| [2016] FWC 8517 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Shayne Finemore
v
CMIB Insurance Services P/L
(U2016/2240)
COMMISSIONER GREGORY |
MELBOURNE, 29 NOVEMBER 2016 |
Application for relief from unfair dismissal.
[1] Ms Shayne Finemore was initially employed by Capital Mutual Insurance Brokers in 2010 as an Assistant Account Executive. She remained with the business as it restructured and relocated and became known as CMIB Insurance Services Pty Ltd (“CMIB”). In 2012 she was promoted to the position of Account Executive and worked closely in this role with one of the Directors, Ms Penny Collins. On 28 April 2016 she forwarded a letter of resignation to the Directors, indicating her last day at work would be 31 May 2016. However, on 3 May 2016 she received a letter from the Directors, which stated that following a “disciplinary hearing” earlier that day she had been dismissed, with effect immediately, on grounds of “Serious Misconduct”.
[2] Ms Finemore subsequently lodged an unfair dismissal application on 12 May 2016. This decision deals with that application.
[3] Mr T. Finemore from Richmond and Bennison Solicitors appeared on behalf of Ms Finemore. Mr R. Catanzariti from DLA Piper Australia appeared on behalf of CMIB. Both were granted permission to appear under s.596(2)(a) of the Fair Work Act 2009 (Cth) (“the Act”) as the matter involves a degree of complexity and their involvement might enable it to be dealt with more effectively. The Commission was also assisted in the proceedings by a “Commission Book” prepared by DLA Piper.
[4] Section 385 of the Act, “What is an unfair dismissal” provides that:
“A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[5] Section 388 of the Act continues to indicate that the Minister may declare a Small Business Fair Dismissal Code (“the Code”), and the dismissal of an employee is consistent with the Code if immediately before the time of dismissal the employer was a small business employer and complied with the Code in relation to the dismissal. Section 23 of the Act also defines a small business employer as an employer employing fewer than 15 employees at the time.
[6] The Code established under s.388 states in part:
“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 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.”
[7] It is acknowledged by the parties that CMIB is a small business employer in terms of the definition in s.23 of the Act. The Commission is accordingly required to determine whether Ms Finemore’s summary dismissal on grounds of serious misconduct was carried out in a manner consistent with the Code. If so, then she has not been unfairly dismissed. However, if her dismissal has not been carried out in a manner consistent with the Code then the Commission is required to determine whether she has been unfairly dismissed.
[8] The submissions made on behalf of Ms Finemore refer initially to the letter of termination given to her on 3 May 2016, and note that while the letter does not contain particulars of her alleged misconduct, it does make reference to her “dishonestly/acting contrary to CMIB’s interests.” It submits, in response, that this allegation was never put to Ms Finemore.
[9] It also notes CMIB’s F3 Employer Response document states it logged onto her system “and found email client list sent to Shay’s personal email address at 10.28 p.m. 28 April 2016. Shayne was instantly dismissed.” Ms Finemore submits, in response, this conduct is not admitted.
[10] However, she does acknowledge she sent what was described as “a renewal list” for the period January – May 2016 to her personal Gmail account. She described this document as a series of Excel spreadsheets used in her day-to-day business operations, and submits it can be distinguished from “a client list.” She also acknowledges she sent this document to her home email address on 27 April 2016, and then sent an updated version on the following day.
[11] Ms Finemore also submits that various issues raised in a performance meeting with the Directors of the business on 1 April 2016 were not raised again in a further meeting with them on 3 May 2016, when she was dismissed. Therefore, those matters are not relevant to the circumstances concerning her summary dismissal. In addition, she submits the definition of “serious misconduct” in the Fair Work Regulations 2009 (Cth) does not extend to conduct of this kind.
[12] Ms Finemore continues to submit CMIB’s concerns about her conduct in regard to the Excel spreadsheets are “baseless and the circumstances poorly investigated.” She submits her dismissal was harsh, unjust and unreasonable, there was no valid reason for her termination, and she was not provided with details about the alleged reason for her dismissal prior to the meeting on 3 May 2016. In addition, she had no opportunity to have a support person present in those discussions, and was given little opportunity to respond to the allegations made.
[13] Her submissions also refer to the following statement in the letter given to her on 5 May 2016:
“We wish to remind you that post employment you are expected to adhere to the restraint period and area as detailed in your Employment Agreement. You are encouraged to review the restraints detailed in your Employment Agreement and clarify if necessary.”
[14] She submits, in response, there are no restraint periods in any of her employment arrangements and, in any case, it would be inappropriate to be subjected to such restraints, given she has only ever worked in the broking industry.
[15] Ms Finemore states in her witness statement that she commenced work with CMIB in 2010 as an Assistant Account Manager, and was promoted to Account Manager in 2012. In this role she worked with the existing portfolio of clients managed by one of the Directors, Ms Collins. She said the work was demanding and she would often take work home, particularly in the busy April – June period. She said the Directors were aware of this, and in 2015 assisted by providing her with access to the Company server. The Directors also observed her taking hardcopy files home on many occasions. She also stated that until she was provided with home access she used a USB stick to work from home. She was also given a significant degree of responsibility and latitude in terms of how she carried out her role.
