| [2019] FWC 1282 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Cathy (Yaqin) Chen
v
TIOBE Pty Ltd T/A TIOBE
(U2018/2693)
COMMISSIONER BISSETT |
MELBOURNE, 20 MARCH 2019 |
Application for an unfair dismissal remedy – conversations secretly recorded - dismissal unjust and unreasonable – applicant unfairly dismissed – remedy - compensation ordered.
[1] Ms Cathy (Yaqin) Chen was employed as a Consultant by TIOBE Pty Ltd T/A TIOBE (TIOBE). She provided professional services as a Business Analyst/IBM Unica Solution Specialist to clients of TIOBE.
[2] Ms Chen commenced her employment with TIOBE on or about 12 March 2013. Her employment was terminated with notice on 9 February 2018 and she finished employment on or about 12 March 2018. At the time her employment was terminated Ms Chen had ended a 14 month assignment with API (Priceline).
[3] This matter was first heard by me on 20 June 2018 (first hearing) with a decision 1 and order2 issued on 19 July 2018. That decision was subsequently overturned on appeal3 and the file remitted to me to re-hear. Prior to the re-hearing and following a Mention in relation to the application the parties agreed that all evidence, submissions and transcript of proceedings arising from the first hearing could be relied on unless either party advised otherwise. No advice was received that indicated the parties no longer wished to rely on any of the material arising from the first hearing. I have therefore taken that material into account in conjunction with further evidence filed for these proceedings.
[4] At the hearing of this application I granted permission to both Ms Chen and TIOBE to be represented by a lawyer or paid agent having been satisfied that neither party could represent itself effectively.
[5] Evidence was given in proceedings by Ms Chen and Mr Alex Malano, Ms Chen’s husband, on behalf of Ms Chen. Mr Keira Czarnota, Managing Director of TIOBE and Mr Kevin Yang gave evidence for TIOBE. Whilst a number of other statements were filed by TIOBE, none of those people were called to give evidence.
[6] Following hearing from the parties I determined that the matter should proceed by way of hearing.
[7] I am satisfied that Ms Chen is protected from unfair dismissal and her dismissal was not a result of redundancy.
[8] It was put and accepted that TIOBE is a small business as defined by the Fair Work Act 2009 (FW Act).
[9] Section 385 of the FW Act states as follows:
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.
[10] Section 388 of the FW Act states that if, immediately before dismissal or at the time the employee was given notice of dismissal (whichever is earlier), the person’s employer was a small business and the employer complied with the Small Business Fair Dismissal Code (Code) then the person’s dismissal was consistent with the Code.
[11] Section 396 of the FW Act requires that whether the dismissal was consistent with the Code or whether it was a genuine redundancy are matters that must be considered prior to a consideration of the merits of an application.
[12] I am satisfied Ms Chen has been dismissed.
[13] The Code states 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.
[14] The first matter to be determined therefore is if TIOBE complied with the Code in relation to the dismissal of Ms Chen.
[15] TIOBE submits that the conduct of Ms Chen with respect to a post on Slack (an internal TIOBE electronic bulletin board) was conduct which caused Mr Czarnota to believe, on reasonable grounds, that the conduct was sufficiently serious so as to justify immediate dismissal. 4
[16] It is not disputed that the conduct on which Mr Czarnota relies upon occurred on 20 December 2017, that Ms Chen proceeded on leave on 22 December 2017 returning to work in late January 2018 and that she was given notice of the termination of her employment on 9 February 2018. Ms Chen worked out a four week notice period with her last day being 12 March 2018.
[17] In TIOBE Pty Ltd T/A TIOBE v Cathy (Yaqin) Chen 5 (TIOBE) the Full Bench of the Fair Work Commission (Commission) considered the decision in Jeremy Ryman v Thrash Pty Ltd t/as Wisharts Automotive Services6 (Ryman) and said:
[30] The first issue that fell for determination in the subsequent appeal was whether Mr Ryman’s dismissal was of a type to which the “Summary Dismissal” section of the Code applied. At the outset the Full Bench observed that ‘this issue is not easy to resolve because the Code generally, and this section of the Code in particular, is very poorly drafted’. After detailed consideration of the legislative provisions and their context the Full Bench concluded that the “Summary Dismissal” section of the Code applies to dismissals without notice on the ground of serious misconduct as defined in regulation 1.07. The Full Bench then concluded:
[39] To be clear, nothing stated above is to be taken as suggesting that in relation to such a dismissal it is necessary for the Commission to be satisfied that the serious misconduct which is the basis for the dismissal actually occurred in order for the dismissal not to be unfair. As was explained in Pinawin T/A RoseVi.Hair.Face.Body v Domingo:
“[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.”
[40] Whether the employer had “reasonable grounds” for the relevant belief is of course to be determined objectively.
[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:
(1) If a small business employer has dismissed an employee without notice - that is, with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.
(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.
[42] In this case, Mr Ryman’s dismissal occurred with immediate effect - that is, without the provision of any actual notice - on the ground of serious misconduct. The fact that he was paid an amount said to be in lieu of notice, or that the dismissal occurred some days after the conduct to which it related, does not alter the position in this respect. His dismissal therefore fell to be considered under the “Summary dismissal” section of the Code in accordance with the Pinawin principles. There was no error on the part of the Commissioner on this issue.
[31] The decision in Ryman was applied in Grandbridge Limited v Mrs Diane Wiburd 7, in which the Full Bench said:
[14] ...The proper inquiry raised by the Code is relevantly, whether at the time of the dismissal the employer genuinely believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. The Code focusses attention on the employer’s belief which must be based on reasonable grounds, not on whether the employee’s conduct as a matter of fact and law justified immediate dismissal.
[underlining added, endnotes deleted]
[18] I am therefore satisfied that the first inquiry is whether Ms Chen was immediately dismissed as set out in Ryman and then, if she was, whether objectively considered, TIOBE had reasonable grounds to conclude that the conduct of Ms Chen was sufficiently serious to justify immediate dismissal.
[19] In Ryman the Full Bench said that:
• a dismissal accompanied by payment in lieu of notice, as well as a summary dismissal, is usually regarded as a dismissal without notice; 8
• it is unclear if a dismissal without warning was intended to mean something different from dismissal without notice although if the warning is that dismissal is going to occur sometime in the future then they are probably the same thing; 9
• an immediate dismissal is one that takes effect immediately. 10
[20] Ms Chen was advised on 9 February 2018 that her employment had been terminated. She then continued to work for TIOBE through her notice period until 12 March 2018 when her employment ended.
