[2017] FWC 7061 [Note: An appeal pursuant to s.604 (C2018/284) was lodged against this decision and the order arising from this decision - refer to Decision dated 29 January 2018 [[2018] FWC 571] and Full Bench Decision dated 16 March 2018 [2018] FWCFB 1069 for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Bernice Zhang
v
GTS Travel Management T/A Green Travel Service
(U2017/10130)

COMMISSIONER JOHNS

SYDNEY, 29 DECEMBER 2017

Application for Relief of Unfair Dismissal – Small Business Fair Dismissal Code – Inconsistent with Code – Dismissal unfair – Compensation awarded.

Introduction

[1] On 18 September 2017 Bernice Zhang (Applicant) made an application to the Fair Work Commission (Commission) pursuant to section 394 of the Fair Work FW Act 2009 (FW Act) for a remedy in respect of her dismissal by GTS Travel Management (trading as Green Travel Service) (GTS/Employer/Respondent).
[2] GTS denies that it dismissed Ms Zhang unfairly. It says it complied with the Small Business Fair Dismissal Code.
[3] Attempts at conciliation were attempted, but the matter remained unresolved.
[4] Consequently the matter was listed for a Determinative Conference on 4 December 2017. I deciding to conduct the matter by way of a Determinative Conference under s.398 of the FW Act after taking into account:

the parties to the matter. I decided that doing so would mean that a Determinative Conference would be the most effective and efficient way to resolve to the matter.
[5] At the Determinative Conference:

[6] Following the Determinative Conference leave was given to the parties to provide additional information particular relevant to the issue of remedy (if any). Consequently, in coming to this decision the Commission, as presently constituted, has had regard to the following:

Background

[7] The following matters were either agreed between the parties or not otherwise substantially contested:

b) On 22 May 2017, the Applicant was made a Travel Consultant, which included more substantial duties and a salary increase.  2

c) On 11 September the Applicant was admitted to the emergency ward due to a pregnancy related medical condition. 3 During this period, she informed her supervisor, Ms Anvekar via text that she was unable to present to work as she was undergoing several tests relating to her pregnancy.4

d) On 11 to 12 September 2017 the Applicant was unable to work due to the pregnancy related medical condition. 5

f) On 14 September 2017, the Applicant’s termination took effect. 78

[8] The following matters were contested:

a) On 21 July 2017

i. The Respondent asserts the Applicant was not managing her workload in a satisfactory manner, causing delays. 9

ii. The Applicant asserts that this delay was due to her co-worker being on leave and that she did not receive any negative feedback from the incident. 10

b) On 24 July 2017:

i. The Respondent asserts the Applicant was warned that in November 2017, her workload would increase significantly and that if she was unable to manage this workload she would be replaced. Additionally, that the Applicant subsequently did not improve her performance. 11

ii. The Applicant asserts that she did not receive any negative feedback regarding the above incident. 12

c) On 25 July 2017 both parties agree that the Applicant issued a ticket with the wrong customer’s name. However:

i. The Respondent asserts the Applicant was warned verbally for this mistake and was given instruction to improve. 13

ii. The Applicant asserts that she did not receive any negative feedback regarding the above incident. 14

d) On 11 September 2017:

i. Mr Sheng, on behalf of the Respondent asserts that he was not made aware of pregnancy on 11 September 2017. But instead, he learned of it after termination, 5:30pm on 13 September 2017 when he stated he terminated the Applicant verbally. He alleges that the Applicant then stated that he could not terminate her as she was pregnant. 15

iii. The Applicant asserts that the company was made aware of the pregnancy when the Applicant texted her Supervisor Ms Anvekar of the details of her pregnancy related illness on 11 September 2017. She asserts that Ms Anvekar told Mr Sheng who subsequently made the decision to terminate her on the basis of her pregnancy and not her alleged performance issues.

e) On 13 September 2017:

i. The Respondent asserts that upon return to the workplace the Applicant asked for an increase in remuneration, and when this request was denied, she refused to work on an assigned task allocated to her that day. 17 In addition, the Respondent asserts that the Applicant became more “negative, combative, and resistant to feedback”, that she informed the Respondent that she did not want to take on any responsibility for the company and that her tasks were incomplete at the end of the day.18 Mr Sheng alleges that in a meeting he verbally notified the Applicant of her termination, which took effect in writing the next day on 14 September 2017.

