| [2019] FWCFB 7796 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
The Trustee for WKC Trust t/a Curious Grace
v
Emily O’Brien
(C2019/5909)
VICE PRESIDENT HATCHER |
SYDNEY, 12 DECEMBER 2019 |
Appeal against decision [[2019] FWC 6172] of Commissioner Yilmaz at Melbourne on 4 September 2019 in matter number U2018/13014.
Introduction and background
[1] The Trustee for WKC Trust t/a Curious Grace (Curious Grace) has lodged an appeal, for which permission to appeal is required, against a decision issued by Commissioner Yilmaz on 4 September 2019 1 (decision). The decision concerned an application by Ms Emily O’Brien for an unfair dismissal remedy in respect of her dismissal from her employment with Curious Grace on 29 November 2018. In the decision, the Commissioner formed the view that there was no valid reason for Ms O’Brien’s dismissal and that she was not afforded procedural fairness. This led the Commissioner to conclude that Ms O’Brien’s dismissal was unfair, and as a remedy the Commissioner ordered the payment of compensation to Ms O’Brien of $21,973 (less taxation required to be deducted by law). Curious Grace contends in its notice of appeal that the decision was in error in a number of respects, and that it would be in the public interest to grant permission to appeal.
[2] The factual background to the matter may briefly be explained. Curious Grace is a furniture retail business operating from three locations, two in Victoria and one in New South Wales. Ms O’Brien commenced employment with Curious Grace as an Assistant Showroom Manager and was promoted to Showroom Manager in November 2017. On 27 November 2018 Ms O’Brien advised the senior management team that she would be absent that day due to illness. At approximately 10:30am, she received an email from the Director, Mr Curnuck, standing her down. The email contained allegations against Ms O’Brien which included that the showroom was dirty and unkempt, with unmaintained furniture and a piece of furniture not unpacked; that there was no active roster that was reliable for staff, that casual staff were taking sick leave without providing medical certificates; that a customer had complained that Ms O’Brien had handled his complaint in a poor manner; that she had complained to staff that the manager from another location was stealing sales; and that she took a sick day even though she knew a new staff member was commencing that same day.
[3] On 29 November 2018, Ms O’Brien received a termination letter from Curious Grace informing her that she was dismissed with immediate effect and which referred to the reasons for her termination as:
1. She was malicious and demonstrated ill intent towards the National Sales Manager;
2. She was unsupportive, and since her suspension attempted to damage the relationship between the National Sales Manager, the Managing Director and other staff by spreading half-truths;
3. Despite being suspended and contrary to advice, Ms O’Brien maintained contact with staff which was allegedly committed to develop unrest within the company, and was considered a serious breach of the company’s anti-bullying policies;
4. That she was negligent in her duties resulting in the National Sales Manager handling her responsibilities and consequently attaining the highest gross sales level; and
5. Since receiving a written warning in relation to attendance, she had continued to demonstrate serious breaches of policy.
[4] Ms O’Brien subsequently queried the failure of Curious Grace to make a payment to her in lieu of notice, and on 5 December 2018, she was emailed a payslip which included payment in lieu of three weeks’ notice.
[5] Following the termination of Ms O’Brien’s employment, Curious Grace undertook a review of her work emails. Through that review it discovered she had attended a job interview on 23 November 2018, for which she had submitted a medical certificate to support the taking of paid personal leave. The medical certificate was found to have been falsified by Ms O’Brien.
[6] In the decision the Commissioner, after setting out the facts of the matter, dealt with each of the matters she was required to consider under s 387 of the Fair Work Act 2009 (FW Act).
[7] In relation to s 387(a), the Commissioner found that none of the reasons for dismissal given in the termination letter the decision to dismiss Ms O’Brien was valid. In relation to the falsification of the medical certificate, the Commissioner found that:
“[112] The alleged fraud asserted by the Respondent relates to the falsified medical certificate by the Applicant. While falsifying medical certificates cannot be condoned, the Respondent is relying on this to support a valid reason, even though the information came to their attention after the dismissal. The Applicant was not afforded an opportunity to reply, thus the expectation is that the Respondent will bear the burden to demonstrate the seriousness of the allegation to warrant a reason for immediate termination. The Respondent also submits that this incident is serious misconduct to find that the dismissal was fair, just and reasonable should I be inclined to disregard the other reasons for the termination of employment.
