Mr John Lanzafame v Artisan People Pty Ltd
[2023] FWC 362
•1 MARCH 2023
| [2023] FWC 362 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr John Lanzafame
v
Artisan People Pty Ltd
(U2022/5713)
| DEPUTY PRESIDENT CROSS | SYDNEY, 1 MARCH 2023 |
Application for an unfair dismissal remedy
Mr John Lanzafame (the Applicant/Mr Lanzafame) made an application to the Fair Work Commission (the Commission) pursuant to s.394 of the Fair Work 2009 (Cth) (the Act) for an unfair dismissal remedy (the Application) in relation to his dismissal from employment with Artisan People Pty Ltd trading as Visco Foods (the Respondent/Visco). The Application was lodged with the Commission on 25 May 2022.
I conducted a Directions Hearing in this matter on 5 September 2022. At the Directions Hearing, directions were issued for the filing of materials by the parties (the Directions). The Applicant sought to rely on the following documents in the matter:
The Form F2 – Unfair Dismissal Application together with Annexures dated 25 May 2022;
The Applicant’s Outline of Submissions dated 4 October 2022;
The Statement of John Lanzafame together with Annexures, dated 4 October 2022; and
The Statement in Reply of John Lanzafame dated 8 November 2022.
The Respondent sought to rely on the following documents in the matter:
The Statement of Marco Canegallo dated 1 November 2022;
A statement in the form of comments made by Paul Baldini in relation to the Witness Statement of Applicant dated 31 October 2022;
The Statement of Filippo Vincenzi dated 31 October 2022;
A statement in the form of an email from Ms Taumalolo to Mr Baldini dated 6 June 2022;
The Statement of Eliza Hetherington dated 5 June 2022;
A statement in the form of an email from Connie Giannaros, Mr Canegallo and Mr Baldini dated 20 June 2022; and
A Statement of Angela Hird dated 5 October 2022.
At the hearing on 30 November 2022, the Applicant was represented with permission by Sasphire Legal, and the Respondent was represented by Mr Canegallo of the Respondent. The Applicant, Mr Canegallo, Mr Baldini, Ms Taumalolo, Mr Vincenzi and Ms Giannaros were the only witnesses required for cross examination.
Background Facts
The Applicant commenced full time employment with the Respondent in or around March 2019 in the position of Brand Ambassador on a salary of $104,000.00 per annum. It is apparent that the Applicant’s role also involved duties of a Sales Representative, and he secured and processed orders from customers of the Respondent. Previously, the Applicant worked as a Chef, and Restauranter. The Applicant was employed pursuant to a contract (the Contract) that listed one of his responsibilities and duties as:
“Use your best endeavours to promote the interests of the Company and devote the whole or your attention, time and ability, to the performance of your duties during normal working hours and at such other times as may be reasonably necessary”
The Contract also contained a Termination clause that included the following:
(c) The Company may terminate your employment without prior notice, and without making any further payment beyond the amount of remuneration accrued to the date of such termination. if you commit any serious misconduct or gross negligence in the discharge of your duties. including but not limited to·
(i)wilful or deliberate behaviour that is inconsistent with the continuation of this Contract of employment;
(ii)conduct that causes serious and imminent risk to the health or safety of a person;
(iii)conduct that causes serious and imminent risk to the reputation. viability or profitability of the Company's business;
(iv) failure to comply with a lawful and reasonable direction or the Company:
….
The Contract also contained a Conflict of Interest clause as follows:
24. CONFLICT OF INTEREST
(a) You must. at all times, act in the best interests of the Company.
(b) You should, at all times, endeavour to avoid situations where a conflict of interest may arise between your activities as an employee of the Company and your dealings with other parties Should you potentially be in such a situation, you must
(i)disclose the conflict of interest to the Company immediately; and
(ii)take action to avoid the conflict of interest, unless you have obtained the written consent of the Company.
(c) You must declare any interest in any business of any kind in which you may potentially be in conflict or in competition with the business of the Company.
(d) This clause prevents you from working for any other company (as either an employee, director, agent, shareholder, contractor or in any other capacity) while you are employed by the Company, unless you have the prior written approval of the Company.
The Respondent carries on a business that sources and supplies food to caterers, restaurants, hotels, and other hospitality businesses. In the role of Brand Ambassador, the Applicant sourced, developed, and maintained relationships within that industry.
