1
[2013] FWC 3027
DECISION
Fair Work Act 2009
s.394—Unfair dismissal
Janice Cook
v
Asia Pacific Cleaning Services Pty Ltd T/A Blue Hygiene & Cleaning
(U2012/9887)
SENIOR DEPUTY PRESIDENT
O’CALLAGHAN ADELAIDE, 15 MAY 2013
Application for unfair dismissal remedy - s.387 - valid reason - termination of employment
process - harsh, unjust and unreasonable - remedy.
[1] On 18 March 2013 I issued a decision1 (the first decision) which dealt with a number
of initial jurisdictional issues associated with the unfair dismissal application made by Ms
Cook. That consideration was protracted following the failure of the respondent to participate
in the hearing and the subsequent relisting of the matter following the provision of medical
advice.
[2] In that first decision I concluded that:
the application was validly made against Asia Pacific Cleaning Services Pty Ltd T/A
Blue Hygiene & Cleaning (Asia Pacific)
Ms Cook was an employee and not a subcontractor
Ms Cook was a person protected from unfair dismissal and
I was not satisfied that the termination of Ms Cook’s employment was consistent with
the Small Business Fair Dismissal Code.
[3] I note that there was no argument that the application was lodged within time, nor that
the termination was not a case of genuine redundancy.
[4] The first decision concluded that the matter would be relisted for consideration of the
merits consistent with s.397 of the Fair Work Act 2009 (the FW Act). Subsequent to that
decision, my office received a number of advices from the General Manager, Mr James, of
Asia Pacific, to the effect that my first decision was wrong. My associate advised the parties
of their appeal rights. An opportunity for conciliation assisted by another member of the
Commission was offered, but refused.
[5] The matter was the subject of a further hearing on 1 May 2013. Directions were
issued. The parties were reminded of this hearing, which involved a video-link to Sydney to
accommodate Mr James, by an SMS message on 30 April 2013. Mr James did not attend the
AUSTRALIA FAIR WORK COMMISSION
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hearing. Whilst the matter proceeded on that day, directions were sent later that day
reminding Mr James of my earlier Directions which had warned that a failure to comply with
my directions or attend the hearing may disadvantage the party concerned.
[6] These directions of 1 May 2013 stated:
“[5] Unless Mr James provides evidence of why he could not attend this hearing or
could not advise the Commission of his inability to attend this hearing, I will reach a
conclusion relative to this application on the material before me. Any evidence relative
to Mr James’ non-attendance must be received by my office by close of business 8
May 2013. ....”
[7] On 3 May 2013 Mr James provided the following advice:
“I apologies for my absence as I was unable to attend due to my ongoing illness.
I would respectfully request the hearing to be rescheduled for a later date.” (sic)
[8] On that same day I issued Further Directions in the following terms:
“[1] I refer to my directions of 1 May 2013 and note that I have received the
attached advice from Mr James.
[2] This advice does not meet the requirements of my directions.
[3] Evidence addressing Mr James’ position is to be provided to me by close of
business 8 May 2013.
[4] In the event that Mr James relies on a medical certificate, that certificate must
specifically state that Mr James was unfit to both attend the hearing on 1 May 2013
and was unable to advise the Commission of his inability to do so.
[5] Unless satisfactory evidence of this nature is provided to me by the nominated
date, I will determine the matter on the material before me.”
[9] No further advice was received from Mr James. Consequently, I have determined the
matter on the basis of the material provided in both the earlier proceedings and on 1 May
2013.
[10] In my first decision I stated:
“[17] .... I found neither Ms Cook nor Mr James to be credible witnesses. Ms Cook's
evidence and the advice of Mr James were both selective and characterised by such
substantial personal animosity to the extent that neither was particularly believable.
[11] The evidence of Ms Cook on 1 May 2013 has exacerbated those concerns. Further, the
documentation provided to me appears to contradict Mr James’ earlier evidence to me.
Consequently, in considering this matter I have relied wherever possible on documentation
provided to me rather than on the statements of the two protagonists.
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Findings and the Evidence
[12] The background to the application was addressed in some length in the first decision.
In summary, I have concluded that Ms Cook worked for Asia Pacific and its predecessor
business from February 2011 to 20 September 2012. Ms Cook promoted the Asia Pacific
cleaning business in South Australia and was involved in introducing and supervising the
cleaning work undertaken by franchise operators.
