Darren Nurcombe v Balaclava Pastoral Co Pty Ltd T/A Australian Hotel Cowra

[2016] FWC 7454

[2016] FWC 7454

FAIR WORK COMMISSION

DECISION

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

Darren Nurcombe
v
Balaclava Pastoral Co Pty Ltd T/A Australian Hotel Cowra
(U2016/938)

COMMISSIONER CAMBRIDGE SYDNEY, 20 OCTOBER 2016

Application for unfair dismissal remedy - jurisdictional objection - s. 386 - no dismissal - employment found to have been terminated on initiative of employer - no valid reason for dismissal - significant procedural deficiencies - dismissal harsh, unjust and unreasonable - compensation Ordered.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Sydney on 3 March 2016. The application was made by Darren Nurcombe (the applicant) and the respondent employer is the Balaclava Pastoral Co Pty Ltd [ABN 40 155 497 788] T/A Australian Hotel Cowra (the employer).

[2] The application indicated that the date that the applicant’s dismissal took effect was 21 February 2016. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation, and it has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted at Orange on 19 and 20 July 2016.

[4] At the commencement of the Hearing, the Commission granted permission, pursuant to s. 596 of the Act, for the Parties to be represented by lawyers or paid agents. The applicant was represented by Mr G Casey, solicitor from the firm of Garden & Montgomerie. Mr Casey called the applicant and the applicant’s wife as witnesses who provided evidence in support of the claim for unfair dismissal remedy. The employer was represented by Mr P Ryan from the Australian Hotels Association (NSW) (AHA). Mr Ryan adduced evidence from a total of four witnesses called on behalf of the employer.

Factual Background

[5] The applicant had been employed as a part-time barman at the Australian Hotel in Cowra (the Hotel) for almost six years. At the time when the applicant commenced employment, March 2010, the Hotel was operated by its owners. In October 2012, the owners of the Hotel leased the premises and the license for its operation to the employer. Consequently, the employment of the applicant was transferred to the employer approximately three years and five months before the termination of employment.

[6] The employer initially conducted the Hotel operation under the supervision of its then two Directors, Mr Bradley Raymond O’Connor (Mr O’Connor) and Ms Anita Trethowan Fifoot (Ms Fifoot). Mr O’Connor and Ms Fifoot, who were apparently in a de facto relationship, conducted the Hotel operation as joint Managers, and Mr O’Connor was the named licensee of the hotel. The employer has approximately 15 to 20 employees in total.

[7] At some time in 2013, Mr O’Connor ceased to be a Director of the employer. The de facto relationship between Mr O’Connor and Ms Fifoot became strained, and at sometime around 2014 or 2015 the relationship apparently ended. Mr O’Connor continued to have some responsibility for the day-to-day operations of the Hotel up until about January 2015. Mr O’Connor’s name remained as the licensee on the nameplate above the main entrance doors to the Hotel until September 2015, when the licensee on the nameplate was changed to Ms Fifoot.

[8] The events which led directly to the termination of the applicant’s employment commenced on Saturday, 30 January 2016, when Mr O’Connor arrived at the Hotel and approached the applicant who was working at the time. Mr O’Connor and the applicant shook hands and exchanged pleasantries as they had not seen each other for some time. Mr O’Connor told the applicant that he was arranging a party for some friends and that he would take some beer dispensing equipment from the Hotel, including a “miracle box” and other fittings for use at the party.

[9] Shortly after Mr O’Connor had left the hotel with the miracle box and fittings, Ms Fifoot was told that Mr O’Connor had been seen leaving the Hotel with the miracle box. Ms Fifoot then confronted the applicant about Mr O’Connor’s presence at the Hotel and his removal of the miracle box. The applicant confirmed that Mr O’Connor had taken the miracle box and fittings. Ms Fifoot rebuked the applicant for not reporting the actions of Mr O’Connor to her. The applicant protested, and in his defence, he stated that he believed that as Mr O’Connor was half owner of the Hotel he could take whatever he wanted. A terse exchange then ensued between Ms Fifoot and the applicant about the knowledge that the applicant had as to the level of authority that Mr O’Connor could exercise over the employer’s property.

[10] Ms Fifoot then rang the police and reported that the miracle box had been stolen from the Hotel (the miracle box theft incident). After ringing the police, Ms Fifoot decided that she would suspend the applicant from duty pending an investigation into the removal of the miracle box from the Hotel. There was then a further difficult discussion between Ms Fifoot and the applicant which included debate as to whether the applicant was being dismissed from employment or stood down, and whether any such stand down involved payment of wages.

[11] During the course of the vigorous debate between Ms Fifoot and the applicant, the police arrived at the Hotel. The police ushered the applicant outside of the Hotel, and questioned him about the alleged theft of the miracle box and fittings which were the property of the Hotel. The applicant explained his understanding of the level of authority that Mr O’Connor had regarding the property of the Hotel. The police were apparently satisfied with this explanation. The police and the applicant then separately left the Hotel premises.

