[2018] FWC 3780

FAIR WORK COMMISSION

DECISION

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

Miss Marianella Leon
v
Bernini Stone & Tiles Pty Ltd T/A Bernini Stone & Tiles Pty Ltd
(U2018/1836)

DEPUTY PRESIDENT BEAUMONT

PERTH, 27 JUNE 2018

Application for an unfair dismissal remedy – no valid reason – no support person – proportionality – no notice given – visa – reinstatement not appropriate.

[1] Miss Marianella Leon (Miss Leon) was dismissed from her employment with Bernini Stone & Tiles Pty Ltd T/A Bernini Stone & Tiles Pty Ltd (Bernini) on 8 February 2018. Miss Leon subsequently lodged an application for an unfair dismissal remedy on 22 February 2018 (Application).

[2] Miss Leon arrived in Australia in January 2011 from Venezuela and undertook studies in English and an Advanced Diploma of Graphic Design 1. In December 2015 she commenced work at Bernini in the position of Interior Design/Consultant2 and became a full-time employee on 14 January 20163 having obtained a bridging visa that enabled her to work in the country, and sponsorship from Bernini regarding her visa.

[3] During the course of July 2017, Miss Leon raised issues concerning the conduct of two work colleagues with Mr Noel McGeough, Director (Mr McGeough). In September of that same year she took personal leave due to work related stress arising from what Miss Leon says was the conduct of the same two work colleagues. In mid-October, Mr McGeough raised with Miss Leon concerns regarding her performance with specific reference to Miss Leon’s general attitude, body language and behaviour, and interactions with colleagues.

[4] According to Mr McGeough there was no improvement in Miss Leon’s general attitude and interaction with colleagues and so, when she requested a pay rise in late December 2017, he was somewhat taken by surprise. However, Miss Leon’s request for a pay rise was accompanied by a request for her contract of employment to reflect her actual terms and conditions, in addition to documentation referred to in her original contract. To appease Miss Leon with a view to fostering positive engagement in 2018, Mr McGeough approved a pay rise and provided an updated contract. Miss Leon was dissatisfied and discussed the revised employment conditions because she considered they did not constitute a complete contract and that she had not received the attachments that had been referred to in the original contract.

[5] After considering the evidence before me I have concluded that Mr McGeough had simply reached the end point of his patience with Miss Leon and that was the reason for her dismissal. That end point had been reached due to the culmination of what Mr McGeough perceived to be Miss Leon’s negativity within the workplace, a lack of gratitude concerning a pay increase, her persistence to obtain that same pay increase and a new contract, and other documentation that had been referred to in her first employment contract.

[6] I am not satisfied that Miss Leon had not been adequately performance managed with regard to her communication style and interaction with colleagues and clients, her engagement within the workplace and her professionalism. Mr McGeough’s performance management meeting with Miss Leon on 20 October 2017 was a good starting point, but he simply did not follow it through.

[7] I have considered that Bernini is a relatively small business and it lacked internal human resource expertise. Undoubtedly, this impacted on the process followed. Nevertheless having taken into account each of the matters specified in s 387 of the Act, I am not satisfied that Bernini had a valid reason for Miss Leon’s dismissal and have concluded that her dismissal was unjust, unreasonable, and harsh.

[8] While the Act underscores the primacy of reinstatement as a remedy for unfair dismissal in light of the evidence before me I could not say that reinstatement was appropriate in the circumstances. I have found however that an order for compensation is appropriate and determined that amount as $3052.98 to be taxed according to law.

Background

[9] Bernini is a relatively small business and at the time of Miss Leon’s dismissal it had 36 employees.

[10] On commencing employment with Bernini, Miss Leon discussed with Mr McGeough her sponsorship for permanent residency 4. It was not contested that Bernini agreed to sponsor Miss Leon for her permanent residency and suggested a Migration Agent that she could use5.

[11] If granted a permanent residency visa by the Department of Immigration and Border Protection, Miss Leon would have had a further period of employment with Bernini for two years 6. At the time of her dismissal Miss Leon was receiving an annual salary of $62,000 per annum.

[12] In December 2016, Miss Leon had a performance review that was uneventful. Mr McGeough is said to have informed her that another performance review would be held in December 2017, she would not receive a pay increase for 2017 due to the costs associated with covering her visa, and in December 2017 a pay rise could be discussed 7.

[13] Notwithstanding an uneventful performance review, Mr McGeough said that come late 2016 to early 2017 Miss Leon had become sullen and unfriendly with her dealings with the Bernini team 8. The team essentially consisted of Estimators, Secretarial staff, four Sales Consultants and the Marketing Director9.

[14] To improve the work dynamic Mr McGeough initiated fortnightly team meetings to foster open dialogue amongst the team in January 2017. But, Mr McGeough held the view that Miss Leon barely participated in these meetings 10.

[15] In or around March or April 2017, Miss Leon became increasingly frustrated with the behaviour of two work colleagues, Ms Ashley Purple (Ms Purple) and Mr Darryl Archer (Mr Archer) 11. Miss Leon considered that they were particularly rude using both crass and foul language, regularly made disparaging comments about other staff and would generally ignore her unless requiring her help12.

[16] Further effort was made to encourage Miss Leon to participate as a team member by the introduction of ‘hot seating’ in May 2017 13. The intent of the initiative was to encourage Miss Leon to have some time away from the front of house office and interact more with other staff14. Mr McGeough’s observation was that the initiative was ineffective15.

[17] Mr McGeough observed that Miss Leon continued to be withdrawn and she had mentioned to him that she was stressed by her visa and work situation. With that in mind, when Miss Leon requested a change to her rostered hours for one week so that she could attend a yoga class, Mr McGeough gave his consent 16.

[18] However, Miss Leon’s attendance at a yoga class on a particular day did not eventuate due to there being only one Sales Consultant on the floor at Bernini (Yoga Day). Mr McGeough expressed the view that Miss Leon’s inability to attend the yoga class on that day was the catalyst for a marked deterioration in Miss Leon’s enthusiasm to be in the workplace. According to Mr McGeough, Miss Leon looked both unhappy and miserable 17.

[19] Apparently, on the Yoga Day, Ms Purple and Mr Archer were attending other matters. Miss Leon expressed her dismay in a text message to Mr McGeough on 26 July 2017 regarding the lack of support from others to enable her to attend yoga 18. Mr McGeough said that it was apparent to him that the tone of the text message was inappropriate and disproportionate to missing a yoga class19. Further, he held the view that it had not been necessary for Miss Leon to stay in the office due to only one Sales Consultant being present20. Mr McGeough’s evidence was that the sales room functioned with one Sales Consultant, particularly on a Saturday21.

[20] Miss Leon wrote to Mr McGeough on 26 July 2017 expressing her frustrations with Mr Archer and Ms Purple and in effect everything to do with Bernini in what could perhaps be best described in parts as inner monologue 22. The email dated 26 July 2017, resulted in a meeting with Mr McGeough. According to Miss Leon, Mr McGeough acknowledged her complaint and asked her to remain with Bernini so she could assist to combat such ‘attitude and behaviour’23, referring to that of her colleagues.

[21] On 31 July 2017, Mr McGeough emailed Miss Leon with a view to providing ‘words of encouragement’ and positive feedback, in addition to providing clear direction on how she can improve her feelings about the workplace 24:

You have established your self [sic] as a competent sales consultant at Bernini largely due to skills and expertise, but most importantly, positive qualities which you have consistently applied.

In particular we high light [sic] the following:

1. Open disposition to clients and colleagues, resulting in good listening skills and efficiency of communication.
2. Well measured responses to all demands made of you that suggest an intelligent understanding of “the measure to meet the need of the moment”.
3. Persistent effort and good work ethic facilitating productivity and a positive atmosphere both for clients and colleagues.
4. Willingness to support the team with attention to tasks such as the recent ‘Berniniscape’ project.

