Mr Neil Jon Lungay Colmenares v Caretodance Pty Ltd
[2024] FWC 3580
•24 DECEMBER 2024
| [2024] FWC 3580 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Neil Jon Lungay Colmenares
v
Caretodance Pty Ltd
(U2024/9293)
| DEPUTY PRESIDENT SLEVIN | SYDNEY, 24 DECEMBER 2024 |
Application for an unfair dismissal remedy – Applicant dismissed, dismissal not in accordance with the Small Business Fair Dismissal Code, dismissal not for a valid reason, procedurally unfair, and harsh. Reinstatement not appropriate. Compensation awarded.
Introduction
Mr Neil Jon Lungay Colmenares has applied under section 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. He was dismissed by CareToDance Pty Ltd (CareToDance) on 24 July 2024. CareToDance opposes the application.
The application was heard by way of conference. Mr Colmenares represented himself. CareToDance was legally represented. Mr Colmenares provide written material in support of his case and was questioned on that material. CareToDance relied upon witness statements of Christian Basescu, one of the owners of the business, Mr Emiliano Nunez, and Ms Kai Ni Huang. Mr Colmenares questioned each of CareToDance’s witnesses.
CareToDance contends that Mr Colmenares was not unfairly dismissed and raises three matters. First, it contends that Mr Colmenares was not dismissed as he resigned. Second, it contends that he was dismissed in accordance with the Small Business Fair Dismissal Code. Third, it contends that the dismissal was not harsh, unjust or unreasonable.
I find that Mr Colmenares was dismissed, that his dismissal was not in accordance with the Small Business Fair Dismissal Code, and that the dismissal was harsh, unjust or unreasonable. I have decided to award Mr Colmenares compensation in lieu of reinstatement of $24,496.54, less applicable taxation. These are my reasons.
Background
CareToDance provides dance lessons in ballroom and Latin social dancing at its studio in Rozelle in Sydney. It employs around 6 employees. This number varies from time to time. The employees are dance teachers with some administrative support provided by a receptionist. Dancing tuition is provided in group environments or private lessons. Classes occur between 1.00 pm and 9.00 pm Monday to Friday. Students enrol for semesters. They are taught in 45 minute classes.
Mr Colmenares commenced working for CareToDance on 23 January 2023 as a Dance Instructor. He was employed under a written contract of employment. His duties were to provide dance instruction, prepare lessons, sell dance programs, perform maintenance duties, attend promotional events, provide administrative support, and other duties as requested. CareToDance also sponsored Mr Colmenares for the purposes of his temporary skill shortage visa. At the time of his dismissal Mr Colmenares’ visa was due to expire in January 2025. Mr Colmenares worked from 1.00 pm to 9.00 pm Monday to Friday.
There was no issue with Mr Colmenares capacity to perform his job. I was provided with material, including endorsements from students, that indicated he was a dedicated instructor who was well liked by his students.
What is contested is how Mr Colmenares’ employment came to an end.
It was the practice of Mr Basescu, who in addition to being an owner of the business also manages the studio, to meet with the instructors at the beginning of each day to discuss the work to be performed that day. At the meeting held on 23 July 2024 Mr Basescu asked Mr Colmenares to take the rubbish out at the end of the evening.
It was the practice that instructors present at the end of the last lesson for the day to tidy up, including collecting any rubbish lying around the studio and either carrying it to a garbage bin which was outside the studio, or leaving it in the studio overnight to be taken to the bin at the beginning of the next day. There appeared to be different practices as to who would take the rubbish out, and when that would be done. On the 23 July 2024 it was to be taken out by Mr Colmenares.
At the end of the classes, at about 9.00 pm, on 23 July 2024 Mr Colmenares and another instructor Mr Nunez collected the rubbish. After doing so Mr Colmenares told Mr Nunez that as it was after 9.00 pm he would leave the rubbish in the reception area and take it to the bin at the commencement of the shift the following day. Mr Colmenares left. After Mr Colmenares left Mr Nunez took the rubbish out.
