Qinbai Zeng v Conrock Australia Pty Limited
[2023] FWC 3070
•28 NOVEMBER 2023
| [2023] FWC 3070 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Qinbai Zeng
v
Conrock Australia Pty Limited
(U2023/5899)
| COMMISSIONER WILSON | MELBOURNE, 28 NOVEMBER 2023 |
Application for an unfair dismissal remedy. Merits considered. Dismissal found to be unfair. Remedy considered – reinstatement not appropriate; compensation appropriate and ordered.
This decision concerns an application for an unfair dismissal remedy made by Ms Qinbai Zeng (the Applicant, also known as Rong) pursuant to s.394 of the Fair Work Act 2009 (the Act). The application was filed in the Fair Work Commission (the Commission) on 29 June 2023 after she was dismissed by Conrock Australia Pty Limited (Conrock or the Respondent) with effect from 9 June 2023.
For the reasons set out below I find Ms Zeng was unfairly dismissed and that it is appropriate to make an order for compensation.
PRELIMINARIES
Section 396 of the Act requires the determination of four initial matters before consideration of the merits of the application. Those matters are whether the application was made within the period required in s.394(2), whether the person was protected from unfair dismissal, whether the dismissal was consistent with the Small Business Fair Dismissal Code, and whether the dismissal was a case of genuine redundancy. Neither party put forward that any of the initial matters required consideration. In relation to the elements within s.396, I find that Ms Zeng’s application was lodged with the Commission within the 21-day period for making such applications, that at the relevant time she was dismissed she was a person protected from unfair dismissal and that a question of whether her dismissal was a genuine redundancy does not arise. Despite the Respondent being a small business employer, it did not argue that Ms Zeng’s dismissal was consistent with the Small Business Fair Dismissal Code.
The merits of the application were the subject of a determinative conference convened by me on 28 September 2023 at which Ms Zeng appeared for herself with her husband, Mr Hu who is a solicitor, but not with experience in employment law and attending only as a support person. Ms Hui (Helen) Yu, a Director, appeared for Conrock.
Evidence was given in these proceedings by Ms Zeng on her own behalf. Evidence was given on behalf of Conrock by Ms Yu and Mr Sam Segman, the owner/builder overseeing a Truganina property development.
BACKGROUND
Conrock is an Australian based building and construction company operating throughout Victoria.[1]
Ms Zeng commenced employment with Conrock in May or June 2016 on a full-time basis.[2] There is conflicting evidence about the actual starting date. Ms Zeng says she was continuously employed by Conrock from 9 May 2016. The Respondent submit that her first date of employment was 9 May 2016, which continued for two days, with her being re-employed on 6 June 2016. In the overall context of this decision and the matters to be determined it is unnecessary for me to resolve the differences between the parties on this subject.
In early 2023, Ms Zeng converted her employment with Conrock to a part-time arrangement of 3 days per week.[3] Again, the precise starting date of the part-time arrangement is not agreed, with different dates being given by the parties at different parts of their evidence and submissions. The start dates range between 27 March 2023 and 3 April 2023. Again, it is unnecessary for me to resolve the parties’ differences on this matter. Ms Yu’s evidence is that it was agreed Ms Zeng would work part-time until the end of the 2022-2023 financial year and that Conrock advertised in April 2023 to fill the full-time structural engineer role.[4] Ms Yu says Conrock did not have any arrangement with Ms Zeng for her to permanently work part-time and that it was to be only until the end of the 2022-2023 financial year.[5] Ms Zeng accepts that her employment would have otherwise ended on 30 June 2023 had she not been dismissed.[6]
Ms Zeng says she worked as a design engineer[7] and that the role involves:
“the design engineer, who prepares 3D models based on design documents. The design engineer will also take on the role of coordinating with the shop drawing team, and other internal and external parties such as structural engineers, builders and various consultants;”[8]
Ms Zeng submits that Conrock’s checking engineer left employment in September 2021 and as a result she was required to perform the role both of design engineer and checking engineer on a Truganina property development which is presently being constructed (the Truganina Project).[9] The checking engineer is responsible for reviewing the design drawings.
The Respondent’s Ms Yu says that Ms Zeng was initially employed as an Engineer Assistant/Graduate Structural Engineer[10] and was promoted to an Associate position in 2018.[11] Ms Yu also says Ms Zeng’s role required her to create 3D models in drafting software based on approved structural drawings. Ms Yu is herself a qualified engineer.[12]
Ms Zeng was notified of her dismissal by email from Ms Yu on Friday, 12 May 2023 and was provided with 4 weeks’ notice, with the date of effect of her dismissal being Friday, 9 June 2023.
The Respondent submits that Ms Zeng was trained to follow company policies and procedures and submits the reason for dismissal as Ms Zeng failing to follow procedures, issuing preliminary shop drawings to the factory without structural engineer approval, and instructing the factory workers to produce elements which resulted in damages and financial loss.[13]
Ms Zeng disputes the dismissal denying all allegations of misconduct[14] and asserts that Ms Yu failed to provide appropriate instructions and support to her during the Truganina Project.[15] Ms Zeng denies instructing the factory to produce elements based on preliminary shop drawings.[16]
LEGISLATION
The legislative provisions relevant to this matter are set out in s.387 of the Act, which is as follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
Determination of whether the Applicant’s dismissal was harsh, unjust or unreasonable requires each of the matters specified in s.387 to be taken into account. The Full Bench has summarised the approach that should be taken by the Commission to the criteria within s.387 in the following way:[17]
“[28] The following propositions concerning consideration as to whether there is a valid reason for dismissal for the purpose of s.387 are well established:
· a valid reason is one which is sound, defensible and well-founded, and not capricious, fanciful, spiteful or prejudiced;[18]
· a reason would be valid because the conduct occurred and justified termination; conversely the reason might not be valid because the conduct did not occur or it did occur but did not justify termination (because, for example, it involved a trivial misdemeanour);[19]
· it is not necessary to demonstrate “serious misconduct” or misconduct sufficiently serious to justify summary dismissal in order to establish a valid reason for dismissal;[20]
· the existence of a valid reason to dismiss is not assessed by reference to a legal right to dismiss[21] (so that, for example, where summary dismissal has occurred, it is not necessary to determine whether the right of summary dismissal was legally available); and
· the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07 has occurred, since reg.1.07 has no application to s.387(a) (although a finding that misconduct of the type described might well ground a conclusion that there is a valid reason for dismissal based on the employee’s conduct).”[22] (original references)
WAS MS ZENG UNFAIRLY DISMISSED?
A dismissal is unfair in the case of a person protected from unfair dismissal, dismissed by the employer in a manner not consistent with the Small Business Fair Dismissal Code and for reasons other than genuine redundancy, if it was harsh unjust or unreasonable, taking into account the criteria within s.387. I will deal with each of the criteria within s.387 in turn.
(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)
To be a valid reason the reason must be “… sound, defensible or well-founded.” A reason which is “… capricious, fanciful, spiteful or prejudiced …” cannot be a valid reason. [23] The reason for termination must be defensible or justifiable on an objective analysis of the relevant facts.[24] The valid reason for termination is not to be judged by legal entitlement to terminate an employee, “… but [by] the existence of a reason for the exercise of that right” related to the facts of the matter.[25] Ascertainment of a valid reason involves a consideration of the overall context of the “practical sphere” of the employment relationship.[26]
It is not the Commission’s role to “stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court.”[27] However, the Commission “must consider the entire factual matrix in determining whether an employee’s termination was for a valid reason.”[28]
One of the projects on which Ms Zeng was working was a significant factory/warehouse at Truganina. The value of the project is not clearly in agreed evidence before me; however the combined land and construction costs appear to be well above $10 million.
