[2017] FWC 4785

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Bradley Scott Carlin-Smith
v
Neirbo Real Estate Pty Ltd T/A Homes Group Estate Agents
(U2017/3183)

COMMISSIONER WILSON

MELBOURNE, 18 SEPTEMBER 2017

Application for an unfair dismissal remedy.

[1] This decision is about an application for unfair dismissal remedy made by Bradley Carlin-Smith, who was dismissed from employment by Neirbo Real Estate Pty Ltd, trading as Homes Group Estate Agents, (Neirbo) on 2 March 2017.

[2] Section 396 of the Fair Work Act 2009 (Cth) (the Act) requires the determination of four initial matters before consideration of the merits of the application. Section 396 relevantly provides:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(d) whether the dismissal was a case of genuine redundancy.”

[3] In relation to the first two of those matters, I find that Mr Carlin-Smith’s application was lodged with the Fair Work Commission within the 21 day period for making such applications, and the Commission has already found in an earlier jurisdictional decision that at the time he was dismissed he was a person protected from unfair dismissal. 1

[4] It is relevant to the determination of this matter that Neirbo is a small business employer within the meaning of the Act. Material provided by Neirbo in submissions to the Commission regarding a jurisdictional objection it made that Mr Carlin-Smith was not a person protected from unfair dismissal for reason of his annual rate of earnings exceeding the high income threshold discloses that at the time of Mr Carlin-Smith’s dismissal it employed 11 people, including Mr Carlin-Smith and Mr O’Brien. That matter is not contested by Mr Carlin-Smith.

[5] As a result, it is necessary to initially consider in this decision whether Mr Carlin-Smith’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code).

[6] The circumstances of the matter also require a consideration of whether the dismissal was a case of genuine redundancy, however for the reasons set out below I do not find that it was.

[7] In relation to the question of whether Mr Carlin-Smith’s dismissal was consistent with the Code, for the detailed reasons set out below, I have found that it was not, and that, after consideration of the criteria within s.387 of the Act, I am satisfied that his dismissal was harsh, unjust and unreasonable and that compensation should be awarded.

BACKGROUND

[8] Mr Carlin-Smith commenced employment with Neirbo on 2 November 2015. At the time of his dismissal he was employed as a Real Estate Agent and the Officer in Effective Control at Neirbo’s Sunshine office. An Officer in Effective Control is appointed under Victorian consumer licensing legislation and holds certain statutory obligations and duties about the conduct of a Real Estate Agent’s office.

[9] Mr Carlin-Smith’s unfair dismissal application has already been subject of a jurisdictional decision by Deputy President Gooley on 19 May 2017 dealing with the subject of whether Mr Carlin-Smith earned more than the high income threshold. 2 In her decision Deputy President Gooley found that Mr Carlin-Smith was covered by the Real Estate Industry Award 2010 and that he was a person protected from unfair dismissal.

[10] On 1 March 2017 Mr Carlin-Smith’s employer, Mr Matthew O’Brien, who is a Director of Neirbo, asked to meet with him and in the course of that meeting Mr O’Brien told Mr Smith that he could no longer be employed in his current position which “has become redundant effective from Tuesday 8^th March 2017” and that instead he could offer Mr Carlin-Smith two alternatives for continuing his relationship with Neirbo. Those alternatives were either employment in a lower level position, as a Property Sales Associate, or to be engaged as a self-employed licensee of the company. 3

[11] Mr Carlin-Smith had not been aware of the meeting before it started and the meeting did not take very long.

[12] As confirmation of the situation and the alternatives on offer Mr O’Brien gave Mr Carlin-Smith two letters setting out the propositions.

[13] Mr O’Brien characterised these alternatives as Mr Carlin-Smith having being made redundant from his current position with the company and being prepared to make available to him, if he wanted, one of two ongoing alternatives.

[14] In the course of the meeting on 1 March 2017 Mr Carlin-Smith said he would consider his position and he then left the office.

[15] Mr O’Brien argues that Mr Carlin-Smith’s termination of employment was a redundancy that came about because he had made a decision to restructure the business. In particular, he had decided he no longer required an Officer in Effective Control at the Sunshine office, other than himself.

[16] Mr Carlin-Smith rejects that possibility, submitting that he was instead dismissed for other reasons, unconnected with Neirbo’s business structure. In particular, he puts forward that he was terminated for reasons of misconduct, the particulars of which he denies, as well as arguing that any such conduct that could be established on his behalf would not in all the circumstances be misconduct.

[17] Evidence was given in this matter only by Mr Carlin-Smith and Mr O’Brien with the matter proceeding before me in the form of a determinative conference in which both parties were able to relate to the Commission their evidence and their perspectives about the contentions of the other. The evidence and submissions of each suffered from a lack of a coherent timeline and, at times, each put forward evidence that must be regarded as selective, self-serving and unlikely to be complete in all respects.

[18] The discussion between Mr O’Brien and Mr Carlin-Smith on 1 March 2017, and the content of the letters of confirmation of redundancy, in which Mr Carlin-Smith was advised that he would no longer be employed in his then current position put forward two alternatives for an ongoing relationship with Neirbo. At one glance they may be the sort of offers that may be put forward by an employer seeking to characterise the end of an employment relationship as a genuine redundancy, complying with an obligation to consult with such an employee or to consider alternative positions. However, the subsequent events show that Mr Carlin-Smith’s employment did not end for reason of redundancy, but as a result of allegations of misconduct.

[19] In relation to the matters of misconduct, the state of the evidence, such as it is, does does not allow a finding that, prior to 2 March 2017 Mr O’Brien held substantial concerns about Mr Carlin-Smith’s ongoing employment for reason of misconduct.

