Michael Theoctistou v Austaron Pty Ltd t/as Austaron Surfaces

[2010] FWA 1695

[2010] FWA 1695

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s 394 - Application for unfair dismissal remedy

Michael Theoctistou
v
Austaron Pty Ltd t/as Austaron Surfaces
(U2009/12732)

DEPUTY PRESIDENT SAMS SYDNEY, 5 MARCH 2010

Termination of Employment - Arbitration.

[1] On 9 October 2009, Mr Michael Theoctistou (‘the applicant’) filed an application, pursuant to s 394 of the Fair Work Act 2009 (‘the Act’), for relief from his alleged unfair dismissal by Austaron Pty Ltd t/as Austaron Surfaces (‘the respondent’) on 1 October 2009. The application thereby complies with s 394(2) of the Act.

[2] The applicant commenced employment with the respondent as a Commercial Manager on 3 December 2007, following his signing of a letter of offer (Exh A) which describes him reporting to the National Sales and Marketing Manager. His commencement salary was $65,000 plus bonus. The offer relevantly provides for Notice of Termination of one month by either party, in writing. There is no reference to summary dismissal for misconduct.

[3] The applicant was dismissed during a meeting with one of the respondent’s directors, Mr Sam Nam on 1 October 2009. The respondent described the reason for the applicant’s dismissal as ‘serious and wilful behavioural misconduct’, although I note on the applicant’s employment separation certificate, the identified reasons were ‘shortage of work’ and ‘unsatisfactory work performance’. There was no dispute that the applicant was paid four weeks pay, in lieu of notice, subsequent to his dismissal, presumably in accordance with the letter of offer referred to above. In any event, as the argument was developed, it became apparent that the respondent regarded a number of incidents involving the applicant, in particular the sending of an allegedly offensive email, as a sound basis for the applicant’s dismissal for misconduct.

THE EVIDENCE

[4] Both parties appeared unrepresented at the arbitration of the matter. The statements relied upon by both parties were merely a recitation of the reasons why the applicant said he was unfairly dismissed and the respondent’s reply that he was guilty of misconduct. Unsurprisingly, the oral evidence was, to put it kindly, free flowing, and conducted without an adherence to the correct procedure for asking questions and answering them. Both parties were continually asking each other questions or making statements. Understandably, the Tribunal was minded to give the parties relatively free rein in their oral evidence and, doing the best I can from this approach, I am able to glean the following evidence relevant to the case.

Applicant’s Evidence

[5] Another of the respondent’s directors, Mr Brett Worden, began his questioning of the applicant by querying whether he was, in fact, covered by the unfair dismissal provisions of the Act. Mr Worden asserted that the applicant was a senior manager, with a month’s termination clause in his contract of employment. The applicant replied by saying he was paid 100% of his income by the respondent and was, at all times, an employee under the respondent’s control and direction.

[6] The applicant agreed that he had set up and registered the name of a new business on 14 August 2009, and shortly after he was dismissed he had phoned staff of the respondent to tell them he had done so. He denied registering the new business at about the same time as he was having trouble with Management. The applicant said he had merely seen a business opportunity and nothing had yet come of it. The applicant also conceded that he had rung all of the staff on the day he was dismissed and may have told ‘one or two’ that he had been unfairly dismissed and would ‘take on’ Management. The applicant said that even after he had been dismissed, he had two other jobs to do for the respondent and did them on the afternoon of 1 October 2009.

[7] Mr Worden asked the applicant about a number of arguments and issues he had with Management leading up to his dismissal. The applicant agreed he was frustrated with the delays in access to the Internet and despite assurances that it had been fixed, he would go into the office and nothing had been done.

[8] The applicant agreed he also had issues with the Management’s marketing and pricing policies and when he had made suggestions they were ‘knocked on the head’. He conceded that on one occasion he had stormed out of Mr Nam’s office during a management meeting and refused to return. He said that they (Management) did not know how to run a business. He said there was no point staying in the meeting and he had other appointments to attend to.

