Yanping Yuan v Hai Di Lao Melbourne Proprietary Limited

Case

[2024] FWC 3313

12 DECEMBER 2024


[2024] FWC 3313

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Yanping Yuan
v

Hai Di Lao Melbourne Proprietary Limited

(U2024/2898)

COMMISSIONER CONNOLLY

MELBOURNE, 12 DECEMBER 2024

Application for an unfair dismissal remedy – alleged serious misconduct – serious misconduct not found – no valid reason – dismissal found to be harsh, unjust and unreasonable – determined reinstatement not appropriate – compensation ordered.

Introduction

  1. On 13 March 2024, Ms Yanping Yuan (the Applicant) made an application under s.394 of the Fair Work Act 2009 (the Act) alleging that her dismissal from Hai Di Lao Melbourne Proprietary Limited (Hai Di Lao or the Respondent) on 25 February 2024 was harsh, unjust or unreasonable. The Respondent denies these allegations. 

  1. Initially, this matter was allocated to Deputy President Gostencnik who issued directions for the filing of evidence and material, setting the matter down for Hearing on 27 June 2024.  The Hearing was unable to be completed in one day and the Deputy President determined two additional days would be required to conclude hearing the evidence.  19 and 20 August 2024 were identified as the next available dates for the Hearing to procced. The Deputy President issued updated directions to this effect. On 5 August 2024, the Deputy President was appointed to the Federal Circuit and Family Court of Australia, ending his appointment with this Commission.

  1. Subsequently, on 6 August 2024, the matter was allocated to my Chambers for determination.  Following an initial Mention and discussion between the parties, I issued revised directions to allow for the remaining evidence and materials to be heard and examined at a Hearing on 17 and 18 September 2024.  

  1. Having considered the submissions made by the parties and the evidence available before me, I have found that the termination of Ms Yuan’s employment was harsh, unjust, and unreasonable.  The reasons for this finding are set out below and its consequences for both the Applicant and the Respondent are found at the conclusion of this decision.

When can the Commission order a remedy for unfair dismissal?

  1. Section 390 of the Act provides that the Commission may order remedy if:

(a)   the FWC is satisfied that the Applicant was protected from unfair dismissal at the of being dismissed; and

(b)   the person has been unfairly dismissed.

  1. Both limbs must be satisfied.  Therefore, I am required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am so satisfied, next consider whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

  1. Section 382 of the 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 that the high-income threshold.

When has a person been unfairly dismissed?

  1. Section 385 of the Act provides that a person has been unfairly dismissed if the FWC is satisfied that:

    (a)       the person has been dismissed; and

    (b)       the dismissal was harsh, unjust or unreasonable; and

    (c)the dismissal was not consistent with the Small Business Fair Dismissal Code; and

    (d)       the dismissal was not a case of genuine redundancy.”

Background

  1. The uncontested factual background to this matter is as follows:

·   The Respondent operates a business in the restaurant and catering industry based at multiple locations, including at the Emporium in Melbourne’s CBD where the Ms Yuan worked.

·   Ms Yuan commenced employment with the Respondent in June 2023 on a sponsored student visa arrangement, expiring 7 September 2024.  Her work involved being a chef in the kitchen and assisting as required, with a principal responsibility of preparing meals and catering for restaurant staff and assistants.

·    At the time her employment came to an end, Ms Yuan was being paid $23.23 per ordinary hour worked.  In the period of 1 – 31 December 2023, she earned a net total of $1562.22 from her employment with the Respondent.  A condition of her student visa subclass included a work limitation of 48 hours a fortnight when her course of study was in session. Additional hours could be worked without limitation when this was not the case.

·   On 22 December 2023, Ms Yuan had a conversation with a Mr Tony Zhou where she was dismissed.  The conversation was recorded with the parties’ consent and a transcript of the exchange interpreted from the original Mandarin was accepted into evidence.  The relevant extract of the exchange is summarised below:[1]

Mr Zhou:        The first point is that we have sent three warning letters to you in the past six months.

Ms Yuan:        None. Please confirm what you said: None. No one had sent me any warning letter… Can you present it to me first?

Mr Zhou:        Yes, I will present them to you later… We will do that next.  Let’s start with stating the overall issue and see if there are any other issues…Two days ago we had an unpleasant event at our site where we might have had a communication problem.

Ms Yuan:        A conflict

Mr Zhou:        A conflict, right, a conflict.  Then the company also did some investigation and verification – we cannot listen to just one side of the story...

Ms Yuan:        The so called “one side of the story” must be your side…. because I haven’t said anything...

Mr Zhou:        No matter a complaint or whatever, you talked to Liu Li of the headquarters before, right?

Ms Yuan:        I did not just talk to Liu Li, I firstly, reported it to your disciplinary department.  I put it in writing and gave it to the disciplinary department.

Mr Zhou:        Right, so the disciplinary department also held an investigation.

Ms Yuan:        Your disciplinary department has not given me any reply until now.

Mr Zhou:        There was an investigation…That is one of the reasons why I am here…

Ms Yuan:        I insist I haven’t said anything.  I was just reporting the injustices I’d encountered in my workplace.

Mr Zhou:        Ok, that’s the second issue. The third issue is that we’ve has some discussions, and we feel that your current work performance is not suitable for the company.

Ms Yuan:        I don’t think I have any problem.  What you think is your opinion.

Mr Zhou:        It’s the company that made the decision of this matter.  I am here to notify you of the following decision.

Ms Yuan:        Can you show it in writing to me.

Mr Zhou:        Yes, I can.  Where having an initial communication and then we’ll decide.  First of all, we want to see if you want to resign or not.

Ms Yuan:        I definitely don’t want to.  You don’t even have to ask.

Mr Zhou:        Okay, then we inform you that today is the last day you will be working for Haidilao…

Ms Yuan:        What are you going to do about the persecution that your so-call professional manager, Peng Hua, the manager of Shop Seven, has done to me during the six months I have worked here?

Mr Zhou:        That’s a different matter...

Ms Yuan:        Don’t say it’s a different matter.  It’s because of these things that we ended like this… Can you give me a reason why you’re letting me go?

