Xiaofeng Hou v 3CW Chinese Radio

[2014] FWC 1108

[2014] FWC 1108

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Xiaofeng Hou
v
3CW Chinese Radio
(U2013/11447)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 17 FEBRUARY 2014

Application for relief from unfair dismissal - Radio 3CW terminated Ms.Hou because of her religion.

[1] On 12 July 2013 Mrs Xianofeng Hou filed an application for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) against 3CW Chinese Radio.

[2] The matter was conciliated and no settlement was reached.

[3] A written submission and witness statements were filed by the applicant. I have had regard to all the submissions and evidence. Pursuant to ss.398-399 the matter was conducted by way of conference.

Employer

[4] I am satisfied that the employer was properly notified. The employer engaged in considerable communication with the Commission about this matter after directions for submissions were issued. The employer failed to put any submissions or to appear, notwithstanding the fact that it was obviously aware that the proceedings were under foot and that it was required or given an opportunity to make submissions and to lead evidence. Shortly before the hearing I specifically warned the employer that if it did not attend the hearing the Commission might make a decision based on the material filed and the witness evidence presented 1.

[5] I made my decision on the basis of the material before me, the uncontradicted submissions and witness statements from Ms Hou, the applicant. I reserved my rights to publish further reasons for decision 2. I had the opportunity to observe Ms.Hou and Ms.Li putting submissions and giving evidence. I found them to be direct and truthful in their evidence, which I accept.

Jurisdiction

[6] I am satisfied that the various jurisdictional requirements - limitations in the Act 3 in sections 388-399 are not applicable. The employee is covered by the unfair dismissal provisions of the Act, and has served the required period of service.

[7] As to the date of termination, Radio 3CW sent an email dated 15 June 2013 4, in which it stated that a radio program would be terminated at the end of the month, namely the end of June. That announcement did not state that the applicant, Ms Hou, would be terminated. In any event the program has not been terminated but has continued on.

[8] Ms Hou did not know she was terminated until she contacted Jing Ni by telephone after a number of previous attempts. So she did not know she was terminated until 24 June 2013 5. Her application therefore was made within 21 days of her termination. The termination date on the evidence before me was 24 June 2013.

[9] In the alternative, if the termination was earlier I extend time in this matter, having regard for the reason for delay being lack of knowledge of whether or not she was dismissed, and the poor procedures used by the employer in effecting termination (s.394(3)(a)), she did not become aware of or clearly understood that she was dismissed until 24 June (s.394(3)(b)), she was clearly unhappy about the dismissal although limited in her challenge to it (s.394(3)(c)), there is no prejudice to the employer (s.394(3)(d)), the merits of the application seem strong (s.394(3)(d)), and fairness not being a barrier to extending time (s.394(3)(e)).

[10] This is not a genuine redundancy. Ms.Jing Ni, the General Manager of radio 3CW clearly stated to Ms.Hou that religion not financial reasons were the reason for the termination, and the radio program has continued on in any event 6. Nor do any of the other limitations apply.

[11] Finally, Ms.Hou was on the evidence before me employed as a casual, on regular hours and wages, on a regular and systematic basis, and with a reasonable expectation of ongoing employment on a regular and systematic basis. The radio program set the hours she worked and was regular, and it was a popular program with apparent support. She meets the requirements of s.384(a).

[12] Secondly, on the basis of the submissions put to me, I am satisfied that the business is not a small business within section 23 of the Fair Work Act 2009 7. The head count of employees indicates that it has more than 15 employees8, and casual employees are employed on a similar basis to that of the employee. In addition, Ms.Li said that 3CW is part of a group of associated entities. That means the matter must be determined on the basis of the factors set out in section 387 of the Fair Work Act 20099.

Section 387(a) - Valid Reason

[13] Turning firstly to deal with the criteria for considering harshness in section 387(a), the question is 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.

[14] The term ‘valid reason’ was considered by Northrop J in Selvachandran v. Petron Plastics Pty Ltd 10, in relation to s.170DE of the Industrial Relations Act 1988. He said:

“Section 170DE(1) refers to a ‘valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective ‘valid’. A reference to dictionaries shows that the word ‘valid’ has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is ‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In the Macquarie Dictionary the relevant meaning is ‘sound, just or well founded; a valid reason.’

