Australian Industrial Relations Commission

Dec  1273 /97 M Print P5987

Termination of employment

Evidence was given by Mr Wang and Ms Lu on behalf of the respondent and by the applicant and Mr Lewin on his behalf.

The evidence

Mr Wang is the accountant for the respondent company and has held that position since January 1996. He is part of the management group. He gave evidence that the applicant was employed as a technician, primarily to test faulty products returned under warranty and to do the paper work associated with warranty transactions. Mr Wang described this as logging-in work received from customers and logging-out work returned to customers. From the beginning of 1997 the applicant's responsibilities changed in that he was no longer required to test faulty goods as the company adopted a policy of simply returning them to the supplier.

It was late in March 1997 that Mr Wang says he spoke informally to the applicant about his performance after it had been raised in a management meeting. He told him if he could not catch up on his work and if he could not do his job properly he would be in trouble.

At the end of April, Mr Wang stated that he spoke to the applicant again after a discussion with Ms Lu. He told him to identify the priority job and finish it as soon as possible or otherwise he would be really, really in trouble. Mr Wang stated that the discussion in the management meeting had concerned customer complaints about outstanding warranty items. The company policy was to return goods within 14 days. The decision was made to separate out the jobs in order to identify who was doing a good job and who was not.

Mr Wang stated that on the day of the applicant's termination he was told to prepare the applicant's termination payment by Ms Lu. He was still preparing the calculations when the applicant came to see him at about 5.15 p.m. He asked the applicant if he wanted a separation certificate.

Mr Wang also stated that the person whom the applicant saw at his desk when he returned to collect his personal belongings the next day had not been employed to replace him but had been employed to rewrite the program for the warranty system.

The witness was also asked questions about Mr Lewin who had lodged a statement in support of the applicant. He stated that Mr Lewin was employed as a storeman in the warehouse and had nothing to do with the warranty job. He did not have a technical background or understand the warranty system. He gave further evidence about the contents of Mr Lewin's statement.

In cross examination Mr Wang stated that the director of the company was Mr Shu. There had been other directors of the company previously. Mr Wang stated that there were 17 or 18 employees when he started in January 1996. About ten had gone since then. During the nine months that the applicant had been employed about five employees left. The work force remained at about 18 employees.

Mr Wang admitted that he was not involved in the warranty work although he understood the basis of the system. He understood the weakness of the program. He stated that it was not a good program otherwise they would not have had to hire another person to rewrite it.

Mr Wang stated that prior to 1 March 1997 the applicant reported directly to Mr Shu the company's director. After February this year Mr Shu was often in Sydney and from March Ms Lu was the applicant's supervisor. Mr Wang also described the system of work in the warranty department. He agreed that the procedure was changed after Ms Lu became the supervisor so that one employee logged in the returned goods and the other employee logged out goods as they went to the customer.

The witness stated that after March Ms Lu became responsible for hiring and firing in the warranty department. Before this it was a management responsibility.

He named a number of current and previous managers in the company. He was responsible for the payment of wages but was not party to the applicant's employment. It was negotiated between the applicant and Mr Shu. He agreed that the applicant was not given a statement of duties. What he did was discussed between him and the director.

Up until the management meeting of 5 March 1997 the management was not aware who was doing a good job in the warranty department and who was not. At that time the duties were separated. He was aware that the applicant was not performing because he was informed of this by Ms Lu. He also saw the paper work which Ms Lu passed on to him.

Mr Wang was asked about counselling and warning procedures in the company. He described his discussion with the applicant as giving him a hint that management was not happy with his work performance. He stated that if management had a problem with an employee the person would be warned either in writing or orally. A written record of the warning would be kept on the employee's record. After the warning, if they do not improve at all, then the company will terminate them. There were no written assessments of employees after the first three months probationary period.

An employee would be warned if there were complaints from customers or a lot of mistakes. They would be given a certain period to shape up otherwise they would put their career in jeopardy. Mr Wang stated that in the applicant's case he was given two weeks to finish outstanding warranty claims for a company called Z-Tek which was one of their biggest clients. Mr Wang stated that he told the applicant that he had to finish the Z-Tek work or he would be in trouble. It was his evidence that the applicant had responded that it was too much work. He disagreed stating that if the goods were not available he should tell Ms Lu to issue a credit note.

