| [2022] FWC 2925 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jenny Wood
v
Amigoss Preschool and Long Day Care Co-Operative Ltd
(U2020/15433)
COMMISSIONER CAMBRIDGE |
SYDNEY, 3 NOVEMBER 2022 |
Unfair dismissal - Small Business Fair Dismissal Code - summary dismissal - no basis to establish reasonable grounds for belief of serious misconduct - dismissal not consistent with Small Business Fair Dismissal Code - no valid reason - procedural deficiencies - dismissal found to be harsh, unjust and unreasonable - compensation Ordered.
[1] This Decision involves an application for unfair dismissal remedy which has been made under section 394 of the Fair Work Act 2009 (the Act). The application was made by Jennifer Helen Wood (the applicant). The respondent employer has been identified to be Amigoss Preschool and Long Day Care Co-Operative Ltd ABN: 54 866 248 590 (the employer).
[2] The application was filed on 1 December 2020, and it indicated that the date of the applicant’s dismissal was 12 November 2020. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) (a) of the Act.
[3] On 11 December 2020, the representatives of the employer, Employsure Law Pty Ltd (Employsure) filed a Form F3 – Employer response to unfair dismissal application which inter alia, raised a jurisdictional objection to the application on the basis that the dismissal was consistent with the Small Business Fair Dismissal Code (the SBFD Code). The Form F3 also advised that the employer did not agree to participate in conciliation of the matter and asked that its SBFD Code objection be first determined in accordance with s. 396 (c) of the Act. Consequently, a conciliation conference which had been scheduled for 15 December 2020 was cancelled.
[4] A Pre-Hearing Conference/Conciliation was held on 18 January 2021. During the Pre-Hearing Conference/Conciliation the Commission granted permission pursuant to s. 596 of the Act, for either of the Parties to be represented by lawyers or paid agents. The Commission also adjourned proceedings until the finalisation of related criminal proceedings.
[5] On 19 April 2022, the applicant’s representatives, Haywards Solicitors, (Haywards) advised the Commission that the criminal proceedings in relation to the applicant had been determined by the Local Court on 11 April 2022, with all charges having been dismissed. The Commission listed further proceedings by way of Mention and Directions scheduled for 4 May 2022. On 3 May 2022, Employsure advised that the employer wished to have an opportunity for conciliation of the unfair dismissal claim, and the Commission indicated that conciliation would be explored at the Mention and Directions proceedings to be held the following day. During the Mention and Directions proceedings held on 4 May 2022, Haywards advised that the applicant did not wish to engage in conciliation.
[6] The matter has proceeded to arbitration before the Commission in a Hearing conducted in Sydney on 4 and 5 August, and 16 September 2022. The Hearing dealt with evidence and submissions which encompassed both the SBFD Code jurisdictional objection raised by the employer, and the substantive issues of the alleged unfair dismissal.
[7] At the Hearing, Ms A Perigo, barrister, instructed by Ms M Dodd solicitor, from Haywards appeared for the applicant. Ms Perigo introduced evidence from the applicant as the only witness called in support of the unfair dismissal claim. Ms E Ikonomou, solicitor, from Employsure appeared for the employer at the Hearing. Ms Ikonomou called three witnesses who provided evidence on behalf of the employer.
[8] The applicant first worked for the employer on a casual basis during 2008 and 2009, and she was then engaged on a fixed term, part-time contract in 2010. In February 2015, the applicant commenced full-time employment which continued until her summary dismissal on 12 November 2020, a period of about 5 years and 8 months.
[9] The applicant was engaged as a qualified Early Childhood Teacher, and she worked at the employer’s Preschool and Long Day Care Centre located in the Sydney suburb of Glebe. At the time of her dismissal the applicant was in charge of the employer’s Preschool Classroom.
[10] The work of the applicant was apparently the subject of two recorded complaints which involved a verbal warning provided in October 2015, and a written warning in October 2017. The employer confirmed that these warnings were not relied upon in respect to the summary dismissal of the applicant on 12 November 2020.
[11] In order to undertake her work the applicant must maintain a current Working With Children Check (WWCC) which is issued through the Office of the Children’s Guardian (OCG). In January 2022, the employer’s Business Manager and Chief Executive Officer, Mr Cesar Gomez, advised the applicant that her WWCC was about to expire. The applicant was aggrieved about what she felt was the late advice provided by Mr Gomez, which meant that for a period of time until 17 March 2022, when a new WWCC was issued to the applicant, she could not undertake any work that involved contact with children.
[12] On 17 March 2020, the applicant lodged seven grievance forms with the employer’s Board of Directors. These grievances involved various criticisms of the conduct and behaviour of Mr Gomez, including that the applicant felt intimidated and uncomfortable with the alleged inappropriate behaviour and conduct of Mr Gomez. The employer’s Board of Directors engaged Employsure to conduct an investigation into the grievances raised by the applicant. The investigation that was conducted by Employsure resulted in a confidential report that, in summary, made findings that the applicant’s complaints about harassment invasion of physical space, aggressive language, and workplace segregation were not substantiated, while the applicant’s grievance in respect of inappropriate managerial conduct was substantiated. The report provided by Employsure included a series of recommendations. However, neither the applicant nor Mr Gomez were provided with any information, advice, instruction, or directives arising as any outcomes of the investigation and report process.
[13] In October 2020, Mr Gomez had a discussion with the applicant’s immediate supervisor and centre Director, Ms Diana Alexandra Mejia Ortez, regarding what was identified to be the applicant’s poor work performance. As a result of this discussion, Ms Ortez prepared a written report that detailed a series of “shortcomings” which the applicant “had been presenting for several years” and which Ms Ortez said that she had noticed since she took over the centre Director position in November 2019. Ms Ortez presented this report to a meeting of the employer’s Board of Directors held on 15 October 2020.
[14] The employer’s Board of Directors authorised Mr Gomez and Ms Ortez to conduct what they described as a “without prejudice meeting” with the applicant which was intended to provide the applicant with an opportunity to negotiate terms to provide for her resignation from employment as an alternative to the employer commencing a disciplinary process. The “without prejudice meeting” process was a procedure that was recommended to Mr Gomez by Employsure as a means to secure the applicant’s resignation from employment.
[15] On the morning of 26 October 2020, shortly after the applicant arrived at work, she was asked to attend a meeting with Mr Gomez and Ms Ortez. The applicant was not given any indication about the reason for the meeting or the subject matter(s) for discussion, as she had been unaware of the report that Ms Ortez had provided to the Board of Directors on 15 October. The applicant was not provided with any opportunity to have a support person present at this meeting.
