Pauline Italia v Viva Life Photography Pty Ltd T/A Viva Life Photography Frankston

[2019] FWC 5710

[2019] FWC 5710

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Pauline Italia
v
Viva Life Photography Pty Ltd T/A Viva Life Photography - Frankston
(U2019/2294)

DEPUTY PRESIDENT MASSON MELBOURNE, 3 SEPTEMBER 2019

Application for an unfair dismissal remedy - small business employer – whether compliance with Small Business Fair Dismissal Code - dismissal found to be unfair – reinstatement not appropriate – compensation ordered.

[1] On 2 March 2019, Ms Pauline Italia (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that she had been unfairly dismissed from her employment with Viva Life Photography Pty Ltd t/a Viva Life Photography – Frankston (Respondent). The Applicant seeks monetary compensation.

When can the Commission order a remedy for unfair dismissal?

[2] Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

(b) the Applicant has been unfairly dismissed.

[3] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

[4] Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(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.

When has a person been unfairly dismissed?

[5] Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.

Background

[6] The uncontested factual background to the matter is as follows.

[7] The Respondent is a Viva Life Photography franchise store located at Frankston, Victoria which is owned by a trust called Viva Family Trust. That trust also owns and operates one other Viva Life Photography store located in Joondalup, Western Australia. The number of employees in the Frankston shop is five, including the Manger, Mr Ben Cox (Mr Cox).

[8] Mr Cox commenced as Manager of the Respondent’s Frankston shop in late October 2018. The previous Manager was the Applicant’s partner Mr Derek den Hollander (Mr den Hollander) who by October 2018 had resigned from the business.

[9] On 25 October 2016 the Applicant was hired by Mr den Hollander and commenced employment on a casual basis with the Respondent in an administrative/customer service role at the Frankston shop. In November 2018, the Applicant began training as a ‘booker’. At the time of her dismissal the Applicant’s casual hourly rate of pay received for work performed Monday-Friday was $25.99 per hour, and her rate of pay received for work performed on a Saturday was $28.07 per hour. 1

[10] On 7 January 2019 at 10.20 pm, the Applicant sent a text message 2 (the 7 January text message) to Mr Cox in relation to the Applicant feeling aggrieved at not having received a ‘journal’ that other employees had received as a Christmas gift from the Respondent. The text message read as follows;

‘hey boss, just a question I need to ask, how come i didn’t get a journal from Jo? Not that I really give a shit but it is obvious she does not consider me as part of the team!’

[11] On 1 February 2019, which was a Friday night, the Applicant fell and injured her back which prevented her attendance at work. She contacted Ms Field, who was the acting manager for the Frankston store of the Respondent, to advise that she was injured and unable to attend work. 3 On 3 February 2019 at 7.05pm and 9.09pm, the Applicant sent two text messages4 (the 3 February text messages) to Mr Cox in relation to her absence from work. The text message at 7.09pm read as follows;

‘hi Ben sad to hear you were upset that I didn’t call you I called maddy instead of you, cause you told me Maddy will let me know when i’m needed to come to work while you were away. Don’t know what to say i’m confused’

[12] Following no response from Mr Cox the Applicant sent a further text message to Mr Cox at 9.09pm, which was in response to what she believed to be Mr Cox’s lack of concern as to her injury. The message was in the following terms;

‘Thank you for your well wishes! Geez does viva hate me that much??’

[13] On 19 February 2019 Viva Life Photography held an awards night at Mooney Ponds in Victoria. The Applicant advised Mr Cox via a text message on 18 February 2019, that she would not be attending the awards night because of earlier advice from Mr Cox that she would not be paid for such attendance. Mr Cox replied ‘ok’ in a text message to the Applicant when advised of her non-attendance. 5

[14] On the afternoon of 20 February 2019 the Applicant was contacted by telephone by Mr Cox. During the course of the conversation, Mr Cox commented to the Applicant that she did not appear ‘happy at work’ with which observation the Applicant disagreed. Mr Cox then advised the Applicant he would have to ‘let her go.’ The telephone call ended shortly after. The reasons for the dismissal of the Applicant were not conveyed to her by Mr Cox during the telephone call. 6

[15] On 22 February 2019 the Applicant was provided with a Separation Certificate by the Respondent which cited the reason for dismissal as ‘poor attitude’. 7 The Applicant also requested and received written confirmation of her termination of employment in an email from Mr Cox on 1 March 20198, which stated as follows;

‘Dear Pauline

As requested, and in addition to the employment separation certificate you should have received, I can confirm that your casual contract of employment with Viva Photography Frankston was terminated on Wednesday 20 February 2019.

