[2016] FWC 5460
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Application for unfair dismissal remedy

Kevin Lee
v
Woodpend Pty Ltd (subject to a Deed of Company Arrangement)
(U2016/1108)

COMMISSIONER HAMPTON

SYDNEY, 14 SEPTEMBER 2016

Application for relief from unfair dismissal – site supervisor/manager – 457 visa worker – dismissal for alleged copying and provision of confidential information to another senior employee – whether salary details of other employee confidential – whether applicant supplied the material – findings based upon credit and weight of the evidence – misconduct found – whether valid reason for dismissal – whether refusal to await applicant’s return from sick leave was unfair – company subject to a deed of company arrangement – operations sold off – respondent no longer trading – whether dismissal harsh, unjust or unreasonable – applicant’s denial of role in providing information not accepted – some uncertainty about operation of confidentiality provisions – intent in supplying information contrary to company’s interests – significant mitigating circumstances – valid reason – no notice provided – misconduct found but falling short of serious misconduct – dismissal harsh – remedy – unpaid sick leave – workers’ compensation payments subsequently made for relevant period – no relevant loss of remuneration in any event – compensation not appropriate.

1. Introduction and case outline

[1] Mr Kevin Lee has made an application under s.394 of the Fair Work Act 2009 (the FW Act) seeking a remedy for an alleged unfair dismissal. Mr Lee contends that his dismissal by Woodpend Pty Ltd (Woodpend), which is now subject to a Deed of Company Arrangement under the Corporations Act 2001 (Cth), was unfair on both substantive and procedural grounds.

[2] Mr Lee was employed as part of an overseas visa arrangement and undertook site supervisory and/or management roles for Woodpend between August 2013 and early March 2016. During that period he worked predominantly on a major construction project within the Adelaide CBD. There is a dispute between the parties as to the correct job title and Mr Lee also disputed his salary during the period of his employment. This forms an important part of the context for the dismissal.

[3] Mr Lee was dismissed on the basis of alleged serious misconduct arising from what Woodpend contends was the copying of a confidential document; being a photo of the front page of an employment contract between itself and a senior employee (MP), who ultimately occupied a similar role to that of Mr Lee. The front page contained the personal details of MP, his wage, and the majority of his other remuneration benefits. Further, it is alleged by Woodpend that this document was also supplied by Mr Lee to another senior employee, Mr Lillingston, with a view to creating difficulties between that employee and the company.

[4] Woodpend further contends that the alleged conduct was in breach of both express and implied duties and represented a valid reason for dismissal.

[5] Mr Lee admits that he took a photo of the front page of the contract but denies that he sent it to Mr Lillingston. He also contends that he was, in effect, denied an opportunity to defend his position given that Woodpend would not await his return to work from sick leave before making and implementing the dismissal decision.

[6] After his dismissal, and before the hearing in this matter, Mr Lee was forced to return to the United Kingdom (UK). In these circumstances, and with the constructive assistance of both parties, the hearing was conducted in Adelaide with a telephone link to the UK at a time that allowed all parties and witnesses a reasonable opportunity to participate.

[7] Given that Woodpend is now subject to a Deed of Company Arrangement, the appointed Administrator (two officers of Ferrier Hodgson), provided instructions to Mr Earls, who appeared with permission 1 for the respondent. The Administrator was appointed in mid-April 2016. Woodpend is no longer trading and its operational business was sold to an unrelated company as part of the deed arrangements. Some, but not all, of the employees of Woodpend were offered employment with the new company.

2. The evidence before the Commission

[8] Mr Lee provided a witness statement and numerous documents going to his dispute with Woodpend about his salary and related conditions and the events leading to his dismissal. Mr Lee also gave sworn evidence and was cross-examined.

[9] Woodpend relied upon written and oral evidence from the following persons who are all former senior employees of Woodpend:

[10] Mr Lillingston was subject to an order to attend the proceedings and has no present connection with Woodpend or the company which purchased its operations. The evidence of each of these witnesses was challenged by Mr Lee during the course of the hearing in this matter.

[11] The evidence before the Commission also included screenshots and photos of a mobile phone used by Mr Lee (or at least a phone with his simcard) and a mobile phone belonging to Mr Lillingston, and a copy of the photo of the contract that Mr Lee accepts was taken by him. In the case of Mr Lillingston’s phone, this was also shown to me during the hearing and its contents were faithfully described to Mr Lee by reference to a document already in the evidence of the Commission.

[12] There are some conflicts between the evidence of Mr Lee and each of the witnesses called by Woodpend. Many of these go to the dispute about the proper title of, and fair remuneration for, Mr Lee’s position and much of this does not need to be resolved given the nature of the present proceedings. There are also many disputes about what would have been a reasonable approach to certain issues and developments which took place in the lead up to the dismissal. These are largely matters for the Commission itself to determine.

[13] However, there are also some directly relevant factual disputes between the parties and these predominately involve the central allegations concerning Mr Lee’s conduct in relation to the photo of the contract document. I have resolved these based upon the weight, consistency and plausibility of the evidence as a whole. That basis included my reservations about Mr Lee’s version of events regarding whether a copy of the contract document was sent from a mobile phone he used and his role in that regard.

