Adam Diplock v Gateway Homes Pty Ltd

[2021] FWC 6314

[2021] FWC 6314

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 Unfair Dismissal

Adam Diplock
v
Gateway Homes Pty Ltd
(U2021/6133)

DEPUTY PRESIDENT LAKE BRISBANE, 11 NOVEMBER 2021

Application for an unfair dismissal remedy – where there was no valid reason for dismissal – where proper process not followed – where Applicant was unfairly dismissed – where the Respondent ordered to pay the Applicant compensation in the order of 5 week’s pay

[1] This decision concerns an application made by Adam Diplock (the Applicant) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) arising out of the termination of his employment with Gateway Homes Pty Ltd (the Respondent).

[2] By way of background, the Applicant was notified on 9 July 2021 that his employment was to be terminated, effective immediately with 3 weeks’ notice paid in lieu. The Applicant lodged this unfair dismissal application on 14 July 2021.

[3] The Respondent has consistently failed to meaningfully participate in these proceedings. I note that the Respondent has not lodged a Form F3 Employer response despite being followed up by the Commission. On 23 July 2021, the Respondent provided the Commission with a letter outlining that it has no intention of “wasting any further time on this matter.”

[4] The Respondent was unable to be contacted at the prescribed time for a conciliation conference scheduled on 2 August 2021. On Wednesday 4 August 2021, the Commission contacted the Respondent enquiring as to whether the Respondent would like the matter to proceed via a further conciliation and requesting dates or times for which the Respondent was unavailable. On Friday 6 August 2021, Ms Thea Loeskow, Secretary of the Respondent, sent an email to the Commission stating that she had been absent due to illness and noted the following:

“Having submitted my response and my details via email on the 23rd July, on the matter together with advising I would not spend any further time with conciliation with an arrogant, disrespectful, inconsiderate, unreliable, troublemaking, opportunist – it should be me making the complaint.

I rest my case with what I have already provided.”

[5] The matter was subsequently allocated to my Chambers for arbitration. On 9 August 2021, my Chambers issued a notice of listing, accompanied by several directions. The notice indicated that a conference would take place on 16 August 2021 at 2:00pm. When the Respondent was contacted at the prescribed time for the conference the receptionist advised that Ms Loeskow was unavailable and possibly on sick leave.

[6] At 2:56pm on the same day, the Commission sent an email to the parties noting that the Respondent was unable to be contacted for the conference and that the notice of listing and directions continue to apply. In this email, the Respondent was warned that if it did not provide submissions or material by the requisite date or attend the hearing, I would have to decide the matter based on the evidence provided.

[7] The Respondent was again unable to be contacted at the prescribed time for the hearing scheduled for 10:00am on 22 September 2021. When my Chambers attempted to call the Respondent on the number provided, a staff member advised that Ms Loeskow was not available and would not be back for a few weeks. The staff member was not aware of anyone else who had authority to speak on behalf of the Respondent.

[8] At 10:16 am the following email was sent from my Chambers:

“Dear Ms Loeskow

As previously advised, this matter is listed for Hearing before Deputy President Lake at 10am today.

As per the Notice of Listing, we have attempted to contact you for the Hearing.

We understand that you are not available.

The Deputy President notes in your submissions that you have indicated you may not be attending the Hearing.

If the Commission has not heard from you in the next 48 hours, the Deputy President will make a decision in this matter based on the submissions you have provided and on the evidence provided by the Applicant during the Hearing.”

[9] At the time of writing this decision, no further correspondence or communication has been received from the Respondent. In the absence of any further material from the Respondent, I can only rely on the letter and attachments sent by the Respondent on 23 July 2021 in support of the Respondent’s position.

[10] I now turn to consider the merits of the Applicant’s application. The primary issue before me was whether the Applicant was unfairly dismissed.

Applicant’s Material

[11] The Applicant commenced working for the Respondent on 25 October 2017 as a full-time retail sales assistant.

[12] The Applicant states that due to disabilities and ongoing medical conditions limiting his work hours, his employment changed to permanent part-time on 26 October 2020. The Applicant maintains that he has provided the Respondent with medical certificates, as well as full reports from his specialists regarding his current medical conditions and treatment plan.

