GTS Travel Management t/a Green Travel Service v Ms Bernice Zhang
[2018] FWCFB 1069
•16 MARCH 2018
| [2018] FWCFB 1069 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s 604 - Appeal of decisions
GTS Travel Management t/a Green Travel Service
v
Ms Bernice Zhang
(C2018/284)
| JUSTICE ROSS, PRESIDENT DEPUTY PRESIDENT SAMS DEPUTY PRESIDENT DEAN | MELBOURNE, 16 MARCH 2018 |
Appeal against decision [2017] FWC 7061 and Order PR599148 of Commissioner Johns at Sydney on 29 December 2017 in matter number U2017/10130 – public interest not enlivened – permission to appeal refused.
Introduction
GTS Travel Management t/a Green Travel Service (GTS; the Appellant) seeks permission to appeal a Decision[1] (the Decision) and Order[2] of Commissioner Johns issued on 29 December 2017. The Decision deals with an application for an unfair dismissal remedy. The Commissioner found that the dismissal of Ms Zhang (the Respondent) was inconsistent with the Small Business Fair Dismissal Code (the Code); there was no valid reason for her dismissal and that her dismissal was harsh, unjust and unreasonable. The Commissioner ordered the Appellant to pay the Respondent the amount of $19,831.73, less taxation.[3]
An appeal under s.604 of the Fair Work Act 2009 (Cth) (the Act) is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.[4] There is no right to appeal and an appeal may only be made with the permission of the Commission. The matter was listed for hearing in respect of both permission to appeal and the merits of the appeal.
Background
The Appellant is a small business engaged in the corporate travel industry. The Respondent was first employed as a Co-ordinator on 12 May 2014 and was subsequently promoted to Travel Consultant. In the latter role the Respondent had expanded duties and received a salary increase. On 11 and 12 September 2017 the Respondent was unable to attend work due to a pregnancy related medical condition. She returned to work on 13 September 2017. The next day, she was dismissed and paid three weeks’ pay in lieu of notice. Her letter of termination read:
‘Dear Bernice
We regretfully notify you that after a series of serious discussions, we have come to the conclusion that the company demands the termination of your services due to constant lack of performance shown by you for a long time.
You have shown utter indifference towards the cause of the company for a prolonged period of time. We have been constantly monitoring your actions and we found no trace of the slightest improvement in your performance.
On 22 May 2017, you have been re-designed as Travel Consultant cum Finance Executive and in line with the re-designation your salary has been increased from $50k/year to $55k/year. You had accepted this offer and signed the letter of appointment accordingly. After 4 months, we have observed that you are still unable to perform all the duties of your travel consultant role even though you are constantly receiving the full training form our operations supervisor. It has appeared that you couldn’t work as a travel consultant looking after our customers on a daily basis. For whichever reasons, we found that you were always not auctioning the emails after 4:30pm when your supervisor finishes working for the day, which may lead to multiple complaints from our customers. You also mentioned that after [a] couple of weeks training you could only handle customer’s domestic booking request while you are lack of knowledge dealing with customer’s international booking request without supervision, which is not acceptable as GTS travel management is a small company requiring each staff member to work independently and serve customer properly.
Your negative work attitude at work is another serious issue. During several occasions when we had staff meetings, you insisted that you should take limited workload rather than the assignments company allocated to you unless company approve your request to raise the salary level to $60K/year, which is not acceptable. For example, you were requested to prepare a quotation for ECA group on 13 September 2017 but you just simply refused to take this task and instead requesting your manager to hire another staff to handle this job.
In all, after careful assessment we consider that you are not capable of doing this job and we must find a replacement who has qualified skills and positive work attitude to serve our customers.
Together with this letter, GTS Travel Management is providing you with a final pay in the amount of $6361.76 (Gross amount $9,276.76), which is including 4 days you have worked for in the week between 11 September & 17 September, 3 week’s pay in lieu of notice of termination & vacation pay to which you are entitled.
… [Breakdown of final payment omitted]
We thank you for your contributions over the last 3 years and wish you well in your future endeavours
Yours Sincerely,
Peter Sheng
Director’
The Decision sets out the background to the proceeding (at [7]) and the contested matters (at [8]), before turning consider whether the dismissal was consistent with the Code. The Commissioner found the Appellant was a small business employer within the meaning of s.23 of the Act (at [23]) and had not complied with the Code, concluding (at [31]):
‘In all the circumstances (including in the absence of a valid reason for termination and the absence of warnings), the Commission, as presently constituted, is satisfied the dismissal of the Applicant was not consistent with the Code.’