With regard to discomfort experienced with the lack of team input by others and/or negativity please note we ask you assist in combating that attitude or behaviour by continuing to apply the same qualities referred to above with these issues… 25

[22] Mr McGeough thereafter arranged a meeting between Miss Leon and Mr Archer, and another with Miss Leon and Ms Purple 26; both meetings were unsuccessful according to Mr McGeough because Miss Leon continued to complain about both27.

[23] In September 2017, Miss Leon took personal leave due to work related stress 28. Miss Leon’s period of leave was initially for a period of 4 September 2017 until 11 September 201729. However, on 6 September 2017, Miss Leon met with Mr McGeough at his request and informed him that she was on stress leave because of the behaviour of Ms Purple and Mr Archer30.

[24] The following day Mr McGeough sent an email to the Sales Team and Directors informing them that Miss Leon’s absence was due to workplace stress 31. The email distressed Miss Leon who had considered that she had imparted her stress leave to Mr McGeough in confidence32. Miss Leon informed Mr McGeough of her distress and subsequently extended her personal leave until 15 September 201733.

[25] On 10 September 2017, Mr McGeough sent an email to Miss Leon asking if she would like for him to negotiate with a Manager at another branch to create an alternative position for her away from the Subiaco office 34. Mr McGeough said that he took this step because Miss Leon had previously requested this and he was doing everything that he could to improve the workplace dynamics35. A move to another office of Bernini did not eventuate.

[26] On 15 September 2017, Mr McGeough received a formal complaint from Miss Leon concerning his email to staff that she was on stress leave 36. Mr McGeough apologised to Miss Leon by email and explained that he had her best intentions in mind and was looking forward to welcoming her back to work37.

[27] Miss Leon returned to work but there was, according to Mr McGeough, no shift or improvement in her behaviour, attitude or interactions with other staff 38.

[28] As a consequence, Mr McGeough said a performance management meeting was held on 20 October 2017, following what was referred to as a ‘prospects meeting’. A ‘prospects meeting’ involved discussion by Miss Leon of her projects and clients 39.

[29] Mr McGeough said that in the performance management meeting he spoke with Miss Leon about her obvious discontent, sullenness, rude demeanour and how that behaviour negatively impacted on colleagues 40. Later in the morning of 20 October 2017, Mr McGeough sent an email in which he summarised the earlier meeting and the areas in which Miss Leon needed to improve41.

[30] Miss Leon’s characterisation of the meeting differed to that of Mr McGeough and she recalls that he praised her regarding her high standard of work, impeccable working manners and that she was a model employee 42. Miss Leon said that Mr McGeough vaguely hedged around her participation in an off-site client event alluding that she was hesitant to talk to clients43. Miss Leon expressed that that she was taken back by Mr McGeough’s email on 20 October 2017, because much of what was traversed in the email had not been discussed in the meeting44. Miss Leon responded to Mr McGeough’s email in which she asked for specific examples where her work performance had not met the office standard of basic social skills45.

[31] Miss Leon thereafter sent an email on 23 October 2017 to the whole Sales Team and Directors of Bernini:

Dear colleagues

I hope you’re doing very well.

It was brought to my attention that my behaviour may have unintentionally impacted the office morale. I apologise for that. Please rest assure that I treat all Bernini’s employees, directors and clients in a respectful, professional, polite and equitable manner…. 46

[32] Despite her email dated 23 October 2017 to the Sales Team, Mr McGeough observed that the situation did not improve and Miss Leon took an ‘isolationist approach to the workplace’ 47. Mr McGeough expressed that the experience was deflating and he felt that he had spent an excessive amount of time dealing with issues concerning Miss Leon’s work performance.

[33] Mr McGeough said that on 20 December 2017, Miss Leon presented him with a two year review paper in an attempt to negotiate a salary increase 48. Mr McGeough said that given the experience during 2017 he explained that it was difficult to justify awarding an increase but that he would consider the request49. Miss Leon said that she made a submission for a pay increase and a new contract to reflect her actual working hours and to formally include her responsibilities and duties as they had never been provided in the initial contract50.

[34] Miss Leon gave evidence that on 21 December 2017, Mr McGeough asked her to Mr Archer’s old office and told her that her salary would be increased to $58,000 51. Miss Leon informed Mr McGeough that they could discuss it further next year as he had not addressed the issue of her work contract52. Mr McGeough’s recollection of the meeting was such that he offered Miss Leon an additional $4000 per annum and noted to her that the pay rise was not performance based, but was designed to be an incentive to make her happier at work. As a consequence Mr McGeough continued that she would need to commit to being kinder, more tolerant, inclusive and positive. Mr McGeough said that Miss Leon responded with a look of absolute dismay and said words to the effect ‘is that all you have to offer’53.

[35] Mr McGeough considered that it would be unacceptable for the health of the business to have Miss Leon return to work after the Christmas break disgruntled, so he sent a message informing her that he would be prepared to revisit the pay rise request 54.

[36] On 10 January 2018, Mr McGeough sent a letter to Miss Leon titled ‘Revised Employment Conditions’, which included a pay increase of $8,000 55. Miss Leon was said to have said that she would continue working under the terms of the revised contract but would not sign it56. Mr McGeough considered this to be an unnecessary act of defiance on behalf of Miss Leon57.

[37] On 23 January 2018, Mr McGeough sent a further email to Miss Leon attaching a revised contract and explained that she would need to target her own clients, he would support her and she needed to make the most of showroom and website leads 58. On 29 January 2018, Miss Leon sent an email in response seeking clarification on several points in the revised contract as she considered that the document was vague and did not address other matters which they had spoken of in December 201759.

[38] Mr McGeough responded to Miss Leon’s email indicating he would schedule a meeting for the following week, and the following day he sent a further email to Miss Leon that he would schedule a prospects meeting for the next Wednesday 60.

[39] On 1 February 2018, Miss Leon went to Mr McGeough’s office to discuss the revised employment conditions because she considered it was not a complete contract and that she had not received the attachments that had been referred to in the original contract 61. Miss Leon said that Mr McGeough became aggressive and informed her that he did not care if she signed the contract or not, that her duties and responsibilities were made clear and he did not see the need for all this. Miss Leon said that Mr McGeough said ‘take the day off … and go and think under a tree or wherever, he didn’t care’62.

[40] Mr McGeough’s evidence of the meeting on 1 February 2018, was captured in cross examination:

And the applicant said to you she wasn't able to sign the revised employment conditions, because it was not a complete contract and that she still had not received any of the attachments referred to in the original contract?---Yes. Perhaps I - well, original contract - I assume she was referring to the original contract from 2015 on the day. So I do have clear recollections of this meeting. I was expecting it. I was expecting Marianella so I asked you to sit down and I closed the door so that there was some privacy. On arrival in the office, Marianella kind of threw the contract on the table and without actually making any kind of direct eye contact with me said, "I'm happy to continue working under this arrangement, but I'm not signing the contract." And at that point I asked her to sit down and close the door, and I explained to her that basically the - from my point of view that the arrangement - that I didn't have contracts of the - with other staff members, that we basically had a general understanding that there was a salary, a position and working hours and that essentially that covered the arrangements between us.

...

I said, "As far as our working arrangement is concerned, one may as well throw it in the bin, because it is not really going to make any impact on what we do - on what our arrangement is. There is a salary. There is some working hours and there is a job description," and basically that was it.

…

quite clearly - I said, "Marianella, I want to get on with doing the job and you have issues that you needed to confront, and if you don't confront them here in Bernini you will confront them in another company. If you don't confront them here in Australia you will confront them in Timbuktu or some other country." I can't remember whether I said Timbuktu or some other country, but that was the thinking that was in my mind. And, "You need to make a decision as to whether you want to take this on or not."

