Ms Gaye Przybylak v Malglor Pty Ltd T/A Taxi Management Brisbane

[2013] FWC 2574

[2013] FWC 2574

FAIR WORK COMMISSION

DECISION

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

Ms Gaye Przybylak
v
Malglor Pty Ltd T/A Taxi Management Brisbane
(U2012/15682)

COMMISSIONER CAMBRIDGE SYDNEY, 30 APRIL 2013

Unfair dismissal - unacceptable and inadequate performance - significant procedural deficiencies involving non-compliance with small business fair dismissal code - denial of natural justice - harsh, unjust and unreasonable dismissal - compensation ordered.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Brisbane on 15 November 2012. The application was made by Gayle Denise Przybylak (the applicant) and the respondent employer is Malglor Pty Ltd T/A Taxi Management Brisbane(the employer).

[2] The application indicated that the date that the applicant’s dismissal took effect was 2 November 2012. Consequently, the application was made within the 14 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation and it has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted in Brisbane on 13 March 2013.

[4] At the Hearing, Mr D W Riwoe, a solicitor, appeared for the applicant. The applicant was the only witness called to provide evidence in support of the claim. The employer was self represented by Mr M Campbell, the sole Director of the employer, who called a total of five witnesses including himself, who provided evidence on behalf of the employer.

Factual Background

[5] The applicant had worked for the employer for about sixteen months. The applicant worked as an Administration Assistant.

[6] The employer is a small business employing three full time staff. The employer operates a taxi management business which predominately services the Brisbane metropolitan and suburban areas. The employer engages approximately seventy sub-contract taxi drivers.

[7] The applicant’s duties included the pay reconciliation processing for individual taxi drivers at the completion of each period of hiring of a taxi vehicle. It is unnecessary to detail the reconciliation process but from time to time discrepancies would arise which would introduce a degree of disagreement between the applicant and a particular driver. A significant number of the drivers engaged by the employer are of Indian decent. The applicant and a number of the Indian drivers in particular had some difficulties and disagreements regarding the reconciliation processing.

[8] On Friday 2 November 2012, the applicant was approached by Mr Campbell, who in the course of a private conversation, advised the applicant that she was dismissed for employment with one week’s pay in lieu of notice. Mr Campbell told the applicant that she was dismissed on the basis of unsatisfactory performance which was described as not getting along with staff and complaints from drivers about her attitude. Mr Campbell handed the applicant an envelope which contained a letter of dismissal which relevantly particularised the reasons for dismissal as; “Inability to interact with fellow employees” and “Constant complaints from drivers of your attitude towards them”.

The Case for the Applicant

[9] Mr Riwoe, who appeared for the applicant, made verbal submissions in addition to documentary material which had been filed earlier. At the commencement of his address, Mr Riwoe submitted that there were no jurisdictional or other objections raised by the employer.

[10] Mr Riwoe submitted that the matter was based on the criteria contained in s. 387 Act, regarding whether the dismissal of the applicant was harsh, unjust or unreasonable.

[11] Mr Riwoe acknowledged that the evidence from all witnesses for the employer reflected a generally uncomplimentary assessment of the applicant’s attitude to others with whom she interacted at the workplace. However, according to Mr Riwoe, the applicant was never given any guidelines or training in how to conduct herself. Further, Mr Riwoe said that Mr Campbell refrained from putting any censure or warning in writing because a contested matrimonial divorce led to a forensic accountant conducting an analysis of his business operation. In circumstances where his business operation was under some scrutiny, Mr Campbell did not want to make a record of any problem involving a key administrative staff member.

[12] Consequently, Mr Riwoe criticized what he said was the lack of any proper warning or notification to the applicant about the general concerns regarding her attitude and conduct towards other employees and drivers. He said that there was no evidence of any written warning and the evidence of verbal warnings amounted to no more than vague, generalised admonishment regarding personality differences. Mr Riwoe submitted that the employer’s evidence of alleged prior warning was unable to satisfy the notion of a warning at all but instead represented little more than a general dissatisfaction.

[13] Mr Riwoe made submissions which addressed the specific criteria contained in s. 387 of the Act. According to Mr Riwoe, the reasons given for dismissal involving the applicant’s inability to interact with fellow employees and complaints from drivers regarding attitude, did not represent valid reasons because they were very wide statements which were too general in nature. Therefore, according to Mr Riwoe, there was not proper basis to establish that the applicant was dismissed for a valid reason.