ii. The Applicant asserts that she asked the Respondent that he either hire a new travel consultant in addition to herself to help address the recent increase in workload, or, increase her remuneration. 19 This was allegedly promised to her previously in March 2017. She asserts that she did not refuse to do any work assigned to her and denies that she showed negative and combative behaviour. Rather, the she asserts that she refused to do any work outside the scope of her employment. 20

f) On 14 September 2017:

i. The Respondent asserts that dismissal took effect on this day. 21 The Respondent alleges this is because while he allegedly verbally indicated dismissal on 13 September 2017, that the Applicant left quickly soon after, meaning he had to give the dismissal letter to the Applicant on 14 September 2017.22

ii. On the morning of this day the Applicant asserts that she was handed a termination notice outlining the reasons for dismissal without any warnings or opportunity to address these reasons. 23

[9] The applicant submits she was unfairly dismissed and seeks an Order that she be compensated in the amount of 26 week’s pay (on the basis that she would have worked up until around April 2018 24 before taking maternity leave).

Protection from Unfair Dismissal

[10] An order for reinstatement or compensation may only be issued where the Commission is satisfied the Applicant was protected from unfair dismissal at the time of the dismissal.
[11] Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

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

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

(b) one or more of the following apply:

(i) a modern award covers the person;

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

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

[12] There is no dispute 25, and the Commission, as presently constituted, is satisfied, the Applicant has completed the minimum employment period, and earned less than the high income threshold. Consequently, the Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal.

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

Was the dismissal unfair?

[14] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the FW Act existed. Section 385 provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

Was the Applicant dismissed?

[15] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the FW Act. In the present matter the Respondent concedes that it dismissed the Applicant. 26

[16] I find that the Applicant was dismissed from her employment with the Respondent within the meaning of s.386 of the FW Act.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[17] A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (the Code). It is useful to set out s.388(2) of the FW Act:

“388 The Small Business Fair Dismissal Code...

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”

[18] To be satisfied that a dismissal was consistent with the Code the Respondent must be a “small business employer” for the purposes of the FW Act, which is defined at s.23:

“23 Meaning of small business employer

(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.

(2) For the purpose of calculating the number of employees employed by the employer at a particular time:

(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and

(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.

(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.

(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):

(a) the employee who is being dismissed or whose employment is being terminated; and

(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.”

[19] The Respondent was a small business employer if at the time of giving notice they, and any associated entities, employed fewer than 15 employees including casuals employed on a regular and systematic basis and the Applicant.
[20] The Respondent submits they were a small business employer at the relevant time because it only employed 3 people (including the Applicant).
[21] The Applicant accepts 27 that the Respondent was a small business employer within the meaning of s.23 of the FW Act.

[22] The Commission, as presently constituted, is satisfied that at the time of giving notice, the Respondent employed fewer than 15 employees.

[23] Consequently, I find the Respondent was a small business employer within the meaning of s.23 of the FW Act at the time of giving notice.

[24] The Small Business Fair Dismissal Code (Code) was declared by the Minister for Employment and Workplace Relations on 24 June 2009:

“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.”

[25] The Respondent conceded that the termination was not related to theft, fraud, violence or serious breaches of occupational health and safety procedures. 28 It conceded that the dismissal was not a summary dismissal.29

[26] To the extent that the Respondent asserted that it was entitled to terminate the Applicant’s employment summarily because she (to their mind) refused to do work as instructed, that reason is not made out on the evidence. The email relied upon by the Respondent is nothing of the sort. Mr Sheng was no doubt disappointed in the attitude of the Applicant, but it did not provide a valid reason for termination. In fact, nothing in the Applicant’s conduct provided a valid reason for termination.

[27] The Respondent then contends that the dismissal was consistent with the “Other Dismissal” part of the Code.

[28] However, Mr Sheng (on behalf of the Respondent) went on to concede that it he never expressly and unequivocally told the Applicant that her job was at risk. 30 Having considered all the evidence I am not satisfied that the Applicant was at any time, in a practical and real sense, warned about her performance and warned that her job was on the line. Mr Sheng’s veiled references to possibly having to hire another travel consultant were all too opaque to properly be considered a warning as that phrase is properly understood.

[29] Although it is not mandated by the legislation, the Respondent could have put its concerns in writing. It could have given the Applicant clear instructions about the performance issues to be remedied and the timeframe in which that was to occur. It did none of this.

[30] For the most part the Applicant’s day to day work was performed with Ms Anvekar. The Applicant treated her as her supervisor. There is no evidence that Ms Anvekar communicated concerns to the Applicant about her performance.

[31] In all the circumstances (including in the absence of a valid reason for termination and the absence of warnings), the Commission, as presently constituted, is satisfied the dismissal of the Applicant was not consistent with the Code.