Mr Zhou:        … You’re not suitable here, it won’t be a good fit if you keep working here, including the three warning letters…

Ms Yuan:        I insist that I’d never seen a single warning letter.

Mr Zhou:        It’s not just the warning letters.  It’s the fact that your work performance might not be a good fit for our company.

Ms Yuan:        I’m doing well. Not a single person has said I’m not… Peng Hua deliberately created problems in the back kitchen…. a conflict and recorded it as evidence to say I’m bad….

Mr Zhou:        I came to have a meeting with you just to inform you of the decision of the company.

Ms Yuan:        What you are telling me now, the unilateral termination of the labour contract, I do not agree…

Mr Zhou:        …the company is terminating your contract…

Ms Yuan:        You terminate my contract, bring me something in writing, not from your mouth, and then….

·   Ms Yuan left the workplace when this conversation ended and has not returned.  Ms Yuan contends she understood she had been terminated by Mr Zhou on 22 December 2023 and that this termination was unfair.

·   On the same day, Hua Peng (Ms Yuan’s Branch Manager) sent her a letter suspending her from work with pay and setting out a series of misconduct allegations advising that they would be investigating the allegations, including providing Ms Yuan an opportunity to respond.

·   On 27 December 2024, Ms Yuan sent an email to the Respondent’s Human Resources Department as follows:

“After the leader of your HR department informed me face to face “Because you have been warned three times, your labour contract is now terminated.” After this conversation, the only thing I could do to Haidilao was to defend my legitimate rights and interests. The accusation made against me by someone in Haidilao Australia's seventh branch in your email is illegal and baseless. It is an outrageous act of bullying against employees. I reserve my personal opinion. I have no obligation to say a word anywhere other than in court, and whoever submits my question to you is the one you contact and ask him or her to provide you with legally relevant evidence so that you can make a correct judgement. Australia is a country with a very sound rule of law….”[2]

·   On 6 January 2024, Ms Rebecca Liu (Respondent’s Australian HR Manager) sent an email to Ms Yuan advising:

Hello Sister Yuan,

Happy holidays.  Regarding your last meeting with Tony, our management decided to suspend you for investigation based on the necessary preliminary investigation. Please understand that this decision is not a notice of resignation to you, but is intended to enable both parties to effectively clarify the actual situation and details of the incident.
We have also tried to contact you and hope that you can cooperate with the investigation. Please make your statement in the suspension investigation notice. If the company fails to receive your reply before 10 PM tomorrow , January 7 , we will have to continue the investigation based on the available information and make conclusions accordingly.”[3]

·   On the same day, Ms Yuan stated she responded to this email in the following way:

“Whether you have sent me a notice of resignation has been clearly reflected in the conversation between the leader of the personal department and me. What you have done later is make excuses for your illegal behaviour, it is outrageous that you have not dealt with the series of bullying incidents of employees created by Hua Peng.  You have exhausted all my patience.”

·   On 21 January 2024, Ms Liu sent Ms Yuan a further email inviting her to participate in an online meeting on 25 January 2024 to discuss the allegations of misconduct against her and provide her an opportunity to respond.

·   On 25 January 2024, Ms Yuan participated in a 2-hour online meeting with Ms Liu and a colleague (Jaimin Chong) in which she responded to the allegations against her.

·   On 24 February 2024, Ms Liu sent a further email to Ms Yuan advising her that the outcome of the company’s investigation into the allegations of misconduct against her was that the allegations were substantiated.

·   On 25 February 2024, Ms Liu advised Ms Yuan that the company had resolved to terminate her employment based on the findings against her with immediate effect and a payment of two weeks’ pay in lieu of notice.

·   On 13 March 2024, the Applicant filed her application for an unfair dismissal remedy.

·   The Respondent refutes that the Applicant should be entitled to reinstatement or any other remedy.

The hearing

  1. There being contested facts involved, the Commission is obliged by s.397 of the Act to conduct a conference or hold a Hearing.  Considering the views of the parties and the circumstances of this case, I determined a Hearing was the most effective and efficient way to resolve the matters of contention.

  1. In addition to the Hearing on 27 June 2024 before Deputy President Gostencnik, I conducted a Hearing 17 and 18 September 2024.  At each instance, Ms Yuan represented herself and the Respondent was represented by Mr Ben Guo (Solicitor), who was granted leave pursuant to s.596 of the Act.  The Commission was assisted by a registered Mandarin interpreter for the purposes of all proceedings. 

Witnesses and submissions

  1. Ms Yuan filed a series of written submissions along with a series of emails, supporting documents, and video recordings in support.  Ms Yuan also gave sworn evidence during proceedings. Transcripts of Ms Yuan’s video recordings were prepared by the Commission by an authorised Mandarin interpreter and provided to the parties for verification in advance of proceedings.

  1. The Respondent filed written submissions and an outline of evidence and witnesses to be called, including emails and correspondence in support.  The Respondent also provided witness statements from Ms Rebecca Liu, Dehua Yu, Hua Peng, Jian Yang, and Mr Steve Zhang, each of whom gave sworn evidence in proceedings.

  1. A Court Book, containing all materials filed by the parties was compiled and distributed to the parties prior to the Hearing. I received the entirety of the court book into evidence, subject to appropriate weight being given to the evidence that was tainted by opinion, irrelevance or hearsay.

Initial matters to be considered

  1. Section 396 of the Act sets out the following:

“The FWC must decide the following matters relating to an application for an order under Division 4 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.”

  1. As set out above in s.396 of the Act, consideration as to whether the dismissal was unfair cannot occur unless the Commission is first satisfied that the provisions of s.396 have been met.  In the present case, it is not contested, and I am satisfied that Ms Yuan’s application was filed on 13 March 2024 and is made within the required timeframe.  It is not contested, and I am satisfied that Ms Yuan was earning below the high-income threshold and is a person protected from unfair dismissal.  It is also not contested, and I am satisfied, that the Respondent is not a small business, by virtue of the employer’s F3 form, indicating that at the time of the Applicant’s termination the Respondent had 65 employees.  Nor is it asserted that this is a case of genuine redundancy.

  1. As I have been satisfied that the requirements of s.396 are met, I now turn to consider the merits of whether the Applicant’s dismissal was harsh, unjust or unreasonable. 

Was the dismissal harsh, unjust or unreasonable?

