Terry Forster v Saleh Enterprises Pty Ltd & Vancard Pty Ltd T/A Four in Hand Hotel

[2013] FWC 5264

[2013] FWC 5264

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Terry Forster
v
Saleh Enterprises Pty Ltd & Vancard Pty Ltd T/A Four In Hand Hotel
(U2013/6167)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 2 AUGUST 2013

Application for Relief of Unfair Dismissal.

Introduction

[1] On 5 February 2013, an application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal was lodged by Terry Forster (the Applicant).

[2] The matter was the subject of conciliation on 4 April 2013 and was not resolved. A programming hearing by teleconference took place on 27 June.

[3] At the hearing on 2 July the Applicant represented himself, although he was assisted by a support person, Mr S. Turner who undertook the cross-examination of the Respondent’s witnesses. Saleh Enterprises Pty Ltd & Vancard Pty Ltd T/A Four In Hand Hotel (the Respondent) was represented by Mr P. Bard who is a solicitor but is also the sole director and dominant financial person behind the respondent employer company. The facts related to the restaurant within the Four in Hand Hotel in Paddington, Sydney which is a recipient of “two chef hats” in the Sydney Morning Herald, Good Food Guide.

[4] The Applicant filed a written submission in the Fair Work Commission (the Commission) on 27 May 2013. The Respondent filed written submissions in the Commission on 17 June 2013.

[5] The Applicant was the only witness on his behalf. The Respondent lodged witness statements and called five witnesses, all staff of the hotel/restaurant.

[6] The application of s.596 of the Act was dealt with as a preliminary matter. Mr Bard submitted that as a result of s.596(4) he, being “an employee or officer of the person”, was not taken to be a lawyer representing the person. The Applicant did not oppose Mr Bard’s appearance.

[7] To avoid doubt, I granted Mr Bard permission to appear pursuant to s.596(1). It seems to me that s.596(4) does apply. In any event, I was of the view that the interests of fairness and the expeditious hearing of the matter would require Mr Bard to be given permission to appear.

Background

[8] The Applicant worked as a waiter at the Four In Hand from June 2011 until his dismissal on 2 February 2013.

[9] The Applicant submits that he was unfairly dismissed, that no reasons were given and that he was not given an opportunity to respond.

[10] The incident that led to the dismissal occurred on the evening of Friday, 1 February 2013 and involved a suckling pig prepared for a private function.

[11] The dismissal was carried out on Saturday, 2 February 2013, by Stephen Craig, the manager of the restaurant, although the conflict was with the chef, Colin Fassnidge.

[12] The Respondent submits that the Applicant was not a person protected from unfair dismissal because his casual employment was not regular and systematic.

[13] The Respondent further submits that there was a valid reason for the Applicant’s dismissal relating to his capacity and conduct. The events of 1 February were the culmination of previous difficulties with the Applicant. The chef, Mr Fassnidge, had made it clear that he could no longer work with the Applicant. The Applicant was well aware of this on the night of 1 February.

[14] The Applicant sought compensation. The Respondent denied that compensation was appropriate but, in the alternative, submitted that if compensation was to be awarded it could not exceed two weeks pay because the Applicant had given notice that he would cease to be available for work for an indefinite period from 18 February 2013.

Protection from Unfair Dismissal

[15] An order for reinstatement or compensation may only be issued where I am satisfied the Applicant was protected from unfair dismissal at the time of the dismissal.

[16] Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:

“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.”

[17] As I mentioned above, the Respondent challenged whether the Applicant had completed the minimum employment period because of his casual employment.

[18] Sections 383 and 384 provide:

“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 had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[19] The Applicant was obviously covered by a modern award but he needs to show his nineteen or so month’s casual employment was on a regular and systematic basis and that he had a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

[20] The Applicant’s evidence was that he had worked between three to five days per week averaging over 30 hours in the last seven months. He had intended to go on holidays two weeks after his dismissal and return to work on his return from overseas, six weeks to two months later.

[21] The Respondent submitted that the Applicant’s casual employment was not regular and systematic because:

“1. the pattern of shifts worked by him was irregular,

2. the number of shifts worked by him from week to week varied, and

3. he frequently advised his non-availability for shifts.”

[22] The Respondent also submitted:

“In the last week of January 2013, the Applicant informed the respondent that he was going overseas on 18 February 2013 for an indefinite period in the order of two months. If the applicant had not been dismissed on 2 February 2013, the respondent would have employed another casual employee to replace the applicant on 18 February 2013 and would not have offered him further work if and when he returned. His employment would have ended on his last rostered shift prior to 18 February 2013.”

[23] The Full Bench in Shortland v Smiths Snackfoods Co Ltd [(2010) 198 IR 237] set out the principles which underpin the operation of s.384(2)(a). Clearly, an analysis of the facts needs to be undertaken taking into account the casualised nature of the hotel/restaurant industry.

