DECISION

Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy

Rohieth Lakhan
v
Bustech Group Pty Ltd T/A BustechGroup
(U2021/6148)

Application for an unfair dismissal remedy – engineer – performance – whether valid reason – procedural fairness – despite valid reason dismissal unfair – reinstatement inappropriate - compensation ordered

[1] On 14 July 2021 Rohieth (Roy) Lakhan (the applicant or Mr Lakhan) applied to the Commission under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy. He was dismissed on 9 July 2021 by Bus Tech (SA) Pty Ltd (Bus Tech or the employer). At the date of dismissal he was employed as an engineer.

[2] Mr Lakhan claims his dismissal was harsh, unjust or unreasonable. He seeks an order for reinstatement or, in the alternative, compensation.

[3] Bus Tech oppose the application. It contends Mr Lakhan’s dismissal was not unfair and no issue of remedy arises. In the alternative, it submits that no re-employment order should be made and that compensation should be nil or minimal.

[4] Conciliation was conducted on 12 August 2021. The matter did not resolve. Neither party pursued a subsequent opportunity for Member Assisted Conciliation.

[5] I issued directions on 24 August 2021.

[6] I granted permission for the parties to be legally represented. 1

[7] In advance of the hearing, I received materials from Mr Lakhan and Bus Tech.

[8] I heard the matter by video conference on 4 and 5 November 2021.

[9] Final written submissions were filed by both parties on 19 November 2021.

Evidence

[10] Mr Lakhan gave oral evidence on two statements filed in his name. 2

[11] Three witnesses were called by the employer:

•  Gregg Dinning, Chief Technology Officer 3;

•  Shane Koehne, Senior Mechanical Engineer 4; and

•  Christian Reynolds, Executive Chairman 5.

[12] I deal later with a submission by Mr Lakhan concerning the failure of the employer to call another person.

[13] As the matter concerned Mr Lakhan’s performance, the evidence was of considerable breadth. Some facts are in dispute. Issues of credit arise. Other evidentiary disputes are not questions of fact but opinion. That is not surprising. The reason for dismissal itself was an overall opinion formed by the employer. There is potential for evidence on all sides to be self-serving.

[14] I find the evidence of Mr Koehne and Mr Dinning to be broadly reliable (with two caveats), and the evidence of Mr Lakhan and Mr Reynolds (for different reasons) reliable in part but requiring a degree of caution for understatement and overstatement (as the case may be).

[15] Mr Lakhan is a softly-spoken person who gave evidence with composure. Whilst he made some concessions under cross examination, other (but not all) denials were implausible. On some matters his recall was vague. Whilst his opinions appear to have been genuinely held, there was a gloss on aspects of his evidence illustrative of a lack of insight into performance issues that had been raised by his mangers.

[16] Mr Reynolds’s evidence was confidently given but, in view of his seniority, direct liaison with Mr Lakhan was limited (though not inconsequential). His evidence was heavily opinion-based and in part reliant on hearsay (feedback from managers) and in part his past working relationship with Mr Lakhan. I take into account Mr Reynolds evidence but also treat it with some caution given its self-serving potential.

[17] Mr Koehne placed less gloss than any witness on his evidence. His evidence is reliable and preferred where there is conflict. It is however somewhat limited as Mr Koehne commenced working with Bus Tech in March 2021 and was Mr Lakhan’s manager only from April 2021.

[18] Mr Dinning’s evidence was critically important as he was the senior manager responsible for engineering operations from July 2020 and accountable to the directors (including Mr Reynolds) for engineering quality and its impact on production. He supported the decision to dismiss but was not a decision-maker. Mr Dinning was extensively cross examined.

[19] Overall, I consider Mr Dinning to be a credible witness whose evidence is, with two caveats, generally reliable. He was firm and displayed clearer recall than Mr Lakhan. Although his evidence in chief contained some overstatement and some generality, he made reasonable concessions in cross examination that lent plausibility to his evidence. On the factual narrative, I generally prefer his evidence to Mr Lakhan’s except that:

•  I do not find that Mr Dinning expressly told Mr Lakhan at a first ‘performance’ meeting (in late March or early April 2021) that “this is about your performance”; and

•  I find that whilst at the second ‘performance’ meeting (on 4 May 2021) Mr Dinning did expressly tell Mr Lakhan it was about performance and performance management, he did not specify the ramifications of continuing underperformance.

[20] Whilst I do not discount the possibility Mr Dinning did so, on these two matters the evidence is not sufficient to make a finding of fact to the requisite standard of proof (balance of probabilities). I do not do so due to the absence of a contemporaneous documentary record of these meetings, the self-serving potential of such evidence and the lack of sufficient precision in Mr Dinning’s recall on these specific questions.

[21] The Commission is not bound by the rules of evidence but they are a sound guide to fact-finding. I do not discard from the record or render inadmissible those parts of the evidence that contain opinion or assumption. To do so would be inappropriate in a matter such as this where the line between fact and opinion is blurred. I have regard to opinions formed and assumptions made by all witnesses but on a limited basis only. I treat them as an extension of submissions and capable of providing context to facts otherwise established. As with hearsay evidence, I give considerably less weight to opinion and assumption than primary evidence or inferences properly drawn from that evidence.

[22] It would have been helpful to fact-finding to have received evidence from another director of Bus Tech, Mr Marks. He is, according to Mr Dinning and Mr Reynolds, the director responsible inter alia for human resources. Together with Mr Reynolds, Mr Marks decided to dismiss Mr Lakhan. He was the director from whom (after 4 May 2021) Mr Dinning sought a performance improvement plan template that could be applied to Mr Lakhan.

[23] Notwithstanding being urged by Mr Lakhan to do so, it is not necessary to make an adverse inference against Bus Tech of the Jones v Dunkel 6 kind in order to undertake the necessary fact-finding and determine this matter. Bus Tech called Mr Reynolds who was a co-decision maker and called Mr Dinning who was present with Mr Reynolds and Mr Marks when dismissal was discussed. Both witnesses called were active participants at the subsequent dismissal meeting.

[24] A Jones v Dunkel inference, were it made, does not enable facts not otherwise open to be found to be so found. It simply has the effect of creating an inference that evidence of a certain person would not have been helpful to the party that did not call the witness. 7 I need not draw that inference as matters on which the decision-makers acted are in evidence and the evidence of the witnesses is sufficient to make relevant findings. For example, it is not disputed that no formal performance improvement plan was applied to Mr Lakhan, irrespective of whether Mr Marks was sourcing a template for Mr Dinning.

Facts

[25] I make the following findings.

Bus Tech

[26] The Bus Tech Group is a private business designing and manufacturing buses in South Australia (at Edinburgh in northern Adelaide) and Queensland (at Burleigh Heads). Bus Tech (SA) was formerly known as Precision Buses (based at Edinburgh) . In 2019 Bus Tech (Qld) purchased Precision Buses. The Queensland and South Australian operations merged to form the Bus Tech Group.

[27] Two years earlier, in about 2017, Precision Buses acquired a German company ZF Lemforder, which manufactured automated suspension products for GM Holden in South Australia. ZF Lemforder ceased these operations once GM Holden ceased manufacturing motor vehicles in South Australia. Upon the acquisition of ZF Lemforder by Precision Buses, from 2018 the Edinburgh site changed from designing and manufacturing motor vehicle suspensions to designing and manufacturing buses.

[28] Bus Tech has a focus on engineering and manufacturing city buses, school buses and double decker buses. It partners with global companies such as Mercedes-Benz, MAN, Volvo and SCANIA.

[29] Its directors are Mr Reynolds (Executive Chairman), Mr Marks and a third director, Mr Fitch.

[30] The Bus Tech Group employs about 150 persons. It has no dedicated human resources function though Mr Marks notionally oversees those matters. Where needed, it has access to an external human resources consultancy.

[31] Approximately 70 persons are employed by Bus Tech in South Australia, including (until July 2021) Mr Lakhan.

[32] Bus Tech (and some of its directors) have corporate links to related businesses including Fusion Capital and Brabham Automotive Holdings Limited.

Mr Lakhan

[33] Mr Lakhan lives in suburban Adelaide. He emigrated to Australia from South Africa in 2007. He is married with adult children. He is 59 years of age.

[34] Mr Lakhan is an engineer. He obtained engineering qualifications in South Africa where he worked prior to emigrating.

[35] Upon arriving in South Australia he obtained work as a Senior Manufacturing Engineer with ZF Lemforder. From 2007 he worked continuously at the Edinburgh site for:

•  ZM Lemforder (2007 – 2017);

•  Precision Buses (2017 – 2019); and

•  Bus Tech (2019 to July 2021).

[36] Upon ceasing employment with ZF Lemforder, his entitlements were paid out.

[37] Mr Lakhan was one of a group of ZF Lemforder employees offered work by Precision Buses. In November 2017 he was employed as a Manufacturing Engineer (Assembly Operations). 8

[38] He became an employee of Bus Tech when it acquired Precision Buses in 2019. His service was carried over.

Engineering Operations

[39] Bus Tech engage engineers on both the design side of the business and in production.

[40] Engineers on the design side prepare drawings designing a bus (or part thereof) based on industry or client specifications from which manufacturing employees (with the assistance of engineers on the production side) manufacture the buses and their component parts.

[41] The engineering department, comprising engineers in South Australia and Queensland and of which Mr Lakhan was a member, is overseen by a senior national manager.

[42] In July 2020 (12 months prior to Mr Lakhan’s dismissal) Mr Dinning joined Bus Tech from McLaren (UK) having formerly worked for Motorola in South Australia. He is a qualified engineer. He is the national manager of Bus Tech’s engineering department as its Chief Technology Officer. He reports to the Executive Chairman Mr Reynolds and the board.

[43] Initially, Mr Dinning worked for Bus Tech remotely (from the UK) until relocating to South Australia in September 2020.

[44] Although Mr Dinning was a hands-on manager to whom Mr Lakhan reported, due to his national responsibilities on a day-to-day basis an Adelaide-based lead engineer tasked Mr Lakhan with duties. For a temporary period in early 2021 that was a Mr Garbrielli. That position was filled permanently in late March 2021 by a newly recruited engineer, Mr Koehne.

