DECISION

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

Mr Kris Brennan
v
ASG Brisbane Pty Ltd T/A Audi Indooroopilly
(U2019/4170)

Application for an unfair dismissal remedy – applicant dismissed for continued poor performance – applicant’s performance assessed on customer survey scores – questions in customer survey relevant to respondent’s entire operation not only applicant’s role – inappropriate to predominantly rely on customer survey scores as measure of performance – not a valid reason for dismissal – dismissal harsh, unjust and unreasonable – reinstatement inappropriate remedy in the circumstances – compensation ordered.

[1] On 11 April 2019 Mr Kristopher Brennan made an application pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) alleging that his dismissal from ASG Brisbane Pty Ltd T/A Audi Indooroopilly (Audi Indooroopilly) was harsh, unjust or unreasonable.

[2] Mr Brennan commenced employment with Audi Indooroopilly on 29 May 2017 and was dismissed on 22 March 2019. At the time of his dismissal Mr Brennan held the position of ‘Service Advisor’ and worked on a full-time basis. The role of a Service Advisor relevant to the servicing of vehicles includes: 1

•  greeting customers;

•  asking customers what work needs to be done and whether they want anything else looked at;

•  providing a cost estimate for the work;

•  confirming customer contact details;

•  informing customers of additional costs (if any);

•  advising when a customer’s car is ready for pick-up;

•  describing the repairs required to be completed in repair orders;

•  liaising with technicians; and

•  taking payment from customers.

[3] This matter was listed for hearing before me in Brisbane on 15 August 2019. After obtaining the views of the parties I decided to conduct this matter as a determinative conference. Mr Brennan appeared and gave evidence on his own behalf. Ms Caroline Raw, General Counsel of Autosports Group (Audi Australia) appeared for Audi Indooroopilly. Mr Matt Brittain, Dealership Principal at Audi Indooroopilly and Mr Daniel Nicholson, Aftersales Manager at Audi Indooroopilly appeared and gave evidence for Audi Indooroopilly.

[4] There are no jurisdictional issues for me to determine. I am satisfied that Mr Brennan is a person protected from unfair dismissal pursuant to s.382 of the Act. Mr Brennan’s application was made within the 21-day statutory time limit. The only matter that I must determine is whether Mr Brennan’s dismissal was harsh, unjust or unreasonable pursuant to s.387 of the Act.

Legislation

[5] Pursuant to section 385 of the Act, unfair dismissal is defined as meaning:

“385 What is an unfair dismissal

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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[6] Furthermore, section 387 of the Act relevantly provides:

“387 Criteria for considering harshness etc.

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

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

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

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

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

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

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

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

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

[7] The type of conduct that may fall within the words ‘harsh, unjust or unreasonable’ was outlined by McHugh and Gummow JJ in Byrne v Australian Airlines Ltd 2 as follows:

“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[8] I am duty-bound to consider each of the criteria set out in s.387 of the Act in determining this matter. 3

Mr Kristopher Brennan’s evidence and submissions

[9] Mr Brennan provided a witness statement and gave evidence in these proceedings. Mr Brennan’s duties included serving as a contact point for Audi Indooroopilly customers that needed or wanted mechanical work to be undertaken on their vehicles.

[10] Mr Brennan was remunerated at $47,000.00 per annum (plus 9.5% superannuation), and in addition a monthly commission of 1% based upon a range of upsell products he sold.

[11] During Mr Brennan’s employment Audi Indooroopilly routinely provided its customers with a customer satisfaction survey. A copy of the customer satisfaction survey was produced to me during the course of the proceedings and reads as follows:

[12] Each question in the survey must be answered with a score from 1 to 5 inclusive, 5 being the best possible score. The average score from completed surveys returned an overall ‘Customer Experience Marker’ (CEM). A CEM score of 4.5 or higher entitled Mr Brennan to receive commission payments additional to his salary. Mr Brennan stated that he was not aware until 21 February 2019 that he could be dismissed as a result of low CEM scores.

[13] On 4 January 2019 Mr Brennan was asked to attend a meeting with Mr Nicholson regarding unsatisfactory CEM scores. During the meeting Mr Nicholson informed Mr Brennan that his CEM scores must improve as they were under the national average benchmark set by Audi Australia, and as a result, reflected poorly on the dealership’s standing nationally.

[14] Mr Brennan stated that the issue of his CEM scores next arose on 21 February 2019 when he received a first and final warning letter which stated:

“Dear Kristopher,

Warning letter

I am writing to you about your recent CEM result during your employment with Audi Indooroopilly.

On Friday, 4^th January 2019 you met with myself to discuss your current personal score and was advised that your CEM results have been unsatisfactory, and that immediate improvement was required. In particular CEM results of that under the national benchmark, which is contributing to the dealership being under this benchmark as set by Audi Australia.

After considering the situation and analysing your results from January 2019 it is expected that your performance improves and in particular you place a greater emphasis on the customer experience, ensuring you make every attempt to exceed customer expectations. In the case that you have any concerns about your results you must consult a manager.

This is your first and final warning letter. Your employment may be terminated if your performance does not improve on a consistence basis.