On 17 May 2022, by letter of the same date (the Termination Letter), the Applicant was summarily dismissed by the Respondent, though it was agreed in the proceedings that he received three weeks pay in lieu of notice. The relevant parts of the Termination Letter set out five allegations and findings, as follows:
i. It is alleged that on 22nd of December 2020 you wilfully and deliberately sent Priscilla Taumalolo a very arrogant and abusive email. Specifically, you wrote to Priscilla - a colleague of yours that kindly asked you for information in order to make sure a customer was getting the right product an email saying: "Don't ever talk to me, don't ever email me. Cause your nothing and yes you are useless and a suck arse". Such conduct is inconsistent with the continuation of your contract of employment. (the Taumalolo Email and Conduct)
ii. It is alleged that on 1st of April 2022, you sent a series of text messages to a colleague of yours, Filippo Vincenzi, first insulting him and then threatening him and his son. Such conduct is considered serious misconduct under the Fair Work Regulations and has the potential to be considered a criminal offence. (the Vincenzi Message and Conduct)
iii. It came to Paul Baldini's attention on 1st of April 2022 that you were working as a contractor for the Brighton Gold Club, which is a Visco customer. Specifically, it is alleged that you have been contracted by the customer, in the role of executive chef, working 2 days a week to fix issues in their kitchen. Following the conversation with Paul Baldini, you threated Filippo, through messages on his phone (see point ii) and verbally, and in one of those messages you confirmed you were contracted as a consultant there. Such conduct is a serious breach of your employment contract. clause 24.d. Moreover, this conduct has the potential to harm the reputation of the Company. (the Work at Brighton Golf Club)
iv. It is alleged that on the 9th of July 2020, the 22nd of December 2020, the 19th of May 2021, the 2nd of June 2021, the 4th of January 2022, the 15th of February 2022, the 3rd of May 2022, and finally on the 9th of May 2022 you failed to comply with Company policies and procedures. Specifically, it is alleged that you didn't use company's forms to put orders through and you failed to fill out the credit application form to register a new customer account, which is a very important step to make sure the company gets paid. Such conduct is considered serious misconduct under the Fair Work Regulations, a breach of your employment contract (clause 19.c.iv and v) and has the potential to cause risk to the viability or profitability of the employer's business. Moreover, in almost all those instances, you demonstrated a wilful and deliberate behaviour that is inconsistent with the Company values, disrespectful towards your colleagues and your manager, using a very abusive language and arrogant tones (see the attached documents). This is another breach of your employment contract (clause 19.c.i.). (the Ordering Policy)
v. It is alleged that on other several occasions you performed contractor activities in your personal capacity during working time (pizza classes or consultancy work). This is in breach of your employment contract (clause 19.c.i.) that prevents you from working for ANY other company (as a contractor or in any other capacity), while you are employed by the Company. Such conduct has the potential to damage the reputation and the profitability of the Company. (Other Employment)
Taumalolo Email and Conduct
The Applicant admitted that he engaged in an inappropriate email exchange with Ms Taumalolo on 22 December 2020. That exchange was as follows:
From: John Lanzafame
Sent: Tuesday, December 22, 2020 8:44:02 AM
To: Priscilla Taumalolo
Subject: Re: Priscilla job specDon’t ever talk to me
Don’t ever email me
Cause your nothing
And yes your uselessAnd a suck arse
Thanks
John Lanzafameon 22 Dec 2020, at 8:42 am, Priscilla Taumalolo wrote:
WOW, you're one to talk!
Don’t come at me with that John especially when you don’t know what you’re talking about.
From: John Lanzafame
Sent: Tuesday, December 22, 2020 8:37 AM
To: Priscilla Taumalolo
Subject: Re: Priscilla job specThat’s the problem you don’t know your job
You duck at itThanks
John Lanzafame
In his evidence the Applicant conceded the language used in the email exchange, while regrettable, was typically used language at the Respondent and language often used in a kitchen.[1] I reject that evidence and prefer the evidence of Ms Taumalolo who said upon reading the email:[2]
I was quite insulted. I was insulted. I felt degraded and I felt bullied.
The Taumalolo Email was not the only instance of the Applicant abusing another staff member. In around March 2021, after a client account, Pen Catering, was allocated by Mr Baldini from the Applicant to Ms Giannaros, the Applicant contacted Ms Giannaros by telephone and yelled:
“You’re a fucking idiot, a fucking idiot.”
Ms Giannaros described the effect of the comments on her as follows:[3]
In my whole professional career – I'm 50 years old, I just turned 50 – I've never spoken to by a colleague or a gentleman by that sort. So I was quite shocked. The phone hung up, he hung up on me. So this did not happen in the workplace, it happened while I was on the road. I was in shock. I drove straight to Visco. I was in tears. I couldn't believe why someone who is so quite well know would be threatened that I'd be taking over one account at that time so that's when things went pear-shaped.
Ms Giannaros did not report the Applicant’s comments until after the Applicant’s employment had been terminated, and over a year after they were made.[4]
Vincenzi Message and Conduct
On 1 April 2022, a text exchange occurred between the Applicant and Mr Vincenzi in the following terms:
Applicant:
Fri, 1 Apr, 1:25pmBy the way I don’t work at the club I consult
And why would you tell Paul
You licking his arse please stay out of my life you looser
Mr Vincenzi:
Fri, 1 Apr, 3:50pmYou start call me superstar , everytime customer call me cos doesn’t want to deal with your arrogance and ego you blame me , you don’t go to the customers they call Paul he send there then you get mad to me! Sorry but what do you expect from me… To be nice or respect you ! Chi semina vento raccoglie tempesta
Applicant:
Becarefull
Mr Vincenzi:
threats… I keep the messages just in case tomorrow happen something to me or my son
Applicant:
The Respondent (specifically, through Mr Baldini), was made aware of the above text message exchange on or around the date it occurred, but took no action in response to it.[5]
Work at Brighton Golf Club
The Respondent further alleged that the Applicant was working in the role of executive chef at Brighton Golf Club while employed by the Respondent, and that constituted a contravention of clause 24(d) of the Contract.
