Alexandra Mercuri v Green Castle Renmark Pty Ltd T/A Renmark Country Club

[2019] FWC 7147

[2019] FWC 7147

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Unfair dismissal

Alexandra Mercuri
v
Green Castle Renmark Pty Ltd T/A Renmark Country Club
(U2018/12151)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 16 OCTOBER 2019

Application for an unfair dismissal remedy – rehearing - jurisdiction - minimum employment period – service as a casual employee – whether “regular and systematic” – whether “reasonable expectation of continuing employment” – whether “transferring employee” – employee protected from unfair dismissal

Application for an unfair dismissal remedy – rehearing - jurisdiction – whether casual employee “dismissed”- dismissal found

Application for an unfair dismissal remedy – rehearing – whether valid reason – whether procedural fairness – dismissal harsh, unjust and unreasonable

Application for an unfair dismissal remedy – rehearing – remedy – whether reinstatement appropriate – relationship irretrievably broken – likely period of ongoing employment – mitigation – compensation ordered

[1] Ms Alexandra Mercuri (Ms Mercuri or the Applicant) has applied to the Fair Work Commission (the Commission) under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in relation to her dismissal by Green Castle Renmark Pty Ltd trading as Renmark Country Club (RCC, the employer or the Respondent). She claims to have been unfairly dismissed on 12 November 2018 when she was no longer rostered to work.

[2] She seeks reinstatement or in the alternative compensation. She also seeks back pay, payment for an alleged underpayment of wages, a written apology, a non-disparagement agreement and an employment separation certificate.

[3] RCC oppose the application and raise two jurisdictional issues. It asserts that Ms Mercuri was not a person protected from unfair dismissal under the FW Act because she had not completed the minimum employment period of service required by sections 382(a) and 383 of that Act.

[4] RCC further contend that were Ms Mercuri a person protected from unfair dismissal, she was not dismissed. It asserts that she was a casual employee who had no ongoing rights to be rostered and that the absence of rostered shifts beyond 11 November 2018 did not constitute a dismissal.

[5] On 17 December 2018 conciliation of the application was conducted by a Commission-appointed conciliator. It was not resolved. It was referred to a Member for hearing and determination.

Case background

[6] This matter comes before me for redetermination following a decision of a Full Bench of the Commission 1 on 17 June 2019 which quashed an earlier determination made by a single Member2 (the earlier hearing).

[7] By decision of 30 August 2019 3 I ruled that I would conduct the redetermination by rehearing. I did so on 4 and 5 September 2019 by formal court proceedings, not determinative conference. I rejected a submission by Ms Mercuri to conduct the redetermination on the papers or by reference to the evidence that was led at the earlier hearing.

[8] My decision of 30 August 2019 determined, with one qualification, that I would not admit for probative purposes evidence that was led at the earlier hearing. I took oral evidence afresh, and am determining this matter on the basis of that fresh evidence and the resubmitted materials on which the parties rely.

[9] On 30 August 2019 I ruled that I would permit evidence taken at the earlier hearing to be used at the rehearing for the purposes of assessing creditworthiness should a cross examiner assert that evidence at the rehearing was inconsistent with earlier sworn testimony. During the course of the rehearing a number of such instances arose where witnesses were so challenged.

[10] On 23 July 2019 I granted RCC permission to file a fresh Employer Response (F3) expressly setting out the jurisdictional issues on which it relied, which it duly did.

[11] On 23 July 2019 I also granted permission, by consent, for Ms Mercuri to be represented by a legal practitioner at the rehearing. She had been so represented at the earlier hearing and on appeal. At the rehearing the employer continued to be self-represented, via its Director Mr Last and fellow Director Ms Qu. 4 I provided a measure of guidance and assistance to Mr Last and Ms Qu consistent with my responsibilities as an independent officer of the Commission.

[12] My directions of 23 July 2019 and 29 August 2019 required the parties to refile materials on which they relied. Both Ms Mercuri and RCC refiled a hybrid of materials previously filed together with updated materials. Ms Mercuri refiled materials within the time frames required by my directions. RCC initially failed to do so. For reasons outlined on 29 August, I granted RCC a short but conditional extension of time (by 30 August), which it complied with.

The Evidence

[13] I heard evidence from four persons:

•  Alexandra Mercuri (Applicant);

•  Geoffrey Last (Manager and Director Green Castle Renmark Pty Ltd);

•  Zhihong Qu (Director Green Castle Renmark Pty Ltd); and

•  Yuan (Anna) Tian (Duty Manager).

[14] Ms Qu and Ms Tian gave evidence with the assistance of a Mandarin interpreter.

[15] The facts leading to the alleged dismissal are central to my determination of this matter. Issues of credit are relevant. Significant facts are in dispute.

[16] A consequence of the case history is that by the time witnesses gave evidence before me, events leading to the alleged dismissal occurred at least ten months prior. I take this length of time into account when assessing the evidence together with factors such as the demeanour of witnesses; the tone and manner of giving evidence; the consistency (or otherwise) between oral evidence, witness statements and sworn testimony given at the earlier hearing; the existence (or otherwise) of corroborating documentary evidence and the inherent plausibility of versions of events.

[17] Ms Mercuri gave her evidence in a considered manner. Mr Last submitted that 90% of her evidence was “fake”. I do not so conclude. I consider her evidence generally reliable. Ms Mercuri’s recall was largely supported by the documentary record. However, a certain caution is required. On some matters, there was gloss and inconsistency which I deal with in the body of this decision.

[18] Mr Last gave evidence clearly and genuinely but some caution is also required. Understandably, he confused the dual roles of witness and advocate, and was keen to explain or clarify the evidence of other employer witnesses whilst they were giving evidence.

[19] I make allowances for both cultural sensitivities and possible gaps in interpretation when considering the evidence of Ms Qu and Ms Tian. Each gave evidence conscientiously although they were somewhat quarrelsome under cross examination. Each appeared to feel disrespected when challenged by the cross-examiner. I consider these defensive responses partly but not wholly explicable by cultural considerations. However, even making such allowances, caution is required given that each acknowledged their recall of some events was impaired by the effluxion of time.

[20] Although I generally prefer the evidence of Ms Mercuri where there is conflict I do not do so unconditionally. I make specific findings concerning relevant contested matters in the body of this decision.

[21] Some of the evidence before me strayed from factual matters into hearsay, opinion, assumption and commentary. I place reduced levels of weight on such evidence except where corroborated by direct evidence, is uncontested or inherently believable. I am not bound by the rules of evidence but consider them to be a good and useful general guide. I adopt the approach of a Full Bench of this Commission which has said:

“The Commission is obliged by statute to perform its functions in a manner that is fair and just pursuant to s. 577(a) of the Act. Although it is not bound by the rules of evidence and procedure, the Commission tends to follow the rules of evidence as a general guide to good procedure. However, that which is ultimately required is judicial fairness, and that which is fair in a given situation depends on the circumstances.” 5

The Facts

[22] Noting that I make specific findings concerning relevant contested matters in the body of this decision, I make the following findings:

[23] The Renmark Country Club is a hospitality, tourism and sports venue in the Riverland region of South Australia, some 260km east of Adelaide. The venue’s facilities include a restaurant, accommodation and golf course.

[24] On 3 September 2018 ownership of the venue changed. It was sold by the Berri Hotel Group (Berri) to RCC. Mr Last and Ms Qu are co-directors of RCC.

[25] RCC is a business of small scale, but was not, at the date of alleged dismissal, a small business as defined by the FW Act. 6 At the date of alleged dismissal it employed a head count of 17 persons (including its two directors), although many of these employees worked less than full time hours per week.

[26] At the date of the rehearing (September 2019), RCC employed a head count of 8 persons which it projected may fluctuate in busy periods to 12 persons.

[27] Mr Last and Ms Qu are hands-on directors. Each is a co-manager in the business. Ms Qu is the only officer authorised to terminate the employment of staff.

[28] Ms Qu’s daughter is Ms Tian. Ms Tian works in the business as Duty Manager. The Duty Manager is responsible, amongst other matters, for the rostering of staff and the front office.

