Ms Hongyan Wu v Round Scaffolding Pty Ltd
[2014] FWC 5506
•12 AUGUST 2014
| [2014] FWC 5506 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Hongyan Wu
v
Round Scaffolding Pty Ltd
(U2014/4121)
COMMISSIONER JOHNS | MELBOURNE, 12 AUGUST 2014 |
Application for relief from unfair dismissal - harsh, unjust or unreasonable - conduct discovered post termination - compensation
Introduction
[1] This decision arises out of an unfair dismissal application made on 30 January 2014 by Hongyang (Anna) Wu (Applicant). The application was made pursuant to section 394 of the Fair Work Act 2009 (FW Act) for a remedy in respect of her dismissal by Round Scaffolding Pty Ltd (Employer/Respondent).
[2] On 8 May 2014 the Employer filed a Form F4 (objection to the application). However, at the directions hearing on 28 May 2014 the Respondent withdrew its jurisdictional objection.
[3] On 13 March 2014 the unfair dismissal application was listed for conciliation before a Fair Work Commission (Commission) Conciliator. The Respondent did not attend the conciliation conference and consequently, the dispute remained unresolved.
[4] Consequently the matter was listed for hearing in Melbourne on 2 June 2014.
Permission to be represented
[5] On 28 May 2014, the Commission sought submissions from the parties about whether the Commission should grant each of them permission to be represented by a lawyer. A determination of this issue was necessary to ensure that the manner in which any hearing was conducted was fair and just. 1
[6] Diana Olsson of counsel for the Applicant submitted that permission should be granted as the Applicant was not able to represent herself due to difficulties with the English language. It was also submitted that it would enable the matter to be dealt with more efficiently taking into account the complexity of the matter.
[7] Victor Tse for the Respondent also submitted that permission should be granted as the Respondent is not able to represent itself. Its Director Jiajun (Jack) Zhang’s English language ability is limited.
[8] Having considered the matters referred to immediately above the Commission determined to allow both the Applicant and Respondent to be represented by a lawyer because it would be unfair not to allow each of them to be represented because of their difficulties with the English language. The Commission was satisfied that Ms Wu and Mr Zhang (as the principal of the Respondent) were unable to represent themselves effectively.
Conference or Hearing
[9] On 28 May 2014, the Commission also sought submissions from the parties about whether the Commission should conduct either a conference (section 398) or a hearing (section 399) in relation to the matter.
[10] Taking account any differences in the circumstances and the wishes of the parties to the matter, and considering whether a hearing would be the most effective and efficient way to resolve to the matter, the Commission decided to conduct a hearing.
The hearing
[11] At the hearing the Applicant was represented by Ms Diana Olsson, of counsel. The Applicant relied on her own evidence and did not call any further witnesses.
[12] At the hearing the Respondent was represented by Mr Victor Tse and Mr James Finnigan, solicitors, and relied on the evidence of its Director, Mr Jiajun (Jack) Zhang.
Background
[13] The following facts were either common ground between the parties or not contested:
(a) On 1 July 2011 the Applicant commenced employment with the Respondent. She was employed in the position of Sales and Marketing Manager; 2
(b) Mr Zhang, the managing director of the Respondent, resides in China. He would visit Melbourne two to three times per year; 3
(c) The Respondent’s business involves selling scaffolding imported into Australia from a Chinese company, Qingdao Scaffolding Import/Export Company Ltd, also owned by Mr Zhang; 4
(d) The Applicant and Xinyi Xia, also a director of the Respondent, were the only two employees of the Respondent; 5
(e) Xinyi Xia was the Respondent’s General Manager 6 and was in charge of administration and accounting. She stopped working for the Respondent at the end of 2012/February 2013;7
(f) The Applicant and Mr Zhang were both signatories to the Respondent’s Commonwealth Bank Account (CBA Account) from 20 July 2011; 8
(g) From Ms Xia’s resignation the Applicant was the only employee of the Respondent. She was given authority to manage the Respondent’s bank accounts. 9 She carried out all the duties Ms Xia was previously responsible for as well as her usual duties;10
(h) At the end of 2012 the Applicant requested the Respondent increase her salary in light of her changes in duty; 11
(i) The Applicant’s salary was not increased following these changes; 12
(j) On 12 January 2014 Mr Zhang arrived in Melbourne; 13
(k) At 2.58pm on 12 January 2014 Mr Zhang sent a text message to the Applicant stating “...I have arrived in Melbourne. I will arrive at our office at about 9.00am tomorrow. Have a nice weekend!” The Applicant responded at 4.17pm stating “Welcome you to Melbourne. Have a good rest. See you tomorrow at office.” 14
(l) On 13 January 2014 the Applicant met with Mr Zhang at the Respondent’s office. 15 What happened at this meeting is of significance in the matter and it is dealt with in more detail below;
(m) On 14 January 2014 the Applicant was absent from work because she was on personal leave; 16
(n) Notwithstanding her illness, in the morning of 14 January 2014 the Applicant made four separate transactions by internet banking from the Respondent’s CBA Account to her personal account a total of $8,009.14 (the “Transfers”); 17
(o) Later on 14 January at 5.13pm Mr Zhang sent the Applicant a text message stating “We visited Round Scaffolding’s lawyer this afternoon, he told us you must follow my instruction about the decision, I take the rights of the control of the account banks of Round Scaffolding ... Pls come to the office of Round at 8.30am on 15/01/14...” 18
(p) The Applicant sent a text message in reply at 7.20pm stating “I never disobey your instruction, I will go to the office tomorrow if I get better. You know I was ill, please stop threaten me” 19
(q) On 15 January 2014 the Applicant did not attend the office of the Respondent because she was on personal leave; 20
(r) On 15 January 2014 the following text message exchange took place between the Applicant and Mr Zhang:
a. 9.01am - From Applicant to Mr Zhang: “Hi Jack, You called me very early ... the doctor asked me to rest. I got medical certificate, I will email that to head office when I get better. Anna”
b. 9.08am - From the Applicant to Mr Zhang: “Jack, did you bring that ...638 mobile we bought together last time, it is expensive to send text to your China mobile...”