[45] From 2014 until dismissal, Mr Lakhan had a work association with Mr Reynolds. Whilst working at ZF Lemforder, Mr Lakhan was, from time to time, given tasks by Mr Reynolds who was ZF Lemforder’s Managing Director between 2014 to 2017. Mr Reynolds continued to occasionally interact with Mr Lakhan whilst Managing Director of Precision Buses between 2018 and 2020 and as Executive Chairman of the Bus Tech Group, but only occasionally.

Engineering management

[46] Upon assuming the role, Mr Dinning was tasked by the board with responsibility to improve culture and performance amongst the engineering department.

[47] Particularly once arriving in South Australia, Mr Dinning introduced new management processes. These included monthly presentations to the engineering team (jointly in Adelaide and remotely to Queensland) and use of a communication software programme to improve task and project awareness between engineers, their managers and the production side of the business. Mr Dinning also made it his business to assess the performance of the engineering department and identify areas where people were excelling or required improvement.

[48] When Mr Dinning commenced, Mr Lakhan was working as an engineer on the production side of the business. He was introduced to Mr Dinning as an engineer with substantial experience, which he was. During the period Mr Dinning worked remotely from the UK, there was only limited interaction between the two. On one occasion Mr Dinning initiated a discussion with Mr Gabrielli and Mr Lakhan about a roof jig on which Mr Lakhan was working. Whether at that meeting or afterwards, Mr Gabrielli praised Mr Lakhan in writing for his work on the jig project. 9

[49] It is not apparent from the evidence that there was any more frequent communication between Mr Dinning and Mr Lakhan at that time.

[50] When Mr Dinning arrived in Adelaide their contact became more regular.

Re-allocation to less complex tasks

[51] In January 2021, based on feedback from other engineers, his own observations, the group meetings and some individual but routine discussions with Mr Lakhan, Mr Dinning formed the view that Mr Lakhan was underperforming and struggling on the production side of the business. The underperformance involved, as far as Mr Dinning was concerned, two elements:

•  Work quality not up to the level of an engineer of Mr Lakhan’s seniority and pay grade; and

•  Slowness that impacted the work of others and in particular production.

[52] Mr Dinning also formed the view that Mr Lakhan, whilst present, was not an active contributor to the monthly team meetings and thereby not contributing in the way that a senior engineer should to team development and culture.

[53] In the preceding months, Mr Dinning had received feedback from some (but not all) engineers that they did not have confidence in the accuracy or adequacy of some of Mr Lakhan’s drawings, resulting in some engineers themselves correcting or redoing his work so as to not delay production, rather than sending that work back to Mr Lakhan. Some (but not all) engineers also advised Mr Dinning they were not assigning Mr Lakhan complex or time critical work.

[54] In January 2021 Mr Dinning himself formed the view that he was losing confidence in asking Mr Lakhan to rectify defects in his work and resubmit drawings to production, and to do so in a timely manner. At that time, this in particular concerned work by Mr Lakhan on the Artic (articulated buses) Project.

[55] Mr Dinning took the following steps:

•  Mr Lakhan was moved off the Arctic Project; and

•  Mr Lakhan was thereafter progressively allocated less complex and more linear tasks providing production support rather than production critical or time critical drawings. The less complex drawings were commonly based on already existing standard work instructions (SWIs) and minimised the level of judgement and skill required.

[56] These arrangements applied from January 2021.

[57] Mr Lakhan noticed his duties changing over this period. Whilst spoken to by managers in the ordinary course of business about a drawing or an issue, he was not, at that time, advised of the underlying reasons for change in his duties (being lack of confidence by some engineers and production employees, and Mr Dinning’s concerns).

[58] Relevantly, there is no evidence that Mr Lakhan’s then (temporary) lead in this January to March 2021 period, Mr Gabrielli, shared these concerns.

Meeting with Mr Dinning – late March / early April 2021

[59] On or about 18 March 2021 an issue concerning a drawing by Mr Lakhan on seat configuration for a Mercedes bus came to Mr Dinning’s attention.

[60] Mr Dinning formed the view that even though the drawing involved SWIs, it was not up to standard. Mr Dinning re-allocated the task to another engineer (an intern) so as to not risk further error or impede production.

[61] In March 2021 a drawing had also been submitted by Mr Lakhan concerning a SCANIA bus which Mr Dinning considered late and had slowed production.

[62] After Mr Dinning was questioned by the board about the late production of the SCANIA bus and his view that (in part) there had been an error by Mr Lakhan, Mr Dinning decided to more formally talk to Mr Lakhan about his concerns.

[63] On a date in late March or early April 2021 Mr Dinning called Mr Lakhan into his office.

[64] There are a number of factual disputes about this meeting, including its timing and characterisation. Having generally accepted Mr Dinning’s evidence (with two caveats) over that of Mr Lakhan, I find:

•  It occurred after 18 March 2021 (not 18 March as claimed by Mr Lakhan). Evidence of relevant email exchanges (at R1) make it implausible that this meeting occurred whilst a subject matter of concern raised at the meeting was still a matter on which Mr Dinning was being briefed;

•  It was the first time Mr Lakhan had been called into Mr Dinning’s office. It was a closed door meeting;

•  Mr Lakhan had no prior notice of the meeting or matters to be discussed;

•  It was unusual for Mr Dinning to speak to engineers on a one-to-one basis in his office. All other discussions with Mr Lakhan has been informal after a group meeting or routine in the course of a day’s work, often informally at Mr Lakhan’s work-station;

•  The meeting discussed more than one performance concern. It was not just about the Mercedes seat layout, as claimed by Mr Lakhan, though that was discussed. Mr Dinning raised concerns generally (for example, timeliness, difficulty undertaking complex work) and other examples of concern;

•  Mr Dinning did not specifically introduce the meeting as a “performance meeting”, but performance was the subject of discussion. A fair characterisation of the meeting is that it was performance counselling, though this descriptor was not used;

•  No record was kept of the meeting;

•  It was not a disciplinary meeting. There was no warning given or reference made to the consequences of performance failure. The objective of the meeting was to formally advise of performance concerns and offer support to Mr Lakhan to overcome those concerns; and

•  The meeting ended on a friendly and supportive basis in which Mr Dinning offered to continue to work with Mr Lakhan via allocation of less complex work to raise his performance.

Performance analysis – April 2021

[65] During the month that followed (April 2021), Mr Koehne became Mr Lakhan’s line manager for task allocation purposes.

[66] By the end of April 2021 Mr Koehne formed the view that Mr Lakhan’s work was “significantly below standard”. 10 He formed the view that Mr Lakhan’s work “did not allow for engineering outputs to be translated into clear instructions to allow consistent manufacture and timely manufacture”.11

[67] At the end of April 2021 Mr Koehne discussed concerns about Mr Lakhan’s performance jointly with Mr Dinning and a former engineering program manager (Mr Saba).

[68] It was agreed that Mr Koehne would need to give Mr Lakhan clear tasks and closely monitor performance of those specific tasks.

[69] Mr Koehne subsequently:

•  Allocated clear tasks to Mr Lakhan;

•  Spent time after group meetings speaking one-to-one with Mr Lakhan about tasks allocated to ensure they were understood and that Mr Lakhan knew what was expected of him; and

•  Reported to Mr Dinning approximately once every three days about Mr Lakhan’s performance.

[70] Mr Lakhan was not made aware that Mr Koehne was having discussions of this nature with Mr Dinning.

Meeting with Mr Dinning – 4 May 2021

[71] One issue of concern that emerged for Mr Dinning by early May 2021 was work Mr Lakhan had been allocated to construct SWIs for the production of Mercedes SBV Front and Rear Panels.

[72] On 4 May 2021 Mr Dinning decided, in light of feedback from Mr Koehne and Mr Dinning’s concern at the quality of the drawing released by Mr Lakhan for the Mercedes SBV Front and Rear Panels, and a late lighting layout, to have a further meeting with Mr Lakhan about his performance.

[73] There are a number of factual disputes about this meeting, including its characterisation and content. Having generally accepted Mr Dinning’s evidence (with two caveats) over that of Mr Lakhan, I find:

•  The meeting was more formal and directive than the first meeting;

•  It was a closed door meeting held in Mr Dinning’s office;

•  Mr Lakhan had no prior notice of the meeting or matters to be discussed;

•  The meeting discussed more than one performance concern. It was not just about a singular issue (the lighting layout) as claimed by Mr Lakhan, though that was discussed;

•  Mr Dinning informed Mr Lakhan that he would be “performance managed” in light of the concerns expressed. A fair characterisation of the meeting is that it was a discussion about continuing performance concerns and notification of performance management. However, Mr Dinning did not warn or reference the consequences of performance failure. The objective of the meeting was to let Mr Lakhan know that he was to be performance managed given that previously discussed performance concerns continued. Mr Dinning told Mr Lakhan he was to be “performance managed”. However, Mr Dinning did not refer to what “performance management” meant nor the next steps in that process. No plan was tabled. No benchmarks, deliverables or time frames were discussed. Mr Dinning did not indicate that a performance management plan would be prepared;

•  No record was kept of the meeting; and

•  The meeting did not end on a cordial note. Whilst Mr Dinning offered continuing support, Mr Lakhan appeared taken aback at what was said and its directness.

[74] Following the second meeting, on 6 May 2021 Mr Dinning emailed Mr Marks and Mr Reynolds in the following terms: 12

“Roy was informed yesterday he is being put on performance management plan next week. This was the second verbal input that he is not meeting delivery commitments.”

[75] No template performance improvement plan existed at the time of the 4 May 2021 meeting. Mr Dinning subsequently sought a template from Mr Marks. None was provided to Mr Dinning and none was applied to Mr Lakhan by the time Mr Lakhan was dismissed.

Events following second meeting

[76] Mr Lakhan took a number of days personal leave immediately following the 4 May 2021 meeting. These were supported by appropriate certification. He then returned to work.

[77] Mr Dinning continued to monitor Mr Lakhan’s performance with Mr Koehne and Mr Saba. On 17 May 2021 Mr Dinning emailed Mr Saba and Mr Koehne: 13

“Chris,

Can you please ensure that Roy is given tasks each day that should be achievable by an engineer with his experience. Please ensure the task is clearly provided in the morning (either by Shane or yourself), and the completion level of the task is tracked each day. I would like a week’s effort to be provided today so any blockages will allow him to move onto a new task.

If needed Luke can provide some points for areas we wish to have design improvements on vehicles, which should be used to scope the work. No time critical items.

