Lisa Hughes v Kayda Care Pty Ltd
[2023] FWC 765
•12 APRIL 2023
| [2023] FWC 765 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Lisa Hughes
v
Kayda Care Pty Ltd
(U2022/11078)
| DEPUTY PRESIDENT BELL | MELBOURNE, 12 APRIL 2023 |
Application for an unfair dismissal remedy – dismissal unfair – compensation ordered.
On 18 November 2022, Ms Lisa Hughes (Applicant) made an application (the Application) to the Fair Work Commission (Commission) for relief from unfair dismissal under s.394 of the Fair Work Act 2009 (the Act). The Applicant alleges she was unfairly dismissed by Kayda Care Pty Ltd[1] (Kayda Care) on 2 November 2022.
Kayda Care was a provider of services for people who use or rely upon the National Disability Insurance Scheme (NDIS).
Respondent did not appear
Kayda Care did not appear in the matter. It did not file a ‘Form F3’ response, nor participate in a staff conciliation, nor attend a mention hearing before me, nor appear at the determinative conference held on 22 February 2023, nor file evidence or any material supportive of any position it held.
I am satisfied that the failure of Kayda Care to appear, or to file evidence, to challenge the Applicant’s case or to otherwise participate in the proceeding was a conscious choice. I will briefly explain why.
The Applicant’s ‘Form F2’ listed Kristy-Lee Farndell as the contact person for Kayda Care. Included in those details was a street address in Cranbourne West, a mobile telephone number and an email address.
Following the Applicant’s lodgement of her claim on 18 November 2022, the matter was allocated to a staff member for conciliation in the ordinary practice of the Commission. Communications were sent to Ms Farndell, also in the ordinary course, with a view to obtaining a ‘Form F3’ response from the employer. Despite numerous attempts to contact Ms Farndell or anyone else at Kayda Care, no response or acknowledgement was received. The staff conciliation with the Commission did not go ahead and the matter was allocated to me on 19 December 2022.
Upon being allocated to me, my chambers first attempted to contact Ms Farndell on that day (19 December 2022), having regard to the history of the matter up to that point in time.
While my chambers was successful in calling Ms Farndell on the telephone number listed in the Applicant’s Form F2, the call was regrettably brief and unsatisfactory. The file note records Ms Farndell stating to the effect:
· “look lady, I'm sick of you ringing me about this, [the Applicant] has made my life a living hell”;
· that she “doesn't have time to deal with this”; and,
· she has just been in a car accident.
Following the above, the file note records that Ms Farndell then swore at my associate and hung up. No further acknowledgement has been received by Ms Farndell since, despite numerous attempts to contact her.
On 20 December 2022, I issued directions for the matter. Among other matters, they listed the matter for a mention hearing on 12 January 2023, required the Respondent to file evidence and submissions by 3 February 2023, and listed the matter for a hearing on 22 February 2023.
According to an Australian Securities & Investment Commission historical company search, Kayda Care Pty Ltd was first registered, in Victoria, on 22 October 2020. Its ABN is 99 645 328 463. Ms Farndell was at all times listed as the sole shareholder, director and company secretary of Kayda Care. Its registered address and principal place of business was in Cranbourne East, Victoria.
In the proceeding before me, the Applicant was represented by the Health Services Union – Vic # 2 Branch (HACSU). Ms Ginny Adams, an Industrial Officer for HACSU, gave evidence of her attempts to serve or otherwise draw to Ms Farndell’s attention the Applicant’s original applications, the directions issued by me, and the Applicant’s submissions. Those attempts include posting by registered address to the Cranbourne East address described above.
I am satisfied that Kayda Care has been served pursuant to s.109X of the Corporations Act 2001 (Cth), as well as by multiple subrules in rule 42 of the Fair Work Commission Rules 2013. While I have not set out every attempt to contact Kayda Care, I am very comfortably satisfied that, on a factual basis, Ms Farndell was well aware of the proceeding, including by the numerous attempts to contact her by mobile telephone and email.
Concerningly, Ms Adams gave evidence that Ms Farndell is involved in a new business venture providing largely the same services she provided through Kayda Care, now trading under the name Saphira Supports. It is not clear to me what the business structure of Saphira Supports comprises, although Ms Adams states that the business is described as a collection of sole traders. It appeared to commence trading in about mid-November 2022. Kayda Care no longer appears to be trading. Although Kayda Care remains registered and is not presently under any form of external administration, I note that, on 21 March 2023, an application was made under s.459P of the Corporations Act 2001 from (it appears) a creditor to wind up Kayda Care.
