Virma Ninon v Metropolitan Taxi Club Inc
[2018] FWC 3293
•13 JUNE 2018
| [2018] FWC 3293 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Virma Ninon
v
Metropolitan Taxi Club Inc
(U2017/10565)
| Commissioner Bissett | MELBOURNE, 13 JUNE 2018 |
Application for an unfair dismissal remedy – dismissal harsh, unjust or unreasonable – applicant unfairly dismissed – remedy – compensation ordered.
Ms Virma Ninon has made an application to the Fair Work Commission (Commission) seeking remedy for unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (FW Act). Ms Ninon was employed by the Metropolitan Taxi Club Inc (MTC). Ms Ninon’s period of employment with MTC is subject to some dispute and is dealt with further below, suffice it to say that she was employed for over nine years. Ms Ninon was summarily dismissed on 29 August 2017 for a “dishonest act”.
Ms Ninon was employed in an administrative role in which she did the bookkeeping and looked after MTC’s accounts.
MTC is an incorporated association. Mr Daniel Agenge and Mr Ibrahim Mohamed are the two nominated public office holders of MTC.
Prior to hearing the matter I granted permission to Ms Ninon and MTC to be represented by lawyers.
Matters leading to the dismissal
Ms Ninon said that around mid-July 2017 she received advice from her brother that her mother, who lives in the Philippines, was hospitalised. She spoke to Mr Agenge about accessing some leave to enable her to visit her mother and this was agreed. On about 20 July 2017 four weeks of annual leave was processed.
Ms Ninon said, and this is in dispute, that at this time Mr Agenge asked her to calculate how much long service leave she was owed and directed her to take it even though she advised Mr Agenge she was not entitled to the leave until August 2017. She subsequently calculated what she thought was her long service leave entitlement (based on three months leave after 10 years of service) and drew a cheque for this amount to be signed by Mr Agenge and Mr Mohamed.
Ms Ninon returned from overseas and to work on 23 August 2017. At the end of that day Mr Agenge and Mr Mohamed asked to talk to her. What was then said at the meeting is in dispute. Ms Ninon said she was told by Mr Agenge and Mr Mohamed that they had consulted the accountant who said she was not entitled to be at work given she was on paid leave. Ms Ninon said she was also told she had to complete her period of paid leave, to leave the premises and that they would be in touch with her.
Ms Ninon said that on 28 August 2018 she noticed she had missed three calls from Mr Agenge. She called him back on 29 August 2017 and advised him she had tentatively booked to return to the Philippines the following week. Mr Agenge told her that she would receive a letter from the lawyers before then.
Reason for dismissal
On 6 September 2017 Ms Ninon received a letter dated 29 August 2017 from MTC. That letter said:
Termination of employment and outstanding debt
We refer to your position with Metropolitan Taxi Club and confirm we had to regrettably terminate your employment as a result of your dishonest conduct.
A review of your records revealed that you have taken monies from the business without being authorised to do so. The monies, which you have unilaterally taken, amount to an overpayment to you of $7,403.70.
Given that this overpayment has not been authorised, we require you to repay the sum of $7,403.70 within 14 days. We reserve our right to refer this matter to the authorities if repayment is not made within this time.
Given the serious nature of your conduct, we have determined that you have engaged in a dishonest act. This gives rise to our decision to summarily dismiss you. This negates any notice period which you may have been entitled to.
We require you to immediately leave our premises…[1]
Attached to the letter was a spreadsheet setting out on a weekly basis accrued and used/paid annual leave from 25 October 2007 to 20 July 2017. A summary of the total annual leave taken in excess of that accrued and its value was included. A further summary of long service leave taken in excess of that accrued and its value was also provided. A calculation of a long service entitlement of 8.5 weeks using the Victorian Government long service leave calculator based on a period of service from 25 October 2007 to 20 July 2017 was also attached to the letter (all together, the reconciliation document).
Period of employment
Ms Ninon’s period of employment is important in that it has some bearing on the gravity of the misconduct for which she was apparently dismissed.
Ms Ninon commenced employment with MTC on 25 October 2007.
From 9 August 2007 until 24 October 2007 Ms Ninon was employed by Brunswick Road Collision Centre Pty Ltd (BRCC). Her evidence is that during this period of time she worked on the front desk at MTC.
