Mr Andrew Tung v Mos Burger Australia Pty Ltd T/A Mos Burger

[2015] FWC 2678

[2015] FWC 2678

FAIR WORK COMMISSION

DECISION

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

Mr Andrew Tung
v
Mos Burger Australia Pty Ltd T/A Mos Burger
(U2014/15911)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 24 APRIL 2015

Summary: whether employee unfairly dismissed - no valid reason - remedy ordered - failure to mitigate - discounting for misconduct.

[1] This decision concerns an application under s.394 of the Fair Work Act 2009 (“the Act”) by Mr Andrew Tung, who is seeking an unfair dismissal remedy in relation to his alleged dismissal from the Garden City store of Mos Burger Australia Pty Ltd T/A Mos Burger (“the employer”).

[2] Mr Tung was initially employed on or about 1 March 2011. Mr Tung alleges that his dismissal took effect on 22 November 2014. The employer, represented by Mr Yuichi Shibuya, claimed that Mr Tung had resigned his position and, as a consequence, there had been no dismissal at the initiative of the employer.

[3] For his part, Mr Tung claimed that he was notified of his dismissal by Mr Yuichi Shibuya on Thursday 20 November 2014. Mr Tung claimed that he was informed at that time that he would have no further hours allocated to him as a crew member. He claimed that no reasonable detail was given for the dismissal and he received no notice of termination, letter of dismissal or separation certificate. There is some background to this claim, which I will set out as follows.

[4] It appears as though up until October 2014 Mr Tung had been employed as a store manager and performed his duties as such at a Brisbane CBD location. Mr Tung claims that in the course of a meeting held on or about 15 October 2014 Mr Shibuya had given him a choice between resigning from his role as a full-time manager and rejoining as a part-time crew member with the employer, or resigning from his employment as such.

[5] It appears Mr Tung did not affirm a position one way or another but explained that there were staffing problems at the CBD store and that an alternative course may be to move him to another store, such as Garden City.

[6] Mr Tung was shortly thereafter transferred to the Garden City store.

[7] Mr Tung continued to be employed by the employer at the Garden City outlet until 20 November 2014 when his employment was terminated by a decision to no longer offer him any rostered hours.

[8] Mr Tung, for his part, complains that he was given no advance notice of his employer’s intention to terminate his employment.

[9] Mr Tung claims that at the meeting of 15 October 2014 Mr Shibuya set out concerns in respect of his performance as a manager and gave him the option referred to above. Mr Tung further claims that other than being transferred to the Garden City store he had no other communication with Mr Shibuya after that time.

[10] Mr Shibuya has a different view of the events. Mr Shibuya contends that one week after the meeting of 15 October 2014, he met again with Mr Tung and explained to him that it would be to his benefit if he resigned his position as he was ill-suited to a managerial role in the business. Mr Shibuya argues that Mr Tung accepted this proposition and was afforded a four week period in which it was recommended that he obtain alternative employment. I will return to this contested matter below.

[11] My construction of the evidence in this matter is that Mr Shibuya communicated to Mr Tung (at the 15 October meeting) that he had lost confidence in Mr Tung’s capacity to perform his duties as a manager in the employer’s stores. Mr Shibuya did not go so far as to indicate expressly that Mr Tung’s employment had been terminated at that time. Mr Shibuya appeared to seek to sidestep, in effect, the difficult interactions that occurred in a dismissal procedure and instead offered the Applicant an opportunity to resign his employment or face a significant demotion. For all I know, Mr Shibuya may not have been personally or culturally disposed to instigating a confrontational relationship with Mr Tung.

[12] Mr Shibuya acted upon Mr Tung’s request to be transferred to the Garden City store. Mr Tung thereafter believed that the issues had resolved themselves by way of the transfer away from the CBD store (where there appear to have been complaints about his performance as a manager).