[16] Although the evidence of exactly what was said during the “without prejudice meeting” held on the morning of 26 October 2020, involved various contests, there were a number of fundamental aspects of the meeting which were not controversial. At the outset of the meeting, the applicant was required to sign a declaration document that had been prepared by Mr Gomez on advice and instruction provided by Employsure. The declaration document that was signed by the applicant, Mr Gomez, and Ms Ortez, relevantly sought to establish “that neither party can rely on any discussions held during this without prejudice meeting in any further proceedings.” 1
[17] After the applicant had signed the “without prejudice declaration form”, Mr Gomez informed the applicant of issues and concerns that the employer had with her work performance that included complaints that had been made by parents of children that attended the childcare centre. The details of the issues and complaints were not provided to the applicant. However, Mr Gomez made it clear that the employer felt that the employment relationship with the applicant had become untenable. Mr Gomez told the applicant that she could accept arrangements for the termination of her employment that would be embodied in a deed of release or alternatively she would face a disciplinary investigation. Mr Gomez required the applicant to provide a response by 5 pm that day to confirm her decision to either accept or reject what was described as the deed of release process.
[18] As the “without prejudice meeting” drew to a close, the applicant requested that she be permitted to take personal documents from her work computer. Mr Gomez advised that the applicant could have access to her work computer to remove personal documents, but she could only take copies of documents such as reports and templates which remained the property of the employer. The applicant then proceeded to transfer files from her work computer to a personal USB, and a short time later she departed from the workplace.
[19] At 5:02 pm on 26 October 2020, the applicant sent an email to Mr Gomez in response to the discussion that had occurred during the “without prejudice meeting” held that morning. In this email, the applicant indicated that she had consulted a solicitor and various criticisms were made of aspects of the “without prejudice meeting”. Further, the applicant proposed that she be provided with a minimum of 6 months’ pay in addition to all other accrued entitlements, as the financial component for the termination of her employment.
[20] At 6:19 pm on 26 October 2020, Mr Gomez sent an email response to the applicant which rejected criticisms of aspects of the “without prejudice meeting”. This email further advised that the employer was extending the deadline for the applicant’s response to the deed of release process until 5 pm on Tuesday, 27 October 2020. This email also confirmed that the applicant was on a period of paid leave until Wednesday, 28 October 2020.
[21] At 3:49 pm on 27 October 2020, Haywards sent an email to Mr Gomez which advised that they acted for the applicant and indicating inter alia, that the applicant would not be providing any response to the employer’s request that she resigned from her employment by 5 pm that day. At 5:25 pm on 27 October 2020, Mr Gomez sent an email response to Haywards which relevantly stated that there had been no request for the applicant to resign from her employment by 5 pm that day. Further, Mr Gomez advised that he had been provided with a medical certificate indicating that the applicant would not be fit for work from 27 October until 9 November 2020, and in those circumstances, Mr Gomez indicated that all correspondence would be put on hold.
[22] At 2:09 pm on 28 October 2020, Mr Gomez sent an email to the applicant which asserted that particular files that were the property of the employer had disappeared from the work computer that had been assigned to the applicant. The applicant did not respond to this email communication regarding files that had apparently disappeared from her work computer.
[23] On 30 October 2020, Haywards sent a letter to Mr Gomez which relevantly referred to the “without prejudice meeting” that had been held on 26 October. In this correspondence Haywards asserted that the employer had threatened to constructively dismiss the applicant during the “without prejudice meeting”. Haywards indicated that the employer had required the applicant to resign from her employment on some commercial basis or alternatively, it would conduct a disciplinary investigation into undisclosed allegations made against her. Further, in this communication, Haywards required that the employer either provide details of the allegations against the applicant, or withdraw the threat of dismissal, and provide an apology and undertaking by 2 November 2020.
[24] On 2 November 2020, Mr Gomez sent an email to Haywards which relevantly stated that the employer had received multiple complaints about the applicant and for which it had an obligation to investigate if the applicant wished to remain in her position. In respect to the complaints made against the applicant, Mr Gomez provided what he described as brief details which were set out against three dot points that respectively mentioned; the alleged falsification of a daily report on 23 September 2020; a failure by the applicant to provide parents with information when asked; and the alleged scolding of a child for not pasting well enough during an activity. In addition, Mr Gomez mentioned the recent correspondence that he had sent to the applicant regarding important documentation which could no longer be found on the company computers.
[25] On 5 November 2020, Haywards sent a further letter to Mr Gomez which referred to the email of 2 November and asserted that the three dot points did not contain sufficient detail to provide for any understanding of the matters that were being referred to and did not provide any basis for the applicant to adequately understand what she had been accused of. This correspondence further advised that once details of the complaints/allegations had been provided to the applicant she would consider them and reply accordingly. However, in the meantime the applicant intended to return to work on the following Monday (9 November 2020).
[26] On 9 November 2020, the applicant returned to work, and shortly after her arrival she was called to a meeting with Mr Gomez and Ms Ortez. At this meeting, Mr Gomez advised the applicant that she was been placed on paid suspension from duty and he handed the applicant a letter entitled, Confirmation of Suspension. The Confirmation of Suspension letter stated inter alia that, “a number of allegations of serious misconduct have recently been brought to our attention.” The details of these allegations of serious misconduct were not provided in the Confirmation of Suspension letter, and the applicant was instructed to await further instructions from the employer and to be available to participate in any investigation process.
[27] At 9:32 pm on 9 November 2020, the applicant received a further email from Mr Gomez which attached a letter entitled, Invitation to disciplinary meeting. The Invitation to disciplinary meeting letter set out five allegations, the first two allegations, which it was said came to the employer’s attention on 2 November 2020, involved allegations that on two separate occasions in April/May and between June and September 2017, the applicant had engaged in the physical abuse of a child whereby she had tied a student’s hand together with tape or rope (the abuse allegations). The third allegation contained in the Invitation to disciplinary meeting letter involved the issue of the applicant allegedly deleting files from her work computer which were the property of the employer. The fourth allegation involved the assertion that the applicant had failed to provide effective guidance to particular parents. The fifth allegation involved the applicant displaying inappropriate and disrespectful behaviour by scolding a child for not having pasted in the right spot in a brain activity.
[28] The Invitation to disciplinary meeting letter advised that the disciplinary meeting was to be conducted at 3:30 pm on Wednesday, 11 November 2020 via Zoom. Prior to participating in the disciplinary meeting on 11 November, the applicant provided the employer with a document responding to each of the five allegations that were contained in the Invitation to disciplinary meeting letter. The applicant’s written response strongly denied all of the allegations, and in particular rejected any knowledge of or involvement in the events mentioned in the abuse allegations.
