Mrs Robyn Edwards v Wastech Engineering Pty Ltd
[2014] FWC 882
•5 FEBRUARY 2014
[2014] FWC 882 |
FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Robyn Edwards
v
Wastech Engineering Pty Ltd
(U2013/12817)
COMMISSIONER WILSON | MELBOURNE, 5 FEBRUARY 2014 |
Application for relief from unfair dismissal.
[1] The following are my edited reasons for decision, originally given in transcript at Melbourne on 4 February 2014.
[2] Ms Robyn Edwards was employed by Wastech Engineering Pty Ltd (“Wastech” or “the company”) as a receptionist from February 2008 until August 2013. 1
[3] She was dismissed by Wastech on 15 August 2013 as a result of the company having a complaint made to it about an email exchange with a former work colleague, who now worked outside of the company, earlier in August 2013.
[4] Wastech argues that the circumstances of the email exchange amount to serious misconduct because Ms Edwards used the company email system to engage in derogatory comments about her employer and colleagues. 2 Wastech also submits that even though her dismissal should be found to be validly one for reason of serious misconduct, it made a payment of one week’s salary in recognition of Ms Edwards’ five year service with the company.3
[5] In contrast, Ms Edwards submits that the circumstances of the email exchange she had with a former colleague and other circumstances surrounding her employment do not amount to serious misconduct, or misconduct at all, and that accordingly her dismissal in all the circumstances was harsh and unjust and unlawful (sic). 4 Ms Edwards also submits that because the circumstances which led to her termination do not amount to serious misconduct she should have been paid the statutory payment in lieu of notice upon termination.
LEGISLATION
[6] The legislative provisions which are relevant to this matter are set out in s.387 of the Fair Work Act 2009 (the Act), which is as follows;
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
BACKGROUND
[7] Ms Robyn Edwards worked at Wastech as a receptionist from February 2008 to 15 August 2013, being a total of five years and seven months of service. 5 Her salary was $49,125.23 per year.6
[8] In May 2013, Ms Edwards had also participated in a voluntary “performance improvement plan” process which included a series of tests leading to recommendations about potential improvement areas, against which she was making progress. 7 On 8 July 2013, a performance appraisal on Ms Edwards was completed. The appraisal report was positive and led to a CPI pay rise.8 Wastech’s evidence is that this was a 3% CPI based pay rise as part of her annual review in June 2013, which every Wastech employee received and which was not performance based.9
[9] There was a meeting of Admin and Accounts staff on 7 August 2013 to discuss the volume of overflow calls. 10 Part of the context of the need for this meeting was that there had been some complaints about the handling of call volume, and there appears to be criticism of Ms Edwards’ ability to handle the volume and to balance other duties, which included banking and attendance at the post office. Another part of the context includes that there was a Reception Support Roster11 (“the Roster”) which provided for a team member to be available to assist with overflow calls at all times and to cover the receptionist's absence from her workstation for banking/post/catering duties. The Roster would be used to cover reception during periods of absence (personal and sick leave, annual leave).12
[10] In the course of the Admin and Accounts staff meeting on 7 August, staff were encouraged by Ms Mechielsen to assist one another through developing mutually beneficial solutions. 13 Ms Mechielsen says about the meeting on 7 August 2013 that;
“To conclude the meeting I thanked all attendees for working together positively. I stated that the amount of negativity and complaining was to stop, and that the team was to focus on working as a team and assist one another through developing mutually beneficial solutions. I stated verbatim "I will not tolerate undermining of the team, please see me directly if you have any concerns". No one came to see me directly either after that meeting or in the following days”. 14
[11] While Ms Edwards denies that Ms Mechielsen said specifically the words that she would not tolerate undermining of the team I accept that it is more consistent with the overall evidence that she did. Ms Mechielsen’s evidence was clear and direct and gave the impression that she has a similar managerial style. It is more likely that these words were said by Ms Mechielsen, albeit that Ms Edwards did not identify them as important advice at the time, which is consistent with my overall impression of Ms Edwards’ evidence.
[12] On 14 August 2013, Ms Edwards was away from work, as she was ill. 15
[13] On 14 August 2013 the relief receptionist complained to Ms Mechielsen about emails she had seen between Ms Edwards and a former employee, whom I identify as ‘PO’. 16 Ms Edwards concedes these emails were sent and received by her.
