Derek Howe v Bethell Flooring Pty Ltd
[2018] FWC 199
•24 JANUARY 2018
| [2018] FWC 199 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Derek Howe
v
Bethell Flooring Pty Ltd
(U2017/8856)
DEPUTY PRESIDENT ASBURY | BRISBANE, 24 JANUARY 2018 |
Application for an unfair dismissal remedy – Valid reason for dismissal – Applicant not afforded procedural fairness – Dismissal found to be unfair – Reinstatement not appropriate – Compensation awarded.
BACKGROUND
[1] On 16 August 2017, Mr Derek Howe applied to the Fair Work Commission (the Commission) for a remedy under s. 394 of the Fair Work Act 2009 (the Act) on the basis that he alleges his dismissal by Bethell Flooring Pty Ltd (Bethell Flooring/the Company) was unfair. Mr Howe was employed from 16 November 2016 as a full-time Floor Layer Assistant until his dismissal on 4 August 2017. Bethell Flooring states that Mr Howe was dismissed for poor work performance and for being unreliable due to lateness, regular absences and absenteeism and contends that Mr Howe’s dismissal was not unfair.
[2] The matter was not resolved in conciliation and was listed for hearing. Directions were issued requiring the parties to file and serve outlines of submissions and statements from witnesses to be relied on at hearing. Mr Howe was initially represented by Mr Gary Pinchen of A Whole New Approach who withdrew and filed a Form 54 Notice of Representative Ceasing to Act on 22 September 2017. The Applicant did not file his submissions as directed by 16 October 2017 and an extension was granted to 24 October.
[3] At the Hearing on 20 November 2017 Mr Howe conducted his own case with assistance from his partner Ms McKinder who also gave evidence on his behalf. Bethell Flooring was represented by Mr Michael Wren, General Manager. Evidence on behalf of Bethell Flooring was given by Mr Wren, Mr Shane Bethell (Managing Director) and Mr Jesse Jurse (Senior Floor Layer).
[4] Mr Howe’s application was filed within the time required in s.394(2) of the Act. It is not in dispute that Mr Howe is a person protected from unfair dismissal as defined in s.382 of the Act. Bethell Flooring is not a small business and the Small Business Fair Dismissal Code is not relevant to this matter. The dismissal was not a case of genuine redundancy.
LEGISLATION
[5] In deciding whether a dismissal was unfair on the grounds that it was harsh, unjust or unreasonable, the Commission is required to consider the criteria in s.387 of the Act, as follows:
(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.”
[6] The employer bears the onus of establishing that there was a valid reason for a dismissal.1 A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”2 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts,3 and the validity is judged by reference to the Tribunal’s assessment of the factual circumstances as to what the employee is capable of doing or has done.4 The Commission is not limited to the reason given by the employer in considering whether there was a valid reason for the dismissal. 5 Misconduct justifying dismissal is conduct so serious that it goes to the heart of the employment relationship6 or evinces an intention that the employee no longer intends to be bound by the employment contract.7
[7] Where the reason for the dismissal is misconduct, the Commission must be objectively satisfied that the misconduct occurred. However, a minor failing on the part of an employee will not constitute a valid reason for dismissal simply because it is proven to have occurred. 8In relation to the concept of valid reason for dismissal, Moore J in Edwards v Giudice9 observed that:
“The reason would be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or it did occur but did not justify termination. An employee may concede in arbitration that the conduct took place because, for example, it involved a trivial misdemeanour. In those circumstances the employee may elect to contest the termination in the arbitration on the basis that the conduct took place but it did not provide a valid reason and perhaps by relying on the other grounds in [the section].” 10
[8] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:
Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;
Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or
Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.11
SUBMISSIONS AND EVIDENCE
[9] The reason for Mr Howe’s dismissal was set out in a letter under the signature of Mr Randall Hocking, Operations Manager, dated 4 August 2017, in the following terms:
“Please be advised that due to you high number of days off over the past couple of months it is making you highly unreliable, which is now causing a burden on financial and operational requirements of the business which is also creating issues with our clients. Therefore we have no choice but to terminate your employment with Bethell Flooring effective immediately…” 12
[10] According to Mr Wren, after the three month probation period had elapsed, it was noted that Mr Howe’s performance and work ethic declined. There were also incidents of lateness and issues with Mr Howe’s attitude. Mr Howe maintained that the reason for his dismissal provided by his employer was not a valid reason, and was harsh, unjust or unreasonable.