[9] The applicant believed it was not appropriate to present the respondent’s colour samples in four year old tattered boxes. Mr Worden suggested that the respondent’s clients (cabinet makers) operated in dusty workshops or from the back of Utes. The applicant said he was told to remove the boxes from clients who appeared not to be using them. The applicant said he also saw an opportunity to reduce the costs of packaging the respondent’s product, but this had also been rejected. Despite his suggestions being rejected, he went to a new marketing manager to have her agree to the suggestion.

[10] Mr Worden asked the applicant about the computer problems having been caused by a change in server. The applicant said he could not access emails or the customer database. Someone had been in and changed his access codes. He said he had to frequently enter new passwords and it still would not work.

[11] Mr Worden asked about the offensive email to Mr Nam sent two days after walking out of the management meeting, which said “Sam, can you please fix this f*^%# computer, it’s not working again”. The applicant said this email was a result of frustration at having been told on Sunday night that the computer was up and running and then finding it was not on Monday morning. The applicant said he felt his actions were justified. The applicant said that Mr Nam rang him on the afternoon of 30 September 2009, and told him to come in for a meeting at 10:00am the next day. The applicant then rang Mr Worden and asked what the problem was. Mr Worden had told him that Mr Nam just wanted to tell him the computer was up to speed. Mr Worden denied this (in a two way conversation during cross-examination) and said that Mr Nam wanted to sit down and discuss his behaviour over the last couple of weeks and how it might be modified. The meeting lasted 20 minutes. The applicant insisted that the only thing discussed at the meeting was the email. Mr Nam wanted him to apologise, but he said it was not meant to be offensive. Mr Nam then asked something about the applicant’s comment “you’re IT people”. He denied he was being racist. It was sheer frustration. The email was not meant to be offensive so he did not think he had anything to apologise for. The applicant believed there was a normal business relationship internally within the office, with employee’s venting their opinions, sometimes with raised voices.

[12] The applicant said that initially he had wanted his job back; but not now. At the conciliation, the applicant had rang another employee and told him that Mr Worden had said he was intending to sack him too. The applicant said that he had phoned a Mr Barclay and said “what the hell did you say to Worden”, because something was said in the conference which could only have come from him. However, he did agree he had said to Mr Barclay “Perhaps you’re next”. He denied this was inappropriate conduct. Mr Worden said that he and Mr Nam had agreed to put the applicant back on until he had made the call to Mr Barclay. The applicant agreed that the conciliator had said the phone conference was strictly confidential. However, he had not discussed the exact details with Mr Barclay.

[13] In questioning from the Tribunal, the applicant said that he was told the dismissal meeting with Mr Nam was about the computers, he had no warning of his dismissal and was simply told “take your things, leave your phone and go”.

The Respondent’s Evidence

[14] Mr Brett Worden was asked by the applicant if he (the applicant) had been guilty of any of the definitions of serious misconduct under the Act’s Small Business Fair Dismissal Code. Mr Worden said ‘no’, but he believed the abusive email to Mr Nam might be considered violence in the workplace. However, he then agreed it really was not a violent note. Mr Worden said that despite giving no direct warnings that the applicant was being dismissed, he knew the reason. However, Mr Worden agreed that the applicant was not told verbally, or in writing, that his position was at risk because of his behaviour, given no opportunity to rectify his behaviour, nor did he provide him with additional training. However, Mr Worden believed the applicant was warned by Mr Nam during the meeting.

[15] Mr Worden said he had not seen the offensive email at the time, as it was not necessary. Its contents were self-evident. It was offensive, not humorous. Mr Worden denied he had trouble communicating with Mr Nam, who had been in Australia for 22 years.

[16] Mr Worden was asked about the different reasons for dismissal on the applicant’s separation certificate. He said the applicant was “sacked for unsatisfactory performance and behaviour”.

[17] Mr Sam Nam (Director) described the Management meeting in which the applicant stormed out and, despite being called back, did not do so. This occurred in front of other staff. As to the termination meeting, Mr Nam said it lasted around 20 minutes. He thought it was both a formal and informal meeting – a normal meeting.

[18] As to the email, Mr Nam said he was very surprised when he found it. It was directed personally at him and had been left so anyone could see it. Mr Nam agreed he had heard the word (fuck) before and that the applicant was not the only one to use it around the office. Mr Nam said he does not use the word and was uncomfortable about it and he did not like it. However, he did not interfere if other people used the word to each other. Mr Nam said he could not remember the applicant using the word in meetings with him. He believed the email was designed to insult him. He was stunned and asked “who is this? - why?”

