| [2017] FWC 2027 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s 394—Unfair dismissal
Catherine Sirl
v
HK Group Pty Limited t/a Buzzbee Long Day Care Centre – No 2
(U2016/10383)
DEPUTY PRESIDENT SAMS |
SYDNEY, 13 APRIL 2017 |
Application for relief from unfair dismissal – jurisdictional decision found the applicant was dismissed – further proceeding to consider whether the dismissal was unfair and, if so, what remedy should be ordered – improper attempt to have jurisdictional decision reversed – correct Award classification Director Level 6.2(6) – Small Business Fair Dismissal Code not complied with – no valid reason for dismissal – no misconduct – applicant denied procedural fairness – dismissal harsh, unjust and unreasonable – reinstatement inappropriate – compensation ordered.
[1] On 28 February 2017, the Fair Work Commission (the ‘Commission’) published a decision in which I dismissed a jurisdictional objection of HK Group Pty Limited t/a Buzzbee Long Day Care Centre (the ‘respondent’ or ‘Buzzbee’) in respect to an unfair dismissal application lodged by Ms Catherine Sirl (the ‘applicant’): Sirl v HK Group Pty Limited t/a Buzzbee Long Day Care Centre [2017] FWC 543 (the ‘jurisdictional decision’). The objection concerned the respondent’s claim that it had not dismissed the applicant and that she had resigned of her own accord.
[2] In rejecting the respondent’s jurisdictional objection, I said at paragraph [145]:
‘For all the above reasons, and in accordance with the ratio in O’Meara and other decided cases, I am satisfied that the actions of the respondent had the intention of bringing the employment to an end, or at the very least, had the probable result of bringing the employment relationship to an end. Accordingly, the respondent’s jurisdictional objection is dismissed.’
[3] In respect to further proceedings, I said at paragraph [146]:
‘Both parties adduced additional evidence and put submissions as to whether the applicant’s dismissal was unfair and what remedy was appropriate. Applications for costs were also raised. While the evidence and material presently before the Commission is sufficient for the Commission to have provisional views as to:
(a) the correct Award classification of the applicant;
(b) whether the Small Business Fair Dismissal Code was complied with;
(c) whether her dismissal on 31 July 2016 was ‘harsh, unreasonable or unjust’; and if so:
(d) what remedy should be awarded,
I intend to invite the parties to file any further evidence and/or submissions, particularly addressing the statutory provisions under ss 387, 388 and 392 of the Act. An application for costs is premature at this point, and will be considered (if filed) when the substantive issues are finally determined.’
[4] Both parties filed further submissions in accordance with the Commission’s directions. Neither party requested a further hearing and I proceed in this decision to determine the above questions ‘on the papers’. This decision should be read in conjunction with the jurisdictional decision.
[5] Little was put in the further submissions which has altered my provisional views following the evidentiary cases advanced by both parties in the earlier proceedings. Regrettably, the bulk of the respondent’s recent submissions sought to challenge my earlier primary finding that the applicant had been dismissed on 31 July 2016. The respondent invited the Commission to revisit my decision and reverse it. The respondent made fresh allegations against the applicant, speculated on new, unsubstantiated theories as to the motivation for her conduct and sought to reverse adverse findings against its witnesses. This was no more than an attempt to reargue its case in the hope of achieving a different result.
[6] Such an approach was improper and directly contrary to my directions to the parties to only address the legislative provisions under ss 387, 388 and 392 of the Fair Work Act 2009 (the ‘Act’). While I acknowledge that the respondent was, and continues to be unrepresented, it could not have been any clearer or more plainly obvious that its objection to the Commission’s jurisdiction had been dismissed. There was no appeal of that decision. There is no capacity to review that decision or use the opportunity for further submissions, on different subject matters, to cavil with the Commission’s findings, let alone seek a reversal of those findings. Accordingly, to the extent that the respondent sought to reargue its jurisdictional case, I do not set out those arguments and have no intention of reconsidering its original case.
[7] I turn now to the first question.