[21] It is to be observed that:
• Ms Chen was not subject to immediate dismissal on 9 February 2018 and her dismissal did not take effect until four weeks later on 12 March 2018;
• Ms Chen was not dismissed without notice as she did not receive a payment in lieu of notice (she worked out her notice period) and was not summarily dismissed; and
• To the extent that a dismissal without warning means the same as dismissal without notice Ms Chen was not dismissed without warning.
[22] On the basis of the authority of Ryman as cited in TIOBE it is not possible to conclude that Ms Chen was dismissed without notice, immediately or summarily.
[23] Ms Chen was given notice of the termination of her employment on 9 February 2018 when she met with Mr Czarnota. She was advised that API did not want her on that assignment any longer and that her employment would end when her placement with API concluded. Ms Chen’s employment subsequently ended on 12 March 2018. She was, in effect, given four weeks’ notice of the termination of her employment. She was not dismissed without notice or warning.
[24] I accept that on 22 December 2017, two working days after the Slack post, Ms Chen (and indeed Mr Czarnota) proceeded on leave. The lack of action to dismiss Ms Chen between 22 December 2017 and late January 2018 when both had returned to work is explained. However that, after her return to work Mr Czarnota advised Ms Chen her employment would end after the end of her period at API does not support a conclusion that her conduct was sufficiently serious to justify immediate dismissal. This is supported by the undisputed fact that Ms Chen worked for a further four weeks.
[25] Ms Chen’s circumstances are readily distinguishable from those of Mr Ryman as set out in the Full Bench decision in Ryman in that he was advised that his employment was terminated on the first day he attended for work after the incident that led to his dismissal. That is not the case here.
[26] Given my conclusion that Ms Chen’s dismissal does not fall with the meaning of “Summary Dismissal” as set out in the Code it is not necessary to determine if Mr Czarnota reached his conclusion that the conduct was sufficiently serious to justify “summary dismissal” on reasonable grounds.
[27] For the reasons that follow I have considered in detail below whether the conduct of Ms Chen in relation to the Slack post provided a valid reason for her dismissal. A consideration of the facts as I have found them (putting aside a finding as to whether or not the conduct actually occurred) would, in any event, lead me to conclude that Mr Czarnota did not have reasonable grounds, objectively considered, to believe that Ms Chen had engaged in conduct that would justify immediate dismissal or dismissal without notice or warning.
[28] I reach this conclusion because Mr Czarnota took no action to indicate that he held Ms Chen responsible for the Slack post. Mr Czarnota responded to the Slack post by texting and phoning Mr Malano (Ms Chen’s husband). In a conversation with Ms Chen on 12 February 2018 Mr Czarnota held Mr Malano accountable for the Slack post and subsequent exchange. Whilst Mr Czarnota might have considered Mr Malano’s actions to be serious there is no indication that, at the time, he considered Ms Chen accountable for the actions of Mr Malano. Even if Mr Czarnota did consider Ms Chen responsible for the actions of her husband, it is difficult to see how objectively considered that could be a reasonable belief given that they are two, distinguishable people.
[29] TIOBE submits that Ms Chen’s work performance and conduct while working with TIOBE’s client (API) was such to justify her dismissal.
[30] The evidence before the Commission suggests that there were two matters associated with Ms Chen’s employment with TIOBE. The first was her working relationship with Mr Kevin Yang and the second was her work performance.
[31] Ms Chen, Mr Yang and Mr Czarnota gave evidence in relation to conduct and performance matters over the 12 month period prior to the dismissal of Ms Chen.
Mr Czarnota
[32] Mr Czarnota gave evidence that Ms Chen commenced working on the API account in late 2016 when Ms Galina McBride, another TIOBE consultant who was working there, moved on to another client. Mr Yang commenced on the account sometime in 2016.
[33] Mr Czarnota said that in July 2017 he received a call from Ms Felicity McIntosh, the main contact point for TIOBE at API who said that Ms Chen and Mr Yang had been “screaming and shouting” at each other on API’s premises. As a result Mr Czarnota arranged a meeting with Ms Chen and Mr Yang. He says that Ms McBride also attended the meeting. Mr Czarnota warned Ms Chen and Mr Yang that their conduct was not appropriate and that if happened again both of their positions at TIOBE would be terminated.
[34] Mr Czarnota said that after this meeting he and Ms McBride spoke to API and arranged for “stand-up meetings” to occur between API staff and Ms Chen each day so that Ms Chen could understand API’s needs and she could explain what she needed of them. 11 The stand-up meetings would also “assist Cathy and Kevin to manage the expectations of the relationship with API.”12 Mr Czarnota’s oral evidence is that stand-up meetings were introduced after an audit report13 was completed in August 2017 by Ms McBride.
[35] Mr Czarnota agreed that he did not attend any of the stand-up meetings or see minutes of those meetings. 14
[36] Mr Czarnota gave evidence that in the six months or so prior to the dismissal of Ms Chen he spoke with her a number of times about her work performance although he could not identify when he had done so. He also spoke to her about not working on Sundays but she continued to do so. 15
[37] Mr Czarnota said that API staff spoke to him about Ms Chen’s work performance and he had to remove her from that project at their request. 16
[38] Mr Czarnota said he met with Ms Chen on 9 February 2018 and advised her that API did not want her working on the site anymore. He could not afford to have her “on the bench” (i.e. not placed with a client) so her employment would end at the completion of her engagement with API. He arranged for Ms Chen to meet with Ms McIntosh the following Monday, 12 February 2018.
[39] On 12 February 2018 Mr Czarnota met with Ms Chen and Ms McIntosh. Mr Czarnota said that Ms McIntosh spoke to Ms Chen about the need to improve on accepting feedback, that API were paying TIOBE and it was expected that Ms Chen would be on site. Mr Czarnota said that “Felicity did not want to go into a lot of detail of the issues API had had with Cathy’s performance” but that “Felicity had told me separately that API did not want Cathy to continue because it was not happy with Cathy’s performance.” 17
[40] Mr Czarnota found after the event that Ms Chen had taped the meeting of 12 February 2018 without his or Ms McIntosh’s knowledge. He gave evidence that such an act could lead to the end of the contract with API. Mr Czarnota provided a copy of the transcript of that recording. 18
Ms Chen
[41] Ms Chen’s evidence is that in July 2017 there was a meeting between Mr Czarnota, Mr Yang and herself about the ongoing relationship between her and Mr Yang. She says that at that meeting Mr Czarnota told her and Mr Yang that if the relationship did not improve between them one or both of them would have to leave.
