Chuqi Wang v Perfect Shape Medical Beauty Australia Pty Ltd - [2023] FWC 2485

[2023] FWC 2485

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Chuqi Wang
v

Perfect Shape Medical Beauty Australia Pty Ltd

(U2023/5786)

COMMISSIONER JOHNS

MELBOURNE, 13 NOVEMBER 2023

Application for an unfair dismissal remedy – alleged unsatisfactory performance for not meeting sales target – dismissal unfair – compensation ordered.

Introduction

On 28 June 2023, Ms Chuqi Wang (Applicant) made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy in respect of her dismissal by Perfect Shape Medical Beauty Australia Pty Ltd (Employer/Respondent).

On 11 July 2023, the Employer filed a response to the unfair dismissal application. It did not raise any jurisdictional objections.

Attempts at conciliation were attempted, but the matter remained unresolved.

Consequently, the matter was listed for determination.

Conference or Hearing

On 16 August 2023, the Commission sought submissions from the parties about whether the Commission should conduct either a determinative conference (section 398) or an arbitrated hearing (section 399) in relation to the matter.

Taking account the fact that both parties were self-represented and what would be the most effective and efficient way to resolve the matter, I decided to conduct a determinative conference on 25 September 2023.

The determinative conference

The matter was conducted in a hybrid mode with the Respondent appearing remotely and the Applicant appearing in-person. Each party was assisted by an interpreter.

In advance of the conference the parties filed materials which were compiled in a Digital Tribunal Book (DTB). For completeness I set out below the documents relied upon by the parties. I have had regard to all these material in coming to this decision:

Exhibit	Document title	Date
1	Form F2	28-06-2023
1.1	Employment contract	24-01-2022
1.2	Warning letter	03-10-2022
1.3	Email from the Applicant to the Respondent relating to the first warning letter	21-11-2022
1.4	Warning letter 2	09-12-2022
1.5	Email from the Applicant to the Respondent relating to the second warning letter	20-12-2022
1.6	Email from the Respondent to the Applicant in reply	21-12-2022
1.7	Termination Letter	28-06-2023
1.8	Email from the Applicant to the Respondent relating to the termination letter	28-06-2023
1.9	Email from the Respondent to the Applicant in reply	28-06-2023
1.10	Document titled "I think they sent this letter with an error and asked for clarification"	28-06-2023
2	Form F3	11-07-2023
2.1	Wang Chuqi - Warning Letter	03-10-2022
2.2	Wang Chuqi - Warning Letter 2	09-12-2022
2.3	Termination Letter	28-06-2023
3	Email from the Applicant attaching submissions	29-08-2023
3.1	Applicant's outline of argument: Merits	29-08-2023
3.2	Applicant's statement of evidence	29-08-2023
3.3	The Applicant's witness statement	29-08-2023
3.4	Witness statement of Yingyin Han	29-08-2023
3.5	Witness statement of Sim Qiu Qi	29-08-2023
3.6	Witness statement of Hsieh Min Kong	19-09-2023
3.7	The Applicant's document list	29-08-2023
3.8	Contract of employment with Bally Australia	22-08-2023
3.9	Document titled "Monthly sales target"	29-08-2023
3.10	Document titled "Applied job history"	various
3.11	Document titled "First warning Oct combine"	various
3.12	Termination Letter combine	various
3.13	Document titled "Warning letter Dec combine"	various
3.14	Employment contract	24-01-2022
3.15	Document titled "everyday con list"	various
4	Email from the Respondent attaching submissions	13-09-2023
4.1	The Respondent outline of argument: Merits	13-09-2023
4.2	The Respondent statement of evidence	13-09-2023
4.3	The Respondent document list	13-09-2023
4.4	Contract of employment	24-01-2022
4.5	Whatsapp to notify for online training	various
4.6	Ipad calling system	various
4.7	Patty Attendance	various
4.8	Patty Sales Amount	various
4.9	Termination Letter - Patty	28-06-2023
4.10	Wang Chuqi - Warning Letter Oct	03-10-2022
4.11	Wang Chuqi - Warning Letter Dec	09-12-2022

During the conference, the Respondent also provided the Applicant’s last payslip (which the Applicant contended she did not receive). This document was marked as exhibit 5.[1]