Regards,
Gregg”

[78] Mr Koehne replied: 14

“Hi Gregg

He has 3 tasks in work at the moment:

•  ADR 13 Lighting Layout (now in review with Luke)

•  Scania Hybrid – Electrical tray mounting brackets to be designed and drafted (he has started this, I expect it to be completed tomorrow)

•  ADR 13 Lighting Layout drawing for the Artic

I’ll give him another task tomorrow which should take him to the end of the week.

Shane”

[79] In late May 2021 Mr Lakhan injured his shoulder in an outside of work cycling accident. He was absent for about two weeks then returned with his arm in a sling. Whilst he was able to work, his shoulder injury contributed to some slowness and not feeling entirely himself.

[80] Mr Dinning and Mr Koehne, aware of the shoulder injury, continued to informally monitor Mr Lakhan’s performance but made allowances for his absence and limited mobility. He continued to be allocated task specific drawings and also simpler tasks, including describing vehicle compliance details to a government client. Those reports, in Mr Dinning’s view, lacked necessary detail.

Mercedes weld wire issue

[81] Around the end of June 2021 a problem arose when production of Mercedes buses in both Adelaide and Queensland was halted when production staff noticed that the weld wire being applied to the buses was not at Mercedes specifications.

[82] The halting of production at both production centres (with resultant costs to Bus Tech and delay to the client) was a matter that immediately came to the attention of Mr Dinning and the directors.

[83] Mr Dinning was instructed to urgently investigate what had happened and why, and report back.

[84] Mr Dinning investigated the issue, speaking to engineers and managers. He was shown the specific Mercedes specifications that required an enhanced level of welding beyond industry norms. He identified that the drawing for the weld on which production was occurring did not meet the enhanced Mercedes standard. He also traced the source of the error and identified that the drawing for the weld wire on the Mercedes bus had been prepared by Mr Lakhan.

[85] Upon tracing the issue back to Mr Lakhan, Mr Dinning spoke to Mr Lakhan. He told Mr Lakhan that the drawing was not consistent with Mercedes specifications for weld wire. Mr Lakhan said that he did not, until then, know that, and believed that he was simply tasked to draw the weld wire according to industry norms. Mr Dinning disagreed and believed that Mr Lakhan should have sourced the Mercedes specifications before submitting the drawing. Mr Dinning did not however return to Mr Lakhan and discuss the broader impact of the error on production.

[86] During the first week of July 2021 Mr Dinning reported his findings to the directors. In a meeting with Mr Reynolds and Mr Marks, attended by Mr Dinning, it was decided by Mr Reynolds and Mr Marks that Mr Lakhan had failed in his duty on the weld wire issue and that this was the final straw given previous concerns about his performance. The following morning the directors decided he would be dismissed. It was resolved that whilst both Mr Marks and Mr Reynolds would attend the dismissal meeting with Mr Dinning, that in light of Mr Reynolds’s long working association with Mr Lakhan that he (Mr Reynolds) would communicate the dismissal in person at a meeting to be convened by Mr Dinning.

Dismissal meeting – 9 July 2021

[87] On 9 July 2021 Mr Dinning called Mr Lakhan into a meeting. Mr Lakhan had no prior notice of the meeting or its subject.

[88] Mr Reynolds and Mr Dinning attended in person. Mr Marks was on speaker phone.

[89] Mr Dinning opened the meeting briefly. Mr Reynolds then took over. He informed Mr Lakhan that in light of continuing performance concerns including the Mercedes weld wire issue the directors had decided that Mr Lakhan would be dismissed on performance grounds effective immediately, with four weeks’ notice paid in lieu. He made reference to the fact that discussions about performance had been held in past months with Mr Dinning. He said that the company could not continue to justify employing an engineer at the level and pay of Mr Lakhan whilst getting performance below that level.

[90] Mr Lakhan was shocked and said little in his defence.

[91] Mr Reynolds told Mr Lakhan that he (Mr Lakhan) could gather his belongings and leave as he wished but also used words to the effect that Mr Dinning would see Mr Lakhan out.

[92] The meeting ended. Nothing was exchanged in writing. No record was taken.

[93] Mr Lakhan, in shock, went to his work-station and packed his belongings. He went to the kitchen and washed his cup. He was accompanied (followed) in both respects by Mr Dinning. Mr Dinning then walked with Mr Lakhan outside the building to the car park to assist carrying some items if needed. On his way out, Mr Lakhan spoke only briefly if at all to any colleagues.

[94] It was only in the following days that Mr Lakhan received a termination letter (dated 12 July 2021 15) and a separation certificate.

[95] The termination letter read:

“Dear Rohieth,

TERMINATION LETTER

We refer to your employment as a Manufacturing Engineer - Assembly Operations with BusTech (SA) Pty Ltd (formerly Precision Buses Pty Ltd) as part of BusTech Group (BusTech) pursuant to Letter of Offer dated 5 October 2017 signed and accepted by you on 1 November 2017.

As discussed on Friday 9 July 2021, we are terminating your employment with immediate effect.

Over the past few months, your performance has been under review by both Gregg Dinning and Chris Saba, both of whom have made you aware of this process. In this period, you have failed to fulfil your role in a number of areas including:

•  Long delivery times for straight forward tasks, delivery not keeping to time estimates; deadlines missed without notification and minimal alignment with the urgency of tasks and ensuring timely completion;

•  Incomplete work submitted, requiring rework e.g. weld instructions and work instructions;

•  Inability to lead work and develop new processes, no evidence of adopting changes introduced; delays to the initial Artic delivery due to single threaded approach to work breakdown;

•  In the last few months, only tasks that were deemed non-critical tasks (such as work instructions) were assigned to you as to do otherwise was deemed to be a business risk; notwithstanding these were often delivered after the production work had started leading to increased production time e.g. Mercedes weld instructions delivered late.

After Gregg discussed the need to improve output, there was no evidence of improvement. There were at least two direct feedback sessions reviewing performance and highlighting the need to increase your output pace. Unfortunately this did not happen.

Finally, when new tools were introduced to the engineering team, adoption by you was slow and poor (on the task tracker you stood out with unbooked time and untracked tasks).

Unfortunately, your consistent non-performance has resulted in BusTech (SA) terminating your employment with notice of 4 weeks per your Letter of Offer. You will be paid your notice period together with your accrued entitlements.

We thank you for your work with BusTech and wish you well in the future.

Yours sincerely

Dan Marks
Director”

[96] At the date of dismissal, Mr Lakhan’s annual remuneration was $101,500 plus statutory superannuation.

[97] After dismissal but prior to receiving the termination letter, Mr Lakhan received his final entitlements. 16

[98] Upon being dismissed on 9 July 2021, Mr Lakhan believed that he had been unfairly treated. He investigated his rights and on 14 July 2021 lodged on-line and in his own right an unfair dismissal application.

[99] Mr Lakhan subsequently instructed solicitors to act on his behalf.

[100] Post-dismissal, Mr Lakhan received supportive feedback by text from three former colleagues. 17 None of those colleagues were called to give evidence on opinions expressed.

Post-dismissal

[101] Since being dismissed, Mr Lakhan has actively sought employment as an engineer. He has applied for approximately 34 positions. Many (but not all) job applications were made in the weeks prior to the hearing of this matter. Fewer were made in the period immediately following dismissal.

[102] At the time of giving evidence, Mr Lakhan was awaiting advice from some of the prospective employers and had no sense of whether he would be interviewed or offered employment.

[103] To that date, Mr Lakhan had no post-dismissal earnings.

Submissions

Mr Lakhan

[104] Mr Lakhan claims his dismissal was harsh, unjust or unreasonable. He seeks an order for reinstatement or in the alternative compensation.

[105] He claims his dismissal was unfair on both substantive and procedural grounds.

[106] On substantive unfairness, Mr Lakhan submits:

•  There was no valid reason for dismissal;

•  Lakhan performed work assigned by managers competently;

•  There were no performance failures of significance that could warrant dismissal;

•  Where occasional errors arose, they were relatively minor or technical in nature and corrected when asked;

•  Whilst Mr Lakhan occasionally did not meet deadlines, this was usually due to the level of care and attention he applied;

•  Mr Lakhan attended meetings of the engineering department and was professional in dealings with other engineers and managers;

•  If Mr Lakhan was not a competent engineer, he would not have been employed by Precision Buses when his employment with ZF Lemforder ceased;

•  Performance criticisms levelled against Mr Lakhan in the dismissal letter and in these proceedings are exaggerated or contrived; and

•  The real reason for dismissal was a desire to give Mr Lakhan’s work to less costly junior engineers or interns.

[107] On procedural unfairness, Mr Lakhan submits:

•  There was no performance management. Neither the first nor the second meetings with Mr Dinning were performance management meetings. Each meeting discussed a singular issue, not performance generally;

•  No performance management plan was applied to Mr Lakhan;

•  There were no adequate opportunities to improve performance because no plan was established identifying the required improvement or time frames;

•  No notice was given of the so-called performance meetings. Thus there was no chance to be supported by a support person;

•  No record was made of the so-called performance meetings;

•  There were no disciplinary meetings or warnings. There were no warnings about the consequences of poor performance or that his job was at risk;

•  Legitimate absences from work and a physical limitation arising between the so-called second performance meeting and the dismissal made any adverse assessment of performance unfair;

•  The dismissal meeting was unfair because no notice of it or the subject matter was given. Thus, at dismissal, there was no chance to be supported by a support person;

•  The dismissal meeting was unfair because there was no opportunity to explain any allegations of poor performance. Dismissal had been predetermined;

•  The dismissal meeting was unfair because no adequate reason for dismissal was given and a dismissal letter was only sent days later; and

•  The dismissal was unfair because Mr Lakhan was humiliated by being escorted out of the premises and denied the opportunity to speak privately to colleagues.

[108] Mr Lakhan submits that in light of his age, employment prospects and the absence of a valid reason or procedural fairness, he should be reinstated to his former position.

[109] In the alternative, Mr Lakhan submits that he should be compensated for twenty-six weeks (the compensation cap) notwithstanding that he would have worked for at least another twelve months had he not been unfairly dismissed.

