Parker-Walford v PHT Holdings Pty Ltd T/A Sushi-Pro
[2013] FWCFB 2191
•12 APRIL 2013
[2013] FWCFB 2191 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
PHT Holdings Pty Ltd T/A Sushi-Pro
(C2013/2989)
JUSTICE ROSS, PRESIDENT | MELBOURNE, 12 APRIL 2013 |
Unfair dismissal appeal - s.604 Fair Work Act 2009 (Cth) - s.392(2)(c) finding - significant error of fact - decision at first instance manifests an injustice - in the public interest to grant permission to appeal - appeal upheld - 4 weeks’ compensation ordered.
[1] On 16 September 2012 the appellant, Ms Melanie Parker-Walford, was dismissed from her employment with PHT Holdings Pty Ltd t/as Sushi-Pro (the respondent). Ms Parker-Walford made an application for an unfair dismissal remedy on 27 September 2012. Attempts to resolve the application by conciliation were unsuccessful and the matter proceeded to a hearing before Senior Deputy President Richards. On 23 January 2013 the Senior Deputy President issued his reasons for decision in which he found ‘that the Applicant was harshly, unjustly or unreasonably dismissed from her employment with the respondent.’ The Senior Deputy President considered the question of remedy and made an order in the following terms:
“I order that the Applicant be paid two weeks of her ordinary salary, inclusive of superannuation. This amount is to be offset by any payments that have been made to the Applicant by way of payment in lieu of notice at the time of the dismissal. Any amount that must be paid to the Applicant must be paid to her usual account within 7 working days of the date of this decision (23 January 2013).” 1
[2] Ms Parker-Walford has appealed his Honour’s decision and that is the matter before us. The issue on appeal can be shortly stated. The appellant challenges two of the factual findings made by the Senior Deputy President and submits his Honour erred in only awarding two weeks pay as compensation.
[3] Ms Parker-Walford performed duties as a Production and Quality Manager reporting to the General Manager (Mr David Pickering) between March 2011 until the day of her dismissal on 16 September 2012. The dismissal letter signed by Mr Pickering on 16 September 2012 ostensibly terminated the Applicant’s employment on grounds of redundancy. That letter is in the following terms:
“Re: Employment with PHT Holdings Pty Ltd t/a Sushi - Pro ABN: 24 093 059 164
I am writing in relation to your employment with PHT Holdings Pty Ltd.
Due to business re-structure the position of Production Manager is no longer available and hence I wish to advise that PHT Holdings Pty Ltd no longer require your services and wish to terminate your employment agreement effective immediately.
In addition to your entitlements you will be paid an additional two weeks wages in Lieu of the notice required in the employment agreement.
I would like to thank you for your contribution to the production team.
Please return all company property including mobile phone and factory keys today.”
[4] Despite this correspondence the Employment Separation Certificate sets out two different reasons for the termination of Ms Parker-Walford, being unsatisfactory work performance and misconduct as an employee, and provides details of the reasons for separation as being:
“- Not show up;
- alcohol in the workplace; and
- not completing taks as per P/D"
[5] During the proceedings before Senior Deputy President Richards, Mr Pickering made it clear that the reason given for the dismissal in the dismissal letter was in fact a fabrication intended to conceal the actual reasons for the dismissal.
[6] The Senior Deputy President found that the actual reasons for the dismissal were those stated on the Employment Separation Certificate given to Ms Parker-Walford, namely, that the appellant had absented herself from her employment; used alcohol in the workplace; and had not completed tasks as per her position description.
[7] After reviewing the evidence and considering the relevant statutory provisions his Honour concluded that there was no valid reason for the termination of Ms Parker-Walford’s employment and that she had been unfairly dismissed. His Honour then turned to consider the question of remedy. Section 390 of the Fair Work Act 2009 (Cth) (the Act) is relevant in this regard, it states:
“390 When FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) 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) FWC may make the order only if the person has made an application under section 394.
(3) FWC must not order the payment of compensation to the person unless:
(a) FWC is satisfied that reinstatement of the person is inappropriate; and
(b) 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.”
[8] The Senior Deputy President considered the terms of s.391 in his decision 2 at paragraphs [66] to [69] and found that reinstatement was not an appropriate outcome. There is no challenge to this aspect of his Honour’s decision. The Senior Deputy President then considered s.392 of the Act which deals with compensation. Section 392 is in the following terms:
“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), 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 FWC considers relevant.”
Misconduct reduces amount
(3) If FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 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 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.
[9] The Senior Deputy President dealt with each aspect of s.392 in turn 3 and made the following findings in relation to the factors he was obliged to take into account (under s.392(2)(a)-(g)) in determining the amount of compensation to be awarded.