At the conference the Applicant called four (4) witnesses as follows:
·Ms Chuqi Wang - The Applicant
·Ms Sim Qiu Qi – Previous employee at the Respondent (Chinese medical practitioner and consultant)
·Ms Yingyin Han – Previous employee at the Respondent (Customer service and receptionist)
·Ms Hsieh Min Kong – Previous employee at the Respondent (Store manager and sales consultant)
All witnesses made themselves available for cross-examination. However, Ms Hsieh Min Kong was ultimately not required for cross examination.[2]

At the conference the Respondent called one (1) witness as follows:
·Mr Henry Chan – Assistant HR (Human Resource) and Administration Manager

Background

The following matters were either agreed between the parties or not otherwise substantially contested:

a)   On 24 January 2022, the Applicant commenced her employment with the Respondent as a sales/beauty consultant on a part time basis.[3]
b)   On 17 November 2022, the Applicant received a warning letter via email dated 3 October 2022 (First Warning). The First Warning put the Applicant on notice for not meeting the sales target in October 2022. The First Warning directed the Applicant to take immediate ‘corrective action’.[4] The relevant sales target was a figure of $150,000.00 per month regardless of employment status as a full time or part time employee.[5]
c)   On 21 November 2022, the Applicant sent an email to the Respondent contending that the First Warning was unfair and unrealistic on the basis that she only worked nine (9) days in October due to approved leave.[6] The Applicant referred the Respondent to the ‘Managing performance and warnings’ page of the Fair Work Ombudsman’s website and sought clarification about the applicable sales target for her as a part time employee, the gap between her sales in October and the target, and what the ‘corrective action’ entails among other things. The Applicant requested that the Respondent either revise the First Warning or retract it by close of business day on 23 November 2022 before she seeks assistance from the Fair Work Ombudsman. The Respondent did not respond to the Applicant.
d)   On 9 December 2022, the Applicant received an identical warning letter putting the Applicant on notice for not meeting the sales target in November 2022 (Second Warning). The Second Warning again directed the Applicant to take immediate ‘corrective action’.[7] On the same day Mr Chan contacted the Applicant via a call to discuss the Second Warning. Mr Chan advised that the Applicant did not meet the sales target because she has been late 15-30 minutes on occasions and not making calls to existing clients.[8]
e)   On 20 December 2022, the Applicant sent an email to the Respondent again referring it to the same page of the Fair Work Ombudsman and noting her request for clarifications is yet to be actioned.[9] The Applicant urged the Respondent to review the employment contract with a legal practitioner and rejected the letter as a valid warning letter on the basis that it has been issued arbitrarily with no details of any required corrective actions, which may constitute workplace bullying. The Applicant further noted that she does not see meeting the company’s sales target and overall profitability as part of her job duty as a consultant. The Applicant requested that the Respondent either revise the Second Warning or retract it.
f)   On 21 December 2022, Mr Chan replied to the Applicant via an email and stated (formalities omitted):[10]
‘According to our pervious conversation through WhatsApp, I stated clearly that the main job duty of our consultant is to make sales and sell treatment plans to our clients. Therefore, company did set sales target for each of our consultant and it is also a main indicator to measure your job performance. I have already told you that you were not reaching the company sales target for the recent months and gave you chance to fix the issue with sufficient time.
I do not know why you think that meeting the company sales target is not your job duty as company set sales target for you every month.
Please try your best to reach sales target and know that it is your responsibility to do it.’

g) On 28 June 2023, the Applicant received a termination letter advising:[11]
‘…The decision of the company ending your employment is based on your consistent unsatisfactory performance and not reaching sales target in the past months. We made the decision since company had already given you warning letters in Nov 2022 and Dec 2022, but you had not shown any signs of improvement for the recent month...’

h) On 28 June 2023 at 7:41 pm, the Applicant sent an email to Mr Chan seeking confirmation about six (6) items (formalities omitted):[12]

‘1. The last day of my employment.
2. Company name in the second line.
3. Please supply sales performance records and articulate what is unsatisfied performance.
4. I have replied to the warning letter on Nov 2022 and Dec 2022 with questions but have yet to receive any response and actionable performance improvement plan.
5. Please clarify the terms of this termination.
6. Please clarify your definition of "release any further liability and responsibility" I want to know what right you want me to give up.’

i) On 28 June 2023 at 9:01 pm, Mr Chan responded to items 3, 4 and 6 only (formalities omitted):[13]

‘3. Please supply sales performance records and articulate what is unsatisfied performance.
- I think you should have your sales performance records and the sales target in our system.
4. I have replied to the warning letter on Nov 2022 and Dec 2022 with questions but have yet to receive any response and actionable performance improvement plan.
- I have been stated clearly in the email that your sales performance is not reaching the company standard, and company also provide sales training to all of our consultant