[32] As I have found that the dismissal of the Applicant was not consistent with the Code, I proceed to consider s.387 of the FW Act.

Was the dismissal a genuine redundancy?

[33] The Respondent did not submit that I should dismiss the application because the dismissal was a case of genuine redundancy. 31

[34] Consequently, I find that the dismissal was not a case of genuine redundancy within the meaning of s.389 of the FW Act.

Harsh, unjust or unreasonable

[35] Having been satisfied of each of s.385(a),(c)-(d) of the FW Act, the Commission must consider whether it is satisfied the dismissal was harsh, unjust or unreasonable. The criteria the Commission must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the FW Act:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

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

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

[36] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

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

[37] I am under a duty to consider each of these criteria in reaching my conclusion. 32

[38] I will now consider each of the criteria at s.387 of the FW Act separately.

Valid reason - s.387(a)
[39] The Respondent must have a valid reason for the dismissal of the Applicant, although it need not be the reason given to the Applicant at the time of the dismissal. 33 The reasons should be “sound, defensible and well founded”34 and should not be “capricious, fanciful, spiteful or prejudiced.”35

[40] For the reasons I have given above I am not satisfied that the Respondent had a valid reason for the dismissal.

[41] Consequently, I find there was not a valid reason for the dismissal.

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

[42] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made, 36 in explicit terms37 and in plain and clear terms.38 In Crozier v Palazzo Corporation Pty Ltd39 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations FW Act 1996 stated the following:

“[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 170(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.” 40

[43] The letter of termination dated 13 September 2017 (but handed to the Applicant on 14 September 2017) states that there has been a “constant lace of performance shown by [the Applicant] for a long time.” It says the Applicant has shown “utter indifference towards the cause of the company for a prolonged period of time.” However, the remained of the letter does not provide sufficient evidence to support these wild assertions. It refers to the Applicant’s “negative work attitude”. It (falsely) claims that the Applicant “refused” to perform a task. However, I have already found that she did no such thing. The email relied upon the Respondent does not support that allegation.
[44] For all these reasons I find the Applicant was not notified of the reason for the dismissal. The reasons advanced were unspecified and spurious.

Opportunity to respond - s.387(c)

[45] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 41

[46] Noting that the Respondent’s concerns with the Applicant were unspecified and spurious I find the Applicant was not given an opportunity to respond to the reason for the dismissal. The decision had been made by Mr Sheng on 13 September 2017. It was effected on 14 September 2017. Noting was going to change his mind.

Unreasonable refusal by the employer to allow a support person - s.387(d)

[47] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.
[48] There being no offer to attend with a support persona and no request to have one by the Applicant I find the Respondent did not unreasonably refuse to allow the Applicant to have a support person present at discussions relating to the dismissal.

Warnings regarding unsatisfactory performance - s.387(e)

[49] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employer about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct. 42

[50] For the reasons already stated I find the Respondent did not warn the Applicant about their unsatisfactory performance before the dismissal. I appreciate that Mr Sheng believes he did warn the Applicant, but he needs to understand that his efforts fell well short of what is expected. His belief that Applicant should have known that her job was on the line is simply not good enough. The Applicant was entitled to unequivocal warnings and entitled to properly understand her job was at risk. This did not occur.

Impact of the size of the Respondent on procedures followed - s.387(f)

[51] The size of the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.
[52] I find the size of the employer’s enterprise did impact on the procedures followed in effecting the dismissal.

Absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

[53] The absence of dedicated human resource management or expertise in the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.
[54] I find the absence of any such management or expertise did impact on the procedures followed by the Respondent in effecting the dismissal.

Other relevant matters - s.387(h)

[55] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. I consider the following matter to be relevant to the determination of whether the dismissal of the Applicant was harsh, unjust or unreasonable:

Conclusion

[56] Having considered each of the matters specified in s.387, the Commission, as presently constituted, is satisfied the dismissal of the Applicant was harsh, unjust or unreasonable. Accordingly, I find the Applicant’s dismissal was unfair.

Remedy

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

“390 When the FWC may order remedy for unfair dismissal

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

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

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

(3) The Commission 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.

[58] I have already dealt with the issues at s.390(1)(a)–(b) above. The Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal pursuant to s.382 of the FW Act and the Applicant was dismissed unfairly. Accordingly, the Commission is required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if it is satisfied such an order is appropriate in all the circumstances.

