Thinh Nguyen

[2014] FWC 4314

[2014] FWC 4314 [Note: Appeals pursuant to s.604 (C2014/5360 & C2014/5361) were lodged against this decision - refer to Full Bench decision dated 21 October 2014 [[2014] FWCFB 7198] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Thinh Nguyen
(U2014/5098)

Thanh Le
(U2014/5099)

v
Vietnamese Community in Australia T/A Vietnamese Community Ethnic School South Australia Chapter

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 8 JULY 2014

Application for relief from unfair dismissal - termination of employment unfair - consideration of reinstatement - order for compensation.

[1] On 30 May 2014 I issued a decision 1 in which I dismissed a series of jurisdictional objections to applications made by Mrs Le and Mr Nguyen (the applicants) pursuant to s.394 of the Fair Work Act 2009 (the FW Act). In summary form, I found that the applicants were employees and not volunteers, and that they worked for the Vietnamese Community in Australia T/A Vietnamese Community Ethnic School South Australian Chapter (“the Vietnamese Community School” or “the School”). I found that the applicants had been dismissed at the initiative of the School and that they had lodged valid applications within the legislative time limits. This decision concluded that the applications would be listed for consideration of the merits.

[2] Directions in that respect were issued and I subsequently received further submissions and supporting material from the applicants. The matter was the subject of a determinative conference on 24 June 2014. An interpreter was present at this conference and was required to interpret the vast bulk of the proceedings. The applicants represented themselves at this conference. The School was represented by Mr Austin, of counsel, pursuant to a conditional grant of permission made under s.596(2)(a) of the FW Act. Because this grant of permission was opposed I have summarised the reasons for this grant which I provided at this conference.

[3] Section 596(2)(a) states:

“Representation by lawyers and paid agents

(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

Note: Circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent include the following:

(a) where a person is from a non-English speaking background or has difficulty reading or writing;

(b) where a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee of an industrial association or another person with experience in workplace relations advocacy.

(3) The FWC’s permission is not required for a person to be represented by a lawyer or paid agent in making a written submission under Part 2-3 or 2-6 (which deal with modern awards and minimum wages).

(4) For the purposes of this section, a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent:

(a) is an employee or officer of the person; or

(b) is an employee or officer of:

(i) an organisation; or

(ii) an association of employersthat is not registered under the Registered Organisations Act; or

(iii) a peak council; or

(iv) a bargaining representative;

that is representing the person; or

(c) is a bargaining representative.”

[4] Having heard both parties’ positions relative to representation I concluded that Mr Austin’s involvement would expedite the consideration of the matter. In this respect I noted a significant degree of hostility between the parties and the extent to which both parties appeared to confuse the matters to be considered in these applications with considerations relative to claimed underpayments pursuant to the Educational Services Schools (General Staffs) Award 2010. I concluded that the possibility of an agreed position relative to all of the claims made by the applicants might be enhanced by Mr Austin’s involvement. In reaching my conclusion I took into account the degree of difficulty the School had demonstrated in the earlier matter in recognising employment issues. I also took into account the fact that the applicants were not represented. The permission granted to Mr Austin was conditional in that I advised that should the applicants require clarification on any of the matters raised by him I was prepared, where possible, to assist them or to positively consider a request for an adjournment to enable them to obtain alternative advice.

[5] The conference was adjourned for a time on 24 June 2014 to enable the parties to consider the possibility of agreement on all the applicants’ claims. I was subsequently advised that agreement was not possible.

[6] The Vietnamese Community School advised that it accepted the findings in my 30 May 2014 decision and, having taken advice from Mr Austin, it now conceded that the termination of the applicants’ employment was unfair in terms of the factors set out in s.387 of the FW Act. On the basis of that concession and the information before me I consider that the School’s dismissal of the applicants was unfair for the purposes of s.390. In that context the issue for determination in this decision relates to the appropriate remedy.

[7] Section 390 of the FW Act states:

“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.”

