Mr Perrin LeFebour v Prow Pty Ltd T/A Club Bay View

[2015] FWC 5072

[2015] FWC 5072

FAIR WORK COMMISSION

DECISION

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

Mr Perrin LeFebour
v
Prow Pty Ltd T/A Club Bay View
(U2014/199)

COMMISSIONER CLOGHAN PERTH, 28 JULY 2015

Application for relief from unfair dismissal.

[1] This is an application by Mr LeFebour (Mr LeFebour or Applicant) seeking a remedy for alleged unfair dismissal from his former employer, Prow Pty Ltd T/A Club Bay View (Employer).

[2] The application was made pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[3] On 16 January 2015, I issued Decision [2015] FWC 50 in which I was satisfied, pursuant to paragraph 394(2)(b) of the FW Act, that exceptional circumstances existed which led to a delay in the Applicant filing his application beyond the statutory timeline of 21 days after the dismissal took effect.

[4] I concluded the Decision by advising the parties that I would hold a conference to program directions for a hearing into the substantive merits of Mr LeFebour’s application.

[5] At the conference on 11 February 2015, the Applicant and Mr Heathcote of Counsel attended. The Employer’s representative did not attend.

[6] Directions were issued on 12 February 2015 for a hearing into the merit of Mr LeFebour’s application on 28 May 2015.

[7] At the hearing on 28 May 2015, the Applicant was represented by Mr S Heathcote of Counsel and the Applicant gave evidence on his own behalf.

[8] The Employer did not attend the hearing. No communication was received from the Employer as to why it was unable to attend the hearing.

[9] This is my decision and reasons for decision on whether Mr LeFebour was unfairly dismissed from his employment with the Employer.

RELEVANT LEGISLATIVE FRAMEWORK

[10] The relevant legislative provisions are as follows.

[11] Section 385 of the FW Act sets out the meaning of unfair dismissal as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) …
(d) …”

[12] The criteria for whether a dismissal was harsh, unjust or unreasonable can be found at s.387 of the FW Act and 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.”

RELEVANT BACKGROUND

[13] The relevant background to Mr LeFebour’s employment and the circumstances leading to his cessation of employment are set out in paragraphs [23] to [39] of Decision [2015] FWC 50 and it is unnecessary to repeat them.

CONSIDERATION

[14] Section 387 of the FW Act sets out the matters which the Commission must take into account in determining whether a dismissal was “harsh, unjust or unreasonable”. In seriatim, they are as follows.

s.387 (a) - was there a valid reason for the Applicant’s dismissal?

[15] A valid reason for dismissal is one that is “sound, defensible or well founded and not capricious, fanciful or spiteful”. The authority for this approach is found in the often cited case of Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at page 373 which reads as follows:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly’.”

[16] A valid reason for dismissal attempts to balance, in a practical way, the needs of employees and employers.

[17] When the reason for the dismissal relates to the employee’s conduct, it is necessary for the Commission to determine, on the balance of probabilities, whether the alleged conduct occurred, and if so, whether it was a sufficient reason for termination 1. Further,

“The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed on reasonable grounds after sufficient enquiry that the employee was guilty of the conduct which resulted in the termination”. 2

[18] On 2 December 2013, Dr Jon Sainken, a Director of Club Bay View (Club) advised the Applicant that “he had sold the Club”. On the same day, the Applicant was told that Mr Clark had “bought the Club” and had assumed control.

[19] When and who the Bay View Club was sold and bought by is not entirely relevant to these proceedings, however, it does contextualise some of the difficulties experienced by the Applicant regarding the reason for his termination of his employment.

[20] Between 2 and 12 December 2013, the Applicant worked when rostered at the Club.

[21] On 12 December 2013, the Applicant was told to take a “couple of weeks off” as Mr Clark was determining whether he could run the Bay View Club by himself and whether he needed Mr LeFebour. Mr Clark advised the Applicant that Dr Sainken would be paying him during the time he was directed to take off.

[22] At this point in time, Mr LeFebour was concerned regarding the on-going uncertainty of his employment and sought legal advice.

[23] The actual date of the Applicant’s dismissal was the subject of considerable disputation between the parties, however, the best evidence I have is the Employer’s letter of termination of employment dated 11 December 2013.