At around 9.10 pm Mr Basescu sent a text message to Mr Colmenares and Mr Nunez in the following terms:
Are you guys out of the studio
Mr Nunez responded immediately:
I just left cause I take out the rubbish
Mr Basescu responded: with two messages. One at 9.11 pm which simply said, “thank you”. The other was directed to Mr Colmenares at 9.12 pm in these terms:
@neilcolmenares_make sure as advised in the meeting today, please take the rubbish out at night
The following day Mr Basescu, Mr Colmenares and Mr Nunez were the only ones present at the daily meeting. There were different accounts of how long the meeting went and what was said. Mr Colmenares and Mr Nunez gave similar accounts. They said that the meeting was brief. They said Mr Basescu raised the issue of Mr Colmenares not taking the rubbish out the night before and told him to take it out that night. Mr Colmenares responded that his reason for not doing so was it was already after working hours and that he intended to take it out in the morning. He responded to the instruction to do it that night by stating that he would take the rubbish out if he could shorten his lessons to allow time to do so in working hours. Mr Basescu then told Mr Colmenares that if he would not follow directions he could leave. Mr Colmenares left the meeting and walked to the staff room.
During the conference Mr Basescu gave a different account of the meeting. He said that the meeting commenced with the usual discussion about what was to occur that day. He said that the topic of the rubbish was raised at the end of the meeting. He gave a similar account to Mr Colmenares and Mr Nunez regarding the key discussion about the rubbish and Mr Colmenares getting up and walking to the staff room. His account of what he said at the end of the meeting was, “You can leave if you don’t want to listen”.
Where there are differences in the accounts given of the meeting, I prefer Mr Colmenares and Mr Nunez’s version. I find that it was a short meeting. It commenced with Mr Basescu challenging Mr Colmenares about the rubbish. Mr Colmenares explained why he did not take it out the night before and responded that he would only take the rubbish out if he could finish his class early. It concluded with Mr Basescu telling Mr Colmenares to leave if he would not do as he was told.
I find that Mr Colmenares walked to the staff room. Mr Nunez followed. Mr Colmenares was upset about what Mr Basescu had said. Mr Basescu followed a few moments later and asked Mr Colmenares to meet with him in his office. Mr Colmenares went to Mr Basescu’s office and the two had a discussion.
There were differing accounts as to what was said during the one-on-one meeting. Mr Colmenares’ account was that after entering the office Mr Basescu started by asking if answering back to your boss in front of your colleague was the right thing to do in a business. This was said repeatedly as Mr Colmenares tried to respond. Mr Basescu told Mr Colmenares that if he wanted to say “no” he should not do so in front of colleagues. Mr Basescu then asked Mr Colmenares what he wanted to do with his job. Mr Colmenares replied that he wanted to work, and he wanted to work with a collaborative boss. Mr Basescu replied it was not about collaboration, but about respect. And started comparing Mr Colmenares Filipino respect with his own Eastern European views of respect, stating that is very different. Mr Basescu recounted visiting the Philippines, and describing the people there as more submissive, and expressed surprise that Mr Colmenares was not like that by saying no to his instruction.
Mr Colmenares described the conversation as ending with Mr Basescu presenting him with two options by saying the following:
You can stay here, and in our meetings, if I say you do this, you do that, you do it. If you have an issue, I don’t want you to open your mouth in front of everyone, but you have to book a private meeting with me. If you can’t do it, you can pick up your things, go home and the position is terminated instantly.
Mr Colmenares said he replied, “Option 2” and Mr Basescu told him to email accounts that he wishes to terminate his position.
Mr Basescu gave a brief account of the second meeting. It was as follows:
Me: I said it at many meetings in the past two years that if you would like to raise something with me or you disagree with me, you should set up a private meeting with me instead of disrespecting me in front of other staff members. Emi has been here just a second week. Do you think it was the right thing to do to disrespect me in front of him?
Neil: I am entitled to say no at the meetings. I will not take the rubbish out, unless I can make the lesson shorter.
Me: I have asked you already, and I will ask again and give you these two options. You either take my directions I give you at the meetings and if you have an issue, you will set up a separate meeting with me, or the other option is that you resign. So, would you like to stay or leave?
Neil: I choose the second and will leave.
Following the meeting Mr Basescu sent an email to his accounts team. A copy was sent to Mr Colmenares. It read:
Dear Accounts Team,
Neil has notified today the 24/7/2024 through a private meeting with myself around 12:30pm, that he wishes to terminate his position and 482 visa with CareToDance Pty Ltd and he left the Studio with his belongings.
Please advise how to proceed, Neil has been CC’ed in this email.
Thank you
Mr Colmenares responded to that email on 25 July 2024 in the following terms:
Dear Accounts Team
I believe Mr Basescu forgot to mention the backstory of what really happened yesterday.
