Ms Melissa Abra v SJJ Group Pty Ltd T/A Infront Cleaning Services

[2016] FWC 6587

[2016] FWC 6587

FAIR WORK COMMISSION

DECISION

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

Ms Melissa Abra
v
SJJ Group Pty Ltd T/A Infront Cleaning Services
(U2016/7750)

COMMISSIONER SAUNDERS NEWCASTLE, 1 NOVEMBER 2016

Application for relief from unfair dismissal – no valid reason – compensation ordered

[1] Ms Melissa Abra commenced employed with SJJ Group Pty Ltd trading as Infront Cleaning Services (SJJ) as a casual cleaner in July 2015. Ms Abra claims that she was dismissed by SJJ on 10 June 2016 and her dismissal was harsh, unjust and unreasonable. SJJ denies that Ms Abra was dismissed or that her dismissal, if it occurred, was harsh, unjust or unreasonable.

[2] Ms Abra was represented by United Voice NSW throughout these proceedings.

Procedural matters

[3] United Voice filed Ms Abra’s unfair dismissal application in the Fair Work Commission (Commission) on 17 June 2016. United Voice also sent a copy of Ms Abra’s unfair dismissal application to SJJ by email, including to the email address [email protected].

[4] At the hearing of this matter on 19 October 2016, Mr John Nelmes, SJJ Operations Manager, confirmed that [email protected] is one of the email addresses he uses; indeed Mr Nelmes used that email address to correspond with my Associate during the proceedings. Mr Nelmes also explained at the hearing that although he receives emails sent to that email address he does not read many of them because he is too busy to do so.

[5] SJJ did not, at any time, file or serve a Form F3 - Employer’s Response to Application for Unfair Dismissal Remedy, or any other form of response to Ms Abra’s unfair dismissal application.

[6] Conciliation did not take place because SJJ did not participate in the conciliation listed to take place by telephone.

[7] On 29 July 2016, the parties were sent a Notice of Listing by the Commission in which they were informed that the matter had been listed for arbitration conference/hearing in the arbitration roster at Newcastle on 19 and 20 September 2016, subject to the possibility that the number of hearing days could be reduced depending on the number of witnesses to be called by each party. The following directions were also communicated to the parties in the Notice of Listing:

(a) The Applicant is directed to lodge with the Commission and serve on the Respondent an outline of submissions, any witness statements and other documentary material the Applicant intends to rely on in support of the application by no later than noon on Friday, 12 August 2016; and

(b) The Respondent is directed to lodge with the Commission and serve on the Applicant an outline of submissions, and any witness statements and other documentary material the Respondent intends to rely on in opposition to the application in this matter by no later than noon on Monday, 2 September 2016.

[8] Ms Abra complied with the directions by filing and serving an outline of submissions and Ms Abra’s witness statement on about 12 August 2016. United Voice served Ms Abra’s witness statement and outline of submissions on SJJ by sending those documents by express post to the registered office of SJJ. The envelope containing the documents sent to SJJ by express post was returned to United Voice with the following words handwritten on the back of the envelope:

“SJJ IS NOT INTERESTED IN USING YOUR COMPANY SERVICE.”

[9] SJJ did not comply with the directions made on 29 July 2016, nor did it, at any time, file or serve an outline of submissions, any witness statements or other documentary material.

[10] On 23 August 2016, the parties were sent a further Notice of Listing by the Commission in which they were informed that the matter had been listed for telephone directions before me on 30 August 2016. There was no appearance by or on behalf of SJJ at the telephone directions hearing.

[11] At the commencement of the hearing on 19 September 2016, Mr Haren Pararajasingham of United Voice appeared on behalf of Ms Abra, who was also present. There was no appearance for SJJ. On the morning of 19 September 2016, my Associate spoke to Mr Nelmes by telephone, who said he did not know about the hearing. I gave SJJ the benefit of the doubt and adjourned the hearing to 19 October 2016. I also issued directions on 19 September 2016, giving SJJ until 5 October 2016 to file and serve documents, witness statements, and an outline of submissions.

[12] A copy of the new Notice of Listing, directions, and other relevant material was sent to SJJ by both email and express post to SJJ’s registered office. In addition, Mr Nelmes attended the Commission in Newcastle on about 5 October 2016 to collect a hard copy of the documents that had been sent to SJJ by email and express post on 19 September 2016.

[13] SJJ did not file or serve any documents, witness statements, or outline of submissions, in accordance with the directions made on 19 September 2016, nor did it seek an extension of time to do so.

[14] Mr Nelmes attended the hearing on 19 October 2016 and made an application for an adjournment to be able to obtain relevant documents and statements from relevant witnesses. I rejected that application, having regard to the history of the matter and for the other reasons I gave in a decision recorded on transcript at the hearing on 19 October 2016.

[15] Accordingly, the hearing proceeded on 19 October 2016 with evidence being given by Ms Abra and Mr Thomas Craven, United Voice Industrial Officer, in support of Ms Abra’s case. Mr Nelmes cross examined Ms Abra extensively. He also cross examined Mr Craven. No evidence was adduced by or on behalf of SJJ.

Initial matters to be considered before merits

[16] Section 396 of the Fair Work Act 2009 (Cth) (the Act) requires me to decide four matters before I consider the merits of Ms Abra’s unfair dismissal application.

Was the application made within 21 days? (s.396(a))

[17] I will address the issues of whether Ms Abra was dismissed and the timing of any such dismissal later in this decision.

[18] Assuming Ms Abra was dismissed on 10 June 2016, as she contends, her unfair dismissal application was filed on 17 June 2016, with the result that her application was made within the 21 day limitation period.