I propose that we meet again at the close of the February survey round to review your progress. If you wish to respond to this formal warning letter please do so by contacting me via email. [sic]”

[15] Mr Brennan stated that the end of a month’s survey round would typically occur in the following month, therefore the end of the February 2019 survey round would occur during March 2019. Mr Brennan did not attend any meeting regarding his CEM scores at the end of the February survey round.

[16] On 22 March 2019, Mr Brennan attended a meeting with Mr Nicholson where he was issued with a letter of termination due to his CEM scores being lower than the national average. The contents of the letter is set out as follows:

“Dear Kristopher

Termination of your employment

This email follows our recent discussions regarding your performance. In particular, our concerns that you CEM results are been under the national average for Audi Australia.

These concerns have been raised with you on many occasions, including a written warning dated 21^st February 2019.

In that letter, you were advised that if your performance did not improve to the necessary standard, by the end of February 2019 you may face further disciplinary actions leading up to and including termination of employment.

We regret to say that we have not seen any sustained improvement in your performance. Therefore, we have decided to terminate your employment with ASG Brisbane Pty Ltd effective today.

We are providing you with two (2) weeks’ notice which you will not be required to work.

Upon termination of your employment you will be entitled to receive the following payments:

•  Payment in lieu of notice;

•  Outstanding wages;

•  Any unused, accrued annual leave;

•  Superannuation up until you last day of work.

Please make sure that you return all Company property today.

We would like to thank you for your services and wish you every success in the future. [sic]”

[17] Mr Brennan made submissions regarding what he believed contributed to his lower CEM scores that ultimately led to his dismissal. He submitted his CEM score was not a key indicator of his performance, as it did not provide a valid reason for termination of his employment.

[18] Mr Brennan submitted Audi Indooroopilly unfairly attributed the results of the CEM survey as a reflection of his own performance. He stated that the survey asked questions of customers that related to their overall experience with Audi Indooroopilly and the work undertaken on their vehicles during the service process. He considered these survey questions to be an unfair categorisation of his individual performance.

[19] He further stated Audi’s Business Development Centre, prior to its closure in or around September and October 2018, would follow up with customers after their vehicle was serviced. He believed this process was significant, as customer grievances or issues could be resolved prior to the completion of each survey. Mr Brennan submitted the removal of this arm of the business had negatively impacted his CEM scores across the board, therefore a factor in determining the validity of his dismissal.

[20] Workload issues were also raised by Mr Brennan in his material. He contended this was particularly pertinent during the November and December 2018 Christmas period due to the increase in business demand. Mr Brennan contended the increased workload was not fairly distributed amongst the other service centre employees, which resulted in him not taking meal breaks. Mr Brennan said these issues were not addressed appropriately by Audi Indooroopilly, despite raising his concerns with management. Mr Brennan submitted this negatively impacted his performance and affected his CEM scores.

[21] It was further submitted by Mr Brennan that numerous CEM surveys included customers’ comments addressing discontent with the lack of communication by Audi Indooroopilly. Mr Brennan said communication problems were often an issue when delays in the workshop occurred. Mr Brennan said the workshop would often fail to inform him of delays, resulting in customers becoming ill-informed on the status of work on their vehicle. Mr Brennan believed this attributed to an inability to advise customers promptly and as a result, led to increased customer dissatisfaction evinced in his CEM scores. Furthermore, Mr Brennan contended a 10% to 15% price increase in vehicle parts also contributed to a higher rate of customer dissatisfaction, leading to a lower CEM score.

[22] Mr Brennan contended that he was afforded differential treatment compared to a colleague who held the same position as he did. Further to this, Mr Brennan submitted that he was terminated for failing to improve his CEM scores however he contends that his scores had improved, as requested. He also stated he regularly served a significantly higher number of customers compared to other employees. Mr Brennan provided a further analysis of his scores in a table below.

[23] Mr Brennan made submissions regarding the remedy he was seeking as a result of his dismissal. Mr Brennan sought a letter of apology, letter of recommendation and recognition for his employment with Audi with a request that a ‘positive and complimentary’ reference and a statement of his position description be made by Audi Indooroopilly.

[24] During the determinative conference Mr Brennan submitted that he considered that he would likely have been employed for a further two to six months. He has endured financial strain and has had to rely on family members to provide assistance for living expenses.

[25] Whilst not in evidence, Mr Brennan also made submissions that he made genuine attempts to mitigate his dismissal. He contended that from 25 March 2019 to 28 June 2019 he had applied for approximately 200 employment opportunities. He stated that the jobs he applied for ranged from general administration, clerical positions and online payment client support role. He also stated he obtained an interview for a role similar to the position he held at Audi, but was unsuccessful. Further to this, Mr Brennan stated that he applied for positions within the hospitality industry but remained unsuccessful. At the time of the determinative conference he had not earned any remuneration since the dismissal, and he produced bank records to demonstrate this fact.

Audi Indooroopilly’s evidence and submissions

Evidence of Mr Daniel Nicholson

[26] Mr Daniel Nicholson gave a witness statement in respect of this matter and appeared and gave evidence at the determinative conference. Mr Nicholson is the Aftersales Manager at the Audi Indooroopilly dealership and he has held that position since October 2014. He is responsible for the day-to-day operation of the dealership’s service and parts department, which comprises approximately 35 employees. Mr Nicholson reports directly to Mr Matthew Brittain, the Dealer Principal of the Audi Indooroopilly dealership.

