FWA 1896
Fair Work Act 2009
Sea Change Conveyancing Pty Ltd
MELBOURNE, 19 MARCH 2012
Application for unfair dismissal remedy.
 Ms Fiona Stewart (the Applicant) was employed by Sea Change Conveyancing Pty Ltd (the Respondent) as a conveyancing clerk from April 2010 until her employment was terminated on 26 September 2011.
 The Applicant claimed that she was unfairly dismissed as she was dismissed without notice. The Respondent, a small business, claimed that its dismissal of the Applicant without notice was warranted by her serious misconduct. The Respondent claimed that it complied with the Small Business Fair Dismissal Code (the Code).
 The Applicant gave evidence on her own behalf. Ms Krystal Reynolds, an ex employee of the Respondent and the Applicant’s sister gave evidence for the Applicant. Mr Terry Cochrane, a mortgage broker, Ms Seanne Rouda the owner of the business, Mr Jason Brown a real estate sales person and Mr John Wainwright a real estate sales person gave evidence for the Respondent. Ms Antoinette Voight a legal practitioner was given permission to appear for the Respondent.
Jurisdiction of Fair Work Australia
 There is no dispute that the Applicant is a person who was protected from unfair dismissal. Further it is not disputed that the Respondent was at the time of the termination of the Applicant’s employment a small business. Fair Work Australia has the jurisdiction to determine the application.
The Evidence of the Applicant
 The Applicant gave evidence that she attended work as normal on 26 September 2011. On the morning of 27 September 2011 she received a text message from Ms Rouda telling her to check her emails. She then saw an email from Ms Rouda which had been sent at 5.16pm on 26 September which attached her letter of termination. 1
 That letter, which was dated 26 September 2011, advised the Applicant that she been terminated with immediate effect. The reasons for the termination were as follows:
“Further to our conversation held at the office and in reply to your email on 20 September 2011, I now wish to advise you of the following:
I hereby advise you that this letter is a formal notification that your employment with this company is now ended.
The decision to terminate your employment has been a difficult one for me as we have developed a friendship over your period of employment however, having said that, recent events have left me with no alternative but to end your employment due to the following:
1. I have been advised of discussions you have had with outside parties including referral sources regarding the financial state of my business which compromises my position in the market place as an individual and business.
2. I have been advised of discussions you have had with outside parties regarding my personal financial state.
3. I have been advised of discussions you have had with outside parties personally attacking and criticising me which also compromises my position in the market place as an individual and a business.
All of the above jeopardises the profitability and reputation of the business and as such there has been a breach of trust, confidentiality and privacy.
Your employment is also terminated on the basis of the following:
4. Your demeanour and attitude at work.
5. Your lack of professionalism dealing with referral sources.
I am providing you with notice effective immediately and for all concerned you are not required to return to work.
Employment shall cease this day.”
 The email which attached the letter said “I am sorry I am not good with confrontation however I think this is the best way to notify you.”
 The Applicant gave contradictory evidence in her witness statement about these events 2 and in her final submissions she acknowledged the errors in her evidence.3
 The Applicant denied having any discussions with Ms Rouda on 20 September 2011 about her employment. The Applicant gave evidence that the email she sent to Ms Rouda on 20 September 2011, in which she apologised to Ms Rouda for her conduct, was sent after a disagreement between Ms Rouda and the Applicant after Ms Rouda had terminated Ms Reynolds and hired another employee the next week. 4
 The Applicant denied discussing
 The Applicant admitted discussing the termination of her sister’s employment with other parties. 7 She gave evidence in cross examination that she spoke to a friend, Mr Brian Florance, who worked at Raine and Horne about the termination of her sister’s employment.8 She accepted that she was angry and upset at the decision of Ms Rouda to terminate her sister’s employment.9 The Applicant said the discussion took place while she was on her tea break. She admitted having an alcoholic drink with Mr Florance.10
 She denied talking loudly but she acknowledged that she swore about Ms Rouda. 11 She did not think she could be overheard.12
 The Applicant denied personally attacking or criticising Ms Rouda to any outside party. 13
 She further denied acting unprofessionally or that her demeanour and attitude at work were not professional. 14
 It was her evidence that she was given no warnings about her conduct or performance. She was not given any opportunity to answer the allegations made by Ms Rouda in her termination letter. 15
 The Applicant did not receive any pay in lieu of notice. 16
 The Applicant had no knowledge of any complaints about her work prior to the termination of her employment. 17
 Ms Reynolds’s employment was terminated by the Respondent in September though she was unable to confirm the date. It was her evidence that on the day her employment was terminated, she went to the Raine and Horne Office to tell her sister that there was an urgent phone call for her. She saw the Applicant talking to Mr Florance and she saw that she was upset. She did not hear the Applicant discussing the business or Ms Rouda’s financial or business affairs. She heard them discussing the termination of her employment. 18
The Evidence of the Respondent
 The Respondent did not file material in accordance with the directions of Fair Work Australia.