[20] Following the discussion between the two on 1 March 2017, Mr Carlin-Smith emailed Mr O’Brien on the same day advising that he would respond to the letters on 7 March 2017. He then sought clarification about his annual leave entitlement. Mr O’Brien responded shortly after putting forward the contention that Mr Carlin-Smith had a negative annual leave entitlement. 4

[21] On the morning on 2 March 2017 Mr Carlin-Smith decided to check his status with the Victorian Business Licensing Authority. Once he established that his name had been removed as the Officer in Effective Control he decided that he should no longer remain on the premises and his evidence is that he left at around midday.

[22] A series of text messages then passed between Mr O’Brien and Mr Carlin-Smith between about 1:00 PM and 2:30 PM on 2 March 2017. What was exchanged in that communication chain led to Mr Carlin-Smith’s dismissal from employment. Within the same time period there were several unsuccessful endeavours by Mr O’Brien to phone Mr Carlin-Smith.

[23] Mr O’Brien’s evidence is that on 2 March 2017, prior to 1:00 PM, he had learned certain things about Mr Carlin-Smith’s conduct that led him to form the view he needed to ask questions of Mr Carlin-Smith and his conduct. Mr O’Brien’s evidence on these matters includes that, all on 2 March 2017;

he had been looking through files and noticed in relation to a particular Yarraville property that the file appeared to disclose Mr Carlin-Smith had not been acting in the best interest of Neirbo and that a fee that should have been claimed for work associated with the propertyt had never been invoiced;

a person had attended Neirbo’s offices seeking a payment to them of $15,000 for having introduced a buyer at a particular Sunshine North property; and

a conveyancer left an envelope of cash at Neirbo’s offices intended for Mr Carlin-Smith, which Mr O’Brien took to be an inappropriate cash payment or secret commission;

he received a communication that Mr Carlin-Smith had held himself out to one or more suppliers to be an owner or part-owner of Neirbo. 5

[24] Mr O’Brien’s evidence is that having learned of these things on 2 March 2017, he decided he needed to speak with Mr Carlin-Smith about the matters, which he attempted to do from near to 1:00 PM.

[25] At the time Mr Carlin-Smith was in a meeting with his solicitor, as he was concerned about his legal status as a Real Estate Agent, having learned earlier in the day that he had been removed as the Officer in Effective Control. Despite noticing Mr O’Brien’s phone calls to him, he elected not to answer them. What then followed is a series of text messages between the two with a deteriorating tone that ultimately led to Mr O’Brien dismissing Mr Carlin-Smith. The text messages between the two are as follows (noting that, other than the first time, all times are those provided to the Commission by Mr Carlin-Smith); 6

Mr O’Brien (1.01 PM) “Tried calling. Have sent email please respond asap. Thanks.”

Mr Carlin-Smith (no time indicated) “Responded to all messages”

O’Brien (no time indicated) “[address of property at Yarraville] Email. Please respond

Carlin-Smith (no time indicated) “It’s expired the use is short term 3 months and as been· done between owner and tenant.”

O’Brien hangup message (1:26 PM)

Carlin-Smith (1:26 PM) “Sorry, I can’t talk right now.”

Carlin-Smith (1:38 PM) “I’m with people please leave a message and I’ll respond as soon as I can

Thanks”

Carlin-Smith (1:40 PM) You have removed me from the BLA hence rendering me unable to perform any duties”

O’Brien (1:43 PM) “Brad you rostered to be at Sunshine. You have abandoned employment I assume. Anyhow you are as of now immediately stood down pending investigation into your activities. You need to return all files keys and homes Group property to St Albans office by 4pm. TODAY.”

Carlin-Smith (1:46 PM) “Abandonment is 3 work days consecutively I was at sunshine this morning covering for Nat and with regards to your threats I will respond in accordance with your letter dated 1st of Match (sic) 2017. In the mean time I’d appreciate your bullying and harassment of me to cease immediately”

Carlin-Smith (1:47 PM) “You made your position clear respect my right to assess accordingly”

O’Brien (1:51 PM) “Return all homes Group property an keys you have been stood down in light of other issues. Deliver by 4pm to St Albans office. You are not until investigation is completed to act or represent Homes Group Estate Agents. As for bullying your (sic) not being bullied your (sic) being directed by me in capacity of company director with regards to your current employment situation which the company has every right to undertake.”

Carlin-Smith (1:57 PM) “so just confirming I’m still an employee thanks for clarifying again I will respond in accordance with your letter dated 1 March 2017 in the mean time and as a result of my removal from the BLA i am not legally able to perform my duties as directed. I will return my keys as at my termination or resignation.”

O’Brien (2:02 PM) Your terminated immediately for misconduct and insubordination your termination letter is waiting at St Albans office and you need to return all HomesGroup property today.”

Carlin-Smith (2:03 PM) “Please email me the letter you refer to.”

O’Brien (2:04 PM) “Don’t need to by law it’s waiting your collection on return of homesGroups property”

Carlin-Smith (2:08 PM) “To be fair and in line with your approach to date please send me the letter until received I will act as instructed and in accordance with your letter received to date that requires a response by Tuesday 7th March. My advice due to your threatening nature is not to attend in person any HomesGroup office”

O’Brien (2:15 PM) “You have been terminated. I have not made any threats nor have any reason to threaten you or cause you harm. However if you have concern regarding my ‘nature’ we can meet at a natural location and I suggest the Sunshine Police Station or alternatively you can return all Homes Groups belongs to Anthony Blacks office (my Solicitors).

Confirm your preference.”

[26] Further text messages about a request for the return by Mr Carlin-Smith of Neirbo property were then exchanged between the two until at least 2:28 PM.

