| [2021] FWC 5111 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Matthew Habbershaw
v
Jo-Ann Aay T/A Hermitage Produce
(U2021/5103)
COMMISSIONER PLATT |
ADELAIDE, 2 SEPTEMBER 2021 |
Application for an unfair dismissal remedy.
[1] On 11 June 2021, Mr Matthew Habbershaw (the Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Jo-Ann Aay T/A Hermitage Produce (Hermitage or the Respondent).
[2] On 23 June 2021, Hermitage filed a Form F3 Employer Response and raised a jurisdictional objection that the Respondent was a small business and had complied with the Small Business Fair Dismissal Code.
[3] On 2 July 2021, the matter was allocated to me and on 8 July 2021, a Conference was held, and directions were issued for the filing of material.
[4] Upon review of materials, I convened a case management conference on 11 August 2021 to discuss the material that had been filed by both parties, and to invite further materials which addressed the issues that I am required to consider when assessing the application.
[5] The Applicant sought to be represented before the Commission by a lawyer. The Respondent was unrepresented.
[6] Section 596(1) of the Act provides that a party may be represented in a matter before the Commission by a lawyer or paid agent only with the permission of the Commission.
[7] On the question of representation the Applicant submitted that:
• Representation would allow the matter to be dealt with more efficiently given the relative complexity and issues of both fact and law; and
• it would be unfair not to allow the Applicant to be represented because he is unable to represent himself effectively.
[8] On the question of representation the Respondent submitted that:
• It would be unfair for the Applicant to be represented in a situation in which the Respondent is in no position to represent themselves and does not have the capacity to be represented.
[9] Having considered the above matters, I determined that:
• Much of the evidence was not in dispute, and whilst there were a number of factual matters to determine, it was not complex; and
• taking into account fairness between the Applicant and the Respondent, it would be unfair to allow the Applicant to be represented given the incapacity of the Respondent to be equally represented.
[10] I have therefore decided to exercise my discretion to not grant permission for the Applicant to be represented acknowledging that the Applicant would continue to have the assistance of counsel in preparing his written material.
[11] Given both parties would be unrepresented, I determined that the hearing would be most effective and efficient if conducted as a determinative conference, and I advised the parties as such.
[12] A determinative conference was held, in person, on 17 August 2021. The Applicant represented himself, and the Respondent was represented by Mrs Jo-Ann Aay.
When can the Commission order a remedy for unfair dismissal?
[13] Section 390 of the Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and
(b) the Applicant has been unfairly dismissed.
[14] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.
[15] Section 382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
[16] There was no submission that the Applicant was not protected from unfair dismissal.
[17] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission 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.
[18] There was no dispute that the Applicant had been dismissed, and it was not contended that the dismissal was a case of genuine redundancy.
[19] The Applicant gave evidence on his own behalf and submitted the following documents:
• Outline of Submissions. 1
• Witness Statement of Matthew Habbershaw dated 22 July 2021. 2
• Further Witness Statement of Matthew Habbershaw (undated). 3
• Witness Statement in Reply of Matthew Habbershaw (undated). 4
[20] Mr Roger Aay and Mrs Jo-Ann Aay gave evidence on behalf of the Respondent, and submitted the following documents:
• Witness Statement of Jo-Ann Aay. 5
• Reply Statement from Jo-Ann Aay. 6
• Witness Statement of Roger Aay. 7
• Witness Statement of Vere Hutchings. 8
• Witness Statement of Samantha Brown. 9
• Witness Statement of Monica Spaven. 10
• Witness Statement of Jonathon Rillo. 11
• Letter of Engagement/Contract Offer. 12
• Incident and Hazard Report completed by Mr Hutchings on 27 April 2021. 13
• Copy of Hermitage’s Workplace Safety Rules and Policy. 14
• Redacted Payslips of Hermitage’s Employees as at 17 May 2021. 15
• Final Warning letter dated 12 October 2020. 16
• Letter of Termination dated 17 May 2021. 17
[21] The evidence was largely uncontested, and the key factual findings are as detailed below:
• The Respondent operates a small farm and grows herbs for sale in supermarkets including Coles and Woolworths.
