[2014] FWC 9191 [Note: An appeal pursuant to s.604 (C2015/1131) was lodged against this decision - refer to Full Bench decision dated 15 April 2015 [[2015] FWCFB 2267] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Mr John McCulloch
v
Calvary Health Care Adelaide
(U2014/8599)

COMMISSIONER WILSON

MELBOURNE, 19 DECEMBER 2014

Application for relief from unfair dismissal.

[1] John McCulloch was employed by Calvary Health Care Adelaide Ltd as a part-time cleaner from 8 February 2007 1 until his dismissal on 28 July 2014.

[2] For the reasons set out below, I find that Mr McCulloch was unfairly dismissed; that reinstatement would be inappropriate; and that an order for compensation is appropriate.

[3] Section 396 of the Fair Work Act 2009 (the Act) requires the determination of four initial matters to be considered before considering the merits of the application. Neither party put forward that any initial matter required determination. As a result, and it being consistent with the evidence, I find that Mr McCulloch’s application was made within the 21-day period required in s.394(2)(a) of the Act and that he was a “person protected from unfair dismissal” within the meaning of that expression in s.382 at the time of the dismissal. I also find that Calvary Health Care Adelaide was not a “small business employer” within the meaning of that expression in s.23, and accordingly an issue of consistency with the Small Business Fair Dismissal Code does not arise. I also find, that Mr McCulloch’s dismissal was not a case of “genuine redundancy” as defined in s.389 of the Act.

BACKGROUND

[4] Mr McCulloch was dismissed after an altercation with a manager, Mr Martin Hart on Thursday 17 July 2014. Although not dismissed summarily, the reason for his dismissal was misconduct that arose in the course of that altercation. Mr McCulloch’s service with Calvary Health Care was terminated in a letter to him dated 28 July 2014, which, after referring to meetings in which Mr McCulloch had been informed that an investigation was being conducted into alleged breaches by him of the Calvary Code of Conduct & Preventing Bullying & Harassment in the Workplace Policy, then advised him he was to be dismissed because he “verbally abused, intimidated and threatened catering and housekeeping management and staff at Calvary North Adelaide Hospital”. 2

[5] Leading to Mr McCulloch’s dismissal are a series of events that involve his wife, Catherine McCulloch, who also works at the hospital as a cleaner; another cleaning employee, Margaret Nasinski; his supervisor, Tracy Tran; and her manager, Martin Hart.

[6] Calvary Health Care Adelaide operates several campuses in Adelaide including the Calvary Hospital at North Adelaide where Mr McCulloch was employed and the events referred to took place. Calvary Health Care Adelaide employs around 1600 employees, with over 400 employees at the North Adelaide hospital, and is part of a national organisation; Calvary Health Care, that employs around 10,000 employees. 3

[7] The organisation was founded by the Sisters of the Little Company of Mary, and retains very strong Catholic links and traditions.

[8] This is relevant, inasmuch as Calvary Hospital at North Adelaide includes within its grounds both a church and a chapel and in a foyer to some consulting rooms, a statue of the Virgin Mary. On Thursday 17 July 2014 at about 7:00am, Mrs McCulloch and Ms Nasinski were in the foyer on a sofa adjacent to the statue of Mary. Mrs McCulloch’s evidence includes that it was her habit to arrive at work some considerable time before work commenced; go for a walk outside of the hospital; and to then return to be in the presence of, and pray to, Mary. Her evidence and that of Ms Nasinski is that they would often do that together.

[9] On that morning, Ms Tran, the women’s supervisor, saw them sitting near the statue of Mary. Her evidence is that she asked the women to leave and that when they did not, she reported them to Mr Hart, who was the hospital’s Hospitality Services Manager at the time, and who came down to see them after being informed by Ms Tran. Mrs McCulloch’s evidence about these events includes;

“On the day in question our supervisor Tracey Tran approached Margaret and I while we were sitting by Mary and said "You are not allowed to sit here". Later Margaret told me that Tracey had also said "move" but I didn't hear her say that.

I ignored what Tracey had said because I hadn't started work yet and it was my own time and I thought what she was saying was unreasonable.

Martin Hart, a Manager, then approached us. He said "You are not allowed to sit here.

I want both of you girls in my office at 7:30". Margaret said "There is nothing wrong with sitting here". Martin said "You have been told before not to sit here" then he just walked off.

Martin seemed very angry during this conversation. His face was red and his voice was raised.” 4

[10] Mr Hart disputes that he was angry, or that his face was red or his voice raised.

[11] The meeting between Mr Hart, Mrs McCulloch and Ms Nasinski took place at about 7:30am, and Ms Tran also attended the meeting. Mr Hart reiterated the views he had expressed earlier, and in particular that the women were not to sit on the sofas, or to be in the waiting area with the statue prior to starting work. Mrs McCulloch recalls that the meeting was not long, perhaps 5 minutes and that they agreed not to sit in the area again, and that she walked out feeling very angry and upset. Ms Nasinski’s evidence is that she left the meeting feeling upset. In relation to whether Mr Hart had been angry, she believes that he was. While he had not spoken to them in his normal speaking voice, he had spoken to them in a firm manner, which led her to that view.

[12] After leaving Mr Hart’s office, Mrs McCulloch happened to see her husband twice. She may not have told him about what happened on the first occasion she saw him, but she did so on the second occasion after she spoke with another employee and became more upset speaking with them. She recalls “I was still upset at this time and I told John what had happened.” 5 Mr McCulloch recalled this exchange, at least in his witness statement, more emotionally, stating that;

“When I arrived at the ICU one of the nurses asked me where Catherine was. I replied that I was looking for her myself.

The nurse advised me that she had seen Catherine and she was very upset and crying. This was very concerning to me. I couldn't see Catherine at the ICU so I went downstairs to the compactor to continue working and looked for Catherine along the way.

At approximately 8.00 am I saw Margaret near the compactor. She was hysterically crying and inconsolable. I asked her what had happened but due to her crying she could not respond coherently. Another cleaner came over and gave Margaret a hug.

