Fair Work Act 2009
s.394—Unfair dismissal

Kristy Steel
v
CD Australia Pty Ltd T/A Diablo Co
(U2022/6917)

Application for an unfair dismissal remedy

[1] On 7 July 2022, Ms Kristy Steel made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) alleging that she had been dismissed from CD Australia Pty Ltd T/A Diablo Co (the Respondent) and that her dismissal was harsh, unjust and unreasonable.

[2] On 25 August 2022, the Respondent filed a Form F3 Employer Response to the application. No jurisdictional objections were raised, and the Respondent declared it employed 19 employees at the time of the dismissal. However, on 19 October 2022, when the Respondent filed its material in preparation for a hearing of the application, the Respondent alleged that it was a small business employer, employing less than 15 employees at the time of Ms Steel’s dismissal.

[3] Ms Steel commenced employment with the Respondent on 30 August 2021, and was dismissed on 24 June 2022. She had less than 10 months’ service as an employee. If the Respondent was a small business employer, Ms Steel would not meet the minimum employment period of 12 months. If the Respondent was not a small business employer, the minimum employment period is only six month, which has been satisfied.

[4] The matter was heard before me in person on 2 November 2022. Ms Steel was granted leave to be represented by Mr Derrington, of Counsel, instructed by Twomey Dispute Lawyers. The Respondent was represented by Ms Charlene Dellaway, General Manager and Owner of the Respondent, together with her husband, Mr Dimitris Limnatitis, Director.

Relevant legislation

[5] Section 394 of the Act provides:

“394 Application for unfair dismissal remedy

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.

Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.

Note 2: For application fees, see section 395.

Note 3: Part 6 1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.”

[6] Further, ss.385 and 387 provides as follows:

“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.”

“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.”

Small business employer jurisdictional objection

[7] In a witness statement of Mr Limnatitis dated 19 October 2022, he declared the Respondent to be an employer of 12 employees. Ms Dellaway stated the same in her witness statement of 19 October 2022.

[8] On 25 October 2022, I issued directions requiring the Respondent to file a witness statement and attach business records of payroll of the Respondent for each week from 1 May 2022 to 1 August 2022, to allow the Commission to establish how many employees were employed by the Respondent as at the date of the dismissal. The records would assist the Commission to understand if some employees were regular and systematic casual employees.

[9] On 27 October 2022, Ms Dellaway filed a second witness statement, declaring the Respondent employed 14 employees at the date of the dismissal. Ms Dellaway acknowledged that she, Mr Limnatitis, and her brother, Mr Ian Dellaway, had been paid wages during the relevant period of time, however, was seeking for the three of them not to be included as employees. That is, she did not count the three of them within the 14 employees of the Respondent.

[10] The timesheets produced in her statement demonstrate that the three of them were paid for public holidays, and hours of work were recorded and remunerated. Ms Dellaway declared in her statement that she had now received advice from her accountant that the three of them should not have been paid wages, and instead should have been paid dividends. From the first full pay run after 1 August 2022, they have been paid dividends and not wages.

[11] During the hearing I questioned Ms Dellaway as to why one particular employee, Ms Stone had been excluded from the Respondent’s calculations of regular and systematic casual employees. Ms Dellaway excluded Ms Stone from her calculations on the basis that Ms Stone could refuse a casual shift. I informed Ms Dellaway that on the payroll information before me, it appeared that Ms Stone had worked every Sunday throughout May, June and July 2022.

[12] It was accepted by the Respondent that during the relevant time, Ms Dellaway, Mr Limnatitis and Mr Dellaway were receiving wages, taxation was being remitted to the Australian Taxation Office, and superannuation paid into their superannuation accounts.

[13] I asked Ms Dellaway if there were directors’ meetings where decisions were made as to issuing dividends. Ms Dellaway said that there was. In cross-examination, Ms Dellaway acknowledged that she is not a director of the Respondent; simply an owner. In cross-examination, Ms Dellaway acknowledged that the time and wages records reflect her, Mr Limnatitis and Mr Dellaway working and being paid for 38 hours work per week.

[14] In cross-examination it was put to Ms Dellaway that Mr Limnatitis and Mr Dellaway are not shareholders. She answered that Mr Dellaway is. She was then shown the ASIC share register confirming that only she is a shareholder. Ms Dellaway gave evidence that Mr Dellaway does own an interest in the business, and this has not yet been reflected on the ASIC share register.

[15] In cross-examination, Ms Dellaway acknowledged that she and Mr Limnatitis are associated with the following enterprises:

•  Soul Bar

•  Old Soul

•  The Rooftop Beer and Garden

•  The Nautical

•  La Cantina

[16] Ms Dellaway confirmed that she is a 50% shareholder of Soul Bar Live Pty Ltd, the entity which runs the above establishments. She stated that there is another 50% shareholder, and Mr Limnatitis is a Director of the company. She stated that around 40 or so employees are employed across the establishments.

[17] Upon learning this, I informed Ms Dellaway that it appeared to me that Soul Bar Live Pty Ltd is an associated entity of the Respondent, and she may be the link between them. She questioned how, declaring that she is a shareholder of both entities, but not in control. She stated that Mr Limnatitis is a Director across both corporate entities but other than having established the enterprises he has “nothing to do with them”. 1

[18] Ms Dellaway stated that Mr Limnatitis founded Soul Bar approximately 10 years ago. Ms Dellaway had earlier been involved in another establishment called Piano Bar.

[19] When Mr Limnatitis gave evidence during the hearing, he was asked about his various business interests. He acknowledged he is a Director of Soul Bar Live Pty Ltd. He stated that he makes ‘big’ decisions in relation to the operation but does not deal with day-to-day matters. He agreed that he’s part of making big financial decisions and big operational decisions. 2 He stated that he commenced Soul Bar 11 years ago.

Consideration of small business employer jurisdictional objection

[20] A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at the time. 3 For the purpose of calculating a number of employees employed by the employer at a particular time:

(a) all employees employed by the employer at the time (including the dismissed employee who has made the unfair dismissal application) are to be counted subject to the caveat that a casual employee is not to be counted unless, at the time, he or she has been employed by the employer on a regular and systematic basis 4; and

(b) associated entities are taken to be one entity 5. The expression “associated entity” has the meaning given by section 50AAA of the Corporations Act 2001 (Cth) (the Corporations Act).

[21] Section 50AAA of the Corporations Act provides as follows:

“Associated entities

(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection(2), (3), (4), (5), (6) or (7) is satisfied.

(2) This subsection is satisfied if the associate and the principal are related bodies corporate.

(3) This subsection is satisfied if the principal controls the associate.

(4) This subsection is satisfied if:

(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

(5) This subsection is satisfied if:

(a) the associate has a qualifying investment (see subsection(8)) in the principal; and

(b) the associate has significant influence over the principal; and

(c) the interest is material to the associate.

(6) This subsection is satisfied if:

(a) the principal has a qualifying investment (see subsection(8)) in the associate; and

(b) the principal has significant influence over the associate; and

(c) the interest is material to the principal.

(7) This subsection is satisfied if:

(a) an entity (the third entity) controls both the principal and the associate; and

(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.

(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

(a) has an asset that is an investment in the second entity; or

(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.”

[22] Section 50AA of the Corporations Act defines “control” as follows:

“(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(4) If the first entity:

(a) has the capacity to influence decisions about the second entity's financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members the first entity is taken not to control the second entity.”

[23] Except in chapter 2E of the Corporations Act, a reference to an “entity” in the Corporations Act is a reference to “a natural person, a body corporate (other than an exempt public authority), a partnership or a trust” (s.64A of the Corporations Act).

[24] It is not clear if the Respondent and Soul Bar Live Pty Ltd are related bodies corporate to satisfy s.50AAA(2) of the Corporations Act.

[25] I am satisfied that Mr Limnatitis is a third entity (a natural person) who, pursuant to s.50AAA(7) controls both the Respondent and Soul Bar Live Pty Ltd and the operations, resources or affairs of the two entities are material to him. In exerting control over the enterprises operated by Soul Bar Live Pty Ltd, Mr Limnatitis gave evidence that he makes the big operative and financial decisions.

[26] Mr Limnatitis is also the sole director of the Respondent. I am satisfied that he meets the control test at s.50AA of the Corporations Act in respect of the decisions of the Respondent. That he makes them alongside Ms Dellaway is immaterial.

[27] I am satisfied that on 24 June 2022, the Respondent and Soul Bar Live Pty Ltd were associated entities within the meaning of s.50AAA of the Corporations Act. Accordingly, there was at least 50 employees employed across the two entities as at the date of the dismissal and therefore the Respondent was not a small business employer within the meaning of s.23 of the Act. Ms Steel had met the minimum employment period of six months at the time of her dismissal.

[28] If I am wrong about the above conclusion, I would conclude that the Respondent employed at least 15 employees on account of the inclusion of Ms Stone, Ms Dellaway, Mr Limnatitis, and Mr Dellaway. Ms Stone is clearly a regular and systematic casual employee, and Ms Dellaway, Mr Limnatitis, and Mr Dellaway were all remunerated as employees at the relevant time, regardless of their dual role as either shareholder or director.