6. Please clarify your definition of "release any further liability and responsibility" I want to know what right you want me to give up.
- As per our conversation, to confirm that you agree with termination that we pay you for notice period, what else do you want?’

j)   On termination the Applicant was paid up to 12 July 2023.
k)   Late on 28 June 2023, the Applicant filed the current application in the Commission.
l)   On 4 September 2023 the Applicant commenced new employment. As a result of her efforts to obtain employment, the Applicant was out of work for 7 weeks and 5 days (i.e. 7.7 weeks).

The Applicant submits she was unfairly dismissed and seeks an Order that she be compensated in the amount of twelve (12) weeks.

Protection from Unfair Dismissal

An order for reinstatement or compensation may only be issued where the Commission is satisfied the Applicant was protected from unfair dismissal at the time of the dismissal.

Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:
‘382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(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.’
There is no dispute, and the Commission, as presently constituted, is satisfied, the Applicant has completed the minimum employment period, and is covered by a modern award.[14] Consequently, the Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal.

I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the FW Act.

Was the dismissal unfair?

A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the FW Act existed. Section 385 provides the following:
‘385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC 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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.’

Was the Applicant dismissed?

A person has been unfairly dismissed if the termination of their employment comes within the definition of ‘dismissed’ for purposes of Part 3–2 of the FW Act. Section 386 of the FW Act provides that:
‘386 Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.’
There is no dispute, and the Commission, as presently constituted, is satisfied, the Applicant has been dismissed.

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

A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (the Code).

The Respondent did not contend that the Code applied. Therefore, this is not a relevant consideration.

Was the dismissal a genuine redundancy?

The Respondent did not submit I should dismiss the application because the dismissal was a case of genuine redundancy. Therefore, this is also not a relevant consideration.

Harsh, unjust or unreasonable

Having been satisfied of each of s.385(a),(c)-(d) of the FW Act, the Commission must consider whether it is satisfied the dismissal was harsh, unjust or unreasonable. The criteria the Commission must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the FW Act:
‘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.’
The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:
‘.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.’
I am under a duty to consider each of these criteria in reaching my conclusion.[15]

The Applicant submits the dismissal was harsh, unjust or unreasonable because:[16]

‘There were two warning letters sent to me on November 2022 and December 2022, I consider both letters invalid.
The first letter was issued in Oct 2022 for unsatisfactory performance and for not meeting sales targets. Despite working only nine days that month, the same sales target was expected of me according to the letter. This letter contained typographical errors and inaccuracies. I have highlighted these issues and am awaiting clarification, which I have yet to receive.
The second letter in Dec was issued for the same reason. The actions have been briefly mentioned in a WhatsApp chat which is listed as follows:
• Patty has been late for 15-30 minutes sometimes. Sales can be improved if not late because customers can come during those 15-30 minutes.
• Patty does not make calls to the existing clients to catch up so that the consultant can make sales from the existing client again.
While it's true that I am sometimes late due to missing the morning train, the second point is not feasible.
The company has not provided me with a device or mobile phone to make calls to existing clients. It would be unethical to ask clients for their contact numbers and store them on my personal phone. I believe this constitutes a conflict of interest, as people could potentially use client contacts for other purposes. This request is unreasonable and puts me in a precarious position.

I have communicated to the individual who issued these letters, Henry Chan (Assistant Human Resources & Administration Manager), that the arbitrary use of warning letters could constitute workplace bullying, which is a violation of the Employment Act. I have questioned the procedure and sought an actionable plan for improvement on both occasions (see supporting documents). I have not signed these warning letters due to my outstanding queries.

I view myself as a professional consultant. I meet with customers in our clinic, share my knowledge and experience, and provide recommendations based on their needs and our available treatment plans. I strive to deliver excellent customer service and expand my knowledge by learning about health science and dermatology. I work diligently and aim to achieve sales to the best of my ability.
Unfair and unjust
The customer allocation process is unfair. The company allocates customers to consultants via a WhatsApp chat. If no customers are assigned, consultants must sit in the room for the entire day. The sales performance achieved in the previous month determines which consultant will get most of the customers based on sales rank. Despite being a part-time employee, I am expected to meet the same sales target as full-time employees.
The sales target is set at $150,000 per month, a figure that was neither communicated nor agreed upon. Every consultant is expected to achieve this target monthly. To my knowledge, no consultant has met the sales target so far. Several consultants have been dismissed in recent months for the same reason - consistent unsatisfactory performance and failure to meet the sales target. I believe this target is not achievable.

