[2017] FWC 6121

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394—Unfair dismissal

Jeff Parkes
v
Fat Prophets Pty Ltd
(U2017/3912)

DEPUTY PRESIDENT SAMS

SYDNEY, 5 DECEMBER 2017

Application for an unfair dismissal remedy – financial services industry – client adviser –agreement to work from home at remote location – expectation of ongoing employment – business restructure – no further opportunity to work from home – direction to relocate to Sydney – applicant did not resign – Commission’s jurisdiction established – direction lawful but not reasonable – termination of employment without warning or procedural fairness – unreasonable to direct relocation without appropriate transitional arrangements – no valid reason for dismissal – applicant’s dismissal harsh, unjust and unreasonable – reinstatement inappropriate – compensation ordered – orders made.

[1] Mr Jeff Parkes (the ‘applicant’) commenced employment with Fat Prophet’s Pty Ltd (the ‘respondent’) on 22 October 2014. The respondent is in the financial services industry and the applicant was employed as a Senior Client Advisor on a base salary of $59,360, plus commission. The applicant was initially employed in the Sydney office. However, in September 2016, around the time his wife obtained employment in Byron Bay, the applicant requested to work from home in Byron Bay. This arrangement was agreed to by the respondent. However, it was the respondent’s contention that this arrangement was only agreed to on a temporary basis, as there were plans for the company to open an office on the Gold Coast. This was scheduled to take place in early 2017, and the applicant had understood he would work at the Gold Coast office.

[2] After a review of the work from home arrangements and the abandonment of the proposal for the Gold Coast office, the respondent’s Chief Operating Officer, Mr Leo Lopez believed the applicant’s temporary arrangement could not continue. As a result, the applicant was directed to return to his role as Account Manager/Team Leader in the Sydney office. On 30 March 2017, Mr Lopez and Mr Patrick Ganley (former CFO) advised the applicant of the proposal for him to relocate to Sydney. The respondent claimed the applicant refused to return to Sydney and resigned that day. The applicant denied he was directed to return to Sydney; rather he was dismissed that day, without any discussion as to any alternative options. The next day, the applicant received a letter from Mr Lopez headed ‘Letter of Termination of Employment’, which said in the first paragraph:

‘We refer to notice issued to you on the 30th March and effective today the 31st March for the termination of your employment with Fat Prophets Pty Ltd.’

[3] On 11 April 2017, the applicant filed an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’), for an unfair dismissal remedy; specifically that he be reinstated to his former position and be paid lost remuneration since his dismissal. The application was listed for a Conciliator assisted phone conference on 12 May 2017, but the matter did not settle. After the matter was remitted to me for arbitration, I issued directions on 19 June 2017, for the hearing and fixed a hearing date. In accordance with my usual practice, I scheduled a further conference with the parties on 29 June 2017. Despite exchanges of offers of settlement between the parties, no settlement of the applicant’s claim was reached.

[4] The matter proceeded to hearing on 14 and 17 August 2017. I note that on the second day of the hearing, I raised with the parties a number of issues that might focus their attention on settlement of the application. As the matter was part heard, I asked another member of the Commission to preside over a settlement conference. Commissioner Cambridge kindly offered to do so. However, no settlement could be reached and the hearing continued. At the hearing the applicant was represented by Mr I Latham of Counsel, with permission being granted for the applicant to be legally represented, pursuant to section 596 of the Act. The respondent was represented by its Financial Controller, Mr Robert Dardano.

THE EVIDENCE

[5] The following persons provided statement and oral evidence in the proceedings:

a) Mr Jeffrey Parkes, the applicant;

b) Ms Helen Callaghan-Parkes, the applicant’s wife;

c) Mr Leo Lopez, Chief Operating Officer;

d) Mr Patrick Ganley, Executive Manager; and

e) Mr Robert Dardano, Financial Controller.

Mr Jeffrey Parkes

[6] The applicant claimed that in his two and a half years of employment there were no issues as to his conduct or performance. He always had positive feedback on his performance and was the number one sales writer two years in a row.

[7] It was the applicant’s evidence that in September 2016 his wife received a job offer in Byron Bay as a General Manager for a clothing company. He and his wife decided that she would only accept the job if he was able to work from home. To facilitate this, the applicant approached Mr Ganley and his manager, Mr Rhys Williams. He advised them of his wife’s job offer and requested he move to Byron Bay and work from home. Mr Ganley told him that approval would be needed and the Company would seek legal advice as to any regulatory issues. The legal advice looked at issues of monitoring, supervision and regulatory authorisation, but otherwise saw no legal impediment to the applicant working from home. Mr Ganley thereafter advised him it was okay for him to work from home, and the Company would set him up with a telephone and other relevant equipment. The applicant moved to Byron Bay in ‘mid-September’ (2016). The applicant claimed that at no time did anyone in management raise issues with this arrangement until March 2017.

[8] On 15 February 2017, Mr Ganley had called the applicant and sent an email to advise that a number of employees had left the Company. Mr Ganley asked of his intentions as to staying with the Company. The applicant replied:

‘Hi Pat

I really appreciate the phone call this afternoon confirming my position at Fat Prophets.

It was really great to hear that everyone is on the same page with my position as I love my job at Fat Prophets.

I am extremely happy to continue working with you all and I am always happy to step up to assist you with the future growth of the business.

Please do not hesitate to ask if I can assist you with anything now or in the future.’

[9] The applicant said that on 20 March 2017 he received a phone call from Mr Lopez, who introduced himself as the new COO. It was the applicant’s evidence that on 30 March 2017 he received a call from Mr Lopez who said to him:

‘I can’t have people working all over the countryside. We are going to have to terminate your employment.’

On the following day, when the applicant inquired of Mr Lopez as to the letter he promised him that day, the following text exchange occurred:

Leo Lopez: ‘Hi Jeff, I’ve been in back to back meetings since 9am with limited time in between so I apologies (sic) for my late response. I’ll gave (sic) this to you by EOD. Cheers Leo’

Applicant: ‘Thanks Leo! So you’re terminating me today & not yesterday then?’

Leo Lopez: ‘Termination was yesterday Jeff with formal notification going out today’

Applicant: ‘It’s not formal until I receive it!’

Leo Lopez: ‘Jeff I have no problem making the termination date today. I’ll have the letter and copy of contract send to you shortly. Leo’

[10] The applicant received the letter referred to later that day. The applicant claimed he is still unclear what the difficulties were with his working arrangements. Nor was he given any opportunity to respond to any issues prior to being dismissed. At no time did he resign, and he was never directed to work back in Sydney.

