Kim Slater v Hairhouse Warehouse Victoria Gardens T/A Hairhouse Warehouse

[2014] FWCFB 9014

[2014] FWC 6471 [Note: An appeal pursuant to s.604 (C2014/6590) was lodged against this decision - refer to Full Bench decision dated 16 December 2014 [[2014] FWCFB 9014] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kim Slater
v
Hairhouse Warehouse Victoria Gardens T/A Hairhouse Warehouse
(U2014/4507)

COMMISSIONER RYAN MELBOURNE, 17 SEPTEMBER 2014

Application for relief from unfair dismissal.

[1] This decision concerns an application by Ms Kim Slater (the Applicant) for unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to her dismissal by Hairhouse Warehouse Victoria Gardens (the Respondent).

[2] The Applicant is a trade qualified hairdresser who learnt her trade in South Africa in 1990 and 1991. The Applicant ran her own business for 12 and a half years. In May 2011 the Applicant sought and gained employment at a Hairhouse Warehouse salon at Spencer St, Melbourne and was eventually offered employment with the Respondent at Victoria Gardens on 2 July 2012.

[3] It appears from the Applicant’s evidence that she was first employed as full time hairdresser but that around June/July 2013 the Respondent unilaterally reduced the Applicant’s hours of work from 38 hours per week to a fortnightly patter of 22 hours in one week and 15 hours in the next week.

[4] The Applicant was dismissed from her employment on 27 January 2014. The Applicant filed her application for an unfair dismissal remedy on 10 February 2014.

[5] I find that the application was made within the time limit specified in s.394(2)(a).

[6] The Respondent concedes that the Applicant was employed by the Respondent and that the Applicant was covered by the Hair and Beauty Industry Award 2010.

[7] I find that the Applicant is a person protected from unfair dismissal as the Applicant has completed the minimum period of employment specified in both s.383(a) and (b), and that the Applicant is covered by a modern award.

[8] The Respondent conceded in its Form F3 that the Respondent employed 8 persons as at the date of the dismissal of the Applicant. During final submissions in this matter Mr Kmaid, the owner of the Respondent, conceded that he also owned 4 other salons, each run as a separate business but with a combined total number of employees of nearly 50. 1

[9] I find that the Respondent was not a small business employer within the meaning of s.23 at the time of the dismissal. I have reached this conclusion on the basis that each of the 5 salons owned by Mr Kmaid would be associated entities within the meaning of s.50AAA of the Corporations Act 2001 and given that the Respondent concedes that it has 8 employees it is reasonable to presume that the other 4 salons would employ at least 7 additional employees between them. I therefore find that the Small Business Fair Dismissal Code does not apply in this matter.

[10] Neither the Applicant nor the Respondent contended that the dismissal was a case of a genuine redundancy and for the purpose of s.396 I decide that the dismissal was not a case of genuine redundancy.

[11] Before considering the merits of the application it is necessary that I comment on the conduct of the Respondent in this matter.

[12] Firstly, the Respondent filed with the Commission a Form F3 - Employer Response to Unfair Dismissal Application on 17 April 2014. During cross examination of the Applicant at the hearing on 6 August 2014 Mr Kmaid, the owner and representative of the Respondent, put to the Applicant matters raised in a statutory declaration that formed part of the Form F3. The Commission drew to the Applicant’s attention that the Applicant would have received a copy of this statutory declaration as part of the Form F3 that was served on her. The Applicant responded that she had never seen the Respondent’s Form F3 or the statutory declaration. Questions from the Commission to Mr Kmaid elicited the admission that Mr Kmaid never served a copy of the Form F3 on the Applicant.

[13] The Commission was obliged to adjourn the proceedings so as to enable the Applicant a proper opportunity to read, understand and reply to the matters raised in the Form F3 including the statutory declaration attached to the Form F3. Although the Applicant had filed submissions and witness statements in accordance with Directions issued by the Commission none of that material addressed issues raised in the Respondent’s Form F3 and procedural fairness required that the Applicant be given a proper opportunity to respond.