[24] The letter terminating Mr LeFebour’s employment relevantly reads:

“I am writing to inform you that effective immediately, your employment with Prow Pty Ltd at Club Bayview and The Avenue has been terminated as a result of my enquiries into the matters discussed with yourself and Daniel regarding issues of impropriety and missing funds.

The matter will be investigated further and may be referred to other authorities.”

[25] The letter is unsigned but the author is Mr Clark as Manager for Prow Pty Ltd.

[26] The Applicant did not receive a copy of his termination of employment until at a conference in the Commission on 26 August 2014.

[27] While the details of the “impropriety and missing funds” are not set out in the letter of termination of employment, the Employer’s initial response to the application relevantly states:

“1) The employee was in charge of the ATM both individually and together with the Manager.

2) There is a $30,000 deficit in the ATM funds which was not reported correctly, if at all.

3) This loss and its concealment constitutes serious misconduct and is an emergency in a small cash business. An employee involved cannot be allowed to continue at the workplace under such circumstances.

4) The business was trading poorly and becoming unprofitable.

5) This is a late night trading small business run largely by young people in an informal manner. There are no secretarial employees or back office operations. Most communications are verbal, email or text.

6) Perrin [Mr LeFebour] was let go verbally. At that time there were suspicions but one cannot be prematurely accusatory and it was too soon to alert the Police. He was merely told that he was no longer required.

7) In fact it is with reluctance that a Police Report has been made at all but the (documented) fact is that significant funds are missing and Insurers and Fairwork are now involved. Whether Perrin has taken anything or has mislaid the funds innocently this nevertheless indicates serious misconduct of an important area of his responsibilities to the Employer.

8) It is contended that the dismissal was fair and reasonable and in no way harsh under the circumstances. The loss to the Employer is harsh.”

[28] For the details of the alleged missing funds, Dr Sainken provided a “summary of findings and process by Adine Davis, Bookkeeper for Club BayView”.

[29] As I have already set out, no person attended to represent the Employer at the hearing.

[30] Theft from an employer is generally considered serious misconduct, warranting immediate dismissal.

[31] In the circumstances of Mr LeFebour’s dismissal, the best evidence from the Employer of its investigation into the matter is text messages exchanged between Dr Sainken and Mr LeFebour which read as follows:

“Jon [Dr Sainken] to Perrin: Jan 2, 2014 – 6.12pm

I understand but where do I find the $30K deficit that Adine has identified in the ATM?

Perrin to Jon: Monday, Jan 6 – 10.00 am

I was never informed of any variance in the ATM in my time working there. I mentioned the 2 occasions where I recalled the settlement did not match but the amount would be no where near $30k. If made aware of variances which would be apparent immediately it would have been easy to resolve any communicating with cash card and matching transactions etc.
If you have time this week I would like to meet with you. As this situation where I have done absolutely nothing wrong is having a massive impact on my life and I would like to resolve this ASAP.”

[32] These text messages occurred nearly one month after Mr Clark had terminated Mr LeFebour’s employment for “impropriety and missing funds”.

[33] Mr Heathcote, for the Applicant, submitted that:

“…where for no reason, for no fault of the applicant's part, the respondent has clumsily, carelessly and incompetently executed a dismissal without an apparent reason…” 3

[34] On the facts and evidence, it is difficult to disagree with Mr Heathcote.

[35] There is no dispute that an employer may summarily dismiss an employee for serious misconduct. However, in this case, the Applicant became aware of the alleged serious misconduct at the earliest on 6 January 2014, which is approximately a month after his employment was terminated.

[36] Where serious misconduct is alleged, the test for a valid reason remains the same – that is, whether the reason was “sound, defensible or well founded” and not “capricious, spiteful or prejudiced”.

[37] Was the Employer’s reason for dismissing Mr LeFebour sound, defensible or well founded?

[38] I have no sound evidence from the Employer regarding the alleged impropriety or theft. What documentation I have is not signed or was able to be tested.

[39] The alleged serious misconduct was not put to the Applicant until after he was dismissed. It was not put in writing or particularised. At most, it was put, in a generalised sense, in text messages.

[40] Mr LeFebour was not given the opportunity to respond to the allegations of serious misconduct because he did not know he had been dismissed for serious misconduct until a letter of termination was given to his approximately nine (9) months later, in a Commission conference.

