DECISION

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

Elizabeth Walker
v
Kunchaya Klindokput t/as Fenwick Realty
(U2019/470)

Application for an unfair dismissal remedy.

Introduction

[1] Ms Elizabeth Walker has applied under s 394(1) of the Fair Work Act 2009 (FW Act) for an unfair dismissal remedy in respect of the alleged termination of her employment with Ms Kunchaya Klindokput, who trades as Fenwick Realty and operates under the Australian Business Number 25 947 199 584. Mr Edwin Fenwick Smith is the licensee in charge of Fenwick Realty, runs the business day-to-day and is Ms Klindokput’s husband. Ms Walker commenced employment with the respondent as a property manager on 1 November 2016, and alleges that she was dismissed by the respondent on or about 31 December 2018. In the respondent’s Form F3 response to Ms Walker’s application, which was completed by Mr Smith, it is denied that Ms Walker was dismissed; rather it is contended that Ms Walker left the employment of her own accord.

[2] Ms Walker’s application was the subject of a telephone directions hearing before me on 14 February 2019, which was attended by Ms Walker and Mr Smith. At that directions hearing there was a discussion about the directions to be made and the date and location of the hearing. I determined at that hearing and advised the parties that the hearing would occur in Bathurst at 10.00am on 11 April 2019 having regard to the fact that Ms Walker at that time and Mr Smith both resided in Blayney (subject to the availability of a courtroom at Bathurst courthouse). A formal listing of the hearing on 11 April 2019 at Bathurst Courthouse was sent to the parties on 15 February 2019 together with directions for the filing and service of evidence and submissions.

[3] In accordance with the directions, Ms Walker filed her submissions and evidence on 7 March 2019, and the respondent filed a witness statement made by Mr Smith on 22 March 2019. There was no advice received from the respondent prior to the hearing date of 11 April 2019 that there would be any difficulty in attending the hearing. However by 10.00 am on 11 April 2019 when the hearing was due to commence, there was no attendance on behalf of the respondent. Telephone contact was made from my chambers to Mr Smith on two occasions to inquire as to his non-attendance. Mr Smith initially advised that he did not feel well and would not be able to attend. When asked why he did not provide any earlier advice about this, he said that he had misunderstood and thought the hearing was by telephone. When told that it was made clear at the directions hearing that there would be a hearing in Bathurst, he said again that he had misunderstood, did not feel well, had undergone open heart surgery, his shop had burnt down and he was mentally exhausted. The offer was made to him to delay the commencement of the hearing that day until such time as he could travel from Blayney to Bathurst Courthouse (which is a distance of about 37 kilometres and takes about 30 minutes to drive). He responded to the effect that he was exhausted, was done with the matter and did not care, and said that Ms Walker had ruined his business and had lied. When told that if he did not attend the hearing might commence without him, he responded to the effect of: “Do what you have to do, I’m not coming”.

[4] In the circumstances I decided to proceed with the hearing in the absence of Mr Smith or any other representative of the respondent for the following reasons:

•  the decision to conduct the hearing in Bathurst was made to meet the convenience of the parties, but notwithstanding this there had been no prior advice that there would be any difficulty in respect of the respondent attending the hearing;

•  as it turned out, Ms Walker had since the directions hearing moved her residence to Mungindi in Queensland, and had travelled from there to Bathurst for the purpose of the hearing;

•  having regard to what occurred at the directions hearing on 14 February 2019 and the content of the notice of listing that was sent to the respondent, Mr Smith’s contention that he was operating under the misunderstanding that the hearing would be conducted by telephone was not credible;

•  the materials already filed suggest that Mr Smith’s heart surgery occurred in 2018 or earlier;

•  there was no attempt by Mr Smith to demonstrate that he was medically incapable of attending;

•  Mr Smith gave no indication that he was prepared to attend a hearing at a later date if an adjournment was granted, and I had no confidence that he would do so;

•  in any event Mr Smith did not seek an adjournment; and

•  I consider it is reasonably apparent that the real position was that Mr Smith had made a conscious decision not to attend the hearing.

[5] The hearing was conducted as a determinative conference in accordance with the default position established by ss 398 and 399 of the FW Act. For the reasons explained, the conference was attended only by Ms Walker together with a support person. The format of the conference was that Ms Walker took an oath and affirmed the contents of her witness statement, and then I took her through the contents of her witness statement, asked her a number of questions about factual matters asserted in Mr Smith’s witness statement, and asked her about those matters required by the FW Act to be taken into account in the assessment of compensation which appeared to be relevant to her case. Given the unusual circumstances of the matter earlier described, I did not formally mark any statement or document as an exhibit in the proceedings. Although on one view the respondent’s failure to attend the determinative conference means that the respondent was not entitled to have any of the material it had previously filed taken into account as evidence, I have decided having regard to the Commission’s obligations under s 577 to take into consideration all the material filed by both parties, but I will give very significant weight to the fact that Ms Walker gave evidence on oath whereas for the respondent I only have the unsworn and untested witness statement of Mr Smith 1 plus a number of miscellaneous documents.

