Jianxin Jiang v Red Chilli Sichuan Restaurant (Canberra) Pty Ltd

[2020] FWC 4686

[2020] FWC 4686

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jianxin Jiang
v
Red Chilli Sichuan Restaurant (Canberra) Pty Ltd
(U2020/2006)

Huiqing Jiang
v
Red Chilli Sichuan Restaurant (Canberra) Pty Ltd
(U2020/2526)

COMMISSIONER MCKENNA SYDNEY, 8 OCTOBER 2020

Applications for an unfair dismissal remedy.

[1] Mr Jianxin Jiang (“the first applicant”) and Mrs Huiqing Jiang (“the second applicant”) are a married couple. Each has lodged an application, made pursuant to s.394 of the Fair Work Act 2009 (“the Act”), seeking an unfair dismissal remedy concerning their respective terminations of employment by Red Chilli Sichuan Restaurant (Canberra) Pty Ltd (“the respondent” or “the restaurant”). The applications were each the subject of hearings before Kovacic DP on 17 and 18 June 2020, and decisions were reserved. The applications have been reallocated to me for determination following the untimely death of my colleague. While the applications did not travel in tandem, there is enough overlap in the procedural history, and in the evidence and submissions, to make it appropriate to deal with the two applications in the one decision.

Background

[2] It is relevant to outline some of the procedural history to the applications. The first applicant lodged his application on 23 February 2020. The second applicant lodged her application on 4 March 2020. The circumstances of the applications thereafter had some broadly common procedural history. Relevantly, although the respondent filed and served in respect of each matter a solicitor-prepared Form F3 - Employer response to unfair dismissal application, that solicitor subsequently ceased to act for the respondent. There was participation in a conciliation conducted by a Commission conciliator concerning the first applicant, but the respondent declined to participate in a conciliation concerning the second applicant. The respondent (through its owners and/or operators) decided not to file and serve any materials pursuant to the directions that had been issued by the Deputy President, being “double directions” concerning jurisdiction and merits. The file records contain various communications from the Commission to the respondent concerning compliance with the directions and attendance at the hearings. To contextualise matters, on 29 May 2020, correspondence was sent by the respondent to the chambers of the Deputy President (from a generic email address and without anything akin to a signature block) which read (as written):

“Dear Chambers

Due to the financial hardship, our company no longer hire [name] as our lawyer. And because of that, our company will not provide materials or attend the hearing, and let the commission to make the decision.

Sorry for the inconvenience it caused.

Kind regards”.

[3] On 3 June 2020, the Associate to the Deputy President sent correspondence to the respondent which relevantly read:

“Thank for [sic] your correspondence. The Deputy President notes that if you do not provide submissions you may wish to be present for the hearing and make oral submissions during the hearing noting a Mandarin interpreter will be available for your use. If you do not make submissions or attend the hearing the matter will be determined on the basis of the material before the Commission.

Could you please advise whether you will attend the hearing by COB Friday, 5 June 2020.” (Bold in original).

[4] On 5 June 2020, the respondent sent reply correspondence confirming there would be no attendance.

[5] What is known of the respondent’s position in relation to the applications is drawn, therefore, only from the employer’s Form F3 responses – and those forms, while required by the Fair Work Commission Rules 2013, are not in themselves and without more evidence in the proceedings.

[6] The hearings of the two applications proceeded on sequential days, in the absence of any appearance for the respondent. The first applicant was represented in the hearing on 18 June 2020 by a lawyer from Legal Aid (ACT); in the hearing on the prior day, 17 June 2020, the second applicant was represented by her English-speaking daughter. In the case of each applicant, a Legal Aid solicitor had some involvement in the verification of translated witness statements of each applicant and the outlines of submissions in each matter were also filed by Legal Aid in relevantly quite similar terms. The proceedings on each of the two hearing days were conducted with the assistance of a Mandarin-speaking interpreter.

[7] Following the hearings concerning the two matters, the Associate to the Deputy President sent the transcripts of the proceedings to the respondent (being a course the Deputy President had foreshadowed in the hearings) under cover of emailed correspondence dated 15 July 2020 with respect to each matter which relevantly read:

“The abovementioned matter was heard on [relevant date].