The Commissioner then turned to consider whether the dismissal was harsh, unjust or unreasonable. The Commissioner took into account the matters set out at s.387(a)-(h) as follows:
· There was no valid reason for the dismissal of the Respondent and, at [26]:
‘To the extent that the Respondent asserted that it was entitled to terminate the Applicant’s employment summarily because she (to their mind) refused to do work as instructed, that reason is not made out on the evidence. The email relied upon by the Respondent is nothing of the sort. Mr Sheng was no doubt disappointed in the attitude of the Applicant, but it did not provide a valid reason for termination. In fact, nothing in the Applicant’s conduct provided a valid reason for termination.’
· As to whether the Respondent was notified of the reason for the dismissal (s.387(b)), the Commissioner found that the she ‘was not notified of the reason for the dismissal. The reasons advanced were unspecified and spurious’ (see [43]-[44]).
· As to whether the Respondent was given an opportunity to respond (s.387(c)), the Commissioner found (at [46]):
‘Noting that the Respondent’s concerns with the Applicant were unspecified and spurious I find the Applicant was not given an opportunity to respond to the reason for the dismissal…’
· There was no unreasonable refusal by the Appellant to allow the Respondent to have a support person present (s.387(d)) (see [48]).
· As to whether the Appellant had been warned (s.387(e)), the Commissioner concluded (at [50]):
‘For the reasons already stated I find the Respondent did not warn the Applicant about their unsatisfactory performance before the dismissal. I appreciate that Mr Sheng believes he did warn the Applicant, but he needs to understand that his efforts fell well short of what is expected. His belief that Applicant should have known that her job was on the line is simply not good enough. The Applicant was entitled to unequivocal warnings and entitled to properly understand her job was at risk. This did not occur.’[5]
· As to the size of the Appellant’s business and the absence of dedicated human resource management specialists or expertise (s.387(f) and (g)), the Commissioner found that these factors impacted on the procedures followed by the Appellant in effecting the dismissal (see [51]-[54]).
· The Commissioner then turned to consider other relevant matters (s.387(h)), noting at [55]:
‘The Applicant is pregnant. Being terminated at the beginning of her pregnancy has impacted upon her ability to find alternate work in the 9 months before she would otherwise be confined.’
The Commissioner then concluded that the dismissal was unfair.
The Commissioner next dealt with the question of remedy and found that reinstatement was inappropriate (see [59]-[62]) and an order for compensation was appropriate in all the circumstances (see [63]-[68]). The Commissioner then turned to consider the matters set out in s.392 of the Act before ordering the Appellant to pay the Respondent the amount of $19,831.73 in compensation (see [69]-[95]).
The Appeal
The Notice of Appeal states that the Decision ‘contains appealable errors’. On analysis, the somewhat discursive grounds of appeal can be distilled into two points:
The Commissioner erred in concluding that there was no valid reason for the Respondent’s dismissal and, in concluding that the dismissal was harsh, unjust or unreasonable.
The Commissioner erred in his determination of the quantum of compensation: ‘it is absolutely not fair for the Company to pay this substantial order of $19,831.73 that is the equivalent to an extra 18.75 weeks’ pay’.
The Appellant submitted that there were four matters which supported its contention that it was in the ‘public interest’ for the Commission to grant permission to appeal:
1.The Appellant is owned by an overseas shareholder who is doing everything possible to keep the business operating in Australia and to retain staff. The shareholder was ‘heartbroken’ to be continually suffering ‘further financial losses from this unfair judgement made by Commissioner John[s]’. The Company shareholder cannot afford to pay an ‘expensive compensation of $19,831.73 to an employee who did not create value, but damaged the business’.
2.All foreign investors would feel disappointed with such an unfair judgement and this would dim their passion and enthusiasm in keeping business in Australia.
3.With the loss of the RACV contract, the Appellant is now facing possible liquidation, with everyone losing their jobs.
4.The Commissioner’s decision will encourage unethical employees to take advantage of a small business employer by refusing to perform their duties. While the small business may have not acted strictly according to correct procedure, it is then punished by a substantial compensation order.
In his outline of submissions (and during his oral submissions) Mr Sheng (on behalf of the Appellant) explained the basis for the Appellant’s contention that the Commissioner had erred in the manner set out above. In particular:
ØThe Respondent had serious performance and behavioural issues at work, which had been raised with her. These issues gave rise to a valid reason for termination.
