100213919

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES DVG MORLEY CITY HYUNDAI

APPELLANT

 - and -

 MAURO FABBRI

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  SENIOR COMMISSIONER A R BEECH

  COMMISSIONER S WOOD

DELIVERED THURSDAY, 21 NOVEMBER 2002

FILE NO/S FBA 36 OF 2002

CITATION NO. 2002 WAIRC 07057

_______________________________________________________________________________

Decision  Appeal dismissed

Appearances

Appellant   Mr C S Fayle, as agent

Respondent   Mr M Fabbri, on his own behalf

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1         This is an appeal against the decision of the Commission, constituted by a single Commissioner, brought by the abovenamed appellant employer.

2         The appeal is against the decision of the Commission in Matter No. 251 of 2002.

3         The decision appealed against is constituted by an order made on 1 August 2002, which, formal parts omitted, reads as follows (see page 40 of the appeal book (hereinafter referred to as “AB”)):-

“(1) DECLARES that Mauro Fabbri was unfairly dismissed by Morley City Hyundai;

 (2) DECLARES that reinstatement is impracticable;

 (3) ORDERS that Morley City Hyundai pay Mauro Fabbri $18,200.00 within 7 days of the date of this order.”

GROUNDS OF APPEAL

4         It is against that decision that the appellant now appeals on the following grounds (see pages 3-4 (AB)):-

“1. That the Learned Commissioner erred in fact by finding that Mauro Fabbri was employed as a Workshop Controller and from time to time Foreman in the face of Mr Fabbri’s own evidence that he had been demoted to Workshop Foreman in early 2001 and further demoted to “Team Foreman” later that year.

 2. That the Learned Commissioner erred in failing to properly take into account two previous demotions within the period of employment, and the fact that the employee had acquiesced to such conditions within the Contract of Employment. The Learned Commissioner in finding that the two previous demotions within the previous year were as a result of restructuring of the business in an attempt to cure problems within the Service Department should also have found that the dismissal of Mr Fabbri was part of the same ongoing restructuring process.

 3. That the Learned Commissioner erred in law and in fact by failing to take into account the supervisory, or managerial, responsibilities within Mr Fabbri’s Contract of Employment and his clear unwillingness to accept responsibility.

 4. That the Learned Commissioner erred in fact by failing to recognise the similarities between the duties allegedly performed by Mr Fabbri in the position occupied by him immediately prior to his dismissal and the duties contained in the position offered to him which he claims to have been physically incapable of performing.

 5. That the Learned Commissioner erred by not finding that Mr Fabbri was dismissed for non-performance.

 6. That the Learned Commissioner erred by failing to properly recognise the management nature of Mr Fabbri’s employment and to apply the consequent lack of necessity for formal warnings of possible termination.

 7. The Learned Commissioner erred by finding that had Mr Fabbri not been terminated on the 8th February he would have continued to be employed for a lengthy period in the face of uncontroverted evidence that the Service Department continued to be restructured.

 8. That the Learned Commissioner erred by not taking into account the uncontroverted evidence that the situation in the Service Department improved after the dismissal of Mr Fabbri.

 9. The Learned Commissioner erred by ruling that Mr Fabbri had properly attempted to mitigate his loss in the face of evidence that the Appellant continued to offer him a supervisory position in the pre-delivery section which enabled him to earn the same amount as in his previous position.

10. That the learned Commissioner’s discretion miscarried in her total acceptance of Mr Fabbri’s evidence as to his dismissal based on the hesitant demeanour of Mr Triscari.

11. That the learned Commissioner erred in law by failing to properly apply the principles in Mouritz v Shire of Esperance (1990) 71 WAIG 891

12. That the Learned Commissioner erred in law by failing to correctly apply the test found in Undercliffe Nursing Home v Federated Miscellaneous Workers’ Union of Australia (1985) 65 WAIG 385.

13. That the Learned Commissioner erred in law by failing to correctly apply the principles in RS Components Ltd v RE Irwin 1974 AllER 41.

The Appellant asks the Full Bench to uphold the appeal and quash the decision or, subject to subsection (6), vary it in such manner as the Full Bench considers appropriate.”

NEW EVIDENCE

5         It was sought by the appellant’s agent to adduce new evidence in the form of customer service index reports to prove that the performance in the service department had improved since the termination of Mr Fabbri’s employment.  It was palpably not new evidence, because there was evidence to this effect already before the Commission at first instance from Miss Clare Morrison and from Mr Richard Stephen Smith, to the same effect.

6         On all of the tests outlined in Federated Clerks Union v George Moss & Co. Pty Ltd 70 WAIG 3040; 71 WAIG 318 (FB) and the authorities referred to therein, the evidence is not admissible as new evidence.  Further, no notice of this application had been given to the respondent who was appearing in person.

7         The application to adduce fresh evidence was dismissed.

BACKGROUND

8         The abovenamed respondent brought an application at first instance under s.29(1)(b)(i) of the Industrial Relations Act 1979 (as amended).  By that application, he alleged that he was unfairly dismissed by the appellant from his position as workshop controller/foreman on 8 February 2002.

9         The appellant denied that there was any unfair dismissal and maintained that the respondent was advised on 8 February 2002 that the appellant no longer wanted the respondent to continue in his existing role as foreman, and, indeed, that he, then and there, was offered an alternative position in employment with the appellant, namely that of a pre-delivery technician.

10      Because the alternative position, alleged to have been offered, was not accepted by the respondent, Mr Fabbri, the appellant argued that there was no unfair dismissal.

11      There was evidence given at first instance for Mr Fabbri by Mr Alexander Findlay McNabb, Mr Richard Stephen Smith and Mr Jeffrey Laurence Paull.

12      For the appellant, the following witnesses were called, Mr Charles Triscari, Miss Clare Leanne Morrison and Mr Todd Andrew Davidson.

13      It was not in issue that the respondent applied for a position as workshop controller with the appellant on 1 March 2000 and was appointed to the position of workshop controller on 13 March 2000 for a three month probationary period by Mr Charles Triscari, the manager of the service department.