[14] Mr Riwoe made further criticism of the procedure adopted by the employer which involved the notification of the reasons for dismissal being given in the letter of dismissal during the discussion with Mr Campbell on 2 November 2012. Mr Riwoe said that the decision to dismiss the applicant had clearly been predetermined and the notification contained in the letter of dismissal was the first and only written notification provided to the applicant.

[15] Mr Riwoe further submitted that the applicant was not given an opportunity to respond to the reasons contained in the letter of dismissal nor was she provided with an opportunity to have a support person present at the meeting held on 2 November 2012.

[16] In respect to the issue of unsatisfactory performance, Mr Riwoe submitted that the attitude and conduct complaints of the employer were matters of unsatisfactory or unacceptable performance which were not the subject of any warning or guidance which may have provided for some rectification of the problems.

[17] Mr Riwoe acknowledged that the employer was a small business and that the small business fair dismissal code had application. However, Mr Riwoe was strongly critical of the absence of clear warning to the applicant about her attitude and behaviour. Mr Riwoe said that there was no dispute that there were no written warnings given to the applicant and that in his view, the evidence did not support a finding that the applicant had been given any verbal warning.

[18] Mr Riwoe summarised his submissions by concluding that the dismissal of the applicant was unfair as it was without valid reason because the reasons that were given were too general in nature. Further, Mr Riwoe said that the dismissal involved a flawed process, particularly regarding the absence of any proper warning about the reasons contained in the letter of dismissal. Mr Riwoe urged that the Commission find in favour of the applicant and that remedy by way of compensation be Ordered.

The Case for the Employer

[19] The employer was self represented by Mr Campbell, who submitted that the dismissal of the applicant was not unfair.

[20] Mr Campbell commenced his submissions by stating that he had been a director of various companies for twenty years and he considered himself to be a fair and reasonable employer.

[21] Mr Campbell said that he had dismissed the applicant because of her attitude to the drivers. He acknowledged that there were no written warnings given to the applicant but he said that the applicant had been made aware of the problems with her attitude and behaviour towards the drivers in numerous meetings and discussions that he had held. Mr Campbell said that he had made it clear to the applicant that she had to “shape up or ship out” and this message to the applicant had been conveyed repeatedly over a period of about three months before 2 November 2012.

[22] Mr Campbell submitted that there was a valid reason for the dismissal of the applicant. He said that his business depended on maintaining good relationships with the taxi drivers and the applicant had upset drivers who were going to leave or had left his business. Consequently Mr Campbell said that the viability of his business was threatened and he had to act to protect the business.

Consideration

[23] Section 385 of the Act stipulates that the Commission must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

[24] In this instance there was no dispute that the applicant had been dismissed and that the dismissal was not a case of genuine redundancy. I have approached the determination of the matter by examination of firstly, that element contained in subsection 385 (c) of the Act, specifically whether the dismissal of the applicant was not consistent with the Small Business Fair Dismissal Code (the Code), and secondly, whether in accordance wit subsection 385 (b), the dismissal was harsh, unjust or unreasonable.

[25] The applicant was provided with payment in lieu of notice and therefore she was not summarily dismissed. Consequently for the dismissal to be consistent with the Code it would need to have satisfied the Code’s provisions regarding “Other Dismissal” and “Procedural Matters” which are in the following terms:

“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.”

[26] In this case there was no evidence to enable a factual finding that the employer had given the applicant a reason why she was at risk of being dismissed. There was convincing evidence that the employer had a valid reason based on the applicant’s conduct, but in the absence of any written records, there was no evidence to support the suggestion that the applicant had been warned verbally that she was at risk of being dismissed if she did not improve her interactions with the drivers and other employees.

[27] The applicant provided evidence which categorically denied that she had been warned at all, for example:

“PN156

Okay. At any time were you ever given any indication that your performance was below what was expected?---No, not at all.

PN157

At any time were there any discussions raised in relation to how you dealt with the taxi drivers?---No.”

[28] Interestingly, when Mr Campbell cross-examined the applicant, the questions that he put to the applicant reflected that he had encouraged the applicant to improve her communications with others rather than warn her that any failure to improve may result in dismissal. The following examples of the applicant’s testimony during cross-examination are relevant:

“PN345

Did I not say to you that you do have problems with the other staff and I think that before I get involved you should communicate with the other staff and see if you can't get to common ground?---No, that was not what you said at all.

