| [2021] FWC 36 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Michelle Dudley
v
Mhilian Pty Ltd
(U2020/7409)
COMMISSIONER SIMPSON |
BRISBANE, 6 JANUARY 2021 |
Application for unfair dismissal – Applicant summarily dismissed – Alleged misconduct –whether Applicant complied with the Small Business Fair Dismissal Code – Misconduct not a valid reason for dismissal – Dismissal Unfair – Applicant did not seek reinstatement – Compensation ordered
[1] On 29 May 2020 Ms Michelle Dudley made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy against Sylvan Beach Resort CTS 25728.
[2] In the Form F3 – Employer Response to unfair dismissal application, the correct legal identity of the Respondent was provided as Mhilian Pty Ltd. The employer said it had one employee at the time of dismissal.
[3] I listed the matter for a directions hearing on 10 August 2020. At this hearing, Ms Hilary Mockridge of the Respondent gave evidence that the Employer was Mhilian Pty Ltd as trustee for H & I Mockridge trading as Sylvan Beach Resort. She said the payslips said Sylvan Beach Resort.
[4] Ms Dudley said she had never heard of this name and did not know that this was her employer. I advised Ms Dudley that I was going to allow her time to conduct her own research on the correct legal identity of the Respondent, and to refer back to chambers to advise if she agreed with Ms Mockridge and required the application to be amended.
[5] It was not ultimately contested that the Ms Dudley’s employer was Mhilian Pty Ltd. The matter was listed for hearing via telephone on 29 September 2020. Ms Dudley was self-represented, and Ms Mockridge, Director, appeared for the Respondent. At the hearing, both parties agreed for the matter to be conducted as a determinative conference, rather than a formal hearing.
[6] In the Form F2 – Unfair Dismissal Application, Ms Dudley submitted that she was notified of the dismissal and the dismissal took effect on 11 May 2020. In the Form F3 – Employer Response, the Respondent agreed with these dates. At the determinative conference, Ms Dudley submitted that in fact she was not aware that she was dismissed on 11 May 2020. Ms Dudley contends that she was made aware of her dismissal when she received her termination letter on 18 May 2020.
[7] The termination letter, dated 18 May 2020 and signed by Ms Mockridge, stated the following:
“The reason for the termination is due to repeated abusive and disrespectful behaviour towards myself together with disclosure and discussion of confidential business information to third parties. This behaviour is deemed to be totally unacceptable and untenable as far as your employment with this business is concerned.”
[8] Ms Mockridge contends that the Applicant was dismissed without notice on 11 May 2020.
[9] It was not disputed by Ms Dudley that the Respondent was a small business with less than 15 employees at the time of Ms Dudley’s dismissal. I accept that the Respondent is a small business employer. Both Ms Dudley and Ms Mockridge initially accepted in their oral evidence that a dismissal occurred on 11 May.
[10] In relation to summary dismissal, the Small Business Fair Dismissal Code (SBFDC), provides as follows:
“Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”
[11] If it is determined that the dismissal complied with the SBFDC the application must be dismissed. If it is determined that the dismissal did not comply with the Code it becomes necessary to determine whether the dismissal was unfair in accordance with section 387.
[12] Section 387 of the Act provides:
“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.”
[13] Ms Dudley and Ms Mockridge gave their evidence at the same time. Ms Dudley filed a submission and the statements of Mr Crew 1 and Mr Williams2 were allowed into evidence on the basis that Ms Mockridge said she saw them as character references and Ms Mockridge did not challenge what they said. Ms Dudley filed a further statement of Ms White.3
[14] Ms Mockridge relied upon her own evidence and also a statement from Mr Bullas. 4 Mr Greg Williams provided a statement for the Respondent however was ultimately unavailable to give evidence so the statement is not relied upon in determining the matter.
[15] Ms Dudley was employed as a housekeeper for the Respondent on a 15 hour per week permanent part time contract. Prior to this, Ms Dudley was working on a casual basis. Ms Dudley has been employed by the Respondent for over 5 years. Ms Mockridge said she believed that Ms Dudley moved to part time employment in around 2016.
[16] Ms Mockridge put to Ms White that contrary to her statement that there had “been times” Ms Mockridge had shouted at Ms Dudley around the pool area, she had not shouted at Ms Dudley. Ms White said she could remember this happening on one occasion at Christmas time. Ms White’s evidence was to the effect that there was ongoing conflict between Ms Dudley and Ms Mockridge however said Ms Mockridge had never shouted at her.
