Ms Natasha Baker v The Trustee for Theo Sourlos Family Trust No. 2 T/A Three Beans and a Chef

[2016] FWC 3641

[2016] FWC 3641

Please find attached the re-filed Decision of [2016] FWC 3641, which was originally filed on 7 July 2016.

The decision published on 7 July 2016 inadvertently omitted the time period within which the amount the employer was required to pay in compensation must be paid.

The re-filled Decision has been amended to correct this irregularity by inserting the following sentence at the end of the last paragraph of the decision: “This amount must be paid within 7 calendar days from the publication of the order.”

An order in the same terms will be filed.

Please discard your original and replace with the attached. 

Sarah McBean

Relief Associate to Senior Deputy President Richards

22 July 2016

[2016] FWC 3641

FAIR WORK COMMISSION

DECISION

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

Ms Natasha Baker
v
The Trustee for Theo Sourlos Family Trust No. 2 T/A Three Beans and a Chef
(U2015/16243)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 7 JULY 2016

Summary: application for relief from unfair dismissal – dismissal unfair – remedy – Applicant ill-disposed towards employer.

[1] This decision concerns an application by Ms Natasha Baker under s.394 of the Fair Work Act 2009 (“the Act”) by which means Ms Baker is seeking an unfair dismissal remedy in relation to the termination of her employment as Manager of the Trustee for Theo Sourlos Family Trust No.2 trading as ‘3 Beans and a Chef’(“the employer”). The business comprises a coffee shop located near Townsville, Queensland. Mr Theo Sourlos is the relevant Director of the Trustee Company, and is the person who is alleged to have terminated Ms Baker’s employment.

[2] There was initial argument as to the true legal identity of the employer. That matter was put to rest by the provision of corporate documentation demonstrating that the Trustee for Theo Sourlos Family Trust No.2 trading as ‘3 Beans and a Chef’ was in fact Port Douglas Investments ATF the Theo Sourlos Family Trust No.2.

[3] A further argument arose as to whether the employer was a small business employer for purposes of s.23 of the Act. If so, the employer was able to have the matter determined against the terms of the Small Business Fair Dismissal Code (“the Code”). I will return to this matter further below.

[4] To return to the merits consideration, Ms Baker was initially employed as a chef and cook coffee shop, having commenced employment on 15 September 2014. At the time of her alleged dismissal on 8 November 2015, Ms Baker performed the role of Manager, a position to which it appears, Ms Baker was appointed upon Mr Sourlos leaving Townsville to start up another café at Airlie Beach in Qld. In this respect she claimed that her main duties included “doing staff training”, arranging for wages payments and ordering of stock, which included foodstuffs, drinks and cleaning materials. Ms Baker performed this role principally in the period September 2014 to October 2015. Mr Sourlos kept in contact with Ms Baker over this period but only returned to Townsville intermittently, it would appear, in the intervening period.

[5] According to Mr Sourlos, Ms Baker did not competently perform her role as Manager during his extended absence. Upon Mr Sourlos’ return, Ms Baker faced a series of allegations made by Mr Sourlos. They were, in summary at least, as follows.

[6] Mr Sourlos complained that in the course of Mr Sourlos’ absence, Ms Baker had allowed the state of cleanliness of the coffee shop to deteriorate to the point that the coffee shop was at risk of being closed down by Health Inspectors.

[7] Mr Sourlos complained that upon his return, Ms Baker had undertaken to improve the state of cleanliness of the coffee shop and was warned that this was an issue that was critical to her employment. Mr Sourlos stated that Ms Baker had indicated that she would improve the state of cleanliness of the coffee shop.

[8] Mr Sourlos also contended that he and his bookkeeper - Ms Ruth Fearnley - had repeatedly warned Ms Baker that she was not providing the turnover figures on a timely basis and that the turnover figures regularly were 6 to 8 weeks late, and it was impossible to get an accurate picture of whether the coffee shop was trading profitably, or if there had been over ordering of stock.

[9] It was also contended by Mr Sourlos that Ms Baker had been warned that there were strict working hours, but Ms Baker had not complied with these requirements. Mr Sourlos claimed that staff had informed him that Ms Baker was not attending work during the prescribed hours. Ms Fearnley, through her evidence, claimed that staff had informed her that Ms Baker did not start work until 9.00 AM but that she was claiming wages for those days from 7.00 AM in the morning.

[10] In the course of her role as manager, Mr Sourlos maintained that the coffee shop’s takings slumped dramatically and there had been negative feedback from customers regarding the lack of cleanliness and the unpleasant environment in the coffee shop.

[11] Mr Peter Patchell, who visited the restaurant with his family, initially observed an unsettling argument between the Chef and the Manager, and then observed that:

“[…] the cafe was extremely dirty, tables not cleared, dirty floors, newspapers left lying around the couch area etc.”

[12] Mr Patchell was a business associate of Mr Sourlos. He had previously emailed Mr Sourlos about the same dining experience at the café in Mr Sourlos’ absence, but in that correspondence had made no reference to the café’s state of cleanliness.

[13] Mr Sourlos construed the downturn in takings to be the result of the lack of supervision of staff by Ms Baker (in light of her attendances) and the decline in the standards of cleanliness in the coffee shop.

[14] Such was the condition of the coffee shop, so Mr Sourlos complained, that he had to “conscript staff members to help totally re-clean the premises and make them fit for use”. Mr Sourlos claimed that this process took two weeks.

[15] Mr Sourlos further claimed that Ms Baker provided an admission as to the issue of the state of the cleanliness of the shop in a text message to him on 23 October 2015 which read:

“Theo I do realise I have been slack in the cleaning side of things with the shop and I do apologise for that. If I still have a job I do promise to keep on top of it. We will be home on Sunday. But I will come in for yarn on Monday some time.”

[16] As evidence of the concern about the downturn in trading, Mr Andrew Stevens, principal of Crowe Horwath (Aust) and accountant for the Trust, gave evidence that he became concerned about the “large discrepancies in cash takings” after such time as Mr Sourlos had left Townsville in late September 2014. He also observed as follows:

“I prepared the accounts based on bookkeeping work undertaking by Bookworms Bookkeeping [Ms Fearnley] and I was aware it became very difficult for Bookworms Bookkeeping to keep up the reconciliation of receipts, invoices and takings as they were frequently 4 to 6 weeks late.”

[17] Mr Stevens also gave evidence that he was aware that the level of stock appeared to be increasing irrespective of the evident decline in turnover, and the cost of the products used exceeded the reported takings on a given day.

[18] Mr Stevens found this difficult to explain, particularly given that the Airlie Beach coffee shop was a separate trading entity to that in Townsville. As a consequence the Airlie Beach coffee shop conducted its ordering through a separate supplier and there was “no intermingling of stock between the two businesses.” The wider evidence showed that products prepared in ‘3 Beans and a Chef’ were dispatched (under refrigerated transport according to Mr Sourlos) to the Airlie Beach café for sale.