Bus Tech

[110] Bus Tech contend that the dismissal was not harsh, unjust or unreasonable and that no issue of remedy arises. It submits:

•  There was a valid reason for dismissal having regard to performance;

•  In the months prior to dismissal, Mr Lakhan was not reliably performing work to the standard of an experienced engineer;

•  When moved onto simpler tasks in 2021, Mr Lakhan continued to struggle to perform work without error. These simpler tasks were capable of being performed by junior engineers and interns and should have been competently performed by an experienced engineer such as Mr Lakhan;

•  The failures of performance were substantive and not just matters of form. Mr Lakhan’s work could not be used or relied upon by the production team or his managers;

•  In assessing performance in the months prior to dismissal, allowance was made for his absences and mobility limitations;

•  The failures of performance had adverse consequences on the engineering department and on production. Other engineers took on Mr Lakhan’s work (including corrections to it) and on occasions production was slowed or halted due to error traced back to Mr Lakhan’s drawings;

•  Mr Lakhan lost the trust and confidence of some engineers and ultimately his managers, and that loss was reasonably based;

•  Bus Tech could not be expected to continue to employ an experienced engineer at Mr Lakhan’s pay grade whilst not securing in return the output of an experienced engineer;

•  The dismissal was not procedurally unfair because Mr Lakhan had been informally spoken to during 2021 on multiple occasions by his managers, had two formal performance meetings with a senior manager (including the second where he was told he was being performance managed) and had had his duties simplified;

•  The dismissal was not procedurally unfair because Mr Lakhan had months to improve his performance since having his duties simplified and also following the two performance meetings;

•  The dismissal was not procedurally unfair because Mr Lakhan had an opportunity to explain each time performance issues were raised informally by managers and in the two performance meetings;

•  Whilst there was no written performance improvement plan activated or written warnings given, this was not required of an engineer of Mr Lakhan’s seniority in circumstances where he had been spoken to in two performance meetings and put on notice that he was being performance managed;

•  The dismissal meeting was not unfair because the reasons for dismissal were outlined with sufficient particularity and concerns with the Mercedes bus wire weld issue had been discussed earlier with Mr Lakhan by Mr Dinning; and

•  Mr Lakhan was not escorted out of the building by Mr Dinning. Rather, it was understood at the dismissal meeting that Mr Dinning would assist Mr Lakhan given any limitations on Mr Lakhan’s ability to carry items to his car due to his injured shoulder.

Consideration

[111] There are no jurisdictional or preliminary issues arising.

[112] I am satisfied that Mr Lakhan was a person protected from unfair dismissal within the meaning of section 382 of the FW Act. He served the required minimum employment period (section 382(a)). His annual rate of earnings did not exceed the high income threshold (section 382(b)(iii)). His employer was a “national system employer” within the meaning of section 14 of the FW Act. His application was filed within the required 21 days after dismissal.

[113] Bus Tech is not a “small business” for the purposes of the unfair dismissal provisions of the FW Act.

[114] I now consider whether Mr Lakhan’s dismissal was unfair.

[115] I take into account all evidence and submissions before me. Given the breadth of evidence, I specifically deal with matters that are most material to arriving at a decision. Some evidence and submissions are not referenced, not because I have not considered them, but because doing so would add excessive length to these reasons.

[116] Section 387 of the FW Act provides:

“387 Criteria for considering harshness etc.

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

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

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

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

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

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

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

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

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

Valid reason

[117] Valid in this context is generally considered to be whether there is a sound, defensible or well-founded reason for dismissal.¹⁸ In considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them.

[118] The reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not enough for an employer (other than in cases of summary dismissal by a small business employer¹⁹) to rely on its reasonable belief that the termination was for a valid reason.²⁰ Equally, facts justifying dismissal which existed at the time of the termination can be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.²¹

[119] The existence of a valid reason is not assessed simply by reference to a legal right to terminate a contract of employment.²²

[120] The reason for dismissal advanced by Bus Tech was “you have failed to fulfil your role in a number of areas” and “your consistent non-performance”. 23

[121] The particulars advanced by Bus Tech, at least in the dismissal letter, were: 24

•  Long delivery times for straight-forward tasks, delivery not keeping to time estimates; deadlines missed without notification and minimal alignment with the urgency of tasks and ensuring timely completion;

•  Incomplete work submitted, requiring rework e.g. weld instructions and work instructions;

•  Inability to lead work and develop new processes, no evidence of adopting changes introduced; delays to the initial Artic delivery due to single threaded approach to work breakdown;

•  In the last few months, only tasks that were deemed non-critical tasks (such as work instructions) were assigned to you as to do otherwise was deemed to be a business risk; notwithstanding these were often delivered after the production work had started leading to increased production time e.g. Mercedes weld instructions delivered late; and

•  Adoption to new tools was slow and poor.

[122] I now consider particulars of the alleged performance failures to ascertain whether they individually or collectively constituted a valid reason for dismissal.

Missing deadlines and lack of timeliness

[123] In his evidence, Mr Lakhan accepted there were occasions of missing deadlines and slowness in turnarounds. 25

[124] Mr Dinning, Mr Koehne and Mr Reynolds gave evidence referencing specific work by Mr Lakhan they considered slow or not completed inside deadlines. I am satisfied on the evidence that Mr Lakhan’s timeliness was deficient though this was not just a recent issue 26 and some of the consequences of those delays were overstated. For example, the evidence of Mr Dinning that a team of engineers were flown from Queensland to address Mr Lakhan’s slower than acceptable work on the Arctic project was not incorrect but contextually overstated.27 Mr Lakhan’s work was not always late or slow, but these instances were sufficiently common for that to be a valid concern with his output. He did miss some deadlines, including deadlines which had been extended or where he was alerted to the importance of meeting a particular deadline. He came to be regarded as somewhat slow on turning around work, and this was a reasonably held view of his managers.

[125] I am also satisfied on the evidence and find that the impact of Mr Lakhan missing deadlines and more than occasionally being slow in the turnaround of work was material. From time to time, it meant that work by others, whether in production or design, could not proceed as efficiently as planned, and (less commonly) production underway was impeded. It also had the impact that some engineers up the chain preferred to correct Mr Lakhan’s drawings themselves rather than return them to Mr Lakhan for correction, in order to minimise the risk of further delay.

[126] I take into account that an engineer must apply due care and attention to their work, and this requires time, particularly on complex tasks or where an engineer has multiple tasks to complete at the one time. Whilst occasionally Mr Lakhan did miss a deadline due to multiple tasks being performed, that alone did not mean that the deadline was unreasonable. The evidence before me does not establish that the deadlines imposed were unreasonable either in their own right or having regard to the various projects being worked on.

[127] I also take into account that in the final month of his employment Mr Lakhan had a mobility impairment that led to legitimate absences from the workplace. However, the slow turnaround in work was a problem that existed prior to those absences.

[128] The evidence also establishes that particularly in the final six months of employment, Bus Tech made specific allowances to manage those contingencies, by progressively allocating task-specific and simpler tasks to Mr Lakhan, by moving him away from time-critical production work and by clearly alerting him to deadline requirements, either in group meetings or in one-on-one discussions with Mr Koehne and Mr Dinning.

[129] Mr Lakhan was not undertaking engineering drawings in isolation from the business as a whole. His drawings were relevant to business planning, to the work of other engineers up the chain and ultimately to production. That being so, a failure by an engineer to reliably meet deadlines and to produce work in a timely fashion was a matter of significance.

[130] The missing of some deadlines by Mr Lakhan and general slowness in turning around work was a performance deficiency which, combined with other matters, was a valid reason for dismissal.

Substandard quality of work

[131] As noted, the standard of work that an employer can reasonably expect of an employee is one of competence, not perfection.

[132] Occasional errors in the course of otherwise competent work are unlikely to be a sufficient basis to ground a fair dismissal. Context however matters. Cause and consequence of errors is relevant, as is the position held, its seniority, qualifications and experience.

[133] Mr Lakhan was a professional engineer. His drawings, as with other engineers, had a capacity to profoundly impact the quality of a manufactured product such as a bus. Whilst checks and balances existed to identify errors up the chain (such as oversight by supervisors, other engineers working with the production team and the expertise of the production team itself) it was reasonable for Bus Tech to expect that Mr Lakhan’s work would be largely error free particularly when less complex tasks were assigned.

[134] Evidence before me of errors and shortcomings in Mr Lakhan’s work included work on the design of doors for the Action (Canberra) bus contract, engineering work on the Arctic bus project (that in part resulted in buses produced but not delivered to the client due to the need for testing) and on a Mercedes school bus (discussed below). 28

[135] I also accept the evidence of Mr Koehne of some drawings submitted by Mr Lakhan with cluttered content and parts that could not be identified by production staff were returned by production staff 29 and that these were errors of a basic nature30 though Mr Koehne conceded that not all comments or corrections recorded by production staff on drawings represented error31.

[136] I am satisfied that errors and shortcomings in workmanship occurred even though in some respects the adverse consequences were not wholly attributable to Mr Lakhan. Whether they were subsequently remediated by Mr Lakhan or by others, they are evidence of a less than satisfactory standard of performance in respect of those tasks.

[137] I take into account, and it important to give weight to the fact that Mr Lakhan’s work was not riddled with errors. As Mr Reynolds put it, “the thoroughness of the work was varied”. 32 There was work completed even in the final months of his employment which was competent, up to standard and added value to the business.

[138] However, the errors made were sufficient in frequency to be material. In his evidence, Mr Lakhan accepted that on one occasion he had submitted a drawing as “approved” by himself even though it was still incomplete. 33 He added:34

“there are cases mentioned in the statements where I accept responsibility”; and

“I have made mistakes, yes”.

[139] I do not accept the submission by Mr Lakhan that the errors were matters of form only and not substance. Errors, such as failure with the Mercedes school bus weld wire drawing (discussed below) was an example of an error of substance.

[140] Further, I do not accept that a drawing submitted by Mr Lakhan that was deficient because words or numbers are not clearly legible is not an error of substance but simply one of form. It was Mr Lakhan’s responsibility as an engineer to ensure that drawings he submitted up the line were both technically correct and also capable of being understood and interpreted by those in production. A core competency of an engineer is to prepare and submit drawings that do not have illegible content or overwrites on them. A drawing that cannot be used for that reason is no less deficient than a drawing that is legible but incorrect. The nature of the deficiency may be different, but each in their own way is evidence of a performance failure.

