Ms Amanda Virgona v Active Adult Management Pty Ltd T/A Retire Australia
[2012] FWA 6457
•1 AUGUST 2012
[2012] FWA 6457 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Amanda Virgona
v
Active Adult Management Pty Ltd T/A Retire Australia
(U2012/5826)
COMMISSIONER CAMBRIDGE | SYDNEY, 1 AUGUST 2012 |
Unfair dismissal - reason for dismissal not sound, defensible or well founded - notification of dismissal provided for retrospective dismissal - dismissal harsh, unjust and unreasonable - compensation ordered.
[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009, (the Act). The application was made by Amanda Virgona, (“the applicant”) and the respondent has been identified as Active Adult Management Pty Ltd (ABN: 53118132817) (“AAM”), trading as Retire Australia.
[2] The application was lodged at Sydney on 5 March 2012. The application nominated the date that the applicant’s dismissal took effect was 22 February 2012. Consequently the application was made within the 14 day time limit prescribed by subsection 394 (2) of the Act.
[3] Conciliation of the claim was unsuccessful and AAM raised an objection which asserted that it was not the employer of the applicant. This objection was determined by way of a Decision issued by Fair Work Australia (FWA) on 21 June 2012, [2012] FWA 5243, PR525375.
[4] Subsequently the matter has proceeded to a Hearing of the substantive application which was held on 26 July 2012. At the Hearing on 26 July the applicant continued to appear on her own behalf and Ms S Hoey appeared via telephone for AAM.
[5] The parties relied upon evidence which had been adduced during the earlier Hearing to deal with the jurisdictional objection raised by AAM. In addition, the applicant introduced some further evidence (Exhibit 4), and she was re-called as a witness. Ms Hoey cross-examined the applicant. AAM did not seek to adduce any further evidence in opposition to the application.Both the applicant and Ms Hoey made further oral submissions during the Hearing held on 26 July.
Factual Background
[6] The applicant commenced employment with AAM on 13 December 2010. She worked as the Village Manager of the Rose Bay Towers Retirement Village (Rose Bay Village). Although the applicant’s employment was transferred to another employer for a period during 2011, she was transferred back to employment with AAM in about January 2012.
[7] AAM operated the Rose Bay Village and other aged care facilities, under a commercial agreement with Milstern. The precise details of these commercial arrangements are not relevant to these proceedings. Importantly however, in about December of 2011, Milstern gave 120 days notice to AAM that it would terminate the commercial agreement under which AAM operated, inter alia, the Rose Bay Village.
[8] Following the notification by Milstern that it was to terminate the commercial agreement with AAM, discussions occurred between Milstern and AAM about various aspects of the termination of the agreement including the potential transfer of staff of AAM to Milstern. Unfortunately these negotiations did not secure any agreement between AAM and Milstern and on Friday 17 February 2012, AAM decided to immediately terminate the agreement with Milstern.
[9] The applicant, inter alia, was not notified of the immediate termination of the agreement under which AAM operated aged care facilities such as the Rose Bay Village. The applicant attended for work as usual for the week commencing Monday 20 February 2012. On the afternoon of Wednesday 22 February the applicant was told by a representative of Milstern that the agreement between AAM and Milstern had been terminated on the previous Friday. The Milstern representative told the applicant that AAM no longer had any involvement in the operational control of the Rose Bay Village and the applicant was asked to leave the premises.
[10] On or about Friday 24 February, Mr Tim Russell sent a letter to the applicant and other employees of AAM which advised of the termination of the agreement between AAM and Milstern that had occurred the previous Friday. The letter from Mr Russell 1 went on to state: “AAM is now at a point where it has to terminate your employment immediately as we cannot continue to support the current uncertainty.”
The Case for the Applicant
[11] The applicant submitted that her dismissal was unfair because she was given no notice and had been led to believe that even though a new management company was to take over the Rose Bay Village her job was safe.
[12] The applicant also submitted that she had never received any negative feedback from any more senior representatives of AAM. The applicant said that she believed that she was a valuable member of staff.
