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T10745

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.29 application for hearing of industrial dispute

Stacey Lee Kaine
(T10745 of 2003)

and

Darren and Emma Harding
trading as Hairworld

 

COMMISSIONER T J ABEY

HOBART, 5 June 2003

Industrial dispute - alleged unfair termination of employment - alleged breach of award - procedural fairness - fair go all round test - application for alleged unfair termination dismissed - file to remain open for applicant to pursue alleged breach of award

REASONS FOR DECISION

(1) On 12 March 2003, Stacey Lee Kaine (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with Darren and Emma Harding trading as Hairworld, arising out of the alleged unfair termination of her employment.

(2) The matter was listed for a conciliation conference on 26 March 2003. Mr B Trafford, a solicitor, sought and was granted leave to appear for the applicant. Mr G Richardson, a solicitor, sought and was granted leave to appear for the employer.

(3) An initial attempt to resolve this matter through conciliation was unsuccessful and the matter was set down for hearing on 5 May 2003. During the hearing Mr Trafford sought to amend the application to include certain matters pertaining to award entitlements. This application to amend was granted, subject to directions issued on transcript.

Background

(4) Miss Kaine was employed in the Hairworld salon on 24 February 2000. She had previously been employed in a number of other salons and was in the second year of a hairdressing apprenticeship when she joined the current employer.

(5) On 14 February 2001 Miss Kaine's employment reduced to approximately 20 hours per week. This was at her request as a consequence of a medical condition. Whilst Miss Kaine was paid a casual loading, it is clear that her hours of work were quite regular and it is reasonable to conclude that this pattern would have continued indefinitely, but for the termination.

(6) Some time after this change Mrs Harding made representations to the appropriate hairdressing board seeking to have Miss Kaine recognised as a qualified hairdresser. These representations were successful.

(7) Around February 2002 Miss Kaine became a part-time consultant for Mary Kay Cosmetics in order to supplement her income following the reduction in hours. Mrs Harding was aware of this and did not have a problem with the arrangement. Indeed on a number of occasions Mrs Harding purchased product from Miss Kaine for use in the salon. It was however made clear that Miss Kaine was not to promote the product to hairdressing clients during working hours.

(8) According to the employer's evidence this practice became a recurring issue over the next 12 months. Mrs Harding's evidence was that at least three formal warnings were given. Miss Kaine's evidence was that she denied ever being formally warned.

(9) On 14 February 2003 Miss Kaine was called to a meeting with Mr and Mrs Harding. At that meeting her employment was terminated in circumstances outlined later in this decision.

(10) The applicant asserts that she was denied procedural fairness and as a consequence the termination was unfair.

The Evidence

(11) Evidence was taken from the following witnesses:

Stacey Lee Kaine, the applicant.
Mrs J, a close friend of Miss Kaine
Mrs F, a consultant with Mary Kay cosmetics
Emma Louise Harding, the proprietor of Hairworld
Darren John Harding, a partner in the Hairworld business
Ms G, a former work colleague of Miss Kaine
Mrs W, a client of the salon.

(12) It is clear that Miss Kaine and Mrs Harding openly discussed the Mary Kay issue at or about the time Miss Kaine commenced as a cosmetics consultant. There can be no doubt Mrs Harding approved of the activity, provided it was not promoted to salon clients during working hours. Miss Kaine said in her evidence:1

"Did she have any reservations, or doubts, or concerns that she told you about, about you working for Mary Kay?---She said that 'I think it would be a good idea' and that I had a - yes, it would have been good but, you know, to keep it separate from hairdressing, and I said, 'Yes, that's fine', you know, 'I'll be a hairdresser at work and then I'll be a Mary Kaye consultant on my time off.' "

(13) Mrs Harding said that she issued a warning to Miss Kaine in February 2002:2

"And can you recall, as best you can, the words that you used in order to issue that warning?---I explained to Stacey that it would be inappropriate, that I was warning her that it was inappropriate to be using salon time to promote the product, like, she was there to do hair not to be selling Mary Kay, and I expected her to fulfil the hairdressing requirements before the beauty requirements. It was, yes, I was there to run a business.