[11] In cross-examination, the applicant reaffirmed that in mid-August 2016, he had asked permission from Mr Williams and Mr Ganley, if it was possible to work from home, otherwise his wife would not have taken up a position in Byron Bay. He believed that he had this approval in mid-August 2016. The applicant was shown the email traffic between Mr Williams and Mr Ganley which commenced on 6 September 2016, when Mr Williams asked ‘When are we going to tell Angus and Rob about Jeff?’ However, the applicant claimed he had verbal approval from Mr Williams and Mr Ganley prior to this date.

[12] Mr Dardano challenged the date the applicant had given notice to vacate his property in Sydney. The applicant was unsure when his wife attended an interview for the new job, when she accepted the job, or when they had agreed to rent a property in Byron Bay.

[13] Mr Dardano put to the applicant that he did not have approval to work from home until 9 September 2016 and he had already planned to leave Sydney well before 6 September 2016. The applicant did not know when they gave notice to their Sydney agent of vacating the Sydney property, as his wife took care of all these matters. He could not recall when they signed the lease for the Byron Bay property. They had not inspected the property before moving into it on a lease of 12 months. Further, the applicant did not know when the removalist had been engaged to move their possessions because his wife took care of it. It was the applicant’s evidence that the removalist did not relocate their possessions until 13 September 2016, although he did not know when his wife had arranged the removalist.

[14] The applicant conceded that the CEO and CFO had not given approval for him to work from home as at 6 September 2016. However, his Manager and COO had said everything was fine and he had approval from them. Mr Dardano queried why he was seeking approval on 6 September if he already had it. The applicant said he was only asking if Mr Ganley and Mr Williams had responded to his request. The applicant agreed he had not sought approval from Mr Geddes or Mr Dardano. He acknowledged he had nothing, in writing, confirming that his move was approved. He could not point to anything in his statement about conversations in which approval had been given.

[15] As to the conversation with Mr Lopez on 30 March 2017, the applicant claimed he was unaware of Mr Lopez’s review of the respondent’s operations. He said he was never asked to return to Sydney; rather, Mr Lopez asked when he was coming back and he said he was not coming back. He was not told, at that time, about the Gold Coast office not proceeding. Mr Lopez did not even know about the Gold Coast office. Mr Lopez had not offered him any other options. The applicant claimed that Mr Lopez had told him that the working from home arrangement was not going to work because of the respondent’s licensing requirements. However, the applicant believed approval had already been given.

[16] It was the applicant’s evidence that during his time in Byron Bay, his manager had never contacted him or monitored him. However, all his phone records and emails went through the Company’s system and he understood his conversations with customers were all recorded and monitored. He denied that it was his job to tell customers their calls were being recorded.

[17] The applicant said he was offered the role in Sydney again on 20 April 2017 when Mr Lopez said there had been a misunderstanding. However, Mr Lopez refused to put the offer in writing. He believed Mr Lopez was just being ‘flippant’. Nevertheless, the applicant conceded that the employer has a right to determine where its employees work. He did not know what would be a reasonable time to be asked to relocate.

[18] In being recalled to give further evidence, the applicant was shown the lease application made to LJ Hooker, Byron Bay for a rental property which he had signed. In two sections there were references to him having five years employment with the respondent. The applicant conceded that this was incorrect. However, he had not filled in the application and did not know who did. He could not recall if it was his wife who filled out the application. The document also recorded that he was paid $180,000 pa by Fat Prophets which was also incorrect. When then asked if his affidavit for these proceedings was correct, he answered ‘I believe so’.

[19] The applicant also agreed the rental application was dated 5 September 2016, being before he had approval to work from home in Byron Bay. The applicant believed his wife commenced employment with Rue Stiic Pty Ltd on 26 September 2016. He could not recall when they had discussed contacting real estate agents and removalists. However, he knew his wife was organising removalists quotes around 9 August 2016. He denied the removalist job was booked on 16 August 2016 – it was on 8 September 2016. When shown email exchanges between his wife and the removalists, he said he had not seen them before.

[20] As to giving notice of vacating his Sydney rental property, the applicant’s evidence was that the lease was up on 19 September 2016, and as the rent had been increased, they were leaving the property, irrespective of the Byron Bay job offer. The applicant agreed they had been looking at properties in Byron Bay in July and August 2016, but they also had an agent looking for other alternative Sydney properties.

Ms Helen Callaghan-Parkes

[21] Ms Callaghan-Parkes said that ‘on or around July 2016’ she was offered a job as General Manager of Rue Stiic Pty Ltd, a clothing distribution and manufacturing company based in Byron Bay. While she was interested in the job, she could only accept it if her husband could work from home. On the basis that the respondent had allowed him to do so, and she understood it was an ongoing arrangement, she had accepted the job. She said that she would not have accepted the job if they thought her husband’s arrangement was temporary or his job was at risk.

[22] In cross-examination, Ms Callaghan-Parkes accepted that an email disclosed she had applied for the job in August 2016 and she accepted the job on 23 August. While Ms Callaghan-Parkes conceded that at that point her husband had not been given permission to work from home in Byron Bay, she understood that in many discussions with his Manager, Mr Williams, it was made clear he was able to move. In any event, she could have changed her mind and not accepted the job (if approval had been denied).

[23] Ms Callaghan-Parkes was shown documents which had been produced under a notice to produce, which disclose that she had made an inquiry on 26 August 2016 with Mullumbimby Transport Removals for the transport of their possessions to Byron Bay. However, she said the booking was not confirmed until 8 September 2016. She also agreed that they had given notice to their real estate agent that they were vacating their Sydney property. However, she explained they had intended to move anyway, as the rent had gone up. They had been looking at alternative properties around Darling Point, but had not made any applications, because none were suitable.

[24] Ms Callaghan-Parkes was shown the application she had made to LJ Hooker Byron Bay on 5 September 2016 for a local property. When asked why she had incorrectly written that her husband had worked for the respondent for 5 years on a salary of $180,000, she explained it was ‘probably [a] miscommunication’.

[25] Ms Callaghan-Parkes gave evidence that she resigned from Rue Stiic in April 2017 and is now working for herself. She was aware the respondent had made an offer to her husband to return to Sydney and resume his duties, but they could not move because her new business was in the local area. It involved preparing and serving platters of local produce to guest houses, hotels and apartments. They had not discussed returning to Sydney.

Mr Leo Lopez

[26] Shortly after Mr Lopez commenced employment as COO with the respondent, he was advised that the applicant was working in a remote location from home. He then made inquiries regarding relevant supervision and support for the applicant.

