Sharron Brodie v Lakman Fernando Investments Pty Ltd T/A Burra Medical Centre

[2016] FWC 13

[2016] FWC 13

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Sharron Brodie
v
Lakman Fernando Investments Pty Ltd T/A Burra Medical Centre
(U2015/8177)

COMMISSIONER HAMPTON ADELAIDE, 8 JANUARY 2016

Application for relief from alleged unfair dismissal – dismissal based upon alleged poor work performance and attitude – small business – whether complied with small business fair dismissal code – no warning issued – code not followed - whether dismissal unfair – whether valid reasons – legitimate concerns about work related issues – dismissal unjust and unreasonable – remedy – compensation determined and ordered – liberty to apply in the event that the final compensation cannot be resolved within the parameters determined by the Commission.

1. Background and Case Outline

[1] Ms Sharron Brodie has made an application under s.394 of the Fair Work Act 2009 (the FW Act) seeking a remedy for an alleged unfair dismissal by her former employer, Lakman Fernando Investments Pty Ltd T/A Burra Medical Centre (BMC).

[2] BMC is a small medical practice located in Burra in regional South Australia. Ms Brodie worked as a receptionist at the Centre.

[3] Ms Brodie commenced employment in 2008 on a casual basis working 2 days per week and was dismissed via a letter provided on 15 May 2015 on the basis of alleged poor work performance and attitude. Although considered to be a casual employee, Ms Brodie was eventually paid four weeks in lieu of notice based upon the five days per week that she was working at that time.

[4] There is no dispute that Ms Brodie was protected from unfair dismissal within the meaning of s.382 of the FW Act and there is a valid application before the Commission. The Medical Centre is a Small Business within the meaning of the FW Act 1 and this means that the Commission must initially consider the implications of the Small Business Fair Dismissal Code established by s.388 of the FW Act (the Code).

[5] Ms Brodie contends, in effect, that she had supported the Doctors involved with the BMC during difficult times, including when a dispute occurred in relation to one of the Doctor’s right to practice at the local hospital. This also involved assisting to keep the medical practice operational when the Directors of BMC were un-contactable for a long period in 2010.

[6] Ms Brodie also contends that she was never warned about the need to improve her work performance and that the staff meeting relied upon by BMC included discussions about the need to improve work systems, changes in cleaning arrangements and a pay increase, but did not involve any warning or disciplinary action.

[7] Ms Brodie also denied that there were any legitimate work performance or attitude issues and indicated that she did, in effect, cover for the behaviour and performance of one of the Doctors and for the very poor computer and work systems in use at the practice.

[8] Ms Brodie also contends that she was dismissed unfairly as a result of being given a written letter of dismissal without any valid reasons, prior warning or discussions. Further, despite being informed that she was to receive four weeks pay in lieu of notice, Ms Brodie contends that she was initially required to sign a release agreement that would have prevented her from pursuing what she contends was an underpayment of wages during her over 7 years of employment. 2

[9] Ms Brodie sought compensation for her lost income following the dismissal.

[10] Ms Brodie provided a number of witness and other statements and gave sworn evidence. She also relied upon the evidence of her father, Mr Raymond Brodie, who gave evidence about his attendances at BMC and his role in a community support group.

[11] BMC contends that there was a need for Ms Brodie’s work performance to improve and this was discussed during the course of a staff meeting on 17 April 2015. This took place in the context of a decline in patient numbers and regular disagreements between Ms Brodie and Dr Dissanayake, the principal resident doctor. Further, BMC alleges that Ms Brodie would leave the practice to undertake personal shopping and was often distracted from her work as a result of discussions with her father in the workplace and when making or receiving personal phone calls.

[12] BMC also contends that Ms Brodie received personal emails at work, which was in breach of the centre’s policy requirements, and that this led to a computer virus corrupting the computer systems. In addition, BMC contends that Ms Brodie was a poor cleaner, did not always do the cleaning work when required and incorrectly recorded some of these hours, and was often late for work with no explanations given.

