[67] It is directly relevant to this matter that Mr Shamir was simply the wrong person for the job of Audit Leader. The evidence is clear that Mr Shamir was highly skilled and highly regarded case profiler. 25

[68] It is also clear from the evidence of both Mr Weisse and Ms Cavanagh that Mr Shamir was a square peg in a round hole. 26 The response from Mr Weisse to having a square peg in a round hole was to try and have Mr Shamir moved into a position where he would be a square peg in a square hole.27 The response from Ms Cavanagh was to change Mr Shamir from being a square peg to a round peg so that Mr Shamir would fit into a round hole.28 Ms Cavanagh’s description of her own employment at the ATO29 reinforces her evidence that square pegs are made into round pegs so that they fit into round holes. The position which emerges from the evidence of Mr Konstantinidis is that he considered Mr Shamir capable of performing all of the duties of an Audit Leader and expected him to do so. In other words Mr Konstantinidis approach was to consider Mr Shamir a round peg in a round hole albeit a reluctant round peg in a round hole.

[69] I clearly prefer the evidence of Mr Weisse and Ms Cavanagh on this point.

[70] Once it is acknowledged that Mr Shamir was a square peg in a round hole then dismissal for non-performance of duties appears to be a very blunt means of dealing with the situation. The use of s.29 of the PS Act against Mr Shamir was very much a case of treating Mr Shamir as a round peg who wouldn’t fit in a round hole rather than as a square peg who could not fit in a round hole.

Conclusion as to s.387

[71] The two criteria within s.387 which are relevant to the consideration of whether the dismissal was harsh, unjust or unreasonable are s.387(a), (b), (c), (d) and 387(h). The other criteria in s.387 are either not relevant or have neutral value.

[72] Each of the matters discussed under s.387(h) weigh in favour of a finding that the dismissal of Mr Shamir was harsh unjust or unreasonable and together with the matters raised under s.387(a) that weighting is strengthened.

[73] It is not necessary that the Commission be satisfied that the dismissal of Mr Shamir was harsh and unjust and unreasonable. The very language of s.387 makes clear that the Commission need only be satisfied that the dismissal is either harsh or unjust or unreasonable.

[74] In all of the circumstances of the present matter the Commission is satisfied that the dismissal of Mr Shamir was harsh. Whilst the dismissal may very well have met the requirements of the PS Act, it was an extremely harsh outcome on Mr Shamir for the ATO to have dismissed him in circumstances of his employment with the ATO and which have been discussed above. The resolution of the problem of a square peg not fitting into a round hole which was achieved by getting rid of the square peg is harsh treatment. This is especially so when there were other means of dealing with the issue of a square peg in a round hole. The harshness of the dismissal is clear in the context where Mr Shamir was specifically employed to be a square peg in a square hole and it was the ATO which created the situation of a square peg in a round hole.

An Alternative Approach

[75] The Commission is mindful of the tension between the Fair Work Act and the PS Act when considering whether or not the ATO had a valid reason for the dismissal of Mr Shamir. If my conclusion that the ATO did not have a valid reason for the dismissal of Mr Shamir is wrong I need to consider what would flow from that.

[76] Firstly, what was the valid reason for the dismissal of Mr Shamir?

[77] The ATO relied on the admitted non-performance of duties which Mr Shamir was required by Mr Konstantiinidis to perform. Shorn of all of the explanations for non-performance of duties given by Mr Shamir there remains the open admission from Mr Shamir that he did not perform the duties that Mr Konstantinidis specifically required him to perform at any time between 10 April 2015 and 5 June 2015.

[78] Seciton 29 of the PS Act specifically empowered the head of the ATO to terminate the employment of Mr Shamir for non-performance of duties. As previously discussed it is clear that s.29 of the PS Act is not dependent upon non-performance of all of the employee’s duties but can be satisfied by non-performance of some of the employees duties.

[79] Where the PS Act specifically empowers the ATO to terminate the employment of an employee for non-performance of duties then the admitted non-performance of duties by an employee would of itself provide a valid reason for the dismissal.

[80] In the Selvachandran sense the reason for dismissal is a valid reason for the purpose of s.387(a) because it is soundly based upon the operation of the PS Act, it is defensible because the ATO has followed the processes mandated by the PS Act to achieve the requisite termination under s.29 of the PS Act and the dismissal is well founded because the fact of non-performance of duties was clearly conceded by the employee.