[11] Mr Howe said that on completion of his probationary period, he was given a pay increase from $23.00 to $25.00 per hour. However, he began to develop symptoms including a painful rash and respiratory issues, such as asthma shortly after that. Mr Howe tendered his Patient Medical History between 23 January and 23 October 2017 which includes several entries referring to respiratory and dermatological complaints. Mr Howe asserted that for all occasions where he took leave while experiencing these symptoms, he provided medical certificates to his employer.
[12] Mr Wren tendered a print out of Mr Howe’s sick leave absences indicating that he took 12 sick days between 5 December 2016 and 4 August 2017. The document also indicates that Mr Howe used RDOs to cover periods of sick leave. There are also 11 additional RDO and annual leave days between 22 December 2016 and 2 August 2017. A number of these days were used to cover incidents such as Mr Howe’s car breaking down and bereavements. Mr Wren said that the issue was that Mr Howe would apply to take RDOs and annual leave after the event and used those days to cover absences for other reasons including that he had utilised all of his accrued sick leave. According to Mr Wren two days of annual leave were granted on 3 and 4 April 2017 when Mr Howe advised that his car had broken down. These days were granted after the car had broken down and with no prior notice from Mr Howe.
[13] The evidence establishes that in addition to the days off in the print out tendered by Mr Wren, Mr Howe had an additional period of pre-approved leave of one week on or around 5 July 2017. Mr Howe’s evidence was that this leave was for the purpose of travelling to New Zealand to attend an “unveiling” ceremony one year after the death of his father. Mr Wren said that on his return to work following the period of pre-approved leave, Mr Howe took a day off each week for the following fortnight. According to Mr Wren, issues relating to Mr Howe’s attendance came to a head in late July 2017 when his absences began to seriously affect the ability of the Company to perform its contracts and resulted in delays and complaints from its clients. According to Mr Wren, Bethell Flooring was forced to employ labour hire workers to remedy these complaints.
[14] The evidence about the leave taken by Mr Howe from late July can be summarised as follows. Mr Howe took leave on Monday 31 July to attend the funeral of a cousin in Sydney. Mr Howe failed to report for work on Tuesday 1 August. Mr Bethell said that he telephoned Mr Howe on 1 August 2017 to find out why he had not reported to work and was told that Mr Howe had slept in. As Mr Howe lived more than 1.5 hours drive from the site at which he was required to work on that date, Mr Bethell told him not to bother coming to work. Mr Bethell said that he later found out that Mr Howe did not report for work because he was hungover. Mr Howe also did not attend work on Wednesday 2 August 2017. Mr Wren said that it was his understanding that Mr Howe had started to drive to work and had been ill and needed to turn around and drive home. Mr Wren was not aware whether Mr Howe contacted the Company to advise that he would be absent on this day. Mr Howe had two more days off on Thursday 3 and Friday 4 August 2017 – and this caused a further financial burden to Bethell Flooring resulting in the decision being made to dismiss Mr Howe. The dismissal was effected by letter dated Friday 4 August 2017.
[15] In his oral evidence, Mr Howe elaborated on the reasons for his absences in July. Mr Howe said that after the unveiling ceremony for his late father in New Zealand, he took a sick day. The following week Mr Howe had a day off to replace tyres on his vehicle, which he said were not roadworthy in their current state. The project site that Mr Howe was then working on was in Kilcoy and Mr Howe said that he needed to repair his vehicle to attend work. Mr Howe said that he did not realise that the tyres were worn until his return from New Zealand. Mr Howe agreed under cross-examination that he had the use of a Company vehicle when his car was out of service. 13
[16] In late July, Mr Howe’s Aunt in Sydney notified him that his cousin had passed away. Mr Howe took a day off on Monday 31 July 2017 to attend the funeral in Sydney and flew back late that evening. Mr Howe said that he was fatigued following the funeral weekend and slept in the following day (Tuesday 1 August 2017). Mr Howe denied having a hangover as alleged by the witnesses for Bethell Flooring.
[17] Under cross-examination by Mr Wren, Mr Howe said that he consumed alcohol on the evening of Sunday 30 July but not on the evening of Monday 31 July. When asked by Mr Wren about sleeping in on Tuesday 1 August 2017, Mr Howe said: “You guys knew I was flying back on Monday night” 14. Mr Howe also said that on Wednesday 2 August he was driving to work when he felt sick and had to turn around. Mr Howe said that he had to ring his son to come and pick him up because he could not drive any further. Mr Howe maintained that he telephoned Mr Hocking at the site to advise that he would not be at work that day. On Thursday 3 August 2017, Mr Howe said that he was suffering from influenza requiring him to take leave from 3 to 4 August inclusive.
