Amanda Wallis v Trustee for the Two Towers Discretionary Trust T/A Second Valley Caravan Park and Jetty Store

[2018] FWC 6775

[2018] FWC 6775

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Amanda Wallis
v
Trustee for the Two Towers Discretionary Trust T/A Second Valley Caravan Park and Jetty Store
(U2018/4754)

COMMISSIONER PLATT ADELAIDE, 1 NOVEMBER 2018

Application for an unfair dismissal remedy – Respondent in liquidation – leave granted by Court under s.500(2) Corporations Act – valid reason – dismissal harsh, unjust and unreasonable – reinstatement or compensation not sought – no remedy awarded.

[1] Ms Amanda Wallis has made an application for a remedy for unfair dismissal under s.394 of the Fair Work Act 2009 (Cth) (the Act). Ms Wallis’ employment was terminated by Trustee for the Two Towers Discretionary Trust T/A Second Valley Caravan Park and Jetty Store (Two Towers) on 13 April 2018.

[2] On 16 May 2018, Two Towers filed a Form F3 Employer Response which contended that the application was made out of time and that the Respondent was a small business.

[3] A Directions Hearing was listed on 7 June 2018.

[4] On 4 June 2018, the Commission was notified that at a general meeting on 23 May 2018 the members of Torre Two Pty Ltd resolved that the company would be wound up voluntarily. Mr Nicholas Cooper of Worrells Solvency & Forensic Accountants (Worrells) was appointed as the liquidator. Ms Annabelle Narayan of Worrells advised that the liquidator was unfunded and would not attend the Directions Hearing.

[5] Ms Wallis’ application was made out of time. An extension of time was granted on 21 June 2018 and my reasons for this decision were published 1. The matter was listed for Hearing as to the merits on 30 July 2018. Directions for the provision of statements and submissions were issued on 21 June 2018.

[6] Mr Woods, who was previously a Director of Torre Two Pty Ltd (an entity connected with the Respondent) contacted the Commission, in light of his inclusion in the correspondence provided to the parties, and advised that he was no longer a Director. Mr Woods sought to provide information to the Commission about the dismissal of Ms Wallis and also sought to have the Respondent’s name changed. Mr Woods was invited to provide a witness statement and contact the Respondent’s representative in relation to amending the Respondent’s name.

[7] Witness statements were received from Ms Wallis and Mr Woods. Ms Wallis also provided a written submission. No application by the Respondent to change the name was received.

[8] The merits Hearing was conducted on 30 July 2018 in person. Ms Wallis represented herself. There was no appearance of the Respondent, however this was not surprising given that Worrells had consistently advised that it would not participate in the process as it was unfunded. Mr Woods attended the Hearing as a witness (noting that he was no longer a Director of Respondent and Worrells had not granted permission for him to represent the Respondent).

[9] Taking into account the fact that Ms Wallis was not familiar with the unfair dismissal jurisdiction, and the absence of the Respondent, I determined to conduct the Hearing as a Determinative Conference.

[10] Ms Wallis provided a statement 2 and gave evidence.

[11] Mr Robert Wallis, the husband of the Applicant, and proprietor of Wallis Electrical, also provided a statement 3 and gave evidence.

[12] Mr Gregory Woods, provided a witness statement 4 and gave evidence, however whilst being questioned as to the factual basis of a number of assertions in respect of Ms Wallis conduct and work performance (which could have been valid reasons) he protested at the manner in which his evidence was being received and departed the Hearing before his evidence could be properly tested.

[13] At both the outset and the conclusion of the Hearing on 30 July 2018 I noted to Ms Wallis my concerns regarding the application of s.500 of the Corporations Act 2001 (Cth) (the Corporations Act) in relation to her unfair dismissal application. I explained that I would research the issue further and publish a statement of my findings to that effect.

[14] On 30 July 2018, I issued a statement which discussed the application of s.500(2) of the Corporations Act and concluded that Ms Wallis would need to obtain leave of the Supreme Court in order for the matter to proceed. The matter was adjourned to allow Ms Wallis to make an application to the Court.

[15] On 26 October 2018 my Chambers was provided with a copy of a “Record of Outcome” from the Chambers of Judge Dart of the Supreme Court of South Australia which granted leave pro tunc for Ms Wallis to prosecute her case in U2018/4754 (this matter).

Factual Findings and Consideration

[16] I have considered the statements and the evidence of the witnesses.

[17] I accept that the Respondent is a small business as defined by s.23 of the Act.

[18] Ms Wallis was responsible for the day to day operations of the General Store. Her role was largely self-managed with little oversight by the Respondent.

[19] In addition to her employment with the Respondent, Ms Wallis was the volunteer secretary of the Second Valley Progress Association and participated in the organisation Million Paws Walk. I accept that there was some synergy between Ms Wallis’ participation in these events and the promotion of the General Store. It was possible that the location of the Million Paws Walk could result in increased trade as would the conduct of activities by the Progress Association. Whilst it is a question of fact and degree, I find that the participation of Ms Wallis in these types of activities and discussing same with General Store patrons was not at odds with her employment obligations.