[141] I now turn to the alleged performance failure with the Mercedes bus weld wire issue. This alleged performance failure arose in late June 2021. It triggered the decision to dismiss. It caused the intended performance management process to be set aside. It thus has significance both in its own right and as a component of the employer’s case that, combined with other performance failures, a valid reason exists.

[142] It is not disputed that Mr Lakhan was tasked to prepare a drawing for aspects of the production of the Mercedes bus that included a drawing relating to its wiring specifications. It is not disputed that this was a project that was in production and that the drawing was needed to allow production to continue efficiently. Nor is it disputed that the drawing prepared by Mr Lakhan did not include weld wire specifications as set out by Mercedes in its product specifications for this particular bus. Nor is it disputed that the disparity between the drawing by Mr Lakhan and the Mercedes product specification was identified only at the production stage and that this inhibited production, both in Adelaide and Queensland. These facts emerged from the investigation by Mr Dinning and are established by the evidence adduced by Bus Tech in these proceedings. I make these findings.

[143] Are these facts concerning the Mercedes weld wire issue evidence of failure on Mr Lakhan’s part?

[144] I conclude they are.

[145] On the face of it, an engineer submitting a drawing for production purposes for the welding of wiring on a bus that does not meet the standard specified by the company that designed the bus and in whose name the bus would be manufactured has failed in their duty. Not being aligned to the manufacturer’s required specifications, the drawing by Mr Lakhan was not fit for purpose.

[146] However, Mr Lakhan claims that this was not a performance failure because firstly, he says he was following instructions to draw the weld according to industry standards only (not the enhanced Mercedes standard) and secondly, as he did not know of and was not provided a copy of the Mercedes specifications, a drawing to industry standards was not a performance failure. In his evidence Mr Lakhan said: 35

“In my original drawing there was no weld wire specified because there is only one type of weld wire that we use…I didn’t have the special wire information at the time.”

[147] I do not accept Mr Lakhan’s evidence that he was told by a manager to prepare drawings for this aspect of the bus simply on the basis of industry weld standards. Mr Lakhan’s evidence is self-serving and lacked particularity about what was said to him, when and by whom. Mr Lakhan did not call the manger or supervisor, whoever that was.

[148] Further, I do not accept that an engineer, let alone one of Mr Lakhan’s experience, exercises competent judgement by assuming that a bus component they are required to draw for production purposes is correctly drawn by applying a general industry standard (in this case it was the standard applied to a SCANIA bus) without taking steps to ascertain whether specific specifications have been set by the product designer and client. I accept Mr Dinning’s evidence that: 36

“the expectation of a senior engineer is to refer to the information provided by the builder not to rely upon a peer”.

[149] I take into account that the termination letter referred to the timeliness of the Mercedes drawing submitted as a “non-critical task”. 37 Both Mr Dinning and Mr Reynolds had difficulty explaining why this was so. Mr Koehne indicated that a non-critical drawing was one not immediately required for production.38 This notwithstanding, I accept the evidence of Mr Dinning and Mr Reynolds that the failure by Mr Lakhan to reference the Mercedes specifications was serious.39 Mr Lakhan had a responsibility to submit a compliant drawing, one upon which production could be based. He did not.

[150] The nature of the assumption made is evident from the following exchange: 40

“DEPUTY PRESIDENT: Do you consider that you have any responsibility as an engineer to prepare a drawing that’s in line with Mercedes Benz specifications if you are submitting a drawing on a Mercedes Benz bus?

MR LAKHAN: It will be if I am receiving or dealing directly with Mercedes Benz, yes.

DEPUTY PRESIDENT: So do I take it from that that you don’t consider yourself to have any responsibility to access or inform yourself of Mercedes Benz specifications unless that information is relayed back to you as an engineer by one of your superiors?

MR LAKHAN: I will take responsibility because I did not do a [inaudible] and effects analysis because I didn’t expect there to be a different weld wire requirement.

DPEUTY PRESIDENT: Do I take it from that that you made an assumption that the weld wire requirement for this drawing would be the same as weld wire requirement specifications for buses you had previously worked on?

MR LAKHAN: Yes, yes.”

[151] In making this assumption, and in not referencing the Mercedes specifications, Mr Lakhan failed in his duty. That was a failure of substance. It had consequences. It delayed production in both South Australia and Queensland. It led to Bus Tech engaging a third party assessor to restore senior management confidence in work that had been done on the Mercedes bus. 41

[152] I also find that Mr Lakhan lacked insight into the error. I accept Mr Dinning’s evidence that he was unable to “register it” 42 with Mr Lakhan when he spoke to him about what he ought to have done before submitting the Mercedes drawing for production.

[153] The performance failure with respect to the Mercedes weld wire issue combined with other deficiencies in quality of work, including on less complex work, were material and, collectively with other matters, a valid reason for dismissal.

Inability to lead

[154] Bus Tech allege that Mr Lakhan displayed an inability to lead work and develop new processes. The particulars referred to in the dismissal letter are confusing and confused. They refer to delays on the Arctic project. Mr Lakhan was not charged to lead that project and the failure on his part with respect to that project was not a failure of leadership.

[155] The particulars also refer to “no evidence of adapting to changes introduced”. In these proceedings, Bus Tech has the onus to establish such failure. Mere omission to do something is not necessarily failure.

[156] The only evidence of a “change” that Mr Lakhan is alleged to have not adapted to is the task tracker, being the software system introduced by Mr Dinning as a technology tool to enable engineers and managers to better know who was working on what task and in what time frame.

[157] Mr Dinning’s evidence that Mr Lakhan did not adapt to this tool was general in nature. It is insufficient for me to make a specific finding of a performance failure by Mr Lakhan. The extent to which Mr Lakhan used or did not use the tool, and his reasons for not using the tool to the level expected, does not emerge with particularity in the evidence.

[158] Nor was Mr Lakhan employed in a leadership position in the sense of leading or mentoring other engineers such as junior engineers or interns. Whilst exercise of judgement and initiative by an experienced engineer such as Mr Lakhan could be described as an act of leadership, I have dealt with those issues in the context of performance quality and not as leadership matters because there is no evidence before me that leadership as distinct from competence was required of Mr Lakhan.

[159] I do not find that Mr Lakhan was in a material sense required to provide leadership. Hence, any alleged failure to provide leadership is not made out and cannot support a valid reason to dismiss.

Failure to perform simpler tasks

[160] The allegation that Mr Lakhan failed to competently perform simpler tasks is a matter I have dealt with in the context of considering performance failures generally, on both simpler and more complex matters.

[161] I have found that in the final six months of employment Bus Tech progressively allocated simpler tasks to Mr Lakhan in light of performance concerns and following its assessment that Mr Lakhan’s work on complex tasks could not be fully relied upon. This was reasonable management action conducted in a reasonable manner.

[162] I have also found that some performance failures by Mr Lakhan were on simpler tasks, though I have also observed that Mr Lakhan’s work was not (whether on simpler or complex tasks) riddled with error.

[163] Bus Tech submit that the simpler tasks Mr Lakhan did not perform competently were able to be performed by junior engineers and interns. Whilst in some instances the evidence indicates this was so, it does not follow (as Bus Tech submit) that Mr Lakhan’s competency was at or below that of a junior engineer or intern. The evidence does not suggest that Mr Lakhan only undertook simpler tasks or that less experienced engineers could competently perform all of the work he undertook. Further, and more relevantly, Mr Lakhan’s performance is to be assessed on what he did and not on the basis of what comparatively was or could have been done by others.

[164] I find that Mr Lakhan failed to perform some but not all simpler tasks to a required standard of quality and timeliness. The incidence of such failures is not sufficient in its own right to be a valid reason for dismissal but in conjunction with other failures forms a material element on which a valid reason for dismissal was grounded.

Lack of adaptability and team orientation

[165] Bus Tech allege that Mr Lakhan did not add to a positive team orientation and culture amongst the engineering department.

[166] I do not make such a finding.

[167] I have observed that evidence of inability to adapt to change is insufficient to make a finding in that regard.

[168] As to team orientation and culture, the evidence is also insufficient to make such a finding.

[169] Mr Dinning’s evidence establishes that one of his objectives was to improve culture within the engineering department and that, in part, required engineers to work and understand their role within the team and to not act in isolation. Mr Dinning applied new management tools to pursue that goal, including team meetings, connectivity between South Australian and Queensland engineers and the task tracker technology.

[170] Mr Dinning’s evidence, which I also accept, was that in group meetings he observed Mr Lakhan present but not actively contributing to group discussion and in some instances physically standing back from the group.

[171] Whilst I accept this evidence, it is not a basis to make a finding that Mr Lakhan did not meet minimum requirements of being a team player. There is no evidence Mr Lakhan did not communicate or deal professionally with other engineers. Whilst some engineers lost trust and confidence in his work, others (such as Mr Gabrielli) did not.

[172] Not all professionals, whether experienced or not, have personalities whereby they readily impose their presence on a group. Assessing a professional’s contribution to culture and teamwork is a nuanced matter. The evidence before me is insufficient to make the finding sought by Bus Tech.

[173] I do not find that Mr Lakhan failed to meet minimum requirements to contribute to team culture amongst the engineering department. As the allegation is not made out, it cannot support a valid reason to dismiss.

Conclusion on valid reason

[174] To fairly assess whether a valid reason existed, Mr Lakhan’s performance needs to be objectively assessed against his contractual obligations as a whole and considered in the context of surrounding circumstances applicable at the time of relevant performance failures.

[175] The role contractually required of Mr Lakhan was that of a manufacturing engineer. It was from this position that Mr Lakhan was dismissed. Initially, his role was to be performed on the production side of the business. At the time of dismissal, he was on the design side.

[176] Making an assessment of valid reason is not assisted by the fact that there is no job description applicable to Mr Lakhan’s role, despite his contract of employment contemplating one being provided. 43

[177] An assessment of valid reason must be made in context. One such contextual matter is that Mr Lakhan was and held himself out as a qualified and experienced manufacturing engineer. 44 When employed by Bus Tech in October 2017, he was known by senior officers of Bus Tech (including Mr Reynolds) as such.

[178] Self-evidently, Mr Lakhan was not employed as an inexperienced engineer. He was employed as already having some thirty years of experience in South Africa and (since 2007) Australia. That said, this fact alone did not obviate Bus Tech from the need to ensure that even its qualified and experienced engineers were made familiar with its products and methods of doing business, and trained or supported in new systems, processes or technology.

