Ms Danielle Cameron v Wunderdogs Pty Ltd T/A Wunderdogs

[2017] FWC 1364

[2017] FWC 1364

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Danielle Cameron
v
Wunderdogs Pty Ltd T/A Wunderdogs
(U2016/11709)

COMMISSIONER SPENCER BRISBANE, 8 MARCH 2017

Application for relief from unfair dismissal.

Application for relief from unfair dismissal, conflict of interest in employment, Noosa dog day care providers, alleged theft of intellectual property, conflict of interest, commercial impact on business goodwill, lack of referrals to other dog care providers due to conduct.

Introduction

[1] This decision relates to an application made by Ms Danielle Cameron (the Applicant/the Employee) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy, alleging that the termination of her employment from Wunderdogs Pty Ltd T/A Wunderdogs (the Respondent/ the Employer) was harsh, unjust or unreasonable. The Respondent in this matter raised a jurisdictional objection to the application, alleging that the Respondent was a “small business” (as defined under the Act) and the dismissal was consistent with the Small Business Fair Dismissal Code. The issues for determination are: whether the dismissal was consistent with the Code and whether the dismissal was harsh, unjust or unreasonable. The Applicant was an Employee of the Respondent but also operated ‘Poss’s Pooches’, a dog care provider. The Applicant was primarily dismissed for promoting her own business during her employment with the Respondent.

[2] The business is owned and operated by the Directors, Mr Ah Chee and Ms Rowland. The business provides day care for dogs and has a large catchment area surrounding Noosa for its customers, with client’s often coming from Sydney. Ms Rowland is a dog behaviourist and does a lot of training with dogs that have bad habits. They submit they are specialists and were dedicated to the development of their business, that has been operating for 6 years.

[3] A conciliation conference was held. The matter was not resolved. Directions were set for the filing of submissions and evidence.

[4] The Applicant was granted permission (pursuant to s.596) for legal representation, and was represented, with permission, by Mr Heffernan, Advocate, of Fair Work Claims. It was considered that given the matter had jurisdictional issues and the assessment of a conflict of interest between employment and commercial operations the potential for complexity warranted the representation pursuant to s 596(2)(a) and (b). The Respondent was represented by Mr Martin, clinical psychologist, together with Ms Melanie Rowland and Mr Stephen Ah Chee, Directors of the Respondent. Taking into account there were some novel aspects of the dismissal reasons and the jurisdictional objection, the Applicant was granted permission but Mr Heffernan undertook the representation consistent with a determinative conference.

[5] The determinative conference was recorded and the Parties agreed any additional information offered by the Applicant and the Respondent at this determinative conference could be taken into consideration. Predominantly, the material provided further confirmation of matters before the Commission, and the Parties confirmed at the conclusion of the conference they had placed all relevant information before the Commission.

[6] Whilst not all of the evidence and submissions are referred to, in this matter, all of such have been considered in making the decision. The matter was heard by determinative conference at the Noosa Courthouse on 10 February 2017.

Background

[7] The Applicant alleged that her employment was terminated unfairly on 21 September 2016.

[8] The Respondent operates a dog day care business in Noosa. A feature of the business was that dogs were often appointed as prefects etc. The Applicant was employed by the Respondent as a “Pack Leader”, carer for the dogs, as a casual, on a regular and systematic basis, with an on-going expectation of continuing work since 25 May 2015. The Applicant’s employment was terminated on 21 September 2016.

[9] On 16 September 2016, the Applicant was provided with a letter from the Respondent which was titled “Employment Update Review”. This document represented a warning and contained a number of points in relation to the Applicant’s conduct at work, in particular, use of a mobile phone at work, client contact about dogs’ behaviour and the Applicant’s interaction with the dogs which was outside the Respondent’s policies and manual. In addition, the Respondent stated there was to be no self-promotion of the Applicant’s own dog sitting business.

[10] The Respondent stated a further meeting was held with the Applicant on the morning of 21 September 2016 in relation to this letter. During the meeting, the conduct of the Applicant was discussed. At the end of the meeting, the Applicant was informed her employment was terminated as a result of her conduct.

[11] The Applicant was handed a termination letter, included below. The termination letter provided the reasons for the dismissal, being a result of serious misconduct on the part of the Applicant. The conduct was in relation to the Applicant’s alleged conflict of interest, between her employment with the Respondent and the promotion of the Applicant’s own business, ‘Poss’s Pooches’. The Respondent reasoned that by capitalising on the Respondent’s client base (during the course of working for the Respondent), the Applicant caused a loss of business for the Respondent, referrals to their other dog care providers and created irreparable client damage.

21 September 2016

Dear Danielle (Poss) Cameron,

Termination of employment at Wunderdogs Doggie Daycare Pty Ltd

Your own business interests of “Poss’s Pooches” has become a serious conflict of interest with your employment at Wunderdogs Doggie Daycare causing the company negative interaction with it’s own clients.

