Michael Thomas v Oz Design Furniture Ballina Pty Ltd
[2024] FWC 880
•5 APRIL 2024
| [2024] FWC 880 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Michael Thomas
v
Oz Design Furniture Ballina Pty Ltd
(U2023/12967)
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 5 APRIL 2024 |
Application for an unfair dismissal remedy – valid reason – incapacity to perform the inherent requirements of a position – dismissal not harsh, unjust or unreasonable – application dismissed.
Mr Michael Thomas was seriously injured in a motor vehicle accident on 7 May 2023. The accident was not related to Mr Thomas’s employment with Oz Design Furniture Ballina Pty Ltd (Oz Design) as the Store Manager of Oz Design’s Ballina store. Mr Thomas was absent from work for about four months (7 May 2023 to 2 September 2023). He was then fit for limited hours over the following three and a half months. On 20 December 2023, Oz Design provided Mr Thomas with a letter entitled “Notice to dismiss due to Physical Incapacity”. The letter informed Mr Thomas that his position of Store Manager would “cease with immediate effect” and he was offered the opportunity to continue working with Oz Design in a sales role on a part-time basis. Mr Thomas rejected the offer of part-time work.
Mr Thomas contends that he was dismissed, and his dismissal was harsh, unjust and unreasonable. Oz Design contends that it did not dismiss Mr Thomas, and in any event, his alleged dismissal was not harsh, unjust or unreasonable.
I conducted a determinative conference in relation to the matter, by video conference, on 27 March 2024. Mr Thomas gave evidence in support of his case. Oz Design adduced evidence from Ms Catherine Dodd, Retail Operations Manager - Northern NSW, and Mr Jason Kerr, National Retail Operations Manager.
Initial matters to be considered
Section 396 of the Fair Work Act 2009 (Act) sets out four matters which I am required to decide before I consider the merits of Mr Thomas’s application.
There is no dispute between the parties and I am satisfied on the evidence that:
(a)Mr Thomas’s application was made within the period required in s 394(2) of the Act;
(b)Mr Thomas was a person protected from unfair dismissal;
(c)Oz Design was not a “small business employer” as defined in s 23 of the Act, so the Small Business Fair Dismissal Code does not apply to the dismissal; and
(d)Mr Thomas’s dismissal was not a case of genuine redundancy.
Was Mr Thomas dismissed?
Applicable principles
The question of whether a person has been dismissed is governed by s 386 of the Act. It relevantly provides:
(1) A person has been dismissed if:
(a) the person’s employment with his or his employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or his employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or his employer.
(2) However, a person has not been dismissed if:
…(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.
The expression termination “on the employer’s initiative” in s 386(1)(a) is a reference to a termination of the employment relationship and/or termination of the contract of employment[1] that is brought about by an employer and which is not agreed to by the employee.[2]
In circumstances where the employment relationship is not left voluntarily by the employee, the focus of the inquiry under s 386(1)(a) 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.[3]
Section 386(1)(b) of the Act concerns the resignation of an employee where the resignation was “forced” by conduct or a course of conduct on the part of the employer. The question of whether a resignation did or did not occur does not depend on the parties’ subjective intentions or understandings.[4] Whether an employee resigned depends on what a reasonable person in the position of the parties would have understood was the objective position, based on what each party had said or done, in light of the surrounding circumstances.[5]
The test to be applied in determining whether a resignation was “forced” within the meaning of s 386(1)(b) is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of the employer’s conduct such that the employee had no effective or real choice but to resign.[6] The requisite employer conduct is the essential element.[7]
Relevant facts
Mr Thomas was initially employed by Oz Design as a full-time Sales Assistant. In 2022, Mr Thomas was promoted to the role of Store Manager.
Mr Thomas’s role in the position of Store Manager was governed by a written contract of employment dated 24 August 2022. The contract relevantly states:
Mr Thomas is employed “in the capacity of a Store Manager on a Full Time basis”;
Mr Thomas “will be required to work a minimum of 38 hours per week”; and
As to Mr Thomas’s role, “The staffing and skill requirements of the Company will vary from time to time. Accordingly, the scope of your duties, authority of title may change at the absolute discretion of the Company”.
Although the contract gave Oz Design some ability to change the scope of Mr Thomas’s duties and title as a Store Manager, it did not confer on Oz Design the unilateral right to demote Mr Thomas to a lower-level position, such as Sales Assistant, or to a part-time role.
