1 Fair Work Act 2009 s.604—Appeal of decision Steven Guthrie v AJ & T Pulbrook Pty Ltd T/A Brook Motors (C2016/3043) SENIOR DEPUTY PRESIDENT HAMBERGER DEPUTY PRESIDENT HAMILTON COMMISSIONER RIORDAN SYDNEY, 11 MAY 2016 Appeal against decision [2016] FWC 914 of Commissioner Saunders at Newcastle on 26 February 2016 in matter number U2015/13054. [1] Mr Steven Guthrie (the appellant) has applied for permission to appeal a decision1 of Commissioner Saunders dated 26 February 2016. [2] Mr Guthrie was employed by AJ & T Pulbrook Pty Ltd T/A Brook Motors (the respondent) from 17 February 2014 to 18 September 2015 when his employment was terminated for serious misconduct. [3] The Commissioner found that Mr Guthrie was not unfairly dismissed, as the termination of his employment was consistent with the Small Business Fair Dismissal Code (the Code). The decision [4] The Commissioner summarised the events leading up to the appellant’s dismissal as follows: ‘(a) Mr Guthrie had a dispute with a customer on 21 August 2015 in relation to the amount the customer should be charged for the work undertaken by Mr Guthrie at Brook Motors. Mr Warren Pulbrook and Mr Guthrie agree that the customer acted unreasonably in refusing to make any payment for the work that had been undertaken on his car; (b) On 21 August 2015, Mr Guthrie poured water into the customer’s fuel tank before he returned the car to the customer. Mr Guthrie says he did so because he extracted some water from the fuel tank in the customer’s car when he was working on it and he was simply returning the car to the customer in the same condition as it was when it arrived in the Brook Motors’ workshop; [2016] FWCFB 2859 DECISION f_p_n_1_ [2016] FWCFB 2859 2 (c) Mr Warren Pulbrook was absent overseas at the time the incident took place on 21 August 2015. Mr Warren Pulbrook arrived back in Australia in early September 2015, at which time he returned to work; and (d) After Mr Warren Pulbrook’s return to work in early September 2015, he undertook an investigation into the incident concerning Mr Guthrie’s dispute with the customer and then dismissed Mr Guthrie on 18 September 2015.’2 [5] The Commissioner was satisfied that the respondent was, immediately before the time of the appellant’s dismissal, a small business employer.3 [6] The Commissioner referred to the following extract from the Full Bench decision in Pinawin v Domingo (Pinawin):4 ‘[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held. [30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. The circumstances include the experience and resources of the small business employer concerned. … [38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well …’ [7] The Commissioner was satisfied that the respondent had terminated the appellant without notice on the grounds that he had committed serious misconduct.5 He was also satisfied that the appellant had engaged in conduct sufficiently serious to justify immediate dismissal. ‘In particular, Mr Warren Pulbrook believed that Mr Guthrie engaged in a wilful and malicious act by pouring water into the customer’s fuel tank and, as a result of that conduct, Mr Warren Pulbrook no longer had any trust or confidence in Mr Guthrie.’6 f_p_n_2_ [2016] FWCFB 2859 3 [8] The Commissioner indicated that in his view conduct by a mechanic in pouring water into a customer’s fuel tank following a dispute with the customer over the amount to be charged to the customer constituted serious misconduct. In particular it was wilful and deliberate behaviour and caused serious and imminent risk to the reputation and (potentially) the profitability of the employer’s business.7 [9] The Commissioner then turned to whether the respondent had carried out a reasonable investigation and reached a reasonable conclusion in all the circumstances. The Commissioner reviewed the evidence, noting amongst other things that the manager of the business had not spoken to the appellant directly about the incident involving water being poured into the customer’s fuel tank other than to tell him that he was investigating the matter.8 He noted the following: ‘Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. That did not happen in this case in relation to the allegation that Mr Guthrie poured water into the customer’s car. However, this is an unusual case. For the following reasons, I am satisfied that Brook Motors undertook