Ms Zeng was dismissed by email on Friday, 12 May 2023 at 1:53PM. Earlier that day, at 11:04AM Ms Yu had emailed Ms Zeng and another employee, Gui Dong Zhang, a drafter, with this enquiry about a problem that she had learned about with the Truganina Project:
“Rong and Guidong,
Can anybody tell me what was happened? Structural drawings is 900 deep beam, why shop drawings is 1500 deep?
So call yourself is professional, don’t understand shop drawings shop should be followed by structural drawings?
Best Regards
Helen Yu”.[29]
At 12:49PM Ms Zeng responded with this email, which also went to Mr Segman who had not been copied into Ms Yu’s original email:
“Hi Helen,
With respect, your assessment of the shop drawings is wrong.
We understand the beam is 900 high. The shop drawing of roof beam 1500mm high, including 900mm beam and 600mm roof parapet. From the shop drawing, the ligatures, bars, and the roughen finish of the beam shell all indicate the beam is 900mm deep.
I will give you a formal response regarding your unacceptable behaviours in the past few months on Monday.
Best regards,
Rong Zeng”.[30] (underlining added)
The last sentence of the correspondence shows a somewhat heightened state of mind on Ms Zeng’s part. Not many employees would openly accuse their manager of unacceptable behaviour and expect to get away with it. She explains what she meant by this term in the following way:
“Helen’s previous unacceptable behaviours: The comment of “unacceptable behaviours” in my email dated 12 May 2023 is justified …. Among the other things –
(a) on 11 November 2022, Helen by email likened me to a previous employee of Conrock by stating “My god, Greg came back, make a fun!” … I confronted her for an apology, but she responded passively;
(b) on 10 May 2023, Helen said to me that I was an “amateur” in connection with the planning drawings;
(c) on 12 May 2023, Helen by email stated that “So call yourself is professional, don’t understand shop drawings shop should be followed by structural drawings? …”[31] (document cross-references omitted)
Ms Zeng’s accusation of Ms Yu that she had engaged in unacceptable behaviours was likely incendiary and probably directly led to her dismissal. When she gave evidence Ms Yu presented as someone for whom respect for her position was critical and who would tolerate no departure from her instructions.
Having received the above communication Ms Yu sent Ms Zeng an email at 1:53PM dismissing her, with it setting out a number of reasons:
“Dear Rong,
To response your email received today, obviously you even don’t know what you caused problems. I will point out for you for this project only in this email.
1. You instructed our drafters to prepare shop drawings for roof edge beam not following designed structural drawings.
2. I had meeting with drafters this morning, they clearly told me that ‘Rong instructed them’.
3. You are sitting the chair to charge the structural models, liaison drafters to prepare structural documents, including issue documents for our factory production. You noted on structural drawings by Conrock Australia, there is no indication parapet walls along the northside, and there is type of wall of 100mm thick has been designed.
4. You just made decisions by yourself without getting instruction from the structural engineer, or myself, chief engineer, is responsible for structure of this project.
5. I have to reminder you, you took the role as architect to design this project, and represented Conrock Australia to submit town planning drawings for above project. You also made a few decision by yourself without taking instructions of the director of Conrock Australia.
For above your conducts are away from professional ethics, I inform 4 weeks termination notice to you from date 12 May 2023!
Best Regards
Helen Yu”.[32]
The Form F3, the Employer Response Form elaborates on the dismissal grounds putting forward that there were large scale departures on Ms Zeng’s part from Conrock’s expectations:
“19. Because the applicant just issued to manufacturers without getting approval from the structural engineer, the following consequences occurred.
·Since November 2022, she has issued 180 unapproved precast element shop drawings to manufacture.
·Of the 180 precast element shop drawings, 40 precast shop drawings have been put on hold since 12th May 2023, before being sent to be produced. They are waiting for new approved shop drawings.
·The other 140 precast elements have already been produced and the drawings corresponding to all the elements need to be re-reviewed to determine whether these 140 elements are indeed correct.
·Out of the 140, 24 produced precast warehouse panels are incorrect as they don't have any vital structural connections between foundation and precast panels. Conrock must pay penalties for the costs of either reproduction; or re-engaging two concreters on a full-time basis and paying the costs of labels, the equipment and materials to fix the mistakes.
·Additionally, 1 of the 140 produced elements were wall panels with no consideration for fire doorways, and therefore need to be re-produced.
·The reviews for the other precast elements are still ongoing.”[33] (underlining added)
Ms Yu’s evidence is that she only learned of the problem with the unapproved shop drawings on 12 May 2023, and in particular only just before she dismissed Ms Zeng.
Ms Zeng submits the Respondent had not raised with her in the context of the dismissal any problems that she caused nor identified any decision that she made for the town planning drawings without Ms Yu’s instructions.
In relation to the shop drawings for the parapet on the north wall of the Truganina Project, Ms Zeng says that she was asked by Ms Yu to seek Mr Segman’s instruction on whether or not to build the parapet with the roof edge beam and he said to do so. Further, Ms Zeng says that she advised Ms Yu that Mr Segman had instructed her to build the parapet with the roof edge beam together. Ms Zeng then instructed the drafters to prepare the shop drawings for the parapet with a placeholder thickness of 100mm which she says the drawings were to be shown to Ms Yu and Mr Segman for finalisation.
Ms Zeng explained in her submissions that her “stated role” was as a design engineer.[34] She also says in respect of the Truganina Project that placeholder elements or figures were used in the shop drawings which were later changed in the final version without objection from Ms Yu and shop drawings were prepared in the absence of structural design without objection from Ms Yu.[35]
Ms Zeng’s evidence included a description of her understanding of standard engineering procedures (the numbering below is as it appears in the original):
“7. I understand the standard procedure for the shop drawing team to be as follows –
(a) the team should consist of the following member –
(i) the design engineer, who prepares 3D models based on design documents1. The design engineer will also take on the role of coordinating with the shop drawing team, and other internal and external parties such as structural engineers, builders and various consultants;
(ii) the drafter, who prepares the shop drawings based on 3D models and design documents;
(iii) the checking engineer, who checks shop drawings;
(b) there are 3 types of shop drawings: the preliminary shop drawings, the For Approval shop drawings, and the For Construction shop drawings;
(c) the design engineer can prepare 3D models, and the drafter can prepare preliminary shop drawings, based on either preliminary design documents, or Issued For Construction design documents;
(d) the drafter sends preliminary shop drawings to the checking engineer;
(e) the checking engineer checks the preliminary shop drawings, and sends the preliminary shop drawings (or revised versions) to the factory. Then, the factory can verify material availabilities, prepare and order material, and arrange work schedule labour;
(f) if the shop drawing team identifies obvious issues in the preliminary shop drawings, the design engineer discusses these issues with the other internal and external parties;
(g) once the planning permit is obtained and plans endorsed, the other parties can issue the Issued For Construction design documents;
(h) only after the team receives the Issued For Construction design documents, the design engineer can review and if necessary revise the model, and the drafter can prepare the For Approval shop drawings;
(a) the checking engineer reviews the For Approval shop drawings, after which the design engineer sends the For Approval shop drawings (or revised versions) to the other parties for approval;
(b) only after the other parties approves the For Approval shop drawings, the drafter can prepare For Construction shop drawings;
(c) the checking engineer conducts a final review of For Construction shop drawings, and sends them to the factory for production.”[36]
This description of the procedures which should be followed was not disputed by Ms Yu, or her witness Mr Segman, although both put forward that Ms Zeng was not following expected procedure. In addition neither contested Ms Zeng’s evidence that the checking engineer whose role is described above left Conrock in September 2021 and was not replaced.[37]
Ms Yu argues that she met with Ms Zeng on Wednesday, 10 May 2023, two days before the dismissal, and discussed several performance issues with her, stating the following in her submissions:
“On 10 May 2023, I did point out the applicant’s conducts, which were unprofessional, to not do again. From then on, I paid more attention to the emails I received. I initially didn’t pay too much focus towards the emails she was involved in because as an Associate with previous experience in other projects, I expected her to properly follow company procedures, and to maintain proper professionalism.”[38] (underlining added)
and
“I gave multiple verbal warnings in my office on 10 May 2023. I called her in my office, and pointed out her improper conduct such as:
‐ issuing unapproved shop drawings to factory. I told her to not issue any more and to wait until the shop drawings are approved;
‐ in her town planning drawings, there are no escape fire stairs, fire escape doors, and combustible cladding materials the applicant nominated on the town planning drawings.