[29] On 11 November 2020, the applicant participated in the disciplinary meeting conducted via Zoom. The applicant was provided with the opportunity to have two support persons present during the disciplinary meeting. The disciplinary meeting was conducted by a person identified as “Gwen from Employsure”. During the disciplinary meeting, Gwen advised the applicant that written statements had been made by witnesses to the events involving the abuse allegations. These “witness” statements had been made by respectively, Ms Ortez, Ms Silvia Lorena Leon Castellanos, who was an employee in the position of Baby Room Leader, and Ms Macarena Tiznado, who was an employee in the position of Toddler Room Leader. The “witness” statements that were made by these three individuals were not provided to the applicant.
[30] The five allegations contained in the Invitation to disciplinary meeting letter were put to the applicant during the disciplinary meeting and the applicant was invited to respond. The applicant responded and she also referred to the written response that she had provided earlier to the employer. The applicant raised particular concern that the abuse allegations, which related to events that allegedly occurred in 2017, had only surfaced following the “without prejudice meeting” process. Gwen asked the applicant if she wanted to provide any further information and then she concluded the meeting and advised the applicant that the employer would communicate an outcome from the meeting in due course.
[31] After the disciplinary meeting had concluded Mr Gomez considered the applicant’s responses and he determined that all five of the allegations against the applicant had been substantiated and he decided to dismiss the applicant. On the following day, 12 November 2020, Mr Gomez sent the applicant an email which contained a letter entitled Summary Termination of Your Employment. The letter of dismissal referred to the allegations of serious misconduct contained in the Invitation to disciplinary meeting letter of 9 November 2020, and the subsequent disciplinary meeting that was conducted on 11 November 2020. The letter of dismissal then set out the five allegations together with the responses provided by the applicant, and the letter recorded that in each instance the allegation was substantiated. The letter confirmed the summary dismissal of the applicant, and it advised that the applicant’s employment was terminated with immediate effect and without notice.
[32] In accordance with the employer’s mandatory reporting obligations, at around the time of the dismissal of the applicant, Mr Gomez reported the abuse allegations to the NSW police and the Department of Education.
[33] On 25 November 2020, the applicant was arrested by NSW police and charged with two counts of assault on a student while attending school. The Local Court of New South Wales dismissed these charges on 11 April 2022. As a result of the charges that were laid against the applicant, the Office of the Children’s Guardian and the National Education Standards Authority suspended the applicant’s accreditation which is required to enable her to work with children and to teach children. Accordingly, the applicant’s WWCC was revoked.
[34] Following her dismissal, the applicant has not been able to obtain other permanent employment largely because of the criminal charges that were pending trial and determination. The applicant has also relocated from Sydney to Mudgee to live with her parents from time to time. The applicant has heavily relied upon her parents for financial support since her dismissal and to assist with the significant costs outlaid in respect to the defence of the subsequent criminal charges. The applicant obtained some limited remuneration from casual fruit picking work. The applicant has sought reinstatement, or alternatively, monetary compensation as remedy for her alleged unfair dismissal.
[35] Ms Perigo, who appeared for the applicant, made verbal submissions in elaboration of and with reliance upon documentary submissions that had been filed and which were respectively dated 16 June, 1 August, and 30 August 2022. The submissions made by Ms Perigo were constructed upon a framework that identified that the determination of the applicant’s unfair dismissal claim involved the Commission answering three sequential questions. These questions were identified as; firstly, was the respondent, at the relevant time, a small business employer? secondly, if so, did the respondent comply with the Small Business Fair Dismissal Code (SBFD Code)? and thirdly, if the respondent was a small business employer and did not comply with the SBFD Code, was the dismissal of the applicant harsh, unjust, or unreasonable within the meaning of s. 387 of the Act.
[36] The submissions that were made by Ms Perigo indicated that in answering the first identified question, it was open to the Commission to make a finding that the employer was a small business at the time of the dismissal of the applicant.
[37] Ms Perigo made further submissions which referred to the SBFD Code. Ms Perigo submitted that the SBFD Code required consideration of two steps that needed to be established in order to provide for compliance with the SBFD Code. In this regard Ms Perigo submitted that the first step required determination of whether the employer had the belief that the conduct of the employee was sufficiently serious, and then the second step required consideration of whether that belief was based on reasonable grounds. Ms Perigo submitted that the second step incorporated the concept that the employer needed to have carried out a reasonable investigation in order to establish that the belief that they held was based on reasonable grounds. Ms Perigo further submitted that it was clear from established authority that there was no requirement to confirm that the belief of the employer was actually correct.
[38] In further submissions, Ms Perigo said that the application of the two-step process to which she had referred applied to the Summary Dismissal part rather than the Other Dismissal part of the SBFD Code. Ms Perigo submitted that the circumstances of the applicant clearly involved summary dismissal, and there was no prospect for any of the terms contained in the Other Dismissal part of the SBFD Code to have any application in this instance.
[39] The submissions made by Ms Perigo then asserted that the employer had essentially conceded that in respect to the allegations identified as 3, 4, and 5, the evidence had established that the employer had not complied with the SBFD Code. Ms Perigo said that in relation to allegations 4 and 5 the evidence confirmed the absence of any investigation by the employer, and in respect to allegation 3 the evidence of the inability of the decision-maker to be able to identify any of the deleted documents confirmed that any belief held by the employer was not based on reasonable grounds and thereby not compliant with the SBFD Code.
[40] Ms Perigo further submitted that the Commission should find that the belief that Mr Gomez had in respect of allegations 1 and 2, being the most serious allegations, was not a reasonable belief based on reasonable grounds. Ms Perigo said that Mr Gomez had made no enquiries of the employees who provided statements in respect of the serious allegations. Ms Perigo said that Mr Gomez had nothing more than a suspicion, as opposed to a belief, because he had just accepted the serious allegations on their face value, and he did nothing more by way of any inquiry or testing of those allegations.
[41] Ms Perigo submitted that a reasonable person would have engaged in some level of investigation and questioning of those that made the very serious allegations against the applicant. As an example, Ms Perigo mentioned that Mr Gomez made no enquiries or questioned why any of the three employees had not reported the alleged conduct of the applicant at any time sooner than three years after the events allegedly took place.
[42] Ms Perigo further submitted that Mr Gomez deliberately made no further enquiries in respect of the allegations of serious misconduct raised against the applicant because he had already made a decision that the applicant’s employment was not to continue. According to the submissions made by Ms Perigo, that decision to no longer continue the applicant’s employment, had been made on or around 15 October 2020, when the employer’s Board of Directors authorised Mr Gomez and Ms Ortez to engage in the “without prejudice meeting” process to have the applicant agree to a commercial settlement as basis for the termination of her employment.
[43] Ms Perigo submitted that the employer had not complied with the SBFD Code in respect to all of the five allegations upon which it had relied as basis for the dismissal of the applicant. Ms Perigo said that in respect to the more serious allegations 1 and 2, it was clear that Mr Gomez’s belief was not based on reasonable grounds as was the case with allegations 3,4, and 5.