3. The broader context and the events leading to the dismissal

[14] Woodpend was a relatively small hardware supply business that manufactured and fitted doors. It had a ‘Projects Division’ that specialised in providing on-site services for large scale projects.

[15] Woodpend was awarded the contract for the new Royal Adelaide Hospital (NRAH) project in 2013 and as such was looking for a person experienced in hospital work involving prefinished doors. This resulted in Mr Lee being employed by Woodpend, ostensibly as Site Supervisor/Manager, under a 457 Visa arrangement from mid-August 2013.

[16] Mr Lee’s evidence was that he had three different employment contracts issued to him prior to commencing his employment – as Site Supervisor, Site Supervisor/Carpenter and Project Site Supervisor. His evidence was also that in February 2013, Woodpend sent a letter to the Australian Department of Immigration and Border Protection, to the effect that it intended that Mr Lee would take on the role of Project Manager upon the retirement of the then Project Manager.

[17] Woodpend’s evidence was that Mr Lee was originally employed as a carpenter before being promoted to Project Site Supervisor upon commencing his employment. 2 In any event, it is common ground that the contract for the role of Project Site Supervisor, signed by Mr Lee on 20 August 2013 (the 2013 contract), is the contract that ostensibly governed Mr Lee’s employment.3

[18] Mr Lee contends that on 7 October 2013, he was briefly promoted to Project Manager before being informed that the role would be undertaken by Mr Marcus Cardone. He further contends that he was advised by Woodpend, that he would continue in the role of Site Manager at the NRAH project and after six months would be promoted, to Project Manager, alongside Mr Cardone.

[19] Mr Lee’s evidence was that he raised the issue of his contract, and his correct salary and title, with Woodpend throughout 2014 and 2015 but that these issues were not addressed.

[20] It is clear from the evidence before the Commission that Mr Lee was very concerned with the titles and relative salaries and wages that were paid by Woodpend to its employees. These concerns eventually led Mr Lee to send an email, on 4 December 2015, through a NRAH project wide communication system (including 59 non-Woodpend employees) requesting that the company confirm its understanding of the nature of his position as being a Project Manager or Site Manager.

[21] It is also evident that Woodpend was a relatively informal business that used titles in a very unstructured and loose fashion. Mr Cardone’s evidence was that “although people were given titles such as “site manager” or “project manager”, these roles did not necessarily align with the duties that other construction companies might assign to those roles.” 4

[22] I note that Woodpend was contacted in October 2015 by a Fair Work Building and Construction (FWBC) Officer who advised Woodpend that he was collecting information relevant to the sponsorship obligations under the 457 Visa Program, under which Mr Lee was employed. The requested information related to Mr Lee’s employment with Woodpend including which projects he was working on, the work undertaken and the salary paid. In response, Woodpend advised the FWCB that Mr Lee “was initially hired as a project manager but has since then been promoted to Site Manger.” 5 Mr Lee contends that this supports his position with respect to actual title and position.

[23] Mr Lee’s evidence was that he was advised by the FWBC Officer, that it appeared Woodpend were paying him $7.00 an hour less than “his counterpart”. In that regard, I note that the relative salary paid to Mr Lee was the subject of enquiries by the Officer 6 and this also sets some of the context for the major issues to be determined in this matter.

[24] Woodpend’s evidence is that on 2 November 2015, Mr Lee attended a meeting with Ms Anna Finelli and Mr Cardone to discuss the prospect of Mr Lee changing projects. It contends that at this meeting Mr Lee appeared “jealous” saying that “Marcus has been promoted 5 times in 2 years”. 7 I am also satisfied that Mr Lee raised concerns about what he understood to be the relatively high salary rate paid to MP.

[25] The 2013 contract contained a clause on confidential information that stated:

[26] For the purposes of the contract, Confidential Information was defined as meaning:

[27] Woodpend also had a separate Confidentiality Policy which contained a definition of “confidential information” that was broadly compatible with the 2013 contract. In particular, the definition stated:

[28] The policy further stated that the employee:

[29] Mr Lee contends that as he did not sign for receipt of the confidentiality policy, Woodpend could not prove that he was aware of the policy and could not rely upon it. However, the evidence is that all new employees, including Mr Lee, were provided with a folder of policies and that as a Manager, Mr Lee had immediate access to all relevant policies during his employment.

