DECISION

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

Kailun Lin
v
Yujie Liu T/A Jack's Noodle
(U2018/13023)

Application for an unfair dismissal remedy – small business employer – casual employee – whether protected from unfair dismissal – whether dismissed – found regular and systemic employment with expectation of ongoing employment – sufficient eligible service – dismissed at the initiative of the employer – whether consistent with the small business fair dismissal code – not dismissed on reasonably held views about conduct or performance but motivated by request to be paid in accordance with the relevant modern award – dismissal harsh, unjust and unreasonable – compensation appropriate – whether award rate to be used for purposes of compensation – order issued.

1. Background

[1] Ms Kailun Lin has made an unfair dismissal application against Mr Yujie Liu T/A Jack’s Noodle (also referred to as Jack’s Noodle or the employer) under s.394 of the Fair Work Act 2009 (the FW Act). Mr Liu has provided a comprehensive response disputing the application.

[2] Jack’s Noodle conducts a restaurant in the northern suburbs of Adelaide. It is a small business within the meaning of the FW Act. 1 Ms Lin worked as a waitress at Jack’s Noodle from 11 April 2017 until 27 November 2018.

[3] Ms Lin contends that she was dismissed from her employment as a casual employee and that this followed concerns being raised on her behalf that the level of pay being applied was below the required modern award minimum.

[4] Jack’s Noodle contends that Ms Lin was a casual employee who was not protected from unfair dismissal and was not dismissed, but rather given a period away from work. In the alternative, any dismissal was justified as Ms Lin’s work performance had been very poor, which threatened the reputation of the business, and seeking an increase in her wage threatened the viability of the business and brought matters to a head.

[5] The application was not resolved at a telephone conciliation conducted on behalf of the Commission on 30 January 2019 and has now been assigned to me to hear and determine.

[6] Both Ms Lin and Mr Liu are native Mandarin speakers and although they have the capacity to communicate in written English (either through their own skills or by using others with that skill) and to some degree to speak English, the extent of the capacity to understand and respond to oral English was somewhat limited, particularly in the case of Mr Liu. I note that Ms Lin preferred to give her evidence in English, and mostly did so. In that light, written communications were generally utilised in the lead up to the hearing of the matter and a Mandarin interpreter fully participated in the proceedings conducted by the Commission.

[7] Having regard to the competing positions evident in the application and response documents, it was apparent to me that the parties required some assistance to identify the issues arising from the application under the legislation and that a Determinative Conference 2 was the appropriate forum to hear the matter.

[8] Comprehensive directions were issued outlining the various issues and providing for the provision of evidence and submissions responsive to those matters and other issues that the parties wished to raise. Extracts from the FW Act and versions of the Commission’s guide to unfair dismissal (in both simplified and traditional Chinese language) were also provided to both parties.

2. Permission for Ms Lin to be represented

[9] Ms Lin was represented at the Determinative Conference by Ms Boromisa, an employee of the Working Women’s Centre of South Australia (WWC), which provides free information and representation for working women. At the Determinative Conference the Commission was advised that Ms Boromisa was an admitted legal practitioner, but did not hold a practicing certificate. The question arose whether Ms Boromisa required permission of the Commission to appear under s.596 of the FW Act. To the extent permission was required, Jack’s Noodle opposed the application on the basis that Mr Liu was not represented and needed an interpreter to participate in the proceedings.

[10] At the time I indicated a preliminary view that Ms Boromisa may not require permission of the Commission to represent the applicant as an employee of the WWC without a practicing certificate. However, to the extent that permission was required, permission would be granted given the circumstances of the parties and the matter more generally. I advised that I would publish my reasons for those conclusions as part of this decision.

[11] Section 596 of the FW Act provides:

“(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

Note: Circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent include the following:

(a) where a person is from a non-English speaking background or has difficulty reading or writing;

(b) where a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee of an industrial association or another person with experience in workplace relations advocacy.

(3) The FWC’s permission is not required for a person to be represented by a lawyer or paid agent in making a written submission under Part 2-3 or 2-6 (which deal with modern awards and minimum wages).

(4) For the purposes of this section, a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent:

(a) is an employee or officer of the person; or

(b) is an employee or officer of:

(i) an organisation; or

(ii) an association of employers that is not registered under the Registered Organisations Act; or

(iii) a peak council; or

(iv) a bargaining representative;

that is representing the person; or

(c) is a bargaining representative.”

[12] The WWC is not itself a party to the application, and is not a Registered Organisation, peak council or a bargaining representative, the Rules do not provide for permission in the present context, and s.596(3) of the FW Act does not apply. Accordingly, if Ms Boromisa is a lawyer or if the WWC is a paid agent, permission would be required.

[13] Neither Ms Boromisa nor the WWC are being paid by Ms Lin for the representation. There is no paid agency here.

[14] Lawyer is defined in s.12 of the FW Act to mean “a person who is admitted to the legal profession by a Supreme Court of a State or Territory.” Ms Boromisa fits this category, and despite the absence of a practicing certificate and being engaged by the WWC which is not being paid for the representation, remains a lawyer for present purposes. Accordingly, permission was required and in applying the provisions of s.596 of the FW Act I have adopted the approach summarised by the Full Bench in Budd v Australian Federal Police. 3

[15] I ultimately granted permission for Ms Lin to be represented because I considered that that the matter had significant complexity, arising from the numerous legal issues that required determination to deal with the application and the significant factual disputes that existed about almost every aspect of this matter. Further, I considered that in those circumstances, the involvement of a representative for Ms Lin would enable the Commission to deal with the mater more efficiently. This satisfied the requirements of s.596(2)(a) of the FW Act. In terms of whether I should exercise the discretion to then permit representation, I did take into account the fact that Mr Liu was not represented and that he, and almost all of the witnesses attending the hearing, also required significant assistance from the Interpreter. However, having regard to Mr Liu’s written submissions and his evident capacity to advance his case, and the circumstances of Ms Lin and the matter more generally, I was satisfied that it was appropriate to permit Ms Lin to be represented.

3. The position of the parties and their evidence

[16] Both parties provided relatively significant written material prior to the Determinative Conference.

[17] It is common ground that Ms Lin worked as a waitress at Jack’s Noodle from 11 April 2017 to 27 November 2018 and that none of the arrangements about that employment were committed to writing. Almost everything else about the working arrangements and events leading to the application are in dispute.

[18] Ms Lin contends she regularly worked shifts (being generally 10:30am to 5:00pm) Tuesdays and Wednesdays, totalling an average of 13 hours work per week and this was agreed at the outset of the employment. Ms Lin also contended that she would occasionally work extra days and was paid at rates between $10.00 per hour upon commencement up to $13.00 per hour as from November 2017. This was paid in cash and there was no recording of the hours or days worked.