[42] Ms Chen said that Ms McBride did not attend this meeting in July 2017 and the audit report that Mr Czarnota refers to did not arise from this meeting but from a critical incident in the project. Ms Chen said that the stand-up meetings were introduced following the critical incident and audit report. 19 These meetings were attended by her, Mr Yang and members of the API team. Sometimes Ms McIntosh attended and sometimes not. These meetings started out daily and then twice weekly. Ms Chen said that the stand-up meetings had nothing to do with her relationship with Mr Yang or her work performance but were to ensure the whole project team “works on track”.20
[43] Ms Chen gave evidence that she did not have a view that she could not work with Mr Yang nor did she stop listening to him although there were certain occasions when she did not listen to him. She said that 90% of the time they just discussed how to get things done but occasionally it got emotional. 21
[44] Ms Chen agreed that she recorded the meeting of 12 February 2019 with Mr Czarnota and Ms McIntosh and that she did not tell them she was doing so. She said that she recorded it for her own purposes, she was trying to process a lot of information and she wanted to get a clear understanding of what was happening. 22 She agreed that such a recording was deceitful and not honest or trustworthy23.
[45] Ms Chen disputed the evidence of Mr Yang that she met his suggestions with aggression, that she raised her voice at him or that she slammed a drink on to the table.
[46] Ms Chen also disputed Mr Yang’s evidence that automation on the project should have meant that she no longer needed to come into work on Sunday’s to launch campaigns. Ms Chen said that the automation solution introduced in September 2018 meant that approximately 95% of campaigns were launched automatically but some still required attendance to launch.
[47] As to her hours of work Ms Chen said that she regularly arrived at work before 9.00 am, there were times she did not have lunch and she therefore left work before 5.00 pm. She said she did not regularly stop to eat lunch at her desk and then go out for a long break although agreed she did sometimes go out to refresh. She disputed Mr Yang’s claims about her attendance and said that he often took long lunch breaks to go to the gym.
[48] Ms Chen said that she could not recall if she had made the error that led to an email being sent multiple times to customers although she might have done so. She did not dispute that this was the “fix” that Mr Yang had put in place.
[49] Ms Chen agreed that she did make some mistakes. 24
Mr Kevin Yang
[50] Mr Yang gave evidence that the “fix” he referred to in his written statement in relation to the multiple emails issue did not appear in the list of issues of the August audit report 25 either because he and Ms Chen, when workshopping the issues for the report,26 forgot it or excluded it purposefully.
[51] Mr Yang agreed that the August audit report gave a “pat on the back” to him and Ms Chen. Further, he agreed that it was the only audit undertaken and his written statement that suggested an audit in February 2017 may have been a poor choice of words on his part. 27
[52] Mr Yang agreed that the complaint of API in July 2017 was not just about Ms Chen but was about how he and Ms Chen related to each other. He agreed that he and Ms Chen were warned by Mr Czarnota but could not remember if it occurred in July or August 2017. 28 He said that following a meeting with Mr Czarnota things improved between him and Ms Chen.29 He said that things also improved in relation to the quality of the work.30
[53] Mr Yang agreed that there were campaigns that had to be launched manually and that some of these ran on Sundays and some on weekdays but that API set the schedule. 31
[54] Mr Yang agreed that he attended the stand-up meetings with Ms Chen and colleagues from API. He said that the meetings were introduced for the team to discuss on-going work and issues. 32
[55] As to Ms Chen’s work attendance Mr Yang clarified that it was only during a particular week that Ms Chen ate lunch at her desk and then left the office for 90 minutes. He agreed that he did go to gym at lunch times, not for two hours but for more than an hour. 33 He also agreed that Ms Chen would start early before he arrived at work on most occasions.34
[56] Mr Yang maintained that Ms Chen did slam her drink down on the table but agreed that it may not have been deliberate. 35
[57] Mr Yang said that he posted a message on Slack on 20 December 2017 about Ms Chen’s working hours as he wanted to publicly out her behaviour. He was not asked to withdraw the post or apologise for it although Mr Czarnota was not pleased with it. 36
[58] I am not satisfied that Ms Chen was given a reason as to why she was at risk of dismissal until the time she was advised (on 9 February 2018) that her employment was terminated.
[59] It must be that the reason for dismissal required to be given under the Code must bear some relationship to the ultimate grounds for dismissal. The evidence discloses that the only time Ms Chen was told her employment was at risk was in the meeting held in July 2017 in relation to her working relationship with Mr Yang and her work performance.
[60] Mr Czarnota said that the meeting in July 2017 dealt with work performance, and Mr Yang concurred with this in his evidence. Whilst Ms Chen disagreed I am satisfied on the weight of the evidence that the performance of Ms Chen and Mr Yang was also discussed at this time. I do not consider it necessary to determine if Ms McBride was present at this meeting or if the August audit arose from this meeting or another meeting soon thereafter.
[61] In circumstances where Mr Czarnota had a discussion with Ms Chen and Mr Yang about their working relationship in the workplace it is reasonable to infer that this would have also gone to how that relationship was affecting the work performance and standing of TIOBE with its client. I am therefore satisfied that Ms Chen’s (and Mr Yang’s) work performance was discussed at this meeting. The evidence discloses however that Mr Chen and Mr Yang were told that their relationship at work had to improve or they may face dismissal for this reason.
[62] I am also satisfied that the working relationship Ms Chen had with Mr Yang was the only reason Ms Chen was given as to why she was at risk of dismissal and that this reason was given to her in July or August 2017, some six to seven months prior to her dismissal
Yelling between Ms Chen and Mr Yang
[63] The conduct of Ms Chen yelling at Mr Yang in front of API staff was a valid reason as to why Ms Chen was at risk of being dismissed. Unprofessional conduct such as that displayed by Ms Chen, particularly in front of a client that is paying for the employer’s services, provides a defensible reason for termination.
[64] I am satisfied that at the meeting of July 2017 37 Ms Chen was verbally warned of such conduct and the consequences of it continuing and was given an opportunity to improve.
[65] I am satisfied, on the basis of the evidence of Mr Yang and Ms Chen that their working relationship improved after the meeting with Mr Czarnota in July 2017. The extent to which the relationship again deteriorated is unclear. Mr Yang gave oral evidence that after the July 2017 meeting the relationship between he and Ms Chen improved although his written statement appears to contradict this with a suggestion of some tension between he and Ms Chen when he was working with Digital Alchemy on a solution to automation and again around 13 December 2017.
