Darcy Elliott v Five Islands Trading Pty Ltd T/A Five Islands Hotel
[2024] FWC 1417
•4 JUNE 2024
| [2024] FWC 1417 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Darcy Elliott
v
Five Islands Trading Pty Ltd T/A Five Islands Hotel
(U2024/1820)
| DEPUTY PRESIDENT DEAN | CANBERRA, 4 JUNE 2024 |
Application for an unfair dismissal remedy – resigned or dismissed – compensation ordered.
On 20 February 2024 Mr Darcy Elliott (Applicant) made an application for a remedy pursuant to s.394 of the Fair Work Act 2009 alleging that he was unfairly dismissed from his employment with Five Islands Trading Pty Ltd T/A Five Islands Hotel (Respondent).
The Respondent contends that the Applicant was not dismissed but rather resigned voluntarily. This is disputed by the Applicant.
The application was heard on 21 May 2024. Mr D Potts of Kells Lawyers appeared with permission for the Applicant and Mr L Anderson appeared for the Respondent. The Applicant gave evidence on his own behalf and the Respondent called evidence from Mr Nathan Goode (hotel General Manager) and Mr Kevin Hobson (Assistant Manager).
For the reasons outlined below, I find that the Applicant was unfairly dismissed and have decided that compensation is the appropriate remedy.
Background
The Applicant commenced employment on a casual basis at the Five Islands Hotel in Cringila NSW in December 2021. In January 2023 the new owners of the Hotel (ie the Respondent) offered the Applicant a full-time role as a Gaming Manager.
On 14 January 2024 the Applicant sent an email to Mr Kennedy of the Respondent requesting a pay increase for himself and his fellow managers. Mr Kennedy was away from work but replied to the email indicating the request would be discussed when Mr Kennedy returned to work two weeks later.
On 29 January 2024 the Applicant received an email from the Respondent requiring him to attend a meeting the following day. The email included that “failure to attend the meeting at the agreed time and date may result in your termination”.
The Applicant attended the meeting on 30 January 2024 as requested. Mr Hobson and Mr Goode attended on behalf of the Respondent.
The Applicant recorded the meeting which went for approximately 8 minutes. It became evident in the hearing that the Applicant had not sought consent to record the meeting as neither Mr Hobson nor Mr Goode were aware of the recording. Notwithstanding, the Respondent did not object to the tender of a transcript of the meeting, and both witnesses agreed the transcript was an accurate reflection of what was discussed at the meeting.
The transcript shows that Mr Goode opened the meeting by telling the Applicant that his performance was “just not cutting it” and he was not performing his duties efficiently as a manager. Mr Goode said he wanted to put forward the suggestion that the Applicant resign, and if he agreed to resign then the Respondent would give him two weeks pay plus a reference, subject to the Applicant signing a deed of release. The Applicant was told that if he didn’t resign, he would not get a reference. Towards the end of the meeting the following exchange took place between Mr Goode and the Applicant in relation to the deed of release:
Applicant: That’s an NDA, I’m not signing that, you can take that with ya
Mr Goode: Alright
Applicant: No, I’m not signing that, that’s an NDA I’m not doing it
Mr Goode: Okay
Applicant: Nup
Mr Goode: What do you want to do then?
Applicant: I’ll take the other one. That’s an NDA I’m not signing that
Mr Goode: What do you want to do?
Applicant: I’ll just do the resignationMr Goode: Alright, Okay, Alright so you give your verbal resignation and I know I can’t force you to write a resignation but I can send you an email confirming it.
Applicant: Yeah
Mr Goode: Just reply to that
Applicant: Yeah okay
Mr Goode: Okay, good one mate, right-o have a good rest of the week okay
Applicant: Okay no worries
Mr Goode: You don’t have to come back tomorrow. See ya, thanks mate
When is a person ‘dismissed’?
The meaning of ‘dismissed’ is defined in s.386(1) of the Act which states:
(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.
In Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli[1] (Bupa), a Full Bench of the Commission examined the relevant authorities as to what constitutes ‘dismissed’ under s.386(1) which included the following:
(1)There may be a dismissal within the first limb of the definition in s.386(1)(a) where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the ‘heat of the moment’ or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign. Although ‘jostling’ by the employer may contribute to the resignation being legally ineffective, employer conduct is not a necessary element. In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer.
(2)A resignation that is ‘forced’ by conduct or a course of conduct on the part of the employer will be a dismissal within the second limb of the definition in s.386(1)(b). The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of the employer’s conduct such that the employee had no effective or real choice but to resign. Unlike the situation in (1), the requisite employer conduct is the essential element.
In Lance Gunther & Michele Daly v B & C Melouney T/A Easts Riverside Holiday Park[2], Deputy President Sams noted the following when considering whether the applicant was dismissed:
a.Jurisdiction can only exist where termination of employment at the initiative of the employer has occurred. ‘Initiative’ is relevantly defined in the New Shorter Oxford Dictionary as:
‘initiative 1. The action of initiating something or of taking the first step or the lead; an act setting a process or chain of events in motion; an independent or enterprising act.’
b.This definition was considered in Mohazab v Dick Smith Electronics Pty Ltd (Mohazab) where a Full Court of the Industrial Relations Court of Australia said, ‘… a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship.’
c.In Mohazab, the Full Court also said:
‘In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.’
d.A Full Bench of the AIRC in Stubbs v Austar Entertainment Pty Ltd said, ‘… to constitute termination at the initiative of the employer the termination must be the direct or consequential result of ‘some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect ...’ [Rheinburger v Huxley Marketing, 16 April 1996 per Moore J].
The transcript is somewhat unclear about exactly what options the Applicant had, but it included resigning, signing a deed of release and receiving an additional week’s pay, or simply resigning. What was clear from the transcript of the meeting was that there was no option for the Applicant to remain in employment; the choice was in effect only around the terms of his departure. He said he had no intention of resigning but was pushed to do so. He said he enjoyed his work and other than the issue about his rate of pay, he would still be there.
The Respondent submitted that the Applicant did not wish to work for it any longer, and he was frustrated that he was refused a pay rise. The Respondent alleged the Applicant said his attitude and performance would not improve until he received greater remuneration. However, there was no evidence given to support this allegation.
I am satisfied on the evidence that the Applicant did not give his resignation voluntarily. There was no option for him to remain in employment. Had the Respondent not taken the action it did, the Applicant would have remained in the employment relationship. This is clearly a termination at the initiative of the Respondent.
I find the Applicant was dismissed within the meaning of the Act. I am also satisfied that he is otherwise a person protected from unfair dismissal. Accordingly, I now need to determine whether his dismissal was unfair.
Was the dismissal unfair?
A dismissal is unfair if the Commission is satisfied on the evidence that the circumstances set out at s.385 of the 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.
I have found that the Applicant was dismissed, and subsections (c) and (d) do not apply.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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[3] 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.’
The onus is on the Applicant to prove his dismissal was harsh, unjust and/or unreasonable.
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[4]
Valid reason - s.387(a)
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]
There is no mandate for giving the ‘valid reason’ criterion any greater emphasis or weight than any of the other criteria in s 387. It is well settled that the statutory requirement to ‘have regard to’ or ‘take into account’ requires the Commission to give the matter(s) weight as a fundamental element in the decision-making process. Even if it is found that there was a valid reason for the dismissal, an overall assessment must be made as to whether the dismissal was harsh, unjust or unreasonable.
The Respondent contended that the Applicant was not performing to a satisfactory standard, and alleged he did not wear the proper uniform, was not punctual and was often absent from work, and he ignored requests to correct his behaviour.
Mr Goode gave evidence that the Applicant was not a punctual employee and had poor attendance. The Respondent provided an attendance report which showed a list of shifts the Applicant was rostered to work in the previous 12 months. Mr Goode said the report showed that for 221 out of 230 shifts the Applicant either did not show up to work or started late or finished early. Mr Goode said he discussed these matters with the Applicant, along with the requirement to wear the staff uniform, on many occasions. Mr Goode conceded in cross examination that the Applicant had never been provided with a copy of the attendance report.