14      At the time of his application for employment, he advised Mr Triscari that he, Mr Fabbri, had previously made a workers’ compensation claim and that he had a certificate which said that he was fit for full-time work as a shop floor/controller foreman, in the appellant’s service department, but was not to undertake heavy lifting.  At the time, too, he was in a work rehabilitation plan, due to a back injury.

15      He did work for a two week trial period without pay for the respondent, and successfully completed his three month’s probation period.  His duties as workshop controller included arranging work to be done by the technicians in the workshop area, checking completed jobs and quotes and writing reports to the service advisors in the service section.  It was a supervisory position.

16      About a year after he commenced to work for the appellant, a new dealer principal, Mr David Di Virgilio, was appointed.  Mr Di Virgilio instituted a number of changes in order to make the appellant’s operations more efficient.

17      There were serious ongoing problems in the service department, and this became a major concern for Mr Di Virgilio.  Customer service feedback demonstrated that performance there was poor.  Improvements were demanded by Mr Di Virgilio.  Quality assurance benchmarks were established.  One of these was that the apprentices and the mechanics in the workshop were told that if the workshop was not kept up to certain standards of cleanliness and tidiness then written disciplinary warnings would be issued to them.

18      There were also monthly meetings held to identify problems and to discuss solutions to them.  It was Mr Fabbri’s claim that due to poor management by Mr Triscari, his job as a foreman and workshop controller was made very difficult.  He gave details of the problems and these matters (see page 47 (AB)).

19      There was an internal restructure effected in 2001 which resulted in Mr Fabbri being appointed as foreman, (instead of workshop controller), and his duties at that time included road testing cars and checking work which mechanics had undertaken and inspecting vehicles.  Mr Paull had become the workshop controller, when Mr Fabbri was appointed as foreman.  Mr Fabbri, as foreman, answered directly to Mr Triscari.

20      Mr Fabbri said in evidence that Mr Triscari said that he was happy with his performance at that time.  Mr Fabbri undertook duties as both workshop controller and foreman on an interchangeable basis during the period of his employment.  Workshop controller was a higher position than that of foreman.  There were fewer complaints after Mr Fabbri was foreman for several months, and Mr Triscari told Mr Fabbri how happy he was with his work and attitude.  This was in mid 2001, and he appointed Mr Fabbri as full-time foreman and Mr Paull as workshop controller.

21      In August 2001, a “team approach” was introduced to the workshop and separate teams in separate areas were created.  The respondent became a team leader and his team reached their productivity targets in October 2001 and received an incentive payment.  Mr Triscari and Mr Di Virgilio, he said, congratulated him at that time for being leader of the team which performed the best for that month.

22      In December 2001, even though the workshop was busy, a number of employees were on leave, including the workshop controller, Mr Paull.  This led to problems in the workshop with respect to meeting the demands of the customers, keeping up with service orders and maintaining cleanliness and tidiness, according to Mr Fabbri.

23      Whilst Mr Paull was on leave in December 2001, Mr Fabbri was appointed to act as workshop controller.  After Mr Paull returned to work, Mr Fabbri went on leave.  In the third week of January 2002, Mr Triscari granted three employees in the service department leave at the same time, which, according to Mr Fabbri, increased the existing problem in the service department, and, after returning from leave, he found the workshop disorganised, paperwork not done and records of vehicles being serviced incomplete, together with an extensive backlog of work.

24      Mr Di Virgilio asked Mr Fabbri in the week ending 8 February 2002 why the workshop was not working as it should.

25      Mr Fabbri said that he took the blame for Mr Triscari, but later told Mr Di Virgilio that the problems raised at the meeting were not caused by him, Mr Fabbri.  He had told Mr Triscari that he wanted to make Mr Di Virgilio aware of the situation.  He then approached Mr Di Virgilio and “expressed to tell him the truth”.

26      It was on 5 February 2002, probably, that he approached Mr Di Virgilio.  Mr Di Virgilio told Mr Fabbri to come and see him on Friday, 8 February 2002.

27      He went to see Mr Di Virgilio who told him that Mr Triscari did not inform him that the service department was in a total mess.  Mr Di Virgilio told him that Charlie (Mr Triscari) blamed him, Mr Fabbri, for the disaster, and “my dismissal had had everything to do with what happened”.  He gave evidence that he had received no wages for work since he was dismissed.

28      In cross-examination, he denied that Mr Triscari told him that it was not working, and that he wanted him to change positions to the pre-delivery department.  Mr Fabbri repeated that he had been sacked.  There was other cross-examination which was somewhat inconclusive and, in parts, difficult to understand both as to question and answer.

29      The next day, which would be the 6th day of February 2002, Mr Triscari confronted him with a quality assurance report saying that he, Mr Fabbri, had not road tested a vehicle.  This was quite wrong, Mr Fabbri said.  Mr Fabbri said in evidence that this evidence was being fabricated for his dismissal.  He said also that before he was dismissed some people were already saying that he would be dismissed.

30      On Friday, 8 February 2002, the respondent had a conversation with Mr Triscari, the manager of the service department, who had power to hire and terminate employees in that section.  This discussion occurred straight after his discussion with Mr Di Virgilio.

31      It was the respondent’s evidence that he was, on that day, dismissed by Mr Triscari.  Mr Triscari told him that a decision had been made by management that he was to be sacked.  Mr Fabbri’s evidence was that he “showed” his dissatisfaction to Mr Triscari, and that he told Mr Triscari that this was an unfair dismissal.  Further, he said that Mr Triscari agreed with him.  Mr Fabbri said that he was going to take them for unfair dismissal and that Mr Triscari “virtually says”, “Do what you have to do.  We will make up your pay and we will send it in the mail.”  He went on, he said, to make it clear to Mr Triscari that he was unhappy and that he had been unfairly dismissed.  Mr Triscari then went on to offer him a position as a technician on the floor, as a pre-delivery employee, “in a joking manner, knowing very well of my common knowledge of my back complaint, that I can never get a medical clearance or do any of the lifting or any physical repair work”.  Mr Fabbri said that they did not even discuss the wage applicable to the new position.  This job involved no supervising and entailed ensuring that new vehicles met all of the requirements prior to being sold to a customer.  It required shop floor work.  Mr Fabbri maintained that this work was unsuitable for him because of his back complaint and that this was something Mr Triscari knew about.