What was the correct Award classification of the applicant?
[8] It was the applicant’s evidence that she undertook all the duties of a Director of an early childhood centre, classified at Director Level 6.2(6) under the Children’s Services Award 2010 [MA000120]. These duties included:
a) overseeing the Centre’s activities and being ultimately responsible for its operations;
b) running the Centre staff rostering;
c) duties as the Nominated Supervisor (and registered as such with the appropriate authorities);
d) being the Educational Leader;
e) being a Room Leader;
f) holding the role of ‘Floater’, which meant she oversaw all the various children’s rooms and oversaw rooms when others went on breaks; and
g) cooking on Mondays.
[9] While the respondent challenged the length of time the applicant had been undertaking managerial duties, it was conceded she took on some management duties, with the help of other family members, after January 2013, when Ms Mona Kassem commenced full-time employment elsewhere. However, the respondent submitted that it had relied on what its Industrial Relations Consultant advised as to the correct rates of pay and in any event, the applicant increased her own pay and paid herself, without any authority.
[10] The description of a Level 6 Director under the Award is set out below:
‘A Director is an employee who holds a relevant Degree or a 3 or 4 year Early Childhood Education qualification, or an AQF Advanced Diploma, or a Diploma in Children’s Services, or a Diploma in Out-of-Hours Care; or is otherwise a person possessing such experience, or holding such qualifications deemed by the employer or the relevant legislation to be appropriate or required for the position, and who is appointed as the director of a service.
(a) Indicative duties
• Responsible for the overall management and administration of the service.
• Supervise the implementation of developmentally appropriate programs for children.
• Recruit staff in accordance with relevant regulations.
• Maintain day-to-day accounts and handle all administrative matters.
• Ensure that the centre or service adheres to all relevant regulations and statutory requirements.
• Ensure that the centre or service meets or exceeds quality assurance requirements.
• Liaise with families and outside agencies.
• Formulate and evaluate annual budgets.
• Liaise with management committees as appropriate.
• Provide professional leadership and development to staff.
• Develop and maintain policies and procedures for the centre or service.
(b) Director Level 1
A Director Level 1 is an employee appointed as the Director of a service licensed for up to 39 children or a Family Day Care service of no more than 30 family based childcare workers and is paid at the Level 6.1 to 6.3 salary range.
(c) Director Level 2
A Director Level 2 is an employee appointed as the Director of a service licensed for between 40 and 59 children or a Family Day Care service with between 31 and 60 family based childcare workers and is paid at the Level 6.4 to 6.6 salary range.
(d) Director Level 3
A Director Level 3 is an employee appointed as the Director of a service licensed for 60 or more children or a Family Day Care service with more 60 family based childcare workers and is paid at the Level 6.7 to 6.9 salary range.
(e) Qualified Co-ordinator
This is also the level for a qualified Co-ordinator who co-ordinates and manages a stand alone out-of-school hours care and/or vacation care centre and has successfully completed a post-secondary course of at least two years in Early Childhood Studies or an equivalent qualification.
A Co-ordinator appointed to co-ordinate the activities of a service licensed to accommodate up to 59 children will be paid at the salary range Level 6.1 to 6.3.
A Co-ordinator appointed to co-ordinate the activities of a service licensed to accommodate 60 or more children will be paid at the salary range Level 6.4 to 6.6.’
[11] There was no serious attempt by the respondent to dispute the duties and responsibilities of the applicant, at least from January 2013, as described by her; see: para 8 above. This Commission is not concerned with the length of time the applicant was performing the duties of Director; it is only necessary, for present purposes, to determine what her duties were at the time of her dismissal (31 July 2016). On the respondent’s own admission, she had been undertaking management duties for three and a half years, prior to 31 July 2016.
