Michelle Hosking v Project Moves Pty Ltd

[2015] FWC 8517

[2015] FWC 8517

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michelle Hosking
v
Project Moves Pty Ltd
(U2014/14562)

DEPUTY PRESIDENT KOVACIC SYDNEY, 9 DECEMBER 2015

Application for relief from unfair dismissal - harsh, unjust or unreasonable.

[1] Mrs Michelle Hosking (the Applicant) lodged an application under s.394 of the Fair Work Act 2009 (the Act) which was received by the Fair Work Commission (the Commission) on 23 October 2014 alleging that the termination of her employment by Project Moves Pty Ltd (the Respondent) on 10 October 2014 was harsh, unjust or unreasonable. The application was heard on 2 March 2015.

[2] At the hearing, Mrs Hosking appeared and gave evidence on her own behalf. Mrs Hosking’s former husband, Mr Clayton Hosking, and Ms Zeina Moran, Mrs Hosking’s accountant, also gave evidence on her behalf. Mr Alister Pereira, Project Moves’ Sales Manager, and Ms Jackie Carrio, a contract bookkeeper working with Project Moves, appeared for and gave evidence on behalf of Project Moves.

[3] For the reasons set out below, I have found that Mrs Hosking’s termination was not harsh, unjust or unreasonable and therefore dismiss the application.

Background

[4] Mrs Hosking commenced employment with Project Moves on 26 June 2013 as Sales and Project Manager. Project Moves undertook commercial fit outs. Mrs Hosking and Mr Pereira had previously had commercial dealings via their separate business enterprises. Those commercial dealings resulted in Mrs Hosking’s former business owing Mr Pereira some $80,000. Project Moves was established in part as a vehicle to enable Mrs Hosking to repay Mr Pereira the outstanding debt.

[5] Mrs Hosking’s initial contract of employment, which she signed on 17 September 2013, provided a salary package of $58,000 per annum plus superannuation, car allowance and commission based on sales. The contract was for a period of six months. Over the course of her employment, Mrs Hosking was offered five further contracts of which she signed one. Some of those contracts provided for reduced remuneration.

[6] In late September 2014 Mrs Hosking was directed by Mr Pereira to work from Project Moves’ Sunshine office in Melbourne. Mrs Hosking had previously worked from home by agreement, but as Sales and Project Manager was expected to spend time ‘on the road’.

[7] On 10 October 2014, Mr Pereira and Mrs Hosking had a heated telephone conversation. Later that morning Mr Pereira sent Mrs Hosking an email which stated “after our last conversation this morning I decided that your employment at Project Moves is terminated with immediate effect.” Mr Pereira sent Mrs Hosking a further email that afternoon. The version of that email provided to the Commission appears to include comments by Mrs Hosking. Mr Pereira’s second email states, inter alia, that “turnover of Project Moves which was primarily your responsibility didn’t even cover the costs which I funded.”

[8] In her application, Mrs Hosking states that she was not given any reasons for her dismissal and only received the abovementioned email from Mr Pereira stating that she had been dismissed effective immediately. Project Moves its Form F3 – Employer Response to Unfair Dismissal Application cited several reasons in support of its jurisdictional objection that it was a small business and the dismissal was consistent with the Small Business Fair Dismissal Code. The reasons included that “The employee had been warned verbally on several occasions to the lack/capacity of her role and outcome; … Lack of accountability; Instructed to work from office after no sales over six months refused and made varying excuses each day.”

[9] During the course of her employment, it appears that Mrs Hosking had a number of personal issues to deal with, including the breakup of her marriage.

Mrs Hosking’s case

[10] In her written submissions, Mrs Hosking contended that:

• there were never any official meetings about her working from the office, with it being verbally agreed that she would a work from home or on the road and once or twice a week would be in the office;



• the need for her to attend the office was only raised by Mr Pereira at their meeting on 22 September 2014;



• in August 2014 there was concern around the lack of work;



• there were various contracts of employment provided to her by Mr Pereira, some with significant reductions in remuneration;



• one contract offered her a salary of $29,000 per annum; and



• she never received any support from Mr Pereira.