Before Mr Basescu and I had a private meeting, Him, Emi and I had a normal meeting at the reception about me not bringing the trash out last tuesday 23/07/24. I respectfully told him that I collected the trash from the male and female toilets and I put all the used dishes in the dishwasher, while Emi did the staff and kitchen trash. I specifically told Emi that I will throw the trash out first thing once I arrive at work yesterday 24/07/24, since it was already outside of my working hours. I believe Mr Basescu is upset because when he blatantly said that it should have been me who should take the trash out not Emi, I answered him back ‘No’. After that meeting Mr Basescu wanted me to leave the premises. So then I went to the staff room and
packed my stuff.As I was packing my stuff, he came to the staff room and told me to go to his office to have a ‘private meeting’.
Mr Basescu, before you gave me the two options, you have already unfairly dismissed me in front of Emi. You were very harsh on how I never learn to shut up in a meeting and how I always talk back. When in fact, I wasn’t talking back at all, neither complaining, but merely communicating. Because as far as I know, meetings, public or private, are always a two-way conversation.
Mr Basescu, this is the second time I was unfairly dismissed. First was when I received an email from “accounts” 24/05/2024, stating that my contract was terminated due to not submitting a medical certificate, even though I had submitted it. They later retracted the termination after realizing their mistake, but the threat and stress it caused were unwarranted and unfair. Second is this.
Accounts Team, to set the record straight, I did not wish to terminate my position and 482 visa. Mr Basescu was the one who asked me to pack my stuff and leave and so I did.
Thank you
The next communication was an email from Mr Basescu sent at 10.32 pm on 27 July 2024. The email attached three documents; a termination of employment letter dated 25 July 2024, a final written warning dated 17 May 2024, and a letter entitled Abandonment of Employment. The email required Mr Colmenares to return all company property to CareToDance by Tuesday 30 July 2024.
The first attachment to the 27 July 2024 email was entitled termination letter. It was signed by Mr Basescu. The letter was in the following terms:
Dear Neil Jon Lungay Colmenares,
Following the final written warning issued to you on 17th May 2024, this letter serves as formal notice of the termination of your employment with CareToDance Pty Ltd, effective immediately.
Reasons for Termination:
1.Repeated Tardiness and Early Departures: As per our policy and your signed Employment Contract dated 20th November 2022, it is clearly stated that employees must adhere to the stipulated working hours. Despite the final written warning issued to you on 17th May 2024, you have continued to arrive late to work on more than 18 occasions, resulting in a cumulative delay of over 2 hours. Additionally, you have consistently finished work earlier than the required 9:00 PM. This persistent disregard for company policies on attendance is unacceptable and constitutes grounds for termination.
2. Insubordination: On Thursday, 24th July 2024, around 12:30 PM, you addressed one of the Directors, Mr. Cristian Basescu, in a rude and disrespectful manner. You explicitly stated your refusal to obey a directive and repeatedly indicated your unwillingness to comply. This insubordination violates our company’s code of conduct and undermines the authority of our management team.
Clause Reference: “The Employee will also perform such other duties as the Employer may allocate to the Employee from time to time.” (Full Time Employment Agreement 2022).
3. Fraternization Breach: Your involvement in an inappropriate relationship with a client, specifically Lynn Chien, is a direct violation of our fraternization policy, as stated in your Employment Contract. This breach of professional boundaries compromises the integrity of our organization and is grounds for immediate dismissal. We have documented proof of this violation should it be required for further review.
Clause Reference: “The Employee must not, without the Employer’s prior written consent, undertake any other employment or be engaged in any activity or business (including producing any income from personal skills or efforts as an individual) that competes or is in conflict with the Employer’s business or hinders the performance of the Employee’s duties, responsibilities and obligations or may be likely to do so” (Full Time Employment Agreement 2022).
4. Failure to Achieve Required Certifications: As outlined in your Employment Conditions, achieving the Associate Bronze and Full Bronze exam is mandatory for your role. Your failure to pass these examinations demonstrates a lack of competence necessary for your position, further justifying this termination.
Clause Reference: “The Employer may terminate this agreement at any time without prior notice and without payment in lieu of notice if, in the Employer’s sole discretion, the Employee... fails any dance or theory examination... is not an associate bronze professional standard passed by a minimum of 80% within the first 6 months of their employment... is not a full bronze professional standard passed by a minimum of 85% within the first 12 months of their employment. (Full Time Employment Agreement 2022).
5. Abandonment of Employment: Your continued absence from work without proper notification or valid reason constitutes abandonment of employment. This behaviour demonstrates a clear disregard for your responsibilities and obligations towards CareToDance Pty Ltd.