[29] The Applicant, Ms Mercuri worked at the Renmark Country Club from September 2016 when she was originally employed by Berri.

[30] Upon change of ownership in September 2018, Ms Mercuri (together with certain other employees) became employees of RCC. Ms Mercuri was not informed (in writing or otherwise) that her period of service with the old employer (Berri) would not be recognised by the new employer (RCC).

[31] Whilst working for Berri, Ms Mercuri worked in the restaurant in various front of house roles that involved waitressing, bar work and then duty manager and supervising the bistro. Whilst on shift she was designated as a ‘responsible person’ for the purposes of the venue’s compliance with South Australian liquor licensing laws. Upon commencing her employment with RCC, Ms Mercuri continued to perform (in the initial weeks) substantially the same waitressing, bar and bistro work. From time to time she was asked to be the designated ‘responsible person’ when Mr Last and Ms Qu were not present, and she agreed to do so.

[32] Whilst working for Berri, Ms Mercuri was employed as a casual employee under the Hospitality Industry (General) Award 2010. Her hours varied from week to week though she commonly worked around 25 hours per week. Upon commencing her employment with RCC, Ms Mercuri continued (in the initial weeks) to be so employed.

[33] On or about 13 October 2018 Ms Mercuri approached the employer (Mr Last) and requested (orally) to be made a permanent part time employee. She made it known that she had been experiencing a difficult matrimonial breakdown, that she wished to seek a loan from a financial institution to settle property matters, and that a permanent employment contract may be of advantage in that regard.

[34] Mr Last agreed in principle to do so. Ms Mercuri would, once a written contract was prepared and signed, become a part time employee working at least 25 hours per week. It was agreed that a written contract would be prepared the following week.

[35] On 18 October 2018 Ms Tian, in the presence of Ms Qu, gave Ms Mercuri a written contract as a part time employee for “at least 25 hours per week”. 7 The contract proposed a commencement date of 22 October 2018. Ms Qu wanted Ms Mercuri to sign the contract then and there. Ms Mercuri felt pressure to do so but wanted to first read the contract, and said so. Ms Qu questioned why the contract could not be signed immediately. After Ms Mercuri repeated her request, Ms Qu agreed to provide Ms Mercuri that opportunity.

[36] Ms Mercuri felt stressed and anxious at what she considered to have been a tense exchange with the new owner about her proposed contract. She had the day prior (17 October) witnessed a verbal altercation between Ms Qu and a chef which had also left her feeling uncomfortable.

[37] Overnight, Ms Mercuri read the proposed contract. She identified some problems. The contract referred to her as a waitress whereas she believed she had an agreement with Mr Last to be bistro supervisor. The contract proposed that she be employed as a Hospitality Employee Level 2 under the Award, whereas she considered herself a Level 3 employee when badged as the ‘responsible person’. The agreement referred to a “bottle shop” when the venue did not have a bottle shop.

[38] Ms Mercuri was next rostered on 19 October 2018. She attended work although she remained stressed and anxious. Ms Qu asked Ms Mercuri if she had brought in the contract. Ms Mercuri said that she had not done so as she was feeling unwell. Ms Qu accepted this explanation. She asked Ms Mercuri to bring the contract to work the following day. Ms Qu also told Ms Mercuri that Ms Tian would henceforth be preparing rosters (until then this task had been performed by a Mr Hayward).

[39] Ms Mercuri remained stressed and anxious. She went to see her general practitioner. She was provided a medical certificate for 20 to 22 October 2018. 8

[40] Ms Mercuri returned to work for her rostered shift on 24 October 2018. She returned the contract unsigned and asked for it to be rewritten after explaining her areas of concern to both Ms Tian and Ms Qu. Ms Mercuri advised that she would sign it as soon as it was rewritten. Ms Mercuri and Ms Tian agreed that a new start date for the part time arrangement could be either 29 October 2018 or 5 November 2018.

[41] Ms Mercuri worked rostered shifts on 25, 26 and 27 October 2018. Although she did not regularly work on Mondays or Tuesdays, Ms Mercuri agreed to a request from Ms Tian (on 25 October 2018) to work Monday 29 and Tuesday 30 October 2018 as the responsible officer. Ms Mercuri indicated that she would do so for those days only (to cover for Mr Last and Ms Qu who were away) but was not usually available on those weekdays. The following day (26 October 2018) Ms Tian asked Ms Mercuri if she could work weekend breakfast shifts. Ms Mercuri said that breakfast shifts were not commonly worked by her and were not convenient times for her. Ms Mercuri continued to work her rostered shifts.

[42] On the afternoon of 30 October 2018 Mr Last and Ms Qu returned to the venue. Ms Mercuri considered herself to have been ‘bossed around’ unreasonably by Ms Qu during the shift. She again felt anxious. She spent the rest of the shift avoiding Ms Qu.

[43] On 2 November 2018 Ms Tian and Ms Mercuri had a further disagreement about rosters. Ms Tian asked Ms Mercuri to change her roster to work the following Monday and told her that she needed to agree to be rostered on some Mondays and Tuesdays because “everyone can’t have those days off”. Ms Mercuri refused to change her roster explaining that she had organised a plumber at her home that day. Ms Tian asked Ms Mercuri to telephone the plumber immediately and find out if his appointment time could be changed. Ms Mercuri considered this an unreasonable request and refused to do so.

[44] When the roster came out later that evening for the following week, Ms Mercuri had received shifts for 7, 10 and 11 November 2018 which were two less shifts than she regularly worked. She left work feeling stressed and anxious. In that following week in fact she worked a fourth shift that had not been initially rostered, 8 November 2018.

[45] On Saturday 3 November 2018 Ms Mercuri commenced her regular shift at 10:30am, as rostered. After 45 minutes Ms Qu asked Ms Mercuri to leave as the venue “was not busy enough”. Ms Mercuri declined to do so advising that she had not worked her minimum 2 hour engagement.

[46] On Sunday 4 November 2018 Ms Mercuri worked altered hours from those originally rostered having made an informal agreement the day prior with two other staff.

[47] On 7 November 2018 Ms Mercuri received her payslip. She believed she had been underpaid certain penalty rates and overtime. That evening, at 11:15pm, she sent Ms Tian an email 9 setting out a request for correction of her pay.

[48] On 8 November 2018, whilst at work, Ms Mercuri felt the atmosphere tense between herself and Ms Qu and Ms Tian. She sought to avoid direct contract with Ms Qu and Ms Tian during the first part of the shift. At around 8:00pm a conversation occurred between Ms Mercuri, Ms Qu and Ms Tian. Ms Mercuri asked Ms Tian if her email (about the alleged underpayment) had been received. Ms Tian said it had. Ms Tian agreed that some correction to the pay calculation would be made but not to all of the claims made. Ms Tian and Ms Mercuri disagreed about whether Ms Mercuri was entitled to the overtime she claimed. They disagreed whether Ms Mercuri had or had not been clocked off for a meal break on a particular day. Ms Mercuri left work that evening again feeling stressed and anxious.

[49] During her shift on 10 November 2018 Ms Mercuri again felt a high degree of stress and tension between herself and each of Ms Tian, Ms Qu and (on this day) Mr Last. She considered that Ms Tian and Ms Qu were unresponsive and unfriendly to her, and that Ms Last was dismissive of a request she made to help her reset the tills. Ms Tian, Ms Qu and Mr Last gave evidence that it was Ms Mercuri who displayed an unfriendly attitude (a “cold face” 10) to them. As the shift progressed, Ms Mercuri feared conflict and increasingly sought to avoid Ms Tian, Ms Qu and Mr Last.

[50] On 11 November 2018 Ms Mercuri was rostered to work from 5:00pm to 8:00pm. Mr Last asked her to leave at 7:00pm as he did not consider the venue to be busy enough to warrant the final hour of work. Ms Mercuri left at 7:00pm.

[51] This was to be the last shift Ms Mercuri would work at RCC.