[44] Ms Perigo made further submissions which addressed the factors contained in s. 387 of the Act. Ms Perigo submitted that the respondent had conceded that there wasn’t a valid reason for the dismissal of the applicant because the alleged conduct of the applicant in respect to allegations 1 and 2, had not been established as a matter of fact upon either the criminal or civil standard of proof. Further, according to the submissions of Ms Perigo, the procedural requirements identified in s. 387 of the Act were unable to be established because the employer had not conducted any proper investigation into the allegations made against the applicant.
[45] The submissions made on behalf of the applicant acknowledged that the applicant had been notified of the reasons for her dismissal and that she had been permitted to have a support person present during the disciplinary interview held on 11 November 2020. However, the applicant submitted that the timeframe for response to the allegations prior to the disciplinary interview, a period of two days was insufficient given the seriousness of the allegations. Further, the applicant submitted that the failure to provide her with the statements of the individuals that made the allegations denied proper opportunity for the applicant to respond.
[46] The applicant’s submissions also acknowledged that the employer’s business operations size meant that it did not have dedicated human resource management specialists. However, the applicant submitted that the employer had engaged a third party employee relations advisory service who had provided their assistance from the outset of the matter. Ms Perigo also submitted that the applicant’s length of service and the serious nature of the unproven allegations made against her were matters relevant to the alleged unfairness of her dismissal.
[47] In summary, the submissions made by the applicant asserted that upon analysis of the factors contained in s. 387 of the Act, the dismissal of the applicant was harsh, unjust, or unreasonable.
[48] Ms Perigo made further submissions regarding the remedy sought by the applicant for her alleged unfair dismissal. In this regard it was submitted that the primary remedy of reinstatement should be provided. Ms Perigo submitted that the respondent had not led any evidence upon which to establish that there was any impediment or difficulty in respect to the reinstatement of the applicant. In support of this submission Ms Perigo stressed that the applicant and Mr Gomez did not work closely together, and that the applicant believed that any difficulties with her return to the workplace could be addressed. However, Ms Perigo acknowledged that without the WWCC and teacher accreditation clearances it was simply not possible for the applicant to be reinstated. Consequently, Ms Perigo made submissions about the alternative remedy of compensation which she advanced should be made at the higher end of the scale particularly given the length of service of the applicant, and the significant impacts that the dismissal and associated criminal charges have had upon the applicant.
[49] Ms Ikonomou made verbal submissions on behalf of the employer during the Hearing. The verbal submissions of Ms Ikonomou elaborated upon the outline of submissions documents that had been filed and which were respectively dated 13 July and 13 September 2022.
[50] Ms Ikonomou commenced her submissions by referring to the question of whether reinstatement of the applicant would be an appropriate remedy. In this regard, Ms Ikonomou stated that the applicant had conceded during the Hearing that reinstatement would not be possible without her first having obtained the WWCC. Ms Ikonomou further submitted that the proposition advanced by the applicant to delay any determination of the matter or at least any determination in respect to remedy, pending the potential for the applicant to have obtained the WWCC, would cause prejudice to the employer. Ms Ikonomou submitted that there was no indication of how long it might take for the applicant to obtain the WWCC, with one indication being that it could take up to 12 months, and according to the submissions made by Ms Ikonomou, further unspecified delays potentially of this magnitude, should be rejected.
[51] The submissions made on behalf of the employer referred to the payroll activity reports provided in Exhibit 3 which it was asserted, provided evidence that demonstrated that the employer had three non-regular casuals engaged at the time of the applicant’s dismissal. Consequently, it was submitted that at the time of the applicant’s dismissal, the employer had 13 employees including the applicant. Therefore, the employer submitted that it was a small business employer and the SBFD Code had application in respect to the dismissal of the applicant.
[52] Ms Ikonomou made submissions which conceded that the employer was unlikely to meet compliance with the SBFD Code in respect of the third, fourth, and fifth allegations upon which the employer had relied as the basis for the dismissal of the applicant. Consequently, Ms Ikonomou submitted that the employer relied upon compliance with the SBFD Code in respect to the first and second allegations, being the assault (abuse) allegations.
[53] The submissions made by Ms Ikonomou stressed that the employer did not need to prove that the applicant had engaged in the conduct as was alleged in the abuse allegations, but rather that the employer had reasonable grounds to hold the belief that the conduct had occurred. In this regard, Ms Ikonomou submitted that Mr Gomez believed that the applicant had engaged in the conduct as was alleged in the abuse allegations when three employees came forward and made statements about the events which involved very serious allegations involving the abuse of a child.
[54] Ms Ikonomou submitted that Mr Gomez had reasonable grounds for that belief as it was reasonable for him to accept the statements that had been made by Ms Ortez, Ms Leon Castellanos and Ms Tiznado without making further inquiries, because it’s not common for someone to make that kind of allegation. Ms Ikonomou submitted that despite the subsequent challenges that have been made to the statements of Ms Ortez, Ms Leon Castellanos and Ms Tiznado, Mr Gomez still maintained that he believed something had happened. Consequently, according to the submissions of Ms Ikonomou, Mr Gomez held a reasonable belief that the applicant’s conduct in respect to the abuse allegations was sufficiently serious to justify her immediate dismissal.
[55] Ms Ikonomou further submitted that in order for the dismissal of the applicant to have complied with the SBFD Code it was not necessary for the employer to satisfy the SBFD Code in respect of all five allegations that were found against the applicant by the employer. Rather, Ms Ikonomou submitted that it was only necessary to establish that in the mind of Mr Gomez at the time that he dismissed the applicant, he had the genuine belief that the applicant had committed the first and second allegations, and that he had a reasonable basis for that belief.
[56] Ms Ikonomou also submitted that all of the circumstances that have unfolded since the time of the dismissal did not, and could not, alter the proper application of the SBFD Code. Ms Ikonomou submitted that for the dismissal of the applicant to have satisfied the SBFD Code it was only relevant to consider what Mr Gomez had relied upon at the time that he decided to dismiss the applicant, and anything that followed after that point in time was not relevant for the purposes of any application of the SBFD Code.
[57] The submissions made by Ms Ikonomou asserted that there was no need for any consideration of the criteria as set out in s. 387 of the Act regarding whether the dismissal of the applicant was harsh, unjust, or unreasonable, because a finding that the dismissal complied with the SBFD Code, swept away any such considerations. Ms Ikonomou submitted that if the Commission made a finding that Mr Gomez held a reasonable belief as to the first and second allegations, then the SBFD Code operated, no further contemplation was required, and a finding in favour of the employer must follow.
