Eng Hua Liuk v Dainty Age One Pty Ltd T/A Dainty Sichuan Food

[2021] FWC 1075

[2021] FWC 1075

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Eng Hua Liuk
v
Dainty Age One Pty Ltd T/A Dainty Sichuan Food
(U2020/14827)

DEPUTY PRESIDENT CLANCY MELBOURNE, 26 FEBRUARY 2021

Application for an unfair dismissal remedy.

[1] On 15 November 2020, Mr Eng Hua Liuk made an application to the Fair Work Commission for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). The Respondent to Mr Liuk’s unfair dismissal application is Dainty Age One Pty Ltd T/A Dainty Sichuan Food.

[2] I previously conducted a Determinative Conference on 14 December 2020 to resolve whether the application had been filed outside of the 21-day time period prescribed in s.394(2)(a) of the Act and if so, whether an extension of time for the making of it should be granted. In a Decision dated 16 December 2020 (the December Decision), 1 I determined that Mr Liu was terminated at the initiative of the Respondent on 5 November 2020 and as such, his application for unfair dismissal remedy filed on 15 November 2020 was made within 21 days after the dismissal took effect and no extension of time for the making of the application was necessary. I then proceeded to make Directions for the parties to file and serve their material so that the merits of Mr Liuk’s application for unfair dismissal remedy could be determined.

[3] A second Determinative Conference for this purpose was conducted on 23 February 2021 at which Mr Liuk appeared with assistance from an interpreter. The Respondent was represented by Mr Shao.

[4] In the December Decision, I recorded that the parties appeared to have almost exclusively communicated during the relevant periods that concern this application via a social media platform known as WeChat. Mr Liuk produced extensive WeChat exchanges in Mandarin between himself and Ms Li. He also provided an English translation of these exchanges 2 carried out by his 14-year old daughter. There has been no dispute as to the content of the translations provided.

[5] Mr Liuk’s account of the factual background was recorded in the December Decision. For present purposes, it is relevant to outline the following:

a) Mr Liuk experienced a decrease in his working hours and income due to COVID-19 which resulted in him having to apply to his landlord for rent relief and requiring correspondence stating he was without work temporarily.

b) He requested a letter from the Respondent on 30 July 2020 to assist in an application for permanent residency, by which time it had been approximately two weeks since he had been advised there was no work for him due to the impact of COVID-19. In mid-August 2020 Mr Liuk received, by post, a letter dated 4 August 2020 from the Respondent (the August letter), which stated:

“4 August 2020

TO WHOM IT MAY CONCERN

RE: Eng Hua Liuk

We are writing to you in relation to the above.

We advise and confirm with you that:

1. Mr Eng Hua Liuk has been employed by us (Dainty Age One Pty Ltd T/AS Dainty Sichuan Food – Melbourne) as a full-time chef;

2. His employment has been commenced from 01/07/2018 and terminated on 12/07/2020;

Should you have any queries or concerns in relation to the above, please do not hesitate to contact Ting Li of this office.” 3

c) Having little if any English language skills, Mr Liuk says he did not know precisely what was outlined in the August letter.

d) He nonetheless maintained regular contact with Ms Li regarding opportunities for ongoing work.

e) They corresponded via WeChat on 5 September 2020 and then in late October 2020.

f) By early November 2020, Mr Liuk had not worked for a number of months.

g) WeChat correspondence from Ms Li on 5 November 2020 prompted him to ask his daughter to translate the August letter.

h) When this occurred on 6 November 2020, he claimed he discovered that he had been dismissed on 12 July 2020.

i) His next WeChat correspondence to Ms Li after this was sent on 13 November 2020.

j) Messages sent to him by Ms Li on 14 November 2020 prompted him to make his application for unfair dismissal.

[6] I noted the WeChat correspondence on 5 November 2020 between Mr Liuk and Ms Li 4 had followed a number of enquiries from Mr Liuk regarding the availability of work:

•  On 5 November 2020at 8:09pm, Mr Liuk/”Hua” wrote, “Boss, the restaurant is back to normal after a week, do you have scheduled my work time?”

•  Ms Li/”Tina” replied as follows:

•  At 8:20pm: “Now, the restaurant’s income only can cover staff’s wages, the increase in the number of people will certainly affect the restaurant balance. I have asked several restaurants, because your salary used to be based on the head chef’s salary, so the restaurants I’ve asked now don’t want to accept you. Now that everyone is calculating, I don’t think there’s a place for you to do it at the moment.”

•  At 8:25pm, she went on to say: “You are actually not suitable to be head chef to manage the kitchen. In Dainty can do may only cook, so, the previous salary should not be able to continue. I suggest you go outside and see if you can find the right job for you. Because the cook’s salary should be a lot different from your current salary.”

•  Mr Liuk/”Hua” responded at 9:09pm, saying, “Boss, my salary over the past few years is 1500 Australian Dollars a week, if I go back to do cook, how much will you reduce my salary?”