The transcript of the hearing is attached and the Deputy President now provides you with a further opportunity to provide submissions and evidentiary material in regards to the Applicant’s application. Please provide these by close of business Wednesday, 22 July 2020.

If you do not provide any submissions and/ or evidentiary material the Deputy President will decide the application on the basis of the material before him.”

[8] No submissions and/or evidentiary materials were provided by the respondent following the provision of those transcripts.

[9] Moreover, the file records indicate that when the matters were listed before Catanzariti VP to advise the parties of the reallocation of the files for determination, the respondent again communicated it would not be participating.

Background

[10] The first applicant was formerly employed by the respondent as a kitchen hand. The Form F2 - Unfair dismissal application identified only rudimentary information. The first applicant thought he may have commenced employment with the respondent around August 2016, but was not sure. The termination of employment was notified to the applicant and effected on 14 February 2020 in circumstances where, the F2 identified, no reasons at all were provided. The first applicant identified in the Form F2 that he was seeking compensation as a remedy, as well as compensation for mental distress.

[11] The second applicant was also formerly employed by the respondent as a kitchen hand. The second applicant’s Form F2 also identified only rudimentary information. The second applicant thought she may have commenced employment with the respondent around January 2016, but also was not sure. In response to the question in the Form F2 about the date of the notification of the dismissal, the Form F2 indicated that the second applicant was unsure as to that date as no formal notification had been given to her. Rather, the respondent had advised the second applicant that there would be a shut-down in the period 11 February to 23 February 2020; she was told that notification about a back-to-work date would be given after that - but no further advice was received by the second applicant in such respects and no reasons had been given for the dismissal. The second applicant’s (amended) Form F2 indicated a date of dismissal as 24 February 2020 (relevantly, it appears, being the first date following the anticipated period of the temporary shut-down). The second applicant identified that she was seeking compensation as a remedy.

[12] Across the respondent’s two Forms F3 concerning the first and second applicants, the respondent provided information including the following:

•  the first applicant commenced employment with the respondent around July 2016 as a kitchen hand and the second applicant commenced around January 2016 to wash dishes;

•  each applicant’s employment was covered by the Restaurant Industry Award and each was paid $40,000pa;

•  the respondent notified each applicant of the dismissals on 12 February 2020;

•  at the time of the dismissals, the respondent had 18 employees;

•  the respondent objected to each application on the basis that the respective dismissals involved cases of no dismissal and genuine redundancy;

•  the respondent objected to the second applicant’s application on the further basis it was out-of-time (but, as the respondent did not file and serve anything else, there was no elaboration before the Commission concerning the objection in the Form F3 that the second application was out-of-time).

[13] As to the genuine redundancy objection, matters were elaborated in identical terms in each of the Forms F3 concerning the first and the second applicants as follows:

“1. The Respondent has been making losses continuously and continues to make losses.

2. The trading conditions have been difficult and continue to be difficult.

3. The Respondent has made various changes to deal with the difficult trading conditions.

4. The business was restructured to conserve operational costs and trade on more efficient basis through difficult trading conditions.

5. The role of the Applicant is no longer required or serving or achieving the purpose of the business.

6. The business does not require the work done by the Applicant be done by anyone.

7. There is no other job that the business could give to the Applicant in the business.”

[14] Additional information was provided in the Form F3 related to the reasons for the dismissal of the first applicant. The Form F3 recounted several conduct-related allegations and the first applicant was also said to have received numerous warnings. No performance-related allegation were raised in the Form F3 concerning the second applicant (apart from a suggestion in answer to question 3.1 - as part of the response in paragraph 11 - which may be a cut-and-paste error in the Form F3 concerning the second applicant).

[15] As to redundancy-related matters, the Forms F3 outlined matters including the following:

•  the restaurant had recently been making losses and this had been continuous since 2019, including on the date of ending the employment of the applicants;

•  the trading conditions had been difficult and continue to be difficult, with the situation getting very precarious following the onset of the coronavirus in early-2020 when many customers had stayed away from the restaurant;

•  the restaurant had suffered steep losses of income and this had magnified the daily losses of the restaurant as income was insufficient to meet expenses, including labour costs;

•  the restaurant’s business was so bad that it was closed-down for two weeks from 11 February to 23 February 2020;

•  each applicant was aware of the financial difficulty of the respondent;

