'It's an inherent requirement of the role,' argues employer
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case involving an account manager who lost his driver's licence and was subsequently terminated by his employer, a manufacturer and distributor of products.
This case highlights the importance of clear communication and following through on agreed accommodations for employees facing temporary challenges.
It also underscores the need for proper performance management processes before considering dismissal.
The worker had been employed as an account manager for Southern NSW by the employer since May 2023. His role involved managing the distribution and sales of the company's products in the region, with responsibility for allocated client accounts.
The worker's annual salary was $119,600, and he was provided with a company vehicle for business use, as well as a laptop computer and mobile phone.
In November 2023, the worker informed his manager and the National Sales Manager that he might lose his driver's licence. The company initially responded positively, assuring him that appropriate arrangements would be made if needed.
On 9 January 2024, the worker confirmed he would lose his licence for six months starting 7 February. Discussions ensued about alternative working arrangements, including phone and laptop-based work, with occasional face-to-face client visits facilitated by colleagues.
By early February, the worker's manager had confirmed these arrangements:
Importantly, the worker was not told these arrangements were on a trial basis. In mid-February, he completed a successful three-day client visit trip with his manager, travelling to Orange, Bathurst, and Mudgee areas. At the end of this trip, the manager confirmed he had no issues with the arrangements.
It's worth noting that the manager typically held monthly one-on-one online meetings with the worker. During these meetings, the worker would inquire about his performance, and no issues were raised.
The February meeting didn't occur, and in March, the manager told the worker everything was going okay. The April meeting was cancelled by the manager.
Despite the initial accommodations, the company failed to arrange further client visits in March or April. On 7 May 2024, the worker was suddenly called to an online meeting where he was informed of performance concerns and the company's intention to dismiss him.
During this meeting, the manager stated that the current arrangements were not working due to dropped sales figures. The worker pointed out that he hadn't received the agreed-upon support for client visits and that some clients had been taken from him, affecting his sales figures.
The termination letter, dated 7 May 2024, cited the worker's "inability to perform the inherent requirements of his role" due to the licence loss. It claimed that sales performance had dropped in March and April, indicating face-to-face contact was an inherent job requirement.
The Commission found several issues with the dismissal process:
"I find that the dismissal was harsh, and unreasonable. It was unreasonable to dismiss [the worker] for a drop in performance in all of the circumstances," the Commission stated.
The FWC also noted that the worker's recent sales figures were not significantly different from previous months or other account managers' performance.
For instance, the worker's March performance was 55% of target, compared to 46% in January, for which no complaint was raised. April's performance of 64% was higher than January's and close to figures from July and December of the previous year.
Additionally, the Commission found:
"I also consider that it was unreasonable to dismiss [the worker] for being unable to perform the inherent requirement of his role. I accept that it was an inherent requirement of the role that he make sales. Clearly the loss of licence did not incapacitate him such that he could not perform his sales role."
The FWC emphasised that the worker continued to make sales in March and April without face-to-face contact, and in February, when he received the agreed-upon support, he exceeded his sales targets.
The Commission ultimately ruled that the dismissal was unfair. While reinstatement was not sought, the FWC ordered compensation of 12 weeks' pay, totalling $27,600 before tax.
In its conclusion, the FWC emphasised:
"Taking these matters into account and noting in particular that [the worker] would have continued to work for the company had he not been dismissed, he had worked for [the employer] for only 12 months before the dismissal, and he has attempted to find alternative work without success I consider that [the worker] should receive compensation of 12 weeks' pay in lieu of reinstatement."
This case serves as a reminder to employers about the importance of clear communication, honouring agreed accommodations, and following proper performance management processes before considering termination.
It also highlights the need to consider all circumstances, including past performance and agreed arrangements, when evaluating an employee's performance.