The facts

[6] As earlier stated, the respondent employed Ms Walker as a property manager from 1 November 2016. Ms Walker had earlier worked as a nurse, and had not previously worked in real estate property management. The respondent’s Fenwick Realty business is located in Blayney, and appears to be extensively involved in the management of leased residential properties. Mr Smith and Ms Walker, and perhaps Ms Klindokput, were the only persons performing work for the business while Ms Walker was employed there. Ms Walker was required to use “Property Tree”, an online property management platform, to perform her duties. Ms Walker was initially employed for 15 hours per week at a rate of $25.00 per hour. There was no written contract of employment. Her hours of employment changed throughout the employment, and at one stage reached full-time hours during a period in which Mr Smith was in hospital. Ms Walker’s evidence was that her rate of pay did not consistently stay at $25.00 per hour, and sometimes dropped as low as $20.00 per hour. It does not appear to be in dispute that at the time of the termination of Ms Walker’s employment, she was back to working 15 hours per week at the rate of $25.00 per hour.

[7] Ms Walker’s evidence was that at no point during her employment was she ever given a formal warning concerning her conduct or performance. Mr Smith’s witness statement alleged that he had a number of performance issues with Ms Walker over the course of her employment, and alleged that she failed to attend to her tasks, had been the subject of complaints from customers and had engaged in unethical conduct. In the material which he filed was included a letter signed by him, addressed to Ms Walker and dated 4 March 2018 entitled “Re Performance Review”. This letter complained that the business had lost as many property management clients as it had gained over the previous 14 months with a consequent loss to the business’s rent roll, and sought to blame this largely on identified shortcomings in Ms Walker’s performance. The letter concluded with the following: “This has to stop… We should be earning a good profit, but with the way its run, there is no profit without sales. Without sales, your job would not be here. I need assurance of a big all-round improvement this month. Otherwise I will have to make changes which will involve you.”

[8] Ms Walker’s evidence was that this letter was never given to her during her employment and she had never seen it until it was served on her by the respondent in accordance with the directions in these proceedings. In the circumstances of this matter I am unable to be positively satisfied that this document filed is actually a performance review letter issued to Ms Walker during her employment.

[9] Mr Smith also filed a series of typed documents which appear to constitute records of meetings which he had with Ms Walker in the period October-December 2018. They refer to numerous work matters which Ms Walker was required to attend to as well as other matters, and most have a stream of consciousness quality about them. For example a note dated 8 October 2018 included the following:

“Ruth carter husband is putting two door closers on hobby farm road KRISTIE CONTACTED AND CONFOIRMED WITH RUTH

17 stillingfleet street phoned could not connect Ariel I have given combat services number fix at her own cost done WILL WAIT FOR TWO WEEKS before she can afford done

Shirley wants some boxes removed from her land near the shed I will organise with max s done

Steven gallons wife come in about payments for storage please ring early 10.00am due to her work [telephone number omitted]

Sue Webb phone how much does she owe please phone back

Aaron palmer looking for storage shed in the next two weeks [telephone number omitted] Benjifield –hieka will be leaving the end of this week

I am waiting for Denise to phone about new ideas for shop and cost

Do not forget about the curry muncher

Took Winston to the vets yesterday has a serious heart liver and fluid on the lungs had a ultra sound and chest x-ray plus some pin killers take him again tomorrow morn for second check up blood test done the bloating in his stomach is not food or fat its caused by his liver he is in a bad way, we see what we can do to make him comfortable” [sic]

[10] Some of the documents contain occasional comments which may be read as critical of Ms Walker’s performance. However it is difficult to identify what the documents actually are. Mr Smith described them in his witness statement as “…letters/emails sent to Ms Walker over the course of her employment…”. However the documents do not have the appearance of being either letters or emails, and I note that in the following sentence in his witness statement Mr Smith said that “…the majority of the evidence was lost in the fire” (a matter I will deal with later in this decision). Ms Walker again said that she had never seen these documents before these proceedings, although she was familiar with a number of the work matters that were referred to in the documents and accepted that she had a daily discussion with Mr Smith concerning work matters that had to be dealt with. As best as I can tell, they are close to verbatim notes of meetings which Mr Smith had with Ms Walker (although they do not purport to record anything said by Ms Walker), but it is not possible to say how or when they were prepared. I do not accept that they constitute warnings communicated to Ms Walker about her work performance.

[11] It is clear from the material that the respondent’s business was not travelling well during 2018 and that a significant number of property management clients had been lost. Mr Smith appears to blame this substantially on Ms Walker, while Ms Walker’s evidence was that it was because Mr Smith was “unprofessional” and had become embroiled in litigation because he had “stolen the rent roll” of another business. I do not consider it is necessary for me to resolve this issue for the purpose of determining Ms Walker’s application, nor could I do so in any event on the basis of the limited material before me.

