Ms Julie Baker v KVD Resort Management Group P/L ATF Connolly Family Trust T/A Great Eastern Motor Inn

[2014] FWC 6374

[2014] FWC 6374 [Note: An appeal pursuant to s.604 (C2014/1840) was lodged against this decision - refer to Full Bench decision dated 16 October 2014 [[2014] FWC 7243] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Ms Julie Baker
v
KVD Resort Management Group P/L ATF Connolly Family Trust T/A Great Eastern Motor Inn
(U2014/3925)

COMMISSIONER JOHNS MELBOURNE, 12 SEPTEMBER 2014

Application for Relief of Unfair Dismissal - termination at the initiative of the employer - valid reason - alleged downturn in performance of the business - requirement for additional evidence about remedy.

Introduction

[1] This decision arises out of an application made by Julie Baker (Applicant) for a remedy for unfair dismissal against KVD Resort Management Group Pty Ltd (trading as Great Eastern Motor Inn) (Respondent/Employer).

[2] Ms Baker’s employment as a housekeeper at the Great Eastern Motor Inn ceased on 8 January 2014. There is a dispute about whether the termination of employment was at the initiative of the Employer. Ms Baker says there was a dismissal and contests it. Having made an application under s.394 of the Fair Work Act (FW Act) Ms Baker says the termination of her employment was unfair. She seeks reinstatement. 1

[3] A Determinative Conference was conducted on 8 July 2014. At that the Determinative Conference:

a) the Applicant represented herself and gave evidence on her own behalf;

b) the Respondent, represented by Irving Warren, called evidence from its owner Derek Connolly; and

c) the Commission also received into evidence a witness statement by Kathryn Connolly and Statutory Declarations from Victoria Hudson and Tanya Stubbins. However, the Respondent decided not to call Ms Connolly, Ms Hudson or Ms Stubbins to give evidence. Consequently, the Applicant was denied the opportunity to cross examine these witnesses and, therefore, the Commission gives little weight to their evidence.

[4] For the detailed reasons set out below, the Commission, as presently constituted, finds that Ms Baker was unfairly dismissed within the meaning of the FW Act, and that compensation is an appropriate remedy.

Background

[5] The following facts were either common ground between the parties or not contested:

a) In August 2011 the Applicant commenced employment with the Respondent as a housekeeper; 2

b) The Applicant worked as a casual employee between 15 and 30 hours per week on a regular and systematic basis 3 usually Monday to Friday4. She also worked weekends from time to time;5

c) Housekeeping duties involved cleaning and servicing rooms, notifying the manager of any maintenance issues, unloading linen trolleys, maintaining equipment and restocking the cleaner’s trolley; 6

d) During 2013 the Applicant also worked as a receptionist. In that role her duties included checking in customers, taking reservations, taking all types of payments including invoicing accounts, completing a daily balance on the computer system and the EFTPOS machine and dealing with customer complaints or issues; 7

e) There were no performance issues with the Applicant’s work; 8

f) Between 9 - 19 January 2014 Applicant had leave approved to go on a holiday; 9

g) Prior to taking leave the Applicant anticipated that she would work on each of 6, 7 and 8 January 2014;

h) On Sunday, 5 January 2014 Mr Connolly advise the Applicant by text message that she was not required to work on the three days prior to her holiday commencing; 10

i) In response the Applicant called Mr Connolly and the following exchange occurred:

Ms Baker:	“Why do I have two had three days off when there are enough room to clean?”
Mr Connolly:	“The motel is quiet at the moment and you are not required.”
Ms Baker:	“I don't understand how you can say it is that quiet on the Monday morning and why am I the only one to have hours cut? I need the money and this isn’t fair.”
Mr Connolly:	“I’m telling you Julie the motel is quiet and you are not required to work this week.”

j) On Monday, 6 January 2014 housekeeping duties were performed by Victoria Hudson and Tanya Stubbins. Approximately nine hours of housekeeping was undertaken on that day. 11

k) On Tuesday, 7 January 2014 the Applicant sent an e-mail to Mr Connolly. The Applicant wrote:

I refer to my plan holidays commencing Thursday this week, 9 January 2014.

