Stephanie Palmer v Ao Tong Bao Pty Ltd T/A Sandwich Style
[2017] FWC 2401
•19 JUNE 2017
| [2017] FWC 2401 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Stephanie Palmer
v
AO Tong Bao Pty Ltd T/A Sandwich Style
(U2017/1271)
COMMISSIONER HAMPTON | ADELAIDE, 19 JUNE 2017 |
Application for relief from alleged unfair dismissal – dismissal based upon alleged poor work performance and attitude – whether applicant protected from unfair dismissal – found casual employee with sufficient eligible service – small business – whether complied with small business fair dismissal code – no warning issued – code not followed – whether dismissal unfair – whether valid reasons – dismissal unjust and unreasonable – remedy – compensation determined and ordered.
1. Background and case outline
[1] Ms Stephanie Palmer 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, AO Tong Bao Pty Ltd T/A Sandwich Style (Sandwich Style).
[2] Sandwich Style is a small food court sandwich shop located in a large shopping centre in the northern suburbs of Adelaide where Ms Palmer worked in customer service.
[3] Ms Palmer commenced her employment at Sandwich Style, on a less than full-time basis, in November 2015 and was verbally dismissed on 24 January 2017 on the grounds of alleged poor work performance. Ms Palmer did not receive any payment in lieu of notice.
[4] Ms Palmer submits that on 23 January 2017 she attended work as usual and was serving a customer when she was told by her then employer to “go home”. This occurred approximately half an hour into Ms Palmer’s shift. Ms Palmer left the respondent’s premises and returned the following day to collect her pay and find out when she was next rostered to work. Ms Palmer submits that she was told not to return because “you don’t understand my ideas”. Ms Palmer took this to mean that she was dismissed from her employment.
[5] Ms Palmer contends, in effect, that she was dismissed unfairly as a result of being verbally dismissed without any valid reasons, prior warning or discussions. Ms Palmer submits, that she had not had any issues regarding her employment, until the day she was dismissed, including that she had never received a prior warning or been subject to any disciplinary action.
[6] Ms Palmer seeks compensation of $2,000, equating to approximately eight weeks’ wages, for her lost income following the dismissal.
[7] Ms Palmer provided a witness statement and gave sworn evidence.
[8] Sandwich Style contends, in effect, that Ms Palmer was dismissed on the basis that she was not an efficient worker and, consequently, did not provide adequate customer service. Further, Sandwich Style submits that on or around 23 January 2017, Ms Palmer was involved in an incident where she was distracted and laughing with another employee and failed to serve a customer.
[9] The respondent also contends, in effect, that it operated a “three strikes” policy that meant employees would receive two warnings and on the third time, be dismissed. It submits that Ms Palmer had received at least two warnings prior to 23 January 2017 and this final incident resulted in her dismissal.
[10] Mr Teng, owner of Sandwich Style, attended and gave sworn evidence on behalf of the respondent.
[11] During the course of dealing with the application two issues arose that potentially involve the Commission’s jurisdiction to determine this matter. Firstly, the employment status of Ms Palmer and in particular, whether she was a casual employee with sufficient eligible service to be protected from unfair dismissal and as a result, whether she was able to bring this application. Secondly, whether the employer had complied with the Small Business Fair Dismissal Code (the Code) established under s.388 of the FW Act. I also note that although there was at some points the suggestion by the respondent that Ms Palmer (as a casual employee) was not dismissed, it became evident that this was not seriously in dispute and the evidence supports the notion that a dismissal at the initiative of the employer took place within the meaning of s.386 of the FW Act.
[12] Having identified these matters, the parties were given an opportunity to provide evidence and submissions relevant to these jurisdictional matters and I have considered and determined these as preliminary issues before dealing with the application more generally. This decision deals with all of these matters.
[13] Both parties represented themselves in this matter. Mr Teng does not speak English as a first language and was assisted in the preliminary proceedings by an Interpreter arranged by the Commission and he also had access to a person who could translate the spoken and written communications from the Commission and Ms Palmer.
[14] The application was subject to a hearing in the form of a determinative conference following consultation with the parties as contemplated by s.399 of the FW Act. 1 An Interpreter was also present during the conference to assist Mr Teng and the Commission, and all communications during the conference were interpreted to and from Mandarin.
