Rebecca Shearer v Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers

[2020] FWC 4535

[2020] FWC 4535

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Rebecca Shearer
v
Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers
(U2020/7059)

COMMISSIONER BISSETT MELBOURNE, 31 AUGUST 2020

Application for an unfair dismissal remedy.

[1] Ms Rebecca Shearer has made an application to the Fair Work Commission pursuant to s.394 of the Fair Work Act 2009 (FW Act) seeking relief from unfair dismissal. Ms Shearer was employed by Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers (Respondent) in the Melbourne store. Her employment with the Respondent came to an end around 19 May 2020 when she says that she was dismissed.

[2] The Respondent says that Ms Shearer was not dismissed from her employment but rather she resigned or, absent a resignation letter, she abandoned her employment. This was notified after she failed to work any shifts after 19 May 2020 and was conveyed to her on 28 May 2020 in correspondence from Mr Giulio Portas of the Respondent.

[3] Following consultation with the parties the application was dealt by way of a determinative conference.

[4] The parties agreed and I am satisfied that Ms Shearer is protected from unfair dismissal, her employment did not end by way of redundancy and the Respondent is not a small business such that the Small Business Fair Dismissal Code does not apply.

[5] In order to determine if Ms Shearer has been unfairly dismissed it is necessary to first consider if she was dismissed as provided for in s.385(a) for the FW Act and, if so, determine if the dismissal was harsh, unjust or unreasonable as per s.385(b) of the FW Act.

BACKGROUND

[6] The background and circumstances leading up to the end of Ms Shearer’s employment are outlined in the statement and the evidence of Ms Shearer. The Respondent does not dispute Ms Shearer’s account of what occurred. Whilst the Respondent provided a brief statement from Mr Nicola Cerrone, Director and owner of the business, it chose not to call Mr Cerrone to give evidence. Given the importance of the conversation between Mr Cerrone and Ms Shearer described below, the Respondent’s representative at the hearing was given an opportunity to contact Mr Cerrone to determine if he wished to give evidence. The Respondent indicated that Mr Cerrone would not do so, and it agreed with Ms Shearer’s account of the conversation she had with Mr Cerrone.

[7] Ms Shearer is a jeweller by training. In addition to working for the Respondent she did, at the time, and still does run her own jewellery business making and selling jewellery.

[8] Ms Shearer commenced working for the Respondent as a sales consultant in February 2017. At the time she commenced working for the Respondent she disclosed that she had her own business. No objection was raised to this. Ms Shearer said that it was common knowledge amongst her colleagues that she had this business.

[9] On 18 May 2020 Ms Shearer received a telephone call from Mr Cerrone. Her account of this call is as follows:

…On the afternoon of May 18, 2020, which was my day off, I was in the jewellery studio I rent a space in. I have been renting this studio space since mid 2016. Rhys Turner, who is the co-owner of the studio, was also in the room. I received a call from Nicola Cerrone, who is the owner of Cerrone Jewellers. It was unusual for Nic to call me, as we seldom had any communication, especially on my days off. Nic expressed to me that he had seen my jewellery website/online store, where I showcase and sell the jewellery I personally make. He told me “I cannot have it”, and “you cannot do both”. I said that I had been making jewellery for ten years, so I couldn’t just stop. He said “Well there’s your decision. You must go and follow your dreams.” He said “You cannot have two lovers.” When I asked him to clarify what he meant, and if I still had a job, he said “I don’t want to talk about it”. I asked again for him to clarify, and he repeated that he didn’t want to talk about it. I was in tears, and was very shocked and confused. I felt I needed a moment to process what had just happened, so I told Nic I would call him tomorrow. He agreed, and the call was ended... 1

[10] Ms Shearer said she was shocked and confused by the call and, after calming down, rang Ms Hannah Chambers, her manager at the Melbourne store. Ms Shearer’s evidence is that Ms Chambers said she had told Mr Cerrone that she did not want Ms Shearer sacked and that she thought Mr Cerrone could be talked around.

