| [2019] FWC 28 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Dax Knight
v
Total Lining Systems Pty Ltd
(U2018/7089)
COMMISSIONER CAMBRIDGE |
SYDNEY, 15 JANUARY 2019 |
Unfair dismissal - jurisdictional objections - s. 386 - resignation - no constructive dismissal - applicant subsequently dismissed summarily - subsequent dismissal was not consistent with the small business fair dismissal code - dismissal found to have been harsh, unjust and unreasonable - limited compensation Ordered.
[1] This Decision involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was made by Dax Knight (the applicant). The respondent employer is Total Lining Systems Pty Ltd (ABN: 37 155 445 417) (the employer).
[2] The application was filed at Sydney on 9 July 2018, and the employer filed a response to unfair dismissal application, Form F3, on 1 August 2018. The application indicated that the date that the applicant was dismissed was 19 June 2018. The application also mentioned that a verbal resignation had been provided on 18 June 2018. Consequently, in respect to the termination of employment occurring on either 18 or 19 June 2018, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.
[3] The Form F3 provided by the employer raised jurisdictional objections to the application on the basis that the applicant was not dismissed, and alternatively, that the employer was a small business and the dismissal was consistent with the Small Business Fair Dismissal Code (SBFD Code). Notwithstanding the jurisdictional objections raised by the employer, conciliation of the matter was attempted without success.
[4] Subsequently, the Fair Work Commission (the Commission) issued Directions which required the Parties to file and serve all evidence and other material concerning both the substantive application and the jurisdictional objections raised by the employer. The application and the jurisdictional objections raised by the employer were listed for Arbitration Conference/Hearing before the Commission on 25 October 2018.
[5] Further conciliation of the claim was traversed at the commencement of the scheduled Hearing held on 25 October 2018. Further conciliation was unsuccessful, and the matter proceeded to a Hearing which dealt with the determination of the jurisdictional objections raised by the employer, which involved firstly, the question of whether the applicant was a dismissed employee, and secondly, whether any dismissal of the applicant was consistent with the SBFD Code.
[6] At the Hearing, the applicant represented himself. The applicant gave evidence as one of two witnesses who were called to provide evidence in support of the unfair dismissal claim. In addition, the Commission permitted four further witness statements made on behalf of the applicant to be introduced into evidence without the deponents of those statements being called as witnesses. The employer was represented by its Director and Secretary, Mr S Short, who provided evidence as the only witness called on behalf of the employer. The employer was also permitted to introduce into evidence a further witness statement from an individual who was not called as a witness.
[7] The applicant commenced employment with the employer on 14 February 2012. However, the initial engagement of the applicant was, by agreement, deliberately misrepresented to be that of engagement of the applicant as an independent contractor rather than an employee.
[8] The employer operates a business which it describes as involving the design, supply, and installation of engineered geosynthetic lining systems. The work of the applicant initially involved the on-site supervision, coordination and organisation of particular projects undertaken by the employer.
[9] In about May 2015, the applicant was formally engaged in the position of the employer’s Business Development Manager. The Business Development Manager position included a significant wage increase from $50,000 per annum to $105,000 per annum. At the time, this promotion and the associated wage increase comprehended payment to the applicant of what was described as outstanding commissions that were owing to the applicant. The Business Development Manager position involved a diverse role of functions including; estimating, contractual negotiations, project organisation, and a variety of other administrative office based functions as distinct from the applicant’s previous on-site work.
[10] The personal and professional relationship between the applicant and the employer’s Director and Secretary, Mr Short, vacillated over time particularly as the demands of the Business Development Manager position increased as the employer’s business expanded, and also as the business encountered certain financial constraints from time to time. In a period of time roughly between 2015 and 2017, wage payments to the applicant were frequently delayed, and disputation arose between the applicant and Mr Short about various employment related matters including amounts that the applicant believed he was owed as unpaid commission or bonus payments.