[13] Furthermore, BMC contends that there was no improvement after the discussions in mid April 2015 and as a result, it was fair and reasonable to dismiss Ms Brodie, which it did by giving pay in lieu of notice. BMC also contends that despite making such a payment, which it was not obliged to do, and requesting the return of the keys held by Ms Brodie, the keys were not returned until 4 June 2015. As a result of that delay, it was forced to change all of the locks at the Centre.

[14] BMC relied upon the written and sworn oral evidence of the following:

● Dr Lakman Fernando – Director of BMC;
● Dr Dharma Dissanayake – wife of Dr Fernando and the principal Doctor working at the Centre; and
● Mrs Barbara Gray – a Practice Nurse and Receptionist at BMC.

[15] This application was subject to a hearing following consultation with the parties as contemplated by s.399 of the FW Act.

[16] The hearing was conducted largely in an inquisitorial manner. Given the absence of external representation for either party, appropriate assistance and latitude was provided to facilitate the presentation of each case. 3 This included assisting each of the witnesses to confirm their primary written evidence and having witnesses recalled in the interests of fairness when later evidence that should have been raised with the applicant, became apparent. However, the parties retained full responsibility for the conduct of their cases and the provision of relevant evidence to the Commission.

[17] In considering the evidence given in this matter, I found that each of the major witnesses had a tendency to exaggerate the conduct and positions of the other parties and to minimise their own responsibility. This included the nature of the “warnings” given to Ms Brodie - where I found the evidence of Dr Fernando to be unconvincing on the details and involved various alleged discussions being conflated; some of the work performance issues that did exist and Ms Brodie’s lack of recognition of the same – where I found that the applicant was also unpersuasive; and the degree to which Ms Brodie and her father had supported BMC within the community – where both parties overstated their respective positions to some degree.

[18] I found the evidence of Mrs Gray, as to the facts, to be objective and generally reliable.

2. The general context in which the employment and dismissal occurred

[19] Before dealing with the key factual disputes and the relevant statutory considerations, it is appropriate to set out the general context in which the relevant events took place.

[20] BMC is a small practice that has at times struggled to keep both sufficient staff and patients to operate profitably. It was also conducted on a relatively informal basis with Dr Fernando being largely responsible for making the management decisions on behalf of the practice.

[21] Ms Brodie commenced employment in 2008, was paid as a casual employee, and worked hours that fluctuated to a degree depending upon the days required by the practice and the applicant’s availability for work. There was however a mutual expectation of ongoing work and originally the applicant normally worked two days per week but this had increased to five days per week from 2010.

[22] Dr Fernando and Dr Dissanayake both worked in the practice when BMC purchased the business but by 2014, Dr Fernando was largely working interstate as a locum. This meant that Dr Dissanayake was the principal Doctor with whom Ms Brodie and Mrs Gray dealt with on an operational basis during 2014 and 2015. Dr Fernando however retained management oversight and his absence from the workplace for periods of time created communication issues that contributed to difficulties in the employment relationships.

[23] Mrs Gray generally worked two days per week, with one of those days designed as a Practice Nurse. It is clear that the working relationship between Ms Brodie and Mrs Gray was strained at time, given that Ms Brodie had longer service and life experience but Mrs Gray was a qualified Nurse. The two employees however retained some social connection through SMS including in relation to their views of BMC as an employer and in relation to some operational issues at work.

[24] Dr Dissanayake also had visiting rights at the local hospital and during 2010 an issue arose about those rights. This was contested and ultimately resolved and this apparently set some of the context for the involvement of Mr Brodie in the workplace.

[25] It is clear, based upon the evidence, that the attendance of Mr Brodie at BMC was not merely a relative who might inappropriately hang around the workplace. Rather, he was both a patient that was at times undergoing serious medical treatment and was also actively involved in a community support group that was lobbying to assist both the local hospital and indirectly, the BMC practice. I accept that he would attend the clinic at times to brief one or both of the Doctors on the lobbying efforts undertaken to support the hospital and the local doctors.

[26] I accept that there may well have been times that Mr Brodie’s attendance at the workplace may have represented a distraction to Ms Brodie, however, I consider that this element has been overstated by BMC and this conduct must also be seen in the above context.