[41] By any benchmark, the procedure adopted by the Employer was without rules, standards or fairness.

[42] Did the Employer carry out an investigation? To the extent of having a Bookkeeper’s Report, it would appear so – but that is as far as it went.

[43] Did the Employer attempt to establish any facts relating to the missing money? It carried out an ATM reconciliation by the Bookkeeper but I have no evidence to say it went any further, except to dismiss Mr LeFebour.

[44] Irrespective of whether the Employer is a small business run by young people or not, Mr LeFebour’s dismissal cannot be considered “sound, defensible or well founded”.

[45] I find, on the evidence, there was no valid reason for Mr LeFebour’s dismissal.

s.387(b) - notification of the reasons for termination of employment

[46] The Applicant became aware on 26 August 2014, by unsigned correspondence dated 11 December 2013 that his employment had been terminated for alleged “issues of impropriety and missing funds”.

[47] I am satisfied, for the reasons set out above, that Mr LeFebour was not aware of the reason for his dismissal, on the date he was dismissed.

s.387(c) - opportunity to respond

[48] For the reasons set out in [2015] FWC 50 and above, I am satisfied that the Applicant was not given an opportunity to respond to the reason why he was dismissed on 11 December 2013. At the time of the dismissal on 11 December 2013, Mr LeFebour did not know he had been dismissed or the reason why he had been dismissed.

s.387(d) - support person

[49] The Employer did not unreasonably refuse to allow Mr LeFebour to have a support person present to assist in any discussion relating to the dismissal because, to the extent there was any discussion regarding the dismissal, it occurred post the dismissal.

s.387(e) - unsatisfactory performance

[50] It appears from the documentary material provided to the Commission, this criterion is not relevant. The Employer’s reasons for Mr LeFebour’s dismissal relate to his alleged conduct.

s.387(f) - size of enterprise

s.387(g) - Human Resources

[51] Fairness, transparency and a disciplinary structure were all absent in this dismissal. The fact that the Employer is an employer of mainly young people in a night club, does not excuse the Employer from seeking, and adopting, better human resource practices to an alleged workplace disciplinary matter.

s.387(h) - other matters

[52] As I indicated above, the Employer failed to attend the hearing and defend Mr LeFebour’s application for a remedy for unfair dismissal. The Employer failed to attend to prove that it dismissed Mr LeFebour for serious misconduct.

CONCLUSION

[53] For the above reasons, I find that the Applicant was unfairly dismissed from his employment on 11 December 2013, pursuant to s.385(b) of the FW Act.

[54] I now turn to an appropriate remedy for Mr LeFebour’s unfair dismissal.

REMEDY

[55] Section 390 of the FW Act provides 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.”

[56] Section 392 of the FW Act provides for compensation as follows:

“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.

Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or
(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[57] The Applicant submitted that should his dismissal be found to be unfair, he is not seeking reinstatement and seeks $28 680.51 as compensation.

[58] In accordance with paragraph 390(3)(a), I am satisfied, for the reasons set out above, that reinstatement is inappropriate. Further, I consider an order for the payment of compensation appropriate in all the circumstances of the case.

[59] I now turn to the criteria for determining the amount of compensation.

s.392(2)(a) - the effect of the order on the viability of the employer’s enterprise

[60] This has not been raised by the Employer as an objection to the payment of compensation. Accordingly, I adopt a neutral position with respect to this criterion.

s.392(2)(b) - the length of the person’s service with the employer

[61] It is not contested that the Applicant was employed from 12 August 2012 to 11 December 2013 - a period of less approximately 16 months.

s.392(2)(c) - the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[62] The Applicant submits that, had he not been dismissed, the employment relationship would have come to an end at some point in the future 4.

s.392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[63] The Applicant mitigated his loss by seeking and obtaining alternative employment on 3 March 2014.

s.392(2)(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

[64] The Applicant did not earn any remuneration from employment from the date of dismissal on 11 December 2013 to 3 March 2014. Since 3 March 2014, the Applicant gave evidence that his annual remuneration is $58 000 per annum, inclusive of superannuation.

s.392(2)(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

[65] To the extent it is relevant, I have taken this criterion into account in the reasons set out below.

s.392(2)(g) - any other matter that the FWC considers relevant.

