Jann Walker v CM Iandolo Pty Ltd T/A Ballistik Hair and Beauty Studio
[2017] FWC 174
•13 MARCH 2017
| [2017] FWC 174 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Jann Walker
v
CM Iandolo Pty Ltd T/A Ballistik Hair and Beauty Studio
(U2016/7198)
COMMISSIONER HUNT | BRISBANE, 13 MARCH 2017 |
Application for relief from unfair dismissal – jurisdictional objection - Small Business Fair Dismissal Code.
[1] Mrs Jann Walker has applied under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to her dismissal by CM Iandolo Pty Ltd T/A Ballistik Hair and Beauty Studio (Ballistik Hair). Mrs Walker alleges the termination of her employment was harsh, unjust or unreasonable.
[2] Ballistik Hair has raised a jurisdictional objection to the application that as a small business, the dismissal of Mrs Walker was consistent with the Small Business Fair Dismissal Code (the Code).
[3] The matter was listed for a jurisdictional and merits hearing on 14 and 18 November 2016.
[4] Mrs Walker was represented by Ms Kerri-Ann Dear of Queensland Working Women’s Service. It was not necessary for Ms Dear to seek leave as she was not representing Mrs Walker as a paid agent or as a solicitor. Mrs Walker gave evidence on her own behalf. Ms Rebecca Stephan was also called on by the Commission to give evidence during the second day of hearing.
[5] Mrs Constance Iandolo appeared with Mr Marco Iandolo for Ballistik Hair. Mrs Iandolo gave evidence on behalf of Ballistik Hair.
Background
[6] Mrs Walker commenced employment with Ballistik Hair on 15 December 2015. Mrs Walker had commenced employment with a hairdresser (the first entity) from approximately March 2008, and a transfer of business occurred at some time such that Mrs Walker’s service was transferred to the second hairdresser (the second entity). In the employ of the second entity, Mrs Walker worked alongside Mrs Iandolo where both women worked as Senior Hair Stylists.
[7] In December 2015, Mrs Iandolo purchased the hairdressing business from the second entity and continued to employ Mrs Walker. Ballistik Hair did not provide to Mrs Walker a notification in writing pursuant to s.384(2)(b)(iii) of the Act that her service would not be recognised, and accordingly the service is treated as continuous from the commencement of her employment in March 2008.
[8] Mrs Walker wished to be a casual employee in order to earn a higher rate of pay than that of a permanent employee. Her hours of work fluctuated to some degree, but it is not contested that she was, at the time of the dismissal a casual employee employed on a regular and systematic basis, and she had a reasonable expectation of continuing employment on a regular and systematic basis.
[9] At the time of the dismissal in May 2016, Mrs Walker had approximately 7 years, 6 months’ service. Having been dismissed with more than 7 years’ service but less than 10 years’ service, Mrs Walker is not entitled to be paid pro-rata long service due to the dismissal. Section 43(4)(c) of the Industrial Relations Act 1999 (Qld) provides that an employee who has been dismissed by the employer between 7 and 10 years of service will be entitled to pro-rata long service leave except where the employer dismisses the employee for a reason other than the employee’s conduct, capacity or performance, or the employer unfairly dismisses the employee.
[10] Mrs Walker was dismissed by Ballistik Hair for reasons to do with her purported conduct. Accordingly, if Mrs Walker can demonstrate she has been unfairly dismissed by Ballistik Hair, she will arguably be entitled to payment of pro-rata long service for all of her continuous service.
[11] During mediation before me it was understood by the parties that the proceedings before the Commission, if required to be arbitrated, would not only determine if the dismissal was in accordance with the Act, it might entitle Mrs Walker to payment of pro-rata long service leave if a finding is made the dismissal was unfair. Ms Iandolo stated she understood the potential risk to her business, and would make inquiries as to whether earlier owners of the business would be responsible, in that scenario, for contributions towards any potential payment.
[12] At the time of the dismissal, there were only three people working at Ballistik Hair, that being Mrs Iandolo, Mrs Walker and Ms Stephan, employed as an apprentice hairdresser.
Mrs Walker’s workers compensation injury
[13] Since 2012 Mrs Walker has experienced a condition with her right wrist, De Quervain Tenosynovitis. She made a successful Workcover claim at that time and subsequently received treatment. Mrs Walker claimed pain resulting from the condition returned in February 2016, and an application to reopen her claim to Workcover was accepted.
[14] Mrs Iandolo was not aware of Mrs Walker’s on-going Workcover claim prior to February 2016, as the claim had been made with the previous owners of the business. Mrs Iandolo was aware that Mrs Walker had been to the doctor about her hand on 17 December 2015, however had not been advised by Mrs Walker that she was experiencing continued pain. 1
Incidents between Mrs Walker and Mrs Iandolo
[15] On 8 January 2016, Mrs Iandolo held a breakfast meeting with Mrs Walker and Ms Stephan. She encouraged her two employees to share ideas on how to build the salon’s business. She informed both employees that senior discounts were not authorised to be given to elderly clients, except on days designated as ‘senior days’. This rule applied universally, except for three nominated clients to whom Mrs Walker had a long-standing arrangement to offer senior discounts to.