[11] Mrs Hosking’s oral evidence was that she had been given six contracts by Mr Pereira of which she signed two, the first in September 2013 and the second in July 2014. With regard to her performance, Mrs Hosking stated that while there were meetings with Mr Pereira regarding sales and contracts, she had never been given a warning in those meetings or given any sense that her continued employment was at risk if sales did not pick up. Under cross-examination Mrs Hosking denied that she was ever given sales figures during her period of employment or that she had indicated that she wanted to be paid $10,000 per annum so that she could claim Centrelink benefits. In response to questions from the Commission, Mrs Hosking:

• stated that she considered she had lost her job because she raised concerns about the changes in remuneration in her employment contract; and



• did not dispute that Mr Pereira had the ability to direct her to work from the office 1.

[12] As previously noted, Mr Hosking and Ms Moran both gave evidence in support of Mrs Hosking’s application. However, little weight can be attached to their evidence as neither worked with Mrs Hosking, nor were they involved in any of the meetings between Mrs Hosking and Mr Pereira. As such, their evidence amounts to little more than hearsay and/or a character reference in Ms Moran’s case.

The Respondent’s case

[13] Project Moves in its submissions set out a chronology of Mrs Hosking’s period of employment. Key aspects of Project Moves’ submissions were that:

• in-house support was provided to Mrs Hosking, in particular access to a web/marketing specialist, a bookkeeper to provide administrative and accounts assistance and the Sales Manager (Mr Pereira) to whom she would report and who would provide her any professional support that was required;



• in January 2014 Mr Pereira agreed to Mrs Hosking working from home from “time to time but to be limited”;



• on 13 August 2014 Mrs Hosking emailed Mr Pereira regarding a lack of work and indicating that she did not want to lose her job, with a meeting held the following day regarding the lack of sales for the previous six weeks;



• on 22 September 2014 Mr Pereira and Ms Carrio met with Mrs Hosking to discuss her employment status as a result of various matters, including dishonesty as to legal proceedings against her in respect of her former business (see below), deception, the unsatisfactory level of sales, accountability, lack of attendance at head office, efforts in marketing the company, continual requests for advances of pay, and damage to company property;



• Mrs Hosking had initiated an offer to work for $40,000 per annum and later reduced this amount to $29,000 per annum as a retainer in order for her to claim Centrelink benefits;



• Mrs Hosking was convicted as a result of action initiated by the Victorian Building Authority (VBA) for, among other things, illegally managing building work on two home renovation projects while she was self-employed; and



• the prosecution raised doubts as to whether she was capable, honest and trustworthy to represent the Respondent.

[14] Ms Carrio’s oral evidence was that Mrs Hosking never achieved her sales targets, with this discussed in a number of meetings where Mr Pereira provided Mrs Hosking with sales figures and reiterated that sales targets were not being met. In response to questions from the Commission, Ms Carrio attested that:

• Project Moves had never said to Mrs Hosking that her position was on the line but reiterated that there were regular discussions about sales targets not being met;



• Mrs Hosking was aware of the sales figures; and



• there was not just one reason for Mrs Hosking’s dismissal but rather a series of issues 2.

[15] Mr Pereira’s oral evidence reiterated many of the points made in the Respondent’s written submissions. As to the reasons for Mrs Hosking’s dismissal, Mr Pereira stated the following:

“… The first three months, the sales were fantastic, I could not even complain. She did a great job, there was work coming through, there was no reason whatsoever for me to evened out, but the next 15 months was … I couldn’t keep tabs on her so to speak. So basically, in the last 15 months these are the issues pretty much we had. There was a lack of accountability, not only for sales, there was lies of where she was going and who she was seeing.” 3

[16] Later in his testimony Mr Pereira further stated:

“I did everything I could to make this work, but basically it just came to a halt when I couldn’t sustain keeping her on. And basically it all ended where we had a phone conversation which got pretty heated and I asked her specifically to work from the office and that was agreed, as per the email. She was supposed to work from the office and she didn’t turn up and she goes, "Oh, I’m going this, I’m doing that, I’m doing this,” and I said, “No.” I said, “You were asked to start from the office every day.” And basically that’s when we had a heated discussion and I told her, “That’s it.” “If that’s the case,” she goes, “If you want me to work from the office this is not going to work.” I said, “Well then, resign.” She goes, “No, then you sack me,” and that’s exactly what was discussed … I came back to the office and I wrote an email and let her know.” 4

[17] Other key aspects of Mr Pereira’s oral evidence were that:

• with regard to the VBA initiated prosecution, Mrs Hosking’s advice to him differed from that of Mrs Hosking’s former client who complained to the VBA about her performance while self-employed;



• while this caused concerns regarding trust, it was not the deciding factor in Mrs Hosking’s dismissal;



• sales were the major factor in Mrs Hosking’s dismissal;



• sales targets had been set for Mrs Hosking;



• he could have done better in terms of supporting Mrs Hosking in terms of marketing and sales meetings;



• at the time of sending his email of 13 August 2014 to Mrs Hosking, which read “U r not going to lose your job choose. we just need to get some sales quickly as there has been no money for 6 weeks”, he had no intention of dismissing Mrs Hosking 5;



• as to his email of 8 October 2014 to Mrs Hosking, which opened with the words “I’m very happy with your progress”, given the lack of sales over the period of time he was “happy just to get something” 6; and

Mrs Hosking’s non-compliance with the direction given to her to work from the Sunshine office was “the straw that broke the camel’s back”.

The statutory framework

[18] The Commission exercises its discretion in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. In this case there is no contest that Ms Hosking is a person who is protected from unfair dismissal pursuant to s.382 of the Act. In the context of this matter, the relevant provisions of the Act are ss. 385 and 387 which provide as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if FWC 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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

387 Criteria for considering harshness etc.

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

[19] There is no dispute that Mrs Hosking was dismissed, so s.385(a) of the Act is satisfied. Mrs Hosking contends that her termination was harsh, unjust or unreasonable, so s.385(b) is relevant. While Project Moves in its Form F3 stated that it was a small business, this issue was not pressed at the hearing. Further, an email from Mr Pereira to Mrs Hosking on 22 September 2014 7 states “I have 17 full-time employees to look after.” In his oral evidence, Mr Pereira stated that Project Moves is “a company of about 15 people.”8 This indicates that the Respondent is not a small business employer for the purposes of the Act. Accordingly, s.385(c) is not relevant. The termination was not a case of redundancy, so s.385(d) does not apply. Therefore, in determining whether Mrs Hosking was unfairly dismissed, I must consider whether the dismissal was harsh, unjust or unreasonable as per s.385(b).

Was the dismissal harsh, unjust or unreasonable?

[20] In considering whether a dismissal was harsh, unjust or unreasonable, the Act requires the Commission to have regard to the criteria set out in s.387. I will now address these criteria.

(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)

[21] In Rode v Burwood Mitsubishi (Rode’s Case) 9a Full Bench of the then Australian Industrial Relations Commission (AIRC) canvassed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996 citing Selvachandran v Peteron Plastics Pty Ltd.10 The following is an extract from the Full Bench’s decision in Rode’s Case.

“[17] In relation to the meaning of "valid reason" the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:

"Section 170DE(1) refers to a `valid reason, or valid reasons', but the Act does not give a meaning to those phrases or the adjective `valid'. A reference to dictionaries shows that the word `valid' has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: `2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.' In The Macquarie Dictionary the relevant meaning is `sound, just or wellfounded; a valid reason'.

In its context in s 170DE(1), the adjective `valid' should be given the meaning of sound, defensible or wellfounded. 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, when considering the construction and application of a s 170DC."

[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).

[19] We agree with the appellant's submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.”