…

I said, "If you need time to think about this and decide what you would like to do, please go and sit under a tree or go somewhere else that you - that suits you and give it the thought that you need. Take the day off and then come back and tell me what your decision is." And that bit was completely left out of Marianella's meeting yesterday. That was a very important part of my agenda, because I had reached the point where - as I actually said verbally to Marianella a few times, I was at the end of my tether. We are a busy working environment and there was a limited amount of time to just keep rehashing these.

…

I had had enough and I decided that basically I needed to tell Marianella fairly and squarely, and she got told at that meeting.

…

The way I was speaking was pretty much the same way I am speaking right now. "Confront your issues." 63

…

So basically you'd had a gutful?---Yes 64.

[41] The ‘prospects meeting’ was rescheduled to Thursday, 8 February 2018. Miss Leon’s evidence was that the meeting started with her presenting her usual progress report and providing updates 65. Following the discussion on various prospects, Mr McGeough informed Miss Leon that he had observed that her interaction with clients was not up to ‘office standards’ and this had been noticed by the other two Directors66. Miss Leon said that Mr McGeough asked if she was surprised by the observation and she responded that she was, and provided examples outlining her ‘very good and prosperous relationship with different Bernini clients’67.

[42] When questioned on why Mr McGeough had decided to dismiss Miss Leon absent any notice, he gave the following evidence in cross examination:

So to the best of your recollection, what were the words that you said to her, when you told her she was being dismissed?---I made - I came out with a sentence and a statement that was referring specifically to body language, demeanour, physical presence, attitude, which had been the core of the issues that had been discussed with her over the previous months, which went back into the previous year.

Mr McGeough, do you know what a summary dismissal is?---To be honest, I have to say I've actually conceded some lack of experience in HR and issues such as this. I've never been in this situation before, I made that statement already. I don't know the technical definition of the term, correct.

I'm just asking, do you know the meaning of summary dismissal?---I've gathered that it's just a blunt dismissal, or something like this, without any appropriate justification or without any warnings or something along those lines. From the context, I've gathered that this is the meaning of the term.

Thank you for those words. So you acknowledge that this was a summary dismissal?---No, because I felt that I'd actually given multiple warnings.

Within the meaning and the definition of the terms, this is a summary dismissal?---I respect that that's your view. My view is that on 20 October I'd made it very clear that the situation was untenable. In my email of Monday the 23rd, I made it clear that the situation was untenable. In the meeting of, I believe, about 1 February, I'd actually said, "Take a day off, go and think about it, decide whether you want to do this or not."

In the meaning and the definition of the terms, this was a summary dismissal. So you gave the applicant - in the way that you set the meeting up, and so on, you agree you did not advise the applicant, beforehand, what the true nature of the meeting was about. Do you agree with that?---Correct, that there was prospects, but I had the agenda of dealing with this other matter.

So you knew you were going to dismiss her?---Yes.

So you didn't give her the true nature of the meeting. You didn't ask her, at the time, "Do you want a support person here to assist in the discussion with the termination?" I mean it's a very serious - very, very serious issue. You didn't ask her, at all, if she wanted a support person or offer that opportunity to her?---Naively my understanding of that particular procedure, up until this occasion, was that if, in a discussion with an employee, there was apparent discomfort and the person seemed to be unhappy with proceeding with the discussion, or whatever, that you could or should consider offering the option of calling in a support person, or asking if they want to postpone the situation. I understood, at the time, that Marianella was actually handling the discussion quite well and I didn't see it as being necessary. I've understood, through the processes of these last couple of days, that I should have actually made it clear to her that if she wanted a support person for this discussion that she should be given the opportunity to arrange the same.

So the meeting was - I'll take those points. So she wasn't advised of the true nature of the meeting, she wasn't offered a support person. She wasn't really given an opportunity to respond to being told that she'd been dismissed? She wasn't given any real opportunity. She gave a couple of examples to what you had discussed about being with the clients and so on like that, and then immediately after that, whatever the words were, you told her that she was being dismissed?---Correct, yes.

That's correct?---Yes 68.

[43] Miss Leon said that on 14 February 2018 she received her payslip and observed that she had been only paid until 8 February 2018. It was submitted by Bernini that Miss Leon was paid her notice period on 27 April 2018 69.

[44] Miss Leon gave evidence that she had been actively looking for other work in both Australia and New Zealand since her dismissal 70, but the majority of prospective employers asked if she required sponsorship and the reason for leaving her most recent employment. Despite this Miss Leon had secured some casual work averaging 15 to 25 hours per week on an hourly rate of $23.5071 from Monday to Friday and $27.50 on the weekend72. Miss Leon had worked for the period from 26 February until the date of hearing73.

[45] Concerning the financial viability of Bernini, Mr McGeough provided evidence that with regard to Miss Leon having bought in $1.375 million dollars’ worth of sales over the last two years, Mr McGeough said that he could have done without it 74, noting that the $1.375 million may not have been that profitable.

Submissions of Miss Leon

[46] The short point advanced by Miss Leon was that her questioning about the revised employment conditions, and requests for contractual documentation that was not haphazard, abbreviated and in an unclear format with anomalies addressed, was the reason she was dismissed. It was her contention that Bernini was aware of the possible financial liability it would face with other employees within the company if they also sought to have similar anomalies rectified. Miss Leon considered that this was the real reason for her dismissal and Bernini did it expeditiously.

Submissions of Bernini

[47] Bernini advanced that it had a valid reason for Miss Leon’s dismissal based on her failure or refusal:

(a) to respond appropriately to Bernini’s persistent and ongoing steps to performance manage her;

(b) to work in a collegiate manner with the remainder of the sales team;

(d) to acknowledge any potential wrong doing within any standard workplace dispute.

[48] Further it said that Miss Leon had been afforded procedural fairness. This was because it had placed her on notice that her behaviour and attitude toward staff and clients needed to improve, had shown her encouragement, explained to her that her persistent negativity was inconsistent with the public relations part of her role and provided 12 months of continuous support despite there being no improvement.

Agreed Matters

[49] It is not in contest and I am satisfied on the evidence that:

1) Miss Leon is a person protected from unfair dismissal because, at the time of her dismissal, she had completed a period of employment with Bernini of at least the minimum employment period and her income was less than the high income threshold 75;

2) Miss Leon was dismissed by Bernini 76;

3) Bernini was not a ‘small business employer’ as defined in s 23 of the Act, so the Small Business Fair Dismissal Code was inapplicable 77;

4) Miss Leon’s dismissal was not a case of genuine redundancy 78; and

5) the Application was made within the period required 79.

Matters in dispute

[50] The reason for Miss Leon’s dismissal is evidently in dispute. Miss Leon considers she was dismissed because she had questioned her revised employment conditions and contractual documentation. In contrast, Bernini says that it dismissed Miss Leon because from the Yoga Day her negativity in the workplace was impacting on the team, clients and generally the public relations of the business. Bernini further asserted that Miss Leon was afforded procedural fairness but, it was clear at hearing that Miss Leon considered this not to be the case.

Valid reason for the dismissal – ss 387(a)

[51] To determine if a dismissal is unfair the Commission must take into account whether there was a valid reason for dismissal relating to the employee’s capacity or conduct 80. It is not the Commission’s function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the Commission. It is for the Commission to assess whether the employer had a valid reason connected with the employee’s capacity or conduct81.

[52] The reasons considered are the employer’s ‘reason(s)’ 82. The Full Bench in B, C, and D v Australia Postal Corporation T/as Australia Post83 (Australian Postal Corporation) stated:

[34]... In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1).

[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee”.

[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal 84.

[53] Therefore, the question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the matter before it. As referred to in Australian Postal Corporation, the test is not whether the employer believed, on reasonable grounds after sufficient enquiry the employee was guilty of the conduct which resulted in termination 85.

