William Ellis v Chrysiliou IP Pty Limited, as Trustee for the Chrysiliou Law Unit Trust
[2023] FWC 3042
•20 NOVEMBER 2023
| [2023] FWC 3042 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
William Ellis
v
Chrysiliou IP Pty Limited, as Trustee for the Chrysiliou Law Unit Trust
(U2023/5683)
| COMMISSIONER MATHESON | SYDNEY, 20 NOVEMBER 2023 |
Application for an unfair dismissal remedy – valid reason – performance and conduct – dismissal harsh – procedural deficiencies
On 26 June 2023, Mr William Ellis (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Chrysiliou IP Pty Limited, as Trustee for the Chrysiliou Law Unit Trust (Respondent). The Applicant seeks financial compensation.
When can the Commission order a remedy for unfair dismissal?
Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and
(b) the Applicant has been unfairly dismissed.
Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed, and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.
When is a person protected from unfair dismissal?
Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(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.
When has a person been unfairly dismissed?
Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.
Background
The uncontested factual background to the matter is as follows:
· The Applicant commenced employment with the Respondent on 17 May 2021 as a Patent and Trademark Attorney on a full-time basis.
· On 25 May 2023, Mr Allen Chan, Patent Attorney and Director of the Respondent, raised some concerns about the Applicant’s handling of a client matter involving patent protection for a new invention (the Leung matter) and sent an email to the Applicant stating:
“I am a little concerned about this – as mentioned a couple of times before, the client has indicated that this is urgent yet no draft or even an email with an update has been sent to the client!
I have now just received the following note from the client: ‘Hi Allen, seems to me that your Simon has no intention to reply. Do you have another colleague to help or should I reach out to another firm?’
I thought I had asked you to at least reply via email with an update before leaving for INTA. Can you let me know urgently where things are at? I have promised to get back to the client by tomorrow!”
· On 26 May 2023, the Applicant emailed Mr Chan and said:
“Fair enough.
I’ll excuse myself from this. So give it to another colleague as he requests. I smell a bad debtor rat on this. The info he has been providing is far too vague.”
· On 29 May 2023, Ms Annette Dixon, Human Resources Consultant for the Respondent, wrote to the Applicant via email, requesting a “formal meeting” on 31 May 2023 to discuss his “lack of performance in relation to the Chris Leung matter”.
· On 29 May 2023, the Applicant responded to the email stating he would be working from home but could “do the meeting via teams”.
· Ms Dixon responded stating that, as the Applicant had not sought or received permission from the Directors or put in a proposal to be working from home for their consideration, he was required to be physically in the office for the meeting.
· On 31 May 2023, the Applicant ultimately attended the meeting with representatives of the Respondent via Microsoft Teams.
· On the evening of 31 May 2023, Ms Dixon wrote to the Applicant via email alleging that during the meeting he was “aggressive and abusive”, notifying the Applicant that he was suspended from work and inviting him to a further meeting with Ms Kerry Chrysiliou and Ms Dixon.
· On 1 June 2023, the Applicant responded to Ms Dixon’s email refuting the allegation of aggressive and abusive conduct, stating that he found aspects of Mr Chan’s conduct “goading and incensive” and advising that he would attend the meeting in person. The email also stated that the meeting on 31 May 2023 was witnessed by the Applicant’s support person and in “her opinion, no reasonable person would consider my conduct as either aggressive or abusive”. The email stated:
“I presume you will be providing a written copy of the minutes you took of the meeting to afford myself the opportunity to provide a formal written response. In this regard, if it will assist you, my support person took her own notes of minutes and will make this available to you upon request.”
· Ms Dixon responded to the Applicant’s email of 1 June 2023 stating:
“You refer to a support person who witnessed Wednesday’s meeting and took notes relating to the meeting. You did not make us aware that there was another person present at your end during that meeting. We had invited you to have a support person present, however you didn’t (sic) not advise who the person was.
We have concerns about your behaviour in relation to the meeting. First, we need to know if a support person is present and who that support person is. We have the right, acting reasonably, to exclude an unsuitable support person and to invite you to choose another person. Next, if there is a support person, we need to remind that person of the nature of their role and of the confidentiality of the meeting.
Please identify the support person who was present at Wednesday’s meeting and your relationship with her. Please confirm that the support person is aware of the confidentiality of the meeting and that she will maintain confidentiality.
Before tomorrow’s meeting please identify any support person you intend to bring and allow us sufficient time to approve or exclude the support person.
Your disciplinary letter for your response will follow by separate email.”
· The Applicant responded to Ms Dixon’s email of 1 June 2023 stating that his support person was his partner, Ms Maya Corfield, and that she would be his support person again.
· At 10:35am on 2 June 2023, the Respondent provided the Applicant with a “Final Warning letter” (Warning Letter), signed by Mr Chan and dated 31 May 2023, which stated:
“On 22nd March 2023 you were assigned a job for Chris Leung at ELAR in relation to urgent patent protection for a new intervention.
oOn the 29th March the client responded to the information requested.
oOn the 4th April you responded to the client asking for more information on the invention.
oThe client responded to you on the 19th April 2023.
oOn 11th May the client followed you up as you had not responded to them.
oOn the 12th May following receipt of a Whatsapp message from the client, I verbally asked you to send an update to the client.
oOn the 25th May I followed you up to see where the matter was at as the client was looking for a response from another person or firm.
On the 26th May you excused yourself from the matter and advised you “smell a bad debtor rat”. Firstly, the firm has a longstanding history with this client who has never been a bad payer and hence your judgement call on this client is absolutely unjustified.
Secondly, you mentioned that the information provided is far too vague. As an experienced attorney, you should know that it is entirely up to you to follow up with the client and ask/probe for further information if necessary. As I have suggested to you more than once, you should reach out to the client and even organise telephone and/or video conferences with the client if necessary.
Your lack of communication with the client and with me, as principal of the firm, has brought the firm into disrepute and has damaged its reputation. I have had a long-standing relationship with this client. That relationship has been adversely affected by your lack of communication and your failure to perform the task allocated to you in a timely and responsible manner.
These actions are in breach of section 3 of your employment contract…”
· The Warning Letter stated that the Applicant’s employment would be terminated if this happened again. The email attaching the Warning Letter suggested that the Warning Letter was for the Applicant’s “review and response”.
· On 2 June 2023 at around 2pm a meeting was held between the Applicant, Ms Dixon and Ms Chrysiliou. During this meeting the Applicant provided his “formal response” to the disciplinary meeting held on 31 May 2023 and the Warning Letter.
· On 6 June 2023 the Applicant was notified of the termination of his employment via correspondence from Ms Chrysiliou (Termination Letter) which stated:
“…For clarity, the focus of the meeting on Wednesday was your failure to follow a lawful and reasonable direction in relation to the drafting of the Chris Leung provisional application, despite Allen following up with you. You later ‘excused’ yourself from the task altogether.
In your letter you handed to Annette and me during the second meeting on 2 June 2023, you explained that you were not able to give full consideration to the substance of the clients reply dated 19 April 2023 because you were otherwise busy with other work and pressing deadlines.
As part of our investigation into the matter, we have found your explanation to be untrue.
Attached is a spreadsheet showing two views of your browsing history during some of the relevant days after 19 April 2023. The first view – ‘Complete’ – shows all your history while the second view – ‘Personal’ – shows browsing unrelated to your professional work. These show that you had ample time on each of the relevant days to give full consideration to the substance of the client’s reply. You chose not to do so. Instead, you chose to spend substantial time browsing the Internet for items of personal interest to you.