•  Ms Li/”Tina” replied, at 9:19pm on 5 November 2020:

“I now consider that there are only two places to go, one is Clayton shop and one is the city noodle shop for you, and now it’s not just about money. Because business is recovering slowly, yesterday was bad, today is not good, it’s only weekend two days are ok, later more and more people leave Melbourne and business will be harder. So now head chefs don’t want many people to come in their shops, and as soon as add more staff in, other people lost their hours.

And now one staff has to do at least 1.5 – 2 people’s workloads. They prefer cheap laborers, so they can have more people to cover the workloads, the office now five them weekly accounting as long as the labour exceeds, we will immediately reduce the shift. If you have to come back, I also want to ask the Clayton shop and city noodle shop to see if they are willing to have you. Before your salary, is based on head chef’s salary. But your performance, the people who work under you are not happy, either you stay, or they go. They told me and I have reminded you many times before, also gave you the opportunity, if the head chef do less workload than another people, people who work under you would not follow you.”

•  At 10:50pm, Mr Liuk/”Hua” responded:

“Boss, the way you say it is unfair to me. You let me wait four months, not even offer me a day shift. Now the restriction is lifted and has returned to normal, you find so many excuses, ask me to reduce wages, and asked me to go somewhere to find a job, as a chef work for you more than 6 years, the excuses that you said which is really very unfair.”

•  At 10:54pm, Ms Li/”Tina” replied:

“You’ve been the head chef. You know that if I’m looking for new employee always ask the head chef and seek for head chef’s opinions. If the head chef refused, what can I do?”

•  At 10:55pm Ms Li/”Tina” continued:

“Dainty has so many employees older than you, why others have jobs, you do not, you do not look for your own problems, you question me?”

•  At 10:58pm, Ms Li/”Tina” began sending a number of screen shots purportedly asking various chefs in her business if they can take on “Hua”. All the replies were negative, with various reasons offered, such as:

○ “we have enough staff”
○ “I don’t want now, because people who has permanent residence I have to consider the workload for them and their age appropriate, and I don’t want to create any problems.”
○ “only can offer him temporary.”
○ “I rather want someone fresh, fresh person easy to train.”
○ “I need someone who get paid 900 dollars only.”

•  Additionally, at 11:10pm, Ms Li/”Tina” asked “Can you stir-fry? If I can, I’ll ask the others to fry” and “Wages can only start at 1300, cooked and then increased”.

•  Further, at 11:12pm, Ms Li/”Tina” continued, “If the food preparation workers are 1200 to start”.

•  At 11:56pm, “Tina” stated:

“Now if you have a job outside you do it first, a late look at the Chadstone noodle shop side may be short of people, now business is not even half of the previous, wait until the government asked 40 people to look at it”

(my emphasis)

[7] I also noted that on 13 November 2020 at 11:56, Mr Liuk/”Hua” wrote:

“Another week, I really can’t wait any longer

You sent me so many pictures that you just want to tell me that my employment is not your responsibility

After all this, this has made me sad after working for you for 7 years.

But, I need to let you know, I’m your full-time employee, I work with you, Dainty is your company, don’t find reasons to excuse your behaviour.

Please follow the FairWork regulations, not just to follow what you say.

I spent two hours today calling fair work and consulting about my job and my right as an employee.

You have dragged this on for four months, did not arrange for me to work even a day, this is your wrong, because your business continues to run, Although now the restrictions has been over three weeks, you still did not arrange for me to work, but also found a lot of excuses, but also told me to go outside to find a job, in the law of fairness, I did not work for four months, is equivalent to driving me out, and asking me to get a job from elsewhere. I think you are firing me.

Now, please follow the rules of regulations, I have worked in Dainty for seven years, please pay me back the annual leave that you have owed me throughout all these seven, deduct the annual leave I have taken, and the rest, please settle it to me

In the law of fairness, this is what you have to give, I think you should know more about these labor laws than I do, so please seriously face this problem” 5

[8] As recorded in the December Decision, I concluded that Mr Liuk’s employment was terminated at the initiative of the Respondent on 5 November 2020 when Ms Li communicated the following to Mr Liuk in WeChat correspondence that followed a period of approximately four months during which he had been offered next to no work:

a) “the restaurants I’ve asked now don’t want to accept you”;

b) “I don’t think there’s a place for you to do it at the moment”;

c) “You are actually not suitable to be head chef to manage the kitchen”;

d) “I suggest you go outside and see if you can find the right job for you”;

e) “I also want to ask the Clayton shop and city noodle shop to see if they are willing to have you”;

f) “why others have jobs, you do not, you do not look for your own problems, you question me?”; and

g) “Now if you have a job outside you do it first”.