• Coles and Woolworths require certain quality systems to be put in place by the Respondent. These systems appear to be intended to support the supply of produce which is of a consistent and acceptable quality, and are subject to six-monthly audits. Repeated audit failure places the supply agreements between the Respondent and Coles and Woolworths at risk. The systems require employees, including Mr Habbershaw, to maintain certain records (including collecting photographic evidence) on a daily basis.
• Mr Habbershaw is 22 years of age and commenced employment with the Respondent on 13 January 2018 as a casual picker. On 18 February 2019, he was engaged on a part-time basis, and on 25 May 2020 he was engaged on a full-time basis. All of the other employees appear to have been engaged as casuals (albeit most were engaged on regular and systematic basis). His employment ceased on 31 May 2021.
• Mr Habbershaw was responsible for a wide range of duties including picking and packing herbs.
• Mr Habbershaw was regularly late to work, and on many occasions without any advice to the Respondent (see table below).
Date |
Period of lateness (minutes) |
Advice of lateness provided? |
20/1/20 |
15 |
No |
6/2/20 |
15 |
Yes |
20/3/20 |
30 |
No |
14/7/20 |
Unknown |
Unknown |
24/7/20 |
10 |
No |
31/8/20 |
3 |
No |
6/10/20 |
60 |
No |
12/10/20 |
Applicant received written warning concerning his lateness | |
5/11/20 |
23 |
Yes |
18/11/20 |
46 |
No |
7/12/20 |
5 |
No |
7/1/21 |
57 |
No |
3/2/21 |
22 |
No |
4/2/21 |
5 |
No |
8/2/21 |
20 |
No |
28/2/21 |
6 |
Unknown |
5/3/21 |
2 |
No |
22/4/21 |
6 |
Yes |
• Whilst the instances where the Applicant was less than 10 minutes late are minor when viewed in isolation, when viewed collectively they demonstrate a cavalier attitude to timeliness. When giving evidence, Mr Habbershaw thought little of his lateness, on the basis that he worked back after the scheduled finishing time, and when pressed on the impact of his lateness on the business, he could not see his lateness as an issue. The majority of the reasons for the lateness were matters within his control. Towards the end of his testimony Mr Habbershaw reflected on his conduct and accepted it was not appropriate.
• Mr Habbershaw was given a written final warning on 12 October 2020 in respect of repeated lateness. The letter advised that his continued employment was at risk. I do not accept Mr Habbershaw’s evidence that Mrs Aay subsequently withdrew the warning. When his subsequent lateness is considered Mr Habbershaw appears to have ignored the wakeup call contained in the written warning. This may have been a consequence of him not perceiving his lateness as an issue.
• Mr Habbershaw had two days off work due to illness – these circumstances do not support a valid reason for his dismissal.
• Mr Habbershaw was accused of driving inappropriately in his own vehicle on a public road. His driving conduct on public roads in his own vehicle whilst travelling to and from work or on meal breaks (and therefore not performing work) does not have any connection to his employment and thus cannot constitute a valid reason for his dismissal. 18
• On 23 April 2021, Mr Habbershaw was the driver of the farm utility which became bogged at the Respondent’s premises. Mr Habbershaw and Mr Rillo managed to extract the utility, but in the process the driver’s side door (which was slightly ajar) collided with a star dropper and hyper-extended, which resulted in some damage to the lower hinge and some relatively minor external panel damage. The door could not closed properly, and Mr Habbershaw used a spanner to bend the door such that it would close (albeit requiring a greater closing force than usual). The Respondent accepts that the accident occurred in the normal course of work but contends that Mr Habbershaw, in trying to repair the damage, made the situation worse and rendered the vehicle unsafe to drive. The Respondent contended that this action constituted serious misconduct. From the images submitted with evidence, the vehicle is clearly a well-used farm vehicle covered in dust and mud. I was unable to accurately determine the state of the vehicle prior to the accident. It certainly was not in pristine condition. I do not accept that Mr Habbershaw’s actions constituted ‘serious misconduct’ as defined in regulation 1.07 of the Fair Work Regulations 2009 (Cth). At the determinative conference, Mr Aay conceded that it was an accident in the course of performing work. In respect of the risk to safety, the vehicle door would still shut with some force, and in the event that it did not latch, the dashboard lights would indicate the same. I do not accept that the vehicle posed a serious health and safety risk to other employees. In my view this conduct does not support a valid reason for the dismissal.
