Kim Winning v Wins Australia Pty Ltd
[2021] FWC 6403
•19 NOVEMBER 2021
| [2021] FWC 6403 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 – Application for unfair dismissal remedy
Kim Winning
v
Wins Australia Pty Ltd
(U2021/6256)
COMMISSIONER MATHESON | SYDNEY, 19 NOVEMBER 2021 |
Application for relief from unfair dismissal.
[1] On 16 July 2021, Ms Kim Winning (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that she had been unfairly dismissed from her employment with Wins Australia Pty Ltd (Respondent). The Applicant seeks financial compensation.
When can the Commission order a remedy for unfair dismissal?
[2] Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and
(b) the Applicant has been unfairly dismissed.
[3] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.
When is a person protected from unfair dismissal?
[4] Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(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.
When has a person been unfairly dismissed?
[5] Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.
Background
[6] The uncontested factual background to the matter is as follows:
• The Applicant commenced employment with the Respondent on 29 October 2019 on a full time basis.
• The Applicant was dismissed by the Respondent and notified of the dismissal on 30 June 2021.
[7] By way of summary, in her application, the Applicant submitted that the dismissal is unfair on the basis that there was no valid reason for the dismissal. The Applicant does not agree with the allegations set out in the termination letter she says was provided to her (Termination Letter). The Applicant also submitted that she was not afforded procedural fairness and had not received any warnings in relation to her conduct or capacity.
[8] By way of summary, in its response, the Respondent submitted that the Applicant’s dismissal was fair and it sets out a range of reasons for the dismissal including misconduct, refusing to follow instructions, being rude to customers and colleagues, harassment, damaging the reputation of the company and refusing to follow instructions and the code of conduct.
[9] The matter was listed for case management conference on 12 August 2021 (Conference).
[10] There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
[11] After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter, pursuant to s.399 of the FW Act. Accordingly, the matter was listed for hearing on 23 and 24 September 2021 (Hearing).
Permission to appear
[12] For the purposes of the Hearing, the Applicant sought to be represented before the Commission by a paid agent, Mr Dircks. The Respondent sought to be represented before the Commission by Mr Selikas, who is not a lawyer or paid agent.
[13] Relevantly, s.596(1) of the FW Act provides that a party may be represented in a matter before the Commission by a lawyer or paid agent only with the permission of the Commission.
[14] Section 596(2) provides that the Commission may grant permission for a person to be represented by a lawyer or paid agent in a matter before the Commission only if:
(a) it would enable the matter to be deal with more efficiently, taking into account the complexity of the matter; or
(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.
[15] The decision to grant permission is not merely a procedural step but one which requires consideration in accordance with s.596 of the FW Act. 1 The decision to grant permission is a two-step process. First, it must be determined if one of the requirements in s.596(2) have been met. Secondly, if the requirement has been met, it is a discretionary decision as to whether permission is granted.2
[16] On the question of representation, the Applicant submitted, relevant to s.596(2)(a) of the FW Act, that:
• the matter is complex, including as a result of a potential jurisdictional objection;
• the Respondent has added to potential complexity and uncertainty by providing a number of different reasons for dismissal and by not providing any evidence before the Hearing, adding to the uncertainty as to how the case will be run; and
• it would assist the Commission to deal with the matter more efficiently if the Applicant were to be represented.
[17] The Applicant submitted, relevant to s.596(2)(b) of the FW Act, that:
• the Applicant would not in all fairness be able to represent herself adequately in the proceedings; and
• there is no basis to expect that the Applicant would be able to adequately represent herself in the matter in cross-examining witnesses or making submissions on the basis of evidence adduced in the event that the Respondent did seek to provide last minute evidence or submissions.
[18] The Applicant submitted, relevant to s.596(2)(c) of the FW Act, that:
• the matter is one where the Applicant expects it will be highly desirable for the Respondent to be permitted representation if it so seeks; and
• submissions have been provided by Mr Selikas, who the Applicant understands is or was acting as an agent for the Respondent.
[19] The Respondent sought to be represented by Mr Selikas who confirmed he had authority to make representations on the Respondent’s behalf. Ms Bell, an employee of the Respondent, also appeared with Mr Selikas. The Applicant did not object to Mr Selikas representing the Respondent, expressing the view that the matter would proceed more efficiently if Mr Selikas appeared as the Respondent’s representative.
[20] Having considered the submissions and position of the parties, I determined that allowing the Applicant to be represented by a lawyer or paid agent would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.
[21] I have therefore decided to exercise my discretion to grant permission for the Applicant to be represented.
[22] Accordingly, at the Hearing, the Applicant was represented by Mr Dircks and the Respondent was represented by Mr Selikas.
Witnesses
[23] The Applicant gave evidence on her own behalf, filing a witness statement and appearing as a witness at the Hearing. By way of summary, the Applicant’s evidence was that: 3
• Between 29 October 2019 and 30 June 2021, she was employed on a full time basis.
• On 20 June 2021, at around 9.00am, the Respondent’s office manager, Ms Bell, handed her the Termination Letter.
• Following receipt of the Termination Letter, she telephoned the Respondent’s Managing Director, Mr Mohamed, and asked “Why did you do this to me?”. The Applicant’s evidence was that Mr Mohamed “said very little and just hung up”.
• After receiving the Termination Letter, she continued to work until 2.30pm that day, completing outstanding tasks and arranging handover.
• On 13 August 2021, the Respondent provided her with a letter that is significantly different to the Termination Letter she received. The Applicant alleged this letter was ‘fabricated’.
• The Applicant did not have disagreements with customers and, as far as she is aware, did not receive bad Google reviews and did not demonstrate an unacceptable pattern of behaviour.
• The Applicant never received any warnings in relation to her conduct or capacity. The Applicant did not have any conversations with Mr Mohamed or anyone else about her behaviour toward staff or customers.
• The Applicant was never given a code of conduct document and had never seen such a document.
• The Applicant was not notified that her employment was at risk and she had no opportunity to respond before the decision to terminate her was made.
• The Applicant was paid one week’s pay in lieu of notice in addition to payment of outstanding annual leave.
[24] The Respondent did not file any witness statements prior to the Hearing. However, with its ‘Form F3 – Employer response to unfair dismissal application’ (Form F3), it did file correspondence from Ms Bell dated 2 August 2021 and correspondence from Mr Joshua Croese dated 2 August 2021. During the course of the proceedings, it became apparent that the Respondent sought to rely on that correspondence, referring to them as ‘statements’.
[25] Considering that the Respondent was not represented by a lawyer or paid agent and in the interests of a ‘fair go all round’, 4 at the Hearing I provided the opportunity for the Respondent to indicate whether it intended to bring any witnesses.