[9] I also stated that I was persuaded that by 13 November 2020, Mr Liuk had come to the realisation that his employment had been terminated by the Respondent. I concluded that Mr Liuk’s WeChat message to Ms Li that day suggested this and I observed it was met with a barrage of replies from Ms Li on 14 November 2020. None of these replies were helpful to the relationship between the parties. They outlined the following:

● At 12.08am:

“Are you threatening me? I know your full name, do you think I’m afraid of you? I believe that you can find a better job outside if you had did well in those few years. I should have said that you have been lazy in my shop, because you have been fooling me, I’m not asking you to account for it, you’re threatening me? What else can you do! You go out to find so many jobs, you don’t even know your individual value, you come to threaten me? We have evidence to prove that my office never said to fire you, you put shit on my head? You come back to work and get payed 1200 dollars as the preparation person to start, (I was going to give you 1300 before but..,) you are now willing to do what you do, you do not want to do is equivalent to you not wanting this job. You come back, I can only start from 3 days to give you work if you would like you to contact me. If you don’t want this offer, it means you don’t want this job.”

● At 12.12am:

“I went to see all the head chefs in all the shops last week to talk about something for you. I have been seeing the old staff doing shameful acts, have you ever seen your own shameful acts, you are a shit head chef. One day a 100 dollar takeaway list, you couldn’t do it by yourself, but asked Aling down to help you? I’m going to tell you, if I tell people about this, would you want to stay in Melbourne after that? You don’t correct your own problems, what you should say to me now is how you’re going to correct your problems and get back to work, but now you’re threatening me, who do you think you are?”

● At 12.25pm:

“You don’t need to pretend in front of me, you aren’t educated, the outbreak let countless people loose their jobs for more than half a year and you said that I fired you because I didn’t reschedule you to work in 4 months. Wouldn’t all Melbourne employees be suing their bosses for dismissal? Which law explains that to you? During the outbreak, the first person I arranged to work with was you! Hot pot shop only earns 100 dollars a day for takeaway and even less on some days, I couldn’t cover your salary, but I still scheduled your work, I also give you a shift, not this is your problem, you couldn’t even make a 100 dollar takeaway order, and you even didn’t know where to put the food, but also to find someone to call down to help you, don’t you feel shameful about yourself? You Hua, do you want to work in this industry in the future? Have I done something wrong to you? Be sorry about you? I don’t make any money making cakes at all, its all just to get you a job. It’s not my problem that later the cake is not good to sell, that is not my problem, when I was packing things, I found that you bought so many moulds and materials, that the company is completely losing money to help you make cake, how can you say that I didn’t treat you right ? What do you think you can do now? In Dainty all these years, if you can seriously really do well, you can be payed 2000 a week have someone to ask you, of course you know its not easy to find the job outside, and you still use this tone to speak to me. It’s not you who’s sad, it’s me!!”

● At 12.27pm:

“Consider for yourself, 1200 a week, you come back to work three days a week, wait for business to resume working hours, if you do not come back, it will be your own resignation. Don’t talk to me like this, I don’t have this time waiting for you!” 6

[10] Mr Liuk filed his unfair dismissal application at 9.13pm on 15 November 2020. Ms Li sent further WeChat messages as follows:

● At 11.27pm on 15 November 2020:

“I now give you a job, glen rice shop, 6 days a week work, one day is to replace Mr King. If you need this job, you can contact me.”

● At 2.22am on 22 November 2020:

“Hua, please come to me, let’s talk. Shouye (Tina’s husband) also advised me a lot, others do not say, after all, also work together for several years. You want to know, if you’re coming back, we’ll talk about how to get your job done, it’s unlikely that the salary will go back to the previous head chef’s salary, but if you want to be a little bit more, we’ll talk about how we can do that. Your family is burdened, and I understand. If you really don’t want to talk, if you don’t come back, you’ll go through the formalities with Jessica, no problem.” 7

[11] The final exchanges between Mr Liuk and Ms Li occurred on 26 November 2020. Mr Liuk sent a message at 4.05pm, which stated:

“On the evening of the 14th, you said that my work value isn’t even worth a penny, so many years, every time you open a new shop, I will try my best to help you find workers, no credit, but also hard work, after reading your messages, I don’t want to talk about it, I had lodged the application to Fair Work. If you want to sincerely solve the problem privately, I’m ok with that, but the result will be the same, but that is your choice.”

[12] The reply from Ms Li at 4.56pm on 26 November 2020 stated:

“You know clearly, the reason I’m angry is that on the night of the 13th you talk about fair work. I did consider about arranging a job and I’ve asked a lot of head chefs over and over again, as you know, only few people in the kitchen right now, everyone ask for low-wage employees and people with followship. Others do not explain, you in Daity so many years, as you said, there is credit and hard work, we have been very happy before, at this moment, is not on the right channel with each other, to this day, you don’t want to talk about work and decided to go, then I wish you go happily. No matter what you think of me, I will certainly consider the relationship we have. You ask Jessica to talk about the last of your resignation procedures, and so on, wait till everyone has the good mood, then come out for dinner and chat. Nothing else, I wish you happy work outside, business is good, If you are not happy outside, we will talk.” 8

Initial matters to be considered

[13] I will deal with the four matters referred to in ss.396(a)-(d) of the Act, as follows.