BRCC is owned by four partners.[2] Mr Mohamed is a Director of BRCC[3] and an employee of BRCC.[4] Mr Mohamed said it was a related business to MTC and that the MTC drivers prefer to have their smash repairs done at BRCC.
Mr Agenge is also an office holder (Director) and an employee[5] of BRCC. He is a signatory for payroll at both MTC and BRCC. He gave evidence that BRCC is an associated entity of MTC.[6]
Ms Ninon produced her payslips for her period of employment with BRCC.[7] She also produced a “Payroll Advice” for BRCC for the period 1 June 2007 to 3 July 2008, apparently printed out on 3 July 2008.[8] This payroll advice shows that, for each pay period at BRCC, Ms Ninon received an hourly rate of pay of $17.10. It indicates that her superannuation fund was MLC but shows a payment to Host Plus Superannuation. Each pay period contains a notation that “allentitlements trs to met taxi club” (sic) which she says indicates that all of her entitlements were transferred to the Metropolitan Taxi Club.[9]
Both the payslips and the payroll advice indicate that Ms Ninon accrued annual leave at the rate of 3.077 hours per pay period (weekly). There is no indication on the payslips that she took any annual leave and her final payslip with BRCC shows a year-to-date accrual of annual leave as at 24 October 2007 as 30.77 hours.
Mr Agenge gave evidence that:
·BRCC is a different entity to MTC but they are associated;[10]
·Ms Ninon indicated in her initial remittance advice to MLC superannuation fund (into which MTC made her superannuation contributions) that she commenced with MTC on 25 October 2007;[11]
·Pay records for MTC show that for the period 1 July 2007 to 30 September 2007 MTC had one employee. The ATO summary of total wages paid for this period is the same as the pay record for the individual; [12]
·The PAYG payment summary for Ms Ninon for the period ending 30 June 2008 which shows a commencement date of 9 August 2007[13] is as a result of a mistake made by the accountant.[14]
MTC submits that this is evidence that Ms Ninon was not employed by MTC during the period 9 August 2007 to 24 October 2007.
I am satisfied on the evidence of Mr Agenge that BRCC and MTC are related entities. Further, on the evidence available to me, I am satisfied that Ms Ninon’s entitlements were transferred to MTC on 25 October 2007. Whilst MTC put the commencement date of 9 August 2007 on Ms Ninon’s PAYG summary statement down to an error by its accountant, no evidence from the accountant, or of correction of the information provided to the Australian Taxation Office, has been produced.
For these reasons, I am satisfied that Ms Ninon’s employment with BRCC, in circumstances where she did not resign her employment and where her accrued entitlements were transferred to MTC, counts as service with MTC. Ms Ninon’s commencement date for the purpose of entitlements with MTC is therefore 7 August 2007. That Ms Ninon’s application to join the MLC superannuation fund indicates a commencement date with MTC of 25 October 2007 does not effect this conclusion. That is technically a correct statement but has no bearing on the fact that she worked for an associated entity prior to this date and apparently had her entitlements transferred from BRCC to MTC as of this date.
Ms Ninon was dismissed from her employment by letter dated 29 August 2017. She received this letter by post on 6 September 2017. MTC says that her employment was terminated at a meeting between Ms Ninon, Mr Agenge and Mr Mohamed on 23 August 2018. In considering whether or not to extend time within which Ms Ninon could make her application for unfair dismissal remedy, Deputy President Gooley found that the termination of Ms Ninon’s employment occurred on 6 September 2017[15] when she became aware of the dismissal. I do not intend to disturb that finding.
I am therefore satisfied that Ms Ninon was employed by MTC and its associated entity BRCC for the period 9 August 2007 to 6 September 2017.
Was Ms Ninon unfairly dismissed?
Section 385 of the FW Act states that:
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.
In this case MTC claims that it is a small business and the dismissal was consistent with the Small Business Fair Dismissal Code (Code).
Is MTC a small business?
MTC relies on its claim that it is a small business to found its jurisdictional objection that the dismissal was consistent with the Code. In these circumstances it is incumbent upon MTC to prove that it is a small business.