‐ Also, she did the town planning drawings which had multiple issues. In response I indicated that these drawings should be completed by professionally trained architects. I said to her that she has an engineering degree, not an architectural degree. Therefore, she should concentrate in the field she specialises in.”[39]
Ms Zeng contests that what was discussed on 10 May 2023 amounted to any warning about unsatisfactory performance. She agrees there was a conversation, but not about the matters stated above, putting forward that instead the discussion centred on her preparation of town planning drawings:
“So according to Ms Yu's statement there was a conversation on 10 May about a number of things, which included your performance? No.
Do you recall that discussion? No, no. We had a discussion about town planning and then she said, 'Why didn't you consider the Fire Services design? Why are you preparing town planning drawings?' I said, 'You didn't engage the Fire Services engineer at the beginning while I'm preparing town planning drawings.' And then she said, 'Amateur. Amateur. Amateur.' That's what the content of her conversation was.
Can I just pause you there? You agree that there was a discussion on 10 May? Yes, there was a conversation but not about what she wrote there.
Ms Yu says that she called you into her office; is that right? On 10 May?
Yes? Yes.
And she says that she pointed your improper conduct? No.
That's not the case. She says that she told you issuing unapproved shop drawings to factory was inappropriate, and you said – she said to you not to issue any more and wait until the shop drawings were approved? No, she didn't say that.”[40]
Ms Yu was highly critical of Ms Zeng’s performance in her evidence and submissions with her criticisms centring on the view that Ms Zeng appeared to take on greater responsibility than was appropriate or to be expected of someone at the start of their engineering career. Her criticism though appears to have only arisen when she learned of the problem about unauthorised shop drawings. On her evidence that concern arose for the first time on 10 May 2023. No part of Ms Yu’s evidence suggests that she held such concerns before then.
If I accept Ms Yu’s evidence that she directly counselled Ms Zeng on 10 May 2023 about her unprofessional conduct and cautioned her not to do it again then the first test of that discussion was two days later on Friday, 12 May 2023.
The plain evidence is that on that day Ms Yu noticed a problem with the drawings and directly raised it with Ms Zeng and the Chinese drafter, seeking an explanation, querying their professionalism, and asking “don’t [they] understand shop drawings shop should be followed by structural drawings?” However, what is missing from Ms Yu’s email, if I accept her evidence about the discussion on 10 May 2023, is a query along the lines of “why has this come up again when I told you not to do this only two days ago?” Further, there is no explanation put forward from Ms Yu as to why a conversation in the terms she alleges was necessary on 10 May 2023. The absence either of such an explanation about the necessity of the 10 May discussion or a question on 12 May as to why the caution had not been heeded, together with my other concerns about the reliability of Ms Yu’s evidence, causes me to lean against accepting her evidence about the discussion she had with Ms Zeng. Accordingly, I prefer Ms Zeng’s evidence on the content of the 10 May 2023 discussion.
At 11:04AM on 12 May 2023 Ms Yu appeared concerned but not alarmed. At 12:49PM Ms Zeng had pushed back on Ms Yu’s critique of her performance and had been told that she herself had committed unacceptable behaviours. By 1:53PM the same day Ms Yu was without a doubt very angry and sufficiently so to dismiss Ms Zeng without real enquiry, or opportunity for response or reflection. This was a heat of the moment dismissal with no foundation in an investigation or response to allegations.
While Ms Zeng’s dismissal was precipitated by Ms Yu finding that the dimensions of a parapet beam were incorrect, that in turn led to finding that the drawings had not been authorised as she expected. The drawing authorisation matter then became the dominant concern for Ms Yu.
The reason for Ms Yu’s agitation about the shop drawings is sourced in the fact that the drawings had not been approved by a senior approving engineer. In this regard it needs to be borne in mind that Conrock is not a large engineering consultancy with many people to approve drawings in accordance with documented procedures. Instead, it is a small business with only nine employees at the time of Ms Zeng’s dismissal and with Ms Yu being the sole approving engineer.
I accept Ms Yu’s evidence that before she dismissed Ms Zeng she checked whether there were other drawings affected by the same circumstance. In doing so it is likely that she established Ms Zeng had issued many unapproved precast element shop drawings to manufacture. However in the absence of cogent corroborative evidence I do not consider it credible that in the available time period between her first email at 11:04AM and the dismissal email at 1:53PM that Ms Yu established the precise number; however I accept that she eventually established that Ms Zeng had issued 180 unapproved precast element shop drawings to manufacture. I accept also that the number of unapproved shop drawings caused Ms Yu alarm.
In this regard the termination email set out above identifies four key allegations, with each relating to the central allegation that Ms Zeng instructed the drafters to prepare shop drawings for a roof edge beam without having first prepared structural design drawings. Ms Zeng’s evidence on these subjects includes these matters:
“9. In respect of Allegation 1, Helen has not identified to me any problem I may have caused in the context of the dismissal.
10. In respect of Allegation 4, Helen has not identified to me any decision that I may have made for the town planning drawings without her instructions in the context of the dismissal.