[14] Secondly, the Respondent did not comply with Directions issued by the Commission on 3 June 2014 that the Respondent lodge with the Commission and serve on the Applicant the Respondent’s outline of submissions and any witness statements and other documentary material by no later than Monday 14 July 2014.

[15] On 22 July 2014 the Commission’s Unfair Dismissal Team staff contacted Mr Kmaid in relation to his failure to file any material as directed. The file note of the call contains the following:

“R was of the belief that this matter settled in Conciliation; I advised the R that the matter has been with the arbitration team since May and that A has advised that the matter has not settled/she was not happy with the settlement reached. I further advised the R that he directed to file and serve submissions on 14/7 but those have not been received. R indicated he would file an extension but also should have the submissions in the next couple of days. I explained directions to R”.

[16] On Thursday 31 July 2014 after the file in this matter had been allocated to me my Associate emailed Mr Kmaid (cc’d to the Applicant) reminding Mr Kmaid of the hearing time and date and drawing to Mr Kmaid’s attention the fact that no submissions or witness statements had been received from the Respondent.

[17] On the same day Mr Kmaid responded by email to my Associate, but without copying the email to the Applicant, as follows:

“I am hoping to finalise my submission by Friday.

Alternatively, is it possible to reschedule hearing to a September date?”

[18] I directed my Associate to respond to Mr Kmaid on the same day (and cc’d to the Applicant) as follows:

“The hearing will not be adjourned. It will proceed as listed.”

[19] As it turned out Mr Kmaid did not finalise his submission by Friday 1 August 2014 and on Monday 4 August 2014 at 9.18pm Mr Kmaid emailed to the Unfair Dismissal team as follows:

“We have not responded earlier as we believed this matter was settled via a lengthy phone conciliation phone conference conference - see attached.
Now Kim Slater wants the case re-opened.

I offered to give Kim an (sic) a positive employment reference - yet not one salon employer has contacted me for a reference on her behalf. I will be attending the hearing with My Salon Manager Amanda Osborne.”

On the day, we would also like to present video footage on Kim Slater's poor work ethic & salon performance.”

In summary, Kim was not a competent Hairdresser who could do Colour Work in our Salon. She had almost 18 months to prove otherwise.”

[20] The email contained a number of attachments including an annotated version of the Applicant’s submission and witness statement.

[21] The email from Mr Kmaid was not copied to the Applicant.

[22] Mr Kmaid’s email was forwarded to my Chambers on the morning of 5 August 2014 and my Associate emailed Mr Kmaid at 9.18am acknowledging receipt of his email and reminding him of his obligation to serve a copy of the material on the Applicant.

[23] On 5 August I reviewed the file in this matter having particular regard to the claim from Mr Kmaid that he was of the view that the matter had been settled.

[24] A conciliation by telephone was conducted on 23 April 2014 and the parties agreed to a settlement. Terms of settlement were prepared by the conciliator and sent to the parties.

[25] On 15 May 2014 the Applicant sent a detailed email to the Commission raising a number of concerns as to the terms of the settlement and making it clear that the Applicant would not agree to terms as contained in the document prepared by the Commission. The email was not cc’d to the Respondent but the Commission forwarded the email to the Respondent.

[26] On 27 May 2014 the Applicant contacted the Commission by telephone and asked that her unfair dismissal application be re-opened. On 30 May 2014 the Respondent contacted the Commission to ask about the Applicant’s email of 15 May 2014. The file note of that conversation includes the following:

“TC from R who asked about the email that was forwarded onto him. I explained that the A was not happy with the settlement terms and has asked for the matter to be re-opened. He asked what he could do and I said he is welcome to object to the A's request provided he puts that in writing. He said he would put in writing an objection”.

[27] The Respondent did not make any objection and the Notice of Listing and Directions were issued on 3 June 2014.

[28] It is clear that the Respondent, and in particular Mr Kmaid, was aware, before the Directions were issued that the settlement had collapsed and the matter was going to proceed.

[29] It is clear , therefore, that when Mr Kmaid wrote to the Commission on 4 August 2014 saying:

“We have not responded earlier as we believed this matter was settled via a lengthy phone conciliation phone conference conference - see attached.

