[2016] FWC 2228

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Jenna Basse
v
Prestige Paving Pty Ltd
(U2015/12621)

COMMISSIONER WILSON

MELBOURNE, 28 APRIL 2016

Application for relief from unfair dismissal.

[1] This matter concerns an unfair dismissal application made by Jenna Basse against her former employer, Prestige Paving Pty Ltd (Prestige Paving), arising from a dismissal that I find took place on 20 October 2015. Ms Basse made her unfair dismissal application to the Fair Work Commission on 5 November 2015.

[2] Section 396 of the Fair Work Act 2009 (the Act) requires the determination by the Commission of four initial matters before considering the merits of an unfair dismissal application. For the purposes of that section, and it being consistent with the evidence, I find that Ms Basse’s application was made within the period required in subsection s.394(2); that she was a person protected from unfair dismissal; and that her dismissal was not a case of genuine redundancy.

[3] However in respect of s.396(c), which requires consideration of whether the dismissal was consistent with the Small Business Fair Dismissal Code (the Code), the circumstances of the matter require a more detailed analysis of whether there was such consistency. This arises for the reason that the Respondent submits, and I am prepared to find, that Prestige Paving is a small business within the meaning of s.23(1) of the Act. While the evidence on the subject was perhaps not as precise as would be desirable, it nonetheless allows a finding that, at the time of Ms Basse’s dismissal on 20 October 2015, Prestige Paving Pty Ltd employed 13 people; 11 of those, including Ms Basse, were employed on a full-time basis, and there were 2 casual employees engaged on a regular and systematic basis. 1

[4] As a result, it is necessary to determine whether Ms Basse’s dismissal was consistent with the Code.

[5] For the reasons set out below, I find that Ms Basse’s dismissal was not consistent with the Code; that she was dismissed unfairly; that reinstatement is not appropriate and that compensation is an appropriate remedy.

LEGISLATION

[6] The legislative provisions which are relevant to this matter are set out in the Act, at s.388 (The Small Business Fair Dismissal Code) and s.387 (Criteria for considering harshness, etc). The first consideration in this matter is whether Ms Basse’s dismissal was consistent with the Code. If it was, then her application fails; if it was not, consideration must then be given by the Commission to the provisions of s.387. 2

[7] Section 388 is in the following terms;

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.

[8] Prestige Paving argue that its dismissal of Ms Basse was consistent with both parts of the Code, which is in the following terms;

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.

[9] Section 387, dealing with the considerations to which the Commission must have regard in determining whether a dismissal is unfair, provides the following;

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.

CONSIDERATION

[10] Ms Basse’s application for unfair dismissal remedy asserts that she was employed by Prestige Paving Pty Ltd on 1 July 2011 and remained employed until the date of her dismissal which she says was 19 October 2015. She was employed to undertake clerical duties, principally invoicing and bookkeeping and reception-like duties, such as answering the telephone. Over her four years of employment the mix of her duties shifted. By the time of her dismissal those duties appear to have been predominantly, but not solely, associated with bookkeeping and other like activities.

[11] When she was told she would be dismissed on 19 October 2015, she was told by her employer, Patrick O’Sullivan, that the business did not have enough work for two people performing the duties she was and that the more recently employed person had more experience; and that Ms Basse had made too many mistakes and that she was the one to be let go. Ms Basse was not provided with a letter of termination.

[12] Before a decision that she would leave on four weeks’ payment in lieu of notice, there was an exchange, at Mr O’Sullivan’s initiation, about her working until Christmas, or the end of the year. Ms Basse went home and thought better of the situation. When she did not attend for work the next day, 20 October 2016, Mr O’Sullivan queried the situation, and there was then a mutual separation of employment.

[13] In proper context, despite agreeing to end the relationship there, the evidence compels a finding, which I make, that such was a dismissal at the initiative of the employer. The termination arose out of the conversation on the previous day. Contractually, that was a termination of the contract of employment by Prestige Paving, albeit on its invitation that the date of effect of termination be Christmas or the end of the year. When that was not agreed, on 20 October 2015, the conduct of the parties allows a finding that they then agreed the date of effect of the termination be immediate, that is 20 October 2015.

[14] Upon termination Ms Basse was promised four weeks’ pay in lieu of notice. It took some time for the payment to be made, and when it was, a deduction had been made unilaterally by the Respondent to repay an overpayment it claims was made to Ms Basse.

[15] The evidence received by the Commission in this matter includes that of the Applicant, Ms Basse, and, on behalf of Prestige Paving, Patrick O’Sullivan, the owner of the business, and Ms Janet Tabart, the company’s new bookkeeper.

Consistency with the Code

[16] Having found that Prestige Paving was, at the time of Ms Basse’s dismissal, a small business, consideration must be given to whether her dismissal was consistent with the Small Business Fair Dismissal Code.

[17] Prestige Paving endeavour to rely on consistency of Ms Basse’s dismissal with both parts of the Code – consistency with the “summary dismissal” section of the Code 3 and consistency with the “other dismissal” part of the Code.4 As a result, in this case, Ms Basse’s dismissal could feasibly be consistent with the Code in either of two circumstances;

1. If Prestige Paving believed on reasonable grounds that Ms Basse’s conduct is sufficiently serious to justify immediate dismissal; or

2. If Prestige Paving gave Ms Basse a reason why she was at risk of being dismissed with that reason being a valid reason.

[18] At the hearing, the Respondent put forward that Ms Basse’s dismissal was consistent with the Code and that she was dismissed without notice or warning due to the employer’s belief on reasonable grounds that her conduct was sufficiently serious to justify immediate dismissal. 5 In its written submissions filed before the arbitration hearing Prestige Paving set out an aggregation of three reasons which caused that belief; that immediately before termination Ms Basse had taken 5 weeks leave instead of 4, without informing the employer of her intention to extend her leave; that she used her work computer for inappropriate personal reasons, said to amount to an occupational health and safety risk.6

[19] In the course of the hearing, Prestige Paving’s case developed beyond these three matters, with it being further argued there had been further misconduct by Ms Basse, justifying summary dismissal in two other respects, namely;

“(c) The Applicant made disparaging comments about Mr O’Sullivan to Ms Tabart on 2 September 2015. This conduct posed a serious and imminent risk to the reputation of the employer’s business as confirmed in McKenna v Home Theatre Group Pty Ltd.