[17] Ms Mockridge said there was a line between raising your voice and shouting and abusing someone. Ms White said either way Ms Mockridge should have spoken to Ms Dudley in her office rather than in front of others.
[18] Ms White accepted under cross examination she was not actually present when Ms Mockridge was alleged to have shouted at Ms Dudley and she was only going on what Ms Dudley had told her. Ms White later accepted her other evidence concerning alleged exchanges between Ms Dudley and Ms Mockridge was also hearsay which I deal with below.
[19] Ms Dudley said that on 14 December 2019, she spoke to Ms Mockridge in her office in an afternoon debrief at the end of her shift about two conditions. Ms Dudley said that Mr Graham Bullas was at the resort visiting. Ms Dudley said she believed Mr Bullas was Ms Mockridge’s boyfriend. Ms Dudley said Mr Bullas stepped into the office with Ms Mockridge, which Ms Dudley said she objected to as he was not an employee and Ms Dudley did not want him knowing her personal details. Ms Dudley claimed Mr Bullas forced his way into the office.
[20] Ms Dudley said this became an anxious time for her as all she wanted was to know her entitlements. Ms Dudley said she was not rude or threatening about this. Ms Dudley said she was told by Mr Bullas that if she didn't like the conditions she should look for another job and she had to give 4 weeks’ notice. Ms Dudley said the two conditions she was questioning were:
(1) A Task description to her daily duties as she wanted clarity to what she should be doing and what she shouldn't be doing as according to the award. Ms Dudley gave the example that she was washing quilts and blankets in the unit machines while they did have an account with a laundromat for this purpose.
(2) Monies owing with any entitlements Ms Dudley may or may not have had owing as Christmas was approaching and she had a pet in the vet.
[21] Ms Dudley said she asked for her holiday pay in the run up to Christmas and Ms Mockridge said she could not pay it. Ms Dudley said Ms Mockridge put $600 into her account the next day. Ms Mockridge said this was a different occasion, and there was an occasion when Ms Dudley rang her on the telephone and abused her and said she wanted to be paid for 20 hours a week. Ms Dudley said that conversation would have been in January and she was very busy on a 15 hour contract working more hours than she was paid for and she was only asking if she could upgrade her contract.
[22] Mr Graeme Bullas gave evidence in his witness statement that he witnessed what he called “elder abuse” including threats and humiliation referred to Ms Dudley’s conduct toward Ms Mockridge. Mr Bullas said this caused Ms Mockridge high level of stress.
[23] Ms White included in her statement a version of an exchange between Ms Dudley, Mr Bullas and Ms Mockridge concerning Ms Dudley’s request for increased hours. It was put to Ms White that she was not present at the meeting on 7 January involving Ms Dudley, Mr Bullas and Ms Mockridge and she accepted that. Ms White accepted that everything in her statement in that regard was based on what Ms Dudley told her. Ms White’s evidence was again to the effect that there was however ongoing conflict between Ms Dudley and Ms Mockridge.
[24] Mr Bullas said in his statement that on 7 January 2020 he witnessed Ms Dudley verbally abusing Ms Mockridge. Mr Bullas claimed Ms Dudley had also without consent shared information to third parties causing distress to her employer.
[25] Ms Dudley asked Mr Bullas about when she was alleged to have abused Ms Mockridge. Mr Bullas said he was sitting in a meeting as a witness but he said that the Respondent couldn’t pay more than 15 hours a week, but that he accepted it was not any of his business but that Ms Dudley was overpowering Ms Mockridge. Mr Bullas said he travelled to the workplace because Ms Mockridge was “copping so much yelling and abuse” from Ms Dudley, and Ms Mockridge wanted emotional support so he travelled 50 kilometres from Redcliffe to see if he could help her out in any way. Mr Bullas gave evidence that it was beyond the pale and completely inappropriate for Ms Dudley to talk to Ms Mockridge like that on 7 January.
[26] Mr Bullas said on 7 January Ms Dudley was screaming at Ms Mockridge to pay her 20 hours a week not 15 hours a week, and claiming to be treated terribly, and Ms Dudley’s conduct was inappropriate and humiliating.
[27] Ms Dudley said in reply there was no yelling or screaming at the meeting. Ms Dudley said she shut the door behind her but Mr Bullas put his foot in the door to be a witness. Ms Dudley said she asked if Ms Mockridge could put her contracted hours up and Mockridge said “no Michelle, you know I just can’t.” Ms Dudley said she went off and there was no yelling.
