Ronel Smit v J.G. Goldner Pty. Ltd
[2025] FWC 67
•8 JANUARY 2025
| [2025] FWC 67 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ronel Smit
v
J.G. Goldner Pty. Ltd.
(U2024/8100)
| DEPUTY PRESIDENT ROBERTS | SYDNEY, 8 JANUARY 2025 |
Application for an unfair dismissal remedy
Ms. Ronel Smit (Applicant) has applied to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (Act) for a remedy for what she alleges was her unfair dismissal by her former employer J. G. Goldner Pty Ltd (Respondent).
When can the Commission order a remedy for unfair dismissal?
Section 390 of the Act provides that the Commission may order a person’s reinstatement, or the payment of compensation to a person if satisfied that the person was protected from unfair dismissal at the time of being dismissed and the person has been unfairly dismissed.
Section 382 provides that a person is protected from unfair dismissal if the person is an employee who has completed a period of employment of at least the minimum employment period and the person is covered by a modern award, an enterprise agreement applies to the person, or the person earns less than the high-income threshold. It was not contested, and I am satisfied, that the Applicant is protected from unfair dismissal for the purposes of s.382.
Section 385 relevantly provides that a person has been unfairly dismissed if the Commission is satisfied of four matters: the person has been dismissed, the dismissal was harsh, unjust or unreasonable, the dismissal was not consistent with the Small Business Fair Dismissal Code (SBFDC) and the dismissal was not a case of genuine redundancy.
There was no dispute that the Applicant has been dismissed by the Respondent. The Respondent was not a small business employer to which the SBFDC applied[1] and did not contend that the dismissal was a case of genuine redundancy.
The Applicant was notified of her dismissal on 4 July 2024 and her dismissal took effect on that day. The application for relief was filed within the requisite time period.[2] No jurisdictional issues arise with the application. That being the case, the question of whether the Applicant has been unfairly dismissed will depend on whether the Commission is satisfied that the dismissal was harsh, unjust or unreasonable within the meaning of s.385.
Background
The Applicant commenced employment with the Respondent in January 2023 and worked as a senior accountant in the accounts section of the Respondent’s business from that time. The Applicant’s responsibilities included the processing of invoices and the preparation of the Respondent’s payroll.
The Respondent is in the business of horse transportation. Mr. Jennings is a director of the Respondent. His assistant is Ms Reardon.
The events which precipitated the termination of the Applicant’s employment occurred on 19 June 2024. On that day, there was an interaction by telephone between the Applicant and Ms. Reardon. The Applicant spoke with Ms. Reardon about a time sheet for one of the Respondent’s drivers that had not been approved by an operations manager. The non-approval was impeding the processing of the payroll. Ms. Reardon asked the Applicant to contact the driver in question to confirm the details in the time sheet. As is discussed further below, the Applicant declined Ms. Reardon’s request to do so. Ms. Reardon ultimately made the call to the driver herself and clarified the discrepancy. She then advised the Applicant that this had been done and the Applicant proceeded to process the payroll.
The following morning the Applicant was stood down for alleged serious misconduct. The Applicant spoke with Mr. Jennings who confirmed that she had been stood down with immediate effect. The Applicant was issued with a ‘show cause’ letter on the same date. The letter said that there would be a ‘show cause’ meeting on 24 June 2024 or alternatively provided that the Applicant could provide a written response from the Applicant by the same date. The Applicant sought an extension of time to respond. She provided a medical certificate in support of the request. She was given until 27 June to respond and did so on that day by providing a written response to the show cause letter. A meeting also occurred on that day involving the Applicant, the Applicant’s support person, Mr. Jennings and Ms. Reardon. The Respondent responded to the Applicant’s response in writing by letter dated 29 June 2024. That correspondence included references to further issues relating to the Applicant’s conduct and performance. The Applicant responded in writing again on 3 July 2024. The Applicant’s employment was terminated by correspondence on 4 July 2024 with immediate effect.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the Act provides 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.