[18] Mr Howe’s partner Ms McKinder gave evidence to the effect that she spoke to the Operations Manager Mr Randall Hocking on 3 August 2017, and advised that Mr Howe was very sick and could not get out of bed, and that they were waiting for a visit from a home doctor. After the home doctor visited, Ms McKinder attempted to telephone Mr Hocking but got no response to her call. Ms McKinder then sent a text message to Mr Hocking attaching a copy of a medical certificate, stating that Mr Howe was suffering from a medical condition and would be unfit for duty from 3 to 4 August 2017. 15 The images of the message and medical certificate appended to Ms McKinder’s witness statement indicate that they were sent at 7.47 pm and 7.49 pm respectively.
[19] Under cross-examination, Ms McKinder agreed that the conversation with Mr Hocking occurred when she answered Mr Howe’s mobile telephone at some time between 4.00 pm and 7.00 pm on 3 August 2017. Mr Hocking told Ms McKinder that he wanted to know what was wrong with Mr Howe. In response to a question as to whether there was any communication with the Company on the morning of 3 August 2017, Ms McKinder said: “Not on my behalf, no.” 16 Ms McKinder also said that she had no idea how many times Mr Hocking tried to call as she had come home from work and found Mr Howe sick in bed. 17
[20] Mr Howe agreed that on a number of occasions when he was sick he had used RDOs to cover the absence as he had insufficient accumulated sick leave and said that he might have asked for this to occur. There was also an incident at Rocklea where Mr Howe reported to work late. Mr Howe said that he was unfairly reprimanded in front of the rest of the team. 18 Mr Howe said that he was late because he had been waiting outside the worksite for a colleague who was lost. Under cross-examination, Mr Howe was asked whether anyone had been on site when he arrived, and if not, how the other employees managed to arrive after Mr Howe without him noticing. Mr Howe said that there was another entry to the site and he was on the phone speaking with a workmate. Mr Howe also said that he was five to ten minutes late on that occasion.
[21] In relation to Mr Howe’s work performance, there was evidence about an issue on a project at the Mater Hospital on 22 May 2017, where it was alleged that Mr Howe failed to report that a drum of product was contaminated resulting in the surface of a floor failing to cure. In relation to the incident at the Mater Hospital, Mr Howe said that he had completed three-quarters of the floor. The team were to use an open drum of resin which was partially empty, and there was no indication as to whether the remainder was contaminated. He then used the remainder of the drum for the final quarter of the floor. The Applicant said he asked to speak to the foreman, Mr Jurse, who ‘went off the handle’ at Mr Howe. Mr Hocking arrived and took a statement, the drum was taken outside with rubbish and was later contaminated by rainwater and as a result, was never tested for contamination.
[22] Mr Howe said that he believed that he had followed Company protocol and instructions including that he should use up leftover material. In cross-examination, Mr Howe conceded that either he or another workmate had viewed the drums, and that between the two of them, the decision was made to use the open drum. 19 It was then established that the last part of the floor was ‘reactive because of that one mix’.20 Mr Howe also said that when he opened the drum the material looked thicker than usual, but that he and the other employee he was working with decided to “run with it”.21
[23] Mr Howe said that he advised Mr Wren in the interview before he commenced employment, that he was inexperienced with epoxy. Mr Howe tendered his CV to support his assertion. The CV lists Mr Howe’s experience at approximately six flooring businesses, but does not refer to epoxy. 22 In his oral evidence, Mr Howe said that he is experienced with trowel handling, and polyurethane flooring, which was a varnish and had a similar process of application to the epoxy, but he had never worked with epoxy.23
[24] At the hearing, Mr Howe also described an incident which he contended caused him to gain a perception that his skills were not valued by Bethell Flooring and that he would not be given an opportunity to prove himself. Mr Howe said that he was informed by Mr Jurse that a meeting had been conducted between Mr Jurse and Mr Wren where the issue of who would fill in for Mr Jurse for a period that he was to be absent from work was discussed. According to Mr Howe, Mr Jurse nominated him to step up and replace the foreman during his absence. Mr Jurse reported to Mr Howe that Mr Wren responded to the suggestion of Mr Howe acting as foreman, by saying: “Like hell. The day he steps up will be the day he walks out the door”. Mr Howe said that he believed that there was no way for him to prove his skills by acting as a leading hand or doing trowel work.
