Michael Franklin v The Trustee for World Gym Melbourne Investment Unit Trust
[2025] FWC 637
•3 MARCH 2025
| [2025] FWC 637 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Michael Franklin
v
The Trustee For World Gym Melbourne Investment Unit Trust
(U2024/4591)
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 3 MARCH 2025 |
Application for an unfair dismissal remedy – jurisdictional objection – whether applicant dismissed – applicant found to be dismissed – dismissal found to be unfair – compensation awarded
Introduction and outcome
On 22 April 2024, Mr Michael Franklin lodged an application with the Fair Work Commission (the Commission) under s. 394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with the Trustee for World Gym Melbourne Investment Unit Trust trading as World Gym Prospect (WGP).
WGP contended that Mr Franklin is not eligible to make such an application because he performed work as an independent contractor rather than as an employee. On 4 November 2024, following a determinative conference, I issued a decision[1] in which I found that Mr Franklin was employed by WGP at the time he ceased working for WGP.
On 17 December 2024, I conducted a further determinative conference to determine whether Mr Franklin had been dismissed from WGP, and if so, whether the dismissal was unfair.
WGP contends that Mr Franklin voluntarily reduced his availability by relinquishing his Wednesday and Saturday classes to accept work at another gym, which created opportunities to reschedule Mr Franklin’s other classes. WGP was also concerned that members of WGP would transfer their membership to the gym where Mr Franklin would be instructing Wednesday and Saturday classes. Mr Franklin, however, asserts that he was dismissed after providing notice of his reduced availability, and that he was denied procedural fairness in the termination process.[2]
In summary, I have found that Mr Franklin was dismissed by WGP and that there was no valid reason for the dismissal. On the basis of this and other findings, I have determined that Mr Franklin’s dismissal was harsh, unjust and unreasonable and that an order for compensation is appropriate.
The hearing
There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
After taking into account the views of Mr Franklin and WGP, and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a determinative conference pursuant to s.398 of the FW Act.
At the conference, Mr Franklin represented himself. WGP was represented by Mr Matthew White, the Club Manager for WGP.
Mr Franklin filed submissions in the Commission on 22 November 2024 and WGP filed submissions in the Commission on 6 December 2024. I have considered the submissions made by the parties and all of the evidence before me in my determination of the matter and the conclusions I have reached.
Background facts
WGP is part of the World Gym Australia (WGA) franchise network, offering gym memberships and fitness classes. WGP operates in Prospect, New South Wales, employing a mix of permanent staff and independent contractors.[3] Mr Matthew White is the Club Manager, and Ms Kristen Flood is the Group Fitness Manager.[4]
Mr Franklin was engaged when WGP initially opened on 24 August 2020 to deliver group fitness classes, including BodyCombat, BodyPump, and Core which are all classes devised by the Les Mills brand. WGP pays monthly licence fees for the Les Mills classes. WGP is planning to phase out the Les Mills classes and replace them with World Gym branded classes so that it does not have to pay licence fees. Each class can only be run by an Instructor who is qualified with respect to that particular class.
Mr Franklin said that it is common for gyms to change timetables and for instructors’ availabilities to change, so instructors and classes change frequently.
Mr Franklin explained that he performs work as a fitness instructor in multiple gyms which is commonplace among people working in the fitness industry. The work that Mr Franklin undertook for other gyms would usually be carried out on Tuesdays and Thursdays. Mr Franklin worked for four other gyms during the time he worked for WGP.
In around March 2024, Mr Franklin was contacted by management of a new World Gym franchise located 10 kilometres from WGP and offered back-to-back double classes on Wednesdays and Saturdays which Mr Franklin accepted. At that time, Mr Franklin was delivering three classes at WGP on Monday evenings from 5:30pm to 8pm and single BodyCombat classes on Wednesdays and Saturdays. The Monday night classes were BodyCombat at 5:30pm, Core at 6:30pm and BodyPump at 7pm. Mr Franklin said that if back-to-back double classes on Wednesdays and Saturdays were available for him to teach at WGP, he would have not accepted the offer by the new franchise.
