Applicant v Spotless T/A Spotless

[2017] FWC 4963

[2017] FWC 4963

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Applicant
v
Spotless T/A Spotless
(U2017/6103)

COMMISSIONER PLATT ADELAIDE, 25 SEPTEMBER 2017

Application for an unfair dismissal remedy – labour hire arrangement – valid reason – not harsh, unjust or unreasonable – application dismissed.

[1] On 8 June 2017, the Applicant lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal by her former employer Spotless T/A Spotless (Spotless).

[2] The matter was arbitrated on 6 September 2017. Ms Mary Sullivan of United Voice represented the Applicant and Ms Kirsty Stewart of counsel represented Spotless. Permission was granted pursuant to s.596(2) of the Act.

[3] There was no dispute that the Applicant was protected from unfair dismissal pursuant to s.382 of the Act.

[4] The Applicant was first employed by Spotless on 28 March 2008. At the time of her dismissal the Applicant was employed as a part time Chef and was assigned to the Flinders Medical Centre as a result of a contract between Spotless and the Department of Health and Aging (SA Heath). I have referred to SA Health as the host employer.

[5] On 24 January 2017, the Applicant was involved in an altercation with a SA Health employee. The cause and detail of the altercation is disputed.

[6] The altercation was investigated by Spotless and separately by SA Health.

[7] On 10 March 2017, SA Health directed Spotless that the Applicant not return to its site. Spotless contested that decision. On 29 March 2017, SA Health confirmed its original decision.

[8] On 20 April 2017, Spotless advised the Applicant that unless an alternative assignment could be found she would cease employment on 25 May 2017.

[9] The Applicant was dismissed on 25 May 2017.

[10] The Applicant provided a witness statement, 1 a further witness statement2 and gave evidence on her own behalf.

[11] Spotless provided witness statements and led evidence from:

● Ms Susan Shand – Hotel Service Manager at Flinders Medical Centre for Spotless 3; and

● Mr Jonathan O’Callaghan – Group Manager Hospitals and Aged Care for Spotless. 4

[12] The Applicant contends that the dismissal was harsh, unjust or unreasonable.

[13] The position of Spotless is summarised as follows:

● The decision in Tasmanian Ports Corporation Pty Ltd t/a Tasports v Gee 5 details the factors to which the Commission should consider in determining this matter.
● The host employer exercised its right to remove the Applicant as a result of an incident which occurred on 24 January 2017.
● Spotless investigated that matter, provided the Applicant with the allegations and provided an opportunity to respond, with her position being conveyed to the host employer.
● The host employer confirmed its decision.
● Spotless engaged in a process to provide alternative employment but the Applicant did not seek to pursue any of the opportunities available.
● Spotless had a valid reason to dismiss the Applicant.
● The Applicant’s dismissal was not harsh, unjust or unreasonable.

The Witness Evidence

The Applicant

[14] The Applicant commenced work with Spotless on 28 March 2008.

[15] At the time of her dismissal she was assigned as a Chef in the kitchen at the Flinders Medical Centre and worked with persons employed by Spotless and SA Health.

[16] On 24 January 2017, the Applicant was involved in an altercation with an SA Health employee who made a grossly inappropriate remark about her personal circumstance.

[17] The SA Health employee made a complaint about the incident to SA Health.

[18] Ms Shand subsequently spoke with the Applicant about the incident and advised that she would be suspended whilst an investigation was conducted.

[19] On 7 February 2017, Spotless sent the Applicant a letter dated 3 February 2017 which detailed the allegations made against her. The letter advised that SA Health had requested her removal from the Flinders Medical Centre.

[20] On 20 February 2017, the Applicant together with her Union representative met with Ms Shand and discussed the matter. The Applicant denied the allegations.

[21] On 20 April 2017, a telephone conference was held with the Applicant and a Union representative and Mr O’Callaghan, Spotless Group Manager Hospitals and Aged Care. Mr O’Callaghan provided a letter dated 19 April 2017 titled ‘Notice of employment termination’ 6 which advised that SA Health had exercised their contractual right to direct her removal from any further work at the Flinders Medical Centre. The letter advised that Spotless would work with her to find an alternative assignment but unless one was found she was given notice that her employment would end on 25 May 2017.