[52] The roster for the week commencing Monday 12 November 2018 was distributed by Ms Tian the previous Friday (9 November 2018) as was her usual practice. No rostered hours were provided to Ms Mercuri. On Monday 12 November 2018 Ms Mercuri contacted the venue. The shift roster that had been distributed on 9 November 2018 did not roster Ms Mercuri to work any shifts on any day during the week of 12 November 2018.

[53] On 15 November 2018 at 11:14am Ms Mercuri sent Ms Tian the following email: 11

“Hello Anna,

I did not receive my roster by email last week, however I was able to contact work on Monday to find out that I had not been rostered on.

I find this very unusual given that I have worked regular and consistent hours for the past 2 years.

Please inform me if there are any issues. If so, I would request that we please arrange a meeting to discuss and clarify.

Otherwise, given that my availability has not changed, I will look forward to and assume that I will resume working my regular shifts next week.

Kind regards,
Alex Mercuri”

[54] That same day Ms Tian replied at 12:53pm as follows: 12

“Hi Alex,

Please ignore all notice other than mine in regards to roster and working hour.

Thanks

Kind regards

Anna
Duty manager”

[55] The roster for work for the week commencing Monday 19 November 2018 was distributed by Ms Tian. Ms Mercuri was again not rostered for any work that week.

[56] Having not been rostered to work in the preceding week (12 November 2018) or that week (19 November 2018) and not considering Ms Tian’s reply of 15 November 2018 to be an acceptable explanation (or any explanation at all) Ms Mercuri became concerned at the status of her employment with RCC. On Monday 19 November 2018 at 11:15am she wrote the following email to Ms Tian: 13

“19/11/18

Dear Anna,

I write to you requesting confirmation of my current status of employment at the Renmark Country Club.

I have worked at the Renmark Country Club on a casual basis consistently since September 2016 and it was my intention to remain working there.

As of July 2017 I became badged as a Responsible Person and since this time I have worked shifts in this position on a regular basis. These shifts carry extra responsibilities and attract a higher rate of pay.

On the 29th and 30th of October I worked in this role. When I received my pay slip on Wednesday the 31st of October I realised I had not been paid the correct rate. I notified you by email the same evening to let you know that my pay from 22/10/18 – 4/11/18 was incorrect, giving reasons as to why, and asking that this be revised as soon as possible.

I note that when I approached you on the evening of Thursday the 1st of November to ask if you had received this email, I was given some printed information and told “We don’t have to pay you level 3 because you don’t work front office”. From my understanding and previous experience with the former owners I know that this is not the case.

I asked for this to be amended and to be reimbursed for the underpayment of wages.

After this request, and without notice or consultation, my name was removed from the roster and my scheduled shifts were given to other staff members. This action has caused me a great deal of stress and financial hardship.

Please advise me of my current status of employment by close of business Wednesday 21st November 2018.

Yours sincerely,
Alex”

[57] Ms Tian contacted the Help Line of the Fair Work Ombudsman on either 20 or 21 November 2018 to ask about the employment status of casual employees. I find, based on Ms Tian’s evidence (which on this point I accept), that this (more probably than not) occurred on 21 November 2018.

[58] At 6:19pm on Wednesday 21 November 2018 Ms Tian replied by email to Ms Mercuri as follows: 14

“Alex

Your period of employment at Renmark County Club has been for a period of 2 months, and during that period of time, your roster varied week to week.

During that period of time, your attitude of work was inappropriate; we have received a significant quantity of complaints regarding your attitude to customers.

Regarding the pay rate, it is clearly demonstrated in the award guide, you didn’t supervise anyone in the venue and you didn’t do the work as training. As the work you did on that night was only waitress and that is what you got paid.

As in work, you spent a considerable period of time in the cool chatting to kitchen staff, and following function room. At this time customers already lined up in front of bistro till waiting to order.

Also, as a casual employee, we are not required to provide you with notice regarding the limitation/ termination of your casual employment. (emphasis added)

Kind regards

Anna
Duty manager”

[59] Ms Mercuri concluded that Ms Tian’s email of 21 November 2018 had confirmed her worst fears – that her employer had decided that she was no longer to be employed. She did not contact RCC to clarify what the email of 21 November 2018 meant, and in particular its final sentence. Ms Mercuri sought and received advice from the Working Women’s Centre SA Inc.

[60] Ms Mercuri prepared an application for an unfair dismissal remedy dated 22 November 2018.

[61] On 25 November 2018 at 4:53pm Ms Mercuri filed her application with the Fair Work Commission.

The Submissions

[62] Ms Mercuri alleges that she was unfairly dismissed on 12 November 2018, this being the day immediately following her last shift of work on 11 November 2018.

[63] Ms Mercuri submits that there is no jurisdictional barrier to her application being dealt with on its merits. She says that she served the minimum period of employment to be eligible to make her claim as her service with Berri is to be counted because she was a transferring employee who was not provided any written notice to the contrary by RCC. She says that she was employed as a casual employee by both Berri and RCC on a regular and systematic basis and that she had a reasonable expectation of continuing employment on that basis. She says that she was dismissed by virtue of not being given any rostered hours after 11 November 2018, and that this was confirmed by Ms Tian’s email of 21 November 2018.

[64] As to the merits, Ms Mercuri submits that there was no valid reason for dismissal. She says that the reasons advanced by RCC at the time and during Commission proceedings are spurious. She claims that she did not display a poor attitude to her work or to the new owners. She says that there was not a “significant quantity” of customer complaints, as alleged. She says that she accommodated and made herself reasonably available for shifts including those she had not historically worked. She says that claims by RCC that there was not enough work to support giving her rostered hours are false. She says her rostered hours were given to other staff. She asserts that the true reason for her dismissal was that she made a complaint about an alleged underpayment of wages and was punished for having done so.

[65] RCC, in contrast, submit that Ms Mercuri’s application should be dismissed on either or both of its jurisdictional challenges.

[66] It submits that Ms Mercuri did not serve the minimum period of employment required by the FW Act because her employment as a casual employee was not regular and systematic. It says that it is at a disadvantage because, as new owners of the business, it does not have access to all of the records of Ms Mercuri’s past rosters and therefore considers her evidence unreliable. RCC considers that those records it has access to do not establish a pattern of regular and systematic employment over the preceding six months.

[67] RCC submit in the alternative that there was no dismissal. It says that simply not rostering Ms Mercuri for a few weeks did not amount to a dismissal. It says that no decision to dismiss was made, nor communicated. It says that there is no ongoing obligation on the business to roster a casual employee beyond the last hour of rostered work that has been performed.

[68] RCC submit in the further alternative that there was a valid reason for not rostering Ms Mercuri for the final two weeks of November 2018 based on her attitude, on customer complaints and patchy trade. It says that it was perfectly valid to not roster her to work once she commenced legal proceedings in the Commission against the business on 25 November 2018. RCC says that, as a business of small scale and limited means, it cannot be expected to have access to the human resources knowledge and expertise of larger businesses.

The Jurisdictional Issues

Did Ms Mercuri Serve the Minimum Employment Period?

[69] Section 382 of the FW Act provides that a person is protected from unfair dismissal if they have completed a period of employment of at least the minimum employment period.

[70] Section 383 of the Act sets out the minimum employment period:

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[71] In order to be protected from unfair dismissal under the FW Act, the minimum employment period required to have been worked by Ms Mercuri was six months prior to the alleged dismissal. 15

[72] In the six months prior to her dismissal, Ms Mercuri was both a casual employee and an employee with periods of service with both RCC and the previous owner (Berri). Section 384 of the FW is relevant to the determination of this question:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[73] I am satisfied, on the facts before me, that Ms Mercuri’s service with Berri counts towards her period of employment with RCC. She was a “transferring employee” within the meaning of the FW Act. RCC and Berri were not associated entities. RCC had not provided Ms Mercuri with written notice that her period of service with Berri would not be recognised.

[74] What remains to be considered is whether Ms Mercuri’s service in the six months preceding her alleged dismissal was “regular and systematic” and, if so, whether she had a reasonable expectation of continuing employment on that basis.

