Ms Monika Eskaf v J & L Salons Pty Ltd T/A Julise Beauty Therapy

[2015] FWC 4890

[2015] FWC 4890

FAIR WORK COMMISSION

DECISION

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

Ms Monika Eskaf
v
J & L Salons Pty Ltd T/A Julise Beauty Therapy
(U2015/4061)

COMMISSIONER ROE MELBOURNE, 24 JULY 2015

Termination of employment – small business code.

[1] Ms Eskaf was employed from November 2013 until 12 March 2015. Ms Eskaf was dismissed with two weeks’ notice on 26 February 2015. J&L Salons had two employees at the time of the dismissal and was therefore a small business. The reasons given for dismissal were “tardiness and client complaints.” J&L Salons say that the dismissal was in accordance with the small business code.

[2] At around midday on 26 February 2015 Ms Dragone Manager of J&L Salons, expressed her annoyance at Ms Eskaf being five minutes late back from lunch. It was Ms Eskaf’s uncontested evidence that she had forgotten her lunch at home and the owner, Ms Papa, had given her permission to go home and get her lunch and be back at work five minutes late. Ms Eskaf gave evidence that she had never previously been late. She did say that she was expected to be at work at 8.45am but she was only paid from 9am and that on occasion she arrived later than 8.45am but that she was always there by 9am when the shop opened.

[3] At around 2pm on 26 February 2015 Ms Dragone told Ms Eskaf that there had been six customer complaints. Ms Dragone did not give Ms Eskaf any details of the nature of the complaints. Ms Eskaf asked to know the names of the complainants. Ms Dragone refused to provide the names of the complainants and said that they wanted to be anonymous. Ms Dragone felt that Ms Eskaf was only interested in the names of the complainants.

[4] Ms Dragone then discussed the situation with her mother who is the owner of the business. They decided that Ms Eskaf should be dismissed. At the end of Ms Eskaf’s eleven hour shift at 8pm Ms Dragone told Ms Eskaf that her employment was being terminated because of customer complaints and tardiness. Ms Dragone handed Ms Eskaf a letter to this effect. The letter confirmed that Ms Eskaf was being given two weeks’ notice so that the dismissal took effect on 12 March 2015. The letter said that “as the business is quietening down” Ms Eskaf was not required to work her notice period. The letter said “we note that after several verbal warnings you have not tried to improve or taken the above issues serious.” There is no reference to serious misconduct and it is not suggested that this was raised at the meeting.
[5] Prior to 26 February 2015 J&L Salons advertised on Seek for a qualified senior beauty therapist to perform services including waxing, manicures, pedicures, massage, makeup, piercing and facials. On 25 February 2015 Ms Dragone interviewed a significant number of people for this position. Ms Eskaf was distressed that Ms Dragone was seeking to replace her in employment. She sent a number of text messages to this effect to her parents on 25 February 2015. In those text messages she said that “Maryanne said I’m losing hours cause I hurt my wrist…. Like they are gonna hire someone else.” Ms Eskaf gave evidence that she had discussed with Ms Papa that she was unable to do massage for two weeks because of a work related wrist injury. A medical certificate for one week was provided on 10 February 2015. Ms Dragone gave evidence that she was looking for someone to do eyelash extensions but she was unaware that Ms Eskaf was able to do eyelash extensions. Ms Dragone accepted that Ms Eskaf was a Diploma qualified beauty therapist. Ms Eskaf said that she was able to do all of the things which were requested in the Seek advertisement. Ms Dragone gave evidence that the business could only just afford to employ two people one of whom at that time was Ms Eskaf. Ms Papa did not give evidence so there was no evidence to contradict Ms Eskaf’s evidence that Ms Papa had told her that she was losing hours because of her injury.

[6] Ms Dragone gave evidence that Ms Eskaf was never told that if her performance did not improve her employment would be at risk. I am satisfied that Ms Eskaf was not given any written or verbal warning.