(d) The Applicant overpaid herself approximately $2,000 in January 2015 per the evidence of Ms Tabart. At its highest, this would constitute theft and at its lowest is evidence of recklessness and incompetence.” 7

[20] Findings in relation to the “summary dismissal” part of the Code are invited by the Respondent from the allegations that Ms Basse took unauthorised annual leave; that she made inappropriate use of her work computer; that she disparaged Mr O’Sullivan to Ms Tabart in a conversation on 2 September 2015; and that she overpaid herself $2,000 in January 2015. 8

[21] A finding in relation to the “other dismissal” part of the Code is invited from complaints about Ms Basse’s work performance and a warning said to have been given to her by Mr O’Sullivan on 26 August 2015. 9

[22] The evidence on these matters consists of the witness evidence of Ms Basse, Mr O’Sullivan and Ms Tabart, referred to above. I accept Ms Tabart as a witness of truth who had no particular position to advocate. In contrast, the evidence of both Mr O’Sullivan and Ms Basse suffers from problems of credibility at varying stages of their evidence. This arises largely due to the informality of the workplace and their working relationship, their prolonged acquaintance and familial connections.

[23] The evidence allows the following findings in connection with the question of Ms Basse’s dismissal being consistent with the Code for each the reasons relied upon by the Respondent;

Summary Dismissal – Unauthorised annual leave

[24] Ms Basse was absent between 15 September 2015 and 19 October 2015. Her evidence is that she came to be on leave after discussing it with Mr O’Sullivan at some earlier time and says she had approval for the leave. Mr O’Sullivan agrees he had approved her leave, however he had the view that it was only for four weeks, whereas the period of 15 September to 19 October 2015 is a period of greater than five weeks.

[25] Ms Tabart, who started as a bookkeeper at the beginning of September 2015, recalls a conversation with Ms Basse during which Ms Basse said she would be away for longer than four weeks;

“Okay. Did you discuss her leave?---Yes. Well, she was only going to come and work for a couple of days, but then I asked her if she would come and continue up until the Friday the 11th, because that would assist me going through all the books and whatever, and she agreed to do that. And she said how she was going on leave for four weeks, but she would take five weeks. And I said to her, "Have you mentioned that to Pat?" And she said, "No. It doesn't really matter because you're here anyways, so it doesn't really matter." So then we just went on doing our work, and on her last day I bought her flowers because she was such a great help to me, so yes” 10

[26] Mr O’Sullivan’s evidence about how much leave was approved and the exact dates was imprecise, perhaps as a result of the Applicant’s request for leave being imprecise. However, in finality, he is clear;

“So you're quite certain that it's four weeks. And I'm interested to know how you are certain that it was four weeks?---Because I wouldn't have approved it for five weeks. It was too long out of the office.” 11

[27] The requirement within the Code is that the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.

[28] The overall context of the evidence is that it is unlikely Mr O’Sullivan believed the issue with Ms Basse’s leave was the reason for her to be dismissed; rather it is more likely that he believed she had out-lived her usefulness and that she was making too many errors, with those circumstances being demonstrated by the greater capability of Ms Tabart, which had come to his attention during Ms Basse’s absence.

[29] In any event the evidence of both Mr O’Sullivan and Ms Basse about the timing and length of the leave is extremely imprecise. Whereas I accept that the conversation reported by Ms Tabart above took place, I consider that the wider context of the situation is that the period and dates of leave had simply not been determined between Ms Basse and Mr O’Sullivan. It appears from all the evidence that the context of the situation is that both had spoken in generalities about the length of leave, without being specific. Ms Basse said she had approved leave from 15 September to 17 October 2015 12; Mr O’Sullivan says he approved four weeks and not five because five weeks would be too long out of the office and he would not have approved it.13 A text message appended to his witness statement responds to a lengthy message from Ms Basse on 20 October in which she concludes by saying “[a]nyway Pat no hard feelings”, with with Mr O’Sullivan texting;

“No hard feeling here also, just a phone call to say your (sic) not coming in was all was asking for . That’s it , was also going to be hard leaving when you did after the way things where (sic) and going for 5 weeks.” 14

[30] I accept that such text message allows a finding that Mr O’Sullivan was, at the time, aggrieved that Ms Basse had spent more time away on leave than he had expected.

[31] Even so, neither parties’ evidence on the subject is compelling or is clear or to be preferred. Such situation does not allow a finding that, objectively, Mr O’Sullivan could believe that Ms Basse had contravened a prior authorisation for a specific period of leave and that such contravention was sufficiently serious to justify immediate dismissal. Even making allowances for what might be expected to occur within small businesses without formal procedures on the subject, the evidence proffered by the Respondent on this subject does not rise to the level of there being firm dates agreed or stipulated and of there being a unilateral refusal to work to dates of annual leave that had been approved.

[32] The matter of her taking a longer period of leave than what was approved appears not to have even been put to Ms Basse as a criticism or allegation when she returned.

[33] Because of this I do not find that Prestige Paving’s complaint about Ms Basse’s extended period of leave enabled Mr O’Sullivan to believe on reasonable grounds that Ms Basse’s conduct in this regard was sufficiently serious to justify immediate dismissal in a manner consistent with the Code.

Summary Dismissal – Inappropriate use of a computer

[34] Prestige Paving put forward that Ms Basse used her work computer to store numerous inappropriate photographs and one video. These photographs were said to be in the thousands and are said to include numerous of Ms Basse either nude or semi-nude. Some of those were introduced to the evidence in this matter through a supplementary witness statement from Mr O’Sullivan. The video was not introduced into evidence, and its contents have not been viewed by the Commission or otherwise taken into account. However Ms Basse agreed in oral evidence the video was of her, 15 despite an initial unsworn statement that no such video existed.16

[35] Despite Ms Basse conceding that the files in question were on her work computer, and that they likely came to be there because her personal phone synced without her knowledge, 17 there is insufficient reliable evidence before me to allow a finding that they were found prior to Ms Basse’s dismissal. While the images may have been found before she was dismissed, it is more likely that they were found by Mr O’Sullivan after her dismissal.