[27] Mr Lopez said that in the first one on one meeting (by phone) with the applicant on 22 March 2017, the applicant expressed frustration that problems with remote system phones and emails, were affecting his sales performance. Mr Lopez explained that he was reviewing the business structure. He said that he was aware of the applicant’s temporary arrangement and was concerned that there was no longer appropriate monitoring or support in place. Mr Lopez proposed a follow up meeting to discuss alternatives, which ranged from continuing the current arrangement, returning to the Sydney office or relocating to another office. The applicant indicated the difficulty of his wife working full time in Byron Bay. When he inquired about the Gold Coast office opening, Mr Lopez told him it was no longer a business option.

[28] Mr Lopez said that he discussed his operational review with Mr Dardano and Mr Ganley, and it was decided that the applicant’s current arrangement could not continue, as the Gold Coast office was not proceeding and the applicant’s sales performance had decreased since working from home. It was decided to request the applicant return to the Sydney office, within a suitable timeframe.

[29] It was Mr Lopez’s evidence that he met (by phone) with the applicant and Mr Ganley on 30 March 2017. He tabled his review and advised that the Company could no longer continue the current arrangement. The applicant was to return to the Sydney office as his role and tasks were still required. Mr Lopez claimed that the applicant was unwilling to discuss a return to Sydney. He insisted he would not be doing so. He would only agree to work from home or the Gold Coast office.

[30] Mr Lopez then explained that due to legal and operational requirements, the Company would need to end the current arrangement and end his employment. Mr Lopez further explained to the applicant that he could not continue to perform his duties and that his systems access would be suspended. Mr Lopez claimed he asked the applicant if he needed more time to speak to his wife, as this was not an outcome the Company wanted. The applicant replied that no time was needed, as he was not moving to Sydney. Mr Lopez sent the applicant’s termination letter to him the next day. Mr Lopez said he offered the applicant continuing employment at the Sydney office, or another company office, on 6 and 20 April 2017.

[31] In cross-examination, Mr Lopez confirmed that the one-on-one meeting with the applicant on 22 March 2017 was over the phone. At the time, Mr Lopez understood the applicant’s Byron Bay arrangements were temporary, although he was unaware of the proposal for a Gold Coast office. Mr Lopez said that during this first meeting he spoke of reviewing the webinars, fixing marketing and lead issues. He had then asked when the applicant would be returning to Sydney. He recalled asking him what issues he had and how he might be supported. He raised a concern over monitoring and licencing. He also asked him about his physical location in terms of any occupational, health and safety issues. Mr Lopez said his concern over monitoring related to his previous experience with a large organisation and the privacy of client information. At the time, Mr Lopez did not know these issues had been raised and advice sought, before the applicant went to Byron Bay. In regards to a time frame for relocation to Sydney, nothing specific was mentioned, but he thought four weeks was a suitable timeframe.

[32] Mr Lopez agreed the meeting he had with the applicant and Mr Ganley on 30 March 2017 was also in a phone call to the applicant. Mr Lopez believed he made a file note of the meeting, but it was not in evidence. He could not recall if he tabled his operational review at this meeting. I set out what Mr Lopez said to the applicant in the conversation on 30 March 2017:

‘I recall saying to him that I had completed my review. Part of that - and I’m explaining here what that review was, so part of that was finding out about the Gold Coast office, part of that was understanding the process of monitoring. I explained to them there’s a consequence of that, that I determined that the temporary arrangement needed to cease and that we would offer - we would honour our arrangement, that is to offer a role for him in one of the three offices of Fat Prophets, Sydney being one of those.

I explained to him that his role was open for him to come back at a suitable time. I remember Mr Parkes questioning whether I had any concerns about his ability to do his job, I said no. I said, you know, you’re a valued employee of Fat Prophets and we would happily have you back in Sydney and I remember Mr Parkes asking me whether Gold Coast wasn’t an option, and I said no, well there is no Gold Coast office.

That was never opened and that arrangement is no longer available. I also explained to him that my understanding was the monitoring of his role was done by a previous head of sales manager and that role or that title is no longer there, given they had all walked out the month before.’

[33] Mr Lopez added that the person who had been monitoring the applicant was no longer employed and this role no longer existed. He denied saying, ‘I can’t have people working all over the countryside.’ He said they were terminating the arrangement, not his employment. When he raised the question of a time frame to relocate, Mr Lopez stated that the applicant said ‘I can’t do it mate, my wife’s got a full-time job here. I can’t move.’ Mr Lopez said that he had told the applicant his systems access was removed; but only in respect to Byron Bay. This is despite his own evidence in which he had said:

‘I explained to Mr Parkes that due to the legal requirements he would not be able to continue nor required to perform normal duties.’

[34] It was Mr Lopez’s belief that the applicant had agreed to terminate the arrangement and it was to be formalised the next day. Mr Lopez said he sent an email to the applicant on 20 April 2017 indicating that he may have ‘misunderstood’ the situation, as his role was always available in Sydney. This date coincided with the respondent’s F3 response to the unfair dismissal application. Mr Lopez denied sending this email so he could later demonstrate that there had been no dismissal. He could not explain the coincidence. Mr Lopez agreed that the 31 March letter made it absolutely clear that the applicant had been terminated. There was nothing in the letter about the position being available in Sydney. However, Mr Lopez claimed it was just a standard letter which is used in the office. As to the restraint clause mentioned in the letter, it was Mr Lopez’s belief that it only related to working for a direct competitor in providing and selling stock research to clients. There are only four or five such competitors in the market.

[35] In re-examination, Mr Lopez said the respondent has presently 25 employees and it is looking for sales people right now. He said that since 30 March 2017, he had offered the applicant a job in Sydney on at least four occasions. Mr Lopez said that one of the senior sales persons, who lived on the Central Coast, had requested to work from home. His request was declined for the same reasons he had given the applicant.

[36] Mr Lopez gave evidence that a number of former employees who went to work for a competitor were not prevented from doing so, despite them having a restraint clause in their contracts. Enforcing the contract was a decision of the CEO, Mr Angus Geddes and no decision had been made in respect to the applicant.

[37] Mr Lopez explained that when he said he ‘tabled his review’ at the meeting with the management team, he did not mean he tabled a formal document; rather, he verbally discussed his review with the team. Mr Lopez said that the applicant was treated no differently to any other unsupervised employee, in respect to disconnection from the Company systems.