[11] That evening Ms Shearer composed an email to Mr Cerrone, also copied to Ms Denise Butt and one other (Alison, Retail Manager) from the Respondent. In that email Ms Shearer detailed her study background and the establishment of her business, that she had never sought to hide her business from the Respondent and had “always gone to lengths to ensure no conflict of interest” between her business and that of the Respondent. Ms Shearer expressed that she did not consider she had acted in anyway against the interests of the Respondent and that the phone call had left her “shocked, upset, and confused.”

[12] Ms Shearer specifically asked Mr Cerrone to “[p]lease can you clarify via email if I am still employed by Cerrone, or if I have been dismissed, before my next shift. If I have been dismissed, please can you let me know if you expect me to serve a period of notice, and if so, how long this will be? If I have been dismissed, I will require a letter of termination.” 2

[13] Ms Shearer said that while she was composing this email she received a call on her mobile phone from a number she recognised as Mr Cerrone’s. She did not answer the call, wanting to put her thoughts down in writing, and because she was still upset by the earlier call.

[14] Mr Cerrone replied the following day as follows:

Dear Rebecca,

I can appreciate what you’re saying but it is even more obvious to me where your passion lies.

I have mentioned to you before, when people join our team we want it to be for a long time, the bulk of our staff have been with us for many years and once your business takes off, I can understand you will want to dedicate your time there.

I do not question your ethics or integrity and I don’t suggest you would be taking on Cerrone clients as your own.

I believe your commitment should be to your own business and rightly so, as that is where your future lies. It would be extremely difficult to give that same commitment to Cerrone.

I sincerely would love to see you follow your dream and make a great success of it, that would make very proud and hopefully the experience you have gained whilst at Cerrone will help you achieve your goals. [sic]

Kind regards

NICOLA CERRONE
Director

[15] On Tuesday 19 May 2020 Ms Shearer had an exchange by text message with Ms Chambers in which Ms Chambers said that she was “sorry I wasn’t able to nip this in the bud when Nic first called me. This is not what I wanted at all…” 3 Ms Chambers then asked Ms Shearer if she “would like to stay on for the next couple of weeks” to which Ms Shearer said “I don’t feel comfortable coming back in at all after the way I’ve been dismissed”. Ms Shearer said that on this day she also attempted to call Ms Butt who did not return her call.

[16] On 27 May 2020 there was an exchange of emails between Ms Shearer and Ms  Butt. Ms Butt advised Ms Shearer that the Respondent wished “to organise your entitlements but to do so…will need a resignation letter from you.” Ms Shearer replied that she had not resigned, she had sought clarification from Mr Cerrone but he had ignored the question and had wished her well “reinforcing that he no longer wanted me to work for Cerrone.” Ms Butt replied that it “was thought that a resignation would be more a benefit to you as a reference could be provided.”

[17] On 19 May 2020 Ms Shearer had an email exchange with Mr Portas who said that the Respondent had accepted her resignation and would like to process her payments including 4 weeks in lieu of notice but that it would require a signed resignation letter. 4 Ms Shearer again replied that she had not resigned to which Mr Portas indicated that Ms Shearer had decided not to return to work so she would be taken to have abandoned her employment.5

[18] Ms Shearer made her application to the Commission on 21 May 2020.

WAS MS SHEARER UNFAIRLY DISMISSED?

[19] Section 385 of the FW Act states as follows:

385  What is an unfair dismissal

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

(a) the person has been dismissed; and

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

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

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

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

[20] As the Respondent is not a small business and the dismissal was not a case of redundancy, I must first consider whether Ms Shearer was dismissed and, if she was, if that dismissal was harsh, unjust or unreasonable.

Was Ms Shearer dismissed?

[21] Section 386 of the FW Act describes the circumstances of when a person may be considered to have been dismissed.

386  Meaning of dismissed

(1) A person has been dismissed if:

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

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

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.

[22] I am satisfied that the circumstances in ss.386(2) and (3) of the FW Act do not apply. It is therefore necessary to determine if Ms Shearer’s employment was terminated at the employer’s initiative or if she resigned but was forced to do so by conduct of the Respondent.

Was Ms Shearer’s employment terminated on the employer’s initiative?