[26] The Applicant objected to the Respondent bringing witnesses on the day of the Hearing on the basis that:
• the Respondent had not indicated that it would be calling any witnesses and had been given ample opportunity to do so;
• the directions issued by the Commission were very clear regarding what is required in a witness statement and that the correspondence filed was not in the form of witness statements; and
• it would be unsatisfactory for the Applicant to give evidence without having an indication as to what the other witnesses would say.
[27] The Respondent indicated that the evidence of Ms Bell and Mr Croese would relate to the matters raised in the correspondence of Ms Bell and Mr Croese that had been filed with the Respondent’s Form F3.
[28] In the interests of a ‘fair go all round’, considering that the Respondent was not represented by a lawyer or paid agent and that the Applicant had the opportunity to see the content of the correspondence of Ms Bell and Mr Croese prior to the Hearing, I permitted the Respondent to bring Ms Bell and Mr Croese as witnesses, on the basis that their evidence would relate to the matters raised in the correspondence that had been filed with the Respondent’s Form F3.
[29] As such, the following witnesses gave evidence on behalf of the Respondent:
• Ms Sharna Bell, Office Manager of the Respondent; and
• Mr Joshua Croese, employee of the Respondent.
[30] The correspondence of Ms Bell, dated 2 August 2021, became her witness statement for the purposes of the proceedings. In that correspondence, Ms Bell states that the Applicant was “handed earlier warnings, both verbal and in writing and was clearly advised that if she is to receive another warning she will be immediately dismissed”.
[31] Ms Bell gave evidence at the hearing that:
• Ms Bell commenced with the Respondent in an administrative and customer service role at the end of March 2021 and was given the role of Office Manager in May 2021.
• On multiple occasions, she needed to “pull up” the Applicant in relation to behaviour toward customers and other employees in the office.
• Some of the technicians working in the business had told her they did not want to call into the office or deal with the Applicant because of her “rudeness”.
• A negative Google Review from a Jennifer Atkins was received by the Respondent before she had commenced employment with the Respondent and that she had not spoken to Jennifer Atkins about that review.
• A negative Google Review from Tara Hamilton was received by the Respondent and that she had not spoken to Tara Hamilton about that review.
• Ms Bell had physically handed the Applicant an employee warning notice on 10 May 2021 and that this document was the document entitled “Employee Warning Notice” that had been filed with the Respondent’s Form F3 (Employee Warning Notice). Ms Bell indicated this was the only time she had provided the Applicant with a written document of this nature.
• In handing the Applicant the Employee Warning Notice, she said “this is for you Kim. This is in relation to Faye and you being rude to the employees” and did not go into any further detail.
• When she provided the Employee Warning Notice to the Applicant, the Applicant did not say anything, shook her head and put the Employee Warning Notice down.
• Ms Bell gave the Applicant her first verbal warning on 3 May 2021. However, Ms Bell also gave conflicting evidence at the Hearing that the verbal warning was given to the Applicant by Mr Mohamed in relation to negative Google Reviews.
• Ms Bell discussed the decision to dismiss the Applicant with the Managing Director, Mr Mohamed, on 10 May 2021 after she had given the Applicant the Employee Warning Notice.
• The decision to dismiss the Applicant was a joint decision between herself and Mr Mohamed.
• Ms Bell made the decision to dismiss the Applicant because of “serious harassment” of another employee, Faye. Ms Bell said that she witnessed the Applicant’s conduct toward Faye, made Mr Mohamed aware of this and, as a result, Mr Mohamed asked her to give the Applicant an Employee Warning Notice.
• Having considered the Applicant’s conduct taken together with the negative Google Reviews and the Applicant’s interactions with technicians working in the business, Ms Bell communicated to Mr Mohamed that she did not feel the Respondent needed someone like the Applicant in the business.
• Ms Bell did not give the Applicant feedback on things she needed to do to improve her conduct because “nobody could say anything to her about it” and it was difficult to speak to the Applicant about such matters.
[32] During the Hearing, Mr Croese gave evidence that:
• The Applicant had said to him “stop using the women’s toilets” and that she had said this to him before. Mr Croese believed that one of the technicians had used the women’s toilets as he had observed footprints on the floor of the toilet. However, Mr Croese explained to the Applicant that he had not used the women’s toilets. Mr Croese said that the Applicant responded “don’t worry about it” and that he “left it at that”.
• The Applicant swore in relation to one of the cleaners, stating the words “that fucking bitch”. The correspondence of Mr Croese dated 2 August 2021 states that he advised her not to say this and the next time she did it would result in an official warning. During the Hearing, Mr Croese’s evidence was that:
• This incident occurred in the outdoor smoking area where only he and the Applicant were present at the time. The cleaner was not present.
• The Applicant’s swearing was not directed toward the cleaner or anyone and that the Applicant “was just saying the words out loud”.
• When the Applicant commenced working for the Respondent and during her first year of employment, he observed her behaviour to be professional however by the end of her employment her behaviour had changed. Mr Croese said that her “tone” with customers had changed from “Hi, how are you?” to “What? What did you say? Can you repeat that?”. The correspondence of Mr Croese dated 2 August 2021 states that he heard the Applicant “on multiple occasions talk to customers via telephone in an angry tone” and that he would “advise” the Applicant about “customer service etiquette”. During the Hearing, Mr Croese gave evidence that sometimes the Applicant would ask him to speak to customers directly to resolve their concerns and sometimes customers would call back and ask to speak to a person other than the Applicant. Mr Croese was unable to provide details of specific customers or circumstances.
• Mr Croese had given the Applicant warnings “over a dozen times” however he could not remember specific times, dates and situations when he had done this as it “was not his job”. Mr Croese said he would “pull up all staff” and “try to help staff” in a “positive way” but is not “there to reprimand anyone” as it is not his job to do so. Under cross-examination, the Applicant’s representative put to Mr Croese that the statement in his correspondence dated 2 August 2021 that he had personally given the Applicant multiple warnings was untrue. In response to this Mr Croese stated “when I say a verbal warning to Kim, I’ve said to Kim I’ve heard her speaking to customers and I’ve said ‘Kim look, you can’t speak to customers like this… you need to speak like this for example, even if they’re right or wrong you need to carry on this level of etiquette towards a customer’”. Mr Croese provided an example of what he would say to the Applicant, with his evidence being that he would say to Applicant that she would need to lower “her tone”, that the “customer is always right” and that she needed to be polite. Mr Croese’s evidence was that this is what he meant by “verbal warnings”.
[33] For completeness, I note that the Respondent filed with its Form F3 correspondence dated 12 May 2021 which appears to be a resignation letter from a “Faye. H” alleging harassment and bullying by the Applicant and another employee. However, “Faye. H” did not appear as a witness to give evidence in the proceedings.