Was Ms Abra protected from unfair dismissal?

[19] There is no dispute and I am satisfied on the evidence that Ms Abra was covered by the Cleaning Services Award 2010 during her employment with SJJ as a casual cleaner.

[20] There is an issue as to whether Ms Abra completed at least the minimum period of employment with SJJ prior to her alleged dismissal. There is no dispute that Ms Abra commenced employment with SJJ on 1 July 2015. Accordingly, on her case, Ms Abra was employed by SJJ for about 11 months.

[21] I am satisfied on the evidence given by Ms Abra that, in the period from 1 July 2015 until some point in January 2016, her employment by SJJ as a casual employee was on a regular and systematic basis and she had a reasonable expectation of continuing employment by SJJ on a regular and systematic basis. That is because during that time she regularly worked about 20 hours per week, averaging four hours work each evening from Monday to Friday, commencing at 5pm and finishing at about 10pm, working mostly at the same client sites each week. Ms Abra turned up each week to those client sites and cleaned them, regardless of whether she was sent a roster for the particular week by SJJ. Ms Abra was always paid by SJJ for such work. It follows that Ms Abra’s service with SJJ during that period of in excess of six months counts towards her period of employment with SJJ (s.384(2) of the Act).

[22] In January and February 2016, Ms Abra was given less work than she had typically undertaken for SJJ and had some weeks where she was given no work at all. Ms Abra worked her last shift for SJJ on Friday, 26 February 2016. On 29 February 2016, Mr Nelmes sent a text message to Ms Abra to ask her to take the next two days off work, because work was not available. Ms Abra agreed to that request. Thereafter Ms Abra made regular attempts to contact Mr Nelmes and Mr Heffernan to find out whether she would be given additional shifts or whether her employment had been terminated. At no time after 26 February 2016 was Ms Abra given any further shifts, nor was she told whether she was still employed. In those circumstances, I find that Ms Abra’s employment with SJJ in the period from the point in January when she ceased being given regular or any shifts to 10 June 2016 (the alleged date of dismissal) does not count to her period of employment with SJJ because during that time her employment as a casual employee was not on a regular and systematic basis (s.384(2) of the Act).

[23] If SJJ was not a small business employer at the time of her dismissal, Ms Abra’s period of employment with SJJ from 1 July 2015 until January 2016 satisfied the six month minimum employment period prescribed by s.383(a) of the Act. If, however, SJJ was a small business employer at the time of her dismissal, it would be necessary to consider whether Ms Abra was a transferring employee at the time SJJ acquired the Infront Cleaning business on 30 June 2015, to determine whether her prior service with the vendor of the Infront Cleaning business, JCS Cleaning Pty Ltd (JCS), could be counted as service with SJJ for the purpose of calculating Ms Abra’s period of employment with SJJ.

[24] In the event that SJJ wished to establish that it was a small business employer at the time of Ms Abra’s dismissal, it had an evidentiary onus in relation to that issue. That onus was not met because, as I have stated above, SJJ did not adduce any evidence at the hearing, nor did it cross examine Ms Abra about this issue. Accordingly, I can comfortably proceed on the basis that SJJ was not a small business employer at the relevant time.

[25] In any event, I am satisfied by the “information” provided by Mr Nelmes from the bar table at the hearing that SJJ was not a small business employer at the relevant time. In particular, Mr Nelmes informed me that in June 2016 SJJ employed about 13 or 14 casual cleaners on a regular and systematic basis, not including Ms Abra. Further, at that time SJJ employed Mr Daniel Heffernan. I am also satisfied that Mr Nelmes, as Operations Manager working full-time in the business, was an employee of SJJ on 10 June 2016. Accordingly, without even considering the possibility of employees of associated entities, it is clear that SJJ had at least 15 employees when Ms Abra was allegedly dismissed on 10 June 2016.

[26] In the further alternative, I am also satisfied that Ms Abra was a transferring employee within the meaning of s.311 of the Act because:

(a) Ms Abra was employed by JCS as a casual employee on a regular and systematic basis in the Infront Cleaning business from about 24 January 2012 until 30 June 2015. She worked an average of 20 hours each week during her employment with JCS;

(b) Ms Abra commenced employment with SJJ as a casual employee on a regular and systematic basis in the Infront Cleaning business from 1 July 2015;

(c) the work Ms Abra performed for SJJ is the same, or substantially the same, as the work Ms Abra performed for JCS; and

(d) JCS sold assets of the Infront Cleaning business to SJJ, including the contracts JCS had with clients, which were terminated and replaced by new contracts between SJJ and the clients, and cleaning equipment. Accordingly, there was an arrangement between JCS and SJJ whereby SJJ owned or had the beneficial use of some or all of the assets (whether tangible or intangible) that JCS owned or had the beneficial use of and those assets relate to, or are used in connection with, the transferring work being undertaken by Ms Abra.

[27] SJJ did not inform Ms Abra in writing that her period of service with JCS would not be recognised (s.384(2)(b) of the Act).

[28] Accordingly, Ms Abra’s service with JCS counts as service with SJJ (s.22(5) & (7) of the Act).

Was the dismissal consistent with the Small Business Fair Dismissal Code? (s.396(c))

[29] For the reasons set out above, SJJ was not a small business at the relevant time. Accordingly, the Small Business Fair Dismissal Code was inapplicable.

Genuine redundancy (s.396(d))

[30] I am satisfied on the evidence that Ms Abra’s dismissal was not a case of genuine redundancy.

Was Ms Abra dismissed?

[31] In order for Ms Abra to have been unfairly dismissed, she must have been dismissed (s.385(a) of the Act).