[19] Mr Sourlos also complained that Ms Baker in her role as Manager had paid an employee in cash when such a payment had not been indicated in a reduction in till takings or banking. Mr Sourlos also contended that Ms Baker did not record any timesheets for another employee, Mr Owen Baker, who was working very long hours at the business. Mr Sourlos and Ms Fearnley had been unable to reconcile how Mr Owen Baker was treated in the accounts by Ms Baker in her role as Manager. Ms Baker for her part counter-argued that Mr Sourlos was responsible for hiring and paying Ms Baker a daily payment and that she had no responsibility for the situation. This matter was not pursued at the hearing to any substantial extent.

[20] Ms Baker set out in her witness statement a variety of claims regarding Mr Sourlos’ conduct, which were added to by her witnesses. A number of these claims went to Ms Baker’s defence against the above claims by Mr Sourlos. Still others were directed at Mr Sourlos’ personal habits and dispositions, which Ms Baker (and other of her co-workers) found objectionable, and which reflected, it was held, on Mr Sourlos’ credibility as a witness.

[21] Ms Baker claimed Mr Sourlos had a reduced attendance at the coffee shop upon his departure to Airlie Beach in late 2014. Her viva voce evidence revealed that she believed that he visited the coffee shop some 6-9 times over 2015 and then for short periods only. In the period prior to his departure, Mr Sourlos was said by Ms Baker to have been stressed because of financial pressures and legal actions taken against him. He was said by Ms Baker to sit in the booth seats in the customer service area and would drink between 1 to 3 bottles of wine per day, and would yell at chefs to get him food for his meals. Mr Santarossa, a co-worker of Ms Baker’s at the coffee shop, considered that Mr Sourlos was a “big drinker and he had a bad problem with drinking [and had] seen him finish off three bottles of wine in one day in the workplace.” Mr Santarossa also claimed that Mr Sourlos would order him to pour him a glass of wine (even though he was underage).

[22] Such was his consumption of alcohol at the work premises that Ms Baker had observed that he had been “drunk or close to it on numerous occasions” and had to be driven home as a consequence.

[23] Mr Sourlos was said by Ms Baker and Mr Santarossa to have had some particularly unhygienic personal practices which put at risk of the health of customers. This is particularly the case where a personal sweat cloth was also used to wipe tables, so they alleged.

[24] Ms Baker also alleged that Mr Sourlos disclosed “gory details about his sex life”, which she did not wish to hear, and at another time made a suggestive and unsavoury comment to her (which was overheard by staff - such as Mr Ellevsen and Santarossa and Mr Benjamin Alcorn - and allegedly also by members of the public attending the cafe).

[25] Mr Sourlos was also said to have exhibited questionable judgement in allegedly forwarding to Ms Baker by email a semi-nude photograph, which was said to be an image of himself as a much younger man. It was claimed that Mr Sourlos requested or else suggested to Ms Baker that the photograph be enlarged and put in a frame and placed on the wall inside the coffee shop. Ms Baker declined. Ms Baker also claimed in her viva voce evidence that Mr Sourlos had made a particularly offensive comment in relation to the photo when he became aware that she had received it. This comment – in extreme and explicit terms – did not appear in Ms Baker’s written statements, and was not alluded to therein either. No other witnesses referred to this comment or overheard it either.

[26] Mr Santarossa, then a young member of staff, recalls also having been shown the photograph which he believed to be a photograph of Mr Sourlos when he was much younger. Mr Santarossa claimed he “couldn’t stop laughing” when he was shown the photograph.

[27] Mr Sourlos contended he had sent no such photograph to Ms Baker and whilst the email address in question was his, the photograph itself was not at his inclusion and appeared to have been manipulated for reason of the file size.

[28] Ms Baker also claims to have been underpaid by Mr Sourlos. This is a matter Ms Baker will need to pursue through an avenue other than this application.

[29] Regardless of all of the above, and her attitude towards Mr Sourlos, as revealed in her wider evidence (to which I will refer below), Ms Baker claimed that “Theo and I had, in my opinion, a fairly good working relationship” and he would disclose his personal, familial and financial issues to her. In her viva voce evidence, Ms Baker also described her relationship with Mr Sourlos as being friendly and sharing and that she took steps to be “nice” to him. At other times however, Ms Baker contended she only pretended to be affable.

[30] Ms Baker claims that in late 2014, Mr Sourlos established a new business at Airlie Beach (“Luv a Coffee”), and a significant proportion of the food prepared for that new business was sourced from 3 Beans and a Chef, and came out of its budget. Ms Baker claimed that Mr Sourlos would often purchase products for which there was no demand so that the coffee shop would be oversupplied and the products would “go mouldy or would go off quickly”. That is, she was not responsible for any over ordering issues and claims by Mr Sourlos to the contrary were ‘absurd’.

[31] Ms Baker claimed that Mr Sourlos transported the food (savoury mints, large trays of lasagne, and lambs fry and bacon etc.) on the back seat of his car to Airlie Beach, some hours travel away. This claim was strongly rebutted by Mr Sourlos on the basis that he transported the food to a refrigeration transportation company in Townsville, for transfer to Airlie Beach. Mr Sourlos provided documentary evidence of his use of the refrigerated transport provider for this particular purpose.

[32] Ms Baker also claimed that despite Mr Sourlos’ claims to the contrary (see below), the business premises were always clean and tidy and were regularly inspected by the Townsville City Council. No negative assessment had been made on any occasion by the City Council.

[33] Mr Santarossa and Mr Vern Ellevsen (see below) as former employees both gave evidence that their personal observations were that the shop was kept in a clean state.

[34] Ms Baker recalled that on 12 October 2015 she commenced two weeks of annual leave.

[35] Prior to Ms Baker taking annual leave, upon Mr Sourlos’ return to the Townsville café (3 Bean and a Chef) in late 2015, Mr Sourlos had never made any comment to Ms Baker - so Ms Baker claimed - about the condition or cleanliness of the coffee shop. First Ms Baker claimed to have been informed that the coffee shop was not in the desired state of cleanliness was some 11 days into her holidays. It was at this time that Mr Sourlos contacted her by telephone (on 23 October 2015) and informed her that 3 Beans and Chef “was filthy”.

[36] Ms Baker claimed that she acknowledged some measure of uncleanliness in a reply text message. But she stated that what she had in mind in this respect was that she had knowingly left the refrigerator compressor uncleaned (despite Mr Sourlos having asked her to clean the refrigerator before her departure). Ms Baker claimed that her apology was not an open apology but restricted to her confusion as to how to go about cleaning the refrigerator compressor, which she had never done before and about which she had safety concerns.

[37] Mr Sourlos also raised in his documentation as filed, that there were “unexplained cash deficiencies in the accounts”, which had occurred during Ms Baker’s tenure as Manager. Ms Baker for her part argued that she was unaware of any such deficiencies and none had ever been brought to her attention. In any event, Ms Baker argued that she worked on a roster over 5 days a week and there were other employees who had access to the cash register, who were rostered at different times and on other days over the week on which she did not work.

[38] Ms Baker claims that she had fully complied with her employer’s requests for information on the turnover of the café. She provided, mostly on a fortnightly basis, to the bookkeeper – Ms Fearnley - a spread sheet outlining revenues/sales and outgoings (expenses). In so doing, Ms Baker detailed EFTPOS takings, cash takings, daily spending, bills paid, and the final cash tally at the end of each week.