[14] Firstly, as I found in the December Decision, Mr Liuk’s application was made within the 21-day period required by s.394(2) of the Act (s.396(a) of the Act).

[15] Secondly, Mr Liuk is a person protected from unfair dismissal. He had completed the minimum employment period, having commenced employment with the Respondent from at least 1 July 2014. Further, I am satisfied that at the time of his dismissal, Mr Liuk’s alleged earnings were less than the high income threshold (s.396(b) of the Act).

[16] Thirdly, s.396(c) of the Act requires me to consider whether the dismissal was consistent with the Small Business Fair Dismissal Code (the Code) before turning to deal with the issue of whether the dismissal was unfair. 9

[17] The Code is also referred to in s.385(c) of the Act and the Note to s.385 states, “For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[18] Section 388 of the Act then provides:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.” (emphasis added)

[19] The definition of a “small business employer” for the purpose of the Act is in s.23, with s.23(1) providing that “A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.”

[20] The Respondent has asserted it has eleven employees and there is nothing before me to dispute the Respondent was a “small business employer” at the time of Mr Liuk’s dismissal.

[21] The Code declared by the Minister pursuant to s.388(1) is 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.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[22] It was not alleged and nor do I find that Mr Liuk engaged in any form of behaviour that could be considered sufficiently serious to have justified summary dismissal. Nor was there evidence that persuades me that prior 5 November 2020 there were issues raised with him relating to his capacity or conduct from which he received a warning that he was at risk of being dismissed. The Respondent has at no stage submitted or asserted that it complied with the Code but in any event, I am not satisfied based on the material and evidence before me, that the Respondent could have held the requisite belief for either form of dismissal contemplated by the Code that was, objectively speaking, based on reasonable grounds. 10

[23] Having considered whether the dismissal of Mr Liuk was consistent with the Code, I am not satisfied it was (s.396(c) of the Act).

[24] Fourthly, the question as to whether or not the circumstances involved a genuine redundancy within the meaning of s.389 of the Act has not been raised. In any event, I am satisfied the question does not arise and find on the facts before me that this was not a case of genuine redundancy.

Section 385 – was Liuk’s dismissal unfair?

[25] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 of the Act provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

Section 385(a) – was Liuk dismissed?

[26] There was no dispute and I am satisfied that Mr Liuk was dismissed within the meaning of s.386(1) of the Act.

Section 385(c) – Small Business Fair Dismissal Code

[27] As concluded in paragraph [23] above, I am satisfied the dismissal was not consistent with the Code.

Section 385(d) – Genuine redundancy

[28] As outlined in paragraph [24] above, I am satisfied the dismissal was not a case of genuine redundancy within the meaning of s.389 of the Act.

Section 385(b) – Harsh, unjust or unreasonable

[29] The criteria I must take into account when required to assess whether a dismissal was harsh, unjust or unreasonable, within the meaning of s.385(b) of the Act, are set out in s.387 of the Act.

“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.”

[30] I am under a duty to consider each of these criteria in reaching my conclusion and will do so below. 11

Was there a valid reason for dismissal relating to Mr Liuk’s capacity or conduct? (s.387(a))

[31] In considering whether the dismissal of Mr Liuk was harsh, unjust or unreasonable, I am required to take into account whether there was a valid reason for the dismissal related to his capacity or conduct (including its effect on the safety and welfare of other employees).

[32] A valid reason need not be the reason given to Mr Liuk at the time of the dismissal. 12 The reason or reasons should be “sound, defensible and well founded”13 and should not be “capricious, fanciful, spiteful or prejudiced”.14

[33] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 15 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees). Where conduct of an employee is relied upon to justify the decision to terminate employment, the Commission needs to be satisfied that the conduct as alleged, occurred.16 A mere suspicion of conduct does not amount to a valid reason.17

[34] Mr Liuk had been employed as a Chef in the Respondent’s ‘Lonsdale’ Restaurant up until the time it was impacted by COVID-19 and his hours were reduced and then withdrawn altogether. Evidence from Mr Shao was that the Respondent’s response to COVID-19 as far as the Lonsdale Restaurant was concerned was to change its offering from ‘hot-pot’ cuisine in a fine dining setting, to take-away stir-fry cuisine in order to keep the restaurant running. The Respondent was of the view that Mr Liuk could not return to work at the Lonsdale restaurant because he was not a stir-fry Chef. Viewing the WeChat exchange between Mr Liuk and Ms Li on 5 November 2020 in this light, it would seem that Mr Liuk was asking when he could return to work in his pre-COVID-19 role and Ms Li was operating on the basis that it had become necessary to place Mr Liuk elsewhere and she was attempting to effect this. Ms Li gave Mr Liuk some blunt feedback that touched upon his capacity and performance in the process of doing so but it was in the context of an exchange directed towards finding an Mr Liuk alternate place of work.

[35] I am therefore satisfied that this is not a case in which the question of whether or not there was a valid reason for Mr Liuk’s dismissal related to his capacity or conduct falls for determination.