[32] Mr Nelmes primary contention is that Ms Abra was never dismissed by SJJ.

What constitutes a dismissal under the Act?

[33] Subsection 386(1) of the Act governs when a person has been dismissed:

“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.”

[34] A dismissal does not take effect unless and until it is communicated to the employee who is being dismissed. 1

[35] A Full Bench of the Commission considered s.386 in Barkla v G4S Custodial Services Pty Ltd: 2

“[23]It is necessary in the first instance to consider the communications of the employer to the employee to determine whether any of these communications constitutes an express termination...

[24]It is then necessary to consider whether any action of the employer amounted to termination of employment. It should be noted in this case that Mr Barkla did not resign from her employment. Rather he alleges that the employer's conduct amounted to dismissal. There is considerable law on whether a resignation is forced by conduct of the employer or that the employer's conduct amounts to a constructive dismissal either at common law or within the statutory definitions. In our view this law is helpful in the present context because it articulates the nature of employer conduct which will bring an employment contract to an end. This is what Mr Barkla has argued in this case. In O'Meara v Stanley Works Pty Ltd a Full Bench of the Australian Industrial Relations Commission discussed the relevant case law and outlined the legal considerations in the following terms:
…

‘[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether "the act of the employer [resulted] directly or consequentially in the termination of the employment." Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign." [emphasis added]’”

[36] The reasoning in O'Meara was treated as fully applicable to s.386(1) of the Act by the Full Bench in Ryan v ISS Integrated Facility Services Pty Ltd. 3

[37] In the specific context of casual employees, a Full Bench of the Industrial Relations Commission of New South Wales made the following observation in Ryde-Eastwood Leagues Club v Taylor 4:

“A casual employee deprived of employment from time-to-time according to a regular roster arrangement may well, in our view, reasonably be said to have had her services dispensed with – that constitutes a dismissal.”

[38] The decision of the Full Bench of the Industrial Relations Commission of New South Wales in Ryde-Eastwood Leagues Club v Taylor needs to be treated with some caution because the Full Bench was there concerned with the ordinary meaning of the word “dismiss” in a different statute, rather than the definition of dismissed set out in s.386 of the Act. Notwithstanding the need for such caution, the types of matters referred to by the Full Bench in Ryde-Eastwood Leagues Club v Taylor in the previous paragraph, namely the extent to which and duration for which a casual employee is not given any shifts after having worked on a regular and systematic basis for some time, will, together with other evidence concerning any changes in the operational requirements of the business, be relevant to an analysis of whether there has been some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end.

Events leading up to 10 June 2016

[39] As set out in paragraph [22] above, Ms Abra made numerous attempts to contact SJJ to find out whether she was still employed in the period from 29 February 2016 until 10 June 2016. Ms Abra did not receive any response to the vast majority of her text messages, phone calls and emails to Mr Nelmes and Mr Heffernan.

[40] Mr Nelmes did send Ms Abra a text message on about 3 March 2016. In that text message Mr Nelmes informed Ms Abra that there would be limited shifts available for her over the next month at least. Notwithstanding that message, SJJ did not offer Ms Abra any shifts after 26 February 2016 and it did not inform Ms Abra whether she was still employed.

[41] During the period from 29 February 2016 until 10 June 2016, other casual cleaners of SJJ were being given work to do. Ms Abra was told by some of these employees that Mr Nelmes had informed them that Ms Abra had been, or would be, dismissed. Ms Abra communicated that information to Mr Nelmes in a text message to him on 22 March 2016 and asked for him to let her know what the situation was. Ms Abra did not receive a response to that message.

[42] In March 2016, Ms Abra applied for and obtained some casual cleaning work with another employer. She did so because she was not being offered any shifts by SJJ and her financial position was such that she required income to meet her family’s living expenses. Regardless of the alternative casual work she had obtained, Ms Abra remained ready, willing and able to undertake any cleaning shifts offered to her by SJJ.

[43] In addition to the attempt by Ms Abra to contact Mr Nelmes to find out the status of her employment with SJJ, Mr Craven gave evidence, which I accept, that he made numerous attempts to contact Mr Nelmes and Mr Heffernan, on Ms Abra’s behalf, from April 2016. Mr Craven only succeeded in being able to speak to Mr Nelmes on one occasion.

[44] Mr Craven gave evidence that he had a telephone discussion with Mr Nelmes to the following effect in May 2016:

“Mr Craven:	“Mr Nelmes, this is Tom Craven from United Voice, the cleaners’ union; I’m calling on behalf of Melissa Abra.”
Mr Nelmes:	“Oh well, get fucked, good luck.”

[45] Mr Nelmes strongly challenged this evidence in his cross examination of Mr Craven. On the balance of probabilities, I accept Mr Craven’s evidence in relation to this disputed conversation for the following reasons:

(a) Mr Craven gave a consistent and persuasive account of this conversation when he was cross examined about it a number of times. In my view, Mr Craven appears to have a good recollection of the conversation; and

(b) The substance of the message which Mr Craven contends Mr Nelmes gave to him in the short conversation, namely an unwillingness to engage with, or discuss, Ms Abra’s situation, is consistent with both Mr Nelmes’ conduct in not responding to most of Ms Abra’s communications in the period from 29 February 2016 to 10 June 2016 and SJJ’s conduct in failing to respond to or deal with Ms Abra’s unfair dismissal claim.

[46] In making this finding I have not placed any weight on the fact that Mr Nelmes did not give evidence in these proceedings. I have assumed from the questions put by Mr Nelmes to Mr Craven in cross examination that Mr Nelmes would have denied making such a statement, had he given evidence in the proceedings.