  1. A dismissal may be unfair, when examining if it is ‘harsh, unjust or unreasonable’ by having regard to the following reasoning of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd:[4]

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

  1. Section 387 of the Act provides for the criteria for consideration whether a dismissal was harsh, unjust or unreasonable as follows:

387      Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a)       whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b)       whether the person was notified of that reason; and

(c)       whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d)       any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e)       if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f)       the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g)       the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h)       any other matters that the FWC considers relevant.”

  1. I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.[5]

  1. I have set out my consideration of each below.

s.387(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)

  1. In order to be a valid reason, the reason for the dismissal should be “sound, defensible, or well founded”[6] and should not be “capricious, fanciful, spiteful or prejudiced.”[7] 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.[8]

  1. Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[9]  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 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.[10]

  1. Deputy President Asbury (as she was then) summarised the relevant principles in relation to an employer’s onus of establishing that there was a valid reason for a dismissal on the balance of probabilities as follows in Mellios v Qantas Airways Limited, which was confirmed on appeal by the Full Bench:[11] 

“[17] In considering whether there is a valid reason for the Applicant’s dismissal, I am required to be satisfied on the balance of probabilities that he engaged in the alleged misconduct or in misconduct to which dismissal was a valid, sound and defensible response.  I must be conscious of the gravity of the allegations and the ramifications for the Applicant if they are made out.  However, the standard of proof does not change and the issues in dispute must be determined on the balance of probabilities.  Put another way, if must be more probable than not that the Applicant engaged in the relevant misconduct.”

  1. I have applied these principles to the matter before me.

The Applicant’s Evidence

  1. Ms Yuan’s submissions are that the termination of her employment is baseless.  That she is the victim of fabricated evidence that has been contrived by her former manager Hua Peng to cover up her own bullying and failure to address Ms Yuan’s complaints.  Along with an attempt by Hai Di Lao to cover up Mr Zhou’s unlawful termination of her on 22 December 2024 and the associated attempt of Ms Peng to force her to sign a resignation on the same day.

  1. Ms Yuan denies that she has engaged in any conduct in her employment with the Respondent that would warrant the termination of her employment.  She submits that she has been a good performing employee who has not had any complaints raised with her about her behaviour or performance.  With regard to the four formal allegations of misconduct against her that the Respondent claims to be the basis of her termination, she denies these allegations.

  1. Furthermore, she submits that she has made numerous complaints to her employer about bullying and safety concerns in her workplace that have been ignored or not acted upon.  And that her contrived termination is, in part, retaliation to these complaints.

  1. Ms Yuan’s evidence is that on 22 December 2023, Mr Zhou made it clear to her that she was being dismissed.  That at the same time her employer also attempted to pressure her into signing a resignation, presenting her with a resignation form.  She submits she was completely surprised by these events and was not previously provided any warnings, or had any concerns raised with her about her work performance or behaviour.  She was not provided with any evidence at this meeting, nor was she provided with any right to representation.  And that when she left the workplace on 22 December 2023, she believed she had been unfairly dismissed.

  1. Ms Yuan accepts that also on 22 December 2023 she received a letter from her manager advised her of allegations of serious misconduct against her and that she was being stood down on pay pending an investigation.  She submits this investigation and stand down was merely an attempt by Hai Di Lao to cover up her unfair dismissal.  She accepts she was provided some opportunity to participate in the employer investigation and respond to the allegations of misconduct through discussions with Ms Liu. She maintains however, that her employer’s decision to terminate her had already been made and had been communicated to her.

  1. Regarding her circumstances after dismissal, Ms Yuan’s evidence is that she has been unable to find comparable alternative employment but has managed to secure some minimal earnings through insecure work.  She has endeavoured to continue her studies.  She is seeking to be reinstated to her position, or in the alternative, compensated for her unfair dismissal.

  1. She maintains that she was committed to remaining in employment with Hai Di Lao had it not been for her termination, which blindsided her and came without any warning.

The Respondent’s Evidence

  1. The Respondent’s position is that Ms Yuan’s manager, Ms Hua Peng, initially received numerous formal and informal complaints about the Applicant’s behaviour and performance.  That she immediately acted on these complaints and in most cases found the conduct of Ms Yuan to be substantiated.[12]  Ms Peng’s evidence is that subsequently she provided Ms Yuan with verbal warnings about her behaviour, the need to comply with company policies and the need for appropriate conduct and language in the workplace.  Further, her evidence is that Ms Yuan frequently challenged her direction and continued to engage in inappropriate behaviour, including using “bad languages, wandering with knife, and swearing at staff”.[13]

  1. Mr Dehua Yu, a co-worker of Ms Yuan, gave evidence that on 1 October 2023 she verbally abused and insulted him.  That this was not an isolated incident and that he reported this event to Ms Peng, making a formal complaint about Ms Yuan’s behaviour.[14] 

  1. Another co-worker of Ms Yuan, Mr Jian Yang also gave evidence that on 10 December 2023, he was verbally attacked by Ms Yuan and that this incident was witnessed by other members of staff, including Ms Peng.

  1. The Respondent accepts that Mr Tony Zhou made an attempt to discuss some of these concerns with the Applicant on 22 December 2023.  The record of the conversation between Mr Zhou and the Applicant that was admitted into evidence is not disputed.

  1. The Respondent’s position is that Mr Zhou was not acting on behalf of Hai Di Lao and holds no authority or formal human resources position in the company.

  1. Ms Rebecca Liu, the Australian HR manager for the Respondent based in Los Angeles California, gave evidence that she was the responsible person for the Respondent in this matter.  And that her role includes managing the Respondent’s human resources functions, including conducting investigations, addressing staff complaints and terminations.[15]  

  1. Ms Liu’s evidence is that at no time was Mr Zhou authorised to make decisions for the Respondent.  Her evidence is that in December 2023 she became aware of the complaints being made about Ms Yuan by staff members.  That she understood Ms Yuan’s manager, Ms Peng, had attempted to address these issues previously but they remained unresolved and were appearing to escalate.  Consequently, she took responsibility for the matter and after considering the nature of the complaints decided it was appropriate to suspend Ms Yuan to allow for proper investigations into the allegations to take place.[16]

  1. In making this decision, Ms Liu submits she instructed Ms Peng to advise Ms Yuan of this on 22 December 2023.  Ms Peng provided Ms Yuan with a letter of suspension to this effect.  The letter also set out the allegations against Ms Yuan and invited her to attend an on-line meeting to provide a response. The allegations against Ms Yuan were that:[17]

·On 1 October 2024, she verbally harassed a co-worker accusing him of fabricating his academic record and calling him a “dumbass”.