[7] Ms Dragone says that there were many occasions in 2014 when she raised customer complaints or tardiness with Ms Eskaf. Ms Eskaf denies that this ever occurred. Apart from one matter Ms Dragone did not provide any details of any of the alleged incidents when she drew allegations about customer complaints or tardiness to Ms Eskaf’s attention. She did refer to one incident concerning an eyebrow in December 2014. The details of this were not put to Ms Eskaf in the proceedings and Ms Eskaf denies that there were any complaints raised with her prior to 26 February 2015.

[8] Standard directions were issued in this matter for the parties to provide an outline of submissions and any documents and witness statements upon which they rely by specified dates. Ms Eskaf provided a detailed statement and a number of supporting documents. J&L Salons provided a short outline of submissions which was a response to Ms Eskaf’s statement but they provided no documents or witness statements. Both parties had professional assistance in preparing their materials.

[9] At the hearing Ms Eskaf represented herself and I granted permission for J&L Salons to be represented by a lawyer as I considered that the hearing would be more efficient if I were to do so. I considered that the fact that the Respondent had failed to provide any evidence was likely to lead to some complexity and potential delays if representation was not granted.

[10] I agreed to allow Ms Dragone to give evidence but restricted the evidence to the matters raised in Ms Eskaf’s statement. In cross examination of Ms Dragone the Applicant asked Ms Dragone if there was any proof that the six complaints had been made. I am satisfied that Ms Eskaf was unaware of the possible implications when she asked that question. The representative for J&L Salons understandably took advantage of this by seeking in re-examination to introduce the actual complaints. I was not satisfied that it was fair to allow the complaints to be brought into evidence at that stage when the employer had a long period of time to produce that evidence but had failed to do so. Furthermore, the authors of the complaints were not available to give evidence so it was not possible to ascertain the truth of the complaints.

[11] I am satisfied of the following matters which are not contested:

1. The Applicant had been employed for a continuous period of more than 12 months at the time of the termination.

2. The Respondent is a national system employer as it is a limited liability company.

3. The Applicant was dismissed by the employer for reasons related to conduct and performance.

4. The dismissal was not for reasons of redundancy.

5. The Application for unfair dismissal remedy was made within 21 days of the dismissal.

6. The Respondent is a small business employer for the purposes of the Fair Work Act 2009.

7. The Respondent says that the termination was a summary dismissal in accordance with the summary dismissal section of the small business fair dismissal code. The Applicant was however paid two weeks in lieu of notice.

[12] It is also accepted that Ms Eskaf was notified of the reason for dismissal at the time of the dismissal (Section 387(b) of the Fair Work Act 2009). Ms Eskaf was not refused to have a support person present. She was not aware that the meeting was to be a disciplinary meeting and she did not request a support person (Section 387(d)). J&L Salons is a very small business and it does not have human resource management expertise. I am satisfied that impacted on the procedures followed in the termination (Section 387(f) and (g)). The following matters need to be resolved in this case:

● Was the dismissal in accordance with the small business code?
● Was there a valid reason for termination due to customer complaints and tardiness?
● Was Ms Eskaf warned about her unsatisfactory performance before the dismissal?
● Did Ms Eskaf have an opportunity to respond to the allegations of tardiness and customer complaints on 26 February 2015?
● Are there other relevant matters?
● Was the dismissal unfair?
● If the dismissal was unfair what is the appropriate remedy?

Was the dismissal in accordance with the small business code?

[13] Ms Eskaf gave evidence that she received no prior warning about alleged tardiness and the one incident of lateness of which she was aware occurred with the permission of the employer. Ms Eskaf gave evidence that she was never advised of the nature of any customer complaints and was therefore not given an opportunity to respond to those complaints.