[19] Ms Lin’s position is that she was dismissed without notice from her employment at Jack’s Noodle after her husband made a complaint to the owner regarding her rate of pay. This, she contends, was not a valid reason for dismissal and Ms Lin denies that there were any significant work performance matters or that she had ever been warned that her continuing employment was in jeopardy.

[20] Ms Lin seeks a finding that she was unfairly dismissed and a remedy in the form of compensation of $8,544.64, said to the maximum permissible under the FW Act.

[21] Ms Lin provided an outline of submissions, a witness statement dated 15 March 2019 4 and an undated witness statement in response to Mr Liu’s submissions.5 Ms Lin also gave sworn oral evidence and relied on a witness statement6 and sworn oral evidence of Mr Scott Chappell, her husband.

[22] Jack’s Noodle contends that Ms Lin was only ever engaged as a causal employee without any rosters or agreed working hours. Further the employer contends that Ms Lin generally worked on one day per week for 5 hours or less and was generally paid $100 per week.

[23] Jack’s Noodle also contends that Ms Lin was not dismissed, but rather had temporarily stopped arranging work for her due to serious misconduct (poor customer service and attitude arising from her “family problems” brought to a head by Mr Chappell attending the workplace to demand a pay increase which was not warranted) that caused damage to the reputation, viability and profitability of the business. In the alternative, this provided a valid reason for a dismissal about which Ms Lin had been warned on a number of occasions.

[24] Jack’s Noodle described the application and the compensation claim as being “malicious blackmail” and expressly sought compensation from Ms Lin. I note in that regard that questions of claims for costs that might be made under the FW Act are relatively limited in scope 7 and would be considered in a case like this only after the unfair dismissal application itself was determined.8

[25] Jack’s Noodle provided witness statements from the following staff; each of these witnesses, with the exception of Ms Wei Liu, also gave sworn evidence at the Determinative Conference:

•  Ms Ling Li, Mr Liu’s wife;

•  Ms Ling Liu, a worker at Jack’s Noodle;

•  Ms Wei Liu, a worker at Jack’s Noodle;

•  Ms Ying Bai, a worker at Jack’s Noodle;

•  Ms Xuejing Wang, a worker at Jack’s Noodle;

•  Ms Xin Wu, a worker at Jack’s Noodle; and

•  Ms Liping Guo, a worker at Jack’s Noodle.

[26] Mr Liu gave sworn oral evidence and Jack’s Noodle also provided a written response comprising submissions as well as three additional bundles of documents. Bundle A contained extracts and screenshots of various sections of the FW Act relevant to the matter, screenshots of (undated) online reviews and six of the witness statements. Bundle B contained copies of the same six witness statements plus a seventh statement (Ms Xin Wu’s). Bundle C contained Ms Lin’s tax file number declaration, two of Ms Lin’s Pay As You Go (PAYG) taxation certificates and what was described as extracts from handwritten salary records dating from 13 April 2017.

[27] The witness statements of Ms Ling Li, 9 Ms Liping Guo,10 Ms Xuejing Wang,11 Ms Ling Liu,12 Ms Xin Wu13 and Ms Ying Bai14 were admitted into evidence. As Ms Wei Liu was not present to attest to the truth of her witness statement, or be subject to cross-examination, her statement was not accepted into evidence.

[28] During the course of the Determinative Conference, a copy of an SMS version of one of Ms Lin’s PAYG taxation summaries 15 was also tendered by Jack’s Noodle, together with a printout of Google Reviews of the restaurant.16

4. Observations on the evidence

[29] The absence of almost any written records or objective evidence, given the significant factual disputes evident here, means that the credibility of the witness statements and oral evidence becomes particularly significant. Further, although potentially relevant to context, those parts of the statements that did no more than indicate what the witness had been told by someone else (hearsay) are not probative so as to enable the truth of the events to be ascertained.

[30] I found the evidence of Ms Lin to be given honestly and openly. I also found that she was prepared to make appropriate concessions, albeit that she was less convincing in relation to responsibility for some elements of customer service and the related discussions with the employer.

[31] Mr Chappell’s evidence was of relatively limited compass however I accept it where it concerns actual events that he participated in or directly observed.

[32] In reaching my view about Ms Lin and Mr Chappell’s evidence, I have taken into account the apparent conflict between them about the pay rates allegedly paid to Ms Lin. Ms Lin gave evidence, which I ultimately accept, that she was initially paid something in the order of $10.00 per hour with that increasing to $13.00 per hour at the conclusion of employment. At some point, Mr Chappell reported to Centrelink that Ms Lin was being paid $19.50 per hour; a figure much closer to the $20.00 per hour claimed by Jack’s Noodle.

[33] The context for the reporting to Centrelink was that Mr Chappell, who is now acting as the carer for their child, is required to report Ms Lin’s income as it is relevant to extent of the carer’s payment claimed by Mr Chappell. Mr Chappell gave evidence that as it was not clear what rate of pay Ms Lin was being paid (given the cash payments and in the absence of any pay slips) he, in effect, considered that it was prudent that he report what he understood to be the minimum wage provided by ‘the Award’ (being in his view $19.50 per hour). I note that for the 2017/18 financial year, the minimum adult wage for a Food and Beverage Attendant Level 2 (F&B 2) under the Restaurant Industry Award 2010 (the Award) was $19.53 per hour. Although this does not include the casual loading of an additional 25%, all parties appear to have overlooked this when considering the relevant pay rates.

[34] In relation to the pay rates, I consider on balance that Mr Liu’s evidence about the pay rate has been customised to suit what he considered to be the relevant required rate of around $20.00 per hour – with the provision of a free meal and paid meal period. That is, the number of hours that he now contends were worked by Ms Lin was stated as only being up to 5 per week to cast the (generally) $100.00 per week payment as being the “correct” (hourly) rate.

[35] I note that the F&B 2 rate for a casual under the Award was $24.41 per hour in 2017/18 and $25.28 per hour at the conclusion of the relationship. Additional payments applied under the Award to work on Saturdays and at some other times. 17

[36] I would emphasise that I have considered the proper pay rates and the explanations provided by the parties to the extent that they provide some context for the assessment of the credibility of the witnesses and for the final discussion that is said to have led to the dismissal. I am not dealing with whether, as a matter of fact, Ms Lin was underpaid as this is not a matter for the Commission under this application.

[37] In relation to the evidence of Mr Liu more generally, I do not doubt that he now holds strong views about Ms Lin’s customer service. However, I gained the clear impression that the significance of those concerns has been escalated, and the role played by the concerns raised on behalf of Ms Lin about her rate of pay have been minimised, in the context of these proceedings.