[29] I am satisfied that Ms Steel met the minimum employment period of six months on account of the size of the Respondent and its associated entities. Accordingly, the Respondent’s jurisdictional objection that Ms Stell has not met the minimum employment period is dismissed. It is necessary to determine the application having regard to s.387 of the Act.

Background

[30] Ms Steel commenced employment with the Respondent on 30 August 2021 as a Sales Executive. The Respondent is a manufacturing company, primarily manufacturing alcohol.

[31] On 20 June 2022, Ms Steel was out of the office and telephoned Ms Amanda Church, Office Manager. The Respondent alleges that during this conversation, Ms Steel made comments that constituted ‘harassment and racial comments’ in relation to the heritage of a third employee, being Ms Marina Stal, Marketing Manager of the Respondent (at the time).

[32] There are competing version of events as to the exact words exchanged between Ms Steel and Ms Church. However, the parties agreed that it was in relation to Ms Steel mistakenly referring Ms Stal as Brazilian when in fact Ms Stal is of Argentinian and Italian heritage.

[33] On 23 June 2022, Mr David Greenwood, Sales Manager, asked Ms Steel to attend a meeting with himself and Ms Dellaway the following day. During the meeting on 24 June 2022, the allegation that Ms Steel made racial slurs against a colleague was raised. Ms Steel attempted to explain her side of the story, however Ms Dellaway refused to listen and told Ms Steel that she had to resign or she would be fired. The Form F3 asserts that Ms Steel elected at the meeting to resign her employment. This is disputed by Ms Steel.

[34] On 24 June 2022, Ms Steel received a text message from Mr Greenwood as follows:

“Hello Kristy

Can you please send through the following:

Your resignation letter

Apple ID and password

Appointments arranged for the next 3 weeks

Staff contact details for Smokefest

During the notice period, of one week, that you will be available for answering our requests.

Thank you.

David”

[35] In response to Mr Greenwood’s text message, Ms Steel sent the following text:

“Hi David

Unfortunately I am not resigning as I have done nothing wrong. As you know I have a broken rib and I am trying to rest as per the doctors request from the emergency department when I was rushed there by ambulance. I will send the information through as soon as I can next week.

Thank you

Kristy”

[36] Mr Greenwood responded by text: “Thank you I will inform Charlene and Dimi know re you change of mind.”

[37] On 24 June 2022, Ms Steel was provided with a Termination of Employment letter by email as follows:

“24th June 2022

Termination of Employment

Dear Kristy,

This letter is to inform you that your employment as a Sales Executive in the Sales Department of Diablo Co. will end as of June 24, 2022.

You are being terminated because on June 20, 2022, you had a phone conversation with an employee of Diablo Co. which constitutes harassment and racial comments based on an employee’s country of birth. The Racial Discrimination Act 1975 (RDA) makes it unlawful to discriminate against a person because of his or her race, colour, descent, national origin or ethnic origin, or immigration status.

Termination is effective immediately, with your one week notice period paid out. We do require you to be available to assist with any requests during your notice period. Your final pay along with any entitlements will be paid out on Tuesday 5^th of July, 2022 upon receiving all company IP and assets.

We ask that you return any property and stock in your possession belonging to Diablo Co. This will be facilitated by your manager, David Greenwood and will be collected at 8am on Monday 27^th of June, 2022 at your address.

We remind you of your obligations under your Employment Contract, that you must not at any time, either during your employment, or at any time after termination, disparage or otherwise make any statement, or permit or authorise any statement to be made, which is calculated or reasonably likely to damage the reputation or cause other damage to the Employer or any Associated Entity, or any of their respective employees or officers.

Yours Sincerely,

Charlene Dellaway

General Manager”

Evidence of Ms Steel

[38] Ms Steel considered that from the commencement of her employment in August 2021 until April 2022, her employment had been smooth and there weren’t any tensions or uncomfortable issues at work.

[39] In April 2022, the Respondent hired Mr Greenwood, a new sales manager. A sales meeting was scheduled for the sales team at the head office on the Sunshine Coast. Ms Steel stated that to attend the meeting scheduled to start at 9:00am, she left her home at 6:00am. Upon arriving, she had 10 minutes before the meeting was due to start to unload the ute she was driving which was full of kegs, beach chairs and rum. Mr Greenwood came out of the office and introduced himself to Ms Steel, to which she replied, “Hello, welcome to the team, I just need to get all this unloaded before the meeting.”

[40] During the sales meeting, the sales team were informed that everything had to go through Mr Greenwood from that day forward and that they needed to email Mr Greenwood every request and pricing enquiry. One of the sales representatives, Ms Kiera Fackler, made a joke that Mr Greenwood was now “our PA” as he was to check everything off. Ms Steel noted that she, Kiera and Fiona, (the Sunshine Coast sales representative), all laughed at Kiera’s joke. Ms Steel noted that Mr Greenwood appeared offended and the meeting became hostile very quickly.

[41] The day after the sales meeting, Ms Steel recalled Ms Dellaway contacted Ms Steel, Kiera and Fiona and said that she was disappointed with their behaviour and how they treated Mr Greenwood. Ms Dellaway also stated that Ms Steel had ignored Mr Greenwood when he came out to her ute to introduce himself. Ms Steel replied that she had not ignored Mr Greenwood and apologised for laughing at Kiera’s joke but said it was just a joke.

[42] As a result, and Mr Greenwood’s temperament towards Ms Steel thereafter, Ms Steel is of the belief that Mr Greenwood did not like her from the day they met.

[43] Ms Steel explained that one of the products offered by the Respondent to customers is ‘branded cans’ whereby the customer can have their own branding placed onto cans of alcohol. The staff member responsible for the process of obtaining branded cans is Ms Stal. Ms Steel said that the process to create branded cans is very time consuming as each can needs to be manually pushed down to seal the raw edge and it is a very fiddly task.

[44] In around May 2022, Ms Steel recalled there being an order placed for branded cans for an event taking place in Willowbank (the Willowbank Order). To fulfil that order, Ms Stal had to individually seal thousands of cans in the manner described above.

[45] Ms Steel stated that it was well-known by staff that Ms Stal did not enjoy fulfilling the Willowbank Order because she had complained about how stressed she had been about getting everything done. Ms Stal had made jokes following the event about how stressful the order was.

[46] On 20 June 2022, Ms Steel said she had some upcoming meetings with a new customers’ events team who were interested in the Respondent’s branded cans and wanted to see some examples of them. Ms Steel needed to get some samples to show the potential customer in the meeting. In order to get the samples, Ms Steel needed to place the order with the office. As such, Ms Steel called Ms Church to place the order.

[47] During this telephone call, Ms Steel recalled words to the following effect were exchanged between herself and Ms Church:

“Ms Steel: I have a meeting coming up with Peppers and they have asked to see the promotional cans, can I please have one red can and one Perfect Storm can sent down with Dimi please?

Ms Church: Oh my god Kristy, Marina is going to kill you, she has just dealt with all the Willowbank cans that took her forever.

Ms Steel: *laughs* Just tell her that if she is mad at me, she can swear at me in Brazilian so I don’t know what she’s saying.

Ms Church: *laughs* Marina isn’t even Brazilian.

Ms Steel: Oh sorry, I thought she was.”

[48] At the time of the telephone call, Ms Steel said she did not know what heritage or background Ms Stal was, but her accent sounded Brazilian to Ms Steel based on her limited travel experience and previous interactions with Brazilians she had met during her lifetime. Ms Steel said that she now understood that she was mistaken, and that Ms Stal is in fact from Argentina, which is another part of South America.

[49] When Ms Church commented on Ms Stal wanting to “kill” her for ordering the branded cans during the telephone call, Ms Steel knew it was a joke and that her life was not in danger as it had become a running joke that Ms Stal did not like the task of creating the branded cans. As such, Ms Steel decided to joke back by saying she would allow Ms Stal to swear at her (to relieve her frustrations) but in her own language (which Ms Steel believed to be Brazilian) so that she would not understand what Ms Stal was saying and feel offended by it as Ms Steel does not speak any other languages except English.

[50] Ms Steel stated that she does not recall ever making any comments to or about Ms Stal prior to the telephone call regarding her background, race or language. If she ever said anything prior to the telephone call about Ms Stal being Brazilian, Ms Steel explained it would have been because she held a genuine belief that Ms Steel was Brazilian based on her accent and it would not have been any form of a racial slur. Ms Steel denied ever making any comment to Ms Stal about her appearance that had anything to do with her race or background.

[51] On 22 June 2022, Ms Steel said that she attended a meeting with a potential client to provide information to the sales team so they could pass the information along to the new manager that was to be appointed soon. When Ms Steel arrived, she was told that the new manager had already started and would be attending the meeting as well. Ms Steel stated that the meeting went very well, and the client wanted to go ahead with some pop-up bars, merchandising and other products for the school holidays. Ms Steel called Mr Greenwood after the meeting to tell him about it and he was hostile towards her, and angry that she had not told him about the meeting.