[14] The emails seen by the relief receptionist and Ms Mechielsen start with one sent on Thursday 8 August 2013 at 10.13am. The significance of the date of 8 August 2013 is that the emails were sent the day after the meeting of the Admin and Accounts staff. Ms Mechielsen was disappointed upon learning on 14 August 2013 of the email exchange so soon after her meeting with relevant staff.
[15] In the email exchange, Ms Edwards asks “Paul” to contact a person. PO responds by saying she had sent the email to the wrong Paul. At 11.20 am, Ms Edwards responds to PO by writing;
“Morning, yeah it bounced as you weren't there. Sorry. Ready to walk, I am so pissed with [redacted]. I can only handle one call at a time, tough shit hey, that’s why they have 2 at most places these days”
[16] PO responds at 11.20am;
“Morning I told you before they don't deserve you and your patience! It would be a revolving door of receptionists if you leave- they won't put up with the feral short fat pog (sic).”
[17] Ms Edwards responds to him at 11.47am;
“Just updating a resume that you originally used. Have Rachelle as a reference, How about you ?”
[18] PO then responded at 12.00pm;
“No don't put Rachelle as reference, I would put Bill Smith or someone like that?? Terry?? I'm good thanks”
[19] The exchange between Ms Edwards and PO then appears to have ended. The exhibit that is before me in Ms Mechielsen’s evidence finishes the email chain on 14 August 2013 at 1.53pm with an email from Ms Edwards’ account but signed by another staff member to Ms Mechielsen relaying the exchange between Ms Edwards and PO. This is the complaint referred to in Ms Mechielsen’s statement at paragraph 15.
[20] While Ms Edwards initially said that there was no animosity between her and the other staff member, it was subsequently revealed that there had in fact been a confrontation between Ms Edwards and the other staff member on the morning of 8 August 2013 and shortly before the email exchange between Ms Edwards and PO. The confrontation appears to include the person questioning Ms Edwards at the least assertively as to whether she was ill. Ms Edwards characterises this as a criticism in some way of calls that Ms Edwards had put through to the other staff member earlier in the morning. The precise nature of the confrontation is somewhat unclear and the only evidence I have on the point is from Ms Edwards, however there appears sufficient evidence to be able to draw the inference that Ms Edwards was plainly annoyed with the other staff member.
[21] Ms Mechielsen discussed the complaint with Mr Neil Bone, the Managing Director of Wastech, on the afternoon of 14 August 2013. They agreed the circumstance justified termination due to serious misconduct and that they would discuss this with Ms Edwards the next day, which was 15 August 2013. 17
[22] The first available time that Ms Mechielsen and Mr Bone had to meet with Ms Edwards was at about 3pm on 15 August 2013. Ms Mechielsen’s evidence on this point is as follows; 18
“20. We called Robyn into a meeting with us both in the Boardroom. I commenced the meeting by advising Robyn that I had received a complaint about a series of emails that had been sent and received by her and a former employee, and that the emails contained derogatory comments about both Wastech and Robyn's colleagues. I provided Robyn with a copy of the emails and asked her to confirm that it was her that had sent and received them, and for her explanation of the situation.
21. Robyn confirmed she had sent the emails and made comment that "I was applying for positions to see what I was worth because I think I am worth more with the amount of admin work I do" and "I am unhappy with my job".
22. I asked Robyn why these concerns had not been raised during the performance improvement plan process or annual review (both conducted in June 2013), or during the recent team meeting or directly with me after the meeting. Robyn replied that she was only unhappy with the team being unhappy with the volume of overflow.
23. I then asked Robyn for her feedback directly on the derogatory comments and tone of the conversation given the recent meeting about focusing on positive solutions as a team and not undermining the team. Robyn provided no comment other than she was "unhappy with her job".
24. I advised Robyn verbally that her employment was being terminated without notice due to serious misconduct due to her using the company email to engage in derogatory comments about her employer and colleagues.
25. Robyn asked about payment of her entitlements and I confirmed that her accrued but untaken annual leave would be paid with the next weekly pay cycle and she would also receive one week's salary in recognition of her 5 years service, notwithstanding the serious issue which lead to her termination.
26. I asked Robyn to collect her personal belongings from her desk and supervised this from a central location 2 desks away from hers in our open plan office. Robyn asked whether she could collect belongings from the kitchen and bathroom and I agreed and remained in the office whilst she went to the kitchen and bathroom . Upon her return I walked with her though the main office door and the just outside the front door where I stood to watch her enter her car and drive away.
