Ms Celeste Price v MJ and DJ O'Donnell T/A Fairhill Farm Partnership
[2016] FWC 3243
•27 MAY 2016
| [2016] FWC 3243 [Note: An appeal pursuant to s.604 (C2016/4167) was lodged against this decision and the order arising from this decision.] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Celeste Price
v
MJ and DJ O’Donnell T/A Fairhill Farm Partnership
(U2016/343)
COMMISSIONER SAUNDERS | NEWCASTLE, 27 MAY 2016 |
Application for relief from unfair dismissal.
[1] Ms Celeste Price was employed by MJ and DJ O’Donnell trading as the Fairhill Farm Partnership (Fairhill Farm) as a farm hand from September 2012 until January 2016. Fairhill Farm denies that it dismissed Ms Price, notwithstanding that Ms Debbie O’Donnell sent Ms Price an email on 19 January 2016 in which she concluded: “When we have a job that requires someone that does not wish to have responsibility I will call you.” Ms Price alleges that Fairhill Farm did terminate her employment and her dismissal was harsh, unjust and unreasonable.
Agreed matters
[2] It is not in dispute and I am satisfied on the evidence that:
(a) Ms Price’s application was made within the period required by section 394(2) of the Act;
(b) Ms Price was at all times engaged and paid as a casual employee by Fairhill Farm;
(c) Ms Price was a person protected from unfair dismissal because:
(i) she was employed by Fairhill Farm on a regular and systematic basis as a casual employee during the whole of the period from September 2012 until 19 January 2016;
(ii) during the whole of her period of service as a casual employee with Fairhill Farm from September 2012 until 19 January 2016, Ms Price had a reasonable expectation of continuing employment by Fairhill Farm on a regular and systematic basis;
(iii) she was covered by a modern award in relation to her employment with Fairhill Farm; and
(iv) the sum of Ms Price’s annual rate of earnings ($22.24 per hour from about December 2015) were less than the high income threshold.
(d) Fairhill Farm was a “small business employer” as defined in section 23 of the Fair Work Act 2009 (Cth) (the Act), on the basis that it employed four employees, including Ms Price, at the time her employment came to an end; and
(e) The cessation of Ms Price’s employment with Fairhill Farm was not a case of genuine redundancy.
Issues
[3] The issues to be determined in this matter are as follows:
(a) Whether Ms Price was dismissed by Fairhill Farm?
(b) If so, whether the dismissal was consistent with the Small Business Fair Dismissal Code (the Code)?
(c) If not, whether the dismissal was harsh, unjust and/or unreasonable?
(d) If so, what remedy, if any, ought be granted to Ms Price?
Was Ms Price dismissed?
What constitutes a dismissal under the Act?
[4] Subsection 386(1) of the Act governs when a person has been dismissed:
“A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”
[5] A Full Bench of the Commission considered s.386 in Barkla v G4S Custodial Services Pty Ltd 1:
“[23]It is necessary in the first instance to consider the communications of the employer to the employee to determine whether any of these communications constitutes an express termination...
[24]It is then necessary to consider whether any action of the employer amounted to termination of employment. It should be noted in this case that Mr Barkla did not resign from his employment. Rather he alleges that the employer's conduct amounted to dismissal. There is considerable law on whether a resignation is forced by conduct of the employer or that the employer's conduct amounts to a constructive dismissal either at common law or within the statutory definitions. In our view this law is helpful in the present context because it articulates the nature of employer conduct which will bring an employment contract to an end. This is what Mr Barkla has argued in this case. In O'Meara v Stanley Works Pty Ltd a Full Bench of the Australian Industrial Relations Commission discussed the relevant case law and outlined the legal considerations in the following terms:
…
‘[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether "the act of the employer [resulted] directly or consequentially in the termination of the employment." Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign." [emphasis added]’
[6] The reasoning in O'Meara was treated as fully applicable to s.386(1) of the Act by the Full Bench in Ryan v ISS Integrated Facility Services Pty Ltd. 2
Events leading up to 19 January 2016
[7] For about the first year of her employment with Fairhill Farm, Ms Price ordinarily worked four days during the week, and during the breeding season she also worked some weekends. After the first year of her employment with Fairhill Farm, Ms Price’s hours of work were extended such that she routinely worked from about 7:00am until about 4:30pm or 5:00pm Monday through to Thursday, either a full day on a Friday or just some hours during Friday morning, together with some weekend work during the breeding season.