• On 27 April 21, an external audit of the Respondent’s operational practices was conducted. The audit revealed that certain records were not kept on the iPad used by the Respondent to maintain such records, and that photographs of product best before dates were not taken. Mr Habbershaw had represented to the auditor that such records were kept, and the photographs taken. During the determinative conference, Mr Habbershaw denied responsibility in respect of the iPad record failures and the evidence before me was too vague to support this contribution to the audit failure. Mr Habbershaw did, however, concede that he had not taken the photographs as required and that he had lied about that to the auditor. This represents a significant breach of his employment obligations and reveals that Mr Habbershaw was untruthful in his responses to the auditor. This appears to have significantly damaged the trust and confidence that Mr and Mrs Aay had in him (which they appear to describe as ‘communication issues’). After Mrs Aay was advised of the failed audit (27 April 2021), she determined to dismiss Mr Habbershaw.
• Unfortunately, Mr Habbershaw chose not to report the vehicle accident on 23 April 2021 (the day it occurred). On 27 April 2021 (after a long weekend), Mr Hutchings (who did not supervise Mr Habbershaw), asked Mr Habbershaw what he knew about the damage. In the meantime, Mr Aay had erroneously accused his son of damaging the vehicle. Mr Hutchings suggested that Mr Habbershaw should advise Mr Aay of what had happened. Mr Hutchings submitted an accident report. Mr Aay confronted the employees as a group asking for the person responsible to come forward. Unfortunately, Mr Habbershaw still did not report the matter to Mr Aay and it was not until Mr Aay confronted him two days later that he advised him how the damage had occurred. Mr Habbershaw’s failure to advise the Respondent of the accident is a significant breach of his obligation and damaged the trust and confidence of the employment relationship. Mr Habbershaw contended that he was fearful of Mr Aay due to his reaction to the result of the audit on 27 April 2021. This does not explain the delay in reporting the accident between 23 April 2021 until that time. Mr Habbershaw had plenty of time to make a call, send a text message or send a message in the ‘Deputy’ communication system. Further, having been told by Mr Hutchings to report the matter on 27 April 2021, Mr Habbershaw compounded his inaction by failing to advise Mr Aay until he was confronted about the issue two days later. This demonstrates a serious lack of honesty by Mr Habbershaw and also significantly damaged the trust and confidence that Mr and Mrs Aay had in him
• There were accusations (mainly by co-workers) that Mr Habbershaw worked slowly and that the quality of his work was poor. This commentary did not appear to be addressed in the warning letter of 12 October 2020, and I am not satisfied that issues concerning Mr Habbershaw’s work rate and quality were raised with him in a manner which would have indicated his employment was at risk.
• Mr and Mrs Aay spoke with Mr Habbershaw on 14 May 2021 (after he returned from holidays on 10 May 2021) and raised the topic of his failure to communicate, his failure to advise about the damage to the vehicle and a general discussion about his work performance. The evidence of Mrs Aay was that before this discussion had occurred, the decision to dismiss had already been made.
• On 17 May 2021, Mr Habbershaw was handed a termination letter and given two weeks’ notice of his termination.
• The Respondent is relatively small business and not well versed in disciplinary issues and has no internal human resources support.
[22] Under section 396 of the Act, the Commission is obliged to decide the following matters before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
Was the application made within the period required?
[23] It is not disputed, and I find that the application was made within the period required in subsection 394(2).
Was the Applicant protected from unfair dismissal at the time of dismissal?
[24] I have set out above when a person is protected from unfair dismissal.
Minimum employment period
[25] It was not in dispute and I find that the Applicant commenced his employment with the Respondent on 13 January 2018 and was dismissed on 31 May 2021.
[26] I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.
[27] It was not in dispute and I find that, at the time of dismissal, the sum of the Applicant’s annual rate of earnings was $38,688.00 (or $744.00 per week), which is less than the high income threshold.
[28] I am satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal.
Was the dismissal consistent with the Small Business Fair Dismissal Code?
[29] The Respondent contended that Hermitage was a small business and had complied with the Small Business Fair Dismissal Code (SBFDC).
[30] Section 388(2) of the Act states:
“A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) Immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) The employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”
[31] A “small business employer” for the purposes of the Act is defined at s.23 as so:
“Meaning of small business employer
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, the employee is a regular casual employee of the employer.”