[58] In further submissions, Ms Ikonomou returned to the question of any remedy of the reinstatement of the applicant. Ms Ikonomou reiterated her earlier submissions which strongly resisted any reinstatement of the applicant. Ms Ikonomou further submitted that during the long period of time since the applicant had been dismissed, she had been arrested, and the Parties were subjected to police questioning, and then the subsequent criminal proceedings, and they have subsequently had to engage in the delayed unfair dismissal proceedings. Consequently, according to the submissions made by Ms Ikonomou, the reinstatement of the applicant could be diabolical for the employer as it would create significant disharmony in a small not-for-profit childcare business. Ms Ikonomou submitted that the hardships that the accusers, the applicant, and the employer had suffered over the last two years meant that reinstatement was not only inappropriate but would be doomed to fail.
[59] In conclusion, Ms Ikonomou summarised her submissions by stating that the Commission should find that the summary dismissal of the applicant was based on the reasonable belief held by Mr Gomez at the time of the dismissal. Ms Ikonomou submitted that at the time of the dismissal, Mr Gomez believed that the applicant had committed the serious misconduct as alleged in the first and second allegations. Ms Ikonomou submitted that it was irrelevant as to whether any subsequent examination of those allegations was unable to be sustained because all that was relevant for the operation of the SBFD Code, was the belief that was held by Mr Gomez at the time of the applicant’s dismissal. Ms Ikonomou submitted that the Commission should find that the dismissal of the applicant was consistent with the SBFD Code. Alternatively, Ms Ikonomou provided the concession that if the Commission found against the employer, the circumstances of this case warranted any monetary compensation provided to the applicant to be at the higher end of the compensation cap.
[60] Section 385 of the Act stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements can be identified in s. 385 which is in the following terms:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[61] In this instance there was no dispute that the applicant had been dismissed, and that the dismissal was not a case of genuine redundancy. Consequently, only the provisions of subsections (b) and (c) of s. 385 of the Act have any relevance.
Small Business Fair Dismissal Code
[62] Section 396 of the Act requires that the Commission must decide certain matters before considering the merits of any application for relief from unfair dismissal. One of the initial matters to be considered before any consideration of the substantive merits of an unfair dismissal application is whether the dismissal was consistent with the SBFD Code. Relevantly, s. 396 of the Act is in the following terms:
“396 Initial matters to be considered before merits
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.”
[63] It is clear from subsection 396 (c) of the Act that a determination of any application of the SBFD Code should precede any more general contemplation of whether the dismissal could have been considered to have been harsh, unjust, or unreasonable. Further, in the event that the dismissal of the applicant was found to have been consistent with the SBFD Code, any further consideration as to whether the dismissal was harsh, unjust, or unreasonable would become unnecessary.
[64] In this instance there was a level of contest as to whether the employer was a small business employer as comprehended by the meaning of small business employer stipulated by the terms of s. 23 of the Act. Section 23 of the Act is in the following terms:
“23 Meaning of small business employer
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, the employee is a regular casual employee of the employer.
(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):
(a) the employee who is being dismissed or whose employment is being terminated; and
(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.”
[65] Relevantly, subsection 23 (1) of the Act stipulates that if an employer employs fewer than 15 employees then they satisfy the meaning of being a small business employer. The applicant asserted that at the time of her dismissal the employer had 16 employees. The employer contended that three of the 16 persons identified as employees were casual employees who were not “regular casual” employees and therefore, by virtue of subsection 23 (2) (b) of the Act, should not be counted as employees for any determination as to whether the employer was a small business employer.
[66] The evidence that was provided about the engagement of the three individuals who were the subject of contest as to whether their status was that of a “regular casual” employee for the purposes of subsection 23 (2) (b) of the Act, focussed upon the payroll activity details provided in Exhibit 3. In summary, Exhibit 3 records the actual engagements undertaken by three named individuals who were employed by the employer during the 2020 calendar year. The first of these individuals was engaged in work for the employer on the following five occasions during 2020: 1 July, 29 July, 12 August, 9 September, and 18 November. The second person was engaged in work for the employer on the following five occasions during 2020: 7 October, 21 October, 4 November, 18 November, and 2 December. The third person was engaged in work for the employer on the following three occasions during 2020: 12 August, 18 November, and 2 December.
[67] The pattern of the engagements of the three individuals who were identified in Exhibit 3 could not be established to have any regularity. The respective engagements for work on each of five, and in respect to the third person, three occasions, during the entire 2020 calendar year, has confirmed a finding that these three individuals were not what must be logically meant by the terminology “regular casuals”. These three individuals could not be counted for the purposes of s. 23 of the Act and therefore at the time of the dismissal of the applicant, the employer had fewer than 15 employees.
[68] Therefore, the Commission has determined that the employer was a small business at the time of the dismissal of the applicant and the provisions of subsection 385 (c) of the Act require consideration. Specifically, by way of operation of s. 388 of the Act, it is necessary to determine whether the employer complied with the SBFD Code in relation to the dismissal of the applicant.
[69] The SBFD Code is in the following terms:
“Small Business Fair Dismissal Code
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[70] In this case, the employer asserted that the summary dismissal of the applicant was consistent with the SBFD Code. Specifically, the employer relied upon the terminology contained in the Summary Dismissal part of the SBFD Code. The employer acknowledged that it would be unlikely for the Commission to find that the employer had complied with the Other Dismissal provisions of the SBFD Code because not all facets of those provisions had been complied with. In any event, it would be difficult to contemplate assessment of the dismissal of the applicant in circumstances where, in the absence of any notice or payment in lieu of notice, the dismissal could not be considered to be anything other than a summary dismissal. A dismissal must logically fall within the SBFD Code to be either a Summary Dismissal or an Other Dismissal and could not conceivably be both. In simple terms, the Other Dismissal provisions of the SBFD Code do not represent a fall-back position that might be used to buttress a summary dismissal.
[71] The dismissal of the applicant was clearly summary in nature in that the employer did not provide notice or payment in lieu of notice, and the dismissal was immediate in effect when it was confirmed in the letter of dismissal dated 12 November 2020. The employer asserted that the dismissal of the applicant accorded with the first sentence of the SBFD Code which is repeated: “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.” Consequently, the jurisdictional objection raised by the employer had as its foundation, the contention that Mr Gomez believed that the applicant’s conduct was sufficiently serious to justify immediate dismissal, and that the belief of Mr Gomez was established upon reasonable grounds.
[72] The approach to consideration of the application of the Summary Dismissal provisions of the SBFD Code has been undertaken having regard for the Full Bench Decision in the case of Ryman v Thrash Pty Ltd (Thrash). 2 In particular, the text contained in paragraph (2) of paragraph [41] of the Decision in Thrash is on point, and the full text of that paragraph is as follows:
“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:
(1) If a small business employer has dismissed an employee without notice – that is, with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.