[19] In further evidence, Mr Nam said that everyone in the office had been affected by the server not working properly. There were other means of communicating – by phone, car travel and mobile. The majority of contact is face to face or over the phone. The computer was not a big issue. Mr Nam agreed that over two years the applicant had not intentionally sought to offend him or anyone else in the company. Mr Nam said he could not accept this incident as ‘one off’ after the other incidents in the previous two weeks.

[20] In re-examination, Mr Nam said that all the sales team, bar two, work from home on their own computer and, in any event, the database can be accessed without the email. Mr Nam said that in the meeting the applicant stormed out of, and the dismissal meeting, the applicant had never told him he had other appointments to attend to.

SUBMISSIONS

For the applicant

[21] The applicant submitted that the reason for his dismissal was not justified. Mr Worden had used different words on different occasions. It was alleged that he did not need to do anything on the computer, but this was incorrect. Back up information was necessary for customers. The failure of the computer caused lots of issues which were not addressed. Everybody in the Company relies on the computer to keep in contact with customers. The applicant claimed that he had guided the Company in directions they had not gone before. He said that when he was appointed, he added the details of three and a half thousand customers to the Company database, which he had gathered over 15 years.

[22] The applicant submitted that the email to Mr Nam was nothing more than a vent of frustration. He meant no disrespect to Mr Nam or the Company. He had not engaged in collusive pricing. Moreover, he had had to write to Mr Worden to tell him not to tell lies about his previous employer. He described Mr Worden as very generous, but then said he is quite stupid and quite loose with the truth.

[23] The applicant put that the respondent had no intention of re-employing him at the conciliation. They had made up their minds to get rid of him to save money. They had acted inappropriately.

For the respondent

[24] Mr Worden submitted that the applicant had been a valuable employee for 18 months until about the time he set up his own new business. The respondent believed that he was using the Company to fund his set-up time and when he was questioned about his performance and asked to verify his whereabouts, he took offence and his attitude changed – he stormed out of meetings, played directors off one another, sent an offensive email and then would not apologise or agree to modify his behaviour.

[25] Mr Worden agreed that the applicant was given no written warning that he was likely to be dismissed, but during the 20 minute interview he had repeatedly said he would not change his behaviour and he did not care. In any event, the applicant was paid four weeks pay, even though he had misconducted himself.

[26] Mr Worden believed the applicant was seeking compensation to fund his new business. His dismissal was not a cost cutting exercise, as his replacement was offered a higher salary. Mr Worden queried if the whole issue was about the computer failures, the laptop had sat on his desk for the entire period of his employment, when he could have taken it home.

In reply

[27] The applicant said that it was necessary to use the computer in the office. The business is very difficult and competitive. Pricing is crucial. The applicant said that every argument he had with Management had been for the betterment of the Company, but they did not understand or did not want to hear. He knew what the market required.

[28] The applicant said that Mr Worden had never sought to address any issues he had with Mr Nam. He said that there was nothing wrong with him setting up a company and seizing an opportunity. Mr Worden himself had other companies. The applicant submitted he had no intention to leave the respondent as he had a young family and needed long term security. His wife now has to work two days a week. He said he had only earned $2,800 in four months and had applied for several positions.

[29] The applicant said he had no warning he was to lose his job and had not meant the email to be offensive. His dismissal was not justified.

CONSIDERATION

Legislative requirements

[30] Fair Work Australia (FWA) has been given the statutory power under Part 3-2, Unfair Dismissal, of the Act to determine whether a national system employee has been unfairly dismissed and to grant appropriate remedies if such a finding is made. The objects of the Part are expressed as follows:

381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

The concept of a ‘fair go all round’ was first used by Sheldon J in Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95, where his Honour said at page 99:

The issues in this case are important as they raise the question of the rights of the permanent clerical and/or administrative staff when shifts in power in a union take place. I do not agree with the submission of Mr Riordan that a union, because of its general concern with the welfare of employees, has a peculiar duty to act fairly and considerately towards its own permanent employees. As I see it, its rights and duties in this regard are identical with those applying to any employer. If this is so, in order to justify, in its discretion, intervention by the Commission by way of reinstatement, it must be shown in this case that the branch executive exercised its right of dismissal unfairly even though it was perfectly legal and this should be determined by standards neither more strict nor more relaxed than those applicable to any employer. I say “unfairly” because adjectival tyranny should be resisted and I believe that in the modern context expressions used in the older cases such as “harsh”, “oppressive” and “unconscionable” as determining as to whether intervention by an industrial authority is in its discretion permissible are properly interpreted on the basis simply of firstly deciding in all the circumstances, even though in the dismissal (be it summary or on notice) the employer has not exceeded his common law and/or award rights, whether the employee has received less than a fair deal. Mr Commissioner Manuel in a recent case put it in a nutshell and in language readily understood in the industrial world when he conceived his duty to be to ensure “a fair go all round”. In my view, the use of the old adjectives, with their overtones from other jurisdictions, lends to distort this basically simple approach in that they can be strained to mean that an employer can be less than fair in exercising his right to dismiss and yet stand outside the permissible area within which an industrial authority in its discretion may act. It is a question of emphasis rather than substance as these adjectives have frequently been used in conjunction with and as alternatives to such expressions as “unfair”, “unjust” and “unfair dealing”. The last expression was used as an alternative to “injustice” and “oppression” as far back as 1921 in the historic Bank Officers Case, and it is inconceivable that a more rigid test should be applied half a century later. The less fetters there are on the discretion the better (none appear in the Act) but it is all-important that it should be exercised soundly. The objective in these cases is always industrial justice and to this end weight must be given in varying degrees according to the requirements of each case to the importance but not the inviolability of the right of the employer to manage his business, the nature and quality of the work in question, the circumstances surrounding the dismissal and the likely practical outcome if an order of reinstatement is made. There certainly may be cases where the dismissal had many elements of unfairness but an industrial authority if it was convinced of the practical uselessness of trying to re-establish the employer-employee relationship, would not intervene at all. There may be other cases where there are reasonable prospects for the future of the relationship if clarifying conditions are imposed.

[31] Mr Worden, in his opening submissions, raised for the first time whether the applicant was, in fact, covered by the relevant provisions of the Act. It was said that this was because he was bound to a letter of offer which provided four weeks salary on termination, by either party, in writing. Despite the lateness of such a jurisdictional claim, and accepting Mr Worden was not represented, I would deal with this submission at the outset by concluding that Mr Worden’s basis for such a claim is misconceived. I have no doubt that the applicant was a person protected from unfair dismissal (see s 382) being a national system employee who has completed a minimum period of employment (see s 383) and whose 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 (see s 382(b)(iii)).

[32] There is a mandatory requirement at s 387 for FWA to take into account the following matters in determining whether the applicant’s dismissal was ‘harsh, unreasonable or unjust’:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.

[33] It seems plain enough that these criteria are not in conflict and, indeed, are consistent with the much quoted definition of the expression ‘harsh, unreasonable and unjust’ found in Byrne v Australian Airlines Limited (1995) 185 CLR 410:

“--- It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

Was the dismissal ‘harsh, unreasonable or unjust’?

[34] In my view, this case is not really one of summary dismissal for gross or wilful misconduct, but rather dismissal for unsatisfactory conduct. I consider that the respondent’s inexperience and lack of expertise in dealing with an employee who was proving difficult to manage, resulted in it mischaracterising the real nature of the dismissal. My view is fortified by:

a) the respondent’s own handling of the dismissal in that it paid him four weeks in lieu of notice, which would not ordinarily be required for summary dismissal;

b) reviewing what Mr Worden described as the circumstances leading to the applicant’s dismissal; and

c) the respondent’s confusing reasons cited on the applicant’s separation certificate.

[35] That said, I find that the applicant was very much the architect of his own demise and, in that respect, I also find that there was a valid reason/s for his dismissal based on his conduct; or more correctly, his unsatisfactory conduct. The notion of what constitutes a valid reason (for dismissal) was discussed in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, where Northrop J, albeit in the context of the Industrial Relations Act 1988, said at page 373:

In its context in s 170DE(1) refers adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC.

