2011 WAIRC 00402

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES ANNETTE ONUOHA
APPLICANT
-V-
PEP COMMUNITY SERVICES INC.
RESPONDENT
CORAM COMMISSIONER J L HARRISON
HEARD WEDNESDAY, 13 OCTOBER 2010, THURSDAY, 14 OCTOBER 2010, TUESDAY, 23 NOVEMBER 2010, THURSDAY, 10 FEBRUARY 2011, FRIDAY, 4 MARCH 2011
DELIVERED FRIDAY, 10 JUNE 2011
FILE NO. B 32 OF 2010
CITATION NO. 2011 WAIRC 00402

Catchwords Contractual benefits claim - Entitlements under contract of employment - Claim for pay in lieu of notice and performance bonus - Applicant terminated during notice period - Claim of misconduct against applicant - Claim of misconduct unsubstantiated - Application upheld in part - Order issued for payment in lieu of notice - Application otherwise dismissed - Industrial Relations Act 1979 (WA) s 7, s 29(1)(b)(ii)
Result Upheld in part

Representation
APPLICANT MR P KING (AS AGENT)

RESPONDENT MR G ATKINS (OF COUNSEL)


Reasons for Decision

1 On 4 March 2010 Annette Onuoha (“the applicant”) lodged an application pursuant to s 29(1)(b)(ii) of the Industrial Relations Act 1979 (“the Act”) seeking benefits which she claims are due to her under her contract of employment with PEP Community Services Inc (“the respondent”).
2 The applicant is seeking the following:
· Two weeks’ pay in lieu of a notice period in the amount of $3,076.48; and
· $7,500 by way of a performance bonus.
Background
3 The applicant commenced employment with the respondent as its Divisional Manager Employment Services on 27 July 2009 and she ceased employment with the respondent on or about 19 February 2010. The applicant was paid a salary of $80,000 per year and her employment was governed by a written contract of employment dated 7 July 2009 and not by an award or registered agreement. The applicant was not formally assessed at the end of her probationary period but the respondent concedes that her probation period ceased on or about 27 October 2009. The applicant worked from home from 13 October 2009 until early December 2009 after sustaining injuries in a vehicle accident. The applicant tendered her resignation by giving the required four weeks’ notice to Mr Kieran on 25 January 2010 and her last day of work was to be 19 February 2010 and on 4 February 2010 during a discussion between Mr Kieran and the applicant Mr Kieran informed the applicant that she was not required to attend the workplace. The applicant managed the respondent’s Disability Employment Network (“DEN”) contract. By email sent on 18 February 2010 at 5.50 pm Mr Kieran notified the applicant that he had summarily terminated her after making inquiries into claims for payment made by the respondent to the Department of Education, Employment and Workplace Relations (“DEEWR”) under the respondent’s then DEN contract.
Applicant’s evidence
4 The applicant stated Ms Jennifer Ophel interviewed her for her position with the respondent and as the respondent wanted her to commence work as quickly as possible she missed out on a redundancy payment from her previous employer.
5 The applicant stated that under the terms of her written contract of employment she was to be paid a bonus of $7,500 net based on improvements in her team’s performance, which included 13 employees working under the DEN contract and two employees who worked on the Jobsmart contract. The applicant gave evidence that prior to commencing employment with the respondent Ms Ophel told her that one of the indicators of an improved team performance was an improvement in the respondent’s star rating in relation to the DEN contract from a four and a half star provider rating to a five star rating by December 2009.
6 The applicant stated that under the DEN contract with DEEWR the respondent is an employment service and support agency which assists disabled people to find work and then provides them with support after they commence employment. The applicant gave evidence that under the respondent’s Jobsmart contract job seekers who came through Centrelink were given assistance to obtain employment and post placement support. The applicant stated that payments were made to the respondent under the Jobsmart contract based on the length of time a client remained employed. The applicant stated that this contract ceased on 30 December 2009 and from 30 June 2009 the respondent had no new clients under this contract and the respondent provided existing clients with post placement support to the end of December 2009.
7 The applicant stated that after she commenced employment both Ms Ophel and the then respondent’s Acting Chief Executive Officer (“CEO”) Ms Lisa Potter again told her that the star rating in relation to the DEN contract was an indicator of improved team performance and that other indicators were to help close down the Jobsmart program, to assist staff in whatever support they needed to be able to lodge claims as quickly as possible and to have those clients exiting the program re-engaged with a new job services provider. Another indicator required her to rebuild the respondent’s credibility with DEEWR as the respondent had been experiencing staffing and financial difficulties.
8 The applicant gave evidence that when she commenced employment with the respondent it was in turmoil. There were issues with the respondent’s CEO, the respondent was experiencing financial instability, there was doubt about the respondent’s ongoing future and a number of the respondent’s systems were broken and required fixing so that the respondent could function and properly undertake its role. The applicant stated that to rebuild her team she ensured that employees were properly trained, new staff were employed, she improved staff morale and productivity and she updated the respondent’s policies, systems and procedures.
9 The applicant gave evidence that as there were many outstanding claims for services already completed by the respondent at the commencement of her employment, which had not been paid, she had to deal with this issue. The applicant said that the respondent was paid at four weeks, 13 weeks, 26 weeks and 38 weeks for clients who had remained employed in jobs for these periods but no claims for payment had been made by the respondent for these services and as there was a set timeframe within which to make these claims the applicant had to ensure that the backlog of monies due to the respondent were made and she instituted new processes to ensure that a backlog of this nature did not re-occur.
10 The applicant stated that in October 2009 Ms Potter resigned from the Acting CEO position and this role was undertaken by the Chairman of the Board Mr Ian Haupt until Mr Philip Kieran commenced as the respondent’s CEO in January 2010. The applicant gave evidence that in December 2009 she spoke to Mr Haupt about an issue related to her car and the payment of her performance bonus and she was told that these were operational matters which she needed to discuss with Mr Kieran when he commenced as CEO. The applicant gave evidence that she spoke to Mr Kieran in January 2010 during the first week of his employment about these two issues and the issue concerning the car was resolved and he advised her that all other operational issues would be dealt with at a later date given this was his first week of work with the respondent.
11 The applicant stated that after being involved in a car accident she was on sick leave from 13 October 2009 to 1 December 2009 and during this period she could not dress to attend work so she worked from home managing her team and two weeks after her accident she attended the office approximately once a week to meet with her team. The applicant stated that during this period she remained in contact with her team and her team manager by telephone and email, she rewrote the respondent’s policies, systems and procedures and she worked on a new DEEWR contract. The applicant gave evidence that during this period her team continued to perform well.
12 The applicant stated that from 1 July 2009 to the end of December 2009 the respondent’s star rating improved from four and a half to five stars (see Exhibit A2). The applicant maintained that this was related to an improved team performance as the star ratings were based on service delivery being in accord with the requirements such as placing people into employment, providing support, correct filling out of forms, additional employment outcome fees being claimed and exiting clients according to DEEWR requirements. The applicant also said that in order to improve the respondent’s star rating she made forms easier to fill out so future mistakes were not made by her team.
13 The applicant resigned on 25 January 2010 for a number of reasons. There was low staff morale and there was a lack of leadership and support from senior management as a number of staff had recently been made redundant including the Chief Financial Officer (“CFO”), the Human Resources Manager and the Psychological Services Manager. There was also a staff member who did not work in her area bullying and harassing several of her staff and the applicant claimed that even though she raised this issue with Mr Haupt he did not deal with it. The applicant stated that when Mr Kieran commenced employment with the respondent she raised several issues with him but she did not feel supported by him and she then made the decision to resign. The applicant stated that prior to doing so she spoke to Mr Kieran about the staff member who had been harassing her staff but he did not commit to dealing with this issue. The applicant stated on the day she resigned Mr Kieran asked her not to do so and he proposed to allocate the staff member who had been bullying and harassing her staff to work in her team for her to manage and the applicant responded by saying that Mr Kieran should deal with this issue as he was her direct line manager.
14 The applicant stated that after she resigned by giving four weeks’ notice on 25 January 2010, which she intended to work, there were tensions within the office and this led to her having a meeting with Mr Kieran on 3 February 2010 whereby he asked her not to work the remainder of her notice period. The applicant stated that she asked for confirmation that she would be paid for the remainder of her notice period and Mr Kieran did so on 4 February 2010 and the last day she worked with the respondent was 5 February 2010 (Exhibit A3). The applicant stated that during her notice period she helped Mr Kieran understand the respondent’s documents and processes with respect to transitioning from the old DEEWR contract to a new contract.
15 The applicant stated that on 16 February 2010 she emailed Mr Kieran about being paid her final salary and the bonus due to her and on 17 February 2010 she received a letter from Mr Kieran dated 16 February 2010 referring to inconsistencies in some of the respondent’s claims for payment to DEEWR and he advised her that as a result her pay was being withheld. The applicant stated that because of the vagueness of the allegations Mr Kieran had raised with her she could not provide any information by way of response and she responded with a letter of demand to Mr Kieran. The applicant also made several telephone calls to Mr Kieran to arrange a meeting with him to discuss a number of issues however he was unavailable to meet with her. On 18 February 2010 the applicant received an email from Mr Kieran stating that claims for payment made on behalf of the respondent by the applicant to DEEWR in January 2010 were made based on false evidence and he considered this behaviour to be “misconduct affecting your immediate release from employment with” the respondent. Mr Kieran also stated that apart from paying the applicant’s annual leave and paying her for 3, 4 and 5 February 2010 no further payments would be made to her including paying her a bonus. The applicant stated that she emailed Mr Kieran on 18 and 19 February 2010 seeking further information and a meeting with him but he did not respond. The applicant stated that on 3 March 2010 she sent a second letter of demand to Mr Kieran which she personally delivered to the respondent’s office but Mr Kieran did not respond to her requests and the applicant stated that at the time she was still unaware of the details about her alleged misconduct. The applicant said that a letter dated 25 February 2010 sent to her by Mr Kieran contained some details about the allegations against her and it was received by her on or about 5 March 2010 (Exhibit A7). The applicant denied any misconduct with respect to the allegations contained in this letter. The applicant was unaware which claims had been processed under her name, which clients were the subject of these claims and she was unaware of the types of claims that had been made as this information was not included in the letter. The applicant stated that the note from the Gemma system, which was the respondent’s records management system attached to Mr Kieran’s letter, was only part of a client’s contact history and she stated that anyone can access the computer to write a note in the Gemma system. Even if Ms Monica Wang’s access to the computer system had been cancelled by the time the entry was made another person could have made this note and used her name. The applicant denied that she ever gave instructions to any employee to put inaccurate information onto the respondent’s computer system and the applicant stated that she expressly told people in her team to update the Gemma notes, see clients and have them sign their timesheets and to update their interactions with clients. The applicant also said that no payment could be claimed from DEEWR unless a timesheet was filled out and signed off by the client confirming the interactions which had taken place with clients. The applicant stated that when one of her employees left the organisation she would normally sign the cessation of employment check list and the applicant maintained that the check list undertaken for Ms Wang was not signed by her and was inaccurate.
16 Under cross-examination the applicant confirmed that she was told in early October 2009 by the then Acting CEO Ms Potter that her permanent status was confirmed and the applicant confirmed that she reported to the CEO. The applicant stated that her performance was never reviewed as part of a formal process and she did not have a meeting with Mr Kieran to discuss her performance. The applicant also agreed that her team’s performance was never formally assessed and discussed and she agreed that her remuneration was to be reviewed at the CEO’s discretion but she stated that her performance bonus was not in this category.
17 The applicant stated that when she was on sick leave she went in to the respondent’s office approximately one day a week. The applicant denied that she only fulfilled part of her role when she was on sick leave and she stated that prior to and after being on sick leave she recruited new staff. The applicant stated that during this period she had a good team manager who managed the daily operations and she had daily contact with her. The applicant gave evidence that she was involved in transitioning the respondent from the DEN contract to the Disability Employment Services contract. The applicant confirmed that DEEWR undertook a one-day monitoring visit on 8 December 2009. The applicant stated that the respondent’s five star rating referred to in the letter to Mr Haupt from Ms Maria McCabe, the Accounts Manager at DEEWR, dated 24 December 2009 was based on ratings which came out every six months and refers to the June 2009 to December 2009 rating period and the applicant disagreed that the respondent’s start rating as assessed by DEEWR as at 31 December 2009 for ‘capped sites’ was four and a half stars. The applicant agreed that an improvement in her performance was in part linked to improved star ratings and she stated that she was required to improve the respondent’s star ratings from four and a half to five and maintain that rating.
18 The applicant understood that DEEWR would not award any new business to the respondent unless the respondent’s leadership and financial issues had stabilised. The applicant confirmed that during her employment with the respondent there were staffing issues and this included within her team and she stated that throughout her employment with the respondent there was instability and turmoil. The applicant stated that during her employment with the respondent it did not have a permanent CEO, staff were unhappy, systems had broken down and there was low staff morale and the main reason for resigning was lack of support.
19 The applicant stated that prior to making claims to DEEWR she verified relevant data after reading the Gemma notes and looking at time sheets and she caught up on the backlog of these claims. The applicant agreed that another employee also undertook this role.
20 The applicant stated that she worked with Mr Kieran from the middle of January 2010 to 5 February 2010 and the applicant agreed that Ms Jody Cabales, Ms Christina Bunts and Ms Sarah Griffiths reported to her.
21 The applicant denied that she ever recorded false or unconfirmed information into the respondent’s Gemma system or DEEWR’s system in order to substantiate a claim for payment nor did she ever instruct any staff member to do this and she stated that staff cannot enter the DEEWR system to make a claim for payment. The applicant maintained that she never entered a claim for payment from DEEWR to which the respondent was not entitled.
22 Under re-examination the applicant claimed that when she resigned nobody was available to undertake her performance review and she maintained that at all times she adhered to the requirements under the terms of her contract of employment as well as the respondent’s code of conduct.
23 Ms Ophel was employed by the respondent as its Human Resource Manager between October 2008 and 29 October 2009 when she was made redundant. Ms Ophel is currently a business consultant with Talent2 and she has had 17 years experience working in human resource management. In her role with the respondent Ms Ophel was involved in the selection of staff, including the applicant and she interviewed the applicant on her own as the then CEO was unavailable. Ms Ophel stated that the applicant’s contract of employment was generated from a template of contracts used for the respondent’s managers and the applicant’s contract included details relevant to her position. Ms Ophel stated that the $7,500 bonus included in the applicant’s contract was to be paid to the applicant within a period of 12 months from the date she commenced employment with the respondent and there was no set date for this to occur. Ms Ophel stated that the criteria for being paid a bonus differed for each manager. Ms Ophel stated that the process for determining whether or not an employee satisfied the criteria for receiving a bonus was that a discussion would take place between the CFO and the CEO and Ms Ophel would then enact their decision.