[30] Woodpend’s Discipline and Termination of Employment Policy 12 committed Woodpend to ensuring employees were treated fairly and equitably. In particular it noted that:

[31] The procedure outlined in this policy provides that a disciplinary interview will be conducted in the first instance to provide an opportunity for the employer and employee to discuss the issue. The employee will have the right to bring a support person with them to any disciplinary meeting and will also have the right to respond to the allegations. The procedure also states that any warnings will be verbal, written and witnessed and that set out:

[32] The various versions of Mr Lee’s contract and position descriptions all refer to the need to be familiar with Woodpend’s policies and procedures and the management manual. I am satisfied that these policies formed part of the management manual. Further, and in any event, clause 7 of the 2013 contract provides as follows:

[33] On 2 September 2015, Mr Cardone sent a letter to Mr Lee regarding issues that had been raised with him by staff on the NRAH site, in relation to Mr Lee. 14 Those issues included suggestions of:

[34] Mr Lee wrote a letter dated 10 September 2016, of some five pages, in response. The content of the letter went largely to a:

[35] Whilst I would accept that the receipt of a letter raising potential performance issues may be confronting, the tone of Mr Cardone’s letter to Mr Lee was very constructive and raised the various issues in a manner that made it clear that Mr Lee was a valued employee and that the basis of the various issues should be discussed between them. Mr Lee’s response was disproportionate and confrontational and was perhaps a reflection of his state of mind at that time.

[36] There was also some tension between Mr Lee and MP. This arose, at least in part, from Mr Lee’s view that he was more highly qualified and had more experience than MP. The fact that MP was being paid at a rate that Mr Lee considered was higher than his own, in the context of a lack of clarity about job roles, also contributed to some resentment by Mr Lee.

[37] During November 2015, Mr Lee again raised concerns with Woodpend management about his salary and job position and there was no clarification or resolution as far as Mr Lee was concerned.

[38] On 9 November 2015, Woodpend moved Mr Lee from the NRAH project to a position as Small Works Site Manager. This arose in part from concerns held by senior management however it was substantially the result of moves to have senior management take a more hands-on role with that project and a change away from major construction work more generally. The same remuneration and conditions apparently applied to the new role.

[39] In mid-November 2015, Mr Lee consulted a medical practitioner about the distress that he was experiencing. Mr Lee ultimately provided “WorkCover” Medical Certificates for the period 16 November 2015 to 30 March 2016. These stated that Mr Lee was suffering from anxiety and depression related to “difficulties with job description alteration at work with new contract”. 15

[40] During December 2015, Woodpend sought from Mr Lee the return of the company keys, laptop, ID card and car. Mr Lee declined to return these items on the basis that he remained an employee who had signed for the keys and ID card and that the laptop and car were part of his remuneration package. Mr Lee also considered that this action was a forerunner of attempts to dismiss him. The evidence about the terms attaching to the laptop and car was limited at best. Based upon that material, Mr Lee was justified in not returning those items as they were part of his remuneration package.

[41] I will return to my findings on the detail of the key matters in dispute shortly. It is, however, presently sufficient to note that it is common ground that Mr Lee took a photo of the front page of MP’s contract in early May 2015 and that this was the subject of a discussion between Mr Lee and Mr Lillingston at that time. Mr Lillingston also received a copy of the photo by text message and he alleges that this was sent by Mr Lee. The latter part of that allegation is in dispute.

[42] Mr Lillingston did not report the receipt of the text message (photo) to management until later in 2015. His evidence was that he was on a period of long service and other leave between July and November and that he was concerned about Mr Lee’s reaction should the report be made when they were both at work. By mid-November Mr Lillingston had returned from long service leave and Mr Lee was absent from the workplace on sick leave/workers’ compensation. I accept Mr Lillingston’s evidence on these matters.

[43] A meeting was held on 27 January 2016 between Ms Lisa Williams (HR Officer), Mr Cardone and Mr Lillingston during which Mr Lillingston produced the text message allegedly sent to him by Mr Lee.

[44] On 10 February 2016, a letter was sent to Mr Lee, by Woodpend, alleging that Mr Lee:

[45] The letter further stated that the allegations, if found to be true, could result in the termination of Mr Lee’s employment. It directed Mr Lee to attend a meeting at the Woodpend offices but also indicated that as he was currently on “sick leave”, he could respond to the allegations in writing.

[46] Mr Lee consulted with a legal resource and provided a written response to Woodpend on 29 February 2016. Mr Lee’s correspondence centred on the following:

[47] On 1 March 2016, Woodpend attempted to contact Mr Lee further by telephone and, in a text message sent to him, advised that as his response did not comply with the request for written responses to the allegations, he was further directed to attend a meeting at Woodpend that day.

[48] Mr Lee did not attend the scheduled meeting as requested and Woodpend made a decision at that time to terminate his employment.

[49] A letter, dated 1 March 2016 (the termination letter), was sent to Mr Lee advising him that:

[50] The termination letter, which was sent by express post, was apparently refused at delivery by Mr Lee.

4. Mr Lee’s actions in relation to the photo of the contract document

[51] The central factual disputes in this matter surround Mr Lee’s actions in relation to the photo of the contract document. It is not disputed that on 4 or 5 May 2015, Mr Lee came across a folder containing a number of management contracts including that belonging to MP, and that he took a photo of the first page on a (non-work supplied) mobile phone he was using at the time. It is also not in dispute that shortly thereafter Mr Lee spoke to Mr Lillingston about the fact that he had the photo and that he informed Mr Lillingston that he was intending to use the information in relation to concerns that he (Mr Lee) had about his own salary. Mr Lillingston’s evidence was that Mr Lee told him to “keep it quiet”.