11. Both Allegations 2 and 3 seem to relate to the shop drawings for the parapet on the north wall of the Truganina Project. I say the following –
(a) Helen asked me to seek instructions from Sam whether or not to build the parapet with the roof edge beam;
(b) Sam instructed me to build the parapet with the roof edge beam together;
(c) I am of the view that building the parapet with the roof edge beam will not result in any structural issue;
(d) I notified by email to Helen on several occasions Sam’s instructions to build the parapet with the roof edge beam together, including around 40 minutes before Helen sent the Termination Notice;
(e) I instructed the drafter to prepare the proposed shop drawings for the parapet with the thickness of 100mm as placeholder, with a view to show the proposed shop drawings to Helen and Sam for finalisation;
(f) I used 100mm as placeholder, first to avoid clash with openings for the starter bars, and second because 100mm was used as the parapet thickness for another project;
(g) I estimate amending the thickness of the parapet will take less than 1 hour;
(h) in several instances in the Truganina project, placeholder elements or figures were used in the shop drawings, which were later changed in the final version, without objection from Helen; and
(i) in several instances in the Truganina project, shop drawings were prepared in the absence of structural design, without objection from Helen.”[41]
In the above Ms Zeng puts forward several defences to Ms Yu’s criticism of her, including that the Mr Segman had instructed her to build the parapet together with the roof edge beam; her indicated thickness of the parapet was a “placeholder”, with there having been several instances of the use of placeholders later changed in the final version; and that there were also several instances in which shop drawings were prepared in the absence of structural designs. Mr Segman did not directly address these contentions in his evidence, although he did say he expected to be issued correct drawings, giving this evidence in response to a question from Ms Zeng:
“Well, how do you understand the procedure of issuing a shop drawing?‑‑‑Well the procedure is and I just summarise – honestly – I don't – I'm not in a position. I don't want to be in that position. I haven't got the time to go and start viewing every shop drawing that comes in. Okay? And all I can talk about my expectation. My expectation is when I do get an element on site it is the right element. They're structurally designed and the dimensions are designed. And if I've got the wrong element then I'm not happy about it and then it's completely wasted. …”[42]
Ms Zeng’s submissions to the Commission suggest that the Truganina Project was, or soon would be, under significant commercial pressure. It was being built with precast elements produced by a factory within the Conrock Group which had been sold in 2022 with the sale due to settle in October 2023, creating an obvious time pressure. Ms Zeng puts forward that each of Ms Yu and Mr Segman have a commercial interest in the project through their various shareholdings in different parts of the company group. The factory needed to produce the concrete elements in advance of them being required. Mr Segman’s evidence included that if an incorrect drawing was produced the concrete element could be wasted.[43]
On the key criticism advanced by Ms Yu that Ms Zeng inappropriately instructed factory production on the basis of preliminary shop drawings only, Ms Zeng put forward that not only did Ms Yu know of the practice but that she instructed such to be done:
“24. On 10 November 2022, Helen and I conversed to the effect that –
“Helen: The factory has produced a wall panel to test, and will pour another one tomorrow.
I: This isn’t right. What if the planning permit would not match the panels?
Helen: Then we need to lodge the planning permit ASAP.”
25. On 11 January 2023, which was the first day I returned from the Christmas/NY break, Helen and I conversed in person at the office to the effect that –
“Helen: The workers at the factory had come back to work very early. They hardly took any break. They made lots more columns and panels.
I: But there wasn’t any shop drawing for the columns or panels.
Helen: You should hurry and send out the drawings to the factory.
I: I can only send preliminary shop drawings. We don’t have planning permit or building permit.””[44]
In his written witness statement Mr Segman states that Ms Yu had cause to be concerned about Ms Zeng’s performance, and that she should not have passed information to the builder without approval from the practicing engineer.[45] His oral evidence included that while he was once formally connected with Conrock he had resigned in order to avoid conflicts of interest and is now a builder, and in particular the builder of the Truganina Project, although Ms Zeng put forward that he “is the owner and main decision maker of the business group” and that during her employment she “had regularly taken instructions from Sam without objection from Helen”.[46]
Mr Segman also stated that he is an engineer, but not practicing as such and that it is Ms Yu who should sign-off on drawings, etc.[47] He described his working relationship with Ms Zeng and Ms Yu in this way:
“Like I said she [Ms Zeng] coordinated. If I needed anything specific I rang Rong and I asked her and I got the answer. It was time that you Helen has told me when it come to design, when it come to approval talk to me, don't talk to Ron. She had a go at me at times that I should not really even ask those questions. Just rely on the fact that wait till I approve it before you really – yes, look, I'm on side this time but you really need things in a hurry. You need to think quickly. And – you know – you'll ring Rong and say, 'Look, can you give me drawing number such and such.' And she will give it to me. Can you give a bit more detail on a particular drawing there she will give it to me. But when it comes to design and responsibility because that's definitely Helen's responsibility.”[48]
Ms Zeng’s evidence was given somewhat matter of fact without great emotion, and largely avoiding contesting adverse propositions given to her by Ms Yu. The narrative of her employment and why she believes her dismissal to be unfair was clear and focussed.
Ms Yu’s demeanour was of a person severely wronged, both from the time Ms Zeng spent as an employee, and the fact of now facing an unfair dismissal action. However, her narrative lacked clarity and she struggled to clearly communicate Ms Zeng’s deficiencies and why they justified dismissal. It may be that my observation is a product of Ms Yu likely not being a speaker of English as a first language. In particular Ms Yu’s submissions, written and oral, lacked any sense of chronology as to when problems emerged with Ms Zeng or what Conrock did about them. In addition, many of her responses about what she had said to Ms Zeng or why her performance was lacking were very dogmatic to the point of hypercritical.
Overall, I consider that Ms Yu’s evidence was implausible in large parts. It is implausible in an engineering business as small as Conrock that Ms Yu as the responsible engineer never noticed that 180 sets of drawings had not come to her while the project progressed as expected and that 140 of them had already been produced at the date of dismissal. This and the above matters lead me to prefer Ms Zeng’s evidence to that of Ms Yu, noting that much of Ms Zeng’s factual narrative was not contested by Ms Yu who instead relied largely on the emotion that what she saw justified dismissal.
Mr Segman’s evidence was relatively short and low-key avoiding strong criticism of Ms Zeng. He was careful to distance his formal role from the day-to-day operations of Conrock or supervision of the engineering of the Truganina Project. Both endeavours though seem unlikely as Ms Zeng’s evidence show he is very involved. He is plainly not just a client or contractor on the Truganina Project. Why he seeks to downplay his involvement is unclear to me. Even so the manner in which Mr Segman gave his evidence as well as its content leads to the view both that he had some regard for Ms Zeng’s abilities and that he tried to be a peacemaker between her and Ms Yu after Ms Yu had announced Ms Zeng’s dismissal.
What emerges from the evidence are the critical points that engineering procedure, as described by Ms Zeng and not contradicted by Ms Yu, envisaged a checking engineer to be in position who checks the shop drawings, and that for whatever reason these procedures in Conrock devolved to a local practice in which Ms Zeng took on greater responsibility than might be expected for a professional of her experience. In particular:
There was no checking engineer after September 2021;
Ms Zeng was expected to prepare preliminary shop drawings without the benefit of architectural or structural drawings, with this continuing to at least until February 2023;
Ms Zeng was told by Ms Yu and Mr Segman to coordinate with drafters in China to prepare preliminary typical shop drawings of precast panels and columns;
Manufacturing was done on the basis of preliminary shop drawings;
Requests of Ms Zeng for work would be made of her not only by Ms Yu, but others, including Mr Segman.
Ms Yu’s submissions about why Ms Zeng came to be dismissed are constructed around the elements referred to in the termination email. Ms Zeng’s evidence though is that she was following local procedure as she had many times.
Exploration of the particular matter of the parapet with the roof edge beam referred to in Conrock’s termination of employment letter shows it as not the only reason for Ms Zeng’s termination, and not the deciding operative reason. While certainly the matter of the parapet has the problem of creating waste and further time pressures those alone should not have provoked the response it did. Instead, what likely precipitated Ms Zeng’s dismissal was that Ms Yu learned that the issuing of an unauthorised shop drawing for manufacture was not a one-off but was a matter of routine and thereby a source of embarrassment to her as the senior structural engineer, as well as that Ms Zeng accused her of unacceptable behaviour.