Did she give you any indication as to whether she would comply with your direction in that regard?---Yes, she agreed that she would keep it separate."

(14) It is likely, but not certain, that both were referring to the same conversation, although on her evidence, Miss Kaine did not construe the conversation as constituting a warning.

(15) It is however clear that Miss Kaine understood what the requirement was:3

"So did Emma Harding know that you had Mary Kaye products available all the time?---Yes.

And did she ever speak to you about you selling Mary Kaye products to other people?---Yes, she said, you know - no, she said at the start 'I'd want you to keep it separate', you know, 'people coming in to get their hair done, nothing else', and that was fine by me, and I said everything was good; I hadn't done anything, yes - - - "

(16) Mrs Harding said that after an initial improvement the problem once again emerged. She said: 4

"Okay, and what was the problem that you observed? What was happening?---I had clients coming into the salon to the desk asking to speak to Stacey in relation to Mary Kay. We had clients ringing the salon, or Mary Kaye customers ringing the salon asking to speak to Stacey. We had clients and - complained to me that they were feeling pressured by, you know, 'Gee, she's pushy', and having this Mary Kaye thrust on them in the salon."

(17) Mrs Harding said that after the initial warning Miss Kaine became more secretive about the Mary Kay activity although she was fully aware of what was happening.

(18) On 13 June 2002 Mrs Harding said she issued a further warning:5

"Okay. In between, sorry, can you recall, at least in general terms, the nature of the warning you gave?---The warning was in relation to what had been happening in those months leading up to it, the phone calls, the people coming in to collect their orders and what-have-you. The - I've had two people, two of my own clients, ask me if Stacey was still actually working for us and, which I found quite odd, was she still there, and these were clients who by now were also Mary Kaye clients and I said, 'Well, yes', and was quite surprised and, I mean, yes, that came into the salon too."

(19) According to the evidence this warning was entered in Mrs Harding's work diary although the actual words of the entry were not tendered.

(20) In September 2002 Mrs Harding was absent from the salon for 10 days on holiday. On her return she said that two staff members complained that the Mary Kay activity "had been going on particularly strongly while she was on holidays".

(21) As a consequence Mrs Harding said she issued a third warning on 19 September 2002. This was recorded in the diary in the following terms:6

"*Stacey - Girls say it's going on while I'm away. She's unhappy and doesn't want to do hair anymore hands sore."

(22) Mrs Harding recalled that Miss Kaine responded to this conversation as follows:7

"At that time did she say anything about the warnings - about her position so far as work was concerned?---When I talked to her the third time about the Mary Kay, she explained to me that she was, and this was - you know, she was unhappy. She - her hands were sore, she was unhappy; she needed to build it up to get to the point where she wasn't going to be doing hair any more."

(23) It is common ground that Mrs Harding purchased Mary Kay product from Miss Kaine on several occasions as did other staff members. Mrs Harding's concern was limited to the promotion of Mary Kay product to salon clients during working hours.

(24) In November 2002 the salon provided hairdressing and make-up services to a group of young ladies prior to attendance at a leavers' dinner. Mrs Harding purchased product from Miss Kaine so as to provide this service.

(25) Ms G was a former work colleague of Miss Kaine who had left voluntarily in October 2002 to move to the West coast.

(26) Her evidence, which was not challenged, can be summarised as follows:

(27) On several occasions she had overheard Miss Kaine discussing Mary Kay product with hairdressing clients during working hours. She had also observed Miss Kaine bringing product to work and collecting money from Mary Kay customers. This activity occurred more frequently on Mondays, which was Mrs Harding's day off. On occasions she had spoken to Miss Kaine about leaving clients in the chair whilst attending to Mary Kay customers.

