Rebecca Lill v Australian Pilot Training Alliance Pty Ltd (In Liquidation)

[2022] FWC 3323

[2022] FWC 3323

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Rebecca Lill
v

Australian Pilot Training Alliance Pty Ltd (In Liquidation)

(U2022/7928)

COMMISSIONER MCKINNON SYDNEY, 19 DECEMBER 2022

Application for an unfair dismissal remedy

1. A tussle for control of the Australian Pilot Training Alliance Pty Ltd (APTA) between two families, the Sada’s and the Qushair’s, saw Ms Rebecca Lill briefly promoted to the role of Chief Executive Officer (CEO) and then dismissed less than four months later.[1]  The events leading to dismissal are set out in my earlier decision and I do not repeat them.

1. On 29 July 2022, Ms Lill applied in time for a remedy for unfair dismissal under section 394 of the Fair Work Act 2009 (Act).[2] The question is whether Ms Lill was unfairly dismissed by APTA.

1. I have decided that Ms Lill was unfairly dismissed, and these are my reasons.

Relevant law

1. Under section 382 of the Fair Work Act 2009 (the Act), a person is protected from unfair dismissal if, at the relevant time:

·They have completed at least the minimum employment period; and

·They are either covered by a modern award, employed under an enterprise agreement that applies to them or earn an annual income of less than the “high income threshold”.

1. Ms Lill’s period of employment with APTA was longer than the minimum employment period and her annual remuneration was $130,000, which is less than the applicable high income threshold. Ms Lill is protected from unfair dismissal.

1. Under section 385 of the Act, a person has been unfairly dismissed if the Commission is satisfied that they have been dismissed; that the dismissal was harsh, unjust or unreasonable; that the dismissal was not consistent with the Small Business Fair Dismissal Code and that it was not a case of genuine redundancy.[3]

1. Ms Lill’s employment was not terminated for reasons of redundancy. She was replaced in the role of CEO by APTA’s former CEO, Mr Naser Qushair. The dismissal was not a case of genuine redundancy.

1. At the time of dismissal, APTA employed less than 15 employees. The first question is whether the dismissal was consistent with the Small Business Fair Dismissal Code (the Code).[4]

1. If the dismissal was not consistent with the Code, a second question arises: was the dismissal harsh, unjust or unreasonable?

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

1. On 8 July 2022, the reason given to Ms Lill for dismissal was that APTA’s former CEO, Mr Naser Qushair, had been reinstated to the role. Reference was also made to her earlier stand down on 3 March 2022 for an alleged contractual breach. The reason for dismissal was stated in this way:

“As I have been reinstated as the sole director of APTA, this letter is to inform you that I have reinstated Naser Qushair as the CEO of the Australian Pilot Training Alliance.  The directions that were sent to you on March 3rd, 2022, from Naser Qushair, confirming that you had been stood down, are still relevant and active.”

1. The earlier directions of 3 March 2022 were contained in two successive text messages from Mr Qushair to Ms Lill, as follows:

“I got an evidence that you removed me from my account and that is a legal breach of your employment”

“You are suspended as GM until further notice, you can’t take directions from unauthorised persons”

1. Plainly, the directions issued to Ms Lill on 3 March 2022 were not still “relevant and active” in relation to Ms Lill, despite APTA’s assertion. By the time there were given purported effect, Ms Lill had been dismissed. She cannot have been simultaneously suspended, either from the role of CEO (which had been filled) or her previous role of General Manager (which she no longer held).

1. The Code is in the following terms:

“Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

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.”

1. The ‘summary dismissal’ section of the Code applies to the dismissal of Ms Lill because it occurred without prior notice to Ms Lill.[5] Under the Code, it will have been fair for APTA to dismiss Ms Lill without notice or warning if APTA believed on reasonable grounds that her conduct was sufficiently serious to justify immediate dismissal. It is not necessary to determine whether the alleged serious misconduct in fact occurred or that APTA (through its relevant officers) were correct in the beliefs held.[6]

1. There is no doubt that APTA (through its newly reinstated CEO, Mr Qushair) believed that Ms Lill had engaged in misconduct. He saw her as an active participant in his effective ousting from the role of CEO, siding with the Sada’s in defiance of an instruction to only take directions from Mr Qushair.

1. On 8 July 2022, Mr Qushair cannot have held this belief on reasonable grounds. In the immediately preceding 3 months, Mr Qushair had not had access to the systems or records of APTA. He did not have the information he needed to properly form a basis for his beliefs, which were at that time suspicions only. If Mr Qushair did hold evidence on or prior to 3 March 2022 of Ms Lill removing his access to email accounts while he was CEO, it has not been produced. Instead, it appears that the access change was confirmed by a “MS 365 audit” in July 2022 (which must have been after 8 July 2022) once Mr Qushair was reinstated to the CEO role and once again had access to its systems and records.