[12] On the following Monday morning, 1 February 2016, Ms Fifoot provided the applicant with a letter which confirmed that he had been temporarily stood down from his role, pending investigation into the miracle box theft incident. This letter also advised the applicant that he was required to attend a formal counselling meeting which had been arranged for Wednesday, 3 February 2016. The applicant was advised that he could bring a support person with him to the formal counselling meeting.

[13] By way of letter dated 3 February 2016, solicitors acting for the applicant wrote to Ms Fifoot and inter alia, required details of each and every allegation made against the applicant. On the same day, Ms Fifoot sent a letter to the applicant’s solicitors which advised that the formal counselling meeting had been rescheduled to Tuesday, 9 February, and that the applicant would remain suspended during this period. Ms Fifoot also advised the applicant’s solicitors that details of the allegations concerning the conduct and performance of the applicant would be provided in writing before the rescheduled meeting.

[14] Ms Fifoot sent a further letter to the applicant’s solicitors dated 5 February 2016, which set out details of four specific allegations made in respect to the performance and conduct of the applicant. The first of these allegations related to the applicant’s conduct in respect to the miracle box theft incident of 30 January 2016. The second allegation related to the applicant’s alleged refusal to perform a task involving him moving kegs into the cool room. The third allegation involved the applicant allegedly refusing to sign particular records relating to betting agents. The fourth allegation related to the applicant’s alleged failure to properly record incidents at the Hotel which may have legal implications, and in particular, an incident which occurred on New Year’s Eve, 31 December 2015.

[15] On 9 February 2016, the applicant was accompanied by his solicitor when he met with Ms Fifoot who was accompanied by a previous employee of the Hotel who attended the meeting as a witness for Ms Fifoot. The applicant responded to the allegations by simply stating that in each case the allegation was denied. Following some further debate, the applicant was invited to clarify that he would return to work on the following day, 10 February. Later that day, the applicant confirmed that he was returning to work the following day, but that he would not sign a confidentiality agreement as had been requested by Ms Fifoot.

[16] The applicant returned to work on 10 February 2016, and he was issued with a final official warning for unacceptable conduct and performance set out in a letter dated 9 February 2016. The final official warning letter of 9 February confirmed that the applicant had been reinstated to his position effective from Wednesday, 10 February, and that his conduct and performance would be monitored. The final official warning letter was placed on the applicant’s personnel file.

[17] On Friday, 19 February 2016, the Hotel received a delivery of kegs which needed to be moved into the cool room. The applicant was asked to move the kegs to the cool room and he refused to do so and suggested that he had some physical incapacity to move the kegs into the cool room. As a result of the applicant’s refusal to move the kegs to the cool room Ms Fifoot decided that on the following day, Saturday, 20 February, she would suspend the applicant from duty. Ms Fifoot arranged for another employee (Ms Horne) to come into the Hotel to act as a witness for her when she told the applicant that he would be suspended (aka stood down).

[18] At around 4:30 pm on Saturday, 20 February, Ms Fifoot asked the applicant to come into her office. Upon entering Ms Fifoot’s office, the applicant noticed the presence of Ms Horne, then as Ms Fifoot commenced to question the applicant about his refusal to do certain tasks the applicant stated words to the effect that “this is a setup” and he immediately left the office and returned to the Hotel bar. The applicant continued to work until the completion of his shift. There was considerable contest as to whether at some point during the afternoon of Saturday, 20 February 2016, Ms Fifoot told the applicant that he had been stood down and directed not to attend for work on the following day.

[19] On the following day, Sunday, 21 February 2016, the applicant attended for work in accordance with his usual roster for work in the bottle shop. Shortly after the applicant arrived at work the applicant noticed that another employee, Mr Death, was in attendance. Mr Death told the applicant that he understood that the applicant would not be working on that day. Ms Fifoot then approached the applicant and a discussion occurred which became the subject of greatly contested evidence.

[20] The applicant said that Ms Fifoot immediately told him that he was terminated and then subsequently she said to the applicant that “You’re stood down.” The applicant insisted that he had been told that he had been sacked and he made a handwritten notation to that effect on his time and wages record document. Ms Fifoot denied that she told the applicant that he had been terminated, but instead she said that she told him that he had been stood down. The applicant maintained that he had been sacked, and Ms Fifoot rejected that proposition, and again stated to the applicant that he had been stood down. Ms Fifoot then directed the applicant to leave the Hotel, and to surrender the keys that he held to the Hotel premises.

[21] The applicant had not brought the Hotel keys with him, and he told Ms Fifoot that it was not his practice to bring the Hotel keys with him on Sundays when he worked a bottle shop shift. The applicant left the Hotel premises. He went home and collected the Hotel keys and then he took those keys to the Cowra police station where he handed them to a police officer who agreed to the applicant’s request that she deliver the keys to the Hotel.

[22] On the following day, Monday, 22 February 2016, Ms Fifoot issued the applicant with a letter inviting him to attend a disciplinary meeting scheduled for 24 February to discuss the events of 19, 20 and 21 February. This letter indicated, inter alia, that Ms Fifoot considered that the events of 19 to 21 February involved the applicant engaging in serious misconduct which justified his summary dismissal.

