Mr Yuhannis Bin M Yusuf v The Trustee for Lambchri Family Trust
[2024] FWC 1263
•16 MAY 2024
| [2024] FWC 1263 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 —Unfair dismissal
Mr Yuhannis Bin M Yusuf
v
The Trustee for Lambchri Family Trust
(U2024/616)
| DEPUTY PRESIDENT MASSON | MELBOURNE, 16 MAY 2024 |
Application for an unfair dismissal remedy – jurisdictional objections raised – whether Applicant dismissed – whether dismissal consistent with Small Business Fair Dismissal Code - jurisdictional objections dismissed – dismissal found to be unfair – reinstatement not appropriate - compensation ordered.
Introduction
This decision concerns an application made by Mr Yuhannis Bin M Yusuf (the Applicant) for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009 (the Act). The Applicant who was employed by The Trustee for Lambchri Family Trust (the Respondent) alleges he was dismissed on 17 January 2024. The unfair dismissal application was lodged by the Applicant on 18 January 2024.
On 18 March 2024, the Respondent filed its Form F3 response to the unfair dismissal application in which it raised a jurisdictional objection to the application, that being the Applicant was not dismissed.
The matter was listed for determinative conference/hearing before me on 13 May 2024 to deal with both the jurisdictional objection and the merits of the application. Both parties filed material in advance of the determinative conference/hearing on 13 May 2024 in accordance with directions issued. The Applicant appeared and gave evidence while Mr Lambros Flaounas (Director) appeared on behalf of the Respondent, gave evidence and also called Mr Zulhaifiz Bin Zaid (Senior Driver/Storeperson) to give evidence.
Background and evidence
Mr Flaounas states that the Respondent has no associated entities, owns and operates the Bedshed Hawthorn store and its accompanying warehouse located in Dandenong South, and at the time of the Applicant’s cessation of employment employed seven employees. The Applicant commenced employment with the Respondent at its Dandenong South warehouse on 26 July 2021 as a warehouse assistant/truck driver, was required to work a minimum of 38 hours per week from Tuesday to Saturday plus regular additional overtime and at the time of the cessation of his employment was in receipt of a flat hourly rate of pay of $32.50[1] for all ordinary hours of work and received overtime penalty rates for any additional hours worked. In the six months prior to the cessation of his employment the Applicant earned $34,929.00 which averaged $1,343.42 per week[2]. He was covered in his employment by the Storage Services and Wholesale Award 2020[3] and the Road Transport and Distribution Award 2020[4].
The Applicant states that his duties involved him working in the warehouse on Tuesday and Wednesday of each week preparing deliveries for the following day, sorting rubbish, cleaning the warehouse, receiving supplier deliveries, and driving a forklift, the latter of which tasks he says he had been doing for a few years without a forklift license in the full knowledge of Mr Flaounas. From Thursday to Saturday the Applicant was engaged in deliveries which required him to drive a truck[5]. Mr Flaounas took issue with the Applicant’s evidence that he was not required to drive on Tuesdays and Wednesdays and explained that the Applicant had chosen not to drive those days which meant Mr Bin Zaid was required to do delivery driving on those days. Mr Flaounas accepted that any concerns he held regarding the Applicant not driving on Tuesdays and Wednesdays had not been raised with the Applicant.
On 16 January 2024, the Applicant states he arrived at work and found that his truck was already loaded and that the volume of goods in his truck to be delivered was a lot more than his colleague Mr Bin Zaid’s truck. In checking the contents of the truck, he noticed that one mattress was missing which on raising with Mr Bin Zaid was assured that the mattress had already been dropped off. When the Applicant subsequently called Mr Flaounas to inform him about the ‘missing’ mattress he says he was rebuked despite his attempts to explain the situation to Mr Flaounas[6].
On 17 January 2024, the Applicant again arrived at work and observed that his truck was again fully loaded with mainly heavy items. He immediately asked Mr Bin Zaid who was on the forklift why he hadn’t divided the loads evenly between the two trucks. According to the Applicant this was not the first time there had been an uneven load allocation between himself and Mr Bin Zaid.
Mr Bin Zaid explained that based on the required deliveries on 17 January 2024, he arrived at work early that day and loaded up the 1st truck which he was due to drive that day and was halfway through loading the 2nd truck which the Applicant was due to drive when the Applicant arrived for work after 8.00am. In dividing the loads between the 1st and 2nd trucks Mr Bin Zaid explained that the 1st truck had a smaller load as it was being driven to Ballarat while the 2nd truck had a bigger load requiring ‘local’ deliveries. He acknowledged that the Applicant was unhappy with the distribution of the loads between the two trucks and an argument ensued. Towards the conclusion of the argument Mr Bin Zaid offered the Applicant the option of taking the 1st truck but he (Mr Bin Zaid) would retain assistance of the more experienced offsider given the number of deliveries required with the 2nd truck. He states that the Applicant was also unhappy with this proposal[7]. The Applicant agreed with Mr Bin Zaid’s description of events that led to the argument. The Applicant also explained that he was unhappy at the option proposed of him taking the 1st truck and being accompanied by a less experienced offsider as he claimed the load in the 1st truck actually involved heavier items that would have required the assistance of a more experienced offsider. Mr Bin Zaid disputed this assessment.