c. 9.09am - From Mr Zhang to Applicant: “Dear Anna ... I am very disappointed that you did not come in to the office, you did not answer my call either. As I told you very clearly on 13/01/14, I must take back the right of the bank payment of Round Scaffolding, you cannot control it and refuse to go to the bank with me! If you do not call my Chinese mobile phone .... before 10.00am today I have to ask help from the lawyer of Round Scaffolding.”
d. 9.16am - From Mr Zhang to Applicant: “That Australian phone does not work ... You know my time is very tight, tomorrow evening 21.30 I will go back to China! I do hope you understand this point!”
e. 9.37am - From Mr Zhang to Applicant: “...Please do not delay and waste my time, I already asked our lawyers advice: the issue of account bank changing is very urgent thing! You cannot delay this issue at any reason or excuse!”
f. 9.41am - From Applicant to Mr Zhang: “...What you said in your text message is totally not true. This is the first time you said you want to take back the right of the Bank payment for Round Scaffolding. You are the director, I will not touch the account from now on...”
g. 9.42am - From Mr Zhang to Applicant: “I also need you to give me the key of the warehouse ... urgently this morning!”
h. 9.54am - From Applicant to Mr Zhang: “... I was ill, you keep forcing me to do things. This is Australia, not China. I have not done anything illegal, you have ... in order to cooperate your time, I will call ... now although I feel still not well.”
(s) On 15 January 2014 at 12.19pm the Applicant sent a copy of the medical certificate she obtained by email to the Respondent’s head office, as Mr Zhang did not have an email address. At 1.00pm the Applicant sent a further email to the Respondent’s head office requesting confirmation the medical certificate was received; 21
(t) On 15 January 2014 there then followed a further exchange of text messages between the Applicant and Mr Zhang as follows:
a. 4.50pm - From Mr Zhang to Applicant: “...This evening after 19.30pm, I will have time. If you feel ill, I can go to your home address to take the warehouse key!...”
b. 5.14pm - From Mr Zhang to Applicant: “Please send to my Chinese mobile number ... immediately today: the pin code of turning on the computer ... also the pincode of the emails ... I need to check all your mails about your daily work.”
c. [Termination text] - 7.13pm - From Mr Zhang to Applicant: “Dear Hongyan Wu ... 1. Round Scaffolding Company officially informed you, you are fired by the company, because you are serious violations of employees’ responsibility. The Company has an official termination notice to send you, please notify the company of your mailing address. 2. The company has terminated your employment authorisation, including company credit card, bank account.”
d. 7.22pm - (following on from above message) “3. And you need to now return to the company all files and records...” 22
(u) The Respondent also issued a termination letter dated 15 January 2014, but only sent it to the Applicant by email on 16 January 2014 at 1.51pm. The Applicant says she did not receive the Respondent’s termination letter until 28 January 2014. 23 The letter stated the following reasons for terminating the Applicant’s employment:
“ - your failure to provide company documents including banking records, financial statements, customers’ file despite repeated requests by the Company;
- your continual refusal to fulfil your basic and fundamental duties to the company including the relinquishment of the banking authority the company granted to you for company business purposes despite the Company’s order; and
- your unreasonable demand to the Company, to agree to your yet unsubstantiated remuneration claim, as a precondition to provide or return the above mentioned company documents.”
(v) On 16 February 2014 it is alleged that Mr Zhang discovered the Transfers made by the Applicant on 14 February 2014. 24 The Applicant denies any wrong-doing in effecting the Transfers.
(w) At the time of her dismissal the Applicant had already been paid through until 30 January 2014.
Protection from Unfair Dismissal
[15] An order for an unfair dismissal remedy may only be issued where the Commission is satisfied the Applicant was protected from unfair dismissal at the time of the dismissal.
[16] Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal.
[17] In the present matter, there is no dispute that the Applicant has completed the minimum employment period and earned less than the high income threshold. Consequently, the Commission is satisfied the Applicant was protected from unfair dismissal.
[18] The Commission will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the Act.
Was the dismissal unfair?
[19] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:
“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.”
Was the Applicant dismissed?
[20] It is common ground between the parties that the Applicant was dismissed from her employment by text message at 7.13pm on 15 January 2014.
Was the dismissal consistent with the Small Business Fair Dismissal Code?
[21] A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (the Code) which was declared by the Minister for Employment and Workplace Relations on 24 June 2009.