24 Ms Ophel stated that at the time the applicant was employed by the respondent its DEN rating was less than five stars and staff were anxious and in turmoil. Ms Ophel stated that staff morale was low and staff were devastated when the CEO was asked to resign and a number of other staff also left at the time. As a result other employees floundered and some accessed the respondent’s Employment Assistance Program. As the respondent wanted this turned around they offered the applicant an incentive bonus and linked this to improvements in her team’s performance. Ms Ophel stated that if this eventuated the bonus would be paid to the applicant. Ms Ophel stated that the applicant was appointed by the respondent because it wanted a person who was experienced and open and welcoming and who could assist in building staff morale. Ms Ophel stated that when the applicant was on sick leave she was aware that she logged into the respondent’s computer system from home and she attended the respondent’s office from time to time.
25 Ms Ophel confirmed that when Ms Potter left the respondent on 13 October 2009 Mr Haupt took over her duties. Ms Ophel stated that whilst the applicant was employed by the respondent staff were more positive, their attitude had turned around, staff training plans had been put in place with the applicant completing some of this training, team building had occurred and the applicant did extensive work on a new DEN contract.
26 Under cross-examination Ms Ophel stated that the criteria or expectations on the applicant with respect to paying her a bonus would have been established by the CEO.
27 Ms Ophel stated that at a managers meeting held at the end of May or beginning of June 2009 she was told that the respondent’s star rating was low and had dropped and she understood that the DEN contract rating was four and a half stars and Jobsmart was three and a half stars. Ms Ophel confirmed that she was paid a bonus at the end of June 2009 and she stated that it was not necessarily the case that a bonus would be paid at the end of the financial year. Ms Ophel stated that regular meetings were held where an employee’s performance was discussed but the payment of a bonus was determined by the CEO and the CFO at a specific meeting. Ms Ophel stated that the star rating was only a small component of assessing the applicant’s performance. Ms Ophel stated that boosting team morale was also important, her team performing to budget, changing processes to ensure that claims were made, client satisfaction and increasing the number of clients in employment was also relevant. Ms Ophel stated that by the end of October 2009 the morale of the applicant’s staff had improved markedly.
28 Under re-examination Ms Ophel stated that she was paid a bonus after working for the respondent for eight months and the payment of this bonus was based on key performance indicators of her own performance and she was not given any specific reason as to why she was paid her bonus.
Respondent’s evidence
29 Mr Kieran commenced as the respondent’s CEO on 11 January 2010. Mr Kieran confirmed that the respondent is a not-for-profit organisation and a public benevolent institution with offices in Joondalup and Victoria Park and it offers community support services in Kalgoorlie and Coolgardie. Mr Kieran stated that the respondent is also a registered training organisation.
30 Mr Kieran stated that the respondent is funded by the Department of Family and Community Services, DEEWR and the Department of Training and Workforce Development. Under the respondent’s DEEWR contract it assists job seekers with disabilities and then claims payment from DEEWR for work undertaken.
31 Mr Kieran stated that when he commenced employment with the respondent the management team was fractured and there were personality conflicts between members of management, management and employees and between employees. Mr Kieran said this was understandable given the unstable leadership within the organisation.
32 Mr Kieran stated that the applicant reported to him and she managed a team of approximately eight to ten employees.
33 Mr Kieran’s initial contact with the applicant’s team was through the applicant. Mr Kieran described the applicant’s team as lacking in cohesion, philosophical differences existed amongst team members about contract delivery and a number of team members were not fulfilling their duties, for example clients were not being placed into employment during January 2010. Mr Kieran stated that he also reviewed statistics for the placements between October 2009 and December 2009 and he stated that less than three people per month were being placed into employment in October, November and December 2009. Mr Kieran stated that from February 2010 approximately 10 people were placed in jobs each month.
34 Mr Kieran stated that he had been employed by the respondent for approximately two weeks when the applicant resigned. Mr Kieran stated that after the applicant left he was approached by staff members who were concerned about the respondent not fulfilling its contractual obligations and after a number of allegations were raised about the applicant by Ms Bunts, Ms Cabales and Ms Griffiths he commenced an investigation. Mr Kieran maintained that employees from the applicant’s team alleged that claims for payment were being made by the applicant in January 2010 without supporting evidence and on some occasions there was no evidence that work had been done and Gemma notes or file notes were not on the relevant files. Ms Cabales told Mr Kieran that she had been instructed by the applicant to enter information onto the respondent’s system under Ms Wang’s name and she had complained to Mr Kieran because she did not want to get into trouble. After Mr Kieran undertook further investigations he became concerned that other employees may have been asked to enter data involving false claims so he gave staff a questionnaire asking them whether or not they had been asked to falsely enter information into the respondent’s system. Mr Kieran gave evidence that one other employee responded in the affirmative.
35 Mr Kieran stated that he could not recall if he spoke to Ms Cabales prior to 18 February 2010. Mr Kieran also did not recall receiving any phone messages from the applicant after she ceased working for the respondent nor could he recall her requesting a meeting with him about inconsistencies made in claims lodged in January 2010.
36 Mr Kieran stated that he reviewed all of the claims made to DEEWR in January 2010 and he discovered that based on the history of some clients the respondent was not entitled to claim payment for some clients. In particular he claimed that three sequential entries made by Ms Wang were suspicious as the last entry was made after Ms Wang’s final day of employment and this put into doubt the series of claims made in January 2010 in relation to this client. As a result he contacted DEEWR and returned monies to DEEWR that the respondent had claimed for this client.
37 Mr Kieran confirmed that he was given a copy of an email on 18 February 2010 which was sent by Ms Cabales to Ms Griffiths. This email confirmed Mr Kieran’s discussion with Ms Cabales and Ms Griffiths around that time when he was told that the applicant had told Ms Cabales to put the information onto the respondent’s Gemma system under Ms Wang’s name. This email reads as follows (formal parts omitted):
“16/12/2009 JSID: 4246470008
Went to Rick Hart’s (sic) completed a site visit with client.
Client working 30+ hours per week
Client working but looking for alternate employment with assistance from EC – Jody.
Employer is happy with clients (sic) work.
Travel included
This note in Gemma was written by me, not Monica. Annette asked me to do this so we could make a claim for [client’s name]. I was trying at the time to contact [client’s name] to exit him off the program and could not contact him at all. My reason for doing this was I felt pressured by Annette into doing this and I was still in my probation period and did not want to lose my job.
Monica had nothing to do with [client name] what-on-ever (sic) and she asked me to put it under Monica, as she was or (sic) post placement consultant.”
(Exhibit R10).
38 Mr Kieran stated that details about Ms Cabales’ complaint were not given to the applicant in the letter he sent her dated 25 February 2010 because Ms Cabales did not want this information to be given to the applicant.
39 As a result of receiving feedback from Ms Cabales that she was instructed by the applicant to put false information onto the Gemma system Mr Kieran stated that he formed the view that the applicant had misconducted herself and he advised her that she was terminated as at 18 February 2010 and he told her that no additional payments by way of notice or a bonus would be made to her. Mr Kieran stated that it was his view that the applicant had breached her contract by making false entries into the respondent’s accounts and records.
40 Mr Kieran stated that he sought legal advice about the respondent’s contract with DEEWR as he was new to the respondent and the industry and he was worried about the respondent’s standing with DEEWR given that claims for payment were being made to which the respondent was not entitled. DEEWR advised him to identify the claims the respondent was not entitled to, which he did, and this amount was deducted from future payments to the respondent and Mr Kieran stated that if the respondent did not volunteer that it had falsely claimed monies from DEEWR then the respondent’s contract with DEEWR could be terminated.
41 Mr Kieran stated that he had discussions with the applicant on 4 February 2010 about not remaining at work because a number of staff had raised concerns with him about her behaviour, her inconsistent approach and her temper in the period after she resigned on 25 January 2010. Mr Kieran discussed these issues with the applicant at the time and said whilst he was not making any judgement about what had been raised with him he preferred if she did not work out her notice period and he confirmed that he told the applicant that she was to be paid for the remainder of her notice period.
42 Mr Kieran stated that the issue of the payment of a bonus to the applicant was first raised with him by the applicant on 16 February 2010. Mr Kieran stated that the respondent normally pays bonuses to employees at the end or beginning of the financial year as a gross amount. Mr Kieran stated that he did not believe the applicant was entitled to be paid a bonus because she had been employed for only a short period of time and her team did not appear to be performing well. Mr Kieran could not recall having a conversation with the applicant prior to her tendering her resignation about when he would conduct a performance review in relation to the bonus payment but he stated that the applicant may have mentioned the bonus clause of her contract in his first week of employment. Mr Kieran stated that he may have looked at reviewing the payment of the bonus to the applicant at the end of the financial year.
43 Mr Kieran stated that star ratings are given to the respondent every six months and the respondent is given feedback six to eight weeks after the end of the period about the level of star rating the respondent is to receive. Mr Kieran gave evidence that it he understood that the letter from Ms McCabe dated 24 December 2009 refers to the respondent’s star rating as at June 2009 (Exhibit A2). Mr Kieran stated that from the documentation he has reviewed and an email received from Ms McCabe with an attached report for the respondent’s star ratings for the period ending 31 December 2009 it is his view that the respondent’s ‘capped stream’ star rating decreased and the ‘uncapped stream’ was wavering between four and a half and five stars. Mr Kieran gave evidence that DEN monitoring visits, such as the one undertaken by DEEWR on 8 December 2009 is an opportunity for the contract manager to attend the site of service delivery to confirm that it complies with disability standards and he believes there is also an administrative compliance component to the visit where the contract manager goes through some client files to ensure that various details are there and it is a contractual compliance audit. Mr Kieran stated that he understands that monitoring visits are not used in preparing the DEN star rating reports as these are calculated by a computer from an analysis of information the respondent has added to DEEWR’s computer system and this does not involve contractual compliance matters which require a monitoring visit. Mr Kieran understands that the star rating system and the monitoring visit are not connected.
44 Under cross-examination Mr Kieran stated that when he commenced employment with the respondent its management team and the applicant’s team was fractured and employees were not getting along with each other and he confirmed that the applicant raised an issue of an employee who was bullying and harassing staff members in her team but he denied that he wanted to place this person in the applicant’s team.
45 Mr Kieran stated that since giving his evidence in chief he had reviewed the number of placements of clients into jobs and he stated that in September 2009 two employees were placed into employment, in October 2009 there were seven, in November 2009 there were none, in December 2009 there were three and none were placed in January 2010. Mr Kieran agreed that January 2010 was a transition period to a new contract and training was being undertaken by employees.
46 Mr Kieran agreed that job placements have an effect on the respondent’s star rating.
47 When Mr Kieran was asked why Ms Wang’s name appeared on the Gemma note if her name had been delisted on the respondent’s computer system he stated that even though her access to the system had been removed it did not mean that her name had been removed from the list of employees who could use the Gemma note system. Mr Kieran stated that he had concluded that the applicant had put in the information under Ms Wang’s name on the basis of information he received from Ms Cabales that she had been instructed to put false information onto the respondent’s system. Mr Kieran confirmed that when he asked Ms Wang about these entries she stated that she “didn’t know anything about them” and Mr Kieran confirmed that under the Gemma system it was possible for the date an entry is made to be changed (T133).
48 Mr Kieran stated that he gave the applicant an opportunity to discuss the inconsistencies found in the Gemma system after giving her additional information on 25 February 2010. Mr Kieran then stated that he made a decision that the applicant had misconducted herself as at 18 February 2010 based on the information he had at the time and he formed this view after he had a full understanding of what Ms Cabales had told him and from what he had heard from other people and he disagreed that he targeted the applicant in relation to this issue. Mr Kieran stated that when he received additional information on 18 February 2010 from Ms Cabales he decided that the applicant had misconducted herself and he maintained that he endeavoured to set up a discussion with the applicant about the respondent’s concerns prior to terminating her but he was unsuccessful. Mr Kieran stated that he reached the conclusion that the applicant had misconducted herself because she had been dishonest with respect to putting notes about clients in the Gemma system in order to make claims for payment for the respondent and for also instructing Ms Cabales to falsely enter notes onto the respondent’s computer system.
49 Mr Kieran confirmed that he contacted DEEWR about this issue both by email and telephone on 18 February 2010 and Mr Kieran strongly refuted the applicant’s suggestion that he was giving false evidence with respect to his actions in this regard. Mr Kieran confirmed that the additional information sent to the applicant about her termination on or about 25 February 2010 was at the applicant’s request.
50 Mr Kieran stated that he was given a copy of the applicant’s letter of demand by her on the morning of 18 February 2010 but he did not have any discussions at the time with the applicant about his concerns and he agreed that later that day he sent a letter to the applicant terminating her. Mr Kieran stated that the applicant was not given a payment in lieu of notice for the period 5 February 2010 to 19 February 2010 because he believed that this was an appropriate decision and this was his judgement at the time.
51 Mr Kieran stated that there was a backlog of claims for payment when he commenced employment with the respondent and he was aware that the respondent’s claims officer had resigned. Mr Kieran was unaware if clients had more than one Employee Consultant.
52 Under re-examination Mr Kieran confirmed that on 18 February 2010 he sent an email and later a letter to DEEWR and he had a phone conversation with DEEWR officers about the claims made by the applicant which he claimed were false (Exhibit R7). Mr Kieran confirmed that information he sent to the applicant on 25 February 2010 related to two job seekers and whilst there are only three entries for one job seeker five claims for payment resulted from that. Mr Kieran stated that he understood the applicant made the entry dated 23 December 2009 under Ms Wang’s name as these claims for payment were made under the applicant’s user identification in DEEWR’s computer system.
53 Ms Cabales has been employed as an Employment Consultant with the respondent since November 2009 and she has worked as an Employment Consultant for approximately six years. Ms Cabales reported to the applicant and she worked as part of the “Choice team” under the DEN contract. In this role she had a case load of 40 to 50 clients with disabilities and she mentored them until they were ready for employment and once in employment she gave them ongoing support through fortnightly contacts. The respondent was paid if it met specific outcomes such as placing a client into work and retaining them in employment both at 13 weeks and 26 weeks. Assistance fees were also paid to the respondent and Ms Cabales stated that up to March 2010 the respondent used the Gemma computer system to log client contacts and to update personal and employer details. As part of her role she made a record of her contact with clients and the time spent dealing with clients and this formed the basis for payment from DEEWR.