·On 28 October 2023, she rushed into the kitchen holding a knife and aggressively asked a colleague where the grindstone was.

·On 10 December 2023, she used inappropriate language, referring to a colleague as a dog’s female genitals.

·On 18 December 2023, she refused a work order from a supervisor to prepare a steak for a birthday celebration and engaged in a heated conversation with her supervisor.

  1. Ms Liu accepts she sent a further email to Ms Yuan on 7 January 2024 confirming this suspension decision and reiterating her desire for Ms Yuan to provide a response and participate in a meeting.  On 21 January 2024, Ms Liu invited Ms Yuan to a meeting to be convened online on 25 January 2024.  In this meeting, Ms Liu and her colleague Jiamin Chong met with Ms Yuan and provided her an opportunity to respond to each of the allegations.  Ms Liu submits this meeting lasted approximately 2 hours and Ms Yuan was provided ample opportunity to respond to each allegation against her and that she was advised of the potential outcomes of the investigation, including termination of her employment.[18]  Ms Liu accepts Ms Yuan denied each of the allegations against her and claimed that they were fabrications.

  1. Following this interview, Ms Liu and her colleague Jamin Chong continued their investigation, conducted the following additional interviews:

·   Jian Yang in relation to the incident on 10 December 2023.

·   Dehua Yu in relation to the incident on 1 October 2023.

·   Hua Peng in relation to Ms Yuan’s general performance and conduct in the workplace and the allegations in the letter of suspension.

  1. On 15 February 2024, Ms Liu invited Ms Yuan to attend a further meeting to provide her an opportunity to respond to above.  Ms Yuan did not attend this meeting.

  1. On this basis, considering these interviews and the responses of Ms Yuan, Ms Liu submits she concluded that all the allegations in the suspension notice were substantiated.  Her evidence is that:[19]

    “I received consistent and coherent responses from various staff members and considered the applicant’s responses to the allegations.  I determined that the applicant’s conduct amount to serious misconduct.”

  1. On 24 February 2024, Ms Liu sent Ms Yuan a letter outlining the outcome of the investigation and on 25 February 2024 Ms Liu issued a notice of termination to Ms Yuan, bringing her employment with the Respondent to an end with immediate effect with two weeks’ pay in lieu of notice.

  1. Hai Di Lao maintains it has provided Ms Yuan with procedural fairness. That based on the conduct of its investigations there was a valid reason for Ms Yuan’s dismissal.  This included its findings that Ms Yuan’s conduct – in particular, her repeated use of offensive language and breach of workplace safety polices by wandering around with a knife on several occasions which posed a serious health and safety risk to other staff and customers, amounted to serious misconduct, justifying her dismissal. 

  1. Hai Di Lao also points to the impact of the Applicant’s conduct on the health and safety of other staff members, including some who indicated they would resign if Ms Yuan returned to the workplace.  Their position is that they have lost confidence in Ms Yuan’s ability to perform her duties.  That post termination, Ms Yuan has made social media posts damaging to the Respondent, allegedly threatened other employees of the Respondent and that it has discovered documents provided by Ms Yuan at the commencement of the employment relationship were not correct. 

  1. Hai Di Lao opposes reinstatement on this basis.  Mr Zhang provided additional evidence for the Respondent that at the time of her employment Ms Yuan was on a student visa, which expired on 7 September 2024 and that they are not aware of the current status of Ms Yuan’s visa conditions.  Hai Di Lao accepts that at the time of her employment Ms Yuan was able to work up to 24 hours per week during periods of study, with no restrictions outside of term. 

Findings

  1. Ms Yuan does not accept that she engaged in the conduct that has been alleged.  Her position is that each of the allegations made against her are fabrications, constructed by her employer to cover up her unlawful termination by Mr Zhou on 22 December 2023. 

  1. In proceedings, Ms Yuan’s oral evidence is that she did not abuse or attack Mr Yu on 1 October 2023 or Mr Yang on 10 December 2023.  She denies wielding a knife in a threatening and unsafe manner on 28 October 2023 and submits she was not at work that day.  With regard to the events of 18 December 2023, and her refusing to obey a direction to “prepare a steak” and engaging in a heated exchange with her supervisor, she presents a very different version of events. 

  1. Both Mr Yu and Mr Yang provided oral evidence in support of their witness statements.  I found neither to be convincing witnesses who seriously engaged with the gravity of these proceedings.  I do accept however, that both Mr Yu and Mr Yang along with Ms Yuan did not necessarily get along or have much regard or respect for each other.  I also accept that on the available evidence, it is more likely than not that Ms Yuan used a tone and language in her communications with both Mr Yu and Mr Yang, including on 1 October 2023 and 10 December 2023 respectively, that is less than appropriate in the workplace.  

  1. Context, however, is critical. Ms Yuan was working as chef in the kitchen of a restaurant catering for other staff members in Melbourne’s busy Emporium building.  In this context, kitchen hands and chefs talking robustly, perhaps less than appropriately towards each other is hardly controversial.  In this context, I do not accept less than appropriate language of itself would necessarily constitute misconduct, let alone be grounds for dismissal.

  1. Hai Di Lao claims a further ground of misconduct was its assertion Ms Yuan was observed waving a knife aggressively on a number of occasions in the workplace.  Ms Peng’s evidence was that she investigated these claims. Ya Chen provided a witness statement attesting that on 28 October 2023“I was extremely frightened when she [Ms Yuan] entered…wielding a knife”.[20] 

  1. Ms Yuan denies this ever occurring and gave sworn evidence to this effect.  She further contended that she was not at work on 28 October 2023.  Mr Zhang provided sworn evidence, support by a rostering record of the company indicating Ms Yuan did in fact perform work on 28 October 2023, which I accept.  Critically, however, the Respondent was not able to present Ms Chen as a witness for cross examination.  This being the case, they were made aware that her evidence about what occurred on 28 October 2023, being contested, would not be accepted.