The employment termination process is questionable. Termination of employment is a serious decision to the employee, HR (Henry Chan) inform me via WhatsApp chat in a sudden, there is no prior message. I have to bear this message myself without a supporting companion. It has caused stress and chest pain. I have made an appointment to see my GP.’

The Respondent submits the dismissal was not harsh, unjust or unreasonable because:[17]
a)   the Applicant was often late;
b)   the Respondent offered regular training to the Applicant to improve her performance; and
c)   the Applicant was provided with two warning letters and was on notice about the possibility of termination if her performance did not improve.
I will now consider each of the criteria at s.387 of the FW Act separately.

Valid reason - s.387(a)

The Respondent must have a valid reason for the dismissal of the Applicant, although it need not be the reason given to the Applicant at the time of the dismissal.[18] The reasons should be ‘sound, defensible and well founded’[19] and should not be ‘capricious, fanciful, spiteful or prejudiced.’[20]

The only reason relied on by the Respondent as set out in the termination letter was based on alleged unsatisfactory performance for not meeting the sales target. However, the Respondent did not provide any evidence about how the sales targets were set, how the sales targets were reasonable, nor evidence about whether other employees ever achieved the sales targets. Evidence was provided about the Applicant’s sales performance during the 17 months of her employment. It indicated that the Applicant never achieved sales of $150,000.00 per month. She averaged $24,531.92 per month. Absent any other evidence the Respondent has not established that the Applicant’s actual record was a failure to perform.

The Respondent conceded before me that the reason relied on was not a valid reason:[21]
‘THE COMMISSIONER: .... Mr Chan, one of the issues that I have to determine in this matter is whether or not there was a valid reason to terminate the applicant's employment. It seems to me that the company has not filed any material to justify the reasonableness of the 150,000 per month sales target. Am I right that you have not filed any evidence to justify the reasonableness of the $150,000 per month sales target? Am I right about that?
MR CHAN: (Through interpreter) That was the target set by the company.
THE COMMISSIONER: Look, I understand that it's set by the company. The question is, is it a reasonable target? You haven't put in any evidence to prove that it's reasonable.
MR CHAN: No, I am happy, so - - -
THE COMMISSIONER: Well, your company had a proceeding brought against it in November last year by a Joanna Nguyen. That was heard by Deputy President Boyce. Deputy President Boyce on that occasion observed that you did not put in any evidence about the reasonableness of the target and you still haven't in this matter.
MR CHAN: Yes, I understand.
THE COMMISSIONER: Well, how am I going to find that there was a valid reason for termination when you have not put in any evidence about the reasonableness of the target?
MR CHAN: I understand.
THE COMMISSIONER: No, answer my question.
MR CHAN: What is your question?
THE COMMISSIONER: My question is how can I find there was a valid reason when you have not put in any evidence about the reasonableness of the sales target?
MR CHAN: So the target is there for everyone, all the consultants, and then we will look at each month, the percentage of people reaching their target and then get the average.
THE COMMISSIONER: Well, Mr Chan, that might be right. The problem is you have not put in any evidence to prove these sales targets. I would expect to see all of the financials. I would expect to see all of the revenue. I would expect to see all of the examples of people who have achieved these targets. You have put in no evidence.
MR CHAN: Because those figures are confidential so that's why we didn't think about that.
THE COMMISSIONER: Okay, if you want to keep them confidential that's fine but I have to make a decision based on the evidence before me and you have put in no evidence to justify the valid reason.
MR CHAN: I understand.
THE COMMISSIONER: So do you concede that based on the evidence before me I should find that there was no valid reason for dismissal?
MR CHAN: I do.’

The Respondent also conceded that the First Warning was unfair:[22]

‘THE COMMISSIONER: So, Mr Chan, one of the questions I have: the applicant was given a warning, in October, for not achieving the sales target; is that correct?‑‑
Mr Chan: Yes, that's‑ correct.
The Commissioner: But she had only worked nine days in October; is that correct?
‑‑
Mr Chan: ‑Yes.
The Commissioner: So how could she achieve the full month's sales target in only nine days?
‑‑
Mr Chan: ‑This is - company response to the (indistinct). (Through interpreter) That's the company's decision. I can understand.
The Commissioner: You accept, don't you, that that is unfair?
‑‑
Mr Chan: That's why we gave her a long period‑ to improve, from October to June.
The Commissioner: But if someone is only working nine days in the month, how can you give them a warning for not achieving the sales target for the entire month?
‑‑
Mr Chan: ‑Yes, and we did.
The Commissioner: You accept, that is unfair, don't you?
‑‑
Mr Chan: ‑Yes.’