In considering Ms Yu’s evidence and the matters she highlighted there are two explaining factors which do not appear earlier than 10 May 2023: Ms Yu likely realised her professional exposure from the local procedures and that rectifying the consequential problem had the potential to create further cost and delay on the Truganina Project, with her giving this evidence about approval responsibilities in response to questions from me:
“Okay? So when I realise this, then account 100AD, shop drawing is issued to the factory.
When did you understand that? When did you first realise that? In 12 May.
Right? And then - - -
Before you dismissed her? Before. Before I writing that email.
Right? I don't know what sort of consequence or damage it could have be happened. So at the time of the day I stopped what they're prepared to issue. Then I say, 'Let me have a – let me have a look at it.' But at the time I'm very, very angry because I can know the consequence could happen because I'm building - the engineer since 1988. I didn't have any disaster happen to me. It's not I'm super smart. I'm not I'm super genius good. I just follow whatever professional ethic, and whatever industry procedure have so careful, protect my name and licence until now. I don't want – and my age, I'm 55 – until the building disaster happen.
Can I understand what Ms Zeng was doing wrong. You've explained to me that she was pushing back on everything and that was causing you anxiety, but you're also critical of her for not following correct procedure. And if I understand it correctly, the procedure you say she followed was to provide unauthorised shop drawings to the factory to be completed. Who was supposed to authorise them then?---She.
She, being? She is the coordinator. I'm the designer. When the finish is - - -
All right? You start drawing the design, she is a – she is not person to design anything. She just take things - - -
Ms Yu, can I just check, you're critical of Ms Zeng not authorising – sorry, I'll start that again. You're critical of Ms Zeng having sent shop drawings that were not authorised. Is that correct? Not be signature approved. Nobody approve the drawing issued for manufacture.
So who was supposed to authorise them? Okay. So you say 'authorised', I say 'approved'. She's supposed – yes.
Okay. So who was supposed to approve them? Architecture and the structure engineer. The structure engineer is me.”[49]
Ms Yu’s further evidence was that she only learned Ms Zeng had issued 180 unapproved precast element shop drawings to manufacture, of which 140 of those had been constructed, immediately before she dismissed Ms Zeng giving these answers to me:
“The question is whether you're criticising Ms Zeng for having issued 180 unapproved documents? Yes.
When did you find out there were 180? 12 May.
Before the dismissal? Before writing that email.
Did you know at that time it was 180? Yes, because we have a register.
Well, can I put it to you this way. There is about – there was an hour and three minutes between receiving Ms Zeng's email and dismissing her. 180 documents in an hour is a rather large number to locate and to verify they were unauthorised. Is that what you're saying to me? It is a – I understand what you mean. During the one hour, how you find out 180 shop drawings. That's it. Before I'm never involved shop drawing area, only for her. Then the two – the draftsperson, the Ling Fai and Qidong, they provide to me. They say up to now they have issued 180 shop drawings.
So your criticism is that Ms Zeng did not seek your approval for those documents; is that correct? Correct.”[50]
When I asked Ms Yu why she had not picked this situation up earlier, she had no cogent or persuasive answer, merely deflecting from the topic:
“Why didn't you pick it up earlier? Because I'm never imagine – do you know what happened in November '22? The company drawing – council don't know what we're doing, and what's the piece be designed for? Nothing. She just say – okay, she just do even worse. Not individual shop drawings. She just say, 'Typical common joint. Factory produced 2030,' just like that.”[51]
Ms Yu referred in the above evidence to having a register of drawings which enabled her to ascertain how many unauthorised shop drawings had been issued by Ms Zeng. The register is not in evidence before me.
It is apparent from Ms Yu’s evidence that there was no investigation of Ms Zeng’s conduct between the time of Ms Yu’s first email at 11:04AM and Ms Zeng’s dismissal at 1:53PM. No allegations were put to Ms Zeng. For the purposes of clarity, I do not consider the first email from Ms Yu to be capable of being viewed as allegations of conduct that may lead to disciplinary action: at best it may be described as an enquiry. Scrutiny of the drawings register is also not capable of being viewed as an investigation.
The scale of the unauthorised shop drawings and Ms Yu’s statement that she did not know about them is confounding. It is likely that she either knew of the practice and turned a blind eye to it or that she did not know of the practice when she should have, being the senior professional and the person responsible for authorising the drawings. If it was the latter, then her culpability is large and significant since it would be an admission that she had in effect lost track of the professional works for which she was responsible.
Over a period of more than 7 or 8 months up to 180 drawings had been issued and the depicted elements manufactured for at least 140 of them, with 24 panels being incorrect. How Ms Yu did not connect the obvious fact of the Truganina Project being constructed and rising from the ground as planned with the fact that she had not been asked to approve all the possible drawings defies all logic. The fact that Ms Yu has not provided a credible response for why she had not become alert to the problem at an earlier time to 12 May 2023 leads me not to accept any of her evidence on the matter of the unauthorised shop drawings; when she first learned of the problem or why the problem was so unacceptable.
In finality it is unnecessary to resolve which of these alternatives (or other possibilities) the situation was. This is because the evidence amply shows that Ms Zeng was following what she understood local procedures to be.
The initial enquiry made by Ms Yu that led to Ms Zeng’s dismissal, related to the dimensions of the parapet beam was plainly superseded as the point of concern in Ms Yu’s mind with the concerns she held over the unauthorised shop drawings. The latter concern then collided with Ms Zeng’s accusation of “unacceptable behaviours” with the two crystallising in Ms Yu’s mind as misconduct and grounds for dismissal.
When her employment commenced Ms Zeng was provided by Conrock with a letter of offer dated 5 June 2016 which serves as a contract of employment. In relation to termination of employment the letter provides the following:
“7. Termination of employment
7.1 During the probation time, company / employee is required to give 1 week notice if employer or employee to terminate employment contract.
7.2 If employee will be successful to pass probation period time, It is required 4 week written notice to termination.
7 .3 This position required employer to provide employee extensive training, education and supervision, etc, this require employee of service to commit at least 36 months (including 6 month probationary period). If the contract to be terminated, it should be:
- Employer to give 4 weeks notices, if because employee misconducted to cause consequences of projects/employer. Employer has rights to claim any damage or losses.
- Employer to give 4 weeks notices, if because of employer reasons, employer will make redundancy termination package payment to employee.
- Employee to give 4 weeks notices, if because of employee's any personal reasons, employee should pay part of the cost of training, approximately $10,000”.[52]
Ms Yu relies on the above provisions and especially that referring to misconduct negatively impacting the company’s projects as the basis of Ms Zeng’s dismissal. In her written submissions Ms Yu terms Ms Zeng’s actions as misconduct. That contention though is not made out in the evidence for the reasons explained. I have not found that Ms Zeng’s conduct amounted to misconduct as she was following what she understood to be Conrock’s expected procedures, consistent with established local practice and sanctioned by Ms Yu and Mr Segman. The contention that Ms Zeng’s conduct negatively impacted its projects is then not made out as her actions were not beyond expected bounds.
It follows from the foregoing that I am not satisfied Conrock had a valid reason for Ms Zeng’s dismissal. Such reasons as it held were not sound, defensible, or well-founded. Consistent with my findings about the evidence, there was likely no problem of substance in Ms Yu’s mind about Ms Zeng until 12 May 203 at 11:04AM, with her being dismissed just under 3 hours later at 1:53PM. The problems Ms Yu identified were likely matters that she should have had control over at an earlier time, with blame being unfairly pinned onto Ms Zeng.
