[2013] FWC 1583 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Kerryn Blunt
v
Alegna Health Centre
(U2012/13660)
SENIOR DEPUTY PRESIDENT RICHARDS |
BRISBANE, 15 MARCH 2013 |
Summary: whether dismissal harsh unjust or unreasonable - jurisdictional objections - s.389 of the Act - small business fair dismissal code s.388 of the Act - arbitration - Applicant dismissed harshly unjustly or unreasonably - compensation awarded - mitigation - contingencies.
[1] Ms Kerryn Maree Blunt (“the Applicant”) on 7 September 2012 made application under section 394 of the Fair Work Act 2009 (“the Act”) seeking an unfair dismissal remedy in relation to her dismissal by Alegna Health Centre (“the Respondent”). The Respondent’s business provides psychological counselling services. The Director was Ms Angela Elia.
[2] The circumstances of this application require some comment.
[3] Ms Elia did not present to represent the Company or to challenge the Applicant’s materials. She provided correspondence to the Commission indicating that she had been declared bankrupt and her business affairs were regulated by the public trustee. Because Ms Elia was a declared bankrupt she could not hold her directorship in the Respondent business any longer and had been advised to make no submissions or comments in relation to the proceedings on foot.
[4] The correspondence also indicated that the Respondent’s business as named above had ceased to trade and was in the process of being liquidated by the actions of the creditors. Correspondence from the chartered accountants who have audited the Respondent business (which included the profit and loss statement for the financial year ending 30 June 2012) indicate the business was insolvent by late September 2012. According to Ms Elia the business closed its doors on 30 September 2012.
[5] Be these circumstances as they may, none of the circumstances of the Respondent cause me to set the application aside because of any provision under the Corporations Act 2001. At least no case has been put to me in that regard. This is not surprising because no liquidator has been appointed to manage the business affairs of the Respondent: there appear to be too few assets that warrant such a course in any event. I add that there is no argument before me that the Applicant has entered a process of voluntary winding up such that s.500(2) of the Corporations Act 2001 applies.
[6] I also indicate at the outset the file indicates that two jurisdictional objections were to be raised in respect of this application. Neither jurisdictional objection, of course, was pressed at the time of the hearing, but I should dispose of them nonetheless.
[7] The first jurisdictional objection concerned a claim that the Applicant had been made genuinely redundant for the purposes of s.389 of the Act. It appears to me that for the purposes of grounding a jurisdictional objection under s.389 of the Act it must firstly be demonstrated that the Respondent initiated the dismissal for reasons of an operational kind (such that the Applicant’s position was made redundant).
[8] It appears to me that this initial factual situation cannot be made out. The reasons for this are that on 30 August 2012 Ms Elia, then in her capacity as the director of the Respondent, wrote to advise the Applicant of the termination of her employment. In so advising the Applicant, Ms Elia claimed as follows:
I am citing you for gross misconduct since you are now clearly in breach of the Alegna Health Code of Conduct and Confidentiality Policy. Computer records show as at 5 PM 29/8/2012 you removed and destroyed Alegna Health e-mail records without direction or approval. You service to the Alegna Health is now terminated effective immediately. You are not authorised to attend Alegna Health premises from this point on. Should you wish to confirm your employer rights you are most welcome to contact Fair Work Australia (sic)
[9] The Applicant contends through her evidence as led in these proceedings that there was no action taken by her of the kind alleged by Ms Elia. The Applicant contends that her conduct extended only to the ordinary management of her e-mail inbox and no documents of any kind were destroyed.
[10] That aside, the correspondence of 30 August 2012 is a complete answer to the jurisdictional objection as it is mooted in relation to s.389 of the Act. Clearly, on the face of the correspondence, the Respondent terminated the Applicant’s employment for reasons of conduct and not for operational related reasons.
[11] As a consequence, the jurisdictional objection mooted in relation to s.389 of the Act cannot be made out at the threshold level.
[12] A second jurisdictional objection was raised, and this concerned whether the dismissal was a dismissal for purposes of the Small Business Fair Dismissal Code for purposes of s.388 of the Act.
[13] Here it is necessary to make out that the dismissal was based on a reasonable belief in respect of the Applicant’s conduct. I have before me as a matter of evidence only the claims by the Applicant. The Applicant claimed there was no conduct which could ground a reasonable belief in the terms set out in the Small Business Fair Dismissal Code. The jurisdictional objection on grounds that the Small Business Fair Dismissal Code applied to the Respondent at that time and supports the summary dismissal cannot be made out.
[14] With those objections now disposed of, I turn to the substantive requirements of s.387 of the Act. Section 387 of the Act provides as follows:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
[15] On the evidence before me there was no valid reason for the dismissal of the Applicant. The Applicant’s evidence in this regard is uncontested and unchallenged, for the reasons I have set out above. Though I am not without some discomfort in reaching a finding on such a basis, the Respondent is not shielded in any way from the application as pressed.
[16] The Applicant was not notified in advance of the reasons for the dismissal nor was she given an opportunity to respond to the reasons for the dismissal.
[17] The dismissal concerned conduct issues and did not relate to performance. Therefore it is not necessary for me to consider whether or not the Applicant was warned of any performance concerns the Respondent may have held.
