John Perry v Nardy House Inc

[2016] FWC 73

[2016] FWC 73 [Note: An appeal pursuant to s.604 (C2016/2207) was lodged against this decision - refer to Full Bench decision dated 12 February 2016 [[2016] FWCFB 943] and 21 April 2016 [[2016] FWCFB 1621]] respectively for result of appeals.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

John Perry
v
Nardy House Inc
(U2015/11804)

COMMISSIONER RIORDAN SYDNEY, 6 JANUARY 2016

Application for relief from unfair dismissal.

[1] This decision relates to an unfair dismissal application by Mr John Perry. Mr Perry was employed by Nardy House Inc (NHI) from 4 September 2014 until 25 August 2015.

[2] NHI is a not for profit charitable organisation which provides caring services to people aged 0 – 65 with profound physical disabilities. It runs a 12 bed facility in the Bega Shire, with 6 of those beds providing much needed respite care.

[3] Mr Perry was represented by Ms Marissa Whitington who is an Industrial Officer of the Australian Municipal, Administrative, Clerical and Services Union, New South Wales and ACT (Services) Branch (ASU). NHI was represented by its part time CEO, Ms Denise Redmond. Ms Redmond advised me that NHI did not believe that it was appropriate to waste its scarce financial resources on legal representation in the proceedings. Ms Redmond also advised me that she is a life member of the NSW Teachers Federation.

[4] Mr Perry provided a witness statement and gave evidence on his own behalf. NHI relied on witness statements and evidence from Ms Redmond, Ms Lacey (Service Co-ordinator and Nurse Unit Manager at NHI), Ms Hawthorne (Administrative Assistant at NHI) and Ms Fisher (Financial Controller at NHI).

[5] NHI raised a jurisdictional objection to the application on the basis that Mr Perry was a casual employee who had not been dismissed. It is not a dispute that Mr Perry has not been offered any shifts since 25 August 2015.

Background

[6] Mr Perry was employed by NHI on 4 September 2014 as a casual Care Support Worker (CSW). Mr Perry was rostered to work for 128 hours every month. This roster was provided before the end of each 4 week cycle. It is not challenged that this roster was then subject to additional shifts and shift swaps.

[7] Mr Perry was advised at his interview that he would be rostered each month for 128 hours of work.

[8] Ms Hawthorne testified that she was instructed to change the way that she prepared the casual roster by the CEO from September 2015. This meant that all casual employees went from being rostered in advance for shifts to only being offered work on a “call in” basis. Mr Perry was advised of this change on 18 August 2015, after he saw the published roster for September where he had been allocated zero hours.

[9] Mr Perry wrote to NHI on 22 August 2015 seeking an explanation for the modified roster and requesting that he be made a permanent employee.

[10] NHI responded on 25 August 2015, confirming Mr Perry’s casual status;

“…There has never been a guarantee of work hours and work conditions other than what has been contractually agreed. Casual employees may be asked to do increased hours when staff members are on leave or on holidays and this has been the case in recent times. The call-in position did not change however it was possible to guarantee that the hours would be there when the permanent employee was on leave. This is why we have casual staff. Casuals do not have to accept these hours and times and need only give limited notice regarding this acceptance.” 1

[11] Mr Perry has obtained a Certificate IV in Disability and Aged Care. Mr Perry was diagnosed as a paraplegic in 2003 following a serious road accident. To his credit and after countless hours of self rehabilitation, Mr Perry is now fully fit with no physical impairment or restriction. Mr Perry signed a contract at the conclusion of his probationary period. Relevantly, clause 6 of the contract states;

“…6. Casual Hours

6.1 As a casual employee you are not guaranteed any set number of hours per week

6.2 You will be advised of your casual hours by the Service Co-ordinator

6.3 When you are required to work overtime, you will be paid in accordance with the Award

6.4 During your hours at work, you must devote your whole time and attention to the performance of your duties” 2

[12] It is not in dispute that Mr Perry received the 25% casual loading throughout his employment with NHI.

[13] On 27 March 2015, as a result of an emotional request from Mr Perry who was trying to refinance his home loan due to personal issues, Ms Fisher provided Mr Perry with the following letter;

“27/003/2015

To Whom it may concern

This is to certify that Mr John Perry of 1448 Tarraganda Lane Tarraganda NSW is currently employed full time with Nardy House since 04/09/2015.

