[2021] FWC 1756 [Note: This decision has been quashed - refer to Full Bench decision dated 1 September 2021 [2021] FWCFB 5419]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Unfair dismissal

Milena Molina
v
Brett Galloway
(U2020/4351)

DEPUTY PRESIDENT DEAN

SYDNEY, 31 MARCH 2021

Application for unfair dismissal remedy – unfairly dismissed – compensation ordered.

[1] Ms Milena Molina made an application under s.394 of the Fair Work Act 2009 for an unfair dismissal remedy. Her application named APT Corporation Pty Ltd T/A Brett Galloway Solicitors Barristers & Attorneys (APT) as her employer. However, for reasons set out later in this decision, I am satisfied that Mr Brett Galloway was her employer and have amended the name of the respondent to Brett Galloway (the Respondent).

[2] Her application was heard together with an application made by Mr Raymond Zhai, who had been employed as a solicitor with the Respondent and was dismissed on the same day (together referred to as the Applicants).

[3] This application has a long history and there are a range of matters including jurisdictional objections and procedural matters that need to be dealt with.

[4] Having considered all of the matters required under the Act, I have decided that Ms Molina’s dismissal was unfair and have awarded compensation as a remedy.

The dismissal

[5] Ms Molina commenced employment with Mr Galloway on 2 December 2011 and was in the position of Practice Manager when she was summarily dismissed on 18 March 2020. The termination letter handed to her by Mr Galloway reads as follows:

“At the date and time you receive this letter, which will be between 10.30 am and 11.00 am on Wednesday 18th March, 2020, you are Summarily Dismissed from your employment forthwith for what I consider to be serious misconduct ⁓

1 serious continuing insubordination;

2 attempted intimidation;

3 sabotage;

4 making agreements with others without my knowledge and or consent;

5 any further or other grounds as may be advised.

In the circumstances as I see them, I consider no other course of action would be reasonable nor do I consider it reasonable to continue to work with you at all.

The relevant history goes like this –

1 in May 2019 you demonstrated serious insubordination when a discussion came up concerning my personal choice to act for a homeless person with no money or assets in circumstances where you actively encouraging the staff to work for another client who was refusing to pay some trial fees and who was refusing to pay for fees on sentence on the basis you might be able to recover the fees later.

2 you made the debate one of the rest of the firm versus me and said you and Ray would leave and take the staff with you. This was said in the presence of all staff. You were actively challenging my authority.

3 in my office, shortly thereafter you subjected me to name calling and you elbowed me in the side as you went to slap me. I was dumfounded by your behaviour. I suggested you either go to anger management or get another job. I could not believe your behaviour toward me, after all I had done for you.

4 over the last 10 months, you have continued to endeavour to alienate me from the staff by gossiping about me behind my back about personal matters in relation to which you could have no personal knowledge. This has been positively noticeable with one member of staff.

5 you and another employee told a client in a highly public court case that the other side had a better lawyer than me. It was suggested that he get someone better and sack me. You denied your conduct when I confronted you at the time, later last year. You knew or ought to have known that I regarded your actions as trying to sabotage my business as the [client] is well known in both Sydney and Melbourne. Had he gone to another law firm and or sacked me, your statement/actions have caused serious harm to the business. In my view, your actions could only be considered as an attempt to sabotage my business.

6 after the client told me about your conduct, I spoke to the other employee. I then spoke to you. Your versions of events were vastly different and irreconcilable. I preferred the other employee’s version where he admitted the client’s assertions to me as truthful.

7 after I spoke with you, you contacted the client and threatened him before telling him that the ‘incident’ was a figment if [sic] his imagination.

8 more recently you purported to do a financial deal with one or more employees which you knew you were not authorized to do, which was not discussed with me nor signed by me and for which you had no authority whatsoever and for which there is a small prospect I may become liable.

9 In my view, your actions clearly fall in to the categories set forth above and in to other categories which I shall include, if the matter goes in to litigation.

You are immediately ⁓

1 leave your work phone on the desk with any relevant passcode;

2 leave your work keys and any Carpark entry / exit key on the desk;

3 leave the keys to the car owned by me that you drive.

You have 14 days from to [sic] to buy it or have the lease assigned to you otherwise I will return it to the leasing company. If you buy it or take over the lease, you can have the keys on execution of the relevant documents;

4 leave the premises;

5 you are not permitted to remove any of my intellectual property, any client file, any client list or anything else relevant to the clients and or the business. If you have any of my information at your home, it is to be returned to the office by 4.00pm today.”

[6] According to Ms Molina, Mr Galloway was accompanied by security guards, and called the police to escort her from the premises in the presence of her colleagues.

Procedural history

[7] Ms Molina’s application was lodged on 7 April 2020. A conciliation conference that took place on 18 May 2020 was unsuccessful, and the application was listed for directions and conference before me on 25 May 2020.

[8] The Employers Response (Form F3) indicated that the Respondent had a jurisdictional objection, that being that the Respondent was a small business and it complied with the Small Business Fair Dismissal Code (the Code).

[9] The Applicants filed their witness statements and submissions in accordance with the Commission’s directions on 17 June 2020.

[10] On 3 July 2020, Mr Overall, Counsel for the Respondent, sought an extension of time to file the Respondents material. The extension was granted, and the material was due on 13 July 2020.

[11] On 14 July 2020 the Commission wrote to Mr Overall as no material had been filed by the extended due date.

[12] Mr Overall wrote to the Commission later on 14 July 2020. The email reads:

“Dear Ms Wong,

Thank you for your email re the above matters.

I have today (Tuesday 14 July) ceased to act for APT Corporation in both the Molina and the Zhai matters.

I have impressed upon Mr. Galloway, particularly over the past week that he needs to prepare statements of evidence and file and serve them on Monday 13 July.

On Sunday 12 July, I provided Mr Galloway with 3 written and signed submissions so he could file and serve them the next day in accordance with the Commission’s orders. These submissions were drafted from oral instructions given to me by Mr. Galloway. and some draft statements of evidence. Those 3 submissions were:

1. In ZHAI - Submissions that the FWC lacks jurisdiction to hear the matter;

2. In ZHAI - Submissions on the substantive matter; and

3. In MOLINA - Submissions on the substantive matter

I informed Mr. Galloway that he must file and serve these submissions together with statements of evidence on Monday 13 July as per the Commission’s orders.

On Monday 13 July and on Tuesday I made numerous attempts to contact Mr. Galloway seeking to confirm whether he had filed and served the submissions and statements. Mr Galloway did not answer my phone calls. He did not call me back after I left messages on his phone. He did not respond to my emails nor to my SMS messages.

In addition to my inability to obtain proper instructions there is a further ethical issue that I have raised with Mr. Galloway on numerous occasions and that he has failed to address.  Accordingly, I have informed Mr Galloway that I have ceased to act for him and his company.

I have done my best to ensure the Commission’s orders were complied with. However, compliance was out of my hands. I trust my ceasing to act will not seriously inconvenience the Commission. I trust the Commission will understand that I can no longer act in this matter where my ethical obligations are compromised.

Finally, I confirm that I will not be attending the second conciliation conference listed for Friday 17 July.  I have informed Mr Galloway that he should attend this conference.

Kind regards,
John Overall B.Agr; Dip.Ed. LLB(Hons)
Barrister”

[13] The Respondent’s submissions and witness statements were subsequently filed on 14 July 2020.

[14] Ms Molina’s submissions in reply were filed on 22 July 2020.