The reason for termination was as below;

Poor attitude

………’

[16] On 24 February 2019 Mr den Hollander wrote to Mr Andrew Cross of Paysmart filing a formal complaint (Paysmart Formal Complaint) regarding fraud and security issues. 9 Mr den Hollander alleged that someone had contacted Paysmart and fraudulently used the password he had previously used when working for the Respondent. Mr den Hollander requested that Paysmart take a number of actions to resolve his complaint.

[17] On 28 February 2019 Mr den Hollander received an email from Mr Andrew Cross of Paysmart in response to the Formal Complaint. Mr Cross confirmed that an investigation had taken place and that corrective actions had been taken by Paysmart. Mr Cross also confirmed that a phone call had been received by Paysmart on 15 February 2019 from a person claiming to be Mr den Hollander and that the call originated from the Respondent’s Frankston Store. 10

[18] On 5 March 2019 Mr den Hollander filed a Fraud Assessment Form 11 (Police Complaint) with Victoria Police, further to the Paysmart Formal Complaint he had filed. He identified Mr Cox as the person alleged to have engaged in fraud. The Applicant provided and attached a statement in support of Mr den Hollander’s Police Complaint.

The conference

[19] There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.

[20] After taking into account the views of the Applicant and the Respondent and whether a hearing or conference would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a conference for the matter (s.398 of the FW Act).

[21] Accordingly, at the conference on 16 August 2019, the Applicant was represented by Mr Derek den Hollander and the Respondent was represented by Mr Cox who is the Manager of the Respondent.

Witnesses

[22] The Applicant gave evidence on her own behalf and the following witnesses also gave evidence on her behalf:

•  Mr Derrick den Hollander – Former Manager of the Respondent

•  Ms Madison Field – Former casual employee of the Respondent

[23] The following witnesses gave evidence on behalf of the Respondent:

•  Mr Ben Cox – Manager of the Respondent

Has the Applicant been dismissed?

[24] A threshold issue to determine is whether the Applicant has been dismissed from their employment.

[25] Section 386(1) of the FW Act provides that the Applicant has been dismissed if:

(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or

(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.

[26] Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.

[27] There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent on 20 February 2019.

[28] I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the FW Act.

Initial matters

[29] Under section 396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

Was the application made within the period required?

[30] Section 394(2) requires an application to be made within 21 days after the dismissal took effect.

[31] It is not disputed and I find that the Applicant was dismissed from her employment on 20 February 2019 and made her application on 2 March 2019. I am therefore satisfied that the application was made within the period required in subsection 394(2).

Was the Applicant protected from unfair dismissal at the time of dismissal?

[32] I have set out above when a person is protected from unfair dismissal.

[33] It was not in dispute and I find that the Respondent is a small business employer, having fewer than 15 employees at the relevant time.

[34] It was not in dispute and I find that the Applicant was an employee, who commenced her employment with the Respondent on 25 October 2016 and was dismissed on 20 February 2019, a period in excess of 12 months.

[35] It was not in dispute in the proceedings before me and I find that the Applicant was a casual employee employed on a regular and systematic basis and had a reasonable expectation of continuing employment with the Respondent on a regular and systematic basis.

[36] I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.

[37] It was also not in dispute and I find that, at the time of dismissal, the Applicant was covered by an award, being the General Retail Award 2010 12 (the Award).

[38] I am therefore satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[39] Section 388 of the FW Act provides that a person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

[40] As mentioned above, I find that the Respondent was a small business employer within the meaning of s.23 of the FW Act at the relevant time, having fewer than 15 employees (including casual employees employed on a regular and systematic basis).

[41] It is therefore necessary to consider whether the Respondent complied with the Small Business Fair Dismissal Code (the Code) in relation to the dismissal.

Did the Respondent comply with the Small Business Fair Dismissal Code in relation to the dismissal?