[22] Spotless subsequently provided the Union with a number of emails containing vacancies in Australia and New Zealand which were forwarded to the Applicant.

[23] The Applicant was aware of a Sushi Chef role but did not apply for the same.

[24] The Applicant contended she was not aware of other Chef roles that were advertised and did not consider any subordinate roles or a Manager role that were put forward for her consideration.

Susan Shand

[25] Ms Susan Shand is employed by Spotless as the Hotel Service Manager at the Flinders Medical Centre and oversees the provision of services under a contract between Spotless and SA Health.

[26] Clause 8.4 of the contract between Spotless and SA Health provides that SA Health has the right to ‘require that a particular member of the contractor staff ceases performing the services’, provided that the right must not be exercised without just cause. 7 Clause 8.5 of the contract provides that no person whom SA Health requires to cease providing services shall be re-employed or re-engaged in any capacity to provide services.

[27] On 24 January 2017, a SA Health employee attended her office and made a complaint about the conduct of the Applicant. Ms Shand reported the matter to Mr Walker who is employed by SA Health.

[28] Later that day Mr Walker’s Manager, Mr Shastri, contacted Ms Shand who advised that SA Health would be investigating the matter and sought that the Applicant be stood down.

[29] Ms Shand then advised the Applicant of the complaint and advised that she would be stood down with pay whilst an investigation was conducted.

[30] Ms Shand then conducted an investigation on behalf of Spotless. Ms Shand sought information from SA Health. Late on 24 January 2017, SA Health emailed Ms Shand confirming they wished the Applicant to be removed from the site immediately. SA Health also advised Ms Shand that any investigations concerning their staff members would be conducted by them.

[31] On 27 January 2017, Ms Shand contacted SA Health and sought a copy of the allegations made which were provided that day. Ms Shand also corresponded with other persons as part of her investigation.

[32] On 3 February 2017, she sent the Applicant a letter containing the allegations that were made against her. 8 On 20 February 2017, Ms Shand met with the Applicant and her Union representative to discuss the matter. The Applicant provided her version of events in typewritten form.9

[33] On 21 February 2017, Ms Shand contacted SA Health and put the Applicant’s version of events to them. Ms Shand then received the complainant’s response to that statement. 10

[34] Ms Shand then sought to advise the Applicant of the outcome of the investigation. Ms Shand had difficulties contacting the Applicant.

[35] On 10 March 2017, Ms Shand received an email from SA Health advising that it considered that the Applicant was not suitable to return.

[36] Ms Shand sought that SA Health reconsider their position and on 24 March 2017 submitted a letter from SAPOL which presented some mitigating factors. 11

[37] On 29 March 2017, SA Health advised it would not change its position. 12

[38] Ms Shand was aware of the Applicant experiencing personal difficulties.

[39] On 31 March 2017, Ms Shand received an email from the Applicant’s Union which advised her doctor had suggested it was not suitable for her to return to work or attend at the Flinders Medical Centre site.

[40] Ms Shand continued to have difficulty in contacting Ms Shand.

[41] Ms Shand sent an outcome letter to the Applicant and the Union on 19 April 2017 and conducted a telephone meeting the next day. At that meeting, Mr O’Callaghan in the presence of Ms Shand read the letter over the telephone to the Applicant.

[42] Mr O’Callaghan said Spotless would look for an alternative assignment. The Applicant’s Union representative said they would pursue an unfair dismissal claim.

[43] From that point onwards, Ms Shand sent the Applicant, via the Union, a weekly list of vacant roles within Spotless. 13 They included three Chef’s positions and a number of lesser roles that were within the Applicant’s skills and competence. One of the Chef’s roles had been filled before the information was received by the Applicant.

[44] The Applicant was expected to advise Ms Shand of any roles she wished to apply for. No response was received.

