Alex Dai v The Camberwell Grammar School T/A Camberwell Grammar School

[2017] FWC 6315

[2017] FWC 6315 [Note: An appeal pursuant to s.604 (C2017/6708) was lodged against this decision - refer to Full Bench decision dated 9 March 2018 [[2018] FWCFB 1362] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009  1
s.394—Unfair dismissal

Alex Dai
v
The Camberwell Grammar School T/A Camberwell Grammar School
(U2017/6366)

COMMISSIONER RYAN MELBOURNE, 4 DECEMBER 2017

Application for an unfair dismissal remedy.

[1] On 31 October 2017 the Commission issued a decision in this matter which found that the dismissal of the Applicant was unfair.

[2] Further proceedings took place on 8 November 2017 (programming), 14 November 2017, 15 November 2017 (cross examination by the Applicant of 2 of the Respondent’s witnesses) and 24 November 2017 (final oral submissions of the Applicant) in relation to the issue of remedy. The Respondent filed its final submissions in reply at 1.30pm on 29 November 2017.

[3] This decision deals with the issue of remedy.

[4] At all times during the progress of this matter the Respondent has contended that the remedy of reinstatement is totally inappropriate During the proceedings the Respondent adopted a position that it would accept an order for the payment of compensation of an amount equal to 6 months’ pay. However, in its final written submissions the Respondent contended that even if the Commission considered awarding compensation the appropriate amount was nil. The Applicant commenced this matter claiming reinstatement as her remedy and throughout this matter the Applicant has maintained a very strong position that reinstatement is the only remedy she seeks and that compensation is entirely inappropriate.

[5] The relevant provisions of the Act are s 390 to 392 which are as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

“391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

“393  Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

The Commission’s discretion in relation to remedy

[6] In this matter the requirements of s.390(1)(a) and (b) and 390(2) have been met and therefore the Commission can consider the question of remedy for unfair dismissal.

[7] The Full Bench in Nguyen and Le v Vietnamese Community in Australia t/as Vietnamese Community Ethnic School South Australia Chapter 2said:

“[9] The question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one. No party in the proceedings at first instance suggested that his Honour exercise his discretion not to order a remedy at all. Indeed the Respondent was not opposed to an appropriate amount of compensation being awarded. 8 It is implicit from his Honour’s decision that he concluded that a remedy was appropriate in the circumstances, the issue became the form of the remedy.”

[8] The Respondent has specifically contended that this is a case where the Commission should exercise its discretion and refuse to grant any remedy to the Applicant. In its final written submissions the Respondent contended as follows:

“9. Despite having found that the Applicant's dismissal was "unfair", it is open to the Commission to determine not to award any remedy. This is an appropriate case for such an order to be made.

10. The evidence shows that the Applicant's conduct at work for more than two years was poor, required a great deal of management and resulted in formal warning letters being issued [P Hicks Ex R-1 at (10)- (26), (33) -(34); C Lloyd Ex R-2 at (6), (13), (17), (19)-(23), (28); G Wilson Ex R-7 at (10)-(12), (17)-(23), (28)-(30) ]. The Applicant pursued unsubstantiated allegations of bullying against fellow employees after participating in a mediation process with the other employees concerned that seemingly resolved that issue. Further bullying allegations against fellow employees were raised by the Applicant by way of email throughout 2015 and 2016. Those complaints were not the subject of further investigation as they were not formally raised.

11. In April 2017 the Applicant informed WorkSafe Victoria through CGU that she had been bullied while working for the Respondent (see BB 224-5). The Respondent attempted to fully investigate the complaints in accordance with its established procedures and obligations under the Occupational Health and Safety Act 2004 (Vic) (OH&S Act). The Applicant refused to participate in an investigation of the claims she had made. This refusal to participate and attend preceded her dismissal on 2 June 2017.

12. The Applicant's behaviour and conduct from late 2014 to mid-2017 as revealed by the investigation undertaken by the Respondent through examination of the Applicant's work area, email and computer records which should be taken into consideration when determining whether any remedy should be ordered. The evidence shows, as listed at [19] to [26] below that despite final warning correspondence and repeated attempts to assist the Applicant to improve her work performance and modify her behaviour she did not do so or attempt to do so.”

[9] In the present matter the Commission is of the considered view that it should exercise its discretion to grant a remedy to the Applicant for the unfair dismissal.