[54] The valid reason need not be the reason given to the employee at the time of the dismissal 86 and the reason should not be ‘capricious, fanciful, spiteful or prejudiced’87. The provisions must be applied in a practical, common sense way to ensure that the employer and employee are treated fairly88.

Consideration

[55] It was evident from Mr McGeough’s account of managing Miss Leon over the last 12 months that there was a palpable level of exasperation regarding the experience. In fact when asked in cross examination Mr McGeough confirmed that he had had a ‘gutful’ 89. It should not however be assumed that such exasperation was accompanied by ill intent or a general dislike of Miss Leon. It was apparent that Mr McGeough had started on a process to improve Miss Leon’s engagement. However, from a human resources perspective it was somewhat naïve or perhaps misguided, and incomplete.

[56] People’s perception of events will inevitably differ. This is particularly the case when asked to recall such events after the passage of time. At times the difference is significant and at other times there is but a mere thin line that separates the accounts. Subtle nuances of truth which on occasion overlap and at other points are divided by deep chasms.

[57] I am unconvinced that a difference in accounts inescapably means that one version is the truth and the other, a mere fabrication gilded with the intent to deceive. It is perhaps the case, and I consider this matter one of them, that those providing the evidence genuinely believed the narrative that they gave and were unwaveringly committed to it.

[58] The evidence of Miss Leon and Mr McGeough often overlapped although at times there was an ever so slight difference. Miss Leon said that Mr McGeough said ‘take the day off … and go and think under a tree or wherever, he didn’t care’ 90. Whereas Mr McGeough recalls that he informed Miss Leon that ‘[I]f you need time to think about this and decide what you would like to do, please go and sit under a tree or go somewhere else that you - that suits you and give it the thought that you need. Take the day off and then come back and tell me what your decision is’. The first account would appear to demonstrate a lack of care and the other, an instruction to take some time and give some considered thought to what had been said.

[59] Mr McGeough acknowledged that he had a lack of experience when it came to human resources and I observed that his evidence was not always particularly helpful to Bernini’s case, and that he conceded when in error or where an oversight was made. Where there is divergence between the evidence of Mr McGeough and Miss Leon, I prefer the account of Mr McGeough due to his inclination at times to simply say it as it was.

[60] Mr McGeough held the view that from the Yoga Day onward Miss Leon had proved difficult in light of her ongoing negativity.

[61] On 20 October 2017, Mr McGeough met with Miss Leon and said that he provided a summary of their discussion in an email he sent to her later that day. The email set out:

In summary of our discussion we note the following;

1) Your general attitude, body language and behaviour in office interactions has had a negative impact on office morale.
2) Our company operates on the fringe of a “creative intelligence” sector and relating to that field in a marketing sense requires us to be a hive of creative ideas. Low morale means low level of output and productivity.
3) Getting on with office colleagues is essential for team work.
4) In the absence of natural compatibility, application of basic social skills is required to ensure interactions are positive and productive.
5) Inability to perform with internal staff relations raises concerns with how external public relations may be handled when character compatibility is not optimum.
6) Reluctance to support colleagues in the recent promotional event was disappointing …

… we require a complete turnaround in the behaviour and attitude that has brought us to raise points 1 to 6 above. We will arrange to meet in approximately two weeks to discuss your progress in attending the above… 91

[62] On 23 October 2017, Miss Leon responded to the Mr McGeough’s email of 20 October 2017 and it is apparent that her perception of the meeting that had occurred was significantly different. Referring to Mr McGeough’s complimentary remark that her work was impeccable and that he thought of her as a model employee, she continued…

I’m thankful for bringing to my attention that, conversely to your opinion, my behaviour may have unintentionally impacted the office morale. I treat all Bernini’s employees, directors and clients in a respectful, professional, polite and equitable manner. Following your comments, I will take immediate action to ensure this is clear to everyone and to address any misunderstandings

To assist with my continuous improvement, I would appreciate if you could please advise of any instances or a specific example when my work performance hasn’t met the office standards of basic social skills that nurture positive and productive interactions 92.

[63] Understandably, it may prove quite difficult for a Supervisor or Manager to precisely articulate examples to an employee that demonstrate that the employee, for want of a better term, looks ‘completely miserable’. Conveying to an employee that their body language and general attitude has had a negative impact on office morale in the absence of further detail is insufficient information for the employee to first, respond to, and second to use the information provided as platform for improvement.

[64] It is apparent that Mr McGeough had sought to address the genesis of Miss Leon’s dissatisfaction and stress in the workplace on receipt of her complaint of 15 September 2017. Bernini had provided Miss Leon with authorisation to take personal leave and thereafter had attempted to have Miss Leon meet with Mr Archer, and separately Ms Purple, with a view to resolving the issues between them.

[65] However, issuing information to the wider workforce that Miss Leon was absent due to workplace stress was misguided and led to a situation where Miss Leon’s stress was exacerbated. While Mr McGeough apologised for the action it was, in this circumstance, inappropriate to inform Miss Leon’s colleagues of her situation. Further, arranging for meetings between Miss Leon and the two employees whom she considered were bullying her was naïve, particularly when Mr McGeough acknowledged that he possessed limited human resource experience. It was therefore unsurprising that the meetings achieved nothing to resolve Miss Leon’s complaint.

[66] Although Miss Leon had requested examples of her work performance that had not met office standards of basic social skills, it is apparent that no such examples were forthcoming. Further, while there was good intent to commence a process of ongoing performance management it is apparent that after 20 October 2017, up until early 2018, no further performance management meetings were held.

[67] From mid to late December 2017, the relationship between Mr McGeough and Miss Leon soured. In part, I am persuaded that the demise of the relationship arose from Miss Leon’s persistent questioning of her employment terms and conditions, her responses to pay increase offers, and her request for an employment contract and position description. Mr McGeough clearly considered he was expending too much time on the one employee and struggled to understand why she pressed the issues so; he simply wanted to get on with the job and thought that Miss Leon had issues that she needed to confront.

[68] Miss Leon’s representative advanced that Miss Leon’s dismissal arose because Bernini was aware of the possible financial liability it would face with other employees if it rectified the issue that Miss Leon had raised. I do not consider that to be the case. To be utterly blunt, it was apparent that Mr McGeough was simply fed up with managing Miss Leon. He had after all advised Miss Leon to take the time to ‘think about this and decide what you would like to do, please go and sit under a tree or go somewhere else that you - that suits you and give it the thought that you need. Take the day off and then come back and tell me what your decision is’ 93.

[69] I am of the view that Mr McGeough had simply reached the endpoint of his patience with Miss Leon and that was the reason for her dismissal. That end point had been reached due to the culmination of what Mr McGeough perceived to be Miss Leon’s negativity within the workplace, a lack of gratitude concerning a pay increase and her persistence to obtain that same pay increase and a contract, and other documentation that had been referred to in her first employment contract. It is acknowledged that Miss Leon’s negativity appeared to arise from what she considered to be a situation of alleged workplace bullying that had not been adequately addressed. And on this point she was correct. The allegation of workplace bullying had not been adequately addressed by Bernini.

[70] In my view Miss Leon had not been adequately performance managed with regard to her communication style and interaction with colleagues and clients, her engagement within the workplace and her professionalism. I consider that Miss Leon’s email of 23 October 2017 was partially contrived and self-serving. Nevertheless, it identified a deficiency that continued to plague Mr McGeough in his management of Miss Leon, namely the inability to provide examples of the offending behaviour to Miss Leon. Further, Mr McGeough simply did not follow through with the performance management he had commenced on 20 October 2017. While Mr McGeough was frustrated by Miss Leon’s questions about her terms and conditions of employment, and by her negativity, exasperation does not of itself found the basis for a valid reason to dismiss and it follows I am not satisfied that there was a valid reason in these circumstances.

