Jorja Mcgennan v Angela Joy Park
[2024] FWC 633
•11 MARCH 2024
| [2024] FWC 633 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jorja Mcgennan
v
Angela Joy Park
(U2023/5979)
| DEPUTY PRESIDENT LAKE | BRISBANE, 11 MARCH 2024 |
Application for an unfair dismissal remedy – remedy determined – reinstatement not appropriate – compensation awarded.
A decision was issued [2024] FWC 255 on 31 January 2024 determining that Ms Jorja McGennan (the Applicant) was unfairly dismissed by Angela Joy Park (the Respondent).
In summary, the Respondent had issues with the Applicant’s work performance including issues with interactions with clients, quality of work and mobile phone usage. An incident with a client occurred on 13 May 2023 where Ms Park said a comment to a client about Ms McGennan’s work performance. The client had relayed this to Ms McGennan on 17 June 2023. This led to Ms McGennan raising this with Ms Park. Ms Park had requested that the Applicant apologise to the client as the client felt uncomfortable returning because of a miscommunication about the gossip shared between the client and both hairdressers.
On 4 July 2023, Ms Park had handed the Applicant a written warning. It was stated on the written warning that the Applicant would be required to improve by 11 July 2023. However, the Applicant was dismissed on the same day.
Valid reason was found on the basis of work performance rather than the interaction with the client surrounding the gossip. The Respondent did not grant procedural fairness making the dismissal unfair.
Further directions were issued to determine the remedy. A hearing was listed on 21 February 2024.
Submissions
Both parties have stated reinstatement is something they did not wish to consider as the relationship between both parties have broken down.
The Applicant states that she would be paid around $902.39 a week working 38 hours. The Applicant had not gained another position as a 4th year apprentice in the hairdressing industry and states that she would have worked 14 weeks until her apprenticeship ended and would have earned $13,066.28 before tax.
The Applicant states that there was reputational harm caused to her in the hairdressing industry because of an article which was shared by some of Ms Park’s family.
The Applicant returned to TAFE to complete her Certificate III in Hairdressing. The Applicant had requested Ms Park to lodge a form to cancel her training contract which was not completed by Ms Park. The Applicant had to reenrol her course through TAFE which will come to a total cost of $1,350.
The Applicant has been working at a surf outlet shop during the period of her dismissal to mitigate her loss.
The Respondent submits that compensation amount awarded to the Applicant should be $0 on the basis that there were valid reasons for the Applicant’s dismissal, but the procedure was improperly executed. The Respondent argues that it was executed quickly to save financial loss and further damage to its reputation.
The Respondent states as a small business, that their capacity to deal with misconduct is very limited and have difficulties implementing disciplinary procedures. The Respondent states that discussions surrounding misconduct had been going on for weeks and the Applicant would refuse to follow lawful directions throughout the time. The performance meeting was a last effort for the Respondent to resolve the matter.
The Respondent claims that the Applicant could have completed her apprenticeship with her aunt. The Applicant stated she could not complete her apprenticeship with her aunt as the salon was too small. The Applicant had referred her clients to her aunt’s salon.
The Respondent also claims was paid two weeks leave in lieu of notice and that they had to employ another staff member to cover 3 months of advanced bookings that were required to cover Ms McGennan.
Remedy
Section 390 of the Act provides that:
“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.”
The Applicant and Respondent have stated that reinstatement is something that they do not wish to consider. As a result, I do not find this to be an appropriate remedy.
Section 392 sets out the considerations for awarding 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.”
The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket,[1] and has been applied and developed by Full Benches of the Commission in the context of the current Act.[2]
In short, the authorities indicate that assessing compensation involves a four-step process, noting that the guidelines are not a substitute for the words in the Act:
“Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost). I also take into account the length of service with the employer[3] and the ability to find a new role as a relevant factor in calculating compensation per s392(2).
Step 2: Deduct monies earned since termination.[4]
Step 3: Discount the remaining amount for contingencies.[5]
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount they would have received if they had continued in their employment.”
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
The Applicant would have remained in her employment until the completion of her internship on 13 October 2023 which would have been 14 weeks and 2 days assuming that Ms McGennan was working a 38-hour week. Ms McGennan would have earned $13,066.28 before tax.
Step 2: Deduct monies earned since termination.
The Applicant has been employed at a surf shop and earned $2,000 after the dismissal. This will be reduced from the compensation calculation.
Step 3: Discount the remaining amount for contingencies.
The main reason for the dismissal was the interaction with a client shared by Ms McGennan and Ms Park. This reason for dismissal was harsh. It was disproportionate considering it was Ms Park who had made the comment about Ms McGennan to the client at first instance. Both parties could have addressed the situation better. The other reasons for dismissal were valid but could have only been assessed from evaluating the Applicant’s work performance.
I exercise my discretion to discount the compensation amount related to the Applicant’s work performance and her contribution to the breakdown of the employment relationship. A reduction of 3 weeks is made of $2,707.17.
The Applicant was also paid two weeks in lieu of notice. This would have not had to been paid if the Applicant concluded her apprenticeship. A deduction of 2 weeks is made of $1,804.78.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.”
In Bowden v Ottrey Homes Cobram and District Retirement Villages,[6] the Full Bench noted that in relation to the fourth step, the usual practice is to settle a gross amount and leave taxation for determination. I will leave the issue of taxation for determination by the Respondent.
Viability
I see that there may be some issues of viability of the Respondent paying the Applicant upon issuing this Order as they are a small business. The Respondent will be given additional time to pay the Applicant in instalments.
Order
The total amount the Respondent is required to pay to the Applicant is $6,554.33 before tax. The Respondent is ordered to pay the sum of $3,277.17 within 30 days on issuing this Decision to the Applicant’s nominated bank account that was on payroll. The Respondent is required to pay the remainder of its compensation which amounts to $3,277.16 gross within 60 days on issuing this decision.
I Order accordingly.
DEPUTY PRESIDENT
Appearances:
J. McGennan appearing for herself as the Applicant.
M. Guilfoyle appearing on behalf of the Respondent from The Firm on The Avenue.
Hearing details:
21 February 2024
Brisbane
Hearing via Microsoft Teams
[1] (1998) 88 IR 21.
[2] Bank of Sydney Ltd T/A Bank of Sydney v Repici [2015] FWCFB 7939.
[3] Fair Work Act 2009 (Cth) s392(2)(b) -(c) and s392(2)(g).
[4] Ibid s392(2)(e)
[5] Ibid s392(2)(a), (d) and (f).
[6] [2013] FWCFB 431.
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