[42] The Code applies to small business employers with less than 15 employees. A person is not unfairly dismissed if the dismissal is consistent with the Code and immediately before dismissal or at the time notice of the dismissal is given, whichever is earlier, the employer is a small business employer. I have already found that the Respondent was a small business employer at the relevant time.

[43] The Code declared by the Minister pursuant to s 388(1) of the Act relevantly provides as follows:

“Summary dismissal

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

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.”

[44] In Pinawin v Domingo 13, the Full Bench considered whether, in the context of a summary dismissal under the Code, the Commission had to be satisfied that the serious misconduct which was the basis for the dismissal actually occurred:

‘[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. The circumstances include the experience and resources of the small business employer concerned.

…

[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well …’

[45] Another Full Bench of the Commission more recently examined the summary dismissal part of the Code in detail in Ryman v Thrash Pty Ltd 14and concluded as follows:

‘[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates the following way:

If a small business employer has dismissed an employee without notice – that is, with immediate effect – on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.

In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectivity speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.’

[46] The Applicant was dismissed without notice by the Respondent on 20 February 2019. Consequently my role in this matter is to determine whether the employer genuinely held a belief that the employee had committed an act of serious misconduct, sufficiently serious to justify immediate dismissal and whether that belief was, objectively speaking, based on reasonable grounds. It is not necessary to determine whether the serious misconduct did in fact occur or that the employer was correct in the belief that it held.

[47] Mr Cox confirmed in his evidence that the reason for the dismissal of the Applicant was that he felt the Applicant was unhappy and that her unhappiness manifested in a poor attitude displayed by her. 15 He referred to the 7 January text message and 3 February text messages received from the Applicant which he described as inappropriate and evidence of her poor attitude.16 He further confirmed that it was on the basis of those text messages that he formed a view that it was appropriate to dismiss the Applicant. Mr Cox conceded in his evidence that he dismissed the Applicant without warning, and that the conduct that he dismissed her for did not fall into the category of serious misconduct that would justify immediate dismissal.17

[48] Mr Cox also conceded that the dismissal of the Applicant did not fall into the second category under the Code. That is, he did not warn the Applicant at any stage that her employment was at risk due to conduct or capacity issues. 18

[49] Mr Cox went on to explain that while he was aware of the Code at the time of the dismissal of the Applicant, it was not complied with due to the Respondent’s mistaken belief that the Applicant had not met the required minimum employment period (MEP) as a casual employee, such as would invoke the jurisdiction of the Commission to deal with an unfair dismissal application. 19

[50] The Applicant submits that the reasons for her dismissal were related to other events, including her declining to attend the awards evening conducted by Viva Photography on the 19 February 2019. She infers from the timing of that event and the embarrassment she claims Mr Cox suffered through her and other staff of the Respondent not attending, that the dismissal which occurred the following day was related to her non-attendance. The Applicant also points to her colleague Ms Madison Field who similarly declined to attend the awards night and was also dismissed on the 20 February 2019 for reasons of a poor attitude. 20 Mr Cox flatly denied that the Applicant’s non-attendance at the awards evening led to her dismissal.

[51] While the Applicant holds a strong suspicion as to the reasons for her dismissal there is no evidence beyond the timing of the awards night and the date of her termination on which to draw an adverse inference against the Respondent. In any case it is unnecessary for me to make a finding as to whether the Applicant’s non-attendance at the awards night was the reason for the dismissal as the Respondent properly concedes that the dismissal was not consistent with the Code.

[52] I am satisfied that that at the time of the Applicant’s dismissal the Respondent did not hold a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Nor had the Respondent warned the Applicant that her employment was at risk due to capacity or conduct issues. It follows and I am satisfied that the dismissal was not consistent with the Code.

Was the dismissal a case of genuine redundancy?

[53] Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:

(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

[54] It was not in dispute and I find that the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.

[55] I am therefore satisfied that the dismissal was not a case of genuine redundancy.

[56] Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.

Was the dismissal harsh, unjust or unreasonable?

[57] Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.

[58] I am required to consider each of these criteria; to the extent they are relevant to the factual circumstances before me. 21

[59] I set out my consideration of each below.

Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?