54 Ms Cabales stated that when she commenced employment with the respondent the working environment was chaotic, nobody knew what they were doing and she was employed at the same time as another employee who was not trained and initially she did not have a user name to log on to the respondent’s computer to make appointments. Even though Ms Cabales had worked in the area previously she had difficulty undertaking her work and she stated that during the initial period of her employment with the respondent the applicant was sometimes not at work because of an injury and she liaised with staff via email. Ms Cabales maintained that employees in her section acted individually and not as a team and employees complained about the lack of assistance from management. As the respondent did not have a CEO this resulted in limited guidance to staff and Ms Cabales stated that this instability continued up to the end of December 2009. Ms Cabales stated that after Christmas there was a big rush to do things and a number of claims were lodged throughout January 2010 and as a result she had to put evidence of her contact with clients into the Gemma system for claims to be made and there was a lot of work to catch up on in the first half of January 2010.
55 Ms Cabales stated that team morale and the work environment did not improve up until to when the applicant left the respondent. Ms Cabales maintained that no assistance or training was given directly to her by the applicant and employees used their own initiative and helped each other, job placements were low and outcomes were not being achieved and in her case she was not able to place a client into work until January 2010.
56 Ms Cabales understood that Ms Wang was not undertaking an Employment Consultant role under the DEN contract and she understood her main focus was as a post placement consultant under the Jobsmart contract which was soon coming to an end. Ms Cabales stated that she shared one client with Ms Wang.
57 Ms Cabales commented on a staff client contact history for the period 1 November 2009 to 16 February 2010 (Exhibit R8). Ms Cabales stated that this document was a summary of Ms Wang’s entries with respect to a number of job seekers. Ms Cabales stated that she put one of the entries into this document under Ms Wang’s name by selecting her name from the list in the Gemma system when compiling this note. Ms Cabales stated that the job seeker she put the entry in for was one of her clients and that on the date of the entry dated 16 December 2009, no site visit was completed with the client on that date and Ms Cabales stated that this client was her client and she was assisting him at the end of November 2009 to find alternative employment. Ms Cabales maintained that the information on the document was made up to make a claim to DEEWR for payment and Ms Cabales stated that she put this entry into Ms Wang’s record because in early to mid January 2010 she was instructed by the applicant to input this claim under Ms Wang’s name as Ms Wang was the post placement officer. Ms Cabales stated that she did not want to put it under her own name as she had no contact with the client at that time. Ms Cabales said when she put this information under Ms Wang’s name it was a false entry and she said that she only did this because she was told to do so by the applicant so that a claim could be made and she did so under duress. Ms Cabales told the applicant at the time that she had not seen the client for a month and he had requested to exit the respondent but the applicant told her to enter the note for evidence to make a claim. Ms Cabales reiterated that the visit to the employer on the date claimed never occurred. Ms Cabales stated that she felt pressured by the applicant to put in the entry and she felt insecure in her position as she was still on probation. Ms Cabales described the applicant as domineering with an overpowering and strong personality and she stated that she felt that if she did not put the entry in she would be sacked.
58 Ms Cabales stated that she generated a client contact history report for the period 2 November 2009 to 28 February 2010 for the job seeker she had input a false entry into the Gemma system for on 16 December 2009 which shows that the entry was put in under Ms Wang’s name (Exhibit R9). Ms Cabales stated that she sent an email to her manager Ms Griffiths on 18 February 2010 about this note in the Gemma system because Ms Griffiths was reviewing claims at the time and she was feeling uneasy about putting in false information under Ms Wang’s name. Ms Cabales stated that just prior to sending this email she saw Ms Griffiths and told her what she had done and Ms Griffiths told her to put this in writing and Ms Cabales said she raised this matter with Ms Griffiths as she was concerned about getting into trouble with the respondent and DEEWR. After sending an email to Ms Griffiths about this issue she had a meeting with her and Mr Kieran around 18 February 2010 and Ms Cabales initially told Mr Kieran that she did not want to take the matter further however, once this matter was sorted out with DEEWR she agreed to allow her involvement to become public. Ms Cabales subsequently completed a disclosure of false declaration form dated 24 February 2010 confirming that she was asked by the applicant to enter false information onto the Gemma system.
59 Under cross-examination Ms Cabales agreed that the applicant encouraged her to do a traineeship in Certificate IV in employment services but she did not commence this training. Ms Cabales also agreed that Ms Bunts was her team leader and in this role she oversaw the daily operations of her team. Ms Cabales said that she gave her some support but in some areas she could not assist team members.
60 Ms Cabales stated that when she commenced work with the respondent the applicant attended some team meetings and she was able to be contacted by telephone and email. Ms Cabales stated that she scheduled meetings with the applicant when she needed help and Ms Cabales was unaware that Ms Wang was working in the Jobsmart area as well as the DEN contract area. Ms Cabales stated that the summary of what she claimed were Ms Wang’s contacts with clients could be made by another person and she confirmed that dates can be altered on the Gemma notes and data removed and edited. Ms Cabales agreed that the applicant gave staff a directive to update information in the Gemma system so that outstanding claims could be made and she was aware that claims could be made several months after work had been undertaken. Ms Cabales agreed that she was given training in January 2010 on how to use the new system scheduled to operate in March 2010 and she attended a number of team meetings conducted by the applicant to give feedback about caseloads. Ms Cabales also agreed that at a meeting held in January 2010 the applicant discussed the quality of notes being input to the Gemma system and provided a template for staff to follow when completing these notes. Ms Cabales stated that she was also advised that the Gemma system was to be decommissioned in March 2010 and she agreed that the Gemma system was not secure.
61 Ms Cabales stated that the applicant told her to put in the note in the Gemma system under Ms Wang’s name around the second week of January 2010 so that payment could be generated for this contact and Ms Cabales stated that the applicant suggested that she do it under Ms Wang’s name as she was this person’s post placement officer.
62 Ms Cabales agreed that she had a meeting with the applicant and another staff member when she was having difficulties coping with another staff member who had a disability but Ms Cabales denied that the applicant gave her strategies to deal with this employee and she claimed that she only told her to let her know if she had any issues with this employee and she told her that she would deal with it.
The applicant’s failure to file and serve closing submissions within the required timeframe
63 As the applicant did not file her submissions within the required timeframe after being granted a number of extensions within which to do so a hearing was set down to hear from the parties as to whether or not a further extension of time should be granted to the applicant to file and serve closing submissions.
Background
64 Evidence with respect to the substantive matter was heard on 13 and 14 October 2010 and 23 November 2010. On 24 November 2010 the parties were directed by the Commission to file and serve closing submissions by the close of business on 10 December 2010 and the matter was listed for hearing on 23 December 2010 for any closing submissions in reply. These directions, sent by email, are as follows (formal parts omitted):
“I write to confirm Commissioner Harrisons' (sic) directions to the parties at the end of the hearing on 23 November 2010.
The parties are to file and serve closing submissions by no later than the close of business on Friday 10 December 2010.
The matter is to be set down for a one to two hour hearing for any submissions in reply. To this end the parties are to advise their availability to attend a hearing on all of the following dates: 17, 20, 21, 22, 23, 24, 29 and 30 December 2010.”
65 Only the respondent filed and served closing submissions by 10 December 2010.
66 Following is a chronology of relevant events subsequent to 10 December 2010:
· On 13 December 2010 the Commission received an email from the applicant’s representative Mr Paul King seeking leave to file submissions by the close of business 15 December 2010 due to him being ill from 9 December 2010 onwards and the respondent advised the Commission that it did not object to an extension being granted. Later that day the Commission granted the applicant’s agent an extension of time to 4.00pm Wednesday, 15 December 2010 to file and serve her closing submissions.
· On the morning of 15 December 2010 the Commission received an email from the applicant’s representative indicating that he was having further medical tests and the applicant’s closing submissions would be filed that day however, this did not take place.
· On the morning of 16 December 2010 the Commission received an email from a Ms Andreja Hall on behalf of Mr King indicating that he was unwell and that after attending a medical consultation that day he would complete the submissions or she would do so on his behalf and submit them. After the applicant’s representative was asked whether he was seeking a further extension to file and serve the applicant’s closing submissions he responded by seeking leave to file and serve closing submissions by the close of business Friday, 17 December 2010. The respondent indicated that it did not take issue with this request and on 17 December 2010 at 12.43pm the Commission notified Mr King by email that an extension had been agreed to 4.30pm on Friday, 17 December 2010 and he was advised that any submissions received after this time and date would not be accepted.
· At 5.25pm on 17 December 2010 Mr King emailed the Commission asking if the applicant’s submissions had been received and if not he stated that he would resend them later that day or on the weekend. This email was not read by the Commission until Monday, 20 December 2010.
· On Monday 20 December 2010 at approximately 7.45am Mr King emailed the Commission saying that he had not had confirmation that his submissions had been received but if they had not been received he would have a friend email them from a different server. At 9.47am that day the Commission emailed Mr King telling him that the applicant’s submissions had not been received.
· At 6.52am on 21 December 2010 an email was received in the Commission on behalf of Regis Industrial Relations stating that the applicant’s submissions had not been sent due to a server error and the information would be converted to a ‘pdf’ format and submitted by lunch time or mid afternoon that day. Reference was also made to Mr King instructing the person who sent this email to print the applicant’s submissions and deliver them by express courier if it could not be sent by email.
· As no closing submissions were filed by the applicant by 17 December 2010 the hearing set down for 23 December 2010 for any submissions in reply was vacated.
· At 4.52pm on 21 December 2010 Mr King left a voicemail message stating that he had just left hospital and was therefore unable to complete the applicant’s submissions.
· At 10.44am on 22 December 2010 Mr King sent an email seeking leave for the applicant to file her closing submissions by Friday, 24 December 2010.
67 On 11 January 2011 the parties were advised that the matter would be set down for hearing to allow the parties to provide submissions and give evidence in relation to whether or not the applicant’s written closing submissions should be accepted.
68 Following is the evidence and submissions given at the hearing as to whether or not the applicant’s closing submissions should be accepted by extending time to file and serve the applicant’s submissions.
Applicant’s evidence
69 Mr King gave evidence that he was aware of the extended timeframes for filing closing submissions but he claimed that he was unable to comply with these timeframes because he was unwell. Mr King gave evidence that he had been ill since 9 December 2010 and a medical certificate dated 29 January 2011 was submitted in support of his claim. This certificate states that ‘Mr Paul King is receiving medical treatment and has not been well since Thursday, 9 December 2010’. He also lacked computer literacy and as his server was full and he had not deleted information from his inbox the applicant’s closing submissions, which had been completed by 17 December 2010, could not be sent from his outbox.
70 Mr King conceded that he attended the Commission on 14 December 2010 to deal with another application and he claims he was unwell at the time and should not have done so.
71 Under cross-examination Mr King stated that the applicant’s submissions were completed by 17 December 2010 and he unsuccessfully attempted to file and serve the submissions by email on that date and he then stated that he understood that they had been sent to the Commission on that date.
72 The respondent did not adduce any evidence.
Applicant’s submissions
73 The applicant submits that the Commission should take into account that in this instance there are special circumstances which make it equitable to extend time to file the applicant’s closing submissions and argues that the Commission needs to take into account whether the applicant will be denied natural justice if the extension of time to file closing submissions is not granted. The applicant also relies on the tests set out in the following authorities in support of her claim: Davidson v Aboriginal and Islanders Child Care Q078, 12 May 1998 (sic); Clark v Ringwood Private Hospital (1997) 74 IR 413; Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298; Carlito Cruz v Australia Post Corporation (2008 AIRCFB 452); Director General of the Department for Education v Prem Singh Malik (2003) 83 WAIG 3056 at paragraph 102 and Kornicke v Telstra Network Technology Group (Print 3168). The applicant submits that she should not be disadvantaged by representative error on the part of Mr King and in all of the circumstances it would be unfair not to accept her submissions by extending time to file her closing submissions. The applicant maintains that the respondent would not be significantly prejudiced by the late filing of her submissions and the respondent was aware at all times about what was happening with the applicant’s submissions.
Respondent’s submissions
74 The respondent does not object to the applicant’s application to file her submissions after the due date nor did it support this application. The respondent submits that it has suffered inconvenience and has had to suffer the disadvantage of dealing with a substantial amount of correspondence in relation to the applicant’s request to file her submissions after the extended timeframes as well as attending the hearing set down to deal with whether or not the applicant’s submissions should be accepted. Additionally, costs may have been incurred by the respondent with respect to this issue and the respondent may consider lodging an application seeking recovery of these costs.
Findings and conclusions as to whether time should be extended for the applicant to file closing submissions
75 On 15 February 2011 the parties were advised that time would be extended for the applicant to file her written submissions and reasons for this decision would issue at a later date.
76 The reasons for accepting the applicant’s submissions out of the required timeframe and thus extending time for the applicant to file and serve her closing submissions are as follows. When deciding whether to accept the applicant’s submissions and extend time to allow the applicant to lodge closing submissions it is appropriate to determine the extent to which the applicant may be disadvantaged if the submissions, which it appears Mr King had completed in the main by 9 December 2010 and were finalised by 17 December 2010, are not accepted by the Commission. Additionally, Mr King relies on representative error in support of his claim that time for filing the applicant’s submissions should be extended which I accept must be considered in this instance.
77 I find that the issue of the applicant’s submissions not being filed within the required timeframe has been very poorly handled by the applicant’s agent and in the circumstances I have concerns about Mr King’s ability to fulfil the requirements of a registered agent. The applicant was on notice on or about 24 November 2010 that closing submissions were to be filed and served by 10 December 2010 and Mr King had only been unwell since 9 December 2010, the day before closing submissions were due. It is therefore my view that his illness does not excuse his inability to lodge his submissions within the required timeframes. Furthermore after extensions of time were granted to the applicant’s representative in accord with timeframes requested by him, emails were sent by Mr King or on Mr King’s behalf stating that the applicant’s closing submissions would be filed on or about the extended deadlines given to the applicant to file her closing submissions yet this did not occur.
78 Notwithstanding my concerns about the capacity of Mr King to properly conduct his business as a registered agent in this jurisdiction I find that if the applicant’s closing submissions are not accepted this will significantly disadvantage the applicant. I also take into account that there has been representative error on the part of Mr King. In the circumstances I reluctantly accept the applicant’s closing submissions which I understand were finalised on or about 17 December 2010 but not filed at the time due to Mr King’s lack of computer literacy.
79 Whilst I accept that there has been some disadvantage to the respondent caused by Mr King not filing the applicant’s submissions within the required and extended timeframes I find that this disadvantage does not outweigh the disadvantage the applicant would suffer if her submissions were not accepted.
