WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2015 WAIRC 00921 CORAM :Commissioner J L Harrison HEARD : Thursday, 20 August 2015 DELIVERED : tuesday, 6 october 2015 FILE NO. : B 34 OF 2015 BETWEEN : Aaron Logan Applicant AND MR, Dave Caldwell Peel Tinting- (formally known as AAA windscreens) Respondent Catchwords : Industrial Law (WA) - Contractual benefits claim - Entitlements under contract of employment - Claim for payment of pay in lieu of notice, annual leave accrual and superannuation on notice payment - No entitlement to benefits claimed - Application dismissed Legislation : Industrial Relations Act 1979 s 7, s 26(1)(a), s 27(1) and s 29(1)(b)(ii) Result : Dismissed Representation: Applicant : In person Respondent : Mr F van Wyk (of counsel) Case(s) referred to in reasons: Ahern v Australian Federation of Totally and Permanently Incapacitated Ex-Service Men and Women (WA Branch Inc) (1999) 79 WAIG 1867 Balfour v Travel Strength Ltd (1980) 60 WAIG 1015 Belo Fisheries v Froggett (1983) 63 WAIG 2394 Bridge Shipping Pty Ltd v Grand Shipping SA and Anor [1991] 173 CLR 231 Hotcopper Australia Ltd v David Saab (2001) 81 WAIG 2704 Newmont Australia Ltd v The Australian Workers' Union, West Australian Branch, Industrial Union of Workers (1988) 68 WAIG 677 Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307 Rai v Dogrin Pty Ltd (2000) 80 WAIG 1375 Waroona Contracting v Usher (1984) 64 WAIG 1500 === REASONS FOR DECISION === ¶1 On 17 February 2015 Aaron Logan (the applicant) lodged this application claiming that he is owed benefits under his contract of employment with MR, Dave Caldwell Peel Tinting- (formally known as AAA windscreens) [sic]. ¶2 The applicant is seeking the following payments: 1. $5,384 gross being four weeks’ pay in lieu of notice ($1,346 x 4 weeks). This amount was calculated on the applicant’s rate of pay prior to being demoted on 13 August 2014; 2. $410.53 gross in annual leave accrual over the four week notice period (3.05 hours per week x 4 weeks = 12.2 hours x $33.65 per hour = $410.53); and 3. $498 in superannuation entitlements for the four week notice period ($124.50 x 4 weeks). Name of the respondent ¶3 During the hearing it became apparent that the respondent was incorrectly named. Given the Commission’s powers under s 27(1) of the Act and as it is appropriate for the respondent to be correctly named, I will issue an order that MR, Dave Caldwell Peel Tinting- (formally known as AAA windscreens) be deleted as the named respondent in this application and be substituted with AAA Sunsmart (WA) Pty Ltd trading as AAA Windscreens and Tinting Mandurah (the respondent) (see Rai v Dogrin Pty Ltd (2000) 80 WAIG 1375 and Bridge Shipping Pty Ltd v Grand Shipping SA and Anor [1991] 173 CLR 231). Background ¶4 The applicant worked for the respondent as a window tinter from November 2009 until he was summarily terminated on 20 August 2014. The applicant’s weekly rate of pay at termination was $1,118 gross. As second-in-charge to the respondent’s Managing Director Mr David Caldwell, the applicant was required to open the respondent’s premises and allocate work to the two other employees who worked for the respondent in Mr Caldwell’s absence. The applicant was demoted from this position one week prior to his termination. ¶5 Mr Caldwell spoke to the applicant on a number of occasions about not turning up to work on time and the applicant was given written and verbal warnings about these absences. Exhibit R1.1 contains the dates of the applicant’s absences without notice and with no reason, covering ten days between 4 October 2013 and 20 August 2014. Apart from the absence of one full day the other absences related to the applicant not turning up to work at his required start time of 8.00 am. Exhibit R1.1 reads as follows: 4th Oct 2013 - Absent for 8 hours 31st Dec 2013 - Absent for 2.30 hrs 18th Mar 2014 - Absent for 2 hrs 5th May 2014 - Absent for 30 mins 20th Jun 2014 - Absent for 30 mins 10th Jul 2014 - Absent for 55 Mins 16th Jul 2014 - Absent for 1.55 hrs 23rd Jul 2014 - Absent for 1.50 hrs 28th Jul 2014 - Absent for 1 hr 20th Aug 2014 - Absent for 25 mins (Exhibit R1.1) ¶6 The applicant received three written warnings during his employment with the respondent (exhibits R1.2, R1.3 and R1.4). The first warning given to the applicant confirms a discussion held on 7 October 2013 between the applicant and Mr Caldwell about the applicant being absent from work without notice on 4 October 2013. This letter also refers to the applicant being absent without notice on 31 December 2013. Mr Caldwell told the applicant at the time that this was his second verbal warning and first formal warning and his employment may be terminated if his conduct did not improve and if he is again absent from the workplace without notice. On 16 July 2014 the applicant was given a second warning stating that