[22] It is common ground between the parties that immediately before the dismissal the Respondent was a small business employer within the meaning of s.23 of the Act.
[23] In its Outline of Submissions the Respondent submitted the dismissal of the Applicant complied with the Code because it believed on reasonable grounds that the Applicant’s conduct was sufficiently serious to justify summary dismissal. It relied on the transaction the Applicant made from the CBA Account to her personal account on 14 January 2014 which it says were not authorised, the Applicant’s failure to provide the Respondent its bank statements and failure to provide the Respondent with passwords to its computers.
[24] However, during its closing submissions and, having regard to the evidence before the Commission (which included that the Respondent discovered the Transfers after it had effected the termination of employment), the Respondent’s advocate appropriately conceded that the Respondent no longer maintained that it complied with the Code. 25 However, it maintained that the dismissal was not harsh, unjust or unreasonable.
Was the dismissal a genuine redundancy?
[25] It is common ground between the parties that the issue of genuine redundancy does not arise in this matter.
Harsh, unjust or unreasonable
[26] Having been satisfied of each of s.385(a),(c)-(d) of the Act, the Commission must consider whether it is satisfied the dismissal was harsh, unjust or unreasonable. The criteria the Commission must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act.
[27] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 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 the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.
[28] The Applicant submits the dismissal was harsh, unjust or unreasonable principally on the basis that there was no valid reason for termination. If there was a valid reason for termination the Applicant further says she was not notified of the reason or provided with an opportunity to respond to any such reason by reason of her being on personal leave on 14 and 15 January 2014.
[29] The Respondent submits the dismissal was not harsh, unjust or unreasonable. Despite all that had been submitted by the Respondent in the lead-up to the hearing, in substance, at the end of the hearing, the Respondent relies upon the Transfers as the valid reason for justifying summary dismissal (at some short time after the actual termination on 15 January 2014).
[30] The Commission is under a duty to consider each of the criteria in s.387 in reaching its conclusion 26 and now does so separately.
Valid reason - s.387(a)
[31] The Respondent must have a valid reason for the dismissal of the Applicant, although it need not be the reason given to the Applicant at the time of the dismissal. 27 The reasons should be “sound, defensible and well founded”28 and should not be “capricious, fanciful, spiteful or prejudiced.”29
[32] The Respondent says it had a valid reason for terminating the Applicant’s employment as the Transfers made by her on 14 January 2014 from the CBA Account to her personal account were not authorised by the Respondent. The Applicant says she was authorised to make the Transfers and therefore there was no valid reason for her dismissal.
The evidence concerning the events of January 2014
[33] The Commission has had regard to all of the evidence in the proceeding. However, in this decision, the Commission does not seek to set out in detail all of the evidence presented in the proceedings, rather it is set out in brief terms.
[34] It was the Applicant’s evidence that:
(a) On 13 January 2014, she was not well however she went in to the Respondent’s office to meet with Mr Zhang. She told Mr Zhang she was not well and that she had booked a doctor’s appointment for the following day; 30
(b) During the meeting with Mr Zhang on 13 January 2014, the following matters were discussed:
i. The Applicant gave a report back to Mr Zhang on business matters including stock levels, the Respondent’s lease and its future business in Australia; 31 With regard to the lease the Applicant stated the Respondent wanted to arrange early termination;32
ii. Increase in the Applicant’s salary, overtime and entitlements owing to the Applicant. She states:
“Zhang wanted to negotiate in relation to the overtime that was owing to me however when I pointed out that he had approved the email that I had sent outlining my entitlements he agreed with the overtime that I was claiming but he said that I could not be paid for it but could take time off in lieu instead. He also said that he would not be able to give me the increase in my salary to the same level as Xia’s for taking on Xia’s job that he had promised me because the company was not running at a profit. I was not happy about this. He did however approve for me to be paid two month of my annual leave which I had accrued, my commission that was owing of $1,693.14 and an amount of $2,000.00 as a guarantee for a mobile phone that he had taken out on a two year plan in my name for his own use.” 33
iii. The Applicant was concerned about the company accounts. With regard to the CBA Account the Applicant states she didn’t want her name involved in the account. The Applicant used the account to transfer her salary, but she no longer wanted to have the authority to do that anymore. 34 With the NAB account she had general concerns about their banking procedures as well as concerns about a previous employee still being a signatory. She was also concerned about GST reporting obligations and BAS statements.35 She also discussed with Mr Zhang her concerns regarding auto deductions from the CBA Account that needed to be resolved. She then handed him all the CBA Account documents from the beginning of 2011 to date;36
(c) With regard to the commissions the Applicant was owed, her evidence is that the Respondent owed her $1690.14 as well as approximately $3,185 for another five contracts commission. She said Mr Zhang said “The company has no spare money... so I can only pay you 1690.” 37