[52] Ms Steel recalled Mr Greenwood asking what she had promised and why he wasn’t taken to the meeting. Ms Steel said that it was just meant to be a “fact finding” meeting and making cocktails for the sales team (which she had done many times before) and she did not know the new manager would be there and that she had not made any promises. Ms Steel told Mr Greenwood that they would come back to them with a proposal.

[53] When Ms Steel called Ms Church to arrange some things for the new client, she overheard Mr Greenwood in the background, saying words to the effect, “I can’t believe she has promised all of these things to this account, she needs to be dealt with”. Ms Steel asked Ms Church to tell Mr Greenwood to get his facts straight and reconfirmed that she had not promised anything to the client, and they were waiting on her to get back to them after speaking with management. Ms Church did not relay Ms Steel’s message to Mr Greenwood while she was on the phone to Ms Steel. Ms Steel understands that Ms Church moved to another area of the office to continue their telephone call.

[54] After the call with Ms Church, Ms Steel said she was upset because she had worked hard for three months to make the sale to that client and did not expect Mr Greenwood to be so negative when she had done such a good job getting the client onboard.

[55] On 23 June 2022, Ms Steel was not feeling well but attended work. Mr Greenwood called Ms Steel and asked her to attend a meeting with himself and Ms Dellaway the next day on 24 June 2022. Ms Steel asked Mr Greenwood what the meeting was in relation to and he replied, with words to the effect, “I don’t feel comfortable discussing this with you by phone”, and Ms Steel felt anxious and worried about what the meeting was about so agreed to attend despite not feeling well that day. Later that night, Ms Steel said she was very unwell and attended the doctor who then sent her to the hospital in an ambulance with a suspected broken rip and partial collapsed lung. The doctor’s suspicions turned out to be correct, so Ms Steel was placed on bed rest and given heavy painkillers. Ms Steel arrived home after midnight.

[56] Despite still being sick on the day of the meeting, Ms Steel said she attended the meeting anyway because of what Mr Greenwood had said to her the day before which made Ms Steel feel uneasy, and she thought she would get in trouble for not attending. As Ms Steel was on heavy prescription painkillers, Ms Steel’s husband drove her to the meeting.

[57] During the meeting, Ms Dellaway informed Ms Steel that she had made racial slurs against a colleague. Ms Steel asked for more information about the allegation, but Ms Dellaway only advised that Ms Stal was upset and could not be around Ms Steel anymore. Ms Steel asked if the allegations related to her conversation regarding Ms Stal and Ms Dellaway agreed that they were.

[58] Ms Dellaway informed Ms Steel that this has happened in the past and Ms Steel asked when it has occurred and what she allegedly had said or done as she had no recollection of it and believed it to be untrue. Ms Dellaway replied with words to the effect, “It is irrelevant”. Ms Steel attempted to explain her side of the story regarding her telephone conversation with Ms Church, but Ms Dellaway refused to listen and told her that she had to resign or she would be fired.

[59] The events and communication in [34] – [37] then occurred.

[60] Ms Steel confirmed her last day of work with the Respondent was 24 June 2022. She was paid one week’s wages in lieu of notice.

[61] Ms Steel noted that in her employment agreement with the Respondent, clause 26 provides a restraint clause which stipulates as follows:

“26.2 From the date your employment ends, you agree not to engage or prepare to engage in a business that competes with the business of the Employer or any Associated Entities for the duration of the Restraint Period within the Restraint Area.

…

(b) Restraint Period means:

(i) 12 months or

(ii) 6 months or

(iii) 3 months.

(c) Restraint Area means:

(i) Queensland or

(ii) North Brisbane OR South Brisbane OR Gold Coast OR Sunshine Coast OR Gympie OR North Lakes.

…

26.8 You acknowledge that each of the above restrictions are reasonable and necessary to protect the Employer’s legitimate interest.

26.9 You acknowledge that you will be liable in damages (including punitive or special damages) arising out of the breach of any of the terms of this provision.”

[62] Ms Steel understood that the Restraint Clause meant that she was not allowed to work for any competitor of the Respondent in Queensland for one year and that, if she did, the Respondent could sue her. As such, after the termination, Ms Steel looked for a new job in a business that did not compete with the Respondent.

[63] Ms Steel explained that nothing was coming up on the job search websites for other sales jobs that were suitable, and she was still struggling to recover from her illness and some anxiety she had as a result of the conduct of the Respondent, so finding a new job was not easy.

[64] On 22 August 2022, Ms Steel commenced work in a new job, in a new industry (which was the only job she interviewed for) in the role of Area Sales Manager, but she had to accept a salary of $10,000 per annum less than her salary with the Respondent. As such, Ms Steel was out of work between 24 June 2022 and 22 August 2022, being 8 weeks and 2 days but was without an income for 7 weeks and 2 days after taking into account the one-week notice pay that the Respondent gave her.

[65] Ms Steel does not expect to be able to obtain a salary increase in her new role for some time as she is new to the company, and she is aware that the COVID-19 pandemic has had an impact on the company.

The Respondent’s evidence

Evidence of Ms Dellaway

[66] Ms Dellaway is the General Manager and Owner of the Respondent. The Respondent does not have a dedicated human resource management specialist, although had engaged with Employsure for a 12 month period, ending May 2022. Ms Dellaway and her husband, Mr Limnatitis, deal with all human resource issues. Ms Dellaway explained she and her husband have only ever worked in small businesses and owned small businesses, so have limited experience with terminating employees.

[67] On 23 June 2022, Ms Dellaway became aware through Mr Greenwood that Ms Stal had raised a complaint regarding racial comments made by Ms Steel. Ms Dellaway questioned Ms Stal, with Ms Stal informing her that she had overheard a telephone conversation between Ms Steel and Ms Church, with Ms Steel incorrectly referring to her as Brazilian. She said that she sits approximately 1.5 metres from Ms Church.

[68] Ms Dellaway spoke with Ms Church who stated that when she corrected Ms Steel to inform her that Ms Stal is from Argentina and not Brazil, Ms Steel replied, “same, same”, to which Ms Church responded that they are not the same. Ms Dellaway’s evidence is that Ms Church has corrected Ms Steel on this same error numerous times. Ms Dellaway asked Ms Church and Ms Stal if they would put their statements in writing, which they immediately agreed to.

[69] Ms Church’s statement dated 23 June 2022 is as follows:

“Dear Charlene,

The below statement confirms a verbal telephone conversation between Kristy Steel and myself on Monday 20 June 2022. The context of the conversation was a phone call in the afternoon regarding a request for Diablo branded can cups on very short notice for Paradise Resort, a customer of Kristy’s on the Gold Coast.

A fact well known around the business is Marina is very much not a fan of these can cups due to the lengthy time spent on this project during its trial phases. It’s a humorous topic now. In response to the verbal request I jokingly replied, “more cans, Marina will not be happy with you!” to which she replied “It’s because she’s Brazilian.” Unknowingly to Kristy, Marina was at the time sitting next to me where she is able to overhear most conversations. I replied with “Kristy, Marina is not Brazilian, she is from Argentina”, to which she replied with a statement along the lines of “same, same” or “they’re the same”.

At the time this was brushed off lightly by Marina as in her words “its not the first time she’s called me Brazilian”. However, I am aware Marina does not appreciate numerous incorrect comments about her ethnicity which has been mentioned to me on multiple occasions.”

[70] Ms Sal’s statement dated 23 June 2022 is as follows:

“I am employed as a Marketing Manager for Diablo Co. and work in their offices located at [location].

On Monday 20^th of June around 3pm, while working at Diablo Co. Headquarters, one of my work colleagues was speaking on the phone with one of the company’s Sales Representatives, Mrs Kristy Steel.

Since my colleague’s working desk is positioned really close to mine, it was very easy and obvious for me to overhear their brief yet straight-to-the-point conversation.

I am an Argentinian/Italian Marketing professional and while talking to my colleague, Mrs Kristy Steel would refer to me over the phone as Brazilian. When my colleague pointed out what my actual background was, Mrs Steel poorly stated something along the lines “they are all the same”.

Once the phone call was over I asked my colleague what had happened and she confirmed what I had overhead and stated above.

Unfortunately, this is not the first time that Mrs Kristy Steel has either made a comment on my ethnicity, English being my second language or my physical appearance.

While I find these sorts of comments absolutely inappropriate and as a professional woman do not focus on such discriminatory and ignorant acts, I consider it necessary to address this kind of behaviour for them not to keep happening in a healthy and ethic workplace.”