Mr Patrick Ganley

[38] Mr Ganley has been employed by the respondent since 2003. It was Mr Ganley’s evidence that in late August 2016, he was advised by the applicant and Mr Williams that the applicant’s wife was waiting on a job offer, which if accepted, would require her working in Byron Bay and therefore the applicant would be leaving Sydney. Mr Ganley was subsequently advised that the applicant’s wife had accepted the job and the applicant would be leaving the employ of the respondent. Mr Ganley’s evidence was that late on 6 September 2016, he and Mr Williams discussed the option of the applicant working from home, as an interim solution, until the Gold Coast office was established.

[39] That day Mr Ganley inquired of any legal or regulatory requirements which might impact on the applicant’s ability to work from home. Mr Ganley discussed the interim solution with Mr Dardano the next day. Mr Dardano was supportive and it was agreed he would discuss the matter with the Director, Mr Angus Geddes, on the basis that the solution was regulation compliant and the applicant would be required to meet sales targets, given the extra costs involved. Mr Ganley and Mr Williams informed the applicant he could work from home in Byron Bay, on an interim basis, until the Gold Coast office opened and he would then commute to that office.

[40] Mr Ganley said that between October 2016 and February 2017, the applicant’s sales performance was materially below his performance levels when he worked from the Sydney office. It was suggested that technical issues, involved in working remotely, was in part responsible for his lower commission earnings. From 10 February 2017 to 22 February 2017 several staff members resigned, including Mr Williams. This forced a reassessment of the need for the Gold Coast office. Mr Lopez commenced employment on 27 February 2017. Mr Ganley’s evidence as to Mr Lopez’s involvement with the operational review and meetings with the applicant was not materially different to Mr Lopez’s version of events; so I will not repeat it here.

[41] However, Mr Ganley added that on 30 March 2017, the applicant was offered a similar role in the London or New Zealand office. In his witness statement, Mr Ganley said that when the applicant refused any move to another office, Mr Lopez replied that ‘if he did not agree to return to [a] role in one of the company offices the company would be required to terminate his employment.’

[42] In further evidence in chief, Mr Ganley said that he was unaware Ms Callaghan-Parkes was no longer employed in the job she had originally applied for in Byron Bay. He had always understood that the applicant’s decision to request to work from Byron Bay was because of his wife’s job. Had this not been the reason, the request would have been refused, as other employees had been requesting to work from home and had been refused.

[43] Mr Ganley said that the Company employed more sales people now than when the applicant was employed and it is still seeking sales people to perform roles the applicant had performed. Mr Ganley reaffirmed his evidence that the applicant’s sales performance was less than when he worked in Sydney. Mr Ganley insisted the applicant was offered work in Sydney, New Zealand and London by Mr Lopez on 30 March 2017. My Ganley could not recall if a timeframe was discussed.

[44] In cross-examination, Mr Ganley was asked that if the Company had sought advice about the arrangement in Byron Bay, why no written proposal was documented. He said it was a verbal agreement. He was unaware of any document which recorded the agreement.

[45] Mr Ganley said that the initial conversations with Mr Williams and the applicant concerned the applicant’s resignation from the Company. Mr Ganley accepted Mr Williams had not been called to give evidence in this case. Mr Ganley acknowledged that the applicant did not use the word ‘resign’ in the meeting, but he did say that he would not return to Sydney, or any other office. Mr Lopez had told him he had a job in Sydney and he would like him to come back.

[46] Mr Ganley claimed that in February 2017, he had asked the applicant about his future with the respondent, because Mr Williams, (who the applicant was close to), had left the Company. The applicant replied that he was not leaving.

[47] As to Mr Lopez’s review of the business, Mr Ganley could not recall if he had tabled a written review. In respect to the meeting with the applicant on 30 March 2017, Mr Ganley denied Mr Lopez said ‘we are going to terminate your employment.’ He did not mention termination. In answers to questions from me concerning an email exchange between Mr Lopez and the applicant on 31 March 2017, which referred to ‘Termination was yesterday’ Mr Ganley reiterated he could not recall the word ‘termination’ being mentioned by Mr Lopez.

[48] Mr Ganley said he was not involved in preparing the letter to the applicant and had not seen it. Mr Ganley did not know why the letter made no mention of the option of returning to Sydney or to London or New Zealand. He insisted these options were offered on 30 March 2017. Mr Ganley did not draft the F3 response to the application, notwithstanding his name is set out as the respondent’s representative.

[49] In re-examination, Mr Ganley was referred to an email exchange between Mr Williams and himself on 6 September 2016, in which it was said:

‘He wants to remain with the company but obviously has to move to Byron Bay. Told him that he can work from home until the Gold Coast office is opened early next year. I can send him his numbers. He is the number one new business writer.’

Mr Ganley claimed it was Mr Williams’ idea to open a Gold Coast office. Mr Williams was a ‘big supporter of it’. A further email from Mr Williams on 6 September 2016 said:

“

‘Same day as their lease expires; they are moving to Byron on the 17th. He wants to still work for us. Can work from home until the Gold Coast office is open.’

[50] It was Mr Ganley’s evidence that the respondent does not have a Human Resources department. When Mr Lopez said he tabled a review, it was a verbal tabling of his proposal, which was then discussed by the management team.

Robert Dardano

[51] Mr Dardano has been employed by the respondent since 2015. He said that on or about 7 September 2017, he was advised by Mr Ganley and Mr Williams that the applicant had resigned and was moving to Byron Bay. They discussed the possibility of the applicant working from Byron Bay, as an interim solution, and there were discussions about setting up a sales office on the Gold Coast. This discussion was verbal and in emails.

[52] Mr Dardano believed that is was clear the arrangement would need to be compliant from an operational viewpoint. It was an interim solution only, and on the basis sales targets were met. Mr Dardano said that he was informed on 31 March 2017, that the applicant had refused to return to Sydney and accordingly, his employment would end. As Mr Dardano’s further evidence does not conflict with Mr Lopez’s or Mr Ganley’s evidence, I shall not repeat it here.

[53] In cross-examination, Mr Dardano acknowledged that he did not hear directly from the applicant that he had resigned. He agreed he was not a party to the conversation between the applicant and Mr Lopez on 30 March 2017.

[54] Mr Dardano denied that the 20 April 2017 offer for the applicant to return to Sydney was in response to the unfair dismissal application; it was after the applicant made inquiries about his pay.

SUBMISSIONS

For the applicant

[55] Mr Latham submitted that there are two factual issues which the Commission is required to determine in this case. Firstly, whether the move to Byron Bay was temporary and, secondly, whether the respondent’s direction that the applicant relocate to Sydney was reasonable and lawful; see: Phipps v Tasman AV Pty Ltd[2006] AIRC 530. Mr Lathan put that given the applicant’s circumstances, a direction to relocate, with little notice, could not be reasonable. It followed that this could not be a valid reason for dismissal. In any event, there was a gross breach of the requirements of procedural fairness and questions of harshness invariably arise in this case.