At this point I felt incredibly upset. I also felt scared that Catherine and Margaret might be victimised regularly in future by Mr Hart after this incident.” 6

[13] Following this exchange, Mr McCulloch went looking for Mr Hart, and found him near to Ms Tran’s office. 7 Mr McCulloch agrees he initiated an argument with Mr Hart about the incident. The evidence supports that the argument included raised voices and Mr Hart’s evidence is that;

“...I was confronted by the Applicant who began yelling at me, abusing me by, amongst other things, calling me a gutless wonder and moved toward me in such a way that I thought he was going to hit me. I distinctly recall that:

5.1. He offered to "go one on one with me now" several times;

5.2. I stepped back to remove myself from the situation and he moved towards
me to stay in my personal space; and

5.3. I thought he was going to hit me.” 8

[14] Mr McCulloch gave evidence that he challenged Mr Hart by saying “what did you do to the girls.” He agrees he was angry and that he called Mr Hart “a gutless wonder”, but denies other aspects of the altercation, including that he may have been physically aggressive such as by stepping forward as if to hit Mr Hart. He also denies offering to “go one on one”, with him. There is poor quality video evidence of the altercation; however, its muffled audio and depiction of two people moving around at the very outer reaches of a ceiling-down “fish-eye” view of a corridor is unreliable beyond it evidencing there was an altercation with more than one raised voice.

[15] The argument was in the presence of Ms Tran and overheard by two other witnesses, Barbara Walsh, Catering Supervisor sitting in the Housekeeping Supervisor’s office, and Trudy Chandler, a General Services Assistant working outside of the Housekeeping Supervisor’s office. All three recall Mr McCulloch to have been yelling. Ms Tran and Ms Walsh recall hearing Mr Hart asking Mr McCulloch “[a]re you threatening me?”. 9 Ms Chandler heard the question slightly differently as “is that a threat John?”.10 Mr McCulloch’s evidence is that Mr Hart came forward to him and that this was in a “threatening manner”11; and that while he recalls Ms Tran was not present for the whole period, she “could have possibly heard quite a bit.”12

[16] In the course of the argument, Mr McCulloch challenged Mr Hart, perhaps rhetorically, to the effect that he might want to take up the issue of being seated around the statue of Mary with Mr McCulloch;

“I then said "Why didn't you take me in there, I have been sitting there for a week and Tracey Tran saw me sitting there the day previously. Why didn't you take me into the office then?"

Mr Hart responded "Alright let's go".

We started to walk away to the office and he asked Tracey Tran to attend. I realised then that I didn't have union representation and did not wish to proceed with the meeting without representation. I said to him "I should have union representation". The meeting was then called off until I could get union representation. We then walked back towards the office.” 13

[17] In the course of the argument, Mr McCulloch said that he was going to make an appointment with Sue Imgraben, the Calvary Health Care Adelaide Chief Executive Officer. Mr McCulloch’s witness statement records that Mr Hart said at the time he would be at the meeting;

“Mr Hart responded with "Well I will be at that meeting". I responded with "No you won't". I walked off to go to Sue's office. When I arrived there she was not at work yet. I then resumed my ordinary duties.” 14

[18] While it does not appear to have been said at the time, in his witness statement and in giving his evidence, Mr McCulloch clarified that this was intended to be a discussion about an unrelated matter. 15

[19] The argument subsided and Mr McCulloch went about his duties. About an hour later, Mr McCulloch returned to Mr Hart and said he had arranged for union representation and was ready to have the further meeting. Mr Hart refused to meet with him, saying the matter was “now out of his hands”. 16

[20] In between the two discussions, Mr McCulloch had reported the argument and the hospital had commenced an investigation into what had happened, the details of which are discussed below. The findings of the investigation were communicated to the hospital later the same day, 17 July 2014, and Mr McCulloch was invited to a meeting to discuss the incident. His union, United Voice, sought further particulars about the matters alleged, which were given in the meeting on 23 July and in a letter of the same date;

“Allegation

It is alleged that you verbally abused, intimidated and threatened catering and housekeeping management and staff at Calvary North Adelaide Hospital.

Examples of this include:

a) Yelling
b) Calling Mr Hart a "gutless wonder"
c) Aggressive and threatening behaviour

The allegations made against you, if substantiated, would appear to involve breaches of the 'Code of Conduct' and 'Preventing Bullying & Harassment in the Workplace' policy specifically ...” 17

[21] The correspondence invited a response, and put Mr McCulloch on notice that termination was a consideration for Calvary;

“Opportunity to respond

Please provide your detailed written response to the above allegations and any other information you deem relevant for this matter. Please also consider within your response reasons why your employment should not be terminated.

Please provide your written response to me by close of business Friday, 25 July 2014. Please also note that if you do not provide a response by the requested time, a decision will be made based on the information available. To allow you to prepare your response you are not required to attend work, but will be paid for rostered shifts.

Seriousness of Allegation

Calvary considers these matters very seriously and if found to be proven, may lead to disciplinary action being taken against you, including termination of your employment.” 18

[22] Mr McCulloch responded in writing on 24 July 2014. In his reply, he acknowledged his poor behaviour and connected it with being upset at seeing his wife’s distress. He also expressed sincere regret at the way he had behaved, and argued against dismissal;

“Reflection

I acknowledge that I raised my voice and may have appeared to be confrontational.
I acknowledge that I could have handled the situation more appropriately and professionally.

I sincerely regret the way I reacted. This was out of character for me.

I am incredibly sorry if any of my behaviour has made anyone feel uncomfortable. I never intended to make anyone feel uncomfortable, being Mr Hart or people who may have overheard our conversation.

This was a single incident which will not be repeated. I feel like I have learnt from this incident and in future I will respond better to these situations.

All I wanted was for Mr Hart to know that I believed that his reaction and procedure was inappropriate and causes stress.

I had fears for the long term mental welfare of my wife and others. This is because I have perceived Mr Hart (and others) as bullying [name omitted] over a prolong period of time. I did not wish for the same to happen to my wife or others.

Other Considerations

As discussed above, I believe my employment should not be terminated due to the circumstances of the event was abnormal, my reaction was out of character, I deeply regret and am sorry for its occurrence, it is unlikely to happen again, it was an emotional reaction and I am willing to do what it takes to prevent this from happening again.” 19

[23] The response was considered by Calvary Health Care Adelaide’s executive managers and discussed with others in its national organisation, Calvary Health Care, which led to the decision to dismiss Mr McCulloch, which was communicated to him on 28 July 2014. The letter of termination informed Mr McCulloch he was being dismissed because alleged breaches of the Calvary Code of Conduct and Preventing Bullying & Harassment in the Workplace Policy had been substantiated; those breaches being that he had “verbally abused, intimidated and threatened catering and housekeeping management and staff at Calvary North Adelaide Hospital”. The correspondence also “confirmed that the events you outline in your response are not accurate, your employment will be terminated effective immediately”. 20

LEGISLATION

[24] The legislative provisions which are relevant to this matter are set out in s.387 of the Act, which 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 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.

