Batol Khorshidian v Zilpana Pty Ltd
[2023] FWC 2420
•6 NOVEMBER 2023
| [2023] FWC 2420 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Batol Khorshidian
v
Zilpana Pty Ltd
(U2023/3440)
| DEPUTY PRESIDENT CROSS | SYDNEY, 6 NOVEMBER 2023 |
Application for an unfair dismissal remedy
Miss Batol Khorshidian (the Applicant) was employed by Zilpana Pty Ltd (the Respondent) as a Practice Manager. The Respondent is the corporate identity of a small dentistry practice owned and operated by Ms Melissa Murray, the Dentist practitioner. The Applicant was dismissed on 3 April 2023. The Applicant filed an application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) on 21 April 2023 (the Application).
In the hearing of the matter the Applicant, with the consent of the Respondent, was represented by Ms Tamas from Fair Workplace Solutions. The Respondent was represented by Ms Murray.
On 5 July 2023, directions were issued to program the manner in which the Application was to proceed to hearing (the Directions). The Respondent failed to attend the Directions Hearing held on 10 July 2023. The parties complied with most of the Directions, although the Respondent’s materials were filed late, and only two days before the hearing of the matter. In particular:
(a) On 24 July 2023, the Applicant filed an Applicant’s Outline of Submissions and a Witness Statement of the Applicant;
(b) On 29 August 2023, the Respondent filed an Outline of Submissions; and
(c) On 31 August 2023, the Applicant filed an additional bundle of annexures for tendering.
No Form F3 was filed at any point by the Respondent despite multiple attempts from my chambers at contacting Ms Murray. The Hearing of the matter occurred on 31 August 2023 using Microsoft teams. While some questions were directed to the Applicant by the Commission, only Ms Murray gave sworn evidence and was cross-examined in the proceedings.
While the engagement of the Respondent and Ms Murray in the compliance with Directions and preparation for the Hearing was seriously lacking, with the Respondent’s submissions being filed only two days before the Hearing, I accept that Ms Murray has been affected by domestic violence and parenting issues, possibly extending to the time of the Applicant’s dismissal, and those issues have affected her ability to comply.[1]
Background Facts
The Applicant commenced work with the Respondent in and around July 2016 as a Dental Assistant.
In February 2021 the Applicant resigned from her employment advising that she wished to work closer to home. All the Applicant’s entitlements were paid out at that time. In March 2021, however, the Applicant was re-employed by the Respondent after advising she was not happy with her new place of employment.
The Applicant was promoted to Practice Manager in August 2022.
On or about 27 March 2023, a man telephoned the Applicant claiming to have been put in charge of the practice by Ms Murray. His name was Mr Richard Huxley (Mr Huxley), and he was Ms Murray’s partner. Mr Huxley took over the management of the business from Ms Murray.
The Applicant never met Mr Huxley in person. Mr Huxley monitored the workplace by CCTV, and telephoned and messaged the Applicant. The Applicant stated that Mr Huxley spoke to her in an aggressive manner and belittled her stating words to the effect of “What kind of practice manager are you?”.
The Respondent described its business as “non-operational” since around 30 to 31 March 2023.[2] Ms Murray was unable to work around the time of the dismissal.[3]
On or about 31 March 2023, in a telephone conversation with Ms Murray, the Applicant complained about Mr Huxley’s unprofessional behaviour towards her.
The Applicant stated that on the weekend of 1 and 2 April 2023, she was anxious about going to work as she knew that Mr Huxley would be watching her on CCTV.
On 3 April 2023, the Applicant attended work. She prepared the practice for the first patient; however, the locum dentist (contractor) had not arrived. The Applicant was unsure what was happening as she typically organized the locum dentist on behalf of the business, but she was not told by Mr Huxley that it was required for Monday.
The Applicant spoke with Mr Huxley on the phone, and he said that he was already organizing the locum dentist. In order to perform her compliance duties, the Applicant asked for the locum dentist’s details so that she could record it. The Applicant said Mr Huxley began speaking aggressively to her and this triggered a panic attack.
The Applicant went to the Prince of Wales Hospital emergency room and was treated for depressive thoughts and a panic attack. She received her discharge referral notes. When she was discharged, the Applicant sent Ms Murray by WhatsApp Message her discharge referral notes.
Later on the afternoon of 3 April 2023, the Applicant received a telephone call from Ms Murray enquiring about her welfare. The Applicant advised Ms Murray that it was Mr Huxley’s behaviour that caused her hospitalization. After approximately 30 seconds, the Applicant’s husband took the phone from the Applicant and aggressively addressed Ms Murray using profanities.[4] The Applicant stated Ms Murray terminated her employment on the phone and sent a text messages confirming she was dismissed as follows:
Miss Murray:
Please check your email. Given you Didn’t get back to me. I’m so shocked by what your husband said. So much derogatory language. he was so abusive. To your boss..
