Garry Paech v Hage Retail Group
[2019] FWC 6487
•20 SEPTEMBER 2019
| [2019] FWC 6487 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Garry Paech
v
Hage Retail Group
(U2019/5445)
COMMISSIONER PLATT | ADELAIDE, 20 SEPTEMBER 2019 |
Application for relief from unfair dismissal.
[1] On 16 May 2019, Mr. Garry Paech made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (the Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Hage Retail Group (Hage or the Respondent). Mr Paech initially sought reinstatement but during the hearing advised that he only sought compensation.
When can the Commission order a remedy for unfair dismissal?
[2] Section 390 of the Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and
(b) the Applicant has been unfairly dismissed.
[3] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.
When is a person protected from unfair dismissal?
[4] Section 382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
When has a person been unfairly dismissed?
[5] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission 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.
Background
[6] The uncontested background to the matter is as follows:
• Mr Paech was employed by the Respondent as a full time Baker in March 2015.
• At all relevant times Mr Paech was supervised by Mr Geoffrey Varcoe (Head Baker). Mr Varcoe reported to the Manager - Mr Alexander Smith. Mr Micheal Hage was the most senior employee of the Respondent on site. Mr Paech worked with Mr Mark Heinrich.
• On 19 October 2016 Mr Paech suffered a workplace injury which was the subject of a workers compensation claim which was managed by EML and finalised in February 2019. Mr Paech did not have any work restrictions at the time of dismissal.
• In early 2019 Mr Peach reached agreement with the Respondent to work a four day (32 hour) week with a right to return to a five day (40 hour) week in the future. Mr Paech’s gross hourly rate was $24.79 per hour.
• The Respondent published a weekly roster which identified employees’ rostered shifts. Mr Paech had the flexibility to vary his start and finish times as required. Mr Paech would note any amendments on the roster sheet in handwriting and initial the sheet to indicate the hours that had been worked.
• The Respondent had issues with the accuracy of Mr Paech’s timesheet entry for 17 February 2017. A written final warning was issued by the Respondent.
• The Respondent subsequently had issues with the accuracy of Mr Paech’s time sheet entries for 30 April 2019, and 3 May 2019.
• Mr Paech was dismissed on 8 May 2019 without notice.
• The Respondent employed approximately 40 employees at the time of the dismissal
[7] There is a dispute over the conduct which occurred on 17 February 2017 which led to a written warning being issued, there is also a dispute about Mr Paech’s conduct on 9 February, 26 April and 30 April 2019, which the Respondent relied upon to summarily dismiss Mr Paech on 8 May 2019.
[8] There being contested facts involved, the Commission is obliged by s.397 of the Act to conduct a conference or hold a hearing.
[9] Mr Paech represented himself, Mr Michael Hage represented the Respondent.
[10] In light of the fact that neither party was represented, I determined that it would be appropriate to hear the matter by way of a determinative conference.
Witnesses
[11] Mr Paech submitted a statement 1 and gave evidence on his own behalf. His relevant evidence is summarised as follows;
• In March 2015 he was employed as a full time Baker by the Respondent.
• On 19 October 2016 he was injured in a workplace incident involving an alleged intruder to the workplace who was apprehended by Mr Paech. Mr Paech suffered a broken wrist, fractured foot and a dislocated knee. His workers compensation claim was accepted and managed by EML. Mr Paech was off work for about 4 months.
• Mr Hage cross-examined Mr Paech about the incident where he was injured in 2016. Mr Paech advised that an intruder had smashed some windows and was trying to enter the bakery by smashing a door down and Mr Paech was holding it shut. Mr Paech apprehended the intruder until the Police arrived and sustained a fractured foot, and was later diagnosed with a wrist and knee injury. Mr Paech was unable to state what specific movement caused these injuries other than relating it to the incident.
• In February 2017 whilst participating in a return to work program, Mr Paech had been rostered to work alone on an early shift. Mr Paech advised he was not coping as a result of his medical condition and his inability to seek assistance from another employee. Mr Paech determined to go home and a few days later was presented with a warning by Mr Geoffrey Varcoe which he understood was for abandoning his work station. Mr Paech did not read the warning which was given to him in an envelope.
• In March 2017 a meeting was conducted between the Respondent and Mr Paech with EML in attendance. Mr Paech contends that EML reminded both parties of their obligations. At this time Mr Paech contends he worked less hours than that required by his contract of employment and his wage was being ‘topped up’ by the workers compensation insurer. The workers compensation claim was finalised in February 2019.
• In February 2019 Mr Paech agreed with Mr Alexander Smith (his Manager) to work a 4 day week (32 hours). This continued until the date of the dismissal at which time his weekly wage was $793.28.
• The Respondent published a weekly roster for all employees who were identified by their initials. If the hours changed the employee would vary the roster and initial the roster to certify working the hours claimed. Mr Paech was given the ability to vary his start and/or finish times by up to 3 hours if he needed to leave early or attend an appointment by his Manager Mr Smith.