[32] Before considering whether the Respondent complied with the SBFDC, it is necessary to first establish whether or not the Respondent was a small business employer immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first). The Applicant was given notice of the dismissal on 17 May 2021, and it is therefore necessary to determine whether Hermitage was a small business employer as at 17 May 2021.
[33] I received payslips from the Respondent for all people employed by Hermitage as at 17 May 2021, which showed the following 16 employees:
• Christian Anderson
• Samantha Brown
• Geoffrey Brown
• Rosemary Brown
• Da Thanh Nguyen
• Matthew Habbershaw
• Alexandra Habbershaw
• Vere Hutchings
• Jordan Lands
• Tracey Leecroft
• Gavin Limbert
• Jonathon Rillo
• Adam Rillo
• Robert Romanowski
• Monica Spaven
• Rhianna Eve Verrall
[34] Mrs Jo-Ann Aay asserted that Ms Brown, Mr Jonathon Rillo, Mr Adam Rillo, Ms Spaven and Ms Verrall were university students and as such could not be defined as regular casual employees for the purposes of s.23(1) of the Act. I heard evidence from Ms Brown, Mr Rillo and Ms Spaven, that they would have a discussion with the Respondent about their university commitments at the start of each Semester and agree the hours that would be worked each week. Extra hours would sometimes be worked during university breaks. I am not persuaded that these three employees were not engaged on a regular and systematic basis at the time the Applicant was given notice of his dismissal. As such, they count towards the total number of employees.
[35] Mrs Jo-Ann Aay also asserted that Mr Limbert, Mrs Habbershaw and Mr Romanowski were not regular casual employees and should therefore not be included for the purpose of s.23(1) of the Act. As a result of Mrs Aay’s assertions, I requested all payslips for those employees for any periods worked in 2021. After reviewing these materials, I note that Mr Limbert worked 6-8 hours most weeks from the start of 2021 to the time of the Applicant’s dismissal, Mrs Habbershaw worked 16-25 hours each week for the month leading up to the Applicant’s dismissal and Mr Romanowski worked 22.25 hours in the two weeks leading up to the Applicant’s dismissal. I am not persuaded these three employees were not engaged on a regular and systematic basis at the time the Applicant was given notice of his dismissal. As such, they count towards the total number of employees.
[36] On the information before me I find that the Respondent employed 16 people at the relevant time, and therefore were not a small business employer for the purposes of the Act.
[37] Given this finding, it is not necessary to consider whether the Respondent complied with the SBFDC.
Was the dismissal a case of genuine redundancy?
[38] It was not in dispute and I find that the Applicant’s dismissal was not due to the Respondent no longer requiring the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise.
[39] I am therefore satisfied that the dismissal was not a case of genuine redundancy.
[40] Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application.
[41] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
[42] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me. 19
[43] I set out my consideration of each below.
[44] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 20 and should not be “capricious, fanciful, spiteful or prejudiced.”21 However, 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.22
[45] Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination. 23 “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. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.”24
[46] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. A substantial and wilful breach of a policy will often, if not usually, constitute a valid reason for dismissal.” 25
[47] I find the following valid reasons in respect of Mr Habbershaw’s conduct:
• His continued lateness and his failure on a number of occasions to advise the Respondent of his being late.
• His failure to report the accident which occurred on 23 April 2021, despite being advised to do so by Mr Hutchings on 27 April 2021, and Mr Aay’s request for the culprit to own up on 27 April 2021.
• His failure to photographically record the best before dates in the manner required.
• The provision of false information to the auditor about his failure to photograph best before dates on products which potentially put the Respondent’s supply agreement with Coles and Woolworths at risk.
[48] Having regard to the matters I have referred to above, I find that there was a valid reason for the dismissal related to the Applicant’s conduct.
Was the Applicant notified of the valid reason?
[49] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment, 26 and in explicit27 and plain and clear terms.28
[50] Mr Habbershaw was not provided with information as to the reasons for his dismissal prior to the decision to dismiss him on 27 April 2021.
[51] While the Act recognises that “small business are genuinely different in nature both organisationally and operationally”, 29 it does not follow that such an employer’s procedures in effecting a dismissal can be entirely devoid of fairness.
[52] Having regard to the matters referred to above, I find that the Applicant was not notified of the reason for his dismissal prior to the decision to dismiss being made, and in explicit and plain and clear terms.
Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?
