1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Paul Conicella
v
Phillip W Hill & Associates Pty Ltd T/A Hunter Legal & Conveyancing
(U2016/8234)
COMMISSIONER SAUNDERS NEWCASTLE, 21 NOVEMBER 2016
Application for relief from unfair dismissal – small business employer – non-compliance with
Small Business Fair Dismissal Code – valid reason for dismissal but failure to afford
procedural fairness – compensation ordered
[1] In the period from about December 2015 until about June 2016 there were difficulties
in the marital relationship between Mr Paul Conicella and his wife, Mrs Sue Conicella. In
about June 2016, their marital relationship irretrievably broke down. The difficulties in the
marital relationship between Mr and Mrs Conicella unsurprisingly spread into the small
workplace of Phillip W Hill & Associates Pty Ltd T/A Hunter Legal & Conveyancing (HLC),
for they were both employees, directors and shareholders of HLC.
[2] Mr Conicella was summarily dismissed as an employee by HLC on 30 June 2016. He
alleges that his dismissal was harsh, unjust and unreasonable. HLC denies those allegations.
The Hearing
[3] This matter was heard by me on 24 October 2016, 25 October 2016 and 1 November
2016. Mr Conicella gave evidence on his own behalf. Ms Lee-Anne Maree McAllister-Essex
(known as Ms McAllister), a director and employed solicitor of HLC, Ms Kristy Bidner, HLC
Office Manager/Business Development Manager, and Ms Lee-Ann Margaret Spencer, HLC
Personal Assistant, gave evidence on behalf of HLC.
[4] The parties consented to witness statements made by Ms Nadine Borrett, former HLC
Conveyancing Assistant, Ms Jessica Kinsley, HLC Conveyancing Assistant, and Ms Jessica
Stephens, HLC Conveyancing Assistant, on behalf of HLC, and a witness statement made by
Ms Danielle Deacon, former HLC Customer Relations and Area Manager, on behalf of Mr
Conicella, being admitted into evidence on the basis that the makers of those statements were
not available to give evidence on account of their significant reluctance to be involved in the
proceedings and subject to submissions being made as to the weight that should be given to
their witness statements.
[2016] FWC 7906
DECISION
E AUSTRALIA FairWork Commission
[2016] FWC 7906
2
Initial matters to be considered
[5] I am required by s.396 of the Fair Work Act 2009 (Cth) (the Act) to decide four
matters before I consider the merits of Mr Conicella’s application. There is no dispute
between the parties and I am satisfied on the evidence that:
(a) Mr Conicella’s application was made within the period required by s.394(2) of the
Act;
(b) Mr Conicella was a person protected from unfair dismissal; and
(c) HLC was a “small business employer” as defined in s.23 of the Act at the relevant
time. I will consider below whether Mr Conicella’s dismissal was consistent with the
Small Business Fair Dismissal Code (the Code); and
(d) Mr Conicella’s dismissal was not a case of genuine redundancy.
Small Business Fair Dismissal Code
[6] Section 388 of the Act provides:
“388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair
Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal
Code if:
(a) immediately before the time of the dismissal or at the time the person was
given notice of the dismissal (whichever happened first), the person’s
employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in
relation to the dismissal.”
[7] The Code declared by the Minister pursuant to section 388(1) of the Act is in the
following terms:
“Summary dismissal
“It is fair for an employer to dismiss an employee without notice or warning when the
employer believes on reasonable grounds that the employee’s conduct is sufficiently
serious to justify immediate dismissal. Serious misconduct includes theft, fraud,
violence and serious breaches of occupational health and safety procedures. For a
dismissal to be deemed fair it is sufficient, though not essential, that an allegation of
theft, fraud or violence be reported to the police. Of course, the employer must have
reasonable grounds for making the report.
[2016] FWC 7906
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Other dismissal
In other cases, the small business employer must give the employee a reason why he
or she is at risk of being dismissed. The reason must be a valid reason based on the
employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks
being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to
respond to the warning and give the employee a reasonable chance to rectify the
problem, having regard to the employee’s response. Rectifying the problem might
involve the employer providing additional training and ensuring the employee knows
the employer’s job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the
employee can have another person present to assist. However, the other person cannot
be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with
the Code if the employee makes a claim for unfair dismissal to Fair Work Australia,
including evidence that a warning has been given (except in cases of summary
dismissal). Evidence may include a completed checklist, copies of written warning(s),
a statement of termination or signed witness statements.”
[8] In Pinawin v Domingo1, the Full Bench considered whether, in the context of a
summary dismissal under the Code, the Commission had to be satisfied that the serious
misconduct which was the basis for the dismissal actually occurred:
“[29] … There are two steps in the process of determining whether this aspect of the
Small Business Fair Dismissal Code is satisfied. First, there needs to be a
consideration whether, at the time of dismissal, the employer held a belief that the
employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly
it is necessary to consider whether that belief was based on reasonable grounds. The
second element incorporates the concept that the employer has carried out a reasonable
investigation into the matter. It is not necessary to determine whether the employer
was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers
may approach the matter differently and form different conclusions, perhaps giving
more benefit of any doubt, but still be acting reasonably. The legislation requires a
consideration of whether the particular employer, in determining its course of action in
relation to the employee at the time of dismissal, carried out a reasonable
investigation, and reached a reasonable conclusion in all the circumstances. The
circumstances include the experience and resources of the small business employer
concerned.
1 [2012] FWAFB 1359
[2016] FWC 7906
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…
[38] Normally in order to hold a belief on reasonable grounds it will be necessary to
have a discussion with the employee about the perceived serious misconduct and pay
regard to the explanations and views given by the employee. We are concerned in this
case that no discussions took place about the implications of Mr Domingo’s conduct
for his future employment. However this is a very unusual case. The employer was
very small. The owners knew Mr Domingo well …”
[9] Another Full Bench of the Commission recently examined the summary dismissal part
of the Code in detail in Ryman v Thrash Pty Ltd2 and concluded as follows:
“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we
consider that the “Summary dismissal” section of the Code operates the following
way:
(1) If a small business employer has dismissed an employee without notice – that is,
with immediate effect – on the ground that the employee has committed serious
misconduct that falls within the definition in reg.1.07, then it is necessary for the
Commission to consider whether the dismissal was consistent with the “Summary
dismissal” section of the Code. All other types of dismissals by small business
employers are to be considered under the “Other dismissal” section of the Code.
(2) In assessing whether the “Summary dismissal” section of the Code was complied
with, it is necessary to determine first whether the employer genuinely held a
belief that the employee’s conduct was sufficiently serious to justify immediate
dismissal, and second whether the employer’s belief was, objectivity speaking,
based on reasonable grounds. Whether the employer has carried out a reasonable
investigation into the matter will be relevant to the second element.”
Compliance with the Code
[10] I am satisfied that HLC complied with the following aspects of the Code in relation to
Mr Conicella’s dismissal:
(a) On 30 June 2016, HLC dismissed Mr Conicella without notice – that is, with
immediate effect – on the ground that Mr Conicella had committed serious
misconduct;
(b) HLC genuinely believed that Mr Conicella had engaged in conduct sufficiently serious
to justify immediate dismissal. In this regard, I accept Ms McAllister’s evidence to the
effect that she genuinely believed that Mr Conicella had engaged in conduct
sufficiently serious to justify immediate dismissal. Her evidence in relation to her
genuine belief is consistent with the terms of the letter of termination sent to Mr
Conicella on 30 June 2016 and is supported by both her evidence concerning her
conversation with Mr Conicella on 22 June 2016 and the complaints communicated to
her by staff members about Mr Conicella on about 22 June 2016. Ms McAllister was
the principal decision maker in relation to the decision to dismiss Mr Conicella. Mrs
2 [2015] FWCFB 5264
[2016] FWC 7906
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Conicella agreed with Ms McAllister’s decision to dismiss Mr Conicella. It is clear
that each of Ms McAllister and Mrs Conicella, in their capacity as directors and senior
managers of HLC, had actual or apparent authority to make a decision to dismiss Mr
Conicella. By reason of section 793(2) of the Act, it follows that the state of mind of
Ms McAllister and Mrs Conicella in deciding to dismiss Mr Conicella can be
attributed to HLC;3
(c) The conduct in which HLC believed Mr Conicella had engaged and on which it acted
to dismiss him meets the definition of “serious misconduct” within the meaning of reg
1.07, in particular:
(i) Mr Conicella’s alleged conduct in threatening Ms McAllister on 22 June 2016
to “go legal” and “bring you all down”, and allegedly making similar threats to
Ms Bidner on 21 June 2016, caused serious and imminent risk to the
reputation, viability and profitability of HLC’s business; and
(ii) Mr Conicella’s alleged conduct in acting in an intimidating and threatening
way toward a number of HLC employees (Ms Bidner, Ms Kinsley, Ms
Stephens, and Ms Spencer) on about 21 June 2016 caused serious and
imminent risk to the health or safety of those employees.
[11] However, I find that HLC did not comply with the Code because HLC did not carry
out a reasonable investigation into the matter, with the result that HLC’s belief was not based
on reasonable grounds. I make that finding on the basis that, at no time prior to his dismissal,
did HLC put to Mr Conicella the allegations it relied on to terminate his employment, as set
out in the letter dated 30 June 2016 from HLC’s lawyers, Fletcher Pidcock, to Mr Conicella.
