Mrs Xiao Liu v Hit and Bounce Pty Ltd T/A FX Zone
[2016] FWC 834
•3 MARCH 2016
| [2016] FWC 834 [Note: An appeal pursuant to s.604 (C2016/3005) was lodged against this decision.] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Xiao Liu
v
Hit and Bounce Pty Ltd T/A FX Zone
(U2015/9546)
COMMISSIONER RIORDAN | SYDNEY, 3 MARCH 2016 |
Application for relief from unfair dismissal.
[1] This decision relates to an application by Ms Xiao Wu (Wendy) Liu for an unfair dismissal remedy against Hit and Bounce Pty Ltd trading as FX Zone (Hit and Bounce).
[2] Ms Liu represented herself at the hearing. Hit & Bounce were represented by Ms Stevenson from Stevenson Business Lawyers. Ms Stevenson only received the brief one day before the hearing and had not been provided with all of the materials by Hit and Bounce. Final written submissions were submitted by the Applicant on 21 November 2015 and by the Respondent on 26 November 2015.
[3] FX Building Group Pty Ltd (FXB) is jointly owned by Mr Jamison Merriam and Mr Eduardo Rojas. Mr Rojas is the sole director of FXB.
[4] Hit and Bounce is jointly owned by Mr Merriam and Mr Rojas. Mr Merriam is the sole director of Hit and Bounce. Mr Rojas became a shadow director towards the end of the partnership. Hit and Bounce is an indoor trampoline centre located at Homebush Bay.
[5] Ms Liu worked as a Bookkeeper for Mr Merriam and Mr Rojas for the following periods:
FX Pty Ltd - | 4 October 2011 until 5 August 2011 |
FXB - | 6 August 2012 until 6 March 2014 |
Hit and Bounce - | 7 March 2014 until 4 July 2015 |
I have referred to these Companies as the FX Group of Companies in this decision.
[6] Ms Liu claims that she was dismissed by Mr Merriam on 4 July 2015 without any warning and without being provided with any reason for the termination. Mr Merriam said that Ms Liu was summarily dismissed for transferring money out of the bank account of Hit and Bounce without proper authorisation.
[7] Ms Liu was provided with an interpreter for the proceedings. Mr Merriam initially provided a witness statement that he has made for a matter before the Supreme Court of NSW. The majority of this statement is irrelevant to these proceedings. Mr Merriam subsequently provided a one page statement. Mr Merriam gave additional evidence in chief via telephone from the USA. I regarded this situation as being a breach of the Directions that had being issued by the Fair Work Commission and unfair to Ms Liu. I offered to suspend the proceedings for a month to allow Hit and Bounce to submit a detailed written statement and to allow Ms Liu the opportunity to respond to this evidence. Ms Liu rejected this offer and asked for the Hearing to proceed.
[8] Mr Merriam provided detailed and new information and evidence in his final written submissions. This final submission was submitted without the knowledge or input of Ms Stevenson who subsequently filed a Notice of Representative Ceasing to Act. I have ignored any new material contained in this final submission. It would be unfair to Ms Liu to take this material into account. I am of the view that the behaviour of Mr Merriam throughout the conduct of this matter has been disappointing and inappropriate. I have a great deal of sympathy for the position that Ms Stevenson was placed in due to the behaviour of Mr Merriam and the difficulties and unfairness that this behaviour placed upon Ms Liu.
Background
[9] The evidence in this matter is very confusing and incomplete due to the deliberate and complex company structure. There is a lack of clarity in relation to the management structure of Hit and Bounce and the relationship between Hit and Bounce and FXB for their employees.
[10] The undisputed facts of this case are that:
- Ms Liu has worked for Hit and Bounce as its bookkeeper since March 2014 and for the FX Group of companies since 2011.
- Mr Merriam is the sole director of Hit and Bounce.
- Wages for all employees were paid through FXB.
- Directors and some employees were paid a weekly cash payment. This amount was set at $150.00 per week for Ms Liu.
- The Group Certificate for Ms Liu identifies FXB as the employer.
- Ms Liu transferred money from Hit and Bounce to FXB, on the direction of Mr Rojas, on a regular basis without the authority of Mr Merriam.
- Mr Merriam and Ms Liu had a difficult working relationship. Mr Merriam had not spoken to Ms Liu since March 2015 following an internal report (the Report) from Ms Liu in relation to the amount of money that Hit and Bounce owed its Directors/creditors. Mr Merriam did not support the conclusions of the Report and expressed his dissatisfaction directly to Ms Liu. Mr Merriam was of the stated view that Ms Liu was not doing her job properly and only communicated with Ms Liu by way of email and text message following this discussion.