[60] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 22 and should not be “capricious, fanciful, spiteful or prejudiced.”23 However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.24

[61] The Applicant submitted that there was no valid reason for her dismissal related to her capacity or conduct. The Applicant referred to her performance which was never put in issue by the Respondent. The Applicant further submitted that her non-attendance at the awards night on 19 February 2019 provoked her dismissal. She drew on the evidence of Ms. Field as to Mr. Cox’s personal embarrassment and angry reaction to his staff’s non-attendance at the awards night. 25

[62] The Applicant acknowledged sending the 7 January text message and 3 February text messages to Mr. Cox. She gave evidence that the 7 January text message was sent because she was upset at not receiving a Christmas gift, unlike other staff. 26 The Applicant also stated that she sent the 3 February text messages to Mr. Cox after she had fallen and injured her back on 1 February 2019 and that Mr. Cox had shown no concern as to her condition and had in fact expressed anger to Ms. Field regarding the Applicant’s unavailability.27

[63] The Respondent denied that the dismissal of the Applicant was in any way related to the Applicant’s non-attendance at the 19 February 2019 awards night, and relied on the evidence of the time and tone of the Applicant’s text messages sent to Mr. Cox on 7 January and 3 February 2019 as the reason for the Applicant’s dismissal. 28

[64] The decision of the Respondent to dismiss the Applicant due to her ‘poor attitude’ was on its own evidence limited to the text messages sent by the Applicant to Mr. Cox on 7 January 2019 and 3 February 2019. Those text messages reveal that the Applicant was upset at not receiving a Christmas gift, unlike her colleagues, and was also upset at Mr. Cox’s perceived lack of concern for her after she had fallen and injured her back on 1 February 2019.

[65] While the text messages reveal dissatisfaction on the part of the Applicant at her treatment by the Respondent and Mr. Cox, they do not in themselves found a reasonable basis for the Applicant’s dismissal. At best they may have warranted a direct discussion with the Applicant in respect of the tone and timing of her communication. The text messages certainly did not warrant her termination, which I note did not occur until 2.5 weeks after the 3 February text message.

[66] No other grounds were advanced by the Respondent to justify the Applicant’s dismissal. Nor was there any other evidence adduced during the proceedings that persuades me that a valid reason existed for the Applicant’s dismissal. I am led to conclude that, for reasons that are not clear on the evidence, the Respondent decided to terminate the Applicant’s employment believing that as a casual employee she was not a person protected from unfair dismissal and that as such a valid reason and a procedurally fair process were not required.

[67] In all the circumstances, I find that there was no valid reason related to the Applicant’s conduct or capacity.

Was the Applicant notified of the valid reason?

[68] As stated above at [14] the Applicant was contacted by telephone on the afternoon of 20 February 2019 by Mr. Cox to advise her of her dismissal. Mr. Cox conceded that he did not offer the Applicant an explanation during that telephone call as to why she was being ‘let go’ beyond his expressed observation that she appeared unhappy. 29 Putting aside my finding that there was no valid reason for the Applicant’s dismissal it is clear that no justification at all was provided to the Applicant for her dismissal.

[69] As previously stated there was no valid reason related to the dismissal, therefore this factor is not relevant to the present circumstances. 30

Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?

[70] As I have not found that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances. 31

Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?

[71] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.

[72] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:

“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”32

[73] Given the brevity and manner of communication of the Applicant’s dismissal by the Respondent, the issue of a support person is somewhat moot. Nevertheless, I find that the Respondent did not unreasonably refuse to allow the Applicant to have a support person present at discussions relating to the dismissal. This criteria is therefore a neutral consideration.

Was the Applicant warned about unsatisfactory performance before the dismissal?

[74] As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances. This criteria is therefore a neutral consideration.

To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

[75] Neither party submitted that the size of the Respondent’s enterprise was likely to impact on the procedures followed in effecting the dismissal and I find that the size of the Respondent’s enterprise had no such impact. This criteria is therefore a neutral consideration.

To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

[76] As I have previously found the Respondent is a small business. It is clear however from the evidence that Mr. Cox has several years’ experience managing photography shops including the direct supervision of up to 40 staff over that period. 33 Mr. Cox was aware of the Code which applied to small businesses in respect of dismissal procedures but did not follow the Code out of a mistaken belief it did not apply because the Applicant did not meet the MEP. The Respondent did not contend that the absence of dedicated human resource management specialists in the Respondent’s enterprise impacted on the procedures followed in effecting the dismissal.