Your actions of building your own business whilst in the paid employment of Wunderdogs Doggie Daycare is irreproachable and sadly we cannot have employees negatively impacting the business.

Your own alliances with wunderdogs clients in creating and growing Poss’s Pooches by capitalising on Wunderdogs’ Client base during the course of paid work is deemed to have become serious mis-conduct. Your interaction with them both outside of and at Wunderdogs has had a profoundly negative affect on the service and reputation of Wunderdogs Doggie Daycare, causing loss of business to Wunderdogs and creating un-reparable client damage.

As a result of your actions, your employment at Wunderdogs is terminated effective immediately.

We remind you that you have signed a legally binding Deed of Non-Disclosure on 08/07/15 regarding all aspects of your employment at Wunderdogs.

We wish you all the best in your future endeavours.

Regards

Melanie Rowland Stephen Ah Chee
Director Director

[12] The Applicant stated she was not afforded procedural fairness or an adequate opportunity to respond to the Respondent’s issues. In addition, the Applicant alleged the Respondents had already made up their mind to terminate the Applicant’s employment prior to the meeting, and she had been provided with a pre-prepared termination letter. The Applicant contended her termination was harsh, unjust and unfair.

[13] The Respondent objected to the allegations that the dismissal was procedurally unfair, and submitted the Applicant’s employment was terminated in accordance with the Small Business Fair Dismissal Code and the Respondent was a Small Business Employer within the meaning of the Act.

Legislation

[14] The substantive application was made pursuant to s.394 of the Act, which provides as follows:

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)...

[15] Prior to considering the merits of the matter the Commission, must decide those matters prescribed by s.396 of the Act as follows:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[16] The relevant provisions of the Fair Work Act 2009 (the Act) and the Code, as they stood at the time the Applicant was dismissed, are set out for convenience.

[17] Section 385 stated:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[18] Relevant to the issues for determination, s.388 outlines compliance with the Code:

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.

[19] Section 23 of the Act provides the definition of a Small Business Employer, 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.

[20] On 1 July 2009 the Code, as issued by the Minister for Employment and Workplace Relations on 24 June 2009, came into effect. The Code is as follows:

“Small Business Fair Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

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] Relevant to the issues for determination, s.387 contains the criteria for considering whether a dismissal was harsh, unjust or unreasonable:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.

[22] Regulation 1.07 of the Fair Work Regulations 2009 provides the definition of serious misconduct, as follows:

1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.

[23] A person is protected from unfair dismissal, at a time, if that person satisfies those matters prescribed by s.382 of the Act, as follows:

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

[24] There is no dispute between the Parties that the Applicant had completed the minimum employment period and was not a high income Employee, and was protected by the unfair dismissal jurisdiction as she had been employed on a regular and systematic basis with an expectation of ongoing employment.

Summary of the Respondents Submissions and Evidence

[25] The Respondent submitted their operation falls within the definition of a ‘small business’ and that the dismissal complied with the Small Business Fair Dismissal Code 1.

[26] The Respondent submitted at the time of the Applicant’s dismissal, the Respondent employed: the Applicant; another casual Employee; and the two Directors, Ms Rowland and Mr Ah Chee, which totalled four Employees 2.

[27] The Respondent submitted the Applicant was summarily dismissed for a conflict of interest in promoting her business to the detriment of the Respondent and for theft of the Respondent’s intellectual property, by allegedly exporting the Respondent’s client list from their computer, which amounted to serious misconduct 3.

[28] The Respondent submitted between 31 August 2016 and 16 September 2016, when Mr Ah Chee, the Director of the Respondent was away on annual leave overseas, the Respondent, (Ms Rowland), became aware that the Applicant was promoting her own business ‘Poss’s Pooches’ during business hours, contrary to the agreed terms, the Respondent had with the Applicant. The Applicant’s business, ‘Poss’s Pooches’ was also a dog minding business, however provided overnight care rather day care, which was provided primarily by the Respondent. It was alleged that the Applicant was directly handing her business cards to their clients unsolicited, as they arrived with their dogs to the day care.

[29] Ms Rowland and Mr Ah Chee in a joint Statement set out that, on 13 July 2016, the Applicant and Ms Rowland and Mr Ah Chee, verbally agreed upon a number of terms, regarding the operation of the Applicant’s business (Poss’s Pooches). Ms Rowland and Mr Ah Chee stated that via these terms, the Applicant must only hand out her ‘Poss’s Pooches’ business card if a client of the Respondent approached the Applicant seeking pet care. The Applicant, must together with her card, also hand out the business cards of two other existing carer’s that the Respondent refers to as being “Floss’s Homestay” and “Coast Dog Sitting”. The Applicant denied she had ever been advised of this policy.