PN404

Okay?---John has never done it with me. Sandy came and said, "Gaye, look, Mahli's not happy," and I knew what she was talking about, but it's the only time. You, one time, said, "Gaye, you've got to be more tactful," because I was asking one of the drivers if he could produce figures. That was the most criticant [sic] that you told me.”

[29] The absence of any warning to the applicant was raised with Mr Campbell when he gave evidence as a witness and the following extract from transcript summarises the position:

“PN584

But, Mr Campbell, what I'm trying to get to here is - because it's not in your evidence anywhere - where before 2 November there was a discussion, let alone a document, which said something like, "If we don't get an improvement in a level of harmony" - if I can describe it as such - "you risk being dismissed"?---Correct, in the sense that most of the time - when I say most of the time it was - her procedural way, it was the way that she treated the drivers like children, whatever, but there was nothing that I would, as an employer, dismiss her for. I don't think it came anywhere down - but when it - the final nail was when - particular thing where she used a racist taunt in front of other drivers, and we're talking other drivers as in at least 10 other drivers, where she used the word black with a B after it, "are all thieves" - you know, you're - and that, that was it. I left the room.”

[30] Consequently, the evidence has established that the employer did not give the applicant any warning that her employment was at risk. The Code establishes a mandatory requirement for a warning to be given in cases other than summary dismissal. Further, the Code also states; “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,..” This part of the Code is also a mandatory requirement relevant to the circumstances in this case and which cannot be satisfied in the absence of any clear warning. Therefore the dismissal of the applicant was not consistent with the Code.

[31] It is perhaps conceivable but probably very unlikely, that a dismissal that was not consistent with the Code would not be held to be harsh, unjust or unreasonable. It would seem that the Code is designed to provide small business with something of a less stringent and simplified set of evidentiary and procedural requirements which may avoid a finding that a dismissal was unfair. If a dismissal does not comply with the lesser standards of the Code it is difficult to imagine that it could avoid a finding that it would also be harsh, unjust or unreasonable.

[32] However, for completeness, I have examined that element contained in subsection 385 (b) of the Act, and the interconnected provisions of s. 387 of the Act which contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

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

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

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

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

387 (a) - Valid reason for the dismissal related to capacity or conduct

[33] In this case the applicant was dismissed for unsatisfactory work conduct involving an unacceptable standard of interpersonal engagement with others in the workplace. The evidence has confirmed that the applicant’s conduct at work lacked an acceptable standard of interpersonal skills. The applicant’s unsatisfactory conduct was even described to be “abusive behaviour” 1. Although there was insufficient evidence to support any finding that the applicant’s behaviour amounted to misconduct, the nature of the applicant’s unacceptable behaviour would have of itself, and if uncorrected, represent a valid reason for dismissal.

387 (b) - Notification of reason for dismissal

[34] The employer provided notification of the reason for the dismissal in the letter of dismissal given to the applicant on 2 November 2012. Ordinarily in cases involving dismissal with notice, the notification of the reason for dismissal would be provided at a time which provided some opportunity for a response to be elicited from the employee.

[35] Where the notification of the reason for dismissal is given to the employee by way of a document which was prepared before the commencement of a meeting held to deal with the dismissal, the meeting becomes a futility, and the notification is of little practical utility.

387 (c) - Opportunity to respond to any reason related to capacity or conduct

[36] The first documented concern about the applicant’s work behaviour and attitude was made when Mr Campbell gave her the letter of dismissal on 2 November 2012.

[37] Consequently, there was no opportunity for the applicant to consider the issues contained in the letter of dismissal and respond to the allegations made against her. It is purely hypothetical as to whether or not, if given an opportunity, the applicant may have been able to convince Mr Campbell that she could change her approach to the drivers and the other employees, particularly if she was aware that her employment was clearly under threat.

387 (d) - Unreasonable refusal to allow a support person to assist

[38] The employer did not provide any meeting or other forum which might have involved the presence of a support person to assist the applicant. Strictly speaking, there was no refusal to allow a support person to assist the applicant because there was no procedure which could have presented as an opportunity for the applicant to request a support person.

387 (e) - Warning about unsatisfactory performance

[39] This factor has particular relevance in this case where the applicant was dismissed for reasons of unsatisfactory work performance and behaviour.

