Sheridan Kisvarda v Brazilian Butterfly St Kilda T/A Brazilian Butterfly St Kilda

[2020] FWC 4223

[2020] FWC 4223

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Sheridan Kisvarda
v
Brazilian Butterfly St Kilda T/A Brazilian Butterfly St Kilda
(U2020/7430)

COMMISSIONER BISSETT MELBOURNE, 13 AUGUST 2020

Application for an unfair dismissal remedy.

[1] Ms Sheridan Kisvarda (Applicant) has made an application to the Fair Work Commission seeking relief from unfair dismissal. The Applicant was employed by Brazilian Butterfly St Kilda (Respondent). She last worked for the Respondent in late March 2020 when the Respondent closed down as part of the COVID-19 restrictions.

[2] The Applicant says that her employment was terminated on 19 May 2020 and she made her application for relief from unfair dismissal on 22 May 2020.

[3] The Respondent has raised a jurisdictional objection to the application on the grounds that the Applicant’s employment has not been terminated on the initiative of the employer. The Respondent submits that all that has happened is it has communicated with the Applicant about what it sees as a breach by the Applicant of the restraint of trade provisions in her employment contract.

The matters to decide

[4] Having heard from the Applicant and Ms Marsh of the Respondent it is apparent that the decisions that I need to make are:

(a) Was the Applicant dismissed within the meaning of the Fair Work Act 2009 (FW Act);

(b) If the answer is yes, what was the date of dismissal;

(c) Given the date of dismissal, was the application made within time;

(d) If the answer to that question is no, should an extension of time be granted.

[5] I deal with each of these issues to the extent necessary. Suffice it to say that if the answer to the first question is “no”, there is no need to consider any further matters.

Background

[6] The history of the circumstances that led to the application are not, in themselves, contentious although what should be drawn from them is in dispute.

[7] The Applicant commenced working for the Respondent at the St Kilda salon in October 2019. The Applicant is a regular and systematic casual employee working 30 hours per week.

[8] In around June 2019 Ms Marsh spoke to the Applicant about whether she was operating a business undertaking work of a similar nature to that she did for the Respondent, from her home. The Applicant advised that she was not doing such work. This explanation satisfied the Respondent.

[9] On 22 March 2020 the Applicant spoke to Ms Marsh about guaranteeing her weekly hours. The following day the Applicant apparently said that if her hours could not be guaranteed she would rather lodge a Jobseeker application with Centrelink

[10] On 23 March 2020 the Respondent emailed to Applicant a separation certificate. The separation certificate states it was signed on 24 March 2020 but Ms Marsh indicated that it was emailed on 23 March 2020.

[11] On 24 March 2020 the Government announced that beauty salons would have to close as part of the COVID-19 restrictions.

[12] Ms Marsh advised staff via the Respondent’s WhatsApp group on 27 March 2020 that separation certificates had been emailed to them. She said the Applicant was not included in this as she had received her separation certificate earlier. Ms Marsh said did not consider the provision of the separation certificates as a termination of employment of the employees concerned but rather to assist them in accessing government benefits (Jobseeker).

[13] On 3 April 2020 Ms Marsh had a catch up call with the Applicant with respect to general wellbeing (as she also did with her other employees).

[14] On 11 April 2020 the Applicant asked Ms Marsh if anyone would be at the salon that day as she would like to pick up some product. Ms Marsh advised the Applicant that she could go to the Port Melbourne salon the next day as someone would be there. The Applicant did not respond to this text so Ms Marsh followed up with her on 13 April 2020.

[15] The Respondent advised all staff that the business was not in a position to sign up for Jobkeeper as, to do so, the business would have to have a money up front that it did not have. Ms Marsh explained this to each of her staff who would otherwise be eligible for Jobkeeper. Ms Marsh said the Applicant “took offence” that the Respondent would not sign up to Jobkeeper and indicated that Jobkeeper was her right and entitlement. The Applicant said that she pressed the issue as she was keen to secure Jobkeeper as it would provide her with better security of income.