[23] On 24 February 2016, the applicant’s solicitors sent a letter to Ms Fifoot which relevantly indicated that the applicant believed that he had been dismissed from employment on Sunday, 21 February 2016, and would consequently not attend the proposed disciplinary meeting. The letter also advised that the applicant intended to make an application for unfair dismissal.

[24] Later that same day, 24 February, Ms Fifoot sent a letter to the applicant’s solicitors which inter alia, rejected the proposition that the applicant had been dismissed on 21 February. In this letter, Ms Fifoot stressed that she considered that the applicant’s employment had not ended, and therefore she sought to reschedule the disciplinary meeting for the following day, 25 February 2016. The applicant’s solicitors provided a further letter in response to this communication which reaffirmed the belief that the applicant’s employment had been terminated, and this further letter also confirmed that the applicant would not attend the rescheduled disciplinary meeting.

[25] On 3 March 2016, the applicant filed his claim for unfair dismissal remedy. As anticipated, the employer has contested the application on the basis that the applicant was not dismissed from his employment. Following the termination of the applicant’s employment, he has unsuccessfully sought alternative employment.

The Case for the Applicant

[26] The applicant was represented by a solicitor, Mr Casey. Mr Casey made written submissions which were respectively dated; 16 May, 7 June, 15 August, and 23 September 2016.

[27] The extensive written submissions made on behalf of the applicant asserted, in summary, that the applicant had been dismissed on Sunday, 21 February 2016, and therefore the jurisdictional objection made by the employer should be rejected. The written submissions made by Mr Casey included details of the evidence regarding what was alleged to have been said by Ms Fifoot on 21 February 2016.

[28] In this regard, Mr Casey stressed that the applicant had been directed to leave the Hotel premises and hand in his keys to the Hotel. Mr Casey submitted that the applicant’s version of precisely what was said by Ms Fifoot on 21 February should be preferred. In particular, Mr Casey said that the applicant had written the time of 14.41 and the word “terminated” on his timesheet. According to the submissions of Mr Casey, this contemporaneous note made by the applicant supported the proposition that Ms Fifoot used the word “terminated” and then subsequently she tried to change the term to “stood down.”

[29] The submissions made by Mr Casey sought to challenge the credibility of Ms Fifoot, both generally and in respect to the contested evidence of her discussion with the applicant on 21 February 2016. Mr Casey submitted that it was Ms Fifoot’s inability to deal with the breakdown of her relationship with Mr O’Connor which caused her to place blame on the applicant when the applicant simply did not have the power to stop Mr O’Connor from removing the miracle box and other fittings from the Hotel. Mr Casey further submitted that the actions of Ms Fifoot, which involved her calling the police and requiring them to investigate the applicant for stealing Hotel property, amounted to unjustified and reprehensible conduct that was designed to bully the applicant.

[30] Mr Casey submitted that the Commission should be satisfied that the applicant was dismissed by Ms Fifoot on 21 February, and that that dismissal was harsh, unjust and unreasonable. The submissions made by Mr Casey then referred to the various factors contained in s. 387 of the Act.

[31] Mr Casey submitted that there was no valid reason for the dismissal of the applicant. Mr Casey challenged the actions of Ms Fifoot when she stood the applicant down, pending an investigation into the miracle box theft incident. Mr Casey submitted that this action was heavy-handed in the extreme. Further, according to the submissions made by Mr Casey, the applicant’s conduct in respect to the miracle box theft incident could not provide for valid reason for dismissal.

[32] It was further submitted by Mr Casey that other aspects of complaint about the applicant’s performance and conduct did not establish valid reason for dismissal. Mr Casey made detailed submissions about various complaints that had been raised about the applicant’s performance and conduct. In particular, it was submitted that, in respect to the question of the applicant refusing to move the kegs into the cool room, there was an established understanding between the applicant and Mr O’Connor that exempted the applicant from being required to perform this task on the basis of some physical incapacity.

[33] Mr Casey made submissions which also examined matters such as the applicant failing to sign betting agency notifications, and failing to record a minor scuffle which occurred on New Year’s Eve outside of the bar area of the Hotel. Following an examination of these various issues of complaint about the performance and conduct of the applicant, Mr Casey submitted that those matters, when considered on their merits, would not justify a final official warning, and could not provide valid reason for the dismissal of the applicant.

[34] In further submissions, Mr Casey criticised the conduct of Ms Fifoot which involved the applicant being invited into a meeting at which Ms Fifoot had arranged to have a witness present and which the applicant quickly identified to be a setup. Mr Casey submitted that this was conduct that was designed to avoid the applicant having a support person present to assist in respect of discussions relating to dismissal.

[35] In summary, Mr Casey submitted that the applicant had been subjected to unreasonable and irrational allegations, the most significant of which related to the miracle box theft incident. Mr Casey said that the employer had acted unreasonably by contacting the police, who then questioned the applicant in a very unpleasant situation which was likely to have a serious impact on the applicant’s future employment prospects. Mr Casey submitted that the Commission should find that the applicant had been dismissed and the dismissal was harsh, unjust and unreasonable.

[36] Mr Casey said that the applicant sought monetary compensation as remedy for his unfair dismissal. Mr Casey made further submissions regarding particular aspects of the personal circumstances of the applicant, which he said were relevant to the quantum of compensation that should be provided to the applicant as remedy for his unfair dismissal.