Notification of the valid reason – ss 387(b) and an opportunity to respond – ss 387(c)

[71] The Commission must take into account whether notification of a valid reason for termination has been given to an employee protected from unfair dismissal before the decision is made 94, and in explicit95, plain and clear terms. It is accepted that this is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality96.

Consideration

[72] Based upon the evidence before me I have concluded that Miss Leon was not notified of a valid reason for her dismissal before the decision to terminate her employment. Further, I have found she was not provided with the opportunity to respond as that term is understood under s 387(c) of the Act.

[73] The evidence of Mr McGeough was that he had decided to dismiss Miss Leon prior to the prospects meeting on 8 February 2018. Whilst conceding that the meeting was scheduled as a prospects meeting he identified that he had an alternative agenda and knew that he would was going to dismiss Miss Leon. Therefore, while Mr McGeough asked whether Miss Leon was surprised by the observations of the Directors concerning her interaction with colleagues and staff, I do not consider that this constituted notification of a valid reason and an opportunity to respond as that term is understood under the Act.

Unreasonable refusal of a support person – ss 387(d)

[74] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.

Consideration

[75] It was clear on the evidence that Miss Leon was completely unaware that the meeting on 8 February 2018 would evolve from a prospects meeting into a disciplinary meeting. And yet, it was the evidence of Mr McGeough that he had planned to address the matter of disciplinary action at that meeting. Miss Leon was not afforded an opportunity to request to have a support person present because she was operating under misinformation that had been conveyed by Mr McGeough.

[76] At times it may be difficult for an employer to inform an employee that the proposed meeting will address disciplinary matters. However, the employer should not succumb to her or his own inability to hold an awkward discussion. If a person has decided during the course of her or his career to manage employees they should then appreciate that choice comes with a responsibility to be adept in holding what they may consider to be an awkward discussion, but which inevitably is just an honest communication. There may be a genuine concern that communicating to an employee that a meeting is a disciplinary meeting will engender anxiety within the employee. However, steps may be taken to support the employee through this process, whether through the timing of the notification and subsequent meeting, the provision of an Employee Assistance Program where available, a suggestion that the employee prepare what they may want to say at the meeting and importantly allowing the employee the opportunity to request a support person.

Warnings regarding unsatisfactory performance – ss 387(e)

[77] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal.

[78] Unsatisfactory performance is more likely to relate to the employee’s capacity to do the job, than their conduct 97. The Commission must take into account whether there was a period between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period gives the employee the opportunity to understand their employment is at risk and to try to improve their performance98.

Consideration

[79] On 20 October 2018, Mr McGeough held a performance management meeting with Miss Leon in which he said he addressed her general attitude, body language and behaviour in office interactions, and the application of basic social skills 99. There was dispute between the parties concerning what was discussed during the course of that meeting. However, I think it evident from the email that Miss Leon sent to Bernini staff at the Subiaco store after the meeting that her behaviour had been addressed. Mr McGeough conceded that he did not provide specific examples of behaviour but referred to:

[80] In the email of 20 October 2018, Mr McGeough stated:

[81] The Act requires me to have regard to whether or not Bernini gave warning to Miss Leon about the unsatisfactory performance as held to exist at a time prior to her dismissal. In the statutory context, a warning must have been conveyed (with an appropriate level of gravity) so as to leave Miss Leon in no doubt that the employer anticipated change in one particular area of performance or another. Miss Leon must have effectively been put on notice prior to the dismissal that Bernini held genuine and substantial concerns about her performance.

[82] The nature of warnings in the context of ss 387(e) of the Act was discussed in the Full Bench decision in BlueScope Steel Limited v Sirijovski 102. At paragraph 37 of that decision the Full Bench stated:

The purpose of a warning contemplated by s.387(e) of the Act is to demonstrate the seriousness with which an employer regards an employee’s performance and/or conduct and to provide an opportunity for the employee to address those concerns and thereby avoid or reduce the risk of dismissal. A warning should identify the relevant aspects of the employee’s performance which is of concern to the employer and should make it clear that the employee’s employment is at risk unless the performance is improved. In James McCarron v Commercial Facilities Management Pty Ltd T/A CFM Air Conditioning Pty Ltd the nature and purpose of a warning about unsatisfactory performance is described as follows:

“[32] The purpose of a warning about unsatisfactory performance must be to identify the performance that is of concern and must make it clear that a failure to heed the warning places the Applicant’s employment at risk. Such a warning gives an employee an opportunity to improve in those areas identified as requiring improvement. An integral part of such a warning must be to clearly identify the areas of deficiency, the assistance or training that might be provided, the standards required and a reasonable timeframe within which the employee is required to meet such standards.” (Footnotes omitted)

[83] It is said that ss 387(e) of the Act does not mean that an employer is obliged to indicate expressly by a distinguishable step that dismissal is a potential consequence of the unsatisfactory performance 103. An employer however must warn the employee or person of the issue of unsatisfactory performance with the gravity of the warning being the vehicle for conveying the nature of the risk to which the person’s employment is exposed104. I am satisfied that the nature of the risk to Miss Leon’s employment was conveyed in the email from Mr McGeough to her on 20 October 2017 and have duly taken this into account. However, with regard to an assertion that communication to Miss Leon on 23 January 2018 and 1 February 2018 constituted warnings regarding her performance, I am not satisfied that was the case.

Impact of the size of the respondent on procedures followed and absence of dedicated human resources management specialist/expertise on procedures followed – ss.387(f)-(g)

[84] When considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which: (a) the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (b) 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.

Consideration

[85] Bernini is a small company without a dedicated Human Resources function and Mr McGeough who managed Miss Leon had limited human resources knowledge. I find that Bernini’s size and absence of a human resources function impacted on the procedures in effecting the dismissal and have considered that in arriving at my decision.

Other relevant matters – ss.387(h)

[86] Amongst other considerations, it is necessary to consider the impact the dismissal had on Miss Leon given all of the circumstances. This includes consideration as to whether the dismissal was harsh in the sense that it was disproportionate to the actual conduct found by the Commission 105. Further, a dismissal may, depending upon the overall circumstances be considered to be harsh on the person due to the economic and personal consequences resulting from being dismissed106.

[87] In considering the question of what is ‘harsh, unjust or unreasonable’ the Commission is to ensure that ‘a fair go all round’ is accorded to both the employer and the employee 107.

Consideration

[88] I am of the view that the circumstances of Miss Leon’s dismissal must be examined in light of the submission that she was summarily dismissed. It was the evidence of Miss Leon that she did not receive payment in lieu of notice at the time of her dismissal or shortly thereafter, and was not required to work a period of notice. A payment in lieu of notice was not made to Miss Leon until some 2 months or so after her dismissal.

[89] An assessment of the degree of seriousness of misconduct which has been found to constitute a valid reason for dismissal for the purposes of ss 387(a) is a relevant matter to be taken into account under ss 387(h).

[90] Mr McGeough was confused as to what precisely constituted a summary dismissal. Perhaps this is understandable given it has been said that it is a term of which the epithet ‘confusing and ambiguous’ is perhaps apt 108. However, at law it is understood to refer to a dismissal without notice arising from a breach of an essential term of the employment contract, a serious breach of a nonessential term of the contract, or conduct manifesting an intention not to be bound by the contract in the future on the part of the employee109.

[91] To constitute a summary dismissal it is not sufficient that merely no notice is provided. There must be an absence of notice in the circumstances and a breach of an essential term, or a serious breach of a nonessential term, or conduct that shows an intention no longer to be bound by the contract in the future.