Having regard to Ms Farndell’s apparent indifference to Ms Hughes’ application, together with the apparent cessation of activities by Kayda Care and resumption of possibly substantially similar services in a different capacity, I am concerned that Ms Farndell may have engaged in what is known as ‘phoenixing’. I am aware of two former employees (including the Applicant) who have monetary claims against Kayda Care that remain unresolved. Given that clients of Kayda Care would appear to be persons with varying degrees of disability, it is particularly concerning that any such conduct might occur in connection with the NDIS. I form no views about whether such conduct has occurred or not, but the financial robustness of persons providing services in relation to the NDIS may be a matter that the NDIS wishes to look into.
Was the Applicant protected from unfair dismissal?
By s.390 of the Act, the Commission can only order a remedy for unfair dismissal if the applicant was “protected from unfair dismissal” (see s.382) and was “unfairly dismissed” (see s.385).
I am satisfied that Ms Hughes was protected from unfair dismissal, as her evidence describes ongoing employment since 14 February 2021 (thus satisfying the minimum employment period) and her income was below the relevant threshold: s.382(a) & (b).
Section 385 of the 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.
On 2 November 2022, the Applicant received a letter from Kayda Care (signed by Ms Farndell and others) titled “Termination of your employment”. There is no doubt that, upon receipt of this letter, the Applicant was “dismissed” for the purposes of s.386 of the Act and, therefore, s.385(a).
Ms Hughes gave evidence on 22 February 2023 that there were 17 employees of Kayda Care at the time she was dismissed. Following a question from me, Ms Hughes explained that she knew this because she counted them. As that evidence was unchallenged, I am satisfied it was correct. On that basis, the Small Business Fair Dismissal Code (Code) was not applicable to the dismissal, although for the reasons that following, that finding makes no difference to my decision, as I am not satisfied that the dismissal would be consistent with the Code. I will return to this briefly below.
There was no material before me to suggest that the dismissal was a genuine redundancy, which leaves me to determine whether the dismissal was harsh, unjust or unreasonable.
Factual findings
The Applicant’s evidence, which I accept, records that she was employed by Kayda Care as a “Support Worker” for people with disabilities or particular needs, a role she had performed on an ongoing basis since February 2021. For approximately 2 months prior to that, she performed that role on a casual basis.
Her role involved attending clients’ homes and assisting them with their daily living tasks. The clients cared for by the Applicant had varying forms of mental illness and some had physical or intellectual disabilities as well.
In about late April 2021, the Applicant says she received a warning from Kayda Care following a client complaint. The Applicant advised Kayda Care that she wanted an opportunity to respond to the allegation, as she had evidence and a witness to support that the alleged incident did not occur. Despite that request, no opportunity was given, and the Applicant was told the warning would stand, albeit it would be expunged in 6 months’ time.
A similar warning, with a similar request to respond, was made a week later. As with the first warning, the Applicant was not given an opportunity to present her side. Following this, the Applicant’s hours were reduced to around 15 hours per week. The Applicant objected to the change in hours, to no avail. Despite the Applicant’s view that she had been made full time only months earlier, she was now being paid as a casual. Notwithstanding, it appears clear she was continuing to work regular hours throughout the balance of 2021 and in 2022 up until her dismissal.
There were a number of entitlements and other expenses that the Applicant says she was entitled to receive, but never did. Moreover, she made complaints about them.
The complaints about inadequate payments were not isolated to the Applicant. Ms Amanda Hughes[2] (not related to the Applicant) was also an employee Support Worker of Kayda Care. She, too, made numerous complaints about such matters to Kayda Care without apparent success. Amanda Hughes’ complaints commenced in about mid-2021 and were periodically raised since.
In about mid-October 2022, the Applicant was shown a copy of a letter that Amanda Hughes had written to Kayda Care at about that time. That letter detailed many underpayment issues. Shortly after, the Applicant herself sent an email to Kayda Care, which indicated support for the matters raised by Amanda Hughes.
On 2 November 2022, the Applicant was issued with the notice of termination described above. I have extracted the actual allegations in the letter, which are:
“I am writing to you about the termination of your employment with Kayda Care.
I refer to our numerous meetings we have had with you on countless occasions. During these meetings we discussed breaches in confidentiality, missing case notes and missing progress reports.