  1. While Ms Peng provided some evidence that Ms Chen made her aware of the events of 28 October 2023 and that she was in the workplace on that day, I did not find Ms Peng’s evidence convincing.  Firstly, Ms Yuan submits Ms Chen was the person she has complained about being bullied by to human resources.  Secondly, I consider, as Ms Yuan’s branch manager, she was invested in Ms Peng’s decision to remove Ms Yuan from the workplace being upheld.  Furthermore, Ms Peng’s evidence is that she provided multiple warnings to Ms Yuan, including at least two written warnings, not one of which has been presented into evidence.[21]

  1. It follows from the above that the ground of the misconduct involving a “knife” on 28 October 2023 has not been established on the evidence available.  In reaching this conclusion, I further note that just as it may not be controversial for employees in a busy kitchen to use robust language, it is perhaps even less controversial for chefs in a kitchen to be seen carrying a knife looking for a grindstone. 

  1. In terms of the final allegation of misconduct made against Ms Yuan, that she refused to prepare a steak and had an argument with her boss about this on 18 December 2023, the fact that this incident occurred is not in dispute.  

  1. I am satisfied Ms Yuan’s conduct on 18 December 2023 amounted to misconduct.  That her employer was justified to expect better of her and to take appropriate action to address her behaviour.  Absent other substantiated findings of misconduct, however, I am not satisfied that on its own this instance of misconduct amounts to a valid reason to terminate her employment.  As I have not been satisfied that the 3 other allegations of misconduct against Ms Yuan can be maintained, I am not satisfied that this is the case.

  1. Hai Di Lao maintains its grounds for termination extend to repeated instances of misconduct by the Applicant.  In her evidence, Ms Peng refers to both formal and informal complaints against the Applicant that she has acted upon in advance of the 1 October 2023 incident.  Mr Zhou refers to 3 warnings letters that have previously been provided to Ms Yuan, but despite repeated requests from Ms Yuan to produce them, failed to do so.  There are no warning letters produced in the material provided by the Respondent.  Ms Liu’s evidence is that as the HR manager for the Respondent she only became aware of complaints against Ms Yuan in December 2023 despite submitting that the Respondent has a strict procedure for handling workplace complaints. 

  1. This being the case, I am not satisfied that apart from the incident on 18 December 2023, the Respondent has articulated any misconduct on the part of Ms Yuan that would amount to a valid reason to bring her employment to an end.  As I am not satisfied that Ms Yuan’s conduct on 18 December 2023 amounts to a valid reason in isolation, if follows that I do not accept a valid reason has been provided.

  1. I also do not accept that, despite its assertions otherwise, in this instance the Respondent has conducted a fair, thorough and objective investigation into the allegations made against Ms Yuan.  In her evidence, Ms Liu was unable to articulate that as a HR Representative based in Los Angeles she took proactive steps to verify the information she was being provided by the management team at Hai Di Lao Melbourne that was contested by Ms Yuan, including whether she was at work on the days alleged.[22]  

  1. I do not accept that Ms Yuan has been afforded procedural fairness or that her employer has applied an appropriate amount of rigour and due diligence into the allegations made against her prior to forming a decision to terminate her employment.  In reaching this conclusion, I have also had regard to the proximity of the decisions to suspend her employment at the end of December 2023 and allegations of alleged misconduct dating back to 1 October 2023.  Waiting almost 3 months to articulate claims of misconduct does not appear to me to be consistent with having strict procedures for conducting workplace investigations.

  1. Terminating an employment relationship is a serious matter, particularly so in cases of serious misconduct.  It is well established[23] that prior to making this decision an employer should take steps to clearly provide an employee with due warning and an opportunity to rectify behaviour that is clearly not so offensive or adverse to health and safety as to justify otherwise.[24] In the present circumstances, this has not been the case. 

  1. I accept that Hai Di Lao had legitimate concerns with Ms Yuan’s use of language and overall conduct, specifically on 18 December 2023.  I accept that some of this evidence supports a finding against Ms Yuan. However, I do not accept this conclusion supports a finding of insubordination or serious misconduct justifying dismissal. 

  1. In reaching this conclusion, I have also had regard to the fact that the Respondent failed to provide the Applicant with any written direction or clarification of its expectations of her.  Further, the Respondent has not been able to demonstrate that Ms Yuan was formally warned she could face disciplinary action, that she was provided with a written opportunity to rectify her conduct or provided due process prior to being told she was dismissed by Mr Zhou.

  1. Ms Yuan has consistently maintained that the allegations against her and the decision to purportedly suspend her employment are fabrications.  That they have been identified by the Respondent to cover up her unlawful termination by Mr Zhou.  Despite requests from the Commission, Mr Zhou was not presented by the Respondent to give his version of events to be examined.  The translation of Ms Yuan’s recording of this conversation was not disputed by the Respondent.  I accept this version of events.

  1. As set out above, it is clear from this recording Ms Yuan was terminated by Mr Zhou on 22 December 2023 without notice, prior-warning or provision of any evidence of a valid reason to support this decision.   The undisputed evidence of this conversation confirms this was the case and I accept it to be so.  This being the case, I can appreciate how Ms Yuan reached the conclusions that she did. 

  1. Hai Di Lao claims that Mr Zhou did not have any authority to act to terminate Ms Yuan’s employment.  However, they have not been otherwise able to explain his action or present Mr Zhou for these claims to be examined.  On their version of events, Ms Yuan was suspended with pay on 22 December 2023, and subsequently terminated on 25 February 2024 following a thorough investigation and substantiated findings of misconduct against her.

  1. Even if I were to accept Hai Di Lao’s version of events I would still not find there was a valid reason for terminating Ms Yuan’s employment.  As indicated above, the evidence supporting claims of Ms Yuan’s misconduct does not lead to this conclusion.  The only misconduct I have been satisfied of occurred on 18 December 2023.  On its own, this does not amount to a valid reason to bring her employment to an end.

