Gail Ayton v You Come Pty Ltd t/a Foodworks Ashmont

[2019] FWC 6585

[2019] FWC 6585

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394—Unfair dismissal

Gail Ayton
v
You Come Pty Ltd t/a Foodworks Ashmont
(U2019/4473)

DEPUTY PRESIDENT SAMS SYDNEY, 25 SEPTEMBER 2019

Application for an unfair dismissal remedy – long serving casual retail employee – uncooperative respondent – failure to attend proceedings or comply with directions – alleged post reason for dismissal – allegation inconsistent with reference – non-compliance with Small Business Fair Dismissal Code – no valid reason for dismissal – respondent’s preference for employing staff from Asian backgrounds was the real reason for dismissal – dismissal substantively and procedurally unfair – reinstatement inappropriate – compensation to be ordered – amount of compensation subject to further submissions.

INTRODUCTION

[1] Ms Gail Maree Ayton was employed as a casual Shop Assistant at You Come Pty Ltd t/a Foodworks, Ashmont (the ‘respondent’) in Wagga Wagga, New South Wales. The store is owned by Mr Jianbin ‘Eddie’ Wang, and at the time of Ms Ayton’s dismissal, it employed seven staff, including Ms Ayton. Ms Ayton commenced employment with Mr Wang in, or around July-August 2016, and she had been employed in the same position, in the same store, by previous employers for over 20 years. Her employment terms and conditions were governed by the General Retail Industry Award 2010 (the ‘Award’). She was paid a casual rate of $25.99 an hour.

[2] The circumstances and subsequent reasons provided for Ms Ayton’s dismissal are disputed between the parties. Shortly stated, at 7:26pm on 3 April 2019, Ms Ayton was sent a text message by Mr Wang which reads:

‘Hi Gail

This is eddie, I decide (sic) to give job (sic) to someone else but I will let u (sic) know if I need to to (sic) work, sorry for that’

I shall return to the detail of the relevant facts and circumstances before and on 3 April 2019.

[3] On 14 April 2019, with the assistance of the Riverina Murray (Albury) Legal Aid Office, Ms Ayton (hereafter referred to as the ‘applicant’) filed an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’), seeking a remedy for her alleged unfair dismissal by Mr Wang on 3 April 2019.

[4] In accordance with my usual practice, I issued directions and convened a pre-hearing telephone conference on 5 June 2019 in order to explore settlement of the applicant’s unfair dismissal claim. Despite my Chambers attempting to contact Mr Wang on both his mobile and the Foodworks, Ashmont numbers, he was unable to be reached. I then decided to commence the conference in Mr Wang’s absence. The applicant was present and represented herself. During the telephone conference, Mr Wang proceeded to contact my Associate, advising that he had a sick baby and was unable to attend the telephone conference. My Associate offered to transfer Mr Wang into the telephone conference which was concurrently running at the time of Mr Wang’s call. Mr Wang declined to participate.

[5] Having not heard from the respondent for close to a week after the telephone conference, I had cause for my Associate to email the respondent on 11 June 2019 as follows:

‘Dear Mr Wang,

I refer to the above matter, and refer to your non-attendance at the teleconference listed on Wednesday 5 June 2019, and your failure to comply with the Directions sent on 17 May 2019, which required you to file submissions by 4pm 7 June 2019.

His Honour requires an explanation by way of evidence as to your non-attendance and failure to comply with the directions by close of business Friday 14 June 2019. If you do not provide an explanation, and/or lodge your submissions by this time, the Deputy President will proceed to consider the matter on the materials before him. This may result in an adverse finding against you should you not provide satisfactory explanation or provide any evidentiary basis for Ms Ayton’s dismissal by this time.’

No response was provided by the respondent by the specified time.