[47] Because Ms Abra could not get any information from SJJ about the status of her employment, she filed a F10 – Application for the Commission to Deal with a Dispute in Accordance with a Dispute Settlement Procedure on 20 May 2016.

[48] On 25 May 2016, Ms Abra received a Notice of Listing from the Commission in relation to her application to deal with a dispute. On the same day as the Notice of Listing was sent to the parties, Mr Heffernan called Ms Abra and asked when her cleaning equipment was going to be returned. Ms Abra was confused by this question because she had never been told that she needed to return her equipment or that she had been dismissed by SJJ. Ms Abra asked Mr Heffernan to clarify the status of her employment. Ms Abra did not hear back from Mr Heffernan or Mr Nelmes in relation to the status of her employment.

[49] Ms Abra’s application to deal with a dispute was listed before me for conciliation on 10 June 2016. Ms Abra attended the Commission in Newcastle for the conciliation. There was no appearance by or on behalf of SJJ. My Associate was not able to make contact with anyone from SJJ to find out why there was no appearance by or on behalf of SJJ.

[50] Ms Abra gave the following evidence, which I accept, as to her state of mind at the time SJJ failed to attend the conciliation on 10 June 2016:

“At this point it had become clear to me that the Respondent had dismissed me from my employment. I had not received any shift since 26 February 2016 and the Respondent was ignoring every attempt at contact I made. Accordingly, after consulting with my Union, I decided to file an Unfair Dismissal Application six days later on 16 June 2016.”

[51] On 27 June 2016, Mr Heffernan sent a text message to Ms Abra requesting the return of SJJ’s cleaning equipment. Ms Abra agreed to that request on the basis that she believed her employment had been terminated. Mr Heffernan collected the cleaning equipment from Ms Abra on 28 June 2016.

Application of principles to facts re dismissal

[52] There is no suggestion in this case that Ms Abra resigned. The question is whether her employment was terminated on SJJ’s initiative.

[53] It is clear from the evidence that no communication from SJJ to Ms Abra expressly terminated Ms Abra’s employment as a casual employee of SJJ.

[54] It is next necessary to consider whether any action of SJJ amounted to a termination of Ms Abra’s employment. There is no direct evidence that SJJ subjectively intended to dismiss Ms Abra. However, I am satisfied that the facts and circumstances leading up to and including 10 June 2016, as set out in paragraphs [39] to [50] above, had the probable result of bringing the employment relationship to an end. 5 Any reasonable person in Ms Abra’s position would have understood by 10 June 2016 that there would be no further work offered to Ms Abra by SJJ.

[55] As to the communication of the dismissal to Ms Abra, I am satisfied by the facts and circumstances set out in paragraphs [39] to [50] above that SJJ’s conduct during the period from 29 February 2016 to 10 June 2016 constituted communication to Ms Abra of its decision to dismiss her.

[56] It follows that I am satisfied that Ms Abra’s employment as a regular casual employee of SJJ was terminated on her employer’s initiative, with the result that she was dismissed within the meaning of s.386(1)(a) of the Act on 10 June 2016.

Was the dismissal harsh, unjust or unreasonable?

[57] The ambit of the conduct which may fall within the phrase “harsh, unjust or unreasonable” was explained in Byrne v Australian Airlines Ltd 6 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 misconduct which the employee 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.”

[58] The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out in section 387 of the Act. I will deal with each of these matters in turn below.

Valid reason (s.387(a))

[59] The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. 7 The reason for the dismissal should be “sound, defensible and well founded”8 and should not be “capricious, fanciful, spiteful or prejudiced.”9

[60] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 10 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).¹¹

[61] In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred.¹² It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 13

[62] Because of its belief that SJJ did not dismiss Ms Abra, SJJ did not contend that it had a valid reason for any such dismissal. However, three main issues were raised by Mr Nelmes with Ms Abra in cross examination concerning her performance and conduct as an employee of SJJ. I will examine each of those issues in turn.

Conflict of Interest

[63] It was put to Ms Abra in cross examination that she breached her contract of employment with SJJ by working for another cleaning company on a casual basis from March 2016 during the period in which she says she was still employed by SJJ as a casual employee.

[64] There is no doubt that Ms Abra did undertake work as a casual employee for another cleaning company from March 2016. She did so because she needed income to meet her family’s expenses. That was a necessary and reasonable step for Ms Abra to take in the circumstances.

[65] This is not a case where Ms Abra was rejecting shifts offered to her by SJJ in preference for shifts offered by the alternative cleaning company. Ms Abra was not offered any shifts by SJJ after 26 February 2016. She did not commence undertaking any work for the alternative cleaning company until March 2016.

[66] The conflict of interest clause in Ms Abra’s contract of employment with SJJ is in the following terms:

“While employed by Infront Cleaning you must not engage in private business or undertake other employment in direct or indirect competition with Infront Cleaning using any knowledge or materials gained during the course of your employment under this agreement.”

[67] I find that Ms Abra did not breach the conflict of interest clause in her contract with SJJ by working as a casual employee for another cleaning company from March 2016, for the following reasons:

(a) First, there is no evidence to support a finding that the alternative cleaning company for which Ms Abra undertook work from March 2016 was in direct or indirect competition with SJJ trading as Infront Cleaning. No such assertion was put to Ms Abra in cross examination. In addition, Ms Abra’s employment with the alternative cleaning company was not in competition with her employment with SJJ because she only undertook the alternative employment after SJJ had ceased offering her further shifts and Ms Abra remained ready, willing and able to undertake any work offered to her by SJJ. In that regard, it is relevant to note that Ms Abra undertook cleaning work for the alternative company during the day, whereas her cleaning work for SJJ had always been in the evenings; and

(b) Secondly, there is no evidence to support a finding that Ms Abra used any knowledge or materials gained during the course of her employment with SJJ in her employment with the alternative cleaning company from March 2016. No such assertion was put to Ms Abra in cross examination.