[40] There was no evidence of any written warning made to the applicant. The employer attempted to rely upon some general verbal admonishments about the need for the applicant to communicate with others in a more convivial manner. These discussions cannot represent a warning in respect to the potential for dismissal from employment. The applicant was understandably not aware that the workplace difficulties were being considered by the employer to be anything more serious than personality clashes which it would prefer to avoid. In the absence of any clear warning, the applicant could not have known that the employer had elevated the workplace friction to an issue that put her employment at risk.

387 (f) - Size of enterprise likely to impact on procedures

[41] The employer is a small business. It is acknowledged and accepted that a business of this type may operate with a considerable degree of informality in the manner with which it deals with its employees. In these circumstances, it would be unrealistic to expect the employer to adopt sophisticated processes for dealing with the potential for termination of employment.

[42] However, in circumstances where the dismissal was not consistent with the Small Business Fair Dismissal Code, the small size of the business cannot justify or excuse a manifestly inadequate procedure, such that there was no elementary process to provide natural justice to the applicant.

387 (g) - Absence of management specialists or expertise likely to impact on procedures

[43] The employer did not have dedicated employee relations management specialists. However, an expert is not required in order to meet the basic requirements which have been established by the Code.

387 (h) - Other relevant matters

[44] There was evidence provided by those witnesses called by the employer which established that the applicant’s work conduct and behaviour was unsatisfactory. I have carefully considered the evidence from the employer’s witnesses and I conclude that there was legitimate basis for serious concern about particular aspects of the applicant’s work behaviour.

[45] However, I have balanced the evidence which verified legitimate basis for criticism of the applicant’s work behaviour against the various other factors under consideration. The corollary of this consideration is that I am unable to countenance that it could be fair or just to dismiss the applicant without first giving her an opportunity to mend her relationships with the drivers and other employees. If, with the clear knowledge that her employment was in jeopardy, the applicant was unable or unwilling to harmonise her interpersonal relations in the workplace, any consequent dismissal would not have been unfair.

Conclusion

[46] In this case the applicant was dismissed for unsatisfactory behaviour involving an unacceptable standard of interpersonal engagement with others in the workplace. Although the employer had a legitimate basis for complaint, it adopted an erroneous procedure which was not consistent with the Small Business Fair Dismissal Code.

[47] The procedure that the employer adopted to deal with the implementation of the dismissal represented a clear denial of natural justice.

[48] The dismissal was implemented by way of a procedure which was not consistent with the Code and denied the applicant any prospect to rectify her unacceptable behaviour. Consequently, the dismissal of the applicant was harsh, unjust and unreasonable.

Remedy

[49] The applicant has not sought reinstatement as remedy for her unfair dismissal. Instead, the applicant has asked that the Commission make Orders for monetary compensation pursuant to s. 392 of the Act which is in the following terms:

“392 Remedy—compensation

Compensation

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

Criteria for deciding amounts

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

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

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

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

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

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

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

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. Disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[50] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal and I turn to the factors which involve the quantification of any amount of compensation.

[51] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that were established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket  2 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 3.

[52] Firstly, I confirm that an Order of payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.

[53] Secondly, in determining the amount of compensation, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.

[54] There was no evidence that an Order of compensation would impact on the viability of the employer’s enterprise.

[55] The applicant had approximately sixteen months service as an employee.

[56] The applicant would have been likely to have received remuneration of approximately $865.00 per week if she had not been dismissed. There was some significant prospect that the employment may not have endured beyond a period of three months, particularly if there had been proper attempts to warn the applicant of her work conduct inadequacies and she had been unable to rectify such matters.

[57] The applicant made efforts to mitigate the loss suffered because of the dismissal and she has not obtained alternative work.

[58] Thirdly, in this instance I make no finding that any misconduct of the applicant contributed to the employer's decision to dismiss.

[59] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[60] There are no other matters that I consider relevant to the determination of the amount of any compensation.

[61] Consequently for the reasons outlined above, I have decided that an amount approximating with twelve weeks remuneration should be provided as compensation to the applicant. Consequently the amount that I Order as compensation is a gross figure of $10,380. Separate Orders [PR536053] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Mr D. Riwoe, solicitor from Aden Lawyers, on behalf of the applicant.

Mr M. Campbell on behalf of the employer.

Hearing details:

2013.

Brisbane:

March, 13.

 1   Transcript of proceedings (13 March 2013) @ PN1279.

 2 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.

 3   Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.

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<Price code D, PR536051>