The termination letter
[34] The Applicant’s materials included the Termination Letter dated 30 June 2021 from Mr Mohamed, which stated:
“We would like to thank you for your work that you have put into your position here at Kevin Joyce Pest Management during the years.
Unfortunately, due to some disagreements and mannerism against customers, technicians and google reviews we have received, I have decided to terminate your employment with us here at Kevin Joyce Pest Management effective immediately as of today.
I will give you a week’s pay in lieu.
I will be happy to assist as a reference for future job opportunities.
Thank you again and I wish you the best of luck in future.”
[35] The Applicant’s evidence is that she received a different termination letter from the Respondent on 13 August 2021, which was dated 30 June 2021 and appeared to be from Mr Mohamed (Second Termination Letter). The Applicant submitted the content of the Second Termination Letter was as follows:
“Dear Kim Winning,
We would like to thank you for your work that you have put into your position here at Kevin Joyce Pest Management during the years.
You have received multiple warnings during your employment at Kevin Joyce Pest Management in conjunction with our conversations about your behaviour towards staff and customers.
We rely on employees who have respect for their colleagues in addition to the customers being the first point of contact.
You have demonstrated unacceptable patterns of behaviour therefore we can no longer continue your employment.
The decision is effective immediately.
You have been paid 1 weeks in advanced, remaining balance of your annual leave as per attached Payslip.”
[36] The Applicant’s evidence was that the Second Termination Letter was a fabrication. 5
[37] Under cross-examination, Ms Bell’s evidence was that the Second Termination Letter was prepared by Mr Mohamed and he explained to her that he “wanted to make sure she got it” and that the Applicant “knew what she was terminated for”. Ms Bell acknowledged this was different to the First Termination Letter and was provided to the Applicant following the Conference with the Commission.
[38] However, I note that the Respondent did not file the Second Termination Letter, or indeed any letter of termination, with its materials and did not seek to rely on either letter in making its submissions.
The Employee Warning Notice
[39] The Employee Warning Notice filed with the Respondent’s Form F3 has the following characteristics:
• It states the name of the Applicant.
• It is dated 10 May 2021.
• It lists a range of options under the heading “Type of Violation”. Two types are selected being “failure to follow instructions” and “rudeness to employees or customers”.
• It indicates that a previous oral warning had been given on 3 May 2021.
• It lists a range of disciplinary options under the heading “Action(s) to be taken”. “Warning” is selected.
• It indicates Ms Bell as the supervisor who issued the warning.
[40] The Employee Warning Notice does not provide any further detail in relation to the selected “Types of Violation”.
The Google Reviews
[41] Screenshots of two negative Google reviews were filed with the Respondent’s Form F3.
[42] One of these is a Google review from a Jennifer Atkins which gives a one star rating, indicates that it was provided “8 months ago” and provides a written review (First Google Review).
[43] The second of these is a Google review from a Tara Hamilton which gives a one star rating, indicates that it was provided “2 months ago” and provides a written review (Second Google Review).
[44] Filed with each of these reviews is a screenshot from the Respondent’s system setting out client details and job details.
Submissions
[45] The Applicant filed an outline of submissions in the Commission on 25 August 2021.
[46] The Commission’s directions of 12 August 2021 directed the Respondent to file with the Commission and serve on the Applicant the Respondent’s outline of argument, statements of evidence and document list by no later than 4.00pm on 9 September 2021. The Respondent did not file materials in accordance with the directions and on, 13 September 2021, the Commission wrote to the Respondent seeking clarification as to whether it intended to file materials and that if it did, advised the Respondent that it would need to request an extension of time, outlining the reasons for failure to comply with the directions.
[47] On 13 September 2021, the Respondent sought an extension of time until 14 September 2021. On 13 September 2021, I issued amended directions, granting the extension. On 14 September 2021, the Respondent filed correspondence labelled ‘Without Prejudice’. No other materials were filed with this correspondence.
[48] Further written submissions were filed by the Applicant on 20 September 2021. In those submissions the Applicant noted that the amended directions required the Applicant to:
• provide any submissions and materials in reply to the Respondent’s outline of argument as to whether it is a small business employer and whether the dismissal was consistent with the Small Business Fair Dismissal Code (Code); and
• provide a response in relation to the Respondent’s case as to whether the dismissal was harsh, unjust or unreasonable.
[49] The Applicant noted that the Respondent has generally failed to comply with the directions and amended directions. Notwithstanding this, in the further written submissions the Applicant:
• addressed the question of whether the dismissal was consistent with the Code and made submissions;
• submitted that there is no evidence provided by the Respondent on the key issues arising under s.387 of the FW Act; and
• addressed the question of appropriate remedy.
[50] While the form of the Respondent’s communications to the Commission and non-compliance with the Commission’s directions have created some challenges for these proceedings, the Respondent has filed some materials in response to the application and made oral submissions during the Hearing. Noting that the Respondent is not represented by a lawyer or paid agent and in the interests of a ‘fair go all round’, I have considered those materials and submissions and attached the weight to them as I have considered appropriate.
Has the Applicant been dismissed?
[51] A threshold issue to determine is whether the Applicant has been dismissed from their employment.
[52] Section 386(1) of the FW Act provides that the Applicant has been dismissed if:
(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or
(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.
[53] Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
[54] There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent.
[55] I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the FW Act.
Initial matters
[56] Under s.396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
Section 396(a) - Was the application made within the period required?
[57] Section 394(2) requires an application to be made within 21 days after the dismissal took effect.
[58] It is not disputed and I find that the Applicant was dismissed from her employment on 30 June 2021 and made the application on 16 July 2021. I am therefore satisfied that the application was made within the period required in s.394(2).
Section 396(b) - Was the Applicant protected from unfair dismissal at the time of dismissal?
[59] I have set out above when a person is protected from unfair dismissal.
Minimum employment period
[60] Section 383 of the FW Act provides that if the employer is not a small business employer, the minimum employment period is six months or, if the employer is a small business employer, one year.
[61] The Applicant’s evidence was that she was employed on a full time basis from 29 October 2019 until she was dismissed on 30 June 2021. It was not disputed and I am satisfied that at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period, regardless as to whether that period is six months or one year.
Annual rate of earnings
[62] Ms Winnings’ evidence was that she was paid a weekly wage of $1,100.00 per week and that her salary at the time of dismissal was $57,200.00. 6 The Respondent submitted that the Applicant earned $903.00 per week.7 A pay slip filed by the Applicant for the pay period between 24 June 2021 and 30 June 2021 indicates that the Applicant was paid an amount of $2,200.00 for 80 ordinary hours. I find that, at the time of dismissal, the sum of the Applicant’s annual rate of earnings was $57,200.00 and was less than the high income threshold, which, for a dismissal taking effect on or after 1 July 2020, is $153,600.00.