• Mr Paech accepted that the entry on his time sheet for 9 February 2017 (which was initialled by him) indicated that he worked between 1.30am and 7.00am with a half hour break for a total of 5 hours. Mr Paech accepted that he may have worked less than 5 hours, but contended he did not benefit from this representation as his wage was being ‘topped up’ by the workers compensation insurer. Mr Paech denied receiving a final warning for this incident. Mr Paech was shown Exhibit R1A but denied ever seeing the document or being asked to sign it. The warning was contained in an envelope that Mr Paech did not open.
• Mr Paech accepted that on 26 April 2019, he had not worked the hours printed on the roster and had ruled a line through them and inserted 3.30 to 12.30pm. Mr Paech contends he did not take a 30 minute lunch break which is why he contended that he worked 9 hours. The same approach had been taken in respect of the hours worked on 24 April 2019.
• In response to the allegation concerning the entry made on Tuesday 30 April 2019, which recorded his working hours as 6am to 2.30pm (but also contained a notation that these hours were incorrect and that the actual hours were 6.30am to 1.30pm) Mr Paech said he arrived at work between 6.05am and 6.10am 2 and left sometime between 2pm and 2.30pm3. Mr Paech also contended he only had a 5 minute lunch and had not taken 30 minutes as printed on the roster. On that basis Mr Paech contends that he worked the total number of hours claimed.
• It was alleged by the Respondent that on 3 May 2019 Mr Paech was rostered to work between 6.00am and 2.30pm. Mr Paech indicated in the time sheet that he worked between 3.00am and 8.00am, but Hage contended he was not seen at work before 4:00am. Mr Paech contended that he attended work at 3.00am and the bakery was a mess so he went out to the rear part of the bakery where the rolling machine is and rolled out blocks of pastry. 4
• Mr Paech advised that he had a telephone conversation with Mr Smith at 10.30am 4 May 2019 who advised there were some issues with his timesheet and that he would ring him on Wednesday 8 May 2019.
• A number of text messages were exchanged between Mr Varcoe and Mr Paech concerning a meeting time and date on 7 May 2019 but it appears Mr Peach’s battery went flat. Mr Paech advised he could not come in to work for a meeting on 7 May or 8 May as he was looking after his children (who were sick) at home. Mr Paech proposed a meeting on 9 May 2019 where he would bring a ‘witness’.
• Mr Smith telephone Mr Paech on 8 May 2019 and advised him he had been dismissed.
• Mr Paech had not received any income post dismissal (as at 16 September 2019).
• Mr Paech advised that in the period between the dismissal and the date of the hearing he did not seek employment as he was home schooling his child who was unable to attend school as a result of some interactions between students and an alternative school was not available. 5
• Mr Paech advised on 16 September 2019 that he had sought alternative employment as a baker after the hearing but had not been successful.
• Mr Paech indicated that his physical strength prevented him from completing some duties particularly on the dough shift and that he was thinking of a career change. 6
[12] The following witnesses gave evidence on behalf of the Respondent:
• Mr Benjamin Hage (most Senior employee)
• Mr Geoffrey Varcoe (Head Baker)
• Mr Mark Heinrich (co-worker)
• Mr Alexander Smith (Manager).
[13] Mr Hage did not submit a statement but gave evidence on his own behalf. His relevant evidence is summarised as follows;
• Mr Hage was the most senior person of all of the Respondent’s witnesses.
• On 17 February 2017 Mr Paech was given a warning 7 by Mr Geoff Varcoe. This warning was undated and unsigned. Mr Hage was not involved in issuing that warning and had not seen it before the hearing. A revised warning which was signed by Mr Alexander Smith and dated 21 February 2017 was subsequently submitted8.
• Mr Hage submitted Mr Paech’s last payslip which revealed a gross pay rate of $24.79 per hour. 9 No notice was paid. Mr Hage submitted payslips for Mr Paech for the last six months of his employment.
• Mr Hage advised that Mr Paech’s workers compensation claim was finalised in February 2019.
• Mr Hage submitted a roster for the week commencing 8 February 2017, 10 the week commencing 24 April 201911 and a roster for the week commencing 1 May 2019,12 and submitted that there were discrepancies between the hours worked by Mr Paech and the times recorded on the timesheets.
• Mr Hage participated in the decision to suspend and dismiss Mr Paech.
• After Mr Paech was suspended on 4 May 2019 Mr Smith investigated the matter.
• Mr Hage was advised that Mr Smith and Varcoe sought to meet with Mr Page to discuss the matter but Mr Paech was unavailable at the times required (at this stage it appears Mr Paech had been placed on annual leave rather than being suspended). There was no direction issued by Mr Hage for Mr Paech to attend a meeting.
• On 8 May 2019 Mr Smith dismissed Mr Paech, Mr Hage had had a discussion with Mr Smith prior to that meeting about the matter and it had been agreed to dismiss Mr Paech.
