Michelle Dixon v R&D Counselling & Group Therapy Pty Ltd
[2010] FWA 3261
•29 APRIL 2010
[2010] FWA 3261 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Michelle Dixon
v
R&D Counselling & Group Therapy Pty Ltd
(U2009/13828)
COMMISSIONER CARGILL | SYDNEY, 29 APRIL 2010 |
Termination of employment.
[1] This decision arises from an application by Ms M Dixon (the applicant) pursuant to section 394 of the Fair Work Act 2009 (the Act) for a remedy in respect of her dismissal by R & D Counselling and Group Therapy Pty Ltd (the respondent). The dismissal occurred on 12 November 2009. The application was lodged with Fair Work Australia (FWA) on 16 November 2009.
[2] The matter was dealt with by an FWA Conciliator but did not settle. The arbitration was heard on 8 April 2010 in Sydney. The matter proceeded by way of a hearing as I considered that it was appropriate to do so having taken into account the parties’ views as well as the other factors set out in section 399 of the Act.
[3] The applicant was represented by Mr Latham of counsel who appeared with permission. The respondent was represented by Dr Colquhuon, the director of the business. It should be noted that the respondent had been legally represented for the period 2 February to 25 March 2010, as reflected in the notices of representative commencing to act and ceasing to act which are on the FWA file.
[4] The applicant gave evidence. Her witness statement was marked Exhibit Applicant 2. Her oral testimony is at PN 97-419 of Transcript. Evidence in the applicant’s case was also given by the following witnesses:
Ms C Iskander | A former work colleague of the applicant. Her witness statement was marked Exhibit Applicant 1 and her oral testimony is at PN 46-94 of the Transcript; |
Ms J Do | A former work colleague of the applicant. Her witness statement was marked Exhibit Applicant 3 and her oral testimony is at PN 425-515 of Transcript; |
Ms A Dixon | The daughter of and a former work colleague of the applicant. Her witness statement was marked Exhibit Applicant 4 and her oral testimony is at PN 520 – 555 of Transcript. |
[5] Dr Colquhuon gave evidence on behalf of the respondent. His witness statement was marked Exhibit Respondent 2 and his oral testimony is at PN 565 – 719 of Transcript:
[6] The following witnesses also gave evidence on behalf of the respondent:
Ms J Foster | Director of Nursing in the respondent’s business. Her witness statement was marked Exhibit Respondent 3 and her oral testimony is at PN 726 – 826 of Transcript; |
Ms S Li | Employee of the respondent and partner of Dr Colquhuon. Her witness statement was marked Exhibit Respondent 4 and her oral testimony is at PN 829 – 926 of Transcript. |
SUMMARY OF FACTS AND EVIDENCE
[7] The respondent’s business is to provide psychological counselling services to individuals who have problems with substance abuse and addiction. It offers a number of treatments including medically supervised detoxification programs (detox). Dr Colquhuon is the respondent’s sole director and chief executive officer.
[8] The applicant commenced employment with the Addiction Treatment Foundation (ATF) in September 2007. She says that the ATF is wholly owned by the respondent. Dr Colquhuon says that it is an independent entity.
[9] The applicant’s evidence is that, in December 2007, she began working full-time for the respondent. She worked two days a week as the Executive Officer of ATF and three days a week directly for the respondent. The applicant’s evidence is that the respondent paid her salary for the whole five days.
[10] Dr Colquhuon’s evidence is that the respondent paid the applicant for three days a week only. Her salary for the other two days with ATF came from a grant provided by the Attorney General’s Department from a program set up under the proceeds of crime legislation. Dr Colquhuon’s evidence is that, from about April 2008, the applicant’s total salary was paid by the respondent. The portion which related to her employment with ATF was reimbursed by ATF to the respondent each quarter.
[11] I note that, whatever the true position of responsibility for and source of the applicant’s salary, it appears to have been paid by an entity called Psych N Soul. This information comes from the applicant’s PAYG Payment Summary for the year ending 30 June 2008, Annexure C to Exhibit Respondent 2. It is also supported by the payroll advices at Annexure B to the Exhibit.
[12] Dr Colquhuon’s evidence is that, in March 2008, he met with the applicant to discuss a public confrontation between her and a client. He warned the applicant that personal involvement with clients would not be tolerated.