[81] Section 387(b) and (c) are both clearly relevant and the facts of the present matter clearly establish that the ATO both notified Mr Shamir of the reason for the dismissal and did so before the dismissal took effect and that the ATO clearly gave Mr Shamir an opportunity to respond to the reason for dismissal.

[82] Each of the criteria under s.387(a), (b) and (c) weigh in favour of a finding that the dismissal of Mr Shamir was fair.

[83] The criteria in 387(d) is not relevant as there was never any refusal by the ATO to allow Mr Shamir to have a support person present to assist at discussions relating to the dismissal.

[84] For the reasons discussed earlier in this decision the criteria in s.387(e) is not relevant.

[85] For the reasons discussed earlier the criteria in s.387(f) and (g) are always relevant but in this matter those two criteria have neutral value.

[86] Each of the matters discussed earlier under the heading of s.387(h) are relevant to this consideration and weigh in favour of a finding that the dismissal was unfair.

[87] The conclusion that is reached when the factors which favour a finding that the dismissal was fair (s.387(a), (b) and (c)) are weighed against the factors which favour a finding that the dismissal was unfair (s.387(h)) the outcome is a clear decision that the Commission is satisfied that the dismissal of Mr Shamir was harsh.

[88] The existence of a valid reason for the dismissal and the satisfaction of the criteria in s.387(b) and (c) recognises the existence of the facts which permitted the ATO to utilise s.29 of the PS Act but does so in isolation of the totality of the relevant factual matrix which exists in this matter. Once weighed against the relevant matters discussed under s.387(h) it is apparent that the mere existence of a valid reason for the dismissal and the criteria in s.387(b) and (c) are more than outweighed by the many other relevant matters considered under s.387(h).

[89] The dismissal of Mr Shamir may have been for a valid reason but it was nevertheless extremely harsh having regard to all of the circumstances of the matter.

[90] Even with the ATO satisfying the criteria in s.387(a), (b) and (c) the Commission is satisfied that the dismissal of Mr Shamir was harsh.

Remedy

[91] The grant of a remedy to Mr Shamir is discretionary.

[92] In the circumstances of the present matter I consider that it is appropriate to grant
Mr Shamir a remedy and given that the requirements of s.390(1) and (2) have been met then I intend to provide a remedy to Mr Shamir for his unfair dismissal.

[93] The primary remedy provided by the Act is reinstatement. In the present matter
Mr Shamir seeks reinstatement and payment of lost wages. In particular Mr Shamir seeks reinstatement to a position other than the position he was employed in immediately before the dismissal.

[94] The ATO opposes any order for reinstatement. In its written submissions filed with the Commission on 23 December 2015 the ATO, in opposing the remedy of reinstatement contended as follows:

“Mr Shamir’s non-performance of duties, and refusal to engage in discussions about his duties, has significantly undermined the relationship of trust and confidence between employee and employer. Mr Shamir’s behaviour cannot be considered to be “proper” behaviour for any employee, especially an employee at the Executive Level, in the ATO.” 30

and

“In the circumstances, there is a meaningful risk that reinstatement would result in Mr Shamir being excess to requirements. This is a relevant consideration when determining the appropriateness of reinstatement.” 31

[95] The ATO cited the authorities of Colson v Barwon Health [2013] FWC 8734 at [17] and Newtronics P/L v Salenga, Print R4305 at [13] in support of this second contention.

[96] In its final submissions filed with the Commission on 10 March 2016 the ATO raised two very specific grounds as to the inappropriateness of reinstatement.

[97] Firstly, the ATO contended that Mr Shamir’s own submissions “reveal the extent to which Mr Shamir does not trust the ATO, lacks confidence in the ATO's approach to the management of its staff, and believes that the ATO would engage in "artifice" to secure hidden objectives.” 32

[98] Secondly, the ATO contends that Mr Shamir lacks the necessary attributes to move into “another position”. The ATO contended that the evidence of Ms Ross established that in the present circumstances employees “needed to be receptive to change, prepared to let go of the old ways of doing things and be prepared to do things differently.” 33 The ATO contended that “Mr Shamir is not a person who has shown himself to be receptive to change. He was completely unwilling to engage in discussions about his duties, and assumed himself to be at liberty to prioritise his personal interests over his duties and the operational requirements of his employer. Nothing in the evidence can give the Commission any confidence that Mr Shamir would conduct himself differently if he were to be reinstated.”34

[99] The issues raised by the ATO require careful consideration.