[30] Ms Worburton, a former Employee, affirmed in evidence that if anyone had inquired for overnight or holiday care, the Employees would hand out the provider’s cards as they had been told by the Directors. 4

[31] The Respondent stated in contravention of this direction, the Applicant had approached their clients and handed out only her business cards. The Respondent submitted clients had contacted them to advise the inappropriateness of the Applicant’s behaviour in handing out her own business’ cards 5. In addition, the Respondent provided the owner of another dog minding business the Respondent also referred clients to, known as ‘Coast Dog Sitting’, had raised concerns with the Respondent as to why they had not received any referrals from the Respondent6. Ms Genevieve Barker, owner of Coast Dog Sitting set out, in her Statement, that she noticed a lack of referrals from the Respondent, between the period July 2016 to September 2016, and she asked the Respondent if they were still referring her services to their clients7. The Respondent was concerned, that given they operated on reciprocal referrals that their business goodwill was being affected.

[32] The Respondent submitted after receiving the client feedback and the queries from the other dog care provider, they further investigated the Applicant’s alleged deceptive behaviour by counting the business cards of the Applicant and the other carer’s businesses the Respondent referred their clients to. They stated their clear direction to the Applicant had been that if approached for overnight dog care, the Applicant was to hand out her card and the other cards of the two providers they referred to. The Applicant denied she had received this direction. In addition, after speaking to their clients, they received verbal confirmation of the inappropriate behaviour of the Applicant that the Applicant was not adhering to their policy. 8 The Respondent submitted WitnessStatements in support of this.

[33] The Respondent relied upon the Statements of Ms Penny Miller, owner of Floss’ Homestay. Ms Miller stated during the months preceding the Applicant’s termination, she was no longer receiving any referrals, which had a financial impact on her business 9. In addition, the Statement of Mr Ernie Wotton stated he was handed a bundle of Poss’s Pooches dog sitter business cards by the Applicant, when Mr Wotton was bringing in his German Shepherd for care to the Respondent, and was asked by the Applicant to distribute her business cards to his own clients and friends10. Ms Angela Kraushaar also provided a Statement of evidence that the Applicant had stated to her she was a dog sitter and if Ms Kraushaar needed someone to look after her dog, Bella, she was available and she was given three business cards of the Applicant’s business11.

[34] The Respondent also submitted that following the Applicant’s dismissal, the Respondent received further written confirmation from clients of the Respondent, of the Applicant’s ‘activities’, 12 of promoting her business, whilst employed.

[35] The Respondent submitted the Applicant was notified of the reasons prior to her dismissal. They stated the Applicant was given an ‘employment update review letter’ on 16 September 2016. In addition, between the period of 31 August 2016 to 16 September 2016, the Applicant and the Respondent had numerous verbal discussions regarding the performance of the Applicant, which the Respondent stated were ‘blatantly ignored’ 13.

[36] The Respondent stated that on 16 September 2016, an informal meeting was held with the Applicant at the close of business, to discuss critical points of the Applicant’s behaviour and attitude. The Respondent submitted the Applicant responded she was actively seeking alternative employment and was dismissive of the Respondent’s allegations. The Respondent submitted the Applicant’s comments and promotion of her own business using the Respondent’s clients were contrary to the agreed terms and processes she was to adopt at work with her business. The Respondent stated this conduct destroyed their trust in the Applicant; and damaged the employment relationship beyond repair 14. The Directors emphasised they had built their business over 6 years and were dedicated to their customers, their business alliances and to its standards.

[37] The Respondent submitted the Applicant was aware of the reasons of why her employment was being terminated and considered they had followed the Small Business Dismissal Code. In addition to this they emphasised, they were a small business owner, with minimal expertise in industrial relations. The Respondent complained that this matter had received some prominence in the Noosa community and this had concerned them regarding their business reputation. Mr Ah Chee had been on leave at the time of the warning. Upon his return, the Directors discussed the matter and on further consideration of other client feedback, they concluded they could not continue the employment relationship. The Respondent submitted that at 7:00am on 21 September 2016, the Applicant and Ms Rowland and Mr Ah Chee of the Respondent had a meeting. During the meeting, the Respondent submitted that an “open and frank discussion was held between both Parties”. In particular, Ms Rowland and Mr Ah Chee discussed with the Applicant their discovery of her actions; of capitalising on the Respondent’s clients in order to build her own business ‘Poss’s Pooches’, during paid employment with the Respondent. They stated this was against the agreed employment terms, and this was a conflict of interest; an act of ‘theft of intellectual property’ 15.