[24] The Full Bench said:

“[12] Moreover, it is more than tolerably clear that s.384 is concerned with how an employee’s period of employment is calculated for the purposes of s.382(a). Section 384(2) draws a distinction between a period of service and a period of employment. It also draws a distinction between a period of continuous service and a period of service: a period of continuous service can be made up of a series of periods of service, some of which count towards the period of continuous service (ie. where the conditions in s.384(2)(a)(i) and (ii) are met) and some of which do not (ie. where one of the conditions in s.384(2)(a)(i) or (ii) is not met). It is clear from the language of s.384(2) that an employee may have series of contiguous periods of service with an employer that may count towards a single period of employment with that employer. Any given period of service in such a contiguous series of periods of service will count towards the employee’s period of employment only if the requirements in s.384(2)(a)(i) and (ii) are met. Section 384(2) is concerned only with determining which periods of service in such a contiguous series count toward the employee’s period of employment with the employer for the purposes of s.382(a).

[13] Continuous service by a casual employee who has an established sequence of engagements with an employer is broken only when the employer or the employee make it clear to the other party, by words or actions that there will be no further engagements. The gaps between individual engagements in a sequence of engagements should not be seen as interrupting the employee’s period of continuous employment within the meaning of s.384. In particular, a period of continuous service within the meaning of s.384(1) is not to be seen as broken by a period of ‘leave’ or an absence due to illness or injury.”

[25] Detailed rosters for all employees were attached to the witness statement of Stephen Craig, the restaurant manager. However, these support, in my view, the general picture of his work provided by Mr Foster.

[26] The fact that Mr Foster had other interests, whether study or work does not detract from the proper analysis of his service. In Yaraka Holdings Pty Ltd v Giljevic [(2006) 149 IR 339] the Court of Appeal of the ACT, in a case about independent contracting, at pages 355 and 356 said:

“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". Considered in the light of the criteria in s11 (3)(a)-(g), we are satisfied that the pattern of engagement over the years from 1995 to 2002 satisfied this description.


69. Mr Rares argued that the course of engagement over these years had not been shown to have been systematic because it had not been predictable that the respondent would be engaged to work at particular times, on particular jobs or at particular sites. Again, that is not the test. 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.”

[27] I am satisfied that the Applicant’s casual employment was regular and systematic pursuant to s.384(2)(a)(i).

[28] The question of whether he had a reasonable expectation of continuing employment on a regular and systematic basis is more difficult given his intention to proceed on an overseas trip. On balance however, I find that s.384(2)(a)(ii) is satisfied as well. There is no evidence that prior to the events of 1 February 2013, which led to the dismissal, the Respondent had any intention but to continue with the previous pattern of the Applicant’s employment upon his return to Australia.

[29] Given that I have found that s.384(2)(a) applies, I find that the Applicant has completed the minimum employment and, as I noted above, is award covered.

Was the dismissal unfair?

[30] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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.

Was the Applicant dismissed?

[31] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

“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.”

[32] There is no dispute that the Applicant was dismissed.

[33] The Respondent has 29 employees, so issues relating to the application of the Small Business Fair Dismissal Code do not arise. Mr Bard, at PN91 of transcript conceded the Respondent was not a small business employer.

[34] There was no argument that the Applicant was a case of “genuine redundancy” pursuant to s.385 (d) of the Act.

Harsh, unjust or unreasonable

[35] Having dealt with each of s.385(a),(c)-(d) of the Act, I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“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.”

[36] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

[37] The Applicant submits the dismissal was harsh, unjust or unreasonable because:

● He was effectively summarily dismissed on the day following his disagreement with the chef, Mr Fassnidge, mainly about the quality of the suckling pig dish.

● No opportunity was given to him to respond.

● There had not been a problem with his work formally brought to his attention previously.

[38] The Respondent submits the dismissal was not harsh, unjust or unreasonable because of the following:

● The Applicant’s serious misconduct on 1 February 2013.

● The Applicant’s conduct and his relationship with the chef meant his ongoing employment was not tenable.

● There had been issues with the Applicant’s performance prior to the 1 February incident.

[39] I am under a duty to consider each of these criteria in reaching my conclusion, Sayer v Melsteel[2011] FWAFB 7498.

[40] I will now consider each of the criteria contained in s.387 of the Act separately.

Valid Reason - s.387(a)

[41] The Respondent must have a valid reason for the dismissal which should be “sound, defensible and well founded” and should not be “capricious, fanciful, spiteful or prejudiced” Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371

[42] I am not satisfied that there is a valid reason for dismissal.

● Evidence was provided by:

- Stephen Craig, restaurant manager;

- Colin Fassnidge, executive chef;

Thomas Byron, sous chef;

Jordan Robinson, hotel manager;

Bret Cameron, head chef.

● The evidence of all was consistent with the picture of a conflict between the chef and the Applicant that would make an ongoing working relationship difficult, but not serious misconduct justifying instant dismissal

● The Applicant’s attitude and outspokenness may have offended the chef but this does not justify summary dismissal.

