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Ultra Tune’s dismissal procedures in need of a service

Errors in its process of dismissal resulted in unfair dismissal.
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Ultra Tune’s dismissal procedures in need of a service

Ultra Tune’s dismissal procedures in need of a service

19 August 2020

By Mike Toten

When Ultra Tune dismissed a training manager for avoiding being involved in the training of franchisees, it had a valid reason to do so. However, errors in its process of dismissal resulted in it being forced to pay the manager $9583 for unfair dismissal, with the Fair Work Commission reasoning that his employment would have lasted one further month if the dismissal process had been fair.




Facts of case

When the employee was hired as national training manager, Ultra Tune required him to develop a software program to assist franchisees to manage their businesses, and to train them in how to use it. His job was to liaise with IT and software designers, develop program manuals and train franchisees face-to-face. All this was set out in the job description. However, when launched, the program was beset by problems and Ultra Tune had to spend more than $500,000 on rectification work. It brought in a consultant as head of IT, and when that happened it expected the training manager to become more involved in training delivery and help franchisees to transition to the new system.

However, the employee regarded his role as removed from face-to-face training of franchisees. He told the managing director that he disliked contact with franchisees and did not want to perform that role. Ultra Tune claimed that it discussed other roles with him but concluded that a suitable alternative did not exist, and therefore decided to dismiss him.


Decision

Although Ultra Tune had two valid reasons to dismiss the employee – his contribution to the failed program and his refusal to train franchisees face-to-face – it did so unfairly for the following reasons:
  • The discussion referred to above was only a general one and not a serious attempt to find another role.
  • It did not warn the employee about his performance. It simply told him his employment was ending as a cost reduction measure.
  • Allegations of poor performance were not put to him, and he had no opportunity to respond.
  • Although Ultra Tune did not have in-house HR expertise, it had readily available external resources it could have used.

Reinstatement was not an option because success of the training program was crucial to Ultra Tune’s business success. Had it followed a fair dismissal process, the employee would have lasted about one month longer, so the FWC awarded him compensation of $9583 to cover that period.

The bottom line: The FWC took into account Ultra Tune’s business operation model when making its decision. Ultra Tune had relatively few in-house employees but about 260 franchisees around Australia. It was therefore very important for a manager in this employee’s role to maintain personal contact with franchisees and be aware and responsive to problems they had in operating their businesses. A manager who was clearly unwilling to seek and maintain the required level of contact was not suitable for reinstatement.

As to the fairness of the dismissal process, it did not have specialist in-house HR expertise, but it did employ in-house accountants and lawyers, and would have had ready access to external HR expertise.


Read the judgment

Madden v Ultra Tune Australia Pty Ltd [2020] FWC 4036, 31 July 2020

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