32      Mr Fabbri gave evidence that he had never received any reprimands or warnings in writing or otherwise, and, he said, that no-one complained about his performance of his work.

33      Mr Triscari in evidence said that on that day, the 8th day of February 2001, he talked to Mr Fabbri about the need for Mr Fabbri to take a new direction in the organisation and, on that basis, offered him a job in the pre-delivery area which effectively entailed the same skills as his previous job without being a supervisor.  He intended that Mr Fabbri be paid a wage equivalent to his current wage, even though that was not the normal wage of a technician who undertook this particular job.  They did not, however, discuss the wage.

34      Mr Triscari also, in evidence, said that in the workshop a lot of things needed to be changed, and that technicians were not trained enough.  He said that over the last 12 months they had been trying to improve things.  He said that it was a priority that the workshop be kept clean and that he had directed Mr Fabbri and Mr Paull accordingly.  Since he had not achieved the goal of keeping the workshop clean, in 2001, he split the workshop into two teams and had Mr Fabbri looking after six men and Mr Paull looking after six men.  He affirmed that Mr Fabbri was workshop foreman and Mr Paull was workshop controller.  He passed down responsibility to them.  He denied sacking Mr Fabbri and said that he had offered to “shift” him as he had Mr Paull, the same day.  He said that because his workshop was “falling down” that he had to do something about it.  He also said that he offered Mr Fabbri the job again after the alleged dismissal and that Mr Fabbri told him that he did not want the job and that he wanted money.

35      Mr Triscari said that on the Tuesday, 5 February 2002, he spoke to Mr Fabbri and told him that they were taking a new direction and that Mr Di Virgilio required them to get the customer service index rating up.

36      Mr Triscari also said that on Friday, 8 February 2002, he told Mr Fabbri that Mr Fabbri could not remain in his position, which was that of foreman, any longer and that he was offering to move him and put him into the pre-delivery section.  His evidence was that Mr Fabbri then said “You know I can’t work on cars, and you know about my back and you know I can’t do that job, so virtually that is unfair dismissal and you are sacking me”.  The job involved the same skills as that of foreman, but did not involve supervision, he said.  The wage was to be the same, but they did not reach that subject in their discussions.  Mr Triscari said that the pre-delivery job did not involve mechanical work and was all inspections.  What he would be doing was no different from what he would be doing as foreman, except that he would not be in control of people in the shop.  Mr Triscari said that whilst the job does not attract the same wage as the foreman or controller, he would not be reducing Mr Fabbri’s wage.  He said that Mr Paull’s wage had not been reduced when he was transferred.  He said that the intention was not to sack Mr Fabbri and so told him that they were not sacking him but shifting him in his position.

37      In cross-examination, Mr Triscari said that he did not sack Mr Fabbri.  He agreed that Mr Fabbri had a back problem.  Some problems, in the service department, were brought up at monthly meetings and some were not, he said.  He agreed that he had appointed Mr Fabbri as foreman, but could not recall his reporting back to him about problems involving jobs and customers.  He denied that he had expressed satisfaction to Mr Fabbri about the way he was doing the job.  He agreed that Mr Paull became the workshop controller and Mr Fabbri the foreman during 2001.  Mr Paull and Mr Fabbri were in charge of the workshop, he said.  He agreed that Mr Fabbri was initially employed as workshop controller and then reshuffled to foreman, that he was always either (see page 141 (AB)), and always at the same rate of pay.  Further, the bonus system was always the same and only the structure changed, not his pay.  He probably told Mr Fabbri, he said, that Mr Paull is too soft and “needs a bomb under him”.

38      In October 2001, when they reached “budget”, he said that Mr Fabbri was shifted again and was not foreman.  He agreed that in 2001 Mr Fabbri was paid bonuses.  He congratulated Mr Fabbri.  When Mr Paull was on holidays in December 2001 Mr Fabbri filled in as workshop controller.  Mr Richard Smith acted as foreman.

39      It was Mr Triscari’s decision to remove Mr Fabbri because he did not think that he was up to it (see page 151 (AB)).  He said that they ((i.e.) Mr Di Virgilio and Mr Triscari), had not blamed Mr Fabbri in the discussions on Tuesday, 5 February 2002.  He denied that Mr Fabbri said that he was going to tell Mr Di Virgilio the truth about the service department.  He said that he was unaware that Mr Di Virgilio was intending to fly to Sydney that week.  He agreed that he had brought to Mr Fabbri’s attention a quality assurance report signed by Ms Morrison.  He agreed that Mr Fabbri had never received a written warning.  He denied again that Mr Fabbri was dismissed and merely said that he was being shifted from one position to another.  No warnings were documented and no good reports were documented, he said.  He denied that anyone knew that he intended to sack Mr Fabbri and denied that he was sacked.  He denied that he told Mr Fabbri that the decision had been made by management that “we cannot have you in that position where you are”.  He did not agree that he admitted at the time that this was an unfair dismissal.  He did offer Mr Fabbri a position in pre-delivery knowing of his back complaint.  He said that Mr Fabbri rejected this proposition on the afternoon of 8 February 2002 and asked for his wages to be made up.  One other person had received written warnings in the past and was then dismissed.

40      In cross-examination, he did say that Mr Di Virgilio was not involved in the move to put the respondent into the new position of pre-delivery technician because it was part of Mr Triscari’s duties to hire and dismiss people and shift them around, and he Mr Triscari, made that decision.

41      Mr Triscari confirmed that budgets were not being met, but did confirm that in October 2001 Mr Fabbri received a bonus because his team met productivity targets for that month.

42      He also confirmed in evidence that on a number of occasions at monthly meetings issues were raised with a view to improving the service department and agreed that Mr Fabbri from time to time had raised specific problems in the service department with him.

43      Further, Mr Triscari admitted that there had been problems in the service department, that customers had been left waiting on occasion, that in January 2002 three people were on leave at the one time, that when the respondent returned from leave in January 2002 there were problems in the workshop and this led to discussions with Mr Di Virgilio about backlogs of jobs and work not being completed in time.  There was also a problem with tidiness and cleanliness in the workshop.