Trust and Confidence

[100] The starting point for any consideration of this particular issue is the oft quoted decision in Perkins v Grace Worldwide (Aust) P/L. 35 The Full Bench decision in Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter,36 whilst endorsing and applying Perkins v Grace Worldwide (Aust) P/L places that decision into proper perspective having regard to other relevant authorities.

[101] It is important to note that, other than the brief contention at paragraph 68 of its Outline of the Submissions of the Respondent filed 23 December 2015, the ATO provides no evidence to support a contention that the ATO has lost trust and confidence in Mr Shamir. Neither Mr Konstantinidis nor Ms Cavanagh as the former line managers of Mr Shamir expressed any loss of trust and confidence in Mr Shamir. Neither the notice of termination issued by Mr Miller nor the termination of employment letter issued by Mr Miller contend that there has been a loss of trust and confidence in Mr Shamir. The very neutrality of the language used in both the notice of termination and the letter of termination make clear that the ATO simply dealt with Mr Shamir’s conduct as a matter which could be dealt with by termination of employment arising from the operation of s.29 of the PS Act.

[102] There is nothing in the evidence or contentions of Mr Shamir which could lead to a conclusion that Mr Shamir was not genuinely seeking reinstatement and that if reinstated Mr Shamir would not act in an appropriate manner. The expectation of the ATO that employees at the EL1 level “needed to be receptive to change, prepared to let go of the old ways of doing things and be prepared to do things differently” cannot be taken as requiring employees to forego rights and entitlements that arise under the ATO EA or the PS Act. Nor can it be reasonable to conclude that where an employee exercises their rights under the ATO EA that the employee is not being receptive to change. The evidence in this matter shows that Mr Shamir as a Senior Case Profiling Officer was prepared to accept change in that he accepted being moved into an audit team and being trained to perform an audit role.

[103] Nothing in the material before the Commission comes even remotely close to establishing that an employment relationship if re-established between the ATO and
Mr Shamir would be unworkable. 37

Excess to Requirements

[104] The highest that the ATO puts this issue is that “In the circumstances, there is a meaningful risk that reinstatement would result in Mr Shamir being excess to requirements. This is a relevant consideration when determining the appropriateness of reinstatement.”

[105] It certainly is consistent with the evidence of Ms Ross that there is a risk that
Mr Shamir may be surplus to requirements if he is reinstated. This possible risk is a relevant consideration when determining the appropriateness of reinstatement. The authorities cited by the ATO say nothing more than that, where the employer contends or leads evidence that the employee will be surplus to requirements if reinstated, then, the Commission must take that into account when considering the appropriateness of reinstatement.

[106] In the present matter the evidence of Ms Ross strongly suggests that if Mr Shamir is reinstated into “another position” pursuant to s.391(1)(b) then it is most likely that Mr Shamir would be excess to the requirements of the ATO.

[107] In the present matter reinstatement would still have a real and beneficial impact on
Mr Shamir and would not at the same time create any unforeseen difficulty for the ATO. In fact the ATO has specifically and voluntarily agreed to a process to deal with such a situation through the making of the ATO EA. The detailed processes set out in Section F – Workforce Planning and Adjustment provide an appropriate mechanism for the ATO to deal with
Mr Shamir on reinstatement even if Mr Shamir is excess to requirements. Not to reinstate
Mr Shamir, merely because he may be in excess to requirements, would be singularly inappropriate as it would deny Mr Shamir the benefit of the terms of the ATO EA which were specifically designed to deal with Mr Shamir’s situation. It is relevant in this consideration to note my earlier comments that the terms of Section F of the ATO EA could have been, and should have been used by the ATO when it first determined that Mr Shamir and the other case profiling officers’ jobs were redundant to the needs of the ATO.

The need to be receptive to change, prepared to let go of the old ways of doing things and be prepared to do things differently

[108] As a separate ground for opposing reinstatement this ground must fail. As a general proposition the contention that ATO employees at EL1 level “needed to be receptive to change, prepared to let go of the old ways of doing things and be prepared to do things differently” is unexceptional. Such sentiments are the hallmark of a flexible employee. However the contention of the ATO must be considered in light of the terms of the ATO EA which provided specific rights and entitlements to employees of the ATO. Those rights and entitlements include the ability to dispute some decisions and some conduct of the ATO and to use the terms of clause 145 of the ATO EA to deal with some workplace disputes.