[53] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment. 30
[54] The opportunity to respond does not require formality and this factor is to be applied in a common sense way to ensure the employee is treated fairly. 31 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, this is enough to satisfy the requirements.32
[55] The decision to dismiss was made on 27 April 2021. In addition, the termination letter was handed to Mr Habbershaw on 17 May 2021 without any opportunity for him to respond.
[56] In all the circumstances, I find that the Applicant was not given an opportunity to respond to the reason for his dismissal prior to the decision to dismiss being made.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal?
[57] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
[58] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.” 33
[59] The Applicant did not seek to have a support person present however the manner in which the termination was affected did not allow such an opportunity.
Was the Applicant warned about unsatisfactory performance before the dismissal?
[60] The Applicant was given a final warning concerning his lateness on 12 October 2020.
To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal?
[61] In all the circumstances, I find that the size of the Respondent’s enterprise was likely to impact on the procedures followed in effecting the dismissal in that it has little understanding of the procedural requirements in matters of performance management.
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?
[62] In all the circumstances, I find that the absence of dedicated human resource management specialists in the Respondent’s enterprise had an impact on the procedures followed in effecting the dismissal because it had little understanding of the procedural requirements imposed upon it by the Act.
What other matters are relevant?
[63] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
[64] There are no other significant matters put to me.
[65] I have made findings in relation to each matter specified in section 387 as relevant.
[66] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 34
[67] Having considered each of the matters specified in section 387 of the Act, I am satisfied that the dismissal of the Applicant was unjust due solely to the lack of procedural fairness afforded.
Conclusion
[68] I am therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385 of the Act.
Remedy
[69] Being satisfied that the Applicant:
• made an application for an order granting a remedy under section 394;
• was a person protected from unfair dismissal; and
• was unfairly dismissed within the meaning of section 385 of the Act,
I may, subject to the Act, order the Applicant’s reinstatement, or the payment of compensation to the Applicant.
[70] Under section 390(3) of the Act, I must not order the payment of compensation to the Applicant unless:
(a) I am satisfied that reinstatement of the Applicant is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.
[71] The Applicant did not seek an order for reinstatement and has since confirmed that he does not wish to be reinstated. In such circumstances, “the Applicant’s disposition is a sure guide to the Commission as to whether or not it would be appropriate to reinstate or re-employ the Applicant. To act contrary to the Applicant’s desired position in this respect would be to give effect to an order that may not yield a productive or cooperative workplace.” 35
[72] In addition, the Applicant has since found alternative employment. As stated by a Full Bench, “[i]n assessing whether reinstatement is an appropriate remedy, it is obviously relevant as to whether the dismissed employee has obtained alternative employment. Where that new employment is satisfactory to the employee, it will be no remedy at all to reinstate the employee to the pre-dismissal employment to which the employee, for well-founded reasons, has no desire to return.” 36
[73] Having regard to the matters referred to above, I consider that reinstatement is not appropriate.
[74] I now turn to compensation.
Compensation – what must be taken into account in determining an amount?
[75] 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 including:
(a) the effect of the order on the viability of the Respondent’s enterprise;
(b) the length of the Applicant’s service;
(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;
(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;
(e) the amount of any remuneration earned by the Applicant 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 the Applicant 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.
[76] I consider all the circumstances of the case below.
Effect of the order on the viability of the Respondent’s enterprise
[77] The Respondent gave evidence on the impact of such and order. Based on the order I propose to make I am satisfied that an order for compensation would not have an effect on the viability of the employer’s enterprise.
Length of the Applicant’s service
[78] The Applicant’s length of service was 3 years and 4 months including the period of his casual employment
[79] I consider that the Applicant’s length of service does not support reducing or increasing the amount of compensation ordered.
Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed
[80] As stated by a majority of the Full Court of the Federal Court, “[i]n 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.” 37
[81] The Applicant seeks 10 weeks compensation, which implies that his employment would have continued for this period.
[82] In my view, the only failing of the Respondent in this matter is procedural. In my view had the Respondent advised the Applicant of the allegations and the fact it was considering dismissing him, held a meeting to allow the Applicant to respond (and facilitated a support person if requested), and then considered the Applicant’s responses, the dismissal process would have been sound.
