Ms Stacey Ann Merolla v Mainstreet International Marketing Group Pty Ltd

[2011] FWA 570

[2011] FWA 570

FAIR WORK AUSTRALIA

DECISION

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

Ms Stacey Ann Merolla
v
Mainstreet International Marketing Group Pty Ltd
(U2010/665)

COMMISSIONER SIMPSON BRISBANE, 24 FEBRUARY 2011

Application for unfair dismissal remedy - arbitration.

[1] This is an application pursuant to Section 394 of the Fair Work Act 2009 (“the Act”) by Ms Stacey Ann Merolla (the “applicant”).

[2] The matter was listed for hearing on 16 August 2010. At the hearing on the morning of 16 August 2010 the respondent was represented by Mr Adrian Wilmot of Mainstreet International Marketing Group Pty Ltd (the “respondent”) and Mr Lief Schipper a corporate adviser to the respondent. The applicant and her representative failed to appear at the commencement of the hearing.

[3] The applicant was contacted and subsequently participated in a brief hearing by telephone in which she stated that her appointed representative had advised her not to attend. I adjourned the matter that morning as I was advised by the parties that some discussions had occurred in an attempt to resolve the matter and that the applicant did not want to proceed on the day without her representative.

[4] The application was then the subject of a jurisdictional hearing following an objection from the respondent that a notice of discontinuance had been filed by the applicant’s representative on 16 August 2010. I issued a decision 1 setting aside that notice of discontinuance filed by the former representative of the applicant on the basis that it was done so without the authority of the applicant.

[5] On 15 October 2010 I issued directions for the filing of material for a hearing of the substantive matter on 30 November 2010. The directions required the applicant’s material be filed by 28 October 2010, the respondent’s by 12 November 2010 and the applicant’s material in reply by 17 November 2010.

[6] The applicant’s material was received by Fair Work Australia (“FWA”) on 28 October 2010. A subsequent email was received from the applicant on 3 November 2010 with their material attached to the email with additional marking of attachments.

[7] On 11 November 2010 my chambers received an email from Mr Schipper advising that the applicant’s material was not received by 28 October 2010 in accordance with the directions. Mr Schipper advised that the respondent had however received an email from the applicant on 3 November 2010.

[8] Attempts were made to contact both the applicant and the respondent the next day. Mr Wilmot was advised that FWA had received the applicant’s material on the due date in accordance with the directions order issued and the applicant would be contacted regarding the matter.

[9] Mr Wilmot advised FWA that he had received the applicant’s email of 3 November 2010 which was also referred to in the email of Mr Schipper. It was my understanding that the respondent had received the applicant’s material as attachments to the email of 3 November 2010 in the same manner as FWA had received in an email on the same date.

[10] I granted an extension of time for five days to the respondent to file material, on the basis that it did not received the applicant’s material until 3 November 2010.

[11] Advice regarding this extension of five days was provided directly to Mr Wilmot, and as requested by him, also forwarded to Mr Schipper in writing on 12 November 2010.

[12] That advice stated that the respondent’s material as outlined in the directions of 15 October 2010 would now be required by close of business on 18 November 2010. That advice also confirmed that the hearing date of 30 November 2010 would proceed.

[13] Mr Schipper by return email on 12 November 2010 advised that he had not received the applicant’s submissions at that stage. FWA contacted by telephone the applicant who advised that the submissions had been served on the respondent. FWA sought to speak by phone to Mr Schipper on the afternoon of 12 November 2010 and could not contact him. Mr Wilmot was contacted and advised that the material had been sent and if there remained a problem to contact my chambers.

[14] The respondent’s material was not received by the amended date of 18 November 2010. Attempts were made to contact Mr Wilmot, Mr Schipper and Managing Director Mr Hannan, on 22 November 2010 regarding submissions not received. Despite efforts to contact all three persons who had participated in a representative capacity for the respondent at previous hearing days no response to messages left was received from any of those three persons.

