Brent Stanzel v Koureli Pty Ltd - [2024] FWC 2467

[2024] FWC 2467

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Brent Stanzel
v

Koureli Pty Ltd

(U2023/12245)

DEPUTY PRESIDENT GRAYSON

SYDNEY, 10 SEPTEMBER 2024

Application for an unfair dismissal remedy

On 8 December 2023, Mr Brent Stanzel (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Koureli Pty Ltd (Respondent). The Applicant seeks an order for compensation by way of remedy.

When can the Commission order a remedy for unfair dismissal?

Section 390 of the Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

(b) the Applicant has been unfairly dismissed.

Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

Section 382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i)a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

When has a person been unfairly dismissed?

Section 385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied that:

(a) the person has been dismissed; and

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

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

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

Background

The factual background to the matter can be summarised as follows.

The Applicant commenced employment with the Respondent on 1 March 2023 as a Head Trainer and Food Production Support on a full-time basis pursuant to a contract of employment.

The Applicant’s letter of offer is signed by Mr Chris Perdikaris. Mr Perdikaris’ signature does not provide his position of authority on behalf of the Respondent.

For the duration of his employment, the Applicant reported to Ms Teah Perdikaris. Ms Perdikaris is the Director of the Australian Institute of Hospitality and Trade (AIHT), which is an entity providing training services within which the Applicant performed his day-to-day training duties.

On 8 November 2023, Ms Perdikaris sent the Applicant an email raising concerns regarding the Applicant cutting his workdays short, having several unopened emails and travelling during business hours that day for personal reasons.

On 13 November 2023, the Applicant provided his resignation letter to the Respondent with a 6-week notice period in accordance with his contract of employment. In his resignation letter the Applicant requested to work from home one day per week during his notice period. This request was not responded to by the Respondent.

Employees of the Respondent including the Applicant occasionally worked from home on an ad hoc basis.

On 16 November 2023, a meeting was held between the Applicant, Ms Perdikaris and Ms Carmelle Watkins (Marketing Manager/Student Support and Administration) regarding the work to be performed during the Applicant’s notice period.

Tensions were apparent in the meeting with the Applicant expressing his frustration with Ms Watkins. Accounts differ as to exactly what was said by Ms Watkins to the Applicant in this meeting. The Applicant recalled that Ms Watkins called him ‘ridiculous’ and said words to the effect that he was ‘behaving like a 10-year old’ and ‘should grow up’. Ms Watkins admits to saying words to the effect that he would hand over his work ‘when he was 10’.

The Applicant left the meeting and packed up some of his belongings including his work laptop. Whilst some of the conversation at this point is disputed, it is not disputed that prior to leaving the office, the Applicant said to Ms Perdikaris words to the effect that ‘[she was his] boss, not Carmelle [Ms Watkins]. [The Applicant would] only take directions from [Ms Perdikaris]’. He then called Ms Perdikaris from a park across the road. The Applicant asked to meet with Ms Perdikaris that day to discuss what had transpired in the meeting.

Ms Perdikaris was unwilling to meet the Applicant that day but agreed to discuss the situation the following day, Friday 17 November 2023, at 10:00 AM over the phone. Mr Stanzel gave evidence, which I accept, that he reiterated that he would work from home until he met with Ms Perdikaris to discuss what had occurred at the meeting. He also gave evidence that Ms Perdikaris did not ask him to return to work in the office that day nor did she say to him that he could not work from home.

On 16 November 2023, Ms Watkins sent an email apologising to the Applicant for upsetting him and advising of her recollection of the meeting. She signed off her email stating that she was looking forward to seeing him Friday or Monday and noting that she was hopeful that they could continue to remain professional while at work together.

At 9:54 AM on 17 November 2023, Ms Perdikaris advised the Applicant via text message that she was no longer able to meet at 10:00 AM and that she would advise him when she would be available to talk.

At 8:41 AM on 20 November 2023, the Applicant informed Ms Perdikaris via email that he was continuing to work from home that day. The Applicant’s email indicated that following her text message to the Applicant on the morning of 17 November 2023 cancelling their meeting, the Applicant had not received any indication as to when Ms Perdikaris would be available to meet with the Applicant. He confirmed that he would continue to work through the tasks that Ms Perdikaris had allocated to him on 16 November 2023, and that he was by his computer with his phone at hand should Ms Perdikaris be available to have a discussion with him.

At or around midday on 20 November 2023, the Applicant identified that his access to the Respondent’s database had been blocked. Upon contacting Ms Perdikaris to enquire about this he was directed to an email that had been sent to his personal email address shortly after midday.

In summary, the email from the Respondent stated that the Applicant was not authorised to work from home, had walked out of the meeting on 16 November 2023 without permission and had not returned to the office since, and in doing so had abandoned his employment and relinquished his position. It instructed him to return all company property by close of business on the same day.

The Applicant queried via return email when he would receive his outstanding pay and notice pay. The Respondent’s reply email (which did not respond to this query) directed the Applicant to upload all completed work to a USB drive and return it, along with the balance of company property in the Applicant’s possession, by 5:00 PM that day. This email indicated that if the Applicant did not return the property as directed by this time, the Respondent would contact the police.

On or around 21 November 2023, the Respondent contacted the police and made a complaint about the unreturned property, being an access key and the Applicant’s work laptop. The property was posted to the Respondent on 21 November 2023.

Following the dismissal, the Applicant worked casually as a chef in December 2024, earning $4,293.27. He commenced ongoing employment on 3 June 2024 on a salary of $85,000 per annum.

The hearing

There being contested facts involved, the Commission is obliged by s.397 of the Act to conduct a conference or hold a hearing.

After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter (per s.399 of the Act).

The Applicant and his representatives attended the hearing listed on 18 June 2024. At the commencement of the hearing there was no appearance for the Respondent. The Commission stood the matter down for approximately half an hour and repeatedly sought to contact the Respondent and its representative via email to various addresses on record, via text message and by phone.