1. On 14 July 2022, after Ms Lill was dismissed, APTA sent Ms Lill a “Formal Notice of Investigation, notifying that it had identified her involvement in “illegal misconduct and violations of the company processes and procedures since March 2022”.

1. Then on 1 August 2022, Mr Qushair asked Ms Lill “to make herself available for [a] pending internal investigation” for the purpose of giving the company “a clear indication” of her employment status and “previous activity”.

1. Ms Lill was not bound to participate in an investigation into her conduct by APTA or to comply with its requests in this regard, because she was no longer an employee. What the timing of these requests shows is that APTA was at the beginning of a fact finding process in relation to Ms Lill’s alleged misconduct, rather than at its end (or even in the middle).

1. It may be that information has since come to light that would not reflect favourably on Ms Lill in relation to her employment with APTA. A sworn affidavit in a separate court proceeding about the extent of APTA’s knowledge of that case appears to be at least carefully worded. However, and for the purposes of the Code, the time at which the relevant belief must be held is at or prior to the time when the decision to dismiss is made.

1. To the extent that it is necessary to consider “other dismissals” under the Code, I would not find the dismissal to have been consistent with the Code.[7] The dismissal occurred without notice, late at night. While Ms Lill is likely to have anticipated that her ongoing employment was at risk when the Qushair’s resumed control of APTA, it was not (until the dismissal) because of any notice to her from APTA. Ms Lill was not given an opportunity to respond to APTA’s concerns before she was dismissed.

1. I find that the dismissal was not consistent with the Code.

Was the dismissal harsh, unjust or unreasonable?

1. Whether a dismissal was harsh, unjust or unreasonable depends on an assessment of all the relevant facts and circumstances, including those set out in section 387 of the Act. Those are considered in turn.

Was there a valid reason for the dismissal related to capacity or conduct, and was it notified to Ms Lill?

1. The reason for dismissal was that Mr Qushair had been reinstated to the role of CEO. A decision by the owner of a business to appoint a particular person to the role of CEO might be a valid reason for the dismissal of the outgoing CEO. However, in this case, it was not a valid reason for dismissal relating to Ms Lill’s capacity or conduct. It was instead about the Qushair’s resumption of control of the business.

1. It was separately alleged that Ms Lill had breached her employment contract on 3 March 2022 by removing Mr Qushair’s APTA email access. The evidence establishes that on 3 March 2022, Ms Lill disabled the email address used by Mr Qushair at the time: [email protected]. It does not establish whether this conduct was in breach of Ms Lill’s contract of employment, for example, because it was unauthorised. Although plainly not authorised by Mr Qushair, there is some suggestion in the materials that the action was instead authorised by Mrs Zebaida Sada, who was then sole Director and Secretary of APTA.

1. For these reasons, I find no valid reason for dismissal relating to Ms Lill’s capacity or conduct. As there was no valid reason for dismissal, a valid reason cannot have been notified to Ms Lill.

Was there an opportunity to respond to any capacity or conduct related reason?

1. The reasons for dismissal did not relate to the capacity or conduct of Ms Lill. Accordingly, Ms Lill was not given an opportunity to respond to reasons of this kind.

Was there any unreasonable refusal to allow a support person to be present to assist at any discussions relating to dismissal?

1. There was no unreasonable refusal to allow Ms Lill to have a support person assist in discussions about the dismissal, and nor were there any such discussions.

Was Ms Lill warned about relevant unsatisfactory performance?

1. I am not persuaded that this is a relevant consideration. To the extent that Ms Lill’s dismissal was related to her unsatisfactory performance, there was no warning of it, except the text messages on 3 March 2022 extracted above accompanying her being stood down from the General Manager role. This conduct preceded her promotion to the role of CEO and was arguably waived by APTA. In any event. It was a concern about misconduct rather than unsatisfactory performance in the role. Concerns of that nature arose only after Ms Lill had been dismissed.

Degree to which the size of the employer’s business and any absence of dedicated human resources management specialists or expertise in the business would be likely to impact on procedures followed in effecting the dismissal

1. APTA (which is now in liquidation) was a small business at the time of dismissal. It did not have substantial human resources or other specialist expertise in relation to termination of employment, which is apparent from its interchangeable use of the terms “suspension” and “termination” and its lack of knowledge about the status of Ms Lill’s employment in the period from 3 March 2022 to 8 July 2022. These matters are likely to have contributed to the haste with which decisions were made in relation to Ms Lill’s ongoing employment, although in my view, it was emotion rather than lack of resources that primarily influenced the process of dismissal.