Your explanation to us as to why you could not give full consideration to the substance of the client’s reply was dishonest. Your dishonest conduct during the disciplinary process amounts to serious misconduct. This dishonestly has destroyed the relationship of trust and confidence in the employment relationship and there can be no confidence that you will be honest with the firm in the future. Further, in our profession, dishonest conduct causes a serious and imminent risk to the reputation, viability and profitability of the firm.
It is for the reason of your dishonest conduct during the disciplinary process, that we consider your actions constitute serious misconduct warranting summary dismissal. Therefore, you are dismissed, effective immediately….”
The hearing
There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter (s.399 of the FW Act). The hearing took place on 11 October 2023.
Both parties were self-represented during the hearing with the Respondent represented by Ms Chrysiliou, Director of the Respondent.
Witnesses
The Applicant gave evidence on his own behalf and Maya Donnellan Corfield, the Applicant’s partner and support person during two disciplinary meetings, also gave evidence on his behalf.
The following witnesses gave evidence on behalf of the Respondent:
· Kerry Chrysiliou, Patent Attorney and Director of the Respondent;
· Allen Chan, Patent Attorney and Director of the Respondent;
· Lincoln Chrysiliou, Lawyer and Trade Marks Attorney and Director of the Respondent;
· Annette Dixon, Human Resources Consultant for the Respondent.
Submissions
The Applicant filed submissions in the Commission on 6 September 2023. The Respondent filed submissions in the Commission on 20 September 2023.
Has the Applicant been dismissed?
A threshold issue to determine is whether the Applicant has been dismissed from his employment.
Section 386(1) of the FW Act provides that the Applicant has been dismissed if:
(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or
(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.
Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent.
I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the FW Act.
Initial matters
Under s.396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
Was the application made within the period required?
Section 394(2) requires an application to be made within 21 days after the dismissal took effect.
It is not disputed and I find that the Applicant was dismissed from his employment on 6 June 2023 and made the application on 26 June 2023. I am therefore satisfied that the application was made within the period required in subsection 394(2).
Was the Applicant protected from unfair dismissal at the time of dismissal?
I have set out above when a person is protected from unfair dismissal.
Minimum employment period
The Respondent’s Form F3 identifies that it is not a small business employer, having 18 employees at the relevant time. The Respondent confirmed this during the hearing. As the Respondent had 15 or more employees at the relevant time, I find that the Respondent was not a small business employer.
It was not in dispute and I find that the Applicant was an employee, who commenced their employment with the Respondent on 17 May 2021 and was dismissed on 6 June 2023, a period in excess of 6 months.
I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.
Applicant’s annual rate of earnings
It was not in dispute and I find that, at the time of dismissal, the sum of the Applicant’s annual rate of earnings (being $108,000), was less than the high income threshold, which, for a dismissal taking effect on or before 30 June 2023 is $162,000.
I am therefore satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal.
Was the dismissal consistent with the Small Business Fair Dismissal Code?
Section 388 of the FW Act provides that a person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
As mentioned above, I find that the Respondent was not a small business employer within the meaning of s.23 of the FW Act at the relevant time, having in excess of 14 employees (including casual employees employed on a regular and systematic basis).
I am therefore satisfied that the Small Business Fair Dismissal Code does not apply, as the Respondent is not a small business employer within the meaning of the FW Act.
Was the dismissal a case of genuine redundancy?
Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:
(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
It was not in dispute and I find that the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.
I am therefore satisfied that the dismissal was not a case of genuine redundancy.
Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.
Was the dismissal harsh, unjust or unreasonable?
Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[1]
I set out my consideration of each below.
Section 387(a) - Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”[2] and should not be “capricious, fanciful, spiteful or prejudiced.”[3] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[4]
Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[5] “The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.”[6]
The ‘valid reason’ need not be the reason given to the Applicant at the time of dismissal.[7] However, if the Respondent did not rely on this reason at the time of dismissal it will have to “contend with the consequences of not giving the employee an opportunity to respond to such reason…”[8]
Submissions
The Respondent submitted that it dismissed the Applicant for dishonesty during disciplinary proceedings.[9] This is consistent with the Termination Letter which states:
“It is for the reason of your dishonest conduct during the disciplinary process, that we consider your actions constitute serious misconduct warranting summary dismissal. Therefore you are dismissed, effective immediately.”
By way of summary the Respondent submitted that there was a valid reason for the dismissal related to the Applicant’s conduct because:
· the Applicant was asked to explain his misconduct in not acting on a matter delegated to him and not communicating with the client when asked to do so by the Respondent;
· on 2 June 2023 the Applicant told the Respondent he was too busy with other work and pressing deadlines at the time he received the client’s email dated 19 April 2023;
· the Respondent found that the Applicant was not too busy during the relevant days and instead was wasting many hours in trawling internet sites of personal interest to him;
· the Applicant’s dishonesty destroyed the relationship of trust and confidence between the Applicant and Respondent and warranted summary dismissal.[10]
By way of summary the Applicant submitted that there was no valid reason for the dismissal related to the Applicant’s capacity or conduct because:
· the findings of dishonest conduct are based upon conclusions reached through consideration of the Applicant’s browsing history and this appears to be an “incredulous leap”;
· the internet browsing history was not raised with him prior to his dismissal and would have little relevance to the issues central to the disciplinary proceedings;
· the alleged ground of dishonest conduct was fabricated in order to bring a quick conclusion to disciplinary proceedings.[11]
The Respondent’s initial concern
Mr Allen Chan is a Director of the Respondent. By way of summary, Mr Chan’s evidence was that:
· he was one of the Applicant’s line managers;[12]
· the Applicant had failed to prepare a patent specification for a longstanding client, Mr Leung, and failed to respond to the client’s follow up inquiries despite being prompted by Mr Chan to do so “a couple of time over a few months”;[13]
· on 25 May 2023, when he queried why no action had been taken in relation to the client’s matter, the Applicant “came up with some excuses”[14] and replied stating he didn’t want to do the work as the client was a “bad debtor rat”, that the information given by the client was too vague and that he would “excuse himself” from the job;[15]
· he lost faith and confidence in the Applicant after seeing his reply.[16]
The Applicant accepted that there was a ‘communication issue’ but submitted this was due to a breakdown in his relationship with Mr Chan.[17]
In relation to the concerns Mr Chan held about the Applicant’s handling of the Leung matter, Ms Chrysiliou’s evidence was that:
The Respondent is an incorporated patent attorney governed by a mandatory Code of Conduct which mandates standards of conduct for patent attorneys and trademark attorneys which sets out requirements dealing with core obligations (section 11), responsibility (section 12), integrity (section 13), competency (section 14), diligence (section 15), loyalty (section 19) and complaints (section 27).[18]
Each of the Respondent’s directors is responsible for the work, acts and defaults of each of its patent attorneys, including the Applicant during his employment.[19]
Mr Chan had been instructed by Mr Leung, a long-standing client, to draft, finalise and file a provisional patent application for his invention.[20]
A provisional application, once filed, establishes a priority date for the invention.[21]
A patent attorney should give prompt attention to the drafting of the patent specification, liasing with the client to obtain necessary information and sending the client the draft for approval before filing.[22]
The directors of the respondent learnt (from Mr Chan) that the Applicant had:
onot followed the instructions of Mr Chan who had delegated the Leung case to him;
onot diligently followed up with the client to obtain the necessary information;
owhen information was received from the client on 19 April 2023, not acted on it;
oafter Mr Chan instructed the Applicant to respond to the client requests as to progress, failed to do so; and
oexcused himself from doing the work, even though he was the only patent attorney who was technically qualified to do the work.[23]
After Mr Chan informed her of the events relating to the Leung matter, she agreed with the other directors and Ms Dixon that a disciplinary meeting was necessary and at that stage the directors believed the Applicant’s conduct was serious misconduct but wanted to hear the Applicant’s views.[24]
The first disciplinary meeting
On 29 May 2023 at 12:53pm Ms Dixon wrote to the Applicant requesting a formal meeting at 3pm on 31 May 2023 to discuss his “lack of performance in relation to the Chris Leung matter”. The email, a copy of which was attached to Ms Dixon’s witness statement, requested that the Applicant confirm by return email his attendance and who his support person would be.