[16] On 1 February 2016, just prior to leaving for the day, Mrs Walker informed Mrs Iandolo that Workcover would be contacting her to discuss her workers’ compensation claim as she required another injection to her wrist. This came as a surprise to Mrs Iandolo, as she was aware that Mrs Walker had seen a doctor about her wrist on 17 December 2015, but she didn’t appreciate that Mrs Iandolo was still experiencing pain as Mrs Walker had not complained of her wrist being sore.
[17] Mrs Iandolo was contacted by a person from Workcover who advised that Mrs Walker’s claim was considered a pre-existing injury and Ballistik Hair would not experience any issues with the claim.
[18] On 15 February 2016, Mrs Iandolo met with Mrs Walker to inform her that she was aware Mrs Walker had been continuing to provide senior discounts beyond those authorised by her. Mrs Iandolo informed Mrs Walker that she considered it to be ‘theft’, and she considered Mrs Walker was doing this to increase her hours. The salon’s daily earnings were affected by the unauthorised discounts. Mrs Iandolo contended that she told Mrs Walker to stop doing this. 2
[19] Mrs Walker agreed during the hearing that a conversation had occurred, but denied Mrs Iandolo stated it must stop as she considered it theft. She also denied that Mrs Iandolo had said it was a practice being used by Mrs Walker to inflate her hours of work. 3
[20] On 2 March 2016, there was a verbal argument in the salon between Mrs Walker and Mrs Iandolo due to an issue with Mrs Walker being overbooked and running late for her next client. Mrs Walker was purportedly rude and aggressive and accused Mrs Iandolo of being responsible for overbooking her. Mrs Iandolo provided Mrs Walker with a ‘stern’ verbal warning about the incident and advised her that it was never to happen again in front of clients and if it did, she would no longer work for Ballistik Hair. 4
[21] In questioning from the Commission during the hearing, Mrs Walker denied she had raised her voice during this incident, and denied receiving a warning from Mrs Iandolo. 5
[22] Mrs Iandolo conducted a further meeting with Mrs Walker on 8 March 2016 regarding the incident that occurred on 2 March 2016. Mrs Iandolo contended that Mrs Walker refused to admit any wrongdoing. Mrs Walker did acknowledge that she and Mrs Iandolo should not have been arguing in front of clients or Ms Stephan. Mrs Iandolo determined not to raise the matter further out of concerns for her business.
[23] Following the meeting, Mrs Iandolo informed Ms Stephan that such an incident would not happen again.
[24] On Mrs Walker’s birthday in March, Mrs Iandolo gave her gifts including chocolate, flowers, a card, together with money to purchase a facial at her favourite salon.
[25] In cross-examination, Mrs Walker contended that Mrs Iandolo was not approachable. She agreed, however, that when she had complained about not being able to fit things into the small fridge in the salon, Mrs Iandolo purchased a larger fridge. When asked in cross-examination how Mrs Iandolo could be considered unapproachable when things such as redesigning the back of the salon to include an eating area, Mrs Walker answered, “Don’t know.” 6
[26] It is Mrs Iandolo’s evidence that during April 2016, a number of her clients informed her that Mrs Walker had been informing clients that she was unhappy with the number of hours she was being offered. Mrs Iandolo did not call any witnesses to give such evidence. In answering questions of the Commission during the hearing, Mrs Walker agreed she had been discussing her reduced hours of work with clients while they were in the salon. 7
[27] Mrs Iandolo stated that on one occasion she walked into the salon and caught Mrs Walker having such a conversation with a client who was seated in the chair. The client saw Mrs Iandolo through the mirror, and according to Mrs Iandolo, she appeared to be embarrassed. Mrs Iandolo felt uncomfortable in her own salon.
Discussion of 11 May 2016
[28] It is uncontested that a discussion took place between Mrs Walker and Mrs Iandolo sometime on 11 May 2016. What is contested is what was said during that discussion.
[29] Mrs Iandolo contended that a discussion with Mrs Walker concerning the injury to the wrist was the first time Mrs Walker had communicated the severity of her injury. Mrs Iandolo questioned Mrs Walker as to why she had overheard talk in the salon regarding Mrs Walker having to have surgery on her wrist. Mrs Iandolo stated she was seeing her specialist the next day, and she would inform Mrs Iandolo if she required surgery.
[30] Mrs Iandolo contended Mrs Walker raised issues around the lack of hours she was working, to which Mrs Iandolo reminded her it was a quiet time of the year. Mrs Iandolo contends Mrs Walker responded, “If you know anything about owning a business, you would have put money away in the good times to cover the bad, and if you still don’t know that then I don’t know what you are doing owning this business.”