[13] The Applicant states that the issues first began when he made an enquiry on 4 October 2019 as to why his pay had not increased from a junior rate to the correct minimum wage for his age. The Applicant was told on multiple occasions that if he was to continue bringing up issues with his pay he would be terminated.

[14] Sometime in 2020, the Applicant states that he fractured his foot at work, requiring surgery. The Applicant contends that the Respondent threatened that if he made a workers’ compensation claim he would be terminated. The Applicant decided to “just deal with it” as he “didn’t want to risk jeopardising [his] employment.”

[15] The Applicant also stated that on 1 September 2020, he lacerated his finger at work and upon being directed to go to the hospital he received stiches. The Applicant described being “yelled at and abused” for going to a private hospital for treatment and that he should not have disclosed it was an injury from work as the Respondent was required to pay.

[16] The Applicant states that on multiple occasions he raised various health and safety concerns with the Respondent and was either ignored or told not to bring up his concerns to anyone else. The Applicant provided examples of safety issues including a key being left in a forklift, lack of training regarding chemical usage, tools not being tested and tagged and unsafe electrical work.

[17] The Applicant’s evidence was that he was treated harshly by Ms Loeskow and his employment was threatened after he gave notice to remedy various safety violations. Eventually, the Applicant stated that a workplace health and safety inspector attended the Respondent’s premises in approximately June/July 2020 for a routine inspection and noted various concerns that the Applicant had previously raised with Ms Loeskow. Following the inspection, the Applicant states that he was forced to take over safety and compliance and complete all notices issued to the Respondent relating to approximately 10 safety issues. The Applicant alleges that Ms Loeskow directed him to hide issues from the safety inspector, with Ms Loeskow allegedly stating, “I have no time for that little man, just hide everything from him until he leaves.”

[18] On 11 June 2021, the Applicant states that he had a further discussion with the Respondent regarding the backpay he believed was owed to him. The Applicant recalls that Ms Loeskow told him “if you want to continue that’s fine but you might also be aware that you are employed and I only have to make a phone call to the account and that company will no longer exist.”

[19] On 5 July 2021, the Applicant states that a second work health and safety inspection was carried out at the Respondent’s premises. The Applicant states that the work health and safety inspector advised Ms Loeskow that an employee had made a complaint.

[20] On the same day, the Applicant asked Ms Loeskow if she had read the material he supplied from the Fair Work Ombudsman (FWO) regarding his pay and that she replied “no I haven’t but I will” and advised him not to discuss the issue during work hours, although she also said she was not available after 5:00pm.

[21] On 7 July 2021, the Applicant states that he was informed that he was not required to come into the office until the following week on 14 July 2021 at 10:00am to further discuss his backpay issue as the shop was not busy as it was winter.

[22] The Applicant’s evidence is that he sent an email on 8 July 2021 confirming he had been directed not to attend work despite the fact he had contracted hours and was willing to work. The following day, the Applicant received an email informing him of his termination.

Respondent’s Material

[23] As stated above, the Respondent has provided a letter dated 23 July 2021 outlining why it believes the application is “untruthful, fabricated and misinterpreted.” The Respondent also provided copies of correspondence with the FWO and the Applicant on various dates.

[24] The Respondent maintains that the Applicant was dismissed due to his continued unreliability, stand over attitude and the fact he was inconsiderate towards his fellow workers. The Respondent also noted in the Applicant’s termination email dated 9 July 2021 that it was clear the Applicant was not satisfied with his work conditions.

[25] According to the Respondent, the Applicant commenced employment at 18 years of age having no knowledge of the position and has since been trained by other staff.

[26] The Respondent states that from the time the Applicant had his first ailment, being an ankle injury, he has not fulfilled a full week of employment. The Respondent says that the Applicant was never denied any request to have time off and was paid sick leave when he said it was a health problem. The Applicant was advised that he has never produced a doctor’s certificate for his sickness and the Respondent has just taken his word for it.

[27] The email correspondence provided by the Respondent indicates that the Applicant received a warning on 4 December 2019 regarding constant irregular (late) arrival times and not attending rostered shifts every second Saturday. The Applicant was advised on 15 May 2020, that his employment had been changed from full time to permanent part time-time due to his inability to complete a 76-hour fortnight as required.