[25] Mr Howe said that as a result of being informed about this comment by Mr Jurse, he made a complaint of bullying against Mr Wren, by email dated 16 July 2017, stating:
“Hi Michael,
I am writing this letter to inform you of my disappointment, in your behaviour towards myself.
On different occasions you have given me reason to believe my job is in jeopardy, leaving me feeling anxious and stressed. I feel your constant criticism, harassment and accusations are totally unjust. I believe this to be bullying/harassment.
I would like to come to a resolution, obviously there is an issue that needs to be addressed.
I have been advised to also forward this letter on to Shane Bethell.
Respectfully
Derek Howe”
[26] Mr Wren responded to the email on 17 July 2017 stating:
“Good evening Derek,
I would like to acknowledge receipt of the below correspondence you have sent to myself and Shane Bethell.
As you can appreciate, the nature of the correspondence you have sent to me is quite concerning especially as you made several vexatious allegations against me that I believe are baseless and defaming towards me professionally.
You have stated in your letter you would like to “come to a resolution” and believe “there is an issue that needs to be addressed.” Based on this, I formally request for you to place matters in writing to me with examples of when and where this bullying/ harassment has taken place. By undertaking this, it ensures an open and transparent process for both parties so we can all be on the same page.
Once you send through your formal response in writing to me, I will review and come back to you to suggest a time we can meet to discuss your grievances.
Please note; Shane is fully aware of this matter and has been copied into this formal correspondence to ensure he is fully aware of the matters raised.
It is important to me that this matter is dealt with in a swift and professional manner, so it can be resolved for both parties in order to move forward.
I look forward to receiving your correspondence so we can begin this process.”
[27] In cross examination, Mr Howe elaborated on his allegations of bullying. An example given by Mr Howe was an exchange he had with Mr Wren on the occasion that he was ten minutes late after waiting at the entrance of the site at Rocklea for another employee who was lost. Mr Howe was asked how Mr Wren telling him that he was late could be construed as bullying, to which the Applicant said that it had been in front of others, and that Mr Wren had been sarcastic and talking about his work ethic. 24 The same day, Mr Wren asked the Applicant why he couldn’t clean the floor more quickly. 25 Mr Howe also agreed that after these incidents he came to Mr Wren and told him that he was not in a good place that day, because of an incident involving the daughter of a friend. Mr Howe said that he was apologising because he might look a bit sour that day.26
[28] In cross-examination, Mr Howe also said that he did not respond to the letter from Mr Wren because he was hoping to have a conversation about the bullying issue. 27 In response to questioning from me, the Applicant said that he didn’t reply to the email even to indicate his desire for a discussion because he had said that to Mr Bethell shortly after receiving the email from Mr Wren.
[29] Mr Bethell agreed that he had a discussion about the bullying allegation with Mr Howe at a Kilcoy Project in late July and said that he advised Mr Howe that the proper course of action in respect of the complaint was to arrange a discussion with Mr Wren. Mr Howe did not do this. Mr Bethell said that he also emphasised the importance of the project they were undertaking and the necessity that everyone carry out their fair share of the workload.
[30] Mr Jurse’s evidence was that he had worked with Mr Howe on a project at Nestlé. Prior to the commencement of a 14 week project – the project that Mr Howe was working on when his employment was terminated – Mr Jurse had a discussion with Mr Wren about which employees should be given an opportunity to step up to the role of trowel hand. Mr Jurse said that during that discussion he told Mr Wren that Mr Howe had worked well on the Nestle project and suggested he be given that opportunity. Mr Wren responded by stating that Mr Howe would not be given an opportunity to step up until he started coming to work regularly and putting in 100% effort. Mr Jurse said that he never discussed Mr Howe being a supervisor as Mr Howe would not be capable of filling this role.
[31] Mr Jurse also said that he had a discussion with Mr Howe during the 14 week project in which he told Mr Howe that if he did not start showing up for work regularly, he would be dismissed. Mr Jurse confirmed that he also told Mr Howe that Mr Wren had stated that if Mr Howe did not start turning up for work he would not be stepping up. Mr Jurse also said that Mr Howe had requested that he act as a witness in relation to Mr Howe’s bullying complaint and that Mr Howe had asked Mr Jurse to tell lies about this matter. Under cross examination and in response to questions from the Commission, Mr Jurse said that Mr Howe emailed Mr Wren and Mr Bethell demanding a meeting in relation to his bullying allegation and stating that Mr Jurse would also be attending the meeting. Mr Jurse said that Mr Howe did this without advising Mr Jurse or requesting that he attend the meeting.