[31] In answering questions of the Commission, Mrs Walker stated that she said words to the effect, “When you own a business you’ve got to put money aside for the good times and the bad times.” She agreed that Mrs Iandolo said to her she was being rude and disrespectful. Mrs Walker apologised. 8 Mrs Walker explained that her husband hadn’t had much work recently, and she was relying on her hours of work for the family income.
[32] Mrs Iandolo also contended that issues regarding misconduct by Mrs Walker were communicated including disrespect and insubordination in front of clients and discussions of salon business with clients in violation of confidentiality requirements in Mrs Walker’s contract. Mrs Iandolo then warned Mrs Walker that her insubordinate behaviour should cease immediately and would no longer be tolerated in the salon.
Discovery of Client List
[33] Mrs Iandolo did not perform work in the salon on Friday, 13 May 2016, other than for one regular client. Mrs Walker informed Mrs Iandolo that she would require surgery for her wrist, and would be unfit for work for a period of 4-6 weeks. Mrs Iandolo thanked her and stated it would be discussed during the meeting planned for later in the day.
[34] It is Mrs Iandolo’s evidence that she then reviewed the appointment book and discovered a piece of paper containing contact details of salon clients. Mrs Iandolo asked Ms Stephan why the client details had been written on a piece of paper, together with phone numbers. It is Mrs Iandolo’s evidence that Ms Stephan replied, “Jann asked me to collect her client details and telephone numbers due to her upcoming operation.”
[35] Mrs Walker overheard the conversation and stated, “Oh, I just asked Rebecca to get my clients’ contact details so we can phone them [today] to say I am going for my operation.”
[36] Mrs Iandolo contended this scenario did not make sense, as Friday is the salon’s busiest day, and it would not be appropriate to call clients on a Friday. She considered if phone calls were going to be made, noting that the wrist operation was planned for two to three weeks’ time, the calls could be made from the following Monday using the client cards without having to reproduce the clients’ details.
[37] Mrs Iandolo contended that client information is never written down, as it is unnecessary to do so as the information is contained on the client cards.
[38] Mrs Iandolo left the salon during the day and returned in the afternoon. She convened the planned meeting with Mrs Walker, but before she did so, she sent Ms Stephan home from work. The meeting had originally been planned to discuss the upcoming operation, but Mrs Iandolo felt compelled to put to Mrs Walker concerns she had with respect to potentially stealing client information. The meeting was conducted approximately 45 minutes after Mrs Iandolo had discovered the piece of paper containing the clients’ details. 9
[39] Mrs Walker contended the information requested from Ms Stephan was for the purpose of contacting clients to make arrangements around Mrs Walker’s upcoming operation. She did not request Ms Stephan write the clients’ names and numbers down; she simply asked her to ring clients to see if they wished to re-book their appointments before Mrs Walker had her operation on 31 May 2016. 10
[40] Mrs Walker’s evidence is that during the meeting Mrs Iandolo dismissed her, saying “we’re not getting along and it was better if you left”. Mrs Walker contended there was no other reason provided for her dismissal, but agreed to leave the premises immediately at Mrs Iandolo’s request. In cross-examination, Mrs Walker agreed that she had been asked by Mrs Iandolo during the meeting as to why the client details had been written on the card. Mrs Walker’s evidence is that she didn’t defend herself over this issue because she didn’t know the details had been written on a separate piece of paper, she hadn’t asked Ms Stephan to do so, nor did she realise she was being dismissed. 11
[41] Mrs Iandolo contends she summarily dismissed Mrs Walker as she considered she had ‘pursued client information’ by organising for a client list to be prepared. Her evidence is that she was extremely concerned for her business.
[42] Mrs Iandolo contends the following conversation was had:
‘Walker: This ….is not working out between us.
Mrs Walker nodded her head in agreement.
Iandolo: You are not happy here?
Walker: No.
Iandolo: Due to what has transpired here today I have no other option but to terminate your contract.
Walker: When would you like me to go?
Iandolo: Today.’
[43] It is Mrs Iandolo’s evidence that because Mrs Walker was not upset and she did not make demands for any payments due and outstanding, she believed Mrs Walker, ‘in her heart knew that I was right.’ 12
Evidence of Rebecca Stephan
[44] During the first day of hearing it became evident that the Commission could not be properly informed of all relevant matters unless Ms Stephan, the apprentice hairdresser gave evidence. The Commission was sensitive to her young years and allowed her to give evidence on the second day of hearing by way of telephone, with her mother in a room nearby but not in the same room.
[45] Following the incident on 2 March 2016 where it was suggested that Mrs Walker had acted aggressively to Mrs Iandolo, Ms Stephan sent a text message to Mrs Iandolo to request a meeting. The meeting was held the following morning before the start of work. Ms Stephan’s mother also attended the meeting.
[46] Ms Stephan’s evidence is that she was becoming uncomfortable in the salon as it had become tense between Mrs Walker and Mrs Iandolo. She agreed that she had tears in her eyes during the meeting with Mrs Iandolo and her mother, and she was emotional.