Request to return equipment to SJJ

[68] As set out above, SJJ first requested Ms Abra to return her cleaning equipment on 25 May 2016. She did not return the cleaning equipment at that time. I will consider whether Ms Abra’s conduct in that regard constitutes a refusal to follow a lawful and reasonable direction.

[69] Importantly, Ms Abra did not simply refuse to return SJJ’s cleaning equipment when the request was made to her on 25 May 2016. Her response, understandably in light of the uncertainty concerning her status as an employee of SJJ, was to seek clarification from Mr Heffernan. Ms Abra asked Mr Heffernan to clarify the status of her employment. Her request in that regard was consistent with the express requirement in her contract of employment with SJJ to return SJJ’s equipment and property “upon termination of employment”. Ms Abra did not hear back from Mr Heffernan or Mr Nelmes in relation to her question concerning the status of her employment. In those circumstances, I find that Ms Abra did not fail or refuse to follow a lawful and reasonable direction.

[70] In contrast to what happened on 25 May 2016, Ms Abra received the second request by SJJ to return its equipment on 27 June 2016. That was after Ms Abra believed she had been dismissed. Ms Abra responded to the request on the morning after she received it and agreed to the return of the equipment. It was collected from her house on the same day by Mr Heffernan.

Breach of confidentiality

[71] It was put to Ms Abra in cross examination that she breached the confidentiality clause in her contract of employment by writing a comment in the client communications book of one of the clients of SJJ for whom Ms Abra undertook cleaning work on a regular basis. In the client communication book Ms Abra wrote a comment in relation to the cleaning duties she was prioritising for the client because she did not have enough time in the period of time given to her by SJJ to clean the whole of the client’s workplace.

[72] The confidentiality clause in Ms Abra’s contract provides as follows:

“Other than in the proper performance of your duties you must not disclose to any third party, any confidential information.

‘Confidential information’ includes all confidential information of Infront Cleaning or a related Company, including but not limited to trade secrets, confidential know how, client lists, supplier lists, price lists, information about tenders and proposals to prospective clients, prospective client lists, information about products and services in development, business plans, marketing plans and computer software owned by or used by Infront Cleaning or a related company of which you become aware, or generate (both before and after the day this agreement is signed).

These restrictions apply both during your employment and after termination but will cease to apply to knowledge or information, which comes into the public domain, other than by a breach of this clause. You may be required to sign a separate confidentiality agreement.”

[73] I find that Ms Abra did not breach the confidentiality clause in her contract by reason of her written communication to the client in the client communication book, for the following reasons:

(a) First, Ms Abra was disclosing information to the client “in the proper performance” of her duties. It was obviously important for the client to be aware of the fact that Ms Abra was not cleaning the whole of its workplace and which cleaning tasks were being prioritised by Ms Abra, so that it could direct her to change the cleaning tasks being prioritised by her or take some other action to ensure its premises were being cleaned to the degree and standard it required; and

(b) Secondly, the information disclosed by Ms Abra in the client communications book is not “confidential information”. It does not fit within any of the classes of information referred to in the clause in Ms Abra’s contract of employment, nor does it fit within the ordinary meaning of confidential information. There was nothing confidential to SJJ in relation to information concerning which cleaning tasks were being prioritised by Ms Abra or why she was prioritising some tasks over others.

Conclusion on valid reason

[74] On the basis of the evidence adduced in these proceedings I find, for the reasons set out above, that there was no valid reason for Ms Abra’s dismissal related to her capacity or conduct.

Notification of the valid reason and opportunity to respond (s.387(b)&(c))

[75] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made 14, and in explicit15 and plain and clear terms.16 In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 stated the following (at [73]):

“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”

[76] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. 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. 17

[77] There is no dispute and I am satisfied on the evidence that Ms Abra was not notified of the reason(s) for her dismissal and she was not given any opportunity to respond to any such reason(s).

Unreasonable refusal by the employer to allow a support person (s.387(d))

[78] 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.

[79] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:

“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”18

[80] Ms Abra did not have any discussions with Mr Nelmes or any other person on behalf of SJJ in relation to her dismissal or the reason(s) for it. Accordingly, she did not have any occasion to request that a support person be present during any such discussions. It follows that there was no unreasonable refusal by SJJ to allow Ms Abra to have a support person present to assist at any discussions relating to dismissal.

Warnings regarding unsatisfactory performance (s.387(e))

[81] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal.

[82] Ms Abra was not dismissed for performance. As a result, this factor is not relevant.

Impact of the size of the employer’s enterprise on procedures followed (s.387(f))

[83] It is clear that SJJ is a relatively small business. The small size of its business may to some extent excuse it for following a less than ideal procedure to effect a dismissal. However, in this case no procedure was followed to effect Ms Abra’s dismissal. Ms Abra was left to “wither on the vine” and was not afforded the courtesy of a response to her requests for clarification as to whether she remained employed by SJJ. Regardless of how busy Mr Nelmes and the other managerial or administrative employees of SJJ were at the time, there can be no excuse for repeatedly failing or refusing to let an employee know whether they remain employed.

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

[84] Like many relatively small businesses, SJJ does not have dedicated human resource management specialists or expertise. However, that did not excuse it from failing to afford Ms Abra any procedural fairness in connection with the termination of her employment.

