| FWC 2134 [Note: An appeal pursuant to s.604 (C2020/4913) was lodged against this decision - refer to Full Bench decision dated 11 August 2020 [ FWCFB 4234] for result of appeal.]|
|FAIR WORK COMMISSION|
Fair Work Act 2009
SAM Technology Engineer Pty Ltd
DEPUTY PRESIDENT BOYCE
SYDNEY, 10 JUNE 2020
Application for an unfair dismissal remedy — dismissal harsh, unjust or unreasonable – reinstatement inappropriate – compensation awarded.
 On 17 December 2019, Mr Steven Perry (Applicant) lodged an application for an unfair dismissal remedy with the Fair Work Commission (Commission). The Applicant did so by filing a Form F2 with the Commission’s Registry in Sydney (Application). By way of his Application, Mr Perry claims that he was unfairly dismissed by his former employer, SAM Technology Engineer Pty Ltd (Respondent), on 16 December 2019.
 On 27 December 2019, the Respondent lodged a response to the Applicant’s claim by filing a Form F3 with the Commission’s Unfair Dismissal Team (Reply). By way of that Reply, the Respondent denied that the Applicant was unfairly dismissed. It should be noted that the Respondent initially raised a jurisdictional objection, being that the Applicant did not meet the minimum employment period required under s.383 of the Fair Work Act 2009 (Act). However, the Respondent later withdrew that jurisdictional objection. I am satisfied that the Applicant was employed by the Respondent for a period beyond the minimum employment period under the Act.
 On 19 March 2020, I held a hearing (by telephone) regarding the Applicant’s substantive claim. The Applicant appeared for himself. Mr James Schmidt (Manager for the Respondent) appeared for the Respondent.
 Having considered the parties’ submissions and evidence provided prior to and during the hearing, I have determined that the dismissal was unfair, and that compensation is an appropriate remedy in the circumstances. My reasons for this decision follow.
 On 1 April 2019, pursuant to a written contract between the parties dated 27 March 2019, the Applicant began his employment by the Respondent. The Applicant’s role is described as a “Sales Engineer — Materials Handling”.
 On 16 December 2019, the Applicant was approached by Mr Schmidt, who verbally informed the Applicant that the Respondent was terminating his employment, effective immediately.
 In brief (and as I understand it based on the Applicant’s submissions and documentary evidence), the Applicant says that he was unfairly dismissed because the reason for his termination is unclear, and/or that he was not provided with an opportunity to address any issues with his performance prior to being terminated. Further, the Applicant says that he was performing at the standard required.
 In contrast (again, as I understand it based on the Respondent’s submissions and documentary evidence), the Respondent’s case is that the Applicant was not making the sales expected of him (i.e. the Applicant was not performing to the required standard). Further, the Applicant was made aware of this issue prior to his dismissal, but as the Applicant did not better his performance, the Respondent resolved to terminate his employment and communicated that reason accordingly.
 I note that the parties’ written and oral submissions, as well as the witness evidence both parties have tendered, is disorganised, generalised, and/or not to the point. There exists a range of substantial inconsistencies between the parties’ accounts as to the facts of the matter. Further, the lack of any corroborating evidence supporting what is asserted to have occurred, or when certain events have been said to have occurred, has left me to conclude that most of the submissions and/or witness evidence put forward by the parties is unreliable.
 I also note that the parties conduct at the hearing was most unhelpful. I am at pains to rely upon what was said during the hearing, and so give little regard to the substance of same. Instead, I have determined the outcome of this matter based upon the documentary evidence, given that I consider it to be the most objective and reliable evidence available.
 Section 385 of the Act qualifies a claim for unfair dismissal:
“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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388”.
 The parties were not in dispute as to whether the Applicant had been “dismissed” within the meaning of ss385(a) and 386 of the Act. Further, neither party made submissions or provided evidence that s.385(c) or (d) of the Act were enlivened in this matter. Thus, the only outstanding question before me is whether the Applicant’s dismissal was “hash, unjust, or unreasonable” within the meaning ss.385(b) and 387 of the Act.
Whether the Applicant’s dismissal was harsh, etc.