[47] The interaction between the two women improved for a short time before it again became tense after a week or two. She confirmed that Mrs Walker had raised her voice in the salon. 13
[48] In answering questions from the Commission, it was Ms Stephan’s evidence that there had not been any tension between the women until Mrs Iandolo purchased the salon. Thereafter talk between the women was limited, and only if they were at lunch might there be greater conversation between the two. Ms Stephan stated that it was ‘awkward’ and they were ‘short’ with each other, but not generally rude to each other.
[49] It is Ms Stephan’s evidence that on 13 May 2016, Mrs Walker asked her to contact clients booked during the period of her impending surgery to see if they’d like to come in earlier. Ms Stephan stated that she made the list on a piece of paper as the bookings were further along in the book and it was becoming difficult to keep finding the page to see what time the bookings were and if they had rung back, or if she had left a message. 14
[50] Ms Stephan stated she put the piece of paper in the bin.
Following the dismissal
[51] It is Mrs Iandolo’s contention that following the dismissal she was abused by a number of salon clients who had ‘taken sides’ with Mrs Walker. After recovering from the wrist surgery, Mrs Walker commenced working at a salon approximately 2km from the Ballistik Hair studio. Mrs Walker paid the owner of the salon rental for the hire of a chair and clients came to see her as she built up her client base.
[52] In answering questions from the Commission during the hearing, Mrs Walker stated that during her employment with Ballistik Hair she did not know of this other salon. Approximately six weeks following the wrist operation, a friend asked her what she was going to do, and recommended she contact the owner of the salon to inquire about work opportunities. 15
[53] Mrs Iandolo contended that Mrs Walker had taken the piece of paper with the client details on it as she could not find the piece of paper. 16
[54] Mrs Iandolo contends that her clients have split into three camps; firstly, those who support Mrs Iandolo; secondly, those who support Mrs Walker; and thirdly, those who simply want to have their hair done by Mrs Iandolo and do not wish to be involved in the parties’ dispute.
[55] In cross-examination, Mrs Walker was asked if she did hairdressing work on clients’ hair in the two weeks between the dismissal and the wrist operation. She agreed that she did, however Mrs Walker’s evidence was evasive: 17
‘Mr Iandolo: And you obviously got paid for that?
Mrs Walker: No, not really, no.
Mr Iandolo: Not really?
Mrs Walker: No.
Mr Iandolo: All this were for free and you got no money?
Mrs Walker: No.’
[56] In answering questions from the Commission, Mrs Walker’s evidence is that during the two week period she only set three people’s hair in their homes and did not receive any cash payment. Her evidence is that ‘they were old clients and friends’, yet Mrs Walker stated earlier that during her employment with Ballistik Hair she had not set people’s hair outside of the workplace. 18
Relevant legislative provisions
[57] Section 385 of the Act sets out the requirements which must be satisfied in order for the Commission to find that a person has been unfairly dismissed:
‘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.’
[58] In relation to the jurisdictional objection in the present matter, s.388 of the Act relevantly provides:
‘388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.’
[59] Section 23 provides a definition of a “small business employer” for the purpose of the Act. Relevantly, s.23(1) provides that “A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time”. There was no dispute that Ballistik Hair was a small business employer at the time of Mrs Walker’s dismissal.
[60] The Code declared by the Minister pursuant to s.388(1) is as follows:
‘Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.’
Did the “Summary dismissal” section of the Code apply?
[61] The Full Bench in Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services 19 considered the proper application of the ‘Summary Dismissal’ section of the Code. The Full Bench’s conclusions were as follows:
‘[38] We therefore consider that the “Summary dismissal” section of the Code applies to dismissals without notice on the ground of serious misconduct as defined in reg.1.07.
[39] To be clear, nothing stated above is to be taken as suggesting that in relation to such a dismissal it is necessary for the Commission to be satisfied that the serious misconduct which is the basis for the dismissal actually occurred in order for the dismissal not to be unfair. As was explained in Pinawin T/A RoseVi.Hair.Face.Body v Domingo: 20
“[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.”
[40] Whether the employer had “reasonable grounds” for the relevant belief is of course to be determined objectively.
[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:
(1) If a small business employer has dismissed an employee without notice - that is, with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.
(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.’ 21
[62] In the present case, Mrs Walker’s dismissal took effect without notice, and as a casual employee she was not entitled to any payment of notice. Ballistik Hair has characterised the reason for Mrs Walker’s dismissal as serious misconduct through the unfair dismissal proceedings, and alleged that Mrs Walker intended to ‘defraud’ the business through the theft of its list of clients for a future financial gain.
[63] Having regard to the circumstances surrounding the dismissal and taking Ryman into consideration, I am satisfied that Mrs Walker’s dismissal falls into consideration under the “Summary dismissal” section of the Code. I will now turn to whether Ballistik Hair held a belief on reasonable grounds that Mrs Walker’s conduct justified immediate dismissal.