[13] In May 2008 Dr Colquhuon attended an overseas conference and had a period of leave. While he was away the applicant assumed his management and administrative duties and her salary was increased. The applicant says that the new gross amount was $1500 per week. Dr Colquhuon says it was $1350. Whatever the true amount, it was substantially higher than the rate the applicant had previously received which was about $650 gross per week.
[14] The applicant’s evidence is that, following Dr Colquhuon’s return, she was permanently promoted to the position of Officer Manager and Treatment Coordinator. Dr Colquhuon’s evidence is that he offered the applicant a trial period to continue in the role. He agrees that, from 23 June 2008, the applicant’s gross weekly salary was $1500, Annexure B to Exhibit Respondent 2.
[15] The applicant’s evidence as to the duties of the new position is set out at paragraph 7 of Exhibit Applicant 2. Dr Colquhuon agreed that was a reasonable summary of the role except that it doesn’t include the responsibilities of marketing the business and contributing to its economic improvement. His evidence is that he considered those to be important aspects of the job. Dr Colquhuon’s evidence is that the applicant had told him that she had considerable skills in sales and marketing. He also relied on her résumé as to her expertise in these areas, Exhibit Respondent 1.
[16] Dr Colquhuon’s evidence is that the applicant also continued in her role at ATF. He says that she failed to properly execute the duties of that position including the organisation of meetings.
[17] Dr Colquhoun’s evidence is that, at the applicant’s request in July 2008, $500 of her weekly salary was paid in cash. He denies that this change in circumstances was at his instigation. Dr Colquhuon’s evidence is that he insisted that the amount be paid as a bonus and declared for taxation purposes. His evidence is that the new arrangement was to be subject to the applicant meeting certain performance criteria especially related to marketing the business particularly a direct mail campaign to various medical professionals.
[18] The applicant’s evidence is that, after returning from a period of annual leave in July 2008, she met with Dr Colquhuon. She says that he informed her that the basis of her salary arrangement was to be altered to a base rate of $800 per week plus $100 for every client she obtained for the respondent’s detox program. The applicant’s evidence is that she opposed this change and expressed the view that it was unethical and immoral to pressure clients into detox. Her evidence is that there was in fact no change to her remuneration package following this conversation.
[19] Dr Colquhuon’s evidence is that there was no such discussion. His evidence is that the applicant was on leave in August 2008. It is unclear whether this is the same period of leave which the applicant has described as being in July 2008. In any event, Dr Colquhuon says that, during the applicant’s absence, he became aware of a number of areas of concern with her performance, in particular, the direct mail campaign referred to earlier and a failure to follow-up with patients.
[20] Dr Colquhuon’s evidence is that he met with the applicant as he was concerned about the financial viability of her position. He says that there was a discussion about paying her a base salary of $1000 per week with the additional $500 being paid for productivity improvements. His evidence is that the applicant refused to negotiate a new salary arrangement.
[21] Dr Colquhuon’s evidence is that he had a discussion with the applicant in January 2009 during which he warned her that her job was in jeopardy unless her record-keeping improved. He says that the applicant agreed that she needed to improve her work practices. The applicant’s evidence is that, at some point during the early part of her employment as Manager, Dr Colquhuon raised the issue of the need to properly complete paperwork. It is unclear from the evidence whether this in fact is the same discussion.
[22] The applicant’s evidence is that, following a period of annual leave in February 2009, Dr Colquhuon told her that her base salary was to be reduced to $900 per week because she was supposed to be on commission. Her evidence is that Dr Colquhuon also objected to her taking leave. Dr Colquhuon’s evidence is that the leave was taken in January not February. His evidence is that the conversation with the applicant was entirely concerned with her poor performance.
[23] The applicant’s evidence is that, despite her protests, her salary was reduced for a period of two weeks. She then approached Dr Colquhuon to have this situation reversed. The applicant’s evidence is that Dr Colquhuon agreed as the business had more money at that time, her former salary was restored and she received back pay of the amount by which it had been reduced.
[24] Ms Li commenced employment in the respondent’s business in April 2009. Her original task was to archive patient files, however, because of her business background, Dr Colquhuon then asked her to review the financial position of the business. Ms Li’s evidence is that she discovered that there was a total of $117,602.09 in uncollected funds from sources including Medicare, patients’ fees and medico-legal reports.