[13] But this was not the case in Mr Shibuya’s mind. Mr Shibuya appears to have used the transfer to Garden City as a vehicle only to manage the difficult situation that had arisen and otherwise intended to press Mr Tung to resign his position. It was for this reason that Mr Shibuya claimed that he again met with Mr Tung on or about 22 October 2014 and explained to him that he was ill-suited to a managerial role in the business and should resign his position for his own benefit. As mentioned above, Mr Shibuya claimed that Mr Tung had accepted the circumstances and it was on this basis that he provided for a four-week window in which Mr Tung would be given an opportunity to seek alternative employment before his employment would cease.

[14] Mr Shibuya claims that he subsequently sought confirmation from Mr Tung that he had resigned his position as allegedly agreed, but Mr Tung never provided any such confirmation in writing.

[15] I am inclined - on the balance of probability - to accept Mr Shibuya's version of events in this regard. Mr Tung’s employment did cease on or about 22 November 2014 when he was offered no further rostered hours of work. There was some automaticity about this decision. It appears to follow logically from the four-week window of time given by Mr Shibuya on or about 22 October 2014.

[16] As a consequence of the circumstances, it appears to me that at the meeting of 22 October 2014 Mr Shibuya effectively dismissed Mr Tung from his employment on the basis of a four-week period of notice. Mr Shibuya may not have considered it to be so, but his words and actions - absent any resignation by Mr Tung - sufficiently affected a dismissal.

[17] Having established that there was a dismissal at the initiative of the employer, it now turns to me to consider whether or not Mr Tung’s dismissal was harsh, unjust or unreasonable.

Consideration

[18] Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable. Section 387 is as follows:

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; 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.

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)

[19] One of the reasons for Mr Shibuya’s concerns about Mr Tung’s performance as a manager was that he was the subject of staff complaints as to what in essence appeared to be his erratic managerial style. None of the employees from the store gave any evidence to this effect, but Mr Shibuya was unmoved under cross examination as to the veracity of his claims in this regard, which were backed up by his claim that he was in the store every week to monitor its progress and was well-placed to receive staff complaints.

[20] Mr Shibuya also gave evidence that he himself had personally observed Mr Tung’s failure to attend work at the prescribed times, which caused consequential problems to the business. Mr Shibuya’s evidence in this respect was unchallenged.

[21] Mr Shibuya also gave evidence that he had expressly given a final warning to Mr Tung on 9 October 2014. Mr Shibuya explained that he gave this final warning verbally and had shown Mr Tung a written version of the same. The letter of final warning was premised on Mr Tung’s continuous and unexcused absences from work, and his lack of support for the business operation (exemplified by refusing to help co-workers when required).

[22] Mr Tung claims never to have received this letter of final warning, or to have been shown it. Mr Shibuya however had a firm recollection of having spoken to Mr Tung about the contents of the letter and recalled having shown it to him and given him an express opportunity to improve his performance. I am inclined to accept Mr Shibuya’s claims in this regard. Whilst Mr Shibuya may have sought to navigate himself around the difficulties of a dismissal procedure, he does not appear to have been disinclined to make his views clear to Mr Tung about the expectations of the business and its managers. The warning letter of 9 October 2014 was an important observation on Mr Tung’s performance as a manager, and I very much doubt given the circumstances that Mr Shibuya would have created the relevant document but simply not been disposed to bring it to Mr Tung’s attention.

[23] Mr Shibuya argued that a similar written warning had been given to Mr Tung on 13 September 2013 (though Mr Tung refused to acknowledge receipt of such a warning). Mr Tung did acknowledge receiving a written warning letter on 17 November 2011 concerning his absenteeism.

[24] Mr Tung provided no defence of substance against the claims that he was absent from work without excuse (with the consequent disruptions to the business that this caused). Mr Tung did defend himself, however, against the claim that staff were disenchanted with his managerial style (and did so on the basis that this was a legacy situation consequent of the operational practices of the previous manager which had left the store understaffed).