Employment is ongoing.

Any further information required please do not hesitate to contact myself.

Kind regards
Wendy Fisher
Financial Controller
Nardy House” 3 (my emphasis)

[14] Ms Redmond advised that Ms Fisher did not have the authority to provide this correspondence and has been subjected to disciplinary action as a result.

[15] As a result of this correspondence, Mr Perry was able to refinance his home loan. His current unemployment/underemployment has placed him under severe financial difficulties as a result.

[16] In May 2015, Mr Perry was advised that he was unsuccessful in gaining one of the four permanent positions that had been advertised in April. I note that, at the time, NHI had six casual employees (four of whom were the successful applicants) who were all working consistent and rostered hours. I note that the fifth casual employee has also recently been appointed to a permanent position.

[17] Ms Redmond and Ms Lacey contested Mr Perry’s evidence that he would be made permanent after his probation period. They stated that Mr Perry was told that he could apply for a permanent role if one became available after his probation.

[18] Mr Perry made his application to the Fair Work Commission (FWC) on 14 September 2015. Ms Hawthorne testified that she decided not to offer Mr Perry any shifts since 22 August 2015, because of the application to the FWC and Mr Perry’s correspondence to Ms Redmond on 22 August 2015. I am of the view that Ms Redmond condoned this action.

[19] I requested additional information from NHI during the Hearing on 4 December 2015 in relation to the number of hours that casuals have worked in recent months. This information shows that casuals have worked 1286 hours between 17 September 2015 – 14 October 2015, 1478 hours between 15 October 2015 – 11 November 2015 and 1270 hours between 12 November 2015 – 9 December 2015.

Legislation

[20] The Fair Work Act 2009 (the Act) contains the following provisions in relation to an unfair dismissal application:-

381 Object of this Part

(1) The object of this Part is:

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

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

(ii) the needs of employees; and

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

(i) are quick, flexible and informal; and

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

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

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

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

382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
Note: High income threshold indexed to $136,700 from 1 July 2015

383 Meaning of minimum employment period
The minimum employment period is:
(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:
(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or
(b) if the employer is a small business employer—one year ending at that time.

384 Period of employment
(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.
(2) However:
(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:
(i) the employment as a casual employee was on a regular and systematic basis; and
(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

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.

Jurisdictional Issue

[21] NHI have claimed that Mr Perry has not been dismissed, but that he simply refuses to put his name forward on the “on-call” roster. I have taken this into account.

[22] Mr Perry claims that he was promised at the point of engagement that he would be rostered for 128 hours per month and that the change to the rostering arrangement was a breach of his contract of employment. The evidence shows that Mr Perry was rostered for 128 hours every month from October 2014 until August 2015. The rosters show that whilst the shift pattern changed, the rostered hours remained the same. I have taken this into account.

[23] The jurisdictional issues at hand are whether Mr Perry was actually dismissed and whether Mr Perry’s systematic and regular engagement provide an alternative description to his employment status, ie., was he a casual employee?

[24] The Collins English Dictionary, Australian Edition, defines the term “casual” to mean:

“1. Happening by accident or choice;

6. occasional or irregular: casual visits: a casual labourer.”

[25] The Concise Oxford Dictionary, 10^th Edition, defines “casual” to mean:

“2. Not regular or firmly established - (of a worker) employed on a temporary or irregular basis.”

[26] In Reed v Blue Line Cruises Limited, the Industrial Relations Court of Australia (Moore J) held that:

“A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.

….In my opinion, a casual employee for the purposes of reg 30B is an employee who is, from time to time offered employment for a limited period on the basis that the offer of employment might be accepted or rejected but in circumstances where it could be expected that further employment of the same type would or might be offered and accepted but there was no certainty about the period over which it would continue to be offered.” 4

[27] In Cetin v Ripon Pty Ltd, a Full Bench of the Australian Industrial Relations Commission (AIRC) determined the following:

“[57] In Australian domestic law the words ‘casual employee’ have no settled meaning. The true nature of any employment relationship depends on the facts of each case. As Starke J said in Doyle v Sydney Steel Co. Ltd:

‘The description “casual worker” is not one of precision: it is a colloquial expression, and where, upon all the facts, there is a reasonably debatable question whether the work is casual or regular, the question is one of fact…’

[59] In our view all the facts and circumstances bearing upon the nature of the engagement should be considered in determining the true character of the employment. Consistent with the approach of Moore J in Blue Line Cruises, the informality, uncertainty and irregularity of an engagement supports a conclusion that the employment has the characteristic of being casual. Conversely regular and systematic engagements with a reasonable expectation of continuing employment are usually not characteristic of casual employment.