[36] Ms Basse’s explanation for how the photographs came to be on her work computer is that she used her personal phone for work purposes. In this regard, she put forward the explanation that the files were automatically uploaded to her work computer when she connected her phone, which she was required to use for work purposes. In effect, the presence of the files on the work computer was inadvertent. 18

[37] Mr O’Sullivan’s evidence on the subject contradicted the defence of inadvertence saying that during employment Ms Basse would send explicit photographs to some of his employees. He discovered the files when she was on holidays in October 2015; that he was shocked by the material he saw; and that it was apparent from what he saw that Ms Basse was using the computer to download inappropriate material and to spend a substantial part of her time while at work downloading and sending photographs of matters wholly unconnected to work. 19

[38] When he dismissed Ms Basse, Mr O’Sullivan made no mention of having found such photographs or a video, or that such was a reason for her dismissal. This, he says, was because he was too embarrassed to do so;

“I did not mention anything about the material I had found on her computer because I was simply too embarrassed to raise it with her or to mention it in the office whilst Jan was present so it didn’t come up even though I thought it was a pretty serious matter.” 20

[39] Despite such evidence having been given by Mr O’Sullivan, I am not able to accept it as accurate. In this regard, I take into account the following matters;

[40] The Employer Response Form, Form F3, submitted over Mr O’Sullivan’s name, makes no mention of inappropriate photographs or video having been a reason for dismissal. The employer’s response, at item 2.2 is in relatively comprehensive terms. In that response, Mr O’Sullivan raises the following as reasons for Ms Basse’s dismissal;

Ms Basse’s extended holiday;

Bookkeeping errors she had made;

Inappropriate use of the computer, but in different terms, and in an altogether different context to an allegation of pornographic or semi-pornographic material being kept on the computer;

“I really think Jenna was planning on leaving as she new she was about to be caught out on all the things she had not been doing, her computer was full of emails from shopping companies because she used to shop online at work all day, because the delivery truck used to come at least once day to drop packages off for her, I had mention this to her before, but as normal anytime you challenge Jenna on anything thing, she would get defensive about and it would tune into an argument which would just get you know where, Her computer also had a lot of photos of her self on there where she would taker photos of herself and send them to guys etc which we also had to delete along with the emails to friends and rude photos , she would just waste so much time in the office with phone calls to friends, facebook, shopping online, taking selfies of herself, she also started to bring her dog to work which I didn’t agree with and didn’t want there, she would spend so much time chasing it around and cleaning up after it etc”; 21

Complaints about her and her competence; and

Warnings he had given her; her carelessness and her attitude.

[41] Other than the mention of “rude photos” and “selfies of herself” in the passage above, the first time Mr O’Sullivan makes comment in material before the Commission about having found inappropriate computer use that would warrant dismissal of Ms Basse is in the submissions filed on the Respondent’s behalf on 27 January 2016 and in his amended witness statement filed on 16 February 2016.

[42] By that time, Ms Basse had accused Mr O’Sullivan, through her submissions and witness statement, of sexual harassment. 22

[43] I also take into account in my findings on this matter that, at least on 19 October 2015, there was mutually some uncertainty that Ms Basse would finish up on or around that date or later, perhaps even as late as Christmas or the end of the year. Perhaps he desired not to ruin what remained of their working relationship by bringing up the matter of what he had found on her computer. However that, in itself, is implausible; an employer holding the belief on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal would hardly say to the employee that they could work another couple of months, but they still needed to go because of their reprehensible conduct.

[44] As a result of the preceding analysis, I consider it more likely than not that the files found by Mr O’Sullivan were found after Ms Basse had been dismissed. The evidence does not allow a finding that the files were found prior to dismissal with Mr O’Sullivan being “simply too embarrassed” to discuss the fact with Ms Basse. When giving evidence he did not strike me as someone who would be embarrassed about a matter such as this. Theirs was a relationship based upon robust, even heated, exchanges. Whereas it was undoubtedly a deteriorating relationship by October 2015, the evidence leads to the view that there would be little doubt that if Mr O’Sullivan reasonably believed that something he had found on Ms Basse’s computer was a reason for her immediate dismissal, he would have discussed that with her and have her leave the premises immediately.

[45] Instead, it was put to her that with her having been away, he had found that Ms Tabart was a better employee; that he could not afford two employees in the same position; that it would be better for Ms Basse to go and that he would be willing to keep her on until the end of the year with Ms Tabart perhaps teaching her and improving her skills. Such scenario simply does not match with the one now being put forward of a small business employer being horrified about the content of images found on the employee’s computer and reasonably forming the view that the employee’s dismissal was justified immediately.

[46] In any event Ms Basse’s dismissal was not effected immediately.

[47] Instead, on Mr O’Sullivan’s own evidence, he said to her when she was dismissed that she could continue until the end of the year 23, despite her conduct being so egregious that her dismissal was justified immediately.

[48] There was no evidence submitted by the Respondent that would support the contention advanced in its Outline of Submissions that Ms Basse’s inappropriate use of her work “amounts to a serious breach of occupational health and safety procedures”. 24 That argument has not been made out.

[49] Because of these reasons I do not find that Prestige Paving’s complaint about Ms Basse’s use of her work computer enabled Mr O’Sullivan to believe on reasonable grounds that Ms Basse’s conduct in this regard was sufficiently serious to justify immediate dismissal in a manner consistent with the Code..

Summary Dismissal – Disparagement

[50] The allegations of disparagement are dealt with in Prestige Paving’s written outline of submissions where it is argued that the things said by Ms Basse to Ms Tabart about Mr O’Sullivan posed a serious and imminent risk to the reputation of the employer’s business. Ms Tabart’s oral evidence about what happened after she came to work on 2 September 2015 and met Ms Basse includes the following;

“Okay?---And from then Jenna and I sat down and she went through bits and pieces of the company and what they did and what she did, and that day and the next day we went through bits and pieces. And then she started telling me about what a bad person Pat was, how aggressive he was, how abusive he is, personal issues between his partner and himself, and how badly he talks to people. I just said to her, "Well, he won't speak like that to me because after all, I'm old enough to be his mum, probably older than his mum." And she said, "Well, you haven't heard the way he speaks to his mum." I said, "Okay, fine." So we went on from there. That just happened on and off through a couple of days. And so then we just started looking at the books. And there was paperwork filed in manila folders which were under the desk and on the desk. There was really no filing system as such. And, yes, that was okay, so we just went on. And then the accountant sent us their journals for the end of - do you want me to keep going?” 25

[51] Mr O’Sullivan’s witness statements do not deal with this matter, and neither does his oral evidence. Ms Basse was not even cross-examined on the subject.

[52] There is no evidence before me that Mr O’Sullivan believed on reasonable grounds that Ms Basse’s conduct in this regard is sufficiently serious to justify immediate dismissal, which is the test within the “summary dismissal” part of the Code. There is no evidence that he knew about the disparagement proximate to the date it occurred.

[53] The Respondent’s endeavour to connect this allegation with the principle enunciated in McKenna v Home Theatre Group Pty Ltd 26, to the effect that Ms Basse’s conduct in this regard “posed a serious and imminent risk to the reputation of the employer’s business”27 is simply not made out. McKenna involved a matter in which an employee had sent emails to a customer that his employer found to be offensive and inappropriate and had further made disparaging references about his employers to his co-workers.28 The matters are not synonymous and are entirely distinguishable.