As a result, Mr Conicella did not have a chance to respond to those matters before the
decision was made to summarily dismiss him.
[12] Copies of typed complaints made by employees of HLC about Mr Conicella were sent
to him by Mrs Conicella by email on 23 June 2016. Mrs Conicella’s covering email to Mr
Conicella was in the following terms:
“Please see attached as requested. Leanne is still with clients so I have not seen her for
any investigation notes.”
[13] The investigation notes to which Mrs Conicella referred in her email of 23 June 2016
were notes taken by Ms McAllister in relation to her interviews with staff members on 22
June 2016. Those notes contain additional information and allegations to that set out in the
written complaints provided by staff to Ms McAllister on 22 June 2016. At no time were
those notes, or the allegations set out in them, provided to Mr Conicella prior to the
termination of his employment on 30 June 2016.
[14] Further, the alleged conduct relied on to dismiss Mr Conicella, as set out in the letter
of termination dated 30 June 2016, extends to events that allegedly occurred in the period
from December 2015 up until 22 June 2016. Mr Conicella was not given any chance to
respond to the whole range of allegations prior to his dismissal.
3 Ryman v Thrash at [43]
[2016] FWC 7906
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[15] Ms McAllister gave hearsay evidence that Mr Conicella, after having received copies
of the complaints made by staff against him, said to Mrs Conicella words to the effect that he
could “talk to employees as I like”. On the balance of probabilities I do not accept that
evidence, for the following reasons:
(a) Mr Conicella denied making such a statement to Mrs Conicella;
(b) The evidence is plainly hearsay;
(c) Mrs Conicella was not called by HLC to give evidence, nor was any attempt made to
tender any witness statement or affidavit made by her. In this regard, HLC relies on a
medical certificate dated 21 October 2016 in which Dr Nicholas Moncrieff states that
Mrs Conicella “has undergone a medical procedure will be unfit for work duties from
24 October 2016 to 30 October 2016 inclusive”. On the basis of this medical evidence
HLC contends that the decision not to call Mrs Conicella as a witness was not
“unexplained”; and
(d) Directions for the filing and service of witness statements were initially made on 9
August 2016 and then amended on 2 September 2016. The hearing dates of 24 to 26
October 2016 were set on 9 August 2016. At no time was any application made by
HLC to adjourn the hearing or to hear Mrs Conicella’s evidence at some other time.
No evidence was adduced as to the nature of Mrs Conicella’s “medical procedure” or
when she became aware she would undergo such a procedure. In those circumstances,
I draw a Jones v Dunkel inference that Mrs Conicella’s evidence in relation to any
conversation she may have had with Mr Conicella concerning the staff complaints sent
to Mr Conicella would not have assisted HLC.
[16] Even if, contrary to my finding set out in the previous paragraph, I had found that Mr
Conicella responded to the staff complaints by saying to Mrs Conicella words to the effect
that he could “talk to employees as I like”, that would not have altered my conclusion that
HLC did not carry out a reasonable investigation. Responding in such a way to the receipt of
some written staff complaints is not the same as being given a fair and reasonable opportunity
to respond to the whole range of allegations on which an employer intends to rely to
summarily dismiss an employee.
[17] HLC submits that in order to hold a belief on reasonable grounds it is not always
necessary to have a discussion with the employee about the perceived serious misconduct and
pay regard to the explanations and views given by the employee. I agree with that statement
of principle. Normally, but not always, will it be necessary to have such a discussion as part
of a reasonable investigation.4
[18] In the circumstances of this case, however, I am satisfied that a reasonable
investigation did require the communication to Mr Conicella of the allegations made against
him and the opportunity for him to respond to those allegations. The relevant circumstances
included the fact that:
4 Pinawin v Domingo at [38]
[2016] FWC 7906
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Mr Conicella was suspended on pay while “a review of the situation is conducted”.5
There was therefore very little risk during the period of the investigation of Mr
Conicella disrupting the workplace or acting in an inappropriate way towards the
staff who had made complaints against him;
Both HLC and Mr Conicella were represented by lawyers during the investigation
period. In fact, on 24 June 2016 Mr Conicella informed Ms McAllister by email that
all future contact with him should go through his solicitor. To that end, Mr Conicella
provided the contact details of his solicitor to Ms McAllister. The fact that both sides
were legally represented enhanced the prospect of meaningful responses being
provided by Mr Conicella to allegations of the kind set out in the letter of
termination dated 30 June 2016, together with further communication in relation to
the allegations and his responses thereto;
In these proceedings Mr Conicella has contested, and provided further information
and explanations in relation to, many of the allegations set out in the letter of
termination dated 30 June 2016. It follows that, had he been given the chance to do
so, it is likely that he would have provided such information and explanations to
HLC as part of its investigation. The exchange of such information and explanations
may have resulted in a different outcome. That is particularly so in circumstances
where Mr Conicella had not explained to HLC what legal action he was considering
taking against HLC or any of its officers or employees and Mr Conicella’s concerns
about the potential misuse of HLC monies by Mrs Conicella and/or Ms Bidner could
have been the subject of discussion, explanation and the exchange and consideration
of relevant documents and views; and
Mr Conicella’s summary dismissal had serious consequences for him, including his
automatic removal (pursuant to the Constitution of HLC) as a director of HLC, a
company in which he retains a shareholding, and immediate loss of income for Mr
Conicella.
[19] The fact that Ms McAllister obtained statements from relevant staff members,
conducted interviews with those staff members, and sought legal advice before making a
decision to terminate Mr Conicella’s employment lends weight to HLC’s argument that it
conducted a reasonable investigation. However, for the reasons set out above, those aspects of
the investigation do not, in my view, overcome the failure to put the allegations to Mr
Conicella and give him a chance to respond to them.
[20] Mr Conicella submits that Ms McAllister was not impartial and should not have
conducted the investigation. He submits that a third-party investigator should have been
engaged by HLC to conduct investigation. When this matter was put to Ms McAllister in
cross examination her response was that HLC could not afford to engage a third party to
conduct investigation. I accept her evidence in that regard. It is not unusual for a small
business to be in such a situation. In considering whether a reasonable investigation has been
undertaken, it is necessary to have regard to the “experience and resources of the small
business employer”.6 By considering the size of HLC’s business, its lack of resources and Ms
5 Exhibit R1 at annexure E
6 Pinawin v Domingo at [30]
[2016] FWC 7906
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McAllister’s limited knowledge of, or experience in, employment law, I have had regard to
such matters in this case.
[21] HLC, quite properly in my view, conceded in its final submissions that Ms McAllister
was not impartial. She had an interest in removing Mr Conicella from the business in which
she had a financial interest as a shareholder and employee, so that the employees of the
business could focus on the needs of the business and their clients. However, Ms McAllister
was the best placed person within the business to conduct the investigation. In light of the
acrimonious relationship between Mr and Mrs Conicella, both of whom were directors of
HLC, it would have clearly been inappropriate for either of them to conduct the investigation.
In addition, the fourth director of HLC, Mr Philip Hill, was overseas at the relevant time.
Although Ms McAllister was not impartial, I am satisfied that this is not a case in which she,
as the principal decision-maker, was so impartial that she could never have conducted a fair or
reasonable investigation.
A harsh, unjust and/or unreasonable dismissal?
[22] In light of my conclusion that Mr Conicella’s dismissal was not consistent with the
Code, I must now turn to consider whether Mr Conicella’s dismissal was harsh, unjust or
unreasonable, taking into account the criteria set out in s.387 of the Act.
[23] The ambit of the conduct which may fall within the phrase “harsh, unjust or
unreasonable” was explained in Byrne v Australian Airlines Ltd7 by McHugh and Gummow
JJ as follows:
“… It may be that the termination is harsh but not unjust or unreasonable, unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust because
the employee was not guilty of misconduct which the employee 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.”
Valid reason (s.387(a))
[24] The employer must have a valid reason for the dismissal of the employee, although it
need not be the reason given to the employee at the time of the dismissal.8 The reason for the
dismissal should be “sound, defensible and well founded”9 and should not be “capricious,
fanciful, spiteful or prejudiced.”10
[25] 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.11 The question the
7 (1995) 185 CLR 410 at 465
8 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8.