On 20 December 2023, Mr Thomas met with Ms Dodd. I accept Ms Dodd’s evidence that she said to Mr Thomas words to the following effect at this meeting:
Unfortunately, we are dismissing you from your position as Store Manager. The store can no longer operate efficiently without a manager present full time. The sales have declined significantly, the presentation of the store needs constant monitoring and the staff need direction. I’m sorry that this accident has happened to you however we were in the hope that you would be increasing your hours by now to your full time capacity. We would like to offer you to stay on in a part-time role in line with your nominated treating doctor’s advice and capacity that he has reduced your hours to. Please take some time to think about that offer as you are a valued team member and sales is something you really love doing and helping customers.
Ms Dodd also provided a letter, dated 14 December 2023, to Mr Thomas at the meeting on 20 December 2023. The letter states:
Dear Michael
Notice to dismiss due to Physical Incapacity
The Company has conducted a review of the performance of the store since you took leave in May 2023.
From May 2023 to date the store is down approximately 36% on a Like for Like basis.The Company is no longer in a financial position to allow this store to continue to run without a full time Manager
Most recent medical evidence provided by you to us now requires you to work less hours (2 days a week). After waiting for over 6 months we were of the hope you would be increasing your hours at the store rather than further reducing them to the point where it has become untenable for us to simply ignore.
The Fair Work Act 2009 protects an employee from being dismissed due to a temporary absence for illness or injury for up to 3 months, or up to 3 months in total over a 12 month period, or where an employee is on paid personal/carer's leave for the duration of the absence. After 3 months it becomes a question of whether the employee is likely to return to their duties in the short or medium term.
The effluxion of time since May 2023 and the medical evidence provided to us suggests you will not be in a position to return to full time work.
The substantive part of your role requires you to be on site on a full time basis managing the store and making sales. Due to your ongoing Physical incapacity you are not able to maintain your normal high level of sales nor manage the store and the staff.
It follows you are therefore unable to perform the inherent requirements of your job as Manager. Accordingly your position of Manager will cease with immediate effect commencing Sunday 17th of December 2023 and you will be paid your notice period under your existing Employment Agreement.
In the meantime could you please indicate to us if you wish to continue working on a part-time basis under an Award arrangement as we would like to be able to have you redeployed should this work for both parties. The ongoing hours can be discussed between myself in the first instance and later by the new Manager we end up appointing.
Kind regards
Cath Dodd
Retail Operations Manager Northern NSW
On 21 December 2023, Mr Thomas sent a text message to Ms Dodd in the following terms:
Hi Cath,
I just wanted to let you know that I will not be working through my notice period.
I also will not be accepting the part time position.
Please ask Bella to pay out my annual leave and my commissions earned during my absence.
Thank you very much for the offer. I know that you were only doing your job and the decision was out of your hands.
Consideration
Oz Designs clearly repudiated Mr Thomas’s contract of employment when it removed him from his full-time position as Store Manager and offered him a part-time position at a lower level. On 21 December 2023, Mr Thomas rejected the offer of part-time employment, accepted the repudiation, and brought his contract of employment to an end. In so doing, Mr Thomas did not resign, as contended by Oz Design.
The termination of Mr Thomas’s contract of employment was on Oz Design’s initiative, because the termination was brought about by Oz Design and it was not agreed to by Mr Thomas.
The exception to a dismissal in s 386(2)(c) of the Act does not apply to this case, because Mr Thomas did not remain employed with Oz Design after the demotion.
Accordingly, I am satisfied that Mr Thomas was dismissed within the meaning of s 386(1)(a) of the Act.
Was Mr Thomas’s dismissal unfair?
Section 387 of the Act requires that I take into account the matters specified in paragraphs (a) to (h) of the section in considering whether Mr Thomas’s dismissal was harsh, unjust or unreasonable. I will address each of these matters in turn below.
Was there a valid reason for Mr Thomas’s dismissal (s 387(a))?
Legal principles
The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal.[8] A valid reason for dismissal is one which is “sound, defensible and well founded”[9] and is not “capricious, fanciful, spiteful or prejudiced.”[10]
The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[11] The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).[12]
In J Boag and Son Brewing Pty Ltd v Allan John Button[13] a Full Bench of the Commission set out the proper approach to be taken in determining whether there is a valid reason based on the employee’s incapacity to perform the inherent requirements of the job:
[22] When an employer relies upon an employee’s incapacity to perform the inherent requirements of his position or role, it is the substantive position or role of the employee that must be considered and not some modified, restricted duties or temporary alternative position that must be considered.