(b) whether the person was notified of that reason
Ms Zeng was notified of her dismissal by email from Ms Yu on Friday, 12 May 2023.
As I am not satisfied that there was a valid reason for Ms Zeng’s dismissal, consideration of this criterion has no application toward my decision.[53]
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for dismissal there needs to be a finding that there is a valid reason for dismissal.[54] I have not found there was a valid reason for Ms Zeng’s dismissal.
Ms Yu argues that she gave Ms Zeng an opportunity to respond to the concerns Conrock held about her performance, providing these submissions on the subject:
“Yes, on 12 May 2023 11am, I sent an email to applicant as well as a drafter (Gui Zhang), asking why the shop drawings didn’t align with structural drawings. There were precast elements which had neither been designed to and nor appeared in the structural drawings. I then realised the applicant prepared to issue them to manufacture. Her response email said I didn’t understand the shop drawings, and she will give me a formal response regarding my raised question was unacceptable behaviour.”[55]
Ms Zeng responded to Ms Yu at 12:49PM rejecting the criticism of her.
While noting these matters, the absence of a valid reason for dismissal leaves this a neutral consideration in my determination of unfairness.
(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
At no stage did Ms Zeng request a support person to assist her in any discussions with her employer and so consideration of this criterion is a neutral factor in my decision.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
Ms Yu argues she provided Ms Zeng with multiple verbal warnings about her performance, the details of which are referred to above.
Ms Zeng contests that what was discussed on 10 May 2023 amounted to any warning about unsatisfactory performance.
For the Commission to be satisfied a person has been warned about their unsatisfactory performance before dismissal it is necessary for what is communicated to identify the relevant aspect of the employee's performance which is of concern to the employer; and to make it clear that the employee's employment is at risk unless the performance issue identified is addressed. In respect of the communication that continued employment may be at risk a mere exhortation for the employee to improve his or her performance is not sufficient.[56]
I am satisfied from the evidence that there were no warnings of substance from Ms Yu to Ms Zeng about unsatisfactory performance and nothing which suggests it was communicated to Ms Zeng that her future employment was in jeopardy if there was no change of an indicated type. In context the best Ms Yu’s evidence presents is the contention that on 10 May 2023 she pointed out that Ms Zeng’s actions were not professional and to not do it again. Ms Zeng denies that Ms Yu said even these things to her or that she even commented to Ms Zeng that she had been issuing unapproved shop drawings.[57]
If I were to accept Ms Yu’s evidence on the subject of the 10 May discussion it would only show that Ms Yu put forward criticisms of Ms Zeng’s performance and that she never expressed the view to Ms Zeng that her continued employment was at risk unless her performance improved. The defects in Ms Yu’s overall evidence to which I have already referred cause me to find that it was unlikely that Ms Yu actually said to Ms Zeng that she had been unprofessional, specifying the conduct about which she was concerned and then instruct that Ms Zeng not repeat the conduct.
The conversation to which Ms Yu refers took place on 10 May 2023, two days before the date on which Ms Zeng was dismissed. There is no evidence that the events on 12 May 2023 which Ms Yu relies upon as founding a dismissal for misconduct have any connection with what she puts forward as a warning. That is, there is no evidence to show that the drawings she complains about were sent to the builder by Ms Zeng after being told not to repeat the conduct.
I am not satisfied that a warning of any type was ever put to Ms Zeng.
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
Conrock is a small business employer, but one that nonetheless is engaging in construction worth millions of dollars. While apparently sufficiently sophisticated to obtain and complete such projects the procedures it took relating to Ms Zeng’s dismissal were not informed by capable advice.
There is though no direct evidence before me on the subject of whether Conrock’s size likely impacted on the procedures it followed in effecting the dismissal. Accordingly, this is a neutral consideration in my determination of whether Ms Zeng’s dismissal was an unfair dismissal.
(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
There is no direct evidence before me about the availability to Conrock of human resource management specialists or expertise. Accordingly, this too is a neutral consideration in my determination of whether Ms Zeng’s dismissal was an unfair dismissal.
(h) any other matters that the FWC considers relevant
I do not find there were any other matters of relevance requiring consideration.
CONCLUSION
Conclusion on the s.387 criteria
After considering each of the criteria within s.387, I am not satisfied there was a valid reason for Conrock’s dismissal of Ms Zeng. I am also of the view that her dismissal was procedurally unfair since she was never warned about the need to follow certain procedures or what the consequences would be if she did not follow them. Accordingly, I find that Ms Zeng’s dismissal was an unfair dismissal.
The Act requires the Commission to consider whether a dismissal was harsh, unjust or unreasonable by taking into account the matters at ss.387 (a) to (h). The meaning of the term “harsh, unjust or unreasonable” was considered by the High Court in the matter of Byrne and Frew v Australian Airlines Limited:
“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.”[58]
It has been further held that a dismissal may be unjust, because the employee was not guilty of the misconduct on which the employer acted; unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct.[59]
I find that Ms Zeng’s dismissal was harsh, unjust and unreasonable. It was unjust since Ms Zeng’s conduct could not reasonably be described as misconduct on her part. Her dismissal was also unreasonable because the inference of misconduct on Ms Zeng’s part could not be reasonably drawn. The dismissal was harsh because dismissal was a penalty that greatly exceeded what reasonably should be done for the circumstances established by Ms Yu.
REMEDY
The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are set out in ss.390 – 393.
Pursuant to sub-s.390(3) an order for the payment of compensation to a person must not be made unless the Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”
Ms Zeng does not seek reinstatement from her application. Conrock also argue against reinstatement for several reasons largely restating the grounds for its dismissal of Ms Zeng; including that she has caused Conrock significant damage and financial loss and that her conduct was contrary to professional ethics and that in the course of providing evidence to the Commission she has disclosed privileged information.[60]
I agree after listening to each give evidence and provide submissions that in this case reinstatement would be inappropriate. The Respondent is a small business employer in which trust of each other would be highly important, with the absence of that trust leaning against a proposition that reinstatement should be actively considered.
Compensation – what must be taken into account in determining an amount?
Having determined that reinstatement is inappropriate compensation may only be ordered if the Commission considers an order for payment of compensation is appropriate in the circumstances of the case (s.390(3)(b)). That is, an order for compensation is not automatic if reinstatement is found to be inappropriate and is instead a discretion to be exercised subject to certain further consideration. In this regard s.392(2) of the 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.”
I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
There is no evidence before me about the effect of an order for compensation on the viability of the employer’s enterprise.
Length of the Applicant’s service
Ms Zeng’s length of service with Conrock was of moderate length having commenced on 9 May 2016. At the date of effect of her dismissal, 9 June 2023, she had worked for Conrock for marginally more than 7 years. Since late March/early April 2023 she had worked part-time, 3 days a week.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
Assessment of the remuneration an applicant would have received had it not been for their dismissal is both an essential and difficult task.
As stated by a majority of the Full Court of the Federal Court, “[i]n 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.”[61]
I am satisfied that had Ms Zeng been properly warned of the things about which Ms Yu complained that she would have probably heeded the warning and not repeated the conduct. The matters of concern to Ms Yu were procedural, and not behavioural. That is, she wanted Ms Zeng to send the documents for approval before forwarding them to the builder. The evidence before me leads to the view that had such an instruction been given that Ms Zeng would likely have heeded it. That observation has me leaning toward a longer than shorter anticipated period of employment.