[12] To submit that Ms Kassem was the effective Director during this period is nonsense, when Ms Kassem’s own evidence was she only attended Buzzbee five or six times in that three and a half year period. Further, I do not accept the respondent’s submission that the applicant had not been directly appointed by the owner, Mr Kassem, as Buzzbee’s Director, as required by Level 6.2(6) under the Award. While accepting that no formal written appointment was made, it is readily apparent that Mr Kassem had entrusted her with the running of Buzzbee, at least from January 2013. She performed the duties of the Director, and this must constitute ‘appointment’ for all relevant purposes.
[13] Three other matters arising in the earlier proceedings fortify my conclusions in this respect. Firstly, a notice on a wall in a prominent place at the Centre, described the applicant as the Centre Director. The fact the applicant had prepared the notice herself is not the point. No one, including members of the Kassem family, other staff and parents, took issue with that description, until this case. Secondly, the rather clumsy attempt by new Director, Ms Dablan, to explain away her posting of a Snapchat description of her being the new Director of Buzzbee, was rejected by me as unpersuasive; see: paragraph [140] of the jurisdictional decision. Thirdly, the fact the Centre was operating with less children than the licenced number of 40 to 59 is irrelevant for the Award’s purposes. The licence was approved by the regulatory authorities, on those numbers. The fact the children’s numbers may have varied from week to week would be unremarkable and irrelevant to determining an employee’s classification. Accordingly, I am satisfied that the applicant’s classification, at the time of her dismissal, was Director Level 6.2(6) under the Children’s Services Award 2010.
Was the Small Business Fair Dismissal Code complied with?
[14] The Small Business Fair Dismissal Code (the Code) reads as follows:
‘Small Business Fair Dismissal Code
Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.’
[15] The applicant submitted that the serious misconduct provisions of the Code were not applicable to her dismissal, notwithstanding she was dismissed without notice, and without being told she was dismissed for misconduct. It followed that the dismissal must be considered under the ‘other dismissal’. In so submitting, it was put that:
[16] In any event, it was said that the employer and its associated entities did not fall within the scope of the Code as the respondent employed more than 15 employees at the time of her dismissal.
[17] Given that the respondent maintained that the applicant had not been dismissed, it put no submissions as to the compliance with the Code, save to indicate it had less than 20 employees across three Centres, including Buzzbee.
[18] In my view, it is immaterial whether the applicant’s dismissal was a summary dismissal or an ‘other dismissal’ for the purposes of the Code, although I am inclined to the view that the dismissal was one bearing all the usual characteristics of a summary dismissal. In any event, whatever is the description of the dismissal, the uncontested evidence must lead to a conclusion that the Code was not complied with. If it was an ‘other dismissal’:
[19] If the dismissal was a summary dismissal, the respondent’s decision to terminate her employment was not, on any objective analysis, based on reasonable grounds. There was no investigation carried out such as to justify even its own spurious and invalid reason for the applicant’s dismissal.
[20] Having found the Code was not complied with, I turn to the question of whether the applicant’s dismissal was ‘harsh, unjust or unreasonable’. This requires an assessment of each of the matters set out at s 387 of the Act as follows:
(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.
[21] The meaning of the expression ‘harsh, unjust and unreasonable,’ in the context of a dismissal, was explained in the oft-quoted extract from Byrne & Frew v Australian Airlines (1995) 185 CLR 410 (Byrne) by McHugh and Gummow JJ, as follows:
‘128. … 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.’
Valid reason: s 387(a)
[22] As previously indicated, there was no valid reason for the applicant’s dismissal. As was said in Selvachandran v Peteron Plastics Pty Ltd (1996) 62 IR 371:
‘In its context in subsection 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of subsection 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business.’