[27] The next day, on Friday, 3 March 2017, Mr O’Brien confirmed the reasons for Mr Carlin-Smith’s termination in an email to him;

“Attention Brad,

In light of serious issues that have come to hand, and your lack of wiliness to meet to address issues (you declined to attend St Albans Office) and on 4 occasions yesterday you wouldn’t take my telephone call, and when I attended the Sunshine office while you were on allocated duty time you were not in attendance as required, I am left without alternative then to terminate your employment immediately based on your activities of serious misconduct.

As an estate agent you must at all times act fairly and honestly and to the best of knowledge and ability in the performance of the agent’s functions as an estate agent and estate agent must act in accordance with the lawful instructions of their employer, except where to do so would be contrary to good conduct as an estate agent.

. Your activities with regards to [address omitted], Yarraville - you advised that Homes Group was appointed to lease or sell the property. You have been involved in activity with regards to this property and not accounted for it correctly with your employer.

. Your activities with regards to [address omitted], Sunshine North - you spoke to a third party who state you made an offer for financial reward to them for introducing a purchaser for the property. I have meet with the third party concerned, and firstly they are not licensed estate agents with ability to enter into a shared commission arrangement, secondly I have on a number of occasions stated to you that no fee would be paid to a referral for a buyer, these discussions happened when you were in discussion with me regarding your idea of a referral reward program, thirdly no commission sharing agreement had been signed with the vendor. When I asked for you for information regarding firstly when they were in my office after you ran from the building accusing them of ambushing you, you hung up. Secondly to this when I made arrangements for you to meet with them, myself and you, you commenced the meeting without me present and continued to make arrangements writing on letterhead calculations and advising them they would need to invoice Homes Group. Your statement when I questioned further was ‘well just don’t pay them’.

. Your activities with regards to acceptance of cash/secret payments for awarding work to suppliers without my knowledge.

. Your activities with regards to purporting to have ownership and/or part ownership of Neirbo Real Estate Pty Ltd t/as Homes Group Estate Agents.

Your serious misconduct is unacceptable, unprofessional plus it has caused detriment to the reputation of the company.

I remind you that you have a fiduciary duty to Neirbo Real Estate Pty Ltd t/as Homes Group Estate Agents along with myself also with relation to information obtained during your time of employment and as such all intellectual property, trade secrets and contact lists including phone numbers you may have saved to your phone during your employment, emails you have stored on your phone, computer or other means with relation to Homes Group and hereby advise that you do not have consent to use for your own benefit or a third parties benefit.

My Solicitors office is expecting the return of Homes Group belongings, authorities, files, contact lists, product guides, vendor details, and keys tomorrow as agreed by yourself in text messages, you refused to return items to Homes Group St Albans office, and accepted the offer to deliver solicitors office. For your convenience please find address below;

Gavin J Black Lawyers and Consultants

27 Ferguson Street, Williamstown

(its next door to Compton Green)

Yours sincerely

Matthew O’Brien” 7

LEGISLATION

[28] The legislative provisions which are relevant to this matter are set out in s.388 (The Small Business Fair Dismissal Code) and s.387 (Criteria for considering harshness, etc) of the Act. The first consideration in this matter surrounds whether Mr Carlin-Smith’s dismissal was consistent with the Small Business Fair Dismissal Code. If it was, then his application fails; if it was not consistent with the Code, the Commission must necessarily turn to the provisions of s.387.

[29] Section 388 of the Act provides the following;

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”

[30] So far as is relevant, the Code provides the following;

Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

[31] If there is a finding that a dismissal is not consistent with the Code, then the Commission must have regard to the criteria set out within s.387 of the Act, which outlines the considerations for the determination of whether a dismissal was unfair. Section 387 is in the following terms;

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

CONSIDERATION

Genuine Redundancy and Small Business Fair Dismissal Code

[32] As set out above, two of the initial matters to be considered by the Commission before turning to the merits of an unfair dismissal application are whether the dismissal was a genuine redundancy and whether the dismissal was consistent with the Small Business Fair Dismissal Code.

[33] However, the overall circumstances of the matter mean that consideration of the question of there being a dismissal for reason of genuine redundancy is not relevant.

[34] This arises because of the text exchange between Mr O’Brien and Mr Carlin-Smith on 2 March 2017 in which self-evidently there was escalating tension between the two within the space of a very short time period. That tension culminated in Mr O’Brien’s unequivocal advice to Mr Carlin-Smith that he had been “terminated immediately for misconduct and insubordination”. 8 The tension had escalated from the request at 1:01 PM for Mr Carlin-Smith to respond to Mr O’Brien, which was not done; through to the declaration at 1:43 PM that Mr O’Brien deemed him to have abandoned his employment and that he was immediately stood down pending an investigation into his activities; and finally at 2:02 PM with him being “terminated immediately for misconduct and insubordination”.

[35] Because of this factual background, a finding that Mr Carlin-Smith was dismissed for reason of genuine redundancy is not available on the evidence. There may have been an intention on Mr O’Brien’s part on 1 March 2017 to make the position redundant, but by 2 March 2017, a day later, that intention had unequivocally evaporated and was replaced by a dismissal for misconduct.

[36] Because of this, consideration of this matter turns to whether or not the dismissal of Mr Carlin-Smith was consistent with the Small Business Fair Dismissal Code.

[37] The Code is in two material parts, as well as making provision for certain procedural matters. The first part of the Code is in respect of summary dismissal in circumstances where the employer believes on reasonable grounds that an employee’s conduct is sufficiently serious to justify immediate dismissal. The second part of the Code deals with the circumstances of matters of “other dismissal” in which misconduct is not raised but in which an employer must have a valid reason for dismissal based on the employees conduct or capacity to do the job.

[38] In this matter there is no aspect of the evidence that would allow a finding that Mr Carlin-Smith’s termination of employment came about because of matters that might fall within the “other dismissal” part of the Code. Instead, the circumstances of this matter reveal that Mr Carlin-Smith was dismissed because Mr O’Brien believed his conduct was sufficiently serious to justify immediate dismissal.