[6] My Chambers made a further attempt to contact the respondent on 15 July 2019, attaching the submissions of the applicant and resending the notice of listing and directions via email to the respondent’s email address. On 17 July 2019, the respondent proceeded to call and email my Chambers on a number of occasions in a short space of time. When the respondent then emailed my Chambers in the afternoon of 17 July 2019, indicating that the notice of listing and directions were sent to his junk mail, I had cause for my Associate to email the respondent as follows:

‘Chambers has provided you with a number of opportunities for you to be involved, on behalf of the respondent, with this matter. These include:

•  Emailing you a notice of listing for the teleconference held on 5 June 2019;

•  Calling your business landline and mobile on at least three occasions prior to the commencement of the teleconference on 5 June 2019; and

•  Emailing you on 11 June 2019 to provide you with a final opportunity to explain the reasons in writing for your non-attendance at the teleconference and/or lodge your submissions, providing you with an additional week than that which was provided in the directions.

Additionally, I note our brief conversation on 5 June 2019 when you called close to the conclusion of the teleconference. You were provided with the opportunity to join the call with His Honour and the applicant which you refused. You were well aware that the matter would not conclude due to your non-attendance at the teleconference. His Honour does not consider your reasons for your lack of communications with Chambers as acceptable, and as such, the Deputy President will not reopen the directions issued on 17 May 2019. His Honour will consider the matter with the materials currently before him. His Honour has your materials set out in your Form F3 lodged 6 May 2019, and will take these into account when making his decision.’

[7] Due to the non-compliance of the respondent with directions of the Commission, I have decided to determine the matter, ex parte, considering the materials filed by both parties in the case.

EVIDENCE AND SUBMISSIONS

[8] Having not been provided with any submissions by the respondent, in accordance with the directions issued to parties on 17 May 2019, and my subsequent email to parties of 11 June 2019, the only evidence provided was that in the information contained in the applicant’s Form F2 of 18 April 2019, and the respondent’s Form F3 filed 6 May 2019, and the documentation filed by the applicant on 23 June 2019.

The respondent’s case

[9] In the Form F3, the respondent indicated that as it is a small business employer, it objected to the application on the basis that it had complied with the Small Business Fair Dismissal Code (the ‘Code’) when terminating the employment of the applicant. It also alleged that the applicant engaged in misconduct by way of ‘money shortages’ and her ‘absences’ from work, without any reasons or notice provided to the respondent.

[10] The respondent provided seven cash register receipts over a period between December 2018 and April 2019. The amounts which are alleged to be missing money range from $5.10 (on 28 March 2019) to $30.70 (on 2 April 2019).

[11] On 2 April 2019 (hereafter referred to as the ‘2 April 2019 incident’), the respondent claimed that it called the applicant regarding a money shortage on the cash register that day. The applicant said that she was not sure why there was a shortage in the cash register. The respondent claimed that it had warned the applicant ‘so many times, but this time she only said she didn’t know’. The respondent claimed the seven receipts he provided demonstrate that money shortages ‘happened very often’ while Ms Ayton was working. This was further supported by a text message dated 2 April 2019 which stated:

‘Hi Gail

This is eddie (sic), u (sic) got (sic) money short again, can u (sic) ring me back ?’

The respondent also claimed that the next day, the applicant failed to notify him of her non-attendance on shift.

[12] Further the respondent alleges that around 10:30am-11am on 3 April 2019, the applicant indicated to Ms Ivy Zhong, Manager, that she had had ‘enough of the shop’ and on three occasions stated ‘enough, enough, enough’. At 5:43pm on the same day, Ms Ayton sent an SMS (it is not clear as to whether Ms Zhong or Mr Wang was the recipient) stating:

‘I do apologise for letting you down today am i (sic) working tomorrow xx’

[13] At 7:43pm, the respondent terminated the employment of the applicant by text message (see: [2] above). The respondent stated that ‘Gail’s no reason (sic) absent made me make a decision to give her position to someone else at once, which can make sure the shop can be (sic) running’.

The applicant’s case

[14] At the time of her dismissal, the applicant was 66 years of age. She said that she commenced employment with Mr Wang in the first week of July 2016, and had been employed in the same position in the store for over 20 years. She has limited technological capability, and around the time of filing her application with the Commission, she sustained an injury which inhibited her ability to write and type.

[15] The applicant filed a short email and a photo of a one-page handwritten document being a potpourri of sentences, dot points and commentary. Given she was unrepresented, to the extent it can be so described, I shall regard this document as her evidence.