 I advised the Respondent on 1 February 2012 that given the failure of the Respondent to file material that the Respondent would need to make an application to file material at the hearing. I advised that the prompt filing and serving of any such material would assist such an application. The Respondent did not file a witness statement of Ms Rouda.
 The Respondent advised by email on 9 February 2012 that the evidence of the Respondent was known to the Applicant and Fair Work Australia. At the hearing Ms Voight sought leave to have Ms Rouda give oral evidence and submitted that the evidence of Ms Rouda was contained in the employer response form. This was her evidence in chief. 19 Subject to that limitation I permitted Ms Rouda to give evidence.
 Mr Cochrane is a mortgage broker and works closely with Ray White Real Estate. He referred work to the Respondent. He gave evidence that in August 2011 he had complaints from clients he had referred to Ms Rouda. It was Mr Cochrane’s evidence that the clients complained that “they were poorly handled by Fiona Stewart who was rude, ill mannered and lacked competence.” 20 It was his evidence that he raised these complaints with Ms Rouda.
 Consequently, both he and Ray White Real Estate stopped referring work to the Respondent.
 Mr Cochrane sent the Respondent an email on 18 October 2011. It was his evidence that he had sent an earlier email on or about 20 August 2011. He did not have a copy because his computer hard drive had been destroyed. 21 In the email of 18 October 2011 he advised the Respondent of the reasons he would no longer refer work to her. The subject of the email is “favour”. It was put to Mr Cochrane that he had sent the email of 18 October 2011 after the Applicant had lodged her unfair dismissal claim as a favour to the Respondent. Mr Cochrane denied perjuring himself.22 I accept Mr Cochrane’s evidence.
 It was put to Mr Cochrane that Mr David Carroll of Ray White Real Estate stopped referring work because the Applicant had lodged a caveat which Mr Carroll opposed. Mr Cochrane accepted that this was one of the reasons Mr Carroll did not refer work to the Respondent. 23
 Ms Rouda gave evidence that she forwarded the letter of termination to the Applicant on 26 September 2011 and that the Applicant had access to her emails via her phone.
 Ms Rouda received an email from the Applicant on 20 September 2011 in which the Applicant apologised for an incident that occurred. Ms Rouda also said that the Applicant apologised for this incident in person the next day. Ms Rouda told the Applicant that she was “not impressed with her attitude towards [her] or in the office.” 24 Ms Rouda accepted that the email was not about the conversation with Mr Florance but about her employing another person after the Applicant’s sister’s employment was terminated.25
 It is relevant to note that in Ms Rouda’s evidence in chief she said this about the conversation: “Ross wasn’t replacing a receptionist which Fiona’s sister was. Ross wasn’t employed to take the place of Fiona because at that point I had decided - I was still questioning whether Fiona’s position was going to be ... if Fiona’s position was going to remain. Ross was never put in to take over anybody’s position. Fiona and I had a discussion in relation to that. When I told her that Ross was coming in for that day, I had some personal matters to attend to, Fiona had sort of arced up a little bit at me and said “I don’t see why Ross has to come in here. If you can’t afford to, you know, pay my sister, how you can afford to pay Ross.” 26
 Ms Rouda said that the Applicant left the office on the day her sister’s employment was terminated for about 20-30 minutes. The Applicant went to the office of Raine and Horne where she was overheard “discussing [Ms Rouda’s] financial position both personal and business and calling [Ms Rouda] names.” 27 This was overheard by two referral sources.
 In her response to the application 28 Ms Rouda did not identify the day on which Ms Reynolds’s employment was terminated. In the Applicant’s letter of termination Ms Rouda referred to the email of 20 September 2011. Ms Rouda acknowledged this apology was not an apology for the Applicant’s comments to Mr Florance.