• During the hearing Mr Hage cross-examined Mr Paech about the intruder incident and how Mr Paech sustained his injuries. The questions appeared to raise the prospect that Mr Hage was questioning the veracity of Mr Paech’s workers compensation claim. Mr Hage stated ‘it’s possible that that claim may have been fraudulent as well’ and that it was possible that that was part of his thinking when he made a decision to dismiss Mr Paech. Mr Hage accepted that this was not put to Mr Paech and that it could be regarded as being unfair. 13
[14] Mr Alexander Smith submitted a statement 14 and gave evidence. His relevant evidence is summarised as follows;
• Mr Smith is the Manager at the Respondent.
• In February 2017 Mr Paech was rostered to work 5 hour shifts for 5 days each week in accordance with a return to work plan. Mr Smith was advised that, on 9 February 2017 Mr Paech did not work 5 hours but signed his timesheet indicating that he did so.
• Whilst Mr Smith did not give evidence on this topic, it appears from Exhibit R9 that at 8.31am on 21 February 2017 Mr Smith sought advice from the Fair Work Ombudsman (FWO) telephone service in relation to Mr Paech’s timesheets. A summary of the discussion as recorded by the FWO was submitted. The FWO provided a range of references and suggested that legal advice be obtained. I was advised by Mr Hage during submissions that no legal advice was sought.
• Near the end of Mr Paech’s shift on 17 February 2017 Mr Varcoe asked Mr Paech to come to his office so as to give him a final written warning for signing false hours on the roster. Mr Paech refused to attend and went to his car and left, and the meeting did not take place.
• Mr Smith has some recollection on one of the mornings of that week Mr Paech was not there but he cannot now recall which day.
• Mr Smith was told that Mr Paech did not correctly complete his time sheet on 9 February 2017.
• Mr Smith determined to commence a disciplinary process in respect of Mr Paech finishing work at a time different to that recorded on his timesheet for 9 February 2017. 15
• The roster stated he would work from 1.30am to 7.00am. It was alleged that Mr Paech had left by 6.30am. Mr Smith determined to issue a written warning to Mr Paech, to be given to him by Mr Varcoe. Mr Smith did not have any discussion with Mr Paech prior to issuing the warning. The only discussion had been about one week after Mr Paech refused to accept the warning.
• Mr Smith did not attend the meeting where the warning was to be delivered. 16
• The warning contained the signature of Mr Smith next to a notation – Witness Signature (if employee understands warning but refuses to sign).
• Mr Smith did not see any issue with giving Mr Paech a warning without talking to him about the circumstances which occurred. 17 Mr Smith accepted that the written warning prejudged the matter.18 Mr Smith accepted that if he had received Mr Paech’s explanation that he left because he wasn’t coping with the work, the written final warning may not have been justified.19
• Mr Smith accepted that his statement on the warning in Exhibit R1A next to his signature was false but attributes this to his inexperience with warnings.
• On 4 May 2019 Mr Smith was advised that Mr Paech had started his shift on Friday 3 May much later than the time on the roster.
• Mr Smith reviewed the timesheet and noted that Mr Paech had represented he commenced work at 3.00am and worked until 8.00am.
• Mr Smith accepted Mr Paech had flexibility in the hours that he worked, but was concerned that Mr Paech had not worked for the overall hours claimed.
• Mr Smith had been told that Mr Paech had started much later than 3.00am. He spoke to the witness who advised him that he did not see Mr Paech until after the driver arrived at 3.30am. 20 Mr Smith alleged that Mr Paech had come in at 3.00am but didn’t do anything until much later, Mr Smith postulated that Mr Paech came in to use to toilet or something.
• Mr Smith then suggested that Mr Paech was not there at 3.00am and the workplace was so small that he would have been seen if he was there. Mr Smith did not dispute Mr Paech’s contention that he was outside the premises at 3.00am. 21 Mr Smith did not accept Mr Paech’s version that he attended and the bakery was a mess so he went out to the rear part of the bakery where the rolling machine is and rolled out blocks of pastry.22
• Mr Smith contends that Mr Paech overstated his attendance by half an hour. Mr Smith contended that Mr Paech did not perform and work until 4.00am. 23
• Mr Smith also advised that he was told that Mr Paech had incorrectly recorded his working hours on 30 April 2019.
• Mr Smith rang Mr Paech on 4 May 2019 and advised there were two allegations that he had put the wrong hours down and that they wanted him to go on leave until they worked out what happened. 24
• Mr Smith said he suspended Mr Paech without pay unless he wanted to use his annual leave. 25
• Mr Smith said he did not talk to Mr Hage about suspending Mr Paech without pay, although ‘it was possible he did not recall it right’. 26
• Mr Smith obtained a statement from Mr Heinrich 27 and Mr Varcoe28 and reviewed the timesheets.