[38] The Respondent submitted the conflict of interest was apparent when an incident occurred where the Applicant was caring for Ms Mally Jane’s dog ‘Teddy’, (a “staffie”) who had a regular weekly booking at the Respondent’s business. The Respondent indicated to the Applicant at approximately 9:00am that morning by text, that the bookings were down for the day, therefore the Applicant was not required to attend her shift commencing at 1:00pm. The Applicant had looked after Teddy in the morning, whilst Ms Jane was to leave on a trip. It had been organised by Ms Jane that the Applicant would take the dog to ‘Wunderdogs’ for his booking when she went to work. However when the Applicant was not required to work, she did not take Teddy to his regular day care booking and the Applicant cared for him herself. This incident led to a complete loss of trust in the Applicant and made the employment relationship irreparable. The Respondent stated that the Applicant did not offer any explanation as to her conduct or deny the conduct 16. The Respondent submitted that the Applicant’s employment was also terminated, as a result of her actions of theft, which was classed as serious misconduct17, whereby they alleged their client list had been “exported” from the computer.

[39] Ms Jane sent the below email to the Respondents:

From: Mally Jane
Sent: Monday, 19 September 2016
To: [email protected]
Subject: Website enquiry

Hi Steven and Mel,

I’ve reflected on our meeting today and have a word or two to add. To run a good business one must treat both the client and the staff with respect, particularly when arrangements are changed at short notice. There have obviously been a few misunderstandings between us regarding my being a no-show and Poss not working on the Monday afternoon. It would be helpful if you would both accept that I was caught off guard re the Monday work arrangements. I really don’t mind paying for the Wednesday.

Kind regards
Mally Jane

[40] Ms Jane upon learning the Applicant had been dismissed provided a Statement in support of the Applicant. This incident had some implications for all Parties, as Ms Jane’s dog, Teddy (a prefect), as a result of her intervention, was expelled without notice by the Respondents from the day care.

[41] Ms Rowland and Mr Ah Chee stated in their joint Statement that the Applicant “was stealing customers with the intention of gaining their business on a frequent enough basis to build an income stream of her own. She ceased putting the interests of wunderdogs first when she started promoting her own business on her own terms whilst in paid employment at wunderdogs” 18. She had previously stated to them ‘Poss’s Pooches’ is going to become famous.

[42] The Respondent submitted that at the conclusion of the meeting, the Applicant was handed a pre-prepared letter of dismissal, terminating the Applicant’s employment, effective immediately.

[43] In response to allegations that the dismissal was procedurally unfair the Respondent stated that they had conducted the termination in accordance with the Small Business Dismissal Code. They did not provide any submissions in relation to the Applicant not having a support person.

Summary of Applicant’s Submissions and Evidence

[44] The Applicant submitted the Respondent could not have held the belief, at the time of dismissal, that the alleged ‘theft of intellectual property’ was so serious as to justify summary dismissal. 19

[45] The Applicant submitted the ‘conflict of interest’ and the varying reasons given for dismissal cannot have been reasonably held by the Respondent as being sufficient to justify summary dismissal. 20 The Applicant further submitted the reasons of the alleged ‘conflict of interest’ and her conduct ‘negatively impacting on the business’ referred to by the Respondent, involved a misunderstanding or miscommunication between the Parties.

[46] The Applicant submitted a client of the Respondent, Ms Jane, stated in an email to the Respondent:

“There have obviously been a few misunderstandings between us regarding my being a no-show and Poss not working on the Monday afternoon. It would be helpful if you would both accept that I was caught off guard re the Monday work arrangements. I really don’t mind paying for the Wednesday.” 21

[47] The Applicant submitted it is apparent from this email that any damage that may have occurred between the Respondent and Ms Jane was not irreparable, and the offer by the client to pay for the Wednesday demonstrated there was also no financial loss occasioned by the Respondent. 22

[48] Ms Jane, client of the business, said she had come to know the Applicant when she had asked Ms Rowland for overnight care for her dog ‘Teddy’. Ms Rowland referred her to the Applicant for overnight care. Ms Jane said the Applicant would come to her home to care for her dog.

[49] Further, the Applicant relied on the document identified as ‘Hand delivered letter from Client – Mally Jane’ date 19-25 September, as evidence that there was no loss to the business. The letter stated:

“… I hope we can return to our usual (happy) relationship with no hard feelings about our recent differences. I have certainly put the matter behind me, my only regret being that it may have been the catalyst for Poss’s dismissal.”