[52] Mr Lillingston’s evidence was that shortly after that conversation, he received a text message from Mr Lee that consisted of a picture of the first page of MP’s employment contract, which included the hourly rate and other benefits that would be paid to him.

[53] Mr Lee accepts that he spoke to Mr Lillingston but denies that he sent the photo to him at any time.

[54] The evidence is also clear that information about management salaries was not generally disclosed to other managers and Mr Lee was not expected to, and did not, play any role in the setting of salaries and conditions for other senior employees including those who were working on a site that he was supervising or managing on behalf of Woodpend.

[55] What is in dispute is whether Mr Lee promised a copy of the photo to Mr Lillingston and whether he subsequently sent him that copy. There is also some controversy about whether, if this was done, this was undertaken for an improper purpose, represented a breach of Mr Lee’s obligations, and amounted to serious misconduct.

[56] It is clear from the evidence that Mr Lee took a photo of the contract to use as part of his dispute with Woodpend about his salary. That is, Mr Lee considered that the “salary” or wage of MP was significantly higher that his own and that MP was a less experienced employee. Mr Lee intended to use the confirmation of MP’s remuneration to support a review of his own remuneration.

[57] The weight of evidence is also that a photo of the contract was sent from a phone used by Mr Lee to Mr Lillingston’s phone. Having regard to all of the oral and physical evidence I am satisfied that the photo sent to Mr Lillingston is the same photo taken by Mr Lee. The cropped version of the photo as later stored on Mr Lee’s phone resembles the photo sent to Mr Lillingston including the waves and shadows present – albeit that the cropped photo has the margins lined up with the edge of the page and excludes the image of the other pages from the folder in the background. I would also note that even if the photo received by Mr Lillingston was a different photo of the contract, its source (Mr Lee’s personal phone) is clear given all of the evidence before the Commission.

[58] The remaining question is whether Mr Lee was responsible for sending that photo. I have considered Mr Lee’s suggestion that someone else may have used his phone to send the photo without his knowledge. I am prepared to accept that Mr Lee may have at times left his (work and) private phone unattended on his desk and that it was not password protected. However, given the circumstances, his suggestion would have necessarily involved someone, soon after the photo was taken, being aware that Mr Lee had done so and that Mr Lillingston may also be interested in having a copy of the photo. That person must also have accessed the phone within the window of time after they were aware of the photo, whilst the phone was unattended, sent the photo to Mr Lillingston and then removed the copy of the text message from the phone without disturbing the chain of text messages between Mr Lee and Mr Lillingston. The evidence is that only Mr Lee and Mr Lillingston were aware of the existence of the photo at the relevant time.

[59] Mr Lillingston rejected any notion that he had any role in sending the photo to himself and I accept his evidence on that point and more generally. He has no reason now to deny his involvement and his evidence about these events was plausible, consistent and convincing.

[60] On the balance of probabilities, I find that Mr Lee informed Mr Lillingston on 4 or 5 May 2015 that he had a copy of the front page of MP’s contract, which disclosed MP’s wage and other benefits, and that he would send it to him. I further find that Mr Lee then did so from his mobile phone.

[61] I am also satisfied that Mr Lee advised Mr Lillingston that he also had a legitimate grievance with the company about his salary and intended that Mr Lillingston would, in due course, also use the information in support of any issues Mr Lillingston sought to raise with Woodpend in that context.

5. Was Mr Lee’s dismissal unfair within the meaning of the FW Act?

[62] Section 385 of the FW Act provides as follows:

[63] Mr Lee was dismissed, the employer is not a small business within the meaning of the FW Act, and the concept of a genuine redundancy is not relevant here.

[64] On that basis, the dismissal will be unfair if it is found to be harsh, unjust or unreasonable.

[65] The FW Act relevantly provides as follows:

[66] It is clear that s.387 of the FW Act contemplates an overall assessment as to the nature of the dismissal being made by the Commission. In so doing, the FW Act sets out a number of considerations that must, where relevant, be treated as a matter of significance in the decision making process and be weighed up accordingly.

[67] It is convenient therefore to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.

Section 387(a) – whether there was a valid reason for the dismissal related to Mr Lee’s capacity or conduct (including its effect on the safety and welfare of other employees)

[68] Valid in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly.17

[69] The failure to follow a lawful instruction which was reasonable in the circumstances may provide an employer with a valid reason to terminate an employee’s employment.18 It is however, clear from the authorities that the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts before the Commission. That is, it is not enough for an employer to rely upon its reasonable belief that the termination was for a valid reason.19 Equally, facts justifying dismissal, which existed at the time of the termination, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.20

[70] Further, it has been held that the failure to comply with an unreasonable direction does not provide a valid reason for the termination of a person’s employment. In Izdes v L.G. Bennett & Co Pty Ltd t/as Alba Industries21 Beazley J also stated:

[71] In Woolworths Limited (t/as Safeway) v Cameron Brown23 a Full Bench of the AIRC, after considering the principles in Selvachandran v Peteron Plastics Pty Ltd and the approach of the AIRC in Atfield v Jupiters Limited t/a Conrad Jupiters Gold Coast,24 considered when a failure to abide by a policy of an employer would amount to a valid reason for termination of employment and when it would not:

[72] In Kolodjashnij v Lion Nathan T/A J Boag and Son Brewing Pty Ltd,26 Deegan C determined that:

[73] The confidentiality policy established by Woodpend is relevant to Mr Lee’s obligations as an employee. The contract itself also contained a further provision dealing with the issue.