The height of the evidence substantiating the Applicant working at the Brighton Golf Club was hearsay evidence attributed to an un-named “Chef” at the Brighton Golf Club who said the Applicant was “his boss”.
The Respondent was specifically aware from as early as 1 April 2022, of the allegation that the Applicant was working at the Brighton Golf Club, but did not raise it as an issue until the Termination Letter was issued.
Ordering Policy
It became apparent in the hearing of the matter that the Applicant’s use, or misuse, of the Respondent’s ordering system was a source of continual conflict between the Applicant and the Respondent. In his statement, the Applicant described his difficulties with the Respondent’s ordering system as follows:
38. The main issue that contributed to the difficulties in the office was the inefficient and extremely time-consuming ordering system. There was no online ordering system which meant that I would manually have to fill out an order form for each customer that I met with, scan it and email it to the office. As I was often on the road, this system was extremely clunky and impracticable to manage.
39. Additionally, since my customers were mostly chefs, the orders I received often consisted of vague text messages from our customers asking for repeat items.
40. The order forms that I was expected to fill out for each customer were approximately 5-10 pages long and the items were not categorised in a clear way. For example, if one type of cheese was on the first page, another type of cheese could be on the last page. This made the process of filling out these forms extremely inefficient.
41. Since my role required me to drive around every day and meet with customers, this meant that the only time I was able to complete the orders was at night after I finished my workday. In order to complete these forms, I had to work for a few hours after a full day of meeting customers. Often this meant staying up late at night filling out orders for our customers.
I prefer the evidence of Mr Canegallo, Mr Baldini and Ms Taumalolo in relation to the ordering system, and find that the Applicant’s evidence above to be replete with exaggeration and not a true statement as to the operation of the ordering system.
I accept, and do not consider it to have been put in issue, that the Applicant’s computer literacy was non-existent.[6] His assertions that he would have been assisted by the provision of an app on his computer were false, and contrary to the balance of the evidence. In order to assist the Applicant, the Respondent provided him with hard copy order forms that were customised to the order history of each particular customer (the Order Forms). Nonetheless, except for two or three occasions,[7] the Applicant did not fill out the Order Forms, instead just forwarding whatever communication, usually email, had been received from the customer. Examples of those order forms are annexed to this decision and marked “Annexure A”.
The Applicant described the completion of manual orders as “… a five to six hour ordering job, because of the amount of customers I had”.[8] The Applicant was challenged on that evidence as follows:[9]
So, you just declare that you didn't want to spend five, six hours a day processing orders. Can you let me know how many orders per day you were processing?‑‑‑The five, six hours that you're talking about is usually after 7.00 pm and the orders – my orders all came through between 10.00 pm and 2.00 am in the morning, cause that's the time that people place orders. How many orders a day? They varied from, my lowest probably being six orders a day and my highest being maybe 30, which varied.
They're the orders in a day?‑‑‑Yes.
It is simply inconceivable that even had the Applicant completed the Order Forms, and he says he did only on two or three occasions, that it could have taken anywhere near the time asserted by the Applicant. I questioned the Applicant on this issue and received the following responses:[10]
So you would receive an order from il Buco Kitchen and you say it would often happen after service?‑‑‑Yes.
How would you then place that order with the respondent?‑‑‑I would send a text - email to orders, and then that was stopped and then it was an email to Paul.
Why didn't you fill out the forms that you say at paragraph 40 of your statement were five to 10 pages long?‑‑‑Because this is now - this would be now any time between 10 pm and 2 am in the morning.
How many times did you use the forms?‑‑‑Twice, three times maybe.
And how did you lodge them on those occasions?‑‑‑The same, I took a photo - - -
By phone?‑‑‑By phone.
Now, if you look at this il Buco Kitchen order form it's two and two-thirds pages long?‑‑‑Correct.
Now, this is a form that is - am I correct in understanding this is a form that is specific to that particular customer, because this is prior orders that they might have made?‑‑‑Correct.
Because then if we look at for example page 150 that's Li'l Darlin which is less than two pages long. It has different products. They would be products that had previously been ordered by that particular establishment, correct?‑‑‑Correct.
And you were asked some questions about why it is that you filled out this, page 149, and I think this is in relation to Li'l Darlin - no, this is Gino's Kitchen?‑‑‑That was - he changed names halfway, the same customer.
But you would say, would you not, that when you wrote 2 by 5 litre green detergent there would be no difficulty working out what the green detergent was, because at the bottom of the first page at page 150 it says 5 litre green detergent. But you wouldn't fill out this specific form in relation to that customer, you would simply do an email?‑‑‑That email on page 149 is a typical way that I would receive all my orders. That is very typical. So I would have received that on Tuesday night - no, actually this customer I used to go see every Tuesday without fail, otherwise he wouldn't give - most of these customers are like 50, 60 year old chefs that own their own business. They're not going to send emails, they're not going to conform to an order sheet. The idea of this order sheet that they issued me was to give to the customer and they would email or scan and give me that copy and I could give it, but most of these customers refused that, they just, 'No, this is the way I do it. If you don't want to serve me I don't serve', and - - -
But you wouldn't fill out the form either?‑‑‑No, I wouldn't.