[11] Ms Liu claims that the FXB MYOB accounting system was used to pay all employees and Directors solely on the basis that the accounting system was already set up at FXB and all of the employees of FXB worked for Hit and Bounce. Ms Liu claims that she spent 100 percent of her time working for Hit and Bounce. Mr Merriam disputes that Ms Liu only worked for Hit and Bounce. Mr Merriam claims that she was doing work for FXB behind his back. Further, Ms Liu claimed that Mr Merriam was withdrawing money out of Hit and Bounce without following proper due process by claiming inappropriate personal expenses.
[12] Ms Liu treated FXB and Hit and Bounce as the one company but that she answered to both Mr Rojas and Mr Merriam:
“PN305
Would you say that you and Mr Rojas remain friends?--- It’s not necessarily be friends but as a previous boss. All these cases, when I need it I will pass some information’s to Eduardo because for me, the two companies, in my eyes, is one and the two bosses, in my eyes, is one. I worked for them and I need get paid – whatever I get unfair dismissed, I seek for the remedy.” 1
[13] Mr Merriam claims that he has been locked out of the email system whilst he was overseas by Mr Rojas and Ms Liu. This allegedly prevented him from participating in the day to day running of his business. In response to questioning from Ms Stevenson, he said:
“PN572
And when you say you were locked out, what are you talking about? What were you locked out from?---Well, what happened was, when I made inquiries about Eduardo and Wendy moving $50,000 out of Hit and Bounce and FX Building Group, this is when everything started happening and I questioned Wendy about it and at that point I had to go back overseas. And while I was overseas I saw that another $20,000 had been moved. So when I questioned them about that, I saw some more money came into my bank account into Hit and Bounce, and I moved that money into my personal bank account and made a statement saying no one is to spend any more money of the company. There was also no more cash to be used unless I am aware of it or unless I approve of it. And at that point I was locked out of my bank account which I was a shareholder of FX Building Group, which I actually built the company. So I was locked out of that and I could not see any more money that was going into there, but Wendy and Eduardo still had full access to Hit and Bounce, and they were moving the money around as they pleased. And that's how everything basically came to a big standstill.” 2
“PN578
Did you have any conversations with Ms Liu about that transfer in or about - - -?---Yes, I did.” 3
And what did you say to her?---I said, "How could you move that money without me authorising it?" I said, "Wendy, you can't move $60,000 without my permission." I said, "It's illegal." I said, "It's called embezzlement." I said, "You can't move that money." And she said, "Don't talk to me about it. Talk to Eduardo. I work for the company. I don't work for you." I also have this by text message and email.” 4
[14] The principal issue between the parties is that Ms Liu has transferred money to FXB on the instruction of Mr Rojas under the guise of alleged loan repayments as a result of “the Report”. Mr Merriam gave an instruction for this practice to cease via email on 2 July 2015 5. I note that Ms Liu’s email account is identified as “Accounts (FX Zone)”:
“From: Jamison Merriam
Date: 2 July 2015 7:38:59pm
To: <Engineer (FX Zone)> <Accounts (FX Zone)> <Management (FX Zone)
Hello All,
Anyone caught deliberately withholding company information, hiding or stealing company funds, hiding or stealing cash, manipulating emails, servers or anything else without direct instruction from myself will be held accountable for their actions, terminated, and will be dealt with the full extent of the law, including criminal charges.
This applies to all direct employees of FX Zone, employees of a FX Building who have access to the above, contractors and/or family members who have access to privileged information. I expect everyone to follow these orders immediately. A company audit is currently being carries out.
Regards,
Jamison E. Merriam
Sole Company Director”
[15] On 3 July 2015 6, Mr Merriam sent the following email:
“From: Mr Jamison Merriam
To: Eduardo Rojas
Accounts (FX Zone)
Action Items
Wendy and Eduardo, $10,000 cash was withdrawn from the company account without my approval. Please explain what these company funds will be used for by close of business today.
Jamison Merriam
Director”
[16] On 4 July 2015 7, Mr Merriam terminated Ms Liu by email:
“From: Jamison Merriam
To: Wendy Liu
Accounts (FX Zone)
Accounts (FX Building)
Wendy,
You are hereby terminated effective immediately from Hit and Bounce. Please note that if you have somehow become an employee of another company without my knowledge, I am the current lease for 7A Carter St Lidcombe and therefore give you no authorisation to access the premises whatsoever until a legal investigation is concluded for missing company funds. You are hereby put on notice not to destroy, remove, alter or access ANY company information unless it is with direct instruction from myself. You are also hereby put on notice not to make any contact with any supplier’s employees or contractors of Hit and Bounce. My legal practitioner will make contact with you shortly.