Mr Wang stated that the decision to terminate the applicant was made on the Friday that the applicant had not attended work. He, Mr Wang, was aware that the applicant was not coming in that day. He knew that the applicant had asked another employee to collect his pay for him. Ms Lu spoke to the director on the Friday and told him that she had found two more mistakes made by the applicant. She later got a message from Mr Shu to terminate the applicant. On the Monday he and Ms Lu had discussed how to pay the applicant on termination. He stated that the applicant was paid for the work done by him, plus his holiday pay and three weeks in lieu of notice.

In re-examination Mr Wang was shown various documents which related to warranty work performed by the applicant. These included a record of warranty items for the month of April 1997 [Exhibit R1]. A document prepared by Ms Lu and headed "Warranty for Z-Tek April 1997" [Exhibit R2] and some original queries from Z-Tek about warranty work submitted by them [Exhibit R3].

Ms Lu is an electronics engineer who has been employed by Electronic Resources Australia for a period of two years. Since 1 March 1997 she has been customer services manager, prior to this she worked in accounts and credit control.

She gave evidence that at the end of March 1997 she spoke to the applicant about outstanding warranty work for a major customer, Z-Tek. Z-Tek had faxed a list of outstanding warranty items to Electronic Resources Australia and she asked Mr Stankovic to finish it within two weeks. After two weeks the work was not finished and she gave him another seven days to finish it. At that time she did not tell the applicant that his performance was bad. After he finished the Z-Tek work she asked him to do a job for another major client Connect Australia. After a few days, however, she received a complaint from Z-Tek to say there were still a few outstanding items. Their customer service supervisor came to Electronic Resources Australia and spent an afternoon with her reconciling the account. In the meantime Mr Stankovic was doing the Connect Australia job. By mid April it was not finished and one of the directors of the company came to Electronic Resources Australia to try to reconcile the accounts. It took two hours for another staff member to find the missing paper work. Ms Lu identified [Exhibit R3] as the outstanding list of warranty items from Z-Tek.

She stated that Electronic Resources Australia received 20 or 30 warranty items per week from Z-Tek. Most of them were replaced on time. For some reason the paper work was lost or the employee handling the matter forgot to log the items out. During March and April 1997 the applicant was responsible for logging out returned goods. The company had a 14 day turn around policy on returned warranty goods. It was the log-out person's responsibility to withdraw the items from the warehouse and get them ready for the customer to collect.

It was Ms Lu's evidence that she was made the manager of the warranty department in March because the company was receiving a lot of complaints from customers and this was effecting the business. She was aware of this because of her credit control function. She suggested that they split the work done by the applicant and another employee so that each of them did only one part of the job. In this way they could identify where the problem was.

Ms Lu explained that [R1] was the list of warranty items given to the warehouse by the applicant during April. The document [R2] was a document prepared by Ms Lu after the applicant left which she stated showed a shortfall between items taken from the warehouse for Z-Tek and those received by the customer.

Ms Lu stated that following the incident in April with Connect Australia she spoke to the applicant about the complaints she had received and told him that she did not think that he had done his job properly. She told him that he had to finish all outstanding warranty work. If he still could not do this properly she did not think he could stay. She stated that the applicant's response was to brush aside her concerns.

During March and April each time she got a complaint from a customer she spoke to the applicant. He always told her not to worry, that the complaints were "bullshit". She spoke to Mr Wang about the applicant's attitude.

Ms Lu produced two documents [R4] and [R5] which were the log-in and log-out reports for a company called Digital Valley. It was her evidence that the returned goods were received on 15 January 1997 but not replaced until 6 March 1997. In January the applicant and another employee were both doing log-in and log-out functions. In March the applicant was responsible for logging out replacement items. The return had not been replaced within 14 days in accordance with company policy. From March 1997 she introduced a policy that if goods could not be replaced within 14 days that the customer would be given a credit.