(28) Ms G said she had on occasions heard Mrs Harding requesting Miss Kaine not to deal with Mary Kay products in the salon. It was Ms G who complained to Mrs Harding in September 2002 as to Miss Kaine's Mary Kay activities during Mrs Harding's absence on holidays.

(29) Mrs W is a client of the salon. Miss Kaine had provided hairdressing and related services to her on about six occasions. Her uncontested evidence was that Miss Kaine had, on one of these occasions, asked if she could sell Mary Kay products to Mrs W.

(30) Initially Mrs W declined. However Miss Kaine had pressed the issue again on a subsequent visit and had obtained Mrs W's telephone number. Miss Kaine left a number of Mary Kay related messages on her telephone answering service. Mrs W ultimately purchased product from Miss Kaine. She said:8

"Did you feel any pressure about that?---Well, I thought I was helping her because she explained that she didn't want to continue hairdressing and that she wanted to further her field in being a beautician and to make Mary Kaye her career."

(31) Miss Kaine's evidence is that hairdressing clients were approached outside the salon:9

"So did you sell it to hairdressing clients?---Hairdressing - I'd see my clients out of work hours, like shopping, and down the street, and then I'd mention to it then, you know - - - 

Okay?--- - - - to them then, and they would say, 'Well, why didn't you tell me in the salon, like, I wasn't allowed to talk about it in the salon so I didn't - - - "

(32) Under cross-examination she said:10

"Did you ever attempt to sell Mary Kaye products to any client of Hairworld whilst you were carrying out your duties as a hairdresser?---I would say, "Have you ever used it before?", like, I might have made a comment on how nice their skin was, or something, and they have - and I would say, "Have you ever used it?" and they would say, "No", or "Yes", and I'd say, "Oh, well", you know, "you should try it. You should get it off - - -"

"Off me"?--- - - - no, well, that's it, not exactly me. A lot of people had their own consultants, you know?

Okay, so you would start recommending it to people but not suggest that they might like to buy it off you? Is that what your evidence is?---No, look, I'm not a salesperson. I'm only new. I don't even know what to do with it."

(33) Miss Kaine agreed that her longer term objective was to grow the Mary Kay business sufficiently so as to enable her to get out of hairdressing altogether. However for the time being she wished to continue in hairdressing at Hairworld.

(34) Miss Kaine denied that she had ever received a warning from Mrs Harding about dealing with Mary Kay business during working hours.11

(35) Miss Kaine said that on no occasion had customers come to the salon in order to pick up or order Mary Kay products.12 She did however acknowledge that on occasions customers would telephone her at work.

(36) Miss Kaine denied that Ms G had complained to her about leaving clients in the chair whilst attending to Mary Kay business.13 She also denied that she had approached Mrs W in the salon in regard to Mary Kay.14

(37) Miss Kaine denied that she arranged for more of her Mary Kay customers to come to the salon on Mondays when Mrs Harding was absent.15

The Termination

(38) Mrs Harding said that by February 2003 the problem had diminished somewhat although phone calls from Mary Kay customers were still being received in the salon.

(39) Early on 14 February Mrs Harding was cutting the hair of a regular customer. The customer asked when Miss Kaine was next working on a Wednesday as she had previously been given a Mary Kay discount voucher, which she wished to discuss. Mrs Harding said:16

"Okay, and did she tell you when she had - the circumstances in which she had got the discount voucher?---She said - when she said that she has a voucher she said that she'd given her when she'd have her eyebrows waxed.

In your salon?---Yes."

(40) Later that morning Mrs Harding discovered an anonymous letter, which had been passed under the back door of the salon. The letter read:17

"Dear Emma

I'm writing to let you know that there are rumours that (name) is going to manage your shop and all your staff hate her, and they are not going to stay there if she does. I had my hair coloured recently and it was a good colour but the girl kept moaning about co-workers and how much she hated working there, then told me I could have a complete hair & makeup at home as she is leaving to pursue her career in make up. Just to let you know.