Except for two or three occasions?‑‑‑And they made mistakes about it, yes.
You had to fill out the form, for example in relation to Gino's/Li'l Darlin to enter what is approximately 12 entries, would take about one minute?‑‑‑If you actually look at this I had one minute plus the other 10, 15 customers that I had to do, yes.
So that's 10, 15 minutes?‑‑‑An hour.
Well, your estimates previously in your evidence have been significantly greater than that?‑‑‑When I had the big days, yes, it would take longer. That's my time with my son and my daughter also talking to me, which I think I'm allowed to have some family time at that time of night.
I am simply directing my attention to how long it would take to fill out a form with 12 entries in a form that is customer specific. It seems to me from my review, and tell me if I'm wrong because I am just trying to understand this, I need to understand this, it seems to me that each particular customer had a form that had their previous orders in it so that there could be an understanding, it's customised to each customer?‑‑‑No, no, I get it. You're correct, yes.
It is apparent from the evidence in this matter that the Applicant did not comply with the ordering system of the Respondent, and almost never completed Order Forms. That non-compliance created friction with staff in the Respondent’s office, an example of which was the Taumalolo Email. However, equally, the Respondent did not seek to discipline the Applicant regarding ordering policy issues. In cross-examination, Mr Baldini conceded:[11]
No, but surely a prudent manager would be investigating the serious issue of rude communications and threats of violence?‑‑‑There was no physical contact or violence. You're talking verbally. Yes, sometimes things were said, not in front of me but, so it's all hearsay on both sides sometimes.
So you never thought to investigate?‑‑‑Well, I spoke to everyone.
And you never thought to counsel?‑‑‑I'm not a counsellor.
If the issues were sufficiently serious and if you believed them to be, you didn't think to issue any warnings?‑‑‑I did warn John a few times, I said, 'John, careful how you treat staff in the office.'
I'll rephrase. You didn't feel it prudent to issue any formal warnings rather than some off-the-cuff verbal remark?‑‑‑Well, I didn't think it was that necessary to go that far.
You didn't think it was that serious?‑‑‑Yes.
Other Employment
The issue of other employment rose to prominence on 9 May 2022, when the Applicant sent a request to Mr Baldini for equipment to be supplied for pizza making classes at Doltone House. The Applicant was advised that such work was a breach of clause 19.1 of the Contract. Mr Baldini advised the Applicant by text “If you do his pizza classes we are finished and I mean it”.
In the hearing the Applicant conceded that he performed work for others approximately twice a month, and stated that such work was performed pursuant to an agreement with Mr Baldini to supplement his income to increase it to $2,000 net per week.
The Termination
As noted above, on 9 May 2022, Mr Baldini advised the Applicant by text “If you do his pizza classes we are finished and I mean it”. The Applicant advised Mr Baldini that he would not proceed with the pizza class at Doltone House. Approximately 30 minutes later, the Applicant sent through an email order to Mr Baldini for another customer. He received a response from the office email stating that the order would not be completed until orders were submitted on the correct form.
Later on 9 May 2022, Mr Baldini and the Applicant had a telephone conversation. The Applicant states Mr Baldini said “Don’t bother coming back tomorrow. You’re out of here”. Mr Baldini says the Applicant abused him, said he was “done”, and hung up.
Approximately one hour after the above conversation, Mr Baldini sent a message to all the Applicant’s customers saying he was on “leave” and orders should be sent to Mr Baldini instead.
The Applicant then sent a message to his customers to tell them that he no longer worked at the Respondent and that they should send their orders to Mr Baldini. Later that day, the Applicant sent a text message to Mr Baldini asking if he could use the company car for an extra day as he had to get his car out of storage and the company car was booked for new tyres that morning. He did not receive a response and returned the company car to a workshop on or about 11 May 2022.
On 12 May 2022, the Applicant received a payslip that included an entry for termination pay. Mr Baldini claimed that the termination payment was only made after receipt of a series of text messages in which the Applicant sought to be paid the money that he was owed.
On 13 May 2022, Mr Baldini sent the Applicant a text message stating:
No one dismissed you from work. All I have done is put you on leave until things are resolved as you refuse to follow company procedures
On 17 May 2022, the Applicant’s solicitors wrote to the Respondent asserting dismissal on 9 May 2022, and requesting provision of records and payment of entitlements. Later on 17 May 2022, the Applicant received the Termination Letter.
On 25 May 2022, the Applicant commenced unfair dismissal proceedings against the Respondent.
Shortly after his employment was terminated, the Applicant commenced new employment on an annual salary of approximately $5,000.00 less per annum.
Applicant’s Submission
The Applicant submitted that as he was summarily terminated by the Respondent for alleged serious misconduct, the onus rests on the Respondent to establish that it had a valid reason to terminate the employment, and while the standard of proof remains the balance of probabilities, satisfaction “should not be produced by inexact proofs, indefinite testimony, or indirect inferences' or 'by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion”.[12]
The Applicant noted the Respondent’s case rests on a number of instances of what were said to constitute serious misconduct, none of which were put to the Applicant prior to the termination, and a number of which occurred well before termination.
