Michelle Paganoni v Mecwa t/a Mecwacare

[2019] FWC 4231

[2019] FWC 4231

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michelle Paganoni
v
MECWA t/a Mecwacare
(U2019/954)

DEPUTY PRESIDENT COLMAN MELBOURNE, 10 JULY 2019

Application for an unfair dismissal remedy – aged care facility – meal served by applicant departed from the menu plan – use of instant mash instead of fresh potatoes – valid reason but special circumstances – dismissal unfair – compensation ordered

[1] This decision concerns an application made by Ms Michelle Paganoni under s 394 of the Fair Work Act 2009 (Cth) (Act) for an unfair dismissal remedy. Ms Paganoni was employed as a cook and food service assistance by ‘MECWA’, a not for profit company limited by guarantee and trading as ‘Mecwacare’. She worked at the company’s aged care facility on the Mornington Peninsula, called ‘Park Hill’, from April 2009 until her dismissal on 9 January 2019. She was dismissed for serving a meal to residents that departed from the menu plan without seeking management approval, and for serving a substandard meal. For the dinner service on 30 November 2018, Ms Paganoni prepared instant mash potato to accompany the meatloaf, instead of fresh minted potatoes. The company considered that the instant mash was runny and unacceptable.

[2] Ms Paganoni contends that there was a good reason for her serving the instant mash. She says that the pilot light on the kitchen stove had gone out, and that by the time she noticed this, there was not enough time to prepare the fresh potatoes in time for the dinner service. She says that she did her best in the circumstances. She also says that there were often changes to the menu plan at Park Hill, and that management approval was not always sought. She says that her dismissal was unfair and seeks compensation in lieu of reinstatement.

[3] Mecwacare contends that it had a valid reason for dismissing Ms Paganoni, namely her refusal, in the face of a previous warning, to comply with her contractual obligation to follow the menu plan, her failure to seek approval for the variation, and her serving of an unacceptable meal to residents. It says that its decision to dismiss Ms Paganoni was not unfair in the circumstances.

[4] Ms Paganoni was represented by the Health Services Union of Australia (HSU). She gave evidence at the hearing, as did Mr Tim Rowley, an HSU organiser. Also giving evidence for Ms Paganoni, pursuant to an order to attend, were two food service assistants, Ms Cathy Dentith and Ms Elise Hope, who had worked with Ms Paganoni.

[5] The witnesses who gave evidence for the company were Mr Simon Armstrong, the facility manager at Park Hill; Mr Wayne Lester, who had been the facility manager until April 2018; Ms Bernadette Steveni, human resources service partner; and Ms Kylie Peacock, a cook. A witness statement of Ms Louise Hogan, human resources manager, was filed however Ms Hogan did not attend the hearing.

[6] At the conclusion of the proceedings I directed that final written submissions be filed. The company filed with its final submissions a witness statement of Ms Patricia Roberts, a food service assistant, addressing what she saw in the dining room on 30 November 2018. However I did not direct or give leave for the filing of additional evidence, and the HSU did not have the opportunity to cross-examine Ms Roberts. I have not relied on this statement.

[7] Section 396 of the Act requires that I decide four matters before considering the merits of Ms Paganoni’s application. There is no dispute between the parties, and I am satisfied, of the following. First, Ms Paganoni’s application was made within the 21 day period required by s 394(2) of the Act. Secondly, Ms Paganoni was a person protected from unfair dismissal, as she earned less than the high income threshold (s 382). Thirdly, the dismissal was not a case of genuine redundancy. Fourthly, Mecwacare is not a small business for the purposes of the Act, and therefore no question of compliance with the Small Business Fair Dismissal Code arises.

Factual setting

[8] The factual background is largely uncontroversial, although there are some contested matters that I must resolve. Ms Paganoni worked six shifts each fortnight as a cook at Park Hill. She was required to prepare lunch and dinner each day. She also worked two shifts a fortnight as a food service assistant, helping with breakfast and cleaning dishes. On the afternoon of 30 November 2018, Ms Paganoni was responsible for preparing the evening meal for Mecwacare’s 69 residents. The menu plan specified meatloaf, roast pumpkin, beans and ‘minted potatoes’, which, it was agreed, connotes boiled fresh potatoes. Dinner commenced at 5.00pm. Trolleys for in-room service had to be ready by 4.45pm.

[9] At 3.45pm, Ms Paganoni put the potatoes on the stove to boil and then left the kitchen for her break. She returned to the kitchen and continued to prepare the meal, but at about 4.10pm, she checked on the potatoes and saw that they were not boiling. She noticed that the pilot light on the stove had gone out. Ms Paganoni considered that there was now insufficient time to boil the water required for all the potatoes, plate the food, and serve it to residents by the start of the dinner service. She did not want to delay the service, because this would have a flow on effect for personal care staff. Ms Paganoni decided that the best thing to do was to make up a batch of instant mash potato as a replacement for the fresh potatoes.