[113] In my view the Respondent had no regard for the situation that the Applicant found herself in. Despite weak evidence, the Applicant received a warning for taking time off in lieu of working overtime without the authority of the Director. Further, the National Sales Manager demanded a medical certificate for any time off work despite the company policy. The Applicant was subjected to interference in the management of her showroom by her Manager (changing the roster, moving or terminating staff), and unsubstantiated reports were treated as fact to criticise and hold the Applicant at fault.
[114] When she was presented with the opportunity to attend an interview to relieve herself from the environment where she felt bullied and victimised, she admits to producing a medical certificate to save her job.
[115] There was no financial gain for the Applicant by producing the medical certificate, she had already worked excessive overtime and knew the company would not pay the overtime, and time off in lieu was apparently only permitted with the approval of the Director.
[116] While the Applicant’s conduct in forging a medical certificate was intentional because she knew that if she did not have a medical certificate she could lose her job, under the circumstances and in the context in which the act was committed, I do not agree that it was wilful or inconsistent with her contract of employment nor serious enough to cause risk to the health or safety of a person or the reputation, viability or profitability of the business.
[117] Given the environment in which the Applicant found herself in, I am of the view that the falsification of the medical certificate in this case did not justify termination for misconduct.
Conclusion on valid reason
[118] I am satisfied on the evidence before me that the Respondent did not justify termination with or without notice. While the falsification of the medical certificate cannot be condoned, the circumstances that led to the personal state of the Applicant can be understood that her desperation to save her job led to an act of foolishness. Her admission and regret over this act is acknowledged.”
[8] In respect of s 387(b) and (c), the Commissioner also found that Ms O’Brien was not, at any time prior to her dismissal, given the reasons for her dismissal that were set out in the letter of termination, and was not afforded an opportunity to respond. In fact, she was unaware of the reasons for her dismissal until she received the letter of termination.
[9] Having found that Ms O’Brien’s dismissal was unfair, the Commissioner considered it appropriate to make an award of compensation. The basis for the calculation of compensation is set out in paragraphs [142] to [148] of the Decision as follows:
“[143] Section 392 of the Act provides for the considerations when deciding amounts of compensation. The amount should not include compensation for shock, distress or humiliation. I have used the Sprigg methodology to assess the appropriate compensation amount to be awarded.
[144] There is no evidence that the compensation amount will have an adverse effect on the viability of the employer’s business. The Applicant was into her fourth year of employment, she was in receipt of a salary of $70,000 per year plus commission and she had found casual work on 6 February 2019 and has mitigated the loss she suffered.
[145] Section 392(2)(c) provides that the Commission must take into account the remuneration that the person would have received, or would likely have received, if she had not been dismissed. Putting aside the motivations of the Director and National Sales Manager for their treatment of the Applicant, it is reasonable to estimate that the Applicant would remain in employment for at least a year. The evidence confirms that the Applicant was successful in sales which resulted in the Clifton Hill site to be the best performing, her skills in styling and the photoshoots were valued and following her warning, the Applicant did not take leave without authority. Based on these considerations, the Applicant would have earned at least $70,000 for the year (excluding commissions). The Applicant submitted her earnings in her casual job. The gross figure is therefore discounted by those earnings.
[146] The Applicant was employed for just over four years and her weekly rate of pay (excluding commissions) was $1,346 per week.
[147] The amount of remuneration received in alternative employment is $730 per week.