•  despite the (alleged) conduct of the first applicant and the second applicant, the respondent had tried to retain the employment of each applicant for as long as possible in the hope that the restaurant’s business would recover, but the financial situation of the respondent was such that it was impossible to retain the applicants;

•  in view of financial losses, the board of directors/shareholders decided to take decisive steps to restructure, cut costs and make other changes for the restaurant to survive and continue to trade;

•  as part of the business rationalisation of the respondent, the positions of the applicants were made redundant;

•  the roles of the applicants were no longer required, or serving or achieving the purpose of the business of the restaurant;

•  the respondent did not require the work done by the applicants be done by anyone and was using another remaining kitchen hand currently employed by the respondent, and the applicants’ positions have not been filled;

•  there was no discrimination involved in the redundancies of the applicants and other redundancies;

•  prior to the ending of employment (with “his” used in both applications – again seemingly a cut-and paste error), the applicants were aware, and made aware, through various communications that their positions and other positions may be made redundant if trading conditions did not improve, and it was impossible to retain them while the restaurant was running at a loss with no immediate turnaround in sight;

•  the respondent reviewed its workforce and there simply were no other positions that the respondent could offer the applicants in the business;

•  the applicants were advised, and were well-aware, before the ending of their employment that they would need to look for alternative employment.

[16] In response to the applicants’ contentions in each Form F2, the Forms F3 set out identical information which read:

“(a) There was no unfair dismissal and the dismissal was not unfair for reasons as set out in the statement [within the Forms F3];

(b) There was valid reason for the dismissal on the ground of redundancy;

(c) The redundancy is genuine;

(d) The business has suffered losses and continues to suffer losses;

(e) The business has slowed down and continues to slow down;

(f) The business does not require the work done by the Applicant be done by anyone;

(g) There is no other job that the business could give to the Applicant in the business;

(h) The Applicant was notified of the reason verbally before ending of his [sic - “his” in the case of the second applicant] employment;

(i) The Applicant was aware of the business condition and difficult condition of the business;”.

[17] Nothing was advanced in the Form F3 in elaboration of the respondent’s objection to the second applicant’s application concerning the (purportedly) late application.

The evidence

[18] While I have provided an overview of what was addressed in the Forms F3 concerning the respondent’s response, there was no evidence before the Commission in support of the matters described because the respondent did not file any evidence and did not participate in the hearings before the Deputy President.

[19] As the respondent did not file any evidence, and there was no participation by the respondent in the hearings, I turn to the uncontested evidence. In the applicants’ cases, evidence was adduced in the form of witness statements by each of them. Those witness statements were in essentially relevantly parallel terms in relation to various matters.

•  Under the heading “Continuity of employment”, the first applicant’s evidence was that he initially was employed by the respondent in July 2016. The second applicant’s evidence was that she commenced in June 2015, based on payslip and PAYG payment summary records. Each applicant described their respective usual working hours, days typically worked in a week, and wages. Each of the applicants’ payments by the respondent were the subject of a current investigation by the Fair Work Ombudsman around the time of the hearings.

•  Under the heading “Alleged misconduct – clause 3.1 of the Employer Response to Unfair Dismissal application”, the first applicant denied all the allegations of misconduct, disruptive conduct etc (as outlined in the Form F3) and denied he had been counselled, warned or reprimanded about any matter (also as outlined in the Form F3).

•  Under the heading “Alleged redundancy – clause 3.2 of the Employer Response to Unfair Dismissal application”, the second applicant noted the respondent had alleged in the Form F3 that her employment was terminated due to genuine redundancy.

•  Under the heading “Shutdown from 11 February 2020 to 23 February 2020”, the evidence of both applicants was that on 9 February 2020 they were informed the restaurant was going to shut-down in the period 11-23 February 2020; and no reason was provided – albeit it may be noted that in the second applicant’s oral evidence she stated she was informed that the shut-down was “because of a renovation” and she confirmed later that on or about 12 February 2020 she was told the restaurant was closed for renovations. Moreover, in the closing submissions made by the applicants’ daughter in relation to the second applicant, it was submitted the second applicant understood the closure was for a “kitchen renovation”, but the second applicant did not know the real reason for the closure – except, perhaps, that January and February are typically quiet months for Chinese restaurants (in Australia) because international students return to China for holidays. It was the first applicant’s understanding that it was only he and his wife, the second applicant, who were not re-employed by the respondent following the temporary closure from mid-February 2020.