[54] Because of this I do not find that Prestige Paving’s complaint about Ms Basse’s disparagement of Mr O’Sullivan to Ms Tabart enabled Mr O’Sullivan to believe on reasonable grounds that Ms Basse’s conduct in this regard was sufficiently serious to justify immediate dismissal in a manner consistent with the Code.

Summary Dismissal – Overpayment

[55] The claim is made by Prestige Paving that Ms Basse overpaid herself approximately $2,000 in January 2015. That matter stems from the witness statement of Ms Tabart, which records the following in relation to problems she found with the company’s accounts;

“January 2015 all employees except Mark Bowden had 2 pays recorded every week for the 4 weeks, all employees were overpaid. Week ending the 8th January 2015 Jenna received 3 pays. Jenna was overpaid $2, 138.67.” 29

[56] Ms Basse denied in cross-examination that she had overpaid herself $2000, 30 but was not asked further questions about the payments that were made. In her submissions on the subject, she put the following on the subject;

“MS BASSE: Yes. There were a few things in Jan's questioning about the overpaying in January, but Jan wasn't there when I came off my holiday leave a week earlier as asked by Patrick, so that's what the weeks were, that's why there was an extra week on top of the guys there, because I actually came back a week earlier than the other employees, which Pat will be able to confirm, because he asked me to.” 31

[57] In context, there is insufficient evidence on this matter for me to find that any such payment that did occur was a deliberate act on Ms Basse’s part, or that it brought her a benefit over and above that which she was entitled to.

[58] There is no evidence before me that Mr O’Sullivan believed on reasonable grounds that Ms Basse’s conduct in this regard is sufficiently serious to justify immediate dismissal, which is the test within the “summary dismissal” part of the Code. While his witness statement refers to saying to Ms Basse when her employment was terminated that he “would pay her the four weeks’ notice period less the $2,500.00 that she overpaid herself”, 32 this matter is not referred to in Ms Basse’s evidence. Further, his statement refers to corroborating text messages, which do not make a reference to the deduction referred to above. Other than the statement in his witness statement, there is no evidence that he knew about the allegation of an over-payment before Ms Basse was dismissed. I do not accept that he did know.

[59] Because of this I do not find that Prestige Paving’s complaint that Ms Basse had overpaid herself occurred, or that whatever did occur enabled Mr O’Sullivan to believe on reasonable grounds that Ms Basse’s conduct in this regard was sufficiently serious to justify immediate dismissal in a manner consistent with the Code.

Other Dismissal – Errors and questions of competence

[60] Mr O’Sullivan asserts that Ms Basse was making serious errors that could no longer be sustained. He changed his external accountant during 2015, or perhaps earlier, and their advice, after working directly with Ms Basse, had been that he should dismiss her.

[61] Mr O’Sullivan was advised by the new accounting firm, Sayers Partners, that he needed to dismiss Ms Basse. On 8 July 2015, Mr Balfour, of the firm, mentioned to him by email that he had heard Ms Basse was thinking of resigning. 33 Mr O’Sullivan’s evidence is that he had not been aware of the possibility prior to that time, however he gave oral evidence that the conversation connected with an earlier discussion with Mr Balfour in which he had advocated for Ms Basse’s departure from the business. He responded to the email saying he had not known of the possibility and rounded out the email conversation with the following response, also on 8 July 2015;

“I just asked her about it

And it was the day i came back here and gave a her a girl over things, said i would re trail it for a month and go from there.

she seems to of pulled her finger out a fair bit more” 34

[62] About seven weeks later, the subject of Ms Basse’s departure came up again between Mr O’Sullivan and his contact at Sayers Partners. Correspondence on 27 August has Mr Balfour in the firm advising on the best way to recruit a new bookkeeper. In that correspondence Mr Balfour asked the following;

“How did you go yesterday?

Did you give Jenna notice?” 35

[63] To which Mr O’Sullivan responded;

“No we talked it out once again,

Still going to put the add in a get someone in to help and look over things to see how its going .
She does have a lot on her plate at he moment , but still no excuses to let accounts get away from her” 36

[64] Mr O’Sullivan’s oral evidence is that on the previous day, 26 August 2015, he had returned from a meeting with Sayers Partners and gave a warning to Ms Basse about her performance, using words to the effect of;

“"If you don't" - you know - "lift your game within a month and things don't turn around, then I think we're going to have to look for a new bookkeeper"”. 37

[65] For her part, Ms Basse does not remember it that way or that a warning was given to her. 38 Even though Ms Basse disputes a warning having been given on that occasion, her witness statement records an altercation between her and Mr O’Sullivan on that day about her work, in which she says he was visibly angry and screaming;

“I was in the office, Pat sped into the yard and got out of his car and slammed the door, stormed inside, he was visibly angry. He began screaming at me, saying that he had just had a meeting with the accountants and that our new Xero system was all wrong and that they have no idea what I am even doing. He was aggressive, threatening and swearing” 39

[66] Ms Tabart was the person who was employed following the advertising alluded to in the above passages. Ms Tabart is an experienced bookkeeper and started with Prestige Paving on or around 1 September 2015. Her evidence was clear, cogent and capable of acceptance, which I do. Her witness statement includes the following in relation to the bookkeeping problems she saw; 40

There were problems reconciling journal entries with those held by Sayers Partners “due to Jenna altering figures in Xero after they were released to Sayers Partners”;

An adequate filing system was not maintained for invoices and payments;

Accounts receivables were unduly in arrears, and she noticed “many errors” in the accounts;

After mid-September and “Over the next 5 -6 weeks I kept finding errors which had to be rectified in 2014/2015 and July, August 2015 figures. Sayers Partners have to re-do 2014/2015 returns as the errors were so great”;

There were errors with payments to the company’s superannuation and portable long service leave providers, and there were errors in payments made for the purchase of fuel.

[67] For this complaint of Prestige Paving to be consistent with the Code, it is necessary for a finding firstly that Prestige Paving gave Ms Basse a reason why she was at risk of being dismissed and secondly that it was a valid reason based on her conduct or capacity to do her job. While the evidence leads to a view that Prestige Paving held a valid reason based on Ms Basse’s conduct or capacity for her to do the job for which she was employed, I am not able to find that it gave her a reason as to why she was a risk of being dismissed.

[68] The evidence in relation to the errors being made by Ms Basse leads to the conclusion that they were significant and that it was reasonable for Sayers Partners to draw the nature and extent of the problems to Mr O’Sullivan’s attention. The evidence also allows a finding that Mr O’Sullivan was under some pressure from Sayers Partners to dismiss Ms Basse, or to at least discuss the problems with her, but that he did not do so, or at least did not do so cogently and in a way which would allow a finding that Ms Basse had been told that she was a risk of being dismissed.