Mr Bin Zaid also advised the Applicant during their argument that if he was unhappy, he should complain to Mr Flaounas, a course of action the Applicant states he saw no point in as he believed that Mr Flaounas would inevitably side with Mr Bin Zaid. He says he then advised Mr Bin Zaid that that he did not want to work that day given the escalation of their argument and the potential he saw for it to escalate further. He then left the site at approximately 8.30am[8].
Mr Bin Zaid states that at the conclusion of their argument the Applicant had said words to the effect of ‘do you think I’m crazy about money’, apparently being a reference to whether Mr Bin Zaid believed the Applicant needed the job. The Applicant agreed that he had used those words but rejects that he then said ‘fuck this job’ as claimed by Mr Bin Zaid[9]. The Applicant then left the site at approximately 8.30am, leaving the Respondent shorthanded in completing all of the required deliveries that day. Mr Bin Zaid subsequently arranged for an additional driver through ‘Air Tasker’ to drive the 2nd truck. Mr Flaounas was contacted by Mr Bin Zaid by telephone shortly after the Applicant left the Dandenong South site and was advised that the Applicant had refused to do the delivery that day and had engaged in verbal abuse and hostility towards Mr Bin Zaid.
The Applicant subsequently received a text message from Mr Flaounas at 12.57 pm on 17 January 2024 in the following terms;
“Hi Roy
I was told you walked off the job today – please return keys and I will arrange final pay
Thanks lambros”[10]
The Applicant refutes that he resigned but accepts that he walked off the job without telling Mr Flaounas before doing so. He states that he was not paid for his final day of work and while he subsequently received a payslip for the amount of $807.16 he says that amount was not deposited to his bank account. The Applicant subsequently contacted Mr Flaounas on 16 February 2024 again asking about his final pay to which Mr Flaounas replied that he (the Applicant) had not been dismissed but had walked off the job without notice[11]. The Applicant also holds concerns regarding wages underpayment on the basis that he received a flat hourly rate of pay of $32.50 for all ordinary hours of work (including Saturdays) which for Saturday work was less than the relevant Saturday penalty rate that applies under the Road Transport and Distribution Award 2020.
Mr Flaounas was questioned about the process followed by him in relation to the Applicant’s termination of employment. He agreed that there were no prior warnings issued to the Applicant over his performance, the Applicant was not notified of the reason for his dismissal prior to a decision being made and the Applicant was not afforded an opportunity to respond prior to his dismissal. Mr Flaounas explained that the reason these procedural steps were not taken was because he believed at the time that the Applicant had simply resigned. He also explained that the Respondent was a very small employer with only five staff now (including himself) and that he had neither the experience or access to specialist or dedicated HR resources. Mr Flaounas also explained that the business was under significant financial strain in light of dramatic cost increases and declining consumer demand and referred to recent decisions made to not replace two positions, those being the Applicant’s position and a sales position in the Hawthorn retail outlet. He claimed that any financial compensation order made against the Respondent would be difficult for it to absorb.
Since his dismissal the Applicant states that he has suffered significant financial hardship including an inability to pay his rent and having been forced to sell some of his personal possessions[12]. He has also made multiple unsuccessful job applications, of which he furnished evidence[13]. He has however earned some income through working as an Uber delivery driver since his dismissal. His weekly earnings from Uber delivery work[14] following the termination of his employment were as follows;
Week of 29 January 2024 - $570.16
Week of 5 February 2024 - $832.38
Week of 12 February 2024 - $331.88
Week of 19 February 2024 - $384.89
Week of 26 February 2024 - $201.12
Week of 4 March 2024 - $190.76
Week of 11 March 2024 - $635.57
Week of 18 March 2024 - $714.10
Week of 25 March 2024 - $301.65
The Applicant confirmed that in the period from 1 April 2024 until the date of the determinative conference/hearing before me on 13 May 2024 he had earned no further income and had recently undertaken two weeks of unpaid training with ‘Couriers Please’ where he advised he would be commencing work in the week of 13 May 2024. He estimates that his earning from Couriers Please commencing from 13 May 2024 will be approximately $900 per week gross.
The Applicant was challenged by the Respondent as to income he may have also earned from the importation and sale of clothing items. The Applicant was referred to entries in bank statements[15] produced by him that revealed regular payments received on 16 & 31 January 2024 and 25 February 2024 from a Jermaine Wong Shu Phi. The Applicant rejected that he had any form of on-line clothing sales business and explained that Mr Wong Shu Phi was another employee of the Respondent who regularly purchased vintage hats off the Applicant.