[10] The instant mash was stocked in the kitchen’s larder. Ms Paganoni preferred not to use it however she considered the situation to be critical and felt that she had no other option. 1 She did not consult the facility manager because, she said, she did not believe he could help. She prepared the meatloaf and beans. Instead of pumpkin she mistakenly prepared sweet potato. And she prepared the instant mash. Before serving up the mash, she tasted it. The mash was runnier than she would have liked but she thought that it tasted fine. The meals were served. Ms Paganoni went into the dining room and apologised to residents for serving instant mash potato, and explained what had happened. One resident made an unfavourable comment, asking Ms Paganoni, in reference to the mash, ‘what do you call that?’2

[11] Ms Hope was working as a personal care assistant that afternoon. Part of her job was to assist with serving the meals. When she was collecting the plates after dinner, she looked down at one particular plate and saw uneaten mash potato. She thought it looked bad. Ms Hope said that she showed it to Ms Paganoni and asked ‘what’s this?’ to which Ms Paganoni said that it was instant mash, a new product, and that she had not been able to thicken it. Ms Hope’s evidence was that Ms Paganoni suggested that she go and show the plate to Mr Armstrong. 3 Ms Paganoni said that it was Ms Hope’s idea to show Mr Armstrong the plate and that she agreed.4 However there is no fundamental tension in the accounts. Both of them agreed that the uneaten instant mash should be shown to management.

[12] Ms Hope took the plate to Mr Armstrong. According to Ms Hope, he said that the mash looked terrible. Ms Hope told Mr Armstrong that Ms Paganoni had said it was a new product, and Mr Armstrong said words to the effect of ‘that’s no good’, took a photograph of the plate, 5 and said that he was going to send the photograph to the catering company.6

[13] According to Mr Armstrong, Ms Hope said to him that she had told Ms Paganoni that such food cannot be served to residents, and that Ms Paganoni had replied to her ‘do what you want with it, this is the shit that Mecwacare provides to cook’. 7 However Ms Hope firmly denied saying these things.8 I prefer her account to that of Mr Armstrong. She was adamant that Ms Paganoni did not say this to her and that she did not relay any such remark to Mr Armstrong. Her oral evidence was clear and consistent and I accept it. It was also consistent with the brief statement that Mecwacare required her to sign, apparently under some pressure, which was tendered at the hearing.9

[14] On 5 December 2018, Ms Paganoni received a letter of allegations from Ms Camilleri. It stated that a complaint had been raised against her in relation to her ‘failure to comply with the Food Safety Program’, which includes the obligation to follow the menu plan, and that this had posed a serious risk to the company’s reputation and to ‘client satisfaction and health’. 10 It said that the menu plan on 30 November 2019 included ‘mint potatoes, the preference always being for fresh potatoes which were available at the time.’ The letter stated that Ms Paganoni had used instant mash, which was ‘not mixed according to the instructions and resulted in a substandard food alternative which you allowed to be plated and served to the residents (photo attached)’. She was directed to attend a meeting the following day.

[15] On 6 December 2018, Ms Paganoni met with Mr Armstrong and Ms Steveni. She was asked to explain what had happened with the meal on 30 November 2019 and why she had not followed the meal plan. She recounted that the pilot light on the stove had gone out, and that she had not thought there was enough time to prepare boiled potatoes. She explained that the instant mash had tasted fine, and that she had apologised to residents for not serving the boiled potatoes. She was shown the photograph taken by Mr Armstrong on 30 November 2018. Ms Paganoni said of the photograph that this was not how she had served the meal, as the meatloaf and beans were missing, and that the meal appeared to be half-eaten. 11

[16] On 18 December 2018 Ms Hogan sent Ms Paganoni a letter, restating the allegations from the letter of 5 December 2018 and noting Ms Paganoni’s responses in the meeting of 6 December. The letter went on to state that Ms Paganoni had not taken ‘corrective action to improve the residents’ meal’. It also stated that Ms Paganoni had not prepared the meal as instructed in the menu plan, as she had used sweet potato instead of pumpkin and had not served the green beans. It said that both of these actions breached the ‘Food Services Program and Policies’. It further stated that failure to follow a menu plan was a breach of Ms Paganoni’s contract of employment, which required her to ‘prepare meals to specifications outlined in the menu.’ 12 The letter then referred to a warning provided to Ms Paganoni for breaches of the Food Safety Plan on 24 January 2018, and another warning given to her in April 2018 concerning failure to follow the menu plan. It asked her to provide any additional information by close of business the following day, in advance of Mecwacare deciding whether to terminate her employment.

[17] Ms Paganoni took leave from 19 December 2018. It had been scheduled as annual leave but was later recognised as personal leave. The company’s deadline for Ms Paganoni’s response was extended. Nevertheless on 19 December 2018 Ms Paganoni sent to Ms Hogan a brief email reiterating some of the points she raised in the meeting of 6 December 2018. On 21 December 2018 Mr Rowley sent an email to Mr Armstrong, requesting that no decision or outcome be made about Ms Paganoni’s employment until a meeting could be arranged, so as to allow her to have union representation and a chance to put forward any other alternatives or reasons, and so that a fair decision could be made. 13

[18] On 9 January 2019 Ms Paganoni and Mr Rowley attended a meeting with Mr Armstrong and Ms Hogan. At the start of the meeting Ms Hogan stated that no new information had been provided and that the company had decided to terminate Ms Paganoni’s employment. 14 Mr Rowley’s evidence was that he and Ms Paganoni were given no opportunity to discuss Ms Paganoni’s response. He said that he asked what the reason for termination was, and in particular whether it related to the latest incident or was also connected to previous warnings. He said that Ms Hogan did not respond directly, but showed him the photograph of the instant mash referred to earlier and asked him ‘would you serve this to your mother?’15

[19] Ms Paganoni was later provided with a termination letter, dated 10 January 2019, restating much of what was set out in the allegations letter of 18 December 2018. Instead of referring to the company’s ‘preference’ for fresh potatoes, it stated that the ‘requirement is to always serve fresh potatoes’ and that instead Ms Paganoni had ‘used instant mash potato which was not mixed according to the instructions and resulted in substandard food.’ The letter stated that Ms Paganoni had failed to follow the menu plan in breach of her contract of employment, breached the company Food Safety Program and Code of Conduct and not upheld its values, noting in particular her failure to prepare meals ‘to the specifications outlined in the menu.’ It also stated that Ms Paganoni’s ‘performance and level of competency’ were below the acceptable standard which posed a risk to the health and wellbeing of residents and the company’s reputation. It confirmed that her employment had terminated on 9 January 2019.’ 16 Ms Paganoni was paid five weeks’ pay in lieu of notice.

