Mr Guohua Zhang v S & Q Asset Management Pty Ltd
[2025] FWC 463
•17 FEBRUARY 2025
| [2025] FWC 463 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Guohua Zhang
v
S & Q Asset Management Pty Ltd
(U2024/12249)
| DEPUTY PRESIDENT ROBERTS | SYDNEY, 17 FEBRUARY 2025 |
Application for an unfair dismissal remedy – whether Applicant dismissed by Respondent – no valid reason for dismissal – dismissal unfair – order for compensation appropriate in the circumstances
Mr. Guohua Zhang (Applicant) has applied to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (Act) for a remedy for what he alleges was his unfair dismissal by his former employer S & Q Asset Management Pty Ltd (Respondent).
The matter was listed for conference on two occasions. The Respondent did not attend on either occasion and did not file a response or provide any material in response to directions that were made for the filing of evidence. The matter has been determined on the basis of uncontested evidence provided by the Applicant.
When can the Commission order a remedy for unfair dismissal?
Section 390 of the Act provides that the Commission may order a person’s reinstatement, or the payment of compensation to a person if satisfied that the person was protected from unfair dismissal at the time of being dismissed and the person has been unfairly dismissed.
Section 382 provides that a person is protected from unfair dismissal if the person is an employee who has completed a period of employment of at least the minimum employment period and the person is covered by a modern award, an enterprise agreement applies to the person, or the person earns less than the high-income threshold. I am satisfied, that the Applicant is protected from unfair dismissal for the purposes of s.382.
Section 385 relevantly provides that a person has been unfairly dismissed if the Commission is satisfied of four matters: the person has been dismissed, the dismissal was harsh, unjust or unreasonable, the dismissal was not consistent with the Small Business Fair Dismissal Code (SBFDC) and the dismissal was not a case of genuine redundancy. For the reasons that follow, I have determined that the Applicant was unfairly dismissed and that the appropriate remedy is an order for compensation to be paid by the Respondent.
Background
The Applicant commenced his employment with the Respondent in December 2020. He was employed in a full-time capacity as a handyman/laundry staff at the Respondents premises. His contract of employment provided that he was to be paid in accordance with the Hospitality Industry (General) Award 2020.
The Applicant said that on 4 October 2024, he was presented with a new employment contract which contained a lower hourly rate, reduced hours and a change from permanent to full-time status. The new contract was with a different company called Windang Inn Hospitality Pty Ltd (Windang). The Applicant was uncomfortable with the proposed changes and refused to sign the contract. He was instructed to then stop working immediately and his employment came to an end on that day.
Was the Applicant dismissed by the Respondent?
The Applicant’s evidence was that the text exchange that resulted in his dismissal occurred between himself and Ms. Wang. The Applicant said Ms. Wang was a director of Windang but that she was also appointed as the general manager of the Respondent in February 2024 and was the manager of the Respondent on 4 October 2024 when his employment was terminated. The Applicant said Ms. Wang was responsible for the administration of his payslips while he was employed by the Respondent. The Applicant provided payslips showing that he was paid by the Respondent until the final payslip which he received which, although in virtually identical form, was issued by Wingdang. The Applicant said that aside from the communication between himself and Ms. Wang on 4 October 2024, there was never any discussion with him about his employment transferring to another company. The employment contract between the Applicant and Wingdang was never signed. On the basis of the evidence I have, I conclude that the Applicant was employed by the Respondent until 4 October when he was terminated by the Respondent through Ms. Wang in her capacity as general manager of the Respondent.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the Act sets out the matters that are to be considered in determining whether the Commission is satisfied that the dismissal was harsh, unjust or unreasonable. It provides 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 reason; and
(c)whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d)any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e)if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f)the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g)the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
387(a) - Valid reason for dismissal relating to capacity or conduct
The Applicant provided details of a text exchange between himself and Ms. Wang that took place at the time of his dismissal. The texts indicate that unless the Applicant accepts the revised arrangements no further working hours would be offered next week. The Applicant was also instructed to hand in all keys to the front desk and said he was told not to come to work.