27. Due to the immediacy of the Reception role and it's obvious impact on the day to day running of the business, it was pertinent to advise employees of the developments. Neil Bone sent a factual email which makes no reference to any specific details of the termination other than "serious misconduct" - refer Attachment E.”
[23] The above summary is broadly consistent with Ms Edwards’ recollection. 19
[24] After dismissal, she was told she would have one week’s pay upon termination. She has not received any further termination payment, other than the annual leave entitlements she was owed. 20
[25] After the meeting, Ms Edwards was asked to leave the premises, which she did. 21
[26] After Ms Edwards’ dismissal, other staff saw an email sent by Mr Bone that referred to her dismissal, which stated that Ms Edwards was ‘dismissed due to serious misconduct’. 22
[27] Ms Edwards did not receive written notice of her dismissal until more than a month after it occurred. 23 The notice is dated 18 September 2013, and the unfair dismissal application is dated 22 August 2013.
[28] The dismissal confirmation letter said the following; 24
- A series of emails between yourself (using your Wastech email address) and a former employee containing derogatory remarks about your workplace and colleagues was reported to management on Wednesday 14th August.
- This particular email conversation was conducted on Thursday 8th August, the day immediately after a team meeting had been held on Wednesday 7th August to address ongoing concerns regarding the volume of calls and duties overflowing to the team on the Reception Support Roster.
- At this team meeting it was very clearly explained that undermining of the team and negative attitudes would not be tolerated, and positive suggestions and mutually beneficial solutions were agreed upon by all attendees including yourself.
- This particular email conversation also made reference to your seeking of alternative employment.
“Dear Robyn
Confirmation of the termination of your employment
I refer to our meeting on 15th August 2013 between Neil Bone, yourself and I which was held to discuss matters relating to your unacceptable conduct. This meeting discussed your unacceptable serious misconduct that occurred on Thursday 8th August of which the following occurred:
You were provided with a copy of the email conversation and the opportunity to provide your account of the situation; which included your confirmation that you were seeking alternative employment as you were unhappy at Wastech and wanted to see what you were worth in the marketplace. You provided no response when asked about the derogatory comments.
At this time Neil Bone and I made the decision to terminate your employment without notice due to the behaviour described above constituting serious misconduct, and we both informed you of this in person at the meeting.
Regretfully we were unaware of our obligations to advise you of this in writing, and we now do so in the interest of correct procedure and bringing conclusion to this matter.”
[29] Wastech points to a “verbal caution” that Ms Edwards received in June 2012 regarding her communication with the former employee, PO. On that occasion, Ms Mechielsen and Mr Bone, Managing Director spoke with Ms Edwards about both the volume of overflow calls and her communication with the former employee. The background included that Ms Edwards had been overheard complaining about her colleagues and workplace during telephone calls with the former employee from her desk during working hours. 25
[30] Emails exchanged back and forth between Ms Edwards and PO were seen by the company after her termination, and which are considered by the company to include derogatory comments about her employer and colleagues. These emails are dated between 6 and 15 August 2013 and are included as Attachments J - M of Ms Mechielsen’s statement. 26 I do not place any reliance on those emails in forming this decision.
CONSIDERATION
[31] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Fair Work Commission (“the Commission”) must take into account the legislative factors set out earlier.
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)
[32] Wastech contends that Ms Edwards’ conduct was unacceptable within several frames.
[33] First of all she had been counselled in mid 2012 about certain behaviours including exchanges with the former employee PO. Part of the counselling included being advised that private calls were best conducted in personal time and that “negativity and bagging of Wastech has to stop”. Wastech concedes that this counselling did not amount to a formal warning of any kind to Ms Edwards and Ms Edwards concedes that she corrected her behaviour by keeping her private telephone calls to her own time.
[34] Secondly, Wastech was very concerned that the employee who reported the email exchange to Ms Mechielsen was very distressed as a result of not only having found the email but also seeing that she was referred to within the correspondence. Wastech took the view that in all the circumstances this email exchange had the potential to open the door for the employee referred to in the email to make a complaint either to Wastech or some external authority about harassment or victimisation.
[35] Thirdly, Wastech took the view that since the email exchange was to a former employee it meant that the emails needed to leave the Wastech server, meaning that potentially the content of the email could be provided to anyone.