In its context in s. 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of a s170DC.”

[15] The sequence of events was that on 13 June 2013 Mr.Ying Tong, the program manager of 3CW Chinese Radio sent an email 11 which stated that radio programs would be restructured, and ‘everyone’s programs will be ceased’. On 15 June 2013 an announcement of the termination of Ms.Hou’s program was made on the radio12. Ms.Hou endeavoured to contact the General Manager, Jing Ni, but was unsuccessful. Eventually she was able to speak to Ms.Ni by telephone. Ms.Hou gave evidence that:

“She said to me, ‘The decision has already been made. There is no need to discuss it anymore’.

I said ‘Lida told me that it is a financial issue.’

She said ‘No, Lida got it wrong. I already criticized her about that. It sounds as if our station only cares about money’.

I asked, ‘So do you have any problem with me?’

She answered: ‘No, I have only started working here for three months. I don’t know most of the employees.’

I asked, ‘Then why?’

She replied, ‘Religion’

I asked, ‘Are you sure you dismissed me was not because of financial issues or any personal relationship issues but religion?’

Without any hesitation, she said ‘Yes’ 13.”

[16] I accept Ms.Hou’s evidence. According to the General Manager of Radio 3CW the reason for Ms.Hou’s dismissal was her religion. Ms.Hou is a Christian. The General Manager expressly rejected any other reason for the dismissal. Ms.Hou’s religion is clearly not a valid reason for termination of an employee. Rather, it is a wholly improper and inappropriate, discriminatory decision by the employer. It is of such an unacceptable nature that it may be that there is a real need to educate the staff and management of Radio 3CW in employment and discrimination law, or in the alternative, to ensure that such law is properly enforced.

Section 387(b) - Notified of that reason

[17] I find that since there was no valid reason for termination of Ms Hou’s employment, she was not notified of a valid reason. The fact that she was notified of a reason which is an improper, inappropriate and discriminatory reason is not relevant to that particular section.

Section 387(c) - Opportunity to respond

[18] Ms Hou was not given an opportunity to respond to the reason for termination because Ms Jing Ni informed her that the decision had already been taken when she had a conversation with her on 24 June 2013. The requirements of that section are not met in any event because there was no valid reason to respond to, or alleged valid reason to respond to.

Section 387(d) - Support person

[19] 387(d) is not relevant. Ms Hou did not request a support person.

Section 387(e) - Unsatisfactory performance

[20] There is no issue of unsatisfactory performance relevant in this present matter.

Section 387(f)(g) - Size of business, Human resources specialists

[21] I find that the company had a specialist human resource officer and is not of such a size that anything other than appropriate procedures in effecting dismissal should be followed.

Section 387(h) - Other matters

[22] I take note of the hardship caused to Ms Hou in terms of the detrimental financial impact, in terms of the damage to her health, in terms of the damage to her reputation, and in terms of the difficulty she is likely to find in finding future employment. These are matters which must be given substantial weight.

[23] I find that the termination of Ms Hou was harsh, unjust, unreasonable. She was not accorded a fair go all round.

Small business code

[24] In the alternative, if the employer is a small business, the small business code has been breached. There are no grounds for summary dismissal (summary dismissal paragraph). The employer did not comply with the alternative procedure (Other dismissal), in that it did not give the employee a reason why she was at risk of being dismissed, and the reason eventually given was not a valid reason. She did not receive a warning, and had no opportunity to respond or rectify the problem. The dismissal is therefore unfair and an unfair dismissal remedy must be considered.

Remedy

[25] Ms.Hou did not seek reinstatement because of the circumstances. I am satisfied that reinstatement of Ms Hou is inappropriate within section 390(3). It is inappropriate, given the circumstances and pain and distress caused to Ms Hou by the nature of her termination, and that it is unlikely that a satisfactory employment relationship can be restored.

[26] Secondly, within section 390(3)(b), I consider that an order for the payment of compensation is appropriate in all the circumstances of the case. Thirdly, within section 392, I consider it appropriate to order that the employer, at the time of the dismissal, pay compensation to Ms Hou in lieu of reinstatement.