Notification of the valid reason – s.387(b)

[36] Based on my finding above in relation to s.387(a), this is not a relevant consideration in the circumstances of this case.

Opportunity to respond to any reason related to capacity or conduct – s.387(c)

[37] Similar to my finding above in relation to s.387(b), this factor is not a relevant consideration in this case.

Unreasonable refusal by the employer to allow a support person – s.387(d)

[38] The question of a support person is not a relevant consideration in the circumstances of this case. The issue did not arise. 18

Warnings regarding unsatisfactory performance – s.387(e)

[39] Notwithstanding what I have outlined at [34] above, I do not consider that Mr Liuk was terminated on the basis of unsatisfactory performance. As such, this factor is not a relevant consideration in this case.

Impact of the size of the Respondent on procedures followed – s.387(f) and Absence of dedicated human resources management specialist/expertise on procedures followed – s.387(g)

[40] The Respondent did not address these considerations in its outline of argument. Nonetheless, I have noted that while the size of Respondent was outlined as being an entity of eleven employees, Mr Shao gave evidence of the Respondent having had to close six restaurants and place three or four of them into liquidation due to the impact of COVID-19. I do not however consider the size of the Respondent had an impact on the procedures followed. More relevant in this case is the apparent absence of dedicated human resource management specialists or expertise and I am satisfied this had an impact on the procedures followed.

Other relevant matters – s.387(h)

[41] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

[42] Mr Liuk worked for the Respondent for approximately 6 years. He said he had been loyal, worked hard for the business and was considered a good worker. While Ms Li gave Mr Liuk some blunt feedback in her WeChat messages, particularly after his termination, the feedback appeared responsive to him having raised a number of matters with her and urging her to “follow the FairWork regulations”. At the Determinative Conference, Mr Shao conveyed Ms Li’s apology for having used harsh words.

[43] Mr Liuk has outlined before me allegations that he was not issued with payslips, such that he queries whether correct wages and entitlements have been paid to him. For example, Mr Liuk claims to have worked 54 hours over 6 days each week and says that despite working on public holidays, he was not paid public holidays rates of pay. He also alleges he was not paid for 12 weeks’ annual leave or notice upon termination. Mr Liuk claims an entitlement to long service leave and suggested he had not been paid superannuation. Mr Liuk is also aggrieved that he did not receive JobKeeper payments due to having been engaged pursuant to a working visa. He alleges that because of this, he was not offered work whereas employees receiving JobKeeper payments were.

[44] The Respondent denied Mr Liuk’s allegations regarding underpayments and that his request for payment of annual leave had been refused. Mr Shao’s evidence was that the Respondent’s response to COVID-19 as far as the Lonsdale Restaurant was concerned, was to change its offering from ‘hot-pot’ cuisine in a fine dining setting to take-away stir-fry cuisine, in order keep it running. It was submitted that the reasons for this change of menu were a significant downturn in sales during what it described as the lock down period (April-October 2020), reduced demand for ‘hot-pot’ cuisine and customer preference for stir-fry take away, with the result that the Respondent no longer required the position of Head Chef for ‘hot-pot’ cuisine at the Lonsdale restaurant. Mr Liuk disputes both the suggestion that he could not perform stir-fry take away duties and the criticism made of his performance in preparing take-away meals.

[45] Mr Shao said the Lonsdale restaurant currently owed $300,000 to its landlord. As outlined above at [40], Mr Shao also said the Respondent has had to close six of its restaurants and place three or four of them into liquidation due to the impact of COVID-19. Mr Shao stated that approximately one third of the Respondent’s staff had lost their jobs. He said the business is just trying to survive.

[46] The Respondent outlined the following impact on its sales revenue April-October 2020:

2020	2019	Decrease (%)
April	$ 64,169	$ 420,635	-85%
May	$ 87,272	$ 409,310	-79%
June	$ 155,289	$ 379,161	-59%
July	$ 88,782	$ 410,896	-78%
August	$ 76,485	$ 438,780	-83%
September	$ 56,064	$ 373,817	-85%
October	$ 93,129	$ 326,720	-71%

[47] Mr Shao said the Respondent encouraged Mr Liuk and other employees to get other work if they could until such time as it was again able to offer them work when the business started recovering. The Respondent submits it tried to find a position for Mr Liuk in its other restaurants, but the head chefs in them did not want to hire him. The WeChat messages reveal a range of reasons for this. The Respondent also referred to offers and entreaties made following the filing of Mr Liuk’s unfair dismissal application which were not taken up by him. Mr Liuk says that by that stage the trust had been broken and he no longer wished to discuss matters with Ms Li because of the way he had been treated. Mr Liuk claims it is unfair that he was being offered less responsibility and less pay.