[66] Whilst the Slack post of 20 December 2017 suggests the relationship between Ms Chen and Mr Yang was not at its best, that exchange occurred within a closed group of four or five TIOBE staff and the evidence suggests that Mr Yang is the one who instigated the exchange.
[67] To the extent the warning of July 2017 was relied on as a reason to dismiss Ms Chen, I am not satisfied that the conduct of which Ms Chen was warned was repeated by her such that a reliance on her conduct of July or August 2017 provides a valid reason for her dismissal under the Code.
Performance
[68] I am satisfied that at the meeting of July 2017 Ms Chen was warned that her performance needed to improve. The evidence does not support a conclusion that she was told that if this did not occur then her employment was at risk. However, the evidence before me does not clarify exactly which parts of her performance were problematic or to what standard she was expected to improve. I would note that there does not appear to have been any offers of training or suggestions for training or development that Ms Chen might undertake to assist her.
[69] I am satisfied however that the August 2017 audit report along with the regular stand-up meetings appears to have resolved the performance issues, with both Ms Chen and Mr Yang lauded in the audit report.
[70] Regardless, the evidence does not support a finding that Ms Chen’s performance at API was a reason for her dismissal. Mr Czarnota’s evidence that Ms McIntosh “did not want to go into a lot of detail” with Ms Chen on 12 February 2018 of the problems API had with her performance and that Ms McIntosh had told him separately that API was not happy with Ms Chen’s performance is not supported by any evidence beyond his statement. Correspondence from API to Mr Czarnota from Mr Mark Plaisted of API dated 25 May 2018 38 confirmed that the decision to terminate Ms Chen was one for TIOBE and had nothing to do with API. That email did not support Mr Czarnota’s claim that API had raised performance issues about Ms Chen and unsupported evidence as to what Ms McIntosh might have said to Mr Czarnota do not support a conclusion that Ms Chen’s performance at API was an issue for API.
[71] To the extent that the reason for dismissal related to Ms Chen working on Sundays, the evidence does not support a finding that Ms Chen was told she was not to do this. Further, even if she was it is not clear how Ms Chen was to reconcile this direction with the requirement of API for some campaigns to be launched on a Sunday when this required a manual launch. This reason is not a valid reason based on Ms Chen’s conduct or performance.
[72] On the basis of my findings I am not satisfied that Ms Chen’s dismissal is consistent with the “Other Dismissal” provisions of the Code.
[73] Ms Chen’s dismissal is therefore not consistent with the Code.
[74] It was suggested in the submissions of TIOBE that Ms Chen had been dismissed because there was no longer any work for her to do and TIOBE could not have her sitting on the bench.
[75] Following the conclusion of the hearing I sought further submissions from TIOBE as to whether it said that Ms Chen’s dismissal was a case of genuine redundancy as defined in s.389 of the FW Act. I advised Ms Chen’s representative that, should TIOBE make a claim of genuine redundancy Ms Chen would be given the opportunity to make further submissions directed to that matter.
[76] In its reply to my inquiry TIOBE submitted that:
• It did not assert that Ms Chen’s dismissal was a genuine redundancy;
• It did assert that the first limb of s.389(1) of the FW Act (that TIOBE no longer needed the job done by Ms Chen performed by anyone) could have applied but accepted that the second limb of s.389(1) of the FW Act had not been met in that it had not complied fully with the obligations under the relevant award.
[77] For these reasons I am satisfied that the dismissal of Ms Chen was not a genuine redundancy.
[78] I have found that the dismissal of Ms Chen was not consistent with the Code and it was not a genuine redundancy. There is no dispute however, that Ms Chen was dismissed.
[79] It is therefore necessary to determine if the dismissal was harsh, unjust and unreasonable.
[80] Section 387 of the FW Act states as follows:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
[81] I have considered each of these matters.
Section 387(a) - a valid reason for dismissal related to capacity or conduct
[82] For a reason for dismissal to be a valid reason it must be “sound, defensible or well founded”. 39
[83] With respect to matters involving conduct it is necessary for the Commission to determine if, based on the evidence before it, that the conduct did in fact occur.
[84] TIOBE relies on three matters 40 that it says form a valid reason or reasons for the dismissal of Ms Chen. These are:
• her actions in relation to the Slack message;
• her conduct and performance whilst at API;
• that it had no capacity to continue to employ Ms Chen when she had no assignment.
Does the conduct in relation to the Slack message provide a valid reason for the dismissal of Ms Chen?
[85] The circumstances in relation to the posting on Slack are as follows.
[86] On 20 December 2017 at 5.35 pm Mr Kevin Yang, Ms Chen’s colleague working with her at API, posted a message on Slack directed to Ms Chen which said:
Hi @cathyc, a couple of things, some which we discussed during our catch-up this afternoon. I would not raise workload issues to Felicity, if you have the luxury of leaving early (Ie. Before 5pm). Such as with yesterday, today and last Thursday. From a perception point of view, this isn’t a good look.
Secondly, I would not be leaving before 5pm, if there are still quite a lot of campaigns in development… 41 [sic]
[87] Ms Chen responded at 5.43 pm that day and said:
@kevinyang I need make clear I have not leave EARLY! I came in office before 8am today and no lunch break…@kc I will need to brief you more. 42 [sic]
[88] The messages could be seen by anyone from TIOBE involved in the API project – apparently four to five people, including Mr Czarnota. The reference to “@kc” is to Mr Czarnota.
[89] Mr Alex Malano is Ms Chen’s husband and, along with Ms Chen, an investor in TIOBE.
[90] Mr Malano’s evidence is that on 20 December 2017, over dinner, Ms Chen mentioned to him the comments made by Mr Yang earlier in the evening on Slack. Mr Malano said that he saw Ms Chen get “quite upset” after what had been a busy day. 43 He considered the comments of Mr Yang “untrue and unfair” and that they had defamed her “in front of the entire team”. His evidence is that he “got emotional” and “picked up [Ms Chen’s] phone while she was away from the dinner table”.44 He then posted the following message on Slack at 6.38 pm:
@kevinyang This is Alex. Cathy is doing far more hours than you give her credit for and it is impacting on her family life… You are unprofessional and should look at yourself first before commenting on others. The fact that Keira [Mr Czarnota] is not addressing this issue after this long shows a complete disregard for his employees. 45
[91] A Ms Karen Buxton replied at 6.41 pm suggesting it was matter that should be taken offline.