[66] The Employer did not attend the proceedings, so I have no view of whether there are any other matters it considers relevant.

s.392(3) - Misconduct reduces amount

[67] This criterion is not relevant for the purpose of reducing an amount of compensation.

[68] With respect to the calculation of compensation, the Commission has adopted, and endorsed by the Full Benches, the steps set out in Sprigg v Paul Licensed Festival Supermarket (1988) 88 IR 21. The steps are as follows:

• estimate the amount of money the employee would have received or would have likely to receive if the employment had not been terminated;



• deduct monies earned since termination;



• deduction for contingencies;



• calculate any impact of taxation; and



• apply the legislative cap.

[69] The above steps were determined pursuant to the Workplace Relations Act 1996. The legislation has been amended in the FW Act, to include a reduction in compensation of an amount payable, if an employee’s misconduct contributed to the employer’s decision to dismiss the employee.

[70] In the absence of any evidence from the Employer to the contrary, I have no reason to disbelieve the Applicant when he submits that during the course of his employment, he had no warnings regarding his conduct while employed.

[71] Despite asserting that Mr LeFebour was dismissed on 11 December 2013 for alleged impropriety and theft, the Applicant worked on 12 December 2013 5. This situation again reflects my unease with the Employer’s response to Mr LeFebour’s application.

[72] The facts are that Mr LeFebour had worked for the Employer for 16 months and there is no evidence to conclude that his behaviour would lead to termination of his employment. In such circumstances, I consider it reasonable to conclude that Mr LeFebour would have continued in employment for an unspecified period into the future.

[73] While Mr LeFebour asserts he was not paid for the period 2 December to 12 December 2013, he may wish to pursue the non-payment in another jurisdiction.

[74] Mr LeFebour was dismissed on 11 December 2013 and did not receive any remuneration until commencing employment elsewhere on 3 March 2014.

• 12 December 2013 to 3 March 2014 – 11 weeks and one (1) day.

[75] Mr LeFebour gave evidence that his salary was $60 000 per annum plus superannuation. This amount is consistent with Schedule D of his contract of employment 6.

• $60 000 ÷ 52.14 = $1 150.75 per week or $230.15 per day



• $12 658.25 + $230.15 = $12 888.40

[76] In addition, Mr LeFebour gave evidence that, during his period of employment, he accrued but did not take annual leave. In accordance with Clause 6.1 of his contract of employment, Mr LeFebour was entitled to twenty (20) days of annual leave for each completed period of 12 months employment and pro rata annual leave on a weekly basis.

[77] Mr LeFebour was employed from 12 August 2012 to 11 December 2013 or a period of one (1) year and 17 completed weeks.

• 4 weeks@ $1 150.75 per week = $4 603.00



• 4 weeks @ 38 hours per week = 152 hours



• 152 hours ÷ 52.14 weeks = 2.92 hours annual leave for each week worked.



• 17 completed weeks @ 2.92 hours per week = 49.64 hours



• $1 150.75 ÷ 38 = $30.28 per hour.



• 49.64 hours @ $30.28 per hour = $1 503.10



• Annual and pro rata annual leave = $4 603.00 + $1 503.10 = $6 106.10





• $12 888.40



• $ 6 106.10



• $18 994.50

CONCLUSION

[78] For the reasons set out above, I am satisfied that an appropriate remedy for Mr LeFebour’s unfair dismissal is not reinstatement and that compensation is appropriate.

[79] The order for compensation shall be an amount of $18 994.50. The gross amount is to attract the relevant superannuation and taxation required by law.

[80] The amount is to be paid by the Employer within fourteen (14) days of the Order (PR569823) attached to this Decision.

COMMISSIONER

Appearances:

S Heathcote of Counsel on behalf of the Applicant.

No appearance for or on behalf of the Respondent.

Hearing details:

2015:

Perth,

28 May.

 1   Brink v TWU PR922612 at paragraph [7]

 2   King v Freshmore (Vic) Pty Ltd S4213 at paragraph [24]

 3   Transcript PN21

 4   Transcript PN84

 5   Transcript PN60

 6   Exhibit A6

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<Price code C, PR569805>