Where an employer is unable to demonstrate a “valid reason” for termination the Fair Work Commission will almost invariably find that there has been an unfair dismissal. However, a recent decision of the Fair Work Commission sends a timely reminder that a valid reason for dismissal by itself will not exonerate an employer from an unfair dismissal claim.
On 9 April 2014 Oliver Charmers was dismissed from his position as Key Account Manager at EMO Trans Australia for poor sales performance. Mr Chalmers subsequently filed an unfair dismissal claim alleging that his dismissal was harsh, unjust and unreasonable within the meaning of s. 387 of the Fair Work Act.
In handing down his decision, Commissioner Cambridge noted that “the evidence has clearly established that the deteriorating sales performance of the applicant represented the reason for the dismissal of the applicant” and that “there was little basis upon which it could be argued that the underperformance of the applicant did not represent a valid reason for his dismissal”.
However, Commissioner Cambridge also found that the employer:
did not provide Mr Charmers with any written notification for his dismissal, and
did not provide Mr Charmers with an opportunity to respond to the reason for dismissal, and
did not provide Mr Charmers with an opportunity to have a support person, and
did not provide Mr Charmers with a warning about his unsatisfactory performance.
The Commissioner subsequently noted that “the determination of this claim for unfair dismissal would logically involve a requirement to examine, evaluate and balance the various procedural deficiencies against the valid reason for dismissal”.
Ultimately the Commissioner determined that “the dismissal of the applicant was for valid reason involving unsatisfactory work performance. The dismissal arose following an entirely unreasonable and unjust process which did not properly identify the level of performance required of the applicant within a specified time frame, and which if not achieved, would result in dismissal. Further, the manner in which the dismissal was implemented was unacceptable. Consequently, when these various factors have been carefully evaluated and balanced, the dismissal of the applicant has been found to have been harsh, unjust and unreasonable”.
The Commissioner awarded Mr Charmers $11,250 is financial compensation.
Whilst, the existence of a “valid reason” for dismissal is a key consideration in establishing the fairness of a termination, the s.387 of the Fair Work Act provides the following criteria that must be take into account in an unfair dismissal case:
whether there was a valid reason for the termination related to the employee’s capacity or conduct including its effect on the safety and welfare of other employees; and
whether the employee was notified of that reason; and
whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
any unreasonable refusal by the employer to allow the employee to have a support person present to assist at any discussions relating to the dismissal; and
if the termination related to unsatisfactory performance by the employee — whether the employee had been warned about that unsatisfactory performance before the dismissal; and
the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely impact on the procedures followed in effecting the dismissal; and
any other matters that FWA considers relevant.
It should be noted that not all procedural deficiencies, either singularly or in combination, will result in the Fair Work Commission determining that a particular dismissal was unfair. The Commission will want to be satisfied that there has been “a fair go all round” and will weigh up and balance the competing factors of each particular set of circumstances.