Diana Menabue v v Bus Pty Ltd T/A Laughter Unlimited Tours, Bus Buddies, v Bus Coaches

[2015] FWC 965

[2015] FWC 965

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Diana Menabue
v
V Bus Pty Ltd T/A Laughter Unlimited Tours, Bus Buddies, V Bus Coaches
(U2013/16806)

COMMISSIONER WILSON MELBOURNE, 11 FEBRUARY 2015

Application for relief from unfair dismissal.

[1] Ms Menabue’s employment with V Bus Pty Ltd, the proprietor of a business named Laughter Unlimited commenced when that company purchased the business on 1 November 2013. Before that date, Ms Menabue had worked for the former proprietor of Laughter Unlimited. At the time of the sale of the business, Ms Menabue’s employment transferred to V Bus Pty Ltd, along with a number of other employees of Laughter Unlimited. She was dismissed from her employment on 5 December 2013.

[2] Following her dismissal Ms Menabue made an application for unfair dismissal remedy to the Fair Work Commission on 27 December 2013, which was the subject of a jurisdictional decision made by Deputy President Smith on 8 July 2014 relating to an argument by V Bus Pty Ltd that Ms Menabue’s application was lodged outside of the 21 day time period provided for in the Fair Work Act 2009 (the Act). 1 Following determination of the jurisdictional objection, which was dismissed, Ms Menabue’s application was referred for hearing and determination on the merits in the October 2014 unfair dismissal arbitration listings. However, the original hearing dates for arbitration had to be adjourned to a date off-roster, due to the unavailability for medical reasons of one of the Respondent’s witnesses and was heard by me on 19 and 20 January 2015.

[3] The Act requires, in s.396, determination of four initial matters before consideration of the merits of the application;

• The first matter, a consideration of whether the application was lodged in time, was dealt with in the jurisdictional decision and is referred to above.

• The second matter, of whether Ms Menabue was at the time of dismissal a person protected from unfair dismissal, requires consideration of whether Ms Menabue had completed the minimum employment period required for an employee of a small business employer. That subject was also dealt with in the jurisdictional decision with Deputy President Smith finding that Ms Menabue’s employment with Laughter Unlimited had been a period in excess of one year. 2

While Ms Menabue argued both in the hearing before me and before Deputy President Smith that she commenced her employment with Laughter Unlimited on or about 10 July 2012, 3 V Bus Pty Ltd argue that “her employment signed agreement says from 1 March 2013”.4 Given that she was dismissed on 5 December 2013, such submission runs directly contrary to the finding in the jurisdictional decision that “her employment with Laughter Unlimited has been for a period in excess of one year”.5 I rely on that finding, and note that there is no evidence before me that would allow an alternative finding.

As a result, and it being consistent with the overall evidence, I find that Ms Menabue was, at the time of dismissal, a person protected from unfair dismissal

• Thirdly, s.396 requires determination of whether the dismissal was consistent with the Small Business Fair Dismissal Code, which matter is dealt with in detail in the body of this decision.

• Fourth, s.396 requires a consideration of whether the dismissal was a case of genuine redundancy; however such an issue does not arise in the circumstances and evidence of this matter.

[4] For the reasons set out in this decision, I find that Ms Menabue’s dismissal was not consistent with the Small Business Fair Dismissal Code; that she was unfairly dismissed; that reinstatement is not appropriate; and that an order for compensation is appropriate.

BACKGROUND

[5] Ms Menabue was employed as an administration assistant and was one of several office-based employees at V Bus Pty Ltd’s depot in Altona. Ms Menabue claimed that her duties with the former owners were broader than with the new owners, claiming that the new proprietors reduced her role after taking over V Bus Pty Ltd, to essentially assisting with invoicing and issuing accounts. Under both sets of owners, V Bus Pty Ltd provided buses to customers for hire or charter. At least some of the buses that V Bus Pty Ltd had available to it were described as “party buses” being themed as adult entertainment buses, replete with adult imagery and signage and some with pole-dancing poles.

[6] On or around 2 December 2013 a school made a booking for six buses for an end of school year trip to an adventure park. The booking was for the purposes of taking students in the range of year 7 to year 9 to and from the park on 10 December 2013. Nada Peric, the teacher who was involved in making the booking gave evidence that she booked “2 normal buses +4 party buses”. 6 On 5 December 2013, Ms Menabue had a conversation with another employee, John Batty, about the school booking. The content of the conversation is related in Ms Menabue’s witness statement in the following way;

“Mr Batty and I engaged in a conversation in words to the effect of:

Mr Batty - “That Braybrook Job”
Me - “Yeah”
Mr Batty – “That job is going to get cancelled”
Me – “I know that, but I didn’t book it in. Kitty or Leo booked it in”
Mr Batty – “I’m telling you that job is going to get cancelled. Once before we sent one of the plain party buses out there that only had the words buck’s nights and hen’s nights written above the windows and they sent that back.”
Me – “Well the best I can do is call the lady at the school and see if they are going to accept them and if so we will go through with the booking. So do you want me to call them and confirm it?”
Mr Batty – “Yes”

or similar.” 7

[7] The only person who gave evidence about this conversation is Ms Menabue. Neither Mr Batty or any other person present at the time was called by either party to give evidence about the conversation.