80 I am aware that in a previous matter before the Commission as constituted Mr King sought extensions of time to file submissions and this repeated failure to conform with Commission requirements is a concern to the Commission. I am also aware that when Mr King attended the Commission when he claims that he was unwell on 14 December 2010 Acting Senior Commissioner Scott, who presided over this matter, raised significant concerns about Mr King’s capacity to attend to the duties required of a registered agent (see Bruce Reynolds v Director General of Health (2010) 91 WAIG 79). I therefore put Mr King on notice that if he appears before the Commission as constituted in relation to any other matter any extensions of time with respect to procedural and interlocutory matters will only be granted in extraordinary circumstances.
Applicant’s submissions
81 The applicant submits that in a claim brought pursuant to s 29(1)(b)(ii) of the Act it must relate to an industrial matter as provided in s 7 of the Act, the claim must be made by an employee as provided in s 7 of the Act, the benefit claimed must be a contractual benefit that being a claim under a contract of service, the subject contract must be a contract of service, the benefit must not arise under an award or order of the Commission and the benefit must have been denied by the employer (see Hotcopper Australia Ltd v David Saab [2001] 81 WAIG 2704 and Ahern v AFTPI [1999] 79 WAIG 1867). In all cases it is necessary to ascertain the terms of the contract, be they written, oral, or partly written and oral. Terms may also be express or implied (see Sargant v Lowndes Lambert Australia Pty Ltd [2001] 81 WAIG 1149).
82 The applicant submits that she was an employee of the respondent, her claims are industrial matters for the purposes of s 7 of the Act as they relate to payments the applicant claims are due to her and arise out of her employment with the respondent and the contractual benefits she is claiming do nor arise under an award or order of the Commission.
83 Concut Pty Ltd v Worrell (2000) 176 ALR 695 at [57] is authority for the inclusion in an employment contract of the implied term of fidelity and good faith:
“... This is the term that such an employee will exhibit fidelity and good faith in dealing with the employer and its assets and property, avoiding conduct incompatible with the continuing trust between them.”
The applicant submits that at all times throughout her employment with the respondent she acted with the implied duty of fidelity and good faith and that her behaviour was consistent with the implied duty (see Concut Pty Ltd v Worrell [2000] HCA 64) and the applicant submits that at no time whatsoever did she engage in conduct that amounted to conduct repugnant to the relationship of employer–employee and the applicant submits that there was nothing in her conduct that justified being summarily dismissed for misconduct.
84 The applicant submits that the bonus payment due to her is a benefit derived from her contract of employment and argues that the criteria for payment of the bonus was based on her team’s performance and not her performance. The meaning of a “benefit” is very broad and has been held to mean any “advantage, entitlement, right, superiority, favour, good or perquisite which has been denied by an employer as a term of the contract of service” (see Balfour v Travel Strength Ltd [1980] 60 WAIG 1015).
85 The applicant submits that when construing a contract of employment the Commission must place “itself in thought in the same factual matrix as that in which the parties were” (see Reardon Smith Lines Ltd v Hansen Tangan [1976] 1 WLR 989 per Lord Wilberforce). The applicant submits that the bonus payment of $7,500 was an entitlement flowing from her contract of employment with the respondent. The applicant submits that the respondent did not adduce any evidence from Ms Ophel about the intent and meaning of the bonus clause and no witnesses were called by the respondent to corroborate any of the evidence regarding the bonus payment criteria and how it was to be paid. The applicant refutes the respondent’s inference that the bonus would be reviewed on an annual basis and maintains that it was the applicant’s remuneration that was to be reviewed and if there was any review process of the bonus payment it would be to determine the criteria for the next bonus payment and the amount. The applicant submits that under her contract of employment the clause headed “Remuneration Review” was specific to her performance whereas the clause headed “Remuneration” related to the bonus payment based on her team’s performance. The applicant submits that Mr Kieran was not involved in the applicant’s contract of employment and the relevant parties at the time to the contract of employment were Ms Potter, Mr Haupt and Ms Ophel and the only witness called to give evidence about this issue was Ms Ophel and she provided to the Commission an insight into the relevant clauses of the applicant’s contract and the applicant maintains that her evidence was consistent and essential elements of her evidence were corroborated by Ms Ophel. The applicant submits that when she raised the issue of her bonus in December 2009 with Mr Haupt he advised her she needed to discuss it with the new CEO which she did and Mr Kieran told the applicant that operational matters such as this would be discussed with her at a later date.
86 The applicant argues that her team’s performance was not affected during the time she was not at work between 13 October 2010 and 1 December 2010. The applicant maintains that the respondent achieved a five star rating in both the capped stream and the uncapped stream based upon her team’s performance for the period July 2009 to December 2009 and the applicant submits that the DEN monitoring visit on 8 December 2009 was the last report for the DEN services contract and the applicant claims that this report shows the performance of her team during the period July 2009 to December 2009 as being highly commendable and that they had achieved a quality rating. There were some staff issues with one staff member bullying and harassing other staff members however after continued requests to Mr Haupt this issue was unresolved. The applicant also raised the same issue with Mr Kieran when he commenced as CEO and received no support from him and she therefore made the decision to tender her resignation. During the applicant’s employment with the respondent it was “in turmoil”, it had just lost a contract, the CEO had been forced to resign and this caused “a lot of angst in the organisation” and there was financial instability within the organisation. The environment the applicant encountered in the commencement of her employment was “a very hostile environment” and she had to retrain her team and put a number of her team through traineeships as a part of enhancing her team’s performance and to rebuild the morale of the team. The applicant also commenced updating the respondent’s outdated policies and procedures.
87 The applicant argues that she resigned from the respondent even though morale had continued to improve. The applicant gave evidence that DEEWR was monitoring the respondent on a regular basis and as a direct result of this the applicant had to reassure it that the respondent was still able to deliver the terms of the contract and she had to rebuild the respondent’s credibility and did so through improving the performance of her team. When the applicant commenced employment with the respondent there was a long list of outstanding claims which needed to be dealt with as quickly as possible and she had to clear the backlog before the window of opportunity to make such claims was lost. During the applicant’s absence from work due to an injury she sustained in a car accident she continued to work from home and would attend the respondent’s premises at least once a week and for managers’ meetings. Even though part of the time was confined to her home she was able to effectively manage her team’s performance and whilst at home the applicant also wrote many of the policies and procedures for the new system that was to come in and replace the DEN services contract. The applicant argues that her team’s performance was not affected by this and this was evidenced in the five star rating which came out in December 2009 for the period 1 July 2009 through to December 2009 which was based upon the performance of her team.
88 The applicant submits that Ms Cabales gave no actual example of poor working relationships within the applicant’s team nor did the respondent call any other witness to support Ms Cabales’ evidence. The applicant also submits that there was no evidence to support Ms Cabales’ evidence that she heard employees stating that they did not like working with the respondent and this evidence is hearsay evidence. Additionally, Ms Cabales gave evidence that she never received a job placement until January 2010 which contradicts the evidence of Mr Kieran where he stated that there were no job placements in the month of January 2010.
89 The applicant also claims that throughout her employment with the respondent she effectively undertook the duties of the respondent’s CEO given she was the most senior person in Western Australia as the Acting CEO at the time Mr Haupt resided in Canberra.
90 The applicant submits that any evidence given as to conversations between herself and Ms Potter should be given weight and it was incumbent upon the respondent to have called Ms Potter given that she was named as a witness in the respondent’s list of witnesses emailed to the Commission and the applicant on 1 September 2010.
91 Ms Ophel confirmed that the payment of a bonus to the applicant was based on her team’s performance and she confirmed that she had only been employed by the respondent for eight months when she received her bonus. Ms Ophel confirmed that significant changes were made by the applicant including turning staff morale around to the point where they felt positive, the applicant put in place a number of training plans for each staff member, the applicant conducted staff training and she revamped the way the staff worked and placed them into teams so as they could build on each other’s experiences. Ms Ophel also stated that the applicant worked extensively on the new DEN contract and the tender for the new contract.
92 The applicant submits that Mr Kieran’s evidence to the Commission about when a bonus is paid by the respondent should be given little or no weight as he failed to produce any evidence in support of his claim and his evidence in this regard contradicts Ms Ophel’s evidence. It was also incumbent upon the respondent to have called the accounts manager to testify about other employees such as Ms Potter who had received a bonus. The applicant argues that an inference can be made that Mr Kieran acknowledged that the applicant was due her bonus payment but her alleged misconduct negated the payment of it and even though Mr Kieran claimed that the bonus payment was to be taxed this was hearsay evidence.
93 The applicant submits that she should have been given the payment of two weeks’ pay in lieu of notice to which she was entitled under her contract of employment. The applicant argues that she tendered her resignation on 25 January 2010 by giving the respondent four weeks’ written notice in accordance with her contract of employment and the applicant submits that this contract allows for payment to be made in lieu of notice. The applicant submits that the intent of her agreement with Mr Kieran reached on or about 4 February 2010 was that she would be paid up to and including 19 February 2010 even though her last day of work was 5 February 2010 and the respondent was not free to resile from this agreement. As the applicant was not advised of her termination of employment until after the close of business on 18 February when Mr Kieran sent her an email dismissing the applicant her dismissal was not effective until 19 February 2010 which was to have been the applicant’s last day of employment with the respondent.
94 The applicant submits that the law is well established and clear on factors that are to be considered in cases of serious misconduct (see Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 at page 701; Rankin v Marine Power International Pty Ltd [2001] VSC 150 at [250 ]). These factors are:
“Was the employee’s conduct of such a nature that it repudiated (rejected) the contract or the essential obligations of the employment contract? The misconduct must be substantial.
Was the employee’s conduct of such a nature that it demonstrated an intention not to be bound by the contract in the future? Again, the misconduct must be substantial.
Has the employee deliberately flouted essential conditions of the contract of employment? There must be an element of wilfulness in the employee’s disobedience.
Was the misconduct an isolated event? Isolated conduct is usually insufficient.”
95 The applicant argues that she was not guilty of any misconduct and nor did she breach any implied or express term of her contract of employment and she relies on the Gemma system being insecure and easily manipulated. The applicant submits that the allegations of misconduct against her are totally unfounded and wholly without merit.
96 The applicant submits that there is an evidential onus upon the employer to prove that summary dismissal is justified (see Newmont Australia Ltd v The Australian Workers' Union, West Australian Branch, Industrial Union of Workers [1988] 68 WAIG 677 at 679) and the onus of proof rests upon the respondent to establish that it had the right to terminate the applicant’s employment without proper notice (see Blyth Chemicals Limited v Bushnell [1933] 49 CLR 66 at 83 and Concut Pty Ltd v Worrell (op cit) at [51]). The applicant submits that the question of whether a person is guilty of behaviour serious enough to justify summary dismissal is essentially a question of fact and degree (see Robe River Iron Associates v Construction, Mining Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australian Branch & Ors [1995] 75 WAIG 813).
97 The applicant submits where an employee’s employment is in jeopardy as a result of an allegation of misconduct that employee should be provided with the full facts and evidence supporting the allegation and provided time to make a well-informed answer. In not doing so the employee is denied procedural fairness/due process. If serious misconduct is the cause of a dismissal, the employee must still be given the reason for the dismissal and be given a chance to explain their conduct prior to the employer making the decision to dismiss them.
98 The applicant maintains that the respondent should have called Ms Potter the Acting CEO and CFO at the time she commenced employment to give evidence as well as Mr Haupt, Ms Griffiths, Ms Wang and Ms McCabe as the respondent bore the onus to demonstrate that the applicant misconducted herself.
99 Mr Kieran claimed that the applicant was dishonest in relation to placing notes on the Gemma system and the respondent relied on Ms Cabales telling it of the alleged instruction by the applicant that Ms Cabales place false information on the system. Mr Kieran also confirmed that he followed this issue up with Ms Cabales after the respondent terminated the applicant.
100 The applicant contends that Mr Kieran should have made himself aware of the claims process before conducting his investigation into the applicant’s alleged misconduct. The applicant argues that Mr Kieran’s evidence about the two notes preceding the one made on 23 December 2009 under Ms Wang’s is illogical because Ms Wang could have made all of the entries except the one dated 23 December 2009 which was after she ceased employment with the respondent. The applicant also submits that where Mr Kieran stated “they were made at the same time” he is referring to claims made to DEEWR on the ESS system not notes made on the Gemma system. In re-examination Mr Kieran claimed he talked to Ms Wang after he had made the discovery of the alleged false entry on the Gemma system and Mr Kieran was asked whether he asked her about the information entered to which he replied he did but when asked what her response was Mr Kieran answered in an evasive manner.
101 The applicant submits that the Gemma entry made on 23 December 2009 under the name of Ms Wang could have been an actual entry and Ms Wang may have made an honest mistake and put in the wrong date and the respondent should have ascertained if this was the case.
102 The applicant submits that if any misconduct occurred it was by Ms Cabales who in cross-examination made the admission that her acts and omissions amounted to serious misconduct. The applicant argues that Ms Cabales’ evidence appeared to be orchestrated and was structured to support Mr Kieran’s evidence and the applicant claims that Ms Cabales was motivated and coached to support her employer to defeat the applicant’s claims. The applicant submits that Ms Cabales did not have access to the ESS system and this was the system for making claims to DEEWR. Only the applicant and administration assistant at that time could do so and the only system Ms Cabales would have access to was the Gemma system. The document titled “Client Contact History for the period 2 November 2009 to 28 February 2010” was said to be a client history for Ms Cabales and is a Gemma report for a particular job seeker and all entries in this document including the one under the name of Ms Wang were entered by Ms Cabales. Apart from the allegation that Ms Cabales allegedly made the entry under Ms Wang’s name it is significant that the entries are not in sequential date order - they start with the first being 6 January 2010 then 7 January 2010 then 13 January 2010 then 18 December 2009 then 27 November 2009. This raises the question as to the actual authenticity of the document as an Employment Consultant should enter data in a sequential order. The applicant contends that she did not give Ms Cables an instruction to make such an entry and if she provided any instruction to her it would have been in line with using multiple Employment Consultants to enter evidence to legitimise claims. The applicant maintains that the only person who can say whether the note was false is Ms Wang and the respondent failed to call her as a witness. Furthermore, Ms Cables did not receive any letter of reprimand from the respondent as a result of her behaviour.
103 The applicant maintains that the notification of the reason for her termination should have been made prior to her being terminated, such that “as a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision to terminate their employment in order to provide them with an opportunity to respond to the reason identified” (see Crozier v Palazzo Corporation Pty Ltd Print S5897 at [73] and [2000] 48AILR at 4-284).