[25] Ms Li’s evidence is that she discussed this issue with the applicant in June 2009. Her evidence is that the applicant did not seem to be aware that the money was not being recovered. Ms Li’s evidence is that, as manager, the applicant was ultimately responsible for the collection of the outstanding money.
[26] The applicant’s evidence is that she was not responsible for the financial side of the business. Indeed, Dr Colquhuon had specifically told her to keep away from the accounts. The applicant agreed that part of her role included responsibility for Ms Do, whose duties included some book keeping, and for her daughter, Ms A Dixon, whose duties included recovering Medicare payments.
[27] The applicant’s evidence is that the business had an external book keeper and accountant. Her evidence is that her only level of involvement in the accounts was a weekly meeting with Ms Do during which the bills were prioritised for payment. I note in this regard that the witnesses generally agreed that the financial situation of the business ebbed and flowed and there were often cash flow problems.
[28] Dr Colquhoun’s evidence is that the applicant’s role in supervising Ms Do and Ms A Dixon included overall responsibility for money collection. His evidence is that he didn’t expect the applicant to actually do the bookkeeping. Dr Colquhuon specifically denies ever telling the applicant not to deal with the accounts.
[29] Both Ms Do and Ms A Dixon agreed under cross-examination that they had been present at meetings with the applicant during which there had been discussions about issues of concern to Dr Colquhuon such as sending out letters to referring doctors. Ms Do’s evidence is that this occurred approximately once a month or every two months.
[30] Ms Li’s evidence is that the cash flow problems in the business would not have been so severe if the applicant had been properly monitoring the finances and adequately supervising Ms Do.
[31] Dr Colquhoun’s evidence is that, around about June or July 2009, he had a conversation with the applicant in relation to an interaction between the applicant and Ms Li. His evidence is that, during the course of the conversation, he told the applicant that she was “on thin ice given her performance for a long time”.
[32] Ms Foster’s evidence is that, in or about July 2009, she discovered that a detox consent form had not been signed by a patient. She spoke to the applicant about the issue and the importance of ensuring that such forms were signed prior to treatment taking place. Ms Foster’s evidence is that she raised the matter with Dr Colquhoun who advised her that he had concerns about a number of aspects of the applicant’s work. He informed Ms Foster that he would speak to the applicant about the issue of the consent forms.
[33] Ms Foster also gave evidence that she had spoken to the applicant at various times about errors in the Drug Register paperwork and client files as well as a failure to update staff records. The applicant’s evidence is that she recalled a discussion with Ms Foster about staff files but not about the other issues. She accepts that completion of consent forms prior to treatment is vitally important.
[34] Ms Foster’s evidence is that she understood that the applicant was managing the practice and that her role included ensuring that files and paperwork were properly completed. She agreed that the applicant was not a Registered Nurse.
[35] The applicant’s evidence is that she requested two weeks’ annual leave in August 2009 to assist her daughter with the birth of her first child. Only four days’ leave was approved. Dr Colquhoun’s evidence is that the applicant only asked for one week’s leave.
[36] Dr Colquhoun’s evidence is that, during the applicant’s absence, he reviewed her performance and various failings came to his attention. These included paperwork related to client files, the client register and follow up correspondence to referring doctors.
[37] Dr Colquhoun’s evidence is that, at the applicant’s request, he drafted a memo setting out his concerns, Annexure MD1 to Exhibit Applicant 2 and Annexure D to Respondent 2. He gave the memo to the applicant and they met and discussed the contents. His evidence is that he was frustrated and disappointed with the applicant’s performance. Dr Colquhoun’s evidence is that he informed the applicant that, if she couldn’t attend to her duties as requested, he would have to consider terminating her employment. He informed the applicant of the need to compile a checklist to ensure that the paperwork was properly completed, to review the files and to have twice weekly meetings with Ms Do and Ms A Dixon.
[38] The applicant’s evidence is that, after her return from leave, Dr Colquhoun took her to task for various deficiencies that had occurred during her absence. Her evidence is that Dr Colquhoun yelled at and abused her and told her he wasn’t going to discuss it further. He threatened to “sack the lot of you”. The applicant asked if this was a warning. Upon receiving an affirmative response she asked for it in writing. She then received the memo referred to earlier. The applicant denied that there had been any meeting to discuss the contents of the memo or her performance.