[8] V Bus Pty Ltd challenge this recollection and what may have been Ms Menabue’s motivations in having such a conversation. They also put forward that, even on the construction submitted by Ms Menabue, it is apparent that it was Ms Menabue who offered to call the school. Irrespective of what may have motivated Ms Menabue to have this conversation, there was subsequently contact made by her with Ms Peric at the school.

[9] Ms Peric’s evidence on the subject, which is to be preferred to that of Ms Menabue’s on the basis of its independence, is that the following was said;

“... So Ms Menabue called me to confirm the booking and then she asked me if I understood the sort of buses that I had booked, and I said yes.

Can you sort of put it into her words, is that too hard?  -She said, “You’ve booked a certain number of buses” and I said, “Yes.” She said, “Are you aware of the sort of buses they are?” I said, “Yes, a couple of normal buses and I think three of four party buses.” That’s what I said and then Ms Menabue asked me whether I knew what sort of buses they were.

You would have said no to that?  -I would have said - at the time I remember saying “party buses” and in my head I saw red and balloons because I’d seen buses like that before.

So how did the conversation go after that? She says to you, “Are you aware of the sort of buses that you’re getting?”?  -Well, she said, “They’re actually not party buses as you imagine, they’re designed for adult entertainment.”

Prior to her saying that, did you indicate what you thought a party bus was going to be?  -I did. I said they were sort of - in my head I see those red buses with the clowns and balloons that I’d seen before, that’s the only buses - I’d just assumed that was a party bus.

Did you say that to her then?  -Yes.

So she says to you, “Do you know what sort of buses you’re getting?”?  -Mm.

You say, “Party buses, and by party buses I mean buses with clowns on them.”?  -Yes.

Isn’t that a bit unusual? Why would you say that?  -Well - - -

I mean surely - - -?  -I would say that because I’ve seen buses like that before. I assumed it’s a party bus, it’s designed for - I’ve seen children on buses before and that’s what I thought it was.

I understand. If that’s what you thought it was why would you need to say that? I mean wouldn’t you just assume that that’s what she meant?  -Ms Menabue had asked me too. She’s asked me, “What sort of buses do you think they are?” And I told her and then she said, “They’re actually not, they’re designed for adult entertainment.”

Okay. Following that, what was your next comment after that?  -Well, if I’m going to be honest, I was quite horrified and I said to Ms Menabue, “I’ll get back to you.” I spoke with my principal immediately and then we decided to cancel the buses.” 8

[10] Ms Peric’s evidence is also that had the school not had a call from Ms Menabue and had the party buses arrived on the day to pick students up for the excursion, “[t]hey would have been cancelled on the spot”. 9

[11] As a consequence of the school’s decision to cancel the booking, Ms Menabue indicated the booking had been cancelled on the office whiteboard and in a hardcopy diary.

[12] On the same day this action was brought to the attention of the directors of the new owner, Dennis Wang and Janice Liu. Mr Wang’s evidence is that he was told of the cancellation by another two employees, Kitty and Leo, giving evidence that “when I came into the office, two people said, ‘Diana make a phone call to school and cancelled’” the school booking. 10

[13] Ms Liu corroborates that she overheard the two employees saying these things to Mr Wang. Ms Menabue’s evidence is that Mr Wang approached her about this matter and that she and he had a conversation as follows;

“15. Shortly after this, Mr Dennis Wang (“Mr Wang”) approached me and we had a conversation consisting of words to the effect of:

Mr Wang – “Why is that job cancelled?”
Me – “The school cancelled it because the buses we were sending were inappropriate”
Mr Wang – “Well who gave you permission to cancel it?”
Me – “I didn’t cancel it, the school cancelled it”

Ms Wang then joined the conversation

Ms Wang – “How do you know we were sending them party buses?”
Me – “Well it’s written on the confirmation sheet and in the diary and all the other buses are booked for that day. Unless you have more buses coming in from China over the weekend, that is all we have got available”.

At this stage another employee whom I know as Kitty joined the conversation

Kitty – “You sent the school picture of the buses in an email”
Me – “No I didn’t. Yes they are there in the emails because when I was outside I took pictures of them and sent them to our email address just in case the school wanted to see what they were getting”
Kitty – “No, you sent them”
Me – “No I didn’t – they are sitting on the email, they have not gone anywhere.
Mr Wang – “You just cost me $6000”
Me – “No I didn’t. I just saved you money. First of all, you don’t have any drivers and then it would have cost you in fuel and wages for you to turn up and for it to be cancelled and have to go back again”
Mr Wang – “You need to get that job back”
Me – “I can’t”
Mr Wang – “Give me the paperwork to call the school”

or similar.” 11

[14] Mr Wang and Ms Liu then held a private conversation about the circumstance and mutually decided to dismiss Ms Menabue, which was done shortly after. This was done in a short conversation between Mr Wang and Ms Menabue in which he handed over a letter of termination consisting of a single sentence saying “[t]his serves as a notice to terminate your employment as of 5th December 2013”. 12 Ms Menabue left the premises shortly after.