[13] The evidence of Ms Cook in both proceedings is that she was not paid from 30 July
2012, that she regularly requested that payments be made to her and that she sent a formal
letter of demand to Mr James on 19 September 2012. Ms Cook asserts that her employment
was terminated on the next day.
[14] Whilst there appear to be two versions of the termination advice sent to Ms Cook by
Ms James there is little effective difference. The advice of 20 September 2012, attached to Ms
Cook’s application states:
“.... Given there has been no new sales of significant value in line with your $125k
budget per month as per our agreement, the company as a result has been drawn down
to support your payments. The end result is its been a consistent struggle to meet the
companies financial requirements. I have reiterated the importance of new commercial
cleaning work required to keep the business moving forward. I have injected an initial
$60k then a business loan of $34k and sold my Classic car for $22k to support the
business until you won the new work that was required. As you can see I have invested
heavily into the business hoping for a return from your sales efforts.
Its easy for you to dismiss this and say you were doing operations but from an
operational aspect I think you know the amount of clients is no more than 6
inspections per week that could be realistically completed in a day. As you know I
contract to another company currently and I do 8-10 inspections ‘per day’, so this is
not an excuse for you. Since your involvement in operations I have only had 3
inspection reports emailed to me from you, I hope you have over 150 signed
inspection reports for me on your computer.
I’m not sure why the budget was not met as you promised, not for even one month! I
have given you my reasons for my own mistakes in the past but do you have a reason
why you never met the budget as you personally promised me in business and as a
friend? You can not say all the clients are happy because of you and would have been
lost without your intervention, you maintained the client relationships as you were
paid to do so. Do you think I should have paid you to lose them?
Anyone would ask why did I keep you on for so long then? The answer is three fold;
to maintain the existing client base from an operational level, win $125k in new
commercial cleaning work as agreed and out of respect for the long term friendship.
I was placed under further pressure when you sent through a personal video from 4
years ago to antagonise Daraneen. This was unacceptable and I’m still disappointed
over it. I’m still not clear why you would do this when you already know my situation
and past.
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Irrespective of this I cannot keep you going under Asia Pacific Cleaning Service, so
the business relationship is to cease.
I cannot be expected to cover the invoice attached when the services and budget were
not furnished by yourself. This is the same as a cleaning operator that did not clean
properly and the client does not pay.
This notice is effective immediately.”
[15] I have concluded that Asia Pacific has proposed three reasons why Ms Cook’s
employment arrangement was terminated. Firstly, Mr James asserts that Ms Cook did not
generate any sales of significant value in line with a monthly sales budget and inspection
requirement and that, as a consequence, her services could not be afforded. Secondly, Mr
James refers to a video sent by Ms Cook to a person referred to as Daraneen. It seems that this
person is, or was, an associate of Mr James. There is no dispute that the video was taken by
Ms Cook and apparently depicts Ms Cook and Mr James engaged in sexual activity. Finally,
Mr James separately asserts that Ms Cook “stole” several high-profile clients from Asia
Pacific in an inappropriate manner.
[16] To the effect that the first reason for the termination of Ms Cook’s employment might
be regarded as a genuine redundancy, this must be quickly discounted. There is no evidence
before me which establishes that the requirements of s.389 were met in this situation. Ms
Cook was dismissed for reasons related to her performance and actions.
[17] Within the credibility constraints I have already noted, I have considered the evidence
before me in the context of s.387 which states:
“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
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(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.”
Valid Reason
[18] Notwithstanding subsequent legislative changes, I have adopted the general approach
set out by Northrop J in Selvechandron v Petersen Plastics Pty Ltd2 in the following terms:
“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, commonsense
way to ensure that the employer and employee are treated fairly.”
[19] Ms Cook asserts that her role changed on a weekly basis from sales to operational
issues.3
[20] In the first decision I concluded that, at the time of the termination of her employment
Ms Cook worked under a contract signed and dated 15 June 2012. This contract refers to Ms
Cook as the Manager and Shareholder. The role description set out in this contract refers to
quoting for new cleaning work. It also states:4
“New work obtained will then be presented to the company to operate and/or sell. There
will be an operational aspect requirement from you until the right timing for our
budget is reached to integrate further operational support for the Manager &
Shareholder. This part of the role is to include client introduction / induction and
monitoring of the Contractors / Franchisee accordingly. The Manager & Shareholder
will be required to do a walk through with the Cleaning operator’s for the site
introduction & induction. Monthly inspections are required or more frequently is
requested by the clients.”
[21] The contract refers to sales targets in the following terms:
“Sales Targets (Pre GST)
$80,000 (pre GST) in new Commercial Cleaning contract turnover per calendar
month.”