[15] On 28 July 2020 Mr Paul McGirr, solicitor, filed a notice of commencing to act for the Respondent.

[16] The first hearing day was scheduled for 29 July 2020. At the commencement of the hearing Mr McGirr made an application for an adjournment on the basis that he had not had sufficient time to obtain proper instructions. The application was not granted given the time already provided to the parties to prepare for the hearing, and that it was a choice made by Mr Galloway to change legal representation so close to the commencement of the hearing. The hearing proceeded on 29 July 2020.

[17] The second day of the hearing was scheduled for the following day, 30 July 2020, and Mr Galloway was scheduled to give his evidence. At 8:38am on 30 July 2020 an email was received from Mr McGirr who advised that Mr Galloway had flu symptoms and required a COVID test.

[18] When the hearing commenced on 30 July 2020 Mr McGirr indicated he had issued a notice to produce that morning in relation to both Applicants. I explained to Mr McGirr that he needed to make an application to the Commission for an order for production if he wished to have the Applicants produce documents. Mr McGirr was also advised that the adjournment, which became necessary because of Mr Galloway’s alleged illness, would not be used as an opportunity to ‘improve’ his client’s case – something that Mr McGirr had been complaining about during the first day of hearing when the Applicants sought to answer his questions with something other than a yes or no answer.

[19] Mr McGirr outlined the documents being sought as tax records of Ms Molina and airplane booking records of Ms Molina over a specified time period. I indicated at the time that the documents sought were either of no apparent relevance or were, or ought to have been, in the possession or control of the Respondent. Further, if this were the case, I would be unlikely to issue an order for production but would make a final decision when such an application was properly made.

[20] Other than dealing with these procedural matters on 30 July, the proceedings were adjourned due to Mr Galloway’s absence.

[21] Also on 30 July 2020, Mr McGirr emailed a document to the Commission headed ‘Respondent’s outline of submissions on jurisdiction’ which related to Mr Zhai’s application. This document was dated 13 July 2020 but had not previously been filed by the Respondent.

[22] The hearing date of 31 July was subsequently vacated due to Mr Galloway’s alleged illness. The applications were relisted for 17 and 21 August, however due to the unavailability of the parties, the hearing dates were pushed back to 15 and 16 October 2020.

[23] An application for an order for production was subsequently made in respect of Ms Molina. As a further conciliation conference had been arranged with another member of the Commission, the application for an order for production was considered at the commencement of the next hearing date.

[24] In an email dated 14 October 2020, Mr McGirr indicated that further ‘preliminary matters’ would be raised at the hearing the following day. These matters included ‘the issue of additional evidence discovered’ by Mr Galloway, and Mr McGirr foreshadowed an application for a further adjournment. Additionally, the jurisdictional objection raised in mid-July relating to Mr Zhai needed to be dealt with.

[25] At the outset of the hearing on 15 October 2020 the Respondent’s application for an order for production was considered. I declined to make the order and the reasons are set out later in this decision.

[26] Ms Molina concluded her evidence on 15 October 2020, as did Mr Zhai. The Respondent’s witnesses were not available at the conclusion of the Applicants’ evidence, resulting in a further delay. When the hearing resumed later on 15 October, the evidence of Mr Vu and Mr Silvestre was taken.

[27] Shortly after 1pm on 15 October, Mr McGirr advised the Commission that Mr Galloway had to go home because his wife had fallen over and he had to attend to her. Mr Galloway was then unavailable to give his evidence. The hearing concluded early as no further witnesses of the Respondent were available. It was agreed that the hearing would resume at 9am on 16 October to ensure that the remaining witnesses would be finalised that day.

[28] At 9am on 16 October 2020, Mr Galloway was not in attendance, nor were the Respondent’s remaining witnesses. The hearing was stood over until 10am to allow Mr McGirr further time to attempt to contact his client. At 10am, Mr McGirr advised he had had no contact from Mr Galloway since the previous afternoon and had been unable to contact him. The hearing was then concluded and directions were issued regarding the filing of closing submissions.

[29] On 19 October 2020 the Applicants filed their closing submissions in accordance with the Commission’s directions. The closing submissions of the Respondent were due on 21 October 2020.

[30] Instead of receiving closing submissions from the Respondent, Mr McGirr filed a submission seeking the proceedings be reopened to allow the evidence of Mr Galloway and his remaining witnesses. He filed a statutory declaration of Mr Galloway in support of the application to reopen, along with a medical certificate dated 15 October 2020 certifying that Mr Galloway was unable to work from 15 to 16 October 2020 due to a medical condition.

[31] Closing submissions were subsequently filed by the Respondent on 22 October 2020 on the basis that the application to reopen the proceedings may be declined.

[32] On 23 October 2020 the Applicants filed their submissions in reply.

[33] On 26 October 2020 the Commission advised the parties that the application to reopen the case was refused. The reasons for refusing the application are set out later in this decision.

Procedural and jurisdictional matters

[34] As noted earlier, there are several matters that need to be dealt with in this decision. I will deal with them now, before turning to whether Ms Molina’s dismissal was unfair.

Who is Ms Molina’s employer?

[35] Ms Molina was employed by Mr Galloway on 2 December 2011. In around February 2020, her employment was transferred from Mr Galloway to APT, of which Mr Galloway is the Director and Principal Solicitor.

[36] Ms Molina gave evidence that she did not provide her consent to transfer her employment to APT in 2020 accordingly her employment was in fact still with Mr Galloway.

[37] In support of her contention that her employment had continued with Mr Galloway until her dismissal, she relied on a decision of the Federal Court in McCluskey v Karagiozis 1 where Merkel J said:

“The law is clear … As was stated citing Lord Atkin in Noakes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at [1026] there is no power in an employer ‘to transfer a man without his knowledge and possibly against his will from the service of one person to the service of another. I had fancied that ingrained in the personal status of a citizen under our laws was the right to choose for himself whom he would serve: and that right of choice constituted the main difference between a servant and a serf.’” 2

[38] Attached to Ms Molina’s witness statement were her PAYG summaries for the financial years ending 2017, 2018 and 2019. These identified Mr Galloway as her employer.

[39] Based on the evidence of Ms Molina, and in the absence of any evidence to the contrary from Mr Galloway, I am satisfied that her employer at the time of her dismissal continued to be Mr Galloway. Accordingly, I correct the application pursuant to s.586 of the Act to reflect the correct name of her employer.

Order to Produce

[40] As outlined in paragraph 23 above, an application was made by the Respondent for an order that Ms Molina produce certain documents. Ms Molina opposed the making of the order. I heard argument from both parties at the commencement of the hearing on 15 October 2020.

[41] The application sought the production of Ms Molina’s tax returns for the financial years 2017, 2018 and 2019 and records of all interstate and intrastate aeroplane travel for the period 30 June 2017 to 17 March 2020.

[42] I heard argument for and against the production of the documents. The Respondent contended that “in these proceedings a major issue is whether the Applicant received a commission. Another issue is whether the Applicant has misused credit card/s of the Respondent”.

[43] Ms Molina’s solicitor advised that Ms Molina had not declared the cash payments she had received on her tax return and had taken steps through her accountant to rectify that situation. Additionally, she had already annexed her PAYG records for the 2017, 2018 and 2019 financial years to her witness statement. Given the only basis for the production of the tax records went to the cash payments, and in light of the admission that the cash payments had not been declared, it was unnecessary in my view for these records to be produced.

[44] In terms of the records of Ms Molina’s flight travel, the allegation was that Ms Molina had misused the Respondent’s credit card. Given the credit card transactions were within the control and/or possession of the Respondent, who could have produced them at any time, I declined to make the order for production.