[15] A person who was associated with the former proprietors of V Bus Pty Ltd was Robert Warwick. Mr Warwick’s status with the former owners is unclear from the evidence, however at the very least he was a person of influence in V Bus Pty Ltd prior to its sale, and since its sale to V Bus Pty Ltd is apparently a competitor. 13 Initially he had been provided with work by the new owners, however he was dismissed with effect from 22 November 2013.

[16] Sometime after Ms Menabue’s dismissal, V Bus Pty Ltd received in the mail bank statements relating to the former owners and in particular to the account of Laughter Unlimited. 14 Apparently they had been sent to V Bus Pty Ltd as a result of the address not having been changed at the bank. Parts of the statement were tendered in evidence in these proceedings by the Respondent, although notably the front page of the statement, which could be expected to contain the name and address of the addressee, was not provided. The bank statements showed to Ms Liu and Mr Wang that Ms Menabue had, for some time in November 2013, received payments from the account holder, alleged by Ms Liu to be Mr Warwick. Ms Menabue does not dispute these payments, however submits that they were payments made to her in accordance with the obligations her former employer had to her to pay out her accrued annual leave at the time her employment with the former employer ceased. Ms Menabue submits that the arrangement her former employer had with her, and a number of other employees, is that the payments would be made in instalments and once they could be afforded to be paid.

[17] Ms Liu’s written witness statement said she “believed that [Ms Menabue] was giving information about the business to Robert Warwick who is associated with another bus company. We subsequently discovered that she has been receiving payments from Robert Warwick of $594.35 since 1 November 2013”, 15 but contradicted the statement in oral evidence;

“So I put it to you that Ms Menabue was not receiving payments in compensation for providing Mr Warwick information?---I didn’t say that.” 16

CONSIDERATION

Consistency with the Small Business Fair Dismissal Code

[18] For reason of the provisions of s.396 of the Act, it is necessary to consider whether Ms Menabue’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code), with such consideration before consideration of the merits of the matter.

[19] The Code consists of two relevant parts; obligations in respect of summary dismissal, as well as obligations in respect of other dismissals relating to an employee’s conduct or capacity to do their job. In respect of summary dismissal, the Code provides as follows;

“Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”

[20] V Bus Pty Ltd relies upon the provisions of the Code relating to summary dismissal as being reasons why Ms Menabue’s dismissal was not an unfair dismissal.

[21] In addition to the provisions of the Code, V Bus Pty Ltd referred to the definition of “serious misconduct” set out in regulation 1.07 of the Fair Work Regulations 2009. This definition is relevant inasmuch as the Code uses the term “serious misconduct” and that The Dictionary contained within s.12 of the Act provides that “serious misconduct has the meaning prescribed by the regulations”. So far as is relevant, r.1.07 provides that serious misconduct has its ordinary meaning and then provides that such meaning includes certain matters as follows;

“(1) ...

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes
each of the following:

(a) the employee, in the course of the employee’s employment,
engaging in:

(i) theft; or
(ii) fraud; or
(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) ...

(5) ...”

[22] Relevant to these proceedings is whether the conduct of Ms Menabue was inconsistent with the continuation of the contract of employment; or that her conduct risk the reputation, viability of profitability the employer’s business; and whether the conduct might be described in some way as theft.

[23] In relation to the possibility that her dismissal was for reason of her conduct or capacity, there is some, but nevertheless insufficient evidence that her performance was the subject of warnings given to her by Ms Liu.

[24] It is said by Ms Liu that there were persistent failings on the part of Ms Menabue and that at the time of dismissal Ms Liu was “unaware that I had to give warnings in writing”. 17 The failings which Ms Liu points to include a failure to follow instructions in preparing the accounts; taking extended lunch breaks despite being told not to; being “rude, defiant and confrontational” when instructed by Ms Liu or Mr Wang; and regularly making calls on the mobile telephone, including to bus drivers. Notwithstanding these criticisms, the evidence does not rise to a point where it can be said about these things that “the employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement”. In any event V Bus Pty Ltd concedes the matters were not put to Ms Menabue as allegations of poor performance and does not rely upon these matters as being the basis of dismissal, but rather submits that they may be factors which the Commission take into account in determining a suitable remedy in the event that an unfair dismissal of Ms Menabue is found.18

[25] Instead, it is the case that V Bus Pty Ltd relies on Ms Menabue’s conduct amounting to serious misconduct within the meaning of the Act and thereby the Code. The Code gives the capacity for a small business employer to “dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.”

[26] The consideration is therefore an objective one, of whether it might reasonably be said, within the context of the small business employer, that what Ms Menabue did on 5 December 2013 was serious misconduct.

[27] The conduct complained of by V Bus Pty Ltd is expressed in its submissions as being “a conflict of interest or intention to damage the commercial interest of the Respondent”, 19 such that she acted with “betrayal, dishonesty and sabotage”,20 when she engaged Mr Batty in a conversation about the booking for the school, and subsequently by describing the party buses to the school “in such a way as to discredit her employer and chose graphic photographs to send” and “cancelled or caused to be cancelled a lucrative contract” with the school.21 She did this outside of her authority and failed to consult the Directors and allow them to make decisions on the allocation of buses.22

[28] In summary form the allegations arise from a supposition that Ms Menabue’s relationship with Mr Warwick was such that she was hostile against the owners of V Bus Pty Ltd because they dismissed him and that she sought to undermine V Bus by procuring the cancellation of the school contract.