[15] The determinative conference was conducted in a largely inquisitorial manner. Given the absence of external representation for either party, appropriate assistance and latitude was provided to facilitate the presentation of each case. 2 This included assisting each of the witnesses to confirm their primary written evidence (where such was provided) and, in the interests of fairness, having the parties sworn concurrently. However, the parties retained full responsibility for the conduct of their cases and the provision of relevant evidence to the Commission.
[16] The respondent did not provide any written materials prior to the determinative conference, despite directions requiring that this occur. For that reason, when a dispute emerged as to the number and nature of hours worked by Ms Palmer, the respondent was directed to subsequently supply a copy of the relevant time and wages records. 3 Both parties were given an opportunity to provide additional submissions in light of that material.
[17] In considering the evidence given in this matter, I found that Ms Palmer gave her evidence confidently and openly and I accept it. I also consider that Mr Teng was an honest witness however the absence of details about what occurred and when lead me to treat some of that evidence with caution where there is a direct factual conflict.
2. The general context in which the employment and dismissal occurred
[18] Before dealing with the key factual disputes, the jurisdictional issue and the relevant statutory considerations more generally, it is appropriate to set out the general context in which the relevant events took place.
[19] The respondent is a small sandwich shop that has at times struggled to operate profitably. At the time of the dismissal, Sandwich Style employed approximately four employees, largely engaged on a casual basis.
[20] Sandwich Style is open seven days per week, trading largely between 9.00 am and 5.30 pm, allowing for “late night” shopping on Thursdays and an earlier close on Sundays. Mr Teng works most of these trading hours, with assistance from his wife, son and daughter.
[21] Mr Teng speaks very little English and communicates with his staff through small English phrases he has learnt such as “be careful” or “quickly” or by having one of the Mandarin speaking employees translate (often but not always a family member). Only Mr Teng and other family members were able to give formal instructions in the workplace however one of the employees was considered to be more senior and had a leadership role to some extent.
[22] Mr Teng contends that he operates Sandwich Style subject to what he sees as a policy similar to that used in large commercial fast food franchises where an employee will generally receive three warnings before being dismissed. However, there is no apparent record of any such warnings and very little by way of employment records other than basic time and wages materials.
[23] Ms Palmer commenced employment in November 2015, working approximately 12-15 hours per week. At that time, she was 18 years of age. Ms Palmer’s shifts were generally between 11.30 am and 2.30 pm, covering the “lunch period”. At some stage in August 2016, the applicant’s hours dropped to six hours per week. Ms Palmer submits this decrease in hours was in response to a query she raised regarding her hourly rate for a particular day. 4 The respondent contends that it decreased Ms Palmer’s hours, in effect, to indicate that she was not a skilled worker.5
[24] Ms Palmer’s hours subsequently increased again in October 2016. The applicant contends this was a result of another employee being dismissed. 6 Sandwich Style submits that the increase was because Ms Palmer had advised it that she had finished school and was available to work more hours and further, that Mr Teng’s wife was in China and more hours were available.7
[25] Ultimately, it is not necessary to determine the precise factual context surrounding the reduction in Ms Palmer’s hours. Both parties accept that in the initial stages of Ms Palmer’s employment, she was working 12 to 15 hours per week and that these hours decreased for a period in August 2016 but ultimately returned to 12 to 15 hours per week in early October 2016. This is generally confirmed in the time and wages records supplied by Sandwich Style.
[26] At the time of her dismissal, Ms Palmer was paid $17.10 per hour.
3. Is Ms Palmer eligible to bring an unfair dismissal application?
[27] Although not raised directly by Sandwich Style, at the hearing of this matter, the respondent indicated in effect that it had some concerns regarding whether Ms Palmer was protected from unfair dismissal within the meaning of s.382 of the FW Act and therefore eligible to bring her application.
[28] In that regard, the FW Act provides as follows:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
383 Meaning of minimum employment period
The minimum employment period is:
(a) if the employer is not a small business employer–6 months ending at the earlier of the following times:
(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or
(b) if the employer is a small business employer–one year ending at that time.
384 Period of employment
(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.
(2) However:
(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:
(i) the employment as a casual employee was on a regular and systematic basis; and
(ii) during the period of service as a casual employee, the employee has a reasonable expectation of continuing employment by the employer on a regular and systematic basis…”
[29] It has been accepted by both parties that Ms Palmer had, at the time of her dismissal, been employed for a period in excess of the relevant minimum employment period required under the FW Act for a small business; that is, she had at least 12 months of “service”.