[39] There are five matters relied upon by Mr O’Brien in his confirmation email to Mr Carlin-Smith about his termination of employment on 3 March 2017. Those matters are;

Mr Carlin-Smith’s conduct in relation to Mr O’Brien’s endeavours to get in touch with him on 2 March 2017, with the matters he relies upon being set out in his letter as follows;

Mr Carlin-Smith’s actions in relation to a Yarraville property in which it is alleged that Mr Carlin-Smith neglected to charge a fee for work undertaken for the client by Neirbo;

His actions relating to the property at Sunshine North in which it is alleged that a commission payment was agreed by Mr Carlin-Smith for having introduced a buyer;

Alleged activities in relation “to acceptance of cash/secret payments for awarding work to suppliers”; and

Mr Carlin-Smith’s activities purporting to others to have ownership or part ownership of Neirbo.

[40] As referred to above, the Commission finds the Respondent is a small business employer within the meaning of the Act, with such finding being consistent with the evidence and not disputed by the Applicant.

[41] I turn now to a consideration of the relevant elements of the Code, namely those within the part dealing with summary dismissal.

Consistency with the Code – “summary dismissal”

[42] The application of the Code with respect to summary dismissals was considered by the Full Bench in Ryman v Thrash Pty Ltd, where it was held that the reference to “serious misconduct”, in relation to the Code’s reference to conduct being sufficiently serious to justify immediate dismissal, is to be read as bearing the same meaning in reg.1.07 of the Fair Work Regulations 2009 (the Regulations). 9 The Full Bench expounded as follows;

“[38] We therefore consider that the “Summary dismissal” section of the Code applies to dismissals without notice on the ground of serious misconduct as defined in reg.1.07.

[39] To be clear, nothing stated above is to be taken as suggesting that in relation to such a dismissal it is necessary for the Commission to be satisfied that the serious misconduct which is the basis for the dismissal actually occurred in order for the dismissal not to be unfair. As was explained in Pinawin T/A RoseVi.Hair.Face.Body v Domingo:

“[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.”

[40] Whether the employer had “reasonable grounds” for the relevant belief is of course to be determined objectively.

[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:

(1) If a small business employer has dismissed an employee without notice - that is, with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.

(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.” 10 (reference omitted)

[43] The Full Bench’s decision in Pinawin related to concerns about the impact of an employee’s drug-taking on the business premises. In relation to the absence of an investigation, the Full Bench concluded;

“Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well. They directly observed his behaviour. They believed that he had made lifestyle choices that involved drug-taking and this directly related to his capacity to perform his work. His work involved close personal dealings with clients. At the time they made their decision, Mr Domingo was hospitalised. They were conscientious in considering the grounds for summary dismissal in regulatory material available on the internet. In these unusual circumstances we are of the view that the employer, when considering Mr Domingo’s recent erratic and unusual behaviour, formed the belief that Mr Domingo had engaged in conduct that justified immediate dismissal on reasonable grounds.” 11

[44] In considering whether Mr Carlin-Smith’s dismissal was consistent with the Code, I consider first whether Neirbo had “reasonable grounds” for its belief that Mr Carlin-Smith’s conduct was sufficiently serious to justify immediate dismissal taking into account the principles laid out in Ryman v Thrash. 12 Relevantly it is necessary to consider the questions of whether;

Neirbo genuinely held a belief that Mr Carlin-Smith’s conduct was sufficiently serious to justify immediate dismissal; and

whether that belief was, objectively speaking, based on reasonable grounds, and relatedly whether a “reasonable investigation into the matter” had been carried out.

Genuine belief

[45] The first consideration is whether the Respondent “genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal”.

[46] At least one of the five matters relied upon in Mr O’Brien’s 3 March 2017 letter confirming the reasons for Mr Carlin-Smith’s reasons for his termination of employment, had been known to Mr O’Brien to some extent prior to his decision to terminate Mr Carlin-Smith through text message on 2 March 2017. In particular, Mr Carlin-Smith’s alleged activities in respect of a commission payment allegedly owed by Neirbo for the sale of a Sunshine North property had first become known to Mr O’Brien when there had been a demand for the payment of the commission in February 2017.

[47] In comparison, the alleged actions of Mr Carlin-Smith in relation to the Yarraville property appears to have come to Mr O’Brien’s attention only during the morning of 2 March 2017 when he was looking through files, as does the allegation that Mr Carlin-Smith may have been receiving cash or secret commissions from suppliers. The evidence is inconclusive about when Mr O’Brien first formed a view that Mr Carlin-Smith had held himself as an owner or part-owner of Neirbo, however, Mr O’Brien’s evidence was that he received correspondence on the morning of 2 March 2017 which led him to the conclusion Mr Carlin-Smith was holding himself out as involved in the businesses’ ownership.

[48] Obviously, the concern on Mr O’Brien’s part that Mr Carlin-Smith had refused or failed to return his phone calls and text messages only emerged in the period from 1:00 PM on that day.

[49] The matter that was known to Mr O’Brien prior to 2 March 2017, being the allegation that he committed to payment of a commission for a buyer having been introduced for a property, may not reasonably be considered to be a factor about which Mr O’Brien held a “genuine belief” for summary dismissal. If he had held such a belief he would have acted on the matter at the time it came up. A failure to quickly raise with an employee a matter that “is sufficiently serious to justify immediate dismissal” will normally, but not always, lead to a finding that the matter is not so sufficiently serious. In contrast to other matters before the Commission, there is no evidence before me that would lead to a finding that, notwithstanding the knowledge of misconduct, there was some business imperative to keep Mr Carlin-Smith in employment for a time while other arrangements were made. 13 There is also no evidence that any other arrangements were being made.