In reply, the Applicant gave evidence that he recalled one occasion where he was spoken to about his punctuality in early 2023 and had never been spoken to about punctuality since then. In relation to his attendance, the Applicant gave evidence that when he was trained as a duty manager, he was instructed to “clock out” when he had finished his closing duties and when the gaming attendant had finished theirs, and not when he was rostered to finish his shift. He further gave evidence that if he did leave before his scheduled finish time, he checked with the overlapping manager that he was allowed to finish at that time.
In terms of the uniform, the Applicant said he was only provided with a shirt from the Respondent, which he wore with black pants or shorts and black shoes. He says he did not recall ever receiving any feedback about his appearance or alleged failure to wear the uniform.
The Respondent relied on an email it received from the Applicant on 16 July 2023 in which he said he would “rather just be a normal duty manager and get paid the same and not have to worry about a completely different department at the same time for the exact same money I’m on”. The Respondent says that at this time the Applicant stopped fulfilling his duties as a Gaming Manager.
In respect of the 16 July 2023 email, the Applicant explained that at the time he was performing the duties of both a duty manager and a gaming manager. He said the purpose of the email was to maintain the duties that were required of his role rather than working two roles.
Mr Goode also gave evidence that the Applicant had failed to fulfil his duties on the night of 8 January 2024, and CCTV footage showed the Applicant sitting at a gaming machine, neglecting his duties. He also failed to follow the correct end of night procedures, contended the Respondent, and this compromised the safety of staff.
In relation to the night of 8 January 2024, the Applicant said there were no patrons in the premises for at least one hour, and there were no outstanding duties to complete, so he and the security guard sat down near the gaming machines. In terms of the end of night procedures, the Applicant admitted he forgot to put in a code of the time delay on the safe but said the gaming rakes were placed securely in the walk in safe which requires a code for access, and he simply forgot to enter the time delay code.
Mr Goode said that when the Applicant saw Mr Goode on the night of Monday 23 January 2024, the Applicant threw his keys towards Mr Goode, which he understood to mean that the Applicant no longer wished to be part of the management team.
The Applicant said the throwing of the keys was a joke he had with Mr Goode that related to a previous manager doing the same. Mr Goode did not return the keys to the Applicant, saying that he was demoted because Mr Anderson did not want him to be a manager anymore. The Applicant said he assumed this was because he had asked for a salary increase.
Finally, the Respondent said that at around 2am on 24 January 2024, the Applicant was found sitting in the back office scrolling through social media rather than working. The Applicant admitted to this, stating he was upset because of his interaction with Mr Goode the day before and he wanted to compose himself before returning to work.
Having considered the evidence, I find that there was no valid reason for the Applicant’s dismissal. I am not satisfied the matters relied on by the Respondent are sufficiently serious as to warrant his dismissal without prior warning. As outlined below, I am not satisfied that the Applicant was clearly warned about any alleged unsatisfactory performance and the possible consequences of continued unsatisfactory performance.
Notification of the valid reason and opportunity to respond - s.387(b) and (c)
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,[8] in explicit terms[9] and in plain and clear terms.[10] In Crozier v Palazzo Corporation Pty Ltd[11] a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations 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.”[12]
An employee protected from unfair dismissal must also be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. Such requirement will be satisfied where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern.[13] 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.[14]
The requirement to notify of the reason, together with the requirement to provide an opportunity to respond to the reason, involves consideration of whether procedural fairness was afforded to the Applicant before his dismissal was effected.
I find that the Applicant was not notified of the reason for his dismissal or given an opportunity to respond to the performance matters that resulted in his 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 said he was not offered a support person, however the question for the Commission is not whether he was offered a support person but whether he was unreasonably refused a support person. The Applicant did not request a support person and I find he was not unreasonably refused a support person.
Warnings regarding unsatisfactory performance - s.387(e)
A warning for the purposes of s.387(e) must clearly identify:
a. the areas of deficiency in the employee’s performance;
b. the assistance or training that might be provided;
c. the standards required; and
d. a reasonable timeframe within which the employee is required to meet such standards.[15]
The warning must also “make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.”[16]
The evidence does not support a finding that the Applicant was clearly warned about this performance. Nor is there any evidence to support a finding that the Applicant was informed that the Respondent was considering dismissing him.