[11] The applicant became increasingly frustrated with what he found to be the difficult approach adopted by Mr Short during negotiations regarding the various employment related contests, and which generally did not result in the applicant obtaining what he sought in respect of commission or bonus payments to which he believed he was entitled. However, in October 2017, the applicant and Mr Short reached an agreement which recognised that the applicant was entitled to an accumulated commission payment of $40,063.82. Mr Short stipulated that the accumulated total commission payment could not be paid as a lump sum but would be paid in instalments over time. Irregular instalment payments were commenced by Mr Short, and by the time of the applicant’s termination of employment an amount totalling $3,980 was paid to the applicant, leaving an outstanding figure of $36,083.82.
[12] In about April 2017, the applicant began to publicise and promote his work as a personal and professional development coach operating under the business name of Dax Knight Coaching. The applicant developed his coaching business as a secondary occupation which was undertaken without any expressed objection from the employer.
[13] On 11 February 2018, Mr Short provided the applicant with a wage increase from $105,000 per annum to $120,000 per annum. In May 2018, the applicant requested that further instalment payments of the outstanding commissions be paid. However, Mr Short did not make any further commission instalment payments, but instead indicated that he wished to undertake a review of the applicant’s performance and the terms and conditions of his employment contract generally.
[14] On 7 June 2018, the applicant sent Mr Short an email which requested that a meeting be arranged to discuss what he asserted was the poor treatment that he was being subjected to by Mr Short. Mr Short responded by indicating that he believed that there was a need to change the terms of the applicant’s employment, and he indicated that the applicant had been the employer’s highest paid employee and he was concerned that the applicant’s performance was not reflective of this remuneration level.
[15] On 12 June 2018, the applicant sent a further email to Mr Short which, inter alia, advised that as a result of anxiety that the applicant had been experiencing in the work environment, he had made arrangements to see a medical practitioner and would not be at work that day. The applicant subsequently provided the employer with a medical certificate indicating that he was unfit for his normal work on 12 and 13 June 2018.
[16] On 13 June 2018, Mr Short sent an email to the applicant inviting him to engage in an informal discussion to deal with the issues that had led to his sick leave absence. On 14 June 2018, the applicant and Mr Short had a meeting which was attended by two other individuals who participated as support persons. During the meeting held on 14 June, the applicant and Mr Short discussed various matters relating to the stress and anxiety that the applicant was experiencing in the workplace. The applicant reiterated his complaints about what he believed to be the poor treatment that he was receiving from Mr Short, and in particular he made mention of the absence of any further commission instalment payments.
[17] The meeting held on 14 June also included discussion about the applicant’s second job involving his coaching business. Mr Short indicated that the stress and anxiety experienced by the applicant may have been exacerbated by the applicant working extensive hours arising from his second job doing his coaching work. Mr Short suggested that the applicant should take a few days of paid time off work and think about whether he may want to work for the employer on a part-time basis, and thereby reduce the overall workload that he was undertaking between his two jobs.
[18] The applicant accepted Mr Short’s offer to take some time off so as to enable him to consider the option of inter alia, part-time work for the employer.
[19] On 18 June 2018, the applicant met again with Mr Short. The applicant advised Mr Short that he was resigning from his employment as he believed that this was the most appropriate course of action to provide for his mental health, and general well-being as well as his personal financial situation. The applicant advised Mr Short that he would assist in any way to hand over or undertake other transitional requirements arising from his resignation.
[20] At the conclusion of their meeting the applicant and Mr Short shook hands, and later that day, 18 June, the applicant confirmed his verbal resignation by providing Mr Short with a written resignation from his position as Business Development Manager. The applicant did not return to work that day, but he indicated his preparedness to assist in any transition indicating that on one particular day (Wednesday) he would be unable to provide such assistance. The applicant also enquired about arrangements for his two week notice period, and he suggested a further meeting to discuss finalising all other financial aspects of his employment with the employer.
[21] On 19 June 2018, Mr Short sent the applicant a letter advising him that his employment had been terminated without notice effective immediately. The termination of employment letter included eight aspects of the applicant’s conduct that were particularised to represent serious breaches of the applicant’s employment contract that warranted termination without notice. No further payments of any description were made to the applicant.
