Leonora Normington v The Historical Village Herberton (HVH)
[2023] FWC 1818
•24 JULY 2023
| [2023] FWC 1818 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Leonora Normington
v
The Historical Village Herberton (HVH)
(U2022/9775)
| DEPUTY PRESIDENT LAKE | BRISBANE, 24 JULY 2023 |
Application for an unfair dismissal remedy – external incident wearing work uniform – reputational harm – summary dismissal – compensation awarded.
Leonora Normington (the Applicant) brought an application to the Fair Work Commission (the Commission) seeking a remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) stating she was unfairly dismissed from The Historical Village Herberton (HVH) (the Respondent).
The Applicant commenced her employment with the Respondent on 24 December 2018. It is undisputed that the Applicant was dismissed on 23 September 2022, and she lodged her application with the Commission on 5 October 2022, within 21-days, as required by the Act.[1] The Applicant is protected from unfair dismissal and the dismissal did not involve a genuine redundancy.[2]
Directions were issued and a hearing was held on 4 May 2023. The Applicant was self-represented, and Ms Sue Trevethan appeared on behalf of the Respondent.
BACKGROUND
Pub incident
The Applicant was summarily dismissed from her employment arising from an incident occurring at a nearby pub outside her workplace. The Respondent stated this incident caused reputational harm to the business as the Applicant was wearing her work uniform when this incident occurred.
The pub incident occurred on 10 September 2022 at the Royal Hotel in Herberton. The Respondent states that Mr Shirreff (the publican at the Royal Hotel) made a complaint about the Applicant opening several rum and cola cans that she had brought herself that was outside the licensed area to serve alcohol. The Applicant was asked to remove the BYO alcohol from the premises which caused an incident. He noted that the Applicant was visibly intoxicated. The Applicant states in her version of events that she had brought 3 rum and coke cans, one for herself and two for her partner.[3] She states that once Mr Shirreff had made her aware that it was against liquor licensing laws, she removed herself from the hotel.
On 12 September 2022, the Respondent stated that the Applicant had raised her voice ‘that she was a local’ in a small town after the Applicant confronted Mr Shirreff regarding the pub incident. The Respondent’s version of events was that the Applicant came to Mr Shirreff stating how the treatment toward her was rude and abrupt to which Mr Shirreff stated that he had liquor license responsibilities which he had to comply with. This escalated into loud confrontation this incident was observed by a local businessman and 2 tourists. The Applicant engaged in this incident wearing her work uniform.
The Applicant disputed the Respondent’s version of events. The Applicant stated that she wanted to get along with the Respondent as it was a small town, and that he was mistaken regarding his perception that she was drunk and that she was deliberately flouting liquor licensing laws when she was not intending to. The Applicant stated that she wanted to speak to Mr Shirreff privately and when she realised that the conversation would not be reasonable as he started to raise his voice, she left. The Applicant stated the conversation probably lasted around 2 minutes, and that the uniform was not easily recognisable as it was a blue woman’s dress shirt with a logo on the left shoulder.
The Respondent had received a written complaint from Mr Shirreff stating the incident on 16 September 2022. The Applicant worked a casual shift roster and as a result did not work until 23 September 2022.
The date of dismissal
On 23 September 2022, the Applicant was called into the manager’s office and stated that her employment had been terminated effective immediately. The Applicant was informed by Ms Debra Kuether (the Manager) that she was terminated resulting from a letter indicating she was wearing her uniform when confronting Mr Sheriff, and then Ms Kuether handed the complaint and termination letter.
The Respondent stated that Applicant read the letter of complaint, laughed and described the complainant as a ‘crackhead’ before stating she would take further action.
The Applicant stated that she was not identified in the complaint by name, and that the Respondent should have confirmed with her what the allegations were. The Applicant stated that the Respondent wanted to dismiss her because she had raised a number of workplace concerns. The Applicant seeks financial compensation for her dismissal.
The Respondent stated that the Applicant had been provided written warning on two occasions regarding issues with her employment. Firstly, the Applicant was provided a letter as she failed to perform shift duties on 23 May 2021. The second instance was a failure to show up for a rostered shift on 9 February 2022. The Respondent also filed in their materials that the Applicant had been perceived to be intimidating and abrasive. The Respondent seeks the matter to be dismissed.
CONSIDERATION
Was the dismissal harsh, unjust, or unreasonable?
Section 387 of the Act provides the criteria and considerations the Commission must take into account when deciding if the dismissal was harsh, unjust, or unreasonable.
(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.
(a) Valid reason for the dismissal:
It is well established that the factual basis for the reason for dismissal will not of itself demonstrate the existence of a valid reason.[4] It must, as s.387(a) makes clear, be a valid reason for dismissal. To be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[5] and should not be “capricious, fanciful, spiteful or prejudiced.”[6] As summarised by Deputy President Asbury in Smith v Bank of Queensland Ltd a “dismissal must be a justifiable response to the relevant conduct or issue of capacity”.[7]
The Respondent had dismissed the Applicant on the basis of reputational damage of the business resulting from a negative review from an incident outside of work whilst wearing the work uniform.