Now Kim Slater wants the case re-opened.”

he in fact knew, and had known since late May, that the Applicant had refused the settlement and that the Applicant wanted the matter to proceed.

[30] On 5 August 2014 I issued a Statement to the parties in the following terms:

“[1] This matter is currently listed for Arbitration Hearing tomorrow, 6 August 2014, commencing at 10.00am. The commencement time is amended to 2.00pm on 6 August 2014.

[2] The Hearing will not consider any underpayment of wages claims made by the Applicant, Ms Slater, because that is not within the jurisdiction of the Fair Work Commission.

[3] The Respondent did not comply with Directions issued and the Commission will not be granting an extension of time to the Respondent to file late submissions. This means that the material filed at 9.18pm on 4 August 2014 will not be admitted. In addition, any video footage which the Respondent has flagged it intends to show during the Hearing will not be admitted.

[4] Therefore the Hearing will proceed on the basis of the Applicant’s material only and the Respondent is limited to only addressing the Applicant’s material.”

[31] An amended Notice of Listing was issued at the same time.

[32] At the commencement of the proceedings on 6 August 2014 I addressed both parties in relation to the statement that I had issued on 5 August 2014 and I amended that statement in one significant aspect.

“PN7. The Commissioner: Now, my statement that I issued on 5 August, the last paragraph said:

PN8. Therefore the hearing will proceed on the basis of the applicant’s material only and the respondent is limited to only addressing the applicant’s material.

PN9. I realised only this morning, after again re-reading the file – I’ve been through this file several times. That’s incorrect in the sense that the respondent is entitled to rely upon the material filed with its Form F3, which includes the statutory declaration that was filed with the Form F3. Because a Form F3 is the initial response by the employer that was properly filed - and the material that’s attached to that has been properly filed. The fact that there was additional material that was filed late, it’s the additional material that cannot be considered and will not be considered. But I can’t deny the respondent the right to rely upon the material that he filed formally and properly with the Commission on 17 April 2014, which was part of the Form F3.

PN10. So in that sense, Mr Kmaid, it does mean that I am considering the material which includes hours (indistinct) and it includes the statutory declaration of Lara Ruffin. So that material will be considered. Much of that material has the same irrelevancy as much of the material filed by the applicant. And that is it relates to issues that go to the question as to whether or not correct payments have been made to the employee or whether or not there is an underpayment of wages – and that, I do not need to consider. So that’s by way of introduction to the way the matter will proceed.”

[33] With all of the foregoing in mind I now commence to deal with the merits of the application. Relevantly s.387 provides as follows:

“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.”

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) - S.387(a)

[34] The Applicant in her application identifies the reason for her dismissal as:

“was told by my manager Michelle Zammit that I was dismissed on the grounds that I wasn’t a team player”.

[35] The Respondent in its Form F3 identified 4 reasons for dismissal:

1. Incompetent and unsatisfactory hairdressing skills

2. Too many customer service complaints

3. Kim was not a team player

4. Not achieving any salon target or KPI’s.

[36] The Employment Separation Certificate issued to the Applicant by the Respondent and signed off by the Respondent’s Tax Accountant identifies the reason for separation as “Shortage of Work”.

[37] Even on the Respondent’s own limited material it is easy to conclude that the reason given on the Employment Separation Certificate was not the real reason for the dismissal.

[38] I will deal with each of the four reasons relied upon by the Respondent in its Form F3.

1. Incompetent and unsatisfactory hairdressing skills

[39] In the Form F3 the Respondent detailed this reason as follows:

“1) Incompetent & Unsatisfactory Hairdressing Skills
Kim had very weak hairdressing skills. She could not do colour consultations or complete colour services. She only wanted to cut; yet colour work represented 30% of our salon services. Kim also couldn't do chemical straightening or Hair Extensions.
Her overall skill level was equivalent to a 2nd year apprentice and she took too long to complete these tasks.”