[13] The applicant further submitted that the way in which she was dismissed was harsh, unjust and unreasonable. Further, she said that her job had not been made redundant as another person was filling the position that she worked in.
[14] The applicant made strong complaint that management of AAM terminated the commercial agreement with Milstern on Friday 17 February 2012 but did not take any action to inform her until it was prompted to on Wednesday of the following week. In the meantime Milstern representatives had informed her of the termination of the commercial agreement and removed her from the workplace in what the applicant said where embarrassing and highly stressful circumstances.
[15] The applicant said that she had been treated very badly by AAM and it had taken 3 months before she found other employment in a different industry. The further employment that the applicant obtained was casual and she received less pay than when she was employed by AAM.
The Case for AAM
[16] Ms Hoey, who appeared by telephone for AAM at the Hearing, made submissions which to some extent traversed the earlier arguments about whether AAM was the employer of the applicant.
[17] Ms Hoey said that AAM had been forced into the situation where it had no alternative but to terminate the commercial agreement with Milstern. Ms Hoey said that AAM were not the cause of the applicant’s loss of employment.
[18] Ms Hoey said that AAM was sorry for what happened and it apologised to the applicant.
Consideration
[19] Section 385 of the Act stipulates that FWA must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
[20] In this case there was no suggestion that the respondent was a small business and the respondent did not advance a case that there was genuine redundancy involved. Consequently subsections 385 (c) and (d) of the Act do not require any further contemplation. As mentioned above, the issue as to whether the applicant had been dismissed by AAM was resolved in the earlier Decision.
[21] Logically therefore the matter must proceed to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that FWA must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:
(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 FWA considers relevant.
387 (a) - Valid reason for the dismissal related to capacity or conduct
[22] The reason for the applicant’s dismissal was described by Mr Russell in his undated letter to the applicant which she received on 28 February 2012. The decision to dismiss was said to arise from “current uncertainty” which had been created as a consequence of AAM terminating its commercial agreement with Milstern, with immediate effect, on 17 February 2012.
[23] There was no suggestion that anything that the applicant did or said contributed as reason for her dismissal. The evidence established that the applicant was a diligent, loyal and enthusiastic worker with an exemplary work record. Indeed, from observations of the applicant as a witness and at other times during proceedings she impressed me as a decent, well-meaning person of reputable character.
[24] The prospect that someone could be dismissed for reason of unspecified uncertainty would seem to prima facie, challenge the established notions that a valid reason for dismissal should be something that was “sound, defensible or well founded”. 2
[25] To the extent that the causal chain can be traced, there was a strong suggestion that it was the dramatic actions of AAM in immediately terminating its commercial agreement with Milstern which led to the “uncertainty” for which the applicant was dismissed.
[26] There was no evidence provided to establish the precise nature of the “uncertainty” or the basis for its apparent creation. In order for the “uncertainty” to represent a valid reason for dismissal the Tribunal would at very least, need some evidence upon which to establish the basis for the decision to terminate the commercial agreement with Milstern and the nature of the “uncertainty” which subsequently followed.
[27] Consequently there was no evidence upon which to establish a valid reason for the dismissal of the applicant. Indeterminate “uncertainty” does not provide valid reason for dismissal.
387 (b) - Notification of reason for dismissal
[28] The written notification of the reason for the applicant's dismissal was provided some 9 days after AAM took the cataclysmic decision which commenced the chain of events that culminated with the dismissal. Disturbingly, the notification clearly provided for retrospective dismissal with advice that payment of wages would be made up to 17 February 2012. I understand that underpayment of wages and superannuation issues may have been pursued separately.
387 (c) - Opportunity to respond to any reason related to capacity or conduct
[29] In this instance there were no issues relating to the applicant’s capacity or conduct which contributed to the reason for dismissal. In any event AAM did not provide any opportunity for the applicant to respond to issues regarding the “uncertainty”. There was no opportunity for discussion about potential alternative duties or any other means to address the impact on the applicant of the “uncertainty”.