[29] At the time Ms Menabue was dismissed, the matters within the knowledge of Mr Wang and Ms Liu about her conduct were the report given to them by Kitty and Leo about Ms Menabue’s contact with the school, as well as the concerns that Ms Liu held about Ms Menabue’s performance. The concerns Ms Liu held about Ms Menabue’s performance are not matters that would fall within the summary dismissal category of the Small Business Fair Dismissal Code, and in any event are not relied upon as grounds for dismissal by V Bus Pty Ltd.

[30] The possible serious misconduct that might be relied upon by V Bus Pty Ltd as falling within the summary dismissal category of the Code surrounds the contact Ms Menabue made with the school about its booking; the motivations she had for the contact and its consequences.

[31] A possible further matter that might be characterised as misconduct was the subject of limited evidence. Mr Wang claims to have been present during the conversation between Ms Warwick and Ms Menabue in which Mr Warwick asked Ms Menabue to ring VicRoads in order to cancel an accreditation he held and which might be necessary for the ongoing conduct of V Bus Pty Ltd’s business. Ms Menabue denies that Mr Warwick asked her to do that and that she did not make such a phone call. 23 The conversation in question took place before Mr Warwick left the business on 22 November 2013, and in any event, V Bus Pty Ltd do not rely upon the matter as being the reason Ms Menabue was dismissed.24

[32] Ms Menabue agrees she initiated contact with the school and discussed with Ms Peric the type of buses that were to be sent in the contracted booking. However, she argues that she did this so as to avoid a problem at the school if the buses were turned away.

[33] The V Bus Pty Ltd construction of Ms Menabue’s misconduct is that;

• She was acting on a conflict of interest in considering and making the call;

• She constructed a pretext to call the school;

• When she called the school, she spoke with them in a way that could have only one outcome, being the termination of the booking; and

• She sent photographs to the school which reinforced her negative spoken words.

[34] A later characterisation given Mr Wang and Ms Liu is that Ms Menabue failed to take into account that V Bus Pty Ltd could well have been able to arrange alternative, and more suitable, buses for the booking. The alternate buses could have been arranged either prior to the day of the booking, or even on the day of the booking, after the original buses had arrived at the school.

[35] V Bus Pty Ltd concede that it has little in the way of evidence of Ms Menabue’s motives or intentions when she rang the school. However, it says her actions were for the purposes of bringing about termination of the contract for charter buses. The first that Mr Wang or Ms Liu knew there was a question about Ms Menabue’s conduct was the afternoon of 5 December 2013, when Mr Wang was told about the cancellation of the school booking by Leo and Kitty.

[36] After he learned this, he asked Ms Menabue why she cancelled the job, however he cannot remember what she said in response. 25 He did not call the school after this conversation.26 Despite their views at the time about her having forwarded photographs of the buses to the school, Mr Wang and Ms Liu conceded that they have no evidence that Ms Menabue took this action.27

[37] Such investigation or inquiry that V Bus Pty Ltd undertook about Ms Menabue’s conduct consists only of the elements broadly recorded above.

[38] The act of an employee contacting a customer for the purposes of procuring the cancellation of a contract without the knowledge of the owners of the business and with capricious intent will likely be serious misconduct. If wilful or deliberate conduct it would more than likely be conduct which is “inconsistent with the continuation of the contract of employment” and, to an extent at least, depending upon the severity of loss of contract, may be serious and imminent risk to “the reputation, viability or profitability” of the business.

[39] The extent of V Bus Pty Ltd’s’ investigation or consideration of these matters is minimal, and to the extent that any such steps took place, wholly inadequate to allow reliance upon the allegations as giving grounds to dismiss Ms Menabue for summary dismissal under the Code.

[40] In order for a dismissal to be consistent with the summary dismissal aspect of the Small Business Fair Dismissal Code, there must be a consideration of whether an employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, as well as whether that belief was based on reasonable grounds. 28 In addition, the Full Bench has emphasised the need for these beliefs to be objectively formed;

“[29] As we have indicated, the Code provides that it is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. In Pinawin a Full Bench of FWA held that this involves consideration of:

• whether the employer held a belief at the time of the dismissal that the employee’s conduct was sufficiently serious to justify immediate dismissal, and



• whether the belief was based on reasonable grounds, which incorporates the concept that the employer has carried out a reasonable investigation into the matter.” 29

[41] The Full Bench’s finding in Steri-Flow Filtration Systems v Erskine that there had been a reasonable investigation in that matter, sufficient for a finding that the employer’s belief about misconduct was based on reasonable grounds, followed findings the employer’s belief was informed by active and deliberate steps, including discussions, email exchanges, questions put to the employee before they were dismissed and research about the law. 30 The Full Bench was satisfied that these steps were sufficient and that further steps taken by the employer would be unlikely to weaken what was a reasonably held belief that the employee’s conduct was sufficiently serious to justify immediate dismissal;