With respect to the number of employees and associated bodies:
·Ms Ninon gave evidence that MTC had six employees and that BRCC employed more employees although she did not know precisely how many;[16]
·Mr Mohamed said that MTC employed “four girls” and BRCC had eight employees;[17] and
·MTC, in submissions, said that Mr Agenge said there were six employees.[18]
Mr Agenge, in his evidence, agreed that MTC and BRCC are related or associated bodies. Both Mr Agenge and Mr Mohamed are the public officers of MTC (an incorporated association) and Directors and employees of BRCC. However, neither of them produced the records detailing the relationship between the two companies and neither provided documentary evidence of the number of employees of either company.
If it is that MTC only had four employees (including Ms Ninon) at the time of the dismissal and BRCC had eight employees as claimed by Mr Mohamed then, for the purposes of determining if the Code applied, it would not have mattered if MTC and BRCC were associated entitles or not, the maximum total number of employees would be 12, bringing MTC within the scope of the application of the Code.
However, for reasons best known to themselves, Mr Agenge and Mr Mohamed provided no evidence of the number of employees in circumstances where MTC seeks to rely on the Small Business Fair Dismissal Code. In light of this lack of evidence, Ms Ninon submitted that there were no grounds on which to find MTC was a small business and the Small Business Fair Dismissal Code did not apply.
MTC argued it was a small business. It was incumbent upon them to provide evidence to satisfy the Commission that this was the case. Beyond mere assertions to this effect MTC has not done so. In the circumstances where no evidence has been given as to the size of the businesses by the Respondent, I am not satisfied that I can find that MTC is a small business such that the Code applies.
However, much of this case was argued on the basis that the Code did apply and I have decided to consider first if the dismissal was consistent with the Code.
The Small Business Fair Dismissal Code
The Code states that:
Small Business Fair Dismissal Code
Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
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.
Was the dismissal consistent with the Code?
Ms Ninon was summarily dismissed by letter dated 29 August 2017.
In Pinawin v Domingo[19] the Full Bench of the Commission considered the proper test to be applied in determining if a summary dismissal complied with the Code. The Full Bench found as follows:
[29] …There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly, it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.
I have considered this matter against these two tests.
The employer’s belief about the employee’s conduct
MTC submitted that, at the time of Ms Ninon’s dismissal, Mr Agenge and Mr Mohamed believed that she had acted dishonestly in taking paid leave that she was not entitled to. Both Mr Agenge and Mr Mohamed said they had received advice to this effect from their accountant prior to Ms Ninon’s return to work on 23 August 2017.
Ms Ninon submitted that there was no evidence that Mr Agenge and/or Mr Mohamed formed a belief that she was committing fraud or stealing money. Ms Ninon makes this submission on the basis that both Mr Agenge and Mr Mohamed signed the cheques in July 2017 for the payment to her of annual leave and long service leave. To the extent that Ms Ninon’s employment was terminated for taking money without authorisation, each of them had, by signing the cheques for her payment, authorised the payments.
I am satisfied that MTC held a belief, at the time they met with Ms Ninon on 23 August 2018, that she had dishonestly taken leave and payment for that leave from MTC and that she was not entitled to that leave.
In having formed that belief, I am satisfied that MTC did consider the conduct sufficiently serious to warrant immediate dismissal.
Was the belief formed on reasonable grounds
MTC submitted that both Mr Agenge and Mr Mohamed made enquiries of the MTC accountant as to the entitlements of Ms Ninon and, in particular, in relation to long service leave. They obtained this advice after Ms Ninon went on leave on 20 July 2017 and before the meeting with her on 23 August 2017.
Ms Ninon submitted that the extent of the enquiry made by Mr Agenge and Mr Mohamed was limited to a review of records which contained an incorrect commencement date, were based on an incorrect cessation date and contained the incorrect rate of pay.