Following the Applicant’s cessation of employment Mr Flaounas contacted the Applicant regarding his concern that the Applicant had taken a second hand mattress without approval of the Respondent during his employment. Mr Flaounas explained that in conjunction with the delivery of a new mattress customers can arrange and pay ($50) for the Respondent to take away their old mattress. The old mattress is then returned by the driver to the warehouse where it is subsequently picked up by a charitable organisation called ‘Bed Collect’ for cleaning, repair and restoration prior to donation to needy community members. The Applicant acknowledged that he was aware of this process and agreed that he kept a mattress given to him by a customer but explained that the customer had not paid the $50.00 to the Respondent for the mattress’ collection and return to the warehouse. In these circumstances he believed he was entitled to keep the mattress.
Has the Applicant been dismissed?
A threshold issue to be determined in this matter is whether the Applicant has been dismissed from his employment. The circumstances in which a person is taken to be “dismissed” are set out in s 386 of the Act. Section 386(1) relevantly provides as follows:
(1)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 Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
In Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Shahin Tavassoli[16] (Bupa), a Full Bench was dealing with an appeal of a decision in which the member at first instance found that the dismissal was within the meaning of s.386(1) and that the dismissal was unfair. The Full Bench identified there were two elements to s.386(1) and after extensively considering the authorities, said as follows;
“[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 probable 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.” (my emphasis added)
I discern from the Applicant case as articulated in the proceedings that he claims to have been dismissed within the meaning of the first limb of s. 386(1), that being he was dismissed at the Respondent’s initiative. It is to that I now turn.
Whether Applicant was dismissed within meaning of s 386(1)(a)
The Applicant contends that he was dismissed by the Respondent by way of a text message received from Mr Flaounas on 17 January 2024 in which he was advised that Mr Flaounas would arrange for his final pay to be made up. The text message followed the Applicant’s earlier argument with Mr Bin Zaid at the conclusion of which the Applicant left the site claiming that he wanted to avoid further escalation of that argument. The Applicant rejects that he resigned his employment. By contrast, the Respondent contends that by his actions and the language directed towards Mr Bin Zaid, the Applicant effectively resigned his employment on 17 January 2024, which the Respondent accepted.
It is apparent that the events of 17 January 2024 did not happen in isolation. The Applicant felt aggrieved at events of the previous day when he perceived that Mr Bin Zaid allocated bed and mattress deliveries unevenly such that the Applicant had a more demanding load of deliveries then Mr Bin Zaid. Notwithstanding that sense of unfairness, the Applicant chose not to raise his concerns with Mr Flaounas explaining that reluctance as arising from his belief that Mr Flaounas would take Mr Bin Zaid’s side in any disagreement. No evidence beyond that suspicion was led by the Applicant in relation to his subjective belief that little would be achieved by complaining to Mr Flaounas.
On arrival at work on 17 January 2024, the Applicant was again dissatisfied with the division of the delivery loads. He again found that he was required to deliver a bigger load then Mr Bin Zaid, which Mr Bin Zaid explained as being due to the greater number of local deliveries required of the 2nd truck versus the long distance delivery to Ballarat required of the 1st truck. To diffuse the argument that ensued Mr Bin Zaid offered the Applicant a choice to take the 1st truck, which the Applicant also declined because it meant he would be accompanied by a less experienced offsider rather than the more experienced offsider that would support the 2nd truck deliveries.
Apparently unhappy with the proposed delivery arrangements for that day in spite of Mr Bin Zaid’s concession, the Applicant then challenged Mr Bin Zaid as to whether he believed the Applicant needed the money. This strongly suggests in my view that the Applicant was threatening Mr Bin Zaid as to whether he (the Applicant) would continue performing his job. There is a dispute over what the Applicant then said with Mr Bin Zaid stating the Applicant said ‘fuck the job’ while the Applicant states he told Mr Bin Zaid that he didn’t want to work that day. I found Mr Bin Zaid’s version of events to be more credible in circumstances where the Applicant had already strongly inferred that he did not need the money from the job. There was also on the Applicant’s own evidence a 20 minute argument that had already escalated. In these circumstances and noting Mr Bin Zaid was consistent and firm in his evidence I am satisfied that it is more likely that the Applicant said, ‘fuck the job’ and left the site for the day.
While the Respondent may have inferred from the Applicant’s actions and words that he had resigned, it does not automatically follow that the Applicant had intended to resign. The Applicant gave evidence that he had not sought to resign and had simply sought to withdraw from a confrontation with Mr Bin Zaid that he feared was escalating. The words uttered by the Applicant were far from unambiguous in the context of a heated argument between himself and a more senior employee who the Applicant perceived had been treating him unfairly, whether that belief was rightly or wrongly held. While I am satisfied that the Applicant said ‘fuck the job’ it was stated in the heat of the moment, was directed at a work colleague rather than the Manager or owner of the business and no other steps were taken by the Applicant at that point to communicate to the Respondent that he was resigning his employment.