[10] It is relevant to note that the reason for dismissal was that the Applicant engaged in serious misconduct by failing to attend a meeting in circumstances where she was too unwell to attend. None of the reasons advanced by the Respondent as to why the Commission should not grant any remedy touch upon the reason for the dismissal or the finding made by the Commission that the dismissal was unfair. Each of the reasons advanced by the Respondent as to why the Commission should not grant any remedy are more appropriately addressed to the form of any compensation.

[11] Not to grant a remedy to the Applicant would compound the unfairness of the dismissal. Granting a remedy to the Applicant would address the unfairness of the dismissal. Payments made to the Applicant at the time of the dismissal do not provide a sufficient basis to deny the Applicant a remedy for the unfair dismissal. Nothing presented to the Commission during the proceedings in this matter would support a conclusion that the Commission should not exercise its discretion to grant a remedy to the Applicant. Having determined that the Commission should exercise its discretion to grant a remedy to the Applicant the Act requires that the Commission firstly consider reinstatement before any consideration can be given to compensation.

The Relevant Authorities in relation to Reinstatement

[12] In Nguyen the Full Bench said:

“[10] Subsection 390(3) underscores the primacy of reinstatement as a remedy for an unfair dismissal as the discretion to order a remedy of compensation may only be exercised if the Commission is satisfied that reinstatement is ‘inappropriate’. Further, one of the objects of Part 3-2 of Chapter 3, in which the unfair dismissal provisions appear, is “to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement”. We would observe that to describe reinstatement as the ‘primary remedy’, is to simply recognise that reinstatement is the first, perhaps even the foremost, remedy under the Act. The relevant question in determining whether to grant the remedy of reinstatement of an employee in relation to a dismissal that is found to have been ‘unfair’ is whether reinstatement is appropriate in the particular case.

[13] In an earlier Full bench decision in Regional Express Holdings limited t/as REX Airlines v Richards 3, the Full Bench said:

“[23] It is clear from the terms of s.390(3)(a) that, in circumstances where a remedy is appropriate, compensation must not be ordered unless the tribunal is satisfied that reinstatement is inappropriate. Seen in the proper context the Commissioner’s statement that reinstatement is the presumptive remedy is not indicative of any error in the decision. The section provides that compensation must not be ordered unless reinstatement has been found to be inappropriate. There is no basis for concluding that the Commissioner interpreted the section differently. Rex’s first submission on remedy must fail.

[24] In relation to remedy, therefore, the first question is whether reinstatement is appropriate.” 

[14] Any consideration of the appropriateness or inappropriateness of reinstatement as the remedy in this matter must proceed on the basis identified in the authorities.

[15] In Nguyen the Full Bench said:

“[16] We now turn to the relevant question concerning the appropriateness of reinstatement.

[17] Reinstatement might be inappropriate in a whole range of circumstances, for example if such an order would be futile such as where reinstatement of an employee would almost certainly lead to a further termination of the employee’s employment because the employer has since discovered that the employee engaged in an act of serious misconduct which was only discovered after the employee’s termination or if the employer no longer conducts a business into which the employee may be reappointed. The fact that the employer has filled the position previously occupied by the dismissed employee would rarely, of itself, justify a conclusion that reinstatement was not appropriate. As a Full Bench of the AIRC observed in Smith v Moore Paragon Australia Ltd,:

“It will often, if not typically, be the case that the position occupied by an applicant for relief under s.170CE of the Act will, at the time the application is arbitrated, either no longer exist or no longer be vacant. In our view that bare fact would rarely, on its own, justify a conclusion that an order for reinstatement was not ‘appropriate’. To adopt such an approach would tend to defeat the remedial purpose of the legislation.”

[18] A similar observation was made by Northrop J in Johns v Gunns Ltd 

[19] Reinstatement may be inappropriate if an employee is incapacitated because of illness or injury. The weight to be accorded to ongoing incapacity when considering whether reinstatement is appropriate will depend upon all of the circumstances of the case. 

[20] The most common argument advanced in support of the proposition that reinstatement is inappropriate is the proposition, variously expressed, that there has been a loss of trust and confidence such that it would not be feasible to re-establish the employment relationship.

[21] In Perkins v Grace Worldwide (Aust) Pty Ltd the Full Court of the Industrial Relations Court considered the effect of a loss of trust and confidence on the question of the “practicability” of a reinstatement remedy and said:

“Trust and confidence is a necessary ingredient in any employment relationship... So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.

At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee’s employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court’s finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.

If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.

Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.

It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee’s employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.” 