There was no evidence of any valid reason for the Applicant’s dismissal related to his capacity or conduct. I conclude that there was no such reason.
387(b) - Was the Applicant notified of the valid reason?
Proper consideration of s.387(b) requires a finding to be made as to whether the applicant “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[1] In this case, as I have concluded that there was no valid reason, I also conclude that the Applicant was not notified of the valid reason.
387(c) - Was the Applicant given an opportunity to respond to any reason related to their capacity or conduct?
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[2]
In this case there was no reason related to capacity or conduct given to the Applicant and therefore no necessity for the Applicant to be given an opportunity to respond to such reason or reasons.
387(d) - Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
There was no unreasonable refusal in this instance because there was no request for a support person to attend discussions relating to dismissal. There were no discussions about the dismissal before it occurred.
387(e) - Was the Applicant warned about unsatisfactory performance before the dismissal?
The Applicant was not dismissed for reasons relating to performance. In any event the Applicant gave evidence that he had no previous warnings at any time during his employment. I do not regard this as a relevant factor in the present case.
387(f) and (g) - To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal and to what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
There was no evidence as to the size of the Respondent’s enterprise and no evidence as to whether the Respondent had any dedicated human resource management specialists or expertise. I cannot be satisfied that these factors had any impact on the procedures followed in effecting the dismissal or explain or mitigate what was a very poor procedure that resulted in the Applicant losing his employment.
387(h) - What other matters are relevant?
I do not consider that there are any other additional factors that need to be taken into account under this heading.
Conclusion
Having regard to matters referred to above, I am of the view that the Applicant’s dismissal was harsh, unjust and unreasonable and that the dismissal was unfair.
Remedy
The Applicant sought compensation rather than reinstatement. The Commission can only order the payment of compensation where it is satisfied that reinstatement is inappropriate and it considers that such an order is appropriate in all the circumstances.[3]
I am satisfied that it is appropriate in the circumstances to make an order for compensation in lieu of reinstatement. In doing so, I am required by s.392 to take account of all of the circumstances of the case, including the matters listed in subsections (2)(a) to (g) of that section. I have taken those matters into account. I note in particular that there was no evidence as to the effect of any order on the viability of the Respondent business. I also note the length of the Applicant’s service which is a reasonably lengthy period. The Applicant did not provide any evidence to show that he had attempted to mitigate any loss occasioned by the termination of his employment or that he had earned any remuneration from employment or other work since his termination. The Applicant is 60 years of age and lacks fluency in the English language which may have an impact on his future employment prospects.
The well-established approach to the assessment of the quantum of compensation under s.392 of the Act is to apply the “Sprigg formula”. That formula is derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket.[4]
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 5: Assess the figure against the compensation cap.
I am of the view that in the absence of the termination, the Applicant would have remained employed by the Respondent until at least the date of the last conference in the Commission which was held on 16 January 2025. This is a period of 15 weeks. I would make a deduction in an amount of 20% on the basis that there was no evidence that the Applicant had attempted to mitigate his loss.
In that event it is appropriate to make an order that the Respondent pay the Applicant an amount calculated as follows:
15 weeks wages being 5 days per week (38 hours) at $35 per hour = $19,950 (gross) less 20% ($3,990)
Total - $15,960 (gross) less appropriate taxation remittances.
An order reflecting this outcome will be published separately with this decision.[5]
DEPUTY PRESIDENT
Appearances:
Mr Wei for the Applicant.
Hearing details:
In-person at the Fair Work Commission Sydney at 10am AEDT on Thursday, 16 January 2025.
[1] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[2] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[3] Section 390(3).
[4] (1998) 88 IR 21.
[5] PR784411.
Printed by authority of the Commonwealth Government Printer
<PR784410>
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