[50] The Applicant submitted whilst this information became apparent after the dismissal of the Applicant, the contents of this letter coupled with the pre-termination email correspondence from Ms Jane indicated that, contrary to the assertion of the Respondent, the actions of the Applicant did not cause any damage to the Respondent’s business. 23

[51] In response to the Respondent’s allegation that the Applicant downloaded the Respondent’s client list, the Applicant submitted the Respondent cannot maintain it reasonably held the belief that she had engaged in theft of intellectual property at the time of dismissal, as the assertions of theft of intellectual property made by the Respondent, were made subsequent to the dismissal of the Applicant. 24

[52] The Applicant submitted the Small Business Fair Dismissal Code requires an inquiry into the state of mind of the Respondent at the time of dismissal. The Applicant also submitted that it is not open to the Respondent to rely on after-acquired knowledge to satisfy the requirements of the code. However, the Applicant conceded that these may be relevant to the question of valid reason for the dismissal, with respect to the merits of the case. 25

[53] The Applicant submitted the ‘Summary Dismissals’ provisions of the Code were not complied with, as any belief as to whether the conduct of the Applicant justified summary dismissal could not have been reasonably held. 26

Valid reason for dismissal – s 387(a)

Conflict of Interest

[54] The Applicant disputed the existence of any conflict of interest between the Respondent’s business and the business operated by the Applicant that gave rise to a valid reason for dismissal. 27 The Respondent’s business operates a ‘dog day care’ business and does not provide overnight care for animals.

[55] The Applicant accepted she engaged in conduct during the course of her employment with the Respondent, from which she was able to derive a pecuniary benefit through her own business, but she stated not at the expense of the Respondent.

[56] Notwithstanding this, the Applicant submitted the existence of the alleged conflict of interest does not give a rise to a valid reason for dismissal for the following reasons: the Respondent agreed and condoned the Applicant promoting her own business to clients of the Respondent; the Respondent was aware of the Applicant’s actions in promoting her own business to clients of the Respondent prior to the decision to dismiss the Applicant from her employment; and five days prior to the decision by the Respondent to dismiss the Applicant from her employment, the Respondent had elected that this conduct was to be addressed by way of a formal warning rather than dismissal.

[57] The Applicant submitted the alleged negative interaction with clients arose out of a series of misunderstandings and miscommunications between the Applicant, the Respondent, and the relevant client as to how these competing interests were to be managed. Further, the Applicant submitted that any negative interactions were in fact of the Respondent’s own making and not the Applicant’s.

[58] The alleged conflict of interest conduct, in which it is alleged against the Applicant, related to the manner in which the suggested competing interests between her own business and the business of the Respondent were not being respected. That is, the Respondent required the Applicant to provide the information to clients as well of the businesses the Respondent referred to that were similar to the Applicant’s own (with which the Respondent also had a referral relationship) and not only provide the information for her own business when approached. 28

[59] The Applicant submitted, by the Respondent conducting a meeting and providing a formal written warning on 16 September 2016 to address the conduct of the Applicant, the Respondent had waived its right to rely on this as a reason for dismissal. Further, the Applicant submitted, by the Respondent taking this course of action in respect of the alleged conflict of interest, the Respondent had already determined that the conflict of interest was insufficient to justify dismissal. 29

Loss of Business

[60] The Applicant submitted there was no loss of business arising out of her conduct with respect to the alleged conflict of interest. The care of clients was provided by the Applicant at separate operational times to that of the Respondent’s business.

[61] The Applicant stated that this was supported by the Respondent’s own evidence of the relationship between itself and client Ms Jane, in that Ms Jane as per the email she sent dated 19 September 2016. 30

Theft of Intellectual Activity

[62] The Applicant submitted the allegation of theft of intellectual property from the Respondent, only arose in submissions filed with the Commission 4 January 2017, and does not appear in either the letter of termination or the F3 filed in this matter.

[63] The Applicant further submitted, having regard to the material submitted by the Respondent, the Applicant noted the Respondent has not identified how any action of the Applicant constituted theft of the Respondent’s intellectual property; the Respondent has not identified what intellectual property is alleged to have been stolen; and the circumstances where it is possible that such theft may have occurred. The Applicant stated that the Respondent has not made submissions nor tendered evidence to clearly demonstrate the involvement of the Applicant in this.

Valid Reason for the Dismissal Existed on the Information Available to the Respondent at the time of Termination

[64] The Applicant submitted the reason given for the dismissal was not sound, defensible or well-founded but was rather capricious, fanciful, spiteful or prejudiced.

[65] The Applicant submitted if there was a conflict of interest between the businesses it was known, endorsed and condoned by the Respondent, and any negative interactions between the Respondent and its clients as a result of this, was substantially of the Respondent’s own making, and the Respondent has not led any clear evidence of or made any submissions in relation to theft of intellectual property.

[66] The Respondent submitted the decision to dismiss the Applicant was partly formed by the statement of the Applicant that she was actively seeking other employment. The Applicant submitted in reply, it was common ground between the Parties that the Applicant was a casual Employee and it is an inherent aspect of casual employment that the Employee does not owe exclusivity of service to any particular Employer outside their hours of work.

[67] The Applicant submitted she had informed the Respondent that any such other employment would be supplementary to, not instead of, her employment with the Respondent.