Consideration

Having regard to the concessions appropriately made by the Respondent, I find that there was not a valid reason for the dismissal. The purported sales targets were arbitrarily set and applied. The Respondent’s application of the purported sales targets was not sound, defensible or well founded.

Notification of the valid reason - s.387(b)

Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,[23] in explicit terms[24] and in plain and clear terms.[25] In Crozier v Palazzo Corporation Pty Ltd[26] (Crozier) a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations FW Act 1996 stated the following:
‘[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.’[27]
The Respondent merely relied on its two warning letters given to the Applicant in November and December of 2022 and a phone call to the Applicant to inform her of the dismissal.[28]

Consideration

I found above that there was no valid reason for dismissal. Consequently, the Applicant cannot have been notified of any valid reasons for her dismissal.

Even if I were to find that there were valid reasons for dismissal (and I do not) it still cannot be said that the Applicant was notified of the ‘valid’ reason for dismissal. The phone call on the day of dismissal merely informed her of the decision. There was no notification before the dismissal. As in the matter of Crozier above, the phone call shut the stable door after the horse has bolted.

Opportunity to respond - s.387(c)

An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.[29]

The Respondent did not address this in its submissions.[30]

Consideration

I have already found that the Applicant was not put on notice after the warning letter in December 2022 and that the phone call on the day of dismissal was just to merely inform her of the decision.

I find the Applicant was not given an opportunity to respond to the reason for the dismissal.

Unreasonable refusal by the employer to allow a support person - s.387(d)

Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.

The Applicant noted in her submissions that she did request to have a support person in discussions relating to her dismissal but that request was refused.[31] However, this factor was not further explored during the conference nor challenged by the Respondent in its submissions.

Consideration

There being no evidence to the contrary, I find the Respondent did unreasonably refuse to allow the Applicant to have a support person present at discussions relating to the dismissal.

Warnings regarding unsatisfactory performance - s.387(e)

Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employer about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct.[32]

Consideration

The Full Bench of the Commission in Fastidia Pty Ltd v Goodwin,[33] provided as follows when considering equivalent provisions in the Workplace Relations Act 1996:

‘[43] In the context of s.170CG(3)(d) we think that 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.

[44] In relation to the latter requirement, a mere exhortation for the employee to improve his or her performance would not be sufficient. We also note that we accept that these criterion are to be applied in a practical and commonsense way taking into account the employment context.’

It is not in dispute that the Respondent provided the Applicant with two warning letters. I am satisfied that the letters identified the concern surrounding the employee’s performance and that the employment would be at risk should the relevant ‘corrective action’ not occur to improve sales performance. However, the letters were merely exhortations in circumstances when there is no elaboration on what these alleged ‘corrective action[s]’ are, and in the absence of clear feedback and support despite emails from the Applicant seeking the same. The only evidence before me of any discussion between the parties’ about why the Applicant was not meeting the sales target is in the telephone call identified in the above chronology where Mr Chan sites tardiness and not making phone calls to existing clients. The email of Mr Chan on 21 December 2022 in response to the Applicant’s email seeking a response to her questions is merely a further example of exhortation requesting the Applicant to do her ‘best to reach [the] sales target’. In any event, following this exchange and as conceded by the Respondent, the performance of the Applicant allegedly deteriorated further but no further emails, warning letters, phone calls or text messages eventuated until the date of the dismissal. It is relevant to note that the six (6) months preceding the dismissal were devoid of any controversy. Similar circumstances unfolded in Jillian Spencer v Local Blue Pages [2010] FWA 2415, where Commissioner Gooley found (footnotes omitted):[34]
‘[56] In this case while Mr Gazzard gave Ms Spencer advice that she was not meeting her targets and exhorted her to do better there is no evidence that there was any discussion with her about why she was failing to meet her targets. Mr Papas gave evidence that it must be due to lack of activity but there is no evidence that this was discussed with Ms Spencer by either Mr Gazzard or Mr Papas and this allegation was not put to Ms Spencer in cross examination.
[57] Having been given additional responsibilities by Mr Papas in July 2009, despite consistently not meeting her sales target, and the performance of her duties without complaint after that date, it is not surprising that Ms Spencer submitted that the termination of her employment “came out of the blue” and drew the connection between her request for proof that her superannuation had been paid and the termination of her employment.
[58] I therefore find that Ms Spencer was not warned prior to termination about her unsatisfactory performance.’