[36] I find that the applicant’s unsatisfactory conduct included:

• storming out of a management meeting and refusing to return when directed. This incident occurred in the presence of other staff;

• the making of a major issue of the breakdown of the office computer when all other staff were similarly effected. This was in the context of him having other means of communicating with customers and when the work he was performing primarily involved ‘face to face’ contact;

• undermining Management authority by taking a rejected idea to another newly appointed manager; and

• sending an offensive email to Mr Nam.

[37] In addition, there were three other issues which arose after the applicant’s dismissal which demonstrated an ongoing employment relationship between employer and employee was untenable. Firstly, it was reasonable for the respondent to put ‘two and two together’ when it learnt after the applicant’s dismissal that he had registered a new business opportunity about the same time as his behaviour was showing signs of concern. It was reasonable to assume that the two circumstances were very much related; although there was no evidence that the applicant either abused his fiduciary duties to his employer or that his new business was in direct competition with the respondent and therefore inimical to his obligations as an employee.

[38] Secondly, the applicant had told other employees he had been unfairly dismissed and had set up a new company, Clean Strip, purchased a Ute and organised business flyers on the day of his dismissal. Mr Peter Wilson, State Sales Manager – Western Australia, expressed surprise that he had ‘set up a new company so fast’. However, what the applicant had told Mr Wilson and other staff was plainly untrue, as Clean Strip was registered on 14 August 2009.

[39] Thirdly, despite the confidentiality of the conciliation of this application on 29 October 2009, the applicant did not deny that during a break in the conference, he had rang another of the Company’s employees, Mr Barclay, and told him “Perhaps you’re next”. In my view, this was grossly improper, totally inappropriate and a direct repudiation of the conciliator’s advice that the conciliation was to be strictly confidential.

[40] These matters raise the question as to the relevance of such conduct to any finding as to whether the applicant’s dismissal was ‘harsh, unreasonable or unjust’ and whether the remedy following a positive finding in that regard should be reinstatement/re-employment. The matters fall into two categories; conduct which comes to light after the dismissal and actual conduct after the dismissal.

[41] The general approach at common law is that facts which come to light after an employee’s dismissal may be relied on to defend a decision to terminate the employee’s dismissal; subject to one important caveat – provided those facts existed at the time of the dismissal: See Boston Deep Sea Fishing v Ansell (1888) 39 Ch D 339. This approach is also reflected in the following extract from Byrne v Australian Airlines Ltd at 430:

…facts which existed at the time of dismissal, but which come to light only subsequently, might justify the dismissal when otherwise it would be harsh, unjust or unreasonable.

The High Court in Byrne v Australian Airlines referred to the decision of Von Doussa J in Lane v Arrowrest Group Pty Ltd (1990) 27 FCR 427 at 456, where his Honour said:

“In my opinion it is still open to an employer to justify a dismissal by reference to facts not known to the employer at the time of the dismissal, but discovered subsequently, so long as those facts concern circumstances in existence when the decision was made. Whether the decision can be so justified will depend on all the circumstances.”

[42] However, in the second category the conduct of an applicant occurring after the dismissal may be relevant to a remedy order following a finding of unfairness. In Printing and Kindred Industries Union v Vista Paper Products (unreported, Decision 1357/1991, Deputy President Riordan, 13 December 1991), Riordan DP of the Australian Industrial Relations Commission considered that the later conduct could be relevant only to the question of whether there had been a breakdown in the employer/employee relationship such as to make the restoration of the relationship impossible, or in the words of the present Act ‘reinstatement of the person is inappropriate’, (Sn 390(3)(a)).

[43] Put more generally then, I would make these further observations. There is a line to be drawn between having vigorous and robust discussions in a sales meeting, putting suggestions and weighing the pros and cons while at the same time, ensuring the respect for the position of the employer and for an employee to comply with all reasonable directions of the employer. On the applicant’s own evidence, he failed in this regard and significantly overstepped the mark. In my judgement, the applicant was contemptuous of the authority of Management and believed that his experience and expertise were far superior to anyone else’s. He resented it when his suggestions were rejected. In short, he was right and everyone else was wrong. This attitude was no better demonstrated than when he said in submissions that Mr Worden “was quite stupid and quite loose with the truth”.