- There was no evidence that any order for compensation the Senior Deputy President might make would in some manner affect the respondent’s viability (s.392(a)).
- The applicants length of service was not long (19 months) and it had a neutral effect on whether or not to make an order (s.392(2)(b)).
- The Senior Deputy President found that Ms Parker-Walford’s employment would likely have continued for no more than two weeks, and concluded that the remuneration Ms Parker-Walford would have received, or would be likely to receive if she had not been dismissed, amounted to two weeks of her ordinary salary (s.392(2)(c)).
- No evidence was received as to mitigation and the matter was not agitated by the respondent (s.392(2)(d)).
- No evidence was received in relation to the amount of remuneration earned by Ms Parker-Walford from employment or other work during the period between the dismissal and the making of the order for compensation and the matter was not agitated by the respondent (s.392(2)(e)).
- His Honour found that the amount of any remuneration earned by the appellant during the period between the dismissal and the making of the order for compensation was irrelevant on the basis that the order he made specified that payment must be made no later than seven days from the date of the order.
- The Senior Deputy President said, ‘...there is insufficient certainty as to the time within that seven day period in which the payment is to be made for me to take into account a precise quantum of projected earnings. If the order did not need to be complied with for a longer period of time, then this statutory concern would warrant attention.’ (s.392(2)(f)).
- The Senior Deputy President made no deduction for contingencies (s.392(2)(g)) and saw no reason to discount the compensation amount due to misconduct by the appellant (s.392(3)).
[10] It is apparent from the amount awarded that the matter in s.392(2)(c) was a significant consideration in his Honour’s decision to award the appellant two weeks’ salary. Section 392(2)(c) provides that in determining an amount of compensation the Commission must take into account, among other things:
“(c) the remuneration that the person would have received or would have been likely to receive, if the person had not been dismissed.”
[11] At paragraph [74] of his decision his Honour said:
“At the time of her dismissal the Applicant appears to have been close to resignation by her own evidence, as cited at some length above. The Applicant’s employment therefore is unlikely to have endured for any lengthy period at all. In my view, given the Applicant’s own claims, her employment would have continued no more than two weeks longer, at the very most. The remuneration the Applicant would have earned amounts to two weeks of her ordinary salary for that period.” 4
[12] The appellant challenges this finding and also challenges the Senior Deputy President’s decision to reject redundancy as a reason for the termination of her employment. It is convenient to deal with the second matter first.
[13] The reason for the dismissal was squarely put to the appellant by his Honour during closing submissions, as is apparent from the following extract from the transcript:
“THE SENIOR DEPUTY PRESIDENT: Just to resolve one issue. I just comment that quite clearly from this matter there was never a genuine redundancy. There was never a redundancy as such. There was always a dismissal for particular reasons. It’s not as if the job that the applicant performed was no longer required to be performed by anyone.
It’s rather that an approach was adopted to sidestep the confrontation that would be necessary to execute the dismissal. I mean just on the face of it I’m just a bit confused as to why there would be claims that redundancy needed to be paid when demonstrably this matter has progressed and as the separation certificate articulates there were very specific reasons for the dismissal and it was never for reasons of redundancy.
MS PARKER-WALFORD: But the letter I received, your Honour, is a letter of redundancy.
THE SENIOR DEPUTY PRESIDENT: Yes, that’s what the evidence has been about but the real reasons were as we’ve discussed. The redundancy was effectively a sham to cover the actual reasons for the dismissal. A redundancy means in effect that the position that’s performed, or the job that’s performed by the relevant person is no longer required to be performed by anyone and that’s just not the case – it never appeared to have been the case.
If it had, this matter would have been run as a case quite possibly of genuine redundancy or as a redundancy but it’s never been run as a redundancy application or it’s never been run in the context of the respondent contending that the dismissal was for reasons of redundancy. And the position the respondent has throughout this matter being that there has been a dismissal for particular reasons or a combination of performance and conduct issues and not a mention has been made of the argument on grounds of redundancy, which is quite a different case.
The evidence through the letter of dismissal of it being a redundancy was never a statement of actuality. The real reasons were quite different. So for what it’s worth you can ponder those but nonetheless I’ve interrupted the applicant’s submissions in reply, so I’ll just let you finish.
MS PARKER-WALFORD: No, I’ve finished, your Honour.” 5
[14] In the passage set out above his Honour clearly put the appellant on notice that the reason for her dismissal was in issue. The appellant made no submission in response to his Honour’s observations. We are not persuaded that the Senior Deputy President erred in his characterisation of the reasons for the dismissal. We note that the functions that were being performed by Ms Parker-Walford are still being performed, albeit that the role has been split among two employees.