I am not satisfied on the evidence that the Applicant intended to resign when he used profane language in his argument with Mr Bin Zaid and left the site on the morning of 17 January 2024. His behaviour was unacceptable and certainly ill-advised and may in itself constitute misconduct, a point to which I will return to later in this decision. I do not however regard his argument with Mr Bin Zaid, the language he used and departure from site as clearly communicating his resignation for the reasons set out above.
Mr Bin Zaid communicated the above-referred events of the morning of 17 January 2024 to Mr Flaounas shortly after the Applicant left the site at 8.30am. Mr Flaounas made no subsequent enquiries with the Applicant about what had occurred between he and Mr Bin Zaid and whether he had in fact resigned as inferred by Mr Flaounas from Mr Bin Zaid’s report. Mr Flaounas accepted without question Mr Bin Zaid’s report and proceeded to confirm by text to the Applicant that his final pay would be made up. His failure to clarify the Applicant’s behaviour and intentions means that Mr Flaounas was simply not in a position to know whether the Applicant had in fact intended to resign. He should have done so. Having not done so leads me to conclude that the decisive action that brought the employment relationship to an end was not the conduct of the Applicant but rather the text message sent by Mr Flaounas to the Applicant at 12.57 pm on 17 January 2024.
I am fortified in my view as to the termination of the Applicant’s employment being at the Respondent’s initiative by the language used by Mr Flaounas in the text message. He did not refer to the Applicant as having resigned. Rather he referred to the Applicant having ‘walked off the job’ and then went on to advise that the Applicant’s final pay would be made up. This strongly indicates that the consequence for the Applicant of having ‘walked off the job’ was that of dismissal.
If, however I am wrong in my conclusion that the Applicant was dismissed by the Respondent in response to his walking off the job and that rather, he did in fact resign as asserted by the Respondent, I would still find that the dismissal was at the initiative of the Respondent for the following reasons. As pointed out by the Full Bench in Bupa, an ostensible communication of a resignation may not be legally effective in certain circumstances. I am satisfied that the present case would fall within the circumstances envisaged by the Full Bench in Bupa. That is because the Applicant at the conclusion of a 20 minute argument with Mr Bin Zaid, uttered a profanity and left the site fearing further escalation of the dispute. I accept that the Applicant was upset, and he removed himself from the apparent conflict with Mr Bin Zaid. The Respondent took no steps to clarify or confirm whether the Applicant genuinely intended to resign. Rather, Mr Flaounas moved to confirm the cessation of employment without seeking to establish what the Applicant’s genuine intentions were.
Initial matters
Having found that the Applicant was dismissed with the meaning of s 386(1) of the Act, I am now obliged under section 396 of the Act, to decide the following matters before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code; and
(d) whether the dismissal was a case of genuine redundancy.
Relevant to the determination of the preliminary matters I am satisfied that;
· the Applicant was dismissed on 17 January 2024 and filed his unfair dismissal application on 18 January 2024, that latter date being within 21 days of the date of his dismissal;
· the Applicant commenced employment with the Respondent on 26 July 2021 and at the time of his dismissal had been employed for a period of over three years, that period being more than the minimum employment period of either six months or twelve months in the case of a small business employer;
· the Applicant was covered in his employment by the Storage Services and Wholesale Award 2020[17] and the Road Transport and Distribution Award 2020[18] and at the date of his dismissal was in receipt of a flat hourly rate of pay of $32.50; and
· the Applicant was not dismissed due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.
Having considered each of the initial matters, I am satisfied that the application was made within the required period in ss 394(2), the Applicant was a person protected from unfair dismissal and the dismissal was not a genuine redundancy. However, at the time of the Applicant’s dismissal the Respondent claims that it employed seven employees and was a small business employer within the meaning of s 23 of the Act. I am consequently required to determine whether the Respondent was a small business employer and if so whether the Applicant’s dismissal was consistent with Small Business Fair Dismissal Code (the Code). It is to that I now turn.
Small Business Fair Dismissal Code
It was uncontested and I accept that the Respondent had less than 15 employees at the time of the Applicant’s dismissal taking into account associated entities. It follows that the Respondent was a small business employer (as defined in s 23 of the Act) for the purposes of ss 386(1) & 388(1) of the Act. The Code declared by the Minister pursuant to s 388(1) of the Act applies to small business employers with less than 15 employees and relevantly provides as follows:
“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.”
Relevantly to the present case, the Full Bench In Pinawin v Domingo[19] considered whether, in the context of a summary dismissal under the Code, the Commission had to be satisfied that the serious misconduct which was the basis for the dismissal actually occurred:
“[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in
relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. The circumstances include the experience and resources of the small business employer concerned.
…[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well …”
I have found above that the Applicant was dismissed with effect on 17 January 2024 by the Respondent. The Respondent accepts that the Applicant was not warned or put on notice that their employment was at risk prior to the dismissal. It follows therefore that that the second limb of the Code, that dealing with “Other Dismissal”, is not relevant. Consequently, my role in this matter is to determine whether the employer genuinely held a belief that the employee had committed an act of serious misconduct and whether that belief was, objectively speaking, based on reasonable grounds. It is not necessary to determine whether the serious misconduct did in fact occur or that the employer was correct in the belief that it held.