Reinstatement

[59] The Applicant seeks compensation as the primary remedy. Regardless of the remedy sought by the Applicant, s.390 of the FW Act requires I first determine whether reinstatement is appropriate before I may consider an order for compensation.
[60] Both the Applicant and Respondent submits reinstatement would be inappropriate because of the Respondent is a small business and reinstatement would require the Applicant to again work with Mr Sheng in circumstances were, it is clear, any possibility of a productive and cooperative working relationship between them has been lost.

Consideration

[61] In Regional Express Holdings Ltd T/A Rex Airlines 43 a Full Bench of Fair Work Australia considered what factors may be taken into account when considering if reinstatement is inappropriate under s.390(3)(a) of the FW Act:

“[26] Whenever an employer dismisses an employee for misconduct, assuming the employer is acting honestly, there is an implied loss of trust and confidence in the employee. If it is subsequently found that the termination was harsh, unjust or unreasonable it is appropriate to consider whether the relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of management witnesses. All of the circumstances should be taken into account. In this case there are a number of relevant matters. They include the fact that not all of the conduct alleged against the respondent has been proven, the respondent’s apparently unblemished record in the performance of his flying duties over a period of 14 years, the fact that the misconduct is not directly related to the performance of the respondent’s professional duties as a first officer and Rex’s failure to pursue any substantial disciplinary action against another pilot who, it is alleged, has been guilty of misconduct at least as serious as that of which the respondent was accused. The significance of the last consideration is that the pilot in question is still carrying out the full range of his duties, despite allegations of conduct of a kind which, in the respondent’s case, is said to have led to an irrevocable loss of trust and confidence. Assuming a positive approach on both sides we find there is a reasonable chance that the employment relationship can be restored with the necessary level of mutual trust.” 44

[62] In the circumstances the Commission, as presently constituted, is satisfied that I should order reinstatement is inappropriate.

Compensation

[63] Section 390(3)(b) provides the Commission may only issue an order for compensation to the Applicant if it is appropriate in all the circumstances.
[64] The Applicant submits that an order for compensation is appropriate in all the circumstances of this case because:

[65] In the present matter I am only concerned with the unfairness of the dismissal.
[66] The Respondent submits that an order for compensation is not appropriate in all the circumstances of this case because:

[67] The financial records of the Respondent demonstrate that:

[68] Having regard to the issues that gave rise to the finding above that the termination was unfair, the absence of a valid reason and the absence of warnings, the Commission, as presently constituted, is satisfied that an order for compensation is appropriate in all the circumstances of this case.
[69] Section 392 of the FW Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered:

“392 Remedy—compensation

(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.

(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.

(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.

(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.

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

Note: subsection 392(5) indexed to $61,650 from 1 July 2012

(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.”

[70] The method for calculating compensation under s.392 of the FW Act was recently dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 45 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations FW Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket46 and Ellawala v Australian Postal Corporation47. I have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation.
[71] I will now consider each of the criteria in s.392 of the FW Act.

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

[72] The Applicant’s remuneration with the Respondent was $55,000 per annum.
[73] I should now determine the period of time the Applicant would have remained employed by the Respondent, or would have likely remained employed with the Respondent, had they not been dismissed.
[74] Noting that there was no valid reason for the dismissal and no warnings about performance I find that the Applicant would have continued to be employed by the Respondent for 28 weeks had she not been dismissed. I accept her evidence that (being due to give birth in May 2018) she would have continued in employment until April 2017 when her pregnancy would have required her to be confined.
[75] I reject the Respondent’s contention that the employment would have ended about a week later in any case because of the loss of the RACV contract. I accept that it was a big account to loose, but the evidence is that the company had been trading at a loss for some time and yet, it decided to continue to employ the Applicant. The Respondent remains keen to continue to operate in Australia and to build upon its client base. I find that, more likely than not, with the loss of the RACV account the Respondent would have been more reliant on the Applicant to continue its Australian operations.
[76] The amount the Applicant would have received is therefore $29,615.38.

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

[77] I find the Applicant has earned 3 weeks remuneration by way of notice during the period since the dismissal and deduct this amount from the compensation to be ordered. This leaves an amount of 25 weeks ($26,442.30).

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

[78] Because of her pregnancy I find the Applicant is reasonably likely to earn zero income during the period between the making of the order for compensation and the actual compensation. I deduct nothing from the compensation to be ordered on account of this matter.

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

[79] Although I have found that the loss of the RACV account would not have resulted in the termination of the Applicant’s employment soon after 14 September 2017 in any case, I am prepared to find that the precarious nature of the Respondent’s business means that I should apply a contingency that the dismissal would have occurred at some point in the future.
[80] Consequently, I find it is appropriate in the circumstances that a contingency should be applied.
[81] I will reduce the amount of compensation to be ordered by 25% on the basis that, having regard to the precarious nature of the Respondent’s business there was a 25% chance that the employment would have been terminated between 14 September 2017 and April 2018.
[82] I will reduce the amount of compensation to be ordered by 25% (to 18.75 weeks). That is an amount of $19,831.73.