[27] At the time of dismissal, Ms Brodie worked an average of between 30 and 35 hours per week and was paid $22.00 per hour. That rate represented an increase given in mid-2015 and was the first adjustment in three years.

3. Was the dismissal consistent with the Code?

[28] Section 385 of the FW Act provides 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.”

[29] This means that if Ms Brodie’s dismissal was consistent with the Code, it cannot be considered to be unfair within the meaning of the FW Act. Section 396 of the FW Act also requires, in effect, that matters arising from s.385 are to be decided before dealing with the merits of the application.

[30] The Code as declared is set out as follows:

“The Code

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.”

[31] Accordingly, for an employer to believe on reasonable grounds that the conduct of the employee was serious enough to justify immediate dismissal, the employer must establish that it did in fact hold the belief that:

● the conduct was by the employee;
● the conduct was serious; and
● the conduct justified immediate dismissal.

[32] BMC indicated that it would pay Ms Brodie four weeks “in lieu of notice” and it eventually did so. I do not understand that BMC contends that there was any basis to support a summary dismissal on the grounds of serious misconduct and there is no evidence to support any such reasonable belief in any event. 4

[33] The alternative question is whether the requirements of the Code in relation to the “Other dismissals” have been met. This requires, in this case, a consideration to whether:

● BMC gave Ms Brodie a reason why she was at risk of being dismissed;
● The reason was a valid reason based on Ms Brodie’s conduct or capacity to do the job;
● Ms Brodie had been warned verbally or preferably in writing, that she risked being dismissed if there was no improvement; and
● BMC provided Ms Brodie with an opportunity to respond to the warning and gave her a reasonable chance to rectify the problem, having regard to the applicant’s response. Noting that rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

[34] I note that the “procedural matters” element of the Code did not arise in this case.

[35] Central to the application of the Code is the resolution of the dispute about the staff meeting conducted on 17 April 2015 by Dr Fernando. This arises because it is that staff meeting that is primarily relied upon by BMC to demonstrate its warnings and the basis of the opportunity for Ms Brodie to rectify the problems.

[36] Based upon the evidence before the Commission, I find as follows:

● The context for the staff meeting on 17 April 2015 was that BMC was experiencing increased competition for patients in the Burra region and Dr Fernando wanted to improve many of the systems and services provided at the Clinic;
● Both Ms Brodie and Mrs Gray participated;
● At the start of the meeting Ms Brodie was in another part of the building and all of the other attendees were sitting and waiting when Mr Brodie came in. He sat down in the vacant chair and started to provide an update on a recent community cabinet meeting he had attended. Mr Brodie was advised that it was a staff meeting and when this was confirmed again by Dr Fernando and requested to leave, he did so;
● Dr Fernando advised that things would need to change including so as to ensure that the phones were getting answered by the staff when patients called – this was a reference to the need for both staff members, and Ms Brodie in particular, to be more attentive to answering the phones;
● Dr Fernando also indicated that the hours allocated to cleaning for both staff would be altered and that each would be required to clean between 8.00am and 9.00am on the relevant days. (I note that this was later changed 5 so that this work was to be done when others were also at the clinic – this was done on the basis that BMC considered that the cleaning work was at times not being done by the staff at the nominated times however the basis of the change was not expressed during the staff meeting and these concerns were not raised with Ms Brodie prior to the dismissal);
● Dr Fernando also directed the staff not to raise administrative matters with Dr Dissanayake in order to permit her to concentrate on servicing the patients – although Dr Fernando held concerns about the nature of the interactions between Ms Brodie and Dr Dissanayake, he did not specifically raise these matters with the applicant at that time of this meeting; and
● There was a discussion about pay rates and Dr Fernando advised Ms Brodie and Mrs Gray that if they wanted more money then they should get another job. In the case of Ms Brodie, this would (objectively) have been understood to be a reference to finding alternative employment given that the applicant was already working significant hours with BMC. I do however accept that the capacity for BMC to pay increased wages was also linked by Dr Fernando to better or improved performance for the clinic.