104 The Full Bench in Abdel - Karim Osman re Abdel (PR910409 [2001] AIRC 1081 [17 October 2001] at [69]) found that the obligations imposed on the employer in investigating allegations of misconduct that reasonable steps by the employer must be taken and that the employee be provided with a fair chance in answering the allegations, as follows:
“In our view what is required is that the employer take reasonable steps to investigate the allegations and give the employee a fair chance of answering them. The form in which an opportunity to respond is to be provided was considered by Northrop J in Selvachandran v Peteron Plastics Pty Ltd:
“Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employers concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.”
105 In Schaale v Hoechst Australia (1993) 47 IR 249 at [252] Heery J considered the following
“It would be harsh, unjust and unreasonable for an employer to dismiss an employee summarily on the ground of serious misconduct without taking reasonable steps to investigate those allegations and give the employee a fair chance of answering them: see Gregory at 471, Wheeler v Philip Morris Ltd (1989) 97 ALR 283 at 306.35.”
106 In Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224 at [229] the Full Bench of the South Australian Commission observed:
“Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.”
107 The applicant submits that at no time whatsoever was she provided with documentation clearly setting out the allegations and the evidence that the respondent relied upon in summarily dismissing her for misconduct and this was supported in the evidence of Mr Kieran who admitted that not all relevant information had been made available to the applicant so that she could make a well informed answer.
108 When limited evidence was provided by Mr Kieran on 25 February 2010 to the applicant this was seven days after the applicant was summarily dismissed for misconduct. Furthermore, much of the evidence alleging misconduct was only brought to the applicant’s attention at the hearing and Mr Kieran admitted that he never made full disclosure of the facts and evidence to the applicant and he gave evidence that it was based upon his own suspicions and judgement.
109 The applicant submits that there was no misconduct on her part whatsoever nor has she breached any express or implied terms of her contract of employment. The applicant therefore seeks an order that the respondent pay to her the sum of $3,076.48 being for two weeks’ payment in lieu of notice and a cash payment of $7,500 being the bonus payment to which she is entitled.
Respondent’s submissions
110 The respondent denies that it breached any express or implied term of the applicant’s contract of employment and that the applicant is due the sum she is claiming by way of two weeks’ wages for the period 6 February 2010 to 19 February 2010 as well as a bonus of $7,500.
111 The respondent argues that the applicant is not due two weeks’ wages on the basis that she has not discharged the onus on her to establish that the respondent has breached an express or implied term of her contract by not paying her two weeks’ wages for the relevant period.
112 The respondent maintains that it correctly summarily dismissed the applicant on 18 February 2010 having reasonably formed the view that she had engaged in misconduct and had breached several express conditions of her contract of employment prior to tendering her resignation. The respondent maintains that when the applicant instructed Ms Cabales to make a false entry into the Gemma system she did not diligently and faithfully serve the respondent to protect and further its interests and the applicant’s actions may have put the DEN contract and future business and prospective business opportunities with DEEWR at risk. When the respondent found out that claims for payment of services had been made to DEEWR based on the case note entered by Ms Cabales into the Gemma system the respondent decided that it was necessary to reimburse funds for work its Employment Consultant did not do on behalf of a job seeker and was therefore not entitled to claim under the DEN contract.
113 By instructing Ms Cabales to make a false entry into the Gemma system the respondent submits that the applicant engaged or instructed one of her staff members to engage in conduct or activity which was detrimental to the respondent’s operations, business or interests in that it brought the integrity of the respondent’s organisation into doubt during a period of uncertainty with DEEWR. The respondent had to notify DEEWR of the false claims and it sought payment against DEEWR for services it did not perform on behalf of a particular job seeking client and/or by seeking payment for services it did not perform on behalf of a particular job seeker. This had the impact of potentially depriving the job seeker of this or these services, as funding to job seekers in some cases is limited, had the impact of detrimentally affecting the respondent’s future operation, business or interests with DEEWR and/or this particular and other job seekers.
114 The respondent submits that by instructing Ms Cabales to make a false entry into the Gemma system the applicant did not display a standard of conduct that was in accordance with the highest ethical standards with respect to all business dealings involving the respondent and argues that her instructions fell short of accepted ethical behaviour of the business and of a benevolent organisation. The respondent submits for these reasons the applicant was in breach of several express terms of her contract of employment, terms that went to the heart of the contract of employment justifying its decision to dismiss her. The respondent submits that having reasonably formed the view that the applicant was in breach of her contract of employment, it should not be obliged to pay the applicant for work she did not do following 5 February 2010 despite any prior agreement.
115 The respondent submits that whilst the applicant was not required to provide further service to it, her contract of employment did not conclude until the end of her period of notice, that is, 19 February 2010. In the alternative the respondent submits that it is not liable to pay the applicant any monies by way of notice following its decision to dismiss her on 18 February 2010.
116 The respondent denies that the applicant is due the bonus she is seeking. The respondent acknowledges that the applicant may have been entitled to receive a bonus however payment is not owed to the applicant in the circumstances of this case. The applicant’s contract of employment does not expressly state, imply nor can it be construed to suggest that the bonus payment referred to in it was an inducement or incentive type bonus and the respondent maintains it was a potential bonus payment based on the performance of the applicant’s team. The respondent therefore denies that it is liable to pay any sum to the applicant on the basis of an inducement or incentive arrangement allegedly discussed or agreed to prior to the applicant commencing employment or at the time the applicant commenced employment with the respondent.
117 The respondent submits that on a correct interpretation of the applicant’s contract of employment any reference to a bonus payment was discretionary, and was based on the positive performance of the applicant’s team leading to it meeting organisational and business criteria, indicators or goals set by the respondent. This payment may have been made following assessment by an authorised person of the respondent after consideration of the applicant’s team performance over a period of 12 months or thereabouts. The applicant therefore had to remain in continuous employment with the respondent for a period of 12 months or close to 12 months in order to be paid any bonus. The applicant’s contract made no provision for a pro-rata payment in the event the applicant resigned or was terminated prior to any assessment taking place, nor was there any provision for full payment in the event the applicant resigned or was terminated prior to any assessment. It also cannot be construed that in the event a bonus payment materialised, that it was a payment to be made to her exclusive of income tax.
118 Ms Ophel gave evidence that payment of any bonus to the applicant was discretionary and based on her experience with the respondent, would typically be paid at the end of a financial year or close to the beginning of a new financial year. The respondent agrees with Ms Ophel’s understanding in this regard and the respondent therefore denies it is indebted to the applicant in full and/or in part to any bonus payment. The respondent also submits that the clauses of the applicant’s contract of employment entitled “Remuneration”, “Performance Review” and “Remuneration Review” must be read together in order to give its legal effect and proper purpose and intention.
119 The respondent submits that the applicant’s evidence that team performance was reflected through the DEN star rating system, the applicant rebuilding and retraining her team, employing new staff, being a positive injection into the work place, improving morale so as to improve productivity, updating policies and procedures, putting new systems in place and clearing out a back log of claims was not supported by any evidence. The respondent also submits that many of the criteria relied on by the applicant cannot be construed as “team performances” for example, the applicant rebuilding and retraining of her team, employing new staff, being a positive injection into the workplace, improving morale, updating policies and procedures and putting new systems in place are all individual objectives, criteria, duties or tasks allegedly set for her to complete. The respondent acknowledges that some of these objectives, criteria, duties or tasks, if set by an authorised representative of the respondent may ultimately lead to “team performance”, their development and implementation in the first instance do not necessarily precipitate into “team performance” rather they are individual tasks or duties set for the applicant to complete.
120 The respondent submits that Ms Ophel did not refer to any formal or set criteria or indicators but she testified what she understood the criteria or indicators were based on her discussions with Ms Potter and the applicant did not provide any evidence to establish what Ms Potter’s expectations were as regards the applicant’s “team’s performance”. Ms Ophel testified that there was a potential bonus payment referred to in the applicant’s contract of employment and that that payment was based on “team performance” however, the respondent submits in this regard that Ms Ophel’s testimony, to the extent that it is based on her understanding of comments made by Ms Potter, is hearsay evidence and therefore little if any weight should be given to it. In any event, Ms Ophel testified that her understanding of the criteria for payment of a bonus included that the applicant was to return the respondent’s DEN star rating to five, as she had learned during a meeting held in May 2009 that it dropped to four or less and this was offered as what she described to be as an incentive to the applicant to perform. The applicant was also required to improve the morale of her team following a period of internal uncertainty.
121 The respondent rejects the applicant’s assertion that the DEN star rating in December 2009 was assessed by DEEWR to be five, the maximum star rating, as the letter dated 24 December 2009 was prepared following a monitoring visit on 8 December 2009 which was something different to the DEN star rating assessment and this site visit was completed in order to satisfy contractual obligations pursuant to the DEN contract. The respondent claims that the reference in the letter dated 24 December 2009 to star ratings, was a retrospective comment and referred to the DEN star ratings as assessed by DEEWR for the period ending June 2009 as evidenced in the DEN star rating report (Exhibit R4). Furthermore the applicant has not taken issue with the authenticity of the DEN star rating reports of December 2008 and June 2009 whereby the respondent understands that:
· an official and public DEN star rating report was not published and released for the period July to December 2009;
· that the table attached to the email (Exhibit R5) reflects the official star rating as assessed by DEEWR for the period July to December 2009 and is an excerpt of a larger table that was not published by DEEWR; and
· that the reference to DEN star rating in the letter of 24 December 2009, refers to the period January to June 2009.
122 The respondent disputes the applicant’s assertion that the DEN star rating in the letter of 24 December 2009 refers to the period July to December 2009 and maintains that the official DEN star rating for the period July to December 2009 was assessed and reported at four and a half. Furthermore, the applicant’s assertion is incorrect as the letter of 24 December 2009 could not refer to the July to December 2009 period, as the letter was prepared prior to the conclusion of the rating period, which was 31 December 2009. The respondent therefore submits that the DEN star rating for the period July to December 2009 fell half of a star, when compared to the DEN star rating report of June 2009 to the unpublished but authorised table attached to the email dated 16 September 2010 (Exhibit R5). The applicant also bears the onus of establishing the DEN star rating to the extent that it may establish evidence of “team performance” and an entitlement to a bonus payment and the respondent submits that the applicant has not discharged this onus. As the applicant has failed to adduce or tender better evidence, the respondent submits the applicant’s assertions should not be given greater weight than the respondent’s claims in this regard. The respondent submits that the evidence of Ms Ophel did not assist the applicant with respect to establishing the DEN star rating at the end of the period July to December 2009 and in any event, Ms Ophel was no longer employed by the respondent at the material time.
123 Further and in the alternative, the respondent submits that according to the applicant’s own evidence, the star rating was only one of several criteria and the applicant has failed to show how her team performed so as to achieve a purported DEN star rating of five during the period July to December 2009, which is not admitted.
124 The respondent submits that the applicant has failed to prove that she rebuilt her team, retrained her team, was a positive injection in the workplace, improved morale, updated policies and procedures and put new systems into place and how these factors improved “team performance”. The only evidence that the applicant led in this respect was that of Ms Ophel who testified that the applicant was a “positive injection”. The respondent submits little if any weight should be given to Ms Ophel’s evidence as they were merely observations, she did not elaborate as to how she formed her opinion and she only worked with the applicant for approximately 12 weeks, during which the applicant did not work at all times in the office. The applicant did not report to Ms Ophel, her observations were made during the applicant’s probation period and her observations failed to establish how the applicant’s performance led or improved the applicant’s “team performance”, which was what was required to be achieved according to her contract of employment.
125 The respondent acknowledges that Mr Kieran did not work with the applicant for very long prior to her tendering her resignation however it submits that weight should still be given to Mr Kieran’s observations about the applicant as they were formed after the applicant had been employed by the respondent for approximately six months and it is reasonable to conclude that she should be proficient in her position at this point in time and Mr Kieran was an experienced manager who was neutral and new to the organisation. In contrast to Ms Ophel’s testimony, Mr Kieran observed that the organisation and the applicant’s team were fractured, there were personality conflicts, there were philosophical differences and that he could not find evidence that the applicant’s team was performing the duties required of them under the DEN contract, namely to help people with a disability find employment. Furthermore, the respondent maintains that Mr Kieran was a credible and reliable witness and his evidence should not be questioned.
126 The respondent submits that weight should be given to Ms Cabales’ evidence as she was a direct member of the applicant’s team, she had worked the longest with the applicant of all the witnesses who gave evidence, she provided a clear and coherent account of her observations as a member of the applicant’s team and she was unequivocal in her recollection as regards the morale of the applicant’s team and about the instruction she received from the applicant. She also displayed remorse with respect to her actions under instructions from the applicant. Further, the respondent submits that the applicant’s instruction to Ms Cabales to enter a false record into the Gemma system confirms that work was not being properly performed by the applicant’s team and the expectations of their performance were therefore not being met.
127 The respondent submits that it was reasonable for it to form the opinion that the applicant acted or alternatively, induced others to act, in breach of several express and implied terms of her contract of employment and in these circumstances the respondent submits that it would be incomprehensible for it to conclude that it had an obligation to pay a bonus to the applicant. Whilst it may be argued that such actions or behaviour does not necessarily mean that the applicant’s team did not perform and if it did, on a narrow reading of the contract of employment, the applicant may still argue an entitlement to a bonus payment, the respondent submits that this would be an overly narrow and incorrect interpretation of the contract of employment. When the contract of employment was drafted and executed by the parties, the drafter and the parties would not reasonably have contemplated that a bonus payment would be made to the applicant in circumstances where her team’s performance was the result of false or misleading acts, events or work performed.
128 For these reasons, the respondent submits that it has not acted in breach of an express or implied term of the applicant’s contract of employment and it therefore does not owe the applicant any bonus payment being the sum of $7,500 or part thereof.
129 The respondent therefore maintains that it has not denied the applicant any contractual benefit and her application should be dismissed.
Findings and conclusions
Credibility