[14] I did not find Ms Dragone’s evidence concerning the meeting at 2pm on 26 February 2015 to be convincing. I am not satisfied that Ms Dragone had any basis to conclude that Ms Eskaf was not interested in fixing the issues raised in the complaints. It is clear that the detail of the complaints was never raised with Ms Eskaf and therefore it is impossible to conclude that Ms Eskaf was not interested in them and not prepared to respond. I am satisfied that Ms Dragone was focused on keeping the identity of those who complained secret and when Ms Eskaf asked who had made the complaints Ms Dragone took the matter no further.

[15] I found Ms Dragone’s evidence about the number of previous complaints and previous incidents of tardiness to be vague. If there had been so many incidents and they had been each raised with Ms Eskaf as suggested by Ms Dragone, I do not find it plausible that the employer failed to take action earlier.

[16] Ms Dragone accepted that she did not warn Ms Eskaf at any stage that her employment may be at risk if she did not improve. I therefore find that the dismissal could not have been in accordance with the small business code (other than for summary dismissal) as the code requires that: “The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.”

[17] J&L Salons argue that the dismissal was in accordance with the summary dismissal provisions of the small business code. The relevant section of the small business code is as follows:

“Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”

[18] I am not satisfied that the employer believed on reasonable grounds that the conduct was sufficiently serious to justify immediate dismissal. The employer dismissed the employee with notice. There is no mention of serious misconduct, or anything which means the same thing, in the termination letter or in the evidence concerning the termination meeting. Ms Dragone says that the events which led to the dismissal were that Ms Dragone returned from leave and found that there were six customer complaints and also on that day Ms Eskaf was 5 minutes late back from lunch. These matters were raised with Ms Eskaf between 12 and 2pm. Ms Eskaf was not told her job was at risk or that she was required to do anything. Ms Eskaf continued to work until 8pm. The action of the employer is not consistent with a belief that there was a risk to health and safety or to the business. Dismissal was not immediate. The allegations relate primarily to performance.

[19] The small business code does not apply.

Was there a valid reason for termination due to customer complaints and tardiness?

[20] I prefer the evidence of Ms Eskaf to that of Ms Dragone concerning the issue of incidents in 2014 of poor performance as evidenced by customer complaints and incidents of tardiness in 2014.

[21] I accept the unchallenged evidence of Ms Eskaf that she was not paid between 8.45am and 9am and so tardiness can only be measured by her attendance at 9am. I accept her evidence that she was always at work by 9am. I accept the unchallenged evidence of Ms Eskaf that Ms Papa authorised the five minute late return from the lunch break on 26 February 2015. This is the only incidence of tardiness where there are specific details.

[22] The existence of a customer complaint is not a basis for disciplinary action against an employee. The employee has to be guilty of some inappropriate conduct or performance of her duties. A customer complaint which is found to have basis can be evidence of this. In this case there is no evidence of the validity of any customer complaint. The employer had the opportunity to produce that evidence prior to the proceedings and did not do so. I accept Ms Eskaf’s evidence that she was not aware of the detail of any complaint.

[23] That said, I accept that Ms Dragone did tell Ms Eskaf on the day of the termination that there had been six customer complaints. Ms Eskaf suggests that the real reason for her termination was because of her workplace injury. Although I accept that the injury may have been a factor I am not satisfied that the customer complaints were a complete invention. I accept Ms Dragone’s evidence that there were six customer complaints. I make no judgment about whether or not those complaints were reasonable and demonstrated poor performance on the part of Ms Eskaf.

[24] I accept the evidence of Ms Dragone that the business can only just sustain the employment of two persons. I accept that Ms Eskaf was qualified to perform all the duties in the seek advertisement. I do not accept the evidence of Ms Dragone that she was looking for someone to do eyebrow extensions. I am satisfied that Ms Dragone was advertising the job and interviewing people to replace Ms Eskaf. I consider it likely that Ms Dragone was not happy with Ms Eskaf and was seeking to replace her. This occurred on 25 February 2015 prior to the alleged incident of tardiness and the six customer complaints.

[25] I am not satisfied that there was a valid reason for the termination.