[40] In cross examination by Mr Kmaid the Applicant gave evidence that she did do colour consultations and complete colour services and Mr Kmaid acknowledged that this was so when he put a question to the Applicant which was based on the Respondent own figures that the Applicant did colour work. 2

[41] The thrust of Mr Kmaid’s question to the Applicant was to explore the reason why the amount of colour work done by the Applicant was so much less than the colour work done by other hairdressers and the Applicant’s evidence was that colour clients were not booked to her by the person doing the bookings. 3
[42] The Respondent also advanced as a reason for the dismissal that the Applicant “couldn’t do chemical straightening”. This was put to the Applicant by Mr Kmaid and the Applicant’s evidence was:

“PN150. Mr Kmaid: How many chemical straightening services, where people’s hair that were thick and curly and they wanted it smooth and straightened, would you do?---Ms Slater: I’ve never done one because I’ve never had the opportunity. It has never been given to me and never been shown – well, it has been shown to me but it has never been given to me – a client to actually have a chemical straightening.

PN151. Okay. So we are part of a Matrix colour organisation and you’ve got a senior manager with more than 15 years experience. Did you ever ask to be shown how to do these services?---I’ve got shown. I got shown by the lady from Matrix.

PN152. So you did get shown?---But I’ve never had the opportunity of gotten given a client to actually take care of.”

[43] See also transcript at PN215.

[44] To the extent that the reason for the dismissal includes the reason that the Applicant could not do colour consultations or complete colour services or chemical straightening or hair extensions, the reason for dismissal is not valid as it is neither sound, defensible or well founded.

2. Too many customer service complaints

[45] In the Form F3 the Respondent detailed this reason as follows:

“2) Too Many Customer Service Complaints

Kim received the majority of our salon complaints; most times we tried to handle them in house. However, we had a few customers that escalated their complaints to our Head Office. For every customer complaint I received regarding Kim, there would have been another 10 unsatisfied customers who wouldn't bother to complain but would never come back to our salon. All the customer complaints were related to poor customer service or poor quality of work. We have records of each one if needed.”

[46] This reason cannot be a valid reason for dismissal.

[47] Mr Kmaid acknowledged in one question he put to the Applicant that she was competent at cutting hair and that he rarely got a complaint about the Applicant’s cutting. 4

[48] The statutory declaration of Lara Ruffin which was attached to the Form F3 contained the following:

“In the time I worked with Kim, I received many complaints from customers about Kim's lack of customer service and poor colour work. Many clients were not comfortable for her to do their colour work and in a salon that is almost 40% of the business.

On one particular occasion we had a very upset client who ended up leaving the salon crying because her hair was not the colour she wanted and not what she had explained to Kim. I sat down with Kim and unfortunately had to give her a written warning and asked her why she didn't at least consult with another staff member if she didn't feel confident in doing the clients colour. Kim gave me no explanation on her end. I also asked her why she didn't Know how to do a chemical straightening and she replied that in Johannesburg they didn't have the up to date products. I asked Kim if she needed to maybe go back to the basics of hairdressing so we could help her be a stronger hairdresser which she replied yes.”

[49] Ms Lara Ruffin was not made available for cross examination by the Applicant.

[50] The Applicant gave evidence that she had never received this written warning and relevantly the written warning that the Applicant admits to receiving in May 2013 was not in relation to customer complaints.

[51] Even if the Commission accepts the truthfulness of the untested evidence of Ms Lara Ruffin, it is clear that the Applicant was spoken to about one customer complaint. Even the statutory declaration of Ms Lara Ruffin goes no further than saying that complaints were received not that the complaints were ever put to the Applicant.

[52] I note the concession made by Mr Kmaid at PN171 that “every stylist gets some complaints”.

[53] As the Applicant put it in her final oral submissions:

“And the complaints, complaints from the clients that I never knew about.” 5

[54] In the present matter I could not be satisfied that this reason for dismissal was a valid reason, in the sense that it is neither sound, defensible nor well founded.

[55] The contention of the Respondent was that the Applicant was not doing hair straightening and not doing enough colour work and that the Applicant was mainly doing cutting. The Respondent concedes that the Respondent rarely received complaints about the Applicant’s cutting work. However the Respondent contends that the Applicant received the majority of the complaints and the number of complaints received was only 1/11th of the actual number of customers dissatisfied with the Applicant’s work.