[61] In the matter before us the parties characterised Ms Cetin’s employment as casual and her employment was classified as casual under the Award. But in our view it would be wrong in principle to treat the character ascribed by an award to particular employment, and adopted by the parties, as conclusively determining the character of the employment for the purpose of regulation 30B(1)(d). Nor is the fact that Ms Cetin was paid a casual loading in lieu of sick leave, annual leave and public holidays determinative of whether or not she was a casual employee for the purpose of regulation 30B(1)(d). Each of these incidents is a consequence of the characterisation chosen by the parties. Rather than being conclusive, each of these matters are simply factors to be taken into account in determining the true character of the employment. As Lee J observed in Gurran v Tarbook Pty Ltd:

‘If parties to an employment contract have attempted in the terms of their contract to describe their relationship in a manner that does not accord with the facts, the relationship established by the facts will prevail.’

[62] Similarly as counsel in Re Porter put it: the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck.” 5

[28] Whilst Ms Redmond indicated that the published rostered shifts were not compulsory, Mr Perry’s uncontested evidence was that the only time that he did not work in accordance with his roster was when he was transferred to another shift to meet the “needs” of NHI. I have taken this into account.

[29] It is evident from the rosters that were submitted by NHI that Mr Perry worked systematic and regular hours from October 2014 until August 2015. It is also evident that the change in the casual rostering arrangements did not result in a decrease in the number of hours worked by casuals in the months of September, October and November 2015. I have taken this into account.

[30] I have taken into account the parties submissions in relation to the jurisdictional issues.

Conclusion

[31] Mr Perry’s employment history with NHI does not fit within any acceptable definition of the term “casual” employment. Mr Perry worked rostered regular and systematic hours over a long period of time. Mr Perry, appropriately, had an expectation that his hours would continue to be rostered in advance, based on comments made to him during his interview and throughout his employment.

[32] Following the obiter in Blue Line Cruises and Cetin I find that Mr Perry was not a casual employee. The regular and systematic rostering of Mr Perry identifies that he was, in fact, a permanent part-time employee. The fact that he was paid a casual loading is nothing more than an indication of the misunderstanding of the parties. To enact the duck analogy in Re Porter, Mr Perry was rostered like a part time employee and worked like a part time employee.

[33] I am not satisfied that the concept of “managerial prerogative” extends to the unilateral modification of an employee’s hours or system of work. The actions of Ms Hawthorn, which were condoned by Ms Redmond, in not offering Mr Perry shifts due to his application to the FWC and his complaint about the new rostering arrangements, was unconscionable conduct and possibly adverse action. By not offering Mr Perry any on-going shifts, NHI deliberately frustrated the contract of employment that it had entered into with Mr Perry. I do not accept the argument that Mr Perry excluded himself from working for NHI by refusing to participate in the “on-call” roster.

[34] I find that Mr Perry was dismissed by NHI. The jurisdictional objection of NHI is dismissed.

[35] Having found that Mr Perry has been dismissed, I then turn to the adjudication of whether the dismissal was harsh, unjust or unreasonable. This requires an analysis of each of the provisions of s.387 of the Act.

a) Valid reason

[36] Mr Perry was not provided with a valid reason for his dismissal. In Selvachandran v Peteron Plastics Pty Ltd, the Industrial Relations Court of Australia (North J) held that a valid reason must be:

“sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudicial could never be a valid reason.”  6

[37] The argument that Mr Perry was not dismissed by NHI is fanciful and misleading. The actions of NHI in not providing Mr Perry with any shifts were deliberately vindictive and spiteful.

b) Notification

[38] Mr Perry was not advised that he would not be given any shifts, even by “call-in”, on the basis of his FWC application.

c) Opportunity to respond

[39] Mr Perry was not given any opportunity to respond to the decision to not offer him any shifts.