 Ms Rouda said she had complaints about the Applicant’s work. One of the complaints she relied on was from Mr Cochrane and dated 18 October 2011, the other was from Mr Jamil A Louche dated 25 October 2011. 29 While Mr Cochrane gave evidence that he in fact put his complaints to Ms Rouda in August 2011 no evidence was given about the other complaint and they post date the termination of the Applicant’s employment.
 Ms Rouda gave evidence of complaints from clients made in the last month of the Applicant’s employment. Also Ms Rouda’s previous employer had contacted her and told her that her clients were asking for him to take over their files. These events related to incidents that occurred when Ms Rouda was overseas. No detail was provided about the complaints. 30
 Ms Rouda gave evidence that two of her clients had been told by the Applicant that Ms Rouda was never at work and that she did not do anything. 31 It was her evidence that she told the Applicant that she should not be discussing her whereabouts with clients.
 Ms Rouda said that she made the decision to terminate the Applicant’s employment “on the everyday running of the business and the way Fiona’s attitude was towards me and in the office overall she made it quite uncomfortable to discuss anything with her most of the time and her ongoing discussions with referral sources after the event after we had spoken about this continued.” 32
 Ms Rouda said she had spoken to the Applicant about a complaint she received from a client in which the client complained that her settlement experience had been horrible and “she did not enjoy her dealings with Fiona and the client expressed she was too scared to ring and speak to Fiona as Fiona’s attitude was very poor.” 33
 She also referred to a client requesting a re-adjustment of her figures. She said the Applicant never replied to the client and as a result the cost would need to be borne by the Respondent. 34 Ms Rouda attached a copy of the complaint about this matter which was dated 17 October 2011.
 Ms Rouda said she spoke to the Applicant about the conversation that had taken place with Mr Florance. Ms Rouda was told about what the Applicant had said by Mr John Wainwright and Mr Jason Brown. She was told that the Applicant had been abusive towards her and that she had said “if I couldn’t afford to keep Fiona’s sister on at work then how can I afford holidays et cetera et cetera.” 35
 Ms Rouda spoke to the Applicant the next day and the Applicant admitted swearing about her. 36 Ms Rouda told her that it was “unprofessional speaking to referral sources about business related matters.” There was no suggestion that she told the Applicant that she was considering terminating her employment.
 In response to my question about whether she ever advised the Applicant that if her performance did not improve her employment would be terminated Ms Rouda said she had told the Applicant that she was not to speak rudely to clients. She accepted that she never told the Applicant that if her performance did not improve her employment would be terminated. 37
 Ms Rouda said that after her conversation with the Applicant “Fiona’s attitude towards [her] in the office was very awkward. We weren’t conversing.” 38 She said she called Fair Work Australia three times.39
 Mr Jason Brown gave evidence that he heard the Applicant speaking to Mr Florance. He was not able to give a date for the conversation but he saw the Applicant drinking from a can of UDL. 40 It was his evidence that the Applicant was not happy that Ms Rouda had sacked her sister. She used offensive language towards Ms Rouda and complained that Ms Rouda could afford to take holidays but could not afford to continue employing her sister.
 Mr John Wainwright gave evidence that he saw the Applicant at his business in September 2011. Again no precise date was given. He saw her drinking alcohol and heard her abuse Ms Rouda. He heard her make comments about Ms Rouda’s spending habits and travel arrangements in the context of the sacking of the Applicant’s sister. 41
 It was his evidence that Mr Florance used to refer a lot of clients to the Respondent but that Ms Rouda had told him Mr Florance had not referred to her this year. 42 Ms Rouda did not mention this in her material.
 It was Mr Wainwright’s evidence that the language used by the Applicant was not unusual in his office but when the language was used it was not “directed at each other.” 43
 The evidence supports the following findings:
1. The Respondent terminated the employment of Ms Reynolds in September 2011.
2. On that day the Applicant left work and went to the offices of Raine and Horne in Cranbourne and had a conversation with Mr Florance who referred work to the Respondent. Mr Florance was a friend of the Applicant.
3. In her conversation with Mr Florance, the Applicant used extremely derogatory language about Ms Rouda and questioned Ms Rouda’s financial circumstances, in particular how she could afford to take holidays when she could not afford to employ Ms Reynolds. This conversation was overheard by at least two people.