I find the Respondent did not warn the Applicant about her alleged unsatisfactory performance before the dismissal.

Impact of the size of the Respondent on procedures followed - s.387(f)

The size of the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.

The Respondent identified in its form F3 that it has 60 employees.[35]

Consideration

I find the size of the employer’s enterprise did not impact on the procedures followed in effecting the dismissal.

Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

The absence of dedicated human resource management or expertise in the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.

Mr Chan appeared before the Commission in his capacity as the Assistant HR & Administration Manager. Therefore, the Respondent does have a dedicated human resource management team. Consequently, I would have expected that the Respondent would have more properly behaved in a manner consistent with Australian workplace relation laws. I make this observation noting that this is not the first time that the Respondent has had an unfair dismissal proceeding brought against it. Having regard to the findings I have made it would appear the Respondent has learned nothing from its previous experience in the Commission. The Respondent quite clearly does not care about fairness in employment matters. This factor weighs heavily in favour of finding that the dismissal was unfair.

Other relevant matters - s.387(h)

Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. I consider the following matters to be relevant to the determination of whether the dismissal of the Applicant was harsh, unjust or unreasonable:

a)the lateness of the Applicant to her shifts; and
b)the Respondent’s contention that it provided training to the Applicant.

In relation to the first matter, the Applicant conceded in her submissions that she was late on occasions due to her travel by train.[36] The Respondent also provided unchallenged evidence quantifying the Applicant’s tardiness.[37] Considering the same, I am satisfied that the Applicant was late on occasions to her shifts. However, the Applicant’s conduct does not outweigh the unfairness that has been visited upon her.

In relation to the second matter, the Respondent only provided evidence of trainings offered on its WhatsApp group until March of 2022.[38] There was no further evidence of such training provided to the employees beyond this point and the same was conceded by the Respondent before me.[39] The only evidence of trainings provided were well prior to the first warning letter in October of 2022. There is no evidence of training having been offered or provided after either the First Warning or the Second Warning.

Conclusion

Having considered each of the matters specified in s.387, the Commission, as presently constituted, is satisfied the dismissal of the Applicant was:

a.unjust because the Applicant was not guilty of the alleged poor performance;
b.unreasonable because the evidence before the employer did not support the conclusion that the Applicant was a poor performer; and
c.harsh on the employee due to the economic consequences resulting from being dismissed, namely that she was out of work for 7 weeks and 5 days.

Accordingly, I find the Applicant’s dismissal was unfair.

Remedy

Section 390 of the FW Act sets out the circumstances in which I may make an order for reinstatement or compensation:
‘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 Commission may make the order only if the person has made an application under section 394.
(3) The Commission 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.’
I have already dealt with the issues at s.390(1)(a)–(b) above. The Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal pursuant to s.382 of the FW Act and the Applicant was dismissed unfairly. Accordingly, the Commission is required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if it is satisfied such an order is appropriate in all the circumstances.

Reinstatement

The Applicant seeks compensation as the primary remedy. Regardless of the remedy sought by the Applicant, s.390 of the FW Act requires I first determine whether reinstatement is appropriate before I may consider an order for compensation.

The Applicant submits reinstatement would be inappropriate because she no longer wishes to work there due to their customer allocation mechanism.[40] I also observe that the Applicant has since found alternative employment.

The Respondent submits reinstatement would be inappropriate because the Applicant could not meet the sales target and if reinstated would continue to fail to do so.[41]