[28] In relation to the events of 11 May 2020 Ms Mockridge contended that on the day of Ms Dudley’s dismissal, Ms Mockridge was looking for Ms Dudley as her shift had ended an hour earlier. According to Ms Mockridge, when Ms Dudley finished talking to a resident of the Resort and emerged from the resident’s apartment, Ms Dudley started to yell and abuse Ms Mockridge. Ms Mockridge submitted that Ms Dudley was disrespectful and yelled words to the effect of “you need to give me more money” and that Ms Mockridge needed to pay her a certain amount of money.
[29] Ms Mockridge submitted that in response, she asked Ms Dudley to continue this discussion in an apartment away from the customers/residents of the Resort. Ms Mockridge contends that Ms Dudley refused this request and said that she was going home. According to Ms Mockridge, Ms Mockridge walked away from Ms Dudley because Ms Dudley was yelling at her and Ms Mockridge could not reason with her. Ms Mockridge claimed that Ms Dudley then yelled at her “don’t you walk away from me”. Ms Mockridge contended that she then asked Ms Dudley to hand in her keys. Ms Mockridge contends that at this point, the employment relationship came to an end.
[30] Ms Mockridge was asked if she was bringing the employment relationship to an end at that time and Ms Mockridge said that she had had enough of the abuse.
[31] Ms Dudley said the exchange that occurred at the end of the day began when Ms Mockridge asked Ms Dudley if she was finished (cleaning the resident’s room). Ms Dudley contends that she said she was finished and then proceeded to ask Ms Mockridge about JobKeeper/JobSeeker arrangements, in which Ms Mockridge said she was not getting anywhere and there was a lot of fine print. According to Ms Dudley, Ms Mockridge responded that she had been trying.
[32] Ms Dudley said she asked if there was any holiday pay as she had not been paid for eight weeks and she said she asked if her contract was null and void. Ms Dudley said Ms Mockridge said there is no work.
[33] Ms Dudley said she said to Ms Mockridge she thought she needed a separation certificate asking Ms Mockridge “can I get a separation form or something to fix up her payments.” Ms Dudley said Ms Mockridge said she was broke and can’t do anything.
[34] Ms Dudley said she put the vacuum cleaner down the stairs and got in her car and went home. Ms Dudley said two weeks later she got a letter saying she had been dismissed. I asked Ms Dudley if she understood she had been dismissed at the end of the discussion on 11 May. Ms Dudley accepted that Ms Mockridge asked her for the keys however claimed that Ms Mockridge said when you get back, have a different attitude. This sits uneasily with Ms Dudley’s form F2 application that said Ms Dudley had been dismissed on 11 May 2020 and also said that her dismissal took effect on 11 May 2020.
[35] Ms Dudley claimed in her oral evidence for the first time that she was not sacked that day. I asked Ms Dudley why her form F2 said what it did and Ms Dudley said she did not know, but maybe it was because the termination letter of 18 May said the dismissal occurred on 11 May.
[36] Ms Dudley confirmed in her oral evidence that she did not receive wages in the eight week period before 11 May and did not perform any work for the Respondent in that eight week period. Ms Dudley said the last day she performed work (before 11 May) was on 18 March. Ms Dudley said on 18 March she was told she would be called when there was work. Ms Dudley agreed 11 May was the first day she had come back to work in eight weeks. Ms Mockridge said she believed the last time Ms Dudley worked before 11 May was 27 March. Ms Mockridge said she had told Ms Dudley at the time there was no work.
[37] It does not appear from the evidence that Ms Mockridge ever formally advised Ms Dudley that the employer was standing her down or explained its legal basis for doing so, which would explain why Ms Dudley was questioning the status of her employment arrangements on 11 May as claimed. Ms Mockridge said she sent the letter advising of the termination dated 18 May on 18 May.
[38] Ms Mockridge said Ms Dudley was left in no doubt on 11 May that she was being dismissed, and that Ms Mockridge said she asked Ms Dudley to return her keys and to not return, to which Ms Mockridge said Ms Dudley replied “Are you sacking me? You can’t do that” and Ms Mockridge claimed she replied, “Yes I can, just watch me”. Ms Dudley rejected this version.
[39] Ms Mockridge said in closing that she did not feel she was treated with respect by Ms Dudley. Ms Mockridge claimed Ms Dudley’s behaviour toward Ms Mockridge changed after her husband died.