The Applicant responded to Ms Dixon’s email stating he would be working from home but could “do the meeting via teams”. Ms Dixon responded stating that as the Applicant had not sought or received permission from the Directors or put in a proposal to be working from home for their consideration he was required to be physically in the office for the meeting. Ms Dixon’s evidence was that the Applicant had previously been requested to submit a work from home proposal instead of “taking random days working from home” and had not done so.[25]
Ms Dixon also said in her statement that the Applicant did not respond to the email requiring his attendance at the office for the meeting and a Microsoft Teams meeting was set up for 3pm on 31 May 2023.
Ms Dixon’s evidence in relation to the meeting[26] was that:
· The attendees she knew were present included the Applicant, who was not facing directly into the camera, Mr Chan and Ms Dixon.
· Ms Dixon opened the meeting and explained the Respondent’s concern about the Applicant’s communication with Mr Chan and the client “Leung”.
· The Applicant was asked to explain why he didn’t communicate with Mr Chan about the task entrusted to him, long before the client sent correspondence asking whether he should be looking for another firm to do the work.
· The Applicant explained that the client was communicating random nonsense and wasting time, that the estimated fee of $12,000 was not enticing for the Respondent given the vague information supplied by the client and that as the client was based in Hong Kong could disappear and the Respondent would not be able to collect the monies.
· The Applicant stated that he didn’t feel it would be responsible to take on the work.
· Ms Dixon asked the Applicant why he did not raise his concerns with Mr Chan if he held them.
· The Applicant apologised for not communicating with Mr Chan about the client.
· Ms Dixon “walked through” a disciplinary letter and how his actions breached his employment contract.
· The Applicant stated that he didn’t have a signed contract to which Ms Dixon advised that he did have a contract even if it is not signed and that there is an implied contract due to him being paid as an employee.
· The Applicant asked for proof of his contract.
· Mr Chan raised that this was not the first time the Applicant had not communicated with him about a client and that he had recently sent an email to the Applicant and an administrative assistant, Karen, about being included in the communication. Mr Chan also raised an incident in 2022 when the Applicant had not communicated with him about a client.
· The Applicant then “aggressively stated” that he didn’t have respect for Mr Chan and that the recent email made him respect Mr Chan less than before.
· Ms Dixon asked the Applicant how he thought he could continue to work with the firm when one of the larger fee earners wouldn’t feel comfortable about giving him work and when he has no respect for the person. The Applicant did not respond.
· Ms Dixon then said that the Applicant would need to be in the office each day and that work from home was not permitted. Ms Dixon also told the Applicant he would need to bill between $5,000 and $7,000 per week.
· The Applicant did not think this was fair when others were working from home and under billing.
· Ms Dixon stated that there had been previous discussion around the Applicant contacting past contacts to build up work yet to date nothing had been seen.
· The Applicant again “aggressively” raised that Mr Chan was dishonest and had lied on a statutory declaration. The Applicant said he identified this after an email that Andy Chrysiliou had sent to staff asking if anyone was aware of anything that may affect the Respondent’s professional indemnity insurance, that he had proof and would take it to the board.
· Mr Chan said “do what you need to do”.
· Ms Dixon said that discussion needed to be brought back to the issue raised about the “Leung” matter.
· Ms Dixon told the Applicant that he needed to be in the office five days a week, needed to meet billing targets and needed to sign in when entering the office.
· Ms Dixon told the Applicant that a warning letter would be sent to the Applicant for review and acknowledgement.
The Applicant’s evidence[27] was that during the course of the meeting on 31 May 2023:
· he made the point that “the crux of the problem was a clear mutual breakdown in relationship between Mr Chan and the Applicant which had culminated in a mutual lack of trust and professional respect”;
· he pointed out that at no point in his employment had he ever been provided with nor signed an employment contract;
· this was refused and he requested a copy of the contract and minutes of the meeting, neither of which were provided;
· he was advised that a warning letter had been prepared and would be emailed to him for a response after the meeting.
By way of summary Mr Chan’s evidence was that:
· during the disciplinary meeting the Applicant responded to Ms Dixon’s queries by stating that the client had been communicating nonsense and wasting time;[28]
· “in an attempt to deflect queries and criticism” the Applicant “made a serious personal attack” on Mr Chan’s professionalism and threatened to report him to the board that oversees conduct by Patent Attorneys and Trademark Attorneys”. Mr Chan said the Applicant also tried to “intimidate” him “by saying repeatedly that he had no respect for [Mr Chan], using an aggressive and extremely disdainful tone”;[29]
· the Applicant’s “verbal abusiveness and aggressiveness” made him feel he would be “uncomfortable and awkward even just to be around him in the office”;[30]
· he reflected on the Applicant’s conduct after the meeting and felt the Applicant’s responses were dishonest, deflective, aggressive and arrogant;[31]
· he formed the view that the Applicant was in denial about his misconduct, showed no contrition and that “the Applicant’s lack of honesty and lack of readiness to admit faults in the meeting” led Mr Chan to feel he could no longer trust the Applicant with client matters.[32]
Ms Corfield’s evidence was that she was present as a support person for the Applicant during the meeting of 31 May 2023 and did not, on her assessment, observe the Applicant acting in a way that was aggressive or abusive but did note during the hearing that the meeting became tense at one point.
The second disciplinary meeting
Mr Chan’s evidence was that:
· he and Ms Dixon reported the Applicant’s conduct to the other Directors of the Respondent including Kerry Chrysiliou and Lincoln Chrysiliou and it was decided that the Applicant would be put on suspension until the disciplinary dispute was resolved;[33]
· after further consideration by the Directors it was decided that a second disciplinary meeting would be required between the Applicant and another Director of the Respondent “with a view to trying to get the Applicant back on track”.[34]
Ms Chrysiliou’s evidence was that after the disciplinary meeting on 31 May 2023 Ms Dixon and Mr Chan reported to the Directors that the meeting ended without resolution of the Leung matter because the Applicant had “gone on the attack against [Mr Chan], expressing a lack of respect for [Mr Chan] and accusing [Mr Chan] of professional misconduct.”
Ms Chrysiliou said:
·she was concerned that the Applicant may have been vindictive and may have attempted to damage the Respondent’s database and systems;[35]
·after discussion in the late afternoon of 31 May 2023 the Directors requested that Lincoln Chrysiliou cut off the Applicant’s access to the Respondent’s database and electronic systems.[36]
Ms Dixon’s evidence [37]was that:
· she spoke with the Directors and recommended that another Director attend a follow up meeting with the Applicant due to the way the Applicant had spoken to Mr Chan;
· the Directors decided that the Applicant’s attendance at the office would be suspended until the matter was resolved.
Ms Dixon sent the Applicant an email notifying him of his suspension on 31 May 2023 and inviting him to a further meeting with Ms Chrysiliou and Ms Dixon to be held on 2 June 2023.