[15] An email was sent to Mr Schipper on 24 November 2010 and carbon copied to Mr Hannan stating that the respondent’s submissions had not been received by the 18 November 2010 and requesting advice as to when the submissions would be filed.

[16] A further email was sent to the respondent on 26 November 2010 requesting advice on the respondent’s submissions. Attempts were again made to contact Mr Wilmot, Mr Hannan and Mr Schipper by phone on 25 November and 26 November 2010. Mr Hannan was contacted on Friday 26 November 2010 and he advised that Mr Schipper was still working on the respondent’s submissions or had sent them. An email was forwarded on 26 November to Mr Schipper advising him of that conversation with Mr Hannan and again requesting advice on the respondent’s submissions. No response was received by FWA.

[17] Attempts to contact the respondent again were made on the 29 November 2010 with no response.

[18] I directed that an email be sent to the email addresses of both Mr Hannan and Mr Schipper on 29 November 2010. An email was sent as follows;

“Dear Mr Schipper, Mr Wilmot and Mr Hannan

We acknowledge that you are aware of this application through prior communications with this office being listed for hearing tomorrow Tuesday 10am (Queensland time) 30 November 2010. Several attempts to contact you have been made without success. You are required to attend this hearing by person or by telephone. If you wish to attend by telephone, you must advise your direct contact telephone number by 8.30am tomorrow.

In your absence, the hearing may continue ex parte and an adverse finding may be made against you.”

[19] No response was received. The telephone numbers and email addresses relied upon by FWA were the same as those used by the respondent when communication and service of documents for the purposes of programming earlier hearing dates and for the jurisdictional matter were issued. I am only left with the conclusion that the respondent simply chose to no longer participate any further in the proceedings.

CONSIDERATION

[20] There was no appearance by the respondent at the hearing on 30 November 2010 and therefore no formal evidence was admitted from the respondent in relation to the reasons stated for the dismissal. I decided to proceed to conduct the hearing that day. Section 600 of the Fair Work Act 2009 makes it clear that I am entitled to determine a matter before me in the absence of a person who has been required to attend a hearing.

[21] The applicant provided information at the commencement of the hearing to demonstrate that the material filed in accordance with the directions was served on the respondent. This material was admitted as exhibit 1. The applicant provided a bundle of 21 exhibits which were also admitted into evidence as exhibit 2. The applicant’s witness statement was included within that bundle and was marked as the seventh document within exhibit 2. The applicant also provided a submission which was admitted as exhibit 3.

[22] I have summarised the applicant’s case in the materials tendered in evidence as follows.

[23] The applicant commenced employment for the respondent on 23 July 2007 as a web designer and graphic artist, and maintains that she had a good relationship with her employer receiving positive appraisals as late as January 2010. The applicant made reference to significant pay increases she enjoyed progressively following her commencement.

[24] On 14 January 2010 the applicant advised Mr Greg Hannan, and Ms Juanita Garcia her supervisor that she was planning to begin an IVF program.

[25] The applicant claimed that following her decision to advise her employer of this in February and March of 2010 the respondent searched to appoint a new web design and graphic artist.

[26] The applicant continued her IVF program in February and March 2010. A new graphic designer was appointed to the respondent on 18 March 2010. The applicant was tasked with familiarising the newly appointed graphic designer with technical and company processes as soon as possible which she did.

[27] On 15 March 2010 the applicant commenced the IVF program.

[28] On 18 March the applicant advised Ms Garcia she was in the middle of the IVF program and that emotionally she did not feel very well. The applicant asked if she could take some time off and Ms Garcia advised that there was a lot of work to do that was piling up and taking time out right now is not appropriate.

[29] On 18 March the applicant had a conversation with Mr Hannan and advised that she was feeling anxious and emotional. Mr Hannan suggested she have a break or take a walk but stay in the office.