...
[29] It is well established that a valid reason is one which is “sound, defensible or well founded”, but not “capricious, fanciful, spiteful or prejudiced”. An inability to perform the inherent requirements of a position will generally provide a valid reason for the dismissal. But this will not be invariably so. For example, the dismissal may be prohibited by State workers compensation legislation or otherwise unlawful. It is highly likely, bordering on certain, that there could be no valid reason for the dismissal in that event. Further, a dismissal based on a capacity to perform the inherent requirements of a position may not be a valid reason for dismissal if the employee has a capacity to perform the inherent requirements of their job. Plainly there can be a valid reason for the dismissal of an employee where he or he simply does not have the capacity (or ability) to do their job. But again, there may be circumstances where such an incapacity does not constitute a valid reason in the relevant sense.
In Jetstar Airways Pty Ltd v Neeteson-Lemkes,[14] a Full Bench of the Commission held (at [53]-[59]) as follows (references omitted):
[53] …Consideration of the validity of that reason [related to capacity] requires three interconnected elements to be considered: firstly, whether Ms Neeteson-Lemkes was capable of performing the inherent requirements of her role as at the date of dismissal; secondly, whether Ms Neeteson-Lemkes would be able to perform the inherent requirements of her role at some time in the future; and thirdly, whether there was some reasonable adjustment which could be made to her role to accommodate any current or future incapacity. In accordance with the reasoning of the Full Bench in J Boag and Son Brewing Pty Ltd v Allan John Button, a reason for dismissal based upon an injured employee’s incapacity to perform the inherent requirements of his or her position or role must be assessed against the requirements of the substantive position or role, not as it may be modified or restricted in order to accommodate the employee’s injury…
…
[55] …On one view, those post-dismissal expert opinions, if accepted, would demonstrate that at the time of the dismissal Ms Neeteson-Lemkes did have a future capacity to return to her full role, and to that extent Jetstar did not have a valid reason to dismiss her based upon a prediction otherwise. However, it is well-established that, although the validity of a reason for dismissal may be determined by reference to facts discovered after the dismissal, those facts must have existed at the time of dismissal. Thus in Dundovich v P&O Ports - a case which concerned the dismissal of an injured employee who was dismissed because, for the foreseeable future, he would not be able to perform all the duties of his position - a Full Bench of the Commission found that it was necessary to take into account a court judgment that the employee’s injury was work related, even though that judgment post-dated the dismissal, because the judgment was declaratory of facts and legal rights in existence at the time of dismissal. Applying this principle, we do not consider it permissible to take into account the expert opinions to which we have referred in assessing the validity of Jetstar’s reason for dismissal because they were clearly founded upon a factual situation which came into existence well after the date of Ms Neeteson-Lemkes’s dismissal, namely his state of health at the time he was assessed. The validity of that part of Jetstar’s reason for dismissal which concerned his future capacity to perform his duties must be assessed by reference to his state of health, and the expert opinions expressed as to his state of health, as they were at the time of his dismissal.
[56] The evidence does not demonstrate that any health professional had positively expressed the view that Ms Neeteson-Lemkes, based upon her state of health at or before the dismissal, would be able to return to full duties at a future time. Dr Walker’s view, to which we have earlier referred, was that she was permanently incapable of returning to her full duties. His opinion was of course contested at the hearing, but even those practitioners who took a contrary view concerning Ms Neeteson-Lemkes’s diagnosis and prognosis had not at the time of dismissal advanced the position that, based on her state of health at that time, she would be able to perform her full role at some future time. As earlier stated, the “Psychological/Counselling Management Plan” prepared by Mr McKinley in about February 2013, shortly after the dismissal, stated that in his opinion Ms Neeteson-Lemkes would not have the capacity to return to “pre-injury activity”, although of course by the time of the hearing before the Commissioner he had changed his opinion based upon a later assessment of Ms Neeteson-Lemkes. Dr Saunders had recommended a return to work based on restricted hours, with “gradual increase in hours when certified”, but never gave a positive prognosis for a full return to work prior to the dismissal. Dr Farago did not see Ms Neeteson-Lemkes between 2011 and 2013, and Mr Cohen did not see her before 2013. Therefore it can at least be said that Jetstar’s view at the time of dismissal that Ms Neeteson-Lemkes would not be able to return to work her full duties as a Jetstar flight attendant was not contrary to any medical opinion in existence at or about that time.