a reasonable investigation and reached a reasonable conclusion in all the circumstances: (a) Mr Warren Pulbrook was informed during his investigation that Mr Guthrie poured water into a customer’s fuel tank following a disagreement with the customer and Mr Guthrie admits that he engaged in that conduct; (b) For the reasons set out in paragraph [46] above, it did not matter to Mr Warren Pulbrook how much water Mr Guthrie poured into the customer’s fuel tank. Mr Warren Pulbrook’s opinion in relation to that issue is, in my view, sound and reasonable; (c) Detailed evidence was given by Mr Guthrie during the determinative conference in relation to his actions on 21 August 2015 and his reasons for acting in that way. I am satisfied that even if Mr Warren Pulbrook had discussed the water pouring incident with Mr Guthrie prior to his dismissal and had heard everything Mr Guthrie had to say about that issue, Mr Warren Pulbrook would not have changed his decision to bring Mr Guthrie’s employment to an immediate end on 18 September 2015; (d) Brook Motors conducts a small mechanical and spare parts business, the success of which depends on the relationships it forms with customers and the reputation it has in the area. The conduct in which Mr Guthrie engaged in pouring water into a customer’s fuel tank caused serious and imminent risk to the reputation of the business of Brook Motors; (e) Both Mr Warren Pulbrook and Mr Anthony Pulbrook are very experienced in the motor vehicle industry. They are well placed to make an assessment as to the risks to the business of Brook Motors by reason of the conduct in which Mr Guthrie engaged on 21 August 2015. Having said that, they are inexperienced in dealing with employment law issues and investigations leading up to a potential dismissal; f_p_n_3_ [2016] FWCFB 2859 4 (f) Mr Warren Pulbrook knew Mr Guthrie well, having worked closely with him for about 18 months; and (g) Having regard to Mr Guthrie’s conduct in pouring water into the customer’s fuel tank following a disagreement with the customer, as well as Mr Guthrie’s past behaviour and conduct in the workplace and his disputes with employees of Brook Motors, Mr Warren Pulbrook had, in my view, a legitimate concern as to how Mr Guthrie would react if he confronted him directly in relation to what happened on 21 August 2015.’9 [10] The Commissioner concluded that the appellant’s dismissal was consistent with the Code. Accordingly he found that Mr Guthrie was not unfairly dismissed and his application was dismissed. The application for permission to appeal [11] The application for permission to appeal was heard on 13 April 2016. The appellant filed written submissions on 5 April 2016 and appeared for himself on 13 April 2016. The Respondent, as it is entitled to do, advised that it would not appear or file submissions on the issue of permission to appeal. [12] The Appellant at the hearing said:10 ‘In Previsic v Australian Quarantine Inspection Services it was found that an employee had a duty of care to explicitly inform the employee of the reason for dismissal. Saunders C confirmed that I was not provided any reason for my dismissal at the time I was dismissed, paragraph 19.’ [13] The Appellant considered Commissioner Saunders erred in his conclusions on the Code by relying not on Previsic but on Pinawin v Domingo. The Appellant said11 “Yes. So Saunders C has relied on the Full Bench decision of Pinawin v Domingo, which has found that as a small business employer knew the respondent well, there was no need to have a discussion about the reason for termination. In the Pinawin v Domingo matter, the applicant was a long-term friend, paragraph 9, however in this matter, I Steven Guthrie, have only known Mr Warren Pulbrook since I commenced employment with Brook Motors; that is, 19 months of the date of my dismissal. Mr Warren Pulbrook was my boss and work associate. He was not my friend. Therefore the decision in Pinawin v Domingo is not a valid reason for not discussing the reason for my dismissal. Saunders C has also neglected to take into account that an employee should be given the opportunity to defend the reason for an alleged misconduct, Wadey v YMCA Canberra [1996] cited in Dover Ray v Real Insurance Pty Ltd [2010], paragraph 85.” [14] The Appellant went on to say12: ‘… Mr Warren Pulbrook did not ask me about the matter and if he had