44      Mr Triscari also admitted in evidence that at no stage had the respondent received any disciplinary warnings or any written reprimands during his employment with the appellant and it was not Mr Triscari’s practice to offer such warnings.  He did also confirm that the appellant had a policy of issuing written warnings as part of a disciplinary process and that at least one person had been dismissed after receiving a number of written warnings. There was also a warning system in place, Mr Triscari admitted, for when an employee did not abide by the appellant’s requirements such as the requirement to keep a clean and tidy workplace.

45      Both Miss Clare Morrison and Mr Todd Davidson confirmed that subsequent to Mr Fabbri finishing work with the appellant he was again offered a job in the pre-delivery area.  There was evidence from Miss Morrison, too, that the operation of the appellant had improved since the respondent was no longer employed.

46      There was evidence from Mr McNabb, who was the parts manager employed by the appellant from 1999 to March 2002, when he resigned, that there were problems in the service area because some employees were not properly trained and that three employees were absent at the same time in January 2002.

47      Mr Richard Smith, currently employed as a mobile mechanic with the appellant, gave evidence that Mr Fabbri had a good work ethic and worked well with others, and that the service department had experienced organisation difficulties because of the service advisers making mistakes.

48      He said that all vehicles were road tested when Mr Fabbri was the workshop controller, and that from time to time overbooking occurred, which made it difficult to keep up with the work coming into the workshop.

49      He said that Mr Fabbri was safety conscious.  He also said that Mr Fabbri did not have time to train staff and that there was poor management overall.

50      He did say that in January 2002, when three people were on leave, the workshop was in a worse state than it usually was, that there were over bookings and that it was a very hectic time.  He also said that he had never known the place “to run smooth”.

51      Mr Fabbri also gave evidence that Mr Triscari brought Mr Di Virgilio to his office and blamed him “for what had happened”.  Mr Smith said that he walked past while they were talking.  He said that Mr Di Virgilio was not happy.  Mr Di Virgilio had said no internal work had been done.  Mr Smith said that he remembered Mauro ((i.e.) Mr Fabbri) saying “Well we’re too busy, we’ve got – there is no time to get this internal work done”, and Mr Fabbri was “pointing out all of the job cards and everything else that was lined up for actual customers”.  Mr Smith walked in to where they were talking, and picked up a job card.  Later on he saw Mr Fabbri rushing off into Mr Di Virgilio’s office.  He said that Mr Fabbri was not too happy because Mr Fabbri had been accused of not getting the work done.

52      Mr Smith said that he was unaware of any complaints about Mr Fabbri or any written warnings to him.  He told the Commission that from what he heard that day Charlie Triscari was a bit nervous about what was going on and the blame was being pushed onto somebody else.  Mr Smith agreed in cross-examination that there had been an improvement in the workshop under the new foreman, Mario, over the two months preceding the hearing, and this included an improvement in cleanliness.  He confirmed that there had been overbooking of work.

53      Mr Jeffrey Paull, who gave evidence, was the workshop controller for about three years but was currently employed as a technician, having ceased to be the workshop controller about the time when the respondent was dismissed.  He said that he had been in the motor trade for about 20 years.

54      He said that he had a good working relationship with Mr Fabbri when they were both employed by the appellant but that there were ups and downs.  He said that there was a regular turnover of service advisers and that the service department could have operated more efficiently.  He confirmed that when problems, issues and deficiencies were raised at regular service department meetings the issues were addressed to the whole workshop, not to Mr Fabbri specifically.  He knew that Mr Fabbri had a back condition.  He referred to Mr Fabbri being the foreman.  He also said that, for the first months of the change, the change to a team structure was successful.  Mr Paull agreed that Mr Triscari had discussions with him on many occasions about improving the service department and that they were constantly trying to improve it.  He agreed that in those discussions Mr Triscari told him that changes needed to be made.

55      He said that work cleanliness was a major issue raised at these meetings and workers were told to clean areas up.  It was the responsibility of Mr Fabbri and Mr Paull to make sure that this policy was complied with, and, as a result, some apprentices received warnings about cleaning up.

56      Mr Paull said that he complained at the meetings about the service department.

FINDINGS AT FIRST INSTANCE

57      The Commissioner at first instance made the following findings:-

a) That the test in Miles and Others t/a Undercliffe Nursing Home v FMWU 65 WAIG 385 (IAC) applied.

b) That the respondent, Mr Fabbri, had been unfairly dismissed.

c) That the major area of dispute in the evidence was whether the respondent was terminated or offered an alternative position with the appellant on 8 February 2002, and that of the two different accounts of this discussion she preferred the evidence of the respondent to that of Mr Triscari.  She said that Mr Fabbri gave forthright and unhesitating recollection of the events of the meeting on that day which was unshaken under cross-examination, but Mr Triscari was hesitant and the Commissioner believed that he had conveniently reconstructed the discussion to suit his own purposes.

d) That Mr Triscari was under pressure given the problems of the service department to effect major changes and this led to him terminating the respondent.

e) That she accepted the evidence of each witness including that of Mr Triscari in relation to all other evidence given.

f) That the respondent was employed by the appellant as a workshop controller and from time to time foreman from 13  March 2000 to 8 February 2002 on a full-time basis and that he was not involved in motor mechanic or other shop floor duties, but, in fact, supervisory duties.

g) That after Mr Di Virgilio took over as dealer principal a number of efforts were made to improve the service department’s efficiency and performance and a number of restructurings were trialled and implemented.

h) That there were monthly meetings as part of this process of which the respondent was an integral part.

i) That the respondent undertook his employment to the best of his abilities and worked conscientiously.

j) That the ability of the appellant to capitalise on efficiency measures was limited by the frequency of the changes together with frequent movements of employees in and out of the workshop and service section.  This caused difficulties.  These difficulties came to a head in January 2002 when Mr Paull had been away on leave and three senior employees were on leave at the same time.

k) This led to backlogs in work and some customer dissatisfaction which was not due to the action of Mr Fabbri and led him to being wrongly blamed.

l) That at the meeting of 8 February 2002, Mr Fabbri was told that he was terminated from his position and as an afterthought, given his protest at being dismissed, Mr Triscari offered him a position in the pre-delivery area.