[148] For the purposes of the calculation of remuneration the Applicant would have received had she not been dismissed would have been at least $70,000. The Applicant was out of work for a period of nine weeks, therefore the potential remuneration over the 52 weeks is discounted by anticipated earnings over 52 weeks from the casual position to an amount of $31,390. I have also discounted the final sum due to the Applicant’s admission to falsifying a medical certificate by 30 percent. This has therefore been calculated as a figure of $21,973 (less taxation as required by law). This figure does not exceed the compensation cap as prescribed by s.392(5) of the Act.” (citation omitted)
Appeal grounds and submissions
[10] Curious Grace contended that the Commissioner made significant errors of fact and errors of law. Its 16 appeal grounds (omitting ground 1, which concerned its standing to appeal) were as follows:
“Significant Errors of Fact
2. The Commission erred in finding that:
a. the Respondent submitted email evidence of guidance for taking time off in lieu (see Decision at [25]);
b. the Respondent’s admissions relating to her falsifying a medical certificate to cover an absence was “unprompted” (see Decision at [33]);
c. the Appellant’s policy in relation to time off in lieu was “unclear” (see Decision at [93] and [97]);
d. the Respondent received a warning for taking time off in lieu of working overtime without the authority of the Director on “weak evidence” (see Decision at [113]), when the Commission was provided with evidence that the Respondent admitted to attending work late on Sundays and taking unauthorised time off;
e. the Respondent was expected to work extensive and unreasonable hours (see Decision at [107]) and had worked excessive overtime (see Decision at [115]);
f. the Respondent was subjected to bullying (see Decision at [107]) and gave no rationale as to its finding;
g. the Respondent was “disregarded and victimized” when she sought clarity over what is reasonable overtime (see Decision at [107]), and the Appellant, rather than addressing legitimate concerns regarding safety and wellbeing (including overtime and time off in lieu) the Appellant victimized and dismissed the Respondent (see Decision at [108];
h. the Respondent was given no support since a security scare in August 2018 (see Decision at [108]); and
i. senior managers disregarded their obligations to ensure the safety and wellbeing of their staff [see Decision at [108].
Errors of Law
3. The Commissioner erred in failing to have regard to the Appellant’s submissions and the Respondent’s admission that the Respondent dishonestly advised the Appellant that she would be attending a specialist appointment which involved a 3-month waiting list and would therefore require time off work, when instead the Appellant attended a job interview.
4. The Commissioner erred in taking into account (see Decision at [115]) that “there was no financial gain for the Respondent by producing the medical certificate” in determining the seriousness of the Respondent’s misconduct.
5. The Commissioner erred in concluding that the act of falsifying a medical certificate was not wilful or inconsistent with the Respondent’s contract of employment (see Decision at [116]).
6. The Commissioner erred in concluding that producing a falsified medical certificate warranted disciplinary action, not termination of employment with or without notice (see Decision at [137] and [139]).
7. The Commissioner erred in failing to apply the reasoning in Halina Bluzer v Monash University [2017] FWCFB 4032 and Tokoda v Westpac Banking Corporation t/a Westpac [2012] FWA 1262 in relation to falsification medical certificates.
8. The Commissioner erred in failing to have regard to, or failing to apportion appropriate weight to, the Appellant’s evidence with respect to the hours worked by the Respondent.
9. The Commissioner erred in apportioning unreasonable weight to the issue of what constitutes “reasonable overtime” (see Decision at [95]), instead of apportioning appropriate weight to the Respondent’s admissions and unchallenged evidence that she took unauthorised time off in lieu and arrived to work late on Sundays.
10. The Commissioner failed to give proper or adequate reasons for her conclusion that the Respondent was subjected to bullying (see Decision at [107]).
11. The Commissioner failed to give proper or adequate reasons for rejecting the Appellant’s submissions regarding the Respondent’s credit as a witness.
12. The Commissioner erred in failing to apportion any weight to, or address, the Appellant’s submissions that the Respondent’s communication with Ms. Katrina Ramm on 26 November 2018 was inappropriate.
13. The Commissioner erred in failing to apportion any weight to, or address, the Appellant’s submission that the Respondent’s e-mail to Robyn Moore on 28 November 2019 demonstrated an unequivocal intention to wilfully ignore the direction given to her.