[39] Mr Sourlos, was said by Ms Baker to be intermittently in Townsville over the course of his year-long absence (between 6 – 9 times). Mr Sourlos in his evidence claimed he had returned about six times. Despite this, Mr Sourlos at no time asked Ms Baker to provide any information on the business, or raised any issues about cash handling practices, or expressed any concern about turnover.

[40] Ms Baker claimed that she had observed Mr Sourlos removing cash from the register “and place it straight into his wallet” the Sunday prior to her taking annual leave. In fact, Ms Baker contended that she had observed Mr Sourlos remove cash from the till “on many occasions when he came to Townsville”. Mr Santarossa and Mr Alcorn gave evidence to a similar effect. Ms Baker was unaware whether Mr Sourlos had reconciled the books taking into account these cash withdrawals (given that Mr Sourlos was responsible for completing the reconciliations during these periods). Mr Sourlos denied such conduct and claimed cash was removed from the till to pay for consumables and was duly receipted.

[41] Mr Sourlos had also contended that “there appears to have been an attempt to interfere with the point-of-sale cash recording” during the time Ms Baker was managing the coffee shop. Ms Baker asserted that she had no idea what Mr Sourlos was saying in this regard and she had never attempted to interfere with the cash register or its workings in any way over the course of her employment. Ms Baker argued simply that she had no knowledge of how to interfere with such equipment in any event. Nothing was put into evidence about any technical interactions in the operation of the electronic till, and the point was not elaborated upon in Mr Sourlos’ evidence in chief.

[42] Ms Baker also rebutted Mr Sourlos’ complaint that Ms Baker had been absent from the workplace for considerable periods of time in circumstances which were “unexplained”. Ms Baker contended that Mr Sourlos was well aware of the particular and personal reasons for her absences at various times and this had been discussed openly with him, and he had been particularly sympathetic towards her. Other than that, however, Ms Baker was aware of no other circumstances in which her absences from work had been unaccounted for, and was adamant that Mr Sourlos had never raised any issue about attendance with her at any time in the course of her employment.

[43] Mr Sourlos had also made allegations that Ms Baker had been closing the shop earlier than its normal trading hours. Ms Baker claimed that this was a completely unsupported assertion and that the hours the shop had been 7 AM - 4 PM Monday to Saturday and 7 AM - 3 PM on Sundays, and she was always there before 7 AM on her rostered shifts and did not close before the normal closing time. Ms Baker also contends that Mr Sourlos should have known this because he was frequently on the phone to her over the course of the day. Mr Sourlos did concede in the course of his viva voce evidence that he telephoned Ms Baker multiple times each day.

[44] Ms Baker also faces an allegation that in the course of her time as Manager “the turnover of the business rapidly decreased to the point where it was less than $5000 a week”. Ms Baker claimed that this was an unsustainable contention on Mr Sourlos’ part because as she was responsible for compiling the spread sheet relating to sales and expenditures, she recalls only one particular week in which there were public holidays that the shop took less than or around $6000. Again, Ms Baker argued that Mr Sourlos had never raised with her any concern whatsoever about the apparent decrease in takings whilst she was a manager, noting that they spoke of the take each day and Mr Sourlos returned to the coffee shop 6 – 9 times over the year.

[45] Ms Baker claimed that upon returning from leave in early November 2015 (following Mr Sourlos having made allegations about the state of cleanliness of the coffee shop), her managerial role ceased (with Mr Sourlos having returned), and her wage rate was cut from $25 p/h to $20 p/h (a point denied by Mr Sourlos who claims her rate remained at $20 p/h and the higher rate had applied for a short period only in relation to night work). Ms Baker also claimed her hours were reduced from 40 to 60 hours a week to 10 hours a week. There was no consultation in respect of these changes.

[46] Ms Baker also discovered that a new employee had been appointed, who had apparently worked with Mr Sourlos at the Airlie Beach coffee shop. Ms Baker apparently suggested to the new employee that as a result of her reduced hours she would need to obtain find additional work. A short time later, , Ms Baker received the following text message :

Hi Tash, Theo here, please return keys and uniforms I (sic) wed, nice to know you (sic) moving to your new venture and so I my (sic).

[47] Ms Baker claims that this was the manner in which she was informed that she had lost her job at the coffee shop. She duly returned her keys and uniform the same morning.

[48] Mr Sourlos for his part claimed the dismissal was a result of the cumulative effect of multiple failings on Ms Baker’s part, broadly stemming from her mismanagement of the coffee shop over 2015 and her disinclination to work cooperatively with him on her return from authorised leave.

[49] Following her alleged dismissal, Ms Baker also discovered that whilst her payslips indicated a superannuation contribution had been made of the course of her period of employment, her superannuation fund indicated that there had been no deposits by her employer in that time. Mr Sourlos claimed to be unaware of this situation and he vested responsibility in his accountant for making such payments to employees.

[50] I add at this juncture that there were other witnesses led by Ms Baker. One witness was Mr Verne Ellevsen.

[51] Mr Ellevsen was not a direct witness of events or circumstances relevant to Ms Baker’s conduct or performance. Mr Ellevsen was dismissed from employment by Mr Sourlos in January 2015.

[52] Mr Ellevsen otherwise did give evidence that Mr Sourlos disregarded safe food practices, underpaid him, at the Airlie Beach, was a “heavy drinker”, gambled wantonly, and was otherwise generally poorly behaved.

[53] Mr Ellevsen stated that he had visited the Townsville coffee shop after his dismissal in January 2015 and found it to be “neat, clean and tidy.”

[54] Mr Sourlos discounted Mr Ellevsen’s evidence on the basis that he was a disgruntled employee who had been dismissed following Mr Ellevsen having allegedly attacked Mr Sourlos with a knife in the accommodation they shared together. Mr Sourlos otherwise claimed that Mr Ellevsen’s claims were entirely erroneous. For example, Mr Sourlos claimed he did not gamble in the manner suggested by Mr Ellevsen (which was greatly exaggerated) and that Mr Ellevsen had also fabricated claims about his food handling practices for ulterior purposes.

[55] Ms Jane Beth Ballin also gave evidence for Ms Baker. She made a number of personal observations about Mr Sourlos. Mr Sourlos claimed that there could be no reasonable foundation to such observations because Ms Ballin had been employed from February 2015 until December 2015. Thus there had only in effect been a two month period (November to December 2015) in which she had of been able to observe Mr Sourlos as he had otherwise been in Townsville for the vast majority of that time.

[56] Mr Benjamin Alcorn worked as a chef between September 2014 and August 2015 at 3 Beans and a Chef. He was concerned about Mr Sourlos’ personal hygiene and disregard for food safety practices. Mr Alcorn gave evidence to this the same effect as other witnesses have above. He made claims that Mr Sourlos transported lasagne and shepherd’s pie to the Airlie Beach cafe in the back of his car (though he did not know what happened with the product after it left the premises); he witnessed Mr Sourlos consume large amounts of alcohol (at least in the one instance he recalled shortly after commencing employment); claimed Mr Sourlos had a white towel hanging around his neck for his personal hygiene as well is wiping clean the tables; and recalled Mr Sourlos taking money out of the cash register directly.

