Mr Chadd Flavell v River City Catering Pty Ltd

[2014] FWC 3942

[2014] FWC 3942

FAIR WORK COMMISSION

DECISION

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

Mr Chadd Flavell
v
River City Catering Pty Ltd
(U2014/3557)

COMMISSIONER SIMPSON BRISBANE, 23 JUNE 2014

Application for relief from unfair dismissal - Respondent did not comply with Small Business Fair Dismissal Code - Dismissal Unfair - Compensation ordered.

[1] The following Decision, now edited, was issued during proceedings on 18 June 2014.

[2] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Mr Chadd Flavell (“the Applicant”) who alleges that the termination of his employment with River City Catering Pty Ltd (“the Respondent”) was unfair in accordance with the definition contained within s 385 of the Act. The application was filed on the 4 January 2014. There was a conciliation conference which was unsuccessful and the matter was allocated to me. Directions were issued for the filing of material. Both parties filed material and statements.

[3] In terms of the background, the Applicant has been employed by the Respondent for over six years. For about three and a half of those years he was engaged as an apprentice chef. In July last year through to 24 December, he was engaged in the role of a head chef at a new RACQ site which the business was successful in obtaining where catering services were provided on a contract basis. The Respondent is a small business for the purposes of an unfair dismissal claim as it is common ground that there were less than 15 employees at the time of termination.

[4] I asked the parties today how they preferred for the matter to be conducted and it was agreed we would proceed as a Determinative Conference.

[5] There were persons from both sides who were not available to give evidence or be questioned about statements they provided. I advised both parties that in such circumstances, those statements could only be given limited weight compared to statements of those people who were available.

[6] In the end, there was only the Applicant himself, Mr Clarke for the Respondent and Mr Zeb Flavell for the applicant’s case. Mr Clarke advised he did not have any questions for Mr Zeb Flavell and agreed I could have regard to that statement without the need for him to give evidence so on that basis, his statement has been given the same weight as that of the Applicant and the Respondent.

[7] The parties agreed this is not a case of summary dismissal. A notice period was paid on termination. The Small Business Fair Dismissal Code (“the Code”) in cases of dismissals other than summary dismissals says:

“In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job. The employee must be warned verbally, or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training, ensuring the employee knows the employer’s job expectations.”

[8] As I said earlier, it appears the Applicant completed his apprenticeship in 2010 while engaged with the Respondent. He was offered a full-time position which he accepted. He moved to St Margaret’s School in 2011. The Applicant concedes he was given a warning some time ago about being late but there was some considerable distance from the time of that warning to key issues in this matter.

[9] A new position was created and the Applicant says in March of last year he was informed by Mr Clarke, who is a Director of the Respondent, that a new site at Eight Mile Plains with RACQ had been obtained. He says that Mr Clarke approached him and offered him the role initially as Manager on a salary of $60,000, to which the Applicant said he would ‘give it a shot,’ and there was a discussion about that. Subsequently, the Respondent decided to engage a Manager, Mr Spiro, for the site and the Applicant was offered and accepted a position as head chef at the site on $60,000 so that remuneration remained the same. Mr Flavell said he visited the site in June with Mr Clarke and that was when he was advised about Mr Spiro’s appointment as manager and the arrangements that I have just set out were discussed.

[10] There was some evidence in the Applicant’s statement about the way that the site at RACQ was operating. The Applicant raised concerns about the way Mr Spiro conducted his role in management, or a lack of guidance being given to him in trying to run the operation at RACQ and a lack of support. There was reference in his material to an incident on 16 October involving his brother, involving a verbal outburst, but there has not been much focus on that today and to that extent, I do not think it is a critical issue so I will not dwell on it any further.

[11] The Applicant did say he was asked to assist at other sites on occasion after commencing at the RACQ site, to go and provide some assistance at St Margaret’s. He said he changed shifts with an employee over there and worked there for a time. He said he remained there for a week but he told Mr Clarke he felt his abilities were under-utilised and he requested that shifts be moved back, which was agreed with Mr Clarke, and that is where he continued to work until the employment relationship ended.