I note I was rostered to work on Monday, Tuesday and Wednesday this week but on Sunday you sent me a text message informing me that I was not required to the next three days and to enjoy my holiday. When I ring you on Sunday you told me over the phone that I was not needed because the motel is quiet.

In the past and the motel is quiet, any reduced hours of work have been shared between staff, such as Tanya, Vicki and myself receive an equal (though lessor (sic)) amount of hours in the quiet period/s. This does not appear to have occurred this week, and I understand that not only has the usual shared reduction not occurred, but in fact to new or different staff were employed to do the work, so that I'm the only person with reduced hours.

Please could you clarify if I will be returning to my regular and systematic hours of casual employment when I return from my holidays on 19 January 2014. 12

l) On Wednesday, 8 January 2014 Mr Connolly briefly responded as follows:

Thank you for your note, I would suggest you look for alternative work. 13

m) On Thursday, 9 January 2014 the Applicant commenced her holiday as planned. She returned as planned on 19 January 2014.

n) On Monday, 20 January 2014 the Applicant filed an application for an unfair dismissal remedy.

Protection from Unfair Dismissal

[6] An order for reinstatement or compensation may only be issued where the Commission is satisfied the Applicant was protected from unfair dismissal at the time of the dismissal.

[7] Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal.

[8] There is no dispute the Applicant has completed the minimum employment period and her annual rate of earnings is less than the high income threshold. An earlier objection by the Respondent that the Applicant had not completed the minimum employment period by reason of her causal employment was not maintained at the hearing. 14 Consequently, the Commission is satisfied the Applicant was protected from unfair dismissal.

[9] The Commission will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the FW Act.

Was the dismissal unfair?

[10] 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 FW 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?

[11] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the FW Act. Section 386 of the FW Act provides that:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[12] The Applicant treated the e-mail sent by Mr Connolly on 8 January 2014 as having terminated her employment. 15 For her it was in unequivocal terms:

“Thank you for your note, I would suggest you look for alternative work.” 16

[13] In the hearing the Applicant said:

“Any reasonable person would know that means dismissal. 17

...being put off for three days ... to me it was a [pretty] obvious thing that I wasn't required for some reason or another and there was obviously enough rooms to clean on the Monday but he didn't want me to do it for whatever reason. 18

I have spoken with many people just to clarify, make sure I wasn't making anything up in my own brain ... and they all told me the same thing, "Julie, I believe you've been dismissed." 19

[14] Mr Connolly denies that he intended to terminate Ms Baker's employment. 20 He says that:

“Looking forward I felt the occupancy level for the motel would remain low and my suggestion to look for alternative work was intended to make Julie aware that the hours available in the coming months may not be enough to sustain her and her family, as unfortunate as this may be.” 21

[15] In the hearing the following exchange occurred between the Commissioner and Mr Connolly:

“THE COMMISSIONER: Yes, but if the girls were happy to share it amongst the three of them, like they had in the past, why couldn't that continue?

MR CONNOLLY: Well, Julie was happy for that to happen because Julie was the last person to be employed. The other two had been with me – one for – one's been at the motel for under eight years. The other one's been under four years; Julie being for two; not that there's an unfairness to making sure that people that have been there for a longer period of time get more hours, but it reaches a point, "Look, I'm not sure whether I'm going to be able to give you those hours even cut three ways." If you work it out, prior to Julie on her 10 days' holiday she was working 20 hours, 22 hours, Commissioner, and I wasn't able to give her those hours when she returned. When she came back on the 19th, if she was going to contact me, I would've said to her, "I'm not sure whether I'm going to be able to give you those hours," and I could predict that at that point in time and the suggestion via email was, "Try to get another job. Find alternative employment." Now, if Julie had've come back, I would've said, "Look, you can fit into the roster but I'm just letting you know there won't be sufficient - - -" 22

Yes, I should've elaborated on that email. I should've said, "Look, I'm terribly sorry, Julie. I'm not sure whether or not there's going to be sufficient hours. We're going through one of the lowest occupancy times in 10 years in Gympie." I should've elaborated all of that but it was a very quick email and I honestly believe that in the past Julie's never hesitated to contact me, walk over from her property which is only a 30-metre work or phone me or come and see me and then I would've discussed it with her. I was waiting for her to come. I naturally assumed that she would come based on what she's done in the past. 23