9 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
10 Ibid
11 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685
http://www.fwa.gov.au/documents/Benchbookresources/unfairdismissals/Walton_v_Mermaid_Dry_Cleaners.pdf
[2016] FWC 7906
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Commission must address is whether there was a valid reason for the dismissal related to the
employee’s capacity or conduct (including its effect on the safety and welfare of other
employees).12
[26] In cases relating to alleged conduct, the Commission must make a finding, on the
evidence provided, whether, on the balance of probabilities, the conduct occurred.13 It is not
enough for an employer to establish that it had a reasonable belief that the termination was for
a valid reason.14
[27] The letter of termination dated 30 June 2016 includes an assertion that Mr Conicella’s
conduct since at least December 2015 “has been both intimidating and threatening and
amounts to workplace bullying”. The conduct to which HLC referred in the letter of
termination was particularised in the letter as follows:
“…(c) your conduct, since at least December 2015, has been the subject of a number
of complaints, including in relation to incidents occurring:
(i) on 7 December 2015 – when you arrived at the Business
premises in a very agitated and irrational state. You were
yelling at staff – who, for their own safety, were asked to (and
did) leave the premises. By all accounts, your demeanour was
very menacing and threatening and you were yelling wildly. In
a confrontation, a director was forced to place herself between
yourself and another director, saying to you words to the effect
of: ‘Don’t you dare touch her!’ You were directed to leave the
office and take time off, with pay, to sort yourself out and deal
with your ‘anger management’ issues;
(ii) on about 10 December 2015 and whilst on leave – when you
telephoned and verbally abused a member of staff out of office
hours. That conduct caused the staff member to feel extremely
intimidated, anxious, upset and concerned. That staff member
subsequently sought counselling on account of your conduct;
(iii) in about February/March/April 2016 – when you would become
extremely agitated and yell in directors’ meetings – on account
of being brought to task and questioned about your job
performance. That conduct also culminated in your refusal to
take part in any decision–making in directors’ meetings;
(iv) on 6 April 2016 – when you verbally abused a staff member at
the front of the Business premises, during business hours and in
front of a client. That conduct was the subject of written
complaints by both the staff member and the client;
12 Ibid.
13 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213
[24].
14 Ibid
http://www.fwa.gov.au/documents/Benchbookresources/unfairdismissals/King%20v%20Freshmore%20(Vic)%20Pty%20Ltd%20-%20Print%20S4213%20-%20highlighted.pdf
[2016] FWC 7906
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(v) in April/May 2016, you refused to provide the Company’s
directors with information reasonably requested by them in
relation to the performance/discharge of your duties;
(vi) on 21 June 2016, you again attended the business premises –
where you were yelling, appeared agitated and domineering and
otherwise behaved in an intimidating and threatening manner.
Your conduct brought at least one staff member to tears. In
addition, at that time you unnecessarily incited fear mongering
by ‘warning’ various staff members with words to the effect of:
‘you’d better be careful of what you say to people, because it
comes back to me’ and ‘you shouldn’t trust the people you
think you can trust’;
(vii) again, on 21 June 2016 when, whilst at the business premises,
you were agitated, yelling at staff, appearing irrational,
intimidating and otherwise conducting yourself in a manner that
caused staff to be fearful you. In addition, at that time, you:
(A) raised serious allegations of impropriety against the office
manager and another director – accusing them of, amongst
other things, the ‘embezzlement’ of the Company’s funds;
(B) made repeated threats, including:
(AA) ‘to take you all down’;
(BB) ‘to take down the Business’;
(CC) ‘I’m going legal and you’re all going down’; and
(DD) ‘I’m going to ruin this business’.
(viii) your conduct at the Business premises escalated over the
morning of 21 June 2016, causing staff to feel concerned for
their safety;
(ix) on 22 June 2016 you telephoned one of the Company’s
directors and conveyed, with menace, the threat that: ‘I’m just
calling to tell you that it starts today. I am going legal and I will
bring you all down’. At that time you are directed to stay away
from the Business premises;
(x) as a result of your conduct, on 21 and 22 June 2016 the
Company:
(A) informed you that it had received formal complaints from
staff involving you;
[2016] FWC 7906
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(B) requested you to take temporary leave, on full pay, until a
review of the situation was conducted; and
(C) requested that you refrain from attending the office until
further notice,
(together, ‘The Company’s Request’)
(xi) despite the Company’s Request, on 23 June 2016 you attended
the Company’s bank, National Australia Bank:
(A) alleging that the Company’s director and practice manager
had misappropriated funds; and
(B) demanding access the Company’s accounts - despite not
being a signatory to them (excepting the trust account)
(xii) on about 24 June 2016 (and again despite the Company’s
Request), you contacted the Company’s IT provider, Pinpoint
IT Australia, threatening to ‘sue them if they did not restore
access to the Company’s email account’; and
(xiii) In addition, you have misused the Company’s car for personal
benefit, failed to meet set quotas and targets and failed to
account to the Company’s directors, since at least April 2016.”
[28] I will shortly make findings as to whether this alleged conduct occurred and, if so,
whether it constituted a valid reason for Mr Conicella’s dismissal. Before doing so, I will
consider the principles applicable to HLC’s reliance on alleged conduct on the part of Mr
Conicella that took place well before the dismissal.
Principles concerning alleged conduct prior to June 2016
[29] In Toll Holdings Ltd t/a Toll Transport v Johnpulle,15 a Full Bench of the Commission
considered (at [15]) the question of reliance by an employer on earlier conduct on the part of
an employee when making a later decision to dismiss the employee (references omitted):
“It may be accepted that, under the general law, an employer is disentitled to summarily
dismiss an employee for an earlier instance of misconduct on the part of that employee
where the employer with full knowledge of the misconduct had decided to retain the
employee in employment. It would be difficult to conclude for the purpose of s.387(a)
of the FW Act that an employer who had condoned misconduct by an employee in this
way and had thus lost the right of summary dismissal at law nonetheless had a valid
reason for dismissing that employee. The Commissioner therefore did not err in
declining to find that the instances of misconduct described in the second, third and
fourth allegations against Mr Johnpulle constituted valid reasons for his dismissal. It
may also be accepted that, for the purpose of s.387(h), the Commissioner was entitled
to treat as relevant that Toll had previously elected not to dismiss Mr Johnpulle for his
15 [2016] FWCFB 108
http://www.fwc.gov.au/decisionssigned/html/2016fwcfb108.htm
[2016] FWC 7906
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earlier instances of inappropriate behaviour towards Mr Karzi. However the fact that
Mr Johnpulle had (as the Commissioner found) engaged in the earlier instances of
inappropriate behaviour did not thereby become otherwise irrelevant in the
consideration of whether his dismissal was harsh, unjust or unreasonable. The
Commissioner’s own findings supported the conclusion, stated in Toll’s dismissal
letter, that Mr Johnpulle had engaged in a “pattern of unacceptable behaviour” towards
Mr Karzi and had persisted in that behaviour notwithstanding that he had been told by
the Team Leader to cease such behaviour and he had agreed to do so. That was
necessarily a highly material consideration which, while not necessarily being
determinative, was adverse to the conclusion that the dismissal was harsh, unjust or
unreasonable. It was also relevant to the issue of reinstatement, since it went to the
degree of risk that Mr Johnpulle might repeat such behaviour in future if reinstated.”
[30] The relevance of instances of prior misconduct by an employee to a finding of “valid
reason” under s.387(a) was also recently considered by a Full Bench of the Commission in
Diaz v Anzpac Services (Australia) Pty Limited [2016] FWCFB 7204 at [12]-[16] (references
omitted):
“[12] It is correct, as submitted on behalf of Mr Diaz, that there is some division in the
authorities concerning whether mitigating factors relevant to whether dismissal was a
proportionate sanction for any misconduct on the part of the relevant employee should
be considered under s.387(a) or under s.387(h), although we note that in the recent
decision of Sayers v CUB Pty Ltd, the Full Bench said that the “balance of authority
under the FW Act” was in favour of such mitigating factors being considered under
s.387(h). However, we consider that the authorities are clear that s.387(a) requires
consideration, in a case where misconduct is the reason for dismissal, first as to
whether the relevant conduct occurred, and second, if the conduct did occur, whether it
was of sufficient seriousness or gravity to constitute a valid reason for dismissal. In
this respect we endorse the analysis in Bista v Glad Commercial Cleaning at
paragraphs [34]-[42] in relation to the consideration required by s.387(a).
[13] As was made clear in Bista, assessing whether a particular instance of misconduct
is of sufficient gravity to constitute a valid reason for dismissal is not the same thing as
considering whether dismissal was a disproportionate penalty for the misconduct. The
former is “concerned with whether the conduct in question, considered in isolation,
was intrinsically capable of constituting a valid reason for dismissal”. The latter
involves taking into account a range of potential mitigating factors, which may include
matters such as the employee’s length of service and disciplinary record, and weighing
them against the gravity of the misconduct in order to determine whether dismissal
was too harsh a penalty.
[14] In respect of the former task, it is not correct, as Mr Diaz submits, that the
specific acts or omissions which constitute the relevant misconduct can be divorced
from contextual matters relevant to the seriousness of that conduct. In Sayers v CUB
Pty Ltd, the Full Bench made it clear that the “conventional position” in considering
the valid reason issue is to take into account contextual matters bearing upon the
degree of culpability on the part of the employee. The majority judgment in B, C and
D v Australia Post might be read as standing for the proposition that contextual
matters which operate to diminish the culpability of the employee should be taken into
account under s.387(h) rather than s.387(a). However that does not assist Mr Diaz,
[2016] FWC 7906
13
because the majority also made it clear that the following matters, which concern the
employee’s misconduct assessed from the employer’s perspective, arise for
consideration in relation to the valid reason issue under s.387(a) (emphasis added):
“The acts or omissions that constitute the alleged misconduct on which the
employer relied (together with the employee’s disciplinary history and any
warnings, if relied upon by the employer at the time of dismissal) but otherwise
considered in isolation from the broader context in which those acts or
omissions occurred.”