[92] I think it was clear that Mr McGeough was terribly misguided when it came to what constituted a summary dismissal. In this respect, I do not consider that he was attempting to obfuscate when giving his evidence but rather had limited experience in managing employment issues within the Bernini business. Clearly, Mr McGeough considered a summary dismissal to be what he referred to as a ‘blunt dismissal, or something like this, without any appropriate justification or without any warnings or something along those lines’ 110.

[93] However, having considered the evidence before me I am satisfied that the dismissal of Miss Leon occurred in circumstances where there was a significant delay between the time of the dismissal and Bernini’s payment in lieu of notice. Bernini had ample time to correct its error, oversight or deliberate withholding of such payment yet failed to do so in a manner where there continued to exist temporal connection between the dismissal and payment made. The late payment to Miss Leon, absent that temporal connection, does not suddenly render what was a summary dismissal to being a dismissal with notice some two months later. I am satisfied on the evidence that Bernini considered Miss Leon had seriously breached the obligations under her employment contract and dismissed her absent notice. The outcome afforded was disproportionate in all the circumstances.

[94] Miss Leon’s dismissal occurred at a time when she was awaiting confirmation whether she had been granted permanent residency. She had no forewarning that disciplinary action was imminent. I am unconvinced that the warning on 20 October 2017 was the harbinger of the dismissal and do not consider that Mr McGeough’s communication in the meeting on 1 February 2018 clearly articulated to Miss Leon that she may face dismissal.

[95] It is the case that Miss Leon is now compelled to not only seek alternative employment but with that comes the necessity to secure sponsorship for her visa while awaiting the outcome of her permanent residency application. I am satisfied that the withdrawal of Miss Leon’s sponsorship by way of the dismissal created a greater hardship than a dismissal would have in the ordinary course. Miss Leon now faces an appreciable risk of deportation if she fails to find another sponsor and I consider the dismissal particularly harsh when taking into consideration these circumstances 111.

Conclusion

[96] Having taken into account each of the matters in s 387 of the Act, I have concluded that Miss Leon was unfairly dismissed, which thereby necessitates a consideration of remedy.

REMEDY

[97] The Act provides the following with respect to remedy:

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

[98] Subsection 390(3) of the Act underscores the primacy of reinstatement as a remedy for an unfair dismissal.

[99] A decision of the Commission to order a person’s reinstatement is a discretionary decision, 112 exercisable if the Commission is satisfied the person was relevantly protected, the person was unfairly dismissed and the person has made a s 394 application113.

[100] A Commission decision to order the payment of compensation to a person is also a discretionary decision, but is only exercisable if, amongst other things, the Commission is satisfied reinstatement of the person is inappropriate and the FWC considers a compensation order is appropriate in all the circumstances of the case 114.

[101] Section 392 of the Act sets out the criteria to which regard must be had in determining any amount of compensation I ordered.

[102] In determining the amount of compensation to be ordered, the Act provides:

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.

CONSIDERATION

Reinstatement

[103] It is the case that reinstatement is the primary remedy in the event of a finding of unfairness and as such Bernini bears a substantial onus to demonstrate that reinstatement is not appropriate as distinct from undesirable or difficult. Both parties have advanced to the effect that reinstate would be inappropriate due to the loss of trust and confidence.

[104] In all of the circumstances, including those that contributed to the dismissal and were traversed in this decision, I am satisfied there would be little prospect of re-establishing a productive and cooperative relationship in the absence of trust. I consider that the loss of trust and confidence is soundly and rationally based and as such consider that reinstatement is inappropriate.

[105] To compel Miss Leon to return back to work with Bernini would, in my view, lead to disharmony and thereafter a reduction in productivity of that business. Given the evidence before me it cannot be said that reinstatement is appropriate in the circumstance.

[106] I find an order for compensation is appropriate and will consider each of the criteria in s 392 of the Act to determine the quantum of the compensation.

Compensation

[107] The ‘Sprigg Formula’, derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket 115(Sprigg), is the well accepted approach for assessing the amount of compensation under ss 392(2) of the Act. The Full Bench in Gloria Bowden v Ottrey Homes and Cobram and District Retirement Villages Inc (t/as Ottrey Lodge)116 (Bowden) adopted the Sprigg Formula in the context of determining compensation under the Act.

[108] In Bowden the approach was described in the following way:

[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’... 117

[109] In Haigh v Bradken Resources 118, the Full Bench reaffirmed the principles set out within Sprigg, and in particular the steps needed to be taken in assessing compensation. The first of those steps is to estimate the amount the employee would have received, or would have been likely to receive if the employment had not been terminated; the second step being to deduct moneys earned since termination; the third being to make deductions for contingencies; fourth, to calculate any impact of taxation; and fifth, to apply the legislative cap.119

[110] The Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries 120 stated:

The identification of this starting point amount ‘necessarily involves assessments as to future events that will often be problematic’ 121. Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.

[111] The notion of ‘taking into account’ a matter (such as those described in s 392 of the Act) connotes a genuine consideration of the relevant provision and the apportionment of the appropriate weight in the circumstances 122.

Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

Anticipated period of employment

[112] Miss Leon received an annual salary of $62,000.00 per annum amounting to a weekly salary of $1192.00 (gross).

[113] There is evidence before the Commission that Bernini was dissatisfied with Miss Leon’s performance regarding her interaction with colleagues and external third parties, and her style of communication with others. Mr McGeough gave evidence that the Miss Leon’s performance had been addressed in the performance management meeting on 20 October 2017 and by informal counselling.

[114] I am of the view that there is sufficient evidence to infer that Miss Leon’s performance and conduct was not without issue and with time a formal process would have been recommenced to address such deficits.

[115] The question of the anticipated period of employment requires an exercise of judgment on what would be reasonable considering all the circumstances. On the one hand Miss Leon may point to an expectation of ongoing employment by Bernini for a period of at least two years after being granted permanent residency (if that occurred). On the other hand Bernini can point to an employee who was demonstrating substandard performance or conduct regarding her interaction with colleagues and the interface with its clients. Bernini clearly considered that Miss Leon demonstrated gloominess and lacked engagement.

[116] I am satisfied that Bernini commenced a process of performance management with Miss Leon but did not follow up with regular meetings to determine progress against expected outcomes regarding her interaction and communication issues. Had Bernini persisted with the performance management of Miss Leon, based upon the evidence before me and having regard to the assumption that any dismissal of Miss Leon by Bernini later than 8 February 2018 would be in accordance with proper procedure, I have reached the conclusion that Miss Leon’s employment would have continued for at least two months of the maximum compensation period. As result, I set the anticipated period of employment at two months.

Notice period

[117] The remuneration that an applicant would have received or likely to have received would include payment for the period worked on notice, or the payment received in lieu of notice 123. Notice is payable at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum notice period124.

[118] Bernini submitted that Miss Leon received $1,886.61 as payment in lieu of notice on 27 April 2018. Given Miss Leon’s length of service Bernini was required to give two weeks’ notice.

[119] I have found that the anticipated employment period was two months and acknowledge that Bernini has made an ex gratia payment of $1,886.61. It follows that the $1,886.61 will be deducted from the compensatory amount.

The effect of the order on the viability of the employer’s enterprise

[120] During the course of the Hearing and in closing submissions both Bernini and Miss Leon were given the opportunity to address remedy. Inevitably this included the opportunity to have particular regard to the effect of the order on the viability of the employer’s enterprise. Bernini submitted that while Mr McGeough gave evidence that Bernini could do without the revenue that Miss Leon generated for the business which amounted to $1,375,000 it did not take into consideration the difference between profit and revenue. Notwithstanding there appeared to be an absence of cogent submission on the effect the order would have on the viability of Bernini.

[121] Given the paucity of evidence before me on this point I consider it a neutral factor.

Length of the person’s service with the employer

[122] Miss Leon had been in the employment of Bernini for some two years. It is not a lengthy period of service and I consider it a neutral factor.