Did Ballistik Hair believe that Mrs Walker had engaged in conduct sufficiently serious to justify immediate dismissal?
[64] Whether Ballistik Hair genuinely held the belief that Mrs Walker’s conduct on 13 May 2016 justified immediate dismissal is a question of fact. 22 The conduct alleged by Ballistik Hair that led to Mrs Walker’s dismissal followed the discovery by Mrs Iandolo of a piece of paper containing Ballistik Hair’s client’s details.
[65] Ballistik Hair submitted that it had no choice but to dismiss Mrs Walker as it could not fathom any reason for the existence of the client list, and Mrs Walker was largely unresponsive during the meeting when discussing the client list.
[66] Ballistik Hair further submitted that the incident was further compounded by the fracturing of the relationship between Mrs Iandolo and Mrs Walker and reports from clients that Mrs Walker was unhappy and was planning to leave the salon. Ballistik Hair contended that it ‘made sense’ that Mrs Walker would secure Ballistik Hair’s clients for her own benefit or profit in her future employment endeavours.
[67] I have had regard to the evidence adduced at the hearing relating to the events surrounding the dismissal, in particular that of Mrs Iandolo. I am satisfied that Mrs Iandolo held a genuine belief that Mrs Walker had engaged in conduct, being the alleged theft of its client’s details for personal gain, that was sufficiently serious to justify summary dismissal.
Was Ballistik Hair’s belief based on reasonable grounds?
[68] The question of whether the belief of Ballistik Hair was based on reasonable grounds is to be determined objectively. It is also relevant to consider whether Ballistik Hair had carried out a reasonable investigation into the matter resulting in Mrs Walker’s immediate dismissal.
[69] In relation to the requirement for reasonable grounds and the need for a reasonable investigation, the Full Bench in Pinawin said the following:
‘Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.’ 23
[70] In considering whether there were reasonable grounds justifying the immediate dismissal of Mrs Walker, I have given consideration to the evidence of Mrs Iandolo and her actions at the time of the dismissal.
[71] I am not satisfied that Mrs Iandolo’s belief was based upon reasonable grounds. Upon discovery of the piece of paper with client information on it, Mrs Iandolo dismissed Mrs Walker within approximately 45 minutes.
[72] Ms Stephan’s evidence that she had to go forward in the appointment book some weeks to discover those who had appointments with Mrs Walker, and often leave messages for those clients, carries substantial weight. It is understandable that a young apprentice, attempting to fit an additional task in among with her other duties while she had to make and receive phone calls might have considered putting a list together to be a sensible course of action.
[73] Pulling client cards out would have only assisted to some degree. With a substantial number of clients to call, Ms Stephan took it upon herself to compile the list. I am satisfied she was not directed by Mrs Walker to make a list of client details on a separate piece of paper.
[74] Further, Mrs Iandolo did not even retain possession of the piece of paper. If the piece of paper was of such significant concern, and constituted a real and viable threat to her business if the client details were taken from the premises, it would be expected that Mrs Iandolo would take possession of the piece of paper and destroy it.
[75] I do not consider that Mrs Iandolo’s belief that Mrs Walker had instructed Ms Stephan to compile the list was on reasonable grounds. I do not consider that she reached a reasonable conclusion with the information before her, nor did she undertake a satisfactory investigation into the matter.
[76] As Mrs Iandolo stated during the hearing, Mrs Walker had opportunity at various times throughout her employment to make such a list. This included when Mrs Iandolo was not at work due to having her rostered day off, or on annual leave. It was known to Mrs Walker and Ms Stephan that Mrs Iandolo would be attending the salon on the Friday morning to do a regular customer’s hair before she had the remainder of the day off work. It does not correlate that Mrs Walker gave instructions to Ms Stephan to compile a list for her to use for her own benefit if Mrs Iandolo would, at some point during the day, be in the salon.
[77] Further, if Mrs Walker had wanted client details, it would not have taken her very long, I suspect, to create her own list from the client cards or put relevant details into her mobile phone.
[78] While Ballistik Hair urges the Commission to give weight to the events in the days following the dismissal, that is, clients being aware of Mrs Walker’s dismissal, I am satisfied that Mrs Walker had some genuine friendships with some clients of the salon prior to her dismissal, and she had shared her contact details with at least nine clients. Simply because some clients knew of Mrs Walker’s dismissal when telephoned by Mrs Iandolo does not demonstrate a theft of client details, as is submitted by Ballistik Hair.
[79] Accordingly I am not satisfied Mrs Walker was dismissed in accordance with the Code and Ballistik Hair’s jurisdictional objection is dismissed.
Harsh, unjust or unreasonable
[80] I must now consider whether the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:
‘387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.’
[81] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd 24 by McHugh and Gummow JJ as follows:
“.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[82] I am under a duty to consider each of these criteria in reaching my conclusion. 25
[83] I will now consider each of the criteria at s.387 of the Act separately.