[75] In evidence before me are payslips and rosters for a portion of the period Ms Mercuri was employed by Berri (9 May 2018 to 2 September 2018) 16 and for the period Ms Mercuri was employed by RCC (from 3 September 2018).17 I also received written and oral evidence of Ms Mercuri with respect to this six month period, and the evidence of Mr Last with respect to the period since 3 September 2018.

[76] I take into account that RCC is at some disadvantage in not being able to independently verify the emailed rosters of the former employer as submitted by Ms Mercuri. Those rosters are broadly consistent with the content of the payslips submitted. Ms Mercuri’s oral evidence on this point was the subject of cross examination and is corroborated by the documentary material before me.

[77] Ms Mercuri’s rostered hours and hours actually worked (with both Berri and RCC) varied somewhat from week to week but the evidence suggests a well-established pattern of both rostering and work. She generally worked five but occasionally four days per week, usually Wednesday to Sunday (inclusive). She averaged approximately 25 hours of work per week, with some weeks only 15 hours worked and others as much as 34 hours. There was only very occasional deviation from this pattern or weeks not worked. On the facts before me, those gaps did not break Ms Mercuri’s continuous service or the established pattern of employment and hours she worked. 18

[78] I readily conclude that Ms Mercuri was employed on a regular and systematic basis during at least the six months preceding her alleged dismissal.

[79] I also conclude that Ms Mercuri had a reasonable expectation of continuing employment on that basis. Her pattern of employment both prior to and following the new ownership, together with the fact that the new owners did not communicate or advise of any intended change in rostering or responsibility in the days and weeks immediately after taking over (at least until RCC advised on 19 October 2018 that Ms Tian would assume rostering responsibilities) is objective evidence supporting that conclusion. So too is the fact that the new owners on 13 October 2018 agreed to offer Ms Mercuri permanent part time employment of 25 hours per week and took steps to prepare and provide a draft contract for signature whilst she continued to work regularly as a casual.

[80] I am also satisfied that it was reasonable for Ms Mercuri to hold this expectation across the period of the six months of service despite the clear anxiety and tension that emerged in her relationship with the new owners from late October 2018 until she was removed from the roster from the week of 12 November 2018. 19 I accept that once Ms Mercuri received Ms Tian’s email of 21 November 2018, an expectation of continuing employment on a regular and systematic basis was no longer reasonable. However, this email was sent and received after the “period of service” for the purposes of section 384(2)(a)(ii) of the FW Act had concluded. Thus, during the period relevant for the purposes of section 384(2)(a)(ii) Ms Mercuri held the requisite belief and it was reasonable for her to do so.

[81] I conclude that Ms Mercuri served the minimum period of employment required by section 383(a) of the FW Act.

Was Ms Mercuri Dismissed?

[82] It is not in dispute that Ms Mercuri was taken off the roster by RCC on or about 9 November 2018 when Ms Tian prepared and distributed the roster for the week of 12 November 2018, and again when Ms Tian distributed the roster the following week for the week of for the week of 19 November 2018. On both occasions Ms Mercuri was provided no rostered hours.

[83] It is also not in dispute that Ms Mercuri did not seek to be taken off the roster in either of these weeks and was ready, willing and able to work her regularly rostered hours during both of these weeks. By virtue of her emails to Ms Tian of 15 November 2018 and 19 November 2018 Ms Mercuri complained about and expressed concern at not being so rostered.

[84] The evidence of Mr Last, Ms Qu and Ms Tian was to the effect that no specific decision was made to dismiss Ms Mercuri. Whilst that may be so, a deliberate and specific decision was made to remove Ms Mercuri from the roster. Further, no communication by RCC to Ms Mercuri either in response to her email of 15 November 2018 or to her email of 19 November 2018 suggested any intention to return her to the roster.

[85] Moreover, on both of the occasions that the employer removed Ms Mercuri from the roster during each of these weeks, RCC knew that Ms Mercuri wanted to work shifts which she had regularly and systematically worked over at least the preceding six months, including during the ten weeks she had worked for Mr Last and Ms Qu.

[86] These objective facts, even without reliance on the final sentence of Ms Tian’s email of 21 November 2018, point to an inescapable conclusion that Ms Mercuri was dismissed by RCC from employment as a casual employee. She was removed from the roster by decision of the employer, and that decision had permanent effect.

[87] I do not accept RCC’s submission that Ms Tian’s email of 21 November 2018 was simply a statement of an employer’s legal right to limit or terminate the employment of a casual employee. Firstly, the email was not a statement made in the abstract. Although it followed Ms Tian’s call to the Fair Work Ombudsman’s office to ascertain RCC’s legal obligations, it was a response to Ms Mercuri’s email of 19 November 2018. Secondly, the content of the email was specific to Ms Mercuri. It dealt expressly with RCC’s view of Ms Mercuri’s alleged inadequacies as an employee. Thirdly, the final sentence reads: 20

“Also, as a casual employee, we are not required to provide you with notice regarding the limitation/ termination of your casual employment.”

[88] This sentence uses the pronouns “we” and “you”. Its construction suggests that the email was a communication of relevance to the employment relationship between those parties. When viewed in context, by referring to “the limitation/termination of your casual employment” RCC was advising of not just a limitation but also a termination. It is noteworthy that the roster for the following week issued by Ms Tian shortly after the 21 November 2018 email also did not include rostered hours for Ms Mercuri.

[89] Given that Ms Mercuri was working on a regular and systematic basis, I do not consider that her status as a casual employee at the time of being removed from the roster to be prohibitive to a conclusion that she was dismissed. As a Full Bench of the Commission said in Shortland v The Smiths Snackfood Co Ltd: 21

“[11]The criteria in s.384(2)(a) make it clear that s.384 does not proceed on the basis that a casual employee’s period of employment for the purposes of the unfair dismissal remedy starts and ends with each engagement as understood in the common law of employment.”

[90] Whilst each case turns on its own facts, the common law position (that each occasion a casual employee works is viewed as a separate engagement and no casual employee has a continuous period of employment beyond any single engagement) is qualified to the extent that the FW Act, by virtue of section 384, expressly contemplates that a casual employee who has met the eligibility criteria of that section is capable of being protected from unfair dismissal under Part 3-2 of the FW Act if all other statutory criteria are met. If so, the employee’s claim must be assessed on its merits. If it were the case that a casual employee meeting the statutory eligibility criteria could not be so dismissed within the meaning of Part 3-2 beyond the last hour of the last shift they worked then the purpose of section 384 in its statutory context would be otiose. 22 This is clearly not the parliamentary intention.

[91] In the circumstances of this matter, I conclude that Ms Mercuri was dismissed by RCC effective from 12 November 2018 when she was removed from the work roster at the Renmark Country Club.

Merits: was Mercuri unfairly dismissed?

[92] Having been an employee protected from unfair dismissal, and having been dismissed, I now consider whether Ms Mercuri’s dismissal was harsh, unjust or unreasonable.

[93] I am under a duty to consider each of the criteria in section 387 of the FW Act, 23 and now do so. In so doing, I take into account all of the evidence and submissions before me.

[94] Section 387 of the FW Act provides as follows:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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.”

Valid Reason (section 387(a))

[95] An employer must have a valid reason for the dismissal of an employee. It is the Commission’s task to determine if a valid reason exists. The reason(s) should be “sound, defensible and well founded” 24 and should not be “capricious, fanciful, spiteful or prejudiced.”25 However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.26

[96] A dismissal relates to unsatisfactory performance where it refers to “the level at which the employee renders performance, including factors such as diligence, quality, care taken and so on.” 27 In a conduct-based dismissal28 the test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct. The Commission must itself make findings as to whether the conduct occurred based on the evidence before it.29

[97] Where an employee is dismissed for misconduct an evidentiary onus rests on an employer to establish that on the balance of probabilities the misconduct occurred. 30

[98] Having regard to the overall evidence and submissions of RCC, the employer advanced four reasons for removing Ms Mercuri from the roster:

1. Ms Mercuri displayed a disrespectful attitude towards the owners and managers including those of Chinese origin Ms Qu and Ms Tian;

2. Ms Mercuri displayed a poor attitude towards her work and was the subject of customer complaints;

3. Ms Mercuri was inflexible in accommodating rostering requests and in particular failed to make herself freely available for shifts on Mondays or Tuesdays, or for breakfast shifts;

4. Trade declined in the weeks Ms Mercuri was removed from the roster so as to not warrant the provision of shifts.

[99] I now deal with each of these issues to assess whether they individually or collectively are made out and constitute a valid reason for dismissal.