Application to reopen case

[45] On 16 October 2020, when it became obvious that Mr Galloway was not in attendance, I asked Mr McGirr whether there was any reason I should not conclude the proceedings at that time and deal with the application based on the material before me. That material clearly did not include any evidence of Mr Galloway. Mr McGirr’s response was: “I have no information as what’s happened to my client so I have nothing further to put”. I then concluded the proceedings and confirmed the directions for the filing by both parties of their closing submissions.

[46] As outlined in paragraph 30 above, Mr McGirr made an application to reopen the proceedings on 21 October 2020 to allow the evidence of Mr Galloway and the Respondent’s remaining witnesses.

[47] In Mr Galloway’s statutory declaration, he explained his non-attendance on 16 October 2020 as follows:

a. When he arrived home at around 1.55pm on 15 October he assisted his wife inside their house.

b. Shortly after this time, their dog Jock was extremely excited and so Mr Galloway bent over to give him a calming pat. Unfortunately, Jock jumped up and hit Mr Galloway’s face which caused him to fall backward and hit his head.

c. Mr Galloway was not sure but thinks he could have lost consciousness.

d. When he regained his senses, he realised he had blood in his mouth and had a loose tooth.

e. He went inside and told his wife.

f. They called a taxi at about 5.30pm and went to a dentist.

g. The dentist advised him to go to a doctor as soon as possible if he had been unconscious.

h. Mr Galloway and his wife went to the medical centre at Darlinghurst as it was outside his regular doctors’ hours.

i. He told the doctor what had happened and the doctor told Mr Galloway to go and have tests done. He was given a referral to St Vincent’s Hospital and was provided with a medical certificate.

j. The referral to St Vincent’s Hospital was in the following terms: “Thank you for seeing Mr Brett Galloway, aged 59 years. Brett is feeling very unwell today, dizzy, nauseous etc. He has prominent nystagmus on examination today. I would appreciate review and perhaps imaging to clarify his diagnosis…”

k. The medical certificate was in the following terms: “This is to certify that Mr Brett Galloway is unable to work from 15/10/2020 to 16/10/2020 inclusive due to a medical condition”.

l. Mr Galloway said he then went to St Vincent’s Hospital and on arrival was told he would need to wait as there was quite a large number of people there.

m. As he was not feeling well, he and his wife decided to go home at around 8.30pm and return to the hospital the following day or sometime later.

n. Mr Galloway said that when he got home he said to his wife that he should check his phone for messages because Mr McGirr needed to know what had happened, but his wife told him to check his phone in the morning because he was always up early, to which Mr Galloway agreed.

o. Mr Galloway then took a dose of Valium to help him sleep. He said he woke up at around 10am the next morning and said to his wife: “goodness look at the time. I’m supposed to be in court, ring Paul McGirr urgently and tell him what has happened”.

p. Mr Galloway said he heard the conversation between Mr McGirr and his wife that took place at around 10.10am, during which his wife told Mr McGirr that Mr Galloway had been unwell and only just woken up, and Mr McGirr replying that the Deputy President had just declared the proceedings concluded around 10 minutes ago and the case was over. Mr McGirr also said he had been phoning and emailing Mr Galloway but had had no reply from him.

q. Mr Galloway said that given how he was feeling that morning, it would have been unwise for him to give evidence as he was not thinking clearly and was still suffering from slight vertigo.

r. Mr Galloway said he had been unwell for some time and in hindsight he realised that the illness from which he was suffering has resulted in him being unable to properly instruct counsel and unable to properly prepare for these proceedings. His illness had also resulted in him taking 10 hours to do something that used to take him one hour to complete, and the simplest of tasks had become very difficult.

s. He apologised for the delay caused by him in this matter, declared that he wished to give evidence on his own behalf, and said that the events on 15 and 16 October were a result of a genuine accident.

[48] Unsurprisingly, the Applicants vigorously opposed the reopening of the proceedings. They described the application to reopen as extraordinary given Mr Galloway had been the cause of numerous delays without proper explanation, and there was no evidence from his wife, the dentist or the hospital. They contended it was an abuse of process to enable further delay. They further contended that the statutory declaration of Mr Galloway was self-serving, and given the prior conduct of the Respondent, should be given little if any weight.

[49] In deciding whether to reopen proceedings, the following considerations are relevant:

a. Is the evidence relevant, in that it engages in one or more of the issues requiring determination?

b. Was the evidence able to be obtained with reasonable diligence for use during the hearing?

c. Are the interests of justice served better by allowing or rejecting the evidence?

d. What is the likely prejudice to the party resisting the application?

e. Will a denial of procedural fairness likely arise if a party does not have an adequate opportunity to argue its case?

f. Was the evidence not led because of inadvertence or mistake?

[50] At the time I made the decision not to reopen the proceedings, I considered the following:

a. The explanation provided by Mr Galloway as to his non-attendance on 15 and 16 October 2020. In this regard I was persuaded by the submissions of the Applicants that Mr Galloway’s statutory declaration was self-serving and not supported by other obtainable evidence, and given his prior conduct in the proceedings, I considered that I should place little weight on it.

b. That the evidence of Mr Galloway is relevant to the proceedings.

c. The evidence of Mr Galloway was available for use during the hearing and there was a reasonable opportunity for him to put his evidence before the Commission.

d. The interests of justice would be better served by not reopening the proceedings in the circumstances described in the procedural history above.

e. The prejudice to the Applicants would have involved further delay and additional legal costs, in circumstances where Mr Galloway’s conduct had already resulted in both delay and increased costs for the Applicants.

f. There is no denial of procedural fairness as the Respondent has had an adequate opportunity to argue its case.

g. There is no suggestion that evidence was not led because of inadvertence or mistake.

[51] Further, there is a strong public interest in maintaining the finality of litigation.

[52] I also note that Mr Galloway and Mr McGirr were on notice on 15 October 2020 that the proceeding would not be allowed to drag out further than what had already occurred. This is clear from the exchange that took place between Mr McGirr and me at the beginning of the day when Mr McGirr was seeking permission to introduce new evidence:

THE DEPUTY PRESIDENT:  Well, Mr McGirr, I'm sure you're very experienced in litigation and you would know that it's not the normal course that, you know, once you've finished your cross-examination, you don't get another turn, that's it, we've moved on.

MR McGIRR:  That is normally the case.

THE DEPUTY PRESIDENT:  Yes.  And these proceedings have already taken significantly longer, in terms of our normal time frames.  It’s not normal - it may be perfectly acceptable in other courts, but in the Fair Work Commission we have an obligation to deal with matters quickly.  It's a particular requirement of the Act and this is already going for a very long period of time.  So - - -

MR McGIRR:  Well, (indistinct) - - -

THE DEPUTY PRESIDENT: I'm not at liberty to simply keep giving parties the opportunity to provide new evidence and extend these proceedings beyond what has already been a reasonable time frame, to provide evidence and deal with the hearing.

[53] Having considered all of these matters, I was satisfied that, on balance, the proceedings should not be reopened.

New evidence

[54] On 15 October 2020 Mr McGirr sought to introduce new evidence. Mr McGirr’s reasons for making the request related to what he referred to as ‘statements and surplusage’ that were said to arise from the answers given by the Applicants in cross examination. He was advised by the Commission that he was able to put documents to Ms Molina in cross examination if he so chose 3, but I would otherwise not allow further evidence to be filed at such a late stage in the proceedings.