Valid reason relating to capacity or conduct
The termination letter to the Applicant dated 4 July 2024 includes the following:
Termination
After reviewing in detail your letters of 27 June 2024 and 3 July 2024, and considering the serious nature of your misconduct, I consider your responses to be wholly unsatisfactory.
Particularly, and specifically related to your conduct on 19 June 2024:
·you refused multiple direct lawful requests to ensure the accurate processing of payroll; and
·you denied any responsibility both during and after the fact for the submission of payments for approval that were invalid and that therefore should not have been entered by you and submitted for approval; and
·your response to Goldners show cause letter of 20 June 2024 fails to provide any explanation for your actions, or take any responsibility for them, which place the profits of Goldners at serious and imminent risk.
For these reasons, I have determined that your conduct on 19 June 2024 amounts to serious misconduct.
Your conduct was entirely inappropriate for the role of a Senior Accountant, created an unacceptable risk to the profits of Goldners, and breached obligations under your employment agreement.
Further, I consider that your conduct on 19 June 2024 warrants immediate termination for serious misconduct in light of a multitude of prior similar conduct by you in the workplace, including:
·$11,259.26 expense processing misconduct relating to vehicle registration payments of vehicles not owned by Goldners; and
·Processing and approval of invoices that were not payable due to ongoing negotiations that you had failed to finalise; and
·the previous verbal warnings provided to you for your ongoing and repeated failure to follow lawful and reasonable directions and comply with the obligations under your Employment Agreement.
It is apparent from the above that the Respondent regarded the events of 19 June as serious misconduct and that “in light of” other previous matters that were identified, this conduct on 19 June constituted a valid reason for immediate dismissal.
Before turning to the events of 19 June in more detail, I propose to say something about the instances of similar conduct cited by the Respondent in the letter of termination and the ‘repeated breaches of employment obligations’ which the Respondent referred to in the show cause letter of 20 June 2024. In summary, the latter correspondence referred to the following alleged ‘breaches’:
(i)failure to investigate and manage payments for vehicle registrations for vehicles no longer owned by the Respondent;
(ii)attempting to pay an invoice after being requested to investigate the matter prior to payment;
(iii)paying an invoice when instructed not to pay; and
(iv)paying an employee on maternity leave ‘normal pay’ and failing to set up parental leave payments ahead of scheduled maternity leave.
Ms. Reardon gave evidence as to a number of these issues and an issue which related to the payment of a supplier on or about 10 April 2024.
Vehicle registration
In relation to the registration payments for vehicles no longer owned by the Respondent, the Applicant gave evidence that the payments were set up as annual debits from the Respondent’s business accounts and the vehicles in question were in fact sold over two years before she commenced her employment with the Respondent. She said the registrations were not cancelled after the sales and continued to be direct debited from the account, including in 2023 after she had started with the company. The Applicant said that she discovered the error in 2024 and brought it to the Respondent’s attention. The result was that the incorrect payments ceased and were not paid again in error in 2024.
The Applicant said that vehicle fleet registrations were not part of her role but were the responsibility of the business manager who left the Respondent’s employment in March 2024. She said that the payment had occurred because of a breakdown in process which had taken place before her tenure with the Respondent had started. In their correspondence of 29 June 2024, the Respondent said that it was reasonable to expect the Applicant to review and reconcile the payment of all invoices, including those being made by direct debits, and that the Applicant had failed to do that in 2023 resulting in a payment that should not have been made.
I accept the Applicant’s version of events as being accurate. The error in the process had been created in advance of her commencement and she can be rightly credited with having identified the error and preventing its recurrence in 2024. Although it can be said that it would be reasonably expected that the Applicant check the veracity of all incoming invoices and recurring automatic debits, the ultimate responsibility for payment was not hers alone. It is clear on the Respondent’s own evidence that the Applicant’s role involved processing invoices, uploading them and authorising the payments as the first authority.[3] A second authorisation was required for payment. Prior to March 2024 and at the relevant time, the second authorisation came from the Respondent’s business manager.