[15] It is clearly the case that the gravity of an employee’s misconduct is increased in
circumstances where the employee has previously engaged in conduct of the same or a
similar conduct and has been warned not to repeat it. To put this another way, the
employee’s defiance of the earlier warning(s) is an intrinsic aspect of his or her
misconduct, and necessarily forms part of the assessment of the gravity of the
misconduct. We do not consider that it is in any way controversial for such
circumstances to be taken into account in determining whether there is a valid reason
for dismissal under s.387(a). We therefore do not consider that Mr Diaz has
demonstrated any arguable case of error in respect of the approach taken by the Senior
Deputy President under s.387(a). Nor do we consider that Mr Diaz has identified any
question of general application or any disconformity in the authorities in this respect.
[16] We would add that Mr Diaz’s submission that the outcome of his case might
change depending upon the paragraph of s.387 under which his prior disciplinary
record was considered is both artificial and counter-intuitive. That prior disciplinary
record was, as the Decision makes clear, the critical factor which caused the Senior
Deputy President to conclude that the dismissal was not unfair. It seems to us to be
logically inexplicable that the dismissal could become unfair merely because that same
disciplinary record was considered under s.387(h) rather than s.387(a), since in either
case the degree of relevance of that disciplinary record and the weight to be assigned
to it in assessing the fairness of the dismissal should be the same. Section 387 does not
require any greater or lesser weight to be assigned to paragraph (a) as compared to
paragraph (h); provided each specified matter in s.387 is properly taken into account,
the weight to be assigned to them is a matter for the Commission member in the
exercise of his or her discretion.”
[31] In my view, the following principles are apparent from these authorities on the
question of reliance by an employer on earlier instances of misconduct on the part of an
employee when making a later decision to dismiss the employee:
where an employer with full knowledge of earlier instances of misconduct on the
part of an employee has decided to retain the employee in employment, those earlier
instances of misconduct cannot, of themselves, constitute valid reasons for dismissal;
however, the earlier instances of misconduct may be relevant to the question of
whether there was a valid reason for dismissal because they may increase the gravity
of later misconduct, particularly where the earlier misconduct was of the same or a
similar character and the employee was warned not to repeat it, thereby contributing
[2016] FWC 7906
14
to a finding that the reason(s) for dismissal were “sound, defensible and well
founded”;16 and
the earlier instances of misconduct and any warnings in relation thereto may also be
“relevant matters” (s.387(h)) to an assessment of whether the dismissal was too
harsh a penalty in the circumstances.
Alleged conduct in December 2015
[32] HLC had full knowledge of the alleged instances of misconduct on the part of Mr
Conicella in December 2015. It made a conscious decision to retain Mr Conicella in his
employment. Accordingly, the instances of alleged misconduct in December 2015 cannot, of
themselves, constitute valid reasons for dismissal.
[33] On Friday, 4 December 2015, the staff of HLC participated in a staff Christmas party
at a restaurant in Maitland. Ms McAllister gave evidence, which I accept, that one of the
female employees of HLC was following Mr Conicella “around and hanging on his every
word”.17 Over the weekend immediately following the Christmas party Mr and Mrs Conicella
argued, including about what happened at the Christmas party.
[34] On Monday, 7 December 2015, Mr Conicella arrived at HLC’s business premises. Ms
McAllister gave evidence, which I accept, that she heard Mr Conicella yelling from the front
reception area and “it was obvious he was angry from his body language and tone”.18 Ms
McAllister asked the staff to leave the business premises, which they did. Mr and Mrs
Conicella then proceeded to argue. Ms McAllister did not “interject unless asked a
question”.19 I accept Ms McAllister’s evidence that Mr Conicella was yelling during the
argument and Mrs Conicella was upset and her voice was raised. I reject the evidence given
by Mr Conicella in cross examination, first, that he was not yelling and his voice was only
“slightly raised”, and secondly, that there were raised voices but no yelling. At one point
during the argument Ms McAllister gave evidence, which I accept, that she became concerned
Mr Conicella was going to “get physical” with Mrs Conicella, so Ms McAllister stepped in
between them and said words to the effect: “Don’t you dare touch her”.20 To his credit, Mr
Conicella immediately took two steps back, calmed straight down and sat down for the
remainder of the argument.21 Both Ms McAllister and Mrs Conicella expressed the view
during the argument that Mr and Mrs Conicella could not continue working together because
it was having an adverse impact on the business. At the end of the argument Ms McAllister
told Mr Conicella to take some time off, with pay, and get himself some help to deal with his
issues.
[35] Mr Conicella denies that he took the balance of the year off work. I accept his
evidence in that regard, because Ms McAllister agreed that he did attend the office and
undertook some work in the period from 8 December 2015 to the end of the year. I find that
16 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
17 Ex 1 at [17]
18 Ex 1 at [20]
19 Ex 1 at [20]
20 Ex 1 at [20]
21 Ex 1 at [20]
[2016] FWC 7906
15
Mr Conicella did take some paid time off work in December 2015 and January 2016, but he
also did some work for HLC during that time.
[36] I am satisfied that Mr Conicella acted inappropriately in attending work on 7
December 2015, yelling in the workplace, acting in such a manner that it was reasonable for
Ms McAllister to direct staff to leave the workplace while Mr and Mrs Conicella argued
between themselves, and acting in an intimidating way toward Mrs Conicella in the
workplace. I am also satisfied that Mr Conicella was, in effect, warned that conduct of this
type was not satisfactory. The warning came in the form of a direction to take some paid time
off and get help to deal with his issues.
[37] On 10 December 2015, Ms Lee-Anne Spencer gave evidence, which I accept, that she
received a telephone call at home from Mr Conicella, who ranted and raved at Ms Spencer
that she had ruined his marriage, destroyed two other marriages, and had destroyed people’s
lives. Ms Spencer was understandably upset by this conversation and called Ms McAllister in
tears to tell her what had happened.22 Ms Spencer declined to put a formal complaint in about
the matter.
[38] Mr Conicella accepts that he spoke to Ms Spencer by telephone on 10 December 2015,
but denies that he said words to the effect of those alleged by Ms Spencer. I prefer Ms
Spencer’s evidence in relation to the content of this conversation. Ms Spencer gave evidence
in a direct and frank manner. She had a good recall of relevant events. The fact that she was
so upset by the telephone discussion and she immediately reported it to Ms McAllister
supports her version of events.
[39] I accept that Mr Conicella acted inappropriately in his communication with Ms
Spencer on the evening of 10 December 2015. I am also satisfied that Mr Conicella’s conduct
during that discussion had a sufficient connection with the employment relationship to
warrant it being relied on by HLC in making a decision about the termination of Mr
Conicella’s employment.23
Alleged conduct in February/March/April 2016
[40] HLC contends that in February, March and April 2016 Mr Conicella became
extremely agitated and yelled in directors meetings. It is also alleged that he refused to take
part in any decision–making in directors meetings.
[41] Mr Conicella was both a director and an employee of HLC. During directors meetings
he was wearing his directors’ “hat” and was not acting in his capacity as an employee of
HLC. For that reason, I am satisfied that it would not be appropriate to have regard to any
conduct on the part of Mr Conicella during a directors meeting in deciding whether there was
a valid reason to dismiss him as an employee or whether his dismissal as an employee was
harsh, unjust or unreasonable.
22 Ex R7 at [4]-[5]
23 Rose v Telstra Corporation Ltd (AIRC, Ross VP, 4 December 1998) Print Q9292, 11
[2016] FWC 7906
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Alleged conduct on 6 April 2016
[42] HLC alleges that on 6 April 2016 Mr Conicella verbally abused a staff member, Ms
Nadine Borrett, at the front of the business premises, during business hours and in front of a
client.
[43] Mr Conicella denies the allegation. He gave detailed evidence about the events leading
up to and including his discussion with Ms Borrett at the front of the business premises on 6
April 2016.24 It is clear from Ms McAllister’s evidence that Mr Conicella has denied the
allegation that he verbally abused Ms Borrett since the matter was first raised with him on 8
April 2016.25
[44] In support of the allegation HLC relies on:
(a) Ms McAllister’s “understanding” of what happened on 6 April 2016. Ms McAllister
accepts that she was not a witness to the event.26 It is clear that her “understanding” is
based on what she was told by one or more unidentified persons. In those
circumstances, I give little weight to Ms McAllister’s evidence in relation to this
allegation;
(b) Ms Borrett’s witness statement and the written complaint she gave to HLC on 8 April
2016.27 In circumstances where Ms Borrett was not available for cross examination
and Mr Conicella denies the serious allegations made by Ms Borrett, I am only willing
to give limited weight to the contemporaneous written complaint made by Ms Borrett;
and
(c) Ms Bidner gave evidence that on 20 April 2016 she received a phone call from a client
(who was not called to give evidence) who “mentioned that she was out the front of
our office and witnessed Paul and two girls screaming and yelling at each other in
front of the company cars. I believe she was referring to Danielle Deacon and Nadine
Borrett, as I witnessed the same thing”.28 Ms Bidner did not explain whether she
“witnessed’ these events from inside or outside the office, nor did she say whether she
heard any part of the conversation between Ms Borrett and Mr Conicella. I give
limited weight to Ms Bidner’s evidence in relation to this allegation.