It needs to be sorted today.
Get back to me.
Check your email. And get back to me.
You missed a call, but the caller didn’t leave a message.
You missed a call, but the caller didn’t leave a message.
You are not required any more at striking smile. Your husband said fuck you maybe 10 times and that’s not ok. You will no longer be require. Given you husband wanted to use derogatory language including referring multiple times, in a phone call between us, “fucking Richard…who is fucking Richard”. I wish you well Naghmeh. But that’s but my world. This is your formal notice of termination. Melissa is so upset that your husband was so demeaning to Melissa.
You are formally terminated. Due to your families denigrating and derogatory remarks.
2 weeks advance notice.
Richard will be in touch tomorrow.
On 4 April 2023, the Applicant received a number of missed calls from Ms Murray. Ms Murray stated that the Applicant didn’t come to work and so she was dismissed.
The Applicant also received a text message that that was required to sign a resignation. That message was as follows:
Miss Murray:
We need to meet today for you o sign a formal resignation. Please advise a suitable time. And place if you wish to meet at the surgery.
Not.
I haven’t heard back from you. Please respond.
The Applicant:
I’m not available today as I need to attend doctor appointments following up yesterday’s incident. Send me the termination letter by email. Regards
Miss Murray:
Please advise your email.
…
Miss Murray:
Your choice. Of course.
On 4 April 2023, at 7.19pm, Ms Murray emailed the Applicant as follows:
We need to meet Naghmeh. Please let me know a suitable time. But termination is effective as of yesterday. You have to meet at some point to sign documents. If you meet it will be more financial for you as potentially you/me can agree on an extra 2 weeks pay. Call me.
On 5 April 2023, at 10.35am, Ms Murray emailed the Applicant as follows:
Hi Naghmeh. I haven’t heard back from you so we need to proceed to go through termination given you don’t wish to sign a deed of release. This means 3 meetings. 3 consecutive days. And termination without prejudice but no extra pay. The $1500 that was loaned to you on the 10th of March. And the additional payment of $2000 on the 7th of December. They will both be absorbed within your final pay. I’m away as of Friday. If you wish to meet and sign the deed of release today or tomorrow. Please let me know. Kind regards. Melissa.
On 24 April 2023, the Applicant received a partially filled out termination letter from Ms Murray, in which no reason for termination was given.
The Respondent used a business called “Employsure” to help manage documentation in relation to staff members.
The Applicant made a Workers Compensation claim arising from the circumstances of her employment. Liability for that claim has been accepted,[5] and Workers Compensation payments commenced from 4 April 2023, the day after dismissal.[6] Those payments reduced from 1 August 2023.
In the Respondent’s Outline of Submissions filed two days before the Hearing, the Respondent outlined what it described as “Reasons for termination: (not in order of importance or timeline)”, that included such allegations as that the Applicant was unsuitable for the practice management role, left work early, completes tasks incorrectly, sent wrong time and date messages to patients, placed multiple orders for products and did not follow up broken equipment (the Performance Allegations).
Consideration
There were no jurisdictional objections to the Applicant’s application being determined by the Commission. Specifically, I am satisfied that:
(a) the Applicant was dismissed at the initiative of the employer (ss 385(a) 386(1)(a));
(b) her unfair dismissal application was lodged within the 21 day statutory time limitation found at s 394(2) of the Act;
(c) the Applicant is a person protected from unfair dismissal in that:
(i) she had completed the minimum employment period set out in ss 382 and 383 of the Act; and
(ii) her salary was below the high income threshold;
(d) her dismissal was not a case of genuine redundancy (s.385(d)); and
(e) her dismissal was not a case involving the Small Business Fair Dismissal Code (s.385(c)).
The only outstanding issue is whether the Applicant’s dismissal was ‘harsh, unjust or unreasonable,’ and therefore an unfair dismissal. To this end, I must direct attention to s.387 of the Act, dealing with the matters to be taken into account by the Commission in determining whether the dismissal was unfair. It is trite to observe that each of the matters must be considered and a finding made on each of them, including whether they are relevant or not.
Was the Dismissal Harsh, Unjust or Unreasonable?
Section 387 of the Act identifies the matters that the Commission must take into account in deciding whether a dismissal was “harsh, unjust or unreasonable:”
(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);
(b) Whether the person was notified of that reason;
(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
(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;
(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal;
(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;
(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.
Section 387(a) - whether there was a valid reason for the applicant’s dismissal
In Rode v Burwood Mitsubishi,[7] a Full Bench of the then Australian Industrial Relations Commission discussed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996 and referring to Selvachandran v Peteron Plastics Pty Ltd[8](Selvachandran). The Full Bench found:
[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).
[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.