[109] An employee exercising their rights under the terms of the ATO EA or the PS Act or any other statute or statutory instrument cannot be considered to be an employee who is not receptive to change, or who is not prepared to let go of the old ways of doing things, or who is not prepared to do things differently. Yet that appears to be how the ATO characterises
Mr Shamir because of his disputation about being required to perform certain specific duties which he considered he was not capable of performing.

[110] In all of the circumstances of the present matter the Commission is satisfied that reinstatement is the appropriate remedy in this matter. An order will be issued pursuant to s.391(1)(b).

[111] Mr Shamir has also sought an order for lost pay under s.391(3). The Commission considers that it is appropriate in all of the circumstances of this matter for an order to be made pursuant to s.391(3). I note from the material before the Commission that Mr Shamir has not worked since his dismissal. As required by s.391(4) I take this into account. In all of the circumstances of the present matter I do not intend to reduce the amount of lost remuneration by reason of Mr Shamir’s lack of work since the dismissal. The parties are to confer and if an amount of lost remuneration is agreed then I will issue an order pursuant to s.391(3) for the agreed amount. If the parties cannot agree on the amount of lost remuneration I will further list the matter to determine the amount of lost remuneration after hearing from both parties.

[112] The Commission also considers it appropriate to make an order pursuant to s.391(2). Not to do so may have a significant negative impact on Mr Shamir if reinstatement leads to the ATO treating Mr Shamir as an excess employee and dealing with him under Section F of the ATO EA. An order made pursuant to s.391(2) will ensure that no unintended negative consequences for Mr Shamir flow from the reinstatement process.

[113] The orders for reinstatement and to maintain continuity of service will be issued at the same time as this decision. The order for lost pay will be issued at a later date, as discussed above.

COMMISSIONER

Appearances:

D. Langmead of Counsel for the Applicant.

C. Dowsett of Counsel for the Respondent.

Hearing details:

2016.

Melbourne:

January 20 and 21.

Final written submissions:

Applicant by 19 February 2016.

Respondent by 11 March 2016.

 1   Exhibit R2, para 106; Transcript at PN2466 – PN2474, PN2339 – PN2348.

 2   Respondent’s final written submissions, 10 March 2016, at paras 95-96.

 3   [1959] HCA 8.

 4   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 5   Dictionary definitions of “valid” - “1. sound, just, or well-founded: a valid reason; a valid objection. 2. having force, weight, or cogency; authoritative. 3.  legally sound, effective, or binding; having legal force; sustainable in law.”, Macquarie Dictionary Online; and “1. (of a reason, objection, etc.) sound or defensible; well grounded.”, Concise Oxford Dictionary, Ed. 8.

 6   Applicant’s final written submissions, 19 February 2016, at para 124.

 7   Respondent’s final written submissions, 10 March 2016, at para 76.

 8   Ibid, at paras 14 and 15.

 9   Ibid, at paras 55 and 56.

 10   Attachment RS1 to Form F2.

 11   Respondent’s final written submissions, 10 March 2016, at para 69.

 12   Transcript at PN1231 and PN253.

 13   Ibid at PN1037 – PN1039 and PN1144 – PN1145.

 14   Exhibit R3 at para 7.

 15   Exhibit R3 at para 7 and Exhibit R2 at para 32.

 16   Transcript at PN1229 – PN1259.

 17   Exhibit R2, para 62 and Transcript at PN2324.

 18   Transcript at PN1250.

 19   Ibid PN2419.

 20   Ibid PN1148 – PN1153.

 21   Ibid PN1113.

 22   Ibid PN1118.

 23   Ibid PN1102, PN1116.

 24   Ibid PN1121 and 1153.

 25   Ibid PN1254.

 26   Ibid PN1250, PN1254, PN1260, PN2332.

 27   Ibid PN1260.

 28   Ibid PN2333, PN2334.

 29   Ibid PN2366-PN2368.

 30   Respondent’s Outline of Submissions filed 23 December 2015 at para 68.

 31   Ibid, para 72.

 32   Respondent’s final written submissions, 10 March 2016, at para 111.

 33   Respondent’s Outline of Submissions filed 23 December 2015 at para 116.

 34   Respondent’s final written submissions, 10 March 2016, at para 120.

 35   (1997) 72 IR 186.

 36   [2014] FWCFB 7198.

 37   Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter, [2014] FWCFB 7198, at [23].

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