Albeer Mekhael v Motor One Garage Pty Ltd [2024] FWC 1653

1 Fair Work Act 2009 s.394 - Application for unfair dismissal remedy Albeer Mekhael v Motor One Garage Pty Ltd (U2024/3427) COMMISSIONER RIORDAN SYDNEY, 3 JULY 2024 Application for an unfair dismissal remedy [1] On 25 March 2024, Mr Albeer Mekhael (the Applicant) filed an application with the Fair Work Commission (the Commission) seeking a remedy for an alleged unfair dismissal pursuant to section 394 of the Fair Work Act 2009 (the FW Act). The Applicant was dismissed by Motor One Garage Pty Ltd (the Respondent) on 5 March 2024. [2] In its Form F3 – Employer Response, the Respondent raised a jurisdictional objection to the application on the basis that it is a small business employer and had complied with the Small Business Fair Dismissal Code (the Code). [3] This decision determines the jurisdictional objection only. Background [4] Some time between 26 and 29 February 2024, a customer attended the Respondent’s car dealership. This customer diverted customers away from the yard and was making threats against the dealership. Police were called to remove the customer from the premises. [5] During these events, it was discovered that the customer had been sold the Applicant’s mothers’ car that was subject to an ‘encumbrance’, which resulted in the customer being unable to be paid an insurance claim that she made on the vehicle. [6] The customer later published a ‘1 out of 5 stars’ review against the Respondent’s dealership. [7] Although this review was removed, the same review was published again on 4 March 2024. [8] The Respondent allegedly arranged a meeting with the Applicant on 5 March 2024 to discuss these issues, however, the Applicant packed up his belongings and walked out of the car yard and did not attend the meeting. There is some debate as to whether or not the Applicant [2024] FWC 1653 DECISION -- 1 of 10 -- [2024] FWC 1653 2 was dismissed by the Respondent or whether the Applicant had resigned. What is not in doubt, is that the Applicant’s employment with the Respondent ceased on that date. [9] The jurisdictional objection was heard by Video via Microsoft Teams on Friday, 21 June 2024. The parties were granted leave pursuant to s.596 of the FW Act to be represented at the Jurisdictional Hearing. The Applicant was represented by Mr Matthew Twyford, Twyford Law. The Respondent was represented by Mr Wilson Chan, Solicitor – Sole Practitioner. [10] The Applicant gave evidence on his own behalf at the Jurisdictional Hearing. [11] The following persons gave evidence for the Respondent at the Jurisdictional Hearing: • Mr Rahul Anand, Director; and • Mr Stephen Cham, Manager and Supervisor. Statutory Provisions [12] The relevant sections of the FW Act relating to an unfair dismissal application are: “396 Initial matters to be considered before merits The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application: (a) whether the application was made within the period required in subsection 394(2); (b) whether the person was protected from unfair dismissal; (c) whether the dismissal was consistent with the Small Business Fair Dismissal Code; (d) whether the dismissal was a case of genuine redundancy. 381 Object of this Part (1) The object of this Part is: (a) to establish a framework for dealing with unfair dismissal that balances: (i) the needs of business (including small business); and (ii) the needs of employees; and (b) to establish procedures for dealing with unfair dismissal that: (i) are quick, flexible and informal; and (ii) address the needs of employers and employees; and (c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement. (2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned. Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95. 388 The Small Business Fair Dismissal Code -- 2 of 10 -- [2024] FWC 1653 3 (1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code. (2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if: (a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and (b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.” [13] The Small Business Fair Dismissal Code provides:- “The Code Summary Dismissal 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, -- 3 of 10 -- [2024] FWC 1653 4 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.” [14] The Fair Work Regulations 2009 provides the meaning of ‘serious misconduct’ as follows: “1.07 Meaning of serious misconduct (1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning. (2) For subregulation (1), conduct that is serious misconduct includes both of the following: (a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment; (b) conduct that causes serious and imminent risk to: (i) the health or safety of a person; or (ii) the reputation, viability or profitability of the employer’s business. (3) For subregulation (1), conduct that is serious misconduct includes each of the following: (a) the employee, in the course of the employee’s employment, engaging in: (i) theft; or (ii) fraud; or (iii) assault; or (iv) sexual harassment; (b) the employee being intoxicated at work; (c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment. (4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable. (5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.” -- 4 of 10 -- [2024] FWC 1653 5 (My emphasis) Respondent’s Submissions [15] The Respondent submitted that the Applicant was not unfairly dismissed, as the Applicant’s dismissal was consistent with the Code. [16] The Respondent submitted that at the time of the Applicant’s dismissal, it had 9 permanent employees, inclusive of the Applicant, and was therefore a small business for the purposes of the Code. [17] The Respondent submitted that in respect of a summary dismissal, the Code states that: “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”. [18] The Respondent cited the decision in John Pinawin