[37] Dr Fernando and Dr Dissanayake also during the course of their oral evidence referred to occasions where they otherwise directed Ms Brodie to do, or not do, things at work including so as to cooperate more with Dr Dissanayake and to spend less time away from the reception desk. The evidence about when these occurred was vague and it was evident to me that these were more in the manner of general encouragement rather than any form of disciplinary discussion, even in the context of the more informal requirements of the Code. Indeed, it was evident to me that BMC was either unwilling or unable to have any firm or direct discussions with Ms Brodie about these matters.

[38] The discussion about finding alternative work and the opportunity for increased pay was cryptic at best and the evidence about BMC urging Ms Brodie to improve her work performance did not represent a warning within the contemplation of the Code or an indication that Ms Brodie’s employment was relevantly at risk.

[39] I do accept that there were some valid concerns about Ms Brodie’s work performance and I will return to these as part of my later consideration. However, as these were not raised with Ms Brodie in a manner required by the Code, and the relevant opportunity to improve in that particular context was not therefore provided, I am not satisfied that the dismissal was consistent with the Code.

4. Was the dismissal unfair within the meaning of the Act?

[40] Given the above findings, I need to consider whether the dismissal of Ms Brodie was unfair.

[41] 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.”

[42] It is clear that s.387 of the Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the Act sets out a number of considerations that must, where relevant, be weighed up in totality.

[43] It is convenient therefore to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.

Section 387(a) – whether there was a valid reason for the dismissal related to Ms Brodie’s capacity or conduct (including its effect on the safety and welfare of other employees)

[44] Valid in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly.⁶

[45] It is also clear from the authorities that the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts before the Commission. That is, it is not enough for an employer to rely upon its reasonable belief that the termination was for a valid reason.⁷ Equally, facts justifying dismissal, which existed at the time of the termination, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.⁸

[46] I have therefore considered the various factors relied upon by BMC during the hearing as constituting the reasons for dismissal, including those that were not relied upon at the time.

[47] I consider that there were genuine issues associated with Ms Brodie’s work performance and attitude. These are mainly associated with her attitude and conduct towards Dr Dissanayake. It was clear from the evidence that Ms Brodie did not respect Dr Dissanayake 9 and I find on the balance of probabilities that this led to inappropriate exchanges between them and some poor conduct by the applicant.

[48] In the context of a small business and relatively confined professional workplace, this was destructive of the necessary trust and confidence that needs to exist.

[49] It is also evident that Ms Brodie took some liberties with her working hours and arrangements. This included sometimes being absent from the clinic for short periods during working hours and making arrangements for time off without following the process formally required in her employment contract.

[50] In relation to the personal emails there was some evidence about a generic practice manual used in the clinic and the fact that this indicated that it was not appropriate to use BMC equipment for personal matters. This was not provided to the Commission and it was not apparently specific about personal emails in any event. Accordingly, I cannot be satisfied that this was in breach of policy. I note that it was not possible to identify the source of computer virus as being the private emails sent to the applicant. 10 Ms Brodie was however blamed for the incident and this led to resentment for both parties.

[51] BMC also cited concerns about Ms Brodie moving around Dr Dissanayake’s emails without permission. The evidence reveals that both Ms Brodie and Mrs Gray had access to, and did seek to assist the Doctor with, her computer. It is also evident that they were intending to delete duplicate emails, but this did not occur after Dr Dissanayake raised concerns.

[52] There are a series of text messages exchanged between Ms Brodie and Mrs Gray. These include what would be described as Ms Brodie’s delight that the problems with the computer system, and the loss of revenue from Medicare, was “Karma” for Dr Fernando and at other times, messages illustrated a complete disrespect for Dr Dissanayake. These messages were apparently not known by the employer at time of the dismissal but for reasons set out above can now be relied upon. These were private communications but their relevance is that they confirm the attitude and conduct concerns outlined above.

[53] Based upon the evidence before the Commission, I find on balance there was a valid reason for Ms Brodie’s dismissal based primarily upon the lack of respect for Dr Dissanayake (and to a degree Dr Fernando) which did impact upon her work performance and conduct in the context of a small workplace.