[23] The respondent’s primary position was (and remains) that the applicant left her employment of her own accord. However, the Commission found at paragraph [124]:
‘In my opinion, the words used by Mr Kassem, in the context of the views he held at the time and the actions taken by him and others of his direct family, were entirely inconsistent with the notion of an employee voluntarily leaving their employment; rather, the conduct evinced a clear intention that the respondent no longer wished the applicant to remain in employment at the Centre. …’
[24] The respondent also argued that the applicant ‘cannot work here because of your husband. If we fix the situation with your husband, the job is available’. However, the Commission found at paragraph [131]:
‘In any event, even at his highest, Mr Kassem’s proposed ‘interim’ solution was no solution at all. The applicant’s employment was ended until the marital relationship ‘was fixed.’ By this point, ‘fixing’ the marriage was most unlikely, given the applicant’s uncontested evidence that her ex-husband had physically assaulted her on numerous occasions, resulting in two Apprehended Violence Orders, divorced her twice, stolen $107,000 from their joint account and accused her of being an unfaithful wife and a thief. Mr Kassem’s evidence was that he had said ‘you cannot work here because of your husband. If we fix the situation with your husband, the job is available.’ There was not even a hint of when the applicant might be returning to work; no indication that she or her husband might be able to work in one of the other two Centres owned by Mr Kassem and thereby not have any direct contact with each other.’
[25] When it became difficult to maintain this obviously invalid reason for the applicant’s dismissal, the ground shifted to allegations of misconduct. The respondent relied on the principle in Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 that facts justifying dismissal which existed at the time of dismissal should be taken into account, even if the employer was unaware of those facts and did not rely on them at the time of dismissal. For the following reasons, this defence is not available to the respondent to justify the applicant’s dismissal.
[26] Firstly, the respondent attempted to stress on a number of occasions that no one had accused the applicant of theft. Yet the respondent’s final submission put the exact opposite:
‘The Respondent contends that the allegations outlined under the heading “Misconduct” found in Hafez’s statement at [40-55], justifies the dismissal. Inter alia, there are allegations of; theft, misuse of Business money, insubordination, fraudulent time entries of work hours and misuse of Business money to pay herself amounts which she was not entitled to.’
[27] Secondly, the respondent’s submission entirely ignores my findings rejecting these allegations, set out at paragraphs [136]-[144] of the jurisdictional decision. Again, it is improper and unacceptable to reagitate these allegations as being proven (or at the least, as reasonably-held beliefs of the respondent). There was no appeal of the jurisdictional decision and those findings stand unchallenged.
[28] Thirdly, even if one was to accept the respondent’s view of the allegations against the applicant, it is utterly implausible that the respondent was ignorant of her management practices at Buzzbee. She certainly did nothing to hide her administrative and financial practices over a period of more than three years as the Director of Buzzbee.
[29] For these reasons, I am not satisfied that there was a valid reason for the applicant’s dismissal, or that its decision to dismiss her was justified by the respondent’s poor attempt to construct a case of misconduct, post her dismissal. Her dismissal was ‘capricious, fanciful and prejudiced’. The absence of a valid reason must weigh strongly in the applicant’s favour.
Procedural fairness issues
[30] Subsections (b) to (e) of s 387 might broadly be characterised as matters relating to whether the applicant was denied procedural fairness in respect to her dismissal. Procedural fairness is always a matter to be considered in unfair dismissal matters, not only as a consequence of legislative fiat (subs (b)-(e) of s 387), but also as a matter relevant to ensuring an employee is not denied natural justice when the employer seeks to terminate the employee’s employment.
[31] That said, it is a well-known principle that even if there was a valid reason or reasons for an employee’s dismissal, the dismissal may still be held to be unfair, if the employee was not afforded procedural fairness or natural justice. This has been a long-held industrial principle adopted and applied by this Commission, its predecessors, other Courts, industrial tribunals and the High Court. In the High Court case of Byrne (supra above), their Honours McHugh and Gummow JJ said at paragraph [130]:
‘130. That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh, unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable (168). But the question under cl 11(a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking to the first issue before there is seen to be any need to enter upon the second.’
[32] In Crozier v Palazzo (2000) 98 IR 137, a Full Bench of the Australian Industrial Relations Commission said at paragraph [73]:
‘As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.’