Attitude to owners and managers

[100] The evidence before me is that Ms Qu considered Ms Mercuri, in the final weeks of her employment, to display a disrespectful attitude towards her and to Ms Tian. Mr Last’s evidence is that he also considered Ms Mercuri to exhibit a poor attitude to his wife and to Ms Tian, as well as to himself.

[101] I accept that this was the genuine belief of Ms Qu, Ms Tian and ultimately Mr Last. However, objectively speaking the evidence before me falls short of establishing that Ms Mercuri’s attitude was insubordinate. Even making allowance for cultural differences associated with Ms Qu expecting her employees to show a friendly rather than a “cold” face, the instances of poor attitude provided by the employer relate primarily to instances where Ms Mercuri stood her ground – such as wanting to read the draft part time contract before signing it.

[102] I accept that as the anxiety and stress of being at work started to consume Ms Mercuri, her demeanour became tense and her interactions with Ms Qu, Ms Tian and ultimately Mr Last became less friendly. I find that Ms Mercuri became wary and ultimately distrusting of the owners and Ms Tian especially once she was removed from the roster. However, I find that Ms Mercuri remained largely calm and professional whilst at work albeit firm in holding her ground during disagreements. I accept that Ms Mercuri expressed a comment concerning the language difficulty she had in understanding Ms Qu, and that this caused offence, but I do not consider the remark to have been made maliciously or disrespectfully. The employer asserted that Ms Mercuri had referred on at least one occasion to the “bloody Chinese” operating the business. I am not satisfied to the requisite standard of proof that such an observation was made.

[103] Ms Mercuri’s attitude towards and relationship with the owners and Ms Tian was in serious and progressive decline from the time Ms Tian assumed rostering responsibilities (19 October 2018) but Ms Mercuri’s conduct towards the owners and Ms Tian did not warrant removal from the roster.

Attitude to customers and work

[104] I accept the evidence of Mr Last and Ms Qu that there was a customer complaint made to an on-line forum that they believed concerned Ms Mercuri. The customer did not identify the staff member, and the legitimacy of their complaint was not tested in evidence before me.

[105] I also accept that Ms Qu determined, by reference to the details provided by the customer, that in all probability the complaint concerned Ms Mercuri. I also accept Ms Qu’s evidence that she showed the complaint to Ms Mercuri, expressed concern that the customer was dissatisfied and that Ms Mercuri did not contest that the incident could have related to her.

[106] Nonetheless, even if Ms Qu had correctly adduced that the customer was complaining about Ms Mercuri’s service that evening, the evidence falls short of establishing that there was a failure of duty let alone one that constituted a valid reason for dismissal. At best a customer complaint of this nature would warrant an informal discussion with the staff member, which is the very action Ms Qu took.

[107] I draw a similar conclusion with respect to the evidence of the employer that Ms Mercuri from time to time was inattentive and chatting excessively to other staff including back of house staff. Whilst these were concerns held by the employer (and are referred to in general terms in Ms Tian’s email of 21 November 2018) they are not clearly established on the evidence to the requisite standard of proof other than that Ms Qu and Mr Last had from time to time, in the ordinary course of business, alerted Ms Mercuri to their concern. Such matters warranted this type of informal discussion. They were not at a level of seriousness that led the employer to consider formal counselling or disciplinary action.

Inflexibility in rostering availability

[108] On the evidence before me, there is substance in part to the employer’s concern but it was a concern that did not warrant removal of Ms Mercuri from the roster.

[109] RCC was within its rights, as the operator of the business, to determine that Ms Tian would assume rostering responsibilities from mid October 2018. Ms Tian as Duty Manager was within her rights to seek to alter rostering protocols from those which previously applied. Until this time, Ms Mercuri had not sought to be rostered on Mondays or Tuesdays, nor for breakfast shifts especially on Saturdays or Sundays. Ms Tian formed the view that she wished to more evenly spread working hours amongst staff across the week and across times of the day, and wanted staff to be less inflexible in their availability.

[110] Whilst this was a legitimate and reasonable aspiration on Ms Tian’s part, as a casual employee it was equally reasonable for Ms Mercuri to indicate in advance days or periods of a day when she was unavailable for shifts either generally or in a specific week. Ms Mercuri did not leave her employer unaware of the constraints on her availability.

[111] To a certain extent, Ms Mercuri was slow to adapt to the new order. These were however early days. Ms Mercuri was feeling her way, as was RCC. Ms Tian’s approach required acceptance by staff of the fact that the rostering pattern and protocols established under the former owners (such as staff having designated days or shifts when they would not be rostered or informally changing shifts between themselves) was not necessarily the approach of the new owners once they came to understand their human resources and operational requirements.

[112] However, Ms Mercuri did make efforts to meet reasonable requests. For example, she made herself available to work Monday and Tuesday 29 and 30 October 2018 to accommodate Ms Tian’s request, and was within her rights to indicate that this was an exception to her general unavailability on those weekdays.

[113] Whilst it was reasonable for Ms Tian to seek a greater degree of flexibility from casual employees, it was unreasonable for Ms Tian to deny Ms Mercuri shifts that needed to be worked and which she could reasonably have been rostered to work simply because Ms Mercuri had informed Ms Tian that she was not available for certain other shifts.

[114] Ms Mercuri’s inflexibility in rostering availability was only moderate in nature and was not a valid reason for removal from the roster.

Decline in trade

[115] Mr Last’s evidence and submission was that November 2018 was a patchy month of trade and that this justified removing Ms Mercuri from the roster.

[116] No evidence was produced before me that enabled that proposition to be tested. Nor is there evidence that the overall number of hours rostered amongst casual employees for the month of November 2018 was reduced as a consequence of trading patterns. Ms Mercuri’s evidence is that other employees took the shifts she would have ordinarily been rostered. I also have no evidence before me, other than assertion, to draw that conclusion.

[117] I make no finding that trade declined in the month of November 2018 such as to warrant the wholesale removal of Ms Mercuri from the roster.

Conclusion on valid reason

[118] Some emerging concerns concerning Ms Mercuri’s attitude and availability had arisen in the final weeks of Ms Mercuri’s employment as the owners of RCC and Ms Tian assumed more active management of human resources and rostering issues. However, whilst the relationship between RCCs owners and Ms Mercuri was in progressive decline in the weeks prior to dismissal and in free-fall by the time of dismissal, the purported reasons for dismissal did not objectively constitute a sound, defensible and well-founded reason for dismissal either individually or collectively. I so conclude.

[119] I do not need to conclude what the active reasons for dismissal were given that I have found that the purported reasons for dismissal did not constitute a valid reason. Ms Mercuri submits that the real reason for dismissal was because she complained about her pay. There is some circumstantial evidence to support this proposition in that she was removed from the roster only a few days after having made the complaint. It may have been the tipping point. Moreover, at the time the employer offered Ms Mercuri a part time contract (18 October 2018) it cannot reasonably said that the relationship was in disrepair. However there is also contrary evidence before me: for example, that the relationship was already tense and in decline from the time Ms Tian assumed rostering responsibilities (19 October 2018) and Ms Tian had indicated that some aspects of the complaint about underpayment were valid and would be corrected. It is more likely than not that the real reason for removal of Ms Mercuri from the roster was a combination of factors, not one singular factor. I make no specific finding in this regard.

[120] The conclusion that there was no valid reason for removing Ms Mercuri from the roster weighs strongly in favour of a finding of an unfair dismissal. As a Full Bench of the Commission has said: 31

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair.”