The Applicant responded the following morning, denying that his behaviour was aggressive or abusive and revealing that he had a support person with him at the Teams meeting the previous day.
Ms Dixon’s evidence was that she was unaware that the Applicant had a support person at the Teams meeting, that the Applicant did not reveal during the meeting that there was a support person present and that she could not see a person with the Applicant during the meeting.[38] Ms Dixon requested that the Applicant identify any support person he intended to bring to the 2 June meeting to allow the Respondent “sufficient time to approve or exclude the support person”. [39]
The Applicant’s evidence was that on 2 June 2023 at 10.35am he received an email from Ms Dixon providing the warning letter for his review and response and this gave him a very short time frame in which to prepare a response in time for the meeting scheduled at 2pm that same day.[40]
The Applicant’s evidence was that, together with his support person Ms Corfield, he attended the meeting with Ms Chrysiliou and Ms Dixon and presented his written response to the warning letter.[41] The Applicant provided a copy of that letter in which, by way of summary, the Applicant:
raised a concern that he had not received the minutes of the meeting of 31 May 2023;
raised a concern about lack of human resources support and the behaviour of Mr Chan;
indicated it was “surprise and disappointment to have a disciplinary meeting called, despite no attempts at mediation of discussion prior”;
expressed an understanding that “disciplinary action should not be taken lightly by employers and steps to identify and improve apparent under-performance should be undertaken first.”
The letter goes on to state that the Applicant recalled that during the meeting of 31 May 2023 it was explained to him that disciplinary action was warranted in relation to the Leung matter because:
he took a decision not to act on a piece of work;
the work was requested by a senior partner (Mr Chan);
he did not communicate to Mr Chan that he had not done the work as requested; and
his lack of action caused the firm reputational harm.
The Applicant responded to each of the above points in the letter. In relation to the statement that ‘he took a decision not to act on a piece of work, the Applicant said in his correspondence, by way of summary:
he was “of the impression that the request was at an estimate stage for potential drafting work as no budget was mentioned or specified”;
he was “provided hearsay knowledge of discussions [Mr Chan] had with the client”;
he informed Mr Chan that “the nature of the alleged invention was vague in detail and did not make sense”;
Mr Chan provided him with some documentation provided by the client which the Applicant reviewed;
he advised Mr Chan that “the documentation did not clarify things and, in fact, appeared to contradict some of the knowledge that [Mr Chan] had earlier provided”;
he and Mr Chan agreed that the best course of action was to seek more information from the client;
Mr Chan stipulated that he would prefer that the Applicant be the primary contact for the client and would convey an email to the client;
the client’s reply took a while and included scant further detail which did not improve the clarity of what the invention was and suggested further contradictions;
Mr Chan indicated that he would prefer that the Applicant take over communication with the client to attempt to obtain the information required and recommenced that he provide the client with a draft specification providing an indication of where further information should be added by the client;
he disagreed with this approach as the draft specification would be in effect blank and not a good look;
he emailed the client and provided some specific questions and comments to extract the details to even begin drafting work;
when he eventually received a reply he was otherwise busy with other work and pressing deadlines and was not able to give full consideration to the substance of the reply;
when Mr Chan left for INTA he enquired where things were at and the Applicant noted he was still to properly review the client’s comments and not in a position to assess what action was required;
Mr Chan directed him to do so and the Applicant agreed;
upon reviewing the client’s comments not only was the issue not clarified but the comments were in conflict with the materials provided before and at this stage he perceived “something was not right”;
the continued inability of the client to provide requested information was suggesting that the potential invention was not at an enabled state and potentially not ready for filing a patent application;
at this stage no case file had been opened and the Applicant had nowhere to record the time spent on the matter;
he was concerned about the continued lack of an established budget or advance payment from the client given the client was overseas;
he undertook an assessment of the client’s work history with the firm and noticed the client had only a handful of matters in their name and had a reputation for being difficult and slow to pay their bills;
he formed the belief that the matter risked taking up unbillable time and “given the perceived state of play of the alleged invention” he felt there was no real loss of intellectual property rights at risk;
when Mr Chan emailed him to say that the client was chasing a reply, he informed Mr Chan of his concerns and advised that it would be best if he was excused from the work and that it be given to another colleague, noting that was the client’s request.
In the letter the Applicant also stated that he accepts that he did not communicate with Mr Chan that he had not done the work requested and that he apologised for this at the meeting. However the letter also states that he does not believe that this warrants disciplinary action being recorded. The Applicant also states that as the work was unlikely to be patent ready there was no realistic risk of any loss of rights.
The letter also states that at the meeting the Applicant was told he would be required to meet the following requirements, or his employment would likely be terminated:
work from the office five days a week, 9am to 5pm;
use the firm’s clock-in/clock-out’ system when arriving and leaving the work office;
have monthly billings between $7,000 and $9,000.
The Applicant stated in the letter that he did not believe the above requirements to be reasonable, fair nor a genuine attempt to improve his perceived under-performance and that it was unclear how the actions would contribute to improvement in communication which was the central issue. The Applicant also stated that the requirements were particularly unreasonable given the nature of his parental and carer responsibilities as a single parent of a high-school aged student and that he had communicated these parental responsibilities to the Respondent.
The Applicant also stated in the letter that during the course of the meeting he raised concerns about the professional conduct of Mr Chan and was accused of “making things up”. The Applicant makes reference to a matter number in which he alleges Mr Chan provided misleading information in a statutory declaration relating to an extension of time.
The Applicant’s evidence was that during the course of the meeting, it appeared to be agreed that the mutual breakdown in the relationship between Mr Chan and the Applicant was at the heart of the problem and may have been irreparable.[42]
In relation to the second meeting with the Applicant on 2 June 2023, Ms Dixon’s evidence was that:
the meeting was attended in person by Ms Dixon, Ms Chrysiliou, the Applicant and the Applicant’s support person Ms Corfield;
the Applicant provided a five page letter in response to the disciplinary letter he had received that morning;
Ms Dixon and Ms Chrysiliou read the letter;
Ms Chrysiliou asked a series of questions around the “Leung” matter;
in response to Ms Chrysiliou’s questions the Applicant stated he had other pressing deadlines on 19 April 2023 to complete;
the Applicant then stated that the crux of the matter was a relationship breakdown with Mr Chan;
Ms Dixon stated that “the Directors work as a collective and all can give work to [the Applicant], not only [Mr Chan]”;
Ms Chrysiliou then asked questions around the Applicant’s family responsibilities, which the Applicant had referred to in his response letter;
the Applicant stated he needed flexibility in his working hours rather than a set day to work from [the office] as it was a reasonably significant commute between the Respondent’s office and home;
Ms Chrysiliou then asked questions around the issue of the statutory declaration that the Applicant had raised during the first meeting;
the Applicant stated that a date in the statutory declaration was wrong as Mr Chan’s secretary was away on the date (a Friday) stated in the declaration;
Ms Dixon stated that Mr Chan and his secretary have an agreement that she would work on the Friday when necessary;
Ms Chrysiliou asked the Applicant about his employment contract and he stated he received an email with the contract that it was a draft and that he wouldn’t know what the final contract was;
Ms Chrysiliou “re-confirmed the standard conditions of employment around hours and signing / in out that all employees abide by”;
the Applicant stated that he would not have taken the job as he had never had to sign in anywhere post university;
discussion moved onto billing and the Applicant was asked if he had asked the partners for more work;
the Applicant acknowledged that he received work from “Maryam” and stated he had not received work from Mr Chan and believed he could increase billing with more work from Mr Chan;
Ms Chrysiliou asked the Applicant how he could see himself staying with the firm and billing enough to cover his salary to which the Applicant said if he had more work he would do it;
at 3.05pm the meeting was adjourned whilst the Applicant’s responses were considered;
the meeting recommenced at 3.20pm;
Ms Chrysiliou proposed:
oa rotating week of start and finish times to accommodate the family care needs;
othe Applicant would need to sign in and out when attending the office;
the Applicant was asked how he could repair the relationship with Mr Chan in order to receive more work from him;
Ms Dixon asked the Applicant how he saw things “working with the rest of the office” if he didn’t repair the relationship with Mr Chan;
the Applicant had no suggestions on how to repair the relationship;
Ms Dixon asked the Applicant to think about some solutions and to come back to the Directors on Monday with a proposal;
the Applicant stated he didn’t think the relationship with Mr Chan was repairable.
