Karen Zita Fisher v Carpet Call (Qld) Pty Ltd T/A Carpetcall
[2023] FWC 1333
•21 JUNE 2023
| [2023] FWC 1333 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Karen Zita Fisher
v
Carpet Call (Qld) Pty Ltd T/A Carpetcall
(U2022/12225)
| DEPUTY PRESIDENT LAKE | BRISBANE, 21 JUNE 2023 |
Application for an unfair dismissal remedy – unable to perform the inherent requirements of role –issues with procedural fairness – compensation awarded.
Mrs Karen Zita Fisher (the Applicant) brought an application to the Fair Work Commission (the Commission) seeking a remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) stating she was unfairly dismissed from her employment from Carpet Call (Qld) Pty Ltd.
It is undisputed that the Applicant was dismissed on 5 December 2022, and she lodged this application with the Commission on 23 December 2022, within 21-days, as required by the Act.[1] The Applicant is protected from unfair dismissal and the dismissal did not involve a genuine redundancy.[2]
Directions were issued for a hearing which was held on 12 April 2023. The Applicant was self-represented, and Mr Thomas Fuimaono-Page appeared on behalf of the Respondent as part of the Victorian Chamber of Commerce and Industry.
Background
The Applicant began her employment with the Respondent from 24 September 1989 and performed a wide range of jobs. She performed her role as Clerk Cash Controller for over 15 years which required physical paper-based filing duties, undertaking daily banking duties and frequently access various entity bank accounts. The Applicant worked with the Respondent for 33 years.
The Applicant states in her witness statement that she was sick on 17 June 2022 and was unable to work. She was hospitalised on 19 June 2022. The Applicant’s husband had contacted the Respondent confirming this fact. The Applicant was sick from this date until her date of dismissal.
The Applicant provided the Respondent seven (7) medical certificates stating that she was unfit for work for the following dates:
-20 June to 24 July 2022
-8 July to 25 July 2022
-25 July to 2 September 2022
-25 August to 30 September 2022
-30 September to 30 October 2022
-1 November to 30 November 2022
-10 November to 31 December 2022.
During this period of absence, the Applicant had exhausted her personal leave balance, and took long service leave in order to receive income during this period. The Applicant had no more leave remaining at her time of dismissal.
The Applicant asked if she could do her role remotely which was denied because she was required to perform the role in-person based on the paper filing duties.
On 5 December 2022, the Applicant was informed via telephone call from Mr Tim Bensley (Chief Financial Officer of the Respondent) that her role was currently performed through the Melbourne Head Office.
During this call, Mr Bensley states that the phone call was to determine whether the Applicant could return to work considering that she had no leave remaining and it was uncertain when the Applicant could return back to work because of her health. Mr Bensley states that the Applicant did not want to resign because of the effects on her insurance. As a result, Mr Bensley stated he would terminate the Applicant’s employment so that her insurance would not be affected, and that when she became ready to work again, that a suitable role may be found for her.
On the same day, the Applicant received a termination letter. The Respondent terminated the Applicant on the basis that she had been absent for medical reasons for over 3 months and had no sick leave remaining on her employment. The Applicant was paid 5 weeks in lieu of notice.
Initially, the Applicant’s role was temporarily covered by Ms Karen Harwood, who is the Group Accounts for the Respondent. Eventually, Ms Grace Zhou as the Group Accountant took on most of Mrs Fisher’s duties through the Melbourne Head office.[3] This was supposed to be a temporary arrangement until the Applicant could return to work, but the Applicant was still not fit to return to work. The duties had been moved to the Melbourne Head office permanently.
The Applicant argues that she was not warned of her dismissal until she received a call on 5 December 2022. The Applicant states her role was made redundant as the duties of her role were done in the Melbourne Head Office, and the role she had was the only role in Australia. The Applicant seeks compensation.