[45] Ms Deacon’s witness statement deals with the events on 6 April 2016, but she does not
make any mention of any verbal abuse by Mr Conicella towards her sister, Ms Borrett.29 In
any event, Ms Deacon was not available for cross examination, with the result that I give her
evidence limited weight.
[46] The allegation that Mr Conicella verbally abused Ms Borrett on 6 April 2016 is of a
serious nature. It is, and has always been, denied by Mr Conicella. HLC did not conduct any
detailed investigation into the matter at the time that it occurred. For the reasons set out
24 Ex A1 at [18]-[20]
25 Ex R1 at [32]
26 Ex R1 at [31]
27 Ex R11
28 Ex R6
29 Ex A4 at [9]-[24]
[2016] FWC 7906
17
above, I am only prepared to give limited weight to the evidence relied on by HLC in relation
to the allegation. Accordingly, on the evidence before me I am not satisfied, on the balance of
probabilities, that Mr Conicella verbally abused Ms Borrett on 6 April 2016.
Alleged conduct in April/May 2016
[47] HLC alleges that in April or May 2016 Mr Conicella refused to provide HLC’s
directors with information reasonably requested by them in relation to the performance and/or
discharge of his duties.
[48] Ms McAllister gave the following evidence in support of this allegation:30
“At subsequent Directors’ Meetings in April and May, Paul would not be forthcoming
with information about his work performance, including where he had been and what
he had been doing in work hours. When pressure was applied in regards to his job
performance, as referral numbers were not on target, Paul would get defensive and
start yelling. Sue and I both had told him at these meetings that he was not being
profitable for the business and that if he did not improve his performance, that we
would not continue to carry him. At the time the Legal Department was also struggling
to meet targets and I was under pressure to improve performance. Paul would not be
accountable for his department, which now consisted of him with some assistance
from one of the Conveyancing assistants … yet he wanted both Sue and I to account to
him for our work numbers and profitability. These meetings ended with Paul yelling
and hurling abuse and accusations at Sue and Sue getting upset and leaving.”
[49] Ms Bidner attended various Directors Meetings for the purpose of taking notes. She
gave the following evidence in relation to what she observed at those meetings:31
“At various Directors Meetings, in which I was present for note–taking purposes, when
Paul was questioned about his team’s productivity and asked to put forward plans for
marketing and business development he would get irate and irrational. All departments
were being scrutinised, not just his, but he would very rarely give a response and
would talk around the issues and make excuses for their low productivity. Attached
and marked “B” are copies of Meeting Agendas and Meeting Notes.”
[50] The documents contained within attachment B to Ms Bidner’s witness statement
include Directors Meeting notes for February, March and April 2016, but not May 2016. The
Directors Meeting notes for April 2016 record that the meeting took place at Mr Hill’s house
and confirm that various operational and management issues were discussed. The notes do not
record or suggest that any discussions were held with Mr Conicella in relation to his
performance or conduct as an employee of HLC.
[51] In light of Ms McAllister’s evidence that the request for information from Mr
Conicella in April and May 2016 took place in “Directors Meetings” and the Directors
Meeting notes for April 2016 confirm that the matters discussed in that meeting were of an
operational and managerial nature, I am satisfied that Mr Conicella attended and participated
in those meetings in his capacity as a director of HLC. It follows that if there was any failure
30 Ex R1 at [35]
31 Ex R6 at [7]
[2016] FWC 7906
18
or refusal by Mr Conicella to respond in an appropriate way to any of the questions or
requests communicated to him in those meetings, they are matters which may have justified
some action being taken against Mr Conicella as a director of HLC, but HLC is not permitted
to rely on those matters to establish that it had a valid reason for Mr Conicella’s dismissal as
an employee of HLC or that his dismissal as an employee was not harsh, unjust or
unreasonable.
Alleged conduct in June 2016
[52] There is no dispute that on 21 June 2016 Mr Conicella attended the business premises
of HLC and spoke to Ms Stephens and Ms Kinsley. Mr Conicella says he informed Ms
Stephens and Ms Kinsley that his marriage with Mrs Conicella had irretrievably broken down,
they were no longer living together, and he did not wish them to discuss Mr and Mrs
Conicella’s personal issues inside or outside the office.32
[53] Ms Stephens’ contemporaneous note made on 21 June 2016 is in the following terms:
“… Paul came to the doorway and advised us to be careful of what we were saying to
people as it will be and has been repeated and that we shouldn’t trust the people we
think we can trust.
I told him if people were telling him I am saying anything I would like to know as I
haven’t said anything and I want to know if people are talking about me behind my
back, as it wouldn’t be the first time.
He told me that he wasn’t pointing fingers he was just warning us that we need to be
careful. I again told him that’s fine but if it was meant to be me then I want to know
and I left the room. As I left the room and was in the hallway I could hear him say that
Sue was the one that was bringing up their separation and not him and she was the one
who wanted it kept quiet etc. Jess K spoke to him as I left the hallway.
I was out the front reception desk when he came around to say he was just warning us
and it wasn’t personal. I told him I don’t care, I am sick of the drama and the crap that
goes on, that I wished I hadn’t even come here and what a great job they did with me
& Danielle. And I went into the kitchen.
Before Paul left I was in the kitchen and he came in to tell me what was said wasn’t
personal. I told him I don’t really care, I am over the drama – I’m here to work. I also
apologised if I spoke to him in an unprofessional manner as an employee. He asked
what I meant about me & Danielle and I told him that half the reason I came here was
to work with my best friend again as we enjoy it and work well together and that
didn’t turn out great. I also added that I’m not blaming anyone personally for that but I
stayed here to do a job and even that isn’t easy any more. I said I do not want to be a
part of anyone’s drama at all. Jam’a came in and asked if she could have me for a
minute then I walked out of the kitchen.”
[54] In her witness statement Ms Stephens confirms the truth and accuracy of her
contemporaneous note. She also explains that she was upset at the time of the incident
32 Ex A1 at [20]
[2016] FWC 7906
19
because she felt that she was “being brought into personal matters as I did not feel it was
appropriate or relevant to my employment”.
[55] Ms McAllister’s file note of her discussion with Ms Stephens on 22 June 2016 is in the
following terms:
“Jess had already done some notes about the incident. I felt that in her notes she was
downplaying the incident as I am aware that Paul had followed her out of the room and
cornered her in the kitchen, not once but twice. I am also aware that she had been
crying. She said that she hadn’t felt intimidated by Paul but was just angry that he was
bringing her into their personal matters again. She said she felt that his comments were
directed at her rather than anyone else which he then confirmed by following her out of
the room saying ‘I know who you talk to’. She said that she got a bit heated back at
Paul and may have spoken out of line which she apologised to him for but she felt that
he was putting her in a position where she had to defend herself.”
[56] Ms Kinsley’s contemporaneous note made on 21 June 2016 includes the following
information relevant to her discussion with Mr Conicella earlier that morning:
“Approx. 8:50am - Paul came into my room at the office, Jess Stephens was present, he
said that he thought we should know that any time we talk about Sue or him it always
gets relayed back to him and Sue. He said that it’s like a whole web inside the office
here and everything we say about them it gets relayed straight back to them both. So
we should consider that next time we talk about them. Jess Stephens said words to the
effect I want to know who you’re talking about if you’re referring to me, I want to
know what’s been said about me if that’s the case.
I said I don’t play this ‘he said she said’ bullshit so leave it. He said that the issues
between him and Sue were nothing to do with the office. I said then stop talking about
them here, he replied with when have I ever discussed the separation with any of you.
I said no but you argue all the time together at the office, we hear everything. He
continued to talk Jess Stephens about it as she left the room and walked out into
reception. I heard him say to her that I know who you talk to, I know you talk to her
and her and as he said that he pointed down the hallway and into Sue’s room.
I said just leave it! We’re here to do our job and that’s it.
Him and Jess continued to talk in the reception area/kitchen area.
Sue then arrived for the day he followed her into her room and stopped the door being
closed with his hand, I heard heated words but not sure exactly what was said. He
stormed down the hallway…”
[57] In her witness statement Ms Kinsley confirms the truth and accuracy of her
contemporaneous note made on 21 June 2016. She also states during the conversation on 21
June 2016 Mr Conicella “moved to stand in the doorway with his arms resting on each side of
the doorway… I found his behaviour and body language on that morning to be intimidating
although I did not feel that the comments were directed at me, rather Jessica Stephens.”
[2016] FWC 7906
20
[58] Ms McAllister’s file note of her discussion with Ms Kinsley on 22 June 2016 is in the
following terms:
“Jess had already done some notes about the incident. She told me that she felt
intimidated by Paul during the incident as he was standing in the doorway to her room
with his arms against the door frame blocking the only exit to the room with his chest
pushed out. She said he was trying to come across as if he was concerned that they
didn’t know that there were traitors in the office repeating what they say but Jess took
it as a general warning that ‘whatever you say will get back to me’ and she found that
intimidating.”
