DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Gurbinder Singh
v
Dairy Kosher Catering Pty Ltd T/A Milk n Honey
(U2016/924)

Application for relief from unfair dismissal.

Introduction

[1] On 2 March 2016, Mr Gurbinder Singh (Applicant) made an application pursuant to section 394 of the Fair Work Act 2009 (Act) for a remedy in respect of his dismissal by Dairy Kosher Catering Pty Ltd T/A Milk n Honey (Respondent).

[2] On 24 March 2016, the Applicant contacted the Commission and requested the name of the Respondent be amended from Daily Kosher Catering Pty Ltd to Dairy Kosher Catering Pty Ltd.

[3] The Respondent did not file a response to the unfair dismissal application.

[4] On 18 April 2016, the matter was listed for conciliation before a Fair Work Commission (Commission) Conciliator, however the conciliation could not take place as the Respondent did not attend.

[5] On 21 April 2016, directions were issued for the filing of witness statements and submissions. The Applicant was directed to file and serve his material by noon Monday, 16 May 2016. The Respondent was directed to file and serve its material by noon Monday, 6 June 2016. A notice of listing was also issued, listing the matter for hearing on 18 July 2016.

[6] The Applicant did not comply with the directions of 21 April 2016. Consequently the matter was listed for a non-compliance hearing.

[7] On 20 May 2016, the matter was listed for a non-compliance hearing before Deputy President Kovacic. The Applicant and the Respondent participated in the hearing. The Applicant was granted an extension to file and serve his material by Monday, 23 May 2016. Amended directions were issued and the Respondent was directed to file and serve its material by Tuesday, 14 June 2016. Deputy President Kovacic approved changing the name of the Respondent from Daily Kosher Catering Pty Ltd to Dairy Kosher Catering Pty Ltd.

[8] The Respondent did not comply with the amended directions. On 29 June 2016, the Commission contacted the Respondent and was told that Mr Shahaf Ohana does not own the business any more, that instead it was owned by Natalie. When asked to be put through to Natalie the Respondent hung up on the Commission.

[9] On 30 June 2016, the matter was allocated to me. On 11 July 2016, my chambers contacted Mr Ohana of the Respondent by email reminding him that he should provide materials prior to the hearing and that “the matter will be determined on the basis of the evidence and submissions before the Commissioner at the time of the hearing.” 1

[10] On 14 July 2016, my chambers contacted the Respondent and was told that Mr Ohana was the previous owner, that the current owner was Simon. My chambers left a message for the owner to return the call. The Respondent did not do so.

[11] The matter was heard on 18 July 2016. The Applicant gave evidence on his own behalf.

Background

[12] The Applicant commenced full-time employment with the Respondent on 11 March 2014. 2 The Applicant was employed as a cook.3 The Applicant was a Section 457 visa employee sponsored by the Respondent.

[13] On 2 March 2016, the Applicant attended work to perform his job as usual. 4 The Applicant submits that he and another employee, the Applicant’s brother, Mr Dilsher Singh, were called to a meeting with Mr Ohana of the Respondent and told “I sold my business to Ido Stein and new business will not able to sponsor you guys, you finish from this business, you can go home.”5 There was then some discussion about unpaid entitlements and wages. The Applicant submits that Mr Ohana said “my accountant will contact you to pay you”.6

[14] On 3 March 2016, the Applicant contacted Mr Ohana of the Respondent via text message regarding unpaid entitlements and wages. 7 The Respondent instructed the Applicant to communicate with his accountant as a third party.8

[15] On 4 March 2016, the Applicant contacted the Respondent’s accountant via text message. 9 The Respondent’s accountant replied that it was a matter between the Applicant and the Respondent.10

[16] On 5 March 2016, the Applicant’s wife and Mr Dilsher Singh returned to the restaurant. 11 Mr Ohana told Mr Dilsher Singh that “I will not pay, if you don’t leave the restaurant within 5 minutes I call police”.12

Protection from Unfair Dismissal

[17] Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Note: High income threshold indexed to $138,900.00 from 1 July 2016.”