ØThe Respondent had been warned, on 22 May 2017, ‘that after a few months training provided to her if she can’t handle the job properly because of incompetence, company would eventually find another qualified travel consultant to replace her’.[6] The Appellant submitted that Ms Zhang had received further verbal warnings on 24 and 25 July 2017 and on 13 September 2017.
ØIn the event that the Respondent had not been dismissed in September 2017 due to ‘poor performance and bad attitude at work’ her position would have been made redundant in any event in October 2017.
ØIt is ‘absolutely not fair’ that the Appellant is required to pay the substantial order of compensation, $19,831.73.
Consideration
The decision subject to appeal was made under Part 3-2 - Unfair Dismissal - of the Act. Section 400(1) provides that permission to appeal must not be granted from such a decision unless the Commission considers that it is in the public interest to do so. Further, as we have mentioned, in such matters appeals on a question of fact may only be made on the ground that the decision involved a ‘significant error of fact’ (s.400(2)).
In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as ‘a stringent one’.[7] The Commission must not grant permission to appeal unless it considers that it is ‘in the public interest to do so’.
The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[8] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
‘...the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.’[9]
As we have mentioned, s.400(1) provides that permission to appeal must not be granted unless the Commission considers that it is in the public interest to do so.
As the Appellant was represented by its Finance Manager/Director (Mr Sheng) and the Respondent was representing herself, we provided both parties with a short document outlining the nature of the proceeding and the relevant statutory provisions, at the commencement of the hearing (see Attachment 1). We also took the parties through the document and gave them an opportunity to ask any questions.[10]
As mentioned earlier, the Appellant asserts that the Commissioner erred in finding that there was no valid reason for the Respondent’s dismissal and in concluding that the dismissal was harsh, unjust or unreasonable.
The arguments advanced by the Appellant amount to little more than a rerun of the arguments put to the Commissioner at first instance. So much is clear from a comparison between the Appellant’s outline of submissions and the submission of GTS and the witness statement of Mr Sheng in the proceedings before Commissioner Johns.[11] It is clear from the Decision that the Commissioner considered the evidence and arguments advanced on behalf of GTS in arriving at his decision. For example, on the issue of whether Ms Zhang received any warnings regarding unsatisfactory performance the Commissioner says:
‘[27] The Respondent then contends that the dismissal was consistent with the “Other Dismissal” part of the Code.
[28] However, Mr Sheng (on behalf of the Respondent) went on to concede that it he never expressly and unequivocally told the Applicant that her job was at risk. Having considered all the evidence I am not satisfied that the Applicant was at any time, in a practical and real sense, warned about her performance and warned that her job was on the line. Mr Sheng’s veiled references to possibly having to hire another travel consultant were all too opaque to properly be considered a warning as that phrase is properly understood.’[12]
The ‘Other Dismissal’ part of the Code referred to by the Commissioner states:
‘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.’
The Appellant does not point to any particular error by the Commissioner but rather simply reruns the arguments advanced at first instance in the hope of a more favourable result.
The function of an appeal under s.604 (as modified by s.400) is to correct error. It is not the function of the appeal process to give unsuccessful parties an opportunity to simply rerun their case in the hope of a different outcome.
We are not persuaded that the Commissioner erred in his finding that there was no valid reason for Ms Zhang’s dismissal. Nor are we persuaded that the Commissioner erred in concluding that the dismissal was unfair. In reaching his conclusion the Commissioner gave proper consideration to the terms of the Code and the matters set out in s.387(a)-(h).
In relation to the question of compensation the Appellant simply asserts that it is ‘not fair’. It is not contended that the Commissioner made a significant error of fact in determining the question and nor does the Appellant point to any particular error. The appeal ground amounts to, in essence, a complaint about the result.
In assessing compensation, it is necessary to take into account all the circumstances of the case, including the specific matters identified in s.392(2)(a) to (g), and to consider the other relevant requirements of s.392.
The well-established approach to the assessment of compensation under s.392 is to apply the ‘Sprigg formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket.[13] This approach was articulated in the context of the current legislative framework in Bowden v Ottrey Homes Cobram and District Retirement Villages.[14] 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.
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 an amount that is considered appropriate having regard to all the circumstances of the case.[15]
The Commissioner dealt with the question of compensation at [63]-[95], in particular he:
· Determined that an order for compensation was appropriate, after taking into account GTS’s submissions regarding its ‘precarious financial position’ (at [66]-[68]) (see s.390(3)(b)).
· Found that the Respondent would have continued to be employed for 28 weeks had she not been dismissed. The Commissioner accepted the Applicant’s evidence that she would have continued in employment until April as she was due to give birth in May 2018. The Commissioner also rejected GTS’s contention that the Applicant would have been made redundant because of the loss of the RACV contract (at [72]-[76]) (see s.392(2)(c)).