An issue immediately arises in this matter as to what in fact were the reasons for dismissal in this matter. The Respondent asserts the reasons were, or at least included, the Performance Allegations. The evidence of Ms Murray was as follows:
From your response, you have accepted that you terminated the applicant's employment on 3 April, is that correct? Is that the Monday?
Yes? So on the Monday the applicant's husband got on the phone and was quite abusive and used profanity language towards me, so it was inappropriate language. This has happened in the past, at work functions as well, so we no longer include partners at work functions. It was not a conversation for him, I was ringing to check on my employee's health, after her visit, and her breathing difficulty on the day, so I found it very stressful to be bombarded with the language that was communicated to me at the time.
For clarity, for myself and the Deputy President, was the reason that you just stated the reasons for termination? The reasons for termination are outlined in the document that I've submitted, in terms of the practice manager role not being fulfilled.
Okay. Did you provide the reasons, listed in your response, to the applicant, at the dismissal? I attempted to meet with Nadma and those attempts were ignored.
Those attempts were on 4 April, is that correct? There were multiple attempts during that week, yes.
I reject the Respondent’s submission that the reason(s) for the actual dismissal of the Applicant included the various reasons regarding the Performance Allegations. The Respondent was not precluded from advancing reasons for dismissal in correspondence with the Applicant and did in fact give reasons. On 3 and 4 April 2023, the stated reason related to what the Applicant’s husband had said, and on 4 April 2023 a resignation was sought. In the absence of any reference to the Performance Allegations in the various pieces of termination correspondence, I am unable to find that such performance issues were reasons for the actual dismissal, though I accept that the Performance Allegations were genuinely held concerns of Ms Murray that she sought to address with the Applicant
While the conduct of the Applicant’s husband is undisputed, it cannot constitute a valid reason for the Applicant’s dismissal. The Applicant cannot be held responsible for that conduct, and there was no valid reason for the dismissal. The Respondent’s failure to establish the existence of conduct allowing for the finding of any valid reasons for dismissal weighs in favour of finding the dismissal was unfair.
Procedural fairness- s.387(b)-(e)
The evidence disclosed two forms of procedural fairness failures in this matter. They were:
(i) The failure to warn the Applicant sufficiently regarding unsatisfactory performance during employment (s.387(e)); and
(ii) The failure to ensure notification of, and ability to respond to, the reasons regarding his capacity or conduct (s.387(b) and (c)).
Sub-sections (b) - (e) of s 387 of the Act may be broadly characterised as issues relevant to whether a dismissed employee was afforded procedural fairness. It is correct to observe that, even if there was a valid reason for an employee’s dismissal, the dismissal may still be held to be unfair if the employee was not afforded procedural fairness.
I am not satisfied that the process leading up to, and including the Applicant’s dismissal on 3 April 2023, was fair. In particular, the Applicant:
a)was not subsequently consulted regarding her Husband’s conduct;
b)was not given any opportunity to defend the subsequently raised Performance Allegations or explain her conduct (s 387(c)).; and
c)was simply told that she was terminated due to her Husband’s conduct
The Respondent’s failure to provide such procedural fairness weighs in favour of the finding that the dismissal was unfair.
Support Person (s.387(d))
Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present. As there were no discussions prior to termination, no such opportunity arose.
Size/Human Resource Specialists ss 387(f), (g)
Paragraphs (f) and (g) of s.387 of the Act provide:
(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;
As noted above, the Respondent used a business called “Employsure” to help manage documentation in relation to staff members. The Applicant submitted that “The respondent had a dedicated human resource team, being Employsure”,[9] though that submission was finally put as “…Employsure has their own legal team that could have provided assistance to the respondent”.[10]
The Respondent is a very small business, with apparently only one Dentist practitioner being Ms Murray. The Respondent does not have dedicated human resource management specialists or expertise in its enterprise. Whatever access the Respondent may have had to the business called Employsure, whatever their expertise, did not constitute the dedicated expertise within the Respondent to which the Act refers.
Clearly, the deficient procedures followed in effecting the dismissal were impacted by the size of the Respondent and the lack of dedicated human resource expertise.
Conclusion
I have made findings in relation to all matters specified in section 387 as relevant, and note that neither party submitted that any other relevant factors existed.[11] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable and therefore an unfair dismissal.
I have found the Respondent did not have valid reasons for the dismissal of the Applicant, and I consider on balance that the dismissal of the Applicant was harsh, unjust or unreasonable due to failures in procedural fairness. Those failures in procedural fairness can be explained in part by the size of the Respondent’s enterprise and the lack of dedicated human resource expertise, however that does not disturb my overall finding that the dismissal of the Applicant was harsh, unjust or unreasonable.
REMEDY
The Applicant does not seek reinstatement or re-employment. Given all the circumstances, I consider reinstatement is inappropriate (s 390(3)).