[22] As the Full Bench of the AIRC observed in McLauchlan, although Perkins was decided under the IR Act, the Court’s observations reproduced above remain relevant to the question of whether reinstatement is appropriate in a particular case. 

[23] In speaking of ‘trust and confidence’ in this context we are concerned with that which is essential to make an employment relationship workable. It is not to be confused with an implied term in a contract of employment of mutual trust and confidence, the existence of which was recently eschewed by the High Court in Commonwealth Bank of Australia v Barker. 

[24] While it may be accepted that trust and confidence is a necessary ingredient in any employment relationship, it would be wrong to assume that it is the sole criterion or even a necessary one to determine whether or not reinstatement is appropriate. As Justice Gray observed in Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (O’Connor) the development of the law relating to trust and confidence in the employment relationship commenced when that relationship invariably involved a close personal relationship between the employer and employee, but with the emergence of corporate employers, the importance of trust and confidence in the employment relationship has diminished.

[25] Justice Gray’s remarks were considered by Deputy President Gostencnik in Colson v Barwon Health in which the Deputy President observed:

“I do not take his Honour’s comments to mean that trust and confidence as an element of the employment relationship is no longer important. It is merely recognition that in many cases it will be important to have regard to the totality of the employment, and that in the case of a corporate employer, the loss of trust and confidence in the employee will be by a manager or managers of the corporate employer. But as his Honour observed, in such cases the “critical question must be what effect, if any, a loss of trust by the manager in an employee is likely to have on the operation of the workplace concerned”. It is important to understand that his Honour’s observations were made in the context of an interlocutory application while His Honour was considering “balance of convenience” arguments against reinstatement on an interlocutory basis. His Honour’s observation about the effect of the shift from a personal to a corporate employment relationship were made as an introduction to his conclusion that the respondent did not provide any evidence on the “critical question” as identified. So much is clear from the following passage:

. . . It might be more significant, for instance, to know the name of Mr Voss’s immediate supervisor and to know the attitude of that person towards him. If the immediate supervisor had no trust in Mr Voss, it might also be relevant to know whether it would be possible to place Mr Voss in another part of the workplace, under another supervisor, who did have such trust. It would also be relevant to know what effect any lack of trust by any manager or supervisor in a particular employee might have on the conduct of operations in the workplace. There is no evidence as to any of these matters.

[43] Resort to an assertion that trust and confidence in a particular person have been lost cannot be a magic formula for resisting the compulsory reinstatement in employment of the particular person.” 

In my view, His Honour is merely saying that it is not enough to simply assert that trust and confidence in an employee has been lost. Where this is relied upon then there must be evidence from the relevant managers holding that view and an assessment must be made as to the effect of the loss of trust and confidence on the operations of the workplace. In short, all of the circumstances must be taken into account. This seems evident and is hardly controversial.”

[26] Permission to appeal from Deputy President Gostencnik’s decision was refused. 

[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

•  Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement. 

•  Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.

•  An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.

•  The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.

•  The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.

[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”

[16] Whilst the Commission has quoted at length from the Full Bench decision in Nguyen a summary of the decision was provided by the Full Bench in King v Patrick Projects P/L, [2017] 2809 (King) where the Full Bench said:

“[17] The general principles concerning consideration of whether the remedy of reinstatement should be granted were dealt with in the Full Bench decision in Nguyen v Vietnamese Community in Australia. Relevantly, the Full Bench said:

•  the question whether to order a remedy remains a discretionary one; 

•  reinstatement might be inappropriate in a range if circumstances, including that it would be futile, or the employee was incapacitated by illness of injury, or because of a loss of trust and confidence; 

•  “trust and confidence” was that which was necessary to make an employment relationship workable; 

•  trust and confidence is not the sole or even a necessary criterion for reinstatement;

•  in relation to a contention of a loss of trust and confidence, each case had to be decided on its own facts; and

•  an allegation of a loss of trust and confidence must be soundly and rationally based. 

The Applicant’s case for Reinstatement

[17] The Applicant has not merely made a submission that reinstatement is the only appropriate remedy. Rather the Applicant has made clear that she considers that reinstatement is the only remedy that she will accept. The Applicant has made it clear that if she fails to get reinstated that she intends to renounce her Australian citizenship and return to China with her school age daughter. The Applicant has also made clear that if she is not reinstated she will appeal the decision and if necessary appeal to the Federal Court. It is therefore very clear that the Applicant is passionate about the rightness of her cause and is zealous in pursuing that cause. There is nothing wrong with the Applicant being so passionate and zealous. The Commission notes that the Applicant is free to pursue different courses of action once a decision in this matter is made.