It was Ms Lu's evidence that after a month and a half of the applicant being responsible only for logging-out replacement items she formed the view that the applicant was not doing the job properly. She had a meeting with Mr Wang and Mr Shu and they decided to change the procedure swapping the jobs of the two employees in the warranty department and providing an extra employee from the warehouse to help with the packing of goods. This occurred about 25 April 1997.

Ms Lu was asked further questions about complaints from customers. She said when she spoke to the applicant about complaints that he responded that no matter what he did some customers were never happy. Ms Lu produced three letters [R6], [R7] and [R8] which she stated were written complaints from the customers about the applicant. She stated that she had not asked these customers to write the letters. The letter [R6] was dated 13 May 1997, after the applicant's dismissal. The letter [ R7] was dated 11 March 1997 and raised questions about the return of a particular item for which there appeared to be no paperwork. Ms Lu did not show the letter to the applicant.

The last letter [R8] was dated 1 March 1997 although Ms Lu stated that she was not sure when she received it and the company informed her that it was 20 March 1997 they had sent it to her. She stated that she spoke to the applicant about this letter but did not show it to him.

The final document [R9] produced by the witness was paper work relating to a number of warranty items returned by Z-Tek. She stated that the applicant had made two mistakes in dealing with these returns by incorrectly supplying a replacement item when the policy was to issue a credit note on such an item. With other items he had given a credit to the customer instead of issuing a replacement item. These were the mistakes uncovered by Ms Lu on 2 May 1997 when the applicant was not present at work.

In cross-examination Ms Lu stated that her knowledge of problems in the warranty department prior to March 1997 was limited to her dealings with customers who refused to pay their accounts because of delays with warranty items. She was appointed to try to solve the problem. She thought that the problem was because staff did not do their job properly. She was aware, however, that sometimes the company did not have enough stock to replace warranty items so she made two decisions, one, to give credit if the goods could not be replaced within 14 days and, two, to split the job between the two employees in the department.

Ms Lu described the system of work for dealing with goods returned under warranty. She agreed that the computer system did not indicate when the 14 days was up after an item had been logged in. The person had to go through an alphabetical filing system where the paper reports were filed to find which items needed to be replaced. This had to be done manually, on a daily basis.

Ms Lu stated that the document [R1] was an internal document given to the warehouse by the warranty staff which listed the items they required from the store. The warehouse kept the list. It was also another way to reconcile stock. Ms Lu stated that once goods had been logged out they became the responsibility of the warehouse. The warranty employee put the goods on the shelf where they waited for the customer to collect them. Ms Lu was asked if she thought the system was a good one. She stated that she thought it was reasonable.

She agreed that the main thing for an employee in the warranty department to know was when the 14 days was up and that this could only be done by manually checking the files.

After further questioning Ms Lu stated that prior to 1 March 1997 if the goods were not available in the warehouse the warranty employees just left it and waited until the goods were available. Ms Lu stated that Electronic Resources Australia had less than 100 companies with which it dealt.

From March they went to a new system. One employee was to do log-in and packing of goods and the other employee was to do log-out and catch up on the outstanding warranty items for Z-Tek. There may have been another employee there as well. Z-Tek could return up to 40 pieces per week because they were a big customer. From 1 April, because of Z-Tek's importance as a customer they gave them a seven day return. Before this the applicant was to finish all outstanding warranty orders some of which went back to December 1996. She did not ask the applicant why these items had not been returned.

Ms Lu stated that the applicant could not finish the job properly because his performance was not good enough. She kept receiving complaints from customers. She asked the receptionist to transfer all technical phone calls to the other technician in the warranty department to allow the applicant to concentrate on log-out only. The other employee, who was doing log-in, did not claim that he was too busy. He was also packing faulty goods for transport to Sydney.

The importance of finishing the Z-Tek work was because of outstanding amounts owed by that customer which they promised to pay if all outstanding items were delivered. She did not tell the applicant this but told him to concentrate on the work she had allocated him. Z-Tek did not get everything they expected because there was some paper work missing. A Z-Tek representative brought the paperwork in and they were able to reconcile it and fix the problem.