[63] I am therefore satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal.
Section 396(c) - Was the dismissal consistent with the Small Business Fair Dismissal Code?
[64] Section 388 of the FW Act provides that a person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
[65] The Respondent’s Form F3 indicated that the Respondent employed nine full time employees at the time the Applicant was dismissed. At the conference on 12 August 2021, (Conference) the Respondent indicated that at the time of the Applicant’s dismissal it employed four full time employees, no casuals and did not have any associated entities.
[66] The Respondent indicated it was a small business however did not raise a jurisdictional objection that it complied with the Small Business Fair Dismissal Code (Code). While no jurisdictional objection was made, I am obliged to consider whether the Commission has the requisite jurisdiction and this includes consideration of whether the dismissal was consistent with the Code.
[67] During the Conference, it became apparent that the Respondent was not aware of the Code. To assist the parties, my Chambers included links to resources to assist the parties in preparing submissions including information in relation to hearings and conferences at the Commission and the Unfair Dismissals Benchbook.
[68] Notwithstanding this, the Respondent filed limited materials ahead of the Hearing addressing the question of whether it was a small business employer as defined in s.23 of the FW Act. Furthermore, it did not make submissions addressing the question of whether it complied with the Code ahead of the Hearing.
[69] On 20 September 2021, the Applicant filed further submissions addressing the Code. By way of summary the Applicant submitted:
• The Respondent failed to provide any evidence that it is a small business employer or that there was compliance with the Code.
• No jurisdictional objection was made.
• The Form F3 filed by the Respondent refers to it having “9 full-time employees” however the test for whether a business is a small business employer is not confined to full-time employees and can include part-time, casual employees, persons categorised as contractors who may be found to be employees at law. It may also include employees of related entities (if any).
• Unless the condition is satisfied that the Respondent is a small business employer, it is impossible to determine whether the Code applies or not.
[70] At the Hearing, the Respondent indicated that it had further evidence to show that it was a small business employer. The Applicant objected to the bringing of further evidence at this late stage in the proceedings. Notwithstanding this, I provided the Respondent with the further opportunity to file the material it considered relevant to the question of whether it was a small business employer. On the evening of 23 September 2021, following the first day of the Hearing, the Respondent filed a document entitled ‘Payroll Employee Summary’. The Payroll Employee Summary referred to the period between 24 June 2021 and 30 June 2021 and lists the names of ten employees, including the Applicant.
[71] The Payroll Employee Summary also includes what appears to be the earnings for each of the employees listed and I note that the net pay of the Applicant referred to in this document for the period between 24 June 2021 and 30 June 2021 corresponds with the amount on the pay slip for this period filed by the Applicant.
[72] The Applicant submitted that this information should not be taken into consideration and that a payroll record as to who got paid in a particular week is not definitive of the number of employees employed at that time. The Applicant’s evidence at the hearing was that during her tenure she saw around 35 employees of the Respondent, that these employees would come and go and that at any one time she understood that there were around 15 employees employed by the Applicant, including one casual.
[73] The Applicant’s further submissions of 20 September 2021 also address the issue of compliance with the Code. The Applicant submitted:
• The Commission cannot be satisfied the “summary dismissal” conditions of the Code were met. The Respondent has failed to provide any evidence to establish a valid reason for the dismissal.
• The “Other dismissal” provisions of the Code are not complied with if the reason is not put to the employee before dismissal and this did not occur.
• The requirement then continues that the employer must provide the employee with a warning and a reasonable chance to rectify the situation. Neither condition was met on the evidence.
• The provision requires the ability for the employee to have another person present to assist in discussions where dismissal is possible. This implies that discussions should take place. There is non-compliance in that there were no discussions and no ability for the Applicant to have a support person.
• Under all counts of the substantive and procedural requirements in the “other dismissal” section of the Code, the employer fails.
[74] The materials filed by the Respondent regarding the number of employees it employed at the time of the dismissal are inconsistent and this brings into question to the credibility of this evidence. If the Applicant’s evidence is accepted, this may mean that the Respondent was not a small business employer, as defined in s.23 of the FW Act, at the time of her dismissal. However even if the Respondent was a small business employer, for the reasons below and set out further in this decision, I find that the Code was not complied with.
[75] The Code states:
“Summary Dismissal
It is fair to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.”
[76] The Applicant was paid one week in lieu of notice upon her dismissal and the materials filed by the Respondent do not suggest that the termination was carried out as a summary dismissal on the grounds of serious misconduct. Notwithstanding this, on the evidence before me, I am not satisfied that the Applicant engaged in serious misconduct justifying summary dismissal. As explained later in this decision, I find there was no valid reason for the dismissal and that the Applicant was not warned that she was at risk of being dismissed or that there was a need for improvement in her work performance or behaviour. On the evidence before me, I am not satisfied that the Applicant was given an opportunity to respond or a reasonable chance to rectify any perceived issues.
Section 396(d) - Was the dismissal a case of genuine redundancy?
[77] Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:
(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
[78] An Employment Separation Certificate was filed with the Applicant’s materials citing ‘shortage of work’ as the reason for dismissal. The materials filed by the Applicant suggest that multiple reasons have been provided as the reason for the dismissal. These include misconduct, refusing to follow instructions, being rude to customers and colleagues, harassment, damaging the reputation of the company and refusing to follow instructions and the code of conduct. The First Termination Letter states “Unfortunately, due to some disagreements and mannerism against customers, technicians and google reviews we have received, I have decided to terminate your employment”.
[79] At the Hearing, the Respondent confirmed that the dismissal was not related to redundancy.
[80] I find that the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.
[81] I am therefore satisfied that the dismissal was not a case of genuine redundancy.
[82] Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.
Was the dismissal harsh, unjust or unreasonable?
[83] Section 387 of the FW Act provides that, in considering whether it is satisfied that 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); 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.
[84] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me. 8
[85] I set out my consideration of each below.
Section 387(a) - Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
[86] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 9 and should not be “capricious, fanciful, spiteful or prejudiced.”10 However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.11
[87] Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.12 “The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.” 13
Submissions
[88] By way of summary, the Applicant submitted that there was no valid reason for the dismissal related to the Applicant’s capacity or conduct. In particular, the Applicant submitted: 14
• The apparent reason for the dismissal in the First Termination Letter is not a valid reason for dismissal, in that it is not sound, well-founded and defensible. 15
• There were no known disagreements or ‘mannerism’ against ‘customer, technicians and Google reviews’. In relation to the First Google Review, it was not the Applicant who spoke to the customer. In relation to the Second Google Review, the Applicant did speak to the customer however the customer was unhappy that she could not get immediate service which was a matter outside the Applicant’s control. The Applicant also submitted that this incident occurred early in 2021 and that the “incident was hopelessly out of date at the time of the dismissal”.