Other relevant matters (s.387(h))

[85] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

[86] The impact of the dismissal on Ms Abra’s personal and economic circumstances is a relevant consideration in this matter. Ms Abra had been able to obtain alternative employment, but she is working fewer hours per week in her alternative employment than she received on average from SJJ and JCS over a period of about four years. The difference in Ms Abra’s earnings is about $200 per week. This reduction in earnings has had a significant impact on Ms Abra and her family, which includes two school aged children.

[87] I am satisfied that Ms Abra’s dismissal was harsh in its consequences for her personal and economic situation.

Conclusion as to whether the dismissal was unfair

[88] Having considered each of the matters specified in section 387 of the Act, I am satisfied the dismissal of Ms Abra by SJJ was harsh, unjust and unreasonable.

Remedy

[89] In light of my findings that Ms Abra was protected from unfair dismissal, and that her dismissal was harsh, unjust and unreasonable, it is necessary to consider what, if any, remedy should be granted to her.

[90] Ms Abra seeks the remedy of compensation. She contends that reinstatement would be inappropriate because she does not have any trust or confidence in SJJ. In particular Ms Abra says that there has been a breakdown in trust and confidence caused by SJJ’s conduct during the termination process and thereafter in the conduct of these proceedings. I agree. I am therefore satisfied that reinstatement is inappropriate in this case.

[91] A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. 19

[92] Having regard to the fact that Ms Abra has suffered financial loss as a result of her unfair dismissal, I consider that an order for payment of compensation to her is appropriate in all the circumstances of this case.

[93] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Ms Abra. In assessing compensation, I am required by section 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection. In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was elaborated upon in the context of the current Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden). 20

Remuneration Ms Abra would have received, or would have been likely to receive, if she had not been dismissed (s.392(2)(c))

[94] United Voice submits on behalf of Ms Abra that she would have been employed by SJJ for six years had she not been unfairly dismissed on 10 June 2016. The six year time frame is based on the fact that Ms Abra’s youngest child, who is 12 years old, is likely to have about six years remaining in school. The hours Ms Abra worked for SJJ (evenings) suited her family commitments and requirements to look after her children before and after school.

[95] Mr Nelmes, on behalf of SJJ, submits that Ms Abra would have been dismissed immediately had she not been dismissed on 10 June 2016. However, I reject that submission on the basis that it is not supported by any evidence.

[96] There are a number of matters that are relevant to my assessment of the likely period Ms Abra would have remained employed by SJJ had she not been dismissed on 10 June 2016, including the following:

(a) Ms Abra enjoyed working at SJJ and had no intention from resigning from her job at SJJ. It suited her family commitments and obligations concerning her school aged children;

(b) Ms Abra lives in a regional location where work is not as readily available as it is in a major metropolitan area;

(c) Ms Abra was employed by SJJ and JCS for a combined period in excess of four years and did not, at any time on the evidence before me, have any disciplinary matters or issues concerning her performance brought to her attention;

(d) SJJ operates a cleaning contract business. Cleaning contracts can be readily lost and gained, with the result that there can be uncertainty and volatility for employees in the industry. The evidence revealed that SJJ has lost some of the cleaning contracts it had at the time it acquired the business on 30 June 2015; and

(e) SJJ is a relatively small business. The loss of cleaning contracts could have a significant impact on the amount of work, if any, available for each of its casual cleaners.

[97] In all the circumstances, I find that Ms Abra would have remained in employment with SJJ for a period of 18 months but for the termination of her employment on 10 June 2016.

[98] In calculating the remuneration Ms Abra would have earned had she not been dismissed, it is necessary to identify what her rate of payment would have been. The evidence establishes that Ms Abra’s average gross weekly earnings as a casual employee with SJJ (when she was being given shifts) were $540 gross per week. I am of the view that Ms Abra would have been likely to receive such weekly payments had she not been dismissed.

[99] Ms Abra would therefore have received $42,120 gross in remuneration in the 18 months following 10 June 2016 had she not been dismissed at that time (78 weeks x $540 = $42,120).

Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))

[100] Ms Abra commenced alternative casual work in March 2016 with Lifestyle Cleaning Services and has been earning, on average, $323 gross per week in this job. Ms Abra has worked in this casual position on a continuous basis from March 2016 until the date of the hearing on 19 October 2016.

[101] Ms Abra has not received any other remuneration since the termination of her employment with SJJ.

[102] In my view, it is reasonably likely that, in the period from 20 October 2016 until the end of the 18 month period (9 December 2017), Ms Abra will continue to earn, on average, about $323 gross per week in her role as a regular casual employee with Lifestyle Cleaning Services. It is possible Ms Abra will secure other alternative employment, or more hours of work with Lifestyle Cleaning Services, prior to the end of the 18 month period, but I will take this factor into account when assessing whether to apply a discount for contingencies.

[103] The calculation at this point is as follows:

(a) $42,120 (gross remuneration Ms Abra would likely have earned had she not been dismissed by SJJ and instead continued to be employed by SJJ until 9 December 2017) (78 weeks x $540 = $42,120))

(b) Less $25,194 (expected gross remuneration in the same period (78 x $323 = $25,194))

(c) Subtotal = $16,926

[104] This calculation is intended to put Ms Abra in the position she would have been in but for the termination of her employment. 21

Other matters (s.392(2)(g))

[105] It is necessary to consider whether to discount the remaining amount for "contingencies". This step is a means of taking into account the possibility that the occurrence of contingencies to which Ms Abra was subject to might have brought about some change in earning capacity or earnings. 22 Positive considerations which might have resulted in advancement and increased earnings are also taken into account.

[106] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision. 23 In this case, that period is from 20 October 2016 to 9 December 2017.