[57] Mr Sourlos claimed that Mr Alcorn could not reasonably make the claims that he made because there was only a short period in which they shared common time at the workplace before such time as Mr Sourlos moved to Airlie Beach. Otherwise, Mr Sourlos claimed that Mr Alcorn’s comments and observations were either irrelevant or plainly wrong. Mr Sourlos claimed that he did carry a white towel over his shoulder - as a customary affectation - but he did not use in for wiping tables in the café.

[58] I do at this point, somewhat unusually, make an observation about Mr Alcorn and Mr Santarossa’s evidence as presented in these proceedings. When Mr Alcorn’s evidence was subject to cross examination, Mr Alcorn made a number of irreconcilable claims in relation to whether he was aware Mr Sourlos was working in Airlie Beach, setting up a new coffee shop, ‘Luv a Coffee’ and over what time periods he witnessed Mr Sourlos’ conduct. Mr Alcorn appeared to me to have fabricated his evidence in relation to Mr Sourlos’ whereabouts, and I put these issues to him in the course of his evidence.

[59] Mr Alcorn appeared excessively anxious to establish that Mr Sourlos was sufficiently in attendance at the Townsville coffee shop for his to have an extended opportunity to appraise Mr Sourlos’ conduct. Regardless of what Mr Alcorn’s motivation might have been, his recollections as to his period of employment and of the chronology applying to his observations of Mr Sourlos were unacceptably confused and contradictory. Mr Alcorn had no reasonable explanation for his various competing claims.

[60] I will disregard both Mr Alcorn’s evidence in my considerations below as a consequence as having heard Mr Alcorn’s evidence I consider it to be based on an unreliable body of recollection.

[61] I make a similar point about Mr Santarossa’s evidence. He too endeavoured to establish the fact of Mr Sourlos’ lengthy stays in Townsville for the same purpose as Mr Alcorn, but fell into contradiction, inconsistency with Ms Baker, and hearsay when pressed under examination. His evidence is not reliable for this reason.

[62] Mr Mark King gave evidence that he had been a customer at the coffee shop for a 12 months period and had come to know Ms Baker in that context. He held the coffee shop environment had been very amenable for families and the standard of cleanliness very high.

[63] Before turning to determine the question as to whether Ms Baker’s dismissal was harsh, unjust or unreasonable, I am obliged under the Act to consider whether the Small Business Fair Dismissal Code has application in the circumstances.

Relevance of Small Business Fair Dismissal Code – s.388 of the Act

[64] The Fair Dismissal Code declared by the Minister under s.388(1) of the Act is set out below.

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.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee's conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

[65] There was substantial argument between the parties as to whether or not Mr Sourlos’ business constituted a small business. In the end the employer did not make out its case in this respect and conceded it indeed had 15 employees at the relevant time. Notwithstanding this concession it remained unproven that all the employees were employees of the kind specified at s.23 of the Act. That is particularly so in relation to the casual employees about whom there remained considerable uncertainty as to whether they were employed on a regular and systematic basis. Even if it were to be assumed that the case had been made out, the Small Business Fair Dismissal Code (Summary Dismissal provisions) would have no application to the circumstances before me.

[66] This is because the Summary Dismissal provisions have no application as the circumstances relating to Ms Baker’s dismissal. Mr Sourlos did not effect Ms Baker’s dismissal in a manner that was reflective of him acting on the basis of an imminent threat to the viability or profitability of his business, let alone for any extreme conduct issue on Ms Baker’s part.

[67] Mr Sourlos claimed to have been aware of the circumstances relevant to Ms Baker for some considerable period of time but had elected not to act with any urgency in respect of those circumstances. Mr Sourlos had concerns, on his evidence, that Ms Baker was not providing turnover results on time for a lengthy period, but there is no evidence that he took this to be such a serious concern that he was compelled to act on it as a matter of urgency in the interests of his business.

[68] Mr Sourlos held no reasonably founded belief that Ms Baker had been stealing or otherwise misappropriated business funds. He conducted no reasonable investigation that established a reasonable concern in this regard. So far as the claim was never pressed with any evidentiary effort, it is reasonable to presume Mr Sourlos’ concerns amounted to no more than a suspicion.

[69] Equally, Mr Sourlos returned on his evidence from Airlie Beach in late 2015. He claimed through his viva voce evidence that very soon thereafter he spoke to Ms Baker about the poor standard of cleanliness. Effectively the next day Ms Baker left on prior agreed leave. Sometime later – around two weeks or so – Mr Sourlos rang Ms Baker and complained about the poor state of cleanliness of the café once more. When Ms Baker was on her way back to Townsville from leave, Mr Sourlos again spoke to Ms Baker, and in the course of that conversation Mr Sourlos indicated he would speak to Ms Baker on her return about the issues that had come to cause him concern. It was at this juncture that Ms Baker sent the SMS text to which I have referred earlier. However, upon returning to work in the kitchen, on reduced hours (given Mr Sourlos had reassumed the role of Manager), Ms Baker was not in actuality dismissed until some three or so days later, and then in the added context that Mr Sourlos considered Ms Baker was now adding to staff disaffection. Ms Baker was not dismissed until 9 November 2016. It is not possible therefore, to contend that Ms Baker’s dismissal was by necessity or definition a summary dismissal based on an imminent risk of the relevant type, or an urgent and compelling response relating to misconduct.

[70] Hungerford J in Pastry Cooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70, (“Gartrell White”) observed that in cases of summary dismissal, the onus falls to the employer respondent to prove the conduct as alleged occurred:

“[158] The right of an employer to summarily dismiss an employee without notice is qualified by the employee inter alia having committed an act of misconduct; thus, to be able to rely upon the right, and to pay the employee up to the time of dismissal only rather than terminate by notice or payment in lieu of notice, the employer must not only allege misconduct but must also prove it.”

[71] Equally, it is necessary to have regard to the extent or true nature of misconduct that justified summary dismissal. It cannot be reasonably concluded that Ms Baker’s conduct had been such that it warranted dismissal without notice, given the context I have set out above. Ms Baker’s conduct was not so extreme as to be fundamentally contradictory to the interests of the business.

[72] Further, there is no evidence that Mr Sourlos effected Ms Baker’s dismissal in accordance with the provisions of the “Other Dismissal” (as set out earlier).

[73] The evidence (which I discuss below) shows that Mr Sourlos did instruct Ms Baker to undertake cleaning of the coffee shop. Ms Baker, at the very least, inferred from what Mr Sourlos had said to her in this regard that the issue was one that had implications for her continuing employment. If this had not been so then Ms Baker would have had no need to refer to its state of cleanliness in her text message to Mr Sourlos, or to have shown real apprehension about whether she remained employed or not.

[74] But this finding only goes so far in satisfaction of the “Other Dismissal” category under the Small Business Fair Dismissal Code.

[75] Mr Sourlos did not provide, in accordance with the Code, Ms Baker with an opportunity to respond to the warning and give her a reasonable chance to rectify the problem, having regard to her response.