Ms Lu stated that when she told the applicant about complaints he just said he was busy doing other work. When Connect Australia came in with their problem she told the applicant he must find the missing paper work which he did two hours later. On another occasion also the applicant had lost paperwork. She agreed it was not unusual for clients to come to the company to reconcile accounts. It was after this occasion that she told the applicant that if he could not finish all the outstanding warranty orders he could not stay there any longer. She did not put the warning in writing.

Ms Lu was shown a document headed "RA Procedure" [Exhibit L1]. She agreed that she had drawn up the document towards the end of April. She kept thinking that there was something wrong with the procedure or with the applicant. She discussed it with Mr Wang and decided to transfer the applicant to the log-in job. At this time they also took on a new employee to help out in the warranty department. The new employee was taken on because they intended to free up the two technicians to do more technical work. The new procedure was to start on 1 May with the applicant doing log-in, the other technician doing log-out and the new employee packing the returned goods and sending them to Sydney.

On Friday 2 May she was expecting the applicant to attend work. At 10.00 a.m. she asked the receptionist if she knew why he was not coming in. At 11.00 a.m. the receptionist called to tell her that the applicant's wife had called to say he was sick. The applicant's wife had spoken to the other technician to ask him to collect the applicant's pay. She later found out that Mr Wang had known on the Thursday night that the applicant was not coming in the next day.

During the course of the day she discovered two mistakes made by the applicant and reported this to the director, Mr Shu. She told Mr Shu that in her view that the applicant could not do his job properly. It was not only the mistakes but his failure to finish all the outstanding warranty items. She admitted that she did not ask the applicant why he had not finished particular items because when she spoke to him he always said everything was fine. She did not tell him which companies had complained because he always said:

"No matter what we do they are never happy".

Ms Lu spoke again to Mr Shu on Friday evening and said she wanted to give the new procedures a chance. She believed that most of the delay in responding to warranty claims was the applicant's fault. They agreed to dismiss the applicant. She stated that she had tried talking to him and he always brushed her aside or said:

"Don't worry".

Ms Lu said she called the applicant into the boardroom on the Monday afternoon and pointed out the mistakes from the Friday. He denied they were his fault. She also pointed out his poor performance and his absence on the previous Friday. In relation to his absence she stated that she was the manager of the department but did not know until after everyone else that he was not coming in on the Friday. She also stated that his work attitude was not correct. They expected everyone to come in every day. She told the applicant the company could not keep him any longer. The applicant walked out and she did not have a chance to say anything else.

The witness agreed that it would not have mattered what the applicant said, the decision to terminate him was already made. There were not written warnings given to the applicant. She did not know it was necessary. She also agreed that she never showed Mr Stankovic any of the letters of complaint. She did not keep a file for him. She stated that about 60 or 70 per cent of the complaints made about the warranty department mentioned the applicant's name. She stated that the applicant was doing more warranty work than the other technician who did packing, spreadsheets and reports. She agreed that she still received complaints about the warranty department.

Ms Lu was asked questions about Exhibits R7 and R6 and the striking similarity of the wording used in both letters. She stated that she did not tell Ms Fu or Mr Shen to write the letters and had not noticed the similarity between them.

In re-examination Ms Lu stated that for two months the applicant was the only person doing log-out. Because they continued to receive complaints she could say he did not do his job properly.

Mr Lewin was a storeman employed by the respondent company between late 1996 and March 1997. He lodged a statement in support of the applicant. He was shown a copy of Exhibit R1 and stated that he was familiar with such forms. The warehouse and the warranty area were located next to each other and he would see the applicant on a daily basis at work. Mr Stankovic spoke to Mr Lewin about the workload on the two technicians in the warranty area. Stock from the warehouse for warranty replacements came from Sydney. Faulty parts were also sent to Sydney. He was not sure how long it took to get items back from Sydney.

Mr Lewin stated that the warehouse received faulty foods from customers and signed for them. They would then be passed on to the warranty department who logged-in the item returned. When an item was ready to be collected it would be placed on a shelf in the warehouse until the customer came in. The customer signed when they received the goods and the paper work went back to the warranty area.