[16] In her final submissions the Applicant says:

“There can be no doubt that I was dismissed because I asked a direct question about my continuing employment and the reply was “I suggest you look for alternative work”. Any reasonable person would consider that to be a dismissal. 24

[17] In its final submissions the Respondent says:

“It is the position of the Respondent at the Applicant was not dismiss but rather was advised that there was a downturn in business, which meant that there was no work immediately available for the casually employed [Applicant]. 25

We submit that cessation of employment in this matter is shown to be as much the responsibility of the employee as it was that of the employer, when all the circumstances are objectively examined. An e-mail sent by the employer was open to interpretation but did not categorically dismissed employee, rather it indicated the employee should seek other employment. Employee knew that the employer had declining business and that the future prospects were not bright. However, the employee chose not to clarify the position but rather to consider herself as having been dismissed on to claim compensation for the dismissal. 26

To reactivate their employment, in the casual employee returning from two weeks of leave, she only had to contact employer and after the work is available. Any prudent casual employee could do that, whether or not it was an established custom or practice. Have initiated a claim for the boo-boos the lease is compensation, the employer could hardly expect employer, who had expected her to return to work, to negotiate payment with her. 27

Had Ms Baker consulted Mr Connolly and asked a simple question ‘have I been dismissed?’, The whole matter could have been clarified. 28

Consideration

[18] The characterisation that the Respondent seeks to put on the phrase “Thank you for your note, I would suggest you look for alternative work” (Contested Phrase) is that it was intended to convey a suggestion that the Applicant find other work to make up for the expected loss of some (but not all) hours at the Motor Inn. In this sense the Respondent contends that “alternative work” was intended to convey “additional work”. The Respondent contends that, to the extent that the Applicant read “alternative work”, as an intention to end her employment, there was a misunderstanding on her behalf.

[19] In giving evidence about his intention behind the Contested Phrase Mr Connolly presented as a less than impressive witness. Generally he prevaricated in his evidence. He resisted responding directly to even the most basic of questions that demanded a simple answer. Overall the Commission, as presently constituted, formed the view that Mr Connolly was attempting to put a “spin” on the Contested Phrase to suit his purpose.

[20] It was a spin that sought to deny the ordinary meaning of the words contained in the Contested Phrase. It had all the hallmarks of a recent invention concocted with the assistance of a professional adviser. To support this view, one need only review the Form F3 submitted by the Respondent. In the Form F3 Mr Connolly denied that the Applicant had been dismissed. However, the basis for that assertion was that the “...employee was a casual, employed each engagement.” It was the Applicant’s casual employment that caused the Respondent to maintain its jurisdictional objection up to the day of the determinative conference. The truth is Mr Connolly thought that the Applicant’s status as a casual meant that her employment was at his beck and call. When he sent the email on 8 January 2014 he had every intention of letting the Applicant go. He had no appreciation that the regular and systematic nature of Ms Baker’s employment meant that she was protected from unfair dismissal.

[21] It is not surprising that the Applicant understood the clear intention of Mr Connolly to let her go. Any fair minded person receiving an email containing the Contested Phrase would have understood that to be the case too. The past practice had been to share the shifts around when there was a downturn. There was a downturn and the past practice was not being adopted. Only the Applicant bore the brunt of it. When she sought clarity about her treatment she was told to “look for alternative work”. She was not being told to find some additional work to supplement her loss of shifts (which at that point had been a loss of shifts over a number of days).

[22] There is further reason not to accept Mr Connolly’s interpretation of the Contested Phrase. If, as he says, it lead to the Applicant having a misunderstanding, then once the Applicant returned from her planned holiday and, the day after, submitted an unfair dismissal application it must have been apparent to Mr Connolly (on his version of events) that the Applicant was mistaken in understanding that he had terminated her employment. However, despite asserting that the Applicant was “a reliable and competent employee” he did not call her to clear up the misunderstanding. If he was genuine in his assertion that the Contested Phrase was not intended to communicate termination of employment he would have sorted out the misunderstanding on 20 February 2014. However, he chose not to do so.

[23] Consequently, the Commission finds that the Applicant was terminated on the employer’s initiative.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[24] It is common ground between the parties, and the Commission finds, that the Respondent is a “small business employer” as defined at s.23 of the FW Act.