Ultimately, the Respondent and the Respondent’s representative, Mr Chris Perdikaris, did not attend the hearing, nor was the Commission notified that the Respondent and its representative would not be attending the hearing. The Respondent did not make its witness, Ms Perdikaris, available for cross examination despite previous written confirmation from the Applicant’s representative that she was required for cross-examination. Having satisfied myself that the Respondent and its representative had been repeatedly notified of the hearing date and time via email and posted notices to its postal addresses on file, I determined to proceed to hear the application in the Respondent’s absence.

Permission to appear

The Applicant sought to be represented before the Commission by a lawyer.

Relevantly, section 596(1) of the Act provides that a party may be represented in a matter before the Commission by a lawyer or paid agent only with the permission of the Commission.

Section 596(2) provides that the Commission may grant permission for a person to be represented by a lawyer or paid agent in a matter before the Commission only if:

(a) it would enable the matter to be deal with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

The decision to grant permission is not merely a procedural step but one which requires consideration in accordance with s.596 of the Act.[1] The decision to grant permission is a two-step process. First it must be determined if one of the requirements in s.596(2) have been met. Secondly, if the requirement has been met, it is a discretionary decision as to whether permission is granted.[2]

On the question of representation, the Applicant submitted that:

The jurisdictional objection raised by the employer that it was a small business employer raised complexity given the requisite consideration of ‘related bodies corporate’ in this matter;
There was significant factual contest and the consideration of whether the Applicant had abandoned his employment presented a contentious and complex issue for the Commission’s consideration; and

The Applicant would not be able to effectively present his case and has no experience in contested legal matters.

The Respondent did not elect to make any submissions opposing the Applicant’s application to be granted permission to be represented.

Having considered the submissions, I formed a view that this matter does have significant factual and legal complexity for the reasons advanced by the Applicant. I have determined that allowing the Applicant to be represented by a lawyer would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter and have decided to exercise my discretion to grant permission for the Applicant to be represented.

Accordingly, at the hearing on 18 June 2024 the Applicant was represented by Mr Arvanitis and Mr Kaine.

Evidence

The Applicant gave evidence on his own behalf. The following statements were tendered into evidence:

(a)Witness statement of the Applicant dated 1 March 2024 (with seventeen annexures);

(b)Witness statement of the Applicant in reply dated 29 April 2024 (with nine annexures); and

(c)Further witness statement of the Applicant dated 5 June 2024 (with one annexure).

Despite confirmation from the Applicant that it required Ms Teah Perdikaris to appear for cross-examination, no witnesses appeared at the hearing nor gave oral evidence on behalf of the Respondent. I determined to accept the following materials into evidence:

(a)The Respondent’s bundle of documents;
(b)Witness statement of Ms Teah Perdikaris dated 7 March 2024;
(c)Witness statement of Ms Carmelle Watkins dated 17 February 2024; and
(d)A letter from Mr Constantine Savell of Westwood Accountants and Advisory dated 16 April 2024.

In circumstances where the Applicant was not afforded the opportunity to cross-examine Ms Perdikaris, despite its request that she be made available for cross-examination, I place reduced weight on her evidence.

Submissions

The Applicant filed submissions, a list of documents and an outline of argument in the Commission on 1 March 2024. On 22 March 2024, the Respondent filed an Outline of Merits - Arguments and a document titled Timeline of Events which I consider to be submissions. By way of these documents, as well as a Form F3 – Employer Response filed on the same day, the Respondent raised a number of matters relevant to the jurisdiction of the Commission to deal with the application. These documents identified that the Respondent employed ten employees, and that the Applicant was not dismissed but had resigned his employment before abandoning his position on 15 November 2023 during his notice period. These documents did not indicate that the Respondent sought to rely on matters relating to small business by way of raising jurisdictional objections relating to either the Small Business Fair Dismissal Code (SBFDC) or the relevant minimum employment period applying to small businesses.

Following a directions hearing and the issuance of further directions the Respondent had the opportunity to file evidence and submissions by 17 April 2024 regarding:

(a)Whether the Respondent was a small business employer;

(b)The applicable minimum employment period;

(c)Whether the applicable minimum employment period had been met; and,

(d)Whether the SBFDC applied to the termination.

The Respondent filed a letter from its accountant, Mr Constantine Savell, on 16 April 2024 in accordance with these directions and did not file any further evidence or submissions. Final written submissions were filed by the Applicant in accordance with the directions on 29 April 2024.

On 31 May 2024, I issued further directions regarding the filing of evidence and submissions on remedy. On 5 June 2024 the Applicant filed a further statement of the Applicant and further submissions on remedy. The Respondent did not file any further evidence or submissions in accordance with the directions.

Consideration

Having regard to the above, it is necessary for me to first consider whether the Applicant was dismissed at the initiative of the Respondent. If I find that the Applicant was not dismissed, the application fails for want of jurisdiction and consideration of any further jurisdictional matters is not required. In reaching my conclusions below, I have had regard to all of the evidence filed and the submissions of the parties.

Has the Applicant been dismissed?

Section 386(1) of the Act provides that the Applicant has been dismissed if:

(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or

(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.

Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.

The Applicant does not contend that he was forced to resign but that, following his giving notice, he was dismissed by the email sent by Ms Perdikaris on 20 November 2023. The Respondent contends that the Applicant was not dismissed but abandoned his employment on or around 16 November 2023.