[20] For a dismissal to be unfair, the Commission must be satisfied that it was harsh, unjust or unreasonable (s 385(b)). In considering whether it is so satisfied, the Commission must take into account the matters specified in s 387. I will address each of these in turn below.

Was there a valid reason for dismissal (s 387(a))?

[21] The Act directs consideration of whether there was a valid reason for the dismissal related to the person’s capacity or conduct. A valid reason is one that is sound, defensible or well-founded. The Commission does not stand in the shoes of the employer and determine what the Commission would do if it had been in the employer’s position. The question the Commission must address is whether there was a valid reason for dismissal, in the sense both that there was a good or sufficient reason, and a substantiated reason.

[22] Ms Paganoni contended that there was no valid reason for her dismissal. She said that she had started to prepare potatoes in accordance with the menu plan but later saw that the pilot light on the stove was not working, the water had not boiled, and she had insufficient time to prepare boiled mint potatoes. She said that she exercised her judgement and made a batch of instant mash potatoes as a replacement, in an effort to ensure the meal was served on time. I accept Ms Paganoni’s evidence about these matters. She set out to comply with the menu plan. She wanted to ensure the meal was not delayed. She decided to use a product that the company stocked in the kitchen.

[23] The company contends that there was a valid reason for dismissal related to Ms Paganoni’s conduct and performance, because she failed to follow a lawful direction to follow the menu plan, and did not seek Mr Armstrong’s approval to depart from the plan. The direction in question was a written warning given to Ms Paganoni on 9 April 2018 for having served fish fingers, rather than fresh fish. 17 The warning stated that serving fish fingers was not in accordance with the menu plan, and that this was a breach of Ms Paganoni’s contract of employment. It made reference to previous warnings that had been given to Ms Paganoni, and stated that the company had decided to ‘reissue a second and final warning’, which would remain on her file for 12 months, and that should there be ‘another breach’, it ‘will result in the immediate termination of employment.’

[24] I note that the warning letter of 9 April 2019 did not, in terms, direct Ms Paganoni to seek approval for any departure from the menu plan. But it reminded her of her contractual duty to prepare meals to the specifications in the menu plan. 18 As the company explained, the position description for cooks and food service assistants states that specific responsibilities include preparing meals to the specifications outlined in the menu and in consultation with the facility manager and consultant professionals.19

[25] The clear implication of the warning in relation to the obligation to follow menu plans is that a departure from the menu plan must be approved by the employer. I find that Ms Paganoni understood this. In her email to Ms Camilleri dated 3 April 2018, shortly before the final warning was issued in relation to the use of fish fingers rather than fresh fish, Ms Paganoni said that she was ‘very sorry she had made the switch as I always follow the menu’, and that she would ‘follow all guides lines (sic) very strictly and if I encounter any diversity (sic) I can not (sic) adhere to I’ll go straight to the facility manager.’ This is an oddly formulated text. The word ‘diversity’ is out of place, and clearly does not carry its ordinary meaning of ‘a range of different things’. And one does ‘adhere’ to ‘diversity’. But read in the context of the circumstances, in which Ms Paganoni had been questioned about her departure from the menu plan, it cannot seriously be doubted, and I find, that Ms Paganoni is conveying in this message her understanding that the menu plan is important and is to be followed, and that if she needs to diverge from the menu (which she is required to adhere to), she will ‘go straight to the facility manager.’ That is what the facility manager understood. That is my reading of the message. Moreover, Mr Lester said that Ms Paganoni’s undertaking was the reason why the company decided to give her a final warning, rather than dismiss her. 20

[26] Ms Paganoni contests the validity of the warning of 9 April 2019. She says that the fresh fish set by the menu plan at the time did not smell good, and that she exercised her judgement to use fish fingers instead. However Mr Lester, who was the facility manager at the time, gave evidence that Ms Paganoni did not raise this with management, and that she had said rather that she did not like the fresh fish (hoki). 21 I accept his evidence. If she had a concern about the fish, Ms Paganoni should have raised it with the company. It is not mentioned in her email to Ms Camilleri dated 3 April 2019.

[27] Ms Paganoni also says that her supervisor at the time, Ms Peacock, was aware that she was using fish fingers and approved this. 22 She referred to this in her email to Ms Camilleri on 3 April 2019. Ms Peacock denied authorising Ms Paganoni to use fish fingers. She said that she told Ms Paganoni not to do this, and that Ms Paganoni defied her. However, Mr Lester said that Ms Peacock was given a warning in connection with the fact that she was aware of Ms Paganoni using fish fingers and had not properly managed her or raised the matter with him.23 But he said that Ms Peacock had not authorised the use of fish fingers.24 I find, as the company found, that Ms Peacock was aware that Ms Paganoni was using fish fingers, but that she did not specifically authorise her to do this.