“[41] Mr Fong’s belief, at the relevant time, that Mr Craig Erskine’s conduct was sufficiently serious to justify immediate dismissal was based on grounds directly supported by or reasonably inferential from the investigation he had conducted, including that he had conducted into the law. It is apparent from the letter of termination from Mr Fong to Mr Craig Erskine that Mr Fong understood that Mr Gilbert Erskine had authorised SFT’s use of the SFS property before he resigned from SFS. There is no sound basis for concluding that further investigation by Mr Fong would have revealed the grounds for his belief were mistaken. Mr Fong’s investigation was reasonable, resulting in reasonable grounds for his belief.” 31

[42] In this matter, the evidence is clear that the employer, through its Directors, Mr Wang and Ms Liu, held a belief at the time of Ms Menabue’s dismissal that her conduct was sufficiently serious to justify immediate dismissal. However, it is not the case that the belief was based on reasonable grounds, gathered through a reasonable investigation into the matter carried out by V Bus Pty Ltd.

[43] While the evidence supports that Mr Wang and Ms Liu became aware that the school charter booking had been cancelled and that Ms Menabue was involved in its cancellation, it does not support the key allegations that she procured the cancellation against the interests of V Bus Pty Ltd or that she sent the school an email with photographs of the party buses.

[44] There was no contact made by V Bus Pty Ltd to the school, either to find out Ms Peric’s perspective about what had been said to her by Ms Menabue; whether she had sent photographs to the school; or indeed to see if the booking could be maintained but with alternative buses. The inquiry made by V Bus Pty Ltd consisted only of the exchange referred to above, during which Ms Menabue denied the alleged conduct. Despite denying the alleged conduct, and apparently in front of the people who first made the allegations, V Bus Pty Ltd made no additional or alternative inquiries. It merely accepted the allegations, heard Ms Menabue’s denials, and shortly afterwards dismissed her.

[45] I find that for these reasons Ms Menabue’s dismissal was not consistent with the Small Business Fair Dismissal Code.

Was the dismissal harsh, unjust or unreasonable?

[46] The legislative provisions which are relevant to this consideration are set out in s.387 of the Act, which provides as follows;

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

(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)

[47] Having been dismissed for misconduct, the Commission is first required to find whether on the balance of probabilities the alleged misconduct actually occurred. 32 In doing so, the Commission will take into account the need to be properly satisfied of the proofs of the conduct; without applying a standard of proof higher than the balance of probabilities.33 The Commission will also take into account the need for honesty on the part of the Applicant during the course of an investigation.34

[48] As referred to previously, the Commission is unable to objectively find that the allegations against Ms Menabue actually occurred. While the evidence shows certainly that she made contact with Ms Peric at the school and discussed the buses to be provided as part of the booking and that those discussions directly led to the termination of the booking, application of the balance of probabilities to the facts does not lead to a conclusion that what Ms Menabue did was misconduct. In addition, a conclusion cannot be made that there was a failure on the part of Ms Menabue to be honest with the employer during the course of enquiries regarding her conduct being made. The enquiries made by V Bus Pty Ltd consisted only of the questions asked of her by Mr Wang and Ms Liu. The evidence does not reasonably lead to a conclusion that Ms Menabue hid information or put forward misleading answers to the questions she was asked.

[49] In considering the criterion in s.387(a), of whether there was a valid reason for Ms Menabue’s dismissal, the Commission’s approach is to consider whether the reason for her dismissal was “sound, defensible or well founded”. 35 For the reasons set out above, I am not satisfied that the allegations against Ms Menabue were investigated to a sufficient degree by V Bus Pty Ltd. It is also the case that the evidence and other material before the Commission do not sufficiently substantiate the allegations, on the balance of probabilities. I am not satisfied there was a valid reason for Ms Menabue’s dismissal.

(b) whether the person was notified of that reason

[50] Ms Menabue was given a letter of dismissal by Mr Wang, and it is more likely than not that he did not actually state to her why she was being dismissed. Given the proximity of the dismissal to the earlier conversation about the school booking, the reason for her dismissal may have been self-evident, however it was not disclosed in the letter and, more likely than not, words were not spoken about the reasons for the decision.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[51] A consideration of whether a person has been given an opportunity to respond to any reason related to their capacity or conduct is normally consequential to a finding there is a valid reason for dismissal, which I have not found. 36 In any event, and irrespective of whether the decision to dismiss Ms Menabue was a valid reason, such an opportunity to respond to the reason held by V Bus Pty Ltd for its decision to dismiss was not afforded to Ms Menabue.

(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;

[52] The circumstances of Ms Menabue’s dismissal are such that she did not know she was about to be dismissed, and did not ask for a support person to be in attendance.

(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

[53] Although V Bus Pty Ltd are critical of Ms Menabue’s work performance, they do not rely on this as being reason for her dismissal. 37

(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;

[54] The parties agree that V Bus Pty Ltd is a small business employer within the meaning of the Act.