Ms Chrysiliou’s evidence was that the meeting of 2 June 2023 ended without a solution being agreed, and a further meeting was anticipated.
The Applicant’s response following the meeting of 2 June 2023
On the afternoon of 5 June 2023, Ms Dixon emailed the Applicant following up on his proposal. The Applicant responded later that night via email which, by way of summary:
noted that the Applicant had not received any copies of minutes of the 31 May 2023 or 2 June 2023 meetings;
noted that the Applicant had not been provided with a copy of his final employment contract;
summarised the Applicant’s understanding of the “key issues underpinning the disciplinary action” being “bringing the reputation of the firm into disrepute” and “unsatisfactory communication” with Mr Chan;
suggested that the Applicant’s intention was not to bring the reputation of the firm into disrepute but was the opposite;
suggested that the Applicant’s unsatisfactory communication with Mr Chan was attributable to a breakdown in the relationship between the Applicant and Mr Chan;
stated that it was suggested [at the meeting] that resolution would require the Applicant to meet the following three criteria:
1.abiding by agreed working hours including mandatory physical attendance at the office;
2.using the clock-in/clock-out device when physically attending the office; and
3.meeting prescribed billing targets.
In respect of the first criterion above, the Applicant stated in the letter “I believe an agreement can be reached to allow me to meet the criterion”. In respect of the second criterion the Applicant stated “I believe I could concede to comply with the criterion, albeit under protest.” In respect of the third criterion the Applicant stated:
“…you noted quite correctly that we face a conundrum. I have no issues with agreeing to having billing targets. The figures mentioned are reasonable and within my skills and competence to meet. However, the ability for me to achieve billing targets requires my having a sufficient stream of billable work flowing to me. Given [Mr Chan’s] significant control of suitable billable work and his stated distrust of me, I am unlikely (and in fact I have learned that I have been denied for some time) the required level of billable work from him. Without access to this stream of billable work, it would be practically impossible for me to achieve the billing targets.
When issues of billing levels have been raised in the past, usually by Maryam and Annette, my consistent answer has been to give me more billable work and it was indicated that such work would flow from [Mr Chan]. The required flow never eventuated and I now know that this was due to a mistrust of me by [Mr Chan], which was never communicated to me.
At the core of the conundrum is the breakdown in professional relationship between [Mr Chan] and I; and whether this relationship is irreparable. I was given the impression that [Mr Chan] believes the relationship is irreparable. Given the length of time this has been allowed to fester, I may have to agree with him. I must emphasise that from my perspective this is not a personal issue but it is a professional one.
I was requested to provide potential resolutions to the relationship issue. As I pointed out, I am open to suggestions but have not received any from your end.
I am unsure of any viable recommendations I can make which would guarantee a satisfactory outcome. Consequently, I offer suggestions in line with guides provided by the Fair Work Ombudsman. However I note that these suggestions may not be feasible, as a number of assumed standard HR practices the Ombudsman refers to are not used in the firm”.
The Applicant’s letter goes on to reference guidance materials from the Fair Work Ombudsman about workplace communication, suggests engagement of an external mediator, suggests clarification about who the Applicant’s manager is and implementation of a performance management framework as well as making suggestions to improve billable work.
The Applicant’s letter concludes:
“Given the lack of work allocated, an alternative conclusion is that my role as Senior Patent and Trade Mark Attorney may be redundant and excess to the actual requirements of Chrysiliou IP. Consequently, anybody filling this role would run into trouble meeting the criteria stipulated. I suggest that the firm’s requirements would be better met by a more junior level attorney.
In view of the above, it may be appropriate to consider redundancy as a viable solution when we further discuss and agree on a way forward.
I look forward to hearing from you and receiving the requested documentation.”
The decision to dismiss the Applicant
Mr Chan said in his statement that after the second disciplinary meeting:
· the Directors were told that during this meeting the Applicant showed no contrition;
· the Directors found out that, although the Applicant had given the excuse that he was too busy to attend to the Leung email of 19 April 2023, he was instead engaging in extensive personal website browsing, wasting time when he could have been carrying out work for the Respondent, including work on the Leung matter;
· the Directors felt that the Applicant could no longer be trusted to behave with the integrity and standards required of a patent attorney, that there was no point in having further communication with the Applicant because he could not be believed and that they had no option but to terminate his employment with immediate effect.
Ms Chrysiliou’s evidence was that after she saw the Applicant had been browsing websites of personal interest to the Applicant for many hours during the days he was being paid to work for the Respondent, she realised that the Applicant had lied to the Respondent as to the cause of his misconduct which triggered the disciplinary meetings on 31 May and 2 June. Ms Chrysiliou said she was shocked by the Applicant’s dishonesty, as well as the fact that the Applicant was not performing the work the Respondent was paying him for but instead was browsing sites of personal interest to the Applicant.
Mr Chrysiliou’s evidence was that aside from working on legal matters, he also looks after the IT systems and infrastructure. Mr Chrysiliou said that on 2 June 2023 he was forwarded by email a copy of the written response of the Applicant to the 31 May 2023 disciplinary meeting and that upon reading the response he noted that the reason given for not attending to the Leung matter was that the Applicant was “otherwise busy with other work and pressingly deadlines and was not able to give full consideration to the substance of the reply.”
Mr Chrysiliou said on 4 June 2023 he accessed the Applicant’s work computer remotely so he could view the client email regarding the Leung matter and upon searching Outlook located the Leung email and noted it was dated 19 April 2023. Mr Chrysiliou said he looked at the Applicant’s browsing history, focusing on the days following 19 April 2023, and noted substantial internet browsing of non-work sites.
Mr Chrysiliou said:
to get a better feel for the extent of the personal internet browsing activity by the Applicant he installed a Chrome plugin on the workstation he uses at work that allowed him to export the Applicant’s internet browsing history;
he set a date range so it picked up browsing history from 20 April 2023 to 28 April 2023;
after reviewing the report in an excel spreadsheet, he found the personal browsing by the Applicant to be very extensive;
on 4 June 2023 he sent a report of the Applicant’s internet browsing history to Ms Dixon, Ms Chrysiliou, Mr Chan, Ms Tabari and Mr Chrysiliou;
on 6 June 2033 he created a modified version of the report by adding a view on a second sheet where he had removed the obvious work-related browsing and left those pages he considered to be personal internet browsing;
he identified substantial browsing of sites (amongst other subject matter) relating to books, music, bands, personal email, PlayStation games, eBay listings, music festivals, movies/films and comics.