Consideration

[48] I have previously found Mr Liuk was dismissed on 5 November 2020. I am satisfied that by this time, the Respondent had determined it no longer required the position of Head Chef for ‘hot-pot’ cuisine at the Lonsdale restaurant. Whilst this matter does not involve a genuine redundancy within the meaning of s.389 of the Act, I am satisfied Mr Liuk’s position was redundant. I am also satisfied Mr Liuk’s employment with the Respondent appeared to have been without conflict until COVID-19 began impacting on its operations, financial position and capacity to offer Mr Liuk work.

[49] The Respondent advised the restaurant Industry Award 2010 (the Award) applied to Mr Liuk’s employment. In a redundancy situation confronting an employee to whom the Award applies, an employer is required to give notice of the changes and then discuss the introduction of the changes, their likely effect and measures to avoid or reduce their adverse effects. Further, all relevant information is to be provided in writing including the nature of the changes and their expected effect and any other matters likely to affect the employee. 19 It is clear that the Respondent complied with some of these requirements in a manner of speaking but certainly not in strict compliance with the Award. I attribute this in part to the Respondent’s apparent absence of dedicated human resource management specialists or expertise.

[50] I further observe that in a redundancy scenario, Clause 36.1 of the Award provides as follows:

“36.1 Transfer to lower paid duties on redundancy

(a) Clause 36.1 applies if, because of redundancy, an employee is transferred to new duties to which a lower ordinary rate of pay applies.

(b) The employer may:

(i) give the employee notice of the transfer of at least the same length as the employee would be entitled to under section 117 of the Act as if it were a notice of termination given by the employer; or

(ii) transfer the employee to the new duties without giving notice of transfer or before the expiry of a notice of transfer, provided that the employer pays the employee as set out in clause 36.1(c).

(c) If the employer acts as mentioned in clause 36.1(b)(ii), the employee is entitled to a payment of an amount equal to the difference between the ordinary rate of pay of the employee (inclusive of all-purpose allowances and penalty rates applicable to ordinary hours) for the hours of work the employee would have worked in the first role, and the ordinary rate of pay (also inclusive of all-purpose allowances and penalty rates applicable to ordinary hours) of the employee in the second role for the period for which notice was not given.”

[51] It is evident therefore that an option available was for the Respondent to transfer Mr Liuk to lower paid duties with notice or with a payment calculated in accordance with Clause 36.1(c), if no notice of the transfer was given. In this case, various options for lower paid duties were raised but it is apparent that the parties were not aligned on the rate of remuneration that might have been available for any of the positions offered with ongoing work.

[52] I accept that the Respondent has been substantially impacted by COVID-19 and the decision-makers are undoubtedly under enormous pressure as a result. It needs to be appreciated that the industry in which the Respondent operates has been severely and profoundly impacted by COVID-19 and the measures put in place to combat it. I also accept the profound impact COVID-19 has had on Mr Liuk. He went for months without work and his normal income which placed him under enormous financial pressure and stress. This case is the culmination of circumstances which neither party invited.

[53] Nonetheless, I consider the failure of the Respondent to adequately consult with Mr Liuk regarding the decisions it made regarding his employment due to the impact of COVID-19 and the processes it adopted in discussing the effect and redeployment opportunities renders the dismissal harsh. Accordingly, I find that Mr Liuk’s dismissal was unfair. Mr Liuk’s application for unfair dismissal remedy is therefore granted.

Remedy

[54] In the circumstances where I have found Mr Liuk was protected from unfair dismissal at the time of being dismissed and that he has been unfairly dismissed, s.390 of the Act prescribes that a remedy is available. Accordingly, I am required to determine whether to order the reinstatement of Mr Liuk or, in the circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied that such an order is appropriate in all the circumstances. 20

[55] The primary remedy under the Act is reinstatement, however Mr Liuk does not seek reinstatement. In the circumstances of this case, particularly where Mr Liuk has provided the following evidence, I am satisfied it is inappropriate to order reinstatement:

“I am scared to work for Tina after I was heavily and disgustingly insulted. I even worry that Tina will intentionally do something for me to lose my new job as she said in the Wechat message. The incident had caused me great stress and trauma, and even led to sleeping issues; which had an impact on my general health. If I were to return to my previous job, the toxic workplace environment and unhealthy relationships would lead to harmful impacts on myself as an individual. I do not wish to be bullied by her and cause further emotional stress.” 21

[56] I must therefore consider whether it is appropriate in all the circumstances to make an order for payment of compensation (s.390(3)(b)).

[57] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered.

[58] In considering each of the criteria in s.392 of the Act, it is useful to refer to the helpful restatement of principles to be applied in the assessment of compensation in Johnson
v North West Supermarkets T/A Castlemaine IGA: 22

“[9] The well-established approach to the assessment of compensation under s 392 is to apply the ‘Sprigg formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the current legislative framework in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c), that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[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’...”

[10]The identification of this starting point amount ‘necessarily involves assessments as to future events that will often be problematic,’ but, as the Full Bench observed in McCulloch v Calvary Health Care Adelaide, ‘while the task of determining an anticipated period of employment can be difficult, it must be done.’