[179] Another contextual matter is that both Mr Dinning and Mr Koehne came into the business in managerial and supervisory roles during the preceding twelve months. They were new to the business but not inexperienced. They came with a fresh set of eyes. Each held no preconceived view about any particular engineer. The assessments each made were based on what the business was requiring of its engineers and what the engineers were delivering, individually and as a team. Their assessment of Mr Lakhan was formed by direct observation as well as feedback from others. Whilst these assessments occurred across a relatively short period of direct assessment (Mr Dinning ten months, Mr Koehne four months), it was sufficient for considered opinions to be made of Mr Lakhan’s standard of work.

[180] I have found that whilst not all allegations by Bus Tech have been made out, there were material instances of substandard work quality and timeliness. I have found these were not daily occurrences but frequent enough to not be out of the ordinary. I have found that those deficiencies related not just to complex tasks assigned but also to some simpler tasks allocated. I have found that in the final six months of employment reasonable adjustments were made to the type of work allocated to Mr Lakhan (progressively simpler tasks) to accommodate performance deficiencies, but that relevant errors and failures still occurred. I have found the Mercedes wire weld issue, which triggered the decision to dismiss (but which was not the sole basis for it), was a material performance failure.

[181] I take into account that the statutory test in section 394 is whether a valid reason “for the dismissal” existed (my emphasis), not simply a valid reason for an employer to take disciplinary action short of dismissal.

[182] Considered overall, and taking into account that Mr Lakhan was employed as and required to exercise the skill and judgment of a qualified manufacturing engineer 45, I conclude that a valid reason for dismissal existed on account of deficiencies in work quality and timeliness at least in the six months January to June 2021.

[183] The failures in quality and timeliness warranted active management attention. Whilst counsel for Mr Lakhan correctly note that a formal performance improvement plan was not activated, it is not for the Commission to stand in the shoes of an employer and decide which form of performance assessment reasonably available to management could have or should have been exercised. 46 The absence of a formal plan is relevant to procedural fairness (discussed below) but does not vitiate a valid reason for dismissal that otherwise exists. I am satisfied that Mr Lakhan had sufficient support from his managers and the business as a whole to meet the quality and timeliness requirements expected of him and that those expectations were communicated clearly, fairly and regularly in those final six months. I am satisfied that the assessments made by his managers were fair-minded.

[184] I am also satisfied that some, but not all, of the engineers were reluctant to use Mr Lakhan and some preferred to do remediation of his work themselves. 47

[185] I need not conclude, as Bus Tech infer, that Mr Lakhan underperformed because engineering work he was required to perform was more technical in nature than work he had previously undertaken on suspension products for ZF Lemforder. This is speculative and unhelpful. No evidence of comparator skill requirements exists. It adds not to the determination of this matter. What matters is whether, in objective terms, Mr Lakhan failed to materially meet the quality and timeliness requirements of his contracted role with Bus Tech. I have found that in material respects those failures existed, and that the requirements imposed on Mr Lakhan were not unreasonable.

[186] I do not accept the submission by Mr Lakhan that he was dismissed for economic reasons (to be replaced by a cheaper junior engineer or intern rather than paying a senior engineer a six figure sum). That junior engineers may have performed or (since dismissal) been performing some of the work undertaken by Mr Lakhan is irrelevant. I have objectively found relevant performance failures. I do not find that Mr Lakhan was told at the dismissal meeting that he was being dismissed because he was more expensive than junior engineers. Mr Lakhan took it this way but that is not what Mr Reynolds said. I accept Mr Reynolds’s evidence that he told Mr Lakhan that, in Bus Tech’s view, it was getting the output of a junior engineer yet paying for a senior engineer. That was an observation primarily about performance. No inference can be drawn that Mr Lakhan was dismissed to reduce business costs. I am well satisfied that had Bus Tech not thought Mr Lakhan to be underperforming he would not have been dismissed. He would have continued in employment at his contractual salary.

[187] There was a valid reason for dismissal. A valid reason weighs against a finding of unfair dismissal. 48

Notification of reason for dismissal

[188] Notification of a valid reason for dismissal should be given to an employee protected from unfair dismissal before a decision is made to terminate their employment⁴⁹ and in plain and clear terms.⁵⁰

[189] I am satisfied on the evidence of Mr Dinning and Mr Reynolds that Mr Lakhan was advised at the dismissal meeting he was being dismissed for performance reasons. Whilst those failures were not particularised in the way they were in the subsequent dismissal letter, Mr Lakhan was informed in a general sense why he was being dismissed. I am satisfied that the Mercedes weld wire issue was mentioned in passing by way of example, as were the two earlier meetings with Mr Dinning.

[190] Whilst Mr Lakhan considered the expressed reason for dismissal to be inadequate, he was informed in those broad terms.

[191] However, the lack of particularity was unreasonable. Whilst a decision to dismiss had already been made and whilst the purpose of the meeting was, as far as Mr Reynolds and Mr Dinning were concerned, to communicate the fact of dismissal and not debate its merits, the lack of particularity was disrespectful to Mr Lakhan who was an experienced professional. It added to the dismissal’s harshness.

[192] This consideration weighs somewhat in favour of a finding of unfairness.

Opportunity to respond

[193] An employee protected from unfair dismissal should be provided an opportunity to respond to a reason for dismissal relating to their conduct or capacity. An opportunity to respond should be provided before a decision is taken to terminate an employee’s employment.⁵¹

[194] The opportunity to respond is an element of procedural fairness but does not require formality. This consideration is to be applied in a common-sense way to ensure the employee is treated fairly.⁵² Where an employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, that is enough to satisfy this consideration.⁵³

[195] The decision to dismiss was predetermined. It was made in advance of the dismissal meeting. In the week prior to dismissal, when the decision was made, Mr Lakhan had no relevant knowledge that his dismissal was being discussed by the directors. Nor did Mr Lakhan have any prior notice of the dismissal meeting or its purpose. It is self-evident then, and I find, that Mr Lakhan had no opportunity to respond at the dismissal meeting (let alone prior to the decision being made) to the proposition that his performance failures warranted dismissal. Whilst the weld wire issue was mentioned by Mr Reynolds, it was mentioned only in passing and not as a discussion point.

[196] More broadly, and even taking into account that Mr Lakhan lacked a certain degree of insight into his performance failures (especially concerning the weld wire issue), he was denied procedural fairness in a number of egregious ways.

[197] The so-called ‘performance management’ prior to dismissal was ham-fisted. It matters not whether Mr Dinning told Mr Lakhan on 4 May 2021 that he was under performance management or whether he was going to be put under performance management. The relevant fact is that Mr Lakhan was never put on a formal performance management plan. I make allowance for the fact that, in a practical sense, the level of formality required when performance managing a qualified professional may differ from an unskilled employee. However, even making that allowance, performance management of Mr Lakhan was deficient in both substance and form. In substance, there was no established benchmark or review point against which Mr Lakhan’s performance was to be assessed. No performance improvement plan was created and if one was contemplated by Mr Dinning (as he says) that intention was not communicated to Mr Lakhan. In any event, the Mercedes wire weld issue set aside his intent to formally manage Mr Lakhan according to a structured plan.

[198] That said, I accept Mr Dinning’s evidence that at each of the two ‘closed door’ meetings with Mr Lakhan (4 May 2021 and late March/early April 2021) the performance concerns were discussed, such that the first meeting can be characterised as performance counselling and the second as notification of performance management. I specifically prefer Mr Dinning’s evidence that more than one issue of concern was discussed at each meeting. Mr Lakhan’s evidence that only one issue was discussed is difficult to reconcile with the fact that multiple issues of concern were known to Mr Dinning at the time, and that Mr Lakhan’s duties had already been simplified.

[199] I also accept Mr Dinning’s evidence that in the latter months of his employment he spoke to Mr Lakhan on two or three occasions per month about issues of concern 54 though Mr Dinning conceded that, in the early months of his time in Adelaide he observed concerns but did not always raise them with Mr Lakhan55.

[200] However, the two meetings with Mr Dinning were not recorded (a failure acknowledged by Mr Reynolds in his evidence 56), there was no mention of possible disciplinary consequences57, and at no time did Mr Dinning explain what “performance management” meant notwithstanding those words being used during the second meeting.

[201] I have found that Mr Dinning did speak to Mr Lakhan about the Mercedes weld wire issue prior to the decision to dismiss, though that was in the context of Mr Dinning investigating the source of the problem. He did not go back to Mr Lakhan and discuss the impact of the error or it gravity. 58 It was not, at that stage, formally presented to Mr Lakhan as a disciplinary issue.

[202] Further, whilst Mr Koehne considered Mr Lakhan’s work to be “significantly below standard” and despite being his task manager, Mr Koehne did not speak to Mr Lakhan about his performance concerns, preferring to leave that to Mr Dinning. 59

[203] Considered overall, although Mr Lakhan had somewhat of a tin ear to the performance concerns raised, he was denied procedural fairness including because he was denied a relevant opportunity to respond prior to dismissal that his performance failures warranted disciplinary sanction that may include dismissal.

[204] This consideration weighs in favour of a finding of unfairness.

Opportunity for support person

[205] Where an employee protected from unfair dismissal has requested a support person to assist in discussions relating to dismissal, an employer should not unreasonably refuse that person being present.

[206] Even though he was employed as a professional, it would have been reasonable for Mr Lakhan to have had the opportunity of a support person, if he sought one, at the performance meetings and at the dismissal meeting. In view of the absence of advance notice of all three meetings, he had no opportunity to organise let alone communicate his position in this regard.

[207] However, as no request was made, Bus Tech did not unreasonably refuse Mr Lakhan a support person.

[208] This is a neutral consideration.

Warnings concerning performance

[209] I have found that during the six months prior to dismissal Mr Lakhan was counselled by managers about workmanship and performance.

[210] I also find that Mr Lakhan lacked insight into what he was being told by managers about these performance concerns. In particular, he ought to have recognised that both of the closed door meetings with Mr Dinning, out of the ordinary as they were, had a character of formality. That ought to have heightened awareness about his performance. In his evidence, whilst accepting some error on his part, Mr Lakhan continued to lack insight. In his witness statement he said: 60

“I am at a complete loss as to why Bus Tech terminated my employment.”

