Anthony Morley v Tarnow Pty Ltd T/A Two Shores Holiday Village

[2018] FWC 3648

[2018] FWC 3648

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Anthony Morley
v
Tarnow Pty Ltd T/A Two Shores Holiday Village
(U2017/12801)

COMMISSIONER CAMBRIDGE SYDNEY, 27 JUNE 2018

Unfair dismissal - no valid reason for dismissal - procedural deficiencies - harsh, unjust and unreasonable dismissal - compensation Ordered.

[1] This Decision involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was made by Anthony Robert Morley (the applicant). The respondent employer is Tarnow Pty Ltd T/A Two Shores Holiday Village (ABN 49 604 739 392)(the employer).

[2] The application was filed at Sydney on 30 November 2017. The application indicated that the date the applicant’s dismissal took effect was 22 November 2017. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation and it has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted at Sydney on 15 March and 23 April 2018. The Commission granted permission pursuant to s. 596 of the Act, for the Parties to be represented by lawyers or paid agents.

[4] At the Hearing, Mr P Rochfort, agent, appeared for the applicant. The applicant was the only witness called to provide evidence in support of the unfair dismissal claim. Mr Rochfort also introduced evidence in the form of a witness statement from an individual who was unable to attend as a witness for the purposes of cross-examination. The witness statement from this individual was admitted into evidence over the objections from the employer and, in the circumstances, that material has been given little, if any, weight.

[5] The employer was represented by Ms L Saunders, barrister, instructed by Clyde & Co lawyers. Ms Saunders introduced evidence from three witnesses each of whom were cross-examined by Mr Rochfort.

Factual Background

[6] The applicant is a man of some 62 years of age and he had worked for the employer for about two years. The applicant had a period of prior service with a previous employer which commenced in October 2012, and which transferred to employment with the employer on or about 17 November 2015. Throughout the entire period of the employment of the applicant he was engaged in a position described as Handy Person/Gardener.

[7] In November 2015, the employer acquired the business operating as the Two Shores Holiday Village which is a caravan park and holiday village accommodation site located in the Central Coast New South Wales town of The Entrance (the holiday village). The employer is a small business employer and at the time of the dismissal of the applicant it had three employees.

[8] The applicant was said to have been engaged as a casual employee but he worked on a regular and systematic basis throughout his employment. The work of the applicant involved attending to the gardens and lawns of the holiday village and additionally he performed a variety of general maintenance tasks associated with the various amenities provided at the site.

[9] The applicant’s general duties included that he was required to water and generally maintain the gardens and lawns of the holiday village. An irrigation/sprinkler system had been installed to enable automatic watering of the gardens and lawns. However, at the time that the employer acquired the holiday village (November 2015), the irrigation/sprinkler system was not fully operational. The applicant was asked to fix the irrigation/sprinkler system, and to ensure that all lawns and gardens were properly watered and maintained.

[10] The employer is essentially a family business which, relevantly, was primarily controlled by Mr Raymond Smith. Mr Smith, his wife, and daughter Ms Crum, are all Directors of the employer. Mr and Mrs Smith reside in North Queensland, and they regularly visited the holiday village where Ms Crum usually resided and undertook the day-to-day management of the site.

[11] On occasions when Mr and Mrs Smith visited the holiday village site, Mr Smith in particular, enquired with the applicant as to the operation of the irrigation/sprinkler system. Further, Mr and Mrs Smith raised concern with the applicant about the apparent lack of watering of gardens which, in their opinion, resulted in the loss of numerous recently planted flora.

[12] On 14 November 2017, Mr Smith was visiting the holiday village and he asked the applicant about the operation of the irrigation/sprinkler system. The applicant confirmed that the irrigation/sprinkler system was not fully operational and that he needed to obtain certain parts to fix the system.