Acquired Knowledge

[68] The Applicant submitted that the evidence led by the Respondent in relation to after-acquired knowledge, in particular the ‘Mail Chimp’ Email Client Database export notification, is insufficient to give rise to a valid reason for dismissal.

[69] In particular, the Applicant submitted that the Respondent had not led any evidence of attribution of this export to the Applicant; the Respondent has not definitively classified this export as ‘theft’; and the Respondent has not led any evidence to show that information which could reasonably have been expected to be obtained as a result of this export, was used by the Applicant.

[70] The Applicant submitted the reasons for dismissal were unjust in that, with respect to the theft of intellectual property, the Applicant was not guilty of the conduct alleged and it was unreasonable in that, with respect to the conflict of interest, this conduct was condoned by the Respondent and was already determined to not be sufficient as to warrant dismissal, as it had been dealt with by means of warning.

Whether Applicant was notified of the reason for dismissal – s 387(b) – and given an opportunity to respond – s 387(c)

[71] The Applicant submitted that the Respondent had placed reliance on the Employment Update Review Letter dated 16 September 2016, as the means by which the Respondent had informed the Applicant of the reasons for her dismissal. The Applicant submitted that the Employment Update Review Letter does not at any point state that the Applicant was at risk of being dismissed from her employment, rather the letter was to serve as a formal warning.

[72] The Applicant submitted the fact that a pre-prepared letter of termination, by the Respondent, was available at the meeting of 21 September 2016 is irrefutable evidence that the decision to terminate the Applicant’s employment was made before the Applicant, was given an opportunity to respond to the reasons for dismissal. 31

[73] The Applicant submitted she was not given a true and meaningful opportunity to respond to the reasons for dismissal, and to that extent the Applicant was afforded neither procedural fairness nor natural justice.

Consideration

[74] This is a novel area of employment relations, where what is alleged is a conflict of commercial operations by a casual Employee, who also operates her own similar business. The Applicant’s business may be seen to be symbiotic in operations – both operating to the same clients but providing dog care, ostensibly at night, the other during the day. The Respondent however, was in doubt of the Applicant’s plan only to undertake pet care at night. They considered that she was undermining their business and acting in competition with the Respondent. The Respondent considered their business was vulnerable, given the Applicant was providing the care for Respondent’s clients during the day and as a result of her duties was able to monopolise on this.

[75] The two issues to consider, in relation to the evidence and submissions provided, are: whether the dismissal was harsh, unjust or unreasonable (s.385(b) of the Act); and, not inconsistent with the Small Business Fair Dismissal Code (s.385(c) of the Act).

[76] In considering whether the Commission is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account each of the matters in s.387 of the Act, as set out earlier.

[77] The Respondent was opposed to the provision of reinstatement and to compensation, on the basis that due to the conduct of the Applicant it would be inappropriate.

[78] It is recognised that the Respondent’s considered they were protected from unfair dismissal by complying with the Small Business Unfair Dismissal Code. However in this matter, the Applicant was not provided detailed accounts of the incidents which lead to her termination of employment, she was given a warning, but with little opportunity to remedy the matter, which was complained of by the Applicant’s representative. In this matter whilst the conduct of marketing to their customers unsolicited, present a valid reason, there was no direct evidence of financial loss or theft.

[79] There was evidence of a lack of referrals affecting the Respondent’s business goodwill, and from their point of view a breach of the procedure in how the Applicant was to market her business, whilst an Employee. From the Respondent’s perspective, to allow the Applicant to continue, would be to consent to further damage being caused to their business and causing their customers to be disgruntled by being confronted with the Applicant’s cards when dropping off their dogs. The evidence of the incident with Ms Jane demonstrated the conflict of interest. However Ms Jane should not be in any way held accountable for the events and as an aside, it is disappointing that Teddy was expelled as a result. There was no substantiated evidence to confirm the Applicant had exported the client list from the computer. The Respondent’s conceded the limitation on this evidence but again considered the circumstantial evidence, that left them vulnerable, in maintaining the Applicant's employment.

Was the Respondent a Small Business Employer?

[80] Section 23 of the Act defines a small business Employer at a ‘particular time’. The particular time that is relevant to this determination, is the time immediately before the time of the dismissal or at the time the Applicant was given notice of the dismissal. The Respondent provided that it employed four Employees, including the Applicant. The Applicant did not dispute this.

[81] The Respondent based on its Employees is a small business Employer within the meaning of the Act. Accordingly, the application has been considered against the Code and the criteria in s.387 of the Act.

Has the Respondent complied with the small business fair dismissal code

[82] The Applicant was denied any opportunity to be heard on the Respondent’s intentions to dismiss her before this decision was final, as before the meeting occurred the letter of termination had been written. The Applicant had been subject to a prior warning. The Code does not provide an absolute protection; but there has been an endeavour to comply.