14. The Commission erred in concluding that the Respondent was victimised for raising concerns regarding safety and wellbeing (including overtime and time off in lieu) (see Decision at [108]) and failed to give any proper or adequate reasons for this conclusion.
15. The Commissioner erred in having regard to and/or giving too much weight to the apparent lack of safety afforded to the Respondent at the Clifton Hill showroom after the incident in August 2018 (see Decision at [108]) and failed to give proper or adequate reasons for rejecting the Appellant’s evidence regarding the steps it took to mitigate future risks.
16. The Commissioner erred in finding (and failing to provide reasons or adequate reasons) that the Respondent would have remained in employment for a period of at least a year (see Decision at [145]) despite evidence that the Respondent was attending interviews for other retailers and had given evidence that she intended to leave her employment with the Appellant.
17. The Commissioner erred in concluding (see Decision at [141]) that the Respondent’s was harsh and unjust.”
[11] Curious Grace provided detailed written submissions in support of its application. In its oral submissions, three key areas as to why it contended that the grant of permission to appeal would be in the public interest were highlighted. The first concerned the use of medical certificates, in which respect Curious Grace submitted that:
• medical certificates serve an important purpose in employment relationships, including being the primary basis for the establishment of entitlements to paid personal leave, and determining an employee’s capacity to safely carry out their duties;
• it was accordingly in the public interest that employers and employees have certainty in relation to the use of medical certificates, including as to the appropriate sanction for the fraudulent provision of medical certificates; and
• the decision was disharmonious with recent decisions on this subject matter (Bluzer v Monash University 2 and Tokoda v Westpac Banking Corporation3) and for that reason manifested an injustice and was counter-intuitive.
[12] The second concerned the calculation of compensation, specifically that the payment in lieu of three weeks’ notice to Ms O’Brien had not been taken into account in the calculation of the compensation amount. We note this issue was not specifically raised in the grounds of appeal. The third concerned Ms O’Brien not telling the truth in relation to her attendance at a job interview and related issues of hours of work and time off in lieu of overtime.
[13] In respect of the alleged significant factual errors, it submitted that these could be categorised within three areas, being errors related to hours of work, errors related to Ms O’Brien’s working environment, and errors related to her honesty.
Consideration
[14] An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.4 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[15] This appeal is one to which s 400 of the FW Act applies. Section 400 provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.
[16] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, 5 Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 400 as “a stringent one”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.6 A Full Bench of the Commission, in GlaxoSmithKline Australia Pty Ltd v Makin, identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 7
[17] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.8 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.9
[18] We are not satisfied that it would be in the public interest to grant permission to appeal. Ms O’Brien’s unfair dismissal remedy application was determined on the basis of its own particular facts and raises no issue which warrants further appellate examination in the public interest.
[19] We do not consider that the issue of the falsified medical certificate involves any issue of principle or general application, contrary to the contention of Curious Grace. The decisions referred to by Curious Grace in this connection do not establish any general principle of universal application that the falsification of a medical certificate will always constitute a valid reason for dismissal irrespective of the circumstances. Bluzer v Monash University 10 was concerned with the purely factual consideration of whether the applicant for an unfair dismissal remedy in that case had falsified medical certificates as alleged by her employer. In Tokoda v Westpac Banking Corporation11 the falsification of a medical certificate was found to constitute a valid reason for dismissal, but it is notable that finding was in part based upon a non-acceptance of the applicant’s evidence that she did this “as an act of desperation” and was forced to falsify the certificate because she was being treated unfairly and bullied by her managers.12
[20] It is well established that conduct on the part of a dismissed employee which is demonstrated by the employer to have occurred may nonetheless not constitute a valid reason for dismissal because it is not of sufficient gravity or seriousness such as to justify dismissal as a sound, defensible or well-founded response to the conduct. 13 In this case, although Ms O’Brien conceded that she had falsified the medical certificate as alleged, the Commissioner found that this did not justify dismissal in circumstances where the requirement by Ms O’Brien’s manager that she produce a medical certificate to cover the relevant absence (of 1½ hours to attend a job interview) did not accord with Curious Grace’s own policy, Ms O’Brien had previously been warned against taking time off in lieu (TOIL) when she needed to be absent from work, there was no financial gain in doing because she could have covered the absence with accrued TOIL had she been permitted to do so and Ms O’Brien was concerned that if she did not produce a medical certificate she would be dismissed given that she had previously been subject to victimisation and bullying at work. They are all matters which we consider made the conclusion reached by the Commissioner reasonably available. The Commissioner clearly did not condone Ms O’Brien’s conduct since she characterised it as an act of foolishness undertaken in a state of desperation which warranted disciplinary action short of dismissal and deducted 30% from the compensation amount on account of it.