· Made a deduction of 3 weeks’ pay on account of the payment made by GTS to the Applicant in lieu of notice (at [77]) (see s.392(2)(e)).
· Found that no income was likely to be earned between the making of the order for compensation and the actual compensation (at [78]) (see s.392(2)(f)).
· Made a 25 percent deduction for contingencies given the precarious nature of the Respondent’s business (at [79]-[82]) (see s.392(2)(g)).
· Found that an order for compensation in the amount proposed will not affect the viability of the Respondent (at [83]-[84]) (see s.392(2)(a)).
· Concluded that the Applicant’s period of service did not affect the amount of compensation to be ordered (at [85]) (see s.392(2)(b)).
· Found that the Applicant made efforts to mitigate her loss (at [86]-[87]) (see s.392(2)(d)).
· Made no deduction for misconduct as he had not found that any misconduct by the Applicant contributed to the dismissal (at [88]) (see s.392(3)).
· Noted that the amount of compensation does not include a component for shock, humiliation or distress (at [89]) (see s.392(4)).
· Found that the amount of compensation to be ordered does not exceed the compensation cap (at [90]-[93]) (see s.392(5)).
· Noted that the Respondent did not seek to pay any compensation by instalments (at [94]) (see s.393).
The process set out above resulted in an order for compensation of $19,831.73 which the Commissioner concluded (at [95]) was appropriate.
The Commissioner’s decision does not disclose any error of principle or significant error of fact in his determination of the amount of compensation to be ordered.
Conclusion
We are not persuaded that the Appellant has established that it is in the public interest to grant permission to appeal. Nor are we persuaded that the Appellant has established an arguable case of error in relation to the Decision subject to appeal or that there are any other considerations that warrant the grant of permission to appeal. Accordingly, permission to appeal is refused.
PRESIDENT
Appearances:
Mr P Sheng, Finance Manager/Director for the Appellant.
Ms B Zhang, self-represented.
Hearing details:
2018.
Sydney;
February 8.
<PR600522>
ATTACHMENT 1
C2018/284 – GTS Travel Management v Bernice Zhang
An appeal under the Fair Work Act is by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. An appeal is not as of right and permission to appeal must first be obtained.[16]
Subsection 604(2) of the FW Act requires the Commission to grant permission to appeal if satisfied that it is ‘in the public interest to do so’. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[17] A Full Bench decision has identified some of the considerations that may attract the public interest:
‘... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.’[18]
Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which would usually justify the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused.[19]
Section 400 modifies s.604(2) in relation to a certain category of decisions. It provides:
‘400 Appeal rights
(1) Despite subsection 604(2), FWC must not grant permission to appeal from a decision made by the FWC under this Part unless FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.’
The reference in s.400(1) to ‘this Part’ is a reference to Part 3-2 of the FW Act, which is concerned with unfair dismissal. If s.400(1) applies, the public interest is the sole criterion for the grant or refusal of permission to appeal. If the Appeal Bench does not consider that it is in the public interest to grant permission to appeal, it must refuse such permission. Further, in such matters appeals on a question of fact may only be made on the ground that the decision involved a ‘significant error of fact’ (s.400(2)).
[1] [2017] FWC 7061.
[2] PR599148.
[3] [2017] FWC 7061 at [95]; PR599148.
[4] This is so because on appeal FWC has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
[5] Also see [2017] FWC 7061 at [28].
[6] Appellant’s Outline of Submissions, page 3.
[7] (2011) 192 FCR 78 at [43].
[8] O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennon, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54 at [44]-[46].
[9] (2010) 197 IR 266 at [27].
[10] Transcript of proceedings, 8 February 2018 at [5]-[15].
[11] See Exhibits R1 and R2 at first instance.
[12] [2017] FWC 7061 at [27]-[28].
[13] Print R0235, (1998) 88 IR 21.
[14] (2013) 229 IR 6.
[15] Ibid.
[16] Section 604(1) Fair Work Act 2009 (Cth).
[17] Printed by authority of the Commonwealth Government Printer
GlaxoSmithKline Australia Pty Ltd v Making[2010] FWAFB 5343 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], affirmed on judicial review; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; Ferrymen Pty Ltd v Maritime Union of Australia[2013] FWCFB 8025; and NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663.
[18] (2010) 197 IR 266 at [27].
[19] Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481. Also see the Explanatory Memorandum to what is now s.604, at paragraph 2328.
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