[39] The evidence about the contents of the memo is as follows. There is no disagreement about Dr Colquhoun’s description of the applicant’s duties concerning the detox program. However the applicant says that she undertook those duties to the best of her ability, any failings were due to clients. In cross-examination the applicant denied having been repeatedly spoken to about these issues. She also denied being responsible for any deficiencies in paperwork around this time although she did concede that this had been an issue early on in her employment. Dr Colquhoun’s evidence is that the applicant appeared not to appreciate the seriousness of her errors.
[40] The applicant agrees that she had been asked to prepare a checklist. Her evidence is that she hadn’t done this due to the demands of her job. Dr Colquhoun’s evidence is that this was crucial to the applicant improving her performance.
[41] The applicant denies that she had been ever “stepped outside of the therapeutic role” as mentioned in the memo. The applicant’s evidence is that she took particular exception to the final paragraph of the memo. She believed that the comments reflected Dr Colquhoun’s general attitude of annoyance and irritation with her taking leave. The applicant’s evidence is that this belief was based upon a pattern of Dr Colquhoun raising grievances with her each time she returned from leave.
[42] Dr Colquhoun’s evidence is that he denies any such attitude or pattern. His evidence is that the applicant’s failings became more apparent during her absences when other staff took over her duties. Ms Do’s evidence is that when she carried out the applicant’s role for one week during the applicant’s absence on leave she found it to be stressful and physically demanding.
[43] Sometime in September 2009 there was an incident concerning a laptop computer which involved Ms Iskander. The applicant’s evidence is that, following that incident, she noted a significant change in Dr Colquhoun’s attitude towards her. Her evidence is that he appeared to be irritated by her presence. Dr Colquhoun’s evidence is that the incident is not relevant.
[44] Dr Colquhoun’s evidence is that, during September 2009, it became clear that the applicant’s performance had not improved in the areas outlined in the memo referred to earlier. He was particularly concerned about the absence of a checklist, failings in relation to the production of a brochure which had been ongoing since April 2008, updating of a spreadsheet and correspondence to referring doctors. Dr Colquhoun’s evidence is that he believed that the applicant had misled him about these matters and he had increasing concerns about her reliability.
[45] Dr Colquhoun’s evidence is that on 29 September he prepared another memo outlining the areas of the applicant’s performance where he believed improvement was required, Annexure E to Exhibit Respondent 2. His evidence is that he did not give this memo to the applicant as she was going overseas on holiday.
[46] The applicant was absent on leave between 5 October and 10 November 2009. I note that in Exhibit Applicant 2 the applicant states that she returned on 10 October, however, this is obviously an error as she also states that she was on five weeks’ leave.
[47] During the applicant’s absence Dr Colquhoun had a discussion with Ms Do about the applicant’s performance and offered her the applicant’s position. Dr Colquhoun’s evidence is that he had formed the view that it was not viable for the applicant to remain in her job as she had not improved her performance and had difficulty complying with directions.
[48] The applicant and Dr Colquhoun met on the afternoon of 10 November. Dr Colquhoun’s evidence is that he arranged the meeting to discuss the applicant’s performance. There was some discussion about the fact that the business was having financial difficulties. The applicant’s evidence is that Dr Colquhoun told her that he was going to reduce “everyone’s” wages. Dr Colquhoun denies this. His evidence is that the only reduction in wages he mentioned was that of the applicant. His evidence is that he suggested that she could work an extra day a week for the same money to ensure that she could complete her job. The applicant rejected the proposal and suggested that Ms Do and Ms A Dixon should be involved in the conversation as well.
[49] There followed a discussion about various options. It concluded with the applicant suggesting that Dr Colquhoun should think about it overnight and there should be a further discussion the next day.
[50] During that ensuing discussion, on 11 November, Dr Colquhoun stated that he had decided that, in future, Ms A Dixon would work four days per week instead of five and would receive four days’ pay. Ms Do would work four days per week but continue to receive five days’ pay in order to reduce her leave entitlements. The applicant would work four days per week and receive $800 pay. She would no longer carry out any management functions, but instead, was to focus on the treatment co-ordinator’s role. The applicant objected to the new arrangement and indicated that she would obtain legal advice.