[13] On the following day, 15 November 2017, Mr Smith noticed that there were plants that were either dying or dead, and he further engaged the applicant in discussion as to why the irrigation/sprinkler system had not been fixed. As the conversation developed the applicant rejected the suggestion that any loss of flora was caused by any inadequate watering on his part, and he reiterated that he needed parts in order to repair the irrigation/sprinkler system. At this point in the conversation Mr Smith said, inter alia, that the applicant had had two years to fix the irrigation/sprinkler system and then he told the applicant that he was “let go.” The applicant asked if he was being sacked, and Mr Smith confirmed the termination of the applicant’s employment, and advised the applicant that he was given one week’s notice of his dismissal from employment.

[14] The applicant was not provided with any written letter of dismissal or other documentation concerning the termination of his employment. The applicant was subsequently provided with payment that encompassed the period of one week’s notice, although the applicant did attend work on two days during that period.

[15] Following the dismissal, the applicant has made attempts to find alternative employment. However, as at the time of the Hearing, the applicant had not been able to obtain any income from any other employment.

The Case for the Applicant

[16] Mr Rochfort who appeared for the applicant made verbal submissions in addition to documentary material that had been filed. Mr Rochfort submitted that the dismissal of the applicant was harsh, unjust or unreasonable.

[17] Mr Rochfort submitted that there was no valid reason for the dismissal of the applicant. Mr Rochfort said that Mr Smith had dismissed the applicant because he had not repaired the irrigation/sprinkler system, but Mr Smith had gone along with the system being inoperable for years and then suddenly changed his mind. Mr Rochfort said that the sudden change of mind by Mr Smith did not constitute a valid reason for the dismissal of the applicant.

[18] The submissions made by Mr Rochfort criticised the actions taken by Mr Smith who appeared to act alone without consulting other Directors of the employer. Mr Rochfort stated that “Mr Smith took this off his own bat and it appears to be some sort of Donald Trump, making all the decisions himself.” Mr Rochfort submitted that there was no prior warning given to the applicant nor was he provided with a chance to respond before Mr Smith told him that he was dismissed.

[19] Mr Rochfort also submitted that it was common ground that the dismissal of the applicant was not consistent with the Small Business Fair Dismissal Code. Further, Mr Rochfort submitted that the applicant had not received any notification of the reason for his dismissal and the applicant had been provided with no warning that any problem with the watering system would lead to his dismissal.

[20] Mr Rochfort made further submissions which criticised the alleged absence of procedural fairness including that the applicant was not allowed any opportunity for the assistance of a support person because there was no meeting to discuss any concerns that the employer had. Mr Rochfort submitted that any aspects of alleged unsatisfactory work performance of the applicant were never the subject of any warning.

[21] The submissions made by Mr Rochfort asserted that the dismissal of the applicant was particularly harsh because of the applicant’s age, and other personal circumstances which severely limited his prospects for finding alternative employment. Mr Rochfort submitted that the dismissal of the applicant was harsh and unreasonable, particularly in the way it was done.

[22] Mr Rochfort summarised his submissions by reiterating that the dismissal of the applicant was unfair, and that in the circumstances, the maximum amount of compensation available should be provided to the applicant.

The Case for the Employer

[23] The employer was represented by Ms Saunders, of Counsel, who submitted that the dismissal of the applicant was not unfair. Ms Saunders made verbal submissions which elaborated upon documentary material that had been filed on behalf of the employer.

[24] Ms Saunders commenced her submissions by stating that the determination of the matter was very simple as the facts surrounding the dismissal of the applicant were simple and in large part not really in contest. Ms Saunders said that the employer had experienced difficulties with the applicant because he fundamentally refused to follow instructions. Further, according to the submissions made by Ms Saunders, the applicant was unable to work unsupervised, and he failed to complete tasks such as the repair of the irrigation/sprinkler system.

[25] Ms Saunders made further submissions which focused upon what she asserted to be the valid reason for the dismissal of the applicant involving his conscious decision to refuse to repair the irrigation/sprinkler system in direct defiance of the specific and repeated instructions of the employer. Ms Saunders said that the applicant fundamentally did what he thought was appropriate rather than what the employer directed him to undertake.