[56] In oral submissions, Mr Latham put that the evidence of both the applicant and the respondent was consistent, in that the move to Byron Bay was to take place until the Gold Coast office opened. However, this did not take place.

[57] Secondly, the Commission will need to resolve what happened in the conversations between the applicant and Mr Lopes on 30 March 2017. At least three scenarios emerge from the evidence:

1. That the applicant resigned;

2. That the applicant refused a direction to return to Sydney; or

3. That the applicant was dismissed.

[58] Mr Latham posited that in this case it is unnecessary to resolve a conflict of witness evidence, because the documentary evidence (the emails and the 31 March letter of termination) was in clear and unambiguous terms - the applicant had been dismissed the day before. There is simply no evidence that the applicant had resigned. Mr Latham submitted that even Mr Dardano’s belief that the applicant had resigned was based only on what he was told by others; not direct evidence.

[59] Mr Latham put that on either version of events, there was a termination, without notice and without any procedural fairness. This included a failure to provide reasonable notice of a relocation to Sydney. In either circumstance, the Commission would be satisfied there was no valid reason for the applicant’s dismissal; see: Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 (‘Selvachandran’). Invariably, the absence of a valid reason would render the dismissal unfair.

[60] As to remedy, Mr Latham put that according to the Sprigg formula, the applicant would have remained employed until at least the day of the hearing. A relevant consideration was any remuneration earnt by the applicant since his dismissal. However, in this case the applicant was prevented from working for any employer in competition to the respondent for an extraordinary period of two years. He has not worked since his dismissal and could not work in his field of expertise. There is also an issue of what rate of pay should apply to any compensatory order. Mr Latham proposed 26 weeks’ compensation, calculated on base pay earnings, plus commission (resulting in $41,000.00).

For the respondent

[61] Mr Dardano submitted that the valid reason for dismissal was the risk to the respondent’s licence by having the applicant work remotely, unsupervised and unmonitored. Mr Dardano said the respondent had been told the applicant was being monitored, but then found out he was not. After questioning from me, Mr Dardano acknowledged that while the respondent’s actions may have been technically incorrect, it was always open and honest - unlike the other side. In further probing from me about the two year restraint clause in the applicant’s contract of employment, Mr Dardano firstly said the Company did not intend to enforce the restraint, and then agreed he would provide written confirmation of that concession.

[62] Mr Dardano claimed that the respondent would welcome the applicant back, but only in Sydney. He was a valued employee whose performance was good when he had originally worked in Sydney. The respondent went out of its way to assist the applicant’s personal circumstances and should not be ‘punished’ for helping him.

[63] As to whether the applicant had resigned, Mr Dardano relied on what was told to him by his then Manager and an email from Mr Williams to Mr Ganley which stated:

‘His wife is starting a job on the 19th, the same day as their lease expires. They are moving to Byron Bay on the 17th of this month. He still wants to be able to work for us and he can work from home until the Gold Coast is open. He can work in that office as well. We should talk to him today.’

[64] Contrary to the applicant’s case, as at 6 September 2016, he had received no approval to relocate to work from home, yet the applicant’s wife had accepted the job in Byron Bay, they had organised moving their possessions, vacated their existing property and signed a new lease for a Byron Bay property. Notwithstanding this, the Company continued a temporary arrangement and offered to work through a ‘timetable to relocate him back to Sydney’. The applicant flatly rejected all offers to do so.

[65] Mr Dardano noted that the applicant was free to look for alternative employment. The applicant is a broker and salesman; the respondent’s business – subscription services – is a minute part of the financial sector. There are hundreds of sales jobs available and the applicant has not made any realistic attempts to look for work.

[66] In the alternative, Mr Dardano said that the Commission might find that the applicant’s termination was a forced redundancy, which under the NES scale, he would be entitled to six weeks’ pay at the base rate.

[67] Mr Dardano added that the applicant’s current sales history showed a disturbing trend. This demonstrated that working from home was no longer feasible. This was part of Mr Lopez’s overall review of the business. The Company was barely recovering its costs. Mr Dardano agreed that no action was taken in respect to the applicant’s performance. This was because it was more a ‘symptom of the situation than a symptom of the employee’, given he performed well in Sydney. It was why the Company wanted him back to work in Sydney. Mr Dardano said that in the last six months of the applicant’s employment, he earnt $31,185 inclusive of superannuation, as disclosed in his last payslip.

[68] In reply, Mr Latham said that the respondent in submissions has now raised three reasons for the applicant’s termination of employment:

(a) the applicant was not able to do his job properly; or

(b) the respondent’s licence was at risk; or

[69] Mr Latham put that the respondent could have given the applicant some warning that if he did not relocate to Sydney, in a reasonable time, he would be dismissed. What did occur was that he was told to relocate one day and terminated the next day, effective from the day before. None of these processes were dealt with properly or fairly. To make matters worse, once the applicant filed the unfair dismissal application, the respondent claimed it was all a misunderstanding and that it really wanted him to keep working for the Company. These were just retrospective arguments, inconsistent with the documentary evidence.

[70] Mr Dardano responded by noting that the termination letter was dated 31 March 2017, the applicant was notified in writing on 6 April that his role was available in Sydney. This was still within the notice period (although notice was paid out), but before the unfair dismissal application was filed.

CONSIDERATION

[71] Regrettably, there was evidence from both parties in this case, which I found particularly troubling. It did not reflect well on the witnesses concerned. There was evidence which was inconsistent, implausible or contrary to other documentary evidence, particularly as to the timing of certain relevant events, such as the applicant and his wife’s plans for the move to Byron Bay. That said, further elaboration or adverse commentary on witness evidence is unnecessary, as I agree with Mr Latham, that resolving issue of witness credit will not be determinative to the two main issues in this case; namely, whether the applicant was dismissed and whether the direction to relocate to Sydney, after six months of working from home was reasonable – but first, it is necessary to determine whether the move to Byron Bay was temporary.

[72] There is a conflict of evidence about this issue. Even though the words ‘temporary’ or ‘interim’ were not expressly said by Mr Lopez, it was well known within the Company that a proposal for a Gold Coast office was under active consideration, coincidentally with the applicant’s wife’s acceptance of the job in Byron Bay. Indeed, it would seem Mr Williams was enthusiastic about the Gold Coast office and believed the applicant would ultimately take up a position in the Gold Coast office. This meant the Company would not lose his expertise and experience. It would appear to be a win/win for both parties.