[36] It is well settled that the Commission’s approach in relation to assessment of whether or not there was a “valid reason” for a dismissal requires consideration of whether the reason put forward for the dismissal is ‘sound, defensible or well founded.’ In the same way, it is settled that a reason which is ‘capricious, fanciful, spiteful or prejudiced’ cannot be a valid reason. It is also the case that the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It will not be enough for an employer to say that they acted in the belief that the termination was for a valid reason.
[37] In this particular case the employer has elevated the reason for dismissal to that of serious misconduct, which can be for the matters referred to in regulation 1.07 of the Fair Work Regulations 2009, including (along with the other criteria set out in the regulations), “conduct that is wilful or deliberate and that is inconsistent with the continuation of the employment contract”. 27
[38] Based on the evidence given in the determinative conference on 4 February 2014 and also in the submissions filed by the parties prior to the determinative conference, I am not satisfied that there was a valid reason for the dismissal related to Ms Edwards’ capacity or conduct.
[39] In particular, I am not satisfied that Ms Edwards’ behaviour amounts to serious misconduct. Objectively, I am not satisfied that Ms Edwards’ actions in the email exchange amount to behaviour which was inconsistent with the continuation of the employment contract, or otherwise meet the tests of the other criteria specified in the Regulations or elsewhere. The high point of the behaviour is that it was an exchange between two people who knew each other. However ill advised that may have been, it does not amount to a repudiation by Ms Edwards of her employment contract with Wastech.
[40] The question then turns to whether or not Ms Edwards’ actions were conduct other than serious misconduct that might otherwise amount to a valid reason for her dismissal.
[41] The circumstances of Ms Edwards’ employment are that she was counselled over several matters in mid 2012 which include counselling over the relationship she had with PO but from which she drew the view that she needed to keep her personal calls to her private time, and which Wastech concedes did not amount to a warning that can be used as grounds for dismissal.
[42] In addition to these circumstances, from mid 2012, are the performance improvement plans and performance appraisal from May to July 2013.
[43] The evidence in relation to these points is that Ms Edwards was in mid 2013 viewed as a capable, performing employee with a positive performance appraisal. There is nothing before me in relation to these 2013 developments which might amount to a prior warning about impending dismissal if behaviour or performance were not changed. The evidence base from the determinative conference and the parties’ submissions indicate that in early and mid August 2013 there was nothing of significance which might say that Ms Edwards’ employment was in jeopardy if behaviour or performance did not improve.
[44] As a result, I find that Wastech’s decision to dismiss Ms Edwards was for a singular reason which was finding out that she had participated in the email exchange with PO in which she was critical both of the company and its employees. The behaviour may well have justified the issuing of a warning letter to Ms Edwards (and most likely a final warning in view of the counselling she had been provided in mid 2012) but it does not amount to a valid reason for her dismissal.
(b) whether the person was notified of that reason
[45] It is the case that Ms Edwards was notified of the reason for her dismissal, however that occurred in the context of a meeting on 15 August 2013 when the company had already made a decision it would dismiss her from employment. Ms Edwards was notified of Wastech’s reason for her dismissal in the meeting which was followed swiftly with the announcement of its decision to terminate her employment. In all the circumstances, this does not amount to the procedural fairness requirement that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
[46] The evidence indicates Ms Edwards was given a short opportunity to agree that the email put to her had been sent by her and to explain why and how she had come to undertake the email exchange with PO. Ms Edwards concedes the emails were hers. However Ms Edwards says that she was somewhat shocked and focused only on one or two points within the emails and in particular the discussion about her completing her resume. As a result, I am not satisfied that Ms Edwards was given a meaningful opportunity to reflect upon, consider, and respond (perhaps on taking advice) to the reason identified by Wastech as grounds for her dismissal.
(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;
[47] Because of the circumstances relating to the arrangement of the termination meeting Ms Edwards did not understand that it was a meeting about her work performance or potential dismissal and so she was not in a position to consider whether she might need to have a support person in attendance. On the other hand, the evidence indicates that Ms Edwards did not specifically request to have a support person in attendance.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
[48] Wastech can point to the counselling given to Ms Edwards in mid 2012 about how she maintained her relationship with the former employee, PO. However, while Wastech can point to this counselling, they have conceded that this does not amount to a warning about work performance. In addition Wastech can point to the relatively strong words said by Ms Mechielsen in the course of the meeting on 7 August 2013, namely that she would not tolerate undermining of the team. Ms Edwards perhaps should have heard this when it was said and heeded the warning that it contained and translated that into action by being more circumspect in the email exchange she had with PO. Notwithstanding, I am not satisfied that it can be said that Ms Edwards had been warned about unsatisfactory performance before the dismissal.