• The reason stated in the Employment Separation Certificate filed with the Applicant’s materials, being ‘shortage of work’, is not a true reason.
• The reasons stated in the Second Termination Letter are not valid because there were no warnings or conversations about poor behaviour and that the “allusions to behaviour are hopelessly vague and non-specific”.
• The reasons for dismissal are “capricious, fanciful, spiteful and prejudiced”.
• It is incumbent on the party that seeks to show a valid reason for the termination to establish this validity. 16
[89] At the Hearing, the Applicant submitted:
• the employer is required to establish there was a valid reason for the dismissal;
• there was no evidence provide by the Respondent regarding whether there is a valid reason for the dismissal; and
• as such, it cannot be established that there was a valid reason for the dismissal related to the Applicant’s capacity or conduct pursuant to s.387(a) of the FW Act.
[90] At the Hearing, the Respondent submitted that the dismissal of the Applicant was a result of the Applicant’s conduct and that there were no concerns in relation to her performance. The Respondent emphasised that the Applicant’s conduct in relation to customers formed the basis of her reason for dismissal. In particular, the Respondent submitted:
• There was evidence relevant to the question of whether there was a valid reason for the dismissal and directed me to the First Google Review and Second Google review filed with the Respondent’s Form F3, which it submits relate to jobs booked by the Applicant. Job details were also provided with the Google reviews which the Respondent submitted establishes a link between the Google reviews and the Applicant.
• There was a code of conduct that the Applicant breached. A copy of a code of conduct was filed with the Respondent’s Form F3.
• It has been in operation for around 40 years and has an established brand and reputation. It submitted that negative external reviews, such as Google reviews, can be very damaging to the brand and profitability of the business, particularly considering that the pest management industry is highly competitive and has been negatively impacted by COVID-19.
• The Respondent also submitted that the Applicant’s dismissal was not an isolated, “one off” case and another employee had been dismissed in similar circumstances. The Respondent submitted that this demonstrates the decision to dismiss the Applicant was not targeted.
Evidence
[91] As noted above, the Respondent’s Form F3 sets out a range of reasons for the Applicant’s dismissal including misconduct, refusing to follow instructions, being rude to customers and colleagues, harassment, damaging the reputation of the company and refusing to follow instructions and the code of conduct. No specific details are provided in relation to the conduct described.
[92] The First Termination Letter states “Unfortunately, due to some disagreements and mannerism against customers, technicians and google reviews we have received, I have decided to terminate your employment”. The content of the Second Termination Letter referred to in the Applicant’s witness statement refers to conduct towards customers and employees and states that the Respondent could no longer continue the Applicant’s employment as she had “demonstrated unacceptable patterns of behaviour”. No specific details are provided in relation to the conduct described. At the Hearing, Ms Bell have evidence that having considered the Applicant’s conduct taken together with the negative Google Reviews and the Applicant’s interactions with technicians working in the business, Ms Bell communicated to Mr Mohamed that she did not feel the Respondent needed someone like the Applicant in the business.
[93] At the Hearing, Ms Bell also gave evidence that she made the decision to dismiss the Applicant because of “serious harassment” of another employee, Faye. Ms Bell said that she witnessed the Applicant’s conduct toward Faye, made Mr Mohamed aware of this and, as a result, Mr Mohamed asked her to give the Applicant an Employee Warning Notice. The employee ‘Faye’ referred to by Ms Bell was not brought by the Respondent as a witness. The Applicant disputes that there were any issues between her and Faye. The Employee Warning Notice Ms Bell says she gave to the Applicant as a result of the conduct does not provide any particulars of such conduct. It lists a range of options under the heading “Type of Violation” and two “types” are selected being “failure to follow instructions” and “rudeness to employees or customers”. However no further details are provided. The Applicant gave evidence that she did not receive any warnings. Based on the evidence before me, I am not satisfied that the Applicant engaged in serious harassment in relation to another employee.
[94] Ms Bell also gave evidence under cross-examination that some of the technicians had told her that they did not want to call the office or deal with the Applicant because of her “rudeness”. Ms Bell did not provide any evidence of specific technicians or circumstances in relation to this allegation. No technicians, other than Mr Croese, were brought as witnesses to corroborate this and, during the course of giving evidence at the Hearing, Mr Croese stated he “understood” and “liked” the Applicant and “had no problems” with her. Based on the evidence before me, I am not satisfied that the Applicant engaged in the conduct described by Ms Bell.
[95] Mr Croese gave evidence that the Applicant would speak to customers in an angry tone and some customers did not want to speak to her. However, Mr Croese was unable to provide details of specific customers or circumstances. Based on the evidence before me, I am not satisfied that the Applicant engaged in the conduct described by Mr Croese.
[96] Mr Croese’s evidence was that the Applicant has said to him “stop using the women’s toilets” and that she had said this to him before and that the Applicant swore out aloud in relation to a cleaner who was not in her presence at the time. The Applicant disputes the issues raised by Mr Croese. Based on the evidence before me, I am not satisfied that the Applicant engaged in the conduct described by Mr Croese or that, if she did, I am not satisfied the conduct would amount to a valid reason for dismissal that is “sound, defensible or well founded”. 17
[97] At the Hearing, the Respondent placed emphasis on the reason for termination being the negative Google Reviews. The Applicant gave evidence at the Hearing that:
• The First Google Review did not relate to the job booking but related to the treatment and that the complaint did not relate to her.
• In relation to the Second Google Review, the customer had a booking and wanted to bring the booking forward. The Applicant’s evidence was that the two technicians able to do the “bird work” requested were fully booked and that this was explained to the customer and she was offered an earlier appointment to the one she had already booked but she said this was not suitable.
[98] The Google reviews provided by the Respondent do not, in my opinion, establish misconduct or a reason for dismissal that is “sound, defensible or well founded”. 18
[99] The Applicant’s evidence was that she had never been given the code of conduct document or seen the document on the Respondent’s server. There is no evidence to contradict this or to establish that the code of conduct filed by the Respondent was provided to the Applicant or that she was otherwise made aware of its contents or that it was a requirement of her employment. Furthermore, even if the code of conduct did apply to the Applicant, I am not satisfied that conduct has occurred in breach of the code of conduct or that it would amount to a valid reason for dismissal that is “sound, defensible or well founded”. 19
Findings
[100] Having objectively considered all of the relevant circumstances related to the Applicant’s conduct, based upon the findings of the Commission, I am not persuaded that there was a valid reason for dismissal.
Section 387(b) - Was the Applicant notified of the valid reason?