The evidence of both Mr Mohamed and Mr Agenge is that the reconciliation document attached to the letter of dismissal dated 29 August 2017 was prepared by the accountant after Ms Ninon went on leave on 20 July 2017 and completed after they met with Ms Ninon on 23 August 2017.[20]
Neither could explain why the date range for the purpose of calculating entitlements of Ms Ninon of 25 October 2007 to 20 July 2017 was used and not 7 August 2007 to 23 August 2017 except to say that the accountant had done the calculations. Mr Mohamed said that Ms Ninon’s start date was 25 October 2017 and he based this on the payroll records although agreed that he had not provided those as part of his evidence.[21] He said the information in the PAYG summary was wrong and that accountant had made an error.[22]
Whilst Mr Mohamed accepted that the long service leave calculation showed an end date (for the calculation) of 20 July 2017 he did appear to agree that, for the purpose of determining the extent of any entitlement to long service leave, and hence any overpayment, an end date of at least 23 August 2017 should have been used.[23]
As to the rate of pay used to determine the extent of any excess payment to Ms Ninon, Mr Mohamed said that the calculations had all been done by the accountant.[24]
Mr Mohamed said that at the meeting on 23 August 2017 he and Mr Agenge discussed with Ms Ninon the overpayment of long service leave and the overpayment of annual leave[25] and agreed that the documentary evidence of the overpayment was not tabled.[26]
Mr Agenge’s evidence is that the reasonable grounds on which Ms Ninon’s employment was terminated was the reconciliation document attached to the letter of 29 August 2017. He said that the long service leave calculator document was provided by the accountant before the meeting on 23 August 2017 and that while the calculation attached to the letter of 29 August 2017 was dated 25 August 2017 he did have a copy of the calculation provided prior to 23 August 2017 in his office.[27] An order that this document be produced did not result in a document having been found that met the description given by Mr Agenge.
Mr Agenge could not explain the difference in the hourly rate used by the accountant to calculate excess payments made to Ms Ninon ($31.493) and the rate at which she was actually paid her annual leave and long service leave ($29.41).[28]
Mr Agenge agreed that, in reaching the conclusion that Ms Ninon had acted dishonestly he did not have access to Ms Ninon’s full personal record.[29]
Mr Agenge agreed that, despite stating in his written statement that he intended to do so, MTC had not called its accountant to give evidence in the proceedings.[30]
Mr Agenge gave evidence that in the meeting with Ms Ninon on 23 August 2017 they discussed both the long service leave they say Ms Ninon was not entitled to and the overpayment of annual leave.[31] He said that Ms Ninon was also told at this meeting that the accountant had said she could not return to work as she was on paid leave. He said that he then told Ms Ninon to leave the premises and not to return until her leave was completed.[32]
Conclusion
I am unable to conclude that the evidence establishes that Mr Mohamed and Mr Agenge reached the belief they say they held on reasonable grounds. I am not convinced on the evidence before me that they carried out a reasonable investigation and, on this basis, reached a reasonable conclusion.
Mr Agenge and Mr Mohamed reached their conclusion on the basis of the reconciliation document provided by the accountant. Unfortunately there is no evidence before the Commission on what was asked of the accountant (who was approached some time after Ms Ninon went on leave but prior to her return on 23 August 2017), how the inquiry came about, what information the accountant had to work from or why the accountant used the figures he or she did.
Given the discrepancies in employment dates, calculation dates and the rate of pay at which the leave was paid compared to the rate at which the overpayment is calculated, the lack of any evidence from the accountant is fatal to the reasonableness of the enquiries made by MTC. Neither Mr Agenge nor Mr Mohamed could provide any explanation for these discrepancies.
Absent evidence of the accountant, I am not satisfied that Mr Agenge and/or Mr Mohamed undertook a reasonable investigation. Without such evidence it is not possible to conclude that they could have reached a reasonable conclusion as to the extent of any overpayment of Ms Ninon which was, after all, the basis of her dismissal.
There was, therefore, no sound reasonable basis on which Mr Agenge and Mr Mohamed reached their conclusion that Ms Ninon had taken payment in excess of $7,000 which was not otherwise due to her. The apparent errors in the calculations in the reconciliation document are too great to allow a conclusion, absent the accountant’s evidence, that their enquiries were reasonable.
Apart from the statement of Mr Agenge and Mr Mohamed that they did consult their accountant, there is no evidence to support this. I am cognisant of the fact MTC is a relatively small employer (its actual size not being determined) and that its resources are limited. It clearly has no human resources specialist in its employ. It should be able to rely on the assistance and advice given to it by other professionals. Whether its belief in its conclusion with respect to the conduct of Ms Ninon is reasonable however rests on what question it asked of its accountant and what advice he or she gave. There is, however, no evidence of any discussion Mr Agenge and Mr Mohamed had with MTC’s accountant before the Commission that would assist the Commission in reaching a level of satisfaction that MTC undertook reasonable enquiries in reaching its conclusion.
I am therefore not satisfied that MTC had reasonable grounds for concluding that Ms Ninon’s conduct was sufficiently serious to justify immediate dismissal.
For these reasons, I am not satisfied that the dismissal was consistent with the Code.
