Champness v OneCard Australia Pty Ltd [2005] QIRC 42 (2005) 178 QGIG 422

[Extract from Queensland Government Industrial Gazette, dated 29 April, 2005, Vol. 178, No.18, pages 422-424] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Paul Noel Champness AND OneCard Australia Pty Ltd (No. B1577 of 2004) COMMISSIONER EDWARDS 13 April 2005 Termination of Employment – Dismissal – Application for Reinstatement – Evidence – Service Agreement – Dismissal Harsh, Unjust and Unreasonable – Compensation Awarded. DECISION This is an application filed by Paul Noel Champness (the applicant) on 19 October 2004 by which he seeks reinstatement in relation to his alleged unfair dismissal by OneCard Australia Pty Ltd (the respondent). The applicant was employed by the respondent from 7 June 2004 until 5 October 2004. Mr C. O’Kelly, Chief Executive Officer, argued that the dismissal was based on and carried out in accordance with a Service Agreement dated 7 June 2004. It was submitted the reason for the dismissal was that the applicant failed to meet Key Performance Indicators (KPIs) in his position of Sales Manager which was a performance-based arrangement selling licences. The applicant joined the staff after being contacted by a representative of the respondent. At the time the applicant was in employment but was interested in the OneCard concept and wished to ensure that the new position was for at least one year’s duration. As a result of discussions a Service Agreement was prepared which included the following critical components: (1) A yearly salary of $80,000 plus mobile telephone and fuel expenses; (2) One month’s probation; (3) One year’s tenure; and (4) One month’s notice of termination. The applicant accepted the terms of the Service Agreement and signed it on 7 June 2004. The Service Agreement was not a registered industrial instrument. A significant factor during the hearing was the argument regarding KPIs. By statement dated 2 December 2004 Ms O’Kelly stated: “A contract was signed on 7 June 2004 with an attached set of KPIs which related to the Sales Manager’s position”. During evidence the Commission advised Ms O’Kelly that there was no reference in the Service Agreement to the sales targets prescribed by the KPIs and there were no attachments to the Service Agreement relating to KPIs. Furthermore, the only reference in the Service Agreement relating to KPIs was in paragraph 5 – Review of KPIs and paragraph 13 – Failure to meet KPIs. In response she advised that KPIs were set by the applicant whereas in her statement (Exhibit 4) she outlined that “included in these KPIs were a strict set of reporting and training processes which kept the Head Office informed of the progress of the Gold Coast Office.”. Except for references in minutes of management strategy meetings, in which there is no agreement regarding KPIs, Ms O’Kelly was unable to provide the Commission with an agreed document regarding the KPI targets. In regard to the KPIs the respondent was given ample opportunity during the discovery process and during the hearing to provide the Commission with a copy of the KPIs to which reference is made in the Service Agreement. Furthermore, Ms O’Kelly was in a position to attach them to her statement. Ms O’Kelly also made reference in her statement to discussions with the applicant whereby she stated that as a result of a lack of performance it was decided to move the applicant into the sale of licences. In cross-examination she was unable to advise when these discussions took place. In response to a question from the Commission regarding a diary she advised, “I didn’t bring anything with me”. As already mentioned the respondent had ample opportunity to provide all documents including the diary during the discovery process. In relation to minutes of manager’s meetings, Ms O’Kelly had difficulty in understanding the questions relating to the sale of a specific number of licences. Finally she accepted that the document did not state that the applicant would sell 40 licences. In relation to the salary of $80,000.00 per year, Ms O’Kelly agreed in evidence that the amount was divided by 52 irrespective as to when the applicant was on leave. During questions from the applicant under cross-examination she responded on the transcript as follows: -- 1 of 3 -- 2 “So, why did you say in this statement – well, what’s the relevance of it in this statement of you paying me when I was away? Well, we didn’t have to pay you. You were on a contract. Well, why didn’t you have to pay me? Because you weren’t working at that stage. You were on holidays and you told me you were going on holidays. Does the contract say, ‘We’re not going to pay you holidays. We’re not going to pay you sick pay?’ No, it’s not a – does the contract exclude those issues? No, it’s 80,000 a year. Yes, so 80,000 and you were paying me the rate of 80,000 divided by 52? I believe so, yes. So why wouldn’t you pay me every week at that rate, not just some weeks? So, if you decide to go away for three or four weeks we just keep paying you for not doing any work, is that what you’re saying? But that’s the agreement, $80,000 a year divided by 52 and that’s the basis on which I was being paid; is that correct? Yes, it is correct. And you’re saying you shouldn’t pay me, is that correct? What we said we did pay you. But you’ve just said then that you didn‘t need to pay me, you were being generous to me, is that correct? We were being generous to you, Paul. But you were contracted to pay me that amount, is that correct? Yes, it is. It’s 80,000 a year. So, how can that be generous? Wouldn’t that be just an obligation? An obligation can be generosity.”