(d) Mr Zhang took out a two year mobile phone plan under the Applicant’s name. The Applicant was concerned that if he made a lot of international calls she will be at risk. After some negotiations, the Applicant says Mr Zhang agreed to pay her $2,000.00 as a guarantee; 38
(e) The meeting with Mr Zhang concluded about 6pm that day. 39 Before she left for the day she gave Mr Zhang the key to the office and warehouse;
(f) On 14 January 2014, she transferred in four separate transfers the following amounts which were authorised by Mr Zhang the previous day:
● $2,158.00 being for annual leave cash out for 2011/2012;
● $2,158.00 being for annual leave cash out for 2012/2013;
● $1,693.14 being for commission payment for warehouse sakes; and
● $2,000.00 being for the mobile phone guarantee; 40
(h) At around 10am on 14 January 2014 she went to see her doctor who provided her with a medical certificate stating she was unfit to work from 14-16 January 2014; 43
(i) At 12.19pm on 15 January 2014 she emailed a copy of the medical certificate to head office requesting it be forwarded to Mr Zhang; 44
(j) As stated above, the Applicant says she did not receive the Respondent’s termination letter until 28 January 2014. 45
(a) During 2013 he asked the Applicant many times to provide specific details of company income and expenses, and she consistently failed to do so; 46
(b) His evidence in relation to the meeting between him and the Applicant on 13 January 2014 is:
i. He told her he wanted to take over the company’s banking and that she was no longer authorised to do any banking on behalf of the Respondent; 47
ii. He asked the Applicant to go to the bank and his lawyer’s office with him the following day, but she refused; 48
iii. He says that the Applicant told him she would not cooperate with him until she got what she wanted (increase in salary); 49
iv. The Applicant lost her temper and then told him she was ill; 50
v. He did not approve her paying the two months overtime she claimed; 51
vi. He agreed that she could take the overtime she was owed as time in lieu; 52
vii. He did not agree to pay out her two months of annual leave and did not authorise her to make that payment; 53
viii. He agreed to pay the Applicant the $1,693 in commission she was owed, but did not authorise her to make that payment; 54
ix. He did not authorise her to transfer $2,000.00 for the mobile phone guarantee; 55
(c) He had never promised the Applicant an increase in salary; 56
(d) He did not believe the Applicant was sick on 14 January 2014; 57
(e) He was not sure whether he was a signatory to the CBA Account; 58
(f) The main reason for terminating the Applicant’s employment was that she did not go to the bank with him; 59
(g) He believed that he could not change the signatories to the CBA Account without either the Applicant attending the bank with him, or the assistance of his lawyer; 60
(h) He found out on the morning of 16 January 2014 that the Applicant had transferred money from the CBA account to her personal account on 14 January 2014; 61
(i) The termination letter was prepared by the Respondent’s lawyer on 15 January 2014. Mr Zhang says that when he found out about the Transfers the Applicant had made (on 14 January 2014) he told his lawyer about them (on 16 January 2014). However, it is noted that the termination letter was not amended to include the alleged unauthorised Transfers; 62
(j) He agreed the first time the unauthorised Transfers are mentioned is in correspondence from his lawyer to the Applicant’s lawyer on 7 February 2014; 63 and
(k) He agreed he was an experienced businessman. 64
[36] Due to the confusion regarding the signatories on the CBA Account, the Commission adjourned the hearing for a short time to allow Mr Zhang to go to a Commonwealth Bank branch to obtain records showing the signatories on the Account. The records were obtained 65 and showed that Mr Zhang was a signatory from 20 July 2011. Accordingly, it seems that Mr Zhang was mistaken in his belief that he needed the Applicant to attend the bank with him to change the signatories to the account.
[37] The records also show that from 16 January 2014, Mr Zhang became the only signatory to the account. Also in evidence before the Commission was a resolution of the Respondent dated 15 January 2014, removing the Applicant’s banking authority. 66 It is said that the resolution was passed at about 3.00 pm on 15 January 2014.
[38] It is noted that lawyers for the Respondent could not provide the Commission with any file notes or other documents relating to instructions received from Mr Zhang (on or after 16 January 2014) about the alleged unauthorised withdrawal of $8,009.14 on 14 January 2014. 67 It seems passing strange that, if the Respondent’s lawyers we informed about the Transfers on 16 January 2014 they did not write to the Applicant to complain about the Transfers until 7 February 2014.
[39] What the chronology and evidence makes clear is that on 14 and 15 January 2014 the Applicant was on personal leave. While Mr Zhang did not believe the genuineness of the leave, 68 the Respondent was provided with a medical certificate. Accordingly, to the extent Mr Zhang was annoyed by the non-attendance of the Applicant on those two days, at law, the Respondent has nothing to complain about. The Applicant was medically unfit for work. As such the Applicant had:
● no obligation to render any service to the Respondent on those days;
● no obligation to attend for work;
● no obligation to otherwise respond to demands for information made by Mr Zhang; and
● in respect of what Mr Zhang conceded was the main reason for terminating the Applicant’s employment (her not attending the bank with him 69), no obligation to attend the bank while she was on personal leave.
[40] Nothing that the Applicant did not do on those days (by reason of her personal leave) could found a valid reason for termination.
[41] Accordingly, as at 15 January 2014 (when the decision was made to terminate the Applicant’s employment) if there was a valid reason for termination, that valid reason must have occurred prior to the Applicant commencing personal leave on 14 January 2014. However, very little evidence was led about these matters.