[51] The applicant’s evidence is that she sought advice from FWA and the Redfern Legal Service. She was advised to request a performance review and a summary of her Key Performance Indicators (KPIs). She was also advised to seek an opportunity to respond to the review and to take an independent observer with her when making these requests.
[52] A meeting was held on 12 November between the applicant and Dr Colquhoun. Ms Do attended as the observer. Dr Colquhoun’s evidence is that he believed that the meeting was to talk about productivity. He did not know why Ms Do was there and his evidence is that he felt “ambushed”.
[53] The applicant requested a performance review and KPIs. Dr Colquhoun asked the applicant what she was going to do. She responded that she was going to continue in her present role and receive her full pay. Dr Colquhoun informed her that was not an option. There was a further exchange and then Dr Colquhoun told the applicant that he had no choice, she should leave now.
[54] After the meeting Dr Colquhoun updated the memo which he had written in September 2009, gave it to the applicant and told her that it was her performance review. The updated memo is Annexure MD2 to Exhibit Applicant 2 and Annexure E to Exhibit Respondent 2. The applicant gives evidence disputing some of the content of this memo and Dr Colquhoun provides evidence in response. I do not include that evidence in this summary as the document had not been provided to the applicant until after the end of the employment relationship.
[55] Dr Colquhoun then prepared a further memo in which he states that he was sorry that the applicant had decided not to accept the “reasonable offer” which had been made to her. This memo, Annexure MD3 to Exhibit Applicant 2, appears to indicate that, by not accepting the offer, the applicant had in effect resigned. It should be noted that, in his evidence, Dr Colquhoun appears to accept that the applicant was dismissed.
[56] Dr Colquhoun gave this memo to the applicant as she was placing her possessions in her car. There followed an exchange about the payment of entitlements and the return of a mobile phone.
SUBMISSIONS ON BEHALF OF THE APPLICANT
[57] A written outline of submissions on behalf of the applicant was provided prior to the hearing. It was marked as Exhibit Applicant 5. Mr Latham also made oral submissions.
[58] It is submitted that the termination of the applicant’s employment was harsh, unjust and unreasonable. There was no valid reason for the termination. The respondent’s assertion that there were performance reasons for the dismissal is unfounded and a late invention.
[59] It is submitted that, if there had been genuine concerns about the applicant’s performance, such concerns had not been brought to her notice nor had she been provided with a proper opportunity to respond.
[60] It is submitted that the respondent failed to comply with the Small Business Fair Dismissal Code (the Code) in dealing with the applicant’s dismissal.
[61] Mr Latham submitted that it was clear the real reason for the termination was the applicant’s failure to agree to a substantial change in the terms and conditions of her employment. He submitted that this could not be a valid reason for dismissal.
[62] Mr Latham submitted that the evidence demonstrated that the performance issues relied on by the respondent essentially concerned two matters, finances and paperwork. He submitted that the finances were not the applicant’s responsibility and, further, she had been told to keep away from the accounts. Mr Latham submitted that the applicant had conceded that there had been paperwork problems early on in her period of employment, however, these issues had been corrected.
[63] Mr Latham submitted that, even if the performance concerns put forward by the respondent were accepted, they didn’t amount to a valid reason for termination of the applicant’s employment.
[64] Mr Latham submitted that reinstatement would not be appropriate and was not being sought. In view of the applicant’s length of service and other relevant circumstances three months’ compensation would be appropriate. Mr Latham noted that the applicant had not received any remuneration since the dismissal.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
[65] A written outline of submissions on behalf of the respondent was provided prior to the hearing and was marked as Exhibit Respondent 5. Dr Colquhoun also made oral submissions.
[66] It is submitted that the termination of the applicant’s employment was not harsh, unjust or unreasonable. The respondent was entitled to dismiss the applicant. She had consistently failed to demonstrate a standard of diligence and competence that was reasonable for a person with her skills and experience. The applicant’s poor performance was damaging the respondent’s reputation.
[67] It is submitted that the applicant had received sufficient warnings that her employment was at risk but had failed to comply with reasonable directions. The applicant had been provided with opportunities to respond to the respondent’s concerns and chances to improve. She had been supported by the respondent.
[68] It is submitted that the respondent had sought to vary the terms of the applicant’s employment as she was unable to competently perform her duties. She had refused to accept this and had chosen to be dismissed.