[30] Sandwich Style contends, in effect, that Ms Palmer was a casual employee whose engagement cannot be described as being regular and systematic and that she could not have had a reasonable expectation of continuing employment and therefore her application should be dismissed.
[31] Ms Palmer submits, in effect, that she was employed on a part-time basis and therefore the regular and systematic consideration does not arise. Ms Palmer’s evidence was that although her employment classification was never directly discussed, she considered herself to be a part-time employee as she was working approximately 15 hours per week for a large period of her employment. 8
[32] Ms Palmer gave evidence that she did not receive any paid entitlements indicative of part-time employment, such as sick leave or annual leave, and was not paid for those days on which she was rostered to work but was unable to attend. 9
[33] I accept that the characterisation of her employment was never directly discussed between the parties and that Ms Palmer held a genuine belief that the hours she was working made her, in effect, a part time employee. However, on the evidence before the Commission, I consider that Ms Palmer was engaged as a casual employee.
[34] The question then becomes whether Ms Palmer’s employment was on a regular and systematic basis and if so, whether she had a reasonable expectation of continuing that employment on a regular and systematic basis.
[35] In assessing whether the engagement has been “regular and systematic”, the Commission must consider the frequency of the work, the number of hours worked and the type of work. In Yaraka Holdings Pty Ltd v Giljevic 10, it was held:
“[68] The term “regular” should be construed liberally. It may be accepted, as the Magistrate did, that it is intended to imply some form of repetitive pattern rather than being used as a synonym for “frequent” or “often”. However, equally, it is not used in the section as a synonym for words such as “uniform” or “constant”.
… …
[69] …the concept of engagement on a systematic basis does not require the worker to be able to foresee or predict when his or her services may be required. It is sufficient that the pattern of engagement occurs as a consequence of an ongoing reliance upon the worker’s services as an incident of the business by which he or she is engaged.”
[36] This approach has been followed by the Commission in subsequent decisions. 11
[37] As outlined above, there is a dispute between the parties regarding the surrounding factual circumstances, however both parties accept in general terms that Ms Palmer’s working hours initially began around 15 hours per week, were subsequently reduced to six hours per week for a period and then increased again up until her dismissal.
[38] The time and wages records provided by the respondent support the contention that Ms Palmer’s hours did reduce for a period of about eight weeks from August 2016. It is also clear that although Ms Palmer’s number of shifts decreased, she consistently worked the “lunch period”, generally on Tuesdays, Fridays and (when her hours increased) Saturdays. I also accept the evidence of Ms Palmer that she knew, in general terms, when she would be working, and at the end of each shift would confirm her start time for the following shift.
[39] On the evidence before the Commission, I consider that Ms Palmer was employed on a regular and systematic basis and that she had a reasonable expectation of continuing employment by Sandwich Style on a regular and systematic basis. Given that the overall period of Ms Palmer’s employment was longer than the 12 months required in her circumstances, this means that Ms Palmer was protected from unfair dismissal within the meaning of s.382 of the FW Act and was eligible to bring this application.
3. Was the dismissal consistent with the Code?
[40] Sandwich Style is a Small Business within the meaning of the FW Act 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).
[41] 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.”
[42] This means that if Ms Palmer’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.
[43] 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.”
[44] 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.
[45] I do not understand that Sandwich Style 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. 12 I note, however, that there was no payment made in lieu of notice. Given that Ms Palmer was a casual employee nothing appears to flow from that fact.
[46] 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 as to whether:
● Sandwich Style gave Ms Palmer a reason why she was at risk of being dismissed;
● The reason was a valid reason based on Ms Palmer’s conduct or capacity to do the job;
● Ms Palmer had been warned verbally or preferably in writing, that she risked being dismissed if there was no improvement; and
● Sandwich Style provided Ms Palmer 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.
[47] I note that the “procedural matters” element of the Code did not arise in this case.
[48] Based upon the evidence before the Commission, I find as follows:
● On 23 January 2017 Ms Palmer attended Sandwich Style to begin her shift;
● During the first half an hour of that shift, Ms Palmer was assisting a new employee around the workplace and there may have been discussions that were not directly work related and this concerned Mr Teng;
● Mr Teng then spoke to Ms Palmer and told her to “go home”; and
● The following day Ms Palmer attended at the workplace to confirm her next shift and was verbally dismissed by Mr Teng.