[76] No such opportunity was provided for rectification and no further training or advice was provided either, in accordance with the Code.

[77] Mr Sourlos led no evidence as to compliance with the Code, such as presentation of the completed Fair Dismissal Checklist or otherwise.

[78] For these reasons, the Small Business Fair Dismissal Code had no application to the current circumstances and Mr Sourlos could not claim its defence.

[79] Because of this, the question as to whether or not Ms Baker’s dismissal was harsh, unjust or unreasonable must be answered taking into account the matters set out at s.387 of the Act.

[80] I do add at this juncture, and before proceeding further, that Mr Sourlos’ business constitutes a national system employer and Ms Baker is therefore a person protected from unfair dismissal for the Act’s purposes. Ms Baker’s application, therefore, is jurisdictionally competent.

Section 387 of the Act

[81] Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable. Section 387 is as follows:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

Consideration

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)

[82] The witnesses in this matter made a very wide range of claims in relation to Mr Sourlos’ professional personal conduct. Not all that evidence is relevant to the application at hand and any purported findings in that regard would be beyond jurisdiction. It is to the relevant question, whether Ms Baker was harshly, unjustly or unreasonably dismissed, that I turn.

[83] Mr Sourlos maintained that Ms Baker was dismissed, amongst various other reasons, for failing to maintain the coffee shop in a sufficiently clean state.

[84] The evidence in this regard is mixed. Some witnesses - those for Ms Baker - claimed that the coffee shop was in a high state of cleanliness. The witnesses Mr Sourlos were quite to the contrary, and claimed that the coffee shop had deteriorated under Ms Baker’s management.

[85] I think on the balance of probability is more likely the case that the coffee shop fell into a less clean state under Ms Baker. Ms Baker’s text message (of 25 October 2015) to Mr Sourlos indicated Ms Baker was conscious of the coffee shop’s state of cleanliness. Ms Baker attempt to write down the scope of meaning of the text message she sent to Mr Sourlos concerning this very matter (by arguing she was referring to the compressor behind the refrigerator and not in a general sense the coffee shop as a whole). But her explanation in this regard was entirely unconvincing. Her text message conveyed no such limiting context at all. And if she had intended the circumstance to be so limited, why would she reasonably have considered her job to be in jeopardy as a consequence? Ms Baker only explained her conduct as an attempt to “kiss some ass”.

[86] What is evident, therefore, from Ms Baker’s text message to Mr Sourlos is that the condition of the coffee shop had been the subject of a discussion of some kind between Mr Sourlos and her, immediately prior to Ms Baker’s departure on annual leave, and the issue warranted Ms Baker herself acknowledging (through her text message to Mr Sourlos) that there was a possibility of her dismissal as a result of that issue. This, of course, may have been a comment made in response to an expectation created by Mr Sourlos’ disposition, and not the expression of Ms Baker’s subjective view of her own conduct.

[87] There is little to add to the competing observations about various visitors to the coffee shop, other than to note that they may have witnessed the coffee shop in varying states of cleanliness overtime. The witness evidence in this respect is not capable of alignment in time or sufficiently comprehensive to build an evidenced case one way or another. Mr Sourlos claimed he had to make very considerable efforts to return the café to an appropriate state, including restitching the material used in the booths, but there was no supporting evidence for these claims (such as receipts for services).

[88] But having found that there was an issue of some marked measure in relation to the cleanliness of Three Beans and Chef, I do not consider that the failure to maintain (to whatever extent) the cleanliness of the coffee shop on its own was fatal to Ms Baker’s employment. The actual state of uncleanliness was never made out in any decisive manner over the course of the hearing. There was no infraction of food safety laws during Ms Baker’s period of management to which I was referred.

[89] The evidence is sufficient to demonstrate that periodically over the course of the year Mr Sourlos returned to Three Beans and a Chef some 6 – 9 times, and was in a position to assess its state of cleanliness and to give directions to Ms Baker.

[90] It is difficult to conceive of Mr Sourlos having overlooked the decline in cleanliness in the shop during these periods when he returned to Three Beans and Chef, or that if there were revenue losses because of the poor state of the business premises and that corrective action was warranted he would not have raised this with Ms Baker. If the state of cleanliness of the coffee shop was affecting revenues, reasonably Mr Sourlos would have identified this circumstance at a much earlier time in 2015 than he did, and raised it with Ms Baker. Indeed Mr Sourlos’ evidence was that he had become concerned about the decline in turnover in 2015, but he appears not to have taken any steps to address this important concern.

[91] I think it is reasonably the case that while an issue of the standard of cleanliness of the coffee shop had been raised by Mr Sourlos as a point of concern and about which on one occasion he sought Ms Baker’s assistance in remedying. But beyond that, there is no evidence to support a conclusion that the issue was a matter that was a valid reason for Ms Baker’s dismissal in its own right.

[92] As I have suggested above, Mr Sourlos also claimed that there was a decline in revenue over the course of Ms Baker’s tenure as Manager of 3 Beans and a Chef. On the evidence led, there was no such basis for this observation. Given the café had only operated for a few months before Ms Baker became Manager, comparisons on an annual or financial year basis were not possible. Where there were efforts to compare turnover across the periods in which Mr Sourlos was Manager and Ms Baker was Manager, this point of comparison did not produce a compelling case in Mr Sourlos’ favour. Indeed, the only period in which there appears to be an increase in turnover under Mr Sourlos’ managerial control was when Mr Sourlos initiated an advertising campaign.

[93] Similarly to my observations about the cleanliness of the café, if Mr Sourlos had observed that the café was underperforming over 2015, then reasonably he would have addressed the issue with Ms Baker in any one of the multiple telephone conversations or any one of the 6 – 9 occasions on which he returned to Townsville over the year.

[94] To this I add that even if there had been a decline in revenue in 2015, it would be difficult in an objective sense to attribute this to a single identifiable factor. Consumer confidence in the local Townsville economy, for example, may be a primary cause of changes in turnover rather than consumer reaction to the alleged changing presentation of the café.

[95] The claim that there were monies unaccounted for in the business was never articulated as a specific allegation directed at Ms Baker, and never made out in any event. Reference was made to the float maintained in the café, but ultimately the relevance of this matter was not effectively made out and the evidence led about the exact quantum of the float was left uncertain. I disregard these claims, and implied claims, as having any relevance to whether there was a valid reason for Ms Baker’s dismissal.

[96] Further, while there were claims that Ms Baker had not furnished the coffee shop’s revenue and expenses reports on time, there was no evidence this matter, even if it was capable of demonstration, amounted to a reason for dismissing Ms Baker. Ms Baker claimed she provided the relevant documentation as required and Mr Sourlos was unable to take to any particular occasion on which he had expressly confronted Ms Baker with her failure to meet his expectations in this regard. If the concern was of such fundamental importance to the business, as Mr Sourlos claimed it was, then it is difficult to comprehend why it had no standing in what were regular and daily interactions by telephone between Mr Sourlos and Ms Baker, or else during times at which he returned to Townsville over 2015.