[8] Throughout her employment with Fairhill Farm, Ms Price’s practice was to drive from her home to Fairhill Farm on Sunday evening and remain living on the farm throughout the week until she finished work at some time on the following Friday. During the week Ms Price occupied a room that was provided to her by Fairhill Farm as one of the terms and conditions of her employment.
[9] On the morning of Friday, 15 January 2016, Ms Price commenced work early at Fairhill Farm and undertook her normal duties of caring for the thoroughbred horses with the other staff members.
[10] Ms Price gave evidence, which I accept, to the following effect in relation to the events that took place while she was working at Fairhill Farm during the morning of Friday, 15 January 2016:
“While the horses were undertaking their exercise on the walking machine, I was doing other tasks including finding blankets for some horses. The horses on the exerciser had been prepared for their exercise by another staff member called Darlene. Darlene was new to the Farm but this was part of her normal work tasks. During this time, one of the partners of the Farm, Mike O’Donnell, approached the horses and noticed that one of the horses had not been properly dressed and prepared with their roller harness. Mike’s response was to raise his voice and express his frustration that it had not been prepared properly. When it was made known that Darlene had made the mistake, Mike proceeded to approach me and look at me and say words to the effect that: ‘Someone needs to take responsibility around here’. As this was said whilst looking directly at me, I took this to mean that I was being blamed for the poor work practices of the other staff member.
The events that took place at the roller were similar to the broad tensions at work that morning of Friday 15 January. There had also been an incident which occurred while I was holding a horse that swung its head around in a very quick and forceful movement to hit my face. As the horse’s head hit my face, I used my hand to block the horse’s head and push it back away from me in order to protect my face. I did not hit the horse and I have not hit horses at any other time during my employment on the Farm, or otherwise.”
[11] Later in the morning on Friday, 15 January 2016, Ms Price left Fairhill Farm to attend her doctor’s appointment in the neighbouring town of Kurri Kurri. Ms Price’s doctor’s appointment had been previously approved by her employer. The appointment related to an injury which Ms Price had sustained while undertaking work at Fairhill Farm. When Ms Price returned to Fairhill Farm after her appointment, she was informed by Ms O’Donnell, one of the partners of Fairhill Farm, that she could leave early for the weekend, which she did. Ms Price was not told prior to leaving for her doctor’s appointment that she would not be required to undertake further work on that day, although it was not unusual for Ms Price to finish work early on a Friday.
[12] The next contact Ms Price had with Fairhill Farm was on Sunday, 17 January 2016, when she received the following text message from Ms O’Donnell at 10:48am:
“Hi Celeste please can you come here this afternoon for a meeting to discuss your future here. It appears for a long while now probably since you came back from holiday that you don’t really want to be working here so we need to sort it out. Let me know what time you will be here.”
[13] Ms Price responded by text message to Ms O’Donnell at 4:01pm:
“I am busy I won’t be back until tonight.”
[14] Twenty-six minutes later Ms O’Donnell replied with a further text message to Ms Price (at 4:27pm):
“There is no work for you tomorrow. We need to talk.”
[15] Ms O’Donnell gave evidence that her instruction to Ms Price to the effect that there was no work for her on Monday, 18 January 2016 had nothing to do with the fact that Ms Price was not available to meet with Ms O’Donnell for an unpaid meeting on the afternoon of Sunday, 17 January 2016. I do not accept her evidence in that regard. Ms O’Donnell confirmed that 4:27pm on Sunday, 17 January 2016 was the first occasion on which she had informed Ms Price that there was no work for her the following day, yet she could not explain in any satisfactory way why, contrary to the usual arrangements, there was no work available for Ms Price on the following day (Monday), nor could Ms O’Donnell explain why her text message to Ms Price informing her about the lack of available work the following day was sent only 26 minutes after Ms Price informed her that she was not available to meet on the Sunday afternoon. Given the absence of any such satisfactory explanation and the close proximity in time between the two text messages, I find, on the balance of probabilities, that the fact Ms Price had not agreed to meet with Ms O’Donnell on Sunday afternoon was a substantial and operative reason for the decision not to offer Ms Price any work on the following day.
[16] Ms Price and Ms O’Donnell exchanged the following additional text messages on the afternoon of Sunday, 17 January 2016:
(a) Text message from Ms Price to Ms O’Donnell at 4:28pm:
“So everything is my fault is it?”