[16] In July last year she sought a pay increase after her performance review had been completed, and was disappointed with the Director’s response. She said from that point her relationship with Ms Collins “began to deteriorate and I gained the impression that she was then trying to performance manage me out of my employment.” 1
[17] Ms Collins also told her she was aware she was accessing documents on the Company server late at night, and in the early hours of the morning, and asked that this stop. She also said she was told not to access the server at work from home, because she was putting herself under too much pressure. However, Ms Finemore said it was not possible to complete her work during office hours, and the Directors were aware of this. She continued to work at home and the Directors were again aware this was happening.
[18] However, Ms Finemore said from this point Ms Collins began to micromanage her work and imposed additional requirements on her. She subsequently decided in April 2016 to resign from her employment, because of a variety of factors impacting on her at the time. She also said she had not looked for other work up to that point, but intended to do so after she had confirmed the arrangements about her departure with the Directors.
[19] Ms Finemore continued to state:
“I knew my employer’s business inside out and had an intimate knowledge of all clients. As an aid to dealing with a very large amount of renewables I had created over a long period of time Excel spread sheets that I used as an aid to keep track of renewables, types of policies and progress updates and/or client queries regarding their upcoming renewal. I may have used some information shown on a renewal report to obtain some detail used on the Excel document I designed, however this is not a ‘client list’ and I had drastically amended that to create the working document in question, you can see this review of the client list, renewal list and my work documents, obvious differences… Mostly they do not specifically identify the clients but there is sufficient abbreviation of the client name for me to know which client was involved. It is not a client list but a working sheet. It does not provide client addresses or contact details, it is merely an aid I had created as a reminder system to enable me to plan my work.” 2
[20] She finally told one of the Directors that she was resigning and would formalise her decision on the next day. She then sent a draft of her resignation letter, and an updated Excel spreadsheet, to her personal Gmail account because she wanted to be able to work on both documents from home.
[21] She said she submitted her resignation letter on the following day, and then met with the Directors to ‘go over all details.’ 3 She said it was agreed she would work until 27 May 2016 ‘or longer if I was available and I was needed.’4 However, from this time Ms Collins’ attitude towards her again changed, and she became more difficult to deal with.
[22] Her evidence continued to deal with what occurred on 3 May 2016. She said she was not feeling well that morning and contacted Ms Collins to let her know she hoped to be in by lunchtime. She subsequently advised she had been to her Doctor and had a certificate for a full days’ sick leave, and would now be off work for the rest of the day. However, Ms Collins demanded she return to work with her laptop and the medical certificate. She also discovered Ms Collins had arranged to change her password access to the system.
[23] When she arrived at the office the Directors were waiting for her at the front desk. She handed over the laptop and the medical certificate and was then asked to join a meeting in the boardroom. She was also asked if she wanted a support person present. She said she had no idea what the meeting was about, and declined this offer as it was too late to organise anyone at short notice. She was then told she was being dismissed because of an email sent to her Gmail account on 28 April 2016. Ms Finemore said she tried to explain she had sent the document because she intended to work from home over the weekend to update the renewal details before leaving her employment. She also said she had accessed the document twice to ensure she had the most up-to-date version as she had been working on it during the day. She said there was no reference in those discussions to a written warning she had been given on 1 April 2016.
[24] She said that her dismissal was ‘not up for discussion’ 5 in the meeting, and she was simply told she had been dismissed. She told the Directors it was not her intention to use any of the information at any time in the future, and she had only ever acted with the intention of benefiting the business. However, these comments were ignored, and the Directors proceeded to dismiss her. She also noted that Ms Collins already had an envelope with her in the meeting, which she presumed was her termination letter, confirming that the decision had already been made to dismiss her, regardless of any explanation she provided.
[25] Ms Finemore also said she did not recall, at first, that she had sent the document to her Gmail account on 27 April 2016, and then sent it again on the following day. However, she did this to ensure she had “the most up-to-date document.” 6 She also acknowledged this occurred on the day prior to the meeting on 29 April 2016. She also stated:
“… this document is not a report or a client list. There are no phone numbers or client addresses noted, not even full client names. The information only provides all client details if I had access to the CMIB system. I was not even asked to return the “offending” document at this meeting.” 7
[26] She also said there was no restraint period in her contract, although there was “mention of confidentiality under section 6.7 and 8.0, however, I did not and had no intention of passing the information on so there was no breach of contract.” 8 In her view the document was simply ‘an Excel work document I had created (using some information from the renewal report) to allow me to track my work and note pending renewals.’9
[27] She also said that updating the document over the weekend was intended to relieve the stress she was feeling about her workload, and she was never told to not email documents from work to her Gmail account. In addition, Ms Collins was aware this was occurring, and the Directors should not have been surprised about the information found on the USB, as it was known to be in her possession, and had been for some time. She also stated in cross-examination that the document sent to her Gmail account was not a client list, but rather an amended renewal list.
[28] However, she did agree in cross-examination that having access to the information could be very useful, and an advantage for someone setting up business for the first time or going to work for another insurance broker. She also agreed she had been told not to access the server from home, and decided to send the document to her Gmail account as she didn’t want to breach the direction she had been given. She said, ‘[t]hey didn’t want me to be accessing the server so I jumped on and jumped off for that reason.’ 10 She also acknowledged in cross-examination she had been told not to work from home, but continued to do so.