[20] It was alleged that Ms Wallis focused on personal projects including Wallis Relishes, Chutneys and Pastes, Real Housewives of Second Valley, Second Valley Markets and Fleurieu Secretarial Services during work time. Mr Woods’ statement makes these allegations but does not provide any details of the facts upon which these allegations are based. Mr Woods made further allegations about Ms Wallis seeking donations to support these projects, using the Respondent’s identity and email address for her own benefit, inappropriately using the Respondent’s resources to support her husband’s business – again no evidence was presented which supported these allegations.

[21] Mr Woods also contended that in 2017 the Million Paws Walk (an event conducted by the RSPCA to raise funds) was tied to the provision of a lunch at the General Store. Ms Wallis’ involvement in this event was part of her promotional responsibilities. No issue appears to be taken with the operation of the 2017 event.

[22] Mr Woods contended that the 2018 Million Paws walk was to be tied to the General Store in the same way as previous year. Mr Woods suggested that the event was more associated with the Second Valley Progress Association and Ms Wallis had fraudulently misappropriated the event from the Respondent to the Second Valley Progress Association. There is insufficient evidence before me to establish this allegation.

[23] With the exception of being late on two occasions, Ms Wallis generally denied the allegations and said that her conduct in relation to such activities was consistent with her promotion of the General Store and had no impact on the performance of her work.

[24] Unfortunately Mr Woods chose to depart from the witness box whilst these allegations were being tested. If these allegations were substantiated they could have been a valid reason for the dismissal, however in the circumstances I am not convinced that Ms Wallis conduct was in breach of her employment obligations.

[25] It appears to me that the decision to dismiss Ms Wallis arose out of a conversation with Ms Trabilsie on 9 April 2018. I understand there were no other witnesses. Ms Trabilsie was not called to give evidence and I only have the account of Ms Wallis.

[26] The exchange does not appear to relate to the operation of the General Store but a disagreement about Ms Wallis discussing a serious medical condition afflicting the Treasurer of the Progress Association and the single use of an expletive by Ms Wallis in a conversation with Ms Trabilsie. Mr Wallis gave evidence that Mr Woods said to him it was completely untenable that Ms Wallis continue to be employed as a result of the abuse of his partner (Ms Trabilsie).

[27] A meeting about Ms Wallis’ behaviour on 9 April 2018 was conducted on 12 April 2018, during which Ms Wallis apologised to Ms Trabilsie. I have little information about the matters discussed at that meeting save that Ms Wallis contended that she was not advised that her employment was at risk and Mr Woods suggesting that Ms Wallis was considering whether she would continue working at the General Store.

[28] Ms Wallis was due to take annual leave in the near future and it appears that agreement was reached to bring the annual leave forward and commence it immediately. There is no information provided that suggests this was a disciplinary outcome or that Ms Wallis had been advised her employment was to be terminated or was at risk.

[29] It was during the period of leave that Mr Wood determined to dismiss Ms Wallis on the basis described in his letter of 13 April 2018. Ms Wallis did not receive this letter until after her return from annual leave on 3 May 2018.

[30] Ms Wallis accepted that she had been late on two occasions but rejected the other reasons contained in the letter of dismissal.

[31] It appears that the Respondent determined sometime after the meeting of 12 April 2018 to dismiss Ms Wallis.

[32] Ms Wallis was not notified of any of the reasons proffered to support the dismissal or invited to respond to them prior to the dismissal.

[33] Whilst some of the reasons relate to the work performance of Ms Wallis, there is no evidence of any prior warning that Ms Wallis’ performance was unsatisfactory and thus no opportunity for Ms Wallis to address the alleged deficiencies.

[34] I accept that Ms Wallis’ conduct towards Ms Trabilsie on 9 April 2018 was discussed prior to the dismissal.

Small Business Fair Dismissal Code

[35] As the Respondent is a small business there is a need to determine if the dismissal was consistent with the Small Business Fair Dismissal Code (the Code) as declared pursuant to s.388 of the Act.

[36] Ms Wallis’ conduct cannot properly be described as sufficiently serious as to justify immediate dismissal.

[37] Ms Wallis appears to have been dismissed on performance and conduct grounds. Ms Wallis was given no warning or opportunity to respond, which was inconsistent with the Code.

[38] I find that the dismissal was not consistent with the Code.

[39] I find that Ms Wallis is protected from unfair dismissal.

Was the dismissal harsh, unjust or unreasonable?

[40] Pursuant to s.387 of the Act, 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 - s.387(a)

[41] Notwithstanding its formulation under a different legislative environment, I have adopted the definition of a valid reason set out by Northrop J in Selvachandran v Peteron Plastics Pty Ltd⁵which requires the reason for termination to be ‘sound, defensible or well founded.’