[25] A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (Code).

[26] However, having regard to the fact that the Respondent denies that it dismissed the Applicant it cannot now also assert that it complied with the Code.

[27] Therefore, in all the circumstances, the Commission is satisfied the dismissal of the Applicant was not consistent with the Code.

[28] As the Commission has found that the dismissal of the Applicant was not consistent with the Code, it now proceeds to consider s.387 of the FW Act.

Was the dismissal a genuine redundancy?

[29] The Respondent does not submit the Commission should dismiss the application because the dismissal was a case of genuine redundancy. Accordingly s.389 of the FW Act is not relevant in the present matter.

[30] Consequently, the Commission finds that the dismissal was not a case of genuine redundancy within the meaning of s.389 of the FW Act.

Harsh, unjust or unreasonable

[31] Having been satisfied of each of s.385(a),(c)-(d) of the FW Act, the Commission must consider whether the Commission 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 FW Act:

“387 Criteria for considering harshness etc.

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

[32] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd 29 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.”

[33] The Commission is under a duty to consider each of these criteria in reaching its conclusion. 30

[34] The Applicant submits the dismissal was harsh, unjust or unreasonable because there was no valid reason for dismissal. The Respondent did not raise any performance issues with her or give her any warnings. She says that she is a hardworking employee and she did not engage in any conduct warranting dismissal.

[35] The Respondent submits the dismissal was not harsh, unjust or unreasonable because it was experiencing a downturn in business. It says that by its email to the Applicant on 8 January 2014 it was merely letting the Applicant know that she may not have the same hours when she returned from leave. It maintains that had the Applicant made a telephone call to the Respondent when she returned from leave, she would have been given any available work. As has been stated above the Commission, as presently constituted, does not accept the interpretation that Mr Connelly seeks to put on the Contested Phrase.

[36] The Commission will now consider each of the criteria at s.387 of the FW Act separately.

Valid reason - s.387(a)

[37] 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. 31 The reasons should be “sound, defensible and well founded”32 and should not be “capricious, fanciful, spiteful or prejudiced.”33

[38] Having denied that there was a termination, it is difficult for the Respondent to then assert there was a valid reason for it. However, if there was a valid reason it can only have been associated with the Respondent experiencing a downturn in business. That was the reason given for cutting the Applicant’s shifts in the days before her planned annual leave.

[39] To test the validity of the downturn in business reason, it is important in this matter to consider the occupancy rate of the Motor Inn and the hours worked by relevant employees.