The report of the Applicant’s browsing history was attached to Mr Chrysiliou’s statement and shows the date, time, title and URL of websites visited. The Respondent submitted this establishes “time wasted by the Applicant” to be 7.32 hours over 4 days, not counting browsing during lunch periods, and dishonesty during the disciplinary process as he was not too busy with other work and pressing deadlines when he received an email from the client on 19 April 2023 that he did not respond to.
During the hearing the Applicant asked Ms Chrysiliou how she formed a view about what aspects of the browsing were personal rather than professional. Mr Chrysiliou’s response suggested that the answer to this was “obvious” and “irrefutable” and as such the Respondent did not think to speak to the Applicant about this. I asked Ms Chrysiliou why the Respondent came to the conclusion that the dishonesty based on the browsing history was irrefutable. Ms Chrysiliou responded this was on account of the nature of the websites which included a large number of music interest websites, eBay, a large number of books and occasional articles about where songs were not written about someone within a band. I asked Ms Chrysiliou what inferences she drew from the browsing history. Ms Chrysiliou responded indicating the inference she drew was that the Applicant was spending a large part of his time browsing the internet for his own personal interest. Mr Chrysiliou said that if the personal browsing had been a standalone matter without the Leung or other matters being relevant it would have called the Applicant in for another disciplinary meeting and may have issued a warning letter. However, because of the excuse the Applicant provided for not doing the work in the Leung matter, the Respondent formed the view this was dishonesty.
The Applicant’s response to these specific allegations throughout these proceedings was limited, although he took issue with the Respondent failing to put the allegations about the browsing history to him before his dismissal and did suggest during the hearing that the browsing history related to both personal and professional activities and there may be some work connection to some of these browsing activities.
Findings
I find that the reason for Applicant’s dismissal was related to both his performance and conduct. The performance issue related to the Applicant’s handling of the Leung matter. While the Applicant attributes his inaction on the matter to concerns about the quality of the information he was getting from the client, rather than working with the client and Mr Chan to overcome this he simply failed to respond to the client’s communications. In his email of 19 April 2023 Mr Leung specifically said to the Applicant “Feel free to let me know if you may need more detailed information”, yet the Applicant did not do so. I accept Ms Chrysiliou’s evidence that it was the Applicant’s role as patent attorney to give prompt attention to the drafting of the patent specification, liaise with the client to obtain necessary information and send the client the draft for approval before filing. Mr Chan had told the Applicant to action the application and he agreed to this but appears to have ‘given up’ or prioritised other activities when the information from the client did not satisfy him. I accept that failing to action the provisional patent application for the client in a timely manner and maintain communication with the client and Mr Chan about this had the potential to create risk for the firm and its directors and that the Applicant’s management of the client was unsatisfactory.
The Applicant’s conduct when the performance concern was brought to his attention also warrants consideration. Rather than acknowledging his shortcomings and committing to steps to address the performance failure when it was raised, the Applicant instead sought to ‘excuse’ himself from the client matter and raised a number of excuses for his poor management of the mater including blaming the information provided by the client and suggesting a risk that the client would not pay his debts. I accept that while the Applicant apologised for not communicating with Mr Chan about the client during the meeting on 31 May 2023, the Applicant sought to deflect attention away from the performance concerns and his poor response to them and instead turned the attention on alleged wrongdoing by Mr Chan.
When the Respondent attempted to hold a further in person meeting to discuss the concerns with the Applicant, the Applicant informed the Respondent that he would participate in the meeting via Microsoft Teams from home when this was not his decision to make. While the Respondent ultimately enabled the Applicant’s participation in the meeting via Microsoft Teams, the Applicant’s response to the request for a meeting and failure to advise the Respondent that his partner was present on the Microsoft Teams call are also indicative of his poor attitude toward the process the Respondent was attempting to undertake to address the Applicant’s performance. The Applicant’s response to the warning letter dated 2 June 2023 also states that he does not believe that disciplinary action was warranted, indicates that the Applicant was unsure of any viable recommendations he could make which would guarantee a satisfactory outcome and also offers redundancy as a potential solution. Such statements do not point to a constructive outcome involving the Applicant continuing his role in a way that addressed the Respondent’s legitimate performance concerns.
It seems likely that the Applicant’s poor response may have been driven by frustration due to a breakdown in the relationship between himself and Mr Chan. However the Applicant’s response when the performance concerns were raised and attempts at deflection rather than self-reflection regarding his performance shortcomings led Mr Chan and the Respondent to a view that they could not be satisfied that the Applicant would perform his duties diligently for them in the future. This clearly affected the relationship of trust and confidence between the Respondent and Applicant. Further, I do not consider that the Applicant has provided a reasonable explanation for his failure to respond to the client’s email of 19 April 2023, especially in circumstances where the client had sought to be advised as to whether more information was required.
The reason for the dismissal given to the Applicant by the Respondent was that he was dishonest in the disciplinary process. This arises from the Respondent’s discovery of personal browsing when the Applicant said he was otherwise busy with other work and pressing deadlines and was not able to give full consideration to the substance of the client’s email of 19 April 2023. I do not consider the browsing history to be enough in itself to establish serious misconduct, particularly in the modern, digitally connected era where employees may sporadically access the internet for both work related and personal purposes across their working day. It is unlikely that the browsing history would have resulted in the Respondent’s decision to dismiss the absent concerns that the Respondent had about the Applicant’s performance and it is unclear to me how much time needed to be diverted away from the browsing and other activities to be directed to the application in the Leung matter. I also consider that the browsing history together with the response of the Applicant does not lead to a conclusion of dishonesty, particularly as I am not satisfied that the time required to be spent in relation to the Leung matter equates to the time spent browsing. The Applicant’s response and browsing activity does however suggest the Applicant attached higher priority to other matters when he should have directed greater attention to the Leung matter, particularly having been asked by Mr Chan to do so.
While I am not satisfied that the Applicant’s internet browsing history establishes dishonesty or that the Applicant’s conduct amounts to serious misconduct, the Applicant’s response when the performance concerns were brought to his attention was a poor one. It is clear from the Applicant’s response and conduct that the Respondent could not have had confidence that the Applicant would have made adjustments in his approach so he could perform to expectation in the future, in a context where failure to perform could have implications for clients’ intellectual property rights and give rise to a risk of liability for the Respondent. I am satisfied that there was a valid reason for the dismissal based on the Applicant’s poor performance and unsatisfactory conduct when the performance issue was brought to his attention which ultimately led to the Respondent losing trust and confidence in the Applicant.
Section 387(b) - Was the Applicant notified of the valid reason?
Proper consideration of s.387(b) requires a finding to be made as to whether the applicant “was notified of that reason”. Contextually, the reference to “that reason” is the valid reason found to exist under s.387(a).[43]
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[44] and in explicit[45] and plain and clear terms.[46]
In its Termination Letter dated 6 June 2023, the Respondent states:
“It is for the reason for your dishonest conduct during the disciplinary process, that we consider your actions constitute serious misconduct warranting summary dismissal.”
The basis for this, as set out in the Termination Letter is that the Applicant had explained during the meeting on 2 June 2023 that he was not able to give full consideration to the substance of the client’s reply dated 19 April 2023 because he was otherwise busy with other work and pressing deadlines and that its review of the Applicant’s browsing history suggested otherwise.
While I have earlier accepted that the Applicant chose to prioritise other activities over the Leung matter, I did not find that he was dishonest or that this was the reason for the dismissal. Rather, the valid reason for the dismissal was the Applicant’s poor performance and unsatisfactory conduct when the performance issue was brought to his attention which ultimately led to the Respondent losing trust and confidence in the Applicant.