● Evidence about the applicant previously kicking the kitchen door and talking to friends in the bar during working hours, even if correct, did not lead to any formal warnings.

[43] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made, Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41] in explicit terms, Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151 and in plain and clear terms, Presvisic v Australian Quarantine Inspection Services Print Q3730. In Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:

“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”    Ibid at 151.

[44] There was no dispute that the Applicant was told by Mr Craig at about 3.00 pm on Saturday 2 February that “you can’t work here any longer”. I am satisfied that the Applicant was not notified of the reason for dismissal.

Opportunity to Respond - s.387(c)

[45] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality RMIT v Asher (2010) 194 IR 1, 14-15.

[46] The conversation with Mr Craig led to instant dismissal. This was all verbal. I am satisfied that the Applicant had no opportunity to respond to the reason for the dismissal.

Unreasonable refusal by the employer to allow a support person - s.387(d)

[47] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.

[48] There was no evidence that the Applicant sought to have a support person in attendance at discussions relating to the dismissal. I find also that the Respondent did not unreasonably refuse to allow the Applicant to have a support person in attendance.

Warnings regarding unsatisfactory performance - s.387(e)

[49] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employer about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct, Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237.

[50] I find that no formal warnings were provided to the Applicant during his employment.

Impact of the size of the Respondent on procedures followed - s.387(f)

[51] There is no doubt that the size of the Respondent’s enterprise did impact on the procedures followed to effect the dismissal.

[52] The most important consideration for the Respondent was to make sure that the executive chef was “happy” and his authority maintained.

[53] I find the size of the Respondent’s enterprise did impact on the procedures followed in effecting the dismissal.

Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

[54] There is no doubt that the absence of dedicated human resource management or expertise in the Respondent’s enterprise impacted on the procedures followed in effecting the dismissal. Of course, this issue is closely related to the size of the business.

[55] I find the absence of any such management or expertise did impact on the procedures followed by the Respondent in effecting the dismissal.

Conclusion

[56] Having considered each of the matters specified in s.387, I am satisfied the dismissal of the Applicant was harsh, unjust or unreasonable. Accordingly, I find the Applicant’s dismissal was unfair.

Remedy

[57] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“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.

[58] I have already dealt with the issues at s.390(1)(a)–(b) above. I am satisfied the Applicant was protected from unfair dismissal pursuant to s.382 of the Act and the Applicant was dismissed unfairly. Accordingly, I am required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied such an order is appropriate in all the circumstances.

[59] The Applicant did not seek reinstatement. In any event, given the circumstances of the case and the nature of the business, I would not have been prepared to award it.

[60] The Applicant did specify the amount of compensation claimed as “eight to ten week’s pay” in his final submission at the hearing.

[61] The Respondent’s submission was that the Applicant was entitled to no more than two week’s compensation, in the event that his other submission failed.

[62] In evidence was a written offer by Mr Bard, on behalf of the Respondent on 6 February 2013, of “a sum approximately equal to your average weekly wage for two weeks”. This was further specified on 14 May 2013 as an amount of $2,500. This was not specified as without prejudice and was referred to by both sides on transcript.

Compensation

[63] Section 390(3)(b) provides that I may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

[64] I am satisfied that an order for compensation is appropriate in all the circumstances of this case. However, the casual nature of the Applicant’s employment raises some obvious difficulties in calculating the quantum of compensation.

[65] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered provides:

“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.”

[66] The method for calculating compensation under s.392 of the Act was recently dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge,[2013] FWCFB 431 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket, (1998) 88 IR 21 and Ellawala v Australian Postal Corporation, Print S5109 (Ellawala).

[67] A lot of material concerning the Applicant’s take home pay and rosters was tendered. It appears that his Monday to Friday hourly rate was $21.31, but of course this increased on weekends and public holidays. The offer referred to above of $2,500 for two week’s work was not challenged by the Applicant on the basis of the calculation. I propose to accept it as an appropriate means of calculating income.

[68] I have considered each of the criteria in s.392 of the Act and make the following findings:

● Given the Applicant’s casual employment, his overseas travel and the breakdown of the relationship with the executive chef, it is reasonable to conclude that the period of time he would have remained employed by the Respondent, or would have likely remained employed, would have been brief - no more than the two weeks until his leave and a week or so after.

● The Applicant’s evidence was that he had difficulty finding employment, but it is also is clear that he has a number of other interests and activities.

● I am satisfied that any order for compensation will not affect the viability of the business.

Compensation cap: s.392(5)

[69] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or half the amount of the high income threshold immediately prior to the dismissal.

[70] The high income threshold component immediately prior to the dismissal was $61,650.

[71] The amount of compensation I will order does not exceed the compensation cap.

Conclusion

[72] I am satisfied that the Applicant was protected from unfair dismissal and that the dismissal was unfair and a remedy of compensation is appropriate in the order of three week’s wages.

[73] An order will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

T. Forster, applicant on his own behalf.

P. Bard, for the Respondent.

Hearing details:

2013

Sydney:

July 2.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR539657>