[29] She also agreed the Excel spreadsheet contained highly confidential information, but she had been able to access this information as part of her daily responsibilities. She also acknowledged that inappropriate use of confidential information was a potentially serious matter.
[30] Ms Finemore submits, in conclusion, she was never expressly precluded from working at home. In addition, there was nothing sinister or untoward about her actions, and she was simply looking to have client records up-to-date and in order before she left the business. The fact she was regularly seen taking files to and from work also confirmed that the Directors were clearly aware she was working from home on occasions.
[31] She also submits that while her employment contract might have contained a commitment to confidentiality, she has not breached that commitment, and no confidential material or information has been disclosed to anyone. She also submits there was no specific policy in place prohibiting downloading of information from the server at CMIB to a personal file. In addition, no opportunity was given in the meeting on 3 May 2016 to provide anything by way of explanation before she was told by the Directors she was to be dismissed on grounds of serious misconduct. What occurred was instead “a complete ambush.” 11
[32] She also submits that if the business was concerned to protect its interests, once it had been told about her decision to resign, other options could have been considered, such as not requiring her to work out her notice period. She might also have continued working by mutual agreement beyond 25 May 2016, and this should be considered in terms of any order made in regard to compensation. She was also unemployed for a period of 2 months after being terminated from CMIB.
[33] CMIB submits, in response, it is a small business employer within the meaning of s.23 of the Act, and has only four employees, in addition to the two Directors. However, it is a member of a group, which enables it to access a range of additional services provided in exchange for payment of a fee.
[34] It submits that after receiving Ms Finemore’s resignation it became aware she ‘had sent certain highly sensitive and confidential information’ 12 from her work email account to her personal Gmail account on two separate occasions. This occurred at 5:30 pm on 27 April 2016, and then again on the following evening at 10:28 pm. It only became aware of this a week later on 3 May 2016.
[35] The Directors of CMIB then met with her later that day. Ms Finemore had previously advised she was going to be off work on sick leave but, when asked, offered to come in and meet. CMIB submits she was offered the opportunity to have a support person in the meeting but declined this offer. It continued to submit she was asked on two occasions whether she had sent a client list to her personal Gmail account, but on both occasions denied this had occurred until made aware the Directors had evidence of the document being sent. However, at that point she only admitted sending the document to her Gmail account on one occasion, and said she did so to enable her to work on updating the document from home.
[36] CMIB continues to submit the information sent to her account was highly sensitive and potentially enabled clients to be contacted at renewal time for the purpose of soliciting their business. It did not consider that she provided a satisfactory explanation for her behaviour, as it was in breach of an earlier direction given to her on 1 April 2016 that she was not to work from home. In addition, she had now given notice, and there was consequently no requirement for her to work from home. It was accordingly entitled to conclude the document had been sent for an improper purpose, in breach of her employment obligations, and she had not been completely frank in the answers provided in the meeting.
[37] It also submits her actions constitute serious misconduct, in that the only inference to be drawn is that she intended accessing the materials and information for some purpose in the future and this was a serious breach of her employment obligations. It accordingly decided at the conclusion of the meeting, after considering her explanation, that it had no option but to dismiss her with immediate effect. It continues to submit her dismissal was consistent with the Small Business Fair Dismissal Code, and it had reasonable grounds to conclude she had engaged in serious misconduct.
[38] CMIB also submits that after Ms Finemore was dismissed it became aware she had downloaded and retained further confidential information. This was contained on a USB stick she had previously used to store personal photos. However, it discovered it had also been used to download a range of confidential information, and this had occurred on the evening of 28 April 2016 after Ms Finemore accessed the server at work from home. This was the day prior to confirming her resignation. CMIB continues to submit she had no permission or authority to download this information onto the USB device, and there was no legitimate reason for her to do so. Again, it submits the only inference to be drawn is that she did so in order to use that information for some purpose in the future. It also submits it is entitled to rely on this discovery, even though it came to light after her termination, because it provides further confirmation it had a valid reason to dismiss her.
[39] It also submits that even if the Commission finds her actions did not amount to serious misconduct, they clearly amounted to misconduct, and this should preclude any award of compensation as her conduct contributed to the decision to dismiss her. It also submits that whatever the outcome, Ms Finemore cannot possibly be compensated for any period beyond 27 May 2016, because that was the effective date of her resignation.
[40] Ms Collins said Ms Finemore was employed as an Account Executive, whose responsibilities included quoting for new business, processing renewals, assisting with claims, and dealing with general insurance enquiries. In this role she had full access to the broking system which, in turn, gave her access to highly sensitive information about the placement of policies, including insurers, renewal dates, income, and total premiums paid.
[41] In 2013 Ms Finemore was provided with a laptop to assist her to work from home during busy periods, and until the middle of 2015 she would usually advise the business when she was working from home and claim overtime payments for the time worked.
[42] She said that after a performance review in November 2015 Ms Finemore asked for a pay increase of $20,000, but the business was not in a position to pay this amount, and offered an increase of $5,000 instead, with a further review in 12 months. This was backdated to July 2015. She also said Ms Finemore was praised for her work. However, the Directors then met with her in February 2016 to discuss various performance issues that had emerged. They then met with her again on 1 April 2016 to discuss other issues concerning her punctuality and attendance at work. It was also requested in these discussions that she immediately stop working from home.