[21] The other matters raised in the appeal concerning the conclusion that Ms O’Brien’s dismissal was unfair are not of a nature to attract the public interest. The alleged significant errors of fact for the most part do not allege errors in the Commissioner’s primary findings of fact but rather merely indicate disagreement with the inferences drawn by the Commissioner from the primary facts. The alleged errors of law, apart from those relating to the medical certificate, mainly go to issues of the weight to be assigned to various matters or the sufficiency of reasons as to particular sub-issues and, considered in substance and as a whole, constitute an invitation to the Full Bench to re-decide Ms O’Brien’s application.
[22] In relation to the assessment of compensation by the Commissioner, the appeal raises two areas of concern: first, the Commissioner’s estimation that Ms O’Brien would have stayed in employment for at least another year but for her dismissal and, second, a failure to take into account that Ms O’Brien was provided with three weeks’ pay in lieu of notice. The first conclusion is said to be in error because Ms O’Brien was attending job interviews and said to be planning to leave her employment. However, it is apparent that Ms O’Brien took this course as a result of the unreasonable treatment of her by her managers, and the Commissioner quite properly put this aside in her assessment, as her reasoning discloses.
[23] The second matter prima facie involves an appealable error which would normally justify the grant of permission to appeal and the upholding of the appeal to the extent necessary to correct the compensation order. However it is apparent that the Commissioner made a mathematical error in her calculation of compensation, in that an additional year’s employment at $70,000 per annum less post-dismissal income of $730 per week for 43 weeks, and less a further 30% on account of the falsification of the medical certificate, should have resulted in a compensation amount of $27,027 rather than $21,973. A correct re-calculation of the compensation amount which deducted the three weeks’ pay in lieu of notice in accordance with Curious Grace’s appeal submissions would therefore result in a higher compensation amount than was ordered by the Commissioner. In circumstances where no complaint has been made by Ms O’Brien about the compensation amount, we consider that it would not be in the public interest to grant permission to appeal to Curious Grace if the result is that it ends up having to pay more than the amount ordered by the Commissioner.
[24] We are not persuaded that the matters set out in the grounds of appeal otherwise raise an arguable case of error in the Commissioner’s exercise of her discretion. Nor are we persuaded that the appeal otherwise raises issues of importance or general application or that there is a need for Full Bench guidance on any matter raised.
[25] Accordingly, as required by s 400(1), permission to appeal is refused.
VICE PRESIDENT
Appearances:
E O’Brien on her own behalf.
N Tindley on behalf of the WKC Trust t/a Curious Grace
Hearing details:
2019.
Sydney:
13 November.
Printed by authority of the Commonwealth Government Printer
<PR714289>
4 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC [2000] HCA 47, 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ
5 (2011) 192 FCR 78 at [43]
6 O’Sullivan v Farrer [1989], HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506, 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]-[46]
7 [2010] FWAFB 5343, 197 IR 266 at [24] – [27]
8 Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30]
9 Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663, 241 IR 177 at [28]
11 [2012] FWA 1262; permission to appeal refused in [2012] FWAFB 3995, 221 IR 153
12 [2012] FWA 1262 at [21]-[25]
13 Edwards v Giudice [1999] FCA 1836, 94 FCR 561 at [6]-[7] per Moore J, see also at [40] per Marshall J; Bista v Glad Group Pty Ltd [2016] FWC 3009 at [34]-[40]