[97] The examination of the materials relating to the employees’ till practices during Ms Baker’s tenure as Manager gave rise to an issue, not put to Ms Baker at the time, but which reflected on her managerial acumen according to Mr Sourlos.

[98] Before going further, I do add that facts emerging after the dismissal can still have relevance to the justification for the dismissal. I so state in light of the authorities set out in my decision in Luke Johns v Brisbane City Council [2008] AIRC 230, which dealt with facts regarding any employee’s conduct which only became known following the dismissal.

[99] In the current case, the post dismissal facts that became available gave evidence of many instances over the course of Ms Baker’s period as Manager in which transactions were cancelled or voided. Ms Baker indicated that she was unaware of these occurrences and did not take any steps to identify staff conduct when she examined the till slips at the close of business each day.

[100] This issue is an important one in relation to the business’ risk management strategy. If staff were to accept cash for a meal, provide a receipt and then void the transaction on the till they could effectively steal the cash (as provide din payment of the meal). Under cross examination, Ms Baker accepted that she had responsibility for ensuring the staff used the cash register accurately, but otherwise she trusted the staff under her management to act appropriately.

[101] I make further findings in relation to this matter below.

[102] Firstly, what is apparent from these circumstances is not that Ms Baker was a poor manager, but that she was not qualified to be a Manager in the first instance. Ms Baker was rapidly promoted to the position of Manager after a very short time as a junior employer by Mr Sourlos on account of his need to attend to a further business he had established in Airlie Beach. She did not apply for a job as Manager and did not present as one. The only job advertisement that came into evidence in relation to Ms Baker’s recruitment did not require any managerial responsibilities or experience. Ms Baker had no experience as a manager in any formal context. She was not trained as a manager. She did not, for example, grasp the significance of risk management in a cash business. Ms Baker simply trusted her staff, and that was her approach to managing risk in a cash transaction environment. If she had had any elemental experience she would have monitored the practices of her staff in voiding and cancelling transactions (a mechanical practice in respect of which she claimed to be unaware in any event given her naiveté in relation to the operation of the electronic till).

[103] Ms Baker was not provided anything but rudimentary training by Mr Sourlos, and no professional training at all relating to managing a business. The issues of managing risks in a largely cash-based business appear never to have been mentioned to Ms Baker.

[104] If Mr Sourlos’ business was left with an untrained and inexperienced Manager in charge, then it was a result of his own business judgment.

[105] But further to this, Mr Sourlos claimed Ms Fearnley had brought the issues of the high incidence of voiding and cancellations in the till to his attention over 2015. If she had it is surprising that Mr Sourlos did not mention his concerns to Ms Baker. That said, Ms Fearnley’s evidence under cross-examination was that she had no awareness whatsoever of the till practices and she never scrutinised the till receipts to that extent. Thus, contrary to Mr Sourlos’ claims, Ms Fearnley could not have brought any concerns to Mr Sourlos’ attention over 2015 in relation to the staff till practices under Ms Baker’s management.

[106] I do not consider the post-dismissal facts relating to the oversight of the cash handling practices in the business to provide a valid reason for Ms Baker’s dismissal.

[107] There is no valid reason, either, for Ms Baker’s dismissal in relation to the allegation she did not provide revenue-expenses reports on the basis her employer had directed. Ms Baker appears to have met Mr Sourlos’ requests to provide daily updates to him and to forward hard copies of the receipts to Ms F on a periodic basis.

[108] Mr Sourlos claimed that over ordering of stock was the result of Ms Baker’s poor business judgment, in effect. But as Mr Sourlos was responsible for approving stock orders, and amended such orders from time to time. Other persons, such as the chefs, also interacted with Mr Sourlos in relation to stock ordering. Ms Baker cannot bear exclusive responsibility for this issue (which was not made out in any documented terms in any event). In any event, the issue was never raised with Ms Baker over the 12 month period in which she was the manager.

[109] There is no valid reason for Ms Baker’s dismissal in relation to the allegation she over-ordered stock.

[110] As set out earlier, there were further claims that Ms Baker had misrepresented her working hours to her employer, and that co-workers had provided information in this regard. But no evidence was led over the course of these proceedings to this end. Ms Baker, I think quite reasonably, held that if her attendance had been as intermittent as alleged then Mr Sourlos would have been unable to contact her over the day as often as he did by telephone, but Mr Sourlos made no claim that end. Further, if Mr Sourlos was genuinely concerned by Ms Baker’s attendance, reasonably he would have mentioned it to her in the course if his multiple telephone conversations each day, or else in the course of any of his multiple visits to the café over the course of 2015.

[111] In all, the claim by Mr Sourlos that Ms Baker was failing to perform he required hours of work was not substantiated.

[112] Finally, over the course of the proceedings, Mr Sourlos claimed that a further reason that caused him to dismiss Ms Baker was that following her return from leave, she acted in an insubordinate manner in her interactions with him.

[113] Mr Sourlos provided no specific instances of Ms Baker’s conduct in this regard. Mr Sourlos held that Ms Baker seemingly turned other staff against him. But Mr Sourlos was unable to articulate any precise instances of misbehaviour or misconduct.

[114] Admittedly, it might prove challenging on an evidentiary basis to substantiate such claims when many of the potential witnesses were subsequently dismissed. Notwithstanding that, Mr Sourlos’ claims regarding Ms Baker’s conduct in the final few days of her employment lack sufficient particularity for me to be satisfied that they comprise an authentic concern

[115] Generally I am not satisfied Mr Sourlos’ various claims amount to a valid reason for Ms Baker’s dismissal.

Whether the person was notified of that reason

[116] As I have not been able to establish that there was a valid reason for Ms Baker’s dismissal, there was no relevant circumstances in which Mr Sourlos was required to notify her of that reason before such time as he acted to dismiss her from her employment.

[117] Notwithstanding that, Mr Sourlos did, it appear, make clear to Ms Baker that he was concerned with the cleanliness of the shop and said enough to her in that context for her to assume that her employment was at risk for that reason.

[118] That said, it does appear that Mr Sourlos had indicated to Ms Baker that he had concerns with the cleanliness of the shop and gave her an opportunity to remedy the situation.

[119] Mr Sourlos does not appear to have notified Ms Baker of any of the other reasons that may have influenced his decision to dismiss her.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[120] Ms Baker is likely to have been informed of Mr Sourlos’ concerns about the cleanliness of the café immediately prior to her departure for leave. But this did not amount to a communication of a valid reason for her dismissal. There was no valid reason as I have found above.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[121] Ms Baker was not provided an opportunity to have discussions in relation to her dismissal or to have a support person in respect of those discussions. Having said as much, because the circumstances did not give rise to such a procedure, there was no contravention (as it were) of this subsection.

If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[122] At least in so far as the dismissal was related to Mr Sourlos’ concerns about the cleanliness of the coffee shop, Ms Baker was placed on notice about Mr Sourlos’ expectations about this matter. Ms Baker’s text response to Mr Sourlos indicated that she was aware that Mr Sourlos’ views were such that should she not achieve the required degree of cleanliness than Mr Sourlos would dismiss her from her employment. However, it cannot be said that the warning was given on the basis of permitting Ms Baker an opportunity to remedy her underperformance.