The Applicant noted that the Respondent had further filed evidence that questioned the Applicant’s performance at work, however, the evidence given by Mr Canegallo in the Hearing confirmed that the termination did not occur for performance reasons, and so the evidence given questioning the Applicant’s performance should be given no weight by the Commission.
The Applicant submitted the evidence of Ms Hetherington and Ms Hird lacked a sufficient level of particularity and were “a flimsy attempt to besmirch the Applicant’s reputation”. Further, a number of the Respondent’s witnesses, particularly Ms Taumalolo, testified to a number of further allegations in relation to the Applicant’s conduct that were never raised during the Applicant’s employment, the termination process, in the Respondent’s Form F3 Response to the Application, or even in the Respondent’s evidence filed on 1 November 2022. The Applicant alleged that evidence was strategically raised by the Respondent at such time where it would be impossible for the Applicant to respond to those allegations, and it would be manifestly unfair for those allegations to be relied upon when determining whether there was a valid reason for dismissal. The Applicant further submitted that evidence should be given no weight by the Commission.
Regarding valid reason, the Applicant referred to the criteria outlined in s.387 of the Act. While the Applicant freely admitted to wrongdoing in relation to the Taumalolo, Vincenzi and Giannaros incidents, the Applicant submitted that none of these actions, either individually or collectively, constituted a valid reason for termination, and certainly did not amount to serious misconduct. The Respondent’s attempt to characterise those actions as serious misconduct was inconsistent with the fact that the Respondent was aware of those interactions for a significant amount of time, and only chose to raise those issues in May 2022.
Regarding the allegation that the Applicant was employed by the Brighton Golf Club as its Executive Chef while employed by the Respondent, in breach of his employment contract, the Applicant submitted that the only evidence that had been provided was the hearsay evidence of Mr Vincenzi, which should be given no weight by the Commission.
The Applicant submitted that Mr Baldini’s management approach involved ignoring workplace conflicts rather than addressing them and taking appropriate action with respect to investigating, counselling, and taking disciplinary action as appropriate.
The Applicant submitted that the allegations raised by the Respondent with respect to the use of the Order Forms was inconsistent with actual practice, stating that the Applicant submitted order forms in shorthand email consistently throughout his employment and the Respondent had never formally raised this as an issue prior to sending the termination letter to the Applicant.
The Applicant submitted that while he had admitted to the use of bad language on certain occasions in the workplace, and has acknowledged that his choice of language could have been wiser, the use of swear words within the Respondent’s workplace had long been tolerated and had not been the subject to disciplinary action. The Applicant referred to the decision of the Full Bench in Linfox Armaguard Pty Ltd v Symes.[13]
The Applicant submitted that the termination of the Applicant’s employment was spiteful and capricious and was ultimately carried out by Mr Baldini in a rash manner and without any forethought. While the Applicant conducted himself inappropriately on isolated occasions, it was overly harsh for his employment to be terminated in relation to these incidents, particularly in circumstances where the incidents occurred months or years prior and the Respondent took no action regarding those incidents at the times they occurred, despite having knowledge of at least some of the incidents.
The Applicant submitted further that even if the Commission found that there was a valid reason for dismissal, it ought to find that the dismissal was nonetheless harsh, unjust or unreasonable taking into account the other considerations prescribed by section 387 of the Act. The termination took place by telephone on 9 May 2022, without prior warning or notification of the reasons for dismissal, and there was no opportunity to respond to these reasons.
With respect to subsections 387 (f) and (g) of the Act, the Applicant submitted the Respondent is a sizeable entity with dedicated HR personnel, and ought to have followed a much higher standard of procedure in effecting the termination of the Applicant’s employment.
On the matter of remedy, the Applicant submitted reinstatement was inappropriate in the circumstances, and the Applicant sought an order for compensation pursuant to section 392(1) of the Act. The Applicant noted that in his opening on the first day of the Hearing, the Commission was advised that the Applicant expected that he would have remained in employment with the Respondent for a minimum of one year. That was amended in closing submissions and, given the Applicant’s health concerns, it was submitted that the Applicant had intended to continue to work at the Respondent until retirement. The Applicant submitted that the maximum amount of compensation payable should be awarded.
Respondent’s Submission
The Respondent submitted the Applicant was terminated on 17 May 2022, not 9 May, and the Applicant was saying that he didn't want to come back to the office.
Regarding other work, the Respondent submitted that if the Applicant was being paid, he was working.
Regarding the dismissal, the reason why the Applicant was dismissed on the 17 May 2022 by email was because Mr Canegallo does not live in Sydney.
Turning to valid reason, in consideration of the gravity of all the matters reported regarding the conduct of the Applicant, it was more than fair to terminate the contract.
Mr Canegallo submitted on behalf of the Respondent that his first duty in the company was to preserve the safety and the health of all his employees. When employees come to him and advise they have had to go to a Counsellor, that was not good, and was not something he could tolerate.
Mr Canegallo conceded on behalf of the Respondent that while he might not have “followed procedure to the letter”, he was 100% sure he had made the right choice for his employees and the Company in dismissing the Applicant.