Kindest regards
Jamison E. Merriam
Director
Hit and Bounce”
[17] Ms Liu testified that she did not see the email of 2 July 2015 before she was terminated. Ms Liu claimed that she left work at approximately 5pm on that day and was on annual leave on Friday 3 July 2015.
[18] It is not in dispute that Ms Liu was not given an opportunity to respond to any allegations before she was dismissed. The termination email, despite claims by Mr Merriam to the contrary, does not provide Ms Liu with a reason for her dismissal.
[19] Neither party raised the issue of the size of Hit and Bounce and whether the Small Business Fair Dismissal Code applied in the circumstances. Hit and Bounce has a small full time workforce and a number of casual employees. The evidence shows that 85 casual employees worked at Hit and Bounce in the 2014-2015 financial year.
Statutory Provisions
[20] The Small Business Fair Dismissal Code (the Code) states:
388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
The Code
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.
[21] Section 23 of the Fair Work Act 2009 (the Act) is set out as follows:
23 Meaning of small business employer
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.
(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):
(a) the employee who is being dismissed or whose employment is being terminated; and
(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.
[22] Section 387 the Act is outlined below:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
Consideration
[23] I recently wrote to the parties to try and ascertain the actual number of employees, employed by Hit and Bounce ie the number of full time employees and casual employees employed on a regular and systematic basis. Ms Liu responded indicating that she no longer has access to this information. Hit and Bounce did not respond.
[24] Whilst there is no direct evidence to the actual number employed by Hit and Bounce in the lead up to July 2015, I am confident, based on the balance of probabilities and the material supplied by the parties, that there were more than 15 (headcount) employees employed at Hit and Bounce on a regular basis.
[25] I am required to review each of the provisions of the section 387 in determining whether the dismissal of Ms Liu was harsh, unjust or unreasonable.
a) Valid Reason
[26] Ms Liu was dismissed for transferring money out of Hit and Bounce without authorisation or Mr Merriam;
“PN655
Have you give me any reason for the termination? Yes, because funds were missing from my bank account with no explanation.”
[27] The meaning of ‘valid reason’ in s 387(a) is drawn from the judgment of Northrop J in Selvachandran v Peteron Plastics Pty Ltd 8;
“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, common sense way to ensure that the employer and employee are treated fairly.”
I have taken this into account.
b) Notified of Reason
[28] Ms Liu was terminated by email. The email that was sent to Ms Liu on 4 July 2015 does not provide a reason for her termination. I find that Ms Liu was not notified of the reason for her termination. I have taken this into account.
c) Opportunity to Respond
[29] Ms Liu was not given an opportunity to respond to the accusation. Ms Liu would have argued that she was operating under the instruction of Mr Rojas which would have been a relevant consideration for Mr Merriam. I have taken this into account.
d) Refusal of support person
[30] Ms Liu was dismissed by email whilst Mr Merriam was overseas. No termination meeting was convened between the parties. I have taken this into account.
e) Warning about unsatisfactory performance
[31] Ms Liu was not dismissed for unsatisfactory performance, even though Mr Merriam allegedly had serious concerns about her capacity following the release of the report. I have taken this into account.
f) Size of Enterprise – Procedures followed
[32] Hit and Bounce has a small full time workforce but utilizes a large number of casual employees to operate its recreational facility. There is no evidence of any appropriate procedure being followed in Ms Liu’s termination. I have taken this into account.
g) Dedicated HR personnel
[33] Hit and Bounce has no dedicated HR specialist. The decision taken by Mr Merriam to dismiss Ms Liu whilst he was overseas appears to be a decision taken out of frustration. This frustration was caused by Mr Merriam being unable to control the financial transactions that were taking place within the business without his knowledge or authorization. I have taken this into account.
h) Any other Matter
[34] In Byrne v Australian Airlines Ltd9the joint judgement of McHugh and Gummow JJ is of significance,
“128…It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[35] By her own testimony, Ms Liu was of the opinion that she had “two bosses”, namely Mr Merriam and Mr Rojas. It is not in contention that Ms Liu always acted under the instruction of either Mr Merriam or Mr Rojas. There are no allegations that Ms Liu has transferred or misappropriated money for her own benefit. I have taken this into account.