•  The first applicant learned from a social media post on WeChat that the restaurant was shut-down for renovations. The first applicant maintained in his oral evidence no explanation had been provided for the closure and he learned (only) through WeChat there was going to be a kitchen renovation. The second applicant’s evidence was that she was informed she would be telephoned after 23 February 2020 as to when she could return to work, but never received a call and nor was she informed that her position had been made redundant. The oral evidence also indicated that the second applicant did not herself initiate any contact with the respondent after 23 February 2020.

•  Under the heading “Awareness of business losses”, the applicants’ evidence was that there was no indication the respondent was suffering hardship or financial difficulties prior to the dismissals. For his part, the first applicant was “as busy as ever and actually working 7 days per week”. Both witnesses noted that one of their family members was offered a position in order to meet demand in the restaurant.

•  Under the heading “Termination of employment”, the first applicant’s evidence was that on or about 15 February 2020 he received a telephone call from the restaurant’s floor manager. The floor manager said to him words to the following effect: “The head office is not happy with the management and staff and they want to replace everyone. You had better find another job.” The first applicant was “stunned” and rang the director of the business that same day. The first applicant recounted a conversation he had with the director and what followed-on from that conversation in the following terms in his witness statement:

“16. … [The floor manager] just told me that everyone got fired. Is that true?”

[The director] did not answer my question but instead said to me words to the effect: “You had better find another job.”

17. On 16 February 2020 I received a telephone call from [the director]. He asked me to come to the restaurant. I went to the restaurant and I had a conversation with [the director] to the following effect:

Myself: “Am I going to receive a termination payment?”

[The director]: “You will get nothing for termination as the restaurant is not making a profit. You are not entitled to anything. I will pay you $1000 for the 2 weeks of shutdown and nothing else”.

Myself: “I may need to get some legal advice.”

18. Later on in the afternoon of 16 February 2020 I tried to contact the restaurant accountant in the Canberra office [name]. [The accountant] refused to talk with me.”

19. I have not received any termination payment or a letter of termination or the $1000 as discussed above with [the director].”

[20] For her part, the second applicant noted in her evidence that she similarly had not received any termination payment or a letter of termination.

[21] The evidence of both applicants recounted their post-dismissal jobs and earnings. They both were employed by the same employer, which I shall refer to in this decision as “the noodle bar”, from a date or dates that were somewhat unclear on the evidence. The first applicant appears to have been without work in the period between 12 February 2020 and 1 March 2020, and then had three weeks of employment in the noodle bar in the period 2-23 March 2020.

[22] The second applicant’s evidence in her witness statement was that in late-January 2020 she obtained two days’ work a week at the noodle bar in addition to her existing employment with the respondent; the second applicant thought the commencement at the noodle bar was “probably in February”. In later oral evidence, the second applicant’s evidence was that after she was advised of the renovations, she worked five days a week at the noodle bar and continued to work five days a week until 23 March 2020. The oral evidence of the second applicant appeared to have some internally contradictory aspects to it concerning work at the noodle bar.

[23] Each of the applicants lost their jobs at the noodle bar on 23 March 2020 due to the coronavirus lockdown. Neither had found alterative employment around the time of the hearings. The first applicant had been trying to find another job since the loss of his job at the noodle bar; there was no evidence the second applicant had been trying to find another job after her employment ceased at the noodle bar.

Submissions

[24] The outline of submissions for each applicant effectively contended: (a) there was no valid reason for the applicants’ dismissals relating to either capacity or conduct; (b) at no time was either applicant advised either orally or in writing prior to dismissal that he/she was not doing his/her job properly and would have to improve his/her conduct or performance or otherwise be dismissed; (d) the applicants were not advised prior to the dismissals of the reason for the same and nor were they provided with an opportunity to respond; and (e) the applicants were not advised prior to (or after) the dismissals that their terminations of employment were redundancies.

[25] There were no submissions for the respondent.