[69] It is submitted that the respondent had complied with the Code. Dr Colquhoun noted that he hadn’t previously been aware of the Code and consequently had not followed it exactly. However, he had generally adhered to it. He had warned the applicant about her performance concerning the finances of the business and the completion of vital paperwork. Dr Colquhoun noted that the applicant agreed that she had been given a written warning. He also noted the evidence of both Ms Do and Ms A Dixon that issues of concern had been discussed at various meetings at which the applicant had been present.
[70] Dr Colquhoun submitted that, in view of the applicant’s résumé, he believed that she had the skills to manage the practice. He submitted that he gave her the written warning because he had become frustrated that, whenever he questioned her competence, the applicant had argued every point with him. Dr Colquhoun submitted that he had given the warning with reluctance and he greatly regretted the fact that the applicant was lacking in her performance, however, it was vital to the legal standing of the practice that documents were properly completed. He referred to Ms Foster’s evidence in this regard.
[71] Dr Colquhoun submitted that the applicant was clearly aware of the business accounts as they were discussed at regular meetings with Ms Do. He agreed that it was Ms Do and Ms A Dixon who had failed to follow up on the accounts, however, ultimately it was the applicant’s role to properly run the practice.
[72] Dr Colquhoun submitted that he hadn’t intended to terminate the applicant’s employment. He does not like handling administrative matters himself and would have preferred to retain the applicant to do that work. Dr Colquhoun submitted that the applicant could have accepted the reduction in her role to save her job.
[73] Dr Colquhoun submitted that the termination was not harsh, unjust or unreasonable. He referred to and relied on the following decision as being analogous to the present: Donnan v Purkiss Rural Management Pty Ltd[2010] FWA 851.
CONCLUSIONS
[74] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits are considered. Those matters are:
“(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.”
[75] It should be noted that paragraph (d) has no relevance in this matter.
[76] As indicated earlier in this decision, the applicant was dismissed on 12 November 2009 and lodged her claim on 16 November 2009. It has been made within the 14 day time period required in section 394(2).
[77] Section 382 specifies when a person is protected from unfair dismissal. It provides that the person is so protected if, at the time of dismissal:
“(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.”
[78] Although there was no evidence as to the exact number of employees at the relevant time, it is not disputed that the respondent is a small business employer. Section 383 provides that the relevant minimum employment period is one year. The applicant was employed by the respondent for a period in excess of one year.
[79] The evidence demonstrates that the applicant’s annual rate of earnings was less than the high income threshold which at the relevant time was $108, 300.
[80] It follows that the applicant is a person protected from unfair dismissal.
[81] The next matter to be decided is whether dismissal was consistent with the Code. Although there may be issues about whether or not the applicant was paid the correct amount of notice, it is not suggested that the termination of her employment constituted summary dismissal.
[82] Consequently the relevant parts of the Code which need to be considered are as follows:
“Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[83] I am not satisfied that the respondent has complied with the Code. I accept that Dr Colquhoun had concerns about various aspects of the applicant’s performance specifically related to finances, proper completion of paperwork including detox consent forms and the like and the marketing of the business. I also accept that these concerns were raised with the applicant from time to time.
[84] However, I do not accept that these issues were properly put to the applicant such that she understood that she was at risk of being dismissed. Indeed the evidence is that, on some occasions when Dr Colquhoun told the applicant of her perceived failings, his option was a reduction in pay. He wanted to retain her services not dismiss her.
[85] Further, I do not accept that the applicant was given a proper chance to rectify the problems as perceived by Dr Colquhoun. The evidence is that the applicant and Dr Colquhoun had very different ideas about certain aspects of the job, for example, in relation to responsibility for the finances of the business.
[86] Having found that the dismissal of the applicant was not consistent with the Code I now need to turn to the provisions of section 385 of the Act. That section provides that a person has been unfairly dismissed if FWA 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.”
[87] Paragraph (a) is clearly met. I have found that the dismissal was not consistent with the Code. Paragraph (d) is not relevant in this matter.
[88] In order to decide whether the applicant’s dismissal was harsh, unjust or unreasonable it is necessary to turn to section 387 which sets out the factors which must be taken into account by FWA. Those factors are as follows:
“(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.”
[89] I shall address each of these factors in turn.