[12] The Applicant said that in early December, he was approached by Mr Clarke in regard to his relationship with Mr Spiro. The Applicant said Mr Clarke told him he felt that they, the Applicant and Mr Spiro, needed to sit down and communicate more with each other to improve the site. The Applicant said Mr Clarke requested that each morning they sit down and discuss issues related to the site. The Applicant claims he complied with this request although, as the evidence unfolded today, there appears to be some concession that there were times when the Applicant did not attend meetings with Mr Spiro as had been requested.

[13] In terms of 18 December, turning to the more critical events, Mr Flavell has said that he arrived at work at 7.05. He said that within five minutes of being on site, he was called over by Mr Clarke to have a talk. He said they went to the coffee shop and sat down. He said Mr Clarke told him, “This arrangement isn’t working and I should start looking for other options.” The Applicant said he asked what that meant and he said Mr Clarke said he was coming in with wrinkly clothes and he was barely doing eight hours a day.

[14] I will not go through all of the evidence on that because there is not significant dispute in terms of the versions of the respective exchanges on 18 December. What is really important, I think, is what I derive from the evidence about what came out of that meeting. In any event, most of that version is set out in the statement of Mr Flavell and it is not largely contested, it seems to me, by Mr Clarke about the nature of that conversation. There was some discussion around the meal preparation, like lasagne, going back and forward and that gave rise to concerns in Mr Clarke’s mind about whether or not Mr Flavell would ultimately essentially make changes in the way the business operated that he wanted made.

[15] In terms of the sequence of events on that day, he continued to work until 8.20pm when he asked Mr Clarke if he could go home as he was upset and he did not want to be there “right now”, which was agreed. I have considered the evidence in the exchange of text messages between the Applicant and Mr Clarke that occurred between 18 December and 24 December. It is apparent that the Applicant was of the view that his job was in jeopardy, but his evidence was not that he believed that he had actually been terminated.

[16] Mr Flavell said today that he contacted the office of the Fair Work Ombudsman and was advised that if he had not been told that he was dismissed, that he should continue to report for work and do his job, and the evidence was that is what he did do and he continued to do on Thursday the 19th and Friday the 20th. He was not rostered to work on the weekend; and then again returned and worked on Monday the 23rd and Tuesday the 24th. The termination of the Applicant’s employment occurred effectively via a text message sent to the Applicant after the completion of his shift on 24 December.

[17] In terms of the Respondent’s position, I will not try and go through it in great detail for the purpose of this decision, but essentially the Respondent’s case is that which Mr Clarke has set out in his submissions and statements. These provided that while Mr Clarke was of the view that Mr Flavell was a competent chef and they had had a reasonably good relationship over a period of years, leading up to and during the engagement at the RACQ site, the relationship had been changing, that the demeanour of the Applicant had been changing, and that he was not willing to perform his role in a way that the business needed him to perform that role in order for the business to be profitable. Essentially, the Respondent was of the view that Mr Flavell was not cooperating with Mr Spiro particularly, and with Mr Clarke’s desire to make changes in the way the RACQ contract was being performed in order for it to be successful for the business.

[18] Mr Clarke’s evidence has been that he formed the view that the Applicant wanted to provide a service of a particular kind that, while of a good quality, was not suitable for the nature of what the business wanted to provide in order for it to be a success. Having listened to Mr Clarke today, I am inclined to accept that he genuinely held the view that Mr Flavell was resistant to wanting to make changes that Mr Clarke wanted. There was just a difference of view about some things, including the preparation of fresh food, and whether or not certain types of food could be reused the following day or not.

[19] There was some time spent today on the nature of the responsibilities of Mr Flavell in his role as head chef and the delineation between that role and the role that was intended to be fulfilled by Mr Spiro, and also the relationship of Mr Spiro with Mr Flavell. It is unfortunate that Mr Spiro was not here today to be able to give evidence about those issues and to be able to shed some light on things that have been said by Mr Flavell about that, and also claims by Mr Clarke, for the Respondent, about Mr Flavell’s resistance to cooperation. The fact that Mr Spiro was not here today does create a difficulty for the Respondent’s case.