Week ending	Motor Inn occupancy (per mth)	Baker’s hours	Hudson’s hours	Stubbins’ hours	Other employee’s hours	Total hours
5 July 2013	62.56%	Nil	26.75	29.5	56.25
12 July 2013	17.5	20.25	26.5	64.25
19 July 2013	27	21.25	24	72.25
26 July 2013	25.5	18	26.5	70
2 August 2013	66.37%	25.25	18.75	29	73
9 August 2013	22.75	11.5	21.25	55.5
16 August 2013	21.25	21.875	25.25	68.375
23 August 2013	32.5	21.875	29	83.375
30 August 2013	17.75	21.875	26.25	65.875
6 September 2013	50.91%	21.5	19.25	19	59.75
13 September 2013	20.5	15	18.25	53.75
20 September 2013	32.5	17	19	68.5
27 September 2013	18	21.25	31.25	70.5
4 October 2013	65.49%	24.25	20.75	24.75	69.75
11 October 2013	Nil	19.75	34.5	54.25
18 October 2013	33	25.25	25.5	83.75
25 October 2013	34.25	24.75	27.5	86.5
1 November 2013	50.51%	32	27	23.75	82.75
8 November 2013	16.75	14.5	23	54.25
15 November 2013	9.25	15.5	22.25	47
22 November 2013	20.75	14.25	27.25	62.25
29 November 2013	18.5	17.5	21	57
6 December 2013	52.49%	20.75	20.25	24.25	65.25
13 December 2013	22.75	14.25	27.5	64.5
20 December 2013	17	17.5	19.5	54
27 December 2013	14	Nil	15	29
3 January 2014	49.17%	30.75	18.25	34.5	83.5
Average - July to January	47.42%	21.33	18.67	25	N/A	65
10 January 2014	Nil	28	35.25	4.5	67.75
17 January 2014	Nil	21.25	31	11	63.25
24 January 2014	Nil	18.25	30.25	20.5	69
31 January 2014	Nil	17.5	22	24	63.5
7 February 2014	53.25%	Nil	22.5	25.5	4.5	52.5
14 February 2014	Nil	17.25	25.75	11.5	54.5
21 February 2014	Nil	21.5	30.75	12	64.25
28 February 2014	Nil	23.75	27.25	19.25	70.25
7 March 2014	48%	Nil	22.25	24.75	Nil	47
14 March 2014	Nil	27	28.75	5.75	61.5
21 March 2014	Nil	14	27.25	18.25	59.5
28 March 2014	Nil	23.25	30.5	33.75	87.5
4 April 2014	54.75%	Nil	29.25	Nil	29	58.25
11 April 2014	Nil	27.75	25	21	73.75
18 April 2014	Nil	29	38.5	29	96.5
25 April 2014	Nil	16	12.5	20.5	49
2 May 2014	55.03%	Nil	18.25	31.25	12.75	62.25
9 May 2014	Nil	16.75	21.75	15.75	54.25
16 May 2014	Nil	19.5	23.75	20.25	63.5
23 May 2014	Nil	18.25	29.5	21.5	69.25
30 May 2014	Nil	14.75	24.75	4.75	44.25
6 June 2014	51.92%	Nil	19.75	28	5.5	53.25
13 June 2014	Nil	21.5	16.5	19	57
20 June 2014	Nil	25.25	31.5	20	76.75
27 June 2014	Nil	15.25	26	11.5	52.75
Average	55.04%	0.00 (Jan - Jun)	19.84	25.44	15.42 (Jan - Jun)	62.87

[40] The above table demonstrates the following relationship (or more accurately, lack of obvious relationship) between occupancy rates and hours:

Month 34	Occupancy Rate	Change in occupancy rate (%)	Total hours worked that month	Change in total hours (%)
July 2013	62.56%	-	262.75	-
August 2013	66.37%	+ 3.81%	346.125 (4 weeks = 276.90)	+ 31.73%
September 2013	50.91%	- 15.46%	252.5	- 27.05%
October 2013	65.49%	+ 14.58%	294.25	+ 16.53%
November 2013	50.51%	- $14.98%	303.25 (4 weeks - 242.60)	+ 3.06%
December 2013	52.49%	+ 1.98%	212.75	- 29.84%
January 2014	49.17%	- 3.32%	347 (4 weeks = 277.60)	+ 63.10%
February 2014	53.25%	+ 4.08%	241.5	- 30.40%
March 2014	48%	- 5.25%	255.5	+ 5.80%
April 2014	54.75%	+ 6.75%	277.5	+ 8.61%
May 2014	55.03%	+ 0.28%	293.5 (4 weeks = 234.80)	+ 5.77%
June 2014	51.92%	- 3.11%	239.75	- 18.31%

[41] Over the 12 months to July 2014 the average occupancy rate was 55%. When the Applicant’s employment was terminated there had been a drop in occupancy rates in the two months previously (November and December). The figures for January 2014 were unknown, but Mr Connolly was pessimistic about them. His pessimism turned about to be valid. However, there had been a similar downturn in September 2013 only to have the occupancy figures pick up again significantly in October 2013.

[42] Over the 12 months to July 2014 the average number of hours worked was 255.70 per month. In assessing total hours worked, even when a reduction is applied in January 2014 to account for the five weeks instead of four weeks, the figures show that more hours were worked in January 2014 than in November and September when there were similar (albeit higher) occupancy rates. There is no obvious connection between the occupancy rates and hours worked.