Section 387(b) – whether Ms Brodie was notified of the reasons for dismissal

[54] This consideration requires the Commission to assess whether the applicant concerned was relevantly notified of the reasons leading to the dismissal before that decision was taken.¹¹

[55] For reasons set out earlier, this was not done in a manner contemplated by this consideration.

Section 387(c) – whether Ms Brodie was given an opportunity to respond to any reason related to her capacity or conduct

[56] The process contemplated by the Act does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly. This question becomes whether Ms Brodie was aware of the precise nature of the employer’s concern about her conduct and had a reasonable opportunity to respond to these concerns.¹²

[57] I accept that BMC raised some of its concerns indirectly and in an obtuse fashion. It is however evident that there was no genuine opportunity to respond to those concerns in the context of a potential dismissal.

Section 387(d) – any unreasonable refusal by the respondent to allow Ms Brodie a support person

[58] There was no request for a support person and accordingly this consideration is not relevant.

Section 387(e) – if the dismissal is related to unsatisfactory performance by Ms Brodie – whether she has been warned about that unsatisfactory performance before the dismissal.

[59] This consideration relates to performance of the job. Performance in this context includes the employee’s capacity to do the work, and the diligence and care taken with that work.¹³

[60] For reasons set out earlier, I do not consider that Ms Brodie was warned about her work performance in a manner contemplated by this consideration.

Section 387(f) – the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.

Section 387(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.

[61] Burra Medical Centre is a small business and does not have any dedicated human resource expertise and this would have impacted upon how the issues leading to the dismissal were handled.

[62] This is a factor to be taken into account and in assessing the overall fairness of the dismissal some meaningful allowance for the manner and procedures adopted is to be made.

Section 387(h) - other matters considered to be relevant

[63] I will consider the events following the dismissal later in this decision. They are not presently relevant to the assessment of the dismissal itself.

[64] In Parmalat Food Products Pty Ltd v Mr Kasian Wililo,¹⁴ the Full Bench observed:

“[24] ... ... The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.”

[65] In this case there was no misconduct but I have found that a valid reason for dismissal has been demonstrated by BMC.

[66] Amongst other considerations, the Commission should consider the impact of the dismissal upon the applicant given all of the circumstances. This includes consideration as to whether the dismissal was harsh in the sense that it was disproportionate to any actual conduct found by the Commission¹⁵ and I have considered this in reaching my final conclusions.

Conclusion on nature of dismissal

[67] As outlined earlier, the FW Act requires a global assessment having regard to the various relevant statutory considerations. In that context, procedural unfairness is an important consideration given the provisions of the Act but does not necessarily mean that the dismissal was unfair. This is reinforced by the objects relating to Part 3-2 Unfair Dismissal of the FW Act in s.381 which relevantly provides as follows:

“381 Object of the Part

… …

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”

[68] As revealed in various decisions of the Commission (and the Court), each case must be considered in its own circumstances and it is appropriate, amongst other factors, to have regard to whether the procedural deficiencies made any difference to the outcome.¹⁶

[69] Without repeating the discussions of the relevant considerations set out above, I have taken into account the valid reason for dismissal in the context of an almost complete absence of procedural fairness. Even taking into account the circumstances of the employer, the absence of a genuine warning and opportunity to improve Ms Brodie’s work performance and to make a response to the issues now relied upon was unreasonable and did impact upon the fairness of the dismissal. The receipt of the letter of dismissal, out of the blue and without any of the context contemplated by the statutory considerations, was also unfair. The offer to pay the four weeks’ notice as an ex-gratia payment is a mitigating factor, but does not fully address the unfairness of the dismissal.

[70] In all of the circumstances, I am satisfied that the dismissal of Ms Brodie was unjust and unreasonable.

5. Remedy

[71] Division 4 of Part 3-2 of the FW Act relevantly provides as follows:

“Division 4—Remedies for unfair dismissal

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) the FWC may make the order only if the person has made an application under section 394.

(3) the FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

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

Note: Division 5 deals with procedural matters such as applications for remedies.

...

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.¹⁷

(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.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[72] The prerequisites of ss.390(1) and (2) have been met in this case.

[73] Section 390 makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. Ms Brodie does not seek reinstatement and given all of the prevailing circumstances and my findings I accept that reinstatement would be inappropriate.