The Case for the Employer

[37] The employer was represented by Mr Ryan from the AHA. The AHA made written submissions on behalf of the employer which were contained in documents respectively dated; 17 May, 7 June, 7 September, and 12 September 2016.

[38] The submissions made on behalf of the employer initially raised two jurisdictional objections. The employer initially asserted that the applicant had not been dismissed, and also, if he had been dismissed, such dismissal was consistent with the Small Business Fair Dismissal Code (the Code). Subsequently, the employer withdrew its jurisdictional objection regarding the operation of the Code, and it was established that the employer had in excess of 15 employees at the time of the termination of the employment of the applicant.

[39] The submissions made by Mr Ryan strongly pressed the jurisdictional objection that the applicant had not been dismissed at the initiative of the employer. In this regard, the submissions made by Mr Ryan stressed that the critical issue for the Commission to determine was whether or not the applicant’s employment was terminated on 21 February 2016.

[40] Mr Ryan submitted that although the Act contemplated that a dismissal or termination could include circumstances where a person resigned, it was abundantly clear that that issue did not arise in these proceedings because the applicant at no stage, advanced argument that he had resigned because he was forced to do so because of conduct of the employer. Mr Ryan submitted that the issue for determination was whether the applicant’s employment was terminated at the initiative of the employer during the events that occurred on 21 February 2016.

[41] The submissions made by Mr Ryan stressed that the determination of the contested questions surrounding the events of 21 February, would depend upon whether the Commission preferred the evidence provided by the applicant, or that provided by Ms Fifoot. Mr Ryan submitted that the Commission would have significant difficulty in accepting the evidence of the applicant wherever that conflicted with the witnesses of the employer.

[42] Mr Ryan made submissions which included a detailed analysis of the evidence provided by the applicant concerning a variety of particular aspects of his work performance and conduct. Mr Ryan submitted that the applicant’s evidence was inconsistent, contradictory, and evasive, and it contained glaring omissions in relation to crucial conversations or events. Further, Mr Ryan referred to the recent history of performance and disciplinary counselling measures that commenced in about August 2015, and which involved the employer raising complaints about certain aspects of the applicant’s work performance and conduct.

[43] The detailed submissions made by Mr Ryan included particular mention of the applicant refusing to perform the task of moving kegs of beer into the cool room after they had been delivered to the Hotel. Mr Ryan noted that on 19 February the applicant had again refused to move the kegs into the cool room, and on the following day, 20 February, Ms Fifoot made a decision to stand down the applicant, pending an opportunity for the applicant to show cause as to why his employment should not be terminated. According to the submissions made by Mr Ryan, although the applicant described the event as a setup, the Commission should except that the applicant was aware that he had been stood down from his employment on 20 February 2016, and his subsequent actions in attending for work on the following day represented direct contravention of the stand down directive of the employer.

[44] Mr Ryan made further submissions which urged the Commission to accept the evidence of the employer regarding the detail of the exchange that occurred between the applicant and Ms Fifoot on Sunday, 21 February 2016. Therefore, according to the submissions made by Mr Ryan, the applicant had constructed a version of the events of Sunday, 21 February which assisted his purpose of treating the circumstances as a dismissal. Mr Ryan said that the evidence provided by the witnesses for the employer should be preferred, and therefore it was clear that the applicant had been stood down and not dismissed from employment.

[45] In further submissions, Mr Ryan detailed the various work performance and conduct matters that had arisen with the applicant from about August 2015. In respect to the miracle box theft incident, Mr Ryan submitted that the evidence clearly established that the applicant was aware that Mr O’Connor no longer had authority regarding management or operation of the Hotel. Mr Ryan made submissions which stressed that the employer’s concern in respect to the applicant’s involvement in this incident was that he had failed to report Mr O’Connor’s removal of the equipment to Ms Fifoot.

[46] Mr Ryan also made submissions about the various other aspects of the applicant’s workplace conduct and performance which gave rise to complaints. There was considerable evidence provided about the issue concerning the applicant’s alleged inability to move the kegs into the cool room. Mr Ryan noted that the applicant had not provided any supporting medical evidence. It was further submitted by Mr Ryan that an adverse inference of the nature established in the case of Jones v Dunkel 1, should be drawn from the applicant’s failure to bring evidence from Mr O’Connor about the alleged understanding that had been made to excuse the applicant from any requirement to move the kegs into the cool room.

[47] Mr Ryan made further submissions which asserted that even if the applicant’s version of the events of 21 February 2016 was adopted, there was no basis to conclude that there had been a dismissal of the applicant at the initiative of the employer. In this regard, Mr Ryan stressed that the evidence of the applicant confirmed that even if Ms Fifoot had initially used the word “terminated” or “termination” she subsequently withdrew that, and stated that the applicant had been stood down. Mr Ryan said that on the applicant’s version, the circumstances involved a “heat of the moment” statement by Ms Fifoot which was swiftly withdrawn. Therefore, it was submitted by Mr Ryan that even if the applicant’s version of the events of 21 February was adopted, the applicant had not been dismissed and therefore his application for unfair dismissal should be dismissed.