[49] In addition to the events leading up to and including 23 January 2017, Sandwich Style contends that there were two basic concerns that also led to the dismissal of Ms Palmer. These involved an alleged inability to perform all of the duties within the shop, including the making of coffee. Further, what I understand to be an alleged inability to multi-task and to ensure that customers are always being served first even whilst other activities are being done.
[50] Mr Teng also raised certain issues about compliance with various policies and procedures but when pressed on these matters, he indicated that these were not concerns in relation to Ms Palmer’s work performance or conduct. 13 In addition, Mr Teng also made some reference to the fact that Ms Palmer had dermatitis and had to wear gloves. I did not understand that this was a reason for dismissal noting that if it was, serious issues would arise about whether such was an appropriate basis for any such action. I also note that Ms Palmer contends that this was a factor only in the early stages of her employment and was not an issue in the workplace.
[51] I do accept that there were some concerns about Ms Palmer’s work performance and I will return to these as part of my later consideration. However, there is no reliable evidence to suggest that these concerns were raised with Ms Palmer in a manner required by the Code or that the relevant opportunity to improve in that particular context was provided. In relation to the events of 23 January 2017, there were no discussions at all with Ms Palmer about the alleged conduct or any implications arising from that. Further, there is no reliable evidence that Ms Palmer was ever informed that she was at risk of being dismissed. Rather, the high point of the case for Sandwich Style was that Ms Palmer should have been aware of the employer’s concerns given that some performance issues had apparently been raised on earlier occasions. I will also return to this aspect in due course.
[52] I am not satisfied that the dismissal was consistent with the Code.
4. Was the dismissal unfair within the meaning of the Act?
[53] Given the above findings, I need to consider whether the dismissal of Ms Palmer was unfair.
[54] Section 387 of the FW 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.”
[55] It is clear that s.387 of the FW Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the FW Act sets out a number of considerations that must, where relevant, be weighed up in totality.
[56] 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 Palmer’s capacity or conduct (including its effect on the safety and welfare of other employees)
[57] 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.14
[58] 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.15 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.16
[59] I have therefore considered the various factors relied upon by Sandwich Style during the hearing as constituting the reasons for dismissal. These have been outlined in connection with my consideration of the Code. Ms Palmer rejected all of these concerns and contended that she was specifically engaged to work at the busiest times and this would not have been the case if she was inefficient or had poor customer service. Further, Ms Palmer contends that she was specifically requested to work with new staff and this was also evidence of the range of skills that she used.
[60] I consider that Mr Teng had genuine concerns about Ms Palmer’s capability regarding certain tasks and her ability to prioritise customer service. Although Mr Teng provided some examples, these were general in nature and there is very little detail about these concerns. There is also some contradictory circumstances, including those factors cited by Ms Palmer in response.
[61] Having considered all of the relevant circumstances based upon the findings of the Commission, whilst I accept that there were some concerns about Ms Palmer’s job performance, I am not persuaded that there was a valid reason for dismissal.
Section 387(b) – whether Ms Palmer was notified of the reasons for dismissal
[62] 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.17
[63] I accept that Mr Teng gave Ms Palmer occasional reminders in relation to her duties and service obligations in a general sense, but no more than would be typical as part of general dialogue in an employer/employee relationship. I am not satisfied that the reasons for dismissal were provided in a manner contemplated by this consideration.
Section 387(c) – whether Ms Palmer was given an opportunity to respond to any reason related to her capacity or conduct
[64] The process contemplated by the FW 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 Palmer was aware of the precise nature of the employer’s concern about her conduct and had a reasonable opportunity to respond to these concerns.18
[65] Sandwich Style submitted that Ms Palmer had received at least two warnings prior to her dismissal and it was therefore entitled to terminate her employment. In that regard, Mr Teng gave evidence that:
“According to this, I don't know what to say, but according to the Chinese custom, first time is a caution. Second time is a penalty. The third time would be a go. She should know this game. I think I did to get to know about her KFC and McDonalds, they have the same term and the same rule.” 19
[66] As discussed above, I accept that Mr Teng operated his business with the “rule” that employees were entitled to three warnings before being dismissed and that he considered that Ms Palmer should have been aware that her employment was at risk of being terminated as a result of previous “cautions”. However, on the evidence before the Commission, I cannot be satisfied that this was an actual workplace “policy” and there was almost no detail about how, when and by whom these warnings were given. I have found that Ms Palmer was not on notice that she was at risk of being dismissed if there was no improvement in her performance.
[67] I find, on the balance of probabilities, that Mr Teng did “caution” Ms Palmer at various times during her employment in relation to being careful and the need to maintain a steady pace in relation to serving customers.