Payment of disputed invoices
Queensland premises
The Applicant gave evidence about disputed invoices which she dealt with. The first was for a rental payment for the Respondent’s Queensland depot. The Applicant said that she processed the invoice for payment and submitted it for approval to either Mr Jennings or Ms. Reardon for payment authorisation. She said the payment was not approved by them during her employment. She disputed that she had ever been instructed by anyone not to submit the invoice for payment and said that the issue was raised for the very first time during the show cause process.
Ms. Reardon’s evidence was that the rental increase reflected in the invoice had not been agreed by the Respondent and that the Applicant had incorrectly submitted the invoice for approval. The approval was rejected by Ms. Reardon. There was no evidence to contradict the Applicant’s evidence that she was not instructed to withhold the invoice from payment and I accept the Applicant’s evidence on this point.
Bailey invoice
The Applicant disputed that she had been instructed not to pay an invoice relating to a supplier, Mr. Bailey. Ms. Reardon said she spoke with the Applicant and told her that the invoices was not to be paid. She said she sent the Applicant a text message when the payment was rejected by her. I prefer the evidence of the Applicant on this point. Her evidence was firm and direct. Ms. Reardon had to be pressed to give direct answers to questions about her instruction to the Applicant. She said she had ‘multiple discussions’ with the Applicant about the issue but gave little detail. No text message was produced in evidence. I do not consider that the evidence establishes that the Applicant processed this invoice contrary to instructions given to her by Ms. Reardon.
Mechanic’s invoice
The Applicant readily accepted that she processed the payment of a mechanic’s invoice in error after she had had a discussion with Ms. Reardon about the invoice being in dispute. She admitted that as a result of her error, the invoice was submitted for second approval and it was paid. She confirmed that Ms. Reardon raised this error with her after it had been discovered.
It appears that this error was referred to and relied upon in the ‘show cause’ letter. However, the letter of termination only makes reference to ‘approval of invoices that were not payable due to ongoing negotiations that (the Applicant) failed to finalise’. The reference to the Applicant failing to take steps to finalise negotiations appears in the Respondent’s correspondence of 29 June 2024 only in relation to the rental payments for the Queensland premises[4] and not the mechanic’s invoice. If I assume in the Respondent’s favour that the reference in the letter of termination to ‘approving invoices that were not payable’ includes the mechanic’s invoice, and that this was therefore relied on by the Respondent in support of the reason for termination, then I consider that this gives some limited support to the failure to follow reasonable directions as the ultimate reason for termination. This is because the Applicant conceded that she was directed not to process the payment but did so in error. However, I also accept that this error was a matter of inadvertence and not wilful misconduct.
Parental leave payments
The show cause letter refers to the processing of payments by the Applicant to an employee on parental leave. The Respondent said the applicant paid the employee an amount of ‘normal pay’ and that she had failed to set up parental leave payments in time for long-scheduled parental leave.
The Applicant responded in her correspondence of 3 July 2024. She explained that she had taken steps to facilitate access to the parental leave scheme in advance of the employee commencing leave. She provided emails to support her claim. She also said that the employee in question had taken personal leave before being paid annual leave and that the public holidays said to have been ‘paid incorrectly’ had fallen during the period of annual leave. The evidence from the Respondent came from Ms. Reardon who simply said that she became aware that maternity leave had been paid incorrectly and that public holidays had been paid to an employee whilst they were on maternity leave. On the state of the evidence before me I cannot be satisfied that the Applicant had failed to take steps to provide access to parental leave, incorrectly processed payments to the employee, or failed to follow reasonable directions in this respect.