Consideration

[26] By operation of s.396 of the Act, certain preliminary matters must be determined:

“396 Initial matters to be considered before merits

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;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

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

[27] Here, the first applicant’s application was made within time (s.396(a)); I will return to the second applicant’s application, in circumstances where the respondent’s Forms F3 suggested that application was out-of-time. The applicants were persons who were protected from unfair dismissal because they completed a period of employment of at least the minimum employment period and a modern award, namely, the Restaurant Industry Award, covered them (s.396(b)). As to s.396(c), I note the information in the Forms F3 indicated there were 18 employees and, while there were other objections, there was no objection related to the Small Business Fair Dismissal Code. I conclude consideration of consistency with the Small Business Fair Dismissal Code does not relevantly arise.

[28] In the Form F3, the respondent indicated (without further elaboration) its objection to the second applicant’s application on the basis that the application was out-of-time. Relevantly, the Form F3 suggested the second applicant was notified of the dismissal on 12 February 2000 and the dismissal also took effect that day. For her part, the second applicant considered the effective date of the dismissal to be 24 February 2020 (i.e. the date immediately following the shut-down period, when she was not contacted by the respondent about returning to work). Irrespective of whether the respondent’s nominated date of 12 February 2020 or the second applicant’s nominated date of 24 February 2020 is used as being the effective date of the dismissal, the second applicant’s application was within time. That is, s.394(2)(a) of the Act provides that an application for an unfair dismissal remedy must be made “within 21 days after the dismissal took effect”. In circumstances where the second applicant’s application (initially) was lodged on 4 March 2020, that date would render the application as being within time regardless of which of the two competing dates was applied (for example, 4 March 2020 would have been the relevant final date on which the second applicant’s application could have been lodged within time if it was the case the dismissal took effect on the respondent’s nominated date of 12 February 2020).

[29] It is unnecessary to consider the objections in the Forms F3 which indicated the applicants were “not dismissed”; their employment with the respondent plainly was terminated on the respondent’s initiative (s386(1)(a)) albeit there is some uncertainty around the precise dates.

[30] As to whether the dismissals of the applicants involved cases of genuine redundancy, s.389 of the Act provides as follows:

“389 Meaning of genuine redundancy

(1) A person's dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[31] Although the respondent flagged a genuine redundancy objection to the applications in the Forms F3, that matter was taken no further given the absence of evidence and/or submissions for the respondent in the hearings. As to s.389(1)(a) of the Act, there is no evidence upon which it could be concluded the respondent no longer required the applicants’ jobs to be performed by anyone because of changes in the operational requirements of the restaurant. The uncontested evidence of the applicants allows only one conclusion as to the s.389(1)(b) criterion concerning genuine redundancy, namely, that the respondent did not comply with the obligation in the Restaurant Industry Award to consult about the (purported) redundancies. There was no evidence and no submissions relevant to s.389(2)(a) or s.389(2)(b) of the Act, and so I cannot address those matters any further.

[32] Even if there were, perhaps, redundancies involved in the circumstances of the terminations of the employment of the applicants, neither of the redundancies was a “genuine redundancy” within the meaning provided by s.389 of the Act.

Harsh, unjust or unreasonable dismissal

[33] Section 387 of the Act specifies the matters that must be taken into account in determining whether a dismissal was harsh, unjust or unreasonable. I turn now to those matters.

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)

[34] There is nothing before me in the evidence to suggest there was a valid reason for the dismissals related to the applicants’ capacity or conduct (including its effect on the safety and welfare of other employees). As such, I conclude there was no valid reason related to capacity or conduct.

Whether the person was notified of that reason

[35] There is nothing before me to suggest the applicants were notified of any capacity or conduct-related reason for the dismissals. At its highest, the first applicant was informed by the floor manager: “The head office is not happy with the management and staff and they want to replace everyone. You had better find another job.” When the applicant sought clarification from the director as to whether it was true that “everyone got fired”, the director did not answer the question, stating only words to the effect: “You had better find another job.”

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[36] If it was the case that the dismissals were effected because “head office” was not happy with management and staff - including the applicants - in relation to capacity or conduct, there was no evidence the applicants were given an opportunity to respond to such matters.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[37] In these cases, there were no discussions relating to the dismissals. Hence, the question of any unreasonable refusal by the respondent to allow the applicants to have a support person present to assist does not relevantly arise.