[28] Ms Peacock’s knowledge of Ms Paganoni’s use of fish fingers cannot be said to invalidate or undermine the warning given to Ms Paganoni on 9 April 2019. The warning reminded her of what she was required to do anyway, namely abide by her contractual obligation to observe the menu plan. The fact that Ms Peacock received a warning for not managing Ms Paganoni effectively has no bearing on Ms Paganoni’s legal obligation to follow the rules, or the company’s right to warn her for not having complied with them. Moreover, Ms Paganoni recognised these obligations and promised to observe them in her message to Ms Camilleri on 3 April 2019.

[29] Ms Paganoni contended that, under the disciplinary process in clauses 61.1 to 61.4 of the MECWA (trading as mecwacare), ANMF and HSU Enterprise Agreement 2014 (Agreement), three official warnings are to be given prior to termination, but this is not the case. Rather, the provisions state that warnings may be given if appropriate.

[30] Ms Paganoni gave evidence that it was not uncommon for there to be departures from the menu plan, and that her supervisor, Ms Peacock, herself would depart from them without consulting the facility manager. She cited examples of plum pudding being substituted for a different desert, cottage pie made instead of lasagne, and the interchanging of different vegetables of the same colour. 25 Ms Peacock denied that she substituted cottage pie for lasagne. She acknowledged that plum pudding was used incorrectly on one occasion, but said that she had misread the menu. And she denied telling staff they could use any vegetable of the same colour as the one on the menu. However, Ms Dentith said that there were regularly deviations from the menu plan.26 She said that when she had to cook, she departed from the menu plan and did not always consult the facility manager.27 She also said that she observed Ms Peacock use the same instant mash used by Ms Paganoni on two occasions after 30 November 2019.28 And Ms Hope said that she had seen Ms Peacock serve instant mash potato, not as a topping, but as an element of a meal not long before 30 November 2019.29 I accept this evidence. The company’s position is that instant mash is not to be used as a stand-alone vegetable. I infer therefore that Ms Peacock’s use of instant mash as an element of a meal occurred without approval by management.30

[31] I find that there were departures from the menu plan, and that it was not always the case that the facility manager would be consulted about them. Nevertheless, there was a contractual obligation on Ms Paganoni and other kitchen staff to follow the menu plan. Further, Ms Paganoni had been reminded about this obligation in the relatively recent past, and given a final warning. She had undertaken to comply with this obligation. But she did not do so. This contravention constituted a valid reason for dismissal. In my opinion, in the peculiar circumstances of this case, Ms Paganoni had a good reason to depart from the menu plan. There was something of an emergency and she needed to depart from the plan in order to serve dinner on time. But she required the approval of the company to do so.

[32] Ms Paganoni said in her witness statement that she did not report her problem with the potatoes to Mr Armstrong because in the past she had been to see him about various matters, such as a lack of ingredients in the kitchen, and he had not been of any assistance. 31 She felt that she had no option but to make the necessary decision. She said that on one occasion she had no roast to serve, and when she spoke to Mr Armstrong, he simply asked ‘what are you going to do?’32 But even if it is accepted that Mr Armstrong might not ‘help’ with the relevant problem, or simply agree to a proposal, it was not for Ms Paganoni to decide whether it would be efficacious to follow the rules. Her job was to adhere to the menu plan. Before departing from the menu plan she had to consult Mr Armstrong. She did not do so. This deprived the company of the possibility of deciding on a different course, such as perhaps approving the use of a different vegetable altogether or even delaying the meal service. Ms Paganoni also said in cross-examination, and somewhat in passing, that she did not have time to notify the facility manager. I do not accept that this was her reason for failing to notify Mr Armstrong. She said later in cross-examination that in fact she had not notified management of changes to the menu ‘for some time’ because each time she sought to do so she had received no help or support.33 This misses the point: she was required to seek approval for changes to the menu, not assistance in implementing them.

[33] I will proceed to consider the company’s other grounds for asserting that there was a valid reason for dismissal, as they may be relevant to the overall assessment of whether the dismissal was unfair. I also take account of these matters for the purpose of s 387(h). The company’s final written submissions identify the following additional dimensions of Ms Paganoni’s conduct and performance as constituting, or forming part of, a valid reason for dismissal. 34

[34] First, it says that Ms Paganoni not only diverged from the menu plan, but did so ‘unsuccessfully’, preparing a meal with instant mash potato product that was sloppy in consistency and not acceptable for serving. It said that there was no defensible reason why poorly prepared mash was served to the residents. However, Ms Paganoni gave evidence, which I accept, that the product was difficult to use, and Ms Hope gave evidence, which I also accept, that Ms Peacock had had difficulty with it also. 35 Moreover, Ms Hope’s evidence was that the reason she went to see Mr Armstrong with the plate of uneaten mash was to show him evidence of a deficient product,36 and that he reacted to the plate by saying that he would contact the caterer.

[35] I find that Ms Paganoni did her best to prepare the instant mash to an acceptable standard. The mash was, as Ms Paganoni said, ‘runnier than she would have liked’, but I also consider that the photograph of the plate with the uneaten mash shows it in a worse state than at the commencement of the meal. Ms Hope said that she did not notice anything wrong with the mash until she was collecting the plates after the meal. She hypothesised, reasonably in my view, that it had changed colour and form after cooling. The instant mash turned out rather badly. It looked unappetising. But the only evidence about how it actually tasted was that of Ms Paganoni, who said that it was fine. I do not consider that the company has established that the meal was unacceptable for serving.