6. Three Warning Policy: According to our three-warning policy, any employee who has been issued three formal warnings for any breaches of the company’s policies is subject to termination. You have been issued with multiple warnings and have not rectified your behaviour.
Clause Reference: “Any breach of the Employer’s policies may be considered misconduct and may result in disciplinary action or termination of the Employee’s employment. The Employee must participate and cooperate with the Employer in any investigation of such breaches”(Full Time Employment Agreement 2022).
Please note that any one of these reasons is sufficient grounds for termination. However, you have accumulated six separate reasons, further necessitating this action.
Given these breaches of our policies and your Employment Contract, we have no alternative but to terminate your employment with immediate effect. Your last day with CareToDance was on Tuesday the 23rd of July 2024. You are required to return all company property in your possession, including keys, identification cards, and any other items belonging to CareToDance Pty Ltd.
Please be advised that your final pay check, including any accrued leave entitlements, will be processed and made available to you as per the company’s payroll procedures.
We regret that this action has become necessary and wish you the best in your future endeavours.
Sincerely
The third attachment to the letter was entitled Abandonment of Employment. It was signed by Mr Basescu. It read:
Dear Neil Jon Lungay Colmenares,
I refer to your email to dated 25 July 2024.
Your recollection of events is inaccurate and misleading.
On 24 July 2024, after our dispute in front of staff, I directed you to attend my office so that we could discuss the situation. In our discussion I indicated to you that either you could remain as an employee and follow my instructions, or you can leave. You confirmed to me that you wished to resign immediately and afterwards took your belongings and left the studio. You did not contact me for the rest of the day and have since not returned.
At no point in our discussions did I direct you to leave the premises or indicate to you that your employment was terminated. Instead, I left that option to you and you indicated you wished to resign.
Although I accept your resignation, clause 14(b) of your Employment Agreement dated 20
November 2022 requires that you provide 8 weeks’ written notice of your resignation.As you have not returned to work, the company considers that you have abandoned your employment. As you have provided no notice period for the termination of your employment, you will forfeit any remuneration from the date of your termination, pursuant to clause 14(b) of your Employment Agreement. You will be paid your accrued statutory leave entitlements and unpaid salary up to 24 July 2024.
I remind you of your confidentiality and intellectual property obligations which remain following the termination of your employment and direct you to comply with all post termination obligations set out in the Employment Agreement.
On 9 August 2024 Mr Colmenares lodged the current application claiming that he was unfairly dismissed.
Consideration
Section 390 of the Act provides that the Commission may order a person’s reinstatement, or the payment of compensation to a person if satisfied that the person was protected from unfair dismissal and was unfairly dismissed. Section 382 describes when a person is protected from unfair dismissal. There was no dispute that Mr Colmenares was protected from unfair dismissal, and I find that he was. The next question is whether he was unfairly dismissed.
Section 385 relevantly provides that a person has been unfairly dismissed if the Commission is satisfied of four things: the person has been dismissed; the dismissal was harsh, unjust or unreasonable; the dismissal was not consistent with the Small Business Fair Dismissal Code, and the dismissal was not a case of genuine redundancy.
CareToDance contends that Mr Colmenares was not unfairly dismissed and raises three matters under s. 385. First, it contends that Mr Colmenares was not dismissed as he resigned. Second, it contends that he was dismissed in accordance with the Small Business Fair Dismissal Code. Third, it contends that the dismissal was not harsh, unjust or unreasonable.
Was Colmenares dismissed?
Section 12 of the Act defines dismissed by referring to s386. Section 386(1) provides that a person has been dismissed if:
(a)the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b)the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
A Full Bench of the Commission considered the two limbs of s.386(1) in Bupa Aged Care Australia Pty Ltd v. Tavassoli [2017] FWCFB 3941. After considering in detail the case law associated with the expression “terminated on the employer’s initiative” including notions of constructive dismissal and forced resignation, the Full Bench said:
[47] Having regard to the above authorities and the bifurcation in the definition of “dismissal” established in s.386(1) of the FW Act, we consider that the position under the FW Act may be summarised as follows:
(1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the “heat of the moment” or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign. Although “jostling” by the employer may contribute to the resignation being legally ineffective, employer conduct is not a necessary element. In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer.