[92] Mr Malano said he did not tell Ms Chen before he made the post. 46
[93] At 6.41 pm Mr Czarnota sent a text message to Mr Malano’s phone which read:
Hey Alex. You need to take the post down. Its ridiculous.
[94] It is not disputed that the post made by Mr Malano was not taken down.
[95] Mr Malano responded by text to Mr Czarnota at 6.43 pm as follows:
No. I’m sorry but you don’t know what i have to deal with on a daily basis with Cathy. And I blame you and API for her miscarriage.
[96] Ms Chen had a miscarriage in mid-2017.
[97] At 7.26 pm Mr Czarnota posted a message on Slack that read:
Pretty sure this is an internal channel. Always happy to take your call if you have concerns Alex. I was of the understanding though that the couple of very pointed conversations with Cathy and Kevin had made my position very clear. Happy to discuss further offline. Merry Christmas everyone.
[98] That evening or the following day Mr Czarnota and Mr Malano had a telephone conversation.
[99] Mr Czarnota agreed in his evidence that his response on Slack was directed at Mr Malano, that he texted Mr Malano later that night and discussed the matter with him by telephone the next day. 47 Mr Czarnota said he did not know who made the post but and does not know if Mr Malano was not sitting next to Ms Chen at the time and said to her “I’ll sort this out for you.”48
[100] Mr Czarnota agreed that if he thought Ms Chen had made the post he could have contacted her but he did not. Mr Czarnota said that this “doesn’t mean that I didn’t think it was her though…[b]ecause it was going to her mobile phone on her private work channel.” 49
[101] Mr Czarnota said he had no telephone discussion with Ms Chen about the Slack post as she “went on holiday...the following day” although agrees that he sent Ms Chen a text message the next day (21 December 2019) in which he indicated he was “downstairs” (from her office) with her Christmas card. 50
[102] Ms Chen and Mr Czarnota then both went on leave over the Christmas/New Year period.
[103] Mr Czarnota next contacted Ms Chen on 7 February 2018 via text message 51 in which he asked Ms Chen to meet with him the following day.
[104] During cross-examination the following exchange occurred with Mr Czarnota:
Then the next issue is your text message saying that you wanted to catch up for a brief chat the next day…and that was where you informed the applicant that she was to be terminated?---Well, I didn't think it was appropriate to tell her via Slack that we were being extended but the client had asked for her to be removed from the account. I wanted to do that face-to-face.
So there's no suggestion in any of these exchanges until at least the meeting on 8 February that she was held in any way responsible for what her husband had done putting that message on Slack; that's correct, isn't it?---No, that's incorrect, because I actually spoke to her husband about the matter the day after, Garry.
Yes. You know that her husband is a different person to her?---I do.
Yes. Yes, and you didn't say to her husband that you held Cathy responsible for the Slack message, did you?---I might not have said that directly, but it was inferred that I held them both responsible for it.
The part of the decision - is it you're saying that you hold her responsible for the Slack message?---Sorry, part of the decision to terminate her?
You say that you held Ms Chen responsible for the message?---Yes.
And you still hold to that, do you?---I can't prove if she was responsible or not, but I believe that she was.
In your new statement R5 I can't find a reference, but I may be mistaken, and I want to take you to parts from that, but I can't find the reference to you still finding her responsible for the Slack message?---I don't if I specifically say that in there, Mr Dircks. 52
[105] Mr Czarnota’s says that he had reasonable grounds to believe that Ms Chen was responsible for the Slack message because:
• the messages were on a private channel coming from her mobile phone; and
• he did not know if Ms Chen was not sitting with Mr Malano when the messages from “Alex” were posted.
[106] Despite Mr Czarnota’s witness testimony to the contrary the documentary evidence demonstrates that, following the post made by Mr Malano at 6.38 pm on 20 December 2017, Mr Czarnota responded to Mr Malano three minutes later by text message to Mr Malano’s mobile phone to which Mr Malano replied two minutes later. It was not until approximately 50 minutes after the posting by Mr Malano on Slack that Mr Czarnota posted to that site, directed to Mr Malano, suggesting he was “always happy to take your call if you have concerns Alex.”
[107] The next day Mr Czarnota had a telephone discussion with Mr Malano about the post. When he had the opportunity to discuss the matter with Ms Chen the following day he did not do so, rather he left her Christmas card and hamper with Mr Yang to give to Ms Chen.
[108] Mr Czarnota’s actions all point to a reasonable conclusion that he considered Mr Malano responsible for the post. He texted Mr Malano, directed a post on Slack to Mr Malano and the following day spoke to Mr Malano by telephone about the matter.
[109] Mr Czarnota had a meeting with Ms Chen and Ms McIntosh on 12 February 2019 that Ms Chen taped without their knowledge. Mr Czarnota’s comments with respect to the Slack post support a conclusion that he held Mr Malano responsible. Mr Czarnota said of the post:
KEIRA I was absolutely livid. I called and absolutely lost my shit at Alex because, umm, the stuff that he said both on the [Slack] channel and to me was completely unacceptable. Completely unacceptable…
…when Alex then says stuff to me that you’re miscarriage is my fault and that it’s because you’re doing all this extra work, like working on Sundays…
KEIRA If you want to look at wording Cathy, if you want to look at wording. Just look at that. Look at Alex has said to me there.
CHEN That’s a personal message between you and Alex. If, if what Alex doing, he’s just trying to defend, right. 53
[110] Mr Czarnota had clear and ample opportunity on 21 or 22 December 2017 and again on 9 or 12 February 2018 to ensure that Ms Chen knew he held her accountable for the Slack message by Mr Malano and what followed but he does nothing but lay the matter squarely at the feet of Mr Malano.
[111] The evidence does not support a finding that Mr Czarnota at any time suggested to Ms Chen that she was responsible for the content or even the transmission of the Slack message. To hold her responsible for actions of her husband or to suggest that a conversation with Mr Malano is the same as a conversation with Ms Chen is an outdated view of the relationship between married people.
[112] Mr Czarnota further relies on a comment he says was made by Ms Chen in reference to the Slack post during the meeting of 12 February 2018. 54 A review of the transcript of the conversation on 12 February 2019 reveals that this comment55 was not made about the Slack post but was part of a broader comment made by Ms Chen in reply to Mr Czarnota’s query as to how Ms Chen and Mr Malano wanted to handle the separation from employment and shareholding they had in TIOBE. In isolation and put as Mr Czarnota did it might add weight to the claim, but the evidence in its totality does not disclose what Mr Czarnota sought to demonstrate.