The Respondent contends that the conduct of the Applicant on the 17 January 2024 was sufficiently serious as to justify immediate dismissal. It submits the Applicant walked off the job, was hostile and verbally abusive towards Mr Bin Zaid and left the site without prior notice or approval of the Respondent. Mr Flaounas referred to his duty of care required in respect of his employees and submitted that the Applicant’s hostile and abusive conduct towards Mr Bin Zaid was such that it warranted dismissal.
I accept that Mr Flaounas held a genuine belief that the Applicant’s conduct on 17 January 2024 was sufficiently serious as to justify summary dismissal based on his view that the Applicant had engaged in hostile and abusive conduct towards Mr Bin Zaid and that the Applicant left the job without approval. As set out above in the authorities to which I have referred, Mr Flaounas’ genuine belief is not enough in itself to establish that the decision to summarily dismiss the Applicant was consistent with the Code. It is also necessary for me to be satisfied that the belief was “objectivity speaking, based on reasonable grounds”.
As earlier stated, Mr Flaounas made no effort to seek the Applicant’s explanation of what had occurred on the morning of 17 January 2024. He accepted Mr Bin Zaid’s version of events without question or further investigation following which he moved to confirm what I have found above to be the Applicant’s termination of employment in his text message to the Applicant at 12.57pm on 17 January 2024. In the circumstances, Mr Flaounas should have held a discussion with the Applicant and considered his views prior to considering the termination of his employment. He failed to conduct any sort of investigation in my view by simply accepting Mr Bin Zaid’s report of events. That he failed to conduct any investigation or discuss the matter with the Applicant prior to effecting his dismissal means that his belief that the Applicant’s conduct was sufficiently serious to justify immediate dismissal was not based on reasonable grounds.
While the Applicant’s conduct on 17 January 2024 can be rightly criticised and, in my view, justified some disciplinary action, I am not satisfied that the Respondent’s genuine belief as to that conduct warranting immediate dismissal was objectively, based on reasonable grounds. It follows from this conclusion that the dismissal was not consistent with the Code. Having reached that conclusion, I must now turn to consider whether the dismissal was harsh, unjust or unreasonable.
Was the dismissal harsh, unjust, or unreasonable?
Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust, or unreasonable, the Commission 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.
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct – s.387(a)?
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[20] and should not be “capricious, fanciful, spiteful or prejudiced[21].” However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it were in the position of the employer[22].
The evidence canvassed above reveals that the Applicant engaged in an argument with Mr Bin Zaid on 17 January 2024 over the Applicant’s concerns that he (the Applicant) was receiving an unfair allocation of delivery work. The argument on the Applicant’s own evidence escalated to a point where he refused to undertake the work for which he was employed and left the site at approximately 8.30 am in the morning. He left with the parting words to Mr Bin Zaid of ‘fuck the job’. While Mr Flaounas described the Applicant’s behaviour towards Mr Bin Zaid as ‘hostile and abusive’, Mr Flaounas did not witness the incident and Mr Bin Zaid did not characterise the exchange between the two men in those terms although he agreed there was an argument that went for up to 20 minutes at the end of which the Applicant used the above-referred profanity before leaving the site.
I believe that Mr Flaounas description of the exchange and language directed towards Mr Bin Zaid exaggerates the nature of that exchange. While I accept there was a willing exchange between the Applicant and Mr Bin Zaid, at least on the Applicant’s part, there is no evidence beyond his comment of ‘fuck the job’ that the Applicant was ‘hostile and abusive’ towards Mr Bin Zaid. He was certainly unhappy about the work allocation yet surprisingly perhaps, declined a reasonable alternative offered by Mr Bin Zaid that the Applicant drive the 1st truck rather than the 2nd truck which the Applicant was initially concerned about. In any event, the Applicant’s use of profanity while engaging with Mr Bin Zaid does not appear to have been directed at Mr Bin Zaid himself but rather reflected the Applicant’s dissatisfaction with the job and appears to me have been uttered in frustration rather than in a hostile or abusive manner towards Mr Bin Zaid. Certainly, the language was inappropriate, but I am unable to conclude that the conduct of the Applicant was hostile or abusive as contended by the Respondent or that it established a valid reason for his dismissal.
Turning to the further alleged ground of misconduct, that of the Applicant walking off the job, there is no argument that the Applicant left the site without approval. His conduct left the Respondent in a position where it was forced to make alternative arrangements for planned deliveries at additional cost to the business. This conduct was in direct breach of the Applicant’s responsibilities to perform his work as directed. I do not accept the Applicant’s contention that it would have been a straightforward matter of calling in a part-time employee or that the ability of the Respondent to affect a ‘workaround’ excused his conduct. Significantly, the Applicant had alternatives available to him. He could have accepted Mr Bin Zaid’s proposal that he drive the 1st truck, or he could have sought to discuss his dissatisfaction directly with Mr Flaounas. He did neither and walked off the job in a fit of pique. I am satisfied that the Applicant’s conduct was sufficiently serious as to establish a valid reason for his dismissal.