[30] On Wednesday 24 March the applicant filled out a leave application for Friday 26 March as her treating Medical Specialist Dr Molloy had advised that date would be the time for ‘egg collection’. The leave form was signed by Mr Adrian Wilmot and Ms Garcia. The applicant advised both Mr Wilmot and Ms Garcia she may not be at work on Monday 29 March depending on when the egg transfer operation was to be performed.

[31] On Tuesday 30 March Dr Molloy advised her that the procedure had been unsuccessful.

[32] The applicant returned to work the next day Wednesday 31 March however during the day experienced excruciating abdominal pain. The applicant advised Ms Garcia she may need to go home and did so at 2.30pm.

[33] The applicant visited Dr Molloy on 1 April regarding the abdominal pain and was diagnosed with ovarian hyper stimulation syndrome (OHSS). The applicant stated that Dr Molloy advised her that a side effect of the operation may appear around the fifth or sixth day after egg collection and for women who suffer this side effect there is a high risk of hospitalisation being required.

[34] The applicant was advised not to return to work until 7 April. The applicant returned to work on 7 April and claimed that at the end of that week she received very positive feedback on her work performance from Ms Garcia.

[35] On Monday morning the 12 April the applicant states that she was working on a website she had been directed to work on when Ms Garcia started to ask her to justify what she was working on over the MSN messenger (Microsoft’s Instant Messaging software).

[36] The applicant advised that Ms Garcia manages the team remotely from her home office over MSN messenger. The applicant states that she continued to work however Ms Garcia’s instant messages were quite rude and abrupt so she decided to close down MSN messenger as she felt anxious and abnormally emotional and needed to calm down.

[37] Ms Garcia sent the applicant an email demanding she log back onto MSN messenger.

[38] The applicant stated that since the IVF procedure she felt stressed and anxious and decided to respond with a simple email stating, “I’m not in the right frame of mind to talk with anyone right now.”

[39] The applicant was then approached by Mr Wilmot who was working in the same office, and who demanded that the applicant go onto MSN messenger to speak with Ms Garcia. The applicant replied that she was not in an emotionally good mood right now to speak to anyone, and she needed a few moments to herself. Mr Wilmot replied, “Either you log onto MSN or I will put a phone on your desk so you can speak to her.” The applicant stated that Mr Wilmot became louder and stated, “Stacey, who do you think you are ? Get on MSN now and speak with Juanita.”

[40] The applicant stated that she felt stressed and anxious and could tell her face had turned red because she was embarrassed when she saw three other staff members looking in their direction.

[41] The applicant stated that she had no direct exit route as Mr Wilmot was physically blocking her only way out. The applicant stated that she said a little more firmly, “Adrian I don’t want to ask again, please get away from my desk.” The applicant states that the respondent yelled at her, “Stacey, do it now, get on MSN!...or....I’ll call Greg.”

[42] The applicant states she was at breaking point and felt harassed and threatened. The applicant states that she is ashamed to admit that she said to Mr Wilmot, “Adrian, get the fuck away from my desk now.” The applicant claims that Mr Wilmot looked at her with a smirk and said, “Thanks, that all I needed”.

[43] The applicant stated that in previous discussions with Mr Hannan he had advised her that Mr Wilmot did not have authority to instruct her in his role as the company accountant.

[44] On the next day Tuesday 15 April at approximately 11.50am Ms Garcia asked her to attend a meeting. The applicant attended the meeting.

[45] The applicant’s statement describes Mr Wilmot and Ms Garcia both speaking at her aggressively in raised voices at the same time. The applicant describes being overwhelmed, her face getting red, tears running down her face, being unable to speak and her heart rate being very fast, feeling light headed and dizzy. The applicant described wanting to get away from the situation and she left the room.

[46] The applicant stated as she was leaving: “I can’t handle this right now” and she walked out the door.