[71] Ms Dellaway stated the Respondent had to take a course of action. After speaking with Mr Limnatitis, they concluded that they do not tolerate racism or any sort of harassment in the workplace. They considered that the formal statements needed addressing and they had an obligation to act for the employees’ safety and welfare. In evidence given during the hearing, Ms Dellaway said the following: 6

“So I guess as a small business, medium, whatever, when you're presented with something as serious as a racist comment, you've got to do something about it.  So spoke to Mandy and we spoke to Marina.  My husband and I have a zero tolerance for racism.  We knew it was - like, it's the most serious matter we've had to deal with in, you know, the whole time we've been employers, and I guess looking at behavioural issues in the past with Ms Steel, we made the decision to terminate.  We could not tolerate it or - you know, we had to look after the welfare of Marina, and then what also would that have meant if we decided it wasn't racist?  I mean, how do we make that decision?  What would happen if we decided it wasn't, it's okay, and then we're left with Marina's word against Kristy's.  So we made that - - -”

[72] In her witness statement, Ms Dellaway reflected on a team meeting which she had thought had occurred in June 2022, however in her oral evidence at hearing she corrected to April 2022. In the Sales Team meeting, everyone was introducing themselves as an ice breaker. Ms Stal introduced herself, stating she was from Argentina, to which Ms Steel replied in a very loud, rather abrupt tone, “We can tell”. Ms Dellaway found the comment to be unnecessary, a little rude and belittling.

[73] Ms Dellaway’s evidence is that for the duration of the Sales Team meeting, Ms Steel conducted herself in a rude and unprofessional manner. The meeting ran for six hours with Ms Dellaway and Mr Limnatitis present the entire time. Ms Steel continuously interrupted, was on her phone, and was whispering to her colleagues next to her whilst the Sales Manager was presenting. Ms Dellaway said that Ms Steel was acting abruptly and counterproductive. It seemed that she was showing no respect and was disrespectful on account of the Sales Manager having been appointed.

[74] The following day, Ms Dellaway said she contacted Ms Steel by phone and told her that her behaviour was inappropriate and had embarrassed Ms Dellaway. Ms Dellaway gave Ms Steel examples of the unsatisfactory conduct, in which Ms Steel replied, “I apologise if I offended anybody.” Ms Dellaway confirmed there were no documentation, just a phone call.

[75] Given Ms Steel’s evidence is that she firmly denied saying, “We can tell”, I asked questions of Ms Dellaway as to how it was said and what action she took. We had the following exchange: 7

Commissioner:  All right.  If you think that in response to Marina saying, ‘I’m from Argentina’ - can you tell me in the sort of tone you say Ms Steel said, ‘We can tell’?  Let me go?

Ms Dellaway: Yes.

Commissioner: ‘I'm from Argentina’

Ms Dellaway: ‘Yeah, we can tell.’  It's loud, extremely loud, and it's got an underlying - trying to think of the right words - it's got a belittling tone to it.  That is a lot of the way that Ms Steel speaks.

Commissioner: So why didn’t you do anything about it at the time?

Ms Dellaway: Well, I think I addressed it - - -

Commissioner: Isn’t that worse than - - -?

Ms Dellaway: Yes.

Commissioner: You’re right there and you - - -?

Ms Dellaway: Yes, I agree.

Commissioner: You think it’s offensive and you hold onto it and you don't raise it with her on 24 June?

Ms Dellaway: Absolutely.

Commissioner: You raise it here?

Ms Dellaway: I've now learnt, raise all matters.

Commissioner: You didn’t, though?

Ms Dellaway: I didn’t.  You’re right.  I didn't.

Commissioner: You think it was a little bit racist and there was something in it when she said, ‘We can tell’?

Ms Dellaway: Yes.

Commissioner: But nothing was done?

Ms Dellaway: Nothing was done.

Commissioner: And she denies it.  You say it did happen, she did say it in the way that you’ve just said it now?

Ms Dellaway: Absolutely.  It’s - yes, I mean, I should have - in hindsight, will absolutely be doing something in the future if it happens again, but it is - yes - - -

Commissioner: So what is offensive about ‘We can tell’ in the way that you’ve said it?

Ms Dellaway: It’s the tone, and it’s being so loud about it.  You know, it’s a one-on-one.  Everyone gets the time to just speak on their own, say what they need to - you know, tell their story, doesn’t - one need an interjection from someone so loud and making comment on where someone was from.  It’s rude as well.

Commissioner: Nothing was done?

Ms Dellaway: Nothing was done.

Commissioner: But you spoke to her the next day about - - -?

Ms Dellaway: Yes.

Commissioner: - - - you thought she was rude to David, but you didn’t suggest that she was rude to Marina?

Ms Dellaway: I didn’t.  You’re right.  The David - it went on.  I guess we – it’s challenging, and we have to get better at it, to address staff when they’ve done the wrong thing.  So we - you know, it’s confrontation.  Even though I’m the employer, it’s confronting.  I don’t particularly like confrontation and it’s uncomfortable.  So, yes, we addressed the David, because that was six-hour long rudeness, and we let it unfold, hoping it was getting better and maybe it was a, you know, get to know you, you know, unsettling initially, but it didn’t get any better, so I had to nip that in the bud.  But, no, I didn’t address the Marina - - -

[76] Ms Dellaway’s witness statement sought to include matters around conversation on 20 June 2022 between Mr Limnatitis and Ms Steel. Such evidence is best heard from Mr Limnatitis as Ms Dellaway was not present and her evidence is hearsay.

[77] Ms Dellaway stated that in early 2022 she had telephoned Ms Steel and requested she cut down on her swearing as it was not appropriate in a professional environment. Ms Dellaway confirmed there was no documentation, and that it occurred only on the phone.

[78] Based on the information Ms Dellaway had and based on what she had concluded to be ‘previous behaviour misconduct’, Ms Dellaway said she and Mr Limnatitis made a decision that they had a duty of care to their employees to protect their safety and welfare. She described this matter to be of a serious nature and in their opinion, understood racism to be against the law.

[79] Ms Dellaway stated that Mr Greenwood was not involved in the decision to terminate Ms Steel as this was left with herself and Mr Limnatitis as they are both very ‘hands on’ in their business. She did, however, request Mr Greenwood to contact Ms Steel to arrange the meeting in Brisbane for 24 June 2022.

[80] Ms Dellaway stated that neither she nor Mr Greenwood were aware that Ms Steel was unwell on 24 June 2022. Ms Steel did not request a support person for the meeting nor was she offered a support person.

[81] Ms Dellaway’s witness statement is as follows:

“[25] Ms Steel was offered to resign or termination. Ms Steel asked what the particular incident was. I told her that it was regarding the comment she made to Amanda Church about Marina being Brazilian.

[26] Ms Steel stated that she did not say it with ‘malice’.

[27] During this process my awareness on the correct process I should follow.

[28] I am now aware of my duty of care when consideration termination of an employee, before making the final decision. On this occasion, I did not. I had based the termination on what I felt was a serious matter and previous incidents of behaviour issues with the health and wellbeing of my staff at the forefront of my mind.

[29] Also termination of any employee is a horrible thing to do, no matter what. It makes you feel horrible and very uncomfortable. So, words don’t generally flow well.”

[82] Ms Dellaway acknowledged there is a restraint clause within the employment agreement. If Ms Steel had requested it be lifted following the termination, given her short tenure, she would have been relieved of her ongoing obligations.

Evidence of Mr Limnatitis

[83] Mr Limnatitis is the Director of the Respondent. He noted that the Respondent had previously used the services of Employsure, but considered it costly and ‘Fair Work’ provides advice not too dissimilar, he suggested. He stated that he and his wife have only ever run small businesses and have limited experience with terminating employees.

[84] Mr Limnatitis referred to the Sales Team meeting held earlier in 2022 where Ms Stal announced during the ice-breaker that she is from Argentina. His written evidence, identical to that of Ms Dellaway is that Ms Steel replied in a very loud, abrupt tone, “We can tell”. He considered the comment to be out of line.

[85] Mr Limnatitis stated that as a Greek Cypriot, he is familiar with racism. He stated that racism is not always in the words used, but how the words are delivered. He believes that Ms Steel was acting in a racist manner.

[86] In cross-examination, Mr Limnatitis acknowledged that he did not challenge Ms Steel as to her purported racist comment. He said that he was biting his teeth not to say something to her as he considers that employers have to walk on eggshells around employees. 8 When put to him that she did not make such a comment he declared, “...she did and she is racist. She has been racist in front of a lot of people...”. Mr Limnatitis was incredibly passionate and animated when he gave this evidence.

[87] Mr Limnatitis is aware Ms Dellaway contacted Ms Steel the following day by telephone to discuss her behaviour in the meeting in showing disrespect towards Mr Greenwood.

[88] Around 20 June 2022, Mr Limnatitis received a phone call from Ms Steel stating that one of their large customers in her territory, Mecca Bah, wanted to take their product off the tap in their venue and dishonour the partnership agreement they had in place. In cross-examination, Mr Limnatitis said for the first time in evidence that Ms Steel had referred to the Bar Manager at the venue as a “fucking fuckwit” and he was looking to “fuck us off”.

[89] A meeting was arranged between Mr Limnatitis, Ms Steel and the new Bar Manager. The Bar Manager was short in his explanation stating that he was just the middleman, and it was a directive from the owner.

[90] During the meeting, Ms Steel had to take a phone call and left the room. Mr Limnatitis said that he then asked the Bar Manager what was going on. The Bar Manager replied that the owner was sick of Ms Steel as she was rude and demanding, and when the venue placed an order for a quantity of stock, she would bring more. The Bar Manager stated that the owner did not want to deal with Ms Steel anymore.