m) That there was no basis for his being dismissed at this meeting and that even though the appellant had a formal disciplinary process in place no formal disciplinary proceedings were initiated against Mr Fabbri at any time whilst he was employed with the appellant.  Further, no reprimands or warnings were ever issued to him and at no stage was he made aware that his job was in jeopardy.

n) That no performance or behaviour problems were specifically put to him during his employment and that on the day he was terminated he was not afforded procedural fairness since he was given no opportunity to respond to concerns about his conduct or performance.

o) Even if that was not so, the effect of transferring Mr Fabbri to a position in the pre-delivery area amounted to a dismissal, in any event.

p) The position in the pre-delivery area was a demotion in that it involved shop floor skills and duties that he did not undertake as part of his contract of employment as a workshop controller/foreman.

q) That there was no provision in his contract of service which would enable a transfer to lesser duties take place.  On his application for employment his position was identified as workshop controller.

r) Whilst that position was interchanged with foreman duties during his employment with the appellant both positions were supervisory in nature and attracted the same rate of pay.

s) That, on the other hand, the work involved in pre-detailing, involved shop floor skills different to those of an employee in a supervisory position, and a lower rate of pay.

t) That he was being unilaterally demoted by being transferred to pre-detailing duties.

u) That having been unfairly dismissed, he took reasonable steps to mitigate his loss having made a number of approaches to obtain alternative employment.

v) That his back complaint limits the range of employment for which he is suitable and that he has had no employment since his termination on 8 February 2002.

ISSUES AND CONCLUSIONS

58      This was an appeal against a discretionary decision, as such a decision is defined in Norbis v Norbis (1986) 161 CLR 513 and Coal and Allied Operations Pty Ltd v AIRC (2000) 74 ALJR 1348 (HC).

59      It is trite to observe that it is for the appellant to establish that the exercise of the discretion at first instance miscarried, and to do so in accordance with the principles laid down in House v The King [1936] 55 CLR 499 (see also Gromark Packaging v FMWU 73 WAIG 220 (IAC)).  Unless that is established, the Full Bench has no warrant to interfere with the exercise of the discretion at first instance, and certainly no warrant to substitute the exercise of the Full Bench’s discretion for that of the Commissioner at first instance.  I refer also to the principle laid down in Devries and Another v Australian National Railways Commission and Another [1992-1993] 177 CLR 472 which is:-

“A finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding.  If the finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the judge has failed to use or has palpably misused his advantage, or has acted on evidence which was inconsistent with facts incontrovertibly established by the evidence or which was glaringly improbable.”

(See also State Rail Authority of NSW v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306 (HC)).

60      The State Rail Authority case is authority for the proposition that it is open to find that the significance attached to the appearance and demeanour of a witness or witnesses can be misplaced where it is demonstrated that there has not been a determination of the case on a consideration of the real strength of the body of evidence presented.  In Abalos v Australia Postal Commission [1988] 171 CLR 167 the principle expressed was as follows:-

“Where a trial judge has made a finding of fact contrary to the evidence of a witness but has made no reference to that evidence, an appellate court can not act on that evidence to reverse the finding unless it is satisfied that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge’s conclusion”.

61      The Earthline case (op cit), as it will be clear, modifies that principle to some extent.

62      It is however, fair to say, that what I will call the Devries principle, was approved somewhat more strongly in Rosenberg and Percival (2001) 205 CLR 434 by McHugh J at 447-449 (Gummow J agreeing).

63      That principle has often been applied by Full Benches of this Commission.

64      I now turn to the grounds of appeal.

Ground 1

65      By ground 1, it is complained that the Commissioner at first instance erred in finding that Mr Fabbri was employed as workshop controller and from time to time foreman, in the face of his own evidence that he had been demoted to workshop foreman in early 2001 and then to team foreman.  First, it is not at all clear that he was demoted to team foreman.  The evidence seems to establish that he led one team as workshop foreman and that Mr Paull led the other as controller.  Certainly, after the alleged demotion, he acted as a workshop controller, a higher position in December 2001, which was after the team system was implemented.  It is quite clear on the evidence of both Mr Triscari and Mr Fabbri that he filled the positions of workshop controller and foreman and was foreman at the time of the termination of his employment.  The description contained in the finding is accurate, but, in any event, it matters not.  It is quite clear that he was dismissed as a workshop foreman.  More importantly, however, there was no submission that the finding that he was dismissed as foreman, was erroneous, and no submission that the decision in substance would have been different, if the Commissioner had expressed herself differently.  The finding was in any event, in substance, correct.

Ground 2

66      By this ground, it is alleged that the Commissioner at first instance failed to take into account two previous demotions within the period of employment and the alleged fact that Mr Fabbri had “acquiesced to” such conditions.  It was also alleged that these were part of the same restructuring process of which his “dismissal” was part.  It is not clear to me that there were two “demotions”.  Obviously, Mr Fabbri was placed in the new position of foreman in 2001 and obviously he accepted that position.  I do not, for the reasons which I have expressed above, accept that there was any further demotion.  He still continued to act as workshop controller in Mr Paull’s absence.  What is quite clear also is that if he did “acquiesce to” any “demotion” or “demotions”, he did, on all of the evidence, not accept the offer of the position of pre-delivery officer.  There was no suggestion that his contract or contract of employment expressly or impliedly permitted a transfer and certainly not a “demotion”.

67      The following principles apply:-

a)               It is a question of fact as to whether a change in duties amounts to a termination of the contract of employment with a new contract supplanting the old contract of employment or whether it amounts to a variation of the original contract.

b)              Where an employer and employee agree to an alteration in the employee’s responsibilities which is profound, a court should be more ready to hold (unless the original contract of employment provided for the contingency), that a new contract has replaced the old contract, or at least that the old contract, as varied, contained terms objectively appropriate to the new relationship created.

(See Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 applied by Full Benches of this Commission in Kenny v Elmerside Pty Ltd t/a The Hotel Alexander 77 WAIG 2172 (FB), Pisconeri v Laurens & Munns Incorporating Munns Nominees Pty Ltd and George Laurens Pty Ltd 79 WAIG 3187 (FB), Cannon and Linfox Transport (Australia) Pty Ltd 81 WAIG 2419 (FB) and Real Estate Institute of WA Inc v FCU 73 WAIG 3316 (FB)).  (It is difficult to understand why we were not taken to any of these authorities).