[43] Further:

a) the first table demonstrates that when Ms Baker was employed the average occupancy rate was 47.42% and the average of total hours required was 65. After Ms Baker was terminated the average occupancy rate was 55.04% (i.e. an improvement) and the average of total hours required was 62.85. That is to say less hours were required to be worked after Ms Baker was terminated even though the occupancy rate improved;

b) the first table establishes that:

Period	Baker % of hours	Hudson % of hours	Stubbins % of hours	Other % of hours
Prior to termination	32.8%	28.7%	38.5%	0%
Post termination	0%	32.6%	42%	25.4%

c) the first table above gives support to Ms Baker’s claim that, when occupancy rates changed, any reduction in shifts were shared between her, Ms Hudson and Ms Stubbins;

d) the second table above suggests that following Ms Baker’s termination another employee was required to perform work. This is work that Ms Baker could otherwise have been performing. Even if this work fell on a weekend, it was Ms Baker’s evidence that although she preferred not to work weekends she was prepared to do so. 35

[44] In total then, the evidence about occupancy rates and hours worked does not support a conclusion that there was a valid reason for termination associated with a downturn in work.

[45] Consequently, the Commission finds that there was not a valid reason for the dismissal.

Notification of the valid reason - s.387(b)

[46] It necessarily follows from the fact that the Respondent’s primary defence was that it did not terminate the Applicant’s employment (a defence I have rejected), that the Applicant was not notified of a valid reason for the termination of her employment.

[47] The Commission finds the Applicant was not notified of the reason for the dismissal.

Opportunity to respond - s.387(c)

[48] It necessarily follows from the fact that the Respondent’s primary defence was that it did not terminate the Applicant’s employment (a defence I have rejected), that the Applicant was not provided with an opportunity to respond.

[49] 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)

[50] 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.

[51] It necessarily follows from the fact that the Respondent’s primary defence was that it did not terminate the Applicant’s employment (a defence I have rejected), that there was no support person for the Applicant. However, it also follows that she was not unreasonably refused one.

[52] The Commission 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)

[53] 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. 36

[54] It is common ground between the parties that the Applicant had received no warnings in relation to her performance.

[55] The Commission finds the Respondent did not warn the Applicant about their unsatisfactory performance before the dismissal.

Impact of the size of the Respondent on procedures followed - s.387(f)

[56] The size of the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.

[57] It is common ground in this matter that the Respondent was a small business. Mr Connolly was its controlling mind. Having regard to my finding that he terminated the employment of the Applicant through his inelegant email it follows that the Commission finds the size of the employer’s enterprise did impact on the procedures followed in effecting the dismissal.

Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

[58] 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.

[59] For the same reasons as in relation to s.387(f) the Commission finds the absence of any management or expertise did impact on the procedures followed by the Respondent in effecting the dismissal. No person skilled in human resources would have acted like Mr Connolly did.

Other relevant matters - s.387(h)

[60] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. It is not submitted that I should consider any other matters to be relevant to the determination of whether the dismissal of the Applicant was harsh, unjust or unreasonable. As such I do not do so.

Conclusion

[61] 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

[62] Section 390 of the FW Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation:

“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.

Note: Division 5 deals with procedural matters such as applications for remedies.”

[63] The Commission has already dealt with the issues at s.390(1)(a)–(b) above. The Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal pursuant to s.382 of the FW 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

[64] The Applicant seeks reinstatement (i.e. the primary remedy). Section 390 of the FW Act requires the Commission first determine whether reinstatement is appropriate before it may consider an order for compensation.

[65] In her first submission to the Commission dated 28 May 2014 37 the Applicant stated that the employment relationship had broken down. She did not think re-instatement was appropriate and sought compensation.

[66] During the hearing the Applicant stated that, if the Respondent were to share the hours amongst its three casual employees as it had done in the past, the Applicant would seek reinstatement.  38 The Respondent stated that it did not think reinstatement was inappropriate39 nor did it “have any hesitation in taking [the Applicant] back”.40

[67] The Applicant and Respondent filed final written submissions on 16 and 15 July 2014 respectively. In her final written submission the Applicant stated she hoped to be reinstated and compensated for lost income. 41 In its final written submissions the Respondent stated that if the Commission found the Applicant was dismissed, then “reinstatement would be a remedy”.42 It submitted that if the Commission orders reinstatement, it would not be appropriate to also order compensation for lost income.43 It did not expand further on this submission.

[68] On 29 July 2014, the Commission received from the Respondent an “Urgent Notification”. In summary, the notification stated that on 22 July 2014 the Applicant came to the Respondent’s premises and acted in a threatening manner towards Ms Hudson and accused her of various matters relating to the statutory declaration she filed in this unfair dismissal matter. It was asserted by the Respondent that the altercation between the Applicant and Ms Hudson was overheard by Ms Stubbins. The Respondent filed statutory declarations from Ms Hudson and Ms Stubbins to this effect. As a result, the Respondent withdrew its willingness to reinstate the Applicant.

