Ms Lyndsey Hunter v Mary Brandon by Design Pty Ltd T/A MBBD
[2010] FWA 7777
•2 DECEMBER 2010
[2010] FWA 7777 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Lyndsey Hunter
v
Mary Brandon by Design Pty Ltd T/A MBBD.
(U2010/8013)
SENIOR DEPUTY PRESIDENT DRAKE | SYDNEY, 2 DECEMBER 2010 |
Termination of Employment.
[1] I heard this application on Wednesday, 4 August and Friday, 20 August 2010 in Sydney. The respondent’s final material was provided on 28 October 2010 and Ms Hunter provided further information on 5 November 2010.
[2] Ms Natasha Walls, solicitor, of Law Partners Solicitors and Barristers, appeared for Ms Lyndsey Hunter. Mr Peter Smart, with Ms Megan Dorrough, both solicitors, of Dorrough Smart Solicitors and Attorneys, appeared for the respondent.
[3] On 20 August 2010 I issued an order which amended the name of the respondent from Mary Brandon by Design T/A Mary Brandon by Design to Mary Brandon By Design Pty Limited trading as MBBD (MBBD). 1
[4] The preliminary issue for determination in this application is whether Ms Hunter’s employment was terminated at the initiative of Ms Mary Brandon, the principal of MBBD, or whether she abandoned her employment. For the purpose of considering this issue, I am required by the Fair Work Act 2009 (the Act) to consider the following provisions:
“Section 385
What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed...”
and,
“Section 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...”
[5] If I find that Ms Hunter’s employment was terminated on the initiative of MBBD, I am required to apply the following provision of the Act:
Section 387
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[6] For the purpose of considering remedy, if appropriate, the following provisions apply:
Section 390
“(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA 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) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA 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.
391 Remedy—reinstatement etc.
Section 391
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
Section 392
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), FWA 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 FWA considers relevant.”
[7] Ms Hunter commenced employment with MBBD on 24 June 2008. 2 Her salary upon commencement of her employment was $50,000.00 gross per annum excluding superannuation payments.3 When Ms Hunter’s employment with MBBD ceased on 1 April 2010 her salary was $60,000.00 plus superannuation paid through both MBBD and occasionally, Total Body Conditioning (TBC), another entity in which Mary Brandon had an interest.
[8] Ms Hunter gave evidence that in the two weeks leading up to 1 April 2010 she perceived that Ms Brandon and Ms Power, a Design Assistant, were engaged in a campaign to induce her to leave her employment with MBBD. 4 It was her evidence that Ms Brandon had engaged in this conduct towards other employees in the past.
[9] Ms Hunter’s evidence was that during her last week of employment the computer system had been experiencing problems and the system crashed on 30 March 2010. This was when Ms Hunter was required to complete the invoicing for the end of March. On the afternoon of 31 March 2010 a consultant came to the office to reinstall the necessary programs. Ms Hunter asked the consultant how to transfer information from the computer to a USB memory stick. 5 She then transferred some information from the computer to the memory stick and took it home with her when she left for work at approximately 4.45 pm that day. She felt very distressed as she left for work.6
[10] She stated that when she left work she also took a file from the office which contained documentation, including invoices, which related to contractors engaged by MBBD (the Contractors’ File). She said that she took the Contractors’ File because she had noticed that some of the invoices from herself to a related entity had been removed and she wanted to find out what had happened to them. She wanted to talk to her accountant about them. During cross-examination she gave evidence that she was unsure what the status of her employment would be the next day and she therefore wanted to examine the file in private and ascertain what had been removed. Although she was not in the habit of taking files home with her she had done so previously on an occasional basis. 7
[11] Ms Brandon said that she worked back until 9.30 pm or 9.45 pm on 31 March 2010. She said that she left the Contractors’ File on Ms Hunter’s desk so she could discuss matters contained therein the next day. 8 On the following morning she noticed that the file was not on Ms Hunter’s desk. She assumed that Ms Hunter had returned to the office at some time between 10.00 pm on 31 March and 8.00 am on 1 April.9 During cross-examination Ms Brandon maintained that she was certain that Ms Hunter did not take the file when she left for work on 31 March.10
[12] Ms Brandon arrived at the office at about 8.00 am and was joined by Ms Power at approximately 8.30 am. Ms Power asked Ms Brandon what time Ms Hunter would be coming in and Ms Brandon replied that she would be arriving late. 11
[13] Ms Power gave evidence that shortly after her arrival she had looked in Ms Hunter’s office and noticed that some of her personal effects were missing including medicinal cream, a jar of nuts and a cactus. 12 Ms Power then went to inform Ms Brandon, who had also noticed that some of Ms Hunter’s personal effects were not in her office. Ms Brandon and Ms Power gave evidence that a “Jane Eyre” mug and other food items belonging to Ms Hunter were missing from the kitchen.13
[14] Ms Hunter denied removing her personal possessions from the office and maintained during cross-examination that she had only taken her bag and the Contractors’ File when she left work on 31 March 2010. 14 She gave evidence that some of her items are still in the possession of Ms Brandon including her prescription glasses, fan heater and personal file.