If the dismissal related to unsatisfactory performance by the person–whether the person had been warned about that unsatisfactory performance before the dismissal

[38] It is not known whether the dismissals of the applicants related to unsatisfactory performance-related concerns. Rather, the Forms F3 referred principally to, and relied upon, redundancy-type considerations, albeit the Form F3 concerning the first applicant also adverted to some past concerns about him. In any event, the first applicant’s evidence was that he had not received any unsatisfactory performance-related warnings before the dismissal.

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 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

[39] There was no evidence and no submissions about the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissals. Similarly, there was nothing by way of evidence or submissions concerning whether the respondent did have, or did not have, dedicated human resource management specialists or expertise and, hence, nothing upon which to base a finding about 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 dismissals. However, the circumstances of the terminations of employment would seem to speak for itself about a lack of relevant expertise concerning employment-related matters.

Any other matters that the Commission considers relevant

[40] As to any other matters that the Commission considers relevant, I have noted there are some internal inconsistencies in the evidence in the applicants’ cases. Those internal inconsistencies do not lead me to conclude that the overall thrust of the applicants’ descriptions should not be accepted.

Conclusion as to unfairness

[41] As to both applicants, I have concluded the dismissals were not genuine redundancies. In accepting what was set out in the applicants’ outlines of submissions, I also conclude the dismissals were substantively and procedurally unfair, and that it is appropriate to make an order for an unfair dismissal remedy in each case. As such, I turn next to the question of remedy.

Remedy

[42] Reinstatement was not sought as a remedy, and so reinstatement and/or re-employment would be inappropriate. In the circumstances, I next consider compensation in lieu of reinstatement in the context of the provisions of s.392 of the Act.

The effect of the order on the viability of the employer’s enterprise

[43] There was no evidence concerning the effect of any compensation order on the viability of the respondent’s enterprise. I have noted what was said in the Forms F3 about the financial difficulties being encountered by the respondent, even though there was no evidence about such matters. I also take notice, more generally, of the well-publicised impact on the restaurant industry of measures that have been implemented concerning COVID-19. This was a matter raised in the Forms F3 and this matter was also touched-upon by the Deputy President in asking whether the respondent had continued to trade. It appears the respondent is still trading. That is, the evidence of the first applicant was as follows in response to a question about whether the respondent had been trading:

“[Applicant’s representative]:  Mr Jiang, can you tell the Commission whether Red Chilli Restaurant has been trading after 23 February 2020?---(Through interpreter) Yes.  Yes, they are still in operation.  I was actually dismissed on 15 February, and they actually restart at 23 February, and one day I remember, that's 14 June, I met a colleague who is the cook of Red Chilli Restaurant, and he told me that all the other staffs have returned back to work in the restaurant.  And I can also guess the information from the social media, the WeChat group, that the Red Chilli Restaurant is putting on lots of advertisements, and they are doing the delivery by now.  And sometimes I have been doing some shopping in the city and I can see that the restaurant is still open.  They actually have never been closed but for that small period.”

[44] In these two applications, the respondent determined not to file and serve any evidence or submissions, and decided not to participate in the hearings and not to provide any response after the Deputy President took the step of arranging for the transcripts of the hearings to be provided to the respondent for comment. The respondent was given ample opportunity to participate in advancing matters on its own behalf - including matters which may be relevant to the s392(2)(a) considerations turning, as they do, on the effect of the order on the viability of the respondent’s enterprise. The only evidence which adverted, directly or indirectly, to such matters was that part of the first applicant’s evidence which was:

“Bear with me while I take my notes. Mr Jiang, one of the things the Red Chilli Restaurant says in its response to your unfair dismissal application is that you were made redundant because the restaurant was having financial difficulties. Is there anything you wish to say about that? ---Yes.

…

THE INTERPRETER: He has said that yes, he has a reason: because I have been working there for four years, and this boss is actually quite big. He has four - I'm sorry - he has got eight outlets, and the one in Canberra is the best one. The business was actually quite moving there. And I understand that for this shop, it’s actually opened mostly for the customers as the overseas students. So every year in December, January, February, the business not that good because the overseas students return back to China. And - yes, that’s everything.”

[45] As things stand, however, there is nothing before me concerning the effect or potential effect of any orders for compensation on the viability of the restaurant - and so there is no basis upon which to adjust the compensation orders in such respects.