Submissions
[101] In relation to s.387(b) of the FW Act, the Applicant submitted that this section is not relevant unless there is a valid reason for dismissal, which the Applicant submits does not exist. Notwithstanding this, the Applicant submitted that notification of the particular reasons for dismissal should occur before the decision to terminate is carried out 20 and that notification must be given in explicit, plain and clear terms.21 The Applicant submitted this did not happen in either sense.
[102] I understand the Respondent’s position to be that there was a valid reason for the dismissal and that she was notified of it.
Evidence
[103] The Applicant’s evidence was that she commenced work at around 8.00am on 30 June 2021, was handed the First Termination Letter by Ms Bell at around 9.00am that day and was “shocked” at having received it.
[104] At the Hearing, Ms Bell gave evidence that the decision to dismiss the Applicant was a joint decision between herself and the Managing Director, Mr Mohamed. Ms Bell’s evidence under cross-examination was that:
• she discussed the decision to dismiss the Applicant with Mr Mohamed on 10 May 2021; and
• she handed the Applicant the First Termination Letter on 30 June 2021 having been given the instruction to do so following discussion with Mr Mohamed. Ms Bell’s evidence was that this was in her capacity as the office manager as she was in charge of the office.
[105] There was no evidence of the notification of the particular reasons for dismissal before the decision to terminate was carried out.
Findings
[106] Proper consideration of s.387(b) requires a finding to be made as to whether the Applicant “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a). 22
[107] As I am not satisfied that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances. 23
[108] Even if there had been a valid reason, notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment, 24 and in explicit and plain and clear terms.25
[109] I find that the Applicant was not notified of the reason for her termination before the decision was made to terminate her employment.
Section 387(c) - Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
Submissions
[110] In relation to s.387(c) of the FW Act, the Applicant submitted that this section is not relevant unless there is a valid reason for dismissal, which the Applicant submits does not exist. Notwithstanding this, the Applicant submitted that there was no conceivable opportunity for the Applicant to influence the Respondent’s decision to dismiss her. The Applicant referred to the Full Bench of the Commission in Crozier v Palazzo Corporation Pty Ltd and submitted that the opportunity to respond implies an opportunity that might result in the employer deciding not to terminate the employment if the response is of substance. 26
Evidence
[111] I accept the evidence of the Applicant that she first learned of the decision to dismiss her on the morning on 30 June 2021 when Ms Bell handed her the First Termination Letter.
[112] There was no evidence that the Applicant was provided with an opportunity to respond before the decision to dismiss her was made.
Findings
[113] As I have not found that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances. 27
[114] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment. 28 Even if there had been a valid reason, on the basis of the evidence before me, I find that the Applicant was not provided with an opportunity to respond before the decision to dismiss her was made.
Section 387(d) - Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
Submissions
[115] In relation to s.387(d) of the FW Act, the Applicant submitted that there were no discussions relating to dismissal and as such, no refusal to allow a support person.
Evidence
[116] As noted above, I accept the evidence of the Applicant that she first learned of the decision to dismiss her on the morning of 30 June 2021 when Ms Bell handed her the First Termination Letter.
[117] There is no evidence of discussions relating to the dismissal having taken place.
Findings
[118] I find that there were no discussions relating to the dismissal and as such, the issue of the presence of a support person does not arise for consideration.
Section 387(e) - Was the Applicant warned about unsatisfactory performance before the dismissal?
[119] The Respondent submitted that the dismissal of the Applicant was a result of the Applicant’s conduct and there were no concerns in relation to her performance.
[120] As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.
[121] Notwithstanding this, I am not persuaded that the Applicant was provided with any warnings as submitted by the Respondent.
[122] Ms Bell’s evidence was that the Employee Warning Notice was given to the Applicant on 10 May 2021. It lists a range of options under the heading “Type of Violation”. The Employee Warning Notice does not provide any further detail in relation to the selected “Types of Violation”, nor does it make clear that the Applicant’s employment is at risk unless she shows improvement. Ms Bell’s evidence was that in handing the Applicant the Employee Warning Notice she said “this is for you Kim. This is in relation to Faye and you being rude to the employees” and did not go into any further detail.
[123] Both Ms Bell and Mr Croese gave evidence that they gave multiple verbal warnings to the Applicant. However, Ms Bell also gave evidence during the Hearing that she did not give the Applicant feedback on things she needed to do to improve her conduct because “nobody could say anything to her about it” and it was difficult to speak to the Applicant about such matters. I am not persuaded that this occurred. Mr Croese’s evidence was that he would “pull up all staff” and “try to help staff” in a “positive way” but is not “there to reprimand anyone” as it is not his job to do so and he was not the Applicant’s supervisor or manager. I accept that Mr Croese may have provided verbal coaching or suggestions to the Applicant and other employees, however I am not persuaded that he provided the Applicant with anything that could be properly considered a warning.
Section 387(f) and (g) - To what degree would the size of the Respondent’s enterprise or the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
Submissions
[124] At the Hearing the Respondent submitted it was not a large company with dedicated human resources expertise and that while it may not have gotten things “perfect” it made a genuine attempt at affording procedural fairness.
[125] In relation to ss.387(f) and 387(g) of the FW Act, the Applicant submitted that employees who are about to lose their employment are entitled to expect a fair go, regardless of the size of the employer’s undertaking or the absence of specialist human resources and that the Applicant was denied a fair go.
Findings
[126] I accept that the Respondent is not a large company with dedicated human resources specialists or expertise and that this likely had some effect on the procedures followed in effecting the Applicant’s dismissal. However, I do not consider this would have prevented the Respondent from bringing to the Applicant’s attention that it had concerns about her behaviour and giving her a chance to respond to any concerns it had before making the decision to dismiss her.
[127] While the FW Act recognises that “small businesses are genuinely different in nature both organisationally and operationally”,29 it does not follow that such an employer’s procedures in effecting a dismissal can be entirely devoid of fairness.
[128] The absence of dedicated human resource management specialists does not relieve an employer of extending an appropriate degree of courtesy to its employees “even when implementing something as difficult and unpleasant as the termination of a person’s employment”.30
What other matters are relevant?
[129] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
Submissions
[130] The Applicant submitted that the following other matters are relevant to the Commission’s consideration of whether the dismissal was harsh, unjust or unreasonable: 31
• the principle of a ‘fair go all round’ applies and the Applicant was not provided with this;
• the dismissal came out of the blue and was delegated to a junior manager who seemed distressed by it;
• the Managing Director refused to discuss the matter; and
• the Managing Director seemed to mock the Applicant’s actions in getting her work in order and handed over to a manager before leaving.
[131] Procedural fairness is one factor that the Commission may take into consideration when deciding if a dismissal has been harsh, unjust or unreasonable. It concerns the decision-making process followed or steps taken by a decision maker, rather than the actual decision itself.