(b) Text message from Ms O’Donnell to Ms Price at 4:40pm:
“We need to talk that is why I asked if you would come this afternoon.”
(c) Text message from Ms Price to Ms O’Donnell at 4:44pm:
“So I could drive all the way up there to get told off and then drive all the way back because there is no work for me. It already sounds like you guys have decided what you are doing.”
[17] In accordance with Ms O’Donnell’s text message, Ms Price did not attend work on Monday, 18 January 2016.
[18] At 4:46pm on Monday, 18 January 2016, Ms Price sent an email to Ms O’Donnell in the following terms:
“Hi Debbie
I am writing to you in response to your request for a meeting. Could I please ask you to outline what issues you would like to discuss so that I am not unprepared in the meeting. Are you able to clarify the issues for me in a return email?
I am available to attend the meeting tomorrow afternoon at 5pm. I would also like to bring a support person with me which will be my sister, Emma Roberts.
Could you please respond to me as soon as possible and confirm tomorrow’s meeting.
Finally, could you please advise when my next shift is as you advised me on Sunday there was no work for me today?
Kind regards,
Celeste”
[19] Because Ms Price was not asked or instructed to attend work on Tuesday, 19 January 2016, she did not do so.
[20] At 11:19am on Tuesday, 19 January 2016, Ms Price sent the following text message to Ms O’Donnell:
“Just need to confirm that you have received the email I had sent you yesterday afternoon.”
[21] Ms O’Donnell received that text message and then, at some stage later in the day, checked her emails, at which time she saw the email from Ms Price. At 6:40pm on Tuesday, 19 January 2016 Ms O’Donnell replied as follows to Ms Price’s email of 18 January 2016:
“Hi Celeste
Every text up until this email from you has been confronting, when all I wanted to do was have a meeting with you on Sunday. You made it very obvious by all this and comments to others that you are not happy in the job, it was news to us. The issues I wanted to discuss are no longer the centre of focus.
You have had a very privileged position here but it appears you must have taken it for granted. These are not things I wish to discuss by email or with other people.
You have made your position clear by your attitude. When we have a job that requires someone that does not wish to have responsibility I will call you.
Kind regards
Debbie”
[22] There was no further communication between Ms O’Donnell and Ms Price, nor was Ms Price offered any further shifts to work at Fairhill Farm.
[23] Ms Price interpreted Ms O’Donnell’s email of 19 January 2016, together with the lack of any further communication from Ms O’Donnell or any offer of further work, to mean that she had been dismissed. Ms Price attended Fairhill Farm about two weeks after 19 January 2016 to pack up her room and take her personal belongings home.
Application of legal principles re dismissal
[24] There is no suggestion in this case that Ms Price resigned. The question is whether her employment was terminated on Fairhill Farm’s initiative.
[25] In my view, none of the communications between Ms Price and Ms O’Donnell leading up to and including 19 January 2016, whether considered in isolation or collectively, expressly terminated Ms Price’s employment as a regular casual employee of Fairhill Farm. None of that correspondence made reference to the termination or cessation of Ms Price’s employment with Fairhill Farm.
[26] It is next necessary to consider whether any action of Fairhill Farm amounted to a termination of Ms Price’s employment. Ms O’Donnell gave evidence that neither she nor her husband, the other partner in Fairhill Farm, subjectively intended to dismiss Ms Price in January 2016. I do not accept that evidence. In my view, the email from Ms O’Donnell to Ms Price dated 19 January 2016 was an action on the part of the employer which was intended to bring Ms Price’s employment with Fairhill Farm to an end. The strong language of the final sentence of that email, when read in context, demonstrates, in my view, that Fairhill Farm did not have any intention of offering or providing further work to Ms Price.
[27] In any event, I am satisfied that the events leading up to and including 19 January 2016, as set out in paragraphs [10] to [21] above, together with the fact that there were no further communications with, or offers of shifts or work to, Ms Price after 19 January 2016, had the probable result of bringing the employment relationship to an end. Any reasonable person in Ms Price’s position would have understood the email from Ms O’Donnell sent on 19 January 2016 to Ms Price as a clear and strong message that there would be no further work offered to Ms Price at Fairhill Farm. In particular, there was no realistic prospect of Fairhill Farm ever having a “job that requires someone that does not wish to have responsibility”. Accordingly, a reasonable person in Ms Price’s position would have concluded, as she did, that she was never going to be “called” by Ms O’Donnell or offered further work.