[55] I decided not to allow the new evidence because:

a. It was clear from the exchange between Mr McGirr and the Commission on 15 October 2020 and set out earlier that allowing new evidence at such a late stage in the proceedings would result in a further adjournment and add further costs to the Applicants. It would have also involved having to recall one of the Applicants for further cross examination, which would again add further cost and delay,

b. the parties had had a reasonable opportunity to put their case, and

c. the ‘surplusages’ that Mr McGirrr complained of were a direct result of his own questions to the Applicants in cross examination.

Was Ms Molina’s dismissal consistent with the Code?

[56] In its Employer Response to the application, the Respondent contended that Ms Molina’s dismissal was consistent with the Small Business Fair Dismissal Code.

[57] The Respondent made no further mention of the Code in any of the submissions it filed nor in the statutory declaration of Mr Galloway, which was not ultimately accepted into evidence in any event.

[58] In relying on the decision in Pinawin v Domingo 4, Ms Molina contended that for a dismissal to be consistent with the Code, it was necessary to determine:

a. Whether the Respondent genuinely held a belief that the Applicant’s conduct was sufficiently serious to justify immediate dismissal; and

b. whether such a belief was, objectively, based on reasonable grounds.

[59] It is for the Respondent to establish that it had reasonable grounds to hold the belief.

[60] It was argued on behalf of Ms Molina that the summary dismissal section of the Code applies to dismissals without notice on the ground of serious misconduct as defined in Regulation 1.07 of the Fair Work Regulations (the Regulations).

[61] The Termination Letter provided the following reasons for the dismissal:

a. Serious continuing insubordination;

b. Attempted intimidation;

c. Sabotage;

d. Making agreements with others without my knowledge or consent; and

e. Any further or other grounds as may be advised.

[62] The Respondent’s reasons for dismissing Ms Molina, it was argued, are not prescribed by the Regulations and accordingly did not justify immediate dismissal. The written submissions filed on behalf of Ms Molina detailed the reasons why this argument was sound.

[63] Having considered the evidence and submissions, I am satisfied that Ms Molina’s dismissal was not consistent with the Code. Apart from accepting the evidence and submissions made on her behalf, there is no evidence or submissions filed by the Respondent that would support a finding that the dismissal was consistent with the Code.

Was Ms Molina unfairly dismissed?

[64] Having dealt with the procedural and jurisdictional matters, I now turn to whether Ms Molina was unfairly dismissed.

The case for Ms Molina

[65] Ms Molina was employed by Mr Galloway on 2 December 2011 and was summarily dismissed on 18 March 2020.

[66] Ms Molina said that she was never given a written employment contract.

[67] Ms Molina said that at the time of her dismissal she was paid an annual salary of $121,350 plus superannuation. Her salary was split into two payments:

a. $1683.66 (gross) per week paid by electronic fund transfer and

b. $650.00 per week in cash

[68] Ms Molina gave evidence that during the course of her employment, she had made a number of requests to become a permanent full time employee, as she had initially been engaged on a casual basis. In January 2016 Mr Galloway offered to lease a car for her as she had been bankrupt some time earlier and would not be able to obtain finance herself.

[69] After an audit by the ATO of Mr Galloway in March 2017, Mr Galloway agreed to offer her a full time position. Mr Galloway offered, and Ms Molina agreed to, an annual salary of $115.800 split into part payments of:

a. $1578.85 (gross) per week paid by electronic fund transfer (or $82,100 annually) and

b. $650.00 per week in cash (or $38,800 annually).

[70] The cash payments were paid by cash cheques, and from 14 April 2017, every Friday afternoon Mr Galloway would authorise and draw cash cheques for himself for $1,500 and for Ms Molina $650. Ms Molina said she would cash the cheques the same day.

[71] Ms Molina gave evidence that only Mr Galloway and her received weekly cash wages.

[72] She said that in around April 2017 she was authorised to write cheques according to Mr Galloway’s instructions. When Mr Galloway asked her to draw cheques personally, he directed her to leave the cash in ‘a safe place’ or ‘the usual spot’ referencing a specific place in the office or at his home. She provided a text message between them from August 2019 evidencing one example of such a direction.

[73] Ms Molina said as recently as 6 March 2020, Mr Galloway had attended the office, drew the cheques for him and Ms Molina, and then accompanied her to the bank. She also gave evidence that if there were insufficient funds in Mr Galloway’s bank account, he directed her to make the cash payments from the cash monies kept on the premises.

[74] Ms Molina gave evidence that she recorded all cash payments.

[75] The cash payment arrangement continued until her employment was terminated.

[76] In terms of her role as Practice Manager, she gave evidence that her responsibilities included:

a. Diary management and client liaison for Mr Galloway;

b. Negotiating fees with clients and invoicing;

c. Chasing payment of fees from clients;

d. Payment of business expenses including phones, internet, rent, wages, superannuation, insurance premiums, stationery, staff travel expenses, and barristers’ fees.

e. Payment of Mr Galloway’s personal expenses such as his mortgage, car, car repairs, medical bills, optometrist fees, partners’ TAFE fees and vet bills;

f. Interviewing, hiring staff and training new staff;

g. Supervising practical legal training student’s, clerks, and junior solicitors;

h. Social media management;

i. Facilities management;

j. IT and Technology management; and

k. Team events and birthdays.

[77] She also kept records and receipts particularly regarding the movement of cash funds held on the premises.

[78] Ms Molina’s evidence went in some detail as to the way in which cash was managed. She said that because she started to notice that Mr Galloway would lose track of the cash, she created a record of the cash deposits made to Mr Galloway. The record noted the time, date, payer and/or receiver, the amount of money and the reason for the transaction/payment (the Transaction Record).

[79] Ms Molina said that Mr Galloway conducted an audit of the financial records, including the Transaction Record, in August 2017, after which time he asked Ms Molina to keep a cash journal at her home so other staff did not see it. She agreed to do so and thereafter brought the journal to the office when requested to do so by Mr Galloway for his review.

[80] On 20 February 2020, Mr Galloway changed the passwords to his bank accounts which meant Ms Molina no longer had access to the bank accounts. Over the next two weeks she showed Mr Galloway the systems and processes that she had implemented and how to track what needed to be paid and when. Mr Galloway did not provide her with a reason for the change in process.

[81] Ms Molina gave evidence that on or around 5 March 2020 she had a conversation with Mr Galloway about financial matters and offered to arrange a meeting for the two of them, with his accountant, to go through the cash journal and other financial matters. She said Mr Galloway agreed and she took the Transaction Record to work on 9 March 2020 for that purpose.

[82] Mr Galloway avoided Ms Molina for the rest of that week after withdrawing an invitation to his wedding which was to take place on 13 March 2020. She said she took the Transaction Record home on 12 March 2020.

[83] Ms Molina said that in the lead up to 17 March 2020, Mr Galloway had exclusive control over the bank accounts and had not been paying staff wages on time, nor had he been paying other business expenses such as barristers fees.

[84] Ms Molina said she, Mr Zhai and another solicitor, Ms Tohi, were concerned that Mr Galloway was spending his clients’ money on his wedding. They were all aware of the debt, in the vicinity of $500,000, he owed to the ATO.

[85] Mr Galloway arrived at the office on 17 March at around 1pm. Ms Tohi, Mr Galloway and Ms Molina went outside to discuss the financial status of the business in light of the courts vacating jury trials as a result of COVID-19. The cancellation of work was detrimental to the business as most work booked for the upcoming six months was Legal Aid trials.