[123] It is noted generally in relation to orders for monetary compensation that payments in lieu of notice are also to be deducted in consideration of the length of service of an applicant, (also relevant to consideration of ss 392(2)(g)) 125.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[124] Miss Leon has made concerted effort to mitigate her loss suffered because of the dismissal. Evidence was given that she has applied for numerous jobs across Australia and New Zealand as an interior designer and has been looking for part-time work in the hospitality industry.

The amount of remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[125] Based on the evidence before me I am satisfied that Miss Leon has been able to generate an income during the period between the dismissal and the making of the order for compensation. Miss Leon was able to obtain some casual work in a restaurant and payslips were provided that showed engagement from 26 February 2018 until 20 May 2018 126. Earnings amounted to $5,502.33 (gross) for the period.

Any amount of income reasonably likely to be earned during the period between the making of the order and the actual compensation

[126] I am satisfied that Miss Leon has been able to secure employment although I am cognisant that it is of a casual nature and have taken this into consideration. Therefore, I have not made an assumption that Miss Leon will be likely to earn any monies during the period between the making of the order and the actual compensation being paid.

Misconduct and shock, distress or humiliation

[127] I have considered Miss Leon’s behaviour during her employment and the submissions of Bernini that any compensatory amount awarded to Miss Leon should be reduced significantly because she contributed to her dismissal and ‘refused to acknowledge or sought to remedy in any real tangible way her own conduct’ 127. However, I am not persuaded that a reduction is in order in the circumstances of this matter.

[128] I do not include any component by way of compensation for shock, distress or humiliation caused by the manner of the dismissal.

Compensatory cap

[129] The amount of compensation the Commission may order is capped. If the appropriate quantum of compensation initially assessed exceeds that cap then the Commission must reduce the amount to the amount of the cap.

[130] The Act stipulates that the compensation cap is the lesser of:

• the amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before dismissal;

• half the amount of the high income threshold immediately before dismissal 128.

[131] The high income threshold is defined in s 333 of the Act as an amount prescribed by, or worked out in the manner prescribed by, the Fair Work Regulations 2009 (Regulations). Regulation 2.13 sets out the manner in which the high income threshold is to be worked out. The steps in Regulation 2.13(3), particularly Step 1 and Step 2, refer to ‘ordinary time earnings’. The Act defines ‘earnings’ such that they exclude contributions to a superannuation fund 129.

[132] Under ss 392(5) of the Act I am obliged to determine the amount worked out under ss 392(6) of the Act. The amount is calculated by reference to the ‘total amount of remuneration’ received by the person or to which the person was entitled (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before dismissal. ‘Remuneration’ is not defined in the Act.

[133] Both ss 392(6) and ss 392(2) of the Act refer to ‘remuneration’ under Part 3-2.

[134] The meaning of ‘remuneration’ has been considered in various iterations of what is now the Act and with regard to differing legislative provisions. What appears clear from the decisions is that the term ‘remuneration’ has adopted a consistent meaning whereby superannuation is included.

[135] In Rofin Australia Pty Ltd v Newton 130 the Full Bench of the Australian Industrial Relations Commission considered that the employee’s rate of remuneration included both annual salary and superannuation, the Full Bench stated:

Prior to the amendments made to the Act by the Workplace Relations and Other Legislation Amendment Act 1996 (the WROLA Act), the "salary cap" for the purposes of excluding non-award employees from the operation of the termination of employment provisions was expressed in terms of "relevant wages". The term now used is "remuneration", a term which denotes a broader concept than salary or wages. "Remuneration", in our view, is properly defined as the reward payable by an employer to an employee for the work done by that employee in the course of his or her employment with that employer. It is a term that is confined neither to cash payments nor, necessarily, to payments actually made to the employee. It would include non-pecuniary benefits and payments made on behalf of and at the direction of the employee to another person out of moneys otherwise due to that employee as salary or wages.

[136] Ross VP as he was then in Shorten and Others v Australian Meat Industry Holdings Pty Ltd 131 considered the meaning of ‘remuneration’ with regard to s.170EE of the WR Act referring to the cases of Ardino v Count Financial Group Pty Ltd132, May v Lilyvale Hotel Pty Ltd133and Rigby v Technisearch Ltd134. Ross VP stated:

Plainly, the word ‘remuneration’ was chosen, for s 170EE(3), in order to denote a concept wider than wages. Non-monetary benefits are not wages: But they fall within the concept of remuneration…..

Accordingly the calculation of lost remuneration includes superannuation contributions and the value of non-pecuniary benefits such as the provision of a car, or free board and/or meals…

[137] The Full Bench of Fair Work Australia in the decision of Tabro Meat Pty Ltd v Kevin Heffernan 135 has affirmed that superannuation forms part of ‘remuneration’ as that term is understood in ss 392(2)(c) of the Act.

[138] For the purpose of ss 392(5) of the Act, I am satisfied the amount is $33,945.00. In arriving at this amount I have considered that under Miss Leon’s employment contract she was entitled to superannuation contributions at 9.5%. If I am wrong and the remuneration received was $31,000 or just less, I am satisfied that this does not impact on the compensatory cap which remains a lesser amount than $71,000.00

Any other matter that the Commission considers relevant

[139] I am satisfied that no other matters are relevant regarding my determination of the compensatory amount.

CONCLUSION AND ORDERS

[140] After consideration of the foregoing issues, I find that Miss Leon was dismissed and that it was unfair within the meaning of the Act.

[141] I find that reinstatement is not an appropriate remedy in this case and that compensation is appropriate. The calculation for compensation is set out in the following table.

Compensation	Calculation	Gross	Total Gross Amount
Anticipated employment period	2 months [8 x $1192.00] = $9536.00 Superannuation 9.5% = $905.92	$9,536.00	$10,441.92
Ex gratia	$1,886.61	-$1,886.61
Deduct monies for misconduct	$0.00	$0.00	$0.00
Deduct monies earned since termination	- $5,502.33	$5,502.33	-$5,502.33
Deduction for contingencies	$0.00	$0.00	$0.00
Calculate any impact of taxation	To be taxed according to law
Apply the compensation cap	Last six months amount of remuneration received by Miss Leon = $31,000 + (9.5% superannuation) = $2,945.00 Half the amount of the high income threshold = $71,000.00	$33,945.00	Cap applied
TOTAL	$3,052.98

[142] For the reasons I have given earlier, and on the basis of the calculations completed, I order that Bernini pay to Miss Leon an amount of $3052.98. In determining the amount for the purpose of the order I have taken into account all the circumstances of the case including the criteria set out in ss 392(2) of the Act.

[143] The total amount does not exceed the compensation cap applying at the time of dismissal and the amount ordered to be paid must be subject to ordinary taxation.

[144] The compensation is to be paid within 14 days from the date of the accompanying order 136 (as issued simultaneously with this decision).

DEPUTY PRESIDENT

Appearances:

Mr Walter Estermann, on behalf of the Applicant.

Mr Brett Douglas, Solicitor, on behalf of the Respondent.

Hearing details:

2018.

9 and 10 May.

Perth.

Final written submissions:

Applicant, 30 May 2018.

Respondent, 30 May 2018.