[38] Ms Li’s evidence concerned the support provided to Ms Lin at times regarding the applicant’s personal circumstances and her observations about some issues arising in relation to Ms Lin’s customer service and an exchange with Mr Liu. Ms Li was not directly involved in, and did not provide evidence about, Ms Lin’s working hours or pay arrangements. I accept her evidence on matters that she was directly involved in as being open and honest.

[39] With two exceptions, the admitted statements from the other workers at Jack’s Noodle represented opinions about the work attitude of Ms Lin and observations about her personal circumstances. These statements are strikingly similar in both content and expression; however, as the proponents were not challenged by the applicant about that aspect, I draw no inference. The statements are however generally based upon very limited direct observations of Ms Lin and in the main rely upon what others have said about the applicant. Subject to those significant caveats, I accept the evidence where such concerns directly observed events.

[40] The two exceptions in the worker’s statements referenced above are that the statement of Ms Ling Liu confirmed an exchange between Ms Lin and Mr Liu where the Mandarin expression “mai xiao” was used by Ms Lin. In addition, Ms Xin Wu’s statement refers to a discussion with Mr Liu where Ms Lin was advised, in effect, that she (the applicant) needed to improve in order to continue to work there.

[41] There is a direct dispute about the second aspect and Ms Lin denies that she was ever warned in any formal manner. On balance, I find that a discussion of the general kind referenced in Ms Xin Wu’s statement took place, albeit that I prefer Ms Li’s version of what was said.

[42] In relation to the pay summary records, it is evident that there are no supporting records behind the summary. That is, there was no recording of the number of day or hours worked by Ms Lin and the pay summary was generally completed by Ms Li, simply based upon what Mr Liu advised had been paid each week. The payments were made in cash without any confirmation that they had been provided and I consider that based upon the evidence before the Commission, the pay summaries are indicative of the payments made but not completely reliable.

[43] There were some other (non-business) documents supplied by Jack’s Noodle as part of the submissions provided for the Determinative Conference that were not separately marked as exhibits. Insofar as they were referenced by the parties I have had regard to them.

[44] I would note that as part of the employer’s initial response to the application, some documents, said to be pay slips for another employee, were provided. These were not provided as part of the evidence and submissions and no evidence was given about them at the Determinative Conference. Indeed, the evidence before the Commission is that there were no time and wages records, other than the pay summary records referenced above, and there was no evidence that any pay slip was provided to Ms Lin. In the circumstances, I place no weight upon the alleged pay slips.

5. Findings on the context and the major issues

5.1 The working arrangements

[45] Jack’s Noodle is owned and conducted by Mr Liu and operates, at least in employment terms, on a largely informal basis. Mr Liu and Ms Li are both actively involved in the practical operations of the business with Mr Liu primarily undertaking the administration and management of the restaurant.

[46] There is a dispute as to whether Ms Lin generally worked one day or two days per week, with some fluctuations. On Jack’s Noodle pay summaries, a very regular payment was made to Ms Lin; however, for reasons set out above this does not assist me to resolve the number of days or hours worked.

[47] It is clear to me that Ms Lin had a regular pattern of work (on either account) and that there was a mutual ongoing expectation of work.

[48] On the balance of probabilities, I find that Ms Lin regularly worked two days (Tuesday and Wednesdays between 10.30am and 5.00pm) each week with some fluctuations – generally, but not always, in addition to those hours. This involved some, but limited, weekend work and an average of about 13 hours worked in total per week. There was probably a period in January or February 2018 when Ms Lin was overseas, and although the pay summary records her being paid for that period, this probably did not occur.

[49] In relation to the PAYG summaries more generally, these reveal that the ATO has been advised that Ms Lin received $1,200 for the 2016/17 financial year and $4,800 for the 2017/18 financial year with no income tax deducted. Ms Lin did provide a tax file number declaration in 2017 and claimed the tax free threshold.

[50] The pay summaries held by Jack’s Noodle indicate that Ms Lin was regularly paid $100 per week, with a few exceptions where a lower payment is recorded, and this must be assessed subject to the caveats outlined earlier. Although they do not assist to confirm how often and what hours were actually worked by Ms Lin, these pay summaries do probably reflect the general level of regular cash payments made to Ms Lin.

[51] It is apparent to me that the obligations of the Award played very little, if any, role in the determination of the wages and conditions under which Ms Lin was engaged.

[52] I note also that Jack’s Noodle was aware of some difficult domestic circumstances involving Ms Lin and Mr Chappell that may have impacted upon Ms Lin’s demeanour at work from time to time. I also find that Ms Li was supportive of Ms Lin in that context and this included in October 2018 offering to have the applicant stay with herself and Mr Liu should that assist the applicant.

5.2 Whether Ms Lin was protected from unfair dismissal

[53] This question arises from the requirement under s.382 of the FW Act that, amongst other matters, an applicant employee must serve at least the relevant minimum period of employment to be protected from unfair dismissal. Ms Lin’s service, if all is eligible and counted for that purpose, would exceed the minimum period of 12 months required for an employee of a small business. 18

[54] Ms Lin was a casual employee and as a result, the following provisions dealing with the calculation of the period of employment must be considered:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

… ….”

[55] The operation of this provision was discussed by a Full Bench in Shortland v The Smiths Snackfood Co Ltd¹⁹ (Shortland) which said:

“[10] As a matter of the common law of employment, and in the absence of an agreement to the contrary, each occasion that a casual employee works is viewed as a separate engagement pursuant to a separate contract of employment. Casual employees may be engaged from week to week, day to day, shift to shift, hour to hour or for any other agreed short period. In this sense no casual employee has a continuous period of employment beyond any single engagement. Moreover, it is common for a casual employee to transition between a period in which their engagements with a particular employer are intermittent and a period in which their engagements are regular and systematic and vice versa. It is against that background that s.384 must be construed.

[11] The criteria in s.384(2)(a) make it clear that s.384 does not proceed on the basis that a casual employee’s period of employment for the purposes of the unfair dismissal remedy starts and ends with each engagement as understood in the common law of employment.

[12] Moreover, it is more than tolerably clear that s.384 is concerned with how an employee’s period of employment is calculated for the purposes of s.382(a). Section 384(2) draws a distinction between a period of service and a period of employment. It also draws a distinction between a period of continuous service and a period of service: a period of continuous service can be made up of a series of periods of service, some of which count towards the period of continuous service (ie. where the conditions in s.384(2)(a)(i) and (ii) are met) and some of which do not (ie. where one of the conditions in s.384(2)(a)(i) or (ii) is not met). It is clear from the language of s.384(2) that an employee may have series of contiguous periods of service with an employer that may count towards a single period of employment with that employer. Any given period of service in such a contiguous series of periods of service will count towards the employee’s period of employment only if the requirements in s.384(2)(a)(i) and (ii) are met. Section 384(2) is concerned only with determining which periods of service in such a contiguous series count toward the employee’s period of employment with the employer for the purposes of s.382(a).