[45] With no alternative role having been obtained, the Applicant’s employment ceased on 25 May 2017.

Jonathan O’Callaghan

[46] Mr Jonathan O’Callaghan is employed by Spotless as Group Manager Hospitals and Aged Care.

[47] Mr O’Callaghan was the communication point between Ms Shand and the client, SA Health.

[48] When Mr O’Callaghan commenced overlooking the SA Health contract, the Applicant had already been suspended.

[49] Mr O’Callaghan conducted the 20 April 2017 meeting with the Applicant in the presence of her Union representative and Ms Shand.

Applicable case law

[50] In Kool v Adecco Industrial Pty Ltd T/A Adecco 14 which also involved an employer, host employer and employee arrangements, the Commission found that:

● the contract which formed the relationship between the employer and the host employer was not before the Commission;
● the employer simply acquiesced in the removal of the employee from the host employer’s site without having an independent view as to the capacity or conduct of the employee;
● the employer did not independently attempt to verify whether there was a valid reason for the removal of the employee from the host employer’s site; and
● the Commission did not accept that there was a lack of alternative placements for the employee or that she unreasonably refused an alternative placement so that it could be said to constitute a valid reason for dismissal.

[51] Although the circumstances of this matter can be distinguished from those in Adecco, which will become apparent in my finding below, it is useful to set out the general principles that arise from that decision:

“[48] Where managers of a host employer inform a labour hire employee that he or she is to be removed from site on the basis of conduct, capacity or work performance, the actions of the host employer may be tantamount to dismissal. This is particularly so where managers or supervisors of the host employer have also been involved in disciplining the labour hire employee. A labour hire employee seeking to contest such action by making an application for an unfair dismissal remedy, faces considerable difficulty, principally because the host employer is not the employer of the labour hire employee. It is also the case that a labour hire company may face considerable difficulty preventing a host employer from taking disciplinary action against an employee of the labour hire company.

[49] However, the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal. Labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly. If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal. To hold otherwise would effectively allow labour hire employers to contract out of legislative provisions dealing with unfair dismissal.”

[52] I note that the Full Bench in Pettifer v MODEC Management Services Pty Ltd 15 endorsed the principle as set out in paragraph 49 of Adecco.

[53] The facts in MODEC are summarised as follows:

● the contract which formed the relationship between the labour hire employer and the host employer was before the Commission and it provided a contractual right for the company representative to direct to have removed from the site any person employed in connection with the work under the contract whose involvement the company representative considered as not being in the best interests of the project;
● MODEC formed an independent conclusion and did not support the severity of the host employer’s action of excluding the employee from the worksite; and
● MODEC endeavoured to obtain suitable alternative employment for the employee which included consideration of local and international employment opportunities and had discussions with the employee’s Union to explore alternative roles.

[54] The Full Bench in MODEC found the following in relation to s.387(a) of the Act:

“[32]We have concluded that the BHPB instruction that Mr Pettifer was not permitted to work on the BHPB Site represented a matter which went to Mr Pettifer’s capacity to work. Consequently, it was a matter that required consideration pursuant to subsection 387(a) to determine whether or not it was a valid reason for the termination of his employment. It has long been established that the Commission is required to consider and reach conclusions about each of the factors specified in section 387. In ALH Pty Ltd trading as a Royal Exchange Hotel v Mulhall (2002) 117 IR 357 at [51], the Full Bench of the predecessor to the FWC (the Australian Industrial Relations Commission) said, in relation to section 170CG of the Workplace Relations Act 1996 (CTH) (WR Act), the precursor to section 387 of the FW Act, that:

“[51] Each of the paragraphs (a) to (d) of section 170CG(3) requires the Commission to have regard to ‘whether’ a circumstance existed. Whether it existed must then be taken into account, considered and given due weight as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. A consequence of this construction of section 170CG(3) is that the Commission is obliged to make a finding in respect each of the circumstances specified in subsection 170CG(3)(a) to (d) in so far as each of these paragraphs is relevant to the factual circumstances of a particular case.”