[18] There is no dispute, and I am satisfied, the Applicant has completed the minimum employment period, and the sum of his annual rate of earnings is less than the high income threshold. 13 Consequently, I am satisfied the Applicant was protected from unfair dismissal.

[19] I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the Act.

Was the dismissal unfair?

[20] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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.”

[21] I am satisfied that the Respondent dismissed the Applicant from his employment on 2 March 2016 within the meaning of s.386(1)(a) of the Act.

[22] The Respondent did not appear or provide any evidence or submissions that it was a small business. I am not satisfied that the Respondent was a small business at the time of the Applicant’s dismissal.

[23] The Respondent did not appear or provide any evidence that the dismissal was a genuine redundancy. Regardless, I am satisfied that the Applicant’s dismissal was not a case of genuine redundancy within the meaning of s.389 of the Act.

Harsh, unjust or unreasonable

[24] Having been satisfied of each of s.385(a),(c)-(d) of the Act, I now must consider whether the Applicant’s dismissal was harsh, unjust or unreasonable. Section 387 of the Act sets out the criteria for considering whether a dismissal was harsh, unjust or unreasonable:

“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.”

[25] The type of conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained by the High Court of Australia in Byrne v Australian Airlines Ltd (1995) 185 CLR 410. McHugh and Gummow JJ explained as follows:

.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. 14

[26] I will now consider each of the matters set out in s.387 of the Act.

Valid Reason – s.387(a)

[27] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account 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). 15 When considering whether a reason is a valid reason for the purpose of s.387(a) of the Act, the reason must be “sound, defensible or well founded”.16 A reason which is “capricious, fanciful, spiteful or prejudiced” cannot be a valid reason.17

[28] The Commission will not stand in the shoes of the employer and determine what it would do if it was in the position of the employer. 18 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).19

[29] The Applicant submits that during the course of his employment he did not receive any warnings, written or oral, in relation to his conduct or performance. 20 I accept this evidence. Therefore, based on the materials before me and the Applicant’s evidence, I am not satisfied that there was a valid reason either related to capacity or conduct for the Applicant’s dismissal.

Notification of the valid reason - s.387(b)

[30] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account whether the person was notified of the reason.  21 Procedural fairness requires that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment. 22 The notification of the valid reason must be in explicit, plain and clear terms. 23

[31] As I have found no valid reason for the dismissal, I am satisfied that the Applicant was not notified of a valid reason for his dismissal.

Opportunity to respond - s.387(c)

[32] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person. 24 An employee must be notified of the reason for termination and must also be given an opportunity to respond to that reason before the decision to terminate is made.25 This process does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly.26 Where an employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of this section.27

[33] As I have found no valid reason for the dismissal, I am satisfied that the Applicant was not given an opportunity to respond to any reason relating to his capacity or conduct.

Unreasonable Refusal of a Support Person – s.387(d)

[34] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal. 28 With respect to this consideration, the Explanatory Memorandum states:

“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.” 29

[35] The Applicant did not request a support person. Therefore, I consider this to be a neutral consideration.

Warnings regarding unsatisfactory performance - s.387(e)

[36] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal. 30 Unsatisfactory performance is more likely to relate to the employee’s capacity to do the job, than to their conduct.31 The Commission must take into account whether there was a period of time between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period of time gives the employee the opportunity to understand their employment is at risk and to try and improve their performance.32

[37] The Applicant stated that at no time during his employment did he receive any warnings, either formally or informally, relating to his performance. 33 I accept the Applicant’s evidence in this regard. I consider this factor neutral.

Impact of the Size of the Respondent on Procedures Followed and Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(f) – (g)

[38] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.  34 Further, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account 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. 35

[39] There is no evidence that the size of the Respondent influenced the procedures followed in effecting the dismissal. The Respondent did not provide any evidence as to whether it had a dedicated human resources management specialist. I consider this factor neutral.