At 4:11pm on 13 March 2024, Mr Franklin sent the following text message to Ms Flood:
I suppose there’s never a good time for this message:
I’ve been offered a double class on Wednesday nights and a Pump class on Saturday mornings, something I’ve been after for a long time and I know isn’t an option at WG Prospect. This means I wont be able to keep my current Wednesday 6:15pm BodyCombat and Saturday 10am BodyCombat.
This is due to commence on 6/4 in 3 weeks time.[5]
Shortly after Mr Franklin sent this message, at about 4:54pm, Ms Flood sent a voice message to Mr Franklin which Mr Franklin transcribed as follows:
Hi, Oh I absolutely understand, umm I absolutely understand. Matt just as you know, he isn’t happy to budge ever on the timetable, it’s set in stone until he leaves the, the company, arhm, so I totally understand. Um, congratulations on getting yourself a double, that’s amazing and is exactly what you wanted so that’s fantastic um, thank you for giving me notice as well, I’ll sort that out. Uhmm, ohhh, there will be sad and the members will be sad too arhmm, but yerh, I appreciate you, thank you for giving me notice, and yerh! Best of luck at your new doubles, how exciting![6]
Mr Franklin sent a follow up message to Ms Flood which stated:
Thx! But still around for Mondays.[7]
On 19 March 2024, Ms Flood send the following text message to Mr Franklin:
Hey I’m back!
Thanks for letting me know, to be honest it’s a little disappointing hearing that you are leaving for another competing WG and dropping your classes here for them. We are wanting instructors here who are committed and wanting to be apart of WG Prospect and the awesomeness we have built over the last year. We are looking to make some timetable changes soon, so I think it’s best that we do it sooner rather than later to take you off the timetable completely as it will be easier for us to find a new instructor who can come on and take over a potential 4-5 class times that we were doing.
I know that you will be missed and wish you all the best at the new club.[8]
Ms Flood sent a further message which stated:
Of course I discussed this with Matt and the owners and we are just wanting instructors who are all in.
We would love you to be but choosing to leave here to go there feels like we are not the priority. I totally get that from one instructor to another - I more then get it, but with my managers hat on I also understand the business needs.
Mr Franklin said that he received no further correspondence regarding the cessation of his employment, until 1 April 2024 when he read a Facebook group post from Ms Flood to all instructors, which concluded:
We say a very sad farewell to Mikey! This will be his last week with us before he moves on to bigger and better things. Thank you for all of your help when I first started, I couldn't have done it without you and I will be forever grateful for your help and assistance.[9]
Mr Franklin’s final day of work on 6 April 2024.
On 13 April 2024, Mr Franklin posted a lengthy message on a World Gym Instructors Facebook page which commenced as follows:
Honesty is NOT the best policy with Matt White and Kristen Flood! A warning to all instructors: never tell the truth, they are NOT your friends.
The TRUE story of what happened to Mikey.
Feel free to DM me for any more details that you don't want to comment publicly.
Despite the insincere public posts by Matt and Kristen thanking me for my work and publicly wishing me the best at my 'new club' etc etc, the complete opposite is actually what happened.[10]
…..
When can the Commission order a remedy for unfair dismissal?
Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the person was protected from unfair dismissal at the time of being dismissed; and
(b) the person has been unfairly dismissed.
Both limbs must be satisfied. I am therefore required to consider whether Mr Franklin was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that Mr Franklin was so protected, whether Mr Franklin has been unfairly dismissed.
When has a person been unfairly dismissed?
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.
Initial matters
Was Mr Franklin dismissed?
A threshold issue to determine is whether Mr Franklin has been dismissed from his employment.
Section 386 of the FW Act provides:
386 Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.
The expression ‘terminated on the employer’s initiative’ in s.386(1)(a) is well understood to be a reference to a termination that is brought about by an employer, and which is not agreed to by the employee. In circumstances where the employment relationship is not left voluntarily by the employee, the focus of the inquiry is whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.[11]
It is clear from the evidence in the initial determinative conference on 14 August 2024 and the subsequent determinative conference on 17 December 2024 that Mr Franklin worked regularly for WGP from 24 August 2020 to 6 April 2024 and that both parties had the ability to vary the number of classes that Mr Franklin taught each week. During the period of employment, WGP increased or decreased Mr Franklin’s classes at various times in accordance with timetable changes. In the material filed by WGP, it claimed that fitness instructors can accept or decline any class and that every week WGP posts a timetable which changes according to instructor availability.