[15] According to Ms Brandon and Ms Power they then had a conversation in the kitchen regarding Ms Hunter. They give slightly different accounts of this conversation. According to Ms Brandon, Ms Power said to her words to the effect of:
“Are you OK?” and “what do you want me to do about this?” 15
Ms Power gave evidence that Ms Brandon said to her words to the effect of:
“Now I get it. This is why she told me to not worry about moving my car this morning, as she wasn’t coming back to work.” 16
[16] During the conversation they said that they heard Ms Hunter opening the front door of the office. 17 Ms Hunter gave evidence that she arrived at approximately 9.30 am.18 Ms Brandon gave evidence that she left the kitchen and walked towards the front of the building.19 This is consistent with Ms Hunter’s statement that she had seen Ms Brandon and Ms Power standing inside the door when she opened it.20 It was not in dispute that Ms Hunter was carrying the Contractors’ File when she entered the building.21
[17] According to Ms Brandon, Ms Hunter turned to leave upon seeing her and Ms Power standing inside the door. Ms Power’s evidence does not mention this. 22
[18] Ms Brandon and Ms Power both gave evidence that Ms Brandon spoke to Ms Hunter and, referring to the Contractors’ File, asked her if she had removed certain files from it. 23 According to Ms Power, Ms Brandon then said to Ms Hunter words to the effect of:
“Obviously you are leaving as you have taken your belongings and personal items.” 24
[19] According to Ms Brandon, Ms Hunter stated that she did not take the Contractors’ File for the purpose of removing files and once more turned to leave. 25
[20] Ms Brandon’s evidence is that she then said to Ms Hunter words to the effect of:
“well, as you have already taken all your belongings, you don’t need to go upstairs.” 26
[21] Ms Hunter’s evidence supports this to a degree. According to her, Ms Brandon said words to the effect of:
“You don’t need to go upstairs, you are not welcome here. I want your key.” 27
[22] Both accounts indicate that Ms Brandon said to Ms Hunter:
“You don’t need to go upstairs.”
[23] Neither Ms Brandon’s nor Ms Power’s evidence includes a reference to any demand or request for Ms Hunter to return her keys. According to Ms Brandon, Ms Hunter said words to the effect of:
“Yeah- here’s your key back. You might want to try it in the door.” 28
[24] It is not disputed that Ms Hunter then returned her office key.
[25] Both Ms Hunter’s and Ms Brandon’s evidence is that Ms Brandon then said words to the effect of:
“I’ve heard what you said about me...” 29 or “I know what you have been saying about me.”
[26] I am required by s. 386(1)(a) of the Act to determine whether or not Ms Hunter was terminated on MBBD’s initiative.
[27] Mr Smart spent a considerable time counteracting a possible argument by Ms Hunter that she was constructively dismissed. Constructive dismissal was never alleged by Ms Hunter. She always alleged that her employment was terminated by MBBD on 1 April 2010. 30 I drew this to both representative’s attention. There was therefore no subsequent cross-examination on much of the irrelevant material.