CONSIDERATION

[25] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account the legislative factors set out earlier.

(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)

[26] Having been dismissed for misconduct, the Commission is first required to find whether on the balance of probabilities the alleged misconduct actually occurred. 21 In doing so, the Commission will take into account the need to be properly satisfied of the proofs of the conduct; without applying a standard of proof higher than the balance of probabilities.22 The Commission will also take into account the need for honesty on the part of the Applicant during the course of an investigation.23

[27] In Mr McCulloch’s case, the misconduct alleged was that he “verbally abused, intimidated and threatened catering and housekeeping management and staff at Calvary North Adelaide Hospital”; exemplified by him yelling, calling Mr Hart a “gutless wonder” and demonstrating alleged aggressive and threatening behaviour.

[28] The incident that led to his dismissal took place between 8:00 and 8:30am on Thursday 17 July 2014.

[29] Peter Lawrence is employed by Calvary Health Care Adelaide’s as a Work Health & Safety Facilitator. He recalls that he was asked to commence his investigation of the circumstances of the incident involving Mr McCulloch at 8:55am. 24 Between 9.30am and 10:15am he interviewed 7 people, namely Mr and Mrs McCulloch, Ms Nasinski, Mr Hart, Ms Tran, Ms Chandler and Ms Walsh. At 10:54am he emailed the results of his investigation to Emma Poland, Calvary Health Care Adelaide’s Director of Finance as follows;

“Hi Emma

Just confirming our conversation I have undertaken some interviews with all staff who had been involved in the incident this morning in Catering and House keeping to better understand the circumstances and in the interests of fairness and balance.

I have come to the conclusion that the Manager involved throughout this incident conducted himself to the highest levels of conduct and that he did nothing that would have expedited the incident. I consider his behavior to be beyond reproach.

Not withstanding this, I am satisfied that the Manager and other witnesses, regarded the incident as constituting a personal threat to the manager by the staff member. By definition I am of the view that the Manager may well form the view that he was subject to bullying in the work place.

I understand there has been a previous incident that may well also by definition be considered to be bullying by the worker.

I have put in a call to the National HR Manager to discuss an appropriate response. It may well be appropriate for a Tcon 25 to occur with the HR Manager to discuss this matter furthur. (sic)

Thank you” 26

[30] Mr Lawrence records, in his typed notes prepared some weeks after the interview took place, the following about his discussion with Mr McCulloch;

“Meeting with staff member who had addressed Catering and Housekeeping Manager in confrontational manner.

Staff member advised he was responding to the Catering and Housekeeping Manager's 7:00 meeting on behalf of the two staff members involved one of whom was his wife.

He outlined that he took exception to the direction of the Catering and Housekeeping Manager but denied any aggressive language was used.” 27

[31] Mr McCulloch agrees that Mr Lawrence interviewed him and refers to the matter very briefly, and only in his witness statement, by stating that “Mr Lawrence asked me for my version of what had happened earlier in the day. I told him what had occurred and the interview took approximately four minutes.” 28 Mr McCulloch’s responses to all stages of the investigation and dismissal process appear to have been open and honest.

[32] There is no evidence that a caution was given to Mr McCulloch about the purpose of the discussion, and there is no reliable evidence put forward by Mr Lawrence to the effect that he directly put to Mr McCulloch, for the purposes of explanation or contradiction, what Mr Hart alleged him to have done.

[33] Considered as a whole, Mr Lawrence’s evidence is that he prepared the report from the perspective of whether workplace bullying had taken place, in accordance firstly with his own definition of that term, namely “aggression in the workplace or any behaviour, any circumstances which involve victimisation, humiliation, undermining or threatening an employee” 29, or that of the hospital’s, derived from workplace health and safety legislation.30 He understood himself to be undertaking an investigation for the purposes of workplace health and safety legislation.31 Mr Lawrence appears not to have approached the investigation task from the perspective of a report that may be used for consideration of dismissal of an employee. Mr Lawrence apparently had no further involvement in the matter after he delivered his investigation report to Ms Poland, beyond a discussion confined to the content of his emailed report.32

[34] The investigation report is remarkable not only for its speed of preparation but its brevity.

[35] Even though Mr Lawrence had general awareness there might be video surveillance footage of the incident that triggered the investigation he was not aware there might have been any video surveillance footage to view. 33 He was asked in cross-examination whether it would have helped his investigation to view video surveillance footage, and explained his views in this way;

“And yet you did not check if there was any footage?---I had no reason to check whether there was any footage because I was looking at this issue from the point of view of bullying in the workplace so I wouldn't have seen that as necessary because I was not – I was not undertaking a critical-incident investigation to determine whether there had been a matter of assault or any other incident at the time.

So the reason you didn't look at the video is because you didn't think the incident was sufficiently serious. Is that right?---No, didn't even think of looking at the video.

And that's because you thought the incident was no sufficiently serious. Is that right?---No, I regarded it as a very serious incident.

Wouldn't it then have been helpful to examine video or audio of the incident if it was available?---I only had a limited time available to me to undertake an investigation to determine what actually happened under the circumstances as it was relayed to me and to basically get an understanding from the people who were present exactly what happened and from my personal or professional point of view determine whether there was bullying in the workplace.” 34

[36] While I have referred above to the video footage being of low quality, meaning it would likely not have assisted Mr Lawrence in his investigation purpose, the point to be drawn from the above evidence is that he did not seek out surveillance evidence and did not see it as relevant to his purpose.

[37] Mr Lawrence took notes of his interviews but did not provide them to the Fair Work Commission (the Commission). Mr Lawrence asked the Commission to rely upon typed notes of the interviews prepared from memory some time after the interviews were conducted. While Mr Lawrence’s evidence is that he tried to locate his ring-bound notebooks with the notes, he could not find them. His explanation for this is that he works across 3 campuses, and he is busy. 35

[38] Questions about the location of his original notes were raised when he gave evidence, which was on 21 October 2014. The hearing continued into 22 October 2014; however Counsel for Calvary Health Care Adelaide did not advise the Commission on that day, or subsequently, that his client had located Mr Lawrence’s original notes.