[43] Ms Collins said she then needed to access Ms Finemore’s computer on 22 April 2016, while she was on annual leave, and her password was changed to enable this to occur. Ms Collins said Ms Finemore “subsequently bombarded” 13 her with text messages asking for her remote access to the system to be restored. She was, in turn, again reminded she had been told not to work from home.
[44] Ms Collins said that when Ms Finemore returned from annual leave on 27 April 2016 she was told there would be a further performance review meeting on the following Friday, 29 April 2016, to discuss her recent behaviour. However, on the day prior to this meeting Ms Finemore told Mr Hounihan, also a Director of CMIB, that she intended to resign from her employment. Her resignation letter was then emailed on the morning of 29 April 2016 and the focus of the meeting, already arranged on that day, moved from a disciplinary meeting to a discussion instead about managing her departure. Ms Collins said it was agreed in those discussions that Ms Finemore would finish up on 27 May 2016, unless there was a mutual agreement to extend that timeframe. She also told Ms Finemore to take on a purely processing role as she did not want her to be involved in matters she would not be able to follow through in the future. All staff were then told about her decision to resign.
[45] Ms Collins said that on 3 May 2016 she received a text message from Ms Finemore advising she was going to the Dentist as she had a toothache and would be in late. She then sent a further message indicating she had been sent to her Doctor to obtain antibiotics and would not be in until later in the morning. Ms Collins said she was then concerned about various emails from clients that might need to be actioned, and asked Ms Finemore for her password access. When no response was received she arranged for her password to be changed. While viewing Ms Finemore’s sent email items to see if a particular request had been actioned, she saw an email sent to her Gmail account. She opened the email and discovered it contained a six month list of all renewals from January to June 2016. She also noted it had been sent to her Gmail account within 2 minutes of sending her draft resignation letter.
[46] Ms Collins said she discussed the situation with Mr Hounihan and both concluded it was a serious breach, which provided sufficient grounds to dismiss Ms Finemore. However, while Ms Collins considered it was potentially “a dismissable offence” 14 she wanted to meet with Ms Finemore to consider any explanation she wanted to provide about her actions. She then received a further text message from Ms Finemore at around 1:00 pm advising that her Doctor had given her a medical certificate for the entire day, but she was prepared to meet later that afternoon, in response to Ms Collins’ request she come into the office.
[47] Ms Collins said that when she arrived Ms Finemore was offered the opportunity to have a support person present in the discussions, but declined. Ms Megan Long also attended the meeting as an independent observer. The meeting commenced by Mr Hounihan asking Ms Finemore why she emailed the client list to her Gmail account, which she initially denied. However, when it was indicated that the email could be shown to her she recalled she had sent an Excel spreadsheet to her Gmail account because she had been told not to work from home. Ms Collins said Ms Finemore then refused to answer when asked why she sent the email on the evening prior to her resigning. She again had no response when reminded she had been specifically instructed not to work from home.
[48] Ms Collins said the Directors did not accept her explanation, and agreed she should be terminated on grounds of serious misconduct. She said Mr Hounihan then offered to escort her to her desk to pack up her belongings, but she declined this offer. Ms Collins then returned to her desk and emailed her notes of the meeting to Ms Long and Mr Hounihan.
[49] Ms Collins also indicated in cross-examination she had not asked for the USB device to be returned by Ms Finemore because she did not know it existed. She also said it had since been discovered there were actually three different USB devices in Ms Finemore’s possession.
[50] Ms Collins said she was then contacted on 3 June 2016 by an employee from another brokerage, who said she had been given a USB stick by Ms Finemore to upload some personal photographs, and Ms Finemore was now pressing for its return. Ms Collins said the broker suggested she should review the contents of the USB before the photos were uploaded. When Ms Collins uploaded the USB she “was shocked to find company documents copied to the USB stick at approx. [sic] 11:30p.m. The documents included client lists, submissions, templates and a number of other working documents together with personal documents and files of Shayne’s.” 15 She made a screenshot of the documents and told the broker she would not be returning the USB stick to Ms Finemore.
[51] Mr Hounihan also attended the meeting on 1 April 2016 when Ms Finemore was given a warning, and told by Ms Collins she was not to do any further work from home. She was also asked to return the laptop she had been provided with. Ms Finemore subsequently made further requests to be able to work from home, but these were refused. She also did not return the laptop until she had resigned. He also said she did not complete and sign a performance improvement proposal put to her in the meeting.
[52] Mr Hounihan continued to indicate that on 28 April 2016 Ms Finemore told him she intended to resign from CMIB, and would provide her letter of resignation in the next day or two. He said the Directors were due to meet with her again on 29 April 2016, as a follow up to the 1 April 2016 meeting, but her resignation letter was received that morning. The meeting accordingly turned to deal with the arrangements surrounding her departure, and she was again asked to return the laptop.
[53] On 3 May 2016 Ms Collins told him what she had found when accessing the system to search Ms Finemore’s sent emails. He subsequently viewed the emails and agreed there was no reason for them to have been sent to her Gmail account. When he asked her why she had sent the client list to her Gmail account she initially denied this had occurred. However, she later said it had been sent so she could work on it from home. However, she did not respond when asked why she did this at the same time as emailing her draft resignation letter to her Gmail account. He also said he was not aware Ms Finemore was using USB devices to download company data and information.