[44] Some comment obviously needs to be made about the offensive email. Views on this email will vary from individual to individual. Was it really offensive? Was it meant to be offensive? Was it just the product of the applicant’s frustration? Should Mr Nam have taken it personally? On one view, it would be highly unlikely, viewed in isolation, that the email would have resulted in the applicant’s dismissal. However, the email must be seen in light of the other conduct of the applicant and his obvious disdain for Management direction. Mr Nam gave evidence about how he felt about the email. Given his cultural background and demeanour in the witness box, I have no reason to doubt that he was surprised and upset by the content and obvious tone of the email. It is no answer to say, as the applicant sought to defend his position, that he meant no offence and Mr Nam should not have taken it personally. That is not the point at all and, even if it was, it does not make sense, if the applicant accepted Mr Nam’s offence, as to why he did not apologise. He said he did not believe there was anything to apologise for.

[45] Let me make it clear. It is not for the sender of an offensive email to decide whether the recipient finds it offensive or not, nor is the view of the sender necessarily relevant to whether the words used are offensive. For example, how often have we heard the excuse of those who sprout racist comments, that they were not meant to be offensive. The test is whether, on any reasonable objective analysis, that a person receiving such an email might reasonably form the view that he or she is offended. I have no doubt that this is how Mr Nam felt.

Procedural Fairness

[46] A number of the criteria identified in s 387 of the Act are more commonly described as procedural fairness or natural justice issues. I do not apprehend that this Act, either in a policy or statutory sense, removes or alters FWA’s obligation to consider such matters in s 394 applications. Accordingly, I refer again to the authority often cited in Byrne & Frew v Australian Airlines, concerning procedural fairness in unfair dismissals. Their Honours McHugh and Gummow JJ said at page 465 to 475:

“The distinction between procedure and substance is elusive. This is so even in those fields of private international law, the statute law dealing with limitations of actions and the effect of repeal upon accrued rights, and the Statute of Frauds, where it has an entrenched operation (217). In our view, it is unhelpful and contrary to the tenor of the Award to introduce it into cl 11(a).

That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh, unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable (218). But the question under cl 11(a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking to the first issue before there is seen to be any need to enter upon the second.”

[47] I am satisfied that there was a valid reason for the applicant’s dismissal. It was neither capricious, fanciful, spiteful nor prejudiced. I am further satisfied that the applicant was told by Mr Nam of the reason for his dismissal and/or he would have been well aware of the reason in the meeting of 1 October 2009 (s 387(b)). The applicant had not requested a support person to be present at the meeting (s 387(d)), although this was understandable, given he had not known it was to discuss his dismissal.

[48] Notwithstanding these findings, I would also conclude that on the respondent’s own evidence, it must have been in breach of s 387(c) and (e) of the Act. There can be no doubt that the applicant was not given a proper opportunity to respond to his unsatisfactory conduct since it was ‘sprung’ on him at the meeting on 1 October 2009. Importantly, however, there was a concession, appropriately made by Mr Worden, that the applicant had been given no warning that his conduct might lead to his dismissal and consequently, given no reasonable opportunity to rectify or modify his behaviour. This was in clear breach of s 387(e) of the Act; although it is open to speculate, given his responses to Mr Nam, whether he would have genuinely done so, or at all.

[49] There is also good reason for me to conclude that the Small Business Fair Dismissal Code was not applied in this case and therefore the dismissal was not consistent with it (see s 385(c)). As I have said earlier, in accordance with s 387(f) and (g), I have taken into account the size of the employer’s business, its lack of industrial relations expertise and its lack of finesse in managing the warning and dismissal process of the applicant. Accordingly, I find the applicant’s dismissal was ‘unreasonable’, but not ‘harsh’ or ‘unjust’ within the meaning of s 387 of the Act.

Remedy

[50] Div 4 of Pt 3-2 of Ch 3, deals with the remedies FWA may order if a finding of unfairness is made. Plainly, the primary remedy is reinstatement. However, s 390(3) provides as follows:

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

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

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

[51] I am able to comfortably conclude that the reinstatement of the applicant in this case is not appropriate for the following reasons (not in order of priority):

a) the applicant does not seek it;

b) there was a complete breakdown in the necessary trust and confidence between the employee and the employer as demonstrated by such comments by the applicant as, ‘Mr Worden is stupid’;

c) I could not be confident that the applicant would rectify his obvious contempt for the Management’s business expertise; and

d) the unlikelihood the applicant would follow the reasonable directions of Mr Worden or Mr Nam.