[48] Alternative submissions were also made by Mr Ryan which contemplated the prospect that the Commission may determine that the applicant had been dismissed contrary to the position advanced by the employer. In these alternative submissions, Mr Ryan asserted that if there was a dismissal of the applicant it was not harsh, unjust or unreasonable. Mr Ryan said that there was a valid reason for the dismissal of the applicant relating to the various conduct and performance issues which had been identified. In this regard, it was submitted that the employer had undertaken an extensive performance and conduct management process. Mr Ryan said that this process included providing the applicant with ample opportunity to rectify the identified deficiencies. Ultimately the applicant’s conduct demonstrated that he had chosen not to rectify these matters, and therefore, any dismissal, if it be found, would not have been unfair.

[49] Mr Ryan also made further submissions in respect to the question of any remedy if that issue entered into the Commission’s considerations. Mr Ryan submitted that there was a number of aspects of the applicant’s post dismissal conduct which demonstrated that he had not made sufficient efforts to mitigate his loss. Mr Ryan pointed to the limited number of potential employers that had been approached by the applicant, and that he had not provided any formal written application for employment. Further, Mr Ryan criticised the applicant for not disclosing on the business card that he left with prospective employers his extensive experience in the hospitality industry. According to the submissions made by Mr Ryan, the applicant should not be provided with any compensation as remedy because his attempts to mitigate his loss were manifestly unreasonable and doomed to fail.

[50] In further submissions which addressed the question of remedy, Mr Ryan noted that the employer was a reasonably small enterprise and any Order for compensation was said to have an effect on the viability of the employer. In addition, Mr Ryan submitted that having regard for the on-going performance management processes that had been invoked by the employer, it was unlikely that the applicant would have remained in employment for any more than a further 2 to 3 weeks. Further, Mr Ryan submitted that there was misconduct of the applicant involving his failure to follow the lawful and reasonable directions of the employer, which should impact upon and reduce any amount of compensation that the Commission might determine.

[51] In summary, Mr Ryan submitted that the jurisdictional objection raised by the employer had been established as the applicant had not been dismissed at the initiative of the employer. Therefore, the employer primarily submitted that the claim for unfair dismissal should be dismissed. Alternatively, if a dismissal had occurred, it was not harsh, unjust or unreasonable. In a further alternative, if the applicant had been unfairly dismissed, he should not be provided with any quantum of compensation.

Consideration

[52] Section 385 of the Act stipulates that the Commission must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:

(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.

S. 385 (a) - A Person Dismissed or Not

[53] At the Hearing of this case there was a jurisdictional objection raised in respect to that element contained in subsection 385 (a) of the Act, specifically whether the applicant was a person who had been dismissed. The question of whether or not a person has been dismissed from employment involves mixed findings of fact and law. Further, section 386 of the Act prescribes a meaning of “dismissed”. Relevantly, subsection 386 (1) of the Act is in the following terms:

“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.”

[54] In this instance the applicant did not resign, nor did he articulate a case which asserted that he was subjected to conduct or a course of conduct of the employer, that was intended or likely to lead to the termination of employment. Instead, the applicant attempted to rely upon the words allegedly initially uttered by Ms Fifoot during the incident on 21 February, as constituting his dismissal. In the absence of broader, contextual considerations this aspect of the applicant’s case is untenable.

[55] As a general rule, an employee could not rely upon words which might convey dismissal from employment that were uttered by an employer in the heat of the moment and then retracted within a short period of time. In the same way that an employer must treat any heat of the moment resignation from an employee with great care, so too, an employee must be prepared to accept that a quick, genuine retraction of words that deliver dismissal would allow the employment to endure the immediate difficulties. However, the particular circumstances of each case must be examined in order to determine which of the Parties acted in a manner which earnestly intended or was likely to bring the employment to an end.

Who Caused the Employment to End?

[56] Although there was a significant factual contest as to whether Ms Fifoot used the words “terminated” or “termination” during her initial exchange with the applicant on 21 February, there was no dispute that she subsequently told the applicant that he had been stood down, and not dismissed. The evidence also established that the applicant clearly understood the difference between being stood down and dismissed or terminated. Importantly, there was also no dispute that at the time of the exchange between Ms Fifoot and the applicant on 21 February, the applicant was required to surrender the keys that he held to the Hotel premises.

[57] The requirement for the return of the Hotel keys was action on the part of the employer that was consistent with dismissal. This was particularly the case because less than three weeks earlier the applicant had been stood down in relation to the miracle box theft incident, and there had been no requirement for him to surrender his Hotel keys at that time. Consequently, it would seem that although the employer was telling the applicant that he was stood down, the requirement for the return of the Hotel keys reflected the underlying, true intention of the employer to bring the employment to an end. This underlying intention of the employer was also reflected by its conduct during, and in the period following, the miracle box theft incident of 30 January 2016.

[58] The actions of Ms Fifoot in response to the miracle box theft incident were quite extraordinary. There was no requirement to report the matter to the police. Ms Fifoot knew who had taken the miracle box, and she knew that the applicant had no capacity to prevent Mr O’Connor from taking the miracle box and other fittings.