The Respondent argues that it was mutually agreed with the Applicant to terminate her employment and had the Applicant not requested to be terminated, that she would be dismissed on the basis that the Respondent would have had no other reasonable alternative than to terminate her employment as she was unable to perform the inherent requirements of her role. The Respondent seeks for the Application to be dismissed.
Was the Applicant unfairly dismissed?
Section 387 of the Act provides that, in considering whether a dismissal was harsh, unjust or unreasonable, the Commission 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);
(b) whether the person was notified of that reason;
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
(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;
(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the 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;
(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 Commission considers relevant.
I am required to consider each of these criteria to the extent they are relevant to the factual circumstances before me.[4]
(a) whether there was a valid reason for the dismissal
The Respondent states the primary reason for dismissal was that the Applicant had requested that her employment be terminated by the Respondent after her call with Mr Bensley on 5 December 2022. The Applicant contends that she asked to be terminated from her employment. In the alternative, the Respondent argues that they had no alternative but to terminate the Applicant’s employment on or after 5 December 2022 on the basis that she was unable to perform the inherent requirements of the role.
It is well established that the factual basis for the reason for dismissal will not of itself demonstrate the existence of a valid reason.[5] It must, as s.387(a) makes clear, be a valid reason for dismissal. To be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[6] and should not be “capricious, fanciful, spiteful or prejudiced.”[7] As summarised by Deputy President Asbury in Smith v Bank of Queensland Ltd a “dismissal must be a justifiable response to the relevant conduct or issue of capacity”.[8]
Capacity takes into account whether the Applicant has the capacity to perform their duties at the time of dismissal, at some time in the foreseeable future, and whether there was some reasonable adjustment which could have been made in order to accommodate any current or future capacity of the Applicant to perform their role.[9] The future capacity to perform duties may be assessed by reference to their state of health expressed by expert opinions at the time of dismissal.[10] An inability to perform the inherent requirements of a position can be a valid reason for dismissal.[11]
The Applicant did not have capacity to perform the duties of her role at the time of dismissal and in the foreseeable future. The Applicant had provided medical certificates indicating that she was not fit for work and did not know when she could return back to work. There are questions regarding whether reasonable adjustments could have been made considering that some of Mrs Fisher’s duties were done remotely by Ms Zhou in Melbourne, and some duties of the role are done remotely in the Melbourne office. However, Mrs Fisher did not provide a clear return to work date which would provide the Respondent an opportunity to consider the request.
I find that the Respondent did wait for Mrs Fisher to return back to work and had temporarily restructured the role until her health improved. However, the length of absence by Mrs Fisher had given the Respondent a valid reason for dismissal on the basis that she was incapable of performing her existing role, as a part of her role requires her to work in the office.
In regard to the contention by the Respondent that the Applicant had asked to be terminated would not justify the valid reason, nor would this be well founded. Although it appears that Mr Bensley respected Mrs Fisher’s considerations based on her length of service, and health issues, this process would be more defensible through giving her an opportunity to respond, require her to undertake an independent medical examination or to consider the nature of the call before making a final decision regarding her dismissal especially taking into account her length of service.
The Respondent had a valid reason for dismissal on the basis that Applicant was unable to perform an inherent requirement of her role because of her capacity.
(b) and (c) whether the person was notified of that reason and had an opportunity to respond
I note that the Respondent tried to accommodate the Applicant’s health issues as much as they could. The Respondent argued that it had sufficient information to make an informed decision where further enquiries would be needed, and that it was not incumbent on an employer to take any particular steps in carrying out a dismissal citing Nystar Hobart Pty Ltd v Peter Brain [2018] FWCFB 3346.