A further matter raised by the Respondent was that of the Applicant keeping a mattress recovered by him from a customer on delivery of a new mattress. This became known to the Respondent following the Applicant’s dismissal. The Applicant acknowledged his awareness of the Respondent’s normal process for arranging the collection (on the basis of the customer paying a $50 fee), storage and donation of used mattresses through ‘Bed Collect’. However, he sought to distinguish his conduct of retaining one such mattress for himself on the basis of the Respondent having not been paid the $50 collection fee normally paid by customers for that service.
I found the distinction drawn by the Applicant to be an artificial and disingenuous one in circumstances where it was the Respondent’s time (of its employees) and resources (delivery truck) that were being used for apparent personal gain by the Applicant. Nevertheless, there was no evidence led by the Respondent as to its policies or instructions that had been issued to employees that would apply in the circumstances where a customer had not paid the $50 used mattress collection fee and simply gave the old mattress to an employee of the Respondent. I am unable to conclude that the conduct establishes a valid reason for his dismissal.
I have found that the Applicant’s conduct of walking off the job without approval on the morning of 17 January 2024 constituted misconduct that establishes a valid reason for his dismissal. This weighs in favour of a finding that the dismissal was neither harsh, unjust, or unreasonable.
Notification of the valid reason – s.387(b)
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[23] and in explicit[24], plain and clear terms[25].
The evidence, which I accept, is that the Applicant’s termination of employment was communicated to him in a text message from Mr Flaounas on 17 January 2024. The Applicant was not notified of a valid reason for his dismissal prior to the Respondent’s decision to dismiss him. This weighs in favour of a finding that the dismissal was unfair.
Opportunity to respond to any reason related to capacity or conduct – s.387(c)
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[26]
The opportunity to respond does not require formality and the factor is to be applied in a common-sense way to ensure the employee is treated fairly.[27] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to the concern, this is enough to satisfy the requirements.[28]
Mr Flaounas was right to be concerned with the Applicant’s conduct on 17 January 2024 when he walked off the job without notice or approval. In those circumstances Mr Flaounas ought to have put those concerns to the Applicant and given him an opportunity to explain his conduct. Mr Flaounas failed to do that and simply sent a text message to the Applicant advising the Applicant that his final pay would be made up. That had the effect of terminating the Applicant’s employment in circumstances where the Applicant had no opportunity to respond to the reason for his dismissal. This weighs in favour of a finding that the dismissal was unfair.
Support person – s.387(d)
Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present. In the present circumstances, there was no meeting conducted prior to the dismissal so the opportunity for a support person to be requested by the Applicant present was entirely moot. This criterion is a neutral consideration in the circumstances.
Warnings regarding unsatisfactory performance – s.387(e)
The dismissal did not relate to unsatisfactory performance. This factor is therefore not relevant in the circumstances.
Impact of the size of the Respondent on procedures followed – s.387(f)
The Respondent’s Form F3 - Employer Response indicates that at the time of the Applicant’s dismissal it employed 7 employees. There is no evidence before me, and nor did either party contend, that the Respondent organisation’s size impacted on the procedures followed by it in dismissing the Applicant. This factor weighs neutrally in my consideration.
Impact of absence of dedicated human resources management specialist/expertise on procedures followed – s.387(g)
The evidence in this matter indicates that the Respondent did not have access to the services of an in-house human resources specialist. This factor weighs neutrally in my consideration.
Other relevant matters – s.387(h)
The Applicant raised two other matters he submits are relevant to an assessment of whether the dismissal was unfair. The two matters raised are that of the used mattress retention matter that I have considered above and the inability of his wife to work more than two days per week due to study she is presently undertaking. The second matter raised speaks to a broader issued raised in the Applicant’s material, that being the financial hardship he has suffered since his dismissal as evidenced by the rental arrears position he finds himself in because of his reduced income.
As to the first matter raised, that of the used mattress matter, it is not entirely clear to me how that is said by the Applicant to assist his case. The Applicant’s conduct in retaining a used mattress, if not contrary to Company policies or directions, was certainly a sharp practice on the part of the Applicant in my view. He appears to have to have obtained some personal benefit on the retrieval and retention of a used mattress while being paid by the Respondent and using the company truck. That the Applicant may feel aggrieved at the suggestion of theft having been levelled against him by the Respondent, I am not persuaded that tells in favour of a finding of unfairness of the dismissal.
Turning to the matter of financial hardship, I accept that the Applicant has had difficulty in securing alternate employment, that his wife has limited capacity to increase her hours of work beyond two days per week because of her study commitments and that the combination of these factors following his dismissal has left he and his family in an insecure financial position. The impact of dismissal on the financial security of an individual and his or her family is however far from unusual. I am not persuaded that this weighs in favour of a finding of harshness in the circumstances.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust, or unreasonable?