Other relevant matters - s.387(h)

[40] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any other matters that the Commission considers relevant. 36

[41] The Applicant was on a 457 visa. The withdrawal of his sponsorship creates much greater hardship than a dismissal in the ordinary course. Particularly, as the Applicant was one week short of being eligible to apply for his permanent residency. 37 The Applicant does not have access to the same social security benefits as other employees. The Applicant faces the risk of deportation if he fails to find another sponsor. A dismissal in these circumstances is particularly harsh.

Was the Applicant’s dismissal harsh, unjust or unreasonable?

[42] In the circumstances of this case, having taken into account the considerations of s.387(a)-(h) and having taken into account the matters set out above, I am satisfied that the Applicant’s dismissal was harsh, unjust and unreasonable pursuant to s.385(b) of the Act. Accordingly, I find the Applicant’s dismissal was unfair.

Remedy

[43] The object of Part 3-2 of the Act concerning unfair dismissal is set out in s.381 as follows:

“381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”

[44] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC 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) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

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

(b) the FWC 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.”

[45] I have already dealt with the issues at s.390(1)(a)–(b) above. Accordingly, I am required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied such an order is appropriate in all the circumstances.

Reinstatement

[46] The Applicant seeks compensation as the primary remedy. Regardless of the remedy sought by the Applicant, s.390 of the Act requires I first determine whether reinstatement is appropriate before I may consider an order for compensation.

[47] The Applicant submits reinstatement would be inappropriate because he is a 457 visa holder and can only work if he has approval. He has currently made an application for approval of a new employer and if he had to return to the Respondent this would complicate matters. The Applicant further submits that he no longer wishes to be a part of his former team. 38

[48] I accept that reinstatement is inappropriate in these circumstances.

Compensation

[49] Section 390(3)(b) provides I may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.

[50] I have found that the Applicant was unfairly dismissed by the Respondent and that reinstatement is not appropriate in all the circumstances. I am satisfied it is appropriate that an order for compensation be made.

[51] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered:

“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), the FWC 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 the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC 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.

Compensation cap

(5) The amount ordered by the FWC 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.

Note: subsection 392(5) indexed to $ 69,450.00from 1 July 2016

(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.”

[52] I will now consider each of the criteria in s.392 of the Act.

Remuneration that would have been received: s.392(2)(c)

[53] The Applicant’s remuneration with the Respondent was $55,000 per annum. 39

[54] I should now determine the period of time the Applicant would have remained employed by the Respondent, or would have likely remained employed with the Respondent, had they not been dismissed.

[55] The period of the Applicant’s 457 visa sponsorship was until 11 March 2018.

[56] I find that the Applicant would have continued to be employed by the Respondent for the period of his 457 visa sponsorship, until 11 March 2018, had he not been dismissed. There is no reason why the sale of the business would necessarily have affected his employment for this period. Having been accepted for the 457 visa it can be assumed that the Applicant was a qualified cook. The visa would not have been granted unless he was qualified in an area designated by the Government to be a skill shortage area. The business, regardless of ownership, would continue to need these skills if it continued to trade. The Applicant needed to remain with the Respondent in order to remain in Australia. The amount the Applicant would have received is therefore $111,480.77.

Remuneration earned: s.392(2)(e)

[57] The Applicant submits he has been trying to find new sponsorship since the dismissal. 40 The Applicant stated that he recently found someone who wishes to sponsor him and that the application is currently being processed by the Immigration Department.41 The Applicant stated that the application is currently a month and a half into what can be at least a three month process. The Applicant submits that whilst he was trying to find new sponsorship he was paid for a trial three times and that in total for this trial work he was paid approximately $105. I find the Applicant has earned $105 in remuneration for employment or other work during the period since the dismissal and deduct this amount from the compensation to be ordered.