Ms Chrysiliou’s evidence was that the meeting of 2 June 2023 ended without a solution being agreed, and a further meeting was anticipated. However a further meeting did not occur and the Respondent proceeded to summarily dismiss the Applicant on the grounds stated in the Termination Letter, i.e. dishonesty during the disciplinary process, without the Applicant being notified of the reason for dismissal prior to the decision being made.
In all the circumstances, I find that the Applicant was not notified of the reason for his dismissal.
Section 387(c) - Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[47]
The opportunity to respond does not require formality and this factor is to be applied in a common sense way to ensure the employee is treated fairly.[48] Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.[49]
As noted above Ms Chrysiliou’s evidence was that the meeting of 2 June 2023 ended without a solution being agreed, and a further meeting was anticipated. However such a meeting did not occur and the Respondent proceeded to summarily dismiss the Applicant on grounds that differ from the grounds that I have found constitute valid reason for the dismissal. The Applicant has submitted that no opportunity was provided to respond to the allegations of dishonest conduct.
Notwithstanding this, I have found that valid reason for the dismissal was the Applicant’s poor performance and unsatisfactory conduct when the performance issue was brought to his attention which ultimately led to the Respondent losing trust and confidence in the Applicant. The Applicant was aware of this concern as it had been explained to him in both the meeting of 31 May 2023 and in the email from Ms Dixon on 2 June 2023 attaching a warning letter and inviting a response. I accept the Applicant’s evidence that he only received the email inviting his response at 10.35am on 2 June 2023 ahead of a meeting scheduled at 2pm that same day[50] however the Applicant had been aware of the concerns since the discussions that took place on 31 May 2023, was given an opportunity to raise matters at the meeting on 2 June 2023 and was given an opportunity for a further response following that meeting.
In all the circumstances, I find that the Applicant was given an opportunity to respond to the reason for his dismissal prior to the decision to dismiss being made.
Section 387(d) - Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”[51]
The Applicant brought a support person along to the disciplinary meetings, including without the Respondent knowing he had done so on one occasion, and there is no evidence of unreasonable refusal of a support person.
In all the circumstances, I find that the Respondent did not unreasonably refuse to allow the Applicant to have a support person present at discussions relating to the dismissal.
Section 387(e) - Was the Applicant warned about unsatisfactory performance before the dismissal?
A mere exhortation for an employee to improve their performance would not be a sufficient warning. A warning must:
· identify the relevant aspect of the employee’s performance which is of concern to the employer; and
· make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.[52]
The Applicant was provided with a warning letter on 2 June 2023 which raised the performance concerns and made it clear that the employee’s employment was at risk if such an issue arose again. In all the circumstances, I find that the Respondent did warn the Applicant of his unsatisfactory performance before dismissal.
However I attach little weight to this finding because the warning letter was only four days prior to the dismissal and the events are such that the Respondent moved to dismiss the Applicant shortly after having provided the warning on conduct related grounds.
Sections 387(f) and (g) - Size of the employer’s enterprise and absence of human resource management specialists or expertise
Neither party provided submissions and evidence establishing that the size of the Respondent’s enterprise or absence of human resources management specialists or expertise was likely to impact on the procedures followed in effecting the dismissal. I find that these factors had no such impact.
Section 387(h) – other relevant matters
While I have found that the Respondent had a valid reason for dismissal, it appears to have attempted to bring a swift end to the Applicant’s employment upon discovery of browsing history which it submitted establishes “time wasted by the Applicant” to be 7.32 hours over 4 days, not counting browsing during lunch periods as well as dishonesty during the disciplinary process.
The Applicant’s response to these specific allegations throughout these proceedings was limited although he did suggest during the hearing that there may be some work connection to some of the browsing activities. I have earlier found that the browsing history is not itself enough to establish serious misconduct or dishonesty, particularly in the modern, digitally connected era where employees may access the internet for both work related and personal purposes across their working day. If the Respondent had sought to dismiss the Applicant on conduct related grounds relating to his browsing history and alleged dishonesty, it should have put that concern to him and given him an opportunity to respond before it dismissed him summarily. The Respondent’s actions in bringing a swift end to the Applicant’s employment upon discovery of the browsing history have resulted in procedural deficiencies in relation to the dismissal, including a failure to notify the Applicant of the reason for dismissal that I have found as being the actual and valid reason for the dismissal.
I also consider that the Applicant’s dismissal without notice was likely motivated by commercial considerations. Ms Chrysiliou had become concerned that the Applicant may have been vindictive and may have attempted to damage the Respondent’s database and systems.[53] Given the nature of the Respondent’s work it is likely that the Respondent considered that the Applicant may have become a risk to the business, driving a desire to bring a swift end to the Applicant’s employment without putting to the Applicant the allegations of serious misconduct and dishonesty that were ultimately given to him as the reasons for his dismissal.
Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?
I have made findings in relation to each matter specified in section 387 as relevant.
I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[54]
Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of the Applicant was harsh because of the abrupt nature in which dismissal was affected with the Respondent notifying the Applicant that this was on the grounds of dishonesty and serious misconduct without putting its allegations concerning the browsing activity and dishonesty to him before moving to dismiss him summarily. As noted above, the Respondent’s actions in bringing a swift end to the Applicant’s employment upon discovery of the browsing history have resulted in procedural deficiencies in relation to the dismissal, including a failure to notify the Applicant of the reason for dismissal that I have found as being the valid reason for the dismissal.
Conclusion
I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the FW Act.
Being satisfied that the Applicant:
· made an application for an order granting a remedy under section 394;
· was a person protected from unfair dismissal; and
· was unfairly dismissed within the meaning of section 385 of the FW Act,
I may, subject to the FW Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.
Under section 390(3) of the FW Act, I must not order the payment of compensation to the Applicant unless:
(a) I am satisfied that reinstatement of the Applicant is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.
Is reinstatement of the Applicant inappropriate?
The Applicant did not seek reinstatement and it is apparent to me that the relationship between the Applicant and Mr Chan had deteriorated to the point where the Applicant was seeking an exit and had even suggested role redundancy as a way forward. The Applicant has also secured alternative employment, which he commenced on in 14 August 2023 earning more than he did prior to his dismissal. The Applicant wishes to remain employed by his current employer. As noted in Taylor v C-Tech Laser Pty Ltd[55] “the Applicant’s disposition is a sure guide to the Commission as to whether or not it would be appropriate to reinstate or re-employ the Applicant. To act contrary to the Applicant’s desired position in this respect would be to give effect to an order that may not yield a productive or cooperative workplace.”[56] Further, having regard to the attitudes of the parties in this matter, I am not satisfied that a sufficient level of trust and confidence can be restored to make the relationship between the Applicant and Respondent viable and productive.[57]
Having regard to the matters referred to above, I consider that reinstatement is inappropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.
Is an order for payment of compensation appropriate in all the circumstances of the case?
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”[58]
Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[59]
The Applicant was dismissed on 6 June 2023 and did not commence his new employment until 7 August 2023.
I am satisfied that the Applicant has incurred financial loss and that an order of payment of compensation is appropriate.
Compensation – what must be taken into account in determining an amount?
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:
(a)the effect of the order on the viability of the Respondent’s enterprise;
(b)the length of the Applicant’s service;
(c)the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d)the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e)the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and
(g)any other matter that the Commission considers relevant.
I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
I have no evidence before me to suggest an order for compensation would have an effect on the viability of the employer’s enterprise. I find an order for compensation would have no such effect.
Length of the Applicant’s service
The Applicant’s length of service was just over two years.