[91] Mr Limnatitis said he called the owner of Mecca Bah and asked the reason for the change in the partnership agreement. The owner gave the same details around Ms Steel’s conduct. Mr Limnatitis then sent a text message to the owner telling him that the venue could deal directly with Mr Limnatitis.

[92] After leaving the venue, Mr Limnatitis asked Ms Steel for her side of the story. Ms Steel responded, “You know me, I would never yell at a customer”. Mr Limnatitis said to Ms Steel, “This is not on. Hearing feedback from a customer like that is not nice”. Ms Steel denied statements made by the venue Bar Manager and owner. Mr Limnatitis confirmed there was no documentation around this incident as it was a verbal conversation between himself and Ms Steel.

[93] Mr Limnatitis became aware of the 20 June 2022 telephone conversation between Ms Steel and Ms Church through a conversation with Ms Dellaway. He considered that racism could not be tolerated. In cross-examination he stated the following: 9

“…..I don't know how you feel, but racism, it's unacceptable and I had to take action to protect my employees and people being racist to me is not acceptable and I would not - it doesn't matter what happens today, I would not accept racism from anyone…..”

[94] Mr Greenwood contacted Ms Steel to request she attend a meeting. Mr Limnatitis was in Cairns and could not attend. He stated that Ms Steel was given the option to resign or be terminated.

[95] In cross-examination it was put to Mr Limnatitis that he and Ms Dellaway had concluded prior to the meeting occurring that if Ms Steel did not resign, her employment would be terminated. Mr Limnatitis agreed, saying that he considers stealing and racism to be as bad as each other and he wasn’t going to take it. 10 He said that when Ms Steel attended the meeting ‘sick’, a proper meeting couldn’t be held.

[96] In cross-examination, it was put to Mr Limnatitis that the Respondent could have issued a warning to Ms Steel if it had wanted to. He answered: 11

“We don't sit down and write emails and official, like I said.  We still, as a small business, trying to run a business, when someone behaves like that we talk to them and move on.  Obviously we're learning a bit mistake not doing - ticking our boxes, but it doesn't take away what has happened, and my - my personal opinion, she's already been warned and no, I didn't have to warn her again.”

[97] Following cross-examination, I questioned Mr Limnatitis with respect to the way Ms Steel is said to have said, “We can tell” in response to Ms Stal declaring she is from Argentina. The way Mr Limnatitis role-played Ms Steel, it had a laugh to it. The following exchange occurred: 12

Commissioner: With a bit of a laugh, was it?

Mr Limnatitis: Just smart arse comment.  I was sitting there, looking in the eyes and actually biting my teeth at the same time because, like I said, it's not very nice.

Commissioner: Was it soft, like that?

Mr Limnatitis: Me?

Commissioner: Let’s do it again.  "I'm Marina, I'm from Argentina"?

………..

Mr Limnatitis: “Yes, yes, of course, we can tell”, and she just looked at her and walked away and a little joking and laughing about it with the others.

[98] I questioned Mr Limnatitis as to whether there were any options available to the Respondent instead of dismissing Ms Steel:

Commissioner: So you accept that an alternative to dismissal might have been a sit down conversation, counselling, a written warning, they’re all available to you, aren’t they?

Mr Limnatitis: Look, I’m not lying.  Yes, now that we know, yes.  But when your head is stuck in the sand trying to work, and you’re trying to move this company that you don’t have staff of and you put in so many hours to do it, I’m not going to lie, again, this is - that for me was the easiest alternative, because I didn’t want to lose another staff member.

Commissioner: Was it your idea to put to her that she should resign or be dismissed?

Mr Limnatitis: It was a group idea.

Commissioner: Is that what you commonly do, tell people, you resign - - -?

Mr Limnatitis: We’ve never had - we - - -

Commissioner: Well, I wouldn’t know.  That's why I'm asking you, do you say, “You resign or you'll be dismissed”?

Mr Limnatitis: We never had to do that before.  Even with the other venues, seriously I don’t do that.  We don’t (indistinct) we have to let go.

Commissioner: Why did you do it here then?

Mr Limnatitis: Sorry?

Commissioner: Why did you do it here?

Mr Limnatitis: Because we thought that was the right thing to do.

Commissioner: What do you think now?

Mr Limnatitis: I should definitely give her a warning, like official warning, put it in writing, and I should have got her to - to give her a chance.  But the biggest thing is, I probably personally got affected from knowing someone is racist and now we’re sitting here trying to prove if it was racism or not racism, when deep inside you know it is.  We can sit down and you decide at the end of it, you know what, I said -you said, maybe it's not this.  But when you hear it direct and you know that person is racist, to my heart it’s just not acceptable in any workplace.

Evidence of Ms Stal

[99] Ms Stal was employed as the Marketing Manager for the Respondent in their offices located in Sunshine Coast. She finished working for the Respondent in October 2022.

[100] In addition to her statement at [70], Ms Stal gave oral evidence during the hearing by Teams video. She stated that on one occasion she declared that she was feeling cold. Ms Steel responded, “But you’re from Brazil”. Ms Stal did not correct her to remind her that she was from Argentina.

[101] Ms Stal recalled another time when she and Ms Steel were talking about a movie with a cast member they were discussing as a ‘tall, dark and handsome Italian man’, to which Ms Steel declared, “You, Marina, would know about that.” Ms Stal was offended by the remark, she says as she didn’t think it necessary to have her heritage consistently pointed out.

[102] In cross-examination, Ms Stal agreed that it had become an office joke that she did not like dealing with the can branding. She also confirmed that she didn’t overhear the exact words used by Ms Steel in her telephone conversation with Ms Church on 20 June 2022. 13 She recalls that Ms Steel said either “Yes, they’re all the same” or “same, same” with respect to distinguishing Brazil and Argentina.

[103] In answering a question from me, Ms Stal said that she considered people pointing out a person’s accent to be offensive. 14

[104] With respect to the Sales Team meeting in April 2022, Ms Stal gave evidence that when she did the ice breaker and said she was from Argentina, Ms Steel said something along the lines of, “It’s obvious you’re from Argentina.”

Evidence of Ms Church

[105] Ms Church is employed as the Office Manager for the Respondent. In addition to her statement at [69], Ms Church gave oral evidence during the hearing by Teams video.

[106] Ms Church recalls saying to Ms Steel on 20 June 2022 that Marina would not be happy with her on account of the cup branding she was requesting. Her evidence is that Ms Steel said, “It’s because she’s Brazilian”. Ms Church considered that Ms Steel was insinuating that Brazilians are angry people, and she considered it a weird comment to make. She informed Ms Steel that Ms Stal is not Brazilian, but is Argentinian, to which Ms Steel said, “They’re the same thing”. It is noted that in her contemporaneous statement she said that Ms Stell had said either “same, same” or “they’re the same”.

[107] Ms Church was asked if she said to Ms Steel that Ms Stal would kill her. She cannot recall her exact words but does not consider that to be something she would say.

[108] Ms Church agreed that she had never corrected Ms Steel on an earlier occasion if she had incorrectly referred to Ms Stal as being Brazilian.

[109] Ms Church couldn’t recall a conversation with Ms Steel on 22 June 2022, or overhearing Mr Greenwood saying that Ms Steel needed to be ‘dealt with’.

[110] Ms Church confirmed that Ms Dellaway spoke to her the day after the sales meeting earlier in the year and expressed her dissatisfaction with the way the team interacted with Mr Greenwood. She confirmed that Ms Dellaway did not indicate that she had addressed any issue with Ms Steel and the way she spoke with Ms Stal.

[111] In cross-examination, Ms Church conceded that Ms Steel saying that Ms Stal could swear at her in Brazilian makes more sense than Ms Steel replying, “It’s because she’s Brazilian”.  15

Evidence of Ms Steel in reply

[112] Ms Steel gave evidence in reply in a second witness statement, together with oral evidence during the hearing. Ms Steel denied saying to Ms Church during their telephone conversation of 20 June 2022, “same, same” or “they’re the same”, after being told that Ms Stal was not Brazilian but Argentinian. Ms Steel further denied Ms Dellaway’s evidence that when Ms Stal was introducing herself that she was Argentinian at the Sales Meeting, Ms Steel replied in a very loud and abrupt manner, “We can tell”.

[113] Ms Steel denied Ms Dellaway’s evidence that Ms Steel was conducting herself in a rude and unprofessional manner during the Sales Team meeting. Ms Steel stated that Mr Limnatitis was not present for the entirety of the meeting as he left after having an argument with Ms Dellaway. Ms Steel denied having issues with Mr Greenwood and was looking forward to the assistance of his expertise.

[114] Ms Steel said the only conduct that was raised with her in relation to the Sales Team meeting was a joke that her colleague, Ms Kiera Fackler made in relation to Mr Greenwood being their personal assistant, which Ms Steel regrettably laughed at during the meeting, so she apologised to Ms Dellaway for laughing at the joke.

[115] Ms Steel denied that she left the Mecca Bah meeting with Mr Limnatitis and has since dined at the restaurant without issue.

[116] Ms Steel further denied that Ms Dellaway has ever requested that Ms Steel cut down on swearing, in person or by phone.