[42] Specifically, no particulars were provided (nor evidence put to the Applicant in cross-examination) of the Applicant’s:
● failure to provide (prior to 15 January 2014) company documents, including banking records, financial statements and or customer files “despite repeated requests”;
● refusal (prior to 15 January 2014) to fulfil basic and fundamental duties, including relinquishing of the banking authority;
● unreasonable demand for an increase in her remuneration.
[43] Consequently, the Commission is not satisfied that any events prior to 14 January 2014 provided a valid reason for termination.
[44] In truth of fact where the termination letter refers to certain matters it is referring to them in the context of what occurred on 14 and 15 January 2014 and Mr Zhang’s annoyance that the Applicant was not available to render service to him on those days when he had a limited time in Melbourne. He did not believe she was ill. 70 However, because of the Applicant’s personal leave on those days her failure to comply with directions from Mr Zhang could not found a valid reason for termination. More likely than not Mr Zhang did not have a proper understanding of the Applicant’s right to personal leave when he “fired” the Applicant by text message and later instructed his lawyers to draft the termination letter.
[45] The real issue in dispute therefore is whether the Applicant was authorised to make the Transfers from the CBA Account to her personal account on 14 January 2014.
(a) If the Applicant was authorised to make the Transfers, again there is no valid reason for termination. The Respondent’s counsel conceded the same during the hearing. 71
(b) If the Applicant was not authorised to make the Transfers, the Transfers would have provided a valid reason for termination when it was discovered. The Applicant’s counsel conceded the same during the course of the hearing. 72
[46] In order to determine if the Transfers were authorised it is necessary to make findings of fact about what happened at the meeting between Mr Zhang and the Applicant on 13 January 2014.
[47] In her original witness statement the Applicant says:
During our meeting on 13 January 2014, we discussed various matters including the business affairs such as the stock level of the respondent, the lease, the respondent’s future in Australia. I was worried about the lease being terminated early but Zhang assured me I would be looked after and would continue to be employed. I gave Zang the respondent’s bank account statements for the CBA. I addition, as for the CBA account, I also shown him that there were some auto deductions on the accounts for mobile phone charges and the superannuation. As for NAB account, I was advised by Zhang that we would go to NAB with Xia the following day to ask for various statements as Xia still held the NAB internet banking authority. 73
We also discussed my entitlements owing and the increase in my salary that he had promised. Zhang wanted to negotiate in relation to the overtime that was owing to me however when I pointed out that he had approved the email that I had sent outlining my entitlements he agreed with the overtime that I was claiming but he said that I could not be paid for it but could take time off in lieu instead. He also said that he would not be able to give me the increase in my salary to the same level as Xia’s for taking on Xia’s job that he had promised me because the company was not running at a profit. I was not happy about this. He did however, approve for me to paid 2 months of my annual leave which I had accrued, my commission that was owing of $1,693.14 and an amount of $2,000 as a guarantee for a mobile phone that he had taken out on a 2 year plan in my name for his own use which I had been concerned about. 74
At the meeting on 13 January, I verbally told Anna that I wanted to take over the company’s banking, and that she no longer authorised to do any banking on behalf of the Respondent. I told her to return all company bank cards and chequebooks. She complained that the (sic) she deserved more money and only gave me the NAB bank card. She refused to return any other property until we agreed to increase her salary. She began yelling loudly and left the office at 3pm. 75
[49] In her reply witness statement the Applicant says:
In paragraph 25 of his witness statement Zhang said that the transfers that I made to my account on 14 January 2014 were made without the authority from the company and after he had instructed me not to use the company accounts any more. This is not true. 76
Zhang never told me on 13 January 2014 that I was not to use or access the company’s bank accounts any more that I was no longer authorised to do any banking on behalf of the Respondent. On the contrary, on 13 January 2013 (sic) he told me I could transfer the money from the bank accounts to cover the annual leave payments, commission and the mobile phone guarantee that he had agreed to and authorised for me to be paid. 77
[51] After cross-examination the Applicant’s account of the meeting on 13 January 2014 remained intact notwithstanding that Mr Zhang’s account of the meeting was properly put to her in a Brown v Dunn 79 sense during cross-examination.
[52] Mr Zhang also presented as a credible and confident witness. He is a direct man. He has been in business for many years both here and abroad. His evidence in chief was also consistent with his witness statement. However, it is clear that Mr Zhang was mistaken in his belief that he needed the Applicant to go to the bank to change signatories. Mr Zhang was already a signatory to the relevant account. Both he and the Applicant had been signatories since 20 July 2011.
[53] Under cross-examination Mr Zhang consistently denied that he had authorised the Transfers. However, he seemed to concede that he had agreed with the Applicant the quantum of amounts to be paid to her by way of annual leave, 80 commissions81 and the phone guarantee. The agreement on quantum in his mind did not equate to an agreement that the Applicant could pay herself these amounts. However, the Applicant may have thought otherwise. It is possible that there was a genuine misunderstanding as between the Applicant and Mr Zhang.
[54] Text messages on 15 January 2014 also deal with the issue of authorisation. However, each of the messages accord with the different accounts of the evidence given by Mr Zhang and the Applicant. These differences are consistent with there being a genuine misunderstanding as between the Applicant and Mr Zhang. The text messages read as follows:
(a) 9.09am - From Mr Zhang to Applicant: “Dear Anna ... I am very disappointed that you did not come in to the office, you did not answer my call either. As I told you very clearly on 13/01/14, I must take back the right of the bank payment of Round Scaffolding, you cannot control it and refuse to go to the bank with me! If you do not call my Chinese mobile phone .... before 10.00am today I have to ask help from the lawyer of Round Scaffolding.”