Incident of 19 June 2024
The Applicant’s version of her interaction with Ms. Reardon was that on the morning of 19 June, while she was in the process of preparing the payroll, she was notified by one of the Respondent’s operations managers that she (the operations manager) could not approve one of the driver’s time sheets because she did not agree with the hours recorded on the sheet. The Applicant said she then called Ms. Reardon and asked her for assistance and for Ms. Reardon to contact the operations manager and ask the operations manager to do her job by completing the time sheets.
Ms. Reardon responded by asking the Applicant to contact the driver directly herself. According to the Applicant, she said to Ms. Reardon that she was not best placed to do this because it would compromise the ‘segregation of duties’ control whereby one person authorised the time sheets and another (the Applicant) processed the payments. The Applicant said she referred Ms. Reardon to Mr Jennings’ email of 11 April 2024 which she said made it clear that it was the operations manager’s duty to approve time sheets. The Applicant accepted that she declined Ms. Reardon’s request to contact the driver.
The Applicant said Ms. Reardon then reluctantly agreed to resolve the matter herself with the operations manager and shortly thereafter the issue was resolved and the payroll was processed in the ordinary way.
Ms. Reardon said the Applicant told her she did not have time to contact the driver. She said she asked the Applicant why she did not have time for a 5-minute conversation with the driver to question the records and was told again that she did not have time. Ms. Reardon said that she communicated to the Applicant that it was part of her job in processing payroll to question anything that does not look correct. She said:
The Applicant told me she did not have the authority to question time sheets. I responded by saying that the Applicant did have authority to question payroll timesheets that are not correct, just like she should be calling and questioning any invoices and accounts that did not look correct.
I further communicated to the Applicant that her role in finance and processing payments makes her responsible for knowing what all payments relate to.
Ms. Reardon said that the Applicant had the ability to approve timesheets in the absence of approval from the operations manager.[5]
Ms. Reardon contacted the driver herself and clarified that an error had been made in the timesheet that had been submitted. After the matter had been resolved, Ms. Reardon said she spoke with Mr Jennings about the conversation with the Applicant and told him that the Applicant had said she did not have authority to question time sheets and that she had responded by saying the Applicant did have that authority to do so, just as she had authority to do so for invoices or accounts that did not appear to be correct.
The Applicant said that although Ms. Reardon was not her direct manager, she did not contend that Ms. Reardon did not have authority to ask her to contact the driver to resolve the time sheet issue. Instead, she said that the direction was unreasonable in circumstances where it was the responsibility of the operations manager to take that step. The Applicant said this was consistent with the company’s historical practice and that the director had given written instructions that this was the case.
In assessing the reasonableness of the direction given to the Applicant it is necessary to take account of the email from Mr. Jennings of 11 April 2014. That email said, relevantly:
As discussed, please set up a team call to discuss admin needs so that everyone is sharing the load while we are understaffed.
In advance, please prepare a list of items that you need delivery from your teammates in order to complete your work effectively. Items that I have jotted down included:
· review of timesheets to be complete by COB Tuesday so that payroll can be completed on Wednesday first thing…
Please add to and complete the list and then discuss in the meeting to get the support from the team that you need.
I accept the Applicant’s evidence that she raised this email in her conversation with Ms. Reardon on 19 June as a reason why she should not have to check to confirm timesheets.
In my view, the principal responsibility for the approval of time sheets rested with the operations manager. So much is made clear by the email of 11 April which refers to items that need to be delivered by the Applicant’s teammates as including ‘review of time sheets.’ I am also satisfied that it was established company practice that the operations managers have that responsibility and the request that the Applicant make an inquiry directly with a driver on 19 June was an exception to an otherwise well-established rule. As a matter of practice, it is entirely understandable why someone with a working knowledge of the drivers’ day to day duties would be given that responsibility, rather than someone in the Applicant’s position.