[22] The applicant provided an outline of submissions document and he also made verbal submissions during the Hearing. The applicant submitted that his resignation from employment on 18 June 2018, was due to a course of conduct engaged in by his former employer and thus his resignation should be construed as a constructive dismissal.
[23] The submissions made by the applicant acknowledged that the Small Business Fair Dismissal Code (SBFD Code) was applicable to the employment circumstances, and that there was no suggestion that the matter involved a redundancy circumstance. Consequently, the applicant submitted that he was a person protected from unfair dismissal, and further, his resignation represented a constructive dismissal that was not consistent with the SBFD Code, and was harsh, unjust or unreasonable.
[24] The written submissions made by the applicant acknowledged that the applicant must demonstrate that the employer engaged in conduct which forced the applicant to resign from his employment. In this regard, the written submissions of the applicant asserted that the employer’s conduct intended to bring about the end of the applicant’s employment or it was conduct which, upon objective analysis, was likely to result in the applicant’s resignation.
[25] The applicant submitted that the circumstances in this instance satisfied the requirements of section 386 (b) of the Act. Specifically it was submitted that the applicant was forced to resign on 18 June 2018, because of conduct, or a course of conduct, engaged in by his employer. The applicant submitted that the extensive repeated conduct of the employer which involved; failure to pay wages on time; failure to pay superannuation entitlements; and the failure to make payments for outstanding commission entitlements, caused him great stress and anxiety such that he could no longer continue to work for the employer and thus forced him to resign from his employment.
[26] The applicant submitted that the treatment that he had received from Mr Short was of a bullying nature and which included the rejection of his reasonable requests for payment of employment entitlements. The applicant said that every time he pursued Mr Short for commission payments or late payments of his wages, Mr Short responded by making accusations about the applicant’s alleged underperformance and he renegotiated the applicant’s employment arrangements without properly providing for the payment of outstanding entitlements. The applicant submitted that the conduct of Mr Short created great stress and anxiety and left him with no option other than to resign from his employment.
[27] The submissions made by the applicant also addressed the reasons that were provided for the summary dismissal of the applicant on 19 June 2018. In this respect, the applicant submitted that upon analysis, there was no valid reason for the summary dismissal of the applicant as set out in the letter of termination of employment dated 19 June 2018. Further, the applicant submitted that there was no proper notice provided to the applicant about the matters which were relied upon as the basis for the summary dismissal of 19 June. Consequently, the applicant submitted that his summary dismissal on 19 June 2018, satisfied the requirements of s. 387 of the Act and represented a dismissal that was harsh, unjust and unreasonable.
[28] The applicant made further submissions which stressed that he had suffered financial and personal hardship as a result of his dismissal. The applicant submitted that he had been unable to find work that provided commensurate remuneration, and he had been reliant upon part-time work and his secondary business as a personal coach.
[29] The applicant also submitted that reinstatement would not be an appropriate remedy for his unfair dismissal. The applicant submitted that there had been a loss of trust and confidence necessary to re-establish any employment relationship. In the circumstances, the applicant submitted that the statutory maximum compensation in lieu of reinstatement was the appropriate remedy for his unfair dismissal.
[30] Mr Short, who appeared for the employer, made verbal submissions opposing the unfair dismissal claim on the basis that the applicant had not been dismissed from his employment. Mr Short made verbal submissions and he also provided documentary material supporting the employer’s jurisdictional objections to the application and rejecting the unfair dismissal claim generally.
[31] Mr Short submitted that the applicant’s constructive dismissal case should be rejected. Mr Short submitted that there was no evidence that the employer took any action which was intended to bring about the end to the employment relationship. In particular, Mr Short referred to the wage increase that had been provided to the applicant in February 2018, and he said that this was hardly the action of an employer that was seeking to force the applicant to resign.
[32] The submissions made by Mr Short acknowledged that as a small business the employer did not always conduct its employment practices perfectly, and he acknowledged that for a period of time in around 2016 and 2017, wages were not always paid on time. However, Mr Short said that the late payment of wages to the applicant and the ongoing contest about outstanding commission payments could not represent any action on the part of the employer that was intended to bring about the end of the employment relationship.