[27] Mr Nicholson employed Mr Brennan as a full-time Service Adviser on 29 May 2017. He arranged for Mr Brennan to attend Audi’s national training course for Service Advisors in Sydney at the cost of approximately $15,000 to Audi Indooroopilly. Upon completing that training Mr Brennan obtained certification and was awarded the status of Audi Certified Service Advisor.

[28] Mr Nicholson first became concerned with Mr Brennan’s performance during June or July 2018. He observed that Mr Brennan had started to become ‘short’ when dealing with customers and colleagues and he had failed to greet customers and did not make eye contact. On one occasion he attended for work with an un-ironed shirt and not in the correct uniform. Mr Nicholson noted that Audi is a luxury brand and stated that Audi Indooroopilly has high expectations of professionalism for its Service Advisors of which there are three.

[29] Mr Nicholson also noticed that Mr Brennan’s CEM scores were declining. It was apparent to him from Mr Brennan’s CEM scores and customer complaints and hot alerts in respect of Mr Brennan that Mr Brennan’s CEM scores were declining because he was failing to keep customers appraised of progress on services to their vehicles and because he was not delivering on his promises. Hot alerts are notifications of dissatisfied customers that require actioning.

[30] Mr Brennan was on annual leave between 8 and 13 November 2018. On 13 November 2018 Mr Nicholson sent the following email to Mr Brennan:

“Kris,

We need to sit down when you return and go through your CEM results as they are terrible and not looking like they are on the improve, you are below the national average on every KPI.

When I read the comments I see a common thread of poor or lack of communication when it comes to following up or keeping people in the loop with current work in progress and you must improve this ASAP otherwise the department will continue to suffer.

As I stated we will sit down and go through your results upon your return.

Please have answers ready. I will send through a meeting request shortly.

Kris 4.49 4.49 4.43 4.30 4.46”

[31] Despite having been on nearly one week’s annual leave, Mr Nicholson sent the following email to Mr Brennan at 8:47am on 14 November 2018:

“Kris,

The below person called me yesterday quite angry and upset in regard to his car, the length of time it has been here and the lack of communication he has received from yourself.

Please can you give me a full report on what is transpiring with this client and their car, why the lack of communication and when you expect it to leave?

Please also call him this morning and give him a full update on where you are at with the repair and an ETA of when he can expect the car back.”

[32] A further email was sent at 10:44am by Nicholson:

“Kris,

Just had a phone call from the [redacted] (below) who have said that there [sic] vehicle is making noises after they drove the vehicle out last week.

When I look into a quote was sent from parts about control arms but [redacted] states that no one advised him of this and I cannot see mention of it anywhere on the RO?

He is coming in sometime next week to have the noise looked at again and also have the control arms replaced but wants to know why he was not told about this whilst in for repairs?

Please advise.”

[33] On 15 November 2018 Mr Nicholson met with Mr Brennan to discuss his poor overall satisfaction CEM scores.

[34] Mr Nicholson stated that Audi Australia (as in the parent company or head office) expects a minimum score of 4.5 out of 5 for the Overall Satisfaction KPI. His evidence is that Audi Australia can use the information obtained to give feedback to Audi dealers, including the respondent, when the dealership is not operating at the national average score. The various Audi dealers are ranked from 1 to 40, with 1 being the highest performing dealer, and 40 being the worst performing dealer. The same benchmark of 4.5 out of 5 has become the minimum benchmark Audi Indooroopilly expects of its Service Advisors.

[35] It is Mr Nicholson’s evidence that on 4 January 2019 he called a team meeting with the Service Advisors to discuss the poor CEM results achieved by the dealerships. The dealership’s average had reduced to 4.35, resulting in a ranking of 32 out of 40 dealers. Mr Brennan’s Overall Satisfaction score was 4.19, significantly below the national average of 4.52.

[36] At a meeting with Mr Brennan on 4 January 2019, Mr Nicholson informed Mr Brennan that the reasons his CEM results were so poor was because he was over-promising and under-delivering, and not keeping customers in the loop of every step of the repair process. He informed Mr Brennan, “If you under-promise and over-deliver, you can’t go wrong.” It is his evidence that Mr Brennan said that he understood and assured him that he would work on those points.

[37] Further, he presented Mr Brennan and the other Service Advisor employed at Audi Indooroopilly with amended contracts of employment. A copy of Mr Brennan’s amended contract of employment is as follows:

“Dear Kristopher,

Please see below for information regarding the adjustment of your 2019 remuneration structure.

REMUNERATION

The following package is being offered to you:

…

•  And you will also receive a monthly incentive payment based off your monthly Individual CEM/LIS score. If a LIS test is failed in the affected month your CEM bonus will be forfeited for that month.

4.5 – 4.6 = $250

4.6 – 4.8 = $500

4.8 – 5.0 = $600

•  Note amendment for 2019 – If your individual CEM score is not in line with or above the national average for the surveying month you will forfeit your entire commission for that month. No commission payable. First offence will require a self-devised action plan of how you will improve. Two consecutive failed months will result in management reviewing your performance and helping aid you to an improved score. [emphasis retained]”

[38] On 18 January 2019 Mr Nicholson sent the following email to Mr Brennan:

“Kris,

Please go through your list attached and call anyone you can that you think will score you well so as to lift our overall score.