On the other hand, the demeanour of both Ms Yu and Ms Zeng in these proceedings would suggest that Ms Zeng would be unlikely to see Conrock as a long-term employer after being issued with a warning. In her email to Ms Yu on 12 May 2023 Ms Zeng referred to giving Ms Yu a formal response on the following Monday about her “unacceptable behaviours”. Aside from the likelihood that the intemperate comment directly doomed her future in Ms Yu’s eyes it reveals something of Ms Zeng’s views about Ms Yu at that time. Given those views there is little likelihood that Ms Zeng proposed to keep working for Conrock. While the two tolerated working with each other for the duration of a four week notice period Ms Zeng would likely have been actively looking for alternative employment had she not been dismissed.
Conrock point to advertising it commenced in April for a full-time structural engineer as being an indication that Ms Zeng may not have been employed beyond the end of June, putting forward the following in its Employer Response Form (the Form F3):
“3. On 1 April 2023, the applicant and I had a conversation regarding her position where it was explained that she was needed as a full-time staff for the current project. Additionally, the company only had the budget for one full-time position - which the applicant had previously occupied. The applicant said she could not work full-time while helping the family business. In response to this, a verbal agreement was made where the applicant would work part-time until at the end of the financial year Year 2023 before leaving the company. In the meantime, Conrock would place advertisements seeking for a new engineer. …
4. Conrock put advertisements on Seek website for a full-time structural engineer from 3rd April for 4 weeks. I spend a lot of time to review 68 applicants' CVs and conducted interviews, which was with applicant knowledge.
5. Conrock didn't have any arrangement with the applicant to permanently work part-time. interviews, which was with applicant knowledge.”[62]
I take this to be a submission on Conrock’s part that it had already been agreed with Ms Zeng, prior to 12 May 2023, that her employment was going to end on 30 June 2023. Ms Zeng accepts this broad construct saying about remedy in the event of a finding of unfair dismissal that:
“If I had not been dismissed, I would continue to work for the Respondent until 30 June 2023, and would be entitled to 16 weeks’ redundancy pay.”[63]
I accept that the characterisation of Ms Zeng’s job ending for reason of redundancy may well have been used between the parties there is insufficient evidence before me that would support a finding that Ms Zeng’s job ending on 30 June 2023 was because Conrock no longer required her job to be done by anyone. To the contrary it had advertised for a replacement employee, albeit to work full-time. In the context of the evidence before me Ms Zeng’s “job” was not the time-limited part-time position in which she worked from late March/early April 2023, but the full-time structural engineer role. In assessing compensation I do not find there is a need to take into account a component for redundancy pay, as none would have been due had Ms Zeng’s employment continued to 30 June 2023.
Subject to the levelling up consideration required of me in application of the Sprigg principles, I am constrained by the agreed end-date of Ms Zeng’s employment and am only able to find that the anticipated period of employment was the period between 9 June 2023 and 30 June 2023 (that is, a period of 15 working days).
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.[64] What is reasonable depends on the circumstances of the case.[65]
Ms Zeng is plainly devastated by her dismissal which has impacted her motivation to obtain further employment. Between the time of her dismissal and the determinative conference Ms Zeng had not actively sought other employment, with one exception, having lost the confidence to do so given that she will need to disclose the circumstances in which she came to leave Conrock.[66] The exception is that she undertook 13.6 hours of contracting work for a friend, which earned her $2,040.
Despite being emotionally impacted by her dismissal as an applicant to this Commission, Ms Zeng has an obligation to seek alternative employment in order to mitigate her losses having been dismissed from Conrock. In the circumstances of the very short anticipated period of employment I do not make any deduction in relation to efforts to obtain further employment.
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
Ms Zeng was dismissed on notice, working for four weeks after being dismissed. Since leaving Conrock and to the date of the determinative conference she had earned $2,040 for a short period of contracting work with a friend. In the circumstances of the very short anticipated period of employment I do not make any deduction in relation post-termination remuneration.
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
There is no evidence that would suggest Ms Zeng is likely to earn any income in the period between making the order for compensation and the actual compensation.
Other relevant matters
I do not consider there are any other relevant matters that required being taken into account in setting the amount of compensation other than to follow the Commission’s usual practice in its calculation.
Compensation – how is the amount to be calculated?
The well-established approach to the assessment of compensation in unfair dismissal matters 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).[67] The approach and Sprigg reasoning has been confirmed several times in Full Bench decisions, and most recently in ERGT Australia Pty Ltd v Kevin Govender.[68]
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
At the time of her dismissal Ms Zeng earned a salary of $80,000 per year and a $4,800 car and mobile allowance per year, a total of $84,800, with statutory superannuation paid in addition.[69] I have estimated the remuneration Ms Zeng would have received, or would have been likely to have received, if Conrock had not terminated her to be $2,934 on the basis of my finding that she would likely have remained in employment for a further period of 3 weeks.
Added to that amount is $308 being the amount of statutory superannuation contributions Ms Zeng would have received for the anticipated period of employment (on the basis of 10.5% being the applicable rate before 1 July 2023).
This calculation is based on Ms Zeng working part-time at the time of dismissal for three days per week, or 60% EFT. Conrock dispute that the part-time arrangement would have continued after the end of the financial year, however I have based the calculation of future earnings on an expectation it continue, or at least continue to the end of the anticipated period of employment.
Step 2
The second step in Sprigg requires the deduction of moneys earned since termination, with the only exclusions being moneys received from other sources and unrelated to work done. Ms Zeng earned $2,040 from contracting work after being dismissed, however I make no deduction of this amount for two reasons: I do not have evidence as to the dates over which it was earned and do not rule out that all or much of it was earned after 30 June 2023; and I consider it appropriate to make no deduction as part of the levelling process in respect of compensation referred to below.
Step 3
It is necessary to consider the impact of both favourable and unfavourable contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment,[70] noting that it may not be appropriate to deduct contingencies if all of the projected period of continued employment has passed.[71] In Ms Zeng’s case, I find there are none that ought to be taken into account in this matter, since the whole of the anticipated period of employment has passed.
Step 4
I have considered the impact of taxation but have elected to settle a gross amount as set out in the table below and the compensation to be ordered will be subject to taxation according to law.
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.”[72]
I am satisfied that the compensation to be ordered by me is proportionate to the circumstances of the case. In this regard I consider the total quantum to be appropriate, with no deductions either for efforts to obtain further employment, or post-termination earnings.
Compensation – is the amount to be reduced on account of misconduct?
If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
In determining the amount by which it is appropriate to reduce an order for compensation on account of misconduct, the Commission must consider, amongst other things, whether the Applicant engaged in misconduct and, if so, whether that misconduct contributed to the Respondent’s decision to dismiss the person. A Full Bench of the Commission has observed that, “[t]he section seems to require such consideration even if the FWC has found there was no valid reason for the person's dismissal.”[73] However, the Full Bench goes on to say that, “if there was no valid reason for the dismissal we think that may be relevant to the FWC's decision as to the ‘appropriate’ amount by which to reduce the amount of compensation the FWC would otherwise order.”[74]
I am not satisfied in this case that a deduction must be made in these circumstances as I have not found misconduct on Ms Zeng’s part.