[28] It follows that I am satisfied that Ms Price’s employment as a regular casual employee of Fairhill Farm was terminated on her employer’s initiative, with the result that she was dismissed within the meaning of s.386(1)(a) of the Act on 19 January 2016.
Was Ms Price’s dismissal consistent with the Code?
[29] I find that Ms Price’s dismissal by Fairhill Farm was not consistent with the Code for the following reasons:
(a) First, the “summary dismissal” part of the Code is not relevant because there is no suggestion in this case that Ms Price engaged in conduct sufficiently serious to justify immediate dismissal, or the employer believed that she engaged in such conduct; and
(b) Secondly, Fairhill Farm did not comply with the “other dismissal” part of the Code because:
(i) Fairhill Farm did not give Ms Price a reason why she was at risk of being dismissed; and
(ii) Fairhill Farm did not warn Ms Price that she was at risk of being dismissed if there was no improvement, nor was Ms Price given a chance to respond to such a warning or to rectify any problem.
Was Ms Price’s dismissal harsh, unjust and/or unreasonable?
[30] The ambit of the conduct which may fall within the phrase “harsh, unjust or unreasonable” was explained in Byrne v Australian Airlines Ltd 3 by McHugh and Gummow JJ as follows:
“… 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 misconduct which the employee 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.”
[31] The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out in section 387 of the Act. I will deal with each of these matters in turn below.
Valid reason (s.387(a))
[32] The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. 4 The reason for the dismissal should be “sound, defensible and well founded”5 and should not be “capricious, fanciful, spiteful or prejudiced.”6
[33] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 7 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).8
[34] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.9 It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 10
[35] Ms O’Donnell maintained in her evidence that she did not intend to dismiss Ms Price and she envisaged Ms Price staying on as a long term employee of Fairhill Farm. Consistent with that position, Fairhill Farm did not argue that it had a valid reason to dismiss Ms Price. Indeed, Fairhill Farm’s final written submissions included the following contentions:
“It is Fairhill Farm’s submission that there were no reasons for Ms Price to believe that she would be either terminated or disciplined. The incidents involving the roller harness and the horse moving its head were minor incidents that were dealt with at the time.”
[36] The highpoint of Fairhill Farm’s evidentiary case concerning criticisms of Ms Price’s conduct or performance is set out in the following parts of Ms O’Donnell’s witness statement:
“2. Mike and I had recently discussed the possibility of sorting out a Manager for the Farm and we decided to talk to Celeste about her future with us with that in mind. We wanted to establish if she had any interest in this. Although she had not been good in previous months in her work, we thought maybe she was bored with what she was doing and we thought she might be interested in a more responsible role.
…
14. During the morning of the 15th of January 2016 Celeste had been seen by me in front of other staff hitting a horse. I reprimanded her, but never at any time was she threatened with the loss of her job. I have been made aware by another staff member since Celeste has been gone of her hitting the horses as well.”
[37] Ms Price denies these criticisms of her conduct and performance. Her explanation of what took place in relation to her hand coming into contact with a horse’s face on Friday, 15 January 2016 is set out in paragraph [10] above. I accept that explanation. It is plausible. Further, I found Ms Price to be an honest and reliable witness. She gave evidence in a direct and frank manner. She clearly cares for the thoroughbred horses she worked with. Given the obvious importance of those horses to Fairhill Farm’s business, I am satisfied, on the balance of probabilities, that Ms Price would have received more than a “reprimand” if she had been witnessed by Ms O’Donnell hitting a horse at work.
[38] Ms Price gave the following evidence, which I accept, in relation to her attitude at work:
“In response to the claims in the text message that I had not wanted to work there since I returned from my holiday, I do not know what Debbie meant. I was committed to my work on the Farm and often put extra hours in to ensure all work required could be done in the best quality possible. I may from time to time have mentioned in passing that it was a long drive from my other home in Scone and one day I might need to find work closer, I also had been hurt on the Farm and may have discussed frustration at the pain that I felt. However, at all times I remained focused and committed to doing my work to the best of my ability and enjoyed my work intending to stay there long term.”