387 (d) - Unreasonable refusal to allow a support person to assist
[30] There was no process whereby the applicant could have benefited from the assistance of a support person because the decision to dismiss was taken without any consultation.
387 (e) - Warning about unsatisfactory performance
[31] This factor was of no relevance in this instance.
387 (f) - Size of enterprise likely to impact on procedures
[32] The size of the employer’s enterprise including the engagement of approximately 45 employees, should have allowed for a higher standard of employee management procedures to have been followed. The employees of small or medium size businesses might expect a degree of informality about some employment procedures but they are nevertheless entitled to be treated with dignity. On any reasonable and objective assessment it must be considered unacceptable to send a communication by post which contains written advice of retrospective dismissal from employment for reason of “uncertainty”.
387 (g) - Absence of management specialists or expertise likely to impact on procedures
[33] AAM appeared to engage an agent, Ms Hoey, as a dedicated employee relations management specialist. Ms Hoey is apparently the Human Resources Manager of Retire Australia. In any event, the engagement directly or indirectly of dedicated employee relations specialists should have avoided the severely sub-standard employment practices evident in this instance.
387 (h) - Other relevant matters
[34] It is unnecessary to devote time to any further consideration of the circumstances of this matter.
Conclusion
[35] The circumstances surrounding the dismissal of the applicant in this instance can be generously described as plainly unacceptable. The notion of providing written advice of retrospective dismissal for reason of “uncertainty” reflects very poorly upon the relevant managers of AAM.
[36] Regrettably AAM has refused to accept the responsibility that it has as employer of the applicant and apparently others also. The disputation which arose between AAM and Milstern cannot be used as a means to abdicate the responsibilities and obligations that AAM has to its employees.
[37] Even if AAM believed that it acted properly when it summarily terminated the commercial agreement with Milstern it had legal and ethical obligations to engage with its employees about the decision it had taken and the impacts that were to follow. Instead, AAM management did not make any contact with loyal staff such as the applicant and instead tried to hide from the unfolding disaster in the hope that Milstern might employ some or all of their staff.
[38] I find that there was no valid reason for the dismissal of the applicant and it was implemented by way of a grossly deficient process. Consequently the dismissal of the applicant was harsh, unjust and unreasonable.
Remedy
[39] The applicant did not seek reinstatement as remedy for her unfair dismissal but instead, an amount of monetary compensation. In the circumstances I am satisfied that reinstatement of the applicant would be inappropriate and that payment of compensation would represent an appropriate remedy for the applicant's unfair dismissal.
[40] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines which were established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket 3 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 4.
[41] Firstly, I confirm that an Order of the payment of compensation to the applicant will be made against the respondent in lieu of the reinstatement of the applicant.
[42] Secondly, in determining the amount of compensation that I Order I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act. There was no evidence that an order of compensation would impact on the viability of the respondent’s enterprise. The applicant had approximately 1 year and 2 month’s service. The applicant would have been likely to have received minimum weekly remuneration of $1,153.50. The applicant made efforts to mitigate the loss suffered because of the dismissal and she secured alternative work after a period of about 3 months unemployment. The alternative employment is of inferior status and does not provide remuneration of comparable levels.
[43] Thirdly, in this instance I am satisfied that misconduct of the applicant did not contribute to the employer's decision to dismiss.
[44] Fourthly, I confirm that the amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.
[45] Consequently for the reasons outlined above I have decided that an amount approximating with twenty weeks remuneration should be ordered as compensation to the applicant. That amount is $23,070.00. Accordingly separate Orders [PR527305] providing for remedy in these terms will be issued.
COMMISSIONER
Appearances:
Ms A. Virgona on her own behalf.
Ms S. Hoey on behalf of AAM.
Hearing details:
2012.
Sydney:
July, 26.
1 Annexure “C” to the application.
2 Selvachandran v Peteron Plastics Pty Ltd, (Northrop J), (1995) 62 IR 371 at 373, 7 July 1995.
3 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
4 Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.
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