[77] I am satisfied in the circumstances that the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise was unlikely to have impacted on the procedures followed in effecting the dismissal. This criteria is therefore a neutral consideration.

What other matters are relevant?

[78] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant. The Applicant submitted that there were various other matters that were relevant to determining whether her dismissal was unfair including;

•  Mr Cox’s apparent positive opinion of her potential revealed by his consideration of her for a sales role;

•  Mr Cox’s negative reaction to the Applicant’s unavailability for work on 2 February 2019 as witnessed by Ms Field; and

•  Mr Cox’s profane language as regularly witnessed by Ms Field. 34

[79] I do not regard the additional matters raised by the Applicant as relevant to my consideration of whether the Applicant’s dismissal was harsh, unjust or unreasonable.

Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?

[80] I have made findings in relation to each matter specified in section 387 as relevant.

[81] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 35 In reaching my conclusion I have had particular regard to the absence of a valid reason for the dismissal. This weighs heavily against a finding that the dismissal was not unfair. There are no other factors that militate against a finding that the dismissal was unfair.

[82] Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of the Applicant was harsh, unjust and unreasonable.

Conclusion

[83] I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the FW Act.

Remedy

[84] Being satisfied that the Applicant:

•  made an application for an order granting a remedy under section 394;

•  was a person protected from unfair dismissal; and

•  was unfairly dismissed within the meaning of section 385 of the FW Act,

[85] I may, subject to the FW Act, order the Applicant’s reinstatement or the payment of compensation to the Applicant.

[86] Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:

(a) I am satisfied that reinstatement of the Applicant is inappropriate; and

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

Is reinstatement of the Applicant inappropriate?

Submissions

[87] The Applicant submitted that she was ‘torn’ in terms of the remedy she was seeking. While stating that she enjoyed her job with the Respondent she cited the negative culture of the workplace as a barrier to her return if she were reinstated. The Applicant confirmed in her evidence that she was consequently seeking compensation as she did not believe it was possible to return to work for the Respondent due to ill-feeling she believed Mr Cox harboured towards her. 36

[88] The Respondent also submitted that reinstatement is inappropriate, not least due to events that had arisen since the Applicant’s dismissal, i.e. Mr den Hollander’s Police Complaint filed on 5 March 2019 to which the Applicant had provided a supporting statement. The Respondent submitted that the Police Complaint highlighted that the Applicant held a negative opinion of Mr Cox that would make restoration of the employment relationship impractical. The Respondent also referred to the text messages sent by the Applicant to Mr Cox on 7 January and 3 February 2019 which it claimed revealed a poor relationship between the Applicant and Mr Cox. 37

Findings

[89] The Respondent operates a small business with only five employees engaged in the Frankston store. The evidence of both the Applicant and Mr Cox, which I accept, is that restoration of the employment relationship would be impractical having particular regard to events that have transpired since the Applicant’s dismissal on 20 February 2019.

[90] Having regard to the matters referred to above, I consider that reinstatement is inappropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.

Is an order for payment of compensation appropriate in all the circumstances of the case?

[91] Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…” 38

[92] The circumstances of this case are that the Applicant was dismissed summarily without advice to her as to the reasons for her dismissal, without any prior warnings and without any opportunity to comment on the reasons for the dismissal. As I have found above the dismissal lacked a valid reason. In all of these circumstances, I consider that an order for payment of compensation is appropriate.

Compensation – what must be taken into account in determining an amount?

[93] Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:

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

(b) the length of the Applicant’s service;

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

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

(e) the amount of any remuneration earned by the Applicant 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 Applicant during the period between the making of the order for compensation and the actual compensation; and

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

[94] I consider all the circumstances of the case below.

Effect of the order on the viability of the Respondent’s enterprise

[95] There is no dispute and I am satisfied that an order for compensation would not have an effect on the viability of the employer’s enterprise.

Length of the Applicant’s service

[96] The Applicant submitted that consideration of the Applicant’s length of service of 2.5 years would favour the determination of a greater amount of compensation, while the Respondent submitted that consideration of the Applicant’s length of service would favour the determination of a lesser amount of compensation.