[69] While it is the case that when Mr O’Sullivan returned from a meeting with Mr Balfour at Sayers Partners on 26 August 2015 he was plainly frustrated and proceeded to have an argument with Ms Basse about her work, the evidence does not allow a finding that this amounted to Ms Basse being given “a reason why he or she is at risk of being dismissed” or that she was “warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement”, as stipulated in the Code. The high point of the evidence is that there was an argument.

[70] Further, the evidence allows a finding that by the time Ms Tabart was employed, the problems were found to be systemic and to some extent relatively easily capable of being corrected by a competent person.

[71] For reason of all of the evidence on these matters I do not find that Prestige Paving’s complaint about Ms Basse’s making of errors and questions of her competence was sufficient to be a reason for dismissal in a manner consistent with the “other dismissal” part of the Code.

[72] As a result, I do not find Ms Basse’s dismissal consistent with the Code.

The criteria in s.387

[73] Because of this finding, it becomes necessary to consider whether Ms Basse’s dismissal was otherwise harsh, unjust or unreasonable in accordance with the criteria set out within s.387 of the Act. In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable under that section, the FWC must take into account each of the legislated criteria.

(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)

[74] As referred to earlier, in consideration of whether Ms Basse’s dismissal was consistent with the “other dismissal” part of the Code, I have found that there was a valid reason based on her conduct or capacity to do the job, with that reason being her capability to perform the duties required of her position.

[75] As set out above, one of the allegations made against Ms Basse is that she took annual leave that was not approved when she was away for five weeks instead of what Mr O’Sullivan expected of four weeks. In overall context, the evidence allows that Ms Basse knew that she was expected to be away for only four weeks and that being away for five was not approved by Mr O’Sullivan. Her conversation with Ms Tabart on the subject before she went on leave corroborates that finding, as does Mr O’Sullivan’s reference to the subject in a text message to Ms Basse on 20 October 2015.

[76] That conduct on the part of Ms Basse was misconduct, but objectively weighed it was not serious misconduct. Ms Basse likely exploited imprecision about the period of approved leave as well as her patterns of working and making decisions without discussion with Mr O’Sullivan to persuade herself that she could get away with it. There is no evidence before me that she did not have the accrued leave to be away for that time. Further, despite Mr O’Sullivan’s knowledge of the situation, he did not say to Ms Basse that it was one of the reasons, or the reason that he was dismissing her.

[77] Objectively weighed, in the context of the overall employment relationship, this conduct on the part of Ms Basse may have warranted a first and final warning of dismissal in the event of a repetition of the behaviour or a similar failure to seek approval for leave or other decisions properly to be made by an employer, however it does rise to being a valid reason for dismissal.

[78] The additional annual leave is therefore misconduct, but not serious misconduct, and is not a valid reason for dismissal.

(b) whether the person was notified of that reason

[79] The evidence allows a finding that Ms Basse was notified of the reason for her dismissal, with the reason being given to her in the conversation between her and Mr O’Sullivan on the day of her return to work on 19 October 2015. Despite the difficulties and disputes now existing between the two, the evidence on this subject at least has similarities, which are referred to in detail above. Ms Basse records the conversation in this way;

“He explained that there wasn’t enough work for both Jan and I, I was visibly upset as I had worked for him for over 4 years, I said I was really disappointed as over that time I had never received a warning or official warning about anything, I said that I had learnt all the work along the way that I was just originally hired as a receptionist to deal with phone calls and mail, I never had any training just had to learn things along the way by asking questions and my role grew into bookkeeping something which I had absolutely no knowledge in prior to starting, I grew with the roll for over 4 years, so he offered me to take the 4 weeks and go out and start applying for jobs or to stay for at least 4 weeks which was what he said he needed to give me, then later in the conversation he said to work till Christmas so I can finish off the year.” 41

[80] Mr O’Sullivan’s recollection of the conversation in his witness statement includes the following;

“We sat down together and I said “No good news here” since you’ve been away we’ve found so many mistakes with the bookkeeping records. I only have the choice to keep one bookkeeper and it has to be Jan. So when I told Jenna, she became upset and then I became upset because she was still somebody that I have sympathy for. We sat in the office for a while and then I said to her she can continue until the end of the year, she would become entitled to an extra few days of leave, and she could organise new employment for the beginning of the New Year and receive another month’s pay.” 42

[81] Each agree that Mr O’Sullivan said to Ms Basse that she could continue in employment for some time. Ms Basse says that Mr O’Sullivan said she could work until Christmas so she could finish off the year; Mr O’Sullivan’s evidence is that he said to her she could continue until the end of the year.

[82] Importantly, nowhere in either parties’ witness statement is there a reference to the dismissal being for any reason other than mistakes with the bookkeeping records. The same perspective about the reasons for the dismissal of Ms Basse for reason of the mistakes that she was making also comes through the oral evidence of the two.

[83] I am satisfied that Ms Basse was notified of the reason for her dismissal with that reason being her work performance and in particular the errors she was making as a bookkeeper.

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

[84] The Commission’s consideration of whether an employee has been given an opportunity to respond to an employer’s reason for dismissal is consequential to a finding there is a valid reason for dismissal. 43 In Wadey v YMCA Canberra44 Moore J stated the following principle about the right of an employee to appropriately defend allegations made by the employer:

“[T]he opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.” 45

[85] The evidence does not lead me to being satisfied that Ms Basse was given an opportunity to respond to Prestige Paving’s reason for dismissal. The evidence instead leads to a finding that Ms Basse was simply informed that her job was no longer available to her because of the errors she was making.

(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

[86] There is no evidence Ms Basse sought to have a support person in attendance at the meeting on 19 October 2015, since she was not aware of what the discussion would be about.

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

[87] For the reasons set out above, I find that Ms Basse was not warned about her unsatisfactory performance prior to her dismissal.

(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

[88] As set out above, Prestige Paving is a small business. To a certain extent at least, its size impacted upon the procedures it followed in as much as a clear and unambiguous warning of potential dismissal was never given to Ms Basse. While there is not clear evidence before me that Mr O’Sullivan was in some way unsure about the need to give a warning to her or was unable to do so, he appears to have relied upon the advice of Sayers Partners that Ms Basse needed to go because of her skill level and the errors that she was making. I take into account that while he had advice from an external accounting firm on the subject, there is no evidence that the advice from the firm considered the process that should be employed by him in effecting the dismissal.

[89] Overall it is likely that the size of Prestige Paving may well have impacted upon the procedures followed by it in effecting Ms Basse’s dismissal

(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;

[90] Again I find that Prestige Paving is a small business without dedicated human resource management specialists or expertise. The absence of such expertise may well have impacted upon the processes employed by Prestige Paving to dismiss Ms Basse.