[15] We now turn to the challenge to the Senior Deputy President’s finding as to how long the appellant would have remained in her employment had she not been dismissed.
[16] The evidentiary basis for his Honour’s finding that Ms Parker-Walford’s employment with the respondent ‘would have continued for no more than two weeks longer, at the very most’, is set out at paragraph [68] of his decision:
“[68] What I do know from the Applicant’s direct evidence is that when she met with Mr Pickering on Sunday 16 September 2012 she did not challenge or resist his decision to dismiss her. She gave as her explanation to me that she had “had enough physically and mentally anyway”. The Applicant also gave evidence, under my questioning, that she believed her position with the respondent had led to her having “no life”:
“What was the content of your discussion?---David said that he’d been trying all weekend to convince Peter not to get rid of me but he said, “You know what Peter is like when he’s got an idea in his head. He doesn’t shift,” and he handed me my redundancy letter, if that’s what you want to call it, and I went, “Fair enough.”
Did you know why a decision had been taken to dismiss you?---Because I’d taken too much time off work, apparently.
So in that conversation it was explained to you, was it, that there was an issue with taking off work?---Yes, it was explained it would – well, David just – I can’t really recall that bit of the conversation very well. I think it went something like, “Peter thinks you’ve taken too much time off work and you haven’t covered the shifts, therefore he wants you out.”
Your response to this was just to say, “Fair enough”?---Yes. I’d been there for just over 19 months. I never saw my family because I was asleep in the day and I was at work at night. When I did take Saturdays, decided that Saturday was – even if we did have a production I’d cover it with somebody else. I tended to sleep the whole day because I needed to recover from long hours at night. It takes a while for that to get out of your system.
[…]
You’re on a leave day, according to your evidence, on the Sunday?---Yes.
You’re called to a meeting on the day which you say you’ve been given permission for leave?---Yes.
So you’re having a discussion with your employer about your leave over a three-day period which has been approved by Mr Pickering?---Mm.
Doesn’t that strike you as - - -?---Very odd.
Your only response was to say, “Fair enough”?---I think I was a little bit stunned and a little bit speechless but I think physically and mentally I’d had enough anyway. I was tired, I didn’t have a life and I think, you know, “Okay, whatever,” you know.
You didn’t say, “Hang on, you, Mr Pickering, approved my leave for the three days but you’re dismissing me because of this”?---No.
You didn’t say that to him?---I didn’t, no.” 6
[17] In our view the Senior Deputy President made an error in finding that the appellant ‘appears to have been close to resignation’ and that ‘her employment would have continued for no more than two weeks longer, at the very most.’ We have reached this conclusion for three reasons.
[18] First, the evidence upon which the Senior Deputy President relied does not provide a sufficient basis for the findings made and is against the weight of the evidence.
[19] Second, the proposition that the appellant was close to resigning was never put to the appellant and was not a matter canvassed by the respondent’s evidence. We note that in his closing submissions Mr Pickering said that he believed that Ms Parker-Walford was ‘going to resign anyway’ 7 but he made no such assertion in his evidence and the basis for his belief is unstated.
[20] Third, the findings are inconsistent with other statements made by Ms Parker-Walford in the proceedings, in particular:
“I was very loyal. I wanted to move things forward. We were in meetings with a laboratory about extending the life of the sushi. My main objective every day when I go there was to ensure that production was efficient ...” 8
[21] It is also relevant to note that the respondent’s business was restructuring and in July 2012 Ms Parker-Walford had been offered, and accepted, a two per cent shareholding in the new entity as part of a performance incentive. 9
[22] An appeal under s.604 of the Act is an appeal by way of rehearing and the Tribunal’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 10 There is no right to appeal, rather an appeal may only be made with the permission of the Tribunal.
[23] The decision subject to appeal was made under Part 3.2 - Unfair Dismissal - of the Act. Section 400(1) of the Act provides that permission to appeal must not be granted from a decision made under Part 3.2 unless the Tribunal considers that it is in the public interest to do so. Further, in such matters, appeals on a question of fact can only be made on the ground that the decision involved a ‘significant error of fact’ (s.400(2)). Section 400 of the Act manifests an intention that the threshold for a grant of permission to appeal is higher in respect of unfair dismissal appeals than the threshold pertaining to appeals generally (compare s.604(2) and s.400).