[33] The employer submitted that the applicant voluntarily chose to resign on 18 June 2018, as part of a conscious decision to embark on a new career as a personal development coach. The employer submitted that the applicant had not been constructively dismissed, and the application for unfair dismissal remedy should be dismissed by the Commission.
[34] The submissions made by the employer also referred to the summary termination of the applicant’s employment on 19 June 2018. In this regard, the employer submitted that the eight matters that were set out in the termination of employment letter amounted to conduct of the applicant that repudiated his employment contract.
[35] The employer further submitted that the applicant had no interest in performing his obligations to the employer and that he had abandoned his employment and made an unsubstantiated claim for payment. Consequently, the employer submitted that the summary dismissal of the applicant on 19 June 2018, was consistent with the SBFD Code.
[36] Section 385 of the Act stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are found in s.385 which is in the following terms:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”
[37] In this case there were two jurisdictional objections raised in respect to those elements contained in subsection 385 (a) and (c) of the Act. Firstly, it was argued that the applicant had not been dismissed but instead resigned from his employment voluntarily. Secondly, it was agreed that the employer was a small business, and therefore any dismissal of the applicant was asserted to have been consistent with the SBFD Code.
[38] Although the application document specifies the date of dismissal as 19 June 2018, the applicant has sought to advance a case of constructive dismissal in respect of his resignation which he provided on 18 June 2018. That is, the applicant has asserted that his resignation on 18 June 2018, was action that he was forced into because of conduct, or a course of conduct, engaged in by his employer. As an alternative, in the event that the resignation of the applicant on 18 June was not found to have represented the constructive dismissal of the applicant, the summary dismissal of the applicant on 19 June was said to have not been consistent with the SBFD Code, and was harsh, unjust or unreasonable.
[39] Consequently, the potentially more significant aspect of any consideration of the matter has involved an initial determination of the question as to whether the applicant was dismissed on 18 June 2018. Logically, any secondary consideration as to whether the dismissal of the applicant on 19 June was consistent with the SBFD Code would only be required in the event that a finding was made that the applicant was not dismissed on 18 June 2018, and instead involuntarily resigned at that time.
[40] The question of whether or not a person has been dismissed from employment involves mixed findings of both fact and law. Further, section 386 of the Act prescribes a meaning of “dismissed”. Relevantly, sub-section 386 (1) of the Act is in the following terms:
(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.”
[41] In this instance the applicant provided a written resignation from his employment in a letter dated 18 June 2018. The written resignation confirmed verbal advice provided at a meeting held earlier on that day, 18 June. The applicant has asserted that he was forced to resign from his employment because of conduct, including a course of conduct, engaged in by the employer. These circumstances are often described as a constructive dismissal in that it is asserted that it was the desire or intention of the employer to have the applicant resign from employment, and that action of the employer essentially compelled the applicant to resign.
[42] The concept of constructive dismissal which involves the alleged forced resignation of an employee often includes a resignation that provides the requisite notice given by the employee. In this instance, the written resignation provided by the applicant did not include any specified period of notice. However, the resignation letter included an offer for the applicant to assist with any transition, and the email to which the resignation letter was attached 1 requests that the employer clarify arrangements in respect of a two week notice period.
[43] There is a significant amount of case law authority on the question of constructive dismissal. One case which is often referred to is that of Mohazab v Dick Smith Electronics (No2) 2 (Mohazab) which succinctly summarised the concept of constructive dismissal as follows:
“However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer.” 3
[44] In Mohazab, the Full Bench of the Court also referred to another authority in the case of Allison v Bega Valley Council 4 (Allison). The following extracts from the Decision in the Allison case are particularly helpful for application in the present circumstances:
“Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?”
and
“In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee...” 5
[45] In the present case, the relevant actions of the employer were said to have involved historical conduct of late payment of wages and other employment related entitlements. The evidence has established that many of the employment related practices of the employer could be generously described as substandard, and probably breached relevant legislation and any applicable industrial instruments. Consequently, the applicant sought to establish a causative link between the stress and anxiety that precipitated his resignation, and the historical difficulties that he had experienced with the employment related practices of the employer.