[39] If Ms Price had been other than a diligent and good performing employee, I do not believe that Ms O’Donnell would have considered her for the role of Farm Manager or another responsible role.
[40] In its final written submissions, Fairhill Farm also criticised Ms Price for failing to attend the workplace on Tuesday, 19 January 2016 without providing any notice or excuse. There is no proper basis for this criticism. Ms Price intended to adopt her usual practice of arriving at the Fairhill Farm on Sunday evening in readiness for a week’s work at the Farm. However, the text messages instigated by Ms O’Donnell altered the usual course of events in a significant way. In particular, Ms O’Donnell informed Ms Price at 4:27pm on the afternoon of Sunday, 17 January 2016 that there was “no work for you tomorrow. We need to talk.” In her email sent to Ms O’Donnell on Monday, 18 January 2016, Ms Price offered to meet with Ms O’Donnell. There was no such meeting. Ms O’Donnell did not respond to Ms Price’s email until 6:40pm on Tuesday, 19 January 2016. At no time was Ms Price rostered, directed or requested to attend work on Tuesday, 19 January 2016. In those circumstances, Ms Price did not “fail” to attend work on Tuesday, 19 January 2016.
[41] For the reasons set out above, there was not, in my view, a valid reason for Ms Price’s dismissal related to her conduct or capacity.
Notification of the valid reason and opportunity to respond (s.387(b)&(c))
[42] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made 11, and in explicit12 and plain and clear terms.13 In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following (at [73]):
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the 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.”
[43] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 14
[44] Ms Price was not notified of the reasons for the termination of her employment before the decision was made to dismiss her, nor was she provided with an opportunity to respond to Fairhill Farm’s reasons for her dismissal.
Unreasonable refusal by the employer to allow a support person (s.387(d))
[45] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.
[46] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”15
[47] Ms Price informed Ms O’Donnell in her email dated 18 January 2016 that she was available to attend a meeting and requested that she be permitted to bring a support person to the meeting. Ms O’Donnell made clear in her reply on 19 January 2016 that she was no longer willing to participate in a meeting with Ms Price. Further, the reference in Ms O’Donnell’s email reply of 19 January 2016 to her not wishing to discuss the issues “with other people” was, in my view, a rejection of Ms Price’s request to have a support person with her at a meeting. That conclusion is reinforced by the following statement in Ms O’Donnell’s witness statement:
“9. …Said she was available for a meeting on Tuesday at 5pm and wanted to bring a support person. Also asking when her next shift would be. We will not be dictated to by staff.” [emphasis added]
[48] In the circumstances set out above, I am satisfied that Fairhill Farm’s conduct constituted an unreasonable refusal to allow Ms Price to have a support person present to assist at any discussions relating to her dismissal.
Warnings regarding unsatisfactory performance (s.387(e))
[49] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal.
[50] In this case, Fairhill Farm has not alleged that Ms Price’s performance was unsatisfactory, other than in the text message sent on Sunday, 17 January 2016 asserting that Ms Price did not “really want to be working here”. Ms Price was not warned about any such unsatisfactory performance before her dismissal.
Impact of the size of the employer’s enterprise on procedures followed (s.387(f))
[51] Fairhill Farm is a very small employer. I am satisfied that its small size had a negative impact on the procedures followed leading up to the termination of Ms Price’s employment. However, Ms Price should, at the least, have been given the opportunity of meeting with Ms O’Donnell, together with Ms Price’s support person, after 18 January 2016.
Absence of dedicated human resources management specialist/expertise on procedures followed (s.387(g))
[52] There is no evidence as to whether Fairhill Farm had, at the date of Ms Price’s dismissal, any dedicated human resource management specialists or expertise. However, I infer that it did not have any such human resource management specialists or expertise, having regard to the small size of its business and its structure as a husband and wife partnership. The absence of those matters had a negative impact on the procedures followed in effecting Ms Price’s dismissal.