[40] I have given consideration to all of the evidence in relation to the reason for dismissal being that Ms Dudley engaged in repeated and disrespectful behaviour toward Ms Mockridge. There is a clear divergence between the evidence of Ms Dudley and Ms Mockridge about the nature of the exchanges in December 2019, January 2020 and May 2020. Ms White could not provide any direct evidence concerning these matters. Mr Bullas could in relation to the January 2020 meeting, but not the 11 May 2020.
[41] On balance I am inclined to accept the evidence of Ms Mockridge concerning claims Ms Dudley spoke to her inappropriately and aggressively on the afternoon of 11 May 2020 probably on the earlier occasions. It is more likely than not that her voice was raised in these exchanges. Such behaviour does fall within the category of misconduct. However, I have concluded that overall there was not a proper basis to be satisfied that employer had reasonable grounds to believe that Ms Dudley’s behaviour on 11 May was of a nature sufficiently serious to justify summary dismissal when viewed in context and in circumstances where Ms Mockridge on her own evidence accepted that she had never warned Ms Dudley that such conduct could lead to her dismissal.
[42] The Respondent conceded that there had been an underpayment of $3000 at an earlier stage of the employment relationship that was made good after Ms Dudley had disputed the issue. The context of the events as at 11 May 2020 were also highly stressful for both parties. Ms Mockridge’s business was severely impacted by COVID-19 and from late March 2020 could simply offer no work for a period of eight weeks. Ms Dudley had been without income during this period as Ms Mockridge had been unable to obtain JobKeeper payments by this time and the legal basis for a stand down had not been properly explained. In its proper context it is understandable that Ms Dudley was emotional about her dire financial situation. Given all of that, in my view the proper course was for Ms Mockridge to have warned Ms Dudley that she was at risk of being dismissed if she continued with the behaviour as alleged by Ms Mockridge, rather than to move immediately to dismissing her.
[43] Ms Mockridge accepted during her evidence that she had never given Ms Dudley a warning, or told her that she was at risk of being dismissed because of her conduct toward Ms Mockridge. On that basis the Respondent cannot rely on the “Other Dismissal” part of the Code on the basis of repeated abusive and disrespectful behaviour.
[44] Another reason given by the Respondent for the termination was an allegation that Ms Dudley had made derogatory comments to others about Ms Mockridge which exacerbated friction between herself and the body corporate. Ms Mockridge said the body corporate wanted to get Ms Mockridge out, which would lead to the termination of her contract and her ability to conduct the business. The result of terminating her contract meant she could not operate her business there. Ms Mockridge said Ms Dudley was always “in there talking to them.” Ms Dudley denied this allegation. Ms Mockridge appeared unable to provide any specific evidence herself to support this allegation.
[45] I have concluded that given no specific evidence has been provided, overall there is not a proper basis to be satisfied that the employer had reasonable grounds to believe that Ms Dudley had been disclosing and discussing confidential business information concerning the Respondent with third parties. On that basis this reason does not satisfy the Code for the purposes of summary dismissal.
[46] It was not disputed on the basis of the oral evidence of both Ms Mockridge and Ms Dudley that the termination flowed from the events of 11 May 2020. Ms Mockridge was asked if it was the conduct of the 11 May itself that warranted dismissal on the spot? Ms Mockridge said if it was a one off event it could have been tolerated however it was a culmination of events and Ms Mockridge’s evidence was to the effect that a great deal of stress had been removed from her after Ms Dudley’s dismissal.
[47] Given my findings above concerning the reasons for termination, I am not satisfied that either the reason in relation to alleged abusive or disrespectful behaviour, or in relation to disclosing and discussing confidential information with third parties provided a valid reason for termination under section 387. As already discussed the proper course in all of the circumstances would have been for Ms Mockridge to warn Ms Dudley before terminating her, especially given the stressful circumstances.
[48] Having considered the competing versions of what was alleged to have been said during the exchange between Ms Dudley and Ms Mockridge on 11 May, I am inclined to prefer the version of Ms Mockridge that it was made clear to Ms Dudley that she was being dismissed that day. Primarily because that is consistent with both parties stated positions in the material filed right up until the hearing itself when Ms Dudley indicated for the first time that she did not believe at the time she was dismissed until she received the letter dated 18 May.
