Nancy Harpur v Angel Touch Bathrooms Pty Ltd

[2014] FWC 9293

[2014] FWC 9293

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Nancy Harpur
v
Angel Touch Bathrooms Pty Ltd
(U2014/6942)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 22 DECEMBER 2014

Application for unfair dismissal remedy.

Introduction

[1] On 29 April 2014 Ms Nancy Harpur (the Applicant) lodged with the Fair Work Commission (the Commission), pursuant to s.394 of the Fair Work Act 2009 (the Act) an application for a remedy for unfair dismissal against her former employer Angel Touch Bathrooms Pty Ltd (the Respondent).

[2] The F2 form stated that the Applicant was employed on 16 September 2013. She was notified of her dismissal on 22 April 2014. Her dismissal took effect on the same day.

[3] The Applicant’s employment agreement was attached to the F2. Her position was “Senior New South Wales State Manager” with a salary of $65,000 per year. The role involved management of showrooms and warehouses in a number of suburbs of Sydney. A company car was to be provided but it appears that the Applicant used her own vehicle for part of her period of employment because the company vehicle was off the road.

[4] Attached to the F2 were a series of emails between the Applicant and Mr Philippe Chedid, the Respondent’s “Managing Director”. The emails related to various operational and staffing matters. In March 2014, Mr Chedid advised the Applicant of his intention to “revamp” the operation with a new name: “Amore Lights and Bathrooms” with “Aqua Dolce Bathware” as supplier and controller of the stores. It is to be found at Chipping Norton. He becomes increasingly critical of staff.

[5] On 22 April 2014 the Applicant received an email from Mr Chedid terminating her employment. One week’s pay in lieu of notice was provided. The reasons given appear to be:

• The Applicant received a fine in someone else’s name for the work vehicle.

• In 2013, a staff member allegedly stole company property. The Applicant appears to have been linked to this action, it is alleged.

• General performance issues.

[6] No F3 response was lodged by the Respondent. There was some email contact from Mr Chedid to the Unfair Dismissals Team alleging impropriety by the Applicant.

[7] A number of telephone conciliations were organised but did not proceed. The last, on 1 July 2014, did not proceed because of the unavailability of the Respondent.

[8] There was some email correspondence with Mr Chedid in July. It was agreed that the matter would proceed to hearing. The last email correspondence from Mr Chedid to the Unfair Dismissal Team was on 30 July 2014.

[9] I conducted a programming conference by telephone on 3 October 2014. There was no appearance by the Respondent or compliance with the Directions to lodge witness statements and submissions.

[10] Following the telephone conference I issued the following statement and Directions:

“STATEMENT

[1] This matter is listed for hearing in the Fair Work Commission (the Commission) at 80 William Street, East Sydney at 10.00 am on Monday 13 and Tuesday 14 October 2014.

[2] A telephone programming conference took place at 9.30 am Friday 3 October 2014. The Applicant, Ms Harpur appeared. There was no appearance by the Respondent.

[3] Numerous attempts were made to contact the Respondent’s representative, Mr Philippe Chadid without success.

[4] I note that the Respondent has not lodged an F3 response to the Application. The Respondent has also not complied with the Directions issued by the Commission to file submissions and witness statements by Monday, 29 September 2014.

[5] I now issue further Directions and note that the Respondent must attend the hearing on 13 and 14 October. The matter will be dealt with to finality on that day and a decision issued.

DIRECTIONS

1. The Respondent, Angel Touch Bathrooms Pty Ltd is directed to lodge with the Fair Work Commission by Close of Business Wednesday, 8 October 2014 an outline of its submissions, witness statements and an F3 response.”

[11] Prior to the scheduled hearing a number of attempts were made to contact Mr Chedid by telephone and emails with no success.

[12] The Applicant appeared at the hearing on 13 October. There was no appearance on behalf of the Respondent.

[13] After the hearing the following statement and directions were sent to the Respondent:

“STATEMENT

[1] This matter was heard in the Fair Work Commission (the Commission) at 80 William Street, East Sydney at 10.00 am on Monday 13 October 2014.

[2] Ms Nancy Harpur (the Applicant), appeared and presented her case that she had been unfairly dismissed by Angel Touch Bathrooms Pty Ltd (the Respondent).