[117] Had Ms Steel been informed of the nature of the meeting of 24 June 2022, she would have requested for a support person to be in attendance with her.

[118] Lastly, in response to Ms Dellaway’s statement of the restraint clause, Ms Steel advised that due to the way the termination of her employment was handled, she did not feel that Ms Dellaway would have been reasonable and have waived her restraint clause had she requested the same, nor could she afford legal costs to get advice about that.

Submissions of Ms Steel

[119] Addressing the criteria in s.387 of the Act, firstly in respect of valid reason for the dismissal, it was submitted the circumstances were that it was widely accepted that Ms Stal was not known to enjoy the job of branded cans and this had become a topic of humour in the workplace. Ms Steel required some branded cans to be produced.

[120] There is no dispute that a phone call took place between Ms Steel and Ms Church, in which Ms Steel asked for these cans to be produced and Ms Church expressed the view (it appears in the course of a joke) that Ms Stal would not be happy with Ms Steel. The misconduct that is alleged to have justified the dismissal is that, in this jocular context, Ms Steel replied, “it’s because she’s Brazilian” and when challenged as to the fact that Ms Stal is Argentinian, she responded with words to the effect, “they’re all the same” or “same, same”.

[121] Ms Steel submitted that the comment allegedly made by her makes no sense. Rather, she asserted that because she said that Ms Stal was Brazilian, she could swear at her in “Brazilian”. This was intended to be a joke, because Ms Steel only speaks English, and so she was trying to suggest that Ms Stal could relieve her frustrations in this way. Ms Steel argued that the joke was clearly unsophisticated as there is no such language as “Brazilian”. She denied it constituted a racial slur.

[122] However, even if the conversation is found to have taken place as alleged, Ms Steel submitted that the conduct, at its worst, was a single instance, of the making of an offensive remark that was said to Ms Church and not Ms Stal. Ms Steel argued that misconduct of that kind does not, ipso facto, justify termination. 16 Nor, as alleged by the Respondent, is it conduct that could constitute a contravention of the Racial Discrimination Act 1975 (Cth). Although it is not specific as to how the Act is said to have been breached, Ms Steel argued that it is tolerably clear that the only arguably relevant sections are ss.9 and 18C. However, section 9 requires conduct to impair the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life. A “slur” of the kind alleged cannot do this.

[123] Similarly, Ms Steel argued that s.18C, amongst other things, requires conduct to take place in public. The conduct in this case was alleged to have taken place on a phone call, which was not said to be on a loud-speaker. It was not done in public.

[124] In these circumstances, Ms Steel submitted that the conduct alleged should be seen as no more than an isolated incident, of marginal seriousness, that is said to have justified immediate termination without a warning arising from any past similar conduct. To the extent that the Respondent makes vague assertions of past similar conduct—which Ms Steel concedes as a matter of principle could be taken into account in assessing whether there was a valid reason—there is no real, particularised evidence of any similar conduct in this proceeding. Moreover, even if such conduct could be established, Ms Steel submitted that it would not, without appropriate warnings have been given, justify the termination in this case.

[125] Accordingly, Ms Steel submitted that the conduct was not a valid reason for termination. It was disproportionate to the gravity of the conduct alleged.

Notification of the reason and opportunity to respond

[126] Ms Steel noted that in order for an employee to be notified of the reason for dismissal, and given an opportunity to respond, the notification must be in clear and explicit terms, occur before a decision to terminate is made, and be given a clear opportunity to respond. None of that occurred in effecting Ms Steel’s dismissal.

[127] Ms Steel noted the Respondent conceded in its response that during the meeting on 24 June 2022, two days after the alleged conduct, Ms Steel was told that she could resign or be fired. Ms Steel submitted that she was given no real opportunity to explain herself or provide her side of the story, or particulars of when past conduct was said to be relied upon.

[128] Ms Steel suggested that the Respondent’s approach was motivated by the fact that there appears to have been an ulterior purpose for the termination, being the interpersonal conflict that developed between Ms Steel and Mr Greenwood.

The availability of a support person

[129] Ms Steel was not provided with a support person, nor any opportunity to arrange for one, as she was not afforded notice of the purpose of the meeting that took place on 24 June 2022.

Unsatisfactory performance

[130] Ms Steel submitted that the consideration of unsatisfactory performance is not relevant to the analysis of this case on the basis that her dismissal did not relate to unsatisfactory performance.

The size of the Respondent and the availability of specialist human resources personnel

[131] Ms Steel submitted that the Respondent is not a small business employer and has multiple levels of management.

Other relevant factors

[132] The only other relevant matter, which Ms Steel asserted should be taken into account by the Commission, is that she was subject to a restraint of trade upon her termination. Not only does this factor affect the remedy that might be awarded, it is also of significance in deciding whether the dismissal was unfair, as it affected her ability to obtain a new job in the industry.

The proper characterisation of the dismissal

[133] Weighing these factors together, Ms Steel submitted the Commission should accept that the dismissal was harsh, unjust or unreasonable, and so unfair. Ms Steel asserted the conduct relied upon did not occur. Even if it did, it was not a valid reason for dismissal.

[134] Even if Ms Steel’s conduct could be described as ‘harassment’, or misconduct of any kind, it was not serious enough to be classified as ‘serious misconduct’ so she ought not to have been summarily dismissed. Further, Ms Steel asserted that the dismissal was unreasonable and harsh in the circumstances where the Respondent refused to fairly examine the matter, including properly examining the actual words said and the full circumstances of the incident.

Submissions of the Respondent

[135] The Respondent submitted that Ms Dellaway and Mr Limnatitis acted on the information they had at the time, their limited HR expertise and the protection of Ms Stal.

[136] The Respondent noted that Ms Steel did not request a support person at the meeting of 24 June 2022.

[137] Ms Steel had not previously been warned about previous acts of racism, however, the Respondent asserted that it was verbally addressed to Ms Steel about misconduct as a representative of the Respondent. Examples, being as follows:

•  In the beginning of 2022, following a sales meeting, Ms Steel was spoken to in regard to swearing loudly and profusely;

•  Ms Steel was spoken to about her behaviour in the Sales Meeting towards Mr Greenwood; and

•  In June 2022, Ms Steel was spoken to regarding a complaint from a customer, Mecca Bah, stating that Ms Steel was rude and demanding. Mr Limnatitis had to take over the account as they did not want to work with Ms Steel any longer.

[138] The Respondent submitted that if it had earlier addressed concerns with Ms Steel, she would have responded badly and denied anything put to her. Ms Dellaway said during the hearing that she thought she had six months to make up her mind as to whether to continue Ms Steel’s employment, and then a further six months. She thought that once a person had 12 months’ employment, there was then a commitment.

[139] The Respondent submitted that Ms Steel would have been granted a release from her post-employment restraint if she had made a request.

Consideration

[140] A dismissal may be unfair, when examining if it is ‘harsh, unjust or unreasonable’ by

having regard to the following reasoning of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd: 17

“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.”

[141] I am duty-bound to consider each of the criterial set out in s.387 of the Act in determining this matter. 18 I will address each of the criteria set out in s.387 of the Act separately.

s.387(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)

[142] When considering whether there is a valid reason for termination, the decision of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373 provides guidance as to what the Commission must consider:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, common-sense way to ensure that the employer and employee are treated fairly.”

[143] 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. 19

[144] It is clear that in making a decision to terminate Ms Steel’s employment, Ms Dellaway had determined that Ms Steel had committed the following indiscretions:

•  Ms Steel had been rude and disrespectful towards Mr Greenway when he commenced, continuously interrupting a meeting, whispering to her colleague, on the phone and acting abruptly and counterproductively;

•  Ms Dellaway and Mr Limnatitis had determined that on account of a complaint from the manager at Mecca Bah, Ms Steel was rude and demanding and further, she had sworn in respect of the manager because the manager was threatening to cease using their products;

•  Ms Dellaway had months earlier telephoned Ms Steel to request she reduce her swearing;

•  Ms Steel had, during a meeting which Ms Dellaway and Mr Limnatitis attended, said to Ms Stal, “We can tell” when she announced that she is from Argentina. Ms Dellaway described the words used as very loud, not necessary, a little rude and belittling;

•  Ms Steel had, on 20 June 2022, said that Ms Stal is Brazilian and when she was corrected, said something like “same, same”, or “they’re all the same”;

•  There were ‘other occasions’ when Ms Steel had commented on Ms Stal’s heritage.

[145] While it is clear that not all of these purported issues were put to Ms Steel, which is a consideration at s.387(b) and (c), the consideration at s.387(a) is whether the Commission finds these events occurred.

[146] In respect of Ms Dellaway’s determination that Ms Steel had been rude and disrespectful towards Mr Greenway in a meeting, on the evidence before the Commission, I can only be satisfied that Ms Steel laughed at the reasonably harmless joke made by her colleague. I am satisfied that is why Ms Dellaway chastised Ms Steel the following day when she telephoned her.