Consideration
(a) Preliminary Matters
I am satisfied that the Applicant is protected from unfair dismissal. The dismissal
was not a redundancy and the Respondent is not a small business such that the Small Business Fair Dismissal Code does not apply. Further, the application was made within the time limits prescribed by the Act.
I am also satisfied that the Applicant was dismissed from his employment. While there is some confusion whether the Applicant was terminated on 9 or 17 May 2022, and I consider termination was effected by the Termination Letter on 17 May 2022, nothing of substance turns on which date termination occurred as I consider the termination of the Applicant was at the initiative of the Respondent.
In determining if the Applicant was unfairly dismissed it is necessary to determine if his dismissal was harsh, unjust or unreasonable. Section 387 of the Act sets out those matters to be considered by the Commission.
Section 387 of the Act states:
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.”
(b) Valid Reason for the Dismissal and Severity of Misconduct (S.387(a) and (h))
To be a valid reason, the reason for the dismissal should be sound, defensible or well founded and should not be capricious, fanciful, spiteful or prejudiced. However, the Commission will not stand in the shoes of the employer and determine what the Commission would do in the same position.
In Sydney Trains v Gary Hilder[14] (“Hilder”) the Full Bench summarised the well-established principles for determining such matters:[15]
“The principles applicable to the consideration required under s 387(a) are well
established, but they require reiteration here:(1) A valid reason is one which is sound, defensible and well-founded, and not
capricious, fanciful, spiteful or prejudiced.(2) When the reason for termination is based on the misconduct of the employee the
Commission must, if it is in issue in the proceedings, determine whether the conduct
occurred and what it involved.(3) A reason would be valid because the conduct occurred and it justified termination.
There would not be a valid reason for termination because the conduct did not occur or
it did occur but did not justify termination (because, for example, it involved a trivial
misdemeanour).(4) For the purposes of s 387(a) it is not necessary to demonstrate misconduct
sufficiently serious to justify summary dismissal on the part of the employee in order to
demonstrate that there was a valid reason for the employee’s dismissal (although
established misconduct of this nature would undoubtedly be sufficient to constitute a
valid reason).(5) Whether an employee’s conduct amounted to misconduct serious enough to give rise
to the right to summary dismissal under the terms of the employee’s contract of
employment is not relevant to the determination of whether there was a valid reason for
dismissal pursuant to s 387(a).(6) The existence of a valid reason to dismiss is not assessed by reference to a legal right
to terminate a contract of employment.(7) The criterion for a valid reason is not whether serious misconduct as defined in reg
1.07 has occurred, since reg 1.07 has no application to s 387(a).(8) An assessment of the degree of seriousness of misconduct which is found to
constitute a valid reason for dismissal for the purposes of s 387(a) will be a relevant
matter under s 387(h). In that context the issue is whether dismissal was a proportionate
response to the conduct in question.(9) Matters raised in mitigation of misconduct which has been found to have occurred
are not to be brought into account in relation to the specific consideration of valid reason
under s 387(a) but rather under s 387(h) as part of the overall consideration of whether
the dismissal is harsh, unjust or unreasonable.”
The reasons for dismissal relating to working at the Brighton Golf Club and other employment did not, in the circumstances, constitute valid reasons for dismissal. Regarding the Brighton Golf Club, the evidence said to substantiate the Applicant working at the Brighton Golf Club was hearsay evidence attributed to an un-named “Chef”, who said the Applicant was “his boss”. I am unable to find that conduct occurred.
Regarding other employment, while the Applicant conceded that he performed work for others approximately twice a month, and there was a clear provision in the Contract regarding other work, the issue of other work performed outside normal work hours was never an issue until 9 May 2022. While the conduct occurred, it did not previously concern the Respondent, and it did not justify termination.
The reasons involving the Taumalolo Email, the Vincenzi Message, the comment to Ms Giannaros and the Ordering Policy, however, did occur and could in no way be described as trivial.
I observed the Applicant, Mr Baldini, Ms Taumalolo, Ms Giannaros and Mr Vincenzi give evidence and formed the strong conclusion that the Applicant was a disruptive influence within the Respondent due to his resistance to comply with the Ordering Policy (which had been amended specifically for the Applicant to the provision of pro-forma order forms for each customer), and his abrupt and offensive communications with other staff. That disposition and conduct can, by way of example, be borne out by an email from the Applicant to the Sydney office on 5 January 2022, regarding a tomato delivery to a Pizzeria. The Applicant wrote:
Since you asked me like that
No chance
First and fore most I’m a chef
And I always will be
I’m no office person
I have given you all the information 3 timesSpeak to management and sack me
Contrary to the Applicant’s submission, the Respondent’s workplace was not one that tolerated the use of robust language. The effect on Ms Taumalolo of the email she received and her general dealings with the Applicant, which I accept as truthful, were described by her as follows:[16]
It was a very distressing time and I had to talk to somebody. So I through my church services enlisted the help of a counsellor just to have someone to talk to just about everything that I had been feeling because I started feeling as though I was at fault and that this was something that I was – was it something that I was bringing to the table, was it something that I was doing, despite every effort to try and be cordial and courteous? It just wasn't reciprocated, you know? Sometimes John would reply and it was good and then other times nothing, and it was just – it was like a push-and-pull effect but I felt like it was constantly me having to push to try and get an answer of out him to clarify something, which did lead to distress and just a very difficult time. I couldn't sleep for probably about the whole year to 18 months.