[27] Fourthly, I have taken into account all the factors in section 392(2). I have taken into account the decision of a Full bench of the commission in Sprigg v Paul’s Licensed Festival Supermarket 14 and Smith v Moore Paragon Australia Ltd15 .

[28] In relation to s.392(2)(a) I am satisfied that a payment of compensation will not have an effect on the viability of the employer’s enterprise. In relation to s.392(2)(b) I have taken into account the length of Ms Hou’s service which dates from 2008. In relation to s.392(2)(c) I am satisfied that Ms Hou would have received considerable remuneration in terms of future employment if she had not been terminated.

[29] I have followed the Sprigg 16 formula as refined in Ellawala v Australian Postal Corporation17. The remuneration the employee would receive if they had not been dismissed would be considerable, given that the employee would have remained in relevant employment for a number of years until retirement. I am satisfied that Ms Hou would have remained in her employment for at least another five years.

[30] Secondly, Ms Hou has not earned any income since her dismissal. There is therefore no remuneration to be deducted pursuant to the Sprigg formula.

[31] Thirdly, in relation calculation of future economic loss, I have considered a deduction of 15 per cent, but because of special factors in this case discussed below will not make such a deduction (Smith v. Moore Paragon). Fourthly, I have had regard to the impact of taxation. Fifthly, I will assess the figure against the compensation cap.

[32] In relation to s.392(2)(d) in relation to the efforts of Ms Hou to mitigate her loss, her illness has limited her ability to take steps to mitigate the loss. Nevertheless, I am satisfied that within the limits of her abilities, she has made efforts to mitigate the loss. In relation to s.392(2)(e) the amount of remuneration earned. There is no such remuneration. In relation to s.392(2)(f) again there is no such amount.

[33] I turn to deal with s.392(2)(g), any other matter the commission thinks is relevant. In the circumstances, I have regard to the impact on Ms Hou, which is considerable, and the loss of $150 a week from a third party, which is a substantial amount of money. In the circumstances the 15 per cent that I would have deducted will not be, having regard to that factor.

[34] Ms.Hou sought compensation for pain and suffering. That is expressly prohibited by s.392(4). Ms.Hou also sought that I take into account the $150 a week obtained from a third party as a consequence of her work. However, ss.392(5) and 392(6) limit the amount of compensation I may award to ‘remuneration’. The term ‘remuneration’ is similar to ‘earnings’ in s.332, and such payments are clearly only those paid by the employer or on the employer’s behalf in return for work under the contract of employment (see Jenny Craig Weight Loss Centres Pty Ltd v. Margolina 18). The ordinary meaning of the words ‘remuneration’ supports that interpretation. In any event, on the evidence before me there is not enough connection between the employer and the payments, which are of a somewhat uncertain nature from a charity.

[35] Pursuant to section 392(5) and (6), the amount ordered by the commission to be paid to Ms Hou must not exceed the total amount or remuneration received by Ms Hou for any period of employment during the 26 weeks immediately before the dismissal. On the evidence before me she received $100 a week for the 26 weeks, therefore the first amount is $2600. It is less than half the amount of the high income threshold and meets the requirements of s.392(5). In all the circumstances I think it is appropriate, and consistent with the Act including a fair go all round, to make an order of the amount of $2600.

[36] An order to that effect is contained in PR547830.

DEPUTY PRESIDENT

Appearances:

Mrs X Hou, the applicant

Hearing details:

Melbourne

2014

12 February

 1   Email dated 11 February 2014

 2   PN349

 3 Fair Work Act s.388 - 399

 4   Exhibit H1, Attachment E

 5   Exhibit H2, paragraph 10

 6   Exhibit H2, paragraph 10

 7   Small Business Fair Dismissal Code

 8   Exhibit H1, Attachment C

 9 Fair Work Act s.387

 10 (1995) 62 IR 371 at 373

 11   Exhibit H2, Attachment E

 12   Exhibit H2, Attachment F

 13   Exhibit H2, paragraph 10

 14 Sprigg v Paul’s Licensed Festival Supermarket (1988) 88 IR 21

 15 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]

 16 Sprigg v Paul’s Licensed Festival Supermarket (1988) 88 IR 21

 17 Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 at [31].

 18   [2011] FWAFB 9137

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