[3] There was no appearance by Angel Touch Bathrooms Pty Ltd.

[4] The Respondent’s non appearance at the hearing followed:

• Non compliance with Fair Work Commission’s Directions to file its submissions, witness statements and F3 response;



• Non appearance at the telephone programming conference on 3 October 2014;



• Non response by the Managing Director, Mr Philippe Chedid to repeated attempted phone and email contact from my chambers.

[5] I am sending the Statement/Directions to those addresses/entities provided to the Commission at the hearing.

DIRECTIONS

1. The Respondent, Angel Touch Bathrooms Pty Ltd is directed to advise the Fair Work Commission, by advice to my chambers by Close of Business Monday, 20 October 2014 whether it wishes to make any submissions in this matter.

2. Failure to do so means that the matter will be determined on the basis of submissions made prior to and at the hearing on 13 October 2014.”

[14] The Statement was sent by email and registered mail to the Respondent at the possible addresses that could be found, in the material filed, at Moorebank, Ramsgate, Rockdale, Prestons and Chipping Norton. It was also sent to another name/entity that the Commission was advised the Respondent may be trading under “Online Lights and Bathrooms”.

[15] No response was received and mail was returned. An email was received from “Online Lights and Bathrooms” stating that it had no contact with Mr Chedid.

The Case for the Applicant

[16] The Applicant lodged material, in accordance with the Commission’s Directions on 20 August which were substantially a replica of the material attached to the F2.

[17] However, she provided the following additional evidence:

• She had not been able to drive the company vehicle for over two weeks because Mr Chedid had not registered it

• She denied that she had been involved in any misuse of company property.

• She provided details of the staffing problems and the erratic management practices of the Respondent.

• It appears that there were approximately 22 employees of the Respondent at the time of dismissal.

[18] At the hearing on 13 October I questioned the Applicant and established:

• The main office was at Chipping Norton.

• There were no previous reprimands or warnings before the email dismissing the Applicant.

• The company vehicle was being driven by the Applicant’s partner when a fine was incurred for it being unregistered. Her view was that her partner driving with her in the car was reasonable and authorised.

• The Applicant’s week’s notice was finally paid two weeks after her termination.

• The Applicant seeks 12 week’s pay as compensation.

• The Applicant had just started a new job at the time of the hearing.

Protections from Unfair Dismissal

[19] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[20] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

[21] Given that the uncontested evidence is that there were 22 employees at the time of the Applicant’s dismissal I am satisfied that the Applicant has completed the minimum employment period of six months. The Applicant had an annual salary of $65,000 which is well below the high income threshold. Consequently, I am satisfied that she was protected from unfair dismissal.

Was the dismissal unfair?

[22] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Was the Applicant dismissed?

[23] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[24] There is no dispute that the Applicant was dismissed and that subsections 385(c) and (d) do not apply.

Harsh, unjust or unreasonable

[25] Having dealt with each of s.385(a) (c) and (d) of the Act, I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“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 specialist 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.

Approach of the Commission

[26] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[27] Vice President Ross, as he then was, in B Rose v Telstra Corporation Limited (1998) Q9292 (Rose) restated the above proposition and also stated:

“In my view whether there has been a `fair go all round’ is a matter which I think is relevant and hence I am to have regard to it determining whether the termination was harsh, unjust or unreasonable. It is not necessarily determinative but it is a factor to be taken into account.”

Valid Reason - s.387(a)

[28] In Container Terminals Australia Limited v Toby [2000] Print S8434, a Full Bench said ‘In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable’.

[29] Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 said:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct, or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that the employer and employee are each treated fairly ...”

[30] In Parmalat Food Products Pty Ltd v Wililo, [2011] FWAFB 1166, the Full Bench held:

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.”

[31] There has been no compliance by the Respondent with any direction issued by the Commission and no participation in the Commission proceedings despite multiple notifications and attempts to contact the Respondent as set out above. I have considered the material filed and have had the opportunity of interrogating the Applicant at the hearing. I am prepared to accept her evidence.

[32] I find that there was no valid reason for her dismissal. The reasons given in the termination letter have been refuted by her in a manner that I accept. The whole conduct of the Respondent is consistent with the Applicant’s version of events.