[59] Ms Fifoot may have had legitimate basis for complaint about the applicant not immediately reporting the incident to her. However, such failure to immediately report the incident could not represent misconduct that might justify the applicant being suspended from duty or stood down as it was described.

[60] Having had the benefit of observing both the applicant and Ms Fifoot provide evidence as witnesses, I have, somewhat unfortunately, been compelled to conclude that in large part, Ms Fifoot was driven by bitterness and malice arising from the actions of her former partner, Mr O’Connor, when she implemented disproportionate disciplinary and other retaliatory action against the applicant in respect to the miracle box theft incident. The applicant was understandably embarrassed and humiliated when he was escorted from the bar area by police officers who questioned him about the miracle box theft incident. At this time, the actions of the employer had severely strained the employment relationship to the point that the necessary level of trust and confidence to maintain that relationship was severely damaged.

[61] The employment relationship barely survived the miracle box theft incident, and it travelled on shaky ground for a few more weeks. On Friday, 19 February, the applicant refused to move the kegs into the cool room as he had done so on many previous occasions, (much to the annoyance of other staff). However, although Ms Fifoot was aware 2 that it was common practice for the applicant not to move the kegs into the cool room, on this occasion she decided to use that issue as basis for suspending the applicant from duty, for a second time.

[62] As with the standing down of the applicant in connection with the miracle box theft incident, the prospect that a second stand down would be invoked because the applicant refused to move the kegs into the cool room, represented further disproportionate disciplinary action. In reality, the employment relationship could not endure a second, unwarranted, stand down, particularly so soon after the embarrassing and humiliating consequences of the miracle box theft incident.

[63] Consequently, despite whatever words may have been said by Ms Fifoot on 21 February, the second, unwarranted and unreasonable stand down of the applicant when properly construed in the context of the circumstances leading up to that event, represented the employer’s repudiation of the fundamental elements of trust and confidence that are necessary for the maintenance of the contract of employment. The applicant was entitled to treat the (second) stand down as conduct of the employer which repudiated any continuation of the employment relationship. These circumstances are akin to what is often described as constructive dismissal, although there is no formalised resignation provided by the employee.

[64] The position that the applicant found himself in on 21 February could be described as a constructive dismissal, where the stated position of the employer disingenuously attempted to continue the employment despite its actions to the contrary. In a practical sense, the applicant could have verbalised his position as one whereby he was entitled to reject the second unwarranted stand down, and treat the actions of the employer as dismissal, notwithstanding any confirmed, spoken suggestion to the contrary. These were circumstances whereby the dismissal was constructed by the actions of the employer, although there may have been no words which conveyed dismissal to the employee, and instead communication was made which was contrary to the intentions of the action taken.

[65] This aspect of the concept of constructive dismissal which does not necessarily manifest as a so-called forced resignation of an employee, is explained by the learned authors of the often quoted source book, Macken’s Law of Employment  3and the following passage from that text is instructive:

“Alternatively, the employee may, in certain circumstances, treat herself or himself as discharged from further performance of the contract, and leave the employment without giving the requisite notice. This course will be justified where the conduct of the employer amounts to a repudiation of the contract, that is, the employer’s breach or proposed breach is sufficiently serious to allow the employee to regard herself or himself as discharged from further performance of the contract. The term “constructive dismissal” is often used to describe this situation.”

[66] There is a considerable amount of Case Law authority on the question of constructive dismissal. One case which is often referred to is that of Mohazab v Dick Smith Electronics (No.2) 4(Mohazab) which succinctly summarised the concept of constructive dismissal as follows:

“However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.” 5

[67] In Mohazab, the Full Bench of the Court also referred to another authority in the case of Allison v Bega Valley Council  6 (Allison). The following extracts from the Decision in the Allison case is particularly helpful for application in the present circumstances:

“Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?”

and

“In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee...”

[68] In the present case, a careful analysis of the circumstances has established that it was the actions of the employer which operated to bring the employment to an end. Consequently, the applicant was dismissed in satisfaction of the terms of subsection 386 (1) (a) of the Act. That is, the termination of the applicant’s employment occurred on the employer’s initiative.

Unfair Dismissal

[69] As the applicant was a person who had been dismissed, consideration must logically proceed to that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

(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.

387 (a) - Valid reason for the dismissal related to capacity or conduct

The Miracle Box Theft Incident

[70] The dismissal of the applicant was directly connected with the miracle box theft incident of 30 January. There were also a number of other performance and conduct issues which were identified as complaints of the employer. Therefore all of these performance and conduct issues need to be examined so as to discern whether singularly or in combination, they may provide valid reason for the dismissal of the applicant.

[71] As was previously mentioned, the applicant’s role in the miracle box theft incident prompted unwarranted and malevolent responses from Ms Fifoot. The applicant could be rightly criticised for not immediately reporting the activities of Mr O’Connor to Ms Fifoot. Importantly however, there was no evidence that the applicant or other employees were issued with any specific instructions to report the presence of Mr O’Connor at the Hotel to Ms Fifoot.