Was Ms Ninon unfairly dismissed?
Given my finding that Ms Ninon’s dismissal was not consistent with the Code, it is necessary to determine if her dismissal was harsh, unjust or unreasonable. In making such a determination it is necessary consider each of the factors set out in s.387 of the FW Act.
Section 387(a) - a valid reason for dismissal
Ms Ninon’s employment was terminated because of her conduct in taking payments of over $7,000 for annual leave and long service leave to which she was not otherwise entitled.
In determining if this provided a valid reason for dismissal it is necessary that I determine if, on the evidence before me, the conduct occurred.
Annual leave
I have found above that Ms Ninon’s employment commenced with BRCC on 7 August 2007 and that the evidence on her payslips from BRCC is that her annual leave (and other entitlements) transferred to MTC on 25 October 2007.
Ms Ninon’s accrued annual leave at this time was 30.77 hours.[33]
Ms Ninon, in her evidence, said that MTC paid out each employee’s annual leave in December each year regardless of when the leave was taken. When the actual annual leave was taken, it was taken as leave without pay. Further, she said that the reconciliation of her annual leave attached to the letter of 23 August 2017 did not include the annual leave she had accrued from 7 August 2007 to 24 October 2007 which was transferred from BRCC to MTC.
Ms Ninon’s evidence also shows a discrepancy between the amount of leave shown on her payslip for the pay period ending 12 July 2017 (of 83.10 hours)[34] and that shown on the reconciliation document of 77.315 hours.
The reconciliation document does show that Ms Ninon’s leave was paid out each year at around Christmas. I accept her uncontested evidence that this occurred regardless of whether she actually took the leave. This practice is not one consistent with the minimum requirements of the National Employment Standards. Further, it makes any conclusion with respect to the times Ms Ninon may have gone into debit on her annual leave unreliable. This, along with the failure of the reconciliation to account for the 30.77 hours of annual leave that were transferred to MTC from BRCC, casts doubt over any conclusion as to the extent that Ms Ninon was overpaid any annual leave.
Further, if it is that Ms Ninon was overpaid her annual leave this would need to be balanced against any underpayment of that leave caused by MTC paying out annual leave each year on about 24 December at the rate of pay applicable at that date as opposed to the rate of pay applicable at the time the leave was actually taken.
Further, even if MTC is correct and Ms Ninon was overpaid annual leave, the value of this leave must be based on the rate at which it was paid which was $29.41 per hour and not $31.493 per hour as contained in the reconciliation document. This needs to be balanced against the actual payment of the annual leave at the incorrect rate of pay.
Neither Mr Agenge nor Mr Mohamed gave any explanation as to the annual leave payment arrangements for MTC that would affect my observations above.
Mr Agenge however did give evidence that:
[Ms Ninon] calculated the value of her own 4 week annual in dollar terms and then asked me whether I would object to her paying this amount to herself. I agree with this on the basis that she would not be entitled to annual leave, if she paid this sum to herself.[35]
This evidence supports a conclusion that the payment of annual leave was known to Mr Agenge and he expected it to balance out at some later date. He must have known that annual leave for employees was paid out at the end of each year and that, therefore, an employee would not, on these peculiar arrangements, have a further four weeks of paid leave in July. In any event, he agreed that Ms Ninon asked about having four weeks leave paid and he agreed to this. He, along with Mr Mohamed, then signed a cheque for that amount.
Taking all of these matters into account, I am not satisfied that Ms Ninon took annual leave payments that she was not entitled to. Mr Agenge, by his approval of the paid leave, authorised the taking of the leave. The overpayment cannot in such circumstances provide a valid reason for dismissal.
Long Service Leave
Ms Ninon’s employment was terminated because she had overpaid to herself an amount of $5,314.49 in long service leave (along with the claim in relation to annual leave).
Ms Ninon’s payslip indicates that she was paid 487.5 hours of long service leave at $29.41 per hour (totalling $14,339.00)[36].
The reconciliation statement suggests that Ms Ninon was overpaid 168.75 hours at $31.493 per hour (a total of $5,314.49).