[132] In the context of administrative decision-making, the rules of natural justice are flexible and require fairness in all the circumstances, including the nature of the power exercised and the statutory provisions governing its exercise. 32 Ordinarily, procedural fairness requires that an allegation be put to a person and they be given an opportunity to answer it before a decision is made.33
[133] I find that the Applicant was not afforded procedural fairness and I find that she was not warned that she was at risk of dismissal prior to her dismissal or given an opportunity to answer before a decision was made. I consider that this denial of procedural fairness and the sudden nature in which the decision to terminate the Applicant was made is relevant to my consideration of whether the dismissal was harsh, unjust or unreasonable.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
[134] I have made findings in relation to each matter specified in s.387 as relevant.
[135] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 34
[136] Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of the Applicant was harsh, unjust and unreasonable. There was no valid reason for the Applicant’s dismissal based on her capacity or conduct, she was denied procedural fairness and I find that she was not warned that she was at risk of dismissal prior to her dismissal.
Conclusion
[137] I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of s.385 of the FW Act.
Remedy
[138] Being satisfied that the Applicant:
• made an application for an order granting a remedy under section 394;
• was a person protected from unfair dismissal; and
• was unfairly dismissed within the meaning of section 385 of the FW Act,
I may, subject to the FW Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.
[139] Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:
(a) I am satisfied that reinstatement of the Applicant is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Is reinstatement of the Applicant inappropriate?
[140] The Applicant does not seek reinstatement. The Respondent’s oral submissions during the hearing were that it did not have any concerns with having the Applicant back as an employee as it would not have to train up a new member of staff.
[141] I do not consider that reinstatement is an appropriate remedy. The Applicant has found alternative employment. Given the way in which the Respondent effected the dismissal, the size of the business and that the Applicant would likely need to work with at least one of the persons who was involved in making the decision to dismiss her, I do not consider that there is any reasonable prospect that a viable working relationship could be re-established.
Is an order for payment of compensation appropriate in all the circumstances of the case?
[142] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”. 35
[143] I must therefore consider whether it is appropriate in all the circumstances to make an order for payment of compensation (s.390(3)(b) of the FW Act).
[144] Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion. 36 I am satisfied that the applicant has suffered some loss as a result of her employment, including during the period where she was without earnings and noting her new role is paid less than her role prior to her dismissal.
[145] Section 392 of the FW Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered.
[146] In considering each of the criteria in s.392 of the FW Act, it is useful to refer to the helpful restatement of principles to be applied in the assessment of compensation in Johnson
v North West Supermarkets T/A Castlemaine IGA: 37
“[9] The well-established approach to the assessment of compensation under s 392 is to apply the ‘Sprigg formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the current legislative framework in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c), that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:
“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...”
[10]The identification of this starting point amount ‘necessarily involves assessments as to future events that will often be problematic,’ but, as the Full Bench observed in McCulloch v Calvary Health Care Adelaide, ‘while the task of determining an anticipated period of employment can be difficult, it must be done.’
[11]Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.” (references omitted)
[147] The Sprigg formula was discussed and refined in Ellawala v Australian Postal Corporation 38as follows:
“[31] The principles applicable to determining an amount to be ordered in lieu of reinstatement are dealt with in Sprigg. In that case the Full Bench endorsed the following approach:
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).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
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.
[32] Any amount provisionally arrived at by application of these steps is subject to whether offsetting weight is given to other circumstances, including those that need now to be taken into account under paragraphs 170CH(7)(a), (b) and (c). The legislative cap on the amount able to be ordered is then applied pursuant to ss.170CH(8) and (9).
[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
“...we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.”
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the "anticipated period of employment". This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the "anticipated period of employment" are deducted. An example may assist to illustrate the approach to be taken.
[35] In a particular case the Commission estimates that if the applicant had not been terminated then he or she would have remained in employment for a further 12 months. The applicant has earned $3,000 a month for the 18 months since termination, that is $54,000. Only the money earned in the first twelve months after termination - that is $36,000 - is deducted from the Commission's estimate of the applicant's lost remuneration. Monies earned after the end of the "anticipated period of employment", 12 months after termination in this example, are not deducted. This is because the calculation is intended to put the applicant in the financial position he or she would have been in but for the termination of their employment.
[36] The next step is to discount the remaining amount for "contingencies". This step is a means of taking into account the possibility that the occurrence of contingencies to which the applicant was subject might have brought about some change in earning capacity or earnings.
…
[45] In relation to the fourth step set out in Sprigg we note that the usual practice is to settle a gross amount and leave taxation for determination.” (my emphasis, references omitted)
[148] In Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, 39 the Full Bench stated that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. The Full Bench also proffered that the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.
[149] I will assess compensation having regard to these matters.
Remuneration that would have been received if the dismissal had not occurred – s.392(2)(c)
[150] As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.” 40
[151] The Applicant submitted that:
• The employment would have continued for at least another 12 months from the dismissal date and that she would have earned $57,200.00 plus superannuation.
• Any amounts earned since dismissal should be deducted prior to the legislative cap being applied; those amounts are at time of hearing $4,167.88 leaving a provisional amount of $53,032.12.
[152] The Respondent did not make any submissions in response to the Applicant’s submissions regarding compensation.
[153] At the Hearing, the Respondent presented numerous allegations regarding the Applicants’ conduct, however, none were found to be a valid reason. The Respondent has not made any submissions to the effect that the Applicant’s employment would not have continued if not for the dismissal events. The Applicant’s evidence was that she had been unemployed for a substantial period of time prior to her employment with the Respondent and that there was Government incentive provided to the Respondent when they hired her due to her age and unemployment status. 41 The Applicant’s evidence was that she had been unemployed for a substantial period of time prior to her employment with the Respondent and that there was a Government incentive provided to the Respondent when they hired her due to her age and unemployment status.
[154] I find that if the Applicant had not been dismissed, I consider there is no reason, on the evidence before me, why she would not have remained in employment for a further period of 12 months. Based on her earnings prior to the dismissal, this would amount to $57,200.00. This is the starting point.
Remuneration earned – s.392(2)(e) and income reasonably likely to be earned – s.392(2)(f) and (g)
[155] Remuneration earned from the date of dismissal to the date of any compensation order is required to be taken into account under s.392(2)(e) of the FW Act. Remuneration reasonably likely to be earned from the date of any compensation order to the date the compensation is paid is to be taken into account under s.392(2)(f) of the FW Act. Any remuneration likely to be earned after that date to the end of the period of anticipated employment determined for the purpose of s.392(2)(c) is a relevant amount to be taken into account under s.392(2)(g) in accordance with the Sprigg formula. 42
[156] I am satisfied that the amount of remuneration earned by the Applicant from employment or other work during the period since the dismissal is $2,167.88 plus such other amounts she would have earned once she commenced alternative employment on 6 September 2021. Based on an amount of approximately $1,000.00 per week for a further 11 weeks from 6 September 2021, this amounts to $11,000.00. This would amount to $13,167.88.