[36] Mr Merriam advised the Commission that Mr Rojas had become a “shadow” Director of Hit and Bounce towards the end of their business relationship. According to Mr Merriam, Mr Rojas was in control of the finances of the business;
“PN524
With Hit and Bounce, could you please explain to the Commissioner your role in that company, and also the role of Mr Rojas Alayo in that company?---I was the director, the sole director. Eduardo was my partner and he shared - he was a shadow director towards the end of our partnership.
PN525
Was sort of tasks did Mr Rojas undertake in relation to Hit and Bound on a day-to-day trading level?---Finances, staff, purchasing, things like that.
PN526
And what was your role on a day-to-day level?---I'm responsible for clientele relationships. I also work with some staff on the floor. I was also the - I did a lot of putting things in place. So building and design.” 10
[37] As a result, it would not have been unusual for Mr Rojas to authorise the payment of accounts or the transfer of funds on a regular basis directly with Ms Liu. I have taken this into account.
[38] Mr Merriam claims that he gave Ms Liu a verbal warning to not transfer any money without his authorisation in March 2015. Mr Merriam further claimed that this warning was repeated in an email. This alleged email was not provided to the Commission in these proceedings. I have taken this into account.
Consideration
[39] I find that Ms Liu transferred money from Hit and Bounce without the requisite authority. This situation arose because Ms Liu was not prepared to accept that FXB and Hit and Bounce were separate companies. Ms Liu was of the opinion that they were the same company. It is not possible for a competent bookkeeper to have this opinion unless such a company arrangement is in writing, has been discussed at senior levels of the Company or has been the subject of a direction from the Directors. As a result, Hit and Bounce has a valid reason to terminate Ms Liu.
[40] It is evident that Ms Liu has a very good relationship with Mr Rojas and a very poor relationship with Mr Merriam. It is beyond my comprehension and understanding how any business could function optimally when the Director/CEO only communicates with the internal accountant/bookkeeper by email or text. The level of mutual trust and confidence between the parties was non-existent as a result of the Report prepared by Ms Liu.
[41] Ms Liu was entitled to the benefits of the procedural fairness provisions of the Act. Ms Liu was not presented with the reason for her termination, nor was she given the opportunity to respond. In Crozier v Palazzo Corporation Pty Ltd 11the Full Bench held;
“[73] As a matter of logic procedural fairness would require 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. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”
[42] On the issue of the employee being given an opportunity to respond the Full Bench said;
“[75] Section 170CG(3)(c) provides that the Commission must have regard to "whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee". For the reasons we have set out in relation to s.70CG(3)(b) we think that the "opportunity to respond" referred to in s.170CG(3)(c) is a reference to any such opportunity which is provided before a decision is taken to terminate the employee's employment.” 12
[43] Having found that Mr Merriam had a valid reason to terminate Ms Liu, I find that the lack of procedural fairness is of such a magnitude to render the termination unjust. Mr Merriam made the decision to terminate Ms Liu without enquiring if Mr Rojas had placed her under any duress to undertake the transfer or whether Ms Liu had understood the previous direction not to transfer any money without the authorisation of Mr Merriam. Every employee is entitled to be afforded the protections of the Act associated with the principles of natural justice. Failure to notify an employee with the reason for their termination or give them an opportunity to respond to the allegation before the decision to terminate has been made, necessarily renders the termination as harsh and unjust.
Remedy
[44] Having found that Ms Liu was unfairly dismissed, I now must determinate the appropriate remedy.
Statutory Provisions
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.
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.
Note: subsection 392(5) indexed to $68,350 from 1 July 2015
(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.
394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.
Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.
Note 2: For application fees, see section 395.
Note 3: Part 6-1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.
(2) The application must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (3).
(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:
(a) the reason for the delay; and
(b) whether the person first became aware of the dismissal after it had taken effect; and
(c) any action taken by the person to dispute the dismissal; and
(d) prejudice to the employer (including prejudice caused by the delay); and
(e) the merits of the application; and
(f) fairness as between the person and other persons in a similar position.
[45] The relationship between the Director and Bookkeeper of any Company is one that is vital to the on-going functionality of any business. It is a relationship necessarily built on mutual trust and confidence. I am satisfied and find that the requisite level of trust and confidence cannot be re-established in this circumstance.
[46] Ms Liu has sought $33,500 as financial compensation for her unfair dismissal. Hit and Bounce did not provide me with any submissions in relation to remedy except to say that Ms Liu’s claim was ridiculous.
