Miss Lucy Cooper v Making Dough Pty Ltd T/A Bakers Delight the Hub

[2016] FWC 6206

[2016] FWC 6206

FAIR WORK COMMISSION

DECISION

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

Miss Lucy Cooper
v
Making Dough Pty Ltd T/A Bakers Delight The Hub
(U2016/6090)

DEPUTY PRESIDENT BARTEL ADELAIDE, 1 SEPTEMBER 2016

Termination of Employment - whether dismissal harsh, unjust or unreasonable.

Introduction

[1] Ms Lucy Cooper (the applicant) was employed by Making Dough Pty Ltd T/A Bakers Delight The Hub (The Hub or the employer) from 21 August 2014. On this date, the business transmitted to the respondent from the McRugless Family Trust, where the applicant had been employed since December 2010.

[2] The applicant was engaged as a casual Sales Assistant. She was dismissed on 6 April 2016 during a phone conversation with Mr Richard Whittaker, a Director of the employer. The reason given by Mr Whittaker was a change in the applicant’s availability to undertake shifts.

[3] The applicant disputes that there was any significant change in her availability and contends that there were other reasons for her dismissal. These reasons will be canvassed shortly.

[4] Mr Whittaker operates an additional three Bakers Delight franchises and collectively employs 55 employees.

[5] The matter proceeded by way of a determinative conference. The applicant was self-represented and Mr Whittaker appeared for the respondent. Both gave evidence and Mr Whittaker called Ms Draper, the employer’s Area Manager, to give evidence. Ms Draper had responsibility for rostering employees across all franchises.

[6] The applicant is a person protected from unfair dismissal within the meaning of s.382 of the Fair Work Act 2009 (the Act). There is no dispute that she has the required minimum employment period and there are no jurisdictional barriers which prevent the Fair Work Commission (the Commission) from considering her application for an unfair dismissal remedy.

Factual Background and findings

[7] The applicant is in her early twenties and is studying a Master in Audiology. She commenced the 4^th year of this course in February 2016. She had a cordial relationship with Ms Draper and the two would have SMS exchanges about work matters and occasionally about matters outside of work. Ms Draper had supported the applicant with regular hours throughout 2015 after the applicant advised her that she was saving for a house.

[8] It is not in dispute that the applicant was a competent and diligent worker. She was allocated additional responsibilities on the shifts that she worked, including opening and closing The Hub, security of cash and assisting less experienced employees.

The applicant’s availability and roster in 2016

[9] On 21 January 2016 the applicant sent an SMS to Ms Draper advising that her university timetable involved full days on Monday to Friday each week. She requested to be rostered for weekends and 4.30 - close on Fridays once the semester commenced. Ms Draper sent an SMS in reply, as follows:

“… Will have to check Friday as legally shifts need to be min 3 hours plus, but will see what we can do there. Weekend will be no problem can do opens or one open and next day 10am start. Will look after you, don’t worry.” 1

[10] In her evidence Ms Draper denied having sent this SMS. The applicant provided a hard copy of the SMS exchange and also showed the Commission and Ms Draper the exchange on her mobile phone. Ms Draper was unable to explain how the SMS appeared under her name. I find that she did send the SMS and more generally that Ms Draper was not a reliable witness. At times her evidence was evasive and non-responsive, plainly wrong or without foundation. 2 Where there is a conflict in the evidence of Ms Draper and the other witnesses, the other witnesses’ evidence is preferred, unless otherwise stated.

[11] The applicant commenced Orientation Week at university in the last week of February 2016, at which time she was advised that Wednesdays and Thursdays of each week would be half day placements, not full days as previously advised. The placements varied from mornings to afternoons. The applicant advised Ms Draper of this development. More generally the applicant and other staff recorded their availability/unavailability from week to week in a book provided by the employer at The Hub for roster purposes.

[12] After this discussion with Ms Draper in February 2016 the applicant worked on a Wednesday and/or a Thursday in the roster periods ending 2, 9, 16, 23 and 30 March 2016. She also worked every Saturday in these roster periods and on 2 April 2016. She worked on a Sunday in the roster periods ending 2 and 23 March and 6 April 2016. 3

[13] Mr Whittaker stated that the applicant’s availability during the week was the reason she was engaged, although he did not dispute the applicant’s statement that this was never discussed with her. 4 In addition, the employer’s offer of employment to the applicant in 2014 did not refer to any hours of work or expectations of availability.5 It is not disputed that the applicant’s availability in 2016 was more restricted than in 2015. The 2015 rosters indicate that the applicant worked most frequently on a Thursday (33 shifts) and for similar frequency on Tuesdays, Wednesdays and Saturdays (28, 29 and 29 shifts, respectively).6

The March 2016 incidents

[14] Two separate incidents occurred in the applicant’s employment during March 2016. The applicant asserts that these were significant factors in the respondent’s decision to dismiss, an assertion that is denied by the employer. The first incident concerns a query to Mr Whittaker 7 concerning her rates of pay. At the time the applicant was receiving $20.99 per hour, but two younger employees at another of the franchises held by Mr Whittaker (Sefton) were receiving $23.73 per hour.