Your current personal score is at 4.24 so at the moment you are not on track for any commission.

I’ll check in with you on Monday afternoon to see where you are at with it.”

[39] The reference to calling people who will “score you well” reflects the fact that not every customer who is invited to complete a survey will actually complete a survey, evident in the table at [22].

[40] On 21 January 2019 Mr Nicholson sent the following email:

“Kris,

Where are you at with the below?

Need to start calling these people?

Your score has dropped even further over the weekend.”

[41] On 29 January 2019 a customer wrote the following email complaint:

“…….

I’m not sure if your [sic] aware my car is back in with the service team.

The first time it was taken in for a rattle in the drivers side door was about a bit over a week ago. Upon receiving the car back that day Chris from the service team told me the door had been taken apart and padding added to the area I complained about. He also made a odd comment to monitor car as technicians I assumed had heard other noises and rattles coming from other places but did not elaborate on where they were coming from.

[customer noticed various rattles coming from doors]

Last week when trying to book car in to be looked at again I told Chris I don’t want this car back until these and any other issues are rectified properly.

I was asked to go for a drive with technician when I got there today but was unable to due to prior appointments.

I called at lunch to tell Chris I could come in later today but didn’t get a return phone call.

I am unable to go dealership tomorrow….and if technicians heard and know of issues from first time why do I need to go there??

Also I asked about voice activated guidance today and was told it needs to know my voice as such to undertake route guidance. Is that correct? It is saying its not connected. But Chris said it needs to register my voice. Is this correct.

I feel if technicians knew of noises and other issues my car should not of been given back to me and those issues should have been dealt with then. ……….This should be a exciting time for myself after dealing with yourself but to be honest is has left a sour taste in my mouth. I would also thought as part of servicing or rectifying such issues that the car would be cleaned which it wasn’t . My normal mechanic who specialises in European always cleaned my car inside and out……”

[42] Mr Nicholson sent the following email to Mr Brennan relevant to the email above:

“Kris,

What is this about and where are you at with it?

With your CEM the way it as at the moment you cannot afford any further negative surveys and this one is looking again at a negative score.

Please fix this problem and let me know the outcome and where you are currently at with it.”

[43] On 21 February 2019 Mr Nicholson met with Mr Brennan and issued to him a warning letter at [14].

[44] Mr Nicholson’s evidence is that he planned to review Mr Brennan’s performance again at the end of the February 2019 survey round. He noticed by 6 March 2019 that Mr Brennan’s CEM Overall Satisfaction score of 4.50 was below the national average and he emailed him the following:

“Kris,

Your [sic] now under the national average again.”

[45] By 22 March 2019, Mr Brennan’s scores were still below the national average and Mr Nicholson sought the approval of Mr Brittain to dismiss Mr Brennan. He requested Ms Katrina Smith, QLD HR Manager to prepare a letter of termination.

[46] He called Mr Brennan to a meeting on the same day to discuss his performance since the warning letter had been issued on 21 February 2019. He informed Mr Brennan that his CEM Overall Satisfaction Score was 4.37 and the national average was 4.53, and because his score did not meet or exceed the national average his employment was terminated. The termination letter issued to him at the meeting is set out in [16].

Evidence of Mr Matthew Brittain

[47] Mr Matthew Brittain gave a witness statement in respect of this matter and appeared and gave evidence at the determinative conference. Mr Brittain has been the Dealer Principal at Audi Indooroopilly since January 2018. He commenced his employment with Audi in May 2014 and has been working in the automotive industry for approximately 15 years. Mr Brittain has overall responsibility for the Audi Indooroopilly dealership and manages both sales and aftersales departments, including the financial management of the dealership. He is responsible for reporting to the CEO of Audi Australia and making the final decision on recruitment and dismissal of Audi employees within the Indooroopilly dealership.

[48] Mr Brittain stated that until around 2017 Audi Australia considered the average ‘overall satisfaction’ score from customer surveys across dealerships and used those average scores to financially reward or penalise individual dealerships. After 2017 Audi Australia no longer used a dealership’s average ‘overall satisfaction’ score in relation to financial rewards or penalties. However, Audi Australia continued to use the average ‘overall satisfaction’ score to rank dealerships nationally from best to worst. Mr Brittain stated that he continued to consider average ‘overall satisfaction’ scores as the key indicator of customer satisfaction and key to securing repeat business. Mr Brittain stated that he uses average overall satisfaction scores as the primary indictor of performance throughout the Indooroopilly dealership [his emphasis].

[49] Mr Brittain does not manage service staff on a day-to-day basis. However, he does receive ‘hot alerts’. Hot alerts are an automatic alert which are raised when a Service Advisor or Sales Consultant receives a score of two out of five or less on any of the questions posed in the customer satisfaction survey.

[50] Mr Brittain stated that towards the end of 2018 he received several hot alerts in relation to Mr Brennan, many of which complained that Mr Brennan had not called customers back. Mr Brennan forwarded those hot alerts to Mr Nicholson to follow up on.