Printed by authority of the Commonwealth Government Printer

1 Exhibit A2 Witness Statement of Marianella Leon p.1.

2 Ibid.

3 Exhibit R9 Witness Statement of Noel McGeough [7].

4 Exhibit A2 Witness Statement of Marianella Leon p.1.

5 Ibid.

6 Exhibit R9 Witness Statement of Noel McGeough [4].

7 Exhibit A2 Witness Statement of Marianella Leon p.2.

8 Exhibit R9 Witness Statement of Noel McGeough [8].

9 Ibid [3].

10 Ibid [12].

11 Exhibit A2 Witness Statement of Marianella Leon p.2.

12 Ibid.

13 Exhibit R9 Witness Statement of Noel McGeough [13] - [14].

14 Ibid [14].

15 Ibid [15].

16 Ibid [16].

17 Transcript PN1208.

18 Exhibit R9 Witness Statement of Noel McGeough [17]; Annexure NM4.

19 Ibid [19].

20 Ibid.

21 Ibid [18].

22 Ibid [17]; Annexure NM5.

23 Exhibit A2 Witness Statement of Marianella Leon p.3.

24 Exhibit R9 Witness Statement of Noel McGeough [22].

25 Ibid; Annexure NM6.

26 Ibid [23].

27 Ibid [24] – [25].

28 Exhibit A2 Witness Statement of Marianella Leon p.3.

29 Ibid.

30 Exhibit A2 Witness Statement of Marianella Leon p.3.

31 Ibid p.4.

32 Ibid.

33 Exhibit R9 Witness Statement of Noel McGeough [26]; Annexure NM7.

34 Exhibit R9 Witness Statement of Noel McGeough [27]; Annexure NM7.

35 Exhibit R9 Witness Statement of Noel McGeough [27];

36 Ibid [28]; Annexure NM9.

37 Exhibit R9 Witness Statement of Noel McGeough [29]; Annexure NM10.

38 Exhibit R9 Witness Statement of Noel McGeough [29].

39 Exhibit A2 Witness Statement of Marianella Leon p.4.

40 Exhibit R9 Witness Statement of Noel McGeough [30].

41 Exhibit R9 Witness Statement of Noel McGeough [32]; Annexure NM11.

42 Exhibit A2 Witness Statement of Marianella Leon p.4.

43 Ibid p.5.

44 Ibid.

45 Ibid.

46 Ibid; Exhibit R9 Witness Statement of Noel McGeough [36]; Annexure NM14.

47 Exhibit R9 Witness Statement of Noel McGeough [37].

48 Ibid [39].

49 Ibid [40].

50 Exhibit A2 Witness Statement of Marianella Leon p.7.

51 Ibid.

52 Ibid.

53 Exhibit R9 Witness Statement of Noel McGeough [42].

54 Ibid [43].

55 Ibid; Annexure NM17.

56 Ibid [48].

57 Ibid.

58 Exhibit R9 Witness Statement of Noel McGeough [49].

59 Exhibit A2 Witness Statement of Marianella Leon p.8.

60 Ibid.

61 Ibid.

62 Ibid p.9.

63 Transcript PN 1173.

64 Transcript PN 1175.

65 Exhibit A2 Witness Statement of Marianella Leon p.9.

66 Ibid p.10.

67 Ibid.

68 Transcript PN 1272 -1281.

69 Exhibit R13.

70 Transcript PN 445-451; Exhibit A6 – Bundle of documents – Mitigate Loss.

71 Transcript PN 449.

72 Ibid; Exhibit A3 and A7 Payslips up until Monday 21 May 2018.

73 Ibid.

74 Transcript PN 1034.

75 ss 382 of the Act.

76 ss 385(a) of the Act.

77 ss 385(c) of the Act.

78 ss 385(d) of the Act.

79 ss 394(2) of the Act.

80 ss 387(a) of the Act.

81 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.

82 Owen Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 [25].

83 [2013] FWCFB 6191 [34].

84 Ibid [34] – [36].

85 Ibid [34]; King v Freshmore (Vic) Pty Ltd [2000] AIRC 1019 [24].

86 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 377-8.

87 Ibid.

88 Ibid as cited in Potter v WorkCover Corporation (2004) 133 IR 458 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation (2010) 202 IR 17 [36].

89 Transcript PN 1175.

90 Exhibit A2 Witness Statement of Marianella Leon p.9.

91 Exhibit R10 Noel McGeough Bundle of Documents NM11.

92 Ibid NM14.

93 PN 1173.

94 Trimatic Management Services Pty Ltd v Daniel Bowley[2013] FWCFB 5160; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 151.

95 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151; Previsic v Australian Quarantine Inspection Services Print Q3730.

96 Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1 14-15.

97 Annetta v Ansett Australia Ltd (2000) 98 IR 233 237.

98 Johnston v Woodpile Investments Pty Ltd T/A Hog’s Breath Café – Mindarie[2012] FWA 2 [58].

99 Exhibit R9 Witness Statement of Noel McGeough [30]-[32].

100 Exhibit R10 Noel McGeough Bundle of Documents NM 11.

101 Ibid.

102 [2014] FWCFB 2593 [36]-[42].

103 Mr Ray Diamond v SSUT Pty Ltd T/A Bourbong Street Cellars[2015] FWC 816 [75].

104 Ibid.

105 Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.

106 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 465.

107 ss 381 (2)(c) of the Act.

108 Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services [2015] FWCFB 5264 [27].

109 Ibid.

110 Transcript PN 1274.

111 Gurbinder Singh v Dairy Kosher Catering Pty Ltd T/A Milk n Honey [2016] FWC 5284 [41]; Esad Ismailov v Hisoftware (Australia) Pty Ltd[2014] FWC 3751 [22]; Ms Maricar Virata v NSW Motel Management Services Pty Ltd T/A Comfort Inn Country Plaza Halls Gap [2015] FWC 7932 [63].

112 Ellawala v Australian Postal Corporation, Print S5109 [24].

113 Gloria Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey [2013] FWCFB 431 [15].

114 Ibid[16].

115 Print R0235, (1998) 88 IR 21.

116 [2013] FWCFB 431.

117 See also Ellawala v Australian Postal Corporation Print S5109 [34].

118 [2014] FWCFB 236.

119 Ibid [10].

120 [2016] FWCFB 7206 [17].

121 Smith, Arthur and Kimball, Brett v Moore Paragon Australia Ltd PR942856 [32].

122 Ms Diane Lewis v Glendale RV Syndication Pty Ltd T/A Glendale Care Bundaberg [2014] FWC 1086.

123 Mr Anthony Callahan v Graphic Impressions[2014] FWC 437 [106].

124 ss 117(2)(a) of the Act.

125 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries[2016] FWCFB 7206 [34].

126 Exhibit A3 Payslips.

127 Bernini Outline of Submissions [67].

128 Subsections 392(5) and (6) of the Act.

129 Subsections 332(2)(c) and (4) of the Act; Craig Ablett v Gemco Rail Pty Ltd [2010] FWA 8124.

130 (1997) 78 IR 78 80.

131 (1996) 70 IR 360 376.

132 (1994) 57 IR 89.

133 (1995) 68 IR 112.

134 (1996) 67 IR 68.

135 [2011] FWAFB 1080 [21].

136 PR608478.

Miss Marianella Leon v Bernini Stone & Tiles Pty Ltd T/A Bernini Stone & Tiles Pty Ltd

[2018] FWC 3780

27 JUNE 2018

DECISION

Submissions of Miss Leon

Submissions of Bernini

Agreed Matters

Matters in dispute

Valid reason for the dismissal – ss 387(a)

Consideration

Notification of the valid reason – ss 387(b) and an opportunity to respond – ss 387(c)

Consideration

Unreasonable refusal of a support person – ss 387(d)

Consideration

Warnings regarding unsatisfactory performance – ss 387(e)

Consideration

Impact of the size of the respondent on procedures followed and absence of dedicated human resources management specialist/expertise on procedures followed – ss.387(f)-(g)

Consideration

Other relevant matters – ss.387(h)

Consideration

Conclusion

REMEDY

CONSIDERATION

Reinstatement

Compensation

Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

Anticipated period of employment

Notice period

The effect of the order on the viability of the employer’s enterprise

Length of the person’s service with the employer

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

The amount of remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

Any amount of income reasonably likely to be earned during the period between the making of the order and the actual compensation

Misconduct and shock, distress or humiliation

Compensatory cap

CONCLUSION AND ORDERS