Abandonment of employment is an example of renunciation. It occurs where an employee ‘ceases to attend his or her place of employment without proper excuse or explanation and thereby evidences an unwillingness or inability to substantially perform his or her obligations under the employment contract.’[3]

The Respondent’s case is that the Applicant abandoned his employment by leaving the office on 16 November 2023 and/or by failing to attend the physical workplace over the following days. I accept the evidence of the Applicant that he left the office on 16 November in distress, saying that he would work from home. Ms Perdikaris recalls that the Applicant said words to the effect of ‘you are my boss, not Carmelle. I won’t work in these conditions.’. Ms Watkins’ evidence recalls that the Applicant said words to the effect of ‘I take orders from you [referring to Ms Perdikaris] not her [referring to Ms Watkins]’. An email from Ms Watkins sent to Ms Perdikaris shortly after the meeting recounts that the Applicant said words to the effect of ‘I’m going home, I can’t do this’ or ‘I can’t handle this’ while in the meeting of 16 November. Ms Watkins’ email also details that then, as he was leaving the meeting, the Applicant said (when referring to his workload) ‘I’ll do that later’.

The Applicant’s evidence, which I accept, was that when leaving the office on 16 November 2023, he took his laptop with him and said that he would work from home. There is no evidence before me suggesting that Ms Perdikaris objected to the Applicant leaving the office or working from home or taking his work laptop with him nor that she requested or directed the Applicant to stay at the office to finish the day’s work.

Approximately ten minutes after leaving the office, the Applicant contacted Ms Perdikaris and asked for an urgent meeting to discuss his concerns. Ms Perdikaris declined, stating that she could not meet as she had other meetings to attend to. In her statement, Ms Perdikaris said that she declined this meeting as she was anxious and scared as a result of the Applicant’s angry and aggressive behaviour. As per [39] above, I have placed reduced weight on the evidence of Ms Perdikaris given that the Applicant was not able to cross-examine her. It is not disputed that Ms Perdikaris and the Applicant agreed to meet the next day over the phone. I infer from the agreement to have a phone discussion that Ms Perdikaris was not expecting the Applicant to attend the office to work the next day. I accept the Applicant’s recollection of the conversation held on 16 November 2023 over that of Ms Perdikaris and his uncontested evidence that he was not asked to return to the office on 16 November 2023, nor told that he could not work from home. I consider that the evidence of Ms Watkins is broadly consistent with that of the Applicant in that he committed to performing tasks later. It is readily apparent that he was upset, and I accept that he may have said words to the effect of ‘I’m going, I can’t do this’. However, I do not consider given the entirety of the evidence before me regarding the events of 16 November that any statement to this effect was advice from the Applicant that he was not willing to continue to work for the Respondent. Rather, I consider this to be an expression of frustration by the Applicant in response to what had occurred at the meeting of 16 November 2023. I find that the Applicant did not at any point say that he was not willing to continue to work for the Respondent.

In her statement, Ms Perdikaris says that it was clear to her and Ms Watkins that the Applicant had abandoned his employment when he left the premises on 16 November 2023. However, it is apparent from the contemporaneous email Ms Watkins sent to the Applicant on 16 November 2023, which referred to their ongoing working relationship and that she anticipated seeing the Applicant on Friday or Monday, that the Applicant’s conduct had not demonstrated to her that the Applicant did not intend to keep working for the Respondent. I note that this is also consistent with her email of 16 November to Ms Perdikaris where Ms Watkins recalls that at the end of the meeting, the Applicant said that he would perform certain tasks later.

Despite the Applicant’s advice on 16 November 2023 that he would work from home until a meeting was held, Ms Perdikaris did not ask for the Applicant to attend the office to work on 17 November 2023 or to attend the 17 November meeting with her in person. Ms Perdikaris cancelled this meeting shortly before it was due to start, saying that she would advise when they could ‘talk’. The Respondent did not ask the Applicant why he had not attended the office on 17 November 2023. I accept the Applicant’s evidence that he continued to perform work for the Respondent on 17 November 2023 and 20 November 2023.

The Applicant then contacted Ms Perdikaris again early on Monday 20 November 2023 advising her that he continued to work from home and asking when a meeting could be convened. The Applicant’s continued performance of work and repeated contact with Ms Perdikaris asking for a meeting does not suggest or indicate an abandonment of employment, nor does his departure from the office after his altercation with Ms Watkins.

In these circumstances, having considered the totality of the evidence before me, I do not consider that the Applicant ceased to attend his place of employment ‘without proper excuse or explanation evidencing an unwillingness or inability to substantially perform’ his obligations under the employment contract, such as would be required to establish abandonment of employment. The Applicant advised his manager that he intended to work from home until they had had a meeting regarding his concerns. Ms Perdikaris did not object to the Applicant working from home, nor request or direct him to attend the workplace or call him to ascertain his whereabouts. The Applicant was contactable via email and phone during the period he was absent from the office. He persisted in requesting a meeting and continued to perform his work.

I find that the Applicant did not abandon his employment. I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent by Ms Perdikaris sending the email to the Applicant on 20 November 2023.

I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the Act, and the Respondent’s jurisdictional objection is dismissed on that basis.

Initial matters

Under section 396 of the Act, the Commission is obliged to decide the following matters 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;
(c)    whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d)    whether the dismissal was a case of genuine redundancy.

Was the application made within the period required?

Section 394(2) of the Act requires an application to be made within 21 days after the dismissal took effect.

I have found that the Applicant was dismissed from his employment on 20 November 2023. He made his unfair dismissal application on 8 December 2023. I am therefore satisfied that the application was made within the period required in subsection 394(2).

Was the Applicant protected from unfair dismissal at the time of dismissal?

I have set out above at [4] when a person is protected from unfair dismissal.

Minimum employment period

Pursuant to s.383 of the Act, a dismissed employee is precluded from seeking relief from unfair dismissal where they are employed by a small business and have been employed for less than 12 months. The Applicant had been employed for approximately eight months at the time of his dismissal.

In the Respondent’s filed Form F3 – Employer Response, it contends that it has only ten employees. As a result, it is necessary to consider whether the Respondent is a small business and whether the Applicant has met the relevant minimum employment period pursuant to s.396 of the Act.