[86] Ms Molina said Mr Galloway then indicated he would go home to check the accounts and make some plans. Ms Molina asked him to speak with the staff, indicating “they are not OK, they are worried and stressed”. She also asked him to speak with Mr Zhai, as he was owed a lot of commissions and was growing frustrated. Ms Molina said Mr Zhai had a lot of private clients which might provide some work for the business.

[87] Ms Molina went inside and updated Mr Zhai about her conversation with Mr Galloway. Mr Zhai then spoke with Mr Galloway and called her to join the conversation which was to the following effect:

Ms Molina: What’s going on?

Mr Galloway: Nothing, I was just telling Ray that I will sort out his commissions tonight. I’m about to go home and I will do it then.

Mr Zhai: Brett, I’m not just worried about my commissions, I’m concerned about the whole office and whether you have the ability to manage the accounts. Why don’t you let M do her job?

Mr Galloway: I won’t be threatened, I told you I’m going home to sort out the bills.

Mr Zhai: Why can’t you do it from here now? You just got here’.

Mr Galloway: I don’t have the password to the bank accounts, it’s at home in my safe.

[88] Ms Molina said Mr Galloway then walked away and she followed him to his office where a conversation to the following effect took place:

Mr Galloway: I won’t be threatened by my junior solicitor

Ms Molina: He didn’t threaten you, he’s just worried about the business and the staff. They are all very good friends and he’s worried about the girls. Ray could leave tomorrow and get a job with any one of his mates, he has plenty of colleagues and clients but he’s staying here because he’s loyal to our team. Why do you have such a problem with Ray?

Mr Galloway: He’s a spoilt kid and he can leave if he wants to, I don’t care.

Ms Molina: Brett please don’t’ let your ego get in the way, Ray is just being assertive, and we all need transparency. Tell me honestly how long can we realistically keep paying the staff without any other money coming in for the next 2 months?

Mr Galloway: I don’t know, I’m going home to look at the accounts.

Ms Molina: Ok, that’s not a problem, we can work this out, we’re going to be ok we just all need to work together and stay strong.

Mr Galloway: That’s fine, I said, I will come back tomorrow. We’ll have a meeting at 9am, you, Jess and I, to discuss the financials. You better tell Ray to pull his head in.

Ms Molina: Ok, I will speak to him for you.

[89] Ms Molina gave evidence that Mr Galloway left the office around 3.30pm and she was left to speak with the staff, some of whom were crying from the stress and uncertainty of the situation.

[90] She said she had no indication from Mr Galloway that her employment was at risk.

[91] She did not see Mr Galloway again until around 11am the following day, 18 March 2020, when he arrived at the office with two security guards. He handed her a letter and said words to the effect of: “you’re fired, get out”. Mr Galloway also called the police, and the security guards escorted her off the premises, after she had handed over her phone, office keys, and a pink USB that contained a copy of the financial records to the police.

[92] In response to the Termination Letter generally, Ms Molina denied each allegation and denied engaging in any form of misconduct.

[93] In response to the first dismissal reason, being ‘serious insubordination’, Ms Molina noted the incident as alleged by Mr Galloway occurred almost 9 months earlier. She set out in her witness statement her version of the conversation, and said she was not aware that Mr Galloway perceived it to be insubordination on her part. In her view, it was a frank discussion and nothing more.

[94] In response to the second dismissal reason, being that she challenged Mr Galloway’s authority, she denied saying the words attributed to her and denied discussing with other staff that they should all leave together. Ms Molina thought that this dismissal reason might have been related to a conversation she had with Mr Galloway in July 2019, in which she said that Mr Zhai had been working hard to bring in new business, and she considered that Mr Galloway resented Mr Zhai for this.

[95] In response to the third dismissal reason, being ‘inappropriate behaviour’, she categorially denied the allegation and said she did not try to intimidate Mr Galloway, raise her hand at him, or try to slap him. She said she is 5 feet 3 inches tall and petite in stature, and Mr Galloway is a solid build. She said the reason Mr Galloway left the office in such a manner was because she had said words to the effect of: “I can’t believe you are using drugs again. You need help once and for all Brett ...”. She said Mr Galloway had then told her to fuck off and pushed passed her and left the office.

[96] In response to the fourth dismissal reason, being ‘alienating’ Mr Galloway, Ms Molina denied this allegation, and said that the only change in her behaviour from her perspective was that she was no longer prepared ‘to act as an intermediary between Mr Galloway and his staff’. Having detailed in her evidence a ‘brief selection of complaints raised by staff’, she said that from October 2018 she encouraged individuals to raise their grievances directly with Mr Galloway.

[97] In response to reasons 5-7 regarding ‘sabotage’, Ms Molina denied the allegation. She said that she was unaware Mr Galloway thought she was trying to sabotage his business, and there was no reasonable basis for such a belief. She also set out her version of events regarding the incident in question which she said occurred more than three months prior to her dismissal.

[98] Ms Molina, in response to the final reason, being a ‘purported and unauthorised financial deal’, Ms Molina set out in her evidence the details of Mr Galloway’s car loan contract which was due to be finalised, and her role in having the car refinanced. Ms Molina thought that this might be what Mr Galloway was referring to in the termination letter but was not sure.

[99] In terms of the commission scheme that was in place for some staff, Ms Molina gave evidence the scheme was established in September 2017 when a former employee asked to be paid a commission on the work he brought into the business. Ms Molina said that initially the commissions were paid via bank transfer, but in late 2017 Mr Galloway instructed her to pay the commission from the cash he kept on the premises. As it was a cash payment, Ms Molina kept a record of the payment in the Transaction Record. She said she also started recording commission payments in an excel spreadsheet which was saved on the office computer which Mr Galloway always had access to. Ms Molina said that when commission payments were due, she would print the spreadsheet and ask Mr Galloway to approve the payments that were to be made. She tried to do this each month.

[100] In terms of the commission payments made to Mr Zhai, Ms Molina set out in her evidence the payment amount and date the commission payments were made, and whether the payments were in cash or by bank transfer.

[101] In terms of the commission payment made to Ms Molina of $25,000, Ms Molina gave evidence that she was integral in securing the client and so she asked Mr Galloway for a 25% commission for the work she did on the matter. Mr Galloway agreed to pay the commission, which equated to $25,000. She and Mr Galloway discussed moving monies into particular accounts because of an ATO garnishee order over some of Mr Galloway’s bank accounts, and ultimately she was paid the commission in multiple payments totalling $25,000.

[102] Ms Molina gave evidence that Mr Galloway audited the bank accounts in early March 2020 and advised her that everything was in order. Ms Molina also gave evidence that Mr Galloway’s accountant was aware of the payments made to her. She also denied that she used Mr Galloway’s credit card other than for business purposes.

[103] In summary, Ms Molina strenuously denied all the allegations made by Mr Galloway.

[104] Ms Molina also gave evidence that she had suffered personal and financial hardship because of her dismissal. She sought the maximum compensation order of 26 weeks’ pay.

[105] Ms Molina’s submissions responded to the Respondent’s reasons for her dismissal. It was submitted that the conduct described by the Respondent did not justify immediate dismissal and the following grounds were cited:

“a. The allegations in the Termination Letter refer to events that took place from 12 July 2019 to 17 March 2020, with all but one of the allegations taking place several months prior to the dismissal;

b. The alleged conduct does not warrant immediate dismissal in circumstances where the Applicant was permitted to remain employed after each occasion for several months;

c. The allegations lack specificity and/or relate to no conduct at all;

d. The conduct described is not prescribed by the Regulations as constituting serious misconduct; and

f. The words ‘attempted’ and ‘purported’ connote that the Applicant tried to achieve a particular outcome but failed.”