Section 392(2) Review
[47] In determining the appropriate level of compensation, I am obligated to apply the criteria in section 392(2) to the facts of this case.
a) I do not believe that my Order will have an adverse affect on the viability of Hit and Bounce.
b) Ms Liu was employed by Hit and Bounce for approximately 16 months. Her employment with FX Group of companies is almost 4 years. I am of the view that the group of FX companies are related to the extent that Ms Liu’s employment traversed naturally through the companies without cessation or interruption.
c) Ms Liu received approximately $55,600 per annum salary plus a bonus of $150.00 per week – totalling some $63,400 for a full year. I am of the view that for Mr Merriam to dismiss Ms Liu in a manner consistent with Act, Mr Merriam would have needed to conduct an appropriate investigation of the alleged misdemeanour (which would have required the engagement of an external resource such as an accountant). This would have typically taken approximately 4 weeks. Mr Merriam then would have to meet with Ms Liu and provide her with the allegation which would normally take a week to organise. Ms Liu would have been entitled to a week to consider and provide a response to the allegation. Mr Merriam would then need to consider Ms Liu’s response before making a determination and then advise Ms Liu accordingly.
Due to the complexities of this case and the need to use external resources, I find that this process would have taken approximately 7 weeks.
d) Ms Liu had only worked for one week prior to the hearing date. I am satisfied that Mr Liu has been actively looking for work since her termination.
e) I am not aware of the amount of work or the level of remuneration that Ms Liu has received since the hearing. I do not believe that it will have an adverse affect on my Order.
f) I do not regard this section as being relevant.
g) I have taken into account the valid reason for Ms Liu’s dismissal, ie, that she transferred money out of the bank account of Hit and Bounce without the authorisation of Mr Merriam.
[48] I have taken into account the formula enunciated in Sprigg v Paul’s Licenced Festival Supermarket 13;
“[188] The Full Bench in Sprigg endorsed the following approach to the assessment of the amount:
Step 1 : Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment.
Step 2 : Deduct moneys earned since termination. Workers compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation awarded. ]
Step 3 : The remaining amount of compensation is discounted for contingencies.
Step 4 : The impact of taxation is calculated to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 5 : The legislative cap on compensation is applied.”
Conclusion
[49] I have taken into account all of the relevant submissions and evidence from the parties.
[50] There is conflicting evidence between Ms Liu and Mr Merriam on a number of significant issues. Whilst I found Mr Merriam’s conduct leading up to the hearing to be inappropriate, on occasions, I also found Ms Liu’s evidence to be deliberately evasive.
[51] Ms Liu transferred approximately $70,000 in March 2015 out of the bank accounts of Hit and Bounce. Mr Merriam did not authorise the transfer of this money. Mr Merriam advised Ms Liu and Mr Rojas that this was inappropriate. Mr Merriam had concerns about the solvency of the company and the possible fraudulent behaviour of those involved in this transfer.
When another transfer occurred in early July 2015 Mr Merriam sought clarification of the reason from Ms Liu and Mr Rojas. No explanation was forthcoming so Mr Merriam took the initiative in dismissing Ms Liu.
[52] Ms Liu was the bookkeeper for Hit and Bounce. Mr Merriam, as the Director of Hit and Bounce, should have been able to trust and rely on Ms Liu to act in an honest and professional manner at all times. Instead, Ms Liu has acted in collusion with Mr Rojas to implement the findings of her hotly disputed Report into the amount of money owed by the business to each Director. This was inappropriate conduct and provided a valid reason for her dismissal.
[53] However, all employees are entitled to the protections of procedural fairness, including Ms Liu. Ms Liu did not receive a “fair go” in relation to the termination process. As a result, I find that Ms Liu’s dismissal was unjust and harsh, but only in relation to the questions of process.
[54] I order that Hit and Bounce pay Ms Liu seven weeks pay ($8,534.61). After taxation and applying the principles in Sprigg this equates to $7,988.40.
[55] An Order for this payment will be published
COMMISSIONER
1 PN305 – Transcript dated 17 November 2015
2 PN572 – Transcript dated 17 November 2015
3 PN578 – Transcript dated 17 November 2015
4 PN579 – Transcript dated 17 November 2015
5 Exhibit M2 – Email dated 2 July 2015
6 Exhibit M2 – Email dated 3 July 2015
7 Exhibit L2 – Email dated 4 July 2015
8 (1995) 62 IR 371
9 (1995) 185 CLR 410 at 465 - 468
10 PN524-526 – Transcript dated 17 November 2015
11 (2000) 98 IR 137 [73]
12 (2000) 98 IR 137 [75]
13 (1998) 88 IR 21
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Mrs Xiao Liu v Hit and Bounce Pty Ltd T/A FX Zone [2016] FWC 834
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