[74] In general terms, the confidentiality term of Mr Lee’s contract and the confidentiality policy of the nature evident here are reasonable provisions when applied to someone in Mr Lee’s position. It would also be reasonably apparent that if the photo was confidential information, it was being supplied to Mr Lillingston for purposes that were not for the benefit of the business.

[75] The issue is whether the photo of MP’s employment contract properly meets the definition of a document that is “confidential”. The definition of confidential information in the 2013 contract is exceptionally wide. Read literally, it would include all information gained through his employment, other than that which is properly in the public domain. The intended scope of the provision is, however, informed by the nature of the information illustrated within the definition itself. The confidentiality policy has a clearer definition and is imported into the contract by virtue of clause 7. That clause also reinforces that a breach of policy may lead to disciplinary action, up to and including dismissal.

[76] On that basis, it is reasonable to approach this matter on the basis that information may be confidential for present purposes if it falls within the nature of information referred to in the employment contract and/or it is the sort of information that Mr Lee knew, or ought to have reasonably known, was confidential.

[77] In the normal course, information about salaries for those on a work site would be readily accessible by a Site Manager and perhaps a Site Supervisor, at least in relation to those employees that a supervisor was responsible for. However, in the case of Woodpend, that information was not given to Mr Lee and he played no role in salary or wage setting for employees such as MP. He was also not privy to the salary arrangements for Mr Lillingston albeit that the relative salaries of the supervisors was a matter which arose from the involvement of the FWBC. It is also apparent that Woodpend did not take significant measures to protect the information. The salary information of MP may, in that context, be considered to be confidential information for the purposes of the contractual obligations. However, the salary information was not expressly categorised as being confidential and its status would not necessarily have been clear to Mr Lee.

[78] Given Mr Lee’s conduct in relation to the photo, it is objectively apparent that he knew that the information was both sensitive and not the kind of material that was intended to be provided to him. The photo was taken on his personal phone, he did not disclose until much later that he had accessed that information, and his dealings with Mr Lillingston would suggest that he recognised that the material was at least sensitive in nature.

[79] Further, and in any event, it is objectively apparent that Mr Lee provided the information to Mr Lillingston for purposes that were not in the best interests of the company.

[80] I would observe that if the photo was used only for the purposes of his own discussions with management, this may not have been a breach of his obligations. Further, in all of the circumstances, I would not have considered that this represented a valid reason for dismissal. This occurred in the context of uncertainty about his role, title and salary and given how these issues were handled by Woodpend, his concerns in that regard were not without substance. The information about MP’s salary package was relevant and its use as part of discussions with senior management would not have been a serious breach. I also note that this also took place in the context of the 457 visa arrangements and issues about appropriate rates of pay were relevant in that context.

[81] However, Mr Lee provided the photo of the contract to Mr Lillingston for different purposes. That is, he intended that Mr Lillingston be aware of that information and use it against Woodpend. On balance, the provision of the photo to Mr Lillingston in the manner, and for the purpose that it was done, constitutes a valid reason for dismissal. The general context for that action, and the uncertainty about the operation of the confidentiality provisions in terms of the photo are, however, matters that should be considered more generally.

Section 387(b) – whether Mr Lee was notified of the reasons for dismissal

[82] This consideration requires the Commission to assess whether the applicant concerned was relevantly notified of the reasons leading to the dismissal before that decision was taken. 28

[83] The evident purpose of this consideration is that notification of the valid reason to terminate must be given to the employee before the decision to terminate the employee is made and the notification needs to be in explicit and plain and clear terms.

[84] The letter provided to Mr Lee on 10 February 2016 sets out the reasons for dismissal.

Section 387(c) – whether Mr Lee was given an opportunity to respond to any reason related to his capacity or conduct

[85] The relevant reasons are those arising from the valid reasons found by the Commission. This consideration is therefore directly related to the above discussion.

[86] This process contemplated by the FW Act does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly. The question becomes whether Mr Lee was aware of the nature of the employer’s concern about his conduct and had a full opportunity to respond to these concerns. 29

[87] The fundamental issue here is whether the process adopted by Woodpend provided a genuine opportunity for Mr Lee to respond to the allegations. Mr Lee’s absence from work on sick leave/workers’ compensation is an important consideration in that regard.

[88] An insistence on a meeting would have been unreasonable. However, Woodpend explicitly provided an opportunity for Mr Lee to provide written comments. In some cases, this would not be sufficient. That is, where the nature of an employee’s illness or other circumstances were such that they could not reasonably provide a response in writing, it would be appropriate to await a time when they could do so, or could actually attend a meeting.