Other relevant matters (s.387(h))
[53] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
[54] I have had regard to the following other matters in considering whether Ms Price’s dismissal was harsh, unjust and/or unreasonable:
(a) In addition to the fact that there was no valid reason for Ms Price’s dismissal based on her capacity or conduct, there was no other identifiable legitimate reason for her dismissal;
(b) Ms Price was employed by Fairhill Farm for about 3.5 years on a regular basis. I am satisfied on the evidence that Ms Price’s performance and conduct as an employee during that time was satisfactory; and
(c) Ms Price’s dismissal from her employment with Fairhill Farm has been harsh, in the sense that her dismissal has had negative personal and economic consequences for her. Ms Price was unemployed for about two months following her dismissal. During that time she was forced to rely on her income protection insurance to make repayments on her car loan and personal loan. The alternative employment Ms Price has found is in the role of a casual traffic control worker. Her work in that role is unstable; her hours of work can, and do, vary significantly from week to week. Ms Price’s dismissal is also harsh because it is disproportionate to the gravity of her conduct.
Conclusion as to whether the dismissal was unfair
[55] Having considered each of the matters specified in section 387 of the Act, as set out in paragraphs [32] to [54] above, I am satisfied the dismissal of Ms Price by the Respondent was harsh, unjust and unreasonable.
Remedy
[56] In light of my findings that Ms Price was protected from unfair dismissal, and that her dismissal was harsh, unjust and unreasonable, it is necessary to consider what, if any, remedy should be granted to her.
[57] Ms Price seeks the remedy of compensation. She contends that reinstatement would be inappropriate because she does not have any trust or confidence in Fairhill Farm. Having regard to the very small nature of Fairhill Farm’s business, the events which led up to and resulted in the termination of her employment (as set out above), and the fact that I observed Ms Price during the proceedings to be upset and uncomfortable in Ms O’Donnell’s presence, I am satisfied reinstatement is inappropriate in this case.
[58] A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. 16
[59] Having regard to the fact that Ms Price has suffered financial loss and unemployment as a result of her unfair dismissal, I consider that an order for payment of compensation to her is appropriate in all the circumstances of this case.
[60] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Ms Price. In assessing compensation, I am required by section 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection. In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was reasonably recently elaborated upon in the context of the current Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden). 17
Remuneration Ms Price would have received, or would have been likely to receive, if she had not been dismissed (s.392(2)(c))
[61] Ms Price gave evidence that she believes she would have been employed for about 1.5 years by Fairhill Farm if she had not been dismissed on 19 January 2016. In relation to this point, Ms Price gave the evidence set out in paragraph [38] above, which I accept, as to her intention to remain employed at Fairhill Farm for the long term.
[62] Ms O’Donnell gave evidence, which I accept, that she considered Ms Price to be part of the “team” at Fairhill Farm and that she envisaged Ms Price staying on as a long term employee at Fairhill Farm. Ms O’Donnell is confident that she could have “sorted out” her concerns about what she perceived to be Ms Price’s lack of enthusiasm since she returned to work from holidays in about mid 2015, if she had met with Ms Price in January 2016 to discuss those matters. Ms O’Donnell believes that Ms Price may have become a bit bored by her duties and was willing to talk to Ms Price about taking on a new role as Farm Manager or some additional duties or responsibilities. Unfortunately those discussions did not take place as a consequence of the way in which each of Ms O’Donnell and Ms Price construed the text and email messages exchanged between the two of them in the period from 17 to 19 January 2016. In particular, Ms O’Donnell took a very negative view of both the fact that Ms Price was not available to meet her on the afternoon of Sunday, 17 January 2016 and the tone and content of Ms Price’s subsequent text messages and email.
[63] In all the circumstances, I estimate that Ms Price would have remained in employment with Fairhill Farm for a period of 18 months but for the termination of her employment on 19 January 2016.
[64] In calculating the remuneration Ms Price would have earned had she not been dismissed, it is necessary to identify what her rate of payment would have been. There was no challenge to the evidence given by Ms Price that her average gross weekly earnings as a regular casual employee with Fairhill Farm were $889.60 per week ($22.24 x 40 hours = $889.60).
[65] Ms Price would therefore have received $69,388.80 in gross remuneration had she not been dismissed (78 weeks (18 months) x $889.60 = $69,388.80).
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[66] Since the termination of her employment, Ms Price has had the benefit of $1,380 in income protection insurance payments. These payments have been made by her insurer to repay her car loan and personal loan in the period from 19 January 2016 until 18 March 2016 (when she obtained alternative employment). It is appropriate to take these payments into account when assessing compensation under s.392 of the Act. 18
[67] In the period from 14 March 2016 until 15 May 2016, evidence in the form of payslips show that Ms Price earned $3,384.17 in gross income from her alternative employment as a casual traffic controller with Openshore Traffic. This is an average of $376.02 gross income per week. No payslips or other evidence was available in relation to Ms Price’s earnings from 16 May 2016 until the date of the determinative conference (23 May 2016).