(2) A resignation that is “forced” by conduct or a course of conduct on the part of the employer will be a dismissal within the second limb of the definition in s.386(1)(b). The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probably result of the employer’s conduct such that the employee had no effective or real choice but to resign. Unlike the situation in (1), the requisite employer conduct is the essential element.CareToDance contends that Mr Colmenares resigned at the conclusion of the second meeting on 24 July 2024 with Mr Basescu in his office. It submits that he was given the option of leaving and he chose to do so. CareToDance asserts that Mr Basescu’s account of the resignation was provided in the email of 24 July 2024 and that, while Mr Colmenares disputed that he resigned in his reply of 25 July 2024, he failed to return to work.
I find that Mr Colmenares was dismissed at the meeting on 24 July 2024. There were two meetings. The first, the daily meeting at which Mr Nunez was present. Which ended with Mr Basescu inviting Mr Colmenares to leave. Mr Basescu’s invitation to leave at the first meeting was supplanted by his request in the one on one meeting shortly after. At the conclusion of the second meeting Mr Basescu presented Mr Colmenares with an ultimatum to obey his directions or leave. There was a contest in the evidence whether Mr Basescu used the word resign. It is of no consequence, but I prefer Mr Colmenares account that he used the word leave. Even if the word resign was used, I would consider Mr Colmenares choice of what both referred to as the second option meets the description in BUPA of a decision made in a state of emotional stress or mental confusion such that Mr Colmenares could not reasonably be understood to have, by taking the second option, conveyed a real intention to resign.
The correspondence which followed where Mr Basescu stated in his email of 24 July 2024 that Mr Colmenares wished to terminate his position and 482 visa with CareToDance and Mr Colmenares’ response on 25 July 2024 making it clear that he did not wish to terminate his position and 482 visa to fortifies my view that Mr Colmenares did not intend to and in fact did not resign. His employment did end on 24 July 2024, but it was brought about by the actions of Mr Basescu.
The email from Mr Basescu on 27 July 2024 simply added confusion to the termination of Mr Colmenares employment. It claimed to accept Mr Colmenares resignation, asserted that Mr Colmenares had abandoned his employment while at the same time purporting to dismiss him on various counts. I find that the email was of no effect because Mr Colmenares employment had already ceased on 24 July 2024 by Mr Basescu dismissing.
Was the dismissal consistent with the Small Business Fair Dismissal Code?
CareToDance raised that the dismissal was not unfair because it complied with the Small Business Fair Dismissal Code. The argument was put as a factor to be considered under s. 387(f) and (g) which refer to the size of the employer’s business as factors to be taken into account when considering whether a dismissal was harsh, unjust or unreasonable for the purposes of s. 385(b). The question arises separately, however, and directly under s. 385(c), which requires for the purpose of determining that a person has been unfairly dismissed whether the Commission is satisfied that the dismissal was not consistent with the Small Business Fair Dismissal Code. The effect of s.385(c) of the Act is that when a dismissal is consistent with the Code, it is not an unfair dismissal, and the application must then be dismissed.
The Small Business Fair Dismissal Code is defined in s. 388:
388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
The Code came into operation for the purposes of s. 388(1) on 1 July 2009. It relevantly reads:
The Code
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.
Section 23 provides that an employer is a small business employer if the employer employs fewer than 15 employees. At the time Mr Colmenares was dismissed CareToDance employed fewer than 15 employees. The question is whether in dismissing Mr Colmenares CareToDance complied with the Code.
Mr Colmenares was not dismissed for serious conduct. The paragraph of the Code dealing with summary dismissal does not apply.
CareToDance contends that Mr Colmenares was issued a number of warnings about his conduct. It relied upon a final written warning dated 17 May 2024. That warning was attached to the email of 27 July 2024. It referred to tardiness and disrespectful behaviour and insubordination and relevantly stated:
Disrespectful Behaviour and Insubordination:
In addition to your tardiness, you have repeatedly exhibited rude and disrespectful behaviour towards the directors of CareToDance. This includes questioning business decisions, talking over the directors’ multiple times, rolling your eyes, failure to follow orders, reluctancy to perform assigned tasks, shifting responsibilities onto other colleagues and displaying a general lack of respect in front of other staff members. Specific instances include but not limited to:
28/09/2023; 16/11/2023; 16/5/2024; 17/5/2024.
Such behaviour is unacceptable and has a negative impact on our team and overall productivity. We expect all employees to adhere to our standards of professional conduct and demonstrate a commitment to their responsibilities
Final Warning:
This is your final written warning. You are expected to correct your behaviour immediately. We will monitor your behaviour and performance over the next 4 months. Any further instances of tardiness or disrespectful behaviour will result in the termination of your employment with CareToDance Pty Ltd. Additionally, as your conduct continues to violate our professional standards, we will proceed with cancelling your visa.