[28] On 19 July 2021, the Applicant emailed the Respondent with his proposed working hours and conditions under the part-time arrangement including that he work from 10:00am to 5:00pm with an unpaid lunch break from 1:00pm and 2:00pm Monday to Friday (30 hours per week), with the possibility of staring earlier in the day if approved. The Applicant emailed the Respondent again on 30 October 2020 requesting a response to his proposed part-time working hours. The Applicant also suggested he was happy to be left as full time or change to part-time as per his proposed working hours.

[29] The Respondent sent a letter to the Applicant on 2 December 2020 advising that the Applicant was terminated from full-time employment and classified as permanent part-time, effective from 25 November 2020, due to his health issues and inability to work a 38-hour week. The letter did not specifically address Applicant’s contracted hours although did note that “You [Applicant] have advised you will endeavour to arrive at work as early as possible to assist your fellow workers.” The Applicant was advised that his hourly rate was $25.00 for all hours worked, including Saturdays.

[30] Ms Loeskow admits that she did tell the Applicant that she could close the business given her current circumstances, in that she is an 80-year-old widow of 22 years who is trying to keep her late husband’s business open. However, Ms Loeskow clarified that it was never her intention to close the business, despite advice she has received to do so.

[31] Ms Loeskow’s evidence is that she is often in her office doing bookwork and organising finances and therefore has “no knowledge” of what employees do.

[32] Ms Loeskow addressed the Applicant’s request for 100% adult pay in September 2019. Ms Loeskow states that she emailed the FWO seeking clarification of the Applicant’s request and was advised that the applicant was entitled to 95% pay. The Applicant was advised of FWO’s response. Ms Loeskow noted that due to the Applicant’s continued dissatisfaction with his pay, the Respondent again contacted the FWO seeking advice and was told that the Applicant was entitled to full adult pay. The Respondent queried which advice from the FWO was correct and was told that they would get back to them. The Applicant was kept informed about the conflicting FWO advice and was told that when the advice was confirmed he would be paid and back paid what he was entitled to. In any case, Ms Loeskow states that the Applicant’s final termination pay included an adjustment to 100% from when he turned 20 until when he turned 21. It is the Respondent’s evidence that from 30 October 2020 the Applicant was paid $25.00 per hour which was higher than the Award rate of $21.41.

[33] The Respondent noted that the Applicant became increasingly more demanding and “totally inconsiderate of his fellow workers.” The Applicant failed to follow company policy to sign in and out nor did he advise when he was going to be absent or give notice for time off. The Respondent states that nobody ever knew if or when the Applicant would arrive for work and fellow staff had to put signs on the counter advising customers the shop was shut on their lunch breaks when Adam failed to come to work.

[34] Ms Loeskow was not aware of any workplace health and safety issues regarding unsafe equipment and advised the Commission that she had not personally received any complaints or concerns from the Applicant. Ms Loeskow’s evidence is that the Respondent did not have any knowledge that the Applicant had spoken to ‘Workplace’. I assume Ms Loeskow is referring to the Workplace Health and Safety Regulator in Queensland. Ms Loeskow’s evidence is that the “workplace lady” arrived on Monday 12 July 2021, being after the Applicant received notice of his termination. Further, Ms Loeskow denies the Applicant’s allegation that she directed him to hide safety issues from the inspector.

[35] Ms Loeskow noted that the Applicant requested to discuss issues regarding his pay after 5:00pm and notes that she advised the Applicant that she does not work after hours. Following that conversation, the Applicant was given notice of termination on 9 July 2021. The notice of termination stated that the Applicant’s average weekly hours for the past financial year was 19.5 hours and that since being permanent part-time the Applicant had not worked his full contracted hours (30 hours/week) for one week, having only worked a full day (6 hours), nine times.

[36] Ms Loeskow advised that the Applicant attended the Respondent’s premises on Friday the 23^rd – given the context in which it was written I believe this refers to 23 July 2021 – and “helped himself” to company equipment without permission. Ms Loeskow has been advised that the Applicant is poaching the Respondent’s customers and doing “cash in the hand” jobs.

Legislative framework

[37] Section 390 of the Act provides that the Commission may order a remedy for unfair dismissal if the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed and the Applicant has been unfairly dismissed. Both limbs must be satisfied. Neither party suggested that the Applicant was not protected from unfair dismissal at the time of the termination of his employment. In any event, I am satisfied he was.