[20] Getting to the heart of the issues, I will first deal with the jurisdictional one about whether or not the Respondent has complied with the Small Business Fair Dismissal Code. Mr Clarke has conceded today that, in his words, he had learned a lesson from what has happened. It appears there is some tacit acknowledgment that things could have been handled differently or better. I essentially have to decide if Mr Clarke, as the representative for the employer, gave Mr Flavell a reason why he was at risk of being dismissed and whether the reason was a valid reason, based on his conduct or capacity to do his job.

[21] On the evidence, I am not convinced that the exchange between Mr Flavell and Mr Clarke on 18 December fits the description of the language in the Code because perhaps the conversation was not so much intended to be a warning that Mr Flavell was at risk of being terminated because of his conduct or capacity. The evidence is not clear that it was communicated that way and that there was a specific risk to him being dismissed. It could have been inferred. It was possible you could draw that inference from the evidence that Mr Flavell and Mr Clarke gave about the conversation, but I am not satisfied that the nature of the exchanges were a warning in the sense of what a warning is for the purposes of the Code. It seemed to be it was more a conversation that the Respondent was raising concerns about the Applicant’s approach and whether or not the Applicant should consider whether it was in his interest to leave, whether it could have been a voluntary decision made by the Applicant rather than a warning that Mr Clarke was considering terminating him. That is the way the language came across.

[22] The next thing I need to consider is whether the employer provided Mr Flavell with an opportunity to respond to the warning and give him a reasonable chance to rectify the problem having regard to his response. That can involve, as the Code says, the employer providing additional training or ensuring the employee knows what the employer’s job expectations are. The immediate difficulty with that for the Respondent is that, at the beginning of the consideration, I have already said I am not convinced that what occurred on the 18th was a warning for the purposes of the Code. However, even if I was, there was not clear evidence of conduct between 18 and 24 December that would subsequently give rise to a justification for termination based on the warning.

[23] The evidence of the nature of the email exchanges from about 2.30pm on the afternoon of 24 December between Mr Clarke and Mr Flavell to my mind is really evidence of the Applicant raising concerns about issues, including about the way the site was being managed by the manager and not so much about him failing to perform his job in a particular way that would justify a dismissal based on a warning.

[24] At the same time, I am sympathetic to Mr Clarke in that I do not doubt that Mr Clarke wanted Mr Flavell to change the way he was doing his role as the head chef and that this was because of the financial performance of the site. The difficulty though is that I do not think Mr Clarke successfully communicated this in an effective way and in a way that would comply with what the Code requires.

[25] Whilst there was some evidence about issues of conduct or performance of the Applicant prior to the issues from the 18th moving forward, issues such as wearing a cap, whether or not his uniform was properly ironed or worn, the issues about whether he was or was not attending meetings with Mr Spiro, I do not think the evidence supports that there was a warning, that he were at risk of being dismissed because of those things so for those reasons, I also do not think that they could be relied upon to say the Code had been complied with.

[26] In my view, considering all of the material, what should have happened was that there should have been a meeting between Mr Clarke and Mr Flavell to address the matters that were the subject of the email exchanges on the afternoon of the 24th. It is clear from the evidence of Mr Clarke, he had arrived at a view that Mr Flavell had already made a decision about the future of his employment and he was really in a process of trying to gather evidence to use against Mr Clarke at some future point. I cannot say that the evidence satisfies me that that is in fact what he was doing. I know Mr Clarke felt that that could have been the case, but the evidence is not enough for me to be satisfied that Mr Flavell had given up on the relationship.

[27] My view, is the proper thing to have happened is that there should have been a meeting between Mr Clarke and the Applicant to go through those issues, but I do not miss the fact that Mr Clarke had concerns that he wanted the Applicant to change the way he was doing his job. Mr Flavell, to that point had not agreed to do that, but that was still a live issue. I do not think that the Respondent had got to the point where termination was justified. The issues should have been squarely dealt with at a meeting.