[16] In this material, the applicant claimed that ‘serious allegations’ had been made against her by the respondent. These allegations were in relation money that had allegedly gone missing from cash registers in the Foodworks store which she operated on her shifts. She said that she shared the same cash register with Mr Wang. At no time, had she ever been approached by management about any issues relating to money allegedly going missing from cash registers in the store.

[17] In relation to the 2 April 2019 incident, the applicant did not dispute that the cash register that she was working on was approximately $30 short. However, she claims that this was Mr Wang’s fault, as Mr Wang did not provide her with a $20 note and a bundle of 50 cent pieces. The applicant also stated that ‘I have put in reg over $100 (share reg)’, and that she was the only employee who was required to reimburse the cash registers any time money went missing.

[18] The applicant also referred to a previous incident on 29 March 2019, where Mr Wang used the EFTPOS machine attached to the cash register for a cash sale for $305.00, yet he ‘gave the customer $350’. Had she not picked up this error, she would have been required to repay the difference. The applicant also stated that ‘if a serious matter occurs company policy is to sign three verbal warning documents and then sign a written letter.’ The applicant also alleged that she had complained to Ms Zhong on two occasions about workplace harassment regarding another work colleague; both of which were ignored.

[19] On 3 April 2019, the applicant was sent a text message by Mr Wang, stating that her employment with the respondent had been terminated (see: [2] above). In the applicant’s Form F2, she alleges that:

‘There was no disciplinary action taken against me and I was never warned of any misconduct. I am still not aware as to why I was terminated and why some one (sic) else was hired in my position which is unjust’.

[20] Having not received any reasons for the termination of her employment, the applicant tried to contact the respondent via telephone. She alleges that the respondent did not return her call. The applicant also claims that during the course of her employment with the respondent, she had never been the subject of any performance or conduct issues.

[21] Contrary to the allegations of misconduct made against her, the applicant provided a letter of reference sent to her by the respondent after her dismissal. It reads as follows:

‘To Whom It May Concern:

I highly recommend Gail Ayton as a candidate for employment. Gail was employed by YOU COME PTY LTD, trading name FOODWORKS ASHMONT supermarket as a Shop Assistant from 2016 to 2019. Gail was responsible for delicateness, including food processing, products ordering, phone order handing and counter check out.

Gail has excellent communication skills. In addition, she is extremely organized, reliable and working hard (sic). Gail can work independently and is able to follow through to ensure that the job gets done. She is flexible and willing to work on any time that is assigned to her. Gail was quick to volunteer to assist in other areas of shop operations as well.

Gail would be an asset to your company and has my highest recommendation. If you have any further questions with regard to her background or qualifications, please to not hesitate to call me.

Sincerely,

Ivy Zhong’

[22] Finally, during the teleconference, the applicant disclosed that she had gained employment in another position for approximately 15 hours per week, but had otherwise had earned no income in the months following her termination.

Additional evidence

[23] In the applicant’s submissions as to the reasons for her dismissal, she claimed that ‘he [Mr Wang] has been trying to get rid of me (I’m not [Chinese])’. Due to a general lack of evidence from either party regarding the reasons for dismissal, I had cause to conduct an inquiry to inform myself, pursuant to s 590(2)(f) of the Act, as to the substance of this claim by the applicant.

[24] After conducting an internet search, I came across a number of past job advertisements by Mr Wang on various Chinese Australian job forums. These posts included the following:

‘IGA supermarket in Wagga Wagga need new staff, must be reliable, speak English, work long term, daily jobs including deli meat, check out and organizing self. Asian Lady preferred…’ (my emphasis)

‘wagga supermarket looking for new staff, daily work including deli meat and check out, no experience required but must speak English well and reliable, please contact [Mr Wang’s mobile number provided], asian staff preferred. (my emphasis)

‘wagga IGA supermarket need new staff to join:

Requirements:

good English speaking, reliable, no experience required, must have PR, please contact [Mr Wang’s mobile number provided] (eddie) if you are interested in, more prefer oversea (sic) people.’ (my emphasis)

CONSIDERATION

[25] Before considering the merits of this application, a number of preliminary matters must be determined which also goes to the respondent’s two objections to the application. An unfair dismissal is defined at s 385 of the Act and is to be read in conjunction with s 396. The sections read as follows:

‘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.