[50] The matters which first came to Mr O’Brien’s attention on 2 March 2017 may reasonably be considered to be matters about which Mr O’Brien held a genuine belief that they may lead to Mr Carlin-Smith’s termination of employment.

[51] The failure by Mr Carlin-Smith to respond to Mr O’Brien’s demands from 1:00 PM requesting he get in contact with him could not reasonably be considered to form a genuine belief on the part of Mr O’Brien that Mr Carlin-Smith’s conduct justified summary dismissal. There was no emergency that had to be responded to, or act of physical violence that left the employment relationship untenable from that moment. Mr Carlin-Smith was not discourteous in his responses to Mr O’Brien and in fact responded to his employer, albeit by text. Despite what Mr O’Brien put in his text message that Mr Carlin-Smith’s behaviour was misconduct and insubordination, it was neither.

[52] On the foregoing analysis, Mr O’Brien could reasonably be said to have “genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal”, over three matters – that Mr Carlin-Smith had purported to have ownership or part ownership of Neirbo; that had he not charged a fee for work associated with the Yarraville property and that he may have been receiving cash or secret commissions from suppliers.

[53] As a result, the first element of the test for assessment of whether the “summary dismissal” section of the Code, as identified by the Full Bench of the Commission in Pinawin and confirmed in Ryman v Thrash, is satisfied.

Whether belief based on reasonable grounds

[54] The second consideration is whether the Respondent’s belief “was, objectively speaking, based on reasonable grounds”.

[55] The Full Bench of the Commission has held that the reference to “serious misconduct” bears the same meaning for these purposes as that provided in reg.1.07 of the Regulations, which provides;

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

[56] Mr O’Brien genuinely believed that Mr Carlin-Smith’s services should be dispensed with because of what he alleged to be the receipt by Mr Carlin-Smith of cash payment/secret commissions; a failure to act in the company’s best interest in respect of the Yarraville property; and him having allegedly held himself out as an owner or part-owner of the business. However, none of these matters at that point in time had been the subject of any reasonable investigation on the part of Mr O’Brien. In fact, Mr O’Brien had formed views about each and considered that Mr Carlin-Smith should be immediately dismissed, when none had even been put to Mr Carlin-Smith for response.

[57] In respect of the Yarraville property, the extent of the exchange between the two, which can hardly be called an investigation, was the text exchange shortly after 1:00 PM on 2 March 2017 in which Mr O’Brien enquired “[Yarraville] Email. Please respond” and Mr Carlin-Smith replied “It’s expired the use is short term 3 months and has been done between owner and tenant.”

[58] The circumstances in respect of the allegation that Mr Carlin-Smith had been receiving cash payment/secret commissions from suppliers were that Mr O’Brien alleges that a conveyancer brought an envelope of cash to the office for Mr Carlin-Smith on 2 March 2017. There is no evidence before the Commission that the subject had even been brought to Mr Carlin-Smith’s attention prior to it being included within the 3 March 2017 letter of termination as one of the grounds for dismissal. The allegation made that Mr Carlin-Smith had held himself out as an owner or part-owner of Neirbo’s business has not been supported by any documentary evidence to the Commission and Mr O’Brien’s oral evidence on the subject is imprecise.

[59] On the basis of the foregoing, it is apparent that while Mr O’Brien may have believed that Mr Carlin-Smith’s dismissal on the ground of misconduct was warranted, there is insufficient evidence to make the collateral finding that his belief “was, objectively speaking, based on reasonable grounds”. As a result, I am unable to find that Mr Carlin-Smith’s termination of employment was consistent with the Small Business Fair Dismissal Code. It therefore becomes necessary to consider whether Mr Carlin-Smith’s dismissal was an unfair dismissal within the meaning of the Act, taking into account the criteria for considering harshness, etc., set out within s.387.

CONSIDERATION

[60] Determination of whether Mr Carlin-Smith’s dismissal was harsh, unjust or unreasonable requires each of the matters specified in s.387 to be taken into account.

[61] The Full Bench has summarised the approach that should be taken by the Commission to the criteria within s.387 in the following way; 14

“[28]The following propositions concerning consideration as to whether there is a valid reason for dismissal for the purpose of s.387 are well established:

a valid reason is one which is sound, defensible and well-founded, and not capricious, fanciful, spiteful or prejudiced; 15

a reason would be valid because the conduct occurred and justified termination; conversely the reason might not be valid because the conduct did not occur or it did occur but did not justify termination (because, for example, it involved a trivial misdemeanour); 16

it is not necessary to demonstrate “serious misconduct” or misconduct sufficiently serious to justify summary dismissal in order to establish a valid reason for dismissal; 17

the existence of a valid reason to dismiss is not assessed by reference to a legal right to dismiss 18 (so that, for example, where summary dismissal has occurred, it is not necessary to determine whether the right of summary dismissal was legally available); and

the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07 has occurred, since reg.1.07 has no application to s.387(a) (although a finding that misconduct of the type described might well ground a conclusion that there is a valid reason for dismissal based on the employee’s conduct). 19“ (original references)”

[62] I will deal with each of the criteria within s.387 in turn.

(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)

[63] Having been dismissed for misconduct, the Commission is first required to find whether on the balance of probabilities the alleged misconduct actually occurred. 20 In doing so, the Commission will take into account the need to be properly satisfied of the proofs of the conduct; without applying a standard of proof higher than the balance of probabilities.21 The Commission will also take into account the need for honesty on the part of the Applicant during the course of an investigation.22

[64] The letter of termination of employment issued by Mr O’Brien to Mr Carlin-Smith refers to five matters of misconduct. One of those matters had arisen well prior to 2 March 2017 (the allegations about a commission payment owed on the property at Sunshine North); three had arisen in the course of the morning of 2 March prior to the voice mails and text exchanges (Mr Carlin-Smith holding himself as an owner or part-owner of Neirbo, Yarraville and the allegation of undeclared cash or secret payments); and one had arisen in the course of the voice mails and text messages on 2 March 2017.