• Mr Smith asked Mr Varcoe to organise a meeting with Mr Paech on Wednesday. Mr Varcoe advised Mr Smith that Mr Paech had made plans for Wednesday, so Mr Smith asked Mr Varcoe to arrange a meeting for Thursday.
• Mr Smith then talked to Mr Hage and decided that they trusted the two people who provided statements, the timesheets didn’t match and Mr Paech had demonstrated a pattern of incorrect timings on his timesheets over time, and it would be a burden to the business to keep him on as far as production costs and decided to ‘let him go.’ 29
• Mr Smith accepted that he had not received any response to the allegation from Mr Paech at the time the decision to dismiss was made. 30
• Mr Smith contends that Mr Paech had an opportunity to respond between the time he first raised the allegations on Saturday and prior to the dismissal. Mr Smith thought Mr Paech was avoiding coming to a meeting. Mr Smith never directed Mr Paech to attend a meeting to discuss the matter.
• Mr Smith contended he made the decision to dismiss, 31 based on the instances in 2017, and 30 April 2019 and 3 May 2019, noted that there were two instances in one week and he believed Mr Paech had committed fraud.32 Mr Smith contended that the fraud resulted in an overpayment in the order of $50 plus on-costs.33 Mr Smith did not consider Mr Paech’s age or length of service.34 Mr Smith also took into account his view that Mr Paech’s production levels were lacking at times.35
• Mr Smith said there were no issues with Mr Paech’s work performance. 36
• Mr Smith advised that the decision to dismiss was not related to the workers compensation injury. 37
[15] Mr Geoffrey Varcoe submitted a statement 38 and gave evidence. His relevant evidence is summarised as follows;
• Mr Varcoe was the Head Baker and supervised Mr Paech.
• On 17 April 2019 Mr Varcoe signed a written warning concerning Mr Paech. 39 The warning concerned the incorrect completion of Mr Paech’s timesheet and arose as a result of Mr Smith stating that people had noticed Mr Paech leaving earlier or later than he was writing down and Mr Smith gave Mr Varcoe the written warning to give to Mr Paech.40
• On the day that this warning was given to Mr Paech, Mr Varcoe stayed back and talked to Mr Paech about people saying he was leaving earlier than what was recorded. Mr Paech was upset and angry and walked out and left. Mr Varcoe offered for Mr Paech to sign it, he then signed it and gave the piece of paper to Mr Paech. Initially Mr Varcoe did not think that Mr Smith had signed the warning but then agreed that Mr Smith must have signed the warning when he gave it to Mr Varcoe. Mr Varcoe was not sure about these events. The warning was prepared in advance of the meeting. Mr Varcoe accepted the warning may have been contained in an envelope. Mr Varcoe verbally told Mr Paech what the warning was for. Mr Paech responded “You must be joking’, 41 Mr Varcoe could not recall if Mr Paech said to him that he left work as he was not feeling well (but accepted it was possible), and did not think that Mr Paech referred to the injuries received from his workplace incident, but accepted he was advised that Mr Paech was not coping.42
• Mr Varcoe contended that on 30 April 2019 Mr Paech was rostered on at 6.00am but started 15-20 minutes late and finished his shift at 1.45pm but was rostered to finish at 2.30pm. Mr Paech had recorded his hours for that day as 6.00am to 2.30pm. Mr Varcoe started at 6.00am on that day and was advised by another baker that he had not heard from Mr Paech. Mr Varcoe contends Mr Paech arrived 15-20 minutes late. Mr Varcoe contended that Mr Paech left at 1.45pm telling him that him he was going home.
• On 7 May 2019 Mr Varcoe spoke with Mr Paech until Mr Paech’s phone battery went flat and then corresponded with Mr Paech via Facebook Messenger to try and organise a meeting time on 7 and 8 May 2019. The content of the Facebook Messages is not in dispute. Whilst Mr Varcoe’s evidence on this point was confusing, Mr Varcoe stated that he did not discuss the allegation with Mr Paech. 43
• Mr Varcoe did not give any evidence of having any other performance concerns concerning Mr Paech during his employment. 44
• Mr Varcoe advised that but for the dismissal he would have expected Mr Paech to continue to be employed indefinitely. 45
[16] Mr Mark Heinrich submitted a statement 46 and gave evidence. His relevant evidence is summarised as follows;
• On Thursday 2 May 2019 he was advised by Mr Varcoe that Mr Paech would come in early on Friday 3 May. Mr Heinrich did not see Mr Paech until after the delivery driver arrived (at 3.30am) 47. Mr Heinrich observed Mr Paech first go to the toilet and then go outside for a smoke and came inside the premises at about 4.00am. Mr Heinrich did not see Mr Paech do any work prior to 4.00am. This was the full extent of Mr Heinrich’s statement.