[57] The evidence did not identify that there was any reasonable modification to the role of a full-time flight attendant that could be made to facilitate Ms Neeteson-Lemkes’s return to that role. It was the emergency and safety-critical aspects of that role which were of most concern given Ms Neeteson-Lemkes’s work and medical history, and there was no suggestion that any modification in that area was possible.
[58] Therefore we are satisfied that Jetstar had a valid reason for the dismissal of Ms Neeteson-Lemkes based upon the medical advice it had received or which existed at the time of the dismissal. We note that in J Boag and Son Brewing Pty Ltd, the Full Bench said:
“An inability to perform the inherent requirements of a position will generally provide a valid reason for dismissal. But this will not invariably be so.”
[59] That proposition was not expressed as a hard and fast rule for every case, because as the Full Bench went on to acknowledge there may be particular facts in particular cases which dictate a different conclusion. The nature of the unfair dismissal jurisdiction is such that it is generally not appropriate to try to express binding rules about what conclusions should be reached in respect of the s.387 matters in relation to generalised factual scenarios. That having been said, we consider that the Full Bench’s proposition in J Boag and Son Brewing Pty Ltd can reasonably be applied to the facts of this case.
Valid reason contended for by Oz Design
Oz Design submits that it had a valid reason for Mr Thomas’s dismissal because he was unable to perform the inherent requirements of his role.
Summary of relevant facts
On 20 November 2020, Mr Thomas commenced employment with Oz Design.
On 28 August 2022, Mr Thomas commenced in the role of Store Manager at Oz Design’s Ballina store.
On 7 May 2023, Mr Thomas was involved in a serious car accident. As a result of the accident, Mr Thomas sustained a break to a bone in his wrist, a break in his left tibia (leg), and a brain injury. Mr Thomas has been informed that only 10% of people who suffer the injuries he suffered in the accident on 7 May 2023 survive, and the other 90% of people either die in the accident or following the accident.
Mr Thomas remained in hospital in Lismore for three weeks after the accident due to the extensive rehabilitation he required before he could be discharged on 25 May 2023. Mr Thomas was then admitted to Robina Private Hospital from 26 May 2023 to 8 June 2023 to assist with his rehabilitation and to begin to deal with flashbacks he was having after the accident. Mr Thomas continued his rehabilitation treatment after he was discharged from the Robina Private Hospital.
Mr Thomas was wholly unfit for work in the period from 7 May 2023 to 1 September 2023.
On 8 May 2023, Ms Dodd visited the Ballina store. Ms Dodd was aware that Mr Thomas would be absent from work on 8 May 2023 because it was his rostered day off. On her arrival at the Ballina store, Ms Dodd was told by staff that Mr Thomas’s mother had informed them that he had fallen over in his driveway, broken an ankle and was in hospital. Mr Thomas’s mother was mistaken in her belief that Mr Thomas was injured as a result of a fall on his driveway; the true position was that Mr Thomas was seriously injured in a motor vehicle accident.
The first message Ms Dodd received from Mr Thomas after his accident was a text message on 19 May 2023. The text message included a photograph of page 2 of Mr Thomas’s medical certificate stating he had no capacity for work until 4 June 2023. Mr Thomas also asked Ms Dodd in the text message whether she was able to cancel his planned annual leave.
I accept Mr Thomas’s evidence that he was not able to contact Ms Dodd straight away following the accident because he had been transported to hospital by ambulance and did not have his phone with him. In addition, when Mr Thomas first arrived at hospital, he was affected by concussion and was drifting in and out of consciousness as a result of the strong pain medication he was being given. Mr Thomas also had one of his wrists immobilised from the accident and was having trouble using his fingers.
I accept Mr Thomas’s evidence that he was not in a position to use a computer for several months following the accident due to the orthopaedic injuries to his wrist. He was limited to using Siri to dictate text messages to Ms Dodd in the first few months following the accident. Mr Thomas was not able to start using a computer again until his return to work at the beginning of September 2023.
Mr Thomas commenced work again for Oz Design on Saturday, 2 September 2023, working two days per week, 5.5 hours on each day. In the period from 19 May 2023 until he returned to work on 2 September 2023, Mr Thomas provided medical certificates to Oz Design when he received them from his general practitioner.