[25] Having heard the evidence, I am of the view that there were sound reasons for Mr Shibuya to have concerns about Mr Tung’s managerial style in the context of his unexplained absences, at the very least. I do not think Mr Shibuya has made out the case in sufficient detail, however, that Mr Tung had also lost the support of his co-workers (despite my observation above that Mr Shibuya was well-placed to be informed of the store staff member’s view of Mr Tung).

[26] Though Mr Shibuya harboured concerns about Mr Tung’s absences, the precise scope of these absences was not made out in great detail though they were said to have been “continuous”, “created more work for [his] colleagues” and reflected poorly on Mr Tung’s professional approach to his duties.

[27] I do not think that on the whole the employer has made out a case that there was a valid reason for the dismissal of Mr Tung. Though I do not doubt Mr Shibuya observed first hand Mr Tung’s absences from work, he did not lead any particular detail as to the pattern of absences upon which he relied, and there had been no other formal warning in respect of Mr Tung’s absences since the previous year.

[28] I reach this conclusion with some hesitation, particularly for reason that Mr Tung did not challenge the claims made by Mr Shibuya in respect of his absences.

[29] The issue of Mr Tung’s absences will nonetheless become more important in my wider considerations below.

Whether the person was notified of that reason

[30] As I have concluded above, in my view Mr Shibuya made it sufficiently clear to Mr Tung what his concerns were about Mr Tung’s performance as a store manager. But be that as it may, Mr Shibuya never reached a point where he articulated directly his intention to dismiss Mr Tung and because he did not do so, he did not divulge in any specific manner the reason for the dismissal.

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

[31] Given the circumstances as I have set them out above, Mr Tung was not given an opportunity to respond to his employer’s concerns about his capacity or conduct in relation to the reasons for the dismissal. More broadly, however, there were two occasions on which Mr Shibuya set out his concerns to Mr Tung, and Mr Tung did not complain he had no opportunity to reply to Mr Shibuya.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[32] Further, given the particular circumstances of this case, Mr Tung was not given an opportunity to have a support person present to assist in any discussions relating to his dismissal. As a consequence, there are no relevant findings that can be made in respect of this subsection.

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

[33] It appears in the meeting of 15 October 2014 Mr Shibuya and Mr Tung engaged in an exchange about the circumstances of Mr Shibuya’s concerns with Mr Tung’s performance as a store manager. Mr Tung was able to explain in sufficient detail to Mr Shibuya that he believed that the issues with staff arose from a legacy situation and not from his own personal interactions with the staff involved.

[34] Whilst there was scope for interaction of this kind between the parties, it did not arise in the context of a dismissal related discussion. Consequently, the employer did not provide Mr Tung with an opportunity of the kind contemplated under the subsection.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal

[35] It is reasonably inferred from the circumstances that the business involved in this matter is not a business of a small scale.

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

[36] The employer appears at one stage to have had an HR officer employed who may have provided assistance in respect of the procedures to be followed in effecting a dismissal. It does not appear to me that the circumstances of this case warrant any special consideration in respect of the availability of HR resources.

Any other matters that the FWC considers relevant

[37] This is a matter that was characterised by a high degree of informality in respect of processes and procedures on the part of both parties. Neither Mr Shibuya or Mr Tung had at all time strong recollections of time frames, or details of conversations and exchanges, or the ability to discern relevant from irrelevant considerations.

[38] But other than this passing observation, there are no other matters to which my attention was drawn that are relevant to the relevant findings.

Conclusion

[39] Having regard to the circumstances of this matter, I find that Mr Tung was dismissed harshly unjustly or unreasonably. And because I so find, I will now turn to consider the applicable remedy.

REMEDY

[40] Section 390 of the Act reads as follows:

Division 4—Remedies for unfair dismissal

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.

[41] Mr Tung was protected from unfair dismissal for the Act’s purposes, and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise a discretion as to whether Mr Tung can be reinstated.

[42] Section 391 of the Act provides as follows:

391 Remedy —reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

[43] I would neither reinstate (by re-appointing) Mr Tung to his former position or order that he be appointed to another equivalent position, or any associated entity of the employer, on the same or any other site.