I consider that the Applicant’s length of service does not support reducing or increasing the amount of compensation ordered.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
As stated by a majority of the Full Court of the Federal Court, “[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.”[60]
During the hearing the Applicant conceded that he was unlikely to have continued working for the Respondent for very long on account of this poor relationship and the Applicant’s conduct during the process instigated in May in response to Mr Chan’s legitimate performance concerns did not assist this. The statements made by the Applicant in his letter following the meeting on 2 June 2023 suggest it is likely that the Applicant was less interested in finding a way forward with the Respondent than he was in discussing a ‘way out’.
The Applicant submitted that had he been offered the opportunity to resign rather than be terminated he would have chosen to resign and sought three weeks pay, being the minimum notice period he would have received under the FW Act.
Even if the Applicant did not resign, the Respondent had a valid reason to dismiss him. However, I have found that this valid reason related to performance and conduct grounds that fell short of serious misconduct and in these circumstances the Applicant would have ordinarily been provided with notice of termination or would have been paid in lieu.
I find that:
· the Applicant’s employment would have been likely to continue for a period of three weeks but for the dismissal; and
· during this period the Applicant would have earned $6,230.77.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.[61] What is reasonable depends on the circumstances of the case.[62] The Applicant sought and ultimately secured alternative employment a short time after his dismissal. I am satisfied that the Applicant took reasonable steps to mitigate his loss.
Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation and amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation
As I have found that the Applicant would only have remained employed for a further period of three weeks, this is the period to be considered. I am satisfied that during this period the Applicant did not earn any income.
Other relevant matters
I have not identified any other matters relevant to the assessment of compensation.
Compensation – how is the amount to be calculated?
As noted by the Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[63] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[64].”[65]
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 1
I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment to be $6,230.77 on the basis of my finding that the Applicant would likely have remained in employment for a further period of 3 weeks. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”.[66]
Step 2
Only monies earned since termination for the anticipated period of employment are to be deducted[67] and I have earlier found that the Applicant did not earn any income in the three weeks following his dismissal. As such there is no money to be deducted from the sum of $6,230.77 referred to at step 1.
Step 3
I now need to consider the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment.[68] There are no facts in this matter that would warrant an adjustment for contingencies.
Step 4
I have considered the impact of taxation but have elected to settle a gross amount of $6,230.77 less taxation as required by law.
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”[69]
I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.
Compensation – is the amount to be reduced on account of misconduct?
If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
I have considered the conduct of the Applicant holistically including his unsatisfactory performance in relation to the Leung matter with no reasonable explanation, his attempt to ‘excuse’ himself from the Leung matter when the performance concern was raised, bringing a third party to a disciplinary meeting without notifying the Respondent and the Applicant’s attempts at deflection when the performance issues were raised with him. I find that the Applicant’s behaviour considered as a whole, amounts to misconduct, and that this behaviour was a significant factor in the Respondent’s decision to dismiss him. Mr Chan felt the Applicant’s responses when the performance issues were raised were dishonest, deflective, aggressive and arrogant[70] and that “the Applicant’s lack of honesty and lack of readiness to admit faults in the meeting” led him to feel he could no longer trust the Applicant with client matters.[71] Had the Applicant shown genuine contrition and not behaved in the way that he did when the performance concerns were brought to his attention, he may well have been able to salvage a relationship with Mr Chan and the Respondent and remain employed. However, the Applicant’s behaviour led to his own demise.
In all the circumstances, I am satisfied that the appropriate amount by which to reduce the amount of the order for compensation on account of misconduct is 50%.
Applying this reduction to the amount determined at step 4 above, the gross amount of compensation to be ordered, subject to the compensation cap discussed below, is $3,115.39.
Compensation – how does the compensation cap apply?
Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:
(a)the amount worked out under section 392(6); and
(b)half the amount of the high income threshold immediately before the dismissal.
The amount worked out under section 392(6) is the total of the following amounts:
(a)the total amount of the remuneration:
(i) received by the Applicant; or
(ii) to which the Applicant 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 Applicant 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 Applicant for the period of leave in accordance with the regulations.
The amount of $3,115.39 is well below the compensation cap calculated in accordance with the above methodology.
In light of the above, I order that the Respondent pay $3,115.39 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.
COMMISSIONER
Appearances:
Mr William Ellis on his own behalf.
Ms Kerry Chrysiliou for the Respondent.
Hearing details:
2023
Sydney (in person)
October 11
[1] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
[2] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[3] Ibid.
[4] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[5] Edwards v Justice Giudice [1999] FCA 1836, [7].
[6] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
[7] Commonwealth of Australia (Australian Taxation Office) t/a Australian Taxation Office v Shamir[2016] FWCFB 4185, [45] citing Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 377-8.
[8] APS Group Placements Pty Ltd v O’Loughlin[2011] FWAFB 5230, [51] per majority.
[9] Respondent’s outline of arguments: merits, response to question 4a.
[10] Respondent’s outline of arguments: merits, response to question 4c
[11] Applicant’s outline of arguments: merits, response to question 4c.
[12] Witness Statement of Allen Chan at [1].
[13] Witness Statement of Allen Chan at [2], [7].
[14] Witness Statement of Allen Chan at [2].
[15] Witness Statement of Allen Chan at [7].
[16] Witness Statement of Allen Chan at [8].
[17] Applicant’s ‘Unfair dismissal application Form F2’.
[18] Witness Statement of Kerry Chrysiliou at [4] –[5].
[19] Witness Statement of Kerry Chrysiliou at [5].
[20] Witness Statement of Kerry Chrysiliou at [10].
[21] Witness Statement of Kerry Chrysiliou at [10].
[22] Witness Statement of Kerry Chrysiliou at [10].
[23] Witness Statement of Kerry Chrysiliou at [11].
[24] Witness Statement of Kerry Chrysiliou at [12].
[25] Witness Statement of Annette Dixon., p. 1.
[26] Witness Statement of Annette Dixon., p. 2-3.
[27] Witness Statement of William Simon Ellis.
[28] Witness Statement of Allen Chan at [4].
[29] Witness Statement of Allen Chan at [6].
[30] Witness Statement of Allen Chan at [6].
[31] Witness Statement of Allen Chan at [10].
[32] Witness Statement of Allen Chan at [10].
[33] Witness Statement of Allen Chan at [10].
[34] Witness Statement of Allen Chan at [11].
[35] Witness Statement of Kerry Chrysiliou at [15].
[36] Witness Statement of Kerry Chrysiliou at [15].
[37] Witness Statement of Annette Dixon, p.3.
[38] Witness Statement of Annette Dixon, p.3.
[39] Witness Statement of Annette Dixon, p.3.
[40] Witness Statement of William Simon Ellis.
[41] Witness Statement of William Simon Ellis.
[42] Witness Statement of William Simon Ellis.
[43] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].
[44] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[45] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[46] Ibid.
[47] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[48] RMIT v Asher (2010) 194 IR 1, 14-15.
[49] Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
[50] Witness Statement of William Simon Ellis.
[51] Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1542].
[52] Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44].
[53] Witness Statement of Kerry Chrysiliou at [15].
[54] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
[55] [2013] FWC 8732, [58].
[56] Taylor v C-Tech Laser Pty Ltd[2013] FWC 8732, [58].
[57] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [28].
[58] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[59] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
[60] He v Lewin [2004] FCAFC 161, [58].
[61] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
[62] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
[63] (1998) 88 IR 21.
[64] [2013] FWCFB 431.
[65] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].
[66] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
[67] Ibid.
[68] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
[69] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].
[70] Witness Statement of Allen Chan at [10].
[71] Witness Statement of Allen Chan at [10].
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