[33]Consequently we have concluded that the Commissioner was in error in her conclusion that the circumstances of the termination of Mr Pettifer’s employment did not give rise to valid reason considerations. Mr Pettifer’s incapacity to work on the BHPB Site arose directly from the BHPB prohibition on his returning to work on that site, as distinct from any dispute over his conduct. As a consequence, Mr Pettifer was incapable of working on the BHPB Site in a manner which was akin to a bar or the loss of a form of licence, essential to his capacity to work. Hence Mr Pettifer’s capacity was a factor which required a conclusion in terms of whether it represented a valid reason for the termination of his employment.”

[55] In the recent Full Bench decision of Tasmanian Ports Corporation Pty Ltd t/a Tasports v Gee, 16 the Full Bench distinguished the employee, Mr Gee’s, case from that in MODEC on the following basis:

“(1) Tasports, apparently as the result of a deliberate forensic decision on its part, did not provide the Commission with a copy of the contract between it and Grange Resources, and thus did not establish that Grange Resources in fact had a legal right to require Mr Gee’s removal from the worksite or that Tasports had no recourse to preserve Mr Gee’s employment at the site once that step had been taken. The demonstration of the existence of that legal right was, as earlier explained, critical to the Full Bench’s conclusion in Pettifer that the employee was incapable of performing his substantive role.

(2) Tasports did not form its own independent conclusion as to whether Mr Gee had committed misconduct but instead essentially adopted the outcome of Grange Resources’ procedurally unfair investigation. That it did so is demonstrable in two ways: first, Mr Ralston’s email of 17 August 2015 indicated Tasports’ immediate support for the decision to remove Mr Gee from the site based on his alleged misconduct, without taking any steps whatsoever to investigate the matter itself including by asking Mr Gee about it; and, second, the dismissal letter of 28 August 2015 stated that the decision to revoke Mr Gee’s site access was “reasonably open” to Grange Resources based upon its findings of misconduct, a conclusion reached without any response to those findings having been obtained from Mr Gee. That is to be contrasted with Pettifer, where the labour hire employer formed the independent conclusion that removal from the worksite and dismissal was not justifiable on the basis of any conduct on the part of the employee. That meant that Mr Gee’s dismissal was capable of being characterised as substantially related to his conduct, with its validity to be assessed on that basis. This was not, as Tasports submitted, a case of assessing whether Grange Resources had a valid reason, but whether Tasports’ reasons for dismissal as stated in its own dismissal letter were valid.

(3) As the Deputy President found, and unlike the case in Pettifer, Tasports failed adequately to investigate options for Mr Gee’s redeployment. This had greater significance given that Tasports is not actually a labour hire business as such, but runs ports and other businesses in its own right and employs persons for that purpose. Although Mr Gee’s position description, which concerned his position as Port Latta, was put into evidence, what the actual terms of his employment contract were was left unclear. Insofar as the Deputy President referred in paragraph [54] of the Decision to Tasports having an obligation to “safeguard Mr Gee’s interests” in respect of its review of alternative work opportunities, we consider this is to be understood as reference to the contractual duty to do what is reasonably necessary to facilitate the performance of the employment contract, including to do such things as is required to enable the other party to have the benefit of the contract. The implied duty to co-operate in employment contracts is recognised in Australian law.” (citations omitted)

[56] The Full Bench in Tasports compared the differences in, and endorsed, the decisions of Adecco and MODEC and dismissed the contention that MODEC stood for the principle that a decision by a host employer in the context of a labour hire arrangement to have a worker supplied by a labour hire employer removed from its worksite meant that there was necessarily a valid reason for the worker’s dismissal by the labour hire employer based on the worker’s capacity for the purpose of s.387(a) of the Act. The Full Bench stated that this contention was “inconsistent with the statement of principle in Adecco which, like the Full Bench in Pettifer, we endorse.” 17

Consideration

[57] Although the Commission was only provided with an excerpt of the labour hire contract, the relevant clauses before me are set out below:

“8.4 Removal

The Contractor must immediately comply with any request by SAHS requiring that a particular member of the Contractor’s Staff ceases performing the Services. SAHS shall not exercise its rights under this clause 8.4 without just cause.