[54] He said the client information sent to her Gmail account contained intellectual property regarding the business, including its clients, its income, renewal dates and other information. He also said the business was based on an authorised representative model, which meant it was relatively easy to start up your own business and operate as an individual licensee holder and, in this context, the information downloaded “was a serious and significant threat.” 16
[55] Ms Long said she was also present in the meeting with Ms Finemore on 3 May 2016, at the request of the Directors. She said Ms Finemore was “shocked and defensive” 17 when told about the client information emailed to her Gmail account, but eventually admitted emailing it, so as to keep up with her work by working from home.
[56] CMIB submits, in conclusion, that Ms Finemore managed a large portfolio of clients and had access to a significant amount of confidential information and data. The detailed confidentiality clauses in her contract of employment reflected the significance of this obligation. It also submits it is a small business employer, in terms of the definition contained in the Act, and her dismissal was not unfair as it was carried out in a manner consistent with the Code provided for under the Act. It continues to submit Ms Finemore’s actions come within the definition of “serious misconduct” in Regulation 1.07 of the Fair Work Regulations 2009 (Cth).
[57] It continues to submit Ms Finemore clearly engaged in serious misconduct by sending the materials to her Gmail account at the same time as she was finalising her resignation from the business. It also relies on the Full Bench decision in John Pinawin T/A RoseVi.Hair.Face.Body v Domingo 18 (“Pinawin”) in support of this submission.
[58] It also submits she was provided with the opportunity to meet and provide an explanation about what had occurred. It submits she did eventually provide an explanation, but this was not considered to be an acceptable explanation. It subsequently discovered she had also downloaded an “enormous amount” 19 of additional information at about the same time as she forwarded the Excel spreadsheet to her Gmail account. In its submission this subsequent discovery can be relied upon to reinforce the conclusion that the Directors had a reasonable belief when they acted to dismiss her on the basis of serious misconduct. It also notes that in the meeting on 3 May 2016 she initially denied sending the emails to her personal account, and also denied that the documents contained client contact details.
[59] It also submits she acted in contravention of the direction to not access the server remotely from home when she emailed the documents to her Gmail account. She also acted in breach of the direction she had been given to not work from home. She could also have been open and upfront about what she was doing, but chose not to because her actions were designed to ensure the information was retained by her once she was no longer able to access the system, following her resignation.
[60] It also submits her explanation that she wanted to update client information before leaving her employment is not plausible, because this would have involved sending the data and information to her Gmail account, amending that information, and then sending it back to CMIB’s system. In its submission it would obviously have been much simpler and more efficient to update the materials on the system, if that was actually her intention.
[61] CMIB also notes that her witness statement contains no mention of the other information and materials downloaded to the USB stick at the same time as the client details were sent to her Gmail account. It submits she made no mention of this because she was not aware, at the time, that the business now knew about the existence of the USB sticks, and the information and data loaded onto them.
[62] It also submits Ms Finemore initially tried to downplay the significance of the renewal list, but did admit in cross-examination it identified clients and contained other client information, including email addresses and other contact details. In its submission she tried to hide the importance of the document in an effort to conceal her real intention for wanting to retain it. It also submits it had reasonable grounds to believe she had engaged in serious misconduct in deliberately and wilfully sending highly confidential information to her Gmail account, and did so by accessing the server from home. This also breached an earlier direction that she was not to access the server from home. It submits, in summary, this was a significant incident, which involved her obtaining confidential client information belonging to a small business, operating in an industry where clients can readily be moved on, particularly at renewal times.
[63] CMIB also submits Ms Finemore has clearly acted in breach of the terms of her employment agreement when it states “[y]ou covenant not to use any confidential information other than in connection with your employment on behalf of the company.” 20 It submits her actions were designed to ensure she had ready access to the information when she left her employment at CMIB. It also relies on the decision in Trompp v Endeavour Coal Pty Ltd21 (“Endeavour Coal”) to submit that even though she might not have breached her confidentiality obligation at this point she was in the process of doing so, and would have done so but for the fact she was discovered. CMIB submits that in Endeavour Coal the Commission found that an employee who had loaded materials on to his private utility vehicle with the intention of stealing them, only returned them when he realised he had been observed. The Commission was satisfied, in response, this represented “dishonesty in the form of theft or planned theft”.22
[64] Ms Finemore was employed by CMIB for a significant period of time. She was promoted to the position of Account Executive and it appears that for most of her time at CMIB she was a valued and trusted employee. However, it is also clear that the relationship soured in the last six months of her employment.
[65] The submissions and evidence relied on by both parties have been set out in some detail already and are not restated now. However, I have had regard to the following matters in particular, in coming to a decision.
[66] Ms Finemore asked for a significant increase in salary in a performance review in November 2015. CMIB indicated, in response, it was not prepared to provide her with an increase of that amount, but did give her a smaller, but still significant increase, together with a commitment her salary would be reviewed again in 12 months. However, it appears the relationship between Ms Finemore and Ms Collins, who was the Director she worked most closely with, deteriorated steadily from this point.
[67] In February 2016 there were discussions between the Directors and Ms Finemore about various performance issues. There was then a further meeting at the beginning of April 2016 about issues to do with her punctuality and attendance at work. A short time later she decided to resign, and provided confirmation of this in a letter of resignation on 28 April 2016. However, she was summarily dismissed on grounds of serious misconduct, just over a week later.