[13] Continuous service by a casual employee who has an established sequence of engagements with an employer is broken only when the employer or the employee make it clear to the other party, by words or actions that there will be no further engagements. The gaps between individual engagements in a sequence of engagements should not be seen as interrupting the employee’s period of continuous employment within the meaning of s.384. In particular, a period of continuous service within the meaning of s.384(1) is not to be seen as broken by a period of ‘leave’ or an absence due to illness or injury.”

[56] In the earlier decision of Ponce v DJT Staff Management Services Pty Ltd T/A Daly’s Traffic²⁰ Roe C after considering the changes introduced by the FW Act and a range of authorities, coherently summarised his approach as follows:

“[75] I conclude from this that the set of facts in each case must be examined and that, if the number of hours worked is small and the gaps between days and times worked is long and irregular this means that there needs to be other evidence that the employment of a casual is regular and systematic. Conversely, if there is a clear pattern or a roster for the hours and days worked then this would be strong evidence of regular and systematic employment.

[76] In situations where there is not a clear pattern or roster of hours and days worked or a clear agreed arrangement between the employer and employee, then evidence of regular and systematic employment can be established where:

•  The employer regularly offers work when suitable work is available at times when the employer knows that the employee has generally made themselves available; and

•  Work is offered and accepted sufficiently often that it could no longer be regarded as simply occasional or irregular.

[77] Positive evidence of these two situations establishes regularity and a system to the employment. It is also positive evidence of a reasonable expectation of continuing employment on a regular and systematic basis. That is an expectation that this pattern of when work will continue to be offered and be accepted will continue.

[78] If the hours worked over a lengthy period are similar to or exceed that of full-time ordinary hours then this would also be strong evidence that work is being performed when offered and that work is being offered when available at the time parties know this is practical. Hence this would also be evidence of regular and systematic employment.”

[57] For reasons outlined earlier, I am satisfied that Ms Lin was a casual employee who was employed on a regular and systematic basis, and during the period of service as a casual employee, had a reasonable expectation of continuing employment by the employer on such a basis.

[58] As a result, Ms Lin’s service between April 2017 and November 2018 represents continuous service and Ms Lin has met the minimum employment period. As Ms Lin was covered by a modern award (and paid well below the high income threshold) 21 the applicant was protected from unfair dismissal by virtue of s.382 of the FW Act.

5.3 Whether Ms Lin has been dismissed within the meaning of s.386 of the FW Act

[59] Section 386 of the FW Act relevantly provides as follows:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

… …”

[60] Ms Lin last worked for Jack’s Noodle on Tuesday 27 November 2018 following a discussion between the applicant and Mr Liu. However, it is apparent that the visit of Mr Chappell to Jack’s Noodle on Saturday 24 November 2018 was a significant contributor to the end of Ms Lin’s employment. I find that Mr Chappell attended the workplace about 10 minutes before final closing to pick up Ms Lin from work but approached Mr Liu to speak about his wife’s pay rate. Mr Chappell was making the approach with the knowledge and acceptance of Ms Lin who was reluctant to do so herself.

[61] There is a dispute about what was said at this discussion. In resolving that dispute, I have taken into account that whilst Mr Chappell and Mr Liu had previously held satisfactory discussions in English about Mr Chappell potentially doing some shop fitting work for the business and had engaged each other socially, Mr Liu’s understanding of English may have impacted upon his capacity to understand and respond to some of the detail being advanced by Mr Chappell. I am however satisfied that Mr Liu understood the substance of Mr Chappell’s position regarding the proper rate to be paid to Ms Lin and that this would involve an increased rate of pay.

[62] I find that Mr Chappell informed Mr Liu that he considered that the business had not been paying his wife correctly and fairly by the Award. Mr Liu then indicated that the business could not afford to pay more and Mr Chappell advised that this was required under the Award, and that as a result, Ms Lin would, until the proper rate was organised, only be working the standard two days of the week. I note that this conversation occurred on a Saturday and that Ms Lin had been working additional hours in addition to the regular weekdays.

[63] It is also likely that Mr Liu did not directly respond about the rate of pay as he wished to consider the profitability of the business and Ms Lin’s work performance to assess whether he should pay more than the current rate. 22

[64] Ms Lin contends she was dismissed during a discussion with Mr Liu on 27 November 2018; being her first normal working day after the 24 November exchange with Mr Chappell. Fundamentally, consideration as to whether this exchange was a dismissal involves a dispute about what was said and done and the legal impact of the 27 November discussion. Mr Liu contends that no work was arranged for Ms Lin for the time being and that this was a break from work and not a dismissal. Ms Lin contends that she was dismissed on 27 November 2018 in the following terms:

“29. On 27 November 2018 I went to work as usual. This was the next shift after Scott and Mr Liu spoke about my pay. I started work at 10.30am like always. At about 4.15pm Mr Liu asked me to stop doing work, and to follow him outside to have a talk with him.

30. While at the outside seating area of the restaurant, Mr Liu started by talking to me about his business expenses, He talked about how after all his expenses, his salary is lower than mine and then said words to the effect of “I am a small business, if you want a higher paid job you should go find a big business.”

31. Mr Liu told me that he was not happy about Scott coming in to see him last week and talking about how I should be paid correctly. He gave me my pay from last week and that day, and told me not to come back to work.

32. I was shocked by this conversation. The only thing I could think of in reply was who was going to take over my shifts. Mr Liu said this was not something I needed to worry about.

33. I was told that I could go home right away and I did not need to finish my shift so I took my pay and left the shop.” 23

[65] I accept this evidence and also find that Mr Liu suggested that if Ms Lin required more income, she should ask her husband to go to work and stay at home herself.