[18] In her final oral submissions the Applicant contended that reinstatement was appropriate for the following reasons:

If the Commission ordered reinstatement then the Respondent or the staff of the Respondent would not bully her in the future. Even if bullying did occur the Applicant contends that once reinstated she would not subsequently be fired by the Respondent. 4

As long as other staff “stop yelling in front of me and don't make up stories of me, I believe as time goes by our relationship will be back on track again.” 5

“In work environment every workplace is the same, between each other if they cannot deal with each other, but they still should be okay to work with each other although they don't like each other.  There shouldn't be any impact on their cooperation,”. 6

Reinstatement should be ordered because “if you don't let me go back this will encourage the bullying behaviour.” 7

Reinstatement is necessary as “I need to stay in the job in order to look for another job.” 8

Reinstatement is appropriate because “If I don't go back sooner, I can't explain clearly in my résumé why I - the real reason why I left.  So I hope I could have continuous service.” 9

Reinstatement is appropriate because “I don't have any direct relationship between the business manager, nor any negative relationship between IT team and no negative relationship between Equal Opportunity Office and the secretary and the property manager.  Even if they provide these untrue statements, I could ignore this.” 10

“In any working environment like or dislike or after any argument we can't just speak less of this as reasons to stop our job.  If they stop me from my job because of those reasons it exactly means that he thinks his job is more important than my job, so in that case I'm the one who is being sacrificed.” 11

Reinstatement is appropriate because as the Applicant is a union member the union as her representative would “make relationship with school start afresh”. (PN7356)

Reinstatement is appropriate “I can work with everyone.  This already from second warning letter.  Same situation as today.” 12

If reinstatement is ordered neither Mr Wilson nor Ms SM would engage in any bullying of the Applicant and Mr Wilson would not mind working with the Applicant again. 13

The Respondent’s case against Reinstatement

[19] The Respondent through its witness has contended that there is no longer any trust or confidence in the Applicant and that the necessary level of trust and confidence to make an employment relationship work cannot be reestablished. The final written submissions of the Respondent contained a detailed analysis of the evidence in the matter to show that the Respondent had a well-founded basis for its loss of trust and confidence in the Applicant. The Respondent also contended that the Applicant had lost her trust and confidence in the Respondent and that this was a significant factor supporting a finding that reinstatement was inappropriate in this matter.

[20] Apart from the contentions in relation to loss of trust and confidence the Respondent relies upon a second argument that reinstatement is inappropriate. The Respondent contends that “ongoing issues with the Applicant’s mental health create a situation where she is unable to perform the work required of a lab technician at the school.”

Matters to be excluded from consideration

[21] Any consideration of the appropriateness or inappropriateness of reinstatement must proceed on the basis of not taking into account irrelevant matters.

[22] The Commission notes that the Applicant has a serious conflict with the Respondent over the Respondent’s actions in refusing to allow the Applicant to return to work after a workplace injury. That conflict had been ongoing for several months before the dismissal occurred and continues to the present time. Additionally the Commission notes that the Applicant has made more than one complaint to WorkSafe about the safe storage of chemicals at the school and that as a result of these complaints WorkSafe has visited and inspected the school. The most recent complaint from the Applicant occurred during the currency of proceedings in this matter. The Respondent, in its final written submissions, identified evidence of the Respondent’s loss of trust and confidence in the Applicant and part of that evidence was described as follows:

“21 (c) Since the hearing of this matter commenced the Respondent has been the subject of investigation by WorkSafe Victoria pursuant to the OH&S Act with regard to a complaint about possible breaches of that Act with regard to handling and storage of chemicals and other matters. The School was informed by WorkSafe that the Applicant made that complaint. [C Lloyd PN 2075; PN 2125- 2131; Ext R-5 Further Statement of C Lloyd] This issue of itself has led to a further erosion of the School's trust and confidence in the Applicant particularly in circumstances where the Applicant has not worked in the science lab for at least a year. The continued allegations regarding the school's non-compliance with statutory handling requirements demonstrates an "issue" or grudge that the Applicant has with the school and does not engender confidence in the Applicant's attitude towards the school.”

[23] Consistent with the very clear statements in both Nguyen and King those conflicts between the Applicant and the Respondent over the Applicant exercising a workplace right either in relation to return to work or in relation to OHS matters must not be taken into account in considering the appropriateness or inappropriateness of the remedy of reinstatement.