On 21 September 2023, Mr Thomas’s general practitioner provided a medical certificate stating that Mr Thomas had capacity for some type of work from 23 September 2023 to 18 October 2023, for 5.5 hours a day, two days per week. The medical certificate also included the following comments:
Has returned to work, but this has been very overwhelming for him, and has led to worsening anxiety and deterioration in his mental health. Is rostered for another two days this week.
Suggest that he continues at two days per week, but in a non-management role. This will allow for a better transition back to work.
Needs to see a psychiatrist – referral provided.
Would like to change psychologist, as found one closer to home, and was not finding initial psychologist to be of benefit. Update referral provided.
Mr Thomas remained working two days per week, 5.5 hours each day, until 18 October 2023, at which time his certificate of capacity was changed to increase his hours of work to 16.5 hours per week.
On 15 November 2023, Mr Thomas’s general practitioner increased his hours of work to 22 hours per week, to be reviewed in mid-December 2023.
On 6 December 2023, Ms Dodd sent Mr Thomas an email addressing some issues in the Ballina store that needed to be improved. Mr Thomas responded by stating, among other things, that “it is difficult to attend to everything when I have not been in the store since Sunday and I am only there for limited hours.”
On 10 December 2023, Ms Dodd sent an email to Mr Thomas in the following terms:
Hi Michael,
Your sales have dropped off and it is concerning. The store has not performed properly in sales for the last 6 months…
... These are some of the issues you and I need to discuss when I get back to your store between Christmas and New Year…
On 13 December 2023, Mr Thomas provided Ms Dodd with a new medical certificate from his general practitioner. The medical certificate reduced Mr Thomas’s capacity for work back to 2 days per week, 5.5 hours each day, in the period from 13 December 2023 to 18 January 2024. The medical certificate also included the following comments:
Has been to neuropsych. They have recommended he reduce to 2 days per week. Nil letter received as yet. Concern due to Traumatic Brain Injury post accident, needs to reduce cognitive load to aid his recovery.
Reduce to 2 x 5.5hr per week.
Continues with psychologist and EP + Hand Therapy.
On receipt of this medical certificate dated 13 December 2023, Ms Dodd informed Mr Kerr of Mr Thomas’s reduced capacity for work. Mr Kerr then discussed the issue with Mr Michael Petricevic, CEO, director and shareholder of Oz Design. Mr Petricevic requested a report from Ms Dodd into the financial performance of the Ballina store. The finding was that the Ballina store’s sales were down overall by 36% from the previous year. The Ballina store was losing money and the shareholders had to contribute money to keep the store going.
Due to the financial downturn of the Ballina store, the negative effects of not having a full-time manager in the store since 7 May 2023, Mr Thomas reducing his return to work hours with no clear explanation for this change, together with consideration of Mr Thomas’s general practitioner’s advice concerning his mental state to remain in the role, Oz Design made a decision to remove Mr Thomas from his role as Store Manager of the Ballina store.
On 14 December 2023, a letter of dismissal to Mr Thomas from his position of Store Manager was drafted. The letter included an offer for Mr Thomas to remain as a part-time sales employee in line with his nominated treating doctor’s advice and capacity as per his medical certificates. Oz Design hoped that Mr Thomas would in fact remain an employee of Oz Design by offering him a part-time sales position.
It was Ms Dodd’s intention to have a face-to-face meeting with Mr Thomas and inform him that he was being stood down from his position as Store Manager, rather than simply send him the letter drafted on 14 December 2023. It then became a matter of how and when Ms Dodd could get to the Ballina store in person to have this discussion with Mr Thomas and some days passed while Ms Dodd reorganised her schedule to make this visit. While Ms Dodd was rearranging her schedule, she received an email from Mr Thomas dated 17 December 2023 which included a detailed list of the reasons why he had reduced his working hours. The email from Mr Thomas included the following information:
Dear Cath,
I thought I would advise you the reasons why I reduced my hours from this week.
…
10. Nobody at the NSW forum except for … had any interest in my recovery, nobody else from Rouse Hill even asked how I was going…
In short, I felt unappreciated and unsupported and decided given that with working 4 days per week and having the other 3 days as treatment days, and having therefore things on 7 days each week and no break days, this was unsustainable and not the best for my recovery…
Mr Kerr gave evidence, which I accept, that the information contained in Mr Thomas’s email of 17 December 2023 did not change his mind, and in fact supported the decision, that Mr Thomas needed to be removed from the position of full-time Store Manager of the Ballina store.