[39] The speed of the investigation, having been commenced at 8:55 am and reported to Ms Poland at 10:54 am; the failure to ascertain whether video surveillance evidence was available; and that it appears Mr McCulloch did not put to him the detailed allegations of misconduct that were being investigated calls into question the accuracy of the findings made by Mr Lawrence. It limits the extent to which the investigation report could objectively be considered a full and accurate report to be relied upon by Calvary for its decision.

[40] Ms Poland’s evidence included that the information which Calvary Health Care Adelaide relied on when it made its decision to dismiss consisted of Mr Hart’s initiating complaint; Mr Lawrence’s investigation report; short email reports from Ms Chandler, Ms Tran and Ms Walsh; the formal allegations put to Mr McCulloch in the meeting on 23 July 2014 and his written reply dated 24 July 2014. 36 Following her consideration of these documents, Ms Poland met with other members of the hospital’s executive managers where there was discussion of what had happened, and then collectively decided to recommend Mr McCulloch’s dismissal to more senior managers in the national group. Her evidence on these matters included the following;

“11. On 25 July 2014, I met with the other members of the Executive for CHCA to discuss the allegations and the Applicant's response. I cannot recall the particulars of that meeting; however, I formed the view that termination of the Applicant's employment was warranted on the basis that:

11.1. In his response to the allegations, dated 24 July 2014, the Applicant conceded that he had raised his voice and was confrontational, but provided a different version of events. I decided that Mr Hart's version of events was substantiated as it was supported by the three witness statements from Barbara Walsh, Tracy Tran and Trudy Chandler;

11.2. I found that the Applicant had breached CHCA's Code of Conduct and the Preventing Bullying and Harassment in the Workplace Policy & Procedure copies of which are attached and marked 'EP5';

11.3. The Applicant had provided no evidence to substantiate his allegation that Mr Hart had engaged in bullying behaviour to other staff members;

11.4. The Applicant's conduct was violent and occurred in a hospital environment;” 37 (emphasis added)

[41] Although preferring Mr Hart’s version of events, Ms Poland’s evidence does not record a direct conversation with him about the subject, and so I infer that the version she prefers is a combination of;

● that set out in Mr Lawrence’s report, in which it is recorded “Manager advised he was subsequently confronted by Husband who made threatening an intimidating statements Including threatening to take his lights out”; and

● Mr Hart’s own email to Ms Parmiter, the hospital’s Director of Care, on 21 July 2014, in which it was stated;

“I felt intimidated and threatened by his actions as he was very aggressive towards me. I then said he could come into my office as long as i had a support person and offered one to him but he said we should sort it out one on one. He then said he would contact the union and at this stage I walked away to fill in a Riskman and report what had happened. I felt for my safety and welfare having Known his history and was quite shaken up. He later confronted me at 1035 with phone in hand saying ill get the union now and sort you out and i responded that it is out of my hands now. The camera footage captures the time and hearing John yelling.” 38

[42] I note that sequentially, the different version of events from Mr McCulloch to which Ms Poland refers was received by her on 24 July 2014, which is after the communications from Mr Lawrence and Mr Hart (respectively 17 July 2014 and 21 July 2014). Mr McCulloch’s letter raised at least three significant differences or points of contradiction to the material that Ms Poland had seen and considered to that point;

● Mr McCulloch puts forward that the video surveillance footage, which she had seen earlier on 24 July 2014, indicates there were two raised voices. Mr Lawrence’s report makes no mention of the surveillance evidence and Mr Hart’s email asserts only that it captures Mr McCulloch yelling.

● Mr McCulloch alleges Mr Hart spoke to Mrs McCulloch “using an aggressive tone of voice and he was very angry”. This allegation is not discussed at all in Mr Hart’s email. In Mr Lawrence’s report, he states that “[neither] staff member raised any concerns over the manner in which they had been spoken to by the Catering and Housekeeping Manager”.

● Mr McCulloch also alleges that during their altercation Mr Hart “walked over to me in a threatening manner”. Mr Hart’s email makes no reference to his own conduct, although it records that he “felt intimidated and threatened” by Mr McCulloch and Mr Lawrence’s report does make any reference to Mr Hart’s conduct or demeanour.

[43] These points of difference were not, it appears, the subject of further inquiry by Ms Poland or others. Without particularising the content of any substantive discussion about Mr Lawrence’s investigation report, Ms Poland’s evidence is that she had communications with Mr Lawrence after receiving his report; 39 however, this does not appear to rise to the level of inquiring into the rebuttal points put forward in Mr McCulloch’s response of 24 July 2014.

[44] Consideration of these matters by Ms Poland and other Calvary Health Care Adelaide managers led to a recommendation to senior managers in the national group for Mr McCulloch’s dismissal; which was approved and in turn led Ms Poland to write to Mr McCulloch on 28 July 2014, advising him that his employment was terminated. 40

[45] Part of Mr McCulloch’s employment history, known to the hospital, included him having made extremely serious allegations to an external authority about the hospital’s conduct, and while Mr McCulloch denies the allegations went to the personal behaviour of one of the witnesses, the witness believes there was a personal element to the allegations. The evidence before the Commission indicates that the matters were investigated and found not to have been substantiated. Mr McCulloch’s employment was considered by the hospital and his employment continued. 41

[46] A further part of his employment history is that Mr Hart had knowledge that Mr McCulloch intended to go from his altercation with Mr Hart on 17 July 2014 to meet with the CEO about a further matter.

[47] In the end, Calvary Health Care Adelaide chose to dismiss Mr McCulloch, not because of any background matters, but because of the matters relating to his conduct on 17 July 2014 as referred to above. His conduct, in the view of the hospital, caused him to be in breach of two significant policies because he had “verbally abused, intimidated and threatened catering and housekeeping management and staff”, and his response to the allegations of 24 July 2014 was not accurate. The policies the hospital referred to are the Calvary Code of Conduct and the Preventing Bullying & Harassment in the Workplace Policy. Although these are important policies and the hospital advised in its allegations letter to Mr McCulloch dated 23 July 2014 the particular paragraphs it found he had breached, the content of the policies are ultimately generic statements and the specifics of Mr McCulloch’s breaches are not precise.