[65] The allegation regarding the demand for a cash-payment for procuring a buyer at a Sunshine North property was not a new one on 2 March 2017. However, what was new was that the demand was apparently repeated by someone who came to the company’s office. That matter could reasonably have been the subject of a requirement from Mr O’Brien for a full explanation from Mr Carlin-Smith, coupled with a proper investigation. Neither step flowed from the events on 2 March 2017. The first occasion of a demand for the payment of the cash payment had not led to an investigation or allegations being put to Mr Carlin-Smith, or to his summary dismissal and there is nothing within the evidence which Mr O’Brien has put forward about the events on 2 March 2017 which would suggest a new dimension to the subjects that should have reasonably led to Mr Carlin-Smith’s dismissal for the subject on that day.

[66] It is to be noted as well that Mr O’Brien’s evidence on the subject of the demand for cash payment is woefully inadequate and satisfies no reasonable standard of proof. There is merely his assertion that the demand for cash payment was repeated on the morning of 2 March 2017. He has no record of who the people were who made the demand, nor has he brought either of those people forward to corroborate his evidence on the subject. There is no documentary evidence before the Commission that would even allow a finding that the demand was repeated on 2 March 2017, as asserted by Mr O’Brien. As a result, the Commission is unable to find that this allegation was a valid reason for Mr Carlin-Smith’s termination of employment.

[67] While Mr O’Brien’s evidence is that he became aware that Mr Carlin-Smith had possibly held himself out as an owner or part owner of Neirbo through a follow up email reminder to pay an outstanding invoice on 2 March 2017, his evidence is imprecise on this matter. Mr Carlin-Smith put forth in his evidence that the invoice was in response to a one hour consultation meeting which both he and Mr O’Brien attended in relation to social media. Mr O’Brien did not refute this evidence. It is also not clear when Mr O’Brien received the initial invoice and whether or not this caused him to suspect that Mr Carlin-Smith had possibly held himself out as an owner or part owner of Neirbo. The evidence therefore suggests that whilst Mr O’Brien had recently had this come to his attention on 2 March 2017, that in fact it is more likely this was not the first time this had come to his attention. In any event the matter had not, by 2 March 2017, been the subject of discussion between the two. There is nothing before the Commission that would suggest that this matter in and of itself, or in combination with other matters, should lead to Mr Carlin-Smith’s termination of employment. The allegation in this regard is not made out as a valid reason for Mr Carlin-Smith’s termination of employment.

[68] The allegation made about the Yarraville property, which apparently came to Mr O’Brien’s attention on the morning of 2 March 2017, is essentially that Mr Carlin-Smith undertook work in association with the Yarraville property but either did not charge a fee for the work or that he kept the fee from Mr O’Brien’s company. It is unclear which of these alternatives Mr O’Brien alleges. Mr O’Brien’s evidence in this regard is weak and unspecific about how he formed the view that a fee should have been charged by Mr Carlin-Smith, merely saying he discovered the matter when he was going through the files on the morning of 2 March 2017.

[69] Mr Carlin-Smith argues that the property was a commercial complex and that no fee was due since not only had the company’s authority to sell the property expired, but also that the company never held any authority to lease the property being the service Mr O’Brien alleges should have borne a fee.

[70] However, Mr O’Brien has not shown there was misconduct or poor performance of some description on the part of Mr Carlin-Smith. Given that Mr Carlin-Smith was dismissed for misconduct the test in this part of the case is whether or not I can make a finding that the alleged misconduct actually occurred. The state of the evidence on this matter does not allow me to make such a finding. There has not been a particularisation of the problem within the file, or relevant material from the file brought forward to the Commission in order to demonstrate what is alleged against Mr Carlin-Smith either in the way of misconduct or in irregular or poor performance. All there is to go on is Mr O’Brien’s word that there was a problem within the files. I am therefore unable to find that this allegation was a valid reason for Mr Carlin-Smith’s termination of employment.

[71] The allegation that Mr O’Brien had learned Mr Carlin-Smith had received a cash payment or secret commission from a supplier rests upon Mr O’Brien’s evidence that a particular conveyancer came to his office on the morning of 2 March 2017 and handed him an envelope which contained cash. While Mr O’Brien named the conveyancer concerned and the business they worked for he has done nothing else in this regard. He has not brought forward any evidence capable of acceptance, other than his oral evidence, that would allow a finding that the events he relates actually occurred, or that a finding should be made by the Commission that the alleged payments were due to Mr Carlin-Smith, or that Mr Carlin-Smith had committed misconduct. Plainly an allegation that a Real Estate Agent is in receipt of a cash payment or secret commission contrary to his employment obligations is an extremely serious one which, if proven to the requisite standard of proof could lead to an employee’s dismissal. The difficulty I have with this matter though is that there is insufficient evidence that would allow a finding in favour of Mr O’Brien on this matter. As a result, no finding can be made that this allegation was a valid reason for Mr Carlin-Smith’s termination of employment.

[72] As expressed above, Mr Carlin-Smith’s lack of response to Mr O’Brien’s voice mails and text messages on 2 March 2017 does not amount to insubordination as claimed, and it does not give a valid reason for his termination of employment. In some circumstances, the failure to respond to one’s employer would reasonably lead to disciplinary action, and in a very few of those circumstances, such as where the risks and consequences of non-response may be high, it may lead to dismissal. However, in Mr Carlin-Smith’s situation there was no pressing necessity to be dealt with. While Mr O’Brien may have wanted an immediate response, his failure to be given one is not a valid reason for dismissal.