[23] In Mohazab v Dick Smith Electronics Pty Ltd (No 2) 6, the Full Court of the Federal Court said:

In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (“David Graphics”), Industrial Relations Court of Australia, NI 94/0174, 12 July 1995, as yet unreported, Wilcox CJ. His Honour, at 3, referred to the situation of an employee who resigned because “he felt he had no other option”. His Honour described those circumstances as:-

“... a termination of employment at the instance [of] the employer rather than of the employee”.

And at 5:

“I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.”

[24] In this case I am satisfied that the employment relationship between Ms Shearer and the Respondent would not have come to an end were it not for the actions of Mr Cerrone. That he failed to correct any misapprehension of Ms Shearer when she clearly asked him to confirm if her employment had, in fact, been terminated only reinforces what Ms Shearer drew from her conversation with him on 18 May 2020 that Mr Cerrone had terminated her employment.

[25] There was a multitude of times the Respondent could have corrected Ms Shearer’s conclusion that her employment had been terminated but none of these was taken up. Mr Cerrone could have replied explicitly to the question asked by Ms Shearer but failed to do so. Ms Chambers said she had told Mr Cerrone that she did not want Ms Shearer sacked and was sorry she could not nip it in the bud. Ms Butt said the Respondent thought a resignation “would be more a benefit…as a reference could be provided” to Ms Shearer, suggesting that Ms Shearer could elect to resign and not be dismissed. Mr Portas claimed that, by not submitting a resignation letter, Ms Shearer had abandoned her employment even though she explicitly told him she had not resigned. Each of these four people did not seek to disabuse Ms Shearer of what she believed had occurred – that is, that her employment had been terminated.

[26] In these circumstances I am satisfied that Ms Shearer’s employment was terminated by an “act of the employer [which] results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee”. 7 The act of the employer in this case was the telephone call of Mr Cerrone to Ms Shearer on 18 May 2020 and his subsequent email to her. These actions of Mr Cerrone were reinforced by the silence of others when Ms Shearer said she had not resigned. That is, Ms Shearer’s employment was terminated at the initiative of the employer.

[27] I am therefore satisfied that Ms Shearer has been dismissed.

[28] It is therefore not necessary that I consider s.386(1)(b) of the FW Act.

Was the dismissal harsh, unjust or unreasonable?

[29] In order to determine if Ms Shearer’s dismissal was harsh, unjust or unreasonable it is necessary to consider those matters in s.387 of the FW Act.

[30] Section 387 of the FW Act states 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.

[31] The Respondent says that it has no objection to Ms Shearer running her own jewellery business. Its concern is that, since early 2019, Ms Shearer has been advertising that she makes gold engagement rings contrary to the provisions of her contract which states that she will “not engage in any business or activities which may conflict with or be harmful to the business interests of Cerrone”.

[32] The Respondent says that when Ms Shearer worked in silver this did not compete with Respondent’s products. The Respondent also submits that there are similarities between its website and that of Ms Shearer.

[33] The Respondent says that it was not its intention to dismiss Ms Shearer for this breach of her contract but rather to alert her to this and ask that she consider where her loyalties lay – with the Respondent or with her own business.

[34] Ms Shearer says that she did not understand this to be the purpose of the phone call from Mr Cerrone on 18 May 2020 and that, had she been alerted to the concerns of the Respondent, she would have ceased advertising that she undertook such work and would not advertise such work until such time as she no longer worked for the Respondent. Ms Shearer gave evidence that Mr Cerrone often speaks in illusions and implication and was not clear in what he wanted from the conversation of 18 May 2020 except that she understood her employment was terminated.

[35] Whilst a breach of a clause of a contract may provide a valid reason for dismissal I am not convinced, on the basis of the evidence before me, that such a breach, even if it did occur, provides a valid reason for dismissal.

[36] The extent of Ms Shearer’s bespoke engagement ring work in gold is not apparent. Ms Shearer clearly has designed and made some gold rings although it appears to be on request of friends and “friends of friends” as opposed to through the public coming across her website. It is not apparent that Ms Shearer has told clients of the Respondent of her business or that any of the Respondent’s clients have decided not to continue with a purchase from Cerrone and instead diverted their jewellery request to Ms Shearer.

[37] Further, I am satisfied that, had Ms Shearer been alerted to the concerns of the Respondent, she would have removed the offending material from her website.