[48] For example, the allegations letter puts forward that he breached certain parts of the “Respect” section of the Code of Conduct and the termination letter confirms that he breached the Code of Conduct, without reference to which part. Mr McCulloch was informed in the allegations letter that he had breached the Respect section in the following respects;

“Respect It is our responsibility to care for all with whom we come into contact with justice and compassion no matter what the circumstances. We are expected to avoid these negative behaviours: physical or psychological abuse of others; engaging in adverse conversations or behaviours that negatively respond to changes or directions in our team or the company; unlawfully bullying or harassing others.” 42

[49] Beyond the letter of dismissal, and Mr Lawrence’s report, there are not detailed reasons for his dismissal. The core complaint against Mr McCulloch is that he “verbally abused, intimidated and threatened catering and housekeeping management and staff”. I take from the phrasing of the statement and Ms Poland’s evidence in which she refers to the statements of Ms Chandler, Ms Tran and Ms Walsh, 43 that the hospital considers his actions to be in respect not only of Mr Hart, but others as well, since the complaint is written in the plural – “catering and housekeeping management and staff”.

[50] The evidence before the Commission supports a finding that Mr McCulloch verbally abused Mr Hart; however, this appears at the lower end of might be regarded as verbal abuse. He undoubtedly was verbally argumentative, questioned what Mr Hart had done to his wife and Ms Nasinski and called him “a gutless wonder.” However, despite his evidence that he felt threatened, there is no evidence the verbal abuse went significantly beyond those illustrations. The evidence does not support that this behaviour rose to intimidation or threatening of Mr Hart. While certainly a relatively heated argument took place, but not one offensively so, it is unlikely that a reasonable observer of the argument would have thought Mr Hart was being threatened with menace or consequences for his actions; or that Mr Hart was being intimidated into a changed path by inducing fear.

[51] This is not to say that Mr McCulloch’s conduct was acceptable because it was not. However, it is to say that an objective analysis of what happened leads to the view that although his conduct was verbal abuse it does not rise so far as it being either conduct designed to intimidate or threaten, or conduct which would be viewed by a reasonable person as being of that nature. Instead, viewed objectively and in the context of Mr McCulloch’s employment, the conduct would likely be seen as an over-reaction by him to something relatively minor. It would also likely be seen as misconduct by someone with a chequered employment history, who would have to be held to account once he had calmed down or taken advice.

[52] This view of the altercation is supported by the way Mr Hart initially dealt with what had happened, which is to suggest a discussion in his office, and this being at the point he says he felt intimidated and threatened. Ms Tran gives evidence that there was an invitation to Mr McCulloch to come into Mr Hart’s office, which she puts in this way;

“John continued at Martin saying "Come on take me into the office" Martin Hart asked John would he like to come now. He responded "yes" with that Martin asked myself to come as well, John yelled "no, she's not coming" and Martin said to John "she will be the witness for the conversation" with that John said "No way" so Martin said to John you may go and find yourself a witness, John said "I'll get a Union Rep In". Martin then said to John "no worries you organize a time and date and we will meet then".” 44

[53] Ms Walsh and Ms Chandler each corroborate the invitation and it being declined for reason of not having a representative. 45 Mr McCulloch also states these matters in his witness statement. Mr Hart states the exchange slightly differently, linking the offer of a discussion both with his feelings of intimidation and further commentary attributed to Mr McCulloch, recording that;

“I felt intimidated and threatened by his actions as he was very aggressive towards me. I then said he could come into my office as long as I had a support person and offered one to him but he said we should sort it out one on one.” 46

[54] Viewed in context, and without other indicia of intimidation or threats, it is improbable Mr Hart would offer a meeting in his office for any purpose, and with or without mutual support people, if this really was a confrontation that had crossed the bound of argument into intimidation and threat. While Mr Hart’s evidence is that the offer was to “defuse the conversation,” 47 and that at the time he felt scared and that he thought Mr McCulloch might hit him,48 that evidence is not consistent with his offer of a meeting. Mr Hart’s characterisation puts the heat of the argument and the purpose of the offer, at a level that is not apparent through a consideration of the whole of the evidence. In addition, the offer does not reasonably appear to be an endeavour to circuit-break or calm down an otherwise dangerous and out-of-control situation. Instead, it should reasonably be viewed as an invitation to discuss a grievance.

[55] The fact that Mr Hart changed his mind about having a meeting by the time Mr McCulloch returned does not change the characterisation of the level of verbal abuse I have found. While it demonstrates that Mr Hart changed his mind, or that the investigation processes of the hospital took over, the available evidence shows that the verbal abuse in the first meeting did not rise to intimidation or threatening behaviour either of Mr Hart, or other staff members.

[56] Mr Hart claims that Mr McCulloch said words to him to the effect that “we should sort it out one on one”. 49 Mr McCulloch denies having invited Mr Hart to “to go one on one with him”.50 Mr Hart elaborated in oral evidence that Mr McCulloch threatened him by being in his personal space and added words to the phrase as first stated in his witness statement;

“Did he say, "Let's step outside," or words to that effect?---No; no, as I just said to you, he said in my office or outside; not step outside or outside.

So your evidence now is he said to you that he wanted to go one on one with you in your office or outside?---That's what I recall him saying to me.” 51

[57] Mr Lawrence’s investigation report refers to Mr Hart having said to him that Mr McCulloch had been “threatening to take his lights out” 52 ; however, he conceded in cross-examination that he could not recall if Ms Tran, Ms Chandler or Ms Walsh used those words to him.53 Ms Tran’s evidence is that she heard Mr Hart use the phrase to Mr Lawrence.54

[58] Ms Tran heard Mr Hart ask Mr McCulloch “are you threatening me”. 55 Ms Chandler’s evidence is that she was stunned and scared with the altercation and that she felt very threatened56 but did not hear Mr McCulloch say words to the effect that “we should sort it out one on one”. Ms Walsh’s evidence is that she was shocked and scared and felt very threatened57 but makes no reference to Mr McCulloch saying “we should sort it out one on one”.

[59] The rephrasing of the invitation referred to above; the other evidence given by Mr Hart and his demeanour giving evidence, together with the evidence of the other witnesses, including Mr McCulloch leads me to find that the proposal was not a threatening one, and that is was something somewhat less confrontational than first presented. The evidence does not lead me to find that the proposal really meant “we should sort it out one on one in your office or outside by fighting one another”.

[60] As referred to above, the video surveillance evidence is of poor quality and does not add much. It shows two people moving around, and indicates raised voices, but of whom it is not possible to discern. Because the people it shows are moving around and they appear to move out of site of the camera, it is unlikely to be vision of the entire argument. It does not show undue hostility on the part of anyone.