(h) any other matters that the FWC considers relevant

[91] It is relevant to note that while the relationship between Ms Basse and Mr O’Sullivan after her dismissal has undoubtedly been irrevocably destroyed, likely because of the conduct of each towards the other, that relationship, even at the time of Ms Basse proceeding on leave in September 2015, was labouring under some difficulty. Arguments between the two appear nothing less than vitriolic. The trust that would ordinarily be expected between an employee and employer appears to have been in the process of mutually evaporating.

REMEDY

[92] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are 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.

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

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

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.

[93] Pursuant to subsection 390(3), an order for the payment of compensation to a person must not be made unless the Fair Work Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”

[94] Neither party seeks reinstatement in the event of a finding of unfair dismissal, and I am satisfied that it is not appropriate for such an order to be made, including for the reason that the relationship between Ms Basse and Mr O’Sullivan is acrimonious and likely to be past a point at which the relationship into the future could be retrieved or otherwise made workable or productive. In forming my views about the inappropriateness of reinstatement I have had regard to the criteria specified by the Full Bench in Nguyen and Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter. 46 I find, on the basis of the evidence before me about their mutual relationship, that the requisite trust and confidence in order for reinstatement to be viable would not be present.

[95] The Act provides that compensation may be considered by the Commission only where reinstatement is found to be inappropriate, however it does not provide that compensation must be ordered when the Commission finds reinstatement is not appropriate. In Ms Basse’s case, while it is likely that her employment future was tenuous at best when she left on holidays, she still had some expectation of ongoing employment.

[96] I am satisfied in all the circumstances that it would be inappropriate to reinstate Ms Basse and that instead I should give consideration to an order for the payment of compensation.

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

[97] Prestige Paving’s submissions on the subject of compensation include that “it runs a modest enterprise and given the mistakes that were made by the Applicant that are needing to be slowly rectified by the new bookkeeper that any substantial order for compensation may affect the viability of the Respondent’s enterprise”. 47 Despite this submission, and the somewhat indirect evidence of Mr O’Sullivan in the hearing about the company’s trading position, I have no direct and reliable evidence before me on the effect an order for compensation, even at the maximum available amount, would have on the viability of the employer’s enterprise.

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

[98] Ms Basse’s employment with Prestige Paving was approximately 4 years. While this is a significant period, I find her length of service with the company does not require an adjustment to be made to the order I propose.

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

[99] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”. The Full Bench of the Australian Industrial Relations Commission has observed the following in relation to these matters;

“[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". This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the "anticipated period of employment" are deducted. An example may assist to illustrate the approach to be taken.” 48 (endnotes omitted)

[100] The evidence I have before me indicates Ms Basse’s expectation of continuing employment with Prestige Paving when she was dismissed should reasonably be viewed as low. There had been arguments between her and Mr O’Sullivan, which she characterised as abusive and bullying and which he characterised as warnings or performance related discussions. Mr O’Sullivan’s accountants had recommended he dispense with Ms Basse’s services because, in their view, she was not up to the job. Their communications on the subject indicate what may well have been frustration when he backed away from the task. When Ms Tabart learned that Ms Basse might be going to take longer leave than Mr O’Sullivan might have expected and cautioned against it, Ms Basse was dismissive.

[101] Had Ms Basse not been dismissed, I consider that, at 19 October 2015, when she was told her services were no longer required, and the day before her dismissal occurred, Ms Basse’s anticipated period of employment ranged over a relatively short period, and probably no longer than the period Mr O’Sullivan mentioned to her on 19 October – that is until Christmas, or the end of the year, being a period of up to 9 weeks at most.

[102] The evidence which points to a shorter anticipated period of employment is that the relationship between Ms Basse and Mr O’Sullivan when she proceeded on leave in September 2015 was, at best, argumentative and counter-productive. Both relate significant and acrimonious conversations with each other.

[103] In such a situation, even if Mr O’Sullivan had available to him proper advice about how to warn Ms Basse about the consequences of continuation of what Prestige Paving considered was her poor performance, it is likely, if not inevitable, that the giving of the warning would have caused their already fraught working relationship to further deteriorate to a point where Ms Basse either left the premises and not returned, or decided that it was time to move on within a few weeks’ time. Alternatively, if that did not occur, it was open for Ms Basse to be dismissed within a short time, either after not heeding any warning given by Mr O’Sullivan for past conduct, or for reason of misconduct after an argument about a warning for poor performance. The state of the relationship between the two leaves it highly improbable that warnings or counselling could have been given calmly and then acted upon.

[104] The fact that Ms Basse refused an offer of work until Christmas or the end of the year is significant and reinforces the possibility of a shorter, rather than longer, anticipated period of employment. It appears she made the decision not to work until the end of the year more on emotion than logic, and without regard to her need to mitigate what would be a forthcoming loss. Even had she continued to work after having been given notice of termination, or had she been given a warning instead of being dismissed, I cannot see that the relationship would have continued until the end of the year; instead it is more likely than not that employment would have ended well before that time.

[105] Against the proposition that continuing employment may have been shorter rather than longer, the evidence pointing to there being a longer anticipated period of employment is that Sayers Partners had been working directly with Ms Basse about problems in the bookkeeping. Objectively though, while some progress had been made, such was plainly not sufficient or occurring quickly enough. It is likely that Ms Basse either did not receive the Sayers Partners feedback particularly well, or sufficiently well to wish to act upon it, or simply did not have the skill base to understand what they were putting to her. In such a situation, a “longer anticipated period of employment” is still not to be regarded as very long.

[106] The wider context of this is that it is apparent from the evidence that the role undertaken by Ms Basse had changed over the period of her employment to one where bookkeeping and the attention to financial detail that such task brings was dominant, and would continue to dominate into the future. The business had plainly grown and the job changed as a result and it was likely that the skill needs for the job performed by Ms Basse had also changed to a point where the job had outgrown her capacities. In such context, it appears more than likely that even if a warning was able to be given to Ms Basse in a clear and calm manner, that she would not have been able to have remedied the problems put to her.

[107] Based upon the evidence before me, and in particular the obviously heated and unproductive relationship evident between Ms Basse and Mr O’Sullivan in September 2015, I consider that Ms Basse’s anticipated period of employment was six weeks from 20 October 2015, being the date that her employment ended.

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

[108] Since dismissal, Ms Basse has relocated herself from Melbourne to Perth at the end of December 2015. The evidence includes that such relocation may have been contemplated by her in September 2015, albeit from Easter 2016 instead of December 2015. However Ms Basse’s closing submissions contradict what Ms Tabart had to say on the subject, with her saying that she “never had plans to move to Perth”. 49 Ms Basse’s efforts to seek alternative employment have been focused upon employment in Western Australia after her move there, and overall appear somewhat muted. There is not, as would normally be expected, a detailed record of job search activity available to the Commission.