[22] Project Moves contends that there were several factors underpinning Mrs Hosking’s dismissal, with her sales performance the key factor in this regard. To that end, attached to its submissions were sales summaries for the period July 2013 until end June 2014 and for the period 1 July to24 November 2014. An analysis of those sales summaries indicates that:

• in the 2013-2014 financial year, sales totalled around $316,500, with sales of just over $171,500 in the first quarter of the financial year (i.e. in the three months after Mrs Hosking commenced with Project Moves) and sales of around $33,310 in the last quarter of that financial year (of which $2,705 were in June 2014); and



• over the period 1 July to 10 October 2014 sales totalled $121,810, with $121,500 of that amount attributed to a sale on 1 September 2014 (the Schiavello sale – Project Moves disputes that the sale was a result of Ms Hosking’s efforts); and



• sales for the three month period 1 June to 31 August 2014 totalled $3,025.

[23] This analysis points to a valid reason for Mrs Hosking’s dismissal based on her sales performance. As mentioned above, Mrs Hosking acknowledged that in August 2014 there was concern around the lack of work.

[24] Other factors relied upon by Project Moves include Mrs Hosking’s failure to comply with Mr Pereira’s direction of 22 September 2014 that she work from the office. While Mrs Hosking attested that she did attend the premises every day from 6 to 9 October 2014, i.e. after the direction had been given by Mr Pereira, Mr Pereira stated that Mrs Hosking only came in at certain times. Given Mr Pereira’s unchallenged evidence that this led to the heated conversation on 10 October 2014 which was the catalyst for Mrs Hosking’s dismissal, I prefer Mr Pereira’s evidence on this issue. That preference is reinforced by some important inconsistencies between Mrs Hosking’s oral evidence and the material before the Commission. For instance, in her email to Mr Pereira of 22 September 2014 Mrs Hosking suggested, inter alia, a “Base wage of 10,000 per annum” which contradicts her oral evidence on this issue.

[25] In my view, the direction given to Mrs Hosking was reasonable and Mrs Hosking’s failure to comply with the direction supports a finding that there was a valid reason for her dismissal.

[26] That view is reinforced by the definition of serious misconduct set out in the Fair Work Regulations 2009 which is as follows:

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconductin section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or
(ii) fraud; or
(iii) assault;

(b) the employee being intoxicated at work;
(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.” (Underlining added)

[27] The circumstances in this case regarding Mrs Hosking’s non-compliance with the directive to work from Project Moves’ Sunshine office comes within the scope of Regulation 1.07(3)(c).

[28] Taking into account all of these factors, I am satisfied that, on balance, there was a valid reason for Mrs Hosking’s dismissal. Drawing on the language of the decision in Rode’s Case, I am satisfied that the reason for Mrs Hosking’s termination is defensible or justifiable on an objective analysis of the relevant facts and was not “capricious, fanciful, spiteful or prejudiced.”

(b) Whether the person was notified of that reason

[29] A Full Bench of the then Australian Industrial Relations Commission in Crozier v Palazzo Corporation Pty Ltd 11 when considering this factor in the context of appeal against an unfair dismissal decision made under the Workplace Relations Act 1996 stated:

“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their 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 170CG(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.”

[30] As mentioned above, Mrs Hosking stated in her application that she was not given any reasons for her dismissal. However that contention is contradicted by Mr Pereira’s unchallenged evidence detailing the heated conversation on 10 October 2014 and the email which he sent to Mrs Hosking on the afternoon of 10 October 2014.

[31] While I accept that the reason for Mrs Hosking’s dismissal may not have been communicated in a conventional fashion, I am in no doubt that she was aware of the reasons for her dismissal on 10 October 2014.

[32] This supports a finding that Mrs Hosking was notified of the reasons for her dismissal.

(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[33] Mrs Hosking’s conduct in failing to comply with Mr Pereira’s direction to work from the office was clearly a factor in her dismissal. Indeed her non-compliance was characterised by Mr Pereira as “the straw that broke the camel’s back.” Further, this issue was clearly at the core of the heated discussion on 10 October 2014 which concluded with Mrs Hosking goading Mr Pereira to “sack her” in circumstances where she indicated that she would not resign. Mr Pereira’s unchallenged oral evidence, set out at paragraph [16] above, was that Mrs Hosking stated during that conversation that “If you want me to work from the office this is not going to work”, suggesting that Mrs Hosking did have an opportunity to respond on this issue.