[106] It was submitted that the Respondent must establish that it had reasonable grounds to hold the belief, which could be established by providing evidence of inquiries or investigations the employer undertook to establish its belief.

[107] It was contended that the Respondent never put to Ms Molina that she was insubordinate, intimidating or attempting to intimidate Mr Galloway; or sabotaging Mr Galloway. The fact that Ms Molina was permitted to continue working for the Respondent for months after the alleged instances of serious misconduct indicates a lack of genuine belief that the conduct was sufficiently serious to justify summary dismissal. Further, no disciplinary action was taken at the time the conduct allegedly took place.

The case for Mr Galloway

[108] The effect of having refused the Respondent’s application to reopen the case means there is no evidence before the Commission from Mr Galloway.

[109] Even if I did have before me the evidence of Mr Galloway in the form of the witness statement filed prior to the commencement of the hearing, I note that nothing in his witness statement suggests that the dismissal of Ms Molina was undertaken in a manner consistent with the Code.

[110] The two witnesses who did give evidence, Mr Vu and Mr Silvestro, did little to deal with the matters put by the Respondent as reasons for Ms Molina’s dismissal. To the extent they did deal with those matters, their answers to questions in cross examination suggested they were unsure about key aspects of their testimony. Accordingly, to the extent there is any inconsistency between their evidence and that of Ms Molina, I prefer the evidence of Ms Molina.

[111] In the Respondent’s own outline of submissions dated 13 July 2020, it is highlighted that Mr Galloway has been the subject of professional disciplinary proceedings on two occasions.

[112] On the first occasion in November 2009, he was reprimanded with a finding that there was ‘a reasonable likelihood of a finding of unsatisfactory professional conduct’ because he had mixed trust money with other money, caused a deficiency in his trust account, and failed to keep this trust records so as they disclosed a true position in relation to trust money.

[113] In July 2012, Mr Galloway was reprimanded with a finding of ‘professional misconduct’. The substance of the matter was:

“1. Breaches of section 262 of the Legal profession Act 2004 – deficiency in trust account

2. Failure to report Trust irregularities to the Society contrary to section 263(i) of the Legal Profession Act 2004

3. Causing unidentified transactions to be posted to a miscellaneous Trust ledger

4. Unauthorised payment from the Trust account to the office account

5. Failure to implement a compliant trust account record

6. Failure to deposit transit money received in cash into its trust account

7. Failure to lodge an External Examiners Report within the required period

8. Failure to report Austrac significant cash transactions

9. Failure to supervise staff

10. Failure to pay superannuation entitlements and annual leave entitlements and provide a Group Certificate to an employee.”

[114] It was revealed in these submissions that Mr Galloway also had a debt to the ATO in excess of $500,000, although Mr McGirr denied this during the proceedings.

[115] The Respondent’s outline of submissions dated 13 July 2020 contended that following the finding of professional misconduct, Mr Galloway had no illusion as to his tenuous relationship of the legal profession if he failed to get his business and financial affairs in order. Accordingly, he decided to employ an assistant he could trust, being Ms Molina.

[116] Ms Molina had access to all of Mr Galloway’s bank accounts, both business and personal, and he trusted her to carry out her functions honestly. When cheques had to be signed, he trusted that the money was properly accounted for. Nevertheless, Mr Galloway submitted that she did not perform these functions honestly and used her power to access the bank accounts to defraud him.

[117] In terms of what Ms Molina said was an agreed commission payment to her, Mr Galloway contended that Ms Molina stole $25,000 from him. He said he did not discuss or approve this payment to her and had no knowledge of the theft until after she had been dismissed and he commenced a review of the accounts.

[118] He also contended that Ms Molina used a credit card in the name of ‘Galloways’ notwithstanding he had instructed her not to use the card and to destroy it. He alleged she used the card for numerous personal expenses without his authority.

[119] In terms of the cash payments of $650 per week to Ms Molina, Mr Galloway said that Ms Molina stole this money. He contended that every week she presented cheques to him for his signature and one of the regular cheques was $650 for petty cash.

[120] Surprisingly, given the allegations regarding the theft by Ms Molina, Mr Galloway’s accountant was not called to give evidence.

[121] The Respondent’s closing submissions dated 22 October 2020 are set out in full as follows:

“1. The Applicant has admitted to the Commission that she had defrauded the taxation office and has not declared commission or weekly cash payments as income in her taxation returns.

2. The Applicant, through her legal representative, refused to produce her taxation returns and to disclose other matters which may be contained therein as may be relevant

3. The Respondent is a solicitor of good standing in the Supreme Court of NSW. The Applicant’s claim that such a person would be party to defrauding the Australian Taxation Office lacks credibility.

4. The Applicant referred to advice from tax offices and accountants but has produced not one scintilla of evidence from any such advisors supporting her claim that she received advice that what was occurring was legitimate. Indeed her attempt to hide her taxation returns from the Respondent In these proceedings and to hide the receipt of commissions and cash payments from the Australian taxation office reflect adversely on her as to honesty and credibility.

5. The Applicant produced no evidence showing complicity in any way by the Respondent in such illegal activities.

6. The Applicant’s Evidence to the effect that she was an experienced office manager of many years standing and that that she did not know she had to declare commissions or a regular payment of $650.00 as income tax is not credible

7. The evidence from the Respondent is that he trusted her implicitly but certain documents he found in relation to commission consequent to termination and prior to termination caused him to terminate employment of the Applicant.

8. The Respondent submits that there was no evidence of agreement to pay commission between him and Ms Molina or between him and Mr Zhai and that the grounds for termination 2 are validly made out. If there had been an agreement there would on the balance of probabilities been some document evidencing agreement on the part of the Respondent

9. The Respondent submits that the evidence of the Applicant in relation to the alleged theft $25,000.00 and the theft by use of credit card including cab charge lacks credibility and when taken with the other matters referred to above in which the Respondent lack credibility or has admitted to filing false tax returns and preparing false PAYG statements which did not include the cash payments or the commissions leads the conclusion that the Applicant is not a credible witness.

10. Respondent submits that the payment of petty cash at the rate of $650.00 per week is clearly fraud conducted solely by the Applicant who was office manager. No evidence incriminating the Respondent or even ascribing to him knowledge thereof has been produced by the Applicant either as to payment of commission or payment of cash at the rate of $650 per week.

11. The evidence shows that a round-robin of cheques was conducted by the Applicant whereby the Applicant paid herself and/or her company a total sum of $25,000 in respect of cheques written between 12 February and 26 February 2018. The commission should find that this round-robin was not authorised by the Respondent and was conducted in a way as to hide the real recipients of these transactions. The Applicant submits that the money was paid to a company belonging to her but admitted there was no agreement specifically with the Respondent in this regard between the Applicant’s company and the Respondent and the Respondent submits that the Applicant’s evidence in this regard is not credible particularly taking into account the above-mentioned issue of credibility raised against the Applicant in paragraphs above.

12. The Respondent submits that the evidence concerning the use of bankcards for the benefit of the Applicant does not show such payments were authorised by the Respondent and the Applicant’s evidence in this regard should not be regarded as credible.