As is established above, in considering if the dismissal was consistent with the Code, there are a number of errors in the determination of the overpayment of long service leave. Firstly, to the extent the amount of long service leave owing was calculated using the Victorian long service leave calculator, the commencement date of 25 October 2007 is incorrect and should be 7 August 2007. Further, if the incorrect calculation of long service leave was to be relied on in the meeting of 23 August 2017 to justify dismissal, the amount of leave owing should have been calculated by reference to a date closer to 23 August 2017. Secondly, to the extent that MTC relies on the overpayment (as opposed to the taking of long service leave when it was not otherwise owing) it has calculated the overpayment at the incorrect rate. For these reasons, the number of hours of long service leave owing to Ms Ninon, and therefore the number of excess hours paid, is apparently incorrect and the rate at which the overpayment should be calculated in wrong. In addition, the rate that Ms Ninon should have been paid the long service leave owing to her was incorrect resulting in an underpayment to be balanced against the excess leave paid.
This is not to suggest that Ms Ninon was not paid a long service leave entitlement to which she was otherwise not entitled. She was, and agreed that this was the case. Ms Ninon’s evidence is that she told Mr Agenge she wanted to take annual leave to visit her mother who was hospitalised in the Philippines and this was agreed. She said that Mr Agenge asked that she calculate her long service leave and told her that she should also take this. Ms Ninon denied that she was the one who requested her long service leave be paid out. Ms Ninon said she calculated how much long service leave she had by “googling” the entitlement on the computer. She said that Mr Agenge was there when she did so. Ms Ninon said she showed the calculation to Mr Agenge who then told her to write out the cheque.[37]
Ms Ninon said she calculated her long service leave entitlement at 13 weeks, that she thought it was correct but that she now understood that it was not correct.
Ms Ninon also said that she had told Mr Agenge that she wanted to take long service leave in February 2018 to travel to the Philippines for her mother’s 80th birthday.[38]
Mr Agenge said in his written statement that on or about 14 July 2017 Ms Ninon told him she wanted to take long service leave as a holiday. He said she did not mention it was to visit her mother in the Philippines[39] although later said that Ms Ninon asked to be paid four weeks of annual leave and had said she would travel to the Philippines using long service leave and not annual leave. [40] He denied that he told Ms Ninon to take her long service leave.
Mr Agenge agreed that he signed the cheque for long service leave. He said he trusted Ms Ninon to calculate her entitlements correctly and that he trusted her when she said she was entitled to long service leave from August 2017.
Whilst it remains opaque as to how Ms Ninon came to be taking her long service leave, I am satisfied that Mr Agenge approved Ms Ninon being paid her long service leave in July 2017. He admitted this in his witness statement where he agreed that he “had signed off on the long service leave”.[41] Even if I accept his evidence that Ms Ninon requested she be paid her long service leave, he agreed to do so. To this extent there was no unauthorised leave taken except to the extent that there was an error in how much leave was taken.
Mr Agenge and Mr Mohamed both signed the cheque for the long service leave. Neither apparently queried the amount of the cheque or asked for the calculations.
I do accept that Mr Agenge did not know how much long service leave Ms Ninon might have been entitled to but I am not satisfied that Ms Ninon deliberately set out to take more long service leave than what she believed was due to her.
I have not taken into account the evidence of Ms Ayrin Fabre or Ms Mariza Balhon, employees of MTC, that Ms Ninon was “waving the cheque around saying “I am going on holiday”.” Ms Fabre agreed that she looked at Ms Balhon’s statement and that of Mr Mohamed in preparing her statement[42] and Ms Balhon agreed that she had looked at the statement of Mr Mohamed and Ms Fabre in preparing her statement.[43] This level of collusion in the preparation of the statements casts doubt as to the reliability of each of the witnesses with respect to this particular incident.
There is a conflict in the evidence in relation to long service leave between that of Ms Ninon and Mr Agenge. I am satisfied that the evidence of Ms Ninon is more reliable than that of Mr Agenge. Ms Ninon was clear and concise in her evidence and admitted error where it existed. The documents she produced in evidence were accurate factual records in relation to her employment and provided a better employment record than that produced by witnesses for MTC. Mr Agenge’s evidence was not clear, particularly in relation to the discussions with Ms Ninon on 23 August 2017. For this reason, where there is a conflict in the evidence in relation to long service leave I have preferred the evidence of Ms Ninon.
For a reason for dismissal to be valid it must be sound, defensible and well founded. On the basis of the letter terminating her employment, Ms Ninon’s employment was terminated because she overpaid her long service leave and annual leave. I have dealt with annual leave above.