[113] I am satisfied that Mr Malano was wholly responsible for the sending of the Slack message. He was a credible witness, he was honest and forthright in his evidence.
[114] At worst Ms Chen might be chastised for not keeping a work provided telephone or message service in a secure manner. I would observe however that the more serious exchange occurred between Mr Malano and Mr Czarnota over text and not on Slack. Ms Chen certainly cannot be responsible for that exchange.
[115] To the extent that the Slack post is held as a reason for dismissal of Ms Chen I am not satisfied that the conduct by her occurred or that she encouraged Mr Malano to make the post. It therefore cannot be a valid reason for her dismissal.
Conduct and performance at API
[116] The conduct complained of at API related to the working relationship between Ms Chen and Mr Yang, the breakdown in that relationship and the subsequent outbursts in front of the client.
[117] Whilst I am satisfied that the conduct did occur in or about July of 2017 and I am satisfied that to the extent there were any on-going tensions between Ms Chen and Mr Yang it appears that this was kept out of the eye of API. Knowledge of any deterioration of the relationship in late December 2017 as evidence by Mr Yang’s Slack post seems to been confined to four or five employees of TIOBE.
[118] I am not satisfied that any breakdown in the working relationship between Ms Chen and Mr Yang in late 2017 provides a sound basis for the dismissal of Ms Chen. Even if it does it is not explained why her employment, and not that of Mr Yang, should be terminated.
[119] The performance issues with respect to Ms Chen have not been articulated beyond her attending work at times on a Sunday when she was asked not to. To the extent this is relied on I do not consider it a sound reason for dismissal.
No further work
[120] TIOBE do not elaborate as to how the lack of available work should be considered a valid reason for dismissal related to Ms Chen’s “capacity or conduct (including its effect on the safety and welfare of other employees).” 56
[121] TIOBE does not say the dismissal was a genuine redundancy (which might lead to a finding that the dismissal was not unfair) but appears to say Ms Chen was redundant or excess to TIOBE’s needs and that this is a valid reason, within the meaning of the FW Act, for her dismissal. On this basis it seeks a finding that the dismissal was not unfair.
[122] While being excess may provide some justification for TIOBE to have taken the action it did, such a reason seems to me to fall short of the requirements of the FW Act in that it does not relate to Ms Chen’s capacity or conduct beyond the consideration of the Slack post and her performance already considered. Rather it appears a business decision of TIOBE.
[123] For this reason I do not consider it provides a valid reason for the dismissal of Ms Chen.
[124] I am however satisfied that it is a matter to be considered as necessary below.
Section 387(b) - whether the person was advised of that reason for the dismissal
[125] The reference to “that reason” can only be in reference to the reason in paragraph (a) above – that is, the valid reason for dismissal. Given that I have found no valid reason for dismissal Ms Chen cannot have been advised of a valid reason.
[126] In his witness statement Mr Czarnota said that on 9 February 2018 he met with Ms Chen and advised her that API did not want her on site anymore and TIOBE could not afford to have her on the bench. He told Ms Chen “that her employment with TIOBE would end when her engagement at API ended.” 57 It is not apparent that any other reason was provided on 9 February 2018 for the dismissal.
Section 387(c) - whether the person was given an opportunity to respond
[127] If I am wrong with respect to paragraph (b) above, it is clear from the evidence that, at the time of advising Ms Chen of the reason for her dismissal, Mr Czarnota had already decided to dismiss her such that she was not given a real opportunity to respond to that reason. By the time the second meeting was held with Ms Chen on 12 February 2019 she had already been advised of her dismissal such that any opportunity to respond is meaningless.
Section 387(d) - unreasonable refusal by the employer to allow the person to have a support person to assist at any discussions relating to dismissal
[128] There is no indication that Ms Chen was denied access to a support person.
Section 387(e) - warned of unsatisfactory performance
[129] TIOBE relies on unsatisfactory performance at API as one of the grounds for the dismissal of Ms Chen.
[130] Mr Czarnota gave evidence that he did not put any of his concerns about Ms Chen’s performance to her in writing but rather raised them with her over the six months prior to her dismissal.
[131] The evidence before me does not support a finding that the performance concerns of Ms Chen were clearly articulated to her by Mr Czarnota or that the standard expected of her was explained. I cannot conclude that Ms Chen was offered any training or support to assist her in improving in identified areas. While I appreciate that TIOBE provided $5,000 per year to employees for them to spend on professional development, without guidance on the areas of development to concentrate on it is possible that such opportunities were ill directed.
[132] The purpose in raising unsatisfactory performance issues with an employee is to ensure there is no misunderstanding in the performance standards required. As was said in Fastidia Pty Ltd v Goodwin 58, a mere exhortation to improve is not enough.59
Section 387(f) & (g) - the size of the employer’s business and access to human resource management specialist or expertise
[133] I am satisfied that TIOBE is a small business and that it has no access to human resource expertise and that this has had an impact on how it went about effecting the dismissal of Ms Chen.
[134] The evidence before me suggests that Mr Czarnota sought to develop a positive relationship with his employees. When an employee’s conduct or performance falls below that required it would appear that TIOBE does not have the tools to deal with the situation in a positive and structured manner. These are necessary tools for any business, regardless of size.
[135] I have taken the size of the business and its lack of access to appropriate expertise into account. It is not however a consideration that excuses all deficiencies in the process of TIOBE in this matter.
Section 387(h) - other matters
[136] Whilst Ms Chen says that she was not paid a $50,000 five year bonus owing to her, determination of this would involve me considering a range of matters not before the Commission including the policy surrounding such payment and whether, in fact, Ms Chen did qualify for the bonus. She submits that the loss of the bonus makes the dismissal harsh.
[137] I do not intend to decide this matter. If Ms Chen considers she has a contractual right to the bonus then that is a matter for her to pursue elsewhere.
[138] TIOBE says that it had no further work for Ms Chen and, for this reason, could not afford to have her sitting on the bench.
[139] Whilst I accept this was an important consideration for TIOBE I do not consider that it is enough to counter the findings as to the lack of a valid reason for her dismissal such that it would render her dismissal as fair. I have, however, further considered the lack of work available to Ms Chen below.
[140] I have not found a valid reason for the dismissal of Ms Chen. For that and the other reasons given above I am satisfied that the dismissal of Ms Chen was unjust and unreasonable.