[55] That fact, coupled with the relative inexperience of the company’s Directors in employment matters, and the lack of dedicated human resource management specialists or expertise, may well have impacted upon V Bus Pty Ltd’s decision to terminate Ms Menabue’s employment.

(h) any other matters that the FWC considers relevant.

[56] I do not find any other matters that are relevant and which require being taken into account.

[57] For reason of the matters considered by me, and the totality of the evidence and submissions received, I find that Ms Menabue’s dismissal by V Bus Pty Ltd was harsh, unjust and unreasonable.

REMEDY

[58] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are within ss.390 - 392 of the Act. In summary, if the Commission is satisfied that an applicant under s.394 is a person protected from unfair dismissal and that they have been unfairly dismissed, the Commission may order their reinstatement or the payment of compensation, subject to the discretions and considerations set out in the Act. Compensation may only be ordered if the Commission is satisfied that reinstatement is inappropriate and that a payment of compensation is appropriate, with s.392 setting out the criteria for determining an amount of compensation to be ordered.

[59] Ms Menabue seeks reinstatement, submitting that the relationship was capable of re-establishment. Her evidence on the subject included the following;

“I love the job. I love working with the clients that we had there. I liked the people I worked with and I would love to go back if I had the opportunity. It would be a bit awkward, but I’d still like to go back” 38

[60] In contrast V Bus Pty Ltd are opposed to reinstatement, arguing that reinstatement is inappropriate for several reasons including that they are a small employer; and that Ms Menabue would have to work in close proximity to the Directors who would have insufficient trust in Ms Menabue’s “loyalty, good faith and honesty”. 39

[61] The issue of when reinstatement is inappropriate and the related question of the need for trust and confidence between the parties was recently considered at length by the Full Bench of the Commission in Nguyen and Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter 40 (Nguyen and Le). In its decision, the Full Bench held that, provided an allegation of the loss of trust and confidence is soundly and rationally based;

“Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.” 41

[62] It is likely the case, after observing the parties and hearing their evidence, that there would be insufficient trust and confidence between the parties for reinstatement to be appropriate. Strong accusations have been made in these proceedings by the Respondent against the Applicant, including her motives in calling the school about the charter booking; the extent of her loyalty to the Respondent during her employment; and whether her employment after termination was also against the interests of V Bus Pty Ltd. Ms Menabue’s performance as an employee is also questioned.

[63] It is likely, because of these circumstances, that nothing in these proceedings or this decision would change the views of Mr Wang or Ms Liu about Ms Menabue in a way that would allow the development of a positive and trusting relationship. For example, Ms Menabue’s post-dismissal employment by Mr Warwick is not accepted as a proper attempt by her to mitigate her loss of employment; rather it is characterised as a means to undermine V Bus Pty Ltd;

“It is the evidence of the Respondent that the Applicant was in employment with Paul Rickard and Robert Warwick in January 2014 and the Applicant admits that she has been employed ‘for a four week period’ … but is deliberately evasive as to when and by whom. Having accepted other employment in January 2014, she cannot continue to blame the Respondent for her inability to find work. Her bad behaviour should not be rewarded”. 42

[64] In Nguyen and Le, the Full Bench referred to the factors that might be relevant to considerations of the loss of trust and confidence as follows;

“[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

• Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.



• Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.



• An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.



• The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.



• The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.” 43 (references omitted)

[65] In relation to this matter, I consider the relationship between Ms Menabue and the Directors of V Bus Pty Ltd to be very poor, and unlikely to be reconciled. The basis of the poor relationship is several-fold, including the concerns about her work performance and the accusations levelled of her allegiances to the company’s competitors. The latter aspect goes directly to the question of trust and confidence. Whereas the allegations have not been shown to be correct in these proceedings, that may be a question only of evidence. The company holds the veracity of the complaints very strongly, and in their mind at least, they rise to a sound reason not to re-employ Ms Menabue.

[66] In the context of this small business, run by the Directors, it is unlikely that either they or Ms Menabue could productively work together again and without animosity. Accordingly, I am satisfied that in all circumstances it would be inappropriate to reinstate Ms Menabue and that instead I should give consideration to an order for the payment of compensation.

[67] In the alternative to reinstatement, I consider that pursuant to s.390(3) an order for compensation is appropriate in all the circumstances of the matter.

[68] The matters that need to be considered by the Commission for determining an amount of compensation are set out in s.392 of the Act.

[69] Subsection 392(1) provides that compensation is a payment by the former employer in lieu of reinstatement, and ss.392(4) excludes compensation for shock, distress etc. Subsection 392(3) requires that contributory misconduct on the part of an employee be taken into account; and ss.392(5) and (6) cap the amount of compensation that may be ordered.

[70] Subsection 392(2) sets out the matters that must be taken into account by the Commission in determining an amount of compensation;

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.

[71] I turn to consider each of the relevant criteria.

(a) the effect of the order on the viability of the employer’s enterprise

[72] There is no material before me regarding the effect of an order for compensation on the viability of V Bus Pty Ltd’s enterprise.