(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.”
[73] In closing submissions, Ms Ikonomou conceded that it was unlikely that the employer had complied with the SBFD Code in respect of the third, fourth, and fifth allegations that represented basis for the dismissal of the applicant. Consequently, the focus of consideration was specifically whether the employer had complied with the SBFD Code in respect of the first and second allegations, which were referred to as the abuse or assault allegations. Thus, the primary aspect of the determination as to compliance with the SBFD Code was whether Mr Gomez genuinely believed that the applicant had engaged in the conduct described in the abuse allegations such that it was sufficiently serious to justify immediate dismissal, and that the belief of Mr Gomez was established upon reasonable grounds.
[74] It has been instructive to examine the basis upon which the employer’s representatives essentially abandoned any reliance upon the third, fourth, and fifth allegations.
[75] In respect to the third allegation, the employer acknowledged that the evidence provided during the Hearing established that “Mr Gomez was unable to identify the alleged deleted documents in the forensic report that were listed in the dismissal letter.” 3 The corollary of this evidence has been that the finding that Mr Gomez substantiated in the dismissal letter regarding allegation 3, was not something that he had any actual knowledge of, and he either deliberately made a false decision, or he was recklessly careless in making a serious finding about something he knew little or nothing about.
[76] In respect of both allegations 4 and 5, the employer’s representatives stated that “There is no evidence before the Commission to find that Mr Gomez conducted an inquiry or investigation into this allegation.” 4 The absence of any inquiry or investigation into both allegations 4 and 5 then led to the employer’s representatives further stating, “Therefore, it is open for the Commission to find that the Respondent did not comply with the [SBFD] Code.”5 This conclusion would be a sound reflection of the Full Bench Decision in Thrash whereby the following statement can be extracted, “…and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.”
[77] Consequently, the position that was recognised by the employer in respect of allegations 3, 4 and 5, has provided confirmation that, firstly, in respect to allegation 3, Mr Gomez was capable of making a false or recklessly careless decision, and secondly, he made decisions about allegations 4 and 5 without any inquiry, investigation, or otherwise testing the subject matter of his determinations. In this context, examination of the evidence regarding his beliefs about allegations 1 and 2, the very serious abuse allegations, has been undertaken.
[78] During cross-examination Mr Gomez provided evidence which firstly established that in respect to the first abuse allegation, he read the written statements that had been provided by Ms Diana Mejia Ortez and Ms Silvia Leon Castellanos, and he read the applicant’s response which denied the event. The applicant subsequently reiterated her denials during the Zoom disciplinary meeting held on 11 November 2020. When questioned about the conclusions that he made in respect of allegation 1, Mr Gomez provided the following evidence:
“Yes. Mr Gomez, if we go back to paragraph 50 of your statement, where you say Diana’s and Silvia’s statements were very similar, which meant the physical abuse likely occurred, that’s just not right, is it?---It is right that something had happened and there was a suspicion that something had happened.” 6 [emphasis added]
[79] The evidence of Mr Gomez was that he had a suspicion that something had happened, and because there were three statements which alleged that two incidents of very serious child abuse had occurred, he decided not to believe the applicant. Importantly, the suspicion that Mr Gomez had, was transformed into a substantiated finding in the letter of dismissal without any questioning or other inquiry of the two individuals that had made the allegations. The following evidence of Mr Gomez summarised his level of activity regarding any inquiry or investigation of those individuals who made the first abuse allegation:
“Okay. Do I understand from your answers earlier that after you received these statements from Diana and Silvia, you didn’t actually question them about any of the details of the statements, or did you?--- No, I did not.” 7
[80] There was also another person who apparently witnessed the event that was alleged in the first abuse allegation. The statement of Ms Silvia Leon Castellanos that was provided to Mr Gomez included the following:
“7. I spoke to the Assistant Director at the time; Claudia Arbelaez, she untied the child and express her inconformity with Jenny.” 8
[81] Ms Arbelaez was no longer an employee of the employer, and she had apparently left Australia and was living in New Zealand. Mr Gomez gave very unconvincing evidence that he unsuccessfully attempted to find the contact details for Claudia Arbelaez. However, the New South Wales police managed to make contact with Claudia Arbelaez, and the following extract of the transcript of the Local Court proceedings demonstrates the benefit that may have been provided to Mr Gomez if he had undertaken some investigation of the first abuse allegation:
“Q. You just indicated that you had a phone call with Claudia about these allegations. Now, when you asked Claudia about the allegations, she told you that she didn’t remember anything like that occurring, didn’t she?
A. That’s correct.
Q. Something like that, an alleged eyewitness saying to the officer-in-charge, that they do not remember the event occurring, is significant, isn’t it?
A. That’s correct.” 9
[82] Mr Gomez dealt with the second abuse allegation in a manner that was consistent with his approach to the first abuse allegation. The following evidence of Mr Gomez during cross-examination summarised his acceptance of the second abuse allegation:
“So there were only two people that gave you information in relation to that one allegation?--- Yes.
Macarena and Ms Wood?--- Yes.
You did not make any enquiries, you just accepted what was written in that statement, didn’t you?--- Yes.
The other statements, as we have just gone through, are not consistent, are they, so it’s not reasonable to just accept them on their face without making further enquiries, is it?--- It was reasonable for me at the time. It’s not common that somebody makes that kind of allegation.” 10
[83] A careful examination of all of the evidence has established that Mr Gomez made decisions which substantiated allegations 1 and 2 without any proper inquiry, investigation, or other testing of the individuals who had made the allegations. For example, he did not ask any of the accusers why they did not make any report or other record of the events at around the time that they said that the events had occurred. Mr Gomez did not ask why these very serious allegations had not surfaced in any way for about three years.
[84] Mr Gomez failed to undertake any fundamental investigation of allegations 1 and 2 in the same way that he failed to test allegations 4 and 5. Mr Gomez did not test allegations 1 and 2 because he wanted the allegations to be sustained after he had failed to negotiate the applicant’s resignation via the “without prejudice meeting” process. Mr Gomez recklessly transformed nothing more than a suspicion that “something had happened” into substantiated findings of very serious child abuse.
[85] The submission 11 that it was reasonable for Mr Gomez to accept allegations 1 and 2 on their face without making enquiries because it was not common for someone to make that kind of an allegation, must be soundly rejected. The absence of any proper investigation and the reckless adoption of substantiated findings of very serious child abuse, has meant that any belief that Mr Gomez may have had that the applicant engaged in the conduct that was alleged in allegations 1 and 2, could not have been a belief that was established on reasonable grounds. The belief that Mr Gomez had was not a belief that the applicant’s conduct was sufficiently serious to justify immediate dismissal, but instead, he held no more than a suspicion that something had happened.