Consideration of the trust and confidence issue

[24] In Nguyen the Full Bench said:

“[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”

[25] When talking about a party the discussion in unfair dismissal cases most often concerns the rationality of the attitude of the employer or the employer’s managers and supervisors. But it is also relevant to consider the rationality of the attitude taken by the employee.

[26] In King the Full Bench said:

“[21] The assessment of whether an employment relationship can be restored by way of a reinstatement order may require an evaluation of the personal attitude of the dismissed employee to the employer and its personnel, since that may be relevant to whether the necessary level of trust and confidence can be re-established.

[27] In the context of the present matter, at the same time that the Applicant is pursuing the remedy of reinstatement the Applicant maintains that:

(1) the Principal of the school, and the Head of Science and the Business Manager have lied in their witness statements and have lied under oath in giving their evidence to the Commission, and that,

(2) the Head of Science has fabricated evidence at the school for the purpose of getting the Applicant blamed for an unsafe work area and unsafe storage of chemical waste, and that,

(3) the Head of Science conspired with and directed two other Laboratory Technicians employed by the school to take the Applicant into a room and lock the door of the room and then try to force the Applicant to resign from the school, and that,

(4) the Applicant does not trust two of the Laboratory Technicians that are her work colleagues and that these two Laboratory Technicians have lied about her and are trying to get rid of her, and that

(5) two written warnings given to the Applicant during her employment were based on untrue accusations made against the Applicant, and that,

(6) several employees at the school have engaged in deliberate conduct intended to cause trouble for the Applicant.

[28] The Applicant wants to be reinstated into a workplace where she does not trust the Principal or the Head of Science who is her direct supervisor or some of her work colleagues.

[29] The picture painted by the Applicant is that of a hostile work environment where her direct supervisor and other staff in her area have been trying to get rid of her for quite some time. Whilst the Applicant contends that reinstatement is the appropriate remedy the Applicant implicitly acknowledges that she believes that there is a likelihood of a hostile environment continuing. The Applicant contends that if reinstatement occurs she will isolate herself in her work area in order to avoid interaction with other workers. The Applicant put it as follows:

“Only they allowed me back to work, I will reinstall every relationship; I will close myself in my area, own it, not go to staff room, not go to public toilet.  They have toilet upstairs.  It only say "student" and not say "staff."  And the students all not receive chemistry student.  Okay, my area, two lab, prep room, only three rooms - I can 24 hours stay there, no boring.” 14

[30] In the context of the Respondent’s and Applicant’s workplace, such an arrangement appears to be both impractical and unreasonable. The workplace is a secondary school which means that whilst it is a workplace for the Applicant it is also a learning environment for the students. It is difficult to comprehend how a viable and productive relationship could be maintained between the Applicant and the Respondent in circumstances where the Applicant refuses to interact with other staff, other than in the limited confines of preparing for and cleaning up after chemistry practicals. The Applicant’s proposal flies in the face of the evidence which identifies the necessity of a team approach amongst Science Department staff.

[31] In a number of areas the views held by the Applicant about the Head of Science, who is her supervisor, or about the Business Manager or about the Principal do not appear to be well founded.

[32] Two examples are sufficient to illustrate this.

[33] The first example concerns an incident involving the removal of the Applicant’s lab coats from her work area whilst the Applicant was on leave and sending the Applicant’s lab coats together with all other lab coats to the cleaners and the reaction of the Applicant upon her return to work and her reaction to finding the cleaned lab coats.

[34] The Applicant contends that she was the person who organised the cleaning of lab coats and that she had done so for a few years. Given the Applicant’s role she had more than one lab coat and that she always had a clean lab coat over the back of her chair in her work area. In late November 2014 all of the schools lab coats were sent off for cleaning when the Applicant was attending a conference and was not at school. Another employee undertook the task of collecting the lab coats for cleaning. That employee sent an email to staff asking staff who wanted their lab coats cleaned to bring them to the science printer area. That other employee took all of the Applicant’s lab coats including a clean lab coat which the Applicant had left on her chair. The Applicant arrived back at work on 2 December 2014 to find her lab coats missing. The Applicant became upset as the Applicant considered that it was a deliberate action of an employee to remove the Applicant’s lab coat from the Applicant’s work area and that this was done for the purpose of causing trouble for the Applicant. As the Applicant put it:

“the lab coat equal problem, the same happened on me as the chemical waste.  The purpose of just get rid of me in due course.” 15