[15] The applicant stated that she forwarded the SMS she had sent to Mr Whittaker to Ms Draper, as it was she who had alerted the applicant to the difference in pay rates. She then received a call from Ms Draper who, according to the applicant, “… proceeded to call me a fucking idiot for asking if the pay rates were correct straight to Richard and that I should have left it to her to sort out”. The applicant stated that Ms Draper also asked her to lie to Mr Whittaker and his partner if they asked how she knew about the discrepancies in the pay rates, and to tell them that she overheard Ms Draper in conversation with a fellow employee. 8

[16] Ms Draper denies making these comments to the applicant. She stated that she received calls from the workers at Sefton who were upset because the applicant had contacted them in regard to their pay rates. Ms Draper stated that she was “very angry” with the applicant for not raising it with her and that she had previously advised the applicant that she was on a different enterprise agreement. 9

[17] Based on my general view of the respective credibility of the applicant and Ms Draper, I am inclined to believe the applicant’s version of events. The applicant was forthright and credible in her evidence and clear and consistent in relation to the timing and sequence of events. She had a good working relationship with Ms Draper up to this point and in this context it is improbable that Ms Draper would be “very angry” because the applicant queried the pay rates of the two employees at Sefton. I find it more likely that Ms Draper was angry with the applicant for pursuing the pay rates issue with Mr Whittaker because Ms Draper was concerned that the information on pay rates could be traced backed to her.

[18] I do not believe that this matter was an issue taken into account by Mr Whittaker in the decision to dismiss the applicant, but I do not discount that the incident resulted in a change in attitude toward the applicant by Ms Draper, which in turn influenced her representations to Mr Whittaker.

[19] The second incident occurred on 18 March 2016. On that day the applicant had served a friend and, at a meeting with Ms Draper on 23 March 2016, Ms Draper said it appeared that the applicant had given her friend an item at no charge. The applicant was told that, if proven, this was tantamount to theft, although Ms Draper said that at this stage she was only investigating the matter and had reached no conclusions. The applicant said she was shocked by the conversation and subsequently forwarded her friend’s credit card statement which showed that the item had been purchased. 10

[20] I am satisfied that the proximity of this incident to the applicant’s dismissal was coincidental. Mr Whittaker stated that the issue was resolved to his satisfaction; the applicant had done nothing wrong; and that this matter did not form any part of his decision to dismiss her. I am reinforced in this view by an SMS sent by Ms Draper to the applicant, in which she thanked the applicant for putting her mind at ease and for her honesty. 11

The dismissal

[21] On 6 April 2016 the applicant did not receive a roster and found out from a co-worker that she was not rostered for any shifts. She made some inquiries with Ms Draper that morning and received no response, but received a phone call from Mr Whittaker at 4.00pm. The applicant stated that Mr Whittaker told her that “your availability has dropped, we have younger girls available instead of you, thank you for the long time you worked there.” 12

[22] Mr Whittaker stated that he couldn’t recall the exact words he had used in the phone conversation but that he “… would have said that we have other girls available who are available on the weekends.” 13 Ms Draper had advised Mr Whittaker of difficulties in rostering the applicant and that providing shifts to the applicant created difficulties in offering shifts to other staff. Mr Whittaker stated that “… at that stage we made the decision that we were no longer available to be able to provide Lucy with ongoing employment.”14 Ms Draper was evasive when asked about discussions with Mr Whittaker in the lead up to the applicant’s dismissal.15

[23] It is significant that the roster following the applicant’s dismissal includes three employees, ‘M’, ‘S’ and ‘A’, none of whom had previously appeared on the roster in 2016. Neither ‘M’ nor ‘S’ appeared on the rosters for The Hub in 2015 but may have been engaged at another franchise held by the employer. ‘A’ appeared on the roster for The Hub on only one prior occasion, in October 2015.

[24] The applicant stated that these three employees were younger than her. In cross-examination Mr Whittaker said he believed that the three employees were high school students and “possibly” cheaper to engage than the applicant. 16

[25] Mr Whittaker and Ms Draper maintained that the applicant’s reduced availability due to her university commitments was the reason for her dismissal. While the applicant remained available for work on both these days, Ms Draper stated that it was difficult to juggle the applicant’s alternating availability on mornings and afternoons. I accept that this may have added complexity to the development of the roster, but also note that that the applicant advised her availability in advance as required by the employer, either through the book at The Hub or through representations to Ms Draper.