[36] Secondly, the company contended that Ms Paganoni failed to comply with the Food Safety Plan and Polices, ‘including the requirements of the Nutrition and Hydration Policy and Procedure’ that food be ‘nutritious and appealing in presentation.’ However there is nothing to suggest that the meal was unsafe, or that it failed to meet any particular nutritional standard. The instant mash was a product purchased by the company for use in meals to be consumed by its residents. It was stocked and readily on hand in the kitchen.

[37] As to nutrition, the company contended that by presenting unappealing food, Ms Paganoni affected residents’ food intake and put at risk their health and wellbeing. 37 By this it appears to mean that residents might not have eaten it and thereby foregone some nutritional benefit. But the only clear evidence of residents not eating the mash is the photograph of the single uneaten plate, and the evidence of Ms Paganoni that one resident asked her ‘what do you call this?’ It is not known how many residents did not eat their mash potato. There is no evidence of any nutritional detriment suffered by residents from not eating unappetising mash, nor is any reasonable inference of such a detriment able to be drawn from the facts.

[38] Thirdly, the company makes the broader contention, referred to also in the termination letter, that Ms Paganoni’s competency as a cook was below the acceptable standard. In my view this has not been substantiated. I do not consider that serving unappealing instant mash potato on a single occasion, in the present circumstances, bears out incompetence. Further, I accept Ms Paganoni’s evidence that she made an innocent mistake by using sweet potato instead of pumpkin, similar to Ms Peacock misreading the dessert menu. And I accept her evidence that she did in fact serve the green beans. The company’s argument on this point appeared to rely on the photograph referred to above, where no beans are visible, but they may simply have been eaten, and there was also evidence that some residents request not to receive some vegetables.

[39] Mecwacare also contended that instant mash potato is not to be used as a stand-alone vegetable but only as an addition to meals, such as where texture modification is needed to assist residents to swallow. 38 However, the company did not substantiate that there was any rule to this effect, or that any such rule had been disseminated to employees. The evidentiary basis for the alleged rule is identified in the company’s closing submissions as paragraph 7 of Mr Armstrong’s statement, where he recounts that he sent the photograph of the uneaten mash to a Shannon Kee, the ‘Hotel Services Manager’, who replied to Mr Armstrong several days later stating that instant mash should only be used for piping and toppings and the like. Mr Kee did not give evidence. In any event, this is only Mr Kee’s opinion. It is not established that it was reflected in policy, or that kitchen staff had been told about this.

[40] Ms Peacock agreed with the company that instant mash was to be used for ‘mince moist’ meals, rather than standalone vegetables, but Ms Paganoni 39 and Ms Hope40 both gave evidence that mash was used as a stand-alone vegetable, as did Ms Dentith.41 Ms Steveni also said that there was nothing to say that instant mash could not be used as a standalone vegetable, although as a ‘general practice’ it was only used for ‘toppings and things.’42 I reject the contention that Ms Paganoni did anything wrong by using the instant mash potato, other than not seeking approval for the departure from the menu plan.

[41] The company also submitted that Ms Paganoni had trivialised the issue of meal quality by stating to Mr Armstrong that no one was ‘poisoned’ 43 and that only one resident complained. However, I consider that the former was a sarcastic remark, the import of which was that the company had overreacted to the serving of unappealing instant mash potato. The comment did not suggest, as the company seems to contend, that it is acceptable to serve to residents anything that is not positively harmful. I do not consider that Ms Paganoni was indifferent to the quality of meals. In my view she cared about the residents having a good meal experience. Her motivation for using the instant mash in the first place was to ensure that the meal service started on time.

[42] The company also said that during the interview of 6 December 2018, Ms Paganoni acknowledged that she should not have served instant mash instead of fresh potatoes. But it is clear from Ms Paganoni’s evidence that she realises that serving the instant mash was not a desirable course; instead she thought it a necessary one to ensure that the evening meal was served on time. The termination letter also stated that Ms Paganoni had not mixed the instant mash according to the instructions, but this has not been substantiated.

Notification of reasons for dismissal and opportunity to respond (s 387(b) and (c))

[43] In considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account whether an employee has been notified of the reasons for dismissal and whether the person was afforded an opportunity to respond to any reason related to their conduct or performance.

[44] To tell against a conclusion that a dismissal was unfair, notification of the reason for dismissal should occur before the decision to dismiss is made, and be made in explicit, plain and clear terms. The question of whether an employee had an opportunity to respond to reasons relating to conduct or performance should be understood in a common sense way; the focus is whether the employee is treated fairly, rather than on any formality.

[45] It is not contested that Ms Paganoni was notified of the reasons for dismissal. However, Ms Paganoni contended that she was denied an adequate opportunity to respond to those reasons. She says that she was not accustomed to expressing herself in writing and that the process of a having a written response to a show cause letter was not appropriate. However, if she objected to the process on this basis, she should have said so.

[46] Ms Paganoni also contends that at the meeting on 9 January 2019, she did not have a chance to speak with the company about her position. Mr Rowley had written to Ms Hogan on 21 December 2018 and asked the company not to make a decision on disciplinary action until another meeting could be arranged to allow her a chance to put forward her position. On 21 December 2018, Mr Rowley sent further correspondence requesting that relevant documentation about the matter be forwarded to him. This was subsequently provided by Ms Hogan. This correspondence included the letter of 18 December 2018 that asked for a written response. The union could have objected to this process but it did not do so.