[32] Mr Jurse said that Mr Howe then approached him at work and demanded that he attend a meeting in Brisbane and requesting that Mr Jurse be a witness about bullying that Mr Howe had been subjected to. Mr Jurse said that he viewed this as being asked to lie as he had not witnessed any bullying. Mr Jurse said that in his view, Mr Wren’s comments that Mr Howe needed to come to work and put in effort or he would be out the door, did not constitute bullying.
[33] There was evidence that Mr Howe received a number of written warnings. A document entitled “Non Conformance Report” 28 (the Report) dated 22 May 2017 was tendered at the hearing.29 The Report is addressed to a person whose name has been crossed out and Mr Howe’s name has been written on the Report. The Report is signed by Mr Hocking and sets out two performance issues in relation to the floor at the Mater Hospital including not reporting faulty product to staff or management straight away.
[34] In his application for an unfair dismissal remedy, Mr Howe said that he was issued with a written warning in relation to this matter, addressed to another employee and that the warning was “hurriedly” changed to his name. In response to questions from the Commission Mr Howe said that the Report was addressed to him but that his name was not spelled correctly. Mr Howe agreed that there was no doubt that the Report was directed to him, but said he refused to sign it because it contained a mistake and was a legal document. 30 Mr Howe also said that he received a “note” about the occasion that he arrived late at the Rocklea site.31 The latter document was not tendered by either party.
[35] Mr Wren also said that Mr Howe’s written complaint of bullying resulted from discussions he had with Mr Howe in April 2017 about his work performance and lateness, and in July 2017 about his work performance.
CONSIDERATION
Section 387(a) – whether there was a valid reason for the dismissal related to the person’s capacity or conduct
[36] I am satisfied that there was a valid reason for the dismissal of Mr Howe. It is apparent from the evidence that Mr Howe had a significant amount of time off. While much of the time off was due to illness for which Mr Howe had medical certificates, this was not the only issue. However, there were a number of days when Mr Howe was absent from work where no reasonable explanation was provided. A number of days that Mr Howe took off were for the purpose of repairing his car. Mr Howe agreed that if his car was in need of repairs there was a Company vehicle available for him to use. He provided no explanation as to why he did not make an alternative arrangement to use the Company vehicle and repair his car in his own time.
[37] Mr Howe’s explanation for his absences from 1 to 4 August was also far from satisfactory. Mr Howe was granted leave on Monday 31 July to attend a funeral. Mr Howe was expected to return to work on Tuesday 1 August 2017 and failed to do so. Mr Howe’s explanation – that he got home late on 31 July after a full weekend – was not particularly convincing and evidenced a lack of concern about his obligations to attend work. Further, Mr Howe’s response under cross-examination to the effect that Mr Wren knew he was flying back late on the night of Monday 31 July 2017 is not to the point. Mr Howe was expected at work on Tuesday 1 August 2017 and failed to attend. Mr Howe also failed to notify that he would be absent.
[38] Mr Howe’s conduct for the period 3 and 4 August 2017 was also not reasonable. Mr Howe asserted that he contacted Mr Hocking to advise that he became ill while driving to work. The print out tendered by Mr Wren indicates that Mr Howe was on annual leave on 2 August. Mr Wren did not provide evidence about whether or not Mr Howe advised of his absence on 2 August other than to state that Mr Hocking did not report to him that Mr Howe had made contact and advised that he would not be at work that day. I am not satisfied that Mr Howe failed to notify his absence on 2 August.
[39] I accept that Mr Howe had a medical certificate to cover his absences on 3 and 4 August 2017. However, it is apparent from the evidence that Mr Howe did not advise the Company of the fact that he was going to be absent on that date. Bethell Flooring was only advised of Mr Howe’s absence on 3 August 2017 because Ms McKinder answered his telephone late in the afternoon. Ms McKinder said that she was not aware that Mr Howe was at home until she returned from work. Mr Howe provided no evidence about why he did not notify Bethell Flooring that he was ill and would also be absent on 3 August 2017 and possibly 4 August 2017 depending on what the doctor determined.