[97] I do not regard the Applicant’s length of service of 2.5 years as either supportive of reducing or increasing the amount of compensation ordered.

Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed

[98] As stated by a majority of the Full Court of the Federal Court, “in determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.” 39

Submissions

[99] The Applicant submits that she enjoyed working for the Respondent and that her employment would have been likely to continue for a further period of some years and could have been up to 5 years. The Applicant rejected the proposition put to her by the Respondent that her relationship with Mr Cox was poor and as such was likely to have led to her leaving her employment with the Respondent in the near term had she not been dismissed. She acknowledged having sent text messages to Mr Cox on 7 January and 3 February that revealed her sadness and frustration at her perceived treatment by the Respondent but she felt those issues had been dealt with.

[100] The Applicant further submits that the amount of remuneration that she would have received would have increased due to her foreshadowed promotion to the position of ‘booker’. In the alternative the Applicant submits that the calculation of likely remuneration ought to be based on her average earnings over the 12 months immediately preceding her termination.

[101] The Respondent submits that the Applicant’s employment would not have continued much longer due to a number of factors including her apparent unhappiness and her attitude towards Mr Cox. The Respondent referred to the 7 January text message and 3 February text message as indicative of a poor relationship between the Applicant and Mr Cox personally. The Respondent also refers to what it claims was an apparent belief of the Applicant that Mr Cox had engaged in ‘criminal’ or inappropriate conduct, as evidence by her providing a statement in support of Mr den Hollander’s Police Statement.

[102] The Respondent also submits that any calculation of compensation should be based on the average earnings for the 6 months immediately prior to the Applicant’s dismissal. This was due to the changes in the business that had resulted in reduced hours for the Applicant in that 6 month period, and that the reduced hours were likely to have continued into the future had she remained employed.

Evidence

[103] In the 12 month period immediately prior to the Applicant’s dismissal on 20 February 2019 the Applicant earned $10,534.41. In that period her average weekly earnings over the 52 week period was $202.58 per week. The Applicant worked an average of 7.29 hours per week over that 52 week period. These hours were comprised of an average of 4.26 hours worked during Monday to Friday of each week and an average of 3.03 hours worked each Saturday.

[104] In the 6 month period immediately prior to the Applicant’s dismissal on 20 February 2019 the Applicant earned $4305.89. In that period her average weekly earnings over the 52 week period was $165.61 per week. The Applicant worked an average of 5.99 hours per week over that 26 week period. These hours were comprised of an average of 2.55 hours worked during Monday to Friday of each week and an average of 3.44 hours worked each Saturday.

[105] As regards the nature of the relationship between the Applicant and Mr Cox, the evidence is confined to the Applicant’s accompanying statement filed with Mr den Hollander’s Police Complaint and her text messages sent to Mr Cox which the Applicant acknowledges were sent in circumstances where she was upset at her perceived treatment by the Respondent. I note that the Police Complaint was lodged by Mr den Hollander after the Applicant’s dismissal.

Findings

[106] I am not satisfied on the basis of the Police Complaint statement filed after the Applicant’s dismissal and her text messages of 7 January and 3 February 2019 to Mr Cox, that the relationship between the Applicant and the Respondent was so fractious and irreparably damaged that the Applicant was likely to have resigned or been dismissed for other reasons had she not been dismissed on 20 February 2019.

[107] I find that while the relationship between the Applicant and Mr Cox may have had some issues in the lead up to her dismissal, it was not so bad as would have made it inevitable that the Applicant would have resigned or been dismissed for other reasons in the near term had she not been dismissed on 20 February 2019. Having said that, the Applicant was a casual employee and had only been employed in the business for approximately 2.5 years which weighs against a finding that her employment would have continued for a lengthy period of time. I am unwilling to accept on the basis of the Applicant’s 2.5 years of casual employment, which consisted of an average of less than 8 hours per week, that she would have continued to work for the Respondent for several years as contended by the Applicant.

[108] I am satisfied that had the Applicant not been dismissed it is likely that she would have remained in the Respondent’s employment for a further 9 months. In reaching this conclusion I have had particular regard to the Applicant’s length of employment with the Respondent as a casual employee and the inherent uncertainty of predicting the likelihood of long term casual employment.