asked me about it, as he had already made his decision to terminate my employment, this did not afford me an opportunity to defend my conduct, therefore the decision by Saunders C f_p_n_4_ [2016] FWCFB 2859 5 establishes a dangerous precedent that small business employers do not have to provide a reason for dismissal or validly discuss the reason for dismissal with employees. Based on Brook Motors' failure to follow the requirements of the Small Business Fair Dismissal Code and the Fair Work Act and the precedent that Saunders C's decision makes, it is therefore in the public interest to allow an appeal of the decision in the matter of U2015/13054 Steven Guthrie v A J and T Pulbrook Pty Ltd.’ Consideration [15] This appeal is one to which s.400 of the Fair Work Act 2009 (FW Act) applies.13 Section 400 provides: ‘(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so. (2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.’ [16] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as ‘a stringent one’.14 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.15 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest: ‘... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.’16 [17] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.17 [18] Section 385 of the FW Act provides, in effect, that a dismissal is not unfair if the Commission is satisfied that it was consistent with the Code. [19] The Code provides: ‘Commencement The Small Business Fair Dismissal Code comes into operation on 1 July 2009. Summary dismissal f_p_n_5_ [2016] FWCFB 2859 6 It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report. Other dismissal In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job. The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations. Procedural matters In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity. A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.’ [20] It is clear that the dismissal in question is covered by the section of the Code entitled ‘Summary Dismissal’. How the Commission should approach dismissals such as this was dealt with in Pinawin. We are satisfied that the Commissioner correctly followed the approach as set out in that decision. In particular, he had regard to the fact that the respondent did not have a discussion with the appellant about the perceived serious misconduct. Consistent with Pinawin he noted that it would normally be necessary to hold such a discussion in order to hold a belief on reasonable grounds that an employee had engaged in conduct sufficiently serious to justify immediate dismissal. However, he considered that for a number of specific reasons this was not necessary in what he described as the unusual circumstances of this case. While it may have been prudent for the respondent to have sought the appellant’s explanation for what had occurred, there is no explicit requirement under the Code to hold a discussion with a dismissed employee. It is not possible to predict the manner in which an employer can come to a belief on reasonable grounds or to set down rigid rules about how this might occur. We can see no arguable case of appealable error in his reasoning in this regard. f_p_n_6_ [2016] FWCFB 2859 7 [21] We note that the other decisions referred to by the appellant, such as Presivic, do not concern the Code. The matters set out s.387 of the FW Act concerning whether a dismissal was harsh, unjust or unreasonable have no application where a dismissal by a small business employer is consistent with the Code. [22] We are not satisfied that it would be in the public interest to grant permission to appeal. Accordingly, we refuse permission to appeal and the application is dismissed. SENIOR DEPUTY PRESIDENT Appearances: The Appellant, Mr S Guthrie, appeared for himself. [There was no appearance for the respondent.] Hearing details: Sydney. 2016. April 13. Printed by authority of the Commonwealth Government Printer <Price code C, PR580091> 1 [2016] FWC 914. 2 Ibid [4]. 3 Ibid [14]. 4 [2012] FWAFB 1359. 5 [2016] FWC 914 [31]. 6 Ibid [39]. 7 Ibid [43]. 8 Ibid [48]. 9 Ibid [52]. 10 PN13. 11 PN39-PN40. 12 PN42. 13 See Australian Postal Corporation v Gorman [2011] FCA 975 [37]. 14 (2011) 192 FCR 78 [43]. 15 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 [44]-[46]. f_p_n_7_ [2016] FWCFB 2859 8 16 [2010] FWAFB 5343 [27]. 17 Wan v AIRC (2001) 116 FCR 481 [30]. f_p_n_8_