[47] The applicant then went directly to speak to Mr Hannan and saidshe needed to go home. The applicant said she was not capable of saying anything more at the time because of her emotional state and also didn’t want staff in the office to see that she was upset or to make a scene.

[48] As soon as the applicant arrived home around 12:20 pm she sent a message to Mr Hannan apologising for leaving the office and said that she needed to speak with him in person sometime that day. It was agreed between the applicant and Mr Hannan that they would meet in the office in a hour or two.

[49] The applicant states that she arrived back at the office at 2:00 pm and she was met by Mr Wilmot who handed her an envelope. Inside was a letter stating that due to a meeting she abandoned that her employment is terminated due to unsatisfactory conduct.

[50] The applicant was embarrassed as other staff members were present and watching.The letter was not signed by Mr Hannan. The applicant doubted the veracity of the letter, particularly as it was the applicant’s understanding from previous discussions with Mr Hannan that Mr Wilmot did not have any authority over her.

[51] The applicant placed the letter to the side and continued to work on her computer saying she did not know what else to do.As the applicant had a prearranged meeting with Mr Hannan she remained to speak with Mr Hannan about the letter.

[52] At Around 2:30 pm the applicant had a closed door meeting with Hannan.

[53] The applicant said she asked Mr Hannan about the termination letter she had been handed and he replied, “I have no idea what it is about”. The applicant said Mr Hannan read the letter and said, “Well something has happened for them to write such a letter.”

[54] The applicant asked Mr Hannan again if he authorised the letter and again he said he had no idea what was happening. Mr Hannan asked the applicant for an explanation as to what was going on.

[55] The applicant explained to Mr Hannan what had occurred and she states that Mr Hannan advised me he was going to speak with Mr Wilmot and Ms Garcia and see if they wanted to have another meeting to sort out the issues and come to a compromise.

[56] Mr Hannan said the applicant was a good graphics designer and he had no issue with her and that her work was fantastic. However Mr Hannan then advised that he would support Ms Garcia and Mr Wilmot on their decision.

[57] Mr Hannan said a few times throughout the conversation that if it were up to him there would be no issue. This seems an odd statement considering Mr Hannan was the General Manager of the company. Mr Hannan told the applicant to wait at her desk while he spoke to both Ms Garcia and Mr Wilmot.

[58] At 5:20 pm Mr Hannan advised the applicant that both Mr Wilmot and Ms Garcia think it is pointless to talk to the applicant again because she will abandon the meeting as she did earlier.

[59] Mr Hannan told the applicant to go home and come back in the morning.

[60] Before the applicant left the office she phoned Ms Garcia. The applicant asked Ms Garcia if she authorised Mr Wilmot to terminate her employment. Ms Garcia replied no.The applicant asked Mr Garcia if she wanted to terminate her employment and she said if things don’t change she would fire her.

[61] The applicant stated that Ms Garcia had said she was unbearable on IVF.

[62] When the applicant arrived at the office the next day she had another closed-door meeting with Mr Hannan. The applicant states that he simply said:

“ I authorise this letter as of now. I thought about it... and there will be no meeting with Juanita this morning, not that she knows it yet because I haven’t told her. I don’t want to waste anymore time having these meetings with staff members. You are dismissed, collect your belongings and leave the office and don’t touch your computer anymore.”

[63] With that Mr Hannan signed the termination letter and handed it to the applicant. The applicant collected her few items handed in the keys and remote controls to the car park and left.

[64] The applicant maintained that the respondent hired another graphic designer to replace her during her IVF course and if her termination was genuinely due to her ‘conduct’ then the respondent should have given her warnings so she knew that she was doing something wrong and given time to amend the situation.

[65] The applicant said that since being dismissed she had not been paid her last week’s pay and the notice pay in her employment contract.