(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

[109] The evidence also includes that Ms Basse has undertaken some work after being dismissed by Prestige Paving, however it is unclear as to whether she earned income for that work. The Respondent puts forward the following in its closing submissions;

“The Applicant claims to not have earned any money since her employment. When asked if she had received any paid employment since her dismissal by Commissioner Wilson, she said that she had not and that the only work she had done was at her mother’s company and that this was unpaid. It was then revealed in cross-examination that the Applicant also worked as an event manager at Ikatcher Events for the month of December, evidenced by her Linkedin profile. The Applicant denied having received any pay for this job and claimed that it was done on a voluntary basis. The Respondent submits that the Applicant’s credit is called into question on this point given she did not mention it as part of the work that she had done since dismissal in response to Commissioner Wilson’s question. The Respondent invites the Applicant to produce evidence that this was a voluntary position in her response to these submissions. Evidence of what, if any, amounts were paid to the Applicant in this position is necessary for the Commission to properly apply the criteria set out in section 392(2).” 50

[110] It is unclear from the evidence that is before me whether Ms Basse earned any money after leaving Prestige Paving’s employment. I agree with the Respondent that Ms Basse’s responses on these matters go to her credit as a witness. It is unlikely that she has been entirely candid with the Commission on these matters.

(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

[111] Ms Basse’s closing submissions refer to the potential of employment after 29 March 2016, 51 however there is not detailed information before me about this possibility or any income which might be derived from it.

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

[112] In relation to the similar criterion within s.387(h), I noted the state of the relationship between Ms Basse and Mr O’Sullivan as being a relevant factor. I note that matter here as well. In addition, I note that Ms Basse has, it is submitted, made claims of sexual harassment against Mr O’Sullivan. I consider each to be a neutral factor in the assessment of compensation for unfair dismissal. The state of the relationship between the two neither increases nor decreases what would be ordered for the payment of compensation. The claims of sexual harassment have neither been properly articulated or tested before me. In any event, even if those matters were established to an acceptable level, the Commission is expressly prevented from including in any order for compensation 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. 52

[113] Section 392(3) requires that if the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the FWC must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.

[114] Although Prestige Paving characterises Ms Basse’s behaviour as serious misconduct, I was not satisfied in all the circumstances that it was, or that it either rose to the level of allowing a finding that her dismissal was consistent with the “summary dismissal” part of the Code, or that it was a valid reason for dismissal for the purposes of the criterion in s.387(a). Despite those findings, her decision – unilateral it seems – to not return from leave without discussion with Mr O’Sullivan was misconduct and accordingly I am required to reduce the amount of compensation ordered for that factor.

[115] In Read v Gordon Square Child Care Centre Inc. 53 the Full Bench made the following findings about the operation of the provision requiring deduction for misconduct;

“Section 392(3) of the FW Act requires the FWC to reduce the amount of compensation it would otherwise order by an appropriate amount on account of a person’s misconduct if satisfied the misconduct of the person contributed to the employer’s decision to dismiss the person. The section requires the FWC to consider, amongst other things, if the relevant person engaged in misconduct and, if so, if that misconduct contributed to the employer’s decision to dismiss the person. The section seems to require such consideration even if the FWC has found there was no valid reason for the person’s dismissal. Although, if there was no valid reason for the dismissal we think that may be relevant to the FWC’s decision as to the “appropriate” amount by which to reduce the amount of compensation the FWC would otherwise order.” 54

[116] That matter took into account an act of misconduct that had occurred prior to the event for which the applicant was dismissed, but which had been taken into account by the employer in its dismissal, which reduced the compensation otherwise payable by $1,000. 55 In another matter, Bowden v Ottrey Homes Cobram and District Retirement Villages Inc.,56 the Full Bench was satisfied that the applicant’s misconduct had contributed to her dismissal and the compensation that otherwise would have been awarded was reduced by about 20%.57

[117] In this matter I am satisfied that Ms Basse’s misconduct was a factor taken into account by Mr O’Sullivan when he dismissed her, although he did not tell her that. Because he did not tell her, I cannot find it was a significant or dominant reason for her dismissal. For these reasons, I will reduce the amount of compensation by 10%.

CONCLUSION AND ORDERS

[118] After consideration of the foregoing issues, I find that Ms Basse was dismissed and that it was unfair within the meaning of the Act.

[119] I find that reinstatement is not an appropriate remedy in this case.

[120] I find that compensation is appropriate.

[121] The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5). 58

[122] The reasoning associated with an adjustment for contingencies was referred to in the matter of Slifka v J W Sanders Pty Ltd. 59 With reference to consideration of the calculation of compensation for the loss of wages and bonus and the loss of long service leave (paragraphs (d), (e) and (g) in the passage below), North J found;

“In relation to the items referred to in pars (d), (e) and (g), some allowance should be made for the contingency that the applicant may not have served the whole of the remaining 2½ years as an employee of the respondent, for reasons such as ill health, lawful termination by the respondent, voluntary resignation, or closure of the respondent’s business. None of these contingencies should attract a high allowance.

Finally, some allowance should be made for the fact that some part of the compensation will be received up to 2½ years earlier than if the applicant had completed his employment with the respondent.

In all the circumstances, it appears to me that an appropriate reduction for contingencies relating to the future is 25 per cent. As the total of the items referred to in pars (d), (e) and (g) is $30,000, a reduction of 25 per cent brings these items to a total of $22,500.” 60

[123] In Ellawala v Australia Post Corporation 61, the Full Bench considered the application of a factor for “contingencies”, and in particular the above passage from Slifka;

“[41] It is apparent from the above extract that his Honour was not seeking to lay down a discount for contingencies which would be generally appropriate. Rather he adopted a 25 per cent discount factor on the basis of the circumstances of the particular case before him.

[42] It would be open to the Commission to proceed on the basis that a certain percentage discount for contingencies was generally appropriate, subject to adjustment up or down to take account of an applicant's particular circumstances. But we are not necessarily convinced that a 25 per cent discount would be generally appropriate. We note that in Wynn v NSW Insurance Ministerial Council the High Court observed that the practice in New South Wales was to generally adopt a 15 per cent discount for contingencies.