Notification of the reason for dismissal (section 387(b))

[121] Ms Mercuri was notified in Ms Tian’s email of 21 November 2018 of RCC’s alleged concerns with her work performance. To that extent, she was informed of her employer’s reasons for dismissal, other than the further reason advanced at the hearing concerning an alleged lack of trade to warrant rostering Ms Mercuri.

[122] Having been provided the reasons for dismissal but only after she was removed from the roster is a conclusion that weighs in favour of finding an unfair dismissal.

Opportunity to respond (section 387(c))

[123] The evidence before me is that Ms Mercuri was provided no effective opportunity to respond to the allegations against her. The employer’s concerns about work performance outlined in the email of 21 November 2018 were communicated after Ms Mercuri had been removed from the roster and only in response to Ms Mercuri seeking clarification of her employment status. They were communicated in an email which had the effect of confirming that her employment had ceased.

[124] I take into account that on at least one occasion Ms Qu had spoken to Ms Mercuri about a customer complaint, and that on at least one occasion Ms Tian had told Ms Mercuri that Ms Mercuri needed to be more flexible in her willingness to take rostered shifts on Mondays or Tuesdays, or to take breakfast shifts.

[125] However, each of these exchanges was in the ordinary course of business and had the character of one-sided exchanges in which the employer told Ms Mercuri what the employer wished to communicate. Whilst they created anxiety and apprehension on the part of Ms Mercuri, neither, even in the context of a business of small scale, could reasonably be said to have been disciplinary in nature or inviting an open discussion about the issues.

[126] I conclude that Ms Mercuri was not provided a reasonable opportunity to respond to allegations concerning alleged poor work performance.

[127] This conclusion weighs in favour of a finding of unfair dismissal.

Opportunity for support person (section 387(d))

[128] As there was no disciplinary meeting or process put in place by RCC, the employer neither granted nor unreasonably refused Ms Mercuri a support person. In this matter, this is a neutral consideration.

Warnings concerning performance (section 387(e))

[129] Although on a number of occasions Ms Mercuri was spoken to in the ordinary course of business about aspects of her alleged work performance and availability that concerned the employer, Ms Mercuri received no warnings, orally or in writing, concerning her alleged poor work performance.

[130] This conclusion weighs in favour of a finding of unfair dismissal.

Size of employer’s enterprise (section 387(f)) and human resource capability (section 387(g))

[131] While the FW Act recognises that “small businesses are genuinely different in nature both organisationally and operationally”, 32 it does not follow that such an employer’s procedures in effecting a dismissal can be entirely devoid of fairness.

[132] I have found that even though RCC was not, at the time of dismissal, a small business (as defined) it was nonetheless a business of small scale with a full time equivalent number of employees of around ten persons. It was a new business, only ten weeks into its life operating the Renmark Country Club. Mr Last and Ms Qu were not experienced employers and the business had no specialist human resource capability or systems.

[133] For human resource management the evidence before me is that RCC relied on the goodwill of staff and the limited experience of Mr Last and the best endeavours of Ms Qu and Ms Tian to manage and marry the many competing considerations associated with rostering and people management.

[134] The evidence before me is that RCC relied to a lesser degree on external resources, such as the Fair Work Ombudsman and the Australian Hotels Association.

[135] These constraints on the internal capability of RCC created a real deficit in the capacity of the employer to navigate its rights and obligations under Australian industrial law including the relevant provisions of the Hospitality Award. Together with the fact that the business was in its infancy, they are relevant to considering the overall conduct of the employer including the decisions it made and the manner in which they were implemented.

[136] I take them into account and give appropriate weight to them.

Other matters (section 387(h))

[137] There are no other matters raised by Ms Mercuri or the employer which need to be taken into account which have not otherwise been considered.

Conclusion on merits

[138] The absence of a valid reason for dismissal, together with my other findings on matters arsing under section 387 of the FW Act lead me to conclude that Ms Mercuri’s dismissal was harsh, unjust and unreasonable.

Remedy

[139] I consider it appropriate to order a remedy. The circumstances giving rise to the employment relationship ceasing are real and substantive. Given my findings, it would not be in the interests of justice for Ms Mercuri, having met the statutory eligibility requirements to make a claim and to have had that claim successfully arbitrated, to be denied a remedy.

Is reinstatement an appropriate remedy?

[140] Ms Mercuri seeks reemployment. She submits that she is ready, willing and able to resume work at RCC. She continues to live in the Riverland and seeks re-employment as she has not found alternate work in the region. She considers that she would bring a professional attitude to the job which would overcome any discomfort or tension with the owners or staff. She considers a compensation order (even one to the maximum level permitted by the FW Act) to be inadequate in circumstances where she has tried for 12 months to secure alternate work in the region, but been unsuccessful. She believes that a reemployment order should include payment for the casual hours she would have worked based on the pattern of regular and systematic hours she had worked in the months preceding her dismissal.

[141] In contrast, RCC submit that reemployment would be wholly inappropriate and unfair to the business and its current staff. It says that Ms Mercuri’s assertion that she is fit and ready to resume employment is “fake” and at odds with a separate claim for work related stress and anxiety which she is pursuing against RCC in the South Australian Employment Tribunal under State workers compensation legislation. RCC also submit that a compensation order would be unjust as the business has limited means and believes that the proceedings against it are vexatious and being pursued for improper financial gain. RCC also contend that it would be unfair to order payment of monies for work not performed by Ms Mercuri, especially in relation to speculative hours that may or may not have been rostered to her or have been worked by other employees.

[142] Whether reinstatement is an appropriate remedy is a question to be determined having regard to the factual circumstances of this matter and in the context of the statutory scheme. That scheme requires the Commission to consider this question in the first instance before considering the appropriateness of any alternate remedy.

[143] From Ms Mercuri’s perspective, a reinstatement order, with back pay, would best address the loss of earnings she has sustained and her desire to be employed rather than unemployed. Her evidence 33 is that she has been unable to secure employment over the prolonged period since her dismissal despite being registered with a job search agency and by approaching prospective employers in person and in writing. She is currently receiving Centrelink benefits. Ms Mercuri’s difficulty in finding work is compounded by the fact that she is a resident of regional South Australia, where job opportunities are limited and, in part, seasonal in nature. Ms Mercuri wishes to remain a resident of the Riverland.

[144] These are real considerations and must be given weight. I do so. However, the statutory requirement to consider the ‘appropriateness” of a reinstatement order requires objective considerations beyond those pertaining simply to the dismissed employee. For example, whether an effective employment relationship could or would be re-established upon the implementation of a reinstatement order is a relevant consideration.

[145] It is well established that a fundamental breakdown in the relationship leading to a loss of trust and confidence between an employer and an employee may render a reinstatement order inappropriate. 34 However, the mere existence of some discomfort or tension between individuals in re-establishing an employment relationship is not unusual and, of itself, not a reason to conclude that reinstatement is inappropriate.35

[146] A Full Bench of the Commission in Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter helpfully identified the following propositions relevant to the impact of a loss of trust and confidence on the appropriateness of an order for reinstatement: 36

“•  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.”

[147] The Full Bench concluded that “[u]ltimately, 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.” 37

[148] The evidence before me clearly establishes a fundamental breakdown in the relationship between Ms Mercuri and RCC. That breakdown is manifest by mistrust and disregard on the part of RCC and mistrust and wariness on the part of Ms Mercuri. Cultural differences partly explain the damaged relationship, but only partly so. For example, Mr Last and Ms Qu consider it to have been disrespectful for Ms Mercuri to have included in her sworn evidence commentary of Ms Qu’s English-speaking skills. 38 Whilst the breakdown has been exacerbated by this litigation and that occurring in the SA Employment Tribunal, it is not simply a product of Ms Mercuri exercising those legal rights. The relationship was in free-fall in the weeks prior to Ms Mercuri’s dismissal. Ms Mercuri’s evidence was that whilst at work in those final weeks she was actively avoiding Ms Qu and Ms Tian and then Mr Last even whilst on shift, in order to manage her anxiety and not engage in confrontation. There is high probability that a reinstatement order would result in fresh confrontation in the workplace, with consequent exacerbation of stress, anxiety and disruption to the business, staff and (being a service industry) possibly customers.