on that date he had been absent from work without notice. Previous dates that he had been absent included in the letter were 10 July 2014, 20 June 2014, 5 May 2014, 18 March 2014, 31 December 2013 and 4 October 2013. The letter stated that the applicant was being given his fourth verbal warning and his second formal warning. The applicant was told his employment would be terminated if his conduct did not improve and he was again absent without notice. On 13 August 2014 the applicant received a further warning letter. The applicant was warned about lounging on the couch at the respondent’s premises for 30 minutes when Mr Caldwell was not at work. The applicant told Mr Caldwell he had no explanation for this behaviour and Mr Caldwell told the applicant that this was his first verbal warning and first warning letter for this conduct and his employment may be terminated if his conduct does not improve. ¶7 On 20 August 2014 the applicant was terminated with immediate effect. The letter of termination given to the applicant reads as follows: I regret to inform you that your employment with AAA Windscreens and Tinting Mandurah is terminated, effective immediately. Due to being absent this morning for a period of 25 minutes, and continued absences from place of employment without notice, we are unable to continue your employment. We have extended our latitude for you to help improve in this area, however this is the 9th absence without notice in 10 months, and the 4th occasion since your 2nd written warning on the 16th July 2014 which clearly stated any further absences could terminate your employment (sic). We consider that your actions constitute serious misconduct warranting instant dismissal. It is unfortunate as your work ethic can be very good. However you are letting yourself, myself and our team down with being absent. All outstanding annual leave entitlements will be paid in full on the next payment cycle. A payslip will be mailed indicating any final payments. I regret any inconvenience caused and if I can be of any assistance please contact me directly. (Exhibit R1.5) Evidence Applicant ¶8 The applicant stated that even though he had been late to work on nine occasions over ten months in 2013 and 2014 this only occurred in his last year of employment. Prior to that he was working the times and hours required of him and he was only occasionally late for work. The applicant gave evidence that after he finished working with the respondent he was diagnosed with an illness which may have contributed to not attending work on time. Respondent ¶9 Mr Caldwell spoke to the applicant about his absences without notice and reason and he gave him a number of verbal and written warnings about his conduct. He also told the applicant that his ongoing absences may result in his termination. In the week before the applicant was terminated he was demoted from being second-in-charge of the respondent’s operations and Mr Caldwell stated that the applicant’s absences impacted on the respondent’s business. If the applicant did not attend work Mr Caldwell was unable to plan the work to be done each day and the respondent’s profitability was affected because it was hard to schedule jobs if he did not know when the applicant would be attending work. Mr Caldwell said that he gave the applicant several opportunities to remedy not turning up to work on time given his length of service however the applicant continued to be late for work. Mr Caldwell said the applicant was disappointed with his conduct and he told him he would improve but he did not do so. Mr Caldwell confirmed that the applicant was a good employee up to the last year of his employment with the respondent. Submissions Applicant ¶10 The applicant claims that he should have been terminated on notice. He was absent due to stress and illness and he was not attending work late because he did not want to attend work on time. Respondent ¶11 The respondent argued that it had good reason to summarily terminate the applicant. The applicant repudiated his contractual obligations to the respondent on an ongoing basis by consistently being late to work and these absences impacted on the respondent’s profitability. The applicant was a senior employee and had responsibilities which were integral to the functioning and sustainability of the respondent’s business. When the applicant did not come to work on time and gave no excuse to the respondent for not attending work on time his misconduct was wilful and deliberate and the applicant ignored the numerous opportunities he was given to improve his attendance. The respondent therefore had to bring the situation to a head by terminating the applicant in a summary manner. Consideration Witness Credit ¶12 The evidence given by the applicant and Mr Caldwell with respect to the facts relevant to this case was not in contest and in my view