Danae Moumtzis v Dolina Fashion Group Pty Ltd

[2013] FWC 501

[2013] FWC 501

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 -Application for unfair dismissal remedy

Danae Moumtzis
v
Dolina Fashion Group Pty Ltd
(U2012/9500)

VICE PRESIDENT WATSON MELBOURNE, 23 JANUARY 2013

Application for unfair dismissal remedy -whether dismissal is harsh, unjust or unreasonable - - whether valid reason for dismissal - whether dismissal relates to conduct or capacity - procedural fairness - compensation awarded - Fair Work Act 2009 ss.387, 392, 394.

[1] This decision, edited from a decision on transcript on 17 January 2013, concerns an application for an unfair dismissal remedy by Ms Danae Moumtzis in relation to her employment with Dolina Fashion Group Pty Ltd (Dolina). The application is made under s.394 of the Fair Work Act 2009 (the Act).

[2] At the hearing on 17 January 2013, Ms Moumtzis was represented by Mr J Pearce of counsel, and Dolina was represented by Ms E Eransen and Mr B Greyling.

[3] Ms Moumtzis commenced employment with Dolina on 14 July 1995. In October 1995, Ms Moumtzis was tasked by the Managing Director of Dolina, Nitzan Ronen, to develop a women’s clothing range called Freewoman. Ms Moumtzis was also given the responsibility of growing and developing Dolina’s relationships with larger corporations and by 1999, Ms Moumtzis was able to place the Freewoman range in both K-Mart and Best & Less. Throughout the time that Ms Moumtzis was employed by Dolina, she continued as a fashion designer for Freewoman, a buyer for Joi Stores and was also tasked with developing existing labels. In the ensuing years, Ms Moumtzis received several pay increases but none since 2005. Her salary at the time of termination was $115,000. In 2012 she was paid a bonus of $20,000 for work performed prior to 2007. Ms Moumtzis contends that during her employment, Dolina never provided her with Key Performance Indicators, there were no consistent budgets and no annual reviews of her performance.

[4] On 8 August 2012, Ms Moumtzis was called into a meeting with Mr Ronen. Mr Ronen informed Ms Moumtzis that she had not achieved the profit margins of the business, she was purchasing fabric that was too expensive and from local rather than overseas suppliers and that her winter range was not selling in stores. Ms Moumtzis contends that Mr Ronen then commented on her age and asked her to work as a consultant as he was still impressed with some of her designs. Ms Moumtzis declined the offer to work as a consultant and contends that Mr Ronen then suggested she resign instead.

[5] Ms Moumtzis subsequently received a termination letter dated 9 August 2012 which provided that Dolina considered her unfit for her position as a designer and it was therefore terminating her employment with effect from 9 August 2012. She was paid five weeks pay in lieu of notice.

[6] It is not disputed that Ms Moumtzis was dismissed on 9 August 2012, that the Small Business Fair Dismissal Code does not apply and that the case is not a case of genuine redundancy.

[7] The central question that I need to determine is whether the dismissal was harsh, unjust or unreasonable. The Act identifies a number of criteria for assessing whether a termination is harsh, unjust or unreasonable, and those criteria are set out in s.387. I propose to consider each of those insofar as they are relevant to the circumstances involved in this matter and reach an overall conclusion based on those criteria.

[8] The first question is whether there was a valid reason for the dismissal relating to the person's capacity or conduct. On the evidence before me, which is quite limited, Dolina terminated Ms Moumtzis’ employment in a letter dated 9 August 2012 and indicated in that letter, by reference to discussions on the previous day, that it considered Ms Moumtzis to be unfit for her position as a designer. The evidence in relation to those matters is extremely limited. In the circumstances of significant length of employment during which Ms Moumtzis was commended for her performance and in the absence of any explanation of unfitness or performance difficulties, I find in all the circumstances that there was not a valid reason for dismissal relating to capacity or conduct.

[9] The next factor to be considered is whether Ms Moumtzis was notified of the reason for termination. It appears that there was a discussion held on the day previous to the day her termination took effect. There may have been discussions on other days previously but it appears that the reason for termination related to the discussions that had taken place on 8 August 2012. There is limited evidence about those discussions. Dolina did not put on any evidence in relation to that meeting. I am therefore required to have regard to the uncontested evidence of Ms Moumtzis in relation to what occurred at that meeting.

[10] I am satisfied that at the meeting there was a general discussion about the performance of brands under the responsibility of Ms Moumtzis. In essence there is a link between the Dolina’s perception of Ms Moumtzis’ performance and the termination. I am prepared to assume in the circumstances that there was a discussion about the reason which satisfies the criteria of notification of the reason for the purposes of s.387(b).