WGP contended that the cessation of Mr Franklin’s employment was mutual because Mr Franklin had exercised his right to reduce the number of classes he instructed and WGP had in turn had exercised its right to also reduce the number of classes that Mr Franklin instructed.
Mr White explained during the hearing that there was a delay in the other World Gym franchise opening and the commencement of Mr Franklin working there. WGP was initially open to having Mr Franklin cover some classes after Ms Flood sent the text message to Mr Franklin on 19 March 2024. However, WGP decided this was not the right thing for the business after Mr Franklin made a disparaging post about WGP on social media.
Mr Franklin said there was no indication that WGP was open to having discussions with him until he received a text message from Mr White on 16 April 2024 after the employment had ceased. Mr Franklin said that Mr White sent him this text message after Mr Franklin had posted on social media about the dismissal.
Mr White said that there was an opportunity for Mr Franklin to return some time in the future, but that WGP never had the opportunity to discuss this directly with Mr Franklin because he did not come to WGP to discuss his concerns. WGP only became aware that Mr Franklin had concerns about the cessation of his employment through the unfair dismissal application and his social media posts.
Findings
WGP increased or decreased Mr Franklin’s classes in accordance with timetable changes during the period of employment, however the employment relationship continued despite these changes. Although WGP may have believed that its actions in reducing Mr Franklin’s classes were consistent with Mr Franklin’s own actions in reducing his classes, it was WCP’s actions in reducing Mr Franklin’s classes to zero, which brought the employment relationship to an end.
Mr Franklin’s follow up text message on 13 March 2024 advised that he was still available for the Monday classes and therefore indicated an intention to maintain the employment relationship. Ms Flood’s text message on 19 March 2024 advised that WGP intended to ‘take [Mr Franklin] off the timetable completely’. Ms Flood then advised Mr Franklin and other instructors on 1 April 2024 through a Facebook group post to all instructors,
We say a very sad farewell to Mikey! This will be his last week with us before he moves on to bigger and better things.
It is clear from Ms Flood’s correspondence that WGP no longer wanted to have an employment relationship with Mr Franklin regardless of Mr Franklin’s views about this. It is unfortunate that neither Ms Flood or Mr White sought to have a discussion with Mr Franklin prior to Ms Flood sending these communications. It should have come as no surprise to Ms Flood and Mr White that Mr Franklin would be unhappy about having three of his classes cancelled in response to Mr Franklin’s advice that he was unavailable for two other classes.
Based on the material before me, I find that the correspondence from Ms Flood on 19 March 2024 and 1 April 2024 was action on the part of WGP that was the principal contributing factor which resulted, directly or consequentially, in the termination of Mr Franklin’s employment. As such, I find that Mr Franklin was dismissed within the meaning of s.386 of the FW Act.
Other matters
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.
I have decided these matters below.
Section 394(2) requires an application to be made within 21 days after the dismissal took effect.
Both parties submitted that the termination took effect on 6 April 2024. On 22 April 2024, Mr Franklin filed an Unfair Dismissal application with the Commission. I am therefore satisfied that the application was made within the period required in s.394(2).
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.
It was not in dispute, and I find, that at the time of dismissal, Mr Franklin completed at least the minimum period of employment with WGP, and that his annual remuneration was less than the high income threshold.
I am therefore satisfied that, at the time of dismissal, Mr Franklin was a person protected from unfair dismissal.
It was not in dispute, and I find, that Mr Franklin’s dismissal was not a case of genuine redundancy and that the Small Business Fair Dismissal Code does not apply.
Having considered each of the initial matters, I am required to consider the merits of the application.
Was the dismissal harsh, unjust or unreasonable?
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.
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[12]
I set out my consideration of each of these criteria below.
Was there a valid reason for the dismissal related to Mr Franklin’s capacity or conduct?
In order to be a valid reason, the reason for the dismissal should be ‘sound, defensible or well founded’[13] and should not be ‘capricious, fanciful, spiteful or prejudiced.’[14] 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.[15]
Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[16] 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.[17]
Evidence
Mr White said that the consequence of Mr Franklin being unavailable to teach BodyCombat classes on Wednesday and Saturday is that WGP could no longer offer these classes. It is very difficult to recruit instructors who are qualified to teach BodyCombat and WGP’s existing BodyCombat qualified instructors were not available at the times the classes were scheduled.