Mr Lewin was questioned about his knowledge of the warranty system. He stated that sometimes customers did not fill in the paperwork correctly and it would have to be sent back to them. Mr Lewin stated that he helped out in the warranty area from time to time to log-in items received. He asked if he could help out. He was not able to do all of the jobs in the department because he lacked the required knowledge. He only knew what happened in the warranty department from his observations and discussions with the two technicians.

Mr Stankovic stated that he obtained the job at Electronic Resources Australia through another employee who introduced him to Mr Shu. He was told that the job was technical support, giving technical advice over the phone and technical work on PCs. There was a three month probationary period. There was no job description or training. He was taught what to do by the other technician. For the first month he just checked returned items then he was put into the office to answer technical queries over the phone and doing log-ins. The employees reported directly to Mr Shu.

At this time, September-October 1996 there were three employees in the warranty department. After three or four weeks learning from the others he got the hang of the system. At the time he started they were six to nine months behind in getting warranty orders out. With three of them in the department, after about two or three months they started to clean up all the backlog.

The backlog was from 12 months to two years. The warranty department blamed delays in receiving replacement items from Sydney for the backlog. He considered the system to be inadequate as it was all manual and they had to track down goods that were missing for the last 12 months.

In November one of the employees was moved to the accounts department and he and the other technician were doing testing, packing, log-in and log-out and technical support over the phone. They received calls from Sydney and Queensland as well as Melbourne. Prior to the transfer of the third employee he believed that they had got to the stage of only having one month's back orders. He spoke to Mr Shu about a replacement employee but was told that they could manage themselves.

In January 1997 all of the Sydney warranty department left and the other technician from Melbourne was asked to go up to Sydney until they found new staff. He was then the only person in the warranty department in Melbourne. He complained to Mr Shu who thought that one person was capable of handling the job. The applicant told him that every day that passed would take two or three days to catch up. He received some help from other staff from the stores area from time to time.

The other technician returned from Sydney and in late February a new employee started. She was going to do the paperwork and the two technicians were going to check returned goods, pack them and send them to Sydney and log-out replacement items.

About this time Ms Lu became their supervisor. They were told to clean up the backlog which he thought was about three months behind. The third employee left some time in April.

In early April he was told that there had been a management meeting where the performance of himself and the other technician was discussed. He was told that Ms Lu had stated that she did not believe he was a good worker and Mr Wang had disagreed. He approached Ms Lu and told her that if she had a problem with his work he would appreciate it if she told him. No specific allegations about his performance were put to him by her.

Ms Stankovic stated that he had told Ms Lu about his problems with the computer system. It was really only an invoicing system and it was not possible to use it to keep track of outstanding orders. He also explained to her their problems with getting stock from Sydney.

In March the witness was told to give priority to outstanding orders for Z-Tek and Connect Australia. He was to do log-out only. He suggested to Ms Lu that with some items he could log them out on the same day. She told him not to do that because if he did they would expect same day service. He would only know when items were logged-in by the date on the form. If goods were not logged-in on receipt he would not know how long they had had them. If the warehouse could not supply the goods he was required to fill in a form for Ms Lu to issue a credit. It was up to her if the customer was given credit instead of a replacement item.

Mr Stankovic denied ever being warned by Mr Wang. He recalled a conversation with Mr Wang where the latter had suggested that they stop testing returned items, to save time, and just send them to Sydney. The applicant stated that there were always changes in what they were supposed to do. In April he was told to finish Z-Tek's outstanding warranty work within seven days. He was no longer to give technical advice over the phone, just do log-outs for the company's 70 odd customers and finish Z-Tek within seven days. He did this.

Just prior to the start of May, the applicant's duties were again changed. He was to log-in items and give technical advice over the phone. A new employee was to help out in the warranty department and in the warehouse.

The applicant said there were a lot of problems with Z-Tek and Connect. Connect purchased particular brands of hard drives which were not off the shelf change-overs and they always had outstanding orders. The new system introduced by Ms Lu from the beginning of May involved more handling of paperwork. They always had complaints from customers, mainly those like Z-Tek who had high volume sales. Usually the calls were between their warranty department and the client company's warranty department.