[107] In my view, it is appropriate in the circumstances of this case to apply a 40% discount for contingencies. I have had regard to the following factors in assessing the 40% discount rate:

(a) Ms Abra is motivated to find additional work to supplement her current income. She has a good history of working about 20 hours per week. In my view, there is a reasonably good prospect that, in the period from the date of this decision until 9 December 2017, Ms Abra will be able to earn more remuneration from either Lifestyle Cleaning Services or an alternative employer than an average weekly amount of $323 (which I have estimated based on her earnings to date with Lifestyle Cleaning Services). There is, of course, the prospect that Ms Abra could become unemployed, or earn less than $323 per week, for some or all of the period prior to 9 December 2017, but in my view that is less likely than the chance of her earning more than an average of $323 per week during that period;

(b) Because Ms Abra was employed by SJJ on a casual basis, there is the risk that during the anticipated period of employment she could have been given less work than had traditionally been the case during her employment with SJJ prior to January 2016. Notwithstanding the fact that Ms Abra clearly wanted to remain employed by SJJ for a significant period of time while her children (particularly the 12 year old child) are at school, it is obvious from the questions put by Mr Nelmes to Ms Abra in cross examination that he had some concerns about her conduct and performance. Mr Nelmes’ concerns in that regard could have resulted in Ms Abra being offered fewer hours as a casual employee. Further, the evidence revealed that SJJ has lost some of the cleaning contracts it had at the time it acquired the business on 30 June 2015 and Ms Abra was not given any shifts after 26 February 2016;

(c) There is the risk that Ms Abra could have suffered a loss of income during the anticipated period of employment with SJJ by reason of sickness, accident, death, holidays taken by her (for which she would not be paid as a casual employee) or resignation;

(d) Some allowance should be made for the fact that the moneys are to be received as a lump sum; and

(e) The anticipated period of employment in this case is reasonably lengthy (ie until 9 December 2017). A long anticipated period of employment justifies a higher percentage discount for contingencies. 24

[108] Once a 40% deduction rate is applied to the prospective period, the calculation becomes:

(a) in respect of the period from 10 June 2016 to 19 October 2016, the figure is $4,123 (19 weeks x ($540 - $323) = $4,123)

(b) in respect of the period from 20 October 2016 to 9 December 2017, the application of a 40% discount results in a figure of $7,681.80 (59 weeks x ($540 - $323) = $12,803 - 40% = $7,681.80)

(c) Total = $11,804.80

[109] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination.

Viability (s.392(2)(a))

[110] Mr Nelmes submitted that any order I make for compensation payable to Ms Abra may impact the viability of SJJ’s enterprise. However, no evidence was adduced in support of this submission. I am therefore not prepared to accept the submission, particularly having regard to the limited amount of compensation I propose to order be paid to Ms Abra.

Length of service (s.392(2)(b))

[111] I consider that Ms Abra’s reasonable period of service with SJJ (over four years, having regard to her earlier service with JCS, which counts as service with SJJ) does not in all the circumstances justify any increase or reduction to the amount of compensation otherwise payable.

Mitigation efforts (s.392(2)(d))

[112] Ms Abra has obtained alternative employment as a casual cleaner with Lifestyle Cleaning Services. Her alternative employer has a preference for its casual cleaners to either work day work or evening/night work. Ms Abra elected day work because she believed she would be more available for hours during the day, but she has let her employer know that she is also available for evening work should it be available.

[113] SJJ contends that Ms Abra has not made sufficient attempts to find alternative work and the real reason she is not working the same number of hours as she worked for SJJ is due to her personal preferences and her family commitments, including caring for two school aged children (one 12 and one 17 years of age). I reject those arguments. Even when Ms Abra was employed by JCS and then SJJ, she had commitments to care for her children and the hours she could work were limited. Nothing has changed in that regard.

[114] Ms Abra showed her genuine desire to obtain alternative work by seeking and securing such work in March 2016. I am satisfied that she has made significant efforts to mitigate her loss. Accordingly, I will make no adjustment on this score.

Misconduct (s.392(3))

[115] Based on the findings I have made in this matter, Ms Abra did not commit any misconduct, so this has no relevance of the assessment of compensation.

Shock, Distress (s.392(4))

[116] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap (s.392(5)&(6))

[117] The amount of $11,804.80 is less than half the amount of the high income threshold immediately before the dismissal. However, it is more than the total amount of remuneration received by Ms Abra from SJJ, or to which Ms Abra was entitled from SJJ, during the 26 weeks immediately before her dismissal. The amount paid by SJJ to Ms Abra by way of gross remuneration in the 26 week period ending on 10 June 2016 was $5,661.84.

Instalments (s.393)

[118] No application was made to pay any compensation by instalments.

Conclusion on remedy

[119] United Voice contends that I should award Ms Abra compensation in excess of the “manifestly unfair” figure of $5,661.84 for a number of reasons, which may be summarised as follows:

(a) First, SJJ ceased providing work to Ms Abra on 26 February 2016 and thereafter ignored many of her requests for information, including as to her employment status. United Voice submits that SJJ’s “callous disregard for the Applicant was completely unwarranted”;

(b) Secondly, in contrast, United Voice submits that Ms Abra’s conduct after 26 February 2016 was professional and reasonable. She made a number of different attempts to obtain clarity about her workplace status, including by commencing proceedings under s.739 of the Act. When SJJ failed to attend the Commission for the conciliation of the s.739 dispute, or otherwise respond to that application, Ms Abra formed the view that her employment with SJJ had come to an end. It was because of the measured and reasonable approach Ms Abra took to her attempts to obtain clarity about her workplace status that led her to conclude that her employment was terminated on 10 June 2016, rather than an earlier time which would, so it is submitted by United Voice, have enabled her to “articulate a more significant sum for the preceding 26 weeks of her employment with the Respondent”;

(c) Thirdly, United Voice contends that awarding a relatively low compensation figure in these proceedings would be detrimental from a public interest perspective, because it may encourage employers to “replicate the unscrupulous behaviour of the Respondent in these proceedings;

(d) Fourthly, United Voice relies on the following part of the decision in Smith Moore Paragon Australia Ltd 25 at [32], which has since been applied to decisions under the Act:

“If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard ‘to all the circumstances of the case’ including the matters listed in s170CH(7) and subject to the ‘cap’ provided for in s170CH(8)(9).”