68      It is quite clear, and it was not submitted, that there was any express condition which enabled the sort of “transfers” alleged to have been made, to be made.  It is quite clear, as a matter of fact, and it was open to find, that the appointment of Mr Fabbri as foreman when he had been engaged, on the evidence, as a workshop controller with different duties in a lesser supervisory role was a “demotion” and a profound alteration in his duties and responsibilities.  Thus the result was the termination of his old contract and the creation of a new one.  That was not the case when he became a team leader because he remained as workshop foreman.  There was ample evidence that he did so from Mr Triscari, Mr Paull and Mr Smith.  When he acted as workshop controller, Mr Smith became foreman.  There remained, however, only one foreman, and that was his position.

69      The offer of a position as a pre-delivery employee was an offer of a position with different duties in a non-supervisory position, even if the salary remained the same, which did not emerge from the discussion of 8th February 2002.  It was exceptional, far reaching, not within the original contemplation of the parties, and not comprehended by the contract initially made between them.  That is also borne out by the fact that the position was offered as a new position for him in lieu of his old position as foreman.  It would have given rise to a new contract replacing the old contract rather than merely a variation of the old contract (see Quinn v Jack Chia (Australia) Ltd (op cit) and the other authorities cited above).

70      He was being “shifted” to an entirely different position and his contract of employment as foreman was terminated by that decision as conveyed to him, even if he were not first expressly dismissed, as on the evidence he said that he was.

Ground 3

71      By ground 3, it is alleged that the Commissioner at first instance erred in fact and in law in failing to take into account the supervisory or managerial responsibilities within his contract of employment and his inability to accept responsibility.  Unfortunately, the submissions relating to this ground, particularly the written submissions, purport to expand this ground, without the ground being amended.

72      Mr Fabbri’s evidence was that he did attempt to resolve matters, but he had difficulties with overbooking and other matters, that he raised these problems in monthly meetings, and that he raised these matters with Mr Triscari as his manager.  Steps were taken to try to resolve problems on the evidence of Mr Paull and Mr Fabbri, by them.

73      It was open to infer that none of these problems were serious enough, if they existed, to merit a formal warning or threat of dismissal.  That he performed his work adequately was borne out by the unshaken evidence of Mr Smith, Mr Paull and Mr McNabb, and that there were problems in these areas which were not his fault was borne out by their evidence also.

74      There was no evidence that Mr Fabbri did not as foreman take the responsibility which he was required to take in his position, which, in fact, was not a management position as such.  I would require to be persuaded that the position of foreman is a “management position” in the true sense of that word.  I was not so persuaded.  There was no evidence that his work was so defective that it required warning or reprimands, and none were given.  Indeed, he was in receipt of bonuses at one time for the work he did.  It was in itself unfair that he was not given these warnings (see Margio v Fremantle Arts Centre Press 70 WAIG 2559 (FB)).

75      I know of no authoritative statement in the law that because an employer concludes that a manager is incompetent that that fact “may be to some extent prima facie evidence that he is”.  That was what was submitted, and no authority was submitted to support it.  I reject it as a proposition, particularly in the absence of authority.

76      The Commissioner at first instance found that the ability of the appellant to capitalise on the efficiency measures which were taken was limited by the frequency of changes, and made other findings open to her on the evidence which were not challenged or challenged effectively.  These were to the effect that the respondent had carried out his responsibilities in the face of difficulties not of his making (see paragraphs 49-52 of the reasons for decision at first instance, pages 37-38 (AB)).  Paragraph 52 is significant, and reads as follows:-

“I find that this situation led to backlogs in work not being completed on time, and some customer dissatisfaction.  It was not due to the actions of the applicant.  I find it was convenient for Mr Triscari to wrongly blame the applicant for these problems when he made the decision to remove the applicant from his position as Workshop Controller/Foreman.  Mr Triscari identified a number of problems with the performance of the applicant, however, no evidence was given to support his claims.”

77      For those reasons, that ground is not made out.

Ground 4

78      For reasons already partly canvassed, the offer of the position in the pre-delivery area even if genuine, (and since the Commissioner at first instance accepted Mr Fabbri’s version of events of 8 February 2002, it could not be properly found to be any more than an afterthought) was an offer of a mere checking position, with no supervisory responsibilities.  That he would no longer be the foreman, if he accepted that position, makes that quite clear.

79      The written submissions, for the appellant, in any event, contain a concession that his position as foreman was terminated.  He was therefore being offered a new and inferior position, even if he were to retain his current rate of remuneration, and even if he were physically capable of performing the duties of this position.

80      For those reasons, that ground is not made out.

Ground 5

81      By that ground, it was alleged that the Commissioner at first instance erred in not finding that he was dismissed for non-performance.  I do not understand that ground, because the clear case of the appellant, at first instance, was that he was not dismissed.  There was certainly evidence that, if it were a dismissal, it was because of inadequacy of performance, but given the evidence of Mr Fabbri, Mr McNabb, Mr Paull and Mr Smith, as well as that of Mr Triscari and Mr Davidson, it was open to find otherwise.  Indeed, if one looks at paragraph 52 of the reasons for decision at first instance (see page 38 (AB)), one can see that the Commissioner at first instance did so find and why, and that that was an area where she did not accept Mr Triscari’s evidence, even though she said as a general statement that some evidence was credible (see Abalos v Australian Postal Commission [1990] 171 CLR 167).  I will turn to that question generally, later in these reasons.

82      For those reasons, that ground is not made out.

Ground 6

83      By this ground, it was alleged that, if I might paraphrase it, because Mr Fabbri was a manager he did not require formal warnings of possible termination.  I do not understand that proposition.  He was not reprimanded, he was given no warnings, and he was dismissed “out of the blue”, and after he had tried to explain what had occurred in the service department.  He had received bonuses for good work in October 2001, and to dismiss him in that manner was palpably unfair (see Margio v Fremantle Arts Centre Press (FB) (op cit)).