Consideration

In Regional Express Holdings Ltd T/A Rex Airlines[42] a Full Bench of Fair Work Australia considered what factors may be taken into account when considering if reinstatement is inappropriate under s.390(3)(a) of the FW Act:[43]
‘[26] Whenever an employer dismisses an employee for misconduct, assuming the employer is acting honestly, there is an implied loss of trust and confidence in the employee. If it is subsequently found that the termination was harsh, unjust or unreasonable it is appropriate to consider whether the relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of management witnesses. All of the circumstances should be taken into account. In this case there are a number of relevant matters. They include the fact that not all of the conduct alleged against the respondent has been proven, the respondent’s apparently unblemished record in the performance of his flying duties over a period of 14 years, the fact that the misconduct is not directly related to the performance of the respondent’s professional duties as a first officer and Rex’s failure to pursue any substantial disciplinary action against another pilot who, it is alleged, has been guilty of misconduct at least as serious as that of which the respondent was accused. The significance of the last consideration is that the pilot in question is still carrying out the full range of his duties, despite allegations of conduct of a kind which, in the respondent’s case, is said to have led to an irrevocable loss of trust and confidence. Assuming a positive approach on both sides we find there is a reasonable chance that the employment relationship can be restored with the necessary level of mutual trust.’
In the circumstances the Commission, as presently constituted, is satisfied that I should order reinstatement is inappropriate.

Compensation

Section 390(3)(b) provides the Commission may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

The Applicant submits that an order for compensation is appropriate in all the circumstances of this case because:[44]

‘My family needs to pay the mortgage and raise two kids. I expect the company to pay compensation of 12 weeks. So that I can afford to pay the daily expenses. I think I have done nothing wrong in this employment. I have been sacked for a reason that is not listed in my employment contract. I have attempted to communicate and resolve this issue; however, I have still been sacked. In the current job market, three months is a reasonable duration to look for the next job.’

The Respondent did not make any submissions as to why an order for compensation is not appropriate in all the circumstances of this case.[45]

The Commission, as presently constituted, is satisfied that an order for compensation is appropriate in all the circumstances of this case.

Section 392 of the FW Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered:
‘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
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.’
The method for calculating compensation under s.392 of the FW Act was dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge[46] (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations FW Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket[47] and Ellawala v Australian Postal Corporation.[48] I have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation.

I will now consider each of the criteria in s.392 of the FW Act.

Remuneration that would have been received: s.392(2)(c)

The Applicant’s remuneration with the Respondent was on a part time basis at $28.00 an hour.[49] The parties’ submitted that the Applicant worked 20 hours per week.[50]

I should now determine the period of time the Applicant would have remained employed by the Respondent, or would have likely remained employed with the Respondent, had she not been dismissed.

The Applicant had no intention of leaving the Respondent, therefore, absent the dismissal she would have remained employed for the foreseeable future.

I find that the Applicant would have continued to be employed by the Respondent for the full period of the maximum compensation cap had she not been dismissed (i.e. 26 weeks). The amount the Applicant would have received is therefore $14,560.00 [i.e $28.00 per hour multiplied by 20 hours ($560.00 per week) multiplied by 26 weeks].

Remuneration earned: s.392(2)(e)

The Applicant was dismissed on 28 June 2023 with two (2) weeks in lieu of notice. Therefore, the Applicant was paid until 12 July 2023.

The Applicant commenced in a new role on 4 September 2023 on a full-time basis.[51]

I find the Applicant has earned at least an equivalent amount of remuneration for employment since 4 September 2023. That means that her economic loss for the 7 weeks and 5 days that she was out of work was $4,312.00.

Income likely to be earned: s.392(2)(f)

Because the Applicant has secured new employment, I find the Applicant is reasonably likely to earn at least an equivalent amount from her new employment (i.e. from 4 September 2023). The effect of this is that there is no economic loss after that date.

Other matters: s.392(2)(g)

I find it is not appropriate in the circumstances that a contingency should be applied.

There are also no other relevant matters that affect the amount of compensation that I propose to award. However, if it was permitted, I would have been minded to further penalise the Respondent because it is a repeat offender when it comes to unfairly dismissing employees. It would seem that the previous adverse decision, by Deputy President Boyce in Nguyen v Perfect Shape Medical Beauty Australia Pty Ltd (November 2022),[52] did not act as specific deterrence to not repeat the errors of the past. In the present matter the Respondent had repeated its unfair behaviour. It seems to have learned nothing (or does not care) about the fairness expected of employers who do business in Australia.

Viability: s.392(2)(a)

The Respondent did not provide any submissions or evidence addressing this factor.[53]

I find an order for compensation in the amount proposed will not affect the viability of the Respondent’s enterprise.

Length of service: section (s.392(2)(b))

I find that the Applicant’s period of service with the Respondent, being 17 months, should not affect the amount of compensation to be ordered.

Mitigating efforts: s.392(2)(b)

In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether the Applicant acted reasonably in the circumstances.[54]

The Applicant provided evidence of 11 job vacancies which she applied for between the period 7 July 2023 and 14 August 2023.[55]

I find that the Applicant has made efforts to mitigate her loss suffered following the dismissal.