Valid reason - s.387(a)
[84] Ballistik Hair must have a valid reason for the dismissal of Mrs Walker, although it need not be the reason given to the applicant at the time of the dismissal.26 The reasons should be “sound, defensible and well founded”27 and should not be “capricious, fanciful, spiteful or prejudiced.”28
[85] Mrs Walker was summarily dismissed on 13 May 2016 which resulted from an incident between Mrs Walker and Mrs Iandolo. The facts of the dispute are largely dealt with in my consideration above and my findings are apposite to whether there was a valid reason. There was no evidence to support the allegation of theft put by Mrs Iandolo, and I am satisfied on balance that Mrs Walker was not guilty of the misconduct alleged.
[86] Ballistik Hair contended that the incidents of rude and disrespectful behaviour between Mrs Walker and Mrs Iandolo which occurred between March and May 2016 also formed a basis for a valid reason for dismissal.
[87] Mrs Walker contended that the reason provided by Mrs Iandolo for her dismissal was only that they were not getting along. Mrs Walker argued this reason was insufficient and the dismissal was capricious and impulsive.
[88] With regard to Mrs Iandolo’s evidence at [42], Mrs Iandolo did not ask many questions of Mrs Walker when she decided to dismiss her. She stated that it wasn’t working out between the two, asked her if she was happy, and then stated, “Due to what has transpired here today I have no other option but to terminate your contract.”
[89] Mrs Iandolo’s contention at [43], that because Mrs Walker was not upset, she must have known ‘in her heart’ that Mrs Iandolo was correct is not accepted by the Commission. It is not for Mrs Iandolo to determine what Mrs Walker thought or felt during the experience of being dismissed from a salon where she had worked for seven years.
[90] Having found that Mrs Walker was not guilty of the misconduct alleged, a valid reason for the dismissal has not been made out by Ballistik Hair with respect to the alleged insubordination of Mrs Walker and the apparent relationship breakdown of the two women. While these issues had been occurring for a lengthy period of time from March to May 2016, on 13 May 2016 there was no such incident to warrant dismissal. There being no incident on this day relevant to the concerns held by Ballistik Hair, there was no valid reason for the dismissal on these grounds.
[91] Accordingly, I find there was no valid reason for Mrs Walker’s dismissal.
Notification of the valid reason – s.387(b)
[92] Mrs Walker contended there was no notification of the valid reason for her dismissal, as Mrs Iandolo had only provided that they were not getting along.
[93] I do not consider that Mrs Iandolo squarely put to Mrs Walker that she had instructed Ms Stephan to compile a client list in order to take it off the premises and use it for her own benefit so that she could set up in competition to Ballistik Hair.
Opportunity to respond – s.387(c)
[94] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 29
[95] It is Mrs Iandolo’s evidence that the reasons for her dismissal were provided and an opportunity to respond was given, but Mrs Walker was silent and did not respond. 30 Mrs Walker contended the reasons were not put to her at the meeting prior to her dismissal, and that she did not think she needed to respond when Mrs Iandolo had told her to leave as they were not getting on31.
[96] For the reasons above in relation to notification of a valid reason for the dismissal, I am not satisfied that Mrs Walker was given a proper opportunity to respond when the allegations were not squarely put to her as to the assumptions made by Mrs Iandolo.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[97] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.
[98] Mrs Walker was not offered the opportunity to bring a support person with her to the meeting resulting in her dismissal, but neither did she request a support person. The legislative test is whether a request to allow a support person was refused. In this case it was not.
Warnings regarding unsatisfactory performance - s.387(e)
[99] It is the contention of Ballistik Hair that Mrs Walker’s dismissal related to misconduct. An alternative argument put by Ballistik Hair is that Mrs Walker’s conduct had been unsatisfactory.
[100] It relies on verbal warnings given to Mrs Walker in relation to extending senior discounts when not authorised to do so, and continuing to breach this direction. Further, it is submitted regard should be had for the tense relationship between Mrs Iandolo and Mrs Walker and the unacceptable conduct of Mrs Walker by raising her voice in front of clients and the apprentice.
[101] I am satisfied that in the months of February and March 2016, Mrs Walker was warned on a number of occasions as to unsatisfactory performance or conduct. This is supported by the fact that Ms Stephan became upset in relation to Mrs Walker’s conduct, resulting in a meeting requested by her to demonstrate to Mrs Iandolo that she was experiencing distress in the workplace.
Impact of the size of the Respondent on procedures followed - s.387(f); and Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)
[102] Ballistik Hair is a small business employing two employees at the time of the dismissal. It follows that the business has an absence of a dedicated human resources management or any expertise.
[103] I am also mindful of the incorrect views held by Mrs Iandolo at the time of the dismissal that Mrs Walker’s service with earlier employers did not count towards service under her employ. I expect that she probably considered that Mrs Walker did not have access to unfair dismissal protection given her short service under Mrs Iandolo’s employ.