[149] A reinstatement order would require Ms Mercuri to return to a business of small scale, and one where the owners (Mr Last and Ms Qu) are hand-on operators and where staff and owners work in close physical proximity front of house and back of house. Ms Mercuri would be reporting to and taking instructions from the very owners and managers who she sought to avoid during her final weeks of work. This is not a business where Ms Mercuri could be relocated to a different geographical site, or where her work could be effectively performed answering solely to others, or with the requisite element of mutual trust required of an employment relationship.

[150] I also take into account the considerable effluxion of time since dismissal. My observation in conducting the hearing of this matter is that this time period has exacerbated the practicality of a reinstatement order, not alleviated it. A reinstatement order would, given the circuitous route this application has taken, occur some 12 months after Ms Mercuri last worked in the business. In the context of any business, let alone a business of small scale based in one location, that is a considerable passage of time to reasonably expect broken relationships to be restored so as to recreate an effective employment relationship.

[151] Nor is there any evidence before me of alternate positions in this business that would militate against such a conclusion.

[152] For these reasons I conclude that an order reinstating Ms Mercuri to the same or an alternate role is inappropriate.

[153] A remedy in the form of compensation as provided by statute is the only alternate remedy open to the Commission (other remedies such as an apology sought by Ms Mercuri are not within the Commission’s arbitral power). I consider such a course appropriate, otherwise Ms Mercuri would be left without remedy. I consider that inappropriate given the findings I have made.

[154] Section 392 of the FW Act provides as follows:

“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.”

[155] I note that the discretion to award compensation is not at large; it is a discretion guided by statute. I adopt the approach and principles governing the exercise of this guided discretion in Sprigg v Paul Licensed Festival Supermarket 39 which sets out a well-established methodology for the assessment of compensation. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.40

[156] I now consider each of the criteria in section 392 of the FW Act.

Viability: section 392(2)(a)

[157] The evidence of Mr Last was that RCC, being a start-up business and one of small scale, has limited resources and liquidity. It is also a business operating in a region that is vulnerable to seasonal fluctuation in demand and discretionary consumer expenditure. I accept Mr Last’s evidence that a compensation order, depending on its size, may present a further challenge and cost impact on the business which it will need, as best able, to finance. 41

[158] These are not idle matters, and I take them into account. However, Mr Last, appropriately so given that the businesses financials were not brought into evidence, stopped short of saying that an order would render the business unviable or risk its viability.

[159] I conclude that a compensation order of the scale I propose will not adversely impact the viability of the business but that it will, in the immediate term, have an impact on cash flow.

Length of service: section (section 392(2)(b))

[160] Ms Mercuri worked at the Renmark Country Club for three years and three months, but for only ten weeks for the owners who dismissed her.

[161] I take onto account her length of service with each of her employers (RCC and Berri).

Remuneration that would have been received: section 392(2)(c)

[162] But for the circumstances that gave rise to her dismissal, Ms Mercuri had been in relatively stable employment as a casual staff member until the final month of her employment. Had the business not changed ownership and had the relationship with the new owners and managers not deteriorated in the final weeks of her employment, Ms Mercuri would have reasonably expected to have continued working in a similarly regular and systematic manner so long as trade and business operations remained at least to previous levels.

[163] However, the aforementioned caveats did materialise and were operative factors at the time of her dismissal: the fact is that new owners did purchase the business from September 2018 and had started to make changes to operations and managerial structures. Whilst I have no evidence before me that trade was at any greater or lesser level than under the previous owners or during previous seasons, I have found and concluded that there was clear evidence of the relationship between Ms Mercuri and the new owners being in free-fall in those final weeks, and at the time of dismissal.

[164] Although the new owners had offered Ms Mercuri a permanent part time contract of 25 hours per week, that had not been executed and was overtaken by events. Disagreements, anxiety and tension characterised Ms Mercuri’s relationship with her employer in the final weeks (that is, after she complained about her alleged underpayment, and after she told Ms Tian that she was not keen to work on Mondays or Tuesdays or on weekend breakfast shifts). Given that no part time contract had been entered into, and based on the fact that Ms Mercuri was a casual employee, I determine this compensation order on that basis.

[165] As a casual employee, Ms Mercuri was employed by the hour, meaning that her earnings and hours of work would have been open to fluctuate had she not been dismissed based on objectively rational factors such as her availability, the levels of trade and the employer’s need to accommodate not just Ms Mercuri but also other front of house staff with shifts and working hours.

[166] I take into account these objective considerations together with Ms Tian’s not unreasonable desire, which was within her discretion, to alter rostering arrangements so that shifts were more evenly spread and staff made themselves available across a greater number of days (including Monday and Tuesday) and times of the day (including breakfast shifts) than had been the case in the past. Given Ms Mercuri’s equally justified unavailability for some of these shifts, this alteration to rostering practice would, in all probability, have seen Ms Mercuri’s hours reduce somewhat from her previously established average of about 25 hours per week. The likely continuation of rostering disputes with Ms Tian, as Ms Tian became more entrenched in the role, would only have accelerated the discomfort felt by Ms Mercuri.

[167] Taking these considerations into account, I consider that Ms Mercuri would have generally continued to have worked for a number of weeks in the order of approximately 20 hours per week had she not been dismissed.

[168] A separate question arises as to the length of time Ms Mercuri would have continued in employment. I have found the employment relationship was in free-fall in those final weeks. Ms Mercuri was avoiding contact with Mr Last, Ms Tian and especially Ms Qu. Ms Qu considered Ms Mercuri to be displaying a bad and disrespectful attitude towards her and Ms Tian (a “cold face”). Mr Last had tried to reach out to Ms Mercuri and she to him, but even that relationship, which was not affected by quite the same cultural considerations, fell into disrepair. In the space of the final three weeks of employment, confrontations in the workplace had occurred, the atmosphere was tense if not icy, Ms Mercuri’s medical practitioner had certified her absent for two days from work (which Ms Mercuri said was due to work-induced stress) and Ms Mercuri had been spoken to about her attitude and some alleged customer complaints. Ms Mercuri’s coping mechanism whilst at work was to avoid Ms Qu, Mr Last and Ms Tian if she possibly could.

[169] Whilst I accept that Ms Mercuri considers that she should be compensated based on the type of ongoing and stable rosters and employment she had experienced during the preceding three years, the reality is that life under the new owners was different. The new owners would have been in charge during any period of prospective future employment that I determine. Ms Mercuri was a transferring employee in a business operated by those new owners. In those circumstances, and provided new owners act lawfully and fairly, it is not unsurprising that an employee’s work life may differ under a new administration.

[170] I consider there to be a very high probability that, within a few weeks of resuming shifts and in all probability within days, clashes between Ms Mercuri and any of Ms Qu, Ms Tian and Mr Last would have occurred relating to a combination of perceived or actual deficiencies in work performance or attitude, Ms Mercuri’s avoidance of the new owners (and Ms Tian) and her rostering availability. In a small business where the new owners were hands-on, where staff and owners worked in close quarters and where the nature of her casual contract did not give Ms Mercuri the security of set hours or earnings this reality would have quickly become intolerable for both the business and Ms Mercuri. Allowing for a structured process to deal with any disciplinary issues relating to alleged future deficiencies in work performance or attitude, Ms Mercuri’s employment was unlikely to continue into the medium term. It is unlikely to have survived beyond Christmas 2018.

[171] Whilst (as noted by the authorities) there is necessarily an element of estimate inherent in undertaking this task, taking these factors into account, I conclude that Ms Mercuri would not have worked for more than seven weeks in the service of RCC. Across those seven weeks I estimate that she would have averaged approximately 20 hours of work per week.

Mitigating efforts: section 392(2)(d)

[172] Ms Mercuri took steps to register with a job search agency in order to access Centrelink benefits, and to seek alternate work. I make no discount to the compensation payable on that account.

Remuneration earned: section 392(2)(e)

[173] Ms Mercuri received no notice or payment in lieu of notice. As a casual employee, she was simply removed from the roster.