[40] I accept that Mr Howe’s failure on a number of occasions to advise the Company in a timely manner of absences made it reasonable for management of Bethell Flooring to conclude that Mr Howe was an unreliable employee. I also accept that Mr Howe’s absenteeism and unreliability caused a significant impact on the ability of Bethell Flooring to manage its workload. The cumulative effect of these issues was a valid reason for dismissal. Further I accept that there were issues with Mr Howe’s work performance including reporting late to work and the error with the material used at the Mater Hospital, that constituted valid reasons for dismissal, when considered in conjunction with Mr Howe’s attendance record.
Section 387(b) – whether the person was notified of the reason for dismissal
[41] I am satisfied that Mr Howe was notified of the reason for his dismissal. Mr Howe was provided with a termination letter setting out that reason.
Section 387(c) – whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[42] While there is evidence of attendance and work performance being raised with Mr Howe when particular incidents occurred, it is also the case that there was no discussion in which any manager of Bethell Flooring sat down with Mr Howe and outlined the issues with his capacity or conduct so that he could respond. Essentially Mr Howe was dismissed by letter while he was absent on sick leave and in circumstances where notwithstanding Mr Howe’s failure to advise of his absence in a timely manner, Mr Howe had a medical certificate to cover the absence which had been provided to the employer. Accordingly, I am not satisfied that an opportunity to respond was given to Mr Howe. I am also of the view that the failure to put the allegations to Mr Howe so that he could respond denied him an opportunity to improve his conduct and work performance.
[43] Further, I have had regard to the fact that Mr Howe made an allegation of bullying. While I do not accept that bullying occurred, a discussion about this would have provided an opportunity for concerns about Mr Howe’s capacity or conduct to be put to him and for him to be informed that if these matters were not addressed dismissal would result.
[44] A denial of procedural fairness is a significant matter in relation to whether a dismissal was unfair. Failure to afford an employee procedural fairness denies the employee an opportunity to offer an explanation for any relevant conduct or to advise the employer of mitigating circumstances. Whether such an opportunity would have changed the outcome may be relevant to fairness but a failure to afford procedural fairness is a matter that should be given proper weight.
Section 387(d) – whether there was any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
[45] There were no discussions relating to the dismissal and no refusal, unreasonable or otherwise, of a support person.
Section 387(e) – if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[46] I am satisfied that Mr Howe was warned about the unsatisfactory performance to which his dismissal was related. In particular, I am satisfied that Mr Howe received oral warnings from Mr Wren and Mr Jurse about his attendance and work performance. I found both Mr Wren and Mr Jurse to be credible witnesses. In particular I accept that Mr Jurse told Mr Howe that he needed to come to work and put in effort or he would be dismissed.
[47] I am also satisfied that Mr Howe received a written warning about his work performance and the error with the product used at the Mater Hospital site. Mr Howe’s refusal to sign the warning indicating his acceptance, on the basis that his name was spelled incorrectly, does not alter the fact that the warning was issued, and that Mr Howe understood that it was directed to him.
[48] That Mr Howe perceived the warnings he received as bullying, does not change the fact that warnings were given. It is also apparent from Mr Howe’s own evidence that he was aware that managers of Bethell Flooring did not have a favourable view of his conduct and work performance.
Section 387(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
[49] Bethell Flooring states in its response to the application that it had 21 employees at the time that Mr Howe was dismissed. Even allowing for some inaccuracies surrounding this number the Company is not a large employer. It is also clear from the evidence of Mr Bethell and Mr Wren that the size of the enterprise impacted adversely on the procedures followed by the Company in effecting the dismissal and this is a matter I have taken into account in balancing the factors in s.387 of the Act.
Section 387(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
[50] Bethell Flooring does not have dedicated human resource management specialists and I am satisfied that this factor also impacted on the procedures followed in effecting the dismissal. This is a further factor I have taken into account in balancing the factors in s. 387.
Section 387(h) – any other matters that the FWC considers relevant
[51] In relation to other relevant matters, I have had regard to the fact that Mr Howe is a New Zealand citizen and was not eligible to receive unemployment benefits. I accept that this added an additional level to the hardship Mr Howe faced as a result of his dismissal.
Conclusion in relation to whether Mr Howe’s dismissal was unfair
[52] On balance I have concluded that Mr Howe’s dismissal was unfair. While there was a valid reason for the dismissal, the reason was based on a series of conduct issues. This is not a case where Mr Howe has engaged in conduct that warranted immediate dismissal such that an opportunity to respond could not have changed the outcome. Mr Howe was not afforded procedural fairness in that he was not given an opportunity to respond to the allegations about his conduct.