A good client"

(41) At 1.00pm Miss Kaine attended a meeting with Mr and Mrs Harding in the next-door restaurant. She was given the letter to read and asked to comment on the discount voucher allegation.

(42) It is unclear from the evidence as to the precise nature of Miss Kaine's response. There does not appear to be a denial of the allegations relating to the makeup although Miss Kaine in her evidence denied that she had offered to do home hairdressing.18

(43) Mrs Harding clearly did not find Miss Kaine's response acceptable. She handed Miss Kaine her scissors and terminated her services.

Closing Submissions

For the applicant:

(44) Mr Trafford submitted that the behaviour of Miss Kaine in relation to the sale and promotion of Mary Kay products was irrelevant. The only issue was whether the applicant had been afforded procedural fairness and, in his submission, it had not.

(45) The evidence of the applicant was that no warnings had been given.

(46) Even if the warnings had been given they would have effectively "been acquiesced by the fact that the employer is ordering Mary Kay products herself".

(47) Mr Trafford submitted:19

"The behaviour that the employer wishes to complain about is actually in the next breath being encouraged by the employer and, on that basis, there can be no procedural fairness in terminating someone's employment if it is for the reason stated by the employer. In my submission, it was not. It is quite clear that Stacey Kaine was dismissed on 14 February, but I don't believe this Court can realistically find that it had anything to do with Mary Kay. She was dismissed for other reasons and these three warnings are basically the best that the employer could come up with as trying to justify that stance."

(48) The fact that Mrs Harding had Miss Kaine's scissors in her presence at the time of the meeting is evidence that the employer had made up her mind to dismiss irrespective of any explanation that might have been offered.

For the employer:

(49) Mr Richardson submitted that this was a case that turned entirely on witness credit in that it appeared to be accepted that, if warnings had been given, the termination was valid.

(50) Mr Richardson submitted that, given the level of inconsistency between the evidence of Miss Kaine and the uncontested evidence of a number of witnesses on key issues, "the applicant is left with absolutely no credit on the issue at all".

Findings

(51) On the evidence I have no hesitation in finding that Miss Kaine actively promoted Mary Kay products to hairdressing clients during working hours. It is also clear that the salon was regularly used by Mary Kay customers to pick up product, collect money and take orders, either in person or over the telephone.

(52) I am also satisfied that Miss Kaine was aware from the outset that such activity was not allowed by Mrs Harding. The prohibition of such activity is, in my view, entirely reasonable.

(53) I find that the fact that Miss Kaine persisted with such behaviour constituted a valid reason for termination.

(54) The remaining issue for consideration is the question of whether Miss Kaine was denied procedural fairness.

(55) Central to this consideration is the matter of warnings. Mrs Harding's evidence was that three warnings were given. Miss Kaine flatly denied this.

(56) I accept the submission of Mr Richardson that this fundamental conflict in the evidence means that a finding of credit must be made.

(57) The key witnesses in this matter are Miss Kaine, Mrs Harding, Ms G and Mrs W. I found that the evidence of the latter three was clear and internally consistent. Their evidence was not shown to be wanting on any material fact. In the case of Ms G and Mrs W, neither had any obvious motivation to give evidence that was unhelpful to the applicant.

(58) The evidence of Miss Kaine was less satisfactory. Her evidence was clearly at odds with the uncontested evidence of Ms G and Mrs W on matters which were at the heart of this application. I do not make a finding that Miss Kaine was deliberately untruthful. It did however appear to me that Miss Kaine was not fully cognisant with the importance of answering questions with appropriate precision.

(59) I have no doubt that Miss Kaine was aware of the requirements of her employer. I have also formed the view that in Miss Kaine's mind, the odd departure from these requirements was not really a departure at all. I conclude that to the extent of any inconsistency between the evidence of Miss Kaine and that of other witnesses, the evidence of the other witnesses is to be preferred.

(60) I therefore accept the evidence of Mrs Harding that three warnings were given to Miss Kaine concerning her Mary Kay activities.