Income likely to be earned: s.392(2)(f)

[58] The Applicant submits the earliest his new sponsorship arrangements would come into place would be approximately six weeks from 18 July 2016. On that basis, the earliest opportunity for him to earn any income would be sometime late August 2016, in which case, there is no income likely to be earned between the making of the order for compensation and the actual compensation.

Other matters: s.392(2)(g)

[59] There are no other matters that I consider appropriate to consider.

Viability: s.392(2)(a)

[60] There is no evidence that an order for compensation in the amount proposed will affect the viability of the Respondent’s enterprise.

Length of service: section (s.392(2)(b))

[61] I find that the Applicant’s period of service with the Respondent, being just short of two years, should not affect the amount of compensation to be ordered.

Mitigating efforts: s.392(2)(b)

[62] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether the Applicant acted reasonably in the circumstances. 42

[63] I consider the Applicant has made reasonable efforts to mitigate the loss he has suffered because of his dismissal by the Respondent

Misconduct: s.392(3)

[64] I have not found any misconduct by the Applicant that contributed to the dismissal.

Shock, Distress: s.392(4)

[65] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap: s.392(5)

[66] The amount of $111,375.77 far exceeds the maximum compensation amount under the legislation which in this case is six month’s pay or $27,500 less appropriate taxation.

Conclusion

[67] I am satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and a remedy of compensation is appropriate. I am satisfied an order for payment of compensation of $27,500 gross by the Respondent to the Applicant is appropriate in all the circumstances of the case.

[68] An order 43 giving effect to this decision will be issued with this decision.

COMMISSIONER

Appearances:

Mr G Singh, Applicant

Hearing details:

2016.

Melbourne

July 18

 1   Email correspondence from Fair Work Commission to Mr Shahaf Ohana, dated 11 July 2016.

 2   Exhibit A4; PN66

 3   Exhibit A1; Exhibit A4; PN70

 4   Exhibit A4; PN72

 5   Exhibit A4; PN74-75

 6   Exhibit A4; PN77

 7   Exhibit A4, attachment G; PN78

 8   Exhibit A4, attachment G; PN78

 9   Exhibit A4, attachment H; PN79

 10   Exhibit A4, attachment H; PN79

 11   Exhibit A4 & Exhibit A2; PN81

 12   Exhibit A2; PN82

 13   Exhibit A1 & Exhibit A4, attachment B

 14   Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 465 (McHugh and Gummow JJ)

 15   Fair Work Act 2009 (Cth) s. 387(a)

 16   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373

 17   Ibid

 18   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685

 19   Ibid

 20   PN83-84

 21   Fair Work Act 2009 (Cth) s. 387(b)

 22   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151; Gooch v Proware Pty Ltd T/A TSM (The Service Manager) [2012] FWA 10626

 23   Previsic v Australian Quarantine Inspection Services (unreported, AIRC, Holmes C, 6 October 1998) Print Q3730,

 24   Fair Work Act 2009 (Cth) s. 387(c)

 25   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151

 26   Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1, 14 citing Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7 (Wilcox CJ)

 27   Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1, 14-15 citing Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7 (Wilcox CJ)

 28   Fair Work Act 2009 (Cth) s.387(d)

 29   Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542]

 30   Fair Work Act 2009 (Cth) s.387(e)

 31   Annetta v Ansett Australia Ltd (2000) 98 IR 233, 237

 32   Johnston v Woodpile Investments T/A Hog’s Breath Caf� - Mindarie [2012] FWA 2, [58]

 33   PN83-84

 34   Fair Work Act 2009 (Cth) s.387(f)

 35   Fair Work Act 2009 (Cth) s.387(g)

 36   Fair Work Act 2009 (Cth) s.387(h)

 37   PN76

 38   PN88

 39   Exhibit A1

 40   PN90

 41   PN90

 42   Biviano v Suji Kim Collection PR915963 at [34].

 43   PR583639

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