Other relevant matters - s.387(h)
[104] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. I consider the following matters to be relevant to the determination of whether the dismissal of Mrs Walker was harsh, unjust or unreasonable:
[105] Having heard evidence from Ms Stephan, I am satisfied that the relationship between Mrs Iandolo and Mrs Walker broke down shortly after Mrs Iandolo acquired the business. On the evidence before the Commission, I do not consider this to have been largely the responsibility of Mrs Iandolo. She was running a small salon with a very experienced senior stylist in Mrs Walker. She was dependent upon Mrs Walker to staff the salon and her engagement with clients.
[106] I consider it would have been detrimental to the business to have dismissed Mrs Walker. There is likely to have been some resentment towards Mrs Iandolo on Mrs Walker’s behalf at Mrs Iandolo having acquired the business. This is demonstrated in her somewhat contemptuous remark to Mrs Iandolo at [30]. I accept Mrs Iandolo’s account of the conversation, particularly given Mrs Walker apologised to Mrs Iandolo.
[107] It was submitted by Mrs Walker that because she was due to have surgery on her wrist and unable to work for 4-6 weeks, this was largely the reason behind the dismissal. I appreciate the loss of Mrs Walker for this period of time would have been felt by Ballistik Hair, but I do not accept that Mrs Iandolo contrived the circumstances of 13 May 2016 in order to free herself of an employee with a workers’ compensation injury which, on her evidence, Ballistik Hair was not being held responsible.
[108] I have also had regard for the fact that upon being dismissed by Ballistik Hair, and recovering from wrist surgery, Mrs Walker as a woman aged in her 50’s would likely have experienced a difficult time securing employment when compared with a worker who was injury-free. This concern goes to the harshness of the dismissal.
[109] Further, I have had regard to Mrs Walker’s seven years’ service, together with her loss of payment of pro-rata long service leave due to the manner of the dismissal.
Conclusion
[110] Taking into account the above considerations, and notwithstanding the size of the business and the absence of dedicated human resources management specialists, I find that Mrs Walker’s dismissal was harsh, unjust and unreasonable.
[111] Notwithstanding the fact that Mrs Walker was not guilty of the conduct which primarily led to her dismissal, the dismissal was also effected in great haste and without due process.
Remedy
[112] Section 390 of the Act reads as follows:
‘390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.’
[113] Mrs Walker is a person protected from unfair dismissal for the Act’s purposes, and is a person who has been unfairly dismissed. Mrs Walker does not seek reinstatement, and I am satisfied that reinstatement is inappropriate.
Compensation
[114] Section 392 of the Act provides:
‘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.’
Authorities
[115] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket32. That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey33; Jetstar Airways Pty Ltd v Neeteson-Lemkes34 and McCulloch v Calvary Health Care35 (McCulloch).
[116] I have had regard to the above authorities.
The effect of the order on the viability of Ballistik Hair
[117] While evidence was not put to the Commission strictly dealing with this issue, Mrs Iandolo gave evidence that due to a number of clients supporting Mrs Walker, the salon has lost a lot of clients. 36 This evidence was not challenged.
[118] The submission of Ballistik Hair is that the salon has had reduced patronage due to Mrs Walker no longer working at the salon. It was put by the respondent that the business is ‘under financial distress and it needs time to recover.’ 37
[119] I have given relative weight to the submission of Ballistik Hair, noting that the submissions do not carry the weight of evidence. 38
[120] I am satisfied that an award of compensation, depending on the amount ordered would likely effect the viability of Ballistik Hair. It is a salon with a principal and an apprentice hairdresser. The turnover of the business would therefore be modest.
[121] I have decided to reduce the amount (prior to a reduction of remuneration earned by Mrs Walker) by an amount of 25%.
The length of Mrs Walker’s service
[122] Mrs Walker had been employed for a period of approximately seven years, six months. This is a considerable period of time.
The remuneration that Mrs Walker would have received, or would have been likely to receive, if he had not been dismissed
[123] I am of the view that Mrs Walker’s employment would not have continued for an extended period of time.
[124] The level of congeniality between Mrs Iandolo and Mrs Walker was reducing on a daily basis. Mrs Walker was speaking with clients expressing her dissatisfaction with her hours of work. The workplace was particularly tense for Ms Stephan, who was torn between her friendship with Mrs Walker and her obligation to Mrs Iandolo.
[125] With Mrs Walker’s hours of work reducing, and with her husband’s reduced hours, I conclude that Mrs Walker would have left the business a short period of time after having surgery. Alternatively, I determine that Mrs Walker’s insolence towards Mrs Iandolo would have continued on her return to work after having surgery, and she would have been dismissed shortly thereafter.
[126] I conclude that but for the dismissal, Mrs Walker would have worked two weeks up until her surgery, and then for a period of no more than four weeks before she would have been dismissed or resigned her employment.