[73] I have no doubt the applicant knew and accepted that the opening of the Gold Coast office and his move to that office, would be the ultimate result of his move to Byron Bay. When viewed in this context, the move to work from home, must have been a temporary one. However, as the Gold Coast office did not ultimately proceed, the ‘win/win’ outcome I referred to above, unravelled. This raised different and more difficult employment related issues, which I will come to shortly.

[74] While I have found the move to work from home in Byron Bay was temporary, it is nevertheless extraordinary that a change of such significant import and effect, was not committed to writing, in any form at all. Given what has transpired, the absence of a document, recording the discussion at the time – let alone a written agreement or exchange of letters – is regrettable. Relying on recollection or indirect language in conversations, about such a significant matter, is to be very much discouraged as poor industrial relations practice.

Relevant statutory provisions

[75] Section 385 of the Act defines an unfair dismissal based on the four criteria there set out. Each criterion must be met, if the person seeking a remedy from unfair dismissal, is to succeed. The section reads:

‘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

(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.’

[76] Plainly, a person cannot be unfairly dismissed if the person was not dismissed. Dismissal is defined at s 386(1) as follows:

‘(1) A person has been dismissed if:

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

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

[77] In this case, the respondent claims the applicant resigned and was not dismissed. If this is so, then the applicant’s claim for an unfair dismissal remedy, fails at the first hurdle. I shall come back to this matter momentarily.

[78] In dealing with the other matters in s 385, the Small Business Fair Dismissal Code is not relevant (subsection (c)), as the respondent had 20 employees at the time of the applicant’s dismissal. The dismissal was not a case of genuine redundancy (subsection (d)) because his job was still required to be performed. Obviously, if the applicant was dismissed, the only question is whether his dismissal was ‘harsh, unjust or unreasonable’. To that matter one is directed to s 387 of the Act, which sets out all of the matters the Commission is required to take into account in determining whether the applicant’s dismissal was unfair. Section 396 of the Act sets out the further preliminary matters the Commission is required to take into account before determining the merits of an application under Part 3-2 of the Act. Section 396 is as follows:

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

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

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

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

[79] Mr Parkes’ unfair dismissal application was lodged on 11 April 2017. Assuming for present purposes, he was dismissed on 31 March 2017, his application was lodged within the 21-day statutory time period set out in s 394(2) of the Act:

(a) Mr Parkes is a person protected from unfair dismissal (again, assuming he was dismissed) in that:

i. he had completed the minimum employment period set out in ss 382 and 383 of the Act, being a period of two years and five months;

ii. his remuneration was below the high income threshold, even if commission is taken into account (s 382(b)(iii) of the Act).

Was the applicant dismissed?

[80] In my opinion, there can be no doubt, even on the respondent’s own evidence, that the applicant was dismissed on 31 March 2017, effective the day before. That is an unescapable conclusion borne out by the text exchanges between the applicant and Mr Lopez on 30 and 31 March 2017, which I reproduce again below:

Leo Lopez: ‘Hi Jeff, I’ve been in back to back meetings since 9am with limited time in between so I apologies [sic] for my late response. I’ll gave [sic] this to you by EOD. Cheers Leo’

Applicant: ‘Thanks Leo! So you’re terminating me today & not yesterday then?’

Leo Lopez: ‘Termination was yesterday Jeff with formal notification going out today’

Applicant: ‘It’s not formal until I receive it!’

Leo Lopez: ‘Jeff I have no problem making the termination date today. I’ll have the letter and copy of contract send to you shortly. Leo’

[81] On any objective analysis, the language used in this text exchange does not infer, let alone expressly state the intention of the applicant to resign his employment. To suggest otherwise defies sense and logic about what was the true effect of these text messages. Moreover, resignation is not supported by the other documentary evidence.

[82] As to Mr Dardano’s submissions that the last email from Mr Williams to Mr Ganley (para [63] above) was the applicant’s resignation, I reject this interpretation of the email. Firstly, it was not direct evidence of the applicant’s intentions, but more significantly, the plain and unambiguous language of the email states that ‘he still wants to be able to work for us’ and the Company had agreed he could do so from home. This is hardly indicative of an employee who intends to resign at that point, or he had in fact resigned. Obviously, the question of ongoing, albeit temporary work was under active and favourable consideration. It is disingenuous to suggest otherwise. The respondent’s claim that the applicant resigned is not supported by any cogent evidence, even on the respondent’s own case. Mr Dardano’s submission in this respect is misconceived and is rejected.

[83] I also reject the submission that the letter of 31 March 2017, headed ‘Letter of termination of employment’ was simply a template document that was used to confirm the applicant’s resignation. The letter begins ‘We refer to notice issued to you on the 30^th March and effective today the 31^st March for the termination of your employment with Fat Prophets Pty Ltd.’ What is abundantly clear from these words is that the respondent had ‘issued’ the applicant with notice of termination the day before. It cannot be read any other way. The notice can only have been issued by the respondent. It was not notice given by the applicant of any intention to resign. Moreover, the applicant would hardly have made further inquiries of Mr Lopez on 31 March 2017, about his termination, if it was he who had given the notice to Mr Lopez.

[84] Accordingly, I am well satisfied that the applicant was dismissed within the meaning of s 386 of the Act. Accordingly, as s 385(a) has been satisfied, the Commission’s jurisdiction to determine the merits of the applicant’s unfair dismissal claim is enlivened.

Was the applicant’s dismissal harsh, unjust or unreasonable?

[85] As mentioned earlier, s 387 of the Act sets out each of the matters the Commission is required to take into account when determining this question. The section reads as follows:

‘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.’

[86] All of the above criteria in s 387 of the Act must be taken into account when the Commission considers whether a particular dismissal is unfair. Nevertheless, it must be steadily borne in mind that no one matter is to be attributed any greater weight than another. That this is so is obvious from the Explanatory Memorandum to the Fair Work Bill 2008 at para 1541 which reads:

‘1541. FWA must consider all of the above factors in totality. It is intended that FWA will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.’

Whether there was a valid reason (s 387(a))

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

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

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

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

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

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

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

[88] It is not apparent exactly where the respondent landed as to whether there was a valid reason for the applicant’s dismissal (accepting of course its primary submission, now rejected, that he resigned). On one view, the reason for termination appears to have been focussed on his refusal to relocate to Sydney from his temporary position in Byron Bay. However, in oral submissions, Mr Dardano put that the valid reason was the risk to the respondent’s regulatory licence if the applicant was allowed to work unsupervised and unmonitored. I shall dispose with this argument in short order.