[11] The next factor I am required to consider is whether Ms Moumtzis was given an opportunity to respond to any reason relating to her capacity or conduct. In my view there may have been an opportunity but it was extremely limited in the circumstances. There was a discussion between effectively the owner of Dolina and Ms Moumtzis. Dolina’s perceptions of difficulties with Ms Moumtzis performance was raised and Ms Moumtzis did take issue with certain matters. These issues were apparently taken into account. I therefore do not form the view that there was no opportunity to respond to the reasons. However, given the nature of the evidence in relation to that matter, I consider that the opportunity was extremely limited.

[12] The next factor for consideration is whether there was an unreasonable refusal by the employer to allow the person to have a support person present to assist in any discussions relating to dismissal. In my view this matter does require some knowledge of the nature of the discussions before there can be an expectation of the request for a support person to be present. The evidence before me establishes that the discussion took place without notice of its nature and content. There is no evidence of a request for a support person but I believe that the intent of this provision may not have been fully provided, given the nature of the discussions and the lack of notice as to their content.

[13] The next factor is if the dismissal related to unsatisfactory performance and whether the applicant had been warned about that unsatisfactory performance before the dismissal. As far as I can ascertain from the evidence in this matter, the reasons did relate to unsatisfactory performance perceived by Dolina and related primarily to the performance of brands falling within the responsibility of Ms Moumtzis. There is limited evidence of previous discussions in relation to those matters and it does appear to me that the evidence does not establish that Ms Moumtzis had been warned about the unsatisfactory performance at least to the extent of indicating that her performance was at risk and that termination of employment may result if there was no appropriate improvement in performance.

[14] The next factor is the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal. The enterprise is a small one, although there are approximately 65 employees employed. It does not employ human resources advisers to assist the employer in following appropriate human resources procedures. I therefore have regard to that factor in relation to the processes followed by Dolina in this case.

[15] The next factor is 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. This matter is related to the previous factor and I do have regard to the absence of dedicated human resource management specialists in relation to this matter.

[16] I have had regard to the entirety of the evidence. I do not believe that there are any other significant factors that bear upon the unfairness in relation to this matter. I am required to have regard to the evidence in relation to the factors in s.387 and to make a judgment whether in all the circumstances; the termination was harsh, unjust or unreasonable. Having regard to all of those factors, I consider the failure to establish a valid reason for the termination and the failure to follow a process whereby there are appropriate warnings as to unsatisfactory performance and a proper opportunity for performance to improve, to be significant factors in relation to this matter, notwithstanding the limited resources and human resources expertise available to the employer in its enterprise.

[17] In my view a termination based on performance, in order to be fair, should follow a process of discussing performance inadequacies, providing necessary assistance to the employee to meet the performance standards of the employer, and provide an appropriate opportunity for the employee to improve their performance to the employer's expected standards. I find in these circumstances that on the evidence before me, this did not occur and in all of the circumstances I find that the dismissal was harsh, unjust and unreasonable.

[18] I propose to give consideration to the appropriate remedies flowing from the conclusion I have reached as to the unfairness of the dismissal. Ms Moumtzis does not seek reinstatement and based on the submissions of the parties, I find that reinstatement is not practicable. I do, however consider that a remedy of compensation is appropriate and I have had regard to the criteria for deciding the amount of compensation set out in s.392 of the Act.

[19] In this matter Ms Moumtzis was terminated with five weeks' pay in lieu of notice. She has attempted to mitigate the damage caused by the termination and has obtained employment of approximately $595 per week net for a period of approximately 10 weeks since the termination in August of last year. in all of the circumstances, I consider that it would have been open to the employer to address the performance difficulties it considered with Ms Moumtzis and that there was a possibility that employment would continue for the foreseeable future.

[20] Having regard to the nature of the reasons advanced, the lack of evidence in relation to the matter, and all of the other circumstances, I consider that some deduction or some account should be made of what in essence appears to have been the conclusion reached by Dolina as to the suitability of Ms Moumtzis for the ongoing needs of the business. In all of the circumstances, I would propose to award compensation of 22 weeks salary. This is a gross figure and I make allowance for the earnings received by Ms Moumtzis, apart from the five weeks' pay in lieu of notice; over the 22 week period from other employment that she has been able to obtain.

[21] At the conclusion of the hearing, I asked counsel for Ms Moumtzis to provide a calculation as to the appropriate gross figure that arises from my conclusion and to provide Dolina with an opportunity to respond to the basis of that calculation.

[22] An agreed gross figure was reached on 21 January 2013. I will issue an order reflecting the agreed amount of compensation arising from my conclusions.

VICE PRESIDENT WATSON

Appearances:

J. Pearce of counsel for Ms Moumtzis

E. Eransen with B. Greyling for Dolina Fashion Group Pty Ltd

Hearing details:

2013.

Sydney.

January 17.

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