[69] Also on 29 July 2014, the Applicant provided the following response to the “Urgent Notification”:

1. Yes Commissioner I would like to be reinstated if you find in my favour.

2. In regards to Ms Hudson’s most recent affidavit why would I go to the motel and have a go at her about a declaration that in the hearing Commissioner Johns states in PN977 “those statutory declarations will be given very little weight whatsoever.” And then continues to say in PN981 referring to the statutory declarations “My interpretation is that what they have said there is not the facts.” It makes no sense for me to go to the motel two weeks after the hearing to have a go at Ms Hudson about the declaration.

[70] Noting that the Applicant did not expressly deny that she went to the Respondent’s premises on 22 July 2014, on 4 September 2014 the Applicant was invited to provide her version of events.

[71] On 7 September 2014, the Applicant provided her response by email. She confirmed that:

“On the 22nd of July I tried calling Vicki twice unfortunately her phone doesn't have good reception and she didn't answer. So I went to the back fence of the motel and called out to Vicki who was my friend at the time. She didn't hear me so I walked in the back gate and went to see her to give her some money I owed her. I gave her the money and we chatted for about 2 or 3 minutes and then I left. Tanya at the time was in the next motel room. I did not threaten Vicki or Tanya at all.

Later that day and for a couple of days after, Vicki and I communicated mainly through text. We were discussing the trouble I had caused for her at work because I went there. After my visit to the motel she was called into the office for a meeting because Derek wasn't happy about my presence at the motel. She told me after this meeting that she felt her job was in jeopardy or at the very least she felt she was going to lose hours because of our friendship.

On the 25th of July, 3 days after the 'incident' I rang Vicki and we spoke for 21 minutes, that's not something most people would do after being threatened. During this conversation she was very upset because she felt she would lose her job if she didn't sign a declaration that Mr Irving had prepared. We ended the conversation with her telling me she wasn't going to sign another false declaration but I can only presume a lot more pressure was put on Vicki on the Monday to sign it, which she did.” 

Consideration

[72] In Regional Express Holdings Ltd T/A Rex Airlines 44 a Full Bench of Fair Work Australia considered what factors may be taken into account when considering if reinstatement is inappropriate under s.390(3)(a) of the FW Act:

“[26] Whenever an employer dismisses an employee for misconduct, assuming the employer is acting honestly, there is an implied loss of trust and confidence in the employee. If it is subsequently found that the termination was harsh, unjust or unreasonable it is appropriate to consider whether the relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of management witnesses. All of the circumstances should be taken into account. In this case there is a number of relevant matters. They include the fact that not all of the conduct alleged against the respondent has been proven, the respondent’s apparently unblemished record in the performance of his flying duties over a period of 14 years, the fact that the misconduct is not directly related to the performance of the respondent’s professional duties as a first officer and Rex’s failure to pursue any substantial disciplinary action against another pilot who, it is alleged, has been guilty of misconduct at least as serious as that of which the respondent was accused. The significance of the last consideration is that the pilot in question is still carrying out the full range of his duties, despite allegations of conduct of a kind which, in the respondent’s case, is said to have led to an irrevocable loss of trust and confidence. Assuming a positive approach on both sides we find there is a reasonable chance that the employment relationship can be restored with the necessary level of mutual trust.” 45

[73] In this matter, while the views of Mr Connolly should not be the sole reference point, weight should be placed on the fact that he is the owner of what is a small business in which he is entitled to be concerned that a small group of staff work harmoniously together. It would appear that Mr Connolly has lost confidence in the ability of Ms Baker to return to work at the Motor Inn. However, the Full Bench decision referred to above requires the Commission to consider all the circumstances. Not all these matters have been properly addressed by the parties.

[74] Further, the alleged events of 22 July 2014 are very much in dispute and absent a further hearing where, in particular, Ms Hudson gives evidence in chief and under cross-examination, the Commission cannot making any finding about what happened on that day. What happened on that day is relevant to the question of reinstatement.