130 I listened carefully to the evidence given by all of the witnesses in these proceedings and closely observed them. In my view the applicant gave her evidence in an honest and straightforward manner and I find that her evidence was plausible and consistent. Furthermore her evidence was not broken down during extensive cross-examination. In my view Ms Ophel, Mr Kieran and Ms Cabales all gave their evidence honestly and clearly and I find that their evidence was given to the best of their recollection. I therefore accept the evidence they gave. There was a discrepancy between Mr Kieran and Ms Cabales about whether or not Ms Cabales placed a client into work in January 2010 however it is my view that this discrepancy is minor and nothing turns on it. There was also a discrepancy in the evidence given by the applicant and Ms Cabales with respect to whether or not the applicant required Ms Cabales to make a false entry onto the Gemma system so that the respondent could claim monies from DEEWR. As I have found both witnesses to have given their evidence honestly and to the best of their recollection I will therefore rely on other information relevant to this issue and documentation tendered during these proceedings when considering this issue.
131 The applicant is seeking the following benefits which she maintains are due to her under her contract of employment with the respondent:
$3,076.48 being two weeks’ pay in lieu of notice; and
$7,500 as a performance bonus.
132 The claims before the Commission are for the denial of alleged contractual benefits. The law with respect to these matters is well settled. For an applicant to be successful in such claims a number of elements must be established. Each claim must relate to an industrial matter pursuant to s 7 of the Act and the claimant must be an employee, the claimed benefit must be a contractual benefit that being a benefit to which there is an entitlement under the applicant’s contract of service, the relevant contract must be a contract of service, the benefit claimed must not arise under an award or order of this Commission and the benefit must have been denied by the employer: Hotcopper Australia Ltd v David Saab (op cit); Ahern v Australian Federation of Totally and Permanently Incapacitated Ex-Service Men and Women (WA Branch Inc) (op cit). The meaning of “benefit” has been interpreted widely in this jurisdiction: Balfour v Travel Strength Ltd (op cit); Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307.
133 It is for the Commission to determine the terms of the contract of employment and to ascertain whether the claim constitutes a benefit which has been denied under the contract of employment, having regard to the obligations on the Commission to act according to equity, good conscience and the substantial merits of the case (Belo Fisheries v Froggett [1983] 63 WAIG 2394; Waroona Contracting v Usher [1984] 64 WAIG 1500; Perth Finishing College Pty Ltd v Watts [op cit]).
134 A contractual agreement between parties is to be interpreted using the ordinary words of the contract unless there is ambiguity. In Noel Edward Knight v Alinta Gas Ltd (2002) 82 WAIG 2392 at 2397 His Honour, Sharkey P stated the following:
“Somewhat axiomatically, there is no scope for interpreting a contract unless there is ambiguity or the words in issue are otherwise susceptible to more than one meaning (see Codelfa Construction Pty Ltd v State Rail Authority (NSW) (op cit) at page 352 per Mason J and see also Rankin v Scott Fell and Co (op cit)).
There are no strict rules of law governing the interpretation of contracts apart from the relevant rules of evidence. The plain, ordinary or natural meaning of the words used by the parties to express a term will prevail unless the context warrants otherwise. However, the process of construction of a contractual provision means more than merely assigning to the words of a written instrument their plain and ordinary meaning (see Codelfa Construction Pty Ltd v State Rail Authority (NSW) (op cit) at page 348 per Mason J). The parties’ apparent or objective intentions, as evidenced by the context in which they contracted, control the process of interpretation, an issue which the court necessarily approaches objectively (see The Life Insurance Co. of Australia Ltd v Phillips [1925] 36 CLR 60).”
135 I find that at all material times the applicant was an employee of the respondent, she was employed under a contract of service and I find that the claims the applicant is seeking are industrial matters for the purposes of s 7 of the Act as they relate to claims which arise out of the applicant’s employment with the respondent. It is also common ground that the benefits the applicant is claiming do not arise under an award or order of this Commission. The issue to be determined therefore is what were the terms of the applicant’s contract of employment with the respondent and whether the terms of this contract of employment entitled the applicant to the payments she is seeking.
136 Paragraph 3 of this decision sets out the facts relevant to the applicant’s employment with the respondent. It was also not in dispute and I find that on 25 January 2010 the applicant gave the respondent’s CEO Mr Kieran four weeks’ notice of her intention to cease employment with the respondent making her final day of employment 19 February 2010. It is also the case and I find that this notice period was in accord with the terms and conditions of the applicant’s contract of employment with the respondent (see Exhibit A1). It was also common ground and I find that on 3 February 2010 Mr Kieran asked the applicant not to continue attending work for the remainder of her notice period after 5 February 2010 and during this meeting he informed the applicant that she was no longer required to perform any further duties for the respondent for the remainder of her notice period after this date. It was also not in dispute and I find that he told the applicant at this meeting that she would be paid for the remainder of her notice period and on 4 February 2010 he confirmed this arrangement in writing to the applicant (see Exhibit A3).
1. The applicant’s claim for two weeks’ pay in lieu of notice
137 The relevant clause of the applicant’s contract of employment with respect to resignation is as follows:
“TERMINATION AND RESIGNATION
Except in the case of probationary employees, either party may terminate (sic) employment at any time by giving the other party one (1) months (sic) written notice. Instead of providing the specified notice, PEP may choose to make payment in lieu of notice. If you fail to give the required notice, you forfeit the entitlement to any monies owning to (sic) equal to the amount of notice not given.
Nothing in this Agreement affects PEP's right to dismiss an employee without notice for serious misconduct and an employee so dismissed hall (sic) only be entitled to be paid for the time worked up to the time of dismissal and any entitlements accrued to such time.
An employee over forty-five (45) years of age will be entitled to one (1) week's additional notice.”
(Extract Exhibit A1)
138 The following documentation confirms the exchanges between the applicant and Mr Kieran relevant to her termination and the non payment of the applicant’s remaining notice period (formal parts omitted):
Email from the applicant to Mr Kieran sent 16 February 2010 at 12:52 am
“Sorry to have to contact you through my web based email but we are having internet issues at home and they are not yet resolved.
I would like to request that my final salary includes my bonus amount ($7,500) as set out in my employment contract with PEP.
Could you please confirm with me the final sum and date of my final salary payment to be paid into my account? Thanks, that would be greatly appreciated.
I look forward to hearing from you asap (sic) regarding finalising my entitlements.”
(Exhibit A4)
Letter from Mr Kieran to the applicant dated 16 February 2010 and received by the applicant on 17 February 2010
“Following your departure from PEP Community services I was approached with concerns regarding supporting evidence for a series of claims for payment made in January. I have conducted a brief investigation myself and I have found several inconsistencies that I would like to follow up with you. On the surface it would appear that claims have been made that PEP was not entitled too.
It is clear that PEP is required to notify the Department of Employment Education and Workplace Relations about these inconsistencies. As the suspect claims were made under your username, I would like to follow up with you regarding the matter. In the meantime, it is incumbent on me to withhold any future payment to you until this matter has been resolved with you.
I would also like to follow up with you regarding some of the traineeship applications you processed in the past few weeks.
Would you please arrange a time to meet with me to discuss these matters? If you have additional supporting evidence for claims made in January in your possession I would appreciate it if you bring these to the meeting.”
(Exhibit A5)
Email from the applicant to Mr Kieran sent 17 February 2010 at 10:19 pm
“I am writing about a concern I have in relation to certain employee entitlements. I was employed by PEP between 27/07/2009 and 05/02/2010 as a Divisional Manager for PEP Community Services Inc.
I understand that my employment was subject to my PEP Employment Contract (herein called The Contract) and other legislation such as the Fair Work Act 2009 and the Workplace Relations Act 1996.
Under The Contract and relevant legislation cited above, I believe I am entitled to the following paid entitlements:
· The days I attended work since the last pay run being 03/02/10, 04/02/10 & 05/02/10;
· The total period of annual leave owing accrued during my employment beginning from 27/07/2009 until 19/02/2010 – the end date of my actual resignation period;
· Two weeks paid in lieu of notice as set out in The Contract, and in the letter dated 04/02/2010, confirmed said arrangements. (Copy of The Contract and letter attached).
· $7,500.00 Performance Bonus as cited in The Contract on pg (sic) 2 under ‘Remuneration’.
· For all monies owing that should have been paid to me by COB 05/02/2010 (as confirmed by Fair Work Ombudsman enquiry today 18/02/2010), as this was my last day of employment – attached letter dated 04/02/10 confirming payment in lieu for “standard payment arrangements” which would include accrued annual leave for this period – to be paid immediately by COB 19th Feb 2010.
· For final Salary Package amount to be paid to EPAC as per “standard payment arrangements” in letter dated 04/02/2010.
· Final copy of payslip for the above.
I have enclosed copies of The Contract, the letter discussed above dated 04/02/2010 in regards to agreement made to an early completion of notice period, and a copy of the email I sent on 16/02/2010. (To be delivered to PEP site today).
I have, to date, made several attempts to contact you via email on 16/02/2010 and via phone without success on 18/02/2010.
I would appreciate your consideration of my complaint. If I do not hear from you by 4.00pm close of business tomorrow 19/02/2010 for a full resolution to this matter, I will approach the Fair Work Ombudsman to assist in resolving this matter, which may result in a full investigation.
You may wish to seek independent legal advice on this matter. If you require further information in relation to your obligations under the Award/Act you can contact the Fair Work Infoline on 13 13 94.
I look forward to an early resolution of this matter.”
(Exhibit A4)
Email from Mr Kieran to the applicant sent 18 February 2010 at 5:50 pm
“Pursuant to my letter to you dated the 16th of this month, I now have further advice. I have sought legal counsel regarding the PEP position with respect to claims for payment made to the Department of Education, Employment &Workplace Relations that were made in January by you with the support of evidence that has been found to be false. My letter of the 16th February 2010 requested a meeting with you (sic) discuss these claims, As (sic) you have made no mention of this in your letter of demand I conclude that you do not wish to address this issue.
This behaviour is considered to be misconduct affecting your immediate release from employment with PEP community services. I am writing to inform you that I will be releasing your annual leave entitlement, as well as payment for the 3rd, 4th and 5th of February for payment to you. I have already given direction for these payments to be made to you today. This final payslip will be posted to your home address. No additional payments will be made to you by PEP Community Services.
With respect to your request for payment of a bonus made to me in writing on February 16th, for payment of a bonus, this request will not be granted.
It is my hope that this matter can be resolved quickly and fairly for both PEP and yourself without the necessity to involve any third parties.
It is the view of PEP Community Services Inc. that upon completion of these payments the matter will be considered finalised.”
(Exhibit A4)
Email from the applicant to Mr Kieran sent 18 February 2010 at 10:22 pm
“In response to email received: 1918/02/2010 (see below).
In the Letter of Demand, I was requesting a meeting with you for a “full resolution” to the matter at hand. This did not preclude discussion regarding the concerns you have over claims that you feel have been made wrongly. Your presumption that I am not willing to discuss this matter is incorrect.
As I refute your allegations that I have falsely invoiced DEEWR and that the claims made were not ‘valid’, I have sought legal advice in regards to your move to have me dismissed for misconduct. I have been informed that it is on the onus of the employer to prove such an accusation. On this basis, I would like to request, in writing, the specific allegations of PEP’s claim for misconduct, including a list of the apparent false invoicing to DEEWR and the evidence to suggest that these claims were made incorrectly.
Once I have received your statement to the claim for misconduct, I will seek further legal advice and will then reply to your statement, with a ‘Right of Reply’ against these allegations.
My expectation is that there will be no grounds for misconduct and that PEP will still be liable for my two weeks (sic) notice in lieu, and potentially still obligated to pay my Performance Bonus of $7500.00.
I intend to follow this process, ‘in good faith’ with the aim for a full resolution that both parties agree to outside of the legal system and hope that PEP opts to do the same. However, I will consider proceeding down a legal pathway if we cannot come to an agreeable resolution, within a reasonable time frame.
I therefore request that a Statement of Claim for Misconduct as set out above be forwarded to me in hard copy to my home address ([applicant’s address]) within 7 days. I will, accordingly reply to this claim in a standard Right of Reply format within 7 days of receipt of said document. I then request that PEP responds to my Right of Reply within 7 days as to whether PEP intends to pursue the path of dismissal based on misconduct. I also request, that if PEP’s decision is to withdraw the allegation of misconduct, all withheld monies owed to me as per my Employment Contract are paid and finalised into my account within 7 days from the notice given to me of PEP’s decision.
Again I reiterate, I am following this process in good faith, to resolve these issues as promptly as possible without legal intervention.
I will await the Statement of Claim for Misconduct with an expectation that it will arrive at my home address by Friday 26th February 2010. When received, I will consider the process of resolution to be in motion.”
(Exhibit A4)
Email from the applicant to Mr Kieran sent 19 February 2010 at 9:28 am
“This email is to formalise our brief interaction yesterday and to request a meeting today.
Yesterday afternoon 18/02/2010, I came to PEP and gave you the ‘Letter of Demand’ document, which you signed as receiving, setting out my complaint concerning PEP withholding monies owed to me – that under IR legislation and the Fair Work Act – PEP has no legal ground to do so. These monies were due to be paid to me on 05/02/2010 as this was my final day I attended work.
I have also requested that you contact me and meet to resolve this matter by COB today, otherwise I will be left with no alternative but to lodge my complaint with the Fair Work Ombudsman.
As I have not yet heard from you to make an appointment, I am contacting you one final time to arrange to meet later this afternoon. I can be available to meet with you anytime between 1.30pm-3.00pm, but will need about an hour’s notice to do so. My contact number is [telephone number].
I will await your call. If I have not heard from you to arrange a meeting today by 2.00pm, I will assume that you are not wanting to resolve this matter outside of the legal system.”
Letter from Mr Kieran to the applicant dated 25 February 2010 (formal parts omitted)
“Further to your letter of the 19th of February 2010 I enclose details supporting our claims of misconduct. In this instance PEP has identified 6 claims to DEEWR that have been identified as being supported by false evidence. These claims relate to 2 unique job seekers. Each claim was processed in the ‘Employment Services System’ under your user name during the month of January.
Claim ID – 294500662 in regards JSID 4246470008
Claim ID – 295780782 in regards JSID 5538821309
Claim ID – 295781061 in regards JSID 5538821309
Claim ID – 295781276 in regards JSID 5538821309
Claim ID – 295780760 in regards JSID 5538821309
Claim ID – 295780716 in regards JSID 5538821309
Claim 294500662 was made on 25th January 2010 in relation to work that was to have been performed by PEP in December 2009. The attached ‘Gemma note’ shows the evidentiary support for the claim was written by Monica Wang the day after her computer access was cancelled (form attached).
The remaining claims were made based on notes included on Gemma by another employee who did so under direct instruction from you. The employee disclosed this information immediately and wishes to remain anonymous. Further investigation has determined that an instruction to enter false information to Gemma was made by you to one other employee who did not comply with the instruction. This evidence will be retained by me for confidentiality reasons.
As indicated previously it is not PEP’s intention to pursue this matter beyond our responsibility to DEEWR. I will await your early response and reiterate my interest in achieving a timely conclusion to this matter with you directly.”
(Exhibit A7)
A document titled Client Contact History:
“3 Employment Assistance fees
Client Contact History for period
16/09/2009 – 16/02/2010
Staff
Comments
Contact Date/
Duration (Hours:Mins)
Method/
Funding
Employer