Notification of valid reason: s 387(b)
[33] Given the applicant’s dismissal was not based on a valid reason, it must logically follow that she was not notified of the reason for her dismissal. Even accepting she was dismissed for a capricious reason, she was not told of that reason until the phone call she had with Mr Kassem on 31 July 2016 – the day of dismissal. As I said at paragraphs [131] and [133] of the jurisdictional decision:
‘[131] In any event, even at his highest, Mr Kassem’s proposed “interim” solution was no solution at all. The applicant’s employment was ended until the marital relationship “was fixed”. By this point, “fixing” the marriage was most unlikely, given the applicant’s uncontested evidence that her ex-husband had physically assaulted her on numerous occasions, resulting in two Apprehended Violence Orders, divorced her twice, stolen $107,000 from their joint account and accused her of being an unfaithful wife and a thief. Mr Kassem’s evidence was that he had said “you cannot work here because of your husband. If we fix the situation with your husband, the job is available.” There was not even a hint of when the applicant might be returning to work; no indication that she or her husband might be able to work in one of the other two Centres owned by Mr Kassem and thereby not have any direct contact with each other. Mr Kassem claimed he had been treating both parties fairly and equally. How was it fair or equal to exclude the applicant from the workplace, without pay, but apparently take no action against Jehad. I note there was no evidence Jehad had been stood down on pay between 31 July and 9 August 2016, or at all. This was a claim first raised in final submissions.
…
[133] In short, I am satisfied that the words acknowledged to have been said by Mr Kassem were no more than a “smoke screen” to disguise the respondent’s real intention of ensuring the applicant’s termination of employment - one way or another.’
[34] It follows that there was an abysmal failure of the respondent to comply with s 387(b) of the Act. This must weigh in the applicant’s favour.
Opportunity to respond: s 387(c)
[35] It is self-evident that the opportunity to be afforded to an employee to respond to the reason(s) for their dismissal must be known to the employee at the time. Moreover, it seems to me that the employer cannot rely on a response to a reason which is an invalid one, to satisfy its obligation under s 387(c). In this case, the reason was not valid and was only provided to the applicant on the day of her dismissal, shortly before her meeting with Mr Kassem that Sunday night, which I found to be an ‘ambush’. Moreover, I had earlier rejected the respondent’s evidence that the applicant had accepted Mr Kassem’s alleged offer for her to be paid and not return to the Centre until the issues with his son were resolved (paragraphs [129]-[131]). The respondent again seeks to cavil with that finding. It is improper and not open to the respondent to do so.
[36] I am satisfied that s 387(c) was not met, substantially or at all. Such a finding must weigh against the respondent’s case.
Unreasonable refusal to allow support person: s 387(d)
[37] In Galea v Billabong Custom Caravans Pty Ltd [2017] FWC 562, Gostencnik DP set out the circumstances where consideration of this subsection might arise. At paragraph [49], the Deputy President said:
‘If an employee protected from unfair dismissal has requested that a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse to allow that person to be present. It is clear from the plain language of s.387(d) of the Act that this consideration is directed to an employer’s unreasonable refusal to allow a support person to be present. It is not concerned with whether an employer offered the employee such an opportunity. In most cases, the section will be engaged if the employee asks for a support person to be present and the employer refuses the request. It may well be appropriate in some cases to consider the overall circumstances in which meetings to discuss an employee’s performance, capacity and conduct or dismissal occurred to properly determine whether there was an unreasonable refusal by the employer to allow the employee to have a support person present.’ [endnote omitted]
[38] The respondent submitted that the applicant was always offered a support person to be with her, as demonstrated by what a ‘wonderful father-in-law’ and employer Mr Kassem had been to her. She was never forced to attend any meetings.
[39] While the applicant did not have a support person with her on 31 July 2016, she did not believe it was to be a meeting which would result in her dismissal or that she would be ‘ambushed’. Perhaps it is why she sought to secretly tape the conversation on her phone. Given there was no request by the applicant to have a support person or to adjourn the meeting when it became obvious what was happening, there was no refusal of either of those requests. In these circumstances, this matter is a neutral factor in this case.