 Section 387 of the Act provides what matters must be taken into account in determining whether a dismissal was harsh, unjust or unreasonable:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant”.
 I turn now to consider these matters.
Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?
 In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”, and should not be “capricious, fanciful, spiteful or prejudiced”. 1 Further, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.2
 Where the dismissal relates to conduct, the reason for dismissal may be valid because the conduct occurred and justified dismissal. However, the reason may not be valid because the conduct did not occur, or it did occur but did not justify dismissal. 3 The question of whether the alleged conduct took place, and what it involved, is to be determined by the Commission on the basis of the evidence in the proceedings before it.4
 Where a dismissal relates to capacity (i.e. where the reason is associated or connected with the ability of the employee to do the job), 5 and there is a dispute as to an employee’s requisite capacity, it is for the Commission to resolve that dispute as a matter of fact.6
 The terms “harsh”, unjust” and “unreasonable” are to be given their ordinary meaning.
 The Respondent submits that there were four reasons for the Applicant’s dismissal:
a) the Applicant was not a “team player”;
b) the Applicant was not carrying out direct requests from his manager to complete work, which may have resulted in missed sales opportunities;
c) the Applicant was not developing new clients, or expanding the Respondent’s client base; and
d) the Applicant was “not making any sales”.
(collectively, Reasons for Termination)
 To support the Reasons for Termination, the Respondent has provided the following further submissions and/or evidence:
a) On or about 9 October 2019, Mr Schmidt met with the Applicant and Mr Rick Kelly (Sales Engineer for the Respondent). During that meeting, Mr Schmidt informed the Applicant that there were “lower sales, losses and turnover”. Mr Schmidt asked the Applicant why he was not generating new business. According to the Respondent, the Applicant said that he “was not capable”. The Respondent submits that the Applicant had been hired to generate new business and that this was a Key Performance Indicator (KPI) of the Applicant’s role (collectively, October Meeting).
b) Regarding the October Meeting, the Respondent has tendered a copy of the meeting minutes, as well as several spreadsheets, that it says supports its submissions regarding same. I note that these minutes are dated 6 December 2019, and that they do not record who was present at the meeting. Further, the meeting minutes taken do not appear to address any of the Respondent’s submissions regarding lower sales, let alone go to the Applicant’s conduct or capacity. Moreover, the spreadsheets appear to be a list of customers (or potential customers), and their assignment to various sales staff. The spreadsheets do not display any financial figures, targets, goals, or similar.
c) On or about 12 December 2019, Mr Schmidt met with the Applicant (December Meeting), whereby Mr Schmidt raised the following issues:
i) the Applicant failed to attend an exhibition for the full duration of that event;
ii) the Applicant was not completing tasks that he was being directed to perform; and
iii) the Applicant explained that he did not have a “network”, and could not find new customers, which meant he could not meet his KPIs.
d) Regarding the December meeting, the Respondent has provided an email dated 12 December 2019. That email is addressed to the Applicant and was sent by Mr Schmidt. The contents of that email reflect what I have set out in paragraph (c) above.
e) The Respondent put forward one witness statement in this matter, being the statement of Mr Indranil Ghatak (Financial Controller of the Respondent) dated 4 March 2020:
i) In his evidence-in-chief, Mr Ghatak says that he witnessed a conversation between Mr Schmidt and the Applicant on 5 July 2019. During this conversation, Mr Schmidt accused the Applicant of turning up to work late earlier that same morning and inquired as to the reason/s why. The Applicant said that he was visiting customers and forgot to inform the “head office” that he would be arriving late at the workplace. Mr Ghatak says that the Applicant was “aggressive” and “disrespectful” towards Mr Schmidt during the conversation. Moreover, Mr Ghatak says that Mr Schmidt offered “advice” to the Applicant, which the Applicant rejected. In addition, Mr Ghatak’s says that the Applicant was late to work on a number of other occasions; and
ii) In cross-examination by the Applicant, Mr Ghatak was unable to give any further particularisation of the incident on 5 July 2019. Further, and in relation to the allegation that the Applicant was late to work on a number of occasions, Mr Ghatak was unable to provide any particular account as to the frequency of the allegation, and could not provide a convincing reason as to how he came to form that view.