However, the assessment as to whether there is a valid reason for dismissal related to capacity or conduct is to be assessed from the perspective of the employer and by reference to the acts or omissions on which the employer relied, considered in isolation from the broader context in which they occurred.[6] Viewed in this way, I am of the view that there was a valid reason for dismissal. The Applicant accepted that she refused a direction to contact the driver for the reasons stated above. I do not consider that the direction by Ms. Reardon was an unreasonable (or unlawful) one. The request was a relatively simple one-off request to ensure that the remaining obstacle to the approval of the timesheets and completion of the payroll was removed. Although the email of 11 April made it clear that others were to review timesheets so the Applicant could process the payroll, it did not prohibit or prevent her from making an inquiry when directed to do so. Even if it were out of the ordinary, a person in the Applicant’s position could be reasonably expected to carry out that request.
Although the Applicant was summarily dismissed, I note that in order to demonstrate that there was a valid reason for the purposes of s.387(a), it is not necessary to show there was misconduct sufficiently serious to justify summary dismissal.[7] I conclude in this case that there was a refusal to comply with a lawful and reasonable direction from the employer on 19 June and that there was a valid reason for the dismissal related to the employee’s conduct.
Was the Applicant notified of the valid reason?
Proper consideration of s.387(b) requires a finding to be made as to whether the applicant “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[8]
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[9] and in explicit[10] and plain and clear terms.[11] In this case the Applicant contended that there was no valid reason. The Respondent’s principal reason for termination was that ‘(the Applicant’s) conduct on 19 June 2024 amounts to serious misconduct’. The Applicant was notified of the reasons for her termination by correspondence dated 4 July. Having concluded that there was a valid reason the question here is whether the reason given was the reason that I have concluded existed under s.387(a).
The particular conduct of the Applicant on 19 June identified by the Respondent as supporting the reasons for dismissal is set out in paragraph [12] above. There are some difficulties with the description of the conduct by the Respondent. The conduct is described as refusing lawful requests ‘to ensure the accurate processing of payroll’. It is true that had the task of contacting the driver not been undertaken there would have been an inaccuracy in the payroll. However, the Applicant was actually asked, and refused, to undertake a task ordinarily undertaken by someone else as a precursor to the processing of the payroll i.e. the confirmation of employee timesheets. After that task was undertaken, the payroll was processed in the usual way and there was no suggestion that it was not processed accurately by the Applicant. The Applicant said she was accused by Mr. Jennings on 20 June of wanting to process the payroll without rectifying an issue. Any suggestion that the Applicant wanted to do that is simply wrong on the evidence. The Applicant was not ever proposing to process an inaccurate payroll. She was seeking to ensure that an obstacle to the accurate processing of that payroll was removed. Notwithstanding the lack of clarity on this point in the letter of termination itself, the relevant conduct is more accurately described in the show cause letter of 20 June 2024, and I do not think there could ultimately have been any doubt on the Applicant’s part as to this aspect of the conduct underpinning the reason for dismissal.
The so-called denial of responsibility for submitting payments for approval that should not have been submitted does not relate to conduct of the Applicant on 19 June 2024. These were allegations that surfaced during the show cause process. Aside from the exchange with Ms. Reardon about contacting the driver, there was no evidence of the Applicant denying responsibility for anything on 19 June and certainly no evidence that payments were improperly submitted for approval on 19 June. To the extent that the reference to conduct on 19 June relating to these matters is a simple misdescription and the Respondent relies on these events as being further valid reasons for termination, I am not satisfied that they are, for the reasons described above.
Quite obviously, the third instance relied upon in the termination letter, namely the failure to respond to the matters in the show cause letter of 20 June, could not relate to the Applicant’s conduct on 19 June. In any case the assertion that the Applicant failed to respond to the show cause letter must be rejected. The Applicant responded fulsomely, twice, in writing, with supporting material, by supplying over 80 pages of documentation including her explanation of events. She must have been left wondering why a failure to respond was described as conduct amounting to serious misconduct.
In my view, the although the reasons provided in the termination letter include the reason found to exist under s.387(a), the Applicant would also have been left in some doubt as to why the other matters cited in that letter amounted to misconduct justifying termination.
Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[12]
The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly.[13] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.[14]
The Applicant said that the show cause process was rushed, that a request for a reasonable extension on medical grounds was denied and that the additional allegations that emerged during the process had never been put to her before the 20 June. She also submitted that there was no proper investigation into the matters raised against her, particularly before the show cause letter was issued, that Mr. Jennings was fixed in his view and that her submissions made no difference to an outcome that was predetermined.
The Respondent said that the Applicant was given a detailed show cause letter outlining the allegations against her and was given additional time before she had to attend the show cause meeting and provide her response. They said after the show cause meeting and consideration of the Applicant’s response, the Applicant was provided with a further response from the company and another opportunity to provide a written response. The Respondent denied that there was a predetermined outcome.
Although the Applicant was under considerable pressure to provide a response to a wide range of allegations that had not previously been put to her, I do not think on the evidence it can be said that she did not have an opportunity to respond to the allegations against her. The allegations were outlined in detail in the show cause letter. She responded to all of them in detail in writing twice and during the show cause meeting. The Respondent responded in writing to the Applicant’s initial response and provided her with a further opportunity to reply which she availed herself of. In relation to the assertion that there was no proper investigation I am not satisfied on the evidence that this was the case. It is true that the Applicant was not consulted prior to the show cause letter being issued. I also think it likely that the extent of any ‘investigation’ prior to that letter being sent was a conversation between Mr. Jennings and Ms Reardon. However, there was a process which followed in which the Applicant had an opportunity to put her case and that is what she did.
As to the proposition that Mr. Jennings had a predetermined view of the outcome, whilst I do have some concerns in this respect, including his description of the Applicant in the correspondence of 29 June as an ‘unreliable witness’ as a reason why she was not spoken to before the show cause letter was issued and the very limited concessions made in response to the substantive material that was put in her own defence by the Applicant, I cannot be satisfied on the available evidence that there was no real opportunity to respond because the Respondent was simply ‘going through the motions’ rather than providing a genuine process to allow the Applicant to respond.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
Where an employee who is protected from unfair dismissal has requested that a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present. It was not in issue that the Applicant had an opportunity to have a support person attend with her during the show cause meeting. There was no unreasonable refusal by the Respondent to allow a support person to be present.
Was the Applicant warned about unsatisfactory performance before the dismissal?
The Applicant said that she had not received any previous warnings related to performance and that her one performance review was positive. However, the Applicant was dismissed for reasons relating to conduct rather than performance and I do not regard this as a relevant factor in these circumstances.
To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal and to what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
At the time of the dismissal there were 26 employees employed in the Respondent’s business. It appears that Mr. Jennings was responsible for the process that was followed. There was no evidence of any human resource management specialists or expertise being involved. The process adopted reflected an understanding that an employee should be given an opportunity to provide a response before potentially adverse consequences are visited on them. I do not consider there are any relevant factors to take into account under this heading.
What other matters are relevant?
Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant. I have considered the evidence and submissions that relate to this heading. It is necessary to consider the broader context in which the conduct of the Applicant occurred to form an overall view as to whether the termination was harsh, unjust or unreasonable. I am of the view that there are a number of factors here that need to be taken into account.
I think it is relevant to take into account the degree of seriousness of the misconduct and whether the response of dismissal was proportionate to the conduct.[15] Whilst it must be recognised that a failure to follow a lawful and reasonable direction is a serious matter that goes to the heart of an employment relationship and will often justify termination, some regard must be had to the context in which the conduct occurred.