[75] In the circumstances, therefore, the Commission will provide the parties with a further opportunity to be heard (in person) about whether an order of reinstatement is inappropriate.

Compensation

[76] If the Commission decides that reinstatement is in appropriate it must then consider whether compensation should be awarded.

[77] 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.

[78] However, in the present matter neither the Applicant nor the Respondent have tendered sufficient evidence nor made fulsome submissions that would assist the Commission to assess and determine the quantum of compensation.

[79] Section 392 of the FW 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:

“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.

Note: subsection 392(5) indexed to $66,500 from 1 July 2014

(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.”

[80] The method for calculating compensation under s.392 of the FW Act was dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 46 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket47 and Ellawala v Australian Postal Corporation48.

[81] The Commission, as presently constituted, will adopted the methodology utilised in Bowden in determining the amount of a payment of compensation after the parties have been provided with an opportunity to file additional evidence and make further submissions. In particular the Commission needs to better understand:

a) from the Applicant: all matters including, in particular, details of all remuneration earned by her in the six months following the termination of her employment on 8 January 2014 and the details of the efforts she made to mitigate her loss in those six months;

b) from the Respondent: all matters including, in particular, evidence about what affect (if any) an order for compensation will have on the viability of the Respondent’s enterprise and, if an order for compensation was made, what payment plan by instalments the Respondent submits is necessary.

Conclusion

[82] The Commission is satisfied that the Applicant was protected from unfair dismissal and that the dismissal was unfair.

[83] Further directions will now be issued for the filing and serving of additional evidence and submissions to assist the Commission determine the question of the remedy to be ordered. An Order for the attendance of Ms Hudson will also be issued.

COMMISSIONER JOHNS

Appearances:

Ms J Baker for herself.

Mr I Warren for the Respondent.

Hearing Details:

2014

8 July

Brisbane.

Final Submissions:

15 July 2014

Supplementary Urgent Submissions from the Respondent:

25 July 2014

Applicant’s Replies to Supplementary Urgent Submissions from the Respondent:

29 July 2014 and 7 September 2014

 1   PN579, Applicant’s final submissions filed 15 July 2014, Applicant’s response to Respondent’s Urgent Notification to the Commission dated 29 July 2014.

 2   Exhibit “A4”, para 3.

 3   Exhibit “A4”, para 4, PN115

 4   Exhibit “A4”, para 5.

 5   Exhibit “A4”, para, 5, PN301

 6   Exhibit “A4”, para 7.

 7   Exhibit “A4”, para 7.

 8   Exhibit “A4”, para 8 Exhibit “R2”, para 4, PN1050.

 9   Exhibit “A4”, para 9. Exhibit “R6”, para 1 and 2

 10   Exhibit “A4”, para 10,Exhibit “R6”, para 4

 11   PN482-486, Note PN494 also mentions “Jenny” having worked that day

 12   Exhibit “A5”.

 13   Exhibit “A5”.

 14   PN115

 15   Exhibit “A4”, para 16.

 16   Exhibit “A5”.

 17   PN210

 18   PN216

 19   PN272

 20   Exhibit “R2” para 4

 21   Exhibit “R6”, para 7.

 22   PN421-422

 23   PN428

 24   Applicant’s Final Submissions, para 1.

 25   Respondent’s Final Submissions, para 21.

 26   Respondent’s Final Submissions, para 11.

 27   Respondent’s Final Submissions, para 12.

 28   Respondent’s Final Submissions, para 31.

 29   [1995] HCA 24; (1995) 185 CLR 410 at 465.

 30   Sayer v Melsteel[2011] FWAFB 7498.

 31   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

 32   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.

 33   Id.

 34   August and November 2013 and January and May 2014 have 5 weeks ending during the month, the remainder have 4 weeks.

 35   Exhibit “A4”, para, 5.

 36   Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237.

 37   Exhibit “A1”, para 12

 38   PN573-579

 39   PN583

 40   PN581

 41   Applicant’s Final Submissions, page 3.

 42   Respondent’s Final Submissions, para 56

 43   Ibid, para 57

 44   [2010] FWAFB 8753.

 45 Ibid at [26].

 46   [2013] FWCFB 431.

 47 (1998) 88 IR 21.

 48   Print S5109.

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