As discussed during the meeting, your conduct during that incident:
you refused to carry out a lawful and reasonable instruction that was consistent with your contract of employment, and in the circumstances your continued employment during a notice period would be unreasonable. This includes the breaches of confidentiality, all of your missing cased notes which are integral part of your job role and all missing progress reports.”
As to these allegations, the Applicant states (and I accept) that, far from “numerous meetings” having been held, there were none. The allegation regarding missing case notes related to the fact that Kayda Care was failing to pay staff to write them. The Applicant had raised a dispute about this, Kayda Care had indicated, I infer relatively recently, that it would pay for that time, and the Applicant was in the process of preparing them. The Applicant was sent a message from the “2IC” of Kayda Care, Tessa van der Veen, (who I note is now with Saphira Supports alongside Ms Farndell) a week prior praising that work.
I note that Amanda Hughes’ evidence, which I accept, indicates that she too was dismissed at around the same time and by a letter of termination she says was in similar terms to the letter received by the Applicant.
I also note that the Applicant’s evidence includes a ‘Facebook’ message sent by Ms van der Veen, who signed the letter of 2 November 2022 in her capacity as the “2IC and Rostering Manager”. The Facebook message was sent to the “Kayda care work chat” group approximately a week after the Applicant’s employment was terminated. Among other matters, the message states (emojis omitted):
“It is with great sadness but kristy has gone above and beyond today to try and get everyone money by contacting companies with outstanding invoices to contacting companies to see if they can assist us with business loans with all coming to no luck
At this stage we are looking at having no roster for next week sadly and kristy has a meeting with a company to look at having Kayda Care liquidated.”
The above material is suggestive that an operative reason for the dismissal of the Applicant and Amanda Hughes may well have been due to the demands by each of them for payments and the possible poor financial position of Kayda Care to meet those obligations, and its obligations to other creditors. While those matters cast doubt on the reasons expressed in the letter of termination, it is unnecessary for me to form a concluded view about them. Put simply, there was no material before me to that could meaningfully support any of the allegations in the termination letter.
Small Business Fair Dismissal Code
I am of the view that the Code did not apply because the evidence does not permit a finding that Kayda Care was a “small business”.
I would record here briefly that, even if Kayda Care was an employer to whom the Code applied, the requirements of the Code were not met. Specifically, there was no material before me to suggest that the employer could believe on “reasonable grounds” that it was entitled to summarily dismiss the Applicant. Even if dismissal was assessed outside of the part of the Code dealing with summary dismissal, the reason for dismissal “must be a valid reason based on the employee’s conduct or capacity to do the job”. A dismissal seeking to rely on the Code would fail on this basis, too, as there was no established “valid reason” for dismissal. I have set out below in greater detail my conclusions as to “valid reason”, which are applicable here.
There being no compliance with the Small Business Fair Dismissal Code (if it even applied), it falls to be determined whether the dismissal was harsh, unjust or unreasonable.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the 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.”
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[3] and should not be “capricious, fanciful, spiteful or prejudiced.”[4]
The material before me discloses no valid reason for dismissal. So far as the reasons listed in the letter of termination are concerned, they rise no higher than assertions and fall well short of being “sound, defensible or well founded”. Even on that shortfall, the Applicant’s evidence takes the reason for dismissal even further away from being a valid reason at all, and suggests that the operative reason for dismissal may have been the Applicant’s complaints about entitlements, or an attempt to avoid having to pay past and future entitlements of that nature.
The absence of a valid reason is a factor that, in these circumstances, points strongly to the dismissal being unfair.
I am satisfied that the Applicant was partly notified of the reason for her dismissal, albeit the notification was conclusionary, poorly written and grammatically confusing. At best, I consider this factor is neutral in my consideration.
The Applicant was not given an opportunity to respond to the reasons for dismissal, which made allegations as to her conduct. She was not given an opportunity because she was summarily dismissed. This is a factor that points to the dismissal being unfair, given that I do not consider there was a basis for a summary dismissal or there was otherwise a valid reason for dismissal.
The factor in s.387(d) does not arise because the Applicant was given no opportunity to have discussions relating to her dismissal.