The Respondent submitted two contributing factors as to the valid reason for dismissal. The first being the complaint about the Applicant’s behaviour occurring on 12 September 2022, where the Applicant, in uniform, engaged in an altercation with the publican of the Royal Hotel where she was rude, disruptive, and threatening. The publican wrote an email to the Respondent, alerting them to this incident, with specific comment about how the Applicant was in uniform and not professionally representing the Respondent.
The Respondent submitted that the Applicant’s conduct on 12 September 2022 was conduct that brought the Respondent’s reputation of business into disrepute. The Respondent relied upon the letter provided by the publican of the Royal Hotel, and a follow-up conversation with the publican where it was noted that two other persons in the Royal Hotel had noticed that the Applicant was an employee of the Respondent because of the uniform. The Respondent noted that the success of the business is reliant on the public perception due to the small-town nature, and that the Applicant’s conduct damaged their reputation.
The Applicant submitted that the alleged conduct did not occur in the manner detailed by the Respondent or the publican. The Applicant submitted that it was the publican who acted aggressively, referring in her submissions to Facebook reviews of the Royal Hotel which identify the publican as aggressive and abusive to staff and customers.
The question of whether the conduct was a work-related offence as considered in Rose v Telstra (1998) 45 AIRL 3-966 has been raised. The three-part test in determining whether the out of hours conduct could constitute grounds for valid dismissal were as followed:
(a) The test considered whether, an objective view of the conduct was likely to cause serious damage to the relationship between the employer and employee; or
(b) The conduct damages the employer’s interests; or
(c) The employee’s duties are incompatible with the conduct.
Based on the evidence provided to the Commission, on the balance of probabilities, the Respondent did have a valid ground for dismissal.
The Applicant engaged in conduct which may have seriously damaged her relationship with her employer. The Applicant was dealing with a confrontational situation about an external situation while she was wearing a work uniform. When the Respondent received a formal external complaint about the Applicant’s behaviour, it would have caused serious damage to the trust and fidelity of the Applicant as an employee representing the employer.
Although what happened on 12 September 2022 is in dispute, there is an acknowledgement that there was confrontation on this day which the Applicant was a party to. There were three witnesses to the incident which could have damaged the employer’s interests. Public confrontation while wearing work uniform could damage the employer’s interest.
The Respondent had a valid reason to dismiss the Applicant.
(b) (c) Notification of reason and opportunity to respond:
Although the employer is not required to take any ‘particular steps’ in carrying out the dismissal, it is a commonly accepted practice that the notice must be provided in explicit, plain and clear terms regarding the termination of an employee except in cases of serious misconduct.[8] It is a statutory protection derived from the principles of procedural fairness that require employees to be treated fairly before a decision is made regarding their livelihood.[9]
I am not satisfied that the Applicant was sufficiently notified of the reason for dismissal. The Applicant had been terminated without an opportunity to respond to the allegations. The only opportunity the Applicant had to respond was on the date of dismissal where she was handed the complaint. The Respondent should have had a meeting with the Applicant before issuing a termination letter.
The Respondent failed to provide sufficient notice of the reason for dismissal and an opportunity to respond.
(d) Unreasonable refusal by the employer to allow the Applicant a support person:
There is no positive obligation on the employer to offer an employee the opportunity to have a support person and is only relevant when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses.[10] The Applicant did not ask to have a support person during the meeting and this factor is not relevant.
(e) Warning of unsatisfactory performance before the dismissal:
Although the Applicant was not dismissed for unsatisfactory performance, the Respondent submitted that the Applicant’s performance was unsatisfactory on several occasions. The Applicant was warned regarding a failure to perform her duty of restocking the gift shop and warned for not attending a rostered shifts without notice. Verbal discussions and written warnings were given to the Applicant regarding the above conduct.
The Applicant submitted that the unsatisfactory performance had been corrected and was not currently relevant at the time of the dismissal. The time of these warnings was given to her at least 5 months before her dismissal. I consider this factor neutral taking into consideration of other factors.
(f) (g) Size of employer’s enterprise, and impact on procedures caused by absence of dedicated human resources:
The Respondent is a smaller sized business, with nineteen non-permanent staff employed. The Respondent submitted that they do not have a dedicated human resources department. Ms. Keuther has been in the role of managing employees during the relevant period.
The Applicant submitted that the absence of a dedicated human resource officer left her with no avenue to raise the matter. I note that the procedures may have been less formal with a smaller business and may have contributed to some procedural gaps in the dismissal process of Ms Normington. I take into consideration of this factor in determining the dismissal.
(h) any other matters that the FWC considers relevant:
As the Applicant was summarily dismissed, I am required to consider whether there was serious misconduct per the Full Bench decision in Sydney Trains v Hilder.[11] Serious misconduct is defined in regulation 1.07 of the Fair Work Regulations 2009 (Cth) as follows:
1.07 Meaning of serious misconduct
(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.
(2) For subregulation (1), conduct that is serious misconduct includes both of the following:
(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:
(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.