[43] We note that in Slifka North J only applied the deduction for contingencies to prospective loss, that is loss occasioned after the date of the hearing. This approach has also been adopted in a number of first instance arbitrations by members of the Commission. As a matter of logic this approach has some appeal. A discount for contingencies is a means of taking account of the various probabilities that might otherwise affect earning capacity. At the time of hearing any such impact on an applicant's earning capacity between the date of termination and the hearing will be known. It will not be a matter of assessing prospective probabilities but of making a finding on the basis of whether the applicant's earning capacity has in fact been affected during the relevant period. But this matter was not raised before us and we were not directed to any evidence upon which we could make a finding as to whether Ms Ellawala's earning capacity was adversely effected by some event which took place in the period between her termination and the hearing of the matter at first instance.” 62 (original emphasis)

[124] After this analysis the Full Bench in Ellawala reduced its assessment of remuneration lost of 6 months by the amount of 15%, noting that the uncertainty surrounding ongoing employment as a result of past performance had already been taken account of in its assessment of lost remuneration. 63

[125] The Full Bench in Bowden v Ottrey Homes 64 assessed remuneration lost of “at least six months” and, in relation to contingencies and taxation of the compensation it ordered stated;

“We accept that “any discount for contingencies depends upon the circumstances of each particular case”. No sound basis for making a deduction for contingencies has been made to us in this case.

In her first decision, the Commissioner said that in the final calculation of compensation she proposed to make “a small adjustment of 10%” for contingencies “on the basis that a substantial portion of the projected period of continued employment has passed”. In fact, all of the projected period of continued employment has passed.

We have considered the impact of taxation but we elect to settle a gross amount and leave taxation for determination. ...” 65 (reference omitted)

[126] The Full Bench in Bowden v Ottrey Homes did not make a deduction for contingencies, noting that in the case it was dealing with, “all of the projected period of continued employment has passed”. 66

[127] In relation to the matter of contingencies, I consider that the circumstances of this matter, which include unclear evidence of the Applicant about her post-termination endeavours to obtain employment lead to a contingencies reduction at the higher end of what might normally be considered. I will therefore make a contingencies reduction of 10%.

[128] Having regard to the considerations established by s.392 of the Act and the criteria established by the FWC, I find that compensation should comprise a payment by the Respondent to the Applicant calculated as follows:

[129] In August 2015, Ms Basse’s weekly ordinary time wages were $1,121 67, and her superannuation contribution was at the statutory rate of 9.5%.

[130] My order for compensation will be for a payment of 6 weeks at the rate of $1,121, with a further amount of 9.5% for the purposes of superannuation, which is a total of $7,365. There will be a 10% deduction for misconduct and a further reduction for contingencies of 10%, which reduces the total amount to be ordered to $5,892. I will take account of the impact of taxation by requiring that the amount to be paid to Ms Basse will be taxed according to law.

[131] The above amount does not exceed the compensation cap applying at the time of dismissal.

[132] An order requiring Prestige Paving to pay to Ms Basse the total amount of $5,892, taxed according to law, is issued in conjunction with this decision. The total will be ordered to be split between a payment directly to her, and a payment to her superannuation account, on her behalf.

[133] In accordance with this decision, $5,381, less taxation, is to be paid directly to Ms Basse, and $511 is to be paid to her superannuation account. The order will require the payments to be made within 14 days of the date of this decision.

COMMISSIONER

Appearances:

Ms J Basse on her own behalf

Mr H Mazloum, of Counsel, (instructed by O’Sullivan and Ruffili lawyers) for Prestige Paving

Hearing details:

2016.

Melbourne:

29 February.

Final written submissions:

Applicant: 15 March 2016.

Respondent: 8 March 2016.

1 Respondent’s Closing Submissions, 8 March 2016, [3].

2 Ryman v Thrash Pty Ltd[2015] FWCFB 5264 [48].

3 Respondent’s Outline of Submissions, 27 January 2016, [13].

4 Transcript PN 1036-1044.

5 Ibid PN 1036-1039.

6 Respondent’s Outline of Submissions [9]-[11].

7 Respondent’s Closing Submissions [11], with reference to McKenna v Home Theatre Group Pty Ltd[2012] FWA 9309.

8 Ibid.

9 Ibid [14].

10 Transcript PN 870.

11 Transcript PN 789.

12 Transcript PN 91.

13 Transcript PN 789.

14 Exhibit R2, Witness Statement of Patrick O’Sullivan (as amended), Attachment A.

15 Transcript PN 316.

16 Exhibit A2, Email from Applicant dated 17/2/2016 in response to Mr O’Sullivan’s Witness Statement.

17 Transcript PN 298, 307, 313.

18 Exhibit A2.

19 Exhibit R2 [6].

20 Ibid [13].

21 Employer Response Form, item 2.2, 4-5.

22 Exhibit A1, Email from Applicant to FWC dated 3/1/2016.

23 Exhibit R2 [13].

24 Respondent’s Outline of Submissions [9]-[11].

25 Transcript PN 867.

26 [2012] FWA 9309.

27 Respondent’s Closing Submissions [11].

28 [2012] FWA 9309 [18]–[19].

29 Witness Statement of Jan Tabart, 3.

30 Transcript PN 222.

31 Transcript PN 1015.

32 Exhibit R2 [14].

33 Exhibit R7, Bundle of emails relating to 8/7/2015.

34 Ibid.

35 Exhibit R4, Bundle of emails starting date 27/8/2015.

36 Ibid.

37 Transcript PN 725.

38 Transcript PN 219–220.

39 Exhibit A1.

40 Witness Statement of Jan Tabart.

41 Exhibit A1.

42 Exhibit R2 [13].

43 Chubb Security Australia Pty Ltd v Thomas (2000), Print S2679, at [41].

44 [1996] IRCA 568; cited in Dover-Ray v Real Insurance Pty (2010) 204 IR 399.

45 Ibid [85].

46 [2014] FWCFB 7198 [23]-[24].

47 Respondent’s Closing Submissions [25].

48 Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109, at [33] and [34].

49 Applicant's Closing Submissions, [5].

50 Respondent’s Closing Submissions [30].

51 Applicant's Closing Submissions.

52 See Fair Work Act 2009 (Cth) s.392(4).

53 [2013] FWCFB 762.

54 Ibid [83].

55 Ibid [88].

56 [2013] FWCFB 43.

57 Ibid [49].

58 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 32; Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [33]; Haigh v Bradken Resources Pty Ltd[2014] FWCFB 236 [10].

59 (1995) 67 IR 316.

60 Ibid, 328.

61 [2000] AIRC 1151, Print S5109.

62 Ibid [41]-[43].

63 Ibid [71]-[74].

64 (2013) 229 IR 6, [2013] FWCFB 431.

65 Ibid [45], [53]-[55].

66 Ibid [54].

67 Transcript PN 909.

Printed by authority of the Commonwealth Government Printer

Jenna Basse v Prestige Paving Pty Ltd