[26] The employer did not consider rostering the applicant for only weekend shifts. 17 In this regard, both Mr Whittaker and Ms Draper referred to the engagement of other employees on the basis of their availability to work weekends and that these employees would be deprived of shifts if the applicant was rostered on weekends. This is difficult to understand given that the employer was aware that the applicant had a longstanding and continuing availability to work weekends and regularly worked on Saturdays up to the time of her dismissal. It also fails to address the sudden appearance of three ‘new’ employees in the week after the applicant’s dismissal or the assurances Ms Draper gave the applicant in January 2016 when she offered the applicant work on Saturdays and Sundays.

[27] I find that the decision to dismiss the applicant was motivated by two factors. Firstly, it was a cost cutting measure because younger employees were cheaper to employ. Mr Whittaker stated that he took a business decision to hire people who are cheaper to work on weekends. In response to a question on how staff are selected to work when more are available than required, Mr Whittaker stated that there was a financial component of the decision and it was Ms Draper’s responsibility to ensure that wage costs were within budget. 18 Of most weight in my finding is the statement made to the applicant by Mr Whittaker at the time of dismissal.

[28] Secondly, the applicant’s availability from March 2016 was more limited than it had been in 2015 and that this was also a factor taken into account by Mr Whittaker based on the representations from Ms Draper about problems she was having in rostering the applicant. This represented a departure from Ms Draper’s previous approach, which was to accommodate the applicant because of the high regard in which she was held.

Consideration

[29] Section 387 of the Act sets out the matters that the Commission is required to take into account in considering whether a dismissal is harsh, unjust or unreasonable:

“387 Criteria for considering harshness etc.

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

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

[30] For a reason to be valid it must relate to the capacity or conduct of the person, including the effect of the person’s capacity or conduct on the safety and welfare of other employees. Capacity relates to the employee’s ability to do the work they were employed to undertake.

[31] Whether there was a valid reason to dismiss is a matter not only to be considered but to be accorded some significance in determining if the dismissal is harsh, unjust or unreasonable. 19 The Commission is required to conduct an objective analysis of all relevant facts in determining whether there was a valid or sound or defensible reason to dismiss.20

[32] It is not in dispute that the applicant undertook her work diligently and competently, nor is it suggested that the applicant’s conduct was other than satisfactory. However “capacity” also extends to matters such as the availability of the employee to undertake the work required by the employer. The concept of “capacity” in this context has been considered in several cases, generally where the employee is no longer able to fulfil the inherent requirements of their position. In J Boag and Son Brewing Pty Ltd, for example, the Full Bench stated that:

“An inability to perform the inherent requirements of a position will generally provide a valid reason for dismissal. But this will not invariably be so. For example, the dismissal may be prohibited by State workers compensation legislation or otherwise unlawful. ….”  21

[33] In determining whether the applicant’s availability to undertake work on Wednesdays and Thursdays is relevant to her capacity, there are several relevant considerations. Firstly, the evidence indicates that she remained available on these days, albeit with restricted hours in 2016. Secondly, availability on these days was not a condition of her employment stipulated in the letter of offer and was not raised with her at any subsequent time. Thirdly, the applicant was paid as a casual employee and was required to indicate her availability/unavailability to the employer on a weekly basis, which she did.

[34] I conclude that the applicant’s restricted availability on Wednesdays and Thursdays was not a valid reason for dismissal.

Was the applicant notified of that reason? s.387(b)

[35] The notification to the applicant must relate to the valid reason for dismissal. Where there is no valid reason, this criterion has no application.  22

Was the applicant given an opportunity to respond? s.387(c)

[36] Where there is no valid reason, this criterion has no application. 23

Was there an unreasonable refusal to allow the applicant have a support person present? s.387(d)

[37] As there was no prior discussion with the applicant this criterion has no application.

Dismissal relating to unsatisfactory performance – s.387(e)

[38] This criterion has no application in this case.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal – s.387(f);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 – s.387(g)

[39] The employer operates four franchises with a total of 55 employees at the relevant time. This is not a small business but there is an absence of human resource (HR) specialist or expertise within it. However HR advice is available within the office of the franchisor. Mr Whittaker was aware of this and sought advice in relation to the notice of termination he was required to give the applicant, but sought no advice in relation to the decision to dismiss. This was a choice that he made, no doubt under the common misconception that he could dispense with a casual employee without regard to the principle of procedural fairness. In the circumstances I attribute only limited weight to the criteria in ss.387(f) and (g) of the Act.