[49] In relation to whether Ms Dudley was given an opportunity to respond in relation to her conduct before her dismissal, Ms Mockridge said that she asked Ms Dudley to go into a room where they could talk about it but she refused. Ms Dudley rejected that claim, and claimed that Ms Mockridge was quite happy to take to the keys off her and told her she would ring her when she needed her. Whilst I have rejected Ms Dudley’s version, on either version given the nature of the way the exchange occurred, it appears Ms Dudley was not given an opportunity to respond to an allegation of misconduct that may have led to her dismissal.
[50] Ms Mockridge made clear the dismissal was related to conduct not capacity and the way Ms Dudley carried out her duties was not in dispute. I asked Ms Mockridge if she had warned Ms Dudley about the way she claimed Ms Dudley spoke to Ms Mockridge before the alleged dismissal of 11 May and as already stated her evidence was to the effect that she had not. Ms Mockridge claimed Ms Dudley was cranky all the time around Christmas the year before and that she told Ms Dudley at that time not to speak to her in a disrespectful way. Whilst it may be the case that Ms Dudley did not accept Ms Mockridge’s offer to go into a room to discuss the situation on 11 May, Ms Mockridge should have warned Ms Dudley about her conduct and that such conduct could lead to her dismissal, which she did not do.
[51] There is no evidence of the Respondent refusing a request from Ms Dudley for a support person, however given the manner in which the dismissal occurred there was limited opportunity for Ms Dudley to have made such a request.
[52] Section 387(e) is not relevant in this case. The Respondent is a small business employer without a dedicated human resource manager. This would have been likely to impact the procedures followed in effecting the dismissal.
[53] Ms Dudley had been an employee of the Respondent for a considerable period having moved from casual to permanent part time status in 2016. Whilst it was made explicit from the evidence, it is apparent that the Respondent stood down its employees in connection with COVID-19 and Ms Dudley had not been paid for a period of approximately two months at the time of her termination.
[54] Having weighed each of the factors as required under section 387 given I have not been satisfied the Respondent had a valid reason for dismissal, and other procedural flaws I am satisfied overall that the dismissal was harsh, unjust or unreasonable.
[55] Ms Dudley made clear she did not seek reinstatement and instead sought compensation. Ms Dudley was paid $21.50 per hour at the time of termination. Her contract of employment was permanent part time for 15 hour per week, however the evidence was that 11 May was the first day that Ms Dudley had worked in approximately two months because of COVID-19 and the associated impact on the business.
[56] Ms Mockridge confirmed that Ms Dudley was not paid notice on termination. Ms Dudley said she would otherwise have been entitled to four weeks’ notice but for the summary dismissal. There was clearly significant strain on the relationship between Ms Dudley and Ms Mockridge. There is a degree of speculation about estimating how much longer the relationship would have survived and how much future income would have been earned had she not been dismissed on 11 May given all of the issues in play. Whilst the length of employment was considerable, it is apparent the relationship was nearing breaking point. I have estimated that Ms Dudley would have earned the equivalent of another eight weeks’ pay at her contracted rate which is $322.50 per week multiped by eight weeks equating to $2,580.
[57] Ms Dudley said she had not gained employment as at the time of the hearing in September 2020. Ms Dudley said she had been working with a friend with “holiday help on the island” starting about 25 May, earning $20 an hour and getting a couple of hours a week approximating $40 a week, and had done that about four times equalling approximately $160. $160 subtracted from $2,580 equals $2,420.
[58] No deduction is to be made on the basis of social security payments received. Ms Dudley said she had another application at Waterways and she started on the New Start payments from 1 June. I am satisfied Ms Dudley made efforts to mitigate her loss and make no deduction on that basis, or on the basis of social security payments received.
[59] For reasons explained above I have found Ms Dudley engaged in misconduct on 11 May 2020 which ultimately contributed to the reason to terminate her employment. On that basis I deduct two week’s pay under s.392(3), bringing the amount to $1,775.50.
[60] The business provides body corporate services and also management rights of some apartments in Ms Mockridge’s letting pool. Ms Mockridge said it has been difficult to pay her bills but did not give evidence that the business was not capable of paying an order for compensation if made, or that the business was insolvent.
[61] There are no other matters I consider relevant. I intend to issue an order separately and concurrently with this decision that Mhilian Pty Ltd pay Ms Michelle Dudley the sum of $1,775.50 gross taxed according to law within 28 days of the date of this decision.
COMMISSIONER
Appearances:
Ms M. Dudley appearing on her own behalf.
Ms H. Mockridge appearing for the Respondent.
Hearing details:
2020,
Brisbane:
September 29
Printed by authority of the Commonwealth Government Printer
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1 Exhibit 1.
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4 Exhibit 3.