[90] The immediate reason for the termination of the applicant’s employment was her refusal to accept a sizeable reduction in both duties and her salary. That in itself is not a valid reason. However, I accept that the dismissal took place against a backdrop of concerns about the applicant’s performance.
[91] Under cross-examination Dr Colquhoun agreed that a fair summary of his main concerns with the applicant’s performance was to do with finances and paperwork. I have already noted that the evidence disclosed a considerable differences between the applicant and Dr Colquhoun as to the expectations of her responsibility for managing the finances of the business. In the light of this I am unable to conclude that any failings by the applicant in this regard amount to a valid reason for her dismissal.
[92] I accept that proper completion of certain paperwork was vital to the proper functioning of the respondent’s business. The major areas of concern raised by Dr Colquhoun in his August 2009 memo relate to the applicant’s responsibilities concerning the detox program and the need for a checklist. The applicant conceded that she had not prepared such a list because of work pressures. Dr Colquhoun also had other concerns about the applicant’s performance. On the evidence before me I am not satisfied that these issues, taken as a whole, amount to a valid reason for the applicant’s dismissal.
[93] I am not satisfied that the applicant was properly notified of the reason for her dismissal or provided with a proper opportunity to respond. She was given a choice between a reduction in her salary and duties or dismissal. As noted earlier in this decision, the September 2009 memo which was said by Dr Colquhoun to be the applicant’s performance review, was not given to her until after her dismissal. To the extent that it is relied on by the respondent as providing reasons for the dismissal the applicant was neither notified of it nor given an opportunity to respond to it.
[94] There was no unreasonable refusal to allow the applicant to have a support person. She was accompanied by Ms Do at the meeting at which her employment was terminated.
[95] The applicant had been previously warned about her performance however, as previously noted, I do not accept that those warnings had ever properly suggested that her employment was at risk.
[96] I have noted that the respondent is a small business. Further, there was nothing to suggest that it had any dedicated human resource management specialists or expertise. Clearly these factors have impacted on the procedures followed in effecting the dismissal.
[97] There is no other matter which I consider to be relevant in this matter.
[98] In all of the circumstances and having taken account of each of the factors in section 387 and my findings thereon I have determined, on balance, that the termination of the applicant’s employment was harsh. It follows from this determination and the other matters addressed in paragraphs 86 and 87 above, that the applicant’s dismissal was unfair.
[99] Sections 390, 391 and 392 of the Act deal with remedies for unfair dismissals. I am satisfied that the provisions of section 390(1) and (2) have been met in this case. Subsection (3) provides that an order for compensation must not be made unless FWA is satisfied that reinstatement is inappropriate.
[100] The applicant is not seeking reinstatement nor do I consider that it would be in any way appropriate in the circumstances.
[101] Pursuant to section 390(3)(b) I consider that, in all of the circumstances of this case, it is appropriate to make an order for the payment of compensation. Section 392(2) requires that, in determining an amount for the purposes of such an order, 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.”
[102] I note the evidence as to the condition of the respondent’s finances and am cognisant of the possible effect of any order upon the viability of the enterprise.
[103] The applicant had a little over two years’ service with the respondent.
[104] There is always a speculative element involved in assessing the remuneration that a person would have or would have been likely to have received had it not been for their dismissal. In view of the differences between Dr Colquhoun and the applicant I consider that she would not have remained in the employment of the respondent for a lengthy period of time. That would have had a commensurate impact on the remuneration she would have been likely to have received.
[105] There was no evidence as to any efforts by the applicant to mitigate her loss. Although there was no evidence to this effect, I accept the submission that the applicant has not been in receipt of any remuneration in terms of paragraph (e) since the dismissal. There is nothing before me on which I can make any meaningful finding in terms of paragraph (f). I do not consider that there are other relevant factors under paragraph (g).
[106] Having taken all of these matters into account as well as all of the circumstances of the case I have determined that I should make an order for 4 weeks’ compensation. This is to be based on a gross weekly rate of $1,500. An order to this effect accompanies this decision.
[107] Finally, I indicate that, in deciding this matter, I have given consideration to the need to ensure that a “fair go all round” has been accorded to both the applicant and the respondent as provided in section 381(2) of the Act.
COMMISSIONER
Appearances:
I Latham of counsel, for the applicant
R Colquhoun, for the respondent
Hearing details:
2010.
Sydney.
April 8.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR996423>
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