This warning meets the description of a warning in the Code, in so far as it provides reasons why Mr Colmenares was at risk of being dismissed. The reasons appeared to be based on Mr Colmenares’ conduct. The warning was in writing and stated that Mr Colmenares risked being dismissed if there was no improvement. It is a warning that related to the circumstances for which Mr Colmenares was dismissed. The events on the evening of 23 July 2024, where Mr Colmenares failed to undertake the assigned task of putting out the rubbish and his reluctance on 24 July 2024 to take the rubbish out at the finish of his shift on 24 July 2024, and Mr Basescu’s concerns about how Mr Colmenares spoke to him at the meeting with Mr Nunez on 24 July 2024 are caught by the warning.
Mr Basescu indicated that this warning was emailed to Mr Colmenares on 17 May 2024. He also said that at no stage did he discuss the warning with Mr Colmenares. Mr Colmenares did not contest that the warning was emailed to him and confirmed that he was never given the opportunity to discuss the warning with Mr Basescu. He also had no recollection of the instances referred to in the warning and those matters had not been explained to him.
The procedural requirements of the Code require the employer to provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. The evidence is that no such discussions occurred. It follows that there were no discussions with Mr Colmenares where he could have another person present to assist. Those two requirements of the Code were not met.
As CareToDance failed to meet the procedural requirements in the Code I am satisfied for the purposes of s. 385(c) that the dismissal was not consistent with the Code.
Was the dismissal harsh, unjust or unreasonable?
The third question is whether the dismissal harsh, unjust or unreasonable for the purposes of s. 385(b). In considering that question I must take into account the matters set out in s. 387 of the Act.
Section 387(a) directs my attention to whether there was a valid reason for the dismissal related to Mr Colmenares’ conduct. Mr Colmenares was dismissed on 24 July 2024 due to his failure to take out the rubbish on 23 July 2024 and his reluctance to do so on 24 July 2024. CareToDance did not press the reasons in the letter of 27 July 2024 other than to point to insubordination in relation to the incident concerning taking out the rubbish. It was not open to rely on the reasons in the letter that went beyond those events in in any event as Mr Colmenares was dismissed 3 days earlier and the reason was the events of 23 and 24 July 2024.
The failure to take out the rubbish on 23 July 2024 did not justify dismissal. So far as it could be considered misconduct for failing to follow an instruction it was a minor matter. Mr Colmenares cleaned the studio at the end of his classes, was aware he had to take the rubbish out, but decided to follow a common practice of not doing so at the end of the night and intended to do so the next day. The warning issued to Mr Colmenares on 17 May 2024 indicated that there had been some concerns about his failure to perform assigned tasks, but I do not consider that the failure to take the rubbish out at the end of a shift to be of such moment that it met the description of a failure to perform an assigned task as Mr Colmenares intended to take the rubbish out the next day but was prevented in doing so by Mr Nunez taking it out after Mr Colmenares left. I note there was a practice of not taking the rubbish out at night but taking it out the following day and Mr Colmenares was willing to perform the task in accordance with that practice.
A further aspect of Mr Colmenares’ conduct that led to his dismissal was his reluctance to take the rubbish out on 24 July 2024 unless he could finish his classes early. Again, I do not regard this as conduct justifying dismissal. Mr Colmenares was willing to take the rubbish out the next morning. The failure to take the rubbish out in the evening was not of such moment that it was going to impact on CareToDance’s business in any significant way, if at all. This was a minor matter that did not justify dismissal.
I also find that taken together Mr Colmenares conduct regarding the rubbish on 23 and 24 July 2024 did not amount to misconduct justifying dismissal. My finding includes the conduct of Mr Colmenares during the meeting with Mr Basescu and Mr Nunez. Mr Basescu expressed the view that the way Mr Colmenares spoke to him at the meeting, in particular his refusal to take the rubbish out, amounted to insubordination. Mr Colmenares objected to taking the rubbish out after his shift finished and indicated he would take it out in the evening if he could end his last class early to allow time to do so. This was a minor matter that may have been resolved if Mr Colmenares was more flexible in his attitude to working time but his inflexibility and the manner in which he raised his concern was not insubordination. It was not conduct that justified dismissal either on its own or in the context of the issues concerning the removal of the rubbish. Mr Colmenares was entitled to express the views that he did. The exchange should not have resulted in Mr Colmenares’ dismissal.
My findings under s. 387(a) weigh in favour of a finding that the dismissal was harsh, unjust or unreasonable.