• Mr Heinrich stated that it would not have been possible for Mr Paech to have arrived earlier and not be seen by him. 48
• Mr Heinrich disputed that Mr Paech could have been working in the room containing the rolling machine. Mr Heinrich speculated that Mr Paech must have walked in when the Driver came in ‘because he normally comes in through the rolling door’. 49
• Under cross examination by Mr Paech, Mr Heinrich conceded that Mr Paech might have been there but not seen by him. 50
• Mr Heinrich said there were other occasions (3-5) where Mr Paech would attend work and sit in his car, and that he had mentioned it to Mr Varcoe.
Observations as to Credit
[17] I found that Mr Paech had detailed recollection of the events and made concessions where it was appropriate. I found him to be a witness of truth.
[18] I also found Mr Hage to be a witness of truth, noting however that his knowledge of Mr Paech’s attendance relied on accounts provided by others.
[19] Mr Smith was a poor witness, and accepted that he had signed the 17 February 2017 warning including the making of a statement that he witnessed Mr Varcoe’s signature (as he did not attend the meeting) that was false. I prefer the evidence of Mr Paech where it conflicts with the evidence of Mr Smith.
[20] Mr Varcoe was not a convincing witness. Mr Varcoe’s evidence was at times inconsistent with itself and that of other witnesses, and at times vague with respect to the meeting concerning the 2017 warning. Mr Paech appeared to have a much clearer recollection of what was said. I prefer the evidence of Mr Paech where it conflicts with Mr Varcoe.
[21] Mr Heinrich’s evidence was inconsistent at times. On a number of occasions Mr Heinrich did not answer a question and simply restated his position. 51 I was concerned that Mr Heinrich was not simply giving an account of what he observed and that it appeared that he harboured some disaffection for Mr Paech. I have treated his evidence with caution. His evidence as to Mr Paech not being present before 3.30pm (or 4.00am) on 3 May 2019 was not convincing and I prefer the evidence of Mr Paech.
Factual findings
[22] Mr Paech was afforded the ability to vary his shift commencement and finishing times as it suited him provided the work was done. There was no suggestion that the work did not get done.
[23] I accept that Mr Paech did not correctly state the hours he worked on one day in the week commencing 8 February 2017. I accept that Mr Paech left as a result of his concerns about working alone and not having the assistance from any other employee.
[24] As stated earlier, I prefer the evidence of Mr Paech to that of Mr Varcoe concerning the conduct of the meeting where the 17 February 2017 warning was given.
[25] I accept that the timesheet record for 26 April 2019 was incorrect but accept that Mr Paech worked through lunch and this supported the number of overall hours claimed.
[26] I prefer the evidence of Mr Paech in respect to his attendance on 30 April 2019.
[27] I accept that Mr Paech commenced work within 5 minutes of his rostered finishing time on 30 April 2019 and left not more than 30 minutes prior to his scheduled finish time. I accept his evidence that he did not have a meal break and did not intend to defraud the Respondent. His overall hours total (with the exception of the 5 minutes he was late) match that claimed.
[28] I am not persuaded by the evidence of Mr Heinrich that on 3 May 2019 Mr Paech did not attend until 4.00am (as in his statement) or 3.30am (as inferred from his oral evidence).
[29] Whilst I accept that Mr Paech did start late and finish early on occasions, the differences were relatively minor.
[30] I find that Mr Hage relied upon his view that Mr Paech’s workers compensation was fraudulent and this was a factor which influenced the decision to dismiss Mr Paech. 52 This was never put to Mr Paech for a response.
[31] I find that Mr Paech was not afforded a chance to respond to the 2019 allegations regarding the timesheets.
Has the Applicant been dismissed?
[32] A threshold issue to determine is whether the Applicant has been dismissed from their employment.
[33] Section 386(1) of the Act provides that the Applicant has been dismissed if:
(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or
(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.
[34] Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
[35] There was no dispute and I find that Mr Paech’s employment was terminated at the initiative of the Respondent.
[36] I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the Act.
Initial matters
[37] Under section 396 of the Act, the Commission is obliged to decide the following matters 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.
[38] There was no submission made in respect of these matters, and on the evidence available to me I find that none of these matters are a relevant consideration in this matter.
[39] Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.
Was the dismissal harsh, unjust or unreasonable?
[40] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
[41] I am required to consider each of these criteria; to the extent they are relevant to the factual circumstances before me. 53
[42] I set out my consideration of each below.
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
[43] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 54 and should not be “capricious, fanciful, spiteful or prejudiced.”55 However, 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.56
[44] Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.57 “The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.” 58
[45] Mr Paech’s position is that there was no valid reason for the dismissal related to his conduct because he did not fraudulently claim for hours not worked and that any deviations from the recorded hours were minor.
[46] The Respondent submitted that there was a valid reason for the dismissal related to the Mr Paech’s conduct because of the making of incorrect entries on his timesheets such that the hours claimed did not reflect the hours worked. The Respondent claims these entries were fraudulent
[47] For there to be a valid reason related to the Applicant’s conduct, I must find that the conduct occurred and justified termination.59
[48] The timesheet issue which occurred in 2017 was dealt with by way of warning and is unable to be relied upon as a valid reason.