[68] However, I consider that this was done in such a way that could only be regarded as a reminder to Ms Palmer as would be common from employer to employee. In that context, these comments cannot be considered plain or clear enough to amount to be a “warning” in the proper sense or to indicate to Ms Palmer that Mr Teng held concerns that would or could lead to dismissal.
Section 387(d) – any unreasonable refusal by the respondent to allow Ms Palmer a support person
[69] There was no meeting to discuss any concerns held by the employer and no request for a support person arose. Accordingly, this consideration is not relevant.
Section 387(e) – if the dismissal is related to unsatisfactory performance by Ms Palmer – whether she has been warned about that unsatisfactory performance before the dismissal.
[70] 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.20
[71] For reasons set out earlier, I do not consider that Ms Palmer 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.
[72] I deal with these two considerations together.
[73] Sandwich Style is a small business where an evident language barrier exists and does not have any dedicated human resource expertise. This would have impacted upon how the issues leading to the dismissal were handled.
[74] This is a factor to be taken into account and in assessing the overall fairness of the dismissal and I have made a meaningful allowance for the manner and procedures adopted by the employer.
Section 387(h) - other matters considered to be relevant
[75] In Parmalat Food Products Pty Ltd v Mr Kasian Wililo,21 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.”
[76] In this case there was no misconduct and I have found that a valid reason for dismissal has not been demonstrated by Sandwich Style.
[77] 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 Commission22 and I have considered this in reaching my final conclusions.
Conclusion on nature of dismissal
[78] 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 FW 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.”
[79] 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.23
[80] Even taking into account the circumstances of the employer, the absence of a genuine warning and opportunity to improve Ms Palmer’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 immediate dismissal, without the provision of reasons and an opportunity to respond, was also unfair.
[81] In all of the circumstances, I am satisfied that the dismissal of Ms Palmer was harsh, unjust and unreasonable.
5. Remedy
[82] 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.
...”
[83] The FW Act provides for compensation in the following terms.
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
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.”
[84] The prerequisites of ss.390(1) and (2) have been met in this case. 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 Palmer does not seek reinstatement and given all of the prevailing circumstances and my findings I accept that reinstatement would be inappropriate.
[85] As a result, I need to consider whether compensation is appropriate, and if so, to what extent.
[86] A Full Bench in McCulloch v Calvary Health Care Adelaide24 (McCulloch) confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg25 remains appropriate in that regard.
[87] Section 392(2) of the FW Act requires me to take into account all of the circumstances of the case including the factors that are listed in paragraphs (a) to (g). Without detracting from the overall assessment required by the FW Act,26 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 Sandwich Style
[88] Sandwich Style is a small business and Mr Teng gave evidence that it has struggled to operate profitably and has reduced its staffing since the dismissal of Ms Palmer due to trading conditions at the shopping centre where it operates. Although there is limited evidence to support any findings about the impact of any order upon the viability of the respondent, I accept that a large order for compensation may have an impact. The level of compensation that I have determined is unlikely to have any significant impact upon the business, particular as I have determined that it may be paid in instalments.
The length of Ms Palmer’s service with Sandwich Style
[89] Ms Palmer had just over 12 months service with Sandwich Style. This is not a long period of employment and is a factor to be taken into account in the assessment of the compensation.
The remuneration Ms Palmer would have received, or would have been likely to receive, if she had not been dismissed
[90] This involves in part a consideration of the likely duration of Ms Palmer’s employment in the absence of what I have found to be an unfair dismissal.
[91] 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.27
[92] I have found that a valid reason for dismissal was not present and the unfairness arose from this and an almost complete lack of procedural fairness. There were however some genuine concerns about the work performance of Ms Palmer and the nature and length of the casual employment are factors that weight against a long period of projected future employment. Further, the apparent state of the business is also a factor to be taken into account.
[93] In the circumstances I consider that the employment relationship would have continued for a period of up to eight weeks. This is the period initially proposed by Ms Palmer and although this was done on a slightly different basis, I consider it to be a reasonable period of projected employment in all of the circumstances.
[94] On the basis of the material provided to the Commission, Ms Palmer’s average hours of employment at the time of dismissal was in the order of 12 hours per week. 28 Using that figure and Ms Palmer’s hourly rate of pay of $17.10 produces a lost remuneration figure of $1,642.00.
The efforts of Ms Palmer to mitigate the loss suffered by him because of the dismissal.