[86] The summary dismissal of the applicant was not consistent with the Summary Dismissal provisions of the SBFD Code because there were no reasonable grounds for any belief on the part of the employer that the applicant had committed the conduct that the employer had substantiated in respect of allegations 1, 2, and 3, as was particularised in the dismissal letter of 12 November 2020. The other matters contained in the dismissal letter which were identified in allegations 4 and 5, would not, even if properly proven, provide basis for the summary dismissal of the applicant. The dismissal of the applicant was not consistent with the SBFD Code.
Harsh, Unjust or Unreasonable
[87] As the dismissal of the applicant was not consistent with the SBFD Code, the matter has required further consideration in respect to that element contained in s. 385 (b) of the Act, being whether the dismissal of the applicant was harsh, unjust, or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust, or unreasonable. Section 387 of the Act is in the following terms:
“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.”
[88] In this case, the employer has not attempted to establish that there was valid reason(s) for the dismissal of the applicant. The five allegations of misconduct that were substantiated by the employer as providing reasons for dismissal, were not put to the applicant during cross-examination, nor was there any challenge made to the applicant’s evidence of her denials of each of these allegations. The employer submitted 12 that if it was unable to meet what it described as the lower standard of proof under the SBFD Code, then it would not be able to meet the higher standard of proof on the balance of probabilities. The corollary that arises from the employer’s approach in this case is somewhat disturbing.
[89] The SBFD Code has provided for circumstances where a small business employer has been found to have dismissed an employee fairly upon the basis of a belief that the employee committed serious misconduct, despite a subsequent discovery that the belief was factually wrong. The SBFD Code has meant that an innocent employee has been deprived of any remedy for their unfair dismissal if the small business employer had reasonable grounds for their erroneous belief.
[90] In cases where the serious misconduct upon which the dismissal was based leads to related criminal proceedings, the employee may be found not guilty of the misconduct upon the criminal standard of proof, that being beyond reasonable doubt. The employee may then maintain challenge to their dismissal, and ordinarily, an employer would advance a defence which would seek findings that the serious misconduct should be established upon the lesser, civil standard of proof, the balance of probabilities (elevated commensurate with the seriousness of the alleged misconduct). The SBFD Code provides for a further cascading of the standard of proof whereby a small business employer need only have reasonable grounds for what may be a wrong belief.
[91] In this instance, the employer did not attempt to defend the decision to dismiss on the basis that there could be any finding that, on the balance of probabilities, the serious misconduct was proven. Instead, the employer has conceded that the serious misconduct could not be established, and instead it sought to defend the decision to dismiss only upon the proposition that the decision was taken upon reasonable grounds at the time that it was made.
[92] Consequently, the employer’s position at Hearing was that the reason(s) that it had relied upon for dismissal of the applicant had no basis in fact, but that at the time of the dismissal it was thought to be correct. In circumstances where criminal charges of child assault followed from the employer’s findings, and those findings could not be defended on the civil standard of proof, it seems unconscionable and unscrupulous for the employer to attempt to use the SBFD Code to deny the applicant any remedy for unfair dismissal.
[93] The employer made erroneous findings of serious misconduct that not only destroyed the applicant’s employment but caused significant personal, financial, reputational, and career damage. The only response that the employer offered for its actions was that by way of attempted reliance upon the SBFD Code, it wanted to deny the applicant any remedy for unfair dismissal. This was a case where the employer was plainly wrong, but rather than properly admitting fault, taking responsibility, and seeking to provide the applicant with some restitution, it instead attempted to inflict further harm on the applicant by seeking to have her unfair dismissal claim jurisdictionally rejected.
[94] The reason for dismissal of the applicant was not sound, defensible, or well-founded. There was not a valid reason for the dismissal of the applicant.
[95] The employer notified the applicant of her dismissal and the reasons for that dismissal in the termination of employment letter dated 12 November 2020.
[96] The employer provided an opportunity for the applicant to respond to the allegations. The applicant provided a written response to the allegations, and she also made verbal responses during the Zoom disciplinary meeting held on 11 November 2020. However, the time frame of two days for providing responses to the allegations that included the abuse allegations from 2017, was unreasonably short.
[97] In addition, it was unreasonable and unjust to not provide the applicant with copies of the written allegations that had been provided to Mr Gomez.
[98] The applicant was provided with an opportunity to have a support person present during the Zoom disciplinary meeting held on 11 November 2020. However, the applicant was not provided with an opportunity to have a support person present at the “without prejudice meeting” held on the morning of 26 October 2020.
[99] The applicant was not dismissed for unsatisfactory work performance and therefore this factor is not relevant.
[100] The employer is a small business employer and appropriate recognition for a degree of informality and flexibility in respect to employment related procedures has been provided.
[101] There was no evidence that the employer had dedicated human resource management specialists. However, the employer engaged the services of a third party employment law firm, and it outsourced its human resources function to that third party, Employsure.
[102] Consequently, it was surprising that the employer’s actions included a litany of mistakes over the timeline of relevant events. It would appear that the employer could not be sure that the advice provided by Employsure actually ensured a fair and just process, or an outcome that was, on a reasonable and objective assessment, in any way defensible.
[103] The Commission has had regard for the severe, detrimental impacts on various aspects of the applicant’s life, that have flowed from the erroneous allegations of serious abuse of a child.
[104] Prior to the unfortunate events surrounding the dismissal of the applicant, she had a largely unblemished work record, and she had accumulated employment service related credits in respect of a period of about 5 years and 8 months.
[105] This unfair dismissal claim has involved consideration of the application of the Small Business Fair Dismissal Code (the SBFD Code). The applicant was dismissed with immediate effect, and not paid any amount in lieu of notice. Upon analysis, the Commission has concluded that the belief of the employer that the applicant had committed conduct that was sufficiently serious to justify her immediate dismissal, was not established on reasonable grounds. The employer, Mr Gomez, failed to undertake any reasonable investigation of the allegations which he substantiated as reason(s) for the applicant’s dismissal, and he recklessly substantiated serious findings of abuse of a child without any testing of the individuals who had raised these allegations.
[106] In such circumstances, the Commission has determined that the summary dismissal of the applicant was not consistent with the relevant provisions of the SBFD Code. If it were applicable to the dismissal of the applicant, the dismissal was not consistent with the Other Dismissal provisions of the SBFD Code. Therefore, the dismissal of the applicant was not consistent with the SBFD Code.
[107] Further, in this case, the reason for the dismissal of the applicant could not be established in fact. There was no attempt by the employer to establish that the findings of serious misconduct that it had relied upon as reason(s) for the dismissal could be sustained either in full or in part, on the balance of probabilities. Therefore, the reason for the dismissal of the applicant was not sound, defensible, or well-founded. There was not a valid reason for the dismissal of the applicant related to her capacity or conduct.