I have made findings in relation to each matter specified in s.387 of the Act as relevant. I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust, or unreasonable.[29]
I have found that the Applicant’s dismissal was supported by a valid reason. This weighs in favour of a finding that the dismissal was not unfair. There were however significant procedural failures of the Respondent in effecting the dismissal. Those failures were such that the Applicant was denied any opportunity to explain his conduct or seek to persuade the Respondent that dismissal was not appropriate. This weighs strongly in favour of a finding that the dismissal was unfair. All other criteria were either not relevant or weighed neutrally in my consideration.
Having considered each of the matters specified in s.387 of the Act I have weighed the serious procedural failures described above against the gravity of the misconduct of which I have made findings. On balance I am satisfied that the dismissal was unjust because of those procedural failures, and thereby unfair.
Remedy
Having found that the Applicant was unfairly dismissed I now turn to consider the question of remedy pursuant to section 390 of the Act. Significantly, under s.390(3) of the Act, I must not order the payment of compensation to the Applicant unless:
(a)I am satisfied that reinstatement of the Applicant is inappropriate; and
(b)I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Dealing firstly with whether reinstatement is inappropriate, the Applicant submits that reinstatement is not appropriate in circumstances where he claims to have been treated poorly by the Respondent over a period of time up to and including his dismissal. The Respondent agrees that reinstatement is inappropriate in circumstances where it has lost trust and confidence in the Applicant because of his conduct. I also note that the business employs a small number of employees. In all of these circumstances I consider that reinstatement is inappropriate.
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”[30].
The Applicant submits that payment of compensation is appropriate because he had been unfairly dismissed and has until recently been unable to secure alternate employment since his dismissal, whereas the Respondent argues that no compensation would be appropriate in circumstances where the Applicant walked off the job without notice or approval.
Having found that the Applicant was unfairly dismissed and noting that the Applicant was until recently unemployed, in these circumstances, I consider that an order for payment of compensation is appropriate. Beyond the matter of the Applicant’s conduct which I will further consider below pursuant to s 392(3), there is nothing in the material filed by the Respondent in the substantive proceedings that persuades me that a payment of compensation would be inappropriate.
Turning now to the question of compensation, s 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:
(a)the effect of the order on the viability of the Respondent’s enterprise;
(b)the length of the Applicant’s service;
(c)the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d)the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e)the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g)any other matter that the Commission considers relevant.
I consider all the circumstances of the case below.
The Respondent submits that it is not a large employer and is presently confronting difficult business conditions including reduced consumer demand and dramatically increased costs. There was however no material filed or evidence adduced by it that would support a finding that an order for compensation would have an effect on the viability of the employer’s enterprise. I consequently find that an order for compensation is unlikely to have an effect on the viability of the employer’s enterprise (s 392(2)(a)).
The Applicant commenced employment with the Respondent on 26 July 2021 and was terminated on 17 January 2024, a period of some 3 years and 6 months which was served as a permanent full time employee. I consider that the Applicant’s moderate length of service is such that it does not favour an adjustment to the compensation otherwise calculated (s 392(2)(b)).
As stated by a majority of the Full Court of the Federal Court, “in determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”[31]
The Applicant contends that had he not been dismissed he expected to remain employed by the Respondent for at least three years. The Applicant was challenged in relation to that submission given his evidence in the proceedings as to his level of dissatisfaction with his treatment by the Respondent and by Mr Bin Zaid in particular and his belief that Mr Flaounas was entirely unsympathetic to any of his perspective or concerns. The Applicant acknowledged these concerns but stated that he had nonetheless enjoyed his job.
I find it most unlikely that the Applicant would have remained employed for up to three years. He was clearly unhappy in his role with the Respondent and in particular with Mr Bin Zaid. It is also likely that had he not been dismissed he would have been subject to disciplinary action arising from his conduct on 17 January 2024, thus placing his continued employment in a more precarious position. Further, Mr Flaounas in his evidence confirmed that the Applicant’s role has not been filled along with a sales role, reflecting the softer business conditions confronting the Respondent. Based on these factors I am satisfied that, had the Applicant not been dismissed, it is unlikely that he would have remained employed by the Respondent’s beyond a period of three months. The Applicant’s average weekly earnings in the six month period prior to his dismissal averaged $1,343.42 meaning that his anticipated earnings for the estimated three month period of continued employment is $17,464.46 (s 392(2)(c)).
Turning to the Applicant’s efforts to mitigate his losses, the Applicant must provide evidence that he has taken reasonable steps to minimise the impact of his dismissal[32] and what is reasonable depends on the circumstances of the case.[33] I am satisfied on the evidence that the Applicant has made multiple job applications in the wake of his dismissal, which until recently were unsuccessful. I am comfortably satisfied that the Applicant has made reasonable efforts to mitigate his loss and that no adjustment to the compensation otherwise calculated is appropriate (s 392(2)(d)).