On 18 December 2023, Ms Dodd sent an email to Mr Thomas in the following terms:
“Hi Michael
Are you able to come into Ballina store on Wednesday 20/12/23 so we can discuss? I am currently in Tamworth and can be at Ballina store by 2 PM on Wednesday…”
At 3pm on 20 December 2023, Ms Dodd met with Mr Thomas at the Ballina store. Ms Dodd handed Mr Thomas a letter dated 14 December 2023. The content of the letter is set out in paragraph [15] above. Mr Thomas expressed concern that taking up the offer of part-time employment might affect the financial benefits he was receiving from his insurance company in relation to the motor vehicle accident on 7 May 2023. Mr Thomas then left the meeting with Ms Dodd and called his insurance company. Mr Thomas came back into the meeting and stated, “The insurance company are still going to support me financially”. Ms Dodd said, “Well that’s good. Now you can concentrate on getting better”.
On 21 December 2023, Mr Thomas sent a text message to Ms Dodd in which he rejected Oz Design’s offer of part-time employment. The content of Mr Thomas’s text message is set out in paragraph [16] above.
Oz Design made a payment in lieu of notice to Mr Thomas.
Consideration
I am satisfied on the evidence that Mr Thomas was not capable of performing the inherent requirements of his role at Oz Design at the time his employment was terminated by Oz Design. The medical certificates provided by Mr Thomas’s general practitioner support this finding, as does the fact that Mr Thomas had been unable to return to his full-time position for a period of more than seven months since the motor vehicle accident on 7 May 2023. The medical certificate provided to Ms Dodd on 13 December 2023 stated that, in the period from 13 December 2023 to 18 January 2024, Mr Thomas only had capacity to work for 5.5 hours a day, two days per week, which was significantly less than his full-time position working 38 hours per week.
As to whether Mr Thomas would be able to perform the inherent requirements of his role as a Store Manager at some time in the future, that must be assessed by reference to facts which existed at the time of the dismissal. In my assessment of the facts in existence at the time of the dismissal, it is more likely than not that Mr Thomas would not have been able to perform the inherent requirements of his role as a Store Manager for a considerable period after 21 December 2023. So much is apparent from the extent and nature of the injuries suffered by Mr Thomas in the motor vehicle accident, the period of more than seven months which had elapsed since the accident, during which time Mr Thomas had not been able to return to his full-time role as a Store Manager, and the fact that in December 2023 Mr Thomas’s capacity for work had diminished from 22 hours per week back to 11 hours per week.
As to whether there was some reasonable adjustment which could be made to Mr Thomas’s role of Store Manager to accommodate any current or future incapacity, I am satisfied on the evidence that there was not. Oz Design needed a full-time Store Manager in its Ballina store. Sales had decreased significantly while Mr Thomas was absent from work for much of the period between 7 May 2023 and December 2023. The store was losing money. Oz Design could not reasonably have been expected to continue to watch the performance of its Ballina store decline, with a part-time Store Manager in charge, beyond December 2023. Mr Thomas suggested, for the first time, in his oral evidence that Oz Design could have made a reasonable adjustment by permitting him to work his full-time hours by working partly at the Ballina store and partly from home. I do not accept that this would have been a reasonable adjustment. First, Mr Thomas’s medical certificate dated 13 December 2023 stated that he only had capacity to work 5.5 hours a day, two days a week. The medical certificate did not suggest that Mr Thomas had any capacity to work additional hours, whether at home or otherwise. At no time during his employment did Mr Thomas suggest to Oz Design that he could have worked more hours than was stated on his medical certificates if he worked those hours from home. Secondly, I accept the evidence given by Mr Kerr that it would not have been reasonable to permit Mr Thomas to work a substantial number of his weekly full-time hours as a Store Manager from home. Mr Kerr explained that Mr Thomas was the best salesperson in the Ballina store, and although he could have worked a few hours from home doing administrative tasks, he was needed in the store most of the time to make sales, mentor other sales staff, and manage the store.
Conclusion on valid reason
I am satisfied Oz Design had a sound, defensible and well-founded reason to dismiss Mr Thomas on 21 December 2023. In particular, Mr Thomas was not capable on 21 December 2023 of performing the inherent requirements of his position, it was unlikely that Mr Thomas would be able to return to his full-time role as Store Manager in the foreseeable future, and there were no reasonable adjustments which could have been made to Mr Thomas’s role to accommodate any current or future incapacity. I am therefore satisfied that Oz Design had a valid reason to dismiss Mr Thomas related to his capacity.