In this case, Mr Agenge authorised the payment of the long service leave and annual leave to Ms Ninon and there is no evidence that she deliberately paid more leave to herself than she believed she was otherwise entitled and/or was agreed to by Mr Agenge. Further, the true extent of the overpayment is still not before the Commission. In these circumstances, I cannot conclude, absent any refusal of Ms Ninon to re-pay what she properly owes to MTC, that there was a sound, defensible or well-founded basis for her dismissal.
Section 387(b) - whether the person was notified of that reason
Ms Ninon was advised that her employment was terminated because of the “serious nature of her conduct” in taking money from the business she was not otherwise authorised to take.
Ms Ninon was not notified of the reason for her termination (valid or otherwise) until she received the letter of termination dated 29 August 2017 on 6 September 2017.
Whilst there is disputed evidence as to the extent of the discussion on 23 August 2017, Mr Agenge and Mr Mohamed both agreed that they did not put any paperwork before Ms Ninon showing the reconciliation it had conducted.
Section 387(c) – whether the person was given an opportunity to respond
Mr Mohamed and Mr Agenge said that Ms Ninon was dismissed at the meeting of 23 August 2017. If this was true (and it has been rejected by Deputy President Gooley in determining the extension of time question and by me above) then Ms Ninon certainly was not given an opportunity to respond to the reason for her dismissal. This is because she was not given the reconciliation document until after 29 August 2017 and therefore could not have responded to the extent of any claims of overpayment made to herself.
At the time Ms Ninon did receive the reconciliation document her employment had been terminated. Ms Ninon was therefore not given an opportunity to respond to the reason for her dismissal prior to being dismissed.
Section 387(d) - unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
Ms Ninon was not advised as to the purpose of the meeting on 23 August 2017 such that she could have arranged a support person. This is to be balanced against the fact that she did not appear to ask for the meeting to be rescheduled to enable her to get a support person. This may be explained by the lack of clarity arising out of the meeting on 23 August 2017.
Section 387(e) - unsatisfactory performance
Ms Ninon’s employment was not terminated for poor performance. This is therefore not a relevant consideration.
Section 387(f) & (g) - the size of the employer’s business and absence of dedicated human resource management specialists or expertise
I am satisfied that the size of business and the lack of access to human resources expertise impacted on the way MTC went about dismissing Ms Ninon. However, as has been observed before, the size of a business does not excuse a lack of procedural fairness.
Had Mr Agenge and Mr Mohamed put their concerns about the payments to Ms Ninon and provided her with the reconciliation document, what has become a long, drawn out matter may have been quickly resolved.
Section 387(h) - any other matters
No particular matters were put to me.
To the extent that there was some suggestion that Ms Ninon was providing information about MTC to a rival taxi club there is no evidence that would allow me to conclude that this is the case.
Conclusion
For the reasons given above, and in circumstances where there was no valid reason for dismissal and there was an absence of procedural fairness, I am satisfied that Ms Ninon’s dismissal was harsh, unjust or unreasonable. I am therefore satisfied that she was unfairly dismissed.
Remedy
Ms Ninon does not seek reinstatement. I shall therefore consider compensation.
In determining the amount of compensation, s.392 of the FW Act states:
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.
I am satisfied that the order I propose to issue will not affect the viability of MTC (s.392(2)(a)). Mr Agenge and Mr Mohamed have had numerous opportunities to put information before the Commission as to the financial status of MTC. They have at times indicated they intend to do so but, ultimately, have not done so.
Ms Ninon had been employed by MTC for over 10 years at the time her employment was terminated. But for this incident, there is no evidence that her employment was otherwise in jeopardy or that she intended to leave her employment with MTC. Whilst a claim was made by MTC that Ms Ninon had been issued with a warning in 2016, Ms Ninon disputed she had been given any warning and there was no substantiated evidence of the incident the warning related to or of its existence. There was no evidence of any other incident in her employment.
With no basis to assume otherwise, I am satisfied that Ms Ninon would have remained with MTC for a further three years. At the time her employment was terminated Ms Ninon was earning $61,411.94 per annum plus 9.5% superannuation. She is therefore likely to have received $184,235.82 had her employment not been terminated. I would, however, reduce this amount by 15% for contingencies making a total of $156,600.45 (s.392(2)(c)).