[26] The submissions made by Ms Saunders acknowledged that there were certain procedural defects associated with the dismissal of the applicant. However, Ms Saunders said that it was important to recognise the very small size of the employer’s business and that it was unrealistic to expect Rolls-Royce HR operations. Further, Ms Saunders made submissions which stressed that any of the procedural deficiencies that could be identified did not lead to any substantive procedural unfairness to the applicant.

[27] Ms Saunders made further submissions which referred to the various factors identified in s. 387 of the Act. Ms Saunders submitted that the valid reason for dismissal was established by the applicant’s persistent disobedience whereby he failed to follow a reasonable and lawful direction to repair the irrigation/sprinkler system. Further, Ms Saunders submitted that the applicant was notified of the reason of his dismissal on the day.

[28] Ms Saunders further submitted that the applicant was given an opportunity to respond and that it had become clear that the applicant had made a conscious decision not to repair the irrigation/sprinkler system in defiance of the employer’s reasonable instruction because he had formed the view that the sprinkler system operated in a manner which he believed was unethical. Ms Saunders also submitted that there was no refusal to allow the applicant to have a support person. Ms Saunders also reiterated her submissions regarding the need to consider any procedural deficiencies in the context of a tiny business that did not have any access to human resources expertise. Further, Ms Saunders rejected that there were any other factors which would lead to a finding that the dismissal of the applicant, while not perfectly executed, was in any way unfair.

[29] Ms Saunders stressed that the employer primarily relied upon its submission that the dismissal of the applicant was not unfair. However, by way of alternative further submissions, Ms Saunders made submissions regarding any remedy in the event that the Commission found the dismissal to be unfair.

[30] In respect to remedy Ms Saunders submitted that there should be no Order of any amount of compensation. Ms Saunders submitted that any compensation should be considered in the context of the extended period during which the applicant had simply refused to comply with the reasonable directions of the employer, and that the employer had provided an extended period of toleration and this should be factored into any Order of compensation. Ms Saunders also submitted that it was relevant to acknowledge that the applicant was a casual employee and as such would not ordinarily be provided with notice of termination of employment.

[31] Finally, on the question of remedy, Ms Saunders submitted that if the identified procedural deficiencies were corrected, the period of further employment of the applicant would have been very short. Consequently, according to the submissions of Ms Saunders no Order for compensation should be provided to the applicant if the dismissal was found to have been unfair.

Consideration

[32] Part 3-2 of the Act contains provisions which deal with unfair dismissal, and one of those provisions, section 385, stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:

(a) the person has been dismissed; and

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

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

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

[33] In this case, although the employer was a small business employer, it was conceded that the dismissal of the applicant was not consistent with the Small Business Fair Dismissal Code. Further, there was no suggestion of any redundancy circumstance. Consequently, the matter was confined to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable.

[34] Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

(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.

387 (a) - Valid Reason for the Dismissal Related to Capacity or Conduct

[35] In this case the applicant was dismissed by Mr Smith during a discussion about the applicant’s failure to repair the irrigation/sprinkler system. The dismissal was conveyed and implemented verbally and there was no documentation provided to the applicant which confirmed the reason(s) for his dismissal. Subsequently, the reasons for dismissal have been identified to have involved the applicant’s alleged deliberate failure to repair the irrigation/sprinkler system, and his alleged failure to adequately water the gardens at the holiday village site.

[36] The evidence provided by Mr Smith 1 confirmed the extraordinarily abrupt manner in which he dismissed the applicant. Further evidence of Mr Smith2 acknowledged that the applicant had been given no warning or other notice that his employment was in jeopardy because of any failure to repair the irrigation/sprinkler system and/or the alleged inadequate watering of gardens at the holiday village site.

[37] A conscious failure to comply with the reasonable direction of the employer will often provide for valid reason for dismissal. However, in circumstances where the direction given by the employer is not of a nature where it would be reasonably apparent that failure to comply would jeopardise continued employment, it is necessary for the direction to be accompanied with a warning of the potential consequences of any failure to comply.