T/A RoseVi.Hair.Face.Body v Mr. Edwin Domingo [2012] FWAFB 1359, in which the Full Bench of the Commission identified the following two limbs in determining whether or not the Dode had been satisfied: a. “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”, and; b. “It is necessary to consider whether that belief was based on reasonable grounds.” [19] The Respondent submitted that ‘serious misconduct’ is defined in the Fair Work Regulations 2009 (Cth) as having its ordinary meaning and includes: a. “Wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment”, and; b. “conduct that causes serious and imminent risk to the health or safety of a person or the reputation, viability or profitability of the employer's business.” [20] The Respondent submitted that for the purposes of serious misconduct in the Code, it is not necessary for the Commission to determine whether the employer was correct in its belief, and it is not necessary for the Commission to determine that the employee intended to do anything wrong. [21] With regards to the conduct of the Applicant, the Respondent submitted that it had caught the Applicant trying to sell his personal vehicle to a customer during work hours. The Respondent submitted that it had given “stern instructions” to the Applicant against any personal sales and warned him of the severity of “operating a conflicting business”. -- 5 of 10 -- [2024] FWC 1653 6 [22] Following the incident that occurred between 26 and 29 February 2024, the Respondent submitted that the Applicant had assured the Respondent that he would “resolve all issues” regarding the sale of his personal vehicle. However, the Respondent submitted the Applicant failed to do so. [23] Subsequently, the Applicant failed to attend the meeting scheduled to discuss these matters. [24] The Respondent submitted that: “a. The Applicant had breached the following two lawful and reasonable instruction (sic) from the Respondent: i. Not to sell any personal vehicles during the Applicant’s time of employment; and ii. Not attending the meeting specifically scheduled for on the morning of 5 March 2024 to discuss the resolution of the issues the Applicant had caused. b. The Applicant breached his duty to act in good faith & loyalty towards their employer and his duty of fidelity by using his position to poach and access the Respondent’s customers; c. The Applicant damaged the reputation and goodwill of the business by misrepresenting his a (sic) private and personal sale (either wilfully or as a result of negligence or recklessness) to innocent third party who has since left a damning review and will proceed with legal proceedings against the Respondent; d. The Applicant destroyed all trust and confidence in the employment relationship between the parties”. [25] The Respondent submitted that it had made adequate and proper enquiries with the Applicant, other staff members, and the customer to ascertain the “reasonable belief” of the above matters. [26] The Respondent submitted, therefore, the Applicant’s summary dismissal for serious misconduct was consistent with the Code. The Respondent submitted that the Applicant’s application should be dismissed. Applicant’s Submissions [27] The Applicant submitted that his dismissal was not carried out in compliance with the Code, and therefore, the Commission has jurisdiction to hear his substantive unfair dismissal application. [28] The Applicant submitted that he did not engage in the conduct alleged, and further, that he was never given any ‘warnings’ by the Respondent. -- 6 of 10 -- [2024] FWC 1653 7 [29] Nevertheless, the Applicant submitted that none of the conduct alleged would amount to serious misconduct to justify summary dismissal, including under the Code. The Applicant submitted that the alleged conduct was not ‘serious misconduct’ within the meaning of the Fair Work Regulations. [30] The Applicant submitted that the Respondent has not shown any “causal nexus” between the alleged ‘serious misconduct’ and the actions of the customer, or how it has affected the business with such urgency as to warrant the Applicant’s summary dismissal. The Applicant submitted that one Google Review could not cause serious harm to the Respondent business, where it had hundreds of reviews. [31] Further, the Applicant submitted that the alleged conduct does not relate to the employment. The Applicant submitted that there were no employment terms breached, and the alleged conduct was not inconsistent with the continuation of his employment with the Respondent. [32] The Applicant submitted that if the Commission does find that he engaged in the alleged conduct, which he denied, the conduct was neither deliberate nor wilful. [33] The Applicant maintained that he did not engaged in any conduct that would have caused any serious harm or imminent risk to the health and safety of a person, nor the reputation, viability, or profitability of the Respondent’s business. [34] The Applicant submitted that the Respondent could only have summarily dismissed him if they believed on reasonable grounds that his conduct was sufficiently serious to justify immediate dismissal However, the Applicant submitted that Respondent could not have held any genuine or reasonable belief in this regard. The Applicant submitted that the Respondent made no real enquiries of the customer, the police, other employees, or the Applicant himself. [35] The Applicant also submitted that the Code checklist had been completed by the Respondent one month after the Applicant’s termination. The Applicant submitted that the Respondent has not provided any reasons as to why this was done one month after the event. [36] Further, the Applicant submitted that the letter of termination had already been prepared ahead of the meeting planned for 5 March 2024. He submitted, therefore, there cannot have been any genuine consideration by the Respondent