Ms Ninon has been under the care of her doctor and in receipt of counselling since her employment was terminated. Her uncontested evidence is that she has been unable to work since her employment was terminated. I am therefore satisfied that, given her medical condition, there is little Ms Ninon could do, except access medical treatment, to mitigate her loss. I therefore do not propose to deduct any amount for any perceived failure to mitigate loss (s.392(2)(d)).
Ms Ninon has not earned any income since she was dismissed (s.392(2)(e)) and she is unlikely to earn any income prior to any order I might issue (s.392(2)(f)).
MTC says that in finalising any amount of compensation I should take into account the overpayment received by Ms Ninon that she has not yet repaid.
Under normal circumstances where the amount of an overpayment was not in dispute I might consider such a course of action. In this case, however, it is not my intention to do so. That is not to say that Ms Ninon should not be responsible to repay to MTC any amounts she received in pay for leave that she was not entitled to. It is however not possible for me to determine that amount on the information before me. The reconciliation document provided to Ms Ninon is not reliable in determining any overpayment. Ms Ninon was not paid her leave at the correct rate of $31.493 per hour, the amount of leave due to her has not been correctly calculated as at the date of termination and the amount she may have been overpaid needs to be deducted at the rate it was paid ($29.41 per hour) and not the rate it should have been paid. It is MTC’s responsibility to properly calculate the overpayment and discuss with Ms Ninon the repayment of that amount.
Given Ms Ninon agreed that she was paid too much in long service, I do not envisage resolution of overpayment to be a problem as long as the calculations are done correctly.
Ms Ninon was in error in not exercising appropriate due diligence in properly determining how much long service leave she was due. I do not consider this a deliberate act on her part and therefore do not consider it a form of misconduct, rather poor performance of her work. I have therefore not deducted any amount for misconduct (s.392(3)).
I have not included any amount in my order for shock or humiliation or distress (s.392(4)).
I am left with an amount of lost wages of $156,600.45, well in excess of the compensation cap of $30,705.97 (s.392(5)(a)).
I shall therefore order that MTC pay to Ms Ninon an amount of $30,705.97 plus 9.5% superannuation within 21 days of the date of making the order. An order[44] to this effect will be issued with this decision.
COMMISSIONER
Appearances:
F. Knowles, of counsel, for the Applicant.
K. Boden for the Respondent.
Hearing details:
2018.
Melbourne:
February 14.
May 14.
<PR607856>
[1] Exhibit Ninon9.
[2] Transcript, PN1476.
[3] Transcript, PN295.
[4] Transcript, PN635.
[5] Transcript, PN939.
[6] Transcript, PN940.
[7] Exhibit Ninon12, attachment VN1.
[8] Exhibit Ninon12, attachment VN2.
[9] Transcript, PN1311.
[10] Transcript, PN1531.
[11] Exhibit Taxi 6, attachments B, C & D.
[12] Exhibit Taxi 6, attachments G & H.
[13] Exhibit Ninon2.
[14] Transcript, PN643.
[15] [2017] FWC 6617 at [9].
[16] Transcript, PN114-115 and PN117.
[17] Transcript, PN288 and PN292-293.
[18] Respondent’s submissions; Transcript, PN1671.
[19] (2012) 219 IR 128.
[20] Transcript, PN416 and PN420-421.
[21] Transcript, PN638-9.
[22] Transcript, PN643.
[23] Transcript, PN672-675.
[24] Transcript, PN705.
[25] Transcript, PN611-2.
[26] Transcript, PN500.
[27] Transcript, PN904-907.
[28] Exhibits Ninon4 and Ninon5.
[29] Transcript, PN1459.
[30] Exhibit Taxi 2, paragraph 9; Transcript, PN1046-1047.
[31] Transcript, PN1088.
[32] Transcript, PN1106-7.
[33] Exhibit Ninon12, attachment VN1.
[34] Exhibit Ninon7.
[35] Exhibit Taxi 2, paragraph 5.
[36] Exhibit Ninon4.
[37] Transcript, PN154-155.
[38] Exhibit Ninon1, paragraph 11; Transcript PN162.
[39] Exhibit Taxi 2, paragraph 4.
[40] Exhibit Taxi 2, paragraph 5.
[41] Exhibit Taxi 2, paragraph 16.
[42] Transcript, PN 1217.
[43] Transcript, PN1156-1157.
[44] PR608069.
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