[12] During the course of her employment Ms Walker became the tenant of a property being managed by the respondent, and her daughter also became the tenant of separate property managed by the respondent.

[13] In about September 2018 an issue arose concerning Ms Walker’s superannuation. Ms Walker was a member of the HESTA fund arising from her previous employment as a nurse, and realised that although she had nominated this as her fund the respondent had failed to make any contributions. She raised this with Mr Smith, and consequently the respondent incorrectly made a single payment of $682 into Ms Walker’s bank account. A dispute arose as to whether this amount should be deducted from future payments owing to Ms Walker so that it could be sent to her superannuation fund. Ms Walker gave evidence at the hearing that she had reported the respondent to the Australian Taxation Office, and that the respondent had suddenly paid $1000 into her superannuation fund the day before the hearing.

[14] What Mr Smith said about this incident in his witness statement is illuminating as to his credibility, or lack thereof. He said:

“18. Mrs Walker was paid her superannuation into her nominated account during her first 6 months of employment. After 6 months it was noticed by Fenwick Realty’s accountant that Mrs Walker’s superannuation was going directly into her private account not her superannuation account. Fenwick Realty’s accountant paid Mrs Walker her holiday pay excluding her superannuation.

…

19. I questioned Mrs Walker on why she did not disclose that she had been receiving an extra $620 on top of her wage. Mrs Walker advised she believed it was a ‘bonus’. Mrs Walker requested the superannuation be paid directly into her account and she was informed that this is illegal. Fenwick Realty’s accountant is now looking into this matter.”

[15] The above gives the impression that Ms Walker had been receiving $620 every week in addition to her wage (an amount that was significantly more than her wage) for a period of six months, and that this was somehow her fault because she failed to “disclose” this. This is pure fiction, since the documents disclose that only a single payment was made in the circumstances earlier described.

[16] One of the many documents which Mr Smith filed together with his witness statement was one apparently dated 22 November 2018 which read as follows (spelling and capitalisation as per original):

“termination pf present work

Dear Beth I HAVE ASKED YOU FOR THE LAST WEEKS ABOUT YOU JOB HAS GOT TO BE CHANGED THE REASON

YOU HAVE BEEN WITH ME FOR THE LAST 18 MONTHS, COMING FROM A TOTALLY DIFFERENT FIELD, I HAVE TRAINED YOU AND PAID PROFESSION HELP TO GET TO WHERE WE ARE NOW, WITH NO OFFICE SKILLS AND VERY LITTLE COMPUTER SKILLS IT HAS BEEN VERY HARD FOR ME. HAVING TO ORGANISED ALL THE ADVERTISING WINDOW DISPLAY MAINTENANCE SIGNS UP AND DOWN IN GOING REPORTS OUT GOING RENT INCREASES AND BEING CONTINUALLY ASKED QUESTIONS AND ALWAYS GAVE YOU GUIDANCE PLUD DOING ALL SALES THE WORK TO GO WITH IT AND LISTINGS WHERE I MAKE THE MONEY

I GAVE YOU A GOOD OFFER THAT MOST PEOPLE WITH 10 YEARS OF SKILL IN THE REAL ESTATE INDUSTRY WOULD BE GLAD TO TAKE SUCH AN OPPORTUNITY, 500.00 A WEEK 30% OF ALL MY LISTINGS THAT YOU SELL 50% OF ANY NEW LISTINGS YOU BRING IN IF YOU SELL AND 30% IF SELL PLUS TRAIN YOU IN SALES AND LISTINGS STILL NO RESPONSE I WENT AROUND TO SEE YOU TODAY LATE AFTERNOON BUT YOU HAD ALREADY GONE I THOUGHT BECAUSE YOU WERE SICK YOU MIGHT BE AT HOME

I THANK YOU FOR THE WORK YOU HAVE DONE AND THE LOYALTY AND HONESTY YOU HAVE SHOWN I HAVE TRIED TO REPAY YOU BY CHEAP RENT FOR YOU AND YOUR DAUGHTER HOLDING 4 AMOS STREET FOR 5 WEEKS TILL YOUR DAUGHTER COULD MOVE IN AND ALWAYS PAYING AS MUCH OR MORE THAN A SKILLED PROPERTY MANAGER OR TRAINED SALES PERSON PLUS LUNCH AND A CASH BONUS TO SAY THANK YOU GIVING YOU FREEDOM OF ROSTER AND MOVEMENT