of its consultation obligations. Respondent’s Submissions in Reply [37] In response, the Respondent submitted that the entirety of the Applicant’s conduct was sufficiently serious to justify immediate dismissal, and that the Respondent’s belief was based on reasonable grounds. [38] The Respondent submitted that it takes negative reviews “incredibly seriously given it is one of the main sources of customers and is vital for the growth and continuing goodwill of the business”. -- 7 of 10 -- [2024] FWC 1653 8 [39] The Respondent submitted that the conduct did relate to the Applicant’s employment, namely, following lawful and reasonable instructions. [40] The Respondent maintained that the conduct was serious misconduct within the meaning of the Fair Work Regulations, however, in the alternative, it was otherwise sufficiently serious to justify the immediate dismissal in accordance with the Code. [41] The Respondent submitted that it made adequate and proper enquiries with the Applicant, other staff members and the customer to ascertain its ‘reasonable belief’ regarding the Applicant’s misconduct. [42] The Respondent maintained that it was genuine in providing “another chance” to the Applicant, had he attended the meeting on 5 March 2024 and resolved the outstanding issues he had caused. [43] For all of the above reasons, and those provided in its initial submissions, the Respondent maintained that the dismissal was consistent with the Code and that the application should be dismissed. Consideration [44] I have taken into account all of the submissions that have been provided by the parties and I have attached the appropriate weight to the evidence of the witnesses. [45] The Respondent has raised a jurisdictional objection on the basis that they are a small business and complied with the Code. However, for the Respondent to rely on the Code, they must comply with its provisions. [46] I am satisfied that the Applicant sold his mother’s car to the customer. Whilst the Applicant may not have initiated the original approach or viewing of the car, I am satisfied that he concluded the sale. The Applicant was identified by the customer in discussions with Mr Anand, was the person the customer was shouting at during the confrontation in the caryard and received the direct payment from the customer via EFT into his personal bank account. I have taken this into account. [47] The disgruntled customer returned to the Respondent’s caryard after failing to obtain her money from an insurance claim. The customer was allegedly irate and threatened to smash the windows of the cars on the Respondent’s yard with a gun. The customer was allegedly screaming at the Applicant. Further, the disgruntled customer warned other customers in the yard by saying words to the effect of: “Don’t buy a car from Motor One Garage, they are scammers and thieves”. It is my understanding that the potential customers who heard this comment did not buy a car from the Respondent. I have taken this into account. -- 8 of 10 -- [2024] FWC 1653 9 [48] The Respondent relies, in some part, on positive Google reviews to promote its business. I accept that the negative review it received due to this ‘transaction’ had the capacity to damage its reputation with an unknown number of potential customers. The customer posted on Google: “!! stay away from them !! !! motor one sold me a car I paid cash it has since been totalled from hail damage and I come to find out they have sold me a car with finance on it I am now out 12 grand !!!! stay away rude arrogant aggressive and they are handing out peoples private information”. I have taken this into account. [49] Further, the Respondent’s Director tried to resolve the issue personally and received the following response from the customer: “You need to realise your workers had the option to correct this by either the money, my insurance was going to pay me or a suitable Car. There is no way a Mercedes-Benz is a suitable car for my lifestyle fact, I bought that car on your life from your employees that’s all I need I will be seeking legal action as well as teaming up with the address. Your employees gave me at the lot which I have recording off of previous customers information which really is not safe so we will go down this road and I won’t stop and might review is 100% factual. They had the chance, and it’s now gone, I’ll see you in court”. I have taken this into account. [50] There is no suggestion that the Applicant intended for this transaction to result in damage to the Respondent’s reputation, but it is the unfortunate result of his actions. I am satisfied and find that the Respondent believed that the result of the Applicant’s action in selling his mother’s car to the customer created a serious and imminent risk to the reputation of the Respondent. Conclusion [51] Inappropriately or otherwise, society has attached a negative stigma to the occupation of used car salespeople. Whilst there is not a skerrick of evidence that the Respondent or its employees have acted inappropriately in any manner, a review or commentary which accuses the Respondent of being a “scammer or thief” or that its employees are “rude, aggressive or that they leak customers private information” has the capacity to have a seriously detrimental effect on the Respondent’s reputation. The Applicant’s conduct, in selling his mother’s car to this customer, resulted in these adverse reviews and commentary. [52] As a result, I am satisfied and find that the Applicant has acted in a manner which satisfies the definition of ‘serious misconduct’ for the purposes of the Code. [53] As a result, the Code has been satisfied and the application must therefore fail. [54] The jurisdictional objection is upheld. -- 9 of 10 -- [2024] FWC 1653 10 [55] The substantive application is dismissed. [56] I so Order. 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