[108] The procedure that the employer adopted which included an unreasonably short timeframe for the applicant to respond to historical allegations of very serious misconduct, and the failure to provide the applicant with copies of the written allegations that had been provided to the employer, represented deficiencies that contributed to the unfairness of the applicant’s dismissal.
[109] The approach that the employer has adopted throughout the timeline of events that commenced in March 2020, when the applicant made complaints about Mr Gomez, followed by the “without prejudice meeting” process, through to the Zoom disciplinary meeting, then the applicant’s dismissal, and eventually the defence adopted in these proceedings, has, by and large, been contracted out to Employsure. Unfortunately, the employer’s actions, although apparently guided through third party advice, has represented something of a litany of mistakes. It has also been very regrettable to record that aspects of the evidence provided by Mr Gomez, and the applicant’s accusers, particularly Ms Ortez and Ms Tiznado, was of questionable veracity, and the unconscionable and unscrupulous conduct associated with erroneous claims of serious child abuse for which there was no attempted defence, are matters that should trouble the conscience of those individuals.
[110] In summary, the dismissal of the applicant was firstly not consistent with the SBFD Code and secondly, without valid reason involving established misconduct or capacity inadequacy. Further, the dismissal involved procedural deficiencies that were unjust and unreasonable. Consequently, an analysis of the various factors that are identified in s. 387 of the Act, has provided compelling basis to establish that the dismissal of the applicant was harsh, unjust, and unreasonable. Therefore, the applicant’s claim for unfair dismissal remedy has been established.
[111] The applicant has sought reinstatement as a remedy for her unfair dismissal. Ordinarily, in circumstances where a dismissal was founded upon erroneous findings of serious misconduct and the dismissed employee seeks reinstatement as appropriate vindication and rectification of the injustice that they have suffered, the Commission may be inclined to consider that such a remedy would be appropriate, despite the difficulties that would understandably be associated with the restoration of the damaged employment relationship. Unfortunately, in this instance, as the applicant’s barrister acknowledged 13 reinstatement was simply not possible because of the issue of the applicant not having a current Working With Children Check (WWCC).
[112] The WWCC issue has meant that the Commission can not be satisfied that reinstatement of the applicant would be appropriate. Therefore the Commission has decided that payment of compensation would represent an appropriate remedy for the applicant’s unfair dismissal. Consideration has subsequently been made of the factors which involve the quantification of any amount of compensation.
[113] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidance that can be identified from the Full Bench Decisions of, inter alia; Sprigg v Paul’s Licensed Festival Supermarket 14 (Sprigg); Smith and Ors v Moore Paragon Australia Ltd 15 and more recently, the cases of; McCulloch v Calvary Health Care Adelaide16; Balaclava Pastoral Co Pty Ltd v Nurcombe;17 and Hanson Construction Materials v Pericich18 (Pericich).
[114] Firstly, the Commission confirms that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.
[115] Secondly, in determining the amount of compensation that is to be provided, the Commission has taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[116] There was no evidence provided which established that an Order of compensation may impact on the viability of the employer’s enterprise.
[117] The applicant had been employed for a period of about 5 years and 7 months. The applicant would have been likely to have received remuneration of approximately $1,288.00 per week if she had not been dismissed.
[118] There was no evidence to provide any basis to conclude that the employment of the applicant may not have continued for a significant period of time. Although the difficulties that the applicant had with Mr Gomez were creating some tension in the employment relationship, these matters could have been handled in a manner which established a more harmonious workplace.
[119] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if she had not been dismissed, I have notionally considered that the employment of the applicant would have continued for at least a further two years. Therefore, the total remuneration that would have been received in the notional period of 104 weeks following dismissal amounted to a figure of $133,952.00.
[120] The total amount of remuneration received in alternative employment, as identified, and that which may be reasonably likely to be earned between dismissal and the making of the Order for compensation, has been calculated to be $6,384.90.00. In the particular circumstances of this case, the Commission has had regard for the loss of non-transferable employment credits occasioned by the unfair dismissal, and therefore no reduction shall be made in respect of the calculated remuneration received in alternative employment.
[121] Thirdly, in this instance there was no established misconduct of the applicant, and consequently the Commission has decided to make no reduction to the amount of compensation to be provided to the applicant on account of any established misconduct.
[122] Fourthly, the Commission confirms that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.
[123] Fifthly, the amount Ordered does not exceed the compensation cap as prescribed by subsection 392 (5) of the Act.
[124] Consequently, for the reasons outlined above, taking into account all of the circumstances of the case, and having cognisance so as not to apply the approach taken in the Decision in Sprigg in a rigid, determinative manner, as was cautioned in the Decision in Pericich, the Commission has decided that the amount of compensation to be provided to the applicant should be calculated by firstly, not subtracting the remuneration received in alternative employment from the figure of $133,952.00, and secondly, by way of application of the compensation cap fixed by subsection 392 (5) of the Act, the resultant figure is: $33,488.00 gross.
[125] Accordingly, separate Orders [PR747582] providing for unfair dismissal remedy in these terms will be issued.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR747581>
Appearances:
Ms A Perigo of Counsel, instructed by Ms M Dodd from Haywards appeared for the applicant.
Ms E Ikonomou, Solicitor from Employsure appeared for the employer.
Hearing details:
2022.
Sydney.
August, 4 and 5.
September, 16.
1 Exhibit 4 - Attachment “CG-09”.
2 Jeremy Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services [2015] FWCFB 5264.
3 Outline of Closing Submissions of the Respondent 13 September 2022 @ paragraph 26.
4 Outline of Closing Submissions of the Respondent 13 September 2022 @ paragraphs 29 and 32.
5 Outline of Closing Submissions of the Respondent 13 September 2022 @ paragraphs 30 and 33.
6 Transcript of 5 August 2022 @ PN100.
7 Transcript of 5 August 2022 @ PN242.
8 Exhibit 4 - Attachment “CG-21”.
9 Exhibit 1 - Attachment “Confidential Exhibit 1” @ pages 8-9.
10 Transcript of 5 August 2022 @ PN107-PN110.
11 Outline of Closing Submissions of the Respondent 13 September 2022 @ paragraph 19.
12 Outline of Closing Submissions of the Respondent 13 September 2022 @ paragraph 48.
13 Transcript of 16 September 2022 @ PN1179.
14 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
15 Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.
16 John McCulloch v Calvary Health Care Adelaide, (Ross P, Hatcher VP and Gostencnik DP), [2015] FWCFB 873.
17 Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, (Hatcher VP, Gostencnik DP and Cribb C) [2017] FWCFB 429.
18 Hanson Construction Materials Pty Ltd v Darren Pericich, (Ross P, Masson DP and Lee C), [2018] FWCFB 5960.