First, there was some basis for the Applicant to think that it was not appropriate for her to do the task she was asked to do. It was a well-established practice that this task was the responsibility of the operations manager. Mr. Jennings had given the Applicant recent written confirmation that her teammates were responsible for time sheets that would allow her to process the payroll. It does not appear to have been made clear to the Applicant that she had express authority to approve timesheets or that this task had been formalised as being part of her work. The Applicant clearly thought that it was a desirable practice that different people be responsible for timesheet authorisation and payroll processing once that authorisation had been given. There is obvious logic in that view. The practice is an additional control measure that is ultimately in the company’s interest. The Applicant’s unchallenged evidence was that the operations managers were the direct supervisors for the drivers and that the drivers do not report to her. In that case, short of familiarising herself with the activities of all of the drivers and potentially having to contact them herself, the Applicant would have no way to verify their timesheets without the necessary approvals from the operations manager.
I also accept on the evidence that there were considerable work pressures on the Applicant, including on 19 June, and that the loss of key personnel, including the business manager, had contributed to that situation. In those circumstances it is understandable that the Applicant was reluctant to assume responsibility for chasing discrepancies in time sheets which was primarily the responsibility of someone else, particularly given that the operations manager had simply said they did not want to make the inquiry because they did not feel comfortable in doing so.
There is also no basis in the evidence to suggest that the Applicant was proposing to process an inaccurate payroll. She wanted the issue resolved, but took an overly rigid and ultimately incorrect, view of where her responsibilities began and ended.
Although the Applicant was terminated for refusing a direction to do her work, there was no evidence that there were any consequences for the operations manager who had decided unilaterally that she would not confirm and approve the time sheets. Some care must be taken in taking into account potential differential treatment,[16] although I think in this instance there is some disparity between the company’s response to the operations managers’ reluctance to deal with the issue and the response to the Applicant’s conduct. In the result, there was a personal clash between Ms. Reardon and the Applicant, which was reported to Mr Jennings, acted on decisively and resulted in serious consequences for the Applicant. There did not appear to be any follow-up conversation with the operations manager who had decided that she would not contact the driver herself. I also note that the Applicant’s call to Ms Reardon on 19 June was a proactive step on her part to try to resolve the matter so that the Applicant could do her job processing the payroll.
It is also necessary to note that the Applicant provided a detailed response to the other allegations against her and on the evidence, I cannot be satisfied (save for the incorrect payment which the Applicant readily conceded that she had incorrectly processed for authorisation and the first authorisation of a registration payment for a vehicle that had been sold) that those allegations have been made out. To the extent the Respondent relied on those additional matters to justify the summary dismissal of the Applicant, I think that reliance is misplaced and operated harshly against the Applicant.
The incident in question on 19 June was quickly resolved. There was no loss to the company or any other party. The Respondent in my view gave insufficient attention to circumstances that might have justified an alternative consequence short of summary dismissal.[17] Although I have concluded that there was a valid reason for the termination, I think that termination of employment in the overall context was a disproportionate response.
Conclusion
The majority in Australia Post[18] observed that ‘(A) determination as to whether a dismissal was harsh, unjust or unreasonable involves the application of a broad discretionary standard. The discretion is nevertheless one that must be exercised judicially, that is, in accordance with applicable legal principles.’ They also referred to the ‘bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be ‘harsh unjust or unreasonable’ notwithstanding the existence of a ‘valid reason’ for the dismissal.’[19]
Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of the Applicant was harsh. I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the FW Act.
Remedy
In considering an appropriate remedy in a case of unfair dismissal, regard must also be had to the legislative object set out in s.381 of the Act. This includes an emphasis on the remedy of reinstatement[20] and on ensuring that a “fair go all round” is accorded to both the employer and employee concerned.[21]
The Applicant did not seek reinstatement. I do not regard reinstatement as appropriate in the circumstances.
The Commission can only order the payment of compensation where it is satisfied that reinstatement is inappropriate and it considers that such an order is appropriate in all the circumstances.[22]
I am satisfied that it is appropriate in the circumstances to make an order for compensation in lieu of reinstatement. In doing so, I am required by s.392 to take account of all of the circumstances of the case, including the matters listed in subsections (2)(a) to (g) of that section. The Applicant sought compensation in an amount of 15 weeks salary being the earnings she had lost from the date of termination until the hearing of the matter.