[28] Mr Smart submitted that Ms Hunter abandoned her employment on 1 April 2010. He argued that it was open for me to view the conversation of 1 April 2010 as described by his client, and the ensuing conduct of Ms Hunter, as an abandonment of her employment. He also submitted that the evidence of Ms Power, that Ms Hunter had told her at some time prior to the events of 1 April 2010 that she intended to retire “in the very near future”, supported this interpretation of events.
[29] I am not persuaded that Ms Hunter displayed any intention to be no longer bound by the terms of her contract of employment or repudiate that contract. I am satisfied that Ms Hunter considered her employment with MBBD to be in jeopardy. She gave evidence that this was one of the reasons she took the Contractors’ File home with her on 31 March 2010. Even if Ms Hunter had taken some of her personal possessions home, in anticipation of her employment being terminated, I find that that is conduct which falls far short of conduct evincing an intention to be no longer bound by the terms of her contract of employment and does not constitute a repudiation of the contract.
[30] Ms Power gave evidence that Ms Hunter had told her at some point prior to 1 April that she would leave MBBD in the near future. Mr Smart submitted that this comment colours the events of 1 April and strengthens his submission that Ms Hunter abandoned her employment. I am not persuaded that there was any evidence that Ms Hunter intended to abandon her employment. Ms Hunter may have intended to leave MBBD at the first opportunity. She thought her employment was likely to be terminated. This is not the same as abandoning her employment and/or repudiating her contract of employment.
[31] It was not disputed that, on the morning of 1 April 2010, Ms Hunter sent Ms Brandon an SMS message advising that she would be late for work as she had to attend a medical appointment. She then attended work as she said she would. I find that this conduct is inconsistent with an intention on Ms Hunter’s part to abandon her employment. It is consistent with Ms Hunter intending to remain in employment, at least for the present.
[32] Both Ms Hunter’s and Ms Brandon’s evidence was that on 1 April 2010 Ms Brandon said to her words to the effect of “You don’t need to go upstairs.”
[33] This was the only communication by either party on 1 April 2010 which indicated that the employment relationship had ceased and it was conduct of the employer. I have concluded that Ms Brandon summarily terminated Ms Hunter’s employment.
[34] I have considered the criteria set out in s387 and I have dealt with them below.
[35] In relation to s387(a) I have concluded that there was no valid reason for the termination of Ms Hunter’s employment. On 1 April 2010 Ms Brandon formed the view that Ms Hunter had been gossiping inappropriately. She formed this view on the basis of information provided by Ms Power in secret. This information was not supported by any investigation or corroboration. I prefer the evidence of Ms Hunter wherever the evidence of Ms Power and Ms Hunter is in conflict. I am not persuaded that there was any misconduct of this kind by Ms Hunter. There was therefore no basis for a termination of employment based on inappropriate gossip.
[36] In understating her age at commencement of employment, I am not satisfied that Ms Hunter was guilty of anything but vanity.
[37] In relation to the various matters of misconduct which Mr Smart identified as matters of misconduct which were discovered after the termination of Ms Hunter’s employment, I am not satisfied that there is any substance to any of the allegations. There is nothing in the evidence before me, and about which Mr Smart cross-examined Ms Hunter, which establishes any misconduct whatsoever. There cannot have been a valid reason for termination of employment arising from these matters.
[38] I am positively satisfied that Ms Hunter did not process wage increases without permission and/or notification to Ms Brandon; dishonestly buy personal items from any store with employer funds; buy any personal items with the knowledge of Ms Brandon and then fail to reimburse Ms Brandon; make multiple payments of salary to herself; pay herself twice for holidays or corruptly pay herself from any other enterprise owned by Ms Brandon.