[89] The risk to the respondent’s licence, (if true), was hardly the applicant’s fault or his responsibility, particularly given the respondent had initially agreed with the temporary arrangement, after seeking advice about any compliance issues. It now claims that advice was wrong. Again, hardly the applicant’s fault. The Company allowed the ‘risk’ to continue for six months, with no one questioning it until Mr Lopez arrived. This could not be a reasonable basis for dismissal; let alone a valid one.

[90] As to the applicant’s refusal to relocate to Sydney, I am prepared to accept the proposition that given his temporary engagement in Byron Bay, the abandonment of the Gold Coast proposal and the review of the respondent’s business and operational requirements, the direction he relocate to Sydney was a lawful direction. However, for any failure of an employee to comply with an employer’s directions requires two considerations – the direction must be lawful and reasonable. This later consideration was the gravamen of Mr Latham’s submissions as to the unfairness of the applicant’s dismissal.

[91] It is well established that an employee has an obligation, implied by law, to comply with the lawful and reasonable directions of his/her employer. To the extent any authority is necessary for this proposition, I refer to the comments of Dixon J in R v Darling Island Stevedoring and Lighterage Company Limited (1938) 60 CLR 601 at 621-622:

‘If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable. In other words, the lawful commands of an employer which an employee must obey are those which fall within the scope of the contract of service and are reasonable.’

[92] Some six decades later, the Full Bench of the Australian Industrial Relations Commission (as the Commission was then styled) in Austal Ships Pty Ltd v Schreier 958/97 S Print P3975 [1997] AIRC 177 said:

‘A number of decisions of the Industrial Relations Court provide practical illustrations of what may or may not constitute a valid reason within the meaning of s.170DE(1).

For example it has been held that the failure to comply with an unreasonable direction does not provide a valid reason for the termination of a person’s employment. In Izdes v L.G. Bennett & Co Pty Ltd t/as Alba Industries [14 September 1995, unreported] Beazley J stated:

“In determining whether a refusal to carry out the lawful and reasonable directions of an employer constitutes a valid reason for termination, it is necessary to have regard to all the circumstances, including the nature and degree of the employee’s conduct.” [Cf: Tranter v Council of the Shire of Wentworth (unreported, 24 October 1995, Marshall J)]

Conversely the failure to follow a lawful instruction which was reasonable in the circumstances may provide an employer with a valid reason to terminate an employee’s employment: Cox v South Australian Meat Corporation [unreported, 13 June 1995 per von Doussa J].

…

Of particular relevance to this case is the proposition that the failure to comply with an unreasonable direction does not provide a valid reason for the termination of a person’s employment. This proposition also accords with authorities dealing with the extent of an employee’s obligation to obey lawful orders. The general consensus now is that an employee is only obliged to obey orders which are both lawful and reasonable: Australian Telecommunications Commission v Hart (1982) 43 ALR 165 at 170 per Fox J, with whom Sheppard J agreed (Northrop J not deciding); Bayley v Osborne (1984) 10 IR 5 at 8 per Davies J; Izdes v L.G. Bennett & Co. Pty Ltd t/as Alba Industries (1995) 61 IR 439 at 449 per Beazley J.’

[93] On 30 March 2017, the applicant was told that if he did not relocate to Sydney, the respondent ‘would need to end the current arrangement and end his employment.’ This was Mr Lopez’s evidence. It is trite to observe that what is ‘reasonable’ depends very much on the particular facts and circumstances of a case. While I accept Mr Lopez may have said that the applicant could have time to think about it, talk to his wife and the Company would look to a timetable for his relocation, Mr Lopez regarded the applicant’s blanket refusal to leave Byron Bay as making it unnecessary for these steps to be taken. I consider Mr Lopez’s hasty jump to a conclusion that such steps would not alter the applicant’s resolve, was unreasonable. In my view, from any objective standpoint, giving an employee little or no notice of a work relocation, some 772 kilometres away from where the employee has lived and worked for six months, is manifestly unreasonable. It was an unreasonable ultimatum. A more prudent course, would have been to inform the applicant that he had a reasonable period of time, to give an indication he was prepared to do so - say two weeks - subject to an agreed timetable and suitable relocation expenses; such as penalties for breaking his existing rental lease and removalist costs. I note Mr Lopez’s evidence that he considered six weeks as a ‘suitable timeframe’ (PN506). By effectively dismissing the applicant, without any notice or warning, must on any objective analysis, render any reason for dismissal, without foundation and invalid. I find accordingly.

[94] Sub sections (b)-(e) of s 387 are generally regarded as matters going to procedural fairness, or in other words, ‘natural justice’. I set out my findings on these subsections seriatum below.

(b) whether the applicant notified of the reason for dismissal

[95] Written notice of his dismissal was given to the applicant the next day. There is nothing in the notice which sets out the reasons for the dismissal. Nor was it clear what the reason was in the conversation with Mr Lopez the day before. This was most unsatisfactory and tells in favour of the applicant’s dismissal being found to be unfair.

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

[96] While the applicant was given an opportunity to respond to Mr Lopez’s ultimatum, it was not a reasonable opportunity in all the circumstances. This also tells in favour of the applicant’s dismissal being found to be unfair.

(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

[97] Mr Lopez did not offer the applicant a support person and the applicant did not request one; understandably, given the discussion with Mr Lopez was by phone and the phone call came ‘out of the blue’. Nevertheless, this is a neutral factor.

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

[98] There was some belated submission by Mr Dardano that the applicant’s performance had slipped considerably since working from home and this was one of the reasons the respondent needed to review its operations and relocate the applicant to Sydney (where he had previously performed well in his role). Mr Dardano candidly acknowledged that, at no time, had the applicant’s performance been raised with him, let alone that it might constitute a basis for ending his employment or his relocation to Sydney. I am prepared to treat this factor as having minimal impact in this case, as Mr Dardano also acknowledged that his failing performance was more ‘a symptom of the situation, rather than a symptom of the employee’ – a wise observation I might say.

(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.

[99] Mr Dardano pleaded for understanding that as a relatively small employer with limited human resource or industrial relations expertise or experience, the Company accepted it may have made mistakes in the procedure. However, it had always acted honestly and openly with the applicant. While this reasoning might sound like a plea for sympathy and an expression of contrition, the rather crude and unprofessional way the respondent handled both the applicant’s move to Byron Bay and its conduct in peremptorily terminating that arrangement, should have been apparent to any employer with just a modicum of understanding of good employment practices. This experience should serve as a salutary lesson for the future.