[8] The primary remedy is that of reinstatement to the position held immediately before the employment termination or to another position on terms and conditions which are not less favourable. The applicants sought reinstatement with the payment of lost remuneration. The applicant’s claims in this respect were intertwined with underpayment claims and, in the case of Mrs Le, with claims for payment of remuneration she lost from her other, current and presumably primary employment, in the course of pursuing this claim. The applicants asserted that because their dismissal was unfair and they had both been long term School employees, they should be reinstated. They asserted that this would not involve unnecessary disruption and that their qualifications and experience were better suited to the roles than those of the persons employed to replace them. The applicants expressed a significant concern that, as members of the Vietnamese community, they considered their participation in the School to be personally important and their dismissal had caused them particular concern and distress and loss of reputation within that community.

[9] The Vietnamese Community School position was that reinstatement was neither practical nor appropriate. The School asserted that the relationship had been so damaged that it could not be restored, and that changing teachers part way through the year would be detrimental to the students. The School asserted that, if the applicants were reinstated, it would need to dismiss the persons it had engaged to replace them, causing further distress. Further, the School asserted that reinstatement of the applicants would create disharmony with the teachers at the school who regarded themselves as volunteers. In this respect it provided a declaration allegedly signed by these other teachers, in which they confirmed their volunteer status and satisfaction with payments made to them. Accordingly, the School asserted that the appropriate remedy in this regard was an order for compensation in lieu of reinstatement.

[10] I have considered the appropriate remedy in light of the evidence and material provided at the initial conference and the evidence at this conference. I have had particular regard to the evidence given by Mrs Le and Mr Nguyen and by Mrs Lan for the School, at the conference on 24 June 2014.

[11] Mrs Le’s and Mr Nguyen’s desires to be reinstated are both understandable and significant with particular reference to their standing in the Vietnamese community. It is clear to me that they have both provided substantial and committed service to the School and the Vietnamese community and that the termination of their employment and subsequent souring of their relationship with the School is a matter of real and grave concern to them both.

[12] I have adopted the position that, as reinstatement is the primary remedy in the event of a finding of unfairness the School bears a substantial onus to demonstrate to me that reinstatement is not appropriate as distinct from undesirable or difficult. In this respect the observations of the Full Industrial Relations Court decision in Perkins v Grace Worldwide (Australia) Pty Ltd 2 remain relevant:

“Trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited (Wilcox CJ, von Doussa and Marshall JJ, 13 December 1996, not yet reported). The implication is not confined to employers, it extends to employees: see for example Blyth Chemicals Ltd v Bushell [1933] HCA 8; (1933) 49 CLR 66 at 81-2 and North v Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.

At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.

If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.”

[13] In adopting an approach consistent with that position I have noted the legislation now refers to the concept of inappropriate rather than impractical. I do not consider that change detracts from the relevance of the approach in Perkins and have, in any event, noted that later decisions of the FWC have also adopted the approach set out in Perkins. 3

[14] I have decided that the application of this approach mitigates against the reinstatement of the applicants. In this regard I am satisfied that continued litigation relative to the applicants’ underpayment claims is likely and will bring with it continuing ill-will between the parties. I am also satisfied that the applicants have both confirmed their position thatMrs and Mr Loc-Lan from the School “breach Work Place Law”, 4 and they were “unlawfully discriminated”.5 In these respects, it may be that further legal action establishes that the Applicants are, in fact, correct, but I consider that the likelihood of substantial acrimony between the parties who hold such firm views represents a circumstance which meets the test in Perkins.

[15] In reaching this conclusion I have had regard to the manner of communication and behaviour of both the applicants and representatives of the School in the course of the conference on 24 June 2014. Again, this observation is made without apportioning fault but simply on the basis that the relationship appears to me to be so damaged that it cannot be re-established.

[16] Further factors are also relevant. I am concerned that the reinstatement of the applicants could disrupt the operations of the School and the delivery of classes to students, particularly midway through the school year. I am also concerned that the declaration 6 signed by the School teachers appears to identify the potential for disruption and conflict between the Applicants and other teachers. Again, this statement is made without apportioning any fault in this respect.

[17] In reaching this conclusion I have had regard to the extent to which the Applicants are concerned at their reputation within the Vietnamese community. I have adopted the position that this decision may go some way toward addressing the applicants’ concerns but reinstatement appears to me to be certain to ensure ongoing conflict.