[49] As a result of my findings of fact made in paragraphs [26] and [27] I find that on 30 April 2019 Mr Paech was 5 minutes late on commencement, and whilst he left up to 30 minutes early this was compensated by the fact he did not take a lunch break. I am satisfied that but for the 5 minutes he worked the total number of hours claimed.
[50] As a result of my findings in paragraph [28] I find that Mr Paech’s timesheet for 3 May 2019 was correctly completed.
[51] With respect to the reliance on the conduct of Mr Paech on 26 April 2019, I do not accept Mr Paech sought to defraud the Respondent by entering an erroneous number of hours claimed. It appears to me that this was an arithmetical error which was missed by both Mr Paech and the Respondent until the hearing examined the timesheets. In any event Mr Paech claimed (and I accept) that he did not take a meal break that day.
[52] I am not persuaded to the Briginshaw 60standard (or indeed the balance of probabilities) that Mr Paech engaged in fraud.
[53] I accept that Mr Paech should have paid more attention to the accuracy of his timesheet entries but in the Hage workplace there was a level of flexibility afforded to start and finish times and the taking of breaks, which meant that the errors found in Mr Paech’s time recording did not have result in him receiving a financial advantage.
[54] The Respondent has not established a valid reason for the dismissal.
Was the Applicant notified of the valid reason?
[55] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment, 61 in explicit,62 plain and clear terms.63
[56] The requirements of s.387(c) of the Act will be satisfied “[w]here 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…”64
[57] The Full Bench of the Fair Work Commission has held that s.387(c) of the Act is to be applied in a common sense way to ensure that the Applicant has been treated fairly and does not necessarily require formality in the sense of conducting a meeting with the employee to inform the employee of the reasons for the proposed dismissal or providing the employee with an opportunity to address the employer’s concerns in writing.65
[58] The evidence reveals that on 4 May 2019 Mr Paech was told by Mr Smith that there were two allegations that he had put the wrong hours down and that they wanted him to go on leave until they worked out what happened. 66 At that point it appears that the Respondent was yet to talk to the witnesses. In my view the level of detail of the allegation is insufficient to discharge the obligations on the Respondent.
[59] The Respondent did not discuss the matter further with Mr Paech before making its decision to dismiss.
[60] In addition the Respondent did not disclose to Mr Paech at any stage that it had considered his workers compensation claim as fraudulent and that this was a factor in its decision to dismiss.
Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.” 67
[61] The opportunity to respond does not require formality and this factor is to be applied in a common sense way to ensure the employee is treated fairly. 68 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.69
[62] The Respondent did not give Mr Paech an opportunity to respond to the allegations that he fraudulently falsified the timesheets. I do not consider the actions of Mr Paech in not being available for a meeting on 7 and 8 May 2019 due to family responsibilities whilst he was on leave was a sufficient basis for the Respondent to move to dismiss without meeting with Mr Paech.
[63] Having regard to the matters referred to above, I find that the Mr Paech was not given an opportunity to respond to the reason for his dismissal prior to the decision to dismiss being made.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
[64] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
[65] I have found that the Respondent failed to conduct a discussion relating to the dismissal so the issue does not arise.
Was the Applicant warned about unsatisfactory performance before the dismissal?
[66] As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.
To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
[67] While the Act recognises that “small business are genuinely different in nature both organisationally and operationally”,70 it does not follow that such an employer’s procedures in effecting a dismissal can be entirely devoid of fairness.
[68] The Respondent submitted that the size of its enterprise impacted on the procedures followed whereby Mr Paech was denied procedural fairness. The Respondent is not a small business but is unsophisticated in its approach to disciplinary matters.
[69] I accept that the Respondent’s managerial and supervisory staff had little understanding of the unfair dismissal laws and appropriate procedures in investigating disciplinary matters. I accept that that contributed to (but does not excuse) the lack of procedural fairness in its disciplinary processes.
To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
[70] The absence of dedicated human resource management specialists does not relieve an employer of extending an appropriate degree of courtesy to its employees “even when implementing something as difficult and unpleasant as the termination of a person’s employment.”71
[71] The Respondent submitted that the lack of dedicated human resource management specialists or expertise in the Respondent’s enterprise contributed towards the flawed procedures discussed above which occurred in effecting the dismissal.
[72] In all the circumstances, I find that the absence of dedicated human resource management specialists at the Respondent had an impact on the procedures followed in effecting the dismissal.
What other matters are relevant?
[73] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
[74] Whilst the Respondent was entitled to sanction Mr Paech for his lateness, his conduct did not support a decision to dismiss.
[75] Mr Paech was summarily dismissed and as a result was not provided or paid any notice. Based on my factual findings the Respondent was not entitled to summarily dismiss Mr Paech and accordingly he should have been paid notice.
[76] In addition Mr Paech was subject to an unpaid period of suspension during which time it appears that he was placed by Respondent on annual leave. This had the effect of reducing Mr Paech’s entitlements at the time of dismissal.