(b) 9.37am - From Mr Zhang to Applicant: “...Please do not delay and waste my time, I already asked our lawyers advice: the issue of account bank changing is very urgent thing! You cannot delay this issue at any reason or excuse!”
(c) 9.41am - From Applicant to Mr Zhang: “...What you said in your text message is totally not true. This is the first time you said you want to take back the right of the Bank payment for Round Scaffolding. You are the director, I will not touch the account from now on...”
[55] There is no doubt that the issues of annual leave, commissions and the phone guarantee were discussed on 13 January 2014. It was a heated and emotional meeting. In all the circumstances it seems, more likely than not, that the Applicant and Mr Zhang left the meeting with different understandings of what was agreed. The Applicant thought she had authority to make the Transfers. Mr Zhang thought there was agreement on the quantum of the amounts to be paid and an understanding that he would take over the bank accounts.
[56] Considering all the evidence before the Commission, the Commission is not satisfied that from the Respondent’s position the Applicant was authorised to make the Transfers on 14 February 2014. However, the Commission is satisfied that the Applicant thought she was so authorised.
[57] What this means is that, when the Applicant made the Transfers on 14 January 2014 she was under a (mistaken) belief that she was authorised to do so. Put another way the Applicant was not, in her mind, disobeying any direction from Mr Zhang. She did not have a guilty mind. She was not being disobedient.
[58] Consequently, the Commission finds there was no valid reason for the dismissal.
Notification of the valid reason - s.387(b)
[59] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made, 82 in explicit terms83 and in plain and clear terms.84
[60] In the present matter, because the text message that terminated the employment relationship and the letter that followed did not contain a valid reason for termination at the time that they were issued the Commission finds the Applicant was not notified of the reason for the dismissal.
Opportunity to respond - s.387(c)
[61] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. 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. 85
[62] The Applicant’s employment was terminated by text message while she was on personal leave. Consequently, the Commission finds the Applicant was not given an opportunity to respond to the reason for the dismissal.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[63] 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.
[64] In the present matter there was no meeting in advance of the dismissal. It necessarily follows (and the Commission so finds) the Respondent did not unreasonably refuse to allow the Applicant to have a support person present at discussions relating to the dismissal.
Warnings regarding unsatisfactory performance - s.387(e)
[65] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employer about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct. 86
[66] The Applicant was not fired for unsatisfactory performance. Accordingly, this criterion is not relevant.
Impact of the size of the Respondent on procedures followed - s.387(f)
[67] The size of the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.
[68] It is clear in this matter (and the Commission so finds) that the size of the employer’s enterprise did impact on the procedures followed in effecting the dismissal. Everything about the termination, the valid reasons initially advanced and the procedure whereby the Applicant was terminated by text message while on personal leave, left a great deal to be desired. It was poorly executed at every stage by Mr Zhang; a foreign national, a small business owner in Australia who was clearly unfamiliar with Australian employment laws.
Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)
[69] The absence of dedicated human resource management or expertise in the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.
[70] For the same reasons as set out above in relation to s.387(f), the Commission finds the absence of any such management or expertise did impact on the procedures followed by the Respondent in effecting the dismissal.
Other relevant matters - s.387(h)
[71] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. In the present matter no substantive submissions were made about matters the Commission should consider relevant to the determination of whether the dismissal of the Applicant was harsh, unjust or unreasonable. Consequently, the Commission does not consider any other matters to be relevant.
Conclusion
[72] Having considered each of the matters specified in s.387, the Commission is satisfied the dismissal of the Applicant was harsh, unjust or unreasonable. Accordingly, the Commission finds the Applicant’s dismissal was unfair.
Remedy
[73] Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation.
[74] The Commission has already dealt with the issues at s.390(1)(a)–(b) above. The Commission is satisfied the Applicant was protected from unfair dismissal pursuant to s.382 of the Act and the Applicant was dismissed unfairly. Accordingly, the Commission is required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if the Commission is satisfied such an order is appropriate in all the circumstances.
Reinstatement
[75] Noting that the Applicant was the sole employee at the time of the dismissal and that the Respondent is a small business employer, it was common ground between the parties that reinstatement would be inappropriate. 87 Regardless of the remedy sought by the Applicant, s.390 of the Act requires the Commission to first determine whether reinstatement is appropriate before it may consider an order for compensation. For the reasons advanced jointly by the parties the Commission is satisfied that reinstatement is inappropriate.
Compensation
[76] Section 390(3)(b) provides the Commission may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.