[68] As indicated, Ms Finemore met with the Directors at the beginning of April 2016 to discuss issues about her performance and behaviour. The evidence establishes she was directed at this meeting to stop working from home, and to stop accessing the server at work from home. She was also asked to return a laptop computer she had been provided with in November 2016 to assist her to work from home.
[69] The meeting also discussed issues to do with her punctuality and attendance at work, which appeared, in part, to be related to her working late at night at home. She was also asked to sign a performance improvement plan by way of endorsement, however, this was never done.
[70] It is apparent Ms Finemore had become increasingly disenchanted with her employment at CMIB, and this prompted her decision to resign. She informed Mr Hounihan of her decision, and told him it would be confirmed in writing on the next day. On the same day she emailed a draft of her resignation letter, and an Excel spreadsheet, to her Gmail account. She said she did this because she wanted to work on both documents at home. If this was her intention then it was in breach of the direction she had been given earlier in the month to stop working from home.
[71] She then provided her termination letter to the Directors, and it was agreed in discussions later that day she would finish up on 27 May 2016, unless there was any mutual agreement to extend that period. On that evening she again accessed the server at CMIB from home and downloaded an updated version of the document she had sent to her Gmail account by email on the previous day. This was again in breach of the direction she had been given to stop working from home. It was also in breach of the direction to not access the server at CMIB from home. However, I am also satisfied that a breach of these directions alone does not necessarily constitute “serious misconduct”.
[72] A further issue arises about her motives in sending the Excel spreadsheet to her Gmail account. She stated in her evidence it was ‘a working sheet’ and did not contain client addresses and contact details, and was “merely an aid I had created as a reminder system to enable me to plan my work.” 23 Ms Finemore also indicated in her evidence that she sent the document to her Gmail account to ensure it was updated and complete by the time she left her employment.
[73] However, the evidence of Ms Collins, and the answers provided by Ms Finemore in cross-examination, suggest the Excel spreadsheet was more than a working document containing little or no client information. Ms Finemore acknowledged in cross-examination that it did identify clients, and did contain other client information, together with email addresses and contact details. She also agreed it would be a useful document for anyone looking to work elsewhere. I am satisfied, in response, that these answers cast doubt on her explanation that the document was sent to her Gmail account, on two separate occasions, to simply enable it to be updated prior to her departure from CMIB.
[74] As indicated, the evidence makes clear that for most of the time she was employed at CMIB Ms Finemore was a dedicated and hard-working member of the team. However, it is also clear her enthusiasm and commitment diminished in the period leading up to her decision to resign. This is not necessarily a criticism, but rather an acknowledgement that her failure to get the recognition she believed she deserved, both in terms of remuneration and job title, led her to respond in this way.
[75] However, I am also satisfied in all the circumstances that there is good reason to doubt whether Ms Finemore’s real intention in sending the Excel spreadsheet to her Gmail account was to enable her to work on it from home to ensure it was up to date at the time of her departure. Her evidence indicates she had been working on the document at work, in any case, and had then accessed the updated version from home on the following day to ensure the most up-to-date copy was sent to her Gmail account.
[76] It is also evident that the Excel spreadsheet was much more than a working document and did, in fact, contain ‘useful’ client information and contact details. It was also sent to her Gmail account at the same time as she was confirming her resignation with the Directors. It was obviously possible in those circumstances that after receiving confirmation of her resignation the Directors might decide not to require her to work out her period of notice, and to instead provide her with payment in lieu on the basis that she leave immediately. If that occurred her ability to access the system would obviously be at an end. Ms Finemore was presumably aware of this possibility, and it provides a likely explanation about why she accessed the information when she did, and then made sure on the following day that she had the most recent version, which she had already updated at work earlier that day. I am satisfied, in conclusion, on the balance of probabilities that Ms Finemore both emailed and then downloaded the client information and other materials to her Gmail account, and later to a USB device, with the intention of retaining those materials and that information for the purpose of making use of them after she had left CMIB.
[77] The next relevant event occurs on 3 May 2016 when Ms Finemore was absent from work due to some health issues. Ms Collins wanted to check whether some client requests had been actioned, and accessed Ms Finemore’s computer to check this situation. In doing so she discovered the email Ms Finemore had sent to her Gmail account on 26 April 2016, within two minutes of sending her draft resignation letter to the same account.
[78] Ms Collins discussed this situation with the other Director and it was decided to ask Ms Finemore to come into the office that afternoon, albeit in rather unusual circumstances, given she had previously advised she had a medical certificate, and would not be in that day. Ms Finemore submits this meeting was ‘an ambush’, and the Directors had her termination letter prepared prior to the meeting. She also said she was not provided with any opportunity to respond to what was put to her in the meeting.
[79] The evidence does appear to confirm the Directors had prepared a termination letter in advance of the meeting. Ms Collins confirmed she had discussed the situation with the other director, Mr Hounihan, and it had been agreed Ms Finemore’s actions constituted a serious breach of her employment obligations, and provided sufficient grounds to dismiss her. However, Ms Collins’ evidence also indicates the Directors were still prepared to meet with her to consider any explanation she might provide by way of justification for her actions.