[109] Turning to the weekly remuneration, the evidence as to the Applicant’s earnings reveals a reduction in average weekly hours and earnings in the six month period immediately prior to her dismissal. This undermines the Applicant’s argument that her likely ‘promotion’ to the position of ‘booker’ would have resulted in an increase in hours of work. For the Applicant’s submissions to be accepted, a pattern of increased hours ought to be obvious between November 2018 and the date of her dismissal in February 2018. No such pattern is obvious. In fact the evidence is to the contrary and the Applicant’s submission that increased earnings should be assumed must consequently be rejected.

[110] In assessing what the Applicant would have earned had she remained in the Respondent’s employment I accept the clear evidence of her reduced hours of work in the 6 months immediately preceding the Applicant’s dismissal when compared to the 12 month period immediately preceding dismissal. That evidence supports the Respondent’s submission that the lower average hours of work per week experienced by the Applicant in the 6 month period immediately preceding dismissal are likely to have continued had the Applicant not been dismissed.

[111] Unsurprisingly, the Applicant urges in the alternative to their primary submission that I should assume projected earnings based on average earnings for the 12 month period immediately preceding her dismissal. I am not however persuaded by the Applicant’s submissions that the higher average hours of the 12 month period prior to dismissal should be applied rather than the 6 months period immediately preceding termination. I am consequently satisfied that the average hours and remuneration earned by the Applicant in the 6 months immediately preceding termination provides a sound basis for calculating the remuneration that the Applicant is likely to have earned but for her dismissal.

[112] Based on the average weekly earnings in the 6 months preceding termination of the Applicant of $165.61 per week, the projected remuneration over 9 months is $6,458.79. I am therefore satisfied it is likely that had the Applicant not been dismissed she would have received $6.458.79 in remuneration.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

[113] An applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal. 40 What is reasonable depends on the circumstances of the case.41

[114] The Applicant gave evidence that between the date of her dismissal on 20 February 2019 and 21 June 2019 when she saw an Industrial Officer of the Transport Workers Union she made no attempts to secure alternate employment. The Applicant attributed this inactivity to her focus on gaining reinstatement to her former role. The Applicant claimed to have applied for ‘40 jobs’ since being advised by the TWU Industrial Officer on 21 June 2019 that she needed to demonstrate efforts to mitigate her losses. 42

[115] The Applicant was, during the course of the conference, directed to file evidence of her job seeking efforts since receiving the advice referred to above at [113] from the TWU Industrial Officer. The additional material subsequently filed consisted of screenshots of SEEK website pages which appeared to indicate that the Applicant had applied for several jobs on 21 June and 28 June 2019.

[116] The evidence of the Applicant’s efforts to mitigate her losses is limited to several applications made on 21 and 28 June 2019. The evidence also indicates that no job seeking efforts were made by her in the 4 month period immediately following her dismissal and there is no evidence of further efforts to secure employment after the 28 June 2019.

[117] It is well established that the principle of mitigation operates as a conditional bar to recovery of damages in common law and that those principles are relevant to assessing the extent to which an order for compensation for unfair dismissal is to be adjusted. 43 Further, an applicant must act reasonably in mitigating their loss.44

[118] It would appear on the evidence that the Applicant’s job seeking efforts were confined to applications made on 21 and 28 June 2019. I am not satisfied that the limited job applications made in that one week period in June 2019 constitute reasonable steps taken by the Applicant. This in my view warrants a reduction of 50% of the compensation in the circumstances.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

[119] The Applicant’s evidence is that she has not earned any remuneration from employment or other work since the dismissal. That evidence is not challenged by the Respondent.

[120] I am satisfied that the Applicant has not earned any remuneration from employment or other work during the period since her dismissal. No deduction will be made.

Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation

[121] The Applicant’s evidence is that she is unlikely to earn any remuneration in the period between the making of the order for compensation and the payment of compensation. That evidence is not challenged by the Respondent.

[122] I am satisfied that the Applicant is unlikely to earn any income between the making of the order for compensation and the payment of compensation. No deduction will be made.

Other relevant matters

[123] No other relevant matters were raised by the parties going to an order for compensation.

Compensation – how is the amount to be calculated?