[16] Ms Marsh said that on 28 April 2020 she was advised by another employee that the Applicant was actively promoting her own home based beauty business (located 2.2km away from the St Kilda salon location) on Instagram (called STK Beauty).

[17] The Applicant says that on 7 May 2020 she removed herself from the Respondent’s WhatsApp group because she did not consider material being posted relevant and it was affecting her mental health.

[18] On the same day the Respondent says that the Applicant posted on Instagram promoting her “Superlux Hair removal IPL” machine for her home business. Ms Marsh said that this is the same machine the Applicant used at the St Kilda salon. The Instagram post also indicated that the Applicant would commence taking bookings as soon as her business re-opened following the COVID-19 forced closure.

[19] Following the Instagram post Ms Marsh sought legal advice as she considered the Applicant had breached the restraint of trade provisions in her employment contract with the Respondent. Arising from this on 19 May 2020 the Respondent’s lawyers wrote to the Applicant in relation to her apparent breach of the restraint of trade provision of her contract caused by her running a business from her home. That letter sought that the Applicant:

•  Cease trading from her home or any other premises within the restraint area;

•  Cease doing work for any client of the Respondent with whom the Applicant had worked in the previous 12 months and not work with such clients for a further 12 months; and

•  Respond to the letter within 10 days.

[20] The Applicant said that on 8 May 2020 she had an exchange with Ms Marsh in relation to where some cash associated with a sale in January 2020 had been placed.

[21] The Applicant said that on 25 May 2020 she became aware that her colleagues had received information from the Respondent in relation to potential re-opening of the salon but that she had not. She was advised a letter had been sent to her by email. She found the letter in her junk folder in her email account.

[22] The Applicant had her lawyer respond to the letter from the Respondent’s lawyers. The response does not appear to deny that the Applicant was operating a beauty salon from her home, rather it sought to challenge the geographic area of the restraint clause.

[23] The Applicant said that on 25 May 2020 she considered her employment had been terminated as she was not offered any further shifts.

[24] The Respondent says that it did not terminate the Applicant’s employment but that the Applicant had breached her employment contract. Ms Marsh said that it would not be in the Respondent’s own the interests to terminate the Applicant’s employment as the Applicant provided specialised services that attracted a higher fee from clients and that no one else employed by the Respondent in the St Kilda salon could provide that service.

[25] The Respondent agrees that she advertised to fill the Applicant’s position but said this was in late May 2020 and she advertised more than one position.

[26] The Respondent submits that if its submissions as to termination of employment are not accepted it considers that Applicant’s employment to have been terminated on 28 April 2020 when she discovered the Applicant running a business from home in breach of her contract.

[27] The Applicant agreed that she did have her own business which she advertised on Instagram. She said she did not actively promote her business although she did provide services to family and friends. She said that she purchased the IPL machine as she was able to get it at a very good price.

[28] The Applicant did not agree to “cease and desist” her business as sought by the Respondent through its lawyers as she did plan on developing her own business. She said that she had not taken any clients from the Respondent.

Was the Applicant dismissed

[29] Section 386 of the FW Act defines when an employee is dismissed such that they are eligible to make an application for unfair dismissal. Section 386 states:

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.

[30] To determine if the Applicant was dismissed it is necessary to determine if either s.386(1)(a) or (b) apply.

(a) was the employment terminated at the employer’s initiative

[31] The evidence before the Commission does not establish that the Respondent has taken any action to dismiss the Applicant.

[32] Any action to terminate employment by the Respondent must be objectively assessed. In this case there is no letter of dismissal (even though the Applicant says she requested one), no words said to the Applicant that might indicate she should not return to work nor any other actions by the Respondent that might indicate that the employment relationship was at an end at the initiative of the employer.