On the Thursday evening before his dismissal he telephoned his wife to say he was not feeling well and was coming home. On Friday morning at 9.03 a.m. his wife rang Electronic Resources Australia to say he was ill and would not be in. He rang again at about 10.00 a.m. to ask a fellow employee to collect his pay for him.

On the following Monday at 5.00 p.m. he was called into the boardroom by Ms Lu. She stated that she had evidence that his performance was not up to standard. Ms Lu cited mistakes he had made in relation to some orders. He was not shown any letters of complaint. He asked Ms Lu to show him the mistakes and stated that as far as he was concerned he had not made any mistake but had followed her instructions. She also stated that there were numerous phone complaints about him.

Mr Stankovic was shown [R9]. He stated that he had acted on Ms Lu's instructions to refer items for credit rather than replacement. She had changed her mind later about it because of the cost. That was the only mistake shown to him. Mr Stankovic also explained [R2] was not correct because it was an incorrect interpretation of [R1]. Warehouse orders did not identify each customer but only the total numbers required. When he got the items from the warehouse he allocated them to the specific customers. Items were not, in fact, missing. If anything was missing or unaccounted for the warehouse supervisor would have spoken to him. If Z-Tek had asked for 40 items and only received 19 they would have complained.

In relation to [R3] Mr Stankovic stated that some of the items went back to December and involved lost paper work. He had checked this several times and Ms Lu had agreed with what he had done. In relation to [R5] the applicant stated that the company involved was related to Electronic Resources Australia and he had been told not to rush their orders. Mr Stankovic also stated that the company involved in [R6] was related to Electronic Resources Australia also. He had spoken to Mr Shen on a number of occasions and got on well with him. He did not believe that Mr Shen could have written this letter because his English was limited and the applicant had to assist him with his paperwork.

The applicant was shown [R7]. He stated that he had never spoken to the author of the letter. The only problem with that company had concerned a returned item for which there was no paperwork. He discussed it with the manager who agreed that the driver was new and the problem was probably with one of his staff. Connect had come in one day to discuss 30 or 40 hard drives outstanding from Christmas. He got 39 of the 40 items on that day. The company brought in anything up to 20 items per day to Electronic Resources Australia.

At the meeting on the Monday of his termination he asked to see the actual complaints made against him but Ms Lu stated that it was not company policy. He was not given an opportunity to rectify the problems. In his view the respondent has decided to terminate him and there were no second chances.

In cross-examination Mr Stankovic restated that Z-Tek was finished on time. He also denied being warned by Mr Wang or Ms Lu about his performance in March. He was questioned about the extent of the back log. It was pointed out that the company's Melbourne office had only been operating since August 1995. He stated that his evidence about the backlog was based on the dates on outstanding items. He estimated that each parcel sent to Sydney was $50,000 to $60,000 worth of items.

It was suggested to the witness that the other technician was only in Sydney for one week in January 1997. He stated that he might have only been there five days straight but was up and back for four weeks. He also stated that Z-Tek had been coming in to reconcile their accounts at Electronic Resources Australia all the time the time he was employed there. They apparently seemed to lose their original paperwork. He stated again that Z-Tek's work in April was finished on time.

Mr Stankovic was asked about his comments to companies. He agreed that he told Connect Australia to stop faxing requests to him and stated that this was because they kept getting the same paperwork each day. He stated that he would get about half a dozen technical phone calls per day.

Submissions

Ms Lloyd summarised the evidence given by the witnesses. She pointed out that Mr Stankovic denied being warned by Mr Wang and also to the constant changes in employees at Electronic Resources Australia. During Mr Stankovic's time the number of employees in the warranty department varied between one and three and three different employees had been working there. She also pointed out that Mr Wang's knowledge of the applicant's performance came from Ms Lu.