Section 23 of the Act defines a small business employer as follows:

23     Meaning of small business employer
(1)A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2)For the purpose of calculating the number of employees employed by the employer at a particular time:
(a)    subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b)    a casual employee is not to be counted unless, at that time, the employee is a regular casual employee of the employer.
(3)For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
(4)To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):
(a)    the employee who is being dismissed or whose employment is being terminated; and
(b)    any other employee of the employer who is also being dismissed or whose employment is also being terminated.

Section 12 of the Act provides that ‘associated entity’ has the meaning given by s.50AAA of the Corporations Act 2001 (Cth) (Corporations Act).Section 50AAA has 8 subsections providing the circumstances in which an entity is ‘associated’ with another for the purposes of the Corporations Act. Relevantly:

50AAA Meaning of associated entity
(1)One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

…

(3) This subsection is satisfied if the principal controls the associate.
(4) This subsection is satisfied if:
(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

Section 50AA of the Corporations Act defines the meaning of control for the purposes of the Act as follows:

50AA Meaning of control
(1)For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(2)In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

On 5 April 2024 I issued directions that referred to these matters and extracted sections 23, 382, 383, 385, 391 and 392 of the Act, as well as s.50AAA of the Corporations Act. The directions required the Respondent to file evidence and submissions addressing the following issues:

(a)Whether the Respondent is a small business employer;
(b)Whether the applicable minimum employment period for consideration is 6 months or 12 months;

(c)Whether the Applicant had completed the applicable minimum employment period;
(d)Whether the SBFDC applied to the Applicant’s termination; and,

(e)Whether the Applicant had been dismissed within the meaning of the Act.

In support of its contention that it had only ten employees as at the time of the dismissal, the Respondent filed a letter from its accountant, Mr Savell of Westwood Accountants & Advisors dated 16 April 2023. The letter stated, inter alia, that:

(a)Koureli Pty Ltd (the Respondent) ‘have (sic) not employed more than 15 staff at any one time’; and
(b)‘At the current time only 12 mixed full time/casual staff are employed by the company’.

The Respondent did not lead any evidence from any witnesses in relation to how many employees it had at the time of the dismissal, nor in relation to whether it had any associated entities and how many employees such entities had at the time of the dismissal. The Respondent did not file or make any submission in relation to these matters.

The Applicant filed evidence regarding the corporate structure and directorships of five entities as follows:

(a)Mr Napoleon Giannoudis, who the Applicant believes to be a member of Mr Perdikaris’ family, is the sole director and sole secretary of the Respondent, as well as the entity ‘Dowse Group Consolidated Pty Ltd’ (Dowse);
(b)Ms Cindy Michelle Perdikaris (née Dowse) is married to Mr Perdikaris;
(c)Mr Perdikaris is the sole director and sole secretary of both ‘Corporate Commercial Facilitators Pty Ltd’ and ‘Corporate Commercial Facilities Pty Ltd’, (collectively, CCF);
(d)The sole director and sole secretary of AIHT, Ms Teah Perdikaris, is Mr Perdikaris’ daughter;
(e)The registered trading address for all five corporate entities (hereafter, the Entities) is 61 Kingsway, Kingsgrove NSW 2208.

The Applicant’s uncontested evidence was that he understood there to be a close relationship between the Respondent and CCF, with Ms Cindy Perdikaris paying employees of both the Respondent and CCF in cash at CCF’s office located at 73 Whiting Street, Artarmon. The Applicant’s evidence was that he was not provided with any accompanying payslips. The Applicant’s statement also listed 22 individuals by name and indicated that as at the time of his dismissal, he understood them to be employees of either AIHT or CCF. The Applicant’s evidence also annexed emails from Ms Ellena Valos, Mr Perdikaris’ executive assistant, addressed to multiple recipients associated with the Respondent, AIHT, or CCF, including one advising employees of the procedure to be followed by employees when responding to inbound emails and ensuring messages were recorded on company mobiles. The Applicant referred to Ms Teah Perdikaris directing him to return company property to the Artarmon office, which he understood to be the head office of both CCF and Dowse Group. The Applicant’s evidence annexed a print-out of CCF’s website which contained references to both AIHT and Dowse on its ‘Our Partners’ page, and a print-out of Dowse’s website which contained the same contact number as the number that appears on CCF’s website.

The Applicant made submissions that the Respondent was not a small business employer. The Applicant contended that the Respondent employed more than 15 employees at the time of the Applicant’s dismissal by virtue of the relationships of association between the Entities per s.23 of the Act, as contemplated by s.50AAA(3) and/or (4) of the Corporations Act, and by reference to the definition of control pursuant to s.50AA of the Corporations Act. The Applicant relied on Scott v Flinders Island Meat Pty Ltd[2018] FWC 1469 at [25]:

Subsection (3) is satisfied if Flinders Island Meat (the principal) controls Midgeon Holdings (the associate). Section 50AA of the Corporations Act defines what is meant by the word “control” and requires that the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operational policies. In determining the capacity to determine outcomes, this includes the practical influence the first entity can exert and any practice or pattern of behaviour.

The Applicant identified the reference in the Applicant’s letter of offer to the Respondent’s ‘associated companies’, and relied on the proximity and interrelated nature of the business relationships between the Entities as demonstrated by:

(a)The familial ties between their sole directors and sole secretaries;
(b)Their common registered addresses and public contact information;

(c)The issuance of simultaneous correspondence to employees concerning business operations; and

(d)The public representations made by the Entities as to their relationships to one another.

The Applicant operated under an AIHT email address during his employment and was subject to the direction and management of Ms Perdikaris at all times, who also operated under an AIHT email address. The Applicant’s submissions acknowledged that although the true corporate relationship between the Entities was unclear, a degree of control or capacity held by the Respondent to determine the financial and operating policies of AIHT was evinced by the fact of the Respondent’s entry into a contract of employment with the Applicant, under which the Applicant performed tasks for and on behalf of AIHT.