[46] Although there would have undoubtedly been some link between the applicant’s stress and anxiety and the employment related practices of the employer, these difficulties had been experienced in the past over many years, and the employment had managed to endure various problems. The employer would have understandably anticipated that the employment of the applicant would again survive the conflict that was the subject of discussion at the meeting held on 14 June 2018. Importantly, Mr Short offered the applicant an option of part-time employment as a potential means to reduce his stress and anxiety levels. This is clearly not the action of an employer seeking to invoke the resignation of an employee, nor is it conduct that on any objective basis would be likely to cause the employee to resign.
[47] The evidence also established that the applicant had a variety of options open to him rather than to resign. The applicant could have sought further medical assistance in respect of his level of anxiety and stress and perhaps taken further personal leave and/or make a claim for workers compensation in respect of any further absences. There were a variety of alternatives to resignation that the applicant would have been able to contemplate in the period from 14 to 18 June, including the offer of part-time employment. Ultimately it would appear that the applicant has acknowledged that his resignation represented a rash decision 6 rather than one that was forced upon him by the employer.
[48] In this instance the evidence has not established that the resignation of the applicant on 18 June 2018, was a resignation that was forced because of conduct, or a course of conduct, engaged in by his employer. Importantly, a forced resignation should be distinguished from a resignation that represented the most desirable option at a particular point in time and in response to an accumulation of employment difficulties which fostered heightened levels of anxiety and stress.
[49] The resignation of the applicant on 18 June 2018, was not a resignation that satisfied the meaning of dismissed as established by subsection 386 (1) (b) of the Act. Consequently, the first jurisdictional objection raised by the employer has been established as the applicant was not dismissed when he provided his resignation on 18 June 2018. Logically, consideration must then turn to the circumstances surrounding the summary dismissal of the applicant on the next day, 19 June 2018.
[50] The employer asserted that the summary dismissal of the applicant on 19 June 2018 was a dismissal that was consistent with the SBFD Code.
[51] There was no dispute that the employer was a small business employer as comprehended by the meaning of small business employer stipulated by the terms of s. 23 of the Act. Therefore, the provisions of subsection 385 (c) of the Act require consideration. Specifically, by way of operation of s. 388 of the Act, it is necessary to determine whether the dismissal of the applicant was or was not consistent with the SBFD Code.
[52] Logically a determination of any application of the SBFD Code should precede any more general contemplation of whether the dismissal could have been considered to have been harsh, unjust or unreasonable. Further, in the event that the dismissal of the applicant is found to have been consistent with the SBFD Code, any further consideration as to whether the dismissal was harsh, unjust or unreasonable would become otiose.
[53] The SBFD Code is in the following terms:
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.”
[54] In this case the applicant was dismissed for reason of alleged serious misconduct and that part of the SBFD Code relating to summary dismissal has required examination and application to the particular circumstances surrounding the dismissal of the applicant. The first sentence of the SBFD Code is particularly relevant and is repeated: “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.”
[55] In this instance, upon termination of employment, the employer made no further payments to the applicant whatsoever. The applicant received no payment for the period up until his summary termination nor did he receive any payment in respect of any period of notice, nor did he receive any payment in respect of any accrued leave entitlements. In addition, the employer made no further payments in respect to the agreement reached in October 2017 regarding outstanding commission entitlements.
[56] Broadly speaking, the SBFD Code establishes requirements for dismissal without notice or warning which represent a less stringent evidentiary basis upon which any serious misconduct is established when compared to the evidentiary basis that applies for a medium/large business. Similarly, the SBFD Code sets out less stringent requirements for other dismissals than those which apply to a medium/large business.
[57] That part of the SBFD Code which deals with summary dismissal is concerned with the evidentiary basis upon which a small business employer establishes serious misconduct. There are three primary operative components contained in the first sentence of the summary dismissal part of the SBFD Code, which, if in combination are satisfied, have the effect of rendering any summary dismissal to be fair. The first component involves the existence of a belief on the part of the employer. The second component requires that the belief of the employer was made on reasonable grounds. The third component requires that the employer’s belief be that the conduct was sufficiently serious to justify immediate dismissal.