There was a degree of harshness in Ms Normington’s dismissal. Although her actions may have caused some reputational harm to the employer by wearing a work uniform and engaging in a confrontation with the publican, it was not one which would have caused serious and imminent risk to this business. The Respondent stated that there were some concerns as the town which the Respondent operates from is small, and negative sentiments would arise from the incident. However, the affected parties were minimal with only three observers at the Royal Hotel to which two were tourists.
I take into account that the Applicant’s conduct would not fall under the definition of serious misconduct that caused any serious or imminent risk to the employer’s business.
CONCLUSION
On the balance of probabilities, I am satisfied that the Applicant’s dismissal was harsh, unjust or unreasonable in consideration of all the relevant factors and evidence provided by the parties. The Applicant’s conduct was not serious enough to justify an immediate dismissal, The failure by the Respondent to provide an opportunity for Ms Normington to respond to her potential termination outweigh the valid reason raised by the Respondent.
Therefore, I am satisfied that the Applicant has been unfairly dismissed. I turn now to remedy.
REMEDY
Given that I have found that the Applicant’s dismissal was unfair, it is necessary to consider the question of remedy. The Applicant has made an application under s. 394 of the Act in determining the Applicant’s remedy for unfair dismissal.
Section 390 of the Act provides that:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.”
The Applicant and Respondent have stated that reinstatement is something that they do not wish to consider. As a result, I do not find this to be an appropriate remedy.
Section 392 sets out the considerations for awarding compensation:
“Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled; (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket,[12] and has been applied and developed by Full Benches of the Commission in the context of the current Act.[13]
In short, the authorities indicate that assessing compensation involves a four-step process, noting that the guidelines are not a substitute for the words in the Act:
“Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost). I also take into account the length of service with the employer[14] and the ability to find a new role as a relevant factor in calculating compensation per s392(2).
Step 2: Deduct monies earned since termination.[15]
Step 3: Discount the remaining amount for contingencies.[16]
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount they would have received if they had continued in their employment.”
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
The Applicant had worked with the Respondent 1 day a week. Ms Normington had received two warning letters that were unrelated to the incident. This incident had deteriorated the trust and confidence between the employee and employer. I find that the Applicant may have not been rostered on after the 3-month period and her employment would not have continued after the season had ended. I find that the maximum compensation that Ms Normington would have received is 12 weeks of pay which amounts to $2,882.05.
Step 2: Deduct monies earned since termination.
The Applicant has not been employed during the termination. No monies will be deducted under this step.
Step 3: Discount the remaining amount for contingencies.
The contingencies are that the Applicant did engage in misconduct by wearing the work uniform during the pub incident. I discount 4 weeks from the calculation which amounts to a deduction of $960.68.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.”
In Bowden v Ottrey Homes Cobram and District Retirement Villages,[17] the Full Bench noted that in relation to the fourth step, the usual practice is to settle a gross amount and leave taxation for determination. I will leave the issue of taxation for determination by the Respondent.
I see that there are no issues of viability of the Respondent paying the Applicant upon issuing this Order. The Respondent is ordered to pay the sum of $1,921.37 gross within 21 days on issuing this Decision to the Applicant’s nominated bank account that was on payroll. I Order accordingly.
DEPUTY PRESIDENT
Appearances:
L. Normington for the Applicant
S. Trevethan for the Respondent
Hearing details:
Brisbane
4 May 2023
Hearing via Microsoft Teams
[1] Fair Work Act 2009 (Cth) s.394.
[2] Ibid s.396.
[3] Transcript of Hearing PN56
[4] Raj Bista v Group Pty Ltd t/a Glad Commercial Cleaning[2016] FWC 3009.
[5] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[6] Ibid.
[7] [2021] FWC 4 at 118.
[8] Chubb Security Australia Pty Ltd v Thomas (2000) AIRCFB at [41] Print S2679 (McIntyre VP, Marsh SDP and Larkin C); Crozier v Palazzo Corporation Pty Ltd [2000] 98 IR 137 at 73 (Ross VP, Acton SDP and Cribb C); Previsic v Australian Quarantine Inspection Services, Print Q3730 (AIRC, Holmes C, 6 October 1998). The principles still apply to the provisions of s.389(b) and (c) of the Fair Work Act 2009 (Cth), see William Eskander v Visy Board Pty Ltd [2021] FWC 3122 (Harper-Greenwell C) upheld in [2021] FWCFB 6036.
[9] Crozier v Palazzo Corporation Pty Ltd [2000] 98 IR 137 at 73 (Ross VP, Acton SDP and Cribb C)
[10] Explanatory Memorandum to Fair Work Bill 2008 at para. 1542
[11] [2020] FWCFB 1373.
[12] (1998) 88 IR 21.
[13] Bank of Sydney Ltd T/A Bank of Sydney v Repici [2015] FWCFB 7939.
[14] Fair Work Act 2009 (Cth) s392(2)(b) -(c) and s392(2)(g).
[15] Ibid s392(2)(e)
[16] Ibid s392(2)(a), (d) and (f).
[17] [2013] FWCFB 431.
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