Notification of a Valid Reason - s.387(b)

[33] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made, Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41] in explicit terms, Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151 and in plain and clear terms, Presvisic v Australian Quarantine Inspection Services Print Q3730. In Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:

“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”   Ibid at 151.

[34] The Applicant was dismissed by email on 22 April. There was no warning or prior discussion. She was not notified of the reason for her dismissal, as provided for in s.387(b).

[35] It is also clear that there has been no compliance with s.387(c) and (e). There was obviously no dedicated human resource advice applied but this is no excuse for the actions of the Respondent.

Any other matter that the FWC considers relevant

[36] Section 387(h) allows the Commission to consider any other matters it considers relevant. These must be considered in the context of the object of Part 3 - 2 of the Act contained in s.381(2) to “ensure that a ‘fair go all round’ is accorded to both the employer and the employee concerned”.

[37] The fact that the Respondent has not chosen to participate in the cases does not mean that the Applicant should be denied a decision based on the available evidence.

[38] I find that the Applicant’s dismissal was harsh, unjust or unreasonable. It follows that the dismissal was unfair within the terms of s.385.

Compensation

[39] Having found that the dismissal was unfair, I now turn to the appropriate remedy.

[40] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“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.”

[41] The Applicant does not seek reinstatement and it would not be appropriate given the obvious difficulties of even contacting the Respondent. It may be that the Respondent is not operating or operating under another legal entity.

[42] Section 390(3)(b) provides that I may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

[43] I have found that the applicant has been unfairly dismissed and that reinstatement is not appropriate in all the circumstances. I am satisfied that an order for compensation should be made. It will be a matter for the Applicant to enforce this order if necessary through the appropriate mechanism.

[44] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered provides:

“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; and

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

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

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

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

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

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.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[45] The method for calculating compensation under s.392 of the Act was dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge,[2013] FWCFB 431 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket, (1998) 88 IR 21 and Ellawala v Australian Postal Corporation, Print S5109 (Ellawala). I have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation.

[46] I will now consider each of the criteria in s.392 of the Act.

Remuneration that would have been received: s.392(2)(c)

[47] The Applicant’s remuneration with the Respondent was approximately $65,000 per annum.

[48] I now determine the period of time the Applicant would have remained employed by the Respondent, or would have likely remained employed with the Respondent, had she not been dismissed.

Remuneration earned - s.392(2)(e)

[49] The uncontested evidence was that the Applicant had not had employment since the dismissal until the hearing and therefore there has been no remuneration earned during the period since the dismissal. Given the obvious uncertainty of the business, I find that three months is a reasonable estimate of her period of future employment. Based on her salary, she would have received $16,250

Income likely to be earned- s.392(2)(f)

[50] I consider that any income earned since the hearing should not be taken into account.

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

[51] A broad discretion is given to the Commission to consider other matters. I do not believe the Applicant’s order for compensation should be reduced because of any other factor.

Viability - s.392(2)(a)

[52] There was no evidence about the viability of the business.

Length of Service - s.392(2)(b)

[53] This was not a factor in this case.

Mitigating efforts: s.392(2)(b)

[54] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether the Applicant acted reasonably in the circumstances, (Ellawala).

[55] I find that the Applicant has made efforts to mitigate her loss suffered as a result of the dismissal.

Misconduct: s.392(3)

[56] No adjustment to the compensation is appropriate on this ground.

Shock, Distress: s.392(4)

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

Compensation cap: s.392(5)

[58] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or half the amount of the high income threshold immediately prior to the dismissal.

[59] The high income threshold component is $66,500.

[60] The amount of compensation I will order does not exceed the compensation cap.

[61] I will order the Respondent to pay to the Applicant an amount of $16,250.

Conclusion

[62] I am satisfied that the Applicant was protected from unfair dismissal, and that the dismissal was unfair and a remedy of compensation is appropriate. In accordance with s.381(2) of the Act, I am further satisfied that each party has been accorded a ‘fair go all round’. Every reasonable effort was made by the Commission to make sure the Respondent was advised of the proceedings and had an opportunity to put its case. It was appropriate and fair to make this decision based on the available evidence.

[63] An order (PR559502) will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

N. Harpur, Applicant.

Hearing details:

2014

Telephone Conference:

October 3.

Sydney:

October 13.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR559377>