Ms Lloyd submitted that there were no counselling procedures or policy about warnings known to the employees. Ms Lu stated that she warned Mr Stankovic in late April but he denied this warning. Ms Lu placed emphasis on the finishing of the outstanding Z-Tek order. She conceded that paperwork was missing. The applicant stated that he finished the order. Ms Lu conceded that prior to March 1997 if the warehouse did not have goods they simply left the order until the items came in. She was aware of complaints because of her work in credit control. She never asked the applicant what the problems were. She changed the procedures to try to identify who was responsible.

It was Ms Lloyd's submission that Ms Lu decided to terminate the applicant because she discovered two errors on the day he was off sick. He claimed he was acting under her instructions. The decision to terminate him, however, was made before she spoke to him about the mistakes. She also stated that there were too many complaints from customers which named the applicant. She conceded, however, that he did most of the warranty work and that complaints continued after his termination. She was unable to explain the similarities between the wording of the letters of complaint produced.

In Ms Lloyd's submission there were communication problems within the organisation. There was a constant turnover of staff and changes in procedures designed to rectify problems which were not the fault of the applicant. Complaints were made by the applicant but nothing was ever done. There was no valid reason for the termination and no procedural fairness.

Mr Reynolds submitted that Electronic Resources Australia is a small company which commenced operations only four years ago and is operating in a very competitive market. The applicant was made aware of his shortcomings by his supervisor but he brushed them aside. He was given a deadline to finish the outstanding Z-Tek orders but he did not do it. He was warned by Ms Lu and Mr Wang.

In Mr Reynold's submission, the applicant was not terminated because of his absence from work on the Friday. He failed to notify his supervisor of his absence but that was not the reason for his dismissal. He was warned of his shortcomings and did not take the opportunity to respond in any meaningful way. He brushed aside criticisms. On the day of his termination he left the office peremptorily.

The respondent submits that there was a valid reason for the termination, that the applicant was warned and that he was given the opportunity to respond.

Conclusions

The applicant in this matter is a technician, he was employed as a technician but appears to have spent most of his time performing clerical functions. The warranty system operated by the respondent appears to have always been inadequate and based on an inefficient and labour intensive system, which is surprising given that the company trades in computer components. Until 1 March 1997 the company does not seem to have been greatly concerned by the extraordinary delays in servicing clients, given their 14 day turn around policy, and appeared to be content to wait for items to be available. If items were not in stock the warranty staff had to wait for them to arrive from Sydney.

There were also constant changes in the staff of the warranty department and in the tasks allocated to them. The applicant complained about the problems and the need for assistance in order to address the backlog. The company appears to have finally responded to complaints from customers when some of them refused to pay outstanding bills until warranty items were supplied. The company's solution was to put Ms Lu, an electronics engineer who was running credit control, in charge of the warranty department.

Without attempting to identify the cause of the problems Ms Lu decided to try to identify who was not doing their job properly by dividing tasks in the department between the employees. Within five days she had formed the view that the applicant was not doing his job properly and said so in a management meeting.

Ms Lu did not speak to the applicant but other members of the management team let him know what she was saying. I do not regard those conversations as constituting a warning for the purpose of section 170CG(3)(d) as Mr Wang said he was just giving the applicant a hint. In order to solve the complaints of a major client Ms Lu guaranteed them that all of their backlog would be completed and they would get a seven day turnaround from 1 April 1997. She instructed the applicant to finish all the outstanding Z-Tek work. She did not inform him of the reasons for this.

The parties disagree about whether the work was finished or not. I suspect that the applicant finished all the work for which he was able to find the paperwork. It was conceded that Z-Tek had to bring in original paperwork before some of the orders could be finalised. It was at this stage that Ms Lu says she warned the applicant. I accept that she told him that the work would have to be done and that she did not believe that he was doing the job properly.

The other matters which the company relied upon were the mistakes found by Ms Lu on the Friday the applicant was off sick and the complaints made about the applicant by customers. The applicant's response to the mistakes was to say that he was doing what he had been told to do by Ms Lu. The issue of whether a credit or a replacement item should be issued on the particular items was disputed by Ms Lu and Mr Stankovic. Whether or not it was a mistake, however, it would not in my opinion be sufficient to justify dismissal and I accept that it was not drawn to the applicant's attention until after the decision was made to terminate him. It does, therefore, not meet the requirements of section 170CG(3).