(b) the length of the person’s service with the employer

[73] Ms Menabue’s employment with the Laughter Unlimited business was for almost 18 months, being between 10 July 2012 and 5 December 2013. However, her employment with V Bus Pty Ltd was for a very short time only, being the period between 1 November 2013, when the company took over the business, and 5 December 2013, when she was dismissed.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[74] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”; 44

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the “anticipated period of employment”. This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the “anticipated period of employment” are deducted. ...”  45 (endnotes omitted)

[75] At the time she was dismissed, Ms Menabue’s employment was not secure.

[76] Ms Liu’s evidence was that she had sought, without success, to amend Ms Menabue’s employment arrangements so that her employment was subject to a three-month probation arrangement, and had criticisms of her performance. While Ms Menabue had not agreed to a change to her employment arrangements such that it would be subject to a probation period, and criticisms of her work performance had not been put to her as a warning or any other disciplinary measure, Ms Liu’s evidence, more direct than much of her overall evidence, was that Ms Menabue’s employment would be unlikely to continue past the three-month point in any event. 46

[77] Ms Menabue’s conduct in calling the school, on her construction of events, was no better than ill-advised. At the point she made the phone call to the school, she was working with a new employer with whom she did not yet enjoy strong relationships. She had observed one of her closest colleagues, Robert Warwick, dismissed on the spot. Doing anything that might lead to the cancellation of a booking, even inadvertently, in these circumstances can only be described as foolish or unthinking.

[78] Her construction of the conversation with Mr Batty is open to the criticism put forward by Mr Ryan, for V Bus Pty Ltd, to the effect that the conversation with Mr Batty was initiated by Ms Menabue, with the result that “she was happy to make a communication that could only end in one way”. 47

[79] At best, her contact with Ms Peric was blundering, or less than proficient, for the reason that she presented to Ms Peric only the problem that the booking included inappropriately styled party buses, with no endeavour to offer a solution, such as making an offer to arrange alternative, and suitable buses. She has not explained why it was necessary to call the school on 5 December for an event booking on 10 December; at least some of the remaining time could have been spent talking with her new employer about the problem and what solutions might exist to avoid cancellation of the booking.

[80] At worst, Ms Menabue’s conversation with the school was for the ulterior motives ascribed by V Bus Pty Ltd, something done with “an almost malevolent intent”. 48

[81] While I have found the conduct and circumstances did not warrant summary dismissal, for the reasons discussed above, they did require Ms Menabue being held to account by the company through proper investigation or performance management after receiving competent advice about how best to proceed.

[82] In the context of the circumstances that took place in early December 2013, Ms Menabue’s employment with V Bus Pty Ltd is unlikely to have continued beyond January 2014, a period of perhaps no more than six weeks. Even at the distance of more than a year from the events that triggered her dismissal in December 2013, it is clear that the relationship between Ms Menabue and V Bus Pty Ltd directors in December 2013 was not good. My observation of her giving evidence is that she would likely resist direction – even coaching – that did not suit her, or otherwise accord with her views.

[83] Proper performance management of Ms Menabue is likely to have resulted within a short time either in her resignation, or in her dismissal, either following fair investigation or performance management in accordance with the requirements of the Small Business Fair Dismissal Code.

[84] V Bus Pty Ltd submitted that if I were to consider compensation as a remedy, the anticipated remaining period of employment would be only 2 weeks. 49 That period is too short given the need for either proper investigation of her conduct to 5 December 2013, or proper performance management were she to be ultimately dismissed for poor work performance.

[85] I therefore find that Ms Menabue’s anticipated period of employment was six weeks. Within that time it is likely that she would have either been properly performance managed and dismissed, or resigned and left.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

(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

[86] Ms Menabue submits she worked for 2 periods since leaving V Bus Pty Ltd. The first of these was in early 2014 for a period of four weeks with another bus company, and as it turns out, one operated by Robert Warwick, in competition with V Bus Pty Ltd.

[87] Her former employer is very critical of this relationship and that in her employment with the business operated by Mr Warwick she had contact with clients of V Bus Pty Ltd. In context however,, nothing arises of the criticism, especially in consideration of Ms Menabue’s obligation to mitigate her loss. The evidence led by V Bus Pty Ltd about Ms Menabue’s contact with the client shows that the contact was likely initiated only after she had left V Bus’ employment. The submission that her acceptance of employment with a competitor sometime after she had left the employment of V Bus Pty Ltd, and then for only a short period, is something to be held against her, 50 is without merit in these proceedings. Ms Menabue’s evidence is that she earned $2,653.44 from that employment.51 V Bus Pty Ltd are sceptical of this amount, but led no evidence of substance to support their scepticism. I accept Ms Menabue’s evidence in this regard.

[88] The second work Ms Menabue had after leaving V Bus Pty Ltd is as a casual shop assistant in a supermarket, which commenced in November 2014 and was ongoing at the conclusion of the hearing in late January 2015. By 11 January 2015, she had earned $2632.53 from that work. 52 That work appears likely to continue, although subject to the vagaries of a weekly roster cycle.