[74] As a result, I need to consider whether compensation is appropriate, and if so, to what extent.

[75] A recent Full Bench in McCulloch v Calvary Health Care Adelaide¹⁸ (McCulloch) confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg¹⁹ remains appropriate in that regard.

[76] Section 392(2) of the Act requires me to take into account all of the circumstances of the case including the factors that are listed in paras (a) to (g). Without detracting from the overall assessment required by the Act,²⁰ it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.

The effect of the order on the viability of Burra Medical Centre

[77] Nothing has been put to the Commission specifically about this issue. I accept that BMC is a small business and that a large order for compensation may have an impact. However, the extent of compensation that is appropriate in this matter would not impact upon the viability of the business.

The length of Ms Brodie’s service with Burra Medical Centre

[78] Ms Brodie had significant service with BMC and this is a consideration supporting an award of compensation.

The remuneration Ms Brodie would have received, or would have been likely to receive, if she had not been dismissed

[79] This involves in part a consideration of the likely duration of Ms Brodie’s employment in the absence of what I have found to be an unfair dismissal.

[80] The Full Bench in McCulloch also confirmed that when assessing likely lost remuneration, cogent evidence was required for any assumption that a short period of likely future employment would have occurred where the Commission had not found a valid reason for dismissal.²¹

[81] I have found that a valid reason for dismissal was present and that the unfairness largely arose from the almost complete absence of procedural fairness. There was also considerable mutual unease in the employment relationship and this factor must also be taken into account.

[82] In these circumstances, I consider that the employment relationship would not have continued for a period any longer than six weeks. That is, the remuneration that Ms Brodie would have been likely to receive would have been six weeks, including any notice period, based upon her average hours.

[83] The parties agreed that the average hours per week were between 30 and 35 and a figure of 33 hours was used in the payment made upon termination. 22 Using that figure and Ms Brodie’s hourly rate of pay of $22.00 produces a lost remuneration figure of $4,356.00.

The efforts of Ms Brodie to mitigate the loss suffered by him because of the dismissal

[84] Ms Brodie actively, and successfully, sought alternative employment shortly after her dismissal.

[85] No discount on the amount of compensation is appropriate as a result of this consideration.

The amount of any remuneration earned by Ms Brodie from employment or other work during the period between the dismissal and the making of the order for compensation

The amount of any income reasonably likely to be so earned by Ms Brodie during the period between the making of the order for compensation and the actual compensation

[86] The evidence reveals that Ms Brodie commenced alternative employment some four or five weeks after her dismissal. This employment initially involved a few days per week and whilst it remains fluid, the work has grown to three, four and sometimes five days per week. 23

[87] In light of s.382(e) of the FW Act, it is appropriate in this case to take into account any earnings that Ms Brodie has received from employment or other work in the period covered by the projected remuneration period of six weeks. This includes the four weeks’ pay in lieu of notice provided by BMC. Those four weeks amounts to $2,904. This should also include deducting the earnings from the alternative employment received in relation to projected lso remuneration period; being six weeks from the actual termination.

[88] During the hearing, Ms Brodie indicated that she would supply the payslips for the new employment however this has not yet been done. This means that I cannot determine an actual final figure for the compensation however I have taken this element into account in forming the orders in this matter.

Any other matter that the FWC considers relevant and the remaining statutory parameters

[89] In some circumstances I would take into account the fact that Ms Brodie did not immediately return the keys to BMC when requested to do so. In this case, the return of the keys was conflated by BMC with the offer to pay in lieu of notice and the proposed deed of release that was to be signed.

[90] There is no demonstrated misconduct that is appropriate to take into account as provided by s.392(3) of the Act.

[91] In accordance with s.392(4) of the Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal.

[92] The amount of compensation that I have determined is far less than the maximum prescribed by s.392(5) of the Act as applied in this matter.²⁴

[93] The figures used for the calculation are expressed in gross terms and appropriate taxation is to be deducted from the final amount of compensation.