…

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.’

[26] At this juncture, I find as follows:

(i) the applicant’s unfair dismissal application was lodged within the 21 day time limit set out in s 394(b) of the Act.

(ii) Although a casual employee, the applicant worked regular and systematic shifts with the respondent, having been employed in this position (and the same position) for 20 years.

(iii) the applicant obviously completed the minimum employment period, set out in ss 382 and 383 of the Act, being at least 3 years under the ownership of Mr Wang; and

(iv) the applicant was employed under the Award, and in any event, her annual earnings are far less than the high income threshold (s 382(b)(iii)).

Was the applicant ‘dismissed’?

[27] Section 386(1) of the Act provides the meaning of ‘dismissed’. It reads:

‘386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

[28] In Searle v Moly Mines Limited [2008] AIRCFB 1088 a Full Bench of the Australian Industrial Relations Commission (as the Commission was then known) said at [20]:

‘[20] A Full Bench recently considered the meaning of the expression “termination at the initiative of the employer”’ in O’Meara v Stanley Works Pty Ltd. For our purposes it is sufficient to refer to the following passage in which, having referred to the authorities, the Commission said:

“[23] In our view the full statement of reasons in Mohazab [(1995) 62 IR 200] which we have set out together with the further explanation by Moore J in Rheinberger [(1966) 67 IR 154] and the decisions of Full Benches of this Commission in Pawel [Print S5904, 12 May 2000 per Polites SDP, Watson SDP and Gay C] and ABB Engineering [Print N6999, 9 December 1996 per Munro J, Duncan DP and Merriman C] require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” [Mohazab at page 205.] Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”’ (my emphasis)

Was the applicant dismissed at the employer’s initiative?

[29] In my view, there is not a skerrick of doubt that the text message of 3 April 2019 was a termination of employment at the employer’s initiative. To submit that the applicant intended on resigning from her employment when verbally indicating to Ms Zhong she had had ‘enough’, is absurd. I note Ms Zhong gave no evidence in the matter. Plainly, if the applicant had resigned by way of her phone call to Ms Zhong, why would she then send a text message to Mr Wang asking whether she was working the next day? It makes no sense at all; rather, it makes it abundantly clear that Mr Wang intended on capitalising on the applicant’s non-attendance on 3 April 2019 as an excuse to dismiss her.

Small Business Fair Dismissal Code

[30] As this matter involved a small business engaged in a summary dismissal, I shall now turn to the terms of the Code which are expressed as follows:

‘Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

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.’

[31] Aside from the Form F3 lodged by the respondent which disclosed that there were 7 employees of the respondent at the time of the applicant’s dismissal, there was no evidence provided by the respondent to otherwise indicate that it is a small business employer. However, it would seem highly likely, and I am prepared to accept, that such a business would not have more than 15 employees.

Was the Code complied with?

[32] There was no evidence that the respondent had complied with the Code. Even if I accept that Mr Wang was concerned as to the applicant’s non-attendance on one day of employment, and was responsible for a number of minor cash shortages in the cash registers, in no way could such behaviour be reasonably considered to have constituted serious misconduct. Further, there is not a jot of evidence:

•  that he had ever raised these concerns with the applicant before 3 April 2019;

•  of any investigation having been conducted into the alleged misconduct of the applicant; or

•  that he had told her that her job was at risk for these, or any other reasons.

These are all fundamental and serious breaches of the Code. Moreover, it is difficult to reconcile Mr Wang’sallegations of the applicant’s misconduct, with the glowing reference provided by Ms Zhong to the applicant in the aftermath of her termination.