[39] Mr Smart submitted that Ms Hunter was guilty of taking annual leave as well as paying herself a salary for it ie paying herself twice. I have already made a finding regarding this allegation. This allegation could never have been established on the evidence before me. MBBD has incomplete evidence as to what leave was taken. There were no proper records regarding leave and no records at all for January 2010 31 The facts that some records were recorded on a USB now in Ms Hunter’s possession does not alter my conclusion. The records could only be copied on to the USB by Ms Hunter. On the evidence before me I have concluded that the original records remained and they were incomplete. It was impossible for me to have been satisfied as to any impropriety.
[40] Ms Hunter did remove the Contractors’ File for the purpose of examining it in private. Removing an employer’s file from an employer’s premises can be a valid reason for termination of employment but, in the circumstances of Ms Hunter’s employment and given her duties, I do not consider that removing the contractors’ file and replacing it the next day was, in the circumstances of this case, a valid reason for termination of her employment. Ms Hunter could access the file at any time. She managed the relevant file. I do not consider its removal to have been misconduct. For the sake of completeness, if I am mistaken in that conclusion, then I am satisfied that any termination of employment for this reason would be harsh, unjust or unreasonable.
[41] In relation to s387 (b) and (c) MBBD made the following concession:
“7. It is conceded that the applicant, in the event of a finding she was dismissed was not notified of the reason nor afforded an opportunity to respond.” 32
[42] s387(d) is not relevant.
[43] In relation to s387(e) I have taken into account that there was no significant complaint of past poor performance. Insofaras there had been any issue of unsatisfactory performance raised by MBBD it related only to the period of employment immediately prior to 1 April 2010. I have considered that issue.
[44] In relation to s387(f) and (g), the employer does not have a human resource management department and, given the size of the employer’s enterprise, I accept that there was not likely to be any formal procedures and policies affecting dismissal. I have taken this into account.
[45] In relation to s387(h) I have had regard to the fact that Ms Hunter was summarily dismissed; she was not paid any notice; she was dismissed at a time when she was certified as unfit for work as a result of stress and hypertension and that she was dismissed without her accrued annual leave being paid.
[46] I am satisfied that the complaint to the police made by Ms Brandon regarding Ms Hunter’s conduct, and on which Mr Smart placed so much weight, was an attempt to intimidate Ms Hunter and persuade her to withdraw her application. There was no evidence of any misconduct which could justify a report to the police. I am not surprised that the police took no action in relation to these allegations, at least against Ms Hunter. I have had regard to that matter.
[47] In determining whether a particular termination is harsh, unjust or unreasonable consideration can be given as to whether the penalty of termination is excessive or inappropriate. See Byrne v. Australian Airlines Ltd (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.
“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 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.”
And
“Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable”. 33
[48] I have concluded that Ms Hunter was dismissed from her employment on 1 April 2010 and that that dismissal was harsh, unjust or unreasonable. The termination was harsh because Ms Hunter was not guilty of the misconduct on which MBBD acted. It was unreasonable because it was decided on the basis of allegations which were not tested and it was harsh in its consequences for the personal, social and economic situation of Ms Hunter.
[49] I now need to consider what, if any, remedy should be applied to Ms Hunter.
[50] I have considered the requirements of s390 of the Act. I am satisfied that Ms Hunter was protected from unfair dismissal and that she was unfairly dismissed.
[51] I am satisfied that reinstatement would be inappropriate in all the circumstances of this case. I have determined this on the basis of my conclusions concerning the relationship of the parties which, to say the least, was poisonous at cessation of employment. I have not included the relevant material in this decision but, the evidence of each regarding the other, contains many gratuitous nasty remarks. I have also considered the size of the employer’s undertaking. I do not think the relationship between the parties is capable of repair. The past conduct of each as viewed by the other, would, in my view, be regarded as unforgiveable. I do not consider that the parties could move beyond the breakdown in their relationship.
[52] I am satisfied that an order for compensation is appropriate in all the circumstances of this case. I therefore intend to order payment of compensation in lieu of reinstatement. I have taken into account all of the matters to which my attention is directed by s392 of the Act when determining the amount of compensation payable to Ms Hunter.