[51] Throughout the latter half of 2018 he discussed with Mr Nicholson the Aftersales department’s declining overall satisfaction scores. By the end of 2018 he had put pressure on Mr Nicholson to improve the Aftersales department’s declining performance. After discussing the Aftersales department’s declining performance with Mr Nicholson, Mr Nicholson indicated to him that Mr Brennan’s poor performance was negatively affecting the Aftersales department’s overall satisfaction scores. Mr Brennan instructed Mr Nicholson to take steps to improve Mr Brennan’s performance.

[52] In January 2019 Mr Nicholson advised him that an action plan had been implemented to improve Mr Brennan’s CEM scores. Mr Brittain was informed by Mr Nicholson that Mr Brennan understood how to improve his CEM scores and was committed to improving his scores.

[53] Mr Brittain stated that on or about 22 March 2019 he approved Mr Nicholson’s decision to dismiss Mr Brennan on the basis that his CEM scores had not improved to the required standard.

Outline of Audi Indooroopilly’s Submissions

[54] Audi Indooroopilly submitted that Service Advisors are required to achieve a CEM overall satisfaction score of at or above the national average [of Audi Service Advisors] for the surveying month. The respondent asserted that the CEM score is an indicator of individual performance of the Service Advisors, and is the standard that is set by each dealership across the Audi Group. It is Audi Indooroopilly’s contention that Mr Brennan failed to attain the expected CEM score results from October 2018 until the termination of his employment on 22 March 2019.

[55] It was submitted that Mr Brennan was provided with adequate training to carry out his role as a Service Advisor, as Mr Brennan had attended training in Sydney at a cost to the business of approximately $15,000.00.

[56] Audi Indooroopilly submitted that Mr Brennan was provided with a reason for his dismissal. It was stated that Mr Brennan was called into a meeting on 22 March 2019 in relation to his CEM results for the period since receiving his first and final warning letter on 21 February 2019. It was at this meeting Mr Brennan received a letter of termination and was dismissed from his employment.

[57] Further to this, Audi Indooroopilly asserted that Mr Brennan was notified on numerous occasions prior to his dismissal of alleged poor performance. Mr Brennan was placed on a performance action plan on 4 January 2019, which stated that Mr Brennan’s CEM score had been declining over the last three months to the lowest point of 4.19 in December 2018. Further, it was submitted that Mr Brennan had lost his drive and motivation, was taking on too much and was not delivering on his promises and in order for Mr Brennan to improve his performance, he was to ‘go back to basics’ by keeping customers up to date on the repair of their vehicle and to deliver on his promises. On 21 February 2019 Mr Brennan was provided with a first and final warning letter stating that his performance was poor and he had not been meeting his CEM score targets. Again, on 6 March 2019 an email was sent to Mr Brennan advising him that his CEM results were under the national average benchmark. It is a combination of these factors that Audi Indooroopilly alleges Mr Brennan was aware of and which form the reason for the termination of his employment.

[58] Audi Indooroopilly submitted that Mr Brennan had access to his CEM scores at any time by logging into Audi Australia’s Customer Experience Management system. It is Audi Indooroopilly’s contention that Mr Brennan was aware of his alleged declining CEM scores and poor work performance.

[59] Audi Indooroopilly presented an alternative argument, citing Roweena Ann De Silva v ExxonMobil Chemical Australia Pty Ltd 4 and submitted that if Mr Brennan was not notified of the reason of his dismissal, any procedural defects should not be afforded any weight due to the numerous written warnings over alleged poor performance from November 2018 until the date of dismissal.

[60] It was submitted that Mr Brennan was provided with an opportunity to respond to the reasons for his dismissal at the meetings held on 4 January 2019, 21 February 2019 and 22 March 2019. Whilst a support person was not present at the meetings held, it is the respondent’s contention that Mr Brennan did not make the request to have such a person present.

[61] Audi Indooroopilly submitted that the size of its enterprise did impact on the procedures followed in dismissing Mr Brennan from his employment. Despite being part of the wider Audi Group employing approximately 1,400 people, Audi Indooroopilly submitted it was not appropriately equipped with the relevant specialist and expert human resources knowledge to effectively manage the issue of termination of employment. It was submitted that Audi Indooroopilly is part of Audi Australia, which was listed on the Australian Stock Exchange (ASX) in November 2016. Audi Australia is an aggregation of dealerships that were separately and privately owned dealerships prior to listing on the ASX. It was submitted that many of the dealerships are still adapting to the changes of being part of a listed group, and many still operate independently. Further, while Audi Australia does employ human resource managers, they are primarily responsible for payroll services. It was submitted that group-wide procedures associated with performance management, redundancy and termination of employment have now been implemented, however were not in effect at the time of Mr Brennan’s dismissal. Audi Indooroopilly urged the Commission not to place any weight on the size of the wider Audi group with respect to the procedures followed in terminating Mr Brennan’s employment, as it is in the infancy as a consolidated group.

[62] Audi Indooroopilly rejected Mr Brennan’s assertion that he met the national benchmark in February 2019. It stated that Mr Brennan scored 4.46 out of 5.00, where the national average was 4.56.

[63] Audi Indooroopilly submitted that Mr Brennan’s assertion that there were factors out of his control that affected his CEM scores is incorrect. It is the respondent’s view that the only relevant factor in determining Mr Brennan’s performance is ‘Overall Satisfaction’ on the CEM score, and it submitted that Mr Brennan’s claim that a rise in the cost of parts and repair quality of a customer’s vehicle is not a relevant factor in obtaining a CEM score with respect to Mr Brennan’s performance. A rise in parts would have affected all other dealerships, it was submitted.