The efforts of Mrs Walker (if any) to mitigate the loss suffered because of the dismissal
[127] After recovering from surgery, Mrs Walker solicited an opportunity to hire a chair within a salon. This arrangement commenced from 1 August 2016.
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
[128] Mrs Walker’s evidence was that she was earning $603.84 per week, an amount of $25.16 per hour for 24 hours rostered per week while employed with Ballistik Hair. In the role commenced by her on 1 August 2016 she is earning $376.65 per week.
[129] Despite Mrs Walker’s evidence that she did not receive any payment in the weeks following the dismissal when she agreed to style clients’ hair in their homes, I find that she did receive some payment. I estimate this to be approximately $100.00.
The amount of any income reasonably likely to be so earned by Mrs Walker during the period between the making of the order for compensation and the actual compensation
[130] This factor is not relevant in the circumstances of this matter.
Other relevant matters
[131] While I am sympathetic to Ballistik Hair that it will be obliged, as an effect of this decision to pay compensation to Mrs Walker together with pro-rata long service leave, it is not a suitable reason to reduce the amount to be ordered. It is noted that Ballistik Hair did not make such a submission, however the Commission has been mindful of the effect on Ballistik Hair that a finding of unfair dismissal triggers the long service leave payment to Mrs Walker. There is no reduction for this statutory entitlement.
[132] Mrs Walker has received workers’ compensation payments from the date of her wrist operation on 31 May 2016 until such time as she was recovered. Such payments are generally considered as ‘remuneration’ and therefore the amount is deducted. There is no double-dipping allowed.
[133] If Mrs Walker’s surgery was on 31 May 2016, and she took approximately six weeks to recover, her weekly payments would have ended on or around 12 July 2016. If Mrs Walker would have been dismissed or left the employment within four weeks, that is, by 9 August 2016, it is necessary to make a deduction of one week for the remuneration earned by her in her subsequent work.
Misconduct reduces amount
[134] Section 392(3) requires that if the Commission is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
[135] The section requires that consideration be given by the Commission to whether misconduct contributed to the decision to dismiss an employee even where it has been found there was no valid reason for the termination.39 The absence of a valid reason may be relevant to the appropriate amount by which compensation should be reduced.40
[136] I have found earlier that a valid reason for dismissal did not exist, and that Mrs Walker was not guilty of the alleged misconduct.
Shock, distress etc. disregarded
[137] I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Mrs Walker by the manner of the dismissal.
Compensation Cap
[138] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
[139] The amount of compensation the Commission will order does not exceed the compensation cap.
Payment by instalments
[140] Ballistik Hair is a small business, and while submissions were not made by the parties as to whether an order should allow for the amount ordered to be paid by instalments, I consider this is a suitable situation where such an order should be made.
Order of compensation
[141] I have determined that Ballistik Hair is to pay to Mrs Walker the following amount of compensation less tax as required by law:
Two weeks and one day’s pay for the period 16 May 2016 – 30 May 2016
2.2 x $603.84 $1,328.45
Four weeks’ pay following a return to work
4 x $603.84 $2,415.36
Total $3,743.81
Less a deduction of 25% pursuant to s.392(2)(a) -$935.95
Less one week’s remuneration in hiring chair -$376.65
Less $100 in remuneration at [129] -$100
Grand total $2,331.21
[142] Ballistik Hair is to pay to Mrs Walker the amount of $2,331.21, together with 9.5% superannuation. The amount is to be paid in six weekly instalments.
COMMISSIONER
1 Statement of Constance Iandolo at [9].
2 Ibid at [10]
3 PN361.
4 Statement of Constance Iandolo at [11].
5 PN362.
6 PN111.
7 PN389.
8 PN419.
9 PN729.
10 PN125.
11 PN313.
12 Statement of Constance Iandolo at [19].
13 PN1142.
14 PN1222.
15 PN566.
16 PN538.
17 PN637.
18 PN664.
19 [2015] FWCFB 5264, [26]-[41].
20 [2012] FWAFB 1359, (2012) 219 IR 128.
21 [2015] FWCFB 5264, [38]-[41].
22 Ibid [43].
23 [2012] FWAFB 1359, [30].
24 [1995] HCA 24; (1995) 185 CLR 410 at 465.
25 Sayer v Melsteel[2011] FWAFB 7498 at [20].
26 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.
27 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.
28 Ibid.
29 RMIT v Asher (2010) 194 IR 1, 14-15.
30 PN272.
31 PN286
32 (1998) 88 IR 21.
33 [2013] FWCFB 431.
34 [2014] FWCFB 8683.
35 [2015] FWCFB 2267.
36 Statement of Condance Iandolo at page 6.
37 Closing submissions of respondent at page 9.
38 D.A. Moore v Highpace Pty Ltd (unreported, AIRCFB, Boulton J, Watson SDP, Whelan C, 18 May 1998).
39 Read v Gordon Square Child Care Centre Inc. [2013] FWCFB 762 [83].
40 Ibid.
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