 As far as I understand the Applicant’s position, the Applicant says there was no valid reason for his dismissal. In short, the Applicant says that the Reasons for Termination are a manufactured “cover” for his unfair dismissal. To that end, the Applicant submits the following:
a) The October Meeting did not occur.
b) There were only four sales meetings during the course of his employment, two of which occurred in this first week of employment. When there was a sales meeting, the Applicant describes it as “incompetent, unorganised and chaotic”.
c) The Applicant contests the assertion that he did not generate new business. In contrast, the Applicant says he generated six new business opportunities for the Respondent (the contracts of which were subject to an order to produce).
d) The Applicant says that he did attend the exhibition over three days, and only left early because there was little-to-no attendance by the end of the day (as well as the fact that the Applicant was suffering pain from a pre-existing, non-work related injury, which the Respondent had been made aware of).
 As a matter of bare assertion, any or all of the Reasons for Termination could qualify as a valid reason for dismissal viz all the reasons advanced by the Respondent are matters that go the Applicant’s conduct and/or capacity to perform the role he was employed to carry out. In my view, however, the Reasons for Termination are not grounded in the evidence before the Commission.
 As to the Applicant’s capacity to perform his role, the Respondent has not provided any evidence to sustain a finding that the Applicant lacked the relevant skill or aptitude to perform his role. The Respondent’s reliance on the Applicant’s so-called “KPIs” is limited by the fact that the Respondent has not stated what those metrics are (except to say that the Respondent required the Applicant to generate “4 million dollars in sales”, which is another bare assertion by the Respondent, and regardless, is an insufficient measure to justify the Respondent’s submission because it does not provide a timeframe for the Applicant to comply with that requirement).
 Moreover, little evidence has been provided by the Respondent to support its claim that there has been a demonstrable failure by the Applicant to generate business. The Respondent points to the spreadsheets produced to the Commission, but those spreadsheets do little more than identify certain clients (or leads), and the salespersons responsible for those clients. Those spreadsheets do not prove that the Applicant has failed to secure business for the Respondent. They do not establish a target, deadline, or any kind of metric by which to assess the Applicant’s performance. In short, the evidence relied upon by the Respondent does not demonstrate that the Applicant lacked the capacity to carry out his duties.
 As to the Applicant’s conduct, again there is nothing before me to substantiate a finding that the Applicant was ever acting in such a way that was at odds with his on-going employment. That the Applicant was late to work on at least one occasion (which he explained to be because he was tending to clients off-site) is not a valid reason to terminate an employee because it is not evidence of behaviour that is at odds with his on-going employment. Further, I do not accept the evidence that the Applicant was “often” late to work, because I find Mr Ghatak’s evidence to be unreliable for the reasons already stated above.
 As to the other nebulous allegations about the Applicant’s behaviour (such as a failure to carry out the tasks requested of him), the Respondent’s submissions are not supported by any evidence of accounts or business records that would allow me to make the findings pressed by the Respondent.
 In view of the foregoing, and on the balance of probabilities, I find that there was no valid reason to dismiss the Applicant from his employment. This leans toward a finding that the dismissal was unjust and unreasonable.
Was the Applicant notified of the valid reason?
 If there is no valid reason for dismissal, then s.387(b) has no application. 7 Given that I am of the view that there was not a valid reason to justify the Applicant’s dismissal, this factor requires no further consideration, albeit it leans toward a finding that the dismissal was unjust and unreasonable.
Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
 Again, as I am of the view that there is no valid reason for dismissal, this limb is not enlivened and requires no further consideration, albeit it leans toward a finding that the dismissal was unjust and unreasonable.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
 I do not take the October Meeting or December Meeting to be discussions relating to the Applicant’s dismissal. Even by the Respondent’s own account, it was never expressly put to the Applicant during these meetings that the Respondent was considering dismissing the Applicant.
 As to the conversation between Mr Schmidt and the Applicant on 16 December 2019, the Respondent’s own account was that the Applicant was not informed in advance that this discussion was going to occur, let alone what the subject of that discussion was going to be.