[64] Audi Indooroopilly submitted that it was Mr Brennan’s lack of service and poor communication that was relevant to his CEM score which resulted in his termination. In addition, Audi Indooroopilly claimed that CEM scores that relate to ‘Personal Treatment’ are not a relevant factor to measure a Service Advisor’s performance.

[65] It was conceded that the closure of the Business Service Centre did adversely impact on Mr Brennan’s performance, however, not for the reasons advanced by Mr Brennan. It was submitted that the closure of this facility meant that there was no other department available to smooth over any concerns before a customer completed a survey highlighting the true performance of the Service Advisor.

[66] Audi Indooroopilly submitted that Mr Brennan’s dismissal was appropriate because he failed to meet the requisite minimum performance standards. It stated that in the event the Commission found Mr Brennan had been unfairly dismissed, he should not be reinstated.

[67] Relevant to remedy, it was submitted that Mr Brennan would have likely been employed for only four weeks before being dismissed for poor performance.

Consideration

s.387(a) - Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)

[68] Audi Indooroopilly has, for some time, undertaken a measure of employees’ performance in Mr Brennan’s position by way of CEM scores given by customers who complete a survey following the services provided by the respondent.

[69] As is clear from the data, not all customers will complete a post-services survey. On Mr Nicholson’s evidence, it is possible to make contact with customers whom you think are likely to provide a positive survey result, and encourage them to complete the survey. This would, of course, have the effect of skewing the results if no such encouragement had been made.

[70] The questions asked of customers cannot objectively be seen to be based on the service and delivery of services by the Service Advisor only, when there are 35 employees within the enterprise. These questions have, it seems, up until 2017 been used by Audi Australia to rank and remunerate, in some part, Audi dealers. These survey results have had that broad application up until that time, and it is clear that when the results were used to rank and remunerate dealers it was not used solely as a tool for understanding the performance of Service Advisors.

[71] It is apparent that Audi Indooroopilly and perhaps other Audi dealers have continued to use this measure and narrow in on the “Overall Satisfaction” result which is used to rank dealerships (1 – 40), and to also use it to measure the performance of Service Advisors.

[72] The first question, “How satisfied are you with the way you were treated?” could relate to many an event of having a car serviced. It could be scored low for a multitude of reasons, not necessarily or solely related to the way the customer was treated by the Service Advisor.

[73] The most important question, it seems, is question four, “If you now think about this service centre visit overall, how satisfied are you with our services?” This question put to customers is extraordinarily broad, yet is used by the respondent, and it seems by Audi Australia to measure the performance of Service Advisors. As I put to the respondent during the determinative conference, if a customer expected to have an ordinary service to their car performed, with an expected duration and expected cost, if it was discovered that there were many other services that needed to be performed, and this either caused inconvenience or distrust, it is entirely plausible that a lower score could be given by that customer.

[74] Further, it is disconcerting that the respondent required, as a measure, its Service Advisors to be in the top 50% of all Service Advisors across the Audi Australia group. I understand this submission to be supported by Audi Australia by virtue of Ms Raw adopting it. While it is certainly a virtuous goal, and it is a reasonable goal to require of Audi Indooroopilly Service Advisors, it ignores the fact that 50% of Service Advisors must be in the bottom half of all Audi Australia Service Advisors. Simply because an employee slips into the bottom half of all Service Advisors does not mean that they are not performing their role satisfactorily. Mathematics requires that half of the employees will be in the bottom half.

[75] In the 4 January 2019 remuneration letter, Mr Brennan was informed that he would no longer receive commission if his individual CEM Score was not in line with or above the average for the surveying month. I understand that to mean that Mr Brennan would have had to have been in the top 50% to earn commission. He was informed that a ‘first offence’ would result in a self-devised action plan to improve, and two consecutive failed months would result in management reviewing his performance and help provided to aid him to an improved score.

[76] In the warning letter of 21 February 2019, Mr Brennan was informed that his results had been unsatisfactory, particularly given they had been under the national benchmark. It is not clear if this letter referenced Mr Brennan being in the bottom 50% of Service Advisors, or his score being less than 4.5.

[77] In the termination letter he was informed that his scores had been under the national average for Audi Australia. I take that to mean that he was being measured as being in the bottom 50% of Service Advisors.

[78] If this was, as I understand it to be, a position supported by Audi Australia given the termination letter was prepared by the central HR support person, and the submissions supported by Audi Australia during the determinative conference, it could have the effect of the bottom half of Service Advisors within Audi Australia being considered to be performing unsatisfactorily. Instead of endeavouring to bring up the levels of service, it was determined that being in the bottom half of all Service Advisors was unacceptable, despite mathematically, half of the Service Advisors having to fall within the bottom half of all Service Advisors.

[79] It is also concerning that the communications of 14 November 2018 sought to have Mr Brennan chase up disgruntled customers, noting that he had been on annual leave for the week prior. Whilst I appreciate that the larger customer complaint at [41] must have involved some service provided by Mr Brennan as the customer repeatedly refers to ‘Chris’ [sic], meaning the applicant, Mr Brennan was on leave for almost one week and it would have been impossible for him to have dealt with the concerns during that period.