[72] In the circumstances which involved the fragmentation of the personal and professional relationships between Mr O’Connor and Ms Fifoot, without some clear documentary announcement, there would be obvious difficulties for employees to fully understand the particular commercial and managerial arrangements that may have existed in respect to the on-going role of Mr O’Connor. Indeed, Ms Fifoot acknowledged that the applicant had no authority or capacity to stop Mr O’Connor taking the miracle box and other fittings. In this context, when viewed objectively, any failure on the part of the applicant to immediately report the activities of Mr O’Connor was conduct which could warrant, at best, some form of rebuke and warning. The applicant’s role in the miracle box theft incident could certainly not provide any legitimate basis to, inter alia, suspend the applicant from duty. Therefore, the role of the applicant in the miracle box theft incident could not represent valid reason for dismissal.

Refusal to Move the Kegs

[73] The issue which led directly to Ms Fifoot standing down the applicant for a second time involved the applicant’s refusal to move kegs into the cool room. As earlier mentioned, Ms Fifoot and other staff at the Hotel had been aware for some considerable period of time that the applicant regularly refused to move kegs into the cool room. Consequently, on 19 February 2016, the applicant’s refusal to move the kegs into the cool room was something that did not take either Ms Fifoot or other Hotel staff by surprise.

[74] Consequently, the refusal of the applicant to move the kegs into the cool room on 19 February 2016, was not misconduct of a nature or severity that could legitimately provide basis for suspension from duty. The issue regarding the applicant’s apparent inability to move the kegs into the cool room was something that should have been dealt with calmly and rationally. The employer could have legitimately requested that the applicant provide documentary medical proof of his apparent incapacity to move the kegs into the cool room. Ultimately, with proper warning, if the failure to perform this particular task was deemed by the employer to be an inherent requirement of the applicant’s position then, and only then, could the refusal to move the kegs into the cool room provide valid reason for dismissal.

Attendance for Work on Sunday, 21 February

[75] The employer’s letter of 22 February 2016 which outlined the basis for the proposed summary termination of the applicant’s employment 7 included complaint that the applicant attended for work on Sunday contrary to the stand down direction given to him on Saturday, 20 February. However, the purported stand down of the applicant on the Saturday involved the clumsy attempted ambush meeting when the applicant retreated into the public bar, so as to avoid any further communication from Ms Fifoot.

[76] Consequently, the stand down direction to the applicant was not properly communicated at any time. In particular, there was ample opportunity for the employer to construct a simple document confirming the stand down of the applicant, and to provide that document to him at some point in time prior to, or upon, his attendance for work on the Sunday. In reality, the actions of the applicant on the Saturday and Sunday were a reflection of the impending collapse of the severely strained employment relationship. The applicant had experienced the embarrassment associated with the earlier stand down and the public questioning conducted by the police. The applicant was entitled to object to the prospect that Ms Fifoot would suspend him from duty for a second time over an issue which involved the common practice of his refusal to move kegs into the cool room.

[77] Upon an objective, balanced evaluation of all of the evidence surrounding the conduct of the applicant and Ms Fifoot, the applicant’s actions, to the extent that he refused to accept the second stand down on Sunday, 21 February, did not constitute misconduct involving the defiance of a reasonable directive given by the employer. Instead, the applicant had legitimate basis to reject the employer’s actions which ultimately constituted the repudiation of the employment relationship.

Other Performance Inadequacies

[78] The applicant provided evidence that he did not sign certain betting agency documents and he did not formally report an incident which occurred on New Year’s Eve. These issues were part of a number of performance complaints that the employer may have legitimately used as basis for disciplinary action. A proper and balanced consideration of the various performance inadequacies of the applicant established that the employer had reasonable foundation for requiring an improvement in the applicant’s conduct and performance. However, although the applicant could not be described as an ideal or even a good worker, his shortcomings were matters that should have been the subject of performance management, and only after there was an established failure to meet reasonable standards, could these issues provide valid basis for dismissal.

No Valid Reason

[79] Following a careful and balanced consideration of the totality of the evidence that was presented in connection with the performance and conduct issues that may have represented basis for the dismissal of the applicant, those issues, could not, either singularly or in combination, provide valid reason for the dismissal of the applicant. Matters such as the applicant’s refusal to move kegs into the cool room, and his other identified performance inadequacies, should have been carefully and properly addressed as part of some measured and documented conduct and performance review. Only in the event that, following such review, the applicant was unable to rectify the reasonable requirements clearly established by the employer, could these issues represent valid reason for dismissal.

[80] Therefore, the dismissal of the applicant was not for valid reason. Consideration of the other elements contained in s. 387 of the Act must also be undertaken.

387 (b) - Notification of reason for dismissal

[81] The employer did not provide any written notification of the reason for the applicant's dismissal. Instead, it sought to disingenuously maintain the employment relationship despite acting in a manner that was designed to bring the employment to an end.

387 (c) - Opportunity to respond to any reason related to capacity or conduct

[82] The applicant was not provided with proper opportunity to respond to what may have been legitimate complaints about particular aspects of his conduct and performance.