[100] I note of course, that the applicant was originally represented by a legal firm. It beggars belief that this firm would not have advised the respondent of the perils of defending this unfair dismissal application, which at the very least, had poor prospects of success. I hasten to add that I make no criticism of the law firm concerned and accept its advice may not have been sought, as it ceased to act before the directions to file the evidence were complied with. I also accept unreservedly, that any party can seek to run its own case to the best of their ability. At the risk of paraphrasing the words of Abraham Lincoln: ‘he who represents himself, has an unwise person as a client’, may have some resonance in this case.

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

[101] In respect to other matters I have taken into account, I make the following findings:

(a) the applicant’s position in Byron Bay was temporary;

(b) it would appear the original reason to move to Byron Bay (his wife’s job), no longer existed in April, when she resigned from Rue Stiic. This was shortly after the applicant’s dismissal and concurrent with the respondent’s later communications with the applicant that he could still have a job in Sydney.

(c) a two year restraint clause in his contract required him not to undertake any work for competitors of the Company during this period. While I accept the respondent gave an assurance in the proceedings that it would not seek to enforce the restraint clause, this was not known at the time of the applicant’s dismissal (and not until the proceedings) and was expressly referred to in the applicant’s termination of employment letter. This restraint severely limited his alternative employment options in his field of experience.

(d) the applicant received two weeks pay in lieu of notice.

[102] For all the above reasons, I am satisfied that the applicant’s dismissal on 30 March 2017 was ‘harsh, unjust and unreasonable’, within the meaning of s 387 of the Act. His dismissal was substantively and procedurally unfair.

Appropriate remedy

[103] Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation. The section reads:

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.

Note: Division 5 deals with procedural matters such as applications for remedies.

[104] The applicant does not seek reinstatement and presumably, given his wife’s business in Byron Bay, he intends to remain located there. As there is no Company position available anywhere near this location, reinstatement would not be a practical or realistic option (s 392(3)(a)). I find accordingly.

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

(a) whether compensation should be ordered;

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

(d) the upper limit of compensation; and

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

[106] Section 392 reads as follows:

392 Remedy—compensation

Compensation

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

Criteria for deciding amounts

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

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

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

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

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

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

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

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

Misconduct reduces amount

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

Shock, distress etc. disregarded

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

Compensation cap

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

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

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

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

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

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

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

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

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

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

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

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

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...’

[17] The identification of this starting point amount “necessarily involves assessments as to future events that will often be problematic” . Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.”

[43] We would add to this that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. That is to say, the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.’ (footnotes omitted) `

[108] In adopting the above methodology, I make specific findings as follows:

(a) As the respondent put no evidence as to the effect any order of compensation would have on the viability of its enterprise, I do not consider that the order I intend to make would have any deleterious effect on the respondent’s viability or profitability.

(b) The applicant had two and a half years service with the respondent – a reasonable period of employment.

(c) It is notoriously difficult to speculate, with any certainty, how long a period the applicant would have continued in employment, but for his dismissal. In McCulloch v Calvary [2015] FWCFB 873, the Full Bench of the Commission put it this way and said at para [27]:

‘[27] We would also observe that, in our view, the evidence upon which the Commissioner relied was insufficient to sustain the inference that, but for the dismissal, the appellant would only have remained in employment for a further 8 weeks, at which time he would be summarily terminated. Implicit in the Commissioner’s finding is that the conduct which led to his dismissal (and which the Commissioner found did not constitute a valid reason for termination) would not only be repeated within a relatively short period of time but would in fact be repeated in a more serious form such as to constitute serious misconduct. While the task of determining an anticipated period of employment can be difficult, it must be done. In the context of this case it seems to us that the Commission would require cogent evidence to conclude that a person such as the appellant, who was dismissed without a valid reason, would only have worked another 8 weeks at which time he would have been summarily dismissed. The Commissioner’s s.392(2)(c) finding constitutes a significant error of fact, within the meaning of s400(2) of the Act.’

(d) In light of my earlier findings as to the lack of notice given to the applicant to relocate to Sydney, and the alternative approaches I suggested at para [93] above, I do not consider the applicant’s employment would have lasted beyond a period of six weeks from a lawful direction for him to relocate to Sydney and his refusal to do so. As this is obviously below the compensation cap, this is the order I intend to make.

(e) There was some debate as to whether any compensation ordered by the Commission should include commissions. The parties agreed that the remuneration the applicant received in the previous six months, including commission, was $36,185. As the compensation cap, outlined in s 392(c) of the Act, is based on actual remuneration earned by the applicant in the 26 weeks immediately before the dismissal, I intend to adopt that rationale for determining the six weeks payment. I note also that had the applicant remained in employment in Byron Bay for that period he would have been unlikely to have earnt commissions of the magnitude he had been achieving in Sydney.

(f) There was no evidence of any remuneration the applicant has earned since his dismissal.

[109] Given that there was no misconduct of the applicant, no deduction in compensation is made on that score (s 392(3)). The order I intend to make contains no component by way of compensation for shock, distress, humiliation or other analogous hurt (s 392(4)).

[110] Accordingly, the amount of compensation to be ordered in favour of the applicant is $36,185 divided by 26 weeks multiplied by six weeks. This equals $8,350.38.

CONCLUSION

[111] Finally, s 381(2) of the Act is a significant and overarching object of Part 3-2. It is expressed in these terms:

381 Object of this Part

(1) The object of this Part is:

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

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

(ii) the needs of employees; and

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

(i) are quick, flexible and informal; and

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

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

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

[112] For the aforementioned reasons, I am satisfied that the dismissal of the applicant on 30 March 2017 was ‘harsh, unjust and unreasonable,’ within the meaning of s 387 of the Act. I am satisfied reinstatement is inappropriate and compensation in an amount of $8,350.38, is appropriate have regarding to all the circumstances of this case; see: Bowden v Ottrey Homes at para [17]. The amount so ordered will be less any deductions of taxation according to law. The remedy I have determined will ensure a ‘fair go all round’ is accorded to both the applicant and the respondent. The amount of compensation is to be paid to the applicant within 21 days of today. Orders giving effect to these conclusions will be published contemporaneously with this decision. The proceedings are concluded.

DEPUTY PRESIDENT

Appearances:

Mr I Latham of Counsel, for the applicant.

Mr R Dardano for the respondent.

Hearing details:

2017.

Sydney.

August.

14 and 17.

Printed by authority of the Commonwealth Government Printer

Jeff Parkes v Fat Prophets Pty Ltd

[2017] FWC 6121

5 DECEMBER 2017

DECISION