[80] However, the evidence indicates Ms Finemore was initially evasive and noncommittal in her answers in this discussion, until she became aware the Directors knew she had sent the document to her Gmail account. She then confirmed she had sent the document, but did so to enable it to be updated prior to leaving CMIB. I am satisfied, in response, that she was provided with an opportunity in this meeting to respond to the allegations put to her. It is also clear that at the conclusion of this meeting no one was happy with the outcome.
[81] A further issue arises about whether there has been any breach of Ms Finemore’s employment contract. The Employment Agreement made on 1 April 2014, and signed by Ms Finemore, contains a number of provisions dealing with confidentiality and confidential information. For example, clause 6.7 states in part:
“The Employer shall not either during or after the employment use, divulge or communicate any Confidential Information to any person without the consent of the Employer, except for the benefit of the Employer and as required in the ordinary performance of the Employee’s duties.”
[82] It also contains a further “Confidentiality Undertaking and Code of Ethics” in an Annexure which includes an Undertaking ‘not to disclose any Confidential Information to any person’, and to ‘not to use any Confidential Information other than in connection with your employment on behalf of the Company.’ It also provides that:
“8. You must deliver all Confidential Information which is in physical form, including all manuals and other written material, copies of computer files (whether on magnetic medium or otherwise) and dictaphone tapes to the Company:
(a) promptly upon the expiration of your employment with the Company; or
(b) at any time upon request of the Company.”
[83] The Undertaking also contains a description of what constitutes “Confidential Information” and indicates it includes:
“… any information relating to the business affairs, accounts, marketing plans, prospects, research management or finances of the Company and any databases, data surveys, customer lists, records, reports, software, any source information obtained or paid for by the Company or other documents, material or other information whether in writing or otherwise concerning the Company or any of its customers or suppliers…”
[84] The Employment Agreement also contains a list of definitions, which includes “Serious Misconduct” and indicates this extends to include ‘breach of duty regarding non-disclosure of Confidential Information.’ Clause 6.1.3 continues to indicate that ‘in the case of Serious Misconduct, the Employer may terminate the Employee’s contract of employment without notice or payment in lieu of notice.’
[85] I am satisfied, in response, that Ms Finemore’s actions in sending the client information and contact details to her Gmail account, at the same time as confirming her resignation from CMIB, can be construed as constituting a breach of the confidentiality obligations in her employment contract. However, it is also acknowledged that the information had not, at the time, been given to or used by anyone outside of CMIB. However, Ms Finemore’s actions had created the potential for this to occur.
[86] CMIB is a small business with only two Directors and four employees. While the evidence in this regard is not entirely clear it appears Ms Finemore had, through her close association with Ms Collins, access to information and contact details about a substantial proportion of the clients of the business. It is not intended to overstate this point, but I am satisfied that possession of this information, and its use elsewhere, had the potential at least to impact on CMIB’s business. I am also satisfied Ms Finemore acted deliberately in obtaining this information, and her actions were in breach of her contract of employment. It follows from these conclusions that I am also satisfied that, in all the circumstances, CMIB had a valid reason to dismiss Ms Finemore on grounds of serious misconduct.
[87] However, a further significant event occurred after she had been dismissed. This involved the discovery of the USB stick on 6 June 2016. This came about because Ms Finemore was pressing for the device to be returned to her by another broker she had left it with, ostensibly to have some personal photos downloaded onto it. However, her frequent requests for its return apparently prompted the broker to suggest to Ms Collins she might want to examine what was contained on the device. She subsequently discovered it contained a significant amount of information and other materials belonging to CMIB, much of which had been downloaded by Ms Finemore by accessing the server at work from home. This also occurred at the same time as she accessed the client list and was about to confirm her resignation from CMIB.
[88] This raises a further issue about Ms Finemore’s motives. Clearly, these additional materials were not downloaded to enable them to be updated, which was the explanation she provided for downloading the client information in the Excel spreadsheet. Therefore, they were presumably downloaded because she wanted to retain them after leaving the business. This adds weight to the conclusion that she had the same intention in regard to the information contained in the Excel spreadsheet, which was downloaded at the same time.
[89] The relevance of this discovery on 3 June 2016 is obviously at issue, given Ms Finemore was terminated on 3 May 2016. CMIB submits it can be considered in the context of whether its actions were reasonable when it took the decision to terminate her, and it refers to the High Court decision in Concut Pty Ltd v Worrell 24 in support of this submission.
[90] Previous Commission decisions have also considered whether information acquired after the time of dismissal can be taken into account, even if the employer was unaware of those facts at the time, and did not rely on them when the dismissal occurred. For example, in the matter of Dundovich v P&O Ports 25 the Full Bench considered the circumstances that existed when the decision to terminate was made, and whether they could extend to include circumstances which were not known to the employer at the time of the dismissal, but were known at the time of the unfair dismissal hearing. The Full Bench concluded at [79]:
“… That this fact was not known to the employer at the time of the decision to terminate Mr Dundovich’s employment is not determinative. As the Full Bench in McLauchlan’s case observed, facts which existed at the time of dismissal but only came to light after the decision may render a termination of employment harsh, unjust or unreasonable.”
[91] In addition, in the decision in Lane v Arrowcrest Group Pty Ltd [1990] 27 FCR 427 von Doussa J concluded at 456:
“In my opinion it is still open to an employer to justify a dismissal by reference to facts not known to the employer at the time of the dismissal, but discovered subsequently, so long as those facts concern circumstances in existence when the decision was made. Whether the decision can be so justified will depend on all the circumstances.”