[33] The letter from the lawyers for the Respondent to the Applicant in relation to the breach of the restraint of trade provisions of the employment contract does not indicate that the Respondent was terminating the employment contract. That letter expressly reserved the rights of the Respondent to take future action to protect its interests but does not expressly or by implication seek to terminate the Applicant’s contract or employment.

[34] Nothing in that correspondence suggests that the Respondent intended to dismiss the Applicant from her employment. What the Respondent sought was that the Applicant not breach the restraint of trade provisions in her contract and sought a commitment to this effect, a commitment the Applicant did not give.

[35] The evidence produced by the Respondent suggests that the Applicant was actively promoting her own business – STK Beauty – through her Instagram page. The evidence suggests that the Applicant was looking to take bookings once the restrictions due to COVID-19 in Melbourne were lifted. Whilst the Applicant said she did work for friends and family it is not clear why she would need to take “bookings” for such a purpose. The concern of the Respondent was reasoned in this respect.

[36] The evidence suggests that the Applicant did not consider that the letter with respect to restraint of trade was a termination of her employment. On 24 and 25 May 2020 she texted Ms Marsh with respect to shifts when the first COVID-19 restrictions were lifted. Ms Marsh referred to Applicant to the restraint of trade letter. The Applicant responded to the particular lawyer (Mr Harvey Bowlt) who had signed and sent the restraint of trade letter on 25 May 2020 and said:

Hi Harvey

I am confirming that I have just received your below email. Can you please forward a letter of my termination.

Kind regards

Sheridan

[37] This email supports a conclusion that the Applicant did not consider the restraint of trade letter a termination of the employment contract or of her employment. If she did she would not have needed a “letter of termination”. There is no evidence, and it is not claimed, that any letter of termination was provided as a result of this email from the Applicant.

[38] In reaching my conclusion I have also taken into account the evidence of Ms Marsh that she did not terminate the Applicant’s employment and did not wish to do so as the particular skills of the Applicant and work performed by her resulted in greater income to the Respondent. I would also observe that this was not the first time the Applicant’s home business was raised with her. When it was raised in 2019 the Applicant did not apparently take this as an indication of termination of her employment. Why she should choose to do so now is not apparent.

[39] For these reasons I do not consider that the Applicant’s employment was terminated at the initiative of the employer.

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

[40] There is no evidence that the Applicant has resigned her employment. She maintains that her employment was terminated at the initiative of the Respondent but, as I have found above, this was not the case.

Conclusion

[41] In all of the circumstances I am not convinced that the Applicant has been dismissed within the meaning of the FW Act.

[42] The Applicant has received a letter with respect to restraint of trade. She has failed to respond to the request that she “cease and desist” because, as she said, she does plan on developing her own business.

[43] On receipt of the restraint of trade letter and prior to a response to her request for a “letter of termination” the Applicant completed and signed an application for unfair dismissal (Form F2) although, according to Commission records, did not file that with the Commission until 29 May 2020.

[44] It may be that the relationship between the Applicant and Respondent would have been more clearly defined had Melbourne not been placed in a further shutdown in July 2020 caused by COVID-19. However, this does provide an opportunity to the Applicant to consider if she intends to return to work for the Respondent.

[45] If it is that the Respondent does not seek to terminate the Applicant’s employment the Respondent must engage with the Applicant and roster her when current restrictions are lifted and correspond with her in relation to future shifts. The Applicant, at the same time, must ensure she is engaged on whatever platform is used by the Respondent to advise of shifts. On this I would note that the memes on the Respondent’s WhatsApp group are not at all amusing and may be considered offensive. The Respondent should take care not to be seen to be condoning inappropriate comments/memes of its staff.

[46] Having determined that the Applicant was not dismissed it is not necessary to consider if the application has been made out of time.

[47] For all of these reasons the application is dismissed.

[48] An order 1 to this effect will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

S. Kisvarda on her own behalf.

D. Marsh for the Respondent.

Hearing details:

2020.
Melbourne by video conference.
August 7.

Printed by authority of the Commonwealth Government Printer

<PR721741>

 1   PR721743.