[211] In cross examination he said: 61

“MS STEWART: Mr Lakhan do you say you had no idea whatsoever that your employer thought your performance was poor?

MR LAKHAN: Yes…I had no idea…none whatsoever”

[212] In view of discussions about workmanship and the performance meetings, this evidence is not plausible and indicative of a lack of insight on Mr Lakhan’s part.

[213] However, the dismissal occurred absent oral or written warnings concerning performance or the fact that continuing performance failures could lead to dismissal. Mr Lakhan’s level of seniority was not such that the clarity which accompanies a formal warning could in fairness be dispensed with.

[214] This consideration weighs in favour of a finding of unfairness.

Size of enterprise and human resource capability

[215] Bus Tech (SA) and the Bus Tech Group are privately owned businesses employing approximately 150 persons across two states. They are not small businesses.

[216] There is no sense in which the size of Bus Tech or the absence of internal human resources capacity mitigates shortcomings in decisions its managers and board made to performance manage and dismiss Mr Lakhan.

[217] Whilst the evidence and my findings establish failures in managing human resources, it was Bus Tech’s decision as it how it sourced its human resources advice and equipped its managers to manage performance and human resource issues.

[218] The failure of human resources management was significant and there is no relevant mitigation based on these considerations. This is a neutral consideration.

Other matters

[219] There are no other relevant matters that arise or were advanced by either party.

Conclusion

[220] In considering whether Mr Lakhan’s dismissal was “harsh, unjust or unreasonable” the Commission is required to consider each of the matters in section 387 of the FW Act to the extent relevant.⁶² Those matters must be considered as part of an overall assessment. Each assessment must be made on its merits. That assessment is to be based on the ordinary meaning of the words, in their statutory context. Context includes the object stated in section 381(2) of the FW Act that:

“…the manner of deciding on and working out such remedies are intended to ensure that a “fair go all round” is accorded to both the employer and the employee concerned.”

[221] In arriving at an overall assessment, the statutory considerations must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly.⁶³

[222] The ambit of the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd  64 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.”

[223] In reaching my conclusion, I adopt the approach set out by a Full Bench of this Commission in B, C and D v Australian Postal Corporation T/A Australia Post: 65

“[58] Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:

(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;

against

(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.

[59] It is in that weighing that the Commission gives effect to a ‘fair go all round’.”

[224] Unfair dismissal matters are multifactorial.⁶⁶

[225] I have found there were performance deficiencies that constituted a valid reason though not with respect to all matters alleged by the employer. The waning of trust and confidence was reasonably founded given the nature of the performance concerns, their relative frequency in the last six months of employment and the lack of remediation and insight displayed by Mr Lakhan despite managers progressively allocating simpler tasks, having day-to-day discussions and holding two performance meetings.

[226] I take into account the observations of a Full Bench of the Commission in Parmalat Food Products Pty Ltd v Wililo: 67

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.”

[227] In this passage both the importance of a valid reason and procedural fairness are emphasised.

[228] I have found that the performance management undertaken by Bus Tech was ham-fisted and disrespectful to Mr Lakhan as a professional engineer.

[229] This is not a matter where procedural deficiencies in implementing a dismissal are not significant nor is this a matter where conduct or performance shortcomings outweigh procedural deficiencies. 68 This is a matter of a professional engineer, whose workmanship was in relevant ways below standard and had somewhat of a tin ear to the assessment of new but fair-minded managers, who was materially denied due process.

[230] In being denied due process, Mr Lakhan was denied being confronted with the blunt reality that he needed to urgently lift output and the standard of his work or else face being dismissed. As a professional engineer, that reality would have allowed him to starkly reflect on whether the requirements of engineers in this business aligned with his skills and whether he could reasonably meet those requirements.

[231] For these reasons, and notwithstanding there being a valid reason (and in that sense, dismissal not being unreasonable), I find the dismissal to have been harsh and unjust.

Remedy

[232] Having found Mr Lakhan’s dismissal unfair on these grounds, I now turn to remedy.

[233] In determining remedy, I am required to apply the provisions of Division 4 of Part 3-2 of the FW Act. Section 390 provides:

“390 When the FWC may order remedy for unfair dismissal

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

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

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

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

(3) The Commission 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.”

[234] In this matter, the requirements of subsections (1) and (2) have been met.

[235] A decision to order a remedy is discretionary. 69 Subsections (1) and (2) provide that the Commission “may” make an order. The FW Act does not require the Commission to do so.

[236] Having regard to my findings, and in particular the conclusion that Mr Lakhan was unfairly dismissed, I am satisfied that I should exercise discretion in favour of granting a remedy.

[237] The only remedies required to be considered are reinstatement under section 391 of the FW Act or compensation under section 392. I am required by the provisions of section 390(3) to not order compensation unless I am “satisfied that reinstatement is inappropriate”. 70 

Reinstatement

[238] Mr Lakhan is seeking reinstatement.

[239] An order for reinstatement can be either an order appointing the person “to the position they were employed immediately before the dismissal” 71 or to “another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal”.72

[240] In making a reinstatement order, the Commission has discretion to make ancillary orders maintaining continuity of employment and restoring lost pay because of the dismissal. 73 

[241] Is reinstatement appropriate?

[242] Mr Lakhan seeks an order for reinstatement to his former position accompanied by an order to restore lost pay and an order to maintain continuity of service.

[243] Bus Tech oppose an order for reinstatement. It says such an order would not be merited especially where a valid reason for dismissal exists. It also submits that reinstatement would be unworkable given the working relationships required within the engineering department, and with managers and production staff.

[244] As a general proposition, it is inappropriate to order reinstatement if an employment relationship has irretrievably broken down and there are no reasonable prospects of it being restored. 74

[245] This proposition flows from the fact that trust and confidence is a necessary ingredient in an employment relationship. However, the mere fact that an employer asserts trust and confidence has been eroded to such an extent that the relationship is irretrievable is not, in itself, a sufficient ground on which to conclude that reinstatement is inappropriate. An objective consideration of the question needs to be undertaken and the conclusion reached should be soundly and rationally based. 75

[246] Further, mere embarrassment or difficulty on the part of an employer or certain persons is not necessarily indicative of a loss of trust or confidence sufficient to render the employment relationship irretrievable. 76 

[247] I take into account that Mr Koehne and Mr Dinning, whilst likely to be exposed to some discomfort should an order be made, were professional in outlook and manner when dealing with Mr Lakhan. They appear capable of overcoming mere awkwardness or embarrassment should reinstatement be ordered. There is also the possibility (and I place it no higher) of performance improvement if Mr Lakhan were reinstated and placed on a formal performance management plan. There is also the possibility (and again I place it no higher) that Mr Lakhan’s lack of insight may be remediated by a formal disciplinary process.

[248] However, objectively considered, these factors are outweighed by the following:

[249] Firstly, I have found there to be a valid reason for dismissal based on performance failures. Particulars of those failures are matters of substance and not technicality. Mr Lakhan’s position was a responsible one yet in material ways the standard of some of his workmanship and drawings could not be reliably used in production.

[250] Secondly, I have found a sound and rational basis for the loss of trust and confidence in key aspects of Mr Lakhan’s workmanship amongst his managers and Bus Tech’s senior executives. Given this, a productive and viable employment relationship cannot reasonably be restored having regard to the close working relationships required within the engineering team and between engineers, managers and production staff.

[251] Thirdly, I have found Mr Lakhan lacked insight into performance deficiencies even after they were discussed with him by Mr Dinning. That lack of insight continues. Mr Lakhan, in his evidence said: 77

“MS STEWART: You are seeking reinstatement…the view that is being expressed is that they are reluctant to involve you in the work. How do you say you are going to address that?

MR LAKHAN: I will have to have a discussion with them and try and improve or change the mindset.

MS STEWART: So, improve and change their mindset; is that what you are suggesting?

MR LAKHAN: If that is how they are going to be interacting with me, yes, then I will have to have a discussion with them to change their mindset.

MS STEWART: But not improve your performance?

MR LAKHAN: I don’t think my performance is poor.”

[252] Whilst recognising Mr Lakhan’s generalised acknowledgement elsewhere in his evidence of some errors on his part, his desire to “change the mindset” of his managers but not his performance does not suggest a balanced insight into the challenge that he, as an underperforming engineer, would present for the business. This lack of insight is relevant to the appropriateness of reinstatement. As observed by a full bench: 78

“the extent that evidence and conduct sheds light upon the likely conduct and attitudes towards the relationships of the parties in the workplace in the event of a reinstatement, this is potentially relevant to the assessment of whether that remedy is appropriate.”

[253] For these reasons, reinstatement is inappropriate.

Compensation

[254] I turn to the issue of compensation. Section 392 of the FW 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.”

[255] I now consider each of the criteria in section 392 of the FW Act.

Viability: section 392(2)(a)

[256] Whilst Bus Tech is a private business, there is no evidence that a compensation order of the scale I will award would affect business viability.

Length of service: section (section 392(2)(b))

[257] Mr Lakhan worked for Bus Tech (including with Precision Buses) since October 2017, a period of three years nine months.

Remuneration that would have been received: section 392(2)(c)

[258] There is a necessary element of informed projection inherent in considering this factor. That projection is to be informed by the nature of the work and the circumstances facing both the business and Mr Lakhan at the time of dismissal, including his employment context.

[259] Mr Lakhan was a full time engineer and, as such, had a reasonable expectation of ongoing employment all things being equal. He enjoyed working in the industry and was taken aback by his dismissal.

[260] Things were not however equal. There was a valid reason for dismissal. There were objectively established concerns with his performance and, in the six months prior, Mr Lakhan’s duties had progressively been adjusted to include simpler tasks. On multiple occasions managers had informally discussed workmanship and what was expected of him. He had two performance meetings (one performance counselling and one notice of performance management) in the three months prior to dismissal. Following that second meeting, a performance failure of a serious nature had arisen.

[261] There had not however been a formal performance management plan activated (despite it being contemplated by his senior manager) nor a disciplinary process.

[262] I do not accept Mr Lakhan’s submission that he would have been employed “well into the future” and beyond the compensation cap of six months. This submission makes little allowance for the collective performance failures I have found and that a valid reason existed. Given that the performance failures were not rare occurrences, and given the seriousness of the Mercedes weld wire failure, and taking into account the somewhat remote possibility that performance may have lifted to an acceptable standard after structured management, I consider it likely that further evidence of performance failures would have emerged within a two month period.