d) Support person

[40] There was no meeting so this issue is not relevant.

e) Unsatisfactory performance

[41] There were no issues with Mr Perry’s performance.

f) Size of enterprise

[42] I have taken into account that NHI is a small not for profit organisation with a CEO who only works two days per week.

g) Human resource management

[43] I have taken into account the lack of human resource skills at NHI and the effect of this deficiency in this process.

h) Any other relevant matter

[44] I have taken into account that NHI is a not for profit charitable organisation providing much needed care related services in a regional community in NSW. I note that NHI have not employed legal representation in an attempt to save their scarce economic resources. I commend Ms Redmond for taking on the responsibility to defend NHI in this proceeding.

Consideration

[45] I have taken into account all of the submissions and evidence of the parties. Having found that the decision to deny Mr Perry on-going work was a dismissal, NHI did not have a valid reason for Mr Perry’s dismissal nor provide him with the required procedural fairness throughout the dismissal process. Mr Perry did not receive a “fair go” from NHI.

[46] I find that Mr Perry’s dismissal was harsh, unjust and unreasonable.

Remedy

[47] When considering the appropriate remedy for a successful unfair dismissal application, I am required to take into consideration the submissions of the parties and the relevant sections of the Act.

[48] Ms Whitington submitted that Mr Perry should be reinstated to the position of a permanent part-time CSW with full compensation (back pay) and an order for continuity of employment.

[49] Ms Redmond submitted that Mr Perry was a casual employee and does not have an entitlement to reinstatement. Further, management have lost the necessary trust and confidence for Mr Perry to be re-engaged as an employee.

[50] In Perkins v Grace Worldwide (Aust) Pty Ltd, the Full Court of the Industrial Court of Australia held:

“It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.

It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee’s employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.” 7

[51] The Act deals with the appropriate remedies for a successful unfair dismissal application in the following sections:

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:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or

(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.

Note: subsection 392(5) indexed to $68,350 from 1 July 2015

(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.

[52] The claim that NHI has lost the trust and confidence in Mr Perry is an important consideration. However, I am perplexed by this submission. There is no evidence to support this claim. Mr Perry was not the subject of any warning or performance based disciplinary action. Mr Perry has never been accused of any misconduct, whether that be mistreating patients, stealing or any form of inappropriate conduct in the workplace. Mr Perry has received consistently positive feedback from his supervisors, especially Ms Lacey.

[53] The only reasons that NHI may have to justify their stance on reinstatement would be in relation to Mr Perry not accepting the fundamental change to the rostering arrangements and his application to the FWC for an unfair dismissal remedy. Whilst this may make the employment relationship a little bit uncomfortable in the early stages, such a scenario cannot be responsible for severing the employment relationship.

[54] In Australian Meat Holdings Pty Ltd v McLauchlan, a Full Bench of the AIRC said:

“We accept that the question of whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate. It is one factor to be taken into account, bit it is not necessarily conclusive.” 8

[55] Having taken into account the submissions of the parties, the decisions in Perkins and Australian Meat Holdings and the primary remedy identified in the Act, I find that the reinstatement of Mr Perry is the appropriate remedy in this circumstance. I order that Mr Perry be reinstated to his role as a Care Support Worker on a permanent/part-time basis for 128 hours in a 4 week cycle.

[56] In these circumstances, I believe it to be appropriate, and order, that Mr Perry’s employment be regarded as being “continuous” from August 20, 2015.

[57] After taking into account s.391(4) of the Act, the limited work that Mr Perry has undertaken since his dismissal and the inaction of Mr Perry in not pursuing NHI for work, I order that NHI pay Mr Perry four weeks backpay.

[58] An Order will be issued concurrently with this decision.

COMMISSIONER

Appearances:

M Whitington, Australian Municipal, Administrative, Clerical and Services Union, New South Wales and ACT (Services) Branch, for Mr John Perry

D Redmond for Nardy House Inc

Hearing details:

2015.

Bega:

9 December.

Final written submissions:

20 December 2015

 1   Exhibit P1 – JP10

 2   Exhibit P1 – JP5

 3   Exhibit P1 – JP6

 4 73 IR 420 at 425

 5   PR938639

 6 64 IR 371 at 373

 7 72 IR 186 at 191

 8 84 IR 1 at 17

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