The complaints from customers fall into two categories. I accept that there were numerous telephone complaints about delays in receiving warranty items. These, however, were not necessarily the applicant's fault as for most of the period he was not the only person doing the log-out job and the company appears to have basically ignored the 14 day turn around policy. Even the example given by Ms Lu in [R4] and [R5] related to a period of time when the applicant was not solely responsible for the processing of warranty items. To a large extent the delays were inherent in the inefficiency of the system. The written letters of complaint I attach no weight to at all. I consider the wording of [R6] and [R7] appears more than coincidental. I suspect they were, at least, solicited by the company and in any event they were never shown to the applicant.

To a large extent I am of the view that that applicant was the scapegoat for a system which was almost incapable of meeting the company's declared policy. After she took over management of the area Ms Lu instituted a process of giving customers credit if the items could not be supplied within 14 days. Her only solution to the backlog, however, was to exhort the applicant to get the job finished. I also note that the day after the applicant was terminated the company brought in someone to redesign the system.

I accept that the applicant's attitude to Ms Lu as his supervisor was not appropriate and that his paperwork may have been messy and difficult for others to follow. I do not accept, however, that the evidence shows that the problems in the warranty department were the result of his inefficiency and mistakes. They do not, in my view, meet the requirements of section 170CG(3)(a).

The respondent, in my view, has not shown a valid reason for the applicant's termination. I accept that he was given one verbal warning by Ms Lu, however, the decision to terminate his employment was made without giving him the opportunity to address the issues of the mistake on the Friday or the alleged complaints against him. The warning went only to the issue of finishing work which he claims to have completed. I have, therefore concluded that the applicant's dismissal was harsh, unjust or unreasonable.

Remedy

The applicant does not seek reinstatement. The respondent did not give any evidence about whether Mr Stankovic had been replaced or not. The applicant has returned to live in Moe but continues to look for work in Melbourne because of the lack of available work where he is living. His evidence was that he is looking for technical, computing or sales work. He had obtained some casual work in Morwell fixing Tattslotto machines. He had been working for two days per week for about three weeks at a rate of $12 per hour. Prior to obtaining this work he had been unemployed for approximately 15 weeks. He was paid three weeks' pay in lieu of notice.

Taking in to account the material before the Commission and the submissions of the parties I consider that an amount equivalent to 12 weeks' pay should be paid to the applicant by the respondent in lieu of reinstatement.

The parties are to settle the amount involved and lodge a draft order with the Commission within seven days of the date of this decision.

BY THE COMMISSION:

COMMISSIONER

Appearances:

R. Lloyd of counsel for D. Stankovic.

R. Reynolds of the Victorian Employers' Chamber of Commerce and Industry for Electronic Resources Australia.

Hearing details:

1997.

Melbourne:

August 29,

September 17.

Decision Summary

		Termination of employment - unfair dismissal - unlawful termination - arbitration - applicant dismissed for making mistakes, not meeting company's turnaround times and complaints received about applicant's work from clients - warranty system operated by respondent appeared to have always been inadequate - applicant not issued with a warning for purpose of s170CG(3)(d) - mistakes not sufficient to justify dismissal and not drawn to applicant's attention until after decision to terminate him was made and doesn't meet requirements of s170CG(3) - applicant was a scapegoat for a system almost incapable of meeting company's declared policy - applicant's attitude to supervisor not appropriate and that his paperwork may have been messy and difficult to follow but not accepted that problems with warranty department were the result of his inefficiency and mistakes and do not in Commission's view meet requirements of s170CG(3)(a) - respondent has not shown a valid reason for applicant's termination, accepted applicant given one verbal warning by supervisor but decision to terminate employment was made without giving applicant the opportunity to address issues of mistakes or alleged complaints against him - applicant's dismissal was harsh, unjust or unreasonable - reinstatement not sought - compensation of 12 weeks pay ordered.
Stankovic and Electronic Resources Australia
U No 31530 of 1997	Print P5987
Whelan C	Melbourne	20 October 1997

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