[77] The Applicant submits that an order for compensation is appropriate in all the circumstances of this case because had the termination not occurred she would have remained in employ for at least 6 months 88 (i.e. through until 14 August 2014). However, counsel for the Applicant conceded that, if Mr Zhang’s evidence was preferred about the lack of authorisation for the Transfers and that he discovered the same on 16 January 2014 then, in all likelihood the employment would have not lasted for more than 1 day after 15 January 2014.89
[78] The Respondent submits that if an order for compensation is made then because of
a) Mr Zhang’s dissatisfaction with the Applicant;
b) the fact that the Respondent had been losing money for three years straight (despite the Applicant being responsible for its sales and marketing);
in all the circumstances the employment would not have gone beyond the stated end date of the contract (being 30 June 2014). 90
[79] The Commission specifically invited the Respondent’s solicitor to consider whether the employment would have ended earlier than 30 June 2014 (i.e. soon after 15 January 2014 when Mr Zhang discovered the Transfers). However, the Respondent did not make any submission on that point. 91
[80] Being satisfied that the Applicant was unfairly dismissed while on personal leave, it ought follow that the Commission should order that the payment of compensation is appropriate. In the factual circumstances of the present matter it would be incongruous with the scheme of the FW Act that the Applicant not be compensated for what she has experienced.
[81] The Commission is satisfied that an order for compensation is appropriate in all the circumstances of this case.
[82] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered.
[83] The Commission will now consider each of the criteria in s.392 of the Act.
Remuneration that would have been received: s.392(2)(c)
[84] The Applicant’s remuneration with the Respondent was $35,880.
[85] The Commission should now determine the period of time the Applicant would have remained employed by the Respondent, or would have likely remained employed with the Respondent, had she not been dismissed.
When were the Transfers discovered?
[86] Having regard to the finding above that Mr Zhang did not leave the meeting on 13 January 2014 with an understanding that he had authorised the Transfers, it must follow that from his perspective, the Transfers were unauthorised. It must further follow that when he discovered the Transfers he would likely have terminated the Applicant’s employment. At that time he would have had a reasonable belief about the Applicant’s misconduct (from his perspective). This would have provided reasonable grounds that the Applicant’s conduct in effecting the Transfers was conduct sufficiently serious to justify dismissal. Dismissal at this point would have been consistent with the Small Business Fair Dismissal Code.
[87] Therefore, it is necessary to establish when the Respondent became aware of the Transfers.
[88] The Respondent says the Transfers were discovered on the morning of 16 January 2014. 92 However, from the exchange of correspondence between the parties,93 it is noted that:
(a) on Wednesday, 29 January 2014 the Respondent’s lawyers wrote to the Applicant’s lawyers about the issues in dispute and made no mention of the $8,000 transfer;
(b) on Friday, 31 January 2014 the Respondent’s lawyers wrote to the Applicant’s lawyers about the issues in dispute and made no mention of the $8,000 transfer. They further wrote “… our client is currently investigating the company records and bank accounts to look for any evidence of impropriety by [the Applicant], and reserves all rights …”
(c) on Friday, 7 February 2014 the Respondent first complained about the Transfers in correspondence from the Respondent’s lawyers to the Applicant’s legal representative on 7 February 2014. On that date the Respondent’s lawyers wrote,
“our client has instructed us that examination of the company’s bank records reveals [the Transfers]…” and “unless [the Applicant] provides a full explanation of her actions … regarding the $8,000, … the matter will be handed to the police.”
[89] Having regard to the above analysis of the correspondence between the parties, the Commission is not satisfied that the Transfers were discovered on the morning of 16 January 2014 when Mr Zhang went to the bank and made himself the sole signatory on the Respondent’s account. It is more likely than not that the Transfers were not discovered until the week ending Friday, 7 February 2014.
[90] At that time the Respondent would have formed the view that the Applicant had made unauthorised Transfers. Having regard to the evidence of Mr Zhang that would have been a reasonable belief on his behalf and it would have meant he would most likely have dismissed the Applicant from her employment at that time.
[91] In these circumstances the Commission is entitled to find that the Applicant would have continued to be employed by the Respondent until around 7 February 2014 had she not been dismissed (i.e. for a further 3 weeks).
[92] But, that is not what the Respondent submitted.
[93] The Respondent’s unambiguous submission was that, if compensation is to be awarded, the Commission should regard the employment as likely having continued through until 30 June 2014. 94 Therefore, although the Commission would otherwise have found that the employment would have continued only through until around 7 February 2014, the Commission finds that, for the reasons advanced by the Respondent, the employment would have lasted until 30 June 2014 (i.e. 19 weeks).
Remuneration earned: s.392(2)(e)
[94] It is common ground between the parties that the Applicant was paid through until 30 January 2014. This amount must be deducted from the compensation to be ordered. No other income has been earned by the Applicant. Accordingly, the Applicant’s maximum loss in the period between 30 January 2014 and 30 June 2014 is 5 months remuneration (i.e. $14,950).
Income likely to be earned: s.392(2)(f)
[95] This criterion is not relevant because 30 June has already passed by the date of this decision.
Other matters: s.392(2)(g)
[96] The Commission finds it is not appropriate in the circumstances that a contingency should be applied.
Viability: s.392(2)(a)
[97] Although it was submitted from the bar table that the Respondent has lost money for 3 years 95, there was no evidence about the Respondent’s viability. Consequently, the Commission finds an order for compensation in the amount proposed will not affect the viability of the Respondent’s enterprise.
Length of service: section (s.392(2)(b))
[98] The Commission finds that the Applicant’s period of service with the Respondent, being 2 ½ years, should not affect the amount of compensation to be ordered. It is relatively short service.