I HAVE NOW 3 PEOPLE READY TO START ON WHAT I OFFERED YOU PLUS I WILL NOT NEED TO TRAIN ONLY CHECK ON THEIR WORK OCCASIONALLY . I CAN NOT DO THAT AMOUNT OF WORK ON PROPERTY MANAGEMENT AND SALES SO I CAN NOT WAIT ANY LONGER IF YOU DO NOT WANT THE POSITION I OFFER I WILL HAVE TO LER YOU GO, I CAN NOT AFFORD ABOUT 30.00 A HOURS 5 HOURS A WEEK AND I STILL DO 60% OF THE WORK I AM TO TIRED AND DO NOT WANT THE STRESS PLUS THE PROPERTY MANAGEMENT HAS LOST A LOT OF PROPERTIES INCOME HAS COME DOWN AND WAGES STILL TO HIGH AND NOT ENOUGH WORK IS DONE I WILL NEED A ANSWER TODAY 23/11/2108 I LEFT YOU A NOTE ON TUESDAY AND ASKED AGAIN WEDNESDAY THURSDAY OFF SICK YES OR NO IF NO YOU TALK TO ME WHEN YOU WOULD LIKE TO CLEAR YOUR DESK, I HOPE YOU SAY YOU ARE STAYING BUT I WILL UNDERSTAND AND HELP ANY WAY I CAN

Yours Sincerely

Edwin Smith”

[17] Mr Smith said nothing about this document in his witness statement. Ms Walker did not mention it in her evidence. There is no evidence that it was ever sent to Ms Walker. The most that can be said about it is that, if it was in fact written by Mr Smith on or about 22 November 2018 as the date on it suggests, it demonstrates that Mr Smith was considering restructuring the basis upon which Ms Walker performed and was remunerated for her work.

[18] In about November or early December 2018, Mr Smith informed Ms Walker that the office would be closing down for a five-week period from 21 December 2018, she would not be required to return to return to work until 4 February 2019, and accordingly she was required to take five weeks leave from her accrued leave entitlements. This was in contrast to the position in previous years, when the office had closed down only for a two-week period over Christmas. Ms Walker’s evidence was that upon commencing leave, she had travelled to Queensland to stay with friends. She was not paid for the five weeks’ annual leave before she left. I see no reason not to accept this evidence.

[19] Mr Smith’s witness statement asserted the following:

“Mrs Walker was requested to complete and balance the accounts for end of the month for Fenwick Realty on 28 December 2019 [sic; presumably 2018]. I was advised by Mrs Walker that the accounts were short $203 to pay all the landlords and $2994 of commission was missing from the trust. Mrs Walker could not account for where the missing money from the trust accounts had gone. I raised my concerns with Mrs Walker that she should be aware and accountable for where the money is in the trust account. Mrs Walker rolled her eyes and left the office.”

[20] This cannot be accepted. Ms Walker was in Queensland on 28 December 2018. The above passage is inconsistent with Mr Smith’s own statement that the office had closed from 21 December 2018 and that Ms Walker was required to take leave. What is clear is that on 28 November 2018 Ms Walker was sent two emails of significance concerning her employment. The first was an email sent at 6.00pm by the respondent’s accountant, Ms Leanne Boyce, which was entitled “Edwin Fenwick realty – final pay 27^th Dec”. The email in whole read as follows (underlining added):

“Hello Beth

In relation to your employment with Edwin Fenwick Realty, your final termination pay of leave owing has been calculated to 27^th December 2018 as attached.

You were last paid out leave owing as at 6 January 2018, thus the leave owing is from that date to now, less one day leave taken for 27^th December 2018. You were also earlier overpaid an amount of $682.00 inadvertently which was to be for superannuation contributions that had to be paid to your nominated Superannuation Fund. This overpayment has been deducted from the leave owing (as it has not be repaid to date) and will subsequently be paid to your nominated Fund. Thus the final amount, less the tax to be withheld, leaves a net payment owed to you of $591.00. (refer further details, on the attached calculation).

Legislation requires employers to remit superannuation contributions to a complying superannuation fund (it cannot be paid directly to the employee), and the details of your Super Fund that you have nominated are attached (please advise if this is not your current fund). We will be paying the required superannuation contributions and the catch up payment to your nominated Superannuated Fund in due course.

Kind Regards

Leanne”

[21] The amount of annual leave paid out was calculated on the basis that Ms Walker had 3.92 weeks of leave accrued (58.8 hours at 15 hours per week), that she had taken 27 December 2018 as leave (amounting to 5 hours), and that from the remaining 53.3 hours, $682 was deducted as “repayment of Super incorrectly paid to Beth”. After the deduction of tax, $591.00 was paid.

[22] The second email was sent by Mr Smith at 6.25pm to Ms Klindokput, who then forwarded it to Ms Walker at 6.28 PM. It simply stated: “PLEASE FORWARD YOU’RE A,B,N NUMBER AND DETAILS ON THE 31/12/2018 WE WILL PAY $125 IN TO THAT ACCOUNT THAT DAY ONLY WE NEED A TAX INVOICE FOR THAT DAY SO PLEASE SEND THE DETAILS” (sic).

[23] Mr Smith simply did not address these two emails in his witness statement. It is not possible to assign a logical explanation to the second email, although the reference to an ABN is significant for reasons which will shortly become apparent.