(61) I do not accept Mr Trafford's submission that Mrs Harding, by allowing staff to purchase product, and indeed purchasing it herself for use in the salon, effectively encouraged Miss Kaine to embark on the behaviour complained of. From the outset the only issue was the promotion of Mary Kay product to hairdressing clients during salon hours. The rationale for this is obvious. Unsolicited sales activity might be unwelcome and potentially damaging to the salon client base. As the proprietor of the business it was entirely open to Mrs Harding to draw a distinction between hairdressing clients, staff and herself.

(62) Similarly I do not accept Mr Trafford's submission that Mrs Harding had predetermined the outcome of the meeting as evidenced by the fact that Mrs Harding had in her possession Miss Kaine's scissors. I have no doubt that, as a consequence of the two incidents on the morning of 14 February, Mrs Harding formed the view that, in the absence of an acceptable explanation, Miss Kaine would be terminated following the 1.00pm meeting. That however is not the same as having a predetermined position and a mind closed to possible explanations. There is no evidence to suggest that Mrs Harding fell into this latter category.

(63) On the available evidence I conclude that Miss Kaine was given an adequate opportunity to respond to the allegations put at the 14 February meeting.

(64) There are however two further aspects of relevance to the question of procedural fairness.

(65) Whilst I have no doubt that warnings were issued and that Miss Kaine understood the employer's requirements, there is no evidence that any of the warnings, particularly the last one, were put on the basis of an ultimatum. That is, any further transgressions would or might result in termination. Ideally a performance/behaviour related counselling process should include a final warning with an ultimatum of this nature.

(66) The second area of concern is the fact that Miss Kaine was apparently not offered the opportunity to be assisted by another person of her choice at the 14 February meeting. This is a statutory requirement of s.30[8] of the Act which reads:

"(8) An employee responding to an employer under subsection (7) is to be offered the opportunity to be assisted by another person of the employee's choice."

(67) These two factors do, to a limited extent, amount to a denial of procedural fairness.

(68) It is necessary therefore to balance these procedural shortcomings against the overwhelming evidence that the behaviour did occur on a persistent basis.

(69) Section 30[2] of the Act reads:

"(2) In considering an application in respect of termination of employment, the Commission must ensure that fair consideration is accorded to both the employer and employee concerned and that all of the circumstances of the case are fully taken into account."

(70) This is often referred to as the "fair go all round test".

(71) Weighing all the circumstances of this case I am satisfied that Miss Kaine was given "fair consideration" notwithstanding certain procedural shortcomings on the part of the employer. In reaching this conclusion I have taken into account that the employer is a small business in every sense of the word. Whilst that is certainly not a licence to treat employees unfairly (which did not occur in this instance) I do accept that it is unreasonable to expect the same level of HR sophistication in a very small business as would be expected of a major corporation or public entity.

(72) Termination of Miss Kaine's services was within the range of options open to the employer and I decline to interfere with that decision.

(73) The application as it relates to the alleged unfair dismissal is dismissed.

(74) The file will remain open to allow the applicant to pursue that part of the amended application going to the alleged award breach/s, in accordance with directions issued on transcript.

 

Tim Abey
COMMISSIONER

Appearances:
Mr B Trafford, a solicitor, for Miss S L Kaine
Mr G Richardson, a solicitor, for Darren and Emma Harding trading as Hairworld

Date and Place of Hearing:
2003
May 5
Ulverstone

1 Transcript PN 212
2 Transcript PN 538
3 Transcript PN 243
4 Transcript PN 542
5 Transcript PN 548
6 Exhibit R1
7 Transcript PN 560
8 Transcript PN 1082
9 Transcript PN 235
10 Transcript PN 385
11 Transcript PN 441
12 Transcript PN 383
13 Transcript PN 446
14 Transcript PN 390
15 Transcript PN 449
16 Transcript PN 610
17 Exhibit R2
18 Transcript PN 282
19 Transcript PN 1114