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

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

[123] Mr Sourlos’ businesses constitute a small enterprise which has no dedicated HRM specialists or expertise. It appears to me to be a reasonable inference that the absence of such expertise affected the manner in which Mr Sourlos went about effecting Ms Baker’s dismissal, and its lack of attention to procedural concerns. The business was run on informal and personal terms with little regard to procedural considerations. Weight must be given to these circumstances.

Any other matters that the FWC considers relevant

[124] There are no other matters to which I have had regard, other than claims that Ms Baker has faced economic loss as a consequence of her dismissal (hardly an unusual consequence of a dismissal), and took a little over two months to obtain further formally paid work

Conclusion

[125] On the materials before me, and taking into account all the circumstances, I am satisfied that Ms Baker’s dismissal was harsh, unjust and unreasonable.

[126] As a consequence of having so found, I will consider the appropriate remedy.

Remedy

[127] Section 390 of the Act reads as follows:

Division 4—Remedies for unfair dismissal

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division (2)) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) the FWC may make the order only if the person has made an application under section 394.

(3) the FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

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

[128] Ms Baker is a person protected from unfair dismissal for the Act’s purposes, and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether he can be reinstated.

[129] Section 391 of the Act provides as follows:

391 Remedy —reinstatement etc.

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 the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC 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.

[130] In the circumstances of this matter it is not appropriate that Ms Baker be reinstated or reemployed with the employer. Ms Baker, having obtained further employment, does not seek to be so reinstated in any event. Reinstatement or reemployment would yield an unproductive result if Ms Baker’s wishes in this regard were disregarded. In any event, Ms Baker’s disposition towards Mr Sourlos, which I will set out further below, most definitely make it clear that it would be counter-productive to reinstate or to re-employ Ms Baker in her employer’s business.

[131] Having so found, I now need to determine - in accordance with s.390(3)(b) of the Act - whether an order for payment of compensation is appropriate in all the circumstances of the case.

[132] Section 390(3)(b) of the Act serves as a prerequisite to the exercise of the conditioned discretion to determine the quantum of compensation that an employer must pay to the person in lieu of reinstatement. The prerequisite to the exercise of that discretion is that the Commission reaches a state of satisfaction that an order for compensation is appropriate in all the circumstances of the case.

[133] The Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge [2013] FWCFB 431 held that this state of satisfaction could only be arrived at by considering all the circumstances of the case, and this meant that the range of matters set out a s.392(3) of the Act needed to be considered (though it will be noted that the Full Bench included ultimately in its decision additional consideration of s.393 of the Act):

[16] It is further apparent that a FWC decision to order the payment of compensation to a person is also a discretionary decision, but is only exercisable if, amongst other things, the FWC is satisfied reinstatement of the person is inappropriate and the FWC considers a compensation order is appropriate in all the circumstances of the case.

[…]

[40] As to whether an order for the payment of compensation by Ottrey to Ms Bowden is appropriate in all the circumstances of the case, we note that the phrase “all the circumstances of the case” in s.390(3)(b) of the FW Act is also contained in s.392(2). However, in s.392(2) the phrase is followed by a reference to the matters in ss.392(2)(a) to (g) and s.392(2)(g) concerns “any other matter that the FWC considers relevant.” In this case, we think the matters in ss.392(2)(a) to (g) embrace all the circumstances of the case relevant to our consideration of whether a compensation order is appropriate. In Henderson v Department of Defence it was recognised that the same matters may serve different purposes in s.170CH of the WR Act, as it was prior to the Work Choices amendments. A Full Bench of the AIRC said:

“[20] It is correct that, if the Commission decides to order an amount in lieu of reinstatement, regard would have to be had to the same matters for the purpose of determining the amount to be ordered. But that involves having regard to these matters for a different purpose. In s.170CH(2) the purpose of the inquiry is to ascertain which remedy or remedies, if any, are appropriate. In s.170CH(7) the purpose of the inquiry is to ascertain the amount to be awarded in lieu of reinstatement. If it were otherwise s.170CH(7) would be redundant.”

[41] We turn then to the matters for the purpose of considering whether an order for the payment of compensation by Ottrey to Ms Bowden is appropriate in all the circumstances of the case.

[42] There is no sound basis to conclude an order for the payment of compensation would affect the viability of Ottrey’s enterprise. The effect of such an order on Ottrey’s viability does not militate against such an order. Ms Bowden’s length of service with Ottrey was some four years. This is a period supporting such an order. The remuneration Ms Bowden received, or would have been likely to receive, if she had not been dismissed and her mitigation efforts at Yooralla and in her small business support an order for the payment of compensation. We concur with the Commissioner that Ms Bowden would have worked for Ottrey for at least another six months but for her dismissal. The amount of remuneration earned by her from employment or other work and the income reasonably likely to be so earned by her are not such as to militate against such an order. The matter of contingencies does not militate against such an order in this case, particularly given the period she would have worked for Ottrey but for her dismissal has long passed. However, the misconduct of Ms Bowden that contributed to Ottrey’s decision to dismiss her, as set out in the Commissioner’s first decision, does go against an order for the payment of compensation. There are no other matters that we consider are relevant to the circumstances of the case for the purpose of considering whether a compensation order is appropriate.

[43] In our view, the matters supporting an order for the payment of compensation outweigh that going against such an order, leading us to consider that an order for the payment of compensation by Ottrey to Ms Bowden is appropriate in all the circumstances of the case.”

[134] Given the full bench guidance, I now turn to the various criteria set out at s.392(2) of the Act (and s.393 of the Act) in order to determine whether it is appropriate to make an order for compensation.

[135] Section 392 of the Act provides as follows:

392 Remedy — compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise

(b) the length of the person’s service with the employer

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

(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

(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

(g) any other matter that the FWC considers relevant.

[136] Section 392(3) of the Act provides as follows:

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Consideration

[137] I proceed below to consider both the discretionary consideration (whether to make an order) and the amount to be ordered in compensation. It is apparent on my consideration that an order is warranted in the circumstances and compensation must be paid. My reasons for reaching these conclusions follow.

The effect of the order on the viability of the employer’s enterprise

[138] I have nothing before me as to the commercial status or viability of the employer’s business and must assume that the employer has a sufficient cash flow or other reserves through which he may meet any order that I may make in compensation. Both parties were expressly provided with an opportunity to make submissions on this and other matters arising under s.390-s.392 of the Act, but neither party did so.

[139] The effect of an order for compensation in this respect does not militate against such an order.

The length of the person’s service with the employer

[140] Ms Baker’s length of service with the employer was for a period of some 15 months. This is not a period of time that strongly encourages the making of an order as it is not a lengthy period of employment.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[141] The remuneration Ms Baker would have received, or would have been likely to receive, if she had not been dismissed, does not militate against the making of an order.

[142] There is no conduct on Ms Baker’s part that appears to me to militate against making an order.

[143] The amount of remuneration earned by Ms Baker from employment or other work and the income reasonably likely to be so earned by her are matters, however, do not militate against making an order for compensation.