Section 387(b) and (c) go to whether the employee was notified of the valid reason related to capacity or conduct and given an opportunity to respond to those matters. CareToDance submitted that it had written to Colmenares on 28 August 2023 as well as the letter of 17 May 2024 raising issues with his conduct. The 28 August 2023 communication was an email. It went to the issue of tardiness. It was said to be a second warning and that if a third warning was issued on the topic, then Mr Colmenares’ employment status may be affected. The letter did not apply to the circumstances that led to the dismissal and is not relevant to the dismissal which had nothing to do with tardiness.
I have dealt with the warning letter of 17 May 2024 above. I do not consider it to constitute a notification as contemplated by ss. 287 (b) and (c). It was not notice that he would be dismissed for the type of conduct that occurred on 23 and 24 July 2024.
So far as the meeting in Mr Basescu’s office on 24 July 2024 could be considered notification of the reason for dismissal I consider that the way in which that discussion occurred did not amount to the type of notice contemplated by s. 387(b). The discussion resulted in Mr Colmenares being given an ultimatum rather than the type of discussion a reasonable employer may hold with an employee who was faced with dismissal for misconduct. I also find that Mr Colmenares was not giving an opportunity to respond to the reason for dismissal.
Instead, I find that the procedure followed by Mr Basescu and the way in which Mr Colmenares was treated on 24 July 2024, having been called to a meeting and given an ultimatum about his employment, was contrary to with the procedure contemplated by s. 387 (b), (c) and weighs in favour of a finding that the dismissal was harsh, unjust or unreasonable.
Section 387(d) goes to whether there was an unreasonable refusal to allow the employee to have a support person present to assist at any discussion relating to dismissal. Mr Colmenares did not ask to have representation and so it was not refused. CareToDance submits that as Mr Colmenares did not ask to be represented CareToDance complied under 387(d) and this weighs in favour of finding that the dismissal was not harsh, unjust or unreasonable. I reject the submission. As no request was made there was no refusal, and the matter is neutral in my consideration.
Section 387(e) relates to dismissals for unsatisfactory performance. There was no suggestion that Mr Colmenares did not perform his job as a dance instructor well. The evidence of commendations from his students suggest he was a good instructor.
Section 387(f) and (g) go to the size of the employer’s enterprise or lack of dedicated human resources management specialists and how they may have had an impact on the procedures followed in effecting the dismissal. CareToDance is a small business. Its lack of dedicated human resources may explain the way the dismissal occurred. I note the practice of sending emails to the Accounts Team. I was not told who the Accounts Team were or if they had any human resources expertise. Nor was I told whether the Accounts Team was a dedicated team supporting the business. I expect not. I consider this matter neutral in my assessment of fairness.
CareToDance contends that while it was a small business it nonetheless provided procedural fairness to Mr Colmenares. It also submitted that it complied with the Small Fairness Dismissal Code. I have dealt with these matters earlier. There was not procedural fairness as contemplated by s. 387 (b) and (c) and the Code was not followed. I reject the submission.
Section 386(h) requires that I consider other relevant matters. CareToDance submitted that relevant to this paragraph I should take into account that Mr Colmenares resigned, alternatively he abandoned his employment, and thirdly he did not make any attempt to return to work. I have already found Mr Colmenares was dismissed. There was no resignation. As to whether he abandoned his employment, in the correspondence of 25 July 2024 Mr Colmenares said he did not want to terminate his employment. He quite clearly did not abandon his employment. In his email Mr Colmenares said that he believed he had been dismissed the day before. There is no basis for CareToDance claiming, either in its letter of 27 July 2024, nor its submissions in these proceedings, that the employment came an end because Mr Colmenares abandoned his employment. These matters do not tell against a finding that the dismissal was harsh, unjust or unreasonable.
There is one matter in the material that I find relevant to the dismissal. Mr Colmenares was from the Philippines. He was recruited by CareToDance to fill a skill shortage. CareToDance sponsored Mr Colmenares so that he could obtain a visa to allow him to work. He relocated to Australia to work for CareToDance. Mr Colmenares travelled from overseas to fill a skill shortage, and he performed well in performing the work for which he was recruited. I consider these matters weigh in favour of a finding that it was particularly harsh to dismiss Mr Colmenares for such a minor matter when considered against this background.
My conclusion after considering the matters in s. 387 is that Mr Colmenares dismissal was harsh, unjust and unreasonable.
Accordingly, I find that Mr Colmenares was unfairly dismissed.