 As noted by a Full Bench of the Fair Work Commission, “[t]he subsection is not concerned with whether or not the employee was informed that he or she could have a support person present”. 8 However, the manner in which the discussion on 16 December 2019 was “sprung” upon the Applicant was to, in effect, deny the Applicant the opportunity to have a support person present. The Respondent’s “ambush” of the Applicant leans toward a finding that the dismissal was unjust and unreasonable.
Was the Applicant warned about unsatisfactory performance before the dismissal?
 The Respondent’s case is that the Applicant was made aware that he was underperforming during the October Meeting and December Meeting. Irrespective as to whether these meetings actually occurred, the Respondent’s own account is deficient by virtue of the fact there was no express “warning” given to the Applicant.
 To qualify as having provided an employee with a warning, an employer must have:
a) identified the relevant aspect of the employee’s performance which is of concern to the employer; and
b) made it clear that the employee’s employment is at risk unless the performance issue/s identified is addressed. 9
 There is no evidence that such a warning was given to the Applicant at any point during the course of his employment. As such, I find that no warning was issued to the Applicant, which leans towards a finding that the dismissal was harsh and unjust.
To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal? To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
 Whilst the Act recognises that “small business are genuinely different in nature both organisationally and operationally”, 10 it does not follow that such an employer’s procedures in effecting a dismissal can be entirely devoid of fairness. Further, the absence of a dedicated human resource management specialist does not relieve an employer of extending an appropriate degree of courtesy to its employees “even when implementing something as difficult and unpleasant as the termination of a person’s employment”. 11
 Whilst I understand the Respondent’ business to be close to that of a “small business” in the ordinary sense, the Respondent’s conduct appears to have disavowed any process that might be considered procedurally fair to the Applicant. Regardless, neither party put forward submissions that go directly to this matter, and I therefore treat it as a neutral consideration.
What other matters are relevant?
 Neither party made submissions on any other relevant matters that I ought take into account, and I am not aware of any such matters that might be relevant.
Was the Applicant’s dismissal was harsh, unjust or unreasonable?
 In view of my findings above, I find that the Applicant’s dismissal was harsh, unjust and unreasonable.
 The Applicant does not seek reinstatement, nor do I consider it appropriate given the total breakdown in the employment relationship. The issue of remedy therefore turns to whether compensation should be awarded and, if so, its quantum.
 The Applicant’s salary was $105,000 per annum, plus superannuation, motor vehicle, mobile phone and laptop computer. I value the motor vehicle, in terms of earnings, at $12,000 per annum, 12 and give no value (in terms of personal use) to the mobile telephone and laptop computer. I therefore equate the weekly gross salary of the Applicant to be $2,243.96 (i.e. $117,000 divided by 52.14 weeks per annum), plus superannuation (9.5 percent of ordinary time earnings).
 Section 392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement:
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant”.
Calculation of compensation
 As noted by the Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries: 13
“[T]he well-established approach to the assessment of compensation under s.392 of the [Act] … is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket [(Sprigg)]. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages”. 14
 The approach in Sprigg is as follows:
a) Step 1: Estimate the remuneration the Applicant would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost);
b) Step 2: Deduct monies earned since termination;
c) Step 3: Discount the remaining amount for contingencies; and
d) Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
 I apply Steps 1 to 4 of Sprigg, as follows:
a) Step 1: There was no evidence of the basis upon which the Applicant would have continued in his employment but for his dismissal. However, given the short period of the Applicant’s employment with the Respondent, and the evidence of some on-going animosity between the parties, I estimate that the Applicant would have continued in his employment, but for the dismissal, for a period of 3 months (i.e. another 13 weeks beyond his date of dismissal). This is the Applicant’s “anticipated period of employment”, and is an amount of $29,171.48 (i.e. 13 weeks x $2,243.96 per week).
b) Step 2: I deduct from this amount the sum of $6,057.69 (4 weeks’ notice paid to the Applicant upon dismissal), leaving a gross amount of $23,113.79.
c) Step 3: I apply no reduction due to contingencies.
d) Step 4: I have considered the impact of taxation but have elected to settle on the gross amount of $23,113.79.