Viability: s.392(2)(a)

[83] Although the Respondent provided financial information to suggest that it was in a difficult financial position (and I accept that it is), Mr Sheng made it very clear that the company is solvent and that they plan to continue to trade. He made it very clear in correspondence to the Commission that,

[84] For these reasons I find an order for compensation in the amount proposed will not affect the viability of the Respondent’s enterprise.

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

[85] I find that the Applicant’s period of service with the Respondent, being 3 years and 5 months, should not affect the amount of compensation to be ordered.

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

[86] In considering whether the Applicant has taken steps to mitigate the loss suffered as a result of the dismissal I should take into account whether the Applicant acted reasonably in the circumstances. 48

[87] I find that the Applicant has made efforts to mitigate their loss suffered as a result of the dismissal, but that, sadly, she is a victim of a general reluctance to hire pregnant people.

Misconduct: s.392(3)

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

Shock, Distress: s.392(4)

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

Compensation cap: s.392(5)

[90] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
[91] The high income threshold immediately prior to the dismissal was $142,000.
[92] The amount the Applicant would have earned, or to which the Applicant was entitled, for the 26 week period immediately prior to the dismissal was $27,500.
[93] The amount of compensation I will order does not exceed the compensation cap.

Payment by instalments: s.393

[94] The Respondent did not seek to pay any compensation by instalments.

Conclusion

[95] The Commission, as presently constituted, is satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and a remedy of $19,831.73 is appropriate.
[96] An order will be issued with this decision.

COMMISSIONER

Appearances:

The Applicant for herself.

Mr Sheng, Director for the Respondent.

Hearing details:

4 December 2017

Final written submissions:

8 December 2017

 1   Exhibit #A1 Updated Applicant’s outline of argument: merits, page 3.

 2   Exhibit #A1 Updated Applicant’s outline of argument: merits, pages 10, 11.

 3   Exhibit #A1 Updated Applicant’s outline of argument: merits, pages 9.

 4   Exhibit #A3 Bundle of Attachments, 1 to 72, attachment 46.

 5   Exhibit #A3 Bundle of Attachments, 1 to 72, attachment 1.

 6   Exhibit #A1 Updated Applicant’s outline of argument: merits, page 9.

 7   Exhibit #R1 Respondent’s Submissions, page 6.

8 Exhibit #A1 Updated Applicant’s outline of argument: merits, page 9.

 9   Exhibit #R1 Respondent’s Submissions, page 14.

 10   Exhibit #A4 Applicant’s Responses to Respondent’s Outline Dated 21/11/2017, page 21.

 11   Exhibit #R1 Respondent’s Submissions, page 14.

 12   Exhibit #A4 Applicant’s Responses to Respondent’s Outline Dated 21/11/2017, page 21.

 13   Exhibit #R1 Respondent’s Submissions, page 7, 15.

 14   Exhibit #A4 Applicant’s Responses to Respondent’s Outline Dated 21/11/2017, pages 10, 21.

 15   Exhibit #R2 Witness Statement of Peter Sheng, page 7.

 16   Exhibit #R3 Witness Statement of Prachi Anvekar.

 17   Exhibit #R1 Respondent’s Submissions, page 6, 11, 12.

 18   Ibid.

 19   Exhibit #A4 Applicant’s Responses to Respondent’s Outline Dated 21/11/2017, page 6

 20   Ibid, page 7.

 21   PN385.

 22   Form F3 – Employer Response to unfair Dismissal Application, page 6.

 23   Exhibit #A1 Updated Applicant’s outline of argument: merits, page 9, 16.

 24   PN75.

 25   PN11.

 26   PN18.

 27   PN22.

 28   PN25-32.

 29   PN38/

 30   PN46.

 31   PN56.

 32   Sayer v Melsteel [2011] FWAFB 7498.

 33   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

 34   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.

 35   Id.

 36   Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].

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

 38   Previsic v Australian Quarantine Inspection Services Print Q3730.

 39   (2000) 98 IR 137.

 40   Ibid at 151.

 41   RMIT v Asher (2010) 194 IR 1, 14-15.

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

 43   [2010] FWAFB 8753.

 44   Ibid at [26].

 45   [2013] FWCFB 431.

 46   (1998) 88 IR 21.

 47   Print S5109.

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

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