Although the employer is not required to take any ‘particular steps’ in carrying out the dismissal, it is commonly accepted practice that notice in explicit and plain and clear terms must be given regarding termination of an employee except in cases of serious misconduct.[12] It is a statutory protection derived from the principles of procedural fairness that require employees to be treated fairly before a decision is made regarding their livelihood.[13]
The Applicant should have received some form of notification that she would be terminated on the basis that she was unable to perform the inherent requirements of her role. In the alternative, if accepting the fact that Mrs Fisher asked to be terminated from her employment during this phone call, notice of the termination should be given for her to consider the option of whether she wished to be terminated.
I find that the Applicant was not sufficiently notified of the reason for her dismissal and did not have an opportunity to respond. The only notification which the Applicant may have received was a phone call with Mr Bensley on 5 December 2022 that she would be terminated.
(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; (e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal
These factors are irrelevant to the present case.
(f) and (g) the degree to which the size of the employer’s enterprise and the absence of dedicated human resource management expertise would be likely to impact on the procedures followed
The Respondent is a medium sized employer which does not have a dedicated human resource management expertise. However, it is a member of the Victorian Chamber of Commerce and Industry to which they could have consulted regarding the potential dismissal of the Applicant.
The Respondent may have been more informal with the procedure considering Mrs Fisher’s length of service, her health concerns, and that she was a dedicated and well-performing employee of the Respondent. This is a matter considered in respect of other factors.
(h) any other matters that the FWC considers relevant
Other factors that I consider relevant to the dismissal is the impact of the dismissal on the Applicant’s personal or economic situation, her ability to find alternative work,[14] along with her work performance and history with the Respondent.[15] These factors can be considered in weighing the harshness of the dismissal per the Full Bench decision in Queensland Rail T/A Queensland Rail v Michael Rainbow[2022] FWCFB 147 at [69] – [71].
The Applicant had worked for the Respondent for 33 years, where there had been no other issues with her performance that were raised by the Respondent. The Applicant is a woman of senior years, who has only worked with Carpet Call for 33 years, in an area with limited employment opportunities for someone of her age and skill set. The termination of her employment has had a significant impact on her and her family. Mrs Fisher had been doing a role which was exclusively done in the office she worked at.
The Respondent recognised the Applicant’s loyalty and commitment with Carpet Call. When Mrs Fisher was fit to work, the Respondent was open for Mrs Fisher to find a role that would be suitable to her.
The Respondent had organisational difficulties with Mrs Fisher’s absence as they did not know a possible date of return. When the Respondent moved the Applicant’s role to the Melbourne Office, the Applicant could have possibly been provided a redundancy if the Respondent did not require her to perform her role.
Conclusion
On the balance of probabilities, I am satisfied that the Applicant’s dismissal was harsh, unjust or unreasonable in consideration of all the relevant factors and the evidence provided by the parties. The Applicant’s long service with the Respondent, and the failure by the Respondent to provide an opportunity to respond regarding her potential termination outweigh the valid reasons raised by the Respondent.
Therefore, for the reasons given above, I am satisfied that the Applicant has been unfairly dismissed. I turn now to remedy.
Remedy
Given that I have found that the Applicant’s dismissal was unfair, it is necessary to consider the question of remedy. The Applicant has made an application under s. 394 of the Act in determining the Applicant’s remedy for unfair dismissal.
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 at this stage. 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,[16] and has been applied and developed by Full Benches of the Commission in the context of the current Act.[17]
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[18] 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.[19]
Step 3: Discount the remaining amount for contingencies.[20]
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 Respondent states that had a dismissal process taken place in regard to seeking more detailed medical evidence, or a more in-depth opportunity to show cause that it would have extended the Applicant’s employment at the Respondent for no longer than 3-5 weeks.
If the Respondent was unable to determine when the Applicant could have returned to work, her role could have been restructured in a manner which could have possibly granted the Applicant a genuine redundancy. Had this occurred, the Applicant would have been entitled to a redundancy of 12 weeks.
There is uncertainty as to how long the Applicant would have remained employed with the Respondent since there was no clear return to work date. The Applicant had been working with the Respondent for 33 years, is at an older age close to retirement, and her role was primarily paper based. It is assumed that had the Applicant had a clearance to return to work, she would still be employed with CarpetCall until her retirement.