[53] I have taken into account the viability of MBBD. I have concluded that it is not a robust business. The industry is a difficult one. MBBD has had peaks and troughs in viability. I have had regard to that matter and taken it into account.
[54] I have taken into account Ms Hunter’s length of service. She was employed for slightly less than two years. Whilst that is not an insignificant period, neither is it particularly lengthy. I have concluded that the length of Ms Hunter’s service was a neutral consideration.
[55] I have taken into account the remuneration that Ms Hunter would have received had her employment not been terminated.
[56] I have taken into account Ms Hunter’s efforts to mitigate her loss. These have not been extensive. In this regard I have given consideration to the state of Ms Hunter’s health. At the time of dismissal she was suffering from anxiety and hypertension. This is a matter that I have taken into account and weighed against her apparent lack of mitigation of her losses. Mitigation was a neutral matter in my consideration of compensation.
[57] I have taken into account the lack of income earnt by Ms Hunter since termination of employment.
[58] I have taken into account the fact that Ms Hunter’s termination of employment was a summary termination of employment.
[59] In determining what compensation should be paid to Ms Hunter I have taken particular account of her age and circumstances. She is not young. She is likely to find further employment difficult to obtain. She is not well. All of these matters will have exacerbated her difficulties in finding further employment and worsened the situation for her arising from an unjust termination of employment.
[60] I have also had regard to the state of the relationship between the parties at cessation of employment. I have concluded that the relationship was, in any event, suffering from a terminal illness. I do not believe that, even without the events of 1 April 2010, Ms Power’s gossip and Ms Brandon’s acceptance of that gossip, the relationship could have continued beyond a very limited period. I have considered this issue and taken it into account in assessing the amount of compensation payable to Ms Hunter.
[61] I have decided to issue an order for six weeks compensation payable to Ms Hunter within fourteen days of the date of this decision. The compensation will be payable on the basis that Ms Hunter earned $1,154.00 gross per week.
[62] Ms Hunter was entitled to notice of one week. This should be paid immediately by MBBD. I do not make it part of this order. On my calculation Ms Hunter was entitled to five days accrued annual leave at the date of cessation of her employment. This should be paid immediately to Ms Hunter with the appropriate loading. I do not make it part of this order. Payment of outstanding entitlements will obviate the need for further litigation.
[63] An order shall issue immediately. Should MBBD wish to seek an order for payment by instalments a separate application with supporting documentation can be made.
SENIOR DEPUTY PRESIDENT
1 PR500339
2 Exhibit Hunter 1 para 1
3 Ibid para 5
4 Transcript PN 77
5 Transcript PN 390
6 Transcript PN 397
7 Transcript PN 410 - PN 412
8 Exhibit Brandon 4 para 63 sub para 2
9 Ibid para 63 sub para 3
10 Transcript PN 1009
11 Exhibit Brandon 4 para 63 sub para 2
12 Ibid para 63 sub para 2
13 Ibid para 63 sub para 4
14 Transcript PN 399 - PN 401
15 Exhibit Brandon 4 para 63 sub para 4
16 Exhibit Brandon 5 para 52
17 Exhibit Brandon 4 para 63 sub para 4
18 Transcript PN 723
19 Exhibit Brandon 4 para 63 sub para 4
20 Exhibit Hunter 1 page 8 para 8
21 Exhibit Brandon 4 para 63 sub para 4
22 Ibid para 63 sub para 4
23 Ibid para 63 sub para 4; Exhibit Brandon 5 para 54
24 Exhibit Brandon 5 para 54
25 Exhibit Brandon 4 para 63 sub para 4
26 Ibid para 63 sub para 5
27 Exhibit Hunter 1 page 8 para 83
28 Exhibit Brandon 4 para 63 sub para 5
29 Ibid para 63 sub para 5
30 Transcript PN 251 - PN 252
31 Transcript PN 609 - PN 615, PN 627 - PN 632 and PN 706 - PN 711
32 Respondent’s Outline of Submissions - 6 September 2010
33 (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ
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