[53] As such, Mr Howe was denied an opportunity to address the concerns. Such an opportunity is fundamental to the concept of procedural fairness and the failure to afford it in circumstances where there are a series of issues that Mr Howe might have been able to address and rectify, causes me to conclude that the dismissal was unfair. This is so notwithstanding the probability that Mr Howe would not have been able to address the issues to the satisfaction of Mr Bethell or Mr Wren.
REMEDY
[54] Given that I have found that Mr Howe’s dismissal was unfair, it is necessary to consider the question of remedy. As required by s. 390 of the Act, I am satisfied that Mr Howe was protected from unfair dismissal and that he was unfairly dismissed. I am also of the view that Mr Howe should have a remedy for his unfair dismissal. Mr Howe did not seek reinstatement. In my view reinstatement is not appropriate. It is clear that the relationship between Mr Howe and managers of Bethell Flooring was fractured at the point Mr Howe was dismissed and the present hearing has only worsened that situation. I have made the necessary findings that are prerequisite to awarding compensation. In relation to the assessment of compensation, s. 392 of the Act provides as follows:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
[55] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.32 That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;33 Jetstar Airways Pty Ltd v Neeteson-Lemkes34 and McCulloch v Calvary Health Care (McCulloch).35
[56] I turn now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to Mr Howe for his unfair dismissal.
The effect of the order on the viability of Bethell Flooring – s. 392(2)(a)
[57] Mr Wren stated that the Company is in a poor financial position, and that any award of compensation to Mr Howe would harm the Company. Mr Wren also sought to be heard in relation to this matter in the event that I considered that an award of compensation should be made to Mr Howe.
Length of Mr Howe’s service – s. 392(2)(b)
[58] Mr Howe was employed from 16 November 2016 until 4 August 2017 – a period of less than twelve months. This is a relatively short period of service.
Remuneration Mr Howe would have or would likely have received – s. 392(2)(c)
[59] This consideration requires an assessment of how long Mr Howe would likely have remained in employment but for his dismissal, and is necessarily speculative. Mr Howe contends that he would have been employed for at least a further period of six weeks. Mr Wren for Bethell Flooring contends that Mr Howe would not have been employed past the one week period covered by the payment in lieu of notice that Mr Howe received on termination of his employment.
[60] I have concluded that but for his dismissal, Mr Howe would only have remained in employment for a further period of one week. I base this conclusion on the fact that Mr Howe did not provide a satisfactory explanation for his failure to attend work for all of the days he was required to attend in the week of 31 July 2017 or for his failure to promptly advise of his absence. Assuming that Mr Howe was given an opportunity to explain his lack of attendance and his failure to notify that he would not be at work prior to his dismissal, and that he provided an explanation consistent with his evidence to the Commission, it would not have been unfair for Bethell Flooring to reject his explanation and dismiss him.
[61] The reasons for Mr Howe’s dismissal do not justify summary dismissal. It would have required no more than a period of one week for a meeting to be arranged with Mr Howe at which an opportunity to explain his conduct could have been given. Mr Howe’s allegations of bullying could also have been addressed in such a meeting. However in my view those allegations are without substance. The comments made by Mr Wren to Mr Jurse (whose evidence I accept) were reasonable in the circumstances of Mr Howe’s failure to attend work and to notify of absences. After such a meeting, and assuming Mr Howe had provided the same unsatisfactory response to the allegations as he did in his evidence to the Commission, it would have been fair for Bethell Flooring to dismiss Mr Howe and to pay him a week’s wages in lieu of notice. Accordingly, I find that but for his dismissal Mr Howe would have been likely to receive an additional amount of one week’s wages.
Mr Howe’s efforts to mitigate loss – s. 392(2)(d)
[62] I am satisfied that Mr Howe has made reasonable attempts to mitigate his loss by seeking alternative employment. Mr Howe states that he has encountered additional difficulty as a result of the fact that he was dismissed and that he has told prospective employers that he is pursuing an unfair dismissal application in the Commission. While Mr Howe’s honesty about this is commendable, his evidence is that prospective employers have been discouraged from making offers of employment to him. This is unsurprising. In those circumstances, and in consideration of the amount of compensation I have determined in principle to award, it is not appropriate to apply a discount for failure to take reasonable steps to mitigate loss.