both witnesses gave their evidence honestly and to the best of their recollection. I therefore accept their evidence. Are the benefits the applicant is claiming due to be paid to him? ¶13 The claims before the Commission are for an alleged denial of contractual benefits. For an applicant to be successful in such a claim a number of elements must be established. The claim must relate to industrial matters contained in s 7 of the Act and the claimant must be an employee. The claimed benefits must be contractual benefits to which there is an entitlement under the applicant’s contract of service, the benefits claimed must not arise under an award or order of this Commission and the benefits must have been denied by the employer: Hotcopper Australia Ltd v David Saab (2001) 81 WAIG 2704; Ahern v Australian Federation of Totally and Permanently Incapacitated Ex-Service Men and Women (WA Branch Inc) (1999) 79 WAIG 1867. The meaning of ‘benefit’ has been interpreted widely in this jurisdiction: Balfour v Travel Strength Ltd (1980) 60 WAIG 1015; Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307. ¶14 In determining whether a contractual entitlement is due to the applicant the onus is on the applicant to establish that the claims of benefits to which he is entitled arise under his contract of employment. The Commission must determine the terms of the contract of employment and decide whether the claims constitute benefits which have 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). ¶15 I find that at all material times the applicant was an employee of the respondent employed under a contract of service. I find that his claims for the payment of notice and associated benefits are industrial matters under s 7 of the Act as they relate to payments the applicant claims are due to him arising out of his 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 it was a term of the contract of employment that the applicant is entitled to the payments he is seeking. ¶16 The applicant was summarily terminated without notice for serious misconduct. The onus is on the applicant to demonstrate that his dismissal was unfair on the balance of probabilities, however, 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, 679). ¶17 I find that even though the applicant has an entitlement under his contract of employment to be terminated on notice the respondent has demonstrated that it had good reason to summarily terminate the applicant. I find that the applicant misconducted himself by consistently refusing to meet the obligations placed on him as a senior and trusted employee to turn up to work on time and ensure that the respondent’s operations remained financially viable and I find that the applicant’s unexplained and ongoing conduct compromised the respondent’s capacity to plan daily work commitments and operate productively. Even though the applicant was demoted in the week prior to his termination he continued to attend work late without notice or reason on one more occasion. ¶18 During a 10 month period in 2013 and 2014 the applicant did not attend work on time on 10 occasions without notice or explanation. In one instance the applicant did not turn up to work for the entire day (see exhibit R1.1). The applicant’s absences in some instances were lengthy and they occurred at the start of the day when the applicant may have been required to open the respondent’s premises and organise the respondent’s daily work schedule. I find that as a senior employee of the respondent he was an integral part of the respondent’s business and its operations and the applicant was employed in a position of trust as second-in-charge of the respondent’s business. In this role the respondent relied on the applicant to open the respondent’s premises in Mr Caldwell’s absence and the applicant was expected to allocate work to the respondent’s two other employees at the start of the day and this work could not proceed if he did not turn up to work on time. Additionally, the respondent’s customers were inconvenienced if the respondent’s premises were not opened on time. ¶19 I find that the applicant was provided with procedural fairness given the manner of his termination. The applicant was given several warnings throughout 2013 and 2014 both written and verbal about not arriving late to work and he was told that his conduct was unacceptable. The applicant was also told by Mr Caldwell on at least two occasions that he was on notice that unless he improved his attendance his ongoing employment with the respondent was in jeopardy. ¶20 When taking into account s 26(1)(a) of the Act considerations and equity, good conscience and substantial merit I find that as the respondent had good reason to summarily terminate the applicant his claims for notice, annual leave and superannuation fail. An order will issue that this application be dismissed.