[68] Ms Price has not received any other remuneration since the termination of her employment with Fairhill Farm.
[69] In my view, it is reasonably likely that, in the period from 24 May 2016 until the end of the 18 month period (19 July 2017), Ms Price will continue to earn, on average, about $376.02 gross per week in her role as a regular casual employee with Openshore Traffic. It is possible Ms Price will secure other alternative employment, or more hours of work with Openshore Traffic, prior to the end of the 18 month period, but I will take this factor into account when assessing whether to apply a discount for contingencies.
[70] I will separate the calculation into the following periods of time:
(a) 20 January 2016 until 15 May 2016 (the end of the period for which there is evidence to establish Ms Price’s actual, as distinct from likely future, loss); and
(b) 16 May 2016 until 19 July 2017 (end of the 18 month anticipated period of employment).
[71] The calculation at this point is as follows:
(a) In respect of the period from 20 January 2016 until 15 May 2016:
(i) $15,568 (gross remuneration Ms Price would likely have earned had she not been dismissed by Fairhill Farm and instead continued to be employed by Fairhill Farm until 15 May 2016 (17.5 weeks x $889.60 = $15,568)
(ii) Less $1,380 in income protection insurance benefits
(iii) Less $3,384.17 in gross income from Openshore Traffic from 14 March 2016 until 15 May 2016
(iv) Subtotal = $10,803.83
(b) In respect of the period from 16 May 2016 until 19 July 2017:
(i) $53,820.80 (gross remuneration Ms Price would likely have earned had she not been dismissed by Fairhill Farm and instead continued to be employed by Fairhill Farm from 16 May 2016 until 19 July 2017 (60.5 weeks x $889.60 = $53,820.80)
(ii) Less $22,749.21 in likely gross income from 16 May 2016 until 19 July 2017 (60.5 weeks x $376.02 = $22,749.21)
(iii) Subtotal = $31,071.59
(c) Total for whole period = $41,875.42 ($10,803.83 + $31,071.59 = $41,875.42)
[72] This calculation is intended to put Ms Price in the position she would have been in but for the termination of her employment. 19
Other matters (s.392(2)(g))
[73] It is necessary to consider whether to discount the remaining amount for "contingencies". This step is a means of taking into account the possibility that the occurrence of contingencies to which the applicant was subject might have brought about some change in earning capacity or earnings. 20 Positive considerations which might have resulted in advancement and increased earnings are also taken into account.
[74] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision. 21
[75] In my view, it is appropriate in the circumstances of this case to apply a 60% discount for contingencies. I have had regard to the following factors in assessing the 60% discount rate:
(a) Ms Price is motivated to find full time alternative employment. She has a good history of working full time hours. In my view, there is a reasonably good prospect that, in the period from the date of this decision until 19 July 2017, Ms Price will be able to earn more remuneration from either Openshore Traffic or an alternative employer than an average weekly amount of $376.02 (which I have estimated based on her earnings to date with Openshore Traffic). There is, of course, the prospect that Ms Price could become unemployed, or earn less than $376.02 per week, for some or all of the period prior to 19 July 2017, but in my view that is less likely than the chance of her earning more than an average of $376.02 per week during that period;
(b) Because Ms Price was employed by Fairhill Farm on a casual basis, there is the risk that during the anticipated period of employment she could have been dismissed or given less work than had traditionally been the case during her employment with Fairhill Farm. Although Ms O’Donnell gave evidence, which I accept, that she envisaged Ms Price remaining in employment with Fairhill Farm in the long run, Ms O’Donnell is considering employing a Farm Manager and if such a person is employed, there is the risk that either less work will be available for the casual employees generally or the new Farm Manager may want to employ some new employees;
(c) There is the risk that Ms Price could have suffered a loss of income during the anticipated period of employment with Fairhill Farm by reason of sickness, accident, death, holidays taken by her (for which she would not be paid as a casual employee) or resignation;
(d) There is the possibility that Ms Price could have been employed by Fairhill Farm as the Farm Manager, or in another more senior position, if she had not been dismissed on 19 January 2016. This is a positive consideration which might have resulted in increased earnings for Ms Price during the anticipated period of employment;
(e) Some allowance should be made for the fact that the moneys are to be received as a lump sum; and
(f) The anticipated period of employment in this case is reasonably lengthy (ie until 19 July 2017). A long anticipated period of employment justifies a higher percentage discount for contingencies. 22
[76] Once a 60% deduction rate is applied to the prospective period, the figure for the period from 16 May 2016 until 19 July 2017 becomes $12,428.64 ($31,071.59 x 0.4 = $12,428.64), and the new total is $23,232.47 ($10,803.83 + $12,428.64 = $23,232.47).