The full 26 weeks will be applied which amounts to $32,500.
Step 2: Deduct monies earned since termination.
The Applicant has not been employed during the termination. No monies will be deducted under this step.
Step 3: Discount the remaining amount for contingencies.
The contingencies are that the Applicant was unable to perform the inherent requirements of her role and the Respondent have been required to find a replacement to cover her role. It was uncertain when she would be able to return to work and therefore there was a valid reason for dismissal.
I accept that there is a contingency in that the Applicant’s return to work date was unclear. A deduction of 5 weeks is made in that the Applicant could have been clearer to the Respondent regarding her return-to-work plan. This amounts to $6,250. The medical certificates alone would not have assisted the Respondent in finding an appropriate role for the Applicant.
The Applicant was not in a position to mitigate her losses considering that she had been dealing with health issues in return back to the workforce. The effect of this order will not affect the viability of the Respondent as they are medium sized business which is not under financial hardship.
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,[21] 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.
Conclusion
I see that there are no issues of viability of the Respondent paying the Applicant upon issuing this Order. The Respondent is ordered to pay the sum of $26,250 gross within 21 days on issuing this Decision to the Applicant’s nominated bank account that was on payroll. I Order accordingly.
DEPUTY PRESIDENT
Appearances:
Mrs K. Fisher for the Applicant
Mr T. Fuimaono-Page on behalf of the Respondent
Hearing details:
12 April 2023 via Microsoft Teams
Brisbane
[1] Fair Work Act 2009 (Cth) s.394.
[2] Ibid s.396.
[3] Witness Statement of Grace Zhou [4]-[5].
[4] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498 [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002) [69].
[5] Raj Bista v Group Pty Ltd t/a Glad Commercial Cleaning[2016] FWC 3009.
[6] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[7] Ibid.
[8] [2021] FWC 4 at 118.
[9] Jetstar Airways Pty Limited v Ms Monique Neetson-Lemkes [2013] FWCFB 9075 at [53]
[10] Ibid 55.
[11] Ibid; J Boag and Son Brewing Pty Ltd v Allan John Button [2010] FWAFB 4022.
[12] Chubb Security Australia Pty Ltd v Thomas (2000) AIRCFB at [41] Print S2679 (McIntyre VP, Marsh SDP and Larkin C); Crozier v Palazzo Corporation Pty Ltd [2000] 98 IR 137 at 73 (Ross VP, Acton SDP and Cribb C); Previsic v Australian Quarantine Inspection Services, Print Q3730 (AIRC, Holmes C, 6 October 1998). The principles still apply to the provisions of s.389(b) and (c) of the Fair Work Act 2009 (Cth), see William Eskander v Visy Board Pty Ltd [2021] FWC 3122 (Harper-Greenwell C) upheld in [2021] FWCFB 6036.
[13] Crozier v Palazzo Corporation Pty Ltd [2000] 98 IR 137 at 73 (Ross VP, Acton SDP and Cribb C)
[14] Ricegrowers Co-operative Limited v Schliebs, PR908351 (AIRCFB, Duncan SDP, Cartwright SDP, Larkin C, 31 August 2001) at para. 27.
[15] Streeter v Telstra Corporation Limited [2008] AIRCFB 15 (Acton SDP, Cartwright SDP, Larkin C, 24 January 2008) at para. 25, [(2008) 170 IR 1];
[16] (1998) 88 IR 21.
[17] Bank of Sydney Ltd T/A Bank of Sydney v Repici [2015] FWCFB 7939
[18] Fair Work Act 2009 (Cth) s392(2)(b) -(c) and s392(2)(g).
[19] Ibid s392(2)(e)
[20] Ibid s392(2)(a), (d) and (f).
[21] [2013] FWCFB 431
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