[77] Finally it appears that the dismissal was in part motivated by Mr Paech’s lodgement of a workers compensation claim which the Respondent felt was fraudulent. I note that no evidence was submitted that the basis of the claim was contested or that the claim was disputed at any time. The revelation by Mr Hage of the consideration of this topic was never raised and Mr Paech appears to have been completely unaware that Mr Hage had apparently held this belief for some years without raising it with him.
[78] I have also taken into account Mr Paech’s personal attributes and the impact of the dismissal particularly in light of the fact he lives in a country region where alternative employment in his trade maybe more difficult to obtain.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
[79] I have made findings in relation to each matter specified in section 387 as relevant.
[80] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 72
[81] Having considered each of the matters specified in section 387 of the Act, I am satisfied that the dismissal of the Applicant was harsh and/or unjust and/or unreasonable.
Conclusion
[82] I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the Act.
Remedy
[83] Being satisfied that the Applicant:
• made an application for an order granting a remedy under section 394;
• was a person protected from unfair dismissal; and
• was unfairly dismissed within the meaning of section 385 of the Act,
I may, subject to the Act, order the Applicant’s reinstatement or the payment of compensation to the Applicant.
[84] Under section 390(3) of the Act, I must not order the payment of compensation to the Applicant unless:
(a) I am satisfied that reinstatement of the Applicant is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Is reinstatement of the Applicant inappropriate?
[85] Mr Paech submitted that reinstatement was not appropriate as a result of the poor relationship between the parties. In such circumstances, “the Applicant’s disposition is a sure guide to the Commission as to whether or not it would be appropriate to reinstate or re-employ the Applicant. To act contrary to the Applicant’s desired position in this respect would be to give effect to an order that may not yield a productive or cooperative workplace.”73
[86] I consider that reinstatement is not appropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.
Is an order for payment of compensation appropriate in all the circumstances of the case?
[87] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…” 74
[88] In all the circumstances, I consider that an order for payment of compensation is appropriate to compensate Mr Paech for the lost income as a result of his dismissal.
Compensation – what must be taken into account in determining an amount?
[89] Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:
(a) the effect of the order on the viability of the Respondent’s enterprise;
(b) the length of the Applicant’s service;
(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
[90] I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
[91] The respondent did not provide any submissions (despite having been invited to do so) that an order of any amount would have an effect on the viability of the employer’s enterprise.
[92] There is no information before me that would establish that an order for compensation would affect the viability of the employer’s enterprise.
Length of the Applicant’s service
[93] The Applicant’s length of service was 4 years and 2 months.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
[94] As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.” 75
[95] Mr Paech submitted he would have been likely to continue for a further period of 5 years before he retired.
[96] Some of the Respondent’s witnesses accepted that absent the dismissal Mr Paech’s employment could have continued for an extended period.
[97] Mr Paech’s work performance had not been the subject of criticism. His previous warning for incorrectly completing his time sheet (which appears to be more correctly characterised as leaving work without permission) was issued without consideration of his version of the events. It appears to me that the factual matrix did not support the issuance of a final warning in 2017. In any event Mr Paech’s conduct for the next two years appears (until 30 April 2019) to have been satisfactory.
[98] I find that it would have been reasonably likely for Mr Paech’s employment to continue for a period of 12 months and during that time he would have earned $41,250 plus Superannuation.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
[99] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal. 76 What is reasonable depends on the circumstances of the case.77
[100] Mr Paech did not seek to apply for jobs as a result of a decision to home school his child (who had left his normal place of schooling) until a suitable alternative school was found. Mr Paech’s wife was working in a newly obtained Managerial role which factored into Mr Paech’s decision not to seek alternative work. Whilst I do not criticise Mr Paech for his decision, it had the effect of accentuating his loss and in my view it is not reasonable that the Respondent be held responsible for the entire loss during the period of expected employment.
[101] On 17 September 2019 Mr Paech advised he ceased to be responsible for home schooling his son around the time of the hearing but had not yet been successful in obtaining a role for which he was qualified and had not earnt any income.
[102] I am not satisfied that the Mr Paech has taken reasonable steps to mitigate his loss, particularly since the conclusion of the hearing, and in these circumstances a reduction of 20% is warranted.
Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation
[103] As at the date of hearing Mr Paech had not earnt any income from employment or other work since the dismissal.
[104] That evidence is not challenged by the Respondent.
Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation
[105] The relevant period is four weeks. In my view Mr Paech is unlikely to earn further income in the period between the making of the order for compensation and the payment of compensation.
Other relevant matters
[106] There are no other relevant matters.
Compensation – how is the amount to be calculated?
[107] As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg). 78 This approach was articulated in the context of the Act in Bowden v Ottrey Homes Cobram and District Retirement Villages79.”
[108] The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the Applicant would have received, or would 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.