Was Ms Eskaf warned about her unsatisfactory performance before the dismissal?

[26] It is accepted that Ms Eskaf was not warned that if customer complaints were not addressed and/or if tardiness did not improve her employment could be at risk. There is conflicting evidence about whether or not prior to 26 February 2015 the issue of the employer’s concerns about either of these matters was brought to Ms Eskaf’s attention. For the reasons set out earlier I did not find the evidence of Ms Dragone convincing in respect to the issue of prior discussions with Ms Eskaf. If the way in which the allegations were put to Ms Eskaf on 26 February 2015 is any guide as to how previous concerns were dealt with then it is unlikely that Ms Eskaf was made aware of the detail of those concerns.

[27] I am not satisfied that Ms Eskaf was warned about her alleged unsatisfactory performance before the dismissal.

Did Ms Eskaf have an opportunity to respond to the allegations of tardiness and customer complaints on 26 February 2015?

[28] I am satisfied that the substance of the customer complaints was never put to Ms Eskaf. For this reason it is clear that Ms Eskaf did not have the opportunity to respond to the issue of customer complaints. In respect to the specific incident of tardiness on 26 February 2015 Ms Eskaf did have the opportunity to respond and she provided the explanation that the absence had been authorised by Ms Papa. Ms Eskaf’s evidence in this regard was not challenged. Ms Eskaf did not have the opportunity to respond to any other incidents of tardiness because the detail of those allegations was not put to Ms Eskaf at the termination meeting.

[29] I am not satisfied that Ms Eskaf was given a reasonable opportunity to respond to the allegations.

Are there other relevant matters?

[30] There are no other relevant matters.

Was the dismissal unfair?

[31] The lack of expertise in the small business is not sufficient to outweigh the lack of a valid reason and the lack of procedural fairness in failing to give a proper opportunity to respond and in failing to warn Ms Eskaf about her poor performance and the consequences of failing to improve.

[32] The termination was unfair in that it was harsh, unjust and unreasonable.

What is the appropriate remedy?

[33] Ms Eskaf does not seek reinstatement. I do not consider that reinstatement is appropriate in the circumstances of this case. However, I do consider that an order for compensation would be appropriate.

[34] I have considered each of the requirements in Section 392 of the Act. There was no suggestion that any order I might make would affect the viability of the enterprise. The length of service was 15 months which is a neutral factor because it is neither particularly long nor short. Ms Eskaf made suitable efforts to mitigate her loss and found casual employment within four weeks of the dismissal taking effect on 12 March 2015. Ms Eskaf was earning $684 gross per week at J&L Salons. She has been earning an average of $500 gross per week from casual employment since 9 April 2015. In the last few weeks she has been earning an additional $175 per week from another casual job but she says that the future of that job and its likely earnings are uncertain.

[35] I am satisfied that J&L Salons were not happy with Ms Eskaf’s performance and were taking steps to replace her. Given the length of employment and the circumstances I estimate the employment would only have continued for a period of a further three months.

[36] In the three month period between 12 March 2015 and 12 June 2015 Ms Eskaf would have earned $8892 from her employment with J&L Salons.

[37] In the same period Ms Eskaf was employed for nine weeks and earned $4500 from other employment.

[38] The amounts are known so I am not satisfied that there is any need to make a deduction for contingencies.

[39] I do not consider that any misconduct has been established so I make no deduction for that reason.

[40] I have not included any component for hurt or distress.

[41] There are no other matters I consider relevant.

[42] The amount of compensation I will order is therefore $4,392. The amount should be paid within fourteen days with appropriate taxation deducted. J&L Salons is at liberty to apply for a variation to the order in respect to the time period for payment. The Order is published separately.

COMMISSIONER

Appearances:

Ms M Eskaf appeared for herself.

Mr A Flower appeared for the Respondent.

Hearing details:

2015

Melbourne

July 6

Printed by authority of the Commonwealth Government Printer

<Price code C, PR569549>