[56] The contention of the Respondent is not plausible.

3. Kim was not a team player

[57] In the Form F3 the Respondent detailed this reason as follows:

“3) Kim was not a Team Player

Kim showed no initiative in the store. We have taped camera footage of her on at least 5 occasions simply 'sitting down' and doing nothing when she didn't have a client. This caused so much frustration amongst her managers Amanda and Michelle as they needed that extra help. Kim's lack of care attitude started to affect everyone in the salon negatively.

For example, when it came down to cleaning, Kim would regularly refuse to help in the cleaning of tint bowls, benches, & mirrors. Her response to her Manager Amanda was that it wasn't cause by her. Well, if Kim couldn't colour, then of course this would cause a lot of extra pressure on the other hairdressers so the least Kim could do was help them in way of cleaning. Furthermore, the staff were very surprised to learn that Kim got another part time job to supplement her income as a cleaner when she would blatantly would refuse any salon cleaning duties. Kim is currently still employed in this cleaning position.

3a) End Of Day Closing/ Cleaning
Kim would basically walk out of the store, often not letting any of the other staff members know and thereby avoiding all the usual end of day cleaning duties. This was captured on camera as well on a few occasions.”

[58] Evidence was led by the Applicant on this issue and the Applicant was cross examined by Mr Kmaid on this issue. What the evidence clearly discloses is that the Applicant was annoyed at having to clean up after other hairdressers had left a mess and the Respondent was annoyed with the Applicant for not cleaning up after other hairdressers made a mess.

[59] The Applicant in Exhibit A1 described her position as follows:

“4. Worked every Sunday and worked with Caterina Serpentino and we worked well together only she did not clean up after the day’s work which I found to be very unfair. I didn’t clean up after her as it was a mess made by her. Resulting in us both getting a written warning on the 21/5/2013 to that effect. Amanda Osborne assured me the same thing was written in both warning letters. However I noticed that mine had an extra line in my warning letter saying that I was not part of a team and I would not support other team members. I never signed the written warning. As I believed I was not in the wrong, Amanda said it would still be on record and I told her I knew that.

[60] The respective positions of the Applicant and the Respondent were made clear in the cross examination of the Applicant by Mr Kmaid:

“PN157. Mr Kmaid: No. So on a Sunday when one of your – in your witness statements, you felt that you did not have to clean in the salon because it wasn’t your colour work that – your bowls and your mess. Would you say that’s not working part of a team?---Ms Slater: I would say that I cleaned part of the team probably about a year before I got tired of doing it. Because Kat would stand outside and smoke. She would always have time to do that but never clean her bowls at the end of the day.

PN435. Then I've got the referred to your copies of your text messages that you submitted and I've got quite some concerns with these messages because one of them you say - what was the context of the message that was sent to you, "Kimmy, I will kill you" with a photo of colour, mess in buckets and everything like that. What happened there?---Well, I had left them from the Sunday because Kat was too lazy to clean them. She had taken - Amanda had taken the picture obviously and sent me the message.
PN438. So I look at that photo and I see a lot of work may have happened throughout, being a salon owner I wouldn't get that photo and see it's all colour work mess. So that only tells me that someone was run off their feet that day and that's why that mess was created. So how could she be lazy when she was the one doing all the colour work? Why would you not be a team player and help her get that done?---Maybe because I had done that so many times before and I was just getting tired of cleaning up after her while she stood outside smoking.

PN439. Yes, but if you've got a colleague, helping - - -?---I used to help her during the day.

PN440. Well, unfortunately you might have to help her every day. Isn't that what work is?---Yes.

PN441. Working as a team. You're doing the same thing every day. If your manager - in that message you haven't been kind enough to show any of the messages prior to that so was that the only message received?---That was the only message that really hit home because it was very threatening.
...
PN464. Can you recall saying messaging your salon manager, "You have to talk with other staff with cleaning up behind themselves as I'm sick of cleaning up after people that are flipping lazy. I didn't have any colours but have to clean their bowls. Not fair"?---And there was a picture there too.