Section 392 of the Act sets out the matters the Commission must take into account when assessing compensation for unfair dismissal. These are:
‘(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.
In relation to remedy, the Applicant’s Submission urged the following:
The Applicant seeks the Commission to enforce the maximum compensation of 26 weeks in this matter for the grossly unjust dismissal, the egregious and numerous breaches of the Act and blatant disregard of the directions of the Commission.
The above submission, effectively urging punishment of the Respondent, is not the approach to remedy provided by the Act.[12] As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries,[13] the well-established approach to the assessment of compensation under s.392 of the Act is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket .[14] This approach was articulated in the context of the Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.[15]
The effect of the order on the validity of the employer’s enterprise – s.392(2)(a)
There was no submission that there would be any effect of the order on the viability of the Respondent’s enterprise.
The length of the person’s service with the employer – s.392(2)(b)
The Applicant’s period of employment was approximately two years. The Applicant’s length of service does not weigh in favour of reducing or increasing the amount of compensation ordered.
I note that in the Hearing the Applicant submitted that the relevant period of service was back to the Applicant’s first employment in 2016. That submission was, however, withdrawn in correspondence received by my Chambers on the day following the Hearing.
The remuneration that the person would have received, or would have been likely to
receive, if the person had not been dismissed – s.392(2)(c)
The assessment of the length of continued employment is a discretionary decision. It is clear that by the time of the Applicant’s dismissal the relationship between the Applicant and Respondent was deteriorating, to the extent that it was unlikely to continue for any significant period thereafter. The actions of the Applicant’s husband in the telephone call with Ms Murray did not assist continued employment. Additionally, the Respondent’s business was effectively non-operational due to the absence of Ms Murray.
I consider the Applicant’s employment would have continued for a period to allow for procedural fairness to be afforded to the Applicant in relation to the Performance Allegations. I estimate that the Applicant’s employment would have continued for a further eight weeks, which would allow for sufficient time for the Respondent to specify the Performance Allegations, provide an opportunity for the Applicant to discuss and respond, and to then give the Applicant notice of her dismissal.
I note the Applicant referred to a “tenuous relationship” between the Applicant and Ms Murray, though the Applicant said that was normal and would not have resulted in termination.[16] I also accept that Ms Murray had conversations with the Applicant regarding the Performance Allegations for months by the time of the dismissal,[17] and that they were a live issue between the parties, although not relied upon as a reason in the actual dismissal.
Mitigation/Remuneration Earned – s.392(2)(d) and (e)
The Applicant received workers compensation payments, which must be taken into account.[18] Those payments commenced the day after the dismissal.
Other Matters Relevant – 392(2)(g)
The Applicant appears to have received two weeks’ pay in lieu of notice. I make no deduction because of that payment as I consider that the Respondent would have made such notice payment after having accorded procedural fairness to the Applicant.
Misconduct reduces amount – 392(3)
Section 392(3) of the Act provides:
(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.
I do not consider it appropriate that compensation ordered should be reduced.
Conclusion and order as to remedy
I consider that reinstatement is not an appropriate remedy and that an award of compensation is appropriate. I estimate the Applicant would have received a further eight weeks remuneration had he not been terminated. From that eight week payment the workers compensation payments received relating to the eight weeks after dismissal must be deducted (the Compensation Payment).
I make no deduction for contingencies, consider the impact of taxation on the amount needs no accommodation, and note the Compensation Payment will be subject to the deduction of taxation. The Compensation Payment is below the compensation cap (ss 392(5), (6)).
The Compensation Payment, less any required deduction in taxation, is to be made within 21 days of this decision. I consider that such a result satisfies the ‘fair go all round’ test in s 381(2) of the Act.
The parties are directed to confer and provide agreed orders as to the gross and net amounts of Compensation Payment within seven days from the date of this decision. In the absence of agreement, brief written submissions should be provided by that date to enable me to determine the appropriate amount to be included in any order for payment.
DEPUTY PRESIDENT
Appearances:
Miss Shelly Tamas (Solicitor) for the Applicant.
Miss Melissa Murray for the Respondent
Hearing details:
Microsoft Teams.
31 August 2023.
[1] Exhibit R1 at DCB P. 87.
[2] Transcript PN 425.
[3] Transcript PN 173.
[4] Transcript PN 270.
[5] Transcript PN 14.
[6] Transcript PN 151 to
[7] Print R4471, at [18] and [19].
[8] (1995) 62 IR 371
[9] Transcript PN 404
[10] Transcript PN 375.
[11] S.387(h) of the Act.
[12] Transcript PN 138 and 139.
[13] [2016] FWCFB 7206, at [16].
[14] (1998) 88 IR 21.
[15] [2013] FWCFB 431.
[16] Transcript PN 143.
[17] Transcript PN 338 and 343.
[18] Transcript PN 166 and 167.
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