[24] Ms Walker did not see and read these emails until approximately 4 or 5 January 2019. She understood from the first email that she had been dismissed. She was unable to assign any explanation to the second email. Ms Walker’s evidence was that she returned from Queensland on about 7 January 2019, and on about 9 January 2019 she noticed that the Fenwick Realty office in Blayney was open despite Mr Smith’s statement that it would be closed until 4 February 2019. She went into the office to find out what was going on and seek an explanation about the emails she had received, and she had a discussion with Mr Smith. Ms Klindokput was also present. Her evidence was that Mr Smith “acted like he didn’t know what she was talking about”, and then handed her a document in the nature of a proposed contract which he required her to sign before she re-commenced work on 4 February 2019. The document (which was dated 31 December 2018) contained the following substantive provisions:

“As property manager and agreement to act and take on all responsibilities of a licenced and skilled property manager including daily banking and end of month trust accounting, Marketing media window display, you have agreed to take this position as follows Monday to Friday from 10.00am. to 3.00 pm.

The method of payment is $500.00 a week to be paid to the tax invoice with a A.B.N. number you will submit each Monday with all the relevant details and be paid on the next day in to your nominated account this is a flat fee where you pay your own tax and superannuation no holiday pay, any bonus will be offered for performance related like bring in new rentals, please sign both copies.”

[25] Beneath the above the document left spaces for it to be signed and dated by Ms Walker, Mr Smith and Ms Klindokput.

[26] Mr Smith explained that “business was going down”, and that Ms Walker would now work under an ABN and there would be no tax, superannuation or holiday pay. Ms Walker described her reaction as being “gobsmacked”, and she left the office without giving a response. It is doubtful whether Ms Walker had a proper comprehension of what was going on, but it is objectively plain that Mr Smith was requiring Ms Walker to return to work as a purported independent contractor because the proposed contract involved her operating under an ABN, not receiving any employment entitlements and not having taxation deducted from her remuneration.

[27] Again, Mr Smith simply did not address this proposed new contract in his witness statement. He did not deny anything which Ms Walker said about this in her statement or challenge the authenticity of the document which Ms Walker provided. He simply stated the following:

“I requested Mrs Walker attend Fenwick Realty on 6 January 2019 to discuss her employment, return to work on 4 February 2019 and raise concerns of over $3000 missing from the trust account.”

[28] I accept Ms Walker’s evidence about this episode.

[29] A number of significant events then occurred on 14 January 2019, although it is difficult to determine the precise order in which these events occurred. At 10.44am Ms Walker received an email from Property Tree stating that “Edwin Smith has revoked your Property Tree access for Edwin Fenwick Realty”. This meant that Ms Walker could no longer perform property management work for the respondent. The respondent also provided Ms Walker with a letter dated 14 January 2019 and signed by Mr Smith which, omitting formal parts, stated:

“I will bring you up to date so you can keep for your records, well a lot has happened in the last two years, I took a gamble and a big responsibility, for bringing you on board with no experience at all in real estate and no office skills or computer, I have paid for your training and The latest soft ware plus made sure you always go the above ward wage and bonus and lunch and CDP paid for, plus cheap rent for you and free water plus cheap rent for your daughter, I have done my best plus assisting you with all the questions help and guidance it's been very stressful for I have to follow through on all property management plus sales, The bad news is Fenwick property rent roll has gone from 62 to 36 in two years and wage gone up. It's very bad the value halved and commission now will not pay for wages without sales. I can not afford to support the rent roll. Also although you are responsible as property manager for communication with landlords and tenants and all trust accounting as The licence is my responsibility for all, In December you balance off I had to pay in the property management rent roll $203.00 which is very strange because their was plenty money in property tree to pay The Agency, but as you have stated you do not know where $2994.00 has gone and their was no money left in The Trust account so The help Complete Real Estate professional property management team which are going back to 2017 may to up to date again, This will cost around $1500.00 second time in one and a half years. Unit all is solved there is no more work for you due to lack of funds loosing property management gaining none in two years from you and what's I brought in we have lost, I know you have tried your best and property management is a high skill and very stressful and thank you from The bottom of my heart for doing your best when I want in hospital having open heart surgery, but with high legal fees all to do with property management and loosing so many properties has left me with no option as you are aware we have spoke about this many time, but no improvement only loses and high cost up plus I having to do 20 hours a week on property management and not get paid, when The accounts are finished and up to date we can talk until, Then I will do all myself, If you wish to talk above, please phone to make a suitable time for you and I wish you all the best in The new future.” (sic)

[30] It is not entirely clear by when or by what means this letter was provided to Ms Walker. The same day, Ms Walker went to the Fenwick Realty office and collected her personal belongings. At 4.49pm Ms Walker electronically filed her unfair dismissal application, and at 5.03pm her financial advisor sent an email to the respondent’s accountant saying Ms Walker “has asked me to look into her wages at Fenwick realty and find out if she has been paid correctly”, and requesting payslips, pay records and superannuation records to assist her with this task.