Remedy
Mr Colmenares did not seek reinstatement. He does not want to work in a hostile environment. CareToDance is a small workplace. I find the relationship has broken down and reinstatement is inappropriate.
Mr Colmenares seeks compensation. I am satisfied that it is appropriate to make an order for payment of compensation in lieu of reinstatement. CareToDance submits that two factors should be taken into account in determining the amount of compensation. First, that Mr Colmenares had only worked for CareToDance for less than two years. Second that he had engaged in misconduct and the compensation should be reduced on account of that misconduct. I will consider those matter as well as the other matters required by s. 392.
Subsection 392(2) of the Act requires all the circumstances of the case be taken into account when determining an amount to be paid as compensation in lieu of reinstatement. The subsection requires me to consider the matters listed in s. 392 (2)(a) to (g). In relation to paragraph (a) I note that there is no suggestion that an order for compensation will have an impact on the financial situation of the business. For the purposes of s. 392(b) I note that Mr Colmenares commenced work for CareToDance in January 2023 so only worked for the company for 18 months.
In relation to paragraph (c), there is some uncertainty associated about how long Mr Colmenares would have remained with the business. CareToDance had raised concerns about his conduct in its letter of 17 May 2024. The specific issues referred to, such as tardiness, had been resolved and there was only a general concern described as insubordination that might be said to still have currency at the time of the dismissal. I do not regard those matters as suggesting that the employment would have ended by Mr Colmenares being validly dismissed as a result of his conduct in the near future. There appeared to be some tension in the relationship between Mr Colmenares and the owners of the business. That tension did not prevent him from teaching his dance classes to a high standard. Mr Colmenares said that he certainly would not have left the business before the end of the current semester, which ran until the end of September 2024. Another factor is that his visa was valid until January 2025.
Applying this consideration involves some speculation, and my view is that Mr Colmenares would have continued to work for the company at least until his visa expired in January 2025. I was not provided with the visa, but I understand it to have been a 2 year visa which would have expired around 23 January 2025. Had he worked for that time he would have earned a further 26 weeks’ pay. For the purposes of giving that time a monetary value for the purposes of calculating a compensation order Mr Colmenares’ weekly rate, derived from the salary set out in his contract of $62,229.18, was $1,196.72 per week. He would have received 26 weeks further pay, or $31,114.69
As to mitigation, which is mentioned in s. 392(2)(d), Mr Colmenares sought and gained other employment. He started in a regional dance company in late October 2024 albeit on reduced hours and pay. He provided a pay slip from 4 November 2024 from the other dance company. The payslip indicates that he worked for 1 week at 15 hours per week and was paid at a salary of $31,286.00 or $601.65 per week. For the purposes of s.392(2)(e) and (f) Mr Colmenares has received earnings to date of since the dismissal and that must be taken into account in making the order.
Section 392(2)(g) requires me to consider any other matter I consider relevant. I do not consider any other matter relevant.
The approach taken in the Commission to the assessment of the quantum 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.[1] Put briefly, it involves estimating the remuneration the employee would have received but for the dismissal, deducting monies earned since termination, discounting that amount for contingencies and assessing the tax implications to ensure no adverse impact on the employee.
Section 392(5) provides that an order for compensation can be no more than 26 weeks’ pay.
On the basis that Mr Colmenares’ relevant rate of pay derived from the salary set out in his contract which was $62,229.18, amounted to $1,196.72 per week, Mr Colmenares’ loss arising from the dismissal was as follows:
Projected earnings 2/7/24 to 23/1/25 26 weeks $31,114.69 Less earnings since the dismissal: 8 weeks at $601.65 ($4,813.20) Less expected earnings up to the time of the order: 3 weeks at $601.65 ($1,804.95) Earnings lost: $24,496.54
I consider that Mr Colmenares should receive compensation of $24,496.54 in lieu of reinstatement. This amount will be subject to taxation which I do not regard as adversely impacting Mr Colmenares.
Under s.292(3) I may reduce this amount if the employee’s conduct warrants doing so. I do not propose to do so here. Mr Colmenares conduct did not justify a reduction in the amount of compensation.
Conclusion
For the reasons outlined I consider that Mr Colmenares was unfairly dismissed and will order that CareToDance pay him an amount of compensation of $24,496.54 less applicable taxation in lieu of reinstatement.
An order requiring payment in this amount will issue separately. CareToDance will be given 21 days to pay this amount. This timeframe will also be included in the order.
DEPUTY PRESIDENT
[1] (1998) 88 IR 21
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