[66] In evidence, Mr Liu indicated that the main reason for the discussion and his decision to stop offering shifts was as follows:

“The main reason for the dismissal is her work performance, but the conversation about pay rise, I can say is a trigger, but if she keeps that work performance, then maybe I give her one or two more opportunities, then still I need to dismiss her.” 24

[67] When asked about what would happen if there was no improvement by Ms Lin, Mr Liu indicated as follows:

“Yes, I definitely won't give her any job if there's no improvement. If there's a good employee, I will try my best to keep her or him, but I said two reasons for provide pay rise. One is my capability, that means my profit, and certainly the performance of the employee.” 25

[68] Mr Liu then added:

“ … Secondly, if not for her bad attitude towards a customer and argue with customer, which affected my business in an unfavourable manner, why the person was dismissed? It was her, not any other employees. Thirdly, there's no any benefit of dismissing her because after dismissing her, I need to recruit a new staff and I need to spend time training that person, so I don't gain any benefit from dismissing her. Lastly, since she left the job, I haven't received any negative review, so that's I download the day before yesterday - since she left.”  26

[69] Mr Liu had earlier denied some of the other elements of Ms Lin’s version of the 27 November 2018 discussion and later denied that the “dismissal” had anything to do with Mr Chappell’s intervention. 27

[70] In the Form F3 Employer response, Jack’s Noodle outlines some observations regarding Ms Lin’s family circumstances and concerns with Ms Lin’s customer service. The response then states as follows:

“2. After receiving complaints from customers, I communicated with her and asked her to be friendly, warm and smile more. But she rudely refused my request, telling me she wasn't there to show off her smiles

.

3. On November 24, kailun Lin's husband came to the store during our working hours and asked me to increase his wife's salary. We are a very small business (we provide evidence), I have no ability to provide such a high salary to her, I immediately made refused, and I was very unhappy, because he is in the business time to the store and affect our business, and her husband is not my employee, he has no the identity of the reasonable to ask me.

4. I have communicated with kaiun Lin on November 27th. Based on the above three reasons, kaiun Lin has had a bad impact on my business. I cannot arrange her work for the time being, unless she is in good condition.

Because of her family background, I gave her some Suggestions. First of all, her husband has been out of work for years and has been relying on government welfare and relief. This is not good, I hope she can go home to persuade her husband to go out to work. And her daughter is going to primary school, there are also some education expenses needed, if her husband still don't go to work, her salary I gave to is not enough support to her family. However my business is very small, I also need support my life, and need to help other employees in the store to get a certain income, helping their study and life. So I can't offer her a higher salary. What she wants now, only some big companies and good positions can satisfy her. I think that these advice I gave was to help her.”

[71] I find that Ms Lin’s version represents the substance of the exchange that actually took place between Mr Liu and Ms Lin on 27 November 2018. However, the context provided in paragraphs 3 and 4 of the employer’s response set out above is also informative. I will return to the actual reasons for that discussion shortly.

[72] It is also likely that Mr Liu indicated to Ms Lin that she could approach him for work in the future but it is clear from the evidence of both that the employment had concluded and there was no promise of further work to Ms Lin; and that none was likely.

[73] There is no suggestion that Ms Lin resigned. Ms Lin has not been offered any shifts after 27 November 2018. The question is whether there was a dismissal at Mr Liu’s initiative.

[74] I have found that Ms Lin had a reasonable expectation of ongoing employment and had been regularly and systematically engaged. It is also clear that where a protected casual employee has an ongoing expectation of employment and the employer indicates that there will be no further engagements, a dismissal may take place.²⁸

[75] Given the context, including the nature of the employment to that time, and the words and sentiment expressed by Mr Liu, I am satisfied that this led to the reasonable understanding of Ms Lin that she had been dismissed. Objectively, this is the result of the exchange.

[76] I am also satisfied that Ms Lin was dismissed within the meaning of the FW Act.

5.4 Whether the dismissal was consistent with the Small Business Fair Dismissal Code – s.388 of the FW Act

[77] Jack’s Noodle is a Small Business within the meaning of the FW Act and as a result of s.385 the Commission must initially consider the implications of the Small Business Fair Dismissal Code established by s.388 of the FW Act (the Code).

[78] This means that if Ms Lin’s dismissal was consistent with the Code, it cannot be considered to be unfair within the meaning of the FW Act. Section 396 of the FW Act also requires, in effect, that matters arising from s.385 are to be decided before dealing with the merits of the application.

[79] I note that the compliance with the Code was not raised in the employer’s response but included in the Directions issued by the Commission as a matter that might arise when determining the application. In submissions, Jack’s Noodle did contend that any dismissal was consistent with the Code.

[80] The Code as declared is set out as follows:

“The Code

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.”

[81] Accordingly, for an employer to believe on reasonable grounds that the conduct of the employee was serious enough to justify immediate dismissal, the employer must establish that it did in fact genuinely hold the belief that:

•  the conduct was by the employee;

•  the conduct was sufficiently serious; and

•  the conduct justified immediate dismissal.²⁹

[82] In applying this part of the Code the Commission’s consideration is of the employer’s belief, which must be based on reasonable grounds, and not on whether the employee’s conduct as a matter of fact and law justified immediate dismissal. 30

[83] I do note that as a casual employee, Ms Lin may not be given notice of dismissal in any event but that as part of the alternative submissions Jack’s Noodle now states that any dismissal was on the basis of misconduct.

[84] The misconduct is now said to be the poor customer performance and Ms Lin’s response to her employer, brought to a head by the request for a pay increase. I will deal with Mr Chappell’s role shortly, but note that this could not be misconduct by Ms Lin in the present context.

[85] I am not persuaded that the work performance issues, Ms Lin’s response and related matters were the reason for the dismissal or that a belief about those matters justifying dismissal was reasonably held by Mr Liu at the time of the dismissal. It is clear to me that Mr Liu considered that the approach made by Ms Lin’s husband, combined with his view about their family arrangements (that the husband should go out and get a job and Ms Lin should work for a large business if she wanted to be paid more money), formed the actual reasons for the decision. This is also consistent with what was said at the time.

[86] Mr Chappell did attend the workplace immediately prior to the business closing for the day, but there is no reliable evidence that this disrupted the business in any meaningful way or was “spreading her (the Applicant’s) family problems to work.” 31 Requesting, directly or via another person, to be paid the proper Award wages was not conduct that justified immediate dismissal (or dismissal at all). The complaint about the level of wages was a proper and reasonable request and a belief that this justified dismissal could not reasonably have been held. To the extent that work performance was an element, nothing occurred at the time that would support this being so serious as to justify an immediate dismissal. The same finding applies to any suggestion that is now made by Jack’s Noodle that Ms Lin’s earlier response to a customer complaint itself justified such a dismissal.

[87] Accordingly, there is no basis to support a summary dismissal of Ms Lin on the grounds of serious misconduct and there is no evidence to support any such reasonable belief in any event.