[33] In any event, I am satisfied that the Code could not have been complied with because the applicant’s dismissal was not, in truth, related to her conduct or performance. In my view, supported by the job advertisements posted by Mr Wang, the respondent’s real motive for dismissing her was Mr Wang’s preference to hire staff of Asian speaking backgrounds. I am bound to observe that, prima facie, Mr Wang’s conduct constituted a breach of anti-discrimination laws and/or the applicant’s dismissal was for an unlawful reason, pursuant to s 772(f) of the Act. In either case, Mr Wang may find himself subject to other civil proceedings, for which civil penalties might apply. However, for present purposes the respondent’sjurisdictional objection is dismissed.

[34] From the foregoing reasons, I am satisfied that there are no jurisdictional matters which have been made out such as to disqualify the applicant from pursuing her unfair dismissal rights under s 387 and s 392 of the Act. It is to these matters which I now turn; firstly, as to consideration of whether the applicant’s dismissal was unfair, pursuant to s 387 of the Act:

‘Meaning of ‘harsh, unjust and unreasonable’

The matters required to be taken into account by the Commission, under s 387 of the Act are:

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

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

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

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

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

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

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

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

Whether there was a valid reason for the applicant’s dismissal (s387(a))

[35] The meaning of ‘valid reason’ in s 387(a) is drawn from the judgement of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’). This meaning has been considered and applied by members of the Commission and its predecessors for many years. For example, in Rode v Burwood Mitsubishi Print R4471, a Full Bench of the then Australian Industrial Relations Commission (‘AIRC’) discussed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996, and by citing Selvachandran. The following is an extract from the Full Bench’s decision at [17]-[19]:

‘[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:

“Section 170DE(1) refers to a ‘valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective ‘valid’. A reference to dictionaries shows that the word ‘valid’ has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: ‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In The Macquarie Dictionary the relevant meaning is ‘sound, just or wellfounded; a valid reason’.

In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must `be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.”

[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).

[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.

See also: Nettleford v Kym Smoker Pty Ltd (1996) 69 IR 370.’ (citations omitted)

[36] In my view, there can be no room to doubt that the alleged reasons for dismissal were not provided to the applicant upon her termination, despite her best efforts to gain further clarification as to the reasons for her dismissal. Instead, the reasons for dismissal were only provided, post facto,as a result of the applicant’s unfair dismissal application filed in the Commission, and in a situation where the respondent’s conduct in terminating the applicant was ‘put under the microscope’. Even the respondent’s stated reason, in the 3 April 2019 text message, that he decided to give the job to someone else, could not possibly constitute a valid reason for dismissal.

[37] The later reasons for summary dismissal asserted by the respondent, being ‘money shortages’ and ‘absences’ from work, are weak and lacking any evidentiary base. In any event, the allegations were never put to the applicant before, or after her termination.

[38] In relation to the ‘money shortages’, only a handful of cash register receipts were provided by the respondent in support of its assertion of misconduct by the applicant. The ‘shortages’ merely amounted to a few dollars on a cash register which was dealing in excess of $1000 on each example provided. Had the applicant been minded to steal money for herself (which I do not accept, based on the evidence provided), surely it would have been more than $7 or $10 on any given occasion.

[39] At this juncture, I also wish to raise my concern over the alleged ‘policy’ of the respondent which requires employees to contribute their own money into the cash registers, if they fall short, as set out by the applicant in her statement. The Award does not allow for deductions to be made to an employee’s pay for cash register shortages. It is patently unreasonable to demand such contributions without just cause, or at all. Notwithstanding the lack of evidence provided by both parties about this matter, I caution the respondent in this regard.

[40] In relation to the alleged ‘absences’ of the applicant, despite the lack of evidence from both parties, I am not satisfied that missing one shift over a period of at least three years of employment with an employer, constitutes a valid reason for dismissal, or ever could.

[41] Accordingly, I am satisfied that there was no valid reason for the applicant’s dismissal. This weighs in favour of a finding of unfairness.

Further matters to be considered under s 387 of the Act

[42] Subsections (b)-(e) of s 387 are generally grouped under the rubric of ‘procedural fairness’ or ‘natural justice’ issues. To highlight the importance of procedural fairness issues, I cite three authorities on the subject in unfair dismissal cases. In Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport (2000) 98 IR 137 a Full Bench of the AIRC said at [73]:

‘As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment.’