[38] Consequently, if the reason for dismissal involves a failure to comply with a reasonable direction, for that reason to be a valid reason it will often, but not always, be necessary to have warned the employee of the potential for dismissal in the event of non-compliance. A dismissal for reason of some failure to comply with a direction where non-compliance was not unambiguously contrary to continuation of the employment, or where there was no clear warning of the potential consequences of non-compliance, could not represent a reason for dismissal that would be sound, well-founded or defensible.

[39] In this case, the applicant had no warning that the repair of the irrigation/sprinkler system was an issue that threatened his continued employment. On the contrary, the applicant had an understandable belief that the employer tolerated the extensive delay with any repair to the irrigation/sprinkler system. The decision to dismiss the applicant was made by Mr Smith in an outburst of frustration and for reasons that were not sound, well-founded or defensible.

[40] Therefore, there was not a valid reason for the dismissal of the applicant related to his capacity or conduct.

387 (b) - Notification of Reason for Dismissal

[41] The applicant was not provided with any written notification of the reason for his dismissal. Even in very small business operations dismissal from employment will usually be accompanied by documentation that provides notification of the reason for dismissal. The provision of only verbal notification of any reason for dismissal is generally unacceptable and unreasonable.

387 (c) - Opportunity to Respond to any Reason Related to Capacity or Conduct

[42] The extent to which the applicant had any opportunity to respond to the reason for his dismissal was confined to the very short period of the discussion with Mr Smith about the reason why the irrigation/sprinkler system had not been repaired.

[43] Consequently, the dismissal of the applicant involved very regrettable procedural deficiencies such that the applicant was not provided with a proper opportunity to make out a defence about the circumstances of the delay with the repair of the irrigation/sprinkler system and the alleged inadequate watering of the gardens.

387 (d) - Unreasonable Refusal to Allow a Support Person to Assist

[44] There was no process followed whereby any opportunity existed for a support person to be present during any discussions relating to the dismissal of the applicant. The absence of any proper process whereby the applicant could have made out a defence has meant that in practical effect, the employer unreasonably refused to allow the applicant to have a support person present because there were no discussions relating to the dismissal.

387 (e) - Warning about Unsatisfactory Performance

[45] To the extent that the dismissal of the applicant involved aspects of unsatisfactory work performance, it was clear that no warning had been provided.

387 (f) - Size of Enterprise likely to Impact on Procedures

[46] The employer is a small business employer and appropriate accommodation for a significant level of informality regarding employment procedures has been provided. However, such accommodation could not extend to any condonation of the absence of documentation regarding the dismissal of the applicant.

387 (g) - Absence of Management Specialists or Expertise likely to Impact on Procedures

[47] As a small business, the employer did not have any dedicated human resource management specialists or other expertise. Allowance for informality and a degree of flexibility with procedures regarding employment related matters would ordinarily be provided. However, in this instance the employer has acted to dismiss the applicant in such an unnecessarily abrupt and capricious manner that only limited accommodation for the absence of dedicated human resource management specialists or other expertise can be provided.

387 (h) - Other Relevant Matters

[48] There were particular personal circumstances of the applicant, including his age, geographical location, and the serious illness of his wife, which exacerbated the impact of the loss of employment. On balance however, I acknowledge the evidence of the employer that it had consciously deferred any consideration of the termination of the applicant’s employment at the time of the illness of the applicant’s wife.

Conclusion

[49] The applicant was dismissed during an unfortunately hasty outburst of frustration on the part of Mr Smith. The reason for the dismissal, although not documented, was said to have involved the misconduct of the applicant whereby he allegedly refused to comply with a direction to repair an irrigation/sprinkler system. The applicant was not warned that any failure to repair the irrigation/sprinkler system would be considered misconduct providing reason for dismissal. Consequently, the reason for the dismissal of the applicant was not sound, well-founded or defensible.

[50] The procedure that the employer adopted in dealing with the dismissal of the applicant was severely flawed. The applicant should have been made aware that the employer had concerns about his conduct and performance which jeopardised his ongoing employment. It is readily conceivable that if the applicant had been clearly advised and warned that his employment was in jeopardy unless he repaired the irrigation/sprinkler system immediately, and that he increased the watering of the flora, he would have complied with such directions. Alternatively, if the applicant had disregarded such warning and not followed the reasonable direction of the employer, then the employer would have established valid reason upon which to dismiss.