Mr White said that he had been considering making changes to the Monday timetable as class numbers were low and Mr Franklin’s unavailability for the Wednesday and Saturday Body Combat classes was an opportunity to replace the BodyCombat class with a different class which could potentially reduce licensing costs. Mr White replaced the BodyCombat class at 5:30pm with BodyBalance. Mr White retained the Core class at 6:30pm but replaced the BodyPump class at 7:00pm with a World Gym Pump class as the instructor who was available to teach the class was not qualified to teach BodyPump.
Mr Franklin accepted that WGP was permitted to change the Monday classes and that he was not qualified to teach the BodyBalance and World Gym Pump classes. He said that he should have been retained to teach the Core class. Mr Franklin also said that the only reason that the BodyPump class was changed to World Gym Pump was because the instructor who was available was not qualified to teach BodyPump. Mr Franklin submitted that if he had not been dismissed, there would have been no reason for WGP to change the BodyPump class to World Gym Pump and that he should have been retained to teach the Core and BodyPump Classes on Monday night.
Mr Franklin said that he was not aware that Monday night classes had lower numbers and that the usual practice would be for the Group Fitness Manager to discuss this with the Fitness Instructor so that the Fitness Instructor was not blind sighted by a sudden change in the timetable. There was no discussion in this case.
Mr White said that in addition to Mr Franklin not being qualified to teach two out of three of the classes on Monday night, a reason that WGP decided to remove Mr Franklin from the Monday night classes was because Mr Franklin was working for a competitor. Mr White said that since the opening of the new World Gym franchise 10 kilometres from WGP, a large number of members of WGP had transferred their membership from WGP to the new World Gym franchise. Mr White believes that this number would have been far greater if Mr Franklin had been permitted to continue working at WGP on Monday nights. Mr White said that Fitness Instructors develop close relationships with clients and there was a risk that clients attending Mr Franklin’s Monday night classes would transfer their membership to the new World Gym franchise so that they could attend Mr Franklin’s Wednesday and Saturday classes there.
Mr Franklin said that while working at the new World Gym franchise, he had only seen one person who had attended his classes at WGP. This person had a gym membership called a ‘fitness passport’ which permits them to attend multiple gyms and was unaware that Mr Franklin had started working for the new franchise.
Consideration
There is no dispute between the parties that WGP was permitted to change the timetable and that this could result in Mr Franklin’s classes being reduced. I accept Mr White’s evidence that he used the opportunity of Mr Franklin relinquishing the Wednesday and Saturday BodyCombat classes to change the BodyCombat class on Monday evening to BodyBalance. Although Mr Franklin may have disagreed with Mr White’s decision in this regard, such a change was permissible under the terms of the arrangements between the parties.
Mr Franklin was not qualified to teach the BodyBalance class which replaced BodyCombat, but there is no reason why he could not have continued to teach the Core and BodyPump classes. Mr White gave evidence that the reason he did not wish to retain Mr Franklin’s services was because he was concerned that clients of WGP would transfer their membership to the new World Gym franchise where Mr Franklin would be teaching Wednesday and Saturday classes.
As it happened, a large number of members transferred their membership from WGP to the new franchise where Mr Franklin was teaching Wednesday and Saturday classes. However, this may have occurred simply because the new World Gym location was more convenient to those members than the WGP location. There is no evidence to establish that the transfer of membership was because Mr Franklin started working at the new franchise. If there was a risk of WGP members following fitness instructors to different locations, this could have happened at any time during the four years that Mr Franklin was working at WGP, given that he was working at other gyms on Tuesdays and Thursdays.
It seems that Mr White had a particular sensitivity to the new World Gym franchise opening 10 kilometres away from WGP. It may be that this was because both WGP and the new franchise offered similar services so Mr White regarded the new franchise as a greater threat to the business of WGP than other gyms that are not part of the World Gym brand. This is a matter which Mr White should have raised with the head office of World Gym. It is not a matter that justified the termination of Mr Franklin’s employment, especially given the evidence of both parties that it is common in the fitness industry for fitness instructors to work across multiple gyms and there was no prohibition on Mr Franklin and other instructors doing so.