Warnings regarding unsatisfactory performance: s 387(e)
[40] At paragraphs [142]-[143] of the jurisdictional decision, I said:
‘[142] In addition, in her statement, Rosette said that after the applicant had left the Centre, she had heard of ‘many things’ about staff being threatened by her and that she had also contacted parents to ‘degrade’ (sic) the Centre. Again, there was no direct evidence to corroborate these claims.
[143] As to the allegations of poor performance issues in 2013, the respondent relied on a document setting out an administrative oversight by the applicant at the time. Even accepting this was a performance issue raised with the applicant, it was three years ago; far too stale to be of any probative value; let alone serve as a ground for dismissing her. There was no evidence of any other performance issues before, or after this time. Relying on very stale performance issues, which must have been satisfactorily addressed at the time, as evidence of the applicant’s misconduct was, in my view wrong, vindictive and little more than an afterthought.’
[41] Given these firm conclusions and notwithstanding the respondent’s improper attempts to have me revisit the applicant’s conduct allegedly found after her dismissal, there can be no other conclusion than that the applicant was not provided with any warnings regarding her performance or conduct, such as to even scrape over the hurdle of this subsection being satisfied. It is preposterous to submit that for three and a half years, with the applicant in a close-knit family unit, that the respondent was not fully aware of the applicant’s performance and management of Buzzbee and did not one thing to correct or warn her of any perceived shortcomings about which it now complains. These post facto protestations have a distinctly hollow ring about them.
[42] My findings under this subsection must weigh in the applicant’s favour.
Impact of the size of the respondent on procedures followed: s 387(f)
[43] While the respondent is not a large employer, it would appear that it is not a small business as defined in the Act. Mr Kassem is the owner and Director of three childcare facilities. Both he and his daughters profess to have a long history in the childcare industry, and in business generally. If this be so, then the processes adopted by the respondent in dismissing the applicant bear no resemblance at all to what one might expect of an employer, with a rudimentary appreciation of the requirements of procedural fairness. If it was any process at all, it was little more than an exercise designed to prevent the toxic relationship between the applicant and Mr Kassem’s son from impacting on the Centre by removing the applicant from all potential contact with him, thereby resulting in her dismissal. It was unfair and unacceptable. Thus, the size of the respondent was irrelevant to what any employer, large or small, might be expected to understand and apply in a practical, common-sense and fair manner.
Absence of dedicated human resource management: s 387(g)
[44] Obviously, there was no dedicated human resources function of the respondent, although it was claimed, as I said earlier, that Mr Kassem and his daughters have long experience in business and the childcare industry. It might have been expected that such experience would have included at least some understanding of what the statute expects in respect to the procedures to be followed by an employer when dismissing an employee. However, the evidence did disclose that the respondent had engaged an IR Consultant, Mr David Morphett, for advice on pay and conditions and presumably other employment-related issues. Of course, this person has since severed their relationship with the respondent (or perhaps the other way round) after it became apparent Mr Morphett was providing advice and support to the applicant in these proceedings.
[45] From the language and tone of the respondent’s final submissions, Mr Morphett is now regarded as persona non grata as far as the respondent is concerned. He is deeply resented and heavily criticised in its submissions. Be that as it may, the evidence was that he was the respondent’s IR Consultant well before the applicant’s dismissal. It may be assumed he did not know what the Kassems had in mind, but as it turned out, he was not consulted and would hardly have condoned the respondent’s conduct. Both matters under ss 387(f) and (g) do not reflect favourably on the respondent.
Any other relevant matters: s 387(h)
[46] It will be apparent from what I set out in the jurisdictional decision, that there are a number of matters which I consider to be relevant to the case. I need not repeat them, and in any event the matters I have further canvassed in this decision are more than sufficient to satisfy the following findings.
[47] In summary, I am satisfied the applicant’s dismissal was ‘harsh, unjust and unreasonable,’ within the meaning of s 387 of the Act. The dismissal was harsh, because there was no evidence upon which the respondent could form the belief that the applicant had engaged in conduct it alleged was discovered after her dismissal. It was unreasonable in that it was premised on an invalid reason which could not be justified in any circumstances. It was harsh because the applicant lost her job for confected reasons, after many years of service, with the obvious economic detriment which flowed from her dismissal. She was denied payment in lieu of notice and the payment of her other outstanding entitlements (as yet undetermined).