[89] Although Mr Lee contended that there was an agreement between himself and Woodpend that there would be no direct contact between the parties, this was denied by the employer and would appear to be related to a mediation proposal associated with his workers’ compensation claim rather to any agreement of that kind.

[90] I do note that when Mr Lee failed to engage with the allegations, he was then directed, by text message on 1 March 2016, to attend a meeting at the Woodpend offices. Mr Lee should have been advised, in either the letter of 16 February 2016 or the text message, that in the absence of a response to the allegations, Woodpend would still make a determination on the matter. Mr Lee was not so advised.

[91] In this case, Mr Lee was able to take legal advice about his response to the allegations, and following his dismissal, he was readily able to put together the comprehensive application that had led to this matter. Whilst I am not without reservations, in these particular circumstances, I find that a reasonable opportunity to respond to the (valid) reason was provided to Mr Lee.

Section 387(d) – any unreasonable refusal by the respondent to allow Mr Lee a support person

[92] The letter of 16 February 2016, to Mr Lee, provided that he may bring a support person, of his choosing, to the disciplinary meeting. In any event, there was ultimately no meeting conducted by Woodpend in relation to the issue and there was no request for a support person made that gives rise to this consideration.

Section 387(e) – if the dismissal is related to unsatisfactory performance by Mr Lee – whether he has been warned about that unsatisfactory performance before the dismissal.

[93] This consideration relates to performance of the job. Performance in this context includes the employee’s capacity to do the work, and the diligence and care taken with that work. 30

[94] During the course of the proceedings, various issues about Mr Lee’s performance were raised on behalf of Woodpend as part of the respondent’s case. I understand that these issues are relied upon as part of the context of the matter (and potentially in terms of remedy) and not expressly as providing a valid reason for dismissal. Accordingly, this consideration does not arise in this matter.

Section 387(f) – the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.

Section 387(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.

[95] Woodpend was not a large business but it did have a Human Resources Officer. The size and nature of the operation did impact upon how it conducted its business, including in relation to how it dealt with Mr Lee’s concerns about his position and salary. I have taken these circumstances into account.

Section 387(h) - other matters considered to be relevant

[96] Amongst other considerations, the Commission should consider the impact of the dismissal upon the applicant given all of the circumstances. This includes consideration as to whether the dismissal was harsh in the sense that it was disproportionate to the actual conduct found by the Commission. 31

[97] A dismissal may, depending upon the overall circumstances, be considered to be harsh on the applicant employee due to the economic and personal consequences resulting from being dismissed. 32 Mr Lee lost his employment which he had held since August 2013. In his case, this also meant that unless he could secure other work within his visa restrictions, Mr Lee was required to leave Australia. He was not successful in that regard and this eventuality occurred.

[98] As alluded to earlier, there were some issues with Mr Lee’s performance at the NRAH site and this may have contributed, in part, to his transfer to another role. However, he was not disciplined about those matters and there were no formal performance warnings.

[99] Mr Lee was a senior employee and his conduct is potentially more serious in that context. However, he provided the information to another senior employee and not otherwise. It occurred in the context of some legitimate concerns about his position and pay and his action had little direct consequences. He did not, at least prior to his dismissal, actually deny that he had provided the photo. At the point of his dismissal, there would have been some diminution of the trust and confidence held by senior management because of the apparent purpose behind the supply of the photo to Mr Lillingston. There are also relevant mitigating circumstances concerning the dispute about Mr Lee’s position and salary and the relative salaries of the supervisors had a broader context given the 457 visa arrangements.

[100] I have also considered the fact that Woodpend did not provide any notice, or pay in lieu of notice, to Mr Lee. The notice of termination of employment provisions in s.117 of the FW Act, which also permit payment in lieu of notice of termination, would in accordance with s.123(1)(b) of the FW Act not apply if the conduct of the applicant could be described as being “serious misconduct”. This term is defined by Regulation 1.07 in the following terms:

[101] I do not consider that at the point of the dismissal, the conduct of Mr Lee as known by Woodpend warranted dismissal without notice. In that regard I note that Mr Lee was at the time on unpaid sick leave with a (disputed) workers’ compensation claim pending. As a result, if notice was provided, this would have meant that the date of effect of the dismissal would have been delayed, but there would have been no additional payments. In that regard, I note Mr Lee’s workers’ compensation claim and the potential for any payments in that regard to cover a period of any notice. I will return to this aspect shortly in light of a more recent development.

[102] I have also considered Mr Lee’s denial that he sent the photo to Mr Lillingston, which I have not accepted. In the normal course, if that denial was communicated to Woodpend as part of any investigation of the circumstances, this would also have been relevant to the assessment of the fairness of the dismissal. However, this did not happen in this case and as a result, the denial itself is not presently relevant in its own right given that this does not represent an event that took place prior to the dismissal. However, it may be relevant to other considerations that arise in an application of this nature.

Conclusion on nature of dismissal

[103] I have weighed all of the factors and circumstances of this application.

[104] In Parmalat Food Products Pty Ltd v Mr Kasian Wililo,33 the Full Bench observed:

[105] I have found, on balance, a valid reason for dismissal but that Mr Lee’s conduct fell short of being serious misconduct at that point.