[73] As a result of the foregoing analysis, I am unable to find that at the time of Mr Carlin-Smith’s termination of employment that Neirbo held a valid reason for his dismissal related to his capacity or conduct.

(b) whether the person was notified of that reason

[74] The evidence supports a finding that Mr Carlin-Smith was notified of the reasons for his dismissal.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[75] For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for dismissal there needs to be a finding that there is a valid reason for dismissal. 23 I have not found there was a valid reason for Mr Carlin-Smith’s dismissal.

(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

[76] The evidence is that there were no discussions with Mr Carlin-Smith about his 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

[77] To the extent that Mr Carlin-Smith’s dismissal stemmed from unsatisfactory performance on his part, instead of misconduct, he was not warned about the consequences of that performance.

(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

[78] Neirbo is a small business employer within the meaning of the Act. Mr O’Brien appears to have followed no defined procedures in effecting Mr Carlin-Smith’s dismissal and instead appears to have made the decision almost entirely upon his emotions and state of mind in and around the time of the text and voicemail exchanges between the two from 1:00 PM on 2 March 2017. I am satisfied that, to an extent at least, the size of Neirbo would likely have impacted upon the procedures Mr O’Brien followed in effecting Mr Carlin-Smith’s 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;

[79] There is no evidence before the Commission that Neirbo had any dedicated human resource management specialists or expertise in its enterprise. While Mr O’Brien was in communication with his solicitor in and around the date of Mr Carlin-Smith’s dismissal, there is no evidence that any advice stemmed from that person about Mr Carlin-Smith’s dismissal.

(h) any other matters that the FWC considers relevant

[80] I do not find any other matters that are relevant and which require being taken into account.

[81] As has been set out above, I do not consider that at the time Neirbo dismissed Mr Carlin-Smith it had a valid reason for doing so. No consideration of the other criteria within s.387 leads away from a finding that there should not be consequential finding that Mr Carlin-Smith was unfairly dismissed and I find that his dismissal was harsh, unjust and unreasonable.

REMEDY

[82] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are as follows;

“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.

(2) 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.”

“391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person

by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(b) appoint the person to the position in which the person was employed immediately before the dismissal; or

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection

(1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”

“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

(3) 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

(b) 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 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

(e) 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

(4) 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.

(5) 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.”

[83] Pursuant to subsection 390(3) an order for the payment of compensation to a person must not be made unless the Fair Work Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”

[84] Mr Carlin-Smith does not seek reinstatement, and I consider in all the circumstances that it would be inappropriate to make such an order and that instead I should give consideration to an order for the payment of compensation.

(a) the effect of the order on the viability of the employer’s enterprise

[85] There is no cogent evidence before the Commission about the effect of any order of compensation on the viability of Neirbo’s enterprise. Mr O’Brien was given an opportunity at the determinative conference to provide information at a later time about the effect of any order for compensation on his enterprise, however chose not to do so. In any event the order contemplated by the Commission in this decision is not large and is unlikely in and of itself to call into question the viability of Neirbo’s enterprise.

(b) the length of the person’s service with the employer

[86] Mr Carlin-Smith’s employment with Neirbo was only from 2 November 2015 lasting one day short of 16 months.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[87] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”. The Full Bench of the Australian Industrial Relations Commission has observed the following in relation to these matters;

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

“. . . we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.”

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the “anticipated period of employment”. This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the “anticipated period of employment” are deducted. An example may assist to illustrate the approach to be taken.” 24 (endnotes omitted)

[88] Two different issues are relevant to consideration of an assessment of the anticipated period of employment.

[89] With Mr Carlin-Smith being dismissed for reason of misconduct, while the Commission has found that there was not a valid reason for dismissal on that basis, nonetheless Mr O’Brien could have elected to put the allegations to Mr Carlin-Smith and to seek a proper response about them and then make a decision based upon the totality of the material as to whether a dismissal for misconduct was warranted. That process may have taken between 2 to 3 weeks to investigate and complete.

[90] Also relevant is that immediately prior to the actual dismissal of Mr Carlin-Smith for misconduct, Mr O’Brien had told him that his job was to be made redundant effective from Tuesday, 8 March 2017 and that he had two alternatives to consider. Mr Carlin-Smith had initially responded to that conversation by advising that he would provide his response by 7 March 2017. At that time should he have refused to elect to move to one of the two positions offered to him it was likely that he would have been made redundant from Neirbo and that at such time he would have been entitled to a period of notice but no redundancy pay for the reason that Neirbo is a small business employer (see s.121(1)(b)). The notice of termination of employment to which Mr Carlin-Smith would have been entitled in such eventuality would have been three weeks given that he had been employed by Neirbo for more than one year but not more than three years and that he was 47 years old at the time of the hearing.

[91] In all, I do not consider the relationship between the two after 2 March 2017 would have continued for very long, whether or not matters of misconduct were properly raised and investigated or the redundancy put into effect. The length of time the relationship could be expected to have continued based upon all of the evidence and the nature of the relationship between the two, even as existed on 2 March 2017, would be perhaps no more than four weeks from that date.

[92] Based on all of these factors, I set the anticipated period of employment at two weeks.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

(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

(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

[93] Since leaving Neirbo’s employment Mr Carlin-Smith has continued to work as a Real Estate Agent, however as a self-employed person. He was granted the relevant business agent license in mid-May 2017, having initially applied for it during March. He made no job applications during that period, but since being granted a business agent license has commenced his business activities earning $7,800 in July. He estimated that at the time of the hearing that he would earn approximately $10,000 in August and the same in September 2017. I have taken these forward anticipated earnings into account in assessing the amount of compensation to be ordered set out below.

(g) any other matter that the FWC considers relevant.

[94] I am not aware of any other considerations which might be relevant to the order of compensation, and have considered all of the circumstances of the case in determining an appropriate remedy.