Ground 7

84      I agree, given the approach taken by the appellant, that a fair dismissal might have occurred, but that would require proof of his incompetence and a process of proper warning and a period to permit him an opportunity to improve.  Such a process would take time, even if it were justified, which is not certain on the evidence to which I have referred above.  Accordingly, a finding that he might be employed for six months, on the balance of probabilities, does not seem to me to be in error.

85      See the principles in relation to this matter laid down in Gilmore and Another v Cecil Bros and Others 76 WAIG 4434 (FB) and Bogunovich v Bayside Western Australia Pty Ltd 78 WAIG 3635 (FB).

Ground 8

86      By this ground, it is alleged that the Commissioner at first instance erred in not taking into account the uncontroverted evidence that the situation in the service department improved after what is described as “the dismissal”.  In the absence of evidence that this was due solely to the efforts of the new foreman, and not to other factors, then such evidence, even if relevant, is of little weight.  Even if it were accepted, it would not be conclusive in the face of the other evidence before the Commission of the causes of the problem and the steps taken by Mr Fabbri and Mr Paull.

87      That ground fails for those reasons.

Ground 9

88      By this ground, it is alleged that the Commissioner at first instance erred in finding that Mr Fabbri had properly attempted to mitigate his loss in the face of the evidence that the appellant continued to offer him a supervisory position in the pre-delivery section which enabled him to earn the same amount as in his previous position.

89      I would first observe that for the reasons expressed above the alternative position was not a supervisory position.  It was an inferior position.  It was, as the Commissioner found, a demotion.  Second, it was, since the Commissioner at first instance preferred Mr Fabbri’s evidence, not necessarily to be paid at the same rate, even though Mr Triscari said otherwise.  Further, it was offered after his dismissal and itself constituted part of the act of unfair termination of his contract.  As well, since the Commission preferred Mr Fabbri’s version of the conversation on the 8th of February 2002, between Mr Triscari and Mr Fabbri, the offer was not a serious one, but a mere afterthought.  The mere repetition of the offer by Ms Morrison, after proceedings had been instituted in this Commission, does not afford it any more legitimacy, because of those flaws.  (See generally as to mitigation Growers Market Butchers v Backman 79 WAIG 1313 (FB).

90      For those reasons, that ground is not made out.

Ground 10

91      Nothing has been submitted, on a fair reading of the evidence, to persuade me that the Commissioner at first instance erred in accepting the evidence of Mr Fabbri with the advantages of seeing and hearing the witnesses.  The minor matter referred to in the submissions is insignificant and there was corroboration of his evidence, in material parts, by other witnesses as I have already observed.

92      For those reasons, that ground is not made out.

Ground 11

93      By that ground, it is alleged that the Commissioner at first instance, because it had found that the dismissal was unfair, erred in so doing because there was a denial of procedural fairness.  It was submitted inferentially that she failed to consider and properly give weight to the substantial reasons for the dismissal, according to the principle laid down in Shire of Esperance v Mouritz 71 WAIG 891 (IAC).  Again, this ground admits the dismissal.

94      It is quite clear, on the evidence, that the Commissioner did not accept that Mr Fabbri’s conduct justified a fair dismissal on a substantive basis.  She so found (see paragraph 52 of the reasons for decision at first instance, page 38 (AB)).  Accordingly the finding of unfair dismissal was not merely based on procedural unfairness, but substantive unfairness, and was correct.

95      That Mr Fabbri had first tried to protect Mr Triscari and then told Mr Di Virgilio that he was not at fault was consistent with the evidence that he was not at fault.  Indeed, it was not his evidence alone that he was not at fault.  That he put his side to Mr Di Virgilio immediately before he was dismissed was not to the point, given the lack of warning, counselling or reprimand.

96      I also want to make it clear that procedural fairness in a dismissal relates to the actual process of the dismissal and includes, but is not restricted to, informing the employee of the allegations or complaints against her or him, or her or his faults and giving her or him a chance to put her or his side of things.

97      Nonetheless, I also want to make it clear that I do not consider it to be only procedurally unfair if an employee is dismissed without reprimand or warning that his position is in jeopardy, or without being given the chance to remedy defects in her or his performance.

98      There was clear evidence in defining that he was dismissed in this manner (see paragraph 54-55).  There may well be exceptions to this requirement in relation to a particularly serious matter (but this is not one of them).

99      The failure to give such warnings or reprimands or an opportunity to improve a performance amounts in my opinion to substantive unfairness.  In this case the failure, which the Commissioner found, amounted to both procedural and substantive unfairness.

100   It was manifestly unfair that an employee who had received no reprimand, no chance to improve his performance, no written warning, no other warning and no indication that he was to be dismissed if he did not improve was dismissed.

101   The Commissioner found correctly and there was no error in the context of the principle of Mouritz v Shire of Esperance (op cit) for those reasons.

102   For those reasons, that ground is not made out.

Ground 12

103   The submissions made in support of the ground do not support any error in finding that the dismissal was unfair.  For all of those reasons which I have expressed above and express hereinafter, it is clear that the dismissal was unfair and the Commissioner at first instance was correct in so finding.

Ground 13

104   For the reasons already expressed, it is clear that Mr Fabbri was expressly dismissed and that, if he were not, the offer of a new contract of employment was evidence of repudiation and termination.

SOME OBSERVATIONS ON THE FINDINGS AS TO CREDIBILITY AND FACT

105   I want to make some observations about the findings of credibility by the Commissioner at first instance and the fact findings made based on them.

106   The Commissioner found that she preferred Mr Fabbri’s version of what occurred at the meeting between Mr Triscari and him on the 8th February 2001.

107   Indeed, she said that she considered that Mr Triscari conveniently reconstructed the discussion to suit his own purposes.  I am not persuaded on a fair reading that that was an erroneous finding.

108   Further, (paragraph 43 of the reasons for decision), she found as follows:-

“In my view Mr Triscari was under pressure given the problems of the Service Department to effect major changes and this led to him terminating the applicant”.

109   It is in my opinion implicit in that finding, that the Commissioner accepted the evidence of Mr Fabbri and found as a fact, that the reason for the dismissal was not that Mr Fabbri was lacking in competence.