[35] Mr Wilson gave evidence about the lab coat issue. Mr Wilson acknowledged that the Applicant was the person who had previously been involved in collecting the lab coats for cleaning. Mr Wilson acknowledged that the lab coats were collected when the Applicant was away at a conference. Mr Wilson explained the process of collecting lab coats by confirming that an email requesting lab coats be placed in a certain area would be sent to staff but also that if a lab coat was seen lying around it would be picked up and sent off for cleaning. The cleaned lab coats were delivered back to the school before the Applicant returned to school from her conference and the cleaned lab coats were in white plastic bags on the floor outside Mr Wilson’s office. When the Applicant returned to wok she was upset at finding her lab coat had been removed. Mr Wilson came across the Applicant lying on top of the plastic bags full of lab coats crying and pulling apart the plastic bags trying to find her lab coat. Mr Wilson’s evidence was that the action of sending the Applicant’s lab coat off for cleaning was not done deliberately to cause any trouble for the Applicant. As Mr Wilson put it:

“And yours was taken.  It was probably a mistake.  It shouldn't have been done because of the sensitivities to that – to you. It was done, and then you – they could not predict that a few days later you would be so emotionally distraught by the whole process.  I don't think anyone could predict the way you responded.” 16

[36] The second example concerns the storage of waste chemicals in a cupboard which was used by the Applicant and was in her work area.

[37] The school had an Open Day on Saturday 10 October 2015 and as part of that open day some chemical experiments were performed to showcase the chemistry curriculum. The Applicant and the Head of Science and other Laboratory Technicians and science teaching staff were in attendance. The Applicant left the school about 2.30pm on the Saturday. On the following Monday the Applicant was on leave. Another staff member noticed a chemical smell coming from the Applicant’s work area and noticed a stain on the floor next to a locked cupboard which appeared to be chemical waste leaking from the cupboard. When the cupboard was opened the school asserts that the cupboard contained incorrectly stored and labeled chemical waste. The school arranged for an external provider to visit the school and to remove waste chemical from the cupboard. The waste chemicals were not properly marked and were not in appropriate containers hence the leak. On her return to work the Applicant was disciplined for the incorrect handling and storage of chemical waste.

[38] The Applicant contended that the chemical waste in the cupboard and the leak were fabricated by either the Head of Science or another Science Department staff member.

[39] For the Applicant’s contention to have any validity sometime between 2.30pm on Saturday 10 October 2015 and when the chemical smell was noticed by a staff member on Monday 12 October 2015 morning someone removed correctly stored and correctly labelled chemical waste from the cupboard and replaced it with a reasonable quantity of chemical waste in incorrect containers such as plastic food containers and without correct labels on the containers and ensured that some of the chemical waste was poured on the shelf in the cupboard and onto the floor next to the cupboard to simulate a leak.

[40] Whilst this scenario is clearly possible it would appear to be improbable. There is clearly a sense of improbability about the Applicant’s claim that a staff member at the school would have the requisite level of malice to go to the lengths necessary and in the timeframe identified to fabricate the situation which existed on the Monday after the Open Day.

[41] In the circumstances of the present matter where the Respondent has consistently maintained a position that reinstatement is totally inappropriate it is not surprising that the Respondent’s witnesses contend that the necessary level of trust and confidence has been irrevocably destroyed. In the circumstances of the present matter the weight of evidence supports the reasonableness of the Respondent’s view. The Commission does not agree with some of the conclusions which the Respondent has drawn from the evidence. However, the Commission does not need to analyze each and every conclusion drawn by the Respondent and set out in its final written submissions. As the Full Bench said in Nguyen:

“Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive.”

Consideration of the capacity to perform issue

[42] The second limb of the Respondent’s case against reinstatement concerns the capacity of the Applicant to perform the inherent requirements of her job. The Respondent relies on the Full Bench decision in Smith v Moore Paragon Aust Ltd 17 and the principles set out at [51] and [54]. I accept that those principles are relevant in the present matter.

[43] The Commission accepts that the Applicant is still suffering from mental health issues which have prevented her from working. However, the Commission notes that the Applicant’s treating doctor has specifically recommended that the Applicant be reinstated into her former job as this will significantly assist the Applicant to regain her health. To the extent that there is any supporting medical evidence concerning the Applicant’s capacity to perform the inherent requirements of her job the most recent evidence supports a conclusion that if reinstated the Applicant would be able to attend work and perform the inherent requirements of the job. A return to work is specifically recommended as being in the best interests of the Applicant’s health.