[94] The compensation amount confirmed below is also appropriate having regard to all of the particular circumstances of this matter and the Commission’s statutory charter to ensure that a “fair go all round” is accorded to both the employer and employee concerned. ²⁵

Conclusions on remedy

[95] After taking into account each of the relevant considerations, I find that compensation in lieu of reinstatement is appropriate in this matter. Further, I find that the compensation should be assessed having regard to the factors outlined above.

[96] Accordingly, I find that compensation should comprise a payment by BMC to Ms Brodie calculated as follow:

Projected lost remuneration $4,356.00.

Less four weeks pay in lieu of notice ($2,904.00)

Less income earned from the applicant’s new employment

prior to 26 June 2015 (if any)

[97] This means that the amount of compensation payable (in gross terms) will be $1,452.00 less any income earned from the applicant’s new employment prior to 26 June 2015.

6. Conclusions and orders

[98] I find that Ms Brodie’s dismissal was unfair within the meaning of the FW Act.

[99] I have found that compensation is appropriate and the amount determined above is also appropriate in all of the circumstances.

[100] The payment of the compensation amount as finally derived, less any required deduction of taxation, is to be made to Ms Brodie by Lakman Fernando Investments Pty Ltd T/A Burra Medical Centre within 21 days of this decision.

[101] Ms Brodie is also required to provide to BMC within 7 days of the decision, any pay slips associated with her new employment for the period up to and including 26 June 2015.

[102] An order²⁶ to that end has been issued in conjunction with this decision.

[103] Liberty is granted to seek a further order of the Commission if the parties are unable to resolve the final amount of compensation in light of the remuneration obtained from the new employment. This includes where Ms Brodie is unable, for some reason, to supply the pay slips required by this decision.

COMMISSIONER

Appearances:

Ms S Brodie, the applicant in person.

Dr L Fernando for Lakman Fernando Investments Pty Ltd T/A Burra Medical Centre.

Hearing details:

2015:

Clare

20 November.

 1 BMC employed less than 15 employees – see s.23 of the FW Act.

 2   The alleged underpayment of wages is not a matter for the Commission.

 3   This was done in a manner consistent with the statutory charter of the Fair Work Commission. See the discussion of some of the relevant considerations for a similar Tribunal in Minogue v HREOC [1999] FCA 85.

 4   See Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services[2015] FWCFB 5264 for a discussion of the relevant requirements.

 5   Transcript - PN506 and PN836.

6 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation, (2004) 133 IR 458 per Ross VP, Williams SDP, Foggo C and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C at par [36].

7 See Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; King v Freshmore (Vic) Pty Ltd AIRCFB Print S4213 per Ross VP, Williams SDP, Hingley C, 17 March 2000; Edwards v Giudice (1999) 94 FCR 561; Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Rode v Burwood Mitsubishi AIRCFB Print R4471 per Ross VP, Polites SDP, Foggo C, 11 May 1999.

8 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 373, 377‒378; Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1, 14. See also Dundovich v P & O Ports AIRC PR923358 8 October 2002, per Ross VP, Hamilton DP, Eames C at [79]; Lane v Arrowcrest (1990) 27 FCR 427, 456; cited with approval in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410, 467 and 468.

 9   Transcript PN289 and PN484 and PN814.

 10   Transcript PN327 – PN340.

11 See Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160.

12 RMIT v Asher (2010) 194 IR 1. See also Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [75].

13 See Anetta v Ansett Australia Ltd (2000) 98 IR 233.

14 [2011] FWAFB 1166.

15 Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.

16 See Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Villani v Holcim (Australia) Pty Ltd [2011] FCAFC 155 as examples.

¹⁷ Note: the subsection 392(5) amount was indexed to $133,000 from 1 July 2014 - as was relevant given the timing of this application.

18 [2015] FWCFB 873.

19 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21. See also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge[2013] FWCFB 431.

20 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446.

21 McCulloch at [27].

 22   Attachment 5 to the Statement of Dr Fernando – exhibit R1.

 23   Transcript – PN82 to PN88.

24 The maximum compensation limit in this case would be the lesser of 26 weeks remuneration or $66,500.

25 Section 381(2) of the FW Act. See also Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at par [32].

26 PR575958.

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