[77] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination.
Viability (s.392(2)(a))
[78] There was no evidence that any particular amount of compensation would affect the viability of Fairhill Farm’s business. No adjustment will be made on this account.
Length of service (s.392(2)(b)
[79] I consider that Ms Price’s relatively moderate period of service with the Respondent (about 3.5 years) does not in all the circumstances justify any increase or reduction to the amount of compensation otherwise payable.
Mitigation efforts (s.392(2)(d))
[80] Ms Price has made significant efforts to mitigate her loss. Following the initial two week period after 19 January 2016, during which time Ms Price was waiting to see whether she would receive any further communication from Fairhill Farm, she applied for a number of alternative jobs. Eventually Ms Price had to pay $500 to undertake training in order to have a chance to secure a job as a casual traffic control worker. Notwithstanding her ongoing efforts to find work, the casual traffic control position is the only job Ms Price has been able to obtain since her dismissal. I will make no adjustment on this score.
Misconduct (s.392(3))
[81] Based on the findings I have made in this matter, Ms Price did not commit any misconduct, so this has no relevance of the assessment of compensation.
Shock, Distress (s.392(4))
[82] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation cap (s.392(5)&(6))
[83] Fairhill Farm’s Employer Response to Unfair Dismissal Application stated that Ms Price’s wage or salary at the time of her dismissal was $22.24 per hour. Ms Price agreed with this figure. Ms Price gave unchallenged evidence that her hourly rate of pay had been increased in December 2015 because she was being paid less than the relevant modern award rate and Ms O’Donnell had increased the pay rate for all staff to the minimum award rate upon the employment of a new staff member. Ms Price also gave unchallenged evidence that she worked an average of 40 hours per week for Fairhill Farm. In those circumstances, I am satisfied that the compensation cap under s.392(5) of the Act for Ms Price is $23,129.60 (26 x $22.24/hour (the rate to which Ms Price was entitled during the 26 weeks prior to her dismissal) x 40 hours = $23,129.60).
[84] The amount of $23,232.47 is greater than the compensation cap ($23,129.60), with the result that the amount to be ordered must be reduced to the compensation cap of $23,129.60.
Instalments (s.393)
[85] There was no submission that any compensation amount should be payable by instalments, and I do not consider that payment by instalments is warranted.
Conclusion on remedy
[86] In my view, the application of the Sprigg formula does not, in this case, yield an amount which appears either clearly excessive or clearly inadequate. Accordingly, there is no basis for me to reassess the assumptions made in reaching the amount of $23,129.60. 23
[87] For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $23,129.60 in favour of Ms Price is appropriate in the circumstances of this case.
[88] An order [PR508941] will be issued with this decision.
COMMISSIONER
Appearances:
Ms C Price on her own behalf;
Ms D O’Donnell on behalf of the Respondent.
Hearing details:
2016.
Newcastle:
May, 23.
1 [2011] FWAFB 3769
2 [2014] FWCFB 8451 at [15]
3 (1995) 185 CLR 410 at 465
4 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.
5 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
6 Ibid
7 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685
8 Ibid.
9 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].
10 Ibid
11 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]
12 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151
13 Previsic v Australian Quarantine Inspection Services Print Q3730
14 RMIT v Asher (2010) 194 IR 1 at 14-15
15 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].
16 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]
17 [2013] FWCFB 431
18 Jeffrey v IBM Australia Limited[2015] FWCFB 4171 at [28]
19 Bowden at [24], citing Ellawala v Australian Postal Corporation Print S5109 at [35]
20 Ellawala v Australian Postal Corporation Print S5109 at [36]
21 Enhance Systems Pty Ltd v Cox PR910779 at [39]
22 Enhance Systems Pty Ltd v Cox PR910779 at [40]
23 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32].
Printed by authority of the Commonwealth Government Printer
<Price code C, PR580642>
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