[34] I consider that this factor favours Project Moves.

(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

[35] As Mrs Hosking was summarily dismissed, there was no discussion relating to her dismissal. Accordingly, there was no scope for a support person to be involved. Given the nature of the dismissal, I consider this factor to be a neutral consideration.

(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[36] It was not disputed that the issue of sales had been discussed between Mr Pereira and Mrs Hosking, or that Mrs Hosking had not been given any warnings about concerns regarding her sales performance in this regard or an indication that her employment was at risk unless her performance improved.

[37] However, Mrs Hosking’s email of 13 August 2014 to Mr Pereira in which she states “I don’t want to lose my job” 12 suggests that she was aware that her job was at risk as a result of poor sales. Further, Mr Pereira’s response to an email from Mrs Hosking on 22 September 2014 includes the following statement:

“My offer to you this morning will be the only offer I will be putting forward… If for whatever reason you don’t see this working for you. I will regretfully have to call our arrangement off.” 13

That email response from Mr Pereira reinforces a sense that the employment relationship was on shaky ground.

[38] On balance, however, the absence of any formal warnings and/or explicit indication that Mrs Hosking’s employment was at risk supports a finding that her dismissal was harsh, unjust or unreasonable.

(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

(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

[39] As previously noted, Mr Pereira attested that Project Moves is a company of about 15 people. While no submissions were made by either Mrs Hosking or Project Moves as to the absence of dedicated human resource management specialists, it is clear that the processes followed in this case could not be described as “textbook”. In my view, the size of the enterprise, together with the absence of dedicated human resource management specialists, did impact on the procedures followed in effecting the dismissal.

[40] As such, I consider that these factors favours Project Moves.

(h) Any other matters that FWC considers relevant

[41] Based on the material before the Commission it is clear that there was a level of mistrust between the parties. That mistrust appears to have been largely born of the various contracts of employment and changes of remuneration given to Mrs Hosking by Project Moves and by Mr Pereira’s doubts as to Mrs Hosking’s efforts to win new work and stemming from the VBA initiated prosecution, combined with poor sales. These factors are indicators of the deteriorating relationship between Mrs Hosking and Mr Pereira. When considered in the context of concerns about the level of sales and Mrs Hosking’s failure to follow the direction to work from the office, they understandably added fuel to an increasingly difficult working relationship. They are not, however, relevant considerations regarding the merits of Mrs Hosking’s unfair dismissal application.

[42] Accordingly, I find that there are no other relevant considerations.

Conclusion

[43] Drawing on the above analysis, I find that the factors that favour a finding that the dismissal was not harsh, unjust or unreasonable were that there was a valid reason for Mrs Hosking’s dismissal, that Mrs Hosking would have been aware of the reasons for her dismissal, that Mrs Hosking was given an opportunity to respond to those reasons and that there are no other relevant considerations. On the other hand, the only factor favouring a finding that the dismissal was harsh, unjust or unreasonable is that Mrs Hosking had not been formally warned about her unsatisfactory performance or given an explicit indication that her continued employment was at risk before her dismissal.

[44] Against that background, and for all these reasons outlined above, I do not consider that Mrs Hosking’s dismissal was harsh, unjust or unreasonable. Accordingly, I dismiss the application. An order to this effect will be issued in conjunction with this decision.

Appearances:

M. Hosking on her own behalf.

A.Periera with J. Carrio for the Respondent.

Hearing details:

2015.

Melbourne:

March 2

 1   Transcript at PN1016-1017

 2   Ibid at PN365

 3   Ibid at PN489

 4   Ibid at PN506

 5   Ibid at PN839

 6   Ibid at PN762

 7   Exhibit P2

 8   Transcript at PN504

 9   Print R4471

 10 (1995) 62 IR 371

 11 (2000) 98 IR 137 at paragraph 73

 12   Exhibit P5

 13   Exhibit P2

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