[38] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

[39] The parties did not dispute that the Applicant had been dismissed within the meaning of s.385 of the Act.

[40] The Respondent has not made any submission that it is a small business. The Applicant’s evidence is that the Respondent probably has around 16 employees. The Applicant further stated that there are other people likely employed by associated entities of the Respondent, which are also run by Ms Loeskow. I will therefore proceed on the basis that the Small Business Fair Dismissal Code did not apply and that that the dismissal was not a case of genuine redundancy. Accordingly, I must consider whether the dismissal was harsh, unjust or unreasonable.

Was the dismissal harsh, unjust or unreasonable?

[41] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[42] I am required to consider each of these criteria to the extent they are relevant to the factual circumstances before me. 1

(a) whether there was a valid reason for the dismissal

[43] To be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 2 and should not be “capricious, fanciful, spiteful or prejudiced.”3 Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.

[44] The Respondent’s arguments seemed to be that there was a valid reason to dismiss the Applicant, namely his consistently late attendance, unauthorised absences and repeated non-compliance with company policy. 4 The Respondent has suggested that absences were unauthorised (no medical certificates were provided or prior approval given), however the Applicant maintained he had provided medical certificates justifying his absences. The Applicant also strongly disputes that he failed to sign in and out as per company policy. The Respondent has said the Applicant worked an average of 19.5 hours per week, despite his contracted hours being 30 hours per week but has not provided any evidence supporting allegations, in the form of, for example, timesheets, witness statements of employees who had to cover for the Applicant, copies of company policy etc. Neither did the Respondent assert that the Applicant lacked the capacity, due to his medical conditions, to perform the inherent requirements of the role. . Therefore, there is no evidence before me to demonstrate that the Respondent had a valid reason to dismiss the Applicant. This conclusion is the only one I can draw given the paucity of evidence and lack of engagement by the Respondent.

(b) and (c) whether the person was notified of that reason and had an opportunity to respond

[45] A formal warning was provided to the Applicant on 4 December 2019 regarding irregular (late) arrival times and unauthorised absences although this related to the Applicant’s full-time employment. It appears the Applicant did not receive any further formal warnings after commencing the part-time position. When asked in the hearing whether there was an opportunity to respond to or argue about the Respondent’s decision to dismiss him, he replied. “No, it was - yes it was beyond that. I knew at that point, because Workplace Health & Safety had been in. I knew it had just - would be worse from there.” It was clear from the evidence presented that no reason was provided and the Applicant was not offered an opportunity to respond.

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[46] The Applicant was not invited by the Respondent to any discussions regarding the dismissal. A support person was not present at any of the discussions regarding back pay or work, health and safety issues that were initiated by the employer. A support person was not refused and so I weigh this factor as neutral.

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal

[47] The Respondent did not present any evidence on this factor apart from a warning that had been given in 2019 and was no longer relevant. Accordingly, I find this factor weighs against the Respondent.

(f) and (g) the degree to which the size of the employer’s enterprise and the absence of dedicated human resource management expertise would be likely to impact on the procedures followed

[48] The Respondent runs a diverse family company and, although not regarded as a small business, still was not sizeable enough to warrant a full time human resources person. The process of dismissal in this case did not follow that which was required or what would have been expected of a larger enterprise or of one that had someone with dedicated human resource expertise. Accordingly, I find this factor weighs against the Respondent.

(h) any other matters that the FWC considers relevant

[49] There are no other relevant matters that I am required to take into consideration.  

Conclusion

[50] I am not satisfied based on the evidence provided that the Respondent had a valid reason for terminating the Applicant’s employment. Further, the process of dismissing the Applicant fell short of that which is required. Consequently, I find that he was unfairly dismissed.

Assessment of Compensation

[51] Section 390(3)(b) of the Act provides that the Commission may only issue an order for compensation if it is appropriate in all the circumstances. In this matter, it is clear to me that reinstatement is neither practicable nor desirable.

[52] Compensation as a remedy is designed to compensate an unfairly dismissed employee, in lieu of reinstatement, for losses reasonably attributable to the unfair dismissal, within the bounds of the statutory cap on compensation that is to be applied.