[42] Whilst swearing at a co-worker or supervisor can be valid reason, the nature of the exchange between Ms Wallis and Ms Trabilsie does not lead me to believe that the single use of the word ‘fuck’ was directed at Ms Trabilsie, or in a manner which would insult or offend a reasonable person such to be a valid reason. It was an unfortunate adjective used by Ms Wallis. I also note that this reason was not relied upon in the letter of termination.

[43] Ms Wallis by her own admission was late on two occasions but little information has been provided which would allow me to assess the seriousness of this conduct, and whether any allowance should be made against the time when Ms Wallis worked later than scheduled.

[44] I accept that it is in the nature of a General Store in a country area, for persons working at the store to have general discussions with regular patrons about issues affecting the local community. This could be said to be part of the process of building the relationship (and therefore custom) with members of the local community and visitors to the area. Provided such exchanges do not adversely impact on the level of customer service this conduct would not of itself be sufficient to form a valid reason for dismissal.

[45] I am not satisfied that Ms Wallis’ engagement with suppliers and use of social media was inconsistent with her duties.

[46] I am not persuaded that the making of personal phone calls was such as to materially impact on the performance of her work.

[47] There is no evidence that Ms Wallis failed to provide superannuation details to her employer.

[48] There is insufficient evidence before me which suggests Ms Wallis acted fraudulently or intentionally participated in conduct which promoted the interests of herself or any other organisation to the detriment of the Respondent.

[49] Based on the material before me I find that there was no valid reason for the dismissal.

Notification of valid reason - s.387(b)

[50] Whilst there was a discussion about the exchange between Ms Wallis and Ms Trabilsie on 9 April 2018, none of the other conduct or issues relied upon to support the reasons for dismissal was put to Ms Wallis until she received the letter of termination.

Opportunity to respond - s.387(c)

[51] Ms Wallis did not have an opportunity to respond to the allegations other than her conversation with Mr Trabilsie on 9 April 2018.

Any unreasonable refusal by the employer to allow Ms Wallis have a support person present to assist at any discussions relating to dismissal - s.387(d)

[52] Ms Wallis did not request a support person at the meeting conducted on 12 April 2018, however the manner in which the meeting was conducted does not suggest it was a disciplinary meeting.

Warnings relative to unsatisfactory performance - s.387(e)

[53] Ms Wallis has not been the subject of any prior disciplinary action.

Size of the employer’s enterprise and absence of dedicated human resources support - ss.387(g) and (f)

[54] The Respondent is a small business with no internal HR support.

Other matters considered relevant - s.387(h)

[55] There were no other significant matters.

Conclusion

[56] The Explanatory Memorandum to the Act⁶ explains the approach of the Commission in considering the elements of section 387:

“FWA must consider all of the above factors in totality. It is intended that FWA will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.”

[57] In Byrne and Frew v Australian Airlines Pty Ltd,⁷ the following observations made by McHugh and Gummow JJ are relevant to my conclusion:

“It may be that the termination is harsh but not unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[58] Having considered each of the factors detailed in s.387 of the Act, I have concluded that the termination of Ms Wallis’ employment was harsh, unjust and unreasonable.

Remedy

[59] The relevant provisions of Division 4 of Part 3-2 of the Act state:

“Division 4—Remedies for unfair dismissal

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.

…

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.”

[60] The prerequisites contained in ss.390(1) and (2) of the Act have been met in this case.

[61] Ms Wallis does not seek reinstatement and I am satisfied that it is not appropriate in this case.

[62] Section 390 of the Act makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances.

[63] I now turn to whether compensation in lieu of reinstatement is appropriate.

[64] In the process of obtaining a certificate pursuant to s.500 of the Corporations Act, Ms Wallis advised Judge Dart that she did not seek monetary judgement. I conducted a further Hearing on 29 October 2018 where Ms Wallis confirmed that she did not seek compensation, but simply sought a decision that the dismissal was unfair.

[65] It is not disputed that a resolution has been passed that the Respondent be wound up voluntarily. Worrells who has been appointed as the liquidator has advised the Commission (and the Supreme Court) that there are no funds available.

[66] It appears that there are no funds available to the Respondent to pay any award of compensation.

[67] In the circumstances, I have determined it is appropriate to accede to Ms Wallis’ request and make no award of compensation.

COMMISSIONER

Appearances:

A Wallis the Applicant.

Hearing details:

2018.

Adelaide.

29 October.

 1   [2018] FWC 3668.

 2   Exhibit A1.

 3   Exhibit A3.

 4   Exhibit W1.

5 (1995) 62 IR 371 at 373.

⁶ Explanatory Memorandum to the Fair Work Bill 2008.

7 Byrne and Frew v Australian Airlines Pty Ltd [1995] HCA 24.

Printed by authority of the Commonwealth Government Printer

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