[31] On about 16 January 2019 the respondent issued eviction notices to both Ms Walker and her daughter to vacate their leased premises in 90 days. Ms Walker gave evidence that since she filed her unfair dismissal remedy application Mr Smith has harassed her and her daughter by driving past their houses numerous times, by following her in his car and by sending multiple emails and texts. Mr Smith described these allegations as false in his witness statement.

[32] On 4 February 2019 the respondent’s office was subject to what Mr Smith describes as an “arson attack” which he said was under investigation by the police. The position appears to be that the office was destroyed and Mr Smith is now operating the business from home.

[33] Following her eviction, Ms Walker moved to the small town of Mungindi on the Queensland side of the border, where she has a number of friends. She has not obtained alternative employment, nor has she received any social security benefits, and she is living off her savings. She is attempting to gain nursing work by distributing her CV amongst local employers.

Preliminary matters

[34] Section 396 of the FW Act requires that four specified matters must be decided before the merits of Ms Walker’s application may be considered. I will deal with each of these in turn.

Section 396(a) – time for making application

[35] Ms Walker’s application was made within the 21-day period required by s 394(2).

Section 396(b) – whether person protected from unfair dismissal

[36] I am satisfied that Ms Walker is a person protected from unfair dismissal within the meaning of s 382. She was employed by the respondent for a period of in excess of two years and, if she was not covered by a modern award, she certainly earned less than the high income threshold.

Section 396(c) – whether dismissal consistent with Small Business Fair Dismissal Code

[37] It is clear that the respondent was at all relevant times a small business employer within the meaning of s 23. The respondent did not contend in its Form F3 or otherwise that there was a dismissal of Ms Walker consistent with the Small Business Fair Dismissal Code (Code); as earlier stated it rather contended that there was no dismissal at all. Given the denial of a dismissal, it cannot be concluded that the respondent believed that Ms Walker had engaged in serious misconduct justifying summary dismissal. For the reasons explained later in this decision, there was no valid reason for dismissal, Ms Walker was not warned that she was at risk of being dismissed or that there was a need for improvement in her work performance or behaviour, nor was she given any opportunity to respond or a reasonable chance to rectify any perceived problem. Accordingly if there was a dismissal, it was not consistent with the Code.

Section 396(d) – whether dismissal was a genuine redundancy

[38] The respondent did not contend, nor is there any basis to conclude, that there was a dismissal of Ms Walker which was a case of genuine redundancy within the meaning of s 389.

Was Ms Walker unfairly dismissed?

[39] Section 385 of the FW Act provides that a person has been unfairly dismissed if:

(a) the person has been dismissed;

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

(c) the dismissal was not consistent with the Code; and

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

[40] I have already dealt with s 385(c) and (d): any dismissal of Ms Walker was not consistent with the Code, nor was it a case of genuine redundancy. Accordingly it only remains necessary to deal with s 385(a) and (b) – that is, whether there was a dismissal, and whether any such dismissal was unfair.

Was there a dismissal?

[41] In its Form F3 response to Ms Walker’s unfair dismissal remedy application, the respondent contended as follows:

“The applicant has not been dismissed.

The applicant was advised numerous times during October 2018 and November 2018 of the significantly reduced business trading conditions and that the office would be closing for the Christmas period and right through January. It was anticipated for her to return in February 2019 and the applicant requested her leave owing to be paid out in full, which was calculated and paid to the applicant on 7 January 2019.

The applicant subsequently attended the office on 14 January 2019, with limited communication and simply advised she was collecting all of her belongings and departed the office.”

[42] I do not accept the above contention, which in light of the evidence before me is completely lacking in credibility. I am satisfied that Ms Walker was dismissed by the respondent within the meaning of s 386(1)(a) of the FW Act - that is, she was terminated on the respondent’s initiative. This is unequivocally demonstrated by the following events:

(1) The email sent by the respondent’s accountant to Ms Walker on 28 December 2019 which contained her “final termination pay of leave owing”. Mr Smith did not attempt to give any alternative explanation for this email.

(2) The new contract which Mr Smith required Ms Walker to sign on about 9 January 2019 before she could return to work would have made her a (purported) independent contractor to the respondent, and necessarily implied the termination of the pre-existing employment relationship.

(3) The respondent’s removal of Ms Walker from Property Tree on 14 January 2019 demonstrates a clear intention that she would no longer perform property management work for the respondent.

(4) The respondent’s letter of 14 January 2019 to Ms Walker can only be read as communicating to her that her employment was at an end.

[43] I infer from the above events that, having regard to the respondent’s business difficulties and the issue with Ms Walker concerning the non-payment of her superannuation, a decision was made (presumably by Mr Smith) at some time prior to the Christmas closure of the office to terminate the employment relationship with Ms Walker and require her to resume work in February 2019 as an independent contractor. When Ms Walker failed to sign the proposed new contract, the respondent took steps to make clear that the working relationship was terminated completely.