[95] Ms Palmer actively, albeit unsuccessfully, sought alternative employment shortly after her dismissal. There is evidence to confirm that she has attempted to mitigate her losses.
[96] No discount on the amount of compensation is appropriate as a result of this consideration.
The amount of any remuneration earned by Ms Palmer 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 Palmer during the period between the making of the order for compensation and the actual compensation
[97] Ms Palmer has not received any employment related income since her dismissal and was not in employment at the time of the hearing of this matter.
Any other matter that the FWC considers relevant and the remaining statutory parameters
[98] There is no demonstrated misconduct that is appropriate to take into account as provided by s.392(3) of the FW Act.
[99] In accordance with s.392(4) of the FW Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal.
[100] As all of the projected period of employment, and the compensation contemplating losses in that context, has already occurred, I have made no specific allowance for future contingencies.
[101] The amount of compensation that I have determined is far less than the maximum prescribed by s.392(5) of the FW Act as applied in this matter.29
[102] The figures used for the calculation are expressed in gross terms and appropriate taxation is to be deducted from the final amount of compensation.
[103] 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. 30
[104] Section 393 of the FW Act expressly provides the capacity for a compensation order to be made by way of instalments. Given the circumstances of the business I propose to make provision for this to occur. This will involve the compensation being made in three equal instalments over a six week period. If the first instalment is not paid when due, the full compensation will become payable immediately.
[105] Finally, I have used the wage figure being paid to Ms Palmer at the time of her dismissal. This is the basis upon which she sought that any compensation be considered. I do note that depending upon her age and the hours and days of the week that she was working at the time as a casual employee, that wage rate may not have been sufficient to meet the employer’s obligations under the relevant modern award. That is, however, initially a matter for the applicant, and potentially for the Fair Work Ombudsman, to consider and I have not made any findings or taken this aspect into account in this decision.
Conclusions on remedy
[106] 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 and paid having regard to the factors outlined above.
6. Conclusions and orders
[107] I find that Ms Palmer was dismissed and that such dismissal was unfair within the meaning of the FW Act.
[108] I have found that compensation is appropriate and the amount determined above is also appropriate in all of the circumstances.
[109] The payment of the compensation amount, less any required deduction of taxation, is to be made to Ms Palmer by AO Tong Bao Pty Ltd T/A Sandwich Style in instalments commencing 7 days after this decision as confirmed in the order31 to be issued in conjunction with this decision.
COMMISSIONER
Appearances:
Ms S Palmer, on her own behalf.
Mr J Teng for AO Tong Bao Pty Ltd T/A Sandwich Style
Hearing details:
Determinative Conference:
2017
Adelaide
1 May.
1 The hearing was conducted with the assistance of a Mandarin interpreter arranged by the Commission.
2 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.
3 These covered the final six months of Ms Palmer’s employment and were provided by email on 8 and 11 May 2017.
4 Transcript at PN159 and PN222.
5 Transcript at PN187.
6 Transcript at PN159.
7 Transcript at PN188.
8 Transcript at PN159
9 Transcript at PN164.
10 (2006) 149 IR 399. This case considered the Workers Compensation Act 1951 (ACT) which requires the “engagement” be on a “regular and systematic basis” or “the individual had a reasonable expectation of the engagement continuing on a regular and systematic basis”. This is distinguishable from the present case because under the FW Act both of these matters are required to be established.
11 See Pang Enterprises Pty Ltd ATF Pang Family Trust T/A Bakers Delight Newport v Vicki Sawtell[2016] FWCFB 4438, Ponce v DJT Staff Management Services Pty Ltd T/A Daly's Traffic [2010] FWA 2078.
12 See Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services[2015] FWCFB 5264 for a discussion of the relevant requirements.
13 Transcript at PN199.
14 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].
15 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.
16 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.
17 See Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160.
18 RMIT v Asher (2010) 194 IR 1. See also Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [75].
19 Transcript at PN215.
20 See Anetta v Ansett Australia Ltd (2000) 98 IR 233.
21 [2011] FWAFB 1166.
22 Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.
23 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.
24 [2015] FWCFB 873.
25 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.
26 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446.
27 McCulloch at [27].
28 This figure is based upon the last 11 weeks of Ms Palmer’s employment.
29 The maximum compensation limit in this case would be the lesser of 26 weeks remuneration or $69,450.
30 Section 381(2) of the FW Act. See also Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at par [32].
31 PR592569.
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