  1. In supplementary submissions, Hai Di Lao indicate there has been an irreparable breakdown in trust and confidence that make reinstatement impractical in the circumstances of this case.  In further opposition to reinstatement, they identify concerns with Ms Yuan’s current visa status and her post termination comments on social media to their detriment. 

  1. In the hearing, Ms Yuan and witnesses for Hai Di Lao displayed a significant amount of animus and contempt towards each other.  I also accept there have been respective post termination remarks and conduct to the detriment of either party.  Considering these factors, I accept the Respondent’s submissions opposing reinstatement.

  1. As I have not found a valid reason for Ms Yuan’s termination, this finding weighs against the Respondent. 

s.387(b) Whether the person was notified of that reason

  1. 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).[25]

  1. 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,[26] in explicit,[27] plain and clear terms.[28]

  1. As identified by the Full Bench in Crozier v Palazzo Corporation Pty Ltd:

    “As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before a decision taken to terminate their employment in order to provided them an opportunity to respond to the reason identified.”

  1. As I am not satisfied that there is a valid reason for dismissal, this factor is not strictly relevant in this case.[29]  If I had found there was a valid reason for dismissal, I would have found that Ms Yuan was not notified of the reason for her dismissal prior to a final decision being communicated to her.  The evidence before me supports a conclusion that Mr Zhou told Ms Yuan she was dismissed on 22 December 2023 and despite repeated requests for warning letters or reasons to be provided, they were not.

  1. Regarding the steps taken after 22 December 2023, and her stand down on pay, I accept that after being told she was dismissed Ms Yuan was provided with a stand down letter setting out the allegations of misconduct against her.  I also accept she was provided an opportunity to respond.  I do not accept these factors outweigh what I have found was clearly communicated to Ms Yuan and that the Respondent has not satisfactorily addressed.

  1. Given these circumstances, I consider this to be a neutral factor.

s.387(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

  1. There is no evidence Ms Yuan was provided with an opportunity to respond to the reasons for the dismissal and provided an opportunity to show cause as to why her employment should not be terminated on 22 December 2023.  As I have indicated above, the steps taken by the employer after these events go some way to satisfy this requirement.  However, for the reasons I have already indicated they do not discount entirely what had already occurred.  For these reasons, I consider this factor to be neutral. 

s.387(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

  1. This factor is not relevant to the facts of this case as there was no request or opportunity for this to occur in the circumstances of this case. 

s.387(e) If the dismissal related to unsatisfactory performance by the person­ – whether the person had been warned about that unsatisfactory performance before the dismissal

  1. A Full Bench has previously stated the following regarding what constitutes being “warned” when considering this factor in predecessor legislation:

“In the context of s.170CG(3)(d) we think that 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.

In relation to the latter requirement, a mere exhortation for the employee to improve his or her performance would not be sufficient.  We also note that we accept that these criterion are to be applied in a practical and commonsense way taking into account the employment context.”[30]

  1. Hai Di Lao contends that Ms Yuan was warned by Ms Peng that her language and conduct in the workplace needed to improve.  I accept this may have been the case.  However, there is no evidence before the Commission that Ms Yuan was provided with any formal verbal or written warnings that a failure to improve would result in a termination of her employment.   Ms Yuan disputes this was the case.

  1. I found no clear evidence before me that Ms Yuan was provided with any clear warning of unsatisfactory performance prior to being notified of her dismissal on 22 December 2023 or thereafter. 

  1. On this basis, I find this factor weighs in favour of the Applicant.

s.387(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 s.387(g) - Whether the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise impacted on the procedures followed

  1. The Respondent has not made any submission on the size of its business or the absence of a dedicated human resource specialist.  The Respondent is not a small business.   It has dedicated human resources specialists, including Ms Liu.  I consider this to be a neutral factor.

s.387(h) Any other matters that the FWC considers relevant

  1. The undisputed evidence in this case is that Ms Yuan is a worker on a student visa in this country.  Ms Yuan has lost her main source of income because of her dismissal and that this has had a significant impact on her, her financial and non-financial circumstances.  Ms Yuan also submits, and it has not disputed, that she has not yet found comparable alternative employment despite attempts. 

  1. I have regarded these other factors to weigh in favour of the Applicant.

Conclusion

  1. I have determined that there was not a valid reason for the dismissal.

  1. I have not been satisfied that Ms Yuan was notified of the valid reason for her dismissal prior to this decision being made.

  1. I have not been satisfied that Ms Yuan was given a proper opportunity to respond to any reason related to her capacity or conduct prior and consider this to be a neutral factor.

  1. There was no unreasonable refusal by the Respondent to allow Ms Yuan a support person.

  1. I am not satisfied that there was relevant unsatisfactory work performance prior to the dismissal that was a contributing factor.

  1. I do not consider that the size of the Respondent’s business and the absence of employed dedicated human resource management was a relevant factor. 

  1. I have also had regard to the other matters I consider are appropriate to take into consideration.

  1. I have determined that Ms Yuan’s dismissal was harsh, unjust and unreasonable. 

  1. If I had found there was a valid reason, I would have found the dismissal was harsh given Ms Yuan’s circumstances because the employer’s concerns with her conduct were not clearly and formally communicated to her or so serious as to constitute serious misconduct.

Remedy

  1. Having been satisfied that the Applicant:

    · made an application for an unfair dismissal remedy under s.394;

·   was a person protected from unfair dismissal; and

·   was unfairly dismissed within the meaning of s.387 of the Act;

I may, subject to the Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.

  1. Under section 390(3) of the Act, I must not order the payment of compensation to the Applicant unless:

(a)   the FWC is satisfied that reinstatement of the Applicant is inappropriate; and

(b)   the FWC considers an order for payment of compensation is appropriate in all of the circumstances of the case.

Is reinstatement of the Applicant inappropriate?

  1. Ms Yuan is seeking to be reinstated for her job or compensated for being unfairly dismissed.  Hai Di Lao opposes reinstatement and raises concerns about Ms Yuan’s visa status, evidence of a breakdown in the employment relationship and post termination conduct.  Aside from material verifying her visa status, Ms Yuan has not provided any submissions or material that addresses these concerns.  As I have indicated, the conduct of both parties in these proceedings reinforces the legitimacy of these concerns.