There was no evidence as to the effect of any order for compensation on the viability of the Respondent. I am unable to conclude that the effect of the proposed order on a business of this size would have a material impact on the Respondent’s viability. The Applicant was employed for a period of some 18 months. This is a reasonable period of service, and I take that into account in the assessment of the circumstances relevant to the making of an order.
In relation to the remuneration that the Applicant would have received or been likely to receive had she not been dismissed, the Respondent contended that it would only have been a matter of days before a large error would have come to their attention and required termination of the Applicant’s employment. I am not satisfied that that is the case. I am of the view that the employment relationship would have been likely to endure for a further 8 weeks. In this respect I take into account the evidence of the Applicant’s workload and the likelihood that she may not have continued in her role without further support.
There was no evidence from the Applicant as to efforts to mitigate her loss. I would discount any award of compensation by an amount of 30% on that account. The Applicant said she had been unable to find alternative employment as at the date of the hearing and there was no evidence of any earnings from the date of dismissal to that date. I take these matters into account as I do the amount reasonably likely to be earned between the making of the proposed order and the actual compensation, however given the amount of the proposed order I do not think this necessitates any adjustment to the proposed order.
Section 392(3) requires the Commission to reduce any amount of compensation to be ordered by an appropriate amount where it is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person. Having concluded that the Applicant failed to follow a reasonable direction, I propose to reduce the proposed amount accordingly. However, for the reasons described above I do not consider the Applicant’s conduct warrants a reduction beyond 10% of the proposed amount.
The well-established approach to the assessment of the quantum of compensation under s.392 of the Act is to apply the “Sprigg formula”. That formula is derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket.[23]
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the employee 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. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
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 5: Assess the figure against the compensation cap.
In accordance with step 3 above, I would adjust the proposed amount by a further 5% for contingencies.
Applying the above formula to this case I am of the view that order for compensation should be made in an amount of $8,461.55 (gross) being $1,923.08 per week (based on the Applicant’s gross annual earnings of $100,000 per annum) multiplied by 8 weeks, i.e. $15,384.64, less 45%.
The amount proposed does not exceed the compensation cap. Having regard to the circumstances as a whole, I do not consider an order in this amount to be clearly inadequate or clearly excessive.
The gross amount above should be adjusted for taxation purposes.
An order to this effect will issue separately.
DEPUTY PRESIDENT
Appearances:
Ms Smit for the Applicant.
Mr Jennings for the Respondent.
Hearing details:
By Video using Microsoft Teams at 10am AEDT on Wednesday, 6 November 2024
[1] See s. 388 and s.23.
[2] Section 394(2).
[3] Exhibit R2 paragraphs 4 to 6.
[4] Exhibit A11 at 2.3.
[5] Transcript PN447-448.
[6] Sharp v. BCS Infrastructure Support Pty Ltd [2015] FWCFB 1033 at [25] citing B, C and D v Australian Postal Corporation t/a Australia Post [2013] FWCFB 6191.
[7] Sharp op cit at [32].
[8] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[9] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[10] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[11] Ibid.
[12] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[13] RMIT v Asher (2010) 194 IR 1, 14-15.
[14] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[15] Gelagotis v Esso Australia Pty Ltd t/a Esso[2018] FWCFB 6092, [117].
[16] Australian Postal Corporation t/as Australia Post v. Rishiti[2012] FWAFB 7423.
[17] National Union of Workers and AB Oxford Cold Storage Co. Pty. Ltd C No. 30469 of 2000, [23].
[18] B, C and D v. Australian Postal Corporation t/aAustralia Post [2013] FWCFB 6191 at [53].
[19] Ibid [41].
[20] s 381(1)(c).
[21] BlueScope Steel Limited v Sirijovski[2014] FWCFB 2593 at [73].
[22] Section 390(3).
[23] (1998) 88 IR 21.
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