110   It is also open to infer that from the fact that no performance or behavioural problems were put to Mr Fabbri during his employment, as the Commissioner found, to say nothing of reprimands or warnings, that he was not lacking in competence.

111   Indeed, it should be observed that Mr Fabbri had acted in a higher position as workshop controller not long before the termination of his employment.  I should add, too, that implicit in the finding that he was dismissed because Mr Triscari was under pressure, was an acceptance of the evidence of Mr Fabbri and his witnesses about his competence or at least lack of culpability in relation to the difficulties in the service department.

112   Implicitly, too, that preference for the evidence of Mr Fabbri and his witnesses meant that any other evidence contrary to that finding was not accepted.

113   These views are properly expressed in findings in paragraphs 43, 44, 49, 50, 51, 52 of the reasons for decision of the Commissioner, and also paragraphs 45-48.

114   I would add that it is made clear from the next paragraph, paragraph 44, that the Commissioner accepted the evidence of each witness, including Mr Triscari “in relation to all other evidence given”, (i.e.) in relation to all other evidence given which did not conflict with what she had accepted in the preceding paragraph, paragraph 43.

115   These findings also lead correctly to the findings made in paragraphs 53-59.  On a fair reading of all the evidence there was a substantial framework of evidence to support the findings which were made.

FINALLY

116   In my opinion, for all of those reasons the Commissioner was correct in finding as she did.  The appeal is not made out.  In particular, it is not established that the exercise of the discretion at first instance miscarried.  For all of those reasons, I would dismiss the appeal.

SENIOR COMMISSIONER A R BEECH:

117   The facts of this matter are set out in the Reasons for Decision of his Honour the President.  In my view, the appeal should be dismissed and I merely wish to add comments in relation to appeal ground 7.

118   In ground 7 the appellant alleges that the Commission at first instance erred by finding that had Mr Fabbri not been dismissed on 8 February 2002 he would have continued to be employed for a lengthy period in the face of uncontroverted evidence that the service department continued to be restructured.  In the submissions upon appeal, the attention of the Full Bench was drawn to the evidence of Ms Morrison (AB 176) and the evidence of Mr Paull.

119   In the decision at first instance the conclusion of the Commission was:

[63] I find that the applicant would have had ongoing employment with the respondent if he had not been terminated.  In my view, the applicant would have remained with the respondent for a reasonably lengthy period if he had not been unfairly terminated.

[64] Having regard to all of the circumstances of the case I conclude that the applicant should be compensated for his loss to the fullest extent possible, subject to the cap in s.23A(4) of the Act

120   The reason why the Commissioner reached that conclusion is not, with all due respect, given as clearly as might have been possible.  The task of the Commission was to establish Mr Fabbri’s loss.  One factor in determining the loss is to estimate the length of time it is likely he would have remained in employment had the dismissal not occurred.  This the Commissioner has sought to do, although the finding that Mr Fabbri would have remained with the respondent “for a reasonably lengthy period” lacks precision.  A “reasonably lengthy period” is a relative concept.  It is only by inference that I conclude that the Commission at first instance found that Mr Fabbri is likely to have been employed for a period greater than 26 weeks.  Accepting that this was so, I turn to consider the appeal against that finding.

121   Ms Morrison’s evidence at AB 176 is to the effect that there is a new foreman performing the job that both employees had carried out before, that the place is tidier and the staff seem happier.  I am not able to see, however, how Ms Morrison’s evidence on these points is of any assistance to the appellant in challenging the Commission’s finding

122   The issue is whether, had Mr Fabbri not been dismissed, it is likely that his employment would have continued for a period greater than six months.  There was no direct evidence on this issue given by either Mr Fabbri or Mr Triscari, nor any of the other witnesses.  From the point of view of the appellant, this important issue is one about which it could have given evidence.  In the absence of that evidence, the task facing the Commission at first instance was not made any easier.

123   Nevertheless, there is evidence from which the Commission at first instance could have reached the finding which she did.  There is evidence from Mr Smith that Mr Fabbri’s work ethic was “pretty good” (AB 82).  Mr Triscari’s own evidence is that it had not been his intention to dismiss Mr Fabbri, but rather to offer him another job (AB 116, 164).  Indeed, Mr Triscari’s own evidence is that he had no intention of “letting Mr Fabbri go” (AB 181) and this extended to even offering the pre‑delivery job again to Mr Fabbri after he had lodged his claim of unfair dismissal (AB 176).  All this evidence supports the conclusion that had the dismissal not occurred, it is likely Mr Fabbri would have remained employed by the appellant.

124   I accept there is evidence from Mr Triscari regarding why he made the decision to remove Mr Fabbri (AB 151).  Nevertheless, this does not appear to indicate he would have dismissed Mr Fabbri.  Rather, Mr Fabbri would have been moved.  Mr Fabbri had been employed for two years, there had been no formal or other warnings given to him about his work performance and Mr Triscari’s own evidence is that he is not in the habit of sacking people (AB 157).  In relation to another employee who he had dismissed after five warnings, Mr Triscari’s evidence suggested that he regarded that situation as either exceptional or at least distinct from the circumstances of Mr Fabbri. 

125   In the light of that evidence, Ms Morrison’s evidence that some changes continued to occur in the workshop, or even that there had been some improvement since Mr Fabbri left, does not lead to the conclusion that therefore it is more likely than not Mr Fabbri would not have remained with the respondent for a reasonable lengthy period.  Although it was submitted on appeal that Mr Fabbri may have been incapable of having an ongoing team relationship as required in such middle management positions, it is not clear that that submission is supported by the evidence before the Commission at first instance.  Had the appellant given evidence on this point before the Commission at first instance it may have resulted in the Commission reaching a different conclusion.  It did not do so and I am not satisfied that the Commission at first instance misused the advantage she had in assessing the evidence having seen the witnesses first hand.  I consider that the conclusion was she reached one that was reasonably open to her on all of the evidence and the ground of appeal is not made out.

COMISSIONER S WOOD:

126   I have had the benefit of reading the Reasons for Decision of His Honour, the President.  I agree and have nothing to add.

THE PRESIDENT:

127   For those reasons the Full Bench dismissed the appeal.

 Order accordingly