The Respondent has the evidentiary burden in relation to this issue and has not discharged that onus. At best, it has led evidence from its accountant, Mr Savell, that it has not employed more than 15 employees at any one time. The correspondence from Mr Savell does not state how many employees the Respondent had at the time of the dismissal, nor does it preclude the Respondent from having employed fifteen employees at that time. It states that the Respondent has not employed more than fifteen staff. This self-evidently does not establish that the employer has not employed fifteen staff at any one time and does not evidence that it did not have fifteen employees at the time of the dismissal. No evidence was led from Mr Savell or Ms Perdikaris or any other witness regarding the number of employees that the Respondent had at the relevant time, nor regarding whether the Entities were in fact associated entities. No evidence was filed regarding the number of employees that these entities had.

The Applicant’s witness statement filed on 1 March 2024 alleged that the Respondent was part of a complex corporate structure that included both Corporate Commercial Facilities and AIHT. The Respondent was accordingly on notice from at least this time, and certainly as at the time of my holding a directions hearing and issuing specific directions on the point, as to the need to file evidence addressing the question of whether the Respondent was a small business employer (and, as relevant to that question, whether it had ‘associated entities’ for the purposes of s.50AAA of the Corporations Act).

When considering whether the definition of small business employer at s.23 of the Act applies, the question is whether the Respondent employed ‘fewer than 15 employees’ at the time of the Applicant’s dismissal on 20 November 2023. On the basis of the evidence before me, I am unable to determine the number of staff members at the time of the dismissal. However, on the balance of probabilities and having considered the totality of the evidence, I am unable to be satisfied that the Respondent employed fewer than 15 staff members at the time of the Applicant’s dismissal.

Having considered that the Respondent failed to discharge the burden to establish that it was a small business employer, I conclude that the Respondent was not a small business employer within the meaning of s.23 of the Act at the time of the Applicant’s dismissal.

The fact of the employment relationship between the Applicant and the Respondent was not contested between the parties, nor was the date of the commencement of the Applicant’s employment, being 1 March 2023. Having found that the Applicant was dismissed on 20 November 2023, I find that the period of the Applicant’s employment was in excess of 6 months, being the minimum employment period in circumstances where the Respondent is not a small business employer.

I am therefore satisfied that, at the time of his dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.

Applicant’s annual rate of earnings

Pursuant to s.382 of the Act, a person is not protected from unfair dismissal if their earnings exceed the high income threshold as prescribed by the Fair Work Regulations 2009.

It was not in dispute and I find that, at the time of dismissal, the Applicant’s annual rate of earnings was $137,500. There was no evidence before me that he was entitled to any other amount in accordance with regulation 3.05 of the Fair Work Regulations 2009. Accordingly the Applicant’s annual rate of earnings was less than the high income threshold, which, for a dismissal taking effect on or after 1 July 2023, is $167,500.

I am therefore satisfied that, at the time of dismissal, the Applicant’s annual rate of earnings did not exceed the high income threshold.

Accordingly, I am satisfied for the reasons set out at [61] to [83], that the Applicant was a person protected from unfair dismissal for the purposes of s.396(b) of the Act.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

Section 388 of the Act provides that 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.

I have found at [78] above that the Respondent was not a small business employer, and I am therefore satisfied that the Small Business Fair Dismissal Code does not apply.

Was the dismissal a case of genuine redundancy?

Under s.389 of the Act, a person’s dismissal was a case of genuine redundancy if:

(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

It was not in dispute the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise, and I find accordingly.

I am therefore satisfied that the dismissal was not a case of genuine redundancy.

Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.

Was the dismissal harsh, unjust or unreasonable?

Section 387 of the Act provides that the Commission must take into account, in considering whether it is satisfied that 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); 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.

I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[4]

I set out my consideration of each below.

Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?

In order to be a valid reason, the reason for the dismissal should be ‘sound, defensible or well founded’[5] and should not be ‘capricious, fanciful, spiteful or prejudiced’.[6] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[7]

As is apparent from the background above, there was no valid reason for the Applicant’s dismissal. The Applicant left the workplace following a meeting with his manager and a colleague where he felt that he had been unreasonably treated. Whilst reasonable minds might differ on whether this reaction was justified, it either was, or should have been, apparent to his manager that he was upset. After leaving the office he called his manager and asked for an urgent meeting to discuss the matter. The Applicant’s evidence, which I accept, was that he communicated to Ms Perdikaris that if they didn’t discuss the matter, he would work from home effective immediately until such time as they did have the discussion. There is no evidence before me that Ms Perdikaris asked him to return to the office or said that he could not work from home until a meeting had been held, as per his request. A meeting was then arranged which was subsequently cancelled on short notice by Ms Perdikaris. No enquiries were made about the whereabouts of the Applicant, and he continued to make contact with his workplace, continued to work, continued to be contactable and continued to press for a meeting to resolve his concerns about the meeting of 16 November.

It was not contended by the Respondent that the Applicant’s dismissal was related to any conduct and that this justified his termination, only that he had abandoned his employment. I am satisfied that the Applicant had asked to work from home one day per week at the time of his resignation and that this had not been rejected, and that he had previously worked from home on an ad hoc basis. Further, I am satisfied that he was not directed or requested to attend the office over the period from 16 November 2023 to 20 November 2023 (a period which included a weekend where he was not normally rostered to work) and that he continued to perform work during this period. I do not consider that his conduct in not attending the workplace, in these circumstances, amounted to misconduct or that it provided a valid reason for his dismissal.

The Respondent’s material filed in the proceedings states that it had extended the Applicant’s probationary period in or around May 2023 and refers to some alleged performance issues, including his attendance during working hours, whether he was performing all duties to a satisfactory standard, having a negative demeanour, and his alleged conduct of locking the door whilst Ms Watkins was in the bathroom. However, there was no evidence that he was being formally performance managed in relation to these issues or that he had received any formal warning/s regarding them. Further, the Respondent’s submissions and witness statements maintained that the Applicant was not dismissed by the Respondent but, rather, abandoned his employment. It follows that the Respondent did not raise these matters to rely on them as a valid reason for the Applicant’s dismissal, in circumstances where the Respondent’s case was that he had not been dismissed. Having considered the alleged performance and conduct issues canvassed in the Respondent’s material, I consider that there was no reason that was ‘sound, defensible or well founded’[8] and, accordingly, no valid reason for the Applicant’s dismissal.