[95] Section 392(3) of the Act requires that if the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the FWC must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.

[96] Although Neirbo characterised Mr Carlin-Smith’s behaviour as misconduct, I am not satisfied in all circumstances that it was on the basis of the evidence before me, albeit that there may have been a case for him to answer to Mr O’Brien’s suspicions. Accordingly, because I have not found there was misconduct, I do not discount the amount of compensation for that factor.

CONCLUSION AND ORDERS

[97] After consideration of the foregoing issues, I find that the Applicant was dismissed and that it was unfair within the meaning of the Act.

[98] I find that reinstatement is not an appropriate remedy in this case.

[99] I find that compensation is appropriate.

[100] The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5). 25

[101] The reasoning associated with an adjustment for contingencies includes the view that some allowance should be made for the contingency that an Applicant may not have served the whole of the remaining period as an employee of the Respondent, for reasons such as ill health, lawful termination by the Respondent, voluntary resignation, or closure of the Respondent’s business. 26 There is no fixed discount that should be applied, with any such deduction being particular to the Applicant circumstances.27 It may not be appropriate to make a deduction for contingencies when all of the anticipated period of employment has passed.28

[102] Deputy President Gooley’s jurisdictional decision on the matter of the high income threshold objection found that Mr Carlin-Smith’s gross weekly earnings were $2,654 per week. 29 In the absence of any contrary evidence about Mr Carlin-Smith’s earnings I will adopt the finding made by Deputy President Gooley as the basis for the order for compensation.

[103] My order for compensation will be 2 weeks at the rate of $2,654, with a further amount of 9.5% for the purposes of superannuation, which is a total of $5,812. There will be no deduction for misconduct, since no finding of misconduct has been made; and there will be no deduction for contingencies since the whole of the anticipated period of employment has passed. In addition, I will not make any deduction for post employment earnings for the reason that the first of those earnings began in July 2017, more than 4 months after being dismissed by Neirbo. I will take account of the impact of taxation by requiring that the amount to be paid to Mr Carlin-Smith will be taxed according to law. My calculation of the amount payable is set out in the following table;

1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,	2 weeks projected lost income at the rate of $2,654 per week 30	$5,308
9.5% Employer superannuation contribution on above	+ $504
Deduction for misconduct 31	$0
2. Deduct monies earned since termination,	$0
3. Deductions for contingencies,	$0
TOTAL	$5,812
4. Calculate any impact of taxation,	To be taxed according to law.
5. Apply the legislative cap.

[104] The above amount does not exceed the compensation cap applying at the time of dismissal.

[105] An order requiring Neirbo Real Estate Pty Ltd to pay Mr Carlin-Smith the total amount of $5,812 taxed according to law, is issued in conjunction with this decision. The total will be ordered to be split between a payment directly to his, and a payment to his superannuation account, on his behalf.

[106] In accordance with this decision, $5,308, less taxation, is to be paid directly to Mr Carlin-Smith and $504 is to be paid to his superannuation account. The order will require the payments to be made within 14 days of the date of this decision.

COMMISSIONER

Appearances:

Mr Bradley Carlin-Smith on his own behalf

Mr Matthew O’Brien on behalf of the Respondent.

Hearing details:

2017.

Melbourne.

2 August

1 [2017] FWC 2778, [11].

2 Ibid.

3 Exhibit CS-2, Applicant’s Document Bundle, Attachment 1.

4 Employer Response Form, Form F3, Attachment 3.

5 Exhibit R5 Respondent’s Outline of Arguments.

6 Exhibit CS – 2, Applicant's document bundle, Attachment 3.

7 Ibid, Attachment 4.

8 Ibid, Attachment 3.

9 [2015] FWCFB 5264 [37].

10 Ibid [38]–[41], with reference to Pinawin[2012] FWAFB 1359, (2012) 219 IR 128.

11 Pinawin v Domingo[2012] FWAFB 1359, (2012) 219 IR 128, at [38].

12 2015 FWCFB 5264 [41].

13 Compare with Chen v Australian Catering Solutions Pty Ltd T/A Hearty Health[2017] FWC 3930, [61] – [62].

14 Titan Plant Hire Pty Ltd v Shaun Van Malsen[2016] FWCFB 5520.

15 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

16 Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561 at [6]-[7].

17 Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [32]; Annetta v Ansett Australia (2000) 98 IR 233 at [9]-[10].

18 Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [32]; He v Lewin [2004] FCAFC 161; (2004) 137 FCR 266 at [15].

19 Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [33]-[34]; O'Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205 at [22]-[23].

20 Edwards v Giudice (1999) 94 FCR 561 [6]‒[7]

21 Budd v Dampier Salt Ltd (2007) 166 IR 407, at [15]; with reference to Briginshaw v Briginshaw (1938) 60 CLR 336 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171

22 Streeter v TelstraCorp Ltd (2008) 170 IR 1

23 Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].

24 Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109, at [33] and [34].

25 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 32, and Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [33].

26 Slifka v J W Sanders Pty Ltd (1995) 67 IR 316

27 Ellawala v Australia Post Corporation[2000] AIRC 1151, Print S5109,

28 Bowden v Ottrey Homes (2013) 229 IR 6, [2013] FWCFB 431, [54].

29 [2017] FWC 2778, [10].

30 Exhibit A2, para 4

31 Haigh v Bradken Resources Pty Ltd [2014] FWCFB 236, at [12]

Printed by authority of the Commonwealth Government Printer

Bradley Scott Carlin-Smith v Neirbo Real Estate Pty Ltd T/A Homes Group Estate Agents

[2017] FWC 4785

18 SEPTEMBER 2017

DECISION

BACKGROUND

LEGISLATION

CONSIDERATION

CONSIDERATION

REMEDY

CONCLUSION AND ORDERS