[58] In this instance, the summary dismissal of the applicant was asserted to have been based upon eight particular issues of purported misconduct. Upon examination, the eight identified issues of purported misconduct of the applicant were little more than a contrivance that was developed as a response to the applicant’s resignation. The employer contrived these issues in an attempt to avoid properly finalising the outstanding entitlements that were owed to the applicant upon the provision of his voluntary resignation.
[59] The absence of the existence of any genuine belief of the employer in respect to the purported misconduct of the applicant was reflected by inter alia, the eighth identified issue in the termination of employment letter which asserted that the applicant had attempted to terminate his employment without giving the required notice period. The employer made this fallacious assertion despite being in possession of the email from the applicant on 18 June 2018 7 which specifically mentioned a two week notice period.
[60] Consequently, I am satisfied that when the employer made the decision to dismiss the applicant, it did not genuinely believe, on reasonable grounds, that the applicant had committed misconduct that was sufficiently serious to justify immediate dismissal. Therefore the summary dismissal of the applicant on 19 June 2018 was not consistent with the SBFD Code.
[61] As the dismissal of the applicant was not consistent with the SBFD Code, the matter has required further consideration in respect to that element contained in subsection 385 (b) of the Act, being whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:
(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.
[62] The reasons provided by the employer for the summary dismissal of the applicant involved contrived allegations of misconduct. As a result, the reason for dismissal was not sound, defensible or well-founded. There was not a valid reason for the dismissal of the applicant.
[63] The employer provided notification of dismissal in the form of the termination of employment letter sent to the applicant on 19 June 2018.
[64] The employer did not provide any opportunity for the applicant to respond or provide any form of explanation for any of the conduct that was alleged in the termination of employment letter.
[65] The applicant was not provided with an opportunity to have a support person present during any discussion about the issues that were purported to represent the basis for his summary dismissal.
[66] The applicant was not dismissed for unsatisfactory performance and therefore this factor is not relevant in this case.
[67] The employer is a small business employer and appropriate recognition for a degree of informality and flexibility in respect to employment related procedures has been provided.
[68] There was no evidence that the employer did have dedicated human resource management specialists. The absence of human resource management specialists and the level of informality that would understandably exist in a small business enterprise could not justify the adoption of blatantly fallacious reasons to support the decision to summarily dismiss the applicant in response to the resignation that he had provided on the previous day.
[69] The employer made no calculation, let alone payment, of accumulated leave entitlements due upon termination of employment. The summary dismissal of the applicant was a callous act which was taken as a means to avoid payment of outstanding entitlements.
[70] The failure to pay wages up to the time of termination of employment, and the absence of any payment of accumulated leave and other entitlements, would likely render the dismissal to have been unlawful. Although these entitlements are matters that may be pursued in other forms of litigation, a dismissal that included unlawful elements such as the absence of wage payments up to the time of dismissal, and failure to make payment of accumulated leave and other recognised entitlements, would establish that the dismissal was unjust and unreasonable.
[71] This unfair dismissal claim has involved consideration of firstly, whether the applicant had been constructively dismissed on 18 June 2018, and secondly, whether the subsequent summary dismissal of the applicant on 19 June 2018 was consistent with the Small Business Fair Dismissal Code (the SBFD Code).
[72] Upon examination of all of the evidence and submissions, the resignation of the applicant on 18 June 2018, was not a forced resignation as contemplated by subsection 386 (1) (b) of the Act. I have also determined that the summary dismissal of the applicant on the following day, 19 June 2018, was not consistent with the SBFD Code.
[73] Further, in this case, the reason for the dismissal of the applicant could not be established in fact. Therefore, the reason for the dismissal of the applicant was not sound, defensible or well-founded. There was not a valid reason for the dismissal of the applicant related to his capacity or conduct.
[74] The employer adopted an entirely fallacious basis upon which to summarily dismiss the applicant on the day after he had resigned. The dismissal was without valid reason and implemented improperly. The dismissal of the applicant was a callous, calculated attempt to avoid payment of entitlements to the applicant, and as such it was unjust, unreasonable, and unnecessarily harsh.