[141] I am therefore satisfied that Ms Chen was unfairly dismissed.
[142] Ms Chen does not seek reinstatement. Rather she seeks compensation.
[143] I am satisfied that reinstatement is not appropriate in the circumstances. I shall therefore consider compensation.
[144] The basis of the determination of compensation is set out in s.392 of the FW Act. In the re-hearing of the matter TIOBE has put more extensive material before the Commission on the matter of compensation.
[145] Section 392 of the FW Act states as follows:
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.
[146] The parties have made quite divergent and competing submissions in relation to compensation.
Ms Chen
[147] Ms Chen submits that, had she not been dismissed she would have remained in employment with TIOBE for at least a further 12 months. She says that such a finding was made when her application was first heard and should not be disturbed now. In these circumstances she says she would have earned $140,000 (inclusive of superannuation).
[148] Ms Chen submits that she earned, from 8 May 2018 to 26 January 2019, $55,179.43 plus $5,242.04 in superannuation. Further, it can be assumed that Ms Chen would continue employment up until 28 February 2019 when her contract is due to expire.
[149] Ms Chen suggested that I could assume, on this basis, that in the 12 months from the time of her dismissal she would have earned $91,890.93 (which I take to be inclusive of superannuation). On this basis Ms Chen submits that her lost remuneration in relation to the period she would otherwise have remained at TIOBE is $48,109.07.
[150] It is not abundantly clear from the submissions for Ms Chen 60 and her detailed pay history since her dismissal61, how these figures were reached. I have, to the extent necessary re-calculated the loss below.
TIOBE
[151] Mr Czarnota says that if he had been aware that Ms Chen had secretly recorded the meeting with him and Ms McIntosh on 12 February 2018 or her meeting with Ms McIntosh on 27 February 2018 or when he became aware of such recording he would have taken action to terminate her employment immediately. Whilst TIOBE in its submissions acknowledges that this conduct of Ms Chen does not provide a valid reason for the notice of termination given on 9 February 2018, it would provide a reason for summary dismissal on 12 or 27 February 2018 62 or once it was known.
[152] It was submitted for TIOBE that I should therefore conclude that Ms Chen’s employment would not have extended beyond 12 February 2018. For this reason she has suffered no loss and no compensation should be payable as she was, at this time, working out her notice period.
[153] Should this submission not be accepted TIOBE submits that I should conclude that Ms Chen would not have remained in employment for any lengthy period of time. The uncontested evidence of Mr Yang is that Ms Chen indicated in around August 2017 that she was considering resigning from her position with TIOBE and that she had drafted a resignation letter to give to Mr Czarnota. Ultimately she changed her mind. 63 Further, TIOBE says that Ms Chen gave evidence that she did not want to “be on the bench. That's not something I’m willing to do, especially my concern once the contract between TIOBE and API finished…”64 For these reasons TIOBE says I can conclude that Ms Chen would have resigned her employment around or soon after 12 March 2018. At that time her placement with API would have concluded, TIOBE had no other assignment for her and she would have been placed “on the bench” where she did not wish to be.
[154] Alternatively, TIOBE says Ms Chen would not have remained employed for much longer as it had no work for her to do.
[155] TIOBE do not dispute that Ms Chen took steps from the time of her dismissal until early May 2018 to mitigate her losses. It submits that from 5 May 2018 Ms Chen had gained contract employment on a similar rate of pay to that she had enjoyed at TIOBE. Her annual rate of pay at TIOBE was $140,000 per year inclusive of superannuation and her rate in her new employment equates to $128,414.16 per year. TIOBE suggests therefore that any loss would be minimal.
[156] Ms Chen had worked for TIOBE for about five years (s.392(2)(b)).
[157] I do not accept that, had Ms Chen’s employment not been terminated (albeit with notice) on 9 February 2018, it would have been terminated on 12 February 2018 because she secretly taped a discussion with Mr Czarnota and Ms McIntosh or a later conversation with Ms McIntosh.
[158] Ms Chen gave evidence that she taped the conversations on 12 and 27 February 2018 because of the meeting on 9 February 2018 when Mr Czarnota advised her that her employment had been terminated. She said that English was not her first language, she was processing a lot of information and she wanted to be able to have a clear understanding of what was occurring. Had Mr Czarnota not taken the action he did on 9 February 2018 to dismiss Ms Chen there is no reason to assume she would have taped the meetings as she did. Ms Chen had engaged in numerous discussions with Mr Czarnota in the past and with Ms McIntosh but the evidence does not support a conclusion that she taped those conversations. The conclusion is open to me that she taped the conversations on 12 and 27 February 2018 because Mr Czarnota told her on 9 February 2018 that her employment was terminated at the end of her assignment with API.
[159] I am therefore satisfied that Ms Chen’s employment would have continued beyond 12 February (or 27 February) 2018.
[160] However, I am persuaded that Ms Chen would not have been content being benched by TIOBE – that is not having an active assignment beyond 12 March 2018. Ms Chen gave evidence that she did to want to be on the bench and that she was “not willing to be on the bench again.” 65
[161] I am satisfied on the basis of Ms McIntosh’s comments taped by Ms Chen that API had made it clear that they wanted Ms Chen to rotate off the assignment 66 such that, even if Mr Czarnota had not terminated her employment, she would have been moved off the API assignment by 12 March 2018. I am also satisfied that TIOBE did not have another assignment for Ms Chen and she would have been benched by Mr Czarnota for some period of time or TIOBE would have engaged in appropriate consultation with Ms Chen in relation to redundancy. In these circumstances and given Ms Chen’s evidence I am satisfied that Ms Chen would have resigned her employment with TIOBE within one week of the end of the API assignment and, in doing so, would have provided four weeks’ notice of her resignation.
[162] For these reasons I am satisfied that Ms Chen would have remained with TIOBE for no more than five weeks beyond the time her assignment with API concluded (that is, 12 March 2018).
[163] Ms Chen’s lost remuneration for this period would have been $13,461, inclusive of superannuation (s.392(2)(c)).
[164] Ms Chen had no earnings from 12 March 2018 (the date of her dismissal) until the end of her anticipated period of employment with TIOBE. Whilst Ms Chen gained employment it was not until 5 May 2018, some eight weeks after her dismissal and three weeks after I consider her employment would have ended had she not been dismissed. Applying the approach in Sprigg v Paul’s Licensed Festival Supermarket 67 and given that there are no contingencies to consider (Ms Chen was not incapacitated during the five week period) no deduction should be made from the amount of lost remuneration. For these reasons I am satisfied that Ms Chen’s lost remuneration is $13,461 inclusive of superannuation.