[59] Although Mr Conicella gives only a brief description in his witness statement of his
conversation with Ms Kinsley and Ms Stephens on 21 June 2016, there is no dispute between
the three participants to the conversation about the topics they discussed. I accept the
contemporaneous notes prepared by Ms Kinsley and Ms Stephens as an accurate account of
those discussions. In my view, the content of those discussions was not inappropriate. In a
small office in which there was much gossip about various employees’ personal lives, Mr
Conicella was making the point in his conversation with Ms Kinsley and Ms Stephens that
discussions of that kind get back to him. Mr Conicella was trying to stop the office gossip
concerning his marital problems with Mrs Conicella. He was always going to struggle to
achieve that objective in circumstances where he and Mrs Conicella had regularly brought
their relationship problems into the workplace and aired them for all to hear and see. For their
part, Ms Kinsley and Ms Stephens were informing Mr Conicella that they were sick of Mr
and Mrs Conicella’s problems being brought into the workplace and they just wanted to get
on with their jobs.
[60] In circumstances where neither Ms Stephens nor Ms Kinsley were available to be
cross examined and they do not say in their file notes that they were intimidated by Mr
Conicella on 21 June 2016, I am not prepared to, and do not, find that they were so
intimidated. Ms Stephens told Ms McAllister that she had not felt intimidated by Mr
Conicella on 21 June 2016. She also explains in her witness statement that she was upset on
21 June 2016 because she felt that she was “being brought into personal matters”, rather than
by reason of some conduct on the part of Mr Conicella. Ms Kinsley’s actions on the day do
not suggest she was intimidated. For example, she told Mr Conicella, a director of the
business in which she was employed, “don’t play this ‘he said she said’ bullshit so leave it”.
[61] There is a dispute between Mr Conicella and Ms McAllister as to what was said in the
discussion between the two of them and Mrs Conicella at the workplace on 21 June 2016. Ms
McAllister asserts that Mr Conicella was yelling and made threats that he was “going to go
legal”, the business will have to close, and Mrs Conicella will never work again after Mr
Conicella tells everyone what she has been doing to the business. Mr Conicella accepts there
were raised voices in the meeting, but not that he was yelling. Mr Conicella denies that he
said the business would have to close or that Mrs Conicella had been doing anything wrong in
the business. Mr Conicella accepts that he said he was “going to go legal”, but claims he
meant by those words that he was going to get legal advice.
[62] I prefer Ms McAllister’s evidence over Mr Conicella’s evidence in relation to this
conversation on 21 June 2016 for the following reasons:
[2016] FWC 7906
21
(a) First, Mr Conicella’s assertion that he said he was “going to go legal” but meant he
was going to get legal advice is not credible. The ordinary meaning of the expression
“go legal” suggests that something more than obtaining advice is intended. The
expression is usually used as a threat. Further, the context of an obviously heated
discussion in which there were at least raised voices and very sensitive matters were
being discussed suggests it is likely that Mr Conicella intended to make a threat; and
(b) Secondly, for the reasons set out below, I am satisfied that on 21 June 2016 Mr
Conicella said to Ms Bidner that he had evidence of her being involved in embezzling
money from HLC and he would “take us all down” and on 22 June 2016 Mr Conicella
said to Ms McAllister that “I am going legal and will bring you all down”. These were
all serious threats, in similar terms, made by Mr Conicella at about the same time as
his conversation with Ms McAllister and Mrs Conicella on 21 June 2016.
[63] There is no dispute that on 21 June 2016 Mr Conicella had a conversation with Ms
Bidner about a parcel which had been delivered in her name. In the parcel was a GPS tracker
which Mrs Conicella had purchased on-line and, so it would seem, intended to use to track Mr
Conicella’s whereabouts. Mr Conicella was understandably upset about this issue when he
confronted Ms Bidner about the parcel which had been delivered in her name. Ms Bidner did
not deny signing for the parcel but she explained that she knew nothing about its contents. I
accept Ms Bidner’s evidence that Mr Conicella proceeded to:
accuse her of lying about the parcel;
tell her that he had evidence of her being involved in embezzling money from the
company as there is a bank account in her name and that he would “take us all
down”; and
tell her that he was going immediately to his lawyers as the things that Mrs Conicella
had been up to would ruin the company and that she did not know who she was
dealing with.
[64] I also accept Ms Bidner’s evidence that she felt shaken and intimidated by Mr
Conicella’s conduct in this regard.
[65] I found Ms Bidner to be an impressive witness. She had a good recollection of events
and was firm in her beliefs and views about what had happened and the impact of Mr
Conicella’s conduct. She was not shaken in cross examination. Her recollection of her
conversation with Mr Conicella on 21 June 2016 was supported by a contemporaneous note
she made on 22 June 2016. Further, although she is employed by HLC as the Office
Manager/Business Development Manager, she is a far more independent witness than Mr
Conicella, Ms McAllister or Mrs Conicella (had she been called as a witness).
[66] On 22 June 2016, Ms McAllister received file notes from staff about what they had
observed and heard on 21 June 2016. Ms McAllister proceeded to interview staff in relation to
those matters on 22 June 2016.
[67] Prior to the receipt of any complaints or file notes from staff on 22 June 2016, I am
satisfied that Ms McAllister had formed the view that Mr Conicella should be “removed”
[2016] FWC 7906
22
from HLC. So much is clear from the following evidence given by Ms McAllister in her
witness statement:
(a) on 21 June 2016, Ms McAllister said to Mr Conicella words to the effect: “If you were
my husband and I found out what you’ve done then I wouldn’t be able to work with
you either. You can’t seriously think that you two can continue to work together.
There can’t be this kind of friction and arguing in the office. You can’t bring the staff
into your personal matters, there’s already been too much of that at Christmas with the
Dani thing”;33 and
(b) on 21 June 2016, Ms McAllister had a conversation with Mrs Conicella “about getting
an appointment with Greg, our accountant – who has the share agreements and the
company documents, to see what we could do about removing Paul [Mr Conicella]
from the company, as he had clearly not been effective in his role for quite some time
and was becoming useless as a Director”.34
[68] That Ms McAllister had formed the view on 21 June 2016 that Mr Conicella should be
“removed” from HLC does not mean that I should ignore either the allegations of what Mr
Conicella did after 21 June 2016 or Ms McAllister’s evidence in relation to those matters, but
it does, in my view, mean that Ms McAllister’s evidence in relation to the events that
allegedly took place on 22 and 23 June 2016 insofar as they concern Mr Conicella should be
treated with some caution. I have treated that evidence with the appropriate caution.
[69] Ms McAllister gave evidence that Mr Conicella telephoned her on 22 June 2016 and
spoke words to the following effect with menace in his voice:
“I’m just calling to tell you that it starts today. I’m going legal and will bring you all
down.”
[70] Ms McAllister says that she responded by telling Mr Conicella to “not go anywhere
near the office. Stay away”, at which time he hung up.
[71] In cross examination Mr Conicella initially said that he could not recall having a
telephone discussion with Ms McAllister on 22 June 2016. Mr Conicella denied saying to Ms
McAllister words to the effect of those alleged by her.
[72] Ms McAllister produced telephone records to corroborate her evidence that she
received a call on her mobile telephone from Mr Conicella on the morning of 22 June 2016.
This evidence persuades me that such a call did in fact occur. Further and notwithstanding the
caution I have exercised in considering Ms McAllister’s evidence, in light of the similarities
between the threats allegedly made by Mr Conicella to Ms McAllister in this telephone call on
22 June 2016 and the other threats made by him to Ms McAllister and Mrs Conicella on 21
June 2016 and Ms Bidner on 21 June 2016, together with the fact that Ms McAllister sought
legal advice in relation to these matters on the afternoon of 22 June 2016 from external
solicitors, I am satisfied on the balance of probabilities that a conversation between Ms
McAllister and Mr Conicella took place in the terms alleged by Ms McAllister on the
morning of 22 June 2016. I found Ms McAllister’s evidence in relation to this conversation to
33 Exhibit R1 at [42]
34 Exhibit R1 at [43]
[2016] FWC 7906
23
be credible and reliable. It clearly had a significant impact on her, as it would to any director
and shareholder of such a business.
[73] By letter dated 22 June 2016, Mr Conicella was directed to “take temporary leave,
with pay, until a review of the situation is conducted … you are to refrain from attending at
the office until further notice.”
[74] On 23 June 2016, Mr Conicella attended a local branch of the National Australia
Bank. He says that he did so for the purpose of making some enquiry about his mortgage, but
while he was there he requested from the National Australia Bank a copy of HLC’s office
bank statements. The bank manager refused to give Mr Conicella access to the statements on
the basis that he had never been a signatory on that account.
[75] Mr Conicella’s evidence in relation to what happened at the local branch of the
National Australia Bank on 23 June 2016 is not very convincing. On the previous day Mr
Conicella had been suspended from duty pending a review of various complaints and in the
past two days he had made serious accusations concerning the embezzlement of money and
threats that he would take the business down. Add to that the fact that Mr Conicella was not a
signatory to HLC’s office account and he knew, or ought to have known, that the bank
statements would be available within HLC’s records, but he did not request them from HLC.