In the circumstances, I find that the reason for termination of Mr Franklin’s employment, which was Mr Franklin working for another World Gym franchise, was not a valid reason for the dismissal related to Mr Franklin’s capacity or conduct.
Was Mr Franklin notified of the valid reason?
Proper consideration of s.387(b) requires a finding to be made as to whether Mr Franklin ‘was notified of that reason’. Contextually, the reference to ‘that reason’ is the valid reason found to exist under s.387(a).[18]
As I am not satisfied that there was a valid reason related to dismissal, the factor is not relevant to the present circumstances.[19]
Was Mr Franklin given an opportunity to respond to any reason related to his capacity or conduct?
As I have not found that there was a valid reason related to Mr Franklin’s capacity or conduct, the factor is not relevant to the present circumstances.[20]
Did WGP unreasonably refuse to allow Mr Franklin to have a support person present to assist at discussions relating to the dismissal?
There were no discussions relating to the dismissal before it occurred so there was no opportunity for Mr Franklin to have a support person in relation to the dismissal. This is a matter which weighs in favour of a finding that the dismissal was unfair.
Was Mr Franklin warned about unsatisfactory performance before the dismissal?
As the dismissal did not relate to unsatisfactory performance, the factor is not relevant to the present circumstances.
To what degree would the size of WGP’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
The parties made no submissions about this matter. I therefore make no findings about this matter.
To what degree would the absence of dedicated human resource management specialists or expertise in WGP’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
WGP submitted that it is a stand-alone business that has no access to human resources unless it engages an outsourced firm which is costly. WGP also submitted that as it treated Mr Franklin as an independent contractor rather than an employee, having a human resource specialist involved probably would not have made a difference other than advising WGP that it ensures the contractor understands it is a mutual severance of contract.
Mr Franklin submitted that WGP is a franchise of WGA, and its proprietors and management have access to teams in WGA head office HR to provide advice about the correct handling of matters, should they have chosen to involve them.
Based on these submissions, I find that the absence of dedicated human resource management specialists or expertise in WGP’s enterprise would have been unlikely to impact on the procedures followed in effecting the dismissal.
What other matters are relevant?
Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant. A number of matters raised by the parties are potentially relevant to my consideration under this provision, including Mr Franklin’s performance record, procedural fairness, and the impact of the dismissal on Mr Franklin.
Mr Franklin worked for WGP for a number of years and there is no indication that WGP had any concerns about his conduct or performance. If Mr White was genuinely concerned that clients would leave WGP as a result of Mr Franklin teaching at a new World Gym location, he could have discussed these concerns with Mr Franklin with a view to seeking assurance from Mr Franklin that Mr Franklin would be discreet about his new job. Such a discussion may have assisted Mr White understanding the reason why Mr Franklin had accepted double classes at another location and may have resulted in Mr Franklin and Mr White exploring ways in which Mr Franklin could be offered more classes by WGP and perhaps agreeing to forgo the new role.
Further, if Mr White felt that he had no other option but to take Mr Franklin off the Monday classes, he should have advised Mr Franklin that this was a consequence of accepting classes at the new World Gym location so that Mr Franklin could make an informed decision about this matter.
I find that Mr White’s failure to explain his concerns to Mr Franklin about Mr Franklin working at the new gym and putting Mr Franklin on notice that he was intending to terminate Mr Franklin’s employment are matters which weigh in favour of a finding that the dismissal was unfair.
Further, I note that the dismissal has caused Mr Franklin financial loss and this is also a matter weighing in favour of a finding that the dismissal was unfair.
Is the Commission satisfied that the dismissal of Mr Franklin was harsh, unjust or unreasonable?
I have made findings in relation to each matter specified in s.387 as relevant.
I must consider and give due weight to each of these matters as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[21]
Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of Mr Franklin was harsh, unjust and unreasonable because:
there was no valid reason for the dismissal related to Mr Franklin’s capacity or conduct,
there was no procedural fairness or consideration of alternatives to dismissal,
Mr Franklin was terminated for agreeing to work at a different World Gym franchise in circumstances where there was no express prohibition of him doing so,
Mr Franklin was not advised by WPG that a possible consequence of him agreeing to work at a different World Gym franchise was dismissal and
of the harsh consequences of the dismissal due to the financial impact of the dismissal on Mr Franklin.