 Having applied the Sprigg formula, I am now required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case”. 15
Effect of an order on the viability of the Respondent’s enterprise
 Neither party made submissions on this issue. I therefore make no reduction in this regard.
Length of the Applicant’s service
 The Applicant was employed from 1 April 2019 to 16 December 2019, being a period of 8 months and 15 days. I consider that the Applicant’s short period of service warrants reducing the amount of compensation ordered by one week ($23,113.79 less $2,243.96 = $20,869.83).
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
 As stated by a majority of the Full Court of the Federal Court in He v Lewin: 16
“In determining the remuneration that the Applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination”. 17
 I have dealt with this issue at paragraph (a) above.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
 The Applicant did not provide evidence of his efforts to mitigate his loss since the dismissal. The Applicant carries the onus in this regard. I am therefore not satisfied that the Applicant has taken reasonable steps to mitigate his loss. This warrants reducing the amount of compensation ordered by a further two weeks ($20,869.83 less $4,487.92 (2 x $2,243.96) = $16,381.91).
Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation
 There was no evidence on this issue. I therefore make no reduction in this regard, albeit I have already deducted the sum of $6,057.69 (4 weeks’ notice paid to the Applicant upon dismissal).
Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation
 There was no evidence on this issue. I therefore make no reduction in this regard.
 If I am satisfied that any misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct. Given I do not make any findings of misconduct by the Applicant, I make no reduction in this regard.
Contingencies & Shock, distress etc. disregarded
 I have applied no reduction due to contingencies. I also confirm that, as required by the Act, the lost remuneration amount to be 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 her dismissal.
Other relevant matters
 Neither party made submissions on this issue. I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the Act.
 In view of my reasons for decision above, orders will be made to the following effect, to be published separately in due course:
a) The Respondent is pay to the Applicant the gross sum of $16,381.91 (subject to applicable taxation as required by law) by way of electronic funds transfer into the Applicant’s nominated bank account.
b) The Respondent is to pay into the Applicant’s nominated superannuation fund the sum of $2,457.29 (i.e. 9.5 percent of $16,381.91).
c) Orders (b) and (c) above must be complied with within 14 days of the date of the above orders being made.
The Applicant appeared for himself.
Mr James Schmidt (Manager for the Respondent) appeared for the Respondent.
A hearing was held (by telephone) on 19 March 2020.
Printed by authority of the Commonwealth Government Printer
1 Selvachandran v Peteron Plastics Pty Ltd  IRCA 333; (2000) IR 371 at 373.
2 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685.
3 Edwards v Justice Giudice (1999) 94 FCR 561; (1999) 169 ALR 89;  FCA 1836 at .
4 King v Freshmore (Vic) Pty Ltd Print S4213  AIRC 1019 at  to .
5 Crozier v AIRC (2000) 50 AILR 4-488;  FCA 1031 at .
6 See more broadly: Jetstar Airways Ltd v Neeteson-Lemkes  FWCFB 9075; CSL Limited v Chris Papaioannou  FWCFB 1005
7 Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) at ; Read v Gordon Square Child Care Centre Inc  FWCFB 762 (Acton DP, Deegan C and Gregory C) at  to .
8 Jurisic v ABB Australia Pty Ltd  FWCFB 5835 at .
9 Fastidia Pty Ltd v J B Goodwin  AIRC 223 at .
10 Williams v Top Image Hair Design  FWA 9517 at .
11 Sykes v Heatly Pty Ltd t/a Heatly Sports PR914149 (AIRC, Grainger C) at .
12 Sam Technology Engineers Pty Ltd v Mr Andrew Bernadou  FWCFB 1767, 60 percent personal use.
13  FWCFB 7206 at .
14 Ibid at at , citing Sprigg v Paul’s Licensed Festival Supermarket (1988) 88 IR 21 and Bowden v Ottrey Homes Cobram and District Retirement Villages  FWCFB 431.
15 Double N Equipment Hire Pty Ltd t/a AI Distributions v Humphries  FWCFB, at .
16  FCAFC 161.
17 Ibid at .