. Ms O’Kelly also took the Commission to alleged discussions regarding the possibility of the applicant investing in the company. However as she indicated this did not eventuate. The Commission is concerned by the tone of her evidence that the failure of the alleged commercial arrangements was a contributing factor to the dismissal. The evidence of Ms O’Kelly lacked substance and she was unable to support her statements by reference to minutes of meetings or company documents. As such the interpretation she placed on the contents of the documents was only limited by the extent of her imagination. As the evidence of Ms O’Kelly is inconsistent and lacks credibility the Commission has weighted it accordingly. The evidence of Mr Worling-Lazignac did not relate to the KPIs that the respondent submitted were attached to the Service Agreement. From the evidence Mr Worling-Lazignac had a good working relationship with the respondent and provided the company with an overview of the operations. In his statement in Exhibit 7 (Paragraph 10) he outlined that the applicant made derogatory and defamatory statements to him about the O’Kelly family and OneCard Australia Pty Ltd. When questioned Mr Worling-Lazignac was unable to support the allegations. Given the lack of particulars and the generality of the evidence, the Commission has weighted his evidence accordingly. The evidence of the applicant can be listed as follows:  upon joining the staff of OneCard Australia Pty Ltd found that the Company had only one full-time sales person;  appointed 3 new sales persons and operated a number of introduction and training sessions;  over a period of time appointed 2 additional sales persons to the team;  on 29 July he was summonsed to Brisbane and told by Sandra O’Kelly that his role had now changed and he was required to establish suitable protocols and documentation for the sale of Area Licences;  on 4 August sent letter of concern to the Directors of the respondent about this unwanted change of role;  undertook the establishment of suitable documentation and information packs for the sale of licences and advertising in a number of publications;  meetings and discussions with the purchaser of an area licence and transfer of the negotiations to Ms O’Kelly;  on 1 October 2004 in company with his wife attended opening of OneCard Australia Pty Ltd on the Sunshine Coast and participated in the associated activities;  whilst at the opening and at the associated activities had discussions with Ms O’Kelly and at no time did she indicate any unhappiness with the operations;  on 6 October received a notice of summary dismissal sent on 5 October 2004; and  at no time had any discussions been held with Ms O’Kelly regarding dissatisfaction with work. The evidence before the Commission is that the letter of 13 August 2004 purported to have been sent by Mr C. O’Kelly to the applicant was never received. In evidence the applicant stated that he had never received any letters or other documents from Mr C. O’Kelly or Ms S. O’Kelly via the postal service. All communications were either by e-mail, fax, telephone or verbally. No evidence was presented by the respondent to suggest the evidence of the applicant was not accurate. The Commission therefore accepts the evidence of the applicant as he was able to answer questions in a firm and succinct manner and presented material in a methodical and responsible manner. The respondent placed reliance on the written Service Agreement by which clause 13(d) stated: “OneCard Australia Pty Ltd may terminate your engagement . . . or be likely to injure the business or reputation of OneCard Australia Pty Ltd.”. Furthermore, s. 83(2) of the Industrial Relations Act 1999 states: -- 2 of 3 -- 3 “(2) Misconduct under subsection (1)(b) includes – (a) theft; and (b) assault; and (c) fraud; and (d) other misconduct prescribed under a regulation.” The Commission is satisfied that even if agreed KPIs were in place and there was a failure to achieve such levels, an employee could not be dismissed under the classification of serious misconduct. Following an examination of the e- mails and upon consideration of the evidence of Ms O’Kelly, the Commission is satisfied that procedural fairness was not extended to the applicant to a level expected under the Industrial Relations Act 1999. The dismissal was harsh, unjust and unreasonable. The Commission accepts the submissions of the applicant that the termination was based on opinion and not supported by facts. Based on the evidence and submissions it is accepted that reinstatement would be impractical as the employer/employee relationship could not be restored. The applicant was employed under an unregistered Service Agreement for a 12 month period at a salary of $80,000.00 per year. It is the submission of the applicant that he treated the minimum of one year’s tenure as a very important element of the Service Agreement. Since the dismissal he has had difficulty in obtaining alternative employment and submits that the respondent should accept responsibility for the subsequent loss of income. The Commission was not provided with a detailed outline of efforts made by the applicant to mitigate his losses since the dismissal and it could be suggested that he has made minimal efforts to obtain alternative employment. It is of concern that in submissions the respondent makes reference to income rather than wages as prescribed by the Industrial Relations Act 1999 as well as a suggestion that the applicant is past retirement age. On considering the amount that should be awarded, the Commission relies upon factors identified in Chenery v Klemzig Nursing Home (1988) 55 SAIR 544 at 551: see for example Barsha v Motor Finance Wizard (Sales) Pty Ltd (2002) 171 QGIG 139. I am satisfied that the respondent did not act in a way that is cognisant of contemporary industrial relations practices and the submissions were not based on the evidence. The Service Agreement was for a minimum of 12 months’ duration and since the dismissal the applicant did not attempt to mitigate his losses to an appropriate level. The Commission has considered all the evidence, submissions and exhibits. The applicant was entitled to payment of four weeks in lieu of notice as the dismissal was not for serious misconduct. After considering all these factors the Commission has decided that a global approach is the most appropriate way to determine an amount of compensation. Accordingly, the Commission awards an amount of $20,000.00 compensation to be paid by OneCard Australia Pty Ltd to Paul Noel Champness within 22 days of the date of release of this decision. There is no order for costs. Order accordingly. K.L. EDWARDS, Commissioner. Hearing Details: 2004 8 December 2005 14 January – Final Submissions Released: 13 April 2005 Appearances: Mr. P.N. Champness, the Applicant. Mr C. O’Kelly on behalf of the Respondent. . Government Printer, Queensland The State of Queensland 2005. -- 3 of 3 --