[44] As part of its contentions the Respondent relied on the conduct of the Applicant during this matter:

“the conduct of the Applicant before the Commission during the hearing, her disorganised materials, her inability to complete questions, her propensity to be distracted and follow irrelevant lines of argument and thoughts when conducting her case and when in the witness box shows that she is incapable of operating under pressure as well as incapable of clear and logical thinking. These attributes are necessary for the Applicant's substantive role which involves the handling and use of chemicals and scientific equipment in a school setting.”

[45] The Commission does not accept that the conduct of the Applicant during these proceedings should be taken into account when considering whether or not the Applicant has the capacity to perform the inherent requirements of her job. It is clear that the Applicant has a current mental health issue and her conduct during these proceedings reflects the presence of that mental health issue. However the capacity issue is not concerned with the Applicant’s conduct at the Commission but rather her capacity to perform the inherent requirements of her job. In all of the circumstances of the present matter the Applicant’s current ill health is temporary and her recovery will be assisted by a return to work. The Commission is not satisfied that reinstatement is inappropriate based upon the Applicant’s capacity to work.

Conclusion as to appropriateness of reinstatement

[46] Having regard to all of the circumstances of this case the Commission is satisfied that reinstatement is not an appropriate remedy in this matter. Whilst the Commission accepts that the Applicant has the capacity to perform the inherent requirements of her job, this is outweighed by the inability of a viable and productive relationship to be restored between the Respondent and the Applicant.

Compensation

[47] The Commission is of the considered view that the remedy of compensation is appropriate in the circumstances of this case. Having earlier decided that this case was one in which it was appropriate for the Commission to exercise its discretion to grant the Applicant a remedy then, once the Commission has determined that reinstatement is inappropriate, it would then be inappropriate not to grant the remedy of compensation. Furthermore, for reasons which are set out below in relation to the calculation of an amount of compensation it is clear that compensation is itself an appropriate remedy in this matter.

[48] The calculation of an amount of compensation must be done in accordance with s.392(2). The practical way in which s.392(2) is applied has been discussed in many decisions of the Commission and its predecessors. The most quoted case is Sprigg v Paul’s Licensed Festival Supermarket 18 at 32 and the approach adopted in that case is commonly referred to as the Sprigg formula. That formula has been refined in later cases.

[49] The starting point in any calculation of compensation is to determine how much remuneration the Applicant would have received if she had not been dismissed when she was. Estimating what would have happened if the Applicant had not been dismissed is an exercise in speculation. It must be done but the speculation must be reasonable. In the circumstances of the present matter the Commission considers that if the Applicant had not been dismissed she would have remained in employment for a number of months but certainly less than 1 year.

[50] At the time of her dismissal the Applicant had been directed to participate in an internal investigation over alleged bullying complaints made by the Applicant against other staff. The Applicant denied making any such complaints and even though the Respondent directed the Applicant to provide details of the alleged bullying the Applicant denied that she had made any bullying complaint. The demand from the Respondent that the Applicant fill in a bullying complaint form led the Applicant, under advice from her union, to fill in a bullying complaint but to identify that no bullying conduct was being alleged against anyone. Notwithstanding receipt of this completed form (with no bullying conduct being alleged) the Respondent continued to require the Applicant to participate in an internal inquiry.

[51] The speculation that must be engaged in by the Commission is to consider what would have happened if, rather than dismiss the Applicant, the Respondent continued along the path of dealing with the bullying investigation. It is difficult to see how the Respondent could undertake or conclude an internal investigation into an alleged bullying complaint from the Applicant when the Applicant maintained that no bullying had occurred. Given that the Respondent had commenced the investigation on the basis of a communication from the Respondent’s work cover insurer as to what the Applicant had said to the insurer the most likely outcome would have been a finding that the Applicant had made a false complaint of bullying to the insurer. Most likely the Respondent would then have initiated some form of disciplinary action against the Applicant for making a false bullying complaint. The likelihood of this scenario eventuating is high given the way in which a previous allegation of bullying made by the Applicant was dealt with. Any attempt to discipline the Applicant would most likely have been resisted by the Applicant and her union and a dispute would most likely have arisen.