[11]Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.” (references omitted)

[59] The Sprigg formula was discussed and refined in Ellawala v Australian Postal Corporation 23as follows:

“[31] The principles applicable to determining an amount to be ordered in lieu of reinstatement are dealt with in Sprigg. In that case the Full Bench endorsed the following approach:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

[32] Any amount provisionally arrived at by application of these steps is subject to whether offsetting weight is given to other circumstances, including those that need now to be taken into account under paragraphs 170CH(7)(a), (b) and (c). The legislative cap on the amount able to be ordered is then applied pursuant to ss.170CH(8) and (9).

[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

“...we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.”

[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. An example may assist to illustrate the approach to be taken.

[35] In a particular case the Commission estimates that if the applicant had not been terminated then he or she would have remained in employment for a further 12 months. The applicant has earned $3,000 a month for the 18 months since termination, that is $54,000. Only the money earned in the first twelve months after termination - that is $36,000 - is deducted from the Commission’s estimate of the applicant’s lost remuneration. Monies earned after the end of the “anticipated period of employment”, 12 months after termination in this example, are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.

[36] The next step is to discount the remaining amount for “contingencies”. This step is a means of taking into account the possibility that the occurrence of contingencies to which the applicant was subject might have brought about some change in earning capacity or earnings.

…

[45] In relation to the fourth step set out in Sprigg we note that the usual practice is to settle a gross amount and leave taxation for determination.” (my emphasis, references omitted)

[60] In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, 24 the Full Bench stated that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. The Full Bench also proffered that the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.

[61] I will assess compensation having regard to these matters.

Remuneration that would have been received if the dismissal had not occurred– s.392(2)(c)

[62] I have found that Mr Liuk’s employment with the Respondent appeared to have been without conflict until COVID-19 began impacting on its operations and financial position and on its capacity to offer Mr Liuk work. I am also satisfied that but for COVID-19, there was nothing to suggest that Mr Liuk would not have remained in his employment with the Respondent. However, the impact of COVID-19 on the Respondent has been profound and as far as Mr Liuk is concerned, it was such that the Respondent determined it no longer required the position of Head Chef for ‘hot-pot’ cuisine Mr Liuk held at the Lonsdale restaurant. While transfer to other positions was discussed on 5 November 2020, the quality of the process and dialogue could and should have been better. Had the dialogue not degenerated in the way it did, Mr Liuk’s employment may have continued but ultimately, if the only options available involved changes in status and remuneration that were not acceptable to Mr Liuk, termination was likely inevitable.

[63] Having regard to these factors, I am satisfied that with better process and dialogue Mr Liuk would have remained in employment with the Respondent for a further period of at least 3 weeks because I have noted there was WeChat correspondence between 5 November 2020 – 26 November 2020 in which a range of options were explored after the initial blunt and harsh words on 5 November 2020 had set things off on the wrong footing. The end result might still have been the same but the obligation to fulsomely consult and explore redeployment should have been fulfilled.

[64] Mr Liuk stated that his earnings were $1,500.00 net per week and claims he worked 54 hours per week. The Respondent made two different claims regarding Mr Liuk’s gross earnings, being $1,085.00 gross per week and $28.55 gross per hour for variable hours each week. 25 I have noted in the WeChat exchanges Mr Liuk referred to a salary of $1,500 per week, whereas Ms Li discussed lesser roles where Mr Liuk would start at $1,200 or $1,300 per week. Neither party produced any documentary evidence supporting their respective claims. Having regard to what has been put before me, I have determined I will assess compensation using a weekly salary of $1,500.00 gross. As such, the remuneration Mr Liuk would have received during the further 3-week period would have been $4,500.00 gross. This is the starting point.

Remuneration earned – s.392(2)(e) and income reasonably likely to be earned – s.392(2)(f) and (g)

[65] Remuneration earned from the date of dismissal to the date of any compensation order is required to be taken into account under s.392(2)(e) of the Act. Remuneration reasonably likely to be earned from the date of any compensation order to the date the compensation is paid is to be taken into account under s.392(2)(f) of the Act. However, as outlined above, it was stated by the Full Bench in Ellawala v Australian Postal Corporation: 26

“Monies earned after the end of the “anticipated period of employment” … are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.”

[66] Mr Liuk’s evidence was that he did not earn any income in the three weeks following 5 November 2020. Therefore, while he provided details of having earned $6,300.00 gross from 11 January 2021 – 14 February 2021 and of continuing earnings of $1,400 gross per week, these are not to be deducted.