[83] In my view a reasonable period for this to occur would be a maximum of one week, and that is the period I believe that the employment would have continued but for the dismissal.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
[84] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal. 38 What is reasonable depends on the circumstances of the case.39
[85] The Applicant secured alternative employment 10 weeks after the dismissal.
[86] I am satisfied that the Applicant took reasonable steps to mitigate his loss.
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
[87] The Applicant’s evidence is that the Applicant has earnt more income from his new employment than that with the Respondent.
[88] The Applicant did not receive any income in the period I have determined that he would have continued to be employed had he not been dismissed.
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
[89] As a result of the matters above this is not a consideration in this matter.
Other relevant matters
[90] There are no other relevant matters.
Compensation – how is the amount to be calculated?
[91] As noted by the 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). 40 This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages41.”42
[92] The approach in Sprigg is as follows:
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.
Step 1
[93] I have estimated the remuneration the Applicant would have received, or would have been likely to have received, if the Respondent had not terminated the employment to be $744.00 on the basis of my finding that the Applicant would likely have remained in employment for a further period of one week. This estimate of how long the Applicant would have remained in employment is the “anticipated period of employment”. 43
Step 2
[94] I have found that the amount of remuneration earned by the Applicant from the date of dismissal was $nil, and that the amount of income reasonably likely to be earned by the Applicant between the making of the order for compensation and the payment of compensation is $nil.
Step 3
[95] The next step is the impact of contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment. 44 I do not believe it is necessary in this scenario to allow for contingencies.
Step 4
[96] I have considered the impact of taxation but have elected to settle a gross amount of $744.00 and leave taxation for determination.
[97] Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.” 45
[98] 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.
Compensation – is the amount to be reduced on account of misconduct?
[99] If I am satisfied that misconduct of the Applicant contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
[100] I am satisfied that the Applicant’s misconduct (his persistent lateness, his failure to comply with record keeping requirements, his dishonesty in advising the auditor that the record keeping requirements had been met and his repeated failure to report the vehicle accident) significantly contributed to the employer’s decision to dismiss.
[101] In all the circumstances, I am satisfied that the appropriate amount by which to reduce the amount of the order for compensation on account of misconduct is 33%.
[102] Applying this reduction to the amount determined at step 4 above, the gross amount of compensation to be ordered, subject to the compensation cap discussed below, is $491.00.
Compensation – how does the compensation cap apply?
[103] The amount of compensation ordered by the Commission does not exceed the compensation cap.
[104] In light of the above, I will make an order that the Respondent pay $491.00 gross less taxation as required by law to the Applicant in lieu of reinstatement within 14 days of the date of this decision.
COMMISSIONER
Appearances:
Matthew Habbershaw, the Applicant.
Jo-Ann Aay of the Respondent
Hearing details:
2021.
Adelaide:
August 18.
Printed by authority of the Commonwealth Government Printer
<PR732944>
1 Exhibit A1
2 Exhibit A2
3 Exhibit A4
4 Exhibit A5
5 Exhibit R1
6 Exhibit R12
7 Exhibit R2
8 Exhibit R3
9 Exhibit R13
10 Exhibit R14
11 Exhibit R15
12 Exhibit R7
13 Exhibit R9
14 Exhibit R8
15 Exhibit R10
16 Exhibit R6
17 Exhibit R5
18 Rose v Telstra Corporation Ltd Print Q9292 (AIRC, Ross VP, 4 December 1998).
19 Sayer v Melsteel Pty Ltd [2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
20 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
21 Ibid.
22 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
23 Edwards v Justice Giudice [1999] FCA 1836, [7].
24 King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].
Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
25 B, C and D v Australian Postal Corporation t/a Australia Post [2013] FWCFB 6191, [36].
26 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
27 Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
28 Ibid.
29 Williams v Top Image Hair Design [2012] FWA 9517, [40].
30 Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
31 RMIT v Asher (2010) 194 IR 1, 14-15.
32 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
33 Explanatory Memorandum, Fair Work Bill 2008 (Cth), [1542].
34 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].
35 Taylor v C-Tech Laser Pty Ltd [2013] FWC 8732, [58].
36 Seitz v Ironbay Pty Ltd t/a City Beach IGA [2018] FWCFB 1341, [24].
37 He v Lewin [2004] FCAFC 161, [58].
38 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].
39 Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.
40 (1998) 88 IR 21.
42 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [16].
43 Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].
44 Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].
45 Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [17].