While the above evidence was made in response to questions in examination in chief, I do not accept the submission that the Applicant was precluded from responding to that or any other evidence that fell in examination in chief of any of the Respondent’s witnesses. I also specifically reject the submission that such evidence “was strategically raised by the Respondent at such time where it would be impossible for the Applicant to respond to those allegations”, as submitted by the Applicant. The Respondent was not represented at the Hearing of the matter and Mr Canegallo simply attempted to bring relevant matters before the Commission, while also where appropriate making candid concessions regarding procedural fairness.
The evidence of Ms Giannaros, as outlined above, and Mr Vincenzi, who gave evidence regarding his concerns and reporting the threat he received to the Police,[17] which I accept, further outlined the gravity of the Applicant’s conduct. The Applicant’s conduct was causing serious and imminent risk to the health of his co-workers. It was also wilful and deliberate behaviour to not comply with the Ordering Policy, which was inconsistent with the continuation of the Contract.
Contrary to the Applicant’s submission, the decision of the Full Bench in Linfox Armaguard Pty Ltd v Symes[18] did not find that an employee had not engaged in serious misconduct when he told a supervisor to “get fucked”, because the employer tolerated the use of robust language in the workplace. That decision turned on whether a supervisor’s comments to the particular employee amounted to an instruction rather than as an exhortation as found by the Commissioner at first instance, and so was conduct of a “wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment” or “the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment”.[19] The Full Bench agreed the comments were merely exhortation.[20]
The reasons involving the Taumalolo Email, the Vincenzi Message, the comment to Ms Giannaros and the Ordering Policy, cumulatively constituted valid reasons for the termination of the Applicant’s employment.
(c) Procedural Fairness
As noted above, in final submissions Mr Canegallo conceded on behalf of the Respondent there may have been failures in procedural fairness. In his evidence, Mr Canegallo also candidly conceded procedural failures.[21]
The evidence disclosed two forms of procedural fairness failures in this matter. They were:
The failure to warn the Applicant sufficiently regarding unsatisfactory performance during employment (s.387(e)); and
The notification of, and ability to respond to the reasons regarding his capacity or conduct (s.387(b) and (c)).
(i) Failure to Warn
While Mr Canegallo’s evidence was that the Applicant’s termination was for behaviour not performance,[22] it is clear that non-compliance with the Ordering Policy was a reason for his dismissal. While efforts were made to have the Applicant comply with that policy, it is apparent that strict compliance was not required of the Applicant for the apparent reason of avoiding conflict with the Applicant, and the Respondent did not seek to discipline the Applicant regarding Ordering Policy issues. There was therefore a failure to sufficiently warn the Applicant regarding non-compliance with the Ordering Policy.
There was not, however, a failure to warn the Applicant regarding conduct towards co-workers, even assuming, as I do not, that employees have to be warned not to abuse co-workers. That is because I accept the evidence that the Respondent was not aware of the Taumalolo Email and the Giannaros comment until around the time of, or after, the termination. That conduct did not relate to performance.
(ii) Notification/Ability to Respond
There was an absolute failure by the Respondent to notify the Applicant of the reasons for his dismissal, and allow him to respond to those reasons. I accept the evidence of Mr Canegallo that he was trying to protect the health and safety of his other employees, however the Applicant was already essentially “stood down” and procedural fairness could have been afforded to the Applicant prior to any dismissal.
(d) Size of the Respondent/Access to Human Resources
The Respondent was a relatively small enterprise, without dedicated human resource management specialists or expertise. I consider this was likely to have had an impact on the procedures followed in effecting the dismissal.
Conclusion
I have made findings in relation to all matters specified in section 387 as relevant. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable and therefore an unfair dismissal.
While I have found the Respondent had valid reasons for the dismissal of the Applicant, I consider on balance that the dismissal of the Applicant was harsh, unjust or unreasonable due to failures in procedural fairness. Those failures in procedural fairness can be explained in part by the size of the Respondent’s enterprise, and the absence of Mr Canegallo from Australia, however that does not disturb my overall finding that the dismissal of the Applicant was harsh, unjust or unreasonable.
Remedy
The circumstances as to when the Commission may order remedy for an unfair dismissal are set out in s.390 of the Act.
Section 390 is in the following terms:
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.
In respect to s.390(1)(a), it is not in dispute that the Applicant was protected from unfair dismissal. In respect to s.390(1)(b), for the reasons set out above, I am satisfied that the Applicant has been unfairly dismissed, and the Applicant has made an application in satisfying s.390(2).
Having regard to the matters in s.390(3)(a), the Applicant does not seek reinstatement. Accordingly, I am satisfied that reinstatement is inappropriate.
Having regard to s.390(3)(b), I consider an order for compensation is appropriate in all the circumstances of the case. The matters to be taken into account in making an order for compensation are set out in s.392 of the Act as follows:
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.