Was the Applicant notified of the valid reason?

Proper consideration of s.387(b) requires a finding to be made as to whether the Applicant ‘was notified of that reason’. Contextually, the reference to ‘that reason’ is the valid reason found to exist under s.387(a).[9]

As I am not satisfied that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.[10]

Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?

As I have not found that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.[11]

Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?

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.

The Applicant does not contend that he was unreasonably refused a support person and I consider that this is a neutral consideration.

Was the Applicant warned about unsatisfactory performance before the dismissal?

A mere exhortation for an employee to improve their performance would not be a sufficient warning. A warning must:

Identify the relevant aspect of the employee’s performance which is of concern to the employer; and

Make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.[12]

There was no evidence before me that any warning regarding unsatisfactory performance had been given to the Applicant. Further, as the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.

To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

The Respondent filed no evidence and made no submissions in relation to this consideration.

The Applicant submitted that the Respondent was not a large organisation and it was unknown how its size might impact on the procedures followed.

Neither party submitted that the size of the Respondent’s enterprise was likely to impact on the procedures followed in effecting the dismissal. Accordingly, this factor is not a relevant consideration.

To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

The Respondent filed no evidence and made no submissions in relation to this consideration.

The Applicant submitted that it was unknown whether the Respondent and its alleged associated entities employ or engage with any human resources specialists.

I cannot determine, on the evidence, whether there was an absence of dedicated human resources specialists or expertise in the Respondent’s enterprise. Neither party submitted that an absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise impacted on the procedures followed in effecting the dismissal. Accordingly, this factor is not a relevant consideration.

What other matters are relevant?

Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.

Submissions

The Applicant submitted that the following other matters are relevant to the Commission’s consideration of whether the dismissal was harsh, unjust or unreasonable:

(a)The Respondent took no steps to discuss the reasons for termination prior to determining that he had abandoned his employment. Accordingly, there was a total failure to provide procedural fairness to the Applicant; and,

(b)The Respondent inappropriately referred the Applicant to the NSW Police when he did not immediately return the Respondent’s property on the day of the dismissal.

It was submitted that these two matters, combined with the Respondent’s failure to provide the Applicant an opportunity to respond to its reasons for dismissal, contributed to the harshness and unreasonableness of the dismissal.

The Respondent did not make any submissions as to any matters relevant to the Commission’s consideration of whether the Applicant’s dismissal was harsh, unjust or unreasonable.

I do not consider in the circumstances of this matter, that the conduct of the Respondent referring the Applicant to the NSW Police contributed to the harshness of the dismissal. However, I consider that the Respondent did deny the Applicant procedural fairness in failing to discuss the reasons for dismissal and provide him an opportunity to reply to those reasons prior to effecting it. These matters are relevant to my consideration of whether the dismissal was harsh, unjust or unreasonable.

Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?

I have made findings in relation to each matter specified in section 387 as relevant.

I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[13]

Having considered each of the matters specified in section 387 of the Act, for the reasons given above, I am satisfied that there was no valid reason for the dismissal of the Applicant and that it was harsh, unjust and/or unreasonable.

Conclusion

I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the Act.

Remedy

Being satisfied that the Applicant:

(a) Made an application for an order granting a remedy under section 394;
(b) Was a person protected from unfair dismissal; and,
(c) Was unfairly dismissed within the meaning of section 385 of the Act,
I may, subject to the Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.

Under section 390(3) of the Act, I must not order the payment of compensation to the Applicant unless:

(a) I am satisfied that reinstatement of the Applicant is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.

Is reinstatement of the Applicant inappropriate?

The Applicant did not seek reinstatement and submitted that reinstatement is not appropriate because he had already provided a notice of resignation before his dismissal was effected.

The Respondent also submitted that reinstatement is inappropriate because the Applicant had resigned and then abandoned his employment.

In such circumstances, as per Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198 at [9]:

The Applicant’s disposition is a sure guide to the Commission as to whether or not it would be appropriate to reinstate or re-employ the Applicant. To act contrary to the Applicant’s desired position in this respect would be to give effect to an order that may not yield a productive or cooperative workplace.

Having regard to these matters, and in particular to the Applicant’s resignation, I consider that reinstatement is inappropriate. I will now consider whether an order for payment of compensation is appropriate in all the circumstances.

Is an order for payment of compensation appropriate in all the circumstances of the case?

Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, ‘[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…’[14]

Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[15]

Submissions

The Applicant originally sought payment for two weeks of pay that he had not received for work performed prior to his dismissal and for the payment of the remainder of his notice period, together with twelve weeks of compensation for ‘pain and suffering’. At hearing, the Applicant withdrew its claim for compensation for pain and suffering.

The Applicant submitted that payment of compensation is appropriate because the Applicant had suffered significant financial loss arising from the dismissal.

The Respondent submitted that payment of compensation is not appropriate because the Applicant had resigned, then abandoned his employment without warning and failed to complete the six-week notice period provided in his resignation letter. The Respondent also submitted that the Applicant’s abandonment of his employment had left the ‘organisation’, which the Respondent described as a start-up with negative cash flow, in a critical position.

In all the circumstances, I consider that an order for payment of compensation is appropriate.

Compensation – what must be taken into account in determining an amount?

Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:

(a)the effect of the order on the viability of the Respondent’s enterprise;
(b)the length of the Applicant’s service;
(c)the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d)the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e)the amount of any remuneration earned by the Applicant 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 Applicant during the period between the making of the order for compensation and the actual compensation; and
(g)any other matter that the Commission considers relevant.