I am therefore satisfied that Mr Franklin was unfairly dismissed within the meaning of s.385 of the FW Act.
Remedy
Being satisfied that Mr Franklin made an application for an order granting a remedy under s.394, was a person protected from unfair dismissal, and was unfairly dismissed within the meaning of s.385 of the FW Act, I may, subject to the FW Act, order Mr Franklin’s reinstatement, or the payment of compensation to Mr Franklin.
Under s.390(3) of the FW Act, I must not order the payment of compensation to Mr Franklin unless:
(a) I am satisfied that reinstatement of Mr Franklin is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Is reinstatement of Mr Franklin inappropriate?
Mr Franklin initially sought reinstatement, however he conceded during the hearing that he thought that it was an unlikely outcome. WGP submitted that reinstatement of Mr Franklin is inappropriate as Mr Franklin abused Ms Flood, became aggressive and defamatory and went onto multiple social media platforms to slander WGP, including its own Group Fitness social media page where he misrepresented the situation. WGP said that Mr Franklin spoke negatively to staff and members about Mr White, Mr Flood and the business. WGP submitted that its staff are now very unsettled about Mr Franklin potentially returning to WGP.
The uncontested evidence I have before me in relation to the conduct complained of by WGP is Mr Franklin’s social media post. In my view, it was unwise for Mr Franklin to complain about WGP’s treatment of him in a forum that was accessible by other fitness instructors. If Mr Franklin was unhappy about Ms Flood’s and Mr White’s social media posts about his departure, he could have raised this directly with them and asked them to issue a communication which more accurately reflected the situation. Regardless of their treatment of Mr Franklin, Ms Flood and Mr White are entitled to have a good relationship with the other fitness instructors and it was not appropriate for Mr Franklin to seek to undermine this with the lengthy social media post about his dismissal, which in my view was disparaging of Mr White and Ms Flood (even if Mr Franklin believed his comments about them were truthful).
Mr Franklin has not provided any evidence which establishes that he would be able to work with and have a constructive relationship with Mr White and Ms Flood if he is reinstated. In the circumstances, I am concerned that reinstating Mr Franklin could be a source of conflict in the workplace and find, having regard to all of the material before me, that reinstatement of Mr Franklin would be inappropriate.
Is an order for payment of compensation appropriate in all the circumstances of the case?
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…’[22]
Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of the discretion.[23]
The evidence established that Mr Franklin has suffered financial loss as a result of the dismissal. In the circumstances, I find that an order for compensation is appropriate in all of circumstances of the case.
Compensation – what must be taken into account in determining an amount?
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Mr Franklin in lieu of reinstatement including:
(a) the effect of the order on the viability of WGP’s enterprise;
(b) the length of Mr Franklin’s service;
(c) the remuneration that Mr Franklin would have received, or would have been likely to receive, if s had not been dismissed;
(d) the efforts of Mr Franklin (if any) to mitigate the loss suffered by Mr Franklin because of the dismissal;
(e) the amount of any remuneration earned by Mr Franklin from employment or other work during the period between the dismissal and the making of the order for compensation;
(f) the amount of any income reasonably likely to be so earned by Mr Franklin during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the Commission considers relevant.
I consider all the circumstances of the case below.
Effect of the order on the viability of WGP’s enterprise
There is no evidence before me about this matter so I am unable to conclude that an order for compensation will have an effect on the viability of WGP’s enterprise.
Length of Mr Franklin’s service
Mr Franklin’s length of service was approximately three years and eight months.
I consider that Mr Franklin’s length of service does not support reducing or increasing the amount of compensation ordered.
Remuneration that Mr Franklin would have received, or would have been likely to receive, if Mr Franklin had not been dismissed
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.[24]
Mr Franklin and WGP did not make submissions about this matter. In determining how long the employment would have been likely to continue, I have considered Mr Franklin’s period of service and his good employment record which weigh in favour of a finding that he would have been employed for a lengthy period. Taking into account the possibility that Mr Franklin’s classes may have further decreased due to the flexible nature of the employment arrangement and that he may have found work at another gym on Monday nights, I have determined that the period that Mr Franklin would have continued to work for WGP is one year that is, until 6 April 2025.