4. That night Ms Rouda was told about the comments made by the Applicant.
5. On 20 September 2011 the Applicant apologised by email to Ms Rouda about a conversation she had with Ms Rouda on that day about the employment of another employee. The Applicant questioned her about the employment of Mr Ross when her sister’s employment had been terminated.
6. On 21 September 2011 the Applicant apologised in person to Ms Rouda for her comments on 20 September 2011.
7. On 26 September 2011 the Applicant attended work but the locks had been changed. She worked the day.
8. On 26 September 2011 at 5.16pm Ms Rouda sent the Applicant a letter of termination by email.
9. At 8am on 27 September 2011 the Applicant received a text message telling her to check her emails and she received the letter of termination.
10. Ms Rouda had received complaints about the Applicant’s performance prior to the termination of the Applicant’s employment but the Applicant was not warned about her performance.
11. The Applicant was never told her employment was at risk.
 What is not clear on the evidence is whether the email apology on 20 September 2011 was sent on the same day as the conversation with Mr Florance. I am not satisfied on the evidence that these events occurred on the same day. I have concluded on the evidence before me that the conversation with Mr Florance occurred prior to 20 September 2011.
If a small business
 Section 385 of the Fair Work Act 2009 (the FW Act) provides that a person has been unfairly dismissed if Fair Work Australia 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.”
 It is not disputed that the Code applies:
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.
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.
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.”
 The Respondent is a small business. The Applicant was terminated without notice. As such I must determine if the Respondent believed on reasonable grounds that the employee’s conduct was sufficiently serious to justify immediate dismissal.
Was there an immediate dismissal?
 Given the incident relied upon by the Respondent that triggered the decision to terminate the Applicant’s employment without notice occurred on the day that Ms Reynolds’ employment was terminated, it is surprising that no party was able to say when this happened.
 However we know that the email that was sent by the Applicant on 20 September 2011 was sent after Ms Reynolds’s employment was terminated because both the Applicant and Ms Rouda accepted that this email was about another staff member being employed after that dismissal occurred.
 Therefore Ms Rouda waited at least six days before she sent the letter of termination to the Applicant on 26 September 2011. When the Applicant attended work on 26 September 2011 Ms Rouda did not advise the Applicant that her employment was to be terminated. She waited until the Applicant had worked the day and then emailed her a letter of termination.
 It is not necessary for me to determine if the Respondent, by its delay had waived its right to dismiss the Applicant for serious misconduct. The Code refers to conduct justifying immediate dismissal. Clearly Ms Rouda did not believe that the Applicant’s conduct was sufficiently serious to justify immediate dismissal as she did not dismiss her immediately.
Did the Respondent give the Applicant a reason why he or she was at risk of being dismissed.
 There was no evidence that the Applicant was ever warned that her employment was at risk.
 I find therefore that the dismissal was not consistent with the Code.
Was the termination of employment harsh, unjust or unreasonable?
 In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, Fair Work Australia must take into account the following:
s387(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);
 I find that the Respondent had a valid reason for terminating the Applicant’s employment. The Applicant admitted that she used extremely derogatory language about her employer. She admitted she was angry that her employer had sacked her sister and she vented this anger in the presence of Mr Florance who referred work to the Respondent. Her comments were overheard by two other real estate agents. Further this was not the only time the Applicant had behaved inappropriately towards her employer. In her email of 20 September 2011 the Applicant apologised for “cracking it” and understood that she should “just mind [her] business and keep [her] opinions to [herself]”. She admitted that she had let her “emotions get the better of [her].” 44
 I find that the Applicant’s conduct in behaving inappropriately towards her employer directly and about her employer to others was unacceptable. I also find that the Applicant’s poor work performance was a factor in the decision to terminate the Applicant’s employment. I accept the evidence of Mr Cochrane that he had complaints about the Applicant’s performance which he raised with Ms Rouda. I accept that Ms Rouda received complaints about the Applicant’s performance. On the basis of these findings I find that there was a valid reason for terminating the Applicant’s employment.
s387(b) whether the Applicant was notified of that reason;
 The Applicant was not notified of the reason for the dismissal before the decision to terminate her employment was made. 45
s387(c) whether the Applicant was given an opportunity to respond to any reason related to the capacity or conduct of the person;
 The Applicant was not given any opportunity to respond prior to the decision being made. The Applicant was terminated by email.
s387(d) any unreasonable refusal by the employer to allow the Applicant to have a support person present to assist at any discussions relating to dismissal;
 There was no discussions with the Applicant relating to the dismissal.
s387(e) if the dismissal related to unsatisfactory performance by the person—whether Fowler had been warned about that unsatisfactory performance before the dismissal;
 The Applicant was not warned about her unsatisfactory performance before the dismissal.
s387(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;
 This is a very small business. Ms Rouda sought advice from Fair Work Australia however it is not clear what advice Ms Rouda sought.
s387(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;
 No submissions were made on this criterion.
s387(h) any other matters that FWA considers relevant.