[80] The customer’s complaint did not deal solely with how well or poorly he considered he had been serviced by Mr Brennan; he went on to state how he expected his car to have been washed inside and out. Further, his complaint is somewhat targeted at the technicians.

[81] I accept that when hot alerts were made by customers, it was necessary for Mr Brennan to provide all necessary support to understand why the customer scored the service experience so low. He could not, however, be solely responsible for a low score from a customer. In changing times where customers were experiencing a price increase of 10 – 15% for some parts, and the Business Development Centre, which might have smoothed out customer concerns before they made was closed by Audi Australia, it is not unreasonable to expect a decline in customer ratings. I accept that this would apply across all Service Advisors.

[82] On the information before me within the respondent’s material, which is likely to be more reliable than Mr Brennan’s evidence at [22], Mr Brennan’s CEM Overall Satisfaction score on the fixed date of 18 January 2019 was 4.24. On the fixed date of 21 January 2019 it was 4.09. On the fixed date of 6 March 2019 it was 4.5.

[83] Again, relying on the respondent’s material by end of months, the scores were:

[84] At [46], Mr Nicholson’s evidence is that Mr Brennan’s CEM score was 4.37 on 22 March 2019. As I understand it, Mr Brennan’s score rose to 4.48 by the end of the month, but this would not have been known by the respondent at the time of the dismissal.

[85] It is clear that while the respondent did not consider that the scores were satisfactory because they were not greater than 4.5 and were not in the top half of all Audi Service Advisors, the scores were, nevertheless, improving in February and March 2019.

[86] For the above reasons, particularly what I consider to be the inherent unfairness in measuring the complete service experience provided to a customer and ranking it against the Service Advisor only, when there may be many and varied reasons unrelated to a Service Advisor’s duties as to why a customer provides a low score, I do not find that there was a valid reason for the dismissal.

s.387(b) - Whether the person was notified of that reason

[87] I find that Mr Brennan was notified of the reason for dismissal.

s.387(c) - Whether there was an opportunity to respond to any reason related to the capacity or conduct of the person

[88] Mr Brennan was on notice in November 2018 that there were concerns related to some customers, and they became a hot alert. On 15 November 2018 he was informed that he needed to improve his CEM scores.

[89] In early January 2019 Mr Brennan’s remuneration was altered such that he would no longer receive commission if he was in the bottom half of all Audi Australia Service Advisors. He was informed that two consecutive months would result in assistance offered by the respondent. There is no evidence before the Commission that there was consultation afforded in this declaration; however I note that this was effected not with only Mr Brennan, but with the two other Service Advisors.

[90] On 21 February 2019 Mr Brennan was issued with a first and final warning. It was provided to him at a meeting, and I understand it was prepared ready to issue at that meeting.
[91] On 22 March 2019 Mr Nicholson had obtained Mr Brittain’s approval to terminate Mr Brennan and he effected that by issuing the termination letter to Mr Brennan. It was conceded that there was no opportunity for Mr Brennan to respond. The respondent has conceded that this practice is not appropriate and is no longer being followed by it and by Audi Australia.

[92] On the evidence and submissions of the parties I find that Mr Brennan was not afforded an opportunity to respond to the reason for the termination.

s.387(d) - Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[93] Mr Brennan did not submit that there was an unreasonable refusal by the respondent to allow him a support person, and I find accordingly.

s.387(e) - Was there a warning of unsatisfactory work performance before dismissal

[94] I find that there was a warning of unsatisfactory work performance before the dismissal. I do not consider it material that on some occasions Mr Brennan was warned that he had to be in the top half of all Audi Australia Service Advisors, and at other times he was warned that he had to meet a score of 4.5 or greater; the targets, while being different targets had some symmetry in both being met if the score was at or above 4.5.

s.387(f) - Whether the respondent’s size impacted on the procedures followed and s.387(g) - Whether the absence of a dedicated human resource management specialist impacted on the procedures followed

[95] It was submitted that Audi Australia has required time to work with various franchisees since becoming part of a wider group known as Autosports Group which listed on the ASX in November 2016. It was submitted that group-wide procedures in relation to performance management, redundancy and dismissals were recently rolled out but were not in effect at the time of Mr Brennan’s dismissal.

[96] There has been more than enough time since November 2016 to introduce appropriate guidance to the various entities. I do not accept that the respondent’s size impacted on the procedures followed.

[97] The Form F3 nominates the number of employees as 1,400 across the related entities. I accept the evidence that the human resources personnel were predominantly experienced in payroll and not experts in human resources. For such a large organisation not to have some human resource management specialists is astounding. I accept the act of preparing a termination letter to be issued at a meeting to discuss performance without allowing the employee an opportunity to respond is demonstrative of an absence of dedicated human resource management specialists and this impacted on the procedures followed.

s.387(h) Other matters

[98] In the respondent’s material there was evidence that a fellow Service Advisor had the following scores relevant to Overall Satisfaction:

[99] It was explained that the Service Advisor had a low score in March 2019 because, to some degree, upon Mr Brennan’s termination, that Service Advisor was far busier and having to deal with more customers. It is evident, therefore, how impractical a tool the measure is to objectively assess the performance only of a Service Advisor, not of the experience the customer receives relevant to the technical service of their car.