CONCLUSION

[66] In ordinary circumstances the conduct of the applicant in refusing to follow a lawful direction from Ms Garcia to log back onto the MSN messenger in the first instance, and her conduct during the exchange with Mr Wilmot in combination with her walking out of a meeting as she did with Ms Garcia and Mr Wilmot, would provide a valid reason for dismissal related to her conduct.

[67] In my view however there are mitigating circumstances in this instance. The applicant had provided medical certificates to her employer from Dr David Molloy, a Gynaecologist and Specialist in Infertility and Reproductive Medicine for her to be on personal leave that covered the period from 29 March 2010 to 6 April 2010.

[68] The applicant had been very clear to representatives of the respondent on a number of occasions that she was suffering from the side effects of an IVF attempt and specifically the complication of OHSS. This caused abdominal pain, bloating and discomfort and required additional treatment and rest. Advice regarding the nature of this condition is set out in correspondence 2 from Dr Molloy.

[69] It is my belief that the respondent was aware of the IVF attempt and that the attempt had been unsuccessful. On the basis of that knowledge it is reasonable to expect that the applicant would go through a period of adjustment from the combined effects of the program itself and from its failure.

[70] Correspondence from Dr Molloy dated 12 August 2010 was admitted into evidence. 3 Without setting out the full text of that correspondence it describes that over the course of the three weeks before the applicants’ termination the applicant was on strong hormonal treatment. Dr Molloy’s correspondence described the psychological effects of this treatment as including depression, moodiness, irritability and forgetfulness. The treatment can also cause other side effects.

[71] Negative side effects in connection with the hormonal injections include moodiness, irritability, depression, confusion, forgetfulness and other ranging changes that effect mind and mental function. This was coupled with the diagnosis of the complication of OHSS.

[72] The applicant had explained to Ms Garcia and Mr Hannan the difficulty she was having due to the side effects of the program on a number of occasions on the days leading up to her exchanges with Ms Garcia and Mr Wilmot.

[73] Ms Garcia and Mr Wilmot had signed her leave form on 24 March 2010 approving her leave in advance and were advised directly she may not be at work on 29 March 2010 depending on the date of her operation.

[74] The respondent appears to have had no regard whatsoever to the impact the IVF program and its failure may have on the health and well being of the applicant, before deciding to terminate her on the grounds of her conduct.

[75] The exchange over the MSN messaging system with Ms Garcia precipitated the unpleasant exchange with Mr Wilmot which immediately followed.

[76] The applicant’s failure to follow the direction of Ms Garcia can be understood, while not being entirely justified, in the context of her condition and her response to what she believed was an unreasonable and aggressive direction. The applicant appears to have been overwhelmed at the time and I accept that is why she did not respond immediately.

[77] What would ordinarily probably not have become a serious disciplinary issue escalated into a serious issue following the intervention of Mr Wilmot. On the evidence of the applicant it appears Mr Wilmot acted in an aggressive and intimidatory manner toward the applicant. Mr Wilmot’s tone and demeanor was overbearing and served to significantly heighten the level of distress the applicant was suffering from. The respondent should have been more sensitive to the applicant’s circumstances at the time.

[78] I do not dismiss the retaliation from the applicant lightly, however it should also be remembered that at the time the applicant was operating on the understanding from Mr Hannan that Mr Wilmot had no direct authority over her, and therefore in her mind had no basis to direct her, particularly in the aggressive manner in which he did.

[79] If Mr Wilmot had been provided with some authority to direct the applicant she had not been advised this was the case and it contradicted what she had previously been told.

[80] From the evidence of the applicant the meeting that she was directed to attend with Ms Garcia and Mr Wilmot was conducted in an entirely inappropriate way. It appears that the applicant was again overwhelmed by the aggressive approach of the representatives of the respondent and did not feel in a proper state to explain or defend herself at the time. In the absence of any evidence to contest the version given by the applicant I accept her version and also accept that she had some justification for leaving the meeting that day and seeking to instead speak directly with the General Manager as she did.