[22] At least one of the monthly invoices provided by Ms Cook to Asia Pacific separately
refers to marketing services (charged at $1000 per week) and operations (charged at $500 per
week), but the majority of these invoices simply refer to marketing services.
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[23] Mr James evidence was that:
“Other tasks were asked of Ms Cook such as debt collections and operational activities
due to the shortfall in new commercial cleaning contracts Ms Cook was contracted to
provide. In good faith I was attempting to keep Ms Cook’s contract going by offering
other services her company to provide.”
[24] I am not satisfied that Asia Pacific has established that Ms Cook’s marketing or
reporting activities failed to meet established performance expectations. In this respect I have
noted the information about sales Ms Cook alleges she has achieved,5 but I am unclear about
the period within which these sales may have been achieved. The evidence of Mr James
appears to suggest that reduced expectations were acknowledged and accepted.
[25] Notwithstanding my reservations about the evidence, I am not satisfied that Asia
Pacific expressed concerns about Ms Cook’s level of sales such that this could represent a
valid reason for the termination of her employment. Had Asia Pacific specified concerns
about Ms Cook’s sales in the form of a warning to her, an alternative conclusion could have
been reached.
[26] In terms of the video sent by Ms Cook to an associate of Mr James (Daraneen), I have
concluded on the evidence before me that Ms Cook and Mr James had a sexual relationship
over some time. Ms Cook’s evidence is that the relationship with Mr James continued despite
the fact that she was not being paid and that it only stopped around the time she sent the
formal letter of demand on 19 September 2012.
[27] Ms Cook’s evidence was that she was contacted by Daraneen who gave her to
understand that she was also in a relationship with Mr James and that she then sent the video
to Daraneen by e-mail on 24 August 2012 and by SMS. In the e-mail6 Ms Cook stated:
“I’m so sorry for you he has been coming to Adelaide sleeping with me I have the prove
He has a severe Biopolar problem has had for years he has had 2 wifes and 3 kids
He persued me and broke up my relationship I wouldn’t touch him with a barge pole.
I have a 20% share in the business I will send you the agreement if you like so Im
struck unfortunately I wish you all the best you are just caught up in his horrible Game
Run as far as you can Or you will be so so hurt” (sic)
[28] Ms Cook’s evidence was that after she sent the video, Mr James telephoned her and
advised that he understood why she had sent the video and that Daraneen was a disgruntled
former girlfriend.
[29] The e-mails provided to me7 indicate that Daraneen then advised at least one Asia
Pacific client that Ms Cook was no longer working at Asia Pacific.
[30] On 29 August 2012 Mr James sent an e-mail8 to a concerned franchise holder which
appears to endorse Ms Cook’s ongoing role with Asia Pacific. This stated:
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“Thanks Jonathan, I appreciate your email and will call you tomorrow.
I will think about the offer and get back to you soon.
You and Janice are the best people to take control and build on the business.”
[31] Consequently, irrespective of the merits of Ms Cook’s actions in sending the video,
Mr James’ subsequent advice means that I cannot regard this as a valid reason for the
termination of Ms Cook’s employment nearly a month later as Mr James expresses clear
confidence in Ms Cook despite the video incident.
[32] Asia Pacific asserts that Ms Cook conspired with a franchise holder to “steal”
customers from Asia Pacific. There is no evidence before me that clearly establishes this. To
the extent that this was a reason for the termination of Ms Cook’s employment, I cannot
conclude that it was a valid reason.
[33] I think that the reason for the termination of Ms Cook’s employment was that she sent
a formal letter of demand9 seeking payment of amounts due to her since July 2012. Ms Cook
was dismissed on the following day. The sending of such a letter of demand cannot represent
a valid reason for employment termination.
[34] Accordingly I have concluded that there was no valid reason for the termination of Ms
Cook’s employment.
Notification of the reason
[35] The advice of the termination of Ms Cook’s employment refers to the alleged sales
shortfall and the video. There is no reference to the letter of demand which I have concluded
was the reason for the termination of Ms Cook’s employment. To this extent Ms Cook was
not advised of the reason for the termination of her employment.
Opportunity to respond
[36] Ms Cook was advised of the termination of the employment arrangement by e-mail.
She was not given an opportunity to respond to this termination of employment proposition.
Unreasonable refusal to allow a support person
[37] Ms Cook was not given the opportunity to have a support person in any discussions
because there were no such discussions.