Impact of the size of the Respondent on procedures followed (s.387(f)), and the absence of dedicated human resources management specialist/expertise on procedures followed (s.387(g))
There is no evidence that the size of the Respondent and any absence of dedicated human resource expertise impacted on the procedures followed by it in effecting the dismissal.
Other relevant matters - s.387(h)
Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
I do not consider there are any other matters that are relevant in this case.
Conclusion as to unfairness
Having carefully considered each of the required matters, I am satisfied that the Applicant has discharged his onus of proving that his dismissal was harsh, unjust and unreasonable, and therefore unfair.
Remedy
Having found that the Applicant’s dismissal was unfair, it is necessary to consider what, if any, remedy should be granted to him. The Applicant seeks the remedy of compensation.
Under section 390(3) of the Act, I must not order the payment of compensation unless:
a.I am satisfied that reinstatement is inappropriate; and
b.I consider an order for payment of compensation is appropriate in all the circumstances of the case.
In this case, I am satisfied that reinstatement is inappropriate, and an order for payment of compensation is appropriate.
The Applicant submitted that had he not been dismissed, he would have continued in his employment earning $1,250 per week. Given his efforts to mitigate his loss, he submitted a fair result would be to award him compensation for his lost income from the date of his dismissal to the date of hearing, that being approximately 16 weeks. This amounts to $20,000. His earnings during that period were $11,015.
In considering whether this is appropriate compensation, I must consider the factors which are set out in s.392(2) of the Act and which are set out below.
Remuneration received, or likely to be received (s392(2)(c))
In terms of the remuneration received, or likely to be received (s392(2)(c)), I consider it unlikely that the Applicant’s employment would have continued for a lengthy time period. Had his employment continued and a proper process of warning for unsatisfactory performance taken place and no improvement was made, then his employment would have ended within no more than 4 months.
Remuneration earned and income likely to be earned (s392(2)(e) and (f))
The Applicant gave evidence of the remuneration he had received from the date of his dismissal to the date of the hearing which is set out above.
Length of service (s392(b))
The Applicant was employed for a relatively short period of time, and I consider that it does not support reducing or increasing the amount of compensation ordered.
Viability (s392(a))
In terms of viability (s392(a)), there is no evidence before the Commission as to the effect of an order for compensation might have on the viability of the Respondent.
Mitigation efforts (s392(d))
The Applicant obtained other employment shortly after his dismissal on a casual basis. I am satisfied that he took appropriate steps to mitigate his loss.
Other relevant matters (s392(g))
In terms of other relevant matters (s392(g)), there are no other matters relevant to this consideration. Specifically, I do not consider it necessary to discount or increase the amount for ‘contingencies’.
Shock, distress etc (s392(4))
The amount of compensation does not include a component for shock, humiliation or distress.
Conclusion
Having considered each of these factors, I am satisfied that it is appropriate to order a remedy of compensation in the amount of $8,985.00 less appropriate taxation, this being the difference between what the Applicant would have received in the 16 weeks between the dismissal and the hearing, and his earnings over that period. An order to that effect will be issued with this decision.
DEPUTY PRESIDENT
Appearances:
D Potts of Kells Lawyers for Darcy Elliott.
L Anderson for Five Islands Trading Pty Ltd T/A Five Islands Hotel.
Hearing details:
2024.
By video:
May 21.
[1] [2017] FWCFB 3941.
[2] [2012] FWA 2473.
[3] (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.
[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, 373.
[6] Ibid.
[7] Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
[8] Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].
[9] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[10] Previsic v Australian Quarantine Inspection Services Print Q3730.
[11] (2000) 98 IR 137.
[12] Ibid at 151.
[13] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[14] RMIT v Asher (2010) 194 IR 1, 14-15.
[15] McCarron v Commercial Facilities Management Pty Ltd t/a CFM Air Conditioning Pty Ltd [2013] FWC 3034, [32].
[16] Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44].
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