Step 1
[109] I have estimated the remuneration that Mr Paech would have received, or would have been likely to have received, if Hage had not terminated the employment to be $41,250 on the basis of my finding that the Applicant would likely have remained in employment for a further period of 12 months. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”. 80
Step 2
[110] The amount of remuneration earned by the Applicant from the date of dismissal to 17 September 2019 was $nil, and the amount of income reasonably likely to be earned by the Applicant between the making of the order for compensation and the payment of compensation is $nil.
Step 3
[111] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment. 81
[112] There being 34 weeks remaining of the anticipated employment period and having regard to the possibility of Mr Paech becoming unable to perform his duties or agreed work load and/or becoming the subject to performance management or resignation due to the poor working relationship, I consider it appropriate to deduct an amount of 30% for contingencies.
Step 4
[113] I have considered the impact of taxation but have elected to settle a gross amount of $20,625.00 taxed in accordance with the law.
[114] Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case”. 82
[115] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the Act.
[116] The amount does not include any component compensating for shock, distress etc. (s.392(4))
Compensation – is the amount to be reduced on account of misconduct?
[117] If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
[118] I am not satisfied that any misconduct by Mr Paech reasonably contributed to the employer’s decision to dismiss. The amount of the order for compensation is not to be reduced on account of misconduct.
Compensation – how does the compensation cap apply?
[119] Section 392(5) of the Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a) the amount worked out under section 392(6); and
(b) half the amount of the high income threshold immediately before the dismissal.
[120] The amount worked out under section 392(6) is the total of the following amounts:
(a) the total amount of the remuneration:
(i) received by the Applicant; or
(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.
[121] As far as I am aware the Applicant was not on leave without pay or without full pay during the 26 weeks immediately before the dismissal.
[122] I find that the total amount of the remuneration received (or entitled to be received) by the Applicant during the 26 weeks immediately before the dismissal was $21,914 83, and the amount of compensation ordered by the Commission must therefore not exceed that amount.
[123] In light of the above, I will make an order that the Respondent pay $20,625 gross (taxed as required by law), to Mr Paech within 28 days of the date of this decision.
COMMISSIONER
Appearances:
Mr Paech (applicant)
Mr Hage on behalf of the Respondent
Hearing details:
August 6
2019
Final written submissions:
Applicant
24 July 2019
Respondent
19 July 2019
31 July 2019 (in reply)
Printed by authority of the Commonwealth Government Printer
<PR712501>
1 Exhibit A1.
2 PN1340.
3 PN1355.
4 PN879-881.
5 PN1551-1558.
6 PN1581.
7 Exhibit R1.
8 Exhibit R1A.
9 Exhibit R2.
10 Exhibit R3.
11 Exhibit R4.
12 Exhibit R5.
13 PN1642-1655.
14 The statement was not formally tendered but has been identified as Exhibit R11 for the purposes of this decision.
15 PN765.
16 PN776-778.
17 PN780-794.
18 PN817-819.
19 PN826-827.
20 PN852.
21 PN877.
22 PN879-881.
23 PN900.
24 PN914-923.
25 PN927.
26 PN939-941.
27 Exhibit R6.
28 Exhibit R7.
29 PN967.
30 PN973-976.
31 PN1030.
32 PN1056.
33 PN1038-1041.
34 PN1046.
35 PN1048, PN1052.
36 PN1051.
37 PN1176.
38 Exhibit R7.
39 Exhibit R1A.
40 PN1268-1269.
41 PN1321.
42 PN1324-1329.
43 PN1412.
44 PN1433.
45 PN1434.
46 Exhibit R6.
47 PN1450.
48 PN1451.
49 PN1455.
50 PN1465.
51 E.g PN1530, 1533, 1535.
52 PN1889-1889.
53 Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
54 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
55 Ibid.
56 Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
57 Edwards v Justice Giudice [1999] FCA 1836, [7].
58 King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
59 Edwards v Justice Giudice [1999] FCA 1836, [7].
60 Briginshaw v Briginshaw (1938) 60 CLR 336.
61 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
62 Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
63 Ibid.
64 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
65 Pitts v AGC Industries[2013] FWCFB 9196, [54] referring also to Gibson v Bosmac Pty Ltd (1995) 60 IR 1; cited and adopted in RMIT v Asher (2010) 194 IR 1.
66 PN914-923.
67 Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
68 RMIT v Asher (2010) 194 IR 1, 14-15.
69 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
70 Williams v Top Image Hair Design[2012] FWA 9517, [40].
71 Sykes v Heatly Pty Ltd t/a Heatly Sports PR914149 (AIRC, Grainger C, 6 February 2002), [21].
72 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
73 Taylor v C-Tech Laser Pty Ltd[2013] FWC 8732, [58].
74 Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
75 He v Lewin [2004] FCAFC 161, [58].
76 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
77 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
78 (1998) 88 IR 21.
79 [2013] FWCFB 431.
80 Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
81 Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
82 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
83 Calculated on the basis of a 38 hour week for the 2 months then a 32 hour week from February 2019 until the dismissal.
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