On the basis of those matters, I do not accept Mr Conicella’s evidence that he was at the
National Australia Bank for the purpose of making enquiries about his home loan and just
happened to request a copy of the office account bank statements. This finding goes to Mr
Conicella’s credibility, but does not establish that he was acting inappropriately or in breach
of some duty or obligation in requesting a copy of the bank records from the National
Australia Bank. In that regard, I note that a director has the right to obtain or inspect a range
of information and documents from the company of which they are a director.35 I am satisfied
that on 23 June 2016 Mr Conicella was acting in his capacity as a director of HLC and on the
basis of a genuine belief held by him that he was entitled to inspect the office bank account
statements of HLC.
[76] On about 24 June 2016, Mr Conicella contacted HLC’s information technology
provider, Pinpoint Computer Services, for the purposes of finding out why his email account
for HLC had been disconnected and why he was not getting any work emails on his mobile
phone. Mr Conicella was informed that Pinpoint Computer Services had received instructions
from HLC to change all passwords and all accounts and that Mr Conicella’s emails had been
forwarded to another staff member of HLC. Mr Conicella was upset about this and had not
previously been told by HLC that any such change would or might be made. HLC alleges that
Mr Conicella threatened to sue Pinpoint Computer Services if they did not restore his emails.
The only evidence in support of that assertion is Ms McAllister’s hearsay evidence of her
discussion with an unnamed manager at Pinpoint. On the basis of that evidence, I am not
prepared to, and do not, make a finding that Mr Conicella made such a threat to Pinpoint. I am
satisfied that Mr Conicella did not act appropriately in relation to his communications with
Pinpoint Computer Services concerning this issue.
[77] The final allegation in the termination letter is that Mr Conicella “misused the
Company’s car for personal benefit, failed to meet set quotas and targets and failed to account
to the Company’s directors, since at least April 2016”. No detailed or persuasive evidence
35 See, for example, s.198F of the Corporations Act.
[2016] FWC 7906
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was adduced in relation to these very broad allegations. In those circumstances, I am not
satisfied that this allegation is made out on the evidence adduced in these proceedings.
Conclusion as to valid reason
[78] I am satisfied that Mr Conicella acted inappropriately on 21 and 22 June 2016 in
making serious threats towards, and seeking to intimidate, Ms Bidner, Ms McAllister and Mrs
Conicella. His conduct in that regard gave HLC a sound, defensible and well-founded reason
for his dismissal.
[79] I am also satisfied that Mr Conicella acted inappropriately in December 2015 in the
manner set out above. HLC was aware of this conduct at the time and made a conscious
decision to continue Mr Conicella’s employment. HLC cannot, therefore, rely on the
December 2015 conduct per se as a valid reason for dismissal, but it increases the gravity of
later misconduct in June 2016, thereby contributing to a finding that the reasons for dismissal
were sound, defensible and well founded. For these reasons, I find that there was a valid
reason for Mr Conicella’s dismissal related to his conduct.
Notification of the valid reason and opportunity to respond (s.387(b)&(c))
[80] Notification of a valid reason for termination must be given to an employee protected
from unfair dismissal before the decision is made36, and in explicit37 and plain and clear
terms.38 In Crozier v Palazzo Corporation Pty Ltd a Full Bench of the Australian Industrial
Relations Commission dealing with a similar provision of the Workplace Relations Act 1996
stated the following (at [73]):
“As a matter of logic procedural fairness would require that an employee be notified of
a valid reason for the termination before any decision is taken to terminate their
employment in order to provide them with an opportunity to respond to the reason
identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it
was sufficient to notify employees and give them an opportunity to respond after a
decision had been taken to terminate their employment. Much like shutting the stable
door after the horse has bolted.”
[81] An employee protected from unfair dismissal should be provided with an opportunity
to respond to any reason for their dismissal relating to their conduct or capacity. This criterion
is to be applied in a common sense way to ensure the employee is treated fairly and should
not be burdened with formality.39
[82] Mr Conicella was notified of the reasons for his dismissal in the letter of termination
dated 30 June 2016. However, for the reasons set out above in relation to my finding that
HLC did not undertake a reasonable investigation, I am satisfied that Mr Conicella was not
notified of those reasons before the decision was made to terminate his employment, nor was
he given any opportunity to respond to such reasons.
36 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]
37 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151
38 Previsic v Australian Quarantine Inspection Services Print Q3730
39 RMIT v Asher (2010) 194 IR 1 at 14-15
[2016] FWC 7906
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Unreasonable refusal by the employer to allow a support person (s.387(d))
[83] Where an employee protected from unfair dismissal has requested a support person be
present to assist in discussions relating to the dismissal, the employer should not unreasonably
refuse that person being present.
[84] There is no positive obligation on an employer to offer an employee the opportunity to
have a support person:
“This factor will only be a relevant consideration when an employee asks to have a
support person present in a discussion relating to dismissal and the employer
unreasonably refuses. It does not impose a positive obligation on employers to offer an
employee the opportunity to have a support person present when they are considering
dismissing them.”40
[85] Apart from his discussions with Ms McAllister leading up to his suspension on pay
from 22 June 2016, Mr Conicella did not have any discussions with Ms McAllister or any
other person on behalf of HLC in relation to his dismissal or the reasons for it. Accordingly,
the issue of a support person being present did not arise.
Warnings regarding unsatisfactory performance (s.387(e))
[86] Where an employee protected from unfair dismissal is dismissed for the reason of
unsatisfactory performance, the employer should warn the employee about the unsatisfactory
performance before the dismissal.
[87] Save for an alleged failure to “meet set quotas” and “account to the Company’s
directors, since at least April 2016”, the balance of the reasons for dismissal set out in the
letter of termination relate to Mr Conicella’s alleged conduct, rather than his performance.
[88] Because I have already found that Mr Conicella did not, on the basis of the evidence
adduced in these proceedings, fail to “meet set quotas” or “account to the Company’s
directors, since at least April 2016”, the existence or otherwise of warnings is not relevant.
Impact of the size of the employer’s enterprise on procedures followed (s.387(f))
[89] It is clear that HLC is a small business. It employed about 10 employees, including Mr
Conicella, at the time of his dismissal. The small size of HLC’s business undoubtedly
impacted on the procedures followed in effecting the dismissal, but nonetheless there was no
good reason why HLC could not have given Mr Conicella an opportunity to respond to
allegations made against him prior to deciding to summarily dismiss him.
Absence of dedicated human resources management specialist/expertise on procedures
followed (s.387(f))
[90] Like many small businesses, HLC did not, at the time of Mr Conicella’s dismissal,
have dedicated human resource management specialists or expertise. However, that did not
40 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542].
[2016] FWC 7906
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excuse it from failing to afford Mr Conicella the opportunity to respond to the allegations
made against him.
Other relevant matters (s.387(h))
[91] Section 387(h) of the Act provides the Commission with a broad scope to consider any
other matters it considers relevant.
[92] The impact of the dismissal on Mr Conicella’s personal and economic circumstances
is a relevant consideration in this matter. Mr Conicella was summarily dismissed. He has not
been able to obtain alternative employment, despite his efforts to do so. Further, the other
directors of HLC proceeded to remove Mr Conicella as a director of HLC following his
dismissal, on the basis that the Constitution of HLC permitted the removal of a director who
was no longer an employee. This means that Mr Conicella is now a minority shareholder in
HLC, but he has little control over HLC because he is no longer an employee or director of
the company. However, the seriousness of Mr Conicella’s misconduct in both December 2015
and June 2016 militates against a finding of harshness.
[93] Mr Conicella was employed by HLC for a relatively short period of time, namely 22
June 2015 to 30 June 2016.
[94] It is also relevant that Mr Conicella’s dismissal was closely related to a breakdown in
his marriage with Mrs Conicella and the impact that had on HLC’s business.
Conclusion as to whether the dismissal was unfair
[95] Having considered each of the matters specified in section 387 of the Act, I am
satisfied the dismissal of Mr Conicella by HLC was unreasonable because HLC failed to
afford Mr Conicella procedural fairness in relation to the procedures leading up to the
decision to summarily dismiss him.
Remedy
[96] In light of my findings that Mr Conicella was protected from unfair dismissal, and that
his dismissal was unreasonable, it is necessary to consider what, if any, remedy should be
granted to him.
[97] Mr Conicella seeks the remedy of compensation. He contends that reinstatement
would be inappropriate because he does not have any trust or confidence in HLC. I agree, in
light of the small size of HLC’s business and the inability of Mr and Mrs Conicella to work
together following their marriage breakdown. I am therefore satisfied that reinstatement is
inappropriate in this case.
[98] A compensation remedy is designed to compensate an unfairly dismissed employee in
lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the
bounds of the statutory cap on compensation that is to be applied.41
41 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]
http://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB3512.htm
[2016] FWC 7906
27
[99] Having regard to the fact that Mr Conicella has suffered financial loss as a result of his
unfair dismissal, I consider that an order for payment of compensation to him is appropriate in
all the circumstances of this case.