I consider all the circumstances of the case below.

Effect of the order on the viability of the Respondent’s enterprise

The Applicant submitted that the viability of the Respondent’s enterprise was not known to the Applicant, noting the matter was more appropriately addressed by the Respondent. The Applicant submitted that the Respondent is a company within a group of associated companies and that an order of compensation should be made by the Commission irrespective of the financial impact of the order on the Respondent. The Applicant submitted that the Respondent was evidently prepared to pay the Applicant the balance of his notice period.

The Respondent’s submissions indicated that the Applicant’s abandonment of employment had left the ‘organisation’, which is a start-up organisation with negative cash flow, in a critically difficult position.

In considering the Respondent’s submission as to the effect that a compensation order would have on the viability of its enterprise, I note that Ms Perdikaris’ statement reads as follows:

AIHT is a start-up and emerging company, very much so on its infant legs, running with a noticeable negative cash flow. Brents [sic] abandonment, whilst it hindered smooth operations of AIHT, was somewhat of a relief….

Whilst I accept that AIHT is in its infancy and had a negative cash flow, this evidence does not demonstrate that any order for compensation would affect the viability of the Respondent’s enterprise and I am unable to be satisfied that an order for compensation would affect the viability of the Respondent’s enterprise.

Length of the Applicant’s service

The Applicant’s length of service was approximately eight months and 19 days.

The Applicant’s submissions were that it did not submit that the Applicant’s length of service with the Respondent was a relevant factor to the determination of the quantum of compensation to be ordered by the Commission.

The Respondent did not make any submissions in relation to the effect of the Applicant’s length of service on any amount of compensation ordered in this matter.

I consider that the Applicant’s length of service does not support reducing or increasing the amount of compensation ordered, and accordingly treat this factor as neutral for the purposes of assessing compensation.

Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed

As stated by a majority of the Full Court of the Federal Court in He v Lewin [2004] FCAFC 161 at [58]:

In determining the remuneration that the employee would have received, or would have been likely to receive, the Commission is required to give its attention to an actual state of facts … it is necessary for the Commission to address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.

The Applicant submitted that the Applicant’s employment would have been likely to continue until 22 December 2023 and the amount of remuneration that the Applicant would have received or would have been likely to receive during that period is five weeks’ pay, totalling $13,221.15. Accordingly, the Applicant submitted that the Commission should make an order of seven weeks’ pay by way of compensation, comprised of:

Five weeks’ pay in respect of the notice provided by the Applicant at the time of his resignation in accordance with his contract, which the Applicant was subsequently deprived of by virtue of his dismissal; and,

Two weeks’ pay, for work performed by the Applicant in respect of which he had not been paid.

The Applicant submitted that the dismissal had prevented him from attending the Respondent’s office to collect his pay. Accordingly, the Applicant submitted, the Commission is able to make an order in respect of the two weeks’ unpaid wages because they were ‘remuneration’ for the purposes of s.392(2)(c) that the Applicant would have received had he not been dismissed.

The Respondent did not make any submissions on the remuneration that the Applicant would have or was likely to have received had he not been dismissed.

Evidence

Given the evidence before me, I do not consider that the Applicant would have brought the employment relationship to an end any earlier than his resignation date as he had freely given his notice and continued to work up until his dismissal. I do not consider it likely that the Respondent would have dismissed the Applicant during the intervening period of notice.

While Ms Perdikaris’ and Ms Watkins’ statements in these proceedings contain references to examples of purported unsatisfactory performance and/or conduct by the Applicant, this evidence did not contradict the Applicant’s evidence that he had not been subject to any disciplinary action. The evidence does suggest that some issues with the Applicant’s performance had been raised by email with him by Ms Perdikaris but there was no evidence that the Applicant had been put on any performance improvement plan or had been given any formal warnings regarding his performance. On balance, I consider that the relationship could have been righted after the meeting of 16 November by a follow up meeting between the Applicant and Ms Perdikaris. I note that Ms Watkins communicated with the Applicant by email following the meeting to apologise and express that she looked forward to seeing the Applicant either the following day or on the following Monday. Accordingly, the evidence before the Commission does not support a finding that the Applicant would not have completed his notice period.

Findings

I find that:

The employment relationship would have continued until 22 December 2023; and

The Applicant would have received or would have been likely to receive during that period the sum of $13,221.15.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.[16] What is reasonable depends on the circumstances of the case.[17]

Submissions

The Applicant submitted that the Applicant had taken reasonable steps to minimise the impact of the dismissal by:

Obtaining casual employment as a cook during December 2023;

Submitting a number of job applications via Seek.com upon returning from overseas travel in April 2024; and,

Commencing alternative employment on 3 June 2024.

The Applicant had made arrangements for a month of leave for his wedding in March 2024, and in these circumstances, the Applicant submitted that not having secured long-term employment during this period was not unreasonable.

The Respondent did not make any submissions regarding the efforts of the Applicant to minimise the impact of the dismissal.

Evidence

The Applicant gave evidence, which I accept, that he had been unable to obtain long-term employment including by reason that he had a month of leave prearranged for his wedding in March 2024.

The Applicant’s evidence was that he performed work at the Bargo Sports Club between 6 December 2023 to 9 December 2023, 12 December 2023 to 16 December 2023, and 22 to 23 December 2023 inclusive and earned $4,293.27 during this period. From January 2024 to April 2024, the Applicant’s evidence was that he was largely financially supported by his personal savings and the assistance of his partner. The Applicant also referred to experiencing stress and anxiety as a result of these proceedings, which he said made it difficult to look for work. From early March 2024 to April 2024, the Applicant was travelling overseas on his honeymoon.

Upon the Applicant’s return in early April 2024 and until May 2024, the Applicant’s evidence was that he had applied for at least 9 jobs, as established by the Applicant’s Seek.com application history which was entered into evidence. The Applicant’s evidence also referred to the Applicant having made several additional job applications in April 2024 that did not appear to have been recorded on the Seek.com application history.