[106] In determining matters in this jurisdiction, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in that position. 34
The Commission is also directed to ensure a “fair go all round”. This is reinforced by the objects of this Part of the FW Act in s.381 including ss.(2) which provides as follows:

[107] On balance, having regard to the provisions of s.387 of the FW Act as applied in this case, I am persuaded that Mr Lee’s dismissal was harsh. The dismissal was therefore unfair within the meaning of the FW Act.

6. Remedy

[108] Division 4 of Part 3-2 of the FW Act relevantly provides as follows:

393 Monetary orders may be in instalments

[109] The prerequisites of ss.390(1) and (2) have been met in this case.

[110] Section 390 makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. Mr Lee does not seek reinstatement and given all of the prevailing circumstances and my findings I accept that reinstatement would be inappropriate.

[111] As a result, I need to consider whether compensation is appropriate, and if so, to what extent.

[112] In McCulloch v Calvary Health Care Adelaide36 (McCulloch) the Full Bench confirmed that, in general terms, the approach to the assessment of compensation as undertaken in cases such as Sprigg37 remains appropriate in that regard.

[113] Section 392(2) of the FW Act requires me to take into account all of the circumstances of the case including the factors that are listed in paragraphs (a) to (g). Without detracting from the overall assessment required by the FW Act,38 it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.

Section 392(2)(a) – the effect of the order on the viability of Woodpend

[114] Woodpend is already subject to a Deed of Company Arrangement and is no longer trading. Accordingly, whilst that circumstance is a consideration in its own right, the level of any compensation that I would otherwise determine in this matter will not have any impact upon the viability of the employer.

Section 392(2)(b) – the length of Mr Lee’s service with Woodpend

[115] Mr Lee was employed for approximately two and half years.

[116] This is not a significant length of service and is to be taken into account in determining whether compensation should be awarded and if so, to what extent.

Section 392(2)(c) – the remuneration Mr Lee would have received, or would have been likely to receive, if he had not been dismissed

[117] This involves, in part, a consideration of the likely duration of Mr Lee’s employment in the absence of what I have found to be an unfair dismissal.

[118] The Full Bench in McCulloch also confirmed that when assessing likely lost remuneration, cogent evidence is required for any assumption that a short period of likely future employment would have occurred where the Commission had not found a valid reason for dismissal.39

[119] In this case, I have found a valid reason for dismissal. The employment relationship was on foot in the order of 30 months and there were some tensions and issues that arose between the parties. This was not a particularly stable employment relationship and there was a fundamentally different approach to some matters including Mr Lee’s desire for more structure and formality than was Woodpend’s manner.

[120] The operational business of Woodpend was sold in mid-April 2016 to an unrelated company. Woodpend as a legal identity remains, subject to the Deed of Company Arrangement. If Mr Lee had not been dismissed and had remained in employment until the time of the sale, he would not have been entitled to any remuneration in that period due to his absence on unpaid leave. It is at least conceivable that he may have become entitled to a redundancy payment of 6 weeks upon the cessation of the business. 40 However, this is somewhat problematic as it would not be safe to assume that Mr Lee would have been made redundant given that he may have been retained in employment by the Administrators of Woodpend pending the resolution of his workers’ compensation claim. He may also have been “detached” from Penrice as part of that process without being made redundant.41 Alternatively, if Mr Lee was made redundant, any payments made in that regard would have been taken into account as part of his workers’ compensation payments which ultimately covered a whole period beyond any notice and severance entitlements.

[121] Further, if Mr Lee had provided the same response to the allegations as advanced in this matter, namely that he did not supply the photo, Woodpend would have properly concluded that he had misled them and this, combined with the actual conduct, would have provided sound justification for dismissal. That is, if Mr Lee had been expressly advised that a decision would be made in the absence of a response to the allegations, or his employment had continued for a short period without the dismissal taking place when it did, it is likely that he would have made a response as speculated above.

[122] In all of the rather unique circumstances evident in this matter, it is reasonable to assess the compensation on the basis that the applicant would, on the balance of probabilities, not have remained in employment until mid-April 2016 and/or become entitled to a separate redundancy payment.

[123] Accordingly, there is no relevant projected remuneration loss in this case.

Section 392(2)(d) – the efforts of Mr Lee to mitigate the loss suffered by him because of the dismissal

[124] Mr Lee was forced to return to the United Kingdom and has in any event been unfit for work since his dismissal. There would be no discount from any amount based upon this consideration.

Section 392(2)(e) – the amount of any remuneration earned by Mr Lee from employment or other work during the period between the dismissal and the making of the order for compensation

Section 392(2)(f) – the amount of any income reasonably likely to be so earned by Mr Lee during the period between the making of the order for compensation and the actual compensation

[125] Mr Lee has not received, and is unlikely to receive, any remuneration from employment in the relevant periods.