[18] The Respondent demonstrably is a smaller business. But there can be no evidence before me that the size of the business or the apparent absence of human resource expertise affected the procedures making for the dismissal.
[19] I am required at s.387(h) of the Act to consider any other matters that may be relevant to the dismissal.
[20] If Ms Elia had been positioned to lead evidence in this matter and to challenge or otherwise contest the Applicant’s claims, I would be better placed to provide an evaluation of the totality of the circumstances relevant to the dismissal. But Ms Elia has taken the position that she is not able to participate or lead any evidence in relation to the circumstances of the Respondent because she is a bankrupt. Ms Elia is continuing to trade through a different Company under the supervision of the public trustee.
Conclusion
[21] Given the constrained evidentiary context in which I am required to consider this matter, I can reach no other conclusion than that the Applicant was harshly unjustly or unreasonably dismissed from her employment by the Respondent.
[22] I now turn to consider the appropriate remedy in relation to the application.
REMEDY
[23] Section 390 of the Act reads as follows:
Division 4—Remedies for unfair dismissal
390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division (2)) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
[24] The Applicant is a person protected from unfair dismissal for the Act’s purposes, and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise a discretion as to whether the Applicant can be reinstated. Section 391 of the Act provides as follows:
391 Remedy —reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
[25] In the circumstances of this matter is not appropriate that the Applicant be reinstated or reemployed with the Respondent. The Applicant does not seek to be so reinstated or reemployed, and in any event it would appear that there is good reason to believe the Respondent business no longer trades and is subject to actions taken by creditors.
392 Remedy — compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), FWA must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that FWA considers relevant.
[26] In respect of the above matters that I must take into account I find as follows:
(a) the effect of the order on the viability of the employer’s enterprise
[27] There is no evidence that any order I might make for compensation would in some manner affect the Respondent’s viability. It appears the issue of the viability of the Respondent’s business has been determined by other circumstances. Any order I make in respect of compensation therefore may find some difficulty in being given effect, though it could not be said to in some way jeopardise the viability of the Respondent’s enterprise.
(b) the length of the person’s service with the employer
[28] The Applicant was employed in excess of two years with the Respondent, and as such would be taken to have begun to consolidate her employment. But still, this is a not a long period of service and if anything has a neutral effect on my disposition as to whether or not to make an order.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[29] On the evidence available to me, and that evidence is particularly limited, the Applicant would have been likely to have remained in employment for at least another 12 months.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[30] The Applicant provided a statutory declaration to the effect that she has been unable to mitigate her losses as she has been resident in New Zealand and attending to her mother, who is ill. The Applicant claimed that she had been travelling to New Zealand intermittently over the year and that Ms Elia had consented to her absences. The Applicant stated that Ms Elia had permitted her to work additional hours to make up the lost time and had otherwise drawn down on her annual leave entitlements.
(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
[31] The Applicant earned no remuneration since the time of her dismissal owing to the above circumstances.
(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
[32] This is not a matter that requires any consideration as it is irrelevant to these proceedings.
(g) any other matter that FWA considers relevant
[33] Given that the Applicant has been unable to earn income since the time of her dismissal because of her caring role, it is most unlikely that the Applicant in the 12 months that she would have worked but for the dismissal would have earned her usual remuneration. The Applicant has resided in New Zealand since the dismissal (as she could not identify an alternative position as flexible as that which she performed with the Respondent).
[34] In my view, the Applicant, had she not been dismissed, would have been likely to have run down her annual leave and other leave entitlements and been able to earn only 40% of the remuneration that she would have otherwise earned but for the dismissal. That is, I deduct 60% for contingencies from the remuneration the Applicant would have earned had she not been dismissed.
[35] Section 392(3) of the Act provides as follows:
Misconduct reduces amount
(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
[36] I do not discern in the evidence any misconduct on the part of the Applicant.
[37] Section 392(4) of the Act provides as follows:
Shock, distress etc. Disregarded
(4) The amount ordered by FWA to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
[38] My order for compensation makes no allowance for the above proscribed matters or considerations.
[39] Section 392(5) of the Act provides as follows:
Compensation cap
(5) The amount ordered by FWA to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
[40] Section 392(6) of the Act provides as follows:
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.
[41] The order that I propose to make must take into account the statutory cap. The quantum as ordered falls below the statutory cap. The total amount of compensation to be received by the Applicant is 20.8 weeks of her usual remuneration. This quantum reflects the 60% discount for contingencies, which amounts to 31.2 weeks.
[42] Section 393 of the Act provides as follows:
393 Monetary orders may be in instalments
To avoid doubt, an order by FWA under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.
[43] The Respondent has made no application in the course of these proceedings to pay any amount I may order to be paid as compensation in instalments.
CONCLUSION IN RELATION TO REMEDY
[44] I order that the Applicant be paid 20.8 weeks of her usual remuneration, inclusive of superannuation. Any amount that must be paid to the Applicant must be paid to her usual account within 21 working days of the date of this decision (15 March 2013). In making this decision I am cognisant that the enforceability of the order may fall into question, or else face difficulties, given the possible trading status of the Respondent’s business. The Applicant is aware of the circumstances.
SENIOR DEPUTY PRESIDENT
Appearances:
Ms K. Blunt, Applicant
No appearance for Respondent
Hearing details:
2013
11 March
Brisbane
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