In or around May 2024, the Applicant attended an interview for a Head Chef position which he was subsequently offered and he commenced in this role on 3 June 2024.

Findings

I find that the Applicant took reasonable steps to mitigate his loss by way of obtaining casual employment in December 2023 and making reasonable efforts to obtain alternative ongoing employment from April 2024 to May 2024. I have factored into my consideration all of the relevant circumstances (including his mental health which had been negatively affected by the dismissal as demonstrated by the preparation of a mental health care plan, as well as the Applicant’s wedding and honeymoon).

I am satisfied that the Applicant took reasonable steps to mitigate his loss.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

The Applicant’s evidence is that the Applicant earned $4,293.27 by way of casual employment between 6 December 2023 and 23 December 2023.

That evidence is not challenged by the Respondent.

It is necessary to subtract the amount earned by the Applicant since his dismissal from the remuneration the Applicant would have earned had he remained employed until 22 December 2023 (not 23 December 2023) and submissions from the Applicant clarified that this amount was $4,012.99.

Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation

I consider that it is unnecessary to calculate any income likely to be earned during the period between this order for compensation being made and the actual compensation being received, because the Applicant’s employment would have ended on 22 December 2023.

Other relevant matters

I do not consider that any other relevant matters arise in this matter.

Compensation – how is the amount to be calculated?

As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206 at [16]:

The well-established approach to the assessment of compensation under s.392 of the FW 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 (Sprigg).[18] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.[19]

The approach in Sprigg is as follows:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

Step 1

I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment to be $13,221.15 on the basis of my finding that the Applicant would likely have remained in employment until 22 December 2023. This estimate of how long the Applicant would have remained in employment is the ‘anticipated period of employment’.[20]

The Applicant sought payment for the two weeks worked prior to his dismissal but acknowledged that this may fall outside of the jurisdiction of the Commission, as this payment could be considered to be an underpayment of the Applicant by the Respondent. I do not consider that, should the two weeks that the Applicant worked prior to his dismissal remain as-yet unpaid by the Respondent, that these monies can be properly categorised as the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment in accordance with the definition at s.392(2)(c) of the Act. This submission was advanced on the basis that because the Applicant was dismissed, he could not physically attend the workplace to obtain the cash payment of his outstanding salary. These monies are owed to the Applicant regardless of the dismissal and I have not factored them into my estimation.

Step 2

Only monies earned since termination for the anticipated period of employment are to be deducted.[21] I therefore deduct the sum earned by the Applicant from the date of dismissal until 22 December 2023, being $4,012.99[22] from $13,221.15.

Step 3

The next step in the formula considers deductions for contingencies to be deducted from assessments of future economic loss. I note that neither the Respondent nor the Applicant addressed the matter of contingency deduction.

The purpose of a deduction for contingencies is to discount an amount assessed in relation to future economic loss in order to account for future unknown matters which may affect the capacity of an individual to earn the amount that has been assessed. Considering my calculation in this matter relates to an assessment of past economic loss only, no deduction for contingencies is to be made.

Step 4

I have considered the impact of taxation but have elected to settle a gross amount of $9,208.16 and leave taxation for determination.

Having applied the formula in Sprigg, I am nevertheless required to ensure that ‘the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,’ including my findings above.

I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the Act. I have not included any component in the amount of compensation for shock, distress or humiliation, or other analogous hurt, caused to the Applicant by the manner of his dismissal.

Compensation – is the amount to be reduced on account of misconduct?

I am satisfied that misconduct of the Applicant did not contribute to the employer’s decision to dismiss him. Therefore, the amount of the order for compensation is not to be reduced on account of misconduct.

Compensation – how does the compensation cap apply?

Section 392(5) of the Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:

(a)the amount worked out under section 392(6); and

(b)half the amount of the high income threshold immediately before the dismissal.

The amount worked out under section 392(6) is the total of the following amounts:

(a)the total amount of the remuneration:

(i) received by the Applicant; or

(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.

There was no dispute and I find that the total amount of the remuneration to which the Applicant was entitled during the 26 weeks immediately before the dismissal was $68,750.00.

The high income threshold immediately before the dismissal was $167,500. Half of that amount is $83,750.00.

The amount of compensation ordered by the Commission must therefore not exceed $68,750.00 and I am satisfied that the order of compensation that I intend to order does not exceed the compensation cap.

For the reasons outlined above, I consider that the Applicant was unfairly dismissed and will make an order that the Respondent pay $9,208.16 gross less taxation as required by law to the Applicant in lieu of reinstatement within 7 days of the date of this decision.

An Order[23] requiring payment in this amount within 7 days of the date of this decision will issue separately.

DEPUTY PRESIDENT

Appearances:

Mr A Kaine with Mr T Arvanitis on behalf of the Applicant.
No appearance for the Respondent.

Hearing details:

2024.
June 18.
Sydney (by video via Microsoft Teams).

Final written submissions:

3 September 2024.

[1] Warrell v Fair Work Australia [2013] FCA 291.

[2] Ibid.

[3] Abandonment of Employment [2018] FWCFB 139 at [21].

[4] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

[5] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 (Selvachandran), 373.

[6] Ibid.

[7] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

[8] Selvachandran 373.

[9] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].

[10] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) (‘Chubb’) [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762 (‘Read’), [46]-[49].

[11] Chubb [41]; Read [46]-[49].

[12] Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44].

[13] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].

[14] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].

[15] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].

[16] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

[17] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

[18] (1998) 88 IR 21.

[19] [2013] FWCFB 431.

[20] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].

[21] Ibid.

[22] The Applicant submits that the total gross amount earned for employment for the period 6 December 2023 and 22 December 2023 was $4,012.99 (before tax and payment of superannuation entitlements).

[23] PR779132.

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