[47] I appreciate that the union and Ms Paganoni expected that the meeting of 9 January 2019 would involve a substantive discussion about what disciplinary action ought to be taken, but it does not appear to me that the company said or did anything to give rise to this expectation. The letter of 18 December 2018 stated that, ‘prior to mecwacare making a final decision to terminate your employment, we provide you the opportunity to make available any additional information for mecwacare to consider’. This was to be provided in writing by close of business the following day. The deadline was extended until 20 December 2018. Then on 21 December 2018, Ms Hogan wrote to Ms Paganoni confirming the meeting that would occur on 9 January 2019. It stated that the purpose of the meeting was to discuss the company’s decision ‘following your response to our correspondence dated December 18.’

[48] According to Ms Hogan’s witness statement, at the commencement of the meeting on 9 January 2019, she advised Ms Paganoni that no new information had been provided for the company to consider and that she then advised Ms Paganoni that the company had decided to terminate her employment. This is consistent with the evidence of Ms Paganoni and Mr Rowley. Ms Hogan did not ask whether Ms Paganoni or Mr Rowley had any further information to provide. But it is not contended that Ms Paganoni or Mr Rowley actually had, or said they had, new information that they wished to provide. Rather, they wanted to discuss the question of disciplinary action and persuade the company not to proceed with dismissal.

[49] In my view, Ms Paganoni was afforded an opportunity to respond to reasons for dismissal related to capacity or performance. Those reasons were put to her in the letter of 18 December 2018. In her email of 19 December 2018 Ms Paganoni addressed what had occurred on 30 November 2018, and also made submissions that dismissal would in her view be unfair. The union was provided with the documentation it had asked for. In my view it would have been desirable for a company representative to specifically ask whether Ms Paganoni had any further information, and to discuss the appropriate disciplinary response with them. In this sense, the opportunity afforded to Ms Paganoni to respond was perhaps not the best opportunity, but it was an adequate and fair opportunity for the purpose of s 387(c).

Refusal to allow a support person etc. (s 387(d))

[50] There is no suggestion that the company refused, unreasonably or otherwise, to allow Ms Paganoni to have a support person present to assist in discussions relating to the dismissal (s 387(d)). Ms Paganoni did not ask the union to represent her at the meeting on 6 December 2018. She asked to have the union present at the meeting in January 2019 and this was allowed. I note that s 387(d) contemplates a ‘support person’ being ‘present’, rather than an advocate or representative taking an active role.

Warnings about unsatisfactory performance (s 387(e))

[51] If a dismissal relates to unsatisfactory performance, s 387(e) requires the Commission to consider whether the person has been warned about that unsatisfactory performance prior to dismissal. The reason that I have found to be a valid reason was Ms Paganoni’s failure to comply with her contractual obligation to follow the menu plan. This relates fundamentally to conduct, not unsatisfactory performance. The warning she received in relation to this matter, which I addressed at [28] above, is relevant, however it falls to be considered in connection with valid reason under s 387(a), and under s 387(h), not s 387(e).

Size of the enterprise, human resources management specialists etc. (s 387(f) and (g))

[52] The Commission is required to consider the degree to which the size of the employer’s enterprise, and the degree to which the absence of dedicated human resources specialists or expertise in the enterprise, would be likely to impact on the procedures followed in effecting the dismissal (ss 387(f)(g)). Ms Paganoni says that the company is a large employer with over 1600 employees whose processes for dealing with disciplinary issues should be of a higher standard (s 387(f)). She says that the company has a team of human resources staff (s 387(g)).

[53] Plainly the company is a reasonably large organisation and has dedicated human resources specialists. However, these factors do not ‘raise the bar’ for a larger employer; rather, for smaller employers with little or no internal human resources capability, less might be expected in relation to procedural elements of a dismissal. In my view, these considerations do not carry weight in the analysis of whether the dismissal was unfair.

Any other matters the Commission considers relevant (s 387(h))

[54] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission is required to take into account any other matters that it considers relevant. The Commission should consider all of the circumstances, and weigh the gravity of any misconduct, poor performance or other circumstances telling against a conclusion that a dismissal was unfair, with any mitigating circumstances and other relevant matters that might support the applicant’s claim that the dismissal was harsh, unjust or unreasonable.⁴⁴

[55] I have taken into account Ms Paganoni submission that she was employed with the company and its predecessor for nearly ten years and until more recently had a good employment record. I also note the company’s contention that Ms Paganoni had received three warnings in the previous 12 months, all noting the possibility of termination in the event of further poor performance or conduct, and that the last warning specifically related to the requirement to observe the menu plan. The earlier two warnings were given in January and February 2018. I note that Ms Paganoni disputed them however I consider the warnings to have been issued on a proper basis. They related to a failure to undertake daily food monitoring and properly label food.

[56] I will not recite all of the various contentions advanced by the parties under this particular heading, as they largely recapitulate the arguments relating to the validity or otherwise of the various reasons put forward for termination, which I have considered above. I note however that I reject the company’s contention that Ms Paganoni’s recent work history constitutes a ‘subtle form of elder abuse’. 45 Elder abuse is a very serious matter and allegations about it are not to be made lightly. There was no abusive element in Ms Paganoni’s conduct. Indeed the present controversy arose because Ms Paganoni strove to ensure that the evening meal was served on time despite an innocent mishap.

Conclusion on the question of unfairness

[57] Under the unfair dismissal framework in the Act, the presence of a valid reason for dismissal is only one consideration that the Commission is required to take into account in determining whether a dismissal was unfair. It is plainly a consideration of particular importance. In my view, where there is a valid reason for dismissal relating to conduct that has been the subject of a prior warning, it will be a rare dismissal that is found to be unfair. However, in the present matter there are special circumstances.