[75] In summary, the applicant was not constructively dismissed on 18 June 2018. However, the summary dismissal of the applicant on the following day, 19 June 2018 was firstly, not consistent with the SBFD Code and secondly, without valid reason involving established misconduct or capacity inadequacy. Consequently, upon analysis of the various factors that are identified in s. 387 of the Act, an objective and balanced evaluation of all of the relevant circumstances has provided compelling basis to establish that the dismissal of the applicant was harsh, unjust and unreasonable. Therefore, the applicant’s claim for unfair dismissal remedy in respect to his summary dismissal on 19 June 2018 has been established.
[76] The applicant has not sought reinstatement as a remedy for his unfair dismissal. In the circumstances, particularly as the employment of the applicant was irreparably damaged by the unfortunate circumstances surrounding the contrived basis for the summary dismissal of 19 June, reinstatement would not be an appropriate remedy.
[77] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.
[78] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that have been established in the Full Bench Decisions of, inter alia; Sprigg v Paul’s Licensed Festival Supermarket 8 (Sprigg); Smith and Ors v Moore Paragon Australia Ltd 9 and more recently, the cases of; McCulloch v Calvary Health Care Adelaide10; Balaclava Pastoral Co Pty Ltd v Nurcombe;11 and Hanson Construction Materials v Pericich12 (Pericich).
[79] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the respondent employer in lieu of reinstatement of the applicant.
[80] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[81] There was no specific evidence provided which established that an Order of compensation would impact on the viability of the employer’s enterprise.
[82] The applicant had been employed for a period of about six years and four months. The applicant would have been likely to have received remuneration of approximately $2,307.70 per week if he had not been dismissed.
[83] There was clear evidence upon which to conclude that the employment of the applicant would have finalised in accordance with his resignation. Consequently, the employment of the applicant would have concluded within two weeks after his unfair dismissal.
[84] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if he had not been dismissed, I have considered that the employment of the applicant would have continued for a further two weeks. Therefore, the total remuneration that would have been received in the notional period of two weeks following dismissal amounted to a figure of $4,615.00.
[85] The total amount of remuneration received in alternative employment, as identified, and that which may be reasonably likely to be earned between dismissal and the making of the Order for compensation, has been calculated to be $0.
[86] Thirdly, in this instance there was no established misconduct of the applicant, and consequently I have decided to make no reduction to the amount of compensation to be provided to the applicant on account of any established misconduct.
[87] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.
[88] Fifthly, the amount Ordered does not exceed the compensation cap as prescribed by s. 392 (5) of the Act.
[89] Consequently, for the reasons outlined above, taking into account all of the circumstances of the case, and having cognisance so as not to apply the approach taken in the Decision in Sprigg in a rigid, determinative manner, as was cautioned in the Decision in Pericich, I have decided that the amount of compensation to be provided to the applicant should be a gross figure of $4,615.00.
[90] Accordingly, separate Orders [PR703581] providing for unfair dismissal remedy in these terms will be issued.
COMMISSIONER
Appearances:
Mr D Knight appeared unrepresented.
Mr S Short appeared for the employer.
Hearing details:
2018.
Sydney:
October, 25.
Printed by authority of the Commonwealth Government Printer
<PR703580>
1 Exhibit 8 – Attachment SES-33.
2 Mohazab v Dick Smith Electronics Pty Ltd (No.2), (1995) Industrial Relations Court of Australia, 62IR 200.
3 Ibid @ page 207.
4 Allison v Bega Valley Council, (1995) Full Commission of the Industrial Relations Commission of NSW, 63IR 68.
5 Ibid @ page 72.
6 Transcript @ PN879.
7 Exhibit 8 – Attachment SES-33.
8 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
9 Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.
10 John McCulloch v Calvary Health Care Adelaide, (Ross P, Hatcher VP and Gostencnik DP), [2015] FWCFB 873.
11 Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, (Hatcher VP, Gostencnik DP and Cribb C) [2017] FWCFB 429.
12 Hanson Construction Materials Pty Ltd v Darren Pericich, (Ross P, Masson DP and Lee C), [2018] FWCFB 5960.