[157] Based on the Applicant securing alternative employment and having been paid an amount of approximately $2,000.00 in relation to two weeks’ worth of work, I am satisfied that the amount of income reasonably likely to be earned by the Applicant between the making of the order for compensation and the payment of compensation is a further $2,000.00.
[158] As the Applicant commenced receiving remuneration from her new job from 6 September 2021 and this is beforethe time when her employment would, in my view, have ended, these earnings should reduce the amount of compensation ordered.
[159] Continuing in this role during the 30 week balance of the period between the making or the order for compensation and date I have determined that the Applicant would have remained in employment with the Respondent had her employment continued, the Applicant would earn an amount of approximately $30,000.00.
[160] In mathematical terms, this means deducting the actual and likely income for Applicant for the twelve month period from the date of her dismissal ($45,167.88) 43 from the amount calculated for the purpose of s.392(2)(c) ($57,200.00),44 leaves $12,032.12 gross in compensation.
Length of service – s.392(2)(b) and any other matters – s.392(2)(g)
[161] The Applicant’s length of service was approximately one year and eight months, which is not particularly significant. As such I apply a 5% discount to the amount of $57,200.00, reducing the amount of compensation by $2,635 to $9,397.12.
[162] I do not consider there is any basis for any deduction for contingencies in this matter and it will be left to the Respondent to deduct taxation required by law.
Viability – s.392(2)(a)
[163] Nothing specific of relevance was put on this aspect, however the Respondent did make submissions that the Respondent operates in a highly competitive industry that has been impacted adversely by COVID-19 and I do accept that the Respondent is a small business within the ordinary meaning of that term. If a significant award of compensation were made, it would likely have some impact. As such I apply a 5% discount to the amount of $57,200.00, reducing the amount by a further $2,635.00 to $6,762.12.
Mitigation efforts – s.392(2)(d)
[164] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal. 45 What is reasonable depends on the circumstances of the case.46
[165] The Applicant submitted she has taken reasonable steps to mitigate her loss.
[166] The Respondent did not make any submissions in relation to this.
[167] I am satisfied that the Applicant mitigated her loss by actively seeking and ultimately obtaining alternative employment.
Misconduct – s.392(3)
[168] I am not satisfied that the Applicant engaged in misconduct so no deduction is required under s.392(3) of the FW Act.
Compensation cap – s.392(5) & (6)
[169] I find that the total amount of the remuneration received by the Applicant during the 26 weeks immediately before the dismissal was $28,600.00.
[170] I find that the total amount of the remuneration to which the Applicant was entitled during the 26 weeks immediately before the dismissal was $28,600.00.
[171] The high income threshold immediately before the dismissal was $153,600.00. Half of that amount is $76,800.00.
[172] The amount of compensation ordered by the Commission must therefore not exceed $28,600.
Instalments – s.393
[173] I do not consider that there is any reason for compensation to be made by way of instalments. The conduct of the Respondent most certainly weighs against this.
Shock, Distress – s.392(4)
[174] The amount of compensation calculated must not and will not include a component for shock, distress, humiliation or other analogous hurt caused to the Applicant by the manner of his dismissal.
Conclusion
[175] I am satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and that order for compensation equating to $6,762.12 less taxation to be deducted as required by law, is appropriate having regard to all the circumstances of the case.
[176] An order requiring the payment of this amount within 14 days will be issued with this decision.
COMMISSIONER
Appearances:
Mr G Dircks on behalf of the Applicant
Mr T Selikas on behalf of the Respondent
Hearing details:
2021.
Sydney (By Video using Microsoft Teams)
September 23-24.
Printed by authority of the Commonwealth Government Printer
<PR735996>
1 Warrell v Fair Work Australia [2013] FCA 291.
2 Ibid.
3 Applicant, ‘Witness Statement’, filed 25 August 2021.
4 Re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.
5 Applicant, ‘Witness Statement’, filed 25 August 2021, [30]-[33].
6 Applicant, ‘Witness Statement’, filed 25 August 2021, [2].
7 Respondent, ‘Form F3 – Employer response to unfair dismissal application’, filed 4 August 2021, 1.5.
8 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].
9 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, [373].
10 Ibid.
11 Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, [685].
12 Edwards v Justice Giudice [1999] FCA 1836, [7].
13 King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
14 Applicant, ‘Outline of Submissions – Unfair Dismissal, filed 25 August 2021.
15 Applicant, ‘Outline of Submissions – Unfair Dismissal, filed 25 August 2021, [19], citing Selvachandran v Perton Plastics Pty Ltd [1995] 62 IR 371, [373].
16 Applicant, ‘Outline of Submissions – Unfair Dismissal, filed 25 August 2021, [18], citing Jobson v Gerrard Strapping Systems [1999] Print P6151.
17 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, [373].
18 Ibid.
19 Ibid.
20 Applicant, ‘Outline of Submissions – Unfair Dismissal, filed 25 August 2021, [31], citing Crozier v Palazzo Corporation Pty Ltd [2000] 98 IR 137.
21 Applicant, ‘Outline of Submissions – Unfair Dismissal, filed 25 August 2021, [32], citing Holmes C, Previsic v Australian Quarantine Inspection 6 October 1998, Print Q3730, [34].
22 Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
23 Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].
24 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
25 Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
26 Applicant, ‘Outline of Submissions – Unfair Dismissal, dated 25 August 2021, [26], citing Crozier v Palazzo Corporation Pty Ltd [2000] 98 IR 137, [70]-[71].
27 Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].
28 Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
29 Williams v Top Image Hair Design[2012] FWA 9517, [40].
30 Sykes v Heatly Pty Ltd t/a Heatly Sports PR914149 (AIRC, Grainger C, 6 February 2002), [21].
31 Applicant, ‘Outline of Submissions – Unfair Dismissal, filed 25 August 2021.
32 Kioa v West [1985] HCA 81, [11] (per Gibbs CJ).
33 Ibid, [22] (per Wilson J).
34 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]-[7].
35 Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
36 Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
37 [2018] FWC 679.
38 Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000)
39 [2017] FWCFB 429 at [43].
40 He v Lewin [2004] FCAFC 161, [58].
41 Applicant, ‘Witness Statement’, dated 25 August 2021, [3].
42 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206 at [31].
43 Arrived at by adding the highlighted amounts in paragraphs [156], [157] and [159] above.
44 See above at paragraph [164].
45 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
46 Ibid, [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
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