The length of the person’s service with the employer

[46] In the case of the first applicant, the length of service was from around July 2016 to February 2020. The second applicant’s length of service was from around June 2015 to February 2020.

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

[47] The question of remuneration in these matters is somewhat vexed. While it is not a matter for me to pass upon, the applicants’ evidence tends strongly to suggest they were underpaid in their employment with the respondent. Around the date of the hearings, the Fair Work Ombudsman was undertaking an investigation concerning what both applicants were paid. That is, the first applicant’s evidence concerning was as follows:

“5. My usual hours of work were:

(a) Monday to Thursday (inclusive) and Sunday: 9 hours - start 10am-2.30pm then 4.30pm to 9pm (2 hour break between split shifts)

(b) Friday and Saturday: 9½ hours: start 10am-2.30pm and 4.30pm to 9.30pm

(c) I worked 6 days and sometimes 7 per week. I always worked weekends and usually had a day off during the Monday to Friday span. I received a flat wage of $140 per day which did not vary even if I worked extra hours.

6. As I worked 6 days per week I was paid $840 per week. I did not receive entitlements such as annual leave, sick leave, carers leave, overtime payments or penalty rates. Currently the Fair Work Ombudsman is investigating as to whether I have been underpaid my entitlements.”

[48] It appears likely the first applicant and the second applicant would have received, or would have been likely to receive, wages broadly according with what was being paid prior to the dismissals (at least until the impacts of the COVID-19 lockdown).

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

[49] The first applicant obtained a new job following the dismissal, working nine hours a day/four days a week at the noodle bar for which he received $560 a week over a period of approximately three weeks.

[50] The second applicant apparently increased her hours/days of work at the noodle bar in connection with the cessation of her employment with the respondent, almost effective immediately around mid-February 2020. The second applicant’s evidence indicated she worked 10 hours a day over a five-day week, for which she was paid $800 a week.

[51] The employment at the noodle bar ceased for both applicants on 23 March 2020 due to the COVID-19 lockdown. The applicants remained unemployed at the time of the hearings in June 2020. There was evidence, in the case of the first applicant, that this was so despite endeavours to find other jobs.

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

[52] Given the circumstances of these cases, it is difficult to arrive at figures concerning the amounts of any income reasonably likely to be earned by the applicants during the period between the making of the orders for compensation and the actual compensation - but I would incline to the view that the applicants’ income-earning job prospects as kitchen hands would not seem optimistic given the COVID-19-related impacts on the restaurant industry generally.

Any other matter that the Commission considers relevant

[53] As to any other matter the Commission considers relevant, it is unclear to me upon which basis the applicants were formerly employed under the Restaurant Industry Award. That is, it is unclear to me whether the applicants were working/being paid, for example, as casual employees or permanent employees. I have noted that in the evidence and submissions there were issues going, broadly speaking, to questions of whether the applicants were paid properly in terms of matters including wages, paid leave, notice and/or other payments. These matters were the subject of on-going investigations by the Fair Work Ombudsman around the time of the hearings - and it is the appropriate body to deal with matters concerning alleged underpayments. The only matter before me is whether the applicants were unfairly dismissed and, if so, the question of remedy; and the assessment of compensation in such respects does not include components with respect to rectifying alleged underpayments.

Considerations concerning s.392(3)-(6) of the Act

[54] First, there is no basis to conclude there should be a reduction in the amounts of the orders on account of the misconduct (s.392(3)), as there was no evidence in the hearings of misconduct by either applicant. Second, the orders do not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused by the manner of the dismissals (notwithstanding, for example, that the first applicant sought compensation for “mental distress”) (s.392(4)). Third, and last, the orders do not exceed the compensation cap (s.392(5)-(6)).

Consideration - compensation

[55] The amount of compensation of course must be considered in the context of the statutory criteria and the authorities. In this regard, I note the comments in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Allan Humphries [2016] FWCFB 7206 at [16] (which was cited with approval in Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Nurcombe [2017] FWCFB 429 at [42]):

“[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.” (references omitted; my underlining)

[56] I have considered the statutory criteria and the principles discussed in the authorities, and I also note there are atypical aspects in these cases which do not lend themselves to, or indeed reasonably allow, the strict application of the usual formulations and considerations concerning compensation orders. For example, the applicants were receiving a flat hourly or daily rate regardless of the hour of the day, or the day of the week they worked in the restaurant, and their payments did not increase even if required to work more than what might be described as their standard patterns. As such, referencing an order, for example, to a specified number of weeks’ wages is problematic given what appear to be sub-award payments.