 I have had regard to the manner of termination. The Applicant was terminated by email. Ms Rouda did not speak to the Applicant about the termination.
 For the reasons set out above I find that the termination of the Applicant’s employment was harsh, unjust and unreasonable. The Applicant was terminated without notice.
 The Applicant was allowed to continue working after the Respondent became aware of her inappropriate behaviour.
 While the Applicant was not expressly warned that her behaviour towards her employer at work was putting her employment at risk, I accept that the Applicant was aware that her behaviour was unacceptable. After her conversation with Mr Florance was reported to Ms Rouda and after the conversation with Ms Rouda about the employment of another staff member, the Applicant apologised for her behaviour. Irrespective of the order in which these events occurred, after the first incident the Applicant again behaved inappropriately.
 While I accept that there had been complaints about the Applicant’s performance and these had been raised with her she was never expressly told that her employment was at risk because of these complaints.
 I consider that the Applicant’s behaviour towards her employer along with her poor performance justified termination of her employment. However I find that her performance and conduct did not warrant dismissal without notice. The failure to give notice means that the Applicant was unfairly dismissed.
 The Applicant is not seeking reinstatement of her employment.
 In assessing any amount in lieu of reinstatement, Fair Work Australia is required to have regard to the following:
(a) the effect of the order on the viability of the employer’s enterprise;
 I note that while some general evidence was given about a downturn in business, no submissions were made about the effect of an order of compensation on the viability of the employer’s enterprise.
(b) the length of the person’s service with the employer;
 The Applicant had worked for the Respondent since 19 April 2010, a period of 17 months.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;
 I have found that the Respondent was entitled to terminate the employment of the Applicant’s employment with notice.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;
 The Applicant made no attempt to mitigate her loss.
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation;
 Since the termination of her employment the Applicant has not earned any remuneration from employment.
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation;
 This is not a relevant consideration.
(g) any other matter that FWA considers relevant;
 On termination of her employment the Applicant received an additional two day’s pay.
(h) the Applicant’s misconduct.
 I am satisfied that the Applicant’s misconduct contributed to the Respondent’s decision to terminate her employment. However as I have determined that the Applicant was entitled to notice of termination, I have not discounted the amount of compensation.
Conclusion on remedy
 The Applicant was entitled to two weeks pay in lieu of notice. Consequently she has not been paid eight day’s pay. The Applicant was paid $1019.23 per week. Therefore I have decided to award the Applicant compensation of $1630.77 less applicable taxation within 14 days. An order [PR520878] to that effect will be issued with this decision.
F Stewart on her own behalf.
A Voight for the Respondent.
February 10, 23.
1 Exhibit A3
2 Exhibit A1
3 Transcript PN 903
4 Exhibit A1 at [2.a]
5 Ibid at [2.b]
6 Ibid at [2.c]
8 Transcript PN 79
9 Ibid PN 82
10 Ibid PN 100
11 Ibid PN 112-113
12 Ibid PN 115
13 Exhibit A1 at [2.d]
14 Ibid at [2.e]
15 Ibid at 
16 Ibid at 
17 Ibid at 
18 Exhibit A2
19 Transcript PN 485
20 Exhibit R3 at 
21 Transcript PN 448
22 Ibid PN 452
23 Ibid PN 453-457
24 Exhibit R4
25 Transcript PN 518
26 Ibid PN 518
28 Exhibit R4
35 Transcript PN 515
37 Ibid PN 573
38 Ibid PN 530
39 Ibid PN 532
40 Ibid PN 625
41 Ibid PN 699
42 Ibid PN 716
43 Ibid PN 734
44 Exhibit R1
45 Crozier v Palazzo Corporation Pty Ltd Print S5897 at PN 73
Printed by authority of the Commonwealth Government Printer
<Price code C, PR520876>