PN465. Do you recall that?---Yes, that's actually what I want to do, mention.
...
PN471. MR KMAID: Yes. The first message was 23 October 2012 and it refers to a message saying a constant pattern of non-cleanliness in the salon caused by both Kat and Kim on the shifts that they worked. That was preceded for the shift of the salon manager for the week. The message that Kim refers to as in "I didn't do any colours. People are too flipping lazy" was dated 19 November, being "not fair." So this is a context where - and then did your salon manager in response to your you know a bit of upset that it's all come to you, did she not respond, "I've forwarded a similar message to the other staff member as well" - - -?---Yes.

PN472. - - - "letting her know." So it wasn't just you. It was a team, you know. But if you acknowledge one of your messages. You didn't do any of the colour work but you feel like you're being bullied or picked on for cleaning?---I think I was just irritated because she used to go outside and smoke for hours on end. In between her busy day of having colours all day that the way Kat operates.

PN473. There's a difference between hours and a quick couple of minutes smoke. I mean you did the same?---Yes, I did.

PN474. So you can't really say, "Well, I was upset she did it" but a lot of staff do it?---No, but she wasn't doing her job before she used to do that. That's what I used to get upset about.
...
PN502. Every week would Amanda not come into her shift and say, "Well, why is the salon a mess?" And you would say, "It's not my responsibility. I didn't do the colours"?---It was mostly on text.

PN503. So the context of you not cleaning led to one of your official written warnings?
---The only one of my written warnings.”

[61] The emails between the Applicant and her salon manager all relate to 2012, well over a year before the date of dismissal, and the warning given to the Applicant was in May 2013 about 8 months before the date of dismissal.

[62] The Applicant had, as part of Exhibit A1, introduced into evidence the warning letters issued by the Respondent to both the Applicant and the other employee, Ms Serpentino on 21 May 2013.

[63] The specific conduct alleged against Ms Serpentino was that she was unable to “Follow instructions set by management regarding the cleaning of the salon”.

[64] The specific allegation made against the Applicant was that she was unable to “Follow instructions set by management regarding the cleaning of the salon” and “Work as part of the team to support other team members”.

[65] It is very clear that the Respondent considered the Applicant’s failure to work as part of the team to be worthy of specific censure even though the two issues identified in the warning letter to the Applicant refer to the same conduct.

[66] Whilst the Respondent contended in its Form F3 that the Applicant had received a second warning in July 2013, the Applicant’s evidence was to strongly deny that any second warning had been given and the Respondent could not produce a signed copy of any second warning even when invited to by the Commission.

[67] The evidence in this matter on this reason for dismissal simply does not support a finding that this reason is a valid reason for dismissal.

[68] The conduct of the Applicant warranted a warning in May 2013 but nothing suggests that there was conduct warranting the dismissal of the Applicant in January 2014.

4. Not achieving any salon target or KPI’s.

[69] In the Form F3 the Respondent detailed this reason as follows:

“4) Not Achieving Any Salon Target or KPI's

We have salon targets for each staff member in our business. Kim's sales performance for the last 18 months barely covered her wage.

We have sales data for each month that shows how Kim did not meet any of our salon KPI's. How could we afford to keep Kim employed when there were many salon services she couldn't do & wasn't prepared to learn; this no doubt affected both her sales results and the performance of the business.”

[70] The Applicant gave evidence and was cross examined on this matter.

[71] The evidence before the Commission is that the KPI or targets for 3 staff members at the Respondent’s business at Victoria Gardens were clearly identified but that this information did not include the Applicant.

[72] The Applicant’s evidence was that she was never told that she had a personal target or set of KPI’s to meet, nor had she ever been spoken to about store targets. The Applicant was unshaken in her evidence and her evidence was very credible.

[73] To the extent that the Respondent relies upon this reason for the dismissal of the Applicant, it is not a valid reason. It is neither sound, nor defensible nor well founded.