13. Respondent submits that the statement by the Deputy President in this matter to the effect that the commission has no interest in whether parties were defrauding the taxation office or filing false returns as that had no relevance to wrongful dismissal is wrong in law and is particularly relevant as to credibility and honesty and as to placing the employer in jeopardy for wrongful information being prepared for the purpose of defrauding the taxation office.

14. The Respondent submits that the failure to grant leave for a notice to produce to be issued in this matter is an error in law and resulted in a denial of natural justice.

15. The Respondent submits that the ruling by the Deputy President in refusing to allow new evidence to be introduced in this matter including materials and evidence required to be adduced by the Respondent (including evidence discovered subsequent to the filing of statements) in response to new evidence by the applicant wrongfully allowed in the 3 Respondent’s opinion by the Deputy Pres to be admitted, notwithstanding a lengthy adjournment is a denial of natural justice to the Respondent.

16. The Respondent submits that the ruling by the Deputy President to the effect that there was an Order prohibiting the issue a Notice to Produce during the proceedings is wrong in fact and law and the refusal of leave due issue such a notice to produce is a denial of natural justice to the Respondent”.

Conduct of the Respondent during the proceedings

[122] Before considering whether Ms Molina’s dismissal was unfair, it is necessary to make some comment about the conduct of the Respondent throughout the proceedings, including its closing submissions set out above.

[123] The manner in which the Respondent, including through his legal representative, engaged with the Commission throughout the proceedings fell well short of the standard expected of a ‘highly experienced and well regarded lawyer’.

[124] As already outlined, there were numerous adjournment requests, many of which had to be granted, which delayed the proceedings and increased the legal costs for the Applicants.

[125] Mr Galloway’s witness statement was poorly laid out, difficult to follow and many of the annexures were never filed with the Commission.

[126] The submissions filed by Mr Galloway did not deal with the matters I needed to decide. Additionally, a number of highly misleading and inaccurate submissions were made by the Respondent. For example, in relation to paragraph 16 of the Respondent’s closing submissions which is set out above, it was never the case that I said there was an order prohibiting the issuing of an order for production of documents. This matter was the subject of an exchange between Mr McGirr and me and is captured in the transcript of the proceedings on 15 October 2020 5 in which I clarified that directions, and not an order, had been issued to ensure the orderly conduct of the proceedings. To make such a submission, particularly when the parties had access to the transcript, leaves a lot to be desired and is unfortunately but one example of the Respondent’s unsatisfactory conduct during the proceedings.

[127] Comments made by me during the proceedings in an effort to keep Mr McGirr focussed on the matters I needed to decide have been taken out of context and twisted. For example, it was submitted that I said the Commission has no interest in whether parties were defrauding the Australian Taxation Office (ATO) or filing false returns. In this case, Ms Molina admitted that certain cash payments made to her by the Respondent had not been declared by them as income to the ATO. In circumstances where such an admission had been made, there was nothing further to be gained by me reviewing her taxation records as the Respondent wanted to me to do. In this context, it was then a matter for the ATO and not the Commission to deal with any tax issues that might arise, and the tax records were not going to assist me in deciding whether Ms Molina had been unfairly dismissed.

[128] Finally, it is astonishing that the Respondent would complain of procedural unfairness and a denial of natural justice in terms of the conduct of the proceedings in the circumstances that have already been described.

Protection from Unfair Dismissal

[129] I am satisfied that Ms Molina is a person protected from unfair dismissal by virtue of s.382 of the Act. I will now consider if her was unfair within the meaning of the Act.

Was the dismissal unfair?

[130] A dismissal is unfair if the Commission is satisfied on the evidence before it that the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

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.

[131] There is no dispute that Ms Molina was dismissed, and that subsection (d) does not apply. I have already found that the dismissal was not consistent with the Code.

Was the dismissal harsh, unjust or unreasonable?

[132] The criteria the Commission must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

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.

[133] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd6 as follows:

‘... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.’

[134] I am required to consider each of these criteria in reaching my conclusion7, which I now do.

Valid reason - s.387(a)

[135] The Respondent must have a valid reason for the dismissal of Ms Molina, although it need not be the reason given to her at the time of the dismissal.8 The reason(s) should be ‘sound, defensible and well founded’9 or justifiable on an objective analysis of the relevant facts, and should not be ‘capricious, fanciful, spiteful or prejudiced’.10

[136] The question I must address here is whether there was a valid reason for the dismissal related to her conduct (including its effect on the safety and welfare of other employees).

[137] In cases concerning conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred11. The test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct and therefore acted in the belief that the termination was for a valid reason. The Commission must make a finding as to whether the conduct occurred based on the evidence before it12.

[138] Further, the Commission does not ‘stand in the shoes’ of the employer but will need to be satisfied that the termination of the employee was for a valid reason13.

[139] There is no mandate for giving the ‘valid reason’ criterion any greater emphasis or weight than any of the other criteria in s 387. It is well settled that the statutory requirement to ‘have regard to’ or ‘take into account’ requires the Commission to give the matter(s) weight as a fundamental element in the decision-making process. Even if it is found that there was a valid reason for the dismissal, an overall assessment must be made as to whether the dismissal was harsh, unjust or unreasonable.

[140] In this case, the Respondent dismissed Ms Molina for the reasons set out in the Termination Letter.

[141] For a number of reasons, including those already traversed earlier in this decision, I accept the evidence of Ms Molina. She was subjected to extensive cross examination and she did not resile from the key parts of her evidence that relate to the reasons for her dismissal.

[142] I am not satisfied that the Respondent established that Ms Molina’s summary dismissal was consistent with the Code for reasons already explained, including that there was no evidence by Mr Galloway that would establish that Mr Galloway held a belief that her conduct was serious enough to warrant immediate dismissal, and that such a belief was reasonably held by Mr Galloway.

[143] I do not consider that the reasons set out in the Termination Letter are reasons that warrant summary dismissal. Many of the reasons are either denied by Ms Molina or to the extent that she broadly agreed with some of the circumstances referred to the Termination Letter, occurred many months beforehand, and without any discussion with her at the relevant time.

[144] I accept her responses to each of the matters raised in the Termination Letter, particularly because there is no evidence of Mr Galloway to contradict it. Additionally, some of the matters raised in the Termination Letter are simply not credible, for example, that Mr Galloway was fearful of Ms Molina.

[145] In terms of cash payments to Ms Molina, I am satisfied that there was an agreement between Mr Galloway and Ms Molina that she would be paid partially in cash each week. It is unsurprising that an arrangement to make cash payments was not recorded in writing.

[146] Ms Molina kept a record of the cash payments which I accept Mr Galloway had full knowledge of and had endorsed. These records include the commission spreadsheet and the Transaction Record. She provided the records to Mr Galloway whenever he requested her to do so. I accept the submissions by Ms Molina that it makes no sense she would make such an extensive record of her own fraud. Further, many of the commission payments paid via an EFT bank transfer were clearly labelled ‘commission’. There is no doubt Mr Galloway had access to his own bank accounts. There is also no doubt that Mr Galloway’s accountant had information as to EFT payments for taxation purposes. There is no evidence to suggest that questions were raised by Mr Galloway’s accountant about the commission payments.

[147] Whether or not the agreement to pay part of Ms Molina’s salary as cash was for the purpose of avoiding tax and superannuation obligations is not a matter I need to decide.

[148] Ms Molina conceded she did not declare this income on her tax returns and confirmed she had taken steps to remedy this through her accountant.

[149] I am also satisfied that Mr Galloway agreed to pay Ms Molina a commission payment of $25,000.

[150] In short, there is no evidence to support a finding that Ms Molina engaged in theft or fraud.