[144] As I set out in an earlier decision (see Mr Michael Efford v BTE Technology [2016] FWC 657):

“[41] It is necessary to take into account actual and, where relevant, prospective earnings, over the period of anticipated employment. In Bresatz v Przibilla (1962) 108 CLR 541, Windeyer J commented as follows in relation to contingencies of both a negative kind (which reduce the likelihood of earnings) and a positive kind (which increase the likelihood of earnings) to the award of compensation for damages:

3. Turning then to the first head commonly called loss of future earnings - a common method of estimating the loss of prospective earnings is to take the annual earnings at the date of the accident and multiply this by the number of prospective working years lost. Then it is said "the resulting amount must then be scaled down by reason of two considerations, first that a lump sum is being given instead of the various sums over the years, and second that contingencies might have arisen to cut off the earnings before the period of disability would otherwise have come to its end": Mayne & McGregor, Damages (1961) p. 767. The first of the two considerations mentioned does, of course, in every case demand that the product of the initial multiplication must be discounted at some assumed rate of interest to ascertain the present value of the notional future earnings. Nothing here turns upon the individual. This "scaling down" is a mere process of arithmetic applicable to all cases; and there are tables from which the result is readily ascertainable. But the second consideration is altogether different. It is a mistake to suppose that it necessarily involves a "scaling down". What it involves depends, not on arithmetic, but on considering what the future might have held for the particular individual concerned. He might have fallen sick from time to time, been away from work and unpaid. He might have become unemployed and unable to get work. He might have been injured in circumstances in which he would receive no compensation from any source. He might have met an untimely death. Allowance must be made for these "contingencies", or the "vicissitudes of life" as they are glibly called. But this ought not to be done by ignoring the individual case and making some arbitrary subtraction. We were told that in South Australia it is a common practice to subtract twenty-five per cent "for contingencies". Indeed counsel for the appellant, in the calculations he made in support of his claim for higher damages, conceded that this should be done. But he did not explain why. I know of no reason for assuming that everyone who is injured and rendered for a period unable to work would probably in any event have been for a quarter of that period out of work, or away from work and unpaid. No statistics were presented to justify this assumption. Moreover, the generalization, that there must be a "scaling down" for contingencies, seems mistaken. All "contingencies" are not adverse: all "vicissitudes" are not harmful. A particular plaintiff might have had prospects or chances of advancement and increasingly remunerative employment. Why count the possible buffets and ignore the rewards of fortune? Each case depends upon its own facts. In some it may seem that the chance of good fortune might have balanced or even outweighed the risk of bad. With these considerations in mind I turn to the element of loss of future earnings in this case and to what the learned trial judge said on this aspect.

[42] The judgment of Windeyer J is commented upon favourably by the High Court in its judgment in Wynn v NSW Insurance Ministerial Council (1995) 133 ALR 154, which itself is quoted favourably in Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000 Print S5109), which itself noted that included in the scope for contingencies were:

“positive considerations which might have resulted in advancement and increased earnings are also taken into account”

[43] In Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080, a Full Bench of (what was then) Fair Work Australia took into account the possibility of prospective earnings (where the Applicant concerned had obtained a temporary employment position only following dismissal) in reducing the amount to be awarded by 25% as a result of uncertainty as to the extent of on-going unemployment.

[44] Demonstrably, the likelihood of prospective earnings is a matter that is taken into account for purposes of determining the amount the Commission may order that an employer pay a person. Equally, the extent of such prospective earnings must form a criterion to be taken into account when determining whether it is appropriate to make an order for compensation itself.”

[145] In this particular case, had Ms Baker not been dismissed she would not have been long employed in Mr Sourlos’ businesses. My reasons for so concluding are as follows.

[146] A very wide range of accusations were levelled at Mr Sourlos through the Ms Baker’s evidence regarding his (Mr Sourlos’) personal and professional practices. Many of these have no relevance to the application, or else were otherwise intended to reflect on his integrity and credibility. Ms Baker for her part only described Mr Sourlos variously as being “crass”, foul mouthed, lazy, seemingly alcohol dependent (“a big drinker”) , unhygienic, boorish etc. Ms Baker has also made a complaint to the Anti-Discrimination Commission, Queensland, in relation to sexual harassment, in which she described Mr Sourlos’ conduct – as set out in the complaint - as being “offensive”.

[147] In the course of her viva voce evidence, Ms Baker claimed that Mr Sourlos had acted towards her in a way in relation to a particular incident which caused her to feel “belittled” and “embarrassed” in front of her staff. In another incident in which it was claimed that Mr Sourlos emailed a photo of a semi naked man to Ms Baker, Ms Baker supplemented her written evidence through her viva voce evidence and claimed that Mr Sourlos had made a particularly lurid suggestion to her, which I have no need to replicate for the current purposes. Ms Baker considered Mr Sourlos’ conduct as she alleges to have been “offensive”. This was a claim made in the examination process and was not previously pressed in any written materials.

[148] Ms Baker seemed to have reached these strong views of Mr Sourlos only after a short time – a few months at most - during which she was directly exposed to him while he remained in Townsville at the end of 2014, and before he departed to Airlie Beach.

[149] Whether or not all the claims levelled at Ms Baker are true or not, Ms Baker for the purposes of these proceedings exhibited – as I have heard - very deep animosity towards Mr Sourlos, and made strenuous efforts (sometimes even against her own intermittent, contrary admissions) to characterise him as a particularly uncivil person with whom to interact.

[150] This, clearly, is an employment relationship that would not endure for any length of time following Mr Sourlos’ return to 3 Beans and a Chef.

[151] In my judgment, having had the benefit of hearing the evidence, Ms Baker, given the climate of feeling she evidenced, would only have remained an employee for a period of two months.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[152] There was no challenge of substance to Ms Baker’s claims about the efforts to secure work following her dismissal.

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

[153] Ms Baker appears to have had nominal earnings in the two month period following her dismissal that would reasonably warrant deductions in my order for compensation.

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

[154] This is not relevant in the circumstances before me.

Any other matter that the FWC considers relevant

[155] There are no matters that I consider relevant.

Misconduct reduces amount

[156] I do not consider that there is any evidence that supports a claim that Ms Baker’s conduct led to some measure to her dismissal.

Monetary orders may be in instalments

[157] Mr Sourlos may apply for leave to discharge the amount he is ordered to pay by a reasonably framed instalments.

Conclusion on penalty

[158] Mr Sourlos is ordered to pay Ms Baker the amount the equivalent to two months of her usual earnings. The parties have agreed that Ms Baker’s earnings amounted to $3100 per month once the usual tax was deducted. The grossed up amount was not provided to me. The amount Mr Sourlos is therefore ordered to pay Ms Baker is $6200 (which is net, after taxation has been deducted). This amount must be paid within 7 calendar days from the publication of the order.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr O’Donnell representative for the Applicant.

Mr Zwar of Diamond Conway Lawyers for the respondent.

Hearing details:

23 March 2016 – Brisbane, Sydney and Townsville by Video Link.

18 April 2016 – Brisbane and Townsville by Video Link.

28 – 30 June 2016 – Townsville Federal Magistrates Court.

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