[61] Ms Chandler had her back to the argument until she heard Mr Hart say “is that a threat John?” when she turned around and judged Mr McCulloch’s body language towards Martin to be “very aggressive and threatening”. 58 Ms Walsh reports that;

“I was in full view of what was happening ,Martin was leaning against the cupboard looking straight at John, when Johns body language and aggressive tone made me think this was going to get physical that is when I heard Martin say ‘are you threatening me!’” 59

[62] While the observers of the argument who gave evidence, Ms Chandler, Ms Tran and Ms Walsh, each reported some level of concern about the argument, the evidence does not allow that they were personally abused, intimidated or threatened. Instead the evidence allows that they saw Mr McCulloch as the instigator of the argument; Mr Hart as endeavouring to keep control of the situation; and that while they thought it could have become a more serious confrontation, it did not. While I accept that each were, to varying degrees and in their words, “scared”, the objective analysis of the evidence is that this was more a reaction to the argument playing out in front of them, than each being worried about their personal safety or that of Mr Hart.

[63] The foregoing allows me to find that the extent of the misconduct as alleged against Mr McCulloch is supported by the evidence that he verbally abused Mr Hart, including by raising his voice and calling him “a gutless wonder” and by suggesting they sort it out “one on one with you in your office or outside”.

[64] This finding is not consistent with the significantly broader reason Calvary dismissed Mr McCulloch, namely that he “verbally abused, intimidated and threatened catering and housekeeping management and staff at Calvary North Adelaide Hospital”.

[65] Because of this finding, I am not persuaded that there was a valid reason for the dismissal related to Mr McCulloch capacity or conduct.

(b) whether the person was notified of that reason

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[66] The evidence shows both that Mr McCulloch was notified of the reasons for his dismissal, as well as being given an opportunity to respond to those reasons, and to provide to Calvary material for their consideration prior to making the decision to dismiss.

[67] I note, however, that in relation to the criterion of whether an employee has been given an opportunity to respond to the reason for dismissal, strictly speaking such consideration by the Commission is consequential to a finding there is a valid reason for dismissal, which I have not found. 60

[68] Nevertheless, such opportunity to respond was available to Mr McCulloch and he availed himself of the opportunity, providing a full and comprehensive submission for consideration by Calvary.

(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;

[69] The evidence fully supports a finding that Mr McCulloch was permitted, at all relevant times, to have a support person of his choosing to assist his in the discussions that took place around the allegations made about him and his dismissal, and that he had such a person in attendance.

(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

[70] Mr McCulloch was dismissed for reason of misconduct. Questions of Mr McCulloch’s broader work performance were not relied upon in Calvary’s reasons for dismissal. Accordingly, the need for detailed consideration of this criterion does not arise.

(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;

[71] There is no evidence that the size of Calvary Health Care Adelaide’s enterprise would be likely to impact on the procedures it followed in effecting Mr McCulloch’s dismissal

[72] The evidence in the matter shows clearly that Calvary Health Care Adelaide had access to dedicated human resource management specialists or expertise. It had access both to investigation expertise within its Adelaide operations and human resource assistance through its national group in considering the allegations against Mr McCulloch and its decision to dismiss him.

[73] As a result, the criteria within s.387(f) and (g) of the Act do not require further consideration.

(h) any other matters that the FWC considers relevant.

[74] I do not find any other matters that are relevant and which require being taken into account.

[75] I have found that Calvary Health Care Adelaide did not have a valid reason for Mr McCulloch’s dismissal at the time it dismissed him, and that, after consideration of the other criteria within s.387 there are not factors that might fall in Calvary’s favour to offset or reduce the import of the finding about its reason for dismissal. It follows that I find Mr McCulloch was unfairly dismissed within the meaning of s.385 of the Act.

[76] Accordingly, I turn to consider whether it is appropriate to order a remedy in favour of Mr McCulloch.

REMEDY

[77] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are as follows;

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.

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.

Order to restore lost pay

(3) 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 cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

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.

[78] Pursuant to subsection 390 (3) of the Act an order for the payment of compensation to a person must not be made unless the Fair Work Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”

[79] Mr McCulloch submits that in all the circumstances he should be reinstated to his former position at Calvary Health Care Adelaide.

[80] For its part, Calvary Health Care Adelaide submits it would be inappropriate to reinstate Mr McCulloch to his former position. Its witnesses took the subject further, with Mr Lawrence giving evidence that he had concerns about the occupational health and safety consequences of reinstatement, 61 and Ms Poland stating that she felt that Mr McCulloch could not re-establish a working relationship with the other witnesses in this matter and that he might repeat his behaviour to others.62 Each reiterated their concerns about reinstatement in their oral evidence. The effect of Calvary’s evidence forms to a submission that the requisite trust and confidence between the parties for reinstatement had broken down.

[81] The issue of when reinstatement is inappropriate and the related question of the need for trust and confidence between the parties was recently considered at length by the Full Bench of the Commission in Nguyen and Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter. 63 In its decision, the Full Bench held that;

● ‘trust and confidence’ in this context it that which is essential to make an employment relationship workable, which is “not to be confused with an implied term in a contract of employment of mutual trust and confidence, the existence of which was recently eschewed by the High Court in Commonwealth Bank of Australia v Barker”; and

● While “trust and confidence is a necessary ingredient in any employment relationship, it would be wrong to assume that it is the sole criterion or even a necessary one to determine whether or not reinstatement is appropriate”. 64 (references omitted)

[82] The Full Bench summarised the relevant principles to be followed in assessments of trust and confidence as follows;

“[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:

• Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.

• Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.

• An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.

• The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.

• The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.

[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.” 65 (references omitted)

[83] Aside from the evidence of Mr Lawrence and Ms Poland about the appropriateness of reinstatement referred to above, I take into account that the context of Mr McCulloch’s employment includes not only the circumstances that led to his dismissal, but other unrelated conduct matters to which I have referred above; firstly, serious allegations to an external authority about the hospital’s conduct that were investigated by the external authority and found to be without substance; and secondly, comments to Mr Hart at the time of their altercation that Mr McCulloch was going to leave and meet with Ms Imgraben, the CEO.