387 (d) - Unreasonable refusal to allow a support person to assist

[83] The employer’s approach to the attempted meeting with the applicant on 20 February was designed to ensure that the applicant was not permitted to have a support person present during the serious meeting at which the applicant was to be advised of his second, unwarranted suspension from duty.

387 (e) - Warning about unsatisfactory performance

[84] This factor has no relevance to the particular circumstances that led to the dismissal of the applicant.

387 (f) - Size of enterprise likely to impact on procedures

[85] The Commission has had regard for the relatively small size of the employer’s operation and the informality that might ordinarily be associated with employment related matters in a small to medium size business.

387 (g) - Absence of management specialists or expertise likely to impact on procedures

[86] The employer did not have dedicated employee relations management specialists. There was evidence that the employer did consult with and take advice from its industry Association. In the circumstances, in respect of the determination that has been required, I have treated this factor as having little significance, such that it has been treated as being neutral.

387 (h) - Other relevant matters

[87] The applicant’s work performance conduct was clearly not faultless. However, the inadequacies of the applicant as an employee were something that should have been carefully addressed through some formal performance management process. Unfortunately, any proper approach to the applicant’s performance and conduct inadequacies was overshadowed by the employer’s emotive, unwarranted and unreasonable overreaction in circumstances whereby the applicant’s employment was drawn into the broader conflict between Ms Fifoot and Mr O’Connor.

Conclusion

[88] In this instance, the employer has asserted that it did not dismiss the applicant from employment. Consequently, the Commission has been required to firstly determine the jurisdictional objection raised by the employer.

[89] The Commission has undertaken a careful consideration of all of the evidence regarding the circumstances which led to the alleged termination of the employment on Sunday, 21 February 2016. This analysis has led to the conclusion that it was the actions of the employer that led to the termination of the applicant’s employment at that time. Although the applicant did not actually resign from employment, he was entitled to treat the actions of the employer as repudiation of the continuation of the employment. The actions of the employer established the constructive dismissal of the applicant.

[90] Upon further analysis, although the applicant’s employment included various conduct and performance deficiencies, these were not matters which singularly or in combination provided valid reason for dismissal.

[91] The actions that the employer adopted for dealing with the unfortunate circumstances that arose from the miracle box theft incident were severely flawed. The applicant was subjected to unwarranted, unjust and unreasonable disciplinary action driven by the emotion associated with a relationship conflict about which the applicant had little knowledge, and no involvement. Regrettably, the applicant’s employment essentially became what might be described as collateral damage arising from the employer’s relationship conflict.

[92] The dismissal of the applicant was harsh, unjust and unreasonable. Consequently, the application for unfair dismissal remedy has met the legislative requirements and it is granted.

Remedy

[93] The applicant has not sought reinstatement as remedy for his unfair dismissal. Instead, he has sought remedy in the form of payment of an amount of monetary compensation.

[94] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.

[95] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that have been established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket 8 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 9.

[96] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.

[97] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter, including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.

[98] There was no evidence, as opposed to submissions, that an Order of compensation would impact on the viability of the employer’s enterprise.

[99] The applicant had approximately three years and five months service with the employer. The applicant would have been likely to have received remuneration of approximately $773.00 per week if he had not been dismissed. There was some prospect that the employment of the applicant may not have endured for a considerable period. In particular, I have noted that conduct and performance issues including the applicant’s apparent inability to perform the particular task of moving the kegs into the cool room, may have ultimately led to his dismissal.

[100] Following the dismissal, the applicant made efforts to mitigate the loss suffered because of the dismissal. I have noted the submissions of the employer regarding the alleged inadequacy of the applicant’s attempts to find alternative employment and mitigate his loss. However, on balance, particularly given the circumstances which involve a local country community, I have not been persuaded to significantly reduce the quantum of any compensation because of any established failure of the applicant to take reasonable steps to find alternative employment.

[101] Thirdly, in this instance there was no established misconduct of the applicant which contributed to the employer's decision to dismiss.

[102] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[103] In respect to the determination of the quantum of compensation to be provided to the applicant, I have had regard for the loss of non-transferable employment credits associated with employment that was approaching, in total, six years’ duration.

[104] Consequently, for the reasons outlined above, I have decided that an amount approximating with 24 weeks remuneration should be Ordered as compensation to the applicant. That amount is $18,552.00. Accordingly, separate Orders [PR586503] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Mr G Casey, solicitor from Garden & Montgomerie appeared for the applicant.

Mr P Ryan from the Australian Hotels Association (NSW) appeared for the employer.

Hearing details:

2016.

Orange:

July 19, 20.

 1 Jones v Dunkel (1959) 101 CLR 298.

 2   Transcript @ PN1192.

 3   Macken’s Law of Employment , [Sappideen et al,] Seventh edition, Lawbook Co. @ [9.20] page 346.

 4 Mohazab v Dick Smith Electronics Pty Ltd (No.2), (1995) Industrial Relations Court of Australia, 62IR 200.

 5   Ibid @ page 207.

 6 Allison v Bega Valley Council, (1995) Full Commission of the Industrial Relations Commission of NSW, 63IR 68.

 7   Exhibit 7 – Annexure “Q”.

 8 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.

 9   Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.

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<Price code C, PR586502>