[100] It is necessary therefore for me to assess the amount of compensation that should be
ordered to be paid to Mr Conicella. In assessing compensation, I am required by section
392(2) of the Act to take into account all the circumstances of the case including the specific
matters identified in paragraphs (a) to (g) of this subsection. In undertaking this task, I shall
use the established methodology for assessing compensation in unfair dismissal cases which
was elaborated upon in the context of the current Act in Bowden v Ottrey Homes Cobram and
District Retirement Villages Inc (Bowden).42
Remuneration Mr Conicella would have received, or would have been likely to receive, if he
had not been dismissed (s.392(2)(c))
[101] Mr Conicella submits that he would have been employed by HLC for at least three
months, and potentially for as long as six or twelve months had he not been unfairly
dismissed on 30 June 2016.
[102] HLC submits that Mr Conicella would have remained employed for no longer than
one to two months had he not been dismissed on 30 June 2016.
[103] I find on the balance of probabilities that Mr Conicella would have remained
employed by HLC for a further period of 10 weeks had he not been dismissed on 30 June
2016, for the following reasons:
(a) There is no dispute that the marital relationship between Mr and Mrs Conicella had
been problematic since about late 2015, many of those problems had spilt over into the
workplace of HLC, the marital relationship irretrievably broke down in about June
2016, and the relationship between them has been acrimonious since at least that time.
In circumstances where they both worked in, and were directors of, a small business
and their marital problems had continually spilt over into the workplace since late
2015, there was no realistic prospect that they would have been able to continue to
work together in a productive or meaningful way over the medium or long term after
30 June 2016. It was for those reasons that Mr Conicella had been seeking alternative
employment since early 2016.43 In addition, Ms McAllister gave unchallenged
evidence, which I accept, that in about early June 2016 Mrs Conicella informed her
that Mr and Mrs Conicella had separated, Mr Conicella had moved out of the
matrimonial home, and Mr Conicella would remain with HLC until he found another
job;44
(b) Even if Mr Conicella had not found an alternative job within a short period after 30
June 2016, I am satisfied that he would have been dismissed by HLC reasonably
shortly after 30 June 2016, either on the basis of the kind of conduct in which I have
found he engaged on 21 and 22 June 2016 or because his conflict with Mrs Conicella
was incapable of resolution and was affecting the performance of work and HLC’s
42 [2013] FWCFB 431
43 Exhibit R1 at [26]
44 Exhibit R1 at [36]
[2016] FWC 7906
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relationships with its clients and referrers. As to the latter ground of potential
dismissal, I note that an employer may have a valid reason for dismissal on the basis
of on-going interpersonal conflict between two employees in a small workplace where
the conflict, for which each of the two employees were at fault, had reached the point
where it had become incapable of any resolution and was affecting the performance of
work.45 Even though the relationship between Mr and Mrs Conicella had not caused a
problem in the HLC business for the couple of weeks prior to 20 June 2016,46 I am
satisfied, having regard to the long and difficult history of conflict between Mr and
Mrs Conicella spilling into the workplace, that it would have been untenable for Mr
and Mrs Conicella to continue to work in the same small business. The fact that the
situation might equally have been resolved by the dismissal of Mrs Conicella could
not by itself render Mr Conicella’s dismissal unfair in such circumstances;47 and
(c) Mr Conicella was only employed by HLC for just over a year at the time he was
dismissed.
[104] In calculating the remuneration Mr Conicella would have earned had he not been
dismissed, it is necessary to identify what his rate of payment would have been. The evidence
establishes that Mr Conicella’s average gross weekly earnings as an employee with HLC were
$1,474.03 (including superannuation) per week. I am of the view that Mr Conicella would
have been likely to receive such weekly payments for 10 weeks after 30 June 2016 had he not
been dismissed at that time.
[105] However, I also need to have regard to the fact that Mr Conicella received from HLC
on his termination a “goodwill” payment of $1,587.39 (including superannuation) and one
additional day’s pay of $294.8148 (including superannuation), being payment for 1 July 2016
even though Mr Conicella was dismissed on 30 June 2016. Mr Conicella would not have
received these extra payments had his employment continued beyond 30 June 2016.
[106] Mr Conicella would therefore have received $12,858.10 gross in remuneration in the
10 weeks following 30 June 2016 had he not been dismissed at that time (10 weeks x
$1,474.03 – ($1,587.39 + $294.81) = $12,858.10).
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[107] Mr Conicella undertook paid work for Fire and Rescue NSW during his employment
with HLC. He has continued such work since his dismissal on 30 June 2016, however the
evidence shows that Mr Conicella has, on average, received an additional $133 gross per
week in earnings from Fire and Rescue NSW in the period since his dismissal from HLC
compared to the period prior to his dismissal. I am satisfied that Mr Conicella would not have
earned that additional income from Fire and Rescue NSW had he remained in full time
employment with HLC in the 10 weeks following his dismissal on 30 June 2016.
[108] Mr Conicella has not received any other remuneration since the termination of his
employment with HLC.
45 Lumley v Bremick Pty Ltd Australia t/a Bremick Fasteners [2014] FWCFB 8278 at [12]-[17]
46 Ex R1 at [40]
47 Ibid at [15]
48 $1,474.05 per week / 5 working days in a week = $294.81
[2016] FWC 7906
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[109] The calculation at this point is as follows:
(a) $12,858.10 (gross remuneration Mr Conicella would likely have earned had he not
been dismissed by HLC and instead continued to be employed by HLC for 10 weeks
after 30 June 2016)
(b) Less $1,330 (additional gross remuneration earned from Fire and Rescue NSW in the
10 week period after 30 June 2015 (10 x $133 = $1,330))
(c) Subtotal = $11,528.10
[110] This calculation is intended to put Mr Conicella in the position he would have been in
but for the termination of his employment.49
Other matters (s.392(2)(g))
[111] It is necessary to consider whether to discount the remaining amount for
"contingencies". This step is a means of taking into account the possibility that the occurrence
of contingencies to which Mr Conicella was subject might have brought about some change in
earning capacity or earnings.50 Positive considerations which might have resulted in
advancement and increased earnings are also taken into account.
[112] The discount for contingencies should only be applied in respect to an “anticipated
period of employment” that is not actually known, that is a period that is prospective to the
date of the decision.51 In this case, there is no such period that is prospective to the date of the
decision.52
[113] I do not consider that there should be any adjustments for “contingencies” in the
circumstances of this case.
[114] I have considered the impact of taxation, but I prefer to determine compensation as a
gross amount and leave taxation for determination.
Viability (s.392(2)(a))
[115] There was no evidence that any particular amount of compensation would affect the
viability of HLC’s business. No adjustment will be made on this account.
Length of service (s.392(2)(b))
[116] I consider that Mr Conicella’s period of service with HLC (just over 12 months) does
not in all the circumstances justify any increase or reduction to the amount of compensation
otherwise payable.
49 Bowden at [24], citing Ellawala v Australian Postal Corporation Print S5109 at [35]
50 Ellawala v Australian Postal Corporation Print S5109 at [36]
51 Enhance Systems Pty Ltd v Cox PR910779 at [39]
52 10 weeks after 30 June 2016 is 8 September 2016
[2016] FWC 7906
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Mitigation efforts (s.392(2)(d))
[117] I am satisfied that Mr Conicella has made reasonable attempts to mitigate his loss. He
has applied for many jobs since his dismissal on 30 June 2016, but has not yet secured
alternative full time employment. I will make no adjustment on this score.
Misconduct (s.392(3))
[118] For the reasons set out above, I am satisfied that Mr Conicella engaged in misconduct
and his misconduct contributed to HLC’s decision to dismiss him. For that reason, I will
reduce the amount I would otherwise order under subsection 392(1) by 10%, which I consider
to be an appropriate reduction on account of the misconduct. The amount then becomes
$10,375.29 ($11,528.10 – 10% = $10,375.29)
Shock, Distress (s.392(4))
[119] I note that the amount of compensation calculated does not include a component for
shock, humiliation or distress.
Compensation cap (s.392(5)&(6))
[120] The amount of $10,375.29 is below the compensation cap.
Instalments (s.393)
[121] No application was made to pay any compensation by instalments. I do not consider
that payment by instalments is warranted.
Conclusion on remedy
[122] In my view, the application of the Sprigg formula does not, in this case, yield an
amount which appears either clearly excessive or clearly inadequate. Accordingly, there is no
basis for me to reassess the assumptions made in reaching the amount of $10,375.29.53
[123] For the reasons set out above, I am satisfied that a remedy of compensation in the sum
of $10,375.29 in favour of Mr Conicella is appropriate in the circumstances of this case. I will
issue an order [PR587720] to that effect.
COMMISSIONER
53 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32].
THE FAIR WORK AIR NORK C OMMISSION KLIA SEX THE SEAL OF THE
[2016] FWC 7906
31
Appearances:
Mr B Taylor, of counsel, together with Ms A Williams, solicitor from Arnold Lawyers, on
behalf of the applicant;
Mr M Weightman, of counsel, together with Mr N Pidcock, solicitor from Fletcher Pidcock
Lawyers, on behalf of the respondent.
Hearing details:
2016.
Newcastle:
October, 24 & 25;
November, 1.
Printed by authority of the Commonwealth Government Printer
Price code G, PR587120