My calculation of the amount payable to Ms Zeng is set out in the following table:
| 1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated, | 3 weeks projected lost income at the rate of $1,630.77 per week ($84,800 per year), with the amount reduced to 60% to take account of Ms Zeng’s 3 day per week part-time arrangement. | $2,934 |
| Employer superannuation contribution – 10.5% (as applicable before 1 July 2023) | + $308 | |
| Subtotal | $3,242 | |
| Deduction attributable to mitigation efforts | $0 | |
| Deduction for misconduct | $0 | |
| 2. Deduct monies earned since termination, | $0 | |
| 3. Deductions for contingencies, | $0 | |
| TOTAL | $3,242 | |
| 4. Calculate any impact of taxation, | To be taxed according to law | |
| 5. Apply the legislative cap. | Does not exceed the compensation cap. |
An order for compensation consistent with the above table will be issued by me at the same time as this decision. The order will require a payment of wages in the amount of $2,934 to be taxed according to law and of superannuation in the amount of $308 to be paid into Ms Zeng’s nominated superannuation fund (a total of $3,242), each to be paid within 14 days of the date of this decision.
Ms Zeng’s application is determined accordingly.
COMMISSIONER
Appearances:
Ms Q. Zeng of herself
Ms H. Yu for the Respondent
Hearing details:
Melbourne;
28 September;
2023.
[1] Witness Statement of Qinbai Zeng, Annexure 1, filed 28 August 2023, appearing at Digital Court Book, p.34.
[2] Attachment to Form F2, Unfair Dismissal Application – Points of Claim, filed 29 June 2023, appearing at Digital Court Book, p.20.
[3] Applicant Points of Claim, filed 28 August 2023, appearing at Digital Court Book, p.20.
[4] Form F3, Employer Response Form, filed 12 July 2023, item 2.2, appearing at Digital Court Book, p.84.
[5] Ibid.
[6] Attachment to Form F2, Unfair Dismissal Application – Points of Claim, filed 29 June 2023, appearing at Digital Court Book, p.21.
[7] Witness Statement of Qinbai Zeng, filed 28 August 2023, appearing at Digital Court Book, p.27.
[8] Ibid, appearing at Digital Court Book, p.26.
[9] Ibid, appearing at Digital Court Book, p.27.
[10] Form F3, Employer Response Form, filed 12 July 2023, item 1.1, appearing at Digital Court Book, p.81.
[11] Ibid, item 1.1, appearing at Digital Court Book, p.84.
[12] Ibid, item 3.1, appearing at Digital Court Book, p.86.
[13] Ibid, item 1.1, appearing at Digital Court Book, p.85.
[14] Applicant Points of Claim, filed 28 August 2023, [8]-[9], appearing at Digital Court Book, p.20.
[15] Ibid, [17], appearing at Digital Court Book, p.21.
[16] Witness Statement of Qinbai Zeng, filed 28 August 2023, [28(c)], appearing at Digital Court Book, p.30.
[17] Titan Plant Hire Pty Ltd v Shaun Van Malsen[2016] FWCFB 5520.
[18] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
[19] Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561 at [6] - [7].
[20] Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [32]; Annetta v Ansett Australia (2000) 98 IR 233 at [9] - [10].
[21] Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [32]; He v Lewin [2004] FCAFC 161; (2004) 137 FCR 266 at [15].
[22] Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [33]-[34]; O'Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205 at [22] - [23].
[23] Selvachandran v Peteron Plastics (1995) 62 IR 371, 373.
[24] Robe v Burwood Mitsubishi Print R4471 (AIRCFB, Ross VP, Polites SDP, Foggo C, 11 May 1999).
[25] Miller v UNSW [2003] FCAFC 180 (Gray J), [13].
[26] Selvachandran v Peteron Plastics (1995) 62 IR 371, 373.
[27] Commonwealth of Australia (Australian Taxation Office) t/a Australian Taxation Office v Shamir[2016] FWCFB 4185, [46] citing Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
[28] Commonwealth of Australia (Australian Taxation Office) t/a Australian Taxation Office v Shamir[2016] FWCFB 4185, [46] citing Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410, 413.
[29] Respondent Document Bundle, filed 11 September 2023, appearing at Digital Court Book, p.137.
[30] Ibid.
[31] Witness Statement of Qinbai Zeng, filed 28 August 2023, appearing at Digital Court Book, p.31.
[32] Respondent Document Bundle, filed 11 September 2023, appearing at Digital Court Book, 136.
[33] Form F3, Employer Response Form, filed 12 July 2023, appearing at Digital Court Book, pp.86 – 87.
[34] Witness Statement of Qinbai Zeng, filed 28 August 2023, [8]; appearing at Digital Court Book, p.27.
[35] Attachment to Form F2, Unfair Dismissal Application – Points of Claim, filed 29 June 2023, [9] – [11].
[36] Witness Statement of Qinbai Zeng, filed 28 August 2023, appearing at Digital Court Book, pp.26 – 27.
[37] Ibid, [9], appearing at Digital Court Book, p.27.
[38] Respondent Outline of Argument, filed 11 September 2023, appearing at Digital Court Book, p.119.
[39] Ibid, appearing at Digital Court Book, p.121.
[40] Transcript, PN 44 – 50.
[41] Witness Statement of Qinbai Zeng, filed 28 August 2023, appearing at Digital Court Book, p.16.
[42] Transcript, PN 388.
[43] Ibid, PN 377 – 379.
[44] Witness Statement of Qinbai Zeng, filed 28 August 2023, appearing at Digital Court Book, p.29.
[45] Exhibit R1, Witness Statement of Sam Segman, filed 11 September 2023.
[46] Witness Statement of Qinbai Zeng, filed 28 August 2023, [7]; appearing at Digital Court Book, p.15.
[47] Transcript, PN 339 – 340.
[48] Ibid, PN 351.
[49] Ibid, PN 201 – 211.
[50] Ibid, PN 219 – 224.
[51] Ibid, PN 228.
[52] Attachment 1 to Form F3, Employer Response Form, filed 12 July 2023, appearing at Digital Court Book, p.91.
[53] Chubb Security Australia Pty Ltd v Thomas Print S2679 (unreported AIRCFB, [41]; Read v Cordon Square Child Care Centre[2013] FWCFB 762, [46]-[49].
[54] Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].
[55] Respondent Outline of Argument, filed 11 September 2023, appearing at Digital Court Book, p.113.
[56] Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000) at para. 43 - 44.
[57] Transcript, PN 47 – 50.
[58] [1995] HCA 24 (McHugh and Gummow JJ), [128].
[59] Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1,10 citing Byrne v Australian Airlines Ltd [1995] HCA 24 (McHugh and Gummow JJ), [128].
[60] Respondent Outline of Argument, filed 11 September 2023, appearing at Digital Court Book, p.125.
[61] He v Lewin [2004] FCAFC 161, [58].
[62] Form F3, Employer Response Form, filed 12 July 2023, item 2.2, appearing at Digital Court Book, p.84.
[63] Attachment to Form F2, Unfair Dismissal Application – Points of Claim, filed 29 June 2023, appearing at Digital Court Book, p.21.
[64] 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].
[65] 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.
[66] Transcript, PN 96 – 97.
[67] (1998) 88 IR 21.
[68] [2021] FWCFB 5389, [35].
[69] Form F3, Employer Response Form, filed 12 July 2023, item 1.6; appearing at Digital Court Book, p.82.
[70] Enhance Systems Pty Ltd v Cox[2001] AIRC 1138, [39]
[71] Bowden v Ottrey Homes[2013] FWCFB 431, [54].
[72] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
[73] Read v Gordon Square Child Care Centre Inc [2013] FWCFB 762, [83].
[74] Ibid.
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