Notification of the reason for dismissal and given an opportunity to respond (s 387(b)&(c))
It is relevant to consider whether notification of a valid reason for termination has been given to an employee protected from unfair dismissal before the decision is made[15], and in explicit[16] and plain and clear terms.[17] In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following (at [73]):
As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.[18]
There is no dispute that Oz Design did not, prior to making its decision to terminate Mr Thomas’s employment, notify him of the reason for termination or give him the opportunity to respond to the reason for his termination. These matters weigh in support of Mr Thomas’s contention that his dismissal was harsh, unjust and unreasonable. However, the weight to be accorded to these factors is reduced to some extent (but not completely) in circumstances where I am satisfied that even if Oz Design had, prior to making its decision to terminate Mr Thomas’s employment, notified him of the reason for its proposed termination and given him the opportunity to respond to the reason for his proposed termination, it is unlikely that there would have been a different outcome. Mr Thomas was asked at the determinative conference what he would have said to Oz Design if he had been consulted with and asked to comment, in December 2023, on a proposal to remove him from the position of Store Manager on account of his inability to perform the inherent requirements of that role. Mr Thomas responded by saying that he would have gone back to his general practitioner and discussed whether he had a capacity to work additional hours. Had Mr Thomas been given such an opportunity, I am satisfied on the balance of probabilities that the outcome would not have been any different. First, Mr Thomas had already discussed his capacity to work with his general practitioner on 13 December 2023. Those discussions included information provided by Mr Thomas to his general practitioner about his sessions with his neuropsychologist, albeit the neuropsychologist had not yet provided a written report to Mr Thomas’s general practitioner. All that information had been considered by Mr Thomas’s general practitioner in determining that Mr Thomas only had capacity to work two days per week, 5.5 hours each day. The comments in the medical certificate dated 13 December 2023 also support the capacity determined by the medical practitioner, including: “Concern due to Traumatic Brain Injury post accident, needs to reduce cognitive load to aid his recovery”. The evidence did not suggest that there was any new information which could have justified the general practitioner to change his or her opinion that, in the period from 13 December 2023 to 18 January 2024, Mr Thomas only had capacity to work two days per week, 5.5 hours each day. This position is further supported by the medical certificates supplied by Mr Thomas since his dismissal, which show that he has remained unable to perform the inherent requirements of his full-time role of Store Manager at Oz Design at all times from his dismissal on 21 December 2023 until at least the hearing of this matter on 27 March 2023. For example, in February 2024 Mr Thomas’s general practitioner certified him as fit to work two days per week, eight hours each day, and in March 2024 this was increased to three days per week, 8 hours per day.
Any unreasonable refusal to allow Mr Thomas to have a support person present (s 387(d))
Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.[19]
The only discussion held between Oz Design and Mr Thomas relating to his dismissal was the meeting between Mr Thomas and Ms Dodd on 20 December 2023. Mr Thomas did not ask for a support person to accompany him to that meeting. That is because he believed, based on Ms Dodd’s email of 18 December 2023, that the purpose of the meeting was to discuss the email Mr Thomas sent to Ms Dodd on 17 December 2023. Mr Thomas’s belief in that regard was reasonable, given he had provided a detailed explanation in his 17 December 2023 email of the reasons for reducing his work hours to 11 per week and Ms Dodd’s response to his email was to set up a meeting to “discuss”. A reasonable person in Mr Thomas’s position would have understood the “discussion” to relate to the reasons provided by Mr Thomas for reducing his work hours, not his removal from his position of Store Manager.
Although Oz Design did not unreasonably refuse to allow Mr Thomas to have a support person with him at the meeting on 20 December 2023, I will take into account, as an “other relevant matter” under s 387(h) of the Act, that Oz Design did not make clear to Mr Thomas, prior to the meeting on 20 December 2023, what was to be discussed at that meeting or that his employment with Oz Design was in jeopardy.
Warnings about unsatisfactory performance (s 387(e))
Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal.
In this case, the reasons for dismissal related to Mr Thomas’s capacity, rather than his performance, so this consideration is not relevant.
Impact of size of Oz Design on procedures followed in effecting the dismissal (s 387(f))
Oz Design is a small business, but it is part of a larger enterprise. I do not consider that the size of Oz Design’s enterprise had any impact on the procedures followed in effecting Mr Thomas’s dismissal.