[147] Having observed Ms Dellaway and Mr Limnatitis during the hearing, I am not satisfied that Ms Steel would have been permitted by them to repeatedly and consistently be rude to Mr Greenway for a large part of the meeting in which they were in attendance, which Ms Dellaway said ran for six hours. I am satisfied that if Ms Dellaway or Mr Limnatitis considered Ms Steel was being very rude to Mr Geenway, they would have pulled her up on it in the meeting or outside of the meeting, on that day.

[148] In respect of Mr Limnatitis learning from the manager at Mecca Bah that they no longer wished to deal with Ms Steel, I accept that was said to Mr Limnatitis. I find that it was done so in Ms Steel’s absence. I’m further satisfied that Ms Steel likely said, in respect of the bar manager that he was a “fucking fuckwit” and was looking to “fuck us off”, that is, cease ordering product from the Respondent. Despite Ms Steel not having an opportunity to deny the oral evidence given by Mr Limnatitis during the hearing on account of Ms Steel not returning to the witness box, Ms Steel did appear to me to be reasonably brash and abrupt. In the context of the meeting being an emergency meeting to save the account, I consider that Ms Steel did make such crass comments to Mr Limnatitis to demonstrate the likelihood of the account being lost.

[149] In respect of Ms Dellaway’s claim that at the beginning of 2022, she had requested Ms Steel cut down her swearing in sales meetings, Ms Dellaway’s evidence is that the Respondent utilised the services of Employsure up until May 2022. If Ms Dellaway had appropriately used the services of such an organisation, I have no doubt she would have been advised to record in writing her conversation with Ms Steel. That she did not record in writing her purported conversation with Ms Steel leads me to conclude that Ms Dellaway did not raise this concern with Ms Steel. Ms Steel denies that it was ever raised with her, and I conclude that Ms Dellaway’s observed authoritative demeanour, as demonstrated to me during the hearing would result in her raising this issue with her in a meeting, if she had wished to.

[150] In respect of the allegation that Ms Steel said something in response to Ms Stal declaring that she is from Argentina, I am satisfied that something was said by her during the meeting, which I understand to be in around April 2022.

[151] However, the conflicting accounts of Ms Stal, Ms Dellaway and Mr Limnatitis cannot satisfy me that any remark made by Ms Steel was purposefully or even casually racist. In oral evidence, Ms Dellaway said the statement was “We can tell”, and it was loud, extremely loud. The way Ms Dellaway put it, it was venomous or nasty.

[152] When Mr Limnatitis was asked to role-play how Ms Steel was said to have used those words, he mimicked Ms Steel and I remarked that it sounded soft and with a laugh. He said it was said in a smart-arse way and she had laughed and walked away, laughing with others. Mr Limnatitis never said with whom she was supposed to have laughed with over the statement.

[153] When Ms Stal gave evidence, she said that Ms Steel had said, “Yes, you can tell” or “That’s obvious” when Ms Stal declared she is from Argentina.

[154] The inconsistencies between the three witnesses and the fact that neither Ms Dellaway or Mr Limnatitis did anything about the purported comment leads me to conclude that any statement made by Ms Steel was not particularly offensive at all, nor was it taken to be at the time. This is so particularly as Mr Limnatitis was unbearably passionate and incredulous in the witness box when it was put to him that Ms Steel denied making such a comment. He said that on that day he was biting his teeth not to say something because he didn’t want to ‘get into trouble’ saying anything to staff, yet, if he did think it was so terribly offensive, having observed him, I am completely satisfied he would have called Ms Steel out on it. I do not accept that he permitted Ms Steel to laugh about it with other employees. In his oral evidence he stated that he doesn’t accept racism from anybody, and accordingly, if he had directly observed racism, I consider he would have done something about such a statement at the time.

[155] Further, the fact that Ms Dellaway did not address this purported issue with Ms Steel the following day when she rang to chastise her about her laughing about Mr Greenway satisfies me that there was nothing to address with Ms Steel. I conclude that if there was some remark made by Ms Steel on that day, it was along the lines of “we can tell”. Ms Steel denies making a remark, but she has also stated that she was in and out of the meeting. If she did say something like, “we can tell”, I am not satisfied it was malicious or racist. As I put it to the Respondent’s witnesses during the hearing, if a team member from Ireland with an Irish accent declared in a meeting that they are from Ireland, I am not satisfied saying, “we can tell” would be a racist comment, particularly if no malice or tone accompanied such a statement. In such an example, it would be conversational. In questioning from me, Ms Stal said making such a comment to an Irish person would, in her view, be racist. Simply mentioning that somebody has an accent is offensive, in Ms Stal’s view. I strongly disagree.

[156] In respect of the conversation between Ms Steel and Ms Church on 20 June 2022, I far prefer Ms Steel’s account of the conversation to that of Ms Church. Ms Steel’s response to Ms Church’s joke that Ms Stal would ‘kill her’ makes perfect sense; she said that Ms Stal could swear at her in Brazilian. Of course, there isn’t such a language, but in Ms Steel’s unsophisticated way, she was saying that Ms Stal could relieve frustration by swearing at her and Ms Steel wouldn’t know she was being sworn at. I accept that this was said by Ms Steel.

[157] I find that Ms Church then corrected Ms Steel, by informing her that Ms Stal is not from Brazil, but is from Argentina. I find that Ms Steel did say either “same, same”, or “they’re all the same”.

[158] Ms Steel effectively lumped the two South American countries together, causing offence to Ms Stal when she either overheard the conversation or it was relayed to her by Ms Church. It was unsophisticated of Ms Steel to do so. She had months earlier had a direct conversation with Ms Stal and referred to her as Brazilian, without Ms Stal correcting her. She had learned that Ms Stal is from Argentina during the sales meeting earlier in the year. Ms Steel should have had a better understanding of Ms Stal’s heritage, despite Ms Stal not earlier correcting her.

[159] On this first instance of Ms Steel saying either, “same, same” or “they’re all the same”, demonstrates an unsophisticated geographical intelligence and emotional intelligence by Ms Steel. She could easily have been coached or educated on this issue had it been formally raised with her. Once firmly informed that she is not to make the same error again, a standard would be set. Dismissing Ms Steel over such a statement was an extraordinary reaction from the Respondent. Suggesting that she had ‘broken the law’ was a gross exaggeration.

[160] I do not consider Ms Steel’s statement to be racist when one might easily make the same mistake with respect to attempting to distinguish a person’s accent from America or Canada. It’s an error often made. Similarly, people from around the world are sometimes unable to distinguish between an Australian and New Zealand accent. If offence was taken when any of these accents cause a person to make an error, there would be a lot of people walking around offended.

[161] In respect of Ms Dellaway’s contention that Ms Steel had commented on Ms Stal’s heritage at other times, it is clear that at the time of the dismissal, Ms Dellaway did not have much information before her other than a generalisation that Ms Stal reported that Ms Steel had commented on her appearance. She didn’t say how she had commented on her appearance.

[162] During the hearing, the highest that Ms Stal could take such an accusation is that Ms Steel had hushed her for saying she was feeling cold when she originated from a country (whilst incorrect) renowned to have a warm climate, and that in respect of her Italian heritage, she would understand what a tall, dark Italian man might look like. In my view Ms Stal’s complaints about Ms Steel’s remarks were unwarranted and so trivial that Ms Stal must be very easily offended about any remark whatsoever if it is made in respect of her country of origin.

[163] I am of the view that the Respondent, when faced with information relating to the 20 June 2022 conversation, took the opportunity to dismiss Ms Steel because of her deteriorating relationship with Mr Greenway.

[164] I find that Mr Greenway did complain about Ms Steel’s advancement of a potential order with a new customer, and felt she was stepping on his toes. I accept her evidence that she overheard him say that she needs to be ‘dealt with’. Mr Greenway did not give evidence in these proceedings and could have refuted making such a statement, but did not.

[165] I am not satisfied that there was a valid reason for the dismissal. At the highest, Ms Steel should have been counselled in respect of Ms Stal’s heritage and any offense that mislabelling her might cause to Ms Stal. An employee does not need to compulsorily have their employment terminated even if an employer finds that another employee is offended by a remark made. The circumstances surrounding each incident will guide an employer to making the appropriate and just decision for all parties. I find that the Respondent’s actions in dismissing Ms Steel was capricious and spiteful and very unfair to label her a racist person.

s.387(b) – Whether the person was notified of that reason

[166] Ms Steel was informed in writing that the reason for the dismissal was because she had a phone call with Ms Church on 20 June 2022 where she said things that constitute harassment and racial comments. In the meeting of 24 June 2022, Ms Dellaway said that ‘this’ had also happened in the past, but wouldn’t elaborate on what ‘this’ was, other than to say it is ‘irrelevant’.

[167] Ms Steel was not informed of all of the reasons at [144] as to why she was dismissed.

s.387(c) – Whether there was an opportunity to respond to any reason related to the capacity or conduct of the person

[168] Ms Steel was not given an opportunity to respond to reasons related to her purported conduct, resulting in her dismissal. In fact, she was told to resign or be terminated. She chose not to resign.