[88] The alternative question is whether the requirements of the Code in relation to the “Other dismissals” have been met. This requires, in this case, a consideration as to whether:

•  Jack’s Noodle gave Ms Lin a reason why she was at risk of being dismissed;

•  The reason was a valid reason based on Ms Lin’s conduct or capacity to do the job;

•  Ms Lin had been warned verbally, or preferably in writing, that she risked being dismissed if there was no improvement;

•  Jack’s Noodle provided Ms Lin with an opportunity to respond to the warning and gave her a reasonable chance to rectify the problem, having regard to the applicant’s response and noting that rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations; and

•  The issue that was subject to any warning was the reason for the dismissal.

[89] I note that the “procedural matters” element of the Code did not arise in this case.

[90] The business of Jack’s Noodle was conducted very informally with little by way of paperwork. There was no employee record system and no written contracts. In that light, there was no record of any discussions or warnings. However, under the Code, whilst a warning would preferably be in writing, it need not be so and I must consider whether there was a warning of any description that might meet the requirements of the Code.

[91] Ms Lin denied that she had been formally warned and Mr Liu and Ms Wu gave evidence that the applicant was warned. Ms Li, who directly observed a discussion in October 2018, gave evidence that the discussion took place after a customer apparently made a complaint about the wrong dish being served and Ms Lin’s manner. After Ms Li had left the kitchen and apologised to the customer, Ms Lin indicated that the customer had placed the wrong order. Ms Li suspected that the applicant’s attitude was influenced by Ms Lin’s family circumstances at the time.

[92] In the context of some further issues, including a poor review on Google that was not specifically attributable to Ms Lin or any other employee, the following exchange took place a few days later between Mr Liu and Ms Lin:

•  Jack (Mr Liu) was very angry and talked to her seriously;

•  Karen (Ms Lin) said she was just saying that she's not here to sell her smiles (or to act as a prostitute);

•  So they were very angry hearing that response, and the employer said for a waitress a smile at customers is the basic work, and that's a very basic requirement from the employer.

•  Mr Liu told Ms Lin that “ if you don't want to work here, then don't”;

•  And seeing Mr Liu was very angry, Ms Lin said “I'm sorry and said she didn't mean to say that”; and

•  Later, Karen told us that she would improve. 32

[93] I accept that the substance of this exchange took place as indicated by Ms Li in preference to the other versions of this conversation. I also accept that whilst this was not expressly stated as being a warning in the conventional sense, this was, in effect, a warning that the continuing employment was in jeopardy and as such is capable of being relied upon for the purposes of the Code.

[94] Mr Liu refers in his evidence to two warnings, however there is no reliable evidence of a second (earlier) discussion in which Ms Lin was advised that her position was in jeopardy before the dismissal itself.

[95] There is also no reliable evidence that Ms Lin failed to improve after the warning. Further, for reasons previously stated, I do not consider that any poor customer service or Ms Lin’s response were the actual reasons for the dismissal at the time. Rather, it was substantially the approach made by Ms Lin’s husband seeking for the applicant to be paid the proper rates under the Award and Mr Liu’s view about the applicant’s family arrangements.

[96] Accordingly, despite the warning, I am not satisfied that the dismissal was consistent with the Code.

5.5 Whether the dismissal was unfair (harsh, unjust or unreasonable) – s.387 of the FW Act

[97] Given the above findings, I need to consider whether the dismissal of Ms Lin was unfair.

[98] Section 387 of the FW Act provides 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.”

[99] It is clear that s.387 of the FW Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the FW Act sets out a number of considerations that must, where relevant, be weighed up in totality.

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

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

[101] Valid in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, common sense way to ensure that the employer and employee are each treated fairly.³³

[102] It is also clear from the authorities that the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts before the Commission. That is, it is not enough for an employer to rely upon its reasonable belief that the termination was for a valid reason.³⁴ Equally, facts justifying dismissal, which existed at the time of the termination, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.³⁵

[103] I have therefore considered the various factors relied upon by Jack’s Noodle during the hearing, where they are supported by the evidence and pertain to facts in existence at the time of the dismissal, as potentially constituting the valid reason for dismissal.

[104] Jack’s Noodle relied upon the alleged poor customer service provided by Ms Lin at times and some apparently related customer complaints. I have found on balance that some of these concerns were justified.

[105] The employer also relies upon the use of expression “mai xiao” by Ms Lin during a discussion with Mr Liu and Ms Li in which Ms Lin was indicating that she was not being paid to act as such. There is a dispute about whether the expression should be understood in the context in which it was used as meaning that Ms Lin was not paid to smile or alternatively, was not paid to be a prostitute. I do note that during proceedings, the expression was interpreted to refer to smile and not the more literal interpretation. This was also reflected in the employer’s response document. 36 I consider that this is likely to have been the way the expression was intended and received at the time. However, either way, this was not an appropriate response to the concerns being raised by Jack’s Noodle given the context and role being undertaken by Ms Lin.

[106] I also find that the use of this expression and the discussion more generally were treated more seriously only after the dismissal.

[107] These matters are individually and collectively a valid basis for concerns about Ms Lin’s employment and deserving of a warning. In my view, Ms Lin’s customer service and response to concerns raised by Jack’s Noodle do not form a valid basis for dismissal, and I observe these were also not legitimately seen as serious enough by Jack’s Noodle to warrant dismissal at the time, at least until the proper wages issue was raised.

[108] To the extent that Jack’s Noodle relied upon the request made on Ms Lin’s behalf that the Applicant be paid proper Award wages, this could not represent a valid reason for dismissal.

[109] Having objectively considered all of the relevant circumstances related to Ms Lin’s capacity and conduct based upon the findings of the Commission, I am not persuaded that there was a valid reason for dismissal.

Section 387(b) – whether Ms Lin was notified of the reasons for dismissal

[110] This consideration requires the Commission to assess whether the applicant concerned was relevantly notified of the reasons leading to the dismissal before that decision was taken.³⁷

[111] Ms Lin was advised of the reasons; being in effect, the intervention of Mr Chappell and the wage complaint itself in the context of some existing concerns, but this was not done prior to the decision being taken and implemented. There was no notification of the reasons for dismissal as contemplated by s.387(b) of the FW Act.

Section 387(c) – whether Ms Lin was given an opportunity to respond to any reason related to her capacity or conduct

[112] The process contemplated by the FW Act does not require any formality and is to be applied in a common sense way to ensure the employee has been treated fairly. This question becomes whether Ms Lin was aware of the precise nature of the employer’s concern about her capacity and had a reasonable opportunity to respond to these concerns.³⁸

[113] Given that Ms Lin was not notified of the reasons for dismissal as contemplated by s.387(b), and given all of the circumstances evident here, I am not satisfied that Ms Lin was given an opportunity to respond to any reason related to her capacity or conduct as contemplated by s.387(c) of the FW Act.