[44] Mr Tung had been the subject of findings of poor attendance whilst performing a managerial role, which he did not in substance challenge. In any event, I accept Mr Shibuya’s evidence in regards to Mr Tung’s conduct as a manager given that he was in a position to make direct observations in light of his attendance at the store on a weekly basis. There was no sound reason for me to discount Mr Shibuya’s claims as made in these regards. Mr Tung’s reinstatement would not result in a productive workplace, and Mr Shibuya has reasonable concerns about his confidence in Mr Tung to perform his duties as a manager.

[45] Because of my findings in this regard I now turn to consider 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

(b) the length of the person’s service with the employer

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

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

(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

(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

(g) any other matter that the FWC considers relevant.

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

[46] It does not appear to me that any order that I might make would affect the viability of the employer, given my reasonable inferences about its resources.

The length of the person’s service with the employer

[47] Mr Tung had been employed for approximately three and a half years with the employer. Whilst not a lengthy period of time, is a period of time that is somewhat of a positive factor in respect of making an order for an amount of compensation.

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

[48] The determination of the remuneration that Mr Tung would have received but for the dismissal is contingent on the period of time that I determine that he would have continued to work for the employer (but for the dismissal). This necessarily is a speculative evaluation informed by the context of the evidence to which I have been exposed.

[49] In my view, Mr Tung would not have remained an employee for any longer than a further ten weeks. Mr Tung was under considerable pressure as a result of his employer’s observations about his underperformance as a manager and his absenteeism. As I said above, there were sound reasons for Mr Shibuya to have lost considerable confidence in Mr Tung’s ability to perform his role as a store manager.

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

[50] Mr Tung’s direct and candid evidence was that he had in effect not been “devoted” to the task of mitigating his losses for the simple reason that he was waiting for the determination of his application, which he seemingly presumed would result in his reinstatement.

[51] Mr Tung claims only to have earned in the approximately 5 month period since his dismissal an amount of some (approximately) $150 through cash in hand gardening/maintenance work.

[52] In this particular case, Mr Tung’s evidence strongly suggested that he has in effect sat on his hands in the period since his dismissal.

[53] Because of Mr Tung’s approach to mitigation, I will discount the amount the employer would otherwise be required to have paid him in compensation by 50%.

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

[54] No relevant circumstances arise is in respect of this matter.

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

[55] This is not a relevant consideration in the current context.

Any other matter that the FWC considers relevant

[56] There are no other matters that I consider relevant, other than I note that I have not in the current context determined that the amount that I order to be paid ought to be discounted by contingencies.

[57] Section 392(3) of the Act provides as follows:

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.

[58] The decision taken by Mr Shibuya arose in part because of Mr Tung’s conduct as a manager, which I set out above. Mr Tung would not have been dismissed but for his failure to give professional attention to his duties. In my view I should discount the amount that I would otherwise order the employer to pay to Mr Tung by 30%.

[59] Section 392(4) of the Act provides as follows:

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.

[60] My order for compensation makes no allowance for the above proscribed matters or considerations.

[61] Section 392(5) of the Act provides as follows:

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.

[62] Section 392(6) of the Act provides as follows:

(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.

[63] The order that I propose to make does not need to take into account the statutory cap.

[64] Section 393 of the Act provides as follows:

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.

[65] The employer has made no application to pay any amount I may order to be paid as compensation in instalments. Notwithstanding that, I will indicate that the employer is at liberty to request that the order for compensation that I will make be discharged by instalments. Any such application must be made within three calendar days of the issuance of the order.

CONCLUSION IN RELATION TO REMEDY

[66] The amount to be paid to Mr Tung is the equivalent of 2 week’s salary, with the parties responsible for the application of relevant taxation law. This amount should be paid to Mr Tung within 7 calendar days of the publication of the order that accompanies this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr A. Tung, Applicant

Mr Y. Shibuya, of the Respondent

Hearing details:

2015

Brisbane

17 April

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