8.5 No re-employment

Any member of the Contractor’s Staff which SAHS requires to cease performing the Services must not be re-employed or re-engaged (in any capacity) to perform the Services without prior approval of the Contract Manager.”

[58] In the circumstances it does not appear that SA Health lack just cause to require that the Applicant cease performing the services.

[59] Spotless was therefore contractually obliged to comply with the request of SA Health that the Applicant cease performing the services.

[60] I find that the Applicant was involved in an incident with an SA Health employee on 24 January 2017.

[61] I find that Spotless separately investigated the incident and did not merely rely on the representations made to it by SA Health.

[62] I find that Spotless put the allegations to the Applicant, gave her an opportunity to respond and considered her position.

[63] I accept that Spotless determined and informed SA Health that it would not remove her from the role.

[64] I find that having received that information, SA Health determined in accordance with its rights under the contract between it and Spotless, to permanently remove the Applicant from site. Despite that, Spotless sought SA Health to reconsider its position and submitted a document supplied to them in mitigation. SA Health then reaffirmed its position.

[65] I find that having advised the Applicant that she could not return to the Flinders Medical Centre assignment, Spotless engaged in a four week process whereby it advised the Applicant of all vacant positions, including Chef positions, and positions that were within the Applicant’s skill, competence and training.

[66] I accept that the Applicant did not pursue any of those roles.

Was the dismissal harsh unjust or unreasonable?

[67] 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)

[68] 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 Ltd¹⁸which requires the reason for termination to be ‘sound, defensible or well founded.’

[69] I find that the Applicant was dismissed as a result of her incapacity to perform work at SA Health.

Notification of valid reason - s.387(b)

[70] I find that the Applicant was notified of the reason for her removal from the Flinders Medical Centre role.

Opportunity to respond - s.387(c)

[71] I find that Spotless provided an opportunity for the Applicant to respond to the allegations.

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

[72] The Applicant was represented by United Voice during the process.

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

[73] The Applicant was not dismissed due to her performance.

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

[74] Spotless has dedicated Human Resources support.

Other matters considered relevant - s.387(h)

[75] I have considered the impact of the difficult personal situation the Applicant faced during the period over which the investigation and dismissal occurred.

[76] I have also recognised that Spotless endeavoured to provide alternative employment to the Applicant but she failed to consider alternative assignments offered by Spotless.

Conclusion

[77] The Explanatory Memorandum to the Act¹⁹ 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.”

[78] In Byrne and Frew v Australian Airlines Pty Ltd,²⁰ 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.”

[79] Having considered each of the factors detailed in s.387 of the Act, I have concluded that the termination of the Applicant’s employment was not harsh, unjust or unreasonable and as such the application is dismissed.

[80] An Order 21 reflecting this decision will be issued.

COMMISSIONER

Appearances:

M.Sullivan of United Voice for the Applicant.

K.Stewart of counsel for the Respondent.

Hearing details:

2017.

Adelaide:

September 6.

 1   Exhibit A1

 2   Exhibit A2

 3   Exhibit R6 including attachments

 4   Exhibit R8 including attachments

 5   [2017] FWCFB 1714

 6   Exhibit R8, attachment JOC2

 7   Exhibit R6, attachment SS1

 8   Exhibit R6, attachment SS4

 9   Exhibit R6, attachment SS5

 10   Exhibit R6, attachment SS6

 11   Exhibit R6, attachment SS7

 12   Exhibit R6, attachment SS8

 13   Exhibit R6, attachment SS13-19

 14   [2016] FWC 925

 15   [2016] FWCFB 5243

 16   [2017] FWCFB 1714

 17   [2017] FWCFB 1714 [34]

18 (1995) 62 IR 371 at 373

¹⁹ Explanatory Memorandum to the Fair Work Bill 2008

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

 21   PR596314

Printed by authority of the Commonwealth Government Printer

<Price code C, PR596313>