[74] Having considered each of the four reasons advanced by the Respondent for the dismissal of the Applicant I find that none constitute a valid reason for the dismissal of the Applicant

Whether the person was notified of that reason - s.387(b)

[75] It is clear from the evidence of the Applicant, and this was not challenged by the Respondent, that the Applicant was given one reason for her dismissal namely not being a team player.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person - s.387(c)

[76] The Applicant was never given any opportunity to respond to the one reason for dismissal given to her at the time of dismissal. The Applicant was never given an opportunity to respond to the other 3 reasons for her dismissal as these reasons were not disclosed to the Applicant at the time of the dismissal.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal - s.387(d)

[77] This criteria is not relevant in the present matter as no opportunity was given to the Applicant to discuss the dismissal before it occurred.

If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal - s.387(e)

[78] The dismissal related to alleged unsatisfactory performance of the Applicant as the first, second and fourth reasons for the dismissal relied on by the Respondent related to the performance of the Applicant rather than her conduct and none of these three reasons for dismissal were the subject of warnings given to the Applicant.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal - s.387(f); 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 - s.397(g)

[79] In relation to each of these two criteria it is clear that both the size of the Respondent’s business and the absence of dedicated human resource management specialists or expertise would impact on the procedures followed by the Respondent in effecting the dismissal. However the impact would not be such as to weigh either in favour of or against a finding that the dismissal was fair.

Any other matters that the FWC considers relevant - s.387(h)

[80] The actions of the Respondent shortly after the Applicant was given a formal warning in May 2013 are relevant to a consideration of the fairness of the dismissal.

[81] As the Applicant’s evidence discloses, in June/July 2013 the Respondent unilaterally reduced the hours of work of the Applicant from 38 per week to 22 in one week and 15 in the next week. This action would appear to be linked to the warning given to the Applicant. In any event a unilateral decision by the Respondent to reduce the hours of work of the Applicant appears to be a very serious penalty being imposed on the Applicant. This forms part of the context in which the Applicant was subsequently dismissed.

[82] It is also relevant to consider the fact that the Respondent appears to have been significantly underpaying the Applicant and in circumstances where other employee hairdressers were not underpaid. The payment made by the Respondent, after the dismissal, to the Applicant for accrued annual leave was at the hourly rate of $19.07. However the evidence of the Applicant was that her ordinary hourly rate from May 2011 to about 4 months prior to the date of dismissal was $17.00. The Applicant contends that her ordinary hourly rate increased from $17 per hour to $19.07 per hour only about 4 months prior to the dismissal. The ordinary hourly rate for a qualified hairdresser under the terms of the Hair and Beauty Industry Award 2010 were as follows:

From 1 July 2010 to 30 June 2011 $17.463 per hour

From 1 July 2011 to 30 June 2012 $18.057 per hour

From 1 July 2012 to 30 June 2013 $18.581 per hour

From 1 July 2013 to date of dismissal (27 January 2014) $19.065 per hour.

Conclusion

[83] Having considered each of the relevant criteria under s.387 the Commission concludes that the dismissal of the Applicant was harsh, unjust and unreasonable.

Remedy

[84] The Applicant in her application sought a remedy of:

“1. Compensation for notice
2. Compensation for hours being cut after being in a 38hr week cut to 15 hr week to 22 hr week employment
3. Compensation for being underpaid according to the National Award wage weekly wage/weekend wage/overtime wage”.

[85] In her written submissions the Applicant sought an amount of $15,000 compensation for the unfair dismissal.

[86] The Applicant did not seek the remedy of reinstatement.

[87] The relevant statutory provisions are as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

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

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

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

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

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

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

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[88] The grant of any remedy is discretionary if the conditions precedent for the grant of a remedy are met. In this matter the requirements of s.390(1) and (2) have been met.

[89] The Commission is satisfied that it is appropriate to exercise its discretion in this matter.

[90] The Applicant does not seek the remedy of reinstatement and in all of the circumstances of this matter the Commission considers the remedy of reinstatement to be inappropriate.

[91] The Commission considers that the remedy of compensation is appropriate. Compensation is to be calculated having regard to the requirements of s.392.