(e) Fifthly, because “a narrow application of the Sprigg decision would yield an amount which is ‘clearly inadequate’”, United Voice contends that, in order to ensure a “fair go all round”, the Commission should, “for the purposes of ascertaining the compensation quantum, utilise 26 February 2016 as the effective termination date and thereby base its deliberation under subsection 392(6) on the amount the Applicant received over the 26 week period of 28 August 2015 to 26 February 2016”. During this period Ms Abra received $12,347.56 from SJJ.

[120] In my view, it is not the application of the Sprigg formula which, in this case, yields an amount that is clearly inappropriate ($5,661.84). Instead, it is the application of the “legislative ‘cap’ on the amount of compensation the FWC can order” 26 under s.392(5) which results in a low compensation amount.

[121] The Sprigg formula involves the application of the following steps:

“Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.”

[122] None of these steps involves the application of the statutory cap mandated by s.392(5). It is only after these steps are taken that the cap is applied, if the amount calculated under the Sprigg formula exceeds the statutory cap.

[123] In addition, the Sprigg guidelines are not a substitute for the words of the Act. 27 The expression “must not exceed” in s.392(5) clearly limits the amount of compensation which may be ordered to the cap calculated under s.392(5) and (6). Accordingly, this is not a case in which I could reassess the assumptions made in applying the Sprigg formula to come up with a higher compensation figure.28

[124] Even if I could reassess the assumptions made in applying the Sprigg formula to come up with a higher compensation figure, I would not take up United Voice’s proposal to “utilise 26 February 2016 as the effective termination date” and thereby look at “the amount the Applicant received over the 26 week period of 28 August 2015 to 26 February 2016”. Ms Abra contends, and I agree for the reasons set out above, that she was dismissed on 10 June 2016. She was not dismissed on 26 February 2016. That was simply the day she last worked a shift for SJJ as a casual employee.

[125] Based on my finding that Ms Abra was dismissed on 10 June 2016, I concluded that she filed her unfair dismissal application with the 21 day time period prescribed by s.394(2) of the Act. It would, in my view, be artificial, inappropriate and contrary to the requirements of the Act to make a finding that dismissal took place on a particular day and therefore find that the application was filed within time, but then to use a different date of dismissal, much earlier than the actual date of dismissal (and more than 21 days prior to the filing of the unfair dismissal application), for the purpose of increasing the statutory cap on compensation under s.392(5) of the Act.

[126] Any finding I made concerning the fairness or appropriateness of the conduct of the parties, or either of them, in the period from 26 February 2016 to 10 June 2016 could not confer on me any discretion or power to award compensation to Ms Abra in excess of the compensation cap imposed by s.392(5) of the Act.

[127] For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $5,661.84 in favour of Ms Abra is appropriate in the circumstances of this case. I will issue an order [PR587118] to that effect.

COMMISSIONER

Appearances:

Mr H Pararajasingham, Director – Member Support from United Voice, on behalf of the applicant;

Mr J Nelmes, Operations Manager for the respondent.

Hearing details:

2016.

Newcastle:

October, 19.

 1   Ayub v NSW Trains [2016] FWCFB 5500 at [35], [41] & [48]-[49]

 2   [2011] FWAFB 3769

 3   [2014] FWCFB 8451 at [15]

 4 (1994) 56 IR 385 at 392; see too Advertiser Newspapers Pty Ltd v IRCSA and Grivell (1999) 74 SASR 240 at [30]; Costello v Allstaff Industrial Personnel (SA) Pty Ltd and Bridgestone Tg Australia Pty Ltd [2004] SAIRComm 13 at [140]; New South Wales Nurses’ Association (on behalf of Yoyet Standen) v Principal Health Care Finance No 3 Pty Ltd [2009] NSWIRComm 1014 at [35]-[36]

 5   Mr M v LD Pty Ltd[2009] FWA 1676 at [21]; Leigh v Nestle Australia Limited[2010] FWA 4744 at [22]

 6 (1995) 185 CLR 410 at 465

 7   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.

 8   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373

 9   Ibid

 10   Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681 at 685

11 Ibid.

12 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].

 13   Ibid

 14   Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]

 15   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151

 16   Previsic v Australian Quarantine Inspection Services Print Q3730

 17   RMIT v Asher (2010) 194 IR 1 at 14-15

18 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].

 19   Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]

 20   [2013] FWCFB 431

 21   Bowden at [24], citing Ellawala v Australian Postal Corporation Print S5109 at [35]

 22   Ellawala v Australian Postal Corporation Print S5109 at [36]

 23   Enhance Systems Pty Ltd v Cox PR910779 at [39]

 24   Enhance Systems Pty Ltd v Cox PR910779 at [40]

 25 (2004) 130 IR 446 at [32]

 26   McCulloch v Calvary Health Care Adelaide[2015] FWCFB 2267 at [40]

 27   Bowden at [27]

 28   Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32].

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