(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
[49] Wastech is a company of about 90 employees, according to its Managing Director Mr Bone, however it does not presently have human resource assistance within the company. While this is the case, the company does have access to some limited assistance through its membership of VECCI and the work it does with a human resources consultancy. The evidence indicates that neither Ms Mechielsen or Mr Bone took advice, other than from each other, about the decision to dismiss before they made it.
[50] I am satisfied as a result that the size of the employer’s enterprise appears to have impacted upon the decision to terminate Ms Edwards’ employment, and the way in which it was implemented, firstly in relation to forming the view that Ms Edwards’ conduct amounted to serious misconduct; secondly in relation to its consequential decision to dismiss Ms Edwards; and thirdly in relation to how the dismissal decision was put to Ms Edwards (which included a failure to give Ms Edwards advance warning of the likely issues for discussion or to allow her an opportunity to reflect upon what had been put to her and to respond as a result of that reflection).
(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;
[51] I find that the absence of dedicated human resource management specialists or expertise within Wastech most likely impacted on its decision making. The failure of Wastech to take advice on these matters means that it has potentially dismissed Ms Edwards when perhaps a better course would have been to issue a final warning.
(h) any other matters that the FWC considers relevant.
[52] I do not find any other matters that are relevant and which require being taken into account.
REMEDY
[53] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are as follows;
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person
by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
[54] Pursuant to subsection 390(3) of the Act an order for the payment of compensation to a person must not be made unless the Fair Work Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”
[55] Ms Edwards submits that in all the circumstances it would be inappropriate to reinstate her. She submits that the prospect of reinstatement has passed given the passage of time between the date of termination and today. She also submits that she remains distressed about the dismissal and what occurred as a result.
[56] The company submits similarly that it would be inappropriate to reinstate Ms Edwards to her former position.
[57] I am satisfied in all the circumstances that it would be inappropriate to reinstate Ms Edwards and that instead I should give consideration to an order for the payment of compensation.
(a) the effect of the order on the viability of the employer’s enterprise
[58] Mr Bone submits that Wastech is presently in a difficult trading pattern. Ms Mechielsen submits that if an order for compensation were to be made that it should be over some time in order to allow the company to manage its cash flow.
[59] Notwithstanding these submissions, there is nothing before me which would indicate that an order of compensation in and of itself would negatively affect the viability of the employer’s enterprise.
(b) the length of the person’s service with the employer
[60] Ms Edwards’s employment with Wastech was about five years and seven months. While this is a significant period, I find Ms Edwards’ length of service with Wastech does not require an adjustment to be made to the order I propose.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[61] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”. The Full Bench of the Australian Industrial Relations Commission has observed the following in relation to these matters;
“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
"...we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law."
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the "anticipated period of employment". This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the "anticipated period of employment" are deducted. An example may assist to illustrate the approach to be taken.” 28 (endnotes omitted)
[62] In Ms Edwards’ case, the evidence indicates that she was unhappy with her employment at Wastech and that she was in the course of updating her resume to seek employment elsewhere.
[63] It is also relevant that in relation to the reason for dismissal that had Wastech counselled her over her behaviour instead of dismissing her, it is unlikely that Ms Edwards would have continued in employment with Wastech indefinitely. Perhaps either she would have left of her own accord within a short or medium period; or perhaps Wastech may have had reason to terminate her services in the event that she did not heed a final warning given to her.
[64] Drawing these matters together it is my estimation that the anticipated period of employment of Ms Edwards at the time she was dismissed by Wastech was in the order of 11 weeks. In forming this view, I take into account that Ms Edwards was paid one week’s pay in lieu of notice at the time of termination, 29 and that my estimation of the anticipated period of employment is an estimation of how long employment might have continued from the notional end of that one week, had it been worked as notice instead of being paid out as a payment in lieu of notice.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[65] Ms Edwards submits, and I accept that she has endeavoured to obtain employment on many occasions since leaving Wastech’s employment in August 2013. Her evidence is that she has applied for new positions frequently, and continues to do so, and that while she has got so far as to be interviewed she has not yet been successful in obtaining ongoing employment.