  1. Considering all the circumstances in this case and the submissions of the parties, I am satisfied that reinstatement is not an appropriate remedy due to the breakdown of the employment relationship between the parties, which are beyond repair.  

Is an order for payment of compensation appropriate in all the circumstances of the matter?

  1. Having determined that reinstatement is not appropriate, 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…”[31]

  1. 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.[32]

  1. Here, Ms Yuan submits she would have continued in her employment relationship as long as possible.  It is not disputed that Ms Yuan was working on a student visa that expired on 7 September 2024.  It is also undisputed that Ms Yuan has not been able to secure comparable alternative income since her termination despite attempts. On this basis, I am satisfied that the Applicant has incurred financial loss in the period since her termination and that some compensation is appropriate.

Compensation – what must be taken into account in determining an amount?

  1. Section 392(2) of the Act requires all 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 employer’s enterprise; and

(b)the length of the person’s service with the employer; and

(c)the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d)the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e)the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f)the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g)any other matter that the FWC considers relevant.

  1. During the hearing, I invited both parties to address these criteria and at the conclusion of proceedings sought additional submissions on the effect of any order on the viability of the Respondent’s enterprise. Considering all the circumstances of this case, the evidence before me and additional submissions, I am satisfied I can form a view as to compensation and consider each of these criteria below.

(a)       the effect of the order on the viability of the employer’s enterprise

  1. I do not have any evidence before me that would indicate that an order for compensation would have an effect on the viability of the employer’s enterprise. I have, therefore, regarded this as a neutral factor in the calculation of compensation.

(b)   the length of the person’s service with the employer

  1. The Applicant commenced employment with the Respondent in a part-time capacity on 23 June 2023 on a student working visa and worked for the Respondent until her termination.  She was paid until 25 February 2024 and was paid 2 weeks in lieu of notice on termination.  

  1. I consider that the Applicant’s length of service does not support reducing or increasing the amount of compensation ordered.

(c)   the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

  1. As stated by a majority of the Full Court of the Federal Court:

“…in determining the renumeration 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 has 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 the likelihood of a further termination in order to be able to assess the amount of renumeration the employee would have received, or would have been likely to receive, if there had not been the actual termination”.[33]

  1. In the present circumstances, the Applicant’s evidence is that she would have continued in her employment as long as possible.  The evidence before me is that her student visa expired on 7 September 2024. 

  1. The Respondent argues that Ms Yuan has not provided evidence of her right to work beyond this time and that in preparing for these proceedings it discovered further instances of misconduct.  This included presenting inaccurate documents at the time she was employed, threatening potential witnesses and defaming the Respondent on social media.  In these circumstances, they submit Ms Yuan would be subject to a further termination of her employment should she be reinstated.

  1. The evidence in this case that I have accepted on what occurred on 18 December 2023, indicates the employment relationship was at risk of breaking down.  I accept that arising from these events Hai Di Lao had cause to have legitimate concerns with the Applicant’s conduct that, while not a valid reason for termination, are a relevant consideration to the likelihood of the employment relationship continuing. 

  1. There is no conclusive evidence before me to suggest the Ms Yuan may not have addressed the Respondent’s concerns if she was provided with an opportunity. However, because of the actions of Mr Zhou on 22 December 2023, this was not the case.  I have found that the evidence supports a conclusion Mr Zhou unfairly terminated Ms Yuan on 22 December 2023.  I have been further satisfied her subsequent termination on 25 February 2024 was also unfair for the reasons set out above.  In these circumstances, where Ms Yuan was not provided with any opportunity to address the events of 18 December 2023 and improve her conduct, I am unable to reach a conclusion that her employment would not have continued up until at least 7 September 2024 when her visa expired.  With regards to the Respondent’s submissions of further instances of misconduct resulting in termination before this date, I do not accept they also could not have been addressed by Ms Yuan had she been provided an opportunity or otherwise would not have occurred if she had not been unfairly terminated.

  1. Accordingly, considering all the circumstances of this case, I find Ms Yuan would likely have remained employed up until 7 September 2024.  I consider this to be the “anticipated period of employment.”[34]

  1. Ms Yuan was paid at an hourly rate of $23.23.  Her payslip provided by the Respondent for her work in October 2023, indicates she worked 79 ordinary hours, 9 hours at the Saturday rate of $29.0375 and 25 hours at the Sunday rate of $34.8450, earning a total gross payment of $2,638.63, plus $326.44 in superannuation contributions for the period of 1 – 31 October 2023.  It is accepted a condition of Ms Yuan’s student visa is that she is restricted from working over 24 hours per week in semester periods and otherwise unrestricted when not engaged in study. 

  1. In additional submissions, which were not contested, Ms Yuan submits she regularly worked shifts on Monday, Tuesday, Wednesday and Sunday and that she would work additional hours during holiday periods.  There are 27 pay weeks in the period from 25 February 2024 to 7 September 2024. I estimate the remuneration Ms Yuan would have been likely to receive working for the Respondent each week from 25 February 2024 to 7 September 2024 as follows:

  • 1 x 8-hour Sunday shift per week = 34.8450 x 8 = 278.76

  • 16 regular hours per week = 23.23 x 16 = 371.68

  • Estimated weekly earnings = $650.44

  • Estimated weekly earnings for anticipated period = $17,561.88

  1. In addition, during the estimated 8 weeks of break from study over the Easter period and mid-year semester break, Ms Yuan would have likely been provided the opportunity to work up an additional 14 hours each week.  This calculation equates to 23.23 x 14 x 8 = 2601.76.

  1. I estimate the remuneration Ms Yuan would have been likely to receive working for Haidilao from 25 February 2024 to 7 September 2024 as $20,163.64.

d)   the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

  1. I am satisfied that the Applicant took reasonable steps to mitigate her loss and sought to find alternative suitable employment, since termination. 

e)          the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

  1. Ms Yuan has earnt a total of $5,824.19 inclusive of 2 weeks’ notice payment and payment for work as a delivery driver and in another restaurant since being dismissed by the Respondent.

f)          the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation

  1. As I have found the anticipated period of employment would have ended on 7 September 2024 and there being no evidence of the Applicant’s earnings between the time of making the order and the actual compensation, this factor is not relevant.

Compensation – how is the amount calculated?