During the hearing, I indicated to the parties that I would consider the totality of Mr Franklin’s earnings at WGP, which was $275 per week, in considering remuneration that Mr Franklin would have received, or would have been likely to receive, if Mr Franklin had not been dismissed. However, this is not the correct approach as it does not take into account that:
Mr Franklin would no longer be working on Wednesdays and Saturdays if he continued working for WGP; and
Mr Franklin would no longer be instructing the BodyCombat class at 5:30pm on Monday as it was replaced by BodyBalance which he is not qualified to teach.
There is no reason why Mr Franklin could not have continued to teach the Core and BodyPump classes, as the BodyPump class was only changed to World Gym Pump because the new instructor was not qualified to instruct Body Pump. Mr Franklin was paid $40 for instructing the Core class and $60 for instructing the BodyPump class. Therefore, I find that the remuneration that Mr Franklin would have received, or would have been likely to receive, if Mr Franklin had not been dismissed is the payment received in respect of the Body Pump and Core classes for a one year period which is $5,200.
Efforts of Mr Franklin to mitigate the loss suffered by Mr Franklin because of the dismissal
Mr Franklin must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.[25] What is reasonable depends on the circumstances of the case.[26]
WGP did not make any submissions in relation to this matter.
Mr Franklin said that he started instructing one 60-minute class on Monday on a weekly basis on 8 April 2024, the week after he was dismissed from WGP, but has not been able to find replacements for the other two classes. Mr Franklin receives $60 for instructing this class.
Mr Franklin has registered with the Les Mills Job Board, an official service offered for instructors of the programs he instructs, to match qualified instructors with gyms seeking instructors. Mr Franklin also monitors unofficial Facebook pages, which is the most common method that classes are advertised, for any classes that he is available to take on a one-off or ongoing basis. Mr Franklin is part of the group communications of the gyms he instructs regular classes at, as well as some others, where they post notices when replacement instructors are required. Mr Franklin has updated his availability for additional classes with the four other gyms at which he already instructs regularly, should they wish to add to their timetable.
Based on this evidence, I find that Mr Franklin has made efforts to mitigate his loss.
Amount of remuneration earned by Mr Franklin from employment or other work during the period between the dismissal and the making of the order for compensation
Mr Franklin’s evidence was that he receives $60 per week in respect of the Monday class which he commenced on 8 April 2024. The parties gave evidence that WGP provided an additional payment to Mr Franklin on 1 May 2024 of $320 which WGP characterised as ‘notice period pay’. Therefore, the amount that Mr Franklin earned from employment or other work during the period between the dismissal and the making of the order for compensation is $3,140 comprising of:
The payment of $320 made on 1 May 2024; and
· $2,820 in respect of the Monday night class which is calculated by multiplying $60 by 47 weeks.
Amount of income reasonably likely to be so earned by Mr Franklin during the period between the making of the order for compensation and the actual compensation
I am satisfied that the amount of income reasonably likely to be earned by Mr Franklin during the two week period between the making of the order for compensation on 3 March 2025 and the payment of compensation on 17 March 2025 is $120 which is two weeks pay at the weekly rate of $60.00.
Other relevant matters
The parties did not make any submissions about other relevant matters.
How is the amount of compensation to be calculated?
As noted by the Full Bench:
[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[27] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[28].[29]
The approach in Sprigg is as follows:
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. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
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.
Step 1
I have estimated the remuneration Mr Franklin would have received, or would have been likely to have received, if WGP had not terminated the employment to be $5,200.00 on the basis of my finding that Mr Franklin would likely have remained in employment until 6 April 2025. This estimate of how long Mr Franklin would have remained in employment is the ‘anticipated period of employment’.[30]
Step 2
I have found that the amount of remuneration earned by Mr Franklin from the date of dismissal was $3,140, and that the amount of income reasonably likely to be earned by Mr Franklin between the making of the order for compensation and the payment of compensation is $120. The sum of these amounts is $3,260.
Only monies earned since termination for the anticipated period of employment are to be deducted.[31] I therefore deduct the sum of $3,260 from $5,200 which leaves an amount of $1,940.
There are 3 weeks remaining of the anticipated employment period from 17 March 2025 to 6 April 2025. I believe that Mr Franklin is likely to earn a total gross amount of $180 during this period based upon the weekly payments he is receiving for the Monday class of $60.