[18] As I have concluded that reinstatement of the Applicants is inappropriate, I have reviewed the extent to which an order for payment of compensation is appropriate in these circumstances. I consider that to be the case. There is no dispute that the Applicants have been unfairly dismissed and I have concluded that the circumstances in which this occurred has resulted in lost income and difficulty in replacing that income. I have noted that the Applicants’ work for the School involved regular casual work of around two hours duration on a nominated afternoon each week. I am satisfied that both the applicants have other employment, including, but not limited to their continuing long term work in another Vietnamese school.

[19] Section 392 sets out the factors which must be taken into account in determining an amount of compensation in lieu of reinstatement. I have considered each of these factors.

[20] In terms of the effect of the order on the viability of the Vietnamese Community School, I have concluded that the School has limited financial resources and I have noted the evidence of Mrs Lan to the effect that its income is derived from a Government grant and student fees. Accordingly, whilst it was open to the School to argue that any amount has the potential to affect its viability, no such argument was put to me and Mr Austin acknowledged that an amount of compensation may be payable. Accordingly, I have taken it that the amount being contemplated will not affect the viability of the School.

[21] Mrs Le has been a teacher at the School for 13 years and Mr Nguyen has been at the school for 8 years. In each instance I am satisfied that this represents a substantial period of service and lends support to a more significant award of compensation.

[22] Had the applicants not been dismissed I have concluded that they would both have been likely to have remained at the School indefinitely. There are no suggestions of issues associated with their work performance.

[23] There is limited information available to me about the efforts made by the applicants to mitigate losses arising from the dismissals. Notwithstanding this, I have formed the view that opportunities for work of this nature are inherently limited and that, because of their difficulties with the English language, both applicants would find it difficult to obtain suitable alternative employment.

[24] I have noted that the applicants’ employment at the School did not represent full-time positions. There is no evidence before me that goes to remuneration earned by the applicants from other employment following a dismissal. Further, the evidence does not permit a conclusion about any income of this nature likely to be earned before the payment of any compensation ordered.

[25] In terms of other matters that may be relevant, I have noted that the applicants remain in dispute with the School over the application and effect of the Educational Services Schools (General Staffs) Award 2010. The outcome of that dispute may result in an increase in payments due to the applicants. In this respect I have noted that the School has not conceded that it is covered by that Award. I have decided that the amount being contemplated should be determined on the basis of the payments made to the applicants at the time of the termination of their employment. Whilst the limited information before me tends to suggest that the Award would have application to the applicants, I do not consider that the determination of an amount in lieu of reinstatement should have the effect of determining an underpayment claim.

[26] I do not consider that the termination of the applicants’ employment was a consequence of misconduct such that any amount to be ordered should be reduced accordingly.

[27] Having considered all of the applicants’ circumstances I have concluded that, had it not been for the termination of their employment, they would have remained in employment indefinitely and that there are no relevant deductions from any assessment of compensation in lieu of reinstatement. Consequently, the amount to be ordered is limited by the compensation cap specified in s.392(5).

[28] I have reviewed this approach in the context of the methodology adopted in Sprigg v Paul’s Licensed Festival Supermarkets 7 and have arrived at the same outcome.

[29] Accordingly, I have concluded that each of the applicants should receive a gross payment equivalent to 6 months pay, which, taking into account the normal School year represents 20 weeks pay at the rate that was applicable at the time of the termination of their employment. An Order (PR552590) to this effect will be issued.

SENIOR DEPUTY PRESIDENT

Appearances:

T Nguyen on his own behalf.

T Le on her own behalf.

B Austin counsel for the respondent.

Hearing details (Determinative Conference):

2014.

Adelaide:

June 24.

 1   [2014] FWC 3574

 2 (1997) 72 IR 186, 191

 3   See for example Ngyuen v IGA Distribution (Vic) Pty Ltd[2011] FWA 3354 where this approach was not challenged on appeal and EDI Rail Pty Ltd v Rowley [2008] AIRCFB 64

 4   Exhibit LN1

 5   Exhibit LN1

 6   Exhibit V4

 7 (1998) 88 IR 21

Printed by authority of the Commonwealth Government Printer

<Price code C, PR552555>