[124] As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg). 45 This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages46.”47

[125] The approach in Sprigg is as follows:

Step 1: Estimate the remuneration the Applicant would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

Step 1

[126] I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment to be $6.458.79 on the basis of my finding it is likely the Applicant would have remained in employment for a further period of 9 months. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”. 48

Step 2

[127] I have found that the Applicant has not earned any amount of remuneration since the date of her dismissal, and that she is unlikely to earn any remuneration between the making of the order for compensation and the payment of compensation.

[128] Only monies earned since termination for the anticipated period of employment are to be deducted. 49 Consequently, no deductions are to be made for earnings.

[129] I have found however that the Applicant has failed to take reasonable steps to mitigate her losses and as a consequence I intend to deduct 50% to reflect that. This reduces the amount of compensation to $3229.39.

Step 3

[130] I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment. 50

[131] I do not consider it appropriate to deduct an amount for contingencies.

Step 4

[132] I have considered the impact of taxation but have elected to settle a gross amount of $3229.39 which is to be subject to normal taxation.

[133] Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,” 51

[134] I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.

Compensation – is the amount to be reduced on account of misconduct?

[135] If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.

[136] I am satisfied that misconduct of the Applicant did not contribute to the employer’s decision to dismiss. Therefore the amount of the order for compensation is not to be reduced on account of misconduct.

Compensation – how does the compensation cap apply?

[137] Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:

(a) the amount worked out under section 392(6); and

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

[138] The amount worked out under section 392(6) is the total of the following amounts:

(a) the total amount of the remuneration:

(i) received by the Applicant; or

(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.

[139] There was no dispute and I find that the total amount of the remuneration received by the Applicant during the 26 weeks immediately before the dismissal was $4305.89.

[140] The high income threshold immediately before the dismissal on 20 February 2019 was $145,400. Half of that amount is $72,700

[141] The amount of compensation ordered by the Commission must therefore not exceed $4305.89.

[142] In light of the above, I will make an order that the Respondent pay $3229.39 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.

[143] An order giving effect to that decision will be separately issued with this Decision.

DEPUTY PRESIDENT

Appearances:

D. den Hollander for the Applicant.

B. Cox for the Respondent.

Hearing details:

2019
Melbourne
August 16

Printed by authority of the Commonwealth Government Printer

<PR711392>

 1   Exhibit R3, Document of payroll activity between 20/8/18 – 20/2/19

 2   Exhibit R8 Screen grabs from text message history of Mr. Ben Cox

 3   Transcript at PN236

 4   Exhibit R8 Screen grabs from text message history of Mr. Ben Cox

 5   Applicant Form F2, Question 3.2

 6   Transcript of 16 August 2019 at PN423-PN425, PN874-PN875

 7   Exhibit A11 Pauline Italia Employment Separation Certificate

 8   Exhibit A10 Pauline Italia Termination of Employment

 9   Exhibit A7 Paysmart Formal Complaint: Fraud/Security, dated 24 February 2019

 10   Ibid.

 11   Exhibit A8 Fraud Assessment Form

 12   MA000004

 13   [2012] FWAFB 1359

 14   [2015] FWCFB 5264.

 15   Transcript at PN875-PN877

 16   Ibid at PN878-PN884, PN1049-PN1050

 17   Ibid at PN1031-PN1033

 18   Ibid at PN1047

 19   Ibid at PN934-PN940

 20   Exhibit A1 Witness Statement of Ms. Madison Field, dated 1 July 2019

 21   Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

 22   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 23   Ibid.

 24   Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

 25   Transcript at PN270-PN272

 26   Ibid at PN230

 27   Exhibit A1 at page 1

 28   Ibid at PN1049-PN1052

 29   Ibid at PN1053-PN1054

 30   Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

 31   Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

32 Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1542].

 33   Transcript at PN797-PN811

 34   Exhibit A1 at pages 2 &3

 35   ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].

 36   Transcript at PN477-PN486

 37   Ibid at PN1087-PN1090

 38   Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].

 39   He v Lewin [2004] FCAFC 161, [58].

 40   Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

 41   Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

 42   Transcript at PN547-PN551

 43   Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002) at paragraph [52]-53]

 44   Ibid at paragraph [34]

 45 (1998) 88 IR 21.

 46   [2013] FWCFB 431.

 47   Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].

 48   Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].

 49   Ibid.

 50   Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].

 51   Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].