[165] The evidence demonstrates that Ms Chen went to great lengths to mitigate her loss. 68 She applied for a substantial number of jobs commencing whilst she was working out her notice period. Given these efforts I do not intend to make any reduction for any failure to attempt to mitigate her loss (s.392(2)(d)).
[166] Whilst I acknowledge Ms Chen’s earnings after post 5 May 2018 when she gained further employment this does not offset the loss she suffered from her dismissal identified above (s.392(2)(e) and (f)).
[167] Mr Czarnota gave uncontested evidence as to the financial state of TIOBE. He said that in the 2017/2018 financial year he had not taken a salary from the business as it was running at a loss. Further, he indicated that if a “large” compensation order was made ($50,000) it would result in the business being unviable. Mr Czarnota also gave evidence that TIOBE has a substantial debt to the ATO. 69
[168] Mr Czarnota provided the Commission with a profit and loss statement for TIOBE for the period 1 July 2017 to 28 February 2018. He says that the situation of TIOBE has not improved since that time. 70
[169] Ms Chen submitted that TIOBE has been able to pay back to her the money she lent to TIOBE at the rate of $10,000 per month and this demonstrates that it does have some capacity to pay.
[170] I accept that as at 28 February 2018 TIOBE was operating at a loss. However, the re-hearing of this application occurred on 6 February 2019, 11 months after the profit and loss statement’s effective date. No more up to date information was supplied save information on the debt owed to the ATO.
[171] On the basis of the evidence provided I am satisfied that if I made an order that $13,461 be paid in one instalment to Ms Chen it may affect the viability of the business (s.392(2)(a)). However, I have considered that TIOBE has successfully re-paid its loan debt to Ms Chen over a period of time. I am therefore not convinced that the amount I intend to order cannot be paid in instalments as a means of mitigating any risk. I have therefore taken this into account in the order I propose.
[172] I have not found that Ms Chen engaged in any misconduct. I have therefore not reduced the order for misconduct (s.392(3)).
[173] I have not included any component in the compensation for shock, humiliation or distress (s.392(4) and I am satisfied the amount ordered does not exceed the compensation cap (s.392(5)).
[174] In the circumstances I have decided to issue a draft order with this decision. The parties are asked to confer as to the final form of the order. If agreement on the final form of the order cannot be reached, each party is required to advise me of their preferred order with brief reasons as to why it should be preferred. Separate directions will be issued with respect to this aspect of the finalisation of the case.
[175] The draft order will be in the form that TIOBE is to pay an amount of $13,461 in three equal instalments of $4,547 on or before 18 April 2019, on or before 17 May 2019 and on or before 14 June 2019.
[176] The amounts paid are inclusive of any superannuation liability and should be taxed according to law.
COMMISSIONER
Appearances:
G. Dircks for Ms Chen.
J. Tracey, of counsel, for TIOBE Pty Ltd T/A TIOBE.
Hearing details:
2019.
Melbourne:
February 6.
Final written submissions:
Respondent: 5 March 2019.
Printed by authority of the Commonwealth Government Printer
<PR705349>
2 PR609148.
4 Transcript, 6 February 2019 at PN875.
8 Ibid, para [30].
9 Ibid, para [31].
10 Ibid, para [32].
11 Exhibit R5, para 72.
12 Ibid, paras 72.
13 Exhibit A3.
14 Transcript, 6 February 2019 PN803-PN804.
15 Transcript, 20 June 2018, PN361-362, PN382 .
16 Ibid, PN365, Exhibit R5 paragraph 88.
17 Exhibit R5, paragraph 95.
18 Ibid, attachment KC5.
19 Transcript, 6 February 2019 PN150.
20 Ibid, PN151.
21 Ibid, PN164.
22 Ibid, PN243.
23 Ibid, PN245, PN276.
24 Ibid,PN136, PN144.
25 Exhibit A3, appendix 1.
26 Transcript, 6 February 2019 PN524.
27 Ibid, PN554.
28 Ibid, PN565-PN566.
29 Ibid, PN576.
30 Ibid, PN582-PN584.
31 Ibid, PN586-PN587, PN590.
32 Ibid, PN646, PN648-PN649.
33 Ibid, PN599-PN600, PN602-PN603.
34 Ibid, PN604.
35 Ibid, PN564.
36 Ibid, PN620-PN621.
37 Whether the meeting was July or August 2017 does not affect my conclusions.
38 Email contained in TIOBE’s documents filed on 4 June 2018.
39 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at p. 373.
40 TIOBE no longer relies on the recording of the meeting of 12 February 2018 as it occurred post the dismissal of Ms Chen. See transcript 6 February 2019 PN910.
41 Exhibit A1, attachment CC10.
42 Ibid, attachment CC11.
43 Exhibit A5, paragraph 17.
44 Ibid, paragraphs 18-19.
45 Ibid, attachment AM2.
46 Transcript, 20 June 2018 PN280, PN284.
47 Transcript, 6 February 2019 PN732, PN734, PN736
48 Transcript, 6 February 2019 PN737.
49 Transcript, 6 February 2019 PN738-PN740.
50 Ibid, PN761, PN763-PN764. See also exhibit A1, attachmentCC18-1.
51 Exhibit A1, attachment CC18-2.
52 Transcript, 6 February 2019 PN776-PN783.
53 Exhibit R5, attachment KC-6.
54 Exhibit R5, paragraph 102.
55 Exhibit R5, attachment KC-5 page 22
56 Fair Work Act 2009 s.387(a).
57 Exhibit R5, paragraph 88.
58 Print S9280.
59 Ibid, para [44].
60 Transcript, 6 February 2019 PN864-PN867.
61 Exhibit A8.
62 Schwenke v Silcar Pty Ltd T/A Silcar Energy Solutions [2013] FWC 4513. Permission to appeal refused in Schwenke v Silcar Pty Ltd T/A Silcar Energy Solutions [2013] FWCFB 9842.
63 Exhibit R4, page 3.
64 Transcript, 6 February 2019 PN123.
65 Transcript, 6 February 2019 PN125.
66 I do note that Ms McIntosh did not say this was due to Ms Chen’s poor performance.
67 (1998) 88 IR 21.
68 Exhibit A7.
69 Exhibit R5, paragraphs 111-112.
70 Ibid attachment paragraph 113 and attachment KC-6.