  1. 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 Licenced Festival Supermarket (Sprigg). This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages”.[35]

  1. 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

  1. I have estimated that Ms Yuan would have remained employed by the Respondent until 7 September 2024.

  1. The remuneration Ms Yuan would have received, or have been likely to have received, from her dismissal on 25 February 2024 to 7 September 2024 to be $20,163.64 gross, plus superannuation.

Step 2

  1. Only monies earned since termination for the anticipated period of employment are to be deducted.[36]

  1. Ms Yuan earnt 5,824.19 during the anticipated period of employment and I am satisfied she has made effort to mitigate her loss but has been unsuccessful.  This calculation is therefore: $20,163.64 – $5,824.19 = $14,339.45.

Step 3

  1. I now need to consider the impact of contingencies on the amounts likely to be earned by Ms Yuan for the remainder of the anticipated period of employment.[37]

  1. I have already determined Ms Yuan’s earnings during the anticipated employment period. Therefore, I do not need to make a deduction for contingencies.

Step 4

  1. I have considered the impact of taxation but have elected to settle a gross amount of $14,339.45, plus superannuation.

Compensation – is the amount to be reduced on amount of misconduct?

  1. If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.

  1. I am satisfied that there was some misconduct of the Applicant, involving her conduct and language on 18 December 2023 which contributed to the employer’s decision to terminate her employment.

  1. 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 5%.

  1. Applying this reduction to the amount determined at step 4, the gross amount of compensation to be ordered is $13,622.48, plus superannuation.

Compensation – how does the compensation cap apply?

  1. Section 392(5) of the Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:

(a) the amount worked out under s.392(6); and

(b)   half the amount of the high income threshold immediately before the dismissal.

  1. Section 392(6) of the Act provides:

The amount is the total of the following amounts:

(a)   The total remuneration:

i.Received by the person; or

ii.   To which the person was entitled;

(whichever is the higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal.

  1. Given I have estimated Ms Yuan’s weekly earnings to be $650.44, plus payment for additional work during study breaks, a compensation cap of $18,026.48 applies in accordance with s.392(6) of the Act.

Is the level of compensation appropriate?

  1. Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate have regard to all the circumstances of the case.[38]

  1. The application of the Sprigg formula has resulted in an outcome where Ms Yuan would be awarded compensation of is $13,622.48, plus superannuation.  In the circumstances of this case, I am conscious my estimates of Ms Yuan’s earnings have not taken into account adjustments for award wage increases, shift penalties and allowances that would likely have been applicable had her employment continued, including additional work on weekends and Saturdays. 

  1. In these circumstances I do not consider the level of compensation determined by the application of the Sprigg formula to be appropriate in the circumstances of this case.  Rather, I consider the award of compensation should be increased by $2000 to $15,622.48, plus superannuation.  I am satisfied that this is an appropriate amount having regard to all the circumstances of this case as set out above.

  1. 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 Act.

Compensation Order

  1. Given my findings above, an order [PR782395] is also issued requiring the Respondent to pay Ms Yuan the amount of $15,622.48, less taxation as required by law, plus superannuation of $1,796.59 to be paid into Ms Yuan’s nominated fund, with both payments to be made within 14 days of the date of this decision.

COMMISSIONER

Appearances:

Ms Y Yuan as the Applicant.
Mr B Guo, Solicitor for the Respondent.

Hearing details:

17 and 18 September.
Melbourne.
2024.

Final written submissions:

4 October 2024.


[1] See Transcript, Court Book – Vol. 2 pages 45 – 53.

[2] Court Book – Vol. 1 page 31.

[3] Court Book – Vol. 1 page 32.

[4] (1995) 131 ALR 422 at [128].

[5] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498 at [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB Ross VP, Lacy SDP, Simmonds C, 21 March 2002, at [69].

[6] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at [373].

[7] Ibid.

[8] Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at [685].

[9] Edwards v Justice Giudice [1999] FCA 1836 at [7].

[10] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) at [23]-[24].

[11] [2020] FWC 2989.

[12] Witness Statement of Hua Peng, Court Book – Vol. 1 page 125.

[13] Ibid.

[14] Witness Statement of Dehua Yu, Court Book – Vol. 1 page 124.

[15] Witness Statement of Rebecca Liu, Court Book – Vol. 2 page 2.

[16] Ibid.

[17] Suspension Notice, Court Book – Vol. 1 pages 119 – 120.

[18] Witness Statement of Rebecca Liu, Court Book – Vol. 2 pages 2 – 3.

[19] Ibid at [13].

[20] Witness Statement of Ya Chen, Court Book – Vol. 1 page 128.

[21] Transcript of Proceedings on 18 September 2024 at [PN998]-[PN1001].

[22] Transcript of Proceedings on 18 September 2024 at [PN680]-[PN750].

[23] See Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB Ross VP, Williams SDP, Blair C, 21 August 2000) at [43]-[44]; also: Read v Gordon Square Child Care Centre[2013] FWCFB 762 at [46]-[49]; Rizvi v Salini[2023] FWC 3112 at [48]-[50], [56]-[57].

[24] Ibid.

[25] Bartlett v Ingleburn Bus Services Pty Ltd[2020] FWCFB 6429 at [19]; Reseigh v Stegbar Pty Ltd[2020] FWCFB 533 at [55].

[26] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [151].

[27] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).

[28] Ibid.

[29] Read v Gordon Square Child Care Centre[2013] FWCFB 762 [46]-[49]; also Rizvi v Salini[2023] FWC 3112 at [48]-[50], [56]-[57].

[30] Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB Ross VP, Williams SDP, Blair C, 21 August 2000) at [43]-[44].

[31] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198 at [9].

[32] Vennix v Mayfield Childcare Ltd[2020] FWCFB 550 at [20]; Jeffery v IBM Australia Ltd[2015] FWCFB 4171 at [5]-[7].

[33] He v Lewin [2004] FCAFC 161 at [58].

[34] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB Ross VP, Williams SDP, Gay C, 17 April 2000) at [34].

[35] [2013] FWCFB 431.

[36] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFC 7206 at [17].

[37] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Action SDP, Gay C, 31 October 2001) at [39].

[38] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFC 7206 at [17].

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Jones v Dunkel [1959] HCA 8