Criteria for Harshness

(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

[83] Having considered the evidence in relation to whether there was a valid reason, and the definition of Serious Misconduct in Regulation 1.07, it is clear that the reason for dismissal posed a serious and potential risk to the business. Whilst the conflict of interest between their business provided a valid reason for dismissal, the conduct however is not commensurate with serious misconduct as defined, given there is no direct evidence of theft or fraud.

(b) whether the person was notified of that reason; and

[84] The Applicant was provided with a warning regarding her conduct, which outlined the nature of the allegations relating to the Employer’s concerns and the conflict of interest. Mr Ah Chee had been overseas at the time of the warning. The Directors further discussed the conduct across the week, and received feedback from clients. The Applicant however, was not notified of the reason prior to the final meeting.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

[85] The Applicant was given an opportunity to respond to the warning, but the allegations surrounding the dismissal documented in the termination letter prepared prior to the meeting. The Directors conceded that if significant mitigating information had been provided they may have altered the course of the dismissal.

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

[86] The Applicant was not invited to have a support person present, at the warning or the dismissal meetings.

(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

[87] The Applicant received a warning about her performance, but the Applicant’s representative argued, there had not been an opportunity in the time frame of immediately moving to dismissal, to remedy the alleged concerns, and that the dismissal was for alleged serious misconduct.

(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

[88] The Respondent’s enterprise is small, employing four employees (including the Directors) at the time of the dismissal, with no expertise in industrial relations. The Respondent emphasised they were a small business employer who followed the Code.

(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

[89] The Directors were clearly dedicated to their business and its protection, and considered it could not be put at risk by the Applicant’s competitive conduct.

(h) any other matters that the FWC considers relevant

[90] The length of the Applicant’s employment and the Applicant’s work history are relevant to the harshness of the dismissal. The Applicant was employed as a casual, working regular and systematic hours with the expectation of on-going employment.

Conclusion

[91] As stated above, the reason for the termination was for a valid reason; however the dismissal was harsh given procedural fairness issues. The matter is analogous to the Full Bench decision in Mr Paul Carter v Qantas Airways Limited 32. Taking into account the observations set out above, on balance, given all of the circumstances, the Applicant’s dismissal was for a valid reason but was harsh, unjust and unreasonable. There was a clear conflict of interest given the conduct, and her pursuit of building her business whilst acting as an Employee. This undermined the trust and confidence in the employment relationship.

Remedy

[92] The relevant legislative provisions for consideration of the remedy are set out in s.390, s.391 and s.392. Section 390 of the Act sets out the following:

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case ...

[93] On the basis of the finding that there was a valid reason for the termination but it was harsh, unjust or unreasonable in regards to the process adopted, the appropriate remedy is now considered.

[94] The Applicant did not seek reinstatement, as it was submitted the Applicant had lost trust and confidence in the Respondent and that the employment relationship had been irrevocably destroyed. The Applicant had been employed for approximately 27.9 hours per week at $23.10 per hour. She had earned negligible income since termination, in house sitting and dog minding.

[95] In accordance with James Jones T/A The Pet Cemetery & Crematorium v Ms Raquel Ciuzelis 33 it is unlikely that issues in the employment relationship, particularly stemming from the Applicant’s competing operation would have been resolved to the Employer’s satisfaction. It is unlikely that the employment relationship would have lasted for more than two weeks.

[96] In considering remedy, I am satisfied that the Applicant applied pursuant to s.394(3) and in accordance with s.390(3) of the Act, the Applicant was protected from unfair dismissal at the time of termination and the Applicant has been unfairly dismissed. I am satisfied that the reinstatement of the Applicant is not the appropriate recourse, and the Applicant, given the dismissal and its unfairness, does not seek reinstatement.

[97] I am satisfied that an Order for the payment of a small amount compensation is appropriate, in all the circumstances.

[98] Section 392 relevantly sets out:

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Conclusion in Relation to Remedy

[99] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket 34. That approach, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey35; Jetstar Airways Pty Ltd v Neeteson-Lemkes36 and McCulloch v Calvary Health Care37.

[100] In considering the criteria relevant to the amount of compensation;

The effect of the order on the viability– s. 392(2)(a)

[101] There is no evidence that any order of compensation will affect the viability of the Respondent.

Length of the Applicant’s service – s. 392(2)(b)

[102] The Applicant was employed for approximately 16 months although the Applicant was employed on a casual basis, with the associated nature of that tenure.

Remuneration the Applicant would have or would likely have received – s. 392(2)(c)

[103] The Applicant estimated that had she not been dismissed, she would have remained in employment for a longer period but may have ceased employment at an earlier time, given the Respondent’s issues with her performance and the competition of her business.