Other relevant matters

1. Ms Lill was not paid her entitlements on termination, including entitlements that were required to be paid in accordance with the National Employment Standards.

Conclusion on the merits

1. The dismissal occurred without valid reason or any opportunity to respond to any concerns APTA may have held before the decision to dismiss was made. Ms Lill was effectively caught in the middle of a contest between two families for control of the business. This occurred in the context of a small business allocating only limited resources to workplace relations matters and allowing emotions to rule the day.

1. The dismissal of Ms Lill was unjust because it involved a failure to give notice of termination or payment in lieu of notice. It was also unreasonable because it lacked procedural fairness. I find that Ms Lill was unfairly dismissed.

Compensation

1. Reinstatement is not an appropriate remedy in this case, including because APTA is in liquidation. Compensation is the appropriate remedy in relation to the dismissal of Ms Lill.

1. Section 392(2) of the Act deals with how compensation is to be assessed in connection with an unfair dismissal. The established methodology is elaborated on in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden).[8] I respectfully adopt and apply the approach set out in that decision.

Viability (s.392(2)(a))

1. It is likely that APTA’s financial position is not strong given that it is now in liquidation. An order to pay Ms Lill compensation will further burden its ledger. That must be weighed against the protection of Ms Lill from unfair dismissal. The amount of compensation will not be reduced on this account.

Remuneration Ms Lill would have received, or would have been likely to receive, if she had not been dismissed (s.392(2)(c))

1. I consider it likely that Ms Lill would have remained in employment with APTA for a further four weeks had she not been dismissed on 8 July 2022. With the reinstatement of Mr Qushair to the position of CEO, it was only a matter of time before Ms Lill was dismissed. Had this occurred in the normal way, Ms Lill would have been entitled to two weeks’ notice of termination. I allow a further two‑week period for APTA to finalise the investigation it should have undertaken into Ms Lill’s conduct from March to July 2022 before deciding whether to dismiss her.

1. Ms Lill’s average weekly earnings were $2,500.00 gross per week. On that basis, Ms Lill would have earned $10,000.00 gross in the anticipated four‑week period after dismissal.

Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))

1. Ms Lill was not paid in lieu of notice of termination and there is no evidence that she earned any other income in the two weeks that followed her dismissal. No adjustment of the compensation amount is required on this basis.

Length of service (s.392(2)(b))

1. Ms Lill had less than 2 years’ service with APTA. No adjustment is made in relation to the assessment of compensation on this account.

Mitigation efforts (s.392(2)(d))

1. There is no evidence of any efforts made by Ms Lill to mitigate her loss, other than by seeking to engage with APTA in relation to the dismissal and monies owed. The compensation amount is adjusted by 10% on this basis (reduced by $1,000).

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

1. No adjustment of the amount of compensation is made for contingencies given the short (four-week) anticipated period of further employment.

Misconduct (s.392(3))

1. I have not found misconduct to have been a contributing factor to the dismissal. No reduction in the amount of compensation is appropriate under section 392 of the Act.

Shock, Distress (s.392(4))

1. The amount of compensation does not include a component for shock, humiliation or distress.

Compensation cap (s.392(5)&(6))

1. The amount of $9,000.00 gross is less than the compensation cap of 26 weeks’ pay and no further adjustment of the amount is necessary.

Instalments (s.393)

1. No application was made by APTA to pay any compensation awarded by instalments and no order will be made to that effect.

Conclusion on remedy

1. In my view, the compensation figure arrived at in this case does not yield an amount that is clearly excessive or clearly inadequate.

1. For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $9,000.00 gross in favour of Ms Lill is appropriate in the circumstances of this case. I will issue an order [PR749043] to that effect.

COMMISSIONER

Appearances:

S Ingui on behalf of the applicant.
No appearance for the respondent.

Hearing details:

2022.
Sydney (by video):
December 19.

[1] Lill v Australian Pilot Training Alliance Pty Ltd [2022] FWC 2794 (PR746949) 4 November 2022.

[2] Lill v Australian Pilot Training Alliance Pty Ltd [2022] FWC 2794 (PR746949) 4 November 2022.

[3] Fair Work Act 2009 (Cth), s.385.

[4] Fair Work Act 2009 (Cth), s.388.

[5] Ryman v Thrash Pty Ltd t/as Wisharts Automotive Services[2015] FWCFB 5264.

[6] Hart v Forex 1 Pty Ltd ATF Trading Rental Trust[2018] FWC 942.

[7] Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services[2015] FWCFB 5264.

[8] [2013] FWCFB 431.

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