Appropriate remedy
[48] Section 390 of the Act sets out the circumstances in which the Commission 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.’
[49] Given the bitter relationship between the applicant and the respondent (Mr Kassem and his daughters Mona and Rosette in particular), there could not be a more persuasive set of circumstances which would justify a conclusion that reinstatement in this case would not be appropriate. I find accordingly.
Should an order for compensation be made?
[50] Section 392 of the Act sets out the matters the Commission must have regard to when determining:
a) whether compensation should be ordered;
b) if so, what amount of compensation should be ordered;
c) the effect of any order as to any findings of misconduct by the applicant;
d) the upper limit of compensation; and
e) matters not to be taken into account.
[51] Section 392 reads as follows:
‘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.
(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.’
Effect of order on the viability of the employer’s enterprise: s 392(2)(a)
[52] The applicant’s representative submitted that as there was no evidence of the effect of the order sought on the respondent’s viability, the Commission should order the maximum amount of $69,450. It was put the applicant had been employed for over eight years, and in recent times was employed in the most senior role in the Centre. The respondent concedes at least four years’ continuous service. There was no misconduct of the applicant, so no deduction should be made for that reason. It was submitted that it was unlikely the applicant would have left the employ of the respondent voluntarily, given she is the principal carer of her five children, the flexibility she had at the Centre in balancing work with her family responsibilities and the unlikelihood of her finding a suitable alternative position with such flexibility.
[53] The applicant’s representative further submitted the correct rate of pay applicable to the applicant’s employment as a Director was $1207.90 per week, and she could have expected to remain as the Director for at least four more years. She has been denied superannuation and the payment of her outstanding entitlements.
[54] The applicant’s representative set out a number of attempts by her to mitigate her loss, without success, particularly due to the conflict between work schedules and her family responsibilities. She eventually secured some two weeks’ work, as an Assistant Director for the Stay Ahead Child Care Centre, but could not continue due to the travel distances and the difficulties just mentioned. She obtained some sporadic work, caring for families from her home. Her total earnings during the relevant period were $5,314.80. The applicant also applied for roles with the following entities:
[55] The respondent put few submissions as to the matters to be considered under s 392 of the Act, and no evidence at all on these matters, despite being expressly directed to do so. The best I can do with the respondent’s convoluted submissions, is summed up by the tenor of the following extracts:
‘2) Having to pay the applicant such an unreasonable and unfair amount of money that she is not even entitled too [sic] is unfair and unjust to begin with as no termination took place, means the centre cannot continue to operate. Enough damage has been done!
…
1) It is respectfully submitted that the alleged hardship of the Applicant is exaggerated and she would not be entitled to the full award of 26 weeks’ pay.
Misconduct
1) Further or in the alternative, The Respondent respectfully submits that if there is a finding that the Applicant was in fact dismissed, the dismissal was lawful and reasonable in the circumstances.’
Findings on compensation
[56] The methodology to be adopted by the Commission in calculating compensation having regard for each of the matters set out in s 392 of the Act, (often referred to as the Sprigg formula), was considered by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. t/a Ottrey Lodge [2013] FWCFB 431; see also: Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 and Ellawala v Australian Postal Corporation [1999] AIRC 1250. In adopting that methodology, I make specific findings as follows:
a) As the respondent put no evidence as to the effect any order of compensation would have on the viability of its enterprise, I am not satisfied that the Order I intend to make would have any deleterious effect on the respondent’s viability. However, the applicant’s representative put that the amount of the compensation should be the maximum available under the Act, being $69,450. This submission has adopted the incorrect maximum amount under s 392 of the Act. It is not half the amount of the high income threshold, but is referable to subs (5)(a) (the amount worked out under subs (6) being the amount to which the person is entitled for any period of employment with the employer during the 26 weeks immediately before the dismissal). That amount is $1207.90 x 26, being $31,405.40.