[151] For these reasons, I am satisfied and find that on the balance of probabilities, the conduct allegedly engaged in by Ms Molina did not occur and accordingly there was no valid reason for her dismissal.

Notification of the valid reason and opportunity to respond - s.387(b) and (c)

[152] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,14 in explicit terms15 and in plain and clear terms.16 In Crozier v Palazzo Corporation Pty Ltd17 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:

“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”18

[153] An employee protected from unfair dismissal must also be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. Such requirement will be satisfied where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern.19 This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.20

[154] The requirement to notify of the reason, together with the requirement to provide an opportunity to respond to the reason, involves consideration of whether procedural fairness was afforded to Ms Molina before her dismissal was effected.

[155] On the evidence before me, I am satisfied that Ms Molina was not notified of the reason for her dismissal and was not given an opportunity to respond to the reason. Ms Molina was never warned or otherwise notified of the reasons for her dismissal before the decision to dismiss her was made. Because she was summarily dismissed, she did not have an opportunity to respond to the matters set out in the Termination Letter, and they had not previously been raised with her.

Unreasonable refusal by the employer to allow a support person - s.387(d)

[156] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present.

[157] Ms Molina was not provided with the opportunity to have a support person, having been unaware prior to her dismissal that she was to be dismissed. However she was not refused a support person being present.

Warnings regarding unsatisfactory performance - s.387(e)

[158] Ms Molina was not dismissed for unsatisfactory performance and this factor is therefore not relevant in my consideration.

Impact of the size of the Respondent on procedures followed (s.387(f)), and the absence of dedicated human resources management specialist/expertise on procedures followed (s.387(g))

[159] While the Respondent is a small employer and did not have dedicated human resource expertise, Mr Galloway is a lawyer with extensive legal experience who ought to have been able to ascertain the basics in how to fairly effect a dismissal.

Other relevant matters - s.387(h)

[160] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

[161] Ms Molina submitted the following matters were relevant:

a. She had been employed for almost 10 years with Mr Galloway and had an impeccable record of service;

b. She had been systematically exploited by Mr Galloway during the course of her employment;

c. Mr Galloway had intentionally disparaged her to former clients; and

d. Mr Galloway had summarily dismissed her during a global pandemic.

[162] While I have taken this submission into account, I do not consider it appropriate to place significant weight on the matters raised.

Conclusion

[163] Having considered each of the matters specified in s.387 of the Act and for the reasons set out above, I am satisfied that the dismissal of Ms Molina was harsh, unjust and unreasonable, and accordingly unfair.

[164] I now turn to the appropriate remedy.

Remedy

[165]  Having found that Ms Molina was protected from unfair dismissal, and that her dismissal was unfair, it is necessary to consider what, if any, remedy should be granted to her. Ms Molina seeks the remedy of compensation.

[166] Under section 390(3) of the Act, I must not order the payment of compensation to Ms Molina unless:

a. I am satisfied that reinstatement is inappropriate; and

b. I consider an order for payment of compensation is appropriate in all the circumstances of the case.

[167] I am satisfied that reinstatement is inappropriate and Ms Molina does not seek reinstatement.

[168] I am also satisfied that an order for the payment of compensation is appropriate, for the reasons I have found Ms Molina’s dismissal was unfair.

[169] 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 including:

(a) the effect of the order on the viability of the Respondent;

(b) the length of Ms Molina’ service;

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

(d) the efforts of Ms Molina (if any) to mitigate the loss suffered by her because of the dismissal;

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

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

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

[170] In determining an amount to be paid as compensation, and as was noted by a Full Bench, “[t]he well-established approach to the assessment of compensation under s.392 of the FW 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).21 This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages22.”

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).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

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.

Remuneration received, or likely to be received (s392(2)(c))

[171] While the evidence in this regard is limited, and while there is clearly an element of speculation in determining specifically how long Ms Molina would have remained employed, I consider that it is likely that Ms Molina’ employment would have continued for six months. I consider the effects of COVID-19 on business may have impacted on whether her employment would have continued beyond this time.

[172] Her earnings over that period would have been $60,675 gross.

Remuneration earned and income likely to be earned (s392(2)(e) and (f))

[173] Ms Molina commenced new employment on 20 July 2020, being 17.7 weeks after her dismissal, on an annual salary of $73,059 plus superannuation.

Length of service (s392(2)(b))

[174] Ms Molina had been employed for just under 10 years. This is a reasonably lengthy period of employment, however I consider it does not support reducing or increasing the amount of compensation ordered.

Viability (s392(2)(a))

[175] There is no direct evidence before me as to the effect of an order for compensation might have on the viability of the Respondent.

Mitigation efforts (s392(2)(d))

[176] Ms Molina secured alternative employment after 17.7 weeks. This was a reasonable effort to mitigate her loss in the circumstances. I do not consider it appropriate to reduce the amount of compensation otherwise calculated for this factor.

Other relevant matters (s392(2)(g))

[177] There are no other matters relevant to this consideration. Specifically, I do not consider it necessary to discount or increase the amount for ‘contingencies’. This step is a means of taking into account the possibility that the occurrence of contingencies to which Ms Molina was subject might have brought about some change in earning capacity or earnings.

Misconduct (s392(3))

[178] I have found that misconduct is not a relevant factor in this matter.

Shock, distress etc (s392(4))

[179] The amount of compensation does not include a component for shock, humiliation or distress.

Compensation cap (s392(5) and (6)

[180] Ms Molina’s estimated remuneration for 26 weeks is $60,675. She had been unemployed for 17.7 weeks at the time she secured other employment on $73,059 per annum, and so had lost $41,305.78 gross (being 17.7 x $2333.66). The shortfall between her old and new salary was $928.67 gross weekly, which for 8.3 weeks was $7,707.96. She seeks the maximum compensation available to her, being $49,013.74 gross.

[181] As stated earlier, I do not consider that a discount should be applied for contingencies.

[182] This amount is less than the amount of remuneration Ms Molina was entitled in her employment with the Respondent during the 26 weeks immediately before the dismissal.

Conclusion

[183] In my view, the application of the Sprigg formula does not yield an amount that is clearly excessive or inadequate.

[184] For the reasons outlined above, I am satisfied that a remedy of compensation in the amount of $49,013.74 less appropriate taxation in favour of Ms Molina is appropriate in the circumstances of this case. An order to that effect will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

G Barry of Resolution123 Pty Ltd for M Molina.
P McGirr of McGirr Lawyers for APT Corporation Pty Ltd.

Hearing details:

2020.
Sydney (By video):
July 29, 30;
October 15,16.

Final written submissions:

23 October 2020.

Printed by authority of the Commonwealth Government Printer

<PR728256>

 1   [2002] FCA 1137.

 2   Ibid at [11].

 3   See Transcript PN64, 15 October 2020.

 4   [2012] FWAFB 1359.

 5   Transcript PN33 to PN54, 15 October 2020.

6 (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.

7 Sayer v Melsteel [2011] FWAFB 7498.

8 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-378.

9 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.

10 Ibid.

11 Edwards v Giudice (1999) 94 FCR 561.

12 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24].

13 Miller v University of New South Wales (2003) 132 FCR 147

14 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].

15 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

16 Previsic v Australian Quarantine Inspection Services Print Q3730.

17 (2000) 98 IR 137.

18 Ibid at 151.

19 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.

20 RMIT v Asher (2010) 194 IR 1, 14-15.

21 (1998) 88 IR 21.

22 [2013] FWCFB 431.