Misconduct: s.392(3)

I have not found any misconduct by the Applicant that contributed to the dismissal.

Shock, Distress: s.392(4)

I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap: s.392(5)

I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or half of the high-income threshold immediately prior to the dismissal.

The high-income threshold immediately prior to the dismissal was $162,000.00. Therefore, half of the high-income threshold would have been $81,000.00 immediately prior to dismissal.

The amount the Applicant would have earned, or to which the Applicant was entitled, for the 26 week period immediately prior to the dismissal was $14,560.00.

The amount of compensation I will order ($4,312.00) does not exceed the compensation cap.

Payment by instalments: s.393

The Respondent did not ask that any compensation ordered against it should be paid in instalments. Therefore, I make no such order.

Conclusion

The Commission, as presently constituted, is satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and a remedy of compensation (in the amount of $4,312.00) is appropriate. That payment to the Applicant must be made within 21 days.

An order will be issued with this decision [PR766604].

COMMISSIONER

Appearances:

Ms C Wang on her own behalf
Mr H Chan on behalf of the Respondent

Hearing details:

2023
Melbourne (Hybrid)
25 September.

[1] Transcript of the proceedings, PN79.

[2] Transcript of the proceedings, PN137-142.

[3] Digital Tribunal Book (DTB), Exhibit 1, p 5; see also DTB, Exhibit 2, p 38.

[4] DTB, Exhibit 1.2, p 23.

[5] Transcript of the proceedings, PN12.

[6] DTB, Exhibit 1.3, p 24.

[7] DTB, Exhibit 1.4, p 26.

[8] DTB, Exhibit 1.5, p 27.

[9] DTB, Exhibit 1.5, p 27.

[10] DTB, Exhibit 1.6, p 28.

[11] DTB, Exhibit 1.7, p 29.

[12] DTB, Exhibit 1.8, p 30.

[13] DTB, Exhibit 1.9, p 31.

[14] DTB, Exhibit 2, p 38.

[15] Sayer v Melsteel[2011] FWAFB 7498.

[16] DTB, Exhibit 3.1, p 62-63.

[17] DTB, Exhibit 2, p 42.

[18] Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

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

[20] Ibid.

[21] Transcript of the proceedings, PN11-28.

[22] Transcript of the proceedings, PN160-165.

[23] Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].

[24] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

[25] Previsic v Australian Quarantine Inspection Services Print Q3730.

[26] (2000) 98 IR 137.

[27] Ibid at 151.

[28] DTB, Exhibit 4.1, p 154-155.

[29] RMIT v Asher (2010) 194 IR 1, 14-15.

[30] DTB, Exhibit 3.1, p 155.

[31] DTB, Exhibit 3.1, p 61.

[32] Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237.

[33] Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44].

[34] Jillian Spencer v Local Blue Pages [2010] FWA 2415, [56]-[58].

[35] DTB, Exhibit 2, p 39.

[36] DTB, Exhibit 3.1, p 62.

[37] DTB, Exhibit 4.7, p 202.

[38] DTB, Exhibit 4.5, p 193-198.

[39] Transcript of the proceedings, PN155-158.

[40] DTB, Exhibit 3.1, p 64.

[41] DTB, Exhibit 4.1, p 164.

[42] [2010] FWAFB 8753.

[43] Ibid at [26].

[44] DTB, Exhibit 3.1, p 64.

[45] DTB, Exhibit 4.1, p 165.

[46] [2013] FWCFB 431.

[47] (1998) 88 IR 21.

[48] Print S5109.

[49] DTB, Exhibit 3.1, p 53; see also DTB, Exhibit 4.1, p 153.

[50] DTB, Exhibit 3.1, p 52; see also DTB, Exhibit 4.1, p 152.

[51] DTB, Exhibit 3.8, p 102.

[52] PR748270.

[53] DTB, Exhibit 4.1, p 165.

[54] Biviano v Suji Kim Collection PR915963 at [34].

[55] DTB, Exhibit 3.10, p 115.

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Citations

Chuqi Wang v Perfect Shape Medical Beauty Australia Pty Ltd [2023] FWC 2485

Cases Citing This Decision

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Cases Cited

2

Statutory Material Cited

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Byrne v Australian Airlines Ltd [1995] HCA 24

Jillian Spencer v Local Blue Pages [2010] FWA 2415