Mitigating efforts: s.392(2)(b)
[99] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal the Commission should take into account whether the Applicant acted reasonably in the circumstances. 96 The only evidence before the Commission, that went uncontested, is that she has been actively looking for work without success.97
[100] The Commission finds that the Applicant has made efforts to mitigate her loss suffered as a result of the dismissal.
Misconduct: s.392(3)
[101] The Commission has not found any misconduct by the Applicant that contributed to the dismissal. Therefore, no discount is to be applied to the amount to be awarded. However, it is to be noted that the existence of misconduct is not what is required under the Small Business Fair Dismissal Code. All the Respondent has to establish is a reasonable basis for its belief. Mr Zhang would have had that basis on around 7 February 2014.
Shock, Distress: s.392(4)
[102] The Commission notes that the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation cap: s.392(5)
[103] The Commission must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
[104] The high income threshold immediately prior to the dismissal was $129,300.
[105] The amount the Applicant would have earned, or to which the Applicant was entitled, for the 26 week period immediately prior to the dismissal was ½ of $35,880, i.e. $17,940.
[106] The amount of compensation the Commission will order ($14,950) does not exceed the compensation cap.
Payment by instalments: s.393
[107] There being no evidence that an award of compensation will affect the viability of the Respondent, the Commission will not order the Respondent to pay to the Applicant by instalments.
Conclusion
[108] The Commission is satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and a remedy of compensation in the amount of $14,950 is appropriate.
[109] An order will be issued with this decision.
COMMISSIONER
Appearances:
Ms D Olsson of counsel for the Applicant.
Mr V Tse and Mr J Finnigan for the Respondent.
Hearing Details:
2014.
2 June.
Melbourne
1 Warrell v FWC [2013] FCA 291.
2 Exhibit “A2”, at [1]-[2], Exhibit “R2”, at [5].
3 Exhibit “A2” at [4], Exhibit “R2” at [1]-[3].
4 Exhibit “A2” at [5], Exhibit “R2” at [2].
5 Exhibit “A2” at [6].
6 Exhibit “R2” at [6].
7 Exhibit “A2” at [7], Exhibit “R2” at [6].
8 Exhibit “A5”.
9 Exhibit “R2” at [6].
10 Exhibit “A2” at [7].
11 PN293-296.
12 Exhibit “A2” at [8].
13 Exhibit “R2” at [12].
14 Exhibit “A2” at [18]-[19], Exhibit “R2” annexure C.
15 Exhibit “A2” at [21], Exhibit “R2” at [9].
16 Exhibit “A2” at [28], Exhibit “R2” at [12].
17 Exhibit “A2” at [27].
18 Exhibit “A2” at [29], Exhibit “R2” at [13].
19 Exhibit “A2” at [31], Exhibit “R2” at [14] and attachment C.
20 Exhibit “R2” at [12].
21 Exhibit “A4”, attachment HW1.
22 Exhibit “R2” at annexure C and Exhibit “A2” at [35]-[43].
23 Exhibit “A2” at 44.
24 PN1355
25 PN2372-2376.
26 Sayer v Melsteel[2011] FWAFB 7498.
27 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.
28 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.
29 Id.
30 Exhibit “A2” at 21.
31 Exhibit “A2” at 23.
32 PN210.
33 Exhibit “A2” at 24.
34 PN599-602.
35 PN242.
36 PN248.
37 PN230.
38 PN230.
39 Exhibit “A2” at 25.
40 Exhibit “A2” at 27.
41 PN685-688.
42 Exhibit “A3” at 38.
43 Annexure HW9 to A2.
44 Exhibit “A4” at 1 and attachment HW1.
45 Exhibit “A2” at 44.
46 Exhibit “R2” at 7.
47 Exhibit “R2” at 10.
48 PN1313.
49 PN1319.
50 PN1321, PN1806.
51 PN1343.
52 PN1549.
53 PN1570-1573.
54 PN1591-1599.
55 PN1954.
56 PN1525.
57 PN1666-1667, PN1751.
58 PN1212.
59 PN1699, PN1714.
60 PN1298-1307.
61 PN1352-1355.
62 PN2188-2213.
63 PN2220-2225.
64 PN1609-1615.
65 Exhibit R3.
66 Exhibit R4.
67 PN2252.
68 PN1667.
69 PN1699, 1714.
70 PN1666-1667, PN1751.
71 PN90.
72 PN88.
73 Exhibit “A2”, para 23.
74 Exhibit “A2”, para 24.
75 Exhibit “R2”, para 10.
76 Exhibit “A3”, para 28.
77 Exhibit “A3”, para 29.
78 PN222-230.
79 (1893) 6 R. 67.
80 PN1617.
81 PN1591.
82 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].
83 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
84 Previsic v Australian Quarantine Inspection Services Print Q3730.
85 RMIT v Asher (2010) 194 IR 1, 14-15.
86 Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237.
87 PN2412.
88 Further submissions filed by the Applicant on 3 June 2014.
89 PN2343.
90 PN2419.
91 PN2426.
92 PN1352-1355.
93 Exhibit “R2”, annexure G.
94 PN2420.
95 PN2414.
96 Biviano v Suji Kim Collection PR915963 at [34].
97 Exhibit “A2”, para 55.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR554213>
0
7
0