Conclusion

[100] The absence of a valid reason for dismissal, together with my other findings on matters arising under s.387 of the Act lead me to conclude that Mr Brennan’s dismissal was harsh, unjust and unreasonable. Accordingly I determine that Mr Brennan’s dismissal was unfair.

Remedy

[101] Section 390 of the Act reads as follows:

“390 When the FWC may order remedy for unfair dismissal

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

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

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

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

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

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

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

Note: Division 5 deals with procedural matters such as applications for remedies.”

[102] Mr Brennan is a person from unfair dismissal for the Act’s purposes, and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether he can be reinstated. Mr Brennan does not seek reinstatement and it is opposed by the respondent. I am satisfied that it is inappropriate to order reinstatement.
[103] I now turn to consideration of compensation.

Compensation

[104] Section 392 of the Act provides:

“392 Remedy—compensation

Compensation

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

Criteria for deciding amounts

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

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

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

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

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

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

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

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

Authorities

[105] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.⁵ That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;⁶ Jetstar Airways Pty Ltd v Neeteson-Lemkes⁷ and McCulloch v Calvary Health Care (McCulloch).⁸

[106] I have had regard to the above authorities, and I have considered the submission of each party.

The effect of the order on the viability of the respondent

[107] Given the size of the respondent this is a neutral consideration.

The length of Mr Brennan’s service

[108] Mr Brennan had approximately 22 months’ service. I have had regard to the decision of SDP Richards in Davidson v Griffiths Muir’s Pty Ltd [2010] FWA 4342. His Honour determined at [140]:

“As an employee for a short period of time, the length of Applicant’s service with the Respondent on its own is not a powerful force making for a compensation remedy (or a compensation order of significant quantum)”

[109] I consider that Mr Brennan’s service of less than two years is not a significant amount of time.

The remuneration that Mr Brennan would have received, or would have been likely to receive, if he had not been dismissed

[110] I have determined that Mr Brennan’s scores were improving, despite my earlier findings as to unfairness of such a score. He was close to the expected 4.5 score. I determine that Mr Brennan would have been likely to have continued in his employment for a period of 12 weeks had he not been dismissed. At a weekly rate of $913.46, he would have received $10,961.52. I note that he was paid two weeks’ notice on termination, being an amount of $1,826.92.

The efforts of Mr Brennan (if any) to mitigate the loss suffered because of the dismissal

[111] I am satisfied that Mr Brennan has made considerable effort to mitigate the loss suffered because of the dismissal, including applying for many roles. Given the relatively low rate of pay Mr Brennan received with the respondent, I do not consider that his employment efforts have been too narrow.

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

[112] Mr Brennan’s bank records demonstrate that at the time of the determinative conference he had not earned remuneration.

The amount of any income reasonably likely to be so earned by Mr Brennan during the period between the making of the order for compensation and the actual compensation

[113] This factor is not relevant in the circumstances of this matter.

Other relevant matters

[114] I do not consider that there are any other relevant matters to consider that I have not already addressed above.

Misconduct reduces amount

[115] Section 392(3) requires that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.

[116] The section requires that consideration be given by the Commission, amongst other things, as to whether a person’s misconduct contributed to the decision to dismiss an employee even if the Commission has found that there was no valid reason for the person’s dismissal. However, if there was no valid reason for the dismissal that may be relevant to the Commission’s decision as to the appropriate amount by which the amount of compensation should be reduced.⁹

[117] Mr Brennan did not engage in misconduct.

Shock, distress etc. disregarded

[118] I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Mr Brennan by the manner of the dismissal.

Compensation Cap

[119] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.

[120] The high income threshold immediately prior to the dismissal was $145,400, and the amount for 26 weeks was $72,700. The amount of compensation the Commission will order does not exceed the compensation cap.

Payment by instalments

[121] This is not an appropriate consideration given the size of the respondent.

Order of compensation

[122] I have determined that the respondent is to pay to Mr Brennan the following amount of compensation less tax as required by law within 14 days of the date of this decision:

[123] In addition, the respondent is to pay superannuation on the amount of $9,134.60 at the rate of 9.5% into Mr Brennan’s superannuation fund within 14 days of the date of this decision.

[124]
An Order [PR714037] to that effect will be issued with this decision.

COMMISSIONER

Appearances:

K Brennan for the applicant.

C Raw for the respondent.

Determinative conference details:

Brisbane

15 August

2019.

Final written submissions:

Applicant’s outline of argument: merits, 28 June 2019;

Respondent’s outline of arguments, 17 July 2019.

Printed by authority of the Commonwealth Government Printer

<PR714036>

 1   Witness statement of Mr Daniel Nicholson at [9].

 2   (1995) 185 CLR 410, [465].

 3   Sayer v Melsteel [2011] FWAFB 7498 at [20].

 4   Roweena Ann De Silva v ExxonMobil Chemical Australia Pty Ltd [PR910623], [74] – [77].

5 (1998) 88 IR 21.

6 [2013] FWCFB 431.

7 [2014] FWCFB 8683.

8 [2015] FWCFB 2267.

9 Crawford v BHP Coal Pty Ltd [2017] FWC 154, [345] – [346]; Read v Gordon Square Child Care Centre Inc. [2013] FWCFB 762, [83].