[52] Section 392(2) identifies the mandatory criteria for determining the amount of compensation the applicant should receive by way of order of FWA. The section is expressed as follows:

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), FWA 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 FWA considers relevant.

[53] In taking all these matters into account, particularly the applicant’s relatively short service, and adopting the approach of a ‘fair go all round’, I consider that an amount of six weeks compensation at the applicant’s former weekly rate of pay, plus car allowance is warranted in this case. However, having regard for my earlier findings, this must be a case which attracts my consideration under s 392(3) of the Act. That section relevantly states:

Misconduct reduces amount

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

[54] Accordingly, I find that the applicant’s dismissal was ‘unreasonable’, it was attended by procedural unfairness and his reinstatement is inappropriate. I would conclude that an appropriate amount of compensation, pursuant to s 392(2) and (3) of the Act, is three weeks pay at the applicant’s ordinary rate of pay at the time of dismissal, plus car allowance.

ORDERS

[55] Pursuant to s 392 of the Fair Work Act 2009, Fair Work Australia orders that:

1. The respondent, Austaron Pty Ltd t/as Austaron Surfaces, shall pay to the applicant, Mr Michael Theoctistou, an amount of compensation equivalent to three weeks pay at ordinary time earnings gross, plus car allowance.

2. The amount in Order 1 shall be payable within 28 days.

3. Liberty to apply is available to either party in the event of any disagreement as to the calculation referred to above.

4. These proceedings are concluded.

DEPUTY PRESIDENT

Appearances:

Mr M Theoctistou, unrepresented

Mr B Worden, for the Company

Hearing details:

2010

SYDNEY

8 February

Decision Summary

TERMINATION OF EMPLOYMENT – unfair dismissal of commercial manager – applicant said to be dismissed for misconduct – whether dismissal ‘harsh, unreasonable or unjust’ – whether applicant national system employee – applicant set up new business – applicant stormed out of management meeting – claims computer not operational leading to applicant’s frustration – allegedly offensive email sent to Director – applicant called to meeting – no reason given for meeting – applicant considered email not offensive – refusal to modify behaviour – applicant dismissed during meeting – no warnings of dismissal – paid four weeks notice – activities and conduct of applicant after dismissal – conciliation conference – whether dismissal for misconduct or unsatisfactory performance – procedural fairness – Small Business Fair Dismissal Code – applicant seeks maximum compensation. UNFAIR DISMISSAL – objects of the Act’s Unfair Dismissal Part – concept of ‘fair go all round’ – applicant a national system employee protected from unfair dismissal – jurisdiction established – criteria for considering harshness etc. – not a case of summary dismissal for gross misconduct – dismissal for unsatisfactory conduct – valid reason/s for dismissal – applicant architect of his own demise – post dismissal conduct relevant – other facts come to light after dismissal relevant – applicant’s contempt for Management – reasonable that email considered offensive by recipient – applicant not given any warning of his dismissal – applicant not given a reasonable opportunity to modify behaviour – breach of Small Business Fair Dismissal Code – applicant denied procedural fairness – applicant’s dismissal ‘unreasonable’ but not ‘harsh’ or ‘unjust’ – reinstatement inappropriate – appropriate compensation discounted by applicant’s conduct – orders of compensation made.
Theoctistou, Michael v Austaron Pty Ltd t/as Austaron Surfaces
U2010/12732				[2010] FWA 1695
Sams DP			Sydney	5 March 2010
Citations: Boston Deep Sea Fishing v Ansell (1888) 39 Ch D 339 Byrne & Frew v Australian Airlines Limited (1995) 185 CLR 410 Lane v Arrowrest Group Pty Ltd (1990) 27 FCR 427 Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95 Printing and Kindred Industries Union v Vista Paper Products (unreported, Decision 1357/1991, Deputy President Riordan, 13 December 1991) Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371

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