[174] Nor is there evidence before me of any income earned by Ms Mercuri, at least not inside the seven week period I will assess compensation.

[175] I make no discount on this account. Nor do I make any discount for Centrelink payments. They are not earnings for the purposes of section 392 of the FW Act. 42

Income likely to be earned: section 392(2)(f)

[176] The period across which I will assess compensation has past. As noted there is no prospect of further income relevant to that period. I make no discount on this account.

Other matters: section 392(2)(g)

[177] There are no other matters or contingencies that need to be provided for.

Misconduct: section 392(3)

[178] I have found no reasonable basis for RCC to have concluded that Ms Mercuri engaged in misconduct. No discount is to be applied on this ground.

Shock, Distress: section 392(4)

[179] The amount of compensation allowable by the statute does not include a component for shock, humiliation or distress, or other analogous hurt. Nor does it include any basis for punitive damages.

[180] My compensation order will make no provision for such alleged losses.

Compensation cap: section 392(5)

[181] The amount of compensation I will order does not exceed the six-month compensation cap.

Conclusion on compensation

[182] The compensation order I will make will be based on seven weeks pay at 20 hours per week on Ms Mercuri’s usually rostered hours as a Food and Beverage Attendant Grade 2. Whilst Ms Mercuri occasionally was paid as a Grade 3 or Grade 4 (if she supervised staff or was the responsible person) I consider that the deterioration in the employment relationship would have rendered the employer unlikely to have given Ms Mercuri these higher duties over this period.

[183] Given that Ms Mercuri’s hours fluctuated, it is appropriate to construct an abstract but reasonably foreseeable casual roster for the projected period of future earnings. I will calculate compensation based on a roster of three shifts of four hours 5:00pm to 8:00pm Wednesday to Friday inclusive each week (being nine hours worked before 7:00pm and three hours worked after 7:00pm), one shift of four hours on each Saturday and one shift of four hours on each Sunday. This pattern has some broad regard to the pattern of work during Ms Mercuri’s ten weeks of work with RCC, adjusted for a roster of 25 hours per week becoming a roster of 20 hours per week. It is a likely 20 hours per week roster to have been worked by Ms Mercuri based on the evidence before me.

[184] Having regard to the provisions of the Hospitality Award and payslips in evidence 43 (allowing for a dispute concerning the week of alleged underpayment) Ms Mercuri’s ordinary time (Monday to Friday) rate was $20.22 per hour. Under the Hospitality Award she was entitled to be paid a 25% casual loading ($25.28 per hour), with 10% penalties applying from 7:00pm to midnight. Her rate on Saturdays was 150% of her hourly rate and on Sundays it was 175%. I make no allowance for overtime as that is not worked on this roster.

[185] Ms Mercuri’s projected weekly earnings based on this pattern of 20 hours work per week equates to $639.59 per week. Across a period of seven weeks the compensation amount is $4,477.13.

[186] Tax will be payable on the compensation amount.

[187] Ms Mercuri would have been entitled to superannuation at the rate of 9.5% on these earnings, had she been so employed. I will further order that an amount of $425.33 be paid into the superannuation fund that RCC was making contributions on Ms Mercuri’s behalf at the date of dismissal.

[188] I consider these amounts to be reasonable in all of the circumstances including the circumstances in which Ms Mercuri found herself and the circumstances of this business. 44

[189] I take into account the potential cash flow consequences for a business of small scale such as RCC but do not conclude that the compensation order will adversely affect business viability.

Conclusion

[190] I find that Alexandra Mercuri was a person protected from unfair dismissal within the meaning of the FW Act and in particular that she had completed the minimum period of employment so as to be eligible to make such a claim.

[191] I find that Alexandra Mercuri was dismissed by RCC from regular and systematic casual employment.

[192] I conclude that Ms Mercuri’s dismissal was harsh, unjust and unreasonable.

[193] I conclude that a remedy of reinstatement is inappropriate.

[194] I conclude that a remedy should be ordered and that an order of compensation is appropriate.

[195] In conjunction with the publication of this decision I grant Ms Mercuri’s application and order that:

1. RCC pay Alexandra Mercuri the sum of $4,477.13 gross to be taxed according to law (the earnings amount); and

2. RCC pay the amount of $425.33 (the superannuation amount) into the superannuation fund in respect of which RCC was making contributions on behalf of Alexandra Mercuri whilst she was in their employ; and

3. the earnings amount and the superannuation amount be paid no later than 28 days from the date of this Order, that is, by no later than 11:59pm 13 November 2019.

DEPUTY PRESIDENT

Appearances:

A. Wright with C. Schumacher, for the Applicant (with permission)

G. Last with Z. Qu, for the Respondent

Hearing details:

2019.

Adelaide; in person.

4 and 5 September.

Printed by authority of the Commonwealth Government Printer

<PR713393>

 1   [2019] FWCFB 3444, 30 August 2019

 2   [2019] FWC 1834, 25 March 2019

 3   [2019] FWC 6086

 4   The employer had been represented by the Australian Hotels Association for the purposes of the filing of its initial (now substituted) employer response (in 2018) and the conciliation conducted on 17 December 2018, but not otherwise

 5   Pearse v Viva Energy Refining Pty Ltd[2017] FWCFB 4701 at [14]. See also section 591 of the FW Act and King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, 17 March 2000) Print S4213 at [61] - [62]; Enterprise Flexibility Agreement Test Case (Print M0464) at page 13; Pochi v Minister for Immigration and Ethnic Affairs (1979) 36 FLR 482 at 509

 6 “fewer than 15 employees”: section 23 FW Act

 7   AKM1

 8   AKM2

 9   AKM3

 10   Audio transcript 4 September 2019 Ms Qu 4:02pm

 11   AKM4

 12   AKM5

 13   AKM6

 14   AKM7

 15 Although RCC is a business of small scale, at the time of the alleged dismissal RCC was not a small business as defined by the FW Act. As a consequence the longer period of employment of 12 months does not apply in this matter

 16   AKM10 and AKM11

 17   AKM12 and AKM13

 18   Shortland v Smiths Snackfood Co Ltd [2010] FWAFB 5709

 19   Bell v Aboriginal Legal Service (NSW/ACT) Limited [2018] FWCFB 6102 at [12] – [13]; Bronze Hospitality Pty Ltd v Hansson[2019] FWCFB 1099 at [29]

 20   AKM7

 21   [2010] FWAFB 5709; see also Bell v Aboriginal Legal Service (NSW/ACT) Limited [2018] FWCFB 6102 at [10]

 22   Bell v Aboriginal Legal Service (NSW/ACT) Limited [2018] FWCFB 6102 at [13]

 23   Sayer v Melsteel Pty Ltd[2011] FWAFB 7498 at [14]

 24   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373.

 25   Ibid

 26   Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681at 685

 27   Annetta v Ansett Australia Print S6824 (AIRCFB, Giudice J, Williams SDP, Cribb C, 7 June 2000) at [16]

 28   except where the Small Business Fair Dismissal Code applies

 29   King v Freshmore (Vic) Pty Ltd AIRCFB Print S4213 at [24]

 30   Edwards v Guidice (1999) 94 FCR 561 at [6]-[7]

 31   Parmalat Food Products Pty Ltd v Wilio[2011] FWAFB 1166 at [24]

 32   Williams v Top Image Hair Design[2012] FWA 9517 at [40]

 33   A2 Supplementary Statement of Alexandra Mercuri paragraphs 12 – 15; AKM 13 and AKM 14

 34   Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at [191]; see also Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198

 35   Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198 at [27]

 36   Ibid at [27]

 37   Ibid at [28]

 38   A1 Statement of Alexandra Mercuri paragraph 169

 39 Print R0235, (1998) 88 IR 21 and Ellawalla v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 at [31], since updated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431; 229 IR 6

 40   [2013] FWCFB 431

 41   Audio transcript 4 September 2019 Mr Last 3:26pm

 42   Shorten v Australian Meat Holdings Pty Ltd (1996) 70 IR 360 citing Mullany v Active Concrete (1995) 64 IR 237

 43   AKM11

 44   Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]