[58] First, Ms Paganoni was trying to do the right thing by the residents. She had set out to prepare the evening meal in accordance with the menu plan. She had put water on the stove to boil. Unbeknown to her, the pilot light was out. When she realised the water had not boiled, she had a dilemma. There was no time to prepare the evening meal in strict accordance with the menu plan. To prepare the fresh minted potatoes now would mean that residents would receive their meals late. She wanted to respond quickly to ensure the residents received their meals on time.

[59] Secondly, the evidence shows both that there were departures from the menu plans at Park Hill, and that they were not always authorised by management. In my view there has not been a consistent approach to the enforcement of the contractual obligation of kitchen workers to follow the menu plan.

[60] Thirdly, the company’s decision to dismiss Ms Paganoni was based not only on her departure from the menu plan, but also on the manner in which she departed from it, that is, by using instant mash and producing a batch of it that had poor consistency and looked unappetising. It is not clear that the company would have dismissed Ms Paganoni if the mash had turn out better. However, in my view the poor appearance and consistency of the mash was not Ms Paganoni’s fault. 46 The company stocked the instant mash product in its kitchen. Although the company said that it should not be used as a standalone vegetable, there was no rule to this effect. Moreover, several witnesses had concerns about the product, including Ms Peacock, who said that she had told Mr Armstrong that the product had problems and that she wanted to use a different, previously stocked product. Ms Peacock also said that the company has since switched back to using the former product.47

[61] I agree with the company that meals are a very important part of resident’s daily life and that poor meals can have a negative impact on health, wellbeing and lifestyle. Meal time is supposed to be an enjoyable social experience. Residents deserve appetising and well-presented meals. In the present matter, the evidence establishes that the mash had a poor appearance and consistency. However, there was no concern about its taste or nutritional value. And the rest of the meal was perfectly good.

[62] The legitimate focus of the company’s concern in relation to Ms Paganoni’s conduct was her failure to seek approval to deviate from the menu plan, after having been warned about this, and despite the undertaking she made in response to the allegations letter that led to the warning. This constituted misconduct and will be taken into account in considering the remedy below. However, in the circumstances, I consider Ms Paganoni’s dismissal was harsh, and therefore unfair.

Remedy

[63] The statutory framework within which the question of remedy must be determined is clear. Section 390 provides that the Commission may order a person’s reinstatement or the payment of compensation, subject to the jurisdictional conditions in s 390(1) being met. However, the Commission must not order the payment of compensation to a person unless it is satisfied that reinstatement is inappropriate and the Commission considers payment of compensation is appropriate in all the circumstance (s 390(3)). Ms Paganoni does not seek reinstatement and I am satisfied that it would be inappropriate to order her reinstated. I also consider that this is a case in which an order for compensation is appropriate.

[64] Compensation is intended to provide a person who has been unfairly dismissed with reparation for losses reasonably attributable to the unfair dismissal. The amount of compensation ordered by the Commission must not include a component for shock, distress or humiliation, or other analogous hurt, caused to the person by the dismissal (s 394(4)). In determining the amount, all the circumstances are to be taken into account, including those prescribed by s 392(2) of the Act. The ‘Sprigg’ formula is to be applied to arrive at an appropriate amount.⁴⁸ If this yields a figure that is excessive or inadequate, then the considerations in s 392(2) may be revisited.

[65] There is no evidence that a compensation order would have an adverse effect on the company’s viability (s 392(2)(a)). The length of Ms Paganoni’s service is nearly ten years (s 392(2)(b)). Ms Paganoni has taken steps to mitigate the loss suffered because of the dismissal by seeking alternative employment (s 392(2)(d)). 49

[66] Section 392(2)(c) provides that the Commission must take into account the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed.⁵⁰ Ms Paganoni contends that, had she not been dismissed, she would have continued to be employed by the company for a further ten years. I disagree. She had recently received a final warning in relation to breaching her contract by not following the menu plan. Ms Paganoni’s evidence was that she did not seek the facility manager’s approval on 30 November 2018 because he had not been helpful in the past and he was not a cook. She also said that she had given up seeking his assistance. 51 If this was her opinion, it seems to me unlikely that she would have sought Mr Armstrong’s approval for future departures from the menu plan. She said divergences were common. I consider it likely that Ms Paganoni would have departed from the menu plan without seeking Mr Armstrong’s approval in the relatively near future, which in turn would have led to her dismissal.

[67] In the present case, what prevented the dismissal from being fair was the unusual nature of the circumstances described above. There is no basis to assume that such circumstances would be present next time. In my view, it is reasonable to estimate that Ms Paganoni would have continued in her employment at the company for another six months.

[68] Based on this, I will consider the calculation of compensation following the methodology in Sprigg. First, there is the question of the estimated remuneration that Ms Paganoni would have received had she not been dismissed. The agreed gross weekly earnings of Ms Paganoni are $828.39, 52 which for the estimated six months of further employment gives a total of $21,538.14. Ms Paganoni includes a component for additional long service leave that would accrue over ten years’ further employment however my estimate of six months’ further employment would produce a further long service leave accrual of $358.97.53 This gives a sub total of $21,897.11.

[69] Next, it is necessary to deduct monies earned by Ms Paganoni since her dismissal until the anticipated end of her employment with the company. Ms Paganoni received a payment in lieu of notice, in the gross amount of $3,283.22, 54 together with an additional payment of $122.00.55 As Ms Paganoni’s submissions indicated, this should be deducted from the subtotal.