[53] Having regard to all the circumstances of the case, I consider that some order for payment of compensation to the Applicant is appropriate. It is therefore necessary for me to assess the amount of compensation that should be ordered to be paid to the Applicant, having regard to the criteria under s.392(2) of the Act.

[54] The established approach to assessing compensation in unfair dismissal cases was first set out in Sprigg v Paul Licensed Festival Supermarket, 5 but has been applied and developed by Full Benches of the Commission in the context of the current Act.6 In short, the authorities indicate that assessing compensation involves a four step process:

“Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.”  7

[55] In Bowden v Ottrey Homes Cobram and District Retirement Villages, the Full Bench noted that in relation to the fourth step, the usual practice is to settle a gross amount and leave taxation for determination. 8

Consideration of the factors in s.392(2) and the Spriggs formula

[56] Clearly, the working relationship had broken down and the Respondent no longer wished the Applicant to work for her organisation. There should have been a conversation about whether there was a mutual opportunity for the parties to separate on some agreeable terms. That did not occur. Instead the Respondent simply terminated the Applicant. The assessment of compensation in this case is difficult given that because of the Respondent’s lack of engagement there was no evidence of there being a valid reason for dismissal and a clear absence of any procedural fairness before afforded to the Applicant.

[57] I am satisfied that there was a significant and terminal breakdown in the relationship between the Applicant and the Respondent. On that basis, even if a proper disciplinary or termination process had occurred, I expect the Applicant’s employment with the Respondent would have ended within eight (8) weeks. Allowing for the fact that the Applicant was originally paid three weeks in lieu of notice, the appropriate amount to be awarded seems to me to be 5 (five) weeks pay.

[58] The Respondent does not contend that the making of a compensation order in favour of the Applicant will adversely impact on the viability of its business enterprise. Accordingly, no adjustment will be made on account of this. 

[59] The Applicant had been employed by the Respondent in some capacity for nearly four years. This length of service, though not insignificant, does not justify any adjustment to the amount of compensation.

[60] There is no evidence regarding the Applicant’s successful attempts to mitigate his loss, beyond his attempts to seek further employment. The Applicant did not provide any evidence of having found work following his termination so it is not necessary for me to make any deduction under Step 2.

[61] I must also consider whether to discount the amount of compensation for contingencies. This step is a means of accounting for the possibility of the occurrence of contingencies to which the Applicant was subject, which might have brought about some change in earning capacity or earnings. While a 25% discount was applied in Sprigg, this amount was decided based on the facts of the case rather than a statement of what is generally appropriate. In assessing the impact of contingencies, the Commission must exercise its broad discretion and consider both favourable and unfavourable contingencies. It is important to note that contingencies only apply to the anticipated period of employment. Given my conclusions above regarding the length of time the Applicant would like have been employed but for the unfair dismissal, I do not consider it necessary to apply any contingencies to the compensation awarded.

[62] There are no other relevant matters that I am required to take into consideration.

[63] The Applicant did not commit any misconduct, so this has no relevance to the assessment of compensation. I note that in accordance with s.392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.

[64] Taking into account each of the factors in s.392(2) of the Act and applying the Spriggs formula, I am satisfied that the compensation awarded to the Applicant should be in the order of five (5) week’s pay.

[65] Accordingly, I order that the Respondent pay to the Applicant the equivalent of five (5) week’s pay.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR735668>

 1   Sayer v Melsteel Pty Ltd[2011] FWAFB 7498 [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002) [69].

 2   Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333 (7 July 1995), (1995) 62 IR 371, 373.

 3   Ibid.

 4   As was the case in Aperio Group (Australia) Pty Ltd (T/A Aperio Finewrap) v Sulemanovski[2011] FWAFB 1436.

 5   Sprigg v Paul's Licensed Festival Supermarket (1998) 88 IR 21 [32].

 6   Sprigg formula as refined in Ellawala v Australian Postal Corporation, Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) [31]; discussed in Smith v Fearon Howard Real Estate Pty Ltd T/A Ray White (Balmain)[2021] FWCFB 581 [16–19].

 7   Sprigg formula as refined in Ellawala v Australian Postal Corporation, Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) [31].

 8   Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge[2013] FWCFB 431.