[84] In addition to these matters, in giving evidence, Mr McCulloch was asked if he had previously made complaints about the conduct of one of the employer’s witnesses, and he confirmed he had, about two weeks prior to a senior manager about potential unlawful behaviour. 66 The relevant witness gave evidence that they knew nothing of the complaint.67 If Mr McCulloch actually made the complaint he gave evidence about, it appears unlikely that the hospital considered it to require detailed consideration. Mr Lawrence referred in his evidence to a third matter, but he did not have direct knowledge of the issue or how it had been dealt with.68

[85] I refer to these matters for the reason that Mr McCulloch appears to be someone who reacts poorly to things around him, including when he does not have all the relevant information. I have formed this view because of examples such as those referred to above. I also take into account my view, formed after hearing the evidence that Mr McCulloch is unlikely to correct his behaviour if he were to be reinstated. In the circumstances, it is unlikely that there would be the necessary trust and confidence on the part of Calvary about Mr McCulloch’s forward actions were he to be reinstated. I have formed the view that, because of the whole context of Mr McCulloch’s employment, if he were to be reinstated that Calvary would, for a large part of the time, be looking to what he did next, whether that be to make unfounded and serious complaints or to react badly to a relatively minor incident, such as happened here.

[86] I consider, in the circumstances, that Calvary’s apprehensions about the possibility of reinstatement are soundly and rationally based.

[87] As a result of the foregoing, I am satisfied in all circumstances that it would be inappropriate to reinstate Mr McCulloch and that instead I should give consideration to an order the payment of compensation

(a) the effect of the order on the viability of the employer’s enterprise

[88] There is nothing before me which would indicate that an order of compensation in and of itself would negatively affect the viability of Calvary Health Care Adelaide’s enterprise.

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

[89] Mr McCulloch’s employment with Calvary Health Care Adelaide was from January 2007, a period of about 7 ½ years. While this is a significant period, I find Mr McCulloch’s length of service with Calvary does not require an adjustment to be made to the order I propose.

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

[90] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”. The Full Bench of the Australian Industrial Relations Commission has observed the following in relation to these matters;

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

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

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the "anticipated period of employment". This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the "anticipated period of employment" are deducted. An example may assist to illustrate the approach to be taken.” 69 (endnotes omitted)

[91] At the time of his dismissal, Mr McCulloch had worked for Calvary Health Care Adelaide for 7 ½ years and was 68 years of age. 70

[92] In considering the whole of Mr McCulloch’s evidence, and taking into account that of the other witnesses, it is impossible to draw the conclusion that his employment with Calvary Health Care Adelaide would have continued to an unspecified date well into the future. Instead, the impression I have formed is of an employee who, on the one hand, was not entirely controlled in their conduct and who, for their own reasons, from time to time made serious, but less than well-founded, complaints, and, on the other hand, being someone who may well react poorly to circumstances he does not like.

[93] Had Calvary Health Care Adelaide chosen to issue a strongly worded final warning to Mr McCulloch, instead of dismissing him, it seems more likely than not that the final warning would not have corrected his behaviour.

[94] It was reasonable for Ms Tran and Mr Hart to take Mrs McCulloch and Ms Nasinki to task for where they were sitting and to instruct them not to sit or pray there at the statue of Mary again. While in all probability Mr Hart seemed annoyed, or even angry when he spoke with them, the evidence is that he was not unreasonably angry or that he was abusive to them. Mr McCulloch had a right to be privately annoyed that his wife had been upset at work by Mr Hart but it was unreasonable of him to react in the way he did.

[95] A relatively minor cause, such as the above, is more likely than not, to be sufficient to cause a repetition of Mr McCulloch’ misconduct. In his mind, I doubt that a warning would be enough for him to concede his behaviour was wrong in the recent past, notwithstanding the remorse he expressed in his written response to Calvary on 24 July 2014. The aggravation of a final warning, together with a further set of circumstances he did not like would no doubt be sufficient to cause a further argument or set of complaints.

[96] As a result of the foregoing, my assessment of Mr McCulloch’s anticipated period of employment is a period of no more than 8 weeks from his date of dismissal, being 28 July 2014. This assessment is before I take into account the requirements of s.392(3) of the Act, which requires that if I am satisfied that the misconduct of the Applicant contributed to the employer’s decision to dismiss him, any amount of compensation awarded by me must be reduced by an appropriate amount on account of the misconduct.

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

[97] Mr McCulloch submits that between the time of dismissal and the hearing, a period of just under 3 months, he has applied for 6 jobs and put out a flier for mowing lawns. 71 From these activities he has earned less than $500.

[98] These are relatively modest efforts by Mr McCulloch to mitigate his loss, even after taking into account his age of 68 and that he was employed on a part-time basis. 72 Notwithstanding, there were some efforts by Mr McCulloch to mitigate his loss, and I do not propose to amend the amount of compensation ordered for reason of a failure to mitigate loss.

(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

[99] At the time of his dismissal, Mr McCulloch received 4 weeks pay in lieu of termination and the payment of his accrued statutory entitlements. The payment in lieu of notice will be taken into account in my order for compensation.

[100] Mr McCulloch also earned the incidental amount referred to above of an amount less than $500. Because this is an undetermined and incidental amount, I will make no deduction for post-dismissal earnings from the amount of compensation I order.

(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

[101] There is no evidence before me in this regard, since at the time of the hearing Mr McCulloch indicated that he was not employed.

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

[102] The further matter that is relevant to the setting of compensation and requires being taken account of is section 392 (3) of the Act which requires that if the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the FWC must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.

[103] Mr McCulloch was dismissed for misconduct, and I am satisfied that his behaviour amounted to such, albeit at the lower end of what might be regarded as the scale of misconduct.

[104] Because of this assessment as to the nature of the misconduct and its seriousness, I consider the amount of compensation should be reduced by an amount of 20% on account of the fact that Mr McCulloch’s misconduct contributed to the employer’s decision to dismiss him.

CONCLUSION AND ORDERS

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

[106] I find that reinstatement is not an appropriate remedy in this case.

[107] I find that compensation is appropriate.