Any other relevant matters – s.387(h)

[40] I have taken into account that the applicant was a casual employee with no right to be rostered on particular shifts or to be allocated certain shifts on a consistent basis. However this needs to be balanced against the pattern of work and undertakings made to the applicant about the allocation of shifts. I have also taken into account that the applicant was a good employee, with 5.5 years of continuous service; that the employer has failed to satisfy the Commission that there was a genuine operational requirement which necessitated the dismissal of the applicant; and that she was denied procedural fairness.

[41] I determine that the dismissal of the applicant was harsh, unjust or unreasonable.

Remedy

[42] The applicant does not seek reinstatement, but seeks compensation equivalent to 20 weeks work at $419.00 per week, this being her calculation of the average weekly wage during 2016.

[43] The Act places primacy on the reinstatement of an employee who has been unfairly dismissed. In view of the nature of her employment and the inability of any order for reinstatement to guarantee the applicant of any level of earnings I am satisfied that in the circumstances of this matter an order for reinstatement is not appropriate and that there should be an award of compensation.

[44] If the Commission is satisfied that reinstatement is inappropriate and that an award of compensation is appropriate in all the circumstances of the case,   s.392 of the Act sets out the matters to be taken into account in determining the amount of compensation:

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

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

Misconduct reduces amount

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

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[45] Since dismissal the applicant has received some limited income from new employment. She worked for the Australian Electoral Commission (AEC) on 2 July 2016 for which she received $396.00. 24 She also obtained work for 2 hours per week, ongoing, at a real estate company in July 2016, earning $30.00 per hour. The applicant applied for work at Coles in June 2016, but as at the date of determinative conference had received no offer of work.

[46] The applicant also commenced receiving a youth allowance from Centrelink at the end of March 2016. Amounts received on this basis do not fall within “remuneration earned from employment or other work” for the purposes of s.392(2)(e) of the Act and have therefore not been taken into account.

[47] Mr Whittaker made no submissions as to the effect of an order of compensation on the viability of his business. I accept his submission that the length of service to be taken into account is the service with the employer, rather than the period of accumulated continuous service through the transmission of business in 2014. The period of service is not so lengthy or so short that it should impact on the compensation otherwise awarded.

[48] Absent the dismissal, I consider that the applicant would have continued to remain on the roster for at least 20 weeks, up to 24 August 2016, there being no issues with her conduct or performance. The applicant’s earnings are harder to estimate, but I consider that the average income since her 2016 course commenced in early March 2016 gives a reasonable indication of the likely earnings. This equates to an average of $349.84 per week in the period 3 March to 6 April 2016. I have also included a deduction for contingencies on the basis that the respondent may have reduced the applicant’s shifts on Wednesdays and/or Thursdays.

[49] In relation to s.392(2)(d), I am satisfied that the applicant has taken steps to mitigate her loss, although there is limited evidence in relation to steps taken in April and May 2016. A small deduction will be made for this reason. As the order will be made within the period of the estimated duration of employment, section 392(2)(f) has no application.

[50] There are no other matters that I consider are relevant to the compensation. There is no discount for any misconduct on the part of the applicant under s.392(3) of the Act and the sum awarded is within the compensation cap. 25

[51] In my view an amount of $5191.28 is a fair amount of compensation for the applicant in the circumstances of this case, calculated as follows:

• weeks at $349.84 = $6,996.80 (gross)



• Less contingencies at 12% = $839.62



• Less 3% for limited efforts to mitigate loss =$209.90



• Less earnings $396.00 + 6 x $60per week = $756.00



• total = $5191.28 (gross)

[52] An order for the above amount is issued with this decision. A period of 28 days is allowed for the employer to make payment.

DEPUTY PRESIDENT

Appearances:

Miss L Cooper in person

Mr R Whittaker with Ms N Salem for the Respondent

Hearing details:

2016:

Adelaide;

4 August.

 1   Ex A5.

 2   For example at PN597, 606; 581-586.

 3   Ex A6.

 4   At PN475-477.

 5   Ex A2.

 6   No rosters were provided for the weeks ending 29 July and 19 August 2015.

 7   Ex A3: SMS 2 March 2016 .

 8   At PN152.

 9   At PN557-569.

 10   At PN155-160.

 11   Ex A3.

 12   Applicant’s Summary of Evidence.

 13   At PN481.

 14   At PN435.

 15   At PN647-662.

 16   At PN317-322.

 17   At PN436-437.

 18   At PN340; 421-425.

 19   Edwards v Guidice [1999] FCA 1836 at [5] per Moore J.

 20   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371; Rode v Burwood Mitsubishi (AIRCFB, Ross VP, Polites SDP, Foggo C, 11 May 1999) Print R4471.

 21   J Boag and Son Brewing Pty Ltdv Button (2010) 195 IR 292 at 299.

 22   Chubb Security Australia Pty Ltd v Thomas (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 at [41].

 23   As above.

 24   At PN215.

 25   Currently $68,350.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR584881>