[126] Subsequent to the hearing in this matter, the Commission has been advised that a resolution of Mr Lee’s workers’ compensation claim has occurred. This included the acceptance of Mr Lee’s claim for a closed period from 16 November 2015 to 7 September 2016, plus interest. Whether this payment be treated as being remuneration from employment under s.392(2)(e) or (f), or a matter relevant under s.392(2)(g) of the Act, it is a relevant consideration. What this means is that despite my finding that the dismissal was unfair, and the potential for him (in the absence of the dismissal) to have remained in employment for a short period, Mr Lee has not suffered any relevant remuneration loss from his dismissal, at least within the contemplation of s.392(2) of the FW Act.

Section 392(2)(g) – any other matter that the FWC considers relevant and the remaining statutory parameters

[127] There is some demonstrated misconduct that in other circumstances would need to be taken into account as provided by s.392(3) of the FW Act.

[128] In accordance with s.392(4) of the FW Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal. In that regard, I note that compensation of his nature is a matter more relevant to Mr Lee’s workers’ compensation claim.

[129] If, contrary to the above findings, I was otherwise to contemplate compensation in this matter, I would need to consider the implications of the fact that I have not accepted Mr Lee’s denial of his role in forwarding the photo to Mr Lillingston. This is a factor that would militate against an order for compensation being made.

[130] My ultimate decision in this matter arises from the particular and rather unique circumstances of this case and the Commission’s statutory charter.42

Conclusions on remedy

[131] After taking into account each of the relevant considerations, I am not persuaded that compensation is appropriate in this matter.

7. Conclusions and orders

[132] I find that Mr Lee’s dismissal was unfair within the meaning of the FW Act.

[133] I am satisfied that reinstatement of Mr Lee is inappropriate and I do not consider that an order for payment of compensation in lieu of reinstatement is appropriate in all the circumstances of the case.

[134] Accordingly, there will be no order granting a remedy in this matter.


COMMISSIONER

Appearances:

K Lee, the applicant on his own behalf.

T Earls of Fair Work Lawyers, with permission, on behalf of Woodpend Pty Ltd.

Hearing details:

2016

Adelaide, with telephone link to the United Kingdom

August 2, 3.

Final written submissions:

2016

September 7, 12.

 1   Under s.596 of the Act – Mr Lee did not oppose permission being granted.

 2   Statement of Mr Cardone – Exhibit R6 at par 7-8.

 3   Exhibit R2.

 4   Statement of Mr Cardone – Exhibit R6 at par 5.

 5   Attachment K to the Statement of Mr Lee – Exhibit A1.

 6   Ibid.

 7   Attachment AF1 to the Statement of Ms Finelli – Exhibit R5.

 8   Exhibit R2 at clause 17.

 9   Exhibit R2 at clause 1.

 10   Attachment J to the Statement of Mr Lee – Exhibit A1.

 11   Ibid.

 12   Attachment I to the Statement of Mr Lee – Exhibit A1.

 13   Exhibit R2 at clause 7.

 14   Attachment E to Statement of Mr Lee – Exhibit A1.

 15   Attachment X to Statement of Mr Lee – Exhibit A1.

 16   Attachment AF10 to Statement of Ms Finelli – Exhibit R5.

17 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation (2004) 133 IR 458 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, at [36].

18 Cox v South Australian Meat Corporation [1995] IRCA 287 (13 June 1995) per von Doussa J.

19 See Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; King v Freshmore (Vic) Pty Ltd AIRCFB Print S4213 per Ross VP, Williams SDP, Hingley C, 17 March 2000; Edwards v Giudice (1999) 94 FCR 561; Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Rode v Burwood Mitsubishi AIRCFB Print R4471 per Ross VP, Polites SDP, Foggo C, 11 May 1999.

20 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 373, 377‒378; Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1, 14. See also Dundovich v P & O Ports AIRC PR923358 8 October 2002, per Ross VP, Hamilton DP, Eames C, at [79]; Lane v Arrowcrest (1990) 27 FCR 427, 456; cited with approval in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410, 467 and 468.

21 [1995] IRCA 499 (14 September 1995).

22 Cf: Tranter v Council of the Shire of Wentworth (unreported), 24 October 1995, Marshall J. See also Schreier v Austal Ships Pty Ltd, Print N9636.

23 PR963023 (26 September 2005) (footnotes omitted).

24 PR928970 (19 March 2003) at [14].

25 PR963023 (26 September 2005)at [34].

26 [2009] AIRC 893 (16 October 2009).

27 Ibid at [54].

 28   See Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160.

 29   RMIT v Asher (2010) 194 IR 1. See also Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [75].

 30   See Anetta v Ansett Australia Ltd (2000) 98 IR 233.

 31   Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.

 32   See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 465.

33 [2011] FWAFB 1166.

 34   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at [685]; Miller v University of New South Wales (2003) 132 FCR 147 at [13].

35 Note: the subsection 392(5) amount was indexed to $136,700 from 1 July 2015 - as was relevant given the timing of this application.

36 [2015] FWCFB 873.

37 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21. See also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge [2013] FWCFB 431.

38 Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446.

39 McCulloch at [27].

 40   Section 119 of the FW Act.

 41   See ss.18 and 20 of the Return to Work Act 2014 (SA).

42 Section 381(2) of the FW Act. See also Smith and Others v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32].

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