Length of service – s.392(2)(b) and any other matters – s.392(2)(g)

[67] Mr Liuk gave the following evidence:

“I would like to have 15 weeks financial compensation to cover my wages of lost due to my family went through a very difficult time after I had no work at all after 12th July 2020. I was discriminated due to under working visa without jobkeeper payment.” 27

[68] Mr Liuk had been employed for approximately six years at the time of his dismissal. He was dismissed without notice nor payment in lieu for what would otherwise have been his entitlement of five weeks’ notice. It is appropriate to consider and take into account Mr Liuk’s length of service and his entitlement to notice under s.392(2)(b) and/or as a relevant matter under s.392(2)(g). 28

[69] Mr Liuk makes various additional claims for underpayment or non-payment of wages and employment entitlements. In terms of any claim for redundancy entitlements, I note there may be a dispute regarding Mr Liuk’s eligibility on the basis that the Respondent was a small business employer at the relevant time. Further, I have noted Clause 36.1 of the Award and s.120 of the Act. I am of the view that if Mr Liuk maintains any underpayment claims, the appropriate course is for him to pursue them through a court of competent jurisdiction.

[70] I do however consider it is appropriate for Mr Liuk to be compensated for the loss of his entitlement to five weeks’ notice which he suffered because of his unfair dismissal. The quantum of five weeks’ pay at what I have determined to be Mr Liuk’s rate of pay of $1,500.00 gross per week produces a total of $7,500.00.

[71] I do not consider there is any basis for any deduction for contingencies in this matter and it will be left to the Respondent to deduct taxation required by law.

Viability – s.392(2)(a)

[72] I have noted the evidence before me, expressed in broad terms, regarding the state of the Respondent’s business but it does not persuade me to reduce the compensation amount I have assessed on the basis of the impact it might have on the viability of the Respondent.

Mitigation efforts – s.392(2)(d)

[73] In considering whether Mr Liuk has taken steps to mitigate the loss suffered as a result of the dismissal, I should take into account whether he acted reasonably in the circumstances. 29 I find that Mr Liuk’s efforts in securing work since his dismissal warrant no adjustment on account of this factor.

Misconduct – s.392(3)

[74] There is no basis for me to conclude there was misconduct on the part of Mr Liuk that contributed to the decision of the Respondent to dismiss him and I therefore do not make any reduction on account of this factor in the proposed compensation.

Compensation cap: s.392(5)&(6)

[75] The amount of compensation I order must not exceed the lesser of:

1) the amount of income Mr Liuk gave evidence of receiving during the 26 weeks immediately prior to his dismissal was $11,342.03; 30 and

2) half the amount of the high income threshold immediately before the dismissal (in this case $153,800 ÷ 2 = $76,800.00).

[76] As such, the compensation cap in this matter is $11,342.03 and the amount of compensation proposed must not and does not exceed this.

Instalments: s.393

[77] I do not consider that there is any reason for compensation to be made by way of instalments.

Shock, Distress: s.392(4)

[78] While I accept Mr Liuk is aggrieved by the manner of his dismissal and things that were said about him, the amount of compensation calculated must not and will not include a component for shock, distress, humiliation or other analogous hurt caused to him as a result.

Conclusion

[79] I am satisfied that Mr Liuk was protected from unfair dismissal, that the dismissal was unfair and that order for compensation is an appropriate remedy in all the circumstances. The overarching requirement in assessing compensation is to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case. 31 In this case, I consider the appropriate amount of compensation to be awarded to Mr Liuk equates to $7,500.00, less taxation as required by law.

[80] An order requiring the payment of this amount within 14 days will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

Mr E.H. Liuk on his own behalf.

Mr Shao for Dainty Age One Pty Ltd T/A Dainty Sichuan Food.

Hearing details:

2021.

Melbourne (via Telephone):

February 23.

Final written submissions:

Printed by authority of the Commonwealth Government Printer

<PR727348>

 1   [2020] FWC 6784.

 2   DCB pages 58-84.

 3   DCB at page 21.

 4   DCB at pages 64-75.

 5   DCB at pages 76-78.

 6  DCB at pages 78-81.

 7   DCB at pages 82-83.

 8   DCB at pages 83-84.

 9   TIOBE Pty Ltd T/A TIOBE v Chen [2018] FWCFB 5726 at [24].

 10   Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services[2015] FWCFB 5264 at [39]-[42]; Grandbridge Limited v Wiburd[2017] FWCFB 6732 at [14].

 11   Sayer v Melsteel Pty Ltd[2011] FWAFB 7498.

 12   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

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

 14   Ibid.

 15   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685.

 16   King v Freshmore (Vic) Pty Ltd (AIRC, Full Bench, 17 March 2000), Dec 283/00 M Print S4213 at [23]–[26].

 17   Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.

 18   Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542].

 19   Restaurant Industry Award 2010, Clause 32.

 20   Section 390(3) of the Act.

 21   DCB at page 17.

 22   [2018] FWC 679.

 23   Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000).

 24   [2017] FWCFB 429 at [43].

 25   DCB at pages 87, 94 and 95.

 26   Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000).

 27   DCB at page 18.

 28   Double N Equipment Hire Pty Ltd t/a A1 Distributors v Alan Humphries[2016] FWCFB 7206 at [34].

 29   Biviano v Suji Kim Collection PR915963 at [34].

 30   DCB at page 8.

 31   McCulloch v Calvary Health Care Adelaide[2015] FWCFB 873 at [29].