[263] If performance had remained below par after structured performance management, some time (but not excessive given the history) would have been required to implement a procedurally fair disciplinary or dismissal process should termination have remained an option.

[264] I consider that a reasonable projection of ongoing employment would be:

•  Time sufficient for the proposed performance management plan to be developed (accompanied by a formal written warning to the extent Bus Tech saw fit) (notionally one week);

•  Time sufficient for the performance management plan to be implemented and Mr Lakhan’s performance objectively assessed against reasonable benchmarks (including discussion with Mr Lakhan) (notionally eight weeks);

•  Time to assess whether any ongoing performance failure was sufficient to warrant disciplinary warning or dismissal (including discussion with Mr Lakhan) (notionally one week);

•  Time to implement dismissal (if any) in a fair manner (notionally one week).

[265] Considered overall, I conclude that a further period of employment of eleven weeks would be a reasonable projection. It is this period on which a compensation order will be based.

Income likely to be earned: section 392(2)(f)

[266] In this eleven week period Mr Lakhan would have earned $21,471.15 gross plus superannuation (at 10%) of $2,147.10.

[267] I am satisfied that Mr Lakhan has adequately sought to mitigate his loss despite having earned no income since dismissal. He has applied for at least thirty four jobs, and supplied those details to Bus Tech’s solicitors. Bus Tech do not submit that I should make a deduction on the ground of inadequate mitigation of loss. I consider it would be unreasonable to do so.

[268] Nor do I make deduction on account of contingencies such as the prospect Mr Lakhan may secure one of those jobs. That would be unfair given that the eleven weeks of compensation I will order does not exceed the period between dismissal and Mr Lakhan giving his evidence that future work had not yet been obtained.

Other matters: section 392(2)(g)

[269] There are no other matters or contingencies to be taken into consideration.

[270] I will not deduct from the compensation order the payment made by Bus Tech in lieu of notice (four weeks). Dismissal based on a hypothecated ongoing eleven week employment period would have been for performance reasons, not serious misconduct. Dismissal on that account would have been required, under the terms of Mr Lakhan’s contract, to have been on four weeks’ notice. It would be unfair, in the context of this matter, the contract and the overall quantum of the compensation order I will make, to deduct a payment made that would still be required to be made.

Misconduct: section 392(3)

[271] Mr Lakhan’s dismissal was based on performance failures. I have found no misconduct and none is asserted by the employer. I make no deduction on this account.

Shock, Distress: section 392(4)

[272] Compensation allowable by the FW Act does not include a component for hurt feelings. The compensation order will make no provision for such matters.

Compensation cap: section 392(5)

[273] The amount of compensation I will order does not exceed the six-month compensation cap.

Conclusion on compensation

[274] An order by way of remedy is an integral part of determining an unfair dismissal application. As with the decision on merit (unfairness) it needs to reflect the statutory principle of a ‘fair go all round’.

[275] A decision to order a remedy is discretionary. The quantum of any compensation must take into account the circumstances set out in section 392(2) and apply those considerations as a whole and consistent with the ‘fair go all round’ principle.

[276] Whilst an orderly process of quantification is to be conducted in accordance with established authority, 79 the quantum (if any) ultimately needs to be a sum that reflects the overall exercise of discretionary considerations.

[277] Having regard to section 392 and overall discretionary considerations, I conclude that Mr Lakhan should be compensated by the payment of a sum equivalent to eleven weeks at his rate of pay at the time of dismissal, to be paid in addition to the already paid four weeks’ notice in lieu.

[278] This amounts to a gross sum of $21,471.15 (less tax) plus $2,147.10 superannuation.

[279] I consider this compensation sum to be consistent with the application of section 392 and just having regard to discretionary considerations.

Conclusion

[280] I conclude that Mr Lakhan was unfairly dismissed because his dismissal was harsh and unjust.

[281] I conclude that reinstatement is inappropriate.

[282] I conclude that an order for compensation is appropriate.

[283] I conclude that the amount of compensation payable under sections 390 and 392 of the FW Act $21,471.15 (to be taxed as required by law) plus an amount of $2,147.10 to be paid into the superannuation fund applicable to Mr Lakhan’s former employment.

[284] I will order these sums be paid within fourteen (14) days of the date of this order.

[285] In conjunction with the publication of this decision, I issue an order 80 in those terms.

DEPUTY PRESIDENT

Appearances:

A Clare and B Smith with permission on behalf of Rohieth Lakhan

K Stewart (of counsel) with N Linke and S Beer, with permission, for Bustech Group Pty Ltd

Hearing details:

2021
Adelaide (by video conference)
4 and 5 November

Final written submissions:

Rohieth Lakhan – 19 November 2021

Bustech Group Pty Ltd – 19 November 2021

Printed by authority of the Commonwealth Government Printer

<PR735740>

 1   Directions hearing 24 August 2021

 2   A1 Statement Rohieth Soogrim Lakhan (undated); A2 Reply Statement (undated)

 3   R3 Statement Gregg Ean Dinning 1 October 2021

 4   R4 Statement Shane Randell Koehne 1 October 2021

 5   R5 Statement Christian Charles Reynolds 1 October 2021

 6   (1959) 101 CLR 298

 7   Tamayo v Alsco Linen Service Pty Ltd (1997) Print P1859 as cited in Hyde v Serco Australia Pty Limited [2018] FWCFB 3989 at [102]

 8   R1 Attachment 1 Letter of Offer 5 October 2017; Attachment 2 CV

 9   A2 Attachment 1

 10   R4 paragraph 27

 11   Ibid

 12   R2 Email 6 May 2021 12.46pm

 13   R3 GD-03

 14   ibid

 15   A1 Attachment 4

 16   R1 Attachment 3 Pay Slip for 9/7/2021

 17   A2 Attachment 2

18 Sydney Trains v Hilder [2020] FWCFB 1373 at [26]

19 Small Business Fair Dismissal Code: section 388(2) FW Act

²⁰ see Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; King v Freshmore (Vic) Pty Ltd AIRCFB Print S4213; Edwards v Giudice (1999) 94 FCR 561; Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 and Rode v Burwood Mitsubishi AIRCFB Print R4471

²¹ Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 373, 377‒378; Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1, 14. See also Dundovich v P & O Ports AIRC PR923358 at [79]; Lane v Arrowcrest (1990) 27 FCR 427, 456; cited with approval in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410, 467 and 468

22 Sydney Trains v Hilder [2020] FWCFB 1373 at [26] principle (6)

 23   A1 Attachment 4

 24   Ibid

 25   Audio transcript 4.11.21 11.00am and 11.45am (note: the audio transcript times footnoted are AEDST)

 26   Mr Reynolds audio transcript 5.11.21 11.35am

 27   Mr Dinning R3 paragraph 25 contrasted to audio transcript 1.24pm to 1.29pm

 28   For example, Mr Reynolds audio transcript 5.11.21 11.36pm to 11.40am

 29   Audio transcript 5.11.21 10.17pm; 10.43; 10.46

 30   Audio transcript 5.11.21 10.56pm

 31   Audio transcript 5.11.21 10.19pm

 32   Audio transcript 5.11.21 11.43am

 33   Audio transcript 4.11.21 11.28am

 34   Audio transcript 4.11.21 11.44am

 35   Audio transcript 4.11.21 11.47am

 36   Audio transcript 4.11.21 4.00pm

 37   A1 Attachment 4 dot point 4

 38   Audio transcript 5.11.21 10.59pm

 39   For example, Mr Reynolds audio transcript 5.11.21 12.14pm

 40   Audio transcript 5.11.21 11.48pm

 41   Audio transcript Mr Reynolds 5.11.21 12.51pm

 42   Audio transcript 4.11.21 4.26pm

 43   A1 Attachment 1 clause 1

 44   A1 Attachment 2

 45   Mr Reynolds audio transcript 5.111.21 12.33pm and 12.40pm

 46   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685

 47   Mr Koehne audio transcript 5.11.21 10.17am; 10.58am

 48   Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 7498 at 20

49 Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 at [73]

50 Previsic v Australian Quarantine Inspection Services Print Q 3730 (AIRC, 6 October 1998)

51 Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 at [75]

52 RMIT v Asher (2010) 194 IR 1 at 14-15

53 Gibson v Bosmac Pty Ltd (1995) 60 IR 1 at 7

 54   Audio transcript 4.11.21 1.07pm and 1.13pm

 55   Audio transcript 4.11.21 1.28pm and 1.31pm

 56   Audio transcript 5.11.21 12.21pm and 12.44pm

 57   Mr Dinning audio transcript 4.11.21 3.25pm to 3.59pm

 58   Audio transcript 4.11.21 4.28pm to 4.31pm

 59   Audio transcript 5.11.21 10.26pm

 60   A1 paragraph 30

 61   Audio transcript 4.11.21 10.54am

62 Sayer v Melsteel Pty Ltd [2011] FWAFB 7498 at [14]; Smith v Moore Paragon Australia Ltd PR 915674 at [69] (AIRC, 21 March 2002)

⁶³ Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation (2004) 133 IR 458 per Ross VP, Williams SDP, Foggo C and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C at [36]

 64   [1995] HCA 24; (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ

 65   [2013] FWCFB 6191

66 Jones v Brite Services [2013] FWC 4280 at [24]

 67   [2011] FWAFB 1166 at 24

 68   Tham v Hertz Australia Pty Limited [2018] FWCFB 5972 at [46]

 69   Nguyen v Vietnamese Community in Australia trading as Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 at [9]

 70   Section 390(3)(a) FW Act

 71   Section 391(1)(a) FW Act

 72   Section 391(1)(b) FW Act

 73   Sections 391(2) and (3) FW Act

 74   Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186

 75   Ibid at [191]

 76   Nguyen v Vietnamese Community in Australia trading as Vietnamese Community Ethnic School South Australia Chapter [2014] FWCFB 7198 at [27]

 77   Audio transcript 4.11.21 12.22pm

 78   Lee v Superior Wood Pty Ltd [2020] FWCFB 1301 at [55]

 79   Ellawala v Australian Postal Corporation [2000] AIRC 1151, Print S5109; Sprigg  v Paul’s Licensed Festival Supermarket [1998] AIRC 989, Print R0235

 80   PR735741