[52] Additionally, it is clear from the way in which the Respondent conducted its case in this matter that the Respondent had significant concerns as to the ongoing conduct of the Applicant in the workplace. At some point of time the Respondent would have had to put all of the allegations of misconduct to the Applicant and then give the Applicant an opportunity to respond to the allegations. It is reasonable to presume that any internal investigation undertaken by the Respondent into allegations of misconduct would have been resisted by the Applicant and her union. The likelihood of an industrial dispute being created concerning the allegations, the investigation and any resulting proposed disciplinary action by the Respondent is very high. It would appear almost inevitable that an independent process would be required to be used to assess the allegations made by the Respondent and the Applicant’s response to those allegations and to determine whether the Respondent’s proposed disciplinary action was appropriate. Any such independent process would have taken considerable time and involved a large number of persons. A few examples illustrate just how difficult and time consuming such an independent process would have been.

[53] The Applicant during proceedings before the Commission made very strong accusations against two other laboratory technicians in that that they took her to a room and pressured her to resign. The Commission had no opportunity to examine those two laboratory technicians and thus could not come to any concluded view about that incident. If the Applicant had not been dismissed then at some stage an independent person would have had to interrogate the Applicant and the two other laboratory technicians in order to come to a concluded view as to the truth of the Applicant’s allegation.

[54] Similarly in relation to the allegation made by the Respondent that the Applicant had stored waste chemicals unsafely and the Applicant’s counter allegation that she was framed by other staff ,a thorough investigation of that matter would be required to determine the truth of matters. What was before the Commission was insufficient to enable any concluded view as to what actually occurred. A proper investigation would have required more than consideration of the evidence given by Mr Wilson and the Applicant. If the Applicant had not been dismissed then at some stage an independent person would have had to interrogate the Applicant, Mr Wilson, the staff member who discovered the smell, the staff member who opened the cupboard, the security system at the school to identify (if possible) who had access to the area during the relevant time frame and other matters in order to come to a concluded view as to the truth of the Respondent’s and Applicant’s counter allegations.

[55] The Commission is confident that had the Applicant not been dismissed she would have been employed for at least 3 months but possibly up to 5 months if the allegations of misconduct had been proven and the Applicant would have been employed for up to a year if the allegations had not been proven. Even if after a thorough and independent investigation and hearing the several allegations made by the Respondent had not been proven the Commission has little doubt that the employment relationship would have ended in no more than a year after the date upon which the Applicant was dismissed.

[56] For the purpose of calculating the amount of remuneration that the Applicant would have received had she not been dismissed the Commission considers that a period of 4 months is reasonable. From this amount needs to be deducted the amounts received by the Applicant in the period of 4 months after the date of dismissal as payments of workers compensation. Given the approach of the Commission in coming to the view that 4 months remuneration would have been earned the Commission makes no further deductions for contingencies.

[57] The Commission makes no deductions for misconduct pursuant to s.392(3) as the Commission is not satisfied that misconduct of the Applicant contributed to the Respondent’s decision to dismiss the Applicant. This is so given that the reason for dismissal was failure to attend a meeting for which the Applicant did not attend due to illness. The amount of compensation which flows from the above consideration is clearly less than the compensation cap set by s.392(5).

[58] Given that the actual dollar values are not known to the Commission at this point of time the Commission will express the amount of compensation to be paid to the Applicant as follows:

The Respondent is to pay to the Applicant an amount of compensation in lieu of reinstatement which is equal to the difference between (1) the amount the Applicant would have received as payment of wages or salary together with superannuation for the period of 4 months from 2 June 2017 to 1 October 2017, and, (2) the amount paid to the Applicant as workers compensation payments for the period between 2 June 2017 and 1 October 2017. The amount so calculated is to be taxed at the appropriate rate.

[59] An order giving effect to this decision will be issued separately.

COMMISSIONER

Appearances:

Mr C Lloyd on behalf of The Camberwell Grammar School.

Ms A Dai on her own behalf.

Hearing details:

2017.

Melbourne:

October 9, 10 and 25.

November 8, 14, 15 and 24.

 1   [2017] FWC 5561.

 2   [2014] FWCFB 1798.

 3   [2010] FWAFB 8753.

 4   Transcript at PN7258.

 5   Ibid at PN7258.

 6   Ibid at PN7260.

 7   Ibid at PN7289.

 8   Ibid at PN7315.

 9   Ibid at PN7311.

 10   Ibid at PN7363.

 11   Ibid at PN7365.

 12   Ibid at PN7547.

 13   Ibid at PN7549 – PN7579.

 14   Ibid at PN6993.

 15   Ibid at PN6078.

 16   Ibid at PN6099 – PN6100.

 17   [2004]AIRC 57.

 18 (1998) 88 IR 21.

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