For s.387(e), there is some limited evidence to show that the Applicant had be “warned” (in Kayda Care’s view) for not completing case notes. Although, as the Applicant’s evidence shows, that was due to Kayda Care failing to pay employees to complete them. Otherwise, I do not consider that the Applicant had been relevantly warned in any meaningful capacity as to the putative reasons for dismissal and this is a factor that points to the dismissal being unfair. Whilst I note that the Applicant had also received warnings the year before, they appear to relate to different concerns and, given the lack of opportunity at the time to respond to them, I give them little weight.
The factors in s.387(f) – (g) would appear to be largely neutral, and possibly somewhat in favour of Kayda Care. Kayda Care was a small organisation and the evidence before me does not disclose any dedicated or competent human resources management.
For the factor in s.387(h), I do not consider that there are other factors that would materially impact upon my overall assessment that I have not already addressed above.
Having considered each of the matters specified in s.387 of the Act, I am satisfied that the dismissal of the Applicant was harsh, unjust and unreasonable. The was no valid reason for the dismissal and the termination was procedurally deficient.
Remedy
It follows that the Applicant was unfairly dismissed in accordance with s.385 of the Act. Being satisfied that the Applicant was unfairly dismissed, I am required by s.390 to consider whether to order reinstatement or the payment of compensation.
At the hearing before me, the Applicant confirmed that reinstatement was not sought. Having regard to that fact and the other evidence before me, I am satisfied that an order for reinstatement would be inappropriate: s.390(3)(a).
By contrast, I consider that an order for compensation is appropriate in the circumstances. The dismissal was plainly unfair and the Applicant has suffered financial loss as a result.
In determining compensation, I am required to take into account all the circumstances of the case, including the matters listed in s.392(a) – (g). Any misconduct by an employee contributing to the dismissal may reduce the amount that would be otherwise ordered: s.392(3). Compensation is not payable for shock, distress and the like: s.392(4).
Dealing first with the remuneration that the Applicant would have, or would have been likely to have, received if she was not dismissed (s.392(c)), I consider that the Applicant would have remained employed for no longer than 6 months. The scenario her evidence describes at Kayda Care indicates a poorly managed workplace that was causing the Applicant some distress. While I consider that the Applicant was not willing to lose her remaining employment, I consider that it is likely she would have left by no later than 6 months.
The Applicant’s evidence was that she received (net of tax) on average about $750 per week. If she was working for a further 6 months, she would expect to receive a further $19,500 (net of tax), although it would appear this amount represents an underpayment of the amounts actually payable.
I deduct from this the amounts the Applicant had actually earned (s.392(e)) between the time of dismissal and my order for compensation. I also must deduct any amount reasonably likely to be earned in the period after making my order and the actual compensation: s.392(f). To the Applicant’s credit, she has been successful in obtaining alternative work within a relatively short period after her dismissal. Recognising that there might be some ups and downs as to the future of that work, I find that as a result of the dismissal, the Applicant’s loss of income is approximately 4 weeks’ pay.
Based on her weekly pay, her loss is $3,000, net of tax. I make no deduction for misconduct or contingencies.
I also make no deduction on account of any failure by the Applicant to mitigate her loss. To the contrary, Kayda Care is fortunate the Applicant was diligent in finding fresh work and was mostly successful in mitigating her loss.
There is no evidence before me to suggest that an order for $3,000 would affect the viability of the business (which is possibly inviable, whether or not I make an order for compensation) and I make no deduction on account of that factor. Put differently, if Kayda Care is to be wound up, the Applicant may or may not be able to enforce the full value of her remedy in this proceeding but that will be a matter to be determined in the process of liquidation (if it occurs). There are no other matters that I consider are relevant that affect my assessment of compensation.
That amount is well within the statutory cap. I shall therefore order that the Applicant be paid an amount of $3,000 net of taxation plus 10.5% superannuation.
An order[5] to this effect will be issued with this decision.
DEPUTY PRESIDENT
Appearances:
G Adams of HACSU for the Applicant
No appearance for the Respondent
Determinative conference details:
2023.
Melbourne (by video link via Microsoft Teams):
February 22.
[1] The Form F2 application described the respondent as “Kayda Care”. The Applicant confirmed the correct name of the respondent was “Kayda Care Pty Ltd” and provided a pay slip extract stating it was “Paid By” Kayda Care, with an ABN 99 645 328 463. The details for Kayda Care Pty Ltd are described more fully in the decision.
[2] To avoid confusion, I will continue to refer to her as ‘Amanda Hughes’ to distinguish her from the Applicant, Lisa Hughes.
[3] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[4] Ibid.
[5] PR760730.
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