b) There is a dispute about the length of the applicant’s service with the respondent – although it was conceded she had at least four years’ continuous service. However, the respondent’s own letter of 7 December 2007 disclosed that she was employed full-time by Windtones (the respondent’s registered name) on a wage of $421 a week. While the actual length of service might have implications for other of the applicant’s claims (long service leave, for example), it is not materially relevant for present purposes. I am satisfied that a period of four years’ continuous service, with at the very least, intermittent full-time/part-time employment for five years before that time, is a reasonably significant period of employment with the one employer.
c) Although it is notoriously difficult to speculate with any certainty how long a period the applicant would have continued in employment but for her dismissal, I am prepared to accept that given the applicant’s family responsibilities, she was unlikely to have voluntarily resigned for some time from a job which afforded her considerable flexibility. Her efforts in securing suitable alternative employment reinforce that proposition. Without applying a discount for any contingencies (which are a possibility, but not a likelihood), I estimate the applicant would have continued her employment for a further six months (an amount of $31,405.40).
d) The applicant made considerable efforts to obtain alternative employment, and in fact did so, but could not continue due to her family responsibilities. She continues to look for alternative employment, including employment outside her skills and experience. I am satisfied she has made real and genuine efforts to mitigate the losses suffered by her dismissal.
e) The applicant’s representative set out in some detail and particularity, the amount of remuneration she has earned during the period between her dismissal and the making of this Order. That amount is $5,314.80. It is appropriate to deduct that amount from the total compensation proposed to be ordered ($31,405.40 - $5,314.80 = $26,090.60).
Other matters: s 392(2)(g)
[57] The applicant received no notice of termination and as I apprehend it, she has to date received no payment in lieu of notice (presumably with the respondent relying on summary dismissal, without notice). Other outstanding entitlements, including underpayment of her salary, can only be pursued in a court of competent jurisdiction. Having found that the applicant was dismissed summarily and not paid in lieu of notice, I propose to add the sum of $3,623.70, being three weeks’ pay in lieu of notice, accordingly to s 117 of the Act – National Employment Standards – to $26,090.60, resulting in an amount of $29,714.30.
Misconduct reduces amount: s 392(3)
[58] Given I have found that misconduct did not inform the decision of the respondent to dismiss the applicant, nor was it justified from its post-dismissal reconstruction of events to characterise her conduct as serious misconduct, (which it was not), no deduction in compensation is made on that score.
[59] The Order I intend to make contains no component by way of compensation for shock, distress, humiliation or other analogous hurt (s 392(4)).
Compensation cap
[60] As previously mentioned, the compensation cap under s 392(5) of the Act in relation to the applicant is $31,405.40. It is self-evident that my calculations, based on the Sprigg formula above, result in a total amount of compensation which does not exceed the compensation cap. This is the amount of compensation I intend to Order.
[61] There was no evidence or submission put by the respondent to pay any amount of compensation in instalments, as permitted by s 393 of the Act. I decline to do so.
Conclusion
[62] For the aforementioned reasons, I am satisfied that the dismissal of the applicant by the respondent on 31 July 2016 was ‘harsh, unjust and unreasonable,’ within the meaning of s 387 of the Act. Finally, s 381(2) of the Act is a significant and overarching object of Part 3-2. It is expressed in these terms:
‘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.’
[63] I am satisfied reinstatement is inappropriate and compensation in an amount of $29,714.30, plus 9.5% superannuation, is appropriate in all the circumstances of this case, with any deduction of appropriate taxation according to law. I am satisfied that the remedy I have determined will ensure a ‘fair go all round’ is accorded to both the applicant and the respondent.
[64] The Orders to give this effect will accompany the publication of this decision, with a further Order requiring payment of the above amounts within 21 days of today.
DEPUTY PRESIDENT
Final written submissions:
Catherine Sirl: 15 March 2017.
HK Group Pty Limited T/A Buzzbee Long Day Care Centre: 28 March 2017.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR591753>