The Applicant has presented evidence of earnings from Uber delivery work in the period following his dismissal. That evidence reveals that after his dismissal on 17 January 2024 the Applicant derived income from Uber delivery work of $4,162.51 between 18 January & 1 April 2024. It is appropriate to take those earnings into account in determining the amount of compensation to be awarded (s 392(2)(e)).
As to the income likely to be earned in the period between the making of the order for compensation and the payment of compensation I am satisfied on the evidence of the Applicant that he is likely to earn $900 per week from his new employment with Couriers Please commencing from 13 May 2024. I estimate that he will earn $1800 in the period between the making of an order for compensation and the payment of the compensation. It is appropriate to take those earnings into account in determining the amount of compensation to be awarded (s 392(2)(f)).
No other relevant matters were raised by the parties going to an order for compensation (s 392(2)(g)).
As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[34] This approach was articulated in the context of the Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[35].”[36]
The approach to calculating compensation per Sprigg is as follows:
Step 1: Estimate the remuneration the Applicant would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated his employment to be $17,464.46 on the basis of my finding it is likely the Applicant would have remained in employment for a further period of three months. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.[37]
I have found that the Applicant has earned remuneration since the date of his dismissal, and that he is likely to earn remuneration between the making of the order for compensation and the payment of compensation. The earnings since dismissal are $4,162.51 and his likely earnings in the period between the making of an order for compensation and the payment of the compensation is $1,800. It is appropriate to make a deduction for these two amounts. This reduces the amount of compensation to $11,501.95.
I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment.[38] I do not consider it appropriate to deduct an amount for contingencies.
I have considered the impact of taxation but have elected to settle a gross amount of $11,501.53 which is to be subject to normal taxation. Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”[39] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the Act.
If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss him, I am obliged by section 392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct. As I have earlier found, the Applicant engaged in misconduct by walking off the job without explanation or approval from the Respondent. I am satisfied that the misconduct of the Applicant contributed to the employer’s decision to dismiss. Therefore, the amount of the order for compensation is to be reduced on account of the Applicant’s misconduct by an amount of 50%. The adjustment for misconduct reduces the amount of compensation to $5,750.97.
Finally, ss 392(5) & (6) of the Act requires that the amount of compensation ordered by the Commission must not exceed the lesser of 6 months’ pay calculated at the high income threshold (HIT) or the total amount of remuneration the Applicant received or was entitled to receive during the 26 week period prior to his dismissal. Based on the Pay Summary[40] provided by the Respondent, I find that the total amount of remuneration received by the Applicant during the 26 week period prior to dismissal was $34,929 while the HIT at the time of dismissal on 17 January 2024 was $167,500. Half of that amount is $83,750. It follows from the foregoing that the amount of compensation ordered must not exceed $34,929.
In light of the above, I will make an order that the Respondent pay $5,750.97 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.
Conclusion
I am satisfied that the Applicant was dismissed at the initiative of the Respondent. Having been satisfied in respect of the other initial matters, I have considered and determined that the Applicant’s dismissal was not consistent with the Code, was unjust and thereby unfair. I am further satisfied that reinstatement would be inappropriate and that an award of compensation is appropriate.
Finally, I have determined to make an order that the Respondent pay $5,750.97 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision. An order giving effect to this decision will be issued separately in conjunction with this decision.
DEPUTY PRESIDENT
Appearances:
Y Yusuf, Applicant.
L Flaounas for the Respondent.
Hearing details:
2024.
Melbourne:
May 13.
[1] Exhibit A7, Witness Statement of Yuhannis Bin M Yusuf, at [1]-[4]
[2] Exhibit R1, Pay Summary
[3] MA000084
[4] MA000038
[5] Exhibit A1, at [8]-[9]
[6] Ibid at [10]
[7] Exhibit R2, Witness Statement of Zulhafiz Bin Zaid, dated 9 April 2024
[8] Ibid at [11]
[9] Exhibit R2
[10] Exhibit A1, Text Message from Lambros Flaounas to Applicant, dated 17 January 2024
[11] Exhibit A7, at [12]-[16]
[12] Exhibit A5, Receipt of sale of personal possessions and rent arrears notices
[13] Exhibit A6, Job applications
[14] Exhibit A7, Uber Weekly Statements for period 29 January – 31 March 2024
[15] Exhibit A3, Applicant Bak Statements for period from 15 January – 27 March 2024
[16] [2017] FWCFB 3941.
[17] MA000084
[18] MA000038
[19] [2012] FWAFB 1359
[20] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[21] Ibid.
[22] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[23] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[24] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[25] Ibid.
[26] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[27] RMIT v Asher (2010) 194 IR 1, 14-15.
[28] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[29] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]– [7].
[30] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[31] He v Lewin [2004] FCAFC 161, [58].
[32] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[33] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[34] (1998) 88 IR 21.
[35] [2013] FWCFB 431.
[36] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].
[37] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[38] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[39] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
[40] Exhibit R1
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