Absence of dedicated human resource management specialists or expertise (s 387(g))
The evidence does not reveal any absence of human resource management specialists or expertise on the part of Oz Design at the time of Mr Thomas’ dismissal, so this consideration is not relevant.
Other relevant matters (s 387(h))
Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
There were procedural deficiencies associated with Mr Thomas’s dismissal. First, Oz Design did not provide any clear information to Mr Thomas regarding the purpose of the meeting on 20 December 2023. Secondly, Oz Design did not, prior to making its final decision, give Mr Thomas an opportunity to comment on, or provide information in relation to, his removal from the position of Store Manager on the basis of his inability to perform the inherent requirements of his role. These procedural deficiencies add weight to Mr Thomas’s argument that his dismissal was harsh, unjust and unreasonable.
Mr Thomas contends that Oz Design acted unfairly in the period after his dismissal by unreasonably demanding that he return his work laptop computer while he was still unwell with COVID-19 and withholding the payment of his annual leave and payment in lieu of notice entitlements until after he had returned the laptop computer. However, these events took place after the termination of Mr Thomas’s employment. They do not bear on the fairness of his dismissal.
As part of my consideration of whether a “fair go all round” was accorded to both Mr Thomas and Oz Design, it is relevant to have regard to the fact that Oz Design kept Mr Thomas’s position open for him for a considerable period of time, even though Mr Thomas’s absence was having a significant impact on the financial performance of the business. Mr Thomas was completely absent for almost four months after his accident on 7 May 2023. He then returned to work with limited capacity and was able to increase his capacity until 13 December 2023, at which time his capacity to work was significantly decreased back to two days per week, 5.5 hours per day. This happened just before the busiest sales time of the year for the Ballina store. In all the circumstances, Oz Design could not have been reasonably expected to permit Mr Thomas to continue working on a part-time basis as the Store Manager of the Ballina store well into 2024. Mr Thomas was unwilling to work in a sales role on a part-time basis. As a result, his employment was terminated by Oz Design.
Conclusion as to whether the dismissal was unfair
Having considered and taken into account each of the matters specified in section 387 of the Act, my evaluative judgment is that Oz Design’s dismissal of Mr Thomas on 21 December 2023 was not harsh, unjust or unreasonable. Mr Thomas was absent from work for a significant period of time. It is clear from the medical evidence from Mr Thomas’s treating doctor that he did not have the capacity to do his job at the time he was dismissed, and it was unlikely that Mr Thomas would be able to return to his full-time role in the foreseeable future. There were no reasonable adjustments which could have been made to Mr Thomas’s role to accommodate any current or future incapacity. Although Oz Design’s failure to notify Mr Thomas, in advance, of the reason for his termination, give him an opportunity to respond, and consult with him prior to making its decision to dismiss him weigh in favour of a conclusion that Mr Thomas’s dismissal was unfair, the other relevant considerations discussed above have led me to conclude that Mr Thomas’s dismissal was not unfair. The application for unfair dismissal is therefore dismissed.
DEPUTY PRESIDENT
Appearances:
M. Thomas, self-represented
J. Kerr and C. Dodd, for the Respondent
Hearing details:
2024
Newcastle (Video using Microsoft Teams)
27 March.
[1] NSW Trains v James[2022] FWCFB 55 at [45]
[2] Mohazab v Dick Smith Electronics Pty Ltd [1995] IRCA 625; (1995) 62 IR 200
[3] Mohazab v Dick Smith Electronics Pty Ltd [1995] IRCA 625; (1995) 62 IR 200
[4] Koutalis v Pollett [2015] FCA 1165 at [43]; Canberra Urology Pty Ltd v Lancaster[2021] FWCFB 1704 at [30]
[5] Koutalis v Pollett [2015] FCA 1165 at [43]; Canberra Urology Pty Ltd v Lancaster[2021] FWCFB 1704 at [30]
[6] Bupa Aged Care Australia Pty Ltd v Tavassoli[2017] FWCFB 3941 at [47(2)]
[7] Bupa Aged Care Australia Pty Ltd v Tavassoli[2017] FWCFB 3941 at [47(2)]
[8] Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8
[9] Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
[10] Ibid
[11] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681 at 685
[12] Ibid
[13] [2010] FWAFB 4022
[14] [2013] FWCFB 9075
[15] Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]
[16] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151
[17] Previsic v Australian Quarantine Inspection Services Print Q3730
[18] RMIT v Asher (2010) 194 IR 1 at 14-15
[19] Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542]
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