[66] In all the circumstances I am satisfied that Ms Edwards has taken reasonable efforts to mitigate the loss she has suffered as a result of her dismissal.
(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
[67] Ms Edwards received from Wastech Engineering upon termination payment of one week’s pay in lieu of termination and the payment of her accrued annual leave entitlements. I have taken into account this payment in lieu of termination in forming my view above of the anticipated period of employment.
[68] Ms Edwards submits, and I accept, that since leaving Wastech’s employment she has worked for approximately three weeks of about 38 hours per week at the rate of about $23 per hour. I estimate therefore that her earnings from employment or other work since dismissal are in the order of $2600.
(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
[69] There is no evidence before me in this regard, since at the time of the determinative conference Ms Edwards indicated that she was not employed.
[70] I find the compensation I propose does not need to be adjusted to take account of income Ms Edwards might receive between the making of the order for compensation and the actual compensation.
(g) any other matter that the FWC considers relevant.
[71] I am not aware of any other considerations which might be relevant to the order of compensation, and have considered all of the circumstances of the case in determining an appropriate remedy.
[72] Section 392(3) of the Act requires that if the Commission is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
[73] Although Wastech characterises Ms Edwards’ behaviour as misconduct, I am not satisfied in all the circumstances that it was and accordingly I do not discount the amount of compensation for that factor.
CONCLUSION AND ORDERS
[74] After consideration of the foregoing issues, I find that Ms Edwards was dismissed and that it was unfair within the meaning of the Act.
[75] I find that reinstatement is not an appropriate remedy in this case.
[76] I find that compensation is appropriate.
[77] The approach by the Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5) of the Act. 30
[78] In relation to the matter of contingencies, I find there are none that ought be taken into account in this matter.
[79] Having regard to the considerations established by s.392 of the Act, and the criteria established by the Commission, I find that compensation should comprise a payment by the respondent to the applicant calculated as follows:
Assessment of remuneration lost: | 11 weeks projected lost income at the rate of $944.72 per week | $10,391.92 |
Employer superannuation contribution on above | 9% | $935.27 |
LESS: | Monies earned since dismissal | - $2,600.00 |
LESS: | Contingencies | $0 |
TOTAL | $8,727.19 |
[80] The above amount does not exceed the compensation cap applying at the time of dismissal.
[81] The compensation payment of $8,727.19 will be taxed by the employer according to law, and is to be made in two instalments, and is to be paid in addition to the payments already made by the Respondent to the Applicant. The first 50% will be paid within 14 days of the Order issued with this decision; the second 50% will be paid within 28 days of the Order issued with this decision.
[82] An Order to the above effect will be issued in conjunction with this decision.
COMMISSIONER
Appearances:
Mr M Edwards with Ms R Edwards on her own behalf
Ms R Mechielsen and Mr N Bone for the Respondent
Hearing details:
2014.
Melbourne:
February, 4
1 Exhibit R1, para 3
2 Exhibit R1, para 36
3 Exhibit R1, para 25
4 Exhibit A2, p 2
5 Exhibit A1, para 2
6 Exhibit A1, para 3
7 Exhibit R1, para 34 and Attachment I
8 Exhibit A1, para 28 and Attachment H
9 Exhibit R1, para 34
10 Exhibit R1, paras 9-10
11 Exhibit R1, Attachment B
12 Exhibit R1, para 6 & 7
13 Exhibit R1, para 13
14 Exhibit R1, para 13
15 Exhibit A1, para 7; Exhibit R1, para 14
16 Exhibit R1, para 15 and Attachment C
17 Exhibit R1, para 17 & 18
18 Exhibit R1, para 20 - 27
19 Exhibit A1, paras 19 and 20
20 Exhibit A1, para 11
21 Exhibit A1, para 13
22 Exhibit A1, para 14 & Attachment D
23 Exhibit A1, para 20 & Attachment F
24 Exhibit A1, para Attachment F
25 Exhibit R1, para 16
26 Exhibit R1, para 36
27 Fair Work Regulations 2009, reg 1.07(2)(a)
28 Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109, at [33] and [34].
29 Exhibit R1, para 25
30 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 32, and Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [33].
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