The amount of any remuneration earned since dismissal – s. 392(2)(e)
[63] As previously noted, Mr Howe is not entitled to unemployment benefits on the basis that he is a New Zealand citizen. Mr Howe had not obtained alternative employment when this matter was heard. He has no remuneration from other sources.
The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)
[64] In light of the amount of compensation I have determined in principle to award, it is not necessary to make an adjustment for this factor.
Any other matter that the FWC considers relevant – s. 392(2)(g)
[65] I have considered the fact that Mr Howe was paid an amount of one week’s wages in lieu of notice.
Deduction for misconduct – s. 392(3)
The dismissal was not for misconduct such that a deduction should be made from any award of compensation. Further, in light of the amount of compensation that I have decided in principle to award, I would not make such deduction in any event.
Compensation cap – s. 392(5)
[66] Section 392(5) imposes a legislative “cap” on the amount of compensation the Commission can order. The amount of compensation I have decided in principle to award is less than the compensation cap and it is not necessary to apply it.
Conclusion in relation to compensation
[67] After considering the matters required by s. 392 of the Act, I have decided in principle to award Mr Howe the amount of $950.00, being one week’s ordinary wages plus an amount of $90.25 in superannuation contributions, as compensation for his unfair dismissal.
[68] If Bethell Flooring wishes to be further heard in relation to the effect of the amount of compensation that I have determined in principle to award, or the calculation of the amount, advice should be provided in writing to [email protected] with a copy to Mr Howe by 4.00 pm on 31 January 2018, and the matter will be listed for further hearing. If such further hearing is sought by the Company, attendance by its representatives will be required to establish that the effect on the Company of the amount of compensation that I have determined in principle to award will be so significant that it will outweigh the other factors relevant to my assessment.
[69] Bethell Flooring should note that the effect of an order for compensation on an employer is one of a number of matters that the Commission is required to consider. Compelling evidence of the detrimental effect on the Company of the compensation amount I have determined in principle to award will be required, in order for the effect to outweigh the other relevant considerations. In particular Bethell Flooring should note that the quantum of the amount concerned and the fact that the Company will have three weeks from the date of this decision to facilitate payment of the amount, will be relevant.
[70] If no advice is received by 4.00 pm on 31 January 2018 from Bethell Flooring that it wishes to be further heard in relation to the compensation amount, an Order will be issued requiring the Company to pay $950 to be taxed according to law and a further amount of $90.25 as superannuation contributions to Mr Howe by 4.00 pm on 14 February 2018.
DEPUTY PRESIDENT
Appearances:
Mr D. Howe appeared on his own behalf.
Mr M. Wren appeared on behalf of the Respondent.
Hearing details:
Brisbane.
20 November.
2017.
1 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204.
2 Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
3 Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.
4 Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.
5 Heran Building Group Pty Ltd v Anneveldt [2013] FWCFB 4744 at [15] per Acton, SDP, Sams DP and Hampton C citing MM Cables (a Division of Metal Manufacturers Ltd v Zammit AIRC (FB) S8106 17 July 2000.
6 Culpeper v Intercontinental Ship Management (2004) 134 IR 243; [2004] AIRC 261; Print RP 944547.
7 North v Television Corporation Ltd (1976) 11 ALR 599.
8 Bista v Glad Group Pty Ltd [2016] FWC 3009.
9 (1999) 94 FCR 561.
10 Ibid at 572.
11 Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.
12 Exhibit 1 Annexure.
13 Transcript 20 November 2017 PN227 – 237.
14 Transcript 20 November 2017 PN466
15 Exhibit 3 including Annexure.
16 Transcript 20 November 2017 PN584
17 Transcript 20 November 2017 PN576-584 and PN597-597.
18 Transcript PN 135.
19 Transcript PN 276 and PN 381.
20 Transcript 20 November 2017 PN433.
21 Transcript 20 November 2017 PN396, PN404.
22 Exhibit 6 – curriculum vitae of Derek Howe.
23 Transcript PN 190 – 201.
24 Transcript PN 456 – 457.
25 Transcript 20 November 2017 PN105.
26 Transcript 20 November 2017 PN462.
27 Transcript 20 November 2017 PN252.
28 Exhibit 2.
29 Exhibit 2.
30 Transcript 20 November 2017 PN159 – 162.
31 Transcript 20 November 2017 PN138.
32 (1998) 88 IR 21.
33 [2013] FWCFB 431.
34 [2014] FWCFB 8683.
35 [2015] FWCFB 2267.
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