2015
[deleted information]
JSID 5538821309
Wang, Monica
23/12/2009
00:30
Phone
CBF – Choice – fee 8

Confirmed employment remains at 15hrs and 15.94 per hour. JS still doing well. Explained our closing hours over the holidays. New EC to contact in January.
Wang, Monica
24/11/2009
00:30
Phone
CBF – Choice – fee 7

Contacted JS, confirmed still employed same hrs and rate as last contact. Informed client that I would be his contact now until the end of the year.
Wang, Monica
22/10/2009
00:30
Phone
CBF – Choice – fee 6

Contacted JS. Working 15hrs @ 15.94 per hour. Explained that I would be his contact until the new EC arrived. Discussed how work was going and JS said that he was getting used to the hob (sic).
Bryant, Kylie
22/10/2009
00:15
Letter
CBF – Choice

Letter sent informing Matthew that a new Consultant will be in touch soon.
Bryant, Kylie
1/10/2009
00:30
Phone
CBF - Choice


Spoke to Matthew regarding his new job. I asked how it was going? He replied that it has been great. I said I believe your supervisors (sic) name is Frank how has he been? He said “Frank is definitely a rough diamond.” I asked Matthew if he is doing three hours a day Monday to Friday. Matthew confirmed he was but told me he was sick today with what he thinks is some type of food poisoning. He said he had been shivering, shaking and vomiting and was aching all over. I suggested Matthew get himself to the Doctor. Matthew said if he wasn’t feeling any better by this afternoon he would be definitely going to the Doctors. I have suggested we meet next Wednesday and will give Matthew a call to arrange a time.
Bryant, Kylie
21/09/2009
00:15
Fax
CBF - Choice


Wage subsidy paperwork faxed to Victoria park.
Bryant, Kylie
18/09/2009
02:00
Visit

[employer name]

Travel included also had to wait for 30 minutes as a meeting Julia was at ran over time. Met with Julia to confirm that Matthew would be starting work on Monday the 21st of September. A wage subsidy was offered and all paper work was completed and signed. Julia was informed that if Matthew needed support in his employment his supervisor Frank could call me. Julia said she would pass all of Peps" (sic) details onto Frank.
Bryant, Kylie
17/09/2009
00:30
Phone
CBF - Choice


Spoke to Matthew and explained I had heard from Julia and she had told me they were offering him 15 hours of work each week. Matthew said “yes I start on Monday.” I congratulated him and explained I would be meeting with Julia on Friday to put a wage subsidy in place. I told Matthew he could contact me if he finds any issues in the workplace that he is unable to deal with. Matthew thanked me and I wished him well for Monday.
Assistance start date – 20/5/09
Total Contacts: 8

Total Duration (Hrs:Mins)
05:00

Employment start date: 21/9/09.
4 week – 18/10/09
13 week 20/12/09
#######################
Page 1 of 1
Gemma Report ID: 104”
(Exhibit A7)
A document titled Application for Leave Form
“PEP Community Services Incorporated
Application for Leave Form
This is a request only.
To be completed at least two weeks prior to leave and to be approved by the HR Manager.
Name:
Monica Wang


Leave Type:



Annual……………………………………………..
X¨
Long Service…………………………………….....
¨
Bereavement/Compassionate Leave…………….....
¨
Sickness……………………………………………
¨
Doctor’s Certificate…………………….....
¨
Personal/Carers Leave……………………………..
¨
Rostered day off…………………………………...
¨
Leave without pay…………………………………
¨




Leave Period:



Date from: 23.12.2009______________
(First day of leave)
To 24.12.2009___________
(Last day of leave)
Number days:


2___________
Number of hours (if not a full day):
____________
Number of public holidays during leave period:
____________
Number of TOIL days during leave period:
____________




Advance payment Options where leave exceeds 2 weeks:
¨ Pay on normal days.

¨ On the last day of work pay up to:_______________
(Enter last day of leave



Remarks:


Please pay on the pay ending 22.1.2009


Employee’s signature:
(signed)

18/12/09
Program Manager:
(signed)

18/12/09
HR Manager Signature:


/ /




(Exhibit A7)
A document titled Employee Termination Checklist
“Employee Termination Checklist
Name:
Monica Wang
PEP Division:

Date of last day at work:


Date item returned
22.12.09
Initialed (sic) by PEP Admin or Program Manger (sic)
Comments
Office keys
"
(initialled)
OK
Mobile phone and Hands free Car Kit
"
(initialled)
OK
Vehicle and car keys
"
(initialled)
OK
Computer
"
(initialled)
OK




IT Manager to complete



Access to PEP Systems disabled
"
(initialled)
OK
Access to DEWR systems disabled
"
(initialled)
OK
Removed personal data from C drive
"
(initialled)
OK
Name removed from email lists (division and PEP and individual name)
"
(initialled)
OK
Email forwarded to division Admin
"
(initialled)
OK




Arrangements for last pay

Yes
Cancellation of superannuation and Salary Sacrifice:

Yes
Manager signature (signed) …………………………
Employee signature: (signed) ……………………….