[28] Having decided that the jurisdictional objection has not been made out, I need to consider section 387. For the reasons that I have already given as to why I do not believe the Code has been met, I am also not satisfied there was a valid reason for termination at the point of the afternoon of 24 December. In terms of whether there was notification of that reason, again I am not satisfied there was a formal warning about potential for termination on the 18th. For those reasons, it follows logically that Mr Flavell was not given an opportunity to respond related to capacity or conduct that was the subject of a warning. Obviously there was not an opportunity for the Applicant to have a support person present for discussions relating to his dismissal because I do not think there was a meeting that was had specifically about that issue. Again I say for the purposes of s. 387(e), I am not satisfied there was a formal warning about that.

[29] In terms of the degree to which the size of the employer’s enterprise would be likely to impact on the procedures, there is no question this is a small business. It is a family business effectively. There is no internal human resources expertise. There is no evidence that there was someone with qualifications in that area that could have advised Mr Clarke about the correct way to go about dismissing the Applicant so to that effect, that is a factor which weighs in favour of the Respondent.

[30] In terms of section 387(g), the degree to which the absence of a dedicated human resources management specialist or expertise in the enterprise would be likely to impact on the procedures - for similar reasons I have set out, they have impacted clearly because had there been such expertise, it is unlikely that the process would have been conducted as it was.

[31] Having considered all of the factors under section 387, I have concluded that the dismissal was harsh, unjust or unreasonable and therefore unfair, but I now need to consider remedy. The Applicant has made clear he does not seek reinstatement so I do not need to turn my mind to the factors for considering that. I need to turn my mind to the factors in section 392, which deals with compensation.

[32] 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. There are a range of criteria I need to consider here. I need to take into account the effect of the order on the viability of the employer’s enterprise. There has been evidence today from Mr Clarke that this is a small business. There have been statements from Mr Clarke today that as a director of the company, the operator of the business, he has been under some personal financial strain and on occasion has been unable to effectively pay himself through the business, although he has not said that the business is in danger of failing, but I do need to take into account what has been said by Mr Clarke about that.

[33] In terms of considering the length of service, it was not short. There was the apprenticeship period and then a further several years as a full-time permanent employee. In terms of the remuneration that Mr Flavell would have received or would have been likely to receive if he had not been dismissed, this is a critical factor. On my view, the relationship between Mr Flavell, and Mr Clarke was under strain. I am satisfied on the basis of the evidence the relationship between the Applicant and Mr Spiro, as the manager of the site, was not good, and that, as I have already said, Mr Clarke had concerns about the way that the Applicant was performing his role. Having considered all of that, I am inclined to the view that there is a strong likelihood that the relationship was not going to last for a long time had it not been terminated on 24 December. I am inclined to the view that the relationship may have lasted perhaps another month and a half.

[34] In terms of mitigation by the Applicant, I am satisfied on the evidence that Mr Flavell has made genuine attempts to try and get employment for the period post the termination through Centrelink, through a range of other applications, so I am satisfied he has attempted to mitigate his loss. In terms of the amount of remuneration that Mr Flavell has earned during the period between the dismissal and the making of an order, the evidence is that Mr Flavell did not gain any meaningful employment until the middle of April this year and that even then, it was only on a temporary basis and less than full-time hours. I do note that there was a period of four weeks’ notice paid after the termination. In terms of any income likely to be earned by the person during the period between the making of the order and the payment of compensation, it appears to be that that is only likely at this stage to be less than full-time payment on a temporary basis.

[35] Having considered all of those things, I have to also consider whether or not the compensation should be reduced by any amount based on the conduct of Mr Flavell. As I have already said, I believe the termination was unfair but there was some evidence that there had been an earlier warning, conceded by Mr Flavell, about lateness. I am inclined to the view that there could have been more efforts on Mr Flavell’s part to build a communication with Mr Spiro that was operating more effectively. The evidence was that there had been attempts by Mr Clarke to get daily meetings happening between the Applicant and Mr Spiro to work through the issues of the running of the site. I am inclined to think that the Applicant could have done more to make that work than he did. For that reason, I am inclined to make a small reduction in the compensation order on the basis of that conduct.

[36] Having considered all of those things, I intend to issue an order that the Respondent pay compensation to the Applicant of an amount the equivalent of four weeks’ pay. That will be paid as a gross amount, taxed according to law. It is my intention to make an order that that payment be made within 28 days.

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