[43] In Wadey v YMCA Canberra [1996] IRCA 568, Moore J made clear that an employer cannot merely pay ‘lip service’ to giving an employee an opportunity to respond to allegations concerning an employee’s conduct. His Honour said:

‘In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of allegations concerning the employee's conduct so as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.’

[44] Nevertheless, procedural fairness steps should be applied in a common-sense and practical way. In Gibson v Bosmac Pty Ltd (1995) 60 IR 1, Wilcox CJ said at [7]:

‘[7] Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.’

Whether the person was notified of that reason (s 387(b))

[45] As I have found there was not a valid reason related to the applicant’s capacity or conduct, she could not therefore have been notified of the reason for her dismissal, in accordance with s 387(b). The applicant claimed that after her dismissal, the respondent did not answer her call/calls when she sought reasons for her dismissal. Based on all the other circumstances, and consistent with the conduct of the respondent during these proceedings, I have no doubt that the respondent attempted to avoid the applicant’s phone call/calls. This factor tells in favour of a finding of unfairness.

Whether the person was given an opportunity to respond to any reasons related to the conduct of the person (s 387 (c))

[46] Similarly, the applicant could not have responded to an invalid reason for her dismissal. Significantly, she was not given any opportunity to respond at all to what was said to be the two reasons for her dismissal. In my view, the respondent adopted a hopelessly unfair and biased process to dismiss the applicant, whereby Mr Wang ‘waited’ for an opportunity which he believed would ‘justify’ terminating the employment of the applicant. He was mistaken. As I said earlier, the respondent’s complete disregard in affording the applicant any natural justice when dismissing her, was astounding for its brazen and appallingly perfunctory unfairness. This factor tells in favour of a finding of unfairness.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s 387(d))

[47] Given the applicant was given no warning of her dismissal, she could not have requested a support person, and consequently she was not denied an opportunity to have a support person present. This is a neutral factor in this case.

If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal (s 387(e))

[48] There is not one iota of credible evidence to suggest that the respondent raised any performance issues with the applicant prior to her termination. However, the reasons for termination provided in the respondent’s Form F3 suggest that the applicant’s termination was due to alleged misconduct for which she was given no opportunity to respond.

This is a neutral factor in this case.

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 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 (ss 387(f) and (g))

[49] Although I accept the respondent is a small business and has no dedicated human resource management expertise about procedures to be followed when effecting an employee’s dismissal, it must be bluntly said that no employer with any sense of common decency, would have effected a dismissal in the hopelessly unfair and perfunctory manner admitted to in this case. It was disgraceful and grossly unfair. The respondent’s approach in denying the applicant proper and fair procedures cannot be put down to naivety or ignorance. It was deliberate and calculated. The size of the employer’s business and lack of industrial relations expertise, simply does not ‘wash’, as any excuse for the lack of any fair procedure in this case.

Other relevant matters (s 387 (h))

[50] I have taken into account the applicant’s age, her period of service and limited prospects for future job opportunities on the basis of her age, particularly in a regional city. These matters tell in favour of a finding of unfairness based on harshness. The applicant was notified of her dismissal in a text message from Mr Wang sent to her on 3 April 2019; see: [2] above. Yet again, I have cause to point out that informing an employee of their dismissal by phone, text or email is an inappropriate means of conveying a decision which has such serious ramifications for an employee. I consider it would only be in rare circumstances that a decision to dismiss an employee should not be conveyed in person. For example, it may be necessary where the employer believes a dismissed employee might be a threat to the safety of his/her employees or because the employee expressly did not want a ‘face to face’ meeting to hear the outcome of any disciplinary process. I agree with Commissioner Cambridge when he said in Knutson v Chesson Pty Ltd t/a Pay Per Click [2018] FWC 2080 at [47]:

‘[47] The employer provided notification of dismissal by email communication sent at 8.53pm on 6 November 2017. Notification of dismissal should not be made by email communication. Unless there is some genuine apprehension of physical violence or geographical impediment, the message of dismissal should be conveyed face to face. To do otherwise is unnecessary callous. Even in circumstances where email or electronic communications are ordinarily used, the advice of termination of employment is a ,matter of such significance that basic human dignity requires that dismissal be conveyed personally with arrangements for the presence of a support person and documentary confirmation.’