As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v
Humphries,[23] the well-established approach to the assessment of compensation under s.392 of
the Act is to apply the “Sprigg formula” derived from the Australian Industrial Relations
Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket
(Sprigg).[24] This approach was articulated in the context of the Act in Bowden v Ottrey Homes
Cobram and District Retirement Villages.[25]
The effect of the order on the validity of the employer’s enterprise – s.392(2)(a)
There was no submission that there would be any effect of the order on the viability of the employer’s enterprise.
The length of the person’s service with the employer – s.392(2)(b)
The Applicant’s period of employment was just over three years. The Applicant’s length of service does not weigh in favour of reducing or increasing the amount of compensation
ordered.
The remuneration that the person would have received, or would have been likely to
receive, if the person had not been dismissed – s.392(2)(c)
The assessment of the length of continued employment is a discretionary decision.
It is clear that by the time of the Applicant’s dismissal the relationship between the Applicant and Respondent had seriously deteriorated, to the extent that it was unlikely to continue thereafter. Added to that deterioration was the knowledge gained by the Respondent around that time of the Taumalolo Email, and the Giannaros comment.
The Applicant submitted initially that the Applicant would have remained in employment for a year, and in final submissions submitted he would have remained until retirement. Those submissions completely disregarded the evidence of the Applicant’s conduct and the friction within the workplace, and were seemingly advanced as a means of somehow securing a large compensation figure in circumstances where the Applicant had, as acknowledged at the commencement of the hearing of the matter, almost completely mitigated his loss. I reject those submissions.
In those circumstances, the Applicant’s employment would only have continued for a period to allow for procedural fairness to be afforded to the Applicant. I estimate that the Applicant’s employment would have continued for a further two weeks. which would allow for sufficient time for the Respondent to notify the Applicant of the reason for dismissal, provide an opportunity for him to respond and to give him notice of his dismissal.
Mitigation/Remuneration Earned – s.392(2)(d) and (e)
As noted above, shortly after his employment was terminated, the Applicant commenced new employment on an annual salary of approximately $5,000.00 less per annum. It was agreed that the difference in salary was $100.00 per week.
Other Matters Relevant – 392(2)(g)
It was eventually agreed that, notwithstanding the dismissal was for serious misconduct, the Applicant received 3 weeks pay in lieu of notice. I make no deduction because of that payment as I consider that the Respondent would have made such notice payment after having accorded procedural fairness to the Applicant.
Misconduct reduces amount – 392(3)
Section 392(3) of the Act provides:
(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.
In Butterfly Systems Pty Ltd v Sergeev,[26](Sergeev) the Full Bench of the Commission found:[27]
Two relevant considerations arise from the terms of the provision. Firstly, the specific use of the term “misconduct”, as opposed to “serious misconduct”, indicates that conduct of less severity than that encompassed in the definition of serious misconduct in Regulation 1.07 of the Fair Work Regulations 2009, is within the purview of the provision. Secondly, the provision requires the Commission to reduce the amount of compensation it would otherwise order by an appropriate amount, on account of misconduct, if satisfied that the misconduct contributed to the employer’s decision to dismiss.
The conduct of the Applicant constituting valid reasons satisfies the definitions of either misconduct or serious misconduct, and contributed to the decision of the Respondent to dismiss him. I consider it appropriate that compensation ordered should be reduced by 50%.
Conclusion and order as to remedy
I consider that reinstatement is not an appropriate remedy and that an award of compensation is appropriate. I estimate the Applicant would have received a further two weeks remuneration had he not been terminated.
I deduct from the two weeks pay monies earned since termination, leaving $200.00, being two weeks pay less mitigation. I make no deduction for contingencies, and consider the impact of taxation on the amount needs no accommodation.
The $200.00 is reduced by 50% as a result of misconduct, leaving $100.00 gross, subject to deduction of taxation (the Compensation Payment).
The Compensation Payment, less any required deduction in taxation, is to be made within 21 days of this decision. An order to that effect is separately published.
DEPUTY PRESIDENT
Appearances:
Mr J Stefanson-Blomfield, for the Applicant
Mr M Canegallo, for the Respondent
Hearing details:
2022.
December 16.
Sydney.
Annexure A
[1] Transcript PN 187.
[2] Transcript PN 1016.
[3] Transcript PN 1131.
[4] Transcript PN 1145.
[5] Transcript PN 944.
[6] Transcript PN 828 to 830.
[7] Transcript PN 358 and 367.
[8] Transcript PN 292.
[9] Transcript PN 297 and 298.
[10] Transcript PN 355 to 371.
[11] Transcript PN 869 to 874.
[12] Briginshaw v Briginshaw [1938] HCA 34.
[13] [2012] FWAFB 7877.
[14] [2020] FWCFB 1373.
[15] Ibid at [26].
[16] Transcript PN 1036
[17] Transcript1196.
[18] [2012] FWAFB 7877.
[19] Fair Work Regulation Reg.1.07.
[20] [2012] FWAFB 7877, at [15].
[21] Transcript PN 622 to 631.
[22] Transcript PN 543
[23] [2016] FWCFB 7206, at [16].
[24] (1998) 88 IR 21.
[25] [2013] FWCFB 431.
[26] [2021] FWCFB 18.
[27] Ibid at [35].
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