[51] In summary, this case has involved a very hasty and ill-conceived decision to dismiss the applicant without valid reason. The decision to dismiss the applicant represented a spur of the moment decision made by Mr Smith as an impulsive reaction to his frustration regarding aspects of the conduct of the applicant about which the applicant had not been warned.

[52] Consequently, the dismissal was without valid reason and involved significant procedural deficiencies. The dismissal of the applicant was harsh, unjust and unreasonable. The applicant is a person protected from unfair dismissal, and he is entitled to have the Commission provide an appropriate remedy.

Remedy

[53] The applicant has not sought reinstatement as a remedy for his unfair dismissal. In the circumstances, particularly as there has been an identified loss of trust and confidence in the employment relationship, reinstatement would not be an appropriate remedy.

[54] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.

[55] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that have been established in the Full Bench Decisions of; Sprigg v Paul’s Licensed Festival Supermarket 3 and, Smith and Ors v Moore Paragon Australia Ltd 4 and, more recently, the cases of McCulloch v Calvary Health Care Adelaide5 and Balaclava Pastoral Co Pty Ltd v Nurcombe6.

[56] I confirm that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.

[57] Further, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.

[58] There was no evidence provided which established that an Order of compensation would impact on the viability of the employer’s enterprise.

[59] The applicant had been employed for a period of approximately two years with the employer, and he was employed for a further period of almost 3 years with a prior employer. The applicant would have been likely to have received remuneration of approximately $954.80 per week if he had not been dismissed.

[60] There was some evidence to suggest that the employment of the applicant would not have continued for a significant period of time because the employer had, over a period of some two years, developed an underlying level of dissatisfaction with the applicant’s general work performance and conduct. Balanced against this evidence, there was clear prospect that if the applicant had been made aware of the employer’s concerns he may have satisfactorily rectified his conduct and performance.

[61] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if he had not been dismissed I have notionally considered that the employment of the applicant would have continued for at least a further 20 weeks. Therefore, the total remuneration that would have been received in the notional period of 20 weeks following dismissal amounted to a figure of $19,096.

[62] Following the dismissal, the applicant has sought alternative employment. The applicant had not secured any alternative employment as at the time of Hearing, 23 April 2018. For the purposes of calculation of compensation, the total amount of remuneration received in alternative employment, and the amount reasonably likely to be earned during the period between the making of the Order for compensation and the actual compensation, has been considered to be zero.

[63] The employer had earlier loaned the applicant $500 which had not been repaid.

[64] In this instance there was no established misconduct of the applicant which contributed to the employer's decision to dismiss.

[65] I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[66] Finally, the amount Ordered does not exceed the compensation cap as prescribed by s. 392 (5) of the Act.

[67] Consequently, for the reasons outlined above I have determined that the amount of compensation to be provided to the applicant should be calculated by subtracting from the amount determined as remuneration that the applicant would have received or would have been likely to have received if he had not been dismissed, an amount of $500. Therefore, that calculation is: $19,096 minus $500.

[68] The result is an amount of compensation of $18,596.00. Accordingly, separate Orders [PR608306] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Mr P Rochfort of Rochforts Workplace Solutions appeared for the applicant.

Ms L Saunders of Counsel with Ms E Newman of Clyde & Co appeared for the employer.

Hearing details:

2018.

Sydney:

March, 15.

April, 23.

Printed by authority of the Commonwealth Government Printer

<PR608302>

 1   Transcript @ PN 675-677.

 2   Transcript @ PN679-682.

 3 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.

 4   Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.

 5   John McCulloch v Calvary Health Care Adelaide, (Ross P, Hatcher VP and Gostencnik DP), [2015] FWCFB 873.

 6   Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, (Hatcher VP, Gostencnik DP and Cribb C) [2017] FWCFB 429.