[24] We have concluded that the error made by his Honour in relation to how long the appellant would have remained in her employment, had she not been dismissed, was a ‘significant error of fact’ within the meaning of s400(2). As we have noted earlier, his Honour’s finding in respect of this issue was a significant consideration in his decision to award the appellant two weeks’ compensation. We now turn to the question of whether it is ‘in the public interest’ to grant permission to appeal.
[25] The public interest test in s.400(1) is not satisfied simply by the identification of error or a preference for a different result. In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Tribunal identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issue of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters... 11
[26] We are satisfied that the decision at first instance manifests an injustice. The appellant had been dismissed from her employment for no valid reason and without an opportunity to respond to the full range of reasons for that decision. Despite this, she was only awarded two weeks’ compensation on the basis of an erroneous factual finding about how long she would have remained in her employment. It is also relevant to note that the award of two weeks’ pay was offset by the two weeks’ pay in lieu of notice which Ms Parker-Walford had already received. The practical effect of his Honour’s order was that the appellant was provided with no compensation at all. We are satisfied that it is in the public interest to grant permission to appeal and we grant permission to appeal.
[27] Section 607(3) of the Act sets out the Commission’s powers in relation to an appeal. In this matter, we have decided to uphold the appeal, quash the Senior Deputy President’s order and make a further decision in relation to the matter that is the subject of the appeal.
[28] As we noted earlier, there is no challenge to the Senior Deputy President’s conclusion that Ms Parker-Walford was unfairly dismissed by the respondent. Nor is there any challenge to his Honour’s finding that reinstatement was inappropriate. The sole issue in dispute concerns the amount of compensation to be awarded.
[29] Section 392 of the Act sets out the factors the Commission must take into account in determining an amount of compensation. The only challenge to his Honour’s findings in respect of these factors is in relation to s.392(2)(c). In the circumstances, we think the most appropriate and expeditious course is to adopt the balance of his Honour’s findings, make our own finding in respect of s.392(2)(c) on the material before us, and determine the amount of compensation to be awarded. No party submitted that the matter should be remitted for a further hearing in relation to the quantum of compensation and such a course would only result in further inconvenience and cost to both parties.
[30] As to how long Ms Parker-Walford would have remained employed by the respondent but for her dismissal we agree with his Honour’s observations at paragraphs [50]-[51] of the decision subject to appeal:
“[50] The Applicant’s conduct was not perfect. Also there are deficiencies in the performance of her work particularly in relation to procurement and meeting the wage cost expectations.
[51] With some more time these matters could have developed to a point at which they provided a valid reason for the dismissal of the Applicant. But that critical point had not been reached by 16 September 2012.”
[31] The evidence of Brodie Bowtell, 12 Zenaida Presenburger13 and Rebecca Gleeson14 also makes it clear that there were issues with Ms Parker-Walford’s management style. But the evidence also establishes that the appellant had not been formally warned in relation to any of these matters.
[32] On the basis of all of the material we find that had she not been dismissed the appellant would have remained employed by the respondent for a further six weeks. Had she not been dismissed on 16 September 2012 the remuneration that the appellant would have been likely to receive is six weeks’ pay plus superannuation. We note that the appellant has already been paid two weeks’ pay in lieu of notice.
[33] On the basis of the above finding and the other findings made by his Honour in relation to the matters identified in s.392 (which we adopt) we order that the appellant be paid four weeks salary plus superannuation. This amount is in addition to the two weeks pay in lieu of notice which has already been paid. The respondent is to pay the four weeks salary into the appellant’s nominated bank account and the superannuation amount into the appellant’s nominated superannuation fund, within 14 days of today’s date (i.e. by Friday 26 April 2013).
PRESIDENT
Appearances:
M. Parker-Walford on her own behalf.
D. Pickering for PHT Holdings Pty Ltd T/A Sushi-Pro.Hearing details:
2013.
Brisbane (via telephone):
April 4.
1 [2013] FWC 432 at para 88.
2 [2013] FWC 432.
3 [2013] FWC 432 at paras 70 - 85.
4 [2013] FWC 432 at para 74.
5 Transcript, 17 January 2013 at PN678 - PN684.
6 Transcript, 17 January 2013, at PN147 - 150 and PN161 - 167.
7 Transcript, 17 January 2013 at PN641.
8 Transcript, 17 January 2013 at PN634.
9 Exhibit R1 and Transcript, 17 January 2013 at PN364 - 367.
10 This is so because on appeal FWC has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
11 (2010) 197 IR 266 at para 27.
12 Transcript, 17 January 2013 at PN444 - 447.
13 Transcript, 17 January 2013 at PN475 - 479.
14 Transcript, 17 January 2013 at PN610 - 612.
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