[169] Ms Steel was not afforded the opportunity to address the concerns at [144], held by Ms Dellaway. When Ms Steel asked, she was told it was irrelevant. Further, Mr Limnatitis’ evidence demonstrates that he had been informed that Ms Steel was sick during the meeting and there was no accommodation for her condition.

s.387(d) – Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal

[170] 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.

[171] There is no positive obligation on an employer to offer an employee the opportunity to have a support person. The Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542] states the following:

“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.”

[172] Ms Steel did not ask for a support person to be in attendance and accordingly there was no refusal by Ms Dellaway.

s.387(e) – Was there a warning of unsatisfactory work performance before dismissal

[173] I am not satisfied that any warnings were given to Ms Steel about her unsatisfactory work performance (which can include conduct), other than by Ms Dellaway when warning her not to have laughed at the joke, and by Mr Limnatitis in respect of the Mecca Bah account.

s.387(f) – Whether the respondent’s size impacted on the procedures followed and s.387(g) – whether the absence of a dedicated human resource management specialist impacted on the procedures followed

[174] The Respondent does not have a dedicated human resource management specialist, and I am satisfied this did impact on the procedures followed by the Respondent. No procedural fairness was afforded to Ms Steel at all. The Respondent’s management of the matter before it was appalling.

[175] Ms Dellaway and Mr Limnatitis have been in business for a reasonably long period of time, having owned various hospitality enterprises. They attempted to downplay their management experience during the hearing, and it was necessary to drag evidence from them, as unwilling as they were, as to the number of enterprises they are or have been involved in. In the year 2022, with all of the experience they have in hiring hospitality workers over two decades, they ought to know that requesting a person resign or be terminated is simply no longer acceptable.

s.387(h) – Other matters

[176] There does not appear to be any other matters necessary to take into consideration. I do not accept that the non-compete restriction should have any weight on the decision when Ms Steel made no attempt to request her restriction be lifted.

Conclusion

[177] I have determined that there was not a valid reason for the dismissal.

[178] I consider that the Respondent informed Ms Steel of only parts of the reason for the dismissal.

[179] I have determined that Ms Steel was not given an opportunity to respond to the reasons for the dismissal that were put to her.

[180] There was no unreasonable refusal by the Respondent to allow Ms Steel a support person.

[181] Ms Steel was not issued any warnings of unsatisfactory work performance before the dismissal other than in respect of minor issues.

[182] The size of the Respondent’s enterprise is larger than the Respondent alone, on account of the associated entities. While I accept that there was an absence of a dedicated human resource specialist which did impact on the procedures followed, Ms Dellaway and Mr Limnatitis had scores of years of experience between them and dealing with a sizeable workforce over that period of time.

[183] I determine that Ms Steel’s dismissal was harsh, unjust and unreasonable.

Remedy

[184] Section 390 of the Act reads as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

[185] Ms Steel is a person protected from unfair dismissal for the Act’s purposes and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether she can be reinstated.

[186] Ms Steel has found other suitable employment and has no desire to be reinstated. I am satisfied it is inappropriate to order reinstatement.

Compensation

[187] Section 392 of the Act provides:

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

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

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

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

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

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

Authorities

[188] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket. 20 That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;21 Jetstar Airways Pty Ltd v Neeteson-Lemkes22 and McCulloch v Calvary Health Care (McCulloch).23

[189] I have had regard to the above authorities.

The effect of the order on the viability of the Respondent

[190] The Respondent’s evidence is that it would be uncomfortable if an award of compensation was made, and it may need to secure a loan to make a payment in compliance with an order. No financial evidence was put to such effect. I am not satisfied that any order of compensation made by the Commission would affect the viability of the Respondent.

The length of Ms Steel’s service

[191] Mr Steel was employed for a period of approximately ten months. This is not a long period of time.

The remuneration that Ms Steel would have received, or would have been likely to receive, if she had not been dismissed

[192] I consider that Ms Steel would have remained employed for a period of six months. I find this way because Ms Steel had not indicated an intention to leave her employment, which she enjoyed. Further, there were no grounds to dismiss her, and on the evidence of Mr Limnatitis, it took the Respondent approximately six months to replace her. 24 I find six months is the likely period her employment would have come to an end, on whose initiative I am uncertain of. If she had served longer than 10 months of employment, I would have likely determined that her employment would have lasted for longer than the six months I am prepared to award her compensation.

[193] Ms Steel’s remuneration was $75,000 per annum with the Respondent.

[194] I consider that Ms Steel would have received remuneration of six months at the annual rate of $75,000 which is equal to $37,500.

The efforts of Ms Steel (if any) to mitigate the loss suffered because of the dismissal

[195] Ms Steel made every effort to mitigate her loss and secured suitable alternative employment approximately eight weeks later. I note that early on she was recovering from her injury. If she had sought a release from her post-employment restraint she may have secured employment in the same industry. I do not consider the period of eight weeks of unemployment to be unreasonable, despite the Respondent’s objections. Ms Steel did not sit on her hands in attempting to find suitable employment.

The amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[196] Ms Steel commenced in her new role on 22 August 2022. She earns $65,000 per annum. The period between 22 August 2022 and 24 December 2022, when I consider her employment would have ended is 18 weeks. At a rate of $65,000 per annum, that is a sum of $22,500. It is necessary to deduct this amount from the $37,500 determined by me at [194] to be paid to Ms Steel.

[197] I make a further deduction of $1,442.31 on account of the one week’s wages paid in lieu of notice to Ms Steel on termination.

The amount of any income reasonably likely to be so earned by Ms Steel during the period between the making of the order for compensation and the actual compensation

[198] This is not a relevant consideration given the compensation is awarded up until 24 December 2022 only.

Other relevant matters

[199] I do not consider there are other relevant matters affecting the amount of compensation to be awarded.

Misconduct reduces amount

[200] Section 392(3) of the Act requires that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.

[201] The section requires that consideration be given by the Commission, amongst other things, as to whether a person’s misconduct contributed to the decision to dismiss an employee even if the Commission has found that there was no valid reason for the person’s dismissal. However, if there was no valid reason for the dismissal that may be relevant to the Commission’s decision as to the appropriate amount by which the amount of compensation should be reduced. 25

[202] I am not satisfied that Ms Steel engaged in any misconduct. At most, her statement of “same, same” or “they’re all the same” should have involved some cultural training but was not misconduct. Accordingly, I cannot be satisfied a reduction should be made.

Shock, distress etc. disregarded

[203] I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Ms Steel by the manner of the dismissal.

Compensation Cap

[204] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.

[205] The high income threshold immediately prior to the dismissal was $158,500, and the amount for 26 weeks was $79,250. The amount of compensation the Commission will order does not exceed the compensation cap nor the amount that Ms Steel was entitled to during the 26 weeks immediately before the dismissal.

Payment by instalments

[206] I am mindful that the sum to be ordered may not be readily available to the Respondent within 14 days, which is my usual period of time to allow for payment when ordering compensation. Accordingly, I will order the compensation to be made in four payments as specified in the order, to be paid over a period of six weeks from the date of the first payment.

Order of compensation

[207] I have determined that the Respondent is to pay to Ms Steel six months’ compensation at the rate of $75,000 per annum, being an amount of $37,500. From this amount there will be a deduction of $22,500 and $1,442.31 in respect of remuneration earned by her and the notice paid to her.

[208] The amount to be paid to Ms Steel is $13,557.69 gross, less tax as required by law.

[209] In addition, the Respondent is to pay superannuation at the rate of 10% (as the Superannuation Guarantee Rate was at the time of the dismissal), being an amount of $1,355.77 into Ms Steel’s superannuation fund.

[210] The above amounts are to be paid as follows:

(a) $4,519.23 gross, less taxation by 18 January 2023;

(b) $4,519.23 gross, less taxation by 1 February 2023;

(c) $4,519.23 gross, less taxation by 15 February 2023;

(d) $1,355.77 superannuation into Ms Steel’s superannuation account by 1 March 2023.

[211] An Order of compensation [PR749407] will be issued concurrently with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR749406>

 1   Transcript PN 783.

 2   Transcript PN 989.

 3   Fair Work Act 2009, section 23(1).

 4   Ibid, ss.23(2) and (4).

 5   Ibid, s.23(2).

 6   Transcript PN 611.

 7   Transcript PN 616-630.

 8   Transcript PN 1013.

 9   Transcript PN 1106.

 10   Transcript PN 1115.

 11   Transcript PN 1124.

 12   Transcript PN 1147-1152.

 13   Transcript PN 1367.

 14   Transcript PN 1934-1935.

 15   Transcript PN 1494.

 16   See Peter Hand v Campbelltown Radio Pty Ltd T/A C91.3FM Radio [2019] FWC 764.

 17   (1995) 185 CLR 410, [465].

 18   Sayer v Melsteel [2011] FWAFB 7498 at [20].

 19   Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

 20   (1998) 88 IR 21.

 21   [2013] FWCFB 431.

 22   [2014] FWCFB 8683.

 23   [2015] FWCFB 2267.

 24   Transcript PN 1698.

 25   Crawford v BHP Coal Pty Ltd [2017] FWC 154, [345] – [346]; Read v Gordon Square Child Care Centre Inc. [2013] FWCFB 762, [83].