[70] Ms Paganoni also said that she was commencing a new job working one weekend shift on or about 20 May 2019, which, at the relevant award rate with weekend loading, amounted to $264.38 per week. The company did not contest Ms Paganoni’s submissions on future earnings. From 20 May until 9 July (the end of her estimated further six months of employment if she had not been dismissed on 9 January 2019) is seven weeks, equalling $1850.66. These various deductions, totalling $5255.88, give a subtotal of $16,641.23.

[71] Then there is the question of a percentage deduction for contingencies and vicissitudes of life. These principles were summarised on Roos v Winnaa Pty Ltd. 56 A deduction for contingencies applies a discount to an assessment of future economic loss so as to account for future unknown matters which might adversely affect earning capacity. Such a deduction is usually applied after the assessment of the period for which the employee would have remained employed. It applies to any future estimate of loss of earnings. I consider that a reduction for contingencies should be made and that the percentage of 15% is appropriate in this case. This figure is commonly used by the Commission in assessing compensation.57 This deduction is $2496.18, giving a subtotal of $14,145.05.

[72] I have considered the impact of taxation on the gross amount however it is not necessary for me to specify a post-tax amount.

[73] Section 392(3) of the Act states that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person, the Commission must reduce the amount it would otherwise order under s 392(1) by an appropriate amount on account of the misconduct. In the circumstances I consider that a reduction of 30% is appropriate, given the seriousness of not complying with a contractual obligation that had been the subject of a prior warning. This results in a subtotal of $9,901.54.

[74] For the reasons earlier given, I am satisfied in the circumstances that a remedy should be ordered, but that reinstatement is inappropriate. I am satisfied that compensation is appropriate in the circumstances of this case. I will order compensation in the above amount with deduction of any taxation required by law, to be paid by the company to Ms Paganoni within 28 days of the date of this decision.

[75] An order giving effect to this decision is separately issued in PR710211.

DEPUTY PRESIDENT

Appearances:

Mr S Crawford for Ms Paganoni

Ms S Camilleri for Mecwacare

Hearing details:

2019

Melbourne

8 and 9 May

Final written submissions:

Ms Paganoni: 27 May 2019

Mecwacare: 3 June 2019

Ms Paganoni in reply: 11 June 2019

Printed by authority of the Commonwealth Government Printer

<PR709474>

 1   Witness statement of Michelle Paganoni, paragraph 59

 2   Transcript of proceedings on 8 May 2019 at PN661

 3   Ibid at PN104

 4   Ibid at PN1051

 5   Exhibit L

 6   Above n 2, at PN103

 7   Witness statement of Mr Armstrong, paragraph 4

 8   Above n 2, at PN138, 186, 188 - 9, 252

 9   Above n 2, at PN202; Exhibit R1

 10   MP5

 11   Witness statement of Ms Paganoni, paragraphs 70 and 71

 12   MP7; Exhibit O

 13   Witness statement of Mr Rowley, paragraph 5, TR1

 14   Witness statement of Ms Hogan, paragraph 21; Witness statement of Mr Rowley, paragraph 7

 15   Witness statement of Mr Rowley, paragraph 7

 16   MP10

 17   Exhibit J

 18   See contract of employment clauses 2 and 10 (exhibit AB); and position description, page 2 (exhibit D)

 19   Exhibit D

 20   Transcript of proceedings, 9 May 2019, PN1113-1118

 21   Ibid at PN1107

 22   Witness statement of Ms Paganoni, paragraph 53

 23   Above n 20, at PN897, PN935

 24   Above n 20, at PN1085

 25   Witness statement of Ms Paganoni, paragraphs 41 to 45

 26   Above n 2, at PN500

 27   Above n 2, at PN435, PN450

 28   MP09

 29   Above n 2, at PN289 - 293

 30   Mr Armstrong could not recall authorising its use: above n 20, at PN743

 31   Witness statement of Ms Paganoni, paragraph 59; see also above n 2, at PN1027

 32   Witness statement of Ms Paganoni, paragraph 59

 33   Above n 2, at PN993

 34   Respondent’s final written submissions, paragraph 3(a) to (j)

 35   Statement of Ms Hope dated 12 April 2019, Exhibit R1

 36   Above n 2, at PN105

 37   Respondent’s final submissions, paragraph 3(e)(ii)

 38   Ibid, paragraph 3(e)(vi)

 39   Witness statement of Ms Paganoni, paragraph 63 - 69

 40   Above n 2, at PN 110 -113

 41   Above n 2, at PN 410 - 11, PN 511

 42   Aboven 20, at PN1396

 43   Above n 20, at PN233 - 234

44 B v Australian Postal Corporation (2013) 238 IR 1

 45   Respondent’s closing submissions, paragraph 17

 46   See for example the evidence of Mr Armstrong; above, n 20 at PN327, 738

 47   Above n 2, at PN1509 - 1518

48 See Ellawala v Australian Postal Corporation (AIRCFB, Print S5109, 17 April 2000) at [33]; and see Bowden v Ottrey Homes Cobram and District Retirement Villages Inc.[2013] FWCFB 431

 49   Exhibit A3

50 Ellawala at [59] and [60]

 51   Witness statement of Ms Paganoni, paragraph 59

 52   Above n 2, at PN1315

 53   See s 9 of the Long Service Leave Act (Vic). Note the provisions of the Fair Work Act dealing with the interaction between state long service leave legislation and enterprise agreements: s 29(2)(b); and 27(2)(g).

 54   Exhibit A2

 55   Above n 2, at PN687 - 690

 56   [2018] FWCFB 7394 at [36] and [37]

 57   See Ellawala, above