[104] In all of the circumstances, the Applicant would not have remained in employment for longer than a two week period beyond the date of her dismissal. In reaching this conclusion I have also had regard to the fact that the Respondent had decided to dismiss her, based on her conduct. I have also had regard to the fact that other issues had been raised with the Applicant regarding her work performance and a warning was given in this regard. The submissions of the Applicant’s representative, regarding the flaws in procedure are acknowledged.

[105] The Applicant hours of work were set out as an average of 27.9 hours per week 38.

The Applicant’s efforts to mitigate loss – s. 392(2)(d)

[106] The Applicant has held a number of dog care assignments, however mostly unpaid.

The amount of any remuneration earned since dismissal – s. 392(2)(e) and the amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)

[107] On termination, the Applicant was paid no notice as the dismissal was said to be for serious misconduct. No earnings have been received since and further earning during the period of the Order on the evidence are unlikely. Therefore, I do not propose to make any deduction.

Any other matter that the FWC considers relevant – s. 392(2)(g)

[108] I accept that that the loss of the Applicant’s employment has caused her financial difficulty. However it is also recognised that the Applicant’s duty was to her Employer, not the pursuit of promotion of her business during her employment hours to the Respondent’s customers.

Deduction for misconduct

[109] The allegations of downloading the client list could not be substantiated. The Applicant’s breach of the Employer’s requested procedure was not equivalent to serious misconduct and I make no deduction on that basis.

Conclusion

[110] In all of the circumstances of this case, whilst there was a valid reason for termination (but on procedural issues), it is considered that it is appropriate to make an Order for compensation. The Order will issue with this Decision and will require the Respondent to pay compensation to the Applicant of a gross amount of two weeks wages, $1,288.98 (calculated as 27.9 hours per week 39 at $23.10 per hour40). This amount also discharges any notice obligation of the Respondent. The compensation ordered will be subject to the deduction of taxation as required by law. The Order will require the payment to be made 14 days from the date of this Decision.

[111] An Order 41 to that effect will issue together with this Decision.

COMMISSIONER

Appearances:

Ms Danielle Cameron and Mr Heffernan, Advocate of Fair Work Claims for the Applicant

Mr Martin, clinical psychologist, together with Ms Melanie Rowland and Mr Stephen Ah Chee, Directors of the Respondent for the Respondent

Hearing details:

2017:

Noosa

10 February 2017

 1   Respondent’s Outline of Argument: objections at page 3.

 2   Respondent’s Outline of Argument: objections at page 4.

 3   Respondent’s Outline of Argument: objections at page 5.

 4   Transcript Friday 10 February 2017 – [204] – [209]

 5   Respondent’s Outline of Argument: objections at page 5 and Respondent’s Outline of Argument: merits at page 9.

 6   Respondent’s Outline of Argument: merits at page 9.

 7   Statement of Genevieve Barker.

 8   Respondent’s Outline of Argument: objections at page 5 and Respondent’s Outline of Argument: merits at page 12.

 9   Statement of Penny Miller dated 15 December 2016.

 10   Statement of Mr Ernie Wotton dated 16 November 2016.

 11   Statement of Angela Kraushaar dated 21 December 2016.

 12   Respondent’s Outline of Argument: objections at page 5.

 13   Respondent’s Outline of Argument: merits at page 6.

 14   Respondent’s Outline of Argument: merits at page 6.

 15   Respondent’s Outline of Argument: merits at page 6.

 16   Respondent’s Outline of Argument: merits at page 7.

 17   Respondent’s Outline of Argument: merits at page 6.

 18   Joint Statement of Ms Melanie Rowland and Mr Stephen Ah Chee at page 6.

 19   Applicant’s outline of argument at [13]

 20   Applicant’s outline of argument at [19]

 21   Email letter from Client – Mally Jane dated 19 September 2016

 22   Applicant’s outline of argument – objections at [24]

 23   Applicant’s outline of argument – objections at [26]

 24   Applicant’s outline of argument – objections at [30]

 25   Applicant’s outline of argument – objections at [31]

 26   Applicant’s outline of argument – objections at [37] – [38]

 27   Applicant’s outline of argument – merits at [18]

 28   Applicant’s outline of argument – merits at [26]

 29   Applicant’s outline of argument – merits at [32] – [33]

 30   Email letter from Client – Mally Jane dated 19 September 2016

 31   Applicant’s outline of argument – merits at [86]

 32   [2012] FWAFB 5776

 33   [2015] FWCFB 84, PR559729

 34 (1998) 88 IR 21.

 35   [2013] FWCFB 431.

 36   [2014] FWCFB 8683.

 37   [2015] FWCFB 2267

 38   Statement of Applicant dated 18 January 2017 at [4]

 39   Statement of Applicant dated 18 January 2017 at [4]

 40   Respondent’s Outline of Argument: Merits at [2a]

 41   PR590850

Printed by authority of the Commonwealth Government Printer

<Price code C, PR590849>