[51] Pursuant to s 387 of the Act, and in light of the myriad of telling factors in favour of such a finding, I am satisfied the applicant’s dismissal was ‘harsh, unjust and unreasonable’, both in substance and procedure. I turn now to remedy.

Appropriate remedy

[52] Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation. The applicant does not seek reinstatement. I do not consider that reinstatement is appropriate in this case, given the appalling treatment of the applicant by the respondent. This finding leads to a consideration of compensation.

[53] Section 392 of the Act sets out the matters the Commission must have regard to when determining:

(a) whether compensation should be ordered;

(b) if so, what amount of compensation should be ordered;

(c) the effect of any order as to any findings of misconduct by the applicant;

(d) the upper limit of compensation; and

(e) specific matters not to be taken into account.

[54] Section 392 reads as follows:

‘392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

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

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

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

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

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[55] The methodology to be adopted by the Commission in calculating compensation, having regard for each of the matters set out in s 392 of the Act (often referred to as the Sprigg formula), was considered by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. t/a Ottrey Lodge [2013] FWCFB 431 (‘Ottrey’); see also: Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 and Ellawala v Australian Postal Corporation [1999] AIRC 1250. In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Nurcombe [2017] FWCFB 429, the Full Bench said at [42]-[43]:

‘[42] The correct approach to the assessment of compensation was summarised by the Full Bench in the recent decision in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries as follows (footnotes omitted):

“[16] The well-established approach to the assessment of compensation under s.392 of the FW Act, taking into account the matters specified in s.392(2), 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 FW Act 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’...’

[17] The identification of this starting point amount “necessarily involves assessments as to future events that will often be problematic”. 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.”

[43] We would add to this 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. That is to say, 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.’ (footnotes omitted)

[56] In a more recent Full Bench decision, Hanson Construction Materials Pty Ltd v Pericich [2018] FWCFB 5960, it has been made clear that the Sprigg Formula is not to be applied in a rigid manner. At [39], the Full Bench said:

‘The strict application of the approach set out in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg), and endorsed in subsequent decisions, would yield an order that Mr Pericich be paid compensation of 1 weeks’ pay. Sprigg is a useful servant, but is not to be applied in a rigid determinative manner. In deciding the amount of a compensation order the Act directs that the Commission ‘must take into account all of the circumstances of the case’ including the particular matters set out at s.392(2)(a) to (g).’ (my emphasis)

CONCLUSION

[57] For the aforementioned reasons, I am satisfied the dismissal of the applicant by the respondent on 3 April 2019 was ‘harsh, unjust and unreasonable’, within the meaning of the Act, for which compensation should be ordered. Finally, s 381(2) of the Act is a significant and overreaching object of Part 3-2. It is expressed in these terms:

‘381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.

Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95.’

[58] Given the paucity of detail provided by the parties, I propose to direct them to file and serve submissions and/or evidence as to the matters the Commission is required to take into account under s 392 of the Act. In particular, the applicant should provide evidence of her alternative casual earnings since her dismissal and details of the amount of her earnings in the 6 months prior to her dismissal. The respondent is reminded not to seek to re-agitate the issues he has previously canvassed or take issue with the Commission’s findings as to the unfairness of the applicant’s dismissal. Consequent on the filing of further submissions, I shall then determine the appropriate compensatory remedy in this case. I issue the following directions:

1. The applicant (Ms Gail Ayton) shall file and serve any evidence and short submissions going to the provisions of s 392(2) of the Act (compensation) by 2 October 2019.

2. The respondent (You Come Pty Ltd t/a Foodworks, Ashmont) shall file and serve any evidence and short submissions going to the provisions of s 392(2) of the Act (compensation) by 9 October 2019.

[59] As the evidence has disclosed potential breaches of anti-discrimination and industrial relations legislation, I am referring this decision and the file to the General Manager of the Commission for consideration as to whether this matter should be referred to relevant agencies to investigate potential breaches of State or Commonwealth law.

DEPUTY PRESIDENT

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