I have deducted the amount of $180 from $1,940 which leaves an amount of $1,760.
Step 3
I now need to consider the impact of contingencies on the amounts likely to be earned by Mr Franklin for the remainder of the anticipated period of employment.[32]
There is no evidence before me which establishes the occurrence of contingencies which might have brought about some change in earning capacity or earnings by Mr Franklin during the anticipated period of employment. I therefore do not consider there to be any evidentiary basis or that it is otherwise appropriate to deduct any amount for contingencies.
Step 4
I have considered the impact of taxation but have elected to settle a gross amount of $1,760 and leave taxation for determination.
Having applied the formula in Sprigg, I am nevertheless required to ensure that ‘the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,’[33] including my findings that:
It is likely that Mr Franklin would have remained employed by WGP until 6 April 2025 if he had not been dismissed;
Mr Franklin has taken steps to mitigate his loss by obtaining alternative employment.
Mr Franklin is currently earning less than he would if he was still employed by WGP.
I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act and that it does not include a component compensating for shock, distress and humiliation.
Is the amount of compensation to be reduced on account of misconduct?
If I am satisfied that misconduct of Mr Franklin contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
I am satisfied that misconduct of Mr Franklin did not contribute to the employer’s decision to dismiss. Therefore, the amount of the order for compensation is not to be reduced on account of misconduct.
How does the compensation cap apply?
Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a)the amount worked out under section 392(6); and
(b)half the amount of the high income threshold immediately before the dismissal.
The amount worked out under section 392(6) is the total of the following amounts:
(a)the total amount of the remuneration:
(i)received by Mr Franklin; or
(ii)to which Mr Franklin was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(iii)if Mr Franklin 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 Mr Franklin for the period of leave in accordance with the regulations.
Mr Franklin was not on leave without pay or without full pay during the 26 weeks immediately before the dismissal.
Based on evidence provided by Mr Franklin, I find that the total amount of the remuneration received by Mr Franklin during the 26 weeks immediately before the dismissal was $4,870.
This is less than half the high income threshold which applied immediately before the dismissal.[34] The amount of compensation ordered by the Commission must therefore not exceed $4,870. I have determined the amount of compensation as $1,760 gross plus superannuation which is below this amount.
Conclusion
I have found that Mr Franklin was dismissed because he accepted work at another World Gym franchise. I have found that Mr Franklin’s dismissal was harsh, unjust and unreasonable for reasons which include that there was no valid reason for the dismissal, there was no procedural fairness or consideration of alternatives to dismissal and that Mr Franklin was terminated for agreeing to work at a different World Gym franchise in circumstances where there was no express prohibition of him doing so and he was not advised that dismissal was a possible consequence.
I have determined that an order for compensation is appropriate and that WGP should pay compensation to Mr Franklin in the sum of $1,760 gross plus superannuation less taxation as required by law in lieu of reinstatement within 14 days of the date of this decision.
An order giving effect to this decision has been separately issued in PR784922.
DEPUTY PRESIDENT
Appearances:
Mr M. Franklin, Applicant
Mr M. White, General Manager of WGP, Appearing for the Respondent
Hearing details:
2024
17 December 2024
In person, Sydney
[1] [2024] FWC 3045
[2] Ibid.
[3] Witness Statement of Matthew White, Digital Hearing Book (DHB), 107.
[4] Ibid.
[5] DHB 41
[6] Ibid
[7] Ibid
[8] DHB 42
[9] DHB 44
[10] DHB 87
[11] Mohazab v Dick Smith Electronics Pty Ltd [1995] IRCA 625; 62 IR 200.
[12] 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].
[13] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[14] Ibid.
[15] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[16] Edwards v Justice Giudice [1999] FCA 1836, [7].
[17] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
[18] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[19] 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].
[20] 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].
[21] 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].
[22] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[23] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
[24] He v Lewin [2004] FCAFC 161, [58].
[25] 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].
[26] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[27] (1998) 88 IR 21.
[28] [2013] FWCFB 431.
[29] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].
[30] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[31] Ibid.
[32] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[33] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
[34] The high income threshold which applied immediately before the dismissal was $167,500.
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