[92] I am satisfied, in response, that these decisions confirm that the reasons for termination relied upon need not be confined to the reasons given at the time of termination, and can extend to include other reasons if they can be established by evidence provided to the Commission at the time of hearing.
[93] There has also been a suggestion that CMIB’s actions were motivated by a desire to avoid paying entitlements that would otherwise be due to Ms Finemore, such as payment in lieu of notice, given s.123 of the Act provides that pay in lieu is not to be provided to an employee ‘whose employment is terminated because of serious misconduct.’ However, I am not satisfied the evidence substantiates this suggestion. Ms Finemore’s departure from the business, following her resignation, was proceeding in an agreed and amicable way until the discovery made on 3 May 2016 by Ms Collins. There is also no suggestion that the business was in such a parlous financial position that it might have been motivated to seek to avoid what was a relatively small cost.
[94] The final matter concerns the decision to dismiss Ms Finemore on the basis of “serious misconduct.” There were clearly other options available to CMIB at the time. Ms Finemore could simply have been advised she was not required to work out her notice period, and for pay in lieu to be provided instead. She could also have been dismissed for something amounting to less than serious misconduct, thereby preserving her entitlement to pay in lieu. However, the Directors decided to summarily dismiss her on grounds of “serious misconduct.”
[95] A number of previous Commission decisions have considered what is required to establish that “serious misconduct” has occurred in the context of the Small Business Fair Dismissal Code. CMIB made reference to the decision in Pinawin, and to the following extracts, in particular:
“[29] We believe that the approach and observations in these two decisions are correct. 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 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. Those circumstances include the experience and resources of the small business employer concerned.”
[96] That decision was also cited with approval by the Full Bench in the matter of Steri-Flow Filtration Systems (Aust) Pty Ltd v Erskine 26. The Full Bench stated in that decision:
“[26] Section 396 of the FW Act requires the FWC to decide whether a dismissal was consistent with the Code before considering the merits of an unfair dismissal remedy application.”
[97] The Full Bench continued to indicate at [29]:
“As we have indicated, the Code provides that 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 serious to justify immediate dismissal. In Pinawin a Full Bench of FWA held that this involves consideration of:
[98] I am satisfied that the Directors of CMIB had a belief at the time of Ms Finemore's dismissal that her conduct was sufficiently serious to justify her immediate dismissal. It was based on her sending confidential client information to her personal Gmail account at the same time as she was about to confirm her resignation. This was in breach of her employment agreement, and created the potential for the information to be used in competition with CMIB’s business.
[99] I am also satisfied that the Directors held this belief on reasonable grounds. The information was obtained by Ms Finemore in breach of previous directions to not access the server from home, or to work from home. She was then provided with the opportunity to meet and provide an explanation for her behaviour. The evidence indicates she was initially evasive and unresponsive in that meeting, until confronted with evidence of the emails being sent. Her explanation then about wanting to update the documents from home, when this task could have been carried out much more efficiently at work, was considered less than satisfactory. In all the circumstances I am accordingly satisfied the Directors had a belief based on reasonable grounds.
[100] As indicated at the outset Ms Finemore was clearly a respected and valued employee for much of the time she was employed by CMIB. This is evidenced by the fact that she received a substantial pay increase in November 2015, which was backdated to 1 July 2015. She was also praised for her performance at the time. However, as detailed in this decision her relationship with the business began to head in a different direction shortly after this point. It is clearly unfortunate for all concerned that this occurred.
[101] However, leaving these considerations aside I am satisfied, in conclusion, that CMIB is a small business in terms of the definition contained in the Act. I am also satisfied for the reasons indicated that it has complied with the Small Business Fair Dismissal Code in dismissing Ms Finemore. Her dismissal was therefore consistent with the Code. As a consequence she has not been unfairly dismissed. Her application is accordingly dismissed.
COMMISSIONER
Appearances:
T Finemore appeared on behalf of the Applicant.
R Catanzariti appeared on behalf of the Respondent.
Hearing details:
2016.
Melbourne
August 11, 15.
1 Exhibit TF1, Witness Statement and Attachments of Shayne Finemore, dated 4 July 2016, [9].
2 Ibid [19].
3 Ibid [23].
4 Ibid [26].
5 Ibid [28(h)].
6 Ibid [28(h)(iii)].
7 Ibid [28(h)(iii)].
8 Ibid [32].
9 Ibid [34].
10 Transcript, 11 August 2016, PN 456.
11 Transcript, 15 August 2016, PN 66.
12 Respondent’s Submissions, filed 24 July 2016, [10].
13 Exhibit CMIB1, Statement of Penelope Collins, filed 24 July 2016, [19].
14 Transcript, 11 August 2016, PN 1001.
15 Above n 13, at [30].
16 Transcript, 11 August 2016, PN 1361.
17 Exhibit CMIB3, Witness Statement of Meg Long, filed 24 July 2016, [4].
19 Transcript, 11 August 2016, PN 60.
20 Transcript, 11 August 2016, PN 155.
22 [2013] FWC 9887 [57].
23 Above n 1, at [19].
24 176 ALR 693.
25 (Unreported, Australian Industrial Relations Commission, Full Bench, 8 October 2002) PR923358.
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