[81] The respondent could have agreed to the applicant’s request to speak with Ms Garcia initially, and then meet with both Ms Garcia and Mr Wilmot. This request was firmly rejected. From the applicant’s evidence despite her being in a fragile state she was subjected to an aggressive interrogation by both Ms Garcia and Mr Wilmot.

[82] Following her decision to leave the meeting the applicant appealed directly to Mr Hannan to intervene. While claiming at the time that he had no knowledge of the situation and initially indicating that he was sympathetic to the applicant he advised he would support the decision of Ms Garcia and Mr Wilmot. Mr Hannan was ultimately the person in charge of the company. The circumstances of the applicant were within his direct knowledge however he appears to have had no regard to that and agreed to terminate the applicant on the advice of Mr Wilmot and Ms Garcia.

[83] The applicant to that point had an unblemished record and had made the respondent well aware of the reasons for her recent period of leave. If the respondent had vested authority in Mr Wilmot and/or Ms Garcia to terminate the applicant, the applicant should have been made aware of that fact earlier and this may have influenced the decisions taken by the applicant at the time.

[84] From the evidence, the conduct of the applicant that led to her termination was out of character for her, and inconsistent with her previous record since 2007. The applicant presented as a credible witness on both occasions during the course of this matter, being the jurisdictional hearing and in the substantive matter.

[85] For the reasons set out above, I do not accept that the reasons given for termination were valid. While the conduct did occur it did not justify termination in the circumstances of this case.

[86] The applicant was notified of the reasons for the decision and met with Mr Hannan on two occasions on the day before her termination and on the day of her termination. I am not satisfied however that she was given an appropriate opportunity to respond to the reasons related to her conduct in that the approach of Mr Hannan on the day she was terminated was clearly not to engage in any discussion regarding issues relating to her conduct but rather to give effect to the termination. For the reasons discussed earlier, the meeting she was directed to attend with Ms Garcia and Mr Wilmot on 13 April did not provide a proper opportunity to respond either.

[87] The applicant did not request a support person and the question of any unreasonable refusal by the employer to allow the applicant to have a support person present to assist at any discussions relating to dismissal did not arise.

[88] As the respondent did not participate in the hearing I am constrained in taking into account consideration of sections 387(f) and 387(g) of the Act.

[89] I asked the applicant while under oath if there had been any other warnings or counselling sessions that occurred during her time of employment that had not been identified in the material, and she answered no.

[90] A decision to terminate an employee in circumstances such as this case should not be taken lightly. In my view there are mitigating circumstances in this case as set out above that lead me to the conclusion that the termination was harsh, unjust and unreasonable.

[91] The applicant has made it clear she does not seek reinstatement. In addressing the requirements of section 392 I asked the applicant if she had any other employment since her termination and she advised that she had one month of contract work.

[92] The applicant subsequent to the hearing provided a statutory declaration stating that she had earned $2,400 in that month. The applicant’s submission 4 sets out that she earned $940 dollars per week prior to termination which I understand to be the gross amount.

[93] Section 392(3) of the Act requires that if I am satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person the amount of compensation should be reduced by an appropriate amount. I have reduced the compensation I intend to award on the basis of conduct of the applicant on the 13 April 2010.

[94] No evidence was led on the effect of an order for compensation on the viability of the business.

[95] The employee’s length of service was 2 years and 9 months.

[96] The employer failed to give or pay notice.

[97] In this case the maximum compensation payable is 26 weeks as that amount is less than half of the amount of the high income threshold. I have decided that applicant should be paid the equivalent of 8 week’s wages. I have deducted from that figure $2,400 which the applicant earned in other employment immediately following termination. On that basis I will issue an order separately that the respondent pay the applicant $5,120 to be taxed according to law.

COMMISSIONER

 1   [2010] FWA 7929

 2   Exhibit 2, document 9

 3   Exhibit 2, document 10

 4   Exhibit 3

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