The effect of the order on the viability of the employer’s enterprise - 392(2)(a)

[92] Nothing was put to the Commission which would suggest that an order for the payment of compensation would have any effect on the viability of the Respondents enterprise.

The length of the person’s service with the employer - 392(2)(b)

[93] The Applicant has worked for the Respondent since July 2012 and it is not clear whether the Applicant’s employment at Hairhouse Warehouse Spencer St was in a business owned by Mr Kmaid or not. In the present matter the length of service of the Applicant with the Respondent is neither so short nor so long as to have any impact on the amount of compensation that should be considered.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed - 392(2)(c)

[94] If the Applicant had not been dismissed on 27 January 2014 I do not consider that she would have remained in employment for even a week. Nor do I consider that the Applicant would have received anything more than an additional weeks pay from the Respondent if the Applicant had not been dismissed on 27 January 2014. It is certainly clear from the position adopted by the Respondent in these proceedings that the Respondent did not consider the Applicant to be a worker that it wanted to keep.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal - 392(2)(d)

[95] The Applicant has made reasonable efforts to mitigate her loss but has not been able to find work as a hairdresser.

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 - 392(2)(e)

The amount of any income reasonably likely to be so earned by the person earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation - 392(2)(f)

[96] The Applicant did not identify the amount of remuneration she earned from a cleaning job which the Applicant commenced when the Respondent cut her hours of work. However the Applicant identified that the cleaning job was ongoing but “is only 1 or 2 times a week”.

[97] It would appear that the amount of 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 earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation is not large.

[98] In any event as the Applicant had this cleaning job before the date of dismissal any amounts earnt by the Applicant through the continuation of this cleaning job should not lessen the amount of compensation to be determined.

Any other matter that the FWC considers relevant - 392(2)(g)

[99] There are no other matters which the Commission considers are relevant.

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. - s.392(3)

[100] In the present matter I consider it appropriate to apply a reduction to any amount of compensation calculated under s.392(2) because of the misconduct of the Applicant in her unwillingness to clean up after other hairdressers when specifically told to do so.

Conclusion as to Compensation

[101] The guidelines for the proper application of s.392 were considered (albeit in relation to earlier legislation) in Sprigg v Paul’s Licensed Festival Supermarket 6.

[102] A Full Bench of the AIRC in Smith v Moore Paragon Australia Ltd 7, commented on the Sprigg guidelines and offered the following caution:

“[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission²⁸ are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers "appropriate" having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion "if the Commission considers it appropriate in all the circumstances of the case" to "make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement" subject to the Commission having regard "to all the circumstances of the case including" the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap' provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard "to all the circumstances of the case" including the matters listed in s.170CH(7) and subject to the `cap' provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”

[103] The present matter is one where the application of the Sprigg guidelines would yield an amount that would be clearly inadequate.

[104] Whilst I am obliged to consider the relevant criteria set out in s.392(a) to (g) in determining an amount of compensation, I am also obliged to take into account all the circumstances of the case.

[105] In the present matter I consider that an amount of compensation of $1125.00 is appropriate. This amount reflects a consideration of all of the circumstances of the case including the criteria in s.392(a) to (g) and a reduction for misconduct under s.392(3) and does not include any amount prohibited by s.392(4). Additionally the amount does not include any component which reflects any of the claims made by the Applicant in relation to underpayment of wages or notice or leave entitlements.

[106] The amount of compensation is below the compensation cap set by s.392(5) and (6).

[107] Nothing was put to the Commission in relation to s.393.

[108] An order will be issued with this decision requiring the payment of the compensation within 14 days of the date of the decision and order.

COMMISSIONER

Appearances:

K. Slater the Applicant.

J. Kmaid for the Respondent.

Hearing details:

2014.

Melbourne:

August 6.

September 1.

 1   Transcript of proceedings PN701- PN708.

 2   Ibid at PN108 and PN161.

 3   Ibid at PN95 and PN108 - PN110 and PN159.

 4   Ibid at PN171.

 5   Ibid at PN648.

 6 (1998) 88 IR 21.

 7   PR942856.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR555528>