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

[114] There was no meeting to discuss any concerns held by the employer and no request for a support person arose. Accordingly, this consideration is not relevant.

Section 387(e) – if the dismissal is related to unsatisfactory performance by Ms Lin – whether she has been warned about that unsatisfactory performance before the dismissal.

[115] This consideration relates to performance of the job. Performance in this context includes the employee’s capacity to do the work, and the diligence and care taken with that work.³⁹

[116] For reasons set out earlier in this decision, I accept that Ms Lin was warned to some degree about her work performance.

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

Section 387(g) – the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal.

[117] I deal with these two considerations together.

[118] Jack’s Noodle is a very small business and there were no dedicated human resource management specialists or expertise in the enterprise. This has impacted upon how the issues leading to the dismissal were handled in a number of ways.

[119] As a result, I have made a meaningful allowance for the circumstances of the employer when considering the manner and procedures adopted as part of the assessment of the overall fairness of the dismissal.

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

[120] Amongst other considerations, the Commission should consider the impact of the dismissal upon the applicant given all of the circumstances. This dismissal meant that Ms Lin lost her employment with the normal consequences of that event. The fact that this occurred in the context of seeking to be paid properly in accordance with the relevant modern award is also a relevant exacerbating factor.

Conclusion on nature of dismissal

[121] The FW Act requires a global assessment having regard to the various relevant statutory considerations. In that context, procedural unfairness is an important consideration given the provisions of the FW Act but does not necessarily mean that the dismissal was unfair. This is reinforced by the objects relating to Part 3-2 Unfair Dismissal of the FW Act in s.381 which relevantly provides as follows:

“381 Object of the Part

… …

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

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

[122] As revealed in various decisions of the Commission (and the Court), each case must be considered in its own circumstances and it is appropriate, amongst other factors, to have regard to whether the procedural deficiencies made any difference to the fairness of the outcome.⁴⁰ Further, for reasons outlined earlier, it is appropriate to take into account the nature of this very small business in assessing this matter.

[123] Given the facts of the matter and the statutory considerations, and despite the existence of some limited mitigating circumstances, I am satisfied that the dismissal of Ms Lin was harsh, unjust and unreasonable. It was therefore unfair within the meaning of the FW Act.

6. Remedy

[124] Ms Lin does not seek reinstatement to her former position, but rather, compensation.

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

“Division 4—Remedies for unfair dismissal

390 When the FWC may order remedy for unfair dismissal

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

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

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

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

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

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

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

… …

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

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

Shock, distress etc. Disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

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

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

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

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

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

[127] Section 390 of the FW Act makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances. I find that reinstatement would be inappropriate.

[128] As set out above, under the FW Act, it is then necessary to consider whether compensation in lieu of reinstatement is appropriate.

[129] A Full Bench in McCulloch v Calvary Health Care Adelaide⁴¹ (McCulloch) confirmed, in general terms, that the approach to the assessment of compensation as undertaken in cases such as Sprigg⁴² remains appropriate in that regard.

[130] Section 392(2) of the FW Act requires me to take into account all of the circumstances of the case including the factors that are listed in paras (a) to (g). Without detracting from the overall assessment required by the FW Act,⁴³ it is convenient to discuss the identified considerations under the various matters raised by each of the provisions.

The effect of the order on the viability of Jack’s Noodle

[131] Nothing specific of relevance was put on this aspect but I do however accept that Jack’s Noodle is a small business and if a significant award of compensation were made, it may have some impact. However, this consideration is unlikely to arise in practice given my later findings.

The length of Ms Lin’s service with Jack’s Noodle

[132] Ms Lin’s employment was just over sixteen months, which is not particularly significant.

The remuneration Ms Lin would have received, or would have been likely to receive, if she had not been dismissed

[133] This involves, in part, a consideration of the likely duration of Ms Lin’s employment in the absence of what I have found to be an unfair dismissal. That is, the establishment of the anticipated period of employment.⁴⁴

[134] In closing evidence and submissions, Mr Liu indicated in effect that in the absence of a dismissal, Ms Lin’s employment would have continued because he did not gain any benefit from dismissing the applicant. 45 Considered in context, this was based upon a limited understand of the compensation concept and the presumption that Ms Lin would, in Mr Liu’s view, improve or maintain her work performance at an appropriate level. Ms Lin contended, in effect, that she should be awarded the maximum compensation available under the FW Act. This in turn, implies that the anticipated employment should be projected to have continued for at least six months after the dismissal. Ms Lin contends that the compensation should also be calculated on the basis of the wage rate that she was entitled to be paid.

[135] Despite my findings that there was not a valid reason for dismissal and any conduct did not warrant dismissal at that point, there were legitimate concerns about aspects of Ms Lin’s work performance at times. This must be considered along with the fact that where a valid reason for dismissal is not found, the Full Bench in McCulloch also confirmed that when assessing likely lost remuneration, cogent evidence is required for any assumption that a short period of likely future employment would have occurred.⁴⁶

[136] In the context of a small business of the kind of Jack’s Noodle, the impact of the events actually leading to the dismissal must be considered; that is, the request that Ms Lin be paid properly. In that regard, the anticipated period of employment requires consideration as to how long the employment would have continued before it otherwise came to an end fairly, or on some justified or mutual basis. An applicant employee might also leave of their own volition.

[137] This, by definition, requires some speculation, based upon evidence and reasonable inferences. Factors in this case include the potential for Ms Lin to have been paid in accordance with the Award, which might then have ultimately impacted upon the future work provided, and an increased focus upon work performance. Alternatively, if correct pay arrangements were not adopted, this may have led to the same general arrangements as before but over an even longer period. Ms Lin was also a casual employee and had indicated that in the absence of the proper rate being paid she would restrict her hours.

[138] I consider that I should proceed on the basis that the remuneration that Ms Lin would have received or been likely to receive in the absence of the dismissal is to be calculated by reference to the award rate; being $25.28 per hour. 47 The statutory compensation cap refers to the payments that an applicant employee had received (s.392(6)(a)(i)) or was entitled to receive (s.392(6)(a)(ii)) and the consideration in s.392(2)(c) includes the remuneration that the applicant would have been likely to receive. This is an indication that in assessing compensation the Commission is not strictly bound by the remuneration rate that was actually paid prior to the dismissal and may in some cases, where warranted, take a broader view. Given the requirement to provide a fair go all around in s.381 of the Act, I consider that this is the approach that better conforms with the statutory charter of the Commission in this particular case. I also observe that I would in this case, in the absence of this view, have taken the proper rate of remuneration into account under s.392(2)(g) of the FW Act.

[139] I consider that the anticipated period of employment for present purposes would be in the order of 12 weeks at an average of 13 hours per week. This reflects the balancing of the circumstances and inferences alluded to earlier.

[140] The projected remuneration that Ms Lin would have received based upon the anticipated period of employment with Jack’s Noodle would therefore have been $3,944.

The efforts of Ms Lin to mitigate the loss suffered by her because of the dismissal

[141] I accept that Ms Lin has made extensive efforts to mitigate her losses.

[142] No discount to the amount of compensation is warranted based upon this consideration.

The amount of any remuneration earned by Ms Lin from employment or other work during the period between the dismissal and the making of the order for compensation

The amount of any income reasonably likely to be so earned by Ms Lin during the period between the making of the order for compensation and the actual compensation

[143] Ms Lin was not in receipt of any employment related income following her dismissal and was not in employment at the time of the hearing of this matter.

Any other matter that the FWC considers relevant and the remaining statutory parameters

[144] I have taken into account the projected nature of the anticipated loss of remuneration over a known period and given the circumstances of this case, it is not appropriate to make a further allowance for contingencies.⁴⁸

[145] There is no demonstrated misconduct that should be taken into account as provided by s.392(3) of the FW Act.

[146] In accordance with s.392(4) of the FW Act, I make no allowance for any shock, distress or humiliation that may have been caused by the dismissal. I also observe that compensation in this context is not in the nature of damages or a penalty for the actions of the employer.

[147] The maximum compensation limit in this case is the lesser of 26 weeks remuneration before the dismissal occurred (approximately $8,545 based upon the payments to which Ms Lin was entitled – s.392(6)(a)(ii)) 49 or the stated statutory cap of $69,450.⁵⁰ The amount of compensation otherwise arising from the statutory considerations is less than the lower figure.

[148] Taxation, to the extent that such is required, would be payable on any amount determined.

[149] After the dismissal, via text messages, 51 Mr Liu threatened to undermine any attempts of Ms Lin to obtain alternative employment within the Chinese business community in Adelaide. There is no evidence that this has occurred and I treat it as a hollow threat, which reflects badly upon Mr Liu and may, if carried out, be a breach52 of the FW Act. I do note that Ms Lin has decided to look for employment outside of the Chinese business community in Adelaide and this may have limited the scope for further employment to some degree. In that regard, Ms Lin did not rely upon these events as part of her claim for compensation and I have already accepted that Ms Lin has sought to mitigate her losses and no deduction for post dismissal income is being made.

Conclusions on remedy

[150] Having regard to the circumstances of this matter applied to the considerations established by s.392 of the FW Act, I consider that it is appropriate to make an award of compensation to Ms Lin in lieu of reinstatement. Further, I consider that the compensation should amount to $3,944; which has been derived having regard to the projected remuneration loss and the other factors discussed above. The payment is to be made within 14 days of the decision.

6. Conclusions and Orders

[151] For reasons set out above, I have found that Ms Lin:

1. Is protected from unfair dismissal;

2. Was unfairly dismissed within the meaning of the FW Act; and that

3. Compensation to be paid by the employer to Ms Lin in lieu of reinstatement is appropriate and is to be $3,944.

[152] An order 53 giving effect to this decision is being issued concurrently.

COMMISSIONER

Appearances:

T Boromisa of the Working Women’s Centre of SA, with permission, on behalf of Ms Lin.

Y Liu, the respondent in person.

Hearing details:

2019

Adelaide

25 March.

Printed by authority of the Commonwealth Government Printer

<PR706025>

 1   Section 23 of the FW Act.

 2   Sections 397 to 399 of the FW Act. The nature of the determinative process was confirmed at the outset of the Determinative Conference.

 3   [2018] FWCFB 6948 at [3].

 4   Exhibit A1.

 5   Exhibit A2.

 6   Exhibit A3.

 7   Sections 400A and 401 of the FW Act.

 8   Section 402 of the FW Act.

 9   Exhibit R1.

 10   Exhibit R2.

 11   Exhibit R3.

 12   Exhibit R4.

 13   Exhibit R5.

 14   Exhibit R6.

 15   Exhibit R7.

 16   Exhibit R8.

 17   Clause 34 of the Award.

 18   Section 383.

19 [2010] FWAFB 5709, 16 September 2010, per Lawler VP, Drake SDP and Lewin C.

20 [2010] FWA 2078, 15 March 2010.

 21   Section 382(b) of the FW Act.

 22   Transcript PN396.

 23   Exhibit A1.

 24   Transcript PN747 via Interpreter.

 25   Transcript PN749 via Interpreter.

 26   Transcript PN751 via Interpreter.

 27   Transcript PN770 via Interpreter.

28 Shortland v Smiths Snackfood Co Ltd [2010] FWAFB 5709.

29 See Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services [2015] FWCFB 5264 for a discussion of the relevant requirements.

 30   Grandbridge Limited v Mrs Diane Wiburd [2017] FWCFB 6732 at [14].

 31   Submissions of Mr Liu dated 13 March 2019.

 32   Taken from the evidence of Ms Li as recorded in transcript PN197 with some allowances made for the translation.

33 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation, (2004) 133 IR 458 per Ross VP, Williams SDP, Foggo C and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C at par [36].

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

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

 36   Form F3 – Employer response to unfair dismissal application, question 3.1 at point 2.

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

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

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

40 See Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport AIRCFB Print S5897 per Ross VP, Acton SDP and Cribb C, 11 May 2000 and Villani v Holcim (Australia) Pty Ltd [2011] FCAFC 155 as examples.

41 [2015] FWCFB 873.

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

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

44 McCulloch v Calvary Health Care Adelaide [2015] FWCFB 873.

 45   Transcript PN1013 via Interpreter.

46 McCulloch at [27].

 47   F&B 2 Casual rate under the Award. Section 323(1) of the FW Act requires wages to be paid in money and in full (rather than part in-kind unless some form of written authorised deduction (ss.324 and 325) was made).

48 See the discussion of contingencies in McCulloch at [20] – [23]; Bowden v Ottrey Homes Cobram and District Retirement Villages Inc T/A Ottrey Lodge [2013] FWCFB 431, at par [52]; Ellawala v Australian Postal Corporation AIRC Print S5109, per Ross VP, Williams SDP and Gay C, 17 April 2000 and in Enhance Systems Pty Ltd v James Cox AIRC Print PR910779, per Williams SDP, Acton SDP and Gay C, 31 October 2001.

 49   It is the higher of the amount of remuneration received or entitled to be received for the previous 26 weeks period that is to be used under s.392(6)(a) of the FW Act.

50 Section 392(5) of the FW Act.

 51   Attachments to Exhibit A3.

 52   FW Act Part 3-1 – General Protections

 53   PR706771.