[57] A fair go all around would not ensue if the usual considerations were merely formulaically applied, given the distortions which would seem likely to result. For instance, consideration of the applicants’ pre-dismissal earnings and matters such as remuneration the applicants would have received, or would have been likely to receive, here have to be considered in the context that the applicants were likely being paid sub-award rates – and, presumptively, the applicants would have continued to receive presumptively sub-award rates had the employment continued. It is also unclear whether there has been a loss of non-transferable credits, for it is unascertainable on what is before me whether the applicants’ employment at the time of the dismissals involved casual or permanent employment. Moreover, these two hard-working individuals (the second applicant, for example, was working two jobs before she was dismissed) whose relevant skills base is as kitchen hands obviously did not sit on their hands when considering the evidence of their endeavours to mitigate their losses. The second applicant was fortunate to have her work hours in her second job at the noodle bar promptly expanded; and the first applicant also obtained employment at the noodle bar within a comparatively short period of time. Unfortunately for each of the applicants, those endeavours to mitigate their losses peremptorily came to an end on 23 March 2020 in connection with the COVID-19 close-down - being a matter entirely outside their control. I do not consider it appropriate to provide compensation to the applicants because their employment at the noodle bar ended and then became unemployed; they had made efforts to mitigate their losses and the loss of the employment at the noodle bar was a supervening event which was not attributable to the respondent - and no doubt also affected the respondent. (Separately, the applicants’ loss of their comparatively long-standing employment with the respondent regrettably meant they were not JobKeeper-eligible, if it was the case, for example, that the respondent was a JobKeeper-eligible employer; that is a matter which I consider cannot be factored in for any compensation orders).

[58] Were it not for the fact that the respondent had determined not to participate in the proceedings and the Fair Work Ombudsman was still investigating alleged underpayments around the time of the hearings, one course in connection with calculating the amount for the compensation orders would have been to direct the parties to settle the draft minutes of the orders based on pay records or the like with references to numbers of weeks’ wages. Given that the respondent had repeatedly declined to participate in the proceedings and what the applicants properly should have been paid (if they were in fact underpaid) was not in evidence, obviously here would be no utility in adopting that course or any similar course.

[59] Against the background of the raft of atypical factors and the absence of any material from the respondent concerning matters which usually arise, and having regard to what were, the evidence leads me to conclude, unfair dismissals, I have determined in the exercise of discretion, having regard to all the circumstances as to what is before me and a consideration of the statutory criteria and authorities, that:

•  the first applicant should have a compensation order in the amount of $3,500.00 as an unfair dismissal remedy in his favour; and

•  the second applicant should have a compensation order in the amount of $2,500.00 as an unfair dismissal remedy in her favour.

[60] In determining these amounts as appropriate for compensation orders having regard to all the circumstances of the cases, there is no cause to reduce the amounts on account of misconduct and the amounts do not contain any component for shock, distress or humiliation, or other analogous hurt. Further, and for the avoidance of doubt, the compensation amounts do not contain (and nor could they) any component designed to address any aspect of the applicants’ underpayment claims before the Fair Work Ombudsman. Any such claims may continue to be progressed by the applicants through appropriate channels if the investigations are not yet complete. Lastly, I note the amount of the order is significantly less than what was sought in, for example, the case of the first applicant based on calculations advanced on his behalf, but the orders are cast in amounts I consider appropriate in all the circumstances.

Conclusion

[61] Given my conclusions, orders issue in conjunction with this decision that the respondent pay to the applicants the respective amounts within 21 days.

[62] The proceedings are concluded in relation to each matter.

COMMISSIONER

Appearances:

P Smith, solicitor, on behalf of the first applicant, J Jiang.
J Jiang, daughter of the applicants, on behalf of the second applicant, H Jiang.

No appearance by or on behalf of the respondent.

Hearing details (before Kovacic DP):

2020.
Canberra (by telephone/video):
June 17 (concerning the second applicant);
June 18 (concerning the first applicant).

(and on the papers before McKenna C).

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