[38] A reason for dismissal will be valid if it is “sound, defensible or well founded.” 8 In this case, given the paucity of evidence of harm done to the Respondent, and that it did not intend to terminate Ms Shearer’s employment, I am satisfied that the inferred reason for doing so – Ms Shearer advertising gold bespoke engagement rings in breach of her contract of employment – does not provide a valid reason for dismissal (s.387(a)).

[39] Even if I did find that the advertising of gold bespoke engagement rings by Ms Shearer on her website did provide a valid reason for dismissal I could not find that the Respondent advised Ms Shearer of that reason. As mentioned above the Respondent did not seek to call Mr Cerrone as a witness in these proceedings and has otherwise indicated that the account of the conversation between Ms Shearer and Mr Cerrone is accurately set out in the evidence of Ms Shearer. This account does not indicate that Mr Cerrone advised Ms Shearer of the problems with her website or jewellery business. The conversation was at a level of generalities such that little could be drawn from it except for the conclusion Ms Shearer drew that her employment was terminated. In this respect Ms Shearer could not possibly have responded to the concerns of Mr Cerrone as he did not articulate these to her.

[40] In circumstances where there is no valid reason for dismissal an employee could not have been advised of that valid reason or be given an opportunity to respond (ss. 387(b) and (c)).

[41] I do not consider that Ms Shearer was unreasonably denied a support person (s.387(d)).

[42] Ms Shearer’s employment was not terminated for poor performance. Section 387(e) of the FW Act is therefore not a relevant consideration.

[43] The Respondent employed 43 employees at the time Ms Shearer had her employment terminated. It is not clear if there is any human resources expertise within the business or if the size of the business effected how the termination of employment was affected.

[44] It is of concern however that Ms Shearer’s pleas to have her status with the Respondent clarified by her email of 18 May 2020 – that was sent not just to Mr Cerrone but also Ms Butt and Alison did not draw a response that engaged with the critical issue raised by Ms Shearer – that is, what she had done wrong and if her employment had been terminated. It may well be (as was put in submissions by the Respondent) that Mr Cerrone personally wanted to respond to the email, but no one bothered to ensure that response addressed the critical question of Ms Shearer’s employment. When Ms Shearer raised this with the Respondent at a later date she was told the Respondent would need a resignation from her so that it could organise her entitlements and from Mr Portas that, given the absence of a resignation, she was taken to have abandoned her employment. It is beyond comprehension that no one at the business, regardless of its size, ever addressed the most important question of all and that is whether Mr Cerrone had terminated Ms Shearer’s employment (ss.387(f) and (g)).

[45] I do not consider there are any other matters to consider (s.387(h)).

[46] For all of these reasons I am satisfied that the termination of Ms Shearer’s employment was harsh, unjust or unreasonable.

CONCLUSION

[47] Having found that Ms Shearer was dismissed and the dismissal was harsh, unjust or unreasonable I am satisfied that the dismissal was unfair.

REMEDY

[48] Ms Shearer does not seek reinstatement. I am satisfied, in that circumstance, that reinstatement is inappropriate. I shall therefore consider compensation.

Compensation

[49] The matters to be considered in determining compensation are set out in s.392 of the FW Act. Section 392 states as follows:

392  Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

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

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

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

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

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

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

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

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

Compensation cap

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

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

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

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

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

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

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

[50] During the hearing of the application for unfair dismissal I indicated that, should I find that Ms Shearer was unfairly dismissed I would seek further submissions from the parties as to compensation.

[51] I shall therefore issue direction to the parties to file submissions and relevant evidence in relation to those matters set out in s.392 of the FW Act. The directions will be issued at the same time as this decision.

COMMISSIONER

Appearances:

R. Shearer on her own behalf.

D. Butt for Cerrone Jewellers Pty Ltd T/A Cerrone Jewellers.

Hearing details:

2020.
Melbourne by video link.
August 19.

Printed by authority of the Commonwealth Government Printer

<PR722187>

 1   Exhibit A1.

 2   Exhibit A1, attachment Cerrone 1.

 3   Exhibit A1, attachment Cerrone 2.

 4   Exhibit A1, attachment Cerrone 16.

 5   Exhibit A1, attachment Cerrone 22.

 6 (1995) 62 IR 200.

 7   Ibid at p.205.

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