Warnings relative to unsatisfactory performance
[38] There is no evidence before me to the extent that Ms Cook was warned that her work
performance was unsatisfactory.
Size of the employer’s business - impacting on procedures
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[39] I have noted that the size and the type of the Asia Pacific business is such that it had
no procedures to deal with a situation of this nature. Mr James appears to think that because
he calls an arrangement ‘the contract’, he can terminate that arrangement at will.
Access to Human Resource Management expertise
[40] I have concluded that Asia Pacific had no access to human resource management
expertise in reaching a conclusion about the termination of the services of Ms Cook.
Any other relevant factors
[41] Having already noted my concerns about the credibility of both Ms Cook and Mr
James, I do not consider any other matters to be relevant.
Conclusion - Harsh, Unjust or unreasonable
[42] I have concluded that the termination of Ms Cook’s employment was harsh in that it
occurred without a valid reason and substantially because she sought payments due to her. It
was unjust because the process followed lacked any form of procedural fairness and was
unreasonable because it occurred on unsubstantiated grounds.
Remedy
[43] Accordingly, pursuant to s.390, I have considered the remedies appropriate in these
circumstances. The primary remedy is reinstatement. That is simply not appropriate in this
situation. I have concluded that the unfairness of Ms Cook’s dismissal in the circumstances
means that an order for the payment of compensation is appropriate.
[44] Section 392 sets out the factors to which I must have regard. Notwithstanding my
reservations about her credibility, I endeavoured to address these factors with Ms Cook.
[45] There is no evidence before me that indicates that an order of the magnitude I am
proposing will affect the viability of the Asia Pacific business. Mr James’ attendance at the
hearing on 1 May 2013 could have enabled this to be addressed.
[46] Ms Cook had been employed for some 18 months. I do not consider this to be a long
time conducive to substantial compensation. Had Ms Cook not been dismissed I do not
consider that she would have remained an employee of Asia Pacific for very long at all. It is
clear that the employment and other relationships were severely stressed and that she had not
been paid for some weeks before 20 September 2013. Mr James’ concerns that she was not
meeting performance expectations meant that I do not consider it likely that Ms Cook would
have remained employed with Asia Pacific for more than a further month. During that time
she may, or may not have been paid her normal payment of $1000 per week. The contract
under which she worked10 refers to monthly payments but does not specify notice provisions.
[47] Ms Cook advises that since the termination of her employment she has unsuccessfully
sought other employment and has now set up her own business. She asserts that she did not
earn income in November or December 2012 but that since then she has earned about $625
per week. I note the advice that she has borrowed money from her mother to establish a
cleaning business and intends to operate this business using subcontractors. I have anticipated
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that this weekly income will continue for the foreseeable future including the time up to the
making of an order pursuant to this decision and the payment of any compensation amount.
Despite my reservations about her credibility, I have concluded that Ms Cook has made
reasonable endeavours to obtain alternative income.
[48] I have not made any deductions on the basis of misconduct as the foundation for this
has not been established. I have noted Ms Cook’s position that she was not paid for the eight
weeks before the termination of her employment. However this is not a matter within the
jurisdiction of the Commission and would require an action to recover those amounts.
[49] I have adopted the approach in Sprigg v Paul’s Licensed Festival Supermarkets11 and
have concluded that, but for the summary termination of her employment on 20 September
2013 Ms Cook was likely to have been employed for a further four weeks. I have not
determined that there should be any deduction from this amount and accordingly order
compensation for Ms Cook to the amount of $4000 gross. As I have concluded that Ms Cook
was an employee, I would expect Asia Pacific to deduct the appropriate tax obligations from
this amount for remittance to the Australian Taxation Office. This however is a matter
between Asia Pacific, Ms Cook and the Australian Taxation Office. An Order [PR536653] to
this effect will be issued.
Appearances:
J Cook on her own behalf.
Hearing details:
2013.
Adelaide:
May 1.
Printed by authority of the Commonwealth Government Printer
Price code C, PR536652
1 [2013] FWC 1641
2 (1995) 62 IR 371 at 373
OF FAIR WORK GOHIS 1 AUSTRALIA THE SEAL SENIOR DEPUTY PRESIDENT
10
3 Exhibit C3, para 2 (sic)
4 Exhibit C2
5 Exhibit C6
6 Exhibit B2
7 Exhibit C7, e-mail of 29 August 2012
8 Exhibit C9
9 Exhibit C8
10 Exhibit C2
11 AIRC, Print R0235, (24 December 1998)