[89] Since leaving V Bus Pty Ltd’s employment, these combined periods of employment have brought Ms Menabue modest earnings in comparison to her weekly pay with V Bus Pty Ltd of $663.36 per week. 53

[90] In the period between leaving V Bus Pty Ltd’s employment and the hearing, Ms Menabue had far fewer weeks of employment than unemployment. For the reason that my proposed order for compensation is significantly lower than the total periods of unemployment, I do not consider it appropriate to make a deduction from the compensation for monies earned since the date of termination.

(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

[91] The evidence before the Commission in this regard is that Ms Menabue’s earnings after the date of an order of the Commission for compensation are likely to continue to be modest.

(g) any other matter that the FWC considers relevant.

[92] Section 392 (3) requires that if the Commission is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the FWC must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct, even where it found there was no valid reason for the termination, noting that such may be relevant to assessment of the “appropriate” amount by which to reduce the amount of compensation that would be otherwise ordered. 54

[93] I have taken into account Ms Menabue’s conduct in forming my views about the anticipated period of employment, referred to above. In the circumstances, I do not consider it to be appropriate to make a further deduction for this factor from the compensation to be ordered.

[94] I am not aware of any other considerations which might be relevant to the order of compensation, and have considered all of the circumstances of the case in determining an appropriate remedy.

CONCLUSION AND ORDERS

[95] After consideration of the foregoing issues, I find that Ms Menabue was dismissed and that the dismissal was not consistent with the Small Business Fair Dismissal Code, and that the overall circumstances of her dismissal were harsh, unjust and unreasonable.

[96] I find that reinstatement is not an appropriate remedy in this case.

[97] I find that compensation is appropriate.

[98] In relation to the matter of contingencies, I find there are none that ought to be taken into account in this matter.

[99] Having regard to the considerations established by s.392 of the Act, and the criteria established by the FWC, I find that compensation should comprise a payment by the respondent to the applicant calculated as follows:

Assessment of remuneration lost:	6 WEEKS PROJECTED LOST INCOME AT THE RATE OF $663.36 PER WEEK 55	$3,980.16
Employer superannuation contribution on above	9%	+ $358.21
LESS:	Monies earned since dismissal No deduction made. Refer above.	- $0.00
LESS:	Contingencies Nil	- $0.00
TOTAL	$4,338.37

[100] The above amount does not exceed the compensation cap applying at the time of dismissal.

[101] The compensation payment of $4,338.37 will be taxed by the employer according to law, and is to be paid within 14 days of the date of this decision

[102]An order to the above effect will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

Mr I Carter, Agent, pro bono, for the Applicant

Mr V Ryan, solicitor, for the Respondent

Hearing details:

2015.

Melbourne:

January, 19 and 20

 1   [2014] FWC 4354

 2   ibid, at [19]

 3   Exhibit A5, para 1

 4   Exhibit R5, para 2

 5   [2014] FWC 4354, at [19]

 6   Exhibit A1, attachment NP-1

 7   Exhibit A2, para 10

 8   Transcript, PN 178 - 189

 9   Transcript PN 127

 10   Transcript, PN 1733

 11   Exhibit A2, para 15

 12   Exhibit A2, Attachment DM3

 13   Exhibit R4, paragraph 12

 14   Transcript, PN 1082

 15   Exhibit R3, para 6

 16   Transcript, PN 1089

 17   Exhibit R4, paras 6 - 7

 18   Transcript, PN 51 - 52; 994 - 1000

 19   Exhibit R5, para 10

 20   Ibid, para 5

 21   Ibid, para 6

 22   Ibid

 23   Transcript, PN 613 - 616

 24   Transcript, PN 1580 - 1581

 25   Transcript, PN 1739 - 1740

 26   Transcript, PN 1745

 27   Transcript, PN 1750 - 1751; 1159

 28   Pinawin v Domingo (2012) 219 IR 218, at [29]

 29   [2013] FWCFB 1943, at [29]

 30   Ibid, see [35] - [37]; [39] - [41]

 31   Ibid, at [41]

 32   Edwards v Giudice (1999) 94 FCR 561 [6]‒[7]

 33   Budd v Dampier Salt Ltd (2007) 166 IR 407, at [15]; with reference to Briginshaw v Briginshaw (1938) 60 CLR 336 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171

 34   Streeter v TelstraCorp Ltd (2008) 170 IR 1

 35   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373

 36   Chubb Security Australia Pty Ltd v Thomas (2000), Print S2679, at [41].

 37   Transcript, PN 51 - 52; 994 - 1000

 38   Transcript, PN 399

 39   Exhibit R5, para 22

 40   [2014] FWCFB 7198

 41   Ibid, at [27]

 42   Exhibit R5, para 22

 43   [2014] FWCFB 7198, at [27]

 44   Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109; see also Haigh v Bradken Resources Pty Ltd[2014] FWCFB 236, at [10] - [12]

 45   Ellawala, at [34]

 46   Transcript, PN 911

 47   Transcript, PN 2025 - 2027

 48   Transcript, PN 2133

 49   Exhibit R5, para 22

 50   Exhibit R5, para 22

 51   Exhibit A2, para 28

 52   Exhibit A3

 53   Exhibit A2, para 4

 54   Read v Gordon Square Child Care Centre Inc[2013] FWCFB 762, at [83]

 55   Exhibit A2, para 4

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