(Exhibit A7)
139 I find that on 17 February 2010 the applicant received a letter from Mr Kieran dated 16 February 2010 advising her that the two weeks’ pay in lieu of notice due to her for the remainder of her notice period was being withheld by the respondent because of inconsistencies in some of the respondent’s claims for payment to DEEWR. Mr Kieran advised the applicant at the time that this would be the case until this matter was resolved with the applicant (see Exhibit A5). I find that no discussions ever took place between Mr Kieran and the applicant about these inconsistencies and I find that Mr Kieran then informed the applicant that she was summarily terminated by email sent to her on the evening of 18 February 2010. The applicant was also advised at the time that apart from paying annual leave entitlements due to her and her normal pay up to 5 February 2010 no other payments would be made to the applicant (Exhibit A4). Mr Kieran gave evidence that he determined that it was appropriate not to pay the applicant the balance of the notice period due to her because the applicant had breached her obligations under her contract of employment by making false entries into the respondent’s accounts and records. He also maintained that the applicant had misconducted herself because she had been dishonest with respect to notes made about client contact in the Gemma system in order to make false claims for payment on behalf of the respondent. Specifically, she had instructed Ms Cabales to enter false notes onto the respondent’s Gemma system.
140 It is common ground that the applicant did not attend work from 6 to 19 February 2010 at the respondent’s initiative and the applicant’s contract allowed for a payment to be made to the applicant in lieu of working her notice period. There was also no dispute and I find that the applicant’s contract of employment includes an express term which states, under the clause headed ‘Termination and Resignation’, that the respondent has the right to dismiss the applicant without notice for serious misconduct. The applicant’s contract of employment under this heading also states that when an employee is so dismissed the employee is entitled to be paid for the time worked up to the time of dismissal and any entitlements accrued to such time.
141 The respondent claims that as the applicant misconducted herself it was appropriate not to pay her two weeks’ pay in lieu of notice for the period 6 to 19 February 2010. Even if it was the case that the applicant misconducted herself which resulted in her summary termination on or about the evening of 18 February 2010, which I do not find was the case for reasons which follow, the applicant’s contract of employment with the respondent expressly requires the respondent to pay her for the period up to dismissal when an employee is summarily terminated which in this instance was the evening of 18 February 2010. The applicant did not attend work between 6 and 19 February 2010 inclusive at the respondent’s initiative and the applicant gave evidence, which I accept, that she was prepared to work this period. As the applicant was not terminated until the evening of 18 February 2010 and as the respondent was required to pay the applicant any monies owed to her up to her termination under the terms of the ‘Termination and Resignation’ clause of the applicant’s contract of employment with the respondent and when taking into account equity, good conscience and the substantial merits of this case I find that the applicant is entitled to be paid for the remaining notice period due to her up to and including 19 February 2010. In my view the applicant should be paid up to and including 19 February 2010 as the applicant was terminated after the close of business on 18 February 2010.
142 If I am wrong in reaching this conclusion, which I do not concede, as I have found for the reasons set out below that the applicant was unfairly dismissed then the applicant was entitled to be paid for the remainder of her notice period in any event.
143 I will therefore issue an order that the applicant be paid the two weeks’ notice that she is seeking in the amount of $3,076.48.
144 There was no dispute and I find that the applicant was summarily terminated by the respondent for misconduct on the evening of 18 February 2010. In cases where an employee is summarily dismissed for misconduct the onus is on the applicant to demonstrate that the dismissal was unfair on the balance of probabilities. However, there is an evidential onus upon the respondent to prove that summary dismissal is justified (see Newmont Australia Ltd v The Australian Workers' Union, West Australian Branch, Industrial Union of Workers [op cit]). The question of whether a person is guilty of misconduct justifying summary dismissal is essentially a question of fact and degree (Robe River Iron Associates v Construction, Mining Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australian Branch & Ors [1995] 75 WAIG 813 at 819). In most cases the employee should be given an opportunity to defend allegations made against them. In Bi-Lo Pty Ltd v Hooper at page 229 the Full Bench of the South Australian Commission observed:
“Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.”
145 On the facts as I find them I am satisfied, at least on balance that the respondent has not demonstrated that the applicant was guilty of gross misconduct justifying summary dismissal. Further, I am satisfied that the applicant was treated unfairly and harshly because she was not given sufficient opportunity to defend herself against the allegations relied upon to effect her termination. She was not afforded “a fair go all round” (see Undercliffe Nursing Home v Federated Miscellaneous Workers’ Union of Australia, Hospital, Service and Miscellaneous, WA Branch (1985) 65 WAIG 385).
146 I find that in mid February 2010 Mr Kieran became aware that the veracity of some of the respondent’s claims for payments made to DEEWR in January 2010 was questionable and he was concerned that some of these claims for payment lodged by the applicant may put the respondent’s contract with DEEWR at risk. I find that after speaking to Ms Cabales, Mr Kieran formed the view that some of these claims arose due to the applicant requiring her and other employees to put false evidence into the respondent’s record keeping Gemma system and he was concerned that this work may not have been completed. I also accept Mr Kieran’s evidence that in particular, after reviewing claims made to DEEWR by the respondent in January 2010, he believed that an entry for work undertaken by Ms Wang in the respondent’s Gemma system had been made using her name after her final day of employment with the respondent and this put into doubt a number of claims for this job seeker in January 2010. In contrast the applicant denied that she required Ms Cabales to make any false entries onto the respondent’s Gemma system and she maintained that all claims to DEEWR were legitimate and could only be made by the respondent by following a specific process, which occurred in each instance whilst she was employed by the respondent, and she maintained that claims to DEEWR were not based solely on notes contained on the respondent’s Gemma system.
147 Mr Kieran formed the view that the applicant had misconducted herself by requiring at least one employee to put false information onto the Gemma system and as a result of this he concluded that false claims may have been lodged by the applicant with DEEWR for payment. I find that Mr Kieran made insufficient enquiries about these issues and about work completed by the respondent with respect to the job seeker referred to in the entry under the heading of Ms Wang dated 23 December 2009. I find that there was uncertainty as to whether or not the claims made to DEEWR with respect to the job seekers the subject of the applicant’s termination were based on false claims. It was not in dispute and I find that the respondent’s Gemma system was able to be accessed by a number of persons and I also accept the applicant’s evidence, which was not disputed, that claims for payment made to DEEWR were based on information contained in the respondent’s records whereby a timesheet was filled out and signed off by a client and were not solely based on information contained in the Gemma notes and she was not the only employee who made claims for payment to DEEWR. In the circumstances I therefore find that the respondent has not established that it had sufficient reason to form the view that the applicant has misconducted herself with respect to requiring Ms Cabales and possibly other employees to make false entries onto the respondent’s Gemma system and that false claims for payment were made to DEEWR or that the applicant made claims to DEEWR based on work that was not undertaken by the respondent.
148 I find that the applicant was denied procedural fairness and natural justice given the manner of her termination. I find that prior to the applicant’s termination the respondent did not give the applicant any opportunity to respond to its view that the applicant had misconducted herself nor did it give the applicant reasons for forming this view to which she could respond which the respondent relied on to effect her termination. Even though Mr Kieran referred to wanting to have discussions with the applicant about concerns he had with her behaviour in his letter to her dated 16 February 2010, which was received by the applicant on 17 February 2010, he had the opportunity to do so when it appears the applicant and Mr Kieran met on 18 February 2010 when the applicant handed him correspondence but no discussions eventuated. It was also the case that details about the applicant’s alleged behaviour were only provided to her several days after she was terminated and I accept the applicant’s evidence and I find that this information was vague nor did it give the applicant sufficient opportunity to respond to the allegations against her which were relied on by the respondent to terminate her. In any even by this point in time the applicant had already been terminated.
149 I therefore conclude that the respondent did not have sufficient reason to summarily terminate the applicant and that in all of the circumstances her termination was unfair (see Undercliffe Nursing Home v Federated Miscellaneous Workers Union of Australia, Hospital Service and Miscellaneous WA Branch [op cit]).
2. The applicant’s claim for a bonus
150 The applicant is claiming $7,500 net by way of a performance bonus which she says is due to her under her contract of employment.
151 The relevant sections of the applicant’s contract of employment with respect to this claim are as follows (Exhibit A1):
“REMUNERATION
Your commencing base salary will be $80,000 per annum plus superannuation at the government mandated rate (currently 9% of base salary). A fully maintained company car will be made available to you. Additionally you will receive the following work tools:
mobile phone
laptop
wireless broadband.
You will also receive a $7,500 bonus based on the performance of your team.
Your after tax remuneration will be paid into a bank account nominated by you each fortnight. It is your obligation to provide us with the correct bank details and advise us promptly if there are any changes to those details.
PEP is able to salary sacrifice and an example of how you may like to salary package is set out below.
Base salary:
$63,950.00
Salary sacrifice option:
$16,050.00 (tax free component)
Total:
$80,000.00
PERFORMANCE REVIEW
Your performance will be reviewed and discussed with you at intervals at least annually. This is an important opportunity for formal two-way communication about your performance, job content, training and future development. It will include setting of objectives and, on occasions, adjustment of the accountabilities and responsibilities expected of your position.
REMUNERATION REVIEW
Your remuneration will be reviewed at least annually. This review will take into account your performance review outcomes, as well as PEP’s financial position and prospects.”
152 It is clear and I find that the provision headed “Remuneration” of the applicant’s contract of employment provides that she be entitled to a bonus of $7,500 based on the performance of her team which consisted of approximately 13 employees working under the DEN contract and two employees who worked under the Jobsmart contract. I find that given the terms of the applicant’s contract of employment under the heading of “Remuneration” that the payment of a bonus to the applicant was a discretionary payment. I also note that there was no set timeframe within which the performance of the applicant’s team was to be assessed and there was no express indicia in place to assess the performance of the applicant’s team.
153 The law with respect to the exercise of discretion in relation to a benefit due to an employee in the form of a bonus under the terms of a contract was recently canvassed in Eshuys v St Barbara Limited [2011] VSC 125 (6 April 2011). In this decision at paragraph 104 reference is made to the case of Clarke v Nomura International Plc [2000] IRLR 766 as follows:
“104 In Clark’s case, the plaintiff had been employed by the defendants under an agreement, which entitled him to payment of a basic annual salary, together with a bonus which, according to the terms contained in the plaintiff’s letter of employment, was “not guaranteed in any way, and is dependent upon individual performance ... “. (sic) The plaintiff’s employment was terminated by the defendant during the second year of his employment with the defendant. At that stage, he had earned substantial profits for the company during the relevant period. Nevertheless, the defendant decided not to award the plaintiff a bonus. The High Court, comprising the Queen’s Bench Division, upheld the claim by the plaintiff, holding that the defendant had breached its contract with the plaintiff, by not awarding him a discretionary bonus for the nine month period before his dismissal.
105 In reaching that conclusion, Burton J considered that the defendant, in assessing the bonus payable to the plaintiff, was obliged not to do so “irrationally or perversely (or capriciously)”.[6] In prescribing that standard of conduct for the exercise of the discretion, his Honour stated:
“... the employer’s discretion is in any event, as a result of the authorities, not unfettered, as both sides have accepted to be the law in this case. Even a simple discretion whether to award a bonus must not be exercised capriciously ... or without reasonable or sufficient grounds ... I do not consider that either of these definitions of the obligation are entirely apt, when considering whether an employer was in breach of contract in having exercised a discretion which on the face of the contract is unfettered or absolute, or indeed even one which is contractually fettered such as the one here considered. Capriciousness, it seems to me, is not very easy to define ... It can carry with it aspects of arbitrariness or domineeringness, or whimsicality and abstractedness. On the other hand the concept of ‘without reasonable or sufficient grounds’ seems to be too low a test. I do not consider it is right that there be simply a contractual obligation on an employer to act reasonably in the exercise of the discretion, which would suggest that the court can simply substitute its own view for that of the employer. My conclusion is that the right test is one of irrationality or perversity (of which caprice or capriciousness would be a good example) ie that no reasonable employer would have exercised his discretion in this way. ... Such test of perversity or irrationality is not only one which is simple, or at any rate simpler, to understand and apply, but it is a familiar one, being that regularly applied in the Crown Office or, as it is soon to be, the Administrative Court. In reaching its conclusion, what the court does is thus not to substitute its own view, but to ask the question whether any reasonable employer could have come to such a conclusion.”[7]”
154 Based on the evidence of Ms Ophel, I find that the respondent’s custom and practice for awarding a bonus at the time the applicant was employed by the respondent was by way of a review made by the CEO and the CFO, however this review did not take place with respect to the applicant’s performance. I accept that the applicant made efforts to resolve the issue of the payment of a bonus to her prior to ceasing employment with the respondent, initially with Mr Haupt and then Mr Kieran, however she did not receive confirmation from either of them that paying her the bonus in her contract was being contemplated by the respondent, which is unfortunate.
155 Notwithstanding that the respondent did not undertake a review of the performance of the applicant’s team to determine if the applicant was entitled to be paid the bonus in her contract of employment I am unable to conclude in all of the circumstances of this case that the respondent should have paid the applicant the bonus that she is seeking and I find that the respondent did not act unreasonably by not paying the applicant the bonus provided for in her contract of employment.
156 Apart from the applicant the only witness to give direct evidence about the basis upon which any bonus would be paid to the applicant with respect to her team’s performance was Ms Ophel. The applicant maintained that a range of factors were relevant to the payment of a bonus to her with respect to her team’s performance. One of these was the DEN star rating, which was corroborated by Ms Ophel, and the applicant also gave evidence which I accept that she was required to and did put in place initiatives which resulted in her team performing more cohesively and productively during her employment with the respondent. Ms Ophel corroborated the applicant’s claim that her team’s performance improved during the applicant’s employment with the respondent and she gave evidence that the applicant’s staff were more positive, team building had occurred and staff training plans had been put in place by the applicant. Mr Kieran on the other hand gave evidence that client placements were low in the months immediately prior to the applicant’s cessation of employment with the respondent and he observed that in the two weeks prior to the applicant ceasing work with the respondent that the applicant’s team was fractured and was experiencing disharmony. It was also the case that Mr Kieran and Ms Cabales gave evidence, which I accept, that the applicant’s team was fractured and dysfunctional in December 2009 and January 2010 and Mr Kieran asked the applicant not to work out her full notice period based on complaints about her from some of her staff.
157 Even if the respondent had reviewed the performance of the applicant’s team in January 2010 I am not convinced that the applicant could demonstrate that during the six months that she supervised and worked with her team, which included a period of sick leave for seven weeks, that there had been a sufficient improvement in her team’s performance to warrant payment of the bonus to her. There was a dispute between the parties as to whether or not the respondent’s DEN star rating had improved as at December 2009 however, even if there was an improvement to the star rating, which was unclear on the evidence before me, this was only one factor relevant to an improvement in the performance of the applicant’s team. The applicant worked for the respondent for a relatively short period within which to demonstrate significant changes to team performance and for seven weeks of this period she was on sick leave during which the applicant had minimal direct contact with her team. Furthermore, Ms Ophel only worked with the applicant for a period of approximately three months of the applicant’s employment with the respondent, which was a very short period for her to judge ongoing and consistent improvements in the performance of the applicant’s team. I also note that there was a substantial conflict in the evidence about any improvements in the performance of the applicant’s team. I therefore find that the respondent did not act unreasonably, nor did it err in its discretion when it declined to pay the applicant the bonus of $7,500 included in her contract of employment after the applicant asked Mr Kieran for this payment in February 2010. This part of the applicant’s application will therefore be dismissed.
158 Given my above findings, an order will issue that the applicant be paid $3,076.48 being two weeks’ pay in lieu of notice and this application will otherwise be dismissed.