[108] The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5). 73

[109] The Full Bench in the Haigh v Bradken Resources Pty Ltd 74 has recently clarified the assessment of compensation and connected issues that require dealing with, including the deductions of amounts for misconduct, and consideration of the compensation cap. So far as is relevant to this matter, the Full Bench found;

[10] The frequently quoted case on compensation calculations is Sprigg v Paul Licensed Festival Supermarket in which a Full Bench of the Australian Industrial Relations Commission (AIRC) confirmed the following steps in determining compensation under the unfair dismissal provisions of the Workplace Relations Act:

“1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,

2. Deduct monies earned since termination,

3. Deductions for contingencies,

4. Calculate any impact of taxation,

5. Apply the legislative cap.”

[11] The legislation has been amended since that time by permitting a reduction in an amount otherwise payable if an employee’s misconduct contributed to the employers decision to dismiss. The Full Bench decision in Sprigg has also been the subject of comment by other Full benches. In Smith v Moore Paragon a Full Bench of the AIRC said:

“COMMENT IN RELATION TO THE GUIDELINES IN SPRIGG

[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers "appropriate" having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion "if the Commission considers it appropriate in all the circumstances of the case" to "make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement" subject to the Commission having regard "to all the circumstances of the case including" the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap' provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard "to all the circumstances of the case" including the matters listed in s.170CH(7) and subject to the `cap' provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”

[12] Full Benches of the Fair Work Commission have applied the approach in Sprigg generally in Tabro Meat Pty Ltd v Heffernan, Read v Golden Square Child Care Centre and Bowden v Ottrey Homes Cobram. It is clear from those authorities that any deduction on account of misconduct is also applied before the application of the legislative cap. One further clarification is needed. The assessment of the amount the employee would have received if the employment had not been terminated is referable to the entire circumstances including the basis on which the termination was found to be unfair. Where a procedural defect is the main reason for the termination being held to be unfair, this is a factor to be taken into account in determining the estimate of loss arising from the unfair dismissal.” 75 (references omitted)

[110] In relation to the matter of contingencies, the requirement is to make a deduction in order to “take account of matters which might otherwise adversely affect earning capacity” 76 in the anticipated remaining period of employment. I find there are none that ought be taken into account in this matter.

[111] Having regard to the considerations established by s.392 of the Act, and the criteria established by the FWC, I find that compensation should comprise a payment by Calvary Health Care Adelaide to Mr McCulloch calculated as follows:

Assessment of remuneration lost:	8 weeks projected lost income at the rate of $367.50 per week 77	$2,940.00
Employer superannuation contribution on above	9%	+ $264.60
LESS:	Monies earned since dismissal 4 weeks pay at the rate of $367.50 per week, and in addition an amount of 9% for the employer’s superannuation contribution (total $400.58 per week)	- $1,602.32
LESS:	Contingencies Nil	- $0.00
SUB-TOTAL	$1,602.28
LESS:	20% deduction on account of misconduct. 78	- $320.46
TOTAL	$1,281.82

[112] The above amount does not exceed the compensation cap applying at the time of dismissal.

[113] The compensation payment of $1281.82 will be taxed by the employer according to law, and is to be paid within 14 days of the Order issued with this decision.

[114] An Order to the above effect will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

Mr N Grealy for Mr McCulloch

Mr B Duggan for Mr Calvary Health Care Adelaide

Hearing details:

2014.

Melbourne:

October 21 and 22.

1 Employer Response Form, para 1.2

2 Exhibit R10, Attachment EP6

3 Employer Response Form, para 1.7; Transcript PN 1352

4 Exhibit A3, para 9 - 12

5 Ibid, para 16

6 Exhibit A2, paras 11 - 14

7 Transcript, PN 1560 - 1568

8 Exhibit R9, para 5

9 Exhibit R7, p3; Exhibit R5, p3

10 Exhibit R6, p3

11 Exhibit A2, para 19

12 Transcript at PN330.

13 Exhibit A2, para 26

14 Ibid, para 30

15 Transcript, PN 247

16 Ibid, para 31

17 Exhibit R10, attachment EP3

18 Ibid

19 Ibid, attachment EP4

20 Ibid, attachment EP6

21 Edwards v Giudice (1999) 94 FCR 561 [6]‒[7]

22 Budd v Dampier Salt Ltd (2007) 166 IR 407, at [15]; with reference to Briginshaw v Briginshaw (1938) 60 CLR 336 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171

23 Streeter v TelstraCorp Ltd (2008) 170 IR 1

24 Exhibit R8, para 4

25 Telephone conference

26 Exhibit R10, attachment EP1; and Exhibit R8, PL2

27 Exhibit R8, attachment PL1

28 Exhibit A2, para 33

29 Transcript, PN 1255

30 Transcript, PN 1272

31 Transcript, PN 1370

32 Transcript, PN 1385

33 Transcript, PN 1152 - 1156

34 Transcript, PN 1143 - 1146

35 Transcript, PN 1120 - 1123

36 Exhibit R10, paras 3 - 11

37 Exhibit R10, para 11

38 Exhibit R9, Attachment MH1

39 Transcript, PN 2098

40 Exhibit R10, EP6

41 Exhibit R9

42 Exhibit R10, EP5

43 Exhibit R10, para 11; Transcript, PN 1480 - 1496

44 Exhibit R7, Attachment TT1

45 Exhibit R5, BW1 and Exhibit R6, TC1

46 Exhibit R9, Attachment MH1

47 Transcript, PN 1749

48 Transcript, PN 1756 - 1757

49 Exhibit R9, Attachment MH1

50 Transcript, PN 77

51 Transcript, PN 1799 - 1800

52 Exhibit R8, Attachment PL1

53 Transcript, PN 1199 - 1209

54 Transcript, PN 1049

55 Exhibit R7, Attachment TT1 1

56 Exhibit R6, Attachment TC1

57 Exhibit R5, Attachment BW1

58 Exhibit R6, Attachment TC1

59 Exhibit R5, Attachment BW1

60 Chubb Security Australia Pty Ltd v Thomas (2000), Print S2679, at [41].

61 Exhibit R8, para 12

62 Exhibit R10, para 14

63 [2014] FWCFB 7198

64 Ibid, at [23] - [24]

65 Ibid, at [ 27] - [28]

66 Transcript, PN 92

67 Transcript, PN 1873 - 1879

68 Transcript, PN 1276 - 1284

69 Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109, at [33] and [34].

70 Exhibit A2, paras 1 and 4

71 Exhibit A2, paras 40 - 41

72 Ibid, para 2

73 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 32, and Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [33].

74 [2014] FWCFB 236

75 Ibid, at [10] - [12]

76 Wynn v NSW Insurance Ministerial Corporation (1995) 133 ALR 154 at 161-162 (per Dawson, Toohey, Gaudron and Gummow JJ), in Ellawala v Australian Postal Corporation (2000) Print S5109, at [37.

77 Exhibit A2, para 4

78 Haigh v Bradken Resources Pty Ltd[2014] FWCFB 236, at [12]

Printed by authority of the Commonwealth Government Printer

Mr John McCulloch v Calvary Health Care Adelaide

[2014] FWC 9191