[44] The evidence did not demonstrate that Ms Walker “requested her leave owing be paid out in full”, as the respondent asserted but, even if she did, that is hardly surprising since she was required to take five weeks off work over the Christmas-New Year period. The fact that Ms Walker collected her personal belongings from the office on 14 January 2019 is wholly explained by her formation of the belief that her employment had been terminated once she read the email from the respondent’s accountant of 28 December 2018. There is simply no evidence that Ms Walker ended the employment of her own volition.

Was the dismissal harsh, unjust or unreasonable?

[45] In considering this question of whether the dismissal was harsh, unjust or unreasonable, s 387 of the FW Act requires the Commission to take into account a number of matters specified in paragraphs (a) to (h) of the section. I will deal with each of these matters in relation to Ms Walker’s application in turn below.

Section 387(a) - Whether there was a valid reason for the dismissal related to the person’s capacity or conduct

[46] There was no valid reason for Ms Walker’s dismissal based on her capacity or conduct. Having denied that there was a dismissal, the respondent did not contend that such a reason existed. Insofar as there was, in the terms earlier set out, reference to $3000 missing from the business’ trust account, there was no evidence that this was Ms Walker’s responsibility, nor could I positively be satisfied on the material before me that it even happened. The fact that Mr Smith evidently intended for Ms Walker to return to work on 4 February 2019 as a purported independent contractor demonstrates that he did not in truth regard this as a matter relevant to her conduct.

Section 387(b) and (c) - Whether the person was notified of that reason and was given an opportunity to respond to any reason related to the capacity or conduct of the person

[47] The dismissal not having occurred by reason of Ms Walker’s capacity or conduct, s 387(b) and (c) have no application to the facts of this case.

Section 387(d) - Whether there was any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[48] There were no discussions as such relating to the dismissal, so the issue of a support person does not arise.

Section 387(e) - If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal

[49] The evidence does not support the proposition that Ms Walker’s dismissal related to any unsatisfactory performance on her part. The respondent did not contend that there was a dismissal related to unsatisfactory performance, although it criticised her performance in some respects. That Ms Walker’s performance was not such as to require termination of the working relationship is demonstrated by the fact that, as earlier stated, the respondent’s intention was that Ms Walker was to continue working for the business albeit as a purported independent contractor. I also note the following passage in Mr Smith’s witness statement (emphasis added):

“Mrs Walker was a valued employee and treated with fairness at all times despite ongoing performance issues. Mrs Walker was often bought lunch by Fenwick Realty and received a $50 bonus often.” 2

[50] Accordingly the issue of whether there was any warning of unsatisfactory performance does not actually arise for consideration under s 387(e) on the facts of this case. In any event, as I have already found, I am not satisfied that there was ever any proper warning of unsatisfactory performance.

Section 387(f) and (g) - The degree to which the size of the employer’s enterprise or 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 

[51] The Fenwick Realty business is a small one, and there is no evidence that it had any dedicated human resource management specialists or expertise. This no doubt had some effect on the procedures followed in effecting Ms Walker’s dismissal. However this does not weigh against a finding that the dismissal was harsh, unjust and unconscionable since, for the reasons explained immediately below, the dismissal was effected in a fundamentally dishonest manner that is not explained or excused by the fact that it is a small business with no human resources expertise.

Section 387(h) - Any other matters that the Commission considers relevant 

[52] I consider three matters to be relevant. The first is that what I have inferred was the actual reason for the dismissal was completely illegitimate. The respondent sought unilaterally and peremptorily to convert Ms Walker’s engagement from one as an employee to one as an independent contractor, and terminated her employment in that context. There was no basis upon which Ms Walker could properly have been engaged as an independent contractor, since her work could in no sense be characterised as involving her carrying on a business of her own as distinct from serving in the respondent’s business. 3 It was simply an attempt by the business to avoid its obligations as an employer. Ms Walker’s failure to accede to this course (noting that it is doubtful that she properly comprehended what was actually happening) caused the respondent to take steps to make clear, to the extent that the business had not already done so, that the employment relationship was at an end.

[53] Second, the business effected the dismissal in a fundamentally dishonest manner. It did not consult with Ms Walker as to what it intended to do or give any notice of this. Mr Smith in particular tried to obscure the fact that Ms Walker’s employment was being terminated at all by sending her on leave on the basis that she would return in February 2019, having a somewhat oblique termination letter sent to her by his accountant, pretending not to know about this when Ms Walker asked about it, and then requiring her to sign a new contract to establish an independent contractor relationship. At no stage did Mr Smith frankly explain to Ms Walker what he was doing, and the dishonesty continued into the proceedings before the Commission with the respondent’s contumacious denial that any dismissal had occurred at all.

[54] Third, the dismissal has resulted in unemployment for Ms Walker. Her eviction, which followed hard upon her dismissal, has resulted in her relocating her residence. She is 58 years old and lives in a regional area, so her future employment prospects cannot be assessed optimistically.

Conclusion

[55] I am satisfied that Ms Walker’s dismissal was harsh, unjust and unreasonable. There was no valid reason for the dismissal based on her capacity or conduct, she was not dismissed for unsatisfactory performance, the actual reason for her dismissal was illegitimate, the dismissal was effected in a fundamentally dishonest manner, and the dismissal has caused her to be unemployed with poor future employment prospects.

[56] Accordingly I find that Ms Walker was unfairly dismissed.

Remedy

[57] I do not consider that reinstatement is an appropriate remedy, given that Ms Walker has accused Mr Smith of harassing her after the employment ended and has in any event relocated to Queensland after her eviction by the respondent from her Blayney residence.

[58] I consider that an award of monetary compensation to Ms Walker would be appropriate given that her unfair dismissal has caused her to be unemployed. It is therefore necessary for an assessment to be made as to the amount of compensation which should be ordered. In assessing compensation, it is necessary under s 392(2) of the FW Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a)-(g) of the subsection, and it is also necessary to consider the other relevant requirements of s 392. I note that the respondent has not made any submission on the question of compensation. I would have directed the respondent’s attention to the matters required to be taken into account under s 392 and sought a response to each matter had the respondent attended the hearing, but as earlier explained the respondent refused to attend and consequently denied itself the opportunity to be heard as to the quantification of compensation. There can be no proper complaint of a denial of procedural fairness in that circumstance. My assessment as to the quantum of compensation will be based on the methodology articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. 4

Section 392(2)(c) - Remuneration that would have been received if the dismissal had not occurred

[59] If Ms Walker had not been dismissed, I consider it unlikely that Ms Walker’s employment would have continued much beyond the fire which destroyed the Fenwick Realty office on 4 February 2019. Given that Mr Smith is now conducting the business from his home, apparently without the assistance of anyone other than his wife, it is difficult to envisage how there could have been an ongoing role for Ms Walker.

[60] At the time of the dismissal, Ms Walker was earning $375.00 per week (15 hours per week at $25.00 per hour). I consider that if Ms Walker’s employment had continued in accordance with past practice, she would probably have been required to take approximately two weeks’ leave over the Christmas/New Year period and would therefore have returned to work in the week beginning 7 January 2019 (noting that, as earlier stated, the office did in fact re-open that week). It is likely that she would have then returned to work and continued to work until (say) the end of the week of the fire (8 February 2019), by which time her role would have been assessed to be non-viable. She would then have been given or paid out the three weeks’ notice required by s 117(3) of the FW Act (two weeks’ pay under s 117(3)(a) and an additional one week’s pay under s 117(3)(b) because Ms Walker is over 45 years old). That amounts to an additional eight weeks’ pay in total, or $3,000.00 (8 x $375.00), that Ms Walker would have received if she had not been dismissed.

Section 392(2)(e) and (f) - Remuneration earned and income reasonably likely to be earned

[61] Ms Walker had not earned any other income from the period 28 December 2019, when her dismissal took effect, up to the date of the hearing. There is no basis to take into account any remuneration earned or likely to be earned after that date.

Section 292(2)(g) - Other matters

[62] I do not consider that there would be any basis for any deduction for contingencies. In relation to taxation, compensation should be determined as a gross amount and it should be left to Ms Walker to pay any amount of taxation required by law.

Section 392(2)(a) - Viability

[63] There was no evidence that any particular amount of compensation that was ordered would have an adverse impact on the viability of the respondent’s business.

Section 392(2)(b) - Length of service

[64] Ms Walker’s period of service does not justify any adjustment to the amount of compensation that might otherwise be ordered.

Section 392(2)(d) - Mitigation efforts

[65] I am satisfied that Ms Walker has attempted to mitigate her loss by seeking alternative employment.

Section 392(3)

[66] Ms Walker did not commit any misconduct, so no deduction is required under s 392(3).

Section 392(4) - No component for shock, distress, humiliation or other analogous hurt

[67] I confirm that the compensation amount assessed contains no component for any shock, distress, humiliation or other analogous hurt suffered by Ms Walker as a result of the manner of his dismissal.

Section 392(5) - Compensation cap

[68] The amount of compensation proposed is below the compensation cap.

Section 393 - Instalments

[69] I consider that the compensation should be paid in a single amount. There is no reason why the compensation should be payable in instalments.

Conclusion

[70] I consider that a compensation amount of $3,000, less applicable tax, would be appropriate in all the circumstances. The amount shall be payable in 14 days. An order to give effect to this conclusion will be issued in conjunction with this decision.

VICE PRESIDENT

Appearances:

E. Walker on her own behalf

Determinative Conference details:

2019.

Bathurst:

11 April

Printed by authority of the Commonwealth Government Printer

<PR703730>

 1   Mr Smith’s statement describes itself as having been